Nand v Kumar [2011] FJCA 24; ABU0086.2008 (10 March 2011)

IN THE COURT OF APPEAL, FIJI ISLANDS

CIVIL APPEAL NO.ABU 0086 OF 2008
(High Court Civil Action No. 179 of 1992L)

BETWEEN:

ISHWAR NAND
FIRST APPELLANT

AND:

ISHWAR NAND
HARI NAND
SECOND APPELLANTS

AND:

RAMESH KUMAR
SUNIL KUMAR
RESPONDENTS

CORAM: Hon. Justice William R. Marshall, Justice of Appeal
Hon. Justice Izaz Khan, Justice of Appeal
Hon. Justice Kankani T. Chitrasiri, Justice of Appeal

COUNSEL: Mr M S Sahu Khan for the Appellants
Mr V M Mishra for the Respondents

Date of Hearing: Tuesday, 22 February 2011

Date of Judgment: Thursday, 10th March 2011

JUDGMENT

William Marshall, JA

1. For the reasons given in the judgment of Izaz Khan JA I would dismiss this appeal and order as he proposes.
   

Izaz Khan, JA

2. This is an appeal by two brothers Ishwar Nand and Hari Nand both of whom were executors and trustees of their father's estate against their two brothers, Ramesh Kumar and Sunil Kumar who were plaintiffs below and who reside in New South Wales, Australia. Ram Asre died on 28th September, 1978.
   
3. Ram Asre had left a Will pursuant to which he gave his wife a life estate and gave the residue to the plaintiffs/respondents and another of his sons, Hari Nand. The residue constituted of a sugarcane farm of 22 acres which also has a vegetable farm.
   
4. His wife died on 25th June 1988 when her life estate terminated and the plaintiffs/respondents were entitled to the transfer of their residuary gift.
   
5. However, the executors and trustees failed to distribute the assets of the deceased at the time the hearing of this matter commenced which was in November 2008 making it about a 20 year delay.
   
6. One of the beneficiaries namely, Hari Nand and Anil Kumar, who was another son of Ram Asre and who is now deceased and is not really a participant in these proceedings were the ones who were running the farm and enjoying the fruits from it. Indeed, it was the evidence of Ishwar Nand, who is an Accountant and who lives in Suva that he conducted the accounts of the farm, made out the cheques which were said to be written in favour of Hari Nand and Anil Kumar whenever he received proceeds from sugarcane. There was also evidence that Hari Nand was the major cane farmer occupying two thirds of the cane farm, and Anil Kumar also ran part of the farm, about 7 acres which had sugar cane, and a vegetable and fruit farm as well. He had a stall in the Tavua market from where he sold his vegetables and fruits.
   
7. Anil Kumar died on 31st May 2003 and since then his sons have worked the farm involving sugarcane and vegetables and fruits.
   
8. It is clear from the evidence before the trial Judge, His Lordship Finnigan, J that no attempts were ever made by executors and trustees, namely the defendants/appellants to distribute the residue of Ram Asre's estate after the death of the life tenant, his wife on 25th June 1988.
   
9. One of the major controversies in this case was given rise to by three so called "settlement" documents prepared by the defendants/appellants whereby they purported to change the intentions of the testator Ram Asre in respect of the way in which his property was to be divided.
   
10. The first one is dated 10th July 1988 and it was described by Ishwar Nand who said that when their mother died in June 1988, all the brothers got together and had a meeting. The document had a File Note which was exhibit D1 which had been kept secret until the hearing. According to Ishwar Nand all the brothers attended the meeting and re-arranged their father's bequest. The two plaintiffs denied there was any such meeting.
    
11. The document is reproduced at pages 11 and 12 of the judgment in Volume 1 of the Appeal Book and provides inter alia that Ramesh Kumar proposed that the estate house should be given to Anil Kumar and a small house be built for Hari Nand. Sunil Kumar stated that he will give his share of land to Hari Nand and Ramesh Kumar agreed to sell his share of 7 acres of land to Anil Kumar for $8000.
    
