PATEL v PATEL & ORS [2014] NZHC 1744

PATEL v PATEL & ORS [2014] NZHC 1744

On the interlocutory evidence the plaintiff has an arguable claim and there is a real risk of dissipation of assets; accordingly the court restrained the third to ninth defendants from making distributions of profits or extraordinary/unusual remuneration without leave of the Court (with payments to Mr Praful Patel...

Source-derived case information.

Citation
[2014] NZHC 1744
Parties
Plaintiff: Renuka Patel; First Defendant: Narendra Hirabhai Lalabhai Patel; Second Defendant: Praful Patel; Third Defendant: Viaduct Waterfront Investments Limited; Fourth Defendant: Citymed Health Care Limited; Fifth Defendant: Chancery Property Investments (No. 1) Limited; Sixth Defendant: Chancery Property Investments (No. 2) Limited; Seventh Defendant: Chancery Property Investments (No. 3) Limited; Eighth Defendant: Chancery Property Investments (No. 4) Limited; Ninth Defendant: Chancery Property Investments (No. 5) Limited; Tenth Defendant: Apex Mega Centre Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
25 July 2014
Procedural Posture
Civil Equity Claims Concerning Beneficial Ownership of Shares and Related Interlocutory Relief / Interlocutory (pre Trial)
Outcome
Interlocutory relief granted in part: restraints maintained on distributions and extraordinary remuneration; plaintiff ordered to provide specified affidavits of documents; third-party discovery to proceed subject to Registrar-determined costs to be met by plaintiff; application to compel UBS disclosure declined;...
Legal Topics
Constructive Trust, Beneficial Ownership of Shares, Caveats, Interim Restraints/injunctions, Security for Costs, Third Party Discovery, Litigation Funding Disclosure, Disclosure of Foreign Bank Accounts, Remuneration of Directors
Equity Trusts Company Law Family Law Civil Procedure Property Law Banking/asset Tracing Constructive Trust +8 more

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Parties

Renuka Patel

Plaintiff

Narendra Hirabhai Lalabhai Patel

First Defendant

Praful Patel

Second Defendant

Viaduct Waterfront Investments Limited

Third Defendant

Citymed Health Care Limited

Fourth Defendant

Chancery Property Investments (No. 1) Limited

Fifth Defendant

Chancery Property Investments (No. 2) Limited

Sixth Defendant

Chancery Property Investments (No. 3) Limited

Seventh Defendant

Chancery Property Investments (No. 4) Limited

Eighth Defendant

Chancery Property Investments (No. 5) Limited

Ninth Defendant

Apex Mega Centre Limited

Tenth Defendant

Procedural Posture

Civil Equity Claims Concerning Beneficial Ownership of Shares and Related Interlocutory Relief / Interlocutory (pre Trial)

Legal Issues

  1. 1 Whether shares in New Zealand companies are held on trust for the plaintiff and whether that supports caveatable interests in company assets
  2. 2 Whether to restrain defendant companies from making distributions or extraordinary remuneration pending trial
  3. 3 Whether the Court can order disclosure/authorisation for foreign banks (UBS) to produce records and whether alleged UBS accounts must be disclosed

Ratio Decidendi

On the interlocutory evidence the plaintiff has an arguable claim and there is a real risk of dissipation of assets; accordingly the court restrained the third to ninth defendants from making distributions of profits or extraordinary/unusual remuneration without leave of the Court (with payments to Mr Praful Patel up to $100,000 per annum not treated as extraordinary). The Court declined to compel disclosure or authorisation to UBS absent fuller argument and jurisdictional basis, directed comprehensive affidavits of documents from the plaintiff and provided a procedure for third-party discovery costs to be met as determined by the Registrar, adjourned the security for costs application...

Court Disposition

Interlocutory relief granted in part: restraints maintained on distributions and extraordinary remuneration; plaintiff ordered to provide specified affidavits of documents; third-party discovery to proceed subject to Registrar-determined costs to be met by plaintiff; application to compel UBS disclosure declined;...

Orders

  • Third to ninth defendants shall not make any distribution of profits by way of shareholder dividends or otherwise without the leave of the Court.
  • Third to ninth defendants shall not make any extraordinary or unusual payment of remuneration to any director or employee without the leave of the Court; payments of remuneration to Mr Praful Patel totalling up to NZ$100,000 per annum shall not be considered extraordinary or unusual for the purposes of this order.