Mukherjee v. Biswas: Breach of Fiduciary Duty, Tort of Deceit, Investments, Banking Relationship Manager

In Sabyasachi Mukherjee and Gouri Mukherjee v Pradeepto Kumar Biswas, the plaintiffs, husband and wife, sued the defendant, their former investment advisor, in the High Court of Singapore, alleging breach of fiduciary duty, breach of trust, and the tort of deceit, claiming US$3.45m in outstanding principal and US$1,328,332.19 in reasonable returns related to seven investments. A related action, Indian Ocean Group Pte Ltd v Gouri Mukherjee, involved a loan dispute. The court found Pradeepto liable for breach of fiduciary duty in relation to six investments, awarding US$3.45m, but dismissed the claim for reasonable returns and the related action.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Judgment for Plaintiffs in part.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Husband and wife sued their investment advisor for breach of fiduciary duty and deceit over investment losses. Judgment for plaintiffs in part.

1.7 Decision Date

10 December 2018

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Pradeepto Kumar Biswas	Defendant	Individual	Judgment against Defendant	Lost	Liew Teck Huat of Niru & Co LLC Kenneth Yap of Niru & Co LLC Christopher Yee of Niru & Co LLC
Sabyasachi Mukherjee	Plaintiff	Individual	Partial Judgment for Plaintiff	Partial	Muk Chen Yeen Jonathan of Tan Kok Quan Partnership Chan Yi Zhang of Tan Kok Quan Partnership Eddee Ng of Tan Kok Quan Partnership Sherlene Goh Shi Li of Tan Kok Quan Partnership Jeremy Toh of Tan Kok Quan Partnership
Gouri Mukherjee	Plaintiff, Defendant	Individual	Partial Judgment for Plaintiff, Claim Dismissed	Partial	Muk Chen Yeen Jonathan of Tan Kok Quan Partnership Chan Yi Zhang of Tan Kok Quan Partnership Eddee Ng of Tan Kok Quan Partnership Sherlene Goh Shi Li of Tan Kok Quan Partnership Jeremy Toh of Tan Kok Quan Partnership
Indian Ocean Group Pte Ltd	Plaintiff	Corporation	Claim Dismissed	Dismissed	Liew Teck Huat of Niru & Co LLC Kenneth Yap of Niru & Co LLC Christopher Yee of Niru & Co LLC

3. Judges

Judge Name	Title	Delivered Judgment
Belinda Ang Saw Ean	Judge	Yes

4. Counsels

Counsel Name	Organization
Liew Teck Huat	Niru & Co LLC
Kenneth Yap	Niru & Co LLC
Christopher Yee	Niru & Co LLC
Muk Chen Yeen Jonathan	Tan Kok Quan Partnership
Chan Yi Zhang	Tan Kok Quan Partnership
Eddee Ng	Tan Kok Quan Partnership
Sherlene Goh Shi Li	Tan Kok Quan Partnership
Jeremy Toh	Tan Kok Quan Partnership

4. Facts

The Mukherjees made various investments totaling US$4.5m on the advice of Pradeepto.
Pradeepto was the Mukherjees' investment advisor for more than ten years.
The Mukherjees alleged that Pradeepto swindled them of US$3.45m through complex financial instruments.
The Mukherjees claimed that the seven investments were inappropriate for them.
Pradeepto denies any wrongdoing.
The Mukherjees base their claims on breach of fiduciary duty, breach of trust, and the tort of deceit.
The Mukherjees sought recovery of the outstanding principal amounts totaling US$3.45m and reasonable returns of US$1,328,332.19.

5. Formal Citations

Sabyasachi Mukherjee and another v Pradeepto Kumar Biswas and another suit, Suit No 1270 of 2014 and Suit No 417 of 2017, [2018] SGHC 271

