I came to Mackay in 1977 at which time my assets were a Holden utility, a blue horse float and a racehorse called ‘Babalook’. My plan was to win the Mackay Cup, sell the ute, the horse float and ‘Babalook’ and travel overseas.
Shortly after I arrived in Mackay there was a disagreement between the then partners of Macrossan & Amiet Solicitors. At that time there were four partners. One of the partners left the Partnership and moved to Brisbane where he continued to practice as a solicitor.
I was offered a position as an employed Solicitor, in the employment of the remaining partners of the firm of Macrossan & Amiet Solicitors.
On 1 July 1979, Patrick Carroll and I were offered the opportunity to become partners in the firm of Macrossan & Amiet Solicitors.
A Partnership subsists between persons carrying on a business in common with a view of profit. There are many different individuals that carry on business together with a view of making a profit.
Every partner in the firm is liable jointly with the other partners for all the debts and obligations of the firm while a partner and, if the partner is an individual, after the partner’s death the partner’s estate can also be liable.
At the time that I joined the firm of Macrossan & Amiet Solicitors, I was acutely aware that I could be liable for the debts and obligations of the firm while a partner as, at around that time, there was a lot of publicity concerning a national accounting firm where one of the partners had been found to be negligent in conducting an audit and the damages arising from the negligence were greater than the insurance held by the firm of accountants, and the individual accountants were held liable for the damages.
As some form of asset protection, when my wife and I went to buy land and build a house, the property was purchased in my wife’s name solely.
Immediately upon becoming a partner in the firm of Macrossan & Amiet Solicitors I was required to sign a bank guarantee to secure the firms overdraft facility. The bank also required my wife to sign the guarantee.
The liability of partners in a firm can be reduced by holding the appropriate insurance. Insurance, however, may not cover every situation. As there are risks that any business can fail, a prudent partner needs to be actively involved in the management of the business and understand what areas of the business are profitable, and what areas of the business are not profitable and actively ensure that accounts are rendered and fees are collected.
I have heard many people say that they would be better off sitting, on a sunny day, fishing off the Forgan-Smith Bridge then doing a day’s work and not being paid for it.
At the time that I became a partner in the firm of Macrossan & Amiet Solicitors the original three partners were equal partners and Patrick Carroll and I had smaller interests in the Partnership. The Partnership profits were shared in accordance with the different interests.
Over the subsequent years, further individuals purchased an interest in the Partnership from the original partners and eventually there were eight equal partners. Through the years, partners also left the Partnership to pursue other interests, or to retire.
Between the time that I became a partner in the firm Macrossan & Amiet Solicitors and 2008, when legal firms were permitted to incorporate, there was never a written Partnership Agreement. The Partnership persisted through the relationship of the various individuals and their ability to listen to different opinions and amicably resolve differences of opinion.
Even so, it would not be my recommendation to anyone entering into a Partnership to do so without seeking legal advice and considering the need for a Partnership Agreement.
Experienced solicitors, from their dealings with failed Partnerships and case histories, have an understanding of the many and varied issues that can arise that lead to disputes between partners, how to resolve these disputes and issues with respect to liability for Partnership debts.
Where there are rural enterprises that involve land, there may be stamp duty considerations that can be a conclusive factor against there being a Partnership Agreement.
Partnership Agreements can set out, in advance, the method of calculating a partner’s share on a partner wanting to leave the Partnership. If there is no provision for this in a written agreement then the parties are left to relying upon the provisions of the Partnership Act 1981 and having disputes resolved through court action which is generally slow, time consuming and expensive.