Yard v Yardoo Pty Ltd & Ors; Yard & Ors v Yard [2007] VSCA 35

Corporations - Winding up - Just and equitable - Family company holding land on which family farming partnership business conducted - Oppression - exclusion of minority shareholder from participation following failure of marriage into family of majority shareholders - Compulsory purchase of shares in lieu of winding up - Valuation of shares - Net assets basis as at date of trial.

Partnership - Dissolution of partnership - Date of dissolution - Order for dissolution as of date of commencement of proceeding for dissolution - Phillips v Melville [1921] NZLR 571, followed.

1 I agree with Nettle JA, for the reasons he has stated, that the appeal in proceeding No. 4542 of 2001 should be dismissed, the appeal in proceeding No. 5151 of 2001 should be allowed, the orders made below in that proceeding should be set aside and orders made in lieu thereof as his Honour proposes.

2 This is an appeal from judgements given in two proceedings heard together in the Commercial and Equity Division.

3 In the first proceeding,[1] which was instituted by the appellant, the judge rejected the appellant's claim that he was beneficially entitled to a number of real properties ("the Schedules 1, 2, 3 and 4 properties") held by the first respondent, Yardoo Pty Ltd; a further real property ("Szader's Block") held by the third respondent, Trevor Jeffrey Yard ("Trevor Yard"); a further real property ("Paladin") held by the appellant and the second, third and fourth respondents, Gladys Maxene Yard ("Gladys Yard"), Trevor Yard and Judith Lorraine Yard ("Lorraine Yard"), as joint tenants ("the Yard Partnership"); and a further real property ("Brian's Block") held by the fourth respondent, Lorraine Yard. In the second proceeding,[2] which was instituted by Lorraine Yard the judge allowed Lorraine Yard's claim that the appellant and other respondents had acted oppressively in the conduct of the affairs of Yardoo Pty Ltd and so conducted the affairs of the Yard Partnership as to warrant an order for dissolution of the partnership.

The facts

4 In brief substance the facts of the matter were found to be as follows. The appellant is an 83 year old farmer who lives at Murrayville, Victoria. He is married to Gladys Yard and they have one son Trevor Yard who was previously married to

Lorraine Yard. Trevor and Lorraine Yard separated in 1997 and subsequently divorced.

5 Prior to the appellant's marriage to Gladys Yard in 1946, he was the sole legal and beneficial owner of the land then registered in his name, the business of the Renown Garage and all related livestock, plant and equipment.

6 Following their marriage, the appellant and Gladys Yard conducted the farming and garage businesses as a partnership. But there was no evidence as to the start and finish of that partnership and the appellant did not transfer to the partnership the real property owned by him which was used to conduct the partnership.

7 At some later time, Trevor Yard became a member of the family partnership and during the subsistence of that partnership the appellant acquired more property in his own name. The appellant and Gladys Yard also kept substantial personal savings with General Credits.

8 The Yard Partnership commenced after the marriage of Trevor and Lorraine Yard, at about the same time that Pomona was purchased by the appellant in 1973. The earliest financial statements for the Yard Partnership are for the year of income ended 30 June 1975**.**

9 In common with the previous partnerships between the appellant and Gladys Yard, and the appellant and Gladys and Trevor Yard, there was no formal or written partnership agreement and no written transfer of any property, plant, equipment or livestock. But the 1975 financial statements for the Yard Partnership record that the assets of the partnership of GM, AJ & TJ Yard (plant & equipment, livestock, cattle) had been transferred to the Yard Partnership.

10 Although the Yard Partnership conducted its business on real properties owned by the appellant, he did not transfer any of the properties to the Yard Partnership and he did not receive any rent from the partnership for its use of the properties.

11 Pomona was purchased on 12 December 1973 pursuant to a contract dated 12 December 1973 in the names of Trevor and Lorraine Yard. The purchase price was $130,000.00, plus various plant and equipment. The vendor agreed to provide $65,000.00 vendor finance at 7% pa. The other half the purchase price was paid from a combination of moneys drawn from the Yard Partnership's Renown Garage Account, one of the Yard Partnership's farm accounts, General Credits accounts in the names of the appellant and Gladys Yard and the repayment of a loan from L Mason. The property was registered in the names of Trevor and Lorraine Yard as tenants in common in equal shares.

12 During the period 1974 to 1977 the Yard Partnership carried on the partnership businesses on Pomona as well as the properties originally registered in the appellant's name. The Yard Partnership financial statements treated Pomona as an asset of the Yard Partnership, and the vendor finance as a liability of the Yard Partnership, and also recorded proprietors' funds on the basis that each of the partners had contributed to the purchase of Pomona equally.

13 During 1976 the appellant took advice from an insurance agent, Richard Penrose, about avoiding death duties by transferring the appellant's real properties to a family company. Pursuant to that advice, the appellant retained his accountant Mr Brodie and solicitors, Freeman & Pitts, to attend to the incorporation of Yardoo Pty Ltd and the transfer of the real properties to Yardoo Pty Ltd. The transfer process took from 13 October 1976 to December 1977 and is evidenced by a volume of correspondence.

14 Following the transfer of the properties, Yardoo Pty Ltd conducted the business of the Renown garage and the Yard Partnership continued to conduct the farming business until at least the breakdown of the marriage of Trevor and Lorraine Yard in 1997.

15 On 5 July 1999 Lorraine Yard instituted proceedings against Trevor Yard in the Family Court of Australia[3] seeking a property settlement and maintenance.

16 Before the Family Court proceeding was determined, on 31 October 2000 Lorraine Yard commenced Action No 1044 of 2000 in the Supreme Court of South Australia[4] for injunctions to restrain Trevor Yard, Gladys Yard and Yardoo Pty Ltd from dealing with the assets of the Yard Partnership and Yardoo Pty Ltd., and on 15 November 2000 Lorraine Yard filed a Statement of Claim in that proceeding in which she sought orders for the dissolution of the Yard Partnership and the winding up of Yardoo Pty Ltd and a division of assets.

17 On 20 February 2001 the appellant instituted Proceeding 4542 of 2001 in the Commercial and Equity Division of the Supreme Court of Victoria for declarations that he was the beneficial owner of the property the subject of Lorraine's Yards claims.

18 On 9 March 2001, Martin J of the Supreme Court of South Australia cross-vested Action No 1044 of 2000 to the Supreme Court of Victoria and that action became Proceeding No 5151 of 2001.

19 On 10 August 2001 the Family Court proceeding was stayed pending the hearing and determination of the Victorian proceedings.

20 Proceedings 4542 of 2001 and 5151 of 2001 were heard at the same time before the same judge over some 14 sitting days between 26 July 2004 and 4 April 2005, and judgment was handed down on 24 March 2006.

21 The principal issue in Proceeding 4542 of 2001 was whether the real properties which had been transferred to Yardoo Pty Ltd were held on resulting or constructive trust for the appellant. The judge held that they were not. His Honour determined that Schedules 1, 2, 3, and 4 properties are held by Yardoo Pty Ltd legally and beneficially; that Szader's Block is held by Trevor and Lorraine Yard on trust for the Yard Partnership; that Paladin is held by the Yard Partnership legally and beneficially; and that Brian's Block is held by Lorraine Yard on trust for the Yard Partnership.

22 The principal issue in Proceeding 5151 of 2001 was whether the appellant and other respondents had acted oppressively in the conduct of the affairs of Yardoo Pty Ltd and conducted the affairs of the Yard Partnership in such a fashion as to warrant an order for dissolution of the partnership. The judge held that they had and his Honour ordered that Yardoo Pty Ltd be wound up on the just and equitable ground and that the Yard Partnership be dissolved pursuant to s 39(f) of the Partnership Act 1958 with effect from the date of the order.

Grounds of appeal

23 The grounds of appeal which were pressed in argument were as follows:

a) The judge failed to give adequate reasons for his findings of fact and law.

b) The judge erred in finding that the appellant intended to divest himself of legal and beneficial ownership of the Schedules 1, 2, 3 and 4 properties.

c) The judge erred in finding that the appellant intended to divest himself of the legal and beneficial ownership of Pomona.

d) The judge erred in finding that the Yard Partnership is beneficially entitled to Paladin.

e) The judge erred in finding that Szader's Block and Brian's Block are held on trust for the Yard Partnership.

f) The judge erred in holding that Yardoo Pty Ltd should be wound up.

g) The judge erred in holding that the Yard Partnership should be dissolved as at 25 March 2006.

