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  • Ng Heng Liat and Others v Kiyue Co Ltd and Another[2003] 4 SLR 218; [2003] SGHC 62
    exception where the wrong complained of is a fraud perpetuated by persons who are in control of the company 11 Counsel for Kiyue argued that the counterclaim should not be struck off because a there is no clear authority that the rule in Foss v Harbottle extends to bar a defendant from raising a counterclaim b the rule is largely abrogated by statutory inroads in ss 216 and 216A of the Companies Act c the plaintiffs had waived the rule d the claim and counterclaim are so closely and intricately related that it would be absurd to strike out the counterclaim e Order 28 r 7 1 of the Rules of Court is wide enough to allow Kiyue to bring the counterclaim f it is procedurally convenient for the claim and counterclaim to be determined in the same action and g the justice of the case demands that Kiyue be permitted to proceed with the counterclaim It was not Kiyue s case that the counterclaim came within the exceptions to the rule in Foss v Harbottle 12 I shall first deal with the issues connected to the rule in Foss v Harbottle The proper plaintiff rule is grounded on the plaintiff claimant s right to the redress it seeks When there is a breach of an obligation to a company the company is the wronged party which is entitled to redress and is the proper plaintiff to sue the wrongdoers The foundation for this rule is the connection between the claimant and the relief sought In most cases the claimant for relief is the plaintiff But a defendant can be a claimant when he makes a counterclaim When he does that there is no reason why his claim should not have to satisfy the same requirement Even if counsel is right that there is no clear authority for this reason and logic dictate that the rule applies to counterclaims with equal force 13 The Companies Act allows for the rule to be relaxed in some circumstances Section 216 allows a shareholder to apply to court to seek personal remedies in cases of oppression or injustice Section 216A enables a shareholder to apply to court for leave to bring a derivative or representative action in the name of the company Counsel is right in saying that they are statutory inroads to the proper plaintiff rule However that falls short of substantiating her contention that the rule is largely abrogated by these inroads The legislature did not abrogate the rule and there is no justification for saying that the inroads are longer or broader than those enacted A shareholder can in proper circumstances avoid the full force of the proper plaintiff rule with the court s approval a shareholder cannot take the rule to have been annulled 14 Counsel also contended that the plaintiffs had waived the rule when they sued Kiyue She submitted that in suing Kiyue the Plaintiffs have acknowledged a dispute with Kiyue pertaining to such breaches of fiduciary

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/company/1458-ng-heng-liat-and-others-v-kiyue-co-ltd-and-another-2003-4-slr-218-2003-sghc-62 (2016-01-30)
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  • Chew Kong Huat and Others v Ricwil (Singapore) Pte Ltd[2000] 1 SLR 385; [1999] SGCA 90
    purchase price of certain pipes and fittings owned by Kailay and that the three letters were a sham and had no effect He held that by failing to procure Sintalow to carry out its part of the agreement and to pay off the outstanding hire purchase instalments Mr Chew had allowed his interest in Sintalow to influence his actions as director of Ricwil It prevented him from acting in accordance with his fiduciary duties and resulted in Ricwil being deprived of the ownership of the machinery 11 The appellants challenge this conclusion of the trial judge First it is submitted on their behalf that in relation to Ricwil s loss of the ownership of the machinery the dominant or effective cause was not Mr Chew s breach of fiduciary duties but Ricwil s complete indifference to the fate of the machinery during the period between 15 January 1996 and 25 June 1996 when there were opportunities for Ricwil to acquire the machinery by making payment of the balance sum due to DBS Finance As no payment was made by Ricwil the machinery was repossessed on 25 June 1996 by DBS Finance pursuant to the terms of the hire purchase agreement made between them and Kailay Thermosel subsequently purchased the machinery only after it had been repossessed by DBS Finance Secondly Sintalow was under no obligation to Ricwil either to enter into the arrangement with Kailay on 13 December 1995 or to pay off the balance of the instalments due to DBS Finance Nor was Mr Chew personally 12 We find some force in this argument We think that the trial judge has misdirected himself on certain material facts in relation to the findings he made It is clear to us that the transaction relating to the acquisition of the machinery from Kailay was arranged by Mr Chew on behalf of Ricwil with the intention of recovering in kind some moneys from Kailay The purchase price of 325 000 for the machinery was to be paid by setting it off against part of the amount owed by Kailay to Ricwil Under the agreement made with Kailay the machinery was to be free from all encumbrances However unknown to Mr Chew the machinery was still under hire purchase from DBS Finance and there were outstanding payments to be made which Kailay was unable to pay Mr Chew then proceeded to make further arrangements with Kailay and this time he made use of Sintalow presumably because Kailay also owed Sintalow considerable sums of moneys He made two arrangements as we have narrated Under the second arrangement made on or about 13 December 1995 Sintalow in return for certain pipes and fittings would among other things pay to DBS Finance the outstanding instalments under the hire purchase agreement For reasons which the trial judge did not accept this arrangement was not implemented by Sintalow it did not pay the sum as agreed The trial judge found at para 49 of his grounds of judgment that Ricwil was put in a disadvantageous position while Sintalow which bought the materials from Kailay for 100 000 of which 70 268 42 was to be paid to DBS Finance benefitted by being relieved of this obligation The trial judge accepted the evidence of one Mr Chai Meng Shep the then project manager of Kailay and found that pursuant to the agreement of 13 December 1995 Sintalow did take delivery of the materials agreed to be sold by Kailay and that Sintalow did not perform the agreement by making the payment to DBS Finance as agreed with Kailay The trial judge was entitled to make this finding However he fell into error in concluding that Sintalow by not performing the agreement made with Kailay had put Ricwil in a disadvantageous position As between Kailay and Sintalow the latter was clearly in breach of the agreement made on 13 December 1995 as having taken the materials from Kailay it failed or refused to pay to DBS Finance the sum of 70 268 42 However that obligation was owed to Kailay and not to Ricwil Sintalow was under no obligation to Ricwil to pay that amount Ricwil itself purchased the machinery from Kailay for 325 000 and under the agreement the machinery was to be free from all encumbrances but as it turned out it was still on hire purchase from DBS Finance and there was a remaining sum of 70 268 42 to be paid to DBS Finance In these circumstances if Ricwil intended to retain the machinery it would have to pay the sum to DBS Finance If this sum was not paid as it was not DBS Finance would be entitled to repossess the machinery which eventually they did Mr Chew vis à vis Ricwil was under no obligation to use his or Sintalow s funds to effect the payment to DBS Finance 13 That was not all A meeting of the board of directors of Ricwil was convened for 15 January 1996 and the first item on the agenda was the takeover of machinery of Kailay S Limited At the meeting the transaction of the acquisition of the duct fabricating machinery from Kailay was discussed Mr Chew informed the board that in view of the huge amount owed by Kailay to Ricwil and impending liquidity crisis of Kailay he had acted on his own and acquired from Kailay the machinery on behalf of Ricwil at the price of 325 000 and that the purchase was a bargain This sum was to be paid by setting it off against part of the moneys owed by Kailay to Ricwil and there was still an outstanding sum of about 70 000 which Ricwil had to pay to DBS Finance He further informed the board that should Ricwil decline to take the machinery Sintalow would buy it It appeared that the agreement made between Kailay and Ricwil was tabled at the meeting The chairman of the board Mr Low Chok Yin commented that the purchase of the machinery costing 325 000 warranted the board s approval as that was specifically provided for in the joint venture agreement Mr Chew defended the acquisition by saying that it was only a contra of account and not a purchase To this another director Ms Judy Kuan responded that despite the fact that the price of the machinery was to be paid by way of a set off against the moneys owed by Kailay it was nevertheless a purchase and approval of the board was required The board eventually decided to defer its decision on the machinery until it had obtained legal opinion on the documents 14 Further at that meeting Mr Chew and Ms Aw tendered their resignations as managing director and director respectively which were to take effect three months from that date Effectively as from 16 January 1996 the day to day running of Ricwil was taken over by another director Mr Stanley Wong who prior to that was the general manager of Sintalow from which position he resigned 15 The trial judge found that Mr Chew did not disclose fully the circumstances surrounding the undated letters which he found were a sham He said at para 58 Mr Chew did not make a full disclosure of the circumstances surrounding the undated letters The agreements evidenced by them were shams as I have found Ricwil did not have to pay DBS Finance If they were not shams then they were inconsistent with each other and could not have been valid all at the same time An explanation was called for None was given We agree that Mr Chew did not make full disclosure at the meeting However with respect we are unable to agree with the trial judge that Ricwil did not have to pay DBS Finance The trial judge continued at para 58 No arrangements were made at any time after the directors meeting or at all for DBS Finance to be paid and if such arrangements were made they were not carried out Mr Chew allowed his interests in Sintalow to influence his actions as a director of Ricwil He failed to act in the interest of Ricwil and Ricwil was deprived of the ownership of the machine With respect we are unable to agree with this conclusion of the trial judge No arrangement was made at any time after the