Rosenbaum v Baidarman

Submitting appearance filed for the Fifth and Sixth Cross-defendants

Seventh Cross-defendant joined to proceedings by order made by consent after conclusion of the hearing File Number(s): 2012/301100 Publication restriction: N/A

Introduction to the parties

1. Mr Eduard Rosenbaum is the first plaintiff and first cross-defendant in this proceeding (Mr Rosenbaum). Mr Jacob Baidarman is the defendant and cross-claimant (Mr Baidarman). Mr Rosenbaum and Mr Baidarman commenced a property development business in partnership in about 1987 (the Partnership). [1] It is common ground that it was a term of their oral partnership agreement that each partner would contribute equally to the Partnership and would share equally in the profits or losses of the Partnership. [2]
2. Ironwell Pty Limited (Ironwell) is the second plaintiff and second cross-defendant in this proceeding. Ironwell was initially established by third parties as a shelf company but Mr Rosenbaum and his wife Alla Rosenbaum (Mrs Rosenbaum) have been the sole directors and shareholders of Ironwell since November 1991. [3] Mrs Rosenbaum is the third cross-defendant in this proceeding.
3. Ironwell is the trustee of the Ironwell Employees Superannuation Fund (Ironwell Super). [4] It is common ground that, at all material times, the beneficiaries of Ironwell Super were Mr and Mrs Rosenbaum and the fourth cross-defendant, Tanya Rosenbaum (the daughter of Mr and Mrs Rosenbaum). [5]
4. It is convenient to refer to Mr and Mrs Rosenbaum, Ironwell and Tanya Rosenbaum collectively as the Rosenbaum parties.
5. The sixth cross-defendant, Dabjade Pty Limited (Dabjade) is the trustee of the Baidarman Superannuation Fund (Baidarman Super). [6] It is common ground that, at all material times, the beneficiaries of Baidarman Super were Mr Baidarman and his wife, Mrs Ella Baidarman, who is the fifth cross-defendant (Mrs Baidarman). [7]
6. From about 1997, the property development activities that had previously been undertaken by the Partnership were instead undertaken by the IPD Trust and Omega Unit Trust. Messrs Rosenbaum and Baidarman caused these trusts to be established on the basis of advice from an accountant to the effect that it would be tax effective for Ironwell Super and Baidarman Super to fund the property development activities and to earn the profits of those activities.
7. It is not in dispute that: [8] 1. the Omega Unit Trust and the IPD Trust were each established in May 1997; 2. Innovative Property Developments Pty Ltd (under a previous name) was appointed as the trustee of each trust in May 1997; 3. Ironwell (as trustee of Ironwell Super) and Dabjade (as trustee of Baidarman Super) were beneficiaries of the IPD Trust (which is a discretionary trust) and are also the only unit holders in the Omega Unit Trust; and 4. in March 2006, Innovative Property Developments Pty Ltd was removed as trustee of the Omega Unit Trust and the IPD Trust and replaced by Excelsea Pty Limited (Excelsea); and 5. the only directors of Excelsea at all material times were Mr Rosenbaum and Mr Baidarman.
8. The Partnership undertook the following development projects: [9] 1. a project at Merton Street, Sutherland, during the period from 1987 to 1992 (the Merton Street project and the Merton Street property); 2. a project at Port Hacking Road, Caringbah, during the period from 1991 to 1994 (the Port Hacking Road project and the Port Hacking Road property); 3. a project at The Boulevard, Miranda during the period from 1996 to 1997 (the Miranda project); and 4. a project at Wonga Road, Yowie Bay during the period from 1994 to 1998 (the Wonga Road project and the Wonga Road property).
9. Three further projects were undertaken after the IPD Trust and the Omega Unit Trust were established in 1997: 1. a project at Hotham Road, Gymea Bay during the period from 1998 to 1999 (the Hotham Road project); 2. a project at Military Road, North Bondi during the period from 2001 to 2004 (the Military Road project); and 3. a project at Old South Head Road, North Bondi, the land for which was sold in 2011 prior to development (the Old South Head Road project and the Old South Head Road property).
10. The parties did not seek to characterise the projects undertaken by the trusts as, in substance, a continuation of the Partnership.
11. At the hearing before me, the Rosenbaum parties were represented by Ms Rogers of counsel, instructed by Mr McNamee, solicitor. The defendant and cross-claimant, Mr Baidarman, was represented by Mr Smallbone of counsel, instructed by Mr English, solicitor.
12. On 30 October 2019, Mrs Baidarman and Dabjade filed a submitting appearance stating that they submit to the making of orders sought, and the giving of entry of judgment in respect of all claims made save as to costs. Mrs Baidarman and Dabjade were therefore not represented.
13. As I will explain in more detail later in these reasons, Excelsea was first joined as a party to these proceedings after the conclusion of the hearing.

Financial affairs of the Partnership

1. Messrs Rosenbaum and Baidarman did not establish a bank account for the Partnership. Nor did they take any steps to cause financial statements to be prepared, or tax returns to be filed, for the Partnership. During the entire period of the Partnership, transactions for the purpose of Partnership activities were undertaken by Mr Rosenbaum, Mr Baidarman, Ironwell or Dabjade on behalf of the Partnership. The evidence does not disclose whether or to what extent those transactions were reflected in tax returns filed on behalf of Mr Rosenbaum, Mr Baidarman, Ironwell or Dabjade.
2. During that same period, Mr Rosenbaum and Mr Baidarman were also engaged in activities unrelated to the Partnership, and Ironwell and Dabjade had responsibilities as trustees of Ironwell Super and Baidarman Super respectively. This has given rise to disputes between the parties in relation to numerous transactions about whether those transactions were part of the business of the Partnership, or whether Mr Rosenbaum, Mr Baidarman, Ironwell or Dabjade entered into those transactions for purposes unrelated to the Partnership.
3. These difficulties are compounded by the fact that the parties did not adopt any process to keep track of the transactions undertaken in relation to the Partnership. From approximately 2006, Messrs Rosenbaum and Baidarman did seek advice from their mutual accountant about some transactions. However, many transactions in connection with the Partnership's business activities were simply left to be the subject of adjustments between the partners at some later time, without any agreement or discussion about precisely when or how this would be done. Records of Partnership payments and receipts were not maintained along the way for the purpose of any future adjustments except in a manner that can only be described as haphazard. [10]
4. In respect of some transactions undertaken by either Mr Rosenbaum or Mr Baidarman for the purpose of the Partnership, an adjustment as between the partners was later made by one of the partners making a payment directly to the other "rather than through the partnership accounts". [11] The Rosenbaum parties refer to these payments as "direct transactions". In reality, these "direct transactions" were the only means of making financial adjustments as between partners because there were no "partnership accounts".
5. The Rosenbaum parties contend that, from time to time during the course of the Partnership, one partner paid personal expenses on behalf of the other partner. Mr Baidarman does not admit that any such payments were made. [12] The Rosenbaum parties contend that payments of this nature should be included in an accounting between partners in the same manner as the direct transactions to which I have referred above. Mr Baidarman contends that any such payments occurred entirely outside the Partnership and should not be included in the winding up of the Partnership or the taking of accounts of the Partnership. [13] It is convenient to refer to this class of transaction as "private matters", adopting the terminology used by the Rosenbaum parties during the hearing.

2006 Reconciliation and the subsequent payments

1. In 2006, Mr Rosenbaum and Mr Baidarman undertook a process that each of them described as a "reconciliation" of what they described as their respective "contributions" to and "withdrawals" from the Partnership since its inception (the 2006 Reconciliation). [14]
2. It is common ground between Mr Rosenbaum and Mr Baidarman that the 2006 Reconciliation was not complete or final. Neither party relies on it as a settled account, or as a binding agreement between them as to the manner in which any or all transactions of the Partnership and dealings of each of them in relation to the Partnership were to be accounted for. Even at the time it was undertaken, the 2006 Reconciliation was subject to various matters recorded as outstanding. Each of Mr Rosenbaum and Mr Baidarman subsequently identified certain additional matters concerning their respective alleged contributions to and withdrawals from the Partnership that they say were not addressed, or not addressed adequately, in the 2006 Reconciliation. [15]
3. Importantly, both the Rosenbaum parties and Mr Baidarman acknowledge that the 2006 Reconciliation was superseded by the reference (could make a defined term) conducted in the course of this proceeding, to which I will refer below. [16]
4. Messrs Rosenbaum and Baidarman produced a lengthy handwritten document during the 2006 Reconciliation process. I will refer to it as the 2006 document. [17] It bears the handwriting of Mr Rosenbaum in parts, and Mr Baidarman in other parts. There is some dispute about the precise role of each of them in the preparation of the 2006 document, [18] but nothing turns on that.
5. The 2006 document commences with a page entitled "Outstanding Issues".
6. The second page is entitled "Jacob" and calculates an amount "Owing to Co." or "Owing to Jacob" for specified periods between 1992 and 2006. The result of those calculations is a total amount "Owing to Jacob" of $493,792. The third page of the 2006 document is entitled "Eddie" and calculates an amount "Owing to Co." or "Owing to Eddie" in respect of the same periods between 1992 and 2006. The result of those calculations is a total amount "Owing to Eddie" of $110,100. References to "Jacob" and "Eddie" in these pages and throughout the 2006 document are references to Mr Baidarman and Mr Rosenbaum respectively. It is plain from the transactions recorded in the 2006 document that references to "Co." or "Company" must be understood as meaning the Partnership. Page 5 of the 2006 document includes the statements (underlining in original): [19] "Company owing to Eddie 1,102,381 - 992,281 = 110,100 Company owing to Jacob 1,308,792 - 815,000 = 493,792"
7. It is common ground between the parties that the meaning of these pages of the 2006 document is that Messrs Rosenbaum and Baidarman had provisionally calculated that: [20] 1. Mr Rosenbaum's advances to the Partnership since its inception had exceeded his withdrawals from the Partnership by a total amount of $110,100; and 2. Mr Baidarman's advances to the Partnership during the same period exceeded his withdrawals from the Partnership by a total amount of $493,792.
8. It is also common ground that, during the period from December 2008 to March 2009, Mr Rosenbaum and Mr Baidarman were paid the amounts of $110,100 and $493,792 respectively. [21]
9. It is possible to discern from the remaining pages of the 2006 document, when considered together with other evidence, some elements of how the amounts of $110,100 and $493,792 were calculated. However, the 2006 document records information in a manner that was clearly designed to be capable of being understood by Mr Rosenbaum and Mr Baidarman, who had some knowledge of the relevant transactions. The document is largely impenetrable to any other reader.
10. The 2006 document also refers to certain transactions in the "private matters" category to which I have referred above. It states that the sum of $13,329 was "owing to Jacob" in respect of those private matters. It also contains a handwritten statement that this amount was "paid back on 20/10/2010". [22] It is common ground that this payment was made.
11. At the hearing before me, the Rosenbaum parties sought to tender the whole of the 2006 document "as a business record". Mr Baidarman objected to the tender of the document as evidence of the truth of its contents. I required counsel for the Rosenbaum parties to identify the specific previous representations made in the 2006 document that they sought to tender as an exception to the hearsay rule under s 69 of the Evidence Act 1995 (NSW), identify the fact asserted by each such representation and articulate the reasons why those previous representations satisfied the requirements for admissibility under s 69: Lithgow City Council v Jackson (2011) 244 CLR 352 at [17]-[21]; see also Capital Securities XV Pty Ltd (formerly known as Prime Capital Securities Pty Ltd) v Calleja [2018] NSWCA 26 at [85]-[87]. Counsel did not undertake this exercise in any meaningful way. Ultimately, the 2006 document was admitted into evidence subject to an order made under s 136 of the Evidence Act limiting its use to evidence of the creation and existence of the document and its contents, with the exception of seven specific statements contained in the 2006 document that were admitted as evidence of the truth of facts asserted by those statements.
12. The 2008 and 2009 payments to which I have referred at [26] above were funded by monies that Mr Rosenbaum caused to be withdrawn from an account held by Excelsea as trustee of the Omega Unit Trust. In June 2009, Ironwell Super was treated as having redeemed 603,892 units in the Omega Unit Trust to fund those December 2008 and March 2009 withdrawals. [23] The Rosenbaum parties do not admit the accuracy of the unit holdings in Omega Unit Trust presently recorded (1,437,246 units held by Baidarman Super and 678,740 units held by Ironwell Super). [24] The Rosenbaum parties did not plead a positive case as to how many units are in fact held by each superannuation fund in the Omega Unit Trust, but contended during submissions that the 2008 and 2009 withdrawals should not have resulted in any reduction in Ironwell Super's units. The accountant for the Omega Unit Trust, Ironwell Super and Baidarman Super gave evidence that those withdrawals had to be accounted for as a redemption of units by Ironwell Super. Mr Baidarman maintains that there is no basis to doubt the accuracy of the unit holdings presently recorded. [25]

Disputes relating to the Omega Unit Trust and the IPD Trust

1. In about 2010, Mr Rosenbaum and Mr Baidarman decided that they did not wish to undertake any further property development activities in partnership or through the trusts.
2. Financial statements had been prepared for the Omega Unit Trust and the IPD Trust up to and including the financial year ending 30 June 2010. However, disputes emerged in the course of discussions between Mr Rosenbaum and Mr Baidarman about the affairs of the two trusts. There are essentially three issues in dispute.
3. The first issue is the unit holdings of Ironwell Super and Baidarman Super in the Omega Unit Trust. I have referred to this aspect of the dispute at [30] above.
4. The second issue relates to an amount of $1,720,674 that was withdrawn from the Omega Unit Trust funds on 28 September 2010 and paid to: 1. Dabjade (as trustee of Baidarman Super) in the amount of $1,060,291; and 2. Ironwell (as trustee of Ironwell Super) in the amount of $660,383.
5. The parties are in dispute about whether this was a final distribution or an interim payment subject to adjustment. If it was an interim payment, then the dispute concerning the unit holdings is plainly relevant to the question as to the proportions in which the sum in question should be distributed to the unit holders on a final basis. [26]
6. The third issue relates to the net proceeds of the sale of the Old South Head Road property in 2011. The net sale proceeds amount to $1,188,196.82 and are currently held in an account in the name of Excelsea as trustee of the IPD Trust. There is a deadlock between Mr Rosenbaum and Mr Baidarman, as directors of Excelsea, as to how those net sale proceeds should be distributed between unit holders.
7. Due to these ongoing disputes, Mr Rosenbaum and Mr Baidarman, as directors of Excelsea, have not caused financial accounts to be completed for the Omega Unit Trust and IPD Trust for the financial year ended 30 June 2011 and subsequent years. [27]

History of this proceeding to date

1. This proceeding was commenced in 2012 and has already had a long history.
2. At some stage prior to 20 May 2016, the Rosenbaum parties prepared a document referred to as the plaintiff's schedule of contributions and withdrawals from the partnership. This document was marked for identification as MFI-1. The document set out a list of amounts that the Rosenbaum parties claimed Mr Rosenbaum had contributed to and withdrawn from the assets of the Partnership. Mr Baidarman then prepared a document referred to as the defendants' schedule of omissions from the plaintiff's schedule of contributions and withdrawals. This schedule, which was marked for identification MFI-5, was a list of additional withdrawals that Mr Baidarman claimed Mr Rosenbaum had made from the Partnership assets and had omitted from MFI-1. [28] In the terminology that is applied in the taking of accounts, MFI-5 was a list of surcharges. [29]
3. Similarly, Mr Baidarman prepared a list of amounts that he claimed to have contributed to and withdrawn from the Partnership assets (MFI-4) and the Rosenbaum parties prepared a list of Mr Rosenbaum's surcharges in respect of Mr Baidarman's withdrawals from the Partnership assets (MFI-2). [30]
4. In addition to preparing their respective lists of surcharges, each of the Rosenbaum parties and Mr Baidarman annotated the other's lists of contributions and withdrawals to identify whether they accepted or disputed the other's claimed contributions and withdrawals (in amount or otherwise). In the terminology that is applied in the taking of accounts, these annotations were falsifications to the extent that they disputed the other partner's claimed contributions and surcharges to the extent that they sought to charge the other partner with receipt of an amount in excess of the withdrawal acknowledged by that other partner. [31]
5. The Rosenbaum parties and Mr Baidarman also prepared a schedule of direct transactions between the parties (MFI-3 and MFI-6 respectively). Each of those schedules contained a list of amounts that the partner who prepared the schedule claimed to have contributed to the Partnership assets by direct payment to the other partner. [32] These schedules were also annotated by the other partner to identify whether they accepted or disputed the direct payments. These annotations were falsifications to the extent that they disputed the contributions that the other partner claimed to have made to the Partnership by direct payments.
6. On 20 May 2016, the Court made an order pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 20.14 referring the matters described immediately below to Mr Ian Paul, forensic accountant, as referee, for enquiry and report. [33]
7. The orders directed the referee to receive the schedules that had been marked as MFI-1 to MFI-6.
8. If a party accepted unconditionally an entry in a schedule prepared by the other party, the referee was entitled to act on that admission without further evidence.
9. The referee was directed to consider the transactions claimed within each schedule and any supporting documents provided by the parties, verify those transactions objected to by reference to the supporting documents and any other evidence provided in the reference and determine: 1. whether the relevant payment, withdrawal or direct payment in fact happened; 2. who made the payment; 3. what was the purpose of the transaction; and 4. the amount paid.
10. Where the referee determined that a payment, withdrawal or direct payment occurred on the basis of the 2006 document, the orders required him to identify this in the schedules and the orders stated that further consideration of those items was reserved.
11. The referee's final report was required to include, with respect to each transaction: 1. a determination as to whether the payment, withdrawal or direct payment occurred in fact; 2. whether each disputed item in the direct payments schedules was paid directly by one partner to the other partner; 3. brief reasons for the determinations; and 4. in respect of the transactions that the referee determined had occurred: 1. who made the payment; 2. to whom the payment was made; 3. what was the purpose of the contribution, withdrawal or direct payment (save in respect of a small number of specified items in the schedules); and 4. the amount paid.
12. The items in respect of which the referee was not required to determine the purpose of the payment related to: 1. a payment of $37,000 made by Mr Rosenbaum to Ironwell Super on 23 December 1993, which he claimed as a contribution to the Partnership; 2. payments of certain taxation liabilities which Mr Rosenbaum contended were withdrawals by Mr Baidarman from the Partnership assets; 3. a payment of $26,000 that Mr Rosenbaum claimed to have made to Mr Baidarman on 21 October 1994 as a loan and which he contended should be treated as contribution by him to the Partnership assets; and 4. the payment of $13,329 made by Mr Rosenbaum to Mr Baidarman on 20 October 2010 in relation to "private matters" to which I have referred at [28] above.
13. The referee delivered his final report on 12 September 2017.
14. The report recorded that Mr Baidarman had accepted that Mr Rosenbaum had made contributions to the Partnership totalling $813,745 [34] and had objected to further contributions claimed by Mr Rosenbaum totalling $379,748.32. [35] Of those contributions objected to, the referee had determined that payments totalling $209,183 had been verified. [36] The referee determined that all of those verified payments had been made by Mr and/or Mrs Rosenbaum. However, he made no determination as to the source of funds from which Mr and/or Mrs Rosenbaum had made the payments, including whether the payments had been made from Partnership funds. [37] The referee's determination as to the purpose of the each payment was limited to identifying the immediate purpose of the payment (e.g. "Pay legal fees"; "Loan to Dabjade PL"; "Architect") and did not engage with the question whether the payment was made for the purpose of the Partnership. Verification of the payment by the referee did not therefore involve a determination as to whether the payment was in substance a contribution by Mr Rosenbaum to the Partnership. [38] The report attached a revised version of schedule MFI-1 that was annotated to record whether the referee determined each contribution objected to by Mr Baidarman to be "verified" or "not verified".
15. The referee referred to the amounts that the Rosenbaum parties claimed to have contributed to the Partnership assets by direct payment to Mr Baidarman (being the transactions in schedule MFI-3) as "the plaintiff's direct contributions". The report noted that Mr Baidarman had accepted $54,444 and objected to $60,758 of those direct contributions. [39] The referee determined that one of those direct contributions was verified, being the payment of $26,000 made on 21 October 1994 to which I have referred at [49] above. [40] For the reasons already explained in [51] above, verification of that payment did not involve a determination by the referee that the payment was a contribution by Mr Rosenbaum to the Partnership assets.
16. The referee adopted the same approach to verification of contributions and "direct contributions" claimed by Mr Baidarman in respect of which the Rosenbaum parties had made falsifications. The report recorded that contributions totalling $1,082,500.26 had been claimed by Mr Baidarman and accepted by the Rosenbaum parties [41] and a further $598,120 of contributions claimed by Mr Baidarman had been objected to by the Rosenbaum parties. [42] The referee determined that $460,046 of those disputed contributions were verified. [43] The report attached a revised version of schedule MFI-4 that was annotated to record whether the referee determined each contribution claimed by Mr Baidarman and objected to by the Rosenbaum parties to be "verified" or "not verified". In addition, the report recorded that $1,900 of direct contributions claimed by Mr Baidarman had been accepted by the Rosenbaum parties [44] and objection had been taken to one claimed direct contribution of $39,800. [45] The referee verified that disputed direct contribution. [46] The referee's verification determinations in relation to the disputed contributions and direct contributions have the same limitations that I have referred to in [51] above.
17. In relation to withdrawals from the Partnership, each partner raised various objections to withdrawals that the other partner acknowledged he had made. The revised version of schedule MFI-1 attached to the referee's report records whether each withdrawal acknowledged by Mr Rosenbaum was accepted by Mr Baidarman and, if not, whether the transaction was determined by the referee to be verified. The revised version of schedule MFI-4 attached to the report records the same information in respect of withdrawals acknowledged by Mr Baidarman.
18. In relation to Mr Baidarman's surcharges in MFI-5, the referee's report recorded that the Rosenbaum parties had accepted surcharges totalling $71,947.65 [47] and objected to surcharges totalling $119,905.12. [48] The referee verified $71,943.20 of those disputed surcharges. [49]
19. In relation to Mr Rosenbaum's surcharges in MFI-2, the referee's report recorded that Mr Baidarman had accepted surcharges totalling $120,979 [50] and objected to surcharges totalling $249,149. [51] The referee verified $93,856 of those disputed surcharges. [52]
20. The verification of surcharges has the same limitations that I have referred to in [51] above. That is to say, the referee's determination that a partner had made a "withdrawal" alleged by the other partner involved a finding that the transaction had occurred, but the referee made no finding as to whether the withdrawal had been made from funds that were properly characterised as Partnership funds or whether the transaction ought to be treated as a withdrawal by the relevant partner from Partnership assets.
21. As I have referred to at [21] above, it is common ground that the reference superseded the 2006 Reconciliation. [53] This is illustrated by the fact that, during the reference, the partners did not adopt their calculations of their respective contributions and withdrawals undertaken during the 2006 Reconciliation as the starting point for the process to be undertaken by the referee. On the contrary, both partners treated the amounts of $110,100 and $493,792 calculated during the 2006 Reconciliation as "owed" by the Partnership to Mr Rosenbaum and Mr Baidarman (respectively), and subsequently paid in 2008 and 2009, as a withdrawal from the Partnership by Mr Rosenbaum and Mr Baidarman (respectively). [54] At the same time, each partner itemised his contributions and his other withdrawals, and raised surcharges against the other partner, in respect of the whole of the period of the Partnership.
22. By orders made on 10 September 2018, the Court did not adopt the referee's report in relation to: [55] 1. six specified items in the plaintiffs' schedule of contributions and withdrawals (schedule MFI-1); 2. eleven specified items in the defendant's schedule of omissions (schedule MFI-5), which were not pressed by the defendant; 3. five specified items in the plaintiffs' schedule of direct contributions (schedule MFI-3); 4. two specified items in the defendant's schedule of contributions and withdrawals (schedule MFI-4); 5. six specified items in the plaintiffs' schedule of omissions (schedule MFI-2); and 6. items listed in a schedule served by Mr Baidarman on 31 August 2018.
23. Those items remained to be determined by the Court, subject to the right of any party to contend that the other had lost the right to put those items into contention.
24. The orders also noted that the Rosenbaum parties no longer pressed one item in schedule MFI-1 and one item in schedule MFI-2.
25. The referee's report was otherwise adopted by the Court subject to: 1. certain amendments; [56] 2. certain notations and directions identifying issues that remain to be determined by the Court; [57] 3. notations in relation to four specified items in the plaintiffs' schedule of contributions and withdrawals (schedule MFI-1) to the effect that, although the referee's findings were adopted, the referee had not made a finding about who made the relevant payments; [58] 4. notations in relation to twelve specified items in the plaintiffs' schedule of direct contributions (schedule MFI-3) to the effect that, although the referee's findings were adopted, the referee had not made a finding about who made the relevant payments; [59] 5. notations in relation to five specified items in the plaintiffs' schedule of contributions and withdrawals (schedule MFI-1) and four specified items in the defendant's schedule of contributions and withdrawals (schedule MFI-4) to the effect that the referee had not made any finding that the payments were a contribution by Mr Rosenbaum to the Partnership (or that the Court did not adopt any such finding made by the referee); [60] 6. notations to the effect that the status of payments to and withdrawals from Ironwell Super and Baidarman Super remains in issue between the parties and that this affected 14 specified items in the plaintiffs' schedule of omissions (schedule MFI-2), in respect of which the Court adopted the referee's finding that the transactions had occurred but the question whether those transactions were contributions to or withdrawals from the Partnership remained in issue; [61] and 7. three specified items in the plaintiffs' schedule of direct contributions (schedule MFI-3) being transferred to the plaintiffs' schedule of contributions and withdrawals (schedule MFI-1). [62]
26. The orders made on 10 September 2018 are not the subject of any published reasons for judgment.
27. As I have explained above, the referee's report did not make findings as to whether or not transactions were contributions to or withdrawals from the Partnership. Nevertheless, in the orders made on 10 September 2018, the Court's notations that this question had not been determined related only to a limited number of the transactions addressed in the referee's report. I proceed on the basis that, after the adoption of the referee's report, it remained open to the parties to litigate issues concerning the character of transactions as a contribution to or withdrawal from the Partnership only in respect of those transactions specifically identified in the said notations.
28. This approach is consistent with the pleadings filed by the Rosenbaum parties' after the adoption of the referee's report, in which they claim to have addressed the issues that were not referred to the referee for determination or that were the subject of an exception or reservation in the Court's adoption of the referee's report. [63] Mr Baidarman's pleadings engage with the Rosenbaum parties' contentions about those issues and also raise certain additional issues that he claims were not determined by those parts of the referee's report adopted by the Court. [64]
29. This is also reflected in the terms of the declarations, orders and directions for the taking of a final account of the Partnership as formulated by Mr Rosenbaum and Ironwell and by Mr Baidarman during the course of the hearing before me. It is convenient to refer to those proposed declarations, orders and directions formulated by Mr Rosenbaum and Ironwell as the plaintiffs' proposed partnership accounting orders [65] and to refer to those formulated by Mr Baidarman as the defendant's proposed partnership accounting orders. [66]
30. The hearing conducted before me from 25 May to 12 June 2020 was directed principally to issues concerning alleged contributions to and withdrawals from the Partnership assets that had not been the subject of findings made by the referee and adopted by the Court. The determination of those outstanding issues in these reasons for judgment will facilitate the completion of the process of tallying up the partners' contributions and withdrawals that began before the referee. I expressed my concern during the hearing about whether it would facilitate the taking of an account in accordance with ss 39 and 44 of the Partnership Act 1892 (NSW) with a view to ascertaining the assets and liabilities of the Partnership and ensuring that each partner receives his share of the surplus assets following the dissolution of the Partnership. [67] Counsel for both parties maintained that the tallying up of contributions and withdrawals was the best that could be achieved in all the circumstances of this case. I will return to this subject below.
31. The history that I have set out above explains why, notwithstanding that this proceeding has already been on foot for eight years and has already been the subject of a lengthy reference process, the relief now sought by the parties includes an order that an account be taken of all the dealings and transactions of the Partnership and of the partners in relation to the Partnership.
32. The other issues addressed during the hearing before me were the three disputes concerning the Omega Unit Trust and the IPD Trust that I have summarised at [33]-[36] above.
33. The outstanding issues concerning the Partnership and the two trusts are addressed in detail in Section C of these reason. It is convenient to summarise the parties' claims for relief before delving into the detail of those issues.

Claims relating to the Partnership

1. It is common ground that the Partnership was a partnership at will. [68] Either partner was entitled to terminate the Partnership by giving notice to the other of his intention to do so: Partnership Act, s 26.
2. Mr Rosenbaum claims a declaration that the Partnership is dissolved and an order that the Partnership business be wound up under the direction of the Court. Mr Baidarman agrees that this declaration and order should be made. [69] The parties did not address the question of when the Partnership was dissolved. It may be that this first occurred in about 2010 when they decided to cease carrying on any activities together: see [31]. It may be that it occurred earlier at about the time the Omega Unit Trust and IPD Trust were established. The parties will need to give further consideration to this question when preparing short minutes of order to give effect to these reasons.
3. Mr Rosenbaum claims an order that an account be taken of all the dealings and transactions of the Partnership and of the partners in relation to the Partnership. [70] Mr Baidarman agrees that such an order should be made but contends that, in so far as the account concerns Mr Rosenbaum's dealings in relation to the Partnership, the account should be taken on the basis of wilful default. [71] Mr Rosenbaum opposes an order that the account in respect of his dealings be taken on the basis of wilful default. [72]
4. As I have mentioned at [66] above, each of Mr Rosenbaum and Mr Baidarman seeks declarations, orders and directions as to the manner in which specific transactions are to be treated in the taking of the Partnership account. The declarations, orders and directions for which they each contend reflect their respective contentions about the disputed contributions and withdrawals and otherwise seek to give effect to the findings made by the referee and adopted by the Court. To the extent that they relate to disputed matters, the terms of the plaintiffs' proposed partnership accounting orders and the defendant's proposed partnership accounting orders are identified issue by issue in Section C of these reasons.
5. Mr Rosenbaum seeks an order against Mr Baidarman for payment of the amount found to be due to Mr Rosenbaum by Mr Baidarman on the taking of the Partnership account, together with interest. [73]
6. Mr Baidarman denies that any amount is owing by him. [74] He claims an order that Mr Rosenbaum and Ironwell pay to him the amount found due by Mr Rosenbaum on the taking of the Partnership account, together with interest. He claims a declaration that he is entitled to compound interest on the amounts found to have been contributed by him to the Partnership in excess of the amounts contributed by Mr Rosenbaum from time to time. [75]
7. As I have already mentioned above, counsel conducted the hearing before me on the basis that a calculation of the partners' respective contributions to and withdrawals from the Partnership and an order for payment by one partner to the other, so as to equalise their net withdrawals from the Partnership assets, would serve as the Partnership account and facilitate the distribution to each partner of his entitlement in accordance with ss 39 and 44 of the Partnership Act, subject to the question of interest. In other words, it was assumed that the winding up of the Partnership under the direction of the Court would involve nothing more than an order requiring final payment to be made by one partner to the other in an amount to be calculated by applying the referee's findings (as adopted or varied by the Court) and the Court's findings.
8. I respectfully consider that this assumption is misconceived. The manner in which the partners conducted the Partnership has created an evidentiary problem when it comes to identifying the assets, liabilities, profits and losses of the Partnership. The evidence that has been adduced tends to suggest that all of the assets of the Partnership have been distributed to or appropriated by one or other of the partners through various transactions made prior to the commencement of these proceedings. The last property development project undertaken by the Partnership was completed in 1998. There is no evidence of any remaining real property that is owned by or on behalf of Mr Rosenbaum and Mr Baidarman in partnership. There is no evidence that the Partnership generated any goodwill. The tallying up of all of each partner's contributions to and withdrawals from the Partnership is a crude methodology for identifying whether or not each partner has contributed equally to generation of the assets of the Partnership in accordance with their agreement and the amount of assets already withdrawn by each partner. That crude methodology is all that is available in the circumstances of this case.
9. However, the liabilities of the Partnership must also be taken into account in determining the amount to which each partner is entitled as against the other following the dissolution of the Partnership: see Partnership Act, ss 39 and 44; Commissioner of State Revenue v Rojoda Pty Ltd (2020) 376 ALR 378; [2020] HCA 7 at [30]-[40] (Bell, Keane, Nettle and Edelman JJ) and [72]-[73] (Gageler J); Hungerford v Richardson [2018] NSWSC 1543 at [16], [26]-[27]. Whilst the Partnership has undertaken liabilities in the past, including loans to fund the development of various projects, the evidence did not suggest that the Partnership presently has any outstanding liability other than potential taxation liabilities. As I have already mentioned, no tax returns were ever prepared for the Partnership. Any tax liabilities of the Partnership (including any applicable fines and penalties) need to be ascertained. Any such liabilities may or may not result in the Partnership incurring a loss which the partners are required to bear equally in accordance with their agreement. This will need to be provided for as part of the taking of the Partnership account and the process for winding up the Partnership.
10. During the hearing before me, counsel for Mr Rosenbaum and Mr Baidarman expressed their expectation that they will be able to agree on the outcome of the Partnership account once they have had an opportunity to consider my reasons for judgment. As I indicated during the hearing, it may be necessary to order a further reference if that agreement is not achieved.

Claims relating to the Omega Unit Trust

1. Mr Baidarman claims an order that the administration and execution of the Omega Unit Trust be completed by and under the direction of the Court, and all declarations and orders necessary to be made to cause the beneficiaries' entitlements therein to be ascertained and paid. The Rosenbaum parties also contend that such an order should be made. [76]
2. Mr Baidarman also claims an order that an account be taken of the transactions of the Omega Unit Trust since 1 July 2010, including an enquiry into the respective entitlements of unitholders therein in respect of the sum of $1,720,674 paid on 28 September 2010 and the allowance to Baidarman Super of an adjustment for an alleged overpayment therefrom to Ironwell Super Fund. [77] Mr Baidarman also seeks a declaration that the trustee of the Omega Unit Trust has not determined the apportionment of, or final entitlement to, the sums totalling $1,720,674 paid to Baidarman Super and Ironwell Super in September 2010. [78]
3. The Rosenbaum parties do not oppose an order that an account be taken of the transactions of the Omega Unit Trust, but they contend that the account should be taken of the transactions since 1 July 2008. They accept that the taking of the account should include an inquiry into the respective entitlements of the unitholders in the Omega Unit Trust in respect of the sum of $1,720,674 paid in September 2010. They contend that the account should extend to any adjustments made to the beneficiary loan accounts and to the unit holdings of the Omega Unit Trust during the financial year ended 30 June 2009. [79] This would include the reduction of Ironwell Super's unit holdings by 603,892 units following the 2008 and 2009 withdrawals referred to at [30] above.
4. At the time of the hearing before me, there was a fundamental problem that affected both the application for an order for general administration referred to at [81] above and the claims for orders for the taking of an account of the Omega Unit Trust referred to at [82]-[83] above. The fundamental problem arose from the fact that Excelsea, the trustee of the Omega Unit Trust, had been deregistered in August 2014. [80]
5. During the hearing, I raised with counsel the futility of an order for general administration in circumstances where the parties apparently intended that Excelsea would carry out any steps ordered by the Court in the working out of any general administration order. Upon its deregistration, Excelsea had ceased to exist and its property vested in the Commonwealth (subject to pre-existing rights and interests in that property, including any rights and interests of the unit holders) pursuant to s 601AD of the Corporations Act 2001 (Cth). [81]
6. This state of affairs would also give rise to difficulties if an order were made for the taking of an account of the transactions of the Omega Unit Trust. Under such an order, the trustee would account to the beneficiaries who would then be at liberty to falsify the account and raise surcharges. The parties did not appear to contemplate that the Commonwealth would prepare the account, standing in the shoes of Excelsea as trustee pursuant to s 601AE(1) of the Corporations Act. The Commonwealth was not a party to the proceedings, in any event.
7. Mr Rosenbaum and Mr Baidarman then applied to the Australian Securities and Investments Commission (ASIC) to reinstate the registration of Excelsea. That application was successful and Excelsea's registration was reinstated after the conclusion of the hearing. Orders were then made by consent of all parties to these proceedings on 27 July 2020 joining Excelsea to the proceedings as the seventh cross-defendant. Excelsea had not been legally represented at the hearing and did not seek to be heard after being joined to the proceedings.
8. From the date of reinstatement of its registration, Excelsea is taken to have continued in existence as if it had not been deregistered. The cessation of its existence that caused it to cease to be the trustee of the Omega Unit Trust becomes invisible in the eyes of the law: Re Cenco Holdings Pty Ltd (2005) 53 ACSR 484; [2005] NSWSC 293 at [28]-[29]. Mr Rosenbaum and Mr Baidarman immediately became directors of the company again and property of Excelsea that had vested in the Commonwealth revested in Excelsea: Corporations Act, s 601AH. There is no evidence to suggest that Excelsea purported to deal with that property during the period of its deregistration, so I need not grapple with the issues discussed by White J (as his Honour then was) in Foxman v Credex National Australian Trade Exchange Pty Ltd (in liq) [2007] NSWSC 1422 at [42]-[44] and [65].
9. The parties' application for an order for general administration referred to at [81] above raises three further issues that it is convenient to identify at this stage.
10. First, the effect of a general administration order is to bring a halt to the administration of the trust so that no step may be taken without the leave of the Court. This is a cumbersome process, and it is relevant to the exercise of the discretion whether to make a general administration order that more targeted remedies are available to resolve specific questions arising in the administration of a trust: McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623 at 633-636. [82] Those more targeted remedies include applications under UCPR r 54.3 for the determination of any question which could be determined in proceedings for the execution of a trust under the direction of the Court, or for an order directing any act or thing to be done that the Court could order to be done if the trust were being executed under the direction of the Court. As Mr Baidarman's submissions acknowledged, an order under s 70 of the Trustee Act 1925 (NSW) appointing a new trustee in substitution for an existing trustee is another targeted remedy that presents an alternative to a general administration order in the circumstances of this case. [83]
11. Second, it appears from the terms of the proposed general administration order, which refers to the administration and execution of the trust being "completed by and under the direction of the Court", [84] the parties intend that the Court will make orders that will have the effect of bringing the trust to an end.
12. The Trust Deed for the Omega Unit Trust dated 2 May 1997 [85] does not provide for the trustee to wind up or terminate the trust. Unitholders are at liberty to redeem their units, but the trustee is obliged to hold the "Trust Fund" on the trusts created by the deed until the vesting day. The trust deed contains the common definition of vesting day, being 80 calendar years after the date of the deed or 18 calendar years after the date of death of the last survivor of the descendants of King George VI who are living as at the date of the deed. The definition of vesting day also provides that the trustee may in its absolute discretion determine an earlier vesting day. However, the parties made it clear in their oral closing submissions that they did not wish to bring about the vesting of the trust property in the unitholders. I infer that the parties apprehend adverse tax consequences for the unitholder if the trust property is vested in them.
13. The Court cannot terminate a trust in the same way that it would wind up a company or dissolve a partnership. It is the Court's duty to uphold and protect the trust, not bring it to an end: Re Gaydon [2001] NSWSC 473 at [29] (Barrett J, as his Honour then was).
14. Third, there is some doubt as to whether Mr Baidarman has standing to apply for a general administration order because he is not a beneficiary of the Omega Unit Trust: McLean v Burns Philp Trustee Co, supra, at 636-637. The parties' submissions did not address the question of standing.
15. In the alternative to the proposed general administration order, Mr Baidarman claims an order that a new trustee be appointed to the trust. The Rosenbaum parties oppose the appointment of a new trustee. [86]
16. In addition to the issues affecting the proposed order for general administration that I have referred to at [89]-[94] above, the parties' applications for orders for the taking of an account of the transactions of the Omega Unit Trust did not grapple with the nature of an order for the taking of an account of the transactions of a trust.
17. As I have mentioned above, such an order requires the trustee (as the fiduciary) to account to the beneficiaries (or, in this case unitholders) for the transactions undertaken in the discharge or purported discharge of the trustee's powers and duties. That is because the trustee is the accounting party in the accounting relationship between trustee and beneficiary: Meagher Gummow & Lehane's Equity Doctrines and Remedies (5th ed, 2015) at [26‑085]; see also, for example, Torlonia v Wright [2016] NSWSC 1139 at [8]-[9] and [53].
18. In this case, the parties assumed that Excelsea would take no steps to comply with any order for the taking of an account. Under the orders proposed by Mr Baidarman (without opposition from the Rosenbaum parties), the first step in the taking of the account would be for Mr Baidarman on the one hand and the Rosenbaum parties on the other hand to put forward their competing contentions as to the transactions undertaken by Excelsea as trustee of the Omega Unit Trust. The parties' desire to approach the matter in this way is no doubt attributable to the state of deadlock between Mr Rosenbaum and Mr Baidarman that has paralysed Excelsea since about 2010. That state of deadlock calls into question the utility of an order for the taking of an account if Excelsea remains the trustee of the Omega Unit Trust. However, it does not support an order for the taking of an account coupled with ancillary orders of the kind proposed that purport to remove any requirement for Excelsea to take any step for the purpose of that account being taken. [87]

Claims relating to the IPD Trust

1. Mr Baidarman claims an order that the administration and execution of the IPD Trust be completed by and under the direction of the Court, and all declarations and orders necessary to be made to cause the beneficiaries' entitlements therein to be ascertained and paid. The Rosenbaum parties also contend that such an order should be made. [88]
2. Mr Baidarman also claims an order that an account be taken of the transactions of the IPD Trust since 1 July 2010. [89] The Rosenbaum parties do not oppose an order to this effect. [90]
3. These proposed orders were affected by the same fundamental problem that arose in relation to the equivalent orders proposed in relation to the Omega Unit Trust. That fundamental problem has been addressed in the manner I have already explained at [85]-[88] above.
4. The additional issues discussed at [89]-[98] above apply equally to the proposed an order for general administration of the IPD Trust. The Trust Deed for the IPD Trust dated 1 May 1997 [91] does not provide for the trustee to wind up or terminate the trust and my observations at [92] above concerning the definition of "vesting day" apply equally to the IPD Trust Deed.
5. Mr Baidarman makes an alternative claim for an order that a new trustee be appointed to the IPD Trust. The Rosenbaum parties oppose an order appointing a new trustee. [92]
6. The problems discussed at [96]-[98] above apply equally in relation to the parties' claims for an order for the taking of an account of the IPD Trust.

