Saha v Reardon - [2015] NZHC 638

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2013-404-005129 [2015] NZHC 638

IN THE MATTER
of SAHA INTERNATIONAL

PARTNERSHIP

BETWEEN

GOVIND PRASAD SAHA Plaintiff and First Counterclaim Defendants

AND

TIMOTHY PETER REARDON
First Defendant and Second Counterclaim
Defendant

NEIL ANTONY LOWNE FROST
Second Defendant and Third Counterclaim
Defendant

LUKE BRAMWELL HOUGHTON Third Defendant and Counterclaim Plaintiff

JONATHAN ROBERT MacDONALD MYERS

Fourth Defendant and Fourth
Counterclaim Defendant

RICHARD HUGH MORISON
Fifth Defendant and Fifth Counterclaim
Defendant

TIMOTHY GERARD ARBUCKLE Sixth Defendant and Counterclaim Plaintiff

MICHAEL ANTHONY PEAD Seventh Defendant and Sixth Counterclaim Defendant

VISWA PHANI KUMAR PADISETTI Eighth Defendant and Seventh Counteclaim Defendant

SAHA v REARDON [2015] NZHC 638 [1 April 2015]

Hearing: 4-5 March 2015

Counsel:

G J Harley and P W G Ahern for Plaintiffs and First
Counterclaim Defendants
J D Haig for First Defendant and Second Counterclaim
Defendant
P R W Chisnall for Second Defendant and Third Counterclaim
Defendant
S A Barker and P J Niven for Third and Sixth Defendants and
First and Second Counterclaim Plaintiffs
No appearance for Fourth Defendant
D K Evans for Fifth and Seventh Defendants and Fifth and
Sixth Counterclaim Defendants
D P MacKenzie for Eighth Defendant and Seventh
Counterclaim Defendant

Judgment:

1 April 2015

JUDGMENT OF COLLINS J

Introduction

[1] This judgment explains why I am dismissing applications for summary judgment brought by some of the defendants and cross-claimants and an application to strike out the plaintiffs’ claim for interest.

[2] I have concluded the applications cannot be granted because they depend upon unresolved facts and because there are real questions to be tried. In addition, I have concluded the strike-out application is not appropriate at this juncture.

Context

[3] The first named plaintiff Saha International Partnership (Saha Partnership) was established in 2001. It was engaged in providing management and financial consultancy services in New Zealand, Australia, Namibia and South Africa. It is in the process of being wound up.

[4] The second named plaintiff (Dr Saha) was the founding partner and chief executive of Saha Partnership.

[5] The defendants were at all material times partners in Saha Partnership. The second defendant, Mr Frost and Dr Saha are the only remaining partners of Saha Partnership. Apart from Mr Frost, all defendants retired from Saha Partnership between 28 October 2010 and 1 December 2010. Dr Saha is primarily responsible for conducting the affairs of Saha Partnership in its winding up phase.

[6] Significant disputes have arisen between the plaintiffs and most of the defendants about the state of accounts of Saha Partnership for the financial years ending 31 March 2009 and 2010 and what, if any money the defendants owe Saha Partnership. That part of the dispute between the parties led to the plaintiffs commencing proceedings seeking declarations confirming the validity of the accounts for Saha Partnership for the financial years ending 31 March 2009 and
2010. The plaintiffs also sought orders requiring the defendants to settle any deficit in their net current/capital accounts in Saha Partnership. The plaintiffs have sought interest…

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 Saha v Reardon

Details

AGLC: Saha v Reardon [2015] NZHC 638
Case: [2015] NZHC 638
Decision Date: 1 April 2015

CaseChat Overview and Summary

Saha International Partnership, an entity in the process of being wound up, brought proceedings against several former partners who had retired between late 2010 and early 2011. The plaintiffs sought declarations confirming the validity of Saha Partnership's accounts for the financial years ending 31 March 2009 and 2010 and orders requiring the defendants to settle any deficit in their net current/capital accounts. The plaintiffs also sought interest on the amounts owed by the defendants. Some of the defendants responded with counterclaims, and two of them brought applications for summary judgment and an application to strike out the plaintiffs' claim for interest. The High Court of New Zealand was required to decide whether the applications for summary judgment and the application to strike out could be granted.

The Court considered that the applications for summary judgment and the application to strike out could not be granted because they depended upon unresolved facts and because there were real questions to be tried. The Court also concluded that the strike-out application was not appropriate at this juncture. The Court found that there were evidential and factual conflicts between the parties and that issues of credibility were "front and centre" of the claims for summary judgment. The Court further found that there were fundamental factual disputes that would need to be resolved at trial. The Court also found that there were factual issues that would impact on how losses were allocated for the financial years ending 31 March 2010 and 2011, and that there was a factual dispute as to what was actually agreed to in settlement principle 5. The Court held that it was not appropriate for the Court to attempt to interpret the clauses of the deed of Saha Partnership outlined in paragraph [50] of this judgment. The Court also found that there were factual issues relevant to whether or not Dr Saha breached his fiduciary duty to inform his fellow partners of material matters. The Court held that the issue as to whether or not Dr Saha breached the terms of the deed of Saha Partnership when negotiating a settlement with Mr Thompson hinged on whether or not the partners agreed to waive the terms of the partnership deed when authorising Dr Saha to negotiate a settlement with Mr Thompson. The Court further found that the fifth claim for summary judgment was misconceived and that it was unlikely Dr Saha's liability would arise until the accounts were settled and the exact position of Saha Partnership responsibilities to third party creditors was known. The Court held that striking out the claim for interest at this stage was unnecessary and would not assist in resolving this litigation. Any question of Dr Saha’s entitlement to interest could be resolved at the time of the substantive hearing.

The Court dismissed the applications for summary judgment and the application to strike out the plaintiffs’ claim for interest. All issues identified in the applications for summary judgment and the strike-out application would need to proceed to trial. Costs were reserved.

Orders