Yard v Yardoo Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 4542 of 2001

BETWEEN

ALFRED JEFFREY YARD	Plaintiff
and
YARDOO PTY LTD	Firstnamed Defendant
GLADYS MAXRENE YARD	Secondnamed Defendant
TREVOR JEFFREY YARD	Thirdnamed Defendant
JUDITH LORRAINE YARD	Fourthnamed Defendant

AND

No. 5151 of 2001

BETWEEN

JUDITH LORRAINE YARD	Plaintiff
And
TREVOR JEFFREY YARD	Firstnamed Defendant
ALFRED JEFFREY YARD	Secondnamed Defendant
GLADYS MAXRENE YARD	Thirdnamed Defendant
YARDOO PTY LTD	Fourthnamed Defendant

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JUDGE:	Cummins J
WHERE HELD:	Melbourne
DATES OF HEARING:	26-28 July, 13-14 September, 21 October 2004; 16-22 March, 4 April 2005
DATE OF JUDGMENT:	24 March 2006
CASE MAY BE CITED AS:	Yard v Yardoo Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2006] VSC 109

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Family dispute – rural properties – companies – partnerships – trusts – value of non-monetary contribution by wife and mother – oppression – ss.232 and 233 Corporations Act 2001 – ss.39(f) and 43 Partnership Act 1958 – winding up of company – dissolution of partnership.

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In proceeding no. 4542 of 2001

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G.A. Stevens	J. King and Associates
For the fourth Defendant	Mr I. R. Jones	B2B Lawyers

In proceeding no. 5151 of 2001

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr I. R. Jones	B2B Lawyers
For the second Defendant	Mr G.A. Stevens	J. King and Associates

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TABLE OF CONTENTS

THE PROCEEDINGS........................................................................................................................ 1

THE CLAIM IN PROCEEDING NO. 4542 OF 2001.................................................................... 8

THE CLAIM IN PROCEEDING NO. 5151 OF 2001.................................................................. 19

WITNESS EVIDENCE.................................................................................................................... 28

SUBMISSIONS ON BEHALF OF ALFRED YARD................................................................ 111

SUBMISSIONS ON BEHALF OF LORRAINE YARD........................................................... 189

CONSIDERATIONS APPLICABLE AND CONCLUSIONS............................................... 216

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HIS HONOUR:

THE PROCEEDINGS

Before the Court are two proceedings: no. 4542 of 2001 and no. 5151 of 2001. The proceedings are interrelated and were tried together. Essentially both proceedings arise from the separation of husband and wife and the consequences of that separation upon farming and other property. Trevor and Lorraine Yard were married in October 1969 and they lived together at Murrayville, north-west Victoria, in the Mallee country. Two children were born of the marriage. Trevor and Lorraine Yard separated in December 1997 and later divorced. Lorraine Yard commenced proceedings in July 1999 in the Family Court of Australia at Adelaide against Trevor Yard for property settlement and for maintenance. In October 2000 she commenced proceedings in the Supreme Court of South Australia, initially to prevent Trevor Yard and his parents from dealing with the assets of a family partnership and a family company Yardoo Pty Ltd. and thereafter seeking the winding up of Yardoo Pty Ltd and a division of its assets and the dissolution of the family partnership and an accounting of its assets. Trevor Yard’s father, Alfred Yard, took proceedings in this Court in February 2001 seeking declarations as to the true ownership of the property the subject in part of Lorraine Yard’s South Australian Supreme Court proceedings. Her claim was transferred from the Supreme Court of South Australia to this Court in March 2001, pursuant to the provisions of the Jurisdiction of Courts (Cross-Vesting) Act 1989 and became proceeding no 5151 of 2001. Thus both proceedings were heard in this Court.

In proceeding number 4542 of 2001 the plaintiff is Alfred Jeffrey Yard and the defendants are Yardoo Pty Ltd (first defendant), Gladys Maxrene Yard (second defendant), Trevor Jeffrey Yard (third defendant) and Judith Lorraine Yard (fourth defendant). The active defendant to those proceedings is Judith Lorraine Yard. The other defendants did not file defences or contest the claim and were not represented.

In proceeding number 5151 of 2001 the plaintiff is Judith Lorraine Yard and the defendants are Trevor Jeffrey Yard (first defendant), Alfred Jeffrey Yard (second defendant), Gladys Maxrene Yard (third defendant) and Yardoo Pty Ltd (fourth defendant). The defendants jointly filed a defence. Only the second defendant, Alfred Jeffrey Yard, was represented by counsel before me. The first defendant, Trevor Jeffrey Yard, effectively stood with his father in defence of the claim. The third defendant, Gladys Maxrene Yard, beyond formally being a party to the filed joint defence, took no part in the proceedings. The fourth defendant, Yardoo Pty Ltd was not represented by counsel before me. No appearance was filed by Trevor Jeffrey Yard, Gladys Maxrene Yard or Yardoo Pty Ltd. As the dispute was a family dispute, those arrangements for representation were appropriate and convenient in the circumstances, especially bearing in mind the burden of costs.

As the respective proceedings involve numerous parties with the same surname, it is convenient and appropriate hereafter (unless the context otherwise requires) to refer to the parties as follows: Alfred Jeffrey Yard as Alfred, Trevor Jeffrey Yard as Trevor, Gladys Maxrene Yard as Gladys, and Judith Lorraine Yard as Lorraine (the given name she habitually uses).

The sequence of issue of the respective proceedings is as follows.

After separation Lorraine commenced matrimonial proceedings against Trevor in the Family Court of Australia at Adelaide. On 5 July 1999, in proceeding number AD3875 of 1999 she made application for property settlement and for maintenance. On 31 October 2000 in the Supreme Court of South Australia in proceeding number 1044 of 2000 Lorraine sought an injunction against the defendants Trevor Yard, Gladys Yard and Yardoo Pty Ltd from dealing with the assets of a family partnership and of Yardoo Pty Ltd other than in the normal course of business. On 15 November 2000 Lorraine filed a statement of claim in that proceeding in which she sought orders to wind up Yardoo Pty Ltd and for an accounting and a division of the company and partnership assets. On 20 February 2001 an amended statement of claim was filed in which Lorraine sought a winding-up of Yardoo and a division of assets between the shareholders and a declaration for the dissolution of the partnership and an accounting of the income and assets of the partnership. Also on 20 February 2001 proceeding number 4542 of 2001 was filed in this Court, in which Alfred Jeffrey Yard is the plaintiff and the defendants are Yardoo Pty Ltd., Gladys Maxrene Yard, Trevor Jeffrey Yard and Judith Lorraine Yard, and in which the plaintiff sought declarations that property the subject or possible subject of Lorraine’s claim was his and Orders transferring property in the names of the defendants to him. On 9 March 2001 in the Supreme Court of South Australia, Martin J ordered that proceeding number 1044 of 2000 be transferred to the Supreme Court of Victoria. That order was made pursuant to s 4 Jurisdiction of Courts (Cross-Vesting) Act 1987 and for the reason that the dominant connection of the proceedings was with Victoria. That proceeding became number 5151 of 2001 in this Court. On 27 July 2001 Mandie J ordered that subject to any order of the trial judge, proceeding number 5151 of 2001 be heard at the same time as proceeding number 4542 of 2001. On 10 August, 2001 the Family Court proceedings by order of Judicial Registrar Forbes were stayed until the determination of these proceedings.

In proceeding no 4542 of 2001, essentially the plaintiff Alfred Yard seeks a declaration that the property and businesses in the name of Yardoo Pty Ltd and described in Schedules 1 to 4 of the statement of claim are held by it on trust for the plaintiff. Alternatively the plaintiff seeks a declaration that particular shares issued by Yardoo Pty Ltd are held on trust for the benefit of the plaintiff. The plaintiff seeks additional declarations that other scheduled properties be transferred to the plaintiff or held by the defendants as trustees for the benefit of the plaintiff, and for an equitable charge upon the defendants’ respective interests in the land described in the schedules. The scheduled properties are stated in paragraphs 32-36 below.

In proceeding no 5151 of 2001, essentially the plaintiff Lorraine Yard seeks the winding up of Yardoo Pty Ltd, a division of the assets of Yardoo Pty Ltd amongst the shareholders (of which she is one), a declaration of the dissolution of a partnership the Yards formed in 1976 and which related to properties and businesses (the partnership being of all the parties to the proceeding except Yardoo Pty Ltd) and an accounting of the assets of the partnership, an order for the sale of the partnership land, an equal share in the capital and profits of the partnership, payment to the plaintiff pursuant to the Partnership Act 1958 (Victoria) and a declaration that the defendants or any one of them have no interest in the property owned by the plaintiff.

Thus proceeding no 4542 of 2001 is brought by Alfred Yard, the senior member of the family, for declarations to secure the property he maintains is rightfully his; and proceeding no 5151 of 2001 is brought by the former daughter-in-law of Alfred Yard to obtain the property she says is rightfully hers.

A brief personal chronology is as follows. The Yard family has resided in Murrayville for three generations. Mr Alfred Yard was born on 31 March 1923 and is now 83 years of age, active, alert and able. He and his wife Gladys were married in 1946. Trevor Yard was born on 17 April 1947 and is now 58 years of age. He and Lorraine Yard married on 25 October 1969. Two children were born of the marriage, Damien on 13 February 1971 and Narelle on 9 October 1973. In 1997 Trevor and Lorraine Yard separated and later divorced. The parties still live in Murrayville.

Murrayville is situated on the Mallee Highway 25 kilometres east of the Victorian-South Australian border. It is 110 kilometres west of Ouyen and 30 kilometres east of Pinnaroo, and 560 kilometres north-west of Melbourne and 270 kilometres east of Adelaide. It has a population of some 250. It has an average annual rainfall of 275 mm., slightly less to its north and slightly more to its south. It is fortunate to have good underground water.

Of the various blocks and properties, the following is a brief geographical summary.

(a)The Renown Garage is in McKenzie Street, Murrayville (the Mallee Highway). Its registered proprietor is Yardoo Pty Ltd.
(b)The various town blocks are in or adjoining the township. They are Murphy’s, Kalm’s and Tully’s Blocks to the north and the Murrayville Abattoir to the south. The registered proprietor of those blocks is Yardoo Pty Ltd. Szader’s, to the south, is registered in the name of Trevor Jeffrey Yard.
(c)Pomona is 3 kilometres north of the township and comprises 1219 hectares. Pomona is constituted by Hawker’s, Paul’s, Gutsche’s and Conlin’s Blocks. The registered proprietor is Yardoo Pty Ltd.
(d)The South Blocks Gunamalary are 2 kilometres south of the township and comprise 1089 hectares. They are constituted by Jimmy Mac’s, Hallet’s, Boetscher’s and Wiltshire’s Blocks. The registered proprietor is Yardoo Pty Ltd.
(e)Brian’s Block, Ngallo is 12 kilometres south-west of the township and comprises 259 hectares. Its registered proprietor is Judith Lorraine Yard.
(f)Lackman’s Blocks, Carina are 9 kilometres west of the township and comprise 189 hectares. The registered proprietor is Yardoo Pty ltd.
(g)Hawick is in South Australia, on its Victorian border, 67 kilometres north of Bordertown and comprises 5905 hectares. Its registered proprietor is Yardoo Pty Ltd as to one undivided half share.
(h)Paladin is in South Australia, on the Western Branch Road, 3 kilometres south-west of Lobethal in the Adelaide Hills and 36 kilometres east of the Adelaide G.P.O.. It comprises 57 hectares. Its registered proprietors are Gladys Maxrene Yard, Alfred Jeffrey Yard, Trevor Jeffrey Yard and Judith Lorraine Yard as joint tenants.

