Kelly v Kelly

[1990] HCATrans 9

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No Al2 of 1989

B e t w e e n -

MARGARET WENZ KELLY

Appellant

and

PETER TERRENCE KELLY

Respondent

MASON CJ
DEANE J

DAWSON J

TOOHEY J

GAUDRON J

Kelly(2)

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 14 FEBRUARY 1990, AT 10.17 AM

Copyright in the High Court of Australia

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MR H.C. WILLI.AMS, QC:  May it please the Court, I appear with

MR$ C.M. BRANSON, for the appellant.(instructed

by Brown Aston & Hamilton)

MR R.D. LAWSON, QC: May it please the Court, I appear with

my learned friend, MR H.J.F. TRELOAR, for the

respondent. (instructed by Corrs)

MASON CJ:	Mr Williams.
MR WILLI.AMS:	If the Court pleases, there are three

documents that I would ask the Court to have before

it.	The first will be the sunnnary of argument which
we would hand up.	The second document will be a

chronology of the principal events that are involved
in this matter and the third document is a copy of

the relevant fisheries regulations, which we may

need to refer to. The Court will see that the

summary of argument occupies two pages and it has

annexed to it two schedules. I have given my friend

in advance the schedules. The first schedule sets

out a list of assets which the two parties to this
action are interested in and the second schedule
shows licence fees which have been paid over the
period. I should mention that in respect of the

licence fees, the very last fee shown as item 14,

$4427 - perhaps the Court might like to put an

asterisk against that -simply to indicate that that

fee has been paid by the respondent, no doubt claiming

that the licence in question is his own licence, but

it has been included there as a matter of convenience.

(Continued on page 3)

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MASON CJ:  Yes.

MR WILLIAMS: This appeal arises from facts which are not in

dispute so far as my client is concerned. We accept

the facts as found in the Full Supreme Court and as

found by the trial judge. However, we submit that

the Full Supreme Court has made an error of law as

to the principle to be applied to the facts of this

case. We say that given certain facts in the

circumstances of this case there is really only one

answer which the facts admit of.

We say that the fundamental facts are that the

case concerns a right claimed by the appellant for

the partnership of which he was a member with the

respondent, to have the benefit of an abalone

authority which is endorsed on a fishing licence

in the name of Mr Kelly. The authority in question is issued annually and throughout the period of the partnership the fee for the authority was always paid

by the partnership in terms of the schedule which is
produced and I will come back to that.

It is common ground that the parties did not turn their minds to the question of the ownership of

this abalone authority and we say that it was

obtained in the course of, and for the purposes of,

the partnership business and, of course, paid for

by the partnership. Against that background, we say

that the conclusion to be drawn in the absence of any

contrary intention is that the acquisition was on
account of the firm and that Mr Kelly is a trustee

of the property for the firm.

Not only do we say that there was no contrary

intention to the conclusion which I have submitted

should be drawn, but we say that the surrounding

circumstances when looked at in fact reinforce the

conclusion which I ask the Court to draw. We say

that the Full Supreme Court has gone wrong in this

way; that it has taken two cases which really

enunciate the same principle and which deal with the

situation as to the circumstances and the principles	to be applied as to whether or not property which has
been the property of one partner does or does not
become partnership property.

(Continued on page 4)

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MR WILLIAMS (continuing):  So we say that the court has taken

those cases and has applied the principles of tho·se

cases, one being HARVEY V HARVEY in this Court, to

the circumstances of this case. But, our submission

is that is not this case. This is a case where

an abalone authority was paid for as an annual licence

in effect, and paid for by the partnership, and

irmnediately upon it being paid for it became

partnership property, albeit being issued in the

name of the respondent.

DEANE J:	But does the respondent get a credit in the
capital of the partnership for the value of the
licence - for the value of his right to renew?
MR WILLIAMS:	We would say that he is not entitled to any

• rights.

DEANE J:	Why not?
MR WILLIAMS:	The situation is that there is - a new system

was introduced as at 1980 in South Australia.

DEANE J:	If you are coming to it in due course, do not let
me divert you.
MR WILLIAMS:	Well, I would prefer to deal with these matters

as they arise, if Your Honour pleases. A new system

was introduced; a system of abalone authorities; a

completely new system, a new system of regulations.

The regulations required the authority to be

endorsed on a fishing licence, in the name of a

person, and the regulations also provided for a boat

to be included as the authorized boat. Now, all that

happened is that the application went in in the name

of Mr Kelly; he simply paid for it using partnership

money and that there is, therefore, nothing in respect

of which he ought to be given a credit.

(Continued on page 5)

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DEANE J: But that is like saying, if it was a taxi cab licence

worth a great deal of money which was renewed with

partnership funds that the person who held the

licence lost the licence and also got no credit

in his capital account with the partnership which

sounds quite extraordinary to me.

MR WILLIAMS:  But this was simply a licence that was applied

for on behalf of the partnership ab initio.

DEANE J:	I am talking about the abalone - - -
MR WILLIAMS:	Yes, I am too, Your Honour. This licence was

applied for ab initio on behalf of the partnership,

we say, so that there is no question - - -

DEANE J:	I did not appreciate that.
MR WILLIAMS:	No, I am sorry, that is why I wanted to deal

with it immediately.

DEANE J:  The partnership existed before there was any abalone

permit,licence or anything else?

MR WILLIAMS: Authority, well, I will come to this in a moment.

The partnership - if we can just look at the chronology - it was on 1 July 1973 that the partnership commenced

to operate, partnership agreement being signed a few

days after that. Now, at that stage Mr Kelly had an

abalone permit in his own name. The parties did not bring

that permit into the partnership and there was evidence

given as to why, they did not think that it was a thing

capable of having any value. They went along and the permit

was renewed on a year-by-year basis up until 1980 and on

28 August 1980 the regulations were changed as of that

date; the permit system was abolished; new set of
regulations introduced altogether giving an authority, with

certain limited rights of transfer attached to it, and the

parties simply did not put their mind to the situation

that then arose;: an application was simply made in the

name of Mr Kelly using partnership funds for that

particular authority.

(Continued on page 6)

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MR WILLIAMS (continuing):  From year to year, that has

continued on, a new application having been made

in each of the years. We can see on the schedule

that I had at the end of the document, item No 9, fo~ the year ended 31 August 1981.- there we have

the new fo~m of licence and authority, $907; then,

10 and 11 were simply new authorities that were

taken out annually.

DEANE J:  But are you stating the full picture? I mean,

was it a new authority system, completely or - - -

MR WILLIAMS:  It was a completely new system and I may have

to turn to -

DEANE J:	So, the authority did not flow from the permit?
MR WILLIAMS:	No, but I can say this: that if Your Honour

were of -

DEANE J: Well, you have answered my question. The authority

did not flow from the permit.

