Singapore legislation
Section 236L
Section 236L
Order for disgorgement against third party
(1)
Without affecting any action under section 234, 236, 236D, 236G, 236I or 236K, where —
a person has been convicted by a court of an offence in respect of a contravention of any provision in this Part;
a person has had an order for the payment of a civil penalty made against the person under section 232 or any of the provisions in this Division by a court, other than by way of a default judgment or a consent order made with or without admission of contravention, in respect of a contravention of any provision in this Part; or
in an action commenced under this section, a court is satisfied on a balance of probabilities that a contravention by a person of any provision in this Part has occurred,the court may, on the application of the Authority or any claimant, make an order against any other person (called in this section a third party) who has received the whole or any part of the benefit of that contravention for disgorgement of that benefit, being benefit derived from trades carried out for the third party by the person referred to in paragraph (a), (b) or (c).
(2)
The court must issue a notice to a third party against whom an application for an order for disgorgement under subsection (1) is made, giving the third party an opportunity to show cause, within such time as may be specified in the notice, why the order should not be made.
(3)
An application for an order for disgorgement under subsection (1) must not be commenced after the expiration of 6 years from the date on which the contravention referred to in that subsection was committed.
(4)
The court is not to make an order for disgorgement against a third party, or is not to order disgorgement of the entire benefit derived by the third party, if the court is satisfied, on a balance of probabilities, that —
the third party acquired the benefit without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the benefit was derived from the contravention referred to in subsection (1); and
the third party has so altered the third party’s position in reliance on the third party having an indefeasible interest in the benefit that, in the opinion of the court, it would be inequitable to make the order for disgorgement or to order disgorgement of the entire benefit derived by the third party, as the case may be.
(5)
Despite subsection (4), the court may make an order for disgorgement against a third party referred to in subsection (4) of a sum that is, in the opinion of the court, equitable.
(6)
The court may, after the order for disgorgement has been made final, fix a date, not earlier than 6 months from the date the order for disgorgement has been made final, on or before which all claimants have to file and prove their claims for compensation in respect of the contravention referred to in subsection (1).
(7)
The court may, after the expiry of the date fixed under subsection (6), order that each claimant who has filed and proven the claimant’s claim for compensation be paid out of the sum under the final order for disgorgement, an amount —
equal to the amount of loss suffered by the claimant, after deducting any other compensation paid or payable to the same claimant under an order of court or an agreement to pay in respect of the same contravention; or
equal to the pro‑rated portion of the sum under the final order for disgorgement, calculated according to the relationship which the amount referred to in paragraph (a) bears to all amounts proved to the court,whichever is the lesser.
(8)
Any sum remaining under the order for disgorgement must be paid into the Consolidated Fund and is to be treated as a debt due to the Government for the purposes of section 10 of the Government Proceedings Act 1956.
(9)
If the third party fails to pay the sums under the order for disgorgement within the time specified in the court order under subsection (7) ––
each claimant may recover the sum due to the claimant under the order for disgorgement as though it were a judgment debt due to the claimant; and
the remaining sum under the order for disgorgement may be recovered by the Authority as though it were a judgment debt due to the Authority and paid into the Consolidated Fund.
(10)
After the expiry of the date fixed under subsection (6), no person may make any subsequent application under this section for an order for disgorgement against the third party in respect of the same contravention.
(11)
For the purposes of this section, an order for disgorgement is made final if —
the order is not set aside on appeal or revision or is varied only as to the sum to be disgorged;
the order is not subject to further appeal;
no notice of appeal against the order is lodged within the time prescribed by Rules of Court; or
any appeal against the order is withdrawn.
(12)
In this section —
Definition
“benefit”, in relation to a contravention of any provision in this Part, means a profit gained or loss avoided as a result of that contravention;
Definition
“claimant”, in relation to a contravention of any provision in this Part, means any person who would qualify as a claimant under section 234 in respect of that contravention.