Deputy Commissioner of Taxation v Miraki

Applicable principles 5 The principles applicable to an application for leave to appeal from an interlocutory decision are well established. In general, the tests to be applied are: (a) whether, in all the circumstances, the decision is attended with sufficient doubt to warrant its being reconsidered by the Full Court; and (b) whether substantial injustice would result if leave were refused, supposing the decision to be wrong: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-400 per Sheppard, Burchett and Heerey JJ. The discretion to grant leave is not constrained by rigid rules. Leave to appeal has been granted where, for example, the questions posed for resolution on appeal "have general importance beyond the concerns of the parties": Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd (2008) 169 FCR 227 at [10] per Heerey, Moore and Tracey JJ. See also ACE Insurance Ltd v Trifunovski (2012) 291 ALR 46 at [7]-[9] per Flick J.

Background 6 The background to the impugned order is set out in the Reasons at [5]-[13] and may be briefly stated as follows. 7 By an originating application dated 18 March 2021, the Commissioner applied to the Court on 22 March 2021 to freeze Ms Miraki's assets pursuant to rr 7.32 and 7.35 of the Federal Court Rules 2011 (the Rules). The Commissioner's application was made in the absence of Ms Miraki. 8 On 22 March 2021, after the ex parte hearing, a Judge of this Court (Wigney J) made various orders, including an order pursuant to rr 7.32 and 7.33 of the Rules against Ms Miraki in the terms set out in Annexure "A" to those orders. 9 By consent of the parties, the operation of the freezing orders made by Wigney J was extended by another judge of the Court (Perry J) on 29 March 2021. The orders were subsequently varied by consent by orders made on 16 April 2021, 26 April 2021, 14 May 2021, 24 May 2021 and 9 September 2021. 10 On 28 October 2021, there was a hearing before the primary judge of two interlocutory applications: (a) The first was an application by the Commissioner for summary judgment against Ms Miraki under r 26.01(1) of the Rules. Summary judgment was granted: Deputy Commissioner of Taxation v Miraki (Summary Judgment) [2021] FCA 1361. This application is not relevant for present purposes and can be put to one side. (b) The second was an application by Ms Miraki dated 10 August 2021 seeking, among other things, the discharge of the freezing orders. At the beginning of the hearing of that interlocutory application, Ms Miraki sought leave to amend the interlocutory application as had been foreshadowed in her written submissions filed before the hearing. The Commissioner opposed leave to amend the interlocutory application. The primary judge granted leave to Ms Miraki to file and rely upon the proposed amended interlocutory application: Deputy Commissioner of Taxation v Miraki (Application to Amend) [2021] FCA 1362 (the Amendment Reasons). Relevantly for present purposes, the amendments included the insertion of the following paragraph in the orders sought by Ms Miraki: 1A. An order that the [Commissioner] remove, or cause to be removed, all notifications of the Freezing Order on title to Mrs Miraki's real property, within 3 days. 11 The evidence before the primary judge included title searches in relation to two of three properties that were still owned by Ms Miraki. The "Second Schedule" in the two title searches referred to the number of "notifications" in the schedule and then set out various interests or encumbrances affecting the title, usually by reference to a distinctive number. The two title searches contained, in the Second Schedule of each, the following "notification" as the last notification: AQ898651 ORDER OF COURT 12 Also in evidence before the primary judge was a Form 11R "Request", bearing the number AQ898651R, which included the following: Pursuant to order 5(a) made by Justice Wigney (Federal Court of Australia Proceedings NSD 4000/2021) on 22 March 2021 (copy attached) the registered proprietor of the lands at 605/856358, 20/SP92709, 21/SP92709, 50/SP82892, 200/1225049, being Sepideh Miraki, must not in any way dispose of, deal with or diminish the value of her assets in Australia up to the unencumbered value of $5,844,558.03. The assets include the lands at 605/856358, 20/SP92709, 21/SP92709, 50/SP82892, 200/1225049. Pursuant to the Court's orders, any person who knows of the orders and does anything which helps or permits the registered proprietor, Sepideh Miraki, to breach the terms of the orders may be subject to punishment. 13 Ms Miraki's evidence before the primary judge was that purchasers (and, where relevant, their financiers) were hesitant to exchange contracts or complete sales because of the "notifications" in the Second Schedule of the existence of the "order of court". 14 The Registrar-General was not a party to the proceeding before the primary judge and neither party applied to have the Registrar-General joined as a party.

