Mahasivam v Thuraisingham - [2023] NZHC 986

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-794

[2023] NZHC 986

UNDER the Partnership Law Act 2019

BETWEEN

SHYAMA MAHASIVAM

Plaintiff

AND

KUMAR THURAISINGHAM

Defendant

Hearing: 6 March 2023

Appearances:

RO Parmenter for the Plaintiff S Khan for the Defendant

Judgment:

28 April 2023

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 28 April 2023 at 4.30pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors/Counsel:
Graham & Co, Auckland Fortune Manning, Auckland

RO Parmenter, Auckland

MAHASIVAM v THURAISINGHAM [2023] NZHC 986 [28 April 2023]

Introduction

[1] A tailored discovery order was made in this proceeding with the parties to agree on the tailored discovery categories. Unfortunately, agreement has not been able to be reached, necessitating a hearing.

[2] In the statement of claim, the plaintiff alleges that she was in partnership with the defendant in respect of the development of two properties on McKinstry Avenue in Auckland. The plaintiff pleads the defendant has breached the partnership agreement by using the partnership assets outside the ordinary course of business by borrowing money against the partnership’s properties and receiving rental income in respect of the properties for the defendant’s benefit. The plaintiff is seeking an order for dissolution of the partnership and for damages for the consequences of breach.

[3] At the time the plaintiff filed the proceeding, she also filed an application for summary judgment confined to her claim for information under the partnership agreement signed by the parties and s 54 of the Partnership Law Act 2019 (Partnership Act).

[4] Although a written partnership agreement had been entered into, the application for summary judgment was declined on the basis that the defendant had a credible defence that the arrangement between the parties was not a partnership. Associate Judge Gardiner therefore held that it was reasonably arguable that the defendant was not required to provide the information pursuant to either the written partnership agreement or the Partnership Act and dismissed the application. 1

[5] The defendant submits that rather than a partnership, the relationship between the parties involved a simple loan agreement for a development project, the terms of which included that the plaintiff would loan $830,000 to the defendant, the defendant would pay interest on the loan, and the plaintiff would receive a $50,000 return on her investment once the project was completed.

1 Mahasivam v Thuraisingham [2021] NZHC 3221 at [55].

[6] In her amended claim, the plaintiff has pleaded the loan agreement alleged by the defendant as an alternative claim in contract, saying that if there was such an agreement the defendant was bound to repay her the $830,000 invested plus a fixed return of $55,000 on 19 July 2021. The plaintiff therefore seeks payment on this alternative claim of $885,000 plus interest from the date payment was due through Judgment until payment is made.

Discovery categories sought

[7] The plaintiff is seeking tailored discovery from the…

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: [2023] NZHC 986
Decision Date: 28 April 2023

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Mahasivam v Thuraisingham involved a dispute between Shyama Mahasivam and Kumar Thuraisingham regarding the existence and nature of a partnership. Mahasivam alleged that she was in partnership with Thuraisingham for the development of two properties on McKinstry Avenue in Auckland. She claimed that Thuraisingham had breached the partnership agreement by using partnership assets outside the ordinary course of business. Mahasivam sought an order for dissolution of the partnership and damages for the consequences of the breach.

Thuraisingham contested the existence of a partnership, claiming instead that the relationship was a simple loan agreement for a development project. The court had to decide whether the categories of documents sought by Mahasivam were relevant and proportionate under the Partnership Law Act 2019 and the High Court Rules 2016. Mahasivam sought tailored discovery of financial reports, documents related to ownership or development of McKinstry Avenue, correspondence between the parties, and documents where McKinstry Avenue had been used as security for unrelated borrowings.

Thuraisingham opposed the discovery of certain categories, arguing they were based on the assumption of a partnership and were therefore not relevant or proportionate. The court considered the principles of proportionality and relevance in determining the appropriateness of the discovery categories. It held that the documents sought were relevant to the issues raised in the pleadings, despite Thuraisingham's denial of a partnership. The court also found that the discovery sought was proportionate, as the categories were narrowly tailored to the matters at issue.

The court ordered tailored discovery as sought by Mahasivam but with slight adjustments to apply to both parties. It set dates for the filing and service of affidavits of documents, the close of pleadings, and the submission of evidence-in-chief statements. A two-day substantive hearing was scheduled for 24 October 2023. Costs were reserved for later determination.

Orders