Parker v Parker - [2017] TASSC 37

[2017] TASSC 37

COURT: SUPREME COURT OF TASMANIA

CITATION: Parker v Parker [2017] TASSC 37

PARTIES: PARKER, Garth Leslie

as Executor of the Estate of the late Ira Leslie Parker
v
PARKER, Tony Edward
PARKER, Garth Leslie
as Executor of the Estate of the late Ira Leslie Parker
v
PARKER, Tony Edward
PARKER, Tony Edward
v
PARKER, Garth Leslie

FILE NOS:  61/2006, 381/2009 and 1057/2009
DELIVERED ON:  29 June 2017
DELIVERED AT:  Launceston
HEARING DATES:  30 and 31 August, 5 and 6 December 2016
JUDGMENT OF:  Tennent J

CATCHWORDS:

Partnership – Relationship between partners – Other matters - Partnership dissolved by death of one partner – Dispute as to what the assets of the partnership were as at the date of death – Assertion by surviving partner of pre-dissolution agreement to deal with partnership assets otherwise than in accordance with terms of partnership.

Partnership Act 1891 (Tas), ss 24, 25, 29, 43, 44.
Aust Dig Partnership [1031]

Partnership – Relationship between partners – Equitable remedies and Relief – Generally.
Aust Dig Partnership [1027]

REPRESENTATION:
Counsel:
             Counsel for Garth Parker:            S McElwaine SC
             Counsel for Tony Parker:                C Hobbs, R Baker
Solicitors:
             Solicitors for Garth Parker:        McGrath & Co
             Solicitors for Tony Parker:           Baker Wilson Lawyers

Judgment Number: [2017] TASSC 37
Number of paragraphs: 169

Serial No 37/2017
File Nos 61/2006, 381/2009, 1057/2009

GARTH LESLIE PARKER as Executor of the Estate of the late Ira Leslie Parker v TONY EDWARD PARKER
GARTH LESLIE PARKER as Executor of the Estate of the late Ira Leslie Parker v TONY EDWARD PARKER
TONY EDWARD PARKER v GARTH LESLIE PARKER

REASONS FOR JUDGMENT TENNENT J

29 June 2017

Tony Edward Parker (TP) and Garth Leslie Parker (GP) are brothers. They were born on 6 March 1950 and in May 1957 respectively. Their parents were Ira Leslie Parker (IP) and Zilla Aileen Parker (ZP). IP died intestate on 26 June 2003. Letters of administration were subsequently granted to GP. ZP died on 31 March 1999 leaving a will. In May 1999, there was a grant of probate in respect of ZP's estate to IP and ZP's brother. The entirety of the estate of ZP was left to GP. By reason of the intestacy arising on IP's death, GP has an interest in his estate. The principal issue in these proceedings is just what constitutes the estate of IP.

Pending proceedings between GP and TP

On 25 August 2006, GP commenced an action against TP in proceedings numbered 61/2006. In that action, he sought a declaration as to the existence of a partnership between IP and TP, and that that partnership was dissolved by the death of IP. He also sought an account of the dealings of the partnership, the assets and liabilities of the partnership and of profits derived since IP's death from what were formerly the assets of the partnership. He finally sought an order that the assets of the partnership be sold and that a receiver be appointed (the First Action).
On 11 May 2009, GP commenced a second action against TP in proceedings numbered 381/2009. By that action, GP sought a declaration that a farming property at Don was an asset of the partnership between IP and TP, an order for the sale of that property and consequential orders (the Second Action). The pleadings to which reference will most commonly be made will be the amended statement of claim of GP filed 3 July 2009 and the defence to that document filed by TP on 1 August 2016. That last pleading also contained a counterclaim and/or set-off.
On 17 December 2009, TP filed an originating application by which he sought, pursuant to the provisions of the Testators Family Maintenance Act 1912, provision out of the estate of IP (the TFM Action).
An order was made that all three proceedings be dealt with together. However, the evidence of TP was taken first, and in isolation from other evidence because of concerns about his health, at a time when the hearing generally was not otherwise ready to proceed.
At the conclusion of TP's evidence, a discussion occurred with counsel to determine what the Court was ultimately being asked to do. The parties agreed that what would be required in the first instance were findings in respect of the Second Action. If those findings were adverse to TP, then he would proceed with his TFM Action and orders would need to be made in the First Action. Any orders in either of those proceedings would be dependent upon the findings in the Second Action.
These reasons therefore relate to the Second Action and the pleadings in respect of it.

Issues in the proceedings

At the heart of all the proceedings between GP and TP is a farming property at Don. At the time IP died, he and TP were operating a business farming that property. They had been doing so together since 1971.
GP's case is that:
-     IP and TP operated a partnership from about 1971 to the date IP died styled "IL & TE Parker" (the Partnership).
-     Three parcels of real estate which make up the farming property at Don (the Real Estate) were an asset of the Partnership at the time IP died.
-     There were further assets of the Partnership as at the date IP died, being a National Australia Bank Account, an investment with Roberts Limited, an investment with Websters and plant and equipment.
-     The Partnership was dissolved by the death of IP on 26 June 2003.
-     There has never been a formal winding up of the Partnership as required by the Partnership Act 1891 (the Act).
GP seeks declarations as to what the assets of the Partnership were as at the date of the death of IP, and an account.
TP does not dispute that the Partnership existed, and that it was dissolved by the death of IP. He disputes that the assets identified by GP as being assets of the Partnership as at the date of IP's death were in fact assets of the Partnership at that time.
The principal case for TP is founded on certain underlying propositions, namely that:
- Essentially a partnership is a contractual arrangement.
- While in determining the rights and obligations of partners in a partnership regard may be had to the terms of the Act, if the parties have agreed to do something specifically with the assets or profits from the partnership, that may obviate the need to have regard to the Act.
In support of those underlying propositions, counsel for TP referred to the Act, ss 24 and 29, which provide as follows:
"24 Variation by consent of terms of partnership
The mutual rights and duties of partners, whether ascertained by agreement or defined by this Act, may be varied by the consent of all the partners, and such consent may be either express or inferred from a course of dealing.
29 Rules as to interests and duties of partners subject to special agreement
(1) The interest of partners in the partnership property and their rights and duties in relation to the partnership are to be determined, subject to any agreement expressed or implied between the partners, by the following rules:
(a) all the partners are entitled to share equally in the capital and profits of the business, and must contribute equally towards the losses, whether of capital or otherwise, sustained by the firm;
(b) the firm must indemnify every partner in respect of payments made and personal liabilities incurred by him or her –
(i) in the ordinary and proper conduct of the business of the firm; or
(ii) in or about anything necessarily done for the preservation of the business or property of the firm;
(c) a partner making, for the purpose of the partnership, any actual payment or advance beyond the amount of capital which he or she has agreed to subscribe, is entitled to interest at the rate of 6% per annum from the date of the payment or advance;
(d) a partner is not entitled, before the ascertainment of profits, to interest on the capital subscribed by him or her;
(e) every partner may take part in the management of the partnership business;
(f) no partner is to be entitled to remuneration for acting in the partnership business;
(g) no person may be introduced as a partner without the consent of all existing partners;
(h) any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners, but no change may be made in the nature of the partnership business without the consent of all existing partners;
(i) the partnership books are to be kept at the place of business of the partnership (or the principal place, if there is more than one), and every partner may, when he or she thinks fit, have access to and inspect and copy any of them."
Counsel for TP submitted that the case for TP essentially focused on agreements between IP and TP during IP's life and the clear intention of IP and TP arising from those agreements. He submitted that that intention can be clearly discerned from the evidence given by TP, much of which was unchallenged, the financial documents tendered and other exhibits, and, indeed, the entirety of the evidence, most of which was also unchallenged.
Counsel for TP also submitted that, if TP failed in his defence of GP's claim in the Second Action, then the Court should consider the pleaded counterclaim and/or set-off couched in equity. It was submitted that there was a common intention that IP's share in the property of the Partnership, which included the plant and equipment, would be gifted by IP upon his retirement to TP. It was submitted that common intention was formed back in the early 1970s when the Partnership commenced, and that TP had thereafter acted to his detriment in reliance on that common intention. He had worked within the Partnership for minimal return over many years, made significant personal and financial sacrifices, worked very long hours and personally undertaken substantial improvements, many of which were funded from his share of the profits. He thereby suffered significant detriment in reliance on this common intention. As a consequence it was submitted that IP held the ownership of the Real Estate on a constructive trust in favour of TP.

The Real Estate

The farming property at Don, the subject of the dispute in this matter, is comprised in three titles to adjoining parcels of land. These parcels are the Homestead Lot (comprised in Certificate of Title Volume 112945 Folio 1) containing an area of 16.17 hectares, Back Farm (comprised in Certificate of Title Volume 122030 Folio 1) containing an area of 26.29 hectares, and the Northern Lot (comprised in Certificate of Title Volume 10564 Folio 2) containing an area of 22.01 hectares.
The Homestead Lot was initially owned by Thomas Yaxley Parker, the great grandfather of GP and TP. In August 1920, he transferred his interest in that property to his son, Arthur Kimberley Parker, the grandfather of GP and TP. In March 1980, IP became the sole registered proprietor. The consideration for the transfer to him from his father, Arthur Kimberly Parker, was stated to be $90,000. In August 1999, TP became the registered proprietor of this parcel. The stated consideration in the transfer from IP to him was "natural love and affection".
The house in which TP and his wife have lived for many years, and continue to do so, is on this parcel of real estate, as are a second house called the "Pink House" and farm sheds and outbuildings.
The Northern Block was also originally owned by Thomas Yaxley Parker. In December 1932, he conveyed the title to Catherine Anne Parker, the wife of his son, Arthur Kimberley Parker, and the grandmother of GP and TP. In March 1980, IP became the sole registered proprietor of this block as a result of a transfer from Catherine Anne Parker. The stated consideration for the transfer was $87,000. In August 1999, this parcel was transferred by IP to TP who became the sole registered proprietor. The stated consideration for that transfer was "natural love and affection".
As to Back Farm, in August 1937, Arthur Kimberley Parker and Catherine Anne Parker became the registered proprietors of that block. In October 1960, Catherine Parker transferred a one- half interest as a tenant in common in that land to her son, IP. The result of that transfer was that IP and his father held the title as tenants in common in equal shares. The consideration for the transfer was stated to be "natural love and affection".
In December 1972, IP became the sole registered proprietor of this parcel. In August 1999, TP became the sole registered proprietor as a result of a transfer from IP. The stated consideration for that transfer was "natural love and affection".
In summary, IP became the registered proprietor of a one-half interest in Back Farm in 1960 and the sole registered proprietor in 1972. He became the sole registered proprietor of the Homestead Lot and the Northern Lot in March 1980.

