Defendants' counterclaim successful in that they are entitled to a declaration that the partnership was dissolved and that the plaintiffs execute and deliver up transfers of licences

First Defendant : Mr J R Gilmour QC & Mr M D Howard

Second Defendant : Mr J R Gilmour QC & Mr M D Howard

Austell Pty Ltd v Commissioner for State Taxation (WA) (1989) 89 ATC-4905

Baburin v Baburin (No 2) [1991] 2 Qd R 240

Banks v Transport Regulation Board (Victoria) [1968] HCA 23; (1968) 119 CLR 222

Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178

Clay v Clay [1999] WASCA 8

Clegg v Edmondson [1857] EngR 375; (1857) 8 De G M & G 787

Commonwealth of Australia v Spotless Catering [1999] WASCA 136

Foley v Farrell (1933) 36 WALR 46

Harper v Minister for Sea Fisheries [1989] HCA 47; (1989) 168 CLR 314

In re Jarvis; Edge v Jarvis [1958] 1 WLR 815

Jorgensen v Boyce [1896] 22 VLR 408

Livingstone v Commissioner of Stamp Duties [1960] HCA 94; (1960) 107 CLR 411

Palmer v Moore [1900] AC 293

Pennington v McGovern (1987) 45 SASR 27

Rankine v Rankine (1995) 124 FLR 340

Taylor v Davies [1920] AC 636

Warman International Limited v Dwyer [1995] HCA 18; (1995) 182 CLR 544

Welsh v Nilsson [1961] NZLR 644

2 The plaintiffs in this action are two brothers, Franco Peter Allegretta ("Frank") and Mauro John Allegretta ("Mauro"). The defendants are the plaintiffs' parents, Modesto and Ippolita Allegretta ("Mr and Mrs Allegretta").

3 Frank and Mauro seek orders for the dissolution and winding up of an informal partnership between them and Mr and Mrs Allegretta. The partnership was established in about 1969 for the purpose of carrying on a family fishing business.

4 Mr and Mrs Allegretta contend that the partnership was dissolved in 1980 or 1982. They counterclaim for an order requiring Frank and Mauro to execute and to deliver up transfers to them of the licences relating to the relevant fishing vessel.

5 The Allegretta family migrated to Australia from Italy in 1956. They settled in Fremantle. There, Mr Allegretta, who had been a fisherman for many years, continued in that occupation. Mr and Mrs Allegretta had a large family. They brought nine children with them to Australia. Four more were born here. There were seven boys and six girls. Frank and Mauro, who were born in 1945 and 1946 respectively, are the two eldest sons.

6 In the early 1960's, when Frank and Mauro were aged about 15 and 16 years, they started to work for Mr Allegretta on his fishing boat, the Esperia. They were joined in about 1965 by a younger brother, Mario Allegretta, then aged about 13 years. (Mario later changed his name to Mario Lino. I shall refer to him by whichever name is appropriate in the context). In about 1968, they were joined by a still younger brother, Cosimo Don Allegretta who was then aged about 14 years.

7 It is common ground that during the 1960's, Mr Allegretta did not pay regular wages to those four sons who worked for him. However, they all lived at home and were kept by Mr and Mrs Allegretta. Mr Allegretta bought motor vehicles for Frank and Mauro and he gave them money from time to time.

8 In October 1969, a new fishing vessel was acquired. This was the Milna, subsequently renamed Vulcania. A partnership was then formed between Mr and Mrs Allegretta, Frank, Mauro, Mario and Cosimo. The circumstances in which the Milna was acquired and the partnership formed are in issue in these proceedings. There is also an issue on the pleadings about the way in which the partnership income and profit was distributed. However, for reasons which will emerge, that issue has not been pursued.

9 Then, there is the issue to which I have already referred: whether the partnership was dissolved in 1980 or 1982, or whether its subsists to this day.

10 The trial ran for 11 days. During that time, I heard evidence from Frank and Mauro and their respective wives Graziella ("Grace") and Fatima, in support of their claim. Mario Lino Allegretta also gave evidence in support of Frank and Mauro.

11 Mr Allegretta, who is now aged about 80 years, gave evidence through an interpreter because his command of English is very poor. Although he speaks and understands English well enough to engage in casual conversation, I was satisfied that the importance of this case warranted the use of a NAATI Level 3 interpreter. In fact, it was necessary to adjourn the trial because a NAATI Level 2 interpreter, who had been engaged initially, was unable to interpret with sufficient accuracy to enable Mr Allegretta's evidence to be taken in that way.

12 Mr Allegretta's evidence was supported by Cosimo and Elio, who is Mr Allegretta's youngest son.

13 Mrs Allegretta did not give evidence. Her absence was explained by a certificate from her doctor. He stated that Mrs Allegretta is 80 years of age and suffers from what are described "classical panic attacks". The diagnosis, which is clinically based, led Mrs Allegretta's doctor to say that in view of the severity of her attacks, he feels "on medical and compassionate grounds, that she is totally and permanently unfit to attend Court". I accept that opinion, which was not challenged by Frank or Mauro. I therefore draw no adverse inferences from the fact that Mrs Allegretta has not given evidence.

14 There are two matters about which I should comment by way of background. The first is that all the parties are relatively unsophisticated. I intend no disrespect or criticism in making that comment. It reflects the fact that Frank, Mauro and those brothers who gave evidence, all left, or were taken out of school, in their early teenage years. They went fishing with their father and have had no subsequent education.

15 There is no evidence about Mr Allegretta's educational attainments. However, it is plain that he has only a limited understanding of the concepts of partnership law. Again, I intend no disrespect or criticism in making this comment.

16 The second matter which emerged very clearly is the deep divisions within the Allegretta family. Although Mr Allegretta gave his evidence through an interpreter, the bitterness of his feelings towards Frank and Mauro was quite obvious. On the other hand, Frank and Mauro clearly feel that they have been treated unfairly by Mr Allegretta over very many years.