A brief commercial chronology is as follows. Alfred Yard’s father, Harold, purchased the Renown Motor Garage, Murrayville in 1929 and Lackman’s Block, Murrayville for his son in 1940. Alfred Yard purchased various blocks in and around Murrayville from the late 1940’s to 1969. Mr Harold Yard died in 1969. In 1970 Hallet’s Block was transferred from the Estate of Harold Yard to Alfred Yard. In 1973 the property Pomona at Murrayville was purchased. The registered proprietors were Trevor and Lorraine Yard as tenants in common. The partnership of Alfred, Gladys, Trevor and Lorraine Yard was formed in 1975. Yardoo Pty Ltd was incorporated on 1 October 1976 with Alfred Yard allocated one A class share, Gladys Yard one B class share, Trevor one C class share and Lorraine Yard one D class share. At the time of the formation of the partnership and incorporation of the company, family relations including between Trevor and Lorraine Yard were good. In 1981 the property Paladin, near Lobethal, South Australia was purchased. Its registered proprietors were Gladys Maxrene Yard, Alfred Jeffrey Yard, Trevor Jeffrey Yard and Judith Lorraine Yard as joint tenants. In 1985 Brian’s Block, near Murrayville was purchased. Its registered proprietor was Judith Lorraine Yard. In 1992 the property Hawick, in South Australia was purchased. Its registered proprietor as to one undivided half share was Yardoo Pty Ltd. On 11 December 1997 Trevor and Lorraine Yard separated.

For many years Alfred Yard operated the Renown Motor Garage which was a fuel distributor for the area. It was a successful business. He invested in farm properties but was himself not primarily a farmer. After the 1950’s, as roads and vehicles improved, the operations of the Renown Garage declined because the major nearby centres – Pinnaroo and Ouyen, and further afield Bordertown, Keith and Mildura - took over. The Renown Garage became a partnership of A.J. and G.M. Yard, and then A.J., G.M. and T.J. Yard, and after Trevor and Lorraine’s marriage in 1969, A.J., G.M., T.J., and J.L. Yard. In the early days few records were kept. Basic accounting was done by “Mallee” Tobin, Alfred’s solicitor in Ouyen. The first extant partnership accounts are for 30 June 1975.

The parties still reside in Murrayville. Alfred and Gladys live on the south

side of McKenzie Street (Mallee Highway), next to the Renown Motor Garage. Lorraine lives opposite them. Trevor lives on Pomona, just north of the town.
THE CLAIM IN PROCEEDING NO. 4542 OF 2001

The claim by Alfred Yard in proceeding no 4542 of 2001 is as follows in paragraphs 17-28 below.

During the period from 1939 to 1976 Alfred acquired the properties and businesses in and around Murrayville in the State of Victoria described in Schedule 1 to the statement of claim. (The properties identified in each of the Schedules 1 to 5 are set out below in paragraphs 25 to 29.) Prior to and during 1976, Alfred purchased the property Murphy’s Block identified in Schedule 2 which property was registered in the name of Gladys Yard. In or about December 1973 Alfred purchased a farming property at Murrayville known as Pomona Farm described in Schedule 3. At the time of acquiring Pomona Farm it was registered in the names of Trevor Yard and Lorraine Yard as tenants in common in equal shares; the total purchase price of Pomona Farm (including additional plant and equipment purchased for $7,688.60) was $130,000.00 and the purchase price was financed in part by a vendor mortgage of $65,000.00 for five years at 7% interest; the balance of the purchase price was financed by payments made by Alfred; and Trevor and Lorraine did not pay any of the purchase price of Pomona Farm. Prior to purchasing Pomona Farm, on or about December 1973, an agreement was made between Alfred, Trevor and Lorraine Yard whereby it was agreed that Pomona Farm would be registered in the names of Trevor Yard and Lorraine Yard as tenants in common but held by them as trustees for the benefit of Alfred or in the alternative pursuant to a resulting trust in favour of Alfred. The agreement was partly oral and partly implied. It was constituted by discussions between Alfred, Trevor and Lorraine Yard during or about November and December 1973 at Murrayville, Victoria and was implied by the conduct of the parties and by operation of law.

In or about September 1976 and pursuant to legal advice received from Irwin Richards solicitors Alfred instituted discussions and made an agreement with Gladys, Trevor and Lorraine (“the agreement”) that Yardoo Pty Ltd would be incorporated for the following purposes: to act as a trustee company; to receive the transfer from Alfred and Gladys of all of the property described in Schedules 1 and 2 of which Alfred was the legal and/or beneficial owner; to become the legal proprietor of the land transferred to it by Alfred and Gladys and hold the property upon trust for the benefit of Alfred; to receive the transfer of the property described in Schedule 3 from Trevor and Lorraine and be registered as legal proprietor of that property; to hold the property transferred to it by Trevor and Lorraine upon trust for the benefit of Alfred and to hold the future transfers of property to it upon trust for the benefit of Alfred. It was further agreed that each of Alfred, Gladys, Trevor and Lorraine would be appointed as directors of Yardoo Pty Ltd and issued with one share each. The agreement was partly oral and partly implied. It was constituted by discussions between Alfred, Trevor and Lorraine during or about September 1976 at Murrayville, Victoria. It was implied by the conduct of the parties and by operation of law.

On 1 October 1976, Yardoo Pty Ltd was incorporated (hereafter Yardoo).

In or about June 1977 Alfred transferred to Yardoo each of the properties and businesses owned by him and referred to in Schedule 1 for the purpose that Yardoo would hold the properties and businesses on trust for the benefit of Alfred.

In or about June 1977 pursuant to the agreement, Gladys transferred to Yardoo the property registered in her name and referred to in Schedule 2 for the purpose that Yardoo would hold the property on trust for the benefit of Alfred.

In or about June 1977 pursuant to the agreement Alfred requested Trevor and Lorraine to transfer Pomona Farm to Yardoo. Trevor and Lorraine expressed an intention to transfer Pomona Farm to Yardoo for the purposes described in paragraph 16 above.

During or about June 1977 pursuant to the agreement and with the knowledge and consent of Gladys, Trevor and Lorraine, Alfred instructed Freeman & Pitts solicitors to prepare transfers and contract for sale with respect to the properties described in Schedules 1, 2 and 3 to be transferred to Yardoo by Alfred, Gladys, Trevor and Lorraine. Accordingly, Yardoo holds the legal title of the property and businesses transferred to it by Alfred, Gladys, Trevor and Lorraine pursuant to an express or constructive trust for the benefit of Alfred.

Further or in the alternative, Yardoo has not paid the consideration referred to (sic) in paragraph 20 above and Yardoo thereby holds the legal title of the property and businesses transferred to it by Alfred pursuant to a resulting trust for the benefit of Alfred.

Further and in the alternative, Alfred has an equitable charge upon the land described in Schedules 1 and 2 for the purchase price plus interest.

After October 1976 Yardoo purchased additional properties which are described in Schedule 4.

Prior to the purchase of each of the properties referred to in Schedule 4, there was an agreement between Alfred, Gladys, Trevor and Lorraine whereby it was agreed that the properties would be held by Yardoo on trust for Alfred. The common seal of Yardoo was affixed to each transfer in its capacity as the trustee of each company. Accordingly, the transfers were made in part performance of the agreement. Yardoo thereby holds the legal title to the property and businesses transferred to it by Alfred pursuant to an express trust for his benefit. Further and in the alternative, Alfred paid the purchase price for the purchase of each of the properties and businesses referred to in the preceding paragraph and Yardoo thereby holds the legal title of the property pursuant to a resulting trust for the benefit of the plaintiff. Further or in the alternative, the plaintiff claims against Yardoo an equitable charge upon the property and businesses referred to in Schedule 4 for the purchase price plus interest.

Alfred and Yardoo have provided funding and/or made the payments for four other properties described in Schedule 5. Prior to the purchase of the properties listed at paragraphs 5.1 and 5.2 of Schedule 5, there was an agreement between Alfred and Trevor whereby they agreed that notwithstanding the purchase monies were paid by Alfred, both of the properties would be registered in the name of Trevor who would hold the property on trust for the benefit of Alfred. Prior to the purchase of the property listed at paragraph 5.3 of Schedule 5, there was an agreement between Alfred, Gladys, Trevor and Lorraine whereby they agreed that notwithstanding the purchase monies was paid by Alfred both of the Certificate of Title of the property would be registered in the name of Alfred, Gladys, Trevor and Lorraine Yard jointly who would hold the property on trust for the benefit of Alfred. Prior to the purchase of the property listed in paragraph 5.4 in Schedule 5 there was an agreement between Alfred and Lorraine whereby they agreed that notwithstanding the purchase monies were paid by Alfred the property would be registered in the name of Lorraine who would hold the property on trust for the benefit of Alfred.

The purchase of each property and registration on the Certificate of Title in the respective names of Alfred, Gladys, Trevor and Lorraine were made in part performance of the agreements referred to in the preceding paragraph. Gladys, Trevor and Lorraine thereby hold their respective legal title in the properties registered in their names pursuant to an express or constructive trust for the benefit of Alfred. Further and in the alternative, Gladys, Trevor and Lorraine hold their respective legal title to the properties referred to in Schedule 5 pursuant to a resulting trust for the benefit of Alfred. Further or in the alternative, Alfred claims against Gladys, Trevor and Lorraine an equitable charge upon the properties referred to in Schedule 5 for the purchase price plus interest.

Accordingly Alfred Yard as plaintiff claims:

A.A declaration that the property and businesses in the name of Yardoo described in Schedules 1, 2, 3 and 4 are held by it on trust for the benefit of the plaintiff;
B.In the alternative, a declaration that the following shares issued by Yardoo are held on trust for the benefit of the plaintiff:
2.1One B class share registered in the name of Gladys Maxrene Yard;
2.2One C class share registered in the name of Trevor Jeffrey Yard; and
2.3One D class share registered in the name of Judith Lorraine Yard;

C.An order that Gladys Yard, Trevor Yard and Lorraine Yard transfer their respective shares in Yardoo to the plaintiff or his nominee;
D.A declaration that the whole of the land described in Schedule 5.1 and 5.2 and registered in the name of Trevor Jeffrey Yard is held by him as a trustee for the benefit of the plaintiff;
E.An order that Trevor Yard transfer to the plaintiff or his nominee the whole of the land described in Schedule 5.1 and 5.2;
F.A declaration that the whole of the land described in Schedule 5.3 and registered in the names of the plaintiff, Gladys Maxrene Yard, Trevor Yard and Judith Lorraine Yard is held by them as a trustee for the benefit of the plaintiff;
G.An order that Gladys Maxrene Yard, Trevor Yard and Judith Lorraine Yard transfer to the plaintiff or his nominee the whole of the land described in Schedule 5.3;
H.A declaration that the whole of the land described in Schedule 5.4 and registered in the name of Judith Lorraine Yard is held by her as a trustee for the benefit of the plaintiff;
I.An order that Judith Lorraine Yard transfer to the plaintiff or his nominee the whole of the land described in Schedule 5.4;
J.An equitable charge upon the defendants’ respective interests in the land described in Schedules 1 to 5 inclusive;

K. Such further or other directions as the Court may deem just and expedient;
L. That the defendants pay to the plaintiff’s costs of this proceeding.
The properties

The properties in the Schedules referred to above are as follows.

The Schedule 1 properties, said by the plaintiff Alfred Yard to be owned by him are:

1.1     Murrayville Town Block 8, Renown Motor Garage, being the whole of the land comprised in Certificate of Title Volume 4504 Folio 9007, purchased by the plaintiff in 1946;
1.2     Lackman’s Block 27 Carina being the whole of the land comprised in Certificate of Title Volume 8669 Folio 321;
1.3     Lackman’s Blocks 28 and 28A Carina being the whole of the land comprised in Certificate of Title Volume 925 Folio 933;
1.4     Hallet’s Block 1 Gunamalary being the whole of the land comprised in Certificate of Title Volume 8712 Folio 880;
1.5     Jimmy Mac’s Block 2 Gunamalary being the whole of the land comprised in Certificate of Title Volume 5662 Folio 1132213;
1.6     Boetscher’s Block 7 Gunamalary being the whole of the land comprised in Certificate of Title Volume 9135 Folio 103;
1.7     Wiltshire’s Block 8 Gunamalary being the whole of the land comprised in Certificate of Title Volume 8217 Folio 963;
1.8     Tully’s Block 3D Danyo being the whole of the land comprised in Certificate of Title Volume 9205 Folio 463;
1.9     Kalm’s Block 3F Danyo 8.2 being the whole of the land comprised in Certificate of Title Volume 6316 Folio 1263196;
1.10   A garage business known as “Renown Garage”; and
1.11   Farming operations including animal stock, plant and equipment.

