Jethanand Harkishindas Bhojwani v Lakshmi Prataprai Bhojwani (alias Mrs Lakshmi Jethanand Bhojwani)

[1] HC/OS 1339/2019 (“OS 1339/2019”) filed on 24 October 2019 was an application by the plaintiff, Jethanand Harkishindas Bhojwani, for a declaration that court orders that had been previously made in HC/OS 1407/2017 (“OS 1407/2017”) were no longer operative, and, further or in the alternative, for a variation of the said orders. These orders in HC/ORC 50/2019 (“ORC 50/2019”) pertained to the plaintiff’s obligation to disclose certain documents to the defendant, Lakshmi Prataprai Bhojwani, in fulfilment of his obligation as trustee to give an account of the trust property to the defendant as beneficiary of the trust under the last will and testament (“the Will”) of the late Harkishindas Ghumanmal Bhojwani (“the Testator”). As the parties have taken on different roles in various legal proceedings, and with the parties’ consent, I will refer to the plaintiff as the “Husband”, and the defendant as the “Wife”, although interim judgment has already been given in separate divorce proceedings.

[2] The basis of the Husband’s application in OS 1339/2019 was two sets of deeds that he had executed after the Court of Appeal made its decision in the appeal from OS 1407/2017 in CA/CA 231/2018 (“CA 231/2018”). On 3 October 2019, the Husband executed a “Deed of Advancement”. On 10 January 2020, he further executed a “Deed” and a “Deed of Appointment”. The Husband argued that by either of these sets of deeds, he had excluded the Wife as a beneficiary of the trust and was no longer liable to give an account to her. He also made further arguments relating to the Wife’s alleged conduct, which I will detail below.

[3] Having considered the parties’ submissions, I granted the Husband’s application in part, ordering the Husband to provide an account of the trust property by furnishing the documents set out in the document “P1” annexed to ORC 50/2019, but only for the period for which the Wife was a beneficiary, ie, until 9 January 2020, the day before the Deed and Deed of Appointment were executed. The Wife and Husband have filed an appeal and cross-appeal respectively. I now furnish the grounds for my decision.

[4] The Husband’s father, the Testator, was the patriarch of the Bhojwani family. He passed away in 2007 and was survived by three sons, namely the Husband, Jaikirshin Harkishindas Bhojwani (“Mr Jaikirshin”), and Moti Harkishindas Bhojwani (“Mr Moti”).

[5] The Husband was married to the Wife at the time that the Will was written and when the Testator passed away. The Wife had filed for divorce on 5 October 2017, and interim judgment was granted on 29 October 2018. The Husband and Wife have three sons (collectively, “the Sons”) – Devin Jethanand Bhojwani (“Mr Devin”), Dilip Jethanand Bhojwani (“Mr Dilip”), and Sandeep Jethanand Bhojwani (“Mr Sandeep”) – who featured in these proceedings, although they were not parties.

[6] This case concerned trusts established under the Testator’s Will. Under the Will, the Testator’s estate (“the Estate”) was dealt with in various parts. Each of his three sons (including the Husband), was appointed as trustee of each of the different parts for the benefit of their immediate families. In total, five discretionary trusts were constituted by the Will: (a) one under cll 4.1 and 4.2 for specific property in favour of Mr Moti’s family; (b) one under cll 5.1 and 5.2 for specific property in favour of the Husband’s family; and (c) three under cl 7 for each of one-third of the residue of the Estate for the Husband, Mr Jaikirshin, and Mr Moti, to each hold on trust for their respective families.

[7] The Husband was appointed as a trustee of a trust under cl 5.1 of the Will (“the Clause 5 Trust”). Clause 5.1(ii) defined “the beneficiaries” as, inter alia, the Wife and the Sons. The property in the Clause 5 Trust was defined under cl 5.1(iv) of the Will, and included the property at 32 Branksome Road, Singapore (“the Branksome Property”), and shares in various companies (“the Clause 5 Shares”).

[8] Clause 5.2 of the Will, which was at the heart of the present dispute, reads as follows:

The “Trust Period” was defined under cl 5.1(i) as a period of 30 years commencing from the date of the Testator’s death.

