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

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: Lai Kew Chai J
• Judgment Date: 15 September 1982
• Neutral Citation: [1982] SGHC 29
• Citation: [1982] SGHC 29
• 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
• Plaintiff Counsel: Yang Lih Shyng (Rodyk & Davidson)
• Defendant Counsel: M Karthigesu (Khattar Wong & Pnrs)
• Docket Number: Suit No 1804 of 1982
• Date: 15 September 1982
• Published date: 19 September 2003

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...