Baker v BCS: Oral Trust, Fiduciary Duty & Loan Dispute over Ethocyn Rights
In Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and others, the Singapore International Commercial Court heard a claim by Michael Baker, as executor of Chantal Burnison's estate, against BCS Business Consulting Services Pte Ltd, Marcus Weber, and Renslade Holdings Limited for breach of fiduciary duties as trustees under an oral trust, breach of a loan agreement, and conspiracy to injure Chantal and/or the Estate. The court found in favor of the Plaintiff, declaring that the Defendants hold the Trust Assets on trust for the Plaintiff, ordering the Defendants to provide a detailed account of all transactions, and entering judgment against Weber for CHF9.5 million plus interest.
1. Case Overview
1.1 Court
SINGAPORE INTERNATIONAL COMMERCIAL COURT1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Executor Baker sues BCS and Weber for breach of fiduciary duties and a loan agreement related to Ethocyn rights. The court found in favor of Baker.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| BCS Business Consulting Services Pte Ltd | Defendant | Corporation | Claim Dismissed | Lost | |
| Marcus Weber | Defendant | Individual | Judgment against Weber | Lost | |
| Renslade Holdings Limited | Defendant | Corporation | Claim Dismissed | Lost | |
| Baker, Michael A (executor of the estate of Chantal Burnison, deceased) | Plaintiff | Individual | Judgment for Plaintiff | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Quentin Loh | Judge | Yes |
| Carolyn Berger | Judge | No |
| Dominique Hascher | Judge | No |
4. Counsels
4. Facts
- Chantal co-invented Ethocyn, a skin product, in 1980.
- Chantal wanted to purchase the Ethocyn Rights from the Chantal Companies in bankruptcy.
- Chantal instructed Weir to use a New Zealand company, Renslade (NZ), to purchase the Ethocyn Rights.
- Chantal provided funds through SBC Pharmaceutical to Renslade (NZ) to purchase the Ethocyn Rights.
- Chantal entered into an oral agreement with Weber for him to hold the Ethocyn Rights on trust.
- Chantal transferred the Ethocyn Rights from Renslade (NZ) to Renslade (S), a Singapore company controlled by Weber.
- Weber asked Chantal for a loan of CHF6 million, but took CHF9.5 million from the Trust Monies.
5. Formal Citations
- Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and others, Suit No 3 of 2018, [2020] SGHC(I) 10
6. Timeline
| Date | Event |
|---|---|
| Ethocyn compound co-invented | |
| Chantal admitted to the California State Bar | |
| Chantal divorced her husband | |
| Class action commenced against Chantal Pharmaceutical and Chantal | |
| Involuntary Chapter 11 bankruptcy petition filed against Chantal Pharmaceutical | |
| CSC filed for voluntary insolvency | |
| Chantal Pharmaceutical filed a consent to enter an order for relief and a voluntary petition in the Chapter 11 case | |
| Order for relief entered | |
| Asset purchase agreement entered into between the Chantal Companies and Renslade (NZ) | |
| Bankruptcy Court granted the order approving the sale | |
| CBD Pharmaceutical transferred its patent rights to the Chantal Companies | |
| Renslade Singapore Pte Ltd incorporated | |
| Class Action Suit against Chantal and the Chantal Companies brought to an end with the filing of a Stipulation of Settlement | |
| Ethocyn Rights transferred from Renslade (S) to BCS | |
| US Bankruptcy Court sanctioned the Royalty Buyout | |
| BCS entered into a supply and distribution agreement with Nu Skin International Inc | |
| Renslade Holdings Limited incorporated | |
| Weber asked and Chantal agreed to lend Weber CHF6 million from the Trust | |
| Chantal diagnosed with colon cancer | |
| Chantal repeatedly sought an account of the Trust Assets and the Trust Monies from the Defendants | |
| Heika attended a meeting in Zurich with Weber and Urs Wehinger | |
| Chantal passed away | |
| Baker on behalf of the Estate repeatedly sought an account and return of the Trust Assets and Trust Monies from the Defendants | |
| Meeting attended by Heika, Wayne Johnson, Weber, Wehinger, and Ralf Wojtek | |
| Baker sought an account of the Trust Monies and Trust Assets by 15 May 2017 | |
| Suit No 3 of 2018 filed | |
| Defendants applied to have foreign law proved by way of submissions from registered foreign lawyers | |
| Trial began | |
| Trial concluded | |
| Judgment reserved |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court found that the Defendants breached their fiduciary duty to Chantal by failing to provide an account of the Trust and the Trust Monies.
