Yacoub v Commissioner of Taxation

THE FACTS 13 Since 1997 the applicants, who are husband and wife, have been involved in the building industry as self-employed contract builders. They carried out their work through a registered partnership known as the M&M Yacoub Partnership. Mr Yacoub did the building work and Mrs Yacoub's role was largely administrative. 14 The M&M Yacoub Partnership did contract building work for EJ's Constructions Pty Ltd (EJ's). After the completion of one job in 2002 EJ's owed the M&M Yacoub Partnership $700,000. Mr Yacoub was worried that the money would not be paid. The principal of EJ's, Mr Elias, offered the Yacoubs a share in a new development at Lydford Street, Wentworthville. The development involved the acquisition and redevelopment for 30 villas on four properties. The four properties were acquired by EJ's as to 75% as tenants in common with the applicants as joint tenants as to 25% as tenants in common. Despite obtaining development consent for the development in 2004 the work could not commence because of financing issues. 15 In the meantime in 2005, and without legal assistance, the applicants and EJ's entered into an agreement styled the Syndicate Agreement. The Syndicate Agreement included the following provisions: RECITALS: A. The parties hereto have agreed to constitute a syndicate for the purpose of Acquiring and developing real estate situated at and known as Lots 56-59 DP 12067,39-45 Lydbrook Street, Wentworthville NSW 2145. The erection thereon of a strata title building comprising 30 Units upon and subject to the terms and conditions appearing in this agreement. B. The parties agreed to place 103 Coleman st Merrylands, owned by Maroun and Madeline Yacoub, as a security to Capital Finance C. The parties agreed to increase Maroun and Madeline Yacoub share by a further 25% of the project. When Part B is completed, Maroun and Madeline Yacoub will own 50% of the project and EJ's construction the other 50%. … 1. DEFINITIONS AND INTERPRETATION 1.1 In this agreement the context permitting: … "Development" means the obtaining of development and building approval for residential strata title lots and the construction of those strata lots and all matters incidental thereto. "lots means the strata lots arising from registration of the strata plan. "property" means the property situated at 39-45 Lydbrook street, Wentworthville NSW 2145 being more particularly described as Lot 56-59 DP 12067. This property has an approved DA from Parramatta City Council, DA Number IE/0153/03 and determined 5/03/2004. "Strata Plan" means the strata plan of sub-division for the Property to be finalised by a surveyor and registered at the land title office during or immediately after the construction of the project. … 2. PURPOSE 2.1 The parties hereto (hereinafter called "The Syndicate Members") shall Constitute a Syndicate under the style "The Lydbrook street Wentworthville Syndicate (hereinafter referred to as "the Syndicate") 2.2 The parties hereto agree to co-operate in every reasonable respect for the purpose of undertaking the development on the property and then registering the Strata Plan and transferring the Lots to the various parties. The parties will at all times throughout the term of this Agreement, act towards each other and comply with their obligations under this Agreement with the utmost good faith. 2.3 It is agreed by and between the Syndicate Members hereto that the objects of the Syndicate are as follows: (a) To purchase the property (b) To demolish the fixtures and improvements presently erected on the property; (c) To appoint Mark Yacoub Builders Licence No 68592c as builder. (d) To each have a one 30th (1/30) share or a multiple thereof in the Property and development. (e) To prepare and register a Strata Plan in respect to the Development. (f) By way of partition at the completion of the Development and at the time registration of the Strata Plan the parties agree to each join in the transfer of Lots to be determined as hereinafter provided. 3. EXCLUSION OF PARTNERSHIP 3.1 No partnership shall exist between the parties and nothing contained in this agreement shall be construed as creating a partnership. 4. DEVELOPMENT AND MANAGEMENT 4.1 The parties shall act in good faith and co-operate with each other and devote their best endeavours to ensure that the Development is completed with all due diligence as soon as possible. 4.2 The parties agree that the cost of the acquisition of the land and the cost Associated with that acquisition attributable to each Lot as approved by Capital Finance and contributed by the referred syndicate member at previous time shall be as set out in the Second Schedule annexed hereto. 4.3 The parties hereto appoint Mark Yacoub as the Syndicate Manager and subject to this Agreement he shall manage the Development and keep all parties informed of all relevant activity in relation to the Development. … 4.5 The Syndicate Members agree to pay the amounts specified in Schedule 2 on demand by the Syndicate Manager. The Members acknowledge that payment of these amounts upon demand is critical to the Syndicate purpose and should any demand for payment not be satisfied and met within seven (7) days then the defaulting Syndicate Member's interest in the Syndicate and the Property shall be forfeited to the Syndicate Manager. The Syndicate Members hereby appoint the Syndicate Manager's their Attorney to execute any Transfer of other document which may be necessary to vest the Syndicate Members interest in this Agreement and the Property in the Syndicate Manager upon a Syndicate Member's default. Any moneys which have been paid by the Syndicate member in default will be refunded to that Syndicate Member less any and all reasonable costs incurred by the Syndicate Manager as a result of the Syndicate Member's default. 