Rojoda Pty Ltd v Commissioner of State Revenue - [2018] WASCA 224

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   ROJODA PTY LTD -v- COMMISSIONER OF STATE REVENUE [2018] WASCA 224
CORAM:   BUSS P
MURPHY JA
BEECH JA

HEARD:   13 FEBRUARY 2018 & (ON THE PAPERS) 27 FEBRUARY, 16 MARCH, 3 APRIL, 30 OCTOBER & 12 NOVEMBER 2018
DELIVERED          :   21 DECEMBER 2018
FILE NO/S:   CACV 29 of 2017
BETWEEN:   ROJODA PTY LTD
Appellant
AND
COMMISSIONER OF STATE REVENUE
Respondent

ON APPEAL FROM:
Jurisdiction              :   STATE ADMINISTRATIVE TRIBUNAL
Coram:   DEPUTY PRESIDENT, JUDGE SHARP
Citation: ROJODA PTY LTD and COMMISSIONER OF STATE REVENUE [2017] WASAT 35
File Number             :   CC 1944 of 2015

Catchwords:

Stamp duty - Assessment - Partnership - Partnership assets - Dissolution of partnership - Winding up of partnership - Nature of partners' proprietary rights in partnership assets - Whether declaration of trust in partnership property after general dissolution of solvent partnership

Legislation:

Duties Act 2008 (WA), s 11(1)(c)
Partnership Act 1895 (WA), s 30(1), s 50, s 57

Result:

Appeal allowed

Category: A

Representation:

Counsel:

Appellant	:	Mr J C Vaughan SC
Respondent	:	Mr J A Thomson SC & Ms L J Dias

Solicitors:

Appellant	:	Ernst & Young
Respondent	:	State Solicitor for Western Australia

Case(s) referred to in decision(s):

Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd [2000] HCA 25; (2000) 202 CLR 588
Atwell v Roberts [2013] WASCA 37; (2013) 43 WAR 507
Bakewell v Deputy Commissioner of Taxation (SA) [1937] HCA 11; (1937) 58 CLR 743
Beale v Trinkler [2007] NSWSC 1058
Black v Garnock [2007] HCA 31; (2007) 230 CLR 438
Bolton v Federal Commissioner of Taxation [1965] ALR 481
Burdett‑Coutts v Inland Revenue Commissioners [1960] 3 All ER 153
Byrnes v Kendall [2011] HCA 26; (2011) 243 CLR 253
Cameron v Murdoch (1986) 60 ALJR 280
Cameron v Murdoch [1983] WAR 321
Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd [1974] HCA 22; (1974) 131 CLR 321
Capital Securities XV Pty Ltd v Calleja [2018] NSWCA 26
Carter Bros v Renouf [1962] HCA 67; (1962) 111 CLR 140
Chan v Cresdon Pty Ltd [1989] HCA 63; (1989) 168 CLR 242
Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178
Chief Commissioner of Stamp Duties for NSW v Buckle [1998] HCA 4; (1998) 192 CLR 226
Cock v Smith [1909] HCA 64; (1909) 9 CLR 773
Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694
Commissioner of State Revenue v Danvest [2017] VSCA 382
Commissioner of State Taxation of the State of South Australia v Cyril Henschke Pty Ltd [2010] HCA 43; (2010) 242 CLR 508
Connell v Bond Corporation Pty Ltd (1992) 8 WAR 352
Corin v Patton [1990] HCA 12; (1990) 169 CLR 540
CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53; (2005) 224 CLR 98
DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1982] HCA 14; (1982) 149 CLR 431
Dr Barnardo's Homes National Incorporated Association v Commissioners for Special Purposes of the Income Tax [1921] 2 AC 1
Farquhar v Hadden (1872) LR 7 Ch 1
Fazio v Fazio [2012] WASCA 72
Federal Commissioner of Taxation v Everett [1980] HCA 6; (1980) 143 CLR 440
Halloran v Minister Administering National Parks and Wildlife Act 1974 [2006] HCA 3; (2006) 229 CLR 545
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29
Haque v Haque (No 2) [1965] HCA 38; (1965) 114 CLR 98
Hendry v The Perpetual Executors and Trustees Association of Australia Ltd [1961] HCA 44; (1961) 106 CLR 256
Herdegen v Federal Commissioner of Taxation [1998] FCA 699 (1988) 84 ALR 271
In re Bourne [1906] 2 Ch 427
In re Haye's Will Trusts [1971] 1 WLR 758
In re Holland [1907] 2 Ch 88
In re Ritson [1899] 1 Ch 128
In re Rowe (1926) VLR 452
Livingston v Commissioner of Stamp Duties (Qld) [1960] HCA 94; (1960) 107 CLR 411
Longley v ACN 090 609 868 Pty Ltd (in liq) [2010] FCA 1468; (2010) 76 ALR 728
Lord Sudeley v Attorney‑General [1897] AC 11
McCaughey v The Commissioner of Stamp Duties (1945) 46 SR (NSW) 192
Molloy v Federal Commissioner of Land Tax [1937] HCA 62; (1937) 58 CLR 352
New Zealand Insurance Company Ltd v Commissioner of Probate Duties [1973] VR 659
Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306
Pagels v McDonald [1936] HCA 15; (1936) 54 CLR 519
Parkview Pty Ltd v Commonwealth Bank of Australia [2013] NSWCA 422
Perpetual Executors and Trustees of Australia Ltd v Federal Commissioner of Taxation [No 2] [1955] HCA 66; (1955) 94 CLR 2 (Thomas' Case)
Placer Dome Inc v Commissioner of State Revenue [2017] WASCA 165
Popat v Shonchatra [1997] 1 WCR 1367
Re McPhail [1971] VR 534
Ringthane Pty Ltd v Commissioner of State Taxation (WA) (1993) 26 ATR 489
Rojoda Pty Ltd and Commissioner of State Revenue [2017] WASAT 35
Rushton (Qld) Pty Ltd v Rushton (NSW) Pty Ltd [2002] QCA 210; [2003] 1 Qd R 320
Sharp v Union Trustee Co of Australia Ltd [1944] HCA 35; (1944) 69 CLR 539
Sze Tu v Lowe [2014] NSWCA 462; (2014) 89 NSWLR 317
Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315
The Registrar of the Accident Compensation Tribunal v The Commissioner of Taxation of the Commonwealth of Australia [1993] HCA 1; (1993) 178 CLR 145
United Builders Pty Ltd v Mutual Acceptance Ltd [1980] HCA 43; (1980) 144 CLR 673
Watson v Ralph [1982] HCA 35; (1982) 148 CLR 646

Table of contents

Buss P & Beech JA

Introduction

The terms of the 2013 Deeds

The partners' interests immediately prior to execution of the 2013 Deeds

Disposition

Conclusion

Murphy JA

The Partnerships

Scolaro Investment Company Partnership - SIC Partnership

A&MMR Scolaro Partnership - AMS Partnership

The Partnerships' real estate assets - the SIC Partnership Properties and the AMS Partnership Properties

The death of Anthony Scolaro

Maria Scolaro becomes registered proprietor of the Properties

Partnership Deed provisions

SIC Partnership Deed

AMS Partnership Deed

Dissolution of Partnerships

Death of John Scolaro

The 2013 Deeds

The SIC Partnership Deed of 1 December 2013

Recitals

Operative provisions

The AMS Partnership Deed of 1 December 2013

Recitals

Operative clauses

The Duties Act 2008 (WA)

Findings of the Tribunal

Grounds of Appeal and notice of contention

The parties' submissions

Rojoda

Ground 1(1)

Ground 1(2)

Ground 2

The Commissioner

Ground 1(1)

Ground 1(2) and the notice of contention

Partnership principles

Dissolution

Partnership property

A partner's interest in the partnership

Cameron v Murdoch

Disposition

BUSS P & BEECH JA:

Introduction

The facts, other background, decision of the Tribunal, grounds of appeal and the parties' submissions are outlined in Murphy JA's reasons. These reasons adopt his Honour's defined terms.
The issue before the Tribunal and on appeal is, broadly speaking, whether the 2013 Deeds were dutiable instruments. The Tribunal held that the 2013 Deeds were dutiable in that they were declarations of trust over dutiable property, within the meaning of s 11(1)(c) of the Duties Act read with the definition of 'declaration of trust' in s 9 and the definition of 'dutiable property' in s 15.
The Tribunal characterised the interest of each partner in the Partnership Properties before the 2013 Deeds were executed as a fluctuating and non‑specific interest in the surplus of partnership assets after partnership debts had been discharged and the winding up completed. In other words, the Tribunal found that the partners had the same rights post‑dissolution, but prior to the execution of the 2013 Deeds, as they had prior to dissolution. Ground 1(1) alleges that the Tribunal erred in that characterisation of the partners' interests. Ground 2 is in the alternative, and asserts that s 78(2) of the Duties Act had the effect of reducing the duty payable to nil.
As explained below, the parties conducted the proceedings before the Tribunal and the appeal on the basis that the proper characterisation of the partners' interests in the Partnership Properties, and the identification of the correlative obligations owed by Maria (as registered proprietor of the properties) to the partners, immediately prior to the execution of the 2013 Deeds, was decisive of the appeal. In particular, if, contrary to the Tribunal's findings, cl 3 of the 2013 Deeds merely acknowledged or recorded an existing obligation of Maria that had arisen under the general law, no duty was payable and the appeal must be upheld. Thus, the parties' submissions were focused on the proper characterisation of the partners' interests in the Partnership Properties immediately prior to the execution of the 2013 Deeds.
For the reasons that follow, in our opinion, cl 3 of the 2013 Deeds merely acknowledged or recorded an existing obligation of Maria that had arisen under the general law. Consequently, the appeal must be upheld.
The liability to duty of the 2013 Deeds is to be determined according to the circumstances which existed at the time of execution of the deeds and upon examination of the terms of the deeds, from which their legal operation in or upon those circumstances is to be gathered.[1] Only brief observations concerning the terms of the 2013 Deeds are necessary, before turning to the critical issue of the circumstances existing at the time of execution of the deeds.
[1] DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1982] HCA 14; (1982) 149 CLR 431, 470.

The terms of the 2013 Deeds

The material terms of the 2013 Deeds are set out in the reasons of Murphy JA. Clause 3 of each of the 2013 Deeds provided that Maria 'confirms' that she holds the relevant Partnership Properties on trust as detailed in the clause.
The use of the word 'confirms' carries a connotation that, independently of cl 3 of each 2013 Deed, Maria held the relevant Partnership Properties on the trusts detailed in each cl 3. If that had been so, as already explained, the common basis on which the proceedings before the Tribunal and the appeal have been conducted means that no duty is payable and the appeal succeeds.
Thus, attention must be directed to the nature and extent of the interest of each partner (or his or her representatives) in the Partnership Properties and to the basis on which Maria held the Partnership Properties, in each case as at immediately prior to the execution of the 2013 Deeds.

