Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and others
Court | International Commercial Court (Singapore) |
Judge | Quentin Loh J; Carolyn Berger IJ; Dominique Hascher IJ |
Judgment Date | 29 April 2020 |
Neutral Citation | [2020] SGHC(I) 10 |
Citation | [2020] SGHC(I) 10 |
Published date | 05 May 2020 |
Plaintiff Counsel | Cavinder Bull SC, Woo Shu Yan, Gerald Tay, Regina Lim and Sun Fangda (Drew & Napier LLC) |
Defendant Counsel | Alvin Yeo SC, Monica Chong, Vithiya Rajendra, Nurul Ayu Fajarani and Daryl Wong (WongPartnership LLP) |
Docket Number | Suit No 3 of 2018 |
Hearing Date | 12 November 2019,16 November 2019,14 November 2019,06 February 2020,03 February 2020,11 November 2019,15 November 2019,13 November 2019 |
Date | 29 April 2020 |
Subject Matter | Trusts,Express trust,Illegality under international and foreign law,Resulting trusts,Illegality and public policy,Formation,Contract |
The plaintiff, Michael Baker (“Baker”), is the executor of the estate of Chantal Burnison (“Chantal” or “the Estate”, as the case may be), who succumbed to cancer on 2 October 2016 in Los Angeles. Baker is a practising attorney in the State of California and was a friend and confidante of Chantal. Chantal, who divorced her husband in 1993, is survived by two daughters, Heika Burnison (“Heika”) born in 1987 and Birka Burnison (“Birka”) born in 1990.
The 2
The 1
Baker, as executor of Chantal’s estate, sues the Defendants for breach of fiduciary duties as trustees under an oral trust or oral agreement to hold and manage assets for Chantal and for breach of a loan agreement of Swiss Francs (“CHF”) 9.5 million with 3% p.a. interest (“the Loan Agreement”). Renslade (HK) is sued for dishonestly assisting BCS and Weber in their breach of fiduciary duties. The Defendants are also sued for conspiring and acting together with the intention of injuring Chantal and/or the Estate.
The backgroundThe following background facts are not really in dispute. Insofar as they are, they constitute our findings of fact. Chantal co-invented a compound called Ethocyn in 1980. Her co-inventor, one Walter J. Kasha (“Walter”), does not feature in the evidence but nothing turns on that. The Ethocyn compound had to be manufactured or synthesized in a laboratory. It was a skin product that was said to make the skin look younger and better toned. There was a finished product sold over the counter or through other channels like television and telemarketing. The Ethocyn compound was also sold to cosmetic manufacturers who would incorporate this compound into their products.
Chantal was a gifted individual. As a chemist and scientist,2 she co-invented the Ethocyn compound and co-authored a number of articles in relation to compounds and products in relation to her areas of interest and work. She was also a Member of the California State Bar from 1981 with a juris doctor degree (1981, the University of West Los Angeles) and was admitted to practice in the Supreme Court of California and the Central District Court. She was a partner in a law firm, Allison Williamson & Burnison (1981-1983) and General Corporate Counsel to a public pesticide company.3
Sometime prior to 21 May 1982, Chantal and Walter assigned their rights to the inventions and patents of Ethocyn (“the Ethocyn Rights”) to CBD Inc, a Californian company, which in turn licensed the Ethocyn Rights to CBD Pharmaceutical Corporation (which was incorporated in 1979 as Innovations International Inc and changed its name to Chantal Pharmaceutical Corporation in 1982).4 On 21 May 1982, CBD Pharmaceutical Corporation licensed those rights to Chantal Pharmaceutical Corporation (“Chantal Pharmaceutical”). In March 1994, Chantal Pharmaceutical licensed the Ethocyn Rights to Chantal Skin Care Corporation (“CSC”).5 Chantal Pharmaceutical and CSC will be collectively referred to as “the Chantal Companies” in this judgment. All the aforementioned companies are Californian corporations. For the purposes of this judgment, we find, and it is not really in dispute, that Chantal was resident in California, more particularly, in or in the vicinity of Los Angeles. However, her business encompassed at least the USA, Asia and Europe.
On 6 May 1996, a class action was commenced against Chantal Pharmaceutical and Chantal by purchasers of the common stock of Chantal Pharmaceutical for allegedly issuing false statements on the financial performance of Chantal Pharmaceutical by overstating its revenues, which operated to artificially inflate the price of Chantal’s common stock. It was alleged that Chantal sold at least 300,000 of her stock for at least US$6.3 million. It is alleged that, because of these false statements, the stock rose from “$6-9/16 on July 10, 1995 to $28-1/8 on December 29, 1995” but when certain reports concerning its financial condition surfaced, the stock fell from “$19-1/8 per share to $7-5/16 per share on January 8, 1996 on a huge volume of 7.7 million shares”.6 The class action was brought pursuant to the Securities Exchange Act of 1934 (15 U.S.C. §§78j(b) and 78t(a)) and rules promulgated by the Securities and Exchange Commission (17 C.F.R. §240.10b-5).7
That class action was still pending when an involuntary Chapter 11 bankruptcy petition was filed on 17 February 1999 against Chantal Pharmaceutical. Chantal Pharmaceutical’s subsidiary, CSC, then filed for voluntary insolvency on 12 March 1999. On the same day, Chantal Pharmaceutical filed a consent to enter an order for relief and a voluntary petition in the Chapter 11 case. The order for relief was entered on 15 March 1999 and the case was thereby converted to a voluntary debtor in possession Chapter 11 case.8
A Creditors’ Committee was appointed by the United States Trustee for the Chantal Companies. The Creditors’ Committee retained the Kriegsman Group and an investment banker and the latter also engaged the services of one Stan Teeple (“Teeple”), a work-out consultant, in locating a potential buyer for the debtors’ rights and assets.9 It is not in dispute that a prospectus was prepared and sent out to about 20 prospective buyers. A draft of this prospectus was sent to Chantal and her lawyer on 19 June 199910 which was said to be prepared by one Jerry Seelig (a Managing Director with the Kriegsman Group11) based on an earlier version by Teeple. There is evidence, marked “Draft”, of a reply from Mr Esterkin, Chantal’s lawyer, noting,
There were no bidders for the purchase of the Chantal Companies’ assets save for a New Zealand corporation, Renslade Holdings Limited (“Renslade (NZ)”). An asset purchase agreement dated 22 September 1999 (“APA”) was, subject to approval by the Bankruptcy Court, entered into between the Chantal Companies and Renslade (NZ).13 A Joint Motion by the Chantal Companies and the Creditors’ Committee was filed to seek approval of the sale of the Ethocyn Rights and assets, together with certain conditions, to Renslade (NZ).14 At the hearing of the Joint Motion on 19 October 1999, the Bankruptcy Court granted the order,
The material terms of the APA were as follows:
On 23 May 2000, Renslade Singapore Pte Ltd (subsequently re-named Renslade Holdings Pte Ltd (“Renslade (S)”)) was incorporated. The Ethocyn Rights were subsequently transferred from Renslade (NZ) to Renslade (S). When exactly this occurred is not clear. Baker deposes that it was probably sometime in 2002, between BCS’s name change on 26 July 2002 and Chantal’s email to Weber of...
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BCS Business Consulting Services Pte Ltd and others v Baker, Michael A (executor of the estate of Chantal Burnison, deceased)
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