Perry, Tamar and another v Esculier, Bonnet Servane Michele Thais and another

JudgeSimon Thorley IJ
Judgment Date15 July 2022
Neutral Citation[2022] SGHC(I) 10
CourtInternational Commercial Court (Singapore)
Hearing Date21 April 2022,22 April 2022,14 March 2022,16 March 2022,17 March 2022,18 March 2022,21 March 2022,22 March 2022
Docket NumberSuit No 4 of 2020
Plaintiff CounselPaul Chaisty QC (instructed counsel), Yee Mun Howe Gerald and Koh Kuan Hong John Paul (Premier Law LLC)
Defendant CounselKam Su Cheun Aurill and Lim Rui Hsien Esther (Legal Clinic LLC), Colin Liew (Colin Liew LLC) (instructed co-counsel)
Subject MatterConflict of Laws,Choice of law,Equity,Property,Trusts,Constructive trusts,Recipient liability,Proprietary liability,Resulting Trusts
Published date20 July 2022
Simon Thorley IJ: Introduction and background

Both the Plaintiffs and Defendants were investors in funds administered by a group of companies trading under various names, each comprising as its principal denominator the word “Lexinta”. The activities of each of these companies were directed by a Spanish citizen resident in Switzerland, Bismark Badilla (“Badilla”). Whilst it will be necessary to consider the roles played by a number of these companies individually, where it is not necessary to draw any distinction between the individual Lexinta companies I shall refer to them compendiously as “Lexinta”.

The Defendants were relatively early investors, their initial investment being made in April 2014. In late 2015, they expressed a desire to realise the reported accumulated assets of their investment and it was agreed that this would be done in April 2016. Payment was not then forthcoming, but, following demands made on the Defendants’ behalf – over a period of months between August 2016 and February 2017 – sums amounting to around US$10 million were credited to the Defendants’ bank account with DBS Bank Ltd (“DBS”) in Singapore (the “Disputed Monies”).

Between April 2016 and August 2017, the Plaintiffs, or persons from whom the Plaintiffs claim to derive title, deposited in excess of US$24 million with Lexinta (the “Plaintiffs’ Fund”) and contend that instead of investing that fund as agreed, Lexinta dissipated it directly to earlier investors including the Defendants as part of a Ponzi scheme.

In March 2018, the first Plaintiff, Ms Tamar Perry (“TP”), and another person, Mr Yachel Baker (“YB”), obtained ex parte discovery orders from the Hong Kong courts against DBS for the banking records of the Lexinta group claiming to have been victims of a fraudulent Ponzi scheme. This order resulted in TP becoming aware that the Disputed Monies had been transferred into the Defendants’ DBS bank account.

The Plaintiffs assert that those transfers were the result of back-to-back transfers of some of the Plaintiffs’ Fund such that, in law, those sums belong to the Plaintiffs and not the Defendants. Accordingly, in May 2018, TP’s lawyers in Hong Kong demanded that DBS transfer the Disputed Monies to her. As a result, at some date thereafter, DBS froze the Defendants’ bank account.

It was not, however, until March 2019 that the Defendants became aware that the funds in their DBS account had been frozen and that TP had demanded that the sums involved be transferred to her. Discussions between the parties then ensued which failed to result in agreement as to the ownership of the Disputed Monies.

Faced with the conflicting claims, DBS availed itself of the Interpleader proceedings provided for by Order 17 of the Rules of Court (Cap 332, R 5, 2014 Rev Ed).

Interpleader proceedings have to be commenced by an Originating Summons and DBS did this in the Singapore High Court on 8 August 2020. This was HC/OS 1016/2019 (“OS 1016”) and it named the first Defendant in this suit, Mrs Bonnet Esculier Servane Michele Thais (“BE”), TP and YB as the first, second and third defendants respectively.

OS 1016 first came on for hearing before Dedar Singh Gill JC (as he then was) on 10 January 2020. YB renounced any claim to the Disputed Monies and therefore played no further part in the proceedings. Paragraph 2 of Gill JC’s order (HC/ORC 1066/2020, the “Order”) made pursuant to O 17 r 5(1)(b) provided: [BE] and the [TP] shall proceed to have their respective claims to the Disputed Monies determined with the [TP] to be the plaintiff in such further proceedings (the “Further Proceedings”) and [BE], the defendant. The [YB] shall not be a party to the Further Proceedings.

Paragraph 3 of the Order directed that TP should file a Statement of Claim in the Further Proceedings. Orders were made for a cross-undertaking in damages from TP and for security for costs. Paragraph 7 dispensed with DBS’s attendance at any further hearings of the Further Proceedings. Finally, paragraph 8 reserved the costs of OS 1016, and paragraph 9 gave all parties liberty to apply.

Following certain procedural complications, at a further hearing on 17 March 2020 leave was given for the second Defendant in this suit, Mr Jacques Esculier (“JE”), to be joined as the fourth defendant in OS 1016 and for the second Plaintiff in this suit, Solid Fund Private Foundation (“SFPF”), to be joined as the fifth defendant in OS 1016.

