Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and others

• Jurisdiction: Singapore
• Judge: Quentin Loh JAD
• Judgment Date: 27 December 2021
• Neutral Citation: [2021] SGHC(I) 19
• Court: International Commercial Court (Singapore)
• Docket Number: Suit No 3 of 2018 (Summons No 25 of 2021)
• Year: 2021
• Published date: 06 January 2022
• Hearing Date: 23 September 2021,24 September 2021
• Plaintiff Counsel: Woo Shu Yan, Tay Hong Zhi Gerald and Lim Qiu Yi Regina (Drew & Napier LLC)
• Defendant Counsel: Chong Pao Lan Monica, Vithiya d/o Rajendra, Wong Zheng Hui Daryl, Wang Yufei and Daryl Kwok Wai Tat (Guo Weide) (WongPartnership LLP)
• Subject Matter: Equity,Remedies,Account
• Citation: [2021] SGHC(I) 19

Quentin Loh JAD, Carolyn Berger IJ and Dominique Hascher IJ: Introduction

SIC/SUM 25/2021 (“SUM 25”) is the final tranche of the dispute between the parties over the rights to the inventions and patents of the compound, “Ethocyn” (“the Ethocyn Rights”), and the income or proceeds generated therefrom (collectively, “the Trust Assets”), and the moneys paid by Nu Skin International Inc (“Nu Skin”) to the first defendant, BCS Business Consulting Services Pte Ltd (“BCS”) (“the Trust Moneys”). In Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and others [2020] 4 SLR 85 (“the Judgment”), we had found, inter alia, that BCS and/or the third defendant, Renslade Holdings Limited (“Renslade (HK)”), held the Trust Assets and/or Trust Moneys and/or any other income or proceeds generated from the Trust Assets on trust for the plaintiff, Michael Baker (“Baker”), as executor of the estate of Chantal Burnison (“Chantal” or “the Estate”, as the case may be). Accordingly, we ordered BCS, Marcus Weber (“Weber”) and Renslade (HK) (collectively, “the Defendants”) to provide a detailed account of all transactions that had taken place in respect of the Trust Assets and/or Trust Moneys, and granted an order that the Defendants pay to the plaintiff all the sums due to the plaintiff on the taking of the account.

After several rounds of correspondence, Baker remained dissatisfied with the account that the Defendants had provided. SUM 25 is Baker’s application for the Defendants to pay (a) US$10,313,895.25 and CHF1,662,894.67, being the amount that Baker claims is due to the Estate on the taking of the account of the Trust Assets and Trust Moneys; and (b) interest on the Trust Assets and Trust Moneys at the rate of 5.33% per annum from 30 October 2017 until the date when the Trust Assets and Trust Moneys are fully paid and returned to him.

Facts

The detailed facts concerning this dispute can be found in the Judgment. For present purposes, we summarise the dispute between the parties and the decision of this court as found in the Judgment, which provides the context for the analysis below.

The parties

Chantal was the co-inventor of Ethocyn. The Ethocyn Rights were initially assigned to California-incorporated companies controlled by Chantal (“the Chantal Companies”). The Chantal Companies entered bankruptcy proceedings in February 1999, and the Ethocyn Rights, among other assets, were sold to a New Zealand company (“Renslade (NZ)”) before being transferred to a Singapore company (“Renslade (S)”), and finally to BCS.

In June 2003, the Defendants entered into an agreement with Nu Skin to supply Ethocyn (the “Nu Skin SDA”). These payments formed the bulk of moneys generated from the Ethocyn Rights, which we referred to earlier as the “Trust Moneys”. Sometime in or around 2007, the bulk of Trust Moneys were transferred from BCS to Renslade (HK). In or around 2014, Weber also withdrew a sum of CHF9.5m from the Trust Moneys. After Chantal passed away on 2 October 2016, Baker became the executor of the Estate. He sought to have the assets of the trust and Trust Moneys transferred to the Estate. When this was not done, Baker commenced the present suit (“the Suit”) in Singapore.

Background to the dispute and this court’s judgment

The central issue in dispute in the Suit was the beneficial ownership of the Trust Assets and the Trust Moneys. Baker claimed that Chantal remained the beneficial owner of the Ethocyn Rights. She had entered into an agreement with Weber (“the Trust Agreement”) for Weber to acquire the Ethocyn Rights from Renslade (NZ) and to hold any income or proceeds generated from the Ethocyn Rights on trust for her (we refer to this trust as “the Trust”). Under this Trust Agreement, the Defendants were entitled to retain only 5% of the proceeds generated. Further, although Chantal had agreed to loan Weber CHF6m, Weber then took the CHF9.5m from the Trust Moneys without her knowledge or consent. Baker therefore sought the return of the Trust Assets and Trust Moneys, as well as a return of the CHF9.5m taken by Weber.

