Our practice is located outside of the Perth CBD and because of this our hourly rates are 20% lower than the standard rates charged by most Perth law firms. Our rates are extremely competitive compared to the rates charged by other commercial law firms.
Giumelli v Giumelli WASC 259
- The way in which assets are to be distributed on final settlement of accounts consequent upon dissolution of a partnership is covered by s 57 of The Partnership Act. That section reads as follows:
57. Rule for distribution of assets on final settlement of accounts
In settling accounts between the partners after a dissolution of partnership, the following rules shall, subject to any agreement, be observed:
- Losses, including losses and deficiencies of capital shall if necessary, by the partners individually in the proportion in which they were entitled to share profits.
- The assets of the firm, including the sums, if any, contributed by the partners to make up losses or deficiencies of capital, shall be applied in the following manner and order:
- In paying the debts and liabilities of the firm to persons who are not partners therein.
- In paying to each partner rateably what is due from the firm to him for advances as distinguished from capital.
- In paying to each partner rateably what is due from the firm to him in respect of capital.
- The ultimate residue, if any, shall be divided among the partners in the proportion in which profits are divisible.
Example Given By Master Sanderson
The way in which this might operate in practice can be illustrated in this way. Assume a partnership was commenced by two individuals on 1 July 2000. One individual contributed $100,000 and the other contributed $200,000. It was agreed between them that they would be equal partners. The parties traded for 12 months and agreed to terminate their partnership as at 30 June 2001. It was found that the assets of the partnership were $500,000. Applying s 57, each of the partners would have their capital repaid to them - in the one case $100,000, in the other, $200,000. The remaining partnership assets - the "ultimate residue" - would then be divided between them equally because they were equal partners. The end result then would be that one partner would be left with $200,000 and the other partner would be left with $300,000. 
Of course, in practice things become somewhat more complex. Suppose, for instance, to develop the above example, the partner who contributed $100,000 drew throughout the 2000/2001 financial year $100,000. (Such an amount would generally be referred to by the partners as "drawings".) Suppose further that the partnership did not terminate on 30 June 2001 but continued on.
When the accounts were drawn for 30 June 2001 the profit to which the second partner was entitled would have to be treated in the accounts in some way. There are two possible options. First, the capital account of the second partner could be adjusted to reflect his entitlement to the profit. That would mean his capital account would move from $200,000 to $300,000. Alternatively, the undrawn profit could be designated as a loan by the partner to the partnership - an "advance" to use the language of s 57(b)(2) of The Partnership Act. Either way, the demands of double-entry bookkeeping require that the accounts reflect the value of the partnership and the entitlement of each of the parties to the assets. 
It is clear from s 57(a) that all payments made by the partners which are properly characterised as made on behalf of the partnership, are to be totalled up and borne equally between them: Fletcher Nominees Pty Ltd v SGMC Pty Ltd  WASC 279, .
Williams v Nicoski  WASC 131.
On the taking of the accounts, a partner is entitled to an allowance for work and skill. This should be a liberal allowance. 
Section 34(5) of the Partnership Act provides that subject to agreement to the contrary", every partner may take part in the management of the partnership business, and shall attend diligently to the partnership business, and shall not be entitled to any remuneration for acting in the partnership business." 
This rule recognizes the rule that applied before the Act came into operation. As stated, it applies subject to agreement between partners to the contrary. It also has exceptions which applied both before and after the Act came into operation. .
In Airey v Borham (1861) 29 Beav 620; 54 ER 768, two partners had agreed to devote their whole time to the partnership business, but later quarrelled, with the result that one of them was left to carry the business on alone. The partnership was ultimately dissolved and an inquiry was directed in order to ascertain what allowance ought to be made to him for so doing. Such a claim is still maintainable in an appropriate case". 
In this case, the first defendant was largely responsible for the profits of the partnership prior to the ending of the partners' personal relationship on 22 December 1997. After 22 December 1997 and until 19 April 1999 when the partnership was dissolved, she was solely responsible for the business of the partnership.
Conclusions From Williams v Nicoski
- It follows that the award of an allowance is not to be treated as a means of obtaining remuneration for all the time and expense incurred in earning the profits of the partnership in the accounting period. It is but a recognition in equity of the additional work and skill that has been required to apply in earning the profits of the business during the accounting period. Possibly it may not be a great sum, but that is for the Master to assess.
- The award of such an allowance is open at equity and on the proper construction of s 34(5) of the Act. Accordingly, the provision of such an allowance may be made in conformity with s 6 of the Act.
Liability limited by a scheme approved under Professional Standards Legislation.