The Reasons and the impugned order 15 The primary judge dealt with the question whether the freezing orders should be discharged at [14]-[39] of the Reasons. The primary judge was satisfied that there was a danger of dissipation of assets sufficient to warrant the making (or continuation) of freezing orders: at [37]. 16 The primary judge next considered, at [40]-[56], whether an undertaking proffered by Ms Miraki should be accepted in place of the freezing orders. His Honour did not accept that the form of undertaking proffered by Ms Miraki was an undertaking that provided equivalent or similar protection to the freezing orders as varied: at [55]. 17 The primary judge also considered, at [68]-[90], whether variations to the freezing orders should be made. This part of the Reasons is not relevant for present purposes. 18 The part of the Reasons of central relevance for present purposes is [57]-[67], where the primary judge considered the dealings or notifications on the Register. In essence, Ms Miraki contended that the notifications recorded on the Register had caused impediment and delay in the sale of her properties and consequent loss or damage: see the Reasons at [57]-[58]. 19 The primary judge set out s 31B of the Real Property Act 1900 (NSW) (RPA), which provides: 31B THE REGISTER (1) The Registrar-General shall cause a Register to be maintained for the purposes of this Act. (2) The Register shall be comprised of - (a) folios, (b) dealings registered therein under this or any other Act, (c) the record required to be kept pursuant to section 32(7), (d) instruments of a prescribed class, and (e) records required by the regulations to be kept as part of the Register. (3) The Register may be maintained in or upon any medium or combination of mediums capable of having information recorded in or upon it or them. (4) The Registrar-General may, from time to time, vary the manner or form in which the whole or any part of the Register is maintained. 20 The primary judge also set out s 32 of the RPA, which provides: 32 FOLIOS OF THE REGISTER (1) The Registrar-General creates a folio of the Register for land by making a record of - (a) a description of the land and of the estate or interest therein for which it is created, (b) a description of the proprietor for the time being of the estate or interest and the fact that any such proprietor is a minor if the Registrar-General knows that to be the case, and (c) such particulars, as the Registrar-General thinks fit, of - (i) other estates or interests, if any, affecting the land, and (ii) other information, if any, that relates to the land or any estate or interest therein and is included in that record pursuant to this or any other Act (including an Act of the Parliament of the Commonwealth) or an instrument made under any such Act, and by allocating a distinctive reference to the record so made. … (6) The Registrar-General shall have, and shall be deemed always to have had, power to cancel in such manner as the Registrar-General considers proper any recording in the Register that the Registrar-General is satisfied does not affect the land to which the recording purports to relate. (7) The Registrar-General shall maintain a record of all dealings recorded in, or action taken in respect of, a computer folio and such other information, if any, relating to the folio as the Registrar-General thinks fit. 21 The primary judge noted that it was submitted by Ms Miraki, and accepted by the Commissioner, that the Commissioner had no equitable interest in Ms Miraki's land and that the freezing orders operated in personam and did not create any proprietary interest in Ms Miraki's land: see the Reasons at [57]. 22 The primary judge noted that the only provision relied upon by the Commissioner as entitling the Registrar-General to record on the Register the existence of the freezing orders was s 32(1)(c)(ii): see the Reasons at [61]. The primary judge also stated that no argument was advanced, either in written submissions or in argument, as to how the information "is included in that record pursuant to [the RPA] or any other Act (including an Act of the Parliament of the Commonwealth) or an instrument made under any such Act" for the purposes of s 32(1)(c)(ii): see the Reasons at [61]. 23 The primary judge at [62] stated that the parties had approached the proceedings on the basis that the Registrar-General had registered the freezing orders in respect of each of Ms Miraki's properties as a "dealing registered … under [the RPA] or any other Act" - see s 31B(2)(b). The primary judge stated that this was reflected in the parties' agreed notations to consent orders and was consistent with the notifications appearing on the title searches in the Second Schedule. It was also consistent with the terms of the form of document (being a "Request") to which the relevant reference number in the title searches refers. 24 The primary judge then set out the definition of "dealing" in s 3(1)(a) of the RPA (noting that the word "dealing" is also defined for the purposes of Pt 7A of the RPA in s 74A(1)). 25 The primary judge noted that Pt 7 of the RPA is entitled "Dealings" and is divided into three divisions entitled "Transfers", "Leases" and "Mortgages, Charges and Covenant Charges", and that no submissions were advanced by the Commissioner as to how the freezing orders were a "dealing" or what, if any, Act permitted or required them to be registered under the provisions of the RPA. 26 The primary judge then reasoned as follows at [65]-[67]: 65 As mentioned, there was no dispute between the parties that the freezing orders did not create any proprietary interest in the Commissioner and it was not suggested that the Commissioner had any legal or equitable interest in any of Ms Miraki's land. It should also be observed that the Commissioner accepted that the freezing orders did not, and do not, necessarily prevent Ms Miraki from disposing of, or encumbering, her real property in all circumstances. The Commissioner accepted that Ms Miraki was (and is) entitled to dispose of, or encumber, real property under paragraph 5 provided she did so in a way which complied with that order. 66 The practical effect of the recording on the Register of the existence of the freezing orders in relation to each of the properties owned by Ms Miraki (initially 5 properties), was that she was required to ask the Commissioner to agree to remove the "notification" or dealing in order to sell the property, even though she may not in fact have been prevented by the freezing orders from disposing of the property and notwithstanding that the Commissioner had no proprietary interest in the land. 67 The Commissioner should be ordered to take all necessary or reasonable steps within a reasonable time to remove the "dealing" numbered AQ898651 which is recorded on the Register in relation to the three properties still owned by Ms Miraki. There is no evidence before the Court as to what a reasonable time would be, although it is difficult to imagine a request for removal could not be made within a very short period of time if not almost immediately. The parties will be provided a short period to agree orders to give effect to the Court's conclusion in this regard and I will reserve liberty to apply generally. 27 We note that the primary judge did not expressly hold that the Registrar-General did not have power to record the notification. 28 Subsequently, on 10 November 2021, the primary judge made orders to give effect to his reasons for judgment. The impugned order is paragraph 5, which was in the following terms: 5. The applicant is to lodge with the New South Wales Land Registry Services a Request in the form of Annexure "A" to these orders within 7 business days of the date of the entry of these orders. 29 Annexure "A" to the orders was in the form of a Request under the RPA. The Request referred to registered dealing AQ898651 and provided the title details of the three properties of Ms Miraki. In the space provided for "Text of Request", it was stated: Pursuant to Order 4 and Annexure "A" of the annexed Orders made by Justice Thawley (Federal Court Proceedings NSD253/2021) on [insert relevant date], dealing AQ898651 be removed from title for the above properties.