After a trial of the matter, we issued our Judgment on 29 April 2020, in which we held as follows: There was a Trust Agreement between Chantal and Weber. Renslade (NZ) had held the Ethocyn Rights on trust for Chantal. When the Rights were transferred to Renslade (S), Chantal remained the beneficial owner of those Rights. This remained the case when the Ethocyn Rights were assigned or transferred to BCS. Therefore, Chantal had always been the beneficial owner of the Ethocyn Rights, the Trust Moneys and the Trust Assets (see the Judgment at [187]–[188]). Weber had withdrawn CHF9.5m from the profits made under the Nu Skin SDA without Chantal’s knowledge or consent, and had not repaid that amount or rendered an account of any interest as of the date of the Judgment (see the Judgment at [199]). The Trust Agreement was governed by Singapore law (see the Judgment at [214]). Under Singapore law, there was an express trust (at [226]) and, in any event, a resulting trust would also arise on the facts (at [230]). In the alternative, if the Trust Agreement were governed by California law, a trust would also have arisen (at [240]). We rejected the claim that the trust was unenforceable for illegality, finding that the Trust Agreement was enforceable under both Singapore (at [258]–[269]) and California law (at [298]). As the Trust Agreement was valid and enforceable, the Defendants had breached their fiduciary duty to Chantal by failing to provide an account of the Trust and the Trust Moneys; the Defendants had breached the Trust Agreement by unilaterally increasing the commission from 5% to 10% from 2016 to 2017 without Chantal’s knowledge and consent; Weber had breached his fiduciary duty to Chantal by failing to procure BCS or Renslade (HK) to return the Trust Assets, and also breached his contractual obligation vis-à-vis Chantal to return CHF9.5m with 3% annual interest; and by claiming legal and beneficial ownership over the Trust Assets and Trust Moneys, the Defendants had conspired with the intention of injuring Chantal and/or the Estate (see the Judgment at [299]).

We therefore made orders pertaining to the relief sought by the plaintiff. The parties have since extracted the order of court in SIC/JUD 5/2020 (“the Order”), and we reproduce the relevant portions here: 1. it is hereby declared that [BCS] and/or [Renslade (HK)] hold the intellectual property rights to the inventions and the patents of Ethocyn (‘the Ethocyn Rights’) and 95% of any income or proceeds generated from the Ethocyn Rights (‘the Trust Assets’) including 95% of the monies which were paid by Nu Skin International Inc to [BCS] and any other income or proceeds generated from the Trust Assets on trust for the Plaintiff (‘the Trust Assets and Trust Monies’); 2. the Defendants are to provide a detailed account of all the transactions which have taken place in respect of the Trust Assets and Trust Monies within 14 days from the date of judgment; [we refer to this as the “Account Order”] 3. the Defendants are to account to the Plaintiff the Trust Assets and Trust Monies, and the Plaintiff is at liberty to trace and recover the Trust Assets and Trust Monies, if necessary. The Defendants shall pay the Plaintiff all sums due to the Plaintiff on the taking of the account of the Trust Assets and Trust Monies; [we refer to this as the “Payment Order”]

…

5. [Weber] is to pay to the Plaintiff CHF9.5 million plus interest at the rate of 3% per annum calculated from the date the sum of CHF9.5 million was loaned to [Weber] to the date of judgment and the post judgment interest rate of 5.33% calculated from after the date of judgment until the said sum of CHF9.5 million plus interest is repaid; [we refer to this as the “Loan Repayment Order”] 6. the sum of US$10,330,658.91 which was paid by [Renslade (HK)] into Court pursuant to the Order of Court No. 2 of 2020 dated 11 January 2020, shall be released to the Plaintiff, Michael Alan Baker, and/or his solicitors, Drew & Napier LLC; [we refer to this as the “Release Order”] and 7. the Defendants are to pay the Plaintiffs the costs of the action. …

[emphasis in original omitted]

Subsequently, in CA/CA 76/2020, the Defendants appealed against our decision in the Judgment (“the Appeal”). On 19 January 2021, the Court of Appeal dismissed the Appeal in its entirety and affirmed the Judgment of this court.

Steps taken in the provision of the account

The parties’ correspondence over the Defendants’ provision of the account is extensive, and we summarise only the salient developments in the following timeline:¹

S/N	Date	Event
1.	13 October 2020	Defendants file an affidavit, Weber’s 19th Affidavit, to account for Trust Assets and Trust Moneys
2.	22 October 2020	Baker’s solicitors, Drew & Napier LLC (“D&N”), reply in a letter with objections to the account, requesting the Defendants file a further affidavit within three weeks to address the deficiencies. These deficiencies concerned the outgoings in the accounts in particular.
3.	29 December 2020	Defendants’ solicitors, WongPartnership LLP (“WongP”), write with further account for the period of 2000–2006
4.	19 January 2021	The Appeal is dismissed
5.	3 February 2021	D&N reiterates the deficiencies in the account in a letter to WongP
6.	16 February 2021	WongP replies addressing the deficiencies in part
7.	18 February 2021	D&N seeks a full response to the deficiencies highlighted in earlier correspondence concerning the outgoings
8.	23 February 2021	WongP replies addressing (according to Baker) only some of the issues with the outgoings raised in the 22 October 2020 letter. WongP claims to need until 23

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