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

• Jurisdiction: Singapore
• Judge: Simon Thorley IJ
• Judgment Date: 30 October 2020
• Neutral Citation: [2020] SGHC(I) 22
• Plaintiff Counsel: Yee Mun Howe Gerald, Boey Swee Siang and Jonathan Lim Shi Cao (Premier Law LLC)
• Date: 30 October 2020
• Docket Number: Summons No 55 of 2020; Summons No 62 of 2020; Summons No 64 of 2020
• Hearing Date: 25 September 2020
• Subject Matter: Amendment,Civil Procedure,Further arguments,Striking out,Interpleader,Pleadings,Rules of court,Offshore case
• Published date: 04 November 2020
• Defendant Counsel: 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)
• Citation: [2020] SGHC(I) 22
• Court: International Commercial Court (Singapore)
• Year: 2020

Simon Thorley IJ: Introduction

This judgment relates to three Summonses in this action. The first, SIC/SUM 55/2020 dated 7 August 2020, is brought by the 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 seeking an order that certain paragraphs of the existing Statement of Clam should be stuck out. Since the two raise a common issue it was convenient to hear the two together.

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 332, R 5, 2014 Rev Ed) (“ROC”) that this case is an “Offshore case”.

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

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.

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 Ponzi scheme.

The Defendants, both French citizens, were, apparently, relatively early investors in the scheme in April 2014. The agreed date for return of the fruits of this investment was in April 2016 and, 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 by Lexinta to the first Defendant’s 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, assert that they deposited in excess of US$24 million with Lexinta (the “Plaintiffs’ fund”) and that instead of investing that fund as agreed, Lexinta dissipated it as part of the Ponzi scheme to earlier investors including the Defendants.

In March 2018, TP and another person, 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 the fraudulent Ponzi scheme. This order resulted in TP becoming aware of the sums paid by Lexinta to the first Defendant’s DBS bank account. The Plaintiffs assert that those sums were the result of a back-to-back transfer by Lexinta of some of the Plaintiffs’ fund such that, in law, those sums belonged 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. In consequence, at some date thereafter, DBS froze the Singapore bank account.

In April 2018, Badilla was arrested in Switzerland and is now awaiting trial for fraud on the basis that he had been operating a Ponzi scheme.

It was not, however, until March 2019 that the Defendants became aware that the funds in the DBS Singapore 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 to the Disputed Monies, DBS availed itself of the interpleader proceedings provided for by O 17 ROC. The Editorial Introduction to that Order in the Singapore Civil Procedure 2020 vol 1 (Chua Lee Ming gen ed) (Sweet & Maxwell, 2020) (“Singapore Civil Procedure”) reads:

Interpleader is a proceeding by which a person, from whom two or more persons claim the same property or debt, and who does not himself claim the property or dispute the debt, can protect himself from legal proceedings by calling upon the two claimants to interplead, that is to say, claim against one another, so that the title to the property or debt may be decided by the court.

Such a procedure can only be invoked in relation to property, such as the Disputed Monies, which is located in Singapore and the persons claiming to own the property can be brought before the courts in Singapore regardless of their nationality or place of residence. There is no requirement to obtain leave to serve interpleader proceedings out of the jurisdiction. The fact that a party has laid claim to the property in question is sufficient to justify making that person a party to the proceedings.

Interpleader proceedings have to be commenced by an Originating Summons (“OS”) and DBS did this in the Singapore High Court on 8 August 2019. HC/OS 1016/2019 (“OS 1016”) naming the first Defendant (“SEB”), TP and YB as the first, second and third defendants respectively.

OS 1016 first came on for hearing before Judicial Commissioner Dedar Singh Gill (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 the Order of 30 January 2020, which was made pursuant to O 17 r 5(1)(b) ROC provided: 2. The 1st Defendant [SEB] and the 2nd Defendant [TP] shall proceed to have their respective claims to the Disputed Monies determined, with the 2nd Defendant [TP] to be the plaintiff in such further proceedings (the “Further Proceedings”) and the 1st Defendant [SEB], the defendant. The 3rd Defendant [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 by 31 January 2020. Orders were made for a cross-undertaking in damages from TP and for security for costs and paragraph 7 dispensed with DBS’s attendance at any further hearings of the Further Proceedings. Finally, paragraph 8 reserved the costs of the OS and paragraph 9 gave all parties liberty to apply.

The effect of the Order was thus to direct that a new action (the “new action”) should be commenced involving the parties to the OS who maintained a claim to the Disputed Monies, TP and SEB. This would serve to determine who was the legal owner of the Disputed Monies without involving DBS. Once the claims in the new action were resolved, the OS could be restored under the liberty to apply provision so that DBS could be directed to pay the Disputed Monies to the successful party, any claims under the cross-undertaking could be considered and the issue of the costs of the OS resolved.

Again, there was no requirement for leave to serve the writ in the new action on SEB out of the jurisdiction. The creation of the new action was justified on the basis of the presence of the property, the Disputed Monies, in Singapore and was thus a creature of O 17 ROC, commenced for the purpose of resolving the competing claims without DBS incurring any further expense. It was, in effect, a proceeding within the interpleader proceedings to enable the interpleader proceedings to be resolved quickly and efficiently.

Thereafter a measure of confusion arose because TP did not commence a new action but sought to file a Statement of Claim in the OS. The OS returned before Gill JC on 17 March 2020 when he ordered that SEB’s husband, the second Defendant (“JE”), be added as a party to the OS as the fourth Defendant and Solid Fund Private Foundation, (“SFPF”) a Curacao company controlled by TP, should be added as the fifth Defendant to the OS.

By paragraph 2 of the Order, TP was ordered to commence a suit against SEB and JE by “filing and serving a Writ of Summons, attaching the Statement of Claim dated 12 February 2020 (as originally filed in OS 1016) (the “Suit”)”. Paragraph 4 was in the following terms: 4. The Statement of Claim dated 12 February 2020 filed in the Suit be amended according to the draft annexed to HC/SUM/901/2020 (the “Amended Statement of Claim”), and the Amended Statement of Claim be filed and served by 20 March 2020; …

The Order made further provisions in relation to the cross-undertaking and security for costs consequent upon the joinder of SFPF and ordered that a defence be served in the Suit by 3 April 2020.

There was apparently no discussion at that hearing concerning the contents of the Amended Statement of Claim, which in fact included not only details of the proprietary claim to the disputed monies made by TP and SFPF but also included a claim against SEB and JE personally on the basis of unjust enrichment.

On 19 March 2020 the writ in the new action was issued in the High Court (HC/S 259/2020) naming TP and SFPF as Plaintiffs and SEB and JE as Defendants. The Amended Statement of Claim was served on 20 March 2020, which included in paragraph 39 a claim in unjust enrichment.

Claim in unjust enrichment

33. 39. Further or alternatively, the Plaintiffs have has a claim in restitution based on the Defendants' unjust enrichment in respect of the US$10,240,843.69 US$1,499,588 to the detriment of the Plaintiffs.

The Defence and Counterclaim of both Defendants was served on 3 April 2020. Paragraphs 2 and 30–32 read as follows: 2. This Defence and Counterclaim is filed without prejudice to: (a) the Defendants’ right to amend the Defence and Counterclaim after further and better particulars of the Amended SOC, discovery and/or the administration of interrogatories; and (b) the Defendants’ position that the Plaintiffs’ claims are scandalous frivolous, vexatious and/or disclose no reasonable cause(s) of action, and/or are...