Case Details
- Citation: [2024] SGHC 310
- Court: General Division of the High Court of the Republic of Singapore
- Case Title: Devin Jethanand Bhojwani & 2 Ors v Jethanand Harkishindas Bhojwani
- Suit No: Suit No 521 of 2021
- Judges: Goh Yihan J
- Date of Judgment: 5 December 2024
- Hearing Dates: 19–22 March 2024; 26–28 March 2024; 2 April 2024; 25 September 2024
- Plaintiffs/Applicants: Devin Jethanand Bhojwani; Dilip Jethanand Bhojwani; Sandeep Jethanand Bhojwani
- Defendant/Respondent: Jethanand Harkishindas Bhojwani
- Legal Areas: Civil Procedure; Trusts and Trustees; Equity; Succession and Wills
- Statutes Referenced: Trustees Act 1967
- Key Procedural Themes: Late admission of new affidavit of evidence-in-chief; amendment of pleadings close to trial
- Key Substantive Themes: Trustee fiduciary duties and non-conflict; duties of care and prudence; account-keeping; remedies for breach of trust (surcharge and falsification); construction of express testamentary trust; construction of exclusion of liability clause
- Judgment Length: 182 pages; 55,068 words
Summary
In Devin Jethanand Bhojwani & 2 Ors v Jethanand Harkishindas Bhojwani ([2024] SGHC 310), the High Court addressed a wide-ranging dispute between beneficiaries and a trustee concerning alleged breaches of trust, including failures in account-keeping, improper management of trust assets, and conflicts arising from the trustee’s personal interests. The case also involved significant procedural skirmishes about whether the court should permit late amendments and the admission of new evidence-in-chief after the parties’ affidavit exchange deadlines had passed.
Substantively, the court found that the trustee breached multiple duties. Most notably, the court held that the trustee breached his trustee duties by converting a “Founder’s Share” (and/or its special rights) in a company held on trust into ordinary shares without receiving consideration for the trust, thereby occasioning loss to the trust estate. The court also found breaches in the trustee’s exercise of investment and disposal powers, including selling trust shares in live companies at prices and/or in a manner that failed the applicable duty of care, and realising shares in struck-off companies at an undervalue. The court further addressed the appropriate remedies, including an account on a wilful default basis and monetary compensation through surcharging and substitutive relief.
What Were the Facts of This Case?
The plaintiffs were beneficiaries of a trust created by a testamentary instrument. The defendant trustee, Jethanand Harkishindas Bhojwani (“the trustee”), held and administered company shares as trust property. The trust’s structure and the trustee’s powers were derived from the will, including provisions that the court had to construe in order to determine the scope of the trustee’s authority and duties. A central factual theme was that the trustee held ordinary shares in the same company as an absolute owner, while also holding preference-related or special-rights interests as trustee—creating a potential setting for conflicts between duty and personal interest.
One of the key events concerned the conversion of a “Founder’s Share” (described in the judgment as a share with special rights) into ordinary shares. The conversion occurred on 15 September 2008. The plaintiffs alleged that the trustee converted the Founder’s Share in a manner that negated the trust’s rights without ensuring that the trust received equivalent value in return. The trustee’s position was that the conversion was within his powers and/or consistent with his management and investment discretion. The court, however, treated the conversion as a breach of the trustee’s management stewardship duty, particularly focusing on the absence of consideration to the trust and the resulting diminution in value.
Beyond the conversion, the plaintiffs alleged that the trustee mismanaged trust moneys and trust assets. The judgment’s extracted outline indicates findings relating to commingling of trust moneys, concealment of the trust from the plaintiffs until 16 September 2016, and failure to maintain proper accounts. These allegations were not merely technical; they were tied to the trustee’s ability to account for trust administration and to justify disbursements. The court’s analysis included whether the failures warranted an account on a wilful default basis, which affects both the evidential burden and the remedial consequences.
Finally, the plaintiffs challenged the trustee’s realisation of trust shares in multiple companies. The court found that the trustee breached duties when selling trust shares in two “live” companies, and also when realising trust shares in three “struck off” companies at an undervalue. The factual matrix required the court to assess what a prudent trustee would have done, and to determine the appropriate valuation-based remedies to place the trust estate, as far as possible, in the position it would have been in but for the breaches.
What Were the Key Legal Issues?
