Mir v Mir

[2023] NSWSC 408

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Mir v Mir [2023] NSWSC 408

Hearing dates:

6 to 9, 13 to 16, 20 to 22, 27 to 28 February and 1 to 2 March 2023

Decision date:

21 April 2023

Jurisdiction:

Equity - Commercial List

Before:

Ball J

Decision:

(1)   Direct that the parties bring in short minutes of order that give effect to these reasons for judgment, that deal with the question of costs if costs can be agreed and that set out directions to be given by the Court in relation to the resolution of any outstanding questions to be determined in these proceedings;

(2)   If the parties cannot agree on the form of the orders and directions referred to in (1), direct that by 22 May 2023 each separately represented party serve on the others and provide to my Associate a form of orders and directions that they seek and a short outline of written submissions in support of those orders and directions;

(3)   Stand the matter over for directions at 9.15 am on 29 May 2023 or such other date as agreed with my Associate.

Catchwords:

PARTNERSHIPS AND JOINT VENTURES — Existence of partnership — Where alleged partners conducted business using various corporate and trust entities and ‘sub-partnerships’— Whether ‘overarching’ partnership can exist ‘above’ various entities used to carry on business — Where putative partners agreed to share total profits from the companies, trusts and partnerships equally — Where assets held on trust — Where terms of trust inconsistent with overarching partnership — Where overarching partnership cannot have interest in alleged sub-partnerships

CORPORATIONS — Winding up — Whether group of companies should be wound up on the just and equitable ground under s 461(1)(k) of the Corporations Act 2001 (Cth)— Whether companies are in deadlock — Where breakdown in the relationship has led to a fundamental change in the way in which the group operates — Where some companies simply hold investment properties on trust

EQUITY — Trusts and trustees — Express trusts — Termination — Whether receivers should be appointed to the assets of trusts — Where no evidence that trust assets are in jeopardy

EQUITY — Trusts and trustees — Express trusts — Termination — Whether trusts should be dissolved on the basis that the purpose of the trusts is at an end — Where bringing forward vesting date not in interest of beneficiaries

PARTNERSHIPS AND JOINT VENTURES — Existence of partnership — Whether ‘sub-partnerships’ exist — Where no partnership agreement — Where there is co-ownership of investment properties, equal sharing of profits and lodging of partnership tax returns — Where ‘sub-partnerships’ acquired properties as part of a business

PARTNERSHIPS AND JOINT VENTURES — Dissolution — Whether ‘sub-partnerships’ may be dissolved — Where death of a partner — Where notice of dissolution issued

EQUITY — Trusts and trustees — Express trusts — Declaration of trust terms — Where declaration of terms sought inconsistent with terms of trust deed

Legislation Cited:

Bankruptcy Act 1966 (Cth)

Corporations Act 2001 (Cth)

Partnership Act 1892 (NSW)

Supreme Court Act 1970 (NSW)

Uniform Civil Procedure Rules 2001 (NSW)

Cases Cited:

Baba v Sheehan [2019] NSWSC 1281

Barkeley v Reay (1842) 2 Hare 308; 67 ER 127

Basecove Pty Ltd v Dolores Lavin Management Pty Ltd [2009] NSWSC 1315

Ebrahimi v Westbourne Galleries Ltd [1973] AC 360

In the matter of Amazon Pest Control Pty Limited [2012] NSWSC 1568

In the matter of Austral Alloys Pty Ltd [2017] NSWSC 1833

In the matter of Catombal Investments Pty Ltd [2012] NSWSC 775

Johnny Oceans Restaurant Pty Ltd v Page [2003] NSWSC 952

Middleton v Dodswell (1806) 13 Ves 266; 33 ER 294

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

Palermo v Palermo [2015] WASCA 49

Re Austec Wagga Wagga Pty Limited (in liquidation) [2018] NSWSC 1476

Re Equititrust Ltd [2011] QSC 353; (2011) 288 ALR 800

Re Gayton [2001] NSWSC 473

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

Yunghanns v Candoora No 19 Pty Ltd (No 2) [2000] VSC 300; (2000) 35 ACSR 34

Zheng v Deng [2020] NZCA 614

Texts Cited:

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

P Walton, Kerr & Hunter on Receivers and Administrators (21st ed, 2020, Sweet & Maxwell)

R I Banks, Lindley & Banks on Partnership (19th ed, 2010, Sweet & Maxwell)

Category:

Principal judgment

Parties:

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

Representation:

Counsel:
A Leopold SC with J Hutton SC and J Pokoney (Plaintiffs | First and Second Cross Defendants)
MR Elliott SC with AR Langshaw (First, Thirty Seventh and Forty Fourth Defendants | Cross-Claimant)
CN Bova SC with B Michael (Second to Thirty Sixth and Thirty Eighth Defendants | Third to Eighth Cross Defendants)

Solicitors:
Dentons (Plaintiffs | First and Second Cross Defendants)
Horton Rhodes (First, Thirty Seventh and Forty Fourth Defendants | Cross-Claimant)
Cornwalls (Second to Thirty Sixth and Thirty Eighth Defendants | Third to Eighth Cross Defendants)

File Number(s):

2019/391539

Publication restriction:

None

JUDGMENT

Introduction

1. Mr George Mir (George), Mr John Mir (John) and Mr Anthony Mir (Tony) are brothers who starting in about 1957 built and, until George’s death in December 2020, together controlled a highly successful property investment and development business which trades under the name “the Mir Group of Companies” (the Mir Group). The business is conducted through a large number of companies and trusts. In these proceedings, John and entities associated with him seek orders the effect of which would be to wind up the business and to divide the assets of the business equally between John, Tony and George’s estate or the immediate families of John, Tony and George.

2. The claim for that relief is made on two bases. First, John claims that the business was carried on by a partnership between him, George and Tony, that that partnership was validly dissolved either by notice given by him under s 32(c) of the Partnership Act 1892 (NSW) or as a consequence of George’s death, with the result that a receiver should be appointed to wind up the partnership. In the alternative, the plaintiffs claim that (1) the corporations through which the business is carried on should be wound up under s 461(1)(k) of the Corporations Act 2001 (Cth) (which permits the Court to order the winding up of a corporation where it is of the opinion that “it is just and equitable that the company be wound up”); (2) a receiver should be appointed to the assets of each of the trusts under s 67 of the Supreme Court Act 1970 (NSW), with the intention that the assets be sold and any surplus be distributed among the trust beneficiaries in a way that would ensure that each of George, John and Tony and their immediate families received an equal share; and (3) a number of partnerships through which it is said part of the business is carried on (referred to by the plaintiffs as “sub-partnerships”) have been dissolved by notices given under s 32(c) of the Partnership Act, as a consequence of which receivers should be appointed to wind up those partnerships and distribute the surplus assets between the partners equally.

3. Mr Leo Mir (Leo), George’s oldest son, brings as executor of George’s estate a cross-claim against John and John’s wife, Marie, seeking a declaration that certain land at Blairmount that they hold on trust for a trust known as “the J&M Trust” is held on trust for George, John and Tony’s families equally. They also seek a number of ancillary orders to give effect to that declaration.

Background relating to the Mir Group

4. George, John and Tony are three of eleven children of Samuel and Sadie Mir. Most of the family migrated to Australia from Lebanon in 1948 and 1950. At the time, Samuel owned a number of properties in Lebanon. When he first arrived in Australia, he carried on a hawking business, selling clothes and fabrics door to door. George and later John and Tony also worked in that business.

5. The business that became the Mir Group was first established in about 1957 when George, John, Tony and Samuel purchased a property at 194 Marrickville Road, Marrickville, New South Wales, from which they ran a clothing store known as “Hollywood Creations”.

6. It is John’s evidence that the property in Marrickville was purchased by the three brothers a year or so after a conversation in which their mother had suggested that the three brothers go into business together. According to John, the brothers accepted that proposal. They used some savings they had accumulated to purchase from wholesalers clothing and fabrics, which they then sold from panel vans. John says that Samuel, who by then was moving towards retirement, also participated part-time in the business. The property at Marrickville was acquired so the clothing business could expand. After the property was bought, John and Tony continued to focus on the hawking part of the business and George focussed on running the store. From time to time, other family members also worked in the store. It is John’s evidence that Samuel was included on the title of the property as a mark of respect. The evidence is that Samuel and Sadie paid most of the purchase price for the property. According to Tony, Samuel’s inclusion on the title reflected that fact. Tony says he had no savings. He was 15 years old at the time.

7. In 1959, George, John, Tony and Samuel bought a property in Dulwich Hill, New South Wales, which was divided into four flats, which were rented out. In 1961, they bought a second investment property in Belmore, New South Wales. Again, it is John’s evidence that Samuel was included on the titles of those two properties as a mark of respect.

8. In 1962, Mir Bros (Hollywood Creations) Pty Ltd was incorporated. George, John, Tony and Samuel were the directors and equal shareholders of that company which initially operated the family’s retail business. In 1969, it acquired a property at 216 Marrickville Road, Marrickville. The clothing store moved to that property and the property at 196 Marrickville Road was sold.

9. During the 1960s, the three brothers and Samuel incorporated a number of other companies and through those companies bought a number of additional properties, some of which were redeveloped and sold. In some cases, they bought properties in conjunction with George, John and Tony’s older brother, Mr Norman Mir (Norman), who was a builder and who, on occasions, identified properties for his father and brothers to buy. The properties were redeveloped, with Norman doing the building work. It is unclear how Norman was remunerated for that work, but the likelihood is that he was either paid a fee for his services or given a share of the profits on the sale of the property. On at least one occasion, Norman, but not Samuel, became a director of one of the companies (now known as Mir Bros Development Pty Ltd) that was established to acquire a property. Norman ceased to be a director of that company on his death in May 1998. He ceased to develop projects in conjunction with his brothers in the 1970s.

10. John says in his affidavit evidence, and I accept, that in about 1964 he, George and Tony agreed that they should focus on property development rather than the clothing business.

11. In 1970, on the advice of accountants, Samuel Mir Pty Ltd was incorporated and Samuel’s interest in the properties he had acquired with his three sons (apart from one in which he sold his interest) was transferred to it. Samuel remained in control of that company until his death in 1986, when his shareholding in that company passed equally to the three brothers. By about 1970, Samuel had ceased to take an interest in any newly acquired properties.