12. The document was not signed by the plaintiffs nor was it signed by the trustees except for Ishwar Nand.
    
13. As an aside, it might be noted that as Ishwar Nand, an Accountant did all the accounting work for the farm, paying the accounts and preparing the cheques, it was found by His Lordship Finnigan, J that it was common knowledge that if and when the Will of Ram Asre was to be produced it would be produced by him. But he never did.
    
14. The two plaintiffs/appellants and Hari Nand instructed Mr A. K. Narayan, a lawyer in Ba to act for them and he obtained a copy of the probate with the Will annexed. That was when the plaintiffs commenced proceedings to have Ishwar Nand and Anil Kumar removed as trustees.
    
15. Thus proceedings were commenced by the two plaintiffs/respondents and Hari Nand as the three beneficiaries to have the trustees removed. Hari Nand was given powers of attorney by the two plaintiffs in very wide terms.
    
16. The two plaintiffs/respondents and Hari Nand instructed A.K.Narayan and company to initiate action to have the trustees removed. When the matter came for hearing before the Lautoka High Court, on 19th March 1992 it was told that the matter had been settled. Eventually the matter was adjourned sine die.
    
17. The Trial Judge in the Court below in this action noted that there was indeed a form of settlement reached. It had never been filed in Court. It had come about as a result of the members of the family compromising their rights without legal advice and the proceedings in Court were abandoned.
    
18. The next event of note is that a further "settlement" was alleged to have been reached in 1992. It was brought about on 22nd March 1992 and is headed THE SETTLEMENT made BETWEEN HARI NAND, RAMESH KUMAR, ANIL KUMAR and SUNIL KUMAR all children of RAM ASRE.
    
19. It was signed by Hari Nand, Anil Kumar and Ishwar Nand. Hari Nand is said to have signed for both plaintiffs/respondents under the powers of Attorney given to him by them. Since Ishwar Nand who was both a trustee and a beneficiary was not a party to this "settlement" but merely a witness it could not, even if it was otherwise valid, be the basis for a lawful variation of trust.
    
20. Again, this purported "settlement" was designed to amend the disposition of Ram Asre's estate in various ways.
    
21. There was another "settlement" entered into by Anil Kumar and Hari Nand which was restricted only to those two and did not affect the distribution of Ram Asre's estate other than what had already been purportedly agreed upon.
    
22. It was recorded in the following terms by the trial Judge at paragraph[37] that the plaintiffs/respondents had not signed any settlement documents:
    

"It is the unwavering evidence of both plaintiffs that they were not parties to any purported settlement on 10th July 1998, nor to the proceedings recorded over the signature of Hari Nand dated 22nd and 24th March 1992. All those documents are set out above. That evidence seems to me to be consistent with the evidence about their actions particularly the four significant events just noted."

23. The four significant events to which the trial judge referred are on page 24 of his judgment and they record the chronology of events which took place up to the point when Messrs Koyas filed the present proceedings on behalf of the plaintiffs on 10th June 1992.
    
24. The trial Judge was able to conclude on the evidence before him that the two trustees who are the appellants in this appeal together with an older brother, Sharda Prasad actively attempted to frustrate the testators' intention in respect of his residual estate. At paragraphs [41] to [44] his Lordship observed:
    

"[41] Certain other things are clear. The first, nothing was done about the residual estate while the widow was alive. That was as it should be. Hari Nand worked about two-thirds of the farm and produced sugarcane. Anil Kumar worked a part of the farm, with some sugarcane and vegetables and fruits. Cane farming was Hari Nand's full occupation. Anil Kumar ran his own business at the Tavua market, selling produce from the farm. Ishwar Nand in Suva handled financial matters for the estate. There is no evidence whether Anil Kumar accounted to the life tenant or to the estate for his profits or paid anything to the estate for use on the farm."

[42] Second, the money produced by cane farming was taken in by and treated by Ishwar Nand as estate income. Any money that was needed by his mother was paid to her from the estate by him. Income from cane farming was paid to both Hari Nand and Anil Kumar.

[43] Third, after their mother died neither Hari Nand nor Anil Kumar nor Ishwar Nand took any action to distribute the residual bequest. To the contrary, Anil Kumar laid claim to some of the estate land for himself. He is prepared to take a tribunal claim under ALTA against the estate of which he was trustee. He never took action in the Courts to amend the terms of his trusteeship and never challenged the will. He did do these things but not what he should have.

