Srilal Perera trusted his sister and brother-in-law to look after his property when he left for Australia. In his 24 year absence, they mismanaged rental income, misappropriated funds raised on security of the Wellington rental property while attempting unsuccessfully to transfer title into their own names and raised a loan on Srilal’s life policy without his authority.
Avninderpal Singh and Chamali Supriya Singh were ordered to pay over $600,000 for their breach of fiduciary duty. The High Court was told Mr Perera left for Melbourne in 1991. He left the Singhs in charge of his New Zealand assets: they were to receive eight per cent of the gross revenue on letting his home in the Wellington suburb of Northland; six per cent on the gross for managing his then partner’s separate Wellington property. They were also to keep up monthly payments on his life policy.
Mr Perera learnt nearly a decade later that the Singhs had pooled together revenue from both properties, using his cash to pay interest on his then partner’s more heavily mortgaged property. The Singhs promised to make good the difference. By then, Mr Perera and his partner were estranged. He signed a power of attorney in favour of Mr Singh, on the understanding this would assist the Singhs in handling his New Zealand affairs. Evidence was given that the Singhs attempted to sell the rental without Mr Perera’s knowledge. This was inadvertently thwarted by Mr Perera’s former partner lodging a caveat against the title as part of a relationship property dispute. Evidence was also given of Mr Singh borrowing against the rental and transferring funds into accounts he controlled. A loan raised against Mr Perera’s life policy also went into accounts controlled by Mr Singh. Claims these transfers were made with Mr Perera’s authority were dismissed by Justice Cull. Mr Singh resisted attempts to get access to bank records, producing some bank records with compromising transactions deleted. Mr Singh was either dishonest, or inept, Justice Cull said. Either way, he was in breach of his duty to properly account for use of Mr Perera’s assets.
The Singhs were jointly held in breach of good faith in respect of their obligations to manage Mr Perera’s property and to account for the proceeds. Mr Singh was in breach of his duties to act in good faith when using the power of attorney. The two were ordered to pay Mr Perera $604,500 damages with further damages yet to be assessed in respect of an unauthorised $19,900 loan taken on Mr Perera’s life policy.
Perera v. Singh – High Court (6.09.19)
19.161