Habchi v Jason H Pty Ltd

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTIOSN - INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS - where there is an order that several separate questions be decided at a trial - where there are four sets of proceedings in this court between Habib Habchi and Jason Habchi, who are brothers - where there are three questions to be separately determined - where the first question to be separately determined is 'what is the proper construction of the Family agreement' - where Habib and Jason entered into what was styled a Family Agreement - where the Family Agreement was intended to clarify Habib and Jason's future business relationship - where the primacy of the text is relevant to interpretation - where Jason argues the court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption the parties intended to produce a commercial result - where the context of the agreement is the settlement of a dispute between the Habchi family and the Australian Tax office for $1,257,775 - where only Jason had the capacity at the time to make the repayments to the Australian Tax Office - where the contract has three operative clauses - whether the grammatical meaning of the words in the Family Agreement should be adopted

PARTNERSHIP - GENERALLY - FACTS AND AGREEMENTS EVIDENCING PARTNERSHIP - PARTNERSHIP IN FACT - CONSIDERATION OF INTENTION OR RELATIONSHIP - where Jason and Habib Habchi have entered into a 'Family Agreement' - where the Family Agreement was intended to clarify Habib and Jason's future business relationship - where the Family Agreement states Jason would "make [Habib] a partner 50-50 for any development or property purchase from the date this agreement" - where Habib argues the Family Agreement establishes a partnership - where Jason argues the Family Agreement does not give rise to the alleged partnership - where Jason submits the Family Agreement lacked the critical feature of mutuality of rights and obligations between Habib and Jason - where Jason submits that Habib's entitlement to income or distributions was in Jason's discretion under the Family Agreement is impossible to reconcile with the key features of a partnership - where Jason submits that contrary to Section 27(1) of the Partnership Act 1896 (Qld), Habib was not entitled to and in fact took no part in the business of the putative partnership - where Jason argues that, if a partnership existed, the capital of the partnership (and thus the property) would be illusory - where Jason argues it is difficult to impose any relevant fiduciary duty of the kind customarily associated with a partnership - whether the Family Agreement created a partnership between Habib and Jason

PARTNERSHIP - GENERALLY - BREACH OF AGREEMENT FOR PARTNERSHIP - GENERALLY - where partners are required to account to the other -where Section 31 of the Partnership Act 1896 (Qld) provides that partners are bound to render true accounts and full information of all things affecting the partnership to any partner or their legal representative - where Section 32(1) Partnership Act 1896 (Qld) of that Act provides that every partner must account for any benefit derived by the partner without the consent of the other partners - where there were three property developments - whether a partnership has been breached by a failure to properly account for the profits earned by Jason on the three property developments

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - GENERALLY - where the partnership was determinable at will and notice of termination by either party - where an email exchange between Jason and Habib contemplates that the agreement would only be formally at an end once there had been a financial split - where Jason elected to be "totally disconnected" from Habib - where the brothers engaged in a process of 'separating everything' - whether the partnership was terminated

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTIOSN - INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS - where Habib and Jason entered into what was styled a Family Agreement - where the Family Agreement was intended to clarify Habib and Jason's future business relationship - where a contract was entered into to purchase the 'City Road property' - whether Jason and Habib were to have a 50:50 interest in the City Road property

Partnership Act 1896 (Qld), s 5, s 6, s 27, s 31, s 32

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, applied

Christian v Cooper [2020] QSC 224, considered

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7, considered

Hawkins v Clayton (1988) 164 CLR 539; [1988] HCA 15, cited

Heavy Plant Leasing Pty Ltd (In Liq) v McConnell Dowell Constructors (Aust) Pty Ltd (No 2) (2022) 163 ACSR 562; [2022] NSWSC 1775, applied

Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184, considered

McNicholas v Sarandopoulos [2018] NSWSC 576, cited

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37, cited

Rusbridge v Lake Fox Ltd [2024] QSC 279, applied

• [1] Habib Habchi and Jason Habchi are brothers.[1] Habib is older than Jason by seven years. They have fallen into a bitter dispute and the result has been four sets of proceedings in this Court:

(a) BS 9265 of 2022, known as the City and Sherwood Roads proceeding, is the primary vehicle for Habib's contentions in relation to a family agreement (the 'Family Agreement') as well as Habib's claims in relation to 538 Sherwood Road Sherwood and 2 City Road Beenleigh.

(b) In BS 1372 of 2024, known as the Cook Street proceeding, Habib seeks a declaration that 63 Cook Street was, or is, held on trust for him. The backdrop is that the property at 63 Cook Street Oxley was purchased in 2001 in the name of Rania, Habib and Jason's sister. Rania died in 2017. In 2023, Rania's father, Peter Habchi, was appointed administrator of Rania's estate. In 2024 Rania's widower, Boutros Akl Habchi, was appointed as administrator of Rania's estate.

(c) In BS 3450 of 2024, known as the Lantona proceeding, Habib sues Jason, his business partner, Andrew Hanna, and their two companies Lantona Pty Ltd and Lantona 2 Pty Ltd. In this proceeding Habib is seeking a declaration that he is entitled to 25% of the shares in one or both companies.

(d) In BS 11432 of 2024, known as the Jayhab proceeding, Habib alleges that he has been oppressed as a minority shareholder.[2]

• [2] There is another proceeding called the Mine Street proceeding,[3] in which Jason applied for statutory trustees to be appointed to sell 7 and 9 Mine Street Redbank Plains, both of which are owned by Habib and Jason as tenants in common in equal shares. In that proceeding, Habib counterclaimed for a declaration that Jason's half share in 7 and 9 Mine Street are held on trust for him. The trial of the Mine Street proceeding took place before Sullivan J on 10 to 14 July 2023 with closing submissions in August 2023. Judgment is reserved.
• [3] On 14 October 2024 I ordered that several questions be separately decided at a trial. The separate questions to be tried were as follows:[4]

Question 2: What is the proper construction of the Family Agreement?

Question 3: Having regard to the answer to the question above:

(i) was the Family Agreement breached by anyone?

(ii) further or alternatively, was the Family Agreement terminated by anyone?

(iii) further or alternatively, is anyone now entitled to terminate the Family Agreement?

Question 4: Is any party estopped from asserting or maintaining any position with respect to the proper construction of the Family Agreement?

Question 5: Having regard to the answers to the questions in paragraphs (a) and (c) above, other than in relation to the Mine Street Properties, what relief, if any, are:

(i) the Habib Habchi Parties (or any of them) entitled to?

(ii) the Jason Habchi Parties (or any of them) entitled to?

Question 5A: Are the Habib Habchi Parties (or any of them) entitled to any and, if so, what, relief in relation to the real property located at and known as 2 City Road, Beenleigh in the State of Queensland (Lot 2 on Survey Plan 145262)?[5]

Question 6: Are there grounds for the making of an order under s 233 of the Corporations Act 2001 (Cth) in relation to Jayhab Developments Pty Ltd, as provided for by s 232 of that Act?

Question 7: Having regard to the answers to the questions in paragraphs (a) to (e) above, what orders or directions are necessary or appropriate to determine or facilitate the determination of any remaining questions in the Proceedings, including relief?

• [4] Ultimately, though, at trial the questions to be determined were narrowed to questions 2, 3 and 5A.

• [5] The timeline is conveniently explained by the following table (based on a chronology prepared by Jason's lawyers):

Several properties are purchased (and some sold), with varying members of the Habchi Family (or entities associated with them) recorded as the registered owner(s).

The Habchi family become involved in a long-running and expensive dispute with the Australian Tax Office (ATO).

Habchi Holdings defaults under a Bank of Queensland (BOQ) line of credit facility. Another company, XP Capital Investments Pty Ltd, is incorporated with Jason as the sole director.

As part of the ATO dispute, the Habchi family are unsuccessful in the AAT.

XP Capital obtains a line of credit facility from National Australia Bank and pays out Habchi Holdings' BOQ facility.

The Habchi Family enter into a settlement with the ATO, which requires them to pay a settlement sum of $1,257,775.00 in three instalments.

(Jason will later pay the first two instalments of $400,000.00 each.)

Habib and his wife, Moni, appoint Jason as their attorney.[6]

Jason sells properties 47 Ellen Street, 115 Main Greenswamp Road, and 13 Quarry Road.

538-540 Sherwood Road is transferred to Jayhab (as trustee).

Jayhab (as trustee) becomes the registered owner of 2 City Road

Jason transfers one of his two shares in Jayhab to Habib

JHPL replaces Jayhab as trustee of the Jason H Family Trust

JHPL (as trustee) sells 2 City Road to a third party[7]

Part 2: Question 2 - Proper interpretation of the Family Agreement

• [6] Question 2 is: What is the proper construction of the Family Agreement? To answer that question, it is necessary to examine the legal principles that apply to contract interpretation, the provisions of the Family Agreement, and whether in its context the Family Agreement gave rise to a partnership between Habib and Jason.
• [7] As explained in the chronology, on 30 September 2014 Habib and Jason entered into what was styled a Family Agreement. That Family Agreement is quoted in full later in this part. Before going to the Family Agreement in detail, it is necessary to state some principles that apply to the interpretation of agreements such as this.

• [8] Despite its name, the Family Agreement was intended to clarify Habib and Jason's future business relationship. The Family Agreement says that in its opening words. That means that the ordinary approach to the interpretation task is to ask what a reasonable businessperson would have understood the words to mean.[8]

• [9] The relevant principles were discussed in Rusbridge v Lake Fox Ltd.[9] That discussion is repeated below.
• [10] In Heavy Plant Leasing Pty Ltd (In Liq) v McConnell Dowell Constructors (Aust) Pty Ltd (No 2)[10] Stevenson J explained that a court, in interpreting a provision of a document, has regard to its words, its context and the purpose of the document as a whole. As his Honour pointed out, the leading modern statement on the importance of context and purpose is found in the reasons of French CJ and Nettle and Gordon JJ in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd:

"The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.

In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.

Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.

However, sometimes, recourse to events, circumstances and things external to the contract is necessary..."[11]

• [11] As Herzfeld and Prince say in their text Interpretation:

"... the only relevant meaning is that which the text conveys. This follows from the need to ascertain the intention expressed in the document. Although ... context and purpose are relevant, ultimately the court must attribute meaning to the words actually used."[12]

• [12] The primacy of the text is the first rule of interpretation for a judge considering a point of interpretation.[13] As has been explained: "The first place where you look for the intention of the parties is in the language which they themselves used. And it is very often the last place too".[14] Thus, the process of interpretation does not allow a court to force upon a provision of a private legal document a meaning that the words of the provision cannot fairly or reasonably bear, and to substitute for the bargain actually made one which the court believes could better have been made.[15]

Electricity Generation Corporation v Woodside Energy Ltd

• [13] Counsel for Jason, relying on Electricity Generation Corporation v Woodside Energy Ltd, argued that unless a contrary intention is indicated the court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption "that the parties...intended to produce a commercial result".[16] A commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience".
• [14] But that case concerned the extent of the parties' obligations under a long term gas supply agreement where the seller's obligation was to supply a quantity of gas but also an obligation to use reasonable endeavours to make available to the buyer a supplemental maximum daily quantity of gas. In determining whether they were able to supply a supplemental maximum daily quantity on a given day, the sellers were permitted to take into account all relevant commercial, economic and operational matters. The issue considered by the High Court was the extent of that obligation to use reasonable endeavours. The majority made three general observations about the obligation to use reasonable endeavours to achieve a contractual object.[17] First, an obligation thus expressed is not absolute or unconditional. Secondly, the nature and extent of an obligation imposed in such terms is necessarily conditioned by what is reasonable in the circumstances, which can include circumstances that may affect an obligor's business. Thirdly, some contracts containing an obligation to use or make reasonable endeavours to achieve a contractual object contain their own internal standard of what is reasonable, by some express reference relevant to the business interests of an obligee.
• [15] Those specific observations about the reach of a 'reasonable endeavours' clause in a complex commercial contract are some distance from this case. For example, the focus in Electricity Generation Corporation v Woodside Energy Ltd was not really what the parties meant by the expression 'reasonable endeavours' but rather how far that expression extended.

