Conflict of Laws
| Published date | 01 December 2004 |
| Author | Joel LEE Tye Beng LLB (Hons) (Wellington), LLM (Harvard), DCH (AIH); Barrister and Solicitor (New Zealand), Advocate and Solicitor (Singapore); Associate Professor, Faculty of Law, National University of Singapore; Visiting Associate Professor, Faculty of Law, University of Copenhagen, Denmark. |
| Citation | (2004) 5 SAL Ann Rev 145 |
| Date | 01 December 2004 |
8.1 In 2004, the Singapore Law Reports contained three reported cases which will be examined in this review. In addition, there were also five unreported judgments which are worthy of note.
8.2 As in previous years, it is useful to note that conflict of laws cases sometimes relate to other areas of law. In these situations, this review will only examine those parts of the case that are relevant to the field of conflict of laws.
8.3 For the sake of completeness, it is appropriate to mention that two cases reported in 2004 have already been reviewed last year. These cases are Evergreen International SA v Volkswagen Group Singapore Pte Ltd[2004] 2 SLR 457 and Golden Shore Transportation Pte Ltd v UCO Bank[2004] 1 SLR 6.
8.4 In the year under review, there were two cases relating to questions of jurisdiction in the context of conflict of laws. Both these cases also brought up issues of procedure.
8.5 In Tao Commodity Trader Inc v Fortis Bank (Nederland) NV[2004] SGHC 30, the defendant was a Dutch bank incorporated in the Netherlands. It was registered as a ‘foreign company’ under Part XI, Division 2, of the Companies Act (Cap 50, 1999 Rev Ed) in June 2000. In compliance with s 368(1)(e) of the Companies Act, the Deputy General Manager, Gijsbert Schot (‘Schot’), was one of two employees named as agents who were authorised to accept service of process on behalf of the defendant.
8.6 In 2001, the defendant sold and transferred its business operations in Singapore to its parent company. As part of these arrangements, Schot was
employed by the parent company. The defendant closed its Singapore branch and ceased to carry on or have a place of business in Singapore from March 2002. A notice of cessation of business was lodged with the Registrar and duly acknowledged. By April 2003, the defendant”s name had been removed from the register. A notice of cessation of agency, however, was not lodged.
8.7 On 31 October 2003, the plaintiff served a writ on the defendant by serving Schot at his residence. It is not clear from the judgment what the cause of action was, but service was effected in accordance with s 376(b) of the Companies Act. The defendant applied to set aside service of the writ. The assistant registrar decided the matter in the defendant”s favour and set aside service.
8.8 The court began by stating that the application before it depended upon whether jurisdiction over the defendant existed based on the governing statutory regimes of s 16 of the Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) (‘SCJA’) and Part XI, Division 2, of the Companies Act.
8.9 Counsel for the defendant argued that service had not been valid because at the time of the service, the defendant was no longer registered as a foreign company and had ceased to carry on business in Singapore. Counsel for the plaintiff argued that the status of the defendant”s agents to accept service was independent of whether the defendant was registered or was carrying on business.
8.10 The court considered these arguments along with academic and case authorities and concluded that the statutory regime of in personam jurisdiction envisioned in s 16 of the SCJA mirrored that of the common law. Since at common law a company could not be served if it had ceased to carry on business, then it had to follow that once the defendant had ceased to be registered under the Companies Act and had ceased to carry on business in Singapore, any purported service on the defendant was not valid.
8.11 Two points may be made about this decision. First, this is the first time that this question has been directly addressed in a decision. This decision makes clear that registration of a foreign company under Part XI, Division 2, of the Companies Act goes towards establishing a nexus of jurisdiction which then determines whether the relevant service provisions apply to the company in question. Conversely, de-registration of the company removes that nexus. Presumably, an unregistered foreign company carrying on business in Singapore has sufficient ‘presence’ to still attract jurisdiction and be served in accordance with the Rules of Court.
