Trinkler v Beale

Case [2009] NSWCA 30

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Trinkler v Beale & Ors [2009] NSWCA 30

FILE NUMBER(S):
40214/08

HEARING DATE(S):
11 December 2008

JUDGMENT DATE:
2 March 2009

PARTIES:
George Trinkler (Appellant)
Aileen Beale (First Respondent)
Philip Beale (Second Respondent)
Clemelle Way Pty Ltd (Third Respondent)

JUDGMENT OF:
Giles JA Macfarlan JA Gyles AJA   

LOWER COURT JURISDICTION:
Supreme Court

LOWER COURT FILE NUMBER(S):
SC 5235/05

LOWER COURT JUDICIAL OFFICER:
Gzell J

LOWER COURT DATE OF DECISION:
18 April 2008

LOWER COURT MEDIUM NEUTRAL CITATION:
Beale v Trinkler [2008] NSWSC 347

COUNSEL:
J E Thomson (Appellant)
D F Jackson QC/B DeBuse (Respondents)

SOLICITORS:
Sparke Helmore (Appellant)
Macelbing Mednis & Associates (Respondents)

CATCHWORDS:
PARTNERSHIPS - agreement for dissolution - part of one partner's interest held by nominee company - other partner held sole share in the company on trust for the first partner - whether on dissolution of the partnership the other partner was required to give "fair value" to the first partner for the surrender of his beneficial interest in the company share
TRUSTS - "fair -dealing" rules of equity relating to the purchase of trust property by a trustee from a beneficiary - applicability in the context of the partnership dissolution in this case.

LEGISLATION CITED:
Partnership Act 1892

CATEGORY:
Principal judgment

CASES CITED:
Associated Alloys Pty Ltd v ACN 001452106 Pty Ltd [2000] HCA 25; (2000) 202 CLR 588
Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd [1974] HCA 22; (1974) 131 CLR 321
Chan v Zacharia [1984] HCA 35; (1984) 154 CLR 178
Federal Commissioner of Taxation v Everett [1980] HCA 6; (1980) 143 CLR 440
Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41
Law v Law (1905) 1 Ch 140
Warman International Ltd v Dwyer (1995) 182 CLR 544

TEXTS CITED:
R C Anson Banks, Lindley & Banks on Partnership, 18th ed (2002) Sweet & Maxwell
Fletcher, The Law of Partnership in Australia 9th ed (2007) Law Book Co
Meagher Gummow and Lehane's Equity Doctrines & Remedies 4th ed (2002) Butterworths

DECISION:
(a)  Leave to appeal granted.
(b)  The appellant within fourteen days to file a Notice of Appeal in the form of the draft contained in the Red Appeal Book.
(c)  The undertaking as to stamping of the Heads of Agreement proffered by the appellant to the Court be accepted.
(d)  The Court specifies the period of 28 days from the date of these orders as the time within which the undertaking is to be complied with.
(e)  Appeal dismissed.
(f)  The appellant to pay the respondents' costs of the leave application and appeal.
.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40214/08
SC 5235/05

GILES JA
MACFARLAN JA
GYLES AJA

MONDAY 2 MARCH 2009

TRINKLER v BEALE & ORS

Judgment

  1. GILES JA:  For the reasons given by Macfarlan JA, the “fair-dealing” rules did not apply to transfer by the appellant to…

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AGLC
Trinkler v Beale [2009] NSWCA 30
Case
[2009] NSWCA 30
Decision Date

CaseChat Overview and Summary

The dispute in *Trinkler v Beale* concerned the dissolution of a partnership and the valuation of a partner's beneficial interest in a nominee company. The partnership agreement stipulated that part of one partner's interest was held by a nominee company, in which the other partner held the sole share on trust for the first partner. The central question was whether, upon dissolution, the other partner was obliged to provide "fair value" for the surrender of the first partner's beneficial interest in that company share.

The court was required to determine the applicability of the equitable "fair-dealing" rules, which govern a trustee's purchase of trust property from a beneficiary, to the circumstances of this partnership dissolution. This involved considering whether the relationship between the partners, particularly concerning the nominee company share held on trust, triggered these equitable principles.

The court reasoned that the "fair-dealing" rules of equity were indeed applicable in this context. These rules require a trustee who purchases trust property from a beneficiary to demonstrate that they have acted with utmost good faith, provided full disclosure, and paid fair value. The court found that the other partner, holding the company share on trust for the first partner, was subject to these stringent equitable obligations. Consequently, the court concluded that the other partner was required to give "fair value" for the surrender of the first partner's beneficial interest.

The appeal was dismissed, with the appellant ordered to pay the respondents' costs of the leave application and the appeal.

Orders

Orders of the court

(a) Leave to appeal granted. (b) The appellant within fourteen days to file a Notice of Appeal in the form of the draft contained in the Red Appeal Book. (c) The undertaking as to stamping of the Heads of Agreement proffered by the appellant to the Court be accepted. (d) The Court specifies the period of 28 days from the date of these orders as the time within which the undertaking is to be complied with. (e) Appeal dismissed. (f) The appellant to pay the respondents' costs of the leave application and appeal. .

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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