4.6 the Syndicate Members will each be liable and responsible for the cost of the acquisition of the Property and the building costs of the Development will be met by borrowings and the Syndicate Manager will arrange for financing for the building costs of the Development with the interest to be capitalised. The Syndicate Members agree to do all necessary matters, acts and things and sign any Mortgages or other documents necessary to secure the financing. The Syndicate Members agree that upon registration of the Strata Plan the financing of the Development costs will need to be repaid and all Syndicate Members agree with time being of the essence that within twenty-one (21) days of registration of the Strata Plan they will each be responsible for repayment of the financing for the Development costs in accordance with their respective interests in the Development and the Syndicate Members acknowledge and agree that they will need to be responsible for repayment of their portion of the Development financing either from a sale of their Lot or using their Lot as security to raise their share of the Development financing costs. The cost to be repayed to Capital Finance shall be 1/30 th (one thirtieth) of the Total loan and capitalised interest as calculated by Capital Finance. 4.7 Upon confirmation of payment to Capital Finance as described in the previous item 4.6, the syndicate member will receive the title for that particular unit and can manage with it or transfer it to another buyer. 4.8 The parties agree to sign all necessary documents and do all necessary Acts, matters and things to prepare and register a Strata Plan in respect of the Development at the conclusion of the building works. The parties will pay to the Syndicate Manager when requested each party's share of the costs of preparation and registration of the Strata Plan. 4.9 Upon registration of the Strata Plan the parties agree to sign all necessary transfers and other documents necessary to effect a partition so that each party receives the lot allocated to him in Schedule 2 before mentioned. In the event that any lot is valued at a greater value than any other lot in the development then the party entitled to that lot shall pay any stamp duty attributable to that lot having a greater value. 4.10 The parties agree that they will bear their respective potions of council rates, water rates and land tax on the property from the date of completion of the property until the partition hereinbefore referred to is effected. The parties shall pay their respective share of outgoings in proportion to their respective interest in the development and they shall pay their share of outgoings to the Syndicate Manager upon demand by the Syndicate Manager. … 13. PARTY'S INDEMNITIES 13.1 The parties acknowledge that under the Mortgage advance which they have obtained pursuant to Clause 4.6 that each of the parties will have a joint and several liabilities under the Mortgage to the Mortgagee notwithstanding that the parties interests in the development are unequal. Notwithstanding the provisions of the Mortgage the parties agree between themselves that they shall only be liable for that part of the borrowing and Mortgage advance as is equal to their interests in the development as set ort in Schedule 1. Should any party pay more than their share towards the borrowings or otherwise then as set out in Schedule 1, then that party is entitled to require the other party or parties to contribute towards the excessive payment and the other parties agree to indemnify and keep indemnified the party who has paid the extra amount for the over payment. 16 There is no Part B and no Schedules to the Syndicate Agreement. Consistent with the Commissioner's submission I consider that "Part B" in recital C means recital B so that it was intended that EJ's and the applicants would each own 50% of the property when the applicants provided their house as security for the proposed financing by Capital Finance Australia Limited (Capital Finance). Capital Finance, which had agreed to provide finance for the development, required a first registered mortgage over the Yacoubs' family home at Merrylands as a condition of the grant of finance for the development. According to Mr Yacoub this property was given as security for the finance as required. 