board meeting for DBS Finance to be paid because the board rightly or wrongly had decided to defer its decision until after legal opinion on the documents was obtained As we have recounted after the board meeting Mr Chew was not effectively in control of the day to day management of Ricwil thenceforth Mr Stanley Wong was in charge 16 There were further significant events which occurred after the board meeting which appeared to have escaped the attention of the trial judge First on 11 April 1996 DBS Finance wrote a letter to Ricwil marked for the attention of Mr Chew offering to provide a hire purchase facility of 68 690 01 repayable over 24 months to enable Ricwil to pay off the outstanding amount still owing under the hire purchase agreement made with Kailay On 23 April 1996 Mr Chew forwarded this letter to Ricwil marked for the attention of Mr Stanley Wong Nothing appeared to have been done in response to the offer of DBS Finance and no action was taken by Mr Stanley Wong or anyone on behalf of Ricwil in relation to the payment of the sum outstanding in order to obtain the ownership of the machinery 17 Secondly in mid June 1996 Ricwil moved out of the premises No 8 Fan Yoong Road However the machinery was not taken along and no request then or subsequently was made by Ricwil to take the machinery Those in charge of Ricwil appeared to be disinterested in acquiring the machinery 18 Lastly on 19 June 1996 officers from DBS Finance showed up at No 8 Fan Yoong Road and gave notice of intention to repossess the machinery On 25 June 1996 Chew again wrote to Mr Stanley Wong enclosing a letter from DBS Finance which stated that repossession was going to take place and Mr Chew asked why the situation had been allowed to deteriorate to such an extent Ricwil did not respond to the letters and did nothing whatsoever with respect to the acquisition of the machinery or the payment of the outstanding sum due to DBS Finance 19 The machinery was subsequently repossessed by DBS Finance and was put up for sale in a public auction in July 1996 As the bids were low DBS Finance did not accept any of them DBS Finance subsequently sold the machinery to Thermosel on 8 July 1996 at the price of 60 000 20 In all the circumstances we do not see how Mr Chew could be held responsible for Ricwil s loss of the ownership of the machinery The failure to acquire the machinery was clearly not due to anything done or omitted to be done by Mr Chew On the contrary Mr Chew was interested in acquiring the machinery for Ricwil but the decision taken by Ricwil s board of directors on 15 January 1996 was that the acquisition should be deferred pending legal opinion on the documents It is unclear whether or not any legal opinion was indeed sought on the documents but the fact remained that no action was taken with reference to the acquisition of the machinery or payment of the outstanding sum to DBS Finance After the board meeting on 15 January 1996 Mr Chew was no longer effectively in control of Ricwil s affairs Even if he were still in control he could not proceed further to pay the outstanding sum to DBS Finance or do anything towards acquiring the machinery as the board had taken a clear stand that such acquisition required its approval and the board had not given any approval instead the board had decided to defer its decision on the machinery after legal advice was sought The board or those in charge of the affairs of Ricwil at the time also took no action in relation to the offer of a new scheme of payments made by DBS Finance that was made on 23 April 1996 Ricwil also appeared not to assert any ownership over the machinery when it left the premises No 8 Fan Yoong Road in June 1996 and did not even respond to the notice of repossession sent by DBS Finance on 25 June 1996 In our view Ricwil s failure to acquire the machinery was not caused by and was not attributable in any way to any breach of duty on the part of Mr Chew as a director of Ricwil but was due essentially to the indifference to or disinterestedness in the machinery on the part of the board or those in charge of the affairs of Ricwil at the material time At any rate it seems to us that the board did not at any time recognise or accept that Ricwil owned the machinery in the first place 21 In our judgment Mr Chew did not commit a breach of duty as a director of Ricwil in relation to the machinery and was not responsible for its loss as a result of the repossession thereof by DBS Finance While it is true that Mr Chew did not at the board meeting make full disclosure of the entire circumstances relating to the arrangement whereby Sintalow would pay the sum of 70 268 42 to DBS Finance in return for certain materials from Kailay this failure was not a breach of duty as regards the acquisition of the machinery The two matters were not connected As such Ricwil could not be said to have been responsible for the loss of the machinery 22 Ricwil s claim for damages against Mr Chew for being deprived of the ownership of the machinery therefore fails Accordingly the order below awarding to Ricwil damages to be assessed for the loss of the ownership of the machinery cannot stand and must be set aside For the same reasons the claim against Thermosel for an account of profit for the use of the machinery also fails In the circumstances that had transpired Thermosel purchased the machinery from DBS Finance in an arm s length transaction free from any claim of Ricwil and cannot be called upon to account to Ricwil for any profits derived from its use of the machinery It follows that the order requiring Thermosel to give an account of the profits it made with respect to its use of the machinery must also be set aside Contract with Speed Air 23 The next area of contention relates to the contracts for the manufacture and supply of certain ducts to Speed Air The orders for these ducts were placed by Speed Air with Ricwil sometime in September 1995 In these orders Ricwil s stationery and order forms were used It was claimed by Ricwil that these contracts were made with and were performed by Ricwil and that subsequently Mr Chew and Ms Aw caused these contracts to be cancelled and transferred to Thermosel As a result these contracts had been diverted from Ricwil to Thermosel and Ricwil had thereby lost the benefit of these contracts 24 The trial judge found that the orders for the manufacture of ducts were placed by Speed Air with Ricwil not Thermosel The contract was performed by Ricwil using its materials and goods After this had been done Mr Chew and Ms Aw caused the contracts to be cancelled and transferred to Thermosel by issuing Thermosel s delivery orders in place of Ricwil s thus enabling Thermosel to receive the profits of the contracts without providing the resources The trial judge held at para 26 28 26 In August and September 1995 Thermosel had no employees of its own although it took on Mr Ding from Ricwil in September 1995 It had no inventory It had no money The business with Speed Air was business of the kind that Ricwil could undertake 27 Ricwil s forms of delivery order were used in each case but not because Thermosel had no stationery of its own It had its own stationery for the purpose of the quotations I see no reason why it did not have delivery order forms I see no reason why Ricwil s forms were not overstamped with Thermosel s name if they were to have been for Thermosel s use I think Ricwil s forms were used because the fabrication work was done by Ricwil The materials used came from Ricwil The goods were drawn from Ricwil s inventory The business with Speed Air was undertaken by Ricwil 28 I find that all the contracts particularised in para 19 of the particulars under para 10 of the statement of claim were contracts made by Ricwil with its customer Speed Air I find that after these contracts had been performed by delivery of the goods sold Mr Chew and Ms Aw caused them to be cancelled and transferred to Thermosel by issuing Thermosel s delivery orders in place of Ricwil s I find that Mr Chew and Ms Aw have failed to act in the interest of Ricwil 25 Counsel for the appellants argues that as the board of directors of Ricwil had never ratified the purchase of the machinery Ricwil had not acquired the machinery and could not claim to be in the business of duct fabrication Ricwil could therefore not have entered into the contracts with Speed Air to supply the ducts These contracts thus belonged to Thermosel even though the stationery used in relation to the placing of these orders was Ricwil s Furthermore Thermosel had already been ordered to pay Ricwil 55 149 08 as expenses incurred by Ricwil on behalf of Thermosel in the course of

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/company/1454-chew-kong-huat-and-others-v-ricwil-singapore-pte-ltd-2000-1-slr-385-1999-sgca-90 (2016-01-30)
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  • Kumagai-Zenecon Construction Pte Ltd and Another v Low Hua Kin[2000] 2 SLR 501; [1999] SGHC 313
    the benefit of an infant Before the expiration of the lease the trustee applied to the lessor for a renewal for the benefit of the infant The lessor refused There was clear proof of the lessor s refusal to renew for the benefit of the infant Then the trustee got the lease made to him The infant brought an action to have the lease assigned to him and for an account of the profits Lord King LC gave judgment in favour of the infant The ratio of the decision is contained in this passage If a trustee on the refusal to renew might have a lease to himself few trust estates would be renewed to cestui que use though I do not say there is a fraud in this case yet he should rather have let it run out than to have had the lease to himself This may seem hard that the trustee is the only person of all mankind who might not have the lease but it is very proper that rule should be strictly pursued and not in the least relaxed for it is very obvious what would be the consequence of letting trustees have the lease on refusal to renew to cestui que use Even before Keech v Sandford there was a basic duty governing a fiduciary a fiduciary must not in general make a profit for himself out of his position Keech v Sandford raised the standard to the highest level a fiduciary cannot have the liberty allowed to all other men The object of the rule is to prevent misuse of delegated power 15 In Hospital Products Ltd v United States Surgical Corporation 1984 156 CLR 41 Mason J stated at pp 96 97 The fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense The relationship between the parties is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position 16 A fiduciary relationship at times may be superimposed on a prior contractual relationship such as employer employee solicitor client and partnership A company director by reason of his fiduciary position subjects himself to the above responsibilities vis à vis the source of his power He cannot use his