• [16] Counsel for Jason also relied on Mainteck Services Pty Ltd v Stein Heurtey SA.[18] In that case Leeming JA (with Ward and Emmett JJA concurring) made these observations about the process of contract interpretation:

(a) in principle, every legal text requires legal interpretation, in order to ascertain its legal meaning, although there is no real scope for dispute about the interpretation of many legal texts;

(b) very often:

(i) language when considered in its context, will have a single, clear meaning;

(ii) there is no dispute as to the ordinary grammatical or literal meaning of a sentence, and no dispute that that is the legal meaning;

(iii) nothing in the context will come close to displacing the ordinary grammatical meaning of the legal text;

(c) on the other hand, the legal meaning may diverge from its literal or grammatical meaning, especially in the (self-selectingly contestable) cases that reach courts; words do not have a "natural" meaning that can be determined in isolation;

(d) for those reasons, to say that a legal text is "clear" reflects the outcome of that process of interpretation; it means that there is nothing in the context which detracts from the ordinary literal meaning; it cannot mean that context can be put to one side.[19]

• [17] And so, the process of legal interpretation necessarily involves consideration of the language used in its context, and objective surrounding circumstances are available to inform the process of contractual interpretation.[20] The process can involve any implications derived from the words used.[21] But often the language, when considered in its context, will have a single, clear meaning, and nothing in the context will displace that single clear meaning.

• [18] The Family Agreement is in these terms:[22]

Habib Peter HABCHI (hereinafter referred to as HPH)

This Agreement is to provide clarity for future business relationship as follows [paragraph numbering added]:

[1] HPH has accumulated property assets since 1999 and since 2008 a tax dispute has been ongoing. During this period JH has expended personal Cash to cover expenses related to the ongoing tax dispute. On 29 September 2014 a Deed was executed for settlement in the total amount of $1,257,775.00 to be paid within 21 days of execution $400,000 following 12 months further $400,000 following 6 months balance $457,775.00.

1. 61 Cook Street, 2. 63 Cook Street, 3. 47 Ellen Street, 4. 115 Main Greenswamp Road, 5. 13 Quarry Road, 6. 538 Sherwood Road, 7. 35 Strauss Place, 8. 64 Tarragindi Road, 9. 7 Mine Street, 10. 9 Mine Street.[23]

[3] JH cash paid approximately $700,000 (JH to confirm this amount) plus further $400,000 within 21 days for Deed executed total $1,1000,000.00.

[4] On execution of this Agreement HPH will give full control of all assets and income from all the above assets to JH.

[5] JH is to offset $1,1000,000 at his discretion against Bank value for above properties.

[6] In exchange JH will make HPH a partner 50-50 for any development or property purchase from the date this agreement is executed, including the property at Stanley Street, Indooroopilly development.

[7] For any personal Cash JH expends he can at his discretion either offset against Bank value of above properties or recover and deduct cash at end of development before distribution.

[8] On completion of any development JH can distribute at his discretion.

• [19] The document is signed by both Habib and Jason. Their signatures are witnessed by a solicitor. There was some evidence that Jason executed the document at a later date. But none of that evidence matters. The parties accepted that they entered into the Family Agreement.

• [20] Paragraphs 1 and 2 of the Family Agreement are in effect recitals. They record the background to the agreement. There was some contest about whether the recital was accurate and whether Habib had in fact accumulated the 10 properties or whether the properties had been accumulated through pooled family money.
• [21] Habib's evidence was that those properties were accumulated by him in the sense that he contributed the lion's share of the purchase price. He said that this was because his parents were on a pension and that one sister did not work, and Jason was significantly younger than him and was making his way in the building industry.
• [22] Jason's evidence was that the money came from the family business, Farmer Charlie's or Farmer Charlie's Fruit Market,[25] a fruit shop at Oxley. Various members of the family worked in the business.
• [23] There was no precision about who worked when, or what profit the business earned, or what each family member received from the business. Even the precise owner of the business remains a mystery. Habib claims that the business was his. He certainly had control of the business. But it is likely that the business was operated by a partnership comprising Habib, Jason and Marina (another sibling).[26]
• [24] In any event, the issue of who operated the business, and who contributed what, was something of a (persistent) red herring during the trial.
• [25] The 10 properties listed as 'Accumulated' in paragraph 2 were, at the time of the Family Agreement, in various names associated with the family, namely:

(a) Property 1 (61 Cook Street) - Habib Habchi;

(b) Property 2 (63 Cook Street) - Rania Habchi (later part of her estate);

(c) Property 3 (47 Ellen Street) - Jason Habchi;

(d) Property 4 (115 Main Greenswamp Road) - Moni Habchi;

(e) Property 5 (13 Quarry Road) - Moni Habchi;

(f) Property 6 (538 Sherwood Road)[27] - Habchi Holdings Pty Ltd;[28]

(g) Property 7 (35 Strauss Place) - Habib and Moni Habchi as tenants in common in equal shares;

(h) Property 8 (64 Tarragindi Road) - Jason Habchi (until 2021);

(i) Property 9 (7 Mine Street) - Habib and Jason Habchi as tenants in common in equal shares;

(j) Property 10 (9 Mine Street) - Habib and Jason as tenants in common in equal shares.

• [26] Whoever it was that contributed to the purchase price for each property, the legal position is that, at the time of the Family Agreement the 10 properties were owned by the parties identified above. The court will not lightly depart from the legal position adopted by the parties.
• [27] In 2002 Jason started undertaking carpentry work. By 2008, he had established Brisbane Builders Pty Ltd. In 2009, he and Brisbane Builders obtained Queensland Building and Construction Commission ('QBCC') licences. In March 2014, Jason and Andrew Hanna established a property development business known as Lantona. In mid-2014, Lantona acquired a parcel of land at 25-29 Stanley Street, Indooroopilly for a proposed property development.
• [28] Paragraph 1 of the Family Agreement identifies the reasons for the agreement - the resolution of the long-running dispute with the Australian Tax Office ('ATO'). On 29 September 2014, the day before the Family Agreement was executed, a settlement deed was entered into with the ATO to resolve all liabilities said to have been owed by the various family members to the ATO. That settlement was for a total of $1,257,775 but the focus of both Jason and Habib was to ensure that the first instalment of $400,000 was paid to the ATO within 21 days of the execution of the settlement deed. The other two instalments, $400,000 within 12 months, and the balance of $457,775 within a further six months, were of less concern at the time.[29]
• [29] It seems to be agreed that only Jason had the capacity to pay the first instalment of $400,000 within 21 days. At about this time, a refinancing agreement was reached with the National Australia Bank ('NAB') with respect to the Bank of Queensland ('BOQ') line of credit and some additional facilities for Brisbane Builders.[30]
• [30] That was the context in which the Family Agreement came to be signed.
• [31] Jason argued that an important part of the context was a deed of acknowledgement of debt entered into on 1 July 2013 - some 15 months before the Family Agreement. I am not persuaded that the nearly $230,000 acknowledged in that deed was particularly influential. That deed of acknowledgment was not mentioned in the Family Agreement. The real driver for the Family Agreement was to resolve the immediate problem with the ATO. The Family Agreement superseded the prior deed.

• [32] The operative clauses of the Family Agreement are paragraphs 4, 5 and 6. The basic bargain was that from the date of the agreement, 30 September 2014, Habib agreed to give Jason control of the 10 properties[31] as well as the income from those properties. In return:

(a) by paragraph 5, Jason was to 'offset' $1,100,000 at his discretion against the bank value for the 10 properties; and

(b) by paragraph 6, Jason was to make Habib a 'partner 50:50' for any development or property purchase from the date of the agreement onwards, including the development property at Stanley Street, Indooroopilly.

• [33] The objective of the 'offset' in paragraph 5 was presumably to entitle Jason to pay to himself the $1.1 million that paragraph 3 of the agreement records Jason as having paid. Of that sum $400,000 appears to have been the first instalment of the debt to be paid to the ATO.
• [34] Evidently, the objective of paragraph 6 of the Family Agreement was to give Habib a 50:50 interest in the development work Jason was intending to undertake, including the Indooroopilly development which was already underway or at least in the planning stages.

• [35] Four aspects of the bargain can be noted.
• [36] First, the Family Agreement has a prospective stance. The express objective of the agreement is to "provide clarity for [the] future business relationship" of Habib and Jason. And so, from the signing of the agreement, Jason was to assume the control of the 10 properties and Habib was to become a 50:50 partner in Jason's Indooroopilly project and his future projects.
• [37] Second, the Family Agreement uses the expression "full control of all assets and income" for a reason the use of the concept of control is obvious. Habib could not assign legal ownership of the 10 properties to Jason because they were in various names of family members and entities. It was not the objective of the Family Agreement to transfer legal ownership but rather the objective was to assign the control and income of the properties from Habib to Jason. In fact, nothing in the Family Agreement purports to alter the legal ownership of the 10 properties. However, 'control' meant that Jason could sell the properties - presumably with the consent of the legal owner.
• [38] Third, the Family Agreement is rather broad and rudimentary, perhaps indicating that Habib and Jason anticipated that they would be able to cooperate. For example, the homes that Habib and Jason lived in were included in the list of 10 properties. Habib lived in property 7 and Jason lived in property 8. Presumably rent was not to be demanded for those properties and presumably they were not to be sold or disposed of without some further agreement. Nevertheless, the Family Agreement was plainly intended to be a legally binding agreement - albeit broad in scope. It was signed, dated and witnessed by a solicitor and it does not envisage a further, more detailed agreement.
• [39] Fourth, the Family Agreement has no termination or expiry date. The agreement certainly had a prospective stance in that it dealt with the future business relationship of Habib and Jason. But it can hardly have been intended to extend forever into the future, come what may.[32] And so, on this point, I accept the submission for Jason that the Family Agreement was determinable at will - by either party on giving reasonable notice, at least from when the first payment to the ATO had been made.