The Schedule 2 property, said by the plaintiff Alfred Yard to be owned by Yardoo is:

2.1 Murphy’s Block 3D Danyo being the whole of the land comprised in Certificate of Title Volume 8189 Folio 941.

The Schedule 3 properties comprising “Pomona Farm” are:

3.1     Gutsche’s Block 11 Danyo 1280 acres being the whole of the land comprised in Certificate of Title Volume 8504 Folio 026;
3.2     Paul’s Block 12 Danyo 655 acres being the whole of the land comprised in Certificate of Title Volume 8113 Folio 077;
3.3     Hawker’s Block 13 Danyo 640 acres and Lackman’s Block 14 Danyo 640 acres being the whole of the land comprised in Certificate of Title Volume 8113 Folio 252; and
3.4     Conlin’s Block 15 Danyo 432 acres being the whole of the land comprised in Certificate of Title Volume 8263 Folio 056.

The Schedule 4 properties being additional properties purchased by Yardoo are:

4.1     Murrayville Slaughter Yards Block 6A Danyo 7 acres being the whole of the land comprised in Certificate of Title Volume 6293 Folio 1258551;
4.2     Herbie’s Town Lot 5 Murrayville being the whole of the land comprised in Certificate of Title Volume 7442 Folio 1488365;
4.3     A fifty percent share in a property known as “Hawick Station” being land in the Hundred of Shaugh in the State of South Australia comprising:
4.3.1.Block 20 Shaugh 1482 hectares being the whole of the land comprised in Certificate of Title Volume 4343 Folio 83;
4.3.2.Block 21 Shaugh 2169 hectares being the whole of the land comprised in Certificate of Title Volume 4343 Folio 84; and
4.3.3.Block 22 Shaugh 2254 hectares being the whole of the land comprised in Certificate of Title Volume 4343 Folio 85.

The Schedule 5 properties, said by the plaintiff Alfred Yard to be additional properties financed by him are:

5.1     A leasehold interest in Lot 10 Railway Reserve, Murrayville registered in the name of the plaintiff. The plaintiff contributed monies towards the construction of the residence;
5.2     Szader’s Lot 9 Murrayville being the whole of the land comprised in Certificate of Title Volume 8242 Folio 474. The plaintiff paid the purchase price and directed that the property be registered in the name of the plaintiff;
5.3     Lobethal South Australia property of about 142 acres being the whole of the land comprised in Certificate of Title Volume 4154 Folio 413 and Volume 4346 Folio 576. The plaintiff directed that the property be registered in his name and in all the defendants’ names without any consideration being provided by the defendants. The property has a mortgage in the sum of $150,000.00 in the name of the plaintiff; and
5.4     Brian’s Block 31 Ngallo of about 640 acres being the whole of the land comprised in Certificate of Title Volume 8386 Folio 144. The plaintiff paid the purchase price and directed that the property be registered in the name of Judith Yard without any consideration being provided by Judith Yard.

At trial, the claim to Lot 10 Railway Reserve, Murrayville, in which Lorraine currently resides, was not persisted in.

A summary of the relevant transfers is as follows (taken from Lorraine Yard’s revised witness statement paragraph 26):

Title Particulars and Court Book Reference	Description including reference to Schedule in No. 4542	Transferring registered proprietors	Price with Court Book Reference
1.	CT Vol 8217 Fol 963 GCB 359	Jimmy Macks South Blocks Murrayville (called Wiltshire’s Block in schedule) Schedule 1.7	Alfred Yard	$128,574.51 (GCB 164, 169 and 299)
2.	CT Vol 9135 Fol 103 GCB 357	Hallet’s South Blocks Murrayville (called Boetscher’s Block in schedule) Schedule 1.7	Alfred Yard	Included in the above price
3.	CT Vol 8712 Fol 880 GCB 353	Boetscher’s South Blocks Murrayville (called Hallet’s in schedule) Schedule 1.4	Alfred Yard	Included in the above price
4.	CT Vol 5662 Fol 213 GCB 355	Wiltshire’s South Blocks Murrayville (called Jimmy Mac’s Block in schedule) Schedule 1.5	Alfred and Gladys Yard	$39,972.18 (GCB 162, 170 and 300)
5.	CT Vol 9189 Fol 941 GCB 364	Town Block Murrayville (Crown Allotment 3E – Paddock) (Murphys) Schedule 2.1	Gladys Yard	$1,620.00 (GCB 163, 170 and 301)
6.	CT Vol 6316 Fol 196 GCB 362	Town Block, 3F Danyo Murrayville Kalm’s Schedule 1.9	Alfred Yard	$2,890.00 (GCB 169 and 297)
7.	CT Vol 9205 Fol 463 (was CT Vol 1055 Fol 845) LCB 118	Town Block 3D Danyo Murrayville Cemetery Road Tully’s Block (Sold) Schedule 1.8	Alfred Yard	$1,820.00 (GCB 164, 169 and 296)
8.	(i) CT Vol 8113 Fol 252 GCB 374	Pomona (Murrayville) (Hawker’s Block) Schedule 3.3	Lorraine and Trevor Yard	$170,240.00 (GCB 165, 170 and 293-4)
(ii) CT Vol 8113 Folio 077 GCB 372	(Paul’s Block) Schedule 3.2	Included in the above price
(iii) CT Vol 8504 Fol 026 GCB 370	(Gutsche’s Block) Schedule 3.1	Included in the above price
(iv) CT Vol 8263 Fol 056 GCB 376	(Conlin’s Block) Schedule 3.4	Included in the above price
9.	(i) CT Vol 9252 Fol 933 (previously CT Vol 8242 Fol 538) GCB 351	Carina (West of Murrayville) Schedule 1.3	Alfred Yard (although this is not noted on the Certificate of Title)	$30,198.50 (GCB 164, 169 and 295)
(ii) CT Vol 8669 Fol 321 GCB 349	Carina (Lackman’s Block) Schedule 1.2	Alfred Yard	Included in the above price
10.	CT Vol 4504 Fol 767 GCB 347	Town Block 8 McKenzie Street Murrayville (Garage) Schedule 1.1	Alfred Yard	$6,500.00 (GCB 164, 169 and 298)

Essentially, by her defence Lorraine Yard denies that any land was held on trust for Alfred Yard, that there was any agreement to that end, that any resulting trust arose or that any equitable charge applied.

THE CLAIM IN PROCEEDING NO. 5151 OF 2001

The claim by Lorraine Yard in proceeding no 5151 of 2001 is as follows in paragraphs 40-53 below.

The fourth defendant, Yardoo Pty Ltd is a proprietary limited company incorporated in Victoria on 1 October 1976 whose registered office is 75 Henley Beach Road, Henley Beach in the State of South Australia. Yardoo has four fully paid issued shares. Lorraine Yard, Trevor Yard and Gladys Yard each hold one of the fully paid issued shares and are each a director of Yardoo. Yardoo has since incorporation conducted the businesses of owning and farming land in Victoria and South Australia and of owning and operating a service station in Murrayville in Victoria.

In or about 1976 the parties save and except Yardoo formed a partnership known as GM, AJ, TJ and JL Yard (the partnership). There is no written partnership agreement addressing the interests of the partners in partnership property and their rights and duties in relation to the partnership. The partnership had not been dissolved prior to the issue of these proceedings. The partnership conducted the business of farming (including farming by way of joint venture with third parties) on properties owned by Yardoo and by the partnership, alternatively the partners as individuals.

Particulars of properties owned by Yardoo are: Jimmy Mack’s, Certificate of Title Register Book Volume 8217 Folio 963; Hallet’s, Certificate of Title Register Book Volume 9135 Folio 103; Boetcher’s, Certificate of Title Register

Book Volume 8712 Folio 880; Wiltshire’s, Certificate of Title Register Book Volume 5662 Folios 132 and 213; Town Blocks, Certificate of Title Register Book Volume 9189 Folio 941; Certificate of Title Register Book Volume 6316 Folio 1263196; Certificate of Title Register Book Volume 9205 Folio 463; Herbie’s, Certificate of Title Register Book Volume 7442 Folio 1488365; Pomona, Certificates of Title Register Books Volume 8113 Folios 252 and 077 and Volume 8504 Folio 026; Carina, Certificates of Title Register Books Volume 9252 Folio 933 and Volume 8669 Folio 321; Abattoir at Murrayville, Certificate of title Register Book Volume 6293 Folio 1258551; Hawick, Certificates of Title Register Books Volume 5431 Folios 751, 752 and 578 (as to one of two equal parts thereof with the balance being held by others); Certificate of Title Register Book Volume 8263 Folio 056; and Certificate of Title Register Book Volume 4505 Folio 900767.

Property owned by the partnership, alternatively by the partners as individuals is: Paladin (near Lobethal in the State of South Australia) Certificates of Title Volume 5328 Folios 368, 369 and 370 (registered in the names of Alfred, Gladys, Trevor and Judith Yard as joint tenants); Szader’s, Certificate of Title Volume 8242 Folio 474 (registered in the name of Trevor Yard and held by him on trust for the partnership, alternatively the partners as individuals); and Brian’s, Certificate of Title Volume 8386 Folio 144 (registered in the name of Judith Yard and held by her on trust for the partnership, alternatively the partners as individuals).

From in or about 1976 to the separation, Lorraine Yard derived benefits as set out hereunder from her shareholding in Yardoo and her participation in the partnership. She received income from Yardoo and/or the partnership which she is presently unable to particularise but which may from time to time have included the following: dividends in respect of her shareholding in Yardoo; fees in respect of her office as a director of Yardoo; a share of the profits of the partnership; wages in respect of work down by her for Yardoo; and wages in respect of work down by her for the partnership. Trevor Yard similarly received dividend income from Yardoo some of which income was expended on day to day expenses for the joint benefit of Lorraine Yard and Trevor Yard. The assets of Yardoo and accordingly the value of the shareholdings of Lorraine Yard in Yardoo were increased during the said period by the acquisition of new property from the proceeds of the income of the partnership, the retention of profits by Yardoo and the improvement of property owned by Yardoo. The assets of the partnership and accordingly the value of the share of Lorraine Yard in the partnership were increased during that period by the acquisition of new property from the proceeds of the income of the partnership, the retention of profits and the improvement of property owned by the partnership.

