Lavrentiadis, Lavrentios v Dextra Partners Pte Ltd and another

• Jurisdiction: Singapore
• Judge: Chua Lee Ming J
• Judgment Date: 23 July 2020
• Neutral Citation: [2020] SGHC 146
• Court: High Court (Singapore)
• Hearing Date: 26 November 2019,13 November 2019,15 November 2019,19 November 2019,14 November 2019,28 November 2019,27 November 2019,12 November 2019,21 November 2019,20 November 2019,18 November 2019,09 January 2020
• Docket Number: Suit No 106 of 2018
• Plaintiff Counsel: Sim Bock Eng, Tan Kia Hua (Chen Jiahua), Lee Yu Lun Darrell and Celeste Tan Yin (WongPartnership LLP)
• Defendant Counsel: Philip Fong Yeng Fatt, Kevin Koh Zhi Rong and Koh Xian Wei Jeffrey (Eversheds Harry Elias LLP)
• Subject Matter: Equity,Fiduciary relationships,When arising,Trusts,Breach of trust,Accessory liability,Acts amounting to assistance
• Published date: 30 July 2020

Chua Lee Ming J: Introduction

The plaintiff, Mr Lavrentios Lavrentiadis, was at all material times a client of the first defendant, Dextra Partners Pte Ltd (“Dextra”), a licensed foreign law practice in Singapore. The second defendant, Mr Bernhard Wilhelm Rudolf Weber (“Weber”), managed Dextra at all material times.

It is not disputed that Dextra held the plaintiff’s monies amounting to €39,735,362.82 and US$13,300,160.39 in its clients’ account. The disputes in this action revolve primarily around two broad questions: (a) whether the plaintiff had authorised certain transactions that Dextra claims it had entered into for the plaintiff’s account, and (b) whether Weber is personally liable for any loss suffered by the plaintiff.

Background Weber and ILC Singapore/Dextra

Weber is a Swiss-qualified lawyer and a Singapore-registered foreign lawyer. He set up ILC International Legal Consultants (Singapore) Pte Ltd (“ILC Singapore”) in 2003 after he left UBS Singapore where he was the head of private banking.

Weber set up ILC Singapore to provide legal services to private clients at the suggestion of Mr Richard Cedric Harry Ritter (“Ritter”), who is a fellow Swiss-qualified lawyer. Ritter ran a law firm in the United Arab Emirates called International Legal Consultants Dubai (“ILC Dubai”) as well as a law firm in Switzerland called Ritter Attorneys-at-Law Ltd (“Ritter Attorneys”). ILC Dubai was a sole proprietorship owned by Ritter. Asia was seen as an upcoming market and Weber set up ILC Singapore as an expansion of ILC Dubai to Asia. According to Weber, ILC Dubai (representing its own clients) would engage ILC Singapore to act for it in respect of transactions in Asia. Ritter became a shareholder of ILC Singapore shortly after it was set up.

At all material times, Ritter and Weber were the directors and shareholders of ILC Singapore until September 2013 when ILC Singapore’s association with ILC Dubai came to an end. Thereafter, ILC Singapore was renamed as Dextra and Weber became its sole director and shareholder. In this judgment, I use both “ILC Singapore” and “Dextra” interchangeably.

ILC Singapore provides legal advice on matters including legal aspects of structuring investments. Weber also set up various companies which render various services to ILC Singapore’s clients. The following are the main companies that are relevant to the present proceedings: Carnelia Pte Ltd (“Carnelia”) – Weber and one Ms Tracey Casari (“Casari”) set up Carnelia as a multi-family office for ILC Singapore’s high net worth individual clients.¹ Weber and Casari initially each held 42.5% of Carnelia’s shares and became equal shareholders after 23 April 2014.² At all material times, Weber, Casari and Ritter (until 12 September 2013) were directors of Carnelia. According to Weber, Carnelia acts as a “concierge” and takes care of clients’ needs for multiple services (for example, legal, tax accounting and asset management) by engaging the necessary service providers.³ Carnelia outsources all the services that the clients need.⁴ The service providers invoice Carnelia, and in turn, Carnelia invoices Dextra.⁵ Straits Invest Pte Ltd (“Straits Invest”) – Straits Invest, formerly known as W&M Wealth Managers (Asia) Pte Ltd (“W&M”), acts as an investment advisor. Weber held 40.2% of its shares until 2014 when his shareholding was reduced to 36%.⁶ At all material times, Weber was a director of Straits Invest. Straits Invest was set up to provide private wealth management services and it takes care of all matters relating to asset management.⁷ Clients may give Straits Invest a discretionary mandate to make investments, or an advisory mandate under which it merely advises the clients who then make the investments themselves if they accept the advice.⁸ “Straits Invest” and “W&M” will be used interchangeably in this judgment. Pearl Investment Management Ltd (“Pearl Investment”) – Pearl Investment is a fund management company set up in Brunei. It was wholly owned by Dextra until 30 March 2012, after which it became wholly owned by Hadley Global Corporation (“Hadley”). At all material times, Hadley was wholly owned by Weber.⁹ At all material times, Weber was a director of Pearl Investment. Orex Holding Ltd (“Orex”) – Weber and Ritter indirectly owned Orex in equal shares until 11 September 2013, after which Weber became the indirect sole owner.¹⁰ Orex was set up for the purposes of providing financing to a company called Far West Entertainment HK Ltd (“Far West”).¹¹ ILC Singapore made loans on behalf of its clients through Orex so that Orex appeared as the lender to Far West. Ruby International Ltd (“Ruby”) – Ruby was controlled by Weber and Ritter until 11 September 2013, after which it was effectively controlled by Weber.¹² ILC Singapore made loans on behalf of its clients through Ruby.

