Bokhari v Bokhari [2014] NSWSC 1474

Supreme Court New South Wales

Medium Neutral Citation: Bokhari v Bokhari [2014] NSWSC 1474 Hearing dates: 22 October 2014 Decision date: 22 October 2014 Jurisdiction: Equity Division - Duty List Before: White J Decision: Refer to para [19] of judgment Catchwords: PROCEDURE - miscellaneous procedural matters - declarations - where plaintiff sought declaration that he is the beneficial owner of property of which the defendant is registered proprietor - where declaration consented to by defendant - whether appropriate for declaration to be made by consent Legislation Cited: Foreign Acquisitions and Takeovers Act 1975 (Cth) Cases Cited: Wallersteiner v Moir [1974] 1 WLR 991 BMI Limited v Federated Clerks Union of Australia (NSW Branch) & Ors (1983) 51 ALR 401 Category: Principal judgment Parties: Syed Maqsood Hussain Bokhari (Plaintiff) Samina Bokhari (1st Defendant) Syed Mazhar Bokhari (2nd Defendant) Representation: Counsel: M Friedgut (Plaintiff) Mentions (Defendants) Solicitors: ACA Lawyers (Plaintiff) Craig Milne & Company (Defendants) File Number(s): 2014/143878

Judgment 1HIS HONOUR: In these proceedings the plaintiff seeks an order that the first defendant, his sister-in-law, transfer a property in Blair Athol of which she is registered proprietor to him. He also seeks a declaration that he is the beneficial owner of the property and other consequential relief. 2On 1 October 2014 Rein J made orders by consent that the first defendant transfer the property to the plaintiff and made other orders in relation to related matters to which it is not necessary to refer. 3On that day his Honour declined to make a declaration by consent that the plaintiff is the beneficial owner of the property and declined to make an order that the proceeding be otherwise dismissed. His Honour stood the matter over until today. 4I am told that the reason his Honour gave for not making a declaration as to the beneficial ownership of the property was concern as to the possibility that such a declaration might affect the position of the National Australia Bank that holds a registered mortgage over the property. 5On 21 October 2014 the National Australia Bank confirmed that it has no objection to the making of the declaration sought provided that the orders note that it is agreed by the parties that the declaration does not in any way prejudice its registered mortgage over the property. 6Counsel for the plaintiff invites me to make that notation. The question is whether I should now make the declaration by consent as asked. 7It is not the practice of the court to make declarations of right between the parties merely on admissions or in default of pleadings. (See for example Wallersteiner v Moir [1974] 1 WLR 991 at 1029 and BMI Limited v Federated Clerks Union of Australia (NSW Branch) & Ors (1983) 51 ALR 401 at 412-413.) 8In the present case counsel for the plaintiff has read the plaintiff's affidavit which deposes to facts which would establish his beneficial ownership of the property. In particular, he confirms on oath that he had a number of telephone conversations with the defendant between July 2001 and April 2002 in which he says it was agreed that he would provide the defendant with the money for the deposit for the purchase of the Blair Athol property, that the property would be purchased with the money provided by him, that the defendants, that is the first defendant and her husband, the plaintiff's brother, would arrange for a house to be constructed on the property, that they would arrange for a mortgage and that the mortgage would be used to fund the balance of the purchase price and the cost of construction of the house, that the defendants could live in the property, that the plaintiff would pay half of the costs of the mortgage and that the defendants would contribute the other half in lieu of rent. 9The plaintiff exhibits to his affidavit documents including banking records which establish that he did provide the funds for the acquisition and which corroborates his version of the agreement. 10I am satisfied that, on the basis of the plaintiff's evidence, that subject to two possible qualifications it is appropriate to make the declaration by consent as sought. 11The two possible qualifications concern the position of the Chief Commissioner of State Revenue and any trustee in bankruptcy who might be appointed to the estate of the first defendant. I was frankly told that the reason for seeking a declaration by consent would be to support a contention that ad valorem stamp duty should not be levied on the transfer of the property from the first defendant to the plaintiff but rather that such a transfer should be only on the basis that it is transfer of trust. 12The evidence of the plaintiff, as I have said, does support that position. The Chief Commissioner would not be bound by the consent declaration and in the circumstances I do not think his position is a reason for not making the consent declaration. 13The other matter of concern is that there was evidence on the court file of an affidavit sworn by the plaintiff, apparently in support of an earlier application for interlocutory injunctive relief, which referred to the prospect that the first defendant has unsecured debts that might mean that she would file for personal bankruptcy. 14I assume that the first defendant is not bankrupt. Unfortunately there was no appearance for her by solicitor or counsel today before me, although the solicitors and counsel have been acting for the defendants up to today. I proceed on the basis that she is not bankrupt. 15I think the better view is that just as a trustee in bankruptcy can go behind a judgment debt in determining whether or not a creditor's debt should be admitted to proof in a bankruptcy, so a trustee in bankruptcy could go behind a consent declaration as to beneficial ownership, if there were proper grounds to do so, that is, if there were evidence available to the trustee which showed that the Court had proceeded on an incorrect basis in making the consent declaration sought. 16For these reasons, I am prepared to make the declaration by consent as sought. I have not been referred to evidence which establishes why the property was acquired in the name of the first defendant to be held on trust for the plaintiff. A possible reason may be that the acquisition by the plaintiff, who was then a resident in Ireland, might have required approval under the Foreign Acquisitions and Takeovers Act 1975 (Cth). 17If that were the reason, it would be corroborative of the plaintiff's case that he is the beneficial owner of the property. 18In the circumstances and time available, I have not endeavoured to check whether approval under that Act would be required. The plaintiff offers an undertaking to seek any necessary approval under that Act to his acquisition of the property. I will accept that undertaking. 19For those reasons, I make the following declaration and orders by consent. 1.First, by consent, and upon the plaintiff through his counsel undertaking to the Court to seek any necessary approval under the Foreign Acquisitions and Takeovers Act 1975 to his acquisition of the property referred to below, declare that the plaintiff is the beneficial owner of the property located at 6 John Kidd Drive, Blair Athol, New South Wales Folio Identifier 504 in Deposited Plan 1011339. 2.Note the agreement of the parties that the declaration in para 1 does not in any way prejudice the position of the National Australia Bank as registered mortgagee of the said property. 3.The proceedings be otherwise dismissed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 October 2014