The Partnership

There is no dispute that, from a date in 1971, IP and TP operated a farming business from the farming property at Don in partnership. TP admitted on the pleadings that the Partnership was dissolved by the death of IP in June 2003.
There was never a written partnership agreement between IP and TP. However, its existence, and the fact that the partners were equal partners, was clear from financial documents tendered on the trial. From the financial year ended 30 June 1972, partnership taxation returns were prepared and filed with the Australian Taxation Office for a partnership described as "IL and TE Parker". Copy returns for the Partnership for the years ended 30 June 1972, 1973, 1974, 1981, 1983, 1988, 1989, 1993, 1994, 1995 1996, 1997, 1998, 1999, 2000, 2001, 2002 and 2003 were before the Court. There were also financial statements prepared by accountants commencing in the 1990 financial year.
In the financial year ended 30 June 1974, the Partnership made a loss and that was distributed equally between the two partners. The profits were shared equally between IP and TP in the years ended 30 June 1988, 1989, 1990, 1991, 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002 and 2003.
The drawings, as opposed to a share of the profit, were unequal in the year ended 30 June 1999. In that year, IP drew about $3,700 more than TP. In the year ended 30 June 2001, TP drew a little over $14,000 more from the Partnership than IP. In the financial year ended 30 June 2002, TP's partner's capital account showed three entries. The first was the opening balance, the second was the share of profit and the third was an entry entitled "Salary undrawn" in the sum of $58,000. That entry had not appeared in the accounts for previous years. TP could not explain that entry or the fact that he drew $61,093 from the Partnership in that year while IP drew only $4,715. In the financial year ended 30 June 2003, the entry for TP's partner's capital account contained four entries. These were opening balance, share of profit, capital contributions and salary undrawn. The capital contributions were $5,000 and the salary undrawn was $60,000. TP then drew $57,438 while IP drew $289. TP was unable to explain the entries and there was no other evidence to explain them.
Bank statements for the Partnership account with the National Australia Bank were tendered on the trial as were some cheque butts relating to the same account. These showed IP was continuing to be paid money from the Partnership bank account in 2000 and 2001. An entry in February 2001 showed a payment of $4,000.
During the course of his evidence and in some pleadings, TP asserted a state of affairs which was different from that shown in the above records. For example, at par 12(b) of his defence, TP pleaded that IP:
"…verbally and expressly relinquished in favour of the Defendant [TP] his entitlement to an equal share in those funds [investments of the partnership] and to profits of the said partnership, pursuant to section 29 of the Partnership Act 1891 and generally."
TP asserted that this occurred at or around the time of the transfer of the Real Estate to him by IP in 1999. In the particulars with this pleading, TP said his father retired entirely from working on the farm in about July 1998 and then moved into a care facility. TP also asserted that IP later said to him that he did not want to take a share of the Partnership financial resources, and he was content to live off his savings. TP also asserted that from time to time if IP needed his bank balance topped up, TP would transfer funds to him.
Another example was in a further pleading at par 32 of TP's defence under the heading "Amended counter claim and/or setoff" to the effect that when IP transferred the Real Estate to TP he:
"…thereafter relinquished in favour of the Defendant his entitlement to an equal share in the funds and to the profits of the said partnership pursuant to section 29 of the Partnership Act 1891."
In his evidence, TP said IP, on an unidentified date, told him he only wanted some money to live on. TP also said that IP insisted that TP was doing the work on the farm and so he could use the money earned from the farm how he wanted to.
TP was cross-examined about the entries in various taxation returns and financial statements. In relation to his personal taxation return for the year ended 30 June 2000, TP agreed he signed that in July 2001 and that it showed a distribution of income from the Partnership for that year. It was put to him that no doubt in those circumstances, the Partnership was still continuing for the financial year ended 30 June 2000. TP responded, "Not in a true fashion, no". He did not explain what he meant by that.
TP was also taken to the Partnership financial statements for the year ended 30 June 2001. He acknowledged that both his and his father's signatures appeared. He was asked if he had read them before signing and responded, "I would've breezed over them". It was put to him then that whatever he did was enough to enable him to form a view that the documents represented a true and fair view of the state of affairs of the Partnership, and he responded, "Probably yes". It was then pointed out to TP that the partners' capital accounts in the documents for that year still recorded as a fact that he and IP were equal partners. He responded, "Yes, virtually equal", and then said "Only for taxation purposes".
It was abundantly clear from the cross-examination of TP that he was asserting one thing in his pleadings, but had from at least 1998 until after IP's death in June 2003 been signing, as true, financial statements which contradicted those assertions and lodging partnership and personal taxation returns which also contradicted those assertions.
There was no evidence of any act by either IP or TP prior to IP's death in June 2003 to dissolve the Partnership. As I have already said, TP admitted the Partnership was dissolved by IP's death. There was no notice given by IP to TP under the Act, s 31, to the effect that he proposed to determine the Partnership by retiring. Counsel for TP referred to the Act, s 29, in the context of IP relinquishing his interest in the assets and profits of the Partnership. I do not understand the reference to s 29 and it was never fully explained by counsel for TP. The only assumption I can make is it was intended to imply that IP and TP agreed to deal with Partnership funds and profits in a manner other than as equal partners.
Counsel for TP submitted to the Court that all the records of the Partnership referred to above could largely be ignored because they were really a mistake, and did not represent the true agreements and intentions of the partners. I do not accept that submission. There was no evidence from TP to that effect, and no evidence from the accountant who prepared most of the documents to that effect. The various financial statements and the taxation returns filed with the Australian Taxation Office over many years presented to the outside world a partnership with two equal partners at all times equally sharing the profits of that partnership.
I am satisfied in the circumstances that, notwithstanding the assertions by TP, the Partnership between him and his father continued until the death of IP on the basis that IP and TP were equal partners.

What were the assets of the Partnership?

The next question to be dealt with is, what were the assets of the Partnership? This requires a consideration of the situation up to the transfers of the Real Estate from IP to TP in or about August 1999, and the situation thereafter. It also requires, by reference to the pleadings, a consideration of the Real Estate discretely from other asserted assets.

The Real Estate – was it an asset of the Partnership, and, if so, did it cease to be one at any time prior to dissolution of the Partnership by the death of IP?

GP pleaded that, on or after the commencement of the Partnership, the real estate upon which its business was conducted was contributed to and became an asset of the Partnership. TP admitted that fact. However, from a practical point of view, that is unlikely to be correct because, as at 1971, neither IP nor TP had legal title to the whole of the relevant real estate which would have allowed a contribution to the Partnership to be made. I have proceeded on the basis that, as and when IP became registered proprietor of the various pieces of real estate, he contributed them to the Partnership and they became assets of the Partnership.
GP asserted at par 5 of his statement of claim that, by reason of the Real Estate having become an asset of the Partnership, IP ceased to have a beneficial interest in the property, and the extent of his interest was confined to his holding the property as trustee for the Partnership. In par 5 of his defence, TP denied that proposition and said further:
"…if the real estate formed part of the partnership assets, as asserted in paragraph 5 of the Amended Statement of Claim, the deceased and the Defendant each had a beneficial interest in the real estate in equal shares as equal members of the partnership and further, until in or about August/September 1999 the deceased was the registered proprietor of the said real estate pursuant to the Land Titles Act 1980."
That pleading by TP is confusing. On the one hand in par 4 of his defence, TP admits that the Real Estate was contributed to and became an asset of the Partnership, and in the next paragraph he appears to call into doubt that it was. He then deals with a concept different from that pleaded by GP, namely the nature of the interest partners have in partnership property generally, as opposed to the nature of IP's interest once the Real Estate became partnership property. In part however, what I refer to as confusion may arise from the use of terminology by counsel, particularly the term "beneficial interest".

What is the nature of a partner's interest in a partnership?

