Art Trend Ltd v Blue Dolphin (Pte) Ltd and Others

• Jurisdiction: Singapore
• Judge: Lai Kew Chai J
• Judgment Date: 15 September 1982
• Neutral Citation: [1982] SGHC 29
• Date: 15 September 1982
• Subject Matter: Hardship to defendants,Effect of injunction brought defendants' business to a grinding halt with huge financial losses,Injunctions,Plaintiff's reprehensible conduct,Interim injunction,Mareva injunction,Application for removal,Civil Procedure
• Docket Number: Suit No 1804 of 1982
• Published date: 19 September 2003
• Defendant Counsel: M Karthigesu (Khattar Wong & Pnrs)
• Court: High Court (Singapore)
• Plaintiff Counsel: Yang Lih Shyng (Rodyk & Davidson)

At the conclusion of the hearing of the plaintiffs` motion to continue the interim Mareva injunctions obtained on 6 May 1982 as varied on 21 May 1982, I discharged the injunctions. I also ordered the plaintiffs to pay the first and second defendants damages to be assessed by the registrar which the first and second defendants had sustained by reason of the interim injunctions. I now give my reasons.

By this action commenced on 5 May 1982 the plaintiffs made two claims against the first defendants, a Singapore company, viz: (1) the sum of US$33,943.05 under a bill of exchange due on 17 July 1981 drawn by the plaintiffs and accepted by the first defendant plus interest and commission under a discounting and financing agreement entered into between them and dated 12 February 1980; and (2) the sum of US$326,202.17 under a written guarantee dated 11 November 1981 given by the first defendant in favour of the plaintiffs and in which the first defendant had guaranteed the payment of all the liabilities of a Nigerian company known as Ojomo Industries (Nigeria) Ltd (hereinafter referred to as `Ojomo`) plus interest at the date of the writ amounting to US$128,394.23 and further interest, and commission payable under the guarantee.

The plaintiffs have also asserted two claims against the second defendant, a partnership in Singapore, viz: (1) the sum of US$182,407.93 under a bill of exchange due on 6 May 1981 drawn by the plaintiff and accepted by the second defendant plus interest as at the date of the writ amounting to US$56,521.27 and further interest and commission payable under a discounting and financing agreement entered into between them and also dated 12 February 1980; and (2) the sum of US$326,202.17 under a written guarantee dated 21 April 1980 given by the second defendants in favour of the plaintiffs and in which the second defendants had guaranteed payment of all the liabilities of the first defendant plus interest as at the date of the writ amounting to US$128,394.23 and further interest and commission. It should be noted that the second claim against the second defendants arises out of the self-same Ojomo`s liabilities to the plaintiffs.

Seeing that the second claims of the plaintiffs against both the first and second defendants, as sureties, arise out of the self-same liabilities of Ojomo, the total claims of the plaintiffs on the two bills of exchange and under the guarantees are approximately US$727,468.65 plus further interest and commission. I have mentioned this global figure of the claims as against both defendants because, as will be seen later in these grounds of decision, the interim injunctions obtained had sought to freeze the assets of both defendants up to US$1.23m. It is also clear that the plaintiffs by the interim injunctions had effectively frozen one set of assets of the first defendant and another set of assets of the second defendant for their single claim arising out of the liabilities of Ojomo.

On the day following the filing of the writ of summons, the plaintiffs obtained ex parte the interim Mareva injunctions against both defendants. In effect both the defendants were restrained from removing from Singapore or otherwise disposing, whether within or without the jurisdiction, of any of their asset or assets (including immovable properties and moneys in bank accounts) in which they were beneficially interested, or otherwise pledging them or giving them by way of security.

The defendants were also restrained from re-directing any payments made or to be made by their debtors from their accounts with their several banks.

Paragraph 3 of the injunctions stated as follows:

The defendants shall not be prevented from dealing in any way with their assets in so far as the assets of the defendants available to meet the Plaintiffs` claim herein exceed in aggregate the sum of US$1,230,000.

At least 12 banks of the defendants were served with the injunction order. The business operations of the defendants were brought to a grinding halt. The proviso was of no assistance to the defendants. As the plaintiffs well knew, or must have known, unless each of the defendants had assets in a bank which in each bank exceeded US$1.23m, the banks could not, and quite properly would not, as they did not, allow any further transactions in the accounts of both the defendants. I was also unable to see any justification in the plaintiffs freezing US$1.23m worth of assets of the defendants. After all, their effective total claim against both of them was only US$728,468.65 plus further interest and commission.

The defendants protested vigorously against the interim injunctions. By their solicitors` letter dated 10 May 1982 the second defendants pointed out that the claims against them as pleaded amounted to US$740,261.53 whereas the injunction sought to freeze assets up to US$1.23m. They asserted that they were an old established firm in Singapore which enjoyed a very good reputation with bankers and that the service of the injunctions on all their bankers had brought their daily transactions to a grinding halt.

They also referred to the two landed properties which were covered specifically by the injunctions, namely, the building known as `Malaysia Arcade` at No 75 High Street, Singapore and No 9 Lyndhurst Road, Singapore. Both properties are owned as to 3/4% shares thereof by the three partners in the second defendant firm. They are together worth S$7.3m. The valuation does not appear to me to be unreasonable. The first property is subject only to a S$100,000 mortgage. It is quite evident that the second defendants have owned these assets for a long time, as the plaintiffs well knew, and they were in themselves more than sufficient to meet the claims of the defendants. The second defendants indicated that they had never intended to dispose of these properties, as their long ownership of them amply demonstrated.

In the circumstances, they requested the plaintiffs to give notice to all the bankers of the second defendants that they, the plaintiffs, would not be enforcing their rights under the injunctions in relation to the bank accounts of the second Defendants. But the plaintiffs stood firm. They kept on the pressure. It was only some 11 days later that they agreed to a variation of the injunctions as contained in the order of this court dated 21 May 1982. Both the defendants had required and had agreed to the variation to lift the freeze on their bank accounts without prejudice to their right to have the interim injunctions as varied discharged.

I now turn to the facts giving rise to these proceedings. I begin by saying something about the parties to these proceedings and Ojomo.

The plaintiffs are a company with limited liability incorporated in England. They are a confirming house and as such they finance international trade....