Conflict of Laws

• Published date: 01 December 2006
• Date: 01 December 2006
• 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.

Introduction

9.1 For 2006, there were seven conflict of laws cases which will be examined in this review.

9.2 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.

Stay of proceedings

9.3 There were three cases relating to stay of proceedings. The first was Kuala Lumpur City Securities Sdn Bhd v Boston Asset Management Pte Ltd[2006] SGHC 99. The facts of this case are somewhat convoluted but for the purposes of this review can be summarised as follows.

9.4 The plaintiff is a Malaysian securities firm based in Kuala Lumpur. The second defendant was the Chief Executive Officer and a director of the first defendant, a company incorporated in Singapore functioning as an asset management agent. The first defendant opened a trading account with the plaintiff which was guaranteed by the second defendant. Market volatility saw substantial losses being incurred by the defendants and the plaintiff wrote to the first defendant demanding payment of outstanding sums. When payment was not forthcoming, the plaintiff commenced proceedings against the first defendant. When no appearance was entered, the plaintiff applied for and obtained default judgment against the first defendant. Proceedings were also commenced against the second defendant and after a series of applications by the second defendant seeking extensions of time to file his defence, the plaintiff also obtained default judgment against the second defendant.

9.5 Both defendants applied to set aside the default judgments, for stay of proceedings and for stay of execution on the judgments. These applications were dismissed by the assistant registrar and the defendants appealed. In the High Court, the appeal was also dismissed by Lai Siu Chiu J.

9.6 With regards to the application for stay of proceedings, the first defendant contended, under the doctrine of forum non conveniens, that Malaysia was the more appropriate forum for the plaintiff”s claim. Lai J held that since the first defendant had failed to discharge the burden of raising an arguable defence thereby allowing the court to set aside the default judgment, there was no necessity to consider this point. This must be correct. A stay application based on forum non conveniens would be, as a matter of principle, appropriate before judgment had been obtained or, in the case of a default judgment, if and after the judgment had been set aside.

9.7 The second defendant contended that the proceedings should be stayed on the basis of an exclusive jurisdiction clause in the guarantee in favour of the courts of Malaysia. Lai J also refused to stay the proceedings although the basis upon which it was made is not as clear. She could have dismissed the second defendant”s application on the same basis as the first defendant”s, ie, that the burden of raising an arguable defence had not been discharged. This position would have been justifiable since a stay application, whether based on forum non conveniens or a jurisdiction clause, is a jurisdictional matter.

9.8 However, Lai J did not take this approach. Instead, she seemed to consider the plaintiff”s submissions that notwithstanding the exclusive jurisdiction clause, there were good grounds for allowing the proceedings in Singapore to continue.

9.9 It is useful to make a number of observations here. First, by considering the plaintiff”s submissions, the starting point must be that where an exclusive jurisdiction clause exists, the court should order a stay unless, and this is the second point, there is strong cause for refusing the stay. It is not clear if Lai J was referring to the ‘strong cause’ test when stating that ‘good grounds’ were needed for allowing the proceedings in Singapore to continue. Since no authorities were cited in this part of the judgment, it is difficult to ascertain whether Lai J was following a clear line of authorities using the ‘strong cause’ test or whether she was choosing a different approach. Thirdly, of the plaintiff”s submissions, Lai J seems to focus on the

point that it had not been proved that Malaysian law did not materially differ from Singapore law. It is odd for the court to focus on this because even if it had been proved that there was a material difference, this would not necessarily have constituted strong cause to refuse the stay. If this analysis is correct, then the court should have ordered a stay since strong cause had not been shown (assuming that the court was adopting the traditional test of ‘strong cause’). This is not to say that the decision to refuse the stay was wrong. As part of the plaintiff”s submissions, it was argued that the defendants had no arguable defence to the plaintiff”s claims. As such, the court could have taken this to mean that the defendants did not genuinely desire trial in the contractually chosen forum thereby leading to the inference of the existence of exceptional circumstances leading to strong cause.

9.10 The second case was Peters Roger May v Pinder Lillian Gek Lian[2006] 2 SLR 381. The appellant was the executor of the last will of the testator who had settled in Singapore, had become a citizen and, despite travelling extensively over the years, invariably returned to Singapore. On his last trip to England, due to a diagnosis of deep vein thrombosis, he was prevented from returning to Singapore as planned. Subsequently, his health took a turn for the worse and he unexpectedly passed away in England. Probate proceedings were commenced and an order granting probate was made with the respondent widow”s consent. The order, however, left unresolved the issue of the testator”s domicile. The appellant applied under s 7 of the Probate and Administration Act (Cap 251, 2000 Rev Ed) for a determination whether a notation should be endorsed on the grant of probate that the testator died domiciled in Singapore. The respondent applied to stay these proceedings. The assistant registrar granted the respondent”s application and the executor appealed. In the High Court, V K Rajah J (as he then was) allowed the appeal.

9.11 With regards to the issue of forum non conveniens, Rajah J set out in detail the existing law according to the locus classicus, Spiliada Maritime Corporation v Cansulex Ltd[1987] AC 460 (‘The Spiliada’) and as adopted by various cases in Singapore. What is useful is the court making explicit that the task before it was to ‘find that forum which is the more suitable for the ends of justice, and is preferable, because pursuit of the litigation in that forum is more likely to secure those ends’ (at [21]). It was to this end that the two-stage test had been formulated.

9.12 Further, in applying this test, the court had to balance competing interests and weigh the factors under consideration according to the requirements of each factual matrix. Put another way, the same factors may be accorded different weightage by the courts in different situations.

9.13 It is not necessary to traverse the court”s entire application of this test save to make four observations. First, Rajah J considered it highly relevant that the respondent had consented to the grant of probate to the executor and opined that she could not now contend that Singapore was not an appropriate forum to determine and notate the testator”s domicile for the purposes of the grant of probate. It is not immediately clear why this is highly relevant. Acknowledging the forum”s jurisdiction does not preclude one from contending that there is a clearly or distinctly more appropriate forum elsewhere. Indeed, this is what the respondent needs to show in the first stage of the two-stage test in The Spiliada. It is not necessary for one to show that Singapore was not an appropriate forum. However, one can feel intuitively drawn to the consideration as presented by Rajah J as it does seem capricious of the respondent. In fairness, the court did not consider this point conclusive and perhaps the inference here is that the respondent”s evidential burden is simply a more onerous one to discharge.

9.14 Secondly, the court observed that even if the respondent”s submission that the majority of relevant witnesses were in England (therefore making it a more convenient forum) was accurate, the availability of...