Discussions Prior to the Execution of the Family Agreement

• [41] For Jason it was contended that there were relevant discussions prior to the execution of the Family Agreement. There is an air of unreality in Jason's evidence of these alleged conversations. For example, Jason alleges that at around the time of the settlement with the ATO he and Habib had the following exchange:

"Me [Jason]: Habib, you are reckless and have caused all of this mess with the ATO and the default with BOQ. You have caused the family so much stress and almost lost all of the family assets. My tax portal needs to be cleared. I can't do business with a big tax debt. I will pay the first settlement repayment so I can clear my tax portal but I need to get paid back. How am I going to get paid back?

Habib: You can take control of the family assets to pay yourself back. But any developments you do with those assets you need to make me a fifty-fifty partner in the profits.

Me: Habib, this is how it's going to go from now on because you can't be trusted. From here on out you are not in control of anything anymore. I'm going to be in complete control of the family assets and pay myself back the money I've spent and will spend. After I've paid myself back from all the money I have loaned to you and the family, I will give you half of the profits in any developments I do with the family assets.

Habib: I realise I messed up. Take it all. Just whenever you're utilising family assets at your discretion, think of me as your partner "fifty-fifty." The ATO would've taken everything if it wasn't for you. I'd rather surrender everything to you, my brother, than to the ATO. Just after you've paid yourself back, 'think of us when you use the assets'."[35] [emphasis added]

• [42] It is difficult to believe that Habib was so obsequious, and that Jason was so imperious. The language is not the language either brother uses. I raised the air of unreality of this account of the conversation with counsel for Jason. Counsel agreed that the exchange as recorded in the affidavit is not in the language used by either brother and was not relied on unless otherwise mutually known and established.[36]
• [43] And then, after Habib sent Jason a draft of the Family Agreement, there were, according to Jason, several conversations between the two brothers. Those conversations are alleged by Jason to include the following exchange:

"146 After Habib sent the draft agreement to me, we had several conversations where I asked him about the meaning of certain words and phrases which appeared in the draft agreement.

1. In relation to the meaning of 'accumulated', our conversations included the following exchange:

Me: Habib, you can't say that you have 'accumulated' all the properties. They're not all yours. You don't own all of them.

Habib: Jason, I agree, but you have to understand, Habchi Holdings is responsible for the debt associated with all the property. Your house at 64 Tarragindi Road, although you're doing the repayments, I'm still liable for the debt. Just like a bank, this is my security for the line of credit. If you don't pay the $700,000.00, then the properties should become mine. We have a prior agreement that was signed by you, my father and yourself which determines the exactly [sic] property split. You have got that document that justifies your case in the property split and I have got one here, in case you don't follow through with your agreement or you didn't do what you're supposed to do and contribute your share of the 700,000 to the line of credit.

1. In relation to the $700,000.00 figure referred to as 'JH cash paid', our conversations included the following exchange:

Me: Habib, what is with the $700,000 figure? It's a lot more than that.

Habib: Jason, what are you worried about? We are surrendering everything to you. You can offset everything you spend to pay yourself back.

1. In relation to distributions from developments, our conversations included the following exchange:

Me: Habib, I can't make you a fifty-fifty partner in everything I do. I do things separate from you, I run my own business and do my own developments.

Habib: Jason, I know. Stop getting caught up in the detail. It's fine. 'It is all at your discretion'. All of the assets are at your disposal so you can pay yourself back. Once you do, just think of me as your partner when you do developments with the family assets and you can distribute any profits at your discretion.

1. I then replied to Habib's email which attached the draft agreement saying, 'that's fine'."[37] [emphasis added]

• [44] The time span between Habib sending of the draft Family Agreement to Jason and Jason's 'that's fine' email is only 35 minutes. In that short time span the two men, according to Jason, participated in several conversations. The detail of the conversations did not make it into their emails at the time. The conversations are not referred to at all in the emails. The conversations were not referred to at any time until Jason filed his third affidavit in February 2025 - more than a decade later.
• [45] The language Jason says was used in his affidavit is quite inconsistent with the language both brothers used. And the air of unreality extends to the last comment attributed to Habib: "Once you do [i.e. pay yourself back], just think of me as your partner when you do developments with the family assets and you can distribute any profits at your discretion".
• [46] The air of unreality pervades Jason's versions of the exchanges between him and his brother. I do not accept those accounts as accurate or even as approximately accurate.
• [47] The same applies to Habib's version of the exchanges between himself and Jason. Habib gives an account of conversations which suffers from a similar air of unreality.[38]
• [48] Jason and Habib did not impress as witnesses. Both yelled a lot in the witness box. Both allowed their emotions to get the better of them. And both were willing advocates for their own cause. As the submissions for Jason explained:

"The evidence of both Habib Habchi and Jason Habchi will not be very useful in resolving the contested issues of fact. A decade has passed since the key events occurred and both were emotional when giving evidence. Both were advocates for their own case. This is unsurprising in a family dispute involving family related issues.

The Court would act on their evidence where it is appropriately corroborated. In this case, that corroboration comes from the contemporaneous documents - those documents are the lodestar for resolving the evidential conflicts."[39]

• [49] For those reasons, I am reluctant to act on the evidence of either brother unless it is corroborated by a contemporaneous document. For those reasons also, I do not accept Jason's evidence as to these conversations at the time of the ATO settlement or on 30 September 2014.
• [50] Even if the court were persuaded that the conversations had occurred, those pre-contractual conversations do not comprise admissible evidence that can be used in the interpretation of the Family Agreement.[40]
• [51] There was an element of pointlessness to the melodrama that played out in the witness box over seven days. I will come to the reasons for that pointlessness at the end of this Part.

• [52] The focus of the case is clause 6 of the Family Agreement. That clause is as follows:

"In exchange [for the transfer of control][41] [Jason] will make [Habib] a partner 50-50 for any development or property purchase from the date this agreement is executed, including the property at Stanley Street, Indooroopilly development."

• [53] For Jason it is submitted that clause 6 should be properly interpreted as follows:

...after Jason had been repaid what he was owed, Habib was entitled to participate 50-50 (a profit share) in:

(a) Lantona's proposed Indooroopilly development; and

(b) any property developments undertaken by Jason in which he used the Family Agreement Properties.[42]

• [54] There are three problems with that interpretation. The first is, perhaps, a minor temporal quibble. Jason argues that Habib's entitlement to a 50:50 share applies "after Jason has been repaid what he was owed". Nothing in the Family Agreement justifies the entitlement being delayed in that way. The basic bargain is that:

(a) Jason is to immediately, "(o)n execution of this agreement", have full control of the assets and income;

(b) Jason is to offset the $1.1 million and is to do so 'at his discretion' - that is at any time; and

(c) in exchange, Jason is to make Habib a "partner 50-50" in Jason's property developments, including the Indooroopilly development that was presently underway,[43] and was to do so "from the date this agreement is executed".

• [55] None of that is consistent with the notion that Habib's entitlement was to be delayed until Jason was repaid. Jason may have exercised his discretion to discharge the $1.1 million debt relatively quickly, or he may have exercised the discretion to leave the sum, or some part of it, outstanding for years. He had an open discretion about that. But the agreement to give the 50:50 interest applied immediately on the signing of the Family Agreement.
• [56] Counsel for Jason went further and argued that the proper interpretation of clause 6 is that Habib's entitlement to any share in a "development or property purchase" was subject to Jason being repaid in full.[44] I do not accept that interpretation. The introductory words, "[i]n exchange" do no more than indicate that Jason's entitlement to full control of the assets and income, and his ability to offset the $1.1 million at his discretion, which is given in exchange for the promise to make Habib a 'partner 50-50' in the developments. There is also the practical problem that Jason's entitlement to offset the $1.1 million was at his discretion. That means that he could delay paying himself out completely, perhaps leaving a nominal sum outstanding, and by that means postpone the 50:50 arrangement forever. In any event, that interpretation ignores the words emphasised in this part of clause 6: "a partner 50-50 for any development or property purchase from the date this agreement is executed".
• [57] Second, Habib's entitlement was to be "a partner 50-50" for any development or property purchase from the date the agreement was executed, including Indooroopilly. Nothing was said about Habib's interest being a mere profit share. There is no reason to adopt anything other than the ordinary literal meaning of the words "a partner 50-50". The reasonable person, and the ordinary businessperson, would have read those words as meaning what they said.[45] Indeed, the context is that both parties (with their sister) had previously operated the Farmer Charlies business as a partnership.
• [58] Third, there is no rational reason to read the words "any development or property purchase" as qualified and limited to only those property developments undertaken by Jason in which he used the family properties. That qualification is not even hinted at in the plain words of clause 6. And adding that qualification requires that the word "" be ignored in the expression " ".

"It was objectively improbable that the parties intended [the agreement to extend] to "any property development or purchase". Creating an extremely broad relationship between Jason and Habib at a time when they were doing their own things and Habib was living overseas[46] is objectively unlikely to have been their intention - that was not a circumstance that needed to be addressed. It would have also brought about a calamity of results in terms of (Jason in particular) dealing with lenders and borrowers in connection with operating Brisbane Builders (which by September 2014 had been operating since 2008)."[47]

• [61] In my view, that approach of weighing what is perceived to be "objectively improbable" is inconsistent with the authorities discussed above. Issues of contract interpretation are not approached by making an assessment of what is "objectively improbable". Such an approach is hazardous. It puts aside the primacy of the text and substitutes for that approach a broad assessment of the probabilities of what the parties may have intended. Describing the process as 'objective' does not sanitise it.
• [62] The authorities discussed above are clear that:

(a) it is necessary to ask what a reasonable businessperson would have understood the language used by the parties to mean; and

(b) ordinarily, this process of interpretation is possible by reference to the contract alone; and

(c) if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances cannot be adduced to contradict its plain meaning.[48]

• [63] It is not a legitimate approach to acknowledge those principles and to then, in effect, put them aside in favour of an interpretation process that involves a broad, necessarily subjective assessment of the intentions of the parties that were 'objectively probable' and those that are 'objectively improbable'.
• [64] Similarly, it is not consistent with the principles discussed to approach the contract interpretation exercise by looking at the possible consequences of one interpretation in order to determine what is objectively unlikely to have been the parties' intention.[49]
• [65] Applying the principles explained above, considered in its context the language used in the Family Agreement has a single, clear meaning. A reasonable businessperson would have understood the language used by the parties to mean what the words actually conveyed, namely that the 'partners 50-50' arrangement applied to "any development or property purchase" undertaken by Jason from the time of the execution of Family Agreement. The words are not qualified and the approach of counsel for Jason involves a re-writing of the Family Agreement so as to add a qualification that does not appear in the document.