position for his own advantage Low was not entitled to except himself from this basic rule He was in a worse position because he acted furtively vis à vis Kumagai J Low was in blatant breach of the basic as well as the higher equitable obligation 17 In these circumstances Kumagai J having filed OP 9 92 obtained a court order on 11 February 1952 appointing provisional liquidators of the JV company Originating Petition 9 92 named nine respondents The JV company the investment company and Low were three of the nine respondents It is now necessary to advert to certain important events that happened after the appointment of provisional liquidators Investment company is in trouble 18 The investment company at that time was indebted to Arab Bank plc in the sum of well over 3m The Pac Can shares were pledged as security In April 1992 the value of the Pac Can shares was low In these circumstances Arab Bank made a margin call for 30 000 As the margin call had not been met the bank threatened to sell part of the Pac Can shares which had been pledged to it This was however averted Later the Bank made another margin call for 150 000 by 6 May 1992 19 The investment company clearly was in deep financial trouble The misdeeds of the defendant were the direct cause of it 20 On 12 June 1992 Low his wife Madam Teo Yit Bee and Loo Yong Ling were removed as directors of the investment company 21 Later on 10 July 1992 an extraordinary general meeting of the members of the investment company was held One Jason Lim Cheng Tiong was present at the meeting as the proxy for Low and his wife Teo Yit Bee The following resolution was passed at the meeting That the directors or any one of the directors of the company be authorised to dispose the whole or substantially the whole of the company s undertaking in Pacific Can Investments Ltd shares pursuant to s 160 of the Companies Act Cap 50 Jason Lim abstained from voting Thus the decision to dispose of the Pac Can shares was made by the JV company without any protest from Low 22 In late June after Low and his band had been removed as directors of the investment company Arab Bank made a demand for the repayment of 3 074 040 37 The investment company was not in a position to meet the demand The defendant was made aware of the demand As it was a direct result of his misdeeds Low should have offered assistance He should have paid the bank He failed He left the investment company to fend for itself 23 The provisional liquidator on behalf of the investment company asked the bank to agree to an arranged en bloc sale The bank agreed and gave till 3 July 1992 to effect a married deal 24 The defendant was not averse to the shares being sold In fact he wanted a first right of refusal The investment company was prepared to negotiate with him It wrote to him stating that after redeeming the loan from the bank the surplus would be deposited in an interest bearing account and that the company would be liquidated after disposal of the assets 25 On 15 July 1992 the bank extended the time to effect the en bloc private sale to the following day Later the time was

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/company/1455-kumagai-zenecon-construction-pte-ltd-and-another-v-low-hua-kin-2000-2-slr-501-1999-sghc-313 (2016-01-30)
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  • Re Genesis Technologies International (S) Pte Ltd[1994] 3 SLR 390; [1994] SGHC 132
    winding up because as long as a judicial management order is in force no resolution may be passed or order made for the winding up of a company Its primary objective is to give the company a new lease of life as a going concern It is therefore a device to save the company from creditors who may wish to destroy the company when it can be rehabilitated for the benefit not only of the shareholders but the unsecured creditors as well Hence the Act provides that an order for judicial management can be made only in the following specific circumstances They are a the court is satisfied that the company is or will be unable to pay its debts and b the court considers that the making of the order would be likely to achieve one or more of the following purposes namely i the survival of the company or the whole or part of its undertaking as a going concern ii the approval under s 210 of a compromise or arrangement between the company and any such persons as are mentioned in that section iii a more advantageous realization of the company s assets would be effected than on a winding up 7 Further s 227B 2 of the Act makes it incumbent upon the court to specify the purpose or purposes for whose achievement the order is made 8 Although the primary purpose of judicial management is the protection of the company from its creditors the court should be vigilant to ensure that it is not directly or indirectly used by the directors and shareholders to the detriment of creditors and unsecured creditors in particular The motives of the application should therefore be clearly honourable Further a company whose debts far exceed its assets in effect belongs to its creditors The court must show great heed to the wishes and views of such creditors The grounds of application 9 The company relied on all the three statutory grounds to found the application But the petition failed to identify which of the purpose or purposes of a judicial management would be achieved by the order if the court decided to make it 10 T he petition merely alleged inter alia the company believed that being placed under judicial management would greatly enhance the possibility of its survival as a going concern Administration would also minimize disruption to the company s business and maximize asset realization The company was actively and aggressively seeking new business opportunities through its marketing strategy The company s products had attracted strong interest from various clients worldwide and subject to the finalization and formalities and approval from the respective telecommunication authorities the company had received firm indications from clients of their intentions to place orders for the company s products The approvals were likely to be positive and imminent By the end of 1994 the company hoped to gross at least 24 446 000 in sales This turnover would enable the company to meet

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/company/1453-re-genesis-technologies-international-s-pte-ltd-1994-3-slr-390-1994-sghc-132 (2016-01-30)
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  • Conflict of Law
    Events Archive 2013 Events Archive 2012 Conflict of Law Display By Year select 2005 2004 2003 2002 2001 1999 1997 1996 1995 1994 1992 1991 1977 The Rainbow Joy 2005 3 SLR 719 2005 SGCA 36 Decision Date July 20 2005 Ang Ming Chuang v Singapore Airlines Ltd Civil Aeronautics Administration Third Party 2005 1 SLR 409 2004 SGHC 263 Decision Date November 24 2004 The Hyundai Fortune 2004 4 SLR 548 2004 SGCA 41 Decision Date September 9 2004 Burswood Nominees Ltd formerly Burswood Nominees Pty Ltd v Liao Eng Kiat 2004 2 SLR 436 2004 SGHC 64 Decision Date April 1 2004 Civil Aeronautics Administration v Singapore Airlines Ltd 2004 1 SLR 570 2004 SGCA 3 Decision Date January 14 2004 Evergreen International SA v Volkswagen Group Singapore Pte Ltd and Others 2004 2 SLR 457 2003 SGHC 142 Decision Date June 27 2003 WSG Nimbus Pte Ltd v Board of Control for Cricket in Sri Lanka 2002 3 SLR 603 2002 SGHC 104 Decision Date May 13 2002 Hong Pian Tee v Les Placements Germain Gauthier Inc 2002 2 SLR 81 2002 SGCA 17 Decision Date March 21 2002 Star City Pty Ltd fka Sydney Harbour Casino

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/conflict-of-law?font-size=smaller (2016-01-30)
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  • Ang Ming Chuang v Singapore Airlines Ltd (Civil Aeronautics Administration, Third Party)[2005] 1 SLR 409; [2004] SGHC 263
    hand Mr Shao s point about CAA s argument cutting both ways applied to the issue of translation costs too Mr Shao said that non Chinese documents tendered to a Taiwanese court would have to be translated into Chinese He added that translation and interpretation costs might therefore well be higher if proceedings were to continue in Taiwan rather than in Singapore 26 It seems to me that it is more likely that there will be more documents from Taiwan than from Singapore and that most of the documents from Taiwan will be in Chinese which will require translation to be done if the proceedings were to continue in Singapore Site inspection 27 Mr Koo asserted that the physical conditions at CKS International Airport might be in contention and fundamental to the trial and a Taiwanese court would be in a better position to conduct a site inspection of various items a Runway designs of Runways 05R and 05L and their relative positions to each other b Physical characteristics of Runways 05R and 05L their similarities and their differences c Runway designations at the holding positions of Runways 05R and 05L d Guard lights at holding positions of Runway 05L e Bar lights at holding positions of Runway 05L f Taxiway centreline lights on Taxiway N1 across the threshold of Runway 05R g The lighting and radar system at CKS Airport 28 Mr Shao did not dispute that a Taiwanese court would be better placed to do a site inspection Indeed this was obvious However Mr Shao was of the view that it was pure assumption that a site visit by the court was necessary SIA s counsel Mr Lok Vi Ming added that the accident site had been thoroughly examined and inspected by experts after the accident and accident reports had been completed a long time ago It would be pointless to inspect the accident site now 29 It seems to me that unless the inspection is done on board a similar aircraft from where the pilots were seated and in similar severe weather as on that fateful day the value of a site inspection is likely to be low since it is not disputed that the accident site has been inspected and accident reports have been prepared Nevertheless the possible value of a site inspection cannot be ruled out at this stage Governing law 30 SIA s Taiwan action against CAA is based on certain legislation there such as the Civil Code and the State Compensation Law which imposes liability for intentional or negligent conduct SIA s Singapore action against CAA is based on common law negligence 31 In para 7 3 of the affidavit of Mr Koo filed on 18 February 2004 he opined that the nature of SIA s Singapore action was essentially similar if not identical with SIA s Taiwan action In paras 8 to 10 of his affidavit filed on 27 October 2004 he repeated this view Yet I noted that in para 13 of Mr Koo s earlier affidavit ie the one filed on 18 February 2004 Mr Koo had said under the heading Governing law of the Tort If the matter is to be tried in the Courts of Singapore there may be inconvenience and difficulties in applying the laws of Taiwan by the Singapore Courts