12. In 1972, Mir Bros Enterprises Pty Ltd was established and as trustee for the MBE Trust acquired a property in Bankstown, New South Wales, which became and remains an office through which the business of the Mir Group is conducted. The office operated and still operates a single bank account through which income of the business is received and business expenses are paid. Up until about the late 1990s the personal expenses of George, John and Tony and their immediate families were also paid through that account. Those personal expenses were recorded in loan accounts kept by the group.

13. The Mir Group business continued to grow in the 1970s. It expanded into the development of industrial and commercial developments. It had and continues to have two principal activities. One is the development of land for the purpose of resale at a profit. As part of that business, the Mir Group buys land and holds it sometimes for an extended period of time (referred to as “land banking”) with the intention of developing it in the future, or possibly selling it at a profit. In some cases, pending development, the land is leased out. The other part of the business is the derivation of income from investment properties. The investment properties include properties that were developed by the Mir Group. John has principally been involved in the property development side of the business and George (until his death) and Tony have principally been involved in the property investment side of the business. George also took responsibility for the group’s legal and financial affairs. Generally, the expenses of the business, including the purchase price of further properties, were financed through the sale of properties and income generated by the investment properties.

14. On 13 April 1976, each of the three brothers established family trusts (the John Mir Family Trust, the George Mir Family Trust and the Anthony Mir Family Trust), the trustees of which were George Mir Holdings Pty Ltd, John Mir Holdings Pty Ltd and Anthony Mir Holdings Pty Ltd respectively. Each of those companies was established to act as trustees respectively of the family trusts of the three brothers.

15. In 1986, the Mir Group established a second office in Liverpool, New South Wales. John moved to that office and has worked from that office since then. The Liverpool office became responsible for managing a number of investment properties of the group. It also became the office principally responsible for the property development side of the business. It opened one or more bank accounts through which income and expenses incurred by that office were paid. George and Tony continued to be responsible for the Bankstown office and for the properties managed through that office. In 1988, Mr Samuel Mir (Sam), John’s eldest son, commenced work in the Liverpool office. He has worked in that office and has been paid a salary by the office since that time. He is now the family member principally responsible for the property development side of the business. In addition, Mr David Mir (David) and Mr Jason Mir (Jason), two sons of Tony, work in the Liverpool office. Since around 1995, David has been responsible for data entry and managing rental properties managed through the Liverpool office. Since around 2000, Jason has been responsible for the upkeep and maintenance of commercial and industrial properties managed through the Liverpool office as well as development management and sale of residential property in the Campbelltown region. Both David and Jason are paid a salary by the Liverpool office.

16. Mr Sidney Mir (Sid), Tony’s eldest son and a similar age to Sam, commenced working in the Bankstown office part-time in the mid-1980s. He has worked full-time in the office since about 1988. Together with his father, he manages the Bankstown office’s residential portfolio. Leo also works in the Bankstown office. Since around 1985, he has managed the commercial and industrial properties managed by the Bankstown office as well as performing other tasks such as accounting, insurance and superannuation management. Both Sid and Leo are paid a salary by the Bankstown office.

17. No formal mechanism developed for the acquisition of investment or development properties. The position appears to be that one of the three brothers would locate a property for purchase, or in some cases, particularly in more recent times, one of their sons working in the business would do so. If the three brothers agreed, and if funds were available within the group to finance the purchase, the property would be bought and the brothers (usually George, but also John in relation to properties bought through the Liverpool office for development) would seek accounting and taxation advice on the most appropriate legal structure to make the acquisition. Normally, a specific legal structure would be created for each acquisition. Mr Michael Mannion, a chartered accountant who (with a gap of four years between 1998 and 2002) has provided accounting and taxation advice to the Mir Group and the three brothers since 1994, explained in affidavit evidence he gave that the setting up of a separate structure for each acquisition made it easier for the group to deal with each property separately and to account for capital gains tax. The trusts through which many of the properties are held also enable the group to distribute the profits to some entities which have negative income. Finally, the structure enabled the group to avoid the consequences of aggregation for land tax purposes, since the precise ownership of each entity differed. For example, different family members held directorships in different group companies.

4. The three brothers operated with considerable autonomy within their areas of responsibility. John was left to run the Liverpool office and manage the development projects for which it was responsible in a way that he saw fit. Similarly, with the exception of certain matters handled out of the Liverpool office, George was left to manage the financial and legal affairs of the Mir Group and the group’s commercial and industrial investments while Tony was left to manage the residential investments. Each of the brothers had complete trust in the others to run that part of the business for which they were responsible in the interests of all of them and their families. Over time, each started to rely on their eldest son to assist them in running the aspect of the business for which they were responsible.

5. Over time, the financial affairs of the group have changed somewhat. The various loan accounts established by family members were consolidated. In the late 1990s or early 2000s, the practice of paying personal expenses through the business accounts largely ceased and family members established their own banking arrangements. Mir Bros Enterprises Pty Ltd, as trustee for the Samuel Mir Trust, which owns the Bankstown office, has entered into management agreements with the owners of the properties by which it agrees to pay a fixed annual sum in return for the rights to collect any rent and other income and is obliged to pay all the expenses relating to the property. The Liverpool office was originally owned through Sheraton Homes Pty Ltd as trustee of the Sheraton Trust. In 2006, Sheraton Homes Pty Ltd was replaced as trustee by Mir Group of Companies Pty Ltd and that company has entered into agreements to collect the rent and manage the properties for which the Liverpool office is responsible in return for the payment of a fixed annual sum to the owners of the properties. In about 2010, Mir Group Holdings Pty Ltd was established as a lender to the group. It is managed through the Bankstown office. On its establishment, it opened its own bank account. Companies within the group with excess capital lend it money which it on-lends to other companies in the group requiring capital.

6. Although the properties were generally held by corporate entities often as trustees and at least arguably in some cases as partners in partnerships, the corporations held few if any formal meetings and the expenses allocated to them and the disposition of income that they received was determined ultimately by the three brothers on accounting and taxation advice. As I have said, at least until his health declined, George was largely responsible for giving instructions to the accountants and John and Tony were happy to leave it to him to do so.

7. From about 2010 or so, George started suffering from cognitive difficulties and his health began to deteriorate. In about 2012 or 2013, he ceased working in the office on a full-time basis. In 2017, he was no longer able to manage his financial affairs and for a time his daughter, Rita, did so under an enduring power of attorney. George’s roll in the Bankstown office was largely taken over by Leo.

8. Despite these changes, two things are clear. First, with one qualification, since Samuel ceased to have any significant involvement in the business, all important decisions (including the acquisition of properties) were, at least up until about 2017, ultimately taken by the three brothers, in later years in consultation with members of their respective families, but otherwise the brothers largely acted autonomously within their respective areas of responsibility. The one qualification is that, as George’s health deteriorated, his role was gradually taken over by Leo. Second, all excess profits of the group were distributed equally to the holding companies of the three brothers or the brothers themselves or their wives, with the exception of a small number of instances where gifts of income were distributed to relatives. Set out below is a table showing the distribution of group profits between 2011 and 2019:

Therese Mir was George’s wife. She died in June 2018. Marie Mir is John’s wife. Mary Mir is Tony’s wife.

23. Attached as Annexure A (222455, pdf) to this judgment is a schedule showing the properties held by the Mir Group and the registered proprietors of those properties, which is schedule 1 to the Second Further Amended Commercial List Statement (2FACLS). Attached as Annexure B (193937, pdf) is a schedule identifying each company in the group, the properties it owns, its directors and shareholders, what trusts it is a trustee of and whether those trusts are discretionary or unit trusts. Attached as Annexure C (68037, pdf) is a schedule showing properties which are said to be held by entities in sub-partnerships (other than the companies listed in Annexure B) which is Schedule 5 to the 2FACLS. Not included on these lists is the J&M Trust, which holds part of the land in Blairmount and the trustees of which are John and Marie. It is the plaintiffs’ case that that trust is a personal trust of John and his family. It is the defendants’ case — advanced through Leo’s cross-claim — that the J&M Trust forms part of the Mir Group. More will be said about the J&M Trust shortly.

The Blairmount land

24. It is John’s case that as at 1979 his two brothers had both bought and developed spacious homes for their families in Carrs Park and that he was looking to buy a rural block of land to do the same. In early July 1979, he saw an advertisement for the sale of the Blairmount land, which described the land as “30 ha Residential plus 1.5 ha zoned Neibhbourhood [sic] Business with a further 14 ha proposed residential and 101 ha non urban, 146 ha in total”. The land consisted of seven lots. Annexure D (253781, pdf) is a recent aerial photograph showing the location of the Blairmount land, which is bounded by the Hume Motorway at the bottom of the plan (roughly south) and Badgally Road on the right. Marked on the photograph is the location of the seven lots. It is apparent from Annexure D that lot 103 excluded two areas adjacent to Badgally Road. The area consisting of a road leading to an area on which a house is situated is the original Blairmount homestead. The area further along Badgally road travelling in a south easterly direction is a school. The photograph shows that part of the land has now been developed and that John’s home is now located on Lot 103. In 1979, the whole of the land falling within the seven lots was undeveloped. It will be convenient to refer to the lots described on the attached plan as Upper Lot 1, Lower Lot 1 and Original Lot 103 together as “the large lots” and the remaining four lots as “the development lots”.

25. John says that he thought that the 101 hectares of non-urban land referred to in the advertisement would be perfect for his dream home. He says that he enquired of the agent whether he could buy the lots including that land separately. He was told that he could not. Accordingly, after obtaining further information, he discussed with his brothers the possibility of the Mir Group buying the development lots for the purpose of developing them, while he and Marie would buy the three large lots for their home. After inspecting the land, George and Tony agreed. John negotiated with the agent a price of $525,000 for all the land. After the price was agreed, John says that he and George discussed with Mr Wallace, the Mir Group’s accountant at the time, the best way to structure the acquisition. John told Mr Wallace that part of the three large lots was zoned residential, or had some potential for rezoning, but that he had no intention of developing it except for the construction of an access road. Mr Wallace advised that the lots to be acquired by the Mir Group should be acquired by trusts, and that although John had no present intention of developing his land, in case he changed his mind, a trust should be established immediately so that a base value for the developable component could be established for accounting purposes. As a consequence of that advice, the J&M Trust was established with John and Marie as the trustees (and appointors under the trust deed). John says that he discussed with Mr Wallace using the John Mir Family Trust to acquire the land but thought better of that proposal when Mr Wallace told him that, although he was nominated as the appointor of that trust, the current trustees were George and Tony. He says that he wanted he and Marie to control the trust to ensure that their family was the beneficiaries of it. In common with other trust deeds, the trust deed for the J&M Trust included George, Tony and their families as beneficiaries. John queried Mr Wallace about that, who told him that it did not matter, since it was a discretionary trust. John says he accepted what Mr Wallace said.

