SINGAPORE Law and Practice Contributed by: Jansen Chow and Ang Leong Hao, Rajah & Tann Singapore
1. Fraud Claims 1.1 General Characteristics of Fraud Claims As a trading and financial hub, there is often an inter - national element to fraud claims in Singapore. The general characteristics of fraud claims in Singapore include: • the making of false statements; • misappropriation or diversion of assets (particularly through multiple and offshore entities); • falsification of documents and banking records; • conspiracy to defraud (including between individu - als and the corporate entities used to perpetrate the fraud); • breach of fiduciary duties by an agent or officer of a company; • dishonest assistance; and • corrupt payments. 1.2 Causes of Action After Receipt of a Bribe The principal’s cause of action may be founded on restitution (money had and received) or breach of fidu - ciary duty (prohibition against secret profits). The latter is relevant if the principal also intends to seek a con - structive trust over the bribe and to trace its proceeds. A principal’s right at common law to recover the bribe or the monetary value of the bribe received by its agent is also statutorily recognised. Section 14 of the Prevention of Corruption Act 1960 provides that a principal may recover, as a civil debt, the amount or value of the bribe received by the agent, or from the person who gave the bribe and no conviction or acquittal of the defendant shall operate as a bar to recovery. The fact that the agent paid fines equal to or exceeding the value of the bribe received is not a bar to the principal’s recovery. The possibility of dou - ble disgorgement acts as a further deterrent against corruption. 1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts The party who assisted or facilitated the fraudulent acts of another may be liable in a claim for: • unlawful means conspiracy, together with the pri - mary wrongdoer, if the fraudulent acts were carried
out by one or more of them pursuant to a conspira - cy between them to injure the victim; • dishonest assistance, if that party assisted or facili - tated the breach of fiduciary duties; or • knowing receipt, where the assistance/facilitation involved the receipt of trust/proprietary funds. 1.4 Limitation Periods Generally, causes of action grounded in contract and tort are subject to a six-year limitation period (see Section 6 of the Limitation Act 1959). There are, however, specific provisions that deal with claims based on fraud. For instance: • under Section 22 of the Limitation Act 1959, no period of limitation shall apply to an action by a beneficiary under a trust, being an action in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy, or to recover from the trustee trust property or the proceeds thereof in the possession of the trustee or previously received by the trustee and converted to their use; and • under Section 29 of the Limitation Act 1959, the six-year limitation period shall not begin to run in certain cases of fraud or mistake until the claimant has discovered the fraud or mistake, as the case may be, or could with reasonable diligence have discovered it. 1.5 Proprietary Claims Against Property Generally, a victim of fraud may bring a proprietary claim for misappropriated funds or property and seek a constructive trust over them. The constructive trust will give the claimant priority over other unsecured creditors in an insolvency situation. It also enables the claimant to trace and follow the proceeds of the fraud. Hence, if the proceeds of fraud are invested successfully before they are recovered by the victim, the victim is entitled to trace the fraud proceeds into the investment and claim the full value thereof. Where the proceeds of the fraud have been commin - gled, there are specific rules and methods of distri - bution that the Singapore courts may apply in con - sidering the distribution of such commingled funds, depending on whether the assets were commingled with the assets of the fraudster, or those of other inno-
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