17 These attitudes, coupled with the length of time which has elapsed since many of the material events, have led to a hardening of attitudes and the formation of fixed views. This has resulted in many apparently irreconcilable conflicts in the evidence. For that reason, I do not accept much of the evidence given by members of the Allegretta family.

18 However, there is some independent evidence, in the form of bank diary notes, which I have found to be of considerable assistance. Between 1971 and 1986, the Manager of the Commonwealth Bank at Adelaide Street in Fremantle, where the Allegretta family members kept their various accounts, was Mr Raymond Hepworth. Mr Hepworth, who is now 73 years of age, gave evidence during the course of Mr Allegretta's case.

19 Mr Hepworth impressed me as being an objective and impartial witness who, although he has been retired for some 15 years, remembered Mr and Mrs Allegretta well. Furthermore, his recollection of certain important matters was refreshed by his very comprehensive diary notes which were admitted into evidence by consent. The diary notes were made at or shortly after the interviews and conversations which they record. Having seen Mr Hepworth give evidence, I have no doubt that he prepared his diary notes carefully and conscientiously.

20 I also derived assistance from two partnership accountants, Mr Lloyd Marchesi and Mr Mario Natali Cattalini. Both Mr Marchesi and Mr Cattalini practised in the firm of Francis A Jones & Associates. Mr Marchesi retired from that firm in 1976. Mr Cattalini commenced with the firm as an employee in about March 1973. He became a partner on 1 July 1975 and remains Mr Allegretta's accountant.

21 The partnership accounts have not provided as much assistance as one might expect. That is because the accounts for the 1973 to 1980 financial years have not been produced. Their absence has not been explained. The earlier accounts contain various inconsistencies and curiosities which their authors have been unable to explain.

22 However, both Mr Marchesi and Mr Cattalini (and to some extent Mr Hepworth) shed considerable light on the patriarchal relationship between Mr Allegretta and his family.

23 Having regard to the shortcomings in the evidence I do not propose, in these reasons, to explore every inconsistency or attempt to resolve every conflict. Rather, having considered all the evidence, I shall set out my findings of fact in narrative form, commencing with the acquisition of the Milna and the formation of the partnership.

The acquisition of the Milna and the formation of the partnership

24 On 29 September 1969, Mr Allegretta and Frank called at the Commonwealth Bank and asked for an advance of $26,000 to enable Mr Allegretta to purchase the Milna for $36,000. Mr Allegretta told the bank manager (Mr Hepworth's predecessor) that he would be able to repay the loan within three years, if he had good seasons. He said he had four sons and a son-in-law working with him. The bank manager recorded that in time, "they will have a legal share in the boats".

25 On 30 September 1969, Mr Allegretta and Frank again called at the bank. They said that the Fremantle Fishermen's Cooperative had agreed to lend them $26,000. In fact, the loan was made to Mr Allegretta.

26 Frank's attendance on these occasions was for the purpose of interpreting for Mr Allegretta. It was Frank's evidence, which I accept, that until about the mid 1980's he performed that role. I accept Mr Hepworth's evidence that although he was able to engage Mr Allegretta in casual conversation in English, an interpreter was necessary for the proper discussion of business matters.

27 Also on 30 September, Mr Allegretta paid a deposit of $2,000 to the vendor of the Milna. The vendor gave a receipt to Mr Allegretta on which it was stated that the vessel was being sold together with its various fishing licences. It was also stated that the balance of $34,000 would be paid on delivery of the licences, after approval by the Department of Fisheries and Fauna.

28 Both the vendor and Mr Allegretta then applied to the Department for approval of the sale of the Milna and the transfer of its licences.

29 On Mr Allegretta's application form, he was required to give "brief particulars of the purchaser's experience and activities within the fishing industry". The following words appear as if from Mr Allegretta, although I find they were written for him by the vendor:

"I have been engaged in the fishing industry for 34 years of which 15 years have been worked in Australia. My prime reason for purchasing being I have a large family including five boys engaged in the (fishing industry)."

30 On the vendor's application, approval was sought to sell the Milna to the "Allegretta family". The names Modesto, Franco, Peter, Mauro John and Mario appear beside those words.

31 In a handwritten letter dated 30 September and addressed to the Director of the Department of Fisheries and Fauna, Mr Allegretta, Frank, Mauro and Mario stated that they were purchasing the Milna on condition that the Director "approved the transfer of the crayfishing rights to us". I find that the letter was written by the vendor for Mr Allegretta. It was signed by Mr Allegretta and the sons referred to above.

32 The Director replied immediately. He wrote to Mr Allegretta approving the sale to him, Frank, Mauro and Mario. The letter stated that the various licences would be issued "to the new owners" upon payment of the prescribed fees.

33 There is no evidence that Mr Allegretta had any legal advice about the purchase of the Milna. I draw the inference from the way in which the various forms and the letter to the Director of Fisheries and Fauna were prepared, that Mr Allegretta relied principally on the vendor of the Milna to complete the purchasing formalities.

34 In these circumstances, I see no particular significance in the fact that approval was sought for the transfer of the fishing licences to Mr Allegretta and his sons. In my view, it reflects Mr Allegretta's intention to involve in the family business the sons who would actually be fishing: an involvement which he had not then formulated with any precision. Later, effect was given to that intention by the creation of a partnership. For reasons which will appear, I find that the decision to form a partnership was not taken until about March 1970. But as Mr Allegretta said in his application form, his "prime reason" for purchasing the Milna was to give employment to his sons.

35 It was the evidence of both Frank and Mauro that shortly before the Milna was purchased, there was a conversation between them and Mr Allegretta at the Coleman and Sons Boatyard where they inspected the vessel. Both said that Frank asked Mr Allegretta to say who would be the owners of the Milna (according to Mauro) or who would be involved (according to Frank). Both said Mr Allegretta replied to the effect that he, Frank, Mauro and Mario would each have a quarter share in the vessel. Frank added that this was "for what you have done for us, for me".

