Clifford v Clifford
[2025] TASSC 29
•29 May 2025
[2025] TASSC 29
| COURT: | SUPREME COURT OF TASMANIA |
| CITATION: | Clifford v Clifford [2025] TASSC 29 |
| PARTIES: | CLIFFORD, Carolyn Iris |
| v | |
| CLIFFORD, Robert Raymond | |
| FILE NO: | 975/2019 |
| DELIVERED ON: | 29 May 2025 |
| DELIVERED AT: | Hobart |
| HEARING DATE: | 24 June 2024 |
| JUDGMENT OF: | Brett J |
| CATCHWORDS: |
Partnership - Facts and agreements evidencing partnership – Partnership in fact – Consideration of intention or relationship – Partnership found to be in existence notwithstanding lack of express agreement.
Aust Dig Partnership [1001]
Partnership – Partnership property – Nature of interest of partner – Partner's estate found to have an equal interest in ultimate residue upon winding up.
Aust Dig Partnership [1039]
Personal Property – Ownership and possession – Co-ownership – Joint ownership – Severance – Joint tenancy severed by testamentary agreement to leave each parties share to his respective spouse.
Aust Dig Personal Property [1011]
Legislation:
Lands Titles Act 1980
Living Marine Resources Management Act 1995
Partnership Act 1891
Fisheries Rock Lobster Rules 2022
Supreme Court Rules 2000
Cases cited:
Abela v Public Trustee (1983) 8 Fam LR 951
Burgess v Ransley (1976) 1 Ch 429
Jafari v 23 Developments Pty Ltd [2019] VSCA 201
Lindsay v Lindsay [2014] FamCA 401
Mischel Holdings Pty Ltd v Mischel [2013] VSCA 375
O'Brien v Komesaroff [1982] HCA 33, 150 CLR 310
Rae and Partners Pty v Shaw [2020] TASFC 14
Saitannis v Katsolis [2022] NSWSC 1468
Saleeba v Wilke [2007] QSC 298
Tasmanian Seafoods Pty Ltd v MacQueen [2005] TASSC 36
Wild v Meduri & Ors [2023] NSWSC 113
Wright v Gibbons (1949) 78 CLR 313
REPRESENTATION:
Counsel:
Plaintiff: J Sawyer Defendant: P Zeeman
Solicitors:
Plaintiff: Chris Boland Lawyers Defendant: Tierney Law
| Judgment Number: | [2025] TASSC 29 |
| Number of paragraphs: | 86 |
Serial No 29/2025 File No 975/2019
CAROLYN IRIS CLIFFORD v ROBERT RAYMOND CLIFFORD
| REASONS FOR JUDGMENT | BRETT J 29 May 2025 |
1 This case concerns the ownership of licences and associated entitlements related to the commercial fishing of rock lobster in Tasmania. To borrow from the submissions of plaintiff's counsel, I will refer to the licences and entitlements collectively as the fishing licences. Although I will describe their nature in more detail shortly, it is common ground in this case that the fishing licences, including the associated entitlements, constitute property capable of beneficial ownership, including co- ownership.
2 In 1991, the defendant, his wife Lesley and their son Michael, decided to commence a fishing business. They purchased a rock lobster fishing vessel and associated licences and entitlements, and commenced operating the vessel from Eaglehawk Neck. The defendant and Michael had previously purchased a block of land with a house on it in Eaglehawk Neck. When they started the fishing business, they moved into the house and set up a workshop on this land from which they offered a variety of repair and other services to the local community. They both had wide ranging trade qualifications and skills relevant to such services. This business was conducted in conjunction with the fishing business. They continued to fish for rock lobster until 2007, although the original vessel was sold and replaced by another in 2002 and the licences were transferred to it. In 2007, that vessel ran aground, and the men stopped actively fishing. Instead, they leased the fishing licences to another fisherman for an annual fee. They continued with the repair and trade work.
3 Lesley died in 1995. On 1 May 2017, Michael, who had suffered illness for some time, also passed away. The plaintiff is Michael's widow. Their relationship commenced in 1996 and they were married on 16 September 2001. At the time of Michael's death, they were living together in a second house which had been built on the Eaglehawk Neck property.
4 Since Michael's death, the lease of the fishing licences has continued, and the defendant has been receiving the income. However, the plaintiff claims that she is entitled to a one-half share of the licences and the income. Her claim is asserted on the following bases:
•
The plaintiff claims that the defendant and Michael operated the fishing business in partnership. This business included the leasing of the licences after they had stopped actively fishing. The plaintiff alleges that the partnership was dissolved upon Michael's death, and that it must therefore be wound up. The plaintiff also alleges that the licences are partnership property, and will constitute the bulk of the residue available upon a winding up. In that event, Michael's interest will be one- half of the expected surplus, and this entitlement will form part of his estate. Michael's will, which has been admitted to probate, does not specifically deal with this asset so it would fall into residue, which the will leaves to the plaintiff.
•
If the licences are not partnership property, then the plaintiff claims that they were owned by the defendant and Michael as tenants in common in equal shares. Again, under this scenario, Michael's share would pass to the plaintiff as part of the residue of the estate. However, the defendant says that the fishing licences were at the time of Michael's death, and had always been, held by Michael and he as joint tenants, and accordingly Michael's share passed to him upon death in accordance with the law of survivorship. The plaintiff asserts that even if the licences were originally held as joint tenants, the joint tenancy was severed by an agreement between the defendant and Michael, entered into at or about the time that Michael and the defendant both made wills in 2007. The agreement was that upon the death of either, the share of the deceased in the licences would be
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passed to his wife. The plaintiff alleges that the resulting severance of the joint tenancy results in
the licences being held by the two men as tenants in common at the time of Michael's death.
• Finally, the plaintiff asserts that the defendant is estopped from denying that the licences were held by Michael and he as tenants in common in equal shares at the time of Michael's death. The plaintiff alleges that the estoppel arises from representations made by the defendant after Michael's death that she would receive a one-half share in the licences and/or by the adoption by the defendant and her of a common convention to that effect. 5 The defendant disputes each aspect of the claim made by the plaintiff. His position is that the two men owned the licences as joint tenants and the licences therefore passed to him upon Michael's death. He disputes the assertion that there was a partnership between them at any relevant time or that he has made the representations or assumed the convention asserted by the plaintiff. To the extent that he may have indicated acceptance during discussions or negotiations after Michael's death that the licences were held as tenants in common and that the plaintiff would receive a one-half share, the defendant disputes that this provides a basis for estoppel because it was not intended to be relied upon by the plaintiff, nor did the plaintiff in fact rely upon it to her detriment.
The form of the proceedings
6 Before proceeding further, I should deal with a procedural point made by counsel for the defendant. This point was, as far as I am aware, raised for the first time in final submissions. It was not referred to throughout the trial and does not appear in the defendant's pleadings or the certificate of readiness.
7 The submission of counsel for the defendant is that because one of the primary issues in the case is whether the relevant entitlement falls into the residue of Michael's estate, the claim is one which relates to the administration of an estate and accordingly ought to have been commenced by the plaintiff in her capacity as executor by way of originating application. Counsel submits that although the Court can change the form of the proceeding, it should not do so because the plaintiff demonstrated in her evidence that she does not comprehend the nature of the proceedings, has not read the will and does not have a proper understanding of her role as executor. Counsel did not make his point clear, but I assume that he is contending that the proceedings are incompetent because of the plaintiff's limited understanding. He did not advance any authority for that proposition.
8 I reject these submissions. There is no question that the proceedings are partly concerned with the plaintiff's attempt to gather into the estate Michael's share of the fishing licences as its sole remaining asset, the balance of the modest estate having already been administered. However, the plaintiff is claiming declaratory relief on a wider basis than this, which includes not only the potential entitlement of the estate, but also her personal proprietary interest in the relevant property. As counsel for the plaintiff correctly submits, r 92 of the Supreme Court Rules 2000 permits a person wishing in a single proceeding to seek from the court relief of more than one kind, in respect of more than one matter, may claim all that relief in the one form of proceeding, including an action commenced by writ. In my view, given the nature of the issues in this case, it is entirely appropriate that these claims be dealt with collectively in one proceeding, and that that proceeding be an action commenced by writ. One advantage of this is the availability of pleadings, which in my view had the desirable consequence in this case of narrowing diverse issues.
