Kumar v Saily [2020] NZCA 376 (31 August 2020)
This case reaffirmed the well-established principles governing adducing further evidence in a civil appeal. [1]
The facts of the case involved Navdeep Kumar and Neeraj Saily, first cousins, who, in embarking on a joint business venture, became embroiled in a dispute with one another, which then extended to their respective families and cultural community.
The idea of the joint venture was to buy a section from a developer on terms enabling Kumar and Saily to take possession of the land on payment of the deposit, pay for the construction of a house, and then pay the balance of the purchase price. [2]
In October 2015, Kumar and Saily incorporated New Venture Capital Ltd, which was nominated to be the purchaser of the property. The same month, construction of the house began. In March 2016, construction was completed. A subsequent valuation of the house showed the property was worth more than the purchase price, such to an extent that the bank did not require Kumar or Saily to contribute any of their own funds towards the purchase price. The next step was to refinance - so that the loan could be transferred to New Venture Ltd and secured over the property. [3]
In April 2016, Kumar and Saily’s families became involved when Kumar’s father discovered that the family home, previously owned by him, his wife, and Mr Kumar, had been mortgaged without him knowing. On 25 April 2016, two angry meetings between the two families were held. Tensions continued to rise in the months that followed. [4]
In December 2016, both families met in a Hindu temple. This meeting was organised by some of the temple trustees in an effort to resolve the dispute. The outcome of this meeting was a written agreement signed by Kumar and Saily and witnessed by 15 members of the temple community. The agreement stipulated that the equity in the property would be shared 65/35, in favour of Kumar, with Saily having the first option to purchase. In mid-December 2016, Saily exercised this right. [5]
In September 2017, Kumar, in disputing Saily’s right, issued proceedings in the High Court. He sought specific performance of an alleged oral agreement reached in April 2016. [6]
The issues in the High Court were: [7]
(1) Did Kumar and Saily enter into a binding oral agreement on 25 April 2016. If so, what were the terms?
(2) Did Kumar sign the December 2016 agreement, in the temple meeting, under duress?
(3) If not, what were the terms of the December agreement? Was this agreement unenforceable because of an absence of a reference to New Venture Ltd?
Regarding the first issue, a binding oral agreement was not found due to a lack of credible evidence. For largely the same reason, the claim of duress was not accepted. Finally, with the third issue, the December 2016 agreement was found to be enforceable and Saily was found to have validly exercised his option. [8]
Disappointed with the result, Kumar wished to adduce new evidence at the substantive appeal hearing. On this point, the Court of Appeal affirmed that the constraints of admission of further evidence are very strict. The two tests were restated. One, that new evidence must be fresh, credible, and cogent. And two, that evidence that is not fresh is only to be admitted in exceptional and compelling circumstances and needs to meet the standards of credibility and cogency. [9]
It was concluded that the evidence intended to be adduced was not fresh and, with reasonable diligence, could have been produced at trial. [10]
Admitting the evidence intended to be adduced would result in a substantial rehearing; a reality beyond the scope of r 45 of the Court of Appeal (Civil) Rules 2005. The Court reaffirmed that litigants must put their best case at trial. [11]
As such, Kumar’s application to adduce new evidence was declined.
Copyright Steve Keall, all rights reserved, 2020
[1] Kumar v Saily [2020] NZCA 376.
[2] At [4].
[3] At [6] to [9].
[4] At [10].
[5] At [12] to [13].
[6] At [14].
[7] At [16].
[8] At [17] to [21].
[9] At [26].
[10] At [27].
[11] At [32].