Parashakti Limited v Mangukiya

[2025] NZHC 884

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2024-488-57

[2025] NZHC 884

BETWEEN

PARASHAKTI LIMITED

First plaintiff

OSH ENTERPRISE LIMITED
Second plaintiff

AND

CHIRAG NARESHKUMAR MANGUKIYA

First defendant

ANKITA CHIRAG MANGUKIYA
Second defendant

RIVA ENTERPRISE LIMITED
Third defendant

Continued overleaf

Hearing:	7 April 2025
Appearances:	J A Browne for plaintiffs and counterclaim defendants R J Bowden for defendants and counterclaim plaintiffs
Date of judgment:	15 April 2025

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 15 April 2025 at 3.00pm.

Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Counsel/Solicitors:

R J Bowden, Barrister, Whangārei Henderson Reeves, Whangārei Savage Law, Whangārei

PARASHAKTI LTD v MANGUKIYA [2025] NZHC 884 [15 April 2025]

RAMDEVPIR ENTERPRISE LIMITED

Fourth defendant

MEHANDROO & SONS LIMITED
Fifth defendant

AND  COUNTERCLAIM

BETWEENCHIRAG NARESHKUMAR MANGUKIYA

Plaintiff

SNEHAL SURESH BHAI PATEL
First defendant

OSH ENTERPRISE LIMITED
Second defendant

USHMABEN SNEHAL PATEL
Third defendant

[1]    In very general terms—in this proceeding, in various combinations—the plaintiffs (by which I mean Patel-associated parties) claim unspecified damages on 13 causes of actions brought against the defendants (Mangukiya-associated parties), all founded on allegations the defendants took or received goods belonging to the plaintiffs’ variety stores. The plaintiffs obtained without notice freezing orders against the defendants, since continued by consent for my determination.

[2]    Also in various combinations, Mr Mangukiya counterclaims some $6.8 million on seven causes of action brought against the plaintiffs, all founded on allegations the plaintiffs repudiated an agreement to sell their variety stores to him.

[3]    For my present decision are the defendants’ applications to set aside the freezing orders, for summary judgment on their defence to the plaintiffs’ claim and on their own counterclaim and for freezing orders against the plaintiffs.

Background

[4]    For reasons I am  about to explain, this is a very potted summary  of what     I comprehend to be the very few undisputed facts in this proceeding.

[5]    In central focus is ownership of Coin Saver variety stores in Whangārei’s Kamo, Onerahi, Regent and Tikipunga suburbs. The stores initially were operated by Snehal Patel through his company, Osh Enterprise Limited. From late 2017, Mr Patel and his wife, Ushmaben, assisted husband and wife Chirag and Ankita Mangukiya to obtain permanent residency  in  New  Zealand.  The  assistance  included  Mr  and Ms Mangukiya working for Osh in various of its stores from January 2018.

[6]    The assistance also may have included Osh’s February 2019 sale of the Onerahi store to Mehandroo & Sons Limited, in consideration of some $600,000 received by Mr Patel from various sources. Mr Mangukiya formerly worked for Mehandroo & Sons and had a continuing personal relationship with its principal, Ankur Mehandroo.

[7]    The Patels and the Mangukiyas dined together on 19 November 2021, from which the Patels say Mr Mangukiya was to manage the Kamo, Regent and Tikipunga stores and the Mangukiyas say he was to acquire those stores. Contemporaneous correspondence from Mr Mehandroo to Mr Mangukiya indicates they agreed with Mr Patel Mr Mangukiya should “act like owner and check each and every things before [Mr Mehandroo makes] final decisions for purchase all shops”.

[8]    In 2022, Mr Mangukiya’s company, Riva Enterprise Limited, acquired the Onerahi store from Mehandroo & Sons and later transferred it to Ms Mangukiya’s company, Ramdevpir Enterprise Limited. In early 2023, Osh transferred the Regent and Tikipunga stores to Ms Patel’s company, Parashakti Limited. The Mangukiyas ceased working in the Kamo, Regent and Tikipunga stores in August 2023.

[9]    From those facts, the claim and counterclaim arise. Ms Patel engaged private investigators and, from the ensuing investigations, alleges Mr Mangukiya as manager was diverting the other stores’ inventory to benefit his Onerahi store. Mr Mangukiya says he was entitled to distribute his stores’ inventory as he saw fit between them. He

also says his operation of the stores doubled their profitability, which Mr and Ms Patel have diverted by recanting on his intended acquisition of the remaining three stores.

[10]   Also relevant is, from about 2019, the Ministry of Business, Innovation & Employment commenced an investigation into the Coin Saver stores’ operation. As  a result of that investigation, Osh, Mr Patel and Mr Mangukiya all were charged with a variety of immigration-related offending. I am unclear on the disposition of those prosecutions. If there are acquittals or convictions, I was not provided with any decision on such.

Relevant law

—freezing orders

[11]   Freezing orders may be ordered if a Judge is satisfied, having regard to all the circumstances, there is a danger a prospective judgment in the applicant’s favour will be wholly or partly unsatisfied because the value of the respondent’s assets may be alienated from them in some manner.1 By danger of alienation is meant assets may be removed or dealt with in a way that may frustrate the prospective judgment; that there are “circumstances from which a ‘prudent, sensible commercial [person], can properly infer a danger of default’” on adverse judgment.2

—summary judgment

[12]   Summary judgment requires I be satisfied there is “no defence” to a cause of action in a claim, or none of the causes of action in a claim “can succeed”.3 That is to say, in relation to the former, “no arguable defence, meaning that there is no real question to be tried”, on generally undisputable facts as robustly and realistically assessed.4 The same applies to summary judgment by a defendant, again meaning no

1      High Court Rules 2016, r 32.5(4).

2      Murren v Schaeffer [2018] NZCA 318, (2018) 24 PRNZ 285 at [16], citing Raukura Moana Fisheries Ltd v The Ship “Irina Zharkikh” [2001] 2 NZLR 801 (HC) (citing Third Chandris Shipping Corporation v Unimarine SA [1979] QB 645 at 671).