26. In my view, John’s account of events cannot be accepted. John was not a satisfactory witness. He did not answer questions directly and was inclined to give speeches designed to advance his case rather than answer questions to the best of his recollection. John is obviously an intelligent man. Although aged 86, he is still alert and astute. However, it is not plausible that he had such a detailed recollection of events that occurred over 40 years ago as his affidavit and oral evidence suggests. More significantly, his account of the events relating to the Blairmount land was inherently implausible and inconsistent with the objective facts and contemporaneous records.

27. The Blairmount land was advertised for sale in early to mid-July 1979. There is a dispute concerning which advertisements John saw. However, nothing turns on the resolution of that dispute. John accepts that he saw an advertisement in the Sydney Morning Herald on Saturday, 7 July 1979 advertising a number of properties for sale including the Blairmount land. The version of the advertisement exhibited to John’s affidavit did not include the heading of the advertisement, which read “Special Industrial Investment Commercial Auction” and excluded the bottom part of the advertisement, which referred to several additional properties. It is reasonable to infer that John came across the advertisement while looking at the real estate section of the Saturday edition of the Sydney Morning Herard for investment properties. The title of the advertisement, to which John apparently did not want to draw attention in his evidence, is likely to have caught his attention at the time. As described, the property was likely to be of some interest to the Mir Group.

28. After seeing the advertisement, John contacted the agent, who provided him with a brochure together with the deposited plans for the seven lots comprising the Blairmount land. The brochure described five “IMPORTANT PROPERTIES FOR SALE”, including the Blairmount land. It included in five boxes descriptions of each of the properties together with a sketch plan of the property. The box for the Blairmount land contained similar information as the information contained in the advertisement John had seen. The plan showed each of the seven lots. John, apparently using information he obtained from the deposited plans, wrote on the sketch plan the area of each lot (combining lots 112 and 113), together with some other notes. It was apparent from the information John had that at least some of the residential land was on the three large lots. It is also apparent that John looked at the plans for each of the other four properties included in the brochure, since he also wrote some figures on those.

29. After receiving the brochure, John met with a town planner at Campbelltown City Council. During the meeting, the town planner provided John with a copy of the zoning plan for the Blairmount land (which was included in IDO [Interim Development order] 25). The plan showed a large approved residential development zone extending across the four development lots and across large lot 103, which was marked in salmon pink. The planner told John that some areas had been approved for re-zoning. He marked those areas on a transparent sheet that he overlaid on the existing plan and coloured the areas being considered for rezoning to residential in dark pink and areas reserved for drainage in yellow. Annexure E (1633110, pdf) is a copy of part of the plan shown to John which includes the shaded areas marked up by the planner and on which the location of the three large lots is also shown. It is apparent from that plan that it was expected that the rezoning would extend into upper lot 1 and lower lot 1 and that much of the area that was zoned residential or expected to be zoned residential fell within the three large lots. The plan also shows a proposed ring road commencing at the southern end of the school and traversing the Blairmount land, which would be an extension to Clydesdale Drive. It was evident that the Council plan contemplated that parts of the large lots would be developed, and John must have understood that.

30. John discussed the acquisition of the Blairmount land with George and Tony. It is common ground that John showed his brothers the brochure he had obtained from the agent, which George and Tony also wrote on, and the plan he had obtained from the Council. John also took his brothers to see the land. They agreed to buy it if a suitable price could be negotiated. The land had gone to auction apparently before the brothers inspected it, but had been passed in.

31. According to John, he told George and Tony that he had decided to buy the three large lots personally to build his family home and that he thought that it would be a good opportunity for the partnership (meaning the Mir Group) to buy the other four lots. That version of events is denied by Tony; and both John and Tony gave extensive evidence both in their affidavits and in cross-examination of what was said about the Blairmount land. It is not plausible that either of them, almost 44 years later, has such a detailed recollection of those events as their evidence suggests. However, it is equally implausible that the three brothers would not have discussed the development potential of the three large lots, given what was shown on the Council plan and what John had been told by the town planner.

32. By about early August 1979, John had negotiated a price for the land of $525,000, which was acceptable to George and Tony. George instructed Allen Allen & Hemsley to act for the Mir group on the acquisition of the land. He also sought advice from Mr Wallace on how the purchase should be structured. There is no objective evidence that John had any dealings with Allen Allen & Hemsley or Mr Wallace in relation to the acquisition.

33. On 17 August 1979, Allen Allen & Hemsley wrote to the vendor’s solicitors asking them to prepare six contracts of sale “for stamp duty and other reasons”. It is apparent that the parties treated lots 112 and 113 as a single lot. The letter stated that “[a]t this stage the purchasing entity has not yet been decided upon and the name of the purchaser should be left blank”.

34. On 23 August 1979, Mr Wallace sent George a letter enclosing trust deeds for four proposed discretionary trusts – the HC Trust (the trustee of which was Mir Bros (Hollywood Creations) Pty Ltd), the P&T Trust (the trustees of which were Mir Bros Projects Pty Ltd and Mr Bros Trading Co Pty Ltd), the HR&I Trust (the trustees of which were Mir Bros Highrise Apartments Pty Ltd and Mir Bros Industries Pty Ltd) and the P&C Trust. The trustees of the first three trusts acquired as trustees for their respective trusts lots 110, 111 and 112/113 respectively. The fourth trust was not used.

35. On 27 August 1979, Mr Wallace sent George a trust deed for the J&M Trust. The trust deeds for that trust and the HC Trust, the P&T Trust and the HR&I Trust were executed on that day. Contracts for the purchase of the land were exchanged on 4 September 1979 and settled on 30 November 1979. At the time of settlement, the HC Trust paid $90,470.30, the P&T Trust and the HR&I Trust each paid $135,705.45, the J&M Trust paid $78,709.20 and John and Marie personally paid $34,378.72. The balance sheet for each of the four trusts as at 30 June 1980 indicate that the four trusts borrowed the purchase price for which they were liable from the “Mir Group of Companies”. John and Marie lodged a partnership return in respect of the Blairmount land they bought in a personal capacity, which attached a balance sheet of the partnership that showed that they also borrowed their share of the purchase price from the “Mir Group of Companies”. The cheque butts for the various cheques drawn on the Mir Group bank account simply show the trust for which the cheque was drawn, including the J&M Trust. However, the butt for the cheque drawn for John and Marie recorded “Bank Cheque Pur of land at Campbelltown charged against John Mir Personal loans for beneficial ownership Part of lots 4, 5 & 6”.

36. In about July 1980, John and Marie signed a trust resolution dated 29 November 1979 (the day before settlement) which attached as Annexure A the plan showing the areas zoned residential and the areas expected to be zoned residential. That annexure is Annexure E to this judgment. The resolution was prepared by Mr Wallace on instructions from George and it was George who provided Mr Wallace with a copy of the plan to annex to the resolution. The resolution relevantly recorded:

RESOLVED that the J & M Trust acquire from A.S.L. Developments for the sum of $87,000 all that area of land shaded pink (zoned 2 (b) residential ‘B’), blue (zoned 3 (c) neighourhood [sic] business), yellow (identified as drainage reserve), green (zoned 6 (a) open space (local)) but excluding all unshaded areas in the attached plan …

…

FURTHER RESOLVED that such land be registered in the names of John and Marie Mir on behalf of The J & M Trust.

It was noted that the remaining land in the lots referred to above presently zoned scenic protection and not described above as land being owned by The J & M Trust, is owned beneficially by John and Marie Mir.

37. Taking these facts together, in my opinion it is more likely than not that the J&M Trust land was acquired for the Mir Group and not for the benefit of John and Marie personally. It is not plausible that John became interested in the land primarily for the purpose of building his home on it. All the objective evidence suggests that up until shortly before 27 August 1979, John was interested in acquiring the land for its development potential. The land was advertised in that way and the analysis that John undertook of each parcel of land shown on the brochure sent to him by the agent suggests that he was looking at the parcels for their development potential. It is not plausible that the town planner who John saw simply volunteered information about the development potential of the three large lots. Rather, he is likely to have done so in response to questions asked by John; and John would only have asked those questions if he was focussed on the land’s development potential. The likelihood is that John also discussed the development potential of the three large lots with his brothers prior to or when they inspected the land and that the intention at that stage was that the Mir Group would acquire the three large lots because of their development potential. Having raised the subject with the planner, it is implausible that John would not have discussed it with his brothers, particularly when he gave them a copy of the Council’s plan. It is equally implausible that at that time John would have contemplated developing the land except in conjunction with his brothers.

38. I accept the defendants’ submission that the most likely explanation for the establishment of the P&C Trust was to acquire the three large lots. Although the development lots consisted of four lots, lots 112 and 113 were always treated as one. Importantly, a single contract was prepared for those two lots and a single price was allocated to the purchase of them. Consequently, only three trusts were necessary to acquire the development land. There is no other plausible explanation for the fourth trust except that it was originally established to acquire the remaining land and was abandoned because of a change in plans in relation to that land. That change of plans led to the establishment of the J&M Trust and involved John and Marie acquiring part of the three large lots for their family home.

37. The acquisition of the three large lots was structured in a way that permitted John and Marie to acquire that part of the three large lots that could not be developed for their family home but at the same time carved out of the three large lots that part of the land that could be developed. The only practical way of achieving that result was to have John and Marie acquire the three large lots but hold the developable portion on trust for the three families, which is what happened. Contrary to John’s evidence, the land could not have been acquired by the John Mir Family Trust, since it was proposed that John and Marie, not the trustee of that trust, would be the owner of the land. The arrangements for the establishment of the J&M Trust were handled by George, not by John, as might have been expected (and as John claimed in his evidence) if he and Marie were acquiring the whole of the land for their personal benefit. If the intention from the start was that John and Marie would acquire the whole of the three large lots for their personal benefit, there is no reason why the J&M Trust deed would not have been prepared at the same time as the other trust deeds and there is no reason why it would have as its beneficiaries George and Tony and members of their families. Similarly, if the intention all along was for John and Marie to acquire the three large lots personally, it is to be expected that Allen Allen & Hemsley would have said in their letter dated 17 August 1979 to the vendor that the purchasers of the three large lots would be John and Marie. The purchase price for the land acquired by the J&M Trust was handled in the same way as the purchase price for the development lots. It was funded by loans from other companies in the Mir Group. There is nothing to suggest that John and Marie were to be personally responsible for the repayment of the J&M Trust loan, in contrast to the position in respect of the loan they obtained to acquire part of the land personally.