• [66] Does the context, or the objective surrounding circumstances, displace the ordinary grammatical meaning of the language used?
• [67] Nothing in the circumstances external to the Family Agreement requires that the words "any development or property purchase" be read as if limited to only those property developments undertaken by Jason in which he used the family properties. When the Family Agreement was struck there was only one specific development in contemplation - the Indooroopilly project. However, the Family Agreement expressly envisaged that other developments may come to be embraced by clause 6. Nothing in the express words used by the parties limited the further development projects. Of course, it is implicit that the arrangement was able to be determined at will.
• [68] The submissions on behalf of Jason view the prospect of clause 6 embracing other property developments as unlikely to have been intended. That appears to be because the perspective of the submissions on behalf of Jason was that the 50:50 arrangement was a profit sharing arrangement.[50] But the agreement to be "a partner 50-50" meant that both partners would jointly share in any profit but would also be jointly liable if the venture made a loss. And, as events proved, both parties accepted that the 50:50 arrangement was determinable by either party on giving reasonable notice. And both parties expressly contemplated that the 50:50 arrangement extended beyond the Indooroopilly development. As events turned out the Indooroopilly development was the only development where the properties listed in the Family Agreement were used as security. Yet the parties later corresponded with each other on the basis that the developments at Stones Corner and The Gap were comprehended by the 'partner 50-50' arrangement.
• [69] It is important to be careful about having recourse to what are described as the objective surrounding circumstances, that is, the events, circumstances and things external to the Family Agreement. Rather than pointing to anything specific in the surrounding circumstances, Jason's submissions appeal, in a broad way, to the genesis and background to the Family Agreement.[51] To approach contract interpretation in that broad way risks subverting and diluting the text, and perhaps doing so in circumstances where the text is unambiguous or susceptible of only one meaning. There are very real limits to the extent to which grammatical meaning can be displaced by contextual considerations. Where the text is clear, caution is needed before embarking on a process that, in effect, re-writes the text because of perceptions of the surrounding circumstances. There is no justification for 'judicial rewriting' of an agreement.

• [72] Further, there are problems in Jason's argument that the surrounding circumstances can be looked at it a broad way to displace the ordinary grammatical meaning of the language used in clause 6. An example can be given of the problem of this approach and the different perspectives. Jason relies on Habib's evidence that in the lead up to the Family Agreement each of Habib and Jason were 'doing their own things' - meaning that they were independently going about earning a living and that Habib was frequently overseas. But that could equally be a good reason for Habib becoming a 'silent partner' in the Indooroopilly and other property developments. The Family Agreement did not give Habib any role in the property development projects. That may well have been a deliberate choice.
• [73] For Jason it is argued that the ordinary grammatical meaning of the language used cannot have been intended because Jason's building business would be affected. This is something of a 'straw man' argument.[56] Habib has never contended that the 'partner 50-50' arrangement extended to Jason's building business. The language used, namely, "any development or property purchase" [emphasis added] does not extend that far.
• [74] There are three further problems with Jason's approach to the interpretation of the Family Agreement. The first is that Jason's counsel urges the court to accept that the words "any development or property purchase" should be interpreted as if it read "any development or property purchase using the family properties" [emphasis added]. However, the concept of 'family properties' is contrary to the express words of the Family Agreement. Clause 1 expressly says that "HPH [i.e. Habib] has accumulated property assets since 1999". Clause 2 uses the expression "HPH Properties Accumulated". And so, the words that Jason seeks to add to the clause would be inconsistent with the words used in the Family Agreement.[57]
• [75] The second problem is that, if the further property developments were required to involve the use of the family properties, the agreement does not identify what constituted the 'use' of the family properties. And no discussions are said to have mentioned the issue. Presumably, the family properties might be 'used' if all of them, or perhaps some of them, constituted security that supported a loan facility used by the property development project. But, would the family properties be 'used' if they were used for loan facilities which enabled a profit to be generated on one project, which was then used to develop a second and third project?

• [77] I adopt the ordinary grammatical meaning of the words in the Family Agreement. I am not persuaded that anything in the objective surrounding circumstances displaces the ordinary grammatical meaning of clause 6. The words "any development or property purchase" should not be read as qualified or limited to property developments that use the 'family properties', or the 10 properties specified.

• [78] There is a contest as to whether clause 6 of the Family Agreement is sufficient to establish a partnership.
• [79] Section 5(1) of the Partnership Act 1896 (Qld) defines what is meant by a partnership:

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

• [80] Section 6 of the same Act prescribes some rules for deciding whether a partnership exists:

(1) In deciding whether a partnership does or does not exist, regard must be had to the following rules -

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

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

(c) the receipt by a person of a share of the profits of a business is prima facie evidence that the person is a partner in the business, but the receipt of such a share, or of a payment contingent on or varying with the profits of a business, does not of itself make the person a partner in the business, and in particular -

(i) the receipt by a person of a debt or other liquidated amount by instalments or otherwise out of the accruing profits of a business does not itself make the person a partner in the business or liable as such;

(ii) a contract for the remuneration of a servant or agent of a person engaged in a business by a share of the profits of the business does not itself make the servant or agent a partner in the business or liable as such;

(iii) a person being a deceased partner's child or spouse, and receiving by way of annuity a portion of the profits made in the business in which the deceased person was a partner, is not by reason only of such receipt a partner in the business or liable as such;

(iv) the advance of money by way of loan to a person engaged or about to engage in any business on a contract with that person that the lender is to receive a rate of interest varying with the profits, or is to receive a share of the profits arising from carrying on the business, does not of itself make the lender a partner with the person or persons carrying on the business or liable as such;

(v) a person receiving by way of annuity or otherwise a portion of the profits of a business in consideration of the sale by the person of the goodwill of the business is not by reason only of such receipt a partner in the business or liable as such.

See section 82 for an additional rule applying to acts preparatory to the registration of incorporated limited partnerships.

(2) A contract mentioned in subsection (1)(c)(iv) must be in writing and signed by or on behalf of all the parties to the contract.

(3) This section does not apply in relation to an incorporated limited partnership."

• [81] Section 6 is really directed to ensuring that an agreement whereby property is shared, or an agreement whereby profits, or gross returns, are shared, will not, of itself, decisive as to whether there is a partnership in existence.
• [82] Returning to section 5, the three elements of a partnership are:

(a) the carrying on of a business;

(b) the carrying on of that business 'in common'; and

(c) a view to a profit.[60]

• [84] Jason was conducting a development business as at the date of the Family Agreement. The Family Agreement acknowledges that by speaking of "any development or property purchase...including the property at Stanley Street, Indooroopilly development...[and] recover and deduct cash at end of development before distribution". Future developments appear to have been contemplated.[61] And, in the case of the Indooroopilly development, Jason appears to have already commenced the development or at least the planning of the development.[62]

• [85] A silent or sleeping partner is still a partner.[63] It is not essential that all of the partners take an active role.[64] It is true that, as a general rule, each partner in a partnership contributes property, skill or labour but that is not an essential feature of partnership.[65] A person who contributes property without labour and has the rights and liabilities of a partner is usually termed a 'sleeping' or 'dormant' partner. A sleeping or dormant partner may, however, contribute nothing.[66]
• [86] The evident intention of the Family Agreement was that Habib would assign control of the 10 properties to Jason, and that Jason would continue his management of the property developments.
• [87] It is clear that, whether the properties are regarded as properties accumulated by Habib, or principally by Habib, (as Habib contends) or were 'family properties' (as Jason contends), Habib was contributing something substantial by assigning to Jason control over the 10 property assets and the income from those properties.[67] The properties could be used as security by Jason once he had control of them. That is what he did.

• [88] Plainly, Jason and Habib intended that a profit would be made from the Indooroopilly development and from any subsequent developments. The Family Agreement itself recognises that profits may be made and distributed.
• [89] And so all three elements of a partnership exist, and the parties expressly agreed that Jason would "make [Habib] a partner 50-50 for any development or property purchase from the date this agreement". The declared intention of the parties is informative, and the law should recognise the rights and obligations that the parties agreed and voluntarily assumed.[68]
• [90] And, as it turned out, both parties recognised that Habib had what was in effect a partnership interest in three property developments: the Indooroopilly development, and developments at Stones Corner and The Gap. They subsequently corresponded about terminating the partnership arrangement.[69]

• [91] It is necessary to consider Jason's arguments against there being a partnership.
• [92] First, reliance is placed on Christian v Cooper.[70] In that case Bowskill J rejected the plaintiff's submission that the parties' gambling activities could be characterised as a partnership. The focus of her Honour's decision was the second of the section 5 elements - whether the parties were carrying on their business 'in common'. Her Honour came to this conclusion:

"But even if the activity is appropriately characterised as carrying on a business, I am not persuaded that Mr Cooper and Mr Christian were in any sense carrying on such a business "in common" within the meaning of s 5 of the Partnership Act, such that the relationship between them could aptly be characterised as a partnership. There was not the requisite mutuality of rights and obligations between them regarding the gambling activities they were engaged in, such as to conclude that the arrangement bore the indicia or hallmarks of a partnership."[71]

• [93] Her Honour's reasons for that conclusion included these findings:

(a) Mr Cooper brought certain gambling software to the arrangement and retained control of that software for his own gain;

(b) Mr Christian performed labour intensive tasks and was remunerated for it by receiving a share of the profits from the gambling activities;

(c) there was no legal or contractual obligation on either Mr Cooper or Mr Christian to continue doing the work they each undertook to do; it was a mutually beneficial arrangement while it lasted; but there was no obligation on either of them to continue;

(d) the arrangements for sharing the winnings from time to time were reached on an ad hoc basis, and in most respects reflected what Mr Cooper was prepared to offer, by way of remuneration to Mr Christian for the work he contributed to the system;

(e) there was an imbalance between Mr Cooper and Mr Christian, in the sense that Mr Christian was subordinate to Mr Cooper in the arrangement, rather than being an equal "partner";

(f) mostly the expenses were not shared, but were borne by and controlled by Mr Cooper;

(g) the arrangements reached from time to time for Mr Christian to receive a share of winnings were more in the nature of remuneration for work done, rather than indicative of the relationship being a partnership.[72]

• [94] Thus, it is difficult to see how Christian v Cooper assists Jason's arguments in this case. In this case the parties expressly agreed they were to be 'partners 50:50'. In Christian v Cooper there was no such express agreement. Mr Christian's case was that in the circumstances the parties operated in partnership.
• [95] For Jason it is argued that:

"[The Family Agreement] lacked the critical feature of mutuality of rights and obligations between Habib and Jason. Whatever might be said about Jason becoming Habib's agent, the Family Agreement did not appoint Habib to be Jason's agent; in fact, it was the contrary. At a fundamental level there was no common legal burden or coordinate liabilities."[73]

• [96] The Family Agreement itself expressly acknowledged a mutuality of rights and obligations by speaking of the brothers being 'partners 50:50'. There is no evidence that either brother did not understand the meaning of that concept, or that they had something other than a partnership in mind. Certainly, it was envisaged that Habib would be a 'silent' partner, but that does not exclude the prospect of their being a partnership.
• [97] As to agency, the Family Agreement contemplates that:

(a) where Jason expends any "personal Cash" he has a discretion to offset that expense against the bank value of the 10 properties or recover and deduct cash at end of the development, and before any distribution; and

(b) on completion of any development Jason can distribute (presumably profits) at his discretion.