9 Further and in any event, there is no injustice, nor is any asserted, in enabling the proceedings to be resolved on the basis of the real issues in the case as they emerged at trial. In fact, it is clear from the brief opening statement made by counsel for the defendant that the defendant was well aware that the case would resolve on the basis of these issues, in particular whether the licence was held in a joint tenancy or as tenants in common and secondly, whether there has been any agreement between the parties concerning the disposition of the licences. Although not mentioned by counsel at that time, the
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question of a testamentary agreement that may have operated to sever any joint tenancy was also clearly pleaded in the statement of claim and responded to by counsel for the defendant throughout the trial, including in his final submissions.
The fishing licences
10 Commercial fishing in Tasmania, including of rock lobster, is regulated by the Living Marine Resources Management Act 1995 (the LMRMA) and the Fisheries Rock Lobster Rules 2022 (the Rules). The regulatory regime so implemented was, for relevant purposes, of the same or similar effect, notwithstanding being the subject of earlier legislation, at all times material to this case. The effect of this legislative scheme is that it is unlawful to commercially fish for rock lobster without the relevant fishing licence. A licence limits the quantity of the catch that can be taken in a season by reference to quota units specified on the licence. In the case of fishing by way of a fishing boat, a fishing licence (vessel) is required and will specify the number of craypots which the boat can carry. In practice, the quota entitlement attaches to the pot entitlement. The quota referrable to each pot will entitle the holder to catch a certain weight of rock lobster. Both the licence and quota entitlements can, with the consent of the Secretary of the relevant department, be transferred, together or individually, by the licence holder to another eligible person, see s 82 of the LMRMA. The legislation does not regulate or prohibit applications for transfer being made on the basis of monetary consideration. The transfer can therefore be used to give effect to either a sale or lease agreement.
11 The obvious purpose of the scheme is to limit the catch from the fishery. Accordingly, there are limits on the available licences and quota entitlements. For example, by s 98C of the LMRMA, the Minister may only allocate "up to a total of 10,507 rock lobster quota units". Rule 57 of the Rules limits the number of fishing licences (rock lobster) in force at any one time to 312. All of these are currently allocated and have been for some time. Therefore, the only way to acquire the legal entitlement to carry on commercial fishing is to purchase or lease a licence with associated entitlements already in existence. For this reason, the units are marketable and their sale or lease can achieve significant consideration. The value of that consideration, in a case such as this, will largely depend on the aggregate of the quota and pot entitlements associated with the licence.
12 It is not in dispute that these entitlements constitute property, and can be the subject of beneficial ownership extending beyond the licence holder, arising from legal arrangements entered into by that person. See Tasmanian Seafoods Pty Ltd v MacQueen [2005] TASSC 36 per Underwood CJ with whom Evans and Tennent JJ agreed. The legislation does not regulate nor prescribe such relationships, except that a licence holder may not allow another person to use the licence, including by leasing, without the Secretary's approval, see s 87 of the LMRMA. Finally, although the relevant department will record the name of the licence holder and the entitlements and conditions applicable to the licence, such a record does not create a system of indefeasibility of title similar to that applicable under the Torrens system implemented in respect of land by the Land Titles Act 1980. This has some relevance in this case because when the dispute between the plaintiff and the defendant as to how the licence was held first arose, the relevant department initially expressed a view that the licences had been held by the defendant and Michael as joint tenants. However, the department subsequently resiled from that position and acknowledged that it had no role to play nor expressed any opinion concerning the nature of the co-ownership interests in this case. Because of its original opinion, the relevant Minister was joined in the proceedings as a defendant but upon that acknowledgement, the proceedings against the Minister were discontinued. There is no dispute about any of this by either party.
13 For the sake of clarification, however, it is relevant to note that an extract from the interest register maintained by the department notes the relevant licence to be currently owned by the defendant and the estate of Michael George Clifford. It notes the licence which is critical to these proceedings as Fishing Licence (Rock Lobster) Entitlement No 74, and further that there are 22 permanent rock lobster units/pots specified on the licence. It is these units/pots which have been referred to throughout the
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proceedings and will be referred to by me in this decision as "pots" or "quota units", which form the property which is in dispute. In effect, the plaintiff's claim is that it had always been agreed and understood by her, and should be given effect by my judgment, that on the basis described above, she is entitled to receive 11 quota units (pots).
Factual history
14 Much of the factual history of this matter can be derived from facts agreed by the parties and documents placed in evidence by consent. However, both the plaintiff and the defendant, along with some other witnesses, also gave oral evidence. It is clear that the parties' versions differ on some aspects of the historical background. Where necessary to resolve such a dispute, I will deal with it discretely. However, I would make general comment concerning my assessment of the credibility and reliability of each party as a witness. Most of the relevant events occurred many years ago and concern events which at the time had no significance in the context of a legal dispute. The tenuous reliability of memory of such events was understandably apparent in respect of both parties. However, my overall impression was that, in general, the plaintiff was a more reliable witness than the defendant. The plaintiff's evidence lacked sophistication, but was offered in a manner that clearly manifested her attempt at honest recollection, without reconstruction or apparent exaggeration. She was quite prepared to make appropriate concessions, a feature of oral evidence that is often, if not invariably, associated with honesty. The defendant, on the other hand, had a clear tendency to reconstruct his recollection of past events, conversations or his past state of mind, to reflect his current understanding of issues and legal concepts, and in an obvious, but often flawed attempt to argue and support his case. His confused evidence about the co-ownership of the licences is a good example, and I will deal with this in more detail shortly. In some respects, he attempted, in my view, to fill gaps in his memory in a way which was invariably favourable to his perception of his case. However, at times, his evidence about certain critical issues, conversations with the plaintiff for example, although emphatic, was, in my view, the product of fabrication based on his perception of what assisted his case. I intend to approach his evidence concerning historical events and conversations with considerable caution.
15 The fishing licences were purchased in March 1991, along with the fishing vessel Wendy Anne. The licences included cray pot entitlement number 74 "for 22 pots". The purchase price of the vessel and the licences was $120,000. According to the unchallenged evidence of the defendant, the purchase price was paid from the sale proceeds of the family home, which was owned by Lesley and him. At that time, Michael was 29 years of age. The defendant said that he decided to sell the house, which he and his wife had owned for 20 years, and buy the boat and licences because Michael's employment at a glass company was about to come to an end. When they purchased the boat and licences, the purchase money came "out of the house, but we put Mick's name on it". Their joint intention was to conduct a fishing business and to also set up a workshop "doing mechanical work and fitting and turning". It is clear that both the defendant and Michael had qualifications and skills which enabled them to perform such work. The defendant's evidence is that he had worked as a diesel fitter, and there was other evidence that Michael had skills in that area and also as a refrigeration mechanic. Further, the fishing business was not initially restricted to rock lobster. According to the defendant, they obtained an "A grade net licence" which enabled them to catch other types of fish including tuna and scale fish.
16 The plaintiff also gave some detailed and largely unchallenged evidence about the nature of the business activity at the time of and after the commencement of her relationship with Michael. The effect of that evidence seemed to me to be consistent with the defendant's evidence. It was that the two men had a reputation for being able to fix all types of machinery, including cars and boats, and the skills necessary to conduct that work. The workshop was fitted out with relevant equipment and they would attend to whatever job was asked of them. Michael, in particular, also performed refrigeration work. There was evidence that for much of the relevant period a friend of the defendant, John Green, provided them with assistance. Mr Green gave evidence at the trial. His work included assisting with fishing as a deck hand as well as performing miscellaneous tasks in other aspects of the business. It seems that he
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was not paid a wage. He was in receipt of a disability pension. The defendant and Michael provided him with free accommodation and food. He also said that the defendant would "slip me a bit of cash".