Other claims

1. For completeness, I note that Mr Baidarman claimed an order that Mrs Rosenbaum pay to him the amount of $104,000 with compound interest or, alternatively, interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW). [93] No submissions were directed to this claim and it is not apparent how it arises from the pleaded facts. I have been unable to discern from the parties' affidavits any evidence relating to a claim of Mr Baidarman for payment by Mrs Rosenbaum of an amount of $104,000, or amounts totalling $104,000. In those circumstances, there will be an order dismissing this claim.

Costs

1. All parties claim orders for their costs of the proceedings. [94]

B. STRUCTURE OF THESE REASONS

1. Section C of this judgment describes the issues for determination, the events in the context of which those issues must be understood and considered and the parties' claims for relief relating to each issue.
2. Section D of these reasons addresses the issues identified in Section C and my decision and reasons for decision in relation to each issue.
3. Section E of these reasons summarises my conclusions.

Formation of the Partnership and terms of the Partnership Agreement (1985-1987)

1. In a series of conversations during the period between about 1985 and 1987, Mr Rosenbaum and Mr Baidarman formed an oral agreement to commence and carry on the business of property development together, and to be partners in that business. [95] I shall refer to this oral agreement as the Partnership Agreement.
2. The Partnership Agreement included terms to the following effect: 1. each partner would contribute equally to the Partnership and would share equally in the profits or losses of the Partnership; [96] 2. a partner making any advance for the purpose of the Partnership beyond the amount of capital that the partner agreed to subscribe was entitled to interest at the rate of 7% per annum from the date of the payment or advance; [97] and 3. the partners would act in good faith in their dealings with one another. [98]
3. As I have already mentioned earlier in these reasons, the Partnership was a partnership at will. [99]

Merton Street project and the role of Ironwell (1991-1993)

1. In about 1991, Dabjade (on behalf of the Partnership) entered into a contract with Villaland Pty Ltd to develop as joint venturers ten villas on two adjoining properties at Merton Street, Sutherland. Villaland Pty Ltd (Villaland) was the owner of one of the two properties. On completion of the project, the Partnership was to receive the benefit of the sale of five of the villas and Villaland was to receive the benefit of the sale of the other five villas. [100]
2. Mr Rosenbaum has held a New South Wales builders' licence since 1989. [101] On 3 July 1991, Dabjade and Villaland, as joint venturers, entered into a contract with Mr Rosenbaum for the construction of the Merton Street development (the Merton Street construction contract). [102]
3. Mr Rosenbaum claims that he entered into the Merton Street construction contract in his own right. Mr Baidarman disputes this, and says that Mr Rosenbaum was acting as an agent for the Partnership in entering into the Merton Street construction contract. [103]
4. In November 1991, Mr and Mrs Rosenbaum became the sole shareholders and directors of Ironwell and a bank account in Ironwell's name was established with the Advance Bank (the Ironwell account). [104]
5. The Rosenbaum parties contend that Mr Rosenbaum acquired Ironwell in November 1991 as the corporate vehicle for him to undertake the construction work for the Partnership's Merton Street project. Although the Rosenbaum parties acknowledge that the Partnership undertook construction work for certain later projects, they contend that Ironwell carried out the construction work for the Merton Street project in its own right and not on behalf of the Partnership. [105]
6. Mr Baidarman disputes this. He contends that he and Mr Rosenbaum purchased Ironwell together using Partnership funds and that it was acquired as a corporate vehicle through which the Partnership business would be conducted. Mr Baidarman contends that the shares in Ironwell are Partnership property and are held by Mr and Mrs Rosenbaum on trust for the partners for the purposes of the Partnership. [106]
7. The Rosenbaum parties deny that Partnership funds were used to acquire Ironwell. They deny that the shares are Partnership property, or are held on trust for the partners. [107]
8. The Merton Street project was financed by a loan from Westpac Banking Corporation (Westpac) to Dabjade and Villaland. It is not in dispute that, during the course of the project, certain deposits were made into the Ironwell account and that these deposits were made from funds drawn down from that Westpac loan. Mr Baidarman contends, and the Rosenbaum parties deny, that those deposits were Partnership funds. [108] Mr Baidarman's position reflects his contention that the construction work for the Merton Street project was carried out on behalf of the Partnership. [109] The Rosenbaum parties' position reflects their contention that Mr Rosenbaum and Ironwell undertook the construction work in their own right and that the deposits were progress payments under the Merton Street construction contract.
9. It is not in dispute that subcontractor and other construction costs for the Merton Street project were paid out of the Ironwell account. [110]
10. Certain other expenses relating to the Merton Street project were also paid out of the Ironwell account during the period from November 1991 to March 1993. The Rosenbaum parties contend that the total amount of these payments was $21,747. Mr Baidarman does not admit the amount of the payments. [111] The Rosenbaum parties contend, and Mr Baidarman denies, that these payments were a contribution to the Partnership made by Ironwell on behalf of Mr Rosenbaum. [112]
11. There is a dispute between the parties about the date on which the Merton Street project was completed. The Rosenbaum parties contend, and Mr Baidarman denies, that construction was completed by April 1992. [113] Mr Baidarman contends that practical completion occurred in September 1992. [114]
12. In September 1992, an amount of $87,371.03 was withdrawn by cheque from the Ironwell account. This represented substantially the whole of the credit balance of the Ironwell account at that time. Ironwell deposited this amount together with an additional sum of $186,400, being the proceeds of the last progress payment under the Merton Street construction contract, in a Westpac bank bill facility in the name of Ironwell (the Westpac facility). The amount held in the Westpac facility was $275,000, including interest. The Rosenbaum parties contend that this sum of $275,000 represented Ironwell's profits on the construction of the Merton Street project. Mr Baidarman denies this and says that the $275,000 transferred to the Westpac facility was Partnership money because it was revenue derived from the Merton Street construction contract and the proceeds of sale of Merton Street villas. [115]
13. The Westpac facility was rolled over from time to time. Further money may have been deposited from the Ironwell account into the Westpac facility from time to time. [116]
14. In April 1991, Mr Baidarman provided a $75,000 term deposit as part of the security for the Westpac loan that financed the Merton Street project. Mr Baidarman claims that this same fund of $75,000 was applied to service interest on the Westpac loan during the period between 1991 and 1994, for the benefit of the Partnership. Mr Baidarman contends that these interest payments should be treated as a contribution to the Partnership on the taking the Partnership account. [117]
15. The Rosenbaum parties deny that interest payments on the Westpac loan were paid from the term deposit. [118]
16. Mr Baidarman disputes the referee's finding that Mr Rosenbaum made interest payments of $11,972 against a loan for the Merton Street project. [119]
17. In relation to the Merton Street project, the Rosenbaum parties also claim (and Mr Baidarman denies) that: [120] 1. Mr Rosenbaum contributed to the Partnership an amount of $1,006 paid on 29 May 1992 for council rates in respect of the Merton Street project site; 2. Mr Baidarman made the following withdrawals from the Partnership: 1. $10,000 received by Mr Baidarman in April 1993 as a deposit from a prospective purchaser of one of the units developed in the Merton Street project; 2. $590 paid to Mr Baidarman in cash in April 1992 by the project surveyor in return for surplus tiles; and 3. $20 paid to Mr Baidarman in cash in May 1992 by the painter in return for surplus fibro sheets.
18. Mr Baidarman claimed to have made contributions to the Partnership by paying lawn mowing expenses and council rates and making some small payments to labourers in in connection with the Merton Street project. The Rosenbaum parties disputed these claims. By the end of the hearing, Mr Baidarman had elected not to press them. [121]

Claims for relief concerning Ironwell and the Merton Street project

1. In relation Ironwell, Mr Baidarman claims: 1. a declaration that the shares in Ironwell are property of the Partnership; [122] 2. a declaration that the assets of Ironwell are property of the Partnership; [123] and 3. declarations and orders that, upon the taking of accounts of the Partnership: 1. the assets, income and expenses of Ironwell are and ought to be brought to account as Partnership property and transactions; [124] 2. transfers of funds from Ironwell for the purpose of the Partnership are and ought to be brought to account as applications of Partnership funds. [125]
2. The Rosenbaum parties oppose those declarations and orders.
3. Whether or not the declarations and orders referred to above are made is one matter that will potentially affect the determination of: 1. Mr Rosenbaum's claim to have contributed to the Partnership the sum of $21,747 referred to at [122] above for the purpose of the Merton Street project and his claim referred to at [147]-[150] below to have contributed the proceeds of the Westpac facility to the Partnership for the purpose of the Port Hacking Road project. These amounts form part of Mr Rosenbaum's claim to have contributed $303,509.47 to the Partnership during the period November 1991 to July 1994, which is addressed later in these reasons under the Port Hacking Road project; 2. the parties' claims and contentions concerning a $37,000 payment made to the Ironwell Super Fund on 23 December 1993 (see [199]-[202] below); 3. the parties claims and contentions concerning the alleged payment of wages by Ironwell to Mrs Rosenbaum during the period from 1994 to 1996 (see [238]-[241] below); 4. the parties claims and contentions concerning the alleged payment of management fees by Ironwell to Mrs Rosenbaum in 1999 (see [247]-[249] below); and 5. the parties claims and contentions concerning the alleged payment of dividends by Ironwell to Mr and Mrs Rosenbaum in 2001 and 2002 (see [250]-[253] below).
4. In relation to the Merton Street project, the Rosenbaum parties claim (an order that, on the taking of the Partnership account, credit be given to Mr Rosenbaum for the contribution of $1,006 paid for council rates, as referred to in [129(a)] above. [126]
5. The Rosenbaum parties also claim orders that, on the taking of the Partnership account, Mr Baidarman be debited with the following amounts as withdrawals from the Partnership: 1. $10,000 alleged to have been received by Mr Baidarman as a deposit from a prospective purchaser of one of the Merton Street units, as referred to at [129(b)(i)]; [127] 2. $590 alleged to have been received by Mr Baidarman as payment for surplus tiles, as referred to at [129(b)(ii)]; [128] and 3. $20 alleged to have been received by Mr Baidarman as payment for surplus fibro sheets, as referred to at [129(b)(iii)]. [129]
6. Mr Baidarman claims an order that, on the taking of the Partnership account, his payment of $75,000 in loan interest expenses referred to at [126] above be allowed as a contribution by Mr Baidarman to the Partnership. The Rosenbaum parties seek an order that Mr Baidarman's claim to have made this contribution to the Partnership be dismissed. [130]
7. Mr Baidarman also claims an order that Mr Rosenbaum's claim to have contributed to the Partnership the interest payments of $11,972 against a loan for the Merton Street project referred to in [128] above be dismissed. This was not pleaded in Mr Baidarman's defence or cross-claim, and emerged for the first time in the defendant's proposed partnership accounting orders. [131] The Court adopted the referee's finding that Mr Rosenbaum paid $11,972 in interest payments against a loan relating to the Merton Street project. The Court orders did not include any qualification, reservation or notation that would permit Mr Baidarman to revisit that particular item now: see [64]-[65] above. Accordingly, it is not open to Mr Baidarman to do so, and his claim for an order disallowing Mr Rosenbaum's claim to have contributed those interest payments to the Partnership is dismissed. [132] It will not be necessary for me to address this claim in Section D of these reasons.
8. Mr Baidarman also claims an order that Mr Rosenbaum's claim to have contributed to the Partnership the amount of $481 paid for Merton Street maintenance expenses be dismissed. Again, this was not pleaded in Mr Baidarman's defence or cross-claim, and emerged for the first time in the defendant's proposed partnership accounting orders. [133] The Court adopted the referee's finding that Mr Rosenbaum paid $481 in maintenance costs relating to the Merton Street project. The orders made by the Court on 10 September 2018 adopting the referee's report did not include any qualification, reservation or notation that would permit Mr Baidarman to revisit that particular item now: see [64]-[65] above. Accordingly, Mr Baidarman's claim for an order disallowing Mr Rosenbaum's claim to have contributed those maintenance payments to the Partnership is dismissed and it will not be necessary for me to address this claim in Section D of these reasons. [134]
9. In relation to Mr Baidarman's claims referred to in [130] above that are no longer pressed, paragraph 59 of the Cross-Claim will be dismissed insofar as it relates to items 47, 54, 61, 62, 73 and 110 of schedule MFI-4 to the referee's report.
10. There are additional claims for relief in relation to specific transactions of Ironwell that are not related to the Merton Street development. I will identify these claims in those parts of Section C below in which I outline the issues in dispute concerning those transactions.

Port Hacking Road project and sale (1991-1998)

1. During the period from approximately 1991 to 1994, the Partnership undertook a development project at Port Hacking Road, Caringbah. [135]
2. It is common ground that the site for the Port Hacking Road project was purchased by Mr and Mrs Rosenbaum in April 1991 with the intention that the Partnership would subsequently develop the site. [136]
3. Mr Baidarman claims to have contributed $25,117 towards the purchase of the Port Hacking Road project site, or expenses associated with that purchase, in 1991. The Rosenbaum parties deny this. [137]
4. Mr Rosenbaum claims to have contributed a total amount of $18,800 towards the deposit for the Port Hacking Road project site in 1991. Mr Baidarman disputes this. [138]
5. Mr Rosenbaum also claims to have made a contribution of $8,181 to the Partnership on 30 June 1992 by paying development and building approval application fees in respect of the Port Hacking Road project site. [139] Mr Baidarman denies this. [140]
6. Construction of the Port Hacking Road project commenced in May or June 1993. [141]
7. At some time prior to May 1993, Mr Rosenbaum and Mr Baidarman orally agreed that the money held in the Westpac facility referred to at [124] above (which then amounted to $276,255.26) would be used to fund the construction of the Port Hacking Road project. [142]
8. It is common ground that, during the period from 12 June 1993 to 12 October 1993, Ironwell transferred the total amount of $276,255.26 from the Westpac facility to the Ironwell account. [143]
9. The Rosenbaum parties contend that this amount, together with a further amount of $5,507.21 standing to the credit of the Ironwell account as at 1 June 1993 before the transfer of the Westpac facility funds, was drawn down over the period from June 1993 to July 1994 to pay Partnership expenses. Mr Baidarman does not admit this. [144]
10. The Rosenbaum parties contend that these withdrawals from the Ironwell account, together with the withdrawals of $21,747 for the Merton Street project to which I have referred at [122] above, represent a contribution of $303,509.47 by Ironwell (on behalf of Mr Rosenbaum) to the Partnership during the period from November 1991 to July 1994.
11. Mr Baidarman denies this. He contends that the shares in Ironwell were held by Mr and Mrs Rosenbaum "upon trust for the partners for the purpose of the partnership" and that funds held by Ironwell from time to time were "partnership funds and held by it upon trust for the partners for the purpose of the partnership". [145]
12. During the whole of the period from Mr and Mrs Rosenbaum's purchase of the Port Hacking Road project site in April 1991 until about mid-1994, the land was encumbered by a mortgage. Advance Bank was the mortgagee in April 1991. At some stage, the loan was refinanced and Westpac became the mortgagee. [146]
13. The Rosenbaum parties contend that Mr Rosenbaum paid the mortgage and associated bank fees, and that these payments amounted to $36,350 during the period from April 1991 to 1994. Mr Rosenbaum claims the amount of $36,350 as a contribution to the Partnership. [147]
14. Mr Baidarman does not admit that Mr Rosenbaum made these mortgage payments. He claims that the Port Hacking Road site was tenanted and Mr Rosenbaum, on behalf of the Partnership, undertook to apply the rent to the mortgage liabilities. He alleges that Mr Rosenbaum has failed to account for the rent received and for the transactions on the mortgage account, and has converted the rent to his own use. Mr Baidarman does not admit that the alleged mortgage payments should be treated as a contribution of $36,350 by Mr Rosenbaum to the Partnership on the taking of the Partnership account. [148] Mr Baidarman also claims that Mr Rosenbaum claimed personal tax deductions for the alleged mortgage repayments, and that $1,441 of the mortgage repayments was in fact paid by Mr Baidarman. [149] In all the circumstances, Mr Baidarman contends that it is not just and equitable that Mr Rosenbaum should be permitted to charge the partnership with the alleged mortgage payments even if he establishes that he in fact made those payments. [150]
15. The Port Hacking Road project involved the construction of two villas. [151]
16. The Rosenbaum parties contend that, in conversations between Mr Rosenbaum and Mr Baidarman early 1991 and in November or December 1993, the two men agreed each of them would retain one of the villas on completion of the Port Hacking project, that Mr Rosenbaum would choose which villa he wished to retain and Mr Baidarman would retain the other villa, each of them would be free to retain or dispose of his villa at his own discretion and any difference in price between the two villas would be settled between them at a later time. Mr Rosenbaum subsequently selected villa 2 as the villa that he would retain. [152]
17. Mr Baidarman denies this and says that the alleged agreement was not in writing or evidenced by any note or memorandum signed by Mr Baidarman. There is no dispute that Mr and Mrs Rosenbaum occupied villa 2 from around the time that the Port Hacking Road development was completed (between about February and April 1994) until it was sold in March 1998 for $390,000. [153] Mr Baidarman contends that villa 2, and the proceeds of its sale, were held by Mr and Mrs Rosenbaum on trust for the Partnership. [154] Mr Baidarman further contends that: [155] "… [Mr Rosenbaum] wilfully defaulted in his obligations as a partner not to profit at the expense of the partnership in that he had the use and occupation of Villa 2 without accounting for the benefit thereof, and had the use and enjoyment of the proceeds of sale thereof for many years without accounting therefor and without account for the benefit thereof, for which benefit he still has not accounted. [Mr Baidarman] charges that on taking accounts [Mr Rosenbaum] ought to be charged for the benefit of that occupation at a fair market rental with compound interest and that he ought be charged with compound interest at the trustee rate upon the proceeds of sale."
18. Relying on the agreement that they claim Mr Rosenbaum and Mr Baidarman made that they would each retain one villa, the Rosenbaum parties deny that Mr Rosenbaum had any obligation to repay or account to the Partnership for the proceeds of sale of villa 2. [156]
19. It is common ground that, in March 1998, Mr Rosenbaum did pay to the Partnership amounts totalling $249,656, and the source of those payments was the sale proceeds of villa 2. There is a dispute between the parties as to whether this amount should be credited to Mr Rosenbaum as a contribution to the Partnership on the taking of accounts, or whether it should be deducted from the full amount of the villa 2 sale proceeds for which Mr Baidarman contends Mr Rosenbaum is obliged to account. [157] The orders made by the Court on 10 September 2018 noted that the question whether Mr Rosenbaum is chargeable with the proceeds of sale of villa 2 remained to be determined by the Court. [158]
20. The Rosenbaum parties also say that, during the 2006 Reconciliation, each of the partners were "debited with the construction cost of their individual villas" at Mr Baidarman's insistence. [159] As I understand it Mr Rosenbaum has raised this issue in support of a contention that, if he was not entitled to keep villa 2 in accordance with the alleged agreement referred to above, then he was entitled to keep it once he effectively paid the Partnership for villa 2 in treating the construction cost of villa 2 as a withdrawal by him from the Partnership in the 2006 Reconciliation and in his schedule of contributions and withdrawals prepared for the purpose of the reference in these proceedings. [160]
21. For completeness, I note that Mr Baidarman pleaded that, in 1993, Mr Rosenbaum applied $9,285 of Partnership money towards the improvement of villa 2 for his own benefit, and failed to repay or account to the Partnership for that money. [161] However, Mr Baidarman does not seek any relief in these proceedings concerning the $9,285 improvements, consistently with his position that villa 2 and the sale proceeds thereof was property of the Partnership.
22. The Rosenbaum parties acknowledge that Mr Rosenbaum and Mr Baidarman calculated that Mr Rosenbaum owed $9,285 in relation to improvements to villa 2, but say that this was determined in the reference process. Mr Rosenbaum points to the amount of $9,718 that he included in his schedule of withdrawals and item 85 of schedule MFI-1 to the referee's report. [162] The referee accepted this withdrawal, but adjusted the amount to $9,329. [163] This was one of the findings adopted by the Court without any qualifying notation in the orders made on 10 September 2018.
23. However, item 85 in schedule MFI-1 to the referee's report is not described as relating to improvements for villa 2 at Port Hacking Road. There was no evidence demonstrating that the $9,718 amount included in item 85 is the same as the improvements that the partners calculated to have cost $9,285, and I do not assume that they are the same.
24. Villa 1 was sold for $290,000 in March 1994 - that is, immediately upon completion of the Port Hacking Road project. [164]
25. Mr and Mrs Rosenbaum were the vendors under the contract for sale, as they remained the registered owners of the land. [165]
26. Consistently with their contention that Mr Baidarman and Mr Rosenbaum were to have villas 1 and 2 respectively to retain or dispose of as they saw fit, the Rosenbaum parties contend that the sale of villa 1 was undertaken by Mr and Mrs Rosenbaum on behalf of Mr Baidarman. [166]
27. Mr Baidarman denies that the sale was made on his behalf or at his direction. He says that villa 1 was sold by or on behalf of the Partnership. [167]
28. Mr Baidarman claims that he did not receive any proceeds from the sale of villa 1 or any other benefit from that sale. [168]
29. It is common ground that the following payments were made from the proceeds of sale of villa 1: 1. $120,000 was paid to Westpac in partial discharge of the Partnership's indebtedness to Westpac; [169] 2. $142,508.05 was invested in two commercial bills with Westpac in the name of Ironwell; [170] 3. $29,169.44 was paid to Mrs Rosenbaum. [171]
30. In relation to the payment of $29,169.44 to Mrs Rosenbaum, Mr Baidarman alleges that Mr Rosenbaum caused or permitted this in wilful default of his obligations as a partner not to profit or allow another to profit from his position at the expense of the Partnership. [172] Mr Baidarman complains that Mr and Mrs Rosenbaum have failed to repay or account to the Partnership for the $29,169.44 and contends that, on the taking of the Partnership account, Mr Rosenbaum should be charged with the sum of $29,164.44 and compound interest. [173]
31. The Rosenbaum parties deny that Mr and Mrs Rosenbaum failed to account to the Partnership for the $29,169.44. They plead that: [174] "The contribution to the partnership of the proceeds of the sale of Villa 1 (by [Mr Baidarman]) were taken into consideration in a reconciliation between the partners in 2006 ('the 2006 Reconciliation'). The amount received by [Mrs Rosenbaum] ($29,169) has been acknowledged by Mr Rosenbaum and appears in MFI-1 at item 92."
32. The amount of $29,169 was included in Mr Rosenbaum's list of withdrawals that he had made from the Partnership at item 92 of schedule MFI-1 to the referee's report. [175] The referee's report records that Mr Baidarman had accepted this withdrawal. Accordingly, the report proceeded on the basis that the transaction occurred. The orders of the Court made on 10 September 2018 adopting the referee's report did not make an exclusion or qualifying notation in relation item 92 of schedule MFI-1.
33. In relation to the $142,508.05 invested in two Westpac commercial bills, Mr Baidarman contends that some of the funds in the Westpac bills were repaid to the Partnership in September 1995 and the remaining funds were then transferred to an ANZ Bank commercial bill facility of $200,000 held in the name of Ironwell (the ANZ facility). Mr Baidarman claims that the ANZ facility and the income thereon yielded $205,439.99 as at 6 February 1996, and that these monies were Partnership property held by Ironwell as agent for the Partnership. [176] These matters are not admitted by the Rosenbaum parties. [177]
34. The three payments in [169] above that the parties agree were made out of the villa 1 sale proceeds in fact amount to slightly more than the $290,000 sale price of villa 1.
35. Nevertheless, Mr Baidarman alleges that the following additional payments were made out of the villa 1 sale proceeds: [178] 1. $1,297.58 was deposited into an account held by Ironwell with Westpac; and 2. $197.50 was paid to the solicitor who acted on the sale of villa 1.
36. The Rosenbaum parties do not admit that these two additional payments were made. [179]
37. It follows from the fact that the $290,000 sale proceeds of villa 1 would have been exhausted by the three undisputed payments referred to in [169] above, that the two additional payments alleged by Mr Baidarman could not have been made from the villa 1 sale proceeds. It is therefore unnecessary to recount Mr Baidarman's contentions concerning the consequences of the alleged mixing of the sum of $1,297.58 with other funds of Ironwell. [180]
38. The Rosenbaum parties claim that they paid the following amounts to the Australian Taxation Office on behalf of Mr Baidarman "in relation to tax on the sale of villa 1": [181] 1. $9,912 paid by Mrs Rosenbaum and Tania Rosenbaum in June 1994; and 2. $13,816 paid by Ironwell in February 1995.
39. The Rosenbaum parties claim that the sum of $9,912 should be treated as a "direct payment" made on behalf of Mr Rosenbaum to Mr Baidarman, and that the sum of $13,816 should be treated as a withdrawal from the Partnership by Mr Baidarman. [182]
40. Mr Baidarman denies that either of these two payments were made to the Australian Taxation Office. He notes that the payments were found by the referee not to be established [183] and contends that the Court should adopt those two findings made in the referee's report. [184] However, the Court has already declined to adopt those aspects of the referee's report. [185]
41. If and to the extent that the payments are found to have been made, Mr Baidarman denies that they should be treated in the manner contended for by the Rosenbaum parties. [186]
42. The Rosenbaum parties contend that, during the 2006 Reconciliation, Mr Rosenbaum and Mr Baidarman agreed that villa 2 was worth $10,000 more than villa 1. [187] Mr Baidarman denies reaching any such agreement. [188]
43. In relation to the Port Hacking Road project, Mr Rosenbaum also alleges that Mr Baidarman received $645 in cash for the sale of various surplus materials and that this should be treated as a withdrawal by Mr Baidarman from the Partnership. Mr Baidarman denies this and says that the cash was shared equally between him and Mr Rosenbaum. [189]
44. Finally, Mr Rosenbaum contends that a payment of $115 that he made to Mr Baidarman on 28 January 1994 for repairs to villa 1 should be treated as a direct transaction. [190] Mr Baidarman denies this, and says the payment should be treated as a contribution by Mr Rosenbaum to the Partnership. [191]

Claims for relief in relation to the Port Hacking Road project

1. Mr Baidarman seeks an order that, on the taking of the Partnership account, the amount of $25,117 referred to at [143] above be allowed as a contribution by Mr Baidarman to the Partnership. [192] The Rosenbaum parties seek an order dismissing Mr Baidarman's claim for the allowance of that contribution. [193]
2. Mr Rosenbaum seeks an order that, on the taking of the Partnership account, the amount of $18,800 referred to at [144] above be credited to him as a contribution to the Partnership. Mr Baidarman seeks an order dismissing the claim for the allowance of that contribution. [194]
3. The Rosenbaum parties seek an order that, on the taking of the Partnership account, the amount of $8,181 referred to at [145] above be allowed as a contribution by Mr Rosenbaum to the Partnership. Mr Baidarman seeks an order dismissing the Rosenbaum parties' claim for the allowance of that contribution. [195]
4. The Rosenbaum parties seek a declaration and order that, on the taking of the Partnership account, credit be given to Mr Rosenbaum for contribution to the Partnership in the amount of $303,509.47 paid through the Ironwell account during the period from November 1991 to July 1994: see [146]-[151] above. Mr Baidarman seeks an order dismissing the Rosenbaum parties' claim for the allowance of that contribution or credit. [196]
5. The Rosenbaum parties seek a declaration and order that, on the taking of the Partnership account, credit be given to Mr Rosenbaum for contribution to the Partnership in the amount of $36,530 for payments towards the mortgage on the Port Hacking Road project site: see [152]-[154] above. Mr Baidarman contends that the appropriate order is that Mr Rosenbaum be credited with a contribution to the Partnership in the amount representing the difference between the mortgage payments made by Mr Rosenbaum and the rent that he received in respect of the Port Hacking Road project site, and that the Rosenbaum parties' claim for the allowance of contribution or credit for Port Hacking Road mortgage payments should otherwise be dismissed. [197]
6. Mr Baidarman seeks orders that, on the taking of the Partnership account, Mr Rosenbaum be charged with: 1. an occupation fee in respect of villa 2 in the Port Hacking Road development for the period from November 1993 to 18 March 1998; [198] and 2. liability to the Partnership for $390,000 from 18 March 1998 in respect of proceeds of the sale of villa 2 in the Port Hacking Road development, subject to Mr Rosenbaum being allowed credit for the sum of $249,656, being the sale proceeds that Mr Baidarman accepts Mr Rosenbaum paid back into the Partnership. [199]
7. The Rosenbaum parties seek orders dismissing Mr Baidarman's claims that Mr Rosenbaum has failed to repay or account for the benefit of the possession of villa 2 and the sale proceeds of villa 2. [200] In addition, they seek an order that, on the taking of the Partnership account, Mr Rosenbaum's claim to have contributed the amounts totalling $249,656 to the Partnership be allowed. [201]
8. Mr Baidarman also seeks an order dismissing Mr Rosenbaum's claim in item 90 of schedule MFI-1 to the referee's report that the sum of $221,454 (being the cost of construction of villa 2) be treated as a withdrawal from the Partnership by Mr Rosenbaum. [202] The Rosenbaum parties seek an order that, on the taking of the Partnership account, Mr Rosenbaum be debited with the $221,454 cost of construction of villa 2. [203] Neither party seeks any declaration, order or direction concerning the cost of construction of villa 1.
9. Although the Rosenbaum parties contended that they had previously agreed with Mr Baidarman that villa 2 (which they claim Mr Rosenbaum was entitled to keep for his own benefit) was worth $10,000 more than villa 1 (which they claim Mr Baidarman was entitled to keep for his benefit), [204] the various declarations and orders sought by the Rosenbaum parties do not include any debiting of Mr Rosenbaum for this value differential in the event that the Court accepts his contention that he and Mr Baidarman were entitled to retain villa 2 and villa 1 respectively.
10. As I have already noted, Mr Baidarman did not seek any specific relief in relation to the improvements to villa 2 referred to at [161]-[162] above. The Rosenbaum parties seek an order dismissing Mr Baidarman's claim that Mr Rosenbaum failed to repay or account for $9,285 in respect of improvements to villa 2, but no such order is necessary because no such claim was made. [205]
11. As referred to in [170]-[172] above, the only question to be determined in relation to the sum of $29,169.44 that was paid to Mrs Rosenbaum from the sale proceeds of villa 1 in the Port Hacking Road project is whether, on the taking of the Partnership account, Mr Rosenbaum should be charged with compound interest on this amount which he has already acknowledged as a withdrawal by him from the Partnership. [206]
12. The Rosenbaum parties claim declarations and orders that, on the taking of the Partnership account, credit be given to Mr Rosenbaum for the payments of $9,912 and $13,816 for taxation referred to at [178]-[181] above on the basis that they were liabilities of Mr Baidarman paid by Mr Rosenbaum on his behalf and should therefore be treated as contributions by Mr Rosenbaum to the Partnership: see [18] above. [207] Mr Baidarman seeks an order dismissing Mr Rosenbaum's claims to be credited with amounts that the referee found were not verified, including the payments of $9,912 and $13,816. [208]
13. The Rosenbaum parties also sought an order that, on the taking of the Partnership account, Mr Baidarman be debited with the amount of $645 referred to at [183] as a withdrawal from the Partnership by Mr Baidarman. [209] Mr Baidarman seeks an order dismissing that aspect of the Rosenbaum parties' claims for relief. [210]
14. Finally, Mr Rosenbaum seeks an order that his payment of $115 made directly to Mr Baidarman and referred to in [184] above be credited to him. [211] Mr Baidarman seeks an order that the said amount be allowed as a contribution by Mr Rosenbaum to the Partnership and not as a surcharge (that is a withdrawal from the Partnership) against Mr Baidarman. [212]

Payment to Ironwell Super (December 1993)

1. It is common ground that a payment of $37,000 was made to Ironwell as trustee of Ironwell Super on 23 December 1993. [213]
2. The Rosenbaum parties contend that this payment was made by Mr Rosenbaum from his own personal funds and represents a contribution made by Mr Rosenbaum to the Partnership. [214] The basis on which this contention was put by the end of the hearing is not entirely clear. As I understand the submissions made by counsel for the Rosenbaum parties, it was put on the basis that: [215] 1. the source of the funds from which the $37,000 was paid was $167,698 of the Merton Street project sale proceeds that Mr Rosenbaum had caused to be deposited into Mrs Rosenbaum's account, but the $37,000 should be treated as Mr Rosenbaum's personal funds because Mr Rosenbaum had acknowledged in schedule MFI-1 to the referee's report that he should be charged with the withdrawal of the $167,698, and Mr Baidarman had accepted that withdrawal during the reference process in these proceedings; 2. the partners had agreed when Ironwell Super was established that funds and assets of Ironwell Super would be treated as Partnership assets, and the partners continued to believe up to about 2010 that the assets of Ironwell Super would be treated in this way (although Mr Rosenbaum withdrew the contention during the hearing that the assets of Ironwell Super should be treated as assets of the Partnership); [216] and 3. Mr Baidarman himself had claimed payments that he made to Baidarman Super as contributions to the Partnership, and Mr Rosenbaum had accepted during the reference process that Mr Baidarman should be credited with these contributions.
3. Mr Baidarman denies that the payment of $37,000 to Ironwell Super should be treated as a contribution by Mr Rosenbaum to the Partnership, essentially for two reasons: [217] 1. Mr Rosenbaum did not have his authority or consent to take the $167,698 Merton Street sale proceeds from which the $37,000 payment was made. It follows that the $37,000 payment cannot be treated as having been made by Mr Rosenbaum from his own personal funds irrespective of the fact that Mr Rosenbaum has subsequently acknowledged (and Mr Baidarman has accepted) in the reference process in these proceedings that Mr Rosenbaum should be debited with a withdrawal of $167,698 from the Partnership in December 1993 on the taking of a final account of the Partnership; and 2. as at December 1993, the partners had not agreed that they would treat assets of Ironwell Super as assets of the Partnership. Rather, the partners agreed in January 1995 that the Partnership would contribute equally to Ironwell Super and to Mr Baidarman's superannuation fund (which was subsequently established as Baidarman Super).
4. Mr Baidarman alleges that, by taking the $37,000 paid into Ironwell Super from Partnership property, Mr Rosenbaum defaulted in his obligations as a partner to act in good faith and to refrain from profiting at the expense of the partners. [218]

Claims for relief in relation to the payment to Ironwell Super

1. The Rosenbaum parties seek a declaration and order that, on the taking of the Partnership account, credit be given to Mr Rosenbaum for the $37,000 payment to Ironwell Super as a contribution to the Partnership by Mr Rosenbaum. [219] Mr Baidarman seeks an order dismissing this claim of the Rosenbaum parties. [220]
2. Mr Baidarman charges that, on the taking of the Partnership account, Mr Rosenbaum "ought to be surcharged with the amount of $37,000 and all benefits accruing to him or anyone else arising from the taking and enjoyment thereof, or with compound interest at the trustee rate." [221]

Alleged $26,000 loan to Mr Baidarman (October 1994)

1. It is common ground that Mr Rosenbaum paid the sum of $26,000 to Mr Baidarman on 21 October 1994. Mr Rosenbaum alleges that the payment was a loan for Mr Baidarman to use in the development of his own property (that is, not a Partnership development). Mr Baidarman acknowledged asking Mr Rosenbaum for the $26,000 payment for his own personal purposes that were not connected with the Partnership, and accepted that he had received the payment from Mr Rosenbaum in October 1994. However, Mr Baidarman claimed that this was a partial repayment of a $40,000 loan that he had earlier made to Mr Rosenbaum. In any event, Mr Baidarman contends that any claim now being made to recover the loan is statute barred due to the expiry of the limitation period. [222]
2. The Court adopted the referee's finding that the $26,000 payment was made, but noted that the referee had not made a finding that it was "a partnership transaction". [223]

Claims for relief in relation to the $26,000 payment

1. The Rosenbaum parties seek an order that, on the taking of the Partnership account, credit be given to Mr Rosenbaum for the $26,000 as a direct transaction: see [17]-[18] above. [224] Mr Baidarman seeks an order dismissing this claim. [225]

Alleged used of Partnership funds for construction and development of Mr Rosenbaum's Sumner Street property (1994-1995)

1. During 1994 and 1995, Mr Rosenbaum was developing a property at Sumner Street, Sutherland (the Sumner Street property). This was not a Partnership activity.
2. It is common ground that Mr Rosenbaum used some Partnership funds for the construction and development of the Sumner Street property.
3. Mr Rosenbaum says that he withdrew a total amount of $152,023 from Partnership funds for the purpose of his Sumner Street development, and that this was done with Mr Baidarman's knowledge and consent. He says that all of those withdrawals were considered during the 2006 Reconciliation and are reflected in schedule MFI-1 to the Referee's report. [226] Mr Rosenbaum also says that he paid back to the Partnership an amount that in fact exceeded his withdrawals of $152,023. He denies that he is obliged to account to the Partnership in respect of withdrawals relating to the Sumner Street development. [227]
4. Withdrawals totalling $152,023 are indeed included in Mr Rosenbaum's schedule of contributions and withdrawals prepared for the reference process in these proceedings, and each of those withdrawals has been accepted by Mr Baidarman. [228]
5. However, Mr Baidarman contends that the total Partnership funds used for Mr Rosenbaum's Sumner Street development amounted to $308,891.65 (including the $152,053 that is not in dispute). Mr Baidarman acknowledges that Mr Rosenbaum repaid a total amount of $192,741 to the Partnership between January 1995 and April 1996, but contends that he has failed to account for the balance of $116,150.65 and has also failed to account for the benefit of the $192,741 before he repaid that sum. [229]

Claims for relief in relation to Mr Rosenbaum's Sumner Street development

1. Mr Baidarman claims [230] an order that, on the taking of the Partnership account, Mr Rosenbaum be charged with liability to the Partnership for $308,891.65 as at 30 June 1995, subject to allowance against that sum of credit for the amounts totalling $152,032 that Mr Rosenbaum has treated as withdrawals from the Partnership and provided that the following amounts comprising the repayments of $192,741 be allowed as contributions by Mr Rosenbaum to the Partnership: [231] 1. $77,916 paid on 5 January 1995; 2. $11,436 paid on 3 March 1995; 3. $88,204 paid on 13 April 1995; and 4. $15,185 paid on 9 April 1996.
2. The Rosenbaum parties claim: 1. an order dismissing Mr Baidarman's claim that Mr Rosenbaum has failed to repay or account to the Partnership for the sum of $308,891.65 paid towards the development of Mr Rosenbaum's property at Sumner Street; [232] and 2. an order that, on the taking of the Partnership account, Mr Rosenbaum be given credit for the repayments totalling $192,741 referred to above.
3. The referee found that the four payments totalling $192,741 were verified. [233] In adopting these findings within the referee's report, the Court noted that the referee had not made any finding as to who made the payments. [234]

Miranda project (1996-1997)

1. During the period from approximately 1996 to 1997, the Partnership undertook a development project at The Boulevard, Miranda. [235]
2. Mr Baidarman claims that $189,256.26 of the $205,439.99 in the ANZ facility as at 6 February 1996 was used to purchase the Miranda project site on 7 February 1996. The Rosenbaum parties do not admit this, but it is common ground that the Miranda project site was Partnership property. [236]
3. These matters are relevant only to Mr Baidarman's contentions concerning the balance of the ANZ facility funds to which I refer immediately below.