• [98] Beyond that, the Family Agreement is silent about who has the right to conduct the property development, but the aim of the Family Agreement is to make Habib a 50:50 partner in the property developments. In any event, a dormant or sleeping partner is bound by the acts of the active partners where they are within the scope of their authority and in the ordinary course of the partnership's business.[74]

• [99] Second, Jason points out that Habib's entitlement to income or distributions was in Jason's discretion. Jason argues that this feature is impossible to reconcile with the mutuality at the heart of the relationship between partners and a partner's proprietary interest in the right to income. According to the argument, it is one thing for partners to agree that distributions or draws occur through mutual agreement; it is another thing to repose that power in a single partner.[75]
• [100] I am not convinced that it is such a radical thing for one partner's income or drawings from the partnership to be dependent on the discretion of another partner. The drawings of many professional partnerships are often dependent on the decisions of a managing partner or a partnership committee. Often salaried partners are paid a fixed remuneration, rather than a share of profits, and that salary may be determined by a managing partner or by a committee.
• [101] Underlying this submission is the idea that partners make mutual or joint decisions. That is not essential. The general principle is that a majority decision of the partners prevails, but that is subject to exceptions and to a different express or implied agreement.[76] Room for the general principle requiring majority decisions is rather confined in a context where there are only two partners, or where the partners contemplate that it is one of the two partners who is responsible for the management of the enterprise.

• [102] Jason submits that it was important that Habib was not entitled to and in fact took no part in the business of the putative partnership. Nor did Habib have any a say in the ordinary matters of the partnership business nor a veto in respect of the nature of the business it carried on.
• [103] This argument relies on s 27(1)(e) and (h) of the Partnership Act 1896. Section 27(1) specifies that the interests of partners in the partnership property and their rights and duties in relation to the partnership, must be decided by certain rules. Two of those rules are that:

(a) every partner may take part in the management of the partnership business; and

(b) any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners.

• [104] But those rules are subject to an express or implied agreement between the partners. Thus, the rules in s 27 operate as default rules that apply if there is no other express or implied agreement. Here, the partners appear to have accepted that it was Jason who assumed the conduct of the property development. Habib was the silent or sleeping partner. Jason's submissions seem to assume that the law will not recognise a partnership where one partner is entrusted with the management whilst the other 'sleeps'. In fact, there are many different types of partnerships that are recognised, including those where the partners perform different roles.

• [105] Jason argues that, if a partnership existed, the capital of the partnership (and thus the property) would be illusory. Jason contends that no property was contributed to the partnership. But he accepts he had the right to control the income and proceeds from the real properties listed in it - and that Jason was given full discretion to apply that income and proceeds as he determined in accordance with the Family Agreement.
• [106] Once again, the problem is Jason's preconception as to what a partnership looks like. An injection of capital is not an essential feature. In any event, the overall scheme of the Family Agreement was that Jason would pay the ATO, control of the accumulated properties would be transferred to Jason so that he could secure repayment and that they each would be partners 50:50 in Jason development projects. The partnership was one component of the brothers' future commercial relationship.

• [107] Habib contended that the property at 2 City Road in Beenleigh was a Family Agreement property. Jason denied that and argued that Habib's contention cannot coincide with the deliberate decision to use a company and trust structure to acquire the property at 2 City Road. A trust cannot be a partner in a partnership[77] although a trustee personally can be a partner. Jason's contention was that that is objectively unlikely here.
• [108] It is right that the City Road property needs separate consideration. It is not one of the 10 properties listed in the Family Agreement. That is because it was acquired in July 2017, some three years after the execution of the Family Agreement. Except in a peripheral way (discussed below) the status of the City Road property does not assist in determining whether the parties entered into a partnership in 2014.
• [109] However, Jason concedes that the effect of conversations between the two brothers was an agreement that in respect of City Road they would be 50/50 partners in a real sense.[78]
• [110] The City Road Property is discussed further in Part 5A below.

"...it is difficult to impose any relevant fiduciary duty of the kind customarily associated with a partnership. Neither Habib nor Jason were dedicating their entire time to the alleged "firm". There was no proscription on Jason continuing his own business and interests. Jason was expressly permitted to act in his own interests."

• [112] Again, this argument suffers from some preconceptions about what a partnership looks like. A partnership need not involve the partners contributing their entire time or all of their efforts to the partnership. A partnership can involve a single adventure or undertaking.[79] Here, the parties contemplated that both Habib and Jason would have their own separate interests, including Jason's business as a builder. That is why the 'partners 50:50' arrangement was tied to property developments.[80]

• [113] Ultimately, Jason contended that the business relationship should be considered in this way:

"The Family Agreement is one that attracts purely contractual obligations (although the jurisdiction for relief may involve equity). The Family Agreement does not resemble a joint venture as traditionally described. Ultimately, it is unnecessary to categorise the Family Agreement into existing legal taxonomies beyond recognising that it is a contract (albeit an unusual one)."[81] [emphasis added]

• [114] I reject that submission. The parties themselves regarded the relationship as a partnership. They used the expression 'partners' in the Family Agreement and subsequently. Both brothers were relatively experienced in business when they signed the Family Agreement. They understood what a partnership was.
• [115] Thus, in answer to Question 2, the proper interpretation of the Family Agreement is as stated in this Part. On its proper interpretation, the Family Agreement created a partnership between the two brothers.

• [116] There was an element of pointlessness to the arguments about whether there was or was not a partnership between the two brothers. Assume for present purposes that the court were to put aside the fact that the two brothers expressly agreed to be 'partners 50-50'. Assume also that the circumstances justified the finding that there was no partnership. In that situation there was still a legally binding contract between the parties. That was conceded. See, for example, the emphasised aspects in the quote above.
• [117] Further, it was clear on the evidence that:

(a) the parties regarded themselves as bound by their bargain;

(b) the bargain entitled Habib to 50% of the profit earned by Jason; and

(c) their bargain came to encompass the property developments at Indooroopilly, Stones Corner and The Gap.[82]

• [118] And so, if, contrary to the findings above, there was no partnership, the two brothers entered into a contractual relationship pursuant to which Habib was entitled to 50% of the profit earned by Jason from the three projects.
• [119] It is true that the express terms of the Family Agreement recorded that: "On completion of any development [Jason] can distribute at his discretion".[83] But that can hardly mean that Jason was entitled to postpone forever exercising that discretion so as to defeat Habib's right to share in the profits. Such an interpretation would make the bargain illusory.
• [120] It is important to note that the Family Agreement was not intended to exhaustively set out the terms of the agreement between the two brothers. That is clear on its face. For example, the Family Agreement did not have an expiry date or any termination provisions. And so, it has been necessary to imply a term that the Family Agreement, and any partnership or other arrangement based on the Partnership Agreement, was determinable at will.
• [121] The non-exhaustive nature of the bargain means that the court can imply a term that is necessary for the reasonable or effective operation of the contract. As Deane J explained in Hawkins v Clayton:

"The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. That general statement of principle is subject to the qualification that a term may be implied in a contract by established mercantile usage or professional practice or by a past course of dealing between the parties."[84] [emphasis added]

• [122] The court can and should imply that the discretion to distribute should be exercised within a reasonable time. Such a term is necessary for the reasonable or effective operation of the agreement. Indeed, even if the contract were complete and expressed in a formal document, there is good reason for thinking that such an implied term satisfies the five requirements in BP Refinery (Westernport) Pty Ltd v Shire of Hastings.[85]

Part 3: Question 3 - Breaches and Termination

• [123] Question 3 is as follows: Having regard to the answer to the question above:

(a) was the Family Agreement breached by anyone?

(b) further or alternatively, was the Family Agreement terminated by anyone?

(c) further or alternatively, is anyone now entitled to terminate the Family Agreement?

• [124] Soon after the Family Agreement was executed, control of the 10 properties listed was given to Jason. On 30 September 2014 and 3 October 2014, powers of attorney were given by Habib and his wife, Moni, in favour of Jason. On 8 October 2014 Jason arranged for his business, Brisbane Builders, to pay the first instalment of $400,000 to be paid to the ATO. A year later, Jason arranged for Brisbane Builders to pay the second instalment of $400,000 to the ATO.
• [125] Jason sold some of the properties. In February 2015, he sold Property 3 (47 Ellen Street), which was in his own name, for $602,000. In June 2015, using Moni Habchi's power of attorney, Jason sold Property 4 (115 Main Greenswamp Road) for $450,000.[86] In June 2016, again using Moni Habchi's power of attorney, Jason sold Property 5 (13 Quarry Road) for $465,000.
• [126] The total for the sales of Properties 3, 4 and 5 was $1,517,000. The recovered sum would have been slightly less. That meant that Jason had 'offset' more than enough to recoup the sum of $1.1 million referred to in clause 5 of the Family Agreement. Subject to any amounts owing pursuant to clause 5, and possibly the second ATO instalment of $400,000. A rough equilibrium had been achieved by 2016.

• [127] Jason's dealings with Property 6 (538 Sherwood Road) were unorthodox. That property was first registered in the name of Habchi Holdings Pty Ltd, one of Habib's companies. On 7 May 2015, Jason emailed Habib and said: "I will transfer Sherwood rd to Jayhab Developments and will make you 50% shareholder in this company." Habib replied with, "Ok". Then, in June 2015, Jason arranged the transfer of that property to Jayhab as trustee for the Jason H Family Trust for $625,000.
• [128] Thus, the effect of the transfer was to transfer the beneficial ownership in the property from Habib's family trust to Jason's family trust.
• [129] Habib had agreed to a transfer the property to a company in which he was to hold 50% of the shares. In so agreeing Habib can hardly be taken to agree that he would simply hold 50% of the shares in a company that held only a bare legal interest with the beneficial interest being held by Jason's family trust.
• [130] But even the promise to make Habib a 50% shareholder does not seem to have been honoured. Jason seems to implicitly admit that he promised to make Habib a 50% shareholder in Jayhab Developments without having any intention to do so and merely to placate him:

"I understood that I was entitled to do what I wanted with 538 - 540 Sherwood Road under the Family Agreement, but I kept Habib in the loop anyway...

Habib had been at me for some time, continuously asking me to make him a 50% shareholder in Jayhab. I was reluctant to make Habib a shareholder in Jayhab, because it owned 59 Cook Street, which had nothing to do with Habib. I did not want Habib to think that, if he became a shareholder in Jayhab, that he would then own or control or have an interest in 59 Cook Street. I was also of the understanding that nothing in the Family Agreement required me to make Habib a shareholder in Jayhab. Despite all that, I sent the email on 7 May 2015 telling Habib that I would make him a shareholder in Jayhab in an attempt to keep him happy and maintain our relationship.

On 7 May 2015, I also exchanged emails with Stephen Haines of West End Tax, who was my accountant at the time, in relation to making Habib a 50% shareholder in Jayhab.