The plaintiff as a client of Dextra/ILC Singapore

The plaintiff is a Greek national. Sometime in 2005, the plaintiff wanted to set up a trust in Singapore and he was referred to Weber. This led to the setting up of a trust called the Calmness Trust pursuant to a Deed of Settlement dated 31 December 2005 (“the 2005 Deed of Settlement”).¹³ The plaintiff was the settlor and the primary beneficiary of the Calmness Trust and ILC Singapore was the first trustee. The cash under the Calmness Trust was held in an account with Deutsche Bank Singapore (“DB Singapore”) in the name of Cruise Intertrade Ltd (“Cruise”), a company incorporated in the British Virgin Islands. ILC Singapore controlled Cruise on behalf of the Calmness Trust.

On 1 January 2008, ILC Singapore retired as trustee and appointed WinTrust Asia Pacific Pte Ltd (“WinTrust”) as the trustee of the Calmness Trust.¹⁴ WinTrust was a company set up by Casari. Weber had known Casari for a few years as a trust professional. Casari incorporated WinTrust in 2005 or 2006 but could not act as trustee for the Calmness Trust until after WinTrust obtained licensing approval from the Monetary Authority of Singapore in 2007.

The 2005 Deed of Settlement envisaged a protector being appointed for the Calmness Trust. Under the 2005 Deed of Settlement, the trustee required the protector’s consent for certain limited purposes. However, the 2005 Deed of Settlement omitted to name the protector. On 12 September 2011, ILC Singapore and WinTrust entered into a Deed of Variation to the 2005 Deed of Settlement.¹⁵ Under the Deed of Variation, ILC Singapore confirmed, among other things, that it was the protector of the Calmness Trust with effect from 2 January 2008.

In October 2011, Proton Bank in Greece was nationalised.¹⁶ The plaintiff, who was the controlling shareholder of Proton Bank, was investigated in connection with certain loans made by Proton Bank to the plaintiff’s group of companies. A freezing order was made against the plaintiff’s assets in Greece. The plaintiff testified during the trial that he had been found innocent of most of the charges against him but that there were some charges still going through the legal process in Greece.¹⁷

Between 30 November 2011 and 4 January 2012, the remaining funds in Cruise’s account with DB Singapore, amounting to €39,735,362.82 and US$12.67m, were transferred to ILC Singapore’s clients’ account as follows: on 30 November 2011 – €35m; on 21 December 2011 – €4m and US$12.67m; and on 4 January 2012 – €735,362.82.

ILC Singapore held the monies on trust for the plaintiff. These monies form the bulk of the subject matter of this action. The Calmness Trust was terminated thereafter.

In April 2012, Weber met the plaintiff in Athens (“the April 2012 meeting”). According to Weber, the plaintiff signed a General Advisory Mandate dated 20 April 2012 (“the 2012 Mandate”) at the April 2012 meeting.¹⁸ In these proceedings, the defendants rely on the 2012 Mandate as the source of Dextra’s authority to enter into a number of transactions on the plaintiff’s behalf. The plaintiff testified that he did not recall signing the 2012 Mandate.¹⁹ The plaintiff also asserts that the 2012 Mandate did not authorise the defendants to enter into the disputed transactions.

In November 2012, Ritter and Weber met the plaintiff in Athens (“the November 2012 meeting”). The subject matter of the discussions at this meeting is disputed. The defendants allege that the plaintiff needed help to unfreeze his funds in Switzerland and that he also had problems with blocked assets and his bank in Liechtenstein. The defendants also allege that they discussed how ILC Singapore could protect the plaintiff’s assets in Singapore and that the plaintiff “specifically authori[s]ed the use of asset protection structures”.²⁰ The plaintiff denies these allegations and claims that he met Ritter and Weber to discuss the sale of Lamda Privatbank AG, a Liechtenstein-based private bank that he owned.

On 13 December 2012, the plaintiff was arrested and remanded in custody.²¹

In December 2013, a senior associate at Dextra, Mr Alexander Ressos (“Ressos”), met the plaintiff’s Greek lawyer, Mr Vasilios Athanasiou (“Athanasiou”) in Munich to provide an update of the plaintiff’s affairs.

In June 2014, the plaintiff was released from remand.

Statements of account given to the plaintiff

In August 2014, Athanasiou requested an update on the funds held by Dextra. On 26 August 2014, Weber sent a statement of the plaintiff’s EUR account to the plaintiff²² (“August 2014 EUR Statement”).²³ Weber did not send any statement of the plaintiff’s USD account. The August 2014 EUR Statement showed that as at 12 August 2014, the balance amount due to the plaintiff was €23,622,524.09. This amount remained unchanged as at 20 August 2014.

In October 2014, the plaintiff and Athanasiou met Ressos in Athens. Ressos gave the plaintiff statements of the plaintiff’s EUR and USD accounts with Dextra (“the September 2014 EUR and USD Statements”) which he had obtained from Dextra’s...