17 On 18 July 2007 the applicants and EJ's entered into another agreement, this time with legal assistance. The 2007 agreement included the following provisions: INTRODUCTION A. The First Party and the Second Party are co-registered proprietors of the property known as 39-45 Lydbrook Street, Wentworthville (Folio Identifiers 56/12067 & 57/12067 & 58/12067 ("the property"). B. The First Party is co-registered proprietor as to 1/3rd share of the property and the Second Party is co-registered proprietor as to 2/3rd share of the property. … 2. AGREEMENT The First Party and the Second Party have agreed that notwithstanding their co-registered proprietor shares of the property, that they will have equal shares in the property as tenants in common and will share equally all costs, liabilities, mortgages and proceeds derived from any sale arising from the property. … 6. FURTHER ASSURANCE Each party will from time to time do all things (including executing all documents) necessary or desirable to give full effect to this Agreement. … 8. WHOLE AGREEMENT In relation to the subject matter of this Agreement: (a) this Agreement is the whole agreement between the parties; and (b) this Agreement supersedes all oral and written communications by or on behalf of any of the parties. 18 Recital B is wrong as the interests of the parties in the property as tenants in common were in fact EJ's as to 75% and the applicants as to 25% before the 18 July 2007 agreement. 19 In August 2007 the applicants also entered into a building contract with EJ's by which the owners of the property, the applicants and EJ's, appointed the M&M Yacoub Partnership as the builder. 20 On 21 August 2007 an entity, Myej Lydbrook, was registered for GST. Mr Yacoub completed the registration form which identified Myej Lydbrook as a limited partnership. Mr Yacoub was identified on the form as the authorised contact person for this entity. The financial details for the entity were provided as a bank account held in the name of EJ's. According to Mr Yacoub he was made a co-signatory on this account. Mr Yacoub said that he was unsure how to define the business venture Myej Lydbrook. He ticked the limited partnership box because it seemed to most closely approximate the relationship between the M&M Yacoub Partnership and EJ's "because these entities had only a limited involvement with each other and were not in business together in a normal partnership" like the M&M Yacoub Partnership. 21 The construction of the development occurred between October 2007 and December 2008. On behalf of Myej Lydbrook Mr Yacoub lodged eight business activity statements between 21 August 2007 and 20 September 2009. The first seven business activity statements claimed GST refunds totalling $336,260. These GST refunds were deposited into the EJ's bank account nominated for the financial dealings of Myej Lydbrook. The villas were sold between December 2008 and June 2009 thereby incurring a GST liability. For the purpose of the sales the applicants and EJ's entered into an agency agreement with a real estate agent. Under the terms of the financing agreement with Capital Finance the proceeds of sale were paid directly to Capital Finance until its debt was discharged. Thereafter, the proceeds were paid into the EJ's bank account. Otherwise the loan funds from Capital Finance were paid into the M&M Yacoub Partnership account and expenses were disbursed from that account as required for construction of the development. According to Mr Yacoub Myej Lydbrook did not enter into any contracts with any person and he "did not have the authority" to enter into contracts on EJ's' behalf or EJ's on behalf of the M&M Yacoub Partnership. Instead he obtained EJ's' consent to matters relating to the development. In addition, the applicants appointed an attorney for the purpose of exchanging contracts on their behalf in respect of the property. Contracts for sale of the villas were executed by EJ's and by the attorney for the applicants. 22 After the Commissioner issued a notice of assessment of GST liability to Myej Lydbrook in the amount of $611,203 the applicants paid to the Commissioner $305,601 in discharge of what they believed to be their 50% liability for GST. Mr Yacoub also arranged for the distribution of the proceeds from the development of some $2,152,212, including amounts at EJ's' direction. EJ's did not pay the other 50% of the GST owing and instead was placed under external administration. The Commissioner commenced proceedings against the applicants for recovery of the unpaid balance of the GST. On 11 May 2011 the Commissioner reissued a notice of assessment to Myej Lydbrook in the amount of $611,203 at the applicants' request, in response to which they lodged notices of objection which the Commissioner thereafter disallowed. The Commissioner disallowed the objections on the ground that the 18 July 2007 agreement "superseded all previous agreements" and that the arrangements between the applicants and EJ's made them partners for tax purposes, even if not partners in general law.

