Bansal Hermant Govindprasad and Another v Central Bank of India and Another Case

• Jurisdiction: Singapore
• Court: Court of Appeal (Singapore)
• Judgment Date: 18 January 2003
• Docket Number: Civil Appeal No 6 of 2002
• Date: 18 January 2003

Bansal Hemant Govindprasad and another

Plaintiff

and

Central Bank of India

Defendant

[2003] SGCA 3

Yong Pung How CJ

Chao Hick Tin JA

Judith Prakash J

Civil Appeal No 6 of 2002

Court of Appeal

Civil Procedure–Pleadings–Submission of no case to answer–Circumstances where submission of no case to answer will succeed–Appropriate tests applicable to submission of no case to answer–Evidence–Proof of evidence–Onus of proof–Evidence not offered in defence–Burden of proof on plaintiff to discharge–Tort–Conversion–Whether prima facie case of conversion established–Whether respondents had standing to sue–Whether appellants dealt with goods with intention to convert–Trusts–Constructive trusts–Breach of trust–Dishonest assistance in breach of trust–Whether prima facie case of dishonest assistance in breach of trust established

The appellants (“the Bansals”) were the only directors and shareholders of Natsyn Fibres Pte Ltd (“Natsyn”). Natsyn bought goods from Bhagwati Cottons Ltd (“Bhagwati”) and took out letters of credit (“LC”) benefiting Bhagwati, to pay for the goods. Upon shipment of the goods, Bhagwati presented the requisite documents (“LC documents”) to Central Bank of India (“CBI”) for negotiation. CBI stamped the documents and handed the LC documents back to Bhagwati, without receiving payment. Natsyn received the LC documents and, without paying for the same, used the documents to obtain delivery of the goods and sell them to a third party. Subsequently, Natsyn only made part-payment to CBI. Further sums remained outstanding under the letters of credit.

CBI sued the Bansals for conversion, conspiracy and dishonest assistance in breach of trust for the outstanding sums. The Bansals made a submission of no case to answer and did not adduce evidence in their defence. The trial judge found that the Bansals were liable for conversion and dishonest assistance in breach of trust.

Held, dismissing the appeal:

(1) A submission of no case to answer could succeed if either the plaintiff's evidence, at face value, did not establish a case in law; or the evidence led by the plaintiff was so unsatisfactory or unreliable that his burden of proof had not been discharged. The trial judge was conscious of both circumstances and did not apply any wrong test or principle: at [14] to [16].

(2) A prima facie case had been made out that the Bansals had dealt with the LC documents in a manner inconsistent with the rights of CBI and were thus liable for conversion: at [27].

(3) A prima facie case had been made out that the Bansals had committed dishonest assistance in breach of trust: at [36].

Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming [1995] 2 AC 378; [1995] 3 WLR 64 (folld)

Siew Kong Engineering Works v Lian Yit Engineering Sdn Bhd [1993] 1 SLR (R) 736; [1993] 2 SLR 505 (refd)

Storey v Storey [1961] P 63; [1960] 3 All ER 279 (distd)

Evidence Act (Cap 97, 1997 Rev Ed) ss 32 (b), 34

N Sreenivasan and Chia See Kim Sharon (Straits Law Practice LLC) for the appellants

Tan Tuan Meng and Wong Khai Leng (Mallal & Namazie) for the respondents.

Chao Hick Tin JA

(delivering the judgment of the court):

1 This was an appeal against the decision of Rajendran J, where he decided that the appellants, Hemant Govindprasad Bansal (“Bansal”) and his wife, Aneeta Bansal, (hereinafter collectively referred to as “the Bansals”) were liable for conversion and for dishonest assistance in breach of trust in connection with certain shipping and related documents belonging to the respondents, the Central Bank of India (“CBI”). Damages were awarded against the Bansals. We heard the appeal on 26 November 2002 and dismissed it. We now give our reasons.

The facts

2 The trial was a consolidation of three suits instituted by CBI against the Bansals and another party, Natsyn Fibres Pte Ltd (“Natsyn”). Natsyn was a company incorporated in Singapore with the Bansals as the only shareholders and directors. The action against Natsyn was not proceeded with because the latter was wound up before the trial began.

3 In 1997, Natsyn purchased certain goods from two Indian companies, Bhagwati Cottons Ltd (“Bhagwati”) and GPB Fibres Ltd (“GPB”). Bhagwati and GPB were founded by Bansal's father and were family companies. At all material times, Bansal was a director and held substantial equity interest in both companies.

4 To effect the purchase, Natsyn obtained the issue of a letter of credit (“LC”) from Campagnie Financiere De Cic Et De L'Union Europeene (“CF Bank”) and another from Mees Pierson, NV (“Mees Pierson”). Both LCs were governed by the UCP 500 and the credit was available by negotiation. The beneficiaries of the credit were Bhagwati and GPB. For the purpose of the trial, the parties had not differentiated between Bhagwati and GPB. Therefore, hereinafter, reference to “Bhagwati” shall include “GPB”.

5 Upon shipment of the goods, Bhagwati presented the requisite documents (“LC documents”) to CBI for negotiation under the LCs and was paid. CBI placed its stamp on all the documents. Subsequently, CBI handed the LC documents back to Bhagwati, without having received payment from either Bhagwati or any other party. Eventually, the documents came into the possession of Natsyn, who, without paying for the same, used the documents to obtain delivery of the goods. Thereafter, Natsyn sold the goods to a third party. By the time CBI realised what had happened and sought payment, Natsyn did not have the funds to pay in full. It effected only partial payments leaving outstanding the sums of USD1,190,893.28 and USD274,319.04 under the two LCs, which formed the subject matter of the action.

Decision below

6 The action was based on conversion, conspiracy and dishonest assistance to a breach of trust. The trial below ended with the Bansals electing to submit that they had no case to answer. The trial judge accepted that submission, in so far as the claim was based on the tort of conspiracy. In his view, there was simply nothing to indicate any conspiracy as no evidence...