Mir v Mir

[2025] NSWCA 154

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Mir v Mir [2025] NSWCA 154

Hearing dates:

6 March 2025

Date of orders:

16 July 2025

Decision date:

16 July 2025

Before:

Ward P at [1]; Leeming JA at [152]; Payne JA at [158]

Decision:

In the John Appeal:

1.   Appeal dismissed with costs.

In the Leo Appeal:

1.   Grant leave to appeal.

2.   Appeal dismissed with costs.

Catchwords:

PARTNERSHIPS AND JOINT VENTURES – existence of partnership – whether primary judge erred in failing to find that there was an unwritten “overarching” partnership sitting above corporate and trust structure under which many of the properties within the Mir Group business were held – whether open to appellant to contend on appeal that the unwritten overarching agreement between the three Mir brothers (as declared by the primary judge after further hearings, having rejected the pleaded partnership claim) itself gave rise to a partnership between the three brothers

EQUITY – trusts and trustees – appointment and removal of trustees – whether House v The King error established on the part of the primary judge in declining to remove trustees notwithstanding misconduct by trustees in denying that certain property held on trust and where serious findings made against one of the trustees in relation to his conduct

Legislation Cited:

Corporations Act 2001 (Cth), s 461(1)(k)

Partnership Act 1892 (NSW), ss 1, 2(1), 5, 9, 32(c), 38

Supreme Court Act 1970 (NSW), s 67

Trustee Act 1925 (NSW), ss 70, 71

Cases Cited:

Fordyce v Ryan; Fordyce v Quinn [2016] QSC 307

Gilmore Finance Pty Ltd v Aesthete Pty Ltd [2022] NSWCA 279

Guazzini v Pateson (1918) 18 SR (NSW) 275

House v The King (1936) 55 CLR 499; [1936] HCA 40

Industrial Equity Ltd v Lyons (Supreme Court (NSW), Cohen J, 15 October 1991, unrep)

In the matter of Reserve Hotels Pty Ltd [2021] NSWSC 376

Kanjian Holdings No 1 Pty Ltd v Kanjian (No 3) (2021) 155 ACSR 230; [2021] NSWSC 839

Kennon v Spry; Spry v Kennon (2008) 238 CLR 366; [2008] HCA 56

Letterstedt v Broers (1884) 9 App Cas 371; [1881-5] All ER Rep 882

Miller v Cameron (1936) 54 CLR 572; [1936] HCA 13

Mir v Mir [2023] NSWSC 408

Mir v Mir (No 2) [2024] NSWSC 791

Mir v Mir (No 3) [2024] NSWSC 899

Mitchell v Simons (1862) 1 SCR (NSW) Eq 70

Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692

Owies v JJE Nominees Pty Ltd [2022] VSCA 142

Palermo v Palermo (No 2) [2014] WASC 6

Palermo v Palermo [2015] WASCA 49

Porteous v Rinehart (1998) 19 WAR 495

Quinton v Proctor [1998] 4 VR 469

Suttor v Gundowda (1950) 81 CLR 418; [1950] HCA 35

Titterton v Oates (1998) 143 FLR 467

United Dominions Corporation Ltd v Brian Pty Lt and others (1985) 157 CLR 1; [1985] HCA 49

Warner Capital Pty Ltd v Shazbot Pty Ltd [2020] NSWCA 121

Welker v Rinehart (No 10) [2012] NSWSC 1330

Zheng v Deng [2020] NZCA 614

Texts Cited:

JD Heydon and MJ Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths)

Category:

Principal judgment

Parties:

Proceedings 2024/00307911
John Mir (First Appellant)
John Mir Holdings Pty Ltd (Second Appellant)
Samuel Mir (Third Appellant)
Acclaim (Australia) Pty Ltd (Fourth Appellant)
Marie Mir (Fifth Appellant)
Leo Mir as executor of the Estate of the late George Mir (First Respondent)
Anthony Mir (Second Respondent)
Mir Bros Unit Constructions Pty Ltd (Third Respondent)
Mir Bros Community Planning Pty Ltd (Fourth Respondent)
Mir Bros West Side Investments Pty Ltd (Fifth Respondent)
Mir Bros Residential Development Pty Ltd (Sixth Respondent)
Mir Bros Rural and Urban Industries Pty Ltd (Seventh Respondent)
GM Amalgamated Investments (Dulwich Hill) Pty Ltd (Eighth Respondent)
JM Associated Investments (Dulwich Hill) Pty Ltd (Ninth Respondent)
Demalle Corporation Pty Ltd (Tenth Respondent)
Mir Bros Enterprises Pty Ltd (Eleventh Respondent)
Mir Bros Constructions Pty Ltd (Twelfth Respondent)
Southern Highlands Pastoral Pty Ltd (Thirteenth Respondent)
Sheraton Homes Pty Ltd (Fourteenth Respondent)
Mir Brothers Developments Pty Ltd (Fifteenth Respondent)
Mir Bros Trading Co Pty Ltd (Sixteenth Respondent)
Samuel Mir Pty Ltd (Seventeenth Respondent)
Mirco Finance Pty Ltd (Eighteenth Respondent)
Mir Bros (Hollywood Creations) Pty Ltd (Nineteenth Respondent)
Mir Bros Holdings Pty Ltd (Twentieth Respondent)
Mir Bros Properties Pty Ltd (Twenty First Respondent)
Mir Bros Real Estate Pty Ltd (Twenty Second Respondent)
Mir Bros Industries Pty Ltd (Twenty Third Respondent)
Regot Pty Ltd (Twenty Fourth Respondent)
Mir Bros High Rise Apartments Pty Ltd (Twenty Fifth Respondent)
Mir Group Holding Company Pty Ltd (Twenty Sixth Respondent)
Mircorp (Australia) Pty Ltd (Twenty Seventh Respondent)
Mir Group of Companies Pty Ltd (Twenty Eighth Respondent)
Mir Group Pty Ltd (Twenty Ninth Respondent)
Glenmore Rural Pty Ltd (Thirtieth Respondent)
Jedda Farm Pty Ltd (Thirty First Respondent)
Leafs Gully Farm Pty Ltd (Thirty Second Respondent)
Pommier Enterprises Pty Ltd (Thirty Third Respondent)
Mir Bros Investments Pty Ltd (Thirty Fourth Respondent)
Mirage Real Estate Pty Ltd (Thirty Fifth Respondent)
George Mir Holdings Pty Ltd (Thirty Seventh Respondent)
Anthony Mir Holdings Pty Ltd (Thirty Eighth Respondent)
Anthony Charles Mir (Thirty Ninth Respondent)
Sidney Mir (Fortieth Respondent)
Stephen Mir (Forty First Respondent)
David Mir (Forty Second Respondent)
Mary Mir (Forty Third Respondent)
Leo Mir (Forty Fourth Respondent)
Proceedings 2024/00309290 and 2024/00470671
Leo Mir in his capacity as executor of the Estate of the late George Mir (Appellant)
John Mir (First Respondent)
Marie Mir (Second Respondent)
Anthony Mir (Third Respondent)
Mir Bros High Rise Apartments Pty Ltd (Fourth Respondent)
Mir Bros Industries Pty Ltd (Fifth Respondent)
Mirco Finance Pty Ltd (formerly Mir Bros Projects Pty Ltd) (Sixth Respondent)
Mir Bros Trading Co Pty Ltd (Seventh Respondent)
Mir Bros (Hollywood Creations) Pty Ltd (Eighth Respondent)

