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R v Kumar

R v Kumar

Case [2024] NZHC 3955 18 December 2024

Criminal Liability

Breach of Contract

Unconscionable Conduct

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2023-004-9819

[2024] NZHC 3955

THE KING

v

MANESH KUMAR MAXBUILD LIMITED

Hearing: 18 December 2024

Appearances:

J Dixon KC and J Barry for Crown

G Hughes and E McGill for Defendants

Sentenced:

18 December 2024

SENTENCING NOTES OF WILKINSON-SMITH J

Solicitors:
Solicitors:
Meredith Connell, Auckland J Dixon, Auckland
G Hughes, Auckland E McGill, Auckland

R v KUMAR & ANOR [2024] NZHC 3955 [18 December 2024]

Introduction

[1] MaxBuild Ltd (MaxBuild), having pleaded guilty, I formally enter convictions for the charges to which MaxBuild Ltd has pleaded guilty.

[2] Mr Kumar, you appear for sentence today alongside MaxBuild for charges relating to entering into and giving effect to a cartel agreement intended to fix prices for bridge jointing services.

[3] You pleaded guilty to two charges of entering into a contract of arrangement, or arriving at an understanding that contains a cartel provision,1 and two representative charges of giving effect to a cartel provision.2

[4] Your company MaxBuild also entered guilty pleas for those same four charges.3 Those guilty pleas relate to the same conduct as the charges faced by you personally.

[5] This sentencing is the first of its kind. Prior to 8 April 2021 such anti‑competitive conduct was punished by civil penalty, rather than criminal prosecution. That is not to say that this is the first time this sort of behaviour has happened in New Zealand. It has happened relatively frequently, and it has been subject to civil sanctions. The significance of this matter is that it is the first criminal case, but your matter should not be seen as significantly unusual or extraordinary. Unfortunately, it is not, but the penalty has changed.

The offending

[6] You established MaxBuild, Mr Kumar, in 2009 and are the sole director and majority shareholder. MaxBuild offers a variety of services but has a particular focus on bridge maintenance and specialist contracts, including concrete repairs. MaxBuild

1      Commerce Act 1986, ss 30(1)(a) and 82B(1)(a). Maximum penalty: seven years’ imprisonment and/or $500,000.
2      Sections 30(1)(b) and 82(1)(b). Maximum penalty: Maximum penalty: seven years’ imprisonment and/or $500,000.
3      As a person other than an individual the maximum penalty is a fine of $10,000,000.

is one of the few industry participants who undertake all aspects of bridge jointing work — a highly specialised part of the contract remediation industry.4

[7] The other parties involved in the cartel conduct are a competitor company in the supply of bridge jointing services (the Competitor Company); and its director (the Competitor Director).

[8] Between January and May 2022, Mr Kumar and MaxBuild engaged in cartel conduct known as “cover pricing”, a form of bid-rigging, with respect to two construction projects, being the Northern Corridor Improvement Project (NCI Project) and the Middlemore Railway Bridge Repair Project (Middlemore Bridge Project).

[9] On two separate occasions the defendants and the Competitor Company and Director, met and agreed that the Competitor Company would bid higher than…

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 R v Kumar

Details

AGLC: R v Kumar [2024] NZHC 3955
Case: [2024] NZHC 3955
Decision Date: 18 December 2024

CaseChat Overview and Summary

The case of R v Kumar involves a conviction and sentencing for charges related to cartel conduct by Manesh Kumar, the sole director of MaxBuild Ltd, a company specialising in bridge jointing services. Kumar and MaxBuild Ltd pleaded guilty to entering into and giving effect to a cartel agreement intended to fix prices for bridge jointing services in relation to two construction projects: the Northern Corridor Improvement Project and the Middlemore Railway Bridge Repair Project. The court considered the aggravating factors, including the deliberate nature of the conduct, the involvement of public funds, and the impact on competitive processes. Mitigating factors included Kumar's lack of previous convictions, prompt admissions, and cooperation with authorities, as well as personal hardships and remorse shown. The court imposed a sentence of six months’ community detention and 200 hours of community work on Kumar, and a fine of $500,000 on MaxBuild Ltd.

Orders