- Category: Substantive
- Sub-Issues:
- Failure to provide an account of the trust
- Failure to return trust assets
- Unauthorized withdrawal from trust monies
- Breach of Contract
- Outcome: The court found that Weber breached his contractual obligation vis-à-vis Chantal to return the CHF9.5 million borrowed from the Trust with 3% annual interest.
- Category: Substantive
- Sub-Issues:
- Failure to repay loan
- Failure to pay interest
- Validity of Oral Trust
- Outcome: The court found that the Trust Agreement led to the formation of a valid express trust.
- Category: Substantive
- Sub-Issues:
- Certainty of intention
- Certainty of subject matter
- Certainty of object
- Illegality of Trust
- Outcome: The court found that the Trust Agreement was not unenforceable by reason of illegality under the governing law of the trust, ie, Singapore law.
- Category: Substantive
- Sub-Issues:
- False declarations to bankruptcy court
- Fraud on creditors
8. Remedies Sought
- Declaration of Trust
- Detailed Account of Transactions
- Transfer of Trust Assets
- Monetary Judgment
- Interest and Costs
9. Cause of Actions
- Breach of Fiduciary Duty
- Breach of Contract
- Dishonest Assistance
- Conspiracy to Injure
10. Practice Areas
- Commercial Litigation
- Trust Law
- Contract Disputes
- Breach of Fiduciary Duty
11. Industries
- Cosmetics
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Lena Leowardi v Yeap Cheen Soo | Court of Appeal | Yes | [2015] 1 SLR 581 | Singapore | Cited for the test to be applied when a defendant elects not to call evidence and submits that there is no case to answer. |
| Tan Juay Pah v Kimly Construction Pte Ltd and others | High Court | Yes | [2012] 2 SLR 549 | Singapore | Cited for the test to be applied when a defendant elects not to call evidence and submits that there is no case to answer. |
| Relfo Ltd (in liquidation) v Bhimji Velji Jadva Varsani | High Court | Yes | [2008] 4 SLR(R) 657 | Singapore | Cited for the test to be applied when a defendant elects not to call evidence and submits that there is no case to answer. |
| Lim Eng Hock Peter v Lin Jian Wei | High Court | Yes | [2009] 2 SLR(R) 1004 | Singapore | Cited for the test to be applied when a defendant elects not to call evidence and submits that there is no case to answer. |
| Thio Keng Poon v Thio Syn Pyn and others and another appeal | High Court | Yes | [2010] 3 SLR 143 | Singapore | Cited for the principle that the failure to offer evidence could be fatal to the defendants’ case. |
| Trisuryo Garuda Nusa Pte Ltd v SKP Pradiksi (North) Sdn Bhd and another and another appeal | Court of Appeal | Yes | [2017] 2 SLR 814 | Singapore | Cited for the principle that the proper law of an express trust is the law chosen by the trustee or, in the absence of such choice, the system of law to which the trust has the closest connection. |
| Rappo, Tania v Accent Delight International Ltd and another and another appeal | Court of Appeal | Yes | [2017] 2 SLR 265 | Singapore | Cited for the established approach to determine the governing law of a contract. |
| Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal | High Court | Yes | [2008] 2 SLR(R) 491 | Singapore | Cited for the established approach to determine the governing law of a contract. |
| Ochroid Trading Ltd and another v Chua Siok Lui (trading as VIE Import & Export) and another | Court of Appeal | Yes | [2018] 1 SLR 363 | Singapore | Cited for the two-stage test to ascertain whether or not an agreement may be unenforceable due to illegality. |