(a) Adequacy of reasons

24 The judge's reasons for judgment are more than 225 pages long. They are comprised of a recitation of the background facts and events, a detailed statement of the evidence, a statement of each party's submissions and his Honour's considerations and conclusions drawn. The appellant's complaint about the inadequacy of the reasons is principally directed to the statement of considerations and conclusions. According to the appellant, it lacks analysis of competing factual issues and an analysis of relevant authorities.

25 In my view that criticism is unfounded. As has been noted, much of the case was concerned with the properties held by Yardoo Pty Ltd. As the judge explained, until 1977 all but one of the properties were held by the appellant and the one exception was held in the names of Trevor and Lorraine Yard as tenants in common. In 1977 all of the properties were transferred to Yardoo Pty Ltd in order to minimise probate and estate duties. The arrangement was promoted by the insurance salesman, Richard Penrose, now deceased, who was keen to sell the Yards some superannuation insurance policies. The arrangement was, however, implemented by the Yard's accountant, Mr Brodie. Mr Brodie gave unchallenged evidence that he conferred with the appellant about the arrangement at the time of its implementation and that it was well understood that the effect of the arrangement would be to transfer both the legal and beneficial ownership in the properties to Yardoo Pty Ltd. Mr Brodie said that there was no mention or intention of creating any trusts. At that time, he said, trading trusts were virtually a "no-no". The intention was that the Yard Partnership should continue to conduct the pastoral pursuits of the family but that the land should be transferred legally and beneficially to the company. The appellant was the patriarch of the family, and apparently assumed that other members of the family would continue to do as he said, and in that fashion that he would continue to exercise control over the properties for the rest of his life. The desired effect of the arrangement, however, was that by transfer of the legal and beneficial ownership of the land to Yardoo Pty Ltd, the appellant's interest in the land would be limited for death duty purposes to the value of his one quarter shareholding in the company. An added advantage, which was probably Mr Penrose's motivation in promoting the scheme, was that by transferring the Yard Partnership's motor garage business, the Renown Garage, to Yardoo Pty Ltd, the company would be provided with an assessable income from which to pay the premiums on superannuation policies on a tax-deductible basis.

26 Largely on the basis of that evidence, but also on the basis of the financial statements of Yardoo Pty Ltd and the Yard Partnership for the twenty years following implementation of the arrangement, the judge concluded that:

"508. The three central factors operating in the 1970s in the Yard family circle were these. First, Mr Alfred Yard by reason of hard work, long application and prudent management had substantial assets. Second, he was determined not to lose to government by way and duties any more of those assets than lawfully were required to be lost. Third, the family situation was for him a happy one. He had a loyal wife, and a hard working son who was happily married. The solution was available: divest himself of assets so that government hands could not reach more than lawfully necessary; and yet retain control. The former - the divesting - was achieved through lawful means: the extension of partnership and the incorporation of a company. The latter - control - was achieved in a time honoured way: he was the head of the family, he expected his wishes to be observed, and they were. The proposition central to proceeding no. 4542 - that the divesting was partial only and subject to trust, express or implied - is in my view ahistorical. That is, it was not what there and then occurred but is an anachronistic overlay, propounded because the control expected to flow from being family head is now inefficacious and thus is called in aid the notion of trust which was not an occurrence at the time the relevant events occurred.

509. There is clear evidence that in the mid 1970s Mr Alfred Yard, by reason of his own hard work and responsible management, had a satisfactory and settled existence. His inclination, an entirely lawful one, was as his accountant Mr Brodie made clear, to provide as little of his hard-earned assets to government as lawfully he could. His concern, as his experience with his father's estate drove home to him, confirmed by his son's friend's experience, was that Trevor's inheritance would suffer in government hands. The fast-talking Penrose, with his eyes on the income from insurance policies, was at hand with the solution. Mr Alfred Yard attended the Mildura offices of his accountant with his son and Penrose. Trevor was concerned at the cost of the insurance policies proposed by Penrose - thus the comment by Penrose to Lorraine Yard that Trevor would be the ruin of the family (305) - but as usual Mr Alfred Yard's wishes held sway. There was no discussion at the accountant's office about trusts or beneficial ownership, as Mr Brodie's evidence and Mr Irwin's witness statement make clear. The matter simply did not arise, because it was no part of the Penrose scheme and it was no part of Mr Alfred Yard's plan. Penrose did not need it because it was irrelevant to his aim; Mr Alfred Yard did not need it because he had personal control anyway. The attempt on behalf of Mr [Trevor] Yard to dredge to the surface the provisions of the Memorandum (clauses 11(6) and (20)) as to trust capacity is wholly ahistorical. Those provisions were not on Mr Yard's mind. They were not mentioned by Mr Brodie. They were not mentioned by Mr Irwin. They were not part of the intention of Mr Alfred Yard.

510. Mr Alfred Yard's intention was to negate the impact of death duties by divesting himself of ownership of property which otherwise could be liable to government claim upon his death. Divestment was necessary to avoid death duties. His intention would have been successful had he died. Fortunately he is alive and well, a credit to a man of his age and his hard-working and responsible lifestyle. But he achieved his intention.

511. Twenty years of loyal work by accountants confirms the above. The financial management and the books of account of the company and partnership reflect precisely the history: that there was a divesting by Mr Alfred Yard of ownership and there was no trust, express or implied. The evidence of Mr Brodie and Mr Ellery accurately reflects the financial dealings of the partnership and the company at the relevant times; not so the later work of Mr Remeljej. Market valuations were obtained from Mr Lackman. Stamp duty was assessed on the basis that the transactions were genuine as indeed they were. The consideration for the transfers was in the raising of the loan accounts. That was good consideration. The properties (including Pomona as transferred to Trevor and Lorraine and then by them to Yardoo) were transferred in legal and equitable title to avoid government impost."

27 With respect, I consider that his Honour's analysis makes clear the path of reasoning which led him to conclude that there was no intention on the part of the appellant to retain beneficial ownership in the properties.

28 It is true that the appellant gave evidence which was in some respects contrary to his Honour's conclusion. In evidence in chief the appellant stated that Mr Penrose told him that, despite the transfer of the properties to Yardoo Pty Ltd, it would not make any difference to the real ownership of the land and that Yardoo Pty Ltd would continue to hold the land for the appellant. The appellant also said that he told Gladys, Trevor and Lorraine Yard that the land was to be transferred to the company but that he had paid for it and that the transfer would not make any difference to the real ownership of the land or farming business. In cross-examination, he added this:

COUNSEL: There was no reference to any issue of a trust? --- I thought that's what it was all about.

COUNSEL: That's what I'm asking you. I'm suggesting to you that you never talk[ed] about a trust of any of these properties in mid' 1977? ---Well, I didn't know anything about trusts and I didn't know anything about the company but Mr Penrose was the advisor.

...

COUNSEL: The only reference to a trust is for income purposes, isn't it? That's what it says: "A trust for income purposes can be arranged"; do you see that? --- Yes.

COUNSEL: See, I'm suggesting to you that there was never, in any of your discussions with Mr Penrose, any suggestion that Yardoo held any of these properties after then transfer on trust for anyone? --- That's your suggestion, yes.

COUNSEL: Do you agree or disagree with it? --- Disagree.

29 Trevor Yard also gave evidence which was in some respects contrary to the judge's conclusion. In chief he stated that Mr Penrose had said that Yardoo Pty Ltd would be just a holding company and that nothing changes; you still own your land. And in cross-examination, Trevor Yard said this:

COUNSEL: I suggest to you that this claim that all these properties are held on trust for your father only arose after the Family Court proceedings commenced, that's right, isn't it? --- No.

COUNSEL: When do you say that claim was first made by your father? --- It's his company. I paid nothing , she's paid nothing in.

COUNSEL: But you're equal shareholders in the company, are you not? --- A dollar, a dollar I've been paid that back.

HIS HONOUR: Not a bad investment: pay a dollar and avoid probate, is it? --- That's right.

...

COUNSEL: No, just answer my question: that was the purpose of setting up Yardoo, wasn't it, that no probate duties would be paid in respect to the passing of the properties to you and Lorraine upon the death of your parents? --- No, I don't believe that's right. Penrose described this as a trust and we could have brought my son and his wife, and if something happened, then they only take out the share they put in, the money they put in.

HIS HONOUR: You said in paragraph 60 [of your witness statement]: "I do not remember Penrose using words such as 'trust'." You now say he described it as a trust, do you? --- No, flexibility, a company was the same as a trust but you had more flexibility.

