Bouvier, Yves Charles Edgar v Accent Delight International Ltd

Judgment Date21 August 2015
Date21 August 2015
Docket NumberCivil Appeals Nos 80 and 81 of 2015, and Summonses Nos 235 and 256 of 2015
CourtCourt of Appeal (Singapore)
Bouvier, Yves Charles Edgar and another
Accent Delight International Ltd and another and another appeal

[2015] SGCA 45

Sundaresh Menon CJ


Chao Hick Tin JA


Andrew Phang Boon Leong JA

Civil Appeals Nos 80 and 81 of 2015, and Summonses Nos 235 and 256 of 2015

Court of Appeal

Injunctions—Mareva injunctions—Respondents claiming against appellants for breach of fiduciary duty, dishonest assistance and knowing receipt—Respondents alleging appellants acted dishonestly—Whether allegation of dishonesty could ground inference of real risk of dissipation for grant of Mareva injunction

Injunctions—Proprietary injunctions—Respondents claiming proprietary relief against appellants—Whether balance of convenience lying in favour of grant of proprietary injunctions

The appeals were against a judge's refusal to set aside Mareva injunctions and ancillary disclosure orders that the respondents had earlier obtained ex parte against the appellants. The Mareva injunctions were obtained in support of the respondents' claims against the appellants for, amongst others, breach of fiduciary duty, dishonest assistance, knowing receipt and conspiracy. The respondents also argued in the alternative for proprietary injunctions in respect of their claim for proprietary relief against the appellants (the proprietary injunctions were, however, not granted by the judge).

The respondents' position was that Yves Charles Edgar Bouvier, the first appellant in Civil Appeal No 80 of 2015, was their agent in transactions for their purchase of artworks. In these transactions, Mr Bouvier often acted through MEI Invest Pte Ltd (‘MEI Invest’), the second appellant, which he had control over. The respondents alleged that Mr Bouvier had, dishonestly and in breach of his fiduciary duty, made secret profits by selling the artworks to the respondents at substantial markups from the prices he obtained the artworks for. MEI Invest had dishonestly assisted in Mr Bouvier's breach of fiduciary duty. Mr Bouvier did not dispute having sold the artworks to the respondents at markups. His position was that he was entitled to do so because he was acting as an independent seller and not an agent. He could sell the artworks to the respondents at any price he thought they would pay.

The respondents also claimed that Mr Bouvier had made payments out of the secret profits to Tania Rappo, the appellant in Civil Appeal No 81 of 2015. The respondents alleged that Mrs Rappo was liable for, amongst others, knowing receipt of property obtained in breach of Mr Bouvier's fiduciary duty. Mr Bouvier and Mrs Rappo did not dispute, respectively, having made or received the payments. They said that the payments were an innocuous ‘finder's fee’, which was common in the art world.

The respondents claimed that they had discovered Mr Bouvier's wrongdoing in late 2014. This led to them filing a criminal complaint against him in the Principality of Monaco on 9 January 2015. As a consequence, Mr Bouvier and Mrs Rappo were arrested and detained for questioning in Monaco between 25 and 28 February 2015, after which they were released on bail. The respondents thereafter applied to the Singapore High Court and obtained the Mareva injunctions ex parte against the appellants on 12 March 2015.

The central question in the appeals was whether there was a real risk that the appellants would dissipate their assets to frustrate the enforcement of an anticipated judgment of the court. The respondents' main argument against the discharge of the Mareva injunctions was that there were well-substantiated allegations that the appellants had acted dishonestly, and that the court was entitled to infer a real risk of dissipation from those allegations.

Held, allowing the appeals:

(1) If there was a unifying principle that could adequately rationalise and explain the circumstances in which a court could legitimately infer a real risk of dissipation from nothing more than a good arguable case of dishonesty, it was that the alleged dishonesty had to be of such a nature that it had a real and material bearing on the risk of dissipation: at [93] .

(2) A well-substantiated allegation that a defendant had acted dishonestly could and often would be relevant to whether there was a real risk that the defendant would dissipate his assets. But it was incumbent on the court to examine the precise nature of the dishonesty alleged and the strength of the evidence relied on in support of the allegation, keeping fully in mind that the proceedings were only at an interlocutory stage and assessing, in that light, whether there was a sufficient basis to find a real risk of dissipation: at [94] .

(3) It had not been shown that there was a real risk that Mr Bouvier or MEI Invest would dissipate their assets. The respondents had established a good arguable case of dishonesty, but it could not be put higher than that. The allegations of dishonesty levelled at Mr Bouvier also did not have a real and material bearing upon the risk of dissipation. The alleged dishonesty was not in the nature of a complex machination or an elaborate scheme. The ultimate outcome in this case turned on the true characterisation of the relationship between Mr Bouvier and the respondents. In that light, it would also have been wrong to infer a real risk of dissipation from the fact that Mr Bouvier was wealthy, sophisticated and well-advised. He had not misused his international financial expertise in the commission or furtherance of the allegedly deceitful behaviour: at [62] , and [95] to [97] .

