TAMAR PERRY & Anor v BONNET ESCULIER SERVANE MICHELE THAIS & Anor

"The Plaintiffs’ claim is that a Ponzi scheme was being conducted by Badilla from before the time when the Esculiers first invested in April 2014 and that, accordingly, none of the money transferred to Lexinta by the Esculiers was ever invested notwithstanding the documentation that was provided by Badilla purporting to demonstrate that individual investments that were made." — Per Simon Thorley IJ, Para 81

Case Information

• Citation: [2022] SGHC(I) 10 (Para 1)
• Court: Singapore International Commercial Court (Para 1)
• Date: 15 July 2022 (Para 1)
• Coram: Simon Thorley IJ (Para 1)
• Case Number: Suit No 4 of 2020 (Para 1)
• Area of Law: Conflict of Laws; Choice of law; Equity; Property; Trusts; Constructive trusts; Recipient liability; Proprietary liability; Resulting trusts (Para 1)
• Counsel for the Plaintiffs: Not answerable from the supplied extraction (NOT ANSWERABLE)
• Counsel for the Defendants: Not answerable from the supplied extraction (NOT ANSWERABLE)
• Judgment Length: Not answerable from the supplied extraction (NOT ANSWERABLE)

Summary

This judgment concerns a dispute over monies transferred through Lexinta-related accounts, where the Plaintiffs alleged that the Defendants had received repayments funded by a fraudulent investment operation rather than genuine investment returns. The court described the Plaintiffs’ case as one in which Badilla had been operating a Ponzi scheme and the sums paid into Lexinta were never truly invested, but were instead dissipated to earlier investors, including the Defendants. The dispute therefore turned on tracing, the status of LGL within the Lexinta structure, and the governing law applicable to the parties’ dealings. (Para 3, Para 5, Para 81)

The factual setting was elaborate and international. The Defendants had invested first, beginning in April 2014, under the Esculier AMA, and later received substantial repayments into a DBS account in Singapore between August 2016 and February 2017. The Plaintiffs, or persons from whom they derived title, later deposited more than US$24 million with Lexinta between April 2016 and August 2017 and contended that those monies were used to pay earlier investors as part of the same scheme. The court also noted that the Plaintiffs discovered the transfers to the Defendants’ DBS account through Hong Kong discovery proceedings, after which DBS froze the account. (Para 3, Para 8, Para 82)

The excerpt shows the court working through a series of interlocking issues: whether Badilla was operating a Ponzi scheme and, if so, when it began; what the status of LGL was in relation to the Esculier dealings and the Plaintiffs’ later dealings; whether Swiss law or Hong Kong law governed; and whether the JL Transfer was for TP’s benefit. The court also recorded the Defendants’ position that LGL formed part of Lexinta and that the payments were made in discharge of Lexinta’s obligations, while the Plaintiffs maintained that the transfers were traceable to their own funds. The supplied text ends before the final dispositive reasoning and orders, so the ultimate outcome is not included in the extraction. (Para 74, Para 75, Para 80, Para 82)

How did the court describe the factual and procedural background of the dispute?

The court began by situating the case within a broader sequence of investment, repayment, discovery, and freezing of funds. It recorded that the Defendants invested through the Esculier AMA from April 2014 and later sought repayment in late 2015, with sums totalling around US$10 million being credited to their DBS account in Singapore between August 2016 and February 2017. It then explained that the Plaintiffs, or persons from whom they derived title, deposited in excess of US$24 million with Lexinta between April 2016 and August 2017 and alleged that those monies were not invested as promised but were instead dissipated to earlier investors. (Para 3)

"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." — Per Simon Thorley IJ, Para 3

The procedural posture also mattered. The court noted that DBS, faced with conflicting claims to the funds in the account, commenced interpleader proceedings under Order 17 of the Rules of Court by Originating Summons. Those proceedings were brought in the Singapore High Court and named the first Defendant in this suit, Mrs Bonnet Esculier Servane Michele Thais, TP, and YB as defendants. The present suit therefore sat against the backdrop of a prior interpleader process concerning the same funds. (Para 7, Para 8)

"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)." — Per Simon Thorley IJ, Para 7

The court also recorded that the Plaintiffs discovered the transfers to the Defendants’ DBS account through Hong Kong discovery proceedings and that DBS froze the account. That factual sequence was important because it explained how the Plaintiffs came to assert a proprietary claim over monies already paid out to the Defendants. The excerpt indicates that the court treated the discovery history as part of the evidential matrix for the tracing claim. (Para 3, Para 8)

What were the competing theories of the case advanced by the Plaintiffs and the Defendants?

