B2C2 Ltd v Quoine Pte Ltd

• Court: International Commercial Court (Singapore)
• Judge: Simon Thorley IJ
• Judgment Date: 14 May 2019
• Neutral Citation: [2019] SGHC(I) 6
• Citation: [2019] SGHC(I) 6
• Docket Number: Suit No 7 of 2017
• Hearing Date: 18 April 2019,14 May 2019
• Plaintiff Counsel: Danny Ong, Sheila Ng and Jason Teo (Rajah & Tann Singapore LLP)
• Defendant Counsel: Paul Ong, Ivan Lim and Marrissa Karuna (Allen & Gledhill LLP)
• Subject Matter: Civil Procedure,Stay of proceedings,Contract,Remedies,Damages,Equity,Equitable compensation
• Published date: 25 May 2019

Simon Thorley IJ: Introduction

Judgment was given on 14 March 2019 in B2C2 Ltd v Quoine Pte Ltd [2019] SGHC(I) 03 (“the Judgment”) following the trial of this action. The action succeeded both in breach of contract and breach of trust but, for the reasons given in [254]–[257] of the Judgment, I held that the plaintiff (“B2C2”) was not entitled to an order for specific performance. Its remedy lay only in damages.

I invited the parties to liaise to seek to agree on an Order giving effect to the Judgment. This they were unable to do and travelling drafts were prepared indicating the areas of dispute.¹ Having reviewed these drafts, I directed the Registry to issue a letter on 8 April 2019 which stated:

Subject to anything the parties wish to submit to the contrary, the Court proposes first to deal with the following issues: 1. The Plaintiff’s entitlement to the order sought in paragraph 2 of its draft. (a) Is the Plaintiff entitled to any financial compensation by way of equitable relief in the form of an account in addition to damages at common law? (b) What would be the nature of that account? (c) If not, is the Plaintiff entitled to elect to receive any such equitable relief in lieu of damages at common law? (d) If so, what election would the Plaintiff make? 2. The grounds on which the order sought in paragraph 3 of its draft is justified. 3. Whether the order as to financial compensation should be in the form sought by the Plaintiff at paragraph 4 of its draft or by the Defendant in paragraph 2 of its draft? 4. Whether any assessment of costs should await the outcome of any appeal? 5. Whether any assessment of financial compensation should proceed or whether it should be stayed pending any appeal?

The Court considers that these matters are capable of being resolved on the basis of written submissions without the need for an oral hearing but will appoint an oral hearing if either party requests it.

Thereafter the parties provided written submissions and did not seek an oral hearing. This is therefore my decision on the Order.

Financial Compensation by way of Equitable Relief (Paragraph 2 of the Plaintiff’s draft)

The Plaintiff seeks, in addition to damages at common law for breach of contract, an account of the trust assets held on trust by the Defendant together with equitable compensation for loss suffered as a result of the breach of trust.

The first question is whether the Plaintiff is entitled to an account of the trust assets. This depends upon whether this is necessary in order to identify specific assets in respect of which there may be an entitlement to relief: see Libertarian Investments Ltd v Hall (2013) 16 HKCFAR 681 at [98]–[99]. In the present case there is no dispute as to what constituted the assets that were held on trust by the Defendant. They were the Bitcoin (“BTC”) which were wrongly the subject of the reversal of the Trades and which were re-credited to the Counterparties’ accounts on the Defendant’s instructions. There is thus no need for an account of the assets.

The second question is whether the Plaintiff is entitled to equitable loss-based financial compensation in addition to damages for breach of contract. The equitable financial relief that is usually sought is an account of the profits made by the Defendant as a result of its breach of trust. Damages at common law compensate the wronged party for the loss it has suffered whereas an account of profits serves to deprive the party in breach of the profits it has made as a result of the wrongful acts. One compensates for loss and the other ensures that the wrongdoer does not profit from its wrongdoing. The English Court of Appeal decision in Ausman Ramzan v Brookwide Ltd [2011] EWCA Civ 985 is illustrative of the point. In that case, there were two causes of action arising out of the same incident, one for trespass and the other for breach of trust. The Court held that the two did not provide cumulative remedies. They were alternative remedies, one of which measured the wrongdoer’s gain and the other, the wronged party’s loss: see also Quality Assurance Management Asia Pte Ltd v Zhang Qing and others [2013] 3 SLR 631.

The Plaintiff contends that the same does not apply where the equitable relief sought is compensation for its loss rather than being awarded the Defendant’s profits. I do not agree. As was made clear in the Judgment, the two causes of action were alternative routes to the same conclusion: that the defendant had acted wrongly in reversing the Trades. There was only one incident which gave rise to the two causes of action. In these circumstances it would be wrong to grant the wronged party two aspects of compensation.

The third question is whether the Plaintiff is entitled to elect for equitable rather than common law compensation for loss where the loss arises in circumstances where the equitable relief of specific performance has been refused. This is not a matter which has been fully addressed and should be the subject of pleadings and a further hearing in due...