[9] Under cl 7(b) of the Will, the Husband was also appointed as trustee of a trust over one-third of the residue of the Estate (“the Clause 7(b) Trust”), in favour of the same class of beneficiaries above. The material parts of cl 7 read:

[10] The Testator passed away on 4 March 2007. Mr Moti was granted probate on 12 February 2008: Lakshmi Prataprai Bhojwani (alias Mrs Lakshmi Jethanand Bhojwani) v Moti Harkishindas Bhojwani [2019] 3 SLR 356 (“Moti”) at [17] (see [11] below). I set out, in summary form, what happened to the various assets in the Clause 5 and Clause 7(b) Trusts:

(a) On 1 August 2008, the Clause 5 Shares were transferred to the Husband: Moti at [18].

(b) On 12 October 2016, Mr Moti transferred the Branksome Property to the Wife at the Husband’s request. No deed was executed at the time under the Clause 5 Trust. It appeared that the Husband had simply requested Mr Moti to perform the transfer after the Sons agreed for the Wife to receive the Branksome Property: see the Court of Appeal’s oral judgment in CA 231/2018 (“CA 231/2018 Judgment”) at para 4.

(c) As for the one-third of the residue of the Estate, it appeared that it would have been completely used to meet the expenses of the Estate: Moti at [20]. As no issue concerning the residue appeared to be raised in the present proceedings, I have addressed this in the manner stated at [32] below.

[11] The Wife had applied to the High Court in HC/OS 1229/2017 for Mr Moti to give an account of the trust property: Moti at [1]. While those proceedings were not directly relevant to the present case, they formed an important part of the background. Judgment in that matter was given on 18 January 2018. The High Court found that Mr Moti, as executor of the Estate, owed the duty to account to the Wife for the following properties in the stated periods of time:

(a) the Branksome Property from 4 March 2007 to 12 October 2016 (when it was transferred to the Wife): Moti at [42];

(b) the Clause 5 Shares from 4 March 2007 to 1 August 2008 (when they were transferred to the Husband): Moti at [41]; and

(c) one-third of the residue of the Estate from 4 March 2007 up to the point when it was completely used to meet the Estate-related expenses: Moti at [43].

[13] On 18 December 2017, the Wife filed the application in OS 1407/2017 seeking an account of the trust property in the Clause 5 and Clause 7(b) Trusts (collectively, “the Trusts”) from the Husband. The High Court granted the Wife’s application on the following terms recorded in ORC 50/2019 (as amended in HC/SUM 1941/2019):

[15] At the hearing on 21 November 2018, the High Court gave brief reasons for its decision as follows:

[16] The Husband appealed against the decision in OS 1407/2017. The Court of Appeal heard the appeal in CA 231/2018 on 17 September 2019 and affirmed the orders made. As the oral judgment had a significant role in the present dispute, I set it out in full here:

[17] Soon after that, on 3 October 2019, the Husband executed a document entitled: “Deed of Advancement”. The material terms of the Deed of Advancement were as follows:

[18] The Deed of Advancement was witnessed and signed. It bears noting that the Deed of Advancement only made reference to the Clause 5 Trust and the properties defined under cl 5.1(iv) of the Will.

[19] On 8 October 2019, this Deed of Advancement was then sent by the Husband’s solicitors to the Wife’s solicitors, Mr Sandeep’s solicitors, Mr Devin, and Mr Dilip. On 24 October 2019, the Husband filed the application in OS 1339/2019, which made express reference to the Deed of Advancement.

[20] On 3 December 2019, the Husband also filed a suit against the Wife, Mr Devin, Mr Sandeep, and the Wife’s solicitors in the divorce proceedings, in HC/S 1242/2019 (“S 1242/2019”). In gist, the Husband claimed that he had kept various materials on his personal laptop, to which he had a right of confidentiality, which right was breached by the parties against whom the suit was brought. Mr Devin and Mr Sandeep had allegedly taken his laptop and obtained data and documents on that laptop, which they then allegedly supplied to the Wife for the purposes of the divorce proceedings. The Husband also alleged that the solicitors, having been given the data, retained and used it in the divorce proceedings when they knew or ought to have known of the private and confidential nature of the data vis-à-vis the Husband. The Husband alleged that some of that data and documents touched on the property in the Trusts.

[22] On 10 January 2020, the Husband executed a deed, entitled simply, “Deed”, which was intended to be “in addition to the Deed of Advancement dated 3 October 2019”, and which provided:

[23] On that same day, the Husband executed a “Deed of Appointment”. After making reference to the terms of the Clause 5 Trust stated in the Will, the Deed of Appointment stated as follows:

[24] The effects of the Deed of Advancement, the Deed, and the Deed of Appointment respectively are disputed in the present case.

