Perry v Esculier: Choice of Law in Ponzi Scheme, Trust & Recipient Liability
In Perry, Tamar and another v Esculier, Jacques Henri Georges and another, the Singapore Court of Appeal dismissed an appeal concerning a Ponzi scheme. The appellants, Tamar Perry and Solid Fund Private Foundation, sought to recover funds paid to the respondents, Jacques Henri Georges Esculier and Bonnet Esculier Servane Michele Thais, arguing the funds were subject to a trust. The court, with Justices Judith Prakash, Steven Chong, and Beverley McLachlin, held that Swiss law governed the dispute due to a choice-of-law clause in the asset management agreements. The court found that the appellants' transfers to Lexinta Group Limited (LGL) were made pursuant to these agreements, making Swiss law applicable. Since Swiss law does not recognize trusts, the appellants' claim failed. The appeal was dismissed, and the appellants were ordered to pay costs.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal addresses choice of law in a Ponzi scheme, focusing on trust and recipient liability. Appeal dismissed, Swiss law applied.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Tamar Perry | Appellant, Plaintiff | Individual | Appeal Dismissed | Lost | |
| Solid Fund Private Foundation | Appellant, Plaintiff | Trust | Appeal Dismissed | Lost | |
| Jacques Henri Georges Esculier | Respondent, Defendant | Individual | Appeal Upheld | Won | |
| Bonnet Esculier Servane Michele Thais | Respondent, Defendant | Individual | Appeal Upheld | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Justice of the Court of Appeal | No |
| Steven Chong | Justice of the Court of Appeal | Yes |
| Beverley McLachlin | International Judge | No |
4. Counsels
4. Facts
- The appellants and respondents were victims of a Ponzi scheme administered by Lexinta Group under Bismark Badilla.
- The respondents invested earlier and received payments from Lexinta Group Limited (LGL).
- The appellants invested later and transferred funds to LGL.
- The payments to the respondents came from funds transferred by the appellants to LGL.
- The asset management agreements (AMAs) contained an express choice of Swiss law.
- LGL was not expressly a party to the AMAs.
- The appellants claimed LGL held the funds on trust for them.
5. Formal Citations
- Perry, Tamar and another v Esculier, Jacques Henri Georges and another, Civil Appeal from the Singapore International Commercial Court No 7 of 2022, [2023] SGCA(I) 2
6. Timeline
| Date | Event |
|---|---|
| Respondents made initial investment pursuant to an asset management agreement. | |
| Appellants made investment through an asset management agreement. | |
| Appellants made investment through an asset management agreement. | |
| Respondents received various payments from LGL. | |
| Respondents received various payments from LGL. | |
| Sale and purchase agreement dated. | |
| First appellant discovered that the Disputed Moneys had been transferred to the respondents’ DBS account in Singapore. | |
| DBS commenced interpleader proceedings in the High Court of Singapore by way of HC/OS 1016/2019. | |
| Proceedings later came to be SIC/S 4/2020. | |
| Suit 4 was dismissed by the Singapore International Commercial Court Judge. | |
| Appellants filed a Notice of Appeal against the Judgment. | |
| Parties to OS 1016 recorded a consent order in HC/ORC 4867/2022. | |
| Appeal dismissed. | |
| Grounds of decision. |
7. Legal Issues
- Choice of Law
- Outcome: The court held that Swiss law applied as the governing law of the dispute due to the express choice of law clause in the asset management agreements.
- Category: Substantive
- Related Cases:
- [2007] 1 SLR(R) 377
- [2017] 2 SLR 265
- Breach of Trust
- Outcome: The court held that the appellants' claim in trust failed because Swiss law does not recognize the concept of a trust.
- Category: Substantive
- Recipient Liability
- Outcome: The court found that even if Hong Kong law applied, the respondents were bona fide purchasers for value without notice and therefore not liable.
- Category: Substantive
8. Remedies Sought
- Recovery of Funds
- Damages
9. Cause of Actions
- Breach of Trust
- Unjust Enrichment
10. Practice Areas
- Commercial Litigation
- Trust Litigation
- International Law
11. Industries
- Finance
- Investment Management
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Precious Shipping Public Co Ltd and others v OW Bunker Far East (Singapore) Pte Ltd and others and other matters | High Court | Yes | [2015] 4 SLR 1229 | Singapore | Cited regarding the nature of interpleader proceedings. |
| Rickshaw Investments Ltd and another v Nicholai Baron von Uexkull | Court of Appeal | Yes | [2007] 1 SLR(R) 377 | Singapore | Cited for the principle of ascertaining the foundational sources from which the relevant equitable rights and remedies arise in claims in equity. |
| Rappo, Tania v Accent Delight International Ltd and another and another appeal | Court of Appeal | Yes | [2017] 2 SLR 265 | Singapore | Cited for applying Rickshaw Investments in determining the applicable law to claims arising out of dealings in artworks. |
| Heer v Goldstein | Swiss Federal Supreme Court | Yes | Heer v Goldstein DFSC 87 II 18 (7 February 1961) | Switzerland | Cited to support the principle that an investor in a Ponzi scheme is contractually entitled to claim repayment of investment and profit margin based on a valid investment contract if acting in good faith under Swiss law. |
| Perry, Tamar and another v Esculier, Bonnet Servane Michele Thais and another | Singapore International Commercial Court | Yes | [2022] SGHC(I) 10 | Singapore | The judgment being appealed from. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Ponzi scheme
- Asset Management Agreement
- Choice of Law
- Trust
- Recipient Liability
- Lex situs
- Bona fide purchaser
- Governing Law
- Lexinta Group Limited
- Disputed Moneys
15.2 Keywords
- Ponzi scheme
- choice of law
- trust
- recipient liability
- Singapore
- Swiss law
- asset management agreement
17. Areas of Law
16. Subjects
- Conflict of Laws
- Trust Law
- Financial Fraud
- Investment Law