Sharma v Mundath - [2019] NZHC 1263

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-572

[2019] NZHC 1263

BETWEEN
DATA RAM SHARMA and GANESH

DIXIT as Trustees of the Sharma Family Trust

First Plaintiffs

……………Plaintiffs continued over page

AND

MUJEEB RAHIMAN MUNDATH

First Defendant

……………Defendants continued over page

Hearing: 9 May 2019

Appearances:

B O’Callahan and J Ding for the Plaintiffs

Judgment:

6 June 2019

JUDGMENT OF MUIR J

This judgment was delivered by me on Thursday 6 June 2019 at 11.00 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:…………………………

Counsel
B O’Callahan, Barrister, Auckland

Solicitors
K3 Legal, Auckland

SHARMA v MUNDATH [2019] NZHC 1263 [6 June 2019]

Plaintiffs continued

BIKANER FOODS MT ROSKILL LIMITED
Second Plaintiff
JAYA INVESTMENTS LIMITED
Third Plaintiff
WIANX SERVICES LIMITED
Fourth Plaintiff
TRAVELLERS INN LIMITED
Fifth Plaintiff
V AND A LIMITED
Sixth Plaintiff
VR ROTORUA LIMITED
Seventh Plaintiff
V AND A 2012 LIMITED
Eighth Plaintiff
VINOD KUMAR SHARMA
Ninth Plaintiff
BIKANER FOODS 2010 LIMITED
Tenth Plaintiff
BIKANER FOODS NZ LMITED
Eleventh Plaintiff
CAMELOT HOTEL LIMITED
Twelfth Plaintiff
GATEWAY MOTEL LIMITED
Thirteenth Plaintiff
M AND RA LIMITED
Fourteenth Plaintiff
RAKESH KUMAR SHARMA and
MADHU SHARMA as trustees of the Pachori Trust
Fifteenth Plaintiffs
RAKESH KUMAR SHARMA and
MADHU SHARMA as trustees of the Ram Family Trust
Sixteenth Plaintiffs
RAKESH KUMAR SHARMA and ROGER
CHI as Rchi Partnership Seventeenth Plaintiffs
SMARTBUY SOLUTIONS LIMITED
Eighteenth Plaintiff
TRAVELLERS INN RECEIVERSHIP LIMITED
Nineteenth Plaintiff
RAKESH KUMAR SHARMA
Twentieth Plaintiff
ASHOK KUMAR SHARMA and SUDHA
SHARMA as Trustees of the A K Sharma Trust
Twenty-First Plaintiffs
ANKUR ENTERPRISES LIMITED
Twenty-Second Plaintiff
BIKANER FOODS METRO LIMITED
Twenty-Third Plaintiff
NINETY FIVE NZ LIMITED
Twenty-Fourth Plaintiff
AMAZON NZ LIMITED
Twenty-Fifth Plaintiff
M & A LIMITED
Twenty-Sixth Plaintiff
TE ATATU DEVELOPMENTS LIMITED
Twenty-Seventh Plaintiff
ANKUR INVESTMENTS LIMITED
Twenty-Eighth Plaintiff
MAXWELL’S LIMITED
Twenty-Ninth Plaintiff
OMAX INTERNATIONAL LIMITED
Thirtieth Plaintiff
QUADRANT MANAGEMENT SERVICES LIMITED
Thirty-First Plaintiff
UNIWORLD LIMITED
Thirty-Second Plaintiff
VR GROUP 2011 LIMITED
Thirty-Third Plaintiff
PURE DAIRY PRODUCTS NZ LIMITED
Thirty-Fourth Plaintiff

Defendants continued

AFSHEEN MUJEEB
Second Defendant
FULCRUM MANAGEMENT CONSTRUCTION LIMITED
Third Defendant
MUDRA INVESTMENTS NZ LIMITED
Fourth Defendant
SUJIN HWANG
Fifth Defendant
KOYAMA PTY LIMITED
Sixth Defendant

Introduction

[1] The plaintiffs seek judgment by way of formal proof against each of the third and fourth defendants, Fulcrum Management Construction Ltd (Fulcrum) and Mudra Investments Ltd (Mudra). Both were served on 27 August 2018 and neither has taken any steps in the proceedings.

[2] By email dated 9 May 2019 at 12:06 am, Mr T Hall, the former (Australian- based) solicitor for the first defendant, Mr Mundath, wrote to the Deputy-Registrar advising that because a trustee in bankruptcy has been appointed in respect of Fulcrum’s sole director (Mr Mundath), and because Mr Mundath had, as a result, been suspended from his directorship of Fulcrum, Mr Mundath was unable to represent the company, and Mr Hall was unable to accept instructions on the company’s behalf. No similar representations were made in respect of Mudra, although Mr Mundath…

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 Sharma v Mundath

Details

AGLC: Sharma v Mundath [2019] NZHC 1263
Case: [2019] NZHC 1263
Decision Date: 6 June 2019

CaseChat Overview and Summary

The plaintiffs, Sharma et al., seek formal proof against Fulcrum Management Construction Ltd and Mudra Investments Ltd, companies that failed to defend proceedings against them. Fulcrum and Mudra are associated with Mr Mujib Rahman Mundath, who is alleged to have fraudulently obtained approximately $5.5 million over six years. The court was required to determine whether the plaintiffs could recover the funds from Fulcrum and Mudra through claims of knowing receipt, money had and received, and tracing.

The court found that Fulcrum received $425,592.29 in fraudulent payments from 21 plaintiffs. Given that Mr Mundath was the sole director and shareholder of Fulcrum, the court held that the company's liability for knowing receipt and money had and received was established. The court ordered Fulcrum to pay $403,382.47 in equitable compensation, along with interest. Regarding Mudra, the court found that it received $30,000 in fraudulent payments directly, as well as indirectly through other entities, totalling $916,315.62. The court held that Mudra's liability for knowing receipt, money had and received, and tracing was established. The court ordered Mudra to pay $74,000 in equitable compensation, along with interest. The court further declared that the judgments against Fulcrum and Mudra would partly satisfy the judgments against Mr Mundath.

The final orders include judgment against Fulcrum for $403,382.47 and against Mudra for $74,000, with interest accruing from the date of the transactions up until 28 May 2019, and continuing from 29 May 2019. The judgments against Fulcrum and Mudra will partly satisfy the judgments previously entered against Mr Mundath. The court reserved the right to award costs.

Orders