Since matrimonial separation the defendants Alfred, Gladys and Trevor Yard and each of them in their capacity as shareholders and directors of Yardoo have conducted the affairs of Yardoo in a manner that is oppressive, unfairly prejudicial to and/or unfairly discriminating against Lorraine Yard. That conduct is as follows. Lorraine Yard has not received any income by way of director’s fees or any dividend in respect of her shareholding in Yardoo. No annual general meeting or directors’ meetings have been held as required by Yardoo’s Articles of Association; in the alternative if any such meetings have been held, the defendants and/or Yardoo have not notified Lorraine Yard of such meetings as required by the Articles of Association. The defendants and Yardoo have refused repeated requests made by Lorraine Yard for access to financial and other records of Yardoo. The defendants have excluded Lorraine Yard from any involvement in the affairs of Yardoo and from access to any information concerning Yardoo’s affairs. Yardoo has disposed of real estate without calling a directors’ meeting and without informing Lorraine Yard or seeking her consent. Yardoo in or about July 2000 entered into a contract to sell to VicGrain the whole of the land described in Certificate of Title Register Book Volume 9205 Folio 463 being a town block in Murrayville in the State of Victoria. Yardoo has purported to divest its interest in the service station business at Murrayville to AJ and GM Yard without calling a directors’ meeting and without informing Lorraine Yard of the intention so to do or the consideration paid for such interest. The defendants have transferred all the business previously operated by Yardoo away from Yardoo without any consultation with Lorraine Yard. Notwithstanding his position as a director and shareholder of Yardoo, Trevor Yard has asserted that he is not in possession of and therefore unable to disclose to Lorraine Yard the following documents being or evidencing copies of financial statements and income tax returns for Yardoo for period 30 June 1995 to year ended 30 June 1998 inclusive, and later financial statements and returns when available; a split of sales between the service station and other ventures for each year from 30 June 1995; details of the split up of the land and buildings accounts in the Balance Sheets to identify each property, its cost and date of acquisition; details of any unsold wool, grain or stock; details of the ownership and income activities of “MV Kookaburra”, and any related expenses (hereinafter called “the company documents”). Trevor Yard has asserted that Alfred Yard and Yardoo have the company documents. Notwithstanding such assertion the company documents have not been made available to Lorraine Yard by Alfred Yard or Yardoo. On 7 September 2000 Alfred Yard and Yardoo arranged to give inspection of the company documents but failed to give such inspection. Yardoo has failed to have available for inspection by Lorraine Yard as a director and shareholder of Yardoo documents as required by sections 198F and 290 of the Corporations Law. Such financial documents as Yardoo has produced to Lorraine Yard are not in accordance with established accounting practice and disclose a significant change in business from the period prior to the matrimonial separation to the period after that separation. In particular, the 1998 financial statements do not include comparative 1997 accounts in either the profit and loss statement or the balance sheet; the 1996 financial statements indicate sales turnover of $457,112.00 but the 1998 statements reveal the only income as being interest received of $6,300; and the 1998 financial statements have no notes to the accounts detailing alleged borrowings from Yard family members. Alfred Yard, Gladys Yard and Yardoo have contested a subpoena to them to produce the company documents in the Family Court of Australia on grounds which inter alia include the ground that Yardoo acts as a trustee of assets transferred to it by Alfred Yard or later acquired on behalf of Alfred Yard, of which allegation Lorraine Yard had never heard at any time as a director of Yardoo or otherwise prior to the year 2000. The defendants and Yardoo have opposed an order for pre-pleading discovery of documents in which Judith Yard sought discovery of documents. Alfred Yard has objected to Lorraine Yard entering any premises registered in the name of Yardoo. Trevor Yard or Alfred Yard or a servant or agent acting on their behalf which person is presently unknown to Lorraine Yard did, in or about the first week of November 2000 instruct the Murrayville Branch of the Commonwealth Bank to request the payers of cheques payable to Yardoo to alter such cheques to make the payee Alfred Yard. An extraordinary meeting of Yardoo was purportedly held by the first, second and third defendants on 19 July 1999 without notice to Lorraine Yard at which resolutions were passed purportedly removing Lorraine Yard as a shareholder and director of Yardoo, which acts and conduct were illegal and of no effect. The defendants as directors of Yardoo have not caused any financial statements or returns to be prepared for Yardoo after 30 June 2002. The above actions of the defendants have been taken for the improper purposes of denying Lorraine Yard access to information concerning the affairs of Yardoo, involvement in the affairs of Yardoo and her entitlement to her share of the assets and income of Yardoo, and denying and/or obstructing the prosecution of proceedings taken by her in the Family Court for her proper entitlement on a division by the said Court of the matrimonial assets.

Since matrimonial separation the defendants Alfred, Gladys and Trevor Yard and each of them have breached their fiduciary duty owed as partners of the partnership to their partner Lorraine Yard, a contract of partnership being a contract uberrimae fides and have breached the provisions of the Partnership Act 1891 (SA) and/or the Partnership Act 1958 (Vic) in that Lorraine Yard has not received any share from the profits and/or income of the partnership; she has been unable to obtain financial or other partnership records despite repeated requests; and notwithstanding his position as a partner of the partnership and one still actively involved in its business activities Trevor Yard has asserted that he is not in possession of and therefore unable to give discovery of numerous relevant documents. Trevor Yard has asserted that Alfred Yard has the partnership documents but notwithstanding such assertion the partnership documents have not been made available to Lorraine Yard by Alfred Yard. On 7 September 2000 Alfred Yard on an occasion arranged to give inspection of the documents but failed to give inspection of the partnership documents. Notwithstanding their partnership with Judith Yard and their failure to provide the partnership documents for inspection by her, Alfred and Gladys Yard have contested a subpoena to them to produce the partnership documents in the Family Court of Australia. The defendants and the partnership have opposed an order for pre-pleading discovery of documents in which Lorraine Yard sought discovery of the following documents: appertaining to the assets of the partnership including any assets heretofore disposed of by the partnership; financial statements and income tax returns of the partnership for the period from 30 June 1995 to date; evidencing, as between Yardoo and the partnership, the split up of the land and buildings accounts in the balance sheets to identify each property, its costs and date of acquisition; appertaining to any unsold wool; appertaining to any expenditure by the partnership on the acquisition of any motor vehicles, antiques or other memorabilia and chattels; the books of account of the partnership; the books of account of any purported partnership said by the defendants to have commenced since October 1997 or in which any of the first, second or third defendant are presently a member.

Trevor Yard by his solicitor has advised Lorraine Yard through her counsel in Family Court proceedings that Trevor, Alfred and Gladys Yard had (purportedly) set up a new partnership to carry on the business of the partnership to the exclusion of Lorraine Yard contrary to the provisions of the Partnership Act (1891) SA or alternatively the Partnership Act 1958 (Victoria). Trevor, Alfred and Gladys Yard have failed to advise Lorraine Yard of any fact or matter pertaining to the partnership and have excluded her from information concerning and involvement in the management of the partnership. Alfred Yard caused to be filed an affidavit of his solicitor Mr. D. A. Starke in the proceedings and dated 8 November 2000 which affidavit asserted that the property at Brians was held on an express trust by Lorraine Yard for Alfred Yard notwithstanding that in February 1999 Alfred Yard asserted that the same property was beneficially owned by the partnership. Trevor, Alfred and Gladys Yard have purported to transfer all of the assets of the partnership to a new purported partnership comprising the three of them without any involvement of or notice to Lorraine Yard. No financial statements or returns have been prepared for the partnership or any partnership after 30 June 2000.

Accordingly the affairs of Yardoo are being conducted in a manner that is oppressive or unfairly prejudicial to, or unfairly discriminating against Lorraine Yard such that the plaintiff is entitled to the relief sought in the prayers for relief A and B or C herein.

By reason of the matters pleaded Lorraine Yard is entitled to an order dissolving the partnership pursuant to the provisions of the Partnership Act 1891 (SA) and/or the Partnership Act 1958 (Vic) and other consequential orders sought hereunder.

Yardoo is indebted to Lorraine Yard in the sum of $123,171.00. The debt arises pursuant to a loan account recorded in the books of Yardoo in favour of Lorraine in the sum specified and consists as to $85,120 of consideration paid by Yardoo to Lorraine for the purchase of Lorraine’s 50% interest in Pomona.

Further and alternatively if the Court finds that the partnership has been dissolved prior to the trial of this proceeding: Paladin is owned beneficially by Alfred, Gladys, Trevor and Lorraine Yard in equal shares as tenants-in-common as individuals, and Szaders and Brians are held on trust by the registered proprietors for Alfred, Gladys, Trevor and Lorraine Yard in equal shares as individuals; Lorraine is entitled to declaratory and related relief and well as relief under Part IV of the Property Law Act 1958 (Vic) with respect to those properties; and Lorraine is entitled to orders under sections 43 and 46 of the Partnership Act 1958 (Vic) or alternatively under section 39 and 42 of the Partnership Act 1891 (SA).

Accordingly the plaintiff Lorraine Yard claims:

A.The winding up of Yardoo pursuant to s.233 or alternatively pursuant to s.461(1)(f) or (k) of the Corporations Law;

B. A division of the assets of Yardoo between the shareholders;
C.In the alternative to A and B hereof an order pursuant to s.233 requiring the purchase of the shareholding of the plaintiff in Yardoo by the other members of Yardoo, or by Yardoo;

D. Payment by Yardoo of the debt in the sum of $123,171.00;
E.A declaration that the partnership be dissolved as and from such date as may be found by the Court;

E1. The appointment of a court-appointed receiver to the partnership;
F.An accounting of the income and assets of the partnership to the date of dissolution;
G.An order for the partition and sale of the partnership land Paladin, Szader’s and Brian’s Blocks described in paragraph 39 and 47 above, alternatively an order that Alfred, Gladys and Trevor purchase Lorraine’s interest in the partnership land;

H. An equal share in the capital and profits of the partnership;
I. Payment of a sum to the plaintiff pursuant to the Partnership Act 1958 (Victoria) ss.43 and 46 and/or alternatively the Partnership Act 1891 (South Australia) ss.39 and 42.

Essentially, by their defence the four defendants deny that the plaintiff Lorraine Yard is the owner or beneficial owner of the property she claims or that any oppressive conduct has occurred and that if the plaintiff is entitled to any relief (which is denied) then the profits of the partnership G.M., A.J., T.J. and J.L. Yard attributable to the use of the partnership assets must be taken into account. The defendants allege the partnership was dissolved on 15 December 1997.

WITNESS EVIDENCE

As I have said, the two proceedings, no 4542 of 2001 and 5151 of 2001 were tried together. The earlier issued proceeding, no 4542, proceeded first. In both proceedings, evidence in chief was given by witness statements, commencing in proceeding 4542 of 2001 with that of Alfred Yard. The witness statements substantially proceeded according to chronological sequence. A list of objections to parts of Alfred’s statement was filed on behalf of Lorraine. I have upheld a number of objections, being as to speculative or argumentative material and have omitted those parts as inadmissible, as is apparent by their absence from the rehearsal below. However, I have not upheld a number of objections asserting hearsay in statements made (by Penrose, Brodie and Irwin) in relation to the incorporation of Yardoo Pty Ltd as those statements are admissible not as to their truth but as to the fact of their utterance as information received and as to the state of mind of the parties to this proceeding. I have not upheld a

number of objections as to statements by the parties in relation to incorporation as those statements are admissible as state of mind, namely belief and intention. For like reasons, I have not upheld a number of objections to expression of belief and intent by Alfred in his evidence in chief by witness statement, which matters are relevant and admissible, although of course not conclusive of the substantive matter. I have applied the same criteria to the objections to evidence in chief by witness statement of Trevor Yard, Brian Yard, Ian Brodie and John Irwin.
ALFRED JEFFREY YARD

Alfred Jeffrey Yard, the plaintiff in proceeding 4542 of 2001, gave evidence in chief by witness statement as follows.

He was born on 30 March 1923 and resided at Murrayville. His family had lived in Murrayville for three generations. After leaving school and before World War II he worked for his father Harold Leslie Yard, on his properties and at the Renown Motor Garage. He did not receive a wage but was provided with keep and spending money. During the War he served for three and a half years with the RAAF including in Dutch New Guinea. During the War he returned home each year to help with harvest. Due to a shortage of farm workers he was eligible for discharge in 1944 and continued to work in the manpower program. He returned to Murrayville and took over the Renown Motor Garage and later commenced farming for himself. He started working and earning his own way before the War and he still was doing that almost 60 years later. He is still active and continues to operate the Renown Motor Garage and undertake such farm works as he is able to including driving a tractor and harvester. His business, farming and property activities are referred to in more detail below.

The first defendant, Yardoo Pty Ltd (“Yardoo”), is a company which was incorporated on 1 October 1976. Alfred is a director of Yardoo and hold one A class share which was issued on 1 October 1976.

The second defendant is Alfred’s wife Gladys Maxrene Yard, who was born on 6 January 1920. They were married in 1946. His wife is also a director of Yardoo and the holder of one B class share issued by Yardoo on 1 October 1976.

The third defendant is Alfred’s son Trevor Jeffrey Yard who was born on 17 April 1947 and is the only child of the marriage. Trevor is a director of Yardoo and the holder of one C class share issued by Yardoo on 1 October 1976.

The fourth defendant, Judith Lorraine Yard, married Trevor on 25 October 1969. Trevor and Lorraine separated on 11 December 1997 and subsequently divorced. Lorraine is a director of Yardoo and the holder of one D class share issued by Yardoo on 1 October 1976.

Lorraine resides with her current partner in what was the former matrimonial home at Lot 10 Railway Reserve, Murrayville. Lorraine’s house is immediately opposite the Renown Motor Garage and Alfred’s and Gladys’ house.