Representation:

Counsel:
JJ Hutton SC and JW Pokoney (John Mir, John Mir Holdings Pty Ltd, Samuel Mir, Acclaim (Australia) Pty Ltd, Marie Mir)
MR Elliott SC with AR Langshaw (Leo Mir as executor of the Estate of the late George Mir, George Mir Holdings Pty Ltd, Leo Mir (in his personal capacity))
CN Bova SC with B Michael (Anthony Mir)

Solicitors:
Dentons (John Mir, John Mir Holdings Pty Ltd, Samuel Mir, Acclaim (Australia) Pty Ltd, Marie Mir)
Horton Rhodes (Leo Mir as executor of the Estate of the late George Mir, George Mir Holdings Pty Ltd, Leo Mir (in his personal capacity))
Cornwalls (Anthony Mir and 3rd – 36th and 38th Respondent)

File Number(s):

2024/00307911; 2024/00309290; 2024/00470671

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity

Citation:

[2023] NSWSC 408; [2024] NSWSC 791; [2024] NSWSC 899

Date of Decision:

21 April 2023

Before:

Ball J

File Number(s):

2019/391539

HEADNOTE

[This headnote is not to be read as part of the judgment]

In 2019, John Mir (John) and entities associated with him (the John Parties) brought proceedings seeking the winding up of a property investment and development business which had traded for many years under the name “Mir Group of Companies” (Mir Group) and for the division of the assets of the business equally between the three Mir brothers (John, George and Tony), their holding companies or their immediate families. The Mir Group business had been conducted since the late 1950s and by 2019 held (through various corporate entities, discretionary trusts and unit trusts; and in some cases discrete partnerships) a substantial real estate portfolio. By the time of the hearing at first instance George had died and his estate was represented by his eldest son, Leo.

At first instance John contended that the Mir Group business was carried on by a partnership between the three brothers (formed partly by express oral agreement and partly by agreement to be inferred by conduct, or alternatively to be inferred wholly by conduct). John contended that this partnership had been dissolved by notice given on 2 April 2020 or, alternatively, upon the death of George in December 2020. John sought consequential orders for the winding up of that partnership under the Partnership Act 1892 (NSW), including the appointment of a receiver to realise and distribute partnership assets.

By cross-claim in those proceedings, Leo sought declarations as to the ownership of certain land located at Blairmount (the J&M Trust Land) which formed part of a larger parcel of land acquired in the names of John and his wife Marie, as trustees for the J&M Trust. Leo (and Tony) contended that the J&M Trust Land formed part of the Mir Group assets (or, if there was found to be an overarching partnership, part of the partnership assets). John contended that the J&M Trust Land was his and Marie’s personal property and was outside the Mir Group (and the alleged overarching partnership).

Leo also sought the removal of John and Marie as trustees of the J&M Trust (an application supported by Tony) on the basis of John’s conduct in denying that the J&M Trust Land was held on trust for the three families and his conduct during the course of the proceedings (which the primary judge described as reprehensible).

In the first of three successive judgments, the primary judge dismissed John’s partnership claim. In the course of so doing, his Honour postulated that there was an overarching unwritten agreement between the three brothers as to the way in which the Mir Group business was conducted but that this had not been pleaded nor had such a claim been advanced as to the existence and terms of such an agreement.

John then sought leave to re-open his case to seek a declaration as to the terms of an overarching agreement between the three brothers of the kind that the primary judge had considered was likely to have existed. The parties consented to a declaration being made as to the existence of such an agreement, the only dispute between them being as to whether the agreement required unanimity between the three in relation to all matters relating to the Mir Group or only those identified by Leo and supported by Tony. In his second judgment, the primary judge resolved the issue as to the form of the declaration to be made in relation to the overarching agreement between the parties, as well as an issue as to the relief sought by John in respect of certain “sub-partnerships” and as to what relief if any should be given in respect of the J&M Trust. That third issue related to the application for the removal of John and Marie as trustees of the J&M Trust. His Honour did not accede to the application for the removal of John and Marie as trustees. In the third judgment, the primary judge dealt with the final orders to be made in relation to the declaration as to the overarching agreement and as to costs.

Both John and Leo challenged the primary judge’s decisions (albeit in different respects). On appeal, John submitted that the primary judge erred: first, by failing to find that the Mir Group was a business conducted in partnership (Ground 1); second, in finding that the acquisition of properties held by trustees of discretionary and unit trusts was inconsistent with the Mir Group business constituting a partnership (Ground 2); and, third, in failing to find that the partnership was dissolved and failing to appoint a receiver to effect a winding up of the partnership (Ground 3). In Leo’s appeal, Leo contended that the primary judge erred in declining to remove John and Marie as trustees of the J&M Trust (Ground 1).

The Court held (Ward P, Leeming and Payne JJA), dismissing the respective appeals:

As to John’s appeal:

1. In relation to Ground 1, the primary did not err in finding (on the case before his Honour) that there was no partnership agreement. Weight must be placed on the deliberate structuring of the Mir Group entities (and the manner of acquisition of the properties acquired by them) to achieve what was apparently regarded at the relevant times as a tax effective outcome across the Mir Group (and for the brothers themselves): [78], [82], [92] (Ward P); [152]-[153] (Leeming JA); [158] Payne JA.

   United Dominions Corporation Ltd v Brian Pty Ltd and others (1985) 157 CLR 1; [1985] HCA 49, cited.

2. The reliance now placed by John (with respect to Ground 1) on the overarching agreement as giving rise to a partnership has all the hallmarks of an opportunistic restructuring of his claim to take advantage of the declaration of an overarching agreement. It was not open to John now to rely on the overarching agreement (declared at the time of the third judgment) as giving rise to the alleged partnership but, even if it were open to him to do so, that would not change the result: [80]-[81] (Ward P); [152]-[153] (Leeming JA); [158] (Payne JA).