DISCUSSION 23 "The existence of a partnership is determined by reference to the true contract and intention of the parties as appearing from all of the facts and circumstances relevant to the relationship of the parties" (Amadio Pty Ltd v Henderson (1998) 81 FCR 149 at 172). 24 The indicia of the existence of a partnership include: - (i) a mutual interest in the carrying on of the business for the purpose of profit or gain (in this regard, it has been said that all partnerships involve a joint venture but not all joint ventures involve a partnership, for example, Whywait Pty Ltd v Davison [1997] 1 QdR 225 at 231), (ii) mutual confidence that the parties will engage in the venture for joint advantage only (for example, Birtchnell v Equity Trustees, Executors & Agency Co Ltd (1929) 42 CLR 384 at 407-408), (iii) sharing of profits and losses from the venture or a so-called community of profit and loss (Fenston v Johnston (1940) 23 TC 29 at 34), and (iv) mutual agency in the sense that each party is a principal of the business and may bind the other (for example, Momentum Productions Pty Ltd v Lewarne (2009) 174 FCR 268; [2009] FCAFC 30 at [36]-[44] (Momentum Productions)). 25 Statements of intention by the parties may be relevant but do not determine whether a partnership exists, as the issue is determined by reference to the "substance and reality of the transaction being adjudged to be a partnership" (Fenston v Johnston at 35-36). 26 In United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 at 15-16 Dawson J said: Perhaps in this country, the important distinction between a partnership and a joint venture is, for practical purposes, the distinction between an association of persons who engage in a common undertaking for profit and an association of those who do so in order to generate a product to be shared among the participants. Enterprises of the latter kind are common enough in the exploration for and exploitation of mineral resources and the feature which is most likely to distinguish them from partnerships is the sharing of product rather than profit. 27 In A.R.M. Constructions Pty Ltd v Federal Commissioner of Taxation (1987) 87 ATC 4790 Yeldham J said at 4805: I am clearly of the opinion that…there was merely a joint venture between the appellants to construct buildings, in contrast to an agreement to make profits for sharing, and it was the intention of the parties at all material times to retain the units and town houses so erected, except to the extent that sales might be necessary to repay moneys borrowed from lending institutions…In my view the parties associated together to produce a product, a building of units capable of partition between them, so that each could hereafter go their own respective ways. Their expressed intention so to do was duly manifested in what they thereafter did and achieved, and their agreement constituted in law something in the nature of a joint venture to construct the building, in contrast to an agreement to make profits for sharing, inter se. The only partnership for tax purposes related to such rental income as was received jointly before the date of the deed of partition… 28 According to Lindley & Banks on Partnership (19th ed, Sweet & Maxwell Ltd, 2010) at 5-23: …persons who agree to share profits and losses will normally find themselves treated as partners, whether or not they have themselves used that word. However, it is not the necessary corollary of such an agreement that each party will enjoy all the rights and privileges normally associated with partnership, e.g. a right to participate in the management of the business, to dissolve the firm, or to share in the value of goodwill on a dissolution. Rather, the partners' rights and duties will in each case be determined by the terms of their agreement… 29 It is common ground that, whatever else it might have been, the arrangements between the applicants and EJ's did not constitute them as a limited partnership. Mr Yacoub was mistaken in ticking that box on the GST registration form for Myej Lydbrook. 30 As the Commissioner acknowledged there is not much doubt that when the applicants and EJ's entered into the Syndicate Agreement in 2005 the legal relationship they thereby created did not exhibit any of the indicia of a partnership as defined in s 995-1 of the ITAA 1997. Section 995-1 contains two parts. The first refers to an association of persons carrying on business as partners. The second refers to an association of persons in receipt of ordinary income or statutory income jointly. The first is commonly called a general law partnership and the second a tax law partnership. As to the first, although not determinative the parties said they were not partners (cl 3.1 of the Syndicate Agreement). They intended that the development be partitioned at completion with particular lots vesting in each of them (cll 2.3(f), 4.7 and 4.9 of the Syndicate Agreement). They provided for several liability as between themselves for loan repayments (cll 4.6 and 13.1 of the Syndicate Agreement). As to the second, the Syndicate Agreement did not provide for them to receive income jointly. It provided for them to be vested with title to individual villas in the development. In these circumstances, mere co-ownership of the property could not constitute the applicants and EJ's as a partnership. 31 The central issue is the effect of the 18 July 2007 agreement which contains but one substantive provision, being cl 2. The effect of the 18 July 2007 agreement turns on its proper construction. 