MR WIL~IAMS:  No, it did not but might I just simply· add in

view of the line that Your Honour is putting to me,

if in fact one had flowed on from the other in some

formal sense.so that it might be said that one

new licence depended on the old licence, in those

circumstances, the proposition which Your Honour

no doubt had in mind might flow; that, as at

1980 there would be a requirement to give credit

in the partnership accounts for the value of

that particular item and, indeed, that was

canvassed before Acting Justice Lunn at first

instance and I acknowledged that that would be

the case.

DEANE J:	Thank you, Mr Williams.
MR WILLIAMS:	But, I say that this case should be

characterized simply as a new benefit arising	in 1980; certainly that benefit having arisen
there was a right under the terms of the
regulations to apply for a renewal and in the
ordinary course, I think that a man could have
reasonably expected to get a renewal, right through until the payment, item No 12, for the
year ended 31 August 1984.

(Continued on page 7)

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MR WILLIAMS (continuing):  Now, that was certainly paid for

out of partnership funds but, as at that time, yet

again there is a new system introduced as at

1 July 1984 and that system, unlike the change that

took place in 1980, specifically gave to the licence

holder a right to apply for a new licence under the,

agai~ revised system. So that we say that the

situation was that on 1 July 1984, by coincidence - and it was nothing more than this - the partnership was dissolved on the very day that these new

regulations were introduced.

Mr Kelly was thereby entitled by the new

regulations to take up a new licence. He did that by

virtue of holding the abalone licence or authority

that was issued in August 1984; therefore, the licence

that he now holds under the present regulations was

acquired by virtue of a benefit which had accrued to

the partnership. Now, that, in essence, is my case.

So that we say that in those circumstances this is

not a case where there was ever any property owned

by the partner which he may have then made available

in some way to the partnership.

This is a case of a purchase from year to year,

starting in 1980, of an asset and being applied for

the purposes of and in the course of the partnership

business and we say that in those circumstances,

unless there was evidence to the contrary, the

conclusion to be drawn is that it must be treated as

a partnership asset based on the case of CARTER BROS V RENOUF, which I will come to in a moment. Even if

it could have been suggested that as at 1980 the

partners - irrespective of the situation as it was in

1980, two years later - I think it was in 1982 - on

10 September 1982 my client, Mrs Kelly, was granted a

fishing licence and she then acquired, again with

partnership moneys, a rock lobster boat, the Amanda-K.

Now, of course, the rock lobster, or the cray

boats, require a much more sophisticated vessel than

does an abalone-style of operation which is virtually

nothing much more than a dinghy which is needed for

that.

(Continued on page 8)

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MR WILLIAMS (continuing):  Mrs Kelly obtained her licence

in her own name with a rock lobster authority

endorced on it and using the vessel which was in

her name. It has been held by the Full Court that

that licence authority and vessel of course,are

partnership assets and we have never contended to
the contrary except in a formal sense for

protecting our position. So that we say that it is quite clear that as at 1982, when the parties

purchased this second licence in the name of

Mrs Kelly, their intention was to pool the whole

of their resourses and that appears from the

schedule which is attached to my outline of argument

which shows generally all the property which

Mr and Mrs Kelly owned. Now there may be some

items here which could be explicable on some other
ground, for example, the fir_st item is the Church Street

property. This was the original cottage which formed

the matrimonial home. That, in itself, may not have

a great significance. Then the parties purchased a

lot of real estate which,really,makes up all the
land around the base of the lighthouse at

Cape Northumberland, which overlooks Port MacDonald and that is farming land. It is also land on which

they build for themselves a new home.

We then have the various items which they used for their fishing ventures and in particular we see

that the fishing boat, the Alloy Cat , which was

used in the abalone venture and which was brought into the partnership accounts and was undoubtedly treated as partnership property, was the ~ery boat

which is used as an endorcement on Mr Kelly's fishing

licence. Now in all other respects the parties

either had everything in joint names or else they

put property of equivalent amounts into their own separate names, .for example, we see the very last

item of property~ ~here is an item of $48p00 each

in the name of Mr and Mrs Kelly, an income equalization

deposit.

(Continued on page 9)

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MR WILLIAMS (continuing):  Now, all I need to say is, in

my submission, the overall picture is one of

parties who elected to pool the whole of their

resources. All the income from the fishing venture,

both from abalone and from rock lobster was
pooled. There would be no rationale for keeping the

abalone authority out of the partnership

business. There was an explanation given as to why
the original permit was not brought into the

partnership property when the partnership was

established and that was dealt with by the

Chief Justice in his judgment.

Now, I would like to just turn to the points

in the judgment of Chief Justice King that I draw

issue with. On page 439 of the transcript His Honour

deals generally with, at the b_ottom of 439:

Whether the property of a partner

becomes partnership property depends on the

agreement between the parties -

and he cites O'BRIEN V KOMESAROFF and HARVEY V HARVEY.

But, as His Honour says there, that is exactly what

those cases deal with:

Whether the property of a partner

becomes partnership property.

We are dealing there with a situation, in the

case of HARVEY·v HARVEY, for example, of a man who

owned some land and had for some time, and made it

available to the partnership. The question was

whether,improvements having been done, the

land becomes partnership property. But that is a

very different situation from what we are dealing

with here.	At the top of page 440, Chief Justice King
says:

I suppose that it was these presumptions and principles which Menzies J had in mind

when he stated in HARVEY V HARVEY that in

the absence of express agreement "the

problem can, I think, only be determined by

the application of general principles".

(Continued on page 10)

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MR WILLIAMS (continuing):

It seems to me that where there is no express

agreement and no legal presumption, the court
is faced with the familiar problem of deciding

whether the circumstances justify the implication

of an agreement and, if so, the terms of any

such implied agreement, deriving such assistance

as it can obtain from the guiding principles in

the cases.

He says that and then on page 442, line 7 - I will

start at line 4:

The respondent had previously used his abalone

permit for the benefit-of the partnership and

it was to be expected that he would use the

authority in the same way. As he proposed to

exercise his rights for the benefit of the

partnership, the fact that the authority was

obtained in respect of a partnership boat and

that the fee was paid by the partnership is

entirely consistent with the respondent's
retention of the beneficial interest in the

authority as his separate property.

And then at the bottom of page 442, line 22:

There being no express agreement with respect to the respondent's fishing licence

and abalone authority and no legal presumption

applicable to the situation, I consider that

the Court should simply an agreement between

the parties that the respondent's licence and

authority be partnership property only if

circumstances compel the conclusion that if
the parties had applied their minds to the

question they would have agreed that the licence

and authority were to be the property of the

partnership.

I take issue with that and I refer to two matters:

first of all, section 20 of the PARTNERSHIP ACT

which says at section 20(1):

(Continued on page 11)

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MR WILLIAMS (continuing):

All property and rights and intersts 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.

