Case Details
- Citation: [2024] SGHC 310
- Title: Devin Jethanand Bhojwani and others v Jethanand Harkishindas Bhojwani
- Court: High Court of the Republic of Singapore (General Division)
- Suit Number: Suit No 521 of 2021
- Date of Judgment: 5 December 2024
- Judge: Goh Yihan J
- Plaintiffs/Applicants: (1) Devin Jethanand Bhojwani; (2) Dilip Jethanand Bhojwani; (3) Sandeep Jethanand Bhojwani
- Defendant/Respondent: Jethanand Harkishindas Bhojwani
- Legal Areas: Civil Procedure — Affidavits; Civil Procedure — Pleadings; Equity — Fiduciary relationships
- Statutes Referenced: Trustees Act 1967 (including s 3A, as referenced in the judgment)
- Judgment Length: 182 pages; 55,068 words
- Procedural Highlights (as reflected in the judgment’s headings): Applications to amend pleadings; application to admit new affidavit of evidence-in-chief out of time; extensive trial on trust administration, fiduciary duties, remedies, and trustee removal
- Cases Cited (as provided): [2024] SGHC 248; [2024] SGHC 310
Summary
In Devin Jethanand Bhojwani and others v Jethanand Harkishindas Bhojwani [2024] SGHC 310, the High Court considered a wide-ranging dispute between beneficiaries and a trustee concerning the administration of a trust holding shares in multiple companies. The plaintiffs alleged that the trustee breached fiduciary and trust duties through concealment, failure to maintain proper accounts, improper conversion of a “Founder’s Share” (and the associated “special rights”), and mismanagement in the sale and realisation of trust shares at undervalue or without adequate consideration.
The court’s analysis proceeded through both procedural and substantive stages. Procedurally, it addressed whether late evidence should be admitted and whether pleadings should be amended close to the start of trial. Substantively, it applied established principles governing trustee duties, including the duty of care (common law and statutory), duties relating to proper accounts and disclosure, and the fiduciary no-conflict principle. The court also addressed the relationship between equitable “clean hands” and common law illegality approaches, and it determined the appropriate remedies, including accounts on wilful default, surcharging, and falsification.
Ultimately, the court found multiple breaches by the trustee. It held that the trustee breached duties by converting the Founder’s Share without consideration to the trust, and that he breached duties in selling trust shares in live companies and realising shares in struck-off companies at undervalue. The court ordered monetary compensation into the trust to substitute for losses and deficiencies, and it considered whether the trustee should be removed, applying the relevant test for removal and the court’s discretion in appointing replacement co-trustees.
What Were the Facts of This Case?
The plaintiffs were beneficiaries of a trust administered by the defendant, who acted as trustee. The trust assets included shares in at least three categories of companies: (i) a company in which a “Founder’s Share” existed with special rights (referred to in the judgment as SEPL), and (ii) “live” companies and (iii) “struck off” companies, in which the trustee held trust shares that were later sold or realised. The dispute arose after the plaintiffs came to learn of the trustee’s actions affecting the trust estate, including the conversion of the Founder’s Share and the subsequent realisation of trust shares.
A central factual thread was the trustee’s management and stewardship of trust property over a prolonged period. The judgment indicates that the trustee concealed the trust from the plaintiffs until 16 September 2016. During this period, the plaintiffs alleged that the trustee commingled trust moneys and failed to maintain proper accounts. The court treated these allegations as serious because they implicated both the trustee’s fiduciary obligations and the beneficiaries’ ability to monitor and enforce their rights.
Another key factual episode concerned the conversion of the Founder’s Share. The trustee converted the Founder’s Share on 15 September 2008 in a manner that the court later characterised as a breach of trust. The conversion had the effect of negating the rights of the trust property in the form of preference share (the Founder’s Share) while the trustee held ordinary shares in the same company as absolute owner. The plaintiffs’ case was that this created a conflict or at least placed the trustee in a position where duty to the trust could conflict with personal interest, and that the conversion was effected without any consideration flowing back to the trust estate.
Finally, the trustee’s dealings with trust shares in other companies formed the basis for further allegations. The plaintiffs contended that the trustee breached duties when exercising powers to sell trust shares in two live companies, and that he breached duties again when realising shares in three struck-off companies at an undervalue. The court’s findings on remedies reflect that it treated these as not merely technical breaches but as failures in custodial stewardship and management duties, requiring compensatory and substitutive relief.