36 It is that evidence which forms the cornerstone of Frank's and Mauro's claim against Mr and Mrs Allegretta. I accept that there was a conversation in those terms. However, I find that the conversation took place against the background of Mr Allegretta's then non-specific intention to establish some business structure in which his sons would be involved.

37 This intention is reflected in Mr Allegretta's statement to the bank manager that in time his sons would have a legal share in the boats. But I am not persuaded that the statement was or was intended to be, legally binding on Mr Allegretta: nor that he intended to make a gift to his sons of an interest in the Milna. It was a family matter.

38 My finding that the partnership was not formed until after the purchase of the Milna is based on the accounts for the year ended 30 June 1970 prepared by Mr Marchesi, or under his supervision. Those accounts are expressed to relate to the fishing boats Esperia and Vulcania (as the Milna had then become): they are not partnership accounts. They show Mr Allegretta as the owner of the Vulcania: and only he as having a capital account. Frank, Mauro, Mario and Cosimo are shown as having Advance Accounts.

39 The accounts for the following year, ended 30 June 1971, are however, partnership accounts in the name of M Allegretta & Sons & Co. In those accounts, the Vulcania is shown as a partnership asset. Mr and Mrs Allegretta, Frank, Mauro, Mario and Cosimo all have capital accounts. The sons' accounts have been opened with a balance of the Advance Accounts brought forward from the previous year.

40 The application for the registration of the business name M Allegretta & Sons & Co appears to have been signed by all six partners on 23 March 1970, although the date of commencement is stated to have been 1 October 1969.

41 I find as a fact that the application was signed on or about 23 March 1970. I find that the decision to establish a partnership was taken on or shortly before that date, following advice given to Mr Allegretta by Mr Marchesi at about that time.

42 It was Mr Marchesi's evidence, which I accept, that Mr Allegretta asked for advice about the way in which he could form "a family business ... to create family wealth". I find that Mr Marchesi suggested that a partnership be formed. Mr Allegretta accepted that advice. He then took Frank, Mauro and Mario to Mr Marchesi's office. It was both his and Mr Marchesi's evidence, which I accept, that at the meeting he told Mr Marchesi that as his sons were coming into the partnership without having contributed anything, it should be made clear to them that if they left for any reason, they would take nothing out.

43 Mr Marchesi repeated that to Frank, Mauro and Mario. He asked if it was clear to them. Each, in some way, said or indicated that it was clear: no one disagreed. I accept that evidence.

44 Counsel for Frank and Mauro submitted that I should not make a finding in the terms set out above because those terms had not been pleaded in the original defence filed on 5 July 1995. They were added by amendment on 7 February 2001, during the trial. It was submitted, in effect, that these terms were a recent invention. It was submitted also that the terms were inconsistent with the way in which the accounts had been prepared.

45 I do not accept these submissions. The evidence appears in statements prepared for both Mr Marchesi and Mr Allegretta in May 1999. It is true that Mr Marchesi said in cross-examination that he had been reminded of the conversation by Mr Allegretta who spoke to him on the telephone during 1999. However, Mr Marchesi said, and I accept, that he had an independent recollection which he had retained over the years because of the unusual nature of the conversation.

46 Furthermore, Frank remembered a conversation which was similar in effect. It was put to him in cross-examination that there had been a discussion about the partnership in 1969, at the family home. Mr and Mrs Allegretta, Frank, Mauro, Mario and Cosimo were said to have been present. Frank agreed. It was then put to him:

"Again your father explained that you were coming in with nothing and if you left, you would leave with nothing."

"That does not relate to me and Mauro, that question. That was mentioned to Mario Lino and Cos(imo). They had no interest in it."

47 I can understand that Frank and Mauro would draw distinction between themselves on the one hand and Mario Lino and Cosimo on the other. That is because Frank and Mauro had worked for Mr Allegretta for some years before the purchase of the Milna, without being paid regular wages. By contrast, Mario Lino and Cosimo had only just left school when the Milna was purchased. However, I do not accept that the partnership terms imposed by Mr Allegretta applied only to Mario Lino and Cosimo. I say that, not only because I accept the evidence of Mr Marchesi and Mr Allegretta that those were the terms, but also because, in my view, it is improbable that Mr Allegretta would have drawn that distinction. My impression of Mr Allegretta is such that I do not think he would have contemplated a situation in which the Vulcania, or any other asset of the partnership, could be sold, following a dissolution, if one or more of his sons decided to leave the family business.

48 If I am wrong in finding that the conversation at the Coleman and Sons Boatyard had no legal effect, and that conversation did result in Frank, Mauro and Mario owning one-quarter shares in the Milna, then they must be taken to have surrendered those interests when they entered into the partnership. That is because they did not protest, when told that if they left the business they would take nothing out of the partnership. They did not, on being told that they were bringing nothing into the partnership, assert that in fact, they were each contributing a one-quarter share in the Vulcania.

49 I do not accept, however, that the meeting with Mr Marchesi and the conversation in the family home took place in 1969. I find that these events took place in about March 1970. My finding is based on the date on the application for the registration of the business name and from the fact that the 1969-70 accounts are not partnership accounts.

50 I draw the inference that the commencement of the partnership was backdated to 1 October 1969 on the application for the registration of the business name, only because that was the date on which the Milna had been purchased.

51 Mr Marchesi has not practised as an accountant for some years. However, I have no doubt from the way in which he gave his evidence, that when in practice he acted carefully and conscientiously. It was Mr Marchesi's evidence, which I accept, that he took his instructions in relation to the business and the partnership from Mr Allegretta. I am satisfied that if the partnership had been operative from 1 October 1969, that would have been reflected in the accounts. I therefore draw the inference, and find as a fact, that Mr Allegretta's instructions to Mr Marchesi were that the Vulcania and its associated licences and equipment were to be treated as partnership assets as from 1 July 1970.