The laws of Taiwan are markedly different from the laws of Singapore Taiwan s legal system is a civil law system basically borrowed from Germany while the laws of Singapore originate from the Common Law of Great Britain Thus the former is codified whereas the latter emphasizes upon judicial precedents Certain legal concepts of the laws of Taiwan may be foreign and unfamiliar to the Singapore Courts which may result in difficulty in its application 32 It seems to me that Mr Koo had contradicted himself If the law on negligence in Taiwan is substantially similar as common law negligence then the substantive law in both jurisdictions is not markedly different Differences in procedure are a different point from the governing law which deals with substantive law 33 On his part Mr Shao was of the view that there were differences in the substantive law of both jurisdictions 34 Eventually notwithstanding what Mr Koo had opined about substantial similarity in the laws of negligence in both jurisdictions CAA s counsel Mr Loo Choon Chiaw had to submit that there must be some differences 35 I am of the view that it is inevitable that there will be some differences in the relevant substantive law of both jurisdictions This then makes the question as to the governing law of some significance to CAA s application 36 Mr Koo said that since the accident took place in Taiwan the governing law is the law of Taiwan He also suggested that this would be the law a Singapore court would apply if the proceedings between SIA and CAA were to be heard in Singapore 37 As for Mr Shao he appeared to accept that SIA s Taiwan action is governed by the law of Taiwan However as for SIA s Singapore action he said that he had been advised by SIA s Singapore solicitors that whether the law of Taiwan would govern was a conflict of laws issue for the Singapore court to decide 38 Mr Loo took me through the double actionability rule in Phillips v Eyre 1870 LR 6 QB 1 and the qualification of that rule in Chaplin v Boys 1971 AC 356 and the further qualification in Red Sea Insurance Co Ltd v Bouygues SA 1995 1 AC 190 Red Sea Insurance Mr Loo submitted that Red Sea Insurance appeared to have established the following a The double actionability rule is not inflexible and it is possible to depart from it on clear and satisfying grounds in order to avoid injustice by holding that a particular issue between the parties should be governed by the law of the country which with respect to that issue has the most significant relationship with the occurrence and with the parties b The application of the lex loci delicti is not necessarily limited to any particular issue but may apply to the whole claim if virtually all of the significant factors are in favour of that country 39 In Goh Chok Tong v Tang Liang Hong 1997 2 SLR 641 Goh Chok Tong and Parno v S C Marine Pte Ltd 1999 4 SLR 579 Parno the Court of Appeal said that the rule in Phillips v Eyre and the qualifications in Chaplin v Boys and in Red Sea Insurance are part of the law in Singapore 40 In England the double actionability rule is no longer the general rule The lex loci delicti rule has been adopted by the Private International Law Miscellaneous Provisions Act 1995 c 41 since 1 May 1996 as the general rule subject to exceptions 41 Mr Loo also drew my attention to two other common law jurisdictions which by judicial decision have applied the lex loci delicti as the general rule 42 In Tolofson v Jensen 1994 120 DLR 4th 289 Tolofson a plaintiff passenger was injured in 1979 in a car driven by his father which collided with another car in Saskatchewan The passenger and his father resided in British Columbia where the father s car was registered and insured The other car was registered and insured in Saskatchewan and driven by a Saskatchewan resident Saskatchewan law then imposed a one year limitation period on an action arising from the accident whether or not the plaintiff was an infant It also provided that a driver had to be grossly negligent before a gratuitous passenger could recover damages In 1987 the plaintiff sued his father and the Saskatchewan driver in British Columbia A chambers judge dismissed the Saskatchewan driver s application for a declaration that the action be stayed because Saskatchewan law applied The British Columbia Court of Appeal dismissed his appeal holding that the law of the forum should apply 43 The Supreme Court of Canada allowed the Saskatchewan driver s appeal La Forest J delivered the main judgment which four other judges concurred with The other two judges also concurred with his judgment subject to a qualification which is not relevant for present purposes As I have been anxious about the double actionability rule I will quote extensively from La Forest J s learned exposition To avoid confusion I should mention that the Supreme Court of Canada was dealing with two appeals one being the accident in Saskatchewan and another being an accident in Quebec the facts of which I need not relate The outcome of the other appeal was the same as that in Tolofson La Forest J said at 297 308 Historical Highlights of Choice of Law Rule in Tort The genesis of the existing Canadian rule for the determination of choice of law for torts arising outside a court s territorial jurisdiction is the seminal case of Phillips v Eyre supra There the plaintiff brought an action in England for assault and false imprisonment against the defendant who at the time of the torts was Governor of Jamaica The acts of which the plaintiff complained were part of a course of action taken by Jamaican authorities to suppress a rebellion Later the governor caused an act of indemnity to be passed absolving all persons of liability for any unlawful act committed in putting down the rebellion Much of the judgment given by Willes J is devoted to questions concerning whether a colony like Jamaica could constitutionally enact such a statute these the court answered in the affirmative But the major import of the case relates to the final objection of the plaintiff that assuming the colonial statute was valid in Jamaica it could not have the effect of taking away a right of action in an English court Willes J replied that the objection rested on a misconception of a civil obligation and the corresponding right of action which later he stated is only an accessory to the obligation and subordinate to it As in the case of contract the general rule was that the civil liability arising out of a wrong derives its birth from the law of the place and its character is determined by that law emphasis added at p 28 The substantive law he affirmed is governed by the law of the place where the wrong has been committed That of course would be Jamaica because the torts were wholly committed there Willes J then went on to say that English courts are said to be more open to admit actions founded on foreign transactions than those of other European countries but he added at p 28 that there are restrictions eg trespass to land that exclude certain actions altogether and even with respect to those not falling within that description our courts do not undertake universal jurisdiction emphasis added He then immediately continued with the following frequently cited passage at pp 28 9 As a general rule in order to found a suit in England for a wrong alleged to have been committed abroad two conditions must be fulfilled First the wrong must be of such a character that it would have been actionable if committed in England Secondly the act must not have been justifiable by the law of the place where it was done In this passage Willes J appears to commingle the law dealing with what we would today call jurisdiction and choice of law The first rule is strictly related to jurisdiction as is evident from its context which I have just related The second rule we would normally think of as dealing with choice of law which it is apparent from his earlier remarks was the place of the wrong the lex loci delicti It was not however necessary for Willes J to engage in this type of modern analysis All he was doing was expressing a rule of double actionability to permit suit in England see Chartered Mercantile Bank of India London and China v Netherlands India Steam Navigation Co 1883 10 QBD 521 at pp 536 7 The law was not to remain in this form In Machado v Fontes 1897 2 QB 231 CA an interlocutory appeal heard in a summary way by two judges Willes J s judgment was read in a rather wooden manner to mean something quite different from what he in my view had intended In that case the plaintiff brought action in England for libel alleged to have been published in Portuguese in Brazil Though the report leaves us to surmise the names of the parties would indicate that they were Brazilian and the language being Portuguese the libel would seem to have taken place there The court interpreted Willes J s language as meaning that an act committed abroad could be brought in England in the same way as if it had taken place in England so long as it was not justified or excused under the law of the place where it was committed It was in other words actionable under English law even if not actionable where it was committed if it was unjustifiable there for example if it constituted a criminal act there The approach taken in Machado v Fontes was subjected to considerable judicial and academic criticism see Professor Moffat Hancock s biting Case and Comment on McLean v Pettigrew 1945 23 Can Bar Rev 348 In particular so far as Canadian cases are concerned Viscount Haldane in Canadian Pacific R Co v Parent 1917 AC 195 at p 205 early expressed some reservations about it For my part I would have thought the question whether a wrong committed in Brazil by a Brazilian against another Brazilian gave rise to an action for damages should be within the purview of Brazil and that its being made actionable under English law by an ex post facto decision of an English court would constitute an intrusion in Brazilian affairs which an English court under basic principles of comity should not engage in I could understand the approach if the parties were both English nationals or domiciled in England and there is some support in English cases for that measure of intervention see Chaplin v Boys 1969 2 All ER 1085 HL at p 1094 per Lord Hodson and Lord Wilberforce at p 1104 see also Lord Denning in the same case in the Court of Appeal 1968 1 All ER 283 at pp 289 90 I add parenthetically that it could well be argued though the facts were not conducive to that possibility that unlike a motor vehicle accident the tort of libel should be held to take place where its effects are felt but the court simply assumed that the place of the tort was Brazil In England Machado v Fontes was ultimately overruled by the House of Lords in Chaplin v Boys supra There the plaintiff a passenger on a motor cycle was injured through the negligence of the defendant whose car had hit the motor cycle