Tarun Hotchand Chainani v Avinderpal Singh s/o Ranjit Singh and others

Tarun Hotchand Chainani and Avinderpal Singh s/o Ranjit Singh were the two directors of Avitar Enterprises Pte Ltd (the Company), whose holding company they owned equally. In the liability phase of Suit No 703 of 2020, reported as [2024] SGHC 117, the High Court ordered both companies wound up and ordered Mr Singh to render an account, on a wilful default basis, of the principal sums from the Company he used to acquire 20 real properties and certain shares, and of the profits made, and to pay all sums found due.

In the taking of the account, the Company's liquidators took an active role and Mr Chainani advanced no positive case. Mr Singh and the liquidators agreed a formula for computing profit (capital gain plus rental profit, plus returns on that profit) and narrowed their dispute in a Scott Schedule to specific items, leaving the arithmetic to be done once the court ruled. Mr Singh relied heavily on two ledgers of his account with the Company to say he had repaid sums, that he or named co-investors had put in part of the purchase money, and that payments he later made into the Company reduced what he owed.

1. Whether Mr Singh's director ledgers were admissible and what weight they carried
2. Whether Mr Singh proved that he had returned principal sums, or that he or others contributed part of the purchase price
3. Which disputed expenses and rental income items should be allowed in the profit computations, and who bears losses
4. Whether Mr Singh must account for all the shares and pay returns on sums due at Treasury Bill rates

The court admitted the ledgers as business records under s 32(1)(b)(iv) of the Evidence Act 1893 but gave them little weight: the entries did not bear out Mr Singh's story, some figures did not tally, and he did not call the accounting staff who prepared them. Applying Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and others [2023] 1 SLR 35, a trustee must explain and substantiate the nature and purpose of payments he claims.

Mr Singh failed to prove any repayment of principal. Nil ledger balances at year end reflected audit transfers of his debt to the holding company, not payment, and he produced no bank records. His later payments into the Company, which he had himself called loans to the Company, were outside the account and a matter for the liquidators. Where Company money was mixed in his accounts, the burden was on him to show which part was his, following Caltong (Australia) Pty Ltd v Tong Tien See Construction Pte Ltd [2002] 2 SLR(R) 94; he succeeded only where cheques or transfers from unmixed accounts proved it, as for some Spottiswoode and Cambodian payments. Claims that co-investors such as "Ram", "Aman" and "Kashminder" funded the Dubai purchases failed because the ledger entries did not mention them or the properties and none testified. His bare contributions did not make him a co-investor sharing profit.

On profit items, interest on term loans not taken for the property was disallowed, and unexplained repairs were cut. For periods without records, the court accepted his dates for when tenancies began but applied the liquidators' market estimates of rent, and allowed a proxy for housing loan interest before May 2010. It rejected an imputed rent for Parc Olympia and a late claim for property trader tax. Because profits belonged to the Company, so did losses, so the Evelyn Road loss and any losses on the unsold properties were the Company's.

On the shares, his own WhatsApp messages showed the 2015 sales were also of Company shares. On returns, he had accepted Treasury Bill rates as fair, and the approach matched what a prudent investor would have earned, as in Sim Poh Ping v Winsta Holding Pte Ltd and another and other appeals [2020] 1 SLR 1199.

The High Court determined each disputed item of the account and declared the principal sums due from Mr Singh to the Company for each property and S$232,101.16 for the shares. It ordered him to pay returns on the principal sums and profits at 1-year Treasury Bill rates, held that net losses on the Company's investments fall on the Company, and directed the parties to calculate the amounts due and prepare a draft order, with costs to be heard later.