Gordhan v Kerdemelidis - [2013] NZHC 566

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2010-409-002982 [2013] NZHC 566

BETWEEN MUKESH GORDHAN Plaintiff

ANDSAVVA KERDEMELIDIS Defendant

Hearing: 25 and 26 February 2013

Appearances: B D Gustafson and K D Puddle for Plaintiff
G H Nation and M K Prendergast for Defendant

Judgment: 21 March 2013

JUDGMENT OF CHISHOLM J

A Judgment for the defendant.

B Costs to be resolved in terms of [100].

REASONS

Introduction

[1] On 23 August 2010 the plaintiff obtained a joint and several default judgment for US$4,012,260.47 plus interest (the foreign judgment) against the defendant and others in the Eighth Judicial District Court for Clark County, Nevada, USA (the State Court). The defendant resides in New Zealand and has never resided in Nevada.
The New Zealand Reciprocal Enforcement of Judgments Act 1934 does not apply.

GORDHAN V KERDEMELIDIS HC CHCH CIV-2010-409-002982 [21 March 2013]

[2] The plaintiff has issued this proceeding for the purpose of enforcing the foreign judgment against the defendant at common law. He seeks judgment against the defendant in the sum of US$4,082.667.89 which represents the foreign judgment plus interest to the date of filing. He also seeks interest from that time.

[3] The defendant opposes the claim on two grounds:

(a) He did not voluntarily submit to the jurisdiction of the State Court which accordingly had no jurisdiction over him;

(b) The foreign judgment was obtained by fraud.

Associate Judge Matthews directed that these two issues were to be split, with the jurisdiction issue to be determined first.1

[4] This judgment concerns the jurisdiction issue. If the defendant succeeds he will be entitled to judgment. On the other hand, if the plaintiff succeeds the ultimate outcome will depend on whether the foreign judgment was obtained by fraud.

Background

[5] The plaintiff was employed as chief operating officer2 by Compudigm International Limited (Compudigm), a New Zealand registered company. At all relevant times this company operated in Nevada and the plaintiff was based in that state, having relocated there to oversee the company’s operations.

[6] In May 2007 the plaintiff was suspended by the company pending an investigation into his conduct. Attempts to resolve the matter having failed, he issued proceedings against Compudigm in the State Court on 13 August 2007. These proceedings alleged, amongst other things, that the company had breached his
employment agreement.

1 Gordhan v Kerdemelidis HC Christchurch CIV-2010-409-002982, 6 August 2012.
2 And later also as chief financial officer.

[7] Ultimately the plaintiff was informed in a letter dated 11 December 2007 that his employment had been terminated for serious misconduct on the following grounds:

1.Attempting to gain personal advantage by conspiring with Mr Andrew Cardno3 to sign new employment contracts between yourselves without the appropriate delegated authority and Board knowledge; and

2.Knowingly authorising irregularities in Compudigm’s trade financing activities with ANZ bank and Silicon Valley Bank. We reserve our right to refer this matter to the appropriate authorities.

Those allegations were (and are) strongly denied by the plaintiff. The letter was signed by the defendant…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] NZHC 566
Decision Date: 21 March 2013

CaseChat Overview and Summary

The case of Gordhan v Kerdemelidis [2013] NZHC 566 involved the plaintiff, Mukesh Gordhan, seeking to enforce a foreign judgment against the defendant, Savva Kerdemelidis, obtained in the Eighth Judicial District Court for Clark County, Nevada, USA. The defendant opposed the enforcement of the foreign judgment on the grounds that he had not voluntarily submitted to the jurisdiction of the Nevada Court and that the judgment was obtained by fraud. The High Court of New Zealand, Associate Judge Chisholm, was tasked with determining whether the defendant had voluntarily submitted to the jurisdiction of the Nevada Court.

The court found that the defendant had not voluntarily submitted to the jurisdiction of the Nevada Court. The defendant's actions, including the filing of a notice of removal to the Federal Court, filing an appearance in the Federal Court, and the payment of costs ordered by the Federal Court, were all taken in the context of contesting the jurisdiction of the Nevada Court. The defendant's application for forum non conveniens and the motion to dismiss for lack of personal jurisdiction did not amount to a submission to the jurisdiction of the Nevada Court, as they were merely objections to the jurisdiction and did not involve the merits of the substantive claim.

The court held that the onus was on the plaintiff to establish that the defendant voluntarily submitted, or agreed to submit, to the jurisdiction of the State Court. The court applied the principles from Von Wyl v Engeler and Williams & Glyn's Bank PLC v Astro Dinamico Compania Naviera SA, which emphasised that a person who appears merely to contest the jurisdiction of the Court does not thereby submit to that jurisdiction. It must be shown that the person has taken some step which is only necessary or only useful if the objection has been waived or never been entertained at all.

As the defendant had not voluntarily submitted to the jurisdiction of the Nevada Court, the court found judgment in favour of the defendant. The issue of whether the foreign judgment was obtained by fraud was not considered, as the proceeding could not succeed without a voluntary submission to the jurisdiction. The court indicated that the defendant was likely to be entitled to costs on the 2B scale, subject to any submissions from counsel within one month of the delivery of the judgment.

Orders