The plaintiff and defendant were British soldiers stationed in Malta In upholding the action their Lordships adopted a test of double actionability Substantive British law would be applied if the conduct was actionable both in England and in the place where the conduct occurred with a residual discretion to depart from the rule where justice warranted Here the conduct was actionable both in England and in Malta and there was no ground for a discretion to be exercised The majority thus determined that the rule in Phillips v Eyre was a double actionability test While the ratio of the case is difficult to define with precision see Red Sea Insurance Co v Bouygues SA the summary of the result set forth in the well known text of Albert Venn Dicey and JHC Morris Dicey and Morris on the Conflict of Laws 11th ed London Stevens Sons Ltd 1987 vol 2 at pp 1365 6 has been generally accepted Rule 205 1 As a general rule an act done in a foreign country is a tort and actionable as such in England only if it is both a actionable as a tort according to English law or in other words is an act which if done in England would be a tort and b actionable according to the law of the foreign country where it was done 2 But a particular issue between the parties may be governed by the law of the country which with respect to that issue has the most significant relationship with the occurrence and the parties None the less it was on the insecure foundation of Phillips v Eyre as interpreted in Machado v Fontes that the existing Canadian law was erected by this court s 1945 decision in McLean v Pettigrew 1945 2 DLR 65 There it will be remembered a driver and his gratuitous passenger both domiciled in Quebec had a car accident in Ontario and the passenger sued the driver in Quebec Under Ontario law the claim would not have been actionable It would however have been actionable in Quebec had it occurred there Applying the prevalent English law the court found that since the tort was actionable in Quebec and the driver s conduct though not actionable in Ontario was prohibited under the Highway Traffic Act of that province it was not justifiable in Ontario It therefore upheld the plaintiff s action under Quebec law The law as enunciated in McLean v Pettigrew has remained the basic rule in Canada ever since However its fundamental weaknesses began to be revealed in a series of Ontario cases beginning in the 1980s Critique and Reformulation What strikes me about the Anglo Canadian choice of law rules as developed over the past century is that they appear to have been applied with insufficient reference to the underlying reality in which they operate and to general principles that should apply in responding to that reality Often the rules are mechanistically applied At other times they seemed to be based on the expectations of the parties a somewhat fictional concept or a sense of fairness about the specific case a reaction that is not subjected to analysis but which seems to be born of a disapproval of the rule adopted by a particular jurisdiction The truth is that a system of law built on what a particular court considers to be the expectations of the parties or what it thinks is fair without engaging in further probing about what it means by this does not bear the hallmarks of a rational system of law Indeed in the present context it wholly obscures the nature of the problem In dealing with legal issues having an impact in more than one legal jurisdiction we are not really engaged in that kind of interest balancing We are engaged in a structural problem While that structural problem arises here in a federal setting it is instructive to consider the matter first from an international perspective since it is of course on the international level that private international law emerged On the international plane the relevant underlying reality is the territorial limits of law under the international legal order The underlying postulate of public international law is that generally each state has jurisdiction to make and apply law within its territorial limit Absent a breach of some overriding norm other states as a matter of comity will ordinarily respect such actions and are hesitant to interfere with what another state chooses to do within those limits Moreover to accommodate the movement of people wealth and skills across state lines a by product of modern civilization they will in great measure recognize the determination of legal issues in other states And to promote the same values they will open their national forums for the resolution of specific legal disputes arising in other jurisdictions consistent with the interests and internal values of the forum state These are the realities that must be reflected and accommodated in private international law The earlier 19th century English cases such as Phillips v Eyre were alive to the fact that these are the realities and forces to which courts should respond in the development of principles in this area By the turn of the century however the English courts adopted a positivistic rule oriented approach that has since seriously inhibited the development of rational principles in this area see Morguard Investments Ltd v De Savoye 1990 76 DLR 4th 256 for an illustration of this in a different context It is to be the underlying reality of the international legal order then that we must turn if we are to structure a rational and workable system of private international law The major issue that arises in this case is this once a court has properly taken jurisdiction and this was conceded in both the cases in these appeals what law should it apply Obviously the court must follow its own rules of procedure it could not function otherwise see Chaplin v Boys supra What is procedural is usually clear enough though at times this can raise difficult issues From the general principle that a state has exclusive jurisdiction within its own territories and that other states must under principles of comity respect the exercise of its jurisdiction within its own territory it seems axiomatic to me that at least as a general rule the law to be applied in torts is the law of the place where the activity occurred ie the lex loci delicti There are situations of course notably where an act occurs in one place but the consequences are directly felt elsewhere when the issue of where the tort takes place itself raises thorny issues In such a case it may well be that the consequences would be held to constitute the wrong Difficulties may also arise where the wrong directly arises out of some transnational or interprovincial activity There territorial considerations may become muted they may conflict and other considerations may play a determining role But that is not this case Though the parties may before and after the wrong was suffered have travelled from one province to another the defining activity that constitutes the wrong took place wholly within the territorial limits of one province in one case Quebec in the other Saskatchewan and the resulting injury occurred there as well That being so it seems to me barring some recognized exception to which possibility I will turn later that as Willes J pointed out in Phillips v Eyre supra at p 28 civil liability arising out of a wrong derives its birth from the law of the place where it occurred and its character is determined by that law In short the wrong is governed by that law It is in that law that we must seek its defining character it is that law too that defines its legal consequences I have thus far framed the arguments favouring the lex loci delicti in theoretical terms But the approach responds to a number of sound practical considerations The rule has the advantage of certainty ease of application and predictability Moreover it would seem to meet normal expectations Ordinarily people expect their activities to be governed by the law of the place where they happen to be and expect that concomitant legal benefits and responsibilities will be defined accordingly The government of that place is the only one with power to deal with these activities The same expectation is ordinarily shared by other states and by people outside the place where an activity occurs If other states routinely applied their laws to activities taking place elsewhere confusion would be the result In our modern world of easy travel and with the emergence of a global economic order chaotic situations would often result if the principle of territorial jurisdiction were not at least generally respected Stability of transactions and well grounded legal expectations must be respected Many activities within one state necessarily have impact in another but a multiplicity of competing exercises of state power in respect of such activities must be avoided Leaving aside the British practice which itself is giving increasing deference to the lex loci delicti the practice of most states until recently favoured exclusive reference to the lex loci Thus the Mémorandum Dutoit in Actes et documents de la Onzième session at p 20 of the Hague Convention of Traffic Accidents has this to say translation And in fact courts in nearly all the member States have ruled in favour of recourse in principle to the lex loci actus in cases of automobile collisions occurring abroad This statement is supported by an extensive footnote quoting the sources of this law in all the member states Quebec law following European tradition did the same see art 6 Civil Code of Lower Canada This was the case as well in the United States This is attested to in Babcock v Jackson 12 NY 2d 743 1963 where Fuld J stated at p 746 The traditional choice of law rule embodied in the original Restatement of Conflict of Laws 384 and until recently unquestioningly followed in this court has been that the substantive rights and liabilities arising out of a tortious occurrence are determinable by the law of the place of the tort Similarly Australia has bypassed British precedents by adopting the lex loci delicti as the rule governing the choice of law in litigation within Australia see Breavington v Godleman 1988 80 ALR 362 HC There may be room for exceptions but they would need to be very carefully defined It seems to me self evident for example that state A has no business in defining the legal rights and liabilities of citizens of state B in respect of acts in their own country or for that matter the actions in state B of citizens of state C and it would lead to unfair and unjust results if it did The same considerations apply as between the Canadian provinces What is really debatable is whether state A or for that matter province A should be able to do so in respect of transactions in other states or provinces between its own citizens or residents It will be obvious from what I have just said that I do not accept the former British rule adopted in McLean v Pettigrew that in adjudicating on wrongs committed in another country