The case raised several interlocking legal issues. First, the court had to decide procedural questions: whether to allow the admission of a new affidavit of evidence-in-chief filed after the deadline for exchanging affidavits had elapsed, and whether to permit amendments to pleadings close to the start of trial where the amendments were responsive to an amended defence. These issues required the court to apply established civil procedure principles, including a two-stage test for relevance and prejudice in relation to late evidence.
Second, the substantive trust law issues were extensive. The court had to determine whether the trustee breached fiduciary duties, including the no-conflict rule, in circumstances where he held ordinary shares as an absolute owner and also had trustee interests in preference-related rights. The court also had to construe the will’s provisions, including whether the phrase “absolute discretion” in the testamentary instrument enlarged the trustee’s powers or, conversely, affected the trustee’s duties and exposure to liability.
Third, the court had to decide the scope and standard of the trustee’s duties of care and prudence. This included the statutory duty of care under section 3A of the Trustees Act 1967 (as referenced in the judgment) and the common law standard of care associated with the “ordinary prudent man of business” approach. The court also had to determine the appropriate remedies for breach, including when surcharging is appropriate, when falsification applies, and whether the court should conduct a causal inquiry to identify what a prudent trustee would have done in a hypothetical counterfactual scenario.
How Did the Court Analyse the Issues?
Procedural discretion: late affidavits and late amendments. The court applied principles governing applications to adduce new evidence-in-chief after the affidavit exchange deadline. The judgment outline indicates that the court used a two-stage test: (1) relevance of the proposed new affidavit, and (2) whether admitting it would cause undue prejudice to the opposing party. The court dismissed the application to admit the new affidavit out of time (SUM 663), reflecting the court’s concern for procedural fairness and trial efficiency. In contrast, the court allowed an amendment to pleadings (SUM 678), indicating that responsive amendments may be permitted even close to trial where they do not fundamentally alter the nature of the case or cause unfair surprise.
Construction of the will and the meaning of “absolute discretion”. A major substantive question was whether the will conferred “absolute power or discretion” on the trustee, and how that affected the trustee’s duties. The court’s outline states that the phrase “absolute discretion” in the will had “no bearing” on the trustee’s duties under the trust. This suggests the court treated “absolute discretion” as not eliminating the trustee’s core obligations, including duties of loyalty, proper administration, and the duty to act prudently and in the beneficiaries’ interests. The court also addressed whether an “exclusion of liability” clause should be construed restrictively, applying the approach associated with Armitage v Nurse to trust instruments. The court’s reasoning indicates that exclusion clauses are not read expansively to remove accountability unless the language clearly achieves that effect.
Fiduciary duties and the no-conflict rule. The court examined whether the trustee breached the no-conflict rule by placing himself in a position where duty to the principal (the beneficiaries) and personal interest might conflict. The outline indicates that the trustee approved an amendment to a company constitution that negated rights of trust property in the form of preference shares, while he held ordinary shares in the same company as absolute owner. The analysis would have required the court to identify the fiduciary relationship between trustee and beneficiary, the nature of the conflict (actual or potential), and whether the trustee’s actions were properly authorised and free from self-interest. The court’s ultimate findings on breach imply that it did not accept that the trustee’s personal shareholding insulated him from fiduciary scrutiny.
Clean hands and the relationship between equity and illegality. The plaintiffs’ entitlement to equitable relief was challenged on the basis that they allegedly did not come with “clean hands”. The court addressed the relationship between the clean hands doctrine in equity and the Ochroid Trading approach to illegality in common law. The outline indicates the court held that the plaintiffs’ conduct did not warrant denial of equitable relief. This is significant because it clarifies that equitable discretion is not automatically withheld for every form of misconduct; rather, the misconduct must be sufficiently connected to the relief sought and must engage the equitable rationale underlying the clean hands doctrine.
Remedies: account on wilful default, surcharging, and falsification. The court’s remedial analysis was structured around different categories of breach. For failure to keep and maintain proper accounts, the court considered whether proof of loss is required for the breach to be actionable. It also determined whether the trustee’s conduct amounted to “wilful default”, which triggers an account on that basis. The outline indicates that the plaintiffs were entitled to an account on a wilful default basis. This typically affects the trustee’s burden and the intensity of scrutiny.