The Plaintiffs’ theory was straightforward in its essentials, though complex in its factual and legal implications. They alleged that Badilla had been operating a Ponzi scheme from before the time the Esculiers first invested in April 2014, that the Defendants’ investments were not genuine, and that any returns on those alleged investments were fake. On that footing, the Plaintiffs contended that the monies transferred to the Defendants were in truth their own monies, routed through Lexinta and then paid out to earlier investors. (Para 74, Para 81)

"That at all material times Badilla was operating a Ponzi scheme. That the Defendants’ investments were not genuine and that any returns on their alleged investments were fake." — Per Simon Thorley IJ, Para 74(a)–(b)

The Defendants’ position was materially different. They contended that LGL formed part of Lexinta and, together with the other members of the group, served the needs of investors. They further maintained that, to the extent LGL received funds, that receipt was for and on behalf of, or reasonably regarded as being for and on behalf of, the Lexinta group. In addition, they asserted that all obligations between Lexinta and the Plaintiffs, between Lexinta and the Defendants, and between the Plaintiffs and the Defendants were governed by Swiss law. (Para 75(c), Para 75(g))

"That LGL formed part of Lexinta and, together with the other members of the group, served the needs of the investors. Further, to the extent that LGL received funds, such receipt was “for and on behalf of (or reasonably regarded as being for and on behalf of) Lexinta Group”." — Per Simon Thorley IJ, Para 75(c)

The court also recorded the Defendants’ position in relation to the governing law issue. Their case was that Swiss law governed all obligations between the relevant parties. That contention was central because the legal consequences of the alleged scheme, the characterization of the transfers, and the proprietary claims could differ depending on whether Swiss law or Hong Kong law applied. The excerpt shows the court treating choice of law as one of the principal issues requiring determination. (Para 75(g), Para 80)

"That all obligations between Lexinta and the Plaintiffs; between Lexinta and the Defendants; and between the Plaintiffs and the Defendants, are governed by Swiss law." — Per Simon Thorley IJ, Para 75(g)

How did the court approach the evidence, and what did it make of the documentary record?

The court placed substantial weight on the contemporaneous documents, including the Asset Management Agreements, transfer records, and trading reports. It described the cross-examination of BE as lengthy, robust, very detailed, and focused closely on the minutiae of the text of various documents. That description indicates that the court treated the documentary record as central, and that the oral evidence was tested against the written materials rather than considered in isolation. (Para 22)

"The cross-examination of BE by Mr Chaisty (“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." — Per Simon Thorley IJ, Para 22

The court also noted that the trading reports referred to in BE’s affidavit were consistent with a thriving business. That observation is significant because it shows that, at least on the face of the documents, the investment operation appeared legitimate and active. The court did not treat the existence of trading reports as conclusive proof of genuine investment activity, but it did regard them as part of the evidential picture that had to be reconciled with the Plaintiffs’ allegation of a Ponzi scheme. (Para 44)

"The trading reports referred to in paragraph 52 of BE’s AEIC (as reproduced above) are thus consistent with a thriving business." — Per Simon Thorley IJ, Para 44

At the same time, the court was careful to distinguish appearance from substance. The Plaintiffs’ case was that the documentation provided by Badilla purported to show individual investments, but those investments were never in fact made. The court’s analysis therefore had to test whether the documents reflected real investment activity or merely the outward trappings of a fraudulent scheme. The excerpt shows the court moving toward the latter conclusion by 2016, at least for the purposes of the scheme’s operation. (Para 81, Para 82)

What did the court say about the existence and timing of a Ponzi scheme?