6. Timeline

Date	Event
2011-01-01	Mukherjees invested in Swajas Air Charters Limited.
2011-09-26	Swajas Air Charters Limited IPO opened.
2011-09-28	Original closing date of Swajas Air Charters Limited IPO.
2011-10-05	Extended closing date of Swajas Air Charters Limited IPO.
2011-01-01	Swajas Air Charters Limited IPO was cancelled.
2012-09-12	Dr Mukherjee instructed the repayment of the US$500,000 Swajas investment.
2013-04-01	Mukherjees received the subscription monies for the Swajas investment.
2013-05-01	Neodymium and Peak Investments were introduced to the Mukherjees.
2013-05-21	Mukherjees instructed Barclays Bank to transfer US$2.25m to Pacatolus SPV 6.
2013-05-29	Debenture made between Pacatolus SPV 6 and Trilogy.
2013-05-31	Pacatolus SPV 6 transferred approximately S$2.5m to Trilogy.
2013-07-01	Pradeepto brought to Gouri's attention the Trade Sea Investment.
2013-07-01	Pradeepto advised the Mukherjees to invest in Farmlands of Africa.
2013-08-12	Mukherjees allocated funds to the Trade Sea Investment.
2013-08-12	Mukherjees allocated funds to the Farmlands of Africa Investment.
2013-10-04	Pradeepto introduced the SEW Trident investment to the Mukherjees.
2013-10-21	Gouri agreed to allocate US$300,000 to SEW Trident.
2013-10-31	Cheque was deposited into SEW Trident’s account.
2013-10-30	Pradeepto introduced Mr Simon Woods of Deer Creek to BIL and/or Farmlands of Africa.
2013-11-01	Gouri found out that her cheque was cleared.
2013-11-01	Gouri requested Pradeepto to provide a statement of all her running investments.
2013-11-01	Neodymium was struck off the register.
2013-11-01	Pradeepto expressed deep concerns over Trilogy’s liabilities.
2013-11-26	Pradeepto approached Gouri to have her allocate funds to SEW Trident.
2013-11-27	Gouri handed Pradeepto a cheque for US$500,000 for the SEW Investment.
2013-11-27	Gouri sought Pradeepto’s assistance to procure a banker’s guarantee.
2013-11-28	SEW Trident entered into a loan agreement with IOEL.
2013-12-01	Gouri sought redemption of the SEW Investment.
2013-12-13	Pradeepto informed Gouri that the SEW Investment was already redeemed.
2013-12-20	PCI Cheque of US$500,000 was issued.
2013-12-23	PCI Cheque was dishonoured.
2013-12-23	Habib Bank issued the banker’s guarantee.
2013-12-28	Mr Kanade took umbrage with Pradeepto’s empty promises of having monies returned.
2014-01-07	Mr Mehra emailed Pradeepto regarding the redemption of the Debenture.
2014-01-17	Banker's guarantee was amended and reissued.
2014-01-23	Gouri instructed Pradeepto to unwind the Pacatolus Investment.
2014-02-17	Pradeepto informed the Mukherjees that they were able to redeem their investment in March 2014.
2014-02-20	Introducer Agreement was signed with Deer Creek.
2014-02-25	Pradeepto told Gouri that the funds had been remitted to IOEL.
2014-02-26	Pradeepto told Gouri that she would be receiving the sum of US$500,000 in two lots of US$250,000 each.
2014-03-03	Gouri received US$250,000.
2014-03-10	Bill of US$125,000 as introducer fees was sent to Deer Creek.
2014-03-12	Pradeepto gave a clear signal that redemption was eminent.
2014-03-27	Representative of Buddhavarapu Holdings SA wrote to Pradeepto informing him that they had honoured his request to pay the Mukherjees US$300,000.
2014-04-03	Pradeepto instructed Mr Woods to have US$500,000 transferred to BIL.
2014-04-17	Expiry date of banker's guarantee.
2014-05-01	Gouri requested Pradeepto to prepare the redemption instructions to be sent to Barclays Bank.
2014-06-01	Gouri requested Pradeepto to prepare the redemption instructions to be sent to Barclays Bank.
2014-06-09	Mukherjees instructed Barclays Bank to redeem the Pacatolus Investment.
2014-06-13	Apex submitted the redemption request which it had received from Citco to Mr Mehra.
2014-06-17	Apex sent a follow up email to Mr Mehra regarding the redemption request.
2014-06-18	Pradeepto sent an email to the Mukherjees where he stated the need for a structured exit.
2014-06-20	Apex acknowledged Citco’s request to redeem the Pacatolus Investment.
2014-07-04	Tape-recorded conversation at the airport during a meeting between the parties.
2014-07-01	Meeting with the Mukherjees where Pradeepto emphasised to the Mukherjees that the Pacatolus Investment required a structured exit.
2014-07-18	Apex informed Citco that it would not proceed with the redemption request.
2014-08-05	Apex escalated the matter to Mr Mehra.
2014-08-12	Citco directly contacted Mr Mehra.
2014-09-02	Apex sent a follow up email to Mr Mehra seeking an update on the status of the redemption.
2014-09-04	Mr Mehra sent an email to Pradeepto.
2014-09-09	Mr Mehra sent another email to Pradeepto as a chaser.
2014-09-18	Email stating that BIL acknowledged that the Mukherjees had earned returns of US$30,630.
2017-04-01	Suit No 417 of 2017 filed.
2017-08-29	Order of Court dated 29 August 2017, both actions were listed for hearing before this court and Suit 417/2017 proceeded immediately after Suit 1270/2014.
2017-09-22	Statement of claim was amended.
2017-11-07	Trial started.
2017-11-07	Trial dates: 7-–10, 13–16, 20–24, 27–30 November 2017.
2018-04-20	Hearing date: 20 April 2018.
2018-12-11	Judgment reserved: 11 December 2018.