17 The property where they lived and worked after starting the business, and where they set up the workshop, was located at 18 Ferntree Road, Eaglehawk Neck. This property had been purchased in November 1985 in the names of the defendant and Michael. The certificate of title shows that they held the property as tenants in common in equal shares. The only evidence relevant to the purchase of this property came from the defendant. He said that the proceeds had come from the sale of a "shack" at Tarana which had been built by him. According to the defendant, he cleared the Eaglehawk Neck property and built a house on it soon after its purchase. The plaintiff's evidence was that when she and Michael commenced their relationship, she moved in with Michael in this house. Michael and the defendant were living there at the time.
18 Lesley passed away on 14 November 1995. In 1998, the defendant commenced a relationship with and subsequently married Colleen Shields. At the commencement of that relationship, a decision was made to build a second house on the Eaglehawk Neck property to provide separate accommodation for each of the two couples. It is common ground that the house was physically built by the defendant and Michael, with assistance from John Green.
19 It is clear that the defendant and Michael each participated in a substantial way in the conduct of the actual fishing. The defendant said that he was the "skipper of the boat" but Michael soon "went and got his tickets". After that, they would take it in turns. The impression I gained was that they contributed equally to this work. It was also clear from the evidence of both the plaintiff and the defendant that Michael was, at least after Lesley died, primarily responsible for the bookwork associated with the business. This had been Lesley's task while she was alive. The defendant conceded that this was not his forte. His evidence was that he trusted Michael completely.
20 In terms of financial arrangements, I am satisfied that from the time of purchase of the fishing licences, the proceeds from fishing and the other work performed by the men in the workshop was pooled and shared between them. Both men had given up their previous employment to pursue this business. The plaintiff's evidence was that from the time she started her relationship with Michael in 1996, until around 2007, receipts were paid into a joint cheque account in the name of the defendant and Michael, and the proceeds of the account were available to both. However, there was no precision about how money was taken, each in effect took what he needed. There does not seem to have been any accounts kept relating to the financial affairs of the business. According to the plaintiff, cash was not paid into the account but distributed in specie between the men. I infer that this arrangement had been in place since the commencement of the business.
21 It is an agreed fact that the defendant commenced receipt of the age pension in 2004. In any event, around this time, it was decided that the income from the fishing licences would be taken by a partnership between Michael and the plaintiff. According to the plaintiff, they gave effect to this by changing the name of the joint account by deleting the defendant's name and replacing it with her name. It seems that the purpose of this was to reduce the income that the defendant would need to declare to Centrelink, hence entitling him to receive the maximum amount possible of the age pension. The plaintiff claims that this arrangement was instigated by the defendant but the defendant said it was Michael's idea. In my view, it is not necessary to resolve this conflict, and I decline to do so.
22 In 2007, there was a significant change in circumstances. In 2002, the defendant and Michael had sold the Wendy Anne and purchased a replacement vessel, the FV Florence Nightingale. The fishing licences were transferred to the new vessel, and the business proceeded as it had done to that point. In 2007, the Florence Nightingale broke its mooring and ran aground resulting in an insurance claim. The defendant and Michael decided to stop fishing and leased the fishing licences and entitlements to Christopher Hanson. That arrangement has continued since that time.
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23 Notwithstanding the agreement to pay income into a joint account in the name of the plaintiff and Michael, the respective tax returns of the defendant and Michael for the 2017 financial year suggest that they were still sharing the lease income from the licences, at least, until Michael's death in May of that year. Both returns report an equivalent amount with the business activity described in each as "Craypot lease". I was not provided with much evidence about this, but I infer that the fishing income was regarded as jointly received by the defendant and Michael until Michael's death. The plaintiff and the defendant differed in their evidence as to the defendant's access to funds in the joint account of Michael and the plaintiff. According to the plaintiff, the defendant had full access to that money and all of his bills were paid from the account. In other words, they continued to operate as they always had done, any money from work performed by them went into that account and all of their expenses were paid from it. The defendant conceded that some of his bills were paid from this account for example, health insurance and car registration, as well as maintenance on the property, which of course was jointly owned with Michael, but claimed receipt of less than that asserted by the plaintiff. To the extent that it matters, I am satisfied that the plaintiff's evidence is more accurate on this point. In particular, I am satisfied that although there was change in the sense that the defendant was in receipt of the age pension, in all other respects it was business as usual. In other words, I am satisfied that the defendant regarded their joint enterprise as something that they continued to share and that included the income received by each or both of them, including from the lease of the licences. I am satisfied that this situation remained in place until Michael's death on 1 May 2017.
24 Before leaving the period before Michael's death, I should make comment about one aspect of the evidence concerning that time. There was considerable evidence led from the parties and from Mr Green concerning the plaintiff's personal contribution to the enterprise, including fishing. I am not sure why it was asserted to be relevant to the issues to be determined by me, except perhaps with respect to credibility. If this was the purpose of leading it, then it does not affect my view about the plaintiff's credibility. There is no question that both the defendant and Mr Green claimed that the plaintiff's personal involvement in fishing was significantly less than that claimed by her, but all of the evidence about this question was extremely general and I have no doubt that such contribution varied from time to time depending on other aspects of the lives of the relevant persons over this period. Further, and in any event, irrespective of the extent to which the plaintiff participated directly in the commercial fishing activity, there is no doubt that she contributed in a significant way to other aspects of the enterprise and to the family generally. I am satisfied that Michael and she had a close and loving relationship until his death. There is no dispute that the plaintiff cared for Michael after he became ill, and cared for their household. She also clearly performed other work from time to time during the marriage. No criticism is made of her in that regard. There is no need for me to resolve the dispute on the evidence concerning her personal contribution to the fishing work to any greater extent than this.
Lesley's death
25 As already noted, the defendant's first wife and Michael's mother, Lesley, died on 14 November 1995. Lesley had made a will on 15 October 1992 appointing the Public Trustee as executor and leaving the whole of her estate to the defendant. In an inventory lodged for the purpose of probate, the sole asset of the estate is shown as "Interest in partnership RM and L Clifford". Of course, whilst the said reference is a relevant circumstance in considering the question of whether a partnership was formed upon the purchase of the fishing licence, it does not constitute an admission on the part of the defendant in that regard.
26 When the fishing licence was originally purchased, it was registered by the department in the three names without words of severance or any other description of co-ownership. Rather than simply removing Lesley's name from the record upon her death, as would be the case if the law of survivorship applied, the Public Trustee arranged for the defendant and Michael to complete an application to transfer the interest from Lesley's estate to them. Again, it was simply transferred into their joint names without any words of severance.
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Michael's will
27 Michael's will was executed on 11 October 2007. It was prepared by a solicitor, Mr Chris Boland, who according to the defendant, at that time was considered to be the family's solicitor. Of course, Mr Boland acts as the plaintiff's solicitor in these proceedings.
28 The terms of the will were that Michael appointed the plaintiff to be his executor. Mr Boland's firm was appointed as the alternative executor and trustee. There are some relatively modest bequests to two nephews and a niece and the gift of Michael's tools, machinery, plant and equipment and his interest in the Eaglehawk Neck property to the defendant. The will leaves the residue of the estate to the plaintiff. It also directs that the trustee request Michael's superannuation fund to transfer the benefit of his superannuation to the plaintiff.
29 On the previous day, 10 October 2007, the defendant and Colleen Clifford executed their wills. These wills were also prepared by Mr Boland. Each provided for some gifts to relatives and left the residuary of the estate to the other. In the defendant's case, there is an identical mirror provision to that contained in Michael's will leaving his tools, machinery, plant and equipment and his interest in the Eaglehawk Neck property to Michael.
30 Probate was granted in respect of Michael's will on 11 April 2018. The inventory of assets and liabilities shows a half interest in the fishing licence as an asset of the estate. This, of course, is consistent with the plaintiff's claim that the fishing licence was held by the defendant and Michael as tenants in common, but because the defendant had nothing to do with the preparation of this document, it again does not constitute evidence against him in that regard.
31 However, the plaintiff submits that the coincident execution of the wills in 2007, and their reciprocal nature, supports her argument that there was an agreement between Michael and the defendant that each would leave their interest in the fishing licences to their respective wives. Although the fishing licences are not mentioned expressly in any of the wills, it is claimed that this is the effect of the clauses dealing with the residue in each case. The plaintiff's evidence is that Michael's illness had commenced about two years after the commencement of their relationship, that is in about 1998. She said they did not talk much about what would happen if he were to die because they were trying to be positive. However, Michael had told her that there was an arrangement between he and the defendant that in the event of the death of one of the men, the deceased's wife would get "half the pots, half the licence and she stays in the house". She said that the first time that she was told about this arrangement was "probably when Mick and Bob went and done their wills".