3. As to Ground 2, the primary judge did not err in finding that the structure adopted for the acquisition of properties (where those properties were acquired within a discretionary or unit trust structure) was inconsistent with or posed difficulties for the assertion that there was an overarching partnership. The deliberate structuring, on the basis of legal and accounting advice, of the property acquisitions for the purpose of achieving a tax effective outcome leads to the conclusion that, whether or not there was error as contended for by Ground 2, his Honour’s conclusion that there was no overarching partnership was correct: [107]–[109] (Ward P); [152],[154] (Leeming JA); [158] (Payne JA).

4. In light of the above, Ground 3 did not arise.

As to Leo’s appeal:

1. Caution must be exercised in relation to the power to remove a trustee. In the present case, no House v The King error was established in relation to the primary judge’s decision not to remove the trustees of the J&M Trust: [139]-[150] (Ward P); [155]-[156] (Leeming JA); [158] (Payne JA).

   Miller v Cameron (1936) 54 CLR 572; [1936] HCA 13; Welker v Rinehart (No 10) [2012] NSWSC 1330; Letterstedt v Broers (1884) 9 App Cas 371; [1881-5] All ER Rep 882; Guazzini v Pateson (1918) 18 SR (NSW) 275; House v The King (1936) 55 CLR 499; [1936] HCA 40, considered.

JUDGMENT

1. WARD P: Before the Court for hearing on 6 March 2025 were related proceedings arising out of a dispute between members of the Mir family and related interests. The main protagonists are John Mir, his brother Anthony Mir (referred to as Tony) and their nephew, Leo Mir (the eldest son of their late brother, George Mir, and executor of his estate). Various other entities and family members are also parties to one or more of the proceedings. In these reasons, I will refer to the family members by their first names and the associated groups of parties simply by reference to the relevant brother or, in Leo’s case, nephew with whom the parties are associated.

2. At the conclusion of the hearing, without opposition from the parties, the Court made directions for a mediation of the dispute to take place, having regard to potential tax issues that had been raised during the course of the hearing as to the consequences that might arise from the positions for which one or other of the opposing parties contended (see AT 74.42-49). After acceding to requests for an extension of time for the mediation, the Court was ultimately advised that the mediation was unsuccessful. These, therefore, are the reasons for determination of the respective appeal proceedings.

Proceedings at first instance

3. Briefly by way of introduction, in 2019, John (and entities associated with him, as well as his wife, Marie, and their eldest son, Samuel) commenced proceedings in the Equity Division seeking orders in effect for the winding up of the property investment and development business which had traded for many years under the name “the Mir Group of Companies” (Mir Group) and for the division of assets of the business equally between the three brothers (John, George and Tony), their holding companies or their immediate families. The Mir Group business had been conducted since the late 1950s and by 2019 held (through various corporate entities, discretionary trusts and unit trusts) a substantial real estate portfolio. By the time of the hearing at first instance, George had died and his estate was represented by Leo.

4. In those proceedings, John contended that the Mir Group business was carried on by a partnership between the three brothers. John’s primary case was that this partnership was formed partly by express oral agreement and partly by agreement to be inferred by conduct but, further or in the alternative, he contended that the agreement was wholly to be inferred from conduct (see the particulars to [19] of the Second Further Amended Commercial List Summons). John contended that this partnership had been validly dissolved (either by notice given by John pursuant to s 32(c) of the Partnership Act 1892 (NSW) (Partnership Act) on 2 April 2020 or as a consequence of George’s death in December 2020) and that a receiver should be appointed to wind up the partnership and distribute the partnership assets.

5. In the alternative, John claimed that: the corporations through which the business was carried on should be wound up under s 461(1)(k) of the Corporations Act 2001 (Cth) (Corporations Act) (the just and equitable winding up ground); a receiver should be appointed to the assets of each of the trusts under s 67 of the Supreme Court Act 1970 (NSW); and receivers should be appointed to a number of partnerships (referred to as sub-partnerships) through which part of the business was carried on and which John claimed had also been dissolved by notices given under s 32(c) of the Partnership Act.

6. In those proceedings, George commenced (and Leo, in his capacity as executor of George’s estate, subsequently continued) a cross-claim against John and Marie, seeking a declaration as to the beneficial ownership of certain land at Blairmount (to which I will refer as the J&M Trust Land although sometimes in submissions and by the primary judge this was referred to as the Blairmount Land). Leo and Tony contended that the J&M Trust Land, which was held by John and Marie on trust for the “J&M Trust” (a discretionary trust settled by deed dated 27 August 1979), formed part of the Mir Group assets and was in fact held on trust for the families of George, John and Tony equally. The J&M Trust Land was a portion of a larger parcel of land that it was accepted by all parties was held by John and Marie personally and on which they had built their family home. In the alternative, Leo and Tony contended that, if John’s partnership claim succeeded, then the J&M Trust Land was partnership property. John and Marie contended to the contrary that the J&M Trust Land was their personal property (outside of the Mir Group).

7. Leo then sought the removal of John and Marie as trustees of the J&M Trust (an application supported by Tony) on the basis of John’s conduct in denying that the J&M Trust Land was held on trust for the three families and his conduct during the course of the proceedings (as I explain in due course). Leo says (and John does not dispute) that the hearing was conducted on the basis that Marie had simply left the administration of the affairs of the J&M Trust to John and acquiesced in decisions he had made. Marie did not give evidence in the proceedings.

8. The proceedings were heard in the Commercial List by Ball J (as his Honour then was) in February and March 2023, with a further hearing on 30 May 2024 and yet another hearing on 19 July 2024 (for reasons that I will shortly explain); and culminated in three judgments: Mir v Mir [2023] NSWSC 408; Mir v Mir (No 2) [2024] NSWSC 791 and Mir v Mir (No 3) [2024] NSWSC 899 (to which I will refer, somewhat unimaginatively, as the First, Second and Third Judgments respectively).

9. The background relating to the Mir Group is set out in the First Judgment ([4]-[23]) as is the history of events relating to the acquisition (in 1979) and subsequent partial development of the land at Blairmount, which comprised seven individual lots ([24]-[57]), and the events leading up to the proceedings ([58]-[81]). This will not here be repeated save as is necessary for the determination of the issues in this Court.

3. It is, however, convenient at the outset to note the complicated way in which title to the land at Blairmount (including the J&M Trust Land) is now recorded on the Register. That is not least because, after judgment had been reserved and the Court-ordered mediation had unsuccessfully concluded, John sought leave to make supplementary submissions on the issue as to whether the J&M Trust Land could be transferred to a corporate trustee (if he and Marie were replaced as trustees) without a formal subdivision of the land. John maintained that that issue had only been raised for the first time in the course of oral submissions in reply for Leo on Leo’s appeal. Leo cavils with that proposition and says that the issue was raised before the primary judge (as well as on appeal) and that the position John now takes could have been raised before the primary judge or on appeal (and was not). Against the possibility that leave was granted for those supplementary submissions, Leo’s submissions in response also dealt with the substance of John’s supplementary submissions.

