Jindal v Liquidation Management Ltd - [2023] NZCA 413

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA128/2023
[2023] NZCA 413

BETWEEN	GAUTAM JINDAL Applicant
AND	LIQUIDATION MANAGEMENT LIMITED First Respondent IMRAN MOHAMMED KAMAL Second Respondent

Court:	Gilbert and Wylie JJ
Counsel:	Applicant in person A Ho for Respondents
Judgment: (On the papers)	1 September 2023 at 10 am

JUDGMENT OF THE COURT

ALeave to appeal the decision of the High Court fixing security for costs is declined.
BThe applicant must pay costs to the respondents jointly for a standard application on a band A basis with usual disbursements.

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REASONS OF THE COURT

(Given by Wylie J)

On 9 December 2022 Associate Judge Lester, in the High Court at Auckland, ordered the applicant, Gautam Jindal, to pay security for costs in respect of a claim that Mr Jindal has filed against the first respondent, Liquidation Management Ltd, and the second respondent, Imran Kamal.[1]
[1]Jindal v Liquidation Management Ltd [2022] NZHC 2292 [Security for costs judgment].
Mr Jindal sought leave to appeal the security for costs judgment as required by s 56(3) of the Senior Courts Act 2016. His application for leave came before the Judge on 1 February 2023 and, in a reserved judgment issued on 13 February 2023, the Judge declined the same.[2]
[2]Jindal v Liquidation Management Ltd [2023] NZHC 183 [Leave judgment].
Mr Jindal now seeks the leave of this Court under s 56(5) to appeal the security for costs judgment.

The factual background

Mr Jindal alleges that Mr Kamal, acting as a liquidator, charged excessive fees in 133 liquidations in the months leading up to 31 August 2021. He asserts that Mr Kamal brought the liquidations to an end within a relatively short period, as Mr Kamal anticipated that he would shortly be unable to practice as a liquidator. He says that the Inland Revenue Department (the IRD) was a creditor in almost all of the liquidations and that the amount received by Mr Kamal in his capacity as liquidator totalled $3,521,000. Mr Jindal alleges that Mr Kamal charged fees and overheads of approximately $2,582,000. He claims that Mr Kamal’s fees and expenses were unreasonable and he seeks an order that the Court fix them at a reasonable level and that any excess be refunded by Mr Kamal and/or his company, Liquidation Management Ltd.
Three causes of action are alleged:
(a)Mr Jindal seeks to rely on the High Court’s powers under s 284 of the Companies Act 1993 to supervise liquidations. He seeks leave to bring the proceeding pursuant to s 284(1).
(b)Mr Jindal alleges that Mr Kamal has breached “fiduciary duties” owed to each of the 133 companies, their shareholders, directors and creditors, by charging excessive fees and expenses.
(c)Mr Jindal alleges unjust enrichment by the respondents at the cost of the directors and shareholders of each of the 133 companies.

The High Court judgments

Three judgments assist in understanding the background to this matter. The first was given by Associate Judge Taylor and the second…

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 Ltd

Details

AGLC: Jindal v Liquidation Management Ltd [2023] NZCA 413
Case: [2023] NZCA 413
Decision Date: 1 September 2023 at 10 am

CaseChat Overview and Summary

Gautam Jindal sought leave to appeal the decision of the High Court in New Zealand, which ordered him to pay security for costs in a proceeding he had filed against Liquidation Management Ltd and Imran Kamal. The Court of Appeal, comprising Gilbert and Wylie JJ, declined the application for leave. The applicant's claims included that Kamal, acting as a liquidator, charged excessive fees for 133 liquidations, breached fiduciary duties, and acted in an unjust enrichment manner. The High Court Judge found all claims had little to no prospect of success and ordered security for costs, which the applicant sought to appeal. The Court of Appeal held that the application for leave to appeal did not raise any question of law or fact capable of bona fide and serious argument. The Court noted that the security for costs order was an exercise of the Court's discretion, balancing the interests of the parties, and the Court was not persuaded that the Judge had erred in principle or was clearly wrong. The Court also declined to address the applicant's application to introduce expert evidence as it was contingent on the grant of leave to appeal, which was not given. As a result, the applicant was ordered to pay costs to the respondents.

Orders