Perry, Tamar v Esculier, Bonnet Servane Michele Thais

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeSimon Thorley IJ
Judgment Date30 October 2020
Date30 October 2020
Docket NumberSummonses Nos 55, 62 and 64 of 2020

[2020] SGHC(I) 22

Singapore International Commercial Court

Simon Thorley IJ

Summonses Nos 55, 62 and 64 of 2020

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

Yee Mun Howe Gerald, Boey Swee SiangandJonathan Lim Shi Cao (Premier Law LLC) for the plaintiffs;

Colin Liew (Essex Court Chambers Duxton (Singapore Practice Group)) (instructed), Kam Su Cheun Aurill, Valerie Thio Shu Jun, Lim Rui Hsien Esther (Legal Clinic LLC) for the defendants.

Case(s) referred to

Commonwealth of Australia v Peacekeeper International FZC UAE [2008] EWHC 1220 (refd)

De La Rue v Hernu, Peron & Stockwell, Ltd [1936] 2 KB 164 (refd)

Precious Shipping Public Co Ltd v OW Bunker Far East (Singapore) Pte Ltd [2015] 4 SLR 1229 (folld)

Regal Castings Ltd v Lightbody [2009] 2 NZLR 433; [2008] NZSC 87 (folld)

Teras Offshore Pte Ltd v Teras Cargo Transport (America) LLC [2016] 4 SLR 75 (refd)

Legislation referred to

Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) s 73B

Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 3 r 4, O 11, O 15 r 5, O 15 r 6, O 15 r 6(2)(b)(i), O 15 r 6(2)(b)(ii), O 17, O 17 r 5, O 17 r 5(1)(b), O 18 r 19, O 18 r 20, O 18 r 20(1)(a), O 56 r 2, O 110 r 1, O 110 r 1(1), O 110 r 1(2)(f), O 110 r 36, O 110 r 36(2)

Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) ss 18C, 28B

Conveyancing and Property Ordinance 1984 (Cap 219) (HK) s 60

Property Law Act 1952 (NZ) s 60

Civil Procedure — Further arguments — Plaintiffs seeking to present further arguments after hearing — Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed)

Civil Procedure — Interpleader — Third party initially availing itself of interpleader proceedings when faced with conflicting claims to moneys — Whether interpleader proceedings could only be brought in respect of property within jurisdiction — Rules of Court (Cap 322, R 5, 2014 Rev Ed)

Civil Procedure — Pleadings — Amendment — Plaintiffs seeking leave to amend existing Writ of Summons and Statement of Claim — Whether joinder of new party necessary for purpose of resolving interpleader dispute — Whether Plaintiffs should be allowed to raise new claim in pleadings — Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed)

Civil Procedure — Rules of court — Offshore case — Plaintiffs applying to have action classified as offshore case — Defendants disputing such classification and alternatively arguing that application was made out of time — Whether classification as offshore case should follow Singapore International Commercial Court Practice Directions — Whether extension should be granted for application

Civil Procedure — Striking out — Whether court had power to allow personal claims brought as part of interpleader proceedings — Nature and proper object of interpleader proceedings — Whether allowing personal claims under interpleader proceedings would circumvent safeguards on service out of jurisdiction and amount to abuse of process

[LawNet Editorial Note: The appeal in Civil Appeal No 12 of 2021 was dismissed by the Court of Appeal on 4 August 2021. See [2021] SGCA(I) 5.]

Facts

The plaintiffs (“Plaintiffs”) and defendants (“Defendants”) were investors in funds administered by a group of companies trading under the name “Lexinta”. The activities of these companies appeared to have been directed by a Spanish citizen resident in Switzerland, Bismark Antonio Badilla Rivera (“Badilla”). The first plaintiff asserted that Badilla, through the Lexinta group, was running a fraudulent Ponzi scheme.

The Defendants were, apparently, relatively early investors in the scheme. Following demands made on the Defendants' behalf, sums amounting to around US$10m were credited by Lexinta to the first defendant's bank account with DBS Bank Ltd (“DBS”) in Singapore (the “Disputed Moneys”). Around this period of time, the Plaintiffs (and persons from whom they derived title) claimed to have deposited in excess of US$24m with Lexinta. It was also claimed that Lexinta dissipated it as part of the Ponzi scheme to earlier investors including the Defendants.

Both the Plaintiffs and the Defendants subsequently asserted their rights to the Disputed Moneys. This resulted in DBS availing itself of interpleader proceedings. The present suit was commenced as a result of those interpleader proceedings.