4. Originally, as noted above, there were seven individual lots at Blairmount: three larger lots (referred to as Upper (or larger) Lot 1, Lower (or smaller) Lot 1 and Lot 103) and four smaller lots (Lots 110, 111 and 112/113). Some of that land was zoned for residential use (and potentially developable); part was zoned for scenic protection (and was not developable).

5. By resolution dated 29 November 1979, the trustees of the J&M Trust (John and Marie) resolved, in effect, that the developable portion of Upper Lot 1, Lower Lot 1 and Lot 103 would be registered in the names of John and Marie on behalf of the J&M Trust and that the remaining portion of those lots (then zoned for scenic protection) was “owned beneficially by John and Marie”.

6. Over time, the developable portion of Lot 103 and all of Lots 110-113 were the subject of a residential development and became amalgamated into one lot (initially Lot 74, which later became Lot 2).

7. The complication addressed in the parties’ supplementary submissions arises because the Certificate of Title for Lot 2 (a copy of which was handed up during the course of submissions but not apparently in evidence below) records ownership of different portions of the land by different persons or entities, by reference to various former plans. Hence, although there is only the one lot (not subdivided), the title records different owners of portions of that lot. Relevantly, John and Marie, who as already noted are the trustees of the J&M Trust, are recorded as owners (as joint tenants) of parts of the land formerly in different folios but other Mir Group entities are recorded as owning other parts of the land in various of the former folios. As noted by the primary judge, there was therefore an issue as to how, if John and Marie were to be replaced as trustees of the J&M Trust, their beneficial ownership of part of the land intended to be held by them personally would be preserved (see First Judgment at [149]).

8. Ultimately, it is not necessary to resolve the issue as to whether (as Leo submits) the part of Lot 2 comprising the J&M Trust Land could be transferred to a new corporate trustee without a subdivision (by the making of a vesting order under s 71 of the Trustee Act 1925 (NSW) and service of that vesting order on the Registrar-General), given the conclusion I have reached that the cross-appeal challenging the primary judge’s refusal to remove John and Marie as trustees of the J&M Trust fails. Therefore the issue sought to be addressed by the supplementary submissions falls away.

First Judgment

16. The primary judge found that, while much of the evidence was consistent with the existence of a partnership ([101]), there was no partnership as contended for by John (described as an “overarching” one that in some sense sat above the various entities through which the Mir Group caried on the business – see at [82]). His Honour observed (at [82]) that John had not sought to address directly the question as to how the partnership for which he contended could operate consistently with the various entities in the Mir Group but instead had pointed out that the relationship between the brothers had many of the attributes of a partnership and had advanced a case by analogy to other cases (Palermo v Palermo [2015] WASCA 49 (Palermo); Warner Capital Pty Ltd v Shazbot Pty Ltd [2020] NSWCA 121 and Zheng v Deng [2020] NZCA 614). His Honour addressed those cases at [83]-[93], concluding that each provided little or no assistance for the claim advanced by John (see at [86]; [90]; [93]).

17. The primary judge also noted at [82] the submission (maintained by John on appeal) that the relationship between the three brothers was properly characterised as a partnership because it satisfied the requirements set out in s 1 of the Partnership Act, namely “the relation which exists between persons carrying on a business in common with a view of profit”.

18. His Honour accepted (at [94]) that it was possible for a partnership to hold assets through companies and that it was possible for shares in the companies to be held by a nominee who in effect holds shares on trust for the partnership ([94]) but said that, where the underlying assets are governed by the terms of a trust, they cannot be governed by the terms of a partnership at the same time ([95]). His Honour said that the trust claimed by John (in substance that the real estate belonging to the Mir Group is partnership property held on trust for the partners by the companies in which the real property is vested) was inconsistent with the fact that the companies held the properties on trust in accordance with trust deeds, the beneficiaries of those trusts not being the three brothers alone ([95]). His Honour identified this as a fatal problem with John’s claim that there was an overarching partnership ([97]).

19. At [97], the primary judge said that the parties, on accounting advice, had chosen a particular structure through which to conduct their business, that structure being inconsistent with the partnership that John asserted existed; and, at [98], that a similar problem existed in relation to the asserted sub-partnerships.

20. Pausing here, there is in evidence a letter dated 5 September 1969 from O’Connor Davis & Co Solicitors & Attorneys, and addressed to George, which referred to a discussion between Mr O’Connor and another solicitor, Mr Wallace, “in regard to the family affairs generally”. It is clear from the letter that the author (Mr O’Connor) intended that the record of the discussion as to “the overall tax set-up” and “estate planning” would give “everyone concerned” (which no doubt would have included the other two brothers) an opportunity to agree or disagree with the matters set out therein.

21. The letter advised, among other things, as to the establishment of a “trading partnership” between five Mir Group companies and referred to earlier advice (a letter dated 7 July 1969) which was said to have set out the “important things which indicate the commencement of a partnership for taxation purposes”. The letter also referred to the “necessity of making sure that there was ample evidence of a partnership business having been commenced”. Under the heading “[o]verall arrangement of companies for tax purposes, estate planning purposes etc.”, the letter noted that a lot of the operating companies would probably own land as at 31 October (presumably as at 1969, though the year is not there specified) and that “any lumping together for land tax purposes should be avoided”. Later in the letter there was reference to a number of Mir Group companies that the author termed “operating companies apart from the partnership operation”. The letter provides support for the reference by his Honour to professional advice having been obtained as to the structure of the overall group operation (or at least as to some of the entities in the Mir Group).

22. Similarly, there is in evidence an extract from what is described by the respondents as a 1969 “Statement of Facts” prepared by Lewis, Newman Reed & Co, Chartered Accountants, which refers to particular partnerships between various of the family members and to the danger that the owners of properties held by those partnerships would be considered co-owners and not partners (and the importance of rectifying this). Again, this provides support for the primary judge’s observation that the parties had structured their affairs on the basis of accounting advice.

23. Returning to the reasoning in the First Judgment, the primary judge expressly accepted that much of the evidence was consistent with the existence of a partnership ([101]), pointing to the operation of the Mir Group as a single business under control of the three brothers and that, as a result of agreement between them, there was an equal sharing of profits (between them or their holding companies and wives); and that on occasions each of the brothers described themselves as carrying on business in partnership. However, his Honour said that those facts did not overcome the difficulties identified in John’s case (in essence that the structures put in place by the three brothers were not consistent with the overarching partnership for which John had contended) ([101]).