What Were the Key Legal Issues?
First, the court had to decide procedural questions about the admissibility of evidence and the scope of amendments to pleadings. In particular, it considered whether to grant permission to adduce a new affidavit of evidence-in-chief after the deadline for filing and exchanging affidavits had passed. This required applying a two-stage test of relevance and prejudice, and assessing whether the opposing party would suffer undue prejudice when new factual points were introduced close to the start of trial.
Second, the court had to determine whether amendments to pleadings should be allowed close to the start of trial, where the proposed amendment was responsive to an amended defence. This required applying the principles governing amendments in civil procedure, balancing fairness to both sides with the efficient and just disposal of disputes.
Third, and most substantively, the court had to decide multiple trust-law and equity-law issues: whether the trustee breached fiduciary duties, including the no-conflict rule; whether the trustee breached duties of care and stewardship in converting the Founder’s Share and in selling or realising trust shares; whether the plaintiffs were barred by equitable “clean hands”; and what remedies were appropriate, including accounts on wilful default, surcharging, and falsification. The court also had to consider the statutory duty of care under s 3A of the Trustees Act 1967 and the common law standard of care as articulated in cases such as Speight v Gaunt, as well as the construction of exclusion of liability clauses using the approach in Armitage v Nurse.
How Did the Court Analyse the Issues?
On procedural matters, the court applied established civil procedure principles to determine whether late evidence should be admitted and whether pleadings should be amended. For the out-of-time affidavit, the court focused on whether the proposed evidence was relevant and whether admitting it would cause undue prejudice. The judgment reflects that the court treated the timing of the affidavit and the proximity to trial as important factors, but it did not treat lateness as automatically determinative. Instead, it assessed whether the opposing party would be forced to meet genuinely new factual allegations without adequate time, thereby undermining fairness.
Similarly, for the amendment of pleadings, the court considered whether the amendment was responsive to an amended defence and whether it would prejudice the opposing party. The judgment indicates that the court allowed the amendment (SUM 678) and dismissed the application to admit new evidence out of time (SUM 663). This procedural posture is significant because it shaped the evidential and pleading boundaries within which the substantive trust claims were adjudicated.
On the trust-law merits, the court began by addressing the trustee’s duties and the standard of care. It distinguished between different categories of duties: management stewardship duties, custodial stewardship duties, and duties relating to accounts and disclosure. It also addressed the trustee’s statutory duty of care under s 3A of the Trustees Act 1967 (2020 Rev Ed), which requires trustees to exercise such care and skill as is reasonable in the circumstances when exercising general powers of investment. In parallel, the court applied the common law duty of care to manage and administer the trust as an ordinary prudent man of business would have adopted in the circumstances, referencing the Speight v Gaunt standard.
With respect to the conversion of the Founder’s Share, the court analysed whether the trustee had absolute power or discretion under the trust instrument, and whether the phrase “absolute discretion” in the will affected the trustee’s duties. The court concluded that the phrase “absolute discretion” had no bearing on the trustee’s duties under the trust. This reasoning is important because it prevents trustees from converting broad discretionary language into a licence to act without regard to core fiduciary and trust obligations. The court also rejected the proposition that there was no duty to refrain from exercising powers in a manner that falls below Wednesbury unreasonableness, clarifying that the trustee’s duties are not insulated from judicial scrutiny merely because the instrument confers discretion.
The court then addressed fiduciary conflict. It considered whether the trustee breached the no-conflict rule by approving an amendment to the company constitution that negated rights of trust property in the form of preference share while the trustee held ordinary shares in the same company as absolute owner. The court’s approach reflects a careful separation between (i) the trustee’s powers and (ii) the trustee’s fiduciary obligations. Even where corporate actions are taken through formal processes, the trustee’s position as fiduciary requires that personal interest does not conflict with duty to beneficiaries. The court’s findings indicate that the trustee’s conduct placed him in a position where duty and personal interest could conflict, and that the conversion was effected without consideration to the trust.