Counsel for TP referred to a number of authorities dealing with the nature of a partner's interest in partnership property. He referred to Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd (1974) 1931 CLR 321; Federal Commissioner of Taxation v Everett (1980) 143 CLR 440 (Everett's case No 1) and Connell v Bond Corporation Pty Ltd (1992) 8 WAR 352.
Counsel for TP extracted passages from Canny's case in his written submissions. He referred to the following statements by the court at 327-328:
"The nature of a partner's interest in the partnership property has often been explained. The partner's share in the partnership is not a title to specific property but a right to his proportion of the surplus after the realization of assets and the payment of debts and liabilities. However, it has always been accepted that a partner has an interest in every asset of the partnership and this interest has been universally described as a 'beneficial interest', notwithstanding its peculiar character. The assets of a partnership, individually and collectively, are described as partnership property (Partnership Act, 1892, as amended (NSW), s 20). This description acknowledges that they belong to the partnership, that is, to the members of the partnership.
In In re Fuller's Contract, Luxmore J (as he then was) said:
'… as between the partners, the partnership property must be dealt with in a particular way, but so far as all the rest of the world is concerned, there is no limitation on the interests of the partners; the partners have the beneficial interest in the partnership assets, which are held together as an undivided whole, but they respectively have undivided interests in them.'
It is significant that s 20(ii) of the Partnership Act, 1892, as amended (NSW), treats a partner as having a beneficial interest in real estate belonging to the partnership for in this respect no distinction can be drawn between the nature of a partner's interest in real estate and his interest in personal estate.
The appellant submitted that the nature of a partner's interest was analogous to that of a residuary legatee in an unadministered estate. There is some similarity between the two cases in that the residuary legatee and the partner each have the right to insist upon due administration, the former of the estate and the latter of the partnership assets and liabilities, and the precise entitlement of each must await the due course of administration. Nevertheless we think that the interest of the partner in an asset of the partnership is sui generis (cf Livingston v Commissioner of Stamp Duties (Q)). It is, as we have said, recognized as a beneficial interest.
As such it constitutes an equitable interest and is not a mere equity to set aside or rectify a transaction by means of a court order …." [Footnotes omitted.]
Counsel for TP submitted that the effect of the finding of the court in Canny's case was that, even though it only took effect in possession on dissolution of a partnership, each partner had a present beneficial interest in every asset of a partnership.
Counsel for TP also extracted passages from Everett's case No 1 at 448 and 450. He referred to one passage from the judgment of Barwick CJ, Stephen, Mason and Wilson JJ at 450 where their Honours said:
"Consequently, we are unable to agree with the appellant's submission, based on the dissenting judgment of Deane J., that the right to receive profits is separate from the partner's interest in the partnership as such. We do not doubt that a partner may enter into a contract or otherwise bind himself to deal with his future profits from the partnership so that others may acquire enforceable rights to those profits as and when they are derived. Whether he can sever his entitlement to receive future profits from his interest in the partnership so as to confer an immediate entitlement on an assignee with respect to those profits as distinct from assigning future profits and thereby binding those profits if and when they arise, is another question. It was answered in the negative by Woodhouse J. in Kelly v. Inland Revenue Commissioner (NZ):
'… it is clear enough that one partner's interest in the capital of a partnership is not something which can be quantified and assigned separately from the share in the partnership itself. During the continuance of the partnership a partner can assign all or part of his share in it and consequentially the right to prospective profits and any interest he may have in partnership capital. But such a share is not a thing separate from the share of another partner. It is a fractional interest in a surplus of assets over liabilities on a winding-up and a fractional interest in the future profits of the partnership business. Accordingly, "if A and B, being partners in equal shares, purport to exchange their shares one for another they accomplish nothing" (see Bolton's Case). If this be the position concerning a capital interest or the fractional share in the partnership a fortiori it must be the position in relation to shares in prospective partnership income.'
His Honour relied on the observations of Windeyer J in Bolton's Case, in support of this conclusion. In that case Windeyer J pointed out that a partner's share in a partnership 'is a fractional interest in a surplus of assets over liabilities on a winding up and in the future profits of the partnership business' - FTN.53. Earlier Windeyer J had said, 'During the continuance of the partnership all that he can assign and the assignee can get is a right to the prospective profits and a notional interest in the surplus of assets over liabilities upon a dissolution and winding up of the partnership'. Although these remarks were not expressly directed to the question which Woodhouse J answered, they tend to support the answer in that Windeyer J made no mention of the possibility of an assignment of the right to profits dissociated from the interest itself. The fundamental consideration, as we see it, is that the partner's fractional interest is an entire chose in action; it is capable of division by assignment into further fractions, but it is not capable of division by assignment so that the right to participate in partnership profits which is inherent in the interest is hived off from the rest of that interest. Consequently, a partner's entitlement to participate in profits is not separate and severable from the interest of the partner." [Footnotes omitted.]
Counsel emphasised one portion of that quote, and I have put it in bold, and submitted that much in this case depended on the import of what was there said.
Counsel for GP dealt with the same issue but by reference to Watson v Ralph (1982) 148 CLR 646, a decision of the High Court which post-dated both Canny's case and Everett's case No 1. In Watson v Ralph, the High Court dealt with a claim by the daughters of a deceased in relation to certain real estate. The legal title to the real estate was registered in the joint names of the deceased and her husband at the date of her death. However, it was property of a farming partnership operated by the deceased and her husband. The issue arose as to whether the deceased was free to dispose of the legal title she held in the real estate by her will. The court found that she was not. At 650, Gibbs CJ (with whom Mason, Aicken, Wilson and Brennan JJ agreed) said:
"The testatrix, at the time of her death, was neither the legal owner, nor the sole beneficial owner, of the freehold property at Whittlesea. The land was then part of the property of the partnership of which the testatrix and her husband were the members. The nature of a partner's interest in the assets of the partnership was described as follows by Kitto J in Livingston v Commissioner of Stamp Duties (Q) (8):
'That he has a beneficial interest, which the law will recognize and enforce, in every piece of property which belongs to the partnership is clearly established …; and none the less so because the nature of the interest is peculiar in that his share in the partnership, by virtue of which the interest in a given asset exists while the asset belongs to the partnership, consists not of a title to specific property but of a right to a proportion of the surplus after the realization of the assets and payment of the debts and liabilities of the partnership …; that is to say, not a "definite" share or interest in a particular asset, no "right to any part" of it, but an interest which "can be finally ascertained only when the liquidation has been completed, and … consists of his share of the surplus"'."
It must follow from the authorities to which reference has been made that, at least until the transfer in 1999 of the legal title to the Real Estate by IP to TP, as from the date the Real Estate became partnership property, IP held his legal title in the Real Estate in trust for himself and TP as the members of the Partnership, and each had an equitable interest in the Real Estate which consisted "not of a title to specific property but of a right to a proportion of the surplus after the realization of the assets and payment of the debts and liabilities of the partnership". Immediately prior to the 1999 transfers therefore, IP held the legal title to the Real Estate in trust for the Partnership, and neither he nor TP had any defined title to the Real Estate.

Returning to the question of the status of the Real Estate post August/September 1999

The opening words of par 7 in TP's defence asserted that, in or about August/September 1999, IP intended that, by the transfer of the legal title to the Real Estate to TP, TP would become the "sole beneficial owner" of that real estate. Subparagraph (a) then continued with the words, "such transfer being effective at the date of registration of the transfers under the Land Titles Act 1980". It must be assumed this assertion should be read in conjunction with that at par 9 which refers to the indefeasibility of title provision in s 40 of that Act.
The assertion in the preamble to par 7, given the way TP's case was conducted, must be read to mean that what IP intended to transfer was the whole of the legal and beneficial title to the Real Estate unencumbered by any trust, and not IP's beneficial and equitable interest in that real estate as a partner in the Partnership which held the property. Counsel for GP did not dispute that IP may very well have intended to transfer such a title as asserted. However, he submitted that IP could not do that because of the status of his interest in the Real Estate immediately prior to the transfer.
Counsel for TP relied, in support of his contention at par 7(a), on basically two arguments. One related to indefeasibility of title, and the other related to what was asserted to be an agreement between IP and TP and their intention at the time the transfer of the Real Estate occurred. As to the second of those, counsel for TP submitted that it was open to IP and TP, absent a dissolution of their partnership, to reach an agreement which had the effect of changing the status of assets of the Partnership. He submitted that that is what occurred in 1999. The partners agreed that IP would transfer his interest in the Real Estate to TP unencumbered by any trust which might have burdened it as partnership property.
In support of this contention, counsel for TP submitted that the general principles outlined in Everett's case No 1 were qualified by a later statement of principle in the same year in United Builders Pty Ltd v Mutual Acceptance Ltd (1980) 144 CLR 673 by Stephen J at 680. The passage relied upon was in the following terms:
"In the present case, however, there is no assignee, a stranger to the partnership, threatening to intrude into its affairs. Instead it is the only two members of the partnership who have agreed together concerning the partnership rights of one of them. To give precise effect to their agreement would neither offend against general principles of partnership law nor against s 34 of the Queensland legislation. Consistently with general principle, that section looks only to partnerships in which, in addition to the assigning partner and the assignee, there are 'other partners' capable of being affected by the intruding assignee. It is in protection of their interests that the section provides that 'as against the other partners' the assignment shall be of quite limited effect so long as the partnership subsists. It has no application to the present case, where there are no such other partners."
Counsel submitted that the section referred to in that extract was the equivalent of the Act, s 36. Section 36 relevantly provides:
"36   Rights of assignee of share in partnership
(1)     An assignment by any partner of his share in the partnership, either absolute or by way of mortgage or redeemable charge, does not, as against the other partners, entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership business or affairs, or to require any accounts of the partnership transactions, or to inspect the partnership books, but entitles the assignee only to receive the share of profits to which the assigning partner would otherwise be entitled, and the assignee must accept the account of profits agreed to by the partners.
(2)     In the case of the dissolution of the partnership, whether as respects all the partners or as respects the assigning partner, the assignee is entitled to receive the share of the partnership assets to which the assigning partner is entitled as between himself and the other partners, and for the purpose of ascertaining that share to an account as from the date of the dissolution."
With respect, counsel for TP has, in my view, taken the remarks of Stephen J in United Builders out of context. That case dealt with a situation where there were two partners in a partnership. One gave a charge to the other over its right, title and interest in the partnership. It did not involve a situation where one of two partners purported to deal with a specific asset of the partnership. Further, the Act, s 36, deals with an assignment of an interest in a partnership and not an assignment of some description of an asset of a partnership.
Counsel for TP also referred to Federal Commissioner of Taxation v Everett 21 ALR 625 (Everett's case No 2) and remarks by Deane J at 635. His Honour said (absent footnotes):
"As between the partners, the rights and duties of a member of a partnership are primarily contractual. They flow from the express or implied terms of the particular partnership agreement. Questions of illegality aside, any implication, by statute or rule of law, of provisions into the relationship between partners is ordinarily subject to any contrary intention appearing from the agreement between the partners. The rights of a member of a partnership will commonly (but not necessarily) include rights relating to any partnership assets which may exist. They will almost invariably (but, conceivably, not necessarily) include rights relating to any partnership profits which may be earned.
In the absence of agreement to the contrary, a member of a partnership has no definite or separate share or interest in any particular partnership receipt or other item of partnership property. He has an undivided beneficial interest in the totality of partnership assets (including receipts and choses in action) and is entitled to insist that they be applied for legitimate purposes of the partnership. The precise content of that undivided beneficial interest will be affected by any separate right of the partner to share in any partnership profits or in any distribution of partnership assets in the sense that the distribution of partnership profits and assets, in accordance with the provisions of the partnership contract, is a legitimate purpose of the partnership. If the partnership agreement so provides or all the partners so agree, there is no general rule of law which prevents the partners dividing or applying partnership receipts and other assets at any time or in such manner as they see fit. In the absence of such provision or consensus, however, a partner's separate interest in relation to partnership assets is to share, either equally or in such other proportion as the partners may agree, in any surplus remaining, upon a dissolution, after the realization of the assets and payment of the debts and liabilities of the partnership."
Counsel for TP acknowledged that Deane J was in dissent as to the issue central to the case, but submitted his remarks had been referred to with approval in a decision of the Queensland Court of Appeal in Bunnings Group Ltd v Asden Developments Pty Ltd & Others [2013] QCA 347, [2014] 1 Qd R 493 at [54]. In that case, Margaret Wilson J, with whom Muir and Gotterson JJA agreed, said at [54]:
"In Federal Commissioner of Taxation v Everett Deane J considered the nature of a partner's interests in partnership assets in some detail. His Honour said in that regard – … ".
Her Honour then repeated the remarks of Deane J extracted in the previous paragraph.