24. Relevantly, for what next followed in the matter, the primary judge observed at [102] that “[i]t may be that the facts on which the plaintiffs rely are sufficient to establish that there was an agreement between George, John and Tony that the Mir Group would be operated in the way described”. In that context, his Honour gave, as an example, the apparent agreement by the three brothers that the total profits of the Mir Group entities would be divided between them and their families equally and his Honour further postulated an agreement between the brothers that, to the extent necessary, they would procure that members of their families on the boards of group companies would vote in a way to ensure that result.

25. However, his Honour pointed out that no such alternative case (i.e., of an overarching agreement between the brothers as to the operation of the Mir Group) had been advanced in the pleadings ([102]) and his Honour made clear that, in the absence of a pleaded case setting out the terms for which John contended, it was neither appropriate nor possible to make findings on those matters except to the extent necessary to deal with the cross-claim.

26. I interpose here to note that it is clear from his Honour’s reasoning that his Honour did not accept that the agreement he had referred to at [101] (as to the equal sharing of profits arising from the operation of the Mir Group as a single business under the control of the brothers) gave rise to a partnership. Nor was his Honour postulating that the “overarching agreement” (which had not been advanced on the pleadings and the terms of which could not be determined on the evidence before him) gave rise to a partnership of the kind for which John had contended. Nevertheless, the “overarching agreement” as subsequently declared by his Honour (see the Second and Third Judgments) is now sought to be relied upon by John as constituting the relationship between the three brothers as a partnership (as I explain in due course). Unsurprisingly, Leo and Tony complain that it is not now open to John in effect to reopen his partnership case by reference to the overarching agreement the existence of which was determined after the First Judgment.

27. His Honour then proceeded to consider, and dismiss, the alternative claims for relief under s 461(1)(k) of the Corporations Act in respect of the companies ([104]-[128]) and for relief in respect of the trusts ([129]-[139]) and “sub-partnerships” ([140]-[147]). As to the sub-partnerships, his Honour accepted in principle that they could be wound up but rejected the contention that John had given an effective notice winding up a number of the sub-partnerships (see Second Judgment at [6(2)]). There is no challenge to his Honour’s dismissal of those alternative claims.

28. As to Leo’s cross-claim, seeking declaratory relief in relation to the disputed J&M Trust Land, the primary judge reiterated his acceptance that the J&M Trust was a Mir Group entity (see First Judgment at [150]), having earlier found that it was more likely than not that the J&M Trust Land was acquired for the Mir Group and not for John and Marie personally ([37]). However, his Honour said that the terms of the J&M Trust for which Leo contended were inconsistent with the terms of the trust deed, noting that the J&M Trust, like the other Mir Group trusts, was a discretionary trust that had as its beneficiaries the three brothers and members of their immediate families ([151]). His Honour declined to grant Leo the declaratory relief he sought.

29. Relevantly, his Honour repeated ([152]) that there was much to be said for the proposition that the three brothers, by their conduct and the instructions given to advisors, impliedly agreed that they would exercise their powers as trustees, directors or partners of Mir Group entities (or would procure the members of their families who so acted) to ensure that profits of the group would be distributed equally between the three families. His Honour then observed that, if there were such an agreement, questions would arise concerning its status following George’s death (and as to whether it had other terms and other parties) but that no party had advanced an argument in support of such an agreement. His Honour noted that the only agreement advanced by John was a partnership agreement with equal sharing of profits; and said that no agreement was advanced by Leo or the other defendants, apart from Leo’s contention that the J&M Trust contained such a term. In those circumstances, his Honour said that no finding or declaration could be made concerning the existence of such an agreement or its terms.

30. At [154], his Honour summarised his conclusions as being that: first, the collection of entities described as the Mir Group had operated over an extended period as a single business originally controlled by the three brothers and, more recently, increasingly by their respective eldest sons; second, the relationship between the three families had broken down to the extent that the business could no longer operate in the way it once did; and, third, the J&M Trust formed part of the Mir Group.

31. His Honour concluded that no remedy was available to address the first two of those matters because of the structure under which the business operated and that none of the remedies sought by Leo (at least before final oral submissions) was available (either because those remedies involved treating the J&M Trust differently from other trusts that form part of the Mir Group when no agreement to that effect was reached or because no findings had been made concerning the rights and obligations of the parties in relation to the operation of the group as a whole) ([150]).

32. The primary judge acknowledged that the conclusions he had reached could not be regarded as a satisfactory resolution of the case ([154]) but observed (at [155]) that, to a large extent, this situation had arisen because of the tax driven structure that the three brothers had put in place (the consequences of which they must live with) but also to some extent ([156]) because of the way in which the parties had chosen to present their respective cases (John’s focus being on a division of the assets of the group between the three families, Leo’s focus and that of the other defendants being on obtaining what they regarded as their fair share of the Blairmount development).

33. His Honour noted that at the end of the hearing Leo had sought to address the issue that no findings had been made as to the rights and obligations that flowed from the findings that the J&M Trust formed part of the Mir Group business by seeking orders that would involve the appointment of a corporate trustee (in place of John and Marie) of the J&M Trust, with a similar structure as other group companies (the effect of which would be to remove control of the J&M Trust from John and Marie and give it to Tony and Leo). His Honour said that this would require the parties to be given a further opportunity to make submissions and possibly lead evidence on that issue (and that might raise questions as to whether there were other issues that ought to be resolved as part of the proceedings, on which it was appropriate to give the parties an opportunity to make submissions) ([157]).

34. Accordingly, his Honour made directions, among other things, to enable the parties to seek directions in relation to the resolution of any outstanding questions to be determined in the proceedings ([158]).

Second Judgment

35. Following an apparent misunderstanding on the part of the Leo Parties as to whether the primary judge had resolved at least some questions as to the existence and terms of an overarching agreement between the three brothers in the First Judgment (see Second Judgment at [9]), an unsuccessful mediation, and further directions and orders made to enable all outstanding issues to be dealt with, the matter was listed before the primary judge for hearing on 30 May 2024.

36. John sought declarations concerning the existence of the sub-partnerships and orders for the dissolution of the partnerships of which George was a partner and declarations to the effect that would permit him to give notice of the dissolution of partnerships of which he (or an entity he controlled) was a partner. Additionally, John sought leave to re-open his case to seek, in the alternative to the relief he had unsuccessfully sought, a declaration concerning the terms of an overarching agreement between the parties governing the entities in the Mir Group (see Second Judgment at [11]). The agreement that John asserted included two limbs: that decisions regarding the Mir Group were to be made unanimously as between the three brothers; and that profits were to be split equally between the brothers’ immediate families. Pausing here, John did not (at least expressly) seek to revisit the conclusion his Honour had reached as to there being no partnership by reference to the overarching agreement the existence and terms of which were the subject of the application to reopen the case.

