Uncle ordered to pay damages in mega trust suit

It's one of the largest such cases here, involving assets of US$600m-US$800m

The High Court last week released judgment grounds that gave an insight into one of Australia's wealthiest families, the De La Sala family, which has a company registered in Singapore.

The case is notable for being one of the largest trust cases heard here, involving shares and assets worth between US$600 million (S$851 million) and US$800 million. At the heart of it are suits involving Mr Ernest Perez De La Sala, 83, a businessman and investor.

In his 351-page judgment grounds, Justice Quentin Loh said the De La Salas were fortunate Mr Ernest was there to take over the family business when his father died in 1967.

But after a rift in 2011, he removed companies' funds, claiming they belonged to him. It sparked a four-year legal battle involving suits and countersuits, pitting uncle against nephew and niece.

The family's wealth was initially amassed by patriarch Robert Perez De La Sala, who started the business in Hong Kong in 1939. He died when he was 59, leaving behind his wife Camila and their four currently surviving children.

His second son Ernest succeeded him and managed the business.

Madam Camila and her four children had shares inthe patriarch's then main company, Northern Enterprises Limited.

The family later consolidated their wealth in six companies, one of which was registered in Singapore.

The companies were run by Mr Ernest's nephew Edward, his niece Christin and her husband James Copinger-Symes, and himself. They were listed as directors.

After Mr Ernest removed the funds in 2011, the companies, represented by Senior Counsel Thio Shen Yi, sued him in the High Court in 2012 to recover the funds.

Mr Ernest, defended by Senior Counsel Harpreet Singh, countersued his nephew and niece as well as her husband.

He accused them of breaching their fiduciary duties in suing him, as they had prevented him from dealing with his money.

He said it was his money because he had bought out the shares and interests owned by other family members, including his siblings.

He said he set up the companies - in which his nephew, his niece and her husband were directors - and other corporate structures as "pockets" to hold his assets.

Justice Loh rejected his claims based on the evidence and dismissed Mr Ernest's counterclaim against the three directors, who were defended by Senior Counsel Cavinder Bull.

The judge said Mr Ernest holds part of those assets on trust for the other family members.

Mr Ernest was ordered to pay damages, to be assessed later, for fraudulent misrepresentation.

The judge also ordered Mr Ernest to provide an account of how he dealt with the money and how much belongs to his brother Bobby, 81, less any funds that had been paid out earlier.

His brother also holds a one-third share of whatever sum their late mother would have received as part of her share in the family assets. Mr Ernest had to account for that too.

His other two siblings - Isabel, 73, and Tony, 85 - had no interest as they had sold their shares earlier to Mr Ernest, noted the judge.

Justice Loh, in observing Mr Ernest's witness testify, also advised against witness coaching, making clear the credibility of the witness would suffer as a result.

A version of this article appeared in the print edition of The Straits Times on February 01, 2017, with the headline 'Uncle ordered to pay damages in mega trust suit'. Subscribe