El-Cheikh v Miraki [2021] NSWCA 271

El-Cheikh v Miraki [2021] NSWCA 271

The appeal was allowed because the evidence showed that the $450,000 cash provided by Mr El-Cheikh and applied substantially to settlement of the Castle Hill property was advanced pursuant to the Loan Agreement, not under a separate unrelated arrangement, and the primary judge erred in concluding otherwise. Although the unit trust was not established because subscription moneys were not paid, the parties' arrangements and the Loan Agreement supported declarations that Mr El-Cheikh was entitled to 50% of the amount payable to Ms Miraki on sale of the property, with Ms Miraki bearing all capital gains tax liability on any profit.

Jurisdiction
Australia
Judgment Date
08 November 2021
Procedural Posture
Appeal From Orders of the Equity Division, Real Property List, Supreme Court of New South Wales / Court of Appeal Judgment Allowing Appeal
Outcome
Appeal allowed.
Legal Topics
['loan Agreement' 'advance of Money' 'express Trusts' 'unit Trusts' 'beneficial Ownership' 'capital Gains Tax Liability' 'costs']
['contracts' 'equity' 'trusts' 'real Property'] ['loan Agreement' 'advance of Money' 'express Trusts' 'unit Trusts' 'beneficial Ownership' 'capital Gains Tax Liability' 'costs']

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Procedural Posture

Appeal From Orders of the Equity Division, Real Property List, Supreme Court of New South Wales / Court of Appeal Judgment Allowing Appeal

Legal Issues

  1. 1 ['Whether the primary judge erred in determining that Mr El-Cheikh did not advance moneys to Ms Miraki pursuant to the Loan Agreement.' 'Whether the primary judge erred in concluding that the Gladstone Rd Unit Trust was never constituted.' 'Whether the Unit Holder Agreement operated to appoint Ms Miraki as trustee of the Trust in place of Gladstone Rd Enterprises Pty Ltd.' 'Whether Mr El-Cheikh was entitled to a beneficial interest in the proceeds of sale of the Castle Hill property.']

Ratio Decidendi

The appeal was allowed because the evidence showed that the $450,000 cash provided by Mr El-Cheikh and applied substantially to settlement of the Castle Hill property was advanced pursuant to the Loan Agreement, not under a separate unrelated arrangement, and the primary judge erred in concluding otherwise. Although the unit trust was not established because subscription moneys were not paid, the parties' arrangements and the Loan Agreement supported declarations that Mr El-Cheikh was entitled to 50% of the amount payable to Ms Miraki on sale of the property, with Ms Miraki bearing all capital gains tax liability on any profit.

Court Disposition

Appeal allowed.

Orders

  • ['Allow the appeal and set aside orders 1 and 3 made in the Equity Division and entered on 17 December 2020.' 'Give judgment for Mr El-Cheikh as against Ms Miraki in the sum of $450,000.' 'Declare that Mr El-Cheikh is entitled to 50% of the amount payable to Ms Miraki on sale of the Castle Hill property.' 'Declare...