Davinder Rahal (inset) and his company were ordered to pay nearly $1 million in damages after the deceptive sale of a leaky home in Goodwood Heights, Manukau. Photo / Alex Burton
Davinder Rahal (inset) and his company were ordered to pay nearly $1 million in damages after the deceptive sale of a leaky home in Goodwood Heights, Manukau. Photo / Alex Burton
A Queen’s Service Medal recipient embroiled in a high-profile leaky home case has been slapped with freezing orders and faces foreclosure on a $5 million commercial property after defaulting on his mortgage.
Davinder Singh Rahal and his now liquidated company First Trust Ltd (FTL) have been ordered to pay nearly$1m in damages after the deceptive sale of a rot-infested Manukau house to a young couple.
The Herald can reveal that Rahal has also been ordered to pay a six-figure sum to a tenant for “contractual misrepresentation” after a dispute over the former JP’s 2400sq m commercial property in Manukau’s Great South Rd.
He and his wife, and their trust, have been hit with freezing orders to secure the debt after a judge ruled there was a risk of “dissipation of assets”.
Queen's Service Medal recipient Davinder Rahal's company is in liquidation owing $4 million and a finance company is chasing him for $180,000 owed on a luxury 2015 Rolls Royce Ghost. Photo / avisandhu_official
And now ASB is going after Rahal’s Great South Rd property after he and his wife Jivan fell behind on mortgage repayments by more than $600,000.
Documents obtained by the Herald show ASB wrote to Rahal in October warning the couple was $605,431.63 in arrears and demanding repayment by the following month.
A letter last month from law firm Simpson Grierson to creditors with registered charging orders against the property said the mortgage remained in default and market appraisals were being prepared before a mortgagee sale.
ASB is preparing to sell the 736 Great South Rd property under mortgagee sale. Photo / Google
ASB declined to comment due to privacy reasons but said mortgagee sales were always a “last resort”.
The Herald understands a purchaser has signed a sale and purchase agreement to buy the Great South Rd property for several million dollars, but the deal is yet to settle.
Meanwhile, property records show Rahal and his wife sold their Goodwood Heights house in October last year for $1.49m, but remain as tenants.
Court grants freezing orders due to risk of asset ‘dissipation’
Shane Sohal owns the Texas Smokehouse restaurant which operates under a 20-year lease from Rahal’s Great South Rd site.
Sohal told the Herald he was forced to spend hundreds of thousands of dollars bringing the property up to standard - including fixing a leaky roof - since taking over the business five years ago.
His company Sohal Associates Ltd took proceedings against Rahal to recoup the money. An arbitration judgment in August last year awarded Sohal more than $100,000 for contractual misrepresentation and repayment of rent incurred during the Covid lockdown.
Shane Sohal owns the Texas Smokehouse restaurant which operates under a 20-year lease from Davinder Rahal’s Great South Rd site.
The decision found Sohal was also entitled to the yet-to-be calculated cost of obtaining a Code Compliance Certificate for the building - estimated to be several hundred thousand dollars.
In February this year, Justice Johnstone issued a High Court minute granting Sohal freezing orders amounting to $400,000 against Rahal, his wife, and assets of the Times Trust, of which the couple are trustees.
The judge noted “the premises have been sold”, with settlement then due to take place in March this year.
“The applicant [Sohal] has provided evidence indicating that the respondents [Rahal and his wife] may be intending to liquidate their assets and leave New Zealand,” the judge wrote.
“I am satisfied that the [freezing orders] application is appropriately made without notice, and that there is a risk of dissipation of assets such that it is appropriate the freezing order be made.”
In a statement, Rahal’s lawyer said the freezing order was made without notice to the couple, and without them having the opportunity to be heard.
“The sums in the notice are owing, and there is no attempt at dissipation. The order has not been finally determined, and my clients are working towards payment. This is an ordinary civil matter.”
Receivers selling second property owned by QSM holder
Receivers are selling Rahal's other Great South Rd property by deadline private treaty. Photo / Google
Meanwhile, the Herald can reveal that another of Rahal’s properties is being sold by receivers.
Located at 609-611 Great South Rd, the 4137sq m commercial property is owned by Rahal’s company FTL, which was put into liquidation in August last year.
A liquidators report shows ASB holds a mortgage security over the property and is claiming $2.6m, while Auckland Council is claiming $62,493 in outstanding rates and fees.
Described as a “rare and strategic opportunity to acquire a substantial commercial landholding in the heart of South Auckland’s growth corridor“, the property is being sold ”as is where is” by the receivers by deadline private treaty.
It’s understood creditors also have charging orders lodged against this property to secure their debts.
They include Ameet Bhargav and his wife Renu, who purchased their first home from FTL in March 2020.
The property turned out to be infested with rot and they successfully sued Rahal and his company, with a judge describing the case as “quite literally a cover-up”.
Lane Nichols is a senior journalist and Auckland desk editor for the New Zealand Herald with more than 20 years’ experience in the industry.
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