I might say that there was ventilated in the other courts

below the question as to whether or not this authority

amounted to property. We say -that that simply is not

the question; we say that undoutedly the authority

is a benefit which must be accounted for by any P.artner

who holds it~ and I will come back to the authority on

that in a moment.

Now, in my submission this case can be

shortlv deciaed based on the principle of CARTER V RENOUF,

111 CLR 140. The facts of the case were that

a lite policy was taken out on the life of the

managing partner and was paid for out of the partnership

funds and there was a dispute after the partne:r's death

as between his estate and the partnership.

I refer to page 162 of the judgment of the

Full High Court. I think that if I start at the middle

of page 162 and go into 163.

(Continued on page 12)

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MR WILLIAMS (continuing):

It appears that before Fullagar J.

the case was put as if it depended entirely

upon the question whether R.J. Carter in

his lifetime ever declared himself a trustee

of the policy for the partnership.

I will not develop the contention.	Then, at
the bottom of the page:

On the appeal, a different contention was

advanced. It was submitted for the ap ellants

that in view of the payment of the premiums

out of partnership moneys a decision that
there was never any declaration of trust

by R.J. Carter is not enough to dispose

of the partnership's claim to the proceeds

of the policy: there remains a question

whether the policy was not impressed with

a trust for the partnership from the beginning,

so that the beneficial interest in it did

not vest even momentarily in R.J. Carter

and that .accordingly its character as

partnership property does not depend on

proof of any dispositive act by him.

Section 23(1) of THE PARTNERSHIP ACT of 1891 (Q.), speaking of course in terms of beneficial ownership, states the general

principle that not only all property and

rights and interests in property that were

originally brought into the partnership

stock but also all that are acquired, whether

by purchase or otherwise, on account of

the firm, or for the purposes and in the

course of the partnership business (called

in the Act partnership property) must be

held and applied by the partners exclusively

for the purposes of the partnership and

Accordingly the question whether or not

in accordance with the partnership agreement.

property acquired during the partnership
in the name of one only of the partners

was acquired as partnership property, and

therefore upon trust for the partnership,

is simply a question whether or not the

acquisition was in fact an acquisition

on account of the firm or for the purposes

and in the course of the partnership business.

In most cases the answer depends upon the
proper inference to be drawn from the manner
and circumstances of the acquisition.
A common case is that in which property

is bought with partnership money. The

fact that it is so bought is of course

not conclusive. The partners may have

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agreed to withdraw the money from the

partnership and employ it in a separate

joint investment, as happened, according
to the findings, in BUTLER V MADDEN; or
they may have agreed to the one partner's

applying it for his own purposes either

as a loan or a gift from the partnership

or on account of his share of profits; and in such a case the property bought

would not be partnership property. But

where there is no proof that the partners

had any cqmmon intention inconsistent with

that which the unexplained employment of

partnership moneys suggests, the conclusion

must be that the purchase was on account of the firm ..... , and that therefore the purchasing partner is-a trustee of the

property for the firm; .... It could not

be otherwise, for the general principle of equity applies between partners that

a person in a fiduciary relation to another

is not permitted to keep for himself a

gain which he has made by the use of his
fiduciary position ..... and accordingly

every partner must account to the firm for any benefit derived by him without the consent of the other partners from

any use by him of the partnership property:

sees. 32 of the Act.

In this case a study of the evidence

reveals much to support the prima facie

inference arising from the use of partnership

moneys in the acquisition of the policy,

and very little indeed of a contrary tendency.

The balance of considerations is overwhelmingly

in favour of the conclusion that notwithstanding

the three features of the policy that have

been mentioned, above, his rights under

it from first to last belonged beneficially

to the firm. In the light of these facts it is

On page 165, about line 10:

beyond question that the premiums must be regarded as having been paid out of

moneys of the partnership; and it is equally

clear that the employment of partnership

moneys for the purpose was not pursuant

to any intention of the partners to confer

any benefit upon R.J. Carter otherwise

than as a member of the firm.

On page 16 7, ,at the bottom of the page:

It seems to 11s the proper conclusion

from all these considerations that the money

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now in Court has come from an employment

by R.J. Carter of moneys ef the partnership,

made by him for the purposes of the

partnership and in exercise of the authority

that he had as "Governing Director", and

made by him with the knowledge of his co-partner

and upon the understanding between them

that the policy was a partnership asset.

(Continued on page 15)

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MR WILLIAMS (continuing):  That is the principle which, 1n

brief, in my submission, should be applied to this

case. I draw attention to page 441, line 15, where

His Honour the Chief Justice says:

It is clear that the partners never applied their minds to whether the new

authority was to be a partnership asset.

That is the first matter of importance and the other

matter is that it was admitted on the pleadings that partnership funds were used at all relevant times to

pay for both the permits and for the authorities and

for the fishing licences during the terms of the

partnership. Now, against that background, my

submission is that the conclusion is irresistible,

unless there is something mQr~ that can be put forward

and, in these circumstances, my submission is that there

is nothing more to be put forward other than the

confirmatory evidence that I have already indicated

showing how the licence was taken out in Mrs Kelly's

name for a cray boat and that being brought into the

partnership and in all other respects the partners

pooling their resources and carrying on their enterprise

and getting the income together and paying all expenses

out of partnership property.

Now, that, in short, is the case that I wish to put to the Court. I will simply develop various

aspects of it in a moment.

MASON CJ:  Mr Williams, the Chief Justice does refer to

section 21 of the PARTNERSHIP ACT and, on two occasions,

says there was no legal presumption applicable to the

case.

MR WILLIAMS:  Yes. Well, I simply join issue, with respect.

His Honour has referred to section 21 which says: Unless the contrary intention appears,

property bought with money belonging

to the firm is deemed to have been

bought on account of the firm.

He has not apparently turned his mind to the fact that

we are dealing here with a new asset because, quite

clearly, the cases that he cites are cases from a
differint factual situation and he has characterized

it as a situation, as one whether a person who owns an asset is required to treat it as being for some reason transferred over to the partnership which is the HARVEY

V HARVEY situation, whereas, in this case, it is not

that case at all. It is simply a question of money

being expended on the partnership account and the

presumption arising.

MASON CJ:  Is that how the case was presented in the Full Court?

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MR WILLIAMS:  It was very much presented that way, Your Honour,

yes. And then, of course, just to demonstrate the

argument that was put on page 441:

Mr Williams, QC, has urged a number of considerations in favour of the view that the

abalone authority must be regarded as a

partnership asset.	He relied upon the
cumulative force of these factors.	He pointed

out that the annual fee for the fishing

licence with the abalone authority endorsed

thereon was paid out of partnership funds, that

the boat which was made the subject of the

authority was a partnership asset, that the

fishing licence and rock lobster authority taken

out in the name of the appellant was a

partnership asset. He contended that when those

factors, as well as the general relationship

of the parties, were looked at, it became clear

that their intention was "to pool their resources

in a full and complete way and that both of these

licences are to be accounted for in the same

fashion".

