Friday 23 September 2011

Unclean hands and the limitations of brine.

A not-so-recent image
of Roya Sheikholeslami.
Picture: University of
British Columbia 
SiN has always suspected that ripping salt out of water is not a high margin enterprise.

Why spend taxpayer's hard earned zapping the salty stuff to produce no-sodium H20? 

Not that the process of desalination was the reason behind the bankrupting of Roya Sheikholeslami, a highly credentialed, Iranian born Canadian chemical engineering scientist currently wowing them in Scotland.

After moving from Sydney to Edinburgh in the late 1990s, Roya's affairs were put in the hands of bankruptcy trustee Ray Tolcher.

Tolcher picked up the appointment in 2008 after Roya launched and lost an unlawful dismissal case against the University of NSW where she had previously worked. She also alleged sexual harassment.

To fund her action she used as security for costs a Kent street apartment, the title of which was in her name. 

Subsequent to those proceedings the University issued a statutory demand for its costs, hence Roya's plunge into bankruptcy and the passing of the apartment to the control of Tolcher.

But the most recent action, brought by Roya's sister Gita, has seen the court rule that Gita, who lives in Canada, is the actual owner of the apartment purchased back in 1997.

Trustee Tolcher didn't want the court making an order to that effect. The Kent Street property represents serious gravy for Roya's creditors.

In submissions Tolcher argued that Roya made the mortgage payments out of her own money and in Justice Yates' paraphrasing of the Tolcher submission: "It was only when a sequestration order was made against the bankrupt that she began to maintain that the property did not belong, beneficially, to her."

Tolcher also submitted that Gita's application must fail by reason of the application of the equitable doctrine of unclean hands, arguing that in seeking to establish her beneficial entitlement to the Kent Street property, it is inevitable that Gita must prove a mutual intention between herself and Roya to avoid or circumvent the application of the provisions of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (the FATA) or to mislead the bank that provided finance to facilitate the purchase of the property.

Justice David Yates did not agree that Tolcher had proved his contention and ruled Roya had purchased it on trust for her sister Gita, who provided the funds for the initial deposit. However the judge was not prepared to leave it at that.

"Although the respondent has not demonstrated that the defence of unclean hands applies in the present case, and the applicant has otherwise established a case for the relief she seeks, I do not think that the matter ends there. The fact that the required notice under s 26A of the FATA was not given remains a matter of some concern. I do not think that it should be ignored." See Justice Yates' Judgement.

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