Subsequent events 30 The Commissioner subsequently filed a Request for the removal of the notifications. The notifications have been removed from the Register. However, if successful in the present application and the appeal, the Commissioner would wish to lodge a fresh Request that a notification of the freezing orders be recorded on the folios for each of Ms Miraki's three properties.

The proposed grounds of appeal 31 The Commissioner's amended draft notice of appeal contains three proposed grounds, which are in substance as follows: (a) The primary judge erred in ordering that the Commissioner lodge with the LRS a Request in the form of Annexure "A" to those orders within 7 business days, having found in the Reasons that the Commissioner should be ordered to take all necessary or reasonable steps to remove the dealing numbered AQ898651, which had been placed by the Registrar-General on the titles of the relevant properties owned by Ms Miraki on the apparent basis that the Registrar-General did not have power to record the notification on the titles of Ms Miraki's properties (ground 1). (b) The primary judge erred in granting Ms Miraki leave to amend her interlocutory application filed on 10 August 2021 on the day of the hearing in circumstances where: (i) the appellant opposed the granting of leave; (ii) the primary basis of Ms Miraki's application for the order was that there was no law which permitted the Registrar-General to record the notification on the Register in relation to Ms Miraki's properties; and (iii) the Registrar-General was not a party to the proceeding and was not given an opportunity to be heard on the application, (ground 2). (c) The primary judge erred in making the order in circumstances where the gravamen of the act complained of by Ms Miraki in seeking the order was an act of a third party, the Registrar-General, exercising powers conferred by the RPA (ground 3). 32 In the Commissioner's proposed grounds of appeal and in his submissions, the impugned order is described as a mandatory injunction.