[44] Fourth, there is no reliable evidence of any direct action by either plaintiff to renounce his share in the estate. There is some evidence that they both participated in discussions and even agreed to change the arrangements made for their benefit in their father's will. None of this evidence is related to them. I reject it. The first "compromise" document is unreliable for several reasons: ..."

25. The reasons given by His Lordship are:
    
    • (i) Its existence was never disclosed to the plaintiffs.
      
    • (ii) It is undated.
      
    • (iii) Nothing in it has ever been regularized in proceedings taken to alter the terms of the Will, for example, no court sanction was ever sought and there was an avoidance of transmission of interest to those who were entitled to such interest under the Will.
      

25. In his Lordship's view, the second "settlement" document which is dated 22nd March 1992 suffers from the same defects. On page 22 His Lordship made the following comments:

"The second settlement documents suffers from the same defects. Even greater doubts are cast on it by the actions of Hari Nand who purported to alter the terms of the trust in the Will to his own benefits. To do this he used his powers of attorney in a secretive way to effect an outcome of the High Court proceedings No. 105/1991 which not only benefited himself and deprived his two co-beneficiaries of their benefits; he acted contrary to their instructions in his purported exercise of the powers of attorney given to him. The outcome which he purportedly settled by his signature actually was the opposite of the stated objects of those proceedings and the verbally stated objects of his Powers of Attorney. The evidence leaves me in no doubt that, whether or not their solicitor advised signing a full Power of Attorney, the two plaintiffs did so in order to give their brother and fellow beneficiary authority to conduct and settle the action to remove the other two trustees. He deceived them. He used the powers for other purposes."

26. His Lordship proceeded to hold that none of the Executors and trustees were fit to be executors and trustees and ordered their removal.
    
27. In the circumstances of this factual matrix the following issues arose from the grounds of appeal and were argued before the Court of Appeal:
    
    1. Whether the trial judge was entitled to award damages to the plaintiffs
       
    2. Whether he was entitled to award damages against the appellants personally
       
    3. Whether the three so called "settlements" were effective to change the intentions of the testator in respect of the distribution of his estate.
       

28. His Lordship Finnigan, J awarded the following remedies to the plaintiffs:

i) He declared that the plaintiffs were not bound in any way by either of the documents mentioned as "settlements" dated 10th July 1988, 22nd March 1992 and 24th March 1992.

ii) He held that proper accounts were not able to be ordered because of the lack of evidence in that respect. Therefore he acceded to the request of counsel for the plaintiffs / respondents that a lesser remedy could be granted, namely, the cane proceeds since 1993 which were proved. His Lordship made an award granting that accounts be taken for the cane proceeds since 1993 and he awarded the sum of $29,119.22 to each Plaintiff/Respondent which he derived from the summary of such proceeds prepared by counsel for the plaintiffs, Mr V. Mishra.

iii) His honour declined to make an order for an interim injunction restraining the defendants as trustees pending the completion of this action because his orders for the removal of the trustees makes such an order unnecessary.

4. He ordered the removal of the trustees and the appointment of the plaintiffs as trustees in their place.
   

29. Dr Sahu Khan argued for the appellants that what the court did was to award damages against the respondents personally. Therefore, he argued that the trial Judge was wrong on both counts, that is, in awarding damages and in awarding damages personally. The reason behind this submission was that no claim had ever been made for damages and therefore the respondents were taken by surprise when damages were awarded and they had no opportunity to make any submissions in respect thereto. As to the question of personal liability as opposed to liability as executors and trustees, the submission was based simply on the fact that Ishwar Nand and Hari
    

Nand were sued as executors and trustees of the estate of Ram Asre. Therefore, it was argued, they could not possibly be liable personally.

30. Dealing with the question of damages first, in my view, in awarding one-third to each of the Plaintiffs/Respondents from the cane proceeds of the estate farm of Ram Asre for the years 1993 to 2008 in the sum of $29,119.22 was not damages but clearly the product of accounting as had been sought by the plaintiffs. Had it been damages, one would have expected a proper assessment of damages by reference to valuations and expert evidence in respect of value. No such step was taken by the trial Judge but he made specific reference to the fact that accounting had been sought by the plaintiffs and in response to that he had come to award the sum I have already mentioned to each of the plaintiffs. Therefore, the appellants were not denied an opportunity to be heard.
    