38. These conclusions are supported by subsequent events.

39. In September 1982, the Mir Group obtained registration of a new plan of subdivision the effect of which was to amalgamate large lot 103 with the development lots, which were then subdivided so as to create a large number of smaller individual residential lots on the bottom righthand side of the amalgamated lot (which were subsequently developed and can be seen on Annexure D), a number of medium sized residential lots, including lots 69, 71, 72 and 73 and a large residential lot numbered 74 (which includes the land on which John and Marie’s home was to be built). Lots 72 and 73 previously formed part of large lot 103. In the 1980s, eight villas were constructed on lots 71 and 72. They were retained by the Mir Group and until recently the rent received for them was treated as income of the group, even though lot 72 fell within land owned by John and Marie (as trustees for the J&M Trust).

40. In 1982, John, in the name of the Mir Group of Companies, submitted a plan of subdivision for residential lot 74 (referred to as stage 4). The plan involved subdividing land that formed part of the land owned by the J&M Trust into 81 new lots of which 76 would be residential lots. However, it included part of a public reserve that fell within one of the original development lots. It may be inferred that the inclusion of that land was necessary to obtain approval to the subdivision of the residential lots. That plan was approved by Council on 13 May 1982. At about the same time, Council also approved a plan (referred to as stage 5) to subdivide a part of lot 74 that had previously fallen within the original development lots to create 85 residential lots. In about 1983 or 1984, the Mir Group undertook work to extend Clydesdale Drive further into residential lot 74, on an area that was formerly part of lot 103, to the point where the road meets the stage 4 development. The extension ran in a westerly direction past the school towards John and Marie’s home. It provided a means of access to the stage 4 development directly from Badgally Road. It is reasonable to infer that the extension was built in anticipation that the stage 4 development would eventually occur.

41. Further work has been done in relation to the development of the Blairmount land, including the subdivision and sale of 31 residential lots that formerly formed part of lot 103 and consisted of lot 73 and a parcel of land bounded by lot 73 to the southeast, Badgally Road to the northeast and Clydesdale Drive to the northwest and southwest. Alterations have been made to the boundaries of lot 74 and part of it (outside of stage 4) has been transferred to the State for a school. As a result, a new deposited plan has been created which includes what was lot 74 as lot 2 in the new deposited plan. On 10 March 2016, Sam completed and submitted an application in the name of the Mir Group of Companies to modify the stage 4 development consent. He obtained a number of reports in support of that application. Most recently, Sam has worked on the creation of a master plan for the development of almost the whole of the Blairmount land, including John and Marie’s personal land. The details of that work are not important for present purposes. Two points, however, are important. First, up until 30 June 2020 all profits of the J&M Trust were shared equally between the three families. Initially, that was done by distributing the profits equally to George Mir Holdings Pty Ltd, John Mir Holdings Pty Ltd and Anthony Mir Holdings Pty Ltd. Since about the mid-2000s, the profit has been distributed to the trustee of the Sheraton Trust. Second, the evidence suggests that the expenses associated with developing the Blairmount land, including the development of lot 103 and the preparation of the master plan for the land have been borne by the group.

42. Any analysis of expenses is complicated by the fact that it is the practice of the group to allocate expenses in a tax effective manner, the fact that many expenses are accounted for through loan accounts, including loan accounts held by each of George, John and Tony, and the fact that not all the accounts are in evidence. However, it is apparent that up until 30 June 2020, the J&M Trust was treated like any other trust of the Mir Group. There is no suggestion that it opened its own bank accounts or operated separately from the group when George, John and Tony, and their families, stopped using the Mir Group bank account for personal expenses. Nor is there any accounting evidence to suggest that expenses of the J&M Trust were accounted for through John’s personal loan account.

43. Consistently with the fact that the J&M Trust was treated as an entity of the Mir Group, there is evidence that other Mir Group companies paid expenses that might properly be attributed to it. For example, on 29 June 1999 the Mir Group paid a Sydney Water Major Works Contribution in respect of the stage 4 development in the sum of $223,680.00. The amount of that contribution together with a contribution for the stage 5 development of $25,132.05 is shown as a non-current asset of the HR&I Trust, indicating that the costs of that contribution were attributed to that trust. Another example given by the defendants is the costs of the Clydesdale Drive extension, which were shared with the Department of Education (since the extension benefitted the school) and were allocated across the four Blairmount land trusts. A third example is the fact that it appears that the costs of obtaining various reports in 2016-17 and 2018-19 in relation to the master plan for the Blairmount land were paid by the Mir Group and none was treated as an expense of the J&M Trust.

44. Three principal points are evident from these facts. First, shortly after the Blairmount land was acquired, the Liverpool office commenced work on redeveloping the land, which included plans and some work on the land owned by the J&M Trust. Second, there was no clear distinction drawn between the development lots and the land owned by the J&M Trust both in terms of the plans for development and the costs of development. Third, the profits earned by the J&M Trust were shared equally between the three families. All those matters support the conclusion that the land held by the J&M Trust was regarded as Mir Group land.

45. John sought to answer each of the points made in the previous paragraph. He submitted that it was necessary to prepare the stage 4 plans and to obtain approval to them to enable stage 5, which concerned the development lots, to proceed. He also pointed out that after 40 or more years very little development has occurred on the J&M Trust land. The explanation for why stage 4 was necessary for stage 5 cannot be accepted. According to John, stage 4 was necessary because a drainage reserve had to be constructed into a riparian corridor in stage 4 before stage 5 could proceed. Even accepting that proposition, it does not explain why that necessitated approval to a substantial subdivision of the land owned by the J&M Trust. In my opinion, little turns on the fact that stage 4 has not yet been developed. The point is that almost immediately after the Blairmount land was acquired, John started work on the development of the land owned by the J&M Trust, which is quite contrary to what he said his intention was at the time. The fact that the subdivided land has not yet been developed or sold is consistent with the long-term nature of the investment.

46. John gave a complex and convoluted explanation for why a small part of lot 103 was developed. He says that it was logical because of the position of a pathway draining down to a drainage reserve and the position of that part of Clydesdale Drive that joined Badgally Road, which meant that that part of the land in original large lot 103 to the west of Badgally Road would be “isolated”. He also points out that there was a clear line between the developed land that originally fell within lot 103 and the subdivided land that fell within the development lots. But the first point, assuming it is correct, simply points to the fact that it was logical to develop the land falling within original large lot 103 and land falling within the development lots together. It does not explain why the land had to be developed. It is difficult to see what turns on the second point, since no distinction was drawn between the costs of developing the development lots and those that comprised part of original lot 103 or the profits earned from the development. In addition, John is unable to give a satisfactory explanation for why part of the reserve located in the development lots was included as part of the stage 4 development.

47. John is also unable to give a satisfactory explanation for why the HR&I Trust apparently paid the Sydney Water Major Works Contribution in respect of stage 4. Nor is he able to give a satisfactory explanation for why the J&M Trust apparently made no contribution to the development of the master plan, although it is the principal beneficiary of the development contemplated by that plan. John did suggest that the costs of extending Clydesdale Drive benefitted the development on the development lots because it provided another means of access to those lots. But even accepting that, it does not explain why the extension extended to stage 4. The only explanation can be that the intention at the time the extension was built was to develop stage 4 at some stage.

48. John gives evidence that he reached an agreement with his brothers that he would be happy to share with them equally the income from the villas erected on lot 72 on the basis that the income was used to pay all development costs and all past and future expenses for the J&M Trust land. He says that he also reached an agreement with them that he would share with them equally the profits from the sale of the 31 residential blocks created on lot 73 and the adjacent block on the basis that the profits were first used to pay all development costs and expenses incurred up to the time of the sale of all the land. Tony denies those agreements. There is no objective evidence that they were reached. There is no evidence that an attempt was made to separate out the development costs of the 31 residential blocks. John has now resiled from the agreement in relation to the income from the villas. In my opinion, his evidence of the agreements must be rejected. Like much of John’s evidence on this subject, it is a contrived explanation that seeks unsuccessfully to explain away a variety of facts which are inconsistent with his case.

49. One other point should be mentioned in relation to the Blairmount land, if only because it received so much attention in the case. One piece of evidence relied on by Leo in support of his cross-claim was a document created in 1999 setting out the history of the Blairmount land for the purpose of obtaining taxation advice from Stephen Doyle & Associates. The version of the document exhibited to Leo’s affidavit relevantly stated:

PROPERTY DESCRIPTION

Purchase Date:

September 1979

Land Area:

72 ha comprising several titles and variable zoning’s generally the scenic protection land is owned beneficially by J & M Mir whereas the residential land is clearly shown in pink on the IDO plan, is owned equally by the 3 families. John Mir has constructed his residence on the scenic protection land of Lot 103.

LAND DESCRIPTION

- Lot 103

Owner:   

J & M Trust

Land Area:

44.88 ha

52. It was part of Leo’s case that that document had been prepared by John (something John denies) and contains an important admission that supports Leo’s cross-claim.

53. In December 2022, John and Sam swore affidavits claiming that they had found in a file given to them by George a floppy disk which contained a different version of the document. Relevantly, that version was in the following terms:

PROPERTY DESCRIPTION

Purchase Date:

September 1979.

Land Area:

72 ha comprising several titles and zonings.

LAND DESCRIPTION

- Lot 103

Owner:   

Generally the scenic protection land is owned beneficially by J & M Mir whereas the residential land is clearly shown in pink on the IDO plan, is owned by John and Marie Mir as Trustees for the J & M Trust. John Mir has constructed his residence on the scenic protection land of Lot 103.

Land Area:

44.88 ha

54. It is Sam’s evidence that he prepared that version, although in cross-examination he said that it was typed by someone called Manooj. Following discovery of that version, John sought to demonstrate that Leo must have had a copy of the latter version at the time he prepared his affidavit and that the former version was created recently for the purposes of this litigation or, at least, that Leo’s affidavit was prepared by reference to the latter version, since his affidavit contained information (that John and Marie held part of the land on trust for the J&M Trust) that was only expressly stated in that version.

