Case: Calverley v Green [1984] HCA 81 ; (1984) 155 CLR 242
Outcome: distinguished
However, the Tribunal accepted the Commissioner's submission that where joint holders had made unequal contributions to the acquisition of an asset, there being no presumption of advancement, a resulting trust is presumed for them as tenants in common in proportion to the values of their respective contributions to the consideration. The Tribunal referred to Calverley v Green [1984] HCA 81 ; (1984) 155 CLR 242. The Tribunal said that while there was some evidence as to the value of Claude Cassegrain's possible claim in defamation which he never "commenced", its value was by no means close to $4.25 million. The Tribunal accepted that the onus was on GCC and CFE to establish the value of Claude Cassegrain's rights, and that since they had not done so, it was reasonable to attribute the entire consideration of $9.5 million to the rights given up by GCC, pursuant to s 160ZD(4) of the Act , noted at [60] above. 65 The Tribunal noted that Claude Griffith had given evidence that GCC had claimed deductions for most of its expenses incurred in the joint venture and Cassiro's activities, including concessional deductions for research and development under s 73B of the Act , and that Claude Cassegrain's evidence was that an important objective of the settlement was to recover the amount that GCC had invested in Cassiro. The Tribunal considered that it "would be double counting to allow those costs to be included in the cost base of the asset (rights) given up by GCC" (at para 41). Consequently, the Tribunal found that the cost base of GCC's rights disposed of in the settlement by reason of s 160M(3)(b) (which, the Tribunal observed, effectively treated a release of GCC's rights as a disposal of the rights) was nil, given that the acquisition costs were "either not capital in nature or would be double-counted". 66 In the result, the Tribunal concluded that a capital gain of $9.5 million accrued to GCC under s 160Z, this being the excess of the disposal consideration over the cost base (nil) of the asset given up to acquire that sum. 77 (6) The applicants contend that "the Tribunal's principal error of law was to ignore the terms of the Deed and to re-write it by reference to the principles of resulting trusts". Although I would not describe the finding of a resulting trust as a rewriting of the Deed, I agree with the applicants that the resulting trust principle, recognised in the case of owners of land as joint tenants at law in Calverley v Green , has no application. The trust in question, whether called properly called "resulting" or "implied", is presumed in the absence of evidence of an intention to the contrary. In all the cases in which the principle has been applied of which I am aware, the trust has arisen from the provision of purchase money in a way that does not correspond with the way in which legal title is taken. Perhaps the principle would also apply if, although not in the form of money, the consideration could be regarded as equivalent to money. In the present case, however, the consideration provided for the payment of $8,835,083 and the CSIRO Parties' releases and contractual undertaking, consisted of releases and contractual undertakings by GCC and Claude Cassegrain separately and jointly and severally. 78 (7) Arguably, a further reason why a Calverley v Green resulting trust did not come into being is that it would be inconsistent with the intention of at least one party to the Deed that it should do so. By making the Apportionment Agreement, Claude Cassegrain showed an intention that was inconsistent with a presumption that he and GCC were to hold the sum of $9.5 million beneficially for themselves as tenants in common in equity in whatever proportions might turn out to reflect the values of their respective contributions to the consideration provided to the CSIRO Parties. 79 (8) So far as I know, no pre-existing asset disposed of by the Deed was owned by GCC and Claude Cassegrain as joint tenants. Each of them had its or his own separate potential claim against the CSIRO Parties. There were the claims already asserted by GCC alone in proceeding NG 3062 of 1992, with the further claims of conspiracy to cheat and defraud, abuse of process and defamation and injurious falsehood to be introduced by way of the proposed second further amended statement of claim (see [26] above). There was also a possible claim of defamation of Claude Cassegrain that had been obliquely referred to in the Cassegrain Letter (see [21] above). It is noteworthy, in passing, and only by way of interest, that in the Cassegrain Letter the amount claimed for defamation was $5 million, which was approximately one eleventh of the total amount of $56,033,000 claimed in that letter. The remaining $51,033,000 was clearly claimed by GCC alone. The sum of $5 million was not claimed for the defamation of Claude Cassegrain alone: it was claimed for defamation of "GC&amp;Co, Cassegrain Family name, Cassegrain Group of companies and Claude Cassegrain and his family". If the sum of $9.5 million were to be regarded as having been paid in conformity, on a pro rata basis, with the Cassegrain Letter, some $850,000 would be treated as having been paid in respect of the threatened defamation claim, of which, apparently Claude Cassegrain would be entitled to some unidentified part, the other parts being in respect of defamation claims by GCC, other unidentified Cassegrain companies, and other unidentified members of the Cassegrain family. There was, of course, no agreement that the Settlement Sum was related to the different elements identified in the Cassegrain Letter. 80 (9) There is no reason to distinguish between CSIRO's paying $8,835,083 and the CSIRO Parties' releases and contractual undertakings, as making up the consideration for the Cassegrain Parties' releases and other contractual undertakings. In other words, if it were possible to apportion the value of the Cassegrain Parties' releases and contractual undertakings as between GCC and Claude Cassegrain, it would be appropriate to apply those proportions to the sum of $8,835,083 (and, if it should be relevant, to the value of the CSIRO Parties' releases and contractual undertakings). 90 The second, fifth, sixth, seventh and ninth questions of law are: Second question of law "Did the Tribunal err in law by not concluding that the deed of settlement entered into on 27 September 1993 between G Cassegrain &amp; Co Pty Limited, Claude Cassegrain, the CSIRO and Sirotech Limited ("the deed of settlement"), either alone or when considered with the simultaneous payment of $9.5m thereunder to, or at the direction of, G Cassegrain &amp; Co Pty Limited and Claude Cassegrain jointly, was the only relevant transaction under which a capital gain accrued to G Cassegrain &amp; Co Pty Limited and Claude Cassegrain jointly for the purposes of Part IIIA ...?" Fifth question of law "Did the Tribunal err in law by declining to apply s 160ZN(1)(a), ... to the capital gain which accrued to G Cassegrain &amp; Co Pty Limited and Claude Cassegrain jointly under the deed of settlement for the purposes of determining the amount of the capital gain which accrued to each of them under that transaction?" Sixth question of law "Did the Tribunal err in law when it went behind the deed of settlement in order to re-construct the transaction which it consummated in reliance on the doctrine of resulting trusts and the principle of law enunciated in Calverly v Green [1984] HCA 81 ; (1985) 155 CLR 242 [sic] ?" Seventh question of law "Did the Tribunal err in law by concluding that the applicants bore an onus to establish the value of the rights which they surrendered under the deed of settlement in favour of CSIRO and Sirotech Limited for the purposes of Part IIIA , ...?" Ninth question of law "Did the Tribunal err in law when it concluded that a capital gain of $9.5m accrued to G Cassegrain &amp; Co Pty Limited pursuant to sections 160M(3)(b) and 160Z ... in consequence of its entry into the deed of settlement and the simultaneous payment of $9.5m under it?" 91 The grounds stated in the notice of appeal that relate to the second question of law are directed against the Tribunal's finding of a constructive trust. I agree that the circumstances did not give rise to a constructive trust for reasons that I gave earlier: the case is not one of purchase money (or perhaps its equivalent) for the purchase of property. 92 Ground 4(e) suggests that the consequence of removing constructive trust from the picture is that we are left with the result that a capital gain accrued to GCC and Claude Cassegrain: "jointly, and, in consequence, as tenants in common in equal shares despite the operation of the apportionment agreement as a side agreement and, in particular, despite its operation in re-apportioning that settlement amount as between the two of them"