Manik Thanwardas Binwani v Tulsidas Udharam Binwani and Another [2003] SGHC 100

Manik Thanwardas
Binwani v Tulsidas Udharam Binwani and Another
[2003] SGHC 100

Suit No: DA 29/2002
Decision Date: 29 Apr 2003
Court: High Court
Coram: Tan Lee Meng J
Counsel: Chan Kia Pheng (Khattar Wong & Partners) for the appellant, Sharanjit
Kaur (Khattar Wong & Partners) for the appellant, V K Rai (V K Rai
& Partners) for the respondents
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1. The appellant, Manik Thanwardas Binwani ("Manik")
appealed against the decision of the District Judge, who dismissed his
claim on behalf of the estate of his late father for part of the compensation
paid for the compulsory acquisition of No 4 North Bridge Road in 1971.
I dismissed his appeal and now give the reasons for my decision.

2. In March 1950, Udharam Dayaram Binwani (“UD”) and his
brother, Thanwardas Dayaram Binwani (“TD”), set up a partnership
called “Binwanis”. They acquired a number of properties
in Singapore and Penang, including No 4 North Bridge Road, which was
purchased in 1956 in their joint names as tenants in common in equal
shares. This Singapore property, which cost them $59,000, was paid for
with $19,000 from the assets of the partnership and an overdraft from
Chung Khiaw Bank.

3. On 30 September 1960, the partnership was terminated by a dissolution
agreement that provided, inter alia, as follows:

(i) UD would take over the assets and liabilities of Binwanis in Singapore;

(ii) TD would take over the assets and liabilities of Textile Hall,
a business in Penang;

(iii) No 4 North Bridge Road was to be sold at the best market price
and until it was sold, it was to remain the collective property of UD
and TD.

4. UD passed away in May 1964 and his son, Tulsidas Udharam Binwani
(“Tulsidas”), the respondent, was appointed one of the executors
of his estate. The other executor, the second respondent, Morley Udharam
Binwani, passed away before the trial of the action. TD died in December
1978 and his son, Manik, the appellant, was appointed the administrator
of his estate.

5. Several years before TD’s death, the Government acquired No
4 North Bridge Road on 12 October 1971 and a sum of $104,930 was offered
as compensation for the compulsory acquisition. An appeal was lodged
against the award and for this purpose, a sum of $5,000 was required
as a deposit. In the meantime, Tulsidas requested the Collector of Land
Revenue to pay the initial award of $104,930 less the said deposit of
$5,000 to Chung Khiaw Bank, which had provided an overdraft facility
to UD and TD for the purchase of the said property.

6. After the hearing of the appeal against the initial award, the compensation
for the acquisition of No 4 North Bridge Road was increased by $44,970,
with interest payable at the rate of 6% per annum from 1 December 1971
until the date of payment. This additional sum was paid into court because
of a dispute between TD and his nephew, Tulsidas, with respect to how
the additional compensation should be apportioned between them.

7. It was not until August 1992 that half of the additional award, totalling
$22,485, and interest was paid out to TD’s estate pursuant to
an order of the High Court in Originating Summons No 449 of 1979. As
for the remaining $22,485, which Manik concedes is due to UD’s
estate, it had still not been paid out in late 2001.

8. In the action presently being considered, Manik claimed in his capacity
as the administrator of his father’s estate the sum of $49,965
from UD. This sum is half the initial compensation of $104,930 less
the sum of $5,000 which was deposited with the Accountant-General for
the appeal against the initial award. Manik’s case is that the
initial award of $104,930 should have been divided equally between TD
and UD’s estate. He asserted that Tulsidas fraudulently misappropriated
his father’s share of the initial award by arranging for that
sum to be paid to Chung Khiaw Bank.

