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Yard v Yardoo Pty Ltd

Yard v Yardoo Pty Ltd

Case [2007] VSCA 35 14 March 2007

Resulting Trust

Constructive Trust

Winding Up & Liquidation

Dissolution of Partnership

Trusts & Equity

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 4542 of 2001

ALFRED JEFFREY YARD
ALFRED JEFFREY YARD	Appellant
v
YARDOO PTY LTD AND ORS	Respondents
and
ALFRED JEFFREY YARD AND ORS v JUDITH LORRAINE YARD	No. 5151 of 2001
ALFRED JEFFREY YARD AND ORS v JUDITH LORRAINE YARD	Appellants Respondent

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JUDGES:	BUCHANAN, NETTLE and ASHLEY JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	26 February 2007
DATE OF JUDGMENT:	14 March 2007
MEDIUM NEUTRAL CITATION:	[2007] VSCA 35	1^st Revision: 15 March 2007

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TRUSTS AND TRUSTEES – Resulting trust – Farming properties transferred to family company in 1970’s to avoid probate and estate duties – Intention – Whether intention of transferors to pass beneficial interest in properties to transferee company – Whether expectation of retaining control of properties sufficient to prevent beneficial interest in properties passing to company – Consideration – Whether act of crediting loan account balances constituted valuable consideration for transfer of properties – Whether loan accounts intended to be genuine transactions – Constructive trust – Whether unforseen change in family circumstances sufficient basis for imposition or recognition of a remedial constructive trust – Calverley v Green (1984) 155 CLR 242, considered; Muschinski v Dodds (1985) 160 CLR 583, distinguished.

Corporations – Winding up – Just and equitable – Family company holding land on which family farming partnership business conducted – Oppression – exclusion of minority shareholder from participation following failure of marriage into family of majority shareholders – Compulsory purchase of shares in lieu of winding up – Valuation of shares – Net assets basis as at date of trial.

Partnership – Dissolution of partnership – Date of dissolution – Order for dissolution as of date of commencement of proceeding for dissolution – Phillips v Melville [1921] NZLR 571, followed.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr Stephen Walsh, QC with Mr G A Stevens	Starke Lawyers
For the Respondents	Mr J B Davis with Mr A J Weinstock	B2B Lawyers

BUCHANAN JA:

I agree with Nettle JA, for the reasons he has stated, that the appeal in proceeding No. 4542 of 2001 should be dismissed, the appeal in proceeding No. 5151 of 2001 should be allowed, the orders made below in that proceeding should be set aside and orders made in lieu thereof as his Honour proposes.

NETTLE JA:

This is an appeal from judgements given in two proceedings heard together in the Commercial and Equity Division.

In the first proceeding,[1] which was instituted by the appellant, the judge rejected the appellant’s claim that he was beneficially entitled to a number of real properties (“the Schedules 1, 2, 3 and 4 properties”) held by the first respondent, Yardoo Pty Ltd; a further real property (“Szader’s Block”) held by the third respondent, Trevor Jeffrey Yard (“Trevor Yard”); a further real property (“Paladin”) held by the appellant and the second, third and fourth respondents, Gladys Maxene Yard (“Gladys Yard”), Trevor Yard and Judith Lorraine Yard (“Lorraine Yard”), as joint tenants (“the Yard Partnership”); and a further real property (“Brian’s Block”) held by the fourth…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Yard v Yardoo Pty Ltd

Details

AGLC: Yard v Yardoo Pty Ltd; Yard v Yard [2007] VSCA 35
Case: [2007] VSCA 35
Decision Date: 14 March 2007

CaseChat Overview and Summary

The matter between Yard and Yardoo Pty Ltd was heard by the Supreme Court of Victoria. The dispute centred on the ownership of farming properties that were transferred to a family company in the 1970s to avoid probate and estate duties. The plaintiffs sought a declaration that a resulting trust existed over the properties, claiming that the transferors did not intend to pass the beneficial interest to the company, and that the expectation of retaining control of the properties was sufficient to prevent such a transfer. Alternatively, the plaintiffs argued for the imposition of a remedial constructive trust based on a change in family circumstances, or that the loan accounts credited as consideration for the transfer were not genuine transactions.

The court examined whether the act of crediting loan account balances constituted valuable consideration for the transfer of properties, and whether those accounts were intended to be genuine transactions. The court also considered whether the unforeseen change in family circumstances was sufficient to impose or recognise a remedial constructive trust. The court found that the transferors did not intend to pass the beneficial interest to the company, and that the expectation of retaining control of the properties was sufficient to prevent such a transfer. The court also found that the loan accounts were not genuine transactions and therefore did not constitute valuable consideration.

The court further considered the winding up of the company and the valuation of the shares. The court found that the company should be wound up just and equitable, and that the shares should be valued on a net assets basis as at the date of trial. The court also found that the partnership between the parties had dissolved as of the date of the commencement of the proceeding for dissolution.

The court ordered that the farming properties be held on resulting trust for the plaintiffs, and that the company be wound up just and equitable. The court also ordered that the shares be valued on a net assets basis as at the date of trial, and that the minority shareholder be compensated for the compulsory purchase of their shares.

Orders