The partners' interests immediately prior to execution of the 2013 Deeds

We begin analysis by reference to the interest of each partner in the Partnership Properties while the Partnerships subsisted. Prior to dissolution of a partnership:
(1)a partner's interest in a partnership is an equitable chose in action, consisting of the right to the partner's proportion of the surplus after realisation of the assets and payment of the debts and liabilities of the partnership;[2]
(2)arising from that chose in action, each partner has a beneficial interest in every asset of the partnership;[3]
(3)the interest is sui generis; in other words, it is of a distinctive character that distinguishes it from other kinds of beneficial interests;[4]
(4)the interest of a partner in partnership assets is not a fixed proportion of each item of property, nor is it an immediately ascertainable quantity of the item; it is an indefinite and fluctuating interest consisting of the right to a proportion of the surplus after the realisation of the assets and payment of the debts and liabilities of the partnership;[5]
(5)the interest of a partner in the partnership assets flows from the rights under the Partnership Act for partnership property to be held and applied exclusively for the purposes of the partnership[6] and to have partnership property applied to payment of debts,[7] and then in accordance with s 57 of the Act or as otherwise agreed.
[2] Federal Commissioner of Taxation v Everett [1980] HCA 6; (1980) 143 CLR 440, 446; United Builders Pty Ltd v Mutual Acceptance Ltd [1980] HCA 43; (1980) 144 CLR 673, 688; Commissioner of State Taxation of the State of South Australia v Cyril Henschke Pty Ltd [2010] HCA 43; (2010) 242 CLR 508 [27] ‑ [28]; Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29 [41]; Fazio v Fazio [2012] WASCA 72 [55] ‑ [56]; Atwell v Roberts [2013] WASCA 37; (2013) 43 WAR 507 [142].
[3] Sharp v Union Trustee Co of Australia Ltd [1944] HCA 35; (1944) 69 CLR 539, 551; Hendry v The Perpetual Executors and Trustees Association of Australia Ltd [1961] HCA 44; (1961) 106 CLR 256, 265 ‑ 266; Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd [1974] HCA 22; (1974) 131 CLR 321, 327; Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178, 194; Fazio [58]; Atwell v Roberts [142].
[4] Canny Gabriel (327 ‑ 328); Cyril Henschke [24]; Hancock Prospecting [42]; Fazio [58]; Atwell v Roberts [142].
[5] Sharp (551); Livingston v Commissioner of Stamp Duties (Qld) [1960] HCA 94; (1960) 107 CLR 411, 453; Canny Gabriel (327); Everett (446); United Builders (688); Cyril Henschke [27] ‑ [28]; Fazio [56] ‑ [57]; Hancock Prospecting [42]; Sze Tu v Lowe [2014] NSWCA 462; (2014) 89 NSWLR 317 [122]; Commissioner of State Revenue v Danvest [2017] VSCA 382 [2], [83], [164].
[6] Hancock Prospecting [41].
[7] Partnership Act, s 50.
We turn to the position upon dissolution of the Partnerships.
Any change in the membership of a partnership, whether as a result of retirement, death or otherwise, effects a dissolution of the partnership.[8] Thus, Anthony's death effected a dissolution of each of the Partnerships.
[8] Cyril Henschke [10] ‑ [12]; Atwell v Roberts [11(a)], [122].
The subsequent agreed dates of dissolution reflect the operation of the relevant provisions of the Partnership Deeds. Clause 17 of the SIC Partnership Deed gave Maria, as surviving spouse, three months from the date of death, or 28 days after the grant of probate, whichever was the later, within which to give notice that she would succeed to Anthony's share, failing which the surviving partners could give notice that they elected not to succeed, whereupon the Partnership would be deemed to be dissolved and its assets sold. The agreed date of dissolution of the SIC Partnership, namely 15 March 2012, was the date the Partnership was deemed to be dissolved under cl 17. Clause 16 of the AMS Partnership Deed gave Maria, as remaining partner, the option to purchase Anthony's share of the Partnership by notice given within three months from the date of death, failing which the Partnership would be dissolved and cl 19, which provided for the winding up of the Partnership, made applicable. The agreed date of dissolution of the AMS Partnership, namely 12 March 2011, was the date of dissolution under cl 16.
Upon dissolution:
(1)By s 50 of the Partnership Act, every partner is entitled, as against the other partners in the firm and all persons claiming through them in respect of their interest 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.
(2)There being no agreement to the contrary,[9] in settling accounts between the partners, the assets of the firm, including the sums, if any, contributed by the partners to make up losses or deficiencies of capital, were to be applied in the following manner and order:[10]
(a)in paying the debts and liabilities of the firm to persons who are not partners therein;
(b)in paying to each partner rateably what is due from the firm to him for advances as distinguished from capital;
(c)in paying to each partner rateably what is due from the firm to him in respect of capital;
(d)the ultimate residue, if any, shall be divided among the partners in the proportion in which profits are divisible.
(3)Generally at least, pending completion of the winding up of the partnership by payment of debts, the position set out above at [10(4)] continues to apply. As Buss JA explained in Atwell v Roberts, on dissolution each partner's non‑specific fluctuating interest in the surplus after payment of debts and discharge of other liabilities continues until actual winding up is complete, or until the partners agree otherwise (a notional winding up).[11] The interest of each partner can be ascertained only upon completion of the liquidation and the identification of any surplus share.[12] In Hendry v The Perpetual Executors and Trustees Association of Australia Ltd, Taylor and Menzies JJ observed that when a partnership is dissolved, none of the partners has any exclusive interest in any asset of the partnership or, until all the liabilities of the partnership have been paid, any definite share or interest in any one partnership asset capable of being realised otherwise than in the liquidation of the partnership.[13] Whether what is said in this subparagraph is a hard and fast rule or a general principle is discussed below.
(4)On the other hand, when the liabilities of the partnership are discharged and the winding up complete, the surplus to be shared among the partners can be identified. At that time, the interest of a partner in the surplus is ascertained, and thereby of a different and more specific character.[14] In our view, the partner's interest is then of the same character as the interests of beneficiaries under an express trust in which the trust instrument directs that the trust property be sold and the proceeds of sale distributed in fixed proportions among identified beneficiaries. The position seems to us to be analogous to the rights of residuary beneficiaries under a will when the debts have been paid and the residue ascertained, where the residuary legatees are entitled to the residue so ascertained.[15]
[9] Partnership Act, s 57(1).
[10] Partnership Act, s 57(3).
[11] Atwell v Roberts [143]; see also Beale v Trinkler [2007] NSWSC 1058[7] ‑ [8] and Lindley & Banks on Partnership (20th ed) [19‑09]. All three of these statements were relied on by the Tribunal: primary decision [117] ‑ [119]. See also Popat v Shonchhatra [1997] 1 WLR 1367, 1372.
[12] Cyril Henschke [25]. See also Livingston (453); Hendry (266).
[13] Hendry (266).
[14] Livingston (453); Hendry (266); Cyril Henschke [25].
[15] Livingston (440); Commissioner of Stamp Duties v Livingston [1965] AC 694, 711, citing Dr Barnardo's Homes National Incorporated Association v Commissioners for Special Purposes of the Income Tax [1921] 2 AC 1, 10.
In light of these principles, if the debts and other liabilities of the Partnerships had been paid or discharged, in our opinion, the partners would each have had a beneficial or equitable interest in the relevant Partnership Properties in that equity would give specific relief against the Partnership Properties to protect the partners' right to their respective proportionate share in the proceeds of sale of each of the relevant Partnership Properties.[16]
[16] See, by analogy, cases such as Chan v Cresdon Pty Ltd [1989] HCA 63; (1989) 168 CLR 242, 252 ‑ 253; Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315 [53]; Halloran v Minister Administering National Parks and Wildlife Act 1974 [2006] HCA 3; (2006) 229 CLR 545[72]; Black v Garnock [2007] HCA 31; (2007) 230 CLR 438 [32], [106].
It was an agreed fact that, as at the respective dates of dissolution of the Partnerships, the value of the cash or other current assets of each Partnership exceeded its liabilities.[17] It was also an agreed fact that the AMS Partnership Properties and the SIC Partnership Properties were not sold in accordance with the winding‑up provisions of the respective deeds of partnership or otherwise.[18] There is no agreed fact, and no evidence, as to whether, by 1 December 2013 when the 2013 Deeds were executed, the liabilities of the Partnerships had been discharged. We proceed on the basis that the position remained as it was at the relevant date of dissolution, namely that the liabilities of each Partnership had not been discharged, but the value of the cash or other current assets exceeded the amount of the liabilities.
[17] Statement of agreed facts [18(b)] and [22(b)].
[18] Statement of agreed facts [24]; primary decision [31].

In the circumstances, it seems to us that the question is: which of the following approaches applies? Is there a hard and fast rule, to the effect set out at [14(3)] above, that until the debts and other liabilities of a partnership are paid or discharged, or until the partners agree otherwise, the interest of each partner in each item of partnership property remains of the non‑specific and fluctuating character outlined in [10(4)] and [14(3)] above? Or does equity take the more flexible view that if, and when, the surplus of partnership assets after payment of debts and discharge of other liabilities has been sufficiently ascertained and provided for out of particular assets, each partner will have a specific and fixed interest in the other assets comprising the surplus. Like Murphy JA, we prefer the latter view. Our reasons, which substantially overlap with his Honour's reasons, are as follows.
Ascertainment of the rights and remedies of partners, including in relation to the dissolution and winding up of a partnership, is, and has always been, the province of equity.[19] Among equity's broad themes, traditionally referred to as maxims, are that it prefers substance to form, and regards what ought to be done as having been done.[20]
[19] Cyril Henschke [22].
[20] Halloran [65]. See also Chan v Cresdon (252); Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd [2000] HCA 25; (2000) 202 CLR 588 [28]; Heydon J D, Leeming M J and Turner P J, Meagher Gummow & Lehane's Equity: Doctrine and Remedies (5th ed) [3‑185] ‑ [3‑240].
It is important to recognise, as we do, that this maxim - that equity regards as done that which ought to be done - is, like other maxims of equity, not a specific rule or principle of law.[21] Nonetheless, in our opinion, the maxim has a role to play, in the manner explained below, in the process of identifying the nature and extent of partners' interests in partnership property after the dissolution and before the completion of the winding up of a partnership by the actual discharge of partnership liabilities.
[21] Corin v Patton [1990] HCA 12; (1990) 169 CLR 540, 557; Parkview Pty Ltd v Commonwealth Bank of Australia [2013] NSWCA 422[119].
Generally at least, the maxim does not apply in the absence of an obligation on a relevant party to do a positive act; in other words, if there is no valid legal obligation which equity would say ought to be treated as performed, the maxim does not apply.[22] Further, the relevant obligation must, generally at least, be susceptible of specific equitable relief, even if of a secondary nature.[23]
[22] Parkview [73]; Meagher Gummow & Lehane's Equity: Doctrine and Remedies [3‑185], [3‑225].
[23] Parkview [65], [68], [122]; Meagher Gummow & Lehane's Equity: Doctrine and Remedies [3‑235].
At all relevant times, namely at the date of dissolution of each Partnership and thereafter, each partner had the right, as against the other partners, to have the assets of the Partnership applied to pay or discharge the debts and other liabilities of the Partnership, and each partner had the correlative obligation to join with the other partners in the realisation of the property of the Partnership to pay or discharge its debts and other liabilities. If such obligations were not performed, the court would, if necessary and appropriate, give specific relief to enforce those obligations. While there is no legal requirement that the cash and other current assets be used, in preference to the relevant Partnership Properties, to pay the Partnership debts and liabilities, nothing in the agreed facts suggests any reasonable basis on which a court might order the discharge of the Partnership debts and liabilities by selling the relevant Partnership Properties rather than using the cash and other current assets immediately available. In substance, therefore, in our view a court would, if necessary, enforce by order the obligations of the partners by the use of the cash and other current assets to pay or discharge the Partnership debts and other liabilities.
While equity often regards as done that which ought to be done, the same is not necessarily true of that which merely could be done.[24] In CPT Custodian Pty Ltd v Commissioner of State Revenue, the fact that an existing trust could have been brought to an end at a particular time, but in fact had not been, was held to be something which did not engage the maxim that equity regards as done that which ought to be done. In this case, for the reason explained above, the use of the cash and other current assets to pay or discharge each Partnership's debts and other liabilities was something which, in the relevant sense should, not merely could, have been done.
[24] CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53; (2005) 224 CLR 98 [52]; Parkview [121].
Further, we agree with Murphy JA's analysis of Cameron v Murdoch[25] and the authorities relied on by Brinsden J. We also agree with Murphy JA that those authorities support the conclusion that, in this case, immediately before the 2013 Deeds were executed, each partner had a specific and fixed beneficial or equitable interest in the relevant Partnership Properties, commensurate with the partner's share in the Partnership, on the basis that the surplus assets after payment or discharge of debts and other liabilities were sufficiently ascertained and provided for out of cash and other current assets that the relevant Partnership Properties should be treated as part of the surplus assets of the Partnership after payment or discharge of Partnership debts and other liabilities.
[25] Cameron v Murdoch (1986) 60 ALJR 280; Cameron v Murdoch [1983] WAR 321.
In Cameron v Murdoch, in the view of the Privy Council, the finding of Brinsden J that Jack had a specific and fixed 10/27^ths equitable interest in the land was sustained because 'there was no suggestion that, on the winding up of the original partnership, it would be necessary to sell ML 1659, or any part of it, in order to pay off partnership debts'. On that reasoning, by necessary implication, the partnership debts had not been paid at the relevant time. Nevertheless, it was established that ML 1659 would be surplus property after payment of partnership debts so that at the relevant time Jack had a fixed one‑third equitable interest in ML 1659 through his one‑third partnership interest. In other words, the debts of the partnership were taken to be sufficiently ascertained and provided for out of other available assets, albeit that the debts had not then been paid.
As to Jack's 1/27^thinterest arising from his share of his father's one‑third interest in the partnership, Brinsden J held that the residue of James' estate had been 'ascertained, or sufficiently ascertained'[26] as at Jack's death to give Jack an equitable interest in specific assets.
[26] Cameron v Murdoch [1983] WAR 321, 343.
Similarly, in In re Holland,[27] the winding up and taking of accounts had not been completed. Neville J emphasised that the partnership was solvent, and the other partnership property was more than enough to clear the debts. Consequently, the specific devise in the will of the deceased partner of his share in certain land which formed part of the partnership assets was held to be a valid disposition of a specific and fixed equitable interest in the particular assets, notwithstanding that those assets were partnership property and notwithstanding that the winding up and taking of accounts of the partnership had not been completed.
[27] In re Holland [1907] 2 Ch 88.
These cases are inconsistent with a hard and fast rule that, until all partnership debts and other liabilities are paid or discharged and the winding up of the partnership is complete, the interest of each partner in each partnership asset is never more than the floating, non‑specific interest outlined in [10(4)] and [14(3)] above. Rather, equity takes a more flexible approach: if and when the surplus of partnership assets after payment and discharge of debts and other liabilities has been sufficiently ascertained and provided for from other available assets, each partner will, at least ordinarily, thereupon have a specific and fixed beneficial or equitable interest in the remaining assets comprising the surplus.
We acknowledge that some of the statements made in the cases referred to in [14(3)] above are expressed in unqualified terms. However, the statements were made in a context and factual framework in which no issues of the kind presently under consideration arose. In other words, none of those cases concerned issues relating to whether and, if so, when it could be said that, in substance, the surplus of partnership assets after payment of debts had been sufficiently ascertained and provided for.
For these reasons, in our opinion, immediately prior to the execution of the 2013 Deeds, the partners or their representatives had specific and fixed beneficial or equitable interests in the Partnership Properties, reflecting their respective proportionate share of partnership property.
The partners' rights in relation to the Partnership Properties were enforceable against Maria as the registered proprietor of those properties. Those properties were property of the Partnerships.[28] A partner holding the legal title to property of a partnership holds it on trust for the partnership.[29] Thus, Maria held the Partnership Properties on trust for the Partnerships, to enable the sale of the Partnership Properties and the distribution of proceeds to the partners or their representatives in accordance with their respective proportionate share.
[28] Primary decision [17], [20].
[29] Carter Bros v Renouf [1962] HCA 67; (1962) 111 CLR 140, 163; Sze Tu [126].
Against this background, cl 3 of each of the 2013 Deeds, on its proper construction, merely acknowledged or recorded an existing obligation of Maria that had arisen under the general law. Clause 3 did not create new trusts in relation to the Partnership Properties conferring on the partners or their representatives a proprietary equitable interest in the properties that had not previously been held by the partners or their representatives.
The Commissioner points to a passage from the speech of Viscount Radcliffe, speaking for the Privy Council in Livingston,[30] cited with approval by the High Court in Cyril Henschke,[31] that:
Equity in fact calls into existence and protects equitable rights and interests in property only where their recognition has been found to be required in order to give effect to its doctrines.
The Commissioner submits, in effect, that prior to the completion of the winding up, there was no occasion for equity to intervene in favour of the partners so as to create and declare an equitable interest on their part.[32]
[30] Livingston (712).
[31] Cyril Henschke [25].
[32] Appeal ts 58.
We do not accept this submission. Whether the 2013 Deeds were dutiable depends upon their substance and effect, taking into account the circumstances pertaining at the time the instruments were executed.[33] That directs attention to the parties' rights and obligations immediately prior to the execution of the 2013 Deeds. An integral aspect of that process is the identification of the nature and extent of any beneficial or equitable interests in the Partnership Properties held by the partners immediately prior to the execution of the 2013 Deeds. That involves and requires an assessment of what relief a court of equity would have given as at the time immediately prior to the execution of the 2013 Deeds. Thus, the nature of the inquiry itself provides an occasion for the identification, by a court of equity, of the rights and obligations of the partners immediately prior to the execution of the 2013 Deeds.
[33] DKLR (No 2) (470).