(4) Information about a defendant's assets that was disclosed pursuant to an ancillary disclosure order would often have little, if any, bearing on a real risk of dissipation, except in two narrow situations: first, where the defendant refused to provide any disclosure of his assets at all; and, second, where the disclosed information revealed assets that were so glaringly inadequate or suspicious that the deficiencies could not be attributed to the urgency of the disclosures or accounting or valuation inaccuracies. Even in those situations the court had to carefully consider whether, in all the circumstances, an inference of a real risk of dissipation could appropriately be drawn. The information disclosed by Mr Bouvier in this case was not suspicious; his disclosure affidavits were timeous and detailed: at [103] to [105] .

(5) It had not been shown that there was a real risk that Mrs Rappo would dissipate her assets. The nature of the allegations against Mrs Rappo suggested negligence or wilful blindness rather than dishonesty. There was also no evidence that Mrs Rappo had attempted to conceal the payments she received from Mr Bouvier. The respondents' allegation that Mrs Rappo was experienced in international finance was irrelevant and, in any event, unsubstantiated: at [138] to [141] .

(6) The Mareva injunctions against the appellants were an abuse of the court's process, which was an independent ground for setting them aside. This was borne out by four factors. First, there was an inexplicable delay in the respondents' application for the Mareva injunctions. Second, the respondents failed to comply with the Supreme Court Practice Directions. They did not give prior notice to the appellants or explain why such notice was not given. Third, the Mareva injunctions sought were unjustifiably wide in their scope. Fourth, the respondents put the Mareva injunctions into wider circulation than was necessary and disseminated information in a misleading manner. The cumulative picture that emerged from these factors was that the respondents did not obtain the Mareva injunctions out of a genuine fear that the appellants would dissipate their assets, but, instead, obtained them to oppress the appellants: at [108] , [130] and [134] .

(7) The proprietary injunctions that the respondents sought should not be granted. The respondents had not established that the balance of convenience lay in favour of the grant of the proprietary injunctions: at [164] .

[Observation: Where a plaintiff seeks a worldwide Mareva injunction from a Singapore court, the plaintiff should ordinarily undertake to the court that it shall not, without the court's leave, enforce the injunction or seek an order of a similar nature in any jurisdiction outside Singapore. This undertaking plays a vital role because it protects a defendant from the risk of oppression which may arise from a multiplicity of suits: at [131] .]

A v C [1981] QB 956; [1980] 2 Lloyd's Rep 200 (refd)

American Cyanamid Co v Ethicon Ltd [1975] AC 396 (refd)

Art Trend Ltd v Blue Dolphin (Pte) Ltd [1981-1982] SLR (R) 633; [1982-1983] SLR 362, HC (folld)

Art Trend Ltd v Blue Dolphin (Pte) Ltd [1983-1984] SLR (R) 105; [1982-1983] SLR 156, CA (refd)

Ashtiani v Kashi [1987] QB 888 (refd)

Babanaft International Co SA v Bassatne [1990] Ch 13 (refd)

Bank Mellat v Nikpour [1985] FSR 87 (refd)

Bank of Credit and Commerce International SA, Re [1994] 1 WLR 708; [1994] 3 All ER 764 (refd)

Cherney v Neuman [2009] EWHC 1743 (Ch) (refd)

Choy Chee Keen Collin v Public Utilities Board [1996] 3 SLR (R) 812; [1997] 1 SLR 604 (refd)

Dadourian Group International Inc v Simms [2006] 1 WLR 2499 (refd)

Derby & Co Ltd v Weldon [1990] Ch 48 (refd)

Derby & Co Ltd v Weldon (Nos 3 and 4) [1990] Ch 65 (folld)

European Grain & Shipping Ltd v Compania Naviera Euro-Asia SA [1989] 2 SLR (R) 445; [1989] SLR 1001 (refd)

FHR European Ventures LLP v Cedar Capital Partners LLC [2015] AC 250 (refd)

Grupo Torras SA v Shiekh Fahad Mohammed Al Sabah (16 February 1994) (refd)

Grupo Torras SA v Sheikh Fahad Mohammed Al Sabah 1997 WL 1105536 (21 March 1997) (refd)

Guan Chong Cocoa Manufacturer Sdn Bhd v Pratiwi Shipping SA [2003] 1 SLR (R) 157; [2003] 1 SLR 157 (refd)

Irish Response Ltd v Direct Beauty Products Ltd [2011] EWHC 37 (QB) (refd)

Jarvis Field Press Ltd v...

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