This action arises as a result of the divorce of Trevor and Lorraine and subsequent application by Lorraine for a property settlement in Family Court of Australia Proceeding AD 3875 of 1999. One of the issues which arose in that action was the identification of the property of the marriage and a division of that property. It is Alfred’s belief that Lorraine sought to claim an entitlement to or an adjustment for assets which were not property of the marriage and of which Alfred was the real owner.

If Alfred’s properties are included in the Family Law claim they may have to be sold to pay Lorraine. That would affect his assets and income even though he was not a party to the marriage.

As might be expected in this type of situation the parties have aligned themselves along blood family lines. For the purposes of this action Alfred was advised it was necessary for him to join Yardoo, his wife Gladys, and his son Trevor. He has not sought to enter a judgment against them and understands they will abide the result of his claim. The end result is that Lorraine is the only active defendant. Whatever problems have arisen as a result of the actions before the Family Court and this Court, Gladys and Lorraine have maintained a close relationship. Alfred asked his wife to provide a statement and to be a witness in this action. She has consistently refused to be a participant in this action in any capacity. Gladys is not in good health and is unable to travel to Melbourne to attend Court.

The Schedule 1 properties

Since commencing business and as a farmer Alfred used various business arrangements including Yardoo and partnerships such as, AJ & GM Yard, and AJ, GM & TJ Yard, and AJ, GM &TJ, JL Yard. Over a long period of time he has by his hard work, timely investments and modest rural lifestyle been able to acquire several farm properties. Those properties are what he would describe as working assets.

Documents still in his possession and relevant to each property are contained in the Schedule of Properties. At different times several of the properties owned by him or later purchased by him have at his direction been registered in different names. No matter in what name each property is now registered Alfred has always asserted that he was the real owner of each property and that there was no change to his right to use the land for his own benefit. The properties were to be used and dealt with as he decided.

During the period from 1939 to 1976 Alfred acquired in and about Murrayville the properties and business described in Schedule 1. Many of the properties are known within the family and by other residents of Murrayville by the name of a previous owner. They are:

(1)Renown Motor Garage Murrayville Town Block 8. Alfred’s father Harold Yard purchased this property on 18 November 1929. Alfred purchased this property from his father and it was transferred to Alfred on 23 April 1951. Alfred did not recall the purchase price. However as part of the agreement he took over a mortgage to the Commercial Bank of Australasia for an amount of about £240/-. There have not been any mortgages registered on the title since he purchased it. At Alfred’s direction the land was transferred to Yardoo on 6 December 1997. Alfred did not receive any payment for the transfer. Located on the land is a business, which is known as the Renown Motor Garage.
(2)Lackman’s Block 27 Carina and Lackman’s Blocks 28 and 28A Carina. These comprise about 470 acres of grazing land. Alfred’s father Harold Yard purchased Lackman’s for him in 1966 and it was transferred to Alfred on 24 June 1966. Since Lackman’s was purchased it has been used as farming land by a series of partnerships. Alfred did not transfer the land to the partnership and did not receive any rent from the respective partnerships. At Alfred’s direction Lackman’s was transferred to Yardoo on 6 December 1977. He did not receive any payment for the transfer. There has been one mortgage by Yardoo to the Commercial Bank of Australasia Ltd registered on 8 October 1981 and discharged on 6 March 1991.
(3)Hallet’s Block 1 Gunamalary. This comprises 640 acres of farming land. Alfred’s father who died on 30 April 1969 devised this land to Alfred. Alfred remembers that he had to pay death and succession duties of about $50,000.00. The property was transferred to Alfred on 13 October 1970. There have not been any mortgages registered on the title since that date. Since Hallet’s Block was transferred to Alfred it has been used as farming land by a series of partnerships. Alfred did not transfer the land to the partnerships and did not receive any rent from the respective partnerships. At Alfred’s direction Hallet’s Block was transferred to Yardoo on 6 December 1977. Alfred did not receive any payment for the transfer.
(4)Jimmy Mac’s Block 2 Gunamalary. This comprises 640 acres of farming land and was purchased by Alfred in 1961 from the Gebert family through Elders Real Estate. Jimmy Mac’s was registered in Alfred and Gladys’ names as joint tenants on 15 March 1961. Alfred had always believed that he was the sole registered proprietor of Jimmy Mac’s Block and instructed his solicitors to include that property as part of his claim. Notwithstanding that the property was registered in both names Alfred was the real owner of the land and was entitled to deal with the land as his own. Since the purchase of this land there have not been any mortgages registered on the title. Jimmy Mac’s has been used as farming land by a series of partnerships. The partnerships did not pay any rent for the use of the land. At Alfred’s direction Jimmy Mac’s was transferred to Yardoo on 2 September 1977. Neither Alfred nor Gladys received any payment for the transfer.
(5)Boetscher’s Block 7 Gunamalary. This comprises 640 acres of farming land and a derelict farmhouse. Alfred’s mother E. M. Yard and Alfred purchased the land from Fred Boetscher and it was registered in their names as tenants in common. Upon Alfred’s mother’s death she left her half interest in the land to Alfred’s sisters Thelma and Floss. He purchased his sisters’ half interest. A new Certificate of Title was issued to Alfred on 15 September 1975 and there have been no mortgages registered on the title at least since that date. Since the purchase of Boetscher’s Block it has been used as farming land by a series of partnerships. Alfred did not transfer the land to the partnerships and Alfred did not receive any rent from the respective partnerships. At Alfred’s direction Boetscher’s Block was transferred to Yardoo on 6 December 1977. He did not receive any payment for the transfer.
(6)Wiltshire’s Block 8 Gunamalary. This comprises 770 acres of farming land. Alfred purchased this land from the Crown Lands Department in 1954 at an auction in the local Shire Office. The purchase price was £3,560. There are no mortgages registered on the title since the title was issued to him on 10 August 1954. Since purchasing Wiltshire’s Block it has been used as farming land by a series of partnerships. Alfred did not transfer the land to the partnerships and did not receive any rent from the respective partnerships. At Alfred’s direction Wiltshire’s Block was transferred to Yardoo on 6 December 1977. Alfred did not receive any payment for the transfer.
(7)Tully’s Block 3D Danyo. This comprises 30 acres of land. It was purchased by Alfred for an amount of £220. At Alfred’s direction Tully’s Block was transferred to Yardoo in 1977. Alfred did not receive any payment for the transfer.
(8)Kalm’s Block 3F Danyo. This comprised 30 acres of land. It was purchased by Alfred on 15 March 1950. There have not been any mortgages registered on the title since that date. At Alfred’s direction Kalm’s Block was transferred to Yardoo on 6 December 1977. Alfred did not receive any payment for the transfer.

The Schedule 2 property

As at 1976 Gladys was the registered proprietor of the property described in Schedule 2: Murphy’s Block 3E Danyo. Murphy’s Block comprises 30 acres of land and was purchased for an amount of £100. Alfred paid the purchase price for that property. There are no mortgages registered on the title.

At Alfred’s direction Murphy’s Block was transferred by Gladys to Yardoo on 2 September 1977.

1969 family changes

During the period from about 1946 to the mid 1960s Alfred’s wife Gladys and he traded as a partnership AJ & GM Yard and they had income from both the Renown Motor Garage and from Alfred’s farming activities. Alfred had over the years paid for all of the properties which he had purchased and savings in the bank and insurance policies.

Notwithstanding that his wife and he traded as a partnership Alfred had by 1969 acquired a number of farming properties in his name. Apart from Jimmy Mac’s and Murphy’s Blocks they were all registered in Alfred’s name as the sole proprietor. Regardless of the income arrangements with Alfred’s wife, Alfred always considered that the land was not a partnership asset and that he was the real owner of all the land.

After Trevor left school he started work with Alfred as a farm hand. At first Trevor did not receive a wage but was provided with board and spending money. On several occasions Alfred put part of the wool clip and loads of what in Trevor’s name as a method of payment. At some point of time that Alfred is not able to identify, Trevor was introduced into the farming partnership of AJ, GM & TJ Yard. That was probably in the mid to late 1960s. Alfred does not recall when or how the change in partnership occurred. It may have been something which Alfred’s accountant suggested and implemented. At that time Alfred’s accountant was “Mallee” Tobin at Ouyen. Trevor did not pay any money for existing partnership assets such as plant and equipment or livestock and sheep. Alfred did not intend to gift or advance any portion of the partnership assets to Trevor. Alfred does not know if his accountant made any adjustment in the accounts that he prepared. To the best of Alfred’s knowledge neither a partnership agreement nor a deed of gift were prepared. So far as Alfred was concerned the businesses of the Renown Motor Garage and the farm just continued on as before and he ran everything. The new arrangement meant that Trevor received an income which was offset against partnership income although Alfred does not recall if Trevor was actually paid any partnership share.

Trevor and Lorraine were married on 25 October 1969. At that time Trevor was still young and working with Alfred. Trevor did not have property of his own. Alfred does not know if Trevor had any savings. Lorraine was working as a hairdresser and did not have any assets. Trevor and Lorraine did not at that time have the financial capacity to purchase any asset of significance.

After Trevor and Lorraine married the family partnership was changed again to GM, AJ, TJ & JL Yard. Alfred is not able to recall when that change was made. He is not able to recall any conversations with any of his wife, Trevor or Lorraine about the change of partnership. Lorraine did not pay any money for the existing partnership assets. Alfred does not know if his accountant made any adjustment in the accounts that he prepared. Alfred did not intend to gift to Lorraine any capital in the partnership. To the best of his knowledge neither a partnership agreement nor deed of gift were prepared or signed.

That was the way things were done in rural Australia at that time. The family changed and the accountant added a new partner, without regard to legal and accounting niceties or the consequences 30 years later. Alfred considered he owned and controlled all the property and assets.

Neither Gladys nor Lorraine “worked” fulltime in the partnership businesses. A better description would be “assisted from time to time as necessary or convenient”. For example they both spent time at the Renown Motor Garage serving customers if Alfred was called out and provided meals to shearers at shearing time. Lorraine also did lots of other things such as assisting in musters, cut outs, drenching, checking cattle, cleaning sheds which enabled Trevor and Alfred to run the garage and the farm more easily.

Regardless of who did what jobs, Alfred considered that he owned the assets being used by the partnership. He made all the relevant business decisions.

The Schedule 3 property – Pomona Farm

In or about December 1973 a farming property at Murrayville known as Pomona Experimental Farm being 3007 acres described in Schedule 3 was offered for sale by Fred Bethune. The circumstances of the purchase of Pomona were as follows.

Pomona probably was advertised by the agent Elders GM or just local talk in Murrayville. The auction did not reach the reserve price and was passed in for less than $100,000.00. After the auction the agent came to see Alfred at the Renown Motor Garage and asked him if he was interested in purchasing Pomona. Because the Renown Motor Garage is located alongside Alfred’s home it is possible his wife was present or nearby. Trevor was also present. The agent and Alfred were the only people involved in the negotiation of the price for the land and equipment.

Alfred agreed with the agent that the total purchase price of Pomona Farm (including additional plant and equipment purchased for $7,688.60) was $130,000.00, which was financed by a vendor mortgage of $65,000.00 for five years at 7% interest.

After Alfred had negotiated the purchase of Pomona with the agent he told his wife, Trevor and Lorraine that he had agreed to purchase Pomona. Alfred cannot remember the exact words which were spoken. However he does recall that he had several conversations with them. His recollection of the conversations is the cumulative effect of the conversations and not the individual conversations.

Alfred regarded Trevor and Lorraine as “kids”. Alfred did not have any obligation to buy Pomona for them or to even consult them. Alfred knows it sounds incorrect today but he probably was not at all concerned by what Lorraine thought about the Pomona.

The effect of the conversations was that Alfred told them that Pomona Farm had been passed in at auction. He said the agents had offered the property, plant and equipment to him. He had negotiated a total purchase price of $130,000. The vendor had offered mortgage finance of $54,000.00 for a period of 5 years at 7% interest per annum. He had decided to purchase the property and organised finance for the purchase.