On remedies, the court’s analysis was structured around the nature of the breach and the appropriate remedial response. For the failure to maintain proper accounts, it considered whether an account on a wilful default basis was warranted. The court applied an applicable test for wilful default, focusing on whether the trustee displayed want of ordinary prudence in the conduct and administration of the trust. It held that the plaintiffs were entitled to an account on a wilful default basis, which has practical consequences: it increases the likelihood of more rigorous accounting and may affect the scope of what the trustee must disclose and quantify.
For the conversion breach, the court applied the remedy of surcharging. It conducted a causal inquiry to identify what a prudent trustee would have done in a hypothetical assessment. The court’s counterfactual analysis focused on whether a prudent trustee would have converted the Founder’s Share or removed its special rights but in a manner that did not occasion any net loss to the value of the trust assets. The court assessed the loss by reference to the market value of the Founder’s Share at the time of conversion and the loss of any increase in market value post-conversion, as well as income that could have been earned but for the conversion. The court also addressed valuation of the difference between the Founder’s Share and an ordinary share as at 15 September 2008.
For custodial stewardship breaches arising from unauthorised disbursements and undervalue sales, the court applied the remedy of falsification. It emphasised that where falsification is engaged, there is no causal inquiry in the same way as surcharging. Instead, the court focused on substitutive relief: disallowing the sale of company shares held on trust where the trustee sold at a price below market value, coupled with an obligation to reconstitute the trust estate in specie. This remedial framework underscores that some breaches are treated as fundamentally undermining the trust’s property position, requiring the court to restore the trust estate rather than merely compensate for quantifiable loss.
Finally, the court addressed the plaintiffs’ standing and equitable defences. It considered whether beneficiaries alleging breaches of trust came to equity with clean hands. The judgment also examined the relationship between the clean hands doctrine in equity and the Ochroid Trading approach to illegality doctrine in common law. The court concluded that the plaintiffs’ conduct did not warrant denial of equitable relief. This is a meaningful clarification: equitable clean hands is not a mechanical bar, and the court will examine whether the alleged misconduct is sufficiently connected to the relief sought and whether it would be unjust to grant equitable remedies.
What Was the Outcome?
The court found that the trustee breached multiple duties. It held that the trustee breached his trustee duties by converting the Founder’s Share in the manner he did, particularly because the conversion negated the trust’s special rights without receipt of any consideration by the trust. It also held that the trustee breached duties in selling trust shares in two live companies and in realising trust shares in three struck-off companies at an undervalue.
As a result, the court ordered compensatory relief into the trust. It required the trustee to pay sums to substitute for the value the trust would have had absent the unauthorised disbursements and to compensate for deficiencies arising from undervalue realisations. The judgment also addressed whether the trustee should be removed and applied the relevant test for removal, including consideration of whether the trustee lacked proper capacity to execute duties and whether the court should appoint some of the named beneficiaries as replacement co-trustees within a wider class.
Why Does This Case Matter?
This decision is significant for practitioners because it provides a structured, multi-layered treatment of trustee liability, procedural fairness, and remedial design. The court’s approach demonstrates that trustees cannot rely on discretionary language in trust instruments to avoid core duties, particularly where fiduciary conflict and the absence of consideration to the trust are involved. For trust administrators, the case reinforces the need to ensure that corporate actions affecting trust property are undertaken with strict regard to fiduciary obligations and that any personal interest is managed transparently and appropriately.
From a litigation perspective, the judgment is also useful for its articulation of procedural boundaries around affidavits and amendments. The court’s application of the relevance-and-prejudice framework for admitting late evidence provides guidance for both applicants and respondents on how to frame arguments about fairness, trial readiness, and the impact of introducing new factual points late in the proceedings.
Remedially, the case is valuable because it distinguishes between surcharging and falsification and explains when causal inquiry is required. It also clarifies the evidential and conceptual basis for wilful default accounts. Lawyers advising beneficiaries can draw on the court’s counterfactual method for surcharging, while lawyers advising trustees should note that courts may order substitutive restoration of trust property where custodial breaches are established.
Legislation Referenced
- Trustees Act 1967 (including s 3A)
Cases Cited
- [2024] SGHC 248
- [2024] SGHC 310
- Armitage v Nurse (approach to construction of exclusion of liability clauses in trust instruments)
- Ochroid Trading (illegality doctrine approach in common law)
- Speight v Gaunt (common law standard of care for trustees)
- Wednesbury unreasonableness (as a benchmark referenced in the context of trustee discretion)
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.