Zage v Rasif: Dishonest Assistance & Knowing Receipt in Money Laundering via Precious Stones
George Raymond Zage III and Kaori Kathleen Zage sued Rasif David, Ho Chi Kwong, Jewels Defred Pte Ltd, and Lim Soon Kiang in the High Court of Singapore on 30 December 2008, alleging dishonest assistance and knowing receipt of misappropriated funds. The plaintiffs claimed that Rasif David, their lawyer, misappropriated their money intended for a property purchase. The court dismissed the claims against Ho Chi Kwong and Jewels Defred Pte Ltd, finding no dishonest assistance or knowing receipt. However, the court found Lim Soon Kiang liable for dishonest assistance and granted judgment in favor of the plaintiffs.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiffs' claims against the fourth and fifth defendants (Ho Chi Kwong and Jewels DeFred Pte Ltd) are dismissed. Judgment in favor of the Plaintiffs against the sixth defendant (Lim Soon Kiang).
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Plaintiffs sue for dishonest assistance and knowing receipt after lawyer misappropriates funds. Court finds one defendant liable for assisting.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| George Raymond Zage III | Plaintiff | Individual | Claims against fourth and fifth defendants dismissed; judgment against sixth defendant. | Partial | Harry Elias, Melanie Ho, Chang Man Phing, Agnes Chan |
| Kaori Kathleen Zage | Plaintiff | Individual | Claims against fourth and fifth defendants dismissed; judgment against sixth defendant. | Partial | Harry Elias, Melanie Ho, Chang Man Phing, Agnes Chan |
| Rasif David | Defendant | Individual | Other | ||
| Rohaya binte Mohamed Yassin | Defendant | Individual | Other | ||
| Moothy s/o Appudurai | Defendant | Individual | Other | ||
| Ho Chi Kwong | Defendant | Individual | Claim Dismissed | Dismissed | Hri Kumar Nair, Gary Low, Wilson Wong |
| Jewels Defred Pte Ltd | Defendant | Corporation | Claim Dismissed | Dismissed | Hri Kumar Nair, Gary Low, Wilson Wong |
| Lim Soon Kiang | Defendant | Individual | Judgment for Plaintiff | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Woo Bih Li | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Harry Elias | Harry Elias Partnership |
| Melanie Ho | Harry Elias Partnership |
| Chang Man Phing | Harry Elias Partnership |
| Agnes Chan | Harry Elias Partnership |
| Hri Kumar Nair | Drew & Napier LLC |
| Gary Low | Drew & Napier LLC |
| Wilson Wong | Drew & Napier LLC |
4. Facts
- Plaintiffs engaged David Rasif & Partners for a property purchase.
- David Rasif misappropriated $11,327,408 from the Law Firm’s client’s account.
- Jewels DeFred Pte Ltd received $2,088,000 from David Rasif for precious stones.
- Lim Soon Kiang received US$620,000 from David Rasif.
- Lim Soon Kiang opened a bank account in Ho Chi Minh City at David Rasif's request.
- Lim Soon Kiang handed over US$500,000 in cash to Nick at Sofitel Hotel in Ho Chi Minh City.
- DeFred's staff knew DR was keen to make purchases.
5. Formal Citations
- George Raymond Zage III and Another v Rasif David and Others, Suit 375/2006, [2008] SGHC 244
6. Timeline
| Date | Event |
|---|---|
| Plaintiffs granted an option to purchase 35 Belmont Road. | |
| Plaintiffs engaged the law firm of David Rasif & Partners to act for them in the purchase. | |
| Plaintiffs exercised the option to purchase 35 Belmont Road. | |
| David Rasif became the sole proprietor of the Law Firm. | |
| David Rasif took over the transaction from David Tan. | |
| Plaintiffs issued a cheque in favour of the Law Firm for $10,658,240. | |
| David Rasif and another man visited DeFred's showroom. | |
| Thomas and Lynn made a presentation to David Rasif at the Law Firm. | |
| Between 31 May 2006 and 2 June 2006, David Rasif wrongfully withdrew $11,327,408 from the Law Firm’s client’s account. | |
| David Rasif transferred $1,818,000 to DeFred’s account. | |
| David Rasif visited DeFred's showroom and selected additional items. | |
| David Rasif issued a cash cheque for $270,000. | |
| First delivery of items to David Rasif at Mandarin Hotel coffee lounge. | |
| Lim Soon Kiang flew to Ho Chi Minh City. | |
| Ho encashed the Cash Cheque at Maybank. | |
| Second delivery of items to David Rasif at Trellis Towers. | |
| David Rasif was scheduled to fly to Bangkok. | |
| Lim Soon Kiang handed over US$500,000 in cash to Nick at Sofitel Hotel in Ho Chi Minh City. | |
| Plaintiffs commenced action against seven defendants. | |
| Plaintiffs' lawyers interviewed Lim Soon Kiang. | |
| Tran transferred US$51,000 to an account specified by the Plaintiffs’ then solicitors. | |
| Plaintiffs' lawyers interviewed Lim Soon Kiang, accompanied by his lawyer, Alain Jones. | |
| Judgment reserved. |
7. Legal Issues
- Dishonest Assistance
- Outcome: The court found that Lim Soon Kiang was liable for dishonest assistance.
- Category: Substantive
- Related Cases:
- [1995] 2 AC 378
- Knowing Receipt
- Outcome: The court did not find Jewels DeFred Pte Ltd liable for knowing receipt.
- Category: Substantive
- Constructive Trust
- Outcome: The court considered whether the defendants should be held liable as constructive trustees.
