Kiwi Global Trust Limited v Sarigabani

[2019] NZHC 131

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2018-485-260

[2019] NZHC 131

BETWEEN

KIWI GLOBAL TRUST LIMITED

Plaintiff

AND

CHANTHRU SARIGABANI

Defendant

Hearing:

5 February 2019

Appearances:

D A Bleier for the plaintiff

No appearance by or for the defendant

Judgment:

12 February 2019

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]                 This is an unopposed application for summary judgment by the plaintiff, Kiwi Global Trust Ltd, against the defendant, Chanthru Sarigabani.

[2]                 By 5 December 2018, the originating documentation including the plaintiff’s notice of proceeding, statement of claim, application for summary judgment and affidavit in support, were served by substituted service. The defendant has not entered a defence or taken any other step in the proceeding. The matter was called in the Wellington commercial list on 5 February 2019. On behalf of the plaintiff company, counsel then instructed sought judgment. I indicated to Mr Bleier that, although I was satisfied that the plaintiff was entitled to judgment for the principal amount of its claim, I was concerned about the claim for interest.

[3]                 Understandably, Mr Bleier was not in a position to provide any assistance in relation to the interest point and, at his request, I reserved judgment pending the filing

KIWI GLOBAL TRUST LIMITED v SARIGABANI [2019] NZHC 131 [12 February 2019]

of a memorandum addressing that issue. The plaintiff’s solicitor, Mr Jeffcott, has now filed such a memorandum dated 7 February 2019.

[4]                 The factual background as it emerges from the affidavit evidence is straightforward. The plaintiff is a New Zealand company. It was and is the custodian trustee for an overseas concern by the name of Fullerton Markets Ltd. The plaintiff formerly employed the defendant. On 14 August 2017, the defendant is said to have fraudulently misappropriated US$3,068,300.53 from the trust funds held by it for Fullerton Markets by arranging for that sum to be paid to a Dubai bank account in the name of “Parthiban Ramalingam/Hiferk IT Solution LLC”. The transaction was identified by the plaintiff as being irregular virtually straight away and the plaintiff sought and obtained a guarantee executed by the defendant to the effect that if the third party recipient did not repay the funds by 27 September 2017 the defendant would pay the amount involved to the plaintiff. That date came and went. The plaintiff has not received the funds.

[5]                 The plaintiff’s statement of claim seeks judgment for the principal amount and interest under s 87 of the Judicature Act 1908.

[6]                 In short, no reference is made to the Interest on Money Claims Act 2016 (the Act), which came into force on 1 January 2018 and therefore applies to this claim because it was commenced after that date.

[7]                 Section 25 of the Act provides that a court may not award interest unless certain procedural requirements are complied with, and provides in subs (1) that:

A court may not award interest under a section of this Act for a period unless the party who claims interest under the section for that period specifies the section and, as far as possible, the period in that party’s statement or notice of claim or counterclaim.

[8]                 The authors of McGechan on Procedure emphasise the importance of compliance with this procedural requirement:1

The procedural requirements of s 25 are very important because they are expressed in mandatory terms. Plaintiffs are required to specify in the

1      Vol 2, 4–116(a).

statement of claim the period for which interest is claimed, and the section under which it is claimed. The intention appears to be to have every interest claim particularised individually so that defendants can ascertain exactly what their total liability would be. The statement of claim will limit the amount the court is able to award.

While this appears to be a draconian provision, s 25(4) provides that the claim can be amended in accordance with the rules of court. The purpose is to ensure that the parties go into trial with full knowledge with what can be awarded.

[9]                 In his memorandum, Mr Jeffcott referred me to s 10(1) of the Act, which says that the court must in any claim for a money judgment award interest except in particular circumstances that, as he submitted, have no application here. However, that imperative can apply only to circumstances where a plaintiff makes a proper claim under the legislation in accordance with its terms, which of course include s 25 to which I have already referred.2

[10]             Mr Jeffcott also referred me to s 17 of the Act, which provides that in respect of claims for amounts expressed in a foreign currency — such as this — the court may, instead of awarding interest as calculated in accordance with the Act, award interest that it regards as fair and realistic. However, s 17(2) provides that the court may only exercise this discretion in cases where interest could otherwise have been awarded under the Act had the claim not been expressed in a foreign currency.

[11]             I mention also that s 26 of the Act provides that nothing in it is intended to limit or affect the ability of a claimant to recover interest at common law or in equity. This provision is directed at a situation where the claimant has a contractual or other right to interest at a different rate from that provided for in the Act or can otherwise prove a loss. The plaintiff does not seek to establish any such claim here.

[12]             As the authors of McGechan on Procedure emphasise, the purpose of s 25 is to ensure that a plaintiff’s originating documentation sets out in clear terms the scope of any claim for interest so that the defendant knows exactly what is being sought and can test it. That obligation appears to me to be of particular significance where the Court is asked to enter a default judgment. It would be quite wrong in my view to

2      See Law Commission Aspects of Damages: The Award of Interest on Money Claims (NZLC R28, 1994) at 91.

allow a plaintiff to recover more than an amount properly sought in the papers served on the defendant. The Court would be entering judgment in respect of an amount of which the defendant had no notice.

[13]             The view I take is that I have no jurisdiction to make any award of interest in this case and I am not prepared to do so.

[14]             There will be judgment for the plaintiff in the sum of US$3,068,300.53. The plaintiff is also entitled to its costs on a 2B basis together with disbursements, which may be fixed by the Registrar.

Associate Judge Johnston

Solicitors:
Lowndes, Auckland for the plaintiff