HIS HONOUR: So he did use the word "trust", did he? --- I would say there's "trust" in the articles of association.

HIS HONOUR: When did you remember that? --- When did I remember?

HIS HONOUR: You said in paragraph 60: "I do not remember Penrose using terms such as 'trust', "family trust', 'discretionary trust' or 'trading trust'." When did you remember that he use the word "trusts"? --- In his articles of association.

HIS HONOUR: Did he read those out to you, did he? --- No, I've read them.

HIS HONOUR: I see. Where is the trust document? --- Where's?

HIS HONOUR: The trust document? --- Isn't' that the birth certificate of the company?

...

HIS HONOUR: All right, I follow all of that. Where is any document which says that the company held the property on trust for your father, or any piece of paper anywhere which says it? --- Articles of association.

HIS HONOUR: That it holds the properties on trust? --- I don't know whether they are the exact words, but doesn't that not mean that?

HIS HONOUR: Did Mr Brod[ie] advise you on that ? --- No.

HIS HONOUR: Who did? --- Me father.

HIS HONOUR: He told you, did he? --- Yes.

HIS HONOUR: When did he tell you that: --- He's been calling it a trust all his life or since he put it in.

30 Not surprisingly, however, the judge rejected that evidence as contrary to the objective evidence. As his Honour put it:

"I do not accept the evidence of Mr Alfred Yard or his son that at the time of the formative events, in the mid-1970s, or that thereafter there were discussions about trusts or there was an intention by the parties to establish trusts. Such evidence is contrary to the records, contrary to the events and contrary to the humanity of the then situation."

31 Apart from whether the judge's reasons adequately disclose his Honour's process of reasoning, the appellant contends that there are a number of errors in the judgment which singly or in combination vitiate his Honour's conclusion.

32 To begin with, the appellant says that the judge was in error in stating that the financial management and the books of account of Yardoo Pty Ltd and the Yard Partnership reflect precisely that there was a divesting by the appellant of ownership and that there was no trust, express or implied. According to the appellant, all witnesses agreed that the financial statements of Yardoo Pty Ltd and the Yard Partnership were inaccurate and did not reconcile, and in particular that the relevant financial statements of the Yard Partnership and Yardoo Pty Ltd in the period 1975 to 1977 were inconsistent with the purchase of Pomona in the names of Trevor and Lorraine Yard and its later transfer to Yardoo Pty Ltd at a value of $170,240.

33 I do not accept that contention. The witnesses did not agree that the accounts were inaccurate.

34 Mr Brodie's evidence was that the income and expenses of the businesses were correctly recorded in the accounts. He also said that, when he first started to act for the Yards, they were operating as a partnership between the appellant, and Gladys, Trevor and Lorraine Yard and that, as far as he had always understood the position to be, it was an equal partnership. Thus, income was split each year in equal proportions. When the real properties were to be transferred to Yardoo Pty Ltd, Mr Brodie advised that the purchase consideration should be funded by way of loan accounts in favour of the transferors with appropriate mortgages or acknowledgments of debt, and pursuant to his advice shareholder loan accounts were recorded in favour of the different partners in accordance with their ownership of the assets before transfer. He said that he regarded it as a genuine transaction. He conceded that some errors may have been made in the amounts debited and credited to the various loan accounts from time to time. But he added that any discrepancies in the accounting for different loan accounts between the Yard Partnership and Yardoo Pty Ltd were removed by adjustments made at the time of purchase of Hawick in 1993.

35 Similarly, Mr Ellery, who was a chartered accountant and certified practising accountant retained by the appellant for the purposes of the litigation, said that the balance sheet for Yardoo Pty Ltd as at 30 June 1977 recorded a sum of $382,009 next to land and buildings, which was the sum of the valuations of the properties which had been transferred to Yardoo Pty Ltd,[5] and that loan accounts in favour of the shareholders had been raised under the heading of "liabilities," representing in value their respective interests in the properties before transfer. He added that the raising of loan accounts in favour of shareholders in respect of the transfer of assets by them to a company was an accepted form of payment and an accepted form of consideration. He confirmed that, according to his understanding, it was necessary that the transfers to Yardoo Pty Ltd carry both the legal and beneficial interest in the properties in order to be effective for death duty purposes. He also agreed that he had not seen anything in the accounts to suggest that the transfers were other than genuine transfers of the assets from the partners of the Yard Partnership to Yardoo Pty Ltd and that there was no indication of anything other than that beneficial ownership had been transferred as part of those arrangements. He identified an inconsistency in the way in which the acquisition of Pomona had been accounted for. But he said that, subject to that one issue with Pomona, there had been an accurate and fair reflection in the accounting records of the Yard Partnership and of Yardoo Pty Ltd. of the transfer to Yardoo Pty Ltd of both the legal and beneficial interest in the properties.

36 Mr Lipson, another forensic accountant who gave evidence on behalf of Lorraine Yard, corroborated Mr Ellery's opinion as to the effect of the accounts.

37 So far as Pomona was concerned, Mr Ellery explained that there had been an inconsistency in accounting treatment as between Yardoo Pty Ltd and the partnership. As he put it in his report, the partnership recorded as an asset a loan to Yardoo Pty Ltd, but Yardoo Pty Ltd accounted for the purchase of Pomona as a loan from Trevor and Lorraine Yard. Mr Ellery stated that the error persisted between 1977 and 1992 but was rectified in 1993 as follows:

"In 1993, the loan in the Partnership balance sheet was adjusted to a loan to Yardoo of $49,959 and Yardoo recorded a corresponding liability. In that year the Hawick property acquisition by Yardoo was finalised and it is likely that the loan in the Partnership was adjusted as a part of the process of accounting for that acquisition. A comparison of the 1992 and 1993 balance sheets of the Partnership indicates that it is likely that Partnership assets were used to pay for Hawick which would explain the inter-entity loan. A comparison of the loan amounts of the shareholders in the Yardoo balance sheets of 1992 and 1993 shows that each loan increased by approximately $16,000, which is broadly consistent with recognising the apparent loan to the Partnership at 30 June 1992 of $56,607.

In my opinion, it is likely that transactions between the Partnership and Yardoo have ultimately been reflected appropriately in the accounting record of the two entities notwithstanding that the loans were not in balance until 1993."

38 Mr Brodie confirmed in his oral evidence that such adjustments were made in 1993. He explained that they were made at the time of purchase of Hawick because "the legislation became a little bit more stringent, so obviously I wanted to make certain that the balance sheet liability in one was equal to the asset in the other." In his witness statement he appeared uncertain as to whether the adjustments had anything to do with Pomona. His evidence in cross-examination was clearer:

COUNSEL: So what occurs in respect of the Pomona transaction is that although the full value of the legal ownership is attributed to Trevor and Lorraine equally, there is a loan raised between [the partnership] and Yardoo in the sum of $115, 918? --- That's the figure, yes, the figure it's got there.

COUNSEL: Is your evidence as I understand it, if one looks at paragraph 63 of your witness statement, being the new paragraph 63 on p.13, that as of 1993, the loan accounts in the partnership company were adjusted to agree? --- Yes.

COUNSEL: Insofar as there may have been any disparity in the loan accounts of Yardoo and the partnership in respect of the Pomona property, that after the purchase of [Hawick] in 1993, the relevant adjustments were made to the different loan accounts so that they conformed with the true situation? --- They balanced, yes.

39 The appellant contends that the thrust of Mr Brodie's evidence about the accounts was that they were "guesstimates" which were constructed to achieve the best taxation outcome and were the result of his making entries in the accounts without instructions. I do not accept that criticism. Mr Brodies' use of the expression "guesstimates" was directed to the allocation of income and expenses incurred on revenue account as between the partnership and Yardoo Pty Ltd on a year to year basis, and the consequent effect on shareholder loan accounts. As he explained in his oral evidence, the company supplied goods to the partnership and the partners made drawings from the partnership through the year without necessarily keeping accounting records of precisely what was supplied or drawn. Then at the end of the year it was necessary to make a "guesstimate" of what had been done:

"So come the end of the financial year when - whilst I've been preparing the figures for taxation purposes, you would find that the company's income would be substantially under what it should be and the partnership's income would be substantially over. And to be quite honest, it was really just a guesstimate as to how much needed to be transferred over to achieve the appropriate result for taxation purpose[s].

Since such adjustments bore on income of both the partnership and Yardoo Pty Ltd, they also bore on the shareholders loan accounts, and it was in that sense that Mr Brodie said:

"The only thing that's correct in the taxation balance sheet is the bank account, the debtors and the creditors. Everything else is potentially incorrect."