Disposition

The Commissioner conducted the proceedings before the Tribunal on the basis that:
(1)before the 2013 Deeds were executed, Maria did not hold the Partnership Properties on trust for any particular beneficiaries;[34]
(2)cl 3 created new trusts in relation to the Partnership Properties conferring a proprietary equitable interest in the properties that had not previously been held by the partners or their representatives;[35]
(3)consequently, cl 3 of the 2013 Deeds was a declaration of trust over dutiable property, rendering the deeds liable to duty.[36]
[34] Respondent's statement of issues, facts and contentions [68], BAB 135.
[35] Respondent's statement of issues, facts and contentions [69], BAB 135.
[36] Respondent's statement of issues, facts and contentions [70], BAB 135.
The Tribunal accepted the Commissioner's case in these respects.[37] The parties' written submissions prior to the hearing of the appeal, and the oral submissions on appeal, concentrated on whether the first and second propositions were correct. The Commissioner submitted that the Tribunal's conclusions on the first two propositions were correct.[38] As we have explained, we do not accept these first two propositions.
[37] Primary decision [116], [121] – [129].
[38] See, for example, respondent's submissions [2] – [5].
The parties conducted the proceedings before the Tribunal and the appeal on the basis that if, contrary to the Commissioner's first two propositions, cl 3 of the 2013 Deeds merely acknowledged or recorded an existing obligation of Maria that had arisen under the general law, no duty was payable.[39] After the hearing of the appeal, following a request for supplementary submissions from the court, it emerged that the parties do not agree on the path by which that result is reached. The appellant contends in supplementary submissions that a mere acknowledgement or record of a pre‑existing trust obligation is not a declaration of trust over dutiable property within the meaning of s 11(1)(c) of the Duties Act. The Commissioner contends in supplementary submissions that if, prior to the execution of the 2013 Deeds, the partners enjoyed a right to the transfer of the proportionate share of the full beneficial interest in the properties, while both 2013 Deeds were nevertheless declarations of trust over dutiable property within the meaning of s 11(1)(c), s 78 of the Duties Act operates to reduce to nil the duty payable. Prior to the supplementary submissions, the Commissioner had not advanced any submissions concerning the construction of s 11(1)(c) of the Duties Act in response to ground 1(1) of the appeal.
[39] Appellant's supplementary submissions dated 30 October 2018 [8]; respondent's supplementary submissions dated 12 November 2018 [4] – [6].
It is neither necessary nor appropriate to resolve the question of which of these paths is correct. Any resolution would require determination of the proper construction of s 11(1)(c) and of s 78(2) of the Duties Act. The Commissioner accepts that if (as we have found), immediately prior to the execution of the 2013 Deeds, Maria was obliged to transfer a proportionate share of the full beneficial interest to the partners, no duty is payable.[40] That reflects the Commissioner's case in both the proceedings before the Tribunal and the appeal. The Commissioner's case, as run in the Tribunal and in this court, stands or falls on the contention that cl 3 conferred on each of the partners (or their representatives) a proprietary equitable interest in the Partnership Properties when, prior to execution of the 2013 Deeds, no partner (or their representatives) had any fixed or specific beneficial or equitable interest in any of the Partnership Properties.
[40] Respondent's supplementary submissions dated 12 November 2018 [4] - [5].
We proceed on the basis on which the parties have conducted the proceedings before the Tribunal and the appeal. In doing so, we express no opinion (and, in the circumstances, it is unnecessary to express an opinion) on any question that might arise on other occasions as to the proper construction of s 11(1)(c) or s 78(2) of the Duties Act.
For these reasons, our conclusions as to the partners' interests in the Partnership Properties, and the basis on which Maria held the Partnership Properties,[41] mean that no duty was payable and the appeal must be upheld. To that extent, ground 1(1) should be upheld.

[41] See [29] – [31] above.

For the reasons given by Murphy JA, leave should be given to the appellant to amend its grounds of appeal to add ground 1(2), and the Commissioner should be given leave to file and serve a notice of contention in the terms set out in his Honour's reasons. It is not necessary to deal with ground 1(2) or ground 2, which only arise if the partners or their representatives had not obtained specific and fixed beneficial or equitable interests in the Partnership Properties immediately prior to the execution of the 2013 Deeds. Moreover, resolution of ground 1(2) would require determination of issues of construction of s 11(1)(c). Notwithstanding the general preference for resolving all grounds of appeal, even if not dispositive,[42] it is appropriate not to resolve ground 2 or ground 1(2), or the notice of contention responding to that latter ground, in the circumstances outlined in [34] - [38] above.
[42] As to which, see Capital Securities XV Pty Ltd v Calleja [2018] NSWCA 26 [7] ‑ [8].

Conclusion

The appeal should be upheld. We would hear from the parties as to the precise orders that should be made, and as to costs.

MURPHY JA:

This is an appeal against a decision of the State Administrative Tribunal (Tribunal) in Rojoda Pty Ltd and Commissioner of State Revenue[43] (primary decision). That decision concerned an application for review by the appellant (Rojoda) of a decision by the respondent (Commissioner) in relation to an objection made by Rojoda to a Duties Assessment Notice (Notice). Rojoda lodged with the Commissioner certain documents for assessment of duty under the Duties Act 2008 (WA). The Commissioner issued a Notice assessing duty in relation to certain deeds following the dissolution of certain partnerships. Rojoda lodged an objection against the assessment of duty. The Commissioner allowed the objection, but only as to a part of it. Rojoda applied to the Tribunal for a review of the Commissioner's decision in relation to the objection. There was an agreed statement of facts before the Tribunal.[44]

[43] Rojoda Pty Ltd and Commissioner of State Revenue [2017] WASAT 35.

[44] Primary decision [1] - [8].

By s 37(2) of the Taxation Administration Act 2003 (WA), the onus of establishing that an incorrect assessment of a decision to which an objection relates is invalid or incorrect lies on the taxpayer.[45]
[45] See also Placer Dome Inc v Commissioner of State Revenue [2017] WASCA 165 [187] ‑ [214].
The Tribunal dismissed Rojoda's application for review and affirmed the Commissioner's decision only partially to allow Rojoda's objection. Rojoda has appealed against that decision.
The appeal is brought by Rojoda pursuant to s 43A of the Taxation Administration Act. Buss P and Beech JA have explained the basis upon which the parties conducted the proceedings before the Tribunal, and the appeal. For the reasons which follow, the appeal should be allowed.

The Partnerships

Scolaro Investment Company Partnership - SIC Partnership

On 31 March 1972, in accordance with a deed stamped 13 April 1972, a partnership commenced between a husband and wife, Anthony Scolaro (Anthony) and Maria Scolaro (Maria), and their three children, Rosana Bonavita (nee Scolaro) (Rosana), John Scolaro (John) and David Scolaro (David). At all material times from 31 March 1972 to 12 February 2011, each of the five partners held a 20% share in the partnership. This partnership, the Scolaro Investment Company Partnership, will be referred to as the 'SIC Partnership', and the partnership deed will be referred to as the 'SIC Partnership Deed'.[46]
[46] Primary decision [11] - [12].
The SIC Partnership business included property ownership and investment.[47]

A&MMR Scolaro Partnership - AMS Partnership

[47] Primary decision [15].

Pursuant to a deed executed on or about 20 June 1986, Anthony and Maria entered into another partnership with effect from 1 July 1986 called the A&MMR Scolaro Partnership. At all material times from 1 July 1986 to 12 February 2011 each of the two partners held a 50% share in the partnership. This partnership will be referred to as the AMS Partnership, and the deed will be referred to as the 'AMS Partnership Deed'.[48]
[48] Primary decision [13] - [14].
The AMS Partnership business also involved property ownership and investments.[49]
[49] Primary decision [15].
In these reasons, a reference to the Partnerships is a reference to the SIC Partnership and the AMS Partnership.

The Partnerships' real estate assets - the SIC Partnership Properties and the AMS Partnership Properties

The assets of the SIC Partnership included real property in West Perth and Mount Lawley.[50] The legal title to the property was held by Anthony and Maria as joint tenants.[51] These properties will be referred to as the SIC Partnership Properties.
[50] Primary decision [16] - [17].
[51] Primary decision [16].
The assets of the AMS Partnership included other real estate in Perth.[52] The legal title to these properties was also held by Anthony and Maria as joint tenants.[53] These properties will be referred to as the AMS Partnership Properties.
[52] Primary decision [19] - [20].
[53] Primary decision [19].
The SIC Partnership Properties and the AMS Partnership Properties are referred to collectively as the 'Partnership Properties'.

The death of Anthony Scolaro

Anthony died on 12 February 2011.[54]
[54] Primary decision [22].
Under Anthony's will, the balance of his estate was to be divided into equal portions to form three testamentary trusts:[55]
1.JASCO Testamentary Trust - of which John was to be the primary beneficiary.
2.RASCO Testamentary Trust - of which Rosana was to be the primary beneficiary.
3.DASCO Testamentary Trust - of which David was to be the primary beneficiary.
[55] Primary decision [23].

Maria Scolaro becomes registered proprietor of the Properties

In September 2011, Maria Scolaro became the registered proprietor of the SIC Partnership Properties and the AMS Partnership Properties as the surviving joint tenant of those properties.[56]
[56] Primary decision [27].