55. In my opinion, both those propositions must be rejected. There is no evidence that the version exhibited to Leo’s affidavit is a recent invention. The original was produced in Court and appears to be old. It was examined by a forensic expert, but no evidence was led from that expert that the document could not have been created in 1999. Moreover, there is little doubt that that version was sent by George to Mr Doyle in 1999.

56. As to John’s second proposition, that proposition is only said to go to Leo’s credit. However, there is no reason to think that Leo’s only source of information about the Blairmount land at the time he prepared his affidavit was the document he had at that time. It is quite plausible that he obtained other information from George before George’s death and, in particular that John and Marie held part of the land on trust for the J&M Trust. In any event, I am not prepared to conclude that Leo had the latter version of the document at the time he prepared his affidavit.

57. It remains unclear who the author of the version of the document that was sent to Mr Doyle was. The evidence is that John sent a version of the document to the Bankstown office under cover of a handwritten note. The likelihood is that that was the final version of the document, which George sent to Mr Doyle and that the version found on the floppy disk was an earlier draft prepared in the Liverpool office. There was no reason for George or Leo to amend the version provided to them. In any event, Leo no longer asserts that the version sent to Mr Doyle was prepared by John (his evidence that it was was rejected) and Leo, correctly in my opinion, now seeks to place little weight on the document. Nothing more needs to be said about it.

Events leading to these proceedings

58. Before turning to events in 2018 which culminated in these proceedings, it is necessary to say something about the acquisition by John of a property in Eagle Vale in 2006, which is relevant to the later events.

59. The Eagle Vale land is a long strip of land on the other side of Badgally Road from the Blairmount land. A copy of the master plan for the development of the Blairmount and Eagle Vale land showing the position of the Eagle Vale land to the north of Badgally Road is Annexure F (2314352, pdf) to this judgment.

60. On 18 April 2006, the Mir Group, through Mir Bros (Hollywood Creations) Pty Ltd and Regot Pty Ltd lodged a tender (signed by Sam) for the Eagle Vale land. That tender was successful. However, on 8 May 2006, Sam sent an email to the vendor’s solicitors asking for the purchaser to be amended to John Mir Holdings Pty Limited as trustee for the John Mir Property Trust, which is what happened.

61. George and Tony found out about that change at a family wedding sometime later. Understandably, they were very upset. However, according to evidence given by Sid, they agreed that John could keep the land after John explained that he “purchased the Eagle Vale property because he wanted open space near his residence”. Sid says that his father “accepted that explanation from his brother and he, he moved on”. Tony’s evidence was to similar effect. He said:

Q. Do you agree that you swore that you do not agree that the dispute concerning the land at Eagle Vale did not impact on the relationship between the families?

A. It didn’t impact on the relationship. There was a bit of a argument about why, why it happened, he explained it and we’ve forgotten it. That’s it.

62. Leo gave somewhat different evidence. He said this in cross-examination:

Q. The fact is, on your understanding, Tony was very upset with John. That’s an understatement, isn’t it? Your understanding is that Tony was absolutely furious about it?

A. My father and my Uncle Tony were very, very angry about what had happened. As I said, it was crossed over into disbelief. They were in shock almost about the circumstances. They just couldn’t believe it and that led to a subsequent meeting at our office in Bankstown regarding it.

Q. Tony said in your presence words which led you to believe that Tony had lost trust in your Uncle John, is that right?

A. I think so, yes, and my father as well.

Q. When you say, “My father as well,” George said words in your presence which led you to believe that George also had lost trust in your Uncle John as a result of this Eagle Vale affair, is that right?

A. They questioned it, yes.

…

Q. I’m not asking you whether they questioned the issue of trust, your understanding was that George had a loss of trust in your Uncle John, that was your understanding, as a result of this Eagle Vale issue?

A. Mr Leopold, I can’t speak for my father, per se, but they were very disillusioned about the whole process.

Q. I asked about your understanding, Mr Mir.

A. My understanding is they were disillusioned about the whole process and I believe that included some trust issues as well.

63. And later:

Q. Between 2006, 2007, when you understand the Eagle Vale land was acquired by John, and 2018, '19, '20, when you made your GIPA application [that is, an application under the Government Information (Public Access Act 2009 (NSW)] you understood that in that intervening period George and Tony had conveyed to you that they had accepted John's account on Eagle Vale and treated the matter as all settled and in the past? Had accepted his explanation?

A. Not at all.

Q. Well I suggest to you they did but you didn't?

A. My father was, was crushed by it and he, he, he never sort of recovered from that. For my part, as a son, working with him and seeing him at home, especially after my mother also contracted a, a terminal illness, those two, those two things really rocked him and he never really recovered from that.

64. Despite the events of 2006, until mid-2018, the Mir Group continued on much has it had done before. It appears that by about that time considerable hostility had arisen between Sam on the one hand and Leo and some of Tony’s children on the other.

65. George’s wife, Therese, died in June 2018. Shortly after her death Leo, following a telephone conversation he had had with Marie, sent her a text message in which he said, among other things, the following:

… I promise you that whatever you have been told about me by your husband and/or your son are pure lies said with what I believe to be evil, malicious intent.

You don't know anything about how your husband and son operate and what they have done to my father, which I will never forgive or allow to stand.

However, I reluctantly accept that you can or will never believe me, because of what you will then have to accept about what your husband and son really are.

Therefore, it is best that we never ever see or talk to each other ever again.

66. It is not clear from the evidence what prompted this message, although Leo accepted in cross-examination that the reference to what John and Sam had done to his father was a reference to “Eagle Vale”.

67. At about the same time (on or about 26 June 2018), Tony telephoned John and complained about John and Sam’s treatment of Jason and David in the Liverpool office. Several days later, Sid sent John an email drafted by Tony (Tony does not have an email account) in which Tony apologised for his “outburst”. The email is a long and emotional one in which Tony goes through some of the family history. It starts by saying:

I would like to apologise for my outburst the other day but it was important that I got it out of my system. It has been most distressing to say the least, even after we had our discussions, that nothing has changed in relation to the intolerable and unacceptable treatment of my sons, your nephews in this partnership. With the greatest respect to you as my brother, best friend and partner I can longer sit back and allow the disgraceful and unwarranted attack on my sons from you and your son who are in reality representatives of me in the Liverpool office.

It concludes in the following terms:

John, for the Group to continue and be successful, we have to change this toxic rivalry between the offices and that somehow my boys working in the Liverpool office they are allies for Bankstown. It is not only childish and unprofessional, your treatment of them is totally unfair and unjust. I have kept quiet for all these years hoping and wishing that you would take control or even temper your son's quest for power and fortune by railroading you and treating members of my family, his first cousins, with disdain and contempt. For Sam to say he HATES his cousins and fellow co- workers in the business and for you to state that my boys are actually "RIVALS" in the business and are "Jealous" is totally shameful and insulting. This paranoid, compulsive obsession that your son exhibits, my nephew, needs to be assessed professionally. We love him dearly, but unfortunately this unbridled anger and paranoia can no longer be ignored for his own sake and his families.

John, we are the founding partners and directors of the partnership. If we as bosses, fathers and uncles cannot or are unable or unwilling to show some leadership in dealing with these issues we do not have a bright future. However, if we are able to harmoniously work together as equal partners and cousins on future developments, the sky is the limit with the resources behind them. This can only happen through mutual respect for each other.

From your loving brother Tony

68. That email prompted an even lengthier email from Sam to Sid, which was sent on 4 July 2018. The tone and general tenor of the email can be obtained from the following extracts:

My argument with Jason was last night. Your father’s vicious attack on my father was last Thursday. My argument with Jason was a result of your father’s vicious attack last Thursday, and Leo’s outlandish claim earlier in the day yesterday that could have only emanated from one of your brothers. It is a vulgar and disgusting claim. Enough to give my father another heart attack.

…

As for my paranoia etc. no one can talk to your brother David without him going crazy. He screams at my dad all the time and screams at Jason all the time. All the secretaries leave because they can’t deal with him. Ask any of our secretaries what they think about David. He is rude and insubordinate. I’ll put you in touch with our last secretary, if you and your dad really want the unbiased truth about the office staff ask her. Ask her what she thinks of David and Jason and the way they treat me and dad. It actually made her cry on occasion. The sad thing is your dad has given them all this power, and dad and certainly I, have had no influence or control over them for the past 10 years. They don’t tell us when they are going on holidays. They don’t answer to anyone.

…

As for Jason, I have had to sit opposite him for 17 years and have him question my integrity, watch him sulk and give me the silent treatment. Enough is enough. I cannot take it anymore. It is irreparable. I cannot look at him anymore. My chest gets tight and I can’t breathe when I am around him.

…

As for Leo, he never ceases to disappoint. I keep trying to give him the benefit of the doubt. No more. This is just another opportunity for him to bring my family down a notch or two. The thing is, I really don’t give a shit what you guys do or don’t do, we are just fighting battles here everyday trying to look after our mutual interests. He always conveys sly remarks about you not being in the office. …

…

My dad I [sic] are very very unhappy. My dad deserves so much more. So does my mum. My parents want out. If your family has any decency whatsoever, you will work with us to create an amicable split as quickly as possible so we may hopefully someday start to build a family relationship again.

69. It is unclear what happened following that exchange of emails. At some stage, Jason started working from home permanently. There is no further correspondence between the families until late November 2018 (referred to below). None of the witnesses gave evidence of what happened over that period. The position appears to be that the business of the two offices carried on much as it had done before, with little contact between those working in the different offices.

70. On 29 November 2018, Sam sent an email to Sid and Leo attaching a “forthcoming offer I previously advised you of” to purchase a property at Jedda Road, Preston, which was owned by Mir Bros Unit Constructions Pty Ltd. The email asked the recipients “to advise [their] positions in relation to the offer”. Sam said in the email that both he and his father thought that it was a very good offer and that both were in favour of accepting it. Sid replied to that email on behalf of his father on 3 December 2018 saying:

We have discussed this and other issues with ourselves and with Uncle George’s family and based on the information supplied to date and the bigger issues confronting the Mir Group at the moment, we are not inclined to consider selling this property at this time.

It seems clear that the reference to “the bigger issues confronting the Mir Group” was a reference to the difficult relationship that existed between members of the three families that culminated in the emails sent in June and July.