None of that reflected adversely on Mr Brodie's evidence that the transfers were accounted for at proper value and accurately.

40 The appellant points to the fact that the property Brian's Block was purchased in the names of Trevor and Lorraine Yard and yet treated in the accounts of the Yard partnership as if it were a Yard Partnership asset. In the appellant's submission, that is another error or inconsistency in the accounts which demonstrates that the judge was in error in holding that they accurately reflected the transfer of legal and beneficial interests in the properties.

41 In my view, however, that criticism is also unfounded. The weight of the evidence was that the property was purchased for $195,000 out of Yard Partnership funds. The appellant stated in his witness statement that "part of the purchase price was probably paid from a partnership account". He conceded in cross-examination that the purchase was financed in part on vendor terms and paid from partnership funds. The vendor accepted in cross-examination that the Yard Partnership made the payments of interest to him. That evidence was corroborated by Mr Ellery's analysis of the financial statements. There was too a letter of 19 February 1999 in which the appellant and Trevor Yard stated that Brian's Block is a partnership asset of the four partners.

42 Reference has already been made to the judge's statement that market valuations were obtained from Mr Lackman and stamp duty was assessed on the basis that the transactions were genuine, as indeed they were. The appellant contends that that the judge was wrong to consider that the valuation and payment of stamp duty were relevant to proof of intention and the reality of the transaction. Counsel for the appellant submits that the payment of stamp duty was obligatory regardless of whether Yardoo Pty Ltd was intended to hold the properties on trust for the appellant, and so to reason that it bespoke an intention to transfer beneficial ownership was demonstrative of error.

43 I do not think that is so. It is true that in 1977 stamp duty was payable on a conveyance on sale regardless of whether it involved a change in beneficial ownership. Consequently, at one level, the fact that duty was paid says nothing one way or the other about the intention to create a trust. But, as the evidence disclosed, and in any event is obvious, it would have been pointless for the appellant to transfer the properties and so incur a liability to conveyance duty while retaining a beneficial interest in the properties. According to the evidence, the appellant's only purpose in transferring the real properties was to avoid death duties; death duties could only be avoided if the beneficial interest were transferred; and that could not be achieved without the payment of stamp duty. The logical inference, therefore, is that the appellant so much wanted to avoid death duties that he was prepared to give up his beneficial interest in them and pay stamp duty for the privilege.

44 Consequently, so far from the payment of stamp duty being an irrelevancy, I regard it as a powerful indication of the appellant's intention to vest beneficial ownership in the company.

45 The appellant next attacks the judge's finding that the consideration for the transfers was the raising of the loan accounts and his Honour's conclusion that that was good consideration. The appellant contends that loan accounts are not per se payment or consideration made or given for a transfer of land and that before they may be so regarded it is necessary to establish an agreement between the parties to treat loan accounts in that fashion. In the appellant's submission it was not open to the judge to infer the existence of such an agreement in circumstances where it was not put to the appellant or to Trevor or Lorraine Yard that such was intended.

46 I do not find that argument persuasive. It appears to proceed upon a misconception that it was incumbent on one or more of the respondents to establish that the loan accounts were genuine, rather than for the appellant to establish that they were not genuine. As has already been noted, Mr Brodie's evidence was that he recommended the use of loan accounts as the means of financing the acquistion of the properties by the company and his recommendations were implemented. Thereafter, the accounts of the partnership and of the company for the next twenty years were made up in a fashion that was consistent with the reality of the loan accounts and hence the conclusion that the loan accounts were intended by the parties to be good consideration. It is also be remembered that Mr Ellery gave evidence, which was led by the appellant, that it was an accepted form of payment that loan accounts be raised in favour of shareholders and that there was nothing in the accounts to suggest that the loan accounts were other than genuine. Additionally, as Mr Brodie pointed out in his evidence, it was necessary to satisfy the Comptroller that the true consideration for the transfers was the amount of the loan. Indeed it would have been an offence knowingly to represent to the Comptroller that the loan accounts were consideration if they were not.[6] The logical inference is that the parties agreed that the loan accounts should stand as consideration for the transfer of the properties.

47 The appellant contends that, in view of Lorraine Yard's evidence that she had no understanding of any of the financial arrangements, it has to be concluded she could not have been party to an agreement that the loan accounts stand as consideration for the transfers. But I do not accept that submission either. Contractual intention is to be inferred objectively and her actions in transferring her interest in Pomona and accepting in return the benefit of a loan account balance bespeak a contractual intention to sell her interest in the land in return for the loan account balance. Similarly, the contractual intention of the company is to be inferred from the actions of its directors, which included the appellant and Trevor Yard, and the intention of the partnership must be gauged by how the partners conducted the partnership's affairs.

48 The appellant further contends that documentary evidence tendered at trial showed that Mr Brodie did not have instructions from the Yards when he purported to record the consideration for the sale as loans due to the shareholders and that none of the correspondence identifies any instructions ratifying his actions. The appellant relies in particular on a letter dated 27 May 1977 from Freeman & Pitts, solicitors, to the Yards; a letter dated 27 May 1977 from Freeman & Pitts to Mr Brodie's firm, Thomson & Associates; a letter dated 31 May 1977 from Thomson & Associates to Freeman & Pitts; and a letter dated 17 June 1977 from Freeman & Pitts to the Yards.

49 In my view that contention breaks down at a number of levels. To begin with, it was not raised below and so the judge was not required to consider it. In the second place, it appears to me that the most likely conclusion to be drawn from the correspondence is that Yards well understood that the loan accounts were to be the consideration for the transfers. For example, in the letter of 17 June 1977 from Freeman & Pitts to the Yards, it was written:

"...it is understood that the transfers may be passed at the Stamps Office without required proof as to the manner of payment of the consideration and accordingly have not prepared acknowledgment of debt by the Company. If necessary some form of acknowledgment will be prepared at a later date."

In the third place, it was never put to Mr Brodie that the loan accounts were not truly intended to be the consideration for the transfers. To the contrary, his evidence was that they were truly intended to be the consideration and that he would have explained the effect of the transaction to the Yards. In the fourth place, even if Mr Brodie did not have instructions at the time of implementing the loan accounts (and that was not established), it is open to infer that the parties ratified his actions by approving and adopting the annual accounts of the company and the partnership for the next twenty years. In the fifth place, Freeman & Pitts were not called and if it really were the case that the loan accounts were not intended to be consideration for the transfers, it is highly improbable that they would not have known about it.

50 Finally, on this aspect of the matter, the appellant points to the fact that, although some of the correspondence made mention of the possibility of documentation being drawn up, none was drawn up. The only document which expressly provided for payment by loan accounts was an agreement for the sale of the garage business as opposed to the land on which it was conducted. The appellant submits that none of the evidence or the findings of the judge discloses the existence of an express agreement between the members of the Yard Partnership that the loan accounts were to stand as consideration for the transfer of the real properties to Yardoo Pty Ltd, and that in those circumstances it was not open to the judge to treat the loan accounts as good consideration.

51 I do not accept that submission either. It is true that there was no direct evidence of the existence of an agreement to treat the loan accounts as consideration for the transfers. It may also be that the parties never said to each other in so many words that they agreed to treat the loan accounts as good consideration. But an agreement for a loan need not be express. It may be implied from conduct. And when parties so act towards each other that the most likely and logical explanation of their actions is a relationship of which the law conceives as an agreement of a particular kind, it is open to infer that they have by their conduct committed themselves to that sort of agreement.[7]

52 Counsel for the appellant submits that it is in just such circumstances that a resulting trust may arise. He points to Lord Millet's observation in Air Jamaica Ltd v Charlton[8] that a resulting trust arises whether or not the transferor intended to retain a beneficial interest; it responds to an absence of intention on the transferor's part to pass a beneficial interest to the recipient. In his submission, the absence of an express agreement that the loan accounts should stand as consideration for the transfers implies that the appellant did not intend to transfer beneficial ownership of the properties to Yardoo Pty Ltd.

53 But apart from the reference to Lord Millet's speech, that submission does not appear to me to add anything to the submissions already put. The fact is that there was communication in the form of the issue of the shares in Yardoo Pty Ltd and in the establishment of the loan accounts of Yardoo Pty Ltd and in the published accounts of the partnership and the company for the next 20 years. Lorraine Yard may not have understood the effect of the communication - the evidence shows that her comprehension of its significance was limited - but judged objectively, the appellant's avowed aim of avoiding death duties; the consequent transfer of the properties; the establishment of loan accounts; and their perpetuation for more than 20 years, even after death duties were abolished, belies the existence of any intention on the appellant's part to retain a beneficial interest in the properties.