[25] Since the Deed and Deed of Appointment did not yet exist when OS 1339/2019 was first filed, the Husband filed HC/SUM 138/2020 (“SUM 138/2020”) seeking leave to amend the originating summons. I heard the application for leave to amend at the same hearing as the substantive dispute. As there is no appeal against my decision to allow the amendment, I only set out my conclusion and its effect on the substantive dispute.

[26] The application for leave to amend focused on a proposed amendment to prayer 2 of OS 1339/2019 as follows (the proposed amendment underlined):

[27] On 9 March 2020, I allowed the application in SUM 138/2020, and proceeded to consider OS 1339/2019 and HC/SUM 5872/2019 (“SUM 5872/2019”), the latter being the Wife’s striking out application, on the footing of the amended prayer. Pursuant to my directions, the Husband filed an amended OS 1339/2019 on 10 March 2020. Any reference to OS 1339/2019 in the following should be treated as a reference to the originating summons as amended.

[28] In OS 1339/2019, the Husband sought the following reliefs:

[29] After OS 1339/2019 was filed, the Wife filed SUM 5872/2019 applying for OS 1339/2019 and the Husband’s affidavit in support dated 24 October 2019 to be struck out under O 18 r 19(1) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”) and/or the court’s inherent jurisdiction. Both SUM 5872/2019 and OS 1339/2019 were fixed to be heard together. Given how the case developed, the present grounds of decision deal with both OS 1339/2019 and SUM 5872/2019, although the emphasis is on the merits of the application in OS 1339/2019.

[32] I note here that while the Clause 5 Trust and the Clause 7(b) Trust are distinct trusts under the Will, the parties focused their arguments on the Clause 5 Trust and the deeds executed by the Husband in October 2019 and January 2020 only made reference to cll 5.1 and 5.2 of the Will. Therefore, I considered this case on the footing of the arguments surrounding the Clause 5 Trust, but recognised that in the absence of any arguments specific to the Clause 7(b) Trust, my conclusion would affect the Trusts as a whole, subject to the effect of the deeds as circumscribed by their scopes.

[33] It was not disputed by the parties that if the Wife remained a beneficiary of the Trusts, she would be entitled to an account and, hence, the documents under ORC 50/2019. This was the result of OS 1407/2017 as confirmed by the Court of Appeal in CA 231/2018. The central question in this case centred on how the court should deal with the changed circumstances arising from: (a) the Deed of Advancement dated 3 October 2019, or the Deed and Deed of Appointment both dated 10 January 2020; and/or (b) the evidence relating to the Wife’s alleged possession of the documents relating to the Trusts.

[34] I deal with the issues raised in the following sequence, noting that the resolution of the first issue may be dispositive of some of the remaining issues:

(b) Was the Wife’s entitlement to the account and documents affected by:

(i) the Deed of Advancement, the Deed, and/or the Deed of Appointment?

(c) Should the scope of the documents be varied for the above reasons, and/or because the Live Companies have raised issues about providing such documents to the Husband?

[35] The doctrine of res judicata consists of three “conceptually distinct but interrelated principles”: (a) cause of action estoppel; (b) issue estoppel; and (c) the “extended doctrine” of res judicata, or the defence of “abuse of process”: Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal and other matters [2017] 2 SLR 12 (“Turf Club Auto”) at [82]. Cause of action estoppel was not argued by the Wife in the present case, and, in any case, I did not think that the present proceedings were based on the same cause of action as in OS 1407/2017. Therefore, I deal only with issue estoppel and abuse of process in this section.

[36] The Court of Appeal identified four conditions for issue estoppel to apply (Turf Club Auto at [87]). First, there must be a final and conclusive judgment on the merits. Second, the judgment must be by a court of competent jurisdiction. Third, the two actions that are being compared must involve the same parties. Fourth, there must be identity of subject matter in the two proceedings. In the present case, the first, second, and third conditions were met. The only issue was whether there was an identity of subject matter in OS 1407/2017 (and CA 231/2018) and OS 1339/2019. As the Court of Appeal summarised in Turf Club Auto at [108], there are three further sub-requirements under the fourth condition:

[39] Turning then to the scope of the documents, apart from the above two arguments, the Husband also raised the argument that the Live Companies, whose shares were included in the Clause 5 Shares, were not willing to disclose the documents to him for the purpose of furnishing them to the Wife. I found that issue estoppel applied to this issue. The issue of the scope of the documents to be disclosed was litigated in OS 1407/2017 and in CA 231/2018. As part of his argument that the scope of ORC 50/2019 was too broad, the Husband had contended that the documents within the Live Companies’ possession were not in his power and control. As part of that argument, the Husband then argued in his skeletal submissions before the Court of Appeal:

