Seth v Taimoori - [2021] NZCA 474

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA210/2021
[2021] NZCA 474

BETWEEN	ANMOL SETH Appellant
AND	MIRZA AREEB BAIG TAIMOORI Respondent

Hearing:	23 August 2021
Court:	French, Mander and Palmer JJ
Counsel:	J G Ussher for Appellant B P Rooney for Respondent
Judgment:	20 September 2021 at 9 am

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellant must pay costs to the respondent for a standard appeal on a band A basis, together with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by French J)

Introduction

Mr Taimoori paid money to a company controlled by Mr Seth for the purposes of a property development. The property development never eventuated. In the High Court, Downs J held that Mr Seth was liable to repay the money on the grounds that he owed Mr Taimoori a fiduciary duty which he had breached.[1]
[1]Taimoori v Anmol Residential Ltd [2021] NZHC 533 [High Court judgment] at [64] and [83].
Mr Seth now appeals that decision.

Background

Mr Taimoori and Mr Seth were acquaintances. In August 2015, there were discussions between them about Mr Taimoori participating in the development of an Auckland property owned by Mr Seth. Mr Seth had obtained resource consent for a sub-division for three dwellings.
Subsequently Mr Seth asked Mr Taimoori to contribute $300,000 on the basis that Mr Seth would undertake the development and the two of them would share in the profits. When Mr Taimoori said he did not have $300,000, Mr Seth suggested he borrow it and provide his family home as security.
Mr Taimoori had no experience in property development. Based on what Mr Seth told him and Mr Seth’s Facebook pages, he understood Mr Seth to be a successful businessman and entrepreneur.
On 6 August 2015, Mr Seth sent Mr Taimoori a document for signature. The first page was headed “Memorandum of Understanding” and identified the parties to the document as Mr Taimoori and Anmol Residential Ltd (Anmol Residential). It also stated that the parties were entering into the memorandum of understanding to record an “investment agreement”.
Anmol Residential was a company controlled by Mr Seth whose first name is Anmol. Mr Seth was the sole director, and the only shareholder was another of his companies in the Anmol Group. Mr Seth had signed the memorandum on behalf of Anmol Residential.
Key provisions of the memorandum were:
(a)Anmol Residential was described as being “in charge” of the construction project.
(b)Mr Taimoori was to commit to an initial investment of $300,000 via home re-finance.
(c)Mr Taimoori would then be “granted a JV” (it was common ground that this meant “joint venture”).
(d)The memorandum would be superseded by a second agreement, the scope and intent of which would be broadly defined by the memorandum.
On receipt of the memorandum, Mr Taimoori transferred $50,000 of personal savings to Anmol Residential and on the following day he added his signature to the memorandum.
Mr Taimoori’s bank declined his application for…

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 Seth v Taimoori

Details

AGLC: Seth v Taimoori [2021] NZCA 474
Case: [2021] NZCA 474
Decision Date: 20 September 2021 at 9 am

CaseChat Overview and Summary

Seth v Taimoori is an appeal brought by Anmol Seth against a decision of Downs J of the High Court which held that Seth owed Mirza Areeb Baig Taimoori a fiduciary duty which he had breached, and ordered Seth to repay Taimoori $239,320 with interest. The appeal was dismissed by the Court of Appeal. Seth had argued that he did not owe Taimoori a fiduciary duty, that there was insufficient evidence to support the finding that he had breached any such duty, that the Judge had allowed late evidence, and that it was unfair for the Judge to have declined to grant an adjournment during the COVID-19 lockdown. The Court of Appeal found that the Judge's finding of a fiduciary duty was consistent with established principle, that there was a strong evidential foundation for the Judge's finding of a breach, that the Judge was not required to confine his judgment to the pleaded case, and that allowing late evidence did not prejudice Seth's rights to a fair trial. The appeal was dismissed and Seth ordered to pay Taimoori's costs of the appeal.

The Court of Appeal found that Seth owed Taimoori a fiduciary duty. Seth had argued that if any fiduciary duty was owed, it was owed by Anmol Residential, the company controlled by Seth, and not Seth personally. However, the Court of Appeal found that the Judge's finding of a fiduciary relationship was justified on the evidence, taking into account Seth's conduct and the vulnerability of Taimoori, who had no commercial experience and was reliant on Seth personally.

The Court of Appeal also found that there was a strong evidential foundation for the Judge's finding that Seth had breached his fiduciary duty. Seth had argued that the Judge's finding of a breach was contrary to the evidence, but the Court of Appeal found that the Judge's finding was supported by Taimoori's evidence and digital correspondence between the parties. The Court of Appeal found that the Judge was not required to confine his judgment to the pleaded case, and that allowing late evidence did not prejudice Seth's rights to a fair trial.

The appeal was dismissed and Seth ordered to pay Taimoori's costs of the appeal on a band A basis, together with usual disbursements.

Orders