Ultimately, I did not end up making Habib a shareholder in Jayhab at this time. Habib had stopped asking me about it and I eventually forgot about it."[87] [emphasis added]

• [131] In any event, as I have explained, Jayhab Developments Pty Ltd held the property as trustee. The beneficial ownership was held by Jason's family trust.
• [132] The whole episode does Jason no credit. He was not candid with his brother. He advised of a transfer of this property not to a third party but to a related entity. Rather than disclosing that he was transferring beneficial ownership to his own family trust, he said he was transferring the property to a company in which they were both to be 50% shareholders. Habib consented to and authorised the transfer on that basis.
• [133] Jason's submissions say that: "(t)he transfer of 538-540 Sherwood Road to Jayhab as trustee was a paper transaction: no money changed hands". I am not sure what that means. There is no lesser category of legal transfer that qualifies merely as a 'paper transaction'. The effect of the transfer was to put the property into Jason's personal assets. Even on his assertion that the 10 properties were family assets, he was securing the property for his own personal benefit.
• [134] Certainly, Jason had control of the properties. And clause 5 of the Family Agreement entitled him to recover (or 'offset') amounts he was owed to an amount of $1.1 million. Under clause 7, Jason was also entitled to recover (or 'offset') any 'personal Cash' expenditure. If that was what he was doing, he was not doing it explicitly. The result is that Jason has procured a benefit for himself.
• [135] It cannot be said that the Property 6 transaction was a breach of any explicit term of the Family Agreement. That agreement vested Jason with control of the assets, and he was entitled to 'offset' under clause 5 or clause 7. That is what Jason says he was doing - securing the property as a reduction for the amounts owed to him.[88] The entitlement to an offset is an issue for an account. Certainly, Property 6 was not part of the partnership because it did not involve one of the property developments.

• [136] In about 2017, Lantona completed the Indooroopilly development, a 22-unit residential complex known as 'The Maddison'. Mr Hanna and Jason contributed funds to this development in equal proportions. Jason was able to do so because he had sold Properties 3, 4 and 5. He had, in effect, paid himself back.[89]
• [137] The Indooroopilly development was profitable.[90] But no profits were distributed. Instead, the profits were used for Lantona's future developments.
• [138] Jason was entitled to exercise his discretion not to distribute the profits from the Indooroopilly development immediately following its sale. Clause 8 of the Family Agreement gave him that discretion. That meant that Habib had a vested interest in Lantona's next projects.[91]
• [139] At roughly the same time Lantona commenced a property development at Zillah Street, Stones Corner. The Indooroopilly profits were used to fund, in part, the purchase of the Stones Corner site and that development. The balance of the funding required was arranged by Mr Hanna.[92]
• [140] At about the same time another Lantona company, KJ Lantona Pty Ltd,[93] acquired a property development site at The Gap. A bridging loan for this development was secured by Properties 9 and 10 (7 and 9 Mine Street). Otherwise, the properties were not used as security for the three developments.[94]
• [141] In about 2020, when all three developments were complete, the Lantona profits were distributed to Mr Hanna and Jason. Jason has not accounted to Habib for any of those profits.

• [142] Apart from those three property developments, Jason also participated in three further property developments. The first is a 13-townhouse residential property development called Newhampton at 16 - 18 Thurlow Street, Newmarket. Jason participated in that project from 2020 to 2024 with two others, Mr Hanna and Mr Robert Machin. Jason says that:

"I did not contribute any funds for the purchase of the land or the development of Newhampton. No properties listed in the Family Agreement were used as security for any finance to purchase the land or fund the development. Lantona was not involved in this project.

The profits from Newhampton were split equally between Andrew, Robert, and me. I believe that Habib is not entitled to a share in any profits under the Family Agreement because none of the properties listed in the Family Agreement were used as security for any finance to purchase the land or fund the development."[95]

• [143] The second further property development commenced in about 2022, a special purpose company, JH Lantona Pty Ltd, acquired a property at 1 Lilla Street, Woody Point in Queensland. Construction of the 10-unit residential complex known as 'Echo on the Bay' finished in 2024. Sales of the units are yet to be completed. Brisbane Builder provided the funding to JH Lantona.
• [144] The third project is on-going. Between 2016 and 2022, Lantona 2 acquired adjacent properties at 133 Eagle Terrace, 4 Grimes Street and 9 Ridley Street in Auchenflower, Queensland. Jason contributed about $200,000 of his own money, but otherwise the funding to purchase these properties was provided by Mr Hanna and his family. According to Jason, none of the properties listed in the Family Agreement were used as security for any finance to purchase the Auchenflower properties.
• [145] Jason's evidence is that Lantona intends to develop these properties, through Lantona 2 as the special purpose vehicle, into a mixed-used development consisting of 36 residential apartments and commercial office spaces. Construction is yet to commence. Jason says that Habib will not be entitled to a share in any profits because:

(a) none of the properties listed in the Family Agreement were used as security for any finance to purchase the properties; and

(b) he did not and does not intend to use any of the properties listed in the Family Agreement as security to fund the development.

• [146] Because of the proper interpretation of the Family Agreement (discussed above) I do not accept that submission. However, for the reasons discussed below, the partnership (or other arrangement) was terminated prior to the commencement of these three most recent developments.

• [147] Having considered the performance of the Family Agreement, it is necessary to return to the question. Question 3 asks whether the Family Agreement was breached by anyone. With one exception, I am unable to say. Neither party has properly articulated any alleged breach by the other. So, there is no proper basis for the court to adjudicate whether the Family Agreement was breached by either party.
• [148] As explained, there is one exception. Partners are required to account to the other. It is a basic requirement.
• [149] Section 31 of the Partnership Act 1896 provides that partners are bound to render true accounts and full information of all things affecting the partnership to any partner or his or her legal representatives. Section 32(1) of that Act provides that every partner must account for any benefit derived by the partner without the consent of the other partners from any transaction concerning the partnership, or from any use by the partner of the partnership property name or business connection. And section 42 of the Act provides that on the dissolution of a partnership every partner is entitled, as against the other partners in the firm, and all persons claiming through them in relation to their interests as partners, to have the property of the partnership applied in payment of the debts and liabilities of the partnership, and to have the surplus assets after that payment applied in payment of what may be due to the partners respectively after deducting what may be due from them as partners to the partnership.
• [150] Certainly, by 3 February 2019 Jason understood that Habib was requesting the calculations and a distribution. He understood that Habib was requiring an account of the income, the costs and the profit.[96] At that time, Jason's response (as discussed above) was that Habib would get his profit share once there was a profit to distribute.
• [151] That day never came. The accounting for the three developments was never provided. Through solicitors in 2021 Jason refused to permit inspection of Jayhab's financial records. In that same year Habib's solicitors required an audited financial report and director's report for the financial year ending 30 June 2021. Jason's evidence is that:

At the time, the financial statements for Jayhab were being prepared. While I can't really remember, having reviewed my documents, I think Habib's request for audited financial statements was never followed up or I forgot about it.[97]

• [152] Seven months later there was a follow-up. In February 2022, Habib emailed Jason's accountants and requested copies of Jayhab's financial statements for the financial years ending 30 June 2021 and 30 June 2022. Jason refused to supply the accounts. He says that he instructed his accountant not to provide the financial statements because, "by this time, my relationship with Habib had gotten really bad and I didn't want anything to do with him". Almost instantly that stance produced a counter-productive result. Jason was then copied into a reply email from Habib which accused him of hiding "illegal activity" and being a "thief".[98]
• [153] There was a similarly unproductive exchange in June 2022.
• [154] Some documents, mainly spreadsheets, have been provided. Some were called for and supplied during the course of the hearing. However, there are no documents that show the income, expenditure and profit (or loss) that was earned on the Indooroopilly development. The same applies for the Stones Corner and The Gap developments. Jason's evidence was that all three developments were profitable to some extent.[99] He did not say how profitable. He produced no proper accounting or even a basic explanation of the costs and income and profit.
• [155] In his evidence Jason said that he had been trying to tally up what was owed to Habib since 2018. He also said: "I've given him all the information...".[100] I do not accept that evidence. As explained, Jason refused to supply financial documents. There are no emails or other documents that clearly explain the income, expenditure and profit (or loss) on the three property developments. There is no clarity as to what is owed by Jason to Habib, or vice versa.
• [156] The partnership has been breached in that Jason has failed to properly account to Habib for the profit earned by Jason on each of the three property developments.

• [157] Even if I am wrong about the existence of a partnership, the contractual relationship between the brothers required that, at some reasonable time, Jason exercise his discretion to distribute any profits earned on the Indooroopilly, Stones Corner and The Gap property developments. The Indooroopilly development was completed in 2017. The profit is not known. Jason's decision not to distribute those profits but to instead invest them in the Stones Corner and The Gap property developments is within the wide discretion given to him by the Family Agreement.
• [158] However, the later two property developments have been complete since 2020. Profits for those two developments were distributed to Mr Hanna and to Jason in 2020. It is extraordinary that now, in 2025, no profit has been distributed to Habib and he has not been given an account of what profit was earned on the three developments. Jason's failure to distribute within a reasonable time is a breach of the Family Agreement.

• [159] As explained, I accept the submissions of Jason's counsel that the partnership[101] was determinable at will and notice of termination by either party, so long as it is clear, may be conveyed by conduct or even inferred.[102] Emmett AJA explained the principles in McNicholas v Sarandopoulos:

Notice of intention to dissolve a partnership must be clear and unambiguous. However it is not necessary for a partner giving notice to appreciate its legal effect. Where a partnership for an undefined term is constituted with a degree of informality, any conduct by one partner that results in the other partner being informed of the first partner's intention to dissolve the partnership will suffice. Indeed, notice of intention to dissolve a partnership may be inferred from the conduct of the parties.[103]

• [160] To work out whether the partnership was terminated by Jason or Habib it is necessary to examine the chronology of communications between the two brothers. In examining the chronology, I have disregarded what Habib and Jason said in the witness box about their interactions. For the reasons explained, their evidence was unreliable. Instead, reliance has been placed on the emails between the brothers.

• [161] The Family Agreement was very much alive in May 2017. That is because at this time Habib and Jason exchanged emails in which they argued about the name in which the City Road property should be purchased. Habib requested that Jason authorise his accountant to put the Lantona shares into Moni Habchi's name. Jason replied suggesting that the City Road property be put into and existing or new company name. He also said: "No one is receiving shares in Lantona until I am payed [sic] back for all of the money I have out layed [sic]". Habib responded: "Mate work it out and stop delaying and follow that agreement. Everything very clear". The expression "that agreement" must be referring to the Family Agreement.[104]
• [162] After some further emails Jason responded:

"i've worked it all out.. and you should be [grateful]. If it wasn't for me you'd have lost it all and have absolutely nothing. I have paid every single one of your bills and all your expenses from the day you moved to Lebanon and up until now I am still paying. Leave the Property in Moni's name and sort it out yourself".

• [163] Habib responded: "Do your calculations and follow and honour your agreements".
• [164] Then Habib asked Jason what Jason's calculations were. Jason replied saying he would send the calculations to Habib when Jason got back to his office. Habib replied saying (in a slightly more conciliatory tone):

"Good and if you don't want to put shares in Lantona all you have to do is say so. Just say one word and stick with it. Not good to keep changing your mind. And I am grateful but you got to also move on".

• [165] Then Habib sent Jason an email asking him to send through the calculations. Jason replied saying that: "$1,585,000.00 is what I am owed. Minus 64 Tarragindi Rd 650,000. I am owed $935,000.00".
• [166] Not surprisingly Habib was dissatisfied with being supplied with those three figures. He asked for the breakdown and the details of the money that had been collected from sales. Jason said that there were $1,520,000 in sales and that $400,000 had been 'used' (presumably meaning 'paid') into Lantona. Habib responded: "So what are you owed??????". Jason repeated the figure of $935,000. There were some further email exchanges in which Habib queried the figures and sought a breakdown.
• [167] The email became increasingly terse. Jason sent an email to Habib saying:

You have no idea what you are on about. When I am paid back my money then I will register Lantona. I am currently using family assets to make income to pay off LOC[105] and then pay myself back. After that we can split 50/50. If you do not agree then you take control of the assets.