37. His Honour ultimately proceeded without formal amendment to the commercial list statement, cross-claim and responses ([17]) (acceding to the respondents’ position in this regard). In the respondents’ written submissions in this Court on John’s appeal, emphasis is placed on the fact that the parties by consent asked the primary judge to determine one limited aspect of the overarching agreement relating to the scope of which decisions required unanimity. They contend that it is not now open to John to rely on the overarching agreement as found by his Honour as giving rise to a partnership (i.e., to run an alternative partnership case not put at first instance). I consider this complaint in due course.

38. In the Second Judgment, his Honour noted the three remaining substantive issues to be resolved ([14]) as: first, the form of the declaration to be made, if any, concerning an overarching agreement between the parties; second, what relief, if any, should be given in relation to the partnerships which form part of the Mir Group (i.e., the so-called sub-partnerships); and, third, what relief should be given in relation to the J&M Trust.

39. As to the first issue, his Honour noted that there was consent for leave being given to the John Parties to amend their claim to seek a declaration concerning the existence of an agreement between the parties regarding the Mir Group and that this was admitted; the only issue being as to the scope of the agreement ([15]), namely whether it required unanimity between John, Tony and Leo in relation to all matters relating to the Mir Group or only those identified in the orders advanced by Leo and supported by Tony ([18]). His Honour noted that it was accepted by the parties that Leo had become a party to the agreement and had assumed the previous rights and obligations of George on George’s death, if not before ([20]). His Honour also noted (at [15]) that it was common ground that the issue as to the scope of the overarching agreement was to be resolved by reference to the evidence before the Court at the time the First Judgment was delivered.

35. The primary judge concluded (at [19]) that it was a term of the agreement that all decisions concerning the Mir Group would be taken unanimously by John, Tony and Leo, explaining what was meant by this at [20]-[22]. In so doing, his Honour said that the three brothers (i.e., George, John and Tony), by their conduct, must have agreed that all decisions in relation to the business, including decisions relating to the way in which the business would operate, would be taken by consensus ([22]) and that, to the extent that this involved delegating particular tasks to one or more of the brothers, those delegations would remain in place at least until the delegation was varied as a result of a further consensus between the three brothers ([22]).

36. His Honour said that, although to a large extent the three brothers operated independently within their area of responsibility, all major decisions (including the decisions to buy and sell properties owned by the group and the allocation of profits of the group) were taken by consensus ([21]).

37. His Honour found that neither of the declarations proposed by the parties properly captured the extent to which unanimity was required (John’s proposed declaration being too broad to the extent that it applied to all decisions, even those that were the subject of a previously agreed delegation; the defendants’ proposed declarations being too narrow to the extent that consensus was required in relation to a matter the subject of an existing delegation) ([24]). His Honour gave the parties a further opportunity to address those issues.

38. As to the second issue (the relief in relation to the sub-partnerships), the primary judge said that it was not open to the plaintiffs (the John Parties) unilaterally to seek to wind up the sub-partnerships since they are Mir Group entities that hold assets that belong to the group and assets of that type can only be disposed of by unanimous agreement between John, Tony and Leo or their delegates ([25]). To the extent that George was a partner of the relevant partnerships, the primary judge considered that the partners must be taken to have agreed that the partnership would not come to an end on the death of an individual partner; rather, it was open to the relevant party to nominate a new person to take over the position of the partner who had died. However, as no submissions had been put to the Court and no declaration sought in that regard, his Honour made no declarations in relation to the sub-partnerships.

39. As to the third issue (the proposed removal of John and Marie as trustees of the J&M Trust), which the primary judge said was the most contentious between the parties, his Honour said that this was complicated by the fact that there was an overarching agreement governing the relationship between the parties and that the ultimate complaint made by Leo and the other defendants was that John and Marie had not complied with that agreement in respect of the J&M Trust Land ([29]). His Honour said that it was not clear why John and Marie should be removed as trustees of the J&M Trust as a means of securing their compliance with that agreement ([29]).

40. The primary judge then addressed the five matters relied upon by the defendants to justify the removal of John and Marie ([30]-[35]), those being, in summary: first, that John and Marie had breached the overarching agreement in their capacities as trustees by asserting that that agreement did not bind them as trustees because the assets of the trust did not form part of the assets of the Mir Group (a breach said to be one going to the heart of the purpose for which the trust was established); second, that on occasions John and Marie had denied that the J&M Trust Land formed part of the trust assets; third, that by their conduct John and Marie had demonstrated that they were unsuited to remain as trustees of the trust (accusing John of dishonesty and giving false evidence; and Marie of failure to exercise independent judgment); fourth, that John and Marie had a conflict of interest that made it unsuitable for them to remain as trustees; and fifth, that, as discretionary beneficiaries of the trust, the defendants were at a disadvantage because they may not be able to obtain access to relevant documents. The primary judge attached more weight to the first three of those matters (breach of the overarching agreement, denial that the J&M Trust Land was part of the trust assets and the complaint as to the conduct of John and Marie) than the last two ([38]).

41. However, at [39], his Honour said that another relevant consideration was that the context in which the issue arose remained unclear. His Honour said that it was unlikely that the agreement governing the Mir Group would continue indefinitely; that, absent novation by the conduct of the parties, it was arguable that it would come to an end on the death of John or Tony; and that it was also arguable that the agreement was capable of termination on reasonable notice by any one of John, Tony and Leo.

42. At [40], his Honour posed questions as to what would follow (assuming the agreement was capable of termination and was terminated) from termination of the overarching agreement: whether it was an implied term of the agreement that the assets of the business would be sold and the net proceeds distributed equally between the three families; or whether each entity of the Mir Group would continue to operate in accordance with its own constituent documents and agreements. His Honour considered that the answer to those questions might be relevant to the exercise of discretion to remove John and Marie. In that context, his Honour said that the better approach was only to make orders necessary to resolve the existing disputes between the parties and otherwise to preserve the status quo ([41]).

43. While his Honour accepted that in some respects John’s conduct had been reprehensible (since he had claimed for himself benefits that he knew or must have known belonged to his brothers and, more recently, had compounded the problem by seeking to blame others for what must have been his own decisions), and that this on its own may well have justified the removal of John and Marie as trustees, his Honour accepted that John and Marie were likely to comply with the declarations made by the Court (as they had said they would), noting that if they did not, their removal as trustees of the J&M Trust remained a possibility ([42]). Accordingly, his Honour was not satisfied that the circumstances justified the removal of John and Marie as trustees at that time ([42]).