7. Legal Issues

Breach of Fiduciary Duty
- Outcome: The court found that the defendant breached his fiduciary duty in relation to six of the seven investments.
- Category: Substantive
- Sub-Issues:
  - Conflict of interest
  - Failure to disclose material facts
  - Breach of duty of loyalty
Tort of Deceit
- Outcome: The court found that the defendant committed the tort of deceit in relation to some of the investments.
- Category: Substantive
- Sub-Issues:
  - False representation
  - Inducement
  - Damages
Breach of Trust
- Outcome: The court found that no Quistclose trust arose from the facts of the case.
- Category: Substantive
- Sub-Issues:
  - Quistclose trust
  - Remedial constructive trust
Title to Sue
- Outcome: The court found that IOGPL had no locus standi to sue Gouri.
- Category: Jurisdictional

8. Remedies Sought

Recovery of investment capital
Reasonable returns on investments
Damages for the tort of deceit
Equitable compensation for breach of fiduciary duty
Account of profits for breach of fiduciary duty
Imposition of a remedial constructive trust

9. Cause of Actions

Breach of Fiduciary Duty
Breach of Trust
Tort of Deceit

10. Practice Areas

Commercial Litigation
Banking Litigation
Investment Disputes

11. Industries

Banking
Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Gimpex Ltd v Unity Holdings Business Ltd and other and another appeal	Court of Appeal	Yes	[2015] 2 SLR 686	Singapore	Cited regarding the evidential burden of proof.
Tan Yok Koon v Tan Choo Suan and another and other appeals	Court of Appeal	Yes	[2017] 1 SLR 654	Singapore	Cited for the principle that whether an individual is a fiduciary is a fact-sensitive inquiry.
Bristol and West Building Society v Mothew	Court of Appeal	Yes	[1998] 1 Ch 1	England and Wales	Cited for the definition of a fiduciary and their obligations.
Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and other appeals	Court of Appeal	Yes	[2018] 2 SLR 655	Singapore	Cited for the principle that a fiduciary is one who exercises control over the property or affairs of another.
Twinsectra Ltd v Yardley and others	House of Lords	Yes	[2002] 2 AC 164	United Kingdom	Cited to illustrate the requirements for a Quistclose trust.
Maryani Sadeli v Arjun Permanand Samtani and another and other appeals	Court of Appeal	Yes	[2015] 1 SLR 496	Singapore	Cited regarding the law on equitable compensation.
Medsted Associate Ld v Canaccord Genuity Wealth (International) Ltd	High Court	Yes	[2018] 1 WLR	England and Wales	Cited for the definition of agency and the fiduciary duties arising from it.
Hurstanger Ltd v Wilson	Court of Appeal	Yes	[2007] 1 WLR 2351	England and Wales	Example of a loan broker who is a fiduciary.
Commercial First Business Ltd v Pickup	Court of Appeal	Yes	[2017] CTLC 1	England and Wales	Example of a loan broker who is not a fiduciary.
McWilliam v Norton Finance (UK) Ltd (trading as Norton Finance)	Court of Appeal	Yes	[2015] 1 All ER (Comm) 1026	England and Wales	Example of a credit broker who is a fiduciary.
Marty Limited v Hualon Corporation (Malaysia) Sdn Bhd (receiver and manager appointed)	Court of Appeal	Yes	[2018] SGCA 63	Singapore	Cited for the principle that a party who signs a document is deemed to know its contents.
East and another v Maurer and another	Court of Appeal	Yes	[1991] 1 WLR 461	England and Wales	Cited regarding the claim for reasonable returns on investments.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Civil Law Act (Cap 43, Rev Ed 1999)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Relationship Manager
Investments
Fiduciary Duties
Tort of Deceit
Trust
Pre-Initial Public Offering shares
Project financing
Growth fund
Trade financing
Debenture

15.2 Keywords

Investment Advisor
Breach of Duty
Singapore
High Court
Investments
Fiduciary

17. Areas of Law

Area Name	Relevance Score
Fiduciary Duties	95
Fraud and Deceit	80
Banking and Finance	75
Trust Law	65
Contract Law	60
Investment	60
Commercial Litigation	50
Business Litigation	50
Relationship Manager	40

16. Subjects

Investment Law
Banking Law
Fiduciary Duty
Commercial Law
Financial Services