32 The 18 July 2007 agreement does not refer to the Syndicate Agreement. It contains a whole agreement provision in cl 8 but that provision operates only in relation to the subject-matter of the 18 July 2007 agreement. The parties disagree about the subject-matter of the 18 July 2007 agreement. The Commissioner's case is that cl 2 of the 18 July 2007 agreement displaces all of the provisions of the Syndicate Agreement concerning not only the respective shares of the parties in the property (instead of EJ's as to 75% and the applicants as to 25% the shares are EJ's as to 50% and the applicants as to 50% as tenants in common) but also the intended partition and transfer of villas in the completed development to the parties and, as between themselves, their several liability as to the repayment of the loan monies. According to the Commissioner cl 2 involves an agreement to carry on a venture, the development and sale of villas on the property, for the purpose of profit or gain with profits and losses from the venture being shared and thereby the parties to the agreement constituted themselves as a partnership whether or not they subjectively intended that their legal relations be of that character. The Commissioner also said that the parties in fact acted in accordance with cl 2 of the 18 July 2007 agreement in that none of the developed lots were partitioned and transferred to the parties. Instead, they were sold and the sale proceeds were disbursed first to repay the loan from Capital Finance and thereafter were jointly received by the parties into the partnership bank account to which they were both signatories. The 18 July 2007 agreement thus constituted the parties to it as a partnership both at general law and as a tax partnership as defined. 33 The applicants contend that cl 2 of the 18 July 2007 agreement has a more limited operation. It merely alters the respective shares of the parties in the property (instead of EJ's as to 75% and the applicants as to 25% the shares are EJ's as to 50% and the applicants as to 50% as tenants in common) and associated potential liabilities and entitlements, but otherwise does not displace the provisions of the Syndicate Agreement including cl 3.1 (that no partnership exists between the parties) and those clauses providing for partition of the development and transfer of lots to the parties equivalent to their respective shares. The applicants said this followed from the fact that the Syndicate Agreement existed and was not repealed by the 18 July 2007 agreement and the terms of cl 2 of the 18 July 2007 agreement. The essential character of the legal relationship between the parties as set out in the Syndicate Agreement thus remained intact after execution of the 18 July 2007 agreement. By that agreement there was no intended community of profit and loss and no mutual agency. Further, there was no income jointly received as only 17% of the sale proceeds went into the EJ's' bank account, the balance having been paid directly to Capital Finance. The arrangement thus was not a partnership of any kind. In any event, the exclusion of a "non-entity joint venture" from the definition of "entity" is relevant. The Commissioner erred in concluding that the 18 July 2007 agreement superseded the Syndicate Agreement and thus could not have been satisfied lawfully that Myej Lydbrook was not a "non-entity joint venture". As a matter of substance the requirements for a "non-entity joint venture" are satisfied. The applicants also supported this latter argument by reference to a public ruling, being Goods and Services Tax Ruling GSTR 2004/2 (the ruling). 34 There would be force in the applicants' principal submissions if the agreement of 18 July 2007 provided only that the parties had agreed that "notwithstanding their co-registered proprietor shares of the property, they will have equal shares in the property as tenants in common". A provision to this effect could have operated without altering the arrangements for partition, transfer and several liability of the Syndicate Agreement. However, cl 2 of the 18 July 2007 agreement is not so limited. It provides also that notwithstanding the parties' co-registered proprietor shares of the property they will "share equally all costs, liabilities, mortgages and proceeds derived from any sale arising from the property". 35 The parties entered into the 18 July 2007 agreement in circumstances where the applicants had been forced to provide their home as security for finance to enable the development to proceed and, as a condition of finance, all sale proceeds were to be paid directly by the purchasers of the villas to Capital Finance until the debt to Capital Finance had been repaid in full. It is apparent that cl 2 of the 18 July 2007 agreement reflected the circumstances prevailing in mid 2007. An agreement to "share equally all costs, liabilities, mortgages and proceeds derived from any sale arising from the property" is inconsistent with an arrangement for partition and transfer of lots in the completed development and several liability. Such an agreement contemplates the carrying out of the venture not for the purpose of a share in the product, being the completed villas on the subdivided lots, but for a share of the profits of the venture. 36 Contrary to the submissions of the applicants, there is no particular significance to the use of the word "proceeds" rather than "profits" in cl 2 of the 18 July 2007 agreement. The 18 July 2007 agreement, although drafted by a lawyer, is an unsophisticated document using imprecise language. Whatever the respective initial contributions of the parties they agreed that liabilities and sale proceeds (the latter being the only potential source of profit from the venture) should be shared equally. 