After he had agreed to purchase Pomona, Freeman & Pitts solicitors for the vendor prepared a Contract of Sale and Purchase. A contract was prepared in the names of Trevor and Lorraine as tenants in common and in equal shares. Although Alfred recalls nominating Trevor and Lorraine as the purchaser he does not recall why they were listed as being tenants in common. Trevor and Lorraine signed the contract on about 12 December 1973 and later a transfer and mortgages. Alfred told Trevor and Lorraine they did not have to worry about paying the deposit or mortgages because the property would belong to Alfred and he would pay the mortgages. Trevor and Lorraine agreed that although the property would be purchased and registered in their names, Alfred would be the true owner and pay the mortgages.

After negotiation of the purchase price with the agent Alfred then had a series of discussions and letters with the owner Fred Bethune about the purchase of additional equipment.

Alfred referred to C9 being a letter dated 11 January 1974 from Freeman & Pitts to TJ & JL Yard and to C11 being a letter dated 1 February 1974 from Freeman & Pitts to TJ & JL Yard. Alfred was shown the letters by Trevor after he received them. Alfred does not remember obtaining any other legal advice at that time about the registration of ownership of Pomona. Alfred told Trevor it would not matter to Alfred how the land was registered because Alfred would still own the land and pay the mortgages. Alfred recalls that there was a conversation about what would happen when he died. He said words to the effect that the land would be in Trevor’s and Lorraine’s names and they would not have to pay probate duties.

During Alfred’s conversations with Trevor and Lorraine they were both keen for him to buy Pomona and they liked the idea of having land in their names. They also knew that they could not afford to purchase Pomona. There was never any suggestion that Alfred or his wife and he were simply giving Pomona to Trevor and Lorraine. They agreed that Pomona would be registered in their names but they would not have any interest in the land.

In the settlement statement dated 13 February 1974 the purchase price of Pomona was $130,000.00 of which the vendor provided $65,000.00 finance. The deposit was paid on 12 December 1973 from two accounts, Renown Garage Account as to $10,000.00 and the Farm Account as to $3,000.00.

Although those businesses and bank accounts may have been in the names of the partnership Alfred had control of all expenditure and was the only person who had any discretion about the use of the money.

The balance of the purchase price required at settlement was $51,690.03 paid from the following sources: AJ Yard: CBA Savings Account, $4,400.00; General Credits, $14,500.00; and repayment loan L Mason, $4,606.00: $23,506.00. GM Yard: CBA Savings Account, $6,500.00; General Credits, $14,500.00; and repayment loan L Mason, $4,606.00: $25,606.00.

As nominated in the Contract, Pomona was registered on 18 February 1974 in the names of Trevor and Lorraine as tenants in common in equal shares. On the same day a mortgage was registered in favour of Bethune. In addition to the land and plant and equipment that had been purchased, it was also necessary to stock Pomona. Some of the stock came from the other properties that Alfred owned. It is possible that some livestock and sheep were purchased.

After the purchase of Pomona, Fred Bethune continued to direct all of his correspondence to Alfred in respect of any matter incidental to the ownership of Pomona. Documents C13, C14, C15 and C16 are receipts issued by the vendor to T and AJ Yard in respect of both equipment purchases, interest in equipment purchases and interest on the mortgage. Later receipts such as documents C18 and C19 were issued in the names of TJ & JL Yard and also GM, AJ, TJ & JL Yard.

Notwithstanding that Pomona Farm was registered in the names of Trevor and Lorraine as tenants in common, Alfred did not advance or gift to either Trevor or Lorraine the deposit of the purchase price paid by him (or his wife) or any interest in the property. Even if he had reason to register or advance a half interest in Pomona to Trevor, Alfred did not have any immediate reason to advance or gift to Lorraine a half interest in Pomona without any liabilities.

Trevor and Lorraine held Pomona for Alfred as the real owner. Alfred was entitled to and did direct them as to all aspects of ownership of the property including day to day operations, purchase of equipment, livestock etc and later the transfer of the legal title Yardoo.

Operations 1973 to 1976

After the purchase of Pomona, the extended farming operations continued to be conducted as a partnership in the name of GM, AJ, TJ & JL Yard. The partnership used the farming land registered in Alfred’s name and also that of his wife, Trevor and Lorraine. Alfred continued to operate the Renown Motor Garage and was the local RACV contractor. They were the same activities of personal effort that he had been engaged in since 1944.

Alfred maintained the original business records, invoices and financial statement relating to the farm and Renown Motor Garage. The financial statements and taxation records commence in 1975. In about 1974 or 1975 Tobin ceased to be Alfred’s accountant and Ian Brodie of Thomson & Associates (“Thomsons”) in Mildura took over.

The financial statements for the partnership GM, AJ, TJ & JL Yard for the year ended 1975 were prepared by Thomsons on the basis that the farming and garage operations were all conducted by the partnership. In addition the partnership accounts also assume that Pomona was a partnership asset. The same comments apply to the financial statements for the period 1976 to 1977. Until the above accounts were brought to Alfred’s attention he had not since 1973 to the present heard any claim by his wife, Trevor or Lorraine that during the period 1973 to 1977 Pomona was owned in equal share by the members of the partnership of GM, AJ, TJ & JL Yard.

The financial statements provide some detail of the overall financial position of the farm and garage activities in 1976-77 but not of Alfred’s personal situation.

The ownership of Pomona in the financial statements is inconsistent with registered legal ownership of that property and inconsistent with Alfred’s claim to be the true owner.

Incorporation of Yardoo 1 October 1976

When Alfred’s father Harold Yard died in 1969 there were still death and succession duties, gift duties and talk of a wealth tax. Alfred paid a large amount of probate tax when his father died. Alfred wanted to ensure that he would have control of his land and businesses in his lifetime but be able to pass them on without the same type of liability.

In the first half of 1976 Alfred’s insurance agent Richard Penrose visited him to discuss life insurance matters. Penrose described himself as an investment and taxation adviser. Penrose had a property near Blanchetown in South Australia and worked with Legal & General. Alfred had a good relationship with Penrose. Alfred had over the years purchased a number of insurance policies from him. Document C99 is a copy of a brochure headed “Estate Planning”. Penrose gave Alfred a copy of that document and they had a discussion about the effect of succession duties. Penrose knew that Alfred owned a number of properties and had purchased Pomona. They also discussed issues such as retirement and superannuation.

The effect of the conversations between Alfred and Penrose was that Penrose told Alfred that personal ownership of assets and partnerships was no longer the preferred method by which farmers should own and operate their business. Alfred should plan for the transfer of the land owned by him upon his death. If he did not then his wife, Trevor and maybe his grandchildren would have to pay succession and estate tax. Penrose gave Alfred the brochure and did a quick calculation of the probate duties. Penrose suggested that Alfred should transfer his properties to a company. Penrose said the purpose was to fix the value of his properties for succession duties and for superannuation purposes. Penrose told Alfred he had done the same thing himself and that his son-in-law was a director and shareholder of his farm. Penrose told Alfred that he would continue to own and operate the land, garage and farm business in just the same way as he always had. He said words to the effect “It won’t make any difference”.

Penrose also recommended that Alfred should invest in some insurance and superannuation policies for each of Gladys, Trevor, Lorraine and Alfred. The cost of the policies in the first three years was very high, about $12,000.00 per year, but after that they would become self-funding and Alfred would not have to pay annual contributions. The policies required each of them to be employed by a company that was conducting a business. Penrose said it would be better if the company operated the garage business.

Alfred discussed the proposal with Trevor. Alfred is unable to remember the dates of the conversations but they probably occurred at the Renown Motor Garage or at their homes. Alfred does not remember what was said in detail. He remembers that the effect of what he told Trevor would have been similar to the above. He remembers that he told Trevor that he was going to transfer his land to a company and that he wanted Trevor and Lorraine to transfer Pomona. Trevor said that if Alfred wanted him to transfer Pomona he and Lorraine would do that but he thought the insurance policies were expensive. Alfred does not remember Gladys or Lorraine being present during conversations with Penrose. It is probable that at some point Alfred would have told them what he was thinking of doing. In terms of his relationship with his wife, it was almost 100% certain that he would have told her what he was doing and taken into account any issues she wanted him to consider. As to his dealings with Lorraine he did not have the same obligation to consult with her and he would have told her what he was going to do and expected her to comply. Alfred cannot remember individual occasions or conversations but he has no doubt he told them he was considering transferring all his land to a company and buying some insurance policies. He does not remember how much detail he would have told them.

Penrose continued to contact Alfred about the company and insurance policies. Alfred still had some doubts. At some point of time Alfred agreed that he would discuss the proposal with his accountant Ian Brodie and either Penrose or he telephoned and made an appointment to see him.

On a date that Alfred does not know he went to Mildura and visited Ian Brodie at Thomsons. Also present were Trevor and Penrose. Alfred does not remember how long the meeting lasted. He does not remember the exact words that were spoken. He is able to remember the effect of the main topics of conversation. He introduced Penrose and told Brodie what he (Alfred) understood to be the proposal presented by Penrose. Alfred told Brodie that he was concerned by probate duties and that Penrose had suggested that he establish a company and transfer all his land to it. That would fix the value for probate duty. In addition he would be purchasing four policies at a cost of about $12,000.00 per year.

Penrose then explained the proposal to Brodie in some more detail. Brodie did not like the idea of Alfred transferring his land to a company and did not like the high cost of the policies. Trevor also said he did not like the cost of the policies. Brodie said he could not see any immediate benefit to Alfred. Penrose told all of them that the transfer to the company would not make any difference to Alfred’s ownership and use of the land. The benefit came from fixing the price of the land.

Brodie did not like Penrose and did not want Alfred to do anything that Penrose suggested.

After the meeting with Brodie, Alfred agreed to incorporate a company and instructed Irwin & Richards, solicitors in Mildura. It is possible that occurred during the same visit to Mildura and that Trevor and Penrose were present.

After the visit to Brodie, Alfred had several conversations with his wife, Trevor and Lorraine about transferring all of the property that they owned at that time to a new company, the property being owned by Alfred but registered in the names of different family members. The conversations probably occurred at the Renown Motor garage and in their homes. Alfred is unable to remember the exact words which were spoken but recalls that he had several conversations with them individually and together. His recollection of the cumulative effect of the conversations is that he told his wife, Trevor and Lorraine that Dick Penrose had told him that he should put all of the land owned by him into a company. A single owner of the land was better and would have benefits for Alfred. He could fix the value of the land for succession duty purposes. He told his wife, Trevor and Lorraine that it was a good plan and he was going to transfer all the land to a company. He told them they had to transfer the land registered in their names to the new company nominated by him. He told them he had paid for the land and it would not make any difference to the real ownership of the land or farming business. His wife, Trevor and Lorraine told him that they would transfer all the land registered in their names to a company if that was what he wanted. The conversations probably occurred prior to August 1976 and maybe even as early as 1975 and continued through to June 1977 or later when the land was finally transferred to Yardoo.

When Yardoo was incorporated Alfred was told that there had to be directors and shareholders. He does not recall why all of them were appointed as directors. It was something he left to the lawyers. He does not recall why each of them was appointed as a shareholder of Yardoo and why they held different classes of shares. No one explained to him that the classes of shares were in effect the same. No one ever told him that if he transferred his land to Yardoo the shareholders would be entitled to claim an interest.

In about September 1976 at Murrayville Alfred told Gladys, Trevor and Lorraine that he had arranged to incorporate Yardoo. He told them they needed to name directors and shareholders and that Gladys, Trevor, Lorraine and he would be appointed as directors of Yardoo, and issued with one share each. He does not recall ever being told by Penrose, Brodie or the solicitors what a director had to do or what rights a shareholder had.

There has been no relevant election by Lorraine Yard of an accounting of profits after any dissolution of the partnership found by the Court, as asserted in Alfred’s further submissions, as distinct from a claim for the payment of 7% interest. The Prayers for Relief cover both a claim for the 7% interest and an accounting from the partnership. There is no relevant evidence of the profits of the partnership after particular dates, and in the circumstances the Court should order interest at the rate of 7% per annum under section 46 Partnership Act on the value of assets as from the date of any dissolution.

