Sze Tu v Lowe

The appeal concerned disputes arising from a partnership, where partnership funds were allegedly mixed with a partner's personal moneys and used to purchase residential and investment properties. The primary legal issues before the Court of Appeal were whether the partnership had been dissolved and, if so, when, and the extent to which profits derived from properties acquired using partnership funds were held on constructive trust for the partnership. The court also considered the application of tracing principles, the onus of proof in mixed fund scenarios, and the availability of equitable remedies, including constructive trusts, in light of statutory provisions and potential defences.

The Court of Appeal, comprising Meagher, Barrett, and Gleeson JJA, allowed the appeals. The court declared that the partnership was dissolved on 1 July 1989. It further declared that 90% of any profits derived from the partnership properties after their acquisition, after just allowances, were held on constructive trust for the partnership. An inquiry was directed to determine the specific amounts to which the plaintiffs were entitled by way of an account of profits, taking into account any benefits obtained by the late Kut Sze Tu from his interests in the partnership properties. The first defendant was ordered to pay the plaintiffs 20% of the benefits found to be due from the inquiry. The court also dismissed proceedings against certain defendants.