Shankar's Emporium Pte Ltd and others v Jethanand Harkishindas Bhojwani and another

• Jurisdiction: Singapore
• Judge: Tan Puay Boon JC
• Judgment Date: 10 November 2020
• Neutral Citation: [2020] SGHC 244
• Docket Number: Originating Summons No 365 of 2020
• Subject Matter: Judgments and orders,Civil Procedure
• Published date: 14 November 2020
• Defendant Counsel: Yeo Khirn Hai Alvin SC, Chang Man Phing Jenny, Gavin Neo Jia Cheng and Khoo Kiah Min Jolyn (WongPartnership LLP),Liew Teck Huat, Kanapathi Pillai Nirumalan, Ow Jiang Meng Benjamin and Ho Jun Yang Joshua (He Junyang) (Niru & Co LLC)
• Court: High Court (Singapore)
• Hearing Date: 25 September 2020
• Plaintiff Counsel: Suresh s/o Damodara, Ong Ziying Clement and Khoo Shufen Joni (Damodara Ong LLC)

Tan Puay Boon JC: Introduction

The first defendant, Jethanand Harkishindas Bhojwani (“the Husband”), is the trustee of a discretionary trust of which the second defendant, Lakshmi Prataprai Bhojwani (also known as Mrs Lakshmi Jethanand Bhojwani) (“the Wife”), was one of the beneficiaries. The Husband had previously been ordered to give an account of the trust property to the Wife in HC/OS 1407/2017 (“OS 1407/2017”), by way of the court order, HC/ORC 50/2019 (“ORC 50/2019”) dated 21 November 2018. Specifically, a list of documents (“P1”) was annexed to ORC 50/2019 detailing the categories of documents that the Husband was obliged to furnish. This obligation was made more specific in relation to the period of time for which the account had to be given in HC/OS 1339/2019 (“OS 1339/2019”), as extracted in HC/ORC 2356/2020 (“the Order”) dated 9 March 2020.

The present originating summons, HC/OS 365/2020 (“OS 365/2020”), was an application by three companies (“the Companies”) for the Order to be varied to provide that nothing in the Order and ORC 50/2019 should be taken as compelling the production or disclosure of the categories of documents at S/Ns 5, 7, and 8 in P1 (“the Corporate Documents”) by any of the three companies to either the Husband or the Wife. The three categories of documents are laid out at [12] below.

Having heard the parties, I dismissed the Companies’ application. The Companies have appealed, and I now furnish the grounds for my decision.

Background Parties

Given the considerable overlap between the present application and the prior proceedings, the detailed background can be found in my grounds of decision in OS 1339/2019, Jethanand Harkishindas Bhojwani v Lakshmi Prataprai Bhojwani (alias Mrs Lakshmi Jethanand Bhojwani) [2020] SGHC 216 (“Jethanand”). I summarise the main points briefly.

The underlying dispute arose from the last will and testament (“the Will”) of the late Harkishindas Ghumanmal Bhojwani (“the Testator”). The Husband is one of the Testator’s three sons: Jethanand at [4].

The three Companies are all incorporated in Singapore. They are Shankar’s Emporium Pte Ltd (“SE”), Malaya Silk Store Pte Ltd (“MSS”), and Liberty Merchandising Company Pte Ltd (“LMC”). The Husband is a director of all three Companies. Various family members related to the Testator and the Husband are involved in the management of the Companies. The Companies’ involvement in the dispute between the Husband and the Wife arose from the fact that various shares in the Companies (“the Shares”) are part of the subject matter of a trust established by the Testator’s Will, for which the Husband is a trustee and the Wife (previously) one of the beneficiaries.

The Will and the trust

The Testator’s Will established five discretionary trusts: Jethanand at [6]. The relevant trust in this case was established by cl 5 of the Will. The property in this trust (“the Clause 5 Trust”) was defined by cl 5.1(iv) of the Will to include, inter alia, the Shares in the Companies, as follows:¹ 9,000 shares in MSS; 150,000 shares and one founder’s share (and any conversion therefrom to shares of any other class) in SE; and one share in LMC.

The Husband is the trustee of the Clause 5 Trust. The Will defined the beneficiaries of the trust as, inter alia, the Wife and their three sons: Jethanand ([4] supra) at [7]. The exact nature of the Clause 5 Trust is not at issue in the present case, and it is sufficient to note that the Husband was given a discretionary power of appointment.

The Testator passed away on 4 March 2007 and on 1 August 2008, the Shares were transferred to the Husband: Jethanand at [10]. As such, from that date onwards, the Husband held the Shares in the Companies as a trustee for the Clause 5 Trust.

History of the dispute

Over the course of several actions, the courts have addressed the issue of the Husband’s obligation to account for the trust property to the Wife.