32 The defendant agreed that there had been discussions between him and Michael to the effect that in the event of the death of one of them, the other would "look after" the deceased man's wife. He denied that the discussion went any further than this, and in particular denied that any reference was made to a transfer of specific property, including a share in the fishing licences. When asked in evidence-in-chief what he meant by "looked after" he said:
"More when you looked after each other, well, you know, she could live in the house and I'd cut wood for her and give her some money - whatever else that was the agreement. There was no agreement, that's what we just thought".
33 In cross-examination, he said that his expectation was that the surviving male would retain all of the fishing licences so that they could use that income to, among other things, look after the deceased man's wife. He denied that the intention was that the widow would get half of the income, and that anything had been mentioned about the fishing licences. He said "we'd look after them for a certain amount of money that they needed … It was just, we'd look after them, we'd look after the properties, and they lived in there and we would give them some money or wage or whatever we needed". He also
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pointed out that the plaintiff was on a pension, which was in answer to a question which suggested that
the plaintiff would need to live off the fishing licence income.
Events after Michael's death
34 The plaintiff's evidence was that she had never seen or read Michael's will, she had only been told about it by Michael. Her belief, based on these conversations, was that she would receive "half the pots", the defendant would "get the house" but she would be entitled to live there for the rest of her life.
35 The plaintiff said further that shortly after Michael's death, the defendant came to her residence and told her that "Robbie and Matthew are getting the house, the property". Robbie and Matthew are Michael's nephews. He asked her if she had that "straight". She was upset by this conversation because her understanding of the arrangement, as explained to her by Michael prior to his death was that she would continue to reside in the house. She called her sister, Karen Watts, who resides in Melbourne, and Ms Watts came to Tasmania the following day. The plaintiff gave evidence of a conversation between her sister and the defendant in the plaintiff's presence during which her sister asked for the defendant's written assurance that the plaintiff would receive "11 pots". Her evidence was that she heard the defendant respond "You can take my word for it, I am not writing anything out for her". The plaintiff was angry that the defendant would not confirm this promise in writing. The plaintiff recalled that this conversation took place when she "was in the car".
36 The plaintiff's version of this conversation was corroborated by the evidence of Ms Watts. Ms Watts' evidence was that she had remained in contact with Michael and the plaintiff throughout Michael's illness. From time to time, there would be light hearted conversation between them concerning her sister's future. Michael had confirmed, during these conversations, that the plaintiff would be looked after, would be able to live in the house for the rest of her life and would get her share of the pots, which she understood to be "half of the pots". Michael told her that he and his father had made an agreement that both their wives would be looked after, and in particular, the wife of the deceased person would be able to reside in the property "for the rest of her life and she would get 11 pots and vice versa". Ms Watts also gave evidence of a conversation that occurred between her and the defendant after Michael's death. She thought it was a conversation conducted during the Christmas break, probably in January, but was not sure as to the year. She initially said it was 2018, the first Christmas after Michael's death, but then indicated in cross-examination she was not sure about the timing. However, her description of the conversation substantially matched the evidence of the plaintiff. She said that she and the plaintiff had travelled in a car to the city for some errands. On the way back, when they reached the property, they passed the defendant who was in the driveway. The plaintiff was "a bit upset and agitated". They stopped so that the plaintiff could talk to the defendant. The plaintiff said to him "I know you want me out of the house. I don't want you here – I know you don't want me here. I'll leave if you don't want me here". Ms Watts was in the passenger seat but she got out to talk to the defendant. He said to her "I don't know what's wrong with her. I don't want her to leave." He also said when told that the plaintiff believed that Michael's nephew would be moving into the house "that there was only the two of them, they had to stick together. She was getting her eleven pots, he had done what Michael wanted". He also said "Maybe Carolyn once she gets her money can set herself up down in Melbourne with her family. She will have enough to buy a house and everything in Melbourne and set up with her family down there if she doesn't want to stay here". Ms Watts said that she asked the defendant if he could put the plaintiff’s entitlement to live in the house and to one half of the pots in writing and he replied "No, if my word is not good enough, then bad luck, I'm not putting it in writing". She said that by the end of the conversation, it was clear to her that the pots were going to be signed over to the plaintiff.
37 In his evidence, the defendant agreed that he knew Ms Watts but had only seen her once or twice in his life. He agreed that after Michael's death, she had come to Tasmania for a couple of days and stayed with the plaintiff. He denied any recollection of having a conversation with Ms Watts or the
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plaintiff in the driveway, claiming "How could I remember that at that time? I'd just lost my son". He denied saying that the plaintiff would be able to live in the house for the rest of her life and that she would be getting half the pots. However, when it was suggested to him that he may have said those things, he said "I may have said it" and "I don't remember. There's a damn lot of things I don't remember. I've been through hell and back."
38 I accept the substance of the evidence of the plaintiff and Ms Watts in relation to this conversation. It was clear to me that they were doing their best to recount a conversation that had actually taken place. It bore no sign of having been concocted and indeed with some of the detail, timing for example, their evidence was not consistent. I think it is more likely that the conversation was later than immediately after Michael's death as the plaintiff thought, and probably occurred during the Christmas holiday period immediately after Michael's death, that is in 2018. The defendant's denials of this conversation, to the extent that it was denied rather than simply not remembered, were unimpressive. He may well not have recalled the conversation but, in my opinion, his denial of it arises from the lack of recollection, not because it did not happen. I am satisfied that the conversation took place, and its substance is as recalled by the plaintiff and Ms Watts. In particular, I am satisfied that he confirmed that the plaintiff would be receiving a half share in the pots, as Michael had wanted.
39 The fact of that conversation is also consistent with the plaintiff's evidence that for a considerable period after Michael's death, the defendant continually pressed her to confirm that she would not "contest the will". She was uncertain as to why he was insisting on that, given that she thought there had been agreement between the defendant and Michael about the house and the pots. However, it is consistent, in my view, with the driveway conversation when she had clearly communicated her concern to the defendant about whether she was to be ejected from the house in favour of her nephews. It would be an understandable response by the defendant to the expression of this concern by the plaintiff, to be concerned about whether she was going to "contest the will". Eventually, "to stop him asking me", she obtained a statutory declaration form and filled it out saying that she would not contest the will. When asked in cross-examination if she knew whether she was able to contest the will, she said "Yes, anybody can contest a will can't they?"
40 The plaintiff is clearly telling the truth about this. The statutory declaration is in evidence. The document is handwritten and appears to be executed by the plaintiff in the presence of a justice of the peace. It is dated 24 July 2017. Consistent with the plaintiff's description of going to get it and filling it out, it bears the letterhead of Service Tasmania. It states "I have no intention at all to contest Mick Clifford's last will and testament". It is a matter of record that the plaintiff applied for probate of the will, which was granted on 11 April 2018.
41 As far as the fishing licence income is concerned, the plaintiff said that this income was still going into the joint account in her and Michael's name. However, the defendant wanted all the paperwork for the fishing business. He was not a signatory on the account so she gave him signed blank cheques. She said she complied with the defendant's requirement because he owned half of the business.
42 The plaintiff's evidence was that thereafter the defendant managed the fishing business. It can be inferred that this would have involved attending to the formalities of renewal of the licences, paying accounts and ensuring that the lease income was received from Mr Hanson. The plaintiff said that at the time that she gave the cheques to the defendant, there would have been $50,000 to $60,000 in the joint account, but after that no further money from the fishing income went into that account. Her belief was that the defendant opened a different bank account to receive that money. The only money she had taken from the account was the sum of $2,500 which she used to pay for dental work.
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Negotiations
43 On 27 March 2018, the plaintiff's solicitor, Mr Boland, who appears to have been acting for her in her capacity as executor of Michael's estate, wrote to the defendant's solicitor enclosing a draft deed and suggesting that the parties consider the sale of the fishing licence and craypot entitlements. The email also forwarded a copy of the application for the grant of probate and the affidavit in support which listed a half interest in the fishing licence as an asset of the estate.
