Rajan v Rani - [2015] NZHC 715

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-002318 [2015] NZHC 715

UNDER The Insolvency Act 2006

BETWEEN

DEO RAJAN AND LYDIA DAMAYANTHI RAJAN Judgment Creditors

AND

SANTOSH RANI Judgment Debtor

Hearing: 6 March 2015

Appearances:

B Parshotam for Judgment Creditors
M S S Khan for Judgment Debtor

Judgment:

15 April 2015

JUDGMENT OF KEANE J

This judgment was delivered by me on 15 April 2015 at 4pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Parshotam Lawyers, Auckland
Singhs Lawyers, Auckland

RAJAN v RANI [2015] NZHC 715 [15 April 2015]

[1] Deo and Lydia Rajan own 77A Hutton Street, Otahuhu, a property on which there are four two bedroom units, which they acquired in 2009 from Muhammad Bhatti, the former husband of Santosh Rani, who had acquired it from her in 2005.

[2] On 5 July 2012 Ms Rani lodged caveats against Hutton Street, and another property belonging to the Rajans. Their bank, the Bank of New Zealand, became concerned. Their loan was then for renewal. The BNZ declined to renew it. Instead the bank issued a property law notice, to be able to sell Hutton Street and the other property; and, when Ms Rani refused to withdraw her caveats, issued proceedings against her.

[3] On 23 September 2013 Ms Rani, who had by then withdrawn the caveat against the other property, conceded she had no basis to sustain her Hutton Street caveat and Katz J made an order by consent enabling the BNZ to have it withdrawn, as long as it retained until further order any surplus to which Ms Rani might be entitled in the event that the bank did exercise its power of sale. The following day the Judge awarded the bank $9,346 costs and disbursements. In the event, the Rajans refinanced and the BNZ assigned its costs award to them.

[4] On 16 July 2014 Ms Rani brought a claim in this Court against Mr Bhatti, as first defendant, from whom she had separated in 2004. She alleged that he had deprived her by fraud of her interest in five properties, including Hutton Street. She claimed that the Rajans, as fourth and fifth defendants, had since 2009 been holding it on trust for him. She sought to have it transferred to her. She looked to Mr Bhatti and to the Rajans for $1M special damages.

[5] On 5 September 2014 the Rajans requested this Court to issue a bankruptcy notice to enforce the costs award; and on 30 September 2014 Ms Santos applied to have that notice set aside. She has, she contends, a claim against them far exceeding theirs, which she could not have brought against the BNZ. She also contends that they issued the bankruptcy notice only after she claimed against them, to prevent her

pursuing her claim. Her brother, she says, is willing to guarantee the payment of her debt.

[6] On 6 March 2015, after hearing Ms Santos’s application, I reserved my decision. On 9 March…

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 Rajan v Rani

Details

AGLC: Rajan v Rani [2015] NZHC 715
Case: [2015] NZHC 715
Decision Date: 15 April 2015

CaseChat Overview and Summary

Deo and Lydia Rajan, owners of a property at 77A Hutton Street, Otahuhu, were involved in a legal dispute with Santosh Rani. The Rajans had acquired the property in 2009 from Muhammad Bhatti, Rani's former husband. Rani had previously lodged caveats against the property and another belonging to the Rajans, leading to the Bank of New Zealand declining to renew their loan. The Rajans subsequently refinanced their mortgage. Rani filed a claim against the Rajans and Bhatti, alleging that Bhatti had deprived her of her interest in five properties, including Hutton Street, through fraud. She sought to have the property transferred to her and looked for $1M in special damages. The Rajans, in turn, sought to enforce a costs award against Rani.

The legal issues before the court were whether Rani had a genuinely triable cross-claim against the Rajans that was equal to or greater than the judgment debt, and whether the Rajans' bankruptcy notice could be set aside. The court had to determine if Rani's claim was genuinely triable, both as to liability and quantum, and whether it met the requirements of section 17 of the Insolvency Act 2006. The court considered the evidence provided by Rani and the Rajans, including affidavits, expert opinions, and settlement statements.

The court concluded that Rani's claim against the Rajans was not genuinely triable. The evidence provided by Rani was insufficient and inconsistent with the contemporary documents. The Rajans' evidence, supported by affidavits and settlement statements, showed that they had legitimately purchased the property from Bhatti. The court found that Rani's claim was inconsistent with the available evidence and did not meet the threshold for a genuinely triable claim. Therefore, the court dismissed Rani's application to set aside the bankruptcy notice and awarded costs to the Rajans.

In summary, the court found that Rani's claim against the Rajans was not genuinely triable, and the Rajans' bankruptcy notice could not be set aside. The court awarded costs at scale 2B and disbursements to the Rajans, to be fixed by the Registrar.

Orders