MASON CJ:  That is a slightly different way of putting the

case from the way of relying on payment out of-:the

funds of the partnership and invoking a prima facie

presumption under section 21.

MR WILLIAMS: Yes, I know,His Honour has turned it around that

way, but that is not the way in which the case was

put. I put the case on the footing that this

authority was paid for out of partnership funds

and therefore that a presumption there arises. Now,

His Honour has looked at section 21 and has simply

treated it as not being applicable to this.

MASON CJ: It is obviously presented on the footing that although

there is a presumption arising from section 21 it

is not a presumption that is applicable to this case.

MR WILLIAMS:  I think that - and yet he clearly recognized in his judgment the crucial facts on which I rely for

my conclusion. We, of course, started off with the

general proposition based, for example, on

CHAN V ZACHARIA, that here was an authority - this was after 1 July 1984 - that Mr Kelly had been able

to derive from the new regulations - his right to that

only arose out of the fact that he had an authority

immediately before 30 June 1984 and so that the

case depended then upon deciding whether or not
the authority immediately before 30 June 1984 was

partnership property.

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DAWSON J:  Why could you not regard the authority as merely

the replacement of the permit?

MR WILLIAMS:  Because there is nothing in the regulations which

so treated it.

DAWSON J: Forgetting about the regulations, it was that

which enabled him to dive for abalone, was it not,

in the first place the permit and thereafter, whenever

that the permit was partnership property?

the regulations were changed, the authority?

MR WILLIAMS:  I contend that the partners never turned their

mind to that.

DAWSON J:  No, no , that is not the que_s_tion. Do you contend

that the permit was partnership pr~perty?

MR WILLIAMS:  I am prepared to contend that, but I do not need

to for the purposes of - - -

DAWSON J:  It could not have been originally, because it

pre-dated the partnership.

MR WILLIAMS:  Yes, but you see, what the partners decided was

they simply assumed that a permit could have no value

and that, therefore - well, I wonder if I could just

take - to what the learned trial judge actually

found. The trial judge found, at the bottom of 417:

that prior to 28 August 1980 a permit
to take abalone was personal to its

holder and was not transferable .....

Mr Williams QC did not contend in his

final address that prior to August 1980

the defendant's abalone permit could

have been transferred to the partnership

or was transferred to the partnership.

Therefore, I hold that because it was not

transferred, and because there was no

intention to make it a partnership asset,

the defendant's abalone permit did not

become a partnership asset on the

formation of the partnership or prior

to 28 August 1980.

Now, my submission is that whatever the status of

the permit was, which we do not need to determine,

there was an obligation to account for any

benefit arising from it, arising out of the fact of

the partnership having paid for the permit, unless

the parties agreed to the contrary. Now, it may be

that the parties simply did not believe that - there is

something else here, where His Honour deals with it -

that the parties did not believe that it was capable of

having a value - this is the finding, 408, line 10.

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MR WILLIAMS (continuing): This is the finding: page 408,

line 10.

But first of all it says at line 5:

The partnership agreement was signed on
10 July 1973, but operated as from 1 July

1973. I reject the evidence of the

defendant that either he or Mr. Tarrant said

anything either to each other or to the

plaintiff to the effect that the defendant's

abalone permit was not to become an asset of

the partnership.

So there is nothing said.

I find that both the plaintiff and the defendant believed that under the law as it then stood the

abalone permit in the name of the defendant was

personal to him, could not be transferred to

anybody else and would lapse if the defendant

died, and was therefore a valueless asset.

So the parties had a belief, albeit perhaps a wrong

belief, as to what the situation was. By 1980

we have got rid of that permit system altogether,

a new system which is introduced which certainly

has transfer rights r.in a limited form built into it,

so we start off in my submission from scratch from

that point.

DEANE J: That glosses over the position. I mean, what was

the position immediately before the authority system

came into operation? Were authorities available to

all and sundry or were authorities available to

people who had a permit in substitution for their

permits? Because if it is the latter the permit
at that stage had obviously become something of

value. If it is the former, what you said to me

earlier. was correct ~ and the authority did not

grow out of the permit system.

MR WILLIAMS:  There is nothing in the regulations at all that

deals with that situation, Your Honour; nothing

that we can find.

DEANE J: What,there is no evidence about whether, as a matter

of fact, the authorities were made available to those

people who had permits,which is what you would expect

as a matter of common sense?

MR WILLIAMS:	Well I cannot point to any evidence as to whether they only issued the same number of authorities as
there were permits.
DEANE J:	Or whether the holder of a permit, as a matter of policy
stood in a preferential position in terms of getting
an authority?
MR WILLIAMS:	There is no evidence about this at all as to what

the situation was.

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MR WILLIAMS (continuing):  We cannot point to anything at

all. So that we say, whatever the situation may

have been, based on that finding at 408 by the

trial judge, by August 1980 we have a new system

introduced and that is the starting point because,

quite clearly, whatever the parties may have

believed about the abalone permit it was based on the

regulations as they then stood. There would be no

reason to apply that to the new situation at all.

So we simply have,as the Chief Justice says, a

situation where the parties did not turn their mind

at all to this situation.

Now I have dealt with CARTER V RENOUF. So far

as the case of HARVEY V HARVEY is concerned, my

submission is - that is 120 CLR- 529, and the ratio

that I have written down that I have extracted from

that case is, where partnership expenditure or efforts

improves the capital value of land of one of the
partners the cost of that expenditure is to be treated
as a partnership expense, and the partner receiving

the benefit of the improvement is not required to

account therefor upon the dissolution of the partnership.

That is one way of looking at it, but whatever

the case decides, it arises out of a situation of a

formation of a partnership in 1946:

between the owner of a pastoral property and -

others who were -

his brother and his brother's adult sons .....

It was agreed that the owner on the one hand

and the firm on the other would carry on the
pastoral business on the land; that the owner
was not to be active in the working of the
business; and that expenses, including the
cost of improvements, were to be borne and

profits, divided between the owner and the firm

equally ..... There was no express agreement

whether the land would be a partnership asset

and it was not treated as such in the books of

the partnership.

So that we are dealing, in my submission, with an entirely

different situation from what we are dealing with in

this case.

(Continued on page 20)

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MR WILLIAMS (continuing):  At page 549 we see the very

different situation - this is at about point 8 in the

judgment of the then Chief Justice:

No doubt the partnership bears the onus

of establishing that the land the title to

which remained in the appellant's name

became partnership property.

That means that in this suit the respondents bear that

burden. So we have a very different situation, and

at page 553 in the judgment of Mr Justice Menzies at

about point 2:

This question of principle is whether, when

partnership activity improves the property

of one of the partners used for the purposes
of the partnership busiriess, and does so
pursuant to the partnership agreement and
not merely accidentally or incidentally,
the additional value of the property, by
reason of the improvements made to it, is

to be regarded as an asset of the partnership

divisible among the partners at the

determination of the partnership.

