Mustaq Ahmad (alias Mushtaq Ahmad s/o Mustafa) v Providentia Wealth Management Ltd and others [2023] SGHCF 52

HCF/OSP 4/2023 (“OSP 4”) is an application by one Mustaq Ahmad @ Mushtaq Ahmad s/o Mustafa (“the Applicant”) for Providentia Wealth Management Ltd (“Providentia”) and/or its solicitors to disclose details of their past communications with the 2nd to 7th Respondents and/or their solicitors between 16 August 2021 and the present. The Applicant as well as the 2nd to 7th Respondents are all beneficiaries of the estate of the deceased Mr Mustafa s/o Majid Khan (“the Estate”). The 1st Respondent, Providentia, is the administrator of the Estate.

The Applicant also prays for an order that any future communications between Providentia and the 2nd to 7th Respondents (including communications through their solicitors or agents) must include his solicitors, and that any unilateral communication between them that does not involve him must be proscribed.

I dismiss OSP 4 and set out below the reasons for my decision.

Background facts

The present application is part of a long-running dispute between the parties. Much of the background to their relationship is outlined in Ayaz Ahmed and others v Mustaq Ahmad (alias Mushtaq Ahmad s/o Mustafa) and others and other suits [2022] SGHC 161 at [7]–[40]. The facts that are material to the present application are as follows.

The Applicant is the son of Mr Mustafa s/o Majid Khan (“Mr Mustafa”) and his wife, Mdm Momina. Following Mdm Momina’s death sometime in 1956 or 1957, Mr Mustafa married Mdm Asia (the 7th Respondent). The 2nd to 6th Respondents are children of Mr Mustafa and Mdm Asia.

Mr Mustafa passed away intestate on 17 July 2001. At the time of his passing, he was a shareholder of Mohamed Mustafa and Samsuddin Co Pte Ltd (“MMSCPL”). On 16 August 2021, the Syariah Court issued an inheritance certificate for the Estate, which was to be divided into 80 shares and split between parties in certain assigned proportions.

On 24 November 2003, the Applicant’s application to the High Court for the letters of administration in relation to the Estate was granted.

On 8 December 2017, the 2nd to 7th Respondents commenced HC/S 1158/2017 (“Suit 1158”) against the Applicant and other parties. Suit 1158 was a minority oppression action alleging that the Applicant and his co-defendants in that suit had conducted the affairs of MMSCPL in a manner that was oppressive and unfairly prejudicial to the interests of the Estate as a minority shareholder of MMSCPL. At the same time, the 2nd to 7th Respondents also commenced HCF/S 9/2017 (“Suit 9”) against the Applicant. Suit 9 was a probate action alleging that the Applicant had breached his duties as administrator of the Estate.

Suit 1158 and Suit 9 were heard before me in the same trial, together with another related suit (HC/S 780/2018). At the conclusion of the trial, I gave judgment for the 2nd to 7th Respondents on the bulk of their claims in Suit 1158 (HC/JUD 590/2021). I found inter alia that the Estate was the legal and beneficial owner of 25.4% of the shares in MMSCPL. The Applicant and his wife (one of his co-defendants) were ordered to buy out the Estate’s 25.4% shareholding in MMSCPL at a price to be determined by an independent valuer. I also gave judgment for the 2nd to 7th Respondents on their claims against the Applicant in Suit 9 (HCF/JUD 3/2021). Inter alia, I ordered that:

(a) The letters of administration granted to the Applicant in relation to the Estate were to be revoked;

(b) The letters of administration in relation to the Estate were to be granted to a professional third-party administrator; and

(c) The Applicant shall give an account of his administration of the Estate on a wilful default basis.

In respect of Suit 9, as parties were unable to agree on the professional third-party administrator to be appointed for the Estate, I made an order on 14 January 2022 appointing Providentia as the professional third-party administrator. Providentia issued its finalised letter of engagement on 26 May 2022 and by 31 May 2022 the letter had been signed by both the Applicant and the 2nd to 7th Respondents. Providentia was issued the letters of administration for the Estate on 26 December 2022.

The Applicant appealed against my decisions in Suit 9 and Suit 1158. The appeal has since been heard by the Appellate Division of the High Court, which has reserved judgment.

The communications between parties

Providentia is represented by TSMP Law Corporation (“TSMP”). The Applicant has been represented by WongPartnership LLP (“WongP”) since the commencement of Suit 9 and Suit 1158, and continues to be represented by them. The 2nd to 7th Respondents have been and continue to be represented by Darshan & Teo LLP (“D&T”), with Davinder Singh Chambers LLC (“DSC”) as their instructed counsel.

