Commissioner of State Revenue v Rojoda Pty Ltd [2019] HCATrans 213 (6 November 2019)

Last Updated: 6 November 2019

[2019] HCATrans 213

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Perth No P26 of 2019

B e t w e e n -

COMMISSIONER OF STATE REVENUE

Appellant

and

ROJODA PTY LTD

Respondent

BELL J
GAGELER J
KEANE J
NETTLE J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 6 NOVEMBER 2019, AT 2.15 PM

Copyright in the High Court of Australia
MR J.A. THOMSON, SC, Solicitor‑General for the State of Western Australia: May it please the Court, with MS E.C. SALSANO, I appear on behalf of the Commissioner, the appellant. (instructed by State Solicitor’s Office (WA))

MR B. DHARMANANDA, SC: May it please the Court, with MR S.K. GRIMLEY, I appear for the respondent. (instructed by Ernst & Young Law Pty Ltd)

BELL J: Yes. Perhaps before you sit down, Mr Dharmananda, can I raise with you this? As I understand it, you seek to rely on the proposed amended notice of contention. That notice, on a view, disavows the reasoning below and proceeds on a different basis.

MR DHARMANANDA: Yes.

BELL J: That includes, if one goes to ground 1, the reference to the express trusts in relation to Hay Street and Colin Street.

MR DHARMANANDA: Yes.

BELL J: What is the significance of the amendment of ground 1 in that respect?

MR DHARMANANDA: In that respect, the broad submission we make is that at all times all of the partnership lands were held on trust.

BELL J: Yes.

MR DHARMANANDA: The reference to the express trust is to say that either by operation of law with respect to the other land or, indeed, with respect to this land by reason of an express trust there was already a beneficial interest held in the partnership lands so that clause 3 of each of the 2013 deeds could not involve a declaration of a new trust creating a trust interest in the property already held on trust.

EDELMAN J: So it is effectively an alternative submission that even if you are wrong about your approach to partnership property there are express trusts in any event that pre‑existed the 2013 deeds?

MR DHARMANANDA: Exactly.

NETTLE J: And which contradict that they are property of the partnership?

MR DHARMANANDA: No, your Honour. The accepted position is that despite the fact that they were held in express trust, they were also treated as partnership property, and I think that is common ground with my learned friend.

NETTLE J: Well, what does it mean then to say that they are partnership property if in truth they are held upon express trusts, the beneficial interests under which are different to those which would obtain if they were in truth partnership property?

MR DHARMANANDA: The way we would put the point, your Honour, is that they are trust property obtained for the five partners and then that same property, on our submission always being trust property, becomes property subject of the partnership trust, if I can put it that way, that is to say that they are no longer able to be dealt with other than as partnership property, constrained, therefore, in what any beneficiary could do otherwise.

NETTLE J: Is this an argument that was put before the State Tribunal?

MR DHARMANANDA: I cannot tell, your Honour.

NETTLE J: Or the Court of Appeal?

MR DHARMANANDA: The existence of the express trust was ‑ ‑ ‑

NETTLE J: No, no, not the existence of the express trust - whether it was contended before the State Tribunal or the Court of Appeal that because these properties were held, as you now contend, upon express trusts there existed within them fixed specific beneficial interests different to those which would exist if they were truly partnership property of the ordinary kind.

MR DHARMANANDA: Your Honour, the proposition that was put before the Court of Appeal is the wider proposition, namely, all of the partnership lands were held beneficially before clause 3 came into force.

EDELMAN J: Yes, but what was put against you both before the Tribunal and before the Court of Appeal was that that is not a proper understanding of partnership property, and partnership property does not give the partners any specific interest in any asset of the partnership. You, as I understand it, did not have any alternative submission that even if the Commissioner is correct in that argument you should still win in relation to Hay Street and Colin Street, because those properties were held on express trust ‑ ‑ ‑

MR DHARMANANDA: That is correct. I think that is correct. I will check it, but I do not think the express trust separately point was put in that way.

EDELMAN J: That is the point that you want to rely upon now effectively as an alternative, is it?

MR DHARMANANDA: Well, we say it is part of the general point we make, that all partnership property, including this property, is held on trust so that the partners ‑ ‑ ‑

EDELMAN J: Yes, but if you are right about that, then the fact that it is an express trust or not is irrelevant.

MR DHARMANANDA: Does not matter, yes.

BELL J: So, what is the purpose of the amendment of ground 1 in the proposed amended notice of contention to the extent that it varies the original notice by the inclusion of express reference to the declarations in relation to Hay Street and Colin Street?

MR DHARMANANDA: So, the purpose, your Honour, is to make it clear as a matter of fact how the relevant beneficial entitlement arose. In the case of the partnership lands, other than the two properties with which we are concerned now, that relationship for which we contend arises by operation of law. In relation to those two properties, as a matter of fact, it arose because of the express trust.

BELL J: That is to the put the matter quite differently to the way the matter was put below and to the basis upon which the SAT and the Court of Appeal determined the matter.

MR DHARMANANDA: In our submission, no. If the underlying issue is analysed by reference to where does the beneficial interest lie, in our case either by operation of law or, in the case of these two properties by express trust, it arises. It is to make sure that the factual foundation upon which our case is put is proper, is clear.

BELL J: When you refer to the factual foundation the matter proceeded below, I think, on agreed facts and the agreed facts made reference to the express trusts in relation to Hay and Colin Streets at paragraph 11 in the appellant’s further materials at page 186. What is said there is that – referring to those deeds – they confirm that the properties “were purchased in the names of Anthony and Maria Scolaro on behalf of the partners” and that seems to be consistent with the way the Tribunal dealt with the matter at paragraph 61 where they recorded the Commissioner’s submissions. If one goes back, again, in the appellant’s further materials, to the reasons of the Commissioner at 166, it is said that:

the available information demonstrates that those properties were treated as SICP assets –

That seems to be a reference to material that it is not clear is before us – the matter having proceeded below on the basis of agreed facts. But there seems to be a suggestion of other documents bearing on the nature of the interests that were the subject of those express trusts.

MR DHARMANANDA: I do not know whether that is right, your Honour. But I think the point we would make is that at all times the existence of the express trusts was accepted and at all times the argument proceeded that either way – either by operation of law or by reason of that trust relationship – there was no duty payable with respect to anything that occurred under clause 3.

GAGELER J: Do you seek to get something out of the express trusts that you do not get out of operation of law?

MR DHARMANANDA: No, your Honour. As a matter of principle ‑ ‑ ‑

GAGELER J: So can we just delete those words?

MR DHARMANANDA: Save for the underlying factual matter, so long as the underlying basis on which our point sits. As a matter of – the proper fact is a trust had already been created with respect to those two properties. Now, we are not contending that by force of that alone no duty is payable in the sense that because it is also treated as partnership property, the arguments that separate me and my learned friend about what does that entail still arises to be dealt with.

EDELMAN J: In other words, if your arguments about the nature of partnership property as being in effect a trust are not accepted then there is no additional work to do legally by the amendments to ground 1?

MR DHARMANANDA: That is so, but our point is that as a matter of the factual foundation, the true position is it arises first under express trust.

NETTLE J: How does it change the agreed fact that both of these properties were partnership property?

MR DHARMANANDA: It does not for ‑ ‑ ‑

NETTLE J: In that case, why is it needed?

MR DHARMANANDA: Because it is needed so that the factual position is accurately ‑ ‑ ‑

NETTLE J: Well, the fact is, as is recorded in the SAT’s reasons, that these were partnership properties held by partnerships with the specified percentage interests there set out. What more is required?

MR DHARMANANDA: The fact that with respect to those two properties the starting point was they were express trusts.

NETTLE J: You keep on trying to claw back that there was a fixed specific interest in those properties which was not a proposition which, according to the SAT’s reasons, was advanced below, nor in the Court of Appeal’s judgment.

MR DHARMANANDA: In our submission, we are not seeking to do that. We are seeking to make the record clear as to how the relationship arose with respect to those two properties.

NETTLE J: But what does it matter how it arose if it is an agreed and found fact that they were partnership properties held by the partners with partnership interests as set out in the SAT’s reasons?

MR DHARMANANDA: As I have already submitted, nothing – we are not submitting that something separate flows from that. What we are submitting is that that matter ought to be treated as the factual position. It is not right for us to say by operation of law these things occurred because an express trust had already been created in respect of those two properties.

NETTLE J: Is not what you submitted to the SAT that by operation of law upon dissolution you acquired a fixed specific interest by analogy with the Privy Council’s reasoning in Cameron?

MR DHARMANANDA: That is what was submitted before the SAT, yes.

NETTLE J: Now you want to say something different?

MR DHARMANANDA: No, we are not saying something different. We say that factual foundation assists – engages to reach the same conclusion, that is to say, our contention – the first part of our contention does not actually rely on Cameron v Murdoch reasoning, it actually starts from a different point, namely, that when you have a partnership, the property of the partnership, all of it, there is an interest held by each and every partner.

BELL J: Let it be supposed that that first branch of your argument does not find favour, do you then have an argument based on the fact of the express trusts in relation to Hay and Colin Street?

MR DHARMANANDA: In our submission, no, we do not.

BELL J: Yes. Can I come back to the question, I think it might have been that Justice Gageler asked you, what function is served by the amendment to ground 1?

MR DHARMANANDA: Your Honour, save the point we make is simply to make the position as to how the relevant relationship arises clear. However, I am not making an argument that if we are wrong about our primary point then the express trust position somehow makes our position better.