Then half-way down the page:

There is authority which shows that where

property, contributed by one partner as a

partnership asset and for which that partner

is credited in the capital account of the

partnership, is improved, so that upon the

dissolution of the partnership the sale price

exceeds the value fixed at the time when the

property became a partnership asset, the

excess is divisible as profits of the

partnership business.

On page 555 point 4:

To treat "Fonthill" as an asset of the

partnership would defeat the intention that

it should be kept on by H.H. Harvey to be

available for Robin -

that is, to be available by the owner for his son.

(Continued on page 21)

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MR WILLIAMS (continuing): Before the Full Court the question

was ventilated as to whether the licence and

authority constitute property. We say that

that really does not need to be decided because

applying the principle of AMBLER V BOLTEN, (1872)

LR 14 Eq Gas 427, any benefit of this nature must be accounted for and in this case there was a:

government contract entered into in the name

of one of the partners and containing.a

proviso against alienation -

and it was -

held, that upon a dissolution of the partnership,

the partner in whose name the contract was
taken, and who continued to carry it on, must

be debited in the accounts

of the partnership~

with its value, to be ascertained by a reference
to Chambers.

I have included on my reading list another case to the same effect, the case of SMITH V MULES.

MASON CJ: What is a reading list?

MR WILLIAMS:  I am sorry, Your Honour. It was the list of

authorities that I had handed up. I had not

appreciated that the Court did not have that in

front of them. I am sorry.

D EAN:C. J :· What is the reference on the list?

MR WILLIAMS:  SMITH V MULES, (1851) 9 Hare 556; 68 ER 633.

Perhaps I might now take the Court to the relevant

regulations. We have made up a bundle. I start

off under the tab "Fisheries - General Regulations

Licences in Regulation 7. "Every fishing licence 1971" dated 30 November 1971. In part III Fishing shall be in the form of the fourth schedule". Then

looks at the fourth shedule we see there how

I go to the Managed Fisheries Regulations of 1971. one

the licence is set out with the various endorsements
on the licence, in this case including the various
permits. In one case an abalone permit is mentioned

there.

MASON CJ: What page is that?

MR WILLIAMS:  That is page 2280 of the Gazette at the top

left-hand corner, fourth schedule. There are many

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examples amongst the exhibits that are before the

Court of these various licences as issued to the

parties. Then I turn to the - - -

DAWSON J:  The permit there is personal as opposed to an

authority, such as lobster authority which seems

to be attached to a boat in some way.

MR WILLIAMS:  Yes, that is clear. Now I turn next to the

Managed Fisheries Regulations of 1971 made on

30 November 1971, regulation 5, Authorities and

Permits:

A person shall not use a boat for the

purpose of taking prawns or lobsters unless:-

(a) she is a boat for-which an authority has been granted.

That, at this stage, of course, is only lobsters.

(Continued on page 23)

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MR WILLIAMS (continuing):  Then, regulation 7:

No person, being the holder of a fishing

licence, shall .....

(c) take abalone;

unles he has obtained a permit from the Director

of Fisheries.

Then, regulation 9:

(1) The owner for the time being of a

boat may apply to the Director for the

grant to him of an authority with respect

to that boat.

I mention these as I go through because later
on the permit system is changed over to authority

system and what is here relevant to authority

will be seen to be relevant to the abalone system

as the regulations change.

Regulation 11 sets out the right to grant

an authority or permit and the matters to be

taken into account. Regulation 16(3):

Upon consideration of an application·for
renewal ..... there is no reason why the

application should not be granted, shall

renew the authority or permit.

and 16(4):

An annual fee as prescribed shall be payable

Dor each year that the authority or permit

· is in force -

The regulations made on 9 November 1972 which,

of course were in force at the outset of the

partnership; that is, page 2264 of the Gazette,	Regulation 8 of the regulations is varied .....
inserting at the end there of the following paragraph: -
"(2) Every authority or permit shall come
into force on the day on which it is issued
and shall remain in force until the day of
the expiry of the applicant's fishing licence"

regulation 5:

apparently to avoid the possibility tITTat the permit

might overrun the date of expiry of the licence.

Over the page on 2265, a new regulation is

introduced:

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"21A. No person shall be the holder of more

than one of the authorities or permits listed

hereunder:

Abalone Permit ..... Rock Lobster Authority."

Now, the next regulation that I take the Court to is on 28 August 1980, page 654, and we see that in

regulation 3 there:

Regulation 5 of the principal regulations is varied by inserting after the words "purpose of taking", the word "abalone".

So, the effect of that is that one is required to

have an abalone authority instead of a permit because

I mentioned before regulation 5 said:

A person shall not use a boat for the purpose

of taking prawns or lobsters unless: -

(a) she is a boat for which an authority

has been granted -

Then, regulation 7 is varied by deleting paragraph ( c)

from regulation 1 so that there we see the permit

system being deleted entirely. I need not go

through all the changes but, basically, we now have

a situation where one obtains an abalone authority

instead of a permit.

(Continued on page 25)

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DAWSON J: What happened to the regulations saying that if you

had a permit you were entitled to renewal unless

some good reason was shown?

MR WILLIAMS:  I think that remained in place. Regulation 16

remained unchanged.

DAWSON J:  And does permit then become authority?

MR WILLIAMS:  Well, certain permits remained. A new authority

was created and in my submission the construction of

regulation 16 is that there would not have been any

rights given by regulation 16 to apply for a renewal

of a permit as an authority.

DAWSON J:  But there was no similar regulation in relation to

authorities?

MR WILLIAMS:	There was no transitional provision.
DAWSON J:	No, there was no similar provision for entitling you

to a renewal of your authority in the absence of some

good reason.

MR WILLIAMS:  No, regulation 16 deals with an application for

renewal of an authority or permit.

DAWSON J:	I see, thank you.
MR WILLIAMS:	But there is not a transitional authority, a provision

that gives one the right to apply for an authority

where one previously had a permit. And indeed, when

one looks at the new scheme of August 1980, there was

introduced in regulation 12, regulation 35AA, whereby
now there was some sort of right given to apply for

transfer.

35AA The holder of an abalone authority who is

required by the provisions of any contract to apply to the Director for the cancellation of the abalone authority or to refrain from making	an application to the Director for the issue of	a further abalone authority and any person who
makes an application to the Director for the
issue of an abalone authority in reliance upon,
or as a consequence of, a holder of an abalone
authority making application to the Director for the cancellation of his abalone authority
or refraining from making an application for the issue of a further abalone authority in compliance with the provisions of any contract
shall lodge with the Director within 28 days of the date of any such contract ..... a statutory
declaration -

setting out certain things:

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the value of the obligation .... .

the value of any vessel .... .

the value of any equipment transferable -

so that there was a limited form of transfer now

introduced whereby the department exercised some

sort of supervisory role.