For the conversion of the Founder’s Share, the court applied the remedy of surcharging. Importantly, the court conducted a causal inquiry using a counterfactual approach: it asked what a hypothetical prudent trustee would have done, and whether the trustee would have approved an amendment/conversion that negated trust rights without accretion of equivalent value to compensate for corresponding loss of market value. The court then assessed the loss to the trust by reference to market value at the time of conversion (15 September 2008), loss of subsequent appreciation, and income that could have been earned but for the conversion. The court also addressed valuation methodology, including the proper valuation of the difference between the Founder’s Share and an ordinary share as at the relevant date.
For custodial failures relating to sale of shares below market value, the court applied the remedy of falsification. The outline indicates that where falsification is engaged, there is no causal inquiry in the same way as surcharging. Instead, the court disallowed the sale of the company shares held on trust where the trustee sold at a price below market value and had a corresponding obligation to reconstitute the trust estate in specie. This distinction between surcharging (with causal counterfactuals) and falsification (with substitutive restoration principles) is a key doctrinal takeaway for practitioners.
Duty of care and investment/disposal decisions. The court also addressed breaches in the trustee’s exercise of power of investment to sell trust shares in live companies, and breaches in realising shares in struck-off companies at an undervalue. The analysis indicates that the court treated these as breaches of the duty of care and as breaches of custodial stewardship duties. It also implies that the court assessed whether the trustee acted with the care and skill required by section 3A of the Trustees Act 1967 and the common law standard (as associated with Speight v Gaunt). The court’s approach suggests that even where a trustee has discretion, the discretion is bounded by prudence, proper valuation, and loyalty to the trust’s interests.
What Was the Outcome?
The court allowed the plaintiffs’ claim in substantial part. It granted relief including an account on a wilful default basis and ordered the trustee to compensate the trust for losses occasioned by the conversion of the Founder’s Share, assessed through surcharging. The court also ordered monetary substitution for losses arising from unauthorised disbursements and undervalue realisations, including amounts representing deficiencies in the trust estate to date.
In addition, the court addressed whether the trustee should be removed. While the outline indicates a section on removal and the test for removal of trustee, the extracted text does not specify the final order on removal. However, the court’s findings of multiple breaches—particularly those involving concealment, account failures, and undervalue disposals—would typically support strong remedial measures, including removal where the trustee is shown to lack capacity to execute duties properly or where continued administration would not protect beneficiaries’ interests.
Why Does This Case Matter?
This decision is important for both procedural and substantive trust litigation in Singapore. Procedurally, it illustrates the court’s disciplined approach to late evidence and trial management. The dismissal of the out-of-time new affidavit application underscores that relevance alone may not suffice; the court will also weigh prejudice and the impact on the fairness of the trial process. Conversely, the allowance of responsive amendments close to trial demonstrates that the court will consider whether amendments genuinely respond to pleaded issues rather than springing a fundamentally new case.
Substantively, the case provides a detailed roadmap for beneficiaries seeking remedies for breach of trust. It clarifies how courts may treat “absolute discretion” in testamentary instruments as not negating core duties, and how exclusion of liability clauses in trust instruments may be construed restrictively. The decision also draws practical distinctions between surcharging and falsification as remedial tools, including whether a causal counterfactual inquiry is required. For practitioners, the court’s valuation approach—market value at the conversion date, loss of appreciation, and income foregone—offers concrete guidance on how loss may be quantified.
Finally, the case reinforces fiduciary principles in trustee administration where conflicts may arise. The court’s engagement with the no-conflict rule and the clean hands doctrine indicates that equitable relief will not be withheld lightly, but trustees remain accountable where their actions undermine beneficiaries’ interests, particularly in transactions that affect trust property rights while the trustee holds personal interests in the same corporate context.
Legislation Referenced
- Trustees Act 1967 (Singapore), including section 3A (statutory duty of care to exercise such care and skill as is reasonable in the circumstances when exercising general power of investment)
Cases Cited
- Armitage v Nurse (construction of exclusion of liability clauses in trust instruments; restrictive interpretation)
- Ochroid Trading Ltd v (illegality doctrine approach referenced in relation to clean hands)
- Speight v Gaunt (common law standard of care for trustees; ordinary prudent man of business)
- Wednesbury unreasonableness (standard referenced in relation to whether trustee acted in a Wednesbury unreasonable manner in administration)
Source Documents
This article analyses [2024] SGHC 310 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.