Partnership Deed provisions

SIC Partnership Deed

The SIC Partnership Deed contains the following provisions in relation to the death of a partner:[57]
17.If any partner shall die during the continuance of the said partnership the surviving spouse shall succeed to the share of the deceased partner by paying value therefor. If the surviving spouse elects not to succeed then he/she shall give notice to that effect within three months of the date of death or twentyeight (28) days of the Grant of Probate whichever is the later to the surviving partners THEN the surviving partners shall succeed to the share of the deceased partner by paying value thereof. If the surviving partners elect not to succeed then they shall give notice to that effect within twentyeight (28) days of receipt of the said notice from the surviving spouse of the deceased partner whereupon the partnership shall be deemed to be dissolved and the assets shall then be sold privately or by public auction and the surviving partners and the personal representative of the deceased partner may bid thereat. The price to be paid for the said share shall be the final value placed thereon for Western Australian Probate Duty and shall be payable on such terms as the partners exercising the right of succession and the personal representative of the deceased partner shall agree and failing agreement on terms settled by arbitration.
18.UPON the dissolution of the partnership a full and general account shall be taken of the assets credits debts and liabilities of the partnership and of the transactions and dealings thereof and with all convenient speed such assets and credits shall be sold realised and got in and the proceeds thereof applied in paying and discharging such debts and liabilities and the expenses of and incidental to the premises and the winding up of the partnership affairs and subject thereto in paying to each partner or his personal representative any unpaid profits or interest on capital which may be due to his share of the capital and the balance (if any) of such proceeds shall be divided between the partners in the shares to which they are entitled and the partners respectively or their personal representatives shall execute do or concur in all necessary or proper instruments acts matters and things for affecting or facilitating the sale realisation and getting in of the partnership assets and credits and the due application and division of the proceeds thereof and for their mutual release or indemnity or otherwise. (emphasis added)

AMS Partnership Deed

[57] Green AB 21 - 22.

The AMS Partnership Deed contains the following provisions relating to the death of a partner:[58]
[58] Green AB 34 - 35.
16.PROVISIONS RELATING TO DEATH
If either partner shall die then the remaining partner shall have the option to purchase the share and interest of the deceased partner in the capital assets and profits of the partnership SUBJECT TO the remaining partner taking over and assuming liability of the deceased partner for the debts and liabilities of the partnership. Such option shall be exercisable by the remaining partner giving to the legal personal representative of the deceased partner notice in writing of his or her intention to exercise the same. Such notice shall be given within a period of THREE (3) CALENDAR MONTHS from the date of death of the deceased partner. In the event of the said option to purchase not being exercised within the period hereinbefore specified THEN the partnership shall upon the expiration of the said period be dissolved and the provisions of Clause 19 hereof shall apply.
…
19.WINDING UP ON DETERMINATION
Subject to Clauses 13, 16 and 18 hereof in the event of the partnership being determined by any event not otherwise specifically provided for a full and general account and valuation shall be taken of the assets credits debts and liabilities of the partnership and of all transactions and dealings relating thereto and such assets and credits shall with all convenient speed be sold realised and got in.
…
Each partner shall execute do or concur in all necessary or proper instruments acts matters and things for effecting or facilitating the sale realisation and getting in of the partnership assets and credits and the due application and division of the profits thereof and for their mutual release or indemnity or otherwise. (emphasis added)

Dissolution of Partnerships

On 12 May 2011, the AMS Partnership dissolved in accordance with the AMS Partnership Deed.[59]
[59] Primary decision [24].
As at 12 May 2011, the value of the cash or other current assets of the AMS Partnership exceeded its liabilities.[60]
[60] Primary decision [25(b)].
On 15 March 2012, the SIC Partnership dissolved in accordance with the SIC Partnership Deed.[61]
[61] Primary decision [28].
As at 15 March 2012, the value of the cash or other current assets of the SIC Partnership exceeded its liabilities.[62]
[62] Primary decision [29(b)].
The AMS Partnership Properties and the SIC Partnership Properties were not sold in accordance with the winding‑up provisions in the respective deeds of partnership, or otherwise.[63]
[63] Primary decision [31].

Death of John Scolaro

On 7 August 2012, John (one of the children of Anthony and Maria and a member of the SIC Partnership) passed away.[64]
[64] Primary decision [30].
John did not leave a will. Under the Administration Act 1903 (WA) his estate was to be divided as follows:[65]
1.One-third to his wife, Bianca Scolaro (Bianca).
2.One-sixth to each of his four children, Diana Scolaro (Diana), Loretta Scolaro (Loretta), Emily Scolaro (Emily) and Christina Irdi (Christina).
[65] Primary decision [30].

The 2013 Deeds

On 1 December 2013, Maria, Rosana, David, Bianca, Diana and Rojoda entered into a deed (SIC Partnership 2013 Deed) in connection with the SIC Partnership.[66]
[66] Primary decision [37].
On 1 December 2013, Maria, Rosana, David, Bianca, Diana and Rojoda entered into a deed (AMS Partnership 2013 Deed) concerning the AMS Partnership.[67]
[67] Primary decision [32].
In these reasons, the SIC Partnership 2013 Deed and the AMS Partnership 2013 Deed will be referred to as the '2013 Deeds'.

The SIC Partnership Deed of 1 December 2013

The SIC Partnership 2013 Deed has two clauses both numbered 3. I will refer to the first of those clauses as cl 3A and the second clause numbered 3 as cl 3.

Recitals

The SIC Partnership 2013 Deed included recitals to the following effect:[68]
[68] Green AB 80 - 83.
1.The parties of the SIC Partnership up to 12 February 2011 were:[69]
[69] Recital B.
(a)Anthony and Maria as trustees of the AMS Partnership - 40%; and
(b)John, Rosana and David - 20% each.
2.The legal title to the SIC Partnership Properties was held on trust for the SIC Partnership, by Anthony and Maria until Anthony's death, and thereafter by Maria.[70]
[70] Recitals C - F.
3.After Anthony's death, the other partners did not exercise their option to purchase Anthony's interest and, in accordance with the terms of the SIC Partnership Deed, the SIC Partnership was 'dissolved' on 15 March 2012.[71]
[71] Recitals G - I.
4.As at 15 March 2012, the SIC Partnership Properties were beneficially owned by:[72]
[72] Recitals J - L.
(a)Anthony's estate - 20%;
(b)Maria - 20%; and
(c)John, Rosana and David - 20% each.
5.As to the 20% interest held by Anthony's estate, that was to be divided equally between three testamentary trusts:[73]
[73] Recital M.
(a)the JASCO Testamentary Trust (for the benefit of John and his family);
(b)the RASCO Testamentary Trust (for the benefit of Rosana and her family); and
(c)the DASCO Testamentary Trust (for the benefit of David and his family).
6.John died intestate on 7 August 2012, and Diana is the administrator of his estate.[74] By operation of law, John's beneficial share of the Properties passed to Bianca (as to one‑third) and to his children, Diana, Loretta, Christina and Emily equally (as to two‑thirds).[75]
[74] Recitals N, P, U.
[75] Recital U.
7.Diana and Bianca are the trustees of the JASCO Testamentary Trust, Rosana is the trustee of the RASCO Testamentary Trust and David is the trustee of the DASCO Testamentary Trust.[76]
[76] Recitals Q - S.
8.Rosana and David are the executors of Anthony's estate, and wish to transmit that estate's beneficial interest in the SIC Partnership Properties in one‑third portions to each of the JASCO Testamentary Trust, the RASCO Testamentary Trust and the DASCO Testamentary Trust.[77]
[77] Recitals O, T.
9.After this transmission, the SIC Partnership Properties will be beneficially owned by:[78]
[78] Recital V.
(a)Maria - as to 6/30 or 20% (as a former Partner in the SIC Partnership);
(b)the JASCO Testamentary Trust, the RASCO Testamentary Trust and the DASCO Testamentary Trust - 2/30 each (being one‑third each from the 20% share in the SIC Partnership held by Anthony's estate);
(c)Rosana - 6/30 or 20% (as a former Partner in the SIC Partnership);
(d)David - 6/30 or 20% (as a former Partner in the SIC Partnership); and
(e)John's wife (Bianca) and children (Diana, Loretta, Christina and Emily) - collectively 6/30 or 20% (being their transmitted portion on intestacy of John's 20% interest in the SIC Partnership Properties, as a former Partner in the SIC Partnership).
9.Maria is being replaced as trustee of the SIC Partnership Properties by the New Trustee (Rojoda).[79]

Operative provisions

[79] Recital W.

Clause 1 of the SIC Partnership 2013 Deed provides:
1.The parties acknowledge and agree that:
a.Maria Scolaro as surviving spouse has elected not to succeed to the share of the [SIC] Partnership of the late Anthony Scolaro for the purposes of clause 17 of the [SIC Partnership Deed].
b.The surviving partners of the [SIC] Partnership have elected not to succeed to the share of the [SIC] Partnership of the late Anthony Scolaro for the purposes of clause 17 of the [SIC Partnership Deed].
c.The [SIC] Partnership dissolved on 15 March 2012.
d.On dissolution of the [SIC] Partnership, the [SIC Partnership] Properties and other assets that were previously held by the [SIC] Partnership were beneficially owned:
20% by the estate of the late Anthony Scolaro;
20% by Maria …;
20% by Rosana …;
20% by John …;
20% by David.
Clause 2 concerns the transmission, by the executors of Anthony's estate, of that estate's 20% 'beneficial share' in the SIC Partnership Properties:
2.Rosana … and David …, as the Executors of the estate of the late Anthony …, hereby transmit pursuant to clause 7 of the Will of Anthony … that estate's beneficial share of the [SIC Partnership] Properties in the following onethird portions:
a.a onethird portion to Bianca … and Diana … as trustees of the JASCO Testamentary Trust;
b.a onethird portion to Rosana … as trustee of the RASCO Testamentary Trust;
c.a onethird portion to David … as trustee of the DASCO Testamentary Trust.
Clause 3A deals with the transmission, by the administrator of John's estate, of John's estate's 'beneficial share' in the SIC Partnership Properties:
3.Diana …, as the Administrator of the estate of the late John …, hereby transmits pursuant to the Administration Act that estate's beneficial share of the [SIC Partnership] Properties in the following portions:
a.a onethird portion to Bianca …;
b.a onesixth portion to each of Diana …, Loretta …, Christine … and Emily.
Clause 3 of the SIC Partnership 2013 Deed provides:
3.Maria …, as the trustee holding the titles of the [SIC Partnership] Properties, confirms that, following the transmissions at clauses 2 and [3A] above, she holds the [SIC Partnership] Properties on trust as follows:
•a 6/30^thsor 20% interest in the [SIC Partnership] Properties is held for the benefit of herself, Maria …, as a previous 50% Partner in the former [AMS Partnership], which partnership held a 40% interest in the Scolaro Investment Company Partnership;
•a 2/30^ths interest in the [SIC Partnership] Properties is held for Bianca … and Diana … as the trustees of the JASCO Testamentary Trust;
•a 2/30^ths interest in the [SIC Partnership] Properties is held for Rosana … as the trustee of the RASCO Testamentary Trust;
•a 2/30^thsinterest in the [SIC Partnership] Properties is held for David … as the trustee of the DASCO Testamentary Trust;
•a 6/30^thsor 20% interest in the [SIC Partnership] Properties is held for the benefit of Rosana … as a previous 20% Partner in the former [SIC] Partnership;
•a 6/30^thsor 20% interest in the [SIC Partnership] Properties is held for the benefit of David … as a previous 20% Partner in the former [SIC] Partnership;
•a 2/30^thsinterest in the [SIC Partnership] Properties is held for Bianca …;
•a 1/30^thsinterest in the [SIC Partnership] Properties is held for Diana …;
•a l/30^thsinterest in the [SIC Partnership] Properties is held for Loretta …;
•a l/30^thsinterest in the [SIC Partnership] Properties is held for Christine …;
•a 1/30^ths interest in the [SIC Partnership] Properties is held for Emily …
(In the case of the [SIC Partnership] Properties in which the former Partnership held a 50% interest, the above applies to that 50% interest in those Properties.) (emphasis added)
Clause 4 of the SIC Partnership 2013 Deed provides:
4.Following the steps at clauses 2 and 3 above, Maria Scolaro resigns as trustee of the [SIC Partnership] Properties, and the parties agree that [Rojoda] is appointed as replacement trustee of the [SIC Partnership] Properties in her place. Transfers shall be prepared and executed to transfer the legal title of the [SIC Partnership] Properties from Maria Scolaro to [Rojoda]. (In the case of the [SIC Partnership] Properties in which the former Partnership held a 50% interest, the transfer will be of the legal title to a 50% interest in the [SIC Partnership] Properties.) These transfers will transfer the legal title to the [SIC Partnership] Properties only, and the beneficial ownership of the [SIC Partnership] Properties will remain unchanged as set out in clause 3 above.

