Allenger, Shiona (trustee-in-bankruptcy of the estate of Pelletier, Richard Paul Joseph) v Pelletier, Olga and another

• Judge: Andrew Ang SJ
• Judgment Date: 22 December 2020
• Neutral Citation: [2020] SGHC 279
• Citation: [2020] SGHC 279
• Court: High Court (Singapore)
• Published date: 25 December 2020
• Docket Number: Suit No 50 of 2020 (SUM No 2270 of 2020)
• Plaintiff Counsel: Ong Tun Wei Danny, Bethel Chan Ruiyi, Yam Wern Jhien and Chen Lixin (Rajah & Tann LLP)
• Defendant Counsel: Probin Stephan Dass, Liew Zhi Hao and Yong Khung Mun, Aloysious (Shook Lin & Bok LLP), Harpreet Singh Nehal SC, Jordan Tan and Victor Leong (Audent Chambers LLC) (instructed)
• Subject Matter: Civil Procedure,Jurisdiction,Inherent,Submission,Mareva injunctions,Pleadings
• Hearing Date: 09 September 2020,20 July 2020

Andrew Ang SJ: Introduction

The jurisdiction of the court refers to “its authority, however derived, to hear and determine a dispute that is brought before it”: Re Nalpon Zero Geraldo Mario [2013] 3 SLR 258 (“Nalpon Zero”). In this case, the Defendants challenge both aspects of that fundamental authority: subject-matter jurisdiction and in personam jurisdiction. The dispute thus presents an occasion to clarify the contours of the two notions of subject-matter jurisdiction and in personam jurisdiction, as well as the interface between these two doctrines. This case also presents an apposite occasion in Singapore jurisprudence to consider the law on Mareva injunctions, specifically the jurisdictional requirements that must be satisfied before such injunctions may be granted.

Background facts

The Plaintiff is the trustee-in-bankruptcy of the estate of Mr Richard Paul Joseph Pelletier (“Mr Pelletier”). The first Defendant, Ms Olga Pelletier, is the wife of Mr Pelletier and the director of the second defendant, PDP Holdings Inc, a company incorporated in the Cayman Islands. At all material times, Mr Pelletier was and continues to be the sole shareholder of Richard Pelletier Holdings Inc (“RPHI”), a company incorporated in Alberta, Canada.

In 2014, pursuant to a share purchase agreement (“SPA”), MasTec Inc (“MasTec”), a company incorporated in Florida, acquired a Canadian company, Pacer Construction Holdings Corporation (“Pacer”), and its related entities from Mr Pelletier, RPHI and various other sellers (“Other Sellers”). It was alleged that Mr Pelletier was the founder and former CEO of Pacer, and also that RPHI owned 47.09% of the shares in Pacer at the time the SPA was entered into, the remaining shares being owned by the Other Sellers. MasTec paid RPHI C$59,296,699.23 for its shares in Pacer.

After completion of the sale of Pacer to MasTec, it became apparent that Mr Pelletier had falsely represented the financial condition of Pacer and its related entities and that the purchase price for Pacer would have to be adjusted downwards substantially from what was provided for in the SPA. In addition, there was a breach of a representation in the SPA made jointly or severally by Mr Pelletier and RPHI, and severally (but not jointly) by the Other Sellers, that certain of Pacer’s related entities would not require or were not reasonably likely to require additional funding from Pacer to maintain their current or planned operations (the “No Additional Funding Representation”). This led to MasTec and Pacer commencing arbitral proceedings against Mr Pelletier RPHI and the Other Sellers in 2016.

In 2019, three arbitral awards were granted against Mr Pelletier, RPHI, and the Other Sellers. The first and principal award pertained to liability, while the second and third awards were for interest and costs respectively.

The joint and several liability of Mr Pelletier and RPHI under these awards amounted to C$76,833,744.50. The Other Sellers having paid the amounts they were severally liable for, Mr Pelletier and RPHI remained liable to Pacer in the amount of C$33,556,822.50. The amount remains outstanding, save for a small amount of C$4,037.40.

Pacer then sought to enforce the arbitral awards through multiple applications in various jurisdictions. An application against Mr Pelletier was taken out in the courts of the Cayman Islands (the “Cayman courts”) for recognition of the principal award. An application against Mr Pelletier and RPHI was also taken out in the courts of Alberta for recognition and enforcement of all three awards. Applications were also taken in Alberta to bankrupt RPHI and also in the US District Court for the Southern District of California.

The efforts to enforce the awards against Mr Pelletier have not been successful because Mr Pelletier claims that he has no assets and is unable to repay his debt despite having received approximately C$59 million, through RPHI, for the sale of Pacer. Specifically, Mr Pelletier claims to have gifted a sum of between C$20 million and C$25 million to the first Defendant to fulfil a promise he made to split the proceeds with her if he sold Pacer (the “Olga Transfer”). This promise was purportedly made a decade prior to the present events.

