A woman who challenged a confiscation order imposed after her brother was convicted of drugs offences in an attempt to prevent the sale of a property in Edinburgh of which she claimed to be the “beneficial owner” has had her application rejected.
A judge in the Court of Session refused to vary the order after ruling that Farzana Ashraf failed to take the steps necessary to transfer the title from her brother to her, meaning there was “no basis” on which to exclude the flat from the order made under the Proceeds of Crime Act 2002.
Lady Wise heard that the respondent Mohammed Younas was convicted at the High Court in Glasgow in 2012 of being concerned in the supply of diamorphine, following which Lord Pentland made the relevant confiscation order in the sum of £126,000, of which £121,000 was in respect of the flat at 82 Polworth Gardens in Edinburgh.
At the confiscation proceedings the respondent, the interested party Farzana Ashraf and their sister Russian Ashraf all opposed the order being made, arguing that when deciding on the available amount for the court should exclude from the benefit calculation the value of the property, but the Lord Ordinary rejected that argument.
Thereafter, the interested party enrolled a motion under section 135(1) of the 2002 Act to recall or vary a subsequent interlocutor appointing an enforcement administrator to realise the property subject to the order made by Lord Pentland in 2014, to exclude the property so that it could not be disposed of by the administrator.
Ms Ashraf gave evidence in support of her application, explaining that her brother had purchased the property at Polwarth Gardens in 1990 but had been sequestrated in September 1993.
Servicing of loans
The Accountant in Bankruptcy had been appointed as his permanent trustee and following the respondent’s conviction for drugs offences Ms Ashraf and her sister put forward a proposal in terms of which they would buy the property from the Accountant in Bankruptcy.
They instructed solicitor Gordon Hamilton of the firm Garden Haig to act for them and agreement was reached that the sisters would purchase the equity in the property from the Accountant in Bankruptcy for £25,000, which was duly paid in two instalments in July 2002 and June 2003.
Ms Ashraf’s position was that she had accordingly become the beneficial owner of the property and that since 2003 she has serviced the two secured loans over the property, albeit Mr Younas continued to be the named debtor in respect of the loans he had initially taken out from the Nationwide Building Society, which continued to hold a standard security in respect of the loans.
In essence, Ms Ashraf’s position was that the relevant interlocutor of 8 March 2016 should be varied to exclude the property at Polwarth Gardens because the two loans to Nationwide secured by the standard security had both been serviced by her and her family jointly over the years.
She argued that she and her sister were beneficial owners of the property and so it should not be regarded as “free property” in terms of sections 121(7) and 149 of the 2002 Act.
Human rights claim
Ms Ashraf also submitted that the inclusion of 82 Polwarth Gardens in the confiscation order engaged Article 1 of Protocol 1 to the European Convention for the Protection of Human Rights (ECHR) and that she had a “reasonable expectation” that she would acquire heritable proprietorship of the property by means of a disposition following upon the missives.
She added that had applied in terms of section 63 of the Bankruptcy (Scotland) Act 1985 to Edinburgh Sheriff Court to have the Accountant in Bankruptcy reinstated so that a disposition transferring title could be signed and delivered to her.
However, on behalf of the Crown it was argued that Ms Ashraf’s evidence in relation tot he servicing of secured loans was “inconsistent” with that she had given at the hearing before Lord Pentland.
It was submitted that she had failed to produce any reliable evidence that would entitle the court to conclude that she has serviced by payment of interest either of the two loans.
Turning to the decision not to take title to the property, counsel pointed to the opinion of Lord Pentland, which “clearly recorded” that Ms Ashraf had claimed at the earlier hearing that Mr Hamilton had “acted contrary to his instructions” in not completing title for her and her sister, but her position now was “diametrically opposed” to that taken at the previous proof.
She could have obtained title simply by asking her brother to sign a disposition in her favour at any time between 2004 and 2011 and had confirmation that she could do so from the Accountant in Bankruptcy in 2013/2014, but she failed to do so.
The judge concluded that there is no basis on which to vary the order and accordingly refused the application.
In a written opinion Lady Wise said: “There are a number of factors that all support a conclusion that the Polwarth Gardens property does not on the face of it fall to be regarded as property of the interested party that can be retained or recovered or recovered by Ms Ashraf such that a departure from the mandatory direction would be justified or appropriate. These include the absence of any direct evidence as to who has been servicing the secured loans over the property since 2003, the decision taken by Ms Ashraf and her sister not to insist on taking title to the property during the whole period since then and Ms Ashraf’s evasiveness in evidence in relation to the circumstances in which she has not previously pursued the matter of obtaining title to the property.
“The title has remained throughout in the name of her brother Mr Younas who is not in a position to recover it. I accept the submission of counsel for the petitioner that it can be inferred that the likely outcome of granting the orders sought by Ms Ashraf in this Minute would be that the title to the property would continue to be held by her brother. The sisted sheriff court application to reappoint the Accountant in Bankruptcy, raised recently, is far too little too late to persuade me that the minuter’s intention has ever been to take title to this property.”
The argument presented by Ms Ashraf in terms of Article 1 of Protocol 1 ECHR also failed, as it did before Lord Pentland.
The judge added: “She was advised by the Accountant in Bankruptcy in 2014 but prior to the Confiscation Order being made that Mr Younas could transfer title to her and her sister, yet she did not pursue that while also claiming to the court that Mr Hamilton had failed to take steps to have the title transferred to her. She has been well aware throughout that she needed a disposition to obtain title and she has not pursued that in the face of advice that she could do so. Having chosen not to convert her personal right under the missives into a proprietorial right that could be given protection, she has no stateable human rights claim.”