Case Summaries

Navin Jatia and others v Ram Niranjan and another [2020] SGCA 31

SUPREME COURT OF SINGAPORE

6 April 2020

Case summary

Navin Jatia and others v Ram Niranjan and another [2020] SGCA 31
Civil Appeals Nos 202, 203 and 205 of 2018

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Decision of the Court of Appeal (delivered by Woo Bih Li J):

Outcome: CoA allows Mr Navin Jatia’s appeal in part and reverses the High Court’s decision to set aside the August 2015 Deed on the ground of material non-disclosure.

Background facts

1 Suit No 911 of 2016 (“the Suit”) was commenced by Mr Ram Niranjan (“Mr Ram”) against his son Mr Navin Jatia (“Mr Navin”), daughter-in-law Mdm Samridhi Jatia (“Mrs Navin”), Evergreen Global Pte Ltd (“Evergreen”), and Mr Ram’s wife, Mdm Shakuntala Devi (“Mrs Ram”). Evergreen is a Singapore-incorporated company which was founded by Mr Ram and played a nominal role in the Suit.  While Mrs Ram was named as the fourth defendant, her case was aligned with that of Mr Ram. Mrs Ram also commenced a third party action against the Navins which overlapped substantively with Mr Ram’s claims.

2 The cross-appeals concerned, in the main, various factual findings made by the High Court judge (“the Judge”) in relation to the validity or legal effect of four instruments, namely:

(a) a memorandum of understanding dated 9 December 2006 between the Rams and the Navins (“the 2006 MOU”);

(b) a sale and purchase agreement dated 2 January 2015 between Mrs Ram and Mr Navin dated 2 January 2015 (“the January 2015 SPA”); and

(c) a deed dated 6 August 2015 (“August 2015 Deed”), along with an agreement dated 1 September 2015 (“the September 2015 Agreement”) between the Rams and the Navins.

3 The 2006 MOU was entered into in an attempt to resolve the disputes which had arisen between Mr Ram and Mr Navin. Among other things, Mr Navin was obliged under the 2006 MOU to pay an “Annual Allowance” to the Rams. The 2006 MOU also provided the Rams with a right to stay with full comforts in a property at Poole Road owned by Mr Navin (“the Poole Road Property”) for their entire lives.

The 2006 MOU did not end the disputes between Mr Ram and Mr Navin. Mr Navin did not pay the Rams the Annual Allowance after October 2013. There were also disputes regarding investments in bonds which Mr Navin had managed using Mr Ram’s moneys (“the Bonds”). The sale proceeds of the Bonds amounted to US$4,270,058.83. While Mr Ram claimed that he was entitled to all the sale proceeds, Mr Navin held onto the entire sum as he wanted to discuss a global settlement with Mr Ram arising from their various disputes. Mr Navin also claimed that he had disputed Mr Ram’s entitlement to all the sale proceeds, as the Bonds were a joint investment between Mr Navin and Mr Ram in about equal shares.

5 Disputes also arose in relation to the January 2015 SPA which was an agreement for the sale of Mrs Ram’s 25% shareholding in Evergreen to Mr Navin for US$1.962m. While the January 2015 SPA provided that the shares would only be transferred to Mr Navin upon Mrs Ram’s demise, Mr Navin subsequently transferred the shares to himself following Mrs Ram’s revocation of a power of attorney which she had given to Mr Navin in respect of her shares. Mrs Ram had asked Mr Navin to return these shares. Mr Ram also claimed these shares.

6 These disagreements led to the August 2015 Deed which provided that Mr Ram would be paid US$2m in full and final settlement of the issues between the parties.

7 Finally, another issue in the Suit was the Rams’ right to live in the Poole Road Property. In 1993, Mr Navin exercised an option to purchase the Poole Road Property for S$2.88m, which effectively functioned as the family home until 2016. The Navins alleged that Mr Ram had behaved unreasonably while living at the Poole Road Property. The Rams, on the other hand, alleged that the Navins had conspired to remove or constructively evict them from the Poole Road Property. On 1 August 2016, the Rams were arrested and charged for criminal trespass. They claimed that they have not been able to access the Poole Road Property to retrieve their belongings since then. In addition, many of their items were missing.

