Arubugam Suppiah v Curt Evert Borgensten

• Jurisdiction: Singapore
• Judge: Woo Bih Li JC
• Judgment Date: 25 July 2001
• Neutral Citation: [2001] SGHC 199
• Court: High Court (Singapore)
• Published date: 15 March 2013
• Year: 2001
• Plaintiff Counsel: Suresh Nair (Allen & Gledhill)
• Defendant Counsel: Peter Gabriel and Diane The (Gabriel Peter & Partners)
• Citation: [2001] SGHC 199

JUDGMENT:

BACKGROUND

1. The Plaintiff Arubugam Suppiah (‘Suppiah’) and the Defendant Curt Evert Borgensten (‘Borgensten’) are shareholders of a company incorporated in the Bahamas called Johnson Industries Ltd (‘JIL’) in the following proportions:

Borgensten : 70%
Suppiah : 30%

2. JIL owns 100% of a company incorporated in Singapore called Johnson Industries Pte Ltd (‘JIPL’).

3. JIPL in turn owns various companies.

4. As a result of various disputes between Suppiah and Borgensten, the following actions were commenced in Singapore:

(a) Suit No 435 of 1999
(b) Originating Summons No 443 of 1999
(c) Originating Summons No 1348 of 1999

5. These actions were settled under a Deed of Agreement dated 4 February 2000 (‘the Deed’).

6. The relevant terms of the Deed are as follows:

Clause 3.1

In consideration of the payment of the non-refundable Option Price in accordance with this clause and the grant of the Option in accordance with clause 4, the parties hereto agree to all the terms herein

Clause 3.2

Borgensten shall pay Suppiah the Option Price in the following instalments:

(a) The first payment of the sum of Singapore Dollars One million (S$1,000,000.00) on the date hereof to Suppiah; and

(b) a second payment of the sum of Singapore Dollars One million (S$1,000,000.00) on or before six (6) months from the date hereto.

Clause 8

It is hereby agreed that Borgensten shall be entitled to appoint and remove all of and any number of the directors to the Board of Directors of JIL and JIPL other than the director appointed by Suppiah provided always that Suppiah shall be entitled to appoint and remove one (1) director (himself or his representative) to the Board of JIL and JIPL. Suppiah shall only be entitled to appoint the said one director each to the Board of JIL and JIPL for so long as he owns the Suppiah Shares and Borgensten hereby undertakes to procure such appointment by Suppiah to be effected at the respective companies. The quorum for board of directors meeting in JIL and JIPL shall be any two directors.

Clause 9

9.1 Borgensten hereby irrevocably and unconditionally grants to Suppiah after the finalisation of the accounts of JIL for the financial year ending March 2000 and in any event after 30 June 2000 if such accounts are not finalised by then, the option to require Borgensten to purchase from Suppiah the Suppiah Shares, free from all lien charges and any encumbrances and with all rights attached thereto as at the date of exercise of the Put Option. This Put Option may be exercised by Suppiah in respect of all (and not part only of the Suppiah Shares) by the service of a written notice on Borgensten in the form of Schedule Two. Upon receipt of such notice, Suppiah shall be authorised to instruct the auditors of JIL to determine the Specified Price.

Borgensten shall pay for the Suppiah Shares the Specified Price over a period of twenty four (24) months in eight (8) equal quarterly instalments, the first such being paid within thirty (30) days of the Specified Price being determined and Suppiah shall transfer the Suppiah Shares to Borgensten in eight (8) equal parts as and when payment of an instalment is made by Borgensten.

Clause 10.1.2

Suppiah and Borgensten shall use all endeavours to finalise the accounts of JIL for the financial year ending March 2000 as soon as possible. Borgensten shall take all necessary steps to ensure that JIL and JIPL provides all directors in JIL and JIPL with quarterly management accounts, such quarterly accounts to be provided within 90 days of the expiry of such quarter. For the purposes of this clause the first quarter for which management accounts are to be provided shall be the quarter commencing 1^st April 2000. Further, Borgensten shall take all necessary steps to ensure that the unaudited annual accounts of JIL and JIPL shall be made available to all directors in JIL and JIPL within 90 days of the closing of the financial year. Borgensten shall ensure that each of the directors gets a copy of the audited accounts of JIL and JIPL within 14 days of the audited accounts being made available.

Clause 11

Each Party undertakes to the other that it shall from time to time on written request by any Party at the requesting party’s cost do or procure the doing of all such acts and will execute or procure the execution of all such documents as any Party may reasonably consider necessary or desirable for giving full effect to this Deed or securing to the others the full benefits of all rights, powers and remedies conferred upon the others in this Deed.