44. As adverted to in the course of his reasons, the primary judge gave the parties the opportunity to make further submissions on the final form of the declarations to be made, particularly in relation to the extent that the agreement between them required decisions to be taken unanimously ([43]).

Third Judgment

50. The Third Judgment, handed down after a further hearing on 19 July 2024, dealt with two outstanding questions: the final form of the orders to be made and the question of costs. Only the former is here relevant.

51. As to the terms of the overarching agreement, the primary judge made the following orders (at [24]):

(3)   The Court declares that there is an agreement between all parties to these proceedings that:

(a)   the profits of the Mir Group will be distributed equally between the three immediate families of Anthony Mir, the late George Mir and John Mir; and

(b)   any decision concerning the business carried on by the Mir Group can only be made with the agreement of each of Anthony Mir, Leo Mir and John Mir or in each case, a nominee of Anthony Mir, Leo Mir and John Mir;

(4)   The Court notes that that the declarations at order 3 above are not intended, and do not operate, to alter any delegation that may presently exist. The practical effect of this notation is to confirm that, if and to the extent a party presently has authority delegated to them to perform a function, that authority remains undisturbed by the making of the declaration in order 3(b) above; …

Appeals

52. Perhaps not surprisingly, given the tortured history of the proceedings to date and the apparent inability of the parties co-operatively to resolve their disputes despite (now at least two) attempts at mediation, John and Leo each commenced proceedings in this Court, challenging the primary judge’s decisions in different respects. Tony supports Leo in his submissions in relation to Leo’s appeal and Leo in turn adopted Tony’s submissions in relation to John’s appeal.

John’s Appeal (2024/00307911)

53. By notice of appeal filed 25 October 2024, John appeals from the whole of the decision of the primary judge on the following grounds:

1.   The primary judge erred in failing to find that the business conducted by the Mir Group was a business conducted by John, Tony and George (by themselves or through nominee family members and other entities) in partnership.

2.   The primary judge erred in finding that the Mir Group business’ acquisition of properties held by discretionary trusts and unit trusts was inconsistent with the Mir Group business constituting a partnership.

3.   The primary judge erred in:

a.   failing to find that the partnership was dissolved by reason of the death of George Mir and/or the giving of notice by John Mir;

b.   failing to appoint a receiver to effect a winding up of the partnership.

Leo’s Appeal (2024/00309290) and Summons for Leave to Appeal (2024/00470671)

54. Leo filed a notice of appeal on 25 October 2024, as the executor of George’s estate, appealing from that part of the decision of the primary judge in relation to the first cross-claim (being his Honour’s decision that the circumstances did not justify removal of John and Marie as trustees of the J&M Trust), on the following ground:

1.   The primary judge erred in the making of the decision as to whether to exercise the power to remove the first and second respondents [John and Marie] as trustees of the J&M Trust, with the discretion miscarrying through the primary judge’s decision not to remove them and the reasoning for that decision.

Particulars

…

(i)   given the evidence and findings of the primary judge to the effect that the first respondent [John] (to whom the second respondent [Marie] left the administration of the Trust’s affairs) had behaved dishonestly and reprehensively not only in relation to his dealings with the assets of the trust, but also in the conduct of the proceedings before the primary judge about those matters, the decision not to remove the respondents as trustees was unreasonable or plainly unjust (such that error may be inferred, whether or not the underlying error be one or more of the specific matters set out in ii to iv below);

(ii)   the primary judge did not give any real, or alternatively did not give appropriate weight and priority to the fact that the respondents had behaved as described in (i) above;

(iii)   the matters relied upon by the primary judge as set out in paragraphs [39]-[41] of the judgment appealed from, concerning what might possibly occur at some point in the future of the parties’ relationships: (a) included possibilities that were not sufficiently realistic to warrant weight being attached to them, (b) were in any event irrelevant, or alternatively had inappropriate weight attached to them, and (c) were matters which were not the subject of argument or raised with the parties by the primary judge before judgment, such that the appellant had not appreciated it would need to, and had not, addressed them at the hearing or prior to judgment; and (d) incorrectly treated the appellant and the third respondent [Tony] as a single set of interests, in circumstances where they would not necessarily agree on decisions governing the Trust or the Mir Group in the future; and

(iv)   the primary judge made an erroneous finding of fact that was material to the exercise of discretion, by finding at paragraph [42] of the judgment that the respondents would be likely to comply with declarations the Court [sic] (which finding reflected the respondents’ assertion to the Court that they would comply). That finding was not supported by reasons. It was also contrary to other findings made by the primary judge about the extent to which sworn statements made by the first respondent to the Court could be relied upon. It was also a finding that could not safely be made in the circumstances of the findings described at (i) above. This incorrect finding of fact resulted in the Court erroneously placing weight on an irrelevant consideration.

55. Leo subsequently filed a summons seeking leave to appeal on 18 December 2024, accepting that his appeal required leave as the subject matter does not involve a direct monetary value (referring to Gilmore Finance Pty Ltd v Aesthete Pty Ltd [2022] NSWCA 279 at [3]-[9]). The summons for leave to appeal was heard concurrently with the appeal itself in circumstances where the issues arising on the question of leave would substantially overlap with the issues that arise on the substantive appeal and the orders challenged by Leo finally determined at that point the application for the removal of the trustees of the J&M Trust. Leo submitted in that context that the subject matter of the appeal concerns the control of the J&M Trust, which holds large and highly valuable real property in New South Wales.

John’s Appeal

56. Turning first to John’s appeal, Grounds 1 and 2 to some extent run together (since Ground 2 focusses on one aspect of the reasoning that led his Honour to conclude that there was no partnership – that conclusion being the subject of challenge in Ground 1). However, I will address them seriatim. As to Ground 3, John accepted that if he does not succeed on the central issue as to the existence of a partnership then Ground 3 does not arise. In what follows I will refer to the submissions of Tony and Leo collectively as the respondents’ submissions.

Ground 1 – Asserted Partnership

57. The essence of John’s challenge to the primary judge’s rejection of his partnership claim (which, as noted earlier, proceeded on the basis that there was an overarching partnership between the three brothers that sat above the various Mir Group entities) is what John identifies as the key feature or critical element in this case of control (the “brute fact of control” – see AT 49.17-27).

58. However, John makes an anterior complaint that the primary judge erred in his approach to the determination as to whether there was an overarching partnership, by treating “apparent difficulties” in the identification of some of the assets of the partnership as being decisive of the existence of the partnership itself (John here referring to the First Judgment at [95] and [101]). In this regard, John distinguishes between what he identifies as the primary issue (whether there is a partnership) and a secondary issue (what are the partnership assets) and argues that his Honour erred in considering the secondary issue first. I deal with this complaint at [77]-[78] below.