On 26 October 2022, D&T wrote to TSMP, copying WongP, raising various purported issues with the administration of the Estate, and stating that they would be arranging a call with TSMP to discuss these issues.

On 18 November 2022, WongP wrote to TSMP, copying D&T and stating that it would be “highly improper” for D&T’s call with TSMP to proceed in the absence of WongP. After D&T objected to WongP’s position, WongP maintained its stance, further adding a request for copies of all unilateral communications between Providentia and the 2nd to 7th Respondents and/or their solicitors. WongP also sought confirmation that they would be copied on all future communications between Providentia and the 2nd to 7th Respondents.

Other letters were exchanged between parties’ solicitors, including a further letter from WongP on 29 December 2022 reiterating its stance that unilateral communication between Providentia and the 2nd to 7th Respondents was “improper”, as well as its demand for disclosure of past unilateral communications.

On 17 January 2023, TSMP wrote to WongP, copying D&T, stating that they were prepared to discuss the matters raised in the 29 December 2022 email on a joint call with D&T and WongP. Parties did not take up the offer of a joint call.

Following further correspondence, on 3 March 2023 TSMP wrote to Wong P, copying D&T, confirming that there had been unilateral communications between them and D&T and DSC on the following issues:

(a) Parties had exchanged communications on the terms of Providentia’s engagement, as part of the lead up to Providentia’s engagement as administrator of the Estate;

(b) D&T had forwarded copies of Registrar’s Notices and/or correspondence from the court in relation to Suit 9;

(c) TSMP had attended a call with D&T and DSC on or around 8 August 2022 to discuss the role and degree of involvement of Providentia as administrator, the valuation of the Estate, the computation of the Estate’s shareholding in MMSCPL, and potential updates to MMSCPL’s share register to reflect the court’s judgment in Suit 9; and

(d) Emails were exchanged relating to the scheduling of the above call and matters arising from the call.

From 6 March to 10 March 2023, further letters were exchanged between WongP and TSMP, with TSMP providing further details as to the unilateral communication that had occurred between Providentia and the 2nd to 7th Respondents. According to Providentia, the following unilateral communications have taken place:

(a) Communications on the terms of Providentia’s engagement were conducted by Providentia as part of its role as administrator to ascertain its scope of engagement and other administrative issues.

(b) There were brief telephone calls around the time of Providentia’s engagement to understand the immediate next steps for the matter and to clarify minor administrative follow-ups such as requests for copies of pleadings. These were mostly initiated by Providentia’s solicitors to get up to speed on the matter.

(c) A call took place on 8 August 2022 between TSMP, D&T, and DSC. This was only to facilitate Providentia’s understanding of the matter following its appointment.

(d) Mr George Yeo (“Mr Yeo”), the Managing Director of Providentia, spoke to D&T over the phone on 18 February 2022 to confirm that Providentia would be the administrator of the Estate, and that all references to the administrator ought to be references to Providentia and not him personally. A follow-up email was sent regarding this to D&T.

(e) Providentia received a letter from D&T on 8 March 2022 informing it that there would be a Probate Case Conference for Suit 9 on 9 March 2022. Mr Yeo subsequently contacted D&T to inform him that Providentia’s representatives would not be attending this.

Providentia has taken the position that even though it would be prepared to provide copies of previous unilateral correspondence between it and the 2nd to 7th Respondents, it is unable to do so because the 2nd to 7th Respondents object to such disclosure.

Parties’ cases

The Applicant

According to the Applicant, he is gravely concerned about the communications between Providentia and the 2nd to 7th Respondents (“the unilateral communications”) for the following reasons:

(a) Non-disclosure of past communications between Providentia and the 2nd to 7th Respondents prior to the appointment of Providentia raises serious questions as to whether the unilateral communications “influenced” the 2nd to 7th Respondents’ choice of Providentia as the professional third-party administrator. The Applicant claims that the existence of such prior communications also raises the question of whether the court would have approved the appointment of Providentia as administrator of the Estate had the court been aware of the prior communications.

(b) Previous communication involving the administration of the Estate related to matters which the Applicant would have had an interest in, and so he ought to have been included in the call.

In terms of the legal basis for OSP 4, the Applicant argues that a beneficiary of an estate is entitled to apply for disclosure of trust documents and to inspect communications between the administrator and other beneficiaries. Per the Applicant’s case, this flows from the fiduciary duties owed by the administrator to the estate’s beneficiaries, which include the duty to administer the estate in a fair and equitable manner. In terms of the remedy sought, the Applicant argues that the court has jurisdiction in equity and under r 786 of the Family Justice Rules to proscribe unilateral communications between the administrator of an estate and certain beneficiaries.