The next regulation that I should draw attention

to is made on 14 June 1984 and this, of course, is

made under the new FISHERIES ACT which by then had

come into force and regulation 9:

These regulations may be cited as the

"Scheme of Management (Southern Zone Abalone

Fishery) Regulations, 1984:.

These regulations shall take effect from

1 July 1984.

And then regulation 9:

(1) Applications for a licence in respect of the fishery shall be limited to:

(a)	applications made by persons who are licensees under the repealed Act; or
(b)	applications made by persons who are
successful applicants at a competitive tender -

and then the regulations go on to provide for a

competitive tendering system.

So there we see an actual right given by the

regulations to the holder of a licence under the
previous Act to have his right carried forward, to

be contrasted with the situation as it was in 1980

when there was no such carry forward. (Continued on page 27)

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MR WILLIAMS (continuing):  No, I do not think there is anything

further that I wish to put to the Court.

MASON CJ: Thank you, Mr Williams. Yes, Mr Lawson.

MR LAWSON:  I hand up, if the Court pleases, an outline of

the submissions on behalf of the respondent.

MASON CJ: Thank you. Yes.

MR LAWSON:  May it please the Court, before commencing my

submissions, might I make a number of observations
about my learned friend's chronology that he handed

up. It is incomplete in the following respects: in

1965, which is really before his chronology begins,

the respondent began crayfishing in South Australia.

That is in the evidence at page 101. In 1968, at

some time, he was not able to identify when, he had

first pursued with officials of the South Australian

Fisheries Department the obtaining of an abalone permit,

but he could not then progress the matter; that is at

page 104 of the transcript, and again in 1969 he
pursued with another officer of the Fisheries Department

the obtaining of an abalone permit.

My learned friend, in the course of answering some

questions from Your Honour Justice Deane, submitted

that the authority that my client obtained in his name,

after 1980, did not flow from the permit. That, in my

submission,is not the effect of the evidence. There

is reproduced in the appeal books, at page 276 of

volume 2, a letter from the Fisheries Department.

Unfortunately, if the Court pleases, all of the exhibit PS, of which page 276 represents a part, have not been

reproduced, but I have obtained copies of the

preceding page in the exhibit, which I hand up to

the Court, it is a circular from the Department of

Fisheries. It is a:

Notice to holders of fishing licen~es/abalone authorities for t~a 1980!81 licencing period.

At the conclusion of the 1980 licencing period the

change.between "pelTI!lit" and "authority" was

effected. -A.form of application was enclosed and

it is clear from the fourth-last paragraph, in the

middle of the page, that:

You as the licence holder have been noted as the owner ..... in both the abalone

authority and certificate of vessel
registration.

What happened was. that the department sent out the form of licence with this circular, which required the applicant to sign it and return it.

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MR LAWSON (continuing):  So it is my submission that it would

appear, and it is the fact, that the entitlement to an authority grew out of the fact that the holder already

had a permit and if the Court goes to page 277 this

is in fact the licence issued in respect of the first

period for which there was an authority. The document

contains a form of application at the foot of the

first page and it appears from those proceeding

documents that the director dispatched to the previous
holders of permits a form of licence for them to sign

in return and it appears that the respondent did so.

The number of the licence, for example, was the

same as the number of the licence in preceding years.

It was virtually a renewal. Whilst the Court has

that volume open, I might invite the Court's attention

to pages 246, 250, 253 and 25~ which contain

correspondence by the respondent with the Department
of Fisheries in which he is seeking the issue of an
abalone permit in his own name in 1971, in which
correspondence he advances his own qualifications for
the granting of a permit and it is clear from page 246
that in March 1971 there were no additional permits

given to dive in that particular year and then he

wrote in September at page 250. He obviously had

an application form and set out his experience.

He was apparently unsuccessful again in April

1972.       On page 252 he was putting forward reasons for

the grant. On page 253 is the department's reply.

There was a delay in allocating additional permits

but finally on page 256 in December 1972 he is advised

that his application has been successful, subject to

completion of an application and a medical examination

and it appears that his fishing licence was endorsed

with the permit at page 257 and on the following page

it appears that that fee was paid on 15 December 1972.

At the very foot of the page there is an imprint of

receipt and in accordance with the regulations he

was thereupon licensed to fish and permitted to take

abalone. (Continued on page 29)

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MR LAWSON (continuing): So, in mv submission, the respondent

had acquired the permit or permission to take

abalone, something that he would not otherwise be

permitted to do, in December 1972 before the

establishment of a partnership on 1 July in the following

year, and that all that subsequently followed sprang

out of the fact that he had obtained, by reason of his

own qualifications and experience and efforts, a

right to pursue his vocation and a right to exploit a

resource.

It is submitted by my learned friend that

section 21 of the PARTNERSHIP ACT has application

but, in my submission, where that section speaks of "property bought with money belonging to the firm",

the expression "bought" or "property bought'' relates

to something in the nature of the acquisition of an

asset rather than the mere renewal of a permit.

For example, in 1980 after the regulations were changed and there was a measure of portability with

abalone permits ,vhich becarrE authorities. it would have been

possible to acquire for a capital sum the right to
exploit the abalone resource and, no doubt, if a

payment had been made to acquire such a right that

would have been a payment of the type contemplated in

section 21.

DEANE J: Was there any evidence as to the value of these

authorities in 1980?

MR LAWSON: No,there was not, or at any stage.

DEANE J:  The other thing: the learned trial judge, in the

passage Mr Williams referred us to said that the

parties regarded the permit as valteless. What was

the effect of the evidence. was it that they regarded

a permit as not being something of value or that they
regarded it as valueless only in the sense that it

could not be dealt with?

MR LAWSON:

In the latter sense, if the Court please. The

effect of the evidence was that they had not applied

their minds to the question of the rights relating to
the abalone permit. My client had given evidence that

there was a specific discussion at which it was agreed

that it would be excludedbutthat evidence was not

accepted.. The effect was that they had not applied

their minds to the matter.

(Continued on page 30)

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MR LAWSON (continuing):  I think the final gloss in the trial

judge's statement is in fact a conclusion that he draws

that they thought it was therefore a valueless asset,

at page 408 line 15. It was, of course, not a valueless

asset. It was the source from which this partnership

derived very substantial income over a number of years,

as is testified by the tax returns that are in.

Without it the respondent could not have pursued his

vocation and the partnership could not have derived the

income from the sale of fish. It was simply not a

transferable, saleable or portable commodity.