52 Consistently with this, in September 1971 Mr Allegretta arranged with the bank to transfer an advance, which had been agreed in June 1971, into the names of the partners. To secure the advance, Mr Allegretta, Frank, Mauro and Mario granted a Bill of Sale over the Vulcania. That was not entirely appropriate, because the Vulcania then belonged to all the partners. However, the sale documentation would have given the bank the impression that Mr Allegretta and his sons were the owners.

53 In support of his contention that he owns a one-quarter share in the Vulcania, Mauro gave evidence about a conversation between his prospective father-in-law, Mr Da Silva, and Mr Allegretta, some months before his marriage on 1 July 1972. According to Mauro, Mr Allegretta said that he (Mauro) had no money, but had a quarter share in a boat.

54 Mr Allegretta denied there was any such conversation. However, I accept the evidence of Mauro and of Mr Gabriel Jesus Correia that it took place. Mr Correia is Mauro's brother-in-law. He interpreted the conversation between Mr Allegretta and Mr Da Silva.

55 Mr Allegretta's statement to Mr Da Silva was incorrect, as a matter of law. Mauro did not have then a quarter share in the Vulcania: he had a one-sixth interest in the partnership. However, I do not think that Mr Allegretta was concerned with, or even understood, the legal consequences of the partnership. He left those matters to Mr Marchesi.

56 I suspect that Mr Allegretta's purpose in making the statement was more to impress Mr Da Silva than to confirm to Mauro his legal right to a one-quarter share in the Vulcania. Again, it was a family occasion. Furthermore, there would have been no need to say to Mr Da Silva that Mauro's interest in the Vulcania only subsisted for as long as he remained in the business. That had already been made clear to Mauro: and nobody then contemplated that Mauro would leave.

57 Cosimo left the family business in about 1974. Consistently with the terms of the partnership stipulated by Mr Allegretta, Cosimo received no payment on his departure. I accept Cosimo's evidence that he did not expect to receive anything. I also accept his evidence that on many occasions before his departure Frank or Mauro, or both of them, said words to the effect that if Cosimo left "that's the end ... everything goes out of the door".

58 Mario Lino also left the family business, after disputes with Mr Allegretta about the income he was receiving from the partnership. He went to Adelaide, where he was married. Mario Lino's evidence was somewhat confused and confusing. However, it was submitted on behalf of Frank and Mauro that the circumstances of Mario Lino's departure are inconsistent with Mr Allegretta's case. That is because there are documents which suggest that Mario Lino sold a one-quarter share in the Vulcania for $9,000.

59 Mario Lino identified his signature on an application form to the Department of Fisheries and Fauna for the sale of the Vulcania. It was a form of the same kind as those used when Mr Allegretta purchased the vessel.

60 The form, on its face, is an application by Mr Allegretta, Frank, Mauro and Mario Lino to sell the Vulcania to the first three named, for $9,000. The "price" of $9,000, was one-quarter of the purchase price of the Vulcania. I therefore infer that the form was intended to refer to the sale of a quarter share in the Vulcania, not the entire vessel.

61 The form was apparently received by the Department on 19 July 1973. Curiously, there is a substantially identical form, apparently received by the Department on 31 July 1975, in which the sale price is said to be $8,400.

62 It was suggested to Mr Allegretta that the difference of $600 was the amount paid by him to bring Mario Lino and his family back from Adelaide to Fremantle. This might have reflected the acceptance by Mr Allegretta of an obligation to pay Mario Lino for his share in the partnership. However, on any view, if Mario Lino was entitled to be paid a sum of money which reflected his share of the partnership, the value could hardly have been $9,000 or $8,400. The value of Mario Lino's interest in the partnership must have been one-sixth of the entirety of the partnership assets: not a one-quarter interest in the Vulcania.

63 Mr Allegretta denied any knowledge of this matter. However, nothing turns on it, in my view, because Mario Lino had long been written out of the partnership accounts. He does not appear as a partner in the accounts for the year ended 30 June 1972. Those accounts show that he was owed $4,483 by way of a deferred liability. This amount was the balance of his capital account as at 31 December 1971, there being a half-yearly account taken in that year.

64 The deferred liability represents a debt which is not payable in the ensuing 12 months. The fact that it is recorded is inconsistent with the agreement that family members who left the partnership would take nothing out.

65 However, what is consistent with that agreement is that, according to Mario Lino, he did not receive any payment. This despite the fact that in the accounts for the following year the deferred liability is shown to have been reduced by $1,000. The liability does not appear in the accounts for the year ended 30 June 1980, which are the next available.

66 Mr Marchesi was unable to explain the apparent inconsistency between the accounts and his understanding of the partnership terms. But he said he was probably not handling the accounts at that stage.

67 I draw the inference, and find as a fact, that the explanation for the inconsistency is that Mr Allegretta instructed the person responsible for preparing the accounts that Mario Lino had left the partnership but that he was not to be paid any money. The accountant then created a deferred liability to regularise the situation from an accounting perspective. I do not think that the accounts would have had any significance either for Mr Allegretta or Mario Lino.

68 The explanation for the "sale" applications submitted to the Department of Fisheries and Fauna in 1973 and 1975 is, I think, that they were created for the purpose of regularising the Department's records. I accept that the explanation is more plausible in relation to the first application than the second. However, on any view, the applications cannot reflect the partnership position. As the accounts disclose, the partners had equal interests in the partnership property. I repeat: Mario had a one-sixth interest in the partnership, not a one-quarter interest in the Vulcania. But whatever the explanation for these inconsistencies, it does not alter my primary finding that the partnership was formed on terms that if one of the sons retired from the partnership he would take nothing with him.

The operation of the partnership from 1971 to 1980

69 It is alleged in the statement of claim that all material times Mr Allegretta "managed the financial and taxation affairs of the partnership ...". This is admitted. It is also admitted that from time to time Frank and Mauro were paid wages or salary for their work on various boats owned by the partnership. But the allegation that neither Mr nor Mrs Allegretta "has ever accounted to (Frank or Mauro) for the profits of the partnership business", is denied.