Dealings with the balance of the ANZ facility funds after February 1996

1. Mr Baidarman contends that, after the acquisition of the Miranda project site, the $16,183.73 balance of the ANZ facility funds were deposited in the Ironwell account, where it was mixed with general funds of Ironwell. He pleads that the funds in the Ironwell account are therefore presumed to have been property of the Partnership. This claim is not confined to any specified period of time. [237]
2. The Rosenbaum parties admit that, from time to time, Partnership money was held in the Ironwell account. However, they deny that the ANZ facility funds were Partnership money and, in the absence of any specification of the time at which Mr Baidarman claims that the credit balance of the Ironwell account represented a mixed fund of Partnership money and Ironwell money, they do not admit that the credit balance of the Ironwell account is presumed to have represented Partnership money. [238]

Wonga Road project (1994-1998)

1. During the period from approximately 1994 to 1998, the Partnership undertook a development project at Wonga Road, Yowie Bay. [239]
2. The Wonga Road project site was purchased by Dabjade on behalf of the Partnership in March 1994. [240]
3. Mr Rosenbaum contends that he paid $9,500 towards the purchase of the Wonga Road project site in March 1994 and that this should be treated as a "direct transaction". [241] Mr Baidarman initially disputed that Mr Rosenbaum had paid the $9,500 at all on the basis that the payment was made from the Merton Street project sale proceeds, which were Partnership funds. However, Mr Baidarman subsequently accepted that the payment of $9,500 was a contribution by Mr Rosenbaum to the Partnership. Thus, the only remaining issue in dispute between the parties concerns whether the $9,500 should be treated as a contribution to the Partnership by Mr Rosenbaum or as a "direct transaction". [242]
4. It is common ground that Mr Rosenbaum did make three further payments in connection with the Wonga Road project, namely $8,000 paid in December 1994, $9,000 paid in June 1995 and a further $9,000 paid in August 1995. Mr Rosenbaum contends that these should be treated as "direct transactions". [243] Mr Baidarman contends that the payments were made to Dabjade to meet expenses that Dabjade was incurring on behalf of the Partnership, and that the payments should be treated as contributions by Mr Rosenbaum to the Partnership. [244]
5. The Wonga Road project involved the construction of two dual occupancy buildings, being a total of four houses. The Partnership undertook the construction phase of the project during the period from 1996 to 1998. [245]
6. It is common ground that Mr Rosenbaum and Mr Baidarman agreed that they would each retain one townhouse, and that each of them would be free to retain or dispose of his townhouse at his own discretion. The agreement was partly oral and partly implied, and there is some disagreement about whether it was made prior to the commencement of construction or at a later time. [246] Nothing turns on the timing issue.
7. The Rosenbaum parties contend that Mr Rosenbaum and Mr Baidarman also agreed that Mr Rosenbaum could choose his townhouse first. Mr Baidarman disputes this. However, it is common ground that: [247] 1. Mr Rosenbaum selected townhouse 3, which was located at the top of the sloping site of the Wonga Road project and which subsequently became known as 1/40A Wonga Road; 2. Mr Baidarman selected townhouse 2, which was located at the bottom of the sloping site and which subsequently became known as 2/40 Wonga Road; and 3. they agreed at the time of making their selections that there would be an adjustment between them to reflect the difference in value between their chosen townhouses.
8. The Rosenbaum parties initially claimed that Mr Baidarman's selected townhouse was worth $80,000 more than Mr Rosenbaum's selected townhouse at the time of completion of the Wonga Road Project in August 1998, and contended that this $80,000 value differential should be treated as a contribution by Mr Rosenbaum to the Partnership. [248] By the end of the hearing, those claims had been abandoned, and Mr Rosenbaum contended that the Court should reject the expert evidence to the effect that Mr Rosenbaum's townhouse was worth more than Mr Baidarman's townhouse as at August 1998 and should find that there was no difference in value (or that there was no evidence establishing any difference in value). [249]
9. Mr Baidarman relies on that expert evidence in support of his contention that Mr Rosenbaum's townhouse (1/40A Wonga Road) was $50,000 more valuable that Mr Baidarman's townhouse (2/40 Wonga Road) and that Mr Rosenbaum should therefore be charged with liability to the Partnership of $50,000 on the taking of the Partnership account. Initially, Mr Baidarman pleaded that compound interest should be payable on the value difference, but that claim was ultimately not pursued. [250]
10. There was a dispute between the parties concerning the cost of certain improvements allegedly made to Mr Rosenbaum's townhouse (1/40A Wonga Road) and how the cost of those improvements, or the benefit derived from them, should be accounted for on the taking of the Partnership account. [251]
11. Ultimately, the parties reached a consensus that the improvements to Mr Rosenbaum's townhouse should be addressed by allowing a credit to Mr Baidarman of $2,000 on the taking of the Partnership account. [252]
12. Towards the end of the hearing before me, Mr Baidarman elected not to press his contentions that the following payments he made to the Australian Taxation Office to meet taxation liabilities of Dabjade were contributions to the Partnership in connection with the Wonga Road project: [253] 1. $17,086 paid on 5 March 1998; 2. $13,226.70 paid on 5 May 1998; 3. $14,085.30 paid on 5 May 1998; and 4. $4,271 paid on 1 June 1998.

Claims for relief in relation to Wonga Road project

1. The Rosenbaum parties seek a declaration and an order that, on the taking of the Partnership account, credit be given to Mr Rosenbaum for: [254] 1. the payment of $9,500 referred to in [223] above; and 2. the three payments totalling $26,000 referred to in [224] above, as direct payments made by Mr Rosenbaum to Mr Baidarman: see [17]-[18] above.
2. Mr Baidarman claims an order that each of these four amounts amount be allowed as a contribution by Mr Rosenbaum to the Partnership, and not as a surcharge against Mr Baidarman. [255]
3. As to the difference in the value of the townhouses, Mr Baidarman seeks an order dismissing Mr Rosenbaum's abandoned claim to be allowed a contribution of $80,000. Further, Mr Baidarman seeks (and Mr Rosenbaum opposes) an order that, on the taking of the Partnership account, Mr Rosenbaum be charged with the sum of $50,000 from 17 August 1998 in respect of his retention of 1/40A Wonga Road. [256]
4. In relation to the improvements to Mr Rosenbaum's Wonga Road townhouse referred to at [230]-[231] above: 1. the Rosenbaum parties seek an order that, on the taking of the Partnership account, Mr Baidarman's claim that Mr Rosenbaum has failed to repay or account for the amount of $28,201 in relation to property retained by him at 1/40A Wonga Road be dismissed, save that there be a credit to Mr Baidarman in the amount of $2,000; [257] and 2. Mr Baidarman seeks an order that, on the taking of the Partnership account, Mr Rosenbaum be charged with liability to the Partnership for $2,000 for improvements in respect of 1/40A Wonga Road not already accounted for between partners "to the intent that this order fully disposes of the issue concerning improvements to that unit". [258]
5. In relation to Mr Baidarman's abandoned claims concerning payments to meet taxation liabilities of Dabjade (see [232] above), I note that Mr Baidarman does not press paragraph 59 of the Cross-Claim insofar as it relates to items 626, 647, 648 and 654 of the Defendant's Schedule of Contributions and Withdrawals (being schedule MFI-4 to the referee's report).

Payment of wages to Mrs Rosenbaum (1994-1997)

1. Mr Baidarman claims that Mr Rosenbaum caused Ironwell to pay wages to Mrs Rosenbaum of $34,000 in the financial year ending 30 June 1994, $21,000 in the financial year ending 30 June 1995, $7,000 in the financial year ending 30 June 1996 and $37,000 in the financial year ending 30 June 1997. Mr Baidarman claims that these payments were made from Partnership funds and without authorisation from the partners, in circumstances where Mr Rosenbaum was not authorised to engage Mrs Rosenbaum as an employee of the Partnership and Mrs Rosenbaum did not work for the Partnership during each of those financial years. Mr Baidarman claims that Mr Rosenbaum and Ironwell have failed to account to him or the Partnership for that money and for the use and benefit of that money and have failed to repay the money to the Partnership. [259]
2. The Rosenbaum parties deny these allegations. They contend that Mrs Rosenbaum did in fact work for the Partnership during each of the four financial years in question, but did not receive any payment for that work. There is therefore nothing to repay or account for. [260]

Claims for relief in relation to wages

1. Mr Baidarman claims a declaration and order that, upon the taking of the Partnership account, the wages or purported wages paid or credited by Ironwell to Mrs Rosenbaum are and ought to be brought to account as Partnership property and that Mr Rosenbaum is chargeable therefor, and for compound interest thereon. [261]
2. The Rosenbaum parties oppose that declaration and order and claim an order that, upon the taking of the said account, Mr Baidarman's claim that Mr and Mrs Rosenbaum have failed to repay or account for wages totalling $99,100 paid or credited to Mrs Rosenbaum be dismissed. [262]

Alleged withdrawals from Partnership funds in August 1998

1. The Rosenbaum parties contend that Mr Baidarman paid amounts of $4,271 and $4,225 from the Ironwell account on or about 31 August 1998 (totalling $8,496), that the funds in the Ironwell account were Partnership funds, and that the payments were made to meet taxation liabilities of Mr Baidarman and Dabjade. [263]
2. Mr Baidarman denies that these payments were made to meet his and Dabjade's personal liabilities. He contends that the payment of $4,271 was in repayment of a loan from Dabjade. [264]
3. Mr Baidarman also contends that, by failing to include these items in his list of surcharges for the purpose of the reference, Mr Rosenbaum is guilty of laches. [265]
4. The Rosenbaum parties seek orders debiting Mr Baidarman with the amounts of $4,271 and $4,225 as withdrawals from the Partnership on the taking of the Partnership account. [266] Mr Baidarman seeks an order dismissing that claim. [267]

Hotham Road project (1998-1999)

1. The Hotham Road project that was undertaken during the period from approximately 1998 to 1999 did not give rise to any issues or claims for determination in these proceedings.

Payment of "management fees" in 1999

1. Mr Baidarman claims that Ironwell paid an amount of $27,957 to Mrs Rosenbaum in 1999 and that Mr Rosenbaum and Ironwell have described the payment as management fees but have failed to account to Mr Baidarman for that payment. The Rosenbaum parties deny these allegations. [268]

Claims for relief in relation to management fees

1. Mr Baidarman claims a declaration and order that the management fees of $27,957 paid or credited by Ironwell are and ought to be brought to account as Partnership property and that Mr Rosenbaum is chargeable therefor, and for compound interest thereon. [269]
2. The Rosenbaum parties oppose a declaration and order to that effect and claim an order that, upon the taking of the account, Mr Baidarman's claim that Mr Rosenbaum should account for the management fees be dismissed. [270]

Payment of dividends in 2000-2002

1. Mr Baidarman claims that Ironwell paid or credited to Mr and Mrs Rosenbaum dividends of $40,000 each in the financial year ending 30 June 2000, $70,000 each in the financial year ending 30 June 2001 and $58,000 each in the financial year ending 30 June 2002. He claims that the dividends were paid from Partnership funds and that Mr and Mrs Rosenbaum and Ironwell have failed to repay or account to the Partnership for those payments and for the use and benefit of those payments. [271]
2. The Rosenbaum parties deny that they were paid those dividends, but admit that Ironwell's financial statements show that the loan accounts of Mr and Mrs Rosenbaum were credited with the amounts pleaded by Mr Baidarman in those three years. They deny that the dividends were "paid" by the entry of those credits from Partnership funds, and deny that the dividends were paid at all because they say that Mr and Mrs Rosenbaum did not in fact receive the amounts credited. In the circumstances, they deny that there was any obligation to repay or account. [272]

Claims for relief in relation to dividends

1. Mr Baidarman claims declarations and orders that, on the taking of the Partnership account, the dividends paid or credited by Ironwell to Mr and Mrs Rosenbaum are and ought to be brought to account as Partnership property and that Mr Rosenbaum is chargeable therefor, and for compound interest thereon. [273]
2. The Rosenbaum parties oppose these declarations and orders and seek an order that, upon the taking of the account, Mr Baidarman's claim that Mr Rosenbaum should account for the dividends be dismissed. [274]

Military Road project

1. The Military Road project that was undertaken during the period from approximately 2001 to 2004 did not give rise to any issues or claims for determination in these proceedings. [275]

2006 Reconciliation and payments in 2008 and 2009

1. As I have referred to in the introductory section of these reasons, the 2006 Reconciliation provisionally calculated that: [276] 1. Mr Rosenbaum's advances to the Partnership between 1987 and 2006 exceeded his withdrawals from the Partnership during the same period by a total amount of $110,100; and 2. Mr Baidarman's advances to the Partnership during the same period exceeded his withdrawals from the Partnership during that period by a total amount of $493,792.
2. It is common ground that, in December 2008 and March 2009, Mr Rosenbaum and Mr Baidarman were paid the amounts of $110,100 and $493,792 respectively. [277] As I have referred to at [30] above, those payments totalling $603,892 were made from monies that Mr Rosenbaum caused to be withdrawn from the Omega Unit Trust, and those withdrawals were accounted for by a reduction in Ironwell Super's unit holdings in that trust by 603,892 units. In other words, the moneys that the partners had calculated were payable to each of them out of the Partnership's assets were made out of Ironwell Super's assets (namely, its units in the Omega Unit Trust).
3. As referred to at [58] above, both partners treated these payments as withdrawals by them from the Partnership assets (not from Ironwell Super's assets) in the reference process conducted during these proceedings. That consensus gave rise to findings by the referee that Mr Rosenbaum withdrew $110,100 from the Partnership and Mr Baidarman withdrew $493,792 from the Partnership. Those findings were not carved out of the Court's subsequent adoption of the referee's report.

Contentions and claims for relief in relation to the 2008 and 2009 payments

1. The pleadings do not include any specific claims for relief concerning the 2008 and 2009 payments totalling $603,892.
2. In closing submissions, counsel for Mr Baidarman conceded that, on the taking of the Partnership account, Mr Rosenbaum should be credited with a contribution to the Partnership of $603,892 to reflect the fact that he liquidated assets of Ironwell Super to put the Partnership in funds to make the payments of $110,100 and $493,792. [278]
3. The Rosenbaum parties' primary submission was that the reduction in Ironwell Super's unit holdings in the Omega Unit Trust by 603,892 units in June 2009 should not be accepted as accurate. [279] The Rosenbaum parties did not make any positive case concerning the units held by each of Ironwell Super and Baidarman Super and did not seek any order setting aside the June 2009 transactions or any declaration concerning the number of units held by each superannuation fund in the Omega Unit Trust. As I understood it, the submission that the June 2009 reduction in Ironwell Super's unit holdings should not be accepted was made in aid of the Rosenbaum parties' contention that an account of the transactions of the Omega Unit Trust should be taken in respect of the period from 1 July 2008 (rather than from 1 July 2010) and should include adjustments to loan accounts and unit holdings. [280]
4. The Rosenbaum parties' alternative submission was that the Court should act on Mr Baidarman's concession referred to above and order that Mr Rosenbaum be credited with a contribution to the Partnership of $603,892 on the taking of the Partnership account. Specifically, the order should reflect that $120,000 of that contribution was made in December 2008 and $373,792 was paid in March 2009. [281]

September 2010 payment

1. It is common ground that, on 28 September 2010, an amount of $1,720,674 was withdrawn from a bank account held by Excelsea as trustee of the Omega Unit Trust. [282]
2. There is no dispute that this amount was paid: 1. to Dabjade (as trustee of Baidarman Super) in the amount of $1,060,291; and 2. to Ironwell (as trustee of Ironwell Super) in the amount of $660,383.
3. The Rosenbaum parties contend, and Mr Baidarman denies, that the purpose of the withdrawal and alleged distribution was to "ensure that the Ironwell Super fund and the Baidarman Superannuation Fund held an equal amount of money" and that, after the distribution, the funds in Ironwell Super and Baidarman Super were considered to be "personal funds" of Mr Rosenbaum and Mr Baidarman respectively. [283]
4. The contention referred to immediately above has its genesis, in part, in Mr Rosenbaum's evidence that he and Mr Baidarman had agreed at about the time that Ironwell Super was established in December 1993 that "the money in Ironwell Super will remain as partnership money". [284]
5. Up to and including their opening submissions at the hearing before me, the Rosenbaum parties contended that funds and assets held by Ironwell Super and Baidarman Super were considered by the partners to be Partnership assets, and should be treated as such in the taking of a final account of the Partnership.
6. On the fourth day of the hearing, the Rosenbaum parties conceded that the funds and assets held by each superannuation fund are held by the trustee of each fund for the named beneficiaries of each trust and cannot be treated otherwise on the taking of a final account. [285]
7. However, the Rosenbaum parties did not abandon their contention that the partners had agreed, and subjectively believed, for a period prior to 2010 that the funds and assets held by Ironwell Super and Baidarman Super were Partnership assets. [286]
8. Mr Baidarman denies any agreement or belief that funds held by Ironwell Super would be treated as Partnership assets. He gave evidence that he did not even know that Ironwell Super had been established until January 1995, and that he and Mr Rosenbaum had agreed at that time that the Partnership would contribute equally to Ironwell Super and Baidarman Super. [287]
9. As I have referred to at [82] above, the relief claimed by Mr Baidarman includes an order for the taking of an account of the transactions of the Omega Unit Trust since 1 July 2010, including an enquiry into the respective entitlements of unitholders therein in respect of the sum of $1,720,674 paid on 28 September 2010 and the allowance to Baidarman Super of an adjustment for an alleged overpayment therefrom to Ironwell Super Fund. [288] Mr Baidarman also seeks a declaration that the trustee of the Omega Unit Trust has not determined the apportionment, or account for, or final entitlement of the sums totalling $1,720,674 paid to Baidarman Super and Ironwell Super in September 2010. [289]
10. The Rosenbaum parties oppose the declaration sought by Mr Baidarman. They do not oppose an order for the taking of an account of the transactions of the Omega Unit Trust, although they contend that the period in respect of which the account is taken should commence at 1 July 2008 and they maintain that the distribution of the $1,720,674.21 sum between unit holders was a final distribution for the purpose of achieving equal balances in the funds held by Ironwell Super and Baidarman Super. [290]

October 2010 payment in respect of "private matters"

1. It is not disputed that on or about 20 October 2010, Mr Rosenbaum paid Mr Baidarman the sum of $13,329, being the net amount calculated during the 2006 Reconciliation as owing by Mr Rosenbaum to Mr Baidarman in respect of private matters. [291]
2. Mr Rosenbaum contends that this payment should be treated as a "direct transaction". [292] He seeks an order that, on the taking of the Partnership account, credit be given to him for a direct payment of $13,329 to Mr Baidarman. [293] Mr Baidarman seeks an order dismissing Mr Rosenbaum's claim for any such credit. [294]

Partnership office (1998-2010)

1. Mr Rosenbaum claims a contribution to the Partnership of approximately $18,414 for his payment of utility and cleaning charges in respect of part of his residence at 1/40A Wonga Road allegedly used as an office for the Partnership during the period from 1998 to 2010. [295]
2. Mr Baidarman denies this claim. He admits that Partnership records were stored at 1/40A Wonga Road during this period, but says that this was at Mr Rosenbaum's own insistence and for his convenience and that the partners did not agree that either of them would pay for the storage of the records. [296]
3. For completeness, I note that a claim by the Rosenbaum parties relating to rent for the Partnership office was not pressed. [297]

Partnership utes

1. Mr Rosenbaum claims that Mr Baidarman withdrew $12,500 from the Partnership in April 2011 by retaining for his own personal use a ute that had been purchased in December 2003 and used for Partnership business. The $12,500 sum represents what Mr Rosenbaum alleges was the value of the ute as at April 2011. [298]
2. Mr Baidarman admits retaining the ute for his own personal use since April 2011, but denies that it had a value of $12,500 at that time. Mr Baidarman says that this claim is trivial, and demonstrates Mr Rosenbaum's unwillingness to do equity, in circumstances where Mr Rosenbaum retained office equipment and display furniture belonging to the Partnership of greater value than the ute. [299]
3. Mr Rosenbaum and Mr Baidarman also purchased another ute for Partnership purposes in 1992. It is common ground that Mr Rosenbaum made payments totalling $5,000 in respect that ute in 1992. Mr Rosenbaum claims that these payments were made to Mr Baidarman and are to be treated as "direct transactions", [300] whereas Mr Baidarman contends that they should be treated as contributions by Mr Rosenbaum to the Partnership. [301]

Claims for relief in relation to Partnership utes

1. The Rosenbaum parties claim an order that, on the taking of the Partnership account, Mr Baidarman be debited with the amount of $12,500 representing the value of the ute retained by him since April 2011. [302] Mr Baidarman claims an order dismissing that claim. [303]
2. As I have noted above, Mr Rosenbaum claims that his payments of $5,000 made to Mr Baidarman for the purchase of a ute in 1992 are to be treated as "direct transactions". [304] He claims an order that, on the taking of the Partnership account, the amount of $5,000 be credited to him as a direct payment to Mr Baidarman. [305] Mr Baidarman contends that they should be treated as contributions by Mr Rosenbaum to the Partnership. [306]

Old South Head Road development

1. The Old South Head Road land owned by Excelsea as trustee of the IPD Trust was sold in about early 2011. [307] The net proceeds of sale amounted to $1,188,196.82. On instructions from Mr Baidarman, the selling agent paid the net proceeds to Excelsea as trustee of the IPD Trust. Mr Baidarman then deposited those funds in an account in the name of Excelsea as trustee of the IPD Trust. The deadlock between Mr Rosenbaum and Mr Baidarman has precluded the distribution of those sale proceeds to the beneficiaries of the IPD Trust. [308] No specific order was sought in relation to the distribution of those sale proceeds. As I understand it, the parties intend that this will be a matter to be addressed in the working out of any general administration order made in relation to the IPD Trust or by a new trustee if the Court appoints a new trustee to the IPD Trust.

Miscellaneous matters concerning the Partnership

1. Mr Rosenbaum claims to have made a contribution to the Partnership by paying $177 in cash for petrol on 30 June 1994. [309] Mr Baidarman denies this. [310] The Rosenbaum parties claim an order that on the taking of the Partnership account, Mr Rosenbaum be given credit for this payment of $177 as a contribution to the Partnership. Mr Baidarman seeks an order dismissing this claim. [311]
2. Mr Rosenbaum also claims to have made the following payments to or on behalf of Mr Baidarman which Mr Rosenbaum claims should be treated as "direct transactions": see [17]-[18] above. Mr Baidarman denies each of these payments and contends that Mr Rosenbaum's claims to be credited for them on the taking of the Partnership account should be dismissed: [312] 1. $10,157 paid on 30 June 1989 for "tiling"; 2. $1,863 paid on 7 January 1991 for "Severien contract"; 3. $956 paid on 16 February 1994 for "Legal - Ian Martin"; and 4. $2,370 paid on 30 June 1998 for "Colonial claim".
3. Mr Rosenbaum claims, and Mr Baidarman denies, that Mr Baidarman made withdrawals from the Partnership totalling $39,416 during the period 1991 to 1993. [313] The referee found that these withdrawals were not verified, but the Court did not adopt that part of the referee's report. [314] The Rosenbaum parties claim an order that, on the taking of the Partnership account, Mr Baidarman be debited with the amount of $39,416. [315] Mr Baidarman seeks an order dismissing Mr Rosenbaum's claims that he be debited with these amounts on the taking of the Partnership account. [316]
4. Mr Baidarman claims that Mr Rosenbaum made the following withdrawals from Partnership funds without authority and/or not for any proper purpose of the Partnership, which he has failed to repay or account for: 1. withdrawal of $15,199.96 by cheque drawn on the Ironwell account in 1991. The Rosenbaum parties admit this withdrawal from the Ironwell account but deny that the withdrawal was from Partnership funds. [317] Mr Baidarman seeks an order that, on the taking of the Partnership account, Mr Rosenbaum be charged with liability to the Partnership in the amount of $15,199.96, and the Rosenbaum parties seek an order dismissing that claim; [318] 2. Partnership funds of $9,346 applied to Mr Rosenbaum's personal expenses in 1994. The Rosenbaum parties neither admit nor deny this as it is unclear how the amount has been calculated, but say that all of Mr Rosenbaum's withdrawals from Partnership money were made with Mr Baidarman's knowledge and consent and were acknowledged in Schedule MFI-1 to the Referee's report; [319] 3. Partnership funds of $18,793 applied to Mr Rosenbaum's personal expenses in 1995 to 1996. The Rosenbaum parties neither admit nor deny this as it is unclear how the amount has been calculated, but say that all of Mr Rosenbaum's withdrawals from Partnership money were made with Mr Baidarman's knowledge and consent, were considered in the 2006 Reconciliation and are "reflected in" Schedule MFI-1 to the Referee's report); [320] 4. withdrawal of $6,000 and $24,000 by two cheques dated 10 June 1997 (the Rosenbaum parties admit these withdrawals and admit that the money withdrawn was not used for Partnership purposes, but say that the withdrawals were made with Mr Baidarman's knowledge and consent, were considered in the 2006 Reconciliation and are "reflected in" items 167 and 168 Schedule MFI-1 to the Referee's report); [321] and 5. the following withdrawals from the Ironwell account: [322] 1. $2,925 withdrawn on 17 December 1993; 2. $600 withdrawn on 6 March 1992; 3. $3,411 withdrawn on 13 August 1992; 4. $1,200 withdrawn on 13 August 1992; 5. $140 withdrawn on 3 December 1992; 6. $7,642 withdrawn on 12 July 1993; 7. $475 withdrawn on 1 July 1992; 8. $379 withdrawn on 21 July 1992; 9. $200 withdrawn on 19 April 1993; and 10. $7,500 withdrawn on 5 January 1999.

Onus of Proof

1. It is convenient to make the following observations about the onus of proof before addressing each of the issues to be determined.
2. To the extent that the issues now falling for determination involve a claim by one partner to have made a contribution to the Partnership that is disputed by the other partner, either as to the amount or otherwise, the parties accepted that the onus of proving the contribution in the amount claimed rests on the partner claiming to have made that contribution. [323]
3. To the extent that the matters to be determined now involve allegations by one partner that the other has received Partnership funds or assets or a benefit derived therefrom which has not been accounted for (by inclusion in that partner's schedule of withdrawals or otherwise), the parties accepted that the onus of proving that receipt or withdrawal lies on the partner making that allegation. [324]
4. There are two qualifications to the observations immediately above.
5. The first qualification is that where a party claims a declaration, that party bears the onus of proving each matter that is a necessary element of declaration sought. [325]
6. The second qualification is that, to the extent that one partner is found to have mixed Partnership money with his own money in acquiring property, the onus of proof shifts to that partner to establish that is inequitable to order him to account for the whole of the property acquired with the mixed funds. [326]

Approach to consideration of evidence

1. Much of the evidence given by Mr Rosenbaum and Mr Baidarman is evidence of conversations said to have occurred during the Partnership, during the 2006 Reconciliation and in the period up to 2011 when they were discussing how to finalise their business relationship. Such conversations occurred between 9 and 33 years before the hearing in 2020.
2. In considering evidence of this nature, I have had regard to the well-known observations of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319: "… human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience."
3. Where there is a direct contest between Mr Rosenbaum and Mr Baidarman as to relevant conversations or events that occurred between 9 and 33 years ago, I have therefore placed primary emphasis on the objective surrounding facts that are either undisputed or established by contemporaneous documents, and the inherent probabilities: Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599 at [15]; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 129; Re Hillsea Pty Ltd [2019] NSWSC 1152 at [16]ff.

The parties' competing contentions

1. As I have referred to at [131] above, Mr Baidarman claims declarations and orders that the shares in Ironwell held by Mr and Mrs Rosenbaum, and the assets of Ironwell, are property of the Partnership.
2. The claim for these declarations is based on Mr Baidarman's contention that Mr and Mrs Rosenbaum held the shares in Ironwell on trust for the Partnership. That contention in turn is based on the following contentions: [327] 1. the cost of Mr and Mrs Rosenbaum acquiring the shares in Ironwell in November 1991 was paid from Partnership funds; and 2. s 29(1) of the Partnership Act therefore requires Mr Rosenbaum to account to the Partnership for those shares.
3. Section 29(1) of the Partnership Act provides: "Every partner must account to the firm for any benefit derived by the partner without the consent of the other partners from any transaction concerning the partnership, or for any use by the partner of the partnership property, name or business connexion."
4. As I understand Mr Baidarman's pleadings and submissions, [328] he contends that the shares in Ironwell are a benefit that Mr Rosenbaum (and Mrs Rosenbaum) derived from the use of the Partnership funds to acquire those shares and that, subject to two exceptions, accounting for the shares requires that all funds and assets held by Ironwell at any time be treated as funds and assets of the Partnership and the Partnership account be taken on the basis that all assets, income and expenses of Ironwell are to be brought to account as Partnership property and transactions and that transfers of funds from Ironwell for the purpose of the Partnership are to be brought to account as applications of Partnership funds. The two exceptions are: 1. funds held and transactions undertaken by Ironwell in its capacity as trustee of Ironwell Super; and 2. funds received and expenses incurred by Ironwell in connection with the development of property at Sumner Street, which was not a Partnership project.
5. As I have referred to at [119] above, the Rosenbaum parties dispute that the cost of acquiring the Ironwell shares was paid from Partnership funds.
6. It is convenient to refer to Mr Baidarman's contentions at [299] above, and the Rosenbaum parties' competing contentions, as the trust contentions.
7. Mr Baidarman's submissions scarcely mentioned the trust contentions and placed far greater emphasis on his alternative contention that, in relation to the Merton Street project, Ironwell acted as agent for the Partnership. As I have referred to earlier in these reasons, the Rosenbaum parties' dispute this alternative contention and maintain that Ironwell was the corporate vehicle through which Mr Rosenbaum carried out the construction work for the Merton Street project in his own right and not as agent for the Partnership. [329] It is convenient to refer to these competing contentions of the parties as the agency contentions.
8. There is some overlap between the trust contentions and the agency contentions. That is because the Rosenbaum parties' contention that the cost of acquiring the Ironwell shares was not paid from Partnership funds turns on whether moneys drawn down under the Westpac loan that financed the construction of the Merton Street project and paid into Ironwell's bank account are properly characterised as Partnership moneys on the basis that Ironwell received those moneys as agent for the Partnership. It is common ground that the $925 cost of acquiring Ironwell was paid from the Ironwell account, and that the sole source of the credit balance in the account at the time of that payment was money that Dabjade and Villaland had drawn down under that Westpac loan.
9. Mr Baidarman bears the onus of proving each matter that is a necessary element of the declarations sought in respect of the trust contentions. However, many of Mr Rosenbaum's claimed contributions to the Partnership are premised on his contention that funds in the Ironwell account, from which the claimed contributions were paid, were Ironwell's funds or his own funds and not funds of the Partnership. Mr Rosenbaum bears the onus of proving that contention in respect of each of those claimed contributions in order to establish his entitlement to an order or direction that he be credited with each such contribution on the taking of an account of the Partnership.
10. As will become apparent below, my consideration of the evidence that is relevant to the trust and agency contentions has led me to the conclusions that the funds received by Ironwell that were drawn down under the Westpac loan that financed the Merton Street project were received by Ironwell as agent for the Partnership. Although the cost of acquiring Ironwell was paid out of those funds, the shares in Ironwell registered in the names of Mr and Mrs Rosenbaum were not held by them on trust for or otherwise on behalf of the Partnership and were not Partnership property. That conclusion has not turned on the failure of one party or the other to discharge an onus of proof. It is therefore not necessary to grapple further with where the onus lies in substance in circumstances whether each of Mr Baidarman and Mr Rosenbaum bears an onus in respect of the same subject matter for different purposes.

Summary of relevant evidence

1. The relevant evidence referred to in the parties' submissions addressing the trust contention and the agency contention may be summarised as follows.
2. In about 1987, the Partnership purchased the property at 72-74 Merton Street in the name of Mrs Rosenbaum. Mr Rosenbaum and Mr Baidarman contributed equally to the purchase cost, and Mr Baidarman agreed for the property to be held in Mrs Rosenbaum's name on behalf of the Partnership. The property was transferred from Mrs Rosenbaum to Dabjade to be held on behalf of the Partnership in July 1991. [330]
3. In 1991, Dabjade (on behalf of the Partnership) entered into a joint venture agreement with Villaland to develop 10 villas and townhouses on the property at 72-74 Merton Street together with the adjacent property owned by Villaland. [331]
4. As I have referred to earlier in these reasons, Mr Rosenbaum obtained a New South Wales builders' licence in 1989. [332] According to Mr Rosenbaum, the joint venturers obtained quotes from builders for the construction of the Merton Street development in mid-1991. When the quotes came in, Mr Rosenbaum considered that they were too high in comparison to the budget estimate of the construction costs that he had prepared. [333] Mr Rosenbaum therefore prepared and submitted a tender for the construction work, quoting an amount of $1,050,000 compared to the amounts of between $1,100,000 and $1,150,000 tendered by the builders whose quotes he had considered too high. [334]
5. Mr Baidarman gave a different account. According to Mr Baidarman, he and Mr Rosenbaum agreed that the Partnership would submit a tender for the construction work for consideration by their co-venturer, Villaland, with a view to making a profit on the construction which they (that is, Mr Rosenbaum and Mr Baidarman) would share equally. The tender was submitted in the name of Mr Rosenbaum only because only he had a builders licence and Westpac (which was then a potential financier of the Merton Street project) required confirmation that the work would be carried out by a licensed builder. The joint venture did not obtain any other quotes, although Mr and Mrs Elliott of Villaland did obtain some quotes. The tender in Mr Rosenbaum's name was submitted in order for the Partnership to carry out the construction work. This had been the Partnership's intention from the outset, and was not an idea that developed only in reaction to other quotes. [335]
6. Mr Baidarman's evidence is consistent with Ms Elliott's evidence. Ms Elliott said that she and her husband obtained some other quotes from builders they knew "just to be sure that the quote from Eddie and Jacob was in the ball park". It was her understanding that she and Mr Elliott were dealing with Messrs Rosenbaum and Baidarman together, and that the construction contract was in Mr Rosenbaum's name alone only because he was the licensed builder within the Partnership. [336]
7. The tender submitted in the name of Mr Rosenbaum was accepted and the construction contract was signed by Dabjade and Villaland (as "Principal") and Mr Rosenbaum (as "Contractor") on 3 July 1991. [337]
8. Mr Rosenbaum gave evidence in chief that, after the Merton Street construction contract was signed, his accountant at the time advised him to obtain a proprietary limited company as the corporate vehicle for his builder's licence because this would give Mr Rosenbaum "certain protections" and tax advantages. Mr Rosenbaum gave evidence that he spoke with Mr Baidarman after receiving that advice, and told Mr Baidarman that he accepted his accountant's advice to "incorporate my own company in order to run the construction of Merton Street". [338]
9. In cross-examination, Mr Rosenbaum resiled from his evidence referred to immediately above. He acknowledged that Ironwell had never obtained a builders licence and the Merton Street construction contract signed by Mr Rosenbaum as builder had not been assigned or novated to Ironwell. When it was put to him that he did not in fact acquire Ironwell to be the construction company for the Merton Street project, Mr Rosenbaum answered: "Maybe. Maybe. Maybe you're right technically …". He accepted that his accountant had not advised him to acquire Ironwell to be the construction company, and nor had his accountant's advice touched on taxation advantages that might be available if income earned from the construction activities was attributed to Ironwell. [339]
10. Mr Baidarman gave evidence that it was he who suggested to Mr Rosenbaum that another company be established for use by the Partnership. Mr Baidarman deposed that he said to Mr Rosenbaum: [340] "I think that we should set up another company for use by the partnership between you and me. Dabjade is my company and it can't be entering into agreements with subcontractors and paying the expenses of our partnership. That new company will be used only for our partnership business and everything in it will belong to the both of us equally."
11. Mr Baidarman also gave evidence that he subsequently had another conversation in which Mr Rosenbaum said that he thought that he and Mrs Rosenbaum should be the directors and shareholders of the "the shelf company that you and I are now acquiring" and Mr Baidarman replied: [341] "That is OK so long as it is understood that the company will be acting on behalf of you and I and all assets in the company will be ours. We will be using my company Dabjade for some partnership purposes so I have no problem with you and Alla being the directors and shareholders of the company we acquire."
12. Mr Rosenbaum denies that either of the two conversations referred to by Mr Baidarman occurred. [342]
13. Ironwell was registered on 25 October 1991 and shares in the company were issued to Mr and Mrs Rosenbaum on 8 November 1991. They became the directors of the company on the same date. [343] Mr Rosenbaum established the Ironwell account at the Advance Bank shortly thereafter. [344]
14. The terms of the Westpac loan to Dabjade and Villaland that financed the Merton Street project were set out in a letter dated 23 October 1991. The total amount available under the loan was $1,200,000. [345] Throughout the project, Dabjade and Villaland drew down funds under that loan from time to time and then transferred those funds to the Ironwell account. Mr Rosenbaum and Mr Baidarman gave different evidence about the draw down and transfer process. According to Mr Rosenbaum, he prepared progress payment claims under the Merton Street construction contract which he submitted to the joint venturers. Those claims were checked by the architect for the Merton Street project, a Mr Greenwood. If the architect signed off on a progress payment claim, the amount of the claim would be drawn down under the Westpac loan and paid into Ironwell's account. [346] However, Mr Rosenbaum did not adduce evidence of any such progress claim documents, as he acknowledged in cross-examination. [347]
15. According to Mr Baidarman, no progress payment claims were submitted by Mr Rosenbaum. Rather, Mr Baidarman provided "Inspection Certificates" prepared by the architect to Westpac in order to make further drawings on the Westpac loan. The "Inspection Certificate" identified the works completed to the architect's satisfaction as at the date of a specified inspection (and attributed a progress payment number to each item of work), the value of the works completed to the date of the certificate and the value of the works then remaining to be completed. Funds drawn down under the loan were paid initially to a Dabjade/Villaland account with Westpac, and transferred from there to the Ironwell account. Mr Baidarman gave evidence that he arranged these transfers to the Ironwell account. Ironwell then used those funds to pay expenses for the Merton Street project. [348]
16. On 19 November 1991, the sum of $18,000 drawn down by Dabjade and Villaland under the Westpac loan was deposited into the Ironwell account. Mr Baidarman gave evidence that he arranged this draw down in order to cover expenses incurred at the beginning of the Merton Street project. That $18,000 deposit was the sole source of the funds standing to the credit of the Ironwell account at all times during the period 19 November to 3 December 1991. [349]
17. On 21 November 1991, the sum of $925 was withdrawn from the Ironwell account by cheque to pay for the acquisition of Ironwell. [350]
18. As I have already mentioned, Mr and Mrs Elliott, operated an earthmoving business. They demolished the existing houses in the Merton Street project site before construction of the development commenced. [351]
19. Mr Rosenbaum did not carry out the construction work himself. He supervised subcontractors doing the work. [352]
20. Mr Baidarman gave evidence of his own involvement in the project, and his contemporaneous diary notes record that he was involved at least to the extent of co-ordinating deliveries of supplies, payment of invoices and the activities of numerous subcontractors on the Merton Street project site. Mr Rosenbaum maintains that Mr Baidarman only arranged a limited number of supplies and deliveries under Mr Rosenbaum's direction and supervision but the diary notes tell a different story. [353] Ms Elliott's impression was the Mr Rosenbaum and Mr Baidarman shared responsibility for the construction together, save for the period after Mr Rosenbaum returned to work with the railways. After that, Mr Baidarman did the necessary work and, according to Ms Elliott, did all of the selling work on his own. [354]
21. Mr Rosenbaum acknowledges that he returned to his full-time employment with NSW Railways in May 1992, but says that construction of the Merton Street project had reached the stage of practical completion by April 1992. [355] According to Mr Baidarman, construction was not completed until September 1992. [356] The occupation certificate for the Merton Street project was issued in September 1992. [357]
22. It is common ground that the source of all deposits made into the Ironwell account during the period from the opening of the account in November 1991 until September 1992 was money drawn down under the Westpac loan financing the Merton Street project. [358] As I have referred to at [124] above, the credit balance of the proceeds of the Ironwell account as at September 1992 was paid into the $275,000 Westpac facility in the name of Ironwell.
23. It is also common ground that construction costs for the Merton Street project were paid out of the Ironwell account during that same period, as I have referred to at [121] above. [359] According to Mr Baidarman, this included payments to building subcontractors, sales and marketing expenses and strata approval fees. [360] Mr Rosenbaum did not dispute this aspect of Mr Baidarman's evidence.
24. Mr Rosenbaum insisted in cross-examination that he had made it clear to Mr Baidarman that, as he was undertaking the construction of the Merton Street project using his builders licence, he would be entitled to any profits made from the construction. However, Mr Rosenbaum was unable to recall a particular conversation during which this had been discussed with Mr Baidarman. [361] Mr Baidarman gave evidence that Mr Rosenbaum had "never ever suggested to me at any time … that he would do this job for himself". [362]
25. In his affidavit sworn on 25 February 2019, Mr Rosenbaum contended that, in the 2006 Reconciliation, the profit derived from construction of the Merton Street project was "dealt with separately" from the Partnership's profit from the development of the project because: "The construction was undertaken by me in my personal capacity (using Ironwell as my corporate vehicle)." [363] That is certainly not apparent from the 2006 Reconciliation document. The 2006 document is a series of handwritten notes seemingly in no particular order, some of which are indecipherable or crossed out, with no indication in the document itself as to whether or how parts of the notes inform or relate to other parts of the notes. As I have said at [19]-[30] above, the document is more or less impenetrable to any reader other than Mr Rosenbaum or Mr Baidarman, and even they did not regard it as a settled or final set of calculations. As counsel for Mr Rosenbaum acknowledged in closing submissions, the document does not set out any calculation of profit on the construction activities (as opposed to the project as a whole). [364]
26. In the second half of 2010, Mr Rosenbaum and Mr Baidarman were engaged in discussions instigated by Mr Baidarman with a view to determining interest payable on the amounts that he had contributed to the Partnership in excess of his 50 per cent share of the capital contributions over the years. During the course of those discussions, Mr Rosenbaum and Mr Baidarman prepared and provided to one another set of documents setting out their respective positions. [365]
27. Mr Baidarman's document referred to the significantly greater amount of funds that he had contributed to the Partnership compared to Mr Rosenbaum, as revealed by the 2006 Reconciliation. Mr Baidarman's document stated: [366] "When the reconciliation confirmed that one partner continuously contributed significantly larger amounts of funds both partners acknowledged and agreed that one partner would have to be appropriately compensated. Compensation issue was confirmed on a number of occasions including on several meetings with an accountant. … During the course of sorting out the issues related to paying back the funds used by a partner to fund his personal things, he suggested that because another partner raised the issue of interest compensation in this case because he is a licensed builder any compensation for the above should be disregarded or he should be paid for using his licence. He is attempting to impose a new condition to the existing agreement."
28. In his document, Mr Rosenbaum contended that the Partnership's ability to develop six projects using his builders licence "in house" had enabled the Partnership to save paying a builder's profit margin and brought other advantages to the Partnership. Mr Rosenbaum stated that he had decided to apply for the licence in 1989 - two years after the Partnership was formed - because he understood "the impact to the bottom line by having a builders licence in house and all other benefits". Mr Rosenbaum stated: [367] "… the notion that my builders licence was part of our equal share agreement at the start of the partnership is incorrect simply because I did not have a builders licence at the time our partnership was formed." and "During the course of the partnership we have undertaken six projects using my builders licence. The total construction cost of these projects 6.65 millions approximately. I believe that the ability to utilise my builders licence was a major positive contribution to the partnership."
29. Despite his protestations to the contrary in cross-examination, [368] it is plain from the content and context of this document that Mr Rosenbaum was contending that the benefits that the Partnership had derived from being able to develop six projects using his builder's licence without paying a profit margin to a third party builder was a contribution by him to the Partnership over and above the equal contributions that the parties had envisaged making through the dedication of their respective skills and experience and the equal financial contributions that they committed to at the outset of the Partnership. He was advocating for the totality of the contribution of his builder's licence together with his financial contributions to the capital of the Partnership to be taken in account in the partners' negotiations concerning any interest in respect of financial contributions made by Mr Baidarman. As Mr Rosenbaum acknowledged in cross-examination, the six projects referred to in his document included the Merton Street project. [369]
30. On 26 October 2011, the solicitors then acting for Mr Rosenbaum wrote to Mr Baidarman disputing his calculation of interest in respect of his capital contributions to the Partnership in excess of 50 per cent of the capital that he was obliged to contribute. [370] One of the issues raised in the letter was that Mr Baidarman's interest calculations were based on the 2006 Reconciliation which had involved rough calculations of the partners' respective contributions and withdrawals year by year. The letter contended that more detailed calculations should be undertaken in light of Mr Baidarman's claim for interest. The letter continued: "Merton Street Project Also, and most importantly, our client is of the view that the relevant calculations have not taken into account our clients advance to the partnership of the profit Ironwell made on the Merton Street project. This profit, which was advanced to the partnership was in the order of $230,000. This advance dates from at least the date of June 1, 1993 on commencement of the Port Hacking Road project."
31. Implicit in this statement is the contention that Mr Rosenbaum was using his builders licence for the benefit of Ironwell, and not for the benefit of the Partnership, on the Merton Street project. This is the direct opposite of the position taken by Mr Rosenbaum in his October 2010 correspondence referred to above.
32. It is common ground that Ironwell's role as trustee of Ironwell Super from the date of the establishment of that superannuation fund on 3 June 1993 was not undertaken on behalf of the Partnership. [371]
33. It is also common ground that, in each project undertaken by the Partnership subsequent to the Merton Street project, any role undertaken by Ironwell was undertaken on behalf of the Partnership. [372]
34. Mr Baidarman acknowledges that Ironwell played a role in Mr Rosenbaum's development of the property at Sumner Street in 1994 and 1995 and that this was not a Partnership activity. [373]

