It was a breach of duties owed a joint venture partner to make a personal profit out of sale of joint venture assets, the High Court ruled, after one side pocketed a secret benefit by taking full ownership of an Auckland joint investment property with a profitable on-sale already inked generating an $87,500 profit.
Two families with ties to India were in court arguing over the manner in which their three year Auckland property syndicate was wound down.
Mr Ramasubramanian and Ms Narayanaraja alleged they were hoodwinked by erstwhile business partners Mr Venkataramanujam and Ms Preumalsamy.
The High Court was told that in 2015 the two families collectively purchased two Auckland properties; one in Glen Eden, the other in Blockhouse Bay.
Their business relationship broke down three years later in a dispute over Mr Venkataramanujam’s family’s continued occupation of the Blockhouse Bay property.
With litigation threatened, a compromise was reached.
The Glen Eden property was put up for sale in a private auction; the only bidders being the two families, bidding against each other.
Mr Ramasubramanian’s family was the higher bidder. They took full ownership; the net proceeds were divided between the two families.
The Blockhouse Bay property was listed on the market for sale, later withdrawn with no offers matching the original price paid. It was then agreed to also sell this property by private auction between the two families.
Mr Venkataramanujam’s family was the higher bidder with the High Court later told he had on-sold the property prior to auction, subject to him winning at auction. His family was ordered to surrender half the profit made from this on-sale: $43,750.
Justice Becroft ruled their relationship as joint venture partners continued through the sale process. Mr Venkataramanujam was obliged to disclose any deal struck prior to sale of their jointly owned Blockhouse Bay property.
Venkataramanujam v. Ramasubramanian – High Court (28.11.24)
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