71. The exchange of emails led to some discussions between John and Tony on a way forward. A meeting was arranged between representatives of the three families at Mr Mannion’s offices which John in a later email described as “a round table meeting with the Group’s Accountant for the purpose of Q & A session as to how the proposed Estate planning procedures can move forward”. It appears that at about that time Tony was giving instructions to his solicitor for the preparation of a will. In the course of giving those instructions, he says that he learned that John and Marie were the trustees of the J&M Trust, which meant that he could not dispose of any right to influence the control of that trust or of the land that it held in his will. Against that background, he arranged for Sid to send the following email on 6 February 2019 to John on his behalf:

After my valuable discussions with you recently and my commitment to resolve our issues amicably, I have attempted to engage George’s family as part of our longstanding partnership.

As a result of those discussions, we need to postpone tomorrow’s meeting as there are outstanding company/trustee issues (that have been brought to my attention) that need to be addressed before we can seriously move forward.

Those issues which need to be addressed are;

1) The Trustee of the J & M Trust has to be amended to our Mir Group entity

2) We need to formally resolve and document (as previously agreed) the ownership of the Blairmount land and surrounding lots

3) We wish to obtain copies of all the existing and new Mir Group Trust deeds which we believe you hold in safe keeping

4) Any meeting/transaction/interaction involving any Mir Group property is to be attended by at least one member of any two of the three Mir families.

72. John responded to that email on 11 February 2019. In relation to the first matter raised by Tony, John said:

Dear Tony, My Family Trust “The J & M Trust” was established in 1979 (that’s some 40 years ago), as my Family Trust and now you are demanding that you and others become Trustees of my Family Trust. Are you really serious.

In relation to the second matter, John said:

The Land ownership of the various parcels in Blairmount by the various entities are clearly defined in the certificates of title of which I am sure you are aware of [sic].

73. The email went on to complain about “the negative, hateful and resentful attitude you display towards me and my son Sam”. It made various criticisms of David and Jason. It also referred to an “unpleasant” telephone discussion with Tony in which he had called John a “sneak”. The email concluded:

Just ask yourself what legacy do you want to leave your family, Shoudn’t we deal with issue right now and secure our families’ future peace, contentment and happiness or else, can you contemplate the living hell that would erupt otherwise.

With every best wish and blessing

John

74. It was plain from the email that what John contemplated was splitting the assets of the group between the three families.

75. Two issues emerged in April and May 2019. One concerned access to a family vault at Rookwood Cemetery, which was resolved amicably. Another concerned the sale of a property at Wetherill Park which provoked a further exchange of acrimonious correspondence. The acrimony seems to have been exacerbated by John or Sam arranging for the agent who was appointed to sell the property to go to the Bankstown office to seek to persuade Tony and Leo to accept the offer and a misunderstanding of what Tony said to the agent. It appears that John regarded the sale as the first step in dividing the assets of the group and thought that the price that had been offered for the property was attractive, whereas Tony and George’s family thought that the price was inadequate. Some of the correspondence, particularly from John, adopted a more formal tone and was likely drafted by lawyers or with their assistance with the possibility of litigation in mind. For example, in a letter which John sent by email on 1 May 2019 to Sid and Leo but addressed to Tony and Rita (who, by then, acted for George under an enduring power of attorney), John said:

We understand your position in relation to the option agreement, but it seems that you have missed the bigger issue - we want to split the partnership because we can no longer effectively work with you. When you say: The time has come for you to recognise my status as an equal partner in the business and the days of you "railroading decision making processes for the Group” can no longer be ignored' it is clear that you are labouring under a misapprehension about our intentions. Regardless of what you might think we have always recognised you as an equal partner in the business but we now think it is best the partnership is split and we divide the assets three ways so each of us is free to do our own thing.

76. After setting out John’s account of the history of the differences between the three families since July 2018, which referred to Leo’s text message to Marie, the letter concluded:

However what this message further reinforces to me is the I am not able to deal with Leo. Leo is holding himself as being George's representative (despite not having a power of attorney) and I am not able to continue being in a business with someone who treats me and my family this way.

It is very clear that we need to split. As we have always done a split will be three equal ways.

Despite numerous attempts from us to meet to move forward, this has not occurred. This is why I have given a formal notice of a meeting of our partnership that you would have received earlier today.

Particularly, in light of the failure for each of us to agree on the recent sale of the Wetherill Park property, which in essence was the starting process for dividing the assets, we need to start a formal process of division of assets.

You, me and George are aging, and we need to take these steps while we can. We also need to do this quickly before any new government changes CGT laws that might change our tax benefits going forward.

The meeting proposed by John was at Mr Mannion’s office on 14 May 2019.

77. Tony (through Sid) responded to that letter on 10 May 2019 saying that the meeting requested by John was “not being considered as a formal meeting request because, as we understand, there is no entity by the names proposed”. Tony said, however, that he was prepared to have an informal without prejudice meeting at the time and place stated by John. He pointed out that Rita was away.

78. As a result of a miscommunication, Tony did not attend the meeting (he mistakenly believed that John was not prepared to attend an informal meeting). On 16 May 2019 John sent an email to Tony (addressed to Sid) and Rita in which he made it clear that the purpose of the meeting he had called was “the dissolution of our partnership and the method of dividing the assets of the partnership”. The email stated that he wished to call “one final time for a meeting of the partnership” for that purpose. He nominated 12.30 pm on 24 May 2019. Rita replied that she had only just got back and would need more time to consider John’s letter. She gave a substantive response on 23 May 2019, in which she denied that there was any partnership and rejected the suggestion that the meeting should be a formal one.

79. It appears that a meeting occurred on 24 May 2019 and that it was agreed at that meeting that Sam, Leo, Sid and Jason would meet to resolve the division of the assets of the Mir Group business. A number of meetings occurred. In that context, Leo said that he wanted to change the directorships of a number of the companies (so that he replaced George) and Sid said that he wanted to do a similar thing. That proposal was rejected by Sam on the basis that the primary focus should be “on splitting up the partnership in an orderly way” and that a change in directorship would only complicate the process. Also in that context, Sam was asked (by Jason) to provide a schedule of all the Group’s assets that he had prepared so far. In response to that request, on 14 June 2019, Sam sent Leo, Sid and Jason an email attaching “a list of the assts that we have complied that we think can be sold immediately”. The only part of the Blairmount land that was included on that list were the villas on lot 72. That issue was raised by Jason in an email dated 17 June 2019, who sought additional information about the Blairmount land. It was Sid and Jason’s position (shared by Leo) that Sam should supply “ALL current and future documentation/reports on Mir Bros land holdings”.

80. On 5 July 2019, at Rita’s request, resolutions were passed replacing George and Therese as directors of various Mir Group companies with Leo.

81. The failure to reach agreement on the Blairmount land proved to be a sticking point. Although on one view John had made his position on the Blairmount land clear in February 2019, it is apparent that it was only brought home to Sid, Jason and Leo in June 2019 that John regarded the land the subject of the J&M Trust as his and was not prepared to supply information in relation to it. As a result, the discussions broke down. These proceedings were commenced on 12 December 2019.

Was there a partnership?

82. John’s primary case is that the business conducted by the Mir Group was a business conducted by John, George and Tony in partnership. Originally, John’s case was that that partnership was established by an oral agreement reached between them in about 1957 at the suggestion of their mother. That case was all but abandoned in final submissions and, as finally put, John’s case was that at some time well before 2018 the three brothers by their conduct established a partnership which carried on the Mir Group business. The partnership is described as an “overarching” one because in some sense or another it sat above the various entities through which the Mir Group carried on business. Put in that way, the case raised the question of how it could be said that the partnership sat above the various entitles in the Mir Group and how that partnership could operate consistently with those entities. The plaintiffs never sought to address those questions directly. Instead, they pointed out that the relationship between George, John and Tony had many of the attributes of a partnership and they advanced a case by analogy to other cases in which it was said the Court had held that the use of corporate entities and trusts by persons in partnership is not inconsistent with the characterisation of their business relationship as a partnership. In the present case, it was said that the relationship between John, George and Tony 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”. Consistently with the analogous cases, John, George and Tony had chosen to carry on that business through the various entities that comprised the Mir Group.

83. The first case relied on by the plaintiffs is the decision of the Western Australian Court of Appeal in Palermo v Palermo [2015] WASCA 49. In that case, two brothers were involved in various business activities involving property development, share dealing, corporate consulting, farming and an accounting practice over a period of 35 years. As Newnes JA (with whom Buss and Mazza JJA agreed) observed (at [2]) the businesses “led to the creation of a complex and extensive network of companies and trusts commonly referred to in the litigation as the ‘Palermo group’ or the ‘group entities’”. The brothers fell out. Following correspondence between the parties’ solicitors in which the appellant’s solicitors asserted that there was a partnership between their client and his brother that “exists outside and beyond the companies through which the Businesses were, and are, conducted”, the respondent commenced proceedings seeking declarations to the effect that they were not partners in the businesses. The appellant filed a counterclaim seeking declarations to the effect that (to quote Newnes at [3]) “it was to be inferred from their conduct over the years that there was an agreement between them that the businesses were to be conducted on the basis that the appellant and the respondent would share equally in the overall after-tax profit”.

117. It follows that, if the issue had required determination, I would not have refused relief because John lacked clean hands.

118. Having regard to the conclusions I have reached, it is unnecessary to consider Sam’s application to bring proceedings in the name of Acclaim further.

The trusts

129. The plaintiffs seek two forms of relief in relation to the trusts. First, they seek the appointment of receivers to the assets of each of the trusts. Second, they seek dissolution of the trusts said to form part of the Mir Group on the basis that the purpose of the trusts is now at an end. In my opinion, there is no basis for granting either form of relief in this case.

130. The purpose of the appointment of a receiver to trust assets is to safe-guard those assets where they appear to be in jeopardy: JD Heydon and MJ Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths) at 563; Yunghanns v Candoora No 19 Pty Ltd (No 2) [2000] VSC 300; (2000) 35 ACSR 34 at [66] (Warren J); Re Equititrust Ltd [2011] QSC 353; (2011) 288 ALR 800 at [53] (Applegarth J); Middleton v Dodswell (1806) 13 Ves 266; 33 ER 294; Barkeley v Reay (1842) 2 Hare 308; 67 ER 127. As Warren J said in Yunghanns (at [64], citing an earlier edition of P Walton, Kerr & Hunter on Receivers and Administrators (21st ed, 2020, Sweet & Maxwell)):

The general legal principle is that if misconduct, waste, or improper disposition of assets can be shown, or if it appears that the trust property has been improperly managed, or is in danger of being lost or if it can be satisfactorily established that parties in a fiduciary position have been guilty of a breach of duty there is a sufficient foundation for the appointment of a receiver.

