Gurbani & Co LLC v Paulus Tannos and others

Gurbani & Co LLC, a Singapore law practice, acted from 2012 for its former client Mr Paulus Tannos, his family and associated companies. On 22 September 2020 it obtained judgment in default against him for unpaid costs of $578,276.48 plus interest and costs, which remained unpaid. Until February 2018 its bills had been paid from accounts of Mr Tannos, his ex-wife Ms Lina Rawung, or Noble Prime Investments Limited, a British Virgin Islands company. The couple had divorced on 19 January 2012 but continued to live together.

In Suit No 734 of 2021 the firm sought to reach assets held by Ms Rawung and Noble. It alleged that the divorce was a sham to evade creditors and that Mr Tannos controlled and used their assets as his own. The defendants said Noble was beneficially owned by Mr Tannos' brother, Mr Jusak, and that payments of the firm's bills were loans. By closing submissions the firm narrowed its claim to declarations that Mr Tannos was the true and beneficial owner of a Scotts Road property held in Ms Rawung's name and an Oxley Walk property held in Noble's name, on the basis that each acted as his nominee or agent. It expressly did not rely on a trust or on piercing Noble's corporate veil. At the start of trial the court also refused Mr Tannos' late application to stop the firm's managing director acting as counsel while also giving evidence, finding the application more tactical than genuine.

1. Whether Noble acquired the Oxley Walk property as nominee or agent for Mr Tannos
2. Whether Ms Rawung acquired the Scotts Road property as nominee or agent for Mr Tannos
3. When adverse inferences may be drawn in an ordinary civil claim for failure to disclose documents

Relying on Prest v Petrodel Resources Ltd [2013] 2 AC 415, the court treated the claim as one in agency: the firm had to prove that each defendant acquired the specific property as Mr Tannos' agent. Control or ownership of the alleged agent is relevant but not conclusive; the circumstances and funding of the purchase also matter.

The court held that matrimonial cases, where adverse inferences may be drawn without a discovery order, did not apply. In an ordinary civil claim an inference requires evidence that should have been produced and was not, and some evidence on the point. Because Noble's disclosure of its shareholding history in breach of a production order was woefully deficient, the court inferred that Mr Tannos was its ultimate beneficial owner, and his dealings showed he had some control over it. But ownership of a company is not ownership of its assets, and there was no evidence at all about who directed or paid for the Oxley Walk purchase.

As to Ms Rawung, the court declined to find the divorce a sham. It did find that the two had spent each other's money without records after the divorce, disbelieving both their accounts. Mixed finances were not enough, however. The Scotts Road purchase was partly financed by a loan from Noble secured by a mortgage, a structure inconsistent with Mr Tannos being the real owner, and her deferring to him on business paperwork did not show he directed the purchase. No adverse inference was drawn against her because she was never asked to disclose purchase documents.

The court observed that the firm had pitched its case too broadly, defined it only at closing, and led generic evidence, which also limited the inferences available.

Wong Li Kok, Alex J dismissed the firm's claims entirely and said he would hear the parties on costs.