[41] Beyond issue estoppel, I also considered whether raising these arguments would constitute an abuse of process under the extended doctrine of res judicata. As the High Court stated in Goh Nellie v Goh Lian Teck and others [2007] 1 SLR(R) 453 at [53]:

[42] In respect of the Husband’s claim that the deeds executed in October 2019 or January 2020 had changed the Wife’s position, I did not find that there was an abuse of process, since those facts clearly arose after the prior proceedings. The fact that he was trying to achieve what he had failed to do before was not sufficient reason to conclude that there was an abuse of process, given that there was no rule prohibiting the Husband from executing the deeds in October 2019 or January 2020. Whether the deeds had the effect intended was, as I have already noted, a separate question from whether the present proceedings should be considered by the court.

[43] I had more difficulty with the Husband’s arguments concerning the allegations that Mr Devin and Mr Sandeep had taken his data and documents, and that the Wife thereby already had the documents that she then sought in OS 1407/2017. The issue here is that the underlying facts had already occurred before OS 1407/2017 was decided. On the Husband’s own arguments, Mr Devin and Mr Sandeep had taken the data and documents from his personal laptop sometime in 2015–2016. The Husband argued that he could only raise the issue in the present proceedings because he had only discovered this when the Wife began using that information in the divorce proceedings. However, a closer examination of the facts undermined this argument.

(a) First, the Husband’s affidavit dated 20 August 2019 filed in response to Mr Sandeep’s application in CA/SUM 92/2019 (“SUM 92/2019”) to be joined as a respondent in CA 231/2018 made clear reference to the allegation that Mr Devin and Mr Sandeep had taken his documents from the laptop to pass to the Wife:

Hence, at the latest, in August 2019, before the appeal was heard in CA 231/2018, the Husband already had formed the belief that the Wife, through Mr Devin and Mr Sandeep, had obtained the documents from him. Yet, the Husband did not raise this issue in the substantive arguments. Given that the Husband had such a belief before the appeal was heard, the proper course of action would have been to seek leave to adduce further evidence at that the appeal. While I recognise that the affidavits that the Husband was now relying upon were filed in December 2019, after the appeal was heard, the fact remained that he had already formed his belief as to the Wife’s dealings with the documents (which had to be based on some evidence if he was willing to state this belief on affidavit), yet failed to raise any issue in the prior proceedings.

(b) Second, on the Husband’s evidence, it was not clear that he was unable to raise the issue even at the first instance in OS 1407/2017. In that regard, the Husband’s affidavits in the present proceedings did not show any reason why he would not have been able to uncover further evidence that the Wife, through Mr Devin and Mr Sandeep, had obtained the documents from his laptop. I note that based on the Husband’s pleadings in S 1242/2019, the Wife had used information from his laptop as early as August 2018, even before OS 1407/2017 was determined.

He had relied on the same principle in OS 1407/2017 and CA 231/2018, meaning that this question was part of the process by which the previous courts had arrived at their decisions. Yet, the Husband had failed to raise this particular issue as an argument against granting the account to the Wife, which he now argued justified a different result on the same principles.

[45] Further, on the facts, I did not think that the Husband had sufficiently shown that he was truly unable to have raised this issue in the prior proceedings, and certainly, on his own admission in his affidavit for CA/SUM 92/2019, he already believed that the Wife had those documents before the hearing of the appeal. I could not find any bona fide reason for why the issue was not raised in the earlier proceedings. To allow the Husband to raise this issue in the present proceedings would effectively allow an unsatisfied litigant to re-open a case on the basis that “better” evidence of something that he already believed (but failed to raise) had arisen after the determination of the matter. The interest in finality of litigation and fairness to the Wife strongly supported my finding that this argument was an abuse of process under the extended doctrine of res judicata. In any case, I did not consider it unjust to prevent the Husband from raising the issues in this context – if the allegations are true, the Husband has rights against the Wife, Mr Devin, and Mr Sandeep, which can be enforced in S 1242/2019. I therefore conclude that the Husband could not raise this issue in the present proceedings.