8.12 Second, the plaintiff had relied on a number of English case authorities and academic works by Prof Walter Woon which support the proposition that a de-registered company could nonetheless still be served under s 376(b) of the Companies Act. This decision goes against this line of authorities. The court acknowledged this and maintained that while there is force to the argument that, as a matter of policy, it is better to have a wide jurisdictional net ameliorated by the doctrine of natural forum, courts cannot create jurisdiction when there is none. The writer agrees with this decision. Service itself cannot constitute a nexus of jurisdiction. At common law and in the regime under s 16 of the SCJA, nexus is supplied by presence. Presence for a company is constituted by the concept of carrying on business. This decision makes it clear that registration under the Companies Act constitutes sufficient nexus.
8.13 The second case is Cheong Ghim Fah v Murugian s/o Rangasamy (No 2)[2004] 3 SLR 193. Although this case does not directly raise an issue relating to conflict of laws, it has an impact upon whether a Singapore judgment may eventually be recognised and enforced. As such, it is useful to briefly mention it here.
8.14 It is not necessary to go into the factual background of this case. Suffice it to say, the plaintiffs had commenced an action in the High Court and the damages awarded fell well within the pecuniary limit of the District Court. The assistant registrar having ruled that costs should be taxed on the District Court scale, the plaintiffs applied to have costs taxed on the High Court scale.
8.15 The court opined that, ordinarily, where Subordinate Court proceedings were commenced in the High Court, costs awarded should be assessed on the Subordinate Courts scale. This stemmed from a desire to have proceedings heard at the correct level of forum. However, in some cases, where there was ‘sufficient reason’ within the meaning of s 39 of the Subordinate Courts Act (Cap 321, 1999 Rev Ed) to initiate proceedings in the High Court, then costs could be taxed on the High Court scale.
8.16 In this case, the court held that there was indeed ‘sufficient reason’ and ordered costs to be taxed on the High Court scale. There were two reasons for this decision. The first was not related to conflict of laws and had to do with counsel”s reasonable expectations that the damages recoverable would exceed the pecuniary limit of the District Courts.
8.17 It is the second reason that is relevant to this review. If a Subordinate Court judgment could not be enforced as a foreign judgment in another jurisdiction, this could constitute ‘sufficient reason’ for commencing proceedings in the High Court. On this second reason, three observations may be made. Firstly, the court opined that where proceedings are commenced in the High Court only because of a desire to enforce the judgment in another jurisdiction, costs should continue to be taxed at the Subordinate Courts scale. Therefore, this means that the decision to allow costs to be taxed on the High Court scale in this case depended solely on the first reason.
8.18 Secondly, it is not in every instance of a desire to enforce a Singapore judgment in another jurisdiction that there is sufficient reason to commence proceedings in the High Court. It must be that a judgment of the Subordinate Courts would not be recognised in the jurisdiction in which the judgment is sought to be enforced, and the sole means of enforcing the judgment must lie in that jurisdiction. By way of contrast, V K Rajah JC (as he then was) referred to Sunlink Engineering Pte Ltd v Koru Bena Sdn Bhd[2003] 2 SLR 452 where Tan Lee Meng J had transferred proceedings to the Subordinate Courts and observed that the need to meet another country”s legislation on reciprocal enforcement of foreign judgments did not, without more, confer on a plaintiff the right to be heard in the High Court. In that case, the foreign defendant had a presence and assets in Singapore and there was little question of the plaintiff being able to enforce a judgment of the Subordinate Courts in Singapore.
8.19 While this seems clear, one wonders what would happen if it was reasonably foreseeable that the entire judgment could not be satisfied by the defendant”s assets in Singapore and that the plaintiff would have to seek enforcement in another jurisdiction? Would this constitute sufficient reason to commence proceedings in the High Court? Taking Rajah JC”s requirement of the foreign jurisdiction having to be the sole means of enforcing the judgment, it would appear that the answer is no. However, this hardly seems just and the writer suspects the court will take a fairly robust and commonsense approach to resolving this matter.
8.20 Finally, it is important to point out that this case dealt with the question of registering a Singapore judgment in Malaysia under the Malaysian Reciprocal Enforcement of Judgments Act 1958. Since it is also possible to enforce a subordinate court judgment by common law action in Malaysia, the statements in this case must be restricted to situations where a plaintiff wishes to transfer proceedings to the High Court in order to seek
eventual registration in another jurisdiction. Otherwise, there could never be ‘sufficient reason’ for proceedings to be transferred to the High Court as long...
To continue reading
Request your trial