Findings and determination in relation to the role of Ironwell in the Merton Street project and profits of the Merton Street construction contract

1. I find that the tender for the Merton Street construction contract was submitted on behalf of the Partnership, and accept that Mr Baidarman's evidence to that effect, for four reasons.
2. First, if Mr Rosenbaum were to undertake the construction on his own account and for his own potential profit, this would have been a significant opportunity that had come to him through the Partnership to profit from an activity that was clearly within the scope of the Partnership business. In those circumstances, any entitlement that he had to retain construction profit for himself would have had to have been discussed with and agreed by his partner, Mr Baidarman.
3. This is particularly so in circumstances where, as between Mr Rosenbaum and Mr Baidarman, all of the risk associated with the Merton Street project lay with Mr Baidarman. With the exception of a mortgage over the Merton Street project site, all of the security provided for the Westpac loan that financed the construction and development of the Merton Street project was provided by Mr and Mrs Baidarman and companies associated with them and by Villaland and its directors, Mr and Mrs Elliott. In addition to providing their properties as security for the loan, Mr and Mrs Baidarman provided personal guarantees. Mr Rosenbaum provided no personal guarantee. [374]
4. Mr Rosenbaum could recall no discussion or agreement with Mr Baidarman concerning the Merton Street project construction profits. He relied on the fact that he signed the Merton Street construction contract in his own name, and his general assertion in cross-examination, untethered to any particular event, conversation or communication, that he made it clear to Mr Baidarman that he would retain the profit. In my opinion, that assertion is nothing more than an impressionistic memory that Mr Rosenbaum has consciously or subconsciously constructed in the course of his dispute with Mr Baidarman after 2010, in support of his interest in supporting his claim the construction profit of approximately $230,000 that made its way into the Ironwell account was money to which he was entitled and that he subsequently contributed to the Partnership: see [294] above. I say that this occurred after 2010 because Mr Rosenbaum's current position that the construction profits were his profits is irreconcilable with his position that he presented to Mr Baidarman in writing in October 2010.
5. Second, the fact that the tender was submitted in Mr Rosenbaum's name only is attributable to the fact that he was the only person with a builders licence. This therefore has no bearing on whether or not the tender was submitted on behalf of the Partnership or by Mr Rosenbaum in his own right.
6. Third, it is inherently improbable that Mr Rosenbaum would have decided to submit that tender and take on the effort and responsibility of a significant construction project, taking leave from his full-time employment to do so, only because (as he claims) he regarded quotes submitted by other builders to be $50,000 to $100,000 too high on a project worth a little over $1,000,000. The objective facts point far more strongly to the conclusion that Mr Rosenbaum and Mr Baidarman had always contemplated that the Merton Street project would include construction as part of the overall property development activity to be undertaken by the Partnership, but decided to limit the construction activity (and any resulting profit therefrom) to the Partnership when the development became a joint venture between the Partnership and Villaland, as Mr Baidarman deposed.
7. Fourth, Mr Baidarman's evidence is consistent with my findings below as to the manner in which the construction work was carried out.
8. For the same reasons, I find that Mr Rosenbaum entered into the Merton Street construction contract as agent for the Partnership: see Partnership Act, s 5(1). I reject the submission made on behalf of Mr Rosenbaum that the proposition that Mr Rosenbaum (as agent for the Partnership) was contracting with Dabjade (as agent for the Partnership) and Villaland "is just nonsensical". [375] No reasoning or analysis was offered in support of that submission. Mr Rosenbaum and Dabjade are distinct legal entities. Under the construction contract, the owed obligations to Dabjade (as agent for the Partnership) and Villaland jointly and severally, and vice versa. [376]
9. I find that the construction work for the Merton Street project was done by subcontractors, and that Mr Rosenbaum and Mr Baidarman each played a role in arranging and supervising these subcontractors, as well as coordinating deliveries to site and undertaking other tasks required during the construction phase. I reject Mr Rosenbaum's evidence that Mr Baidarman played a very limited role in the construction activities, as Mr Baidarman's evidence is corroborated by his contemporaneous diary notes and is also consistent with Ms Elliott's very general description of how the construction was undertaken. This is consistent with Mr Rosenbaum having entered into the construction contract on behalf of the Partnership rather than on his own account.
10. I find that the Merton Street project was completed in September 1992 as deposed by Mr Baidarman, and not April 1992 as Mr Rosenbaum claimed. Mr Baidarman's evidence is consistent with the objective fact that the occupation certificate for the Merton Street project was issued in September 1992. In addition, an inspection certificate issued by the architect to Westpac dated 13 April 1992 certified that the cost of work completed as at that date was $760,900 and there was still work to the value of $289,100 to be done in order to complete the project. [377] I reject Mr Rosenbaum's attempt in cross-examination to explain the 13 April 1992 certificate by saying that there was a delay between the completion of work and the issue of inspection certificates at this time because there was sufficient funds in the Ironwell accounts to pay subcontractors without drawing down on the Westpac loan and he and Mr Baidarman wanted to avoid incurring the interest cost of drawing down on the Westpac loan to the extent that they were able to do so. [378] First, the provision of a certificate of inspection to Westpac did not oblige Dabjade and Villaland to draw down on the Westpac loan. Rather, if the certificate was satisfactory to Westpac, they would have been entitled to draw down the amount certified. Second, the certificate states that the architect inspected the site on the date of the certificate. It certifies the work completed, and work remaining, as at the date of that inspection. It is inherently improbable that the architect falsified the date of inspection, or understated the work completed and overstated the work remaining as at that date. This would have been dishonest, and would not have achieved any advantage for the architect, Messrs Rosenbaum and Baidarman, or the joint venture.
11. Mr Rosenbaum's return to full-time work with NSW Railways several months prior to completion of the Merton Street project is a further matter that supports my finding that Mr Baidarman did play a material role in the construction phase of the project. Mr Baidarman's role in the construction is consistent with Mr Rosenbaum having entered into the Merton Street construction contract on behalf of the Partnership and not in his own right.
12. The incorporation of Ironwell shortly after the commencement of construction of the Merton Street project does not alter or affect these findings. The Merton Street construction contract was not assigned or novated to Ironwell. Nor could it have been, as Ironwell did not obtain a builders licence.
13. I also reject Mr Baidarman's evidence concerning the conversations referred to at [315]-[316] above. It is improbable that Mr Baidarman said in the first alleged conversation that Dabjade could not enter into agreements and pay expenses of the Partnership, yet said in the second conversation Dabjade would be used for some Partnership purposes. The two positions are inconsistent. As counsel for Mr Rosenbaum submitted, it is also inherently improbable that Mr Baidarman would have agreed to Mr and Mrs Rosenbaum being the directors and shareholders of Ironwell if Mr Baidarman had suggested that it be incorporated solely as a vehicle to transact Partnership business and on the basis that all of Ironwell's assets would be assets of the Partnership.
14. I reject the submission made on behalf of Mr Baidarman that the inclusion of Mrs Rosenbaum as a shareholder of Ironwell was "a curiosity" that was not significant in the context of the partners' conduct in acquiring the land for the Merton Street project in the name of Mrs Rosenbaum and the land for the Port Hacking Road project in the name of Mr and Mrs Rosenbaum. [379] The inclusion of Mrs Rosenbaum, and the non-inclusion of Mr Baidarman, as a shareholder and director of Ironwell is fundamentally inconsistent with Mr Baidarman's claim to have discussed Ironwell being established as a company to be used "only for our partnership business". The fact that Ironwell was subsequently used for some non-partnership purposes, and the absence of any evidence that Mr Baidarman objected to this, is capable of casting some light on the parties' intentions at that time, as counsel for Mr Baidarman acknowledged. [380] In my opinion, it is a further matter that points to the improbability of the partners having discussed establishing Ironwell to act solely as a vehicle for Partnership activities.
15. Having regard to the share structure and directorships of Ironwell from the time of its incorporation, and Ironwell's subsequent appointment as trustee of Ironwell Super and role in the Sumner Street development, which Mr Baidarman acknowledged were not Partnership activities, I am not satisfied on the balance of probabilities that there was any agreement or understanding between Mr Rosenbaum and Mr Baidarman that the shares in Ironwell were to be held on trust for the Partnership and/or that all assets and funds of Ironwell were to be Partnership property.
16. The amount available under the Westpac loan was $1,200,000 and the amount payable under the Merton Street construction contract was $1,050,000, as I have mentioned earlier. I accept Mr Baidarman's evidence that funds drawn down under the loan were paid initially to a Dabjade/Villaland account with Westpac, and transferred from there to the Ironwell account. It is inherently improbable that funds drawn down under the loan would have been paid directly into the Ironwell account. The inherent commercial probability is that it was convenient for the partners, who were not in the habit of keeping accounting records, to use the newly established Ironwell account to receive all of the funds under the Merton Street construction contract and to pay Merton Street project expenses, with the funds remaining in the account at the end of the day representing the profits.
17. I reject the submission made on behalf of Mr Baidarman that Mr and Mrs Rosenbaum should be held to hold their shares in Ironwell on trust for the Partnership on the basis that the $925 cost of acquiring Ironwell was paid out of Partnership funds in the Ironwell account and s 29(1) of the Partnership Act therefore requires that they account to the Partnership for the benefit of those shares. [381]
18. Section 29(1) requires a partner to account to the partnership for any benefit derived by him or her without the consent of the other partners from any transaction concerning the partnership or use of partnership property.
19. The evidence that I have summarised above establishes that the funds in the Ironwell account from which the $925 acquisition cost was paid were Partnership funds because they were proceeds of the Merton Street construction contract that I have found Mr Rosenbaum entered into as agent for the Partnership. However, there is no evidence that Mr Baidarman did not consent to Mr and Mrs Rosenbaum holding the shares in Ironwell. Nor is there any evidence that he did not consent to money received in respect of the Merton Street construction contract being used to pay for the cost of acquiring the company intended to receive Merton Street construction contract payments, to pay the costs of the construction, and to capture any profits from the construction on behalf of the Partnership. On the contrary, the payment of the $925 acquisition cost from those moneys is consistent with evidence to the effect that ASIC fees, taxation liabilities and other expenses of Dabjade were paid from Partnership funds, or considered by Mr Baidarman to be Partnership expenses, at various times during which Dabjade was engaged in transactions or projects on behalf of the Partnership.
20. For the reasons explained at [340]-[358] above, I decline to make the declaration sought in prayer 1 of Mr Baidarman's cross-claim that the shares in Ironwell are property of the Partnership, and the declarations sought in prayers 2 and 4 of the cross-claim concerning all assets, income and expenses of Ironwell and all transfers of funds from Ironwell for the purpose of the Partnership: see [131]-[132] above. I will therefore make an order dismissing prayers 1, 2 and 4 of the cross-claim.
21. Whether or not assets or funds held by Ironwell at any particular time were assets or funds of, or held on trust for, the Partnership, depends on the evidence concerning the provenance of those assets and funds.
22. Section 20(1) of the Partnership Act provides that all property acquired on account of a partnership or for the purposes of and in the course of the partnership business must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agreement.
23. On the basis of the following matters, I find that the credit balance of the Ironwell account as at September 1992, the credit balance of the Westpac facility at all times between September 1992 and October 1993, and the funds standing to the credit of the Ironwell account in the period after May 1993 that were transferred into the Ironwell account from the Westpac facility, were held by Ironwell exclusively for the purposes of the Partnership: 1. my finding that Mr Rosenbaum entered into the Merton Street construction contract as agent for the Partnership (see [347] above); 2. there is no dispute that the loan taken out by Dabjade and Villaland to fund the construction of the Merton Street project was the only source of funds standing to the credit of the Ironwell account as at September 1992 (see [327] above); 3. the fact that those funds standing to the credit of the Ironwell account as at September 1992 were rolled into the Westpac facility together with additional funds paid under the Merton Street construction contract, resulting in a credit balance of $275,000 in the Westpac facility established in Ironwell's name (see [124] above); 4. the absence of any evidence that funds from other sources were deposited in the Westpac facility between September 1992 and May 1993 when Ironwell began transferring funds from the Westpac facility to the Ironwell account in order pay the Partnership's construction costs for the Port Hacking Road project (see [147] above); and 5. the absence of any evidence that funds from other sources were deposited in the Westpac facility between May 1993 and October 1993 when Ironwell completed the transfer of funds from the Westpac facility to the Ironwell account for the purpose referred to immediately above (see [148] above).
24. As I have already noted at [133] above, my dismissal of Mr Baidarman's claims for declaratory relief and my finding immediately above will determine or affect the outcome of many other issues in these proceedings. I will deal with each of those issues separately as they arise in approximately chronological order in the remainder of these reasons.

$75,000 interest payments on the Merton Street project loan

1. I turn now to Mr Baidarman's claim referred to at [126] - [127] above to have contributed $75,000 in loan interest expenses to the Partnership.
2. Item 30A of schedule MFI-4 to the referee's report [382] records that this contribution was claimed by Mr Baidarman and falsified by Mr Rosenbaum on the grounds that insufficient evidence had been provided. The claim is not merely that Mr Baidarman deposited $75,000 into a term deposit account as security for the Westpac loan that funded the Merton Street project, but that interest payments on that loan were deducted from this fund with the result that the whole amount of $75,000 constitutes a contribution by Mr Baidarman to the Partnership. Mr Baidarman bears the onus of proof in respect of these matters.
3. As I have earlier referred to, the Merton Street project was undertaken by Dabjade (as agent for the Partnership) and Villaland as joint venturers.
4. The Westpac loan for which Mr Baidarman provided the $75,000 term deposit as security was a loan to Dabjade and Villaland. [383]
5. The terms of the Westpac loan were set out in a letter dated 23 October 1991 addressed to Dabjade and Villaland. [384]
6. The letter stated that Westpac had agreed to provide "construction finance" of $1,200,000, structured as a term loan of $300,000 to be used for ongoing progressive building payments and a commercial bill line facility of $1,200,000 to be used to clear progressive drawings being applied to the term loan.
7. Westpac's agreement to provide the finance was subject to several conditions, including the lodgement of $75,000 on term deposit "to cover possible ongoing interest costs after completion of project and prior to clearance". The security for the facilities was to include a mortgage over that term deposit.
8. In relation to both the term loan and the bill line facility, the letter stated: "Interest will be capitalised during the period of construction. $75,000 funds lodged on Term Deposit will then be applied to cover interest costs, in need."
9. Mr Baidarman gave evidence that the loan was not repaid until August 1993, being about 11 months after completion of the Merton Street project. [385] Mr Baidarman was not cross-examined on this aspect of his evidence.
10. Mr Baidarman also gave evidence that the interest payable on the loan during that 11 month period was charged against the $75,000 term deposit that he had lodged, and that the whole of the $75,000 fund was applied to those interest payments. He no longer has any bank statements recording the interest payments, but he was not shaken on this evidence in cross-examination. [386]
11. Mr Rosenbaum gave evidence that he does not have the bank statements that would record how the interest was charged in the post-construction period. His attempt to obtain those documents under subpoena issued to Westpac was unsuccessful, no doubt due to the substantial period of time that has passed since the facilities were repaid in full. [387]
12. Mr Rosenbaum deposed that he had calculated, based on his understanding of the interest rates stipulated in the 23 October 1991 letter, that the total amount of interest that Westpac would have charged on the facilities after completion of the Merton Street project was in the order of $122,000. Maintaining his contention that the Merton Street project was completed in April 1992 (which I have rejected, for the reasons already explained), Mr Rosenbaum asserted that these charges would have been incurred for a period of 18 months following completion of construction, rather than the 11 month period referred to in Mr Baidarman's evidence. [388]
13. Mr Rosenbaum did not give evidence about how those interest payments were funded. He contended that the interest was not deducted from the $75,000 term deposit because, based on his calculations, the joint venturers had not drawn down the whole of the $1,200,000 available under the facilities and interest could therefore continue to be capitalised and there would therefore have been no need for Westpac to deduct interest charges from the term deposit. Counsel for Mr Rosenbaum relied on this contention in submitting that the Court should reject Mr Baidarman's evidence that the whole of the $75,000 term deposit was applied to the post-completion interest charges. Mr Rosenbaum did not give evidence that the post-completion interest payments were in fact capitalised. [389]
14. Mr Rosenbaum's contention is just that - a contention about what he says could or would have occurred. It is not evidence of what did occur.
15. Moreover, the contention is misconceived because it assumes that Westpac would not have deducted the post-completion interest payments from the term deposit account unless the facility was fully drawn to its limit of $1,200,000. There is no evidence to support that assumption. The terms of the 23 October 1991 letter referred to above specifically provided that interest would be capitalised during the period of construction. Westpac was under no obligation to continue capitalising interest once construction was completed. Westpac was entitled after that time to deduct interest from the $75,000 term deposit, and there is no evidence of any reason why it would have chosen to take the riskier course (from Westpac's point of view) of continuing to capitalise interest leaving the $75,000 untouched. As a matter of commercial reality, it is inherently improbable that Westpac would have taken that riskier course.
16. I accept Mr Rosenbaum's submission that the notes of the 2006 Reconciliation in relation to the Merton Street project and in relation to outstanding items do not include a claim by Mr Baidarman to have made this $75,000 contribution to the Partnership that he now claims. [390] This does indicate that Mr Baidarman did not recall, at the time of the 2006 Reconciliation, that he had provided the $75,000 term deposit security and/or that he did not recall that interest payments had been deducted from that term deposit account so that the security had not been repaid to him. However, I regard this has having little significance to the question whether the $75,000 contribution was in fact made. Both partners acknowledge that the 2006 Reconciliation was not complete or final. Both partners have subsequently identified additional matters concerning their respective contributions and withdrawals that they say were not addressed in the 2006 Reconciliation.
17. For completeness, I note that Mrs Elliot, a director of Villaland, gave no evidence concerning how interest on the Westpac facilities was paid in the period after completion of the Merton Street project.
18. On the balance of probabilities, I find that interest on the Westpac facilities that funded the Merton Street project was deducted from the $75,000 term deposit account during the 11 month period after completion of that project. I also find that, on the balance of probabilities, the total amount of interest deducted consumed the whole of that $75,000 fund. The total amount of approximately $122,000 that Mr Rosenbaum calculated would have been incurred in interest charges on the Westpac facilities over a period of 18 months equates to approximately $6,780 per month, or approximately $74,555 over a period of approximately 11 months.
19. The remaining question is whether this represents a contribution by Mr Baidarman of $75,000 to the Partnership, or a contribution to the joint venture between the Partnership and Villaland. In my opinion, it was a contribution to the Partnership. The evidence establishes that it was difficult to obtain finance for the Merton Street project, and neither Mr Rosenbaum nor Villaland had the funds available to provide the $75,000 term deposit required by Westpac. Mr Baidarman provided most of the securities for the Westpac facilities. The $75,000 term deposit security was provided on the terms of the 23 October 1991 letter - that is, in the knowledge that post-completion interest payments would be debited to the term deposit account. [391] It was put to Mr Baidarman in cross-examination that the $75,000 in interest charges was a joint venture expense, yet he took no steps to recover any part of it from Villaland in the process of dividing the profits of the Merton Street project between the joint venturers. Mr Baidarman answered: [392] "The interest on the loan is responsibility by Mr Rosenbaum and I. It's got nothing to do whatsoever in real terms with the joint venture. I have provided these funds via Dabjade. I made arrangement for those funds to be provided for Mr Rosenbaum and me, not for Ms Elliott, so we could make a profit on our project and also doing work for Mr and Mrs Elliott. That's the arrangement between Mr Rosenbaum and I."
20. In short, Mr Baidarman provided the $75,000 term deposit as security and as the fund from which post-completion interest payments would be made in order that the Partnership could proceed with the Merton Street project at all, and have an opportunity to make the profits that it did ultimately make from that project. On that basis, I consider it to be a contribution to the Partnership. If it be the case (as Mr Rosenbaum submitted) that part of the $75,000 should have been recovered from Villaland, the fact that this was not done is the responsibility of both partners and this does not preclude Mr Baidarman from having the whole of the $75,000 recognised as a contribution made by him to the Partnership.
21. According to Mr Baidarman's evidence, construction of the Merton Street project was completed in about September 1992 and the construction loan was not repaid until August 1993. [393] This is the 11 month period in which he says that the interest payments were deducted from the $75,000 loan. The evidence does not permit any findings to be made about the amount and timing of each interest payment deducted. Accordingly, it is appropriate that the $75,000 be treated as having been contributed to the Partnership in August 1993.
22. For those reasons, there will be an order that, on the taking the Partnership account, Mr Baidarman is to be treated as having made a contribution of $75,000 to the Partnership in August 1993: see [136] above.

Miscellaneous claims concerning the Merton Street project

1. I now turn to the remaining minor issues in relation to the Merton Street project referred to at [129]-[130] and [134]-[135] above.

Mr Rosenbaum's claim to have contributed $1,006 to the Partnership by paying council rates for the Merton Street project site

1. The only evidence adduced in support of this claimed contribution of $1,006, in respect of which Mr Rosenbaum bears the onus of proof, is the 2006 Reconciliation document and bare assertions by Mr Rosenbaum. [394] That document is not evidence of the truth of its contents in relation to the claimed contribution of $1,006: see [29] above. Mr Rosenbaum's assertions were admitted into evidence as evidence of his contentions only, and are not evidence of the truth of the matters asserted. Mr Rosenbaum has therefore failed to discharge his onus of proof.
2. The claim for a declaration and order in terms of prayer 5A(h) of the Further Amended Statement of Claim will be dismissed to the extent that it relates to item 42 of schedule MFI-1 to the referee's report. Mr Rosenbaum's claim for an order that he be credited with the contribution in item 42 of schedule MFI-1 to the referee's report on the taking of the Partnership account will also be dismissed. [395]

Alleged withdrawal of $10,000 by Mr Baidarman's receipt of deposit from prospective purchaser of Merton Street unit

1. The only evidence adduced in support of this claimed withdrawal of $10,000, in respect of which Mr Rosenbaum bears the onus of proof, is the 2006 Reconciliation document and bare assertions by Mr Rosenbaum. [396] That document is not evidence of the truth of its contents in relation to the claimed withdrawal: see [29] above. Mr Rosenbaum's assertions were admitted into evidence as evidence of his contentions only, and are not evidence of the truth of the matters asserted. Mr Rosenbaum has therefore failed to discharge his onus of proof.
2. The claim for a declaration and order in terms of prayer 5A(j) of the Further Amended Statement of Claim will be dismissed to the extent that it relates to item 2 of schedule MFI-2 to the referee's report. Mr Rosenbaum's claim for an order that Mr Baidarman be debited with the withdrawal in item 2 of schedule MFI-2 to the referee's report on the taking of the Partnership account will also be dismissed. [397]

Alleged withdrawal of $590 by Mr Baidarman's receipt or payment for surplus tiles

1. The only evidence adduced in support of this claimed withdrawal of $590, in respect of which Mr Rosenbaum bears the onus of proof, is the 2006 Reconciliation document and bare assertions by Mr Rosenbaum. [398] That document is not evidence of the truth of its contents in relation to the claimed withdrawal: see [29] above. Mr Rosenbaum's assertions were admitted into evidence as evidence of his contentions only, and are not evidence of the truth of the matters asserted. Mr Rosenbaum has therefore failed to discharge his onus of proof.
2. The claim for a declaration and order in terms of prayer 5A(j) of the Further Amended Statement of Claim will be dismissed to the extent that it relates to item 3 of schedule MFI-2 to the referee's report. Mr Rosenbaum's claim for an order that Mr Baidarman be debited with the withdrawal in item 3 of schedule MFI-2 to the referee's report on the taking of the Partnership account will also be dismissed. [399]

Alleged withdrawal of $20 received by Mr Baidarman as payment for surplus fibro sheets

1. Almost thirty years after the Merton Street project was completed, Mr Rosenbaum pursues his claim that Mr Baidarman must be debited with this alleged receipt of $20.
2. Mr Rosenbaum bears the onus of proof, which he has failed to discharge for the same reasons that he failed in relation to the alleged withdrawals of $10,000 and $590 above. [400]
3. The claim for a declaration and order in terms of prayer 5A(j) of the Further Amended Statement of Claim will be dismissed to the extent that it relates to item 4 of schedule MFI-2 to the referee's report. Mr Rosenbaum's claim for an order that Mr Baidarman be debited with the withdrawal in item 4 of schedule MFI-2 to the referee's report on the taking of the Partnership account will also be dismissed. [401]

Alleged contribution of $25,117 by Mr Baidarman and alleged contribution of $18,800 by Mr Rosenbaum

1. Mr Baidarman bears the onus of proving the contribution of $25,117 that he claims to have made in 1991 towards the purchase of the Port Hacking Road site and related expenses: see [143] and [185] above.
2. It is common ground that the purchase price of the Port Hacking Road site was $188,000 and that the purchase was funded in part by a loan of $120,000 made by Advance Bank. [402]
3. In his affidavit sworn on 25 February 2019, Mr Rosenbaum asserted that he paid the balance of the purchase price and the development expenses from his personal funds. [403] However, Mr Baidarman relied on a handwritten note prepared by Mr Rosenbaum at about the time of settlement of the purchase of the Port Hacking Road site which recorded that the total costs of purchasing the site (including stamp duty, utilities adjustments and similar costs) was $196,951, and that the partners had contributed the $76,951 required over and above the Advance Bank loan in the proportions $51,854 (contributed by Mr Rosenbaum) and $25,097 (contributed by Mr Baidarman). [404]
4. In his affidavit in reply and in cross-examination, Mr Rosenbaum did not dispute that he prepared the handwritten document recording a contribution of $25,097 by Mr Baidarman at about the time of settlement of the Port Hacking Road site, although he did indicate some uncertainty in cross-examination about the date of the document without claiming to have a recollection that it was prepared at a different time. [405]
5. The 2006 Reconciliation document recorded a slightly higher total contribution by the partners, and a slightly higher contribution by Mr Baidarman of $25,117. [406] Those parts of the 2006 Reconciliation document were admitted as evidence of the truth of the statements that Mr Baidarman paid $25,117 towards the purchase of the Port Hacking Road property. [407] Counsel for Mr Rosenbaum did not object to the admission of those parts of the 2006 Reconciliation document on that basis. [408]
6. Mr Baidarman gave evidence that his contribution of $25,117 included the $18,800 deposit for the Port Hacking Road property, which he paid to the vendor's real estate agent in two instalments of $500 and $18,300 in February 1991. [409] This aspect of Mr Baidarman's evidence was not challenged in cross-examination.
7. In his affidavit in reply and in cross-examination, Mr Rosenbaum did not depose to a positive recollection that he had paid these deposits, but referred to the receipts for those payments and argued that the receipts show that the payments were made by him rather than by Mr Baidarman because the receipts were issued in the name of "Mr and Mrs E Rosenbaum". [410] Regrettably, this argumentative approach to questions of fact was a common feature of Mr Rosenbaum's evidence in these proceedings. I do not attach significant weight to the names on the receipts for the $500 and $18,300 payments. I accept the submission made by counsel for Mr Baidarman that it is inherently likely that the names on the receipt merely reflect the identity of the purchaser on the contract for sale rather than the identity of the person providing the funds for the deposit payment. [411]
8. Mr Rosenbaum also argued that the balance of the $25,117 contribution claimed by Mr Baidarman related to four specific expenses. The basis on which Mr Rosenbaum linked Mr Baidarman's claim with these particular expenses was not explained in the evidence, and the alleged connection is not supported by the document that Mr Rosenbaum himself prepared at the time of settlement of the Port Hacking Road purchase. Mr Rosenbaum then asserted that he himself had paid these four expenses. [412]
9. I am satisfied on the balance of probabilities that Mr Baidarman contributed $25,117 to the cost of the Partnership purchasing the Port Hacking Road site. Mr Baidarman's evidence about this matter is consistent with a document prepared by Mr Rosenbaum at or about the time that the purchase of the site was settled, and two statements in the 2006 Reconciliation document that were admitted as evidence of the truth of those statements. This aspect of Mr Baidarman's evidence was not challenged in cross-examination. Mr Rosenbaum's argumentative evidence to the contrary was wholly unimpressive. Mr Rosenbaum appears to have seized on the purchasers' names in the receipts for the deposit payments to construct an argument that he perceives to be favourable to his interests in these proceedings. This reflects poorly on his credit.
10. This also disposes of Mr Rosenbaum's claim to have contributed to the Partnership the $18,800 deposit for the purchase of the Port Hacking Road site: see [144] and [186] above.
11. For those reasons, there will be an order to the effect of prayer 14 of Mr Baidarman's Cross-Claim. The contrary order sought by Mr Rosenbaum will not be made, and his claim for an order to the effect of prayer 5A(m) of the Further Amended Claim will be dismissed. [413]

Alleged contribution of $8,181 by Mr Rosenbaum

1. Mr Rosenbaum bears the onus of proving the contribution of $8,181 that he claims to have made to the Partnership by paying development and building approval application fees: see [145] and [187] above.
2. The only evidence adduced in support of this claimed contribution is the 2006 Reconciliation document. [414] That document is not evidence of the truth of its contents in relation to the claimed contribution of $8,181: see [29] above. Mr Rosenbaum has therefore failed to discharge his onus of proof and prayer 5A(h) of the Further Amended Statement of Claim will be dismissed insofar as it relates to item 46 in schedule MFI-1 to the referee's report. An order will be made to the effect contended for by Mr Baidarman that, on the taking of the Partnership account, Mr Rosenbaum's claim to have contributed $8,181 be disallowed. [415]

The Rosenbaum parties' claimed contributions totalling $303,509.47 to the Partnership during the period of the Merton Street and Port Hacking Road projects

1. The Rosenbaum parties' claims to have contributed amounts to the Partnership totalling $303,509.47 during the period from November 1991 to July 1994 are entirely dependent on their contention that the funds paid into the Ironwell account during the period of the Merton Street project, and other funds received by Ironwell in respect the Merton Street construction contract and invested in the Westpac facility, were not funds of the Partnership: see [122]-[124], [147]-[151] and also [133] above.
2. I have held that those monies were held by Ironwell exclusively for the purposes of the Partnership: see [340]-[363] above.
3. It follows that the declaration sought by the Rosenbaum parties and referred to at [188] above will not be made. There will instead be an order dismissing the claim in prayer 5A(a) of the Further Amended Statement of Claim. There will also be an order to the effect sought by Mr Baidarman referred to at [188] above that, on the taking of the Partnership account, Mr Rosenbaum's claim to have contributed $303,509.47 to the Partnership be disallowed.

Mr Rosenbaum's claimed contribution of $36,530 for mortgage repayments

1. The loans that financed the acquisition of the Port Hacking Road property on behalf of the Partnership were the Advance Bank loan of $120,000 drawn in April 1991 to which I have already referred above, and a Westpac loan of $565,000 drawn in December 1992 that refinanced the earlier Advance Bank loan and various other borrowings that were not related to the Port Hacking Road project. The Port Hacking Road project was tenanted from the time of its acquisition in April 1991 until construction commenced in May 1993. [416]
2. On the final day of the hearing, Mr Baidarman abandoned the position he had taken on the pleadings and his evidence about this issue. [417] He accepted that Mr Rosenbaum should be credited with $36,530 total payments that he had made against these borrowings for the Port Hacking Road property of $36,530, less rental payments that Mr Rosenbaum received from the Port Hacking Road tenants that had not already been accepted by the referee (and adopted by the Court) as withdrawals from the Partnership by Mr Rosenbaum. [418]
3. In his affidavit sworn on 26 August 2019, Mr Rosenbaum acknowledged that, after reviewing further documents, he had identified additional rental payments received for the Port Hacking Road property that he had not included as withdrawals in his schedule of contributions and withdrawals prepared for the reference. The rental receipts that were included in that schedule amount to $11,516. The additional receipts subsequently identified amount to $7,912. [419] Thus, Mr Rosenbaum now accepts that he received rental totalling $19,428 which must be addressed in the taking of an account of the Partnership. $11,516 of those receipts have already been treated as withdrawals by Mr Rosenbaum in parts of schedule MFI-1 to the referee's report adopted by the Court.
4. Accordingly, there will be an order that, on the taking of an account of the Partnership, Mr Rosenbaum be credited with a contribution to the Partnership of $28,618 (being the mortgage payments of $36,530 less the additional rental receipts of $7,912) and prayer 5A(d) of the Further Amended Statement of Claim will otherwise be dismissed.