While Margaret Wilson J repeated the remarks of Deane J above, it can hardly be said in the context of how they were being considered that they were referred to with approval. That part of the comments of Deane J which were emphasised by counsel for TP in his submissions formed no part of the decision of Margaret Wilson J, and were simply referred to in the context of the nature of a partner's interest in partnership property generally. What also should be noted is that, in both the decisions of the High Court and the Full Court of the Federal Court in the Everett matters, the courts were dealing with an assignment of a partner's interest in a partnership, and not specific assets. The remarks of Deane J were also made in the context of a dissenting judgment upon which the Federal Commissioner of Taxation unsuccessfully relied in the High Court.
Counsel for TP also referred to Hancock Prospecting Pty Ltd v WrightProspecting Pty Ltd [2012] WASCA 216, 45 WAR 296. He submitted that a statement of principle in similar terms to that stated by Deane J above appeared at [42] to [45] where McClure P, with whom Newnes JA and Le Miere J agreed, said:
"42 Partners are not entitled in their individual capacity to exercise proprietary rights over any partnership asset: Re Fuller's Contract [1933] Ch 652, 656; Inland Revenue Commissioners v Gray [1994] STC 360, 377. As a consequence, the interest of a partner in an asset of the partnership is characterised as equitable, sui generis and of a non-specific kind: Canny Gabriel (328). Each partner has an undivided interest in the whole of the assets of the partnership. The interest of a partner in partnership assets is not a fixed proportion of each item nor is it an immediately ascertainable quantity of the item; it is an indefinite and fluctuating interest: Sharp v Union Trustee Co of Australia Ltd [1944] HCA 35; (1944) 69 CLR 539, 551; Livingston v Commissioner of Stamp Duties (Qld) [1960] HCA 94; (1960) 107 CLR 411, 453; Canny Gabriel (328).
43 The mechanism by which partnership property is converted into the separate property of one of the partners (whether by way of transfer, release, surrender or otherwise) was not fully explored at trial or in the appeal. However, it was accepted that the partners could, by agreement, alter the status of partnership property. As Lord Lindley explained:
It is competent for partners by agreement amongst themselves to convert that which was partnership property into the separate property of an individual, or vice versa. And the nature of the property may be thus altered by any agreement to that effect ... but so long as the agreement is dependent on an unperformed condition, so long will the ownership of the property remain unchanged (RI Banks, Lindley & Banks on Partnership (2010) [18-44]).
44 Lord Lindley speaks of the 'conversion' of partnership property into separate property and the 'alteration of its nature' by agreement. The terms 'transfer', 'assign' and 'dispose of' are not used. As to which, see Varley v Coppard (1872) 7 CP 505; Bristol Corporation v Westcott (1879) 12 Ch D 461; Langton v Henson (1905) 92 LT 805; Burton v Camden LBC [2000] UKHL 8; [2000] 2 AC 399; Cyril Henschke [28] - [29].
45 However, the trial and the appeal were conducted on the basis that cl 4 contemplated a transfer in the technical sense. Accordingly, I will proceed on the basis that there may (not must) be multiple aspects, how and in which order they occur being a matter of construction. The aspects are:
conversion of the partnership property to the personal property of the partners;
transfer of equitable ownership;
transfer of legal ownership."
Counsel for TP relied on the quoted remarks of Lord Lindley. Hancock's case dealt with a partnership agreement which contained lists of what had been separately held assets of the partners and allowed a partner to give notice in effect to take an asset back out. The heart of the issue was described as being whether the exercise of such an entitlement contravened prohibitions against transferring or disposing of assets without the consent of a nominated person. The above comments by McClure P were made in the context of that issue, namely a specific provision in a partnership agreement. Further, Lord Lindley's statement, while supporting in general terms the ability of partners to reach an agreement to deal with individual partnership assets, qualifies the statement by the words, "but so long as the agreement is dependent on an unperformed condition, so long will the ownership of the property remain unchanged".
Counsel for TP referred to further statements by McClure P in Hancock's case, appearing at [126] and [130]-[131]. McClure P said:
"126 I have concluded that the Temporary Reserves are not 'land'. They are legal choses in action. Prior to the enactment of the provision now contained in s 20 of the PLA, legal choses in action were only assignable in equity. An 'assignment' is the immediate transfer of an existing proprietary right, vested or contingent, from the assignor to the assignee: Norman v Federal Commissioner of Taxation [1963] HCA 21; (1963) 109 CLR 9, 26 (Windeyer J). For present purposes, the term 'transfer' can be regarded as synonymous with 'assignment'.
…
130 The Temporary Reserves are legal choses in action and partnership property. As explained earlier, each partner has a sui generis non-specific equitable interest in the Temporary Reserves (and an equitable chose in action). Section 20 of the PLA also applies to the assignment of an equitable interest (Federal Commissioner of Taxation v Everett [1980] HCA 6; (1980) 143 CLR 440, 447) but is not the only avenue for effecting such an assignment. An equitable assignment of an equitable interest is a 'disposition' and must be in writing: PLA, s 34(1)(c). Otherwise the only requirements for an immediate equitable assignment of equitable property is that there be an intention to assign and for the subject matter to be identifiable: Norman v Federal Commissioner of Taxation (30).
131 An agreement to assign an equitable interest in the future requires consideration: Norman v Federal Commissioner of Taxation (31). If the consideration is executed, there will be an equitable assignment. If the consideration is not executed and the contract is of a kind of which specific performance of the obligation to transfer would ordinarily in due course be ordered, the assignee has conditional and defeasible beneficial ownership of the property. As with equitable ownership of legal property, the balance of authority suggests that the mechanism by which that is achieved is by the imposition of a constructive trust: Halloran v Minister Administering National Parks and Wildlife Act1974 [2006] HCA 3; (2006) 229 CLR 545 [72] - [73]; Oughtred v Inland Revenue Commissioners [1959] UKHL 3; [1960] 1 AC 206; Central Trust & Safe Deposit Co v Snider [1916] 1 AC 266, 271 - 272; Meagher, Heydon & Leeming, Meagher, Gummow & Lehane's Equity Doctrines & Remedies (2002) [7-195]."
Counsel for TP submitted, in reliance on the above statements:
"Thus in the circumstances referred to in [130], no consideration is required, but in the circumstances referred to in [131], valuable consideration is required.
Thus, for the purposes of the assignment the subject of the pleading in paragraph 7(a) of the Amended Defence, no consideration is required, the documentation having stated that the transfer of each of the three (3) parcels of real estate by Ira Parker to Tony Parker was in consideration for natural love and affection." [Footnote omitted.]
The pleading in par 7(a) of TP's amended defence does not contain an assertion that there was an assignment of an equitable interest. It asserted a transfer of the legal interest. It would not seem, in the circumstances, that the principles referred to above are relevant to that particular pleading.
Later in his submissions however, summarising his contentions in relation to the pleading advanced in par 7(a) of the amended defence, counsel for TP submitted that the statements of principle in the cases to which he referred, unequivocally supported that pleading. That summary of contentions was as follows:
"оthat Ira Parker and Tony Parker were the only partners in the partnership IL and TE Parker;
оthat prior to August/September 1999 Ira Parker held legal title to the real estate;
оthat Tony Parker agrees that the real estate formed part of the partnership property until August/September 1999;
оthat, in consequence, Ira Parker held the legal title in trust for the partnership as beneficial//proprietary/equitable owner;
оthat, as partners, Tony Parker and Ira Parker each held a 50% beneficial/proprietary/equitable interest in the real estate, which interest was capable of being assigned by agreement as between the partners;
оthat, by agreement, in August/September 1999 Ira Parker transferred his right, title and interest in the real estate by conveying the titles to Tony Parker;
оthat, in consequence, Tony Parker became the registered owner pursuant to the Lands Titles Act 1980;
оthat the beneficial/proprietary/equitable interest held by Tony Parker was also thereby enlarged from 50% to 100%
оthat the legal title merged with the 100% beneficial/proprietary/equitable interest held by Tony Parker – so that Tony Parker became absolute owner;
оthat the title held by Tony Parker as registered proprietor is indefeasible pursuant to section 40 of the Lands Titles Act 1980; and
оthat, accordingly, the partnership and Ira Parker thereby ceased to have any beneficial interest in the real estate, and hence, the Plaintiff as Administrator of the Estate of Ira Parker has no valid claim."
The difficulty with these submissions is that counsel for TP equates an undefined equitable or beneficial interest a partner has in each and every asset of a partnership to a defined interest in each asset capable of being transferred.
Immediately prior to the transfer of the legal title to the Real Estate, IP had an equitable interest in every asset of the Partnership which included the Real Estate. To properly characterise that interest, regard should be had to the words of Kitto J in Livingston's case. They are already extracted at [45] of these reasons, but are worth repeating. His Honour said:
"That he has a beneficial interest, which the law will recognize and enforce, in every piece of property which belongs to the partnership is clearly established …; and none the less so because the nature of the interest is peculiar in that his share in the partnership, by virtue of which the interest in a given asset exists while the asset belongs to the partnership, consists not of a title to specific property but of a right to a proportion of the surplus after the realization of the assets and payment of the debts and liabilities of the partnership …; that is to say, not a 'definite' share or interest in a particular asset, no 'right to any part' of it, but an interest which 'can be finally ascertained only when the liquidation has been completed, and … consists of his share of the surplus'."
In the matter of Watson v Ralph where the quote appears, the court found that a testatrix, though remaining the registered owner of a half interest in a piece of real estate, had no power to dispose of her legal title to that property because the real estate was partnership property.
In the present case, TP asserts at par 7(a) of his defence that IP transferred his right, title and interest in the Real Estate to TP with the intention that such transfer would be immediately effective upon registration. That claim must fail irrespective of any intention IP may have had because of the nature of IP's right, title and interest in the Real Estate. That right, title and interest was no longer a right to transfer an unencumbered legal and beneficial interest. The only right title or interest IP had was an equitable interest in the Real Estate, arising from his being a partner in a Partnership whose property the Real Estate was. IP did not have sufficient interest in the Real Estate to transfer the legal and beneficial title to TP.
Counsel for TP further submitted that partners could agree to divest from a partnership property a particular asset whether with or without valuable consideration. It was the clear intention of IP and TP that this is what they would do in relation to their Partnership. What therefore does the evidence say about an intention of the partners to remove the Real Estate from the pool of partnership property?
I have already referred to financial statements for the Partnership which were tendered on the trial, starting with those for the financial year ended 30 June 1990. In the financial statements for that year, the fixed assets of the Partnership were shown as:
Freehold land and buildings $200,000
Plant and equipment less depreciation $ 8,154
$208,154
It was accepted on the trial that, notwithstanding that the freehold land and buildings were not specifically identified, the "Freehold land and buildings" referred to was the three parcels of real estate described above and the buildings on them.
In the financial years ended 30 June 1991, 1993, 1994, 1995 and 1996, the same item, "Freehold land and buildings $200,000" appeared in the Partnership financial statements. In the year ended 30 June 1997, the wording of the entry changed to "Property, Plant and Equipment". The total for those items was recorded as $218,499. The same entry appeared in the 1998 accounts with a value of $214,393. In the financial year ended 30 June 1999, the entry in the financial statements reverted to "Freehold land and buildings $200,000". The same entry appeared in the Partnership financial statements for the years ended 30 June 2000, 2001 and 2002.
In the Partnership financial statements for the year ended 30 June 2002, the total proprietorship in the Partnership was shown as $260,517 as at the end of that year. The value of the Real Estate formed a large part of that figure. In the financial statements for the year ended 30 June 2003, the Partnership proprietorship at the commencement of that financial year (that is at 1 July 2002) was shown as $70,256. There was no reference to any real estate in the 2003 Partnership financial statements. The accountant who prepared the financial statements was not called to give evidence, and it would be fair to say that TP was unable to give any explanation for matters generally put to him about entries in the financial statements or taxation returns over the years.
Financial statements in each year show, not only the position at the end of the year to which the statements relate, but also the position as it was as at the same date in the previous year. If therefore statements for consecutive years are examined, the figure for the end of any particular financial year should be duplicated in the following year's statements. In the case of the financial statements for the Partnership for the 2002 and 2003 years, the end figure for 2002 was $260,517 which should have again appeared in the 2003 financial statements. Instead, the 2003 statements showed the end figure for 2002 as being $70,256. IP's death on 26 June 2003 could not have accounted for this change. There was no explanation otherwise for why this change had occurred.
TP signed off on the 2003 financial statements on 22 April 2004. In doing so, he signed a statement to the following effect:
"In the opinion of the partners the accompanying balance sheet is drawn up so as to give a true and fair view of the state of affairs of the partnership as at 30 June 2003 and the accompanying profit and loss statement is drawn up so as to give a true and fair view of the results of the partnership for the year ended 30^th June 2003."
The statements were prepared by an accountant, Neil Wilkinson, who had also prepared those for the previous year. There was a disclaimer by him at the end of the accounts which said:
"We have prepared the accompanying Balance Sheet as at 30^th June 2003 and profit and loss for the year ended (the accounts) from the books and records of IL & TE Parker ('our client') and other information provided to us at the request of and exclusively for the use and benefit of our client.
Under the terms of our engagement we have not audited the accounting records of our client or the accounts.
Accordingly, we express no opinion on whether they present a true and fair view of the position of the business or of the year's trading and no warranty of accuracy or reliability is given. Neither the firm or any member or employee of the first undertakes responsibility in any way whatsoever to any person (other than our client) in respect of the accounts, including any errors or omissions therein however caused."
Mr Wilkinson's signature appears below that disclaimer, also with the date 22 April 2004. As I have said, Mr Wilkinson was not called to give evidence to perhaps explain how the content of the various statements came to be as they were.
The Partnership taxation returns and financial statements referred to above need to be considered in the context of personal taxation returns for TP and financial statements prepared by the accountant, Neil Wilkinson, for a separate entity in which TP was operating as a sole trader, initially, it seems, in parallel to the Partnership business.
The financial statements of TP for the year ended 30 June 2000 show TP as earning income from the Partnership and from the separate farming enterprise he appeared to be conducting alone. The fixed assets of that separate enterprise totalled $799, and were described as plant and equipment less depreciation. The same entry existed at the commencement of that financial year save that the value of the plant and equipment was a little higher. Despite TP's assertion to the effect that he was the absolute owner of the Real Estate from the date of its transfer to him in August/September 1999, there is no record in his personal accounts of any real estate. The Real Estate remained however in the Partnership accounts. There were no financial statements for the year ended 30 June 2001.
In the financial statements of TP for the year ended 30 June 2002 relating to this separate enterprise, the fixed assets were again shown as plant and equipment less depreciation, the value then being $1,787. There is no reference to any real estate. In the financial statements for the year ended 30 June 2003, there was a dramatic change in the fixed assets of this separate enterprise. Those financial statements record the fixed assets as at 30 June 2002, contrary to what the statements for that year actually show, not only plant and equipment less depreciation, but also an item described as, "Freehold Land & Buildings" with a value of $200,000. The same item appears as at 30 June 2003. The same entry continues to be reflected in the financial statements for TP for the years ended 30 June 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014 and 2015.
The financial statements relating to TP alone for the year ended 30 June 2003 and the financial statements for the Partnership for the same year, both prepared by the same accountant, have, not only an altered figure for the fixed assets of each entity as at the end of the 2002 year, but also the movement of the same real estate as a fixed asset from one entity to the other without explanation.
A number of taxation returns for TP were also tendered on the trial. TP's taxation return for the year ended 30 June 2000 shows income from the Partnership and also on his own account. It discloses no separately held real estate. The 2002 personal return reflects the same position. The 2003 return also shows income from both sources, but that one shows real estate held by TP. These returns were prepared by the same accountant and it must be inferred were drawn to reflect the changed figures in the financial statements.