37 Nor can it be said that the practice of the parties to obtain each other's consent to matters relating to the venture negatives the existence of mutual agency. Mr Yacoub chose to obtain the consent of EJ's to matters but it is another matter to conclude that he did not have authority to bind EJ's and vice versa. The limited power of attorney vested in Mr Yacoub as syndicate manager by cl 4.5 of the Syndicate Agreement relates to the circumstance of default only and does not provide to the contrary. In any event, as the Commissioner submitted, if subsequent events can be relevant at all, there is evidence of agency in the fact that Mr Yacoub completed and lodged all of the business activity statements on behalf of Myej Lydbrook. 38 I also do not accept the applicants' submission that because the sale proceeds were directed to be paid to Capital Finance until the debt to Capital Finance had been repaid in full rather than into the EJ's bank account there was no income jointly received. The income was jointly received by the parties; it was merely directed by them to be paid to Capital Finance. The fact of the direction is itself evidence of joint receipt of income. So too is the fact that after repayment of the debt the sale proceeds were paid into the EJ's bank account. 39 Irrespective of these matters, the real difficulty for the applicants remains cl 2 of the 18 July 2007 agreement and the agreement between the parties to the venture to "share equally all costs, liabilities, mortgages and proceeds derived from any sale arising from the property". By this provision the parties to the 18 July 2007 agreement placed themselves in a legal relationship by which they had: - (i) a mutual interest in the carrying on of the business for the purpose of profit or gain, (ii) mutual confidence that the parties will engage in the venture for joint advantage only, and (iii) sharing of profits and losses from the venture or a so-called community of profit and loss. As a matter of substance the parties thereby created between themselves a partnership both at general law and a tax law partnership as defined in s 995-1 of the ITAA 1997. 40 It is not necessary to conclude that the 18 July 2007 agreement superseded the Syndicate Agreement to reach this conclusion. As the applicants said the 18 July 2007 agreement does not refer to the Syndicate Agreement but pre-supposes its existence. It follows that the two agreements must be construed together, the later in time prevailing to the extent of any inconsistency because it represents the whole agreement of the parties in relation to its subject-matter. The subject-matter of the 18 July 2007 agreement is not just the respective shares of the parties in the property as tenants in common. The 18 July 2007 agreement also provides for a loss and profit sharing arrangement between the parties as to "any sale arising from the property". In context, this must mean the property as proposed to be developed in accordance with the Syndicate Agreement. It follows that all of the provisions of the Syndicate Agreement relating to shares in the property, the partition and transfer of the completed lots in the development, and several liability are overtaken by cl 2 which provides for a different arrangement to have effect. To that extent the Syndicate Agreement was varied by the 18 July 2007 agreement. The legal effect of the contractual arrangements between the parties must therefore be determined in accordance with the Syndicate Agreement which was varied by the 18 July 2007 agreement. In the context of the agreement as varied, the statement that no partnership exists in cl 3.1 is in the same position as the statement to the same effect in Fenston v Johnston. The statement is no longer consistent with the intention of the parties as objectively apparent from cl 2 of the 18 July 2007 agreement. 41 It is not necessary to have regard to any holding out of Myej Lydbrook as a limited partnership by the registration form for GST to support this conclusion. The conclusion arises on the proper construction of the 18 July 2007 agreement as a variation to the Syndicate Agreement. 42 I do not accept the applicants' submission that the short-term or isolated nature of the activity precluded it from being a partnership. In National Insurance Company of New Zealand Limited v Bray [1934] NZLR 67 at 70 Smith J saw no reason not to find a partnership in respect of an arrangement relating to the mere purchase of a single piece of land. It is not apparent to me why the nature of the venture in question in this case - the development and sale of 30 strata subdivided villas - should be seen as an indicator against the existence of a partnership. Nor is the fact that the parties may have created one legal relationship in 2005 and another in 2007. In fact, the development was carried out and completed pursuant to the arrangements between the parties as varied by the 18 July 2007 agreement. 