BELL J: All right. Yes, thank you, Mr Dharmananda. Mr Solicitor, what is your position in relation to the proposed amended notice of contention?

MR THOMSON: We do not have any objection to it, on the understanding that I think has been articulated, that is that the express trust allegation does not add to the argument. As we understand it, the significant difference is this. What was submitted before the SAT and the Court of Appeal was that at the point of dissolution that had a material operative effect upon the rights and interests of the partners. However, the new argument that is put here is that the point of dissolution did not have any effect, it arises at the time that the partnership is constituted or the property is acquired, and for that reason the addition of the words “by operation of law and by express trust” identifies at the time when the partnership property is acquired, so it is a quite different argument, it is a temporal thing, and so it is just identifying the fact that these properties were acquired and held initially on the express trust but then treated as partnership property.

I should add that not only the facts that your Honours have mentioned show that, but it is what is said in recital C of the SICP partnership deed, that these properties were held jointly as joint trustees for the partnership and they refer to Colin Street and Hay Street in the same way.

BELL J: Yes, thank you, Mr Solicitor. Mr Dharmananda, we are inclined to grant you leave to rely on the amended notice of contention, but with the omission of the additional words in ground 1.

MR DHARMANANDA: May it please the Court.

BELL J: Yes, very well. Yes, thank you, Mr Solicitor.

MR THOMSON: Can I just make clear that when we did not object to the notice of contention we do have an argument, which if it is accepted, that the conversion agreement point is a new point and should not be allowed, but we will deal with that in - it cannot be answered now, but we will deal with that in our primary submissions, if that is convenient.

BELL J: Yes, thank you.

MR THOMSON: Your Honours, this appeal raises a question about the nature of the interest conferred by equity upon former partners with respect to partnership assets after a dissolution and before any winding‑up has occurred. The question arises in a particular context, that is, where the partnership assets largely consist of interests in land and the current assets of the partnership are sufficient to discharge all of the partnership liabilities if the partner so chose. But I should immediately say that the context of this case does not include any actual agreement by the partners to discharge all of the partnership liabilities out of current assets.

Now, in that particular context, the question which arises concerns whether former partners or the personal representatives of their estates have anything more than a fractional interest in a surplus of assets over liabilities on a winding‑up rather than any interest in the specific land assets. In most contexts, the answer to this question is well settled, in our submission. In Henschke’s Case that concerned the nature of a partner’s interest after a dissolution and before any winding‑up had occurred, and this Court approved the comments of Justice Windeyer in Bolton’s Case that the right of partners is:

generally regarded as equitable and is “a fractional interest in a surplus of assets over liabilities on a winding up and in the future profits of the partnership business”.

GAGELER J: Does it matter to your argument that it is after dissolution? Is it any different while the partnership is in existence?

MR THOMSON: No, our position is that the interest that partners have before and after dissolution but before a winding‑up is the same. In that respect, we are equivalent to what the respondent says, but we say that the nature of those interests are different and they do not have any specific or fixed interest, whereas the respondent says that at all times, both prior to and after dissolution, there are fixed and specific interests in the particular context of the case.

GAGELER J: So dissolution makes a difference?

MR THOMSON: No.

GAGELER J: No. All right.

NETTLE J: Winding‑up makes a difference in that once all the money has got in and applied to the liabilities then everyone has an entitlement to a fixed share of what is left.

MR THOMSON: Yes, that is precisely right. So, as I was saying, we think that it is well settled, in most contexts at least, that the position is as I have mentioned based on Bolton’s Case and in Canny Gabriel v Volume Sales where it was held that:

a partner’s interest in the partnership property . . . is not a title to specific property but a right to his proportion of the surplus after the realization of assets and the payment of debts and liabilities.

In Canny Gabriel the Court was prepared to accept that a partner has an interest in every asset of the partnership and that case was approved in Henschke. In this appeal, in effect, the Commissioner says that the interests of former partners or representatives of their estates after a dissolution prior to winding‑up is simply an interest which is the same as the one that I have just mentioned.

We also say that the Court has recognised that where it is necessary to do justice equity will bring into existence an inchoate proprietary right ‑ that is a right that might be transmitted by will and it is a right that might be used in a priority competition between competing equitable interests, and that is recognised in Hendry’s Case, in Haque’s Case in relation to the transmission by will, and it was accepted in Canny Gabriel and Henschke in relation to the competing equitable priorities.

The Court of Appeal answers the question that we have posed at the outset differently and the answer that the Court of Appeal gave is set out in paragraph 4 of our oral outline of submissions. It is based on paragraph 27 of the Court of Appeal’s reasoning in the judgment of President Buss and Justice Beech who say:

if, and when, the surplus of partnership assets after payment of debts and discharge of other liabilities has been sufficiently ascertained and provided for –

from other available assets “each partner will”, at least ordinarily, thereupon “have a specific and fixed [beneficial] interest” in the remaining “assets comprising the surplus”.

Now, that represents an exception which is based upon something happening after the point of dissolution which is what they have described as “sufficient ascertainment”.

EDELMAN J: Well, one would usually expect sufficient ascertainment to have occurred at the point of the completion of winding‑up.

MR THOMSON: Certainly, that is right, but they say that in a particular context if sufficient ascertainment occurs prior to then, even though the winding‑up has not happened, that what occurs is that there can then be recognised from that point on by equity bringing into existence a fixed and specific right, and we say that there is no cause for equity to do that. We also say that the effect of that is, in substance, to limit the trustee’s right of indemnity to particular assets without there being any agreement that it should be so.

EDELMAN J: Presumably you say that assets are either ascertained or they are not.

MR THOMSON: Exactly. So that is one form of exception, and that was the form of exception that has been proposed by the Court of Appeal, and they found some support for that in the decision of Cameron v Murdoch in the Privy Council, approving the decision of Justice Brinsden at first instance.

NETTLE J: There is none, is there?

MR THOMSON: We would say none at all, and we can take the Court through that case in great detail to establish that, we would say. Certainly, we can say right up front that the case did not squarely grapple with that proposition – that is, Cameron v Murdoch did not.

Perhaps in recognition of some of the difficulties that the exception formulated by the Court of Appeal has with it, the respondent has developed a different exception, if you like, which is based on perhaps what we would call the perspective argument, that is a difference between internal and external perspectives of a partnership.

As we understand their proposition now from ground 1 of the notice of contention it is that before the dissolution of the partnership and, in fact, from the time of acquisition of the partnership property by operation of law or if it is acquired on an express trust the legal owner of partnership property holds this upon trust for the respective partners who together own the whole equitable estate in the trust property as beneficiaries subject only to the trustees’ right of indemnity and any subsequent dissolution does not alter the beneficiary in interests of the former partners of the partnership property, including in partnership land. So, they say there is this fixed and specific equitable interest right from the acquisition of the property as partnership property.

Our submission is that that is inconsistent with the law that has been stated by this Court. It is inconsistent with the legal principle that equity will only recognise fixed and specific interests when it is necessary to do so to give effect to its doctrines. It is actually inconsistent with the whole concept of what a partnership is about because a partnership is the conduct of a business and that is why the sui generis nature of a partner’s interest in partnership property has developed because it facilitates the ongoing concern as a business concern of the partnership.

So, we say there are some conceptual difficulties with the answer which is proposed by the respondent in this case. It is not an answer that is limited by the context of this being a solvent partnership where the current assets could pay out all of the liabilities. It is a much greater and more general principle of partnership law which is now proposed by the respondent.

BELL J: It seemed to me that one aspect of the respondent’s argument is to accept that in relation to land where the partnership property is vested in the legal ownership of one or more partners – as was the case here – and it is understood, notwithstanding, for example, that Anthony and Maria had a joint estate in relation to all the land that was partnership property, but equity presumed that that was held on trust for all the partners as tenants in common - now, as I understand the real thrust of the respondent’s argument it is to say if one accepts that is so, wherein lies the power for Maria to declare a trust in the terms of clause 3 as distinct from confirming the position at law?

MR THOMSON: Yes, that is quite right. That point about the declaration of trust really is a consequence of the theory of partnership interests that is espoused by the respondent. It is not part of it because, in effect, they say because the whole beneficial interest was vested in the partners and not in the owner of the legal estate that there was no capacity of the owner of the legal estate to declare any trust.

Now, that goes to the fundamental nature of what a trust is. A trust, in a true sense, is the undertaking of an obligation by the trustee to deal with property as the freehold property of somebody else – I am talking about land. That is illustrated by what was said by Justice Hope in the New South Wales Court of Appeal in DKLR Holding. It is also, I think, what underpins the comment in Breckler’s Case – we have put Breckler in the list of authorities.

But, there are different types of equitable obligations that can be undertaken. They may not be full obligations to deal with it wholly as if the land is the property of somebody else as if they were the freehold owner and that is trite law because there are different types of equitable obligations such as those which adhere to a discretionary trust or a unit trust. In fact, we say that that was what this Court was driving at – I think in paragraph 25 of Henschke’s Case – when they said that it was not right to use the term “beneficial interest” when discussing the nature of a partner’s interest in partnership property and they analogised that to discretionary trusts and unit trusts.

So if the nature of a trust obligation is understood as simply the undertaking in equity of certain obligations to various people, the legal estate owner can always do something in that respect, and so the fallacy that underpins, in effect, what the respondent is saying is that they see a division of full beneficial and equitable title at all points in time and then say, well, because of that and because from the external perspective the equitable estate is fully vested in the owners - sorry, in the partners, the legal owner of the property cannot do anything at all.