TP was cross-examined about the status of the Real Estate. He agreed that in 1999 his father agreed to give him the Real Estate and that, from then, he would have been free to do with it as he wanted. He also agreed that he and IP had no discussions about the status of the Real Estate once it was transferred. He agreed the Real Estate was a Partnership asset at least until the transfer of the titles to him.
TP agreed that anything which happened to affect the Partnership in August/September 1999 would have to be reflected for tax purposes in the accounts for the year ended 30 June 2000. He also agreed that, from his point of view, the transfer of the Real Estate was a significant event because he had been concerned that if it was not done, he might not end up with what he considered a fair share of family assets. He was the one who instructed solicitors to prepare the documents to effect the transfers. His father had no contact with those solicitors.
After that evidence, TP was referred to the Partnership financial statements for the year ended 30 June 2000. He agreed he and his father signed those accounts in July 2001 and that, at that time, he signed the statements to the effect the material in those statements was a true reflection of the Partnership. He agreed that, as at July 2001, in his mind he had no doubt the Real Estate was his.
TP was subsequently referred to various financial statements and taxation returns. He displayed an unwillingness to acknowledge what they plainly showed, and when pressed, responded on a number of occasions that he could not remember. He agreed that the Partnership did not pay him rent for its use of the land post-transfer and that he did not seek that.
Counsel for TP submitted that it mattered not that the financial accounts of the Partnership for the years ended 30 June 2000 and 2002 continued to record the Real Estate as an asset of the Partnership with an equal division of capital accounts. He submitted that a failure to "rectify" the accounts was clearly an oversight/omission and did not detract from that which the partners intended and agreed. He submitted that the accounts were ultimately rectified in the year ended 30 June 2003 to reflect the intention and agreement of the partners.
With respect, I do not accept those submissions. There was no evidence from TP or the accountant who prepared all the documents that the accounts from 2000 to 2002 contained mistakes or omissions which were "rectified" or needed to be rectified in the 2003 year. Indeed it would be fair to say that TP had little idea of the niceties of what was contained in any of the statements and taxation returns, and seemed to hold a view that a person could assert a state of affairs to the Australian Taxation Office which state of affairs was not actually true notwithstanding the person said it was.
Counsel for TP in his submissions suggested that it was inappropriate for it to be suggested that TP may have been somehow dishonest in the way taxation returns and financial statements were prepared because, counsel submitted, it frequently happened that husbands and wives split income from a partnership where in reality only one partner earned the income. That is not this case. This is a case where in every sense of the word there was a "true" partnership between IP and TP with an equal sharing of profits. What TP suggests is that he was entitled to continue preparing documents reflecting that situation, even though the parties to the Partnership had agreed that their legal entitlements were otherwise. That is an entirely different scenario.
At no stage prior to the death of IP was any step taken as far as the financial statements and taxation returns of the Partnership and TP were concerned to evidence any asserted agreement to remove the Real Estate from the pool of Partnership assets. These records continued to show that the Real Estate was a Partnership asset, and that IP and TP were each entitled to share equally in the income derived from the use of that real estate. IP and TP could have dissolved the Partnership and dealt with the Real Estate as they did. Had they done so, this dispute would not be before the Court. It can only be assumed that in their haste to get the deed done, they did not pause to think the process through or obtain appropriate advice.
It is clear from the evidence that IP sought no legal advice about the transfers of title. TP went to see a solicitor and arranged for the documents to be drawn and took them to his father to sign. The impetus for the move seems to have been twofold. Firstly, there was the death of ZP leaving a will by which she left the entirety of her estate to GP. The second matter was the move of IP into nursing home care and the wish to get him a pension and perhaps reduced fees in the nursing home. Against that background the transfers were effected. There was no discussion between IP and TP, prior to this occurring, about what the status of the land was and perhaps how that status might have been affected by the transfers.
I do not accept that IP and TP formed a clear intention, prior to the transfers of the Real Estate, to change the status of the Real Estate from being an asset of the Partnership with the associated trust status to being an asset of TP alone unencumbered by any trust, simply because they had no understanding of the legal implications of what they were trying to do.

