Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd

Judgment Date28 February 1998
Date28 February 1998
Docket NumberSuit No 224 of 1991
CourtHigh Court (Singapore)
Canadian Pacific (Bermuda) Ltd
Nederkoorn Pte Ltd and another

[1998] SGHC 58

G P Selvam J

Suit No 224 of 1991

High Court

Civil Procedure–Mareva injunctions–Discharge of interlocutory Mareva injunction–Principles governing discharge–Companies–Memorandum of understanding to effect joint venture–Whether joint venture was partnership or company–Contract–Mistake–Memorandum of understanding to effect joint venture–Issue of whom vessel owner signed memorandum of understanding with–Whether agreement signed with broker–Effect of misnomer–Trusts–Breach of trust–Extent of liability–Whether broker trustee of vessel owner–Whether chief executive officer of broker liable for any breach of trust on broker's part

The plaintiff Canadian Pacific (Bermuda) Ltd (“CPB”) carried on the business of operating a fleet of specialist tanker vessels. The first defendant Nederkoorn carried on business as broker for vegetable oils. The second defendant Robin Nederkoorn (“Robin”) was the chief executive officer Nederkoorn. CPB and Nederkoorn entered into certain joint ventures. As both sides were pleased with the success of the joint ventures, a memorandum of understanding (“the MOU”) was signed to continue their collaboration on a more rational and organised basis. The substratum of the joint venture business strategy was for CPB to provide the tonnage and secure cargo other than vegetable oil and for Nederkoorn to provide the vegetable oil cargo. In accordance with the MOU, two joint venture companies were incorporated: CPN Tankers (Bermuda) Ltd in Bermuda (“CPN Bermuda”) and CPN Tankers (Singapore) Ltd in Singapore (“CPN Singapore”). However, the shareholders' agreement mentioned by the parties in the MOU never materialised because CPB directed their lawyers to put it “on hold”. Six months after the start up of the CPN Tanker business, CPB decided to sell its entire shipping business to Ceres Hellenic Shipping Enterprise Ltd (“Ceres Hellenic”). This included CPB's shares in CPN Bermuda and CPN Singapore (“CPN companies”). As a result of its withdrawal from the CPN Tanker business, CPB filed this action to recover their advances and outlays to the CPN Tanker business, mainly the reimbursement of charterhire which had been paid by them to the shipowners or for which it became liable. Pending hearing, CPB applied and obtained a worldwide interlocutory Mareva injunction against both defendants.

Held, dismissing the claim:

(1) Although the MOU was signed by Robin “for Nederkoorn (Singapore) Pte Ltd”, there was abundant evidence that the party CPB contracted with was Nederkoorn. It was clear that the introduction of the word “Singapore” in the MOU was to distinquish the Singapore company from other foreign Nederkoorn corporations. Nederkoorn (Singapore) Pte Ltd was unquestionably a misnomer for “Nederkoorn Pte Ltd”. Accordingly, it was illogical to proceed against Robin on the basis that he contracted for a non-existent company: at [40] and [41].

(2) No joint venture partnership business was carried on by CPB and the Nederkoorn. This was borne out by the existence of CPN Bermuda and CPN Singapore and that all businesses were transacted by these CPN companies and not CPB or Nederkoorn. CPB and Nederkoorn gave financial and business support to the CPN companies and not to a partnership business. Accordingly, Nederkoorn was not liable as partner for the advances and outlays claimed by CPB: at [53] and [72].

(3) In cases where a business set-up was used as a sham front for unjust enrichment, the function of a court was to look at the substance of the transaction and not what the parties chose to call it. CPN Bermuda was not a sham front set up for unjust enrichment: at [74] and [75].

(4) Nederkoorn was never CPB's trustee. All the properties of the CPN Tanker business were held by CPN Bermuda or CPN Singapore. Furthermore, Robin at all times acted with utmost probity. There was no breach of trust and he could not be said to be liable as a result of his having dishonestly assisted a trustee to commit a breach of trust: at [83], [86] and [87].

(5) By obtaining the Mareva order, CPB by its capricious and callous conduct inflicted a grievous and unjust harm on Nederkoorn. For this reason and the reason that CPB failed in its claim there should be an inquiry as to damages. As the court decided against CPB, the Mareva order was set aside and an inquiry as to damages ordered: at [98] and [99].

Babanaft International Co SA v Bassatne (1988) (distd)

Babanaft International Co SA v Bassatne [1990] Ch D 13; [1989] 1 All ER 433 (refd)

Chiarapurk Jack v Haw Par Brothers International Ltd [1993] 2 SLR (R) 620; [1993] 3 SLR 285 (refd)

Colgate-Palmolive (Asia) Ltd v Swedish East Asia Co Ltd [1965-1967] SLR (R) 394; [1965-1968] SLR 175 (folld)

Griffith v Blake (1884) 27 Ch D 474 (refd)

Haw Par Brothers International Ltd v Jack Chiarapurk [1991] 1 SLR (R) 425; [1991] SLR 626 (distd)

Keith Spicer Ltd v Mansell [1970] 1 WLR 333; [1970] 1 All ER 462 (refd)

Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming [1995] 2 AC 378; [1995] 3 All ER 97 (distd)

Taylor, In re;Cloak v Hammond (1887) 34 Ch D 255 (folld)

Business Registration Act (Cap 32, 1985Rev Ed)

Companies Act (Cap 50,1990 Rev Ed)ss 157, 409A

Partnership Act 1890 (c 39) (UK)ss 1, 4

Govindarajalu Asokan (Rodyk & Davidson) for the plaintiff

Thomas Tan (Haridass Ho & Partners) for the defendants.