[46] As a final preliminary matter, I deal with the arguments concerning the Court of Appeal’s statement in its judgment that:

[47] The Husband appeared to rely on this to argue that he had liberty to seek significant modifications to ORC 50/2019, including as to the Wife’s entitlement to the account and the scope of the documents to be furnished. However, the key context for this sentence was the preceding one, which reads, “We affirm the trial Judge’s orders on the range of documents.” In that context, the Court of Appeal’s statement that the Husband could “go back before” the High Court should be understood to be concerned only with the implementation and enforcement of ORC 50/2019, rather than as a blanket allowance to revisit even the Wife’s entitlement to the account and documents. Specifically, I did not consider that this would, on its own, have otherwise enabled the Husband to apply for (a) a declaration that ORC 50/2019 was inoperative; and (b) that the entitlement to account ceased in October 2019 or January 2020. There was some scope for an application to modify the scope of the documents, but that had to be considered in the light of any difficulty that the Husband faced in compliance, not generally in terms of the Wife’s entitlement to the documents. Further, a variation would still be in the discretion of this court, since the Court of Appeal did not pre-determine that any variation application would necessarily succeed.

[48] I turn then to the substance of the dispute in the present case. Having found that the Husband could raise the issue of how the deeds he executed in October 2019 and January 2020 affected the Wife’s entitlement to an account, I first consider the effect of the various deeds on the Wife’s interest under the Trusts, before dealing with how that, in turn, affected (or did not affect) the Wife’s entitlement to an account.

[49] Before addressing the specific deeds, I summarise the position of the Clause 5 Trust as it stood after the Court of Appeal’s decision in CA 231/2018.

(a) The Clause 5 Trust was a discretionary trust which gave the Husband the absolute discretion to decide how to appoint the property under the said trusts to the class of beneficiaries defined under the cl 5.1(ii) of the Will: CA 231/2018 Judgment at para 2.

(b) The transfer of the Branksome Property to the Wife in 2016 was not, in and of itself, sufficient to determine her interest in the Clause 5 Trust, because the Husband had not exercised his discretion by way of a deed or deeds as required by cl 5.2 of the Will: CA 231/2018 Judgment at para 4.

[50] In my judgment, the Deed of Advancement dated 3 October 2019 was not effective, under cl 5.2 of the Will, to determine the Wife’s interest in the Clause 5 Trust. This is because the Deed of Advancement described itself as for “advancement”, while cl 5.2 of the Will provided for the discretion to “appoint”.

[51] There is a distinction between the power of advancement and the power of appointment. As counsel for the Wife rightly pointed out, this distinction is an important one in the law of trusts. The power to appoint creates a beneficial interest in favour of one or more objects of the power: Lynton Tucker, Nicholas Le Poidevin & James Brightwell, Lewin on Trusts (Sweet & Maxwell, 19th Ed, 2015) (“Lewin”) at para 30-002. The power of advancement, rather, allows the trustee to “anticipate the vesting in possession of an intended beneficiary’s contingent or reversionary interest”: Lewin at para 32-001 – in other words, it is concerned less with who is to benefit, but more with when that beneficiary will receive the benefit from the trust. I found the distinction helpfully summarised by the New Zealand Supreme Court of Wellington in Kain v Hutton [2008] 3 NZLR 589 (“Kain”) at [32] and [33]:

[52] While the Deed of Advancement purported to be an exercise of the discretion under cl 5.2 of the Will, it was also referred to as a deed of advancement. The significant difference between an advancement and an appointment rendered it unsafe, in my view, to rely on the Deed of Advancement as an exercise of the power of appointment.

[53] I turn, then, to the remaining deeds. I found that the Deed and Deed of Appointment were effective to determine the Wife’s interest under the Clause 5 Trust. The Deed and the Deed of Appointment worked together to achieve this in a two-fold manner. First, the Deed irrevocably declared and determined that the Branksome Property was allocated and distributed to the Wife from the trust free from any and all encumbrances, and stated that the Wife shall receive no further distribution from the remaining trust property, and that she has no interest in any of the said property. Second, the Deed of Appointment revocably appointed the remaining trust property (ie, the property other than the Branksome Property) to the Sons: Mr Devin, Mr Dilip, and Mr Sandeep.

[54] The Wife made two points attacking the validity and effect of these two deeds. First, she argued that the Deed was not valid or executed in accordance with cl 5.2 of the Will because it dealt with the Branksome Property, which had been transferred to the Wife more than three years before the Deed was executed. As such, the Husband could not purport to exercise a discretion in relation to a distribution that was already made. Second, the Deed could not purport to exclude the Wife from future distributions as the trustee could not bind his discretion as to the future, without appointing the remainder of the trust property. Relatedly, in relation to the Deed of Appointment, the Wife highlighted that this was only a revocable appointment of the remainder of the trust property.

