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

• Court: Court of Appeal (Singapore)
• Judge: Steven Chong JCA
• Judgment Date: 21 September 2022
• Neutral Citation: [2022] SGCA(I) 7
• Citation: [2022] SGCA(I) 7
• Published date: 24 September 2022
• Hearing Date: 26 July 2022
• Docket Number: Civil Appeal No 70 of 2021
• Plaintiff Counsel: Thio Shen Yi SC, Ee Eng Yew Justin, Kevin Elbert and Goh Enchi Jeanne (TSMP Law Corporation)
• Defendant Counsel: Woo Shu Yan, Tay Hong Zhi Gerald and Lim Qiu Yi Regina (Drew & Napier LLC)
• Subject Matter: Civil Procedure,Injunctions,Anti-suit injunction,Conflict of Laws,Natural forum,Restraint of foreign proceedings,Comity

Steven Chong JCA (delivering the judgment of the court): Introduction

An anti-suit injunction (“ASI”) is essentially an order of court compelling a party who is amenable to the jurisdiction of the court to refrain from instituting or continuing with proceedings abroad. It may be granted for a variety of reasons, such as to protect a legal right not to be sued in a foreign court, where the dispute is governed by an arbitration clause or is subject to an exclusive jurisdiction clause. It may also be granted in exercise of the court’s equitable jurisdiction, in circumstances where the commencement or pursuit of the foreign proceedings is tantamount to conduct that is vexatious and oppressive. Another ground that justifies the grant of an ASI in exercise of the inherent jurisdiction of the court centres on the prevention of abuse of the forum’s court process and the protection of the court’s jurisdiction and judgments. This is especially so where the forum court’s judgment is undermined in the foreign proceedings.

The present appeal concerns an ASI which was sought and granted on the basis of protecting the processes and judgments of the Singapore court. A judgment on liability had already been issued here, the subject matter of which the defendants to the ASI (the “appellants”) sought to continue to litigate in the foreign jurisdiction. The question before us is whether, in such a situation, the requirement of natural forum and the issue of whether the foreign proceedings were concurrent or consecutive to the forum court’s proceedings should continue to be relevant and accorded primacy. As we will explain below, the principles and considerations are different depending on whether the ASI is granted in exercise of the court’s equitable jurisdiction, or in exercise of the court’s inherent jurisdiction to protect the court’s processes, jurisdiction and judgments. Suffice it to say for now that the court’s exercise of discretion in the case of its equitable jurisdiction focuses on the effect of the foreign proceedings on the litigant seeking an ASI whereas in contrast, when the court’s inherent jurisdiction is invoked, the focus is on the disruption the foreign proceedings might have to the forum’s proceedings and judgments from the perspective of the court.

The respondent, Mr Michael A Baker, had commenced proceedings as executor on behalf of the estate of Ms Chantal Burnison (the “Estate” and “Chantal”) in Singapore alleging, amongst other things, that the appellants had breached their fiduciary duties as trustees under an oral trust or oral agreement (the “Trust” or “Trust Agreement”) to hold and manage assets (the “Trust Assets”) for Chantal. While the proceedings were pending before the Singapore International Commercial Court (the “SICC”), the first appellant, BCS Business Consulting Services Pte Ltd (“BCS”) commenced proceedings in California (the “Californian Proceedings”) against the respondent and one of Chantal’s companies in the United States (the “US”), BCS Pharma Corporation (“BCS Pharma”). The respondent prevailed before the SICC. Significantly, after the appeal against the decision of the SICC was dismissed by this court, the first appellant amended its complaint in the Californian Proceedings to add additional defendants and to introduce additional causes of action including a claim in judicial estoppel, premised on representations that Chantal had made in certain Ch 11 bankruptcy proceedings in the US (the “US Bankruptcy Proceedings”). It thus sought a declaratory judgment to estop the respondent as well as the other defendants in the Californian Proceedings from asserting the existence of the Trust.

The respondent then applied vide SIC/SUM 37/2021 (“SUM 37”) for an ASI to restrain BCS from prosecuting or continuing to prosecute the Californian Proceedings. This was granted by the SICC in so far as these proceedings relate to the existence, validity and/or enforceability of the Trust. The appellants were also restrained from prosecuting such proceedings in the US and anywhere else in the world against the respondent or the beneficiaries of the Estate in so far as these relate to the same subject matter.

The appellants appealed against the grant of the ASI. We heard the present appeal together with CA/CA 3/2022 (“CA 3”), which is a related appeal against another decision of the SICC in respect of sums due on the taking of accounts. Our decision on CA 3 may be found in Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and others [2022] SGCA(I) 8.