Decision below

8 The August 2015 Deed and the September 2015 Agreement: The Judge held that since the August 2015 Deed was a family arrangement (ie, an agreement between members of the same family which is intended to be generally and reasonably for the benefit of the family), the parties were subject to a duty to disclose material facts. The Judge found that
Mr Ram had contributed 89.55% of the funds used to purchase the Bonds and that his entitlement was US$3,442,378.29. However, Mr Navin did not disclose Mr Ram’s share of the sale proceeds from the Bonds. This was a material fact as the August 2015 Deed purported to settle all the existing disputes for US$2m. The August 2015 Deed was thus set aside. The Judge also set aside the September 2015 Agreement as it merely confirmed that a full and final settlement had been reached under the August 2015 Deed. Consequently, Mr Ram was ordered to return the sum of US$2m under the August 2015 Deed to Mr Navin, subject to a set-off against amounts that Mr Navin had been ordered to pay Mr Ram. Mr Navin was found to hold the sum of US$3,442,378.29 being Mr Ram’s share of the sale proceeds on trust for Mr Ram, and was ordered to pay this sum to Mr Ram.

9 The 2006 MOU: The Judge found that the 2006 MOU was binding and the parties had intended to create legal relations. As a result, the Judge ordered that Mr Navin comply with his various obligations under the 2006 MOU, including the payment of the Annual Allowance. Another consequence of the Judge’s upholding of the 2006 MOU was that the Rams had a contractual licence to stay at the Poole Road Property with full comforts for the rest of their lives. However, the Judge held that this was subject to an implied term that the Rams did not misbehave in such a way as would make it unreasonable for them to insist on staying at the Poole Road Property (“the Implied Term”). Mr Ram was found to have breached the Implied Term and the Judge held that Mr Navin was entitled to revoke Mr Ram’s contractual licence to stay at the Poole Road Property. With regard to Mrs Ram, the Judge found that she had decided on her own not to continue residing at the Poole Road Property, and accordingly, that Mr Navin had not breached the contractual licence in respect of Mrs Ram either.

10 The January 2015 SPA: The Judge dismissed Mrs Ram’s attempts to rely on undue influence, economic duress, unconscionability, non est factum and misrepresentation to set aside the January 2015 SPA. The Judge also held that Mrs Ram had received valid consideration from Mr Navin under the January 2015 SPA.   

11 The Poole Road Property: The Judge found that there was no evidence of any common understanding for the Rams to have an irrevocable right to live in the Poole Road Property, and therefore dismissed Mr Ram’s proprietary estoppel claim. The Judge dismissed the Rams’ claims for a declaration that Mr Navin held the Poole Road Property on remedial constructive trust as the basis for this claim had not been established. The Judge also found that the evidence fell short of establishing a conspiracy on the part of the Navins to remove or constructively evict the Rams from the Poole Road Property. Neither was there any evidence that Mr Navin had converted or failed to return certain items which had been left by the Rams at the Poole Road Property to them.

The cross-appeals

12  Civil Appeal No 202 of 2018 was the appeal by Mr Navin, Mrs Navin and Evergreen against the Judge’s decision in respect of the August 2015 Deed and the 2006 MOU. First, the Navins contended that the Judge erred in setting aside the August 2015 Deed on the ground of material non-disclosure. Second, the Navins contended that the Judge erred in finding that there was an intention to create legal relations in respect of the 2006 MOU.

13 Civil Appeal No 205 of 2018 and Civil Appeal No 203 of 2018 were Mr Ram’s and Mrs Ram’s appeals respectively. These concerned the Judge’s decision on various issues, most notably in respect of his findings concerning the Poole Road Property and the January 2015 SPA.

