Compania De Navegacion Palomar v Perez De La Sala: Breach of Trust & Fiduciary Duties
In Compania De Navegacion Palomar, S.A. and others v Ernest Ferdinand Perez De La Sala, the Singapore High Court addressed a claim by six plaintiff companies against Ernest Ferdinand Perez De La Sala, a director, for transferring funds to his personal accounts. Ernest counterclaimed against Edward De La Sala, Christina Copinger-Symes, and James Morgan Copinger-Symes for breach of trust and conspiracy. The court dismissed the plaintiff companies' claims and Ernest's counterclaims, finding that while Ernest was the beneficial owner of the shares in the plaintiff companies, he held part of those assets on trust for his siblings and mother's estate. The court allowed ECJ's counterclaim for misrepresentation, finding that Ernest had misrepresented the nature of the companies to them.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Judgment for Defendant
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court case involving a breach of trust claim. The court found that the defendant did not act in breach of trust.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Compañia De Navegación Palomar, S.A. | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Dominion Corporation S.A. | Plaintiff | Corporation | Claim Dismissed | Lost | |
| John Manners and Co (Malaya) Pte Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| COSMOPOLITAN FINANCE CORPORATION [BVI] | Plaintiff | Corporation | Claim Dismissed | Lost | |
| PENINSULA NAVIGATION COMPANY (PRIVATE) LIMITED [BVI] | Plaintiff | Corporation | Claim Dismissed | Lost | |
| STRAITS MARINE COMPANY PRIVATE LIMITED [BVI] | Plaintiff | Corporation | Claim Dismissed | Lost | |
| ERNEST FERDINAND PEREZ DE LA SALA | Defendant, Plaintiff in Counterclaim | Individual | Judgment for Defendant | Won | |
| EDWARD ROBERT PEREZ DE LA SALA | Defendant in Counterclaim | Individual | Counterclaim for Misrepresentation Allowed | Partial | |
| JAMES MORGAN COPINGER-SYMES | Defendant in Counterclaim | Individual | Counterclaim for Misrepresentation Allowed | Partial | |
| MARIA CHRISTINA COPINGER-SYMES | Defendant in Counterclaim | Individual | Counterclaim for Misrepresentation Allowed | Partial |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Quentin Loh | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Thio Shen Yi | TSMP Law Corporation |
| Harpreet Singh | Cavenagh Law LLP |
| Cavinder Bull | Drew & Napier LLC |
4. Facts
- Six plaintiff companies sued Ernest Ferdinand Perez De La Sala for transferring funds to his personal accounts.
- Ernest claimed the monies were his and the companies were nominees.
- Ernest counter-sued his co-directors for breach of trust and conspiracy.
- The Plaintiff Companies have been structured as an “orphan” or “circular” structure.
- Robert Sr. built up a shipping and business empire.
- Robert Sr. divested himself of his stake in NEL by transferring his shareholding in NEL to his wife and his four children equally.
- Ernest misrepresented to ECJ that the Plaintiff Companies were part of a family legacy.
5. Formal Citations
- Compania De Navegacion Palomar, S.A. and others v Ernest Ferdinand Perez De La Sala and another matter, Suit No 178 of 2012, [2017] SGHC 14
6. Timeline
| Date | Event |
|---|---|
| Lasala Investments Limited incorporated in Hong Kong | |
| Lasala Investments Limited renamed Northern Enterprises Limited | |
| Robert Perez De La Sala died | |
| Christina and James moved to Singapore | |
| Edward and Lyndel joined Christina and James in Singapore | |
| Camila Vasquez De La Sala passed away | |
| ECJ passed resolutions to limit Ernest’s authority to operate accounts | |
| ECJ reversed earlier resolutions, authorising Ernest to be sole signatory | |
| ECJ retrieved corporate files from Ernest’s safe deposit box | |
| ECJ returned corporate files to UBS Singapore | |
| Ernest transferred shares of SMC to himself | |
| ECJ called meetings of the boards of directors | |
| Plaintiff Companies commenced action against Ernest | |
| Judgment reserved |
7. Legal Issues
- Breach of Trust
- Outcome: The court found that the defendant did not act in breach of trust.
- Category: Substantive
- Breach of Fiduciary Duties
- Outcome: The court found that the defendant did not act in breach of fiduciary duties.
- Category: Substantive
- Misrepresentation
- Outcome: The court allowed the counterclaim for misrepresentation.