44 The defendant's solicitor, Jencie Harrington, responded with an email of 4 April 2018 which
included the following:
"My client is in agreement with your client holding 11 cray licences.
I ask that you confirm with Fisheries:
• How they consider the licences are held; and •
What steps need to be taken for our clients to hold their respective licences as individuals
My client does not consider he is in partnership with your client.
Will advise Southern United Seafood of yours and my clients details, so as when required income from now on until such time that the ownership of the licences is finalised, can be equally shared."
45 Thereafter there was an exchange of correspondence as follows:
• Email 9 May 2018 from Mr Boland to Ms Harrington. In this email, Mr Boland responded to an apparent suggestion that the fishing licences were held as joint tenants. The email claimed that this was "with respect a nonsense". It also asserted that the fishing licences had been held as partnership property. • In a responding email dated 7 June 2018, Ms Harrington said: "I advise I have reconsidered my position on the deceased and my client operating a partnership. I advise that there was no formal Partnership Agreement and the provisions of the Partnership Act apply.
I ask that you confirm on the transfer of the Licences and units to your client and mine that the holding will be considered as tenants in common and not jointly".
• In a further email from Ms Harrington to Mr Boland dated 5 July 2018, Ms Harrington advised that she had spoken to her client and was instructed to advise as follows:
o That her client would stand by "his agreement of entering into a residential tenancy agreement with your client for a period of three months on the prior agreed terms", which included that it would be rent free. o That the defendant would continue to manage the licences, and accordingly required the
payment of a management fee. The income would continue to be equally shared.o The final paragraph said this: "However, in saying this, my client is in agreement for the sake of administration of his son's estate to do all things necessary with regards to transfer of the licences as per the terms of the Will. It is then his intention to obtain advice of how best to effect the
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holding of that proportion of the licences as agreed with his son prior to his death".
(My emphasis.)
• In an email from Ms Harrington to Mr Boland dated 2 November 2018, the following statements were made: "I am instructed to advise my client … does not consider the licences are equally held. Prior to my client's first wife's death the licences were held by my client, his wife and Michael as Tenant in Common. On Lesley's death, her interest in the licences transferred to my client. As a consequence, I am instructed that the licences are held two thirds to my client/one third to Michael's estate. While there may have been verbal agreements, of equal ownership, my client considers any prior agreement obsolete."
In that email, Ms Harrington also pressed Mr Boland to provide "signed documentation to enable the transfer to property as provided by Michael's will". She complained that this had been promised but not yet done.
The December meeting
46 The next step in what had now become a negotiation, was a conference which was held at Ms Harrington's office in Hobart on 7 December 2018. This meeting, and events surrounding it, was the subject of evidence by the plaintiff and the defendant, as well as subsequent correspondence between the solicitors. The meeting is an important part of the narrative so I will briefly summarise the relevant evidence.
47 The plaintiff's evidence was that she drove to Hobart for the meeting with the defendant. During the trip there, she asked the defendant why they were going to the meeting. He replied by saying "To sign the pots over to you, your half of the pots". However, at the meeting, the defendant was banging his fist stating that he wanted the house. She said that the meeting was mostly about the house and that the defendant "did not have a problem with … giving me half the crays". At his insistence, she signed a tenancy agreement whereby she agreed to lease the house for a weekly rent of $200, for an initial term of 6 months, but with option periods thereafter. In evidence, she indicated that she was bemused by this because "I thought I lived here". Further, although there was no specific evidence about this, I infer from her evidence that she also signed the documents necessary to effect transfer of the estate's share of the Eaglehawk Neck property to the defendant. In cross-examination, she said that she would not have "signed over the house" and would have sought legal advice about her entitlements if she had realised that she would not be "getting anything". The effect of her evidence was at the time that she signed these documents, she believed on the basis of statements made by the defendant that she would be "getting 11 pots".
48 The plaintiff said that on the journey home after the meeting, the defendant said to her that "He's done what Mick wanted. I got half the craypots". He invited her to have a drink with him at the Dunalley Hotel, to which she agreed. There was no further discussion there about the arrangement because of the presence of another person. However, as he dropped her at her residence, he said in her presence "Well, Mick, I've done what you wanted, given Carolyn half the craypots". She said he started getting teary and she consoled him.
49 This evidence of the plaintiff was the subject of questioning during cross-examination but was not directly challenged nor undermined.
50 In evidence-in-chief, the defendant was asked about what happened at the meeting. He disputed that there had been any agreement reached and in particular that he had agreed to transfer 11 pots to the plaintiff. He said that he was not happy with that suggestion because if he had less than 15 pots he would lose the licence. It was subsequently clarified by him that less than 15 pots would mean he would not lawfully be entitled to fish the licence but he would still be entitled to lease the individual pots to
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another fisherman, as was currently the case. This understanding would seem to be correct, see r 62 of
the Rules.51 In cross-examination, the defendant responded to the plaintiff's evidence concerning the conversations surrounding the meeting. He agreed that he had travelled with the plaintiff to the solicitor's office for the purpose of the meeting but denied that he had said that his intention was to sign over the pots to her. In fact, he denied that he had ever agreed to this arrangement. He did agree that at the meeting, it had been determined that the parties would seek advice from an accountant concerning capital gains tax that may be payable in respect of the transfer of pots but said that this was in case it was necessary to sell the licence to a third party. It is agreed between the parties that they subsequently pursued such advice. He said that his lawyer kept telling him that he had to transfer the pots to the plaintiff but he did not agree with this. However, under further questioning from me, he did say that because he was told he legally had no choice, he may have agreed to that transfer. In further cross- examination, he agreed that at the meeting the plaintiff had signed the documents necessary to transfer the Eaglehawk Neck property to him and that he had agreed to a rental tenancy in favour of the plaintiff. He could not recall whether they stopped at the hotel for a drink on the way home and denied saying that he was giving effect to an agreement with Michael.
52 The following subsequent correspondence is contained in documents placed in evidence at the
trial:
• On 10 December 2018, Ms Harrington wrote to Scott Burridge, an accountant who had been employed to give advice on the capital gains tax question, confirming the request for that advice. • On 25 January 2019, Ms Harrington forwarded a further email to Mr Burridge noting receipt of the tax advice. The email contained the following: "Following my conversation with you yesterday and my meeting with Bob I am in the position to confirm Bob instructions are that the licences are held in equal shares as tenants in common.
As you are aware the boat and licences were purchased by Bob, Lesley and
Michael. Bob personally funded the purchase.While Bob does have some concerns, so as to move this matter forward, given the time line to capture the small business concessions of 1 May 2019 he is willing to accept the licences are held equally as tenants in common."
• On 25 January 2019, Ms Harrington forwarded an email to Mr Boland which included the following: "I am instructed to advise my client accepts that the licences are held in equal
shares as tenants in common."
• Mr Boland responded with an email on 29 January 2019 advising that he would prepare the documentation necessary to effect "the transfer of 11 cray entitlements to each of our respective clients". 53 In February 2019, Mr Boland entered into correspondence with the department concerning the transfer of the 11 cray entitlements. At some point, the department decided to seek advice as to how the entitlements were held and subsequently advised that it had determined that the entitlements were held in a joint tenancy. As I previously noted, the department has now resiled from this position. However, subsequent to this advice, the position communicated by the defendant's lawyer to the plaintiff's lawyer concerning the nature of the co-ownership changed. The defendant said in evidence that he also determined that Ms Harrington had given him incorrect advice and sought advice from another lawyer within the same firm. On 18 March 2009, that lawyer forwarded a letter to Mr Boland
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which, although noted as being "without prejudice", was admitted in evidence without objection. The letter asserted that the defendant's position was that it was "not conceded that the fishing licence was held as tenants in common" when Michael died. It sought to resile from previous communications made to that effect by Ms Harrington. In essence, the letter asserted the position which was put forward at trial that is, that the licences were held by Michael and the defendant as joint tenants and passed to the defendant alone on Michael's death pursuant to the right of survivorship.