It is erroneous to assert that the statement of claim elected to have an accounting of partnership profits, rather than a claim for interest at the rate of 7% per annum under section 46 Partnership Act 1958. The statement of claim has always claimed an accounting of the income and assets of the partnership to the date of dissolution, and the payment of a sum to the Lorraine pursuant to section 46 Partnership Act 1958 (Vic) or section 42 Partnership Act 1891 (SA).The parties appear to agree that the Victorian Partnership Act applies. There is the clear basis for a claim by Lorraine for interest at the rate of 7% per annum under the Partnership Act and there is no such unequivocal act constituting an election for an accounting of profits, rather than a claim for interest, so as to disqualify Lorraine from the award of interest at the rate of 7% per annum from the date of dissolution of the partnership.

The evidence of Wakeham and Robertson should be preferred over the evidence of Harris and Wapper in respect of the valuation of the real estate and the plant and equipment. In respect of the plant and equipment, Robertson had a far greater and specialist experience (38 years) in valuing and auctioning such farm plant and equipment, was totally familiar with each of the items of plant and equipment in issue, and had far greater access to comparable sales evidence to apply in his valuation of the different items. Wapper has only a “part-time” interest in the valuation of plant and equipment and is predominantly a land valuer. In respect of the major items of difference which were the subject of further examination of Robertson and cross examination of Harris, Robertson had access to the comparable sales evidence or the auction value of the item in question, either as a saleable item or as scrap material. He had a much stronger grasp of the current values of the different items if they were to be valued at scrap value and of the costs necessary to transport the items to the scrap dealers.

In respect of the valuations of real estate:

(a)Harris agreed in cross-examination with Wakeham’s thesis that in the event of the failure to have access to the properties for valuation in December 1997 and November 2000, then the proper approach to valuing the various properties in the Murrayville area was to maintain the ratio of values between properties, whilst within each year period fixing upon a base rate to apply such ratios by reference to the comparable sales evidence available at that date for the property chosen as being the base rate. Wapper’s thesis that this was not the valid approach and that one really determined the value at different dates as best one could based upon the available comparable evidence such that valuations would be conducted at different dates for the properties (even though there were no true comparable sales available to use as evidence), is flawed. It is flawed for the reason as demonstrated in Wapper’s report in respect of the properties surrounding Murrayville that because of the tightly held nature of properties in the area, sales used as comparable sales were sales which were in excess of two and a half years old at the relevant dates of valuation;
(b)Wapper in fact bases his valuation of the Murrayville properties upon the limited number of comparative sales recorded at pages 31 and 32 of his Report, then while treating these properties as comparable, has proceeded to apply a lower rate per hectare in his valuation of the Murrayville properties without proper regard to the age of the comparative sales and to the geographic proximity of the comparative sales to the subject properties;
(c)arris departs from the hierarchy of properties agreed to by both Wapper and Wakeham, although Wapper has the Carina property as superior to Brian’s Block because of a main road frontage which Harris could not perceive as giving any particular advantage to the property when it came to its valuation. This hierarchy of properties with Carina and Brian’s Block being the superior properties, followed by South Blocks and then Pomina was departed from by Harris in his assessment of the South Blocks as being the superior property in the hierarchy. This proposition is contradicted by the evidence of both of Wakeham and Wapper;
(d)Wakeham had obviously substantial experience in valuing properties in the Adelaide Hills area. His evidence was that he had valued between 60 to 100 properties and had inspected many of the properties which he used as comparable sales for the purposes of other work, including GST margin work at the time of the introduction of the GST. He demonstrated a high level of familiarity with the Adelaide Hills area and the properties referred to by him in his comparative sales periods;
(e)In respect of Wapper’s valuations for December 1997, Wapper only used three sales as comparative sales, but agreed in cross-examination that there was a mistake in his valuation of the comparable sales in that the range of all these comparable sales used for the 1997 valuations should not be $420 - $664 per hectare, but instead to $521 - $664 per hectare. This would have an obvious impact on the figures then applied by Wapper on a per hectare basis to the subject properties in the Murrayville area;
(f)Wapper agreed with Wakeham’s assessment that the best two properties were Carina and Brian’s Block with his ascription of a higher rate to Carina because of its main road frontage {which factor was disputed by Harris as having any relevance to the issue of value);
(g)Wapper accepted Wakeham’s application of $253 per acre in December 1997 to Carina, based upon the Carina sale in February 1996 of 321.31 acres at $269 per acre;
(h)Wapper stated that even though the properties were not available for inspection in 1997 and November 2000, and even though the properties were in the same area being in the immediate geographical vicinity of the township of Murrayville, that one would not expect a similar movement in the properties in the period 1997 to 2000 so as to maintain the ratios of the different properties;
(i)Wapper accepted that he has disregarded for his 1997 valuation the Crown AIlotment 26, Lackman Road, Carina in February 1996, even though it is a property in the immediate vicinity of the Carina subject property and at a relevant time;
(j)Wapper accepted that the sales from June 2004 to July 2004 appearing on page 1 of the further Charter Keck Cramer Report were relevant sales to consider in determining a value for the Murrayville properties;
(k)Wapper stated that in assessing values in 1997 and 2000 that one does not maintain ratios between the properties, but rather works upon the basis of comparative sales for each property at the different dates. This was an approach which was rejected by Harris;
(1)In respect of Paladin that there was no value placed upon the plant and equipment at Paladin because Robertson was denied entry to the property, and Alfred Yard chose not to have had Wapper conduct an inspection of plant and equipment. Therefore a Court Appointed Receiver is necessary to inspect the plant and equipment at Paladin to arrive at a valuation of that plant and equipment;
(m)Wapper accepted that the items valued by him were owned by the Yard family, more reason that the Court should appoint a Court Appointed Receiver to investigate the items of plant and equipment which are truly Partnership items, and to place valuations upon them;
(n)Wakeham stated that the best comparables for use in valuing Carina and Brian’s Block were the three Lackman lots which were in the immediately vicinity of Carina and sold at auction in March 2004;
(o)Wakeham stated that there had been an increase of 25% - 35% in land values in the Murrayville area in the period of the last three years;
(p)Wakeham explained his application of different rates to the different blocks making up each of Pomona and the South Blocks;
(q)Wakeham explained the reasons for the unsatisfactory character of the valuation exercise undertaken by Wapper in that in respect of the first sale it was two and a half years old and only comparable to the town blocks; in respect of the other two properties which are medium size parcels, the sales were some two years and two months old, and that with the Carina sale, there is a very high rate attributed to improvements and on an unimproved basis the sale would equate to $653 a hectare;
(r)Wakeham criticised the work of Wapper in failing to take into account the increase in property values in the period between January 2000 (the date of the comparable sales relied upon) and October 2001, when there were significant increases in sale prices achieved in that period;
(s)Wakeham criticised Wapper’s work for different periods in that the ratio of values between properties varies dramatically between different dates;
(t)Wakeham explained that his base rate for the various valuation dates prior to 2004 was determined in each case for one property by reference to market evidence, and that the same ratio was then applied as between properties so as to maintain consistency;
(u)Wakeham accepted that properties may sell for values which are different to the ratios applied by him as between properties, but that in the absence of inspections of the properties at the past dates, the only valid approach of a valuer is to approach it in a methodical way based upon the maintenance of the same ratios between properties;
(v)Wakeham explained for the adjustments in the case of South Blocks, as information emerged that the South Blocks were good arable land;
(w)Wakeham stated that in respect of the comparative sales employed by him for the Paladin property he probably would have either inspected 80% of them, or at least driven past 80% of them;
(x)In response to the suggestion that he had undervalued the improvements on the comparable properties for the Paladin valuation, Wakeham referred to the fact that the valuation standards state that when determining a land value, the age and depreciation of improvements is to be taken as the guide, not the replacement cost;
(y)In respect of the Paladin property it was valued by Brooke of Taylor Brooke in September/October 2001 at $615,000, as against the Charter Keck Cramer valuation in November 2000 of $600,000;
(z)Robertson gave evidence that he had been involved in the business of valuing and auctioning plant and equipment for the last 38 years;
(aa)Robertson gave evidence as to the reasons for the values placed by him upon the particular items of plant and equipment inspected by him;
(bb)Robertson’s evidence in cross-examination justified the figures given by him to the different pieces of plant and equipment in his evidence-in-chief and his evidence should be preferred to that of Wapper based upon his particular length of expertise in valuing and auctioning farm plant and equipment and also because of the greater detail and reference to comparable sales by him in his ascription of values to different items of plant and equipment as contrasted with the approach taken by Wapper;
(cc)Harris’ valuation assessments dated September/October 2001 were contradicted in the case of the South Blocks, Town Blocks, Pomona, Carina and Brian’s Block by the higher valuations given by Wapper to these properties for a valuation date three years earlier in December 1997. The Court should approach his valuations with caution, and should prefer the consistent and cogent approach adopted by Wakeham;
(dd)Harris stated that values of rural land did not increase in the period from 1997 to September/October 2001. This is contradicted by the evidence of Wakeham in paragraph 11 of his affidavit sworn 20 April 2005;
(ee)Harris criticised the approach of Wakeham in approaching the valuation and improvements upon the basis that the improvements in these instances will have deteriorated over time, but equally replacement costs will have increased over time so that in the majority of cases it is appropriate to leave the initial improvement value unchanged. Wakeham’s response to this in paragraph 12 of his affidavit sworn 20 April 2005 is that it accords with the usual practice in the valuation industry;
(ff)Harris’ hierarchy of properties was contradicted by both Wapper and Wakeham. Harris had Town Blocks as the superior property followed by South Blocks and then Carina. Each of the other valuers had a clear hierarchy of properties with Carina and Brian’s Block being the superior properties followed by South Blocks and then Pomona;
(gg)Harris stated that there would be no reason for giving a superior valuation to Carina, as against Brian’s Block, by reason of Carina being situated on the main road;
(hh)Harris stated that the law of diminishing returns does not apply to rural land. Wakeham responded to this matter in paragraph 16 of his affidavit sworn 20 April 2005;
(ii)Harris accepted that the critical comparable taken by him as being $426 per hectare as of September/October 2001 should in fact have been at a rate of $446 per hectare. This will have an effect on the relevant valuations of Brian’s Block, Carina, South Blocks and Pomona by Harris; and
(jj)Harris accepted the approach of Wakeham in having the properties bear in value the same ratios in 1997 and November 2000 as they did in October/November 2001 and November 2004. He also accepted the basis for assessment of particular values at dates other than the present value by means of fixing upon a property and applying a base rate for that property which itself depends upon an analysis of the comparable sales for that property.

In respect of the valuations of plant and equipment Robertson gave evidence that he had been involved in the business of valuing and auctioning plant and equipment for the last 38 years. He gave evidence as to the reasons for the values placed by him upon the particular items of plant and equipment inspected by him. His evidence should be preferred to that of Wapper based upon his length of specialist expertise in valuing and auctioning farm plant and equipment, as opposed to Wapper’s part-time interest in the field, and

also because of the greater detail and reference to comparable sales by him in his ascription of values to different items of plant and equipment as contrasted with the approach taken by Wapper.

There is no basis for the assertion that Lorraine is seeking a windfall. Rather, the position is that Lorraine was made a member of the partnership, certainly because of the fact she became married to Trevor, but that such a partnership was a true partnership in which Lorraine made her own contribution over a lengthy period. There is nothing inequitable in the position being taken by Lorraine that she was an equal partner in the partnership (which fact is undoubtedly the basis of the accounts prepared over a long period), that in respect of the properties in which she is a registered proprietor she has a personal proprietary interest, and that she is the owner of one of the four equal shares in Yardoo.

CONSIDERATIONS APPLICABLE AND CONCLUSIONS

I have extensively reviewed the history as stated by the witnesses because it is essential that fact-finding proceed upon an historical and not anachronistic base. Value judgments of a later period, or of today, are to be avoided in the finding of fact and the drawing of inference in matters past. Also, contemporary metropolitan values, so far as they might differ from past rural values, are to be eschewed. Thus I proceed upon the basis of the finding of fact and the drawing of inference in the setting of the events then and there, not here and now.