Whether Tulsidas is guilty of fraud

9. It is trite law that a fiduciary relationship exists between partners.
Indeed, in Helmore v Smith (1866) 38 CH D 436, Bacon VC observed
that a stronger case of fiduciary relationship cannot be conceived than
that which exists between partners. It is also clear that after the
dissolution of a partnership, the fiduciary relationship between partners
does not end in relation to matters pertaining to the winding up of
the affairs of the partnership. In Thompson’s trustee in bankruptcy
v Heaton
[1974] 1 All ER 1239, 1249, Pennycuik VC explained:

Upon the dissolution of a partnership, and in the absence of any agreement
to the contrary, … for the purposes of winding up, the partnership
is deemed to continue; the good faith and honourable conduct due from
every partner to his co-partners during the continuance of the partnership
being equally due so long as its affairs remain unsettled; and that
which was partnership property before, continuing to be so for the purpose
of dissolution, as the rights of the partners require.

10. It follows that UD and, after his death, his executors had a fiduciary
relationship with TD with respect to the distribution of partnership
property. Relying on Waimiha Sawmilling v Waione Timber Co Ltd [1926] AC 101, where the Privy Council made it clear that fraud implies
some act of dishonesty, the trial judge said that for Manik to succeed
in his claim, he must establish that TD’s estate was deprived
of its share of the compensation award by an act of dishonesty or deception
on the part of Tulsidas.

11. As has been mentioned, part of the compensation money had already
been paid to the estate of TD more than 10 years ago. Notwithstanding
this, Tulsidas asserted that he did not misappropriate any money due
to TD because the latter had agreed to give up his interest in the said
property for $29,026.82 sometime between 30 September 1960 and February
1961. He added that it was further agreed that UD and/or Binwanis would
deliver cash and goods to TD and Textile Hall, which was TD’s
business in Penang, in satisfaction of the sum due to him. As such,
TD was no longer one of the owners of No 4 North Bridge Road when it
was acquired in 1971.

12. For the purpose of determining whether or not TD had divested his
interest in No 4 North Bridge Road, the 1960 ledger of the Binwanis
was carefully considered by the trial judge. Both Manik and Tulsidas
called expert witnesses to interpret the said ledger, in which was recorded
an amount of $29,026.82 under the title “Property 4 North Bridge
Road”. The trial judge found the evidence of Manik’s expert
witness, Mr Michael Grenville Gray, a certified public accountant, unhelpful
and noted that he had not examined the accounts of Textile Hall, TD’s
business in Penang, before rendering his opinion. Mr Gray admitted that
he did not know whether there was a receipt of $29,026.82 with respect
to TD’s half share of No 4 North Bridge Road in the Textile Hall’s
accounts. What troubled the trial judge was that Mr Gray was “unable
to offer the Court a clear, steadfast and unwavering interpretation”
and that he “appeared to have shifted his ground on material aspects
of his opinion”.

13. In contrast, the trial judge found the evidence of Tulsidas’
expert witness, Mr Zafrullah bin Ahamed Sha, who is also an accountant,
more helpful. After evaluating his evidence, the trial judge concluded
as follows in para 54 of her judgment:

[I] prefer Mr Zafrullah’s expert evidence and accept that it was
more probable than not that TD’s interest in No 4 was liquidated
and quantified at $29,026.82 and TD’s firm, Penang Textile Hall,
had received the payment of $29,026.82 from UD or Binwanis in diminution
of the amount owed to TD. In this connection, it is significant that
TD himself had in his note juxtaposed the entry “1/2 share in
property No 4 North Bridge Road – $29,026.82” amongst the items
of goods and cash which he had taken on 31 December 1960, January and
February 1961 to reduce UD’s indebtedness to him. As such, it
is improbable that this entry was part of a dissolution wish list. Rather,
it was part of a list itemising what TD had already received from UD
and/or Binwanis pursuant to the dissolution, and was evidence of TD’s
agreement to accept $29,026.82 in satisfaction of his shares in No 4.
To this extent, the dissolution agreement was varied.