Background facts

The background leading to the present appeal has been detailed in Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and others [2022] 3 SLR 103 (the “Judgment”) at [6]–[42]. It suffices to briefly highlight the salient facts. For reasons which will be apparent below, the chronology of the events, in particular the key developments in the SICC and Californian Proceedings, is crucial in the final analysis.

BCS is a company incorporated in Singapore on 31 March 1999. The second appellant, Mr Marcus Weber (“Weber”), is a director and the sole shareholder of BCS. Weber is a Swiss National who became a permanent resident of Singapore in 2003. The third appellant, Renslade Holdings Limited (“Renslade (HK)”), is a company incorporated in Hong Kong and Weber is its sole shareholder.

Chantal was the co-inventor of a compound named “Ethocyn”, which was used in various cosmetic and beauty products. The rights to the inventions and patents of Ethocyn (the “Ethocyn Rights”) were initially assigned to Californian companies controlled by Chantal (the “Chantal Companies”). Subsequently, the Chantal Companies’ assets, including its intangible intellectual property rights such as the patent rights, licenses, trademarks, customer lists and rights to the patented compounds that included Ethocyn were sold to a New Zealand corporation, Renslade Holdings Limited (“Renslade (NZ)”), following the US Bankruptcy Proceedings against the Chantal Companies. Sometime between 2000 and 2001 or 2002, the Ethocyn Rights were transferred to a Singapore company, Renslade Singapore Pte Ltd (“Renslade (S)”), and finally to BCS on 1 April 2002.

Over the years, the Ethocyn Rights yielded substantial income and profits, mainly under a supply and distribution agreement dated 26 June 2003 between BCS and Nu Skin International Inc (“Nu Skin”). Under the agreement, BCS agreed to supply Ethocyn to Nu Skin for its use and distribution, and Nu Skin would make direct payments to BCS in return. These payments formed the bulk of moneys generated from the Ethocyn Rights (the “Trust Moneys”). In or around 2007, the bulk of the Trust Moneys was transferred from BCS to Renslade (HK).

In October 2016, Chantal passed away, and the respondent was appointed the executor of the Estate. Chantal is survived by her two daughters, Ms Heika Burnison (“Heika”, born in 1987) and Ms Birka Burnison (“Birka”, born in 1990). They are the only beneficiaries of the Estate.

Suit 3

In November 2017, the respondent commenced SIC/S 3/2018 (“Suit 3”) on behalf of the Estate against the appellants for: (a) breach of fiduciary duties as trustees of the Trust, and (b) breach of a loan agreement of CHF9.5 million payable with 3% interest per annum. Renslade (HK) was sued for dishonestly assisting BCS and Weber in their breach of fiduciary duties. The appellants were also sued for conspiring and acting together with the intention of injuring Chantal and/or the Estate.

The appellants denied that there was any kind of agreement between Chantal and Weber for Weber to acquire and hold the Ethocyn Rights and any income or proceeds generated on trust for Chantal. Further, the alleged Trust was governed by California law under which no valid trust could have been created due to a lack of intention to create a trust, a lack of identified beneficiaries, and the fact that the settlor and beneficiary were the same person. Furthermore, the alleged Trust would be for an illegal purpose, and would additionally be illegal, void or unenforceable as being contrary to the public policy of Singapore since on the respondent’s case, Chantal had in the course of the US Bankruptcy Proceedings made certain statements which served to conceal her assets and the existence of the alleged Trust. This amounted to perjury, fraud on the court, and breaches of Crimes and Criminal Procedure 18 USC (US) §§ 152 and 157 (see 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 “Suit 3 Judgment”) at [43]–[47]). In reply, the respondent averred that Singapore law was the governing law of the Trust Agreement and the Trust and that, even if California law applied, the arrangements were valid and the Trust was not for an illegal purpose (see the Suit 3 Judgment at [55]–[56]).

The parties agreed to bifurcate the trial into liability and quantum tranches, and that foreign law would be determined via submissions from registered foreign lawyers. The respondent called Heika, the Estate’s lawyer, Mr Wayne Johnson, and himself as witnesses. After they gave their evidence, the appellants submitted that there was no case to answer and elected not to call evidence. The parties then filed their written submissions, and the registered US counsel filed their affidavits and submissions on California law. Order 110 r 25(1) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (now O 16 r 8(1) of the Singapore International Commercial Court Rules 2021), provides for “any question of foreign law [to] be determined on the basis of submissions (which may be oral or written or both) instead of proof”.

The SICC heard legal submissions from the parties’ respective US counsel on California law in February 2020...