In my submission, it is wrong to categorize

payments made by way of renewal for the licence

obtained in this way as it were a payment for the buying
of an asset or for buying property. Not only did the
permit have a value in the fact that it could be used

to produce income because it· had another value which

was the expectation that it would be renewed and the
regulations at the time - regulation 16 in particular,
which my learned friend referred to - make it clear that

there was a legitimate expectation on the part of a

holder that his licence would be renewed. The payment

of the renewal fees year by year was not, in my submission,

a payment to acquire something, so much as it is

described, a licence fee, the payment of a fee for a

licence to pursue one's vocation and what is more, in

my submission, what is being acquired was a right of a

very personal nature.

My learned friend has referred to the regulations

made under the 1971 FISHERIES ACT. It is unnecessary

to go to them in further detail. My learned friend did

not refer, I think, to regulations 31 and 35

of the Managed Fisheries Regulations of 30 November

1971 - I am afraid my page is not numbered.

TOOHEY J:	It is page 2291, I think, Mr Lawson.
MR LAWSON:	Thank you, Your Honour:

Provisions Relating to Abalone Fishing

31. Notwithstanding the provisions of
paragraph 12 the Director shall not grant or

renew an application for a permit to take

abalone unless he is satisfied, by
production of a medical certificate or

otherwise, that the applicant is medically

fit to dive.

Regulation 35 makes it clear that it is the person to

whom the permit is issued and he and he alone who is

permitted to dive. If he is ill or incapacitated he

can have someone else dive in his place. This is not a permit in the nature of some concession that can be

exploited by the employment of labour. It is something

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that is personal to the holder. That was

subsequently amended in 1980 but the same system

applied excepting that on this occasion the
director was permitted to allow a substitute for

21 days but still after the authority system came

into force this personal nature of the authority

remains. The new regulation is at the

regulations of 28 August 1980, page 655.

(Continued on page 32)

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MR LAWSON (continuing):  On the preceding page, the very

last line of the regulations, in my submission,

make it clear what was happening, that the notion

of a permit was removed and these things were

simply described as an abalone authority. It

was a change in the nomenclature. Admittedly at

that time the new authority obtained by reason

of the new regulation 35AA a transfer value but it is not, in my submission, as if some valueless thing had been turned into a valuable thing by

reason of the change brought by the regulations.

So, it is my submission that section 21 does

not apply at all to a abalone permit or to a

licence, authority, permit or call it what you will,

of this kind, annually renewed. The manner of the

respondent's obtaining the permit in the first

case from the correspondence that I took the Court

to, and also from the fact that his own medical

fitness was required to be testified - the fact that

he alone could pursue the diving - all indicate that

this is not, in my submission, a 'property bought' of

the kind spoken of in the section.

If, contrary to that submission, the Court were

of the view that the abalone authority was, in each

year, bought - having regard to the fact that it was

issued in my client's name, there are a number of

factors which in my submission indicate that the

rebuttable presumption in section 21 has been rebutted

in the circumstance of this particular case. I think

it is unnecessary to take the Court to HARVEY V HARVEY,

the case referred to by my learned friend,again. At

paragraph 2.1 of the outline I have cited the passages

to which I invite the Court's attention. In my

was not seeking to put the onus on the party in my

submission, in the circumstance of this case and

contrary to my friend's submission, the Chief Justice

client's position; he was putting the onus on the

partnership - this is page 549 point 7 - he was putting,

as it were, the onus on the partnership to establish

that which was not in its name was, in fact,

partnership property.

In my submission,the case of CARTER V RENOUF,

again to which my learned friend referred, is of no

assistance to the appellant. In that case a life

insurance policy, undoubtedly an asset, one that

could be transferred and mortgaged as indeed it was,

was acquired during the course of the partnership

and, undoubtedly, with partnership funds and for the

purpose of the partnership and the partnership alone, It
was for the purpose of facilitating borrowings by the

partnership nd in the passage read by my learned

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friend at page 118, line 3, of the report in

CARTER V RENOUF - sorry 168, line 3 - the Court

held that there was a cormnon understanding

between the parties - between the partners. There

was no such common understanding in this particular

case.

There are a number of other factors that I set

out, in my outline, which I submit indicate - some

more strongly than others and none, it must be

conceded decisively - that there was a contrary
intention in the circumstances of this case, but

the fact I particularly rely upon is the personal

association between the authority and the respondent;

the fact that the partnership agreements specifically

provided that partners could,- without devoting assets

to the partnership - or making them partnership

assets - could use their own assets in the pursuit

of the partnership business; the fact that the permit

nor its value was brought into the partnership accounts

and,in my submission,it should not be assumed that the

respondent would have relinquished in favour of the

partnership for no consideration his right to pursue
his livelihood, without being credited with something

in the partnership accounts.

The true arrangement, in my submission, and I say it

in a reference at 2.5 of the outline,is that they were

partners as to income only. The scheme of the South

Australian FISHERIES ACT throughout was that only the holder of a licence could take fish and only the holder of a licence could sell fish, in trade or commerce,

(Continued on page 34)

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MR LAWSON (continuing): The evidence was that in this case

the respondent did the fishing and he delivered the abalone to a dealer, or processor, and directed the dealer to pay the proceeds to the partnership,

because the partnership itself could not sell the

product.

TOOHEY J:  Mr Lawson, if you are right in what you say about

section 21 of the Act, that if, perhaps contrary to

your submission, the authority be regarded as something

different from the permit that preceded it, does

section 20 of the Act have anything to say on the matter?

MR LAWSON: Well, in my submission, not in a way that is

decisive. It is a section not relied upon by the

appellant, but the decision in CARTER V RENOUF makes

it clear that having regard to the application of section 20, which was, I think, section 23 of the

Queensland Act, the Court is required to take account

of all of the circumstances, and that no necessary

presumption arises out of the application of

section 20. That appears, from the way in which the

Full Court in CARTER V RENOUF dealt with the Queensland

equivalent of section 20, that is at page 163. After
setting out the effect of a section, in the middle of
the page,he said:

In most cases the answer depends upon the proper inference to be drawn from the manner

and circumstances of the acquisition.

And I have submitted that the manner and circumstances

of the acquisition of the, as it were, acorn from which

this oak grew, were such that it was my client's

property. Further down the page it is said, 111 CLR 163,

that if:

There is no proof that the partners had any

common intention inconsistent with that which

the unexplained employment of partnership moneys

suggest, the conclusion must be that purchase

was on account of the firm -

section 24, which is the Queensland equivalent of

section 21. The "unexplained employment of

partnership moneys": in my submission, there is good
explanation in the circumstance of this case why the
partnership should annually pay the licence fee. In
my submission,the treatment accorded the boat that the

partnership, the Amanda-K., - which was purchased with

a rock lobster authority attached, stands in stark

contrast to the way in which the abalone permit was

treated. The Amanda-K and the authority were put into

the books, were undoubtedly acquired with partnership

funds. The abalone permit, subsequently "authority" on

the other hand were never mentioned in the books.