(b) Whether open to find that the appellant intended to divest himself of legal and beneficial ownership of the Schedules 1, 2, 3 and 4 properties

54 Much of what has been said already bears on the question of whether it was open to the judge to find that the appellant intended to divest himself of legal and beneficial ownership of the Schedule 1, 2, 3 and 4 properties. For the reasons I have given, I consider that his Honour was entitled to conclude that the financial management and the books of account of the company and partnership reflected that there was a divesting by Mr Alfred Yard of ownership and that there was no trust, express or implied. That goes a long way toward the conclusion that the appellant did intend to divest himiself of beneficial ownership in the properties. The appellant, however, makes four principal attacks on that conclusion.

55 The first is a contention that the judge took several extraneous considerations into account in a manner which vitiated his Honour's decision; the second, that the judge's conclusion is contrary to the judge's finding of fact that, at the time of transfer of the properties to Yardoo Pty Ltd, the appellant intended to retain control of the properties by direction to other members of the Yard family, and in particular Lorraine Yard; the third, that the judge failed to analyse the appellant's claim in accordance in accordance with the method directed by the High Court in Calverley v Green;[9] and the fourth, that if the appellant did intend to vest beneficial ownership in Yardoo Pty Ltd, it was for a purpose which has now failed such that Yardoo Pty Ltd holds the properties on resulting or constructive trust for the appellant.

56 I begin with what are said to be the extraneous considerations and therefore at paragraph [507] of the reasons for judgment, where his Honour said:

"I have extensively reviewed the history as stated by the witnesses because it is essential that fact-finding proceed upon an historical and not anachronistic base. Value judgments of a later period, or of today, are to be avoided in the finding of fact and the drawing of inference in matters past. Also, contemporary metropolitan values, so far as they might differ from past rural values, are to be eschewed. Thus I proceed upon the basis of the finding of fact and the drawing of inference in the setting of the events then and there, not here and now."

The appellant contends that his Honour's stated objective of making findings of fact on "an historical basis" represents an "ill defined standard of conduct applied in an apparently contradictory manner".

57 I do not agree. With respect, I take his Honour's statement to mean only that he endeavoured to assess the appellant's and other parties' states of mind as they were at the time of implementation of the transaction, as opposed to what they may have been or become at a later point in time.

58 Secondly, I have already noted the judge's finding that he did not accept the appellant's evidence of intention. The appellant contends that the judge's reference to the humanity of the situation signifies the taking into account a factor which was not relevant to the judge's function and the legal issues before the court.

59 Again I disagree. I take his Honour's reference to "the humanity of the situation" as being a compendious description of the facts which his Honour set out in paragraph [508], namely, that:

"...[The appellant] was determined not to lose to government by way of taxes and duties any more of those assets than lawfully were required to be lost...the family situation was for him a happy one. He had a loyal wife, and a hard working son who was happily married. The solution was available: divest himself of assets so that government hands could not reach more than lawfully necessary; and yet retain control. The former - the divesting - was achieved through lawful means: the extension of partnership and the incorporation of a company. The latter - control - was achieved in a time honoured way: he was the head of the family, he expected his wishes to be observed, and they were."

60 Thirdly, at paragraph [516] of the reasons for judgment, the judge observed that:

"516 Nor is it efficacious to assert, as on his behalf it repeatedly is, that Lorraine Yard is seeking a windfall. Time and again it was put in cross-examination, or in submission, that Lorraine made no financial contribution. The literally repeated question 'Without paying anything?' at 310 is illustrative of that proposition. Likewise the submission (paragraph 150 of the further submissions for Mr Alfred Yard of 2 May 2005) 'No money in, and 25% out'. That analysis is inadequate. There are contributions other than financial. Traditionally, farming communities have survived and prospered on non-financial contribution of persons, especially wives and loyal children. So too here. Lorraine Yard made a substantial contribution to the economic viability of the family enterprise. She raised the children - a most significant matter in itself, and also one enabling her husband to work the family enterprise. She maintained the home. As the children grew older, she assisted in the Garage and on the farms, in a limited way but appropriate to her situation. To assert that she has no financial claim because she did not put money in is an inadequate proposition both in law and in equity.

518. What Lorraine Yard seeks in proceeding no. 5151 is no more than the corollary of the historical arrangements that occurred. She might have contributed for 25 years with little financial reward. That has not occurred. The legal and accounting arrangements set in place by Mr Alfred Yard were not so set for her benefit. They were set for the reasons I have stated. But they were set consciously and deliberately. The corollary of the legal and financial arrangements is that Lorraine

Yard's claim in proceeding no. 5151 for her quarter share is made out...".

The appellant contends that Lorraine Yard's non-financial contributions were irrelevant to the determination of her legal and equitable entitlement and that, whatever might have been their significance to her claim in the Family Court under ss 75, 79 and 80 of the Family Law Act 1975 (C'th), the judge was in error in taking her non-financial contributions into account.

61 I do not think that is so. As can be seen from paragraph [518] of his Honour's reasons, the point with which his Honour was concerned was that, although Lorraine Yard had made significant non-financial contributions, it was not for that reason that she was entitled to the relief which she sought. As his Honour put it, she might have contributed for 25 years with little financial reward. But in the event she was rewarded - not for her non-financial contributions, but because of the legal and accounting arrangements consciously and deliberately set in place by Mr Alfred Yard with the effect of transferring the legal and beneficial interest in the properties to Yardoo Pty Ltd.

62 The appellant draws attention to the judge's statement that his Honour based his findings of fact on the standards of a rural community operating in the 1970's and his Honour's finding, consistent with those standards, that at the time of implementation of the transfer of properties to Yardoo Pty Ltd the appellant as patriarch of the Yard family expected to continue to exercise control over the properties. In the appellant's submission, the ability to control the use of property is one of the key indicators of benefical ownership and the fact that other members of the Yard family were expected to and did comply with the appellant's wishes is sufficient to show that they were not free to deal with the properties as they chose but held them for the benefit of the appellant. As the appellant would have it, the judge disregarded the ability of the appellant to control the use of the properties and so erred in holding that the tranfer of the properties to Yardoo Pty Ltd included beneficial ownership.

63 In my view that submission confuses intention with expectation. For the reasons already stated, the judge was entitled to conclude that the appellant's intention was that legal and beneficial interest ownership of the properties should be conveyed to Yardoo Pty Ltd. The purpose of the transfer was to avoid death duty and, as Mr Brodie said he would have explained to the appellant, duty could not be avoided unless the legal and beneficial interest in the properties was transferred to Yardoo Pty Ltd. At the same time, having regard to the standards of behaviour which the judge supposed to apply in the 1970's, it was open to his Honour to conclude that the appellant's expection was that he would continue to have his way with the properties. Given then that the appellant expected to maintain control over the properties, but that the appellant intented that Yardoo Pty Ltd should own the properties legally and beneficially, the judge was surely entitled to conclude that the appellant's expectation of maintaining control rose no higher than an assumption that other members family would exercise their rights in respect of Yardoo Pty Ltd in accordance with his wishes. With respect, I would do the same.

64 His Honour explained his approach in the passage of his judgment which I have set out above at [26]. In my view the logic of that is compelling. Putting aside the possibility of estoppel or laches, acquiescence or delay[10] - which have not been alleged - once Yardoo Pty Ltd had been incorporated and the properties were transferred, the other members of the family were free to exercise their rights as shareholders when and if they chose. The fact that they did not do so for many years makes no difference to that conclusion. The appellant having made the decision to vest legal and beneficial interst in the properties in Yardoo Pty Ltd, and to that end having procured the issue of shares in the company to the other members of the family, was bound by the effects of his decision.

65 In Calverley v Green Mason CJ and Brennan J said that :

"....On the termination of an association between a man and a woman who are not married to each other, no discretionary power may be exercised and the jurisdiction of the courts of equity is simply to declare the proprietary rights of the parties - a jurisdiction which a court of equity is not at liberty to exceed either in the case of husband and wife or in the case of a man and woman who are not married: see Wirth v. Wirth, per Dixon C.J. at pp 231-232; Hepworth v. Hepworth (1963) 110 CLR 309, per Windeyer J. at p 317. Therefore, special rules affecting the title to property of husband and wife can have no application in the present case.