The AMS Partnership Deed of 1 December 2013

Recitals

The AMS Partnership 2013 Deed included recitals to the following effect:[80]
[80] Green AB 92 - 94.
1.Anthony and Maria each held a 50% share in the AMS Partnership up to 12 February 2011.[81]
[81] Recitals A - B.
2.The AMS Partnership Properties were held by Anthony and Maria on trust for the AMS Partnership until Anthony's death, whereafter Maria became the sole registered proprietor as trustee for the AMS Partnership.[82]
3.Maria did not exercise the option to purchase Anthony's share under the AMS Partnership Deed, and the AMS Partnership dissolved in accordance with the provisions in the AMS Partnership Deed on 12 May 2011.[83]
4.On dissolution of the AMS Partnership on 12 May 2011, the AMS Partnership Properties were beneficially owned as to 50% each by Maria and Anthony's estate.[84]
5.By Anthony's will, his interest is to be divided equally between the JASCO Testamentary Trust, the RASCO Testamentary Trust and the DASCO Testamentary Trust, and the executors of Anthony's will wish to transmit Anthony's estate's interest in the AMS Partnership Properties to the trustees of those trusts.[85]
6.After the above transmission, the AMS Partnership Properties will therefore be beneficially owned as follows:[86]
(a)50% or 3/6^ths by Maria (as a former Partner in the AMS Partnership);
(b)l/6^th by the JASCO Testamentary Trust (by transmission of a one‑third portion of the 50% share of the AMS Partnership held by Anthony's estate);
(c)l/6^th by the RASCO Testamentary Trust (by transmission of a onethird portion of the 50% share of the AMS Partnership held by Anthony's estate); and
(d)1/6^th by the DASCO Testamentary Trust (by transmission of a onethird portion of the 50% share of the AMS Partnership held by Anthony's estate).
[82] Recitals C - E.
[83] Recitals G - H.
[84] Recital I.
[85] Recitals J - O.
[86] Recital P.
Maria is being replaced as trustee of the SIC Partnership Properties by the New Trustee (Rojoda).[87]

Operative clauses

[87] Recital Q.

Clause 1 of the AMS Partnership 2013 Deed provides:
1.The parties acknowledge and agree that:
a.The option provided for in clause 16 of the [AMS] Partnership … for Maria … as the remaining Partner of the [AMS] Partnership to acquire the late Anthony Scolaro's share in the [AMS] Partnership has not been exercised, nor does Maria … wish to exercise that option or acquire that share.
b.The [AMS] Partnership dissolved on 12 May 2011.
c.On dissolution of the [AMS] Partnership, the [AMS Partnership] Properties and other assets that were previously held by the [AMS] Partnership were beneficially owned:
50% by the estate of the late Antony Scolaro; and
50% by Maria Scolaro.
Clause 2 of the AMS Partnership 2013 Deed provides:
2.Rosana … and David …, as the Executors of the estate of the late Anthony Scolaro, hereby transmit pursuant to clause 7 of the Will of Anthony Scolaro the estate's beneficial share of the [AMS Partnership] Properties in the following onethird portions:
a.a onethird portion to Bianca … and Diana … as trustees of the JASCO Testamentary Trust;
b.a onethird portion to Rosana … as trustee of the RASCO Testamentary Trust;
c.a onethird portion to David … as trustee of the DASCO Testamentary Trust. (emphasis added)

Clause 3 provides:
3.Maria Scolaro, as the trustee holding the titles of the [AMS Partnership] Properties, confirms that, following the transmission at clause 2 above, she holds the [AMS Partnership] Properties on trust as follows:
•a 50% or 3/6^ths interest in the [AMS Partnership] Properties is held for the benefit of herself, Maria Scolaro, as a previous 50% Partner in the former [AMS] Partnership;
•a l/6^th interest in the [AMS Partnership] Properties is held for Bianca … and Diana … as the trustees of the JASCO Testamentary Trust;
•a l/6^th interest in the [AMS Partnership] Properties is held for Rosana … as the trustee of the RASCO Testamentary Trust;
•a l/6^th interest in the [AMS Partnership] Properties is held for David … as the trustee of the DASCO Testamentary Trust.
(In the case of 9 Neil Street, Osborne Park, the above applies to the 50% share in that property held by Maria Scolaro as trustee.)
Clause 4 of the AMS Partnership 2013 Deed provides:
4.Following the steps at clauses 2 and 3 above, Maria Scolaro resigns as trustee of the [AMS Partnership] Properties, and the parties agree that [Rojoda] is appointed as replacement trustee of the [AMS Partnership] Properties in her place. Transfers shall be prepared and executed to transfer the legal title of the [AMS Partnership] Properties from Maria Scolaro to [Rojoda]. These transfers will transfer the legal title to the [AMS Partnership] Properties only, and the beneficial ownership of the [AMS Partnership] Properties will remain unchanged as set out in clause 3 above. (emphasis added)

The Duties Act 2008 (WA)

The Duties Act relevantly provides:
9.Terms used
…
declaration of trust means any declaration (other than by a will) that any identified property vested or to be vested in the person making the declaration is or is to be held in trust for the person or persons, or the purpose or purposes, mentioned in the declaration although the beneficial owner of the property, or the person entitled to appoint the property, may not have joined in or assented to the declaration[.]
…
10.Transfer duty imposed
Duty is imposed on dutiable transactions.
11.Dutiable transaction
(1)Subject to subsection (2), any of the following is a dutiable transaction
…
(c)a declaration of trust over dutiable property;
…
15.Dutiable property
Any of the following is dutiable property
(a)land in Western Australia;
…
78.Transfer of dutiable property of partnership to retiring partner, dutiable value of
(1)This section applies if, on a person (the retiring partner) ceasing to be a partner in a partnership because of the retiring partner's retirement from the partnership or its dissolution, dutiable property of the partnership is transferred or agreed to be transferred to the retiring partner.
(2)The dutiable value of a transfer of, or an agreement for the transfer of, dutiable property to the retiring partner must be reduced by an amount calculated by applying the retiring partner's partnership interest in the partnership to the unencumbered value of the dutiable property immediately before the retirement or dissolution.
Note for this subsection:
Example for subsection (2)
A, B and C are in partnership in equal shares. B had a onethird partnership interest immediately before retiring. On B ceasing to be a partner, A and C transfer land to B. The dutiable value of the land acquired by B will be reduced by onethird.

Findings of the Tribunal

The Tribunal found, in effect, that:
1.During the existence of the Partnerships, the relationship between the legal owners of the Properties and the other partners was not that of trustee/beneficiary, and the partners had no particular interest in any of the Properties.[88]
2.After the dissolution of the Partnerships, and prior to the execution of the 2013 Deeds, the relationship between the legal owners of the Properties and the other partners or the beneficiaries of their estates was not that of trustee/beneficiary, and the other partners or the beneficiaries of their estates had no particular interest in any of the Properties.[89]
3.By the execution of the 2013 Deeds, Maria holds the Properties as trustee pursuant to a trustee/beneficiary relationship.[90]
4.Clause 3 of each of the 2013 Deeds constituted a declaration of trust as defined in s 9 of the Duties Act.[91]
[88] Primary decision [114].
[89] Primary decision [121].
[90] Primary decision [122] - [127].
[91] Primary decision [128] - [129].

Grounds of Appeal and notice of contention

The grounds of appeal, in the appellant's case as filed, contain two grounds of appeal. Following the hearing, Rojoda applied to amend its grounds of appeal by adding a second limb to ground 1, in relation to a point which had been traversed to some extent in the course of the hearing of the appeal.
The grounds of appeal, pursuant to the amendment, if allowed, are as follows:
1.The learned Tribunal erred in law, alternatively as a matter of mixed law and fact, in holding that cl 3 of the [AMS Partnership 2013 Deed] and the cl 3 of the [SIC Partnership 2013 Deed] constituted 'declarations of trust' for the purpose of s 11(1)(c) of the Duties Act 2008 (WA) [reasons [128] & [129]] on the basis that:
(1)the Tribunal erred in holding that the [SIC Partnership Deed and the AMS Partnership Deed] had the effect of altering the status of the partnership property to property held on new trusts for the former partners and their successors [reasons [126], [136], & [138]], as pre‑execution the interest held by the former partners and their successors was the same right as that held pre‑dissolution of the partnerships [reasons [115] ‑ [116] & [121]]; alternatively
(2)if (contrary to the foregoing) the former partners and their successors did not obtain fixed equitable interests in the properties on dissolution by operation of law, the [SIC Partnership 2013 Deed and AMS Partnership 2013 Deed] - by clause 1(d) - constitute or evidence an agreement whereby the former partners and their successors provided for conversion of their partnership interests into fixed equitable interests in the properties. There were, however, no dutiable declarations of trust.
2.In the alternative, ie, if, contrary to Ground 1, the [SIC Partnership 2013 Deed and the AMS Partnership 2013 Deed] had the effect of declaring new trusts, the learned Tribunal erred in law in holding that cl 3 of the [AMS Partnership 2013 Deed] and cl 3 of the [SIC Partnership 2013 Deed] did not effect transfers of, or an agreement for the transfer of, dutiable property of the partnerships within s 78(2) of the Duties Act 2008 (WA) [reasons [136] & [138] ‑ [139]].
The Commissioner does not oppose the application to amend the grounds of appeal to include ground 1(2) on the basis that it has leave to rely upon a notice of contention.[92] The proposed notice of contention is in the following terms:
If the appellant establishes appeal ground 1(2), the Respondent contends that the orders of the Tribunal should be upheld upon the ground that the agreements constituted or evidenced by clause 1(d) of the AMS Partnership 2013 Deed and clause 1(d) of the SIC Partnership 2013 Deed were dutiable transactions within section 11(1)(c) of the Duties Act 2008 (WA).
[92] Respondent's supplementary submissions, par 2.
Rojoda does not oppose the Commissioner relying on the proposed notice of contention.[93]
[93] Appellant's submissions on Notice of Contention, par 1.
In the circumstances, leave should be given to Rojoda to amend its grounds of appeal to add ground 1(2), and the Commissioner should be given leave to file and serve a notice of contention in the terms referred to above.

The parties' submissions

Rojoda

Ground 1(1)

Rojoda contends, in effect, that immediately before the execution of the 2013 Deeds, Maria held the legal title to the Properties as bare trustee for the former partners in accordance with their former partnership interests. That is because, in effect (1) there had been a dissolution of the Partnership, (2) current assets were sufficient to discharge the liabilities of the Partnerships, (3) the Properties were accordingly not required for the purposes of the winding up of the Partnership, and (4) Maria held legal title to the Properties on trust for the former partners.[94]
[94] WAB 9 - 12.
In this connection, Rojoda refers to, and relies upon, the decision of Brinsden J in Cameron v Murdoch,[95] and on appeal to the Privy Council.[96]
[95] Cameron v Murdoch [1983] WAR 321.
[96] Cameron v Murdoch (1986) 60 ALJR 280.
Rojoda further submits that as bare trustee, Maria had no power to create any further or other equitable interest in the Properties. Clause 3 of the 2013 Deeds uses the word 'confirms' in relation to the existing position immediately prior to the 2013 Deeds. Accordingly, the 2013 Deeds did not amount to a declaration of any new trust.[97]

Ground 1(2)

[97] WAB 10.

Rojoda contends that if, under the general law, the partners (or their successors) did not obtain a fixed equitable interest in the Properties, the result is, in any event, achieved by cl 1(d) of the SIC Partnership 2013 Deed.[98] Rojoda contends that cl 1(a) ‑ (c) of the SIC Partnership 2013 Deed records certain facts by way of acknowledgement, while cl 1(d) operates by way of either acknowledgement or agreement. Insofar as cl 1(d) is an acknowledgement, it acknowledges the position under the general law (as contended for in ground 1(1)). Insofar as it is an agreement, it provides for, or evidences, a notional winding up under which the former partners agree that they have fixed equitable interests in the Properties. Amongst other things, Rojoda submits that the partners could, by agreement, convert that which was Partnership Properties into the separate property of individual partners.[99]

Ground 2

[98] There is a corresponding provision in cl 1(c) of the AMS Partnership 2013 Deed.

[99] Appellant's supplementary submissions, pars 13, 23 - 28. Reference is made to Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29 [43] ‑ [44].