our courts should apply our own law subject to the wrong being unjustifiable in the other country As I see it this involves a court s defining the nature and consequences of an act done in another country This barring some principled justification seems to me to fly against the territoriality principle As well if this approach were generally adopted it would in practice mean that the courts of different countries would follow different rules in respect of the same wrong and invite forum shopping by litigants in search of the most beneficial place to litigate an issue Applying the same approach to the units of a federal state like Canada would be even worse Given the constant mobility between the provinces as well as similar legal regimes and other factors forum shopping would be much easier What then can be said of the double actionability rule along the lines adopted in England in Chaplin v Boys I have already indicated of course that I view the lex loci delicti rule as the governing law However because a rigid rule on the international level could give rise to injustice in certain circumstances I am not averse to retaining a discretion of the court to apply our own law to deal with such circumstances I can however imagine few cases where this would be necessary If one applies the lex loci delicti rule as the rule for defining the obligation and its consequences the requirement under the English rule that the wrong must also be a tort when committed under English law seems to me to be related more to jurisdiction than choice of law There appears to be some merit to the requirement especially when coupled with a discretion not to enforce the requirement but it may be wondered whether it is not excessive particularly if this calls for a meticulous examination of the law Some breathing room was allowed in Chaplin v Boys where the court there retained a discretion to deal with a case without complying with the double actionability rule and it is of interest that in the recent case of Red Sea Insurance Co v Bouygues SA supra the Privy Council used the discretion to deal with a contract under the law of the place where the contract was made rather than the law of the forum However given the fact that the jurisdiction of Canadian courts is confined to matters in respect of which there is a real and substantial connection with the forum jurisdiction I seriously wonder whether the requirement that the wrong be actionable in that jurisdiction is really necessary It may force or persuade litigants who are within the territorial jurisdiction of the court to sue elsewhere even though it may be more convenient for all or most of the parties to sue here The fact that a wrong would not be actionable within the territorial jurisdiction of the forum if committed there might be a factor better weighed in considering the issue of forum non conveniens or on the international plane whether entertaining the action would violate the public policy of the forum jurisdiction 44 The other common law jurisdiction which Mr Loo relied on was Australia and he cited the case of Regie Nationale des Usines Renault SA v Zhang 2002 210 CLR 491 Renault a decision of the High Court of Australia I will adopt part of the headnote A resident of New South Wales was seriously injured in a motor vehicle accident in New Caledonia In proceedings commenced in the Supreme Court of New South Wales he alleged his injuries were caused by the negligent design and manufacture of the vehicle by the defendants which were foreign companies whose principal place of business was in France Neither maintained any office or had any employees in Australia The defendants applied under Pt 10 r 6A of the Supreme Court Rules 1970 NSW to have the proceedings stayed on the ground that the Court was an inappropriate forum for the trial Held 1 by Gleeson CJ Gaudron McHugh Gummow Kirby and Hayne JJ Callinan J not deciding that the substantive law for the determination of rights and liabilities in respect of foreign torts was the lex loci delicti and the double actionability rule had no application in Australia to international torts John Pfeiffer Pty Ltd v Rogerson 2000 203 CLR 503 and Tolofson v Jensen 1994 3 SCR 1022 considered Per Gleeson J Gaudron McHugh Gummow and Hayne JJ A flexible exception should not be recognised in addition to the application of the lex loci delicti in respect of foreign torts 45 The judgment of Gleeson CJ Gaudron McHugh Gummow and Hayne JJ at 59 and 60 stated In the past the first limb of the double actionability rule has been characterised as a technique of forum control specifically applicable in tort cases In the choice of law rules applicable in Australia in intra Australian torts it has now been put aside Pfeiffer established that in the case of intra Australian torts principles of public policy have no role to play in the choice of law to be applied to the lex causae just as those principles have no role to play in the rules respecting recognition and enforcement in Australia of the judgments of Australian courts The double actionability rule should now be held to have no application in Australia in international torts To the extent that the first limb of that rule was intended to operate as a technique of forum control we should frankly recognise that the question is about public policy and confront directly the issues that this may present It cannot be suggested however that such considerations were engaged in the present litigation It is sufficient to say that should a question arise as to whether public policy considerations direct that an action not be maintained in Australia that question is appropriately resolved as a preliminary issue on an application for a permanent stay of proceedings 46 I quote from the judgment of Kirby J also where he said at 127 133 The predominant choice of law rule for torts The predominant international principle for the choice of law in respect of wrongs torts or delicts has long been that the applicable law is that of the place where the wrong was committed lex loci delicti One analysis suggests that this principle was established in Europe as long ago as the thirteenth century At the latest it was firmly entrenched there by the end of the eighteenth century It was by direct borrowing from the civilians in Europe that the rule initially became that observed in the United States of America Phillips v Eyre never gained acceptance in that country The rule of that place of the wrong was also the rule reflected in the First Restatement on Conflicts of Laws published by the American Law Institute in 1934 Some jurisdictions that previously adhered to applying the law of the place of the wrong have tended more recently towards introducing greater flexibility in these rules However this has usually been a result of legislative changes after careful consideration of the issues relating to different types of tort actions with specific rules developed to deal with particular situations In the United States where the flexibility has been the result of a judicial revolution which resulted in the widespread abandonment of the rule of the place of the wrong it has led to considerable uncertainty and difficulty of application Indeed the outcome has been described as hopelessly confused chaotic unpredictable and despite all laudable efforts to explain it incomprehensible Australian law should resist all such temptations When advocating the legislation later enacted the English and Scottish Law Commissions placed evidence before the United Kingdom Parliament concerning the choice of law rules applicable in the jurisdictions of Europe and beyond in respect of torts or delicts Their analysis indicated that the rule upholding the law of the place of the wrong is that which commands almost universal contemporary allegiance It is the rule observed by most jurisdictions of the world common law civil law and otherwise The Supreme Court of Canada regarded its adoption as axiomatic In a matter of international law whatever may be the criticisms that can be levied at the rule there is a strong premium in Australia s observing the rule upheld by so many and diverse legal systems In further support of the foregoing propositions it may be recognised that the rules of private international law exist to fulfil foreign rights and duties not to destroy them After a brief flirtation with a different rule for intra national torts this Court has now accepted the rule that enjoys overwhelming international observance There are powerful perhaps even greater reasons following that logic into cases involving international torts Supporting the preferred rule involves more than adherence to legal symmetry or majority legal opinion It represents a reflection of the time honoured maxim locus regit actum Apart from everything else this rule has sure foundations in human psychology A person will ordinarily assume that he or she is governed by the law of the law area in which the event critical to legal liability happens Admittedly there may be exceptions Analysis may confound ordinary expectations In a particular case exceptionally the presence of a long term pre existing relationship of the parties in the forum may make it unreasonable to

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  • The "Hyundai Fortune"[2004] 4 SLR 548; [2004] SGCA 41
