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Mudaliar v Sharma

Mudaliar v Sharma

Case [2024] NZHC 1432 31 May 2024

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1050

[2024] NZHC 1432

BETWEEN
PARAN DAMAN MUDALIAR

Plaintiff

AND

ROHINEET SHARMA

Defendant

Hearing: 29–30 April 2024

Appearances:

R J Latton for Plaintiff Defendant in person

Judgment:

31 May 2024

JUDGMENT OF O’GORMAN J

This judgment was delivered by me on 31 May 2024 at 4 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

…………………………………

Solicitors/Counsel:
Pidgeon Judd, Auckland
R J Latton, Barrister, Auckland

Copy to: R Sharma

MUDALIAR v SHARMA [2024] NZHC 1432 [31 May 2024]

Overview

[1] This is a claim by Mr Paran Mudaliar against Mr Rohineet Sharma for funds invested in a development project that did not proceed. The funds were used for payment of a deposit under an agreement to acquire a property at 30 and 32–36 Warby Street, Campbelltown, New South Wales, Australia (the Property). The intention was to construct a large apartment complex on the Property (the original plan was for 99 units) and then sell the apartments at a profit (the Campbelltown project). However, the Campbelltown project did not ultimately proceed, and the deposit was forfeited when the purchaser did not complete settlement to acquire the Property.

[2] The causes of action pleaded by the plaintiff are negligent misstatement in tort, or alternatively for pre-contractual misrepresentations under s 35 of the Contract and Commercial Law Act 2017 (CCLA). There is no claim for misrepresentation under the Fair Trading Act 1986 because that type of claim was time-barred under s 43A by the time this proceeding commenced.

[3] Each of the parties gave evidence about the discussions between them leading up to Mr Mudaliar making his investment. At its core, the claim depends on a credibility assessment about whether the following representations were made:

(a)that the agreement to purchase the Property had already become unconditional and the deposit paid, so Mr Mudaliar’s financial contribution was only required for paying the balance of the purchase price at settlement; and

(b)that Mr Sharma was still a lawyer and trusted advisor who could be relied on by Mr Mudaliar.

[4] For the reasons set out in this judgment, Mr Mudaliar does not have an actionable claim for misrepresentations made before his funds were invested. The circumstances did not make it reasonable for Mr Mudaliar to assume that the deposit had already been paid, without seeking clarification of that issue. Furthermore, he engaged in this investment project with Mr Sharma in his private capacity, rather than relying on him as a trusted legal advisor.

Factual background

[5] Mr Mudaliar and Mr Sharma were old friends who knew each other from primary school in Fiji. Mr Mudaliar moved to New Zealand in 1996 and reconnected with Mr Sharma from early 2000. At that time, Mr Sharma was also living in New Zealand and practising as a lawyer.

[6] Mr Mudaliar is a civil engineer. He now runs his own metal reinforcing company and is 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.

Continue reading Mudaliar v Sharma

Details

AGLC: Mudaliar v Sharma [2024] NZHC 1432
Case: [2024] NZHC 1432
Decision Date: 31 May 2024

CaseChat Overview and Summary

The plaintiff, Mr Paran Mudaliar, initiated legal proceedings against the defendant, Mr Rohineet Sharma, seeking repayment of funds invested in a property development project that did not proceed. The core dispute centred on whether Sharma made misrepresentations regarding the deposit payment status for the property acquisition, and whether Mudaliar was entitled to recover his investment under either tort law for negligent misstatement or under the Contract and Commercial Law Act 2017 (CCLA) for pre-contractual misrepresentations. The court examined the nature of the relationship between the parties, the specific representations made, and the reasonableness of Mudaliar's reliance on Sharma's statements. Ultimately, the court found that Mudaliar's decision to invest was based on an informal understanding rather than a formal contractual arrangement. Furthermore, the court determined that it was not reasonable for Mudaliar to assume the deposit had already been paid without seeking confirmation, and that Sharma did not owe Mudaliar a duty of care in this context. Consequently, the court dismissed Mudaliar's claim, noting that the failure to adequately document the investment terms left Mudaliar with no legal remedy for the commercial failure of the project.

The final orders of the court were that the claim be dismissed, and that the parties file and serve their respective memoranda on costs within a specified timeframe if they could not agree on the costs.

Orders