Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: El-Cheikh v Miraki [2021] NSWCA 271 Hearing dates: 14 July 2021 Date of orders: 8 November 2021 Decision date: 08 November 2021 Before: Bathurst CJ at [1];
Basten JA at [9];
Emmett AJA at [22]Decision: (1) Allow the appeal and set aside orders 1 and 3 made in the Equity Division and entered on 17 December 2020.
(2) Give judgment for Mr El-Cheikh as against Ms Miraki in the sum of $450,000.
(3) Declare that Mr El-Cheikh is entitled to 50% of the amount payable to Ms Miraki on sale of the Castle Hill property.
(4) Declare that in calculating that amount, Ms Miraki should bear all liability for capital gains tax arising from any profit on the sale of the property.
(5) Grant the parties liberty to apply to a judge of the Equity Division in respect of any matters arising out of these orders.
(6) Order that the defendants pay the plaintiffs’ costs of the proceedings in the Division.
(7) Order that the respondents pay the appellants’ costs in this Court.
Catchwords: APPEALS — Contracts — Whether loan advance paid pursuant to loan agreement — Error of primary judge — Where loan advance never repaid
EQUITY — Trusts and trustees — Express trusts — Unit trusts — Where trust documents not correctly executed — Where no unit holders had subscribed for units — Whether trust constituted — Whether unit holders had a right to trust property if trust constituted — error of primary judge — Where trust constituted and unit holders acquired beneficial interest in trust property
Legislation Cited: RealProperty Act 1900 (NSW), Pt 7A, s 74O
Cases Cited: Nil
Category: Principal judgment Parties: Omar El-Cheikh (First Appellant)
El-Cheikh Group Pty Ltd (ACN 614 664 158) (Second Appellant)
Sepideh Miraki (First Respondent)
Iconic Constructions Australia Pty Ltd (ACN 168 104 649) (Second Respondent)Representation: Counsel:
Solicitors:
M Condon SC (Appellants)
B Coles QC with D Allen (Respondents)
Cornwalls (Appellants)
William Roberts Lawyers (Respondents)
File Number(s): 2021/9403 Decision under appeal
- Court or tribunal:
- Supreme Court of New South Wales
- Jurisdiction:
- Equity – Real Property List
- Citation:
- Date of Decision:
- 9 December 2020
- Before:
- Kunc J
- File Number(s):
- 2017/156392
HEADNOTE
[This headnote is not to be read as part of the judgment]
Mr Omar El-Cheikh and Mr Navid Miraki Ardestani arranged to purchase a commercial office unit in 50/50 shares. It was agreed the property would be purchased by Gladstone Rd Enterprises Pty Ltd (the Trustee) – of which Mr Ardestani’s wife, Ms Sepideh Miraki, was the sole director, secretary and shareholder - as trustee of the Gladstone Unit Trust (the Trust). A Unit Holder Agreement was prepared with two equal unitholders: Mr El-Cheikh’s corporate vehicle, El-Cheikh Group Pty Ltd and the Miraki’s corporate vehicle, Iconic Constructions Pty Ltd and required a subscription fee of $50 to be paid by each unit holder.
Mr El-Cheikh provided $450,000 in cash before settlement and a Loan…
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- AGLC
- El-Cheikh v Miraki [2021] NSWCA 271
- Case
- [2021] NSWCA 271
- Decision Date
CaseChat Overview and Summary
The Court of Appeal was required to determine whether a loan advance of $450,000 paid by Mr El-Cheikh to Ms Miraki was made pursuant to a loan agreement and, if so, whether it had been repaid. Additionally, the court had to consider whether a unit trust had been validly constituted, notwithstanding that the trust documents were not correctly executed and no unit holders had subscribed for units, and whether, if constituted, unit holders had acquired a beneficial interest in the trust property.
The Court of Appeal found that the primary judge had erred in concluding that the $450,000 was not a loan. The court held that the evidence established the advance was made pursuant to a loan agreement and had not been repaid. Regarding the trust, the court determined that it had been validly constituted and that unit holders had acquired a beneficial interest in the trust property.
The appeal was allowed. The orders of the Equity Division were set aside, and judgment was entered for Mr El-Cheikh against Ms Miraki for $450,000. The court further declared Mr El-Cheikh's entitlement to 50% of the net proceeds from the sale of a specific property, with Ms Miraki to bear all capital gains tax liability on any profit from that sale. The defendants were ordered to pay the plaintiffs' costs in the Division, and the respondents were ordered to pay the appellants' costs in the Court of Appeal.
Orders
Orders of the court
(1) Allow the appeal and set aside orders 1 and 3 made in the Equity Division and entered on 17 December 2020.
(2) Give judgment for Mr El-Cheikh as against Ms Miraki in the sum of $450,000.
(3) Declare that Mr El-Cheikh is entitled to 50% of the amount payable to Ms Miraki on sale of the Castle Hill property.
(4) Declare that in calculating that amount, Ms Miraki should bear all liability for capital gains tax arising from any profit on the sale of the property.
(5) Grant the parties liberty to apply to a judge of the Equity Division in respect of any matters arising out of these orders.
(6) Order that the defendants pay the plaintiffs’ costs of the proceedings in the Division.
(7) Order that the respondents pay the appellants’ costs in this Court.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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