We say that is not right, you just have to look at the nature of the equitable obligation to determine whether there has in fact been a full division of the equitable estate, and that has echoes of what was said by Justice Aickin in DKLR Holdings (No 2) and Viscount Radcliffe in the Privy Council in Livingston’s Case.

EDELMAN J: If I can put the point in maybe a slightly different way, suppose Maria had declared trusts in favour of different persons other than the partners, you accept, do you, that the beneficiaries of those declared fixed trusts would hold any rights that they had subject to the, however you might characterise it, interests of the partners in equity?

MR THOMSON: I think that is right. Can I put it back to your Honour in just a slightly different way and that is to say that the former partners and the representatives of their legal estates were all signatories to the 2013 deeds, so that you had everyone who had any interest at all party to those deeds and they could resettle the interests in any way they liked. So it is not simply a case of Maria acting unilaterally, she is acting with the consent of everyone who might be effected by her pre‑existing equitable obligations.

So our point is effectively this, that there was a resettlement of the equitable obligations with the consent of everyone to whom those obligations were previously owed by the 2013 deeds and that resettlement of obligations altered the equitable obligations from something that was in the nature of a right of due administration against Maria to administer the assets in accordance with the partnership deeds to achieve a winding‑up to make her the express trustee as a bare trustee in favour of all of those people, and that is what attracts duty.

BELL J: That is your answer to the suggestion in paragraph 36 of the respondent’s submissions, in essence, querying the capacity of Maria as the legal owner to declare the trust? All the partners, all the successors entitled to the former partners were a party to the deed.

MR THOMSON: Precisely.

BELL J: Yes.

MR THOMSON: In a sense, I have very quickly outlined the fundamental nature of the case, but it may be that it would be helpful for your Honours if I can first outline the factual basis for the appeal then address what was decided by this Court in Henschke in some detail, because we think that Henschke actually governs this situation and that as a matter of principle your Honours would have to overrule what was held in Henschke in order to achieve a different outcome. Then can I address what the Court of Appeal had to say, and the fact that it does not derive support from Cameron v Murdoch, and then can I address the thing that we have described as the perspective argument?

BELL J: Yes, thank you.

MR THOMSON: Before I do that, can I just mention that there is also an argument in the notice of contention about conversion and a conversion agreement being inferred or implied out of the terms of the 2013 deeds. We say that that is not a ground that is open to now be raised because that is a new argument and, in effect, what it is saying is that there is a new dutiable transaction which was never put forward as a dutiable transaction previously and therefore it cannot now be raised as, in effect, saying, well, duty should have been charged in a different way that we never said previously and you cannot charge duty in this way. I will deal with that ‑ ‑ ‑

EDELMAN J: Is this to bring it within section 78?

MR THOMSON: No, no, this is a separate argument. In respect of section 78, the way the argument has now developed, as we apprehend it from the respondent, is this. They say that if the conversion argument – sorry, if the perspective argument or the conversion argument succeed, then section 78 operates but, clearly, if those two arguments succeed then you do not need section 78. Equally they do not say that section 78 has any independent operation. So we think that the arguments about section 78 effectively fall away depending upon the correctness or otherwise of the perspective argument or the conversion argument. If I am wrong about that I will say something about that in reply, if I might.

In terms of the factual matters, your Honours have seen that we have annexed to our submissions a diagram which depicts the three generations of the Scolaro family who are involved, and we have put the dates of death for the two main protagonists who have been involved in this. Anthony died on 12 February 2011. Because he was a partner of both partnerships, that led to the dissolution of both partnerships.

The dissolution followed after a period because of the terms of the partnership deeds which provided for the possibility of a right of pre‑emption being exercised and perhaps promoting therefore a technical dissolution as opposed to a general dissolution, which would then be followed by winding‑up. It was agreed that there was no exercise of the rights of pre‑emption and therefore, as Justice Murphy identified, this was in effect a general dissolution to be followed by a winding‑up.

I am not sure that I need to take your Honours to the particular terms of the partnership agreement. Can I just say that Justice Murphy has extracted the relevant terms of the partnership agreement in the Court of Appeal judgment to be found at pages 93 to 94 of the core appeal book.

Can I deal with two factual matters that might cause the Court some concern, just to dispose of them as distractions, if you like? If I can take you to the SICP 2013 deed, which is at page 93 and following of the further materials. You will see in recital B on page 96 that it records that in relation to the SICP partnership that Anthony and Maria held their 40 per cent interest “as trustees for the A. & M.M.R. Scolaro Partnership”.

Now, that aspect of the case is probably neither here nor there, but before the Tribunal it was agreed between the parties that there was no evidence that supported that they held their interest as trustees for the A & MMR partnership and if you look at the agreed facts at paragraphs 4 to 5, there is no suggestion that they own their 20 per cent interest as trustees for the A & MMR partnership. We have discussed this with our friends and I think that they are happy for us to provide to you the relevant transcript if the Court wants it. We think it is an agreed position. I am not sure that you need it.

BELL J: It is an agreed position?

MR DHARMANANDA: It is an agreed position.

BELL J: We do not need it, thank you.

MR THOMSON: Thank you. I do not think it makes any difference at all in any event. The second matter is the one about Hay Street and Colin Street. Your Honours have heard about that and I think that your Honours understand that position quite well.

EDELMAN J: Do you accept - I realise that this has not been a point that has been argued at any stage, but do you accept that if there were properties that were held from the outset on trusts, that they would not be dutiable by a subsequent declaration of trust in the same terms?

MR THOMSON: For the purposes of this case only we do accept that because there is a question about whether that is truly a declaration of trust for the purposes of the Duties Act, and the case has been conducted upon that basis, that there has to in fact be a change in the beneficial entitlements for there to be duty as a declaration of trust. There is perhaps a separate question about whether or not the Duties Act could apply to a new declaration of trust, in substitution for an existing declaration of trust which is precisely the same.

Now, that question has not really been gone into because of the way this has arisen in the present case, and we say that the question actually does not arise if we happen to be right because as we understand it it is accepted that although there is a declaration of trust, it was a declaration of trust with the gloss upon it that the trust was a trust of the nature of a partnership property trust, and that is what is said in recital C and that is how I understood my friend to be putting it just a few minutes ago, so we do not think it is a declaration of trust in the true sense. We understand it to be accepted, and it was the agreed fact as well, that these properties were held on a trust which was to be used for part ‑ ‑ ‑

EDELMAN J: It is their character as partnership property that has always been important for this litigation.

MR THOMSON: That is right.

NETTLE J: Thus, even though they might have been held on fixed specific trust in the case of Hay Street and Colin Street, because of the agreement between the partners that they would be treated as partnership assets, those fixed specific interests were changed into the sui generis interests of partners.

MR THOMSON: That is precisely how we have understood it. It is just that they arose separately from an express trust, as opposed to just simply being acquired as partnership property in the first place. Your Honours will have seen in the papers that following the general dissolutions there was by reasons of rights of survivorship a transfer of the legal estates in the various partnership properties - land, real estate properties to Maria by herself in September 2011, and your Honours will have also seen that by reason of the death of John Scolaro, as an intestacy, his estate was divided one‑third to his wife and one‑sixth to each of his four children.

Can I then take your Honours to the 2013 deeds – they are found at page 93 and following – and just make certain points about those deeds and how they operate. I will come back to how they should be construed when I come to the conversion agreement, but it may be helpful for me just to run through the operation. Perhaps if I can use the SICP deed at pages 93 and following as the exemplar. It is a little bit more complicated than the deed for the Anthony and Maria partnership because that was only between two people.

The deed was executed on 1 December 2013 and that was after the general dissolution points but there had been no winding‑up of the partnerships. So it was executed in that context. There are some fairly extensive recitals which recite how the position has been reached that the deeds need to be executed. Clearly the intention of the deeds is to bring to a point where the relevant proportions in which the partners held the real estate assets is divided between the former partners and their estates according to those percentages that they may be entitled to it because of the former partnership interests and the entitlements they have under each estate.

The recitals set out in some detail how the various entitlements arise, but in broad terms it is as I have said, and then there are a very minor number of operative provisions. If you go to the operative provisions on page 100, clause 1 starts by saying that:

The parties acknowledge and agree –

certain matters and, importantly, in paragraph 1c it says that the parties acknowledge and agree that there was a dissolution on 15 March 2012, prior to the execution of this deed, and then it says that there is an acknowledgement and agreement that:

On dissolution of the Partnership, the Properties and other assets that were previously held by the Partnership were beneficially owned -

as set out there. Now, what that does not expressly say is that there was any agreement to convert property at that point in time. We would understand that to be an acknowledgement and an agreement of a legal fact which may or may not be correct, which is in fact what this case is all about.

Then you see that in paragraph 2 and in paragraph 3, as it is first numbered, there is what is an attempt to transmit property from the representatives of former partners to the beneficiaries under the estates. Then in paragraph 3 as it is second numbered that there is then a confirmation that Maria Scolaro holds as trustee the properties for each of those people who would benefit under the former partners’ estates. Then in paragraph 4 there is provision for the respondent in this case to be substituted for Maria.

The question is whether, by the obligation which is contained in paragraph 3, which everyone accepts, as we understand, created – sorry, following the execution of this deed everyone accepts that there was a bare trust of the properties. The question is whether paragraph 3 brought into existence that bare trust or whether it pre‑existed clause 3. It is the same sort of operation in relation to the A & MMR partnership deed.

