Click here for PDF of this article

Commercial Litigation: Defendant Walks Away With The Money After Plaintiff Admits Liability

Berrigan Doube Lawyers were successful in obtaining a highly favourable, last-minute settlement in a hotly contested business partnership dispute that began with our client as the Defendant and ended up with them walking away with a substantial cash settlement.

Our client was one of two partners in a business partnership that had operated a successful retail outlet. The Plaintiff was the other partner in the business. In mid-2004, the partnership’s lease of the store was allowed to expire through a failure by the partnership to exercise a valuable option to renew the lease. The store was subsequently leased by the landlord to a third party at great commercial loss to the partnership.

The Plaintiff issued proceedings against our client for breach of an alleged Partnership Agreement. The Plaintiff claimed that our client had entered into a partly written and partly oral agreement, the effect of which would have been to indemnify the Plaintiff against any loss in connection with the business. Our client’s version of the facts strongly refuted the existence of any such agreement and we prepared an appropriate defence with evidence to be given by a number of witnesses. We felt that our client had a particularly strong claim as the Plaintiff had been entrusted by the partnership to renew the lease and had simply failed to do so. Accordingly, we prepared a counter-claim relying on several causes of action including breach of fiduciary duty and negligence.

We won a tactical victory in managing to disqualify the Plaintiff’s solicitors due to a conflict of interest. As they had previously acted for the partnership as a whole we argued that they should not act against our client in this matter, furthermore we would be calling the solicitor in question as a witness in the case. The firm withdrew from the matter and the Plaintiff had to deal with changing solicitors at an advanced stage of the proceedings.

In due course an offer was made by the Plaintiff to walk away from the case with each party being responsible for their own legal costs. Our client politely declined and a period of intense negotiation commenced. Legal argument took place and points of fact were discussed between us and the Plaintiff’s solicitors via numerous letters, tele-conferences and faxes. We were able to negotiate settlement terms under which the Plaintiff paid our client (the Defendant) a substantial sum of money and abandoned the claim.

If you are involved in a commercial dispute or need advice on business partnership agreements, please do not hesitate to contact us.