The Ponzi scheme issue was the factual and legal fulcrum of the case. The court framed the question as whether Badilla was operating a Ponzi scheme when the Esculiers were repaid, and if so, when the scheme commenced. The Plaintiffs bore the onus of proving the starting date, and the court expressly noted that the issue of timing mattered because it affected whether the Plaintiffs’ funds could be traced into the payments made to the Defendants. (Para 80, Para 82)

"It is accepted that the onus of proving a starting date lies on the Plaintiffs." — Per Simon Thorley IJ, Para 82

The court’s key factual finding, as far as the supplied excerpt goes, was that such a scheme was in operation by 2016. It reached that conclusion because the sums paid by the Plaintiffs to LGL were never invested but were paid directly out, inter alia, to the Esculiers. That finding is the clearest statement in the extraction of the court’s reasoning on the scheme issue, and it links the Plaintiffs’ later payments to the earlier repayments received by the Defendants. (Para 82)

"I am satisfied that such as scheme was in operation by 2016 as it is clear that the sums paid by the Plaintiffs to LGL were never invested but were paid directly out, inter alia, to the Esculiers." — Per Simon Thorley IJ, Para 82

The court also observed that it was not until November 2017 that it was first publicly suggested that Badilla might be running a Ponzi scheme, when two articles appeared in Swiss publications, and that investigations had first been commenced by the Swiss Public Prosecutor’s Office following a complaint made by a Mordechai Fishman on 31 August 2017. Those facts were relevant to the chronology of discovery and public allegation, but they did not displace the court’s own finding that the scheme was already operating by 2016. (Para 83, Para 82)

"It was not until November 2017 that it was first publicly suggested that Badilla might be running a Ponzi scheme, when two articles appeared in Swiss publications. Investigations had, however, first been commenced by the Swiss Public Prosecutor’s Office following a complaint made by a Mordechai Fishman on 31 August 2017." — Per Simon Thorley IJ, Para 83

What was the status of LGL in relation to the Esculier dealings and the Plaintiffs’ later dealings?

The status of LGL was a central issue because the Plaintiffs’ tracing claim depended on the route by which funds moved through the Lexinta structure. The court framed the question as what the status of LGL was with regard to the Esculiers’ dealings under the Esculier AMA and with regard to the Plaintiffs’ dealings under the SRE AMA or the BGNIC AMA. That framing shows that the court was not simply asking whether LGL was a bank account or a company, but whether it functioned as part of the relevant contractual and proprietary structure. (Para 80)

"The issues that arise for decision can best be considered in the following order: (a) Was Badilla operating a Ponzi scheme when the Esculiers were repaid? If so, when did the scheme commence? (b) What is the status of LGL: (i) With regard to the Esculiers’ dealings under the Esculier AMA? (ii) With regard to the Plaintiffs’ dealings under the SRE AMA or the BGNIC AMA?" — Per Simon Thorley IJ, Para 80

The court noted that there was no suggestion, nor any reason to believe, that BE’s attention had been drawn before the Esculiers asked to have the proceeds of their investment returned to them to the fact that, although each page of the agreement carried the heading in bold capitals “LEXINTA GROUP”, there was a company within Lexinta called “Lexinta Group Limited” which was not a party to the Esculier AMA. This observation is important because it shows the court’s focus on the parties’ practical understanding of the contractual documents and the extent to which corporate distinctions were, or were not, appreciated at the time. (Para 32)

"More specifically, there was no suggestion – nor any reason to believe – that BE’s attention had been drawn, at any time before the Esculiers asked to have the proceeds of their investment returned to them, to the fact that, although each page of the agreement carried the heading in bold capitals “LEXINTA GROUP”, there was a company within Lexinta called “Lexinta Group Limited” (ie, LGL) which was not a party to the Esculier AMA." — Per Simon Thorley IJ, Para 32

The significance of that finding is that the court was willing to accept that the parties proceeded on a broader “Lexinta group” understanding rather than a precise entity-by-entity analysis. That mattered both for the Defendants’ argument that LGL formed part of Lexinta and for the Plaintiffs’ attempt to trace funds through the structure. The excerpt suggests that the court treated the parties’ understanding as a factual matter informed by the documents and the surrounding conduct. (Para 32, Para 75(c))

How did the court treat the parties’ understanding of the Lexinta structure and the Asset Management Agreements?