- Category: Substantive
8. Remedies Sought
- Constructive Trust
- Monetary Compensation
9. Cause of Actions
- Knowing Receipt
- Dishonest Assistance
10. Practice Areas
- Commercial Litigation
11. Industries
- Legal Services
- Retail
- Jewellery
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Barnes v Addy | N/A | No | (1874) LR 9 Ch App 244 | N/A | Cited for the principle that strangers can be held liable as constructive trustees if they participate in fraudulent conduct of the trustee. |
| Caltong (Australia) Pty Ltd v Tong Tien See Construction Pte Ltd | Court of Appeal | Yes | [2002] 3 SLR 241 | Singapore | Cited for setting out the elements of knowing receipt and dishonest assistance. |
| El Ajou v Dollar Land Holdings | N/A | No | [1994] 2 All ER 685 | N/A | Cited within Caltong (Australia) Pty Ltd v Tong Tien See Construction Pte Ltd for elements of knowing receipt. |
| Royal Brunei Airlines v Tan Kok Ming Philip | N/A | Yes | [1995] 2 AC 378 | N/A | Cited for the elements to establish dishonest assistance and elaborating on dishonesty. |
| Baden and others v Societe Generale pour Favoriser le Developpement du Commerce et de L’Industrie en France SA | N/A | No | [1993] 1 WLR 509 | N/A | Cited as an example of a five-fold categorisation of knowledge that has not been favoured in subsequent decisions. |
| BCCI (Overseas) Ltd v Akindele | N/A | No | [2001] Ch 437 | N/A | Cited for the single test of unconscionability in knowing receipt. |
| Rajabali Jumabhoy v Ameerali R Jumabhoy | Court of Appeal | No | [1998] 2 SLR | Singapore | Cited for the definition of a constructive trust and the importance of knowledge in establishing a constructive trust based on knowing receipt. |
| Carl Zeiss Stiftung v Herbert Smith & Co & Anor (No 2) | N/A | No | [1969] 2 Ch 276 | N/A | Cited for the concept of 'want of probity' as a useful touchstone in considering circumstances giving rise to constructive trusts. |
| Comboni Vincenzo and another v Shankar’s Emporium (Pte) Ltd | N/A | Yes | [2007] 2 SLR 1020 | N/A | Cited for the conclusion that conscience/probity is the proper test for a constructive trust. |
| Re Montagu’s Settlement Trusts | N/A | No | [1987] Ch 264 | N/A | Cited in Comboni Vincenzo and another v Shankar’s Emporium (Pte) Ltd for conscience/probity test for a constructive trust. |
| Twinsectra Ltd v Yardley and others | N/A | No | [2002] 2 All ER 377 | N/A | Discussed in relation to the test for dishonest assistance, specifically whether it is objective or a combined objective/subjective test. |
| Malaysian International Trading Corp Sdn Bhd v Interamerica Asia Pte Ltd & Ors | High Court | No | [2002] 4 SLR 537 | Singapore | Cited for adopting the combined tests in Twinsectra of an objective standard leavened by a subjective element based upon the characteristics and knowledge of the defendant. |
| Bansal Hermant Govindprasad and another v Central Bank of India | Court of Appeal | Yes | [2003] 2 SLR 33 | Singapore | Cited for clarifying that the pre-requisite of dishonesty is to be judged objectively. |
| Barlow Clowes International Ltd (in liquidation) and others v Eurotrust International Ltd and others | Privy Council | Yes | [2006] 1 All ER 377 | N/A | Cited for explaining Twinsectra as being no different from the principles stated in Royal Brunei Airlines and stressing that the standard of dishonesty is objective. |
| Manifest Shipping Co Ltd v Uni-Polaris Insurance Co Ltd | N/A | No | [2001] UKHL 1 | N/A | Cited within Barlow Clowes International Ltd (in liquidation) and others v Eurotrust International Ltd and others for the dishonest state of mind. |
| John and others v Dodwell and Company Limited | N/A | No | [1918] AC 563 | N/A | Discussed in relation to the liability of a beneficiary or payee of a cheque payment where an agent draws cheques for his own purposes on the respondents' funds. |
| Reckitt v Barnett, Pembroke and Slater Limited | N/A | No | [1929] AC 176 | N/A | Discussed in relation to the liability of a beneficiary or payee of a cheque payment where a solicitor used power of attorney to draw cheques on Reckitt’s bank account. |
| Nelson & Others v Larholt | N/A | No | [1948] 1 K.B. 339 | N/A | Discussed in relation to the liability of a beneficiary or payee of a cheque payment where an executor drew eight cheques in favour of a turf accountant. |
| Feuer Leather Corporation v Frank Johnston & Sons Ltd | N/A | No | [1981] QBD | N/A | Cited for confining the decision in Reckitt’s case and in Nelson’s case to their facts. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Dishonest Assistance
- Knowing Receipt
- Constructive Trustee
- Client's Account
- Money Laundering
- Precious Stones
- Breach of Trust
- Lack of Probity
- Unconscionable Conduct
15.2 Keywords
- Dishonest Assistance
- Knowing Receipt
- Constructive Trust
- Money Laundering
- Breach of Trust
- Singapore
- High Court
- Jewellery
- Law Firm
- Misappropriation
16. Subjects
- Trust Law
- Equity
- Banking
- Financial Crime
17. Areas of Law
- Trusts Law
- Accessory Liability
- Dishonest Assistance
- Recipient Liability
- Knowing Receipt
- Money Laundering