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DEANE J:	But this is all very difficult really, is it not?
I mean, it would be one thing if there had been
evidence to the effect that when the authority
was brought in - and it is obvious that the authority
went to permit holders - the value of your client's
authority was, let us take a figure, $150,000.
In that case, your argument would be very strong
indeed.  On the other hand, if the evidence was
that really the only people who wanted these authorities were permit holders and you effectively
could not give them a~ay as at that time, the
position would be far more difficult from your point of view.

Now, as I understand it.from what you said

in answer to my earlier question, there is just

no evidence at all about.that.

MR LAWSON:	There is no evidence on value.
DEANE J:	Reading what was said about permits prior to 1980, one gets the feeling that the authorities
must have been of very substantial value but
we cannot really act on our feelings. We are
just left up in the air.
MR LAWSON:	Yes. If the Court pleases, the inference of

the evidence - the totality of the evidence -

is of course that there·was a restricted number

and that they were, to that extent, valuable

but in my submission, ultimately the issue in

this case is not so much whether the authority

was partnership property or bought with money

belonging to the partnership; the issue is

whether, in the circumstances, my client is required

to account to the partnership for its value on

dissolution and I submit that he should not have

to, in the circumstances; namely, that he held

the permit before the partnership was formed;

it was granted to him by dint of his qualifications

and experience; it was maintained by reason of

his own personal endeavours, his qualifications	and attribute~ and one has to identify the date
at which it is said he ceased to be entitled
to use that for his own purposes~ It could not,
in my submission, be as at the time of the
establishment of the partnership. He had paid
for the fee. He was licenced; he was entitled
to pursue during that year. One cannot say simply
because he went into partnership and began to
share the profits of his licence with a partner
that he thereupon was accountable to the partnership
for the thing that he had·,· himself, obtained.
If he did not go into the partnership then, in my submission, it should not be assumed that simply
because there is a change ifl ~he legislative regime
and that which had always had value suddenly had

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greater value and also transferability, that

simply by virtue of the change: in. the regulations

the respondent came under a duty which he was

not previously under.

In my submission, the mere fact that the

partnership was paying the fee in each year is

not decisive; that is a fee properly payable as

part of the outgoings of the enterprise.

(Continued on page 37)

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MR LAWSON (continuing):  He was prepared, as he said, to use

his licence for the benefit of the partnership

throughout. In my submission, there is nothing

arising out of the circumstances that would impose

upon my client any restriction upon his use of the

authority granted to him. It is, of course, accepted

that on the day following the dissolution of the

partnership, namely on 1 July 1984, there was a

new legislative regime and my client did become,

by virtue of the fact that he was a previous holder,

entitled to apply for a further authority under

the new Act. But that was not, in my submission,

any Act in breach of fiduciary duty in the same way

as was found in CHAN V ZACHARIA, the case referred

to by my learned friend. If the Court were against

the respondent in all of these arguments, in my

submission the difficulty is that referred to by

Your Honour Justice Deane, namely that my client has

received no credit for its value. In my submission, there would have to be taken some form of account as to that so that he would receive credit for the

value of what he relinguished to the partnership at
the time when it is to be taken that he relinguished

it. If the Court pleases.

My learned friend referred to the case of

AMBLE~ V BOLTON reported in 14 Eq~ity Cases. This

was the case in which - - -

MASON CJ: Are you contending that the authority is not property?

MR LAWSON:  The authority is no authority for any proposition

relevant to this particular case, because it does not

appear from the report when it was that the contract

to carry the mails, which was in the name of one

partner, was obtained and without any reasoning, it

appears at the bottom of page 428 and to the top of

page 429 that it was accepted, after argument, that

the contract was a partnership asset: The Defendant alleged that his

partnership ..... was confined to the working

of the contract, and that the contract itself

was not a partnership asset; but the Court was

of a contrary opinion. The Defendant further claimed the exclusive benefit of the contract

and all profits arising therefrom subsequently

to the death ..... on the ground that the contract
could not be assigned to any person, and

therefore could not be sold.

(Continued on page 38)

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MR LAWSON (continuing): What the case is authority for is that

in such circumstances, notwithstanding that the contract could not be sold, a value must be put upon the contract and the partner who holds it for

the benefit of the partnership must be called upon
to account.

My learned friend referred to the judgment of

the Chief Justice in the s,upreme court and Your Honour
the Chief Justice mentioned that on two occasions

Justice King mentioned no legal presumption.

That is at page 440, abrutline 8 and near the end of his judgment at 442, about line 23 to 24. Having regard to the fact that Justice King had said at page 439, line 24:

There is a presumption.of law, albeit a

rebuttable presumption, contained in section 21 -

I can only explain His Honour's use of the words

"and no legal presumption" on the basis that he had

accepted the submission that the abalone authority

was not property bought by the partnership and that
section 21 really had no application.

My learned friend suggested that the case was put below on the basis that the abalone permit was

initially partnership property or required to be

brought to account but he said he did not have to

go that far and perhaps it was only the authority.

But in reality the submission of the plaintiff there

and in this Court is that there was some agreement

about common ownership of all property. In my

submission no such common understanding is really

established on the evidence. The schedule of
assets has been produced but they are all assets,

undoubtedly acquired by the parties after the

establishment of the partnership and out of the

partnership funds and did not, as it were, grow

from anything either party had before. And none

of those items of property,	mainly real
property, can in any way be equated with a licence

or a permit to pursue one's vocation.

In my submission for those reasons the appeal

which is limited to the fairly narrow ground of

appeal based upon section 21 should be dismissed.

MASON CJ: Thank you, Mr Lawson. Yes, Mr Williams?

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MR WILLIAMS:	Two matters by the way of reply.	My friend

says that we only rely upon section 21 of the

PARTNERSHIP ACT. The fact of the matter that the

grourids of appeal refer, on page 450 and 451,

to the PARTNERSHIP ACT, section 21:

and the law relating to the purchase

of property with partnership funds in

which event (in the absence of evidence

to the contrary) the fishing licence with

abalone authority endorsed should have been

regarded as partnership property.

(Continued on page 40)

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MR WILLIAMS (continuing):  The other matter that I would, ..

is that my friend says that the r.ock Lobster authority

and boat were brought to account but that the licences

that were paid for and authorities were not.

Now, the fact of the matter is that the authorities were brought to account with the

licences in the course of the trading statements of

the partners. They were simply outgoings brought to

account each year as a necessary adjunct to the

carrying on of the business. So far as the

acquisition of Amanda-K, the cray boat was concerned,
there was a lump sum paid for that authority and for

the boat and that the whole amount accordingly was

brought to account and it is only the differing

historical background that leads to them to be treated

in that way in the accounts .. They are the only two

matters I wish to mention, if the Court pleases.

MASON CJ:  Thank you, Mr Williams. The Court will consider

its decision in this matter and will adjourn until

10.15 am tomorrow in Canberra.

AT 12.09 PM THE MATTER WAS ADJOURNED SINE DIE

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