Godhwani v Godhwani: Breach of Trust & Misappropriation of Inheritance Funds
In a civil suit before the High Court of Singapore, Bhavika Manohar Godhwani sued Manohar Hargun Godhwani, Larissa International Holdings Ltd, and Florenza Investments Inc, alleging breaches of trust and misappropriation of her inheritance. The plaintiff claimed the first defendant, her husband, misappropriated funds and securities beneficially owned by her. The first defendant argued the funds were a gift. The court found no evidence of a gift and ruled the first defendant misappropriated funds. However, the court only partially allowed the plaintiff's claim. Both the plaintiff and the first defendant have since appealed.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Claim partially allowed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Breach of trust claim where husband misappropriated wife's inheritance funds. Court found no gift, but only partially allowed wife's claim.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Bhavika Manohar Godhwani | Plaintiff | Individual | Claim partially allowed | Partial | Teh Guek Ngor Engelin SC, Yeo Yian Hui Mark, Lim Xiao Wei Charmaine, Bryan Hew Jianrong |
| Manohar Hargun Godhwani | Defendant | Individual | Claim partially allowed | Lost | Yogarajah Yoga Sharmini, Subashini d/o Narayanasamy, Kannan s/o Balakrishnan |
| Larissa International Holdings Ltd | Defendant | Corporation | Claim dismissed | Dismissed | Yogarajah Yoga Sharmini, Subashini d/o Narayanasamy, Kannan s/o Balakrishnan |
| Florenza Investments Inc | Defendant | Corporation | Claim dismissed | Dismissed | Yogarajah Yoga Sharmini, Subashini d/o Narayanasamy, Kannan s/o Balakrishnan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Kannan Ramesh | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Teh Guek Ngor Engelin SC | Engelin Teh Practice LLC |
| Yeo Yian Hui Mark | Engelin Teh Practice LLC |
| Lim Xiao Wei Charmaine | Engelin Teh Practice LLC |
| Bryan Hew Jianrong | Engelin Teh Practice LLC |
| Yogarajah Yoga Sharmini | Haridass Ho & Partners |
| Subashini d/o Narayanasamy | Haridass Ho & Partners |
| Kannan s/o Balakrishnan | Haridass Ho & Partners |
4. Facts
- Plaintiff and first defendant are wife and husband.
- Plaintiff's father passed away, leaving behind substantial assets in his estate.
- Plaintiff was bequeathed the Inheritance, which comprised a quarter of the Estate.
- Plaintiff transferred portions of the Inheritance into the Bank Accounts.
- First defendant transferred funds from the Bank Accounts to other bank accounts.
- Plaintiff claimed that the first defendant had misappropriated the funds and securities.
- First defendant claimed that the plaintiff had promised to give him 50% of the Inheritance.
5. Formal Citations
- Bhavika Manohar Godhwani v Manohar Hargun Godhwani and others, Suit No 428 of 2017, [2020] SGHC 147
6. Timeline
| Date | Event |
|---|---|
| Plaintiff's father passed away, leaving behind substantial assets in his estate. | |
| Plaintiff's solicitors applied for a succession certificate. | |
| Succession certificate issued, distributing the Estate to five people. | |
| Succession certificate appealed, Will produced, succession certificate set aside. | |
| Plaintiff reached a settlement with her mother. | |
| US$81.46m had been deposited into the plaintiff’s sole accounts. | |
| Portion of sum deposited into plaintiff's sole accounts was gradually transferred to five Singapore bank accounts. | |
| First defendant began surreptitiously transferring funds held in the Bank Accounts to five other bank accounts. | |
| Plaintiff became suspicious of first defendant's management of the Bank Accounts. | |
| Transfers from the plaintiff’s sole accounts to five Singapore bank accounts completed. | |
| Securities were transferred to UBS AG Account 371. | |
| Plaintiff discovered that the first defendant had been transferring funds to other bank accounts. | |
| Dubai Litigation commenced by the plaintiff against the first defendant. | |
| Suit No 428 of 2017 filed in the High Court of the Republic of Singapore. | |
| BVI High Court ordered that the plaintiff was permitted to pursue a derivative action against the first defendant. | |
| BVI Court of Appeal allowed the first defendant’s appeal against the order of the BVI High Court. | |
| Main tranche of the trial. | |
| Hearing date. | |
| Detailed oral grounds given. | |
| Parties directed to file submissions on costs. | |
| Costs of S$132,500 ordered against the first defendant in favor of the plaintiff. | |
| Judgment date. |
7. Legal Issues
- Breach of Trust
- Outcome: The court found that the first defendant had breached the trust by misappropriating funds.