The next question is whether the equitable presumption applicable when unequal contributors to the purchase price who are not spouses and who take a conveyance to themselves as joint tenants is rebutted or qualified by the circumstances. The equitable presumption can be rebutted or qualified by evidence of a contrary intention common to the contributors of the purchase price. When a common intention is in issue, it is not ordinarily to be found in an uncommunicated state of mind; it is to be inferred from what the parties do or say."[11]

66 In the appellant's submission, the judge failed to comply with that method of approach by introducing the concept of "the humanity of the then situation" into an assessment of equitable rights or alternatively by ignoring that the true humanity of the situation was that the properties were acquired by reason of the appellant's hard work, long application and prudent management and that Lorraine Yard had made little or no contribution to the acquisition of the properties.

67 I reject that submission. I have dealt already with the judge's use of the expression "the humanity of the situation" and its significance in his Honour's process of reasoning. The fact that a good deal of the value of the properties may have come from the hard work and diligence of the appellant was also not in issue. What was in issue was whether the appellant chose to have the properties conveyed to a Yardoo Pty Ltd so as to divest himself of any beneficial interest in the properties, and thereby to avoid death duty which it was feared would be payable on his demise. And for the reasons I have given, I consider that it was well open to the judge to conclude that that the appellant made that choice.

68 The appellant's argument based on failure of purpose is effectively an alternative contention to his principal contention that he did not intend that Yardoo Pty Ltd should have beneficial interest in the transferred properties. As I comprehend the argument it proceeds by the following steps:

• The purpose of the transfers to Yardoo Pty Ltd was the minimisation or avoidance of death duty.

• The scheme was only ever intended to benefit family members upon the appellants death.

• Death duty has now been abolished and so the purpose of the scheme has failed.

• Further or alternatively, Lorraine is no longer a member of the family, and is no longer prepared to comply with the appellant's directions concerning the properties, and therefore Lorraine Yard is no longer in the class of persons whom the appellant considers to be an eligible beneficiary upon his death.

69 It is convenient to deal with each of those propositions in turn. The first seems to me to overstate the position. The object of the transfers to Yardoo Pty Ltd was plainly to avoid death duty. But, as a matter of law, the purpose of the transfers was to vest the legal and beneficial interest in the transferred properties in Yardoo Pty Ltd.

70 As to the second proposition, the object of the exercise was doubtless to benefit the appellant and Gladys, Trevor and Lorraine Yard. But as a matter of law the intention behind the scheme was to benefit Yardoo Pty Ltd and thereby the shareholders in that company.

71 The third proposition is correct. Death duty has now been abolished and thus, as events have turned out, it was not necessary for the properties to be transferred to Yardoo Pty Ltd in order to avoid death duty in respect of them.

72 The fourth proposition, however, does not follow from the third. The purpose of the scheme was to vest the legal and beneficial interest in the properties in Yardoo Pty Ltd and there is nothing about the repeal of death duties which affects that outcome. Evidently, Lorraine Yard is no longer a member of the family and it is true that she is no longer prepared to abide the wishes of the appellant with respect to the transferred properties. But that does not mean that she has ceased to be a member of a class of beneficiaries that was intended to benefit from the transfer. It may be assumed, as the judge found, that the appellant's motive for wishing her to benefit was because she was a member of the family who was in the habit of complying with his wishes. But the appellant's purpose in procuring the transfers of the properties to Yardoo Pty Ltd was to vest the beneficial interest in the properties in Yardoo Pty Ltd so that, inter alia, Lorraine Yard could benefit as a shareholder.

73 More fundamentally, the resulting trust argument appears to me to be the product of two misconceptions: that because of the appellant's failure to foresee the abolition of death duties, the transfers to Yardoo Pty Ltd failed to dispose completely of the beneficial interest in the properties; and that the appellant transferred the properties to Yardoo Pty Ltd for no or less than full consideration.

74 If the transfers to Yardoo Pty Ltd had failed to dispose completely of the beneficial interest in the properties there might have been room for the recognition of a resulting trust.[12] But that is not the case. The transfers were intended to and did vest the full beneficial interest in Yardoo Pty Ltd. Despite the motivation of avoiding death duty which lay behind that intention, and the latterly revealed futility of the exercise, there is no room for a resulting trust where what has been achieved is what was intended.[13]

75 Equally, if the facts had been that the appellant transferred the properties for no or less than full consideration, Yardoo Pty Ltd would likely have held properties on resulting trust for the appellant.[14] But the facts are that the properties were variously transferred by the appellant and Gladys Yard and from the two partnerships for full consideration in the form of the shareholder loan accounts and with the intention that the legal and beneficial interest in the properties to be vested in Yardoo Pty Ltd so that they would not be subject to death duties.

76 In his statement of claim the appellant alleged that because Yardoo Pty Ltd has not yet paid the amount of the consideration to the appellant, Yardoo Pty Ltd holds the properties on resulting trust for the appellant. But that allegation is also answered by the fact that the appellant agreed to accept a loan account debt as consideration for the transfer. The circumstance that the debt has not been paid does not mean that the debt was any the less full consideration. It means at most that the debt may prove not to be worth as much as it was thought it would be. There is no suggestion that the debt was to be secured on the properties, and no evidence that it was, and in those circumstances the idea of the resulting trust is baseless . For the same reason, the appellant's claim that he was entitled to an equitable charge by way of security is untenable.

77 The appellant's final variation on the resulting trust claim is a contention that because Lorraine Yard did not pay for any of the properties which were transferred to Yardoo Pty Ltd, and further or alternatively because the appellant paid the $1.00 subscription moneys on the issue to Lorraine Yard of her one share in Yardoo Pty Ltd, she held that share on resulting trust for the appellant.

78 The answer to the first point is that on the facts as found the appellant intended that the beneficial interest in the properties be conveyed to Yardoo Pty Ltd, so as to limit his interest to the one share in the company that was issued to him. The answer to the second is that because the appellant so wished to limit his interest in respect of the properties to the one share which was issued to him, it is to be presumed that he intended Lorraine Yard to hold her one share in the company beneficially for herself. And that presumption is borne out by the evidence that, after the share was issued to her, she was paid dividends in each of the years of income ended 30 June 1984, 1987 and 1988, which were returned for tax purposes as part of her assessable income, and she was never asked to account to the appellant for that income.

79 As to the doctrine of constructive trusts, the appellant relies on the observations of Deane J in Muschinski v Dodds that:

"...the principle operates where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in the circumstance in which it was not specifically intended or specially provided that the other party should so enjoy it."[15]

The appellant contends that the marriage of Lorraine Yard to Trevor Yard was the substratum of Lorraine Yard's relationship with the appellant and that it was upon the basis of that substratum that the appellant contributed money and property for the avoidance of death duty to her benefit. Now, however, since the marriage is over, he says that the substratum of the relationship is removed and therefore that she holds the benefit of the appellant's largesse on remedial constructive trust for him.

80 In my view the analogy with Muschinski v Dodds is inapt. As Deane J said in that case, the fact that a constructive trust remains predominantly remedial does not mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice. It is available only when warranted by established equitable principles or by legitimate processes of legal reasoning, by analogy, induction and deduction, from the starting point of a proper understanding of the conceptual foundation of such principles.[16]

81 It is one thing to reason by analogy from the equitable principles which apply to the distribution of property on the dissolution of a partnership, to a distribution of property which ought apply upon the dissolution of a marriage or a relationship of a similar order. But it would require a fundamentally different leap of logic to conclude that, because on the dissolution of a partnership the partners are entitled to share in the capital according to their contributions, on the dissolution of a marriage between man and wife the father in law of the woman is entitled in equity to recapture by the mechanism of a remedial constructive trust such gifts and other dispositions as he may have made in her favour during the marriage in the expectation that the marriage would endure.

82 In Mushinski v Dodds, Deane J also said that:

"...the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle."[17]

I am not aware of any equitable principle which would preclude the retention or assertion by Yardoo Pty Ltd of beneficial ownership of the properties which were transferred to it, or the retention or assertion by Lorraine Yard of the share in that company that was issued to her with the intention that she should enjoy it. No such principle has been suggested. And in the absence of such a principle, so to reason would in my view be to indulge in the very sort of idiosyncratic notions of fairness and justice which Muschinski v Dodds decried.

(c) Beneficial ownership of Pomona

83 At trial the appellant advanced an argument that although Pomona had been purchased in the names of Trevor and Lorraine Yard, they held the property on resulting trust for him and so, upon its transfer to Yardoo Pty Ltd, the company held the property on resulting trust for him.

