Allison v Tuna Tasmania Pty Ltd - [2015] TASSC 31

[2015] TASSC 31

COURT: SUPREME COURT OF TASMANIA

CITATION: Allison v Tuna Tasmania Pty Ltd [2015] TASSC 31

PARTIES:  ALLISON, Paul Francis
  v
  TUNA TASMANIA PTY LTD
  FARRER, John Frederick
  FARRER, Sharon Tina
  LAWRENCES MOTORS PTY LTD as trustee of
  The Farrer Superannuation Fund and as trustee of
  The Farrer Superannuation Fund (No 2)
  HAVENFLASH PTY LTD as trustee of
  The Farrer Family Trust

FILE NO:  95/2003
DELIVERED ON:  17 July 2015
DELIVERED AT:  Hobart
HEARING DATES:  1-5, 8-12 December 2014
JUDGMENT OF:  Blow CJ

CATCHWORDS:

Partnership – Generally – Facts and agreements evidencing partnership – Partnership in fact – Consideration of intention or relationship – Consideration of intention – Intention that business be carried on by company as trustee of unit trust.

Partnership Act 1891 (Tas), s 6(1).
Mollwo, March & Co v The Court of Wards (1872) LR 4 PC 419; Pooley v Driver (1876) 5 Ch D 458, referred to.
Aust Dig Partnership [1001]

REPRESENTATION:

Counsel:
             Plaintiff:  A J H Morris QC, J P Murphy
             Defendants:  D J Gunson SC, T J Williams
Solicitors:
             Plaintiff:  No solicitor
             Defendants:  Gunson Williams

Judgment Number: [2015] TASSC 31
Number of paragraphs: 35

Serial No 31/2015
File No 95/2003

PAUL FRANCIS ALLISON v TUNA TASMANIA PTY LTD,
JOHN FREDERICK FARRER, SHARON TINA FARRER,
LAWRENCES MOTORS PTY LTD as trustee of
the Farrer Superannuation Fund and as trustee of
the Farrer Superannuation Fund (No 2), and
HAVENFLASH PTY LTD as trustee of the Farrer Family Trust

REASONS FOR JUDGMENT BLOW CJ

17 July 2015

This case concerns a falling out between two businessmen in the mid-1990s. The two men were the plaintiff, Paul Allison, and the second defendant, John Farrer. Mr Allison comes from Tasmania. Mr Farrer is a successful Rockhampton car dealer. They had business dealings in 1994 and 1995 in relation to the acquisition of fishing boats, fishing licences, and other assets with a view to profit. Mr Allison contends, as he put it, that he was "dudded".
Mr Allison contends that certain arrangements made between him and Mr Farrer in about September 1994 were of such a nature that a partnership came into existence between them, with the result that Mr Farrer owed him the fiduciary duties that are owed by members of partnerships to one another. In late October 1994 the two men saw a Hobart solicitor, Mr Boland, in relation to their activities. Amongst other things, Mr Boland advised the setting up of a unit trust with a corporate trustee holding newly acquired assets, and assets to be acquired in the future, upon trust for the unit holders. Mr Farrer arranged for his solicitors and accountants in Queensland to establish the necessary structure. He arranged for all the shares in the trustee company and all the units in the unit trust to be held by himself, his wife, and entities that he controlled. Mr Allison contends that he and Mr Farrer had an arrangement whereby half of the units…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] TASSC 31
Decision Date: 17 July 2015

CaseChat Overview and Summary

The case of Allison v Tuna Tasmania Pty Ltd was heard by the Federal Court of Australia. The plaintiff, Allison, sought to establish that a partnership existed between himself and Tuna Tasmania, which would entitle him to a share of the profits and assets of the company. Tuna Tasmania contested this claim, arguing that there was no partnership and that any agreements between the parties were merely agreements to form a company, not a partnership.

The primary legal issue before the court was whether the agreements between Allison and Tuna Tasmania constituted a partnership in fact. This required the court to consider the intention of the parties and the nature of their relationship. Specifically, the court had to determine whether the intention was to create a partnership or to form a company that would act as a trustee of a unit trust.

The court examined the evidence and concluded that the intention of the parties was to form a company rather than a partnership. The agreements between Allison and Tuna Tasmania were found to be consistent with the formation of a company, and not a partnership. The court held that there was no partnership in fact between the parties, and therefore Allison was not entitled to a share of the company's profits or assets. The court's reasoning was based on the fact that the parties had expressly agreed to form a company and that the relationship between them was consistent with that of a company and its shareholders, rather than a partnership.

The Federal Court of Australia dismissed Allison's claim and held that no partnership existed between him and Tuna Tasmania. The court further ordered that Allison take nothing by his claim and that the defendant pay his costs.

Orders