Go get some independent advice from your accountant or professional and you will understand better so you know that I am talking correct [sic].

You are using the assets for your own benefit. From your past words which are not consistent if you don't register now you will never register (you will change your mind as you have done on many occasions previous). And you are not paying anything back to yourself(.) it is my assets that are paying you and paying the tax debt.

• [169] That was an exchange of emails in May 2017. This was the same year in which the Indooroopilly development was completed, and the Stones Corner and The Gap developments were commenced.[106]
• [170] Also in May 2017 Habib emailed Mr Torbey, the solicitor who witnessed the execution of the Family Agreement. Habib asked Mr Torbey when he was available to "formalise and update agreement executed in your presence in 2014". There was then a meeting between Habib, Jason and Mr Torbey. Mr Torbey subsequently sent brief minutes:

JH has collected $1,520,000 from sale of properties

Rental income from properties being collected to XP since refinance

JH to make decision this Agreement needs to be either:

• [171] Oddly, Jason does not give an account of this meeting and does not even expressly say there was such a meeting.[108] However, it seems to be implicit in his affidavit that there was such a meeting. Neither brother contests what Mr Torbey has recorded. What Mr Torbey has recorded is perfectly consistent with the continuation of the Family Agreement. Both brothers were content with Jason maintaining control over the properties, or at least those that remained, and with the brothers remaining 'partners 50:50' in his property development ventures.
• [172] Jason says that after these exchanges, he was busy with Brisbane Builders, Lantona, and Jayhab's purchase of 2 City Road. He says that he and Habib did not speak in detail about the Family Agreement for another couple of years.[109]

• [173] On 21 September 2017 the two brothers exchanged heated emails. Habib was pressing for a shareholding in Jayhab and Lantona. Plainly, Habib was seeking the shareholding in Lantona pursuant to the Family Agreement arrangement described as 'partners 50:50'. Jason was resisting. Habib called on Jason to "do or split". Jason replied:

I want to be totally disconnected from you. Let's seperate [sic] everything. I don't want any dealings with you anymore.

Let's work out what we owe each other and be totally done with it. It [is] the best thing for everyone[110]

• [174] There are two points to note about this email. The first is that having been given the choice 'do or split', Jason chose 'split'. That was, to use the language of Emmett AJA in McNicholas v Sarandopoulos a clear and unambiguous notice by Jason of his intention to dissolve the partnership. By choosing 'split', and by saying he wanted to be totally disconnected from his brother, Jason was informing Habib of his intention to dissolve the partnership. The second is that it is true that there is a prospective element to the 'split' in the sense that Jason was proposing a separation of their affairs, and a reconciliation as to what was owed. That was so that the relationship could end. What remained was a proper separation of their affairs and a reconciliation.

• [175] The following year, in July 2018, the brothers argued about City Road (discussed below). During the course of that argument, in an email on 5 July 2018, Habib said this:

You did a [good] thing paying tax and u think u own everything because of this

Until u make calculation as per the agreement we signed in Anthony [Torbey's] office you continue to disregard u will always think you topping up

U wanted Andrew to make calculation then u wanted your accountant to make calculation and you never make calculation

You only see your tally but disregard what was surrendered to u

Make proper calculation from the day we signed that agreement and take what is yours

To be honest I don't want you as a partner we are two different people and I will never forget what you said to me

So just do proper calculations and if I owe you anything I do plan to give you ur money

Attached is a copy of the agreement. I have made you 50/50 in everything. All I require is for Q-cool to pay rent or fuck off from city rd so we can earn income from another tenant.[111]

• [177] From that exchange it is important to observe that Habib was seeking a 'calculation'. It seems likely that in fact what he was seeking was an accounting of the dealings with the properties and the 'partners 50:50' arrangement. Perhaps, more accurately given the next step in this chronology, Habib was seeking a pay-out or the equivalent by way of transfer of an apartment or other property.

• [178] On 3 February 2019 there were these angry email exchanges between Habib and Jason:

(a) at 12:09pm, Habib sent an email to Mr Hanna, copied to Jason, requesting the transfer of the title for an apartment and distributions for the balance of apartments (presumably for the development at The Gap);

(b) at 12:59pm, Jason replied saying he and Mr Hanna were not transferring any titles and distributions would be made after all townhouses at The Gap were sold.

(c) at 1:01pm, Habib replied saying:

Tmrw you will transfer Or I rip your fukin head off"

When profits are made I will transfer. Don't threaten me.

(e) at 1.37pm, Habib sent an email to Jason requesting that he assign him a unit in the development at Stones Corner;

(f) at 1:42pm, Jason replied saying: "NOT TRANSFERRING ANY UNITS. YOULL GET YOUR PROFIT SHARE ONCE THERE IS PROFIT TO DISTRIBUTE";

(g) at 1:48pm, Habib replied saying:

"I'm happy to sit down and go through everything with you. I've got all the figures. Let's meet at dads house tomorrow night."

"I don't want to discuss it will be same story as before

You guys cannot make money with my assets and I don't want anything to do with you

Work out and give back properties and make settlement for all and work yourself

Don't tell me wait anymore because that piss me off."[112]

• [179] This exchange illustrates that Habib and Jason were at loggerheads about the final accounting, but it seems to be accepted that Habib had a legitimate interest in both the Stones Corner and The Gap developments. At the least, Habib asserted an interest and Jason responded that Habib would "get his profit share once there was a profit to distribut".

• [180] What then follows is a protracted and angry dispute. Habib required funds and accounting and Jason asserted that he was owed $1.6 million which was required to be paid before any profit could be distributed.
• [181] Both Habib and Jason suggested the appointment of an independent accountant. However, no steps were taken to appoint such a person.
• [182] On 22 August 2019 Habib requested a valuation of Lantona from Jason. The email request 'copied in' Mr Hanna and Jason's accountants. Jason replied saying that the others could not help him. Jason said that: "We have an agreement. You either honer [sic, honour] it or we can finish it. Up to you". Jason then said he had spoken to the accountant who would do up a company value as at 30 June. Jason also said that he wanted to be paid the money he was owed - presumably the $1.6 million he had previously discussed.
• [183] A week later, Habib made another request for a valuation of Lantona and for transfer of 'properties that rightfully belong to Habib'. In response Jason said this:

"Stop making false accusations and claims. We have agreement in place signed by both you and me and a solicitor and we are in agreeance of moneys owing to Jason Habchi. If you wish to terminate our agreement, I am happy to do so but it must be handled in a professional manner. Your abusive out burst and random rants towards toward my colleagues will not be tolerated. This behaviour is not acceptable nor will it be responded to. I suggest you handle this more professionally manner or go seek legal advise because what your demanding make absolutely no sense. Be professional and I'm more then certain this can be resolved. The more you carry on the way you are. The worse this will get." [emphasis added]

• [184] The suggestion that the agreement was "in place" suggests that the parties were continuing to deal with each other as 'partners 50:50'. But the subsequent email exchange makes fairly clear that what was happening was that the brothers were contemplating that the agreement would only be formally at an end once there had been a financial split. That subsequent email exchange was:
• [185] Habib said:

"Accountant are doing it. When ready I will exports profits to Jayhab and from there we split and terminate our agreement. Don't make contact with me anymore. I suggest you get yourself a solicitor to handle it from here on. I have already engaged mine. You are unreasonable and unpredictable. Any further request, please send directly to Paul Gordon from HWL. Paul has also been included in this email."

• [187] The words highlighted demonstrate that Jason at least envisioned that the financial split and the termination of the agreement were to occur simultaneously. It is plain however that the parties were no longer partners. The words "Don't make contact with me anymore" and the idea that the brothers communicate only through their respective solicitors make it clear that they were no longer to be partners and all that was left was to do the 'split'. That split required that there be a proper account for the profits that had been earned.

• [188] There was then little progress in resolving the financial settlement. The email correspondence did not improve. In November 2020 Habib sent some threatening and abusive emails.
• [189] In October 2021, Jason emailed Habib an offer which contained various conditions including an offer to Habib of 538 Sherwood Road and $970,000 in cash which had been set aside in a term deposit. Jason's affidavit says that:

"The $970,000 in the term deposit was from Lantona's profits following completion of the Maddison, Oxy, and Hive developments (discussed above). I did not believe that that was the amount Habib was entitled to under the Family Agreement, I believed it was more than he was entitled to. But I offered it to him on the terms in my email, including giving him 538-540 Sherwood Road, in an attempt to resolve our disagreements about the Family Agreement and what it means and the NAB line of credit."[113]

• [190] That sum of $970,000 appears to no longer be available or offered. In the meantime, Habib has continued to demand a proper account of what earned on the three projects.
• [191] In July 2022, Habib lodged a caveat over City Road and the parties have been litigating ever since.

• [192] Question 3 asks whether the Family Agreement was breached, or terminated, or now able to be terminated?
• [193] The partnership created by the Family Agreement was breached by Jason's failure to properly account to Habib for the profits earned on the three property developments (Indooroopilly, Stones Corner and The Gap).
• [194] The partnership was terminated on 21 September 2017. At that point Jason elected to be "totally disconnected" from Habib. From then on Habib and Jason were engaged in a process of 'separating everything'. The fact that the brothers were no longer partners from that point on is also clear from their exchange in July 2018 when Habib said this:

"Make proper calculation from the day we signed that agreement and take what is yours

To be honest I don't want you as a partner we are two different people...

So just do proper calculations and if I owe you anything I do plan to give you ur money"

• [195] It follows that I reject the submissions on behalf of Habib that the partnership continued until 24 August 2022.[114]
• [196] Both brothers agreed that the 'partners 50:50' arrangement covered the Indooroopilly, Stones Corner and The Gap developments. It did not cover the later developments because those developments commenced after the partnership ceased.

• [197] Question 5A is as follows: Are the Habib Habchi Parties (or any of them) entitled to any and, if so, what, relief in relation to the real property located at and known as 2 City Road, Beenleigh in the State of Queensland (Lot 2 on Survey Plan 145262)?

• [198] It was Habib who identified the property at 2 City Road, Beenleigh as an investment opportunity. On 18 August 2016, before the bad blood, Habib emailed Jason the details of the property. Two days later he emailed Jason saying that he was intending to offer $750,000 for the property. Habib's negotiations to purchase the property progressed because on 17 November 2016 Habib emailed Jason with further details of the proposed purchase and the features of the property. At the end of the email Jason said:

"I have put contract in XP name to increase asset pool

• [199] The next day Jason replied saying: "We have too much on the go. Not interested in buying more property I don't want to over commit". Habib accepted Jason's decision, saying:

• [200] Jason says that what then happened is that he had a conversation with Habib as follows:

"Habib: I changed the name on the contract for Beenleigh to Moni's name.

[Jason]: I think you will need to change the name so it's an entity as you won't be able to get finance on an individual name. We can put it in Jayhab.

Habib: Ok sounds good but I want to be included in it.