7. As can be seen, under Clause 3.2 of the Deed, Borgensten was supposed to pay Suppiah $1m on the date of the Deed and another $1m on or before 4 August 2000. The first $1m was paid but not the other $1m (‘the said $1m’). By a letter from Suppiah’s solicitors dated 7 August 2000, payment of the said $1 million was requested. Suppiah also exercised his Put Option requiring Borgensten to purchase his shares in JIL. Borgensten failed to pay the said $1m.

WRIT OF SUMMONS NO S612/2000/H

8. Suppiah then commenced action on 15 August 2000 by filing Writ of Summons No S 612/2000/H for the said $1m.

9. Suppiah subsequently applied for summary judgment and at the adjourned hearing of the application for summary judgment on 13 November 2000, an Assistant Registrar allowed the application and judgment was entered against Borgensten.

10. The next day, Borgensten filed an appeal. The appeal was heard before me on 21 November 2000. On 28 November 2000, I dismissed Borgensten’s appeal.

11. By a letter dated 4 December 2000, Borgensten’s solicitors requested further arguments to be heard. On 15 January 2001, I heard further arguments and affirmed my original decision.

12. In the meantime, after the judgment on 13 November 2000, Suppiah’s solicitors applied on 16 November 2000 for an order that Borgensten attend and be orally examined before the Registrar as to:

(a) whether any and what debts are owing to him;
(b) whether he has any and what other property or means of satisfying the Judgment.

13. The application was heard on 16 November 2000 and allowed (‘the 16/11/00 and 1^st EJD Order’). The examination was fixed for 5 December 2000. The Order of Court was served on Borgensten by leaving it at JIPL’s premises on 27 November 2000.

14. Borgensten did not attend court on 5 December 2000, as ordered. Instead, on 2 December 2000, Borgensten applied for an extension of time to comply with the 16/11/00 and 1^st EJD Order. The reason given in the affidavit for the application for an extension of time was that winding up proceedings had been started in the Bahamas by Suppiah and that until that was resolved, Borgensten would not be able to attend any proceedings in Singapore. Borgensten’s application for extension of time was fixed for hearing at the same time as the EJD hearing, i.e 5 December 2000.

15. At the hearing on 5 December 2000, an Assistant Registrar made an order (‘the 5/12/00 and 2^nd EJD Order) including the following:

‘(1) The Plaintiff is to serve on the Defendant’s solicitors an exhaustive list of questions which they wish to ask the Defendant, such list to be served on or before 12 December 2000 by 4.00pm. The Plaintiff shall also serve on the Defendant’s solicitors a list of documents that they require production of, such list to be served on or before 12 December 2000 by 4.00pm.

(2) The Defendant is to file and serve an affidavit which sets out each question and the Defendant’s answer to the question, such affidavit to be filed and served on or before 5 January 2001 by 4.00pm. The Defendant is to produce such of the documents requested for as are in his possession, custody and power to the Plaintiff’s solicitors at their office on a date and time to be agreed that is on or before 5 January 2001.

(3) The date fixed for the examination of the abovenamed Defendant/Judgment Debtor be adjourned to 9 January 2001 at 2.30pm. In the event that the Defendant is unable to comply with these directions within the time frame stipulated, the Defendant should take out an application for an extension of time and justify why an extension is needed.’

16. Pursuant to the 5/12/00 and 2^nd EJD Order, Suppiah’s solicitors wrote to Borgensten’s solicitors on 12 December 2000 setting out the information and documents that were required from Borgensten.

17. By a letter dated 3 January 2001, Suppiah’s solicitors reminded Borgensten’s solicitors that under the terms of the 5/12/00 and 2^nd EJD Order, Borgensten was required to produce the documents requested in their letter dated 12 December 200 by 5 January 2001.

18. Borgensten did not provide his affidavit of assets as ordered. Neither did he provide any documents. Instead, on 5 January 2001, Borgensten’s solicitors filed an application asking for an extension of time to comply with the 5/12/00 and 2^nd EJD Order. One of the reasons given by Borgensten was that he was suffering from some ‘acute illness’ which prevented him from travelling to Asia.

19. At the adjourned hearing on 9 January 2001, Borgensten did not attend and was represented by his solicitors. The hearing was adjourned for two weeks and Borgensten was ordered to furnish the information and documents requested by Suppiah’s solicitors in their letter of 12 December 2000 (apparently with some minor exceptions) by way of an affidavit before the adjourned hearing on 23 January 2001, at which he was to attend for examination (‘the 9/1/01 and 3^rd EJD Order’). The 9/1/01 and 3^rd EJD Order was served on Borgensten on 22 January 2001.

20. Borgensten did not provide any affidavit of assets or documents as ordered. He also did not attend the hearing on 23 January 2001 to be examined although his solicitors did . He did not explain in any affidavit his failure to comply with the 9/1/01 and 3^rd EJD Order. The reason provided by Borgensten through his solicitors at the hearing was that he was still considering...