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

JurisdictionSingapore
CourtInternational Commercial Court (Singapore)
JudgeQuentin Loh J,Carolyn Berger IJ,Dominique Hascher IJ
Judgment Date29 April 2020
Neutral Citation[2020] SGHC(I) 10
Citation[2020] SGHC(I) 10
Defendant CounselAlvin Yeo SC, Monica Chong, Vithiya Rajendra, Nurul Ayu Fajarani and Daryl Wong (WongPartnership LLP)
Date29 April 2020
Plaintiff CounselCavinder Bull SC, Woo Shu Yan, Gerald Tay, Regina Lim and Sun Fangda (Drew & Napier LLC)
Published date05 May 2020
Docket NumberSuit No 3 of 2018
Hearing Date12 November 2019,16 November 2019,14 November 2019,06 February 2020,03 February 2020,11 November 2019,15 November 2019,13 November 2019

[2020] SGHC(I) 10

Singapore International Commercial Court

Quentin Loh J, Carolyn Berger IJ and Dominique Hascher IJ

Suit No 3 of 2018

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

Cavinder Bull SC, Woo Shu Yan, Gerald Tay, Regina LimandSun Fangda (Drew & Napier LLC) for the plaintiff;

Alvin Yeo SC, Monica Chong, Vithiya Rajendra, Nurul Ayu FajaraniandDaryl Wong (WongPartnership LLP) for the defendants.

Case(s) referred to

BCBC Singapore Pte Ltd v PT Bayan Resources TBK [2016] 4 SLR 1 (refd)

Compania De Navegacion Palomar, SA v Ernest Ferdinand Perez De La Sala [2017] SGHC 14 (refd)

Fahrney v Wilson 180 Cal App 2d 694 (Cal Ct App, 1960); 4 Cal Rptr 670 (refd)

Goodrich v Briones; Re Schwarzkopf 626 F 3d 1032 (9th Cir, 2010) (folld)

Guy Neale v Nine Squares Pty Ltd [2015] 1 SLR 1097 (folld)

Hansen v Bear Film Co 28 Cal 2d 154 (Cal Sup Ct, 1946) (refd)

Lau Siew Kim v Yeo Guan Chye Terence [2008] 2 SLR(R) 108; [2008] 2 SLR 108 (folld)

Lena Leowardi v Yeap Cheen Soo [2015] 1 SLR 581 (folld)

Lim Eng Hock Peter v Lin Jian Wei [2009] 2 SLR(R) 1004; [2009] 2 SLR 1004 (refd)

Met-L-Wood Corp, Re 861 F 2d 1012 (7th Cir, 1988) (folld)

Nelson v Nelson (1995) 184 CLR 538 (refd)

Ochroid Trading Ltd v Chua Siok Lui [2018] 1 SLR 363 (folld)

Pacific Recreation Pte Ltd v S Y Technology Inc [2008] 2 SLR(R) 491; [2008] 2 SLR 491 (refd)

Rappo, Tania v Accent Delight International Ltd [2017] 2 SLR 265 (folld)

Relfo Ltd v Bhimji Velji Jadva Varsani [2008] 4 SLR(R) 657; [2008] 4 SLR 657 (refd)

Roussos, Re 541 BR 721 (Bankr C D Cal, 2015) (refd)

Tan Juay Pah v Kimly Construction Pte Ltd [2012] 2 SLR 549 (refd)

Tay Yok Swee v United Overseas Bank Ltd [1994] 2 SLR(R) 36; [1994] 2 SLR 217 (refd)

Ting Siew May v Boon Lay Choo [2014] 3 SLR 609 (folld)

Tinsley v Milligan [1994] 1 AC 340 (refd)

Thio Keng Poon v Thio Syn Pyn [2010] 3 SLR 143 (refd)

Torrez, Re 827 F 2d 1299 (9th Cir, 1987) (folld)

Trisuryo Garuda Nusa Pte Ltd v SKP Pradiksi (North) Sdn Bhd [2017] 2 SLR 814 (folld)