131. These principles have been extended to cases where the trust carries on a loss-making business which is eroding the value of the trust assets. Basecove Pty Ltd v Dolores Lavin Management Pty Ltd [2009] NSWSC 1315, a case relied on by the plaintiffs, is an example. In that case, the plaintiff, of which Ms Toppi was the principal, and the defendant, of which Ms Lavin was the principal, were the equal and only unit holders in a unit trust, the chief asset of which was a property in Darlinghurst that was purpose-designed for use as photographic studios. The second defendant, Luxe Studios Pty Ltd, was the trustee of the trust. Ms Toppi and Ms Lavin each held one of the two issued shares and were the directors of Luxe Studios. The property was occupied by the third defendant, Luxe Productions Pty Ltd, in which each of Ms Toppi and Ms Lavin held one of the two issued shares and of which each was also a director. The relationship between Ms Toppi and Ms Lavin broke down. The plaintiff sought, among other relief, an order that a receiver be appointed to the trust assets. Although Brereton J placed emphasis on the fact that the companies and trust were in the nature of a quasi-partnership where the relationship between the individuals involved in the business had broken down, critical to the decision to appoint receivers to the assets of the trust was the fact that “the entities, if they are not technically insolvent, are, on the evidence, apparently affected by a substantial deficiency of funds and are trading at losses, and one cannot have the slightest confidence that that is going to be reversed” (at [11]). Consequently, the appointment of a receiver was necessary to protect the remaining value in the trust property.

132. In the present case, there is no evidence that the trust assets are in jeopardy. It is not suggested that any of the corporate trustees are trading at a loss or that the trust assets are at risk for some other reason. The plaintiffs do suggest that some developments are not proceeding as they should because of the breakdown in the relationship between the parties. However, as I have explained, the evidence in support of that proposition is weak. Moreover, no attempt has been made to tie particular developments to particular trusts and to analyse the consequences for that trust of any delays in the development. There is no evidence that the value of the trust assets has been diminished.

133. As to the second form of relief, there is no basis for it. As Barrett J explained in Re Gayton [2001] NSWSC 473 at [29] (cited with approval in Baba v Sheehan [2019] NSWSC 1281 at [74] per Parker J):

Order 4 is framed upon some implicit assumption that the Court may, by order, dissolve a trust in the same way as it may, for example, dissolve a partnership (Partnership Act 1892, s35). Any such assumption is, of course, unwarranted. It is the duty of the Court to uphold and protect trusts, not to destroy them, although where the terms of the trust envisage, in certain circumstances, realisation of property, winding up of the trust's affairs and final payments to beneficiaries, the Court will, naturally enough, give effect to those "winding-up" provisions. There are no such provisions in the instrument governing the Crane Trust.

134. The same point was made by Brereton JA in ReAustec Wagga Wagga Pty Limited (in liquidation) [2018] NSWSC 1476, where his Honour said:

13 In the absence of provision in the trust instrument, a trust cannot be wound up in the same way as a company. A trust is not a legal entity, as a company is. There is no statutory right or power to wind up or terminate a trust, and generally speaking it is unconventional to speak of “winding up” a trust. Moreover, courts do not normally make declarations to resolve hypothetical issues, or in the absence of a contradictor. The application for an order or declaration that the trust be wound up or terminated misconceives the nature of a trust. Counsel was unable to identify any jurisdictional basis for such an order. Moreover, even the notion of a trust being “terminated” is somewhat misleading, as the absence of trust property does not necessarily relieve a trustee of responsibility in respect of antecedent breaches.

14 There are however circumstances in which a trust will come to an end. The “winding up” of a trust involves the performance of the trusts so as to result in their discharge, and thus the termination of the trust. It has been said that the “winding up” of a trust is “a mechanical process which has to be gone through as a matter of practicality in order to fulfil the aim of the deed, where the deed in itself is silent”, and that it is “really just another instance of the court in its implied powers applying a sort of cy pres scheme of management in order to fulfil the trust”; however, I do not think that any cy pres element is involved: the “winding up” of a trust involves no more and no less than the transfer of the trust property to those beneficially entitled under and in accordance with the trust instrument, which has the consequence that, there being no longer any trust property in the hands of the trustee, the trusts are extinguished. [footnotes omitted]

135. Broadly speaking, the trusts in this case fall into two categories. Many of the trusts are discretionary trusts which provide for the distribution of the income of the trusts to George, John, Tony, their respective wives and children and corporations nominated by those beneficiaries. In some cases, the beneficiaries include other members of the Mir family and charities. In some cases, the trustee is given power to make distributions of capital as well as income. The trustee is generally given a power to bring forward the vesting date of the trust, at which time the trustee is to hold the trust property for such of the children of George, John and Tony as may be alive at that time in the proportions determined by the trustee in its absolute discretion.

136. Some trusts are unit trusts. In those cases, the respective holding companies of George, John and Tony hold equal numbers of units in the trust, which entitle the unitholders to equal distributions of the income and capital of the trust. The unit trust deeds generally provide a mechanism for unitholders to sell their units after first giving the remaining unitholders a right to buy the units to be sold at a price nominated by the seller or a price determined by an independent and competent valuer appointed by the trustee. Many of the unit trust deeds also provide a mechanism by which a unitholder can redeem its units at a price reflecting the then current value of the units.

137. In the case of the unit trusts, the trust deeds provide mechanisms by which a unitholder can dispose of its units. There is no suggestion that John has sought to use those mechanisms to sell or to redeem the units held by his holding company, and no reason to think that the trustee would not comply with that mechanism if John sought to use it.

138. The only mechanism under the discretionary trust deeds for winding up the trusts is the mechanism of bringing forward the vesting date, with the result that generally speaking the trust assets are to be distributed to the children of George, John and Tony in such proportions as the trustee determines. As Parker J points out in Baba v Sheehan [2019] NSWSC 1281 at [76], the Court does have power under Part 54 of the Uniform Civil Procedure Rules 2005 (NSW) to order a trustee to take steps in the administration of a trust, including bringing the vesting date forward. However, it would only do so if the interests of the beneficiaries demanded it.

139. There is no basis for making such an order in this case. Some of the trusts include as their beneficiaries charities and Mir family members outside the immediate families of George, John and Tony. Those beneficiaries are not even represented in the proceedings. The effect of bringing forward the vesting date would, in the case of many of the trusts, mean that Tony and John and corporations nominated by them and by George would no longer be income beneficiaries of the trust. How that would be in their interests is not explained. Essentially in this case one group of beneficiaries (John and his family) want the vesting date brought forward because they want access to their share of the trust assets now. But that is not a basis for the Court requiring the trustee to exercise a right conferred by the trust deed. The fact that they seek that relief because their relationship with some of the other beneficiaries has broken down does not alter the position.

The partnerships

140. The partnerships or sub-partnerships that are said to form part of the Mir group fall into two categories. First, there are what are said to be partnerships between Mir Group companies. In each case, the partnership arises in circumstances where two or more Mir Group companies hold one or more properties but not as trustees. There appear to be three such partnerships still in existence. One is a partnership between Mir Bros Real Estate Pty Limited and Mir Bros Properties Pty Ltd, which developed and retains as an investment a block of 18 units in Georges Road, Wiley Park, NSW. The second is a partnership between West Side Investments Pty Ltd, Mir Bros Community Planning Pty Ltd, Mir Bros Rural & Urban Industries Pty Ltd, Mir Bros Residential Development Pty Ltd, and Mir Bros Unit Constructions Pty Ltd, which holds the property at Allingham Street, Condell Park. The third is a partnership between G M Amalgamated Investments (Dulwich Hill) Pty Ltd and J M Associated Investments (Dulwich Hill) Pty Ltd, which holds a property at St Helens Park. In each of these cases, there is no partnership agreement. However, there is in evidence tax returns lodged by the alleged partnerships and it seems to be common ground that they are partnerships. Certainly, Sid, in his affidavit evidence, proceeds on the basis that they are.

141. Second, there are partnerships where the partners were George, John and Tony or entities associated with them. These partnerships are identified in Annexure C. As is apparent from that annexure, George is said to have been a partner of many of those partnerships. There is no partnership agreement in respect of any of the alleged partnerships. It is the plaintiffs’ case that a partnership can be inferred from the co-ownership of investment properties, the equal sharing of profits and the fact that with one exception tax returns have been lodged for the alleged partnerships. The exception is a partnership said to have existed between Leo, Sam, Tony, Sid, David and Stephen Mir (one of Tony’s sons) which holds Unit 511, 3 Orchard Avenue Surfers Paradise, Queensland. George, Marie and Mary own unit 509 in the same development and George, John and Tony own unit 510. Partnership returns have been lodged in respect of those two properties. The income from unit 511 is paid to the Sheraton Trust. The property, therefore, is plainly regarded as part of the Mir Group business. I accept that, in those circumstances, the failure to lodge partnership returns in respect of that property is likely to have been an oversight.

142. I also accept that each entity identified in Annexure C was a partnership. Section 2 of the Partnership Act relevantly provides:

2   Rules for determining existence of partnership

(1)  In determining whether a partnership does or does not exist, regard shall be had to the following rules—

(1)    Joint tenancy, tenancy in common, joint property, or part ownership does not of itself create a partnership as to anything so held or owned, whether the tenants or owners do or do not share any profits made by the use thereof.

(2)   The sharing of gross returns does not of itself create a partnership, whether the persons sharing such returns have or have not a joint or common right or interest in any property from which or from the use of which the returns are derived.

(3)   The receipt by a person of a share of the profits of a business is prima facie evidence that the person is a partner in the business, …

143. In the present case, the ownership of the relevant properties could not be described simply as the ownership of property as tenants in common and the sharing of the gross returns of the properties. Rather, the properties were acquired as part of a business carried on by George, John and Tony and on the basis that they and their families would share the profits equally. It is true that the partners are often the wives of John and Tony (together with George) and it is also true the parties purported to create different partnerships in relation to different properties. However, there is nothing to prevent a partnership from coming into existence in relation to a single property; and the relationship between the owners of the properties must be understood in the context of the broader business. Although, as I have explained, that broader business cannot be characterised as a partnership, the nature of that business is relevant to the characterisation of the relationship between individuals who hold property that forms part of that broader business. The fact that the relevant individuals have lodged partnership tax returns is not conclusive. It does, however, support the view that they carry on business in partnership. In his affidavit evidence, Sid pointed to the fact that a number of Mir Group companies had lodged partnership tax returns as evidence that those companies were in partnership. None of the parties took issue with that evidence; and it is difficult to see why a different approach should apply to the returns lodged by the individuals (and in some cases companies controlled by George, John and Tony).