54 The defendant in evidence attempted to maintain that it had always been his view that the fishing licences were first acquired and then held, including after his wife's death, in a joint tenancy. However, to say the least, his evidence about this question was confused and disingenuous, and demonstrated that he had very little notion of the legal concepts involved in respect of the different forms of co-ownership. His evidence on this point demonstrated his tendency to reconstruct his evidence based on what he has learned and been told since the dispute arose. An example was his evidence that despite the co-ownership being a joint tenancy, his opinion has always been that upon his wife's death, he acquired her share of the fishing licences, leaving him with two thirds and Michael with one third. It was obvious that he did not understand that this could only have occurred if the licences were originally acquired and held as tenants in common. I have no doubt that his fundamental understanding accorded with this because, at one point in the correspondence recorded above, his solicitor makes this very point, which the letter asserts are on instructions from the defendant. I note also that when it was raised with him that the Eaglehawk Neck property was held with Michael as tenants in common, he asserted surprise, and said that he had believed that they held the property as joint tenants. Finally, the correspondence of his solicitor makes clear that until the department expressed a different view, the defendant accepted that the licences were held as tenants in common. My overall impression is that the defendant had no clear view about the nature of his co-ownership with Michael prior to his death, except that he intended to benefit him with an equal share of the licences, so that they could operate their fishing business together as a going concern. To the extent that he purports to have a more developed or sophisticated view of the co-ownership arrangement, I reject that evidence as unreliable at best, and deliberate reconstruction to favour his case at worst. In any event, I place no weight on such evidence.
55 Further, it is a matter of record that the defendant’s solicitor made it clear in a number of items of correspondence quoted above, that his position was that he agreed that the licences were held as tenants in common in equal shares. Whether or not this was on advice, the fact of the matter is that this was his position as communicated in open correspondence to the plaintiff through her solicitor. Although his position on this in his evidence varied from a denial that he had ever had this view or provided those instructions, to a grudging acceptance that he had provided the instructions because that is what he had been advised to do, the fact remains that I am satisfied that when the solicitor said that she had been instructed by him to communicate in those terms, that is exactly what had happened.
56 It follows that I am also satisfied that the plaintiff has given an accurate version of the conversation with the defendant before and after the December meeting. I accept her evidence in preference to that of the defendant in relation to this question. Her version is entirely consistent with the instructions communicated in the correspondence and, in particular, the correspondence after the meeting. I have no doubt that the defendant agreed at the meeting, or shortly after it, that he would transfer one- half of the licences to the plaintiff, and this was communicated to the plaintiff by him and later through his solicitor with his knowledge and on his instructions.
The testamentary agreement
57 I infer from the whole of the evidence and am satisfied on the balance of probabilities that the defendant did enter into a verbal agreement with Michael that upon the death of either of them, one-half of the quota units attached to the fishing licences would be transferred to the surviving widow. I am
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satisfied that this agreement was reached before or around the time that the men made their wills in
October 2007. I arrive at this finding for the following reasons:
•
As already noted, the defendant concedes that there was an agreement with Michael that their spouses would be looked after in the event of the death of one of them, although he disputes that there was any specific agreement about the fishing licences. His acceptance of this general agreement is consistent with the act of making reciprocal wills in 2007 providing for the mutual transfer of their interest in the Eaglehawk Neck property but leaving the residue of each estate to the respective wife. The only significant asset not dealt with expressly in each will was the fishing licences. It is more probable than not that each man was satisfied that the residue of the estate would pick up their respective interest in these licences.
•
The defendant's statements to Ms Watts shortly after Michael's death and to the plaintiff after the December meeting, clearly indicate not only his agreement that the plaintiff would receive one-half of the quota units, but are also consistent with that position having been expressly agreed with Michael. His emotional comments after the December 2018 meeting where he purported to directly address Michael's memory on this question provides powerful support for this conclusion.
•
So also does the comment made by Ms Harrington in her email dated 5 July 2018, when she referred to the transfer of the licence "as agreed with his son prior to his death". This could only be a reference to an inter vivos agreement with Michael for the licences to be dealt with in the manner contended by the plaintiff. It is particularly relevant that this comment was made in July 2018, well before the defendant's position changed in respect of co-ownership and without any prompting from the course of the negotiations to that point. It is an unguarded comment volunteered by the defendant's solicitor that could only have originated from the defendant's instructions. It is inconceivable that the solicitor would simply have made this up without receiving instructions to that effect from the defendant. There is no other source for this information other than the defendant.
•
The existence of such an agreement is consistent with conversations between Michael and the plaintiff prior to Michael's death. I accept her evidence about such conversations.
•
The defendant's dispute of the existence of such an agreement, as I have already noted, was confused and has the flavour of reconstruction. I do not accept his denial of this agreement.
Partnership
58 It is trite law that the existence of a partnership does not necessarily depend upon proof of an express agreement in that regard. In this case, there is no evidence of an express partnership agreement. Its existence, if it did exist, can only be established by implication from the conduct of the parties within the context of the surrounding circumstances. In Lindsay v Lindsay [2014] FamCA 401, Tree J succinctly summarised the principles in that regard, although by reference to Queensland legislation which is replicated in Tasmania in the Partnership Act 1891:
"By s 5 of the Partnership Act 1891(Qld), a partnership is the relation which subsists between persons carrying on a business in common with a view to profit. However at its heart, a partnership relationship is founded in contract. The existence of the contract and its terms may be established not only by what the parties said to each other in the course of forming or altering the relationship, but also their conduct towards one another.
In deciding whether or not a partnership exists, s 6 of the Partnership Act sets out rules to which regard must be had including the rule articulated by s 6(1)(c), namely that the receipt by a person of a share of the profits of a business is prima facie evidence that the person is a partner in the business.
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Whether or not persons are carrying on a business in common is a matter of fact. It does not require each partner to be actively engaged in the day-to-day operations of the business, nor does it preclude one or more partners from adopting greater managerial responsibilities than others.
It has been said that "the test of whether a business is being carried on in common can be reduced to the proposition: is the person who carries on that business doing so as agent for all the persons who are alleged to be partners?"
59 I respectfully agree with and adopt his Honour's summary. However, I would make the additional point that co-ownership of property in whatever form, while relevant to the overall question, will not of itself create a partnership in respect of such property: see s 7(a) of the Partnership Act.
60 In Jafari v 23 Developments Pty Ltd [2019] VSCA 201, the Court of Appeal of Victoria emphasised the need to ascertain the "true contract and intention of the parties as appearing from all of the facts and circumstances relevant to the relationship of the parties". The court noted that the determination will not depend upon primacy being given to a single factor or label. The converse must also be true, the absence of express reference to the relationship as a partnership will not necessarily preclude a finding that a partnership was in existence.
61 In this case, I am in no doubt that a partnership was formed initially between Lesley, Michael and the defendant and upon its dissolution consequent upon Lesley's death, between Michael and the defendant. The factors that support this conclusion are as follows. It is clear from the defendant's own evidence that in 1991 when the fishing boat and licences were purchased, a very definite decision was made by the three participants to commence and carry on a business in common with a view to profit. Both the defendant and Michael abandoned their existing employment so that they could devote themselves on a full-time basis to the joint enterprise. While the enterprise was primarily about the use of the fishing boat and licences to derive an income from fishing for rock lobster, it was not exclusively so. The fishing itself, initially at least, related to catching various types of fish. In addition, both men contributed their skills to other forms of enterprise such as the workshop and refrigeration. There was not any particular delineation concerning who would perform what tasks, they each did whatever was necessary in pursuit of the joint enterprise. Michael obtained his skipper's licence and both men contributed equally to the fishing activity but they would also do whatever else was required to turn a profit. Revenue received from this diverse activity was paid into a common joint account or if in cash, shared between the partners. There was no suggestion that either of them were renumerated by wage and there was not any particular distinction in attributing the income to any particular person.
62 As Tree J noted in Lindsay, a critical test of the existence of a partnership is whether a purported partner conducts business as agent for the other alleged partners. There is ample evidence that this was a strong and consistent feature of the relationship in this case. The defendant made it very clear that he and Michael trusted each other completely and their conduct was consistent with this. They took turns in acting as skipper on the fishing vessel. Importantly, the defendant left all of the book work and financial affairs to Michael. Michael was nominated as the responsible person for the purposes of the fishing licences. Clearly, each of them accepted that the other could act as agent for both in the pursuit of their joint enterprise.