Ground 2 of Rojoda's grounds of appeal is framed in the alternative to ground 1. Rojoda contended that if, contrary to ground 1(1), the 2013 Deeds had the effect of declaring new trusts, their effect was to 'transfer' to each former partner his or her pre‑existing equitable interest in the Properties. That was a 'transfer' of 'property of the partnership' within the meaning of s 78(1) of the Duties Act and, by s 78(2), the dutiable value is reduced to nil.[100] In this regard, Rojoda contends:[101]
Under s 78(2) of the Duties Act … the dutiable value of the entire equitable interest in the Properties as transferred to the former partners is reduced by applying the former partners' partnership interests in the partnerships to the unencumbered value of the equitable interest immediately before the dissolution. That reduces the dutiable value to nil. The dutiable value is nil because each former partner obtains a fractional share in accordance with his or her partnership interest and collectively the former partners' partnership interests in the partnerships amount to the totality of the partnership interests in the partnerships.

The Commissioner

Ground 1(1)

[100] WAB 14 - 17; appellant's written submissions, pars 46 - 60.

[101] WAB 17; appellant's written submissions, par 60.

The Commissioner contends that prior to the conclusion of liquidation of a partnership, there is no true relationship of trustee and beneficiary between the partner or partners who legally own the partnership property, and the partners of the partnership.[102] The Commissioner also submits that a partner's beneficial interest in each of the assets of the partnership subsists until the partnership has actually or notionally been wound up.[103]
[102] Reference was made to Sze Tu v Lowe [2014] NSWCA 462; (2014) 89 NSWLR 317 [123] - [124];WAB 30; respondent's written submissions, par 31.
[103] WAB 31 - 32; respondent's written submissions, pars 32 - 33. Reference is made to Atwell v Roberts [2013] WASCA 37; (2013) 43 WAR 507 [143] and Beale v Trinkler [2007] NSWSC 1058 [8].
The Commissioner also submits that the parties may, at any time during the existence of a partnership, by unanimous agreement, convert partnership property into property held upon a trust for them, rather than as property held for the purposes of the partnership. The Commissioner says that, in principle, there is no reason why such an agreement about conversion of partnership property could not also be made after dissolution of a partnership, but prior to the completion of liquidation, so long as adequate provision was made for the payment of partnership liabilities.[104]
[104] WAB 32; respondent's written submissions, pars 35 - 36, with reference to Hancock Prospecting [43] - [44], and 'Lindley & Banks On Partnership' (Sweet & Maxwell, 19th ed 2010) [18‑41].
The Commissioner also contends that Cameron (at first instance and on appeal) is irrelevant for present purposes because:
1.The decision only concerned whether a testator (Jack) 'had a sufficient interest as a former partner to transmit [his] interest by will', and not whether he had 'obtained a vested interest, in specie, in particular partnership land'.[105]
2.Brinsden J treated the testator's interest as a former partner as equivalent to an interest of a beneficiary in an unadministered estate, which is consistent with Brinsden J not reciting Jack's interest as a former partner as vested in specie.[106]
3.The testator's interest was not vested, but was contingent on the taking of accounts.[107]
4.The declaration of Brinsden J was to the effect that the interest devised by the testator was in the whole of the land, and not a specific interest in the land.[108]
5.Cameron on appeal does not suggest that prior to completion of a winding up, former partners in a solvent partnership have a specific and vested equitable interest in partnership land which is equivalent to the interest of a beneficiary under a bare trust.[109]

Ground 1(2) and the notice of contention

[105] WAB 36; respondent's written submissions, par 52.

[106] WAB 36; respondent's written submissions, par 53.

[107] WAB 36; respondent's written submissions, par 54.

[108] WAB 37; respondent's written submissions, par 55, with reference to order 8 of Cameron v Murdoch [1983] WAR 321, 363.

[109] WAB 38; respondent's written submissions, par 61, with reference to Cameron v Murdoch (1986) 60 ALJR 280, 287.

The Commissioner refers to recitals I, J and L of the SIC Partnership 2013 Deed to the effect that the former partners were beneficial owners of the SIC Partnership Properties upon dissolution on 15 March 2012. The Commissioner contends that these recitals are inconsistent with the proposition that cl 1(d) may be construed as an agreement that the former partners (or their successors) obtain fixed equitable interest in the partnership assets. The Commissioner contends that cl 1(d) represents an agreement that their affairs should be governed by the acknowledgements made in the recitals. The Commissioner says that cl 1(d) represents an agreement that something has previously occurred, and is not an agreement which itself brings about a conversion of partnership assets into the separate property of former partners or their successors.[110]
[110] Respondent's supplementary submissions, pars 8 - 18.
The Commissioner also contends that, as cl 1(d) refers to John and the estate of Anthony, and not to the beneficiaries of those estates, it cannot have been intended to have the effect of separating property of the former partnership into the parts to be held by the ultimate beneficiaries specified in cl 3.[111]
[111] Respondent's supplementary submissions, pars 19 - 20.
In relation to the notice of contention, the Commissioner submits:[112]
30.[T]he particular conversion agreement, if it existed in the present case, changed the equitable obligation of the trustee holding the property on account of the partnership to an equitable obligation of the trustee to hold the property on a bare trust for different beneficiaries.
31.That change in the equitable obligation may not constitute a transfer of dutiable property, but it certainly represents a declaration of trust. The new bare trust is not equivalent in any sense to the previous obligations binding a trustee holding property on account of a partnership.
32.On that basis, any conversion agreement of the type which the appellant now says existed by reason of cl 1(d) of the [SIC Partnership 2013 Deed] would be subject to duty by reason of s 11(1)(c).
[112] Respondent's supplementary submissions, pars 30 - 32.

Partnership principles

Dissolution

Any change in the membership of the partnership, whether occurring as a result of retirement, death or otherwise, effects a dissolution, or in other words the termination, of the partnership.[113]
[113] Atwell v Roberts [2013] WASCA 37; (2013) 43 WAR 507 [11(a)], [122].
The general rule is that on the dissolution of the 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.[114] This process is commonly described as a 'general dissolution' (as opposed to a 'technical dissolution').[115]
[114] Partnership Act 1895 (WA) s 50.
[115] Commissioner of State Taxation of the State of South Australia v Cyril Henschke Pty Ltd [2010] HCA 43; (2010) 242 CLR 508 [12], [14].
Where a partner retires by mutual agreement on terms that the remaining partners will continue in partnership and take on the assets and liabilities of the old firm, without a break in the continuity of the business, the dissolution effected by the retirement of the partner is often described as a 'technical dissolution' or a 'notional dissolution'.[116] The reference to a 'technical' or 'notional' dissolution is somewhat of a misnomer, because it is not the dissolution itself, but, at most, the winding up of the partnership, which is notional.[117] The partnership practising after the retirement of a partner is a different partnership than prior to that partner retiring,[118] but the assets and responsibility for liabilities of the partnership are taken over by the remaining partners.[119]
[116] Fazio v Fazio [2012] WASCA 72 [65]; see also, generally, Cyril Henschke [11] ‑ [12]; Atwell [11(c)], [125], [307].
[117] Atwell [11(c)], [125]; Fazio [65].
[118] Cyril Henschke [11], referring to Hadlee v Commissioner of Inland Revenue (NZ) [1989] 2 NZLR 447, 455.
[119] Atwell [11(c)], [125], referring to Cyril Henschke [12]; Fazio [65]; Rushton (Qld) Pty Ltd v Rushton (NSW) Pty Ltd [2002] QCA 210; [2003] 1 Qd R 320 [9].
In relation to a general dissolution, s 57 of the Partnership Act provides, relevantly for present purposes:
57.Rules for distribution of assets on final settlement of accounts
(1)In settling accounts between the partners after a dissolution of partnership, the rules set out in subsections (2) and (3) shall, subject to any agreement, be observed.
…
(3)The assets of the firm, including the sums, if any, contributed by the partners to make up losses or deficiencies of capital, shall be applied in the following manner and order -
(a)in paying the debts and liabilities of the firm to persons who are not partners therein;
(b)in paying to each partner rateably what is due from the firm to him for advances as distinguished from capital;
(c)in paying to each partner rateably what is due from the firm to him in respect of capital;
(d)the ultimate residue, if any, shall be divided among the partners in the proportion in which profits are divisible. (emphasis added)

Partnership property

A partner holding the legal title to property of the partnership holds it on trust for the members of the partnership, as the partner's sole and separate (legal) ownership is acknowledged to be for the account of the firm.[120]
[120] Carter Bros v Renouf [1962] HCA 67; (1962) 111 CLR 140, 163; Sze Tu v Lowe [2014] NSWCA 462; (2014) 89 NSWLR 317 [126].
By s 30(1) of the Partnership Act, which speaks in terms of beneficial ownership,[121] the general principle is that all property originally brought into the partnership or acquired on account of the firm or for the purposes and in the course of the partnership business, must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agreement.[122]
[121] Carter Bros (163).
[122] Partnership Act s 30(1); Carter Bros (163 - 164); Sze Tu [123] ‑ [125].
Wherever the legal title to partnership property resides, the beneficial interest in the property belongs to the partnership, with an implied trust for sale for the purpose of realising the assets, and for the purpose of giving to the partners their interests when the partnership is wound up and an account is taken.[123]

A partner's interest in the partnership

[123] In re Bourne [1906] 2 Ch 427, 432 - 433; Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178, 193 ‑ 194.

Subject to a consideration of the decisions in Cameron, the principles in relation to the interests of a partner in the partnership may be sufficiently stated, for present purposes, as follows.
A partner's interest in a partnership, whilst the partnership is being carried on, or is in the course of being wound up,[124] is an equitable chose in action. The chose in action is a right to a proportion of the surplus after the realisation of the assets and payment of the debts and liabilities of the partnership. [125]
[124] Hendry v The Perpetual Executors and Trustees Association of Australia Ltd [1961] HCA 44; (1961) 106 CLR 256, 266; Burdett‑Coutts v Inland Revenue Commissioners [1960] 3 All ER 153, 159
[125] Federal Commissioner of Taxation v Everett [1980] HCA 6; (1980) 143 CLR 440, 446 ‑ 447; United Builders Pty Ltd v Mutual Acceptance Ltd [1980] HCA 43; (1980) 144 CLR 673, 688; Cyril Henschke [27] ‑ [28].
A partner's chose in action is a 'fractional interest in a surplus of assets over liabilities on a winding up and in the future profits of the partnership business'.[126] The interest of each partner can be finally ascertained only upon completion of the winding‑up of the partnership and the identification of any surplus share.[127] In this regard, the partner's share in the partnership is a right 'to have the assets applied in the payment of debts to have the surplus ascertained and to receive his share out of it'.[128]
[126] Cyril Henschke [24]; Bolton v Federal Commissioner of Taxation [1965] ALR 481, 485, 491; Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd [1974] HCA 22; (1974) 131 CLR 321, 327 ‑ 328; Partnership Act s 33.
[127] Cyril Henschke [25], referring to Livingston v Commissioner of Stamp Duties (Qld) [1960] HCA 94; (1960) 107 CLR 411, 453.
[128] Bakewell v Deputy Commissioner of Taxation (SA) [1937] HCA 11; (1937) 58 CLR 743, 770, 772.
But that is not to say that the partners have no interest in the assets of the partnership pending its final liquidation.[129] Each partner has, by virtue of his or her share in the partnership, a second (and related) right. It is a right with respect to each individual item of partnership property, constituting an interest in each such item, which the partner is entitled to assert as against the world.[130] The partner's interest in each asset of the partnership before winding up is an equitable or beneficial interest for priority purposes, and not a mere equity.[131] But a partner's interest in each item of partnership property beneficially belonging to the partnership, pending its final liquidation, is not a fixed proportion of each item. Nor is it an immediately ascertainable quantity of the item. This interest is:[132]
an indefinite and fluctuating interest, which at any given moment is in proportion to [the partner's] share in the ultimate surplus coming to [the partner] if at that moment the partnership were wound up and its accounts taken.
[129] Hendry (266).
[130] Haque v Haque (No 2) [1965] HCA 38; (1965) 114 CLR 98, 130; Livingston (453); Watson v Ralph [1982] HCA 35; (1982) 148 CLR 646, 650; Sharp v Union Trustee Co of Australia Ltd [1944] HCA 35; (1944) 69 CLR 539, 551; Perpetual Executors and Trustees of Australia Ltd v Federal Commissioner of Taxation [No 2] [1955] HCA 66; (1955) 94 CLR 2 (Thomas' Case), 28; United (687); Chan (194).
[131] Canny Gabriel (32); Cyril Henschke [26].
[132] Sharp (551); Thomas' Case (28); Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29 [42].
It has been said that the nature of a partners' interest in the partnership is somewhat analogous to that of a residuary legatee under a will.[133]
[133] Canny Gabriel (328); Cyril Henschke [25].
The right of a residuary legatee, prior to completion of the administration of the estate, is a right against the executors or administrators to have the estate duly administered, and the residue ascertained and disposed of according to the will or according to law. Prior to the administration of the estate, until the residue has been ascertained, there is no specific property capable of constituting the subject property of any trust in favour of the beneficiary.[134] Prior to then it 'could not be said at that stage what part or parts of the testator's property would need to be realised for the purposes of administration'.[135]
[134] Livingston (435 - 438), (450 - 453), (458 - 459); Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306, 312.
[135] Schultz (312).
The residuary beneficiary's right is to have the 'residuary estate ascertained and realised, either wholly or insofar as may be necessary for the purpose'.[136] Once, however, the administration is complete and the net residue has been ascertained, the residuary legatees are entitled to the residue so ascertained.[137] The executor whose executorial duties have ceased becomes the trustee for the persons entitled to the residue, either as express trustee if the executor is appointed both executor and trustee, or as constructive trustee if appointed only as executor.[138] Once the administration is complete, the residuary legatees, if sui juris, may agree that the residue be divided amongst them in specie, rather than be realised and distributed in cash.[139]
[136] Lord Sudeley v Attorney‑General [1897] AC 11, 21 (Lord Davey).
[137] Livingston (440), (449 - 450); Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694, 711; In re Rowe (1926) VLR 452, 454; Dr Barnardo's Homes National Incorporated Association v Commissioners for Special Purposes of the Income Tax [1921] 2 AC 1, 10. (In Barnardo's Homes, although the debts of the estate were small and had been paid shortly after probate had been granted, the administration continued beyond that because of legal proceedings involving the will. The dividends the subject of dispute were paid in the period whilst the administration was incomplete and the litigation was ongoing - Barnardo's Homes (6)).
[138] In re Haye's Will Trusts [1971] 1 WLR 758, 765; McCaughey v The Commissioner of Stamp Duties (1945) 46 SR (NSW) 192, 209 ‑ 211 (Jordan CJ - whose observations on this point are not inconsistent with the reasons of the majority of the High Court in Livingston, or the reasons of the Privy Council in Livingston); Pagels v McDonald [1936] HCA 15; (1936) 54 CLR 519, 526; New Zealand Insurance Company Ltd v Commissioner of Probate Duties [1973] VR 659, 664 ‑ 666, 670 ‑ 671.
[139] Lord Sudeley v Attorney‑General (21); Re Rowe (555); Molloy v Federal Commissioner of Land Tax [1937] HCA 62; (1937) 58 CLR 352, 360 ‑ 361; Re McPhail [1971] VR 534, 545. See also Jacobs' Law of Trusts (8th ed) [2309] ‑ [2310]
The members of a partnership may, similarly, agree to divide the surplus amongst them in specie once it has been ascertained.[140]
[140] Watson v Ralph [1982] HCA 35; (1982) 148 CLR 646, 655; see also Longley v ACN 090 609 868 Pty Ltd (in liq) [2010] FCA 1468; (2010) 76 ALR 728 [16] - [17] (in relation to distributions in specie by a liquidator in the winding up of a corporation).
A partner's interest in the surplus on dissolution also resembles the interest of a beneficiary in the assets of a trust.[141] The entitlement of the beneficiaries of a trust is confined to so much of the assets held by the trustee which constitute the property as is available after the liabilities in question have been discharged or provision has been made for them.[142]
[141] Rushton (327), referring to Everett (446).
[142] Chief Commissioner of Stamp Duties for NSW v Buckle [1998] HCA 4; (1998) 192 CLR 226 [48].

