At a time when the Pearts’ marriage was disintegrating, Suresh Chandra Samudrala arrived on the scene with what turned out to be grandiose plans for redevelopment of their Hikurangi property, promising handsome returns. In the end, they lost their home and their money, having to sue Mr Samudrala.
The High Court was told that at time of the Pearts’ separation in 2013 Mr Samudrala took an interest in subdividing their six hectare lifestyle block at 56A George Street at Hikurangi, just north of Whangarei. Access to the proposed subdivision required purchase of the neighbouring property: number 54.
The Pearts were led to believe he was an architect and experienced property developer.
No joint venture agreement was ever formalised.
Plans evolved over a period of several months, seeing the Pearts sell 56A for $500,000: Helen Peart remaining owner as to a one-third share; Mr Samudrala and his spouse owning the remaining two-third’s share.
Mr Peart was encouraged to leave in the $163,000 received as his half share net from sale of 56A as an ‘investment’ in the proposed subdivision.
A bank loan was taken out for the Samudralas purchase of neighbouring number 54, with Ms Peart indirectly liable on this loan, agreeing to make payment only if the Samudralas defaulted.
The planned subdivision never went ahead.
The lifestyle block at 56A was sold in a mortgagee sale.
This left Ms Peart with nowhere to live, forced to live for a time in her car, dependent on the charity of friends, the court was told.
In the District Court, Mr Peart sued to recover his $163,000 ‘investment.’
Mr Samudrala claimed this was an equity investment, lost when the project foundered.
Judge Spear ruled it was a loan, ordering repayment.
Also in the District Court, Mrs Peart was successful in claiming Mr Samudrala was in breach of fiduciary duties arising from their business relationship.
There was ample evidence that Mr Samudrala had breached the trust and confidence Ms Peart had placed with him, Judge Spear ruled.
There was evidence of Mr Samudrala not disclosing a 2014 valuation report advising the lifestyle block was ‘not currently ripe for subdivision.’
Further, Mr Samudrala did not place the $163,000 advance received from Mr Peart in a bank account under the joint control of Ms Peart and Mr Samudrala as previously agreed and he then proceeded to divert $100,000 of these funds for his own personal benefit.
Unhappy with the amount in damages awarded in the District Court, Ms Peart appealed.
In the High Court, Justice Gault ordered Mr Samudrala pay Ms Peart the $167,500 she would have received if the family home had been sold outright in 2014 and she were paid her half share of the net proceeds, plus interest at five per cent on this $167,500 running from 2014.
In addition, Ms Peart was awarded $15,000 general damages for mental distress and $15,000 as exemplary damages to mark judicial displeasure at Mr Samudrala’s conduct.
Ms Peart was also entitled to damages for any proved expenses arising from the failed project, including premature relocation of her horse-riding business and legal aid contributions funding her claim.
Peart v. Samudrala – High Court (8.05.26)
26.155