[55] I did not agree with the Wife’s first argument that the Deed could not purport to be the exercise of discretion in relation to property that was already distributed. I accepted that because legal title to the Branksome Property was transferred to the Wife in 2016, that property was no longer part of the Clause 5 Trust and the Husband could not claim to be a trustee of that property in January 2020. However, I did not see any reason why the Husband, having directed Mr Moti to transfer the legal title to the Branksome Property to the Wife in 2016, could not in January 2020 declare his intention that the transfer should also be treated as a distribution of that trust property to the Wife. I would not go so far as to say that this could retrospectively re-characterise the transfer in 2016 as an appointment from that date, since that would quite substantially limit the utility of the requirement that the discretion be exercised by “deed or deeds”. There must be some role for the formality to play and I found that the appointment could only take effect from the date of the deed in question. That said, there was nothing in my view preventing the Husband from declaring a past act as also being an appointment with effect from the date of that deed.

[56] In any case, I considered that the distribution of the Branksome Property to the Wife could be treated as a distinct question from whether the Wife could be excluded from the Clause 5 Trust prospectively by the Deed. In my judgment, the power of appointment under cl 5.2 of the Will gave the Husband the power to exclude the Wife from any future distribution of the trust property, regardless of whether this exclusion was accompanied by a distribution of the remainder of the trust property. I refer again to the wording of cl 5.2 of the Will as follows:

[57] In the first line, there is express reference to the possibility that the trust may only be:

That is, the Husband as trustee has been given the discretion to determine who among the class of beneficiaries defined by cl 5.1(ii) would be beneficiaries of the trust over the trust property. There is no additional stipulation that this can only occur after property has been given to the beneficiary who is now being excluded, or that this must only be when all of the trust property is exhausted, as the Wife claimed. There is nothing in cl 5.2 of the Will that would enable the court to impose such a requirement.

[58] It is a matter of sound practice and logic that, if the trustee is given the power to appoint one or some other number of beneficiaries (within a class of beneficiaries) as beneficiaries of the trust, he is also given the power to exclude one or some other number of beneficiaries from the trust. One is the corollary of the other. It would be extremely artificial and, in my view, contrary to the language and intent of a clause like cl 5.2 of the Will to prevent the trustee from doing so. Hence, even if the declaration in the Deed concerning the Branksome Property could not be treated as an appointment in favour of the Wife, I found that the Husband had the power to exclude the Wife from the trust over the remaining property, and that this power was exercised.

[59] In this case, I did not need to decide if this could have been effected by the Deed alone, in the absence of the Deed of Appointment. Given that both deeds existed together, I considered their cumulative effect. I found that by (a) expressly excluding the Wife from any further interest in the remaining trust property; and (b) appointing the Sons as beneficiaries of a trust over the remaining trust property, the deeds were sufficient to exclude the Wife as a beneficiary. The fact that the latter was a revocable appointment was adequately met by the fact that the former was irrevocable. The revocability of the appointment under the Deed of Appointment could then be understood as leaving open the possibility of further altering the appointments as between Mr Devin, Mr Dilip, and Mr Sandeep, but no longer with the Wife as a potential beneficiary of the trust property. By way of these deeds, and in exercise of the discretion under cl 5.2 of the Will, the Husband had excluded the Wife from the trust of the remaining property, and she was no longer a beneficiary.

[60] I was also not persuaded by the Wife’s argument that the deeds were invalid because the Husband could not bind his future exercise of discretion. This was not a case where the Husband had fettered his future exercise of the power, but rather, was one where the power itself had been exercised. The only question was the scope of the power, which was governed by cl 5.2 of the Will, not whether the Husband had bound himself to exercising his discretion in a particular way in the future. And as for the scope of the power, the very reference to an “irrevocable” appointment in cl 5.2 of the Will meant that the exercise of the power at one point could have a permanent effect on the beneficiaries’ entitlements for the remainder of the trust period.

[61] While I based my decision primarily on the text of cl 5.2 of the Will, I was also confirmed in this understanding of the power of appointment by a number of cases that were not cited to me by parties. I set these cases out, however, as I considered them very helpful in dealing with the issues raised before me.

