Trinkler v Beale

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.