The Plaintiff also alleges, based on its own investigations, that Mr Pelletier had subsequently engaged in further suspicious activities. It is alleged that in 2014, Mr Pelletier had incorporated PDP Corporation in the Cayman Islands, with himself as the sole shareholder and director. He also established a trust, STAR Trust, with Butterfield Bank (Cayman) Limited (“Butterfield Bank”) as the original trustee. Mr Pelletier then transferred US$4 million to PDP Corporation. Once this was done, Mr Pelletier then transferred his shares in PDP Corporation to Butterfield Bank. It is claimed that PDP Corporation had utilised the US$4 million to purchase a condominium in Grand Cayman.

That was not the end of it. It is further alleged that Mr Pelletier had then incorporated the second Defendant in the Cayman Islands in August 2015, again with himself as the sole shareholder and director. In a single month, in September 2015, Mr Pelletier then made a series of transfers from bank accounts in his name in Butterfield Bank to bank accounts held by the second Defendant (also with Butterfield Bank). These transfers totalled approximately US$15 million and included: C$12,798,522.71 transferred on 1 September 2015; US$4,735,074.03 transferred on 1 September 2015; US$264,925.97 transferred on 11 September 2015; and C$1,201,477.29 transferred on 15 September 2015.

The Olga Transfer, the transfers to PDP Corporation, and the transfers to the second Defendant (collectively, save for the transfer set out in [10(b)], the “Disputed Transfers”) were made in circumstances where Mr Pelletier admits he had dissipated the proceeds from the sale of Pacer.

In August 2019, Pacer applied to the clerk of the Cayman courts to issue a bankruptcy notice against Mr Pelletier. This notice was issued, allowing Pacer to subsequently commence bankruptcy proceedings. In November 2019, the Grand Court of the Cayman Islands granted an interim bankruptcy order against Mr Pelletier. This order was made absolute in March 2020.

The Plaintiff, as the trustee-in-bankruptcy of the estate of Mr Pelletier, then commenced proceedings in the Cayman court in January 2020, seeking to set aside the Disputed Transfers that Mr Pelletier had made. The proceedings were made pursuant to s 107(1) of the Cayman Bankruptcy Law. On 8 January 2020, the Plaintiff also obtained a worldwide Mareva injunction against the Defendants, as well as against three other related entities (the “Cayman worldwide injunction”). On 13 January 2020, the Cayman worldwide injunction was amended, allowing the Plaintiff to seek a similar order in Singapore.

On 14 January 2020, the Plaintiff then commenced the present Suit by filing a writ of summons. That writ was accompanied by three ex parte applications, namely: HC/SUM 212/2020, by which the Plaintiff sought an order for leave to serve the cause papers in the Suit on the Defendants out of jurisdiction and for the requirement for two prior attempts at personal service to be dispensed with (the “Leave Application”); HC/SUM 213/2020, by which the Plaintiff sought a stay of all proceedings in the Suit save for (c) below (the “Stay Application”); HC/SUM 203/2020, by which the Plaintiff sought a Mareva injunction in Singapore (the “Singapore Injunction”) against the Defendants to prohibit them from removing from Singapore assets up to the value of CAN$20m (for the first Defendant) and CAN$20,586,000 (for the second Defendant). Those assets included two Singapore bank accounts with LGT Singapore and Global Precious Metals (the “LGT Account” and “GPM Account” respectively).

I heard the ex parte applications on 16 January 2020 and granted all three applications. The orders of court and cause papers were thereafter served on the Defendants, and the first Defendant filed her first affidavit on 6 February 2020 in compliance with the disclosure requirements of the Singapore Injunction.

On 21 February 2020, the Defendants filed HC/SUM 884/2020 seeking clarification of the Singapore Injunction (the “Clarification Application”). In the Defendants’ view, this was necessitated by certain events, which I will elaborate upon further at [98]. I heard the Clarification Application on 20 April 2020 and dismissed it.

On 29 April 2020, the Defendants then filed HC/SUM 1859/2020, seeking leave to appeal against my decision in the Clarification Application (the “Leave to Appeal Application”). On 20 May 2020, the Plaintiff filed HC/SUM 2041/2020, seeking an order that the first Defendant, amongst other things, immediately transfer the sums which had been transferred to Priestleys, the Defendants’ Cayman lawyers, back to Singapore for the same to be paid into court (the “Application to Restore Funds”). I heard the Application to Restore Funds on 19 June 2020, where the parties agreed to the following: that the Defendants were to provide the Plaintiff with evidence of payments made from the GPM account since the Singapore Injunction was served on 23 January 2020; that the funds paid from the GPM Account, which had been repatriated to the client account of Shook Lin & Bok LLP (“Shook Lin & Bok”), be subjected to the Singapore Injunction; and that the Defendants would not deal with the funds mentioned above without the Plaintiff’s written agreement or an Order of Court until the discharge of variation of the Singapore Injunction.

In the proceedings referred to in [16] and [17] above, the Defendants were represented by Shook Lin & Bok.

The present application was filed on 9 June 2020. Under this application, in which Mr Harpreet Singh SC and Mr Jordan Tan appeared as instructed counsel, the Defendants seek the...