The “Further Proceedings” were therefore commenced in the High Court on 19 March 2020 (HC/S 259/2020) naming TP as Plaintiff and BE and JE as Defendants. On 20 March 2020, the Writ of Summons and Statement of Claim were amended to include SFPF as the second Plaintiff.

On 9 June 2020, the High Court proceedings were transferred to the Singapore International Commercial Court and the suit was re-designated SIC/S 4/2020.

Once the claims in this action are resolved, OS 1016 will be restored under the liberty to apply provision so that DBS can be directed to pay the Disputed Monies to the successful party and any consequential orders can be made.

The Lexinta companies

In the Statement of Claim, five Lexinta Companies are identified: Lexinta AG (“LAG”), a Swiss company formerly registered in Zug but re-registered in Zurich on 15 September 2015; Lexinta Group Limited (“LGL”), a company registered in Hong Kong; Lexinta Limited (“LL”), a company registered in Hong Kong; Lexinta Management Limited (“LML”), a company registered in Hong Kong; and Lexinta Inc (“L Inc”), a company registered in the Seychelles.

Particular attention needs to be paid to LGL as the expression “Lexinta Group” is also used in the contemporaneous documents and by witnesses as well as counsel during the trial to refer to the group of companies as a whole (which, as stated at [1] above, I have designated “Lexinta”). The distinction between the two raises important issues in the case and it is therefore necessary to ensure that confusion between LGL, the Hong Kong company, and Lexinta, the group of companies, is avoided.

The Defendants and their dealings with Lexinta The Defendants’ backgrounds

BE is a French national currently living in Switzerland. She qualified as a lawyer in the early 1990s. During her career she worked for the New York international law firm, Coudert Brothers LLP, and was a partner for some eight years acting on mergers and acquisitions. She then became general counsel to the Murex group, a leading global fintech company, where her main focus was on intellectual property. She retired four or five years ago.

JE is also a French national currently living in Switzerland. He has enjoyed a successful career in business. Between 2007 and 2020 he was the Chief Executive Officer (“CEO”) of WABCO Holdings Inc (“WABCO”), a US company, which is a market leader in advanced technologies for commercial vehicles. In addition, he was Chairman of the Board from 2009 until 2020. WABCO was, until it was taken over in 2020, listed on the New York Stock Exchange.

In the late 1990s, the Esculiers were based in Singapore and therefore opened bank accounts with DBS. Three are relevant to these proceedings: A multicurrency savings account in BE’s name; A foreign currency account in their joint names; and A foreign currency deposit account in their joint names.

In 2014, the Esculiers were both approaching retirement. They considered that they had not been enjoying sufficiently significant financial returns on their savings and decided to pursue more active options to grow them. In consequence, BE was introduced to Badilla in early 2014. Since her husband was fully occupied in his job, the primary dealings were between Badilla and BE.

Assessment of the Defendants’ oral evidence

Both the Defendants came to Singapore to give evidence in person, having complied with the necessary COVID protocols. Unfortunately, the night before the trial was due to start BE tested positive for COVID and was therefore unable to attend court in person, but was able to join via a video-link from her hotel whilst in isolation. Since it made no sense for JE to give evidence before BE as she was the principal witness and since, entirely understandably, both parties wished that her evidence should be given in person and not by video-link, some adjournments were necessary to make this possible. By the time that she was able to give oral evidence, JE had himself contracted the virus and the parties agreed that he should give his evidence by video-link from his hotel room, which he did.

The cross-examination of BE by Mr Chaisty QC (“Mr Chaisty”) was lengthy, robust but fair, very detailed and focused closely on the minutiae of the text of various documents which I shall have to consider in more detail below. During the course of this process, BE was courteous, patient, measured and precise. She had a good recollection of events and was clear in rejecting certain propositions put to her by Mr Chaisty. It is not surprising – both due to the nature of the cross-examination and to the fact that she was still recovering from her illness – that on occasions BE became somewhat emotional. Overall, I consider her to have been a good witness and that significant weight should be attached to her evidence.

The cross-examination of JE was shorter but of a similar nature. JE came over as a man of presence with a dominant personality. He had a less good recollection of contemporaneous events as he was not involved on a day-to-day basis and therefore relied, to a great extent, on the documents as being a record of those events. He demonstrated a clear, logical and measured business-like approach to the giving of evidence. Overall, he was an impressive witness and weight can therefore be attached to his evidence.

In the Plaintiffs’ written closing submissions, it is submitted that neither witness “approached the giving of evidence in a...

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  • Perry, Tamar and another v Esculier, Bonnet Servane Michele Thais and another
    • Singapore
    • International Commercial Court (Singapore)
    • 29 August 2022
    ...Background This judgment on costs concerns my decision in Perry, Tamar and another v Esculier, Bonnet Servane Michele Thais and another [2022] SGHC(I) 10 (the “Substantive Judgment”) which was handed down on 15 July 2022. Unless otherwise stated, I shall adopt the abbreviations used therein......

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