In these summonses, the Defendants sought to strike out a claim relating to unjust enrichment in the Statement of Claim. The Plaintiffs, on the other hand, sought leave to amend the Statement of Claim to include a third alternative claim and to join Lexinta Group Ltd, a Hong Kong company, as a defendant in the action. The Plaintiffs also sought a declaration that this was an offshore case.

Held, allowing the applications in part:

(1) Interpleader proceedings were a statutory creation of limited nature. The object of such proceedings was only to assist a mere custodian of property to identify to whom it owed liability in relation to that property. The property in question had to be property over which the court was able to exercise jurisdiction. Once jurisdiction was established, there was no requirement that the custodian should seek leave to serve the proceedings out of the jurisdiction on any of the claimants: at [44].

(2) The present action was not a freestanding action and had been commenced for the limited statutory purpose of seeking to resolve rival claims to the ownership of the property: at [47].

(3) The claim in unjust enrichment was a personal claim. The court did not have the power to allow it to be brought as part of interpleader proceedings: at [49] and [50].

(4) As the Defendants were foreign nationals, to allow the claim in unjust enrichment would allow the Plaintiffs to circumvent the requirement of seeking leave to serve out of jurisdiction: at [51].

(5) The claim in unjust enrichment was therefore ordered to be struck out: at [52].

(6) Leave was granted to amend and clarify various particulars relating to the propriety claim to the Disputed Moneys: at [53].

(7) Leave to join Lexinta Group Ltd as a party to the action was not granted. The presence of Lexinta Group Ltd was not necessary for the purpose of resolving the interpleader dispute: at [54] to [56].

(8) Even if there had been a valid basis for concluding that there was an issue involving Lexinta Group Ltd to be raised, the court held that it would not have been just and convenient to join it to the proceedings. There was no evidence of it being a company of substance or of officers being available and capable of conducting proceedings: at [61].

(9) Thirdly, the court refused to grant leave to amend the Statement of Claim to invoke s 73B of the Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) or its equivalent under the law of Hong Kong (s 60 of the Conveyancing and Property Ordinance 1984 (Cap 219) (HK)). Such a claim was personal in nature and could not be brought in interpleader proceedings: at [57] to [60].

(10) In relation to the declaration that this case was an offshore case, the court began by holding that the requirements under O 110 r 1(2)(f)(i) and O 110 r 1(2)(f)(ii) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) were disjunctive requirements: at [65] and [66].

(11) The only connection to Singapore in this case was that the Disputed Moneys were held in a Singapore bank account: at [72] and [73].

(12) The guidelines in the Singapore International Commercial Court (“SICC”) Practice Directions para 29(3)(c) suggested that this was of itself insufficient to constitute the necessary substantial connection. The court rejected the argument that this guideline was only appropriate in cases such as Mareva injunctions or funding through Singapore banks as no rational distinction could be drawn in this regard. Consequentially, the court held that the action was an offshore case: at [74] and [75].

(13) While the application for an offshore case had been made over three months too late, the court exercised its discretion and granted an extension of time for the application. This was because by the time the action had been transferred to the SICC, the pleadings had already closed, and the 28-day period for application had already expired: at [76] and [79].

30 October 2020

Simon Thorley IJ:

Introduction

1 This judgment relates to three summonses in this action. The first, SIC/SUM 55/2020 dated 7 August 2020, is brought by the plaintiffs (“Plaintiffs”) seeking leave to amend the Writ and Statement of Claim. The second, SIC/SUM 62/2020, dated 28 August 2020 is brought by the defendants (“Defendants”) seeking an order that certain paragraphs of the existing Statement of Clam should be struck out. Since the two raise a common issue it was convenient to hear the two together.

2 The third summons, SIC/SUM 64/2020 dated 2 September 2020 is brought by the Plaintiffs seeking a decision pursuant to O 3 r 4 and O 110 r 36 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”) that this case is an “Offshore case”.

3 The summonses were heard together at a hearing on 25 September 2020. At the conclusion of the hearing I indicated that leave to amend the Writ and the Statement of Claim (in certain respects) would not be granted, and that the application to strike out succeeded. Further, I acceded to the request that this case be designated an Offshore case. These are my reasons for those decisions.

Background

4 For the purposes of these applications the background facts and allegations can be recited relatively briefly. The full facts will have to be ascertained at trial.

5 Both the Plaintiffs and Defendants were investors in funds administered by a group of companies trading under the name “Lexinta”. The activities of these companies appear to have been directed by a Spanish citizen resident in Switzerland, Bismark Antonio Badilla Rivera (“Badilla”). In her affidavit dated 6 August 2020, the first plaintiff (“TP”) asserts that Badilla, through the Lexinta group, was running a fraudulent...

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