Infinity Treasures Pte Ltd v Global Currency Exchange Network Limited

In a stakeholder application, the court may determine competing claims on written evidence where no party seeks an oral hearing and an oral process would be disproportionate or impracticable. Claimants must comply with formal directions and provide sufficient evidence, including documentary proof where reasonably expected, to establish an entitlement to the fund.

A stakeholder fund is not a compensation fund to be distributed according to fairness or need. Entitlement depends on legal rights. An intermediary cannot use investor funds to discharge another party’s commission liabilities without actual or apparent authority. Costs remain discretionary: an interpleading party will usually recover costs, but may be denied recovery where the need for interpleader arose from its own default.

Infinity Treasures claimed the balance of an account operated by Global Currency, asserting that it represented commission payable for marketing investment products. Global Currency applied for stakeholder relief after potential investors asserted competing claims to the account balance.

Following directions for service and evidence, numerous persons filed witness statements. No investor requested an oral hearing. The court therefore determined the competing claims, Infinity Treasures’ claim, and Global Currency’s application for costs on the written materials. The central issues were which persons had complied with the procedural requirements, whether they had established an evidential basis for claims to the fund, whether Infinity Treasures had any entitlement to it, and how costs should be allocated.

1. Written determination. The court determined the stakeholder application on the written materials. No investor had requested an oral hearing, effective participation would have been difficult, the available evidence was unlikely to be materially improved by a hearing, and the matter had to be brought to an end proportionately.
2. Compliance and evidence. A person seeking recognition as a claimant had to comply with the court’s formal requirements. Signed witness statements and statements of truth were material where evidence could not be tested orally. Individuals unable to provide documentary proof of their investments had not established a sufficient evidential basis for claims.
3. Nature of the fund. The fund was to be distributed by reference to legal entitlement, not general fairness or need. On the evidence, investments made between 13 September 2013 and 17 July 2014 were treated as having an interest in the fund proportionate to the investment, subject to the individual evidence and the court’s conclusions.
4. Infinity Treasures’ claim. Infinity Treasures had not shown that Global Currency had actual or apparent authority to use investor funds to discharge commission liabilities owed by Project Kudos. The investment documents indicated that the funds were segregated and restricted to investment purposes and payments to investors. Infinity Treasures therefore failed to establish a claim to the fund.
5. Costs. Under Civil Procedure Rules 1998, CPR 86.5, costs on a stakeholder application were discretionary. The authorities indicated that an interpleading party would normally recover its costs, subject to an exception where its own default caused the need for interpleader. Global Currency’s provisional application for payment of costs from the fund was rejected, while its successful defence to Infinity Treasures’ claim supported an order that Infinity Treasures pay its costs. No application to revisit the provisional costs orders was made.