Steep Rise Ltd v Attorney-General

[3] The appellant is a company incorporated in the British Virgin Islands and is owned beneficially by Mr Fabrice Touil. Mr Touil is also the sole director of the appellant.

[4] Sometime in 2010, the French authorities conducted investigations into Value Added Tax (“VAT”) fraud and money-laundering in the French carbon stock exchange. Investigations revealed that a French company, B Concept, had committed VAT fraud by purchasing tax-free carbon emission allowances and then selling the allowances to French companies with tax included. The VAT money charged to the buyers was not paid to the French Treasury and were instead kept by B Concept. The proceeds of the VAT fraud were then laundered into bank accounts owned by companies incorporated in various countries. These bank accounts and companies were owned beneficially by Mr Touil, his siblings and other related persons identified as part of the VAT fraud, which was said to have caused the French government some €68.5m in lost tax revenue.

[5] Upon discovering suspicious transfers of money into a bank account in Singapore owned by Axcel Inc, the French Ministry of Justice sent an International Request for Legal Assistance in Criminal Matters dated 17 September 2014 (“the First Request”) to the AG. The First Request sought principally the AG’s assistance to obtain banking documents related to the Axcel Inc account and to Mr Touil generally and requested the freezing of that account.

[6] With the documents obtained pursuant to the First Request, the French authorities discovered that all the funds in the Axcel Inc account had been transferred into the appellant’s BOS Account. On 28 October 2015, the French Ministry of Justice sent another International Request for Legal Assistance in Criminal Matters (“the Second Request”) to the AG. In the Second Request, the French authorities similarly asked for banking documents related to the BOS Account and for the freezing of the BOS Account.

[7] On 8 August 2017, the AG filed an ex parte application in Originating Summons No 898 of 2017 (“OS 898”) to restrain dealings with the funds in the BOS Account. The application was made under s 29 of the MACMA which enables the court to restrain property in Singapore that may be the subject of foreign confiscation orders.

[10] On 31 August 2017, the French authorities commenced criminal proceedings against Mr Touil in the High Court of Paris and the French Ministry of Justice issued a second certificate confirming that fact. The AG adduced this certificate in OS 898 by way of a supplementary affidavit on 11 December 2017.

[21] There were therefore two legal questions in this appeal:

[23] As this court stated in Tay Long Kee Impex Pte Ltd v Tan Beng Huwah (trading as Sin Kwang Wah) [2000] 1 SLR(R) 786 (“Tay Long Kee Impex”) at [21], the duty requires the applicant to disclose not only material facts known to him but also “such additional facts which he would have known if he had made proper inquiries”. The applicant must also disclose the defences that may reasonably be raised by the defendant, although the duty extends only to plausible defences and not fanciful or theoretical ones (see The Vasiliy Golovnin at [87]).

[25] In ordinary civil matters, the scope of the applicant’s duty extends to making reasonable inquiries to ascertain material facts and to disclosing defences that are available to the defendant. However, in the context of applications made under the MACMA, the duty cannot apply in the same unattenuated fashion. Where the AG acts pursuant to a request for mutual legal assistance from a foreign authority, he is constrained by the information he receives from the foreign authority although he may request clarifications or further information.

[26] Section 19(2) of the MACMA provides basic information to be provided by a foreign authority in any request. This includes the purpose of the request and the nature of the assistance sought, a summary of the relevant facts and laws and the status of foreign proceedings. If all requisite information under s 19(2) has been provided, it is not the AG’s duty to inquire or to investigate further. The underlying investigations and any subsequent judicial proceedings are within the purview of the foreign authority and are to be carried out under its law. As this court observed in Re Section 22 at [6], the AG has a duty to make the application to the court where a request from the foreign country satisfies all requirements of the MACMA. Failure to do so could would cause Singapore to be in breach of its international obligations to the requesting country.

[27] We would therefore limit the AG’s duty of full and frank disclosure to the court to a duty to disclose all material facts relating to the application that are within the AG’s actual knowledge. The AG does not have a positive duty to investigate further into the facts provided by the foreign authority or to examine the strength of the case against the accused if the information provided by the foreign authority is otherwise sufficient to satisfy the MACMA requirements. If the AG is or becomes aware of any facts that might cast doubt on the application, whether before or subsequent to the hearing of the application, he should disclose that information in line with his continuing duty of full and frank disclosure.

[28] The question here was whether the AG ought to have disclosed to the Judge that at least one of the purposes of the Requests was to secure the BOS Account for the payment of a fine if Mr Touil was convicted of the offences in the French proceedings. The appellant pointed to an identical paragraph 8.2 found in the First and Second Requests under the heading “Purpose of the Request and Assistance Requested”. Paragraph 8.2 stated:

[29] The above cited paragraph 8.2 was translated from the original French text by the French authorities. In the English translation, the words “financial penalty” and “fine” (underlined) were used to translate the same French term “peine d’amende”. During the hearing, when we asked about this apparent inconsistency in translation, Ms Kristy Tan replied that the AG accepted the French term to mean a fine under our law instead of some wider financial penalty.

[33] Although the appellant argued that the French authorities did not disavow their intention of restraining the BOS Account to satisfy the payment of a fine, we think that such disavowal need not be express. In the said certificate, the investigating judge stated:

(a) that judicial proceedings were to be instituted in France in respect of the VAT fraud and the money-laundering “for the purpose of confiscating assets derived from the commission of money laundering”;

(b) that the French authorities in their Requests had officially asked for the freezing of the stated bank accounts to prevent any transaction to the debit of the said accounts, “the proceeds of the fraud having transited through these accounts”; and

(c) that the amount of money laundered, 34m, remained unpaid and unrecovered in France.