Patel v Patel - [2014] NZHC 1744

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-2593 [2014] NZHC 1744

BETWEEN
RENUKA PATEL

Plaintiff

AND

NARENDRA HIRABHAI LALABHAI PATEL

First Defendant

AND

PRAFUL PATEL Second Defendant

AND

VIADUCT WATERFRONT INVESTMENTS LIMITED Third Defendant

Continued over page …

Hearing:
15 and 16 April 2013

Further Submissions: 23 April, 13 and 25 September and
31 October 2013

Appearances:

Lady Deborah Chambers QC and E Eggleston for Plaintiff
AE Hinton QC and DCS Morris for First Defendant
DM Salmon, M Heard and S Ma Ching for Fourth to Ninth
Defendants
J McBride for Tenth Defendant

Results
Judgment:

18 December 2013

Reasons
Judgment:

25 July 2014

REASONS JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 25 July 2014 at 3:00 pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

PATEL v PATEL & ORS [2014] NZHC 1744 [25 July 2014]

AND
CITYMED HEALTH CARE LIMITED

Fourth Defendant

AND

CHANCERY PROPERTY INVESTMENTS (NO. 1) LIMITED Fifth Defendant

AND

CHANCERY PROPERTY INVESTMENTS (NO. 2) LIMITED Sixth Defendant

AND

CHANCERY PROPERTY INVESTMENTS (NO. 3) LIMITED Seventh Defendant

AND

CHANCERY PROPERTY INVESTMENTS (NO. 4) LIMITED Eighth Defendant

AND

CHANCERY PROPERTY INVESTMENTS (NO. 5) LIMITED Ninth Defendant

AND

APEX MEGA CENTRE LIMITED Tenth Defendant

Introduction

[1] This judgment provides reasons for miscellaneous interlocutory orders made in a judgment dated 19 December 2013.1 Brief reasons for what were essentially procedural rulings were given in the results judgment. Although no party appealed against any of the orders or directions made, the parties require reasons that are more fully developed.

[2] For convenience, I have incorporated into this judgment relevant passages taken from the results judgment. I do not provide reasons for orders made by consent. Nor do I consider it necessary to address a number of the orders or directions which have been the subject of later applications, in the light of subsequent events, and have been superseded by more recent orders.

[3] The nature and some of the history of the proceedings bear repeating.

Background and relevant procedural history

[4] Mrs Renuka Patel and Mr Narendra Patel are a wife and husband who are domiciled in Australia. They are estranged and Mrs Patel is living in the family home in Sydney with at least one child of the relationship. She commenced proceedings in Australia seeking orders for the division of property, spousal maintenance and child support. The assets which are the subject of those proceedings include shares in New Zealand-registered property-owning companies which are held by Praful Patel, Narendra Patel’s brother, having an estimated total value of some NZ$30 million.

[5] Four separate proceedings dealing with matters related to Mrs Patel’s claims

were commenced in this Court, but they have now been consolidated.

[6] At the heart of the consolidated proceeding are equitable claims by Mrs Patel asserting her entitlement to beneficial ownership of the shares in the defendant
companies and/or their assets. She claims that the shares in Praful Patel’s name are

1 Patel v Patel [2013] NZHC 3470.

in fact…

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 Patel v Patel

Details

AGLC: Patel v Patel [2014] NZHC 1744
Case: [2014] NZHC 1744
Decision Date: 18 December 2013

CaseChat Overview and Summary

Patel v Patel was a complex litigation involving a range of equitable claims over shares in New Zealand-registered property-owning companies and related proceedings in Australia. The High Court of New Zealand, Auckland Registry, issued a results judgment on 19 December 2013, which provided reasons for miscellaneous interlocutory orders made in the case. The court was required to decide several legal issues, including the interpretation of orders made in September 2012, the variation of those orders, and the disclosure of relevant documents and information. The court also considered the implications of a Supreme Court judgment on security for costs and disclosure of funding arrangements.

The court held that the orders made on 18 December 2012, which required the companies not to pay legal costs, personal expenses, and dividends without Mrs Patel's consent, should be interpreted as stand-alone orders. The court also restricted the distribution of profits and extraordinary payments of remuneration by the companies without its leave. Regarding the alleged UBS accounts, the court found that there was an arguable case for their existence but was not prepared to make orders directing Mr Narendra Patel to provide authority for their disclosure. The court also held that Mrs Patel should provide a comprehensive affidavit of documents and that disclosure of relevant documents by non-parties should include those related to the invoice from Cascades Motor Lodge.

The court dealt with the issue of security for costs and disclosure of funding arrangements by applying a Supreme Court judgment. It determined that it was strongly arguable that the courts would have had the power to order disclosure of the existence of a litigation funder and relevant terms of the funding agreement. However, disclosure should not include details that might give rise to a tactical advantage to the non-funded party, such as information about any "war chest" or other commercially sensitive details. The court decided to adjourn the application for security for costs sine die for further submissions, if necessary, to provide Mrs Patel with an opportunity to decide whether to continue to resist the application.

Finally, the court held that it was arguable that Mrs Patel has a caveatable interest in the properties owned by the defendant companies if she can establish that the shares in the companies are held by the first and second defendants as constructive trustees for her. The court was inclined to make orders in terms of paragraph 3 of Schedule 1 to the companies' application for variation of the interim orders but not to make them conditional upon the giving of an undertaking by Mrs Patel. The court reserved leave for the parties to make further submissions on these matters before ruling on them.

Orders