63 Further, while it is not conclusive, it is a strong factor in support of the existence of the partnership that profits were always shared between the purported partners, and that the fishing licences were regarded as jointly owned from the outset. This is so irrespective of the nature of their co- ownership, an issue to which I will turn shortly. In relation to sharing profits, this can be inferred from the common evidence of the plaintiff and defendant as to the practice prior to Michael's death, and the treatment of fishing income in the tax returns.
64 There are, of course, some factors which might normally support the existence of a partnership, which are absent in this case. For example, there was no reference to a partnership in an ABN
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registration, on the joint bank account or in taxation records. There is no evidence that the concept of partnership was expressly agreed or even discussed by the relevant participants. However, I place little weight on these matters. The critical finding is that the relationship between the relevant persons answered the definition in s 6 of the Partnership Act, of one of carrying on business in common with a view to profit. The absence of precise verbal and legal terminology and express agreement is understandable and to be expected given the interests and personality of the participants, which clearly emphasised doing rather than talking.
65 Before leaving this issue, I should turn briefly to the submission of the defendant's counsel that I should "be loath to infer a partnership from what might be described as normal family arrangements as they are not usually intended to be legally binding". Counsel relied on the single judge decision of Hallen J in Wild v Meduri & Ors [2023] NSWSC 113 to support that proposition. As counsel for the plaintiff points out, the case does not, in fact, provide such support. The reference in that decision to the appropriate treatment of family arrangements is a reference by Robb J in Saitannis v Katsolis [2022] NSWSC 1468 as follows:
"When members of families make arrangements, such as the arrangement the subject of these proceedings, they do not generally intend that they will be legally binding. It is not the force of law, but family loyalty and affection that is intended to bind the parties to the arrangement. They do not always think or talk in precise terms and there is often an inherent indefiniteness in the arrangement and a readiness to allow it to evolve. However, it is often a consequence of the way that the arrangements are implemented that fairness and good conscience require equity to intervene to provide a disappointed party to the arrangement with relief. Proceedings to enforce such arrangements will often involve an exceptional level of forensic risk because of the essential indefiniteness of the arrangement. That is often why the parties to such arrangements will be best served by responding to disagreements by making reasonable compromises.
The parties to family arrangements do not, of course, think in terms of categories of equitable principle, such as common intention, joint endeavour, encouragement or standing by. In the present case, the plaintiffs have sought to portray the arrangement as being one involving a representation concerning the ownership of a property that has given rise to an equitable proprietary estoppel by reason of the plaintiffs having relied upon the representation in ways that will lead to their substantial detriment if Irene is permitted to resile from the promise implicit in her representation...."
66 I accept the submission made by counsel for the plaintiff that his Honour in those comments is doing nothing more than stating the obvious, that is, that families when making arrangements do not always give consideration to the legal implications of those arrangements, and often do not express those arrangements in legal terminology and form. The case before me is in point. However, the arrangements will often have legal consequences and this needs to be borne in mind when dispute arises. The comments are not authority for a proposition that arrangements within a family cannot create binding legal vehicles which in the absence of express agreement are to be inferred from conduct. In fact, this passage supports my reluctance to place any great weight, one way or the other, on the absence of express reference to a partnership in this case. However, it is overwhelmingly clear that the defendant, Lesley and Michael, and then the defendant and Michael by their conduct demonstrated their intention to go into business in common with a view to profit. There is absolutely no reason why members of a family cannot create a partnership. In my view, that is precisely what they did in this case.
67 Finally, I do not regard the fact that after the defendant started to receive the age pension, some of the fishing money, including lease payments, was paid into an account entitled as a partnership between the plaintiff and Michael as significant to the ongoing existence of the partnership between Michael and the defendant. I am satisfied that the latter remained in existence until Michael's death, and was not affected by arrangements put in place for other reasons. As I have already noted, the defendant's
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tax returns during this period make clear that he continued to declare a share of the income received from leasing the licences. This, in my view, reflected the actual situation, Michael and the defendant regarded their joint business activities, including the lease of the licences, as a continuing concern until Michael's death.
The interest of Michael's estate in the fishing licences
68 My finding that a partnership existed does not by itself resolve the appropriate disposition of the interests of the parties in the fishing licences. It is common ground that the partnership between the defendant and Michael was, if it existed, and I have found that it did, effectively dissolved upon Michael's death: s 38 of the Partnership Act. Each partner is entitled upon dissolution to payment of his appropriate share of the surplus assets of the partnership after payment of debts and liabilities, and "any partner or his representatives may on the termination of the partnership apply to the Court to wind up the business and affairs of the firm": s 44 of the Partnership Act. Section 47(1) provides:
"Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with its capital or assets without any final settlement of accounts as between the firm and the outgoing partner or his estate, then, in the absence of any agreement to the contrary, the outgoing partner or his estate is entitled at the option of himself or his representatives to such share of the profits made since the dissolution as the Court may find to be attributable to the use of his share of the partnership assets, or to interest at the rate of six per cent per annum on the amount of his share of the partnership assets."
69 It is clear from these provisions, and I do not understand it to be the subject of dispute, that the said rights and entitlements accrue to, and can be enforced by, the deceased partner's estate. In fact, s 48 provides that:
"Subject to any agreement between the partners, the amount due from surviving … partners to … the representatives of a deceased partner in respect of the … deceased partner's share is a debt accruing at the date of the … death."
70 Section 49 contemplates and provides rules for "settling accounts between the partners after a dissolution of partnership". It is clear that an order for such an account will be necessary in this case. However, there are two questions which will be fundamental to the determination of any account, particularly concerning the question of surplus assets. Firstly, were the fishing licences and entitlements part of the assets of the partnership and secondly, what was Michael's entitlement to that property. In this regard, historical partnership accounts will be of no assistance, there were none. However, there is no reason why I cannot make determinations concerning these fundamental questions for the purpose of taking an account as part of these proceedings.
71 The first question is the nature and extent of the proprietary interest acquired by Michael at the time of purchase of the licences. It is common ground that from the outset, the licences were held firstly by the defendant, Lesley and Michael, and subsequently transferred upon Lesley's death to the defendant and Michael, as joint owners with nothing to indicate other than that each had an equal share. Although department records do not attract indefeasibility, there has been no argument to the contrary about this in this case. I do note, however, that the defendant made it clear in his evidence on a number of occasions that the fishing licences were purchased by him with money derived from the sale of the property at Bellerive. I infer from his evidence that that property was held, and hence this monetary contribution, was by him jointly with Lesley.
72 Although the parties did not really address this question in pleadings or argument, it could be argued that an unequal contribution of the purchase price would give rise in equity to a resulting trust in favour of the contributors of the purchase money reflecting that inequality. If this were the case, it could affect the calculation of the entitlement set out in s 49(b)(iii) of each partner to be paid "ratably
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what is due from the firm to him in respect of capital". However, an unequal equitable interest was not asserted by the defendant's pleadings, and in any event, it would seem fairly obvious that any claim to such trust would be defeated by the presumption of advancement. Further, and in any event, the evidence seems to me to be overwhelming that the original intention of the defendant and, I am sure, Lesley, was that the fishing licences and fishing vessel were to form the property of the partnership constituted by the three members of the family, and that it was intended by Lesley and the defendant that Michael would have a full and equal beneficial share of this property. The defendant has not directly disputed this, except to make the claim in evidence that upon Lesley's death, her share passed to him leaving them co-owners in the proportion of 2/3 to him and 1/3 to Michael. As already noted, this claim was also made in correspondence from his solicitor on one occasion. Such a belief can only be consistent with the proposition that at the time of the initial purchase, Michael acquired a full 1/3 share of the property constituted by the licences. Further, my finding as to the existence of an express inter vivos agreement between the men entered into around the time of making their wills in 2007 concerning their respective shares of the licences, assumes the existence on the part of each of an equal entitlement at that time. Finally, the defendant's case, despite his claim that he acquired Lesley's share upon her death, which of course can only be consistent with a tenancy in common, has always been that the parties, including Michael, held and acquired the licences as joint tenants. As I will explain shortly, a joint tenancy cannot arise unless there is unity of interest, which means that each party has an identical and therefore equal interest in the property. See Wright v Gibbons (1949) 78 CLR 313. It follows that the defendant's case, in fact, is that Michael held an equal interest in the licences from the time of acquisition until his death. He has not made any alternative claim in the event of a finding by me that the licences were not held in a joint tenancy. Accordingly, I am satisfied that upon purchase, Michael acquired a full and equal share in the ownership of the licences.