    in any material respects c With what country either party is connected and if so how closely d Whether the defendants genuinely desire trial in the foreign country or are only seeking procedural advantages e Whether the plaintiffs would be prejudiced by having to sue in the foreign court because they would i be deprived of security for their claim ii be unable to enforce any judgment obtained iii be faced with a time bar not applicable here or iv for political racial religious or other reasons be unlikely to get a fair trial 17 These principles were approved and adopted by numerous subsequent English cases eg The El Amria 1981 2 Lloyd s Rep 119 as well as by this court in Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd 1975 1977 SLR 258 and other later cases In The Vishva Apurva 1992 2 SLR 175 this court further reiterated the point that where the case involved an exclusive jurisdiction clause the discretion of the court should not be exercised just by balancing the conveniences Thus in dealing with this question the court should not approach it as if it were dealing with a case of forum non conveniens 18 In more recent years this court had in a trilogy of cases namely The Jian He 2000 1 SLR 8 The Hung Vuong 2 2001 3 SLR 146 and Golden Shore Transportation Pte Ltd v UCO Bank 2004 1 SLR 6 the occasion to determine how the test for a stay should be applied where there was effectively no defence to the claim 19 In The Jian He goods carried on board the vessel were wrongly delivered against a false bill of lading On 24 July 1996 the carrier was unable to deliver the goods to the rightful consignee There was an exclusive jurisdiction clause in favour of China in the bill of lading On 14 June 1997 the plaintiff instituted an action in rem It was amended on 17 July 1997 and the amended writ was served on the defendant owner on 28 August 1997 Appearance was filed the next day A year later the plaintiff applied for summary judgment The hearing of the application was twice postponed The defendant had yet to file their show cause affidavits It was only on 4 November 1998 that the defendant applied to stay all further proceedings in Singapore on the ground that there was an exclusive jurisdiction clause China had a limitation period of one year and it was then too late for the plaintiff to commence any action there The critical point which made this court decide to refuse a stay was that the defendant had no real defence to the claim and there was nothing to proceed to trial in China Following from that it held that the defendant was not really interested in a trial but was only seeking a procedural advantage as limitation had set in in China 20 In The Hung Vuong 2 a cargo of raw sugar was shipped on board The Hung Vuong 3 from Bangkok to be discharged at the main port of South China The carrier eventually delivered the cargo to a party who did not present the bill of lading The holder of the bill sued in Singapore The carrier applied to have the proceedings stayed on the ground of an exclusive jurisdiction clause It would appear that at the time limitation had not yet set in in Vietnam Again this court having ruled that there was no defence to the claim refused a stay which would only result in unnecessary delay 21 In Golden Shore Transportation Pte Ltd v UCO Bank see 18 supra it was a case of the shipowner issuing a second set of bills of lading without ensuring that the original set of bills of lading was returned The person holding the second set of bills of lading used it to obtain the cargo The original set was with the plaintiff which sued in Singapore for its loss The plaintiff did not issue a protective writ in the contractual forum ie India and the time bar had set in in that forum This notwithstanding as there was no real defence to the claim and all factors favoured an action in Singapore except for the time bar defence which had arisen in India the High Court refused a stay of the Singapore proceedings This decision was upheld on appeal by this court With reference to the time bar defence having arisen in the contractual forum it said at 52 In a case where the plaintiff could satisfactorily explain why he did not institute a protective writ in the contractual forum this factor would assist the plaintiff in establishing strong cause But if he could not this factor would not assist him However this did not mean that the plaintiff could not rely on other factors to show strong cause As for the defendant where the plaintiff could not explain the failure to institute a protective writ within time in the contractual forum the benefit to the defendant would be that the plaintiff could not rely on it Our consideration 22 It was settled law that in refusing a stay of proceedings the judge was exercising a discretion and unless it was shown that the judge had wrongly applied the law or had wrongly appreciated the facts or that her decision was plainly wrong the appellate court should not interfere in the exercise of his or her discretion see The Vishva Apurva see 17 supra at 16 23 It was clear to us that the judge had not erred in any manner She correctly set out the principle which should apply in a case of this nature ie exceptional circumstances amounting to strong cause She also held that the burden of showing such strong cause rested with the party who sought to have the action continued in Singapore Having considered the facts which I have outlined

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  • Evergreen International SA v Volkswagen Group Singapore Pte Ltd and Others[2004] 2 SLR 457; [2003] SGHC 142
    forum for the determination of the dispute 28 Counsel for the plaintiffs Mr Richard Kwek submits that Singapore is the natural forum for the litigation of the claims asserted by the defendants He points to strong connection factors in favour of Singapore The collision occurred in Singapore territorial waters After the collision both vessels discharged their respective cargoes in Singapore Damage repairs were also undertaken in Singapore Salvage services were provided by Semco Salvage Marine Pte Ltd a Singapore company 29 Both masters of the colliding vessels were prosecuted in Singapore They pleaded guilty in the criminal proceedings and were each fined 5 000 Both colliding vessels litigated their respective claims in Singapore Surveyors involved in the collision damage survey and cargo surveys were from Singapore The bulk of the evidence is here in that the great majority of the witnesses and other evidential sources such as VTIS records are in Singapore The occurrence of the collision in Singapore in a sense was fortuitous but as the Privy Council said in Lee Kui Jak that carried with it the consequence that the applicable law governing the defendants claim in tort against the plaintiffs is the law of Singapore 30 The defendants downplayed the Singapore connection with the argument that the only disputed issue is quantum and on that issue Singapore is not the natural forum Mr Chong argues that there is no genuine dispute between the parties on liability as the defendants are willing to accept the same apportionment of blame namely 50 as recorded in the order of court in the collision suit between the colliding vessels It is said that quantum is a matter for the lex fori namely the Belgium courts and furthermore evidence on quantum is not located in Singapore In any case as the defendants claims exceed the limit of the Ever Glory under either Convention there is really no dispute on the issue of quantum Mr Kwek in response said amongst other things that damages have to be determined in accordance with Singapore law The value of the vehicles have to be assessed in accordance to the market value of the vehicles destroyed at the time and place of destruction ie Singapore the place where the tort was committed He cited para 1362 of McGregor on Damages 16th Ed 1997 in support 31 The defendants did not in my view point to any factor of sufficient weight to displace what is an overwhelming case of natural forum in favour of Singapore I am satisfied that the plaintiffs have on the facts shown Singapore to be the natural forum for the determination of liability and quantum between the parties The defendants claims against the plaintiffs are for damages in tort The tort was committed in Singapore and it is the law of Singapore that gave rise to a cause of action Even though the defendants total claims would exceed the limit of the Ever Glory under either Convention the fact remains that it is Singapore law that gave rise to the existence of an obligation and would determine the amount of damages that is recoverable under its general law The defendants would have to prove their claims so determined against the limitation fund The position under either Convention is the same See The Happy Fellow 1997 1 Lloyd s Rep 130 at 135 Vexatious or oppressive to the plaintiffs and injustice to the defendants 32 It is to be noted that an injunction will not be granted simply because Singapore is shown to be the natural forum It will be granted to prevent injustice and in the context of this case it means that the effect of litigating in Belgium is vexatious or oppressive I have in addition to consider whether an injunction will deprive the defendants of a legitimate juridical advantage to a greater extent than the oppression caused to the plaintiffs Whilst an injunction acts to restrain the defendants by doing so it indirectly impinges upon the ability of the Belgium courts to act Hence the principle of comity becomes one to which careful regard must be had 33 Both parties referred to various cases in the course of the hearing They provide useful guidance on the circumstances in which an anti suit injunction may be granted However everything depends on the circumstances of the particular case and new circumstances will emerge as was the case here 34 I set out in brief the plaintiffs reasons why the Belgium proceedings are oppressive a The Belgium courts have no connection with the dispute between the plaintiffs and the defendants and Belgium is not the proper forum as the collision occurred in Singapore and that is where the bulk of the evidence relevant for the dispute is located b The Belgium proceedings were commenced with the sole view of taking advantage of a higher limitation regime c Furthermore pursuit of the Belgium action will cause the plaintiffs substantive and procedural disadvantages which are unjust and oppressive The injustice and oppression result both from the features which render Singapore a natural forum and from the fact that the plaintiffs have already established a limitation fund in Singapore according to the 1957 Convention The defendants have ignored and continue to ignore the limitation proceedings as well as all orders made therein and continue to act in breach of all orders made in the limitation proceedings In the circumstances the defendants decision to proceed and continue with Belgium proceedings in itself creates injustice to the plaintiffs d The defendants attempted to force the plaintiffs after the Ever Reach was arrested in Belgium to agree to include in the security wording an exclusive Belgian jurisdiction clause for the defendants claims It demonstrates the defendants continued efforts to vex and oppress the plaintiffs 35 Briefly Mr Chong s submissions are that none of the reasons sought to be relied upon by Mr Kwek constitute oppressive conduct on the part of the defendants either singly or collectively But even if they did they have to be considered against the injustice to the defendants if they were prevented from litigating in Belgium The plaintiffs application should be dismissed because it would not be right to grant an anti suit injunction as it would have the effect of preventing the defendants from litigating their claims in Belgium where they enjoy a higher limit of liability compared to Singapore He argues that the defendants founded jurisdiction in Belgium as of right through the arrest of the Ever Reach and consequently obtained a juridical advantage that will result in their being able to recover under the 1976 Convention a higher percentage of their losses He acknowledges that the plaintiffs commenced limitation action in Singapore as they were rightly entitled to do so But as between the plaintiffs and defendants who are victims of the plaintiffs wrongdoing viewed objectively justice must lie with the defendants It is for the Belgium courts to decide what effect if any it would give to the limitation decree granted