Naidu v Chandnaani - [2020] NZHC 2056

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-001963

[2020] NZHC 2056

BETWEEN
DEVENDRA MURTI NAIDU SUKHWINDER SINGH and JASPAL SINGH

Appellants

AND

BHARAT GUL CHANDNAANI

Respondent

Hearing: On the papers

Judgment:

14 August 2020

JUDGMENT OF KATZ J

[Costs]

This judgment was delivered by me on 14 August 2020 at 10:30 am Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors: Davenports West Lawyers, Auckland
Smith & Partners, Auckland

Counsel: M Locke, Barrister, Auckland
N Scampion, Shortland Chambers, Auckland

NAIDU v CHANDNAANI [2020] NZHC 2056 [14 August 2020]

Introduction

[1] Bharat Chandnaani brought a claim in the District Court in which he alleged that Devendra Naidu, Sukhwinder Singh, and Jaspal Singh had agreed to purchase his shares in JAKS Investments (2014) Limited for $262,500 but had only paid him
$200,000.

[2]Judge G M Harrison granted Mr Chandnaani summary judgment in the sum of

$62,500. Devendra Naidu, Sukhwinder Singh, and Jaspal Singh accepted that they owed Mr Chandnaani a further $50,000, but disputed liability for the remaining
$12,500. They therefore filed an appeal to this Court, in which they challenged their liability to pay that sum.

[3] I upheld the District Court judgment and dismissed the appeal.1 As the successful party, Mr Chandnaani now seeks costs.

[4] The proceeding has previously been categorised as a category 2B proceeding.2 Mr Scampion, (counsel for Mr Chandnaani) submits, however, that costs should be awarded on an indemnity basis or, in the alternative, that they should be increased by 100 per cent. Mr Locke, counsel for the appellants, submits that 2B costs are appropriate.

Procedural history

[5] Mr Chandnaani brought a claim in the District Court, seeking to recover the balance of $62,500 allegedly owing under the share sale agreement. The appellants (who were the defendants in the District Court) conceded that they owed Mr Chandnaani a further $50,000, but advanced the following arguments as to why they did not owe Mr Chandnaani a further $12,500:

(a)(In relation to Mr Naidu only), that he did not sign the share sale agreement, did not agree with its contents, and was not bound by it.

1 Naidu v Chandnaani [2020] NZHC 1286.
2 Minute of Powell J dated 10 December 2019.

(b)That pursuant to a shareholders’ resolution of 19 December 2017, the parties had agreed that Mr Chandnaani would receive only $250,000 instead of the $262,500 referred to in the share sale agreement.

(c)There was a binding settlement in the sum of $50,000.

[6] Judge Harrison rejected all three arguments and gave summary judgment in Mr Chandnaani’s favour, in the sum of $62,500.

[7]The appellants then appealed to this Court. The arguments set out at [5](a) and

(b) above were abandoned in light of overwhelming contemporaneous evidence that made those arguments untenable. The appellants’ written submissions therefore focussed on argument (c).

[8] In Mr Scampion’s written submissions on behalf of Mr Chandnaani, filed in advance of the appeal hearing, he addressed this argument comprehensively.…

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 Naidu v Chandnaani

Details

AGLC: Naidu v Chandnaani [2020] NZHC 2056
Case: [2020] NZHC 2056
Decision Date: 14 August 2020

CaseChat Overview and Summary

The appeal was brought by Devendra Naidu, Sukhwinder Singh, and Jaspal Singh against Bharat Gul Chandnaani, following a District Court judgment in favour of Chandnaani. Chandnaani had brought a claim against the appellants for the balance of $62,500 allegedly owing under a share sale agreement. The appellants conceded owing Chandnaani $50,000 but disputed liability for the remaining $12,500. The High Court dismissed the appeal and Chandnaani sought costs.

The key issue for the High Court was whether indemnity costs were appropriate or, in the alternative, whether the costs should be increased by 100 per cent. The court held that the appellants' conduct was not so egregious as to warrant indemnity costs, but it did warrant a costs uplift of 50 per cent. The appellants had advanced a number of untenable defences, and only abandoned them when faced with overwhelming evidence to the contrary. The court found that the appellants' new defence, which was raised for the first time on appeal, was not entirely hopeless but was still unmeritorious. The court held that this warranted a 50 per cent uplift in costs.

In conclusion, the High Court awarded Chandnaani costs on a 2B scale basis, uplifted by 50 per cent, totalling $25,095, and $50 in disbursements. The total costs award was $25,145, which the appellants were jointly and severally liable for payment of.

Orders