70 Both Mr Marchesi and Mr Cattalini said, and I accept, that they took their instructions from Mr Allegretta. The partnership accounts therefore reflect Mr Allegretta's instructions. As I have noted, no accounts have been produced for the financial years 1973-1974 to 1979-1980 inclusive. It is therefore impossible to make any finding about the partnership income, the distribution of that income or the profits or losses of the partnership during that period.

71 It is true that the bank records contain some information about profits, losses and amounts paid in crew shares. However, it is not possible to say who participated in the crew shares. Family members were sometimes paid as crew: and sometimes not.

72 A bank review document dated 11 November 1980 records that the net profit for the year ended 30 June 1979 was only nominal, but that the salary paid to Mr and Mrs Allegretta "increased by $20,442 over (the) previous year". The bank had been informed by the accountants that the net profit for the then current year was expected to be about $23,000.

73 It may well have been the case that Mr Allegretta decided how the partnership income should be distributed. He regarded the business as his own because none of his sons had made any financial contribution to it. He regarded the partnership as being a tax minimisation arrangement only.

74 It is not necessary for me to make any findings about these matters. Although the statement of claim seeks an order for "an accounting ... for the profits of the partnership ...", that remedy has not been pursued. Counsel for Frank and Mauro accepted, sensibly, in my view, that it would now be impossible to carry out an accounting exercise.

75 Even if that part of the claim had been pressed, I would not have ordered an account in any event. I have no doubt that in the years for which the partnership accounts are now missing, accounts were in fact prepared by the partnership accountants. Furthermore, Frank and Mauro derived income from the business and supported their families by their earnings. They filed personal income tax returns based in part on those accounts. Frank and Mauro may have been displeased by the fact (if it was the fact) that Mr Allegretta decided how the income should be distributed: but there would no doubt have been family considerations which had some influence on those decisions.

76 In all these circumstances, too much time has passed - some 20 to 30 years - to justify any attempt to carry out an accounting exercise. Frank and Mauro must now be regarded as having accepted the situation.

77 Mr and Mrs Allegretta allege in their defence and counterclaim that they, Frank and Mauro agreed in or about 1979/1980, and before 30 June 1980, that the partnership would be dissolved on 30 June 1980 on terms that Mr and Mrs Allegretta would be solely entitled to all of the assets of the partnership, and would be solely responsible for all the partnership liabilities; and that Frank and Mauro's debts to the partnership would be released.

78 Alternatively, Mr and Mrs Allegretta allege that the partnership was dissolved in May 1982, pursuant to an implied agreement.

79 Mr Allegretta's statement contained evidence about a conversation between him, Frank and Mauro, in May 1980 on the slipway of the South Fremantle Yacht Club. Mr Allegretta said Frank and Mauro told him they had almost decided not to continue fishing because the work was too heavy and there was not enough money in it. After some discussion, according to Mr Allegretta, both Frank and Mauro said they would withdraw from the partnership "at the end of this season". Mr Allegretta took that to mean 30 June 1980. According to Mr Allegretta, he then told Frank and Mauro that they would retire on the same conditions as Mario Lino: he (Mr Allegretta), would take over the debts and the assets. Mr Allegretta said Frank and Mauro then agreed.

80 When this matter was explored in cross-examination, I came to the conclusion that Mr Allegretta's evidence was far from satisfactory. By way of example: in an earlier statement, he had said that the conversation took place at the Mews Jetty which, as he admitted, no longer existed in 1980. He said this was a mistake about which he had told his lawyer when the earlier statement was being prepared. Furthermore, during the course of his cross-examination, Mr Allegretta persisted in the view that there never had been any partnership involving his sons, because they had never put any money into the business.

81 When it was put to Mr Allegretta that Frank and Mauro had complained to him about paying provisional tax on partnership profits, Mr Allegretta contended that the tax was paid on personal earnings and was none of his business. Yet it is clear from their income tax assessments that both Frank and Mauro did pay provisional tax on partnership income throughout the 1970s. I accept their evidence that they complained to Mr Allegretta about the fact that they were required to pay provisional tax on profits of the partnership which they did not receive. It is not necessary to decide whether that was because profits were ploughed back into the business or because Mr Allegretta declined to make any payment of profits. As I have noted, it is no longer sought to re-open the partnership accounts.

82 I prefer and accept the evidence of Mr Cattalini that when he was preparing the 1981 financial statements for the partnership, Mr Allegretta said to him words to the effect that Frank and Mauro were "out of the partnership". They are sick and tired of paying provisional tax. They don't want to know anything about the partnership. We are taking over everything".

83 Acting on those instructions, Mr Cattalini prepared the financial statements for the year ended 30 June 1981 on the basis that Mr and Mrs Allegretta owned all of the partnership assets.

84 Although the name of the partnership continued to be shown in the accounts as M Allegretta & Sons & Co, I accept Mr Cattalini's evidence that this was simply a mistake. It is quite inconsistent with the substance of the accounts.

85 Whether, or to what extent, Frank and Mauro discussed these matters with Mr Allegretta is not clear. They said they had not. Both Frank and Mauro gave evidence that in 1982, Mr Allegretta changed the name of the business to "M & I Allegretta". Both said that they did not know why this had been done: and that as far as each was concerned, the partnership continued as before. For reasons which I shall set out below, I do not accept this evidence.

86 Having regard to the unsatisfactory nature of the evidence, I make no finding about any express agreement. However, it is not necessary to do so. That is because, even if Mr Allegretta's instructions to Mr Cattalini to the effect that the partnership had been dissolved reflected a unilateral decision on his part, it is clear from the subsequent conduct of Frank and Mauro that they acquiesced in this course.

