[1] T. Choithram International S.A. [2] Bytco International S.A. [3] Bholenath Inc. [4] Mahadev Inc. [5] Kishore Thakurdas Pagarani [6] Lekhraj Thakurdas Pagarani [7] Ramchand Dharmadas Rajwani [8] Vashdev Lalchand Pamnani Defendants/Appellants v [1] Lalibai Thakurdas Pagarani [2] Hasibai known as Mora Lilaram Kewlani [3] Rijha known as Kanta Kishinchand Jethwairi [4] Gopa known as Vanita Jai Motiani [5] Kumari Dhanwantithakurdas Pagarani [6] Saraswati known as Kanchan Satish Montian [7] Rukmani Aswani [8] John Greenwood Plaintiffs/Respondents
| Jurisdiction | British Virgin Islands |
| Judge | REDHEAD, J.A. |
| Judgment Date | 08 April 1998 |
| Neutral Citation | VG 1998 CA 2 |
| Judgment citation (vLex) | [1998] ECSC J0408-2 |
| Court | Court of Appeal (British Virgin Islands) |
| Docket Number | CIVIL APP. NO.2 OF 1997 |
| Date | 08 April 1998 |
IN THE COURT OF APPEAL
The Hon. Mr. C.M Dennis Byron Chief Justice [Ag.]
The Hon. Mr. Satrohan Singh Justice of Appeal
The Hon. Mr. Albert Redhead Justice of Appeal
CIVIL APP. NO.2 OF 1997
Mr. John Mowbray Q.C., Mr. J. Stephen Smith,
Mr. Paul Webster and Ms. Dawn Smith for the Appellants
Mr Alan Steinfield Q.C., Mr. Stephen Moverley Smith for the Respondents
Law of Succession/Trusts Law - Deceased died intestate, leaving behind a considerable fortune - Deceased married twice, producing 14 children - Trust deed signed by deceased, an unexecuted will, as well as an oral declaration of present gift purporting to give all his wealth to a Foundation established for charitable purposes - Whether this declaration was effective to make the Foundation the owner of shares and/or credit balances previously owned by deceased, and to subject them to the trusts of the trust deed - Whether the deceased had in effect declared himself a trustee of all his assets for the Foundation, rather than effect a transfer of his assets to the Foundation's trustees - Whether a gift inter vivos can be made of a person's 'wealth' - Making a gift vis-Ã -vis declaration of a trust - Richards v Delbridge [1847] 18 Eq.11, Milroy v Lord [1862] 21 De G.F. and J 264 applied - Rules governing the transfer and gift of shares - Milroy v Lord Turner; Re Rose [1949] 1 Ch. 78 applied - Holt v Heatherfield Trust [1942] 2 KB 1 distinguished - Whether a purported transfer/assignment by directors of the company, to the Foundation, of the shares and credit balances in the deceased's companies was effective in law - Whether such action was within the directors' powers - Interpretation of International Business Companies Ordinance, section 30[2] - Whether such power can be made to over-ride the provisions of a company's articles - Whether a written transfer is essential, or can effect be given to an oral transfer [as done in the present case] - Rules regarding assignment of a legal chose in action in equity by way of a voluntary gift - Re Westerton [1919] 1 Ch. 104 considered - Whether an oral agreement by the deceased to release the companies from their debts owed to him in consideration of their promising to pay the credit balances to the Foundation, meant that the defendant/appellant companies attorned to the Foundation - Israel v Douglas [1789] 1 H and I 239; In Griffin Weatherby [1868] LR 3 QB 753; Liversage v Broadbent [1859] 4 H and N No. 603; Shamia v Joory [1958] 1 QB 448 considered - Factors constituting evidence of attornment - Whether the appointment of an administrator was sufficient to give effect to the transfer of the shares and credit balances, and therefore release the companies from their debt - Strong v Bird [1874] LR 18 Eq. 315 distinguished - Re James [1935] Ch. 449 doubted - Re Stewart [1908] 2 Ch. 251 applied - Cross-appeal on the issue of whether the plaintiffs/respondents were rightly estopped by the trial judge from litigating in the B.V.I. questions surrounding the deceased's domicile and validity of his second marriage in Sierra Leone, and therefore, legitimacy of the children of that marriage - Jacobs v London County Council [1950] AC 361 referred to. Appeal dismissed. Cross-appeal allowed.
On 19 th March, l992 Thakurdas Choithram Pagarani [T.C.P] died at the age of about 78 years, intestate, possessed of huge assets.
T.C.P. was born in India. In 1930, he was married to the first named respondent according to Hindu rites. They had six daughters by that union.