The court’s analysis of the agreements was not confined to formal labels. It examined how the parties understood the structure in practice, including whether they were dealing with a group of entities or with a single legal person. The Defendants argued that LGL formed part of Lexinta and served the needs of investors, while the court noted that BE had not been drawn to the distinction between the group heading and the separate company LGL before the repayment request arose. That factual context supported the court’s willingness to look beyond the face of the documents to the commercial reality as understood by the parties. (Para 32, Para 75(c))

The court also accepted that BE’s cross-examination was detailed and focused on the minutiae of the text of the documents. That suggests that the court was attentive to the precise wording of the AMAs, but it did not treat textual precision as displacing the broader factual question of how the parties actually operated. The issue was therefore not merely what the documents said, but how they were used and understood in the course of the dealings. (Para 22, Para 32)

"The cross-examination of BE by Mr Chaisty (“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." — Per Simon Thorley IJ, Para 22

On the Plaintiffs’ side, the court recorded that they claimed title through persons who had deposited funds with Lexinta and that those funds were later dissipated to earlier investors. That claim necessarily depended on the contractual and structural relationship between the Plaintiffs, Lexinta, and LGL. The excerpt does not include the final legal characterization of that relationship, but it shows the court treating the structure as central to the tracing and proprietary analysis. (Para 3, Para 5, Para 80)

What did the court say about the governing law, and why did it matter?

Choice of law was one of the principal issues identified by the court. The Defendants contended that all obligations between Lexinta and the Plaintiffs, between Lexinta and the Defendants, and between the Plaintiffs and the Defendants were governed by Swiss law. The court’s issue list also expressly asked what the consequences would be if Swiss law applied and what the consequences would be if Hong Kong law applied. That framing shows that the governing law question was not peripheral; it was integral to the legal characterization of the claims. (Para 75(g), Para 80)

"That all obligations between Lexinta and the Plaintiffs; between Lexinta and the Defendants; and between the Plaintiffs and the Defendants, are governed by Swiss law." — Per Simon Thorley IJ, Para 75(g)

The court also identified the case headings as involving conflict of laws, choice of law in equity, and choice of law in property. Those headings indicate that the governing law issue was not limited to contract, but extended to equitable and proprietary questions, including constructive trusts, recipient liability, proprietary liability, and resulting trusts. The excerpt does not set out the final choice-of-law analysis in full, but it makes clear that the court was required to determine which legal system governed the obligations and proprietary consequences arising from the transfers. (Para 1, Para 80)

Because the Plaintiffs’ case was that the monies transferred to the Defendants were in law their monies, the governing law question had direct consequences for whether the Plaintiffs could assert proprietary rights, trace into the Defendants’ account, and resist the Defendants’ claims to the funds. The Defendants’ position that Swiss law governed was therefore a substantive defence to the proprietary claim, not merely a procedural objection. The excerpt shows the court treating this as a major issue to be resolved after the factual questions about the scheme and the structure. (Para 75(g), Para 80, Para 5)

What role did the Hong Kong and Swiss proceedings play in the court’s reasoning?

The court referred to Hong Kong discovery proceedings as the means by which the Plaintiffs discovered the transfers to the Defendants’ DBS account. That fact is important because it explains how the Plaintiffs came to identify the relevant transfers and mount their claim. The court also referred to Swiss public and prosecutorial developments, including the first public suggestion in November 2017 that Badilla might be running a Ponzi scheme and the commencement of investigations by the Swiss Public Prosecutor’s Office following a complaint on 31 August 2017. These events formed part of the broader factual matrix surrounding the alleged fraud. (Para 3, Para 83)

"It was not until November 2017 that it was first publicly suggested that Badilla might be running a Ponzi scheme, when two articles appeared in Swiss publications. Investigations had, however, first been commenced by the Swiss Public Prosecutor’s Office following a complaint made by a Mordechai Fishman on 31 August 2017." — Per Simon Thorley IJ, Para 83

The court’s reference to the Swiss investigation appears to have supported its assessment of the chronology and plausibility of the Ponzi scheme allegation. However, the excerpt does not show the court treating the Swiss proceedings as determinative of the issues before it. Rather, they were part of the evidential background against which the court assessed the Plaintiffs’ claim that the scheme was already in operation by 2016. (Para 82, Para 83)