in Singapore 36 Mr Chong points out that it is not unusual to see limitation action and liability issues dealt with in separate jurisdictions There is nothing vexatious or oppressive for liability proceedings to continue in a jurisdiction different from that of the limitation action 37 It has been submitted that the English courts in identical situations faced by this court have not taken the view that to allow liability proceedings to continue in a foreign country which applies a different limitation regime would be disregarding the limitation decree previously granted by its own court Likewise this court should not take the view that in refusing to grant the anti suit injunction it would be disregarding an order of court previously pronounced by this court The reason why the English courts have not adopted such an attitude is that a they are conscious of the limited nature of a declaratory order ie it is not coercive and b although a limitation decree is good against the world it is only good in so far as it concerns the claimants who wish to participate in the proceedings in the country in which the limitation decree is obtained The reasoning does not stand up to scrutiny The rationale put forward for the so called attitude of the English courts is unfounded My attention was not drawn to the specific cases where counsel said the English courts were faced with identical situations 38 There are English cases where a stay of the liability action was sought on forum non conveniens basis that it should more appropriately have been brought in another jurisdiction The availability of a higher limit was a factor raised in the stay application as a juridical advantage available in the English proceedings Not featured in the decisions is the shipowner s prerogative to choose the forum for the limitation action In Caspian Basin Specialised Emergency Salvage Administration v Bouygues Offshore SA No 4 1997 2 Lloyd s Rep 507 Rix J was concerned with whether the limitation action commenced in England should be stayed on the basis that it should be brought in South Africa as an adjunct of the liability action The barge owned by Bouygues was lost in South African waters whilst under tow by the tug belonging to Azerbaijani interests Caspian Bouygues had chartered the tug from Ultisol Transport Contractors Ltd who had time chartered the tug from Caspian No case was cited to Rix J in which a limitation action validly commenced in England has been stayed on the forum non conveniens basis that it should more appropriately have been brought in another jurisdiction A stay of the limitation action was declined principally on the ground that it is not for the liability claimant to choose the forum for limitation but for the shipowner who seeks to limit His decision was upheld by the Court of Appeal in Bouygues Offshore SA v Caspian Shipping Co Nos 1 3 4 5 1998 2 Lloyd s Rep 461 39 The situation I am confronted with is different The question I am supposed to be concerned with is whether the liability action is better fought in Belgium or in Singapore But the question is not as simple as it is made out to seem Either Convention envisages a single limitation fund against which all possible claims arising out of the collision would be brought Mr Chong accepts that the limitation decree binds the defendants in that it is good against the world but it does not mandate the defendants to prove their claim against the limitation fund Mr Chong said that the defendants have elected not to participate in the limitation fund and are taking a risk by going to Belgium In other words the defendants have decided to stand or fall by their decision to sue and continue with proceedings in Belgium It is said that the Belgium courts would apply the 1976 Convention and not recognise the Singapore decree and limitation fund constituted on 4 November 1999 That is the plaintiff s dilemma in the present case 40 The conduct complained of is not just the continuation of proceedings in an inappropriate forum namely Belgium Mr Wang Horng Chuen Deputy Junior Vice President Marine Department Shipping Division in Evergreen International Corporation alleged that the defendants Belgium proceedings are in blatant contravention of the limitation decree and orders of the Singapore court It is said that the defendants commenced action in Belgium to force the plaintiffs to defend the cargo claim in a 1976 Convention country when the plaintiffs had already obtained a limitation decree and constituted a limitation fund in Singapore based on 1957 Convention Mr Kwek points out that no authority was put forward in support of the defendants interpretation of the phrase good against the world The meaning assigned by the defendants goes against the substratum of the 1957 Convention The whole purpose of the 1957 and 1976 Convention is to enable a shipowner to set up one fund against which all claimants would be required to make their claim Mr Kwek said and I agree with him that the defendants are still claimants against the limitation fund even though they choose not to make a claim against the fund 41 The question for consideration is whether the conduct of the defendants in continuing with the Belgium proceedings is vexatious or oppressive and is hence unconscionable Lord Hobhouse in Turner v Grovit 2002 1 WLR 107 at 117 explained that the power to make the restraining order is dependent upon there being wrongful unconscionable conduct of the party to be restrained of which the applicant is entitled to complain and has a legitimate interest in seeking to prevent He said that the word unconscionable is derived from English equity law Injunctive relief is based on equity The words vexatious or oppressive have been used in relation to the conduct of the party to be restrained They are derived from the basic principle of justice As the complaint is that unconscionable vexatious or oppressive conduct lies in the pursuit of proceedings in Belgium an assessment or evaluation of the conduct complained of and the nature of the plaintiffs rights or interests that are being infringed or threatened is needed 42 It cannot be argued and was not and rightly so that the limitation decree and thereafter the limitation fund was not properly obtained and constituted in Singapore The limitation decree is that of a competent court having jurisdiction as the natural forum over the dispute on liability and quantum The decree has not been set aside or varied Singapore was also the plaintiffs choice of forum for commencing limitation action There is also the defendants election not to prove their claims against the limitation fund These are all objective factors which weigh heavily in the balancing exercise whether or not injustice would be caused to the plaintiffs by not granting the injunction and whether a grant would deprive the defendants of a legitimate juridical advantage to a greater extent than the oppression caused to the plaintiffs The constitution of a limitation fund in Singapore provides the necessary focal point for consideration of the issues at hand 43 Section 136 of the Merchant Shipping Act confers a right to limit liability in respect of relevant maritime claims arising from a particular occurrence if the incident arose without the fault or privity of the shipowner The plaintiffs commenced limitation action in Singapore as it was envisaged that there would be several claims Thus the question of limitation cannot be dealt with as between the Ever Glory and Hual Trinita but must be dealt with as between the plaintiffs and all the claimants and also as amongst the different claimants themselves As explained by Longmore J in The Happy Fellow a limitation action is a special proceeding to which all potential claimants are made parties 44 Sheen J in The Falstria 1988 1 Lloyd s Rep 495 at 497 explained that t he essence of a limitation action is that the plaintiffs in that action seek a decree which is valid against all possible claimants that a limit is set upon the eventual liability of the plaintiffs to all those claimants A limitation decree not set aside as was the case here is good against the world See The Volvox Hollandia 1988 2 Lloyd s Rep 361 The Happy Fellow 45 The defendants here have renounced their right to prove against the limitation fund in Singapore by pursuing their claims against the plaintiffs in Belgium which applies the 1976 Convention The defendants underlying cause of action to sue the plaintiffs in tort for loss and damage arising from the collision is unaffected by the plaintiffs right to limit liability under s 136 Merchant Shipping Act in the absence of fault or privity The Happy Fellow Jurisdiction was established as the defendants were able to assert their maritime claim in a country where the Arrest Convention is in force and jurisdiction was obtained by arresting the Ever Reach in Belgium Undoubtedly the defendants have a strong commercial interest in seeking higher limit and it would be unrealistic to expect them not to do so given the size of their claims Mr Chong said the defendants had elected not to claim against the limitation fund as was their right But that is not to say in the circumstances of the present case the continuation of proceedings in Belgium and even though jurisdiction was properly founded should be sanctioned 46 In my judgment the vexatious or oppressive conduct of the defendants lies in their unlawful challenge to the plaintiffs right to choose the limitation forum and the invasion or attack on the plaintiffs legal rights conferred by the limitation decree and limitation fund The limitation decree which is a declaratory order is binding and conclusive whether or not any consequential relief is given O 15 r 16 See also Halsbury s Laws of Singapore Vol 10 para 120 216 47 The right to claim limitation in any particular forum is a right that belongs to the shipowner alone and that choice is not to be pre empted by a claimant In other words a claimant cannot dictate where the limitation fund is to be constituted See The Volvox Hollandia Rix J in Caspian Basin Specialised Emergency Salvage Administration v Bouygues Offshore SA No 4 with whom the Court of Appeal agreed with relied on The Volvox Hollandia for the proposition that it would be wrong for a claimant to seek to usurp a shipowner s choice of forum for his limitation action by seeking a negative declaration in the liability action to the effect that the shipowner is not entitled to limit In the same way the effect and consequence of litigating in Belgium like the device of the negative declaration of non entitlement to limit is another means or way to frustrate or subvert the plaintiffs choice of forum for pursuing a

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/conflict-of-law/1479-evergreen-international-sa-v-volkswagen-group-singapore-pte-ltd-and-others-2004-2-slr-457-2003-sghc-142 (2016-01-30)
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