In arguing that a beneficiary of a trust is entitled to apply for disclosure of trust documents, the Applicant relies on the English case of Schmidt v Rosewood Trust Ltd [2003] 2 AC 709 (“Rosewood”). He suggests that the factors the court may consider in determining whether disclosure to the beneficiary should be ordered are those set out in the New Zealand Supreme Court’s decision in Erceg v Erceg [2017] 1 NZLR 320 (“Erceg”) at [56]. These include, inter alia, the nature of the documents sought, the context for the request, the objective of the beneficiary in making the request, the nature of the interests held by the beneficiary seeking access, whether there are issues of personal or commercial confidentiality, whether there is any practical difficulty in providing the information, and the likely impact on the trustee and the other beneficiaries if disclosure is made.

In the present case, the Applicant argues that disclosure should be ordered because there are serious questions about the propriety of the unilateral communications:

(a) The communications pre-dating Providentia’s appointment give rise to concerns as to why the 2nd to 7th Respondents chose Providentia as the third-party administrator.

(b) The communications post-dating Providentia’s appointment should have involved the Applicant because they related to matters in which he had an interest in as beneficiary.

The Applicant contends that if the unilateral communications are truly innocuous and related to mere administrative matters, there should be no reason why these communications cannot be disclosed; there should be no practical difficulty in making such disclosure.

According to the Applicant, the failure of the 2nd to 7th Respondents to disclose the unilateral communications would also deepen existing mistrust between parties, and hinder the administration of the Estate. The Applicant claims that he will moreover be prejudiced as he will be kept in the dark about the matters discussed between Providentia and the 2nd to 7th Respondents. The Applicant argues that the interest in ensuring full transparency should outweigh any considerations of practical expediency.

Finally, the Applicant argues that the need to ensure open and transparent communication should favour a prospective proscription of unilateral communications.

Providentia

Providentia, for its part, highlights that it has already disclosed significant details of the unilateral communications to the Applicant, despite having no legal obligation to do so. The information already disclosed shows no impropriety. Providentia reiterates that it is prepared to disclose copies of the unilateral communications but for the 2nd to 7th Respondents’ refusal to consent to disclosure.

Providentia argues that there will be circumstances in which unilateral communications may be necessary. These include discussions relating to the Applicant’s capacity as former administrator of the Estate, where parties should be approached separately for Providentia to understand and investigate specific issues.

Additionally, Providentia objects to the present action being taken against it in a personal capacity rather than in its capacity as administrator of the Estate.

The 2nd to 7th Respondents

The 2nd to 7th Respondents submit that communications between a beneficiary and a trustee/administrator are confidential and are not generally open to inspection by other beneficiaries. In support of their submissions, the 2nd to 7th Respondents cite the English case of Re Londonderry’s Settlement [1965] Ch 918 (“Londonderry’s Settlement”), the Australian case of Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405 (“Hartigan”), as well as decisions of the Jersey courts. The 2nd to 7th Respondents suggest that there are two reasons for this position, which two reasons they say are engaged on the present facts:

(a) Such a position promotes full transparency and candour between beneficiaries and the trustee/administrator; and

(b) Were the trustee/administrator required to copy all beneficiaries in its correspondence with any of them, it would lead to contentious exchanges of correspondence which will make it difficult for the trust to be administered.

As a corollary to this position, a trustee/administrator is entitled to communicate with a beneficiary without copying or involving other beneficiaries.

My decision

It is common ground between the Applicant and the Respondents in OSP 4 that there is no local authority which addresses specifically the issue of whether a beneficiary of a trust has any right to disclosure of communications between the trustee and other beneficiaries. In its submissions, the Applicant has placed heavy reliance on the English case of Rosewood. It is critical, however, to understand the principles that the Privy Council (“PC”) in Rosewood actually established.