- Category: Substantive
8. Remedies Sought
- Declaration of Beneficial Ownership
- Account of Profits
- Damages
- Rescission of Contract
9. Cause of Actions
- Breach of Trust
- Breach of Fiduciary Duties
- Misrepresentation
- Conspiracy to Injure
10. Practice Areas
- Commercial Litigation
11. Industries
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Guy Neale and others v Nine Squares Pty Ltd | High Court | Yes | [2013] SGHC 249 | Singapore | Cited for the principle of certainty of intention in establishing a trust. |
| Guy Neale and others v Nine Squares Pty Ltd | Court of Appeal | Yes | [2015] 1 SLR 1097 | Singapore | Cited for the three certainties required for the creation of an express trust: certainty of intention, subject matter, and objects. |
| Paul v Constance | N/A | Yes | [1977] 1 WLR 527 | N/A | Cited for the principle that an express trust can be created by means of an informal declaration. |
| Tito v Waddell (No 2) | N/A | Yes | [1977] Ch 106 | N/A | Cited for the principle that a trust may be created without using the word 'trust,' and the court must look to the circumstances and construction of what was said and written to determine if a true trust has been manifested. |
| Tee Yok Kiat v Pang Min Seng | Court of Appeal | Yes | [2013] SGCA 9 | Singapore | Cited for the principle that the burden of proving a trust claim is beyond the balance of probabilities. |
| Low Ah Cheow and others v Ng Hock Guan | N/A | Yes | [2009] 3 SLR(R) 1079 | Singapore | Cited for the principle that the burden of proving a trust claim is beyond the balance of probabilities. |
| Boris Abramovich Berezovsky v Roman Arkadievich Abramovich | N/A | No | [2012] EWHC 2463 (Comm) | England and Wales | Cited for the description of a litigant as an unimpressive and inherently unreliable witness who regarded truth as a transitory, flexible concept. |
| R v Momodou | N/A | Yes | [2005] 2 All ER 571 | N/A | Cited for the distinction between witness training or coaching and witness familiarization, and the principle that training or coaching for witnesses in criminal proceedings is not permitted. |
| Ultraframe (UK) Ltd v Gary Fielding and others | High Court | Yes | [2005] EWHC 1638 (Ch) | England and Wales | Cited for the principle that a witness’ evidence should be his honest and independent recollection, expressed in his own words, remains at the heart of civil litigation too. |
| HKSAR v Tse Tat Fung | Court of Appeal | Yes | [2010] HKCA 156 | Hong Kong | Cited for the principle that the danger in discussing with a witness his evidence prior to trial is that the witness’s recollection of events will either consciously or unconsciously alter so as to accommodate what the witness perceives as a better version of events. |
| Day v Perisher Blue Pty Ltd | Court of Appeal | Yes | [2005] NSWCA 110 | New South Wales | Cited for the principle that it is improper for witnesses to discuss their evidence with each other and for solicitors to ensure that witnesses give evidence which would best serve their employer’s case. |
| Browne v Dunn | N/A | Yes | (1893) 6 R 67 | N/A | Cited for the rule that a party must cross-examine a witness on any matter that the party intends to contradict. |
| Ong Jane Rebecca v Lim Lie Hoe and Ors | Court of Appeal | Yes | [2005] SGCA 4 | Singapore | Cited for the rule that a party must cross-examine a witness on any matter that the party intends to contradict. |
| Hong Leong Finance v United Overseas Bank | N/A | Yes | [2007] 1 SLR(R) 292 | Singapore | Cited for the rule that a party must cross-examine a witness on any matter that the party intends to contradict. |
| Schering Corporation v CIPLA Ltd and another | High Court | Yes | [2004] EWHC 2587 (Ch) | England and Wales | Cited for the principle that a letter is a negotiating document and covered by the without prejudice privilege if the author maximizes the strength of his case but expresses a willingness to negotiate. |
| Rush & Tompkins Ltd v Greater London Council | N/A | Yes | [1989] AC 1280 | N/A | Cited for the principle that the without prejudice privilege is founded on the public policy of encouraging litigants to settle their differences rather than to litigate them to the finish. |
| Mariwu Industrial Co (S) Pte Ltd v Dextra Asia Co Ltd and another | N/A | Yes | [2006] 4 SLR(R) 807 | Singapore | Cited for the prerequisites before the without prejudice privilege may be invoked: the communication must arise in the course of genuine negotiations to settle a dispute, and the communication must constitute or involve an admission against the maker’s interest. |
| Sin Lian Heng Construction Pte Ltd v Singapore Telecommunications Ltd | N/A | Yes | [2007] 2 SLR(R) 433 | Singapore | Cited for the principle that a genuine invitation to negotiate a settlement is sufficient, in and of itself, to constitute an admission against interest for the purposes of attracting without prejudice privilege. |
| Tan Mui Teck v Public Prosecutor | N/A | Yes | [2003] 3 SLR(R) 139 | Singapore | Cited for the principle that when evaluating the evidence given by an expert, the court will take into account the credentials of the expert and the methodology by which the expert reached his or her conclusions. |
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
- Orphan Structure
- Family Legacy
- Beneficial Ownership
- Trust
- Fiduciary Duty
- Misrepresentation
- Estate Duty
- Tax Exile
15.2 Keywords
- Trust
- Fiduciary Duty
- Misrepresentation
- Singapore
- High Court
- Breach of Trust
- Family Legacy
- Shipping
17. Areas of Law
16. Subjects
- Trusts
- Equity
- Breach of Trust
- Fiduciary Duties
- Misrepresentation