Kumar Thuraisingham was a tenant in one of Shyama Mahasivam’s investment properties. He thought he was borrowing from his landlord to bridge the gap before bank finance became available for a property development; she claims to be a partner in the project and produced in court a signed document supposedly supporting her version of events.
Associate judge Gardiner ruled Mr Thuraisingham had a credible argument that there was never any partnership. A full court hearing was needed to establish exact terms of their agreement.
The High Court was told Mr Thuraisingham had plans in 2019 to develop two adjoining properties at McKinstry Avenue in Mangere East, Auckland. He needed bridging finance; a bank loan was not available until he took title to the properties. He said his landlord agreed to stump up $830,000 bridging finance with the promise of a fixed return of $55,000. She paid across the $830,000 in stages through April-September 2019, only after she had Mr Thuraisingham first sign a document which she said recorded their agreement. Mr Thuraisingham never read the document before signing. He told the court he cannot understand long complex documents and did not think it necessary to get a lawyer involved; he trusted Ms Mahasivam.
Evidence was given that the document signed was a template partnership agreement downloaded from the internet by Ms Mahasivam. She filled in the blanks. Judge Gardiner said the signed document did not match up with either Mr Thuraisingham’s understanding of their deal or what in fact subsequently transpired. The document said Ms Mahasivam would put $880,000 into the project; in fact, she put in $830,000. No partnership bank account was opened or IRD number obtained as required by the agreement. The common partnership rule that partners share profits and losses was changed with Ms Mahasivam amending the template to have them both sharing profits, but Mr Thuraisingham liable for all losses. Ms Mahasivam’s interest costs on a loan she had taken out to fund the project were paid by Mr Thuraisingham. Her demand that Mr Thuraisingham repay the $830,000 before the project was finished did not square with terms of the written agreement describing her funding as a partnership capital contribution.
Judge Gardiner said there was no evidence the two ‘carried on business in common’ as required to be in partnership. It was likely that neither was aware of the legal significance of the document signed, since they both acted without legal advice, she said.
Ms Mahasivam’s claim to be partner in the McKinstry Avenue project was put on hold until further evidence was provided about details of their business relationship.
Mahasivam v. Thuraisingham – High Court (8.12.21)
22.015