Does the concept of indefeasibility of title assist TP?

Counsel for TP provided lengthy submissions as to the impact of indefeasibility of title on TP's case, and why it prevented any claim by IP's estate that TP held any part of the Real Estate in trust. With respect, none of those assist TP. The conclusion I have reached is that up to the transfer of the Real Estate in August/September 1999, IP held the real property upon trust for the Partnership. While he still held the legal title, it was subject to a trust in favour of the Partnership by reference to the Act, s 25. That relevantly provided:
"(1) 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.
(2) The legal estate or interest in any land which belongs to the partnership shall devolve according to the nature and tenure thereof and the general rules of law thereto applicable, but in trust, as far as necessary, for the persons beneficially interested in the land under this section."
Each of the partners, prior to transfer, had an equitable interest in the Real Estate, not precisely defined, until such time as the Partnership was dissolved. IP had an obligation to hold his legal title in trust for the Partnership. As counsel for GP pointed out, it is well established that the indefeasibility provisions of the Land Titles Act do not relieve a registered proprietor of land under that Act of their own personal obligations; see Balani Pty Ltd v Gunns Limited [2011] FCAFC 153 at [27].
In this case, those provisions did not relieve IP of his obligation to hold his legal title upon trust for the Partnership. TP, when he became registered proprietor of the Real Estate, held it subject to the same trust pending a dissolution of the Partnership. He cannot rely on the indefeasibility provisions to defeat that trust.

TP's alternative pleading - par 7(b) of amended defence

As to the pleading in par 7(b), it was submitted that was consistent with principles extracted from Everett's case No 1, set out at [43] of these reasons. That alternative pleading was summarised as follows by counsel for TP:
"оthat, if after the transfer of his right, title and interest in the real estate by Ira Parker to Tony Parker in August/September 1999, the real estate continued, notwithstanding the transfer of titles, to be partnership property;
оthen, it is accepted that Tony Parker held the legal title in trust for the partnership;
оthat Ira Parker and Tony Parker, as partners, each continued to hold a 50% beneficial/proprietary/equitable interest in the real estate;
оthat, in consequence of the transfer of his right, title and interest in the real estate by Ira Parker to Tony Parker in August/September 1999, Ira Parker, during the continuance of the partnership, held his 50% beneficial/proprietary/equitable interest in trust for Tony Parker;
оthat upon dissolution of the partnership, coinciding with the death of Ira Parker on 26^th June 2003, the partnership ceased to exist;
оthat the 50% beneficial/proprietary/equitable interest formerly held by Ira Parker in the real estate in trust of Tony Parker merged with the 50% beneficial/proprietary/equitable interest already held by Tony Parker, so as to make him the 100% beneficial owner;
оthat, on dissolution of the partnership, as the real estate formed part of the excess of assets over liabilities owed to creditors, the legal title and 100% beneficial/proprietary/equitable interest held by Tony Parker merged, so as to make Tony Parker absolute owner."
It was submitted that the financial accounts of the Partnership as at 30 June 2003 made it clear there was a surplus of assets over liabilities which exceeded the value of the Real Estate.
Counsel for TP also submitted there was further support for the propositions in the decision of Brinsden J in Cameron v Murdoch [1983] WAR 321. In that case, Brinsden J dealt with a very complicated intra-family dispute about rural property which effectively arose from failures by certain family members over many years to properly finalise deceased estates. One of the disputes required the court to determine whether a particular piece of real estate was property of a partnership, notwithstanding the legal title. The legal title was vested in one person who died and who, by his will, purported to dispose of the real estate. Brinsden J found that the real estate was property of a partnership and not that of the registered owner. The complicating factor in the dispute was that the partnership referred to was one the deceased had been a partner in with his brother and father. His father had died many years before and the deceased and his brother simply continued operating the business of the original partnership utilising the same partnership assets without any accounting to the estate of their father. The father had died intestate and the deceased, his brother and a number of siblings were entitled to share in their father's estate on the intestacy.
Having determined that the real estate was an asset of the original partnership, Brinsden J determined that the devise of the real estate in the deceased's will was effective to the extent of the whole of the deceased's interest in the real estate, whether as beneficiary under the estate of his father or through his interest in the partnership. The deceased could not however devise the whole of the legal title he held. His Honour said at 343:
"In Sharp v Union Trustee Co of Australia Ltd (1944) 69 CLR 539, Rich J at 551 described the interest of a partner as being a proprietary interest in each and every item, but the interest was not a fixed proportion of each item nor an immediately ascertainable quantity of the item being an indefinite and fluctuating interest which at any given moment is in proportion to his share in the ultimate surplus coming to him if at that moment the partnership were wound up and its accounts taken. As at the date of Jack's death his interest in the former partnership which was dissolved as at the date of James' death was then no longer an indefinite and fluctuating interest, but had become one third of the value of the total assets on taking final accounts there being no debts of which I am aware other than debts necessarily incurred in the taking of the final accounts. It was a significant point in the decision of Neville J in Re Holland that the partnership was solvent and the other partnership property not the subject of the bequest was more than enough to clear the partnership debts. So far as the interest of Jack in the land is through his interest as a beneficiary in the estate of his father, the Privy Council in Commissioner of Stamp Duties v Livingston [1965] AC 694 at 710 pointed out as an undoubted rule that the interest of a person entitled to a distributive share of intestacy is transmissible, even though he dies in the course of the executor's year, and at 711 approved Viscount Finlay in Dr Barnardo's Homes v Special Income Tax Commissioners [1921] 2 AC 1 when his Lordship said that the legatee of a share in the residue has no interest in any of the property of the testator until the residue has been ascertained. Viscount Cave in the same case also made a similar remark though distinguishing that before the residue has been ascertained the residuary beneficiary had no property in any specific investment forming part of the estate. In this particular case, in my view, the residue has been ascertained, or sufficiently ascertained as at the date of death of Jack, so as to give him an interest in specific assets."
The case was the subject of an appeal to the Privy Council in Cameron v Murdoch (1986) 60 ALJR 280. In relation to this issue, the court declined to interfere with Brinsden J's findings confirming that the deceased had a beneficial interest in the real estate, which was a combination of his share in the original partnership property and a further interest as beneficiary under his father's estate, and that the devise in his will was effective to pass that interest.
Counsel for TP appears to rely on the statements made in Cameron v Murdoch at first instance and on appeal as support for the proposition that the consequence of the transfer by IP of the legal title was that IP held his 50% beneficial interest in the Real Estate arising from his position as a partner in the Partnership in trust for TP. With respect, I am unable to see how that conclusion flows from Cameron's case.
The case raised by the pleadings in subpar 7(b), in my view, cannot succeed. It is again predicated on an assumption that the beneficial interest a partner may have in a particular asset of a partnership is a defined interest in that asset capable of being assigned independently of a partner's interest generally in his or her interest in a partnership and thereafter held in trust for someone. It is also predicated on an argument that what IP intended when he transferred the legal title to the Real Estate was to transfer his beneficial interest as a partner and to create a trust. The evidence simply does not support that. What IP intended was to transfer legal and beneficial title. There was no evidence he intended to create any sort of trust in favour of TP, and, in any event, he could not do so as a consequence of the trust created by the Act which already bound him.
As to the pleading in par 7(b)(iii), the Partnership was dissolved by the death of IP. On that event occurring, the Act, ss 43 and 44, applied. TP became entitled, but only in a limited way, to wind up the affairs of the Partnership and complete transactions begun but not finished. Section 44 then applied. It provided:
"44 Rights of partners as to application of partnership property
On the dissolution of a partnership every partner is entitled, as against the other partners in the firm, and all persons claiming through them in respect of their interests as partners, to have the property of the partnership applied in payment of the debts and liabilities of the firm, and to have the surplus assets after such payment applied in payment of what may be due to the partners respectively after deducting what may be due from them as partners to the firm; and for that purpose 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."
TP took no steps to wind up the affairs of the Partnership but simply kept on operating, utilising the Partnership assets, but as a sole trader.
The dissolution of a partnership by the death of a partner does not operate in any automatic way to vest the legal or indeed any other interest in specific assets of a partnership in a partner. TP pleaded that, somehow, on dissolution of the Partnership by the death of IP, the transfer of the legal title to the Real Estate "became effective" to vest the entire beneficial interest in the Real Estate pursuant to the trust pleaded in subpar 7(b)(ii). I have already determined such a trust did not exist. Further, the mechanism by which the transfers of legal title became effective, not at the time they were completed, but nearly four years later, was not explained.
Counsel for TP also made some submissions to the effect that TP provided valuable consideration for the agreement by IP to transfer the titles to the Real Estate to him. He submitted that valuable consideration took the form of a forbearance with regard to making a claim against the estate of his mother, ZP. Counsel referred to the evidence of TP and to a number of documents.
Counsel for TP submitted that IP was one of the executors named in ZP's will and hence was liable to account for the assets and liabilities of ZP's estate and to comply with any order of a court if one were made for provision to TP. Counsel for TP submitted that the evidence and exhibits should satisfy the Court that a promise of forbearance was requested and given in valuable consideration for the stated intention by IP that he would transfer to TP ownership of the Real Estate.
The evidence of TP to which counsel referred was an exchange between him and TP in the following terms:
"Q: Did you mention contesting your mother's will to your father?
A: Yes, I said, I asked dad was he going to contest it and he said 'No' because he didn't want to have any of mum's money because in the way she'd left her will and he said to me, 'I want to get the farm shifted over to your name so that you don't need to either.'"
The above exchange does not evidence, in my view, any form of forbearance by TP.
As to the documents relied on, they were referred to as a letter from Mark Temple-Smith dated 12 August 1999 to Levis Stace and Cooper, and that firm's reply dated 16 August 1999. Both were said to be contained in a Levis Stace and Cooper file relating to the conveyance of the Real Estate. Those documents were not exhibits in the proceedings. During the course of the hearing, counsel for TP sought to rely on two affidavits of Roger Baker, counsel's instructing solicitor, sworn 9 and 30 November 2016. Counsel for GP objected. What the affidavits sought to do was put before the Court what purported to be a full and true copy of the conveyancing file. Further, Mr Baker, in his affidavit material, sought to comment to the effect he believed it was a true copy.
Counsel for TP sought to rely in particular on the two letters specifically referred to. Argument was had in the course of the hearing about the admissibility of Mr Baker's affidavits, much of which was directed specifically to the two letters. The affidavits were admitted de bene esse with a determination as to admissibility to be part of these reasons.
The timing of the filing of the affidavits and the ruling made both need to be put in context. The hearing in this matter was split in the sense it commenced in Hobart in August 2016 and recommenced some months later in Launceston on 5 December 2016. During the course of the first part of the hearing, counsel for TP sought to lead from TP evidence about discussions he had had with Mark Temple-Smith, a lawyer, about TP's mother's estate and the farm titles. Objection was taken and I ruled it could not be led. I was told Mark Temple-Smith would be called as a witness. These affidavits of Mr Baker were prepared during the break in proceedings, quite obviously in an attempt to overcome the ruling I had already made. When the tender was sought, the same arguments were raised in the course of dealing with the objection. I gave reasons and said that, in my view, for those reasons, the material was not admissible. I agreed to take the material de bene esse because, on the resumed hearing, my memory of the details of the case as they emerged in the first part of the hearing was not clear, and I did not want to refuse the tender if there was potentially a basis upon which the material could be admitted.