Legislation referred to

Moneylenders Act (Cap 188, 1985 Rev Ed)

Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 35 r 4(3), O 110 r 3(1)

California Civil Code (US) § 2223, § 2224

California Probate Code (US) § 15201–15203, § 15205, § 15207, § 15304, § 15400

Crimes and Criminal Procedure 18 USC (US) § 152, § 157

Securities and Exchange Commission 17 CFR (US) § 240.10b-5

Securities Exchange Act of 1934 15 USC (US) § 78j(b), § 78t(a)

Civil Procedure — No case to answer — Burden of proof when electing not to give evidence and submission of no case to answer

Trusts — Enforceability — Whether trust illegal or tainted by illegality under California and Singapore law

Trusts — Express trusts — Resulting trusts — Formation — Whether trust validly formed under Singapore or California Law — Nature of trust

Facts
Background

The plaintiff was the executor of the estate of Chantal Burnison (“Chantal”), who was based in Los Angeles and passed away on 2 October 2016 in Los Angeles. Chantal was the co-inventor of a compound called “Ethocyn”, a skin product said to make the skin look younger and better toned.

The rights to the inventions and patents of Ethocyn (“the Ethocyn Rights”) were assigned to California-incorporated companies that were controlled by Chantal sometime prior to May 1982 (“the Chantal Companies”). In February 1999, the Chantal Companies entered into bankruptcy proceedings in the United States (“the Bankruptcy Proceedings”). The companies' assets, including the Ethocyn Rights, were sold to a New Zealand corporation, Renslade Holdings Limited (“Renslade (NZ)”) with the approval of the US Bankruptcy Court in October 1999.

Subsequently, the Ethocyn Rights were transferred from Renslade (NZ) to Renslade Singapore Pte Ltd (“Renslade (S)”) and then, in 2002, to the first defendant, BCS Business Consulting Services Pte Ltd (“BCS”). Renslade (S) and BCS were Singapore-incorporated companies. The third defendant was a Hong Kong incorporated company, Renslade Holdings Limited (“Renslade (HK)”). The second defendant, Marcus Weber (“Weber”), was a Swiss national and a Singapore permanent resident. Weber controlled Renslade (S), BCS and Renslade (HK), and was therefore indirectly the legal owner of the Ethocyn Rights. Renslade (HK), BCS and Weber, collectively, were “the Defendants”.

In June 2003, the Defendants entered into a supply and distribution agreement with Nu Skin International Inc (“Nu Skin”) where BCS agreed to supply Ethocyn to Nu Skin for its use and distribution (“Nu Skin SDA”). The payments made by Nu Skin to BCS formed the bulk of the proceeds generated from the Ethocyn Rights (“the Trust Moneys”). In or around 2007, the bulk of the Trust Moneys were transferred from BCS to Renslade (HK). In or around 2014, Weber withdrew a sum of CHF9.5m from the Trust Moneys.

The dispute

The plaintiff claimed Chantal was the beneficial owner of the Ethocyn Rights. Chantal had instructed a lawyer to use Renslade (NZ) to purchase the Ethocyn Rights on her behalf from the Chantal Companies during the Bankruptcy Proceedings. In or around November 1999, Chantal wished to relocate her place of business to Singapore. She entered into an agreement with Weber (“the Trust Agreement”), for Weber to acquire the Ethocyn Rights from Renslade (NZ) and hold any income or proceeds generated from the Ethocyn Rights on trust for her (“the Trust Assets”). Under the Trust Agreement, the Defendants were entitled to retain 5% of the proceeds generated from the Ethocyn Rights.

In support of the plaintiff's case, he alleged that Chantal provided the funds for the purchase of the Ethocyn Rights from the Chantal Companies, directed the transfer of the Ethocyn Rights from Renslade (S) to BCS, and fronted the negotiations with Nu Skin. When she was diagnosed with metastic colon cancer in September 2015, Chantal, together with her daughter, Heika Burnison (“Heika”), sought an account of the Trust Moneys and the Ethocyn Rights. Chantal passed away without an account being rendered by Weber. The plaintiff brought the current suit in the light of the Defendants' failure to account for the same.