In Rosewood, having reviewed previous cases in which it had been held or suggested that a beneficiary’s right or claim to disclosure of trust documents should be regarded as being founded on a proprietary right (see eg the judgment of Salmon LJ in Londonderry’s Settlement [937), the PC disagreed with this line of reasoning. Lord Walker, in delivering the judgment of the PC, stated that the PC was in general agreement with the approach adopted in the judgments of Kirby P and Sheller JA in the Court of Appeal of New South Wales in Hartigan. Both these judges, while disagreeing on the outcome of the appeal in Hartigan, were agreed in their rejection of the “proprietary right” approach. Kirby P affirmed the views expressed by Professor H A J Ford in Principles of the Law of Trusts (Law Book Co, 1990) at p 425 that a beneficiary’s right to inspect trust documents was founded “not upon any equitable proprietary right which he or she may have in respect of those documents but upon the trustee’s fiduciary duty to keep the beneficiary informed and to render accounts. It is the extent of that duty that is in issue”. Sheller JA similarly opined that there were difficulties in applying the proprietary analysis as a basis for a beneficiary’s right to inspect documents and that this line of logic was “if not a false, an unhelpful trail”.

In Rosewood, the PC held that the more principled and correct approach would be to regard the right to seek disclosure of trust documents as one aspect of the court’s inherent jurisdiction to supervise, and if necessary, to intervene in the administration of trusts. The right to seek the court’s intervention does not depend on entitlement to a fixed and transmissible beneficial interest. Indeed, the PC was of the view that it was neither sufficient nor necessary for an applicant to have a proprietary right, as there might be circumstances (especially of confidentiality) in which even a vested and transmissible beneficial interest would not be a sufficient basis for requiring disclosure of trust documents. Lord Walker noted that the courts had begun to work out in some detail the way in which the court should exercise its discretion in such cases. In his words (at [54]):

In its concluding remarks (at [66]-[67]), the PC also made it clear that “no beneficiary…has any entitlement as of right to disclosure of anything which can plausibly be described as a trust document. Especially where there are issues as to personal or commercial confidentiality, the court may have to balance the competing interests of different beneficiaries, the trustees themselves, and third parties” [emphasis added].

Based on the PC’s reasoning in Rosewood, the starting point in the present case is that the Applicant has no entitlement as of right to disclosure of communications between Providentia and the 2nd to 7th Respondents. It is for the Applicant to satisfy this court that there is basis for the court to intervene and to exercise its discretion in this case to order disclosure of these communications, both past and future.

In this connection, it is regrettable that despite purporting to rely on the decision in Rosewood, the Applicant’s affidavit evidence and the submissions made on his behalf have not addressed with any specificity the interests which should be considered in the balancing exercise to be carried out by the court, beyond reproducing the relevant paragraph in Erceg noted at [22] above.

In any event, having reviewed the affidavit evidence and parties’ submissions, I am of the view that the Applicant has not satisfied me of the merits of his application for disclosure of both past and future unilateral correspondence between Providentia and the 2nd to the 7th Respondents. My reasons are as follows.

First, the disclosure specifically of communications between a trustee and a beneficiary involves unique considerations compared to disclosure of trust documents at large. These considerations would tend to militate against disclosure. One consideration is that communications from beneficiaries, particularly the sort divulged by beneficiaries in unilateral communications, may involve sensitive or confidential information. Such considerations are highly relevant in assessing the propriety of disclosure (Rosewood at [67]). Another consideration is the need to promote transparency between beneficiaries and trustees/administrators. In this regard, I accept Providentia’s arguments that there are likely to be various situations where separate discussions with each (or either) party would be appropriate or necessary. For example, if Providentia needs to clarify information which relates to the Applicant’s mishandling of his prior administration of the Estate, it will be conducive to frank disclosure by the beneficiaries if Providentia were able to consult the Applicant and the 2nd to 7th Respondents separately for their input on this issue, without being compelled to report each side’s communications to each other.

Another relevant consideration is the need to avoid placing onerous obligations on the trustee or administrator that will impede his ability to administer the trust or estate. Here, the obvious ongoing acrimony between the parties already makes the administrator’s job difficult. This should not be exacerbated by the imposition of additional obligations on an administrator that are likely to increase the prospects of confrontation and satellite litigation. In this connection, I give significant weight to Providentia’s own assessment as administrator that copying all beneficiaries and their solicitors on every single piece of correspondence will likely hinder the timely administration of the Estate. I add that given the bitter hostility with which the two sides regard each other, it is improbable that joint meetings or discussions will be a feasible means of eliminating confrontation and dispute. I note that Providentia has previously proposed such joint meetings, only to be met with rejection.

Second, the Applicant’s specific basis for alleging prejudice arising from non-disclosure is pure unsubstantiated speculation. He has failed to provide any basis for suggesting that there have been communications made unilaterally in bad faith or that there is impropriety involved; instead, he has offered only vague conjecture and insinuation. In particular, I note that he sought to suggest that there were “serious questions as to whether and to what extent the unilateral communications between [Providentia] and the [2nd to 7th Respondents] influenced the [2nd to 7th Respondents’] choice of [Providentia] as the professional third-party administrator (for example, as they believed that [Providentia] would administer the Mustafa Estate in a manner that would be more favourable to them)”, and whether “if these unilateral communications were disclosed”, this court “would still have appointed [Providentia] as the administrator of the Mustafa Estate”.