The three central factors operating in the 1970s in the Yard family circle were these. First, Mr Alfred Yard by reason of hard work, long application and prudent management had accumulated substantial assets. Second, he was determined not to lose to government by way of taxes and duties any more of those assets than lawfully were required to be lost. Third, the family situation was for him a happy one. He had a loyal wife, and a hard working son who was happily married. The solution was available: divest himself of assets so that government hands could not reach more than lawfully necessary; and yet retain control. The former – the divesting – was achieved through lawful means: the extension of partnership and the incorporation of a company. The latter – control – was achieved in a time honoured way: he was the head of the family, he expected his wishes to be observed, and they were. The proposition central to proceeding no. 4542 – that the divesting was partial only and subject to trust, express or implied – is in my view ahistorical. That is, it was not what there and then occurred but is an anachronistic overlay, propounded because the control expected to flow from being family head is now inefficacious and thus is called in aid the notion of trust which was not an occurrence at the time the relevant events occurred.

There is clear evidence that in the mid 1970s Mr Alfred Yard, by reason of his own hard work and responsible management, had a satisfactory and settled existence. His inclination, an entirely lawful one, was as his accountant Mr Brodie made clear, to provide as little of his hard-earned assets to government as lawfully he could. His concern, as his experience with his father’s estate drove home to him, confirmed by his son’s friend’s experience, was that Trevor’s inheritance would suffer in government hands. The fast-talking Penrose, with his eyes on the income from insurance policies, was at hand with the solution. Mr Alfred Yard attended the Mildura offices of his accountant with his son and Penrose. Trevor was concerned at the cost of the insurance policies proposed by Penrose – thus the comment by Penrose to Lorraine Yard that Trevor would be the ruin of the family (305) – but as usual Mr Alfred Yard’s wishes held sway. There was no discussion at the accountant’s office about trusts or beneficial ownership, as Mr Brodie’s evidence and Mr Irwin’s witness statement make clear. The matter simply did not arise, because it was no part of the Penrose scheme and it was no part of Mr Alfred Yard’s plan. Penrose did not need it because it was irrelevant to his aim; Mr Alfred Yard did not need it because he had personal control anyway. The attempt on behalf of Mr Alfred Yard to dredge to the surface the provisions of the Memorandum (clauses 11(6) and (20)) as to trust capacity is wholly ahistorical. Those provisions were not on Mr Yard’s mind. They were not mentioned by Mr Brodie. They were not mentioned by Mr Irwin. They were not part of the intention of Mr Alfred Yard.

Mr Alfred Yard’s intention was to negate the impact of death duties by divesting himself of ownership of property which otherwise could be liable to government claim upon his death. Divestment was necessary to avoid death duties. His intention would have been successful had he died. Fortunately he is alive and well, a credit to a man of his age and his hard-working and responsible lifestyle. But he achieved his intention.

Twenty years of loyal work by accountants confirms the above. The financial management and the books of account of the company and partnership reflect precisely the history: that there was a divesting by Mr Alfred Yard of ownership and there was no trust, express or implied. The evidence of Mr Brodie and Mr Ellery accurately reflects the financial dealings of the partnership and the company at the relevant times; not so the later work of Mr Remeljej. Market valuations were obtained from Mr Lackman. Stamp duty was assessed on the basis that the transactions were genuine as indeed they were. The consideration for the transfers was in the raising of the loan accounts. That was good consideration. The properties (including Pomona as transferred to Trevor and Lorraine and then by them to Yardoo) were transferred in legal and equitable title to avoid government impost.

When estate duties were abolished the arrangements were not altered because Mr Alfred Yard had personal control and there was no need perceived by him to undergo the expense of rearrangement. Such was the apparent certainty of rural Murrayville.

Things started to unravel when the marriage of his son unravelled. Promptly then Mr Alfred Yard took action to protect what he saw as his interests. Lorraine Yard was excluded in fact, although inefficacious in law, from the partnership and the company. But she commenced Family Law proceedings, and with the aid of solicitors commenced to seek that which is now the subject of proceeding no. 5151. In order to protect his position as he saw it, Mr Alfred Yard then commenced proceeding no. 4542.

I do not accept the evidence of Mr Alfred Yard or his son that at the time of the formative events, in the mid-1970s, or thereafter there were discussions about trusts or there was an intention by the parties to establish trusts. Such evidence is contrary to the records, contrary to the events and contrary to the humanity of the then situation.

Further, I reject the contention on behalf of Mr Alfred Yard that any resulting trust be found. Mr Yard decided what he wanted to do and which means would be adopted to achieve his end. He achieved his end. That was his choice. Now to assert that that history should be rewritten is contrary to law and to equity. If he had known at the formative times that he would live another thirty years and that death duties would be abolished, he might have done things differently. But he did not know, and what he decided to do, on the knowledge and expectations then his, was rational and sensible. Now to claim the aid of equity in order to rewrite history is of no avail.

Nor is it efficacious to assert, as on his behalf it repeatedly is, that Lorraine Yard is seeking a windfall. Time and again it was put in cross-examination, or in submission, that Lorraine made no financial contribution. The literally repeated question “Without paying anything?” at 310 is illustrative of that proposition. Likewise the submission (paragraph 150 of the further submissions for Mr Alfred Yard of 2 May 2005) “No money in, and 25% out”. That analysis is inadequate. There are contributions other than financial. Traditionally, farming communities have survived and prospered on non-financial contribution of persons, especially wives and loyal children. So too here. Lorraine Yard made a substantial contribution to the economic viability of the family enterprise. She raised the children – a most significant matter in itself, and also one enabling her husband to work the family enterprise. She maintained the home. As the children grew older, she assisted in the Garage and on the farms, in a limited way but appropriate to her situation. To assert that she has no financial claim because she did not put money in is an inadequate proposition both in law and in equity.

I accept the evidence of Lorraine Yard as to the lack of contemporaneous discussion about trusts as truthful and accurate. Lorraine Yard was frank and direct about her lack of knowledge of the men’s business. She does not pretend now to know more than then she did. She acknowledged that her present knowledge remains limited. Her comment answer “Obviously I was wrong” – in the answer “I was left with the assumption that [Pomona] was bought for Trevor and I, that it was our farm. I believed that. Obviously I was wrong” (300) - is in my view not an informed admission against interest as contended on behalf of Mr Alfred Yard, but yet another concession by her that there was much else she did not know. I consider the comment is a retrospective comment by her and not an historical statement. The historical statement is “I believed that”.

What Lorraine Yard seeks in proceeding no. 5151 is no more than the corollary of the historical arrangements that occurred. She might have contributed for 25 years with little financial reward. That has not occurred. The legal and accounting arrangements set in place by Mr Alfred Yard were not so set for her benefit. They were set for the reasons I have stated. But they were set consciously and deliberately. The corollary of the legal and financial arrangements is that Lorraine Yard’s claim in proceeding no. 5151 for her quarter share is made out. I find that there was a transfer of legal and beneficial title to the properties in Schedule 1, 2 and 3 to Yardoo Pty Ltd during 1977 on the dates of the respective transfers. I find that Yardoo Pty Ltd still holds such title. Further, I find that Yardoo Pty Ltd subsequently purchased the legal and beneficial title to the properties in Schedule 4. Although in two of the three Schedule 4 properties the funds were partnership funds the transfer of title was consonant with the then intention of the parties. Yardoo Pty Ltd still holds such title. I find that the G.M., A.J., T.J. and J.L. Yard partnership holds the legal and beneficial title to Paladin, which is registered in those names and was paid from partnership funds other than external borrowings. I find that Szader’s Block and Brian’s Block although registered in Trevor and Lorraine Yard’s names respectively are held on trust for the partnership of G.M., A.J., T.J. and J.L. Yard as that was consistent with the overall intention of the parties and the purchases were by partnership funds. Finally, the plant, equipment, stock and cash of the partnership of G.M., A.J., T.J. and J.L. Yard needs to be brought into account as an asset of the partnership.

Further, the self-help remedies adopted by Mr Alfred Yard and Trevor Yard following the matrimonial separation have their own consequences. Characteristic of the men’s business in the setting up of the arrangements is the men’s business of the dismantling after matrimonial separation of the arrangements. The men decided to pursue their own interests as they then perceived them. However this time the arrangements did not achieve the desired end. The end was to exclude Lorraine Yard from the partnership and the company. However, once lawfully established and acted upon as both the partnership and company were, they are not so easy to dismantle. Members cannot unilaterally be disenfranchised. Lawful procedures must be followed. Neither in the case of the partnership (s.41 Partnership Act 1958) nor the company were those necessary lawful procedures followed by Mr Alfred Yard and Trevor Yard. In the partnership, due notice was not given. In the company, oppression was practised. I do not accept the evidence of Mr Alfred Yard and of Trevor Yard that they did not exclude Lorraine Yard from the affairs of the partnership and of the company and that she voluntarily withdrew. The minutes of 19 July 1999 are eloquent of their exclusionary action; her letter of 22 February 1999 is eloquent of non-attendance at a single meeting only. For those reasons the attempted exclusion of Lorraine Yard from the partnership and from the company is inefficacious.

I turn to the consequences of the disenfranchisement.

As to Yardoo Pty Ltd, both because it is just and equitable to do so and because relevant oppression[55] has clearly and objectively been established, I order pursuant to ss.232 and 233 Corporations act 2001 that the company be wound up. Pursuant to s.233(j) I order payment to Lorraine Yard of her loan account in Yardoo Pty Ltd. Based upon Mr Ellery’s analysis which I accept, that amount is $123,171.00.
[55]Wayde & Anor v NSW Rugby League (1985) 180 CLR 459.

As to the partnership of G.M., A.J., T.J. and J.L. Yard, because it is just and equitable to do so I order pursuant to s.39(f) Partnership Act 1958 (the Act which applies) the dissolution of the partnership. I order pursuant to s.43 of the Act the taking of accounts and the payment to Lorraine of her due share. If necessary I shall order the appointment of a receiver and manager.

I turn to the matter of valuation of property and of plant, equipment and stock. The date for assessment of property and of value both for the company and for the partnership is today, 24 March 2006, the date of the ordering of the winding up of the company and of the dissolution of the G.M., A.J., T.J. and J.L. partnership.

As to plant, stock and equipment I was impressed by the evidence and analysis of Mr Robertson. He was a most experienced, practical, no-nonsense valuer whose evidence was careful and prudent. Mr Wakeham was not nearly as experienced as Mr Robertson in valuation of plant, stock and equipment and I consider Mr Robertson’s evidence should be accepted.

As to property, although there is little reference to it in counsel’s written submissions (doubtless because it concerned only one property) I was particularly impressed by the evidence of Mr Brooke as to his valuation in September 2001 of Paladin. He was a considered, thoughtful, knowledgeable witness and a valuer of great experience as to the relevant matter (Paladin). I regret to say I considered the evidence including witness statement of Mr Harris somewhat superficial. As to Mr Wapper and Mr Wakeham, each had his strengths. I found Mr Wapper clear and careful, and Mr Wakeham although less experienced particularly bright. In the end I consider that Mr Wakeham’s analyses are persuasive in that the analytical quality of them is high and consistent. The detail of that analysis is conveniently set out in Mr Jones’ written submission of 29 April 2005 at paragraph 25, rehearsed in paragraph 504 above. I accept Mr Wakeham’s valuations except in relation to Paladin as to which I accept Mr Wapper’s valuation. The reasons I do so in relation to Paladin are two. First, Mr Brooke supports Mr Wapper as to Paladin (770) and gives reasons therefor which I find persuasive even after considering the matters set forth in paragraphs 3-9 of Mr Wakeham’s affidavit of 20 April 2005. Second, the combined Adelaide Hills experience of Mr Brooke and Mr Wapper gives weight to their opinions in contrast to Mr Wakeham’s more limited experience as to the Adelaide Hills. On the other hand, I consider that Mr Brooke’s evidence before me of his later (April 2005) visit to Murrayville does not tip the balance against Mr Wakeham’s analysis as to that area. Mr Brooke’s evidence in relation to Murrayville in 2005 was not as considered as that in relation to Paladin in 2001, by reason of time and circumstance.

For the reasons set out above I shall make the formal orders I have announced upon the resumption of these proceedings at the convenience of the parties. Consequential orders including costs can then also be made.

[2006] VSC 109

24 March 2006