87 It seems to have been the practice of the partnership accountants to prepare the statements for each financial year in the early months of the following calendar year. Mr Cattalini would therefore have been preparing the accounts for the year ended 30 June 1981, early in 1982. In a bank diary note prepared by Mr Hepworth on 5 May 1982, he noted that Frank and Mauro were retiring from the partnership and that Mr and Mrs Allegretta intended to register a new trade name, as yet undecided.

88 These documents, and Mr Cattalini's evidence, lead me to find as a fact that Mr Allegretta instructed Mr Cattalini in about May 1982 that Frank and Mauro had retired from the partnership, and that the retirement was to take effect from 30 June 1980.

89 Consistent with this finding is a form of notice of cessation of a business under a business name. The notice is dated 6 May 1982. It relates to the cessation of the business carried under the name M Allegretta & Sons & Co and is signed by Mr and Mrs Allegretta, Frank and Mauro. The form was lodged with the Corporate Affairs Office on 13 May 1982.

90 Frank admitted that he had signed the notice of cessation form. However, he said that when Mr Allegretta had given the form to him, it had either been folded or partially covered, so that he could not see what it contained. In short, he was obliged to sign the document without question and without knowing its effect.

91 Frank gave evidence that he signed a number of documents in similar circumstances. I found his evidence confusing. However, I have the impression that the evidence was proffered as a general explanation for Frank's lack of understanding of documents bearing his signature. In other words, where Frank has signed a document which is adverse to his case, he has concluded that it must have been folded or obscured when presented to him for signature.

92 I do not accept this evidence. It is clear that Frank does not read English very well. I suspect that he has frequently signed documents when requested to do so simply because he trusted the person - be it Mr Allegretta or the partnership accountant - who asked him to sign. I draw that inference with greater confidence because it was never put to Mr Allegretta in cross-examination that he had presented folded documents to Frank for signature.

93 Mauro also accepted that he had signed the notice of cessation form, although he said he did not recognise it. He did not say the form had been folded when given to him: but he said that 80 per cent of the documents he had signed were signed at his parent's house and were folded in half. Again, given that Mr Allegretta was not challenged about these matters, I am not prepared to make a finding that the body of the notice of cessation was concealed from Mauro when he signed it.

94 As a further consequence of the dissolution of the partnership, the bank discharged mortgages over property belonging to Frank and his wife and Mauro and his wife. The discharges were registered on 10 May 1982.

95 In their respective statements, both Frank and Mauro said they did not recall what prompted the discharge of their respective securities. However, at trial, both Frank and Mauro gave detailed, but inconsistent, explanations. Frank said he took steps to have his mortgage discharged having learned from Mauro that his mortgage had been discharged. Mauro gave a similar explanation: he said he took the relevant steps after learning that the bank had discharged Frank's mortgage.

96 In fact, both mortgages were discharged by the bank on the same day: 7 May 1982. That was the day after the day on which all parties signed the notice of cessation of the business of M Allegretta & Sons & Co. It was two days after Mr Hepworth made his diary note about Frank and Mauro retiring from the partnership. In the note he stated that the securities given by Frank and Mauro were to be released and that fresh securities were to be prepared as soon as the new trading name became known.

97 Mr Hepworth's evidence was that he could not recall who told him that Frank and Mauro were retiring from the partnership. He said also, that because of bank procedures adopted at the time, and his own practices as a manager, it would not have been possible for two partners' mortgages to have been discharged without those partners knowing and agreeing to the discharge.

98 Counsel for Frank and Mauro accepted that: and so do I.

99 Mr Hepworth went on to say he believed he had spoken to both Mauro and Frank about their mortgages being discharged and about them retiring from the partnership at about the time of his diary note of 5 May 1982. During the course of Mr Hepworth's cross-examination, I explained to him that I had to decide the case on the balance of probabilities. On that basis I asked whether it was more or less probable that he had spoken to Frank and Mauro about those matters. He said it was more probable that it was discussed with them.

100 I have already referred to the favourable impression which I formed of Mr Hepworth. I have no doubt that he was a careful and conscientious bank manager. I think it inconceivable that he would have attended to the discharge of the mortgages given by Frank and Mauro to secure partnership indebtedness without discussing their retirement from the partnership. For that reason, and because of the generally unsatisfactory nature of the evidence given by Frank and Mauro, I do not accept their assertions that they did not know why the name of the partnership had been changed in 1982. I find as a fact, on the balance of probabilities, that Mr Hepworth discussed their retirement with them.

101 I therefore find as a fact that Frank and Mauro either agreed expressly to retire from the partnership on the basis that they would take nothing out, or they acquiesced in what was, as a matter of law, the dissolution of the partnership on those terms, so that their agreement must be implied.

102 A consequence of the dissolution of the partnership was that Frank and Mauro no longer paid provisional tax but commenced to pay income tax on a PAYE basis.

103 Frank's evidence was that on a number of occasions he asked his accountant, Mr Ray Polglase whether there was any way "we can get out of this provisional tax". Mr Polglase was a partner in Francis A Jones & Associates. According to Frank, Mr Polglase ultimately said "Well, we can avoid all that". He said Mr Polglase "managed all the details with the tax department" with the result that he paid no more provisional tax.

104 Mauro also gave evidence about discussing the matter of provisional tax with Mr Polglase. He said Mr Polglase suggested that he go on to a PAYE basis. According to Mauro he asked whether that would affect his "partnership ownership". Mauro said Mr Polglase replied "I can't see how it's going to affect your partnership or your ownership of your quarter of a boat".

105 It was not suggested to either Mr Marchesi or to Mr Cattalini, that Frank or Mauro could have ceased paying provisional tax on profits earned by the partnership while they remained partners. There was some evidence, in the form of notes made by Mr Cattalini, that in 1984 the profit of the then partnership, M & I Allegretta, was distributed to Mr Allegretta, Frank and Mauro, apparently by way of a bonus.