Before I go any further, can I, perhaps, draw to the Court’s attention certain clauses in various statutes which may be of some assistance? Can I start by dealing with the assessment of duty? If I can take you to the Duties Act which is in volume 1 of the joint bundle of authorities and at tab 3? If you go to page 39, you will see that section 11(1)(c) says that ‑ ‑ ‑

BELL J: I think most of us are acting off copies.

MR THOMSON: Certainly. If you look at section 11(1)(c) it says:

Subject to subsection (2), any of the following is a dutiable transaction –

and it specifically says:

a declaration of trust over dutiable property –

If you go to section 10, it says:

Duty is imposed on dutiable transactions.

The term “declaration of trust” is defined in section 9. So, if you go back to section 9, you will see that:

declaration of trust means any declaration (other than by a will) that any identified property vested or to be vested in the person making the declaration is or is to be held in trust for the person or persons –

You can leave aside the “purposes”:

mentioned in the declaration although the beneficial owner of the property, or the person entitled to appoint the property, may not have joined in or assented to the declaration –

Can I then point out that section 15 defines “dutiable property”. In the present case we say that the dutiable property was land or an interest in land and section 15 says that:

Any of the following is dutiable property –

(a) land in Western Australia;

(b) a right -

Can I then take you to the Partnership Act and draw to your attention certain provisions to the Partnership Act? If you are working from the joint book of authorities, it is tab 4. This is the standard partnership legislation that operates throughout the country. Section 6 is where I would start. It says that:

The rules of equity and common law applicable to partnership shall continue in force, except so far as they are inconsistent with the express provisions of this Act.

Clearly, we say that that allows for equitable proprietary interests in a partnership property to be acknowledged. Section 7(1) deals with the point that I made at the outset, that is that a:

Partnership is the relation which subsists between persons carrying on a business in common with a view of profit.

That is just to emphasise that the purpose of a partnership is that the assets shall be circulating for the purposes of a business. They are not there for you to have fixed and specific interests in them. That is why you have the type of interest that the courts have recognised.

GAGELER J: What about - just take the very basic question of personal property of a partnership?

MR THOMSON: Yes.

GAGELER J: How is that held? Is it held at law as tenants in common?

NETTLE J: It may not have to be.

MR THOMSON: No.

NETTLE J: It could be held by one partner but, nonetheless, on trust for the partners’ partnership property.

MR THOMSON: Can I adopt what Justice Nettle has said? It could either be held by one – the legal title to the personalty vests in either one or more partners and then they have an obligation to deal with that property for the benefit of the partners in the conduct of the partnership business. That is clear from section 32 – sorry – section 30(1), says that:

All property and rights and interests in property originally brought into the partnership stock, or acquired, whether by purchase or otherwise, on account of the firm or for the purposes and in the course of the partnership business, are called in this Act partnership property, and must be held and applied by the partners exclusively for the purposes of the partnership, and in accordance with the partnership agreement.

So that would deal with the position of personalty. So if any one of them has purchased it for the purposes of the partnership then it has to be exclusively applied for in accordance with the partnership agreement.

GAGELER J: But if any one partner purchases goods for partnership purposes, the goods are not the legal title of that partner, are they, ordinarily?

MR THOMSON: It perhaps depends on the nature of the good. I mean, for example, if you have a farming partnership and two brothers are operating farms and one of them purchases a combine harvester, it may well be that the title to that combine harvester is in the name of one brother but that the brother has to hold it for the purposes of the partnership. If two people are operating a partnership and they buy some stationery, presumably the stationery is owned by one person who purchased it but held exclusively for the purposes of the partnership.

EDELMAN J: But when you say held exclusively for the purposes of the partnership there is, I think, very long‑established position that that has both an internal and an external perspective. Now, the perspectives may not be precisely as the respondent puts it but there is an internal perspective in the sense that the partners are bound to each other by contract and there is an external perspective in the sense that the other partners, even if they do not have legal title, if the title to the acquired goods somehow were registered in the name of a single partner so that title would not be held jointly by all the partners, then there would be some form of equitable interest that all the other partners would still have.

MR THOMSON: In the totality of the partnership assets‑ ‑ ‑

EDELMAN J: Yes.

MR THOMSON: ‑ ‑ ‑which is another way of saying that the legal owner has an equitable obligation to deal with them, the assets, for the benefit of the partnership.

EDELMAN J: Well, it is slightly more than that, and that was the point that was resolved in Knox v Gye, or in the received understanding of Knox v Gye, which is that the partners still have some form of interest in all of the partnership assets as a whole, which can be devolved and can be passed by will, and so on.

MR THOMSON: Yes, we accept that equity will recognise that it is a sufficient proprietary interest to be capable of devolution by will. That was established in Hendry’s Case, and Haque deals with that, but whether you say it is a - we do not think that it is to be regarded as a full equitable proprietary interest in the specific assets. Collectively the partners together might be viewed as being able to direct how those assets can be used for the purposes exclusively of the partnership business, but individually there is no specific and fixed interest that can be said to exist in any one of those assets.

NETTLE J: So what they do under the 2013 deed is a Saunders v Vautier exercise.

MR THOMSON: Precisely. Can I just mention a couple of other provisions to the Partnership Act that are quite important? Section 32 is quite important because it says that:

Where land has become partnership property, it shall, unless the contrary intention appears, be treated as between the partners (including between the representatives of a deceased partner), and also as between the heirs of a deceased partner and his executors or administrators, as personal and not real estate.

So there is no relevant distinction between personalty and realty for the purposes of the operation of a partnership. It is well accepted that section 44(1) makes it plain that a partnership is dissolved upon the death or bankruptcy of another partner.

GAGELER J: Is section 30(2) material?

MR THOMSON: I accept that – I am not sure if I follow your Honour’s ‑ ‑ ‑

GAGELER J: No, no, you were just taking us to what you were saying were relevant provisions.

MR THOMSON: Yes. I accept that section 30(2) might be relevant. Section 30(3) is also dealing with the situation of whether co‑owners acquire land within or outside the situation – within or outside the purpose of the partnership. I think there is a very early case that deals with a similar question.

GAGELER J: Yes, I was really just asking does section 30(2) have an operative effect in the circumstances of this case or do we just put it to one side?

MR THOMSON: I think it can be put to one side. Nobody has suggested particularly that it has an operative effect in this case but certainly it is part of the matrix of background to dealing with interests in land. If it is convenient, can I take the Court to the decision in Henschke and provide the Court with our analysis of what it decides. Henschke is in volume 3 of the joint book of authorities at tab 19. Your Honours are most likely very well aware of the facts. I just might recite them very briefly.

The partnership was trading under the name Henschke and Co and the main assets of the partnership were trademarks. They were trademarks related to the names “Hill of Grace” and “Mount Edelstone” as well as the Henschke name itself. There were four partners in it: Cyril Henschke Pty Ltd, Henschke Cellars Pty Ltd, Stephen Henschke and Doris Henschke, and Doris Henschke wished to retire from the partnership.

A particular deed was entered and that provided for a sum of $5 million or so to be paid, which was equal to a one‑sixth share of the value of the goodwill based upon the trademarks in full satisfaction of any claims that Doris Henschke might have against the partnership, and it was argued and found by the South Australian Full Court that what had happened was simply that her interests in the partnership had expired and that the other interests in the partnership had expanded but there had been no transfer of partnership property and therefore the deed that effected that was not in fact a conveyance on sale.

So that was the question that came before this Court, and this Court overturned what the South Australian Full Court had decided, and said that the effect of the deed, notwithstanding that it did not substantively say this, was that it transferred the assets from the old partnership comprising of the four partners to the new partnership comprising of the three partners and permitted the three partners, as the new partnership, to use the assets of the old partnership and that there had in fact been a transfer of property which was a conveyance on sale and that it was dutiable. So that is the factual matrix in which the case fell to be decided and the result of the case.

If you go to page 551 of the joint book of authorities, or page 516 of the case, the Court, which was a unanimous court, started in paragraphs 21 to 23 by saying that it was important to acknowledge that the relations of partners were not purely contractual but that they involved equity as well based on the fiduciary relations of partners and then in paragraph 23 said that:

This foundation for the engagement of equitable doctrines and concomitant remedies has given rise to judicial consideration of the nature of the interest conferred by equity upon each partner with respect to partnership assets as they exist from time to time and in advance of a “general” dissolution under the control of a court of equity.

Now, when it says “a ‘general’ dissolution under the control of a court of equity” we understand that to mean the winding‑up that is under the control of the Court of Equity which follows the general dissolution at an earlier point. In paragraph 24 the nature of the interest in that period is described. The Court says:

Any such interest with respect to partnership assets was described by Dixon CJ as “a right in respect of assets but . . . a right, or a congeries of rights, growing out of the partnership articles”. As Windeyer J indicated in Bolton v Federal Commissioner of Taxation, the right is generally regarded as equitable and is “a fractional interest in a surplus of assets over liabilities on a winding up and in the future profits of the partnership business”.

Then there is reference to what was said in Canny Gabriel and the fact that the interest of the individual partner is regarded as sui generis. Now, the Court then went on to make the point that I made earlier, that is, the position:

is not sufficiently or accurately expressed merely by use of the term “beneficial interest” any more than when considering the operation of discretionary trusts and unit trusts.

So we say there is that analogy that is drawn and that the nature of the interest that a partner has prior to the winding‑up having occurred is not properly described as a beneficial interest. It is more in the nature of something that is analogous to the discretionary trust or the unit trust, which is the right of due administration which gives you the type of rights that have been described in ‑ ‑ ‑

EDELMAN J: Well, it is not quite the same as ‑ ‑ ‑

MR THOMSON: No, no, I was about to say, which gives you the type of rights that are referred to in paragraph 24.