Similarly, the Hong Kong discovery proceedings were relevant because they led to the identification of the transfers and the freezing of the DBS account. That procedural history helped explain why the dispute came before the Singapore court in the form it did, with competing claims to the same funds and an interpleader backdrop. The excerpt does not provide the Hong Kong court’s reasoning, but it does show that the Singapore court treated the Hong Kong proceedings as part of the chain of events leading to the present suit. (Para 3, Para 7, Para 8)

What did the court say about the Defendants’ counterclaim and the cross-undertakings?

The excerpt records that the Defendants sought damages under the cross-undertakings given by the Plaintiffs in orders made in OS 1016 on 10 January 2020 and 17 March 2020, as well as in the relevant orders of court. This indicates that the Defendants were not only resisting the Plaintiffs’ proprietary claim but also pursuing affirmative relief for losses allegedly caused by the freezing or restraint of the funds. The court’s issue list included the consequences if the Defendants were entitled to damages under the cross-undertakings, showing that this was a live and material question. (Para 75(m), Para 80)

"By the Counterclaim the Defendants seek an award of damages under the cross-undertakings given by the Plaintiffs in orders made in OS 1016 on 10 January 2020 and 17 March 2020, HC/ORC 1066/2020 (the Order referenced at [9] above) and HC/ORC 1975/2020." — Per Simon Thorley IJ, Para 75(m)

The supplied text does not include the court’s final determination of the counterclaim or any assessment of damages. Accordingly, while the existence of the counterclaim is clear, the quantum and outcome are not answerable from the extraction. What can be said is that the court treated the cross-undertakings as part of the overall remedial landscape, alongside the proprietary and choice-of-law issues. (Para 75(m), Para 80)

That remedial context is important for practitioners because it shows how interpleader, freezing relief, and cross-undertakings can intersect in a multi-party tracing dispute. The excerpt indicates that the court was alive to the possibility that whichever party ultimately failed on the proprietary claim might still face liability for losses caused by interim relief. (Para 7, Para 75(m), Para 80)

Why does this case matter for tracing, constructive trusts, and cross-border fraud disputes?

This case matters because it illustrates how a court may approach a tracing claim where the alleged fraud is embedded in a cross-border investment structure and the disputed funds have passed through multiple entities and jurisdictions. The Plaintiffs’ case was that the monies they paid were not invested at all, but were instead used to pay earlier investors, including the Defendants. That is a classic factual setting in which proprietary claims, recipient liability, and constructive trust arguments arise. (Para 3, Para 1, Para 5)

"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." — Per Simon Thorley IJ, Para 5

The case is also significant because it shows the importance of identifying the true legal status of entities within a group structure. The court’s discussion of LGL, the Lexinta group heading, and the parties’ practical understanding demonstrates that formal corporate distinctions may not be decisive if the evidence shows that the parties dealt with the structure as a whole. For lawyers, that has obvious implications for drafting, due diligence, and the framing of proprietary claims in fraud cases. (Para 32, Para 75(c))

Finally, the case is important because it highlights the interaction between factual findings about a Ponzi scheme and the legal consequences that follow from those findings. The court’s statement that such a scheme was in operation by 2016, coupled with its observation that the Plaintiffs’ funds were never invested but paid out to earlier investors, is the kind of finding that can determine whether tracing succeeds, whether recipients are liable, and whether interim relief should be maintained or compensated. Even though the excerpt ends before the final orders, the reasoning already shows the case’s practical significance. (Para 82, Para 83, Para 75(m))

Cases Referred To

Legislation Referenced

• Rules of Court (Cap 332, R 5, 2014 Rev Ed), Order 17 — interpleader proceedings (Para 7, Para 8)
• Rules of Court (Cap 332, R 5, 2014 Rev Ed), Order 17 Rule 5(1)(b) — referenced in the order made in OS 1016 (Para 8)

Source Documents

• Original Judgment — Singapore Courts
• Archived Copy (PDF) — Litt Law CDN
• View in judgment: "It is accepted that the onus..."

This article analyses [2022] SGHCI 10 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.