14. The trial judge also considered the effect of clause 3(a) of the
dissolution agreement between UD and TD. Under its terms, UD was to
manage No 4 North Bridge Road until it was sold and there was to be
a separate account for the income derived from the property and the
expenditure incurred. The understanding must have been that the income
generated from and the expenditure incurred on this property were to
be shared equally. However, from 1960 until 1971, when the said property
was acquired, neither UD nor Tulsidas had looked to TD or his estate
for any contribution towards the expenditure on the said property. The
trial judge said that the fact that no claim had been made for contribution
towards the expenses of No 4 North Bridge Road supported Tulsidas’
contention that TD had divested his interest in the said property in
favour of UD.

15. As the trial judge held that TD was no longer one of the owners
of No 4 North Bridge Road when it was compulsorily acquired in 1971,
it followed that Tulsidas was not guilty of fraudulent misappropriation
of any part of the compensation paid for the said acquisition. I agreed
with her decision, which was supported by cogent reasons.


16. Another ground relied on by the trial judge for rejecting Manik’s
claim was laches.

17. Manik testified that by March 1977, he knew that Tulsidas had fraudulently
misappropriated his father’s share of the compensation paid for
the compulsory acquisition of the said property. On 12 October 1977,
his solicitors, Kirpal Singh & Co, wrote to Tulsidas to demand the
payment of TD’s alleged half share of the initial award. In his
reply on 15 October 1977, Tulsidas stated that TD had “forfeited
his rights when he deviated from the terms of the dissolution agreement
and took half the share in [No 4 North Bridge Road] at [a] value fixed
by both the partners at that time”. On 18 October 1977, Kirpal
Singh & Co sought additional information from Tulsidas on the alleged
deviation from the terms of the dissolution agreement and on the value
that was allegedly agreed upon between UD and TD for the latter’s
share in the said property. On 9 November 1977, Tulsidas replied that
the dispute could not be settled even if he provided the additional
information sought and added that he was prepared to accept service
of a writ. Kirpal Singh & Co’s involvement in the dispute
apparently ended with Tulsidas’ reply. The trial judge said that
Manik was unable to give a satisfactory explanation for his inaction

18. The trial judge found that Tulsidas had been prejudiced by the exceedingly
long delay on Manik’s part to prosecute his claim. In his letter
of 9 November 1977 to Kirpal Singh & Co, Tulsidas alluded to a ‘claim’
which he had against TD for contribution towards the expenses of maintaining
No 4 North Bridge Road up to the time it was compulsorily acquired if
TD really had a half share in the compensation money. It transpired
during the trial that Tulsidas has since lost the requisite documentary
evidence to prove the expenses incurred. More importantly, the long
delay had caused Tulsidas’ claim for these expenses to be time-barred.

19. The trial judge, who relied on Mechanical Handling Engineering
(S) Pte Ltd v Material Handling Engineering Pte Ltd
2 SLR 205
and the decision of the Court of Appeal in Tay Joo
Sing v Ku Yu Sang
3 SLR 719
, summed up the position in para 40 of her judgment in
the following terms:

[Manik] waited for 15 1/2 years till August 1992 to make a claim for
the half share and even then, it was not for the full claim of $49,965
but only for $22,485 plus the interest thereon that was then lying in
court. It was only upon the commencement of this action in 1993 that
Manik finally sought to be paid the full sum of $49,965 by Tulsidas.
…. Even when … Manik … had the benefit of a solicitor’s
assistance and advice on the claim in 1977-78, [he had no explanation
whatsoever for his] failure to commence proceedings then…. In
the premises, I am of the view that by reason of the prolonged, inordinate
and inexcusable delay on Manik’s part, Manik had acquiesced or
waived any fraudulent conduct on Tulsidas’ part and has accordingly
been guilty of laches.

20. No credible reason was given as to why the trial judge was wrong
in her conclusion.


21. The arguments that had been raised during the trial were repeated
during the appeal. In my view, the trial judge furnished valid reasons
for holding that TD had given up his half share of No 4 North Bridge
Road before 1971. She also had ample reasons for finding that there
was prolonged, inordinate and inexcusable delay in the prosecution of
Manik’s claim to part of the compensation for the compulsory acquisition
of No 4 North Bridge Road. As I was not persuaded that she had erred,
I dismissed the appeal against her decision with costs.