73 The next question which arises is whether the licences so acquired became partnership property. This is important because if the licences are partnership property, then it makes otiose any argument about the nature of the co-ownership of them, either upon Lesley's death or in respect of an account taken in these proceedings. The consequence of becoming partnership property is that there will have been an equal contribution of that property by each partner and consequently an entitlement to an equal share of the ultimate surplus of the partnership. If the property was not partnership property, then clearly the issue of co-ownership will require determination.
74 Section 25(1) of the Partnership Act provides as follows:
"All property and rights and interests in property originally brought into the partnership stock or acquired, whether by purchase or otherwise, on account of the firm, or for the purposes and in the course of the partnership business, are called in this Act partnership property, and must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agreement."
75 In O'Brien v Komesaroff [1982] HCA 33, 150 CLR 310, Mason J noted that the equivalent of s 25 is not determinative of the question of whether property brought into a partnership by one or more partners becomes partnership property. His Honour held that the critical question is the agreement of the parties, and "the acts and intention of the parties, not the operation of s 24, determine finally and ultimately the question whether property owned by a partner becomes partnership property."
76 That case involved property which had been owned by a partner prior to the formation of the partnership. In this case, the situation seems to me to be crystal clear. The three partners, as I have found, jointly and equally acquired the property for the specific purpose of commencing a business which was to be the mainstay of the partnership. The temporal coincidence and the integral nature of the fishing licences to the partnership enterprise makes it abundantly clear, in my view, that an agreement should be inferred that their acquisition of the fishing licences was as partnership property. I so find.
19 No 29/2025
Co-ownership
77 These findings, in my view, resolve the substantive issues in this case. Of course, there is still the question of consequential relief, including an order for the taking of an account of capital and income. However, although it is not necessary to make a finding concerning the question of co- ownership, given the emphasis placed on it by the parties during the hearing, I think it is appropriate to say something about this question.
78 If the fishing licences had not been acquired as partnership property, then in my view, the proprietary interest in the licences would have been held by the defendant, Lesley and Michael as joint tenants. This is because given the absence of any words of severance on the face of the licences or in the purchase agreement, or any evidence of an express agreement to the contrary, a presumption would have arisen in favour of a joint tenancy. Further, the requisite "four unities", possession, interest, title and time were present. In arriving at this conclusion, I acknowledge and have taken into account that the defendant and Michael had already acquired the Eaglehawk Neck property as tenants in common. I also take into account my criticism of the defendant's evidence that he always believed the licences were acquired as joint tenants. As it turns out, this is correct but as I have noted, I do not place any particular weight on his view. I simply do not think that this was a matter to which the parties would have turned their minds at the time, because they were acquiring the licences so that they could start the business in partnership. Further, because of my findings about this, he is clearly incorrect in his view that upon Lesley's death, he would have acquired a 2/3 share of the licences.
79 It follows that upon Lesley's death, if the licences had not already become partnership property, the defendant and Michael remained as owners of the licences as joint tenants. The critical question which then arises is whether the joint tenancy then in place would have been severed prior to Michael's death, with the result that their ownership of the licences was held as tenants in common in equal shares at the time of his death.
Severance
80 It is well established that a joint tenancy will be severed if the parties form a common intention that their ownership of the property should no longer operate as a joint tenancy. The requisite common intention can be established by an agreement to that effect. See Burgess v Ransley (1976) 1 Ch 429; Abela v Public Trustee (1983) 8 Fam LR 951 per Rath J. It can also arise from a course of conduct "inconsistent with a joint tenancy from which one would objectively infer an intention to hold property as tenants in common". Saleeba v Wilke [2007] QSC 298 per Chesterman J. See also Mischel Holdings Pty Ltd v Mischel [2013] VSCA 375.
81 In this case, I am satisfied that the testamentary agreement between the defendant and Michael effected a severance of the joint tenancy. An integral and defining feature of a joint tenancy is the right of survivorship. The effect of the agreement was for each to abandon his right in this regard. The clear intention was to identify their separate shares in a manner inconsistent with joint tenancy so as to ensure that each share would be capable of passing with the estate of each owner. This is a clear manifestation of their common intention to sever and abandon the joint tenancy, and this common intention was carried into effect by their execution of the wills.
82 It follows that in the event that the property was not held as partnership property, the defendant and Michael held the licences as tenants in common in equal shares at the time of Michael’s death. Michael's half share of the licences would have passed to the plaintiff as part of the residue of his estate.
20 No 29/2025
Estoppel
83 Having regard to my findings so far, it is also unnecessary to address the claim in estoppel. However, again, having regard to the attention given to this issue by the parties, it is appropriate to make some findings.
84 I am satisfied that the evidence establishes that the defendant represented to the plaintiff that he would transfer to her a one-half share of the quota units under the licenses. I am also satisfied that the parties adopted a common assumption that the licences were held by the defendant and Michael as tenants in common in equal shares. The representations arise in particular from the statements made by the defendant before and after the December meeting and in the conversation with Ms Watts. The evidence of the common assumption arises from the various statements made in correspondence by the defendant's solicitor, prior to his change of attitude to this question which arose after receipt of the advice from the department. Insofar as the assumption or convention involves or includes questions of law, because those questions relate to the legal effect of the parties' relationship as co-owners, the doctrine which permits an estoppel by convention to arise from the shared assumption can apply. See Rae and Partners Pty v Shaw [2020] TASFC 14 per Porter AJ.
85 I accept that the defendant should only be held to the representation and shared assumption by the doctrine of estoppel if his rejection of same would be unconscionable. In this case, this would be established by reliance by the plaintiff, with the knowledge of the defendant, on the representation or the convention to her detriment. I am satisfied that such reliance is established on the evidence. In particular, I accept the plaintiff's evidence that her execution of the transfer documents of the Eaglehawk Neck property in favour of the defendant, and the residential tenancy agreement at the December meeting was because she believed that he intended to honour his agreement with Michael to transfer one half of the quota units to her. This belief came about because of what he had said to her in the car on the way to the meeting, his conduct at the meeting and the acceptance of the tenancy in common in the correspondence from his solicitor which led up to the meeting. The plaintiff's evidence is that she would have contested the will but for that belief. I took this evidence to mean that she also would not have signed the transfer documents at the meeting. Her decision to sign and hand over the transfer documents in particular placed her in a position of detriment. There can be no doubt that given all of the circumstances, and in particular the defendant's insistence that she sign these documents, that he was aware that she was acting in reliance on his promise and agreement to treat the proprietary interest in the licences as tenants in common, and to transfer a one-half share to her. In those circumstances, I am satisfied that it would be unconscionable for the defendant to now deny that she is entitled to a one- half share of the licences. Were it otherwise necessary, I would have upheld the claim in estoppel.
Conclusion
86 The next step in this matter is the disposition of the case, and in particular the formulation of appropriate relief. The statement of claim seeks relevant declarations and consequential relief including an order for the taking of an account. In my view, orders to this effect are appropriate. In particular, there should be declarations giving effect to the existence of the partnership, its dissolution upon Michael's death, the fact that the proprietary interests of the parties in the fishing licenses constitutes partnership property, and that Michael's estate will be entitled to a full one-half share of the ultimate residue of the partnership, including income received since Michael's death, upon the taking of an account. There should also be an order for such an account. The parties have indicated, however, that upon determination of the substantive issues, they wish the opportunity to make further submissions and perhaps present evidence which would be relevant to the account. In view of this, I think I should decline to formulate appropriate declarations and orders, until the parties have had the opportunity to consider these reasons and make further submissions. Accordingly, I will hear from counsel with respect to appropriate relief and disposition in due course.
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