Villa 2 in the Port Hacking Road project

1. I have outlined the issues in dispute between Mr Rosenbaum and Mr Baidarman concerning villa 2 at [155]-[163] and [190]-[194] above. That dispute turns on whether, on completion of the Port Hacking Road project, villa 2 was property of the Partnership or property of Mr Rosenbaum. That, in turn, depends on: 1. whether the partners agreed that they would each retain one villa from the Port Hacking Road project, as Mr Rosenbaum claims; or 2. whether the partners agreed that Mr Rosenbaum could retain villa 2 provided that he paid for it, as Mr Baidarman claims (and, if so, whether and when Mr Rosenbaum in fact paid for it).
2. Mr Baidarman bears the legal onus of proving that Mr Rosenbaum should be surcharged with the benefit of occupying villa 2 from completion of the Port Hacking Road project in about early 1994 until the sale of villa 2 in March 1998, and with the $390,000 proceeds of the sale of villa 2 (less the $249,646 that the parties agree Mr Rosenbaum paid into the Partnership from those sale proceeds in March 1998).
3. However, in circumstances where it is common ground that Mr and Mrs Rosenbaum acquired the Port Hacking Road project site as agents for the Partnership, and that the Partnership carried out the development, an evidentiary onus shifts to Mr Rosenbaum to adduce evidence of the oral agreement that he claims he made with Mr Baidarman concerning his right to retain villa 2 on completion of the Port Hacking Road project without payment.
4. The substance of Mr Rosenbaum's evidence in relation to both of the issues referred to at [416] above may be summarised as follows: 1. Mr Rosenbaum told Mr Baidarman in about early 1991, before the Port Hacking Road site was purchased on behalf of the Partnership, that he intended to live in one of the villas to be developed by the Partnership and Mr Baidarman had said: "That's fine, go ahead"; [420] 2. in about October or November 1993, he had a further conversation with Mr Baidarman in which he asked Mr Baidarman for a decision about "which unit you going to take and which unit I'm going to take" and Mr Baidarman told him to make the choice and said "we'll sort out the price difference later"; [421] 3. Mr Rosenbaum selected villa 2 and lived there until he sold it in March 1998, and the question of difference in value between the two units was not mentioned again until the 2006 Reconciliation; [422] 4. villa 1 was Mr Baidarman's to keep or sell as he saw fit, and he chose to sell villa 1 and re-invest the proceeds of sale in the Partnership (although the deposit of $29,169.44 which was paid by cheque made out to Mr and Mrs Rosenbaum as the registered owners of the property and banked in Mrs Rosenbaum's account was not remitted to either Mr Baidarman or the Partnership due to what Mr Rosenbaum says was an oversight on his part); [423] 5. during the 2006 Reconciliation process, it was Mr Baidarman who suggested that the issue be addressed by each partner being treated as having withdrawn from the Partnership the cost of developing his villa (with the cost of developing each villa being equal), and Mr Rosenbaum agreed to this; [424] and 6. consistently with that agreement, Mr Rosenbaum has "paid" for villa 2 by including the agreed development cost for villa 2 ($221,454) in his schedule of withdrawals during the reference process.
5. Mr Rosenbaum initially insisted that he had never said to Mr Baidarman in 2006 that he (Mr Rosenbaum) had paid for villa 2 by his personal contributions to the Partnership. [425] However, he subsequently gave the following evidence, inconsistent with his initial evidence, in the course of an answer describing in some detail the discussions during the 2006 Reconciliation process (emphasis added): [426] "He asking me for specific payment for villa 2 and I said to him that there is no specific payment. You - it was paid by contribution of my personal funds to the partnership and the cost of villa 2 was added as a withdrawal. … So that's how I dealt with payment for this villa. There were - were substantial contribution before the villa was built and very substantial after the villa was paid. So that's how I answered my - my question to Mr Baidarman and it wasn't once, it was numerous of times when issue arise and he wasn't satisfied."
6. Both Mr Rosenbaum, and his counsel in cross-examination of Mr Baidarman and in submissions, made persistent but unpersuasive attempts to explain how the 2006 Reconciliation document evidenced the agreement claimed by Mr Rosenbaum that he would "pay" for villa 2 by both partners being debited with the construction cost of one villa. As I have already said, the 2006 document is indecipherable in parts and largely impenetrable to the extent that it is capable of being deciphered at all. Figures written in the document concerning the cost of developing the Port Hacking Road project or the sale of the villas were not admitted as evidence of the truth of any asserted fact.
7. To the extent that anything can be discerned from the figures written in the 2006 Reconciliation documents concerning the Port Hacking Road project, those figures do not support Mr Rosenbaum's contention that the partners agreed during the 2006 Reconciliation that they would each be debited with the construction cost of one villa. Rather, the figures indicate that the amounts of $110,110 and $493,792 that the partners calculated were owed by the Partnership to Mr Rosenbaum and Mr Baidarman (respectively) incorporated: [427] 1. in Mr Rosenbaum's case, the cost of construction of one villa as a benefit that he had withdrawn from the Partnership; and 2. in Mr Baidarman's case, a contribution to the Partnership of 50 per cent of the Partnership's profit on the whole of the Port Hacking Road project, calculated on the basis of the total construction cost, the actual sale price of villa 1 and a "sale price" of $310,000 for villa 2.
8. The 2006 Reconciliation document certainly does not support Mr Rosenbaum's pleaded contention the partners were "debited with the construction cost of their individual villas".
9. Moreover, it records an approach that did not treat the two partners equally. Mr Rosenbaum's withdrawal from the Partnership was limited to the cost of constructing villa 2 ($221,454) and he was not treated as having withdrawn the "sale price" of villa 2 at the time of completion (referred to in the document as $310,000 and therefore incorporating a profit of approximately $89,500). By contrast, Mr Baidarman was recognised as having contributed one half of the profit of the entire project which included the profit incorporated in the "sale price" figure for villa 2.
10. In any event, the parties have not treated any agreement made during the 2006 Reconciliation as binding. They started all over again in the reference process in these proceedings, as I have explained at [19]-[21] and [58] above.
11. For his part, Mr Baidarman, denied reaching any agreement that he and Mr Rosenbaum would each keep one villa. He gave evidence that he had a conversation with Mr Rosenbaum in about June 1993 in which he agreed that Mr Rosenbaum could retain villa 2 on the basis that they must agree on the price of the villa at completion and Mr Rosenbaum must pay the partnership the market price for the villa. After completion of the development, the partners had agreed that the market price for villa 2 was $310,000. [428]
12. Mr Rosenbaum did not dispute Mr Baidarman's evidence that they had agreed on a $310,000 market price for villa 2 after completion of the Port Hacking Road project. This aspect of Mr Baidarman's evidence is consistent with the "sale price" of $310,000 recorded in relation to villa 2 in the 2006 Reconciliation document.
13. Villa 1 was sold for $290,000 shortly after completion of the Port Hacking Road project. Mr Baidarman deposed that he did not receive any proceeds of the sale of villa 1, nor did he give any directions as to how those sale proceeds should be applied. Mr Baidarman was not aware until 2013 - that is, after the commencement of these proceedings - that Mr Rosenbaum had retained the sum of $29,169.44 from the sale of villa 1. [429]
14. Mr Baidarman gave evidence that he pressed Mr Rosenbaum for information about whether or how he had paid for villa 2 on a number of occasions after Mr Rosenbaum retained villa 2. On several occasions, Mr Rosenbaum promised to provide the information as soon as possible, but did not do so. On other occasions, Mr Rosenbaum offered various explanations about how he had "paid" for villa 2, including in 2006 when Mr Rosenbaum said to Mr Baidarman words to the effect: "I've paid for Villa 2 with my personal contributions to the partnership." [430] Mr Baidarman denied suggesting during the 2006 Reconciliation process that each partner should pay 50 per cent of the total development cost for Port Hacking Road (or each pay the development cost for one villa). Indeed, he denied that any such proposal was discussed at all. [431]
15. As I have already referred to, the amount with which Mr Baidarman now seeks to surcharge Mr Rosenbaum is not the $310,000 that he says was agreed between them to be the value of villa 2 at the time that Mr Rosenbaum took possession of it, but the $390,000 for which it was subsequently sold in March 1998 (less the amount of those sale proceeds that Mr Rosenbaum did in fact pay into the Partnership) plus an occupation fee for the five year period during which Mr Rosenbaum lived in villa 2 before it was sold.
16. Mr Baidarman did not adduce any evidence of the market rental value of villa 2 for the five years during which it was occupied by Mr Rosenbaum, or any other evidence that would enable me to quantify the occupation fee with which he seeks to surcharge Mr Rosenbaum.
17. The conversation deposed to by Mr Rosenbaum and referred to at [419(1)] above does not support Mr Rosenbaum's claim that the partners agreed that they would each retain one villa. His evidence of that conversation does not rise above Mr Rosenbaum informing Mr Baidarman of his intention to live in one of the villas when completed.
18. Mr Rosenbaum's evidence of the conversation said to have occurred in October or November 1993 and referred to at [419(2)] above is inconsistent with his own evidence quoted at [420] above of a discussion with Mr Baidarman during the 2006 Reconciliation about whether or how he (Mr Rosenbaum) had paid for villa 2. The fact that Mr Rosenbaum engaged in this discussion at all is inconsistent with his evidence concerning the alleged agreement that he and Mr Baidarman would keep one villa each.
19. The reference to $310,000 as the "sale price" for villa 2 in the 2006 Reconciliation document is consistent with Mr Baidarman's evidence that he and Mr Rosenbaum agreed on completion of the Port Hacking Road project that the market price for villa 2 was $310,000. [432] This aspect of Mr Baidarman's evidence was not disputed by Mr Rosenbaum, and is consistent with Mr Baidarman's evidence that he agreed with Mr Rosenbaum in about June 1993 that Mr Rosenbaum could keep one villa provided that he paid the market price for the villa to the Partnership. It is inherently unlikely that the partners would have discussed a market price for villa 2 at all if Mr Rosenbaum was to keep it without paying for it or by paying only construction costs. I accept both of these aspects of Mr Baidarman's evidence.
20. I reject the submission made on behalf of Mr Rosenbaum that it should be inferred from the fact that the partners agreed that they would each keep one unit from the subsequent Wonga Road development that Mr Baidarman had in fact agreed to the same arrangement for Port Hacking Road. The Wonga Road project commenced in 1994. Mr Rosenbaum claims that the partners agreed in about 1995 that they would each retain one unit from the Wonga Road project. [433] Mr Baidarman claims that the agreement was made later, [434] but there is no dispute that it was made by March 1998 when the Wonga Road project was completed and Mr Rosenbaum moved into his unit. [435] Mr Baidarman gave evidence that, he initially trusted Mr Rosenbaum and believed him when Mr Rosenbaum assured him that he had paid for villa 2. [436] The evidence does not establish whether Mr Baidarman first ceased to believe these assurances before, during or after agreeing to the Wonga Road arrangement in the period between 1995 and March 1998.
21. Counsel for Mr Rosenbaum also submitted that, as there is no evidence of a specific occasion on which Mr Baidarman asked Mr Rosenbaum about payment for villa 2 prior to the 2006 Reconciliation, his evidence that Mr Rosenbaum was required to pay for villa 2 should be rejected because "it is simply not credible that Mr Baidarman would be as concerned as he says he was about Mr Rosenbaum's failure to pay for villa 2 at Port Hacking Road which Mr Rosenbaum commenced to occupy in early 1993, and yet for Mr Baidarman to continue to undertake four further development projects in partnership with Mr Rosenbaum before undertaking the 2006 Reconciliation in 2006. … it's just not credible that Mr Baidarman would have let the issue ride for some 13 years while continuing to undertake partnership developments with Mr Rosenbaum." [437]
22. I also reject that submission. For the reasons I have already explained at [435] above, the evidence does not support the submission that Mr Baidarman had "let it ride" since 1993 or for any particular period of time prior to 2006. On the contrary, given the shambolic approach to Partnership financial records to which I have referred at [10]-[18] above, it is inherently probable that some period of time passed before Mr Baidarman began to have concerns about whether Mr Rosenbaum had paid for villa 2. As I have referred to above Mr Rosenbaum did tell Mr Baidarman as late as the 2006 Reconciliation that he had paid for villa 2.
23. For those reasons, I find that there was no agreement between the partners that they would each keep one villa in the Port Hacking Road project. I find that the agreement reached was that Mr Rosenbaum was permitted to retain villa 2 provided that he paid for it. The debiting of the construction cost of villa 2 to Mr Rosenbaum in the 2006 Reconciliation process did not constitute payment for villa 2 as the cost of construction did not reflect what Mr Rosenbaum had received. Even if the 2006 Reconciliation document might be interpreted as evidencing an agreement by Mr Baidarman that the "payment" of the villa 2 construction cost would discharge Mr Rosenbaum's obligation to pay the Partnership (and I am not persuaded that such an interpretation is reasonably available), the parties have subsequently chosen to abandon any agreement they reached during the 2006 Reconciliation in any event.
24. For completeness, I note that the 2006 Reconciliation document provides no support for Mr Rosenbaum's contention referred to at [182] that the partners agreed that villa 2 was worth $10,000 more than villa 1. On the contrary, the 2006 Reconciliation document includes a list of "outstanding issues" that refers to "difference in prices for 1 + 2 at Port Hacking Road - $10K difference". [438] It is difficult to draw any inference from this note, given that other pages of the document attribute sale prices to villas 1 and 2 that are $20,000 apart, as I have referred to above. The note arguably suggests that there was an outstanding issue as to whether the price difference should be $10,000 rather than $20,000. It certainly does not support an inference that the partners had agreed that the difference in prices for the two villas was $10,000. In any event, as I have said above, the parties subsequently abandoned any agreement that they reached during the 2006 Reconciliation.
25. For those reasons, there will be an order in terms of prayer 13(e) of the Cross-Claim to the effect that, on the taking of the Partnership account, Mr Rosenbaum be charged with liability to the Partnership for $390,000 from 18 March 1998 in respect of proceeds of the sale of villa 2 in the Port Hacking Road project, subject to Mr Rosenbaum being credited with the amount of $249,656 that he paid to the Partnership out of those sale proceeds. Mr Rosenbaum's claim for an order that he be charged only with the $221,454 construction cost of villa 2 will be dismissed. [439] Mr Rosenbaum's claim in prayer 5A(k) of the Further Amended Statement of Claim for an order that he be credited with a $249,656 contribution to the Partnership without being charged with the sale proceeds of villa 2 will also be dismissed.
26. In the absence of any evidence concerning the value of an occupation fee for villa 2 in the period from completion of the Port Hacking Road project until the sale of villa 2 in March 1998, Mr Baidarman's claim in prayer 13(f) of the Cross-Claim for an order that Mr Rosenbaum be charged with an occupation fee on the taking of the Partnership account will be dismissed.

Villa 1 in the Port Hacking Road project

1. I have outlined the issues in dispute between Mr Rosenbaum and Mr Baidarman concerning villa 1 at [164]-[181], [184], [195]-[196] and [198] above.
2. The first issue is whether Mr Rosenbaum should be charged with compound interest on his admitted withdrawal of $29,169.44 from the Partnership by retaining part of the proceeds of sale of villa 1 in Mrs Rosenbaum's account: see [169]-[172] above.
3. Villa 1 was the property of the Partnership and the proceeds of sale of villa 1 were Partnership funds. This follows from my finding above that there was no agreement between the partners that they would each keep one unit in the Port Hacking Road project.
4. The evidence establishes that the solicitor acting on the sale of villa 1 held the deposit of $29,000 as a stakeholder. Following completion of the sale, the solicitor sent Mr Rosenbaum a cheque on 23 March 1994 in the amount of $29,169.44, being the deposit plus the vendor's half share of interest earned on the deposit. The cheque was made out to Mr and Mrs Rosenbaum as they were the legal owners of the land and the vendors named in the contract for sale. Mr Rosenbaum banked the cheque in Mrs Rosenbaum's account. [440]
5. In the reference process undertaken in 2016 and 2017, Mr Rosenbaum treated the $29,169.44 as a withdrawal by him from the partnership. [441] I note that this is consistent with my findings at [438] above that there was no agreement between the partners that they would each keep one villa.
6. In his affidavit evidence and cross-examination, Mr Rosenbaum adopted a different position and said that it was Mr Baidarman (not the Partnership) who was entitled to those funds and he (Mr Rosenbaum) had simply made a mistake and forgotten to remit the funds to Mr Baidarman once the proceeds of the cheque had cleared in Mrs Rosenbaum's account. Mr Rosenbaum denied that he had deliberately retained these funds in Mrs Rosenbaum's account. [442]
7. Mr Rosenbaum was cross-examined in a manner that I consider would have suggested to him that he allegedly misappropriated the $29,169.44 from Mr Baidarman. It was not squarely put to him that he had misappropriated that sum from the Partnership. [443] In these circumstances, I decline to make an order requiring Mr Rosenbaum to pay compound interest on this specific sum of $29,169.44.
8. A further reason for declining to make such an order is that counsel for Mr Baidarman did not address any submissions to the claim for compound interest in respect of this particular sum. In particular, the Court was not referred to any evidence suggesting that Mr Rosenbaum had received interest at a particular rate or should fairly be presumed to have received such interest or profited from the retention of this sum: Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298; [2003] NSWCA 10 at [300]-[304]. It is not necessary to make any specific order in relation to the sum of $29,169.44 for the reasons identified at [172] above.
9. The second issue is whether: 1. Mrs Rosenbaum and Tania Rosenbaum paid $9,912 in tax payable in respect of the sale of villa 1 in June 1994; and 2. Ironwell paid a further amount of $13,816 in tax payable in respect of the sale of villa 1 in February 1995, and, if so, how these payments should be accounted for in the taking of a final account of the Partnership: see [178]-[181] and [196] above.
10. The only evidence adduced in support of the alleged payment of $9,912 is the 2006 Reconciliation document and Mr Rosenbaum's assertion that the payment was made by his wife and daughter. [444] That 2006 Reconciliation document is not evidence of the truth of its contents in relation to the alleged payment: see [29] above. Mr Rosenbaum's assertion was admitted into evidence as evidence of his contention only, and are not evidence of the truth of the matters asserted. Mr Rosenbaum has therefore failed to discharge his onus of proof that the Rosenbaum parties made this payment for the benefit of Mr Baidarman or the Partnership.
11. The only evidence adduced in support of the alleged payment of $13,816 is Mr Rosenbaum's assertion that the payment was made by Ironwell. [445] The bank statements for the Ironwell account for February and March 1995 do not record a payment or debit entry of this or any similar amount. [446] Mr Rosenbaum's assertion was admitted into evidence as evidence of his contention only and is not evidence of the truth of the matters asserted. Mr Rosenbaum has therefore failed to discharge his onus of proof that Ironwell made this payment for the benefit of Mr Baidarman or the Partnership. It is therefore unnecessary to consider whether any such payment from Ironwell's funds would have been a payment from Partnership funds as opposed to a payment by or on behalf of Mr Rosenbaum.
12. For those reasons, prayer 5A(e) of the Further Amended Statement of Claim will be dismissed. Prayer 5A(i) of the Further Amended Statement of Claim will also be dismissed insofar as it relates to item 7 of schedule MFI-3 to the referee's report. An order will be made to the effect sought by Mr Baidarman dismissing Mr Rosenbaum's claims to be credited with the alleged payments of $9,912 and $13,816 on the taking of a final account of the Partnership.
13. The third issue relates to an undisputed payment of $115 that Mr Rosenbaum made to Mr Baidarman for the purpose of, or as reimbursement for, repairs to villa 1. Mr Rosenbaum claimed that this was a payment that he made in connection with the Partnership but for the sole benefit of Mr Baidarman personally, presumably on the basis of his contention that villa 1 was the property of Mr Baidarman on completion of the Port Hacking Road project in accordance with the alleged agreement that each partner would retain one villa. In light of my findings above that no such agreement was entered into, I reject Mr Rosenbaum's contention that the $115 should be treated as a direct transaction on the taking of accounts and accept Mr Baidarman's contention that the $115 should be treated as a contribution by Mr Rosenbaum to the Partnership.
14. Prayer 5A(i) of the Further Amended Statement of Claim will therefore be dismissed to the extent that it relates to item 5 of schedule MFI-3 to the referee's report and an order will be made instead that, on the taking of the Partnership account, Mr Rosenbaum is to be credited with a contribution of $115 made on 28 January 1994.

Miscellaneous issue relating to Port Hacking Road

1. The only evidence adduced in support of Mr Rosenbaum's claim that Mr Baidarman received $645 in cash for the sale of surplus materials from the Port Hacking Road project [447] is the 2006 Reconciliation document and bare assertions by Mr Rosenbaum. [448] The 2006 document is not evidence of the truth of its contents in relation to the alleged withdrawal of $645: see [29] above. Mr Rosenbaum's assertions were admitted into evidence as evidence of his contentions only, and are not evidence of the truth of the matters asserted. Mr Rosenbaum has therefore failed to discharge his onus of proof.
2. Accordingly, there will be an order dismissing prayer 5A(j) of the Further Amended Statement of Claim insofar as it relates to item 5 in schedule MFI-2 to the referee's report.

Payment of $37,000 to Ironwell Super

1. I have summarised the parties' competing contentions at [199]-[202] above.
2. It is common ground that the $37,000 was paid using Merton Street sale proceeds that Mr Rosenbaum caused to be deposited in Mrs Rosenbaum's account. [449] I find that these funds were not Mr Rosenbaum's personal funds at the time the $37,000 payment was made. Mr Baidarman had not agreed to the sale proceeds being deposited into Mrs Rosenbaum's account. Mr Rosenbaum's evidence on this subject did not rise higher than that Mr Baidarman had declined to have the funds deposited in Dabjade's account. [450] I accept Mr Baidarman's submission that this does not constitute authorisation or agreement for Mr Rosenbaum to deposit the sale proceeds in Mrs Rosenbaum's account. Mr Rosenbaum's subsequent acknowledgement in the reference process many years later that he must be charged with the sale proceeds withdrawn from the Partnership, and Mr Baidarman's acceptance that this charge is appropriate, does not mean that the $37,000 payment made in December 1993 can properly be re-characterised retrospectively as a payment from Mr Rosenbaum's personal funds. Mr Rosenbaum's submissions merely asserted, without reasons or explanation, that the payment could or should be re-characterised in this manner.
3. Moreover, I reject Mr Rosenbaum's evidence that the partners agreed in December 1993 that the assets of Ironwell Super would be treated as assets of the Partnership. [451] Assuming (without deciding) that Mr Baidarman knew about Ironwell Super in December 1993 (which he denies), it is inherently unlikely that he would have agreed that a superannuation fund intended to hold assets for the Partnership would have as its trustee a company controlled exclusively by Mr and Mrs Rosenbaum or for the named beneficiaries of the fund to be limited to members of the Rosenbaum family. It follows that, even if Mr Rosenbaum had paid the $37,000 from his own personal funds, there is no basis for characterising the payment at the time it was made as a contribution to the Partnership rather than as a contribution to Ironwell Super for the benefit of the named beneficiaries.
4. However, I also reject Mr Baidarman's contention that on the taking of accounts of the Partnership, Mr Rosenbaum "ought to be surcharged with the amount of $37,000 and all benefits accruing to him or anyone else arising from the taking and enjoyment thereof, or with compound interest at the trustee rate." [452]
5. Mr Baidarman gave evidence that the partners agreed in about January 1995 that the Partnership should contribute equally to Ironwell Super and a superannuation fund that Mr Baidarman would establish for himself. [453] I accept that evidence, which was not disputed in Mr Rosenbaum's affidavit in reply or challenged in cross-examination. I also note that it was not put to Mr Baidarman in cross-examination that he and Mr Rosenbaum had agreed that funds and assets of Ironwell Super would be treated as Partnership assets. [454]
6. Mr Baidarman also gave evidence that the Partnership made payments to Ironwell Super of $20,886 on 5 January 1995 and $94,500 on 26 June 1997, in addition to the $37,000 payment in December 1993 (that is, total payments of $152,386) [455] and that Mr Baidarman personally paid contributions to Baidarman Super of $54,340 on 27 June 1997, $120,979 to Ironwell Super on 30 June 1998 and $60,712 to either Ironwell Super or Baidarman Super on 29 June 1999. Mr Baidarman claimed those three payments that he made from his personal funds as contributions to the Partnership, and those claims have either been verified by the referee or accepted by Mr Rosenbaum. [456]
7. The parties' submissions did not address whether the six payments referred to above are the totality of payments made by or on behalf of the Partnership to the two superannuation funds. Whilst it is clear that the $37,000 payment to Ironwell Super was not matched with a contribution by the Partnership to Baidarman Super during the period between 23 December 1993 (when the $37,000 payment was made) and 27 June 1997 (when Mr Baidarman made the first payment to his own superannuation fund shortly before it was established on 1 July 1997), [457] the evidence referred to by the parties does not establish whether the payments to both superannuation funds were unequal from July 1997 onwards.
8. In circumstances where the partners agreed in about January 1995 that the Partnership would contribute equally to both superannuation funds, it seems to me that the $37,000 payment ought not be treated differently from the time of that agreement from other payments to superannuation funds, unless payments by the Partnership (or payments by partners that are to be treated as contributions to the Partnership) to both funds were unequal.
9. A further problem with Mr Baidarman's contention is that he did not put forward any proposed adjustment to remove the element of double counting in his favour that would result from Mr Rosenbaum being charged with the withdrawal of the $37,000 in addition to being debited with the withdrawal of the $167,698 which both partners accepted during the reference process.
10. For those reasons, prayer 5A(c) of the Further Amended Statement of Claim will be dismissed and the order contended for by Mr Baidarman as referred to at [461] above will not be made.

$26,000 loan to Mr Baidarman

1. I have referred to this loan at [205]-[207] above. Irrespective of whether it is properly characterised as a loan from Mr Rosenbaum to Mr Baidarman or as a partial repayment by Mr Rosenbaum of a loan owing to Mr Baidarman, it was unrelated to the Partnership save that the borrower and lender happened to be partners. Counsel for Mr Rosenbaum acknowledged this in submissions. [458] It is therefore outside the scope of the taking of the Partnership account. Mr Rosenbaum did not plead a claim to recover the $26,000 as a debt or on any other basis. It is therefore not necessary to address whether any such claim would have been statute barred, as Mr Baidarman contends.
2. Mr Rosenbaum's submission that the $26,000 was included together with other payments relating to the Partnership in calculating the net amount of $13,329 paid by Mr Rosenbaum to Mr Baidarman in respect of "private matters" in October 2010, and so was part of a process of "evening up of payments made by the partners in relation to Partnership expenses" is no answer to this. [459] If anything, this is a further reason why Mr Rosenbaum should not be credited with a contribution of $26,000 on the taking of the Partnership account. Unless the $13,329 payment is to be adjusted or disturbed on the taking of a final account of the Partnership (and it is not, for the reasons addressed at [627] below), Mr Rosenbaum has already received credit for the $26,000 payment in the form of a reduction in the amount that he was required to pay Mr Baidarman in respect of "private matters". I note that Mr Baidarman does not seek to re-open this $13,329 calculation in these proceedings, even if (as he contends) that calculation wrongly gave credit to Mr Rosenbaum for the $26,000 payment made to him in October 1994. [460]
3. For those reasons, prayer 5A(i) of the Further Amended Statement of Claim will be dismissed insofar as it relates item 8 of schedule MFI-3 to the referee's report. An order will be made to the effect sought by Mr Baidarman dismissing Mr Rosenbaum's claim to be credited with the $26,000 payment on the taking of the Partnership account.

Alleged use of Partnership funds for construction and development of Mr Rosenbaum's Sumner Street property

1. The parties' contentions are summarised at [208]-[215] above.
2. Mr Baidarman bears the onus of proving that Mr Rosenbaum should be charged with withdrawals from the Partnership totalling $308,891 rather than the $152,032 that Mr Rosenbaum has already acknowledged.
3. The sole evidence relied on by Mr Baidarman in support of his contention that Mr Rosenbaum withdrew $308,891 from the Partnership for the Sumner Street development is a handwritten document prepared by Mr Rosenbaum and made available to Mr Baidarman during the course of these proceedings. The document bears the headings "Tax 1994/95 - Property at 15 Sumner Street, Sutherland - Ironwell Pty Ltd Construction Expenditure - Direct Costs". The document then lists ten expenses, or categories of expenses, totalling $308,981.65. [461]
4. Mr Rosenbaum gave evidence to the effect that the cost of his Sumner Street development was funded by a Westpac loan for $300,000 and the $152,032 that he withdrew from the Ironwell account and subsequently repaid. [462] He relied on a letter from Westpac dated 22 August 1994 addressed to him personally and approving a loan of $300,000. [463] He acknowledges that the $152,032 withdrawn from the Ironwell account was Partnership money. There is no suggestion that the Ironwell account was a mixed fund of Partnership funds and Mr Rosenbaum's personal funds at the relevant time. [464]
5. In cross-examination, Mr Rosenbaum said that he prepared the document referred to at [473] above for the purpose of instructing his accountant for the preparation of his tax return for the year ending 30 June 1995. He said that the document set out the costs of the Sumner Street development that had been paid directly by Ironwell. [465] Mr Rosenbaum said that the whole of the $308,891 recorded in the document prepared for his accountant was not paid from Partnership funds because he also paid costs from monies drawn from the $300,000 Westpac loan referred to above. [466]
6. It was submitted on behalf of Mr Rosenbaum that Ironwell was "being used as the corporate vehicle for the Sumner Street project" and that this is why the whole of the $308,891 costs recorded in the document were described as costs incurred by Ironwell. It was submitted that the document did not record or demonstrate that $308,891 was withdrawn from the Partnership funds in the Ironwell account to pay for the Sumner Street development. [467]
7. It is difficult to understand the submission that Ironwell was "being used as a corporate vehicle for the Sumner Street project". There is no evidence that the Sumner Street land was purchased in the name of Ironwell. As I have referred to earlier in these reasons, Ironwell did not hold a builders' licence so would not have been undertaking construction work itself. The $300,000 Westpac loan was approved for Mr Rosenbaum personally, not Ironwell, as referred to above.
8. However, I accept Mr Rosenbaum's evidence that he did not withdraw $308,891 from the Ironwell account. That evidence is consistent with the objective evidence provided by the bank statements for the Ironwell account. Those statements show that the total of all debits to that bank account for the financial year ending 30 June 1995 was only $213,523. [468] The amounts of some of the individual debit transactions have been obscured by highlighting and are not legible from the photocopied statements comprising the exhibit. However, the $213,523 debit transactions include at least the largest of the withdrawals comprising the $152,032 (being $100,662 withdrawn on 22 November 1994). [469] It was not put to Mr Rosenbaum in cross-examination that any specific debit transactions on the Ironwell account related to Sumner Street construction costs that had not been included in the $152,032 withdrawals acknowledged in the reference process (most of which had also been acknowledged by Mr Rosenbaum in the 2006 Reconciliation).
9. The parties did not identify evidence of any other source of Partnership funds, other than the Ironwell account, from which Mr Rosenbaum might have paid Sumner Street construction expenses over and above the $152,032 paid out of the Ironwell account. Indeed, the evidence indicates that there was no other source of Partnership funds. The funds derived from the Merton Street project had already been spent on the Port Hacking Road project by about October 1993. With the exception of the deposit of $29,169.44 that was paid to Mrs Rosenbaum, the proceeds of the sale of villa 1 in the Port Hacking Road project in March 1994 (which I have found were Partnership funds) had been applied to discharge Partnership debits with the balance deposited in a Westpac commercial bill where they remained until September 1995. [470]
10. For those reasons, the evidence does not support a finding on the balance of probabilities that Mr Rosenbaum withdrew from the Partnership any sum in excess of $152,032 to pay construction expenses for the Sumner Street development. In light of the fact that the withdrawal of $152,032 has already been addressed in the reference process and in light of Mr Baidarman's acknowledgement that Mr Rosenbaum repaid a total amount of $192,741 to the Partnership between January 1995 and April 1996, prayer 13(g) of the Cross-Claim will be dismissed and there will be an order in the terms sought by Mr Rosenbaum to the effect that he be credited with the repayments totalling $192,741 on the taking of the Partnership account.
11. The submissions made on behalf of Mr Baidarman devoted much attention to the question whether he consented to Mr Rosenbaum's use of Partnership funds for the Sumner Street development at the time. It is not necessary to determine that question in light of my conclusions above.

Dealings with the balance of the ANZ facility funds after February 1996

1. I have referred at [219]-[220] to Mr Baidarman's contentions in relation to the sum of $16,183.73 said to have been transferred from the ANZ facility to the Ironwell account in February 1996, and Mr Rosenbaum's responses to those contentions.
2. The bank statements for the Ironwell account record a deposit of $16,183.73 on 12 February 1996. [471] Mr Baidarman gave evidence, without reference to bank records or other documents, that those funds had been paid out of the ANZ facility into the Ironwell account. Mr Baidarman also deposed that the ANZ facility comprised Partnership funds, namely $142,508.05 of the net sale proceeds of villa 1 at Port Hacking Road that had been invested in the ANZ facility after previously being invested in a series of Westpac commercial bills, [472] and an amount of $59,000 that Mr Baidarman borrowed from and repaid to the Partnership shortly before the ANZ facility was established. [473] Mr Rosenbaum did not adduce evidence in reply disputing Mr Baidarman's evidence concerning the source of the $16,183.73 deposited into the Ironwell account or disputing that the proceeds of the ANZ facility were Partnership funds, and Mr Baidarman was not challenged on this evidence in cross-examination.
3. In the absence of contrary evidence or challenge, I accept Mr Baidarman's evidence and find that the sum of $16,183.73 deposited into the Ironwell account on 12 February 1996 was Partnership funds.
4. The submissions made on behalf of Mr Baidarman did not address his pleaded contention that, by reason of the deposit of the sum of $16,183.73 into the Ironwell account on 12 February 1996, all funds held in the Ironwell account were presumed to be Partnership funds. The Ironwell account was closed on 26 June 1996 following several further deposits after 12 February 1996 and numerous withdrawals from the account by cheque. Mr Baidarman did not seek any specific order or declaration reflecting his contention that all funds held in the Ironwell account were presumed to be Partnership funds. [474] As I understand it, this was merely an element in Mr Baidarman's contentions concerning Ironwell's payments of wages, management fees and dividends: see [238]-[241], [247]-[249] and [250]-[253] above. The issues concerning wages, management fees and dividends are addressed at [512]-[543] below.

Payments made by Mr Rosenbaum in 1994 and 1995

1. I have referred to the relevant payments at [223]-[224]. As I have noted there, the only question is whether payments should be treated as "direct transactions" (as Mr Rosenbaum contends) or as contributions by Mr Rosenbaum to the Partnership (as Mr Baidarman contends).
2. Mr Rosenbaum's submissions did not address why these particular payments should be treated as having been payments that benefitted Mr Baidarman personally, as opposed to payments made to meet Partnership expenses or to discharge Partnership liabilities. The submissions simply referred to Mr Rosenbaum's evidence in paragraphs 351 to 371 of his 25 February 2019 affidavit. In those paragraphs, Mr Rosenbaum deposed that all four payments were made to Dabjade. It will be recalled that Dabjade purchased the Wonga Road land on behalf of the Partnership. [475] Mr Rosenbaum describes the $9,500 payment as having been made to cover part of the cost of Dabjade acquiring the Wonga Road land and the other three payments as having been made to cover interest expenses "on the Wonga Road site". Mr Rosenbaum's own evidence does not support these payments as being treated as anything other than a contribution by him to the Partnership on the taking of the Partnership account.
3. For those reasons, there will be an order dismissing prayer 5A(i) of the Further Amended Statement of Claim to the extent that it relates to items 6A and 9 to 11 in schedule MFI-3 to the referee's report. There will be an order in terms of paragraph 3 of the defendant's proposed partnership accounting orders to the effect that those items be treated as contributions by Mr Rosenbaum to the Partnership.

Difference in value between Wonga Road townhouses

1. The Wonga Road development comprised four townhouses in two separate strata plans: 1. Lot 1 in SP 575746, known as 1/40 Wonga Road; 2. Lot 2 in SP 575746, known as 2/40 Wonga Road, which was the townhouse retained by Mr Baidarman; 3. Lot 1 in SP 57477, known as 1/40A Wonga Road, which was the townhouse retained by Mr Rosenbaum; and 4. Lot 2 in SP 57477, known as 2/40A Wonga Road.
2. It was common ground between the parties that August 1998 is the date at which any difference between the value of the townhouses falls to be determined. As referred to at [228]-[229] above, Mr Baidarman contends that the value of 1/40A Wonga Road exceeded the value of 2/40 Wonga Road as at August 1998 by $50,000 and that Mr Rosenbaum should therefore be charged with liability to the Partnership of $50,000 on the taking of the Partnership account.
3. As the party contending that Mr Rosenbaum should be charged with liability of $50,000, Mr Baidarman bears the onus of proving that 1/40A Wonga Road was worth $50,000 more than 2/40 Wonga Road as at August 1998.
4. Mr Baidarman relied on the report and supplementary report of Ms Nicole Adamson, certified practising valuer. [476] Ms Adamson was retained by the parties jointly. Both reports were tendered and Ms Adamson was questioned by counsel for both parties during the hearing.
5. Ms Adamson's reports described her approach to determining any difference between the value of 1/40A Wonga Road and 2/40 Wonga Road as at August 1998. In short, Ms Adamson had studied the plans for the Wonga Road development, noting the difference between the size, layout and features of the two townhouses, including the superior views from 2/40 Wonga Road compared to the views from 1/40A Wonga Road. Ms Adamson had undertaken a site inspection, during which she had been able to appreciate the location of 1/40A and 2/40 on the site as a whole, had been able to look through the front door of 2/40 and speak with the present owner of that townhouse, and had undertaken an internal inspection of 1/40A which is still owned and occupied by Mr and Mrs Rosenbaum. Ms Adamson had assessed sales data for sales of other properties in Wonga Road and the surrounding area in or about August 1998 that she considered to be comparable to with 1/40A Wonga Road or 2/40 Wonga Road.
6. The principal comparable sale that Ms Adamson relied on for 1/40A Wonga Road was the sale of the immediately adjacent property 2/40A Wonga Road for $630,000 on 1 May 1998.
7. Taking all of these matters into account, Ms Adamson expressed the opinion that, as at August 1998, the market value of 1/40A Wonga Road (the townhouse retained by Mr Rosenbaum) was $650,000, whereas the market value of 2/40 Wonga Road (the townhouse retained by Mr Baidarman) was $600,000.
8. In oral closing submissions, counsel for Mr Rosenbaum submitted that the Court should not accept Ms Adamson's opinion in relation to the market value of 1/40A Wonga Road on the basis that, in estimating the market value of that townhouse as $20,000 more than the price for which 2/40A Wonga Road had sold on 1 May 1998, Ms Adamson had taken into account the potential for a purchaser to further develop 1/40A by building in an area that had been excavated underneath the garage. It was submitted that Ms Adamson had assumed that 2/40A did not have the same potential for further development, and that this assumption was wrong because a similar area had been excavated under the garage of 2/40A. However, as counsel for Mr Baidarman submitted, no evidence of such excavation having been undertaken in respect of 2/40A was identified in cross-examination of Ms Adamson or in the submissions made on behalf of Mr Rosenbaum. [477]
9. I note that the two other matters referred to by Ms Adamson in placing a higher market value on 1/40A as at August 1998 than the May 1998 sale price for 2/40A were the rising prices in the property market during 1998 and the greater area of 1/40A compared to 2/40A. [478] As counsel for Mr Rosenbaum acknowledged in closing submissions, there is no dispute that 1/40A does have a larger area than 2/40A. The submissions made on behalf of Mr Rosenbaum did not identify any error said to have been made by Ms Adamson in accounting for rising property market prices between May and August 1998. [479]
10. In relation to 2/40 Wonga Road, Ms Adamson considered that the sale of the neighbouring property 42 Wonga Road for $580,000 on 8 February 1999 provided the lower end of the range for the value of 2/40 Wonga Road as at August 1998. However, in cross-examination, Ms Adamson conceded that 42 Wonga Road was not comparable as it was an unsubdivided property with a dilapidated dwelling. Counsel for Mr Rosenbaum did not explore with Ms Adamson in cross-examination the impact of this concession on her opinion concerning the August 1998 value of 2/40 Wonga Road. Counsel for Mr Baidarman did take this up with Ms Adamson. Ms Adamson's evidence was that, taking into account the sales of the two next best comparisons identified in her report for 2/40 Wonga Road, the exclusion of 42 Wonga Road from consideration did not alter her opinion about the market value of 2/40 Wonga Road as at August 1998. [480] Counsel for Mr Rosenbaum did not seek to explore this subject further with Ms Adamson and did not identify in closing submissions any reason why the Court should not accept this evidence.
11. In oral closing submissions, counsel for Mr Rosenbaum submitted that the Court should not accept Ms Adamson's opinion as to the value of 2/40 Wonga Road as at August 1998 for two reasons. [481]
12. The first reason was Ms Adamson's error that I have referred to above in taking into account the sale price of 42 Wonga Road in determining the bottom of the range of market values for 2/40 Wonga Road. In light of Ms Adamson's further evidence under cross-examination by Mr Baidarman's counsel, and in the absence of Mr Rosenbaum's submissions identifying why the Court should find that this error rendered Ms Adamson's opinion concerning 2/40 Wonga Road unreliable, I decline to reject Ms Adamson's opinion on the grounds of this error which she readily conceded in cross-examination.
13. The second reason was that Ms Adamson had not inspected the interior of 2/40 Wonga Road and counsel for Mr Rosenbaum submitted that the townhouse "being at the top of the site, had sweeping and unobstructed views, which were vastly superior to those from 1/40A." [482] It is plain from the description of the location of the two properties in Ms Adamson's reports that she was well aware of the higher position of 2/40 Wonga Road compared to 1/40A Wonga Road. Ms Adamson expressly stated in her report and in cross-examination that 2/40 had superior views to 1/40A and that this would have been the case as at the August 1998 valuation date. In cross-examination, Ms Adamson agreed that the views from 2/40 are spectacular water views from the ground and first floors that are unobstructed. It was not put to Ms Adamson that this had not been taken into account adequately in her valuation of 2/40 Wonga Road. [483] The submissions made on behalf of Mr Rosenbaum did not contend that Ms Adamson had in fact undervalued 2/40 Wonga Road by failing to take adequate account of the views from that property. It was merely contended that she had not been able to enter into the property to see those views for herself. However, it seems to me that Ms Adamson compensated for this by making assumptions about the spectacular views from 2/40 Wonga Road. It was not put to her that she should have made different assumptions about the views for the purpose of her valuations.
14. In my opinion, Ms Adamson's valuation is based on careful consideration of the nature and features of the properties and a well-established approach to ascertaining market value based on an assessment of sale prices of comparable properties at about the time of the relevant valuation date. The ancient valuation date of 1998 was undoubtedly challenging, but the matters raised on behalf of Mr Rosenbaum as referred to above were the only grounds on which it was submitted that I should not accept Ms Adamson's opinion. I reject those grounds for the reasons already explained above.
15. Accordingly, on the basis of Ms Adamson's evidence, I find that, as at August 1998, the value of the townhouse at 1/40A Wonga Road retained by Mr Rosenbaum was $650,000 and the value of the townhouse at 2/40 Wonga Road retained by Mr Baidarman was $600,000.
16. For those reasons, there will be an order in terms of prayer 13(h) of the Cross-Claim [484] and an order in terms of paragraph 2(f) of the defendant's proposed partnership accounting orders. [485]

Improvements to 1/40A Wonga Road

1. As referred to at [230]-[231] and [236] above, the parties resolved their differences about this issue during the course of the hearing although each party formulated orders in slightly different terms to give effect to this resolution.
2. In my opinion, Mr Baidarman's formulation of the order set out at [236(b)] above is more appropriate and an order will be made in terms of prayer 13(i) of the Cross-Claim and paragraph 8(i) of the defendant's proposed partnership accounting orders.

Taxation liabilities of Dabjade during the period of the Wonga Road project

1. In relation to the matters referred to at [232] and [237] above, the orders will include a notation to the effect that Mr Baidarman does not press paragraph 59 of the Cross-Claim insofar as it relates to items 626, 647, 648 and 654 of the Defendant's Schedule of Contributions and Withdrawals (being schedule MFI-4 to the referee's report).