EDELMAN J: Well, under a discretionary trust one of the rights or the powers is for all of the objects rather than the beneficiaries to group together and exercise the Saunders v Vautier rights to collapse the trust.

MR THOMSON: Yes.

EDELMAN J: But one could not do that in a partnership without dissolving the partnership first.

MR THOMSON: Yes. No, I accept it is not precisely identical, but the point that they are making fundamentally, we say, is that it is not correct to say that there is a full beneficial interest equivalent to a fixed or specific interest of a bare trustee and bare trustee’s beneficiaries. “The critical point”, the court said:

putting to one side the prospect of future profits, was –

and the reason why they put aside the prospect of future profits is because here we are talking about a winding‑up –

was explained by Kitto J in Livingston . . . It is that the interest of each partner can be ascertained finally only upon completion of the liquidation and the identification of any surplus share.

We say that is important because it is inconsistent with the exception that the Court of Appeal recognised about sufficient ascertainment and the Court of Appeal, even if it did not agree with it, should have applied it because of the principles in Farah v Say-dee:

That reasoning is reflected in the terms of s 39 of the Partnership Act, and exemplifies a proposition expressed by Viscount Radcliffe upon the further appeal in Livingston. His Lordship said:

“Equity in fact calls into existence and protects equitable rights and interests in property only where their recognition has been found to be required in order to give effect to its doctrines.”

So that there is no need to call into existence the full beneficial interest in respect of a partnership until the point of winding‑up being completed. Then the court goes on and says that:

The controversy in Canny Gabriel turned on the proposition that, if the equities otherwise are equal, the first of two competing equitable interests prevails . . . The decision in Canny Gabriel was that the equitable interest of a partner in the assets before winding up was more than a “mere equity” and thus retained priority over a subsequent equitable charge.

So the Court is saying it is something less than a full beneficial interest but something more than a mere equity. In effect, it is saying that it is necessary because equity thought it necessary to call into existence a proprietary interest that would apply for the purposes of the equitable priority competition. In paragraph 27 there is an analysis of United Builders and an approval of particularly the last paragraph that is quoted, which is that:

A fixed charge is appropriate to create a security over a partner’s share. It gives rise to a present security over the chose in action which is the partner’s share. Although tit creates no specific interest in the partnership assets until dissolution, this is not because the charge is dormant; it is because the rights conferred by the charge relate to the existing chose in action and that the security over the chose in action confers no entitlement to the assets of the partnership until dissolution.

Again, that is consistent the proposition that we have advanced at every stage, that there is no specific and fixed interest in the partnership land until dissolution and the consequent winding‑up.

NETTLE J: Just before you go, if you are going to finish with Henschke, could you just explain very briefly why paragraph 28 of Henschke does not get Mr Dharmananda a go under section 78?

MR THOMSON: Perhaps I am not quite following your Honour’s point.

NETTLE J: That is to say that it was a transfer of equitable interest.

MR THOMSON: So if it was a transfer of equitable interest then it would, but we say that it is a resettlement of‑ ‑ ‑

NETTLE J: I am with you. Paragraph 28 rather seems to say that, well, notwithstanding that in Henschke the result was achieved by the extinguishment of old equitable interests and the creations of new ones, nonetheless it was in substance enough for stamp duty purposes to be treated as a conveyance.

MR THOMSON: Yes. So in Henschke, although it talks about the distinction - Henschke was a case of a technical dissolution rather than a general dissolution, and so in effect what happened was that there was an agreement that the same assets which were used by the old partnership would continue to be used by the new partnership, and so there was a transfer of the interest from the old partnership to the new partnership, which is, we would say, a straight‑out transfer of the equitable interests in the particular property.

EDELMAN J: Well, strictly it is the extinguishment of one equitable interest and the creation of an identical new one.

MR THOMSON: As a matter of substance, it is four people saying we have this property and we are transferring it now to be held by three people.

EDELMAN J: Well, that is right, that is what paragraph 28 is effectively saying, that the extinguishment of one right and the creation of another right with a different trustee is in substance a transfer.

MR THOMSON: Every equitable interest, when you analyse it, is simply an obligation that affects the conscience of the legal owner.

NETTLE J: Yes.

MR THOMSON: But in some cases, such as this case, it is regarded as a transfer rather than a resettlement of the interest, and so because of the distinction, I think, between this case, which involved a technical dissolution, and the present case which involves a general dissolution and a resettlement of the equitable interests, there is a substantial distinction because there is a different set of obligations and a different set of people involved.

NETTLE J: It is just that Mrs Henschke’s interest was extinguished and the consequence of that was to create enhanced equitable interests in the remaining partners. In point of principle it is no different, is it, to the extinguishment of the sui generis - generic interests of the partners in return for, as it were, the creation of a fixed new equitable interest.

MR THOMSON: I am not sure that I can say better than this, that in substance there was the same asset that was to be held - that was transferred from one set of people to another set of people and that was regarded as sufficient to meet the definition of a conveyance on sale.

NETTLE J: But there was no transfer as such. It is just that she agreed to give up her interest for some money.

MR THOMSON: Yes, but as I had understood it they were saying that in substance that was to be regarded as a ‑ ‑ ‑

NETTLE J: Absolutely right.

MR THOMSON: Yes.

NETTLE J: I think what Mr Dharmananda is likely to be going to say is, well, sure it is that what happened here was the extinguishment of the old partnership’s non‑specific interests in return for the creation of new ones but, in substance, that was the transfer of interests from those people to the others – I think I follow your point. There is nothing of substance that is transferred. It was all wholly created – entirely different.

MR THOMSON: As we have understood it – and maybe this is something that I will need to deal with in our reply – it is that they had accepted that if they succeed on the conversion argument or the perspective argument then section 78 would apply but if they succeed on those arguments you do not need to get to section 78.

NETTLE J: I follow that point. But let us say they do not succeed on those points.

MR THOMSON: As we have understood what they have said they do not rely on section 78 independently if they do not succeed on section ‑ ‑ ‑

NETTLE J: I see.

MR THOMSON: We say that the statutory intent behind section 78 is not to deal with resettlement of different interests in the one property. It is to deal with a situation of the transfer out of the equivalent interest that you held in the same proportion as partners. So, in the present case, what has happened is that there has been a resettlement with not only the former partners or the representatives of their estates, but also the beneficiaries of their estates. So that is a different thing.

KEANE J: Is not the Court in Henschke in paragraph 28 talking about the partnership interest, that is, Mrs Henschke’s interest in the partnership as a chose in action. It is not talking about her interests in the assets of the partnership. It is talking about the interest of a partner in the partnership. That is in effect what was transferred. It is not talking about particular assets and changes in them, is it?

The Retirement Deed operated with respect to the interest of Mrs Doris Henschke, which was a presently existing equitable chose in action against the other partners ‑ ‑ ‑

MR THOMSON: Yes, and that was released ‑ ‑ ‑

KEANE J:

in place of that chose in action against the other partners.

That is speaking about her interest as a partner in the partnership, not about her interest in the assets.

MR THOMSON: Yes, I think your Honour might be right. We had understood the following words to be critical:

The Retirement Deed further provided for the creation of a second partnership to conduct the business previously conducted under the 1986 Partnership Agreement and to do so upon the terms indicated earlier in these reasons. Pursuant to and by virtue of the provisions of the Retirement Deed, there were vested in the members of the second partnership the equitable choses in action representing their present partnership interests as described by Mason J in United Builders. As already stated, the Retirement Deed thus was a conveyance within the meaning of s 60 of the Act.

If you look at paragraph 20, that is where they have already stated – the Court said in paragraph 20:

The Commissioner submits that it follows that the Retirement Deed was an instrument, in the terms of the definition of “conveyance” in s 60 of the Act, by which, or by virtue of which, or by the operation of which, personal property vested in the members of the second partnership. That submission should be accepted.

KEANE J: The point here is that we are talking about the interests in the assets being liberated from being subject to the rights and obligations of partners inter se.

MR THOMSON: Yes.

GAGELER J: Mr Solicitor, are you going to come to Canny Gabriel?

MR THOMSON: Yes, I was. I can deal with that now.

GAGELER J: No, in your own time.

MR THOMSON: Yes. The reason why I dealt with Henschke upfront is because we say there are a number of points that are derived from Henschke which are inconsistent with both the Court of Appeal’s reasoning and also with the proposition that is now advanced by the respondent. If you look at paragraph 10 of our oral outline of submissions, in paragraph 10 we say that what was decided was that it is inappropriate to describe the interest of a former partner in partnership assets prior to a winding‑up as a beneficial interest. That was paragraph 25. This interest is analogous to the rights of a beneficiary under a discretionary or unit trust. There is no full beneficial interest in the assets because it is unnecessary for equity to bring into existence such an interest to protect the rights and interests of former partners.

Can I make at this point that Henschke itself was a case of taxation and to the extent that there is an attempt to distinguish Henschke on the basis that it looked at the internal perspective whereas the occasion of taxation in this case is a reason to look at it from an external perspective, we do not follow the application of that distinction even if it exists to the present case.

We say that as a result of Henschke that the interest of a former partner in partnership assets prior to winding‑up upon a general dissolution may be regarded as an equitable proprietary interest, but it is an equitable proprietary interest in the whole of the partnership assets and not in any of the assets individually. That follows from the analysis of Canny Gabriel and United Builders. All of those points would need to be overruled as a matter of principle if you were to say that from the inception of the acquisition of partnership property in the present case the partners always had a fixed and specific interest in the land, subject to the trustee’s right of indemnity.

