SINGAPORE Law and Practice Contributed by: Jansen Chow and Ang Leong Hao, Rajah & Tann Singapore
cent third parties and whether and how the commin - gled funds have been spent or dissipated. In the case of the former, the courts will apply the rule that is most favourable to the victim. The courts may apply the presumption (which is rebuttable) that the fraudster had spent their own money first and the remaining money is the beneficiary’s (if the victim seeks to claim the remaining funds), or the presumption that the ben - eficiary’s money was spent first (if the victim seeks to trace the proceeds of the funds). In the case of the latter, the courts may order a pro rata distribution from the commingled assets. 1.6 Rules of Pre-Action Conduct There are no particular rules of pre-action conduct for fraud claims. Pursuant to the terms of the Rules of Court 2021, a party to any court proceeding is under an express duty to consider an amicable resolution of the dispute before the commencement and during the course of the proceedings (Order 5 Rule 1 (1)). In addition, prospective claimants are required to make an offer of amicable resolution (which shall be open for acceptance within a reasonable period of time, or for at least 14 days, unless parties agree otherwise) before commencing action unless the claimant has reasonable grounds not to do so (Order 5 Rule 1 (2)). 1.7 Prevention of Defendants Dissipating or Secreting Assets A claimant may seek either a freezing injunction (in personam) over the defendant to prevent them from dealing with or disposing of assets beyond a certain value, or a proprietary injunction (in rem) over a spe - cific asset in which the claimant asserts a proprietary interest. Such injunctions are typically sought on an urgent and without notice (ex parte) basis. Freezing injunctions can be sought in aid of domestic or for - eign proceedings, although the legal requirements for each differ. A claimant may also seek a freezing injunction against a third party (non-cause of action defendant) who is holding on to the defendant’s assets as a nominee. Exceptionally, a claimant may also seek an interim receivership order requiring the defendant’s assets to be handed over and managed by a court-appointed receiver, pending trial of the action. A receivership
order may be granted if the court concludes that the defendant cannot be trusted to obey the freezing order – for example, where the defendant’s assets are held via a complex, opaque and multi-layered corpo - rate structure. If the defendant does not comply with the court order, they may be liable for contempt of court under the Administration of Justice (Protection) Act 2016, with a fine of up to SGD100,000, imprisonment for a term not exceeding three years or both. Additionally, the court may refuse to hear the defendant until: • the contempt is purged; • the defendant submits to the order or direction of the court; or • an apology is made to the court’s satisfaction. Third parties (such as banks) in Singapore are also bound by the freezing order upon receiving notice of the injunction; failure to comply may render them liable for contempt of court. A claimant seeking a freezing or proprietary injunc - tion will need to pay the filing fees for the applica - tion, which may range from SGD2,000 to SGD10,000, depending on the volume and number of documents filed. The fees are not pegged to the value of the claim. The claimant will also be required to provide a cross- undertaking in damages to the court, which may be substantial depending on the nature of the claim and the potential loss and damage the defendant may incur. In certain cases, the claimant may also be required to provide fortification of such undertaking, which would usually be in the form of payment into court, a solicitor’s undertaking or a bank guarantee.
2. Procedures and Trials 2.1 Disclosure of Defendants’ Assets
Generally, a claimant can seek a disclosure order as an ancillary order to support the freezing injunction. The defendant will be required to file an affidavit iden - tifying their assets, whether held in their own name or not and whether owned solely or jointly.
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