Alleged withdrawals from Partnership funds in August 1998

1. The parties' contentions and claims in relation to withdrawals of $4,271 and $4,225 from an Ironwell bank account on 31 August 1998 are set out at [242]-[245] above. Mr Baidarman accepts that the withdrawals were made and that the funds were Partnership funds. [486]
2. The withdrawals were made by cheque and the only evidence of the purpose of each payment is the notation on each cheque butt made by Mr Baidarman at the time. According to those notations, the $4,271 payment was directed to payment of Dabjade's provisional tax and was withdrawn from Partnership funds in repayment of a loan that Dabjade had earlier made to the Partnership. The $4,225 payment was for a provisional tax instalment for Mr and Mrs Baidarman. Neither partner now has any independent recollection of the transaction, and there is no evidence that casts doubt on the accuracy of the descriptions of the payments that Mr Baidarman recorded at the time. There is no evidence to suggest that provisional tax for which Mr and Mrs Baidarman were liable was a Partnership expense or was agreed to be treated as a Partnership expense in 1998. [487]
3. Mr Baidarman made no submissions in relation to his pleaded laches defence and I therefore assume that this defence is not pressed. In any event, the partners are engaged in a long-running dispute, all of which relates to transactions that occurred years or decades ago that they did not bother to document adequately, or at all, at the time. The notion that a defence of laches might apply in relation to only two of those transactions is curious.
4. For those reasons, there will be an order that on the taking of the Partnership account, Mr Baidarman is to be surcharged with a withdrawal of $4,225 from the Partnership on 31 August 1998 and an order dismissing Mr Rosenbaum's claim in relation to the $4,271 withdrawal. [488]

Payment of wages to Mrs Rosenbaum

1. The parties' contentions and claims in relation to wages allegedly paid by Ironwell to Mrs Rosenbaum in the 1994 to 1997 financial years are set out at [238]-[241] above.
2. During the reference in these proceedings, Mr Rosenbaum claimed that he had made a contribution to the Partnership by the payment of wages by Ironwell to Mrs Rosenbaum in the amounts of $34,000, $21,000, $7,000 and $37,000 in the 1994, 1995, 1996 and 1997 financial years (respectively). In dealing with that claim, the referee found that the payments had been made by Ironwell. [489] The Court adopted the referee's findings that the payments had been made to Mrs Rosenbaum, subject to: [490] 1. the qualification that the Court did not adopt any finding that those payments were a contribution by Mr Rosenbaum to the Partnership; and 2. the notation that the referee did not determine (and was not required to determine) whether the money paid to Mrs Rosenbaum was properly paid for services actually rendered.
3. I reject the submission made on behalf of the Rosenbaum parties at the hearing before me that the payments were not in fact made at all. That issue has been determined by the Court's adoption of the referee's findings that the payments were in fact made by Ironwell. I also reject the Rosenbaum parties' attempt to characterise the wage payments that Mr Rosenbaum claimed as a contribution to the Partnership in his schedule submitted to the referee as a claim for an amount owed to, but not yet paid to, Mrs Rosenbaum. The transactions were described in the plaintiff's schedule as payments made, not liabilities incurred. If the wages were owed but not paid (as Mr Rosenbaum now contends), they would represent a liability of the Partnership to Mrs Rosenbaum (assuming that she performed work for the Partnership) and there would have been no basis for Mr Rosenbaum to claim them as a contribution by Ironwell on his behalf to the Partnership. [491]
4. My rejection of the submissions referred to immediately above makes it unnecessary to address the submission made on behalf of the Rosenbaum parties that sought to explain Mrs Rosenbaum's inclusion of the payments in her income tax returns for the relevant financial years on the basis that this allowed Ironwell to claim her wages as a business expense. [492]
5. The Rosenbaum parties also submitted that, even if the payments were made, this was not relevant to the Partnership because Ironwell is a private company owned by Mr and Mrs Rosenbaum. This submission was made for the first time in oral closing submissions as a bare assertion. [493] I understand it to be, in substance, a submission that the funds held by Ironwell during the financial years 1994 to 1997 were not Partnership funds and that any payment of wages by Ironwell was not a withdrawal from Partnership funds.
6. Counsel for the Rosenbaum parties did not support that submission with any analysis of the evidence concerning the funds held by Ironwell during those years. I have found that the credit balance of the Ironwell account (including the funds deposited in that account from the Westpac facility) represented funds held by Ironwell exclusively for the benefit of the Partnership in the period up to at least October 1993. [494] The Ironwell account was closed on 26 June 1996, after the balance had been reduced to nil by a series of withdrawals. [495] If the Rosenbaum parties contend that the funds standing to the credit of the Ironwell account during the 1994, 1995 and 1996 financial years were not exclusively Partnership funds, and that any payment of wages by Ironwell to Mrs Rosenbaum in those years was therefore not a withdrawal from the Partnership, the Rosenbaum parties bear the onus of establishing this: Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 at [457]-[461]. They did not discharge this onus. I therefore reject the submission that the payments that the referee found were made by Ironwell to Mrs Rosenbaum for wages in the 1994 to 1996 financial years were not payments from Partnership funds.
7. After the closure of the Ironwell account in June 1996, Ironwell opened an account with Illawarra Mutual Building Society Limited (IMB) which it operated until 10 September 1997. [496] There is no evidence that Ironwell had any other bank account or financial facility during the 1997 financial year. In that year, the Partnership was completing the Miranda project (the land for which had been purchased by Ironwell on behalf of the Partnership) [497] and continuing work on the Wonga Road project (the land for which had been purchased by Dabjade on behalf of the Partnership). [498] Significant sums were deposited into Ironwell's IMB account between March and June 1997. In contrast to the smaller deposits prior to March 1997 which were made by personal cheque, many of the significant deposits from March 1997 were made by bank cheques issued by other financial institutions. One of the deposits in March 1997 was a cheque drawn on an account of "Ray White Sales Trust".
8. In the absence of any evidence of Ironwell undertaking any commercial activities in its own right during the 1997 financial year (as opposed to activities on behalf of the Partnership), I infer that at least some of the significant deposits paid into Ironwell's IMB account in the period March to June 1997 represented proceeds of sale of the Miranda project undertaken by the Partnership. It follows that from at least March 1997, the funds standing to the credit of Ironwell's IMB account represented either exclusively funds of the Partnership or a mixed fund which included Partnership funds. Again, the Rosenbaum parties did not discharge their onus of establishing that wages paid by Ironwell were not paid from Partnership funds. I therefore reject the submission that the payments that the referee found were made by Ironwell to Mrs Rosenbaum for wages in the 1997 financial year were not payments from Partnership funds.
9. As Mr Baidarman submitted, Mr Rosenbaum did not suggest that Mr Baidarman had agreed to or authorised the engagement of Mrs Rosenbaum as a paid employee or contractor to perform work for or on behalf of the Partnership or the payment of wages to Mrs Rosenbaum. Mr Rosenbaum described the nature of the work done by Mrs Rosenbaum as assisting him with the preparation of bills of quantities based on construction drawings. He gave evidence to the effect that he required her assistance because the work on project documentation was getting too much for him. [499] In other words, the effect of his engagement of Mrs Rosenbaum to do this work was that she would be paid to provide labour and skill that Mr Rosenbaum was to contribute to the Partnership in return for his share of the profits.
10. Mr Rosenbaum did not cause any records to be kept at the time of Mrs Rosenbaum's work, and did not adduce any evidence explaining how the wages paid in each of the 1994 to 1997 financial years corresponded with work said to have been done for the benefit of the Partnership. [500] Mrs Rosenbaum, who is said to have done the work, did not give evidence at all.
11. For the reasons explained at [512]-[521] above, I accept Mr Baidarman's submission that the wages paid were a benefit that Mrs Rosenbaum, a related party of Mr Rosenbaum, received from the Partnership without Mr Baidarman's consent and that Mr Rosenbaum is therefore required to account to the Partnership for that benefit: Partnership Act, s 29; Cappe v Tsung [2018] NSWCA 86 at [24]. There will therefore be an order in the terms of paragraph 13(a) of the Cross-Claim [501] that, on the taking of the Partnership account, Mr Rosenbaum be charged with withdrawals from the Partnership in the amount of $34,000 as at 30 June 1994, $21,000 as at 30 June 1995, $7,000 as at 30 June 1996 and $37,000 as at 30 June 1997.
12. As noted at [240] above Mr Baidarman also claims an order that Mr Rosenbaum be charged with compound interest on those sums in the taking of the Partnership account. Counsel for Mr Baidarman did not address any submissions to the claim for compound interest specifically in relation to Mrs Rosenbaum's wages. The Court was not referred to any evidence suggesting that Mr or Mrs Rosenbaum had received interest on or profited from the receipt of these wages (over and above the amounts of the wages themselves, for which Mr Rosenbaum must account). Nor was it submitted that Mr Rosenbaum should be presumed to have received such interest or profits: Harris v Digital Pulse Pty Ltd, supra, at [300]-[304]. Accordingly, there will be no order that Mr Rosenbaum be charged with compound interest on Mrs Rosenbaum's wages on the taking of the Partnership account and prayer 4C of the Cross-Claim will be dismissed to the extent it concerns compound interest.

Payment of "management fees" in 1999

1. The parties' contentions and claims are set out at [247]-[249] above.
2. Ironwell's financial statements for the year ended 30 June 2000, signed by Mr and Mrs Rosenbaum as directors of Ironwell on 31 March 2001, record in the comparative figures for financial year ended 30 June 1999 that Ironwell paid management fees in the sum of $27,957 during that year. [502]
3. It was submitted on behalf of Mr Rosenbaum that Ironwell did not make, and he did not receive, any payment of $27,957. Mr Rosenbaum relied on the evidence of Ironwell's bank statements for the 1999 year, which show that the credit balance of its account was less than $150 for the entire year. [503]
4. When Ironwell's IMB account was closed in September 1997, $145,836 was transferred from that account to a new account that Ironwell opened with the Commonwealth Bank. [504] By January 1999, the credit balance of that account had been reduced to $140, and the credit balance remained below $150 for the whole of the 1999 calendar year. [505]
5. However, Mr Rosenbaum's submission above overlooks the fact that the management fees recorded in Ironwell's financial statements are described as an expense paid during the 1999 financial year, not the calendar year. During the first half of the 1999 financial year (the second half of the 1998 calendar year), the credit balance of Ironwell's Commonwealth Bank account varied between $94,000 and $61. [506] There is no evidence of any other bank account or financial facility operated by Ironwell during that 1999 financial year. The Commonwealth Bank account statements record numerous debits and payments, and it is not possible to ascertain from reviewing the bank statements alone whether some of those payments relate to the total expense of $27,597 described as management fees in the financial statements.
6. For those reasons, Ironwell's bank statements do not support Mr Rosenbaum's submission that Ironwell did not in fact pay the $27,957 in management fees that its financial statements record as an expense incurred in the 1999 financial year.
7. It was submitted on behalf of Mr Baidarman that, if the payment was not made by transfer of funds from Ironwell to the recipient, then it was more probable than not that the fees had been "paid" by crediting the amount of $27,957 to the directors' loan account balances of Mr and/or Mrs Rosenbaum. [507] This submission assumes that the management fees were paid to Mr or Mrs Rosenbaum rather than to a third party. For the reasons explained below, the evidence does not support that inference. Moreover, there is no evidence of the Ironwell directors' loan account balances in the 1998 financial years and the loan account balances in the 1999 financial year sheds no light one way or another about whether management fees of $27,957 had been credited to these loan account balances.
8. There is no evidence that the management fees recorded in the financial statements were paid to Mr Rosenbaum or Mrs Rosenbaum. Mr Baidarman submitted that it was "inconceivable" that the fees were paid to any other person, that a Jones v Dunkel inference arose from Mr Rosenbaum's failure to give evidence identifying the recipient of the payment. It was submitted that the Jones v Dunkel inference strengthened the inference that Mr Rosenbaum or his privies received the management fees. [508]
9. I reject the submission that it is "inconceivable" that the management fees were paid to any party other than Mr or Mrs Rosenbaum. Ironwell conducted property development activities on behalf of the Partnership from time to time. It is not inconceivable that management fees were incurred and paid to third parties in relation to some of those properties developed by the Partnership and that such fees were recorded as expenses of Ironwell in circumstances where no financial statements were prepared for the Partnership. Nor is it inconceivable that management fees were incurred and paid to third parties in relation to the Sumner Street development that Mr Baidarman acknowledges was carried out by Ironwell on behalf of Mr Rosenbaum, [509] although this would depend on whether the Sumner Street property was still owned by Mr Rosenbaum or Ironwell in the 1999 financial year (as to which the evidence is silent).
10. There is no documentary or other evidence establishing that the $27,957 management fees were expenses paid to third parties. However, having regard to the passage of time and both parties' haphazard approach to record keeping, the lack of such evidence does not support the inference that the fees were paid to Mr or Mrs Rosenbaum. Any Jones v Dunkel inference cannot operate to prove, by itself, the positive contention made by Mr Baidarman that the management fees were paid to Mr or Mrs Rosenbaum. It is possible that those management fees were paid to them. But a finding to that effect would be nothing more than conjecture: Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd [2017] NSWCA 99 at [174] (Ward JA, McColl and Gleeson JJA agreeing) and the authorities there referred to.
11. Having reached that conclusion, it is not necessary to consider whether the funds or assets of Ironwell from which the management fees were paid were Partnership funds or assets.
12. For those reasons, there will be an order dismissing prayers 4B and 13(b) of the Cross-Claim.

Payment of dividends in 2000-2002

1. The parties' contentions and claims are set out at [250]-[253] above.
2. The financial statements for Ironwell for the 2000, 2001 and 2002 financial years record that: [510] 1. Ironwell had retained profits of $114,758 at the start of the 1999 financial year; 2. Ironwell produced an operating profit after income tax of $94,275 in the 1999 financial year and had retained profits of $209,483 at the start of the 2000 financial year; 3. Ironwell earned no income and produced an operating loss after tax of $1,294 in the 2000 financial year, reducing its retained profits available for distribution to $208,189 at the end of that year; 4. dividends of $80,000 were paid to Ironwell's shareholders (Mr and Mrs Rosenbaum) out of those retained profits, meaning that Ironwell commenced the 2001 financial year with retained profits of $128,189; 5. Ironwell earned no income and produced an operating loss after tax of $161 in the 2001 financial year, reducing its retained profits available for distribution at the end of that year to $128,028; 6. dividends of $70,000 were paid out of those retained profits, meaning that Ironwell ended the 2001 financial year and commenced the 2002 financial year with retained profits of $58,028; 7. Ironwell earned no income and incurred no expenses during the 2002 financial year and its retained profits available for distribution at the end of the year were therefore unchanged from 2001 at $58,028; and 8. dividends of $58,000 were paid out of those retained profits, meaning that Ironwell ended the 2002 financial year with retained profits of $28.
3. The evidence and both parties' submissions were directed to the question whether the dividends recorded in Ironwell's accounts for the 2000 to 2002 financial years were in fact paid to Mr and Mrs Rosenbaum, whether by increasing their loan account balances in Ironwell's accounts or through some other means. [511]
4. Neither party addressed the question whether Ironwell's retained earnings from which those dividends were deducted in its financial statements represented an asset of the Partnership. That is the starting point for any analysis of whether Mr and Mrs Rosenbaum are liable to repay the dividends or to account to the Partnership for the dividends.
5. It is plain from the 2000 to 2002 financial year statements referred to above, when read together with the 1997 financial statements that were also in evidence, [512] that all of the retained profits from which the relevant dividends were paid were generated prior to the commencement of the 2000 financial year, including during the 1996 and 1997 financial years. It is likely that at least some of the profits retained from the 1996 and 1997 years were derived from Partnership activities. That is because the Partnership was undertaking the Miranda project during this period, Ironwell was the landowner for that project on behalf of the Partnership [513] and Ironwell's income is recorded in its 1997 financial statement as approximately $1.8 million "income on completed contracts". There is no evidence that Ironwell was undertaking any development or property sales in its own right in the 1997 financial year that would produce revenue from completed sales contracts. Thus, whilst the Partnership's net income during the period up to February 1996 was ultimately applied to the acquisition of the Miranda project site, [514] the available evidence does reveal on the balance of probabilities that the profits earned by Ironwell in the period after February 1996 and retained as at 30 June 2000, 2001 and 2002 represented Partnership funds, or a mixture of Partnership and other funds.
6. Even assuming that those retained profits were exclusively Partnership funds, it seems to me that it is necessary to consider whether the dividends recorded in the 2000 to 2002 financial years constituted a benefit to Mr and Mrs Rosenbaum that was derived from the Partnership.
7. The 2000 to 2002 financial statements reveal that, with the exception of $41 cash at bank in 2000, Ironwell's only assets were receivables. This explains why the dividends were "paid" to Mr and Mrs Baidarman by increasing the balance owing to them in their loan accounts in Ironwell's financial statements, as counsel for Mr Baidarman established during cross-examination of Mr Rosenbaum. The majority of Ironwell's receivable assets were amounts owing to Ironwell by Dabjade and Mr and Mrs Baidarman. Those loans were made at least 18 years ago and there is no evidence that they have been repaid or are likely to be repaid in the future (assuming that the limitation period has not yet expired).
8. In those circumstances, I do not consider that Mr and Mrs Rosenbaum derived a benefit from the Partnership in any meaningful sense by reason of the dividends recorded in Ironwell's 2000, 2001 and 2002 financial statements. There will therefore be an order dismissing prayers 4A and 13(c) of the Cross-Claim.

2006 Reconciliation and payments in 2008 and 2009

1. I have set out the parties' competing contentions and claims at [255]-[258] above. Essentially, the dispute arises from the fact that the amounts that the partners provisionally agreed in the 2006 Reconciliation were payable by the Partnership to each partner, which each partner acknowledged receiving as a withdrawal from the Partnership in his schedule of contributions and withdrawals submitted to the referee, were in fact funded by a transfer of funds from Excelsea as trustee of the Omega Unit Trust to Mr Rosenbaum. This transfer was accounted for within the records of the Omega Unit Trust as a distribution to Ironwell Super which resulted in a reduction in the number of units held in by Ironwell Super in the Omega Unit Trust.
2. In order to determine the parties' claims in relation to the payments made in 2009 following the 2006 Reconciliation above, it is necessary to consider the evidence concerning: 1. the establishment of the IPD Trust, the terms of the trust and the trustee; 2. the establishment of the Omega Unit Trust, the terms of the trust and the trustee; 3. the nature of the activities and transactions of the two trusts and the relationship between them; 4. Omega Unit Trust distributions and unit holdings in the period prior to June 2009; 5. the payments made in December 2008 and March 2009 following the 2006 Reconciliation; and 6. Omega Unit Trust distributions and unit holdings in the period from June 2009.
3. The evidence concerning each of these matters is summarised immediately below.

Establishment of the IPD Trust, the terms of the trusts and the trustee

1. In mid-1997, at the same time as Mr Baidarman was making arrangements for the establishment of Baidarman Super, his accountant, Mr Patrick Lumbroso, advised Messrs Baidarman and Rosenbaum that the property development activities that had been carried out by the Partnership could be conducted in a more tax effective manner by a unit trust in which Baidarman Super and Ironwell Super invested. After receiving that advice, Mr Rosenbaum and Mr Baidarman caused the Omega Unit Trust and the IPD Trust to be established. [515]
2. The IPD Trust was established by deed dated 1 May 1997 between Mr Lumbroso (as settlor) and Innovative Property Developments Pty Limited, which was then known as Ko Mina Fun Memorial Fund Pty Ltd (IPD). [516] It is convenient to refer to this document as the IPD Trust Deed. Excelsea replaced IPD as the trustee of the IPD Trust in March 2006. [517]
3. Messrs Rosenbaum and Baidarman were the directors of IPD from 1 May 1997 until 13 July 2008, when IPD was deregistered. They are the directors of Excelsea. [518]
4. The IPD Trust is a discretionary trust, the beneficiaries of which are Ironwell and Dabjade, and the trustee of the Omega Unit Trust (being a trust the capital or income of which is held in whole or in part on trust for Ironwell and Dabjade), and any person determined by the trustee or the principal (Mr Baidarman) to be a beneficiary. [519]
5. The trustee is required to determine the income of the IPD Trust in each financial year and may determine to distribute that income or any part thereof to all or one of the beneficiaries in such proportions and in such manner as the trustee in its absolute discretion deems fit, or to accumulate the income or part thereof. Any such determination may be made in writing or by resolution duly passed at a meeting of the trustee or, in the case of a determination to distribute any amount to a beneficiary, by placing that amount to the credit of the beneficiary in the books of the trust, by drawing a cheque for that amount payable to or for the benefit of the beneficiary or by paying the amount in cash to or for the benefit of the beneficiary. [520]
6. The amount of any accumulation of income must be dealt with as an accretion to the trust fund, but the trustee may at any time resort to all such accumulations and distribute the whole or any part thereof as if they were income. [521]
7. The trustee has complete discretion in relation to any determination to distribute or accumulate income and is not bound to give reasons for any such determination. [522]
8. If the trustee has not exercised the discretion to distribute or accumulate income by the last day of a financial year, then the trustee holds the whole of the income not distributed or accumulated for that year in trust for the beneficiaries in equal shares. Such amounts do not form part of the trust fund but are held on separate trust for each beneficiary absolutely. [523]
9. Until the vesting day, the trustee has power to pay or apply such parts of the capital of the trust fund as the trustee may in its absolute discretion think fit to or for the benefit of one or more of the beneficiaries in such proportions as the trustee in its absolute discretion determines. This includes a power to pay part of the capital to one beneficiary to the exclusion of the others. [524]
10. Somewhat inconsistently with the specific provisions concerning determinations of the trustee in relation to the distribution or accumulation of income referred to at [551] above, clause 10 of the IPD Trust Deed relevantly provides that a trustee that is a corporation may exercise any discretion or power conferred on it by the IPD Trust Deed by a resolution of the corporation or by a resolution of its board of directors or by one or more members of its board of directors to whom the trustee company has delegated the right or power to exercise the relevant discretion or power. Clause 10 also provides that such a resolution shall be effective whether properly recorded in the minutes or not and that, once a determination has been made in a manner authorised by clause 10, the determination shall be irrevocable insofar as it is a decision to distribute income. [525]
11. The trustee is not bound to disclose to any person documents disclosing the deliberations of the trustee as to the manner in which a power or discretion conferred on the trustee by the deed should be exercised or the reasons for a particular exercise or failure or refusal to exercise such a power or discretion (or the material upon which such reasons were or might have been based), or otherwise relating to the exercise or proposed exercise of powers or discretions conferred on the trustee (with the exception of legal advice obtained by the trustee at the expense of the trust fund). [526]
12. The trustee is required to keep complete and accurate records of all receipts and expenditures on account of the Trust Fund, and to prepare a written accounting report in accordance with accounting practices and standards consisting of a statement of income and expenditure and a list of assets and liabilities at the close of each financial year. [527]

Establishment of the Omega Unit Trust, the terms of the trust and the trustee

1. The Omega Unit Trust was established in the circumstances described at [547] above by deed dated 2 May 1997 between IPD (then known as Ko Mina Fun Memorial Fund Pty Limited), as trustee, and Ironwell, as the initial unitholder. [528] It is convenient to refer to this as the Omega Trust Deed.
2. As referred to at [7] above, it is common ground that Excelsea replaced IPD as the trustee of the Omega Unit Trust in March 2006. The mechanism by which this occurred is not clear, as the Omega Trust Deed contains no provisions governing the retirement or removal and appointment of trustees. However, the proceedings have been conducted by all parties on the basis that Excelsea was validly appointed as trustee of the Omega Unit Trust in March 2006 and I proceed on the assumption that this common position is correct.
3. As I have already mentioned, Messrs Rosenbaum and Baidarman have been the directors of IPD and Excelsea at all relevant times.
4. By clause 2.1 of the Omega Trust Deed, the trustee declares that it will stand possessed of the "Trust Fund" and the income thereof upon trust for the unitholders upon the trusts and subject to the powers and provisions concerning those trusts in the Omega Trust Deed. [529] The "Trust Fund" is defined as including the initial sum of $100 paid by Ironwell as the initial unitholder for the issue of 100 ordinary units at a price $1.00 each, amounts contributed, credited or paid for any additional units issued pursuant to the Omega Trust Deed, any further property donated, assigned, transferred or vested in the trustee to be held on the trusts in the Omega Trust Deed, the proceeds of sale or other dealing with the initial sum or subsequent property and any accumulation of income directed or empowered to be made under the Omega Trust Deed. [530]
5. The beneficial interest in the Trust Fund as originally constituted and as existing from time to time is vested in the unitholders, and each unit entitles the unitholder, together with the holders of all other units, to the beneficial interest in the Trust Fund as an entirety. [531]
6. Clause 2.3 of the Omega Trust Deed confers on the trustee the power to issue additional units from time to time with the consent in writing of the unitholders. Consent is deemed to have been given on production of a written consent executed by all unitholders or a minute signed by the chairman of a duly convened meeting of unitholders at which a resolution was passed in favour of the consent being given. Sub-clauses (a) to (d) of clause 2.3 set out a series of provisions that apply to any issue of new units unless unitholders waive the operation of those sub-clauses in any particular case. Those provisions include that new units to be issued must first be offered to existing unitholders in proportion to their existing holdings, or their existing holdings of the class of units to be issued as the case may be. [532]
7. The trustee is required to keep a register of unitholders. Certificates of units in the form of the second schedule to the Omega Trust Deed specifying the name and address of the unitholder and the number of units to which the certificate relates, bearing a distinctive number or letter and signed by the trustee or a director of the trustee are prima facie evidence that the person named in the certified is entitled to the number and class of units specified in the certificate. [533]
8. Each person who becomes registered as a unitholder is deemed to have agreed to become a party to the Omega Trust Deed. [534]
9. The trustee may redeem any or all units of a unitholder if requested by the unitholder in writing to do so or on the trustee's own initiative. The price to be paid for units redeemed in either scenario is to be determined on based of the value of the Trust Fund and the number of units into which the Trust Fund is divided, taking into account any special rights, restrictions or conditions relating to the entitlement of the units to share in the income or capital of the Trust Fund or otherwise affecting the value of the units to be redeemed. [535]
10. The trustee must determine the income of the Trust Fund in each financial year and, if directed by the unitholders, may determine to distribute all or any of the income to unitholders or a class of unitholders (subject to any special rights or restrictions attaching to the units), or to accumulate the income. Any determination to distribute shall be for distribution to unitholders in proportion to the number of units for which they are registered at the time, or in such other proportions as the unitholders unanimously agree. The trustee has a complete discretion in determining whether to distribute or accumulate and is not bound to give any reason for the determination. The determination may be made in writing or by resolution duly passed at a meeting of the trustee or, in the case of a determination to distribute an amount to a unitholder, by placing that amount to the credit of the unitholder in the books of the trust, by drawing a cheque for that amount payable to or for the benefit of the unitholder or by paying the amount in cash to or for the benefit of the unitholder. [536]
11. The amount of any accumulation of income must be dealt with as an accretion to the Trust Fund, but the trustee may at any time resort to all such accumulations and distribute the whole or any part thereof as if they were income. [537]
12. If the trustee has not exercised the discretion to distribute or accumulate income by the last day of a financial year, then the trustee holds the whole of the income not distributed or accumulated for that year in trust for the unitholders in proportion to the number of units for which they are registered at that time, subject to any special rights or restrictions in relation to units of any class. Such amounts do not form part of the trust fund but are held on separate trust for each unitholder absolutely. [538]
13. Somewhat inconsistently with the specific provisions concerning determinations of the trustee in relation to the distribution or accumulation of income referred to at [568] above, clause 6.3 of the Omega Trust Deed relevantly provides that a trustee may exercise any discretion or power conferred on it by the deed: [539] 1. in the case of a trustee that is a corporation, by a resolution of the corporation or by a resolution of its board of directors or by one or more members of its board of directors to whom the trustee company has delegated the right or power to exercise the relevant discretion or power; and 2. a trustee that is the sole corporate trustee of the trust, by resolution of the corporation or its board of directors or governing body, whether or not the resolution is properly recorded in the minutes.
14. Clause 6.3 also provides that, once a determination has been made by the trustee in a manner authorised by the clause, the determination shall be irrevocable insofar as it relates to distribution of income.
15. The trustee is required to keep complete and accurate records of all receipts and expenditures on account of the Trust Fund, and to prepare a written accounting report in accordance with accounting practices and standards consisting of a statement of income and expenditure and a list of assets and liabilities at the close of each financial year. The trustee must appoint an auditor to examine and ascertain the correctness of the accounts of the Trust Fund if directed to do so by the unitholders. The trustee may appoint an auditor even if not directed by the unitholders to do so. [540]
16. As I have already referred to above, the trustee of the Omega Unit Trust was one of the beneficiaries of the IPD Trust, which was a discretionary trust. The other beneficiaries of the IPD Trust were Ironwell and Dabjade.

The nature of the activities and transactions of the two trusts and the relationship between them

1. Mr Waldemar Wawrzyniuk is a certified practising accountant and registered tax agent who was engaged by Mr Rosenbaum and Mr Baidarman from 2006 to act as the accountant and tax agent for Mr and Mrs Baidarman, Dabjade, Baidarman Super, Mr and Mrs Rosenbaum, Ironwell, Ironwell Super, Excelsea, the IPD Trust and the Omega Unit Trust. [541]
2. The Omega Unit Trust and the IPD Trust had been established before Mr Wawrzyniuk began doing accounting work for the abovementioned entities. He did not do any accounting work for the Partnership, and in fact regarded the Partnership as "fictional" or "imaginary". [542] I attributable this view to the complete absence of records concerning the Partnership and the fact that property development activities were being conducted through the trusts rather the Partnership for several years before Mr Wawrzyniuk commenced as the accountant and tax agent for Mr Rosenbaum, Mr Baidarman and their associated entities.
3. Mr Wawrzyniuk gave the following evidence concerning the interrelationship between the abovementioned entities. [543]
4. After its establishment in May 1997, the trustee of Omega Unit Trust was the holder and legal owner of the properties that were developed, and the trustee of the IPD Trust carried out the development activities on those properties. The two trusts had the same trustee. As I have referred to at [8]-[9] above, the projects undertaken by the trusts were the Hotham Road project, the Military Road project and the Old South Head Road project.
5. As the developer, the trustee of the IPD Trust paid the costs of developing these properties, funded by loans secured by mortgages over the properties held by the trustee of the Omega Unit Trust and, on some occasions, other security. There were also various loans between the companies, trusts and persons for whom Mr Wawrzyniuk acted as accountant and tax agent.
6. Mr Wawrzyniuk evidence about this interrelationship between the two trusts and the role of each trust in the property development projects is broadly consistent with the evidence of Mr Rosenbaum, who deposes to having been advised prior to the establishment of the trusts in 1997 that the trust in which the superannuation funds were the beneficiaries would be able to acquire properties, but would not be able to borrow money to fund development activities. [544] It is also broadly consistent with Mr Baidarman's evidence that he and Mr Rosenbaum used two trusts, one to hold the land and another trust to carry on operations. [545] However, it is inconsistent with the financial statements that Mr Wawrzyniuk prepared for the financial year ending 30 June 2010, which appears to show that the Old South Head Road property was an asset of the IPD Trust rather than the Omega Unit Trust. As referred to in more detail below, the net proceeds of sale of the Old South Head Road property were paid to Excelsea as trustee of the IPD Trust (not as trustee of the Omega Unit Trust). Irrespective of whether the pattern of dealings described by Mr Wawrzyniuk was adopted for the Hotham Road project and the Military Road project, it does not appear to have been adopted for the Old South Head Road project. [546]
7. Mr Wawrzyniuk deposed that any profits of the Omega Unit Trust were distributed to Dabjade as trustee of Baidarman Super and Ironwell as trustee of Ironwell Super. Tax on those distributions were paid by those superannuation funds.
8. The following records were exhibited to Mr Wawrzyniuk's affidavit: 1. financial statements for the Omega Unit Trust for the period from the financial year ended 30 June 1999 to the financial year ended 30 June 2010, together with income tax returns for some of the years in that period; [547] 2. financial statements and income tax returns for the IPD Unit Trust for the financial years ended 30 June 2003 and 30 June 2004, [548] and 30 June 2010; [549] 3. various financial statements, audit reports, distribution notices and tax returns for Ironwell Super for the period from the financial year ended 30 June 1995 to 30 June 2009; [550] and 4. various financial statements, audit reports, member's statements, meeting minutes and tax returns for Baidarman Super for the period from the financial year ended 30 June 2003 to 30 June 2018. [551]
9. The parties also adduced documentary evidence such as Omega Unit Trust registry records, applications for units, unit certificates, meeting minutes and distribution statements. [552] This material is referred to below to the extent that it was addressed by the parties in cross-examination or submissions.

Omega Unit Trust distributions and unit holdings in the period prior to June 2009

1. Ironwell (as trustee for Ironwell Super) and Dabjade (as trustee for Baidarman Super) have been the only unit holders in the Omega Unit Trust since the establishment of the trust in May 1997.
2. Ironwell and Dabjade held an equal number of units in the Omega Unit Trust prior to June 2009. As at 30 June 2001, they each held 904,833 units, and that remained the position until June 2009. [553] Mr Rosenbaum drew a pension from Ironwell Super from 2005. By 2009, he had drawn approximately $400,000 in total ($50,000 in each of the 2005 and 2006 financial years, and $100,000 in each of the 2007, 2008 and 2009 financial years). The only assets of Ironwell Super from which those drawings could be paid were its units in the Omega Unit Trust. Mr Rosenbaum paid his pension out of funds that he withdrew from bank accounts held by Excelsea as trustee of the Omega Unit Trust. [554]
3. In June 2009, each of Ironwell Super and Baidarman Super was issued with a sufficient number of additional units in the Omega Unit Trust to reduce the balance of their respective beneficiary loan accounts.
4. The balance of Ironwell Super's loan account as at June 2009 its share of the profits of the Omega Unit Trust that had been credited to its beneficiary loan account over the years, other contributions made by Ironwell Super to the Omega Unit Trust that had been credited to its beneficiary loan account, distributions from the Omega Unit Trust paid to Ironwell Super (to fund Mr Rosenbaum's pensions and for other purposes), and the payments made in December 2008 and January 2009 to which I refer below. [555]
5. The balance of Baidarman Super's beneficiary loan account in the Omega Unit Trust had fluctuated over the years for the same reasons, with the exception that the Omega Unit Trust had not made distributions to Baidarman Super to fund pension payments to Mr Baidarman. [556]
6. Thus, by May 2009, Ironwell Super and Baidarman Super held an equal number of units in the Omega Unit Trust but the balances of their respective beneficiary loan accounts were unequal. [557]

Payments made in December 2008 and March 2009 following the 2006 Reconciliation

1. As I have referred to at [24]-[25] above, Mr Baidarman and Mr Rosenbaum calculated during the 2006 Reconciliation that Mr Baidarman was "owed" $493,792 and Mr Rosenbaum was "owed" $110,100 by the Partnership.
2. There is no evidence to suggest that the Partnership had any assets or funds as at December 2008. As I understand the evidence, surplus funds generated by the Partnership's property development projects prior to May 1997 had been either distributed to or withdrawn by the partners or rolled over into the Omega Unit Trust in exchange for the issue of units in that trust to their respective superannuation funds. [558]
3. As at December 2008, Excelsea in its capacity as trustee of the Omega Unit Trust held a term deposit account with St George Bank. Mr Rosenbaum had the ability to conduct transactions on that account. On 29 December 2008, Mr Rosenbaum withdrew $120,000 from that account and deposited that sum in his own account before transferring it to Mr Baidarman on 5 January 2009. [559]
4. On 2 March 2009, Mr Rosenbaum withdrew a further sum of $483,892 from the Omega Unit Trust's term deposit account with St George and deposited that sum into his own account. He then transferred $373,792 of that sum to Mr Baidarman on 5 March 2009, retaining the remaining $110,100 for himself. [560]
5. These are the transactions by which each of Mr Baidarman and Mr Rosenbaum received the amounts that they calculated to be "owed" to them by the Partnership in the 2006 Reconciliation.

Omega Unit Trust distributions and unit holdings in the period from June 2009

1. Mr Wawrzyniuk had no involvement in the 2006 Reconciliation and could not recall having any specific conversations with Mr Rosenbaum about the transactions in December 2008 and early 2009. He thought that he would have been made aware of the transactions at the time he was preparing the accounts for the Omega Unit Trust for the year ended 30 June 2009, which is likely to have occurred about six months after the financial year end and therefore about a year after these transactions. [561] Mr Rosenbaum gave evidence that he did consult with Mr Wawrzyniuk before making these transactions, and that Mr Wawrzyniuk did not tell him that it would involve reduction in the number of units held by Ironwell Super in the Omega Unit Trust. [562] It is not necessary to determine whether or not Mr Wawrzyniuk was consulted in advance of the transactions being made.
2. Irrespective of when he became aware of the transactions, Mr Wawrzyniuk main concern was to account for the money that "was basically indirectly taken out of the superannuation funds". The only way of accessing money tied up in the Omega Unit Trust at that time was for Mr Rosenbaum to cash in units held by Ironwell Super and to draw on the funds that would then flow to Ironwell Super. [563] That was because Mr Baidarman had not yet reached the age of 60, so Dabjade could not pay to him as a beneficiary of Baidarman Super any funds paid by Excelsea as trustee of the Omega Unit Trust to Dabjade as unit holder (whether by way of distribution of income of the trust or payment for units redeemed). Mr Rosenbaum had reached the age of 60 and was therefore entitled, as a beneficiary of Ironwell Super, to draw on any funds paid by Excelsea to Ironwell Super. [564]
3. Mr Wawrzyniuk therefore accounted for the December 2008 and January 2009 transactions as a redemption by Ironwell of units in the Omega Unit Trust. He did not consider that the manner in which the amounts withdrawn from the St George term deposit account had been paid as between Mr Rosenbaum and Mr Baidarman had any bearing on his treatment of the transaction in the accounts of the Omega Unit Trust. [565]
4. A document entitled "Resolution of Trustees - Ironwell Employees Pty Ltd Super Fund - 2009 Financial Year" records a resolution to continue paying pensions to Mr and Mrs Rosenbaum and also states: [566] "The Trustees confirmed payments of lump sums of $221,000 to be paid to E Rosenbaum and lump sum of $483,892 paid to A Rosenbaum."
5. Mr and Mrs Rosenbaum signed that document in their capacity as directors of Ironwell on 24 April 2010. [567]
6. Mr Wawrzyniuk gave evidence that the document records "the way we extracted the money from the superannuation fund". [568] I note that the $483,892 lump sum recorded as having been paid to Mrs Rosenbaum corresponds precisely with the amount of the withdrawal from the Omega Unit Trust account on 2 March 2009 and the $221,000 lump sum recorded as having been paid to Mr Rosenbaum appears to correspond with the $120,000 withdrawal from the Omega Unit Trust account on 28 December 2008 plus a pension of approximately $100,000 for Mr Rosenbaum in the 2009 financial year as referred to at [585] above.
7. In June 2009, Mr Wawrzyniuk documented the issue of an unequal number of new units to each of Ironwell Super and Baidarman Super so as to convert the entitlements to undistributed profits in their respective beneficiary loan accounts to units, noting that the balance of those loan accounts was unequal for the reasons that I have explained above, and to account for the December 2008 and January 2009 transactions. [569] Mr Wawrzyniuk deposed that his records showed that the unit holdings in the Omega Unit Trust as at 30 June 2009 were as follows: [570] 1. Baidarman Super Fund - 1,437,246 units; and 2. Ironwell Super - 678,740 units.
8. There is a discrepancy between this evidence of Mr Wawrzyniuk and the register of unit holders exhibited to his affidavit, in which the entries for Ironwell Super amounted to a total of 578,740 units held, although the date of the last entry in that document is either illegible or not recorded. [571] Both the unit register and the figures in Mr Wawrzyniuk affidavit are inconsistent with a spreadsheet provided by Mr Wawrzyniuk to Mr Rosenbaum in 2010. [572] Mr Wawrzyniuk maintained that the unit register is likely to be incorrect, whereas his other records that are the source of the figure of 678,740 units are correct. He gave evidence that the spreadsheet omitted a $100,000 withdrawal made by Mr Rosenbaum on 30 June 2008 and therefore overstated the units held by Ironwell Super as at 30 June 2009 by 100 units. [573]
9. Mr Wawrzyniuk evidence that Ironwell Super held 678,740 units in the Omega Unit Trust as at 30 June 2009 is consistent with the financial statements for the Omega Unit Trust and Ironwell Super and other records that counsel for Mr Baidarman referred to in detail in closing submissions. [574] Counsel for Mr Rosenbaum did not take any issue with the analysis of those financial records that was presented by counsel for Mr Baidarman. [575]
10. Those records reveal that, as at 30 June 2008, the balance of Ironwell Super's beneficiary loan account was $477,799 and the balance of Baidarman Super's beneficiary loan account was $532,413. [576]
11. On 23 June 2009, 532,413 units in the Omega Unit Trust were issued to Baidarman Super to convert the credit balance of its loan account into units. This reduced its loan account to nil, before it was credited with its share of the Omega Unit Trust profits for the 2009 year. [577] The issue of the 532,413 units increased Baidarman Super's unitholding from 904,833 units to 1,437,246 units.
12. On 23 June 2009, 377,799 units in the Omega Unit Trust were issued to Ironwell Super to reduce the balance of its loan account to $100,000, leaving in the loan account an amount to be distributed to Ironwell Super to fund Mr Rosenbaum's pension for the 2009 financial year. At the same time, Ironwell Super's unit holdings were reduced by 603,892 to account for the distributions to Ironwell Super totalling $603,892 that had funded the December 2008 and January 2009 payments. The net change in Ironwell Super's unit holdings was a reduction of 226,093 units from 904,833 units to 678,740 units. [578]
13. Although counsel for Mr Rosenbaum took no issue with this analysis of the financial records, she emphasised that they are inconsistent with the Register of Unit Holders, the last entry in which records a reduction of Ironwell Super's unit holdings by 703,892 units. She did not submit that the spreadsheet or unit register should be considered to be more accurate than the financial records I have referred to at [603]-[606] above. Counsel for Mr Rosenbaum simply submitted that the inconsistency within the records meant that the unit holdings of 1,437,246 units (Baidarman Super) and 678,740 units (Ironwell Super) should not be accepted as accurate. I reject that submission, having regard to the detailed and undisputed analysis of the financial records presented by counsel for Mr Baidarman. The likelihood is that the handwritten note of "- 703792" in the unit register is a transposition error.
14. Mr Wawrzyniuk did not undertake a valuation of the assets of the Omega Unit Trust in order to calculate the number of units to be redeemed by Ironwell to give effect to the December 2008 and January 2009 transactions. He proceeded on the basis that one unit was worth one dollar because he said that: "They were always one - one for one. … they were always at par value…". [579] I note that the redemption on a "one for one" basis occurred at the same time as the issue of units to both unit holders on a "one for one" basis according to the credit balances of their respective beneficiary loan accounts. Counsel's submissions dealt with the value of the assets of the Omega Unit Trust only very briefly. [580] Those submissions were devoid of any detailed analysis of the evidence concerning the assets at the relevant time (June 2009) and infected by confusion as to the division of assets between the Omega Unit Trust and the IPD Trust at that time. Ultimately, I was not referred to any evidence that would support a finding that units in the Omega Unit Trust had a value other than one dollar as at June 2009.
15. Counsel for Mr Rosenbaum also cross-examined Mr Wawrzyniuk at length about whether he had told Mr Rosenbaum that Ironwell's unit holdings in the Omega Unit Trust would have to be reduced in order to account for Mr Rosenbaum's pension withdrawals. Mr Wawrzyniuk response to this line of questioning was that the obvious consequence of Mr Rosenbaum drawing a pension from Ironwell Super was that the assets of Ironwell Super (that is, its units in the Omega Unit Trust) would be reduced because the money "cannot just appear from thin air". [581] At times, Mr Rosenbaum's own evidence suggested that he was in fact told that his unit holdings would be reduced, although he said that he was not told and did not know that this would be "irreversible". [582] The reasons why he might have thought such transactions may be "reversible" were not apparent. Counsel for Mr Rosenbaum did not proffer any alternative approach to accounting for the withdrawals.
16. Counsel for Mr Rosenbaum put to Mr Wawrzyniuk, and he denied, that he had accounted for Mr Rosenbaum's pension withdrawals from Ironwell Super twice by debiting the amount of the pension to Ironwell Super's loan account in the financial statements of the Omega Unit Trust and also reducing the number of units held by Ironwell Super in the trust. [583] The proposition put by counsel was misconceived. As I have explained above, Ironwell Super's unit holdings were not reduced in order to reflect the value of the sums distributed by the Omega Unit Trust to Ironwell Super to fund Mr Rosenbaum's pensions. Rather, the debiting of those distributions to Ironwell Super's beneficiary loan account reduced the balance of the loan account that was subsequently converted into units.
17. Mr Rosenbaum denies that the unit holdings were as set out at [601] above. That denial is based on his contention that there should have been no adjustment to the unit holdings in the Omega Unit Trust at all, and that the unit holdings should have remained equal between Ironwell Super and Baidarman Super at all times. [584] Mr Rosenbaum maintained that contention, notwithstanding that he had adopted the financial statements for Ironwell Super for the year ended 30 June 2009 which showed a reduction in the number of units it held in the Omega Unit Trust from 904,832 for the year ended 30 June 2008 to 678,740 in the year ended 30 June 2009 [585] and he had signed the documents in June 2009 for the allotment of units to Baidarman Super and to Ironwell Super which resulted in the two super funds having an unequal allotment of units in the trust. [586]