59. Turning then to the conclusion that there was no partnership of the kind for which John had contended, John argues that each of the elements of the statutory definition of partnership in s 2(1) of the Partnership Act (i.e., persons carrying on a business; in common; with a view to profit) is here established. John says that the first (carrying on of a business) is established by the findings that the Mir Group conducted a successful property investment development business (John here emphasising that his Honour found that the Mir Group operated as a “single business”); the second (that the carrying on of the business be “in common”) by the finding that it operated as a single business “under the control” of the brothers at least until about 2017 and then with Leo’s increasing involvement; the third (that it be with a view to profit) by reference to the evidence as to the distribution of profit from 2011-2019 to the three brothers, their holding companies or families (John referring to the evidence of the Mir Group’s accountant, Mr Mannion, and the forensic accounting expert, Mr Samuel, in this regard).

60. As already noted, what John here emphasises is the element of “control” (and hence he relies on the overarching agreement, as declared, as giving rise to a partnership). John relies on the finding of fact that each of the individuals and companies agreed to hold his or its assets (shares in the case of individuals or real property and other assets in the case of the companies) and exercise his or its powers on the basis that any decision concerning the business carried on by the Mir Group could only be made with the agreement of the three brothers (and, later, Leo in place of George) and that profits of the business were to be equally shared between the brothers’ immediate families. John relies on this as establishing the alleged partnership.

61. In addition, though accepting that this is not determinative, John points to the evidence that the three brothers frequently employed the language of “partner” or “partnership” in describing their relationship. The respondents point out that the parties also frequently referred to their dealings as the Mir Group and that the trading name used for the business is and was the Mir Bros Group of Companies (as his Honour noted in the First Judgment at [1]).

62. The respondents argue that the facts on which John relies for the contention that there is a partnership are at least equally consistent with the Mir Group entities carrying on the business, governed by the overarching agreement; and that the overarching agreement is sufficient to ensure that the brothers control the decisions of the business and that profits are split equally between the three families; and they submit that the fact that the brothers have control over decision-making does not mean they themselves carry on the business.

63. The respondents submit that the evidence demonstrates that an overarching partnership was contrary to the parties’ intentions and would entail certain incidents of partnership which are inherently unlikely to have been intended by the brothers. As to the former, the respondents point to the legal and accounting advice obtained as to the structure of the Mir Group (to which I have referred above). As to the latter, the respondents note that carrying on a business in common usually entails mutual agency, rights and obligations between the persons said to be partners and that the decisions and actions of one partner can bind the others (s 5 of the Partnership Act) but that this is contrary to the overarching agreement declared by the primary judge, requiring unanimity. The respondents also submit that, referring to s 9 of the Partnership Act, there is no evidence that the three brothers agreed to take responsibility for debts owed by the companies to other persons, nor was there any record of an agreement intended to operate outside the corporate structure whereby the parties preserved the risk of personal liability. The respondents thus submit that an overarching agreement short of a partnership makes more commercial sense; and is therefore more likely to have been intended.

64. The respondents argue that the evidence demonstrates that the three brothers deliberately structured their affairs to take advantage of the taxation regime to manage income effectively by the use of companies and trusts and say that there is no basis to infer a partnership agreement between the three brothers which would likely undermine those advantages (invoking the observations of Young J, as his Honour then was, in Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 (Morgan) at 694-695). John argues in response that the decision in Morgan does not assist the respondents, pointing out that in the present case he does not ask the Court to treat the Mir Group structure as a “sham” and that all of the parties asked the Court to recognise that an undocumented overarching agreement which gave control to the three brothers was imposed on the documented corporate and trust structures.

152. Secondly, the primary judge relied on the not unfamiliar position that the parties had, in accordance with accounting advice, formally adopted a particular structure through which to conduct their business, which is inconsistent with the structure which more recently suits some of them to contend was in place. Many considerations tell against that course, but one concerns the taxation benefits received over many years. The appeal books do not permit a full consideration of the scope of what would be involved, but an example may be seen from the land tax assessment notices in evidence. For example, “the Westside Investment Trust” held land at 376 Illawarra Rd valued at some $8.4 million, upon which land tax was calculated, apparently taking advantage of the $692,000 threshold each year for many years. Three parcels of land (at Hurlstone Park, Stoddart St Roselands, and Nicole St Roselands) were held by the three brothers personally as partnership property. The estimation of land tax proceeded on the basis that the aggregated taxable land value of the three parcels was some $5.6 million, and once again, the partnership obtained the benefit of the threshold of $692,000. Acceptance of the proposition that all four parcels of land were property of the same partnership would carry with it the prima facie need to recalculate decades of assessments of land tax so as to ensure that a single threshold was applied for the entirety of those parcels, and the numerous other parcels of land, said to be partnership assets. It might well be that other taxation consequences, including income tax and capital gains tax, were much more substantial than land tax, which is only chosen because, as it happens, there were documents in evidence which could readily illustrate the point. It was in part with these considerations in mind that the parties acceded to the Court’s suggestion that there be a further mediation.

153. Thirdly, on Leo’s appeal concerning the removal of John and Marie as trustees, it was rightly conceded that it was necessary to establish House v The King error, and there was no dissent from what Dixon J said in Miller v Cameron (1936) 54 CLR 572 at 581; [1936] HCA 13 that the “delicate question” whether a Court should act to remove a trustee is “one upon which the decision of a primary judge is entitled to especial weight”. Further to that may be added that the primary judge saw John give evidence in chief and be cross-examined over parts of four days at trial.

154. The primary judge confronted the serious proposition that the trustees had, on a number of occasions prior to the resolution of their claim in the Court, asserted full legal and beneficial ownership of the Claremont land. I agree with Ward P that the weight to be accorded to such considerations, and the probability that the trustees would abide by the Court’s orders, were matters for the primary judge. I also agree that the complaint about a material denial of natural justice is without foundation.

155. Finally, it is far from clear to me that this appeal, purportedly brought as of right, did not require leave, bearing in mind that it concerns merely the legal ownership of land held on trust: see Gilmore Finance Pty Ltd v Aesthete Pty Ltd [2022] NSWCA 279. But no submissions having been made about the need for a grant of leave, nothing more need be said.

156. PAYNE JA: I agree with the President. I also agree with the additional remarks of Leeming JA.

**********

Amendments

21 July 2025 - [157] "... as of right, required leave," amended to "... as of right, did not require leave,"

Decision last updated: 21 July 2025