OS 1407/2017 and CA 231/2018

The Wife commenced OS 1407/2017 seeking an account of the trust property from the Husband. On 21 November 2018, the High Court granted the Wife’s application on the following terms as recorded in ORC 50/2019 (later amended in HC/SUM 1941/2019): 1. The [Husband] is to provide an account of the trust property by furnishing the documents set out in the document marked ‘P1’ in its amended form. 2. The time frame for furnishing the documents is from 6 to 10 weeks, as set out in P1, to be completed by 3 months, in batches. 3. Where the documents do not exist, the [Husband] is to file an affidavit to state that fact and provide an explanation if necessary. This should be filed by the end of 3 months from the date of this order. 4. Liberty to apply.

…

The annexed document, P1, provided a list of documents which the Husband was to disclose to the Wife. The present proceedings concern three categories of documents in that list, at S/Ns 5, 7, and 8, which I have referred to as the “Corporate Documents”. I reproduce the relevant parts of P1 as follows:

S/N	Description of Document
5.	Full financial statements evidencing the book value of the Shares under the Trust Assets: these would include the audited financial statements of the companies listed in Clause 5.1(4)(b)-(j) of the Will from FY 2007 to FY 2018, or until such time as they are wound up or struck off. The audited financial statements for FY 2018 are to be provided when they are available. Audited Financial Statements would ordinarily include statements by directors, independent auditors’ reports, consolidated statement of profit or loss and other comprehensive income, statements of financial position, statement of changes in equity, consolidated statements of cash flows, and notes to the financial statements.
7.	Documents evidencing any rights issues by the companies as identified in Clause 5(1)(iv) of the Will (“Companies”) from 1 August 2008 till present (e.g. Relevant company resolutions; Return of Allotment of Shares) These documents should include those relating to the Founder’s Share in [SE], which forms part of the Trust Assets
8.	Documents evidencing any conversion of the 1 Founder’s Share in [SE] to 1 ordinary share including any shareholders’ resolution, minutes of meeting or other documents explaining the reason for the conversion and the rights of the Founder’s Share which have been extinguished.

The Husband appealed against the decision. On 17 September 2019, the Court of Appeal heard the appeal in CA/CA 231/2018 (“CA 231/2018”) and dismissed it. As part of the appeal, the Court of Appeal considered the range of documents in P1 and affirmed the High Court’s orders on the documents to be provided: Jethanand ([4] supra) at [16].

HC/SUM 3013/2019

The Companies had previously made an application in HC/SUM 3013/2019 (“SUM 3013/2019”) on 17 June 2019 for leave to intervene in OS 1407/2017. This application was filed after ORC 50/2019 but before the appeal in CA 231/2018 was heard. The relevant prayers in SUM 3013/2019 were as follows:

…

2. Leave be granted for the [Companies] to intervene and be added as the 2nd, 3rd and 4th Defendants in this Originating Summons;

…

4. Leave be granted for the following sentence to be added after paragraph 1 of the Order of Court dated 21 November 2018 (HC/ORC 50/2019) (‘November Order’): ‘save that nothing in this order should be construed as compelling production or disclosure to the [Wife] or [Husband] herein by any of the 2nd, 3rd, or 4th Defendants of the documents itemized in S/Nos. 5, 7 and 8 of “P1”.’

…

[emphasis in original]

In view of the fact that the appeal was pending, the High Court adjourned SUM 3013/2019 to a date to be fixed after the appeal, since SUM 3013/2019 would have been rendered otiose if the appeal had been allowed: Jethanand at [84]. After the appeal was determined on 17 September 2019, the Companies wrote to court on 4 March 2020 for a hearing date to be fixed for SUM 3013/2019.² However, before a hearing date could be fixed, the Companies wrote in on 18 March 2020 to indicate that they would be seeking leave to withdraw SUM 3013/2019.³ In the meantime, as noted below, the Companies commenced OS 365/2020. Leave to withdraw and the relevant costs orders were granted on 9 April 2020.

OS 1339/2019

After CA 231/2018, the Husband executed a number of deeds purporting to exclude the Wife from any future interest in the Clause 5 Trust, by way of his discretionary power of appointment. The application in OS 1339/2019 was concerned primarily with the effect of these deeds. In Jethanand, I held that the deeds executed on 10 January 2020 were sufficient to exclude the Wife’s interest as a beneficiary from that date onwards. This meant that her entitlement to an account from the Husband had ceased by 10 January 2020: Jethanand at [78].

While the focus of OS 1339/2019 was on the effect of those deeds, the Husband had also raised the issue of the scope of the documents to be disclosed, citing issues relating to the Companies. He argued that the scope of the documents should be varied to account for those issues. In that case, I held that issue estoppel prevented the Husband from revisiting the scope of the documents on the basis of the alleged objections by the Companies: Jethanand ([4] supra) at [39]. In any event, I would not have granted the variation sought by the Husband, since the Companies were not before me in OS 1339/2019 (Jethanand at [84]) and, as between the Husband and the Wife, the Husband’s difficulty, if any, in obtaining the documents did not warrant a variation of the Wife’s entitlement to the account: Jethanand at [86].

In substance, the Order modified ORC 50/2019 such that the Husband’s obligation to account was given an endpoint, and reads as follows: 1. The [Husband] shall furnish an account of the trust of the trust properties...