Determination of the parties' contentions about the 2008 and 2009 payments

1. Having considered all of the evidence and submissions summarised at [544]-[611] above, I am satisfied that the unit holdings of Ironwell Super in the Omega Unit Trust were reduced by 603,792 units in June 2009 to account for the funds that Mr Rosenbaum had withdrawn in December 2008 and January 2009 and paid to himself and Mr Baidarman in the amounts of $110,100 and $493,792 (respectively) to give effect to the Partners provisional calculations in the 2006 Reconciliation of the amounts "owed" to them by the Partnership. The contemporaneous primary records of the Omega Unit Trust and Ironwell Super record this transaction, and the erroneous handwritten reference to a reduction of 703,792 in the Unit register does not cast any material doubt on the accuracy of the other primary records, which are consistent with one another.
2. I accept Mr Wawrzyniuk evidence that this reduction in units held by Ironwell Super was the only way to account for the $603,792 withdrawals. I note that it was not put to him by counsel for Mr Rosenbaum that there was some other way in which the withdrawal could have been accounted for within the Omega Unit Trust.
3. Mr Baidarman has correctly (albeit belatedly) conceded that, on the taking of the Partnership account, Mr Rosenbaum must be credited with having contributed the whole of the $603,792 that was payable by the Partnership. Accordingly, there will be an order that Mr Rosenbaum be credited with having contributed to the Partnership the sum of $120,000 on 5 January 2009 and the sum of $483,892 on 5 March 2009. [587]

September 2010 payment

1. As at September 2010, Excelsea in its capacity as trustee of the Omega Unit Trust held $1,720,674 in a Commonwealth Bank account. [588] It is convenient to refer to this as the Omega account.
2. On 28 September 2010, the amount of $1,720,674 was withdrawn from the Omega account and paid to Ironwell Super (as to $660,383) and to Baidarman Super (as to the remaining $1,060,291). [589] Mr Wawrzyniuk was not aware of this withdrawal at the time. [590]
3. Mr Rosenbaum contends that the distribution of these amounts was agreed between himself and Mr Baidarman at a meeting that they attended with Mr Wawrzyniuk in September 2010, and that the amounts were a "reconciliation of the money held in the two superannuation accounts" to account for the fact that Mr Rosenbaum had drawn $400,000 in pensions of the period from 2005 to 2009. Mr Rosenbaum says that he calculated the amount to be paid to each of Ironwell Super and Baidarman Super during the meeting, and that Mr Wawrzyniuk prepared his own calculations during the meeting that agreed with Mr Rosenbaum's calculations. Mr Rosenbaum contends he will have accounted to Mr Baidarman twice for these pension withdrawals if the reductions referred to above in the number of units held by Ironwell Super in the Omega Unit Trust are permitted to stand. [591]
4. Mr Baidarman accepts that the split of the $1,720,674 was calculated by Mr Rosenbaum to take into account the $400,000 he had already withdrawn from the funds of the Omega Unit Trust, but denies that he and Mr Rosenbaum agreed on the split as a final distribution of the $1,720,674. Mr Baidarman's evidence is that he and Mr Rosenbaum met together with Mr Wawrzyniuk and discussed how to distribute Omega Unit Trust funds, but they could not agree at that meeting on the amounts to be distributed to each superannuation fund. According to Mr Baidarman, they therefore "agreed on figures to take on account and to work out the correct figures later". In cross-examination, he referred to this as an interim distribution. They were not able to agree on those figures subsequently. [592]
5. Mr Rosenbaum disagrees that the payments were made on an interim basis. [593]
6. Mr Wawrzyniuk did not dispute that a meeting took place, but could not recall what occurred at the meeting and did not recall Mr Rosenbaum and Mr Baidarman having reached any agreement about the distribution of the funds in the Omega account between Ironwell Super and Baidarman Super. Mr Wawrzyniuk was adamant that the funds in the Omega account could only have been distributed between them in the same proportions as their respective unit holdings in the Omega Unit Trust. [594]
7. The unit holdings of Ironwell Super and Baidarman Super referred to at [601] above represent 32.08% and 67.92% (respectively) of the total units in the Omega Unit Trust as at 30 June 2009. The payment of the $1,720,674 in September 2010 was 38.38% to Ironwell Super and 61.62% to Baidarman Super.
8. There is no evidence of any resolution of Excelsea as trustee of the Omega Unit Trust concerning the distribution of the $1,720,674. This corroborates Mr Baidarman's evidence that he and Mr Rosenbaum did not make a final decision concerning the distribution of those funds. I am not called on to make any determination as to the conduct of Mr Rosenbaum and Mr Baidarman as directors of Excelsea in permitting the funds to be paid to their respective superannuation funds in circumstances where Excelsea, in its capacity as trustee of the Omega Unit Trust, had not made a determination concerning the distribution of those funds.
9. The payment of the $1,720,674 has not been addressed in any financial statements for the Omega Unit Trust, as no financial statements or tax returns have been prepared after the financial year ending 30 June 2010 due to the falling out and ongoing dispute between Mr Rosenbaum and Mr Baidarman. [595]
10. I reject Mr Rosenbaum's evidence that the division of the $1,720,674 between unit holders was agreed as a final distribution, and I accept Mr Baidarman's evidence that it was an interim distribution only. Mr Rosenbaum's account that Mr Wawrzyniuk agreed with his calculations is inherently implausible. Mr Wawrzyniuk was well aware of the unit holdings in the Omega Trust and his evidence that the money could only have been distributed between unit holders in the same proportions as their unit holdings is consistent with the provisions of the trust deed. It is inherently unlikely that Mr Wawrzyniuk would have endorsed Mr Rosenbaum's calculations of distribution amounts to "balance" or "reconcile" the superannuation fund assets without reference to the number of units held by the superannuation funds in the Omega Unit Trust. Given the poor state of relations between Mr Rosenbaum and Mr Baidarman by 2010, it is inherently unlikely that Mr Baidarman would have accepted Mr Rosenbaum's approach and calculations without it being endorsed by Mr Wawrzyniuk.
11. For those reasons, I find that there was no agreement or resolution of Mr Rosenbaum and Mr Baidarman as directors of Excelsea to distribute the sum of $1,720,674 in the Omega Unit Trust to unit holders in the amounts that were paid to Ironwell Super and Baidarman Super on 28 September 2010. However, I do not consider that it is appropriate to make a declaration in those terms because it would be a declaration as to an intermediate conclusion leading to the ultimate determination of the parties' claims for relief concerning the Omega Unit Trust. [596] Accordingly, there will be an order dismissing prayer 10F of the Cross-Claim.
12. The parties' other claims for relief concerning the Omega Unit Trust and the IPD Trust are addressed in Section E below.

October 2010 payment in respect of private matters

1. Neither Mr Rosenbaum's evidence nor his submissions identified any reason why his payment of $13,329 to Mr Baidarman in October 2010 was related to the Partnership and should be included in some way in the taking of the Partnership account. [597]
2. Accordingly, there will be an order dismissing prayer 5A(i) of the Further Amended Statement of Claim to the extent that it relates to item 13 of schedule MFI-3 to the referee's report.

Partnership office

1. Mr Rosenbaum has failed to discharge his onus of proof in respect of the amount of $18,414 claimed for a proportion of utility and cleaning charges for 1/40A Wonga Road, being the proportion that he attributes to that part of those premises that he asserts was used solely as a Partnership office.
2. This aspect of Mr Rosenbaum's claim fails because he has not proved the amount of the charges that he asserts related to the Partnership office. Mr Rosenbaum has made a submission about the amount that is likely to have been incurred, based on his evidence of the amount of council rates, other utilities, insurance costs and cleaning charges paid for the 1998/1999 year and his extrapolation of that amount for the succeeding eleven years based on his assertion (without evidence) of the consumer price index rises in each of those years and his implicit assumption (unsupported by evidence) that each of those categories of costs would have increased in accordance with CPI movements over the whole eleven year period. [598]
3. It is therefore not necessary to address the parties' competing evidence concerning whether or to what extent the premises were in fact used as a Partnership office, although Mr Baidarman's submission casting doubt on this proposition given that no proper records were kept or accounts prepared for the Partnership has considerable force. Nor is it necessary to address whether any use of the office for Partnership purposes was for the benefit of the Partnership or for Mr Rosenbaum's personal convenience.
4. For those reasons, there will be an order dismissing prayer 5A(f) of the Further Amended Statement of Claim, substantially in the terms of paragraph 2(e) of the defendant's proposed partnership accounting orders. [599]
5. As referred to at [276], the Rosenbaum parties' claim for rent in respect of the use of part of 1/40A Wonga Road as an office is not pressed. The orders will include a notation to this effect in terms of paragraph 1(b) of the defendant's proposed partnership accounting orders. [600]

Partnership utes

1. I have referred to the parties' competing contentions and claims at [277]-[281] above.
2. In relation to the $5,000 paid by Mr Rosenbaum towards the ute purchased in 1992, there is no documentary evidence supporting Mr Rosenbaum's recollection that he paid that amount to Mr Baidarman personally as opposed to contributing it to the Partnership. Mr Baidarman does not dispute that Mr Rosenbaum paid the $5,000 as a contribution to the Partnership.
3. Mr Rosenbaum's evidence that the $5,000 was paid to Mr Baidarman personally, rather than contributing the money to the Partnership, is not persuasive given the significant passage of time since 1992. In cross-examination, Mr Rosenbaum was unable to remember similar details concerning transactions in 2004 and there is no reason why his memory of events in 1992 should be considered as being reliable. In cross-examination, he claimed to be able to recall the details concerning the $5,000 because "it's my memory working in a very peculiar way; it just very selective. … paying cash for the ute, very much in my mind, because that question was annoyed me many many times during these proceedings." [601] The fact that a witness has given a lot of thought to an event or transaction during the course of proceedings decades after the event does not render their memory of it reliable: see [293]-[295] above.
4. Mr Rosenbaum has failed to discharge his onus of proof in relation to the $5,000 and there will therefore be an order to the effect contended for by Baidarman that, on the taking of the Partnership account, the claims by Mr Rosenbaum in respect of the 1992 payments totalling $5,000 be allowed as contributions by Mr Rosenbaum to the Partnership. [602]
5. In relation to the Partnership ute that has been retained by Mr Baidarman since April 2011, Mr Rosenbaum has not adduced any evidence at all concerning the value of that ute as at April 2011 (or at any time after its purchase in 2003). Mr Rosenbaum has therefore failed to discharge his onus of proving that Mr Baidarman should be surcharged with the $12,500 for which Mr Rosenbaum contends, or indeed any particular amount, on the taking of the Partnership account. There will be an order dismissing prayer 5A(g) of the Further Amended Statement of Claim.

Old South Head Road development

1. As I have mentioned at [282] above, no specific relief has been sought in relation to the net sale proceeds of the Old South Head Road property. The inability of Mr Rosenbaum and Mr Baidarman, as directors of Excelsea, to resolve how these funds should be dealt with consistently with the IPD Trust deed is one matter that is relevant to the determination of the parties' claims for relief in relation to the IPD Trust. Those claims for relief are addressed in Section E below.

Mr Rosenbaum's claimed contribution of $177

1. Mr Rosenbaum has failed to prove his claimed contribution of $177 for petrol for the Partnership ute on 30 June 1994. [603] The 2006 Reconciliation document is the only evidence relied in support of this claim, apart from Mr Rosenbaum's contention that he made the contribution. [604] That document is not evidence of the truth of any statement contained in it concerning the $177 claimed contribution. Whilst the document is evidence of the recollection of the partner who made the statement in it in 2006 concerning petrol purchases in 1994, I do not consider that a claimed recollection of such a trivial transaction some 12 years after the event is sufficiently reliable to discharge Mr Rosenbaum's onus of proof. [605] Accordingly, there will be an order dismissing prayer 5A(h) of the Statement of Claim to the extent that it relates to item 96 of schedule MFI-1 to the referee's report.

Mr Rosenbaum's claimed "direct transactions"

1. Mr Rosenbaum's claims to have made payment to, or for the benefit of, Mr Baidarman in the sum of $10,157 in 1989 and in the sum of $1,863 in 1991 [606] are also unsupported by evidence other than the 2006 Reconciliation document [607] and those claims fail for essentially the same reasons. There will therefore be an order dismissing prayer 5A(i) of the Statement of Claim to the extent that it relates to items 1 and 2 in schedule MFI-3 to the referee's report.
2. Mr Rosenbaum has discharged his onus of proof in relation to his claim to have paid $956 on 16 February 1994 for legal fees in relation to a dispute with the real estate agent who sold villa 1 in Port Hacking Road. [608] Mr Rosenbaum has adduced evidence demonstrating that this sum was paid by cheque drawn on Mrs Rosenbaum's bank account. [609] However, this payment was for the benefit of the Partnership and not Mr Baidarman personally. That is because the Partnership owned villa 1, as I have held at [438] and [444] above. The payment was therefore a contribution by Mr Rosenbaum to the Partnership rather than a "direct transaction" as Mr Rosenbaum contends. There will therefore be an order dismissing prayer 5A(i) of the Statement of Claim to the extent that it relates to item 3 in schedule MFI-3 to the referee's report and a further order that, on the taking of the Partnership account, Mr Rosenbaum be credited with a contribution to the Partnership of $956 on 16 February 1994.
3. Mr Rosenbaum has failed to adduce evidence that would support his claim to recover a payment of $2,370 made to Mr Baidarman as a "direct transaction". [610] Mr Rosenbaum relied solely on an entry in the 2006 Reconciliation document, which was not admitted as evidence of its truth. [611]
4. Mr Baidarman gave evidence that Colonial paid $4,740 to Ironwell under an insurance policy in respect of the Miranda project when a party wall on that site suffered damage. Mr Rosenbaum paid half of that sum to Mr Baidarman in cash and retained the other half. [612] I accept this evidence, on which Mr Baidarman was not successfully challenged in cross-examination. [613] It is inherently likely that Mr Rosenbaum would have paid half of the insurance proceeds to Mr Baidarman only if he had retained half for himself.
5. Having regard to the disorganised and chaotic manner in which the 2006 Reconciliation was undertaken and the numerous errors that the parties have subsequently identified in the 2006 Reconciliation document, the note in that document that "Jacob owes Eddie Colonial Claim $2,370" [614] is of insufficient weight to support the finding for which Mr Rosenbaum contends and in respect of which he bears the onus of proof.
6. I accept the submission made on behalf of Mr Baidarman that, as Mr Rosenbaum's half of the $4,740 payment has not been accounted for in the various schedules submitted to the referee, Mr Baidarman's half should not be brought into the taking of the Partnership account.
7. For those reasons, there will be an order dismissing prayer 5A(i) of the Statement of Claim to the extent that it relates to item 12 in schedule MFI-3 to the referee's report.

Alleged additional withdrawals by Mr Baidarman

1. Mr Rosenbaum claims that Mr Baidarman should be charged with additional withdrawals from the Partnership totalling $39,416 in addition to the withdrawals that Mr Baidarman included in his schedule of contributions and withdrawals submitted to the referee. [615] Mr Rosenbaum relies solely on the 2006 Reconciliation document in support of this claim. He claims that Mr Baidarman acknowledged in the 2006 Reconciliation document withdrawals totalling $39,416 that been omitted from his schedule submitted to the referee. [616]
2. Mr Baidarman gave evidence that the 2006 Reconciliation entries relied on by Mr Rosenbaum contain errors and double counting. Mr Baidarman also gave evidence that, in calculating the figure of $39,416, Mr Rosenbaum had also understated the withdrawals included in Mr Baidarman's schedule submitted to the referee. [617]
3. Mr Baidarman's evidence was not addressed in Mr Rosenbaum's evidence in reply or challenged in cross-examination.
4. The submissions made on behalf of Mr Rosenbaum did not address why Mr Baidarman's evidence should be rejected or why he should be charged with additional withdrawals totalling $39,416, except by asserting that the 2006 Reconciliation should be accepted as evidence that the transactions in fact occurred. [618] However, the 2006 Reconciliation document is not evidence of the truth of the entries relating to these withdrawals, and Mr Rosenbaum has adduced no other evidence about the alleged withdrawals.
5. I accept the submission made on behalf of Mr Baidarman that Mr Rosenbaum has not discharged his onus of proving that additional withdrawals totalling $39,416 were made. There will be an order dismissing prayer 5A(j) of the Statement of Claim insofar as it relates to item 1 of schedule MFI-2 to the referee's report.

Mr Rosenbaum's withdrawal of $15,199.96 from the Ironwell account

1. The parties' competing contentions and claims in relation to this admitted withdrawal from the Ironwell account in 1991 are set out at [286] above. The sole issue in dispute is whether the funds in the Ironwell account at the time the withdrawal was made on 9 December 1991 were Partnership funds.
2. As I have noted at [327] above, moneys drawn down under the Westpac loan financing the Merton Street project were the sole source of funds standing to the credit of the Ironwell account at the time of the $15,199.96 withdrawal. I have found that these moneys were Partnership funds: see [340]-[362] above.
3. It follows that Mr Baidarman has discharged his onus of proving that the withdrawal was from Partnership funds and there will be an order that Mr Rosenbaum be surcharged on the taking of the Partnership account with the withdrawal of $15,199.96 from the Partnership on 9 December 1991. [619]

Other alleged withdrawals by Mr Rosenbaum from the Partnership

1. The following alleged withdrawals by Mr Rosenbaum from the Partnership to which I have referred at [286] above had effectively been abandoned by Mr Baidarman by the end of the hearing before me, as they were neither specifically identified in the parties' evidence nor referred to in submissions: 1. the amount of $9,346 allegedly withdrawn from Partnership funds during 1994 to pay personal expenses of Mr Rosenbaum; 2. the amount of $18,793 allegedly withdrawn from Partnership funds during 1995 and 1996 to pay personal expenses of Mr Rosenbaum; and 3. the two cheques dated 10 June 1997 in the amounts of $6,000 and $24,000.
2. There will be an order dismissing Mr Baidarman's claims in relation to those alleged withdrawals.
3. That leaves Mr Baidarman's claims concerning the alleged withdrawals from the Ironwell account referred to at [286(e)] above. These withdrawals were referred to fleetingly in Mr Baidarman's closing submissions. Counsel for Mr Baidarman submitted that the referee had found that each of these payments were made out of the Ironwell account and that "it seems to us to follow … as night follows day" that Mr Rosenbaum should be surcharged with those payments on the taking of the Partnership account. [620]
4. There is no reference to these items in Mr Baidarman's evidence. The Court was not referred to any evidence in support of the assertion implicit in Mr Baidarman's very brief submission referred to above that the funds were paid for the benefit of Mr Rosenbaum and not for the benefit of the Partnership.
5. Mr Baidarman has therefore failed to discharge his onus of proof in relation to items 3, 15-19, 36, 37, 40 and 59 in Part 12.5 of the referee's report. The order sought in relation to those items in paragraph 8(d) of the defendant's proposed partnership accounting orders will not be made.

Claims for relief in relation to the Partnership

1. There will be a declaration that the Partnership has dissolved and an order that the Partnership business be wound up under the direction of the Court. The declaration will need to incorporate the date of dissolution, and I will hear the parties about that date if it is the subject of dispute.
2. There will also be an order for the taking of an account of the assets and liabilities of the Partnership, adopting the approach that I have described at [78]-[79] above as the best available approach in the circumstances of this case. As I have explained, that will need to include an assessment of the taxation liabilities of the Partnership.
3. I decline to make the order sought by Mr Baidarman that the account be taken on the wilful default basis insofar as it concerns Mr Rosenbaum's dealings in relation to the Partnership.
4. The effect of an order for the taking of an account on the basis of wilful default is that the accounting party must account not only for the assets that have actually been received (in this case, by or on behalf of the Partnership), but also for assets that would have been received if the relevant duties of the accounting party had been properly discharged. To justify an order for the taking of accounts on the basis of wilful default, at least one instance of wilful default must be established, and there must be some evidence grounding a reasonable suspicion that there may have been other such defaults. [621]
5. In this case, Mr Baidarman relied on Mr Rosenbaum's appropriation for himself, Mrs Rosenbaum or Ironwell Super of $167,698 of the Merton Street sale proceeds and $29,169.44 of the sale proceeds of villa 1 at Port Hacking Road, together with his occupation of villa 2 at Port Hacking Road for many years representing that he had paid for it when he had not, as "very serious misapplication of Partnership funds for private gain which would not be the subject of merely simple interest." It was submitted that: "for that reason, we seek the accounting on the basis of wilful default so that interest will compound over the period for which all the funds have to be accounted." [622]
6. This submission elides the wilful default basis of accounting with the basis on which interest should be paid. It fails to address the critical question for the purpose of determining whether an account should be taken on a wilful default basis: does Mr Rosenbaum's past conduct referred to above give rise to a reasonable suspicion that there have been other wilful defaults not yet known to Mr Baidarman? [623]
7. In my opinion, the answer to that question is "no" because the partners have already engaged in a lengthy process of requiring one another to account for his dealings concerning the Partnership. That process commenced with the 2006 Reconciliation, which was then overtaken by the reference conducted within these proceedings in 2016 and 2017. The parties' approach to the reference has been informed by their review of bank statements, cheque butts, their own diaries and other records they have obtained through these proceedings or otherwise. It is plain from the nature of some of the entries in the schedules to the referee's report that they have left no stone unturned. I accept the submission of counsel for Mr Rosenbaum that it is highly unlikely that anything new would be discovered if the account were ordered to be taken on the wilful default basis insofar as it concerns Mr Rosenbaum's dealings. [624]
8. I have addressed Mr Baidarman's specific claims for compound interest in Section D of these reasons.
9. The parties will need to formulate a minute of order for the taking of the account in accordance with these reasons, including the specific orders that I have indicated in Section D are to be made and otherwise providing for the referee's findings as adopted by the Court to be applied in the taking of the account.
10. The minute of order will need to identify the person who is to take the account and indicate procedural directions for the conduct of the accounting.

Claims for relief in relation to the Omega Unit Trust and the IPD Trust

1. The parties' claims for relief in relation to the trusts are set out at [81] - [104].
2. If there were to be an order for the taking of accounts in respect of the trusts, I am not persuaded that it would be appropriate for the account to be taken for a period commencing prior to 1 July 2010. That would involve reopening of accounts that have already been prepared for the trusts, for the period up to 30 June 2010. For the reasons explained at [595]-[614] above, the dealings with the unit holdings in the Omega Unit Trust as recorded in the financial statements during the period up to 30 June 2010 do not warrant the taking of accounts in respect of the trust for a period prior to 1 July 2010.
3. However, for the reasons explained at [96]-[98] and [104] above, an order for the taking of accounts in relation to the trusts would be futile in circumstances where the accounting party, Excelsea, is in a state of deadlock and it is plain from the conduct of these proceedings to date that the elements of the account would be the subject of intractable dispute between its directors.
4. The parties contemplate that this problem may be overcome by an order that the administration of the trusts be conducted by and under the direction of the Court. In my opinion, it is not appropriate to make such an order in this case, for the following reasons, even assuming that the parties applying for the order have standing to do so. [625]
5. First, as I have explained at [90] above, a general administration order would weigh the trust deed down with the requirement to obtain the leave of the Court before taking each and every step in the administration of the trusts. That is a cumbersome and costly approach and the parties' submissions did not identify any reasons why the Court should embrace that approach rather than leaving the beneficiaries to seek more target relief.
6. Second, a general administration order would be worse than cumbersome in this case. It would be unworkable. The deadlock between the trustees directors means that it would be highly unlikely that the trustee would be able to determine the steps it would wish to take in the administration of the trusts in order to apply for the leave of the Court to take those steps in the course of the working out of a general administration order. The reality is that there would be a series of contested hearings between the beneficiaries and Excelsea would not even be capable of appointing solicitors to appear for it at those hearings. The parties' submissions failed to grapple with this problem, [626] which would mean that applications for specific orders in the working out of a general administration order would not be properly constituted and the trustee would not be bound by any orders made. The hearings would descend into contests between the beneficiaries and unit holders seeking competing declarations concerning the assets of the trusts and the manner in which they are to be distributed in accordance with the trust deeds. It was open for the parties to seek such declarations in these proceedings. They did not do so.
7. I decline to make a general administration order for those reasons. This makes it unnecessary to address the additional problems referred to at [91]-[94] above.
8. The appropriate order in this case is the alternative order sought by Mr Baidarman seeking appointment of a new trustee to both trusts in substitution for Excelsea pursuant to s 70 of the Trustee Act. I am satisfied that it is expedient to do so because the ongoing deadlock between the trustees directors has ground the administration of both of the trusts to a halt and it is contrary to the interests of the beneficiaries of the IPD trust and unit holders of the Omega Unit Trust that this state of affairs should be allowed to continue. An independent trustee appointed to both trusts in substitution for Excelsea will be in a position to prepare accounts for the trusts for the period after 1 July 2010 as required by the trust deeds, to take such action as the trustee may consider appropriate in relation to the September 2010 payment out of the assets of the Omega Unit Trust, and to determine how to distribute the income and/or capital of each trust in accordance with the trust deed and applicable legal principles. It will be open to the independent trustee to seek judicial advice in relation to these matters, and the beneficiaries and unit holders will be entitled to be heard on any such application. In my opinion, it is overwhelmingly in the interests of the beneficiaries and unit holders that the administration of the trusts proceed in this orderly fashion: see Northwest Capital Management v Westgate Capital Limited (2012) 264 FLR 424; [2012] WASC 121 at [123] and the authorities there cited; McNee v Lachlan McNee Family Maintenance Pty Ltd [2020] VSC 273 at [22]-[26] and the authorities there cited.
9. For those reasons, the claims for general administration orders and the taking of accounts in relation to both trusts will be dismissed. The minute of orders to be prepared by the parties will need to reflect that, and to include an order for the appointment of an appropriately qualified independent trustee to both trusts. The Court will need evidence of that trustee's consent to appointment before the order is made under s 70 of the Trustee Act in relation to each trust. I will hear the parties as to the identity of the independent trustee to be appointed if there is a dispute about it. The minute of order will also need to provide for the independent trustee's renumeration and expenses.
10. I will hear the parties in relation to costs.

ORDERS

1. I make the following directions: 1. The parties are to prepare and send to the Associate to Williams J by 4:00PM on 18 June 2021 short minutes of order giving effect to these reasons for judgment. 2. Any element of disagreement about the precise terms of the orders that will give effect to these reasons is to be indicated within the relevant part of the short minutes of order by juxtaposing the contentious aspects of the terms propounded by each party in different colours. 3. Each party is to file and serve by 4:00PM on 18 June 2021 written submissions of no more than 3 pages in support of their contentions concerning any disputed elements of the terms of the orders and in relation to costs. 4. The matter is listed at 3:00PM on 21 June 2021 for the making of orders.