106 Mr Cattalini said that if the Taxation Department believed that such a payment was a share of partnership profit, and not income from personal exertion taxed at source, a provisional tax assessment could be raised. In short, the distribution of a profit share as a bonus was not a means of avoiding provisional tax.

107 Of greater significance is the fact that Mr Polglase was not called to give evidence about the conversations he is said to have had with Frank and Mauro: nor was any explanation offered for his absence. Again, it seems to me to be inconceivable that a reputable accountant would advise persons carrying on business in partnership that they could avoid the payment of provisional tax while retaining their partnership status. In the absence of Mr Polglase, whose name appears on the Francis A Jones letterhead with the qualifications AASA and CPA, I draw the inference that he gave no such advice.

108 It may be that Frank and Mauro simply did not understand the implications of their retirement from partnership. From their perspective, nothing really changed. They continued fishing as before: and they continued earning income from the family business. They were still firmly of the view that they owned a quarter share in a fishing vessel: now the Esperia II, which had replaced the Vulcania.

109 Mr Allegretta, on the other hand, did understand that Frank and Mauro were no longer involved in the partnership. This divergence of views emerges clearly from various events which took place after May 1982.

110 The first of these events was the purchase of nine crayfishing pots in August 1982. The pots were purchased for a price of $15,975 with cheques drawn on the bank account in the name M & I Allegretta. The transaction was arranged by Frank and Mauro, who were acting on Mr Allegretta's instructions. However, the offer to purchase the pots was made in the name "M & FP & MJ Allegretta" and was signed by Mauro.

111 It appears to be common ground between Mr Allegretta and Frank that when Mr Allegretta saw the three names on the offer document, he became angry because Frank and Mauro were no longer in the partnership.

112 When Frank was cross-examined about these matters, he seemed to be confused as to whether the purchasers of the pots were "the three of us" or Mr Allegretta. As I understood his evidence, it was to the effect that it made no difference whether one or three names were on the document: "It's just a normal process".

113 Mauro said he had given the offer document to Mr Allegretta. However, Mauro denied that Mr Allegretta complained about the fact that his (Mauro's) and Frank's names appeared on it. I accept the evidence about Mr Allegretta's complaint given by him and by Frank.

114 Further evidence about the divergence of views as to ownership of the Esperia II, emerges from the abortive attempts by Frank and Mauro to charter the vessel, and subsequently to purchase it.

115 In September 1985, an agreement for the charter of the Esperia II was prepared by Mr Allegretta's solicitors, Anthony Torre and Monaco. The agreement recited that Mr Allegretta was the owner.

116 On 18 September 1985 the solicitors for Frank and Mauro, Solomon Avery & Co, wrote to Anthony Torre and Monaco saying that Frank and Mauro were not prepared to sign the agreement in its then present form. They requested various alterations to be made to it.

117 The first matter raised in the letter was the recital. Solomon Avery & Co said:

"We are instructed by our clients that the said vessel is licenced in the names of your client and our clients and that each of our clients owns a one-quarter share in the said vessel with the remaining half share being owned by your client."

118 The letter went on to say that the recital should be amended to recite the fact that the vessel was owned by Mr Allegretta, Frank and Mauro in the proportions referred to above.

119 There is no evidence that that request was complied with. The trial bundle includes an offer document relating to the charter of the Esperia II. That document appears to incorporate all of the amendments required by Solomon Avery & Co in their letter dated 18 September 1985, with the exception of the amendment to the recital. The recital has simply been omitted from the offer document.

120 It is not clear who prepared the offer. Nor does it matter: the transaction did not proceed. The point is that the correspondence and draft agreements reflect both the belief held by Frank and Mauro that each owned a one-quarter share in the Esperia II and the equally strongly held belief of Mr Allegretta that they did not.

121 Shortly after the proposal to charter the Esperia II, there were discussions between Mr Allegretta, Frank and Mauro about them purchasing the vessel. These discussions resulted in an informal agreement that Frank and Mauro would purchase Mr Allegretta's half share (on their evidence) or the entire vessel (on Mr Allegretta's evidence) for $250,000.

122 As a result of that agreement, Frank and Mauro instructed the late Mr Edmund Frichot of Messrs Frichot and Frichot, solicitors, to prepare an agreement. A handwritten attendance note prepared by Mr Frichot was admitted into evidence by consent. The note stated quite clearly that Mr Allegretta was selling to Mauro and Frank "one undivided half share for the sum of $250,000".

123 At some stage, Mr Allegretta attended on Mr Frichot with Mr Cattalini, Frank and Mauro. It was Mr Allegretta's evidence that he told Mr Frichot he owned the vessel outright. Consistently with that evidence, Mr Frichot prepared an agreement in which Mr Allegretta was referred to as "the Vendor" of the Esperia II. Frank and Mauro and their respective wives were referred to as "the Purchaser". The agreement contained a warranty by Mr Allegretta that he had "good right title and interest in the vessel".

124 There was argument at trial about whether the price of $250,000 could reasonably have been regarded as the value of the Esperia II with its 102 pot licences. Valuation evidence was admitted by consent which supported the view that $250,000 represented the approximate value of a one half share in the vessel. However, Mr Allegretta said in his evidence that he intended to sell the Esperia II with only an 81 pot licence, because the Vulcania had been purchased with that number of pots. This evidence was not referred to in his statement: nor is it reflected in the agreement prepared by Frichot.

125 Counsel for Frank and Mauro submitted that Mr Frichot had made a mistake in preparing an agreement for the sale of the entirety of the Esperia II: that he should have prepared an agreement for the sale of a one-half share, as all parties intended.

126 Against that, it was submitted by leading counsel for Mr Allegretta, that in entering into an agreement for the sale of the Esperia II, Frank and Mauro were acting inconsistently with their contention that they already owned a half share in that vessel.

127 I think it unlikely that Mr Frichot, who was an experienced solicitor, would have made such an elementary mistake. However, it is not necessary to resolve this conflict because nothing turns on it. The beliefs held by the parties in 1985 cannot determine the legal consequences of the arrangements which they entered into in 1982.