The deceased left India in l939 and went to Sierra Leone where he met a Miss Virginia Harding with whom he formed a relationship. In 1944 he contracted a second form of marriage with Miss Harding according to local law and custom. There were eight children by that union.
Whilst in Sierra Leone, the deceased began a food Supermarket business which was very successful and eventually became a world wide chain by the time of his death.
After Sierra Leone obtained its Independence in 1967 T.C.P. became a national of Sierra Leone. Although apparently he never acquired a home there, he maintained a home in India to which he habitually returned.
From the 1970's when civil strife broke out in Seirra Leone, the deceased ceased to reside there permanently but instead paid periodic visits when in mid 1980's his visits ceased altogether.
During that period he spent most of his time in Dudai where he had considerable business interests.
As I have said above, at the time of the deceased's death he had amassed a great fortune which included:
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[a] His shares in holding companies into which he had transferred the share capital of most of the companies world wide in his Supermarket business,
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[b] The sum owed to him [i.e. the credit balances] on his various loan accounts with the companies and their subsidiaries,
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[c] His interest as a partner in a number of Dudai partnerships and limited liability companies through which the Supermarket businesses in the united Arab Emirates were carried out,
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[d] The land and dwelling house in India in which his wife and one of his daughters were living,
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[e] His interest in a number of companies incorporated in Spain, Bangkok Muscat.
T.C.P was of a profoundly charitable disposition. He founded hospitals and charities for poor relief in India and Sierra Leone.
The Learned Trial judge said at page 11 of his judgment:
"There can be no denying that the deceased throughout his life manifested profound charitable intentions and towards his later years having made generous provision for his first wife and each of his children, intended to leave most of the remainder of his wealth to charity, to the exclusion of his children. This he hoped to achieve by setting up a foundation to serve as an umbrella organization for those charities which had been already established and which will in due course be the vehicle to receive most of his assets when he died. This was from all accounts a longstanding intention of the deceased".
And as Mr. Mowbray argued:
"this was not something which suddenly sprang to the mind of the deceased, it began since l989".
To that end, T.C.P consulted London Solicitors, MacFarlenes, who in 1989 drafted and in 1990 finalised a Jersey trust deed with an original nominal £1,000 trust fund but contemplating additions.
In late 1991 the deceased fell ill and was diagnosed as suffering from lung cancer. In December l991, he went to London to seek Specialist advice and treatment.
On 17 th February, l992, the deceased, in an elaborate ceremony, in the presence of a number of the appellants and the Consular Attache from the Indian High Commission in London executed a trust deed in his bed at 5 Elmcroft Road,Golders Green establishing the Foundation. Over the next few days the intended trustees who were not present, at the time executed the deed.
Immediately after the deceased had executed the trust deed it is admitted, by all the parties, that he then and there orally declared words to the effect that now he had given "all his wealth to the Foundation". He then instructed Mr. Paramalingham [Param] the accountant to the Dubai Companies and partnerships to transfer to the said Foundation "all his wealth with the companies and their subsidiaries".
The learned trial judge in his judgment at page 7 wrote:
"it was about that time [December 1991] that he [TC.P] instructed a Mr. Lock, a partner from another firm of Solicitors to draw up a will for him which provided that the whole of his residuary estate, apart from the property in India, should go to the Foundation".
In an affidavit sworn to by Barry David Stewart Lock on 20 th day of May, l992. He deposed that on 10 th January, l992 he visited T.C.P at 5 Elmcroft Avenue,Gloders Green.
At paragraph 4 Mr. Lock deposed:
"The draft will which I had prepared for the deceased in accordance with the instructions indicated by his son Mr. Lekhraj Thakurdas Pagarani was drafted on the basis that the Choithram International Foundation already existed. I was informed by the deceased and his son that this was not the case but that the deceased was pressing ahead with the creation of the Foundation as swiftly as possible. I was handed a copy of the latest draft of the deed establishing the trust and I was asked to comment on it and the deceased was adamant that he wished his residuary estate to be applied for charitable purpose and particularly Choithram International Foundation. I explained that the will could not provide a residuary bequest to the Choithram International Foundation as that fund was not yet established, explained that it would probably be best to arrange a stop gap situation whereby the residuary estate was bequeathed for general charitable purpose and then the executors could pay over the residuary estate to the Trust; the Choithram International Foundation in fulfillment of the general charitable discretion. The deceased asked to revise the will on that basis and states that in the meantime he and his son would prepare the necessary assignments for assets to have transferred to the Choithram International Foundation". [my emphasis]
In his skeleton argument Mr. Mowbray Q.C. alluded to the fact that the firm of Clifford Chance also drew up a draft will. For T.C.P...
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