[62] The most significant case is that of Blausten v Inland Revenue Commissioners [1972] 2 WLR 376 (“Blausten”), a decision of the English Court of Appeal. The dispute concerned the taxation of a settlement, whereby the taxpayer had directed that various investments and the sum of £100 be held on trust for a specified class. That specified class included (Blausten at 379D): (a) the “wife widow children and remoter issue of the settlor”; (b) the brothers and sisters of the settlor and their children and remoter issue; and (c) the “spouses widows and widowers of any of the children and remoter issue aforesaid”. It was understood, therefore, that the specified class included the taxpayer’s wife or widow.

[63] The material term governing the trustees’ power of appointment in that case was as follows (Blausten at 382B):

[64] The question of whether the tax assessments was correct under the Finance Act 1958 (c 56) (UK) turned on whether (Blausten at 381H):

For present purposes, the material part of the judgment concerned the trustees’ exercise of the power of appointment, whereby they (Blausten at 382F):

[65] At first instance, Goff J had held that the appointment was not effective, finding that it was “simply an attempt to delete members from the specified class … and then to read in the widow of the settlor as a possible object of the discretionary trust, leaving her still with nothing but a spes” (Blausten at 383A). Buckley LJ recognised that the effect of the trustees’ appointment was (Blausten at 383C–D):

In his view, however, disagreeing with Goff J, the removal of the wife from the objects of the discretionary trust was entirely within the terms of the power of appointment, since it was an appointment for the capital to be held on trust for the benefit of the remaining members of the specified class. Hence, it was proper for the trustees to have resettled the trust on terms that excluded the wife from the class of beneficiaries during the lifetime of the settlor.

[66] Blausten ([62] supra) was helpfully discussed by the Eastern Caribbean Court of Appeal in the British Virgin Islands, in the case of Re New Huerto Trust (2015) 18 ITELR 447 (“Re New Huerto Trust”). Clause 2 of the trust deed in that case read (Re New Huerto Trust at [3]):

[67] The trustee had applied to court to sanction a proposed draft deed, which purported to exercise the power of appointment under cl 2 of the trust deed. In effect, the proposed draft deed declared the same trusts as the trust deed, with the variation that the definition of “Beneficiaries” was modified to exclude the settlor himself: Re New Huerto Trust at [6]. The central question on appeal was (Re New Huerto Trust at [23]):

[68] After considering the case of Blausten, among other authorities, the court held (Re New Huerto Trust at [32]):

[69] I found both Blausten and Re New Huerto Trust persuasive. These authorities reinforced my decision to find that the Deed and Deed of Appointment were sufficient to exclude the Wife from any further interest in the Clause 5 Trust, although, as I have stated, my decision was based primarily on the interpretation of cl 5.2 of the Will.

[70] I summarise the above discussion. Since the Wife was not actually entirely excluded from the Clause 5 Trust, as she already received the Branksome Property and this, in my view, could be treated as an appointment from the date of the Deed onwards, this was simply a case of the power of appointment being exercised. Blausten ([62] supra) and Re New Huerto Trust ([66] supra) confirmed this result. In fact, the present case is a fortiori since the Wife was not merely being excluded from the trust, but had received property under the power of appointment. In any case, even if the transfer of the Branksome Property was not treated as an exercise of the power of appointment, these authorities also lead to the result that the Wife could be excluded from any interest in the Clause 5 Trust by an exercise of the power of appointment. For completeness, in this latter scenario, I note that s 23 of the Civil Law Act (Cap 43, 1999 Rev Ed) may be relevant (see also Lewin at para 30-025), but as parties have not addressed me on that provision, I say no more of it.

[71] Therefore, I found that the Deed and Deed of Appointment were sufficient to exclude the Wife as a beneficiary of the Clause 5 Trust, beginning from 10 January 2020 onwards.

[72] I turn to the question of how this affected the Wife’s entitlement to an account. The Husband claimed that this meant that the Wife was no longer entitled to any account, even for the period when she remained a beneficiary. The Wife argued that she remained entitled to that account.

[73] I agreed with the Wife. As I have already found, the Wife ceased to be a beneficiary of the Clause 5 Trust only from 10 January 2020 onwards. The Deed and Deed of Appointment did not have a retrospective effect to “back-date” this exclusion to any earlier date. The Husband appeared to recognise that the Wife was still a beneficiary until 10 January 2020, as he argued that the Wife was no longer a beneficiary from that date. The Husband’s primary argument was that there had been a change in the “basis or substratum” on which ORC 50/2019 was made, and that because the Wife was no longer a beneficiary, she could not receive an account of the trust for when she had been a beneficiary.