Now, there is no suggestion in any of the cases that that is so and we say that part of the difficulty from the perspective argument – and I will come to this when I deal with the perspective argument – is that there are two steps that are needed for the perspective argument. One is that you need to show that the whole of the equitable interest is exhausted collectively by the partners and that at all points in time there exists a division of two estates - the legal estate and the beneficial estate.

But even if you accept that first proposition, you have to move beyond that and say not only is that collectively true, but that each and every partner has a fixed and specific interest in each and every asset in order for that perspective argument to get the taxpayer home in this case, because they say that nothing changed at the time when the 2013 deeds were executed. That is to say that it was the same as if there was a bare trust prior to it and after. So even if the perspective argument gets you through the first hurdle, it does not get you through the second hurdle and, as far as we are aware, no case has suggested that, but I will come to that in due course.

Can I deal with our appeal in relation to the reasoning of the Court of Appeal? We have raised the correctness of the Court of Appeal’s decision in paragraph 2 of our notice of appeal and we say that the principle that is articulated at paragraph 27 – and we think it is reflected also in Justice Murphy’s judgment in paragraphs 135 to 139 – is not correct. We say in paragraph 3 of our notice of appeal what we say the correct position is; that is that:

1. after dissolution of a partnership, but prior to the completion of its winding up, each former partner or their legal representatives only has a non‑specific fluctuating interest in all the partnership assets until completion of the winding up; and

ii clause 3 of –

each of the 2013 deeds:

constituted declarations of trust –

because they were resettlements.

EDELMAN J: Are you going to address at some stage the comments of Justice Deane at I think page 94 of Chan v Zacharia?

MR THOMSON: I will come to that. Can I come to that in due course, if I might?

EDELMAN J: Certainly.

MR THOMSON: Can I deal with the reasoning of the Court of Appeal at this point and say this? Although there were separate reasons in the two different judgments, the majority ‑ or the plurality judgment of President Buss and Justice Beech – accepted that there was a substantial overlap of the analysis of Justice Murphy. We say that the starting point and the reasoning that was adopted by the Court of Appeal and the exception which they recognised about sufficient ascertainment is to refer to how the court addressed the significance of the excess of current assets over the liabilities of the partnerships.

Now, I should emphasise that I am talking about current assets only, not including the real estate assets, but all of the liabilities, not just current liabilities. The court did not find, and accepted that it could not find, that there was any agreement to allocate current assets to be used to pay all of the liabilities. If I can take you to what the court said – or President Buss and Justice Beech said in paragraph 21, which is in the core appeal book at pages 84 to 85:

At all relevant times, namely at the date of dissolution of each Partnership and thereafter, each partner had the right, as against the other partners, to have the assets of the Partnership applied to pay or discharge the debts and other liabilities of the Partnership, and each partner had the correlative obligation to join with the other partners in the realisation of the property of the Partnership to pay or discharge its debts and other liabilities. If such obligations were not performed, the court would, if necessary and appropriate, give specific relief to enforce those obligations.

Now, then, importantly they say:

While there is no legal requirement that the cash and other current assets be used, in preference to the relevant Partnership Properties, to pay the Partnership debts and liabilities, nothing in the agreed facts suggests any reasonable basis on which a court might order the discharge of the Partnership debts and liabilities by selling the relevant Partnership Properties rather than using the cash and other current assets immediately available. In substance, therefore, in our view a court would, if necessary, enforce by order the obligations of the partners by the use of the cash and other current assets to pay or discharge the Partnership debts and other liabilities.

So they have said that equity would erect an obligation to use the current assets in a particular way, which we say is actually different to what was contractually agreed under the partnership agreement, that is, if you have a general dissolution you then move to selling all of the assets and the surplus being distributed. Justice Murphy said something similar at paragraph 137, if you go to‑ ‑ ‑

EDELMAN J: There is no evidence, is there, of what the current assets were, or the terms on which they were held?

MR THOMSON: If I can take the agreed facts. What is agreed is this - in paragraphs 18(b) and 22(b), which are on pages 5 and 6 of the agreed facts, there is an agreement that at the dates of the dissolution of each partnership, the value of the cash or other current assets exceeded its liabilities.

EDELMAN J: But we do not know what any of those current assets were, or the terms on which they were held, or the cost of realisation of any of them.

MR THOMSON: No, I think it is fair to assume that they were mainly cash, but that was all that was agreed. In paragraph 137, at pages 124 to 125 of the core appeal book, if I start about four lines in, Justice Murphy said:

The exercise of those rights‑

which he had described in paragraph 135:

and the performance of those obligations ought, and as a matter of practical certainty‑

That was his phrase, “practical certainty”:

would, on the agreed facts, result in the debts and liabilities of the Partnership being paid out of cash and other current assets. For the purpose of determining the rights between the partners themselves, and between the partners and the holder of the legal estate of the Partnership’s real property, equity would, in my view, treat as done that which ought to be done in this regard.

So with respect, his Honour is saying that because of the practical certainty, equity would impose an obligation.

NETTLE J: Contrary to contract?

MR THOMSON: Yes. That is our point. He goes on and says:

There is nothing in the agreed facts to suppose that any other partner might have grounds for applying to the court, to have the Partnership wound up on the basis that the firm’s liabilities should be discharged by the (lengthy and expensive process of) marketing and selling the Properties, as opposed to using the cash and other current assets immediately available for that purpose.

Well, with respect, there was a term of the partnership agreement that required that to happen:

Nor, if it were relevant, is there any suggestion or evidence that the liabilities of the Partnership were not discharged by the application of the firm’s current assets, or that liabilities subsequently emerged after the commencement of the general dissolution which required the Properties to be sold.

With respect, we say that is not particularly relevant. So that starting point that the court would erect an equitable obligation and then enforce it to use the current assets to pay the liabilities was on the basis of equity would regard as done that which ought to be done and then because of that the court was able to make a conclusion that the allocation of current assets against liabilities meant that there could be sufficient ascertainment and provision for the payment of the partnership debts and liabilities. So that is the next step in their reasoning, and then they rely upon Cameron v Murdoch.

Now, we say that those steps have a number of faults with them. First, we say that the legal obligation was to proceed with a winding‑up and that was consistent with the partnership agreements and the court could not erect the equitable obligation that it did. We say it was an error of law to say that the legal obligations of the partners only required them to use the cash and other current assets to pay or discharge the partnership debts and other liabilities.

We say, secondly, that there was no specific agreement to use current assets to pay liabilities and hence there was no legal obligation which equity could regard as performed. Part of the difficulty about erecting that obligation is that in effect, as I said at the outset, what it does is it creates an allocation of the trustee’s right of indemnity if you like against particular assets. It says that you can only be indemnified or the liabilities – you have to pay the liabilities but you can only be indemnified out of the current assets and there is no law that suggests that that can be confined in the way that the court ‑ ‑ ‑

EDELMAN J: Your basic point is that the maxim requires you to identify first what ought to be done.

MR THOMSON: Yes, exactly. But the effect of it is as I have said about the right of indemnity. The third point that we make is that even if we are not correct about either of those points, even if there was an obligation to use current assets to pay the liabilities, it does not follow that equity needed to recognise any fixed proprietary interest in the assets because equity only calls into existence the proprietary interest to give effect to its doctrines, and the only reason that the court said that there was a need to call into existence the proprietary interest was the occasion of taxation.

But we say, well, that is not itself a reason why equity calls into existence proprietary interests because taxation occurs separately. That is manifestly apparent from the way the court dealt with Livingston and the location of assets. It is manifestly apparent from Henschke, and we say that in this case that was not an occasion for equity to call into existence proprietary interest and therefore that itself was an error.

It might be just a convenient minute, or point, to just refer to what was decided in Livingston because it does rather emphasise the point I was making. In Livingston, the question was whether a residuary beneficiary of an estate, which held assets in Queensland, held a beneficial interest in those assets located in Queensland. If that was the case, the residuary beneficiary was liable to pay duty in Queensland. Probate of the estate was granted in New South Wales and the executors of the estate were resident in New South Wales and the residuary beneficiary was also located in New South Wales until her death.

The High Court by a majority and the Privy Council both held that the residuary beneficiary had a right of due administration in the estate which was located in New South Wales and that the residuary beneficiary did not have any specific interest in the assets located in Queensland which, by the by, included a grazing partnership in farmland.

The Privy Council considered whether a residuary legatee had a beneficial interest in the assets of an unadministered estate and dealt with this at page 535 of the joint book of authorities at tab 18. Can I just take you to what the Privy Council said? This is page 22 of the Commonwealth Law Report of the case, page 535, behind tab 18. Viscount Radcliffe said:

Where, it is asked, is the beneficial interest in those assets –

that is the assets of the unadministered estate:

during the period of administration? It is not, ex hypothesi, in the executor: where else can it be but in the residuary legatee? This dilemma is founded on a fallacy, for it assumes mistakenly that for all purposes and at every moment of time the law requires the separate existence of two different kinds of estate or interest in property, the legal and the equitable -

which is what we say is the fallacy behind what is proposed by the respondent here:

There is no need to make this assumption. When the whole right of property is in a person, as it is in an executor, there is no need to distinguish between the legal and equitable interest in that property, any more than there is for the property of a full beneficial owner. What matters is that the Court will control the executor in the use of his rights over assets that come to him in that capacity; but it will do it by the enforcement of remedies which do not involve the admission or recognition of equitable rights of property in those assets. Equity in fact calls into existence and protects equitable rights and interests in property only where their recognition has been found to be required in order to give effect to its doctrines -

which is the very part that was quoted in Henschke. Can I also point out ‑ ‑ ‑

EDELMAN J: This case is a little bit different from that.

