Jindal v Liquidation Management Limited - [2023] NZHC 183

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-2342

[2023] NZHC 183

BETWEEN
GAUTAM JINDAL

Plaintiff

AND

LIQUIDATION MANAGEMENT LIMITED

First Defendant

IMRAN MOHAMMED KAMAL

Second Defendant

Hearing: 1 February 2023 (by VMR)

Counsel:

G Jindal self-represented Plaintiff A Ho for Defendants

Judgment:

13 February 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Application for leave to appeal)

JINDAL v LIQUIDATION MANAGEMENT LIMITED [2023] NZHC 183 [13 February 2023]

[1] Mr Jindal seeks leave to appeal my judgment of 9 September 2022 (the September judgment), ordering him to pay staged security.1

[2] In this proceeding, Mr Jindal alleges that Mr Kamal, as liquidator, charged excessive fees in 133 liquidations which Mr Kamal concluded immediately prior to 31 August 2021. Mr Kamal brought the liquidations to an end within a relatively short period as he was no longer able to practice as a liquidator. In respect of other companies where liquidations needed to continue, alternative liquidators were appointed.

[3] Mr Jindal alleges the Inland Revenue Department (IRD) was a creditor in almost all 133 liquidations. Based on the reports filed by Mr Kamal with the Companies Office, Mr Jindal calculates receipts in the 133 liquidations totalled
$3,521,000. Mr Jindal says Mr Kamal’s reports show liquidator’s fees and overheads of approximately $2,582,000, which Mr Jindal asserts were excessive and unreasonable.

[4] In this proceeding Mr Jindal seeks an order that the fees and expenses charged by Mr Kamal be fixed at a reasonable level and any excess amount be refunded.

[5] Three causes of action are alleged by Mr Jindal. In the first cause of action, Mr Jindal seeks leave to challenge Mr Kamal’s fees. That leave application has not been dealt with as this proceeding is stayed following Mr Jindal not paying the ordered security.

[6] In the September judgment, I expressed real doubts as to the likelihood of Mr Jindal being able to obtain leave given he has no connection whatsoever to the 133 companies in liquidation. More accurately, the issue is whether Mr Jindal can establish that the Court’s inherent jurisdiction to supervise liquidators continues in relation to challenges to liquidator’s fees and, if so, whether Mr Jindal has standing to invoke that jurisdiction.2 Mr Jindal is not within the class of people in s 284 of the

1 Jindal v Liquidation Management Ltd [2022] NZHC 2292.
2 Commissioner of Inland Revenue v Livingspace Properties Ltd (in rec and in liq) [2020] NZHC 1434, [2021] 2 NZLR 252.

Companies Act 1993 (the Act) who can seek leave to challenge a liquidator’s remuneration and so he must rely on the Court’s inherent jurisdiction (if it exists).

[7] The second cause of action is headed “breach of fiduciary duty” and alleges Mr Kamal owed a fiduciary duty to each of the 133 companies, their shareholders, directors and creditors. Mr Jindal alleges that by charging excessive fees and expenses, Mr Kamal breached that duty.

[8]…

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.

Continue reading Jindal v Liquidation Management Limited

Details

AGLC: Jindal v Liquidation Management Limited [2023] NZHC 183
Case: [2023] NZHC 183
Decision Date: 13 February 2023

CaseChat Overview and Summary

Gautam Jindal brought an action against Liquidation Management Limited and Imran Mohammed Kamal, seeking orders that Kamal's fees and expenses as liquidator were excessive and that any excess be refunded. Jindal further sought leave to appeal the Associate Judge's refusal to grant leave to challenge Kamal's fees. The Associate Judge had ordered Jindal to pay security for costs pending his application for leave to appeal. Jindal's application for leave to appeal was dismissed. The Associate Judge found Jindal had not identified an arguable error of law or fact, the matter did not warrant further delay and the interests of justice did not warrant granting leave to appeal. Jindal's claim was speculative and meritless. Jindal had not identified any basis for his claim, other than a bare assertion that Kamal's fees were excessive. Jindal's claim was not in the public interest and the Inland Revenue Department was more than capable of protecting its own interests. Jindal's case was so weak that the threshold for security had been met. Jindal had not identified any arguable errors in the Associate Judge's reasoning. The application for leave to appeal was declined and there was an award of costs in favour of the defendants.

The legal issues the court was required to decide were whether Mr Jindal had identified arguable errors of law or fact in the Associate Judge's conclusions, and whether the interests of justice warranted granting leave to appeal. The court found that Jindal had not identified any arguable errors, and that Jindal's claim was meritless, speculative and not in the public interest. The court concluded that the interests of justice did not warrant granting leave to appeal. The defendants were awarded costs on a 2B basis plus disbursements as fixed by the Registrar.

Orders