G P Selvam J

The parties

1 The plaintiffs, Canadian Pacific (Bermuda) Ltd, carried on the business of operating a fleet of specialist tanker vessels either as registered or disponent owners. The operation hub of their business was in London. For this purpose they had a management company in London called Canadian Pacific Ships Ltd. Their corporate affairs were handled in Bermuda.

2 The first defendants, Nederkoorn Pte Ltd, carried on the business as brokers for vegetable oils. Their business operation hub was in Singapore. The second defendant, Robin Nederkoorn, was the chief executive officer of the first defendants. There were other companies related to the first defendants which were peripherally involved in the business.

3 Where the context permits I will refer to the plaintiffs and their associates as the “Canadian Pacific side” and the first defendants and their associates as the “Nederkoorn side”.

Initial joint ventures

4 The business operations of the plaintiffs and the first defendants led to overlap and competition for the carriage of Far East cargoes. In order to avoid the conflict and with the view to joining forces the parties collaborated in an unincorporated joint venture. This first unincorporated joint venture lasted from June 1988 till September 1988. It was on a 50:50 basis. The vessels involved in the collaboration were two in number. The parties were well satisfied with the performance for the joint venture. So they expanded and formalised the collaboration in September 1998. The second joint venture lasted from September till November 1988. This time there were five vessels all of which had been chartered on period time charters by the plaintiffs. Thus the plaintiffs secured the ships. The first defendants secured the cargo. The parties to this joint venture agreement were the plaintiffs and the amorphous “Nederkoorn group of companies”. It was signed by the second defendant “for Nederkoorn Pte Ltd”. Profit or loss was shared on a 40:60 basis between the two parties: 40 for the Canadian Pacific and 60 for Nederkoorn Pte Ltd. Fairfield Ship Management Pte Ltd, of the Nederkoorn side in Singapore was used for the commercial management of the vessels (including accounting). The plaintiffs paid the charter hire, bunker bills, canal tolls and fees to all agents. They received all the freights. The securing of cargo was undertaken by the Nederkoorn side in consultation with the Canadian Pacific side. The cargo was mostly from the Far East to the West.

The third joint venture

5 Both sides were once again pleased with the joint venture business and its success prompted the parties to continue their collaboration on a more rational and organised basis. To this end the parties signed a memorandum of agreement (“the MOU”) on 4 November 1988. The heading of the MOU was “Memorandum of Understanding between Canadian Pacific (Bermuda) Ltd and The Nederkoorn Group of Companies”. Again the amorphous “Group of Nederkoorn Companies” constituted the Nederkoorn side.

6 The second defendant signed the MOU “for Nederkoorn (Singapore) Pte Ltd”. One George Bateman signed the MOU for “Canadian Pacific (Bermuda) Ltd”.

7 Clauses 1 to 6 of the MOU provided as follows:

  1. 1 Canadian Pacific (Bermuda) Ltd and Nederkoorn's Principal, Aquaspan Ltd of Liberia will form a 50/50 nominally capitalised joint-venture company, domiciled in Bermuda, to be called CPN Tankers (Bermuda) Ltd. At the same time a nominally capitalised 50/50 joint-venture management company will be formed in Singapore, to be named CPN Tankers (Singapore) Pte Ltd which will be owned 50% by a Canadian Pacific Co and 50% by Nederkoorn (Singapore) Pte Ltd.

  2. 2 The Board of CPN (Bermuda) will consist of local nominees and the Board of CPN (Singapore) will be:

    Harvey Romoff

    Matthys Nederkoorn

    Brian Williams

    Robin Nederkoorn

    Arthur Robinson

    Jerome Williams

  1. 3 CPN (Singapore) will receive a management fee from CPN (Bermuda) to cover their overheads plus a nominal profit. CPN (Singapore) will be located in the offices of Nederkoorn (Singapore) in a separate partitioned section. CPN (Singapore) will pay Nederkoorn (Singapore) rent on the space occupied on a back-to-back basis with Nederkoorn's existing office lease. CPN (Singapore) will have its own switchboard, telex, telefax, etc., for which it will be responsible and will operate as a completely independent unit except such services as may be requested from Nederkoorn (Singapore) Pte...

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6 cases
  • Rabiah Bee Bte Mohamed Ibrahim v Salem Ibrahim
    • Singapore
    • High Court (Singapore)
    • 23 February 2007
    ...65 The defendant cited the case of Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd [1999] 2 SLR 18 (Court of Appeal) and [1998] 3 SLR 309 (High Court) (“Canadian Pacific”) to demonstrate that there can be a joint venture without a partnership. The appellant and respondent in that case h......
  • AS Nordlandsbanken and Another v Nederkoorn
    • Singapore
    • High Court (Singapore)
    • 14 December 2000
    ... ... The names in the brackets were assigned to the tankers by the charterers, Tamar Shipping (Bermuda) Ltd. The tankers were vegetable oil and chemical carriers. The mind that moved Tamar Shipping ... This company had entered into a joint venture with Canadian Pacific (Bermuda) Limited. The joint venture first floundered and eventually foundered. In ... ...
  • Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd and Another
    • Singapore
    • Court of Appeal (Singapore)
    • 8 March 1999
    ...if any, should therefore be made against CPN (Bermuda). 18. The decision below The trial judge in his grounds of judgment (reported in [1998] 3 SLR 309) held that the joint venture which the appellants and the first respondents had formed under or pursuant to the MOU was not a partnership a......
  • Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd and Another
    • Singapore
    • Court of Three Judges (Singapore)
    • 8 March 1999
    ...if any, should therefore be made against CPN (Bermuda). 18. The decision below The trial judge in his grounds of judgment (reported in [1998] 3 SLR 309) held that the joint venture which the appellants and the first respondents had formed under or pursuant to the MOU was not a partnership a......
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