Relfo Ltd v Varsani: Mareva Injunction & Fiduciary Duties of Company Directors

In the High Court of Singapore, Relfo Ltd (in liquidation) brought a claim against Bhimji Velji Jadva Varsani, seeking a Mareva injunction. Relfo alleged that Varsani and other shareholders breached their fiduciary duties. The court, presided over by Justice Choo Han Teck, dismissed Varsani's application to discharge the Mareva order, finding his explanation for the transfer of funds into his account unsatisfactory. The decision was made on 15 January 2008.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Defendant's application to discharge the Mareva order dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Relfo Ltd sought a Mareva injunction against Varsani, a former shareholder, alleging breach of fiduciary duties by directors. The court dismissed Varsani's application to discharge the injunction.

1.7 Decision Date

14 January 2008

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Relfo Ltd (in liquidation)	Plaintiff	Corporation	Mareva order remains in place	Won	Tan Mingfen, Sheryl Wei
Bhimji Velji Jadva Varsani	Defendant	Individual	Application dismissed	Lost	Leo Cheng Suan

3. Judges

Judge Name	Title	Delivered Judgment
Choo Han Teck	Judge	Yes

4. Counsels

Counsel Name	Organization
Tan Mingfen	Drew & Napier LLC
Sheryl Wei	Drew & Napier LLC
Leo Cheng Suan	Infinitus Law Corporation

4. Facts

The plaintiff alleged the defendant and other shareholders transferred shares for a nominal sum.
The Inland Revenue Department in the United Kingdom issued a Notice of Warning against the defendant for unpaid tax.
Gorecia instructed the plaintiff’s bank to transfer £500,000 to Mirren Ltd.
The money appeared to have been subsequently transferred to the defendant’s bank account in Citibank, Singapore.
No consideration was provided by the defendant to Gorecia for the transfer of funds.
The defendant's explanation for the transfer of funds was not credible.

5. Formal Citations

Relfo Ltd (in liquidation) v Bhimji Velji Jadva Varsani, Suit 612/2006, SUM 3916/2007, [2008] SGHC 7

6. Timeline

Date	Event
2004-04-26	Inland Revenue Department issued a Notice of Warning of Legal Proceedings against the defendant.
2004-05-03	Deadline for payment to the Inland Revenue Department.
2004-05-04	Gorecia instructed the plaintiff’s bank to transfer £500,000 to Mirren Ltd.
2007-01-23	Plaintiff obtained an ex parte mareva order.
2007-09-05	Defendant applied to discharge the Mareva order.
2007-10-25	Application to discharge was dismissed.
2008-01-15	Decision date.

7. Legal Issues

Discharge of Mareva Order
- Outcome: The court dismissed the defendant's application to discharge the Mareva order.
- Category: Procedural
- Sub-Issues:
  - Misleading the court
  - Plausible explanation for funds transfer
Breach of Fiduciary Duty
- Outcome: The court found that the defendant had not provided a satisfactory explanation for the transfer of funds, suggesting a potential breach of fiduciary duty.
- Category: Substantive

8. Remedies Sought

Injunction

9. Cause of Actions

Breach of Fiduciary Duty

10. Practice Areas

Commercial Litigation

11. Industries

Property Development

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
No cited cases

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Mareva order
Fiduciary duties
Liquidator
Discharge application
Corn Loan Agreement
Inland Revenue Department

15.2 Keywords

Mareva injunction
fiduciary duty
company director
property development
Singapore High Court

16. Subjects

Injunctions
Company Law
Fiduciary Duty

17. Areas of Law

Injunctions
Civil Procedure
Fiduciary Duty