The Defendants on the other hand denied there was any kind of agreement between Chantal and Weber. The Defendants' case was that Chantal wished to sell the Ethocyn Rights held by Renslade (NZ), Weber saw a good business opportunity and agreed to purchase the Ethocyn Rights from Chantal for his own benefit through Renslade (S). Weber had all along been the legal and beneficial owner of the Ethocyn Rights. Weber denied the existence of the Trust Agreement and asserted that the Defendants did not hold the Ethocyn Rights and Trust Moneys on trust for Chantal. Chantal worked for Renslade (S) as a consultant and assisted the Defendants with the exploitation of the Ethocyn Rights. The defendants also pleaded that on the plaintiff's own case, the Trust Agreement was void for illegality as she had hidden her ownership of Renslade (NZ) from the US Bankruptcy Court.

As for the CHF9.5m that Weber withdrew from the Trust Moneys, the plaintiff claimed that Chantal had agreed to loan Weber CHF6m for a period of three years with interest at 3% per annum. Weber, however, without Chantal's knowledge or consent, took CHF9.5m from the Trust Moneys. The Defendants denied any loan and alleged that the sum of CHF9.5m belonged to Weber and he used it to invest in bonds on behalf of Renslade (S).

At the trial, at the close of the plaintiff's case, the Defendants elected not to call any evidence and made a submission of no case to answer.

Held, allowing the plaintiff's claim:

(1) As the Defendants elected not to call evidence at the trial, the test was whether the plaintiff's evidence at face value established no case in law or whether the evidence led by the plaintiff was so unsatisfactory or unreliable that its burden of proof had not been discharged. In assessing whether the plaintiff had established a prima facie case, any evidence led by the plaintiff was assumed to be true unless it was inherently incredible or outside of common sense: at [67] to [69].

(2) The court found that the plaintiff had established, at least on a prima facie basis, the existence of the Trust Agreement. The evidence throughout each stage of the development of the Ethocyn business, to the date of Chantal's death, pointed to the same conclusion that Chantal had always been the beneficial owner of the Ethocyn Rights, the Trust Assets and the Trust Moneys. Weber had always been working for Chantal as her trustee and was obliged to account to her in relation to the Trust Moneys and Trust Assets: at [187] and [188].

(3) The court found that Weber unilaterally increased the commission due to him as a trustee under the Trust Agreement from 5% to 10% from 2016 to 2017 without Chantal's knowledge and consent. In addition, Weber had asked Chantal for a loan of CHF6m for a period of three years, with interest at 3% per annum to invest in a ski resort. Chantal had acceded to Weber's request. Weber however, without Chantal's knowledge or consent, took CHF9.5m from the Trust Moneys: at [190] and [194] to [199].

(4) The law of the forum supplied the choice of law rules to determine the substantive law to apply to resolve the dispute between the parties. Hence, Singapore's choice of law rules determined whether Singapore law or California law applied to the validity and enforceability of the Trust Agreement. The proper law of an express trust was the law chosen by the trustee or, in the absence of such...

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3 cases
  • Baker, Michael A v BCS Business Consulting Services Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 19 November 2021
    ...Case(s) referred to Airbus Industrie GIE v Patel [1999] 1 AC 119 (refd) Baker, Michael A v BCS Business Consulting Services Pte Ltd [2020] 4 SLR 85 (refd) Beckkett Pte Ltd v Deutsche Bank AG [2011] 1 SLR 524, HC (refd) Beckkett Pte Ltd v Deutsche Bank AG [2011] 2 SLR 96, CA (folld) Crescend......
  • Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and others
    • Singapore
    • International Commercial Court (Singapore)
    • 27 December 2021
    ...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 Asset......
  • Chen Mingxing and others v Zhang Jian and others
    • Singapore
    • High Court (Singapore)
    • 5 January 2021
    ...Relying on Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and others [2020] 4 SLR 85 (“Baker”), the plaintiffs submitted that even if the “Investment Contracts” existed, the illegality alleged was too remote and had limited......

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