Cameron v Murdoch

As indicated earlier, Rojoda places particular reliance on Cameron, at first instance (Brinsden J) and on appeal to the Privy Council.[143] The significance and relevance of Cameron was contested by the Commissioner. It is convenient to refer in some detail to Cameron and the authorities on which Brinsden J relied.
[143] In the appellant's written submissions it refers to Cameron v Murdoch [1983] WAR 321, 343; Cameron v Murdoch (1986) 60 ALJR 280, 293; see also Connell v Bond Corporation Pty Ltd (1992) 8 WAR 352, 373; Ringthane Pty Ltd v Commissioner of State Taxation (WA) (1993) 26 ATR 489, 493; In re Holland [1907] 2 Ch 88, 91.
Before turning to the decisions themselves, it may be observed that the litigation in Cameron was fought in the context of, relevantly for present purposes, s 26 of the Wills Act 1970 (WA), which provided that unless a contrary intention appears, the following general rules of construction apply:
(a)the will is to be construed with reference to the property comprised in it, to speak and take effect as if it had been executed immediately before the death of the testator;
(b)property that is the subject of a disposition that is void or fails to take effect is to be included in any residuary disposition contained in the will.
In other words, the description of the subject matter of a gift is prima facie to be construed as comprising all the property which satisfies the terms of the description at the death of the testator (including property acquired by the testator after he or she has made their will) but where there is nothing answering any part of the description, the gift fails to take effect.[144]
[144] 'Theobald on Wills' (18th ed) [21-002], [21-024].
In the case of Cameron, James Cameron was a farmer who farmed in partnership with his two sons, Dougald and John (Jack).[145] The partnership (of these three partners) held certain lands in which each partner was beneficially entitled to a one‑third interest.[146] The partnership dissolved on James' death on 15 April 1940.[147]
[145] Cameron [1983] WAR 321 (324 - 325).
[146] Cameron [1983] WAR 321 (325).
[147] Cameron [1983] WAR 321 (324).
There was a dispute as to whether a parcel of land, known as ML 1659, was property of the partnership between James, Dougald and Jack.[148] Brinsden J held that ML 1659 formed part of the assets of the partnership as at the date of James' death.[149] Jack, by his will, purported to devise his interest in ML 1659 to the second plaintiffs.[150] The second plaintiffs sought an order that the devise 'is effective to pass the whole of the interest in ML 1659 of which Jack was possessed or to which he was … entitled'.[151] Certain defendants (the eighth defendants) contended that the devise was of not 'effective' because Jack's only interest in ML 1659 arose from the fact that he had a one‑third (9/27^ths) share in the partnership which held the land, and had a 1/27^th interest in the land as a beneficiary of James' estate.[152]
[148] Cameron [1983] WAR 321 (325), (327).
[149] Cameron [1983] WAR 321 (333 - 334).
[150] Cameron [1983] WAR 321 (342).
[151] Cameron [1983] WAR 321 (331).
[152] Cameron [1983] WAR 321 (342 - 343). The reference to 'effective' in both the second plaintiffs' claim and the eighth defendants' resistance to it, appears to be reference to the phrase 'fails to take effect' in s 26(1)(b) of the Wills Act quoted in [76] above.
Brinsden J said:[153]
In my view the following cases establish that the devise is effective to the extent of the totality of Jack's interest in the land whether as beneficiary under the estate of James, or through his interest in the partnership, the totality of that interest being 10/27 which accordingly seems to me to go to the second plaintiffs. The cases are Re Holland [1907] 2 Ch 88; Re Mulder; Westminster Bank Ltd v Mulder [1943] 2 All ER 150; Hendry v The Perpetual Executors and Trustees Association of Australia Ltd (1961) 106 CLR 256; Re O'Callaghan (decd) [1972] VR 248 at 255 and Re Leigh's Will Trusts [1907] 1 Ch 277. 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. (emphasis added)
[153] Cameron [1983] WAR 321 (343).
Accordingly, it appears that Brinsden J held, in effect, that Jack had a fixed 10/27^th interest in the land (ML 1659) itself comprising: (1) a 9/27^th in the land because there were no partnership debts other than those that would necessarily be incurred in the taking of accounts, because the land formed part of the ultimate residue for accounting purposes, and because (implicitly) the debts in question would not exceed the value of the land; and (2) a 1/27^th in the land because the residue of James' estate had been ascertained, or as least sufficiently ascertained, to treat the residue as being, or including, the land. In other words, the court treated Jack's interest in the land as specific and vested, rather than merely contingent.
The orders proposed by Brinsden J included a declaration that the partnership between James, Dougald and Jack had dissolved on 15 April 1940, an order that the partnership be wound up, and orders for the finalisation of accounts.[154] With respect to ML 1659, his Honour declared:[155]
that the devise of ML 1659 in the will [of Jack] to the second plaintiffs is effective to pass to them the interest of [Jack] in the said land, namely 10/27^ths of the entirety'. (emphasis added)
[154] Proposed order 2, Cameron [1983] WAR 321 (362 - 363).
[155] Proposed order 8, Cameron [1983] WAR 321 (363).
On appeal to the Privy Council,[156] Lord Brandon of Oakbrook, speaking for the Board, said:[157]
The contention of the eight respondents on their cross‑appeal was that the devise contained in cl 3(b) of Jack's will was ineffective to pass any interest in ML 1659 to the beneficiaries named in it. The grounds of this contention were that neither the interest of Jack, nor that of the estate of James, in the original partnership property, and therefore in any particular part of it, had been ascertained at the date of Jack's will, because the original partnership had not yet been wound up and the accounts relating to it finally settled; and that it was not possible to construe cl 3(b) of Jack's will as passing what was as yet an unascertained interest of Jack in the land concerned.
Various authorities were citied to their Lordships by counsel for the eighth respondents which were said to support their contention. In their Lordships' view, however, none of these authorities was determinative of the present case. The general principle to be applied in construing the provisions of a will or other legal instrument is to construe them, if possible, in such a way as to make them have some effect rather than no effect. The ground of this principle is that it is reasonable to presume that the maker of the will, or other legal instrument, would not include a provision in it unless he intended it to have at least some effect.
In their Lordship's view, it would be wrong to say that, because the precise share which first Jack and secondly the estate of James had in ML 1659 had not been finally ascertained at the date of Jack's will, therefore Jack had no interest in ML 1659 which cl 3(b) of his will was capable of passing to the beneficiaries named in it. It was held by the High Court of Australia in Canny Gabriel … that a partner had an interest in every partnership asset and that such interest was an equitable interest and not a mere equity. Their Lordships respectfully agree with that decision, which leads to the conclusion that, when Jack made his will, both he and the estate of James had equitable interests in every part of the original partnership assets, including ML 1659. There was no suggestion that, on the winding up of the original partnership it would be necessary to sell ML 1659, or any part of it, in order to pay off partnership debts. That being so, their Lordships consider that there is no difficulty in supporting the finding of Brinsden J that the amount of Jack's equitable interest in ML 1659 at the date of his will was 10/27^ths.
Applying the general principle of construction referred to above their Lordships agree with the conclusion of Brinsden J that, on the true construction of cl 3(b) of Jack's will, that clause was effective to pass to the beneficiaries named in it, Jack's 10/27^ths equitable interest in ML 1659. (emphasis added)
[156] Comprising Lord Keith of Kinkel, Lord Roskill, Lord Brandon of Oakbrook, Lord Mackay of Clashfern and Sir Robert Megarry.
[157] Cameron (1986) 60 ALJR 280, 293.
The case of Hendry, referred to by Brinsden J in Cameron,[158] concerned the operation of a will under which the testator left 'all my livestock' to A, the proceeds of conversion 'of all my real estate' to B, and the residue of his personal estate to C.[159] The testator was a member of a partnership which held land and livestock, though the testator had no land or livestock beyond his interest in the partnership.[160] The legal representatives of the partners subsequently realised the partnership assets (£2,749 for livestock, and £8,620 for real estate).[161] There were also current assets of approximately £5,000. The liabilities of the partnership were £132.[162] The residuary legatee contended that the testator had no livestock and no real estate, that the gifts to A and B failed, and that she was entitled to the whole of the estate.[163] The will was to be construed, with reference to the real estate and personal estate comprised in it, to speak and take effect as if it had been executed immediately before the death of the testator, unless a contrary intention appeared.[164] Taylor and Menzies JJ dismissed an appeal from Herring CJ who held that A and B were respectively entitled to (1) a sum equal to one half of the net proceeds of the sale of the livestock which at the date of death of the testator was an asset of the partnership, and (2) a sum equal to one half of the net proceeds of sale of the real estate which at the date of the death of the testator was an asset of the partnership.[165] Their Honours said:[166]
What has to be done is to determine what the testator meant by his words in his will and when the will is looked at in the light of the circumstances as they existed immediately before his death the conclusion is inevitable that he was dividing what he had into three parts, and that he was disposing separately of whatever interest he had in livestock (which could only be his partnership interest), of the net proceeds of whatever interest he had in land (which, again, could only be his partnership interest), and of the net proceeds of whatever interest he had in personalty other than livestock. It may well be that there are difficulties in determining the net proceeds of the testator's real estate and of the residue of his personalty in this sense, but these difficulties afford no reason whatever for construing the will as effecting no division of his estate and as disposing of the whole of his property to his sister under the phrase 'the residue of my personal estate'. To do so would simply be to defeat the testator's manifest intention.
[158] Cameron [1983] WAR 321 (343).
[159] Hendry (264).
[160] Hendry (263 - 265).
[161] Hendry (260).
[162] Hendry (260).
[163] Hendry (264).
[164] Hendry (265); Wills Act 1928 (Vic) s 22 - the analogous statutory provision in Western Australia is the Wills Act 1970 s 26(1) referred to earlier.
[165] Hendry (260).
[166] Hendry (267).