128 Of greater consequence is Frank's conduct over several years, commencing in 1983, in seeking unemployment benefits from the Department of Social Security.

129 On 28 April 1983 Frank signed an application in which he stated that he had been working for his father, crayfishing; and that as the season was over he had been put off. Then, in an application made on 1 May 1986, he gave his employer's name as M & I Allegretta. He gave similar answers in August 1986, May 1988, May 1990 and June 1992. In 1993 Frank answered "No", to the question:

"Do you own or have a share in this or any other crayboat?"

130 All these answers are wholly inconsistent with Frank's assertion that the partnership M Allegretta & Sons &Co has continued in existence. The last answer is inconsistent with his claim to own a one-quarter share in the Esperia II.

131 Frank's explanation for these inconsistencies is that he lied to the Department of Social Security. However, his evidence in this respect was itself inconsistent. He said initially that when asked whether he owned a boat he said "no". Later, he said he told the "whole truth" to the Department of Social Security and that the persons concerned understood quite clearly that he was the part owner of a boat. A little later in his evidence he said he had lied. Later still he said he had not: that the Department of Social Security officers knew he was a part owner of the Esperia II. By contrast, Grace Allegretta gave clear evidence that on at least one occasion when she stood beside Frank at the Department of Social Security she knew that he was lying.

132 I have the impression that the application forms for unemployment benefits which Frank signed were filled in for him by officers of the Department of Social Security, presumably during the course of some interview process. It may well be that the account given by Frank of his circumstances at the time of each interview was as confused as his evidence to this Court. However, on at least three occasions, Frank gave to the Department letters signed by Mr Allegretta confirming that he (Frank) was Mr Allegretta's employee: or an employee of M & I Allegretta. These letters were signed by Mr Allegretta at Frank's request.

133 It is, of course, an offence to obtain social security benefits by making fraudulent claims. Whether or not Frank lied to officers of the Department of Social Security, depends upon the questions he was asked. In these proceedings, Frank is not charged with obtaining benefits fraudulently. It is not therefore necessary for me to explore this matter in any detail. However, I think it would be wrong in principle to permit someone who had obtained benefits from the Department of Social Security on the basis that he was an employee who had no interest in a fishing vessel, then to assert before this Court that he was a member of a partnership which did own such a vessel. That is because even if Frank's claims were not made fraudulently at the time (in the sense that he had no dishonest intentions) the success of his claim in these proceedings would mean that he should not have obtained benefits: see Tinker v Tinker [1970] P 136, cited in In The Marriage of Elias (1977) 29 FLR 393, 400-1 and 402.

134 Finally, I consider that both Frank and Mauro acted inconsistently with their present claim in seeking compensation for unfair dismissal from the Western Australian Industrial Relations Commission, after being told by Mr Allegretta's solicitors, in 1993, that their services were no longer required.

135 Frank's application, which is addressed to "M & I Allegretta" and gives both names as his employer, exhibits a degree of confusion. For example, Frank gave the dates of his employment as beginning in 1960 and ending in 1993. He also said he had worked for his parents for 32 years. On any view, those answers are incorrect. However, the provision of accurate answers would have needed a degree of understanding of partnership law which I am satisfied Frank simply does not have.

136 Mauro's application was in precisely the same terms as Frank's. I make the same comment in relation to it.

137 Both Frank and Mauro gave evidence to the effect that they had told the Industrial Relations Commission about their claim to be in partnership with Mr and Mrs Allegretta. According to Frank, an officer of the Industrial Relations Commission then told him that the Commission could not assist. This, Frank said, left them no choice other than to take legal action.

138 I do not accept that explanation. If it were true, then Frank's claim would not have been served on Mr and Mrs Allegretta as it was. Nor is it consistent with the claim being dismissed, as it apparently was.

139 Mauro's evidence was that he informed the Industrial Relations Commission that he and Frank were not employees but were "part-owners of this partnership". Frank said he was then told "... just disregard the employee bit because later on it can be clarified if you continue to go ahead with (the claim)".

140 Again, I do not accept that evidence. It seems to me to be highly improbable that the Industrial Relations Commission would countenance the prosecution of a claim made by a person who did not regard himself as an employee, but claimed to be in partnership with the respondent.

141 The most charitable inference I can draw from the unfair dismissal applications is that Frank and Mauro knew very well that they were employees of M & I Allegretta but they were still firmly convinced that they each owned a one-quarter interest in the Esperia II. For the reasons set out above, this view is misconceived.

142 Frank's and Mauro's claim must therefore be dismissed. Furthermore, Mr and Mrs Allegretta's counterclaim must succeed. They are entitled to a declaration that the partnership trading under the name M Allegretta & Sons & Co was dissolved in May 1982 with effect from 30 June 1980. I do not think it necessary for the order to set out the terms on which the partnership was dissolved. That is because the only consequential relief will be an order requiring Frank and Mauro to execute and deliver up to Mr and Mrs Allegretta transfers of the licences relating to the Esperia II.

143 These licences have been issued annually in the names of Mr Allegretta, Frank and Mauro, since the purchase of the Milna in 1969. As I have already said, the relevant forms were then completed and applications made without the benefit of legal advice at a time when Mr Allegretta had told Frank, Mauro and Mario Lino of his intention that they should become part owners of the vessel. But they did not become part owners: they became partners in the business on terms that if they left, they would be entitled to nothing. When Mario Lino retired from the partnership he executed transfers of the licences. Frank and Mauro must now do likewise.

144 I wish to emphasise that in dealing with this action I have been concerned only to make findings of fact, on the balance of probabilities, from which to determine legal rights. I am not concerned with moral obligations of the kind that may arise among family members; and I express no view about any moral issues. However, I believe that, understandably in all the circumstances, the line between legal and moral obligations has become blurred in both sides of this unfortunate family dispute.