31. I reject the respondent's submission that the trial Judge had awarded damages. There is no basis upon which a conclusion could be reached that damages had been awarded because a monetary sum had been awarded in the absence of proper assessment. The assessment which His Lordship made was a process of accounting which eventually lead to a final figure which he awarded.
    
32. As for the question of personal liability of the respondents, it is my view that the trial judge was fully entitled to make such an order in the circumstances where he found that the executors and trustees had acted as executors and trustees in serious breaches of their duties for personal gain. He not only removed the respondents as executors and trustees as being unfit to carry out the responsibilities which they had undertaken but found them to have been in repeated egregious breaches of their duties as executors and trustees. The failure to distribute the residue of the estate of Ram Asre after the death of his wife in 1988 is one. The other is an attempt to
    

defraud the plaintiffs/respondents of their entitlement under their father's Will by arranging and participating in the purported "settlements" which if put into effect, would have distributed his estate in a manner which would have been contrary to his intentions. The plaintiffs/respondents deny signing any "settlement" and deny any knowledge of them.

33. At the end of paragraph[38]his Lordship said:
    

"There has been throughout only one issue, were the plaintiffs parties to the two alleged settlements in 1988 and 1992?"

34. His Lordship answered himself in paragraph [39] as follows:
    

"That issue on the balance of probabilities resolves itself easily. For a start, they have never been paid. They have never been offered money. They stand at present in the state of detriment i.e. without their bequest and with nothing to show for it. Neither have the defendants anything to show for their claim. There is no renunciation by these two beneficiaries, no documents of any sort have been prepared let alone file by the trustees to give effect to any variation of their father's Will. All they have to show are certain self-serving documents prepared let alone filed by themselves in which they say these two beneficiaries agree to forego their bequest. Neither beneficiaries have signed. Hari Nand has signed using the Powers of Attorney to gain a benefit for himself. On this evidence one can scarcely make any finding in favour of the trustees. The dispute resolves itself in favour of the two plaintiffs. After observing them and observing Ishwar Nand as they gave their evidence and after considering all of the evidence I have no doubt at all, from the demeanor of the witnesses and from the whole history of the events, that the trustees arranged everything. It is my findings that the two plaintiffs have not participated in any purported arrangement whereby they are not to see their residual bequest in their father's Will."

35. The Trial Judge had the opportunity to assess the witnesses as they gave their evidence. He also had the opportunity to assess the relevant documents that were tendered in evidence. Nothing has been shown to this Court to enable it to overturn the findings of the trial judge. The applicable principle in circumstances where the trial judge's findings are under attack were clearly set out in Mahadeo Singh v. Chandra Singh (1970) FLR 155 where the Court of Appeal where Gould VP, with whom Marsack JA and Tompkins JA agreed, said at p.159:
    

"Much has been written as to the position of an Appeal Court which is invited to reverse on a question of fact the judgment of the Judge sitting without a jury, who had the advantage of seeing and hearing witnesses. Where he has based his opinion in whole or part on their demeanor it is only in the rarest of cases the appeal court will do so. Yuill v. Yuill [1945] P.15."

36. This is not such a rare case. It follows that I totally agree with the trial Judge's findings in respect of the "settlements" and I hold as he did that the "settlements" did not bind the respondents and simply were ineffective attempts to alter the transmission of Ram Asre's estate contrary to his intentions. In my view this appeal should be dismissed and the Appellants should pay the Respondents costs of the appeal assessed at $3000.
    

Kankani T. Chitrasiri, JA

37. I agree with the judgment, the reasons and the proposed orders of Izaz Khan, JA.
    

William Marshall, JA

THE ORDERS OF THE COURT

38. The Orders of the Court are:
    
    1. That the appeals of the Appellant and of the 2nd Appellants be dismissed.
       
    2. That the First Appellant pay to the Respondents their costs of this appeal assessed at $3000.
       

Hon. Justice William R. Marshall
Justice of Appeal

Hon. Justice Izaz Khan
Justice of Appeal

Hon. Justice Chitrasiri T. Kankani
Justice of Appeal