[78] The highest, therefore, that the Husband’s case could go – which the Wife conceded in the event that the deeds in January 2020 were found to be effective – was that the Husband was no longer required to provide an account for the trust property in the Clause 5 Trust on and after 10 January 2020. I made that finding accordingly.

[80] First, the basis for admitting Mr Devin’s and Mr Sandeep’s affidavits in the present case as evidence was not clear. They were not parties to the present proceedings. These statements would have been hearsay evidence, since it was the Husband’s assertion that Mr Devin and Mr Sandeep had said in their evidence that they had taken the documents from his laptop. It was also unclear how these could then be proved against the Wife, who was not the same party as Mr Devin and Mr Sandeep.

[81] Second, it was not clear to me how Mr Devin’s and Mr Sandeep’s actions could affect the Wife’s entitlement to the account. The Husband argued that the Wife knew of their acts and that she had the documents, but the Wife maintained otherwise. The Wife asserted on affidavit that she was not aware of the documents, and although the Husband argued that this was not believable, this was based on inferences that had to be drawn on evidence that was not clearly before the court. Indeed, given the factual dispute, and given that there was a pending suit in S 1242/2019, I was not prepared to make a finding on the Wife’s involvement with the allegedly purloined documents.

[84] First, in my view, the present proceedings were not the appropriate forum to determine this issue. There was already a separate application brought by the Live Companies which was the more appropriate setting for determination. Before CA 231/2018 was heard, the Live Companies had applied in HC/SUM 3013/2019 (“SUM 3013/2019”) filed in OS 1407/2017 to be joined to the proceedings as interveners. The Husband’s initial position was that the Live Companies should have their concerns heard before the appeal, because if the Court of Appeal upheld ORC 50/2019, there might be issues with how the Husband was supposed to comply. Considering that the appeal was going to be heard, the High Court adjourned SUM 3013/2019 to a date to be fixed after the appeal, as the decision in SUM 3013/2019 would have been rendered otiose had the appeal been successful. At the time of the hearing of OS 1339/2019 on 9 March 2020, SUM 3013/2019 was still pending determination, which would have addressed the Live Companies’ concerns in relation to providing the documents to the Husband for the purposes of the ORC 50/2019. I did not consider it appropriate for the Husband to pre-empt the results of that application by filing OS 1339/2019 to deal with the very same issue of the documents relating to the Live Companies. As between the two, SUM 3013/2019 was the more appropriate forum in which to determine these questions, since that would pertain to the enforcement of ORC 50/2019 and the Live Companies’ concerns, whereas OS 1339/2019 was heard without the benefit of the Live Companies’ presence.

[85] For completeness, I note that after judgment was given in these proceedings on 9 March 2020, the Live Companies also brought separate proceedings in HC/OS 365/2020 on 27 March 2020, which dealt with the same issues. In addition, leave was granted to withdraw SUM 3013/2019 on 9 April 2020. These developments have not affected anything decided in the present proceedings.

[87] I summarise my conclusions as follows:

(a) I allowed the application in SUM 138/2020 to amend OS 1339/2019.

(b) Issue estoppel applied against the Husband’s contention that ORC 50/2019 should be varied in the manner sought in prayers 3(a) and 3(b) of OS 1339/2019.

(c) The extended doctrine of res judicata applied against the Husband’s argument that the Wife already had access to documents relating to the trust property because of Mr Devin’s and Mr Sandeep’s actions in taking the data and documents from the Husband’s laptop.

(d) The Deed of Advancement dated 3 October 2019 was not sufficient to exclude the Wife as a beneficiary of the Clause 5 Trust. However, the Deed and Deed of Appointment dated 10 January 2020 were effective to exclude the Wife as a beneficiary of the Clause 5 Trust. That said, as she was a beneficiary until 10 January 2020, she remained entitled to the account up to and including 9 January 2020.

(e) Even apart from the extended doctrine of res judicata, I would not have varied ORC 50/2019 on the basis of the allegation that the Wife, through Mr Devin and Mr Sandeep, had allegedly obtained documents relating to the trust property.

(f) As for the Live Companies’ objections and the Husband’s potential difficulties in relation to those documents, even apart from issue estoppel, I did not consider this to be the appropriate proceedings in which to determine the question, and in any case, a variation of ORC 50/2019 was inappropriate since this was not a question of entitlement to the documents but of enforcement, and the Husband could raise these issues of compliance subsequently.