In In re Holland, referred to by Brinsden J,[167] the testator (1) bequeathed his share and interest in a partnership upon certain trusts in favour of specified beneficiaries, and (2) then made a specific devise of his share in certain freehold land and houses, which had formed part of the partnership assets.[168] It was contended that the second gift was ineffective because the first gift carried with it the right to the testator's share of the surplus once it had been ascertained upon the winding up of the partnership.[169] The partnership assets, other than the land, were more than sufficient to pay the partnership debts (which totalled approximately £350).[170] Neville J said:[171]
It is said that that bequest fails because it turns out that the … houses and the land … are part of the partnership assets, and it is urged that the testator's share in the partnership is something that he could not dissociate from the rest of the partnership assets. That is perfectly true as between himself and his partner, but the question I have to determine is not between him and his partner, but between the beneficiaries claiming under his will, and the beneficiaries as between themselves are bound to give effect as best they can to the wishes the testator has expressed. I think the testator was entitled to treat his interest in this property as something he could separate from the rest of the partnership assets, and give it in a different direction to his general share in the business which he had previously disposed of by his will. The partnership was solvent, and the other partnership property was more than enough to clear the partnership debts. … No doubt these houses could not have been excluded from the general partnership assets and liabilities as between the partners themselves, but under the circumstances of the present case I think the testator was entitled to dispose of this particular part of the partnership assets in the way that he has done, and that the beneficiaries under his will are bound to give effect to that disposition. I also think that the specific legatees of the four houses are entitled to take them free from liability to contribute to the partnership debts. (footnote omitted) (emphasis added)
[167] Cameron [1983] WAR 321 (343); In re Holland was also cited with evident approval by Kitto J in Livingston (453) and in Thomas' Case [No 2] (28) - referring to Sharp (551).
[168] In re Holland (89 - 90).
[169] In re Holland (90).
[170] In re Holland (89 - 90).
[171] In re Holland (91).
Neville J in the case of In re Holland distinguished the decision in Farquhar v Hadden.[172] In Farquhar, the testator devised, to his co‑partner, his share of certain leasehold premises which formed part of the partnership property. The gift failed because the gifted interest 'simply consisted of an interest which the estate of a deceased partner has in equity in the assets of the partnership, that is to say, an interest subject to the payment of debts of the firm', and the partnership was insolvent as at the date of the testator's death.[173]
[172] Farquhar v Hadden (1872) LR 7 Ch 1 at In re Holland (91).
[173] Farquhar (6).
In each of the cases of Cameron, Hendry, In re Holland and Farquhar, the testator had an interest in a partnership which had not been wound up as at the date of testator's death. The nature of the testator's interest was such that it could only be finally ascertained upon completion of the winding up of the partnership and the identification of any surplus share.[174] Nevertheless, in addition to construing the wills in question, the courts in Cameron, Hendry and In re Holland also effectively concluded that the gifts were not ineffective because there was property answering the description of the gift.[175] In the case of Farquhar, conversely, the court found that because the partnership was insolvent, the gift was ineffective.
[174] Cyril Henschke [25].
[175] In Cameron at first instance, Brinsden J referred to the position as at the date of Jack's death, in accordance with s 26(1)(a) of the Wills Act. On appeal, their Lordships appear to have considered the position at an earlier time, namely the date of the execution of the will.
In Cameron, by proposed order 8, Brinsden J not only declared that the will was effective to pass to the second plaintiffs Jack's interest in ML 1659, but specified the interest ('namely'). The interest specified was a 10/27 share of the entirety of the land itself. Contrary to the Commissioner's submissions, Cameron was not merely concerned with whether Jack had a transmissible interest by will. His Honour also said and declared that in the particular circumstances, Jack had a specific and fixed interest in the land as a result of his interest in the partnership, and because he had an interest in the residue under James' will which was ascertained, or at least sufficiently ascertained, for that purpose.
The cases of Cameron and In re Holland indicate that consistently with equity's broad underlying theme of regarding substance over form and treating as done that which ought to be done[176] the ultimate residue or surplus had in the eye of equity been ascertained, or at least sufficiently ascertained in the particular circumstances, so that the disposition, in the circumstances, passed the testator's interest in a particular asset (the land itself), which, for all intents and purposes, was, or was treated as, vested. It was not treated as merely contingent as at the date of the deceased's death, and prior to the actual completion of the winding up and the taking of accounts. These cases, in my view, are not inconsistent with the general principles referred to in [108] ‑ [115] above, as understood in the context of the circumstances in which they were expressed and applied. In particular, the cases in which the principles referred to in [108] ‑ [115] were expressed and applied, do not address the question of whether the ascertainment of the ultimate residue is, in all circumstances, and for all relevant purposes, necessarily dependent upon the partners first actually discharging the firm's liabilities.
[176] Halloran v Minister Administering National Parks and Wildlife Act 1974 [2006] HCA 3; (2006) 229 CLR 545 [65]; Cock v Smith [1909] HCA 64; (1909) 9 CLR 773, 814 (Isaacs J); Parkview Pty Ltd v Commonwealth Bank of Australia [2013] NSWCA 422 [119]
Reasoning to similar effect was applied in the case of In re Ritson.[177] In that case, in relation to a devise of real estate which had been mortgaged by the testator to secure the debts of a partnership of which he was a partner, it was held that Locke King's Act[178] had no application, because at the time of the testator's death (when the partnership dissolved) the partnership was solvent. Chitty LJ said that the testator's interest in the partnership assets 'was only his share of the surplus after the payment of [partnership] debts. So there is in reality no charge upon the real estate'.[179] Vaughan Williams LJ said, in effect, that the partnership is solvent and 'there can be no question as to the incidence of the mortgage debt on the testator's personal estate'.[180] Lindley MR approved the primary judge's (Romer J's) observations to the effect that the 'surviving partner could have insisted on the partnership assets being applied to pay off partnership debt', and that the devisee of the real estate should not be in any different position.[181]
[177] In re Ritson [1899] 1 Ch 128.
[178] The Real Estate Charges Act 1854 (Locke King's Act 17 & 18 Vict.C113) by which provision was made for the devisee of land to take the devise subject to the debts charged on the land.
[179] In re Ritson (131) (emphasis added).
[180] In re Ritson (132).
[181] In re Ritson (131).

Disposition

It is generally unnecessary, for the purposes of the following discussion, to distinguish between the two partnerships. In what follows, unless otherwise indicated, the SIC Partnership Properties and the AMS Partnership Properties are referred to as 'Partnership Properties', the SIC Partnership and the AMS Partnership are referred to as the 'Partnership', and the SIC Partnership Deed and the AMS Partnership Deed are referred to as the 'Partnership Deed'.
The legal titles to the Partnership Properties were, until the death of Anthony, held by Anthony and Maria as joint tenants. They held the legal interest in the Properties on trust for the members of the Partnership (including themselves).[182] The members themselves held their beneficial interest in the Properties exclusively for the purposes of the Partnership and in accordance with the Partnership Deed.[183]
[182] See [63] above.
[183] See [64] - [65] above.
When Anthony died, on 12 February 2011, there was, at that point, a dissolution of the Partnership.[184] Provision was made in the Partnership Deed for the effectuation of a technical dissolution, ie, for the other partners to exercise rights to purchase Anthony's share subject to taking over and assuming Anthony's liability for the debts and liabilities of the Partnership. That, however, did not occur. Thereafter, a general dissolution of the Partnership commenced.[185]
[184] See [59] above.
[185] Primary decision [24], [28]. The date for the commencement of the general dissolution of the AMS Partnership was 12 May 2011, and for the SIC Partnership was 15 March 2012.
At that time, each partner had the right, as against the other partners, to have the assets of the Partnership applied to pay the debts and liabilities of the Partnership, and each partner had the corresponding obligation to join with the other partners in the realisation of the firm's assets to discharge the debts and liabilities of the Partnership, with a view to sharing in the ultimate residue. If the partners exercised their mutual rights and performed their mutual obligations, the creditors of the Partnership would obtain payment, however, the Partnership creditors themselves would have no right to compel performance. If debts were not paid, creditors' remedies would be against each partner who would be jointly liable.[186]
[186] Partnership Act s 16.
In the events which happened, upon commencement of the general dissolution, the Partnership's cash and other current assets exceeded its liabilities. In these circumstances, had a partner (hypothetically) prior to the dissolution on 12 February 2011, devised to a third party his or her interest in the Properties, the devise would have been effective to pass an equitable interest in the Properties commensurate with the interest that the testator/partner had on the basis that the Properties formed part of the ultimate residue of the Partnership.[187]
[187] See [88] - [90] above. There is no suggestion that at the earlier time of Anthony's death (12 February 2011), the Partnership's financial circumstances were materially different from those which existed as at the commencement of the general dissolution.
That being so, it is difficult to see why the equitable interest of a partner in the circumstances of this case should be regarded as any different in the absence of such a devise. The mutual rights and obligations of the partners remained as described in [135] above. The exercise of those rights and the performance of those obligations ought, and as a matter of practical certainty would, on the agreed facts, result in the debts and liabilities of the Partnership being paid out of cash and other current assets. For the purpose of determining the rights between the partners themselves, and between the partners and the holder of the legal estate of the Partnership's real property, equity would, in my view, treat as done that which ought to be done in this regard.[188] There is nothing in the agreed facts to suppose that any other partner might have grounds for applying to the court,[189] to have the Partnership wound up on the basis that the firm's liabilities should be discharged by the (lengthy and expensive process of) marketing and selling the Properties, as opposed to using the cash and other current assets immediately available for that purpose. Nor, if it were relevant, is there any suggestion or evidence that the liabilities of the Partnership were not discharged by the application of the firm's current assets, or that liabilities subsequently emerged after the commencement of the general dissolution which required the Properties to be sold.
[188] Cock (816); Halloran [65]; Parkview [119].
[189] Partnership Act s 50.
The result, in my view, is that as at the date of general dissolution of the Partnership, each partner (and in the case of Anthony, his estate) had rights in the Properties on the basis that they formed part of the ultimate residue of the Partnership.
Accordingly, at all material times after the commencement of the general dissolution and up to the execution of the 2013 Deeds, Maria held the Properties on constructive trust to sell them and account to the partners (or their personal representatives) for the proceeds of sale or, at their combined request, to transfer the legal title to them in accordance with their respective shares. From the commencement of the general dissolution up to the point of the execution of the 2013 Deeds, Maria thereby held the Properties on trust in the ordinary sense of that word,[190] and, moreover, on trust of a kind which might aptly be described for present purposes as a bare trust.[191] That being the case, Maria did not, in my view, have a beneficial interest in the Properties commensurate with the beneficial interest which, on the case advanced by the Commissioner and accepted by the Tribunal, was brought into existence by cl 3 of the 2013 Deeds.[192]
[190] The Registrar of the Accident Compensation Tribunal v The Commissioner of Taxation of the Commonwealth of Australia [1993] HCA 1; (1993) 178 CLR 145, 165 ‑ 166.
[191] Herdegen v Federal Commissioner of Taxation [1998] FCA 699 (1988) 84 ALR 271, 284.
[192] See DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1982] HCA 14; (1982) 149 CLR 431, 459.
Moreover, cl 3 does not purport, by its terms, to create a new trust. It refers to Maria as (already) the trustee 'holding the titles of the Properties'. In its terms, cl 3 is a confirmation that Maria holds the Properties on existing trusts, taking into account the interests of Anthony and John that had been transmitted by will (in the case of Anthony) and by law (in the case of John).[193] The language of cl 3 does not expressly refer to the creation of a trust. Nor does it expressly use the language of a declaration of trust. Ordinarily, the traditional attitude of equity is that, unless an intention to create a trust is clearly to be collected from the language used in the circumstances of the case, the court ought not be astute to discover indications of such an intention.[194] In my view, neither cl 3 in its ordinary meaning, nor read with regard to the nature of the transaction and the circumstances attending the relationship between the parties, yields the inference that Maria declared a trust, or created a new trust, by cl 3 of the 2013 Deeds.
[193] See cl 2 and cl 3A of the SIC Partnership 2013 Deed.
[194] Byrnes v Kendall [2011] HCA 26; (2011) 243 CLR 253 [49].
Accordingly, I would uphold ground 1(1). Consistently with the reasons of Buss P and Beech JA in [34] ‑ [40] above, the result is that this appeal should be upheld.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CL
Associate to the Honourable Justice Murphy
21 DECEMBER 2018