84 In my view, the short answer to that point is that, even if Trevor and Lorraine Yard had held the property on resulting trust for the appellant, the judge was entitled to conclude, as his Honour did, that the appellant procured the transfer of the properties to Yardoo Pty Ltd with the intention that the beneficial interest should vest in Yardoo Pty Ltd, and with the intention that Trevor and Lorraine Yard should each be issued with a share in the company for their own benefit. In effect, it is the same answer as may be given to the argument that, because Lorraine Yard did not pay for her share in Yardoo Pty Ltd, she holds it on resulting trust for the appellant.

85 A further answer is that upon the evidence to which I have already referred, the judge was entitled to find, as implicitly he did, that Trevor Yard and Lorraine Yard held Pomona beneficially and therefore not on resulting trust for the appellant.

(d) and (e) Beneficial ownership of Paladin, Szader's Block and Brian's Block

86 In her statement of claim in Proceeding 5151 of 2001 Lorraine Yard alleged that the Yard Partnership conducted the business of farming on properties owned by Yardoo Pty Ltd and on properties owned by the partnership or alternatively by the members of the partnership, and that those of the properties which were owned by the partnership or members of the partnership included Paladin, Szader's Block and Brian's Block. By his defence in that proceeding, the appellant denied that the properties were owned by the partnership or by the members of the partnership and alleged that they were properties which one way or another were beneficially held for him. The judge held in each case that the properties were owned by the partnership.

87 The appellant now contends that the judge was wrong so to hold on the basis that, before the acquisition of those properties, the partnership farmed on land owned by persons other than itself, namely, to begin with the appellant and later Yardoo Pty Ltd, and that later the partnership substantially financed the acquisition of Paladin and Szader's and Brian's out of partnership revenue. On that basis it is said that decision in Steward v Blakeway[18] or alternatively s 24(3) of the Partnership Act 1958 compels the conclusion that ownership of additional land acquired out of partnership revenue should accrue to the owner of the property first made available for the generation of that revenue.

88 I am unable to see that Steward v Blakeway has much to do with the matters in issue. That case decided that where land was acquired out of partnership income but treated by the partners as being other than a partnership asset, it did not become a partnership asset. It does not appear to me to compel the view that that ownership of additional land acquired out of Yard Partnership revenue should accrue to the appellant.

89 Section 24(3) of the Partnership Act 1958 is relevant. It provides that:

"(3) Where co-owners of an estate or interest in any land, not being itself partnership property, are partners as to profits made by the use of that land or estate, and purchase other land or estate out of the profits to be used in like manner, the land or estate so purchased belongs to them, in the absence of an agreement to the contrary, not as partners, but as co-owners for the same respective estates and interests as are held by them in the land or estate first mentioned at the date of purchase. "

But the section does not appear to me to take the appellant very far.

90 It is true that property used for partnership purposes does not necessarily become partnership property. It may remain the separate property of one or more of the partners. But that is a question to be determined on the basis of any express agreement as to how the property should be regarded and, in the absence of an express agreement, as a matter of inference to be drawn from the manner in which the partners have dealt with the property during the life of the partnership. So, for example, if a partnership pays or credits the owner of the property with rent for use of the property, it may be inferred that it was not intended to become partnership property. On the other hand, if the partnership credits the capital account of the owner of the property with the value of the property, it may be inferred that the property has become partnership property.[19]

91 In this case the judge found that Paladin was purchased with partnership money and registered in the names of the partners. On that basis, the logical inference was that the property was intended to be partnership property. It is true that that the appellant gave evidence in chief that he paid part of the purchase price. But he contradicted that evidence when cross-examined and the judge preferred the evidence which he gave in cross-examination.

92 There was no dispute that Szader's Block was purchased with partnership funds. The source of the funds was three cheques from an AGC partnership account totalling $21,188. The property was registered in the names of Trevor and Lorraine Yard alone, but the judge inferred that it was the intention of the parties that it be a partnership asset.

93 Brian's Block is in a similar position. As already noted, it was purchased in the name of Lorraine Yard, but the preponderance of the evidence was that it was purchased with partnership funds and in any event Lorraine Yard accepted that it was intended to be a partnership asset. Hence the judge so found.

94 Finally, on this aspect of the matter, the judge's conclusion that the three properties were partnership properties is also supported by s 25 of the Partnership Act 1958, which provides that, unless the contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of the firm. As interpreted by the High Court in Carter Bros v Renouf,[20] the section means that in order to rebut the presumption it is necessary that the contrary intention be common to all partners. In this case that was not established.

95 Consequently, I see no error in his Honour's conclusion that each of Paladin, Szader's Block and Brian's Block were Yard Partnership assets.

(f) Order to wind up Yardoo Pty Ltd

96 Counsel for the appellant submitted, albeit faintly, that the judge was in error in holding that the affairs of Yardoo Pty Ltd had been conducted in a manner that was oppressive to Lorraine Yard. The evidence of oppression was, however, overwhelming. Following the separation of Trevor and Lorraine Yard on 15 December 1997, the appellant and Trevor Yard consistently conducted the affairs of Yardoo Pty Ltd with the intention of destroying the value of Lorraine Yard's share in the company. Their actions in that regard included procuring the assignment of the business of the Renown Garage from Yardoo Pty Ltd to a new partnership of which they and Gladys Yard were the only members, so as to deprive Yardoo Pty Ltd of any income; passing resolutions in 1999 purporting to remove Lorraine Yard as a shareholder of the company; and procuring the sale of Tully's Block to Vic Grain in 2001 without any consultation with Lorraine Yard. The appellant admitted in cross-examination that he had acted without any consultation with Lorraine Yard so as to directly defeat any claim she may have had. He also admitted that after 15 December 1997 he had consistently apposed all applications by Lorraine Yard to be given financial documents relating to Yardoo Pty Ltd. The fact was that she was consistently denied access to any financial information. The appellant's attitude was that Lorraine Yard was not entitled to any information concerning the company's affairs or to part of the company's assets. And Trevor Yard gave similar evidence that it was his intention to remove Lorraine Yard from the company after separation and that he was a prime mover in the purported attempt to remove Lorraine as a director and shareholder from Yardoo.

97 Counsel for the appellant argued in the alternative that, if oppression were established, the judge erred in ordering that Yardoo Pty Ltd be wound up rather than that it purchase Lorraine Yard's share in the company. Counsel stressed that the company was a family company of which substantially the only purpose was to hold family properties, and given that Lorraine Yard sought no more than to realise the value of her interest in those properties, the clearly appropriate remedy was an order for compulsory purchase. It was he submitted pointless and wasteful to incur the costs which a winding up would entail and it was unnecessary and unduly burdensome on the respondents to require that all the properties be sold.

98 I accept that submission. Where a member of a company seeks to have the company wound up on the just and equitable ground, the court will generally refuse to intervene if the member can extricate himself or herself by selling shares at a fair price.[21] Similarly under the oppression provisions of the Corporations Act 2001, where the applicant seeks to leave the company, the most usual order is for the purchase of the applicant's shares at fair value.[22] The logic in each case is the same. There is no point in imposing the cost and disruption of a winding up when it is possible to provide the applicant with a just remedy by means of the purchase of shares.

99 The date and method of valuation vary according to the circumstances of each case. What needs to be assessed is the value which will put the applicant in the position as if there had been no oppression.[23] Since Yardoo Pty Ltd is a landholding company which no longer carries on business, logic suggests that the basis of valuation should be net tangible assets without discount for minority holding[24] and that the appropriate date for valuation should be the date of commencement of the oppression or, failing a clear guide as to that, the date of commencement of the oppression proceedings.[25] If that date were chosen, however, it would be necessary to add something by way of damages in the nature of interest to compensate Lorraine Yard for being kept out of the increase in the value of the company's assets since that time and it would be difficult without evidence to determine what that rate should be.[26] All parties were thus agreed that if there were to be a compulsory purchase the shares, the shares should be valued as at the date of the trial in accordance with valuation evidence tendered below.