Consideration 33 In support of the application for leave to appeal, the Commissioner submits that the decision of the primary judge is attended with sufficient doubt to warrant its reconsideration on appeal. The Commissioner submits that the decision concerns an issue of principle about the maintenance of the Register under the RPA, and as such has significance to persons well beyond the parties to these proceedings, and may be fairly characterised as a matter of public importance. 34 The focus of the Commissioner's written outline of submissions was the contention that the primary judge had implicitly held that the Registrar-General did not have power to record the notifications of the freezing orders on Ms Miraki's properties. However, in oral submissions, the focus of the Commissioner's argument shifted to the judgment of the High Court in Smethurst v Commissioner of Police (2020) 376 ALR 575 (Smethurst), a case not cited to the primary judge, and not referred to in the Commissioner's outline of submissions. In essence, the Commissioner submitted orally that the primary judge did not have power to grant the mandatory injunction because Ms Miraki did not have a legal right that the injunction would protect, relying on Smethurst at [77], [85] per Kiefel CJ, Bell and Keane JJ and [155] per Nettle J. The Commissioner also referred to Smethurst at [130] per Gageler J, [184]-[185] per Gordon J and [205] per Edelman J. The Commissioner relied on Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2012) 246 CLR 379 in support of the proposition that, although the point was not raised below, leave to raise the point on appeal should be granted. In response to a question as to which ground in the amended draft notice of appeal covered this contention, senior counsel for the Commissioner said that it was encompassed in ground 1. 35 The Commissioner also submitted that the primary judge should not have made the impugned order in circumstances where the Registrar-General was not a party. This was said to be because the primary judge's decision affected the powers and duties of the Registrar-General. (As noted above, neither party submitted to the primary judge that the Registrar-General needed to be joined.) 36 The Commissioner also submitted that the impugned order should not have been made in circumstances where the RPA contains a specific process for review of the Registrar-General's decisions: see ss 121, 122. 37 In our view, this is not an appropriate case for a grant of leave to appeal. 38 First, to the extent that the Commissioner's application for leave to appeal is premised on the primary judge having implicitly held that the Registrar-General did not have power to record the notifications, we do not accept that premise. While it is true that Ms Miraki made a submission to the primary judge to this effect (as noted by the primary judge at [58]), in our view the primary judge did not (expressly or implicitly) express a view as to whether the Registrar-General had power to record the notifications. Indeed, in the context of Ms Miraki's submission, the primary judge appears to have deliberately avoided expressing a conclusion on the point. It follows that we do not accept the Commissioner's submissions that, by reason of such a holding: (a) the decision of the primary judge is attended with sufficient doubt to warrant its reconsideration on appeal; or (b) the case raises an issue of principle of general public importance. It also follows that no question arises of possible inconsistency with DOQ17 v Australian Financial Security Authority (No 3) [2019] FCA 1488 at [213] per Perry J. 39 Secondly, the Commissioner's submissions based on Smethurst do not provide a sufficient basis for a grant of leave to appeal. As noted above, no submission along these lines was made to the primary judge. No satisfactory explanation has been provided as to why the point was not raised below. While leave to amend the interlocutory application below was granted on the day of the hearing, we do not consider this to provide a sufficient explanation. Further, the contention is not clearly raised in the amended draft notice of appeal or in the Commissioner's outline of submissions. As to the merits of the contention, we note that Ms Miraki had a legal right to transfer the relevant properties and that the freezing orders did not necessarily prevent her from doing so. In these circumstances, it is arguable at least that the impugned order sought to vindicate that legal right (albeit that it was not a legal right as against the Commissioner). For these reasons, the submissions based on Smethurst do not provide a sufficient basis for a grant of leave to appeal. 40 Thirdly, in relation to the Commissioner's contention that the Registrar-General needed to be joined as a party to the proceeding before the primary judge, in circumstances where neither party made such a submission to the primary judge, we are not satisfied that the decision of the primary judge is attended with sufficient doubt to warrant its reconsideration on appeal. We note that the primary judge made no findings about the powers of the Registrar-General and the order made by the primary judge was not an order that required the Registrar-General to do or refrain from doing anything. 41 Fourthly, in relation to the Commissioner's submission that there is a specific regime available to challenge a decision of the Registrar-General, it does not appear that any such submission was made to the primary judge. In these circumstances, we are not satisfied that the decision of the primary judge is attended with sufficient doubt to warrant its reconsideration on appeal. 42 Fifthly, insofar as the Commissioner challenges the primary judge's grant of leave to amend, we do not consider this to provide a sufficient basis to grant leave to appeal. It may be that this proposed ground of appeal does not seek to rely on any additional matters beyond those already addressed above. In any event, we do not consider the primary judge's grant of leave to amend to be attended with sufficient doubt to warrant its reconsideration on appeal. The substance of the issue regarding the notifications had already been raised (albeit in a different form) in Ms Miraki's original form of interlocutory application: see the Amendment Reasons at [6]-[7]. It was appropriate for the primary judge to grant leave to amend to enable the real issues in dispute to be determined. 43 Sixthly, we are not satisfied that any substantial injustice would result if leave to appeal were refused, assuming the decision to be incorrect (being the second limb of the general test referred to above). There are freezing orders in place that restrict Ms Miraki's freedom to deal with her property. Assuming that Ms Miraki complies with the freezing orders, no substantial injustice is caused by a refusal of leave to appeal. There is no sufficient basis to conclude that there is a real risk that Ms Miraki will seek to deal with the relevant properties (or any of them) in a way that breaches the freezing orders. 44 For these reasons, we are not satisfied that it would be appropriate to grant leave to appeal.

Conclusion 45 It was for the above reasons that we made the orders extending time to file the application for leave to appeal, and dismissing the application for leave to appeal, with costs. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Perram, Moshinsky and Hespe.