SINGAPORE Law and Practice Contributed by: Jansen Chow and Ang Leong Hao, Rajah & Tann Singapore LLP
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 trus - tee 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 a fraud may make a pro - prietary claim for the misappropriated funds or property, and seek a constructive trust to be imposed over the funds or property. The con - structive trust will give priority to the claimant against other unsecured creditors in an insol - vency situation. It also enables the claimant to trace and follow the fraud proceeds. Hence, if the proceeds of fraud are invested successfully before they are recovered by the victim, the vic - tim is entitled to trace the fraud proceeds into the investment and claim the full value thereof. Where the proceeds of the fraud have been commingled, there are specific rules and meth - ods of distribution that the Singapore courts may apply in considering the distribution of such
commingled funds, depending on whether the assets were commingled with the assets of the fraudster, or that of other innocent third parties, and whether and how the commingled 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 beneficiary’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 con - duct 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, pro - spective 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 oth - erwise) 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 injunc - tion (in rem) over a specific asset in which the claimant asserts a proprietary interest. Such injunctions are typically sought on an urgent and
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