- Category: Substantive
- Sub-Issues:
- Misappropriation of funds
- Breach of fiduciary duty
- Resulting Trust
- Outcome: The court applied the presumption of resulting trust to the funds held in the joint accounts.
- Category: Substantive
- Sub-Issues:
- Presumption of resulting trust
- Voluntary payment
- Gifts
- Outcome: The court found that there was no valid gift from the plaintiff to the first defendant.
- Category: Substantive
- Sub-Issues:
- Donative intent
- Perfection of gift
- Locus Standi
- Outcome: The court found that the plaintiff did not have locus standi to bring the action against the first defendant for the funds and the Securities that were misappropriated from the second and third defendants’ bank accounts.
- Category: Procedural
- Piercing the Corporate Veil
- Outcome: The court found that the plaintiff was attempting to engage in insider reverse piercing, which is impermissible.
- Category: Substantive
- Sub-Issues:
- Insider reverse piercing
- Separate legal personality
8. Remedies Sought
- Declaration of Trust
- Account of Funds
- Tracing Order
9. Cause of Actions
- Breach of Trust
- Misappropriation of Funds
10. Practice Areas
- Commercial Litigation
- Trust Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Westdeutsche Landesbank Girozentrale v Islington London Borough Council | N/A | Yes | [1996] AC 669 | N/A | Cited for the principle of presumption of resulting trust where one person makes a voluntary payment to another. |
| Estate of Yang Chun (Mrs) née Sun Hui Min, deceased v Yang Chia-Yin | N/A | Yes | [2019] 5 SLR 593 | Singapore | Cited for the application of the presumption of resulting trust to monies held in a joint account where the account holders had made unequal contributions. |
| One Investment and Consultancy Ltd and another v Cham Poh Meng (DBS Bank Ltd, garnishee) | N/A | Yes | [2016] 5 SLR 923 | Singapore | Cited in the context of garnishee proceedings regarding the presumption of resulting trust. |
| Chan Yuen Lan v See Fong Mun | N/A | Yes | [2014] 3 SLR 1048 | Singapore | Cited for the principle that the presumption of resulting trust is equity’s response to the lack of intention on the part of the transferor to benefit the recipient. |
| Lau Siew Kim v Yeo Guan Chye Terence and another | N/A | Yes | [2008] 2 SLR(R) 108 | Singapore | Cited for the principle that the presumption of resulting trust can be displaced either by evidence of the transferor’s intention to make a gift or the presumption of advancement. |
| Teo Song Kheng v Teo Poh Hoon | High Court | Yes | [2020] SGHC 47 | Singapore | Cited for the principle that a gift is perfected when the subject matter of the gift is transferred with donative intent from donor to donee. |
| Aljunied-Hougang Town Council and another v Lim Swee Lian Sylvia and others and another suit | High Court | Yes | [2019] SGHC 241 | Singapore | Cited for the principle that if sums have been converted into other traceable assets, the plaintiff was entitled to trace her claim into those assets, and to maintain a proprietary remedy subject to the limitations recognised by law. |
| Jhaveri Darsan Jitendra and others v Salgaocar Anil Vassudeva and others | N/A | Yes | [2018] 5 SLR 689 | Singapore | Cited for the principle against insider reverse piercing, where a shareholder attempts to pierce the corporate veil to avail himself/herself of corporate claims against third parties. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Limitation Act (Cap 163, 1996 Rev Ed) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Inheritance
- Bank Accounts
- Joint Accounts
- Disputed Transfers
- Purported Promise
- Estate Litigation
- Shell Companies
- Locus Standi
- Insider Reverse Piercing
15.2 Keywords
- trust
- inheritance
- misappropriation
- funds
- gift
- breach of trust
- resulting trust
- companies
- corporate veil
16. Subjects
- Trusts
- Company Law
- Family Law
- Financial Disputes
17. Areas of Law
- Trust Law
- Resulting Trusts
- Company Law
- Piercing the Corporate Veil