43 Nor can I see the fact that EJ's did not itself carry out any particular activities relating to the development as an indicator against the existence of a partnership in this case. EJ's did not in fact take an active role because it did not need to, Mr Yacoub having been appointed the syndicate manager and the M&M Yacoub Partnership the building contractor. As the Commissioner also submitted the facts in this regard are no different from those considered in Momentum Productions at [52] where the Full Court considered asymmetry of no consequence at all. 44 The remaining issue is that of the non-entity joint venture. Given that the Commissioner's decision was based on a view that the 18 July 2007 agreement superseded the Syndicate Agreement when in my view it varied that agreement, I consider that the Commissioner's state of satisfaction should be treated as reviewable. It is arguable that the Commissioner's decision was based on mistake of law (that is, an erroneous construction of the 18 July 2007 agreement) and in those circumstances the decision should not be seen as immune from review (see Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360). 45 Unlike the Commissioner I do not see the requirement of "joint control" in para (a) of the definition of non-entity joint venture as causing the applicants difficulty. The issue is not the actual exercise of joint control but the existence of a contractual arrangement under which the economic activity is subject to the joint control of the parties. Consistent with my reasoning about the existence of a partnership, the contractual arrangements between the parties involved joint control which EJ's in large part contractually vested in Mr Yacoub. 46 The real issue in my view is para (b) of the definition of non-entity joint venture, which refers to a contractual arrangement that is entered into to obtain individual benefits for the parties, in the form of a share of the output of the arrangement rather than joint or collective profits for all the parties. By reason of the 18 July 2007 agreement and the variations it made to the Syndicate Agreement there was no such contractual arrangement between the parties. To the contrary, having regard to the 18 July 2007 agreement and the variations it made to the Syndicate Agreement, the contractual arrangement between the parties was for the sharing of the joint or collective profits for all the parties rather than individual benefits for the parties, in the form of a share of the output of the arrangement. My reasons for reaching this conclusion are the same as those set out above in respect of the partnership issue. Accordingly, there are no sustainable grounds for review of the Commissioner's decision that Myej Lydbrook was not a non-entity joint venture. The Commissioner's conclusion to this effect is correct. 47 The public ruling, irrespective of any complexities about its application and effect (despite an initial dispute the parties ultimately agreed that the public ruling could only take effect through s 105-60 of Sch 1 to the Taxation Administration Act), is of no assistance to the applicants. Even if it be assumed that the ruling applies and binds the Commissioner in this case, the provisions on which the applicants relied are beside the point. Paragraph 13 of the ruling does not deal with the definition of non-entity joint venture. Paragraphs 31 to 34 involve the same distinction as set out in para (b) of the definition of non-entity joint venture, in particular the distinction between an arrangement to share product and an arrangement to share profits. Paragraphs 49 and 50 also deal with the same distinction. Nothing in those paragraphs would affect the conclusions reached above. The inescapable fact is that by reason of cl 2 of the 18 July 2007 agreement the arrangement between the parties is characterised by profit sharing (irrespective of the use of the word proceeds, proceeds being the only potential source of profits from this development) and not product sharing. Purported reliance on the public ruling thus cannot assist the applicants. In any event nothing indicates that the applicants did anything "relying on the ruling". Even if it be accepted, as the applicants put it, that so-called "objective" reliance is sufficient (so that lack of knowledge of the ruling is irrelevant to the issue of reliance) the terms of the 18 July 2007 agreement do not in any way accord with the description of non-entity joint venture in the ruling. The applicants did not, objectively, act in accordance with the ruling and thus even on the applicants' approach to reliance, cannot call in aid the terms of the ruling. If it be necessary to say so, I am satisfied that the applicants knew nothing of the public ruling at any time before the hearing of this appeal and never did or refrained from doing anything with the ruling in mind. As such, in my view, the applicants could not have relied on the ruling as required by s 105-60 in any event. 48 For these reasons I am satisfied the Commissioner was correct to find that the arrangements involving Myej Lydbrook involved a partnership so that the applicants' objections had to be disallowed. The appeals to the Federal Court therefore must be dismissed. For the same reasons I am satisfied that the Commissioner was correct to determine the date of effect of deregistration of Myej Lydbrook as an entity for GST purposes should be 29 June 2009 rather than 21 August 2007. Accordingly, the decisions the subject of the applications to the AAT must be affirmed and those proceedings also be dismissed. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.