SHARMA v MUNDATH [2019] NZHC 1263

SHARMA v MUNDATH [2019] NZHC 1263

The court held that the forensic evidence established that Fulcrum and Mudra knowingly received funds fraudulently diverted by their sole director Mundath, Mundath's knowledge was attributable to the companies, equitable tracing principles permitted recovery of specified subsequent transfers, and therefore formal...

Source-derived case information.

Citation
[2019] NZHC 1263
Parties
Plaintiffs: Data Ram Sharma and Ganesh Dixit (as Trustees of the Sharma Family Trust); Plaintiff: Amazon NZ Limited; Plaintiff: Ninety Five NZ Limited; Plaintiff: Wianx Services Limited; Plaintiff: Travellers Inn Limited; Plaintiff: V and A Limited; Plaintiff: VR Rotorua Limited; Plaintiff: Bikaner Foods Mt Roskill Limited; Plaintiff: Bikaner Foods NZ Limited; Plaintiff: Rakesh Kumar Sharma; Plaintiff: Vinod Kumar Sharma; First Defendant: Mujeeb Rahiman Mundath; Second Defendant: Afsheen Mujeeb; Third Defendant: Fulcrum Management Construction Limited; Fourth Defendant: Mudra Investments NZ Limited; Fifth Defendant: Sujin Hwang; Sixth Defendant: Koyama Pty Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
6 June 2019
Procedural Posture
Civil (commercial/fraud) / Formal Proof Judgment (default Judgment Application)
Outcome
Formal proof granted: judgment entered against third defendant (Fulcrum) and fourth defendant (Mudra) in favour of the plaintiffs as set out in draft orders; interest awarded under the Interest on Money Claims Act 2016
Legal Topics
Knowing Receipt, Money Had and Received, Tracing, Fiduciary Duty, Summary Judgment, Interest on Money Claims
Equity Trusts Company Law Insolvency Civil Procedure Commercial Law Banking Knowing Receipt +5 more

Source-derived case record

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 4 Authorities cited 5 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Data Ram Sharma and Ganesh Dixit (as Trustees of the Sharma Family Trust)

Plaintiffs

Amazon NZ Limited

Plaintiff

Ninety Five NZ Limited

Plaintiff

Wianx Services Limited

Plaintiff

Travellers Inn Limited

Plaintiff

V and A Limited

Plaintiff

VR Rotorua Limited

Plaintiff

Bikaner Foods Mt Roskill Limited

Plaintiff

Bikaner Foods NZ Limited

Plaintiff

Rakesh Kumar Sharma

Plaintiff

Vinod Kumar Sharma

Plaintiff

Mujeeb Rahiman Mundath

First Defendant

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

Procedural Posture

Civil (commercial/fraud) / Formal Proof Judgment (default Judgment Application)

Legal Issues

  1. 1 Whether Fulcrum and Mudra are liable for knowing receipt and money had and received
  2. 2 Whether equitable tracing permits recovery of funds paid into Mudra
  3. 3 Whether the director's knowledge and state of mind (Mundath) is attributable to the companies (Fulcrum and Mudra)

Ratio Decidendi

The court held that the forensic evidence established that Fulcrum and Mudra knowingly received funds fraudulently diverted by their sole director Mundath, Mundath's knowledge was attributable to the companies, equitable tracing principles permitted recovery of specified subsequent transfers, and therefore formal proof judgment was entered against Fulcrum for $403,382.47 and against Mudra for specified amounts (including $30,000 and $74,000 tracing sums), with interest under the Interest on Money Claims Act 2016.

Court Disposition

Formal proof granted: judgment entered against third defendant (Fulcrum) and fourth defendant (Mudra) in favour of the plaintiffs as set out in draft orders; interest awarded under the Interest on Money Claims Act 2016

Orders

  • Judgment entered against third defendant Fulcrum Management Construction Limited for $403,382.47 (knowing receipt and money had and received) in favour of identified plaintiffs (see Schedule 1)
  • Judgment entered in favour of the twenty-fourth plaintiff against fourth defendant Mudra Investments NZ Limited for $30,000 (knowing receipt and money had and received)