| Ting Siew May v Boon Lay Choo | High Court | Yes | [2014] 3 SLR 609 | Singapore | Cited for the principle that the enforcement of contracts tainted by illegality is subject to the limiting principle of proportionality. |
| Guy Neale and others v Nine Squares Pty Ltd | High Court | Yes | [2015] 1 SLR 1097 | Singapore | Cited for the formation of an express trust in Singapore law requires three certainties. |
| Compania De Navegacion Palomar, S.A. and others v Ernest Ferdinand Perez De La Sala | High Court | Yes | [2017] SGHC 14 | Singapore | Cited for the principle that in what was said or done by the settlor, there must be clear evidence of an intention to create a trust. |
| Lau Siew Kim v Yeo Guan Chye Terence and another | High Court | Yes | [2008] 2 SLR(R) 108 | Singapore | Cited for the definition of a resulting trust. |
| Tay Yok Swee v United Overseas Bank Ltd and others | High Court | Yes | [1994] 2 SLR(R) 36 | Singapore | Cited for the principle that the presumption of a resulting trust may be rebutted by clear evidence of the payor’s intention to make a gift to the recipient. |
| Tinsley v Milligan | House of Lords | Yes | [1994] 1 AC 340 | United Kingdom | Cited for the principle that illegality did not bar the defendant’s claim because the presumption of resulting trust allowed the defendant to establish an equitable interest in the property. |
| Goodrich v. Briones (In re Schwarzkopf) | United States Court of Appeals for the Ninth Circuit | Yes | 626 F.3d. 1032 | United States | Cited for the principle that a trust created for the purpose of defrauding creditors is illegal under California law. |
| In re Torrez | United States Court of Appeals for the Ninth Circuit | Yes | 827 F.2d 1299 | United States | Cited for the four factors that California courts look to in deciding whether to enforce an illegal trust. |
| In re Roussos | Bankruptcy Court for the Central District of California | Yes | 541 B.R. 721 | United States | Cited for the principle that fraud on the court is a fraud that defiles the court itself. |
| Matter of Met-L-Wood Corp | United States Court of Appeals for the Seventh Circuit | Yes | 861 F.2d 1012 | United States | Cited for the principle that if the debtor used his control to obtain the bankruptcy assets for a song, it would be a fraud on the creditors, but not a fraud on the court. |
| BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another | Court of Appeal | Yes | [2016] 4 SLR 1 | Singapore | Cited for the principle that a Singapore court will not enforce a contract if its object or purpose would involve doing an act in a foreign and friendly state which would violate the law of that state. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 35 r 4(3) |
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 110 r 3(1) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Securities Exchange Act of 1934 (15 U.S.C. §§78j(b) and 78t(a)) | United States |
| Title 18 of the United States Code ss 152 | United States |
| Title 18 of the United States Code ss 157 | United States |
15. Key Terms and Keywords
15.1 Key Terms
- Ethocyn Rights
- Trust Agreement
- Trust Assets
- Trust Monies
- Renslade
- BCS
- Weber
- Chantal
- Nu Skin SDA
- Royalty Buyout
15.2 Keywords
- trust
- fiduciary duty
- loan
- Ethocyn
- bankruptcy
- Singapore
- contract
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Trust Law | 95 |
| Fiduciary Duties | 80 |
| Contract Law | 40 |
| Fraud and Deceit | 30 |
| Bankruptcy | 25 |
| Civil Procedure | 20 |
| Corporate Law | 15 |
| International Commercial Law | 10 |
16. Subjects
- Trusts
- Contract Law
- Breach of Fiduciary Duty
- Bankruptcy Law
- International Transactions