Singh v Patel - [2020] NZHC 2242

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1021

[2020] NZHC 2242

BETWEEN
JASVINDER SINGH

Plaintiff

AND

ROOPA PATEL

ELITE BUSINESS SERVICE NZ LTD

Defendants

Hearing:
20 and 21 July 2020 (further submissions received 5, 14 and 20

August 2020)

Appearances:

A R Gilchrist for Plaintiff A A H Low for Defendants

Judgment:

31 August 2020

JUDGMENT OF LANG J

This judgment was delivered by me on 31 August 2020 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

Solicitors:
Pabla Law, Manukau, Auckland
Alexandra Low & Associates, Auckland Counsel:
A Gilchrist, Barrister, Auckland

SINGH v PATEL [2020] NZHC 2242 [31 August 2020]

[1] In March 2015 the plaintiff, Mr Jasvinder Singh, acquired 49 per cent of the shares in a company called Steve Taylor & Associates North Shore Limited (STA). That company operated an accounting business on the North Shore. Mr Singh acquired the shares from the second defendant, Elite Business Services NZ Limited (Elite), a company incorporated and owned by the first defendant, Mrs Roopa Patel.

[2] On 11 January 2016, Mrs Patel arranged for a staff member employed by STA to register a notice of particulars of shareholding with the Registrar of Companies. This gave notice that Mr Singh’s shares had been transferred back to Elite. It is common ground that Mrs Patel took this step without Mr Singh’s knowledge and authority. In 2018 Mrs Patel arranged for another notice of particulars to be registered. This gave notice that Elite had transferred all the shares in STA, including those formerly held by Mr Singh, to herself. STA was placed in liquidation in September 2019. As a result, the shares that Mr Singh held in STA are now worthless.

[3] In this proceeding Mr Singh advances three claims against the defendants. First, he alleges they committed the tort of conversion when they transferred his shares to Elite and then on to Mrs Patel. Secondly, he alleges Mrs Patel knowingly assisted Elite to acquire his shares and thereby committed the tort of causing Mr Singh economic loss by unlawful means. Thirdly, Mr Singh contends Mrs Patel agreed to assume personal liability to pay him the funds required to repay two loans he and his wife had obtained from the ANZ Bank to fund the purchase of the shares in STA.

Background

[4] Mr Singh purchased the shares in STA for the benefit of his wife, Ms Parminder (Pam) Sandhu. Ms Sandhu is an accountant by occupation and met Mrs Patel in 2009.

[5] Ms Sandhu wanted to be involved in her own business after she became fully qualified as an accountant. During the period leading up to March 2015 she and Mr Singh became aware that Mrs Patel had entered into an agreement to buy the shares in STA from IP and Admin Ltd, a company owned by Mr Stephen Taylor. At that…

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 Singh v Patel

Details

AGLC: Singh v Patel [2020] NZHC 2242
Case: [2020] NZHC 2242
Decision Date: 31 August 2020

CaseChat Overview and Summary

In Singh v Patel, the High Court considered three claims brought by Mr Singh against Mrs Patel and Elite Business Services NZ Ltd, relating to the transfer of shares in Steve Taylor & Associates North Shore Limited (STA). Mr Singh alleged conversion of his shares, causing economic loss by unlawful means, and breach of an agreement to repay the purchase price of the shares. The court found that Mrs Patel did not commit the tort of conversion because she did not effect a valid transfer of Mr Singh's shares. The court held that the tort of conversion does not extend to intangible assets, such as shares. The court also found that Mrs Patel did not have the requisite intention to cause harm to Mr Singh's economic interests, and that there was no agreement for Mrs Patel to assume personal liability to repay the purchase price of the shares. The court entered judgment in favour of Mrs Patel on all three causes of action and awarded her costs against Mr Singh.

The court's decision in this case highlights the limitations of the tort of conversion in relation to intangible assets, such as shares, and the high threshold for establishing the tort of causing harm to economic interests by unlawful means. The case also emphasises the importance of clear and formal agreements in commercial transactions, and the potential consequences of failing to document the terms of an agreement in writing.

Orders