MR THOMSON: Yes.

EDELMAN J: There is obviously the distinct parallel with the legatee’s ability to require an executor to comply with equitable obligations. But there is a difference in that, I think on any view, there is a separation of legal and equitable interests. It is just a question of how one characterises the equitable interests.

MR THOMSON: Can I address your Honour’s question by taking you to what was said by Justice Kitto in the decision that was the subject of the appeal to the Privy Council behind tab 23 and page 715, which is page 453 of the Commonwealth Law Reports. There Justice Kitto, in discussing the nature of the interest – and Justice Kitto was part of the majority judgment – sorry, majority in the case which was affirmed on appeal – said in the second main paragraph:

An analogy may be seen also in the case of a partner’s interest in the partnership assets.

So he is drawing the precise analogy between the rights of the legatee and the rights of a partner:

That he has a beneficial interest, which the law will recognize and enforce, in every piece of property which belongs to the partnership is clearly established . . . and none the less so because the nature of the interest is peculiar in that his share in the partnership, by virtue of which the interest in a given asset exists while the asset belongs to the partnership, consists not of a title to specific property but of a right to a proportion of the surplus after the realization of the assets and payment of the debts and liabilities of the partnership . . . that is to say, not a “definite” share or interest in a particular asset, no “right to any part” of it, but an interest which “can be finally ascertained only when the liquidation has been completed, and . . . consists of his share of the surplus” ‑ ‑ ‑

EDELMAN J: In other words, there is an equitable interest but it is certainly more than what a legatee has. A legatee has a mere expectancy, whereas a partner has an equitable interest, but you just say it is something different from a fixed beneficial interest under a trust.

MR THOMSON: That is all we have to establish to show that there is a resettlement. The words that are quoted – the words that Justice Kitto uses there are very similar to the words that were used in Hendry as well – and, in fact, the same cases I think are cited in general.

Can I deal with Cameron v Murdoch? There are two judgments. They are contained in volume 4 of the book of authorities. They are behind tab 28 and 29. The appeal occurred – I think it may have been the last appeal that went directly from a single judge of the Supreme Court to the Privy Council. Can I just outline the facts? It arose in the context of a family where James Cameron was the father and he had nine children when he died. Two of those children were Dougald and Jack, whose full name was John Evander James, but I will call him Jack because that is what he is called in the judgment.

So James Cameron with his two sons, Dougald and Jack, farmed various lands. One piece of those lands was called ML or Miling Lands 1659 – that was the title. There was a question as to whether it was to be regarded as partnership land as between the three of them. That was resolved by the case and it was held that it was partnership land.

James Cameron, the father, died in 1940 and Jack died in 1974 and Jack gave a life interest to Dougald, his brother, and then left Miling Lands 1659 to various other legatees. Dougald died in 1980. By the time that Dougald died, the initial partnership between the father, James, and his two sons, Dougald and Jack, had not been wound up, it had not been wound up for some 40 years or so.

The question that arose concerned the rights that Jack had in two different capacities. One capacity was his rights as a partner, that is to say, a 9/27th share under the partnership with his father and his brother, Dougald. The other question related to his capacity as one of nine children who was a beneficiary under the estate of his father, and that was a 1/27th share. So he possibly could have taken 10/27ths of an interest in Miling Lands 1659.

Now, the question was whether or not he, in his capacity as a former partner or as a beneficiary of the estate of his father, had anything that he could have then transmitted by his own will to his own legatees, and it was argued that he did not have and therefore he was not able to have left anything to the legatees of his own will.

Now, we can say with some certainty that in respect of his capacity as a beneficiary under the unadministered estate of his father that this Court had established through Hendry and Haque prior to that that there was a sufficient proprietary interest for the 1/27th share to leave that to his legatees, and the question was whether there was a sufficient proprietary interest in his capacity as a former partner in the unadministered estate of the partnership to have left the 9/27thh share, and it is found that he could have transmitted that his legatees. So that is the effect of the decision. So, at most, all the decision stands for is that a partner is able to leave his or her share of the partnership before a winding‑up has occurred to legatees, and that is the full extent of what it stands for.

Let me point out to your Honours, although I will not read to you the relevant passages, that the whole analysis of this issue occurs in Justice Brinsden’s judgment at page 807 of the joint book of authorities, or 343 of the report. If you look at – well, perhaps I will read parts of it to you. Starting from the second line of page 807, Justice Brinsden said – and this is in respect of the 9/27th partnership share:

In my view the following cases establish that the devise is effective to the extent of the totality of Jack’s interest in the land whether as beneficiary under the estate of James, or through his interest in the partnership, the totality of that interest being 10/27 which accordingly seems to me to go to the second plaintiffs.

He cites various cases. If you go to about line 17 he says:

As at the date of Jack’s death his interest in the former partnership which was dissolved as at the date of James’ death was then no longer an indefinite and fluctuating interest, but had become one third of the value of the total assets on taking final accounts there being no debts of which I am aware other than debts necessarily incurred in the taking of the final accounts. It was a significant point in the decision of Neville J in Re Holland that the partnership was solvent and the other partnership property not the subject of the bequest was more than enough to clear the partnership debts.

Now, can I just point out at this stage, if you look at page 826 of the joint book of authorities ‑ ‑ ‑

BELL J: I am sorry, for those of us looking at the report ‑ ‑ ‑

MR THOMSON: Page 362.

BELL J: Thank you.

MR THOMSON: That sets out the orders that were made by Justice Brinsden and Order 2(b) was:

An order for the winding up of the said partnership.

So winding‑up had not occurred. Order 2(c) is an order for the taking of accounts. So that had not occurred. Then if you look at Order 8 on page 363 it is that there is:

A declaration that the devise of ML 1659 in the will of [Jack] deceased to the second plaintiffs is effective to pass to them the interest of the said deceased in the said land, namely, 10/27 of the entirety.

It is those words “of the entirety” that demonstrate that what Justice Brinsden had in mind was the entirety in the same way that you are talking about the interest of a partner in partnership assets, not a fixed and specific interest. Can I then point out, if you go back to page 343, that he deals with the question of whether or not Jack could leave the 1/27th and he basically applies what was said by the Privy Council in Livingston’s Case. That is between lines 25 to 39.

This case went on appeal. Nowhere does Justice Brinsden say that there was a vested interest in specie in the land and nor could he say that because of the fact that there had not been a winding‑up and he accepted that in the way he framed Order 8.

If you look at tab 29, the Privy Council dealt with this part of the case at page 293 of the Australian Law Journal Reports, or page 846 of the joint book of authorities. If you look at the first column, just above point E on page 293, the Privy Council said:

The general principle to be applied in construing the provisions of a will or other legal instrument is to construe them, if possible, in such a way as to make them have some effect rather than no effect. The ground of this principle is that it is reasonable to presume that the maker of the will, or other legal instrument, would not include a provision in it unless he intended it to have at least some effect.

In their Lordships’ view, it would be wrong to say that, because the precise share which first Jack and secondly the estate of James had in ML 1659 had not been finally ascertained at the date of Jack’s will -

So they say because it had not been finally ascertained - the precise interest had not been finally ascertained:

therefore Jack had no interest in ML 1659 which cl. 3(b) of his will was capable of passing to the beneficiaries named in it.

Then they go on and approve what was said by the High Court in Canny Gabriel.

It was held by the High Court of Australia in Canny Gabriel . . . that a partner had an interest in every partnership asset and that such interest was an equitable interest and not a mere equity. Their Lordships respectfully agree with that decision, which leads to the conclusion that, when Jack made his will, both he and the estate of James had equitable interests in every part of the original partnership assets, including ML 1659. There was no suggestion that, on the winding up of the original partnership it would be necessary to sell ML 1659, or any part of it, in order to pay off partnership debts. That being so, their Lordships consider there is no difficulty in supporting the finding of Brinsden J. that the amount of Jack’s equitable interest in ML 1659 at the date of his will was 10/27ths.

So we say that there is nothing in that which suggests that there was a fixed and specific equitable interest in the land, and in fact it is to the contrary. In fact, if you need further confirmation of that proposition, in a different respect, and I accept it is on a different part of the case, but if you look at page 287 of the Australian Law Journal Reports, and if you look in the first column, just below point E, the Privy Council says:

There can be no doubt that there is between existing partners, and between surviving partners and the estate of a deceased former partner, a general duty of utmost good faith . . . That general duty is recognised and given effect to by, in particular, s. 40 of the Act of 1895 . . . In their Lordships’ opinion, it is wholly or mainly this obligation of utmost good faith, which gives to the relationships between existing partners, and between surviving partners and the estate of a deceased former partner, the fiduciary nature which they have been held to have. The existence of such fiduciary relationship is not, however, in their Lordships’ view, equivalent for all purposes to a relationship of trustee and cestui que trust.

So they are saying that it is not the same as a bare trust in that context. Now, it is a different context, but it would be surprising if they were affirming in the context of Miling Lands 1659 that there was, for that purpose, the existence of a bare trust.