Endnotes

1. Further Amended Statement of Claim filed on 10 June 2020 (Claim), paragraph 1; Defence filed on 28 June 2019 (on which the defendants continue to rely notwithstanding the subsequent filing of the Claim) (Defence), paragraph 1.
2. Claim, paragraph 2; Defence, paragraph 2.
3. Claim, paragraph 24; Defence, paragraph 21.
4. Further Amended Cross-Claim filed on 11 June 2020 (Cross-Claim), paragraph 61; Defence to Amended Statement of Cross-Claim filed on 28 November 2019 (on which the cross-defendants continue to rely notwithstanding the subsequent filing of the Cross-Claim (Cross-Claim Defence), paragraph 52 (page 11).
5. Cross-Claim, paragraph 62; Cross-Claim Defence, paragraph 52 (page 11).
6. Cross-Claim, paragraph 61; Cross-Claim Defence, paragraph 52 (page 11).
7. Cross-Claim, paragraph 63; Cross-Claim Defence, paragraph 52 (page 11).
8. Cross-Claim, paragraphs 60-66; Cross-Claim Defence, paragraphs 52-54 (page 11).
9. Claim, paragraph 6; Defence, paragraph 5.
10. Affidavit of Waldemar Wawrzyniuk affirmed on 28 June 2019, paragraphs 17-27.
11. Claim, paragraph 111(a); Defence, paragraph 112.
12. Claim, paragraph 111(b); Defence, paragraph 112.
13. T845.19-845.21.
14. Claim, paragraphs 8-14, 112-113; Defence, paragraphs 7-12, 114-115.
15. Claim, paragraphs 8-14; Defence, paragraphs 7-12.
16. T836.10-836.20.
17. Tab A of Exhibit ER1 to Mr Rosenbaum's affidavit sworn on 25 February 2019 (Exhibit 2).
18. Claim, paragraphs 8-9; Defence, paragraph 8.
19. Exhibit 2, page 5.
20. Claim, paragraph 12; Defence, paragraph 9(a).
21. Claim, paragraph 13; Defence, paragraph 11.
22. Exhibit 2, page 4.
23. See [590]-[611] below.
24. Cross-Claim, paragraphs [67]-[69]; Cross-Claim Defence, paragraph 55 (page 11) and paragraph 45 (page 12).
25. See [595]-[611] below.
26. Claim, paragraphs 58-61; Defence, paragraphs 51-54; Cross-Claim, paragraphs 72-86; Cross-Claim Defence, paragraphs 48-59 (pages 10-11).
27. Cross-Claim, paragraph 70; Cross-Claim Defence, paragraph 46 (page 10).
28. Defence, paragraph 14. The schedules are referred to in the orders made in these proceedings on 20 May 2016.
29. Uniform Civil Procedure Rules 2005 (NSW), r 46.7(1); Hungerford v Richardson [2018] NSWSC 1543 at [19]-[21].
30. Defence, paragraph 14. The schedules are referred to in the orders made by Robb J on 20 May 2016.
31. Uniform Civil Procedure Rules 2005 (NSW), r 46.7(1); Hungerford v Richardson [2018] NSWSC 1543 at [19]-[21].
32. Defence, paragraph 14. The schedules are referred to in the orders made by Robb J on 20 May 2016.
33. Orders made on 20 May 2016, as reproduced in section 23 of the referee's report dated 12 September 2017 (Exhibit 1).
34. Exhibit 1, pages 14, 65-71.
35. Exhibit 1, pages 17, 72-74.
36. Exhibit 1, pages 21, 75-78.
37. Exhibit 1, page 4 (paragraph 1.9), pages 75-78.
38. Exhibit 1, page 4 (paragraphs 1.8-1.9), pages 75-78.
39. Exhibit 1, pages 15, 18.
40. Exhibit 1, page 22.
41. Exhibit 1, pages 29, 80-96.
42. Exhibit 1, page 32.
43. Exhibit 1, pages 32, 97-122.
44. Exhibit 1, page 30.
45. Exhibit 1, page 32.
46. Exhibit 1, page 37
47. Exhibit 1, page 31.
48. Exhibit 1, page 33.
49. Exhibit 1, pages 38-39 and schedule MFI-5 attached to the report.
50. Exhibit 1, page 16.
51. Exhibit 1, page 19.
52. Exhibit 1, pages 23-25 and schedule MFI-2 attached to the report.
53. T836.10-836.20.
54. Mr Rosenbaum's "withdrawal" of $110,100 is shown at item 292 of schedule MFI-1 to the referee's report as having been accepted by Mr Baidarman. Mr Baidarman's "withdrawals" totalling $493,792 are shown at items 848A and 848B of schedule MFI-4 to the referee's report as having been accepted by Mr Rosenbaum. The orders made by the Court adopting the referee's report did not include any qualification or exclusion in relation to those items.
55. Orders 1.5, 1.7, 1.8, 1.13, 1.17.
56. Order 1.1 and Annexure A; order 1.15.
57. Order 1.2.
58. Order 1.3.
59. Orders 1.4, 1.14, 1.16.
60. Orders 1.6, 1.10, 1.11.
61. Orders 1.11, 1.12.
62. Order 1.18.
63. Claim, paragraphs 20-21.
64. Defence, paragraphs 17-18; Cross-Claim.
65. MFI-9.
66. MFI-10.
67. See Commissioner of State Revenue v Rojoda Pty Ltd (2020) 376 ALR 378; [2020] HCA 7 at [30]-[40] (Bell, Keane, Nettle and Edelman JJ) and [72]-[73] (Gageler J).
68. Claim, paragraph 5; Defence, paragraph 4.
69. Claim, prayers 1-2; Defence, paragraph 138(a).
70. Claim, prayer 3.
71. Defence, paragraph 138(a); Cross-Claim prayer 3.
72. Cross-Claim Defence, paragraph 64.
73. Claim, prayer 4.
74. Defence, paragraph 138(b).
75. Cross-Claim, prayers 5-7; Cross-Claim Defence, paragraph 65; defendant's written submissions dated 21 May 2020, paragraphs 233-234.
76. Cross-Claim, prayer 10B; Cross-Claim Defence, paragraph 61.
77. Cross-Claim, prayer 10D.
78. Cross-Claim, prayer 10F.
79. Cross-Claim Defence, paragraph 61 (page 11).
80. Excelsea was deregistered on 17 August 2014 as a result of its failure to pay annual fees to the Australian Securities and Investments Commission: Cross-Claim, paragraph 82; Cross-Claim Defence, paragraph 57 (page 11).
81. Re Cenco Holdings Pty Ltd (2005) 53 ACSR 484 at [21]-[24]; Bloomingdale Holdings Pty Ltd v 87 Stevedore Street Pty Ltd (2010) 6 ASTLR 271; [2010] VSC 268 at [25].
82. See also Mudocca v Murdocca (No. 2) [2002] NSWSC 505 at [43]-[46]; The Law of Trusts: Ford and Lee (Thompson Reuters, 2019) at [17.9050]; D Clarry, The Supervisory Jurisdiction Over Trust Administration (Oxford University Press, 2018) at [4.01]-[4.12].
83. T803.15-803.19.
84. Emphasis added.
85. Exhibit WW2 to the affidavit of Waldemar Wawrzyniuk affirmed on 28 June 2019 (Exhibit 20, pp 24-54).
86. Cross-Claim, prayer 10C; Cross-Claim Defence, paragraph 65 (page 12).
87. Cross-Claim, prayer 10G.
88. Cross-Claim, prayer 10B; Cross-Claim Defence, paragraph 61.
89. Cross-Claim, prayer 10E.
90. Cross-Claim Defence, paragraph 66 (page 12).
91. Exhibit WW2 to the affidavit of Waldemar Wawrzyniuk affirmed on 28 June 2019 (Exhibit 20, pp 58-81).
92. Cross-Claim, prayer 10C; Cross-Claim Defence, paragraph 65 (page 12).
93. Cross-Claim, prayer 10; Cross-Claim Defence, paragraph 65.
94. Claim, paragraph 6; Defence, paragraph 138(d); Cross-Claim, paragraph 11.
95. Claim, paragraph 1; Defence, paragraph 1.
96. Claim, paragraph 2; Defence, paragraph 1.
97. It was common ground that this term was implied pursuant to s 24(1)(3) of the Partnership Act 1892 (NSW); Claim, paragraph 3; defendant's written submissions dated 21 May 2021, paragraph 233.
98. Claim, paragraph 4; Defence, paragraph 3.
99. Claim, paragraph 5; Defence, paragraph 4.
100. Claim, paragraphs 6 and 25; Defence, paragraphs 5 and 21; Cross-Claim, paragraphs 11-12; Cross-Claim Defence, paragraph 11.
101. Claim, paragraph 26; Defence, paragraph 21.
102. Tab O of Exhibit ER-1 to Mr Rosenbaum's affidavit sworn on 26 February 2019 (Exhibit 2, p 252).
103. Claim, paragraph 27; Defence, paragraph 22.
104. Claim, paragraphs 24 and 28; Defence, paragraphs 21 and 23.
105. Claim, paragraphs 22-23; Cross-Claim Defence, paragraphs 5, 10, 12.
106. Defence, paragraph 19; Cross-Claim, paragraphs 4-9.
107. Cross-Claim Defence, paragraphs 5-9.
108. Claim, paragraph 29; Defence, paragraph 24; Cross-Claim, paragraphs 14-17; Cross-Claim Defence, paragraphs 13-15.
109. Defence, paragraphs 19-20; Cross-Claim, paragraphs 4, 10, 13.
110. Claim, paragraph 30; Defence, paragraph 25.
111. Claim, paragraphs 31, 40; Defence, paragraphs 31, 33.
112. Claim, paragraph 32; Defence, paragraph 27.
113. Claim, paragraph 33; Defence, paragraph 27.
114. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 155.
115. Claim, paragraph 34; Defence, paragraph 28; Cross-Claim, paragraphs 15-17; Cross-Claim Defence, paragraphs 13-15; Mr Rosenbaum's affidavit sworn 25 February 2019, paragraph 110 and tab R of Exhibit ER-1 to that affidavit (Exhibit 2, p 256).
116. Claim, paragraph 35; Defence, paragraph 29.
117. Cross-Claim, paragraphs 52-54, 59 (Schedule MFI-4 to Exhibit 1, item 30A); Plaintiff's written opening submissions, paragraph 318; T771.49 - 772.6.
118. Cross-Claim Defence, paragraphs 48-49, 51.
119. Exhibit 1, schedule MFI-1, item 65.
120. Claim, paragraphs 108, 110; Exhibit 1, tab MFI-1, item 42 and tab MFI-2, items 2, 3, 4 and 5; Defence, paragraph 111.
121. Cross-Claim, paragraph 59; Cross-Claim Defence, paragraph 51; Defendant's proposed partnership accounting orders (MFI-10), paragraph 12 (insofar as it relates to items 47, 54, 61, 62, 73 and 110 of schedule MFI-4 to the referee's report).
122. Cross-Claim, prayer 1; Cross-Claim Defence, paragraph 63.
123. Cross-Claim, prayer 2; Cross-Claim Defence, paragraph 63.
124. Cross-Claim, prayer 4; Cross-Claim Defence, paragraph 65.
125. Cross-Claim, prayer 4; Cross-Claim Defence, paragraph 65.
126. Claim, prayer 5A(h) (insofar as it relates to item 42 of schedule MFI-1 to the referee's report) and paragraph 108; Plaintiffs' proposed partnership accounting orders (MFI 9), paragraph 2(f) (insofar as it relates to item 42 of schedule MFI-1 to the referee's report).
127. Claim, prayer 5A(j) (insofar as it relates to item 2 of schedule MFI-2 to the referee's report); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 3(a) (insofar as it relates to item 2 of schedule MFI-2 to the referee's report).
128. Claim, prayer 5A(j) (insofar as it relates to item 3 of schedule MFI-2 to the referee's report); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 3(a) (insofar as it relates to item 3 of schedule MFI-2 to the referee's report).
129. Claim, prayer 5A(j) (insofar as it relates to item 4 of schedule MFI-2 to the referee's report); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 3(a) (insofar as it relates to item 4 of schedule MFI-2 to the referee's report).
130. Cross-claim, prayer 15; Defendant's proposed partnership accounting orders (MFI-10), paragraph 10; Plaintiffs' proposed partnership accounting orders (MFI 9), paragraph 1(o).
131. Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(a) (insofar as it relates to item 65 in schedule MFI-1 to the referee's report (Exhibit 1).
132. Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(a) (insofar as it relates to item 65 in schedule MFI-1 to the referee's report (Exhibit 1).
133. Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(a) (insofar as it relates to item 99 in schedule MFI-1 to the referee's report (Exhibit 1).
134. Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(a) (insofar as it relates to item 99 in schedule MFI-1 to the referee's report (Exhibit 1).
135. Claim, paragraph 6; Defence, paragraph 5; Cross-Claim, paragraph 22; Cross-Claim Defence, paragraph 37.
136. Claim, paragraphs 62-63; Defence, paragraph 55.
137. Cross-Claim, paragraph 50 and 59 (Schedule MFI-4 to Exhibit 1, item 13); Cross-Claim Defence, paragraphs 46 and 51.
138. Claim, prayer 5A(m); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(j); Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(d).
139. Claim, paragraph 108; Exhibit 1, tab MFI-1, item 46.
140. Defence, paragraph 111.
141. Claim, paragraph 37; Defence, paragraph 55.
142. Claim, paragraphs 36, 38; Defence, paragraphs 30, 32.
143. Claim, paragraph 38; Defence, paragraph 32.
144. Claim, paragraphs 37, 39-40; Defence, paragraphs 31, 33.
145. Claim, paragraphs 40-41; Defence, paragraphs 33-35.
146. Claim, paragraph 65; Defence, paragraph 55.
147. Claim, paragraphs 66-70.
148. Defence, paragraphs 57-63.
149. Defence, paragraphs 64-66.
150. Defence, paragraph 67.
151. Cross-Claim, paragraph 23; Cross-Claim Defence, paragraph 37.
152. Claim, paragraphs 71-73.
153. Defence, paragraphs 68-75, 79; Claim, paragraphs 75-76; Cross-Claim, paragraph 26; Cross-Claim Defence, paragraph 41.
154. Defence, paragraph 76.
155. Defence, paragraphs 77-78; Cross-Claim, paragraphs 27-29.
156. Cross-Claim Defence, paragraphs 42-44.
157. Schedule MFI-1 to the referee's report, items 170-171; Claim, prayer 5A(k); Cross-Claim, prayer 13(e); Plaintiffs' proposed partnership accounting orders, paragraph 2(h); Defendant's proposed partnership accounting orders, paragraph 8(e).
158. Order 1.2.
159. Cross-Claim Defence, paragraph 44.
160. Item 90 of schedule MFI-1 to the referee's report (Exhibit 2), which was not accepted by the referee.
161. Cross-Claim, paragraphs 32-33.
162. Cross-Claim Defence, paragraphs 47-48.
163. Schedule MFI-1 to the referee's report (Exhibit 1), item 85.
164. Claim, paragraph 77; Defence, paragraph 80(a).
165. Defence, paragraph 80.
166. Claim, paragraph 77; Cross-Claim Defence, paragraph 38.
167. Defence, paragraphs 80(e)-(g); Cross-Claim, paragraph 24.
168. Defence, paragraphs 80(e)-(g).
169. Cross-Claim, paragraph 24.1; Cross-Claim Defence, paragraph 38.
170. Cross-Claim, paragraph 24.3; Cross-Claim Defence, paragraph 38.
171. Defence, paragraph 80(h); Cross-Claim, paragraph 24.6; Cross-Claim Defence, paragraph 38.
172. Defence, paragraph 80(h).
173. Defence, paragraph 80(i); Cross-Claim, paragraph 25.
174. Cross-Claim Defence, paragraph 40.
175. Exhibit 1.
176. Cross-Claim, paragraphs 17A-17D.
177. Cross-Claim Defence, paragraph 16.
178. Cross-Claim, paragraphs 24.4-24.5.
179. Cross-Claim Defence, paragraph 39.
180. Cross-Claim, paragraphs 17J-17M.
181. Clam, paragraphs 78-82.
182. Claim, paragraphs 81-82.
183. Exhibit 1, schedule MFI-3, item 7 and schedule MFI-2, item 6C.
184. Defence, paragraphs 81-82.
185. Order 1.5 made on 10 September 2018.
186. Defence, paragraph 84.
187. Claim, paragraph 74.
188. Defence, paragraph 73.
189. Claim, paragraph 110; item 5 of schedule MFI-2 to the referee's report; Defence, paragraph 111.
190. See [17]-[18] above.
191. Claim, paragraph 115; Exhibit 1, tab MFI-3, item 5; Defence, paragraph 117.
192. Cross-claim, prayer 14; Defendant's proposed partnership accounting orders (MFI-10), paragraph 9.
193. Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 1(m).
194. Claim, prayer 5A(m); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(j); Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(d).
195. Claim, prayer 5A(h) and paragraph 108 and Defence, paragraph 111 (insofar as those paragraphs relate to item 46 of schedule MFI-1 to the referee's report); Plaintiff's proposed partnership accounting orders (MFI-9), paragraph 2(f); Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(g).
196. Claim, prayer 5A(a); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(a); Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(a).
197. Claim, prayer 5A(d); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(c); Defendant's proposed partnership accounting orders (MFI-10), paragraph 4.
198. Cross-Claim, prayer 13(f); Defendant's proposed partnership accounting orders (MFI-10), paragraph 8(f).
199. Cross-Claim, prayer 13(e) (and see also items 170-171 of schedule MFI-1 to referee's report); Defendant's proposed partnership accounting orders (MFI-10), paragraph 8(e).
200. Plaintiffs' proposed partnership accounting orders (MFI 9), paragraphs 1(d) and 1(e).
201. Claim, prayer 5A(k); Plaintiff's proposed partnership accounting orders (MFI 9), paragraph 2(i).
202. MFI-10, paragraph 2(c).
203. Plaintiffs' proposed partnership accounting orders (MFI 9), paragraph 8.
204. See [182] above.
205. Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 1(g).
206. Cross-Claim, paragraph 25; Cross-Claim Defence, paragraph 40.
207. Claim, paragraph 5A(e); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(d).
208. Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(g) (insofar as it relates to item 6C of schedule MFI-2 and item 7 of schedule MFI-3 to the referee's report).
209. Claim, prayer 5A(j) and Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 3(a) (insofar as those paragraphs relate to item 5 of schedule MFI-2 to the referee's report).
210. Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(g) (insofar as it relates to item 5 of schedule MFI-2 to the referee's report).
211. Claim, prayer 5A(i) and Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(g) (insofar as those paragraphs relate to item 5 of schedule MFI-3 to the referee's report).
212. Defendant's proposed partnership accounting orders (MFI-10), paragraph 3 (insofar as it relates to item 5 of schedule MFI-3 to the referee's report).
213. Claim, paragraphs 53-57; Defence, paragraphs 46-47.
214. Claim, paragraphs 53-57.
215. T771.
216. T661.1-661.10.
217. T828.15-833.5.
218. Defence, paragraphs 46, 49.
219. Claim, prayer 5A(c); Plaintiff's proposed partnership accounting orders (MFI-9), paragraph 2(b).
220. Defendants' proposed partnership accounting orders (MFI-10), paragraph 2(b).
221. Defence, paragraph 50.
222. Claim, paragraphs 116-118; item 8 of schedule MFI-3 to the referee's report; Defence, paragraph 118: T487.23-487.34, 643.6-645.37.
223. Order 1.14 made on 10 September 2018.
224. Claim, prayer 5A(i) and Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(g) (insofar as those paragraphs relate to item 8 of schedule MFI-3 to the referee's report).
225. Defendants' proposed partnership accounting orders (MFI-10), paragraph 2(h) (insofar as it relates to item 8 of schedule MFI-3 to the referee's report).
226. Cross-Claim Defence, paragraph 51.
227. Cross-Claim Defence, paragraphs 51-53.
228. Items 97, 98, 105, 109-116, 118-121, 123-126, 129, 131, 134, 136-137, 146, 153 and 157A in schedule MFI-1 to the referee's report (Exhibit 1).
229. Cross-Claim, paragraphs 40-43.
230. Cross-Claim, prayer 13(g).
231. Claim, prayer 5A(l); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(i).
232. Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 1(i).
233. Items 108, 122, 128 and 157 of schedule MFI-1 to the referee's report.
234. Order 1.3 made on 10 September 2018.
235. Claim, paragraph 6; Defence, paragraph 5.
236. Cross-Claim, paragraphs 17E-17F; Cross-Claim Defence, paragraphs 16-17.
237. Cross-Claim, paragraphs 17G-17I.
238. Cross-Claim Defence, paragraphs 15-20.
239. Claim, paragraph 6; Defence, paragraphs 5, 85.
240. Claim, paragraph 83; Defence, paragraph 85.
241. See [17]-[18] above.
242. Claim, paragraph 115; Exhibit 1, tab MFI-3, item 6A; Defence, paragraph 117; Defendant's proposed partnership accounting orders, paragraph 3 (MFI-10, to the extent that paragraph 3 of MFI-10 relates to item 6A in schedule MFI-3 to the referee's report).
243. See [17]-[18] above.
244. Claim, paragraph 115, Exhibit 1, tab MFI-3, items 9, 10 and 11; Defence, paragraph 117.
245. Claim, paragraphs 84-85; Defence, paragraph 86.
246. Claim, paragraph 86; Defence, paragraph 87; Cross-Claim Defence, paragraph 56(a).
247. Claim, paragraphs 87-90; Defence, paragraph 89.
248. Claim, paragraphs 91-92.
249. T776.27-776.31.
250. Defence, paragraphs 90-93, 95; defendant's proposed partnership accounting orders (MFI-10), paragraph 8(h).
251. Defence, paragraphs 94-96; Cross-Claim, paragraphs 40-43; Cross-Claim Defence, paragraphs 56-59.
252. Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 1(k); Defendant's proposed partnership accounting orders (MFI-10), paragraph 8(i).
253. Cross-Claim, paragraphs 55-58; Defendant's proposed partnership accounting orders (MFI-10), paragraph 12 (insofar as it relates to items 626, 647, 648 and 654 of schedule MFI-4 to the referee's report).
254. Claim, prayer 5A(i) and Plaintiffs' proposed partnership accounting orders, paragraph 2(g) (to the extent that those paragraphs relate to items 6A and 9-11 of schedule MFI-3 to the referee's report).
255. Defendant's proposed partnership accounting orders (MFI-10) at paragraph 3 (to the extent that it relates to items 6A and 9-11 in schedule MFI-3 to the referee's report).
256. Cross-Claim, prayer 13(h); Defendant's proposed partnership accounting orders (MFI-10), paragraphs 2(f) and 8(h); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 1(q).
257. Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 1(k).
258. Cross-Claim, prayer 13(i); Defendant's proposed partnership accounting orders (MFI-10), paragraph 8(i).
259. Cross-Claim, paragraphs 21A-21AG.
260. Cross-Claim Defence, paragraphs 29-36.
261. Cross-Claim, prayers 4C and 13(a); Cross-Claim Defence, paragraph 65; Defendant's proposed partnership accounting orders (MFI-10), paragraph 8(a).
262. Plaintiff's proposed partnership accounting orders (MFI-9), paragraph 1(c).
263. Claim, paragraphs 42-46.
264. Defence, paragraphs 36-41.
265. Defence, paragraph 42.
266. Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 3(c).
267. Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(k).
268. Cross-Claim, paragraphs 17N-17P; Cross-Claim Defence, paragraph 22. The amount in issue was originally claimed to be $29,169.44 but counsel for Mr Baidarman corrected this to $27,957 during the hearing: T822.25-822.40.
269. Cross-Claim, prayers 4B and 13(b); Defendant's proposed partnership accounting orders (MFI-10), paragraph 8(b).
270. Cross-Claim Defence, paragraph 65; Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 1(a).
271. Cross-Claim, paragraphs 18-21.
272. Cross-Claim Defence, paragraphs 23-28.
273. Cross-Claim, prayers 4A, 13(c); Cross-Claim Defence, paragraph 65; Defendant's proposed partnership accounting orders (MFI-10), paragraph 8(c).
274. Plaintiffs' proposed partnership accounting orders (MFI 9), paragraph 1(b).
275. Claim, paragraph 6; Defence, paragraph 5.
276. Claim, paragraph 12; Defence, paragraph 9(a); Exhibit 2, page 5.
277. Claim, paragraph 13; Defence, paragraph 11.
278. T793.9-794.25.
279. T855.30, 860.50-864.15.
280. See [83] above.
281. T862.50 - 864.15.
282. Claim, paragraph 59; Defence, paragraph 52.
283. Claim, paragraphs 58, 61; Defence, paragraphs 51, 54.
284. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraph 156.
285. T161.1 - 161.10.
286. That is to be inferred from cross-examination of Mr Baidarman at T550-562.
287. Paragraphs 383-385 of Mr Baidarman's affidavit affirmed on 28 June 2019.
288. Cross-Claim, prayer 10D.
289. Cross-Claim, prayer 10F.
290. T780.32-782.27.
291. Defence, paragraph 10; Exhibit 2, page 4.
292. See [17]-[18] above.
293. Claim prayer 5A(i) and paragraphs 119-121; Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(g) (to the extent that those paragraphs relate to item 13 of schedule MFI-3 to the referee's report).
294. Defence, paragraph 119; Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(h) (to the extent that it relates to item 13 of schedule MFI-3 to the referee's report).
295. Claim, paragraphs 93-98 and prayer 5A(f); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(e).
296. Defence, paragraphs 97-100; Defendants' proposed partnership accounting orders (MFI-10), paragraph 2(e).
297. T753.20.
298. Claim, paragraphs 94-101.
299. Defence, paragraphs 101-106.
300. See [17]-[18] above.
301. Claim, paragraph 115; schedule MFI-3 to the referee's report, items 3-4; Defence, paragraph 117; Defendant's proposed partnership accounting orders (MFI-10), paragraph 3 (insofar as it relates to items 3-4 of schedule MFI-3 to the referee's report).
302. Claim, prayer 5A(g); Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 3(b).
303. Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(i).
304. See [17]-[18] above.
305. Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(g) (to the extent that it relates to items 3 and 4 of schedule MFI-3 to the referee's report).
306. Claim, paragraph 115; schedule MFI-3 to the referee's report, items 3-4; Defence, paragraph 117; Defendant's proposed partnership accounting orders (MFI-10), paragraph 3 (insofar as it relates to items 3-4 of schedule MFI-3 to the referee's report).
307. Claim, paragraph 6; Defence, paragraph 5.
308. Mr Wawrzyniuk affidavit affirmed 28 June 2019, paragraphs 45-52; Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 377, 379-408 and page 484 of Exhibit ER-2 to that affidavit (Exhibit 3); Exhibit 18, pp 680-687.
309. Claim, paragraph 108 (to the extent that it relates to item 96 of schedule MFI-1 to the referee's report).
310. Defence, paragraph 111.
311. Claim, prayer 5A(h) and Plaintiff's proposed partnership accounting orders (MFI-9), paragraph 2(f) and Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(g) (to the extent that these paragraphs relate to item 96 of schedule MFI-1 to the referee's report).
312. Claim, prayer 5A(i) (to the extent that it relates to items 1, 2, 6 and 12 of schedule MFI-3 to the referee's report) and paragraphs 109, 115; Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 2(g) (to the extent that it relates to items 1, 2, 6 and 12 of schedule MFI-3 to the referee's report); Defence, paragraphs 111, 117; Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(g) (again, to the extent that it relates to items 1, 2, 6 and 12 of schedule MFI-3 to the referee's report).
313. Claim, paragraph 110; Defence, paragraph 111; item 1 of schedule MFI-2 to the referee's report (Exhibit 1).
314. Order 1.5 made on 10 September 2018.
315. Claim, prayer 5A(j) and Plaintiff's proposed partnership accounting orders, paragraph 3(a) (to the extent that those paragraphs relate to item 1 of schedule MFI-2 to the referee's report).
316. Defendant's proposed partnership accounting orders (MFI-10), paragraph 2(g) (to the extent that it relates to item 1 of schedule MFI-2 to the referee's report).
317. Cross-Claim, paragraphs 30-31; Cross-Claim Defence, paragraphs 45-46.
318. Defendants' proposed partnership accounting orders (MFI-10), paragraph 8(d) (insofar as it relates to item 14 in Part 12.5 of the referee's report; Plaintiffs' proposed partnership accounting orders (MFI-9), paragraph 1(f).
319. Cross-Claim, paragraphs 34-35; Cross-Claim Defence, paragraphs 49-50.
320. Cross-Claim, paragraphs 38-39; Cross-Claim Defence, paragraphs 54-55.
321. Cross-Claim, paragraphs 44-45; Cross-Claim Defence, paragraphs 61-62.
322. Defendant's proposed partnership accounting orders (MFI-10), paragraph 8(d) (to the extent that it relates to items 3, 15-19, 36, 37, 40 and 59 of part 12.5 of the referee's report (Exhibit 2, p 48).
323. Hungerford v Richardson [2018] NSWSC 1543 at [20]; T770.40-40-771.5, 816.6-816.20.
324. Hungerford v Richardson [2018] NSWSC 1543 at [20]; T770.40-771.5, 816.6-816.20.
325. Hung v Warner; In the matter of Bellpac Pty Ltd (Receivers and Mangers appointed) (In liquidation) [2013] FCAFC 48 at [20] - [31]; Gooley v Motasea Pty Ltd [2015] NSWCA 31 at [5]; Fulham Partners LLC v National Australia Bank Limited [2013] NSWCA 96 at [51] - [59]; Massoud v NRMA Insurance Limited (2005) 62 NSWLR 653 at 660.
326. Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 at [457] - [461].
327. T805.40-806.40.
328. Cross-Claim, prayers 1, 2 and 4; T804.46-805.15.
329. Defendant's written submissions, paragraphs 72-132; T805.40-806.10.
330. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 46-48; Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 28-29, 41-44.
331. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 46-49, 91; Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 37-38.
332. Claim, paragraph 26; Defence, paragraph 21.
333. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraph 93.
334. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraph 94 and tab N of Exhibit ER-1 to that affidavit (Exhibit 2, p 251).
335. Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 57-68; T524.50-530.22.
336. Ms Elliott's affidavit sworn 13 May 2019, paragraph 10; T654.31-657.35.
337. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraph 95 tab O of Exhibit ER-1 to that affidavit (Exhibit 2, p 252).
338. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 96-97; T186.20-187.9.
339. T283.49-285.14.
340. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 73.
341. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 74.
342. Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraphs 41-42.
343. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 84 and 89 and tab K of Exhibit ER-1 to that affidavit (Exhibit 2, p 130).
344. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraph 85; Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 75 and tab 16 of Exhibit JB-1 to that affidavit (Exhibit 17, pp 115-123).
345. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 71 and 153 and tab 7 of Exhibit JB-1 to that affidavit (Exhibit 17, pp 50-53).
346. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraph 101.
347. T282.25-283.12.
348. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 77, 103 and 123 and tab 22 of Exhibit JB-1 to that affidavit (Exhibit 17, pp 132-133).
349. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraph 101 and tab M of Exhibit ER-1 to that affidavit (Exhibit 2, pp 133-134); Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 80 and 122.
350. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraph 86-88 and tab M of Exhibit ER-1 to that affidavit (Exhibit 2, p 133).
351. Ms Elliott's affidavit sworn on 13 May 2019, paragraphs 4 and 20.
352. T287.40.
353. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 84; Mr Baidarman's affidavit affirmed on 28 October 2019, paragraph 37 and tab 8 of Exhibit JB-3 to that affidavit (Exhibit 19, p 98-107); Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraph 51.
354. Ms Elliott's affidavit sworn on 13 May 2019.
355. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraph 108; Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraphs 51-53.
356. Mr Baidarman's affidavit sworn 28 June 2019, paragraph 155.
357. T286.10-286.14.
358. The "progress payments" referred to in paragraph 102 of Mr Rosenbaum's affidavit sworn on 25 February 2019 are the only deposits to the Ironwell account during that period, as shown in the account statements at tab M of Exhibit ER-1 to that affidavit (Exhibit 2, pp 133-147). It was submitted on behalf of Mr Baidarman that Ironwell undertook no other activities during this period: T804.46-805.9.
359. Claim, paragraph 30; Defence, paragraph 25.
360. Affidavit of Mr Baidarman affirmed on 28 June 2019, paragraph 77.
361. T274.5-274.40.
362. T530.1-530.5.
363. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 140-143.
364. T761.5-763.22.
365. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 551-556.
366. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 555 and tab 129 of Exhibit JB-2 to that affidavit (Exhibit 18, pp 644-646).
367. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 555 and tab 129 of Exhibit JB-2 to that affidavit (Exhibit 18, pp 647-648).
368. T270.22-275.11.
369. See [8] above; T273.6-273.10.
370. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 556 and tab 130 of Exhibit JB-2 to that affidavit (Exhibit 18, pp 649-652).
371. Exhibit 17, p 237 identifies the date of establishment of Ironwell Super as 3 June 1993; as to the role of Ironwell in relation to Ironwell Super, see the defendant's closing submissions at T804.46-805.9; plaintiff's submissions at T29.1-29.6, 161.1-161.10.
372. Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraph 142; Defendant's written opening submissions, paragraph 73; defendant's closing submissions at T804.46-805.9
373. Defendant's closing submissions at T804.46-805.9.
374. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 53-56.
375. T761.45-761.49.
376. Tab O of Exhibit ER-1 to Mr Rosenbaum's affidavit sworn 25 February 2019 (Exhibit 2, p 252).
377. Tab 22 of Exhibit JB-1 to Mr Baidarman's affidavit affirmed on 28 June 2019 (Exhibit 17, pp 132-133).
378. T285.48-289.46.
379. Defendant's written opening submissions, paragraph 80.
380. Defendant's oral closing submissions at T805.14-805.39.
381. T806.5-806.20.
382. Exhibit 1.
383. T488.45-489.9.
384. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 153 and tab 7 of Exhibit JB-1 to that affidavit (Exhibit 17, pp 50-53).
385. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 156.
386. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 159 and 161-163: T487.50-499.16.
387. Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraph 88.
388. Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraphs 98-99 and tab 14 of Exhibit ER-3 to that affidavit (Exhibit 4, p 46).
389. Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraphs 93-100; Plaintiff's written opening submissions, paragraphs [316]-[327].
390. Exhibit ER-1 to Mr Rosenbaum's affidavit sworn on 25 February 2019, tab A (Exhibit 2, pp 1A-95, especially at pp 28-29); T494.30-496.20.
391. Mr Baidarman's affidavit sworn 28 June 2019, paragraphs 41-56, 71-72, 154.
392. T497.24-499.16, especially 497.43-497.48.
393. Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 155-156.
394. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 299-310; Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 164-166.
395. Plaintiffs' proposed partnership accounting orders (MFI 9), paragraph 2(f).
396. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 299-309 and 327-331; Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 141 and 176.
397. Plaintiffs' proposed partnership accounting orders (MFI 9), paragraph 3(a).
398. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 299-309 and 332-334; Mr Baidarman's affidavit affirmed 28 June 2019, paragraph 177.
399. Plaintiffs' proposed partnership accounting orders (MFI 9), paragraph 3(a).
400. Mr Rosenbaum's evidence concerning this alleged withdrawal is in paragraphs 299-309 and 335-336 of his affidavit sworn on 25 February 2019.
401. Plaintiffs' proposed partnership accounting orders (MFI 9), paragraph 3(a).
402. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 186-187; Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 192-194.
403. Paragraph 187.
404. Mr Baidarman's affidavit affirmed 28 June 2019, paragraph 213 and tab 58 of Exhibit JB-1 to that affidavit (Exhibit 17, p 266).
405. Mr Rosenbaum's affidavit sworn 26 August 2019, paragraphs 108-119; T386.1-392.11.
406. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 214-219; Exhibit 2, pp 56 and 75.
407. See [29] above and the evidentiary rulings marked as in MFI 1 in the proceedings.
408. T161.43-169.32.
409. Mr Baidarman's affidavit affirmed 28 June 2019, paragraph 221.
410. Mr Rosenbaum's affidavit sworn 26 August 2019, paragraph 116; Tab 19 of Exhibit ER-3 to Mr Rosenbaum's affidavit sworn 26 August 2019 (Exhibit 4, p 54); T386.1-392.11.
411. T840.13-840.50.
412. Mr Rosenbaum's affidavit sworn 26 August 2019, paragraphs 115-118.
413. See [185]-[186] above.
414. Mr Rosenbaum's affidavits do not address this claimed contribution at all, and it is pleaded in paragraph 108 of the Claim as one of several items relying on the 2006 Reconciliation.
415. See [187] above.
416. Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 194-205.
417. See [154] above.
418. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 232-251; T195.1-199.10; T815.5-815.40.
419. Mr Rosenbaum's 26 August 2019 affidavit, paragraphs 104 and 120-123.
420. Mr Rosenbaum's affidavit affirmed on 25 February 2019, paragraph 190.
421. Mr Rosenbaum's affidavit affirmed on 25 February 2019, paragraph 192; T191.5-191.36; T354.35-354.42.
422. Mr Rosenbaum's affidavit affirmed on 25 February 2019, paragraph 194; Mr Rosenbaum's affidavit affirmed on 26 August 2019, paragraphs 151-153; T366.30-366.34.
423. T355.5-T359.32.
424. Mr Rosenbaum's affidavit affirmed on 25 February 2019, paragraphs 215-217; Mr Rosenbaum's affidavit affirmed on 26 August 2019, paragraphs 151-153; T366.35.
425. T364.27-364.34.
426. T382.8-382.19.
427. See [24]-[26] above; pp 2-3, 5, 58 and 64 of Tab A of Exhibit ER-1 to Mr Rosenbaum's affidavit sworn on 25 February 2019 (Exhibit 2); T584.8-591.23.
428. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 250-254, 304-307.
429. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 269-272; T579.39-579.47.
430. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 304-307
431. T583.35-591.22
432. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 253.
433. Claim, paragraph 86.
434. Defence, paragraph 87.
435. T580.5-580.10.
436. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 305.
437. T769.12-769.26.
438. Tab A of Exhibit ER-1 to Mr Rosenbaum's affidavit sworn on 25 February 2019, p 95.
439. See the parties' proposed partnership accounting orders in MFI-9, paragraph 8 and MFI-10, paragraph 2(c).
440. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 201-204; T355.45-359.27.
441. Item 92 of schedule MFI-1 to the referee's report (Exhibit 1).
442. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 201-204; T355.45-359.27.
443. T355.45-359.27, especially at 359.5-359.27.
444. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 321, 351 and 362.
445. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 338-339 and 362.
446. Tab M of Exhibit ER-1 to Mr Rosenbaum's affidavit sworn on 25 February 2019 (Exhibit 2).
447. See [183] and [197] above.
448. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 299-310.
449. Item 83 of schedule MFI-1 to the referee's report (Exhibit 1); tabs AA and AB to Exhibit ER-2 to Mr Rosenbaum's affidavit sworn on 25 February 2019 (Exhibit 3, pp 323-324).
450. T393.5-393.40.
451. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 154-156.
452. Defence, paragraph 50. I note that this contention was not the subject of any specific claim for relief.
453. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 383-387.
454. T557.
455. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 383 and 392.
456. Items 503, 664 and 729 of schedule MFI-4 to the referee's report (Exhibit 2).
457. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 388.
458. Plaintiff's written submissions dated 21 May 2020, paragraph 282; closing submissions at T777.31-778.5.
459. See [28] above; T779.5-779.10.
460. T844.25-845.19.
461. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 291-301 and tab 79 of Exhibit JB-2 to that affidavit (Exhibit 18, p 345).
462. Mr Rosenbaum's affidavit sworn 26 August 2019, paragraphs 134-150.
463. Tab 22 of Exhibit ER-3 to Mr Rosenbaum's affidavit sworn 26 August 2019 (Exhibit 4, pp 62-63).
464. Mr Rosenbaum's affidavit sworn 26 August 2019, paragraphs 137 and 141.
465. T399.44-400.10, 400.35-401.5.
466. T401.3-401.25, 404.1-404.29.
467. Mr Rosenbaum's contention in paragraph 142 of his affidavit sworn on 26 August 2019; plaintiff's written submissions dated 21 May 2020, paragraph 286; T774.17-774.25.
468. Tab M of Exhibit ER-1 to Mr Rosenbaum's affidavit sworn on 25 February 2019 (Exhibit 2, pp 171-182).
469. Exhibit 2, p 175; Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraph 146.
470. See [124], [147]-[148], [164], [169] and [173] above.
471. Exhibit ER-1 to the affidavit of Mr Rosenbaum sworn on 25 February 2019 (Exhibit 2), p 190.
472. See [169 ] above.
473. Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 275-280.
474. Mr Baidarman did seek a declaration to the effect that all assets and funds of Ironwell were in fact assets of the Partnership. I have declined to make that declaration: see [359]-[360] above.
475. See [222] above.
476. Exhibits 28 and 29.
477. T775.21-776.776.19; T842.37-843.23.
478. Exhibit 28, paragraph 67.
479. T775.21-776.776.19.
480. T661.1-686.50.
481. T775.21-776.776.19.
482. T776.9-776.15.
483. Exhibit 28, paragraphs 47, 71 and 75; T674.8-674.20, 685.48-686.15.
484. Noting that paragraph 13(h) of the Cross-Claim corresponds with paragraph 8(h) of the defendant's proposed partnership accounting orders (MFI-10).
485. MFI-10.
486. T449.3-449.17.
487. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 149-153; Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 413-418.
488. Plaintiff's proposed partnership accounting orders (MFI-9), paragraph 3(c); defendant's proposed partnership accounting orders (MFI-10), paragraph 2(k).
489. Referee's report (Exhibit 1), section 12.1, page 45 items 96A, 139A, 158A and 168A.
490. Order 1.6 made on 10 September 2018.
491. Plaintiff's written submissions dated 21 May 2020, paragraphs 261-266; Mr Rosenbaum's affidavit sworn 25 February 2019, paragraph 160.
492. Plaintiff's written submissions dated 21 May 2020, paragraph 266.
493. T780.29-780.31.
494. See [148]-[149] and [362] above.
495. See [485] above.
496. Exhibit 2, pp 195-211.
497. Mr Baidarman's affidavit affirmed 28 June 2019, paragraph 280.
498. See [222] above.
499. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraph 166; T205.28-205.36; T327.35-327.45.
500. T325.26-332.34.
501. Paragraph 13(a) duplicates paragraph 4C of the Cross-Claim with the exception of the claim for compound interest in paragraph 4C.
502. Tab 115 of Exhibit JB-2 to Mr Baidarman's affidavit affirmed 28 June 2019 (Exhibit 18), pp 590-598.
503. Plaintiff's written submissions dated 21 May 2020, paragraphs 259-260; T779.25-780.4.
504. Exhibit 2, pp 211-212.
505. Exhibit 2, pp 233-245.
506. Exhibit 2, pp 227-238.
507. T823.33-823.42.
508. T823.44-823.50.
509. T805.6-805.9.
510. Exhibit 18, pp 590-615.
511. Plaintiff's written submissions dated 21 May 2020, paragraphs 256-258; defendant's written submissions dated 21 May 2020, paragraphs 116-119; T825.34-826.3; T334.18-342.45.
512. Exhibit 14.
513. Mr Baidarman's affidavit affirmed 28 June 2019, paragraph 280.
514. See [124], [147]-[149], [169], [217], [518]-[519] above concerning how the net proceeds of the Merton Street project and Port Hacking Road project were applied.
515. Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 385-389, 397-403; Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 174-176.
516. Tab 110 of Exhibit JB-2 to Mr Baidarman's affidavit affirmed 28 June 2019 (Exhibit 18, pp 552-578); Page 17 of Exhibit WW1 to Mr Wawrzyniuk affidavit affirmed 28 June 2019 (Exhibit 20, p 17).
517. Exhibit 18, p 554; Exhibit 20, pp 17-23.
518. See [7(e)] above.
519. IPD Trust Deed, clause 1A(c)(i), (iii) and (v) and Schedule 1 (Exhibit 18, pp 557-558 and 578) and clauses 3-5 (Exhibit 18, pp 560-564).
520. IPD Trust Deed, clauses 3A-3D (Exhibit 18, pp 560-562); see also clause 5 (Exhibit 18, pp 563-564).
521. IPD Trust Deed, clause 3E (Exhibit 18, p 562).
522. IPD Trust Deed, clause 3D(f) (Exhibit 18, p 561).
523. IPD Trust Deed, clauses 3F-3G (Exhibit 18, p 562).
524. IPD Trust Deed, clause 4A (Exhibit 18, p 563); see also clause 5 (Exhibit 18, pp 563-564).
525. IPD Trust Deed, clauses 10B and 10C (Exhibit 18, p 573).
526. IPD Trust Deed, clause 20D (Exhibit 18, p 576).
527. IPD Trust Deed, clauses 20A-20C (Exhibit 18, p 576).
528. Tab 108 of Exhibit JB-2 to Mr Baidarman's affidavit affirmed 28 June 2019 (Exhibit 18, pp 490-520).
529. Omega Trust Deed, clause 2.1 (Exhibit 18, p 495).
530. Omega Trust Deed, clause 1.1 (Exhibit 18, pp 493-494).
531. Omega Trust Deed, clause 2.2(a) and (b) (Exhibit 18, p 495).
532. Omega Trust Deed, clauses 2.3 and 7.4 (Exhibit 18, pp 496-497, 514).
533. Omega Trust Deed, clause 2.5(a)-(b) (Exhibit 18, p 497).
534. Omega Trust Deed, clause 2.5(d) (Exhibit 18, pp 497-498).
535. Omega Trust Deed, clause 3.1 (Exhibit 18, pp 498-499).
536. Omega Trust Deed, clause 5.1 (Exhibit 18, pp 501-502).
537. Omega Trust Deed, clause 5.2(a) (Exhibit 18, p 502).
538. Omega Trust Deed, clauses 5.2(b) and (c) (Exhibit 18, p 502).
539. Omega Trust Deed, clause 6.3 (Exhibit 18, p 510).
540. Omega Trust Deed, clause 7.2 (Exhibit 18, p 512).
541. Mr Wawrzyniuk affidavit affirmed on 28 June 2019, paragraphs 1-3.
542. T695.1-695.11.
543. Mr Wawrzyniuk affidavit affirmed on 28 June 2019, paragraph 16.
544. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 174-176.
545. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraph 397-403.
546. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 563-583 and Exhibit JB2, tab 131 (Exhibit 18, p 653); Omega Unit Trust financial statements at Exhibit 21, pp 499-510; IPD Trust financial statements at Exhibit 31.
547. Exhibit WW3 to Mr Wawrzyniuk affidavit affirmed on 28 June 2019 (Exhibit 21).
548. Exhibit WW4 to Mr Wawrzyniuk affidavit affirmed on 28 June 2019 (Exhibit 22, pp 527-581).
549. Exhibit 31.
550. Exhibit WW5 to Mr Wawrzyniuk affidavit affirmed on 28 June 2019 (Exhibit 22, pp 582-872).
551. Exhibit WW7 to Mr Wawrzyniuk affidavit affirmed on 28 June 2019 (Exhibit 24).
552. This included tabs 112-113 of Exhibit JB2 to Mr Baidarman's affidavit affirmed on 28 June 2019 (Exhibit 18, pp 583-587); Exhibits WW9 and WW10 to Mr Wawrzyniuk affidavit affirmed on 28 June 2019 (Exhibits 26 and 27); Exhibits 5 to 10.
553. Mr Wawrzyniuk affidavit affirmed on 28 June 2019, paragraph 23; see also Exhibit WW3 to that affidavit (Exhibit 21) at pp 329-330, 345-346 and Exhibit WW9 to that affidavit (Exhibit 26), pp 1422-1423.
554. Mr Wawrzyniuk affidavit affirmed on 28 June 2019, paragraphs 32-40; T705.9-706.16, 711.12-714.15.
555. Exhibit 21, pp 414-415, 434-435, 457-458, 481-482.
556. Exhibit 21, pp 414-415, 434-435, 457-458, 481-482.
557. Exhibit 21, p 481 (closing balance as at end of 2008 financial year).
558. T250.30-252.50.
559. Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraphs 323-325 and pp 146-147 of Exhibit ER-3 to that affidavit (Exhibit 4).
560. Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraphs 326-330 and p 148 of Exhibit ER-3 to that affidavit (Exhibit 4); Page 113 of Exhibit ER-1 to Mr Rosenbaum's affidavit sworn on 25 February 2019 (Exhibit 2).
561. T693.26-702.35.
562. Mr Rosenbaum's affidavit sworn on 26 August 2019, paragraphs 332-335.
563. T693.26-702.35.
564. T696.1-696.30.
565. T703.1-703.41.
566. Exhibit 9. The signatures of the directors of Ironwell bear the date 24 April 2010.
567. Exhibit 9.
568. T703.43-705.8.
569. Including that new units were recorded as having been issued to each superannuation fund in June 2009 to convert entitlements to undistributed profits of the Omega Unit Trust into units, and a greater number of new units was issued to Baidarman Super than to Ironwell Super because some of the profits to which Ironwell Super was entitled were paid to it and drawn by Mr Rosenbaum as a pension: T726.5-727.19.
570. Mr Wawrzyniuk affidavit affirmed on 28 June 2019, paragraphs 37-38; T723.13-728.31.
571. Exhibit WW9 to Mr Wawrzyniuk affidavit affirmed on 28 June 2019 (Exhibit 26, p 1423); T723.13-725.42.
572. Page 149 of Exhibit ER-3 to Mr Rosenbaum's affidavit sworn on 28 August 2019 (Exhibit 4); T728.33-728.50.
573. T729.1-731.34; T743.8-743.30; Exhibit 33.
574. T786.49-793.31.
575. T856.5-856.36.
576. Exhibit 21, pp 457 and 481.
577. Exhibit 21, p 481.
578. Exhibits 6-9; Exhibit 21, p 481; Exhibit 26.
579. T717.30-722.17.
580. T857.1-860.49.
581. T715.48-716.29; T733.5-733.15; T734.10-734.15.
582. T250.30-256.30.
583. T734.26-736.5.
584. Cross-Claim Defence, paragraph 45; T720.40-721.6.
585. T226.16-230.40, 239.15-242.35; Exhibit 22, pp 845-860 at p 852; Exhibits 9-10.
586. T228.25-238.45; Exhibits 5 to 8.
587. See [592]-[593] above.
588. Account number ending #6506: Page 326 of Exhibit ER-2 to Mr Rosenbaum's affidavit sworn 25 February 2019 (Exhibit 3); T736.29-736.50.
589. Page 326 of Exhibit ER-2 to Mr Rosenbaum's affidavit sworn 25 February 2019 (Exhibit 3).
590. T738.25-783.44.
591. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 178-183; Mr Rosenbaum's affidavit affirmed 26 August 2019, paragraphs 304-307, 338-342; T250.4-250.30.
592. Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 545-550; T563.5-563.10, 572.18-578.10.
593. T264.12-270.10.
594. Mr Wawrzyniuk affidavit affirmed 28 June 2019, paragraph 30; T737.2-738.24.
595. Mr Wawrzyniuk affidavit affirmed 28 June 2019, paragraph 31; Mr Baidarman's affidavit affirmed on 28 June 2019, paragraphs 548-549.
596. Sidameneo (No 456) Pty Ltd v Alexander (No 2) [2012] NSWCA 87, especially at [14]-[16].
597. Plaintiff's written submissions dated 21 May 2020, paragraphs 223-234 (noting that the relevant item in schedule MFI-3 to the referee's report is item 13); Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 351 and 371; T776.35-779.4.
598. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 278-288
599. MFI-10.
600. MFI-10.
601. T208.45-209.26.
602. Defendant's proposed partnership accounting orders, paragraph 3 (insofar as it relates to items 3 and 4 of schedule MFI-3 to the referee's report).
603. See [283] above.
604. Mr Rosenbaum's affidavit sworn on 25 February 2019, paragraphs 309 and 312; Exhibit 2, p 56.
605. See [19]-[29] above.
606. See [284] above.
607. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 309, 313-317 and Exhibit 2, pp 15, 26, 41, 81.
608. See [284] above.
609. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 309, 318-319 and Exhibit 3, pp 330-331.
610. See [284] above.
611. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 309, 322-323 and 370; Exhibit 2, p 8; Mr Rosenbaum's affidavit sworn 26 August 2019, paragraph 297.
612. Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 530-535.
613. T645.38-648.34.
614. Exhibit 2, p 8.
615. See [285] above.
616. Mr Rosenbaum's affidavit sworn 25 February 2019, paragraphs 309, 324-326.
617. Mr Baidarman's affidavit affirmed 28 June 2019, paragraphs 167-175.
618. Plaintiff's written submissions dated 21 May 2020, paragraphs 220-221. This issue was not addressed in closing submissions.
619. Defendant's proposed partnership accounting orders, paragraph 8(d) (to the extent that it relates to item 14 in section 12.5 of the referee's report).
620. T814.14-814.20.
621. Meehan and Others v Glazier Holdings Pty Ltd (2002) 54NSWLR 146; [2002] NSWCA 22 at [13]-[15].
622. T846.26-847.5.
623. Meehan and Others v Glazier Holdings Pty Ltd, supra, at [65]-[66]; see also Re Tebbs (deceased) [1976] 2 All ER 858 at 863.
624. T864.40-867.5.
625. As to standing, see [94] above.
626. T802.9-803.4.

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