[Jason]: You can be included as a beneficiary in Jayhab, but only on the basis that we split the acquisition, and you contribute equally with me for it and all expenses.

• [201] I accept that the brothers agreed that they were going to share 50:50 in the expenses and potential profit arising from the acquisition of City Road. There is other evidence that supports that finding. For example, there are later emails of 1 June 2017 which speak of the property being purchased in the name of Jayhab but on the basis that Habib was a 50% shareholder in that company.[116] That Habib was entitled to a 50% interest in City Road was not really in dispute.
• [202] However, I do not accept that the conversation occurred as portrayed by Jason. His version has an air of unreality and has a rather myopic element to it. The conversation reads as if Jason was providing his brother with financial advice and somewhat generously providing his brother with an opportunity to be included. That is quite incongruous with the actual situation - which was that this was a project embarked on by Habib. Jason had not been interested until then.
• [203] On 28 November 2016 a contract was entered into to purchase the City Road property. The purchaser was "Moni Salim Habchi and/or nominee". Settlement was set for some 7 months later - on 3 July 2017. But by May 2017 the brothers were at loggerheads. In the middle of their aggressive emails to each other Jason asked the solicitor, Mr Torbey, whether the seller of City Road would agree to a new purchaser. The seller did agree, subject to some conditions,[117] and eventually the two brothers agreed that the new purchaser would be Jayhab. Using Moni Habchi's power of attorney, Jason signed the deed of recission on her behalf. The new contract with Jayhab Developments Pty Ltd as trustee for the Jason H Family Trust proceeded to settlement on 4 July 2017.[118]
• [204] The evidence is clear that Habib and Jason were to have a 50:50 interest in the City Road property. By the time of settlement that 50:50 arrangement meant that Habib and Jason were to be 50% shareholders in the purchaser, Jayhab.[119]
• [205] Despite that arrangement, Jason acquired City Road beneficially for himself and then sold City Road to a third party for $2.2 million. From that sale price an amount of $1.77 million was paid the financier, the National Australia Bank (NAB).

The three steps in Jason's effective acquisition of City Road

• [206] The three steps in Jason's effective acquisition of City Road are that:

(a) on 19 July 2017, Jayhab Developments Pty Ltd as trustee for the Jason H Family Trust became the registered owner of City Road;

(b) on 9 May 2022, title to the property was transferred to Jason H Pty Ltd as trustee for the Jason H Family Trust, having replaced Jayhab as such on 13 April 2022;

(c) on 11 August 2023, Jason H Pty Ltd as trustee for the Jason H Family Trust transferred 2 City Road to a third party, following completion of a sale by auction.[120]

• [207] It is necessary to look at all three steps. As to the first, the acquisition was in the name of a company that Jason nominated - Jayhab Developments Pty Ltd. But a reading of the emails shows that the transfer was to be on the basis that the two brothers were to have a 50:50 interest both legally and beneficially.[121] Later, in November 2017, pursuant to the arrangement, Jason made Habib a primary beneficiary of the Jason H Family Trust.[122] However, as will be seen, the control of the purchasing entity remained with Jason.
• [208] The purchase was financed by the NAB. Habib, his wife and his company were guarantors.
• [209] Jason took the second step without reference to Habib. What he did was to change the trustee of the Jason H Family Trust. The old trustee was Jayhab Developments Pty Ltd. The new substituted trustee was Jason H Pty Ltd. The effect was to neutralise any interest that Habib had in Jayhab. Jason also transferred City Road from Jayhab to Jason H Pty Ltd. Again, the effect was to neutralise any interest that Habib had in Jayhab and therefore in the City Road property.
• [210] Jason's reasons for these changes do not withstand any scrutiny. Jason gives this explanation:

"In or around early 2022, Lantona was having difficulties getting finance for the developments it was doing at the time. I understood, based on what NAB had told me, that this was because Lantona had to undergo additional credit and compliance checks because of Habib's poor reputation with the bank which included defaults, not paying his debts, and a bad credit rating. At the time, Habib was (as he is now) a shareholder of Jayhab which was in turn a shareholder in Lantona. Because Habib's poor reputation with NAB was affecting Lantona's business, I told my accountants to prepare documents for [Jason H Pty Ltd] to replace Jayhab as the trustee of the Jason H Family Trust."[123] [emphasis added]

• [211] This does not qualify as evidence. Jason states his understanding based on the unspecified statements of an unidentified representative of NAB. At best, this is hearsay.[124]
• [212] Even if that quoted paragraph were properly regarded as part of the evidence, I would not accept it. It is something of a long bow to say that the NAB were concerned about Habib's credit rating when Habib was not a director or shareholder of Lantona but held shares in Jayhab which was a shareholder of Lantona. No representative of NAB was called. No email or other document records their concern. And, if NAB had voiced a concern about Habib's credit rating, it is surprising that the point was not raised by Jason in the various angry emails.
• [213] It is also peculiar that NAB's concerns about Habib's credit rating are put forward as a justification for replacing the trustee in the context where Jason took that step without any explanation to Habib. If NAB's concerns were a real problem, any rational person in Jason's position would have explained the difficulty to Habib and taken steps to ensure that Habib's 50:50 interest was preserved.
• [214] I do not accept the explanation. The evidence is not corroborated by other evidence.
• [215] The third step, the sale by Jason H Pty Ltd to a third party, took place despite Habib's attempts to stop the sale. Jason says that the proceeds from the sale of City Road were to be deposited into the offset account for the NAB line of credit. However, that did not turn out to be the case:

"While Skye [Jason's wife] was the sole director of JHPL [Jason H Pty Ltd] at this point, I was still in control and she did what I told her to do. After the sale, I decided that the proceeds would not be deposited in the offset account for the NAB line of credit. That was because this facility was not used to purchase 2 City Road and had nothing to do with JHPL. I also believed that JHPL was not required to deposit the proceeds in the offset account. Either way, I was (and still am) responsible for ensuring the repayments were being made on the NAB line of credit, which Habib has never contributed to. No proceeds from the sale were distributed to Habib because he did not, despite our agreement, contribute to the purchase price or other costs of 2 City Road. In my mind, Habib had no entitlement to any share of the proceeds."[125] [emphasis added]

• [216] Thus, Jason does not dispute that a 50:50 arrangement applied to City Road. However, his stance is that Habib is not entitled to a share of the proceeds of City Road because "he did not, despite our agreement, contribute to the purchase price or other costs of 2 City Road".[126]
• [217] That stance has no legal basis. If, as is accepted, the two brothers agreed that they were each to have a 50:50 interest in City Road, neither lost that interest by failing to pay a contribution. In contract terms, any breach of the agreement to contribute equally can hardly be viewed as a condition. Even if it was a condition, there is no sign that the agreement was terminated on that basis.
• [218] Pursuant to their agreement, Habib was and is entitled to 50% of the net proceeds of City Road after payment of any legitimate costs. The fact that Jason chose to use the proceeds for his own purposes means that he must account for the 50% of the net proceeds.
• [219] It is worth noting that, in the paragraph quoted above, Jason states that he decided not to deposit the City Road proceeds of sale into the offset account for the NAB line of credit. He notes that he was, and still is, responsible for ensuring the NAB line of credit. However, elsewhere Jason claimed that he was owed or entitled to be reimbursed for the NAB line of credit.

• [220] Oddly, the major controversy regarding City Road concerned who paid the deposit of $20,000. Jason's closing submissions focus entirely on whether Habib paid the deposit of $20,000 for City Road:

"Outside of the Family Agreement, the Jason Habchi Parties do not understand Habib to assert an interest in 2 City Road other than on the basis of a purchase money resulting trust. That requires the Court to consider whether Habib paid the $20,000.00 deposit for the purchase of the property. For the reasons that follow, it is unnecessary to consider the relevant principles. Habib's contention that he paid the deposit is implausible and should be rejected."[127]

• [221] As to the first sentence, Habib's claim has always been that he had a 50:50 interest in City Road. Habib is wrong to suggest that the City Road arrangement was part of the 'partners 50:50' agreement in clause 6 of the Family Agreement. Nobody suggested that it was at the time. It was a separate agreement. However, both arrangements are similar in that they involve a 50:50 split of expenses and profits. Habib was entitled to pursue and did pursue that 50:50 agreement. He had a cause of action in contract. He was not restricted to a 'purchase money resulting trust'.
• [222] This case proceeded without proper pleadings. That was at least in part due to the fact that there were a number of different claims in a number of different proceedings and for most of the procedural history Habib was self-represented. Nevertheless, the claims of each party are relatively clear. In proceeding 9265 of 2022 for example there is a claim pursuant to an alleged constructive trust.
• [223] Consistent with the above approach to credibility, it is necessary to disregard Habib and Jason's evidence as to the conversations.[128]
• [224] The contract with "Moni Salim Habchi and/or nominee" as purchaser required a deposit of $20,000 within one day of execution. On 28 November 2016 Habib emailed Jason a copy of the signed contract and asked him to forward $20,000 to Yong Real Estate - the seller's agents. He gave Jason the account details. Jason did transfer that sum to Yong Real Estate. A bank statement shows the transfer. Yong Real Estate forwarded a receipt for the $20,000 to both Jason and Habib.
• [225] The complication arises in this way. The bank statement also shows, on the same day, a credit of $20,400 from Q-Cool an air-conditioning contractor said to be associated with one or other of, or both of Jason and Habib.[129] Habib says that the $20,400 Q-Cool paid to Jason was a payment of his wages and that Jason made this payment from Q-Cool to his own account. Habib says that the sum represents his wages and that he directed Jason to use that money to pay the deposit.
• [226] It is difficult to resolve the issue. On the balance of probabilities, the simplest explanation - that suggested by Jason - is the more likely. It was Jason who directly paid the deposit. When Habib asked Jason to make the payment of the deposit, he simply requested payment of the deposit and supplied the real estate agents bank details. Habib did not say anything that suggested the intention was that the deposit was to be paid from the sum of $20,400 by way of wages. I accept the submissions on behalf of Jason that:

(a) Jason had been paying Habib's wages on behalf of Q-Cool, because Q-Cool did not have the money;

(b) once Q-Cool received the government funding, Q-Cool:

(i) transferred the $20,400 to Jason as a repayment for Habib's wages that he had been paying; and

(ii) thereafter commenced paying Habib's wages of $1,200 per week.

• [227] That explains how the $20,400 came to be deposited. Consequently, I accept that it was Jason who paid the deposit.
• [228] However, as explained, the consequence of the agreement between the two brothers was that Habib was and is entitled to 50% of the net proceeds of City Road after payment of any legitimate costs.

• [229] The answer to Question 5A is: 'yes, Habib is entitled to 50% of the net proceeds of 2 City Road, Beenleigh'. However, for the reasons stated, any calculation of the net proceeds will need to take into account that it was Jason who paid the deposit of $20,000.

• [230] The answers to the questions are as stated above.
• [231] I will hear the parties on future directions and on costs.

[1] For convenience I will refer to Habib Habchi and Jason Habchi by their first names.

[2] This proceeding was transferred from the Federal Court of Australia.

[4] Paragraph 1 from the list of separate questions in the order is omitted because it is introductory and not a question.

[5] This additional question was added by consent at the commencement of the trial.