So for those reasons we say that Cameron v Murdoch does not provide any support for the way in which the Court of Appeal developed its own principle. Can I deal with Canny Gabriel. The relevant passages in Canny Gabriel are set out at pages 327 to 328 of the report, which is page 463 to 464 of the joint book of authorities behind tab 15 in volume 3. Nothing that is said there about the nature of partnership interest – partners’ interest in partnership property is contrary to the submission that we make that it is not the same as a bare trust. At the bottom of page 327, Justices McTiernan, Menzies and Mason said that:

The nature of a partner’s interest in the partnership property has often been explained. The partner’s share in the partnership is not a title to specific property but a right to his proportion of the surplus after the realization of assets and the payment of debts and liabilities.

We embrace that.

However, it has always been accepted that a partner has an interest in every asset of the partnership and this interest has been universally described as a “beneficial interest”, notwithstanding its peculiar character.

Again, we embrace that, subject to understanding that it is a peculiar character, having regard to what was said in Henschke.

GAGELER J: Well, that is really the question I wanted to ask. Was Henschke saying something different from Canny Gabriel? I mean is there some sort of implied overruling? Is there a change of principle? Are they perfectly reconcilable? I do not know; it is not easy for me to read them together.

MR THOMSON: We think that they are reconcilable. First, that when it talks about a beneficial interest, it is adding the qualification of “peculiar character” and that means that the Court in Canny Gabriel did not view the beneficial interest we think, in our submission, as equivalent to a full beneficial interest of the nature that you would have under a bare trust.

EDELMAN J: The common use of beneficial interest in equity is an interest that equity recognises, that is, to the benefit of a particular person, and that common use is very, very often manifested in the context of a fixed trust, but sometimes equated or limited to that usage, but the inverted commas here seem to be suggesting that it is not limited to that usage; it is using it in the broader sense.

MR THOMSON: Your Honour has put it much more eloquently than I could have. But that would be what we would say, that beneficial interest means something that can encompass both the type of beneficial interest that is the subject of a bare trust as well as something less than that. So that you may describe – clearly, they were describing the nature of a partner’s interest in every asset as a beneficial interest even though they had previously set out the characteristics of it and it is those characteristics which give it its peculiar character. So, we do not think that it was departing from any of the established law about the nature of the beneficial interest for partnerships. But they were using “beneficial interest” in a broader sense and that is entirely consistent with what was said in Henschke.

NETTLE J: But you accept Canny Gabriel’s conclusion that because through accident of history this interest of partners – lacking in specificity though it be – is called an equitable interest it ranks in priority ahead of a mere equity.

MR THOMSON: Yes.

NETTLE J: Which is the point in Canny Gabriel, is it not?

MR THOMSON: Yes. That is because equity considered that it was necessary to call into existence a sufficient proprietary interest to have caused that outcome to occur because equity thought that that was the right thing that should occur in this type of case. So, the law was laid down in that way.

KEANE J: Because no one else – no one who was not a bona fide purchaser for value without notice could defeat the interests of the legatee or the partner.

MR THOMSON: Yes.

KEANE J: Equity would make such orders as were necessary to give effect to that, just as with specific performance. The beneficial interest of the purchaser is a beneficial interest. It is a much stronger interest when the purchase price has been paid than when the contract struck. But in each case we use the term “beneficial interest” accurately but bearing in mind that it all depends on the extent of the order that a court of equity can make to vindicate the equities of the situation.

MR THOMSON: Yes, we would respectfully adopt that.

BELL J: The point being made in Henschke was simply that it – to refer to a “beneficial interest” is insufficient to fully characterise this peculiar form of interest.

MR THOMSON: Yes. Can I make one other point relating to Canny Gabriel? It does go on and it refers to what was said by Justice Luxmore in In re Fuller’s Contract. If you go over the page, it quotes what is said by Justice Luxmore. Justice Luxmore said:

“ . . . as between the partners, the partnership property must be dealt with in a particular way, but so far as all the rest of the world is concerned, there is no limitation on the interests of the partners; the partners have the beneficial interest in the partnership assets –

He then goes on and says:

which are held together as an undivided whole, but they respectively have undivided interests in them”.

We do not think that Justice Luxmore was saying anything different from what Canny Gabriel was saying. It does not appear that the judges in Canny Gabriel thought that Justice Luxmore was saying anything different. To the extent that our friends rely upon Canny Gabriel and Justice Luxmore for the internal/external perspective argument, we say that it is not supported by this case because if you understand the significance of the last part of the words in their quote, all that it is doing is it is saying precisely the same thing that is said in Canny Gabriel.

EDELMAN J: There is an internal and external perspective. The internal perspective, even on your case, is that the partners amongst themselves are bound by obligations of contract and equitable obligations as to how they treat the assets, and in relation to the rest of the world the partners have an interest which you say is an unspecified floating interest over the assets as a whole ‑ ‑ ‑

MR THOMSON: Yes.

EDELMAN J: ‑ ‑ ‑ but that is the external and the internal perspectives.

MR THOMSON: And, can I put it this way, perspective is the way you view it. It does not mean that the nature of the underlying obligation is any different at all, and so that is the fallacy in saying that, in truth, the external perspective generates a different form of obligation. Perspective is simply a matter of how you view it, but what is put is that for the purposes of the external perspective there is a different form of obligation. So we say that that is part of the difficulty in the distinction as drawn by our friends.

That perhaps takes me to the question of the internal/external perspective, and to some extent I have already mentioned what our argument is about that – and in particular also emphasise the point that to the extent that you are trying to distinguish Henschke because it – well, what our friends say in paragraph 48 of their submissions is that Henschke can be distinguished because it:

did not relate to a partner’s equitable title to partnership property, as against the holder of the legal title or the rest of the world. It concerned the internal, not external perspective.

We ask the question rhetorically, well, if for the purposes of assessing tax you use the internal perspective as in Henschke, why not in this case? So even if they happen to be right about their distinction, why do you not apply the internal perspective?

But we think that there is a more fundamental problem. The case that they most rely upon is the decision in Inland Revenue Commissioners v Gray, and in that case there was a question about ‑ in the context of valuing land, whether valuing a partnership share in a tenancy in the land was valuing land or whether it was valuing other property. The reason why it became relevant was because it was a question of jurisdiction of the Lands Tribunal to determine the value of the partnership interest in the property.

Lord Hoffmann deals with this in – perhaps if I take you to the relevant case. It is at tab 32. He deals with this at page 956 of the joint book of authorities, or page 377 of the report. By the way, if you are interested in the actual terms of the legislation that gives rise to the question it is set out at page 366 of that report. But in the paragraph that appears just below point b, Lord Justice Hoffmann, as he then was, says:

I do not think it matters whether or not Lady Fox’s partnership interest included an interest in the tenancy which was itself ‘land’. The Lands Tribunal rejected the Crown’s argument that it was land and that accordingly there was no jurisdictional barrier to valuing it together with the freehold. For my part, I think that the Crown was right. As between themselves, partners are not entitled individually to exercise proprietary rights over any of the partnership assets. This is because they have subjected their proprietary interests to the terms of the partnership deed which provides that the assets shall be employed in the partnership business, and on dissolution realised for the purposes of paying debts and distributing any surplus. As regards the outside world, however, the partnership deed is irrelevant. The partners are collectively entitled to each and every asset of the partnership, in which each of them therefore has an undivided share. It is this outside view which identifies the nature of the property falling to be valued for the purpose of the capital transfer tax, although in accordance with –

various principles, certain things must be taken into account in the valuation. Now, we would say in respect of that case it does not specifically state that partners or former partners should be regarded for any purpose as having an interest in the partnership land which is equivalent to the interest of a beneficiary under a bare trust. Secondly, it does not suggest a substantive difference in legal rights, viewed internally or externally.

The perspective, as I said, may change, but not the character of the rights. The equitable rights are not in substance different for one legal purpose compared to another legal purpose. With respect, it is a case about the jurisdiction of the Tribunal, and so the question which arises in this case did not squarely arise in that case.

I have already dealt with Canny Gabriel which is the second case that our friends relied upon. In their reply submissions they rely upon Seymour v Deputy Federal Commissioner of Land Tax. We think that there is an easy answer to that case. It turns on the particular legislation in that case, as the judges in that case acknowledged.

I hope that you have been provided with a copy of the relevant legislation, which was the Land Tax Assessment Act 1910. If you look at the relevant legislation you will see there is a definition of “joint owner” in section 3, and if you look at the definition of “joint owner” – this is on page 2 of the extract that has been given to your Honours; well, it is actually the whole Act – you will see that:

“Joint owners” means persons who own land jointly or in common, whether as partners or otherwise.

I should just alert you that this is not done alphabetically, so “joint owners” appears for some reason under “owned”. Quite obviously, therefore, if joint owners means persons who own land, jointly or in common, whether as partners or otherwise, it covers partners. You do not need any common law for that.

BELL J: I note the time, Mr Solicitor. Are we at the point in your outline of the notice of contention, paragraph 2, the conversion agreement, about which I think you have already made some submissions?

MR THOMSON: We are very close to that. If your Honour gives me two minutes, I will get to that point.

BELL J: All right. Well, let us give you those two minutes and then we might adjourn.

MR THOMSON: Yes. All I was going to say is that the last case they rely upon is Haque v Haque.

BELL J: Yes.

MR THOMSON: Haque v Haque is explicable as consistent with Hendry because it is the transmission of an interest under a will, and therefore none of the cases squarely support the perspective argument in the way that my friends rely upon it.

BELL J: Thank you. Yes, very well. We will adjourn to 9.45 am tomorrow.

AT 4.15 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 7 NOVEMBER 2019