The counterclaim and/or set-off is based on the same factual matrix which underpinned the substantive defences of TP. I have already made a number of factual findings adverse to TP which has resulted in the failure of those defences. Those findings must remain the same, and it is only if they can support in some way these alternative pleadings that TP might succeed on his counterclaim and/or set-off.
In support of the pleaded claims, counsel for TP listed a number of cases, but made little attempt, apart from to refer to pages in the footnotes, to outline in submissions why and how it was said the principles set out applied.
I will deal firstly with the factual matters pleaded, apart from those already dealt with when dealing with pars 1, 2 and 4-21 of TP's defence. I accept the facts pleaded in pars 24, 25, 26, 27 and 28 of the counterclaim and/or set-off. As to par 29, I have already dealt with the ownership of the various titles earlier in these reasons. I also accept that:
-     IP transferred the legal title to the Real Estate to TP in August/September 1999 and the stated consideration was natural love and affection.
-     IP entered a nursing home at some stage in 1998 and thereafter did not physically work on the farm.
-     From the date upon which the Partnership commenced TP worked on the farm and improved it without receiving a large income.
Clearly where the dispute still remains for the purpose of this counterclaim and/or set-off is the basis for these various things being done. Returning to par 23, TP asserted that "at all material times" IP held his right, title and interest in the assets of the Partnership on a constructive trust for TP. What the material times were said to be was not clear. I infer from the pleadings that TP asserts that IP held his interest in Partnership assets on a constructive trust for TP from the commencement of the Partnership. The basis for the constructive trust, I infer, was the common intention said to be held by IP and TP as pleaded in par 30.
Counsel for GP referred to Sivritas v Sivritas [2008] VSC 374 and a statement by Kyrou J at [134]. His Honour had made reference to both Muschinski v Dodds (1986) 160 CLR 583 and Baumgartnerv Baumgartner (1987) 164 CLR 137 and then said at [134]:
"The 'common intention constructive trust' is another species of constructive trust. It is different from a Muschinski v Dodds constructive trust, but will often arise in similar circumstances. A common intention constructive trust will arise where there is an actual or inferred common intention of the parties as to their entitlements to the beneficial interest in the property, and there has been detrimental reliance on that common intention by the claimant such that it would be an equitable fraud on the claimant to deny his or her interest in the property. The onus of proving the parties had a common intention lies on the party asserting the property is held in trust for his or her benefit."
TP appears to rely on both Muschinski v Dodds (in particular the reasons of Deane J commencing at 610) and Baumgartner v Baumgartner to support his argument that a constructive trust of some sort existed in this case. In the latter case, the former one was considered. Both cases involved two individuals making contributions towards the purchase of land and the erection of a house. The courts in each case were required to deal with claims that one party, despite the manner in which the legal title was held, should not be able to maintain that interest because of contributions made by the other.
In Muschinski v Dodds, Deane J's reasons commenced at 610. Towards the bottom of 612, his Honour determined that there was no relief available for Mrs Muschinski on the grounds of breach of express or implied agreement or of express or implied trust. He identified that the question then remained as to whether she was entitled to claim relief by way of declaration of, or an order imposing, a constructive trust. His Honour then moved at the end of 612 and continuing to refer to the law relating to constructive trusts. With respect, the phrase extracted by counsel for TP in his written submissions means nothing absent the context of the rest of the discussion Deane J outlined.
In Baumgartner's case, the High Court again considered the same issues. At 147, their Honours, Mason CJ, Wilson and Deane JJ referred to Muschinski v Dodds and quoted a passage from the judgment of Deane J. At 147-148, their Honours said:
"Deane J (with whom Mason J agreed) reached this result by applying the general equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them. His Honour said:
'… the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do: cf Atwood v Maudeand per Jessel MR, Lyon v Tweddellhttp:// - FTN.19.'
His Honour pointed out that the constructive trust serves as a remedy which equity imposes regardless of actual or presumed agreement or intention 'to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle': see also at p 617. In rejecting the notion that a constructive trust will be imposed in accordance with idiosyncratic notions of what is just and fair his Honour acknowledged that general notions of fairness and justice are relevant to the traditional concept of unconscionable conduct, this being a concept which underlies fundamental equitable concepts and doctrines, including the constructive trust." [Footnotes omitted.]
However in Giumelli v Giumelli [1999] HCA 10, 196 CLR 101, the High Court dealt with what I loosely describe as a "farming" case where real property in part was a partnership asset. The court was asked to find that a constructive trust existed. Their Honours, Gleeson CJ, McHugh, Gummow and Callinan JJ said at 111:
"2In submissions to this Court, the term 'constructive trust' was used to identify the nature of the equitable remedy granted by the Full Court. Care is required in the use of the term 'constructive' in this context. Professor Scott has pointed out:
'It is sometimes said that when there are sufficient grounds for imposing a constructive trust, the court "constructs a trust". The expression is, of course, absurd. The word "constructive" is derived from the verb "construe", not from the verb "construct" … The court construes the circumstances in the sense that it explains or interprets them; it does not construct them.'
The relief granted by the Full Court involved a trust that was 'constructive' in that way. The Full Court so interpreted the circumstances as obliging the appellants, in good conscience, not to retain their beneficial interest in the whole of the Dwellingup property and as requiring them to answer the respondent's equity by bringing about a subdivision of the promised lot and conveying the title to it. The equity of the respondent was seen by the Full Court as sufficiently strong as not only to prevent the appellants from insisting upon their strict legal rights but also, in respect of the promised lot, to convey it to the respondent.
3A constructive trust of this nature is a remedial response to the claim to equitable intervention made out by the plaintiff. It obliges the holder of the legal title to surrender the property in question, thereby bringing about a determination of the rights and titles of the parties.
4The term 'constructive trust' is used in various senses when identifying a remedy provided by a court of equity. The trust institution usually involves both the holding of property by the trustee and a personal liability to account in a suit for breach of trust for the discharge of the trustee's duties. However, some constructive trusts create or recognise no proprietary interest. Rather there is the imposition of a personal liability to account in the same manner as that of an express trustee. An example of a constructive trust in this sense is the imposition of personal liability upon one 'who dishonestly procures or assists in a breach of trust or fiduciary obligation'by a trustee or other fiduciary.
5In the present case, the constructive trust is proprietary in nature. It attaches to the Dwellingup property. Such a trust does not necessarily impose upon the holder of the legal title the various administrative duties and fiduciary obligations which attend the settlement of property to be held by a trustee upon an express trust for successive interests. Rather, the order made by the Full Court is akin to orders for conveyance made by Lord Westbury LC in Dillwyn v Llewelynand, more recently, by McPherson J in Riches v Hogben.
6In these cases, the equity which founded the relief obtained was found in an assumption as to the future acquisition of ownership of property which had been induced by representations upon which there had been detrimental reliance by the plaintiff. This is a well recognised variety of estoppel as understood in equity and may found relief which requires the taking of active steps by the defendant.
7There is no occasion in this appeal to consider whether the various doctrines and remedies in the field of estoppel are to be brought under what Mason CJ called 'a single overarching doctrine'or what Deane J identified as a 'general doctrine of estoppel by conduct'. These theses were advanced by their Honours in The Commonwealth v Verwayen but not accepted by Dawson J or McHugh J. Brennan J approached the subject on the footing that 'equitable estoppel yields a remedy in order to prevent unconscionable conduct on the part of the party who, having made a promise to another who acts on it to his detriment, seeks to resile from the promise'. Subsequently, in the joint judgment of Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ in Australian Securities Commission v Marlborough Gold Mines Ltd, reference was made to 'an equitable estoppel of the kind upheld in Verwayen'.
8Nor does the present case itself turn upon what was identified by Mason CJ, Wilson and Deane JJ in Baumgartner v Baumgartner as: 'the general equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them.' There was a joint endeavour which included the parties to this litigation and others. This was in the form of a partnership, the affairs of which have given rise to other litigation. As will appear, the delay in resolving the partnership dispute does have a significance for the determination of the relief which the respondent should be granted with respect to the promised lot." [Footnotes omitted.]
Counsel for GP submitted that, as IP and TP chose from the start to regulate their affairs as a partnership, the general principles identified in Baumgartner and Muschinski v Dodds did not apply, the view taken by the High Court in Giumelle. With respect, I agree.
In the present case, the Partnership when created in 1971, was created with a contribution by each partner of $800. Thereafter, IP became the registered proprietor of the Real Estate and contributed it to the Partnership. Notwithstanding what TP seemed to believe, IP did not acquire the Real Estate by way of gift. TP was not required at any time to pay any amount in respect of the contribution of the real estate by IP. However, as a consequence of the Real Estate becoming a Partnership asset, he acquired an equitable interest in that real estate as part of the assets of the Partnership. That interest was to the extent of one half of the assets after payment of liabilities at the point at which the Partnership was dissolved.