The Court’s decision

The August 2015 Deed

14 The Court observed that it was questionable whether a duty of disclosure arose in all family arrangements. The underlying rationale for imposing a duty of disclosure on parties to a family arrangement is that the law presumes that parties to a family arrangement repose a certain degree of trust and confidence in one another, such that there is an obligation to make full and frank disclosure of all material facts. However, where there is no relationship of trust and confidence between the counterparties to the contract, it would seem, prima facie, that the duty is not engaged (at [52]–[57]).

15 As the Judge noted, the relationship between the Rams and Mr Navin at the time that the August 2015 Deed was signed was “anything but one of trust and confidence” (at [58]).

16 Nevertheless, it was not necessary to reach a conclusion as to whether there was a duty of disclosure on Mr Navin because even if there was such a duty, he did not breach this duty. It was not part of Mr Ram’s pleaded case that Mr Navin had to disclose the extent of
Mr Ram’s entitlement to the sale proceeds. Mr Ram’s position, even at the time the August 2015 Deed was entered into, was that he was entitled to 100% of the sale proceeds. Accordingly, on Mr Ram’s case, what Mr Navin claimed to be Mr Ram’s entitlement to the sale proceeds was never a fact that had to be disclosed to begin with, let alone a material fact. The Court thus held that the August 2015 Deed was valid and ought to be upheld (at [61]–[64] and [70]).

Consequences of upholding the August 2015 Deed

17 The Court upheld the Judge’s decision that the 2006 MOU was binding on the parties. The parties had intended to create legal relations and the 2006 MOU was supported by consideration (at [74][76]). The Court held that the August 2015 Deed did not have the effect of revoking and superseding the 2006 MOU in its entirety. Rather, the August 2015 Deed only sought to determine the disagreements which had created disharmony within the family or amongst the individual members. Therefore, only those parts of the parties’ previous agreements, including the 2006 MOU, which pertained to the issues that had arisen by the time the August 2015 Deed was entered into, had been superseded (at [78]).  

18 The Court held that there were four live issues which were settled under the August 2015 Deed. These were the disputes over:

(a) the sale proceeds of the Bonds (at [82]);

(b)  Mrs Ram’s shares transferred to Mr Navin under the January 2015 SPA (at [83]–[84]);

(c) the Annual Allowance (at [87]–[90]); and

(d) the ownership of the Poole Road Property (at [91]).

20 As for Mr Ram’s claims of proprietary estoppel and remedial constructive trust, the Court upheld the Judge’s finding that there was no common understanding for the Rams to have a life interest in the Poole Road Property. In any case, any prior common understanding would have been superseded by the contractual license under the 2006 MOU. The claims of proprietary estoppel and remedial constructive trust could not succeed (at [92]–[96]).

21 The Court upheld the Judge’s finding that the contractual license under the 2006 MOU was subject to the Implied Term that the Rams did not misbehave in such a way as would make it unreasonable for them to insist on staying at the Poole Road Property. There was no reason to overturn the Judge’s findings that Mr Ram had breached the Implied Term and that Mrs Ram had voluntarily decided not to return to the Poole Road Property (at [98]–[101]).

22 The Court held that there was no basis to overturn the Judge’s decision to reject the Rams’ claims for conspiracy as well as for conversion and/or detinue (at [102]–[103]).

23 Accordingly, the Court made the following orders:

(a) Given that the August 2015 Deed was upheld, the Court set aside the Judge’s order for Mr Ram to return the sum of US$2m to Mr Navin (ie, the negotiated sum under the August 2015 Deed) (at [106]);

(b) Since the August 2015 Deed settled the issues relating to the Annual Allowance and the Bonds, the Court set aside the Judge’s orders for Mr Navin to pay the Annual Allowance, both as regards the arrears for the years 2014 to 2017, and Mr Navin’s continuing obligation to pay the Annual Allowance. The Court also set aside the Judge’s order for Mr Navin to pay Mr Ram US$3,442,378.29, representing Mr Ram’s 89.55% share of the sale proceeds (at [107])

This summary is provided to assist in the understanding of the Court’s judgment. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s judgment.

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