100 Counsel for the appellant submitted that the calculation of the value of shares on that basis should be referred to the trial judge or a Master. But I do not think that is necessary. The evidence tendered below included valuations of the shares prepared by the two expert valuers to whom I have already referred, Mr Ellery and Mr Lipson, and they were agreed in all respects except as to the value of land. Mr Ellery worked on land valuations prepared by a land valuer retained by the appellant, Mr Wapper, whereas Mr Lipson worked on land valuations prepared by a land valuer retained by Lorraine Yard, Mr Wakeham. The differences between Mr Ellery's valuation of the shares and Mr Lipson's valuation were thus only as follows:

Item Mr Ellery Mr Lipson

Cash at bank $10,706 $10,706

Land & buildings $2.511,500[27] $2,803,500[28]

Plant & Equipment $1,507 $1,507

Total assets $2,523,713 $2,815,713

Loans -$710,722 -$710,722

Total liabilities -$710,722 -$710,722

Net assets $1,812,991 $2,104,991

Lorraine Yard's one share (1/4) $453,248 $526, 248

101 The judge found that Mr Wakeham's valuations were to be preferred with respect to all of the land bearing on the valuation of the shares in Yardoo Pty Ltd. I would therefore set the price at which Yardoo Pty Ltd should be required to purchase Lorraine Yard's shares at $526,248.

(g) Order that the GM, AJ, TJ and JL partnership (the Yard Partnership) be dissolved as at 25 March 2006

102 The judge found that it was just and equitable that the partnership be wound up and ordered, pursuant to s 39(f) of the Partnership Act 1958, that it be wound up and that there be a taking of accounts and the payment to Lorraine Yard of her due share, pursuant to s 43 of the Act. His Honour added that:

"The date for assessment of property and of value both for the company and for the partnership is today, 24 March 2006, the date of the ordering of the winding up of the company and of the dissolution of the G.M., A.J., T.J. and J.L. partnership."

103 The appellant contends that the date of dissolution should be 5 July 1997 (being the date on which Lorraine Yard instituted the Family Court proceedings) or alternatively 1 November 2000 (being the date on which she instituted proceedings in the Supreme Court of South Australia. He relies on the decision of Lander J in Edmunds v Pickering[29] as authority that the institution of the Family Court proceedings was notice of intention to dissolve the partnership for the purposes of s 36 of the Partnership Act 1958.[30]

104 I do not consider that Edmunds v Pickering provides any support for that proposition. That case concerned a trustee of a settlement who had entered into an unauthorised dealing for his own benefits. The issue was whether the dealing should be set aside. It was held that such a dealing could be set aside at the election of a beneficiary and that the beneficiary had so elected by institution of the proceeding for that relief. The case is authority for the unremarkable proposition that the institution of a proceeding for particular relief may constitute an election that excludes the possibility of an alternative course of conduct. But the appellant's counsel appears to be correct that the institution of a proceeding for the dissolution of a partnership may stand as notice of intention to dissolve the partnership, and that, if an order for dissolution is made, the dissolution is to date back to the date of the writ.[31]

105 So far as I can tell, Lorraine Yard did not seek dissolution of the partnership in the Family Court proceeding, but she did seek an order for dissolution in the South Australian proceeding (which became Proceeding 5151 of 2001). It follows in my view that the date of dissolution of the partnership should be the date of commencement of the South Australian proceeding.

106 The judge did not explain his decision that the date of dissolution should be the date of the order and it does not appear whether the appellant submitted that it should have been a different date. But the point having now been raised, it seems to me that his Honour's order should be varied accordingly. In my view, the writ in the South Australian proceeding was notice of Lorraine Yard's intention to dissolve the partnership and so the date of dissolution should be 1 November 2000.

Conclusion

107 For the reasons I have given, I would allow the appeal in Proceeding 5151 of 2001 and order that paragraphs 1 to 6 of the judge's orders made 24 March 2006 be set aside and in lieu thereof that it be ordered that:

1. Subject to paragraph (2) of this order, on or before 30 June 2007 Yardoo Pty Ltd shall purchase Lorraine Yard's one share in the capital of the company for $526,248 with an appropriate reduction of the company's share capital.

2. If the sale provided for in paragraph (1) of this order is not completed before 1 July 2007, the obligation to purchase the share shall be at an end and the company shall be wound up pursuant to s 233(1)(a) of the Corporations Act 2001 and Paul Pattison shall be appointed liquidator for the purposes of the winding up.

3. Subject to paragraph (4) of this order, on or before 30 June 2007, Yardoo Pty Ltd shall repay to Lorraine Yard from the assets of Yardoo Pty Ltd the sum of $123,171.00 in full and final discharge of her loan account with the company.

4. If the amount provided for paragraph (3) is not paid in the manner and time therein provided, the obligation so to pay shall be at an end and the company shall be wound up pursuant to s 233(1)(a) of the Corporations Act 2001 and Paul Pattison shall be appointed liquidator for the purposes of the winding up. In that event, however, Lorraine Yard will be entitled to prove in the winding up of the company for the sum of $123,171.00 as a debt due and payable to her on her loan account with the company.

5. The Court declares that the Partnership of GM, AJ, TJ and JL Yard was in existence until 1 November 2000.

6. As of 1 November 2000 the Partnership of GM, AJ, TJ, and JL Yard shall be dissolved pursuant to s39(f) of the Partnership Act 1958.

108 His Honour's orders in that proceeding should otherwise be confirmed and the appeal in Proceeding 4542 of 2001 should be dismissed.

109 I agree with Nettle JA, for the reasons which his Honour gives, that these appeals should be disposed of in the manner proposed.

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[1] Proceeding 4542 of 2001.

[2] Proceeding 5151 of 2001.

[3] Action No 3875 of 1999.

[4] Action No 1044 of 2000.

[5] Subject to an error of $100.

[6] Stamps Act 1958 s 71(7).

[7] Brogden v Metropolitan Railway Co (1877) 2 App Cas 666; Rust v Abbey Life Assurance Co Ltd [1979] 2 Lloyd's Rep 334; Emprinall Holding Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 531; Vroon BV v Fosters' Brewing Group [1994] VicRp 53; [1994] 2 VR 32 at 81; Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 at [77]; Brooker v Friend & Brooker [2006] NSWCA 385 at [138].

[8] [1999] UKPC 20; [1999] 1 WLR 1399 at 1412.

[9] [1984] HCA 81; (1984) 155 CLR 242.

[10] cf. Orr v Ford [1989] HCA 4; (1989) 167 CLR 316 at 340-341, per Deane J in diss.

[11] [1984] HCA 81; (1984) 155 CLR 242 at 260-261 .

[12] Re Cochrane [1955] Ch 309 at 316; Re Flower's Settlement [1957] 1 WLR 401 at 408; [1957] 1 All ER 462.

[13] Cunnack v Edwards [1896] 2 Ch 679 at 685; Braithwaite v Att.-Gen. [1909] 1 Ch 510 at 520; Re West Sussex Constabulary's Widows, Children and Benevolent (1930) Fund Trusts [1971] Ch 1 at 10.

[14] Napier v Public Trustee (WA) (1980) 55 ALJR 1; 32 ALR 153 at 158.

[15] [1985] HCA 78; (1985) 160 CLR 583 at 620.

[16] Ibid at 615.

[17] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 at 614, per Deane J; Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 at 105.

[18] (1869) 4 Ch App 603.

[19] Robinson v Ashton (1875) LR 20 Eq. 25 at 28; Rowella Pty Ltd v Abfam Nominees Pty Ltd [1989] HCA 65; (1989) 168 CLR 301 at 309-310; Bant v Bant [2003] WASC 137 at [10]- [11].

[20] [1962] HCA 67; (1961) 111 CLR 140 at 163.

[21] Re Wondoflex Tiles Pty Ltd [1951] VicLawRp 65; [1951] VLR 458; Re Tivoli Freeholds Ltd [1972] VicRp 51; [1972] VR 445 at 480; Callaway, Winding up on the just and equitable ground, at 101;

[22] Ford's Principles of Corporations Law at [11.490].

[23] E S Gordon Pty Ltd v Idameneo (No 123) Pty Ltd (1994) 15 ACSR 536 at 539; Ford's Corporations Law, ibid.

[24] Dynasty Pty Ltd v Coombs [1995] FCA 1447; (1995) 13 ACLC 1290.

[25] Scottish Co-Operative Wholesale Society Ltd v Meyer [1959] AC 324.

[26] cf Sanford v Sanford Courier Service Pty Ltd (1986) 5 ACLC 394.

[28] Land value prepared by Mr Wakeham.

[29] [2000] SASC 267; (2000) 77 SASR 381 at 388[59].

[30] Section 39 provides that a partnership for an indefinite time may be dissolved by any partner giving notice to the other partners and, in that event, the date of dissolution is the date given in the notice or, if none be given, the date of communication of the notice.

[31] Phillips v Melville [1921] NZLR 571 at 574; cf. Cutts v Holland [1965] Tas SR 69 at 71; Ryder v Frohlich [2004] NSWCA 472 at [148]- [152].