144. Relevantly, there are three bases on which a partnership may be dissolved. First, section 32(c) of the Partnership Act provides that subject to any agreement between the partners, a partnership is dissolved ”[i]f entered into for an undefined time, by any partner giving notice to the other or others of the partner’s intention to dissolve the partnership”. Second, s 33(1) of the Partnership Act provides “[s]ubject to any agreement between the partners, every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner”. Third, under s 35(f) of the Partnership Act, the Court may, on the application of a partner, order a dissolution of the partnership “[w]henever in any case circumstances have arisen, which, in the opinion of the Court, render it just and equitable that the partnership be dissolved”.

145. These provisions have no application to the three partnerships between Mir Group companies. The partners of those partnerships are the relevant companies. None of them has given notice of dissolution of the partnerships or made an application under s 35(f).

146. There is no suggestion that in the case of the other partnerships, the partners reached an agreement contrary to ss 32(c) or 33(1). Consequently, the partnerships of which George was a partner were dissolved as a result of his death. In other cases, the partnerships are clearly partnerships for undefined terms. Consequently, any partner can give notice of dissolution of the relevant partnership. There is a question whether John or entities associated with him have given notice of dissolution of the other partnerships. On 6 February 2023 (the day the hearing commenced) Dentons, John’s solicitors, sent an email to the other partners in the partnerships, and their solicitors stating:

Each of John Mir, John Mir Holdings, Samuel Mir, and Marie Mir hereby give notice to the Schedule 5 Partners [that is, the partners referred to in Schedule 5 of the 2FACLS] under s 32(c) of the Partnership Act 1892 (NSW) that each of John Mir, John Mir Holdings, Samuel Mir, and Marie Mir intends to dissolve all of the partnerships referred to in Schedule 5 in which he, she or it is a partner unless the Court grants the primary relief sought in the above proceedings … or, in the event the Court does not grant such relief, such relief is granted on appeal. Accordingly, this notice of dissolution is to be taken to be effective if the Court does not grant the primary relief sought in the above proceedings and all rights of appeal are either exhausted or the time for appeal expires.

147. This notice cannot ground relief in these proceedings, since, even if it is effective, it depends on a contingency that has not yet occurred.

The cross-claim

148. Leo’s primary claim in the cross-claim is that the Court should grant a declaration that the terms of the J&M Trust include the following:

(a)   the Trust Land will be held for the purposes of development of the Development Land, being the whole of the land shown in shading on the map that is annexed to the Further Amended Commercial List Cross-Claim Statement and marked “A”;

(b)   all decisions in relation to the development, sale and application of proceeds of all or any part of the Development Land (including the Trust Land and its development and sale) must be made by a majority decision of the individuals comprising the directors of the fourth to eighth cross defendants; and

(c)   any distribution or application of the proceeds of the sale of all or part of the Trust Land must be made in equal shares between:

i.   the estate of George Mir and the members of George Mir’s immediate family;

ii.   John Mir and the members of his immediate family; and

iii.   Anthony Mir and the members of his immediate family,

such that none of them will receive a greater share of the profits than any other family, where “immediate family” means the wives and children of the identified person.

The “Trust Land” is the land the subject of the J&M Trust. The fourth to eighth cross-defendants are the Mir Group companies which own the development lots (as defined earlier in this judgment).

149. In the alternative, Leo seeks a declaration to the effect that “the J&M Trust is one of the “Property Trusts” as that term is defined in the Second Further Amended Commercial List Statement”. “Property Trusts” is defined in that document as “each of the trusts listed in Schedule 3 to this Second Further Amended Commercial List Statement [that] was established by the Partnership based on professional advice for tax purposes in acquiring, holding or developing the properties to be acquired by the Partnership”. The “Partnership” is the over-arching partnership contended for by the plaintiffs. Leo also seeks a declaration to the effect that the J&M Trust should be treated in the same way as other Mir Group entities. In final oral submissions, Mr Elliott SC, who appeared for Leo, proposed that the Court should make orders the effect of which would be to require the plaintiffs to lodge a new subdivision of the Blairmount land to separate the land owned by John and Marie in their own capacities from land held on trust for the J&M Trust and to replace John and Marie as the trustees of that trust. Leo had sought in a further amended cross summons an order removing John and Marie as the trustees of the J&M Trust. However, it is clear that that order could not be made since they own the land over which the trust has been declared and part of that land is owned in a personal capacity.

149. It is apparent from the findings I have made that I accept that the J&M Trust is a Mir Group entity. The only questions remaining are whether the terms contended for by Leo are terms of the J&M Trust and what relief should be granted.

150. There is nothing in the way in which the J&M Trust was established which suggests that it was to be treated any differently from the other trusts established by the George, John and Tony to acquire property for the Mir Group. Leo submits that what makes it different is that the trustees are John and Marie rather than representatives from each of the three families. However, that was a necessary consequence of the fact that part of the same lots to be acquired by the trust were to be acquired by George and Marie personally for their family home. It does not establish that the parties to the trust deed intended the J&M Trust would operate differently from any of the other trusts. Moreover, the terms for which Leo contends are inconsistent with the terms of the trust deed. Like the other Mir Group trusts, the J&M Trust is a discretionary trust that has as its beneficiaries George, John and Tony and members of their immediate families.

151. As I have said, on the evidence before the Court, there is much to be said for the proposition that George, John and Tony, by their conduct and by instructions given to advisors, impliedly agreed that they would exercise their powers as trustees, directors or partners of Mir Group entities or would procure that members of their families who acted as trustees, directors or partners of Mir Group entities would exercise their powers to ensure that the profits of the group would be distributed equally between the three families. If there was such an agreement, questions arise concerning its status following George’s death and whether it had other terms and other parties (such as family members). However, no party advanced an argument in support of such an agreement. The only agreement advanced by the plaintiffs was a partnership agreement, which had the equal sharing of profits as one of its terms. 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, no finding or declaration can be made concerning the existence of such an agreement or its terms.

152. There are other difficulties with the relief claimed by Leo. The alternative declaration sought by him is premised on the existence of the partnership contended for by the plaintiffs. I have rejected the existence of that partnership. The relief foreshadowed in closing oral submissions was not claimed in the cross-summons and raises the question whether there would be any impediment to a new subdivision which divided the J&M Trust land from the land held personally by John and Marie. Understandably, the plaintiffs provided the Court with no submissions on that relief.

Conclusion and orders

154. The conclusions I have reached could not be regarded as a satisfactory resolution of the case. I have accepted the plaintiffs’ claim that the collection of companies, trusts and partnerships described as the Mir Group has over an extended period operated as a single business which was originally controlled by George, John and Tony and which in more recent times is increasingly controlled by their respective eldest sons (completely now, in Leo’s case). I have also accepted that the relationship between the three families has broken down to the extent that the business can no longer operate in the way it once did. However, I have concluded that no remedy is available to address that situation because of the structure under which the business operates. I have also accepted Leo’s case that the J&M Trust forms part of the Mir Group business, but have concluded that none of the remedies sought by Leo (at least before final oral submissions) are available either because those remedies involve treating that trust differently from other trusts that form part of the Mir Group when no agreement to that effect was reached or because the Court has made no findings concerning the rights and obligations of the parties in relation to the operation of the group as a whole. As things stand, the legal rights and obligations of the parties must depend on the facts and circumstances relevant to each particular company, trust and partnership.

155. To a large extent this situation has arisen because of the structure the three brothers put in place, which was driven by the tax benefits to be derived from that structure rather than the need to put in place a legal structure which would enable the business as a whole easily to be passed on to their children or wound up if (as has happened) it became evident that their children, for whatever reason, could not continue the business together. Having chosen the structure they did, the parties must live with its consequences. As Young J explained in Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 at 694-695:

Unfortunately, it very often happens in cases in this court that a person has arranged his affairs for commercial or fiscal reasons employing a particular structure, which with respect to creditors and the Government he expects to be recognized as no sham, but when it comes to a dispute with his former wife or former business associates it is not in his interests to maintain the structure and he pleads before this Court that one must not look at the structure at all but rather at the “realistic” or “practical” effect of what has happened. I do not find this sort of submission attractive. So long as the law permits people to erect structures which have meaningful legal consequences then if a person elects to erect such a structure he must take the consequences of such erection for better, for worse, for richer or poorer, in commercial sickness or commercial health.

156. To some extent, however, the situation has arisen because of the way in which the parties have chosen to present their respective cases. John’s focus has been on claims and remedies which would bring about a division of the assets of the group between the three families. Leo and for that matter the other defendants’ focus has been on obtaining what they regard as their fair share of the Blairmount development. The result has been findings that the J&M Trust did form part of the Mir Group business, but no findings concerning precisely what rights and obligations flow from that fact.

157. Leo sought at the end of the hearing to address the issue referred to in the previous paragraph by seeking orders that would involve the appointment in place of John and Marie of a corporate trustee of the J&M Trust that had a similar structure as other group companies. The effect of those orders would be to remove control of the J&M Trust from John (and Marie) and give it to Tony and Leo. I could not make those orders without at least giving the parties a further opportunity to make submissions and possibly lead evidence on whether those orders should be made. But if I were to do that, that raises the question whether there are other issues that ought to be resolved as part of these proceedings. Again, it is appropriate to give the parties an opportunity to make submissions on that matter.

158. Accordingly, the orders of the Court are:

1. Direct that the parties bring in short minutes of order that give effect to these reasons for judgment, that deal with the question of costs if costs can be agreed and that set out directions to be given by the Court in relation to the resolution of any outstanding questions to be determined in these proceedings;

2. If the parties cannot agree on the form of the orders and directions referred to in (1), direct that by 22 May 2023 each separately represented party serve on the others and provide to my Associate a form of orders and directions that they seek and a short outline of written submissions in support of those orders and directions;

3. Stand the matter over for directions at 9.15 am on 29 May 2023 or such other date as agreed with my Associate.

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Amendments

21 April 2023 - Annexures hyperlinked

Decision last updated: 21 April 2023