TP told the Court that when his grandfather retired from the partnership he was then operating with IP, his grandfather indicated to him that he wanted TP to have his interest in that partnership. It should be noted that there is no suggestion that that partnership continued and TP joined it. Nor is there any suggestion that Arthur Parker perhaps assigned his interest in that partnership to TP. It must be inferred that partnership was dissolved, and the new one created. No step was taken at or around 1971 for example for TP to take any legal title of any description to the Real Estate.
Counsel for GP submitted that any expectation of future ownership of the Real Estate which may have been fostered in TP by IP was satisfied by TP acquiring an equitable interest in it as an equal partner in the Partnership for minimal consideration. It was submitted that the evidence made clear that TP knew he was not getting something for nothing, and that was not his expectation. Reference was made to passages of cross-examination of TP by GP's counsel where the following exchange occurred:
"So you've had the choice of becoming a partner and you thought that a much better option at the time?.....No, I had the choice of becoming a farmer or a railway worker and I'd always liked the land and more – a lot more than I liked the railway or the railway workers and nan and pop gave me the option to come back home and I did.
Knowing that by accepting that option you were looking at a life of relatively hard work in frugal circumstances, you were aware of that weren't you?.....yes, I knew it – I knew there was hard work involved, yes.
And you knew that you'd be living in relatively frugal circumstances?.....Yes.
Now when you went into the partnership, you were aware that you would not be drawing - as distinct from a distribution profit – you would not be drawing any significant sums of money for your general lifestyle weren't you?.....Yes. Yes.
…
All right, well, on several occasions in your pleadings, we see the words 'common intention'. When you went into partnership with your father you knew you were going into a commercial enterprise, that is to say, the partnership, didn't you?.....Yes.
And you knew that you and he as equal partners would conduct that business to mutual advantage, didn't you?.....Yes.
And that was the enterprise that you entered with your father, correct?.....Yes.
And your expectation was that in receiving a one half interest in that enterprise, the partnership, you would in turn have to work physically and long hours for probably the rest of your life, you knew that didn't you?.....Well I suppose looking back over it now that's the way it was, I was quite happy with that.
I know it happened a long time ago but that's how you thought at the time?.....I may have not thought of it in those terms at that time."
From 1971 to June 2003, TP worked on the farm utilising the Real Estate. He no doubt worked hard, he improved the land and, over a number of years, he probably got only a modest financial reward. He was provided with housing and food supplied from the farm. However the finding is simply not open that he did all this in reliance on an asserted promise that the farm would all be his one day. He joined a partnership with his father and, as an equal partner, had an obligation to work for the benefit of the Partnership. He knew from the start that that would require him to work long hours and hard, and that he would not be paid a lot. TP cannot rely on work that he had an obligation to do as a member of the Partnership to somehow be work that he did solely for himself and in reliance of an asserted promise.
IP may very well have indicated an intention to give TP the whole of the Real Estate when he started to be unable to fully participate in the day to day work on the farm. However, as I have already determined, once the real property became an asset of the Partnership it was held subject to a trust for the benefit of the Partnership, and IP was not free, absent the dissolution of the Partnership, to transfer the Real Estate absolutely to TP. Neither IP nor TP even considered the legal situation when they embarked on what they did. Had they done so, they could have given effect to what IP may ultimately have wanted.
Counsel for TP relied on principles of estoppel to underpin the claims for relief in his counterclaim and/ set-off.
Counsel for GP made submissions about these issues. He said in his written submissions (absent footnotes):
"83Secondly, the defendant's case fails to focus upon the necessary element of inducement: whether one is concerned with proprietary or promissory estoppel. As the representee, the defendant must have accepted the truth of an identified representation, determined objectively. When the partnership was entered into in 1971 or thereabouts, the evidence revels no more than a statement from the grandfather to the defendant that he could become a partner by acquiring the interest of the grandfather. On any objective analysis, this was a gift. To the extent to which the defendant had a choice of continuing as a railway employee, his evidence as summarised above is best characterised as the exercise of personal choice, because he considered that farm work would be more attractive rather than a transfer to Burnie.
84Thirdly, the defendant must have changed his position in reliance upon the truth of the representation. It is not sufficient that he may have acted in the way that he did, for other reasons.
85Put at its highest the evidence reveals that the defendant exercised a personal choice to become a partner, with an identified equal interest with his father, in the knowledge that he would be required to work long hours and for little or no actual remuneration in order to attend to the affairs of the partnership and to increase the value of the assets.
86An essential element is missing. Handley, in his well-known text, Estoppel by Conduct & Election succinctly states the position as follows:
'An essential element in all estoppels by representation is that the representation must have induced the representee to change his position which requires belief by the representee in its truth … There is no presumption of reliance.'
87The evidence fails to reveal, in clear terms, any representation made by Ira Parker to the defendant which induced him to change what might otherwise have been his position as a railway employee in order to become a partner.
88Fourthly, the case of the defendant fails to address the detriment question. There must be evidence from which this Court can find as a fact that the defendant would be materially disadvantaged by the change of position if the representor was permitted to depart from it. In this regard it is settled that the detriment must be material.
89It is next said that on various unparticularised occasions that it was 'expressly stated and agreed between the deceased and the defendant, and it was their common intention, that the deceased would gift his share of the partnership … to the defendant at or about the time he (the deceased) retired.'
90In order to found a constructive trust on this basis, the evidence must be clear and unambiguous: Crown Melbourne Ltd -v- Cosmopolitan Hotel (Vic) Pty Ltd where French CJ, Kiefel & Bell JJ observed:
'[35] It has long been recognised that for a representation to found an estoppel it must be clear. In Low v Bouverie, it was said that the language used must be precise and unambiguous. This does not mean that the words used may not be open to different constructions, but rather that they must be able to be understood in a particular sense by the person to whom the words are addressed. The sense in which they may be understood provides the basis for the assumption or expectation upon which the person to whom they are addressed acts. The words must be capable of misleading a reasonable person in the way that the person relying on the estoppel claims he or she has been misled. The statement that the tenants would be "looked after at renewal time" is not capable of conveying to a reasonable person that the tenants would be offered a further lease.'
91These observations concerned promissory estoppel. The evidence in this case does not permit this Court to make a factual finding that particular representations were made, in clear terms. Attention is drawn to the following evidence:
·     T142, lines 21-42;
·     T163, lines 5-30;
·     T164, lines 1-42;
·     T170, lines 14-45;
·     T171, lines 1-45.
92There is no evidence upon which this Court could find that the defendant acted to his detrimental reliance upon one or more representations by Ira Parker as to future ownership. The case does not reveal creation or encouragement of an assumption or expectation that a particular promise would be performed or a representation made good.
93Nor does the defendant's case reveal the necessary detriment which is required: the case essentially comes down to an assertion that the defendant worked long hours for little or no remuneration in the partnership. The flaw in asserting this in support of the constructive trust claim is that this was a requirement of the particular enterprise which the parties embarked upon, in full knowledge of what was required. It is the partnership which was designed to confer mutual benefit upon Ira Parker an the defendant. In consequence of the death of Ira Parker, the defendant will ultimately receive three quarters of the value of the partnership assets. No question of unconscionable denial of this entitlement arises.
94Finally, on these claims, there is no evidence upon which the Court could find as a fact that the defendant incurred any additional detriment in reliance upon the vague representations that one day the farm would be gifted to him. All of the work which he did was required to be done in accordance with the partnership. It is true that the amount of work varied, as between Ira Parker and the defendant, from 1995 or thereabouts: but this was to be expected. It is in the very nature of a father and son family farming partnership. The change in work level was in consequence of the aging of the father, and it is not to be causally related to any representation to the effect that the son would ultimately succeed to the assets."

With respect, I agree with those submissions.
As to the pleading at par 32 of TP's counterclaim and/or set-off, I have already dealt with the question of whether IP relinquished any interest in Partnership assets in the context of TP's substantive defences and made findings adverse to TP. They are equally apposite here.
For the foregoing reasons, TP's counterclaim and/or set-off must fail.

Outcome

For the foregoing reasons, in the Second Action, GP is entitled to the declarations sought in pars 1, 3, 4 and 5 of his amended statement of claim. Further the counterclaim and/or set-off of TP contained in his amended defence filed 1 August 2016 should fail.
It must follow that there will need to be an account and that the parties will need to consider their positions as far as the First Action and the TFM application are concerned. On the evidence, it is clear that the Real Estate has substantial value well beyond anything shown in various records. I also infer, having regard to the concerns expressed about the health of TP, that it is unlikely he will continue to actively farm the property.
I will not make any formal orders to give effect to the conclusions above until such time as the parties have had the opportunity to consider their positions.