3      High Court Rules, r 12.2.

4      Dumasia v Ikon Building Co-operation Ltd [2021] NZCA 292 at [44] (leave to appeal declined: Ikon Building Co-operation Ltd v Dumasia [2021] NZSC 135), citing both Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) and Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307.

real question to be tried on the same basis, the defendant having “a complete and incontrovertible answer on the facts”.5

Discussion

[13]   So far as freezing orders are concerned, I understood counsel essentially to concede the only risk of alienation was of each party’s ties to India, closer in time for the Mangukiyas (who came to New Zealand in the mid-2010s) than the Patels (in the early 2000s).6 But, as I have outlined above, both have substantial commercial ties to New Zealand and there is no evidence at all those are at risk of being cut. There are no circumstances from which a prudent commercial businessperson would infer danger of default on adverse judgment. I will discharge the freezing order against the defendants and will dismiss their application for its reciprocal against the plaintiffs.

[14]   Turning then to the summary judgment applications, I mean no disrespect—to the more than full day’s argument heard from counsel, on over 800 pages of each evidence and authorities—in saying there is not the slightest prospect summary judgment can issue on the present state of even the undisputed facts.

[15]   First, I am concerned if the initial relationship between the Patels and the Mangukiyas may be founded on an illegal contract, at least to the extent its benefits and obligations constituted offences against the Immigration Act 2009.

[16]The evidence before me includes:

(a)at least at 27 January 2018, Mr Mangukiya’s work visa stipulated “[t]he holder may only work as Store manager in Whangarei for OSH Enterprise Ltd T/A Coinsave and Coinsaver”;

(b)over the course of 2018, payments amounting to $485,000 were paid to Mr Patel, purportedly on behalf of Mr Mangukiya; and

5      Body Corporate 207624 v North Shore City Council [2012] NZSC 83 at [4].

6      I invited counsel to take instructions and to file memoranda after discussion with each other if the freezing order applications were maintained. At the time of judgment, nothing is received.

(c)Mr Mangukiya indicated the prospect of such payments to Mr Patel in December 2017.

It is conceivable, if made in connection with the work visa, the prospect of those payments was material to its application.7 I do not know if that was disclosed on the work visa application.

[17]   If material and not disclosed, and then if the arrangement between the Patels and the Mangukiyas was an illegal contract, it would be of no effect and no one would be entitled to any property disposed under it.8 I cannot ignore that prospect (which I raised with counsel, but heard no submissions)—which has potential to undo everything then arising between the parties, to leave them only with exercise of my discretion on relief—but also cannot determine it on the evidence before me.

[18]   Second, as I have indicated by reference to their core disagreement,9 the parties are in furious dispute about practically every significant aspect of their impugned dealings, rendering summary judgment an entirely inapposite and unavailable remedy. On the undisputed facts alone, there is much that requires to be fleshed out to give veracity to the defence and counterclaim. And that expansion entirely is disputed.

[19]   Third, it is no answer—as Roger Bowden valiantly essayed for the defendants—the Patels’ evidence as to Mr Mangukiya’s management of the stores is contradicted by contended “admissions” of his ownership of them in formal witness statements made in the immigration prosecutions and proffered as evidence before me by Mr Mangukiya. Those statements are not by Mr Patel, but by non-parties contending in other proceedings for what he has said to them. Technically, they are not admissions at all,10 but hearsay statements,11 and the circumstances of their making by potentially aggrieved complainants in such prosecutions does not provide reasonable

7      Immigration Act, ss 342 and 343.

8      Contract and Commercial Law Act 2017, s 73.

9      At [7] above, first sentence.

10     Evidence Act, ss 4 (definition of “admission”) and 34.

11     Section 4 (definition of “hearsay statement”).

assurance the statements are reliable.12 As statements obtained in criminal disclosure to Mr Mangukiya, leave also may be required for their use in this proceeding.13

[20]I therefore also will dismiss the defendants’ summary judgment applications.

Result

[21]Blanchard J’s 12 July 2024 freezing order is discharged.

[22]   I dismiss the defendants’ other applications for freezing orders and summary judgment.

Costs

[23]   While the defendants may be described the successful parties for costs purposes, in having obtained my discharge of the freezing order, I consider that wholly is outweighed by their comprehensive lack of success on the other applications (including for freezing orders on no better foundation than that obtained against them).

[24]   In my preliminary view, summary judgment applications in the circumstances I have described them were at least ambitious, if not misguided. Nonetheless, I am not quite at the point of considering the defendants should pay increased costs for any unnecessary contribution to the time or expense of this step in the proceeding because I cannot say their argument was entirely without merit.14 Instead, I consider 2B costs should be paid jointly and severally by the defendants jointly to the plaintiffs.

[25]   If the parties disagree, and cannot otherwise agree, costs are reserved for determination on short  memoranda  each  of  no  more  than  five pages—annexing a single-page table setting out any contended allowable steps, time allocation and daily recovery rate—to be filed and served by the plaintiffs within 10 working days of the date of this judgment, with any response or reply to be filed within five working day intervals after service.

—Jagose J

12     Section 18(1).

13     New Zealand Police v Ormsby-Turner [2025] NZCA 30 at [18] and [48].

14     High Court Rules, r 14.6(3).