It should be pointed out that Providentia was not in fact the only nomination put forward by the 2nd to 7th Respondents: they had put forward a second nomination for this court’s consideration, just as the Applicant himself had put forward two different nominations. Logic and common sense dictate that prior to putting forward these nominations, each side would have communicated with the professional firms in question in order to inform them of the potential scope of work and to obtain necessary information such as the rates quoted by these firms, the CVs of the relevant personnel, among other things. It is absurd to imagine that either side would have been able to put forward their respective nominations without first communicating with the professional firms in question. There was no complaint at all from the Applicant prior to my decision on 14 January 2022 or thereafter about not having been privy to any communications between Providentia and the 2nd to 7th Respondents which led to the former being put forward as one of the latter’s two nominations. There is not a shred of evidence before me to suggest that there was anything in the communications between Providentia and the 2nd to 7th Respondents which led the latter to believe that Providentia “would administer the Mustafa Estate in a manner that would be more favourable to them”. I consider the Applicant’s baseless insinuations to be misleading, and indeed, malicious.

The threadbare nature of the Applicant’s case and his reliance on unfounded speculation are made even more apparent by his conduct in resorting to casting aspersions on the parties’ solicitors. Much of the noise made by the Applicant relates to communications which did not involve any staff of Providentia and/or any of the 2nd to 7th Respondents personally – such as the telephone call on 8 August 2022 between lawyers from TSMP, D&T, and DSC. As noted earlier, Providentia has informed that the purpose of this call between its solicitors and those acting for the 2nd to 7th Respondents was to facilitate its understanding of the matter in which it had come on board as the court-appointed professional administrator, in place of the Applicant. The Applicant seeks to imply that what was discussed in such communications was “not at all innocuous”. This necessarily involves calling into question the professionalism and integrity of the lawyers from the three different law firms present when in truth, the Applicant has no evidence at all to support such serious allegations.

Third, Providentia has made disclosure of the broad contents of past communications (see [17] and [18] above). These do not in any way hint at, much less reveal, any impropriety. They are the very sort of communications that would be needed in order for an administrator of an estate to carry out their work.

Fourth, while the Applicant has alleged that he will be prejudiced if he is not given access to all future communications between Providentia and the 2nd to 7th Respondents, he has failed to demonstrate what precisely this prejudice may be. Indeed, as noted by Providentia, there have been unilateral communications between the Applicant himself and Providentia regarding information and supporting documents. No concerns were raised by the Applicant as to the non-inclusion of the 2nd to 7th Respondents in such communications, nor has the Applicant been transparent about such unilateral communications. The Applicant cannot legitimately claim, therefore, that there is some sort of prejudice which arises generally from non-disclosure of unilateral communications. Neither has he been able to substantiate any specific prejudice that he will uniquely face as a result of non-disclosure.

I make a further comment on the Applicant’s case in respect of the ban he seeks on future unilateral communications. In their oral submissions, counsel for the Applicant stated that they were seeking this court’s directions on the “extent of unilateral communications allowed”. Counsel also indicated that the Applicant was in fact open to being subject to any restrictions or prohibitions which the 2nd to 7th Respondents might be subject to. However, this belated suggestion was wholly at odds with the wording of the relevant prayer in OSP 4, which was couched as a blanket prohibition of unilateral communication, and which was stated to apply only to communications between Providentia and the 2nd to 7th Respondents – not the Applicant. I reproduce below the relevant prayer:

If the Applicant’s real purpose in bringing OSP 4 is to seek directions in general and to be even-handed in terms of the proposed way forward, then the above prayer is antithetical to such purpose – which begs the question why he refrained from making known to the Respondents his real purpose to begin with.

Conclusion

For the reasons set out above, I dismiss the application in OSP 4.

Given my dismissal of OSP 4, it is unnecessary to answer the question raised by Providentia as to whether it was legally in order for the Applicant to bring the application against Providentia in its personal capacity.

For completeness, I note that Providentia has requested what it calls a “determination” from this court as to the extent to which unilateral communications between Providentia itself and beneficiaries will be allowed. I do not think it is appropriate for me to pronounce any views prospectively, especially when any views expressed at this stage would necessarily be couched in very broad language that would likely only give rise to uncertainty and further squabbling between the parties.