Vinod Rathore claimed to be partner to a 2011 purchase of a rural property on Monk Road at South Head near Helensville. Ilyas Bhatti claimed the property was his. In the High Court, Justice Lang preferred an innocent email exchange as proof of ownership, dismissing much of the oral evidence put forward as describing events that were highly improbable.
Deciding that the only evidence that could be relied on as accurate was an innocuous email exchange about further bank borrowing, Justice Lang ruled the two were in partnership and Mr Rathore was entitled to half the equity in Monk Road after repayment of cash contributions put in for the purchase.
The High Court was told the 35 acre Monk Road property was purchased in 2011 for $450,000. Mr Rathore put in $57,000 cash; Mr Bhatti and his wife $101,000. Westpac funding completed the purchase. Title was taken in the name of a newly formed company: Fivestar Properties Ltd. Richa Choubey, later to marry Mr Rathore, was sole director and shareholder of Fivestar.
Mr Rathore resigned from his job as a mortgage advisor and left to live in Australia shortly after the Monk Road purchase. This was to escape a Serious Fraud Office investigation into mortgage fraud, Mr Bhatti alleged. It came out in evidence at the mortgage fraud trial that Mr Rathore received several payments totalling some $6000 for his role in approving and recommending loans for those on trial.
Mr Bhatti claimed he was the beneficial owner of Monk Road; Fivestar held the property in trust for him, he said. He had no contact with Mr Rathore for some seven years following purchase and had repaid the $57,000 ‘loan’ Mr Rathore put up for the purchase, he said. He commonly put into the names of others properties he purchased; to protect his assets from creditors, he said.
Mr Bhatti put forward four supposedly independent witnesses supporting his claim that the $57,000 payment was a loan which had been repaid. Justice Lang rejected their evidence. These witnesses were variously financially dependent upon Mr Bhatti or hostile to Mr Rathore. When pressed, witnesses were evasive about the manner and circumstances of the supposed repayment. Reasons for why Mr Rathore may have needed the money were not plausible. Mr Bhatti had no written receipt for any repayment. He could not produce a power of attorney he claimed Ms Choubey had signed giving him control of Fivestar. Mr Bhatti’s failure to properly disclose all his assets in a relationship property dispute with his wife added to questions over his credibility, Justice Lang said.
The critical evidence proved to be email exchanges between Mr Rathore and Ms Choubey in late 2011 where they discussed Mr Bhatti’s demand that bank borrowing on Monk Road be increased. Mr Bhatti desperately needed cash to settle purchase of another property at Hayr Road in Mt Roskill. The email chain relayed discussions between Ms Choubey and Mr Bhatti suggesting further bank finance be obtained to buy out Mr Rathore’s share or that alternatively Monk Road be sold. Neither happened; the Hayr Road purchase fell over.
This email chain was unambiguous evidence that Mr Bhatti regarded Monk Road as a partnership asset with profits to be shared on sale, Justice Lang ruled.
Rathore v. Bhatti – High Court (21.06.21)
21.105