Civil Procedure

Citation(2020) 21 SAL Ann Rev 204
Publication Date01 December 2020
AuthorCavinder BULL SC MA (Oxon); LLM (Harvard); Barrister (Gray's Inn); Attorney-at-law (New York State); Advocate and Solicitor (Singapore). CHIA Voon Jiet LLB (Hons) (National University of Singapore); LLM (Harvard); Advocate and Solicitor (Singapore).
Date01 December 2020
I. The High Court's subject-matter jurisdiction and forum conveniens requirement in Mareva injunctions

8.1 In Allenger, Shiona v Pelletier, Olga,1 the plaintiff commenced bankruptcy avoidance proceedings against the defendants in the Cayman courts and obtained a worldwide Mareva injunction against the defendants.2 The plaintiff then commenced proceedings in Singapore and applied, inter alia, for leave to serve cause papers on the defendants out of jurisdiction and sought a Mareva injunction in Singapore. Both applications were granted ex parte.3 The defendants applied to set aside the orders on the basis that the Singapore court lacked subject-matter jurisdiction and/or in personam jurisdiction over the defendants, and in the alternative, that the requirements for granting a Mareva injunction in Singapore were not satisfied.4

8.2 The defendants contended that the High Court did not have subject-matter jurisdiction as the Supreme Court of Judicature Act5 (“SCJA”) did not confer jurisdiction over foreign legislation and the foreign legislation in question, viz, the Cayman Bankruptcy Law,6 does not confer jurisdiction on the Singapore courts.7 The High Court took the opportunity to clarify the ambit of its subject-matter jurisdiction, the relationship between its subject matter and in personam jurisdiction, and the jurisdictional requirements to be satisfied before a Mareva injunction may be granted.8

8.3 The High Court held that pursuant to ss 16 and 17 of the SCJA, the High Court has unlimited subject-matter jurisdiction, unless or until prohibited either by legislation or case law.9 In particular, the High Court clarified that s 16(1) of the SCJA does not limit the High Court's subject-matter jurisdiction.10 Further, the High Court's specific subject-matter jurisdiction is in no way circumscribed by s 17(1) of the SCJA.11 Rather, ss 16 and 17 are interrelated in so far as the High Court's subject-matter jurisdiction is only material and relevant in so far as in personam jurisdiction exists.12 In summary, the Singapore court does not require enabling legislation to have jurisdiction in any particular subject matter as such subject-matter jurisdiction exists by virtue of s 16(1) of the SCJA.13

8.4 To that end, the High Court held that it had subject-matter jurisdiction, and the mere fact that the cause of action arose from foreign legislation, viz, the Cayman Bankruptcy Law, does not bar the cause of action from being adjudicated in Singapore.14 The High Court then applied the well-established test in Zoom Communications Ltd v Broadcast Solutions Pte Ltd15 to determine if the defendants had submitted to the court's in personam jurisdiction. Given the defendants' failure to promptly file a jurisdictional challenge, coupled with the active steps taken by them in the proceedings, the High Court found that the defendants submitted to its jurisdiction.16

8.5 As the High Court found that it had in personam jurisdiction over the defendants, the next issue was whether Singapore was the proper forum for the dispute,17 such that the order granting leave to serve the cause papers out of jurisdiction ought to be set aside. On this issue, both parties agreed that Singapore was forum non conveniens in respect of the plaintiff's claim under the Cayman Bankruptcy Law.18 The issue was whether, as contended by the plaintiff, the forum conveniens requirement under O 11 r 2(2) of the Rules of Court19 (“ROC”) may be dispensed with where the court's jurisdiction is invoked to obtain a Mareva injunction in aid of foreign proceedings.20

8.6 While the High Court held that it was bound by the Court of Appeal's decision in Bi Xiaoqiong v China Medical Technologies Inc,21 where the Court of Appeal re-affirmed the need for Singapore to be forum conveniens before a Mareva injunction may be granted,22 the court was persuaded by the plaintiff's arguments for dispensation of this requirement and noted that it would have been inclined to adopt the plaintiff's position if not for the fact that it was bound by the Court of Appeal's decision.23

8.7 In this regard, the plaintiff raised four arguments in support of its position. First, the orthodox view that Singapore must be forum conveniens is not found in the language of O 11 r 2(2).24 Rather, this requirement derives its provenance from judicial pronouncement.25 Second, the requirement that the case must be a “proper one” for service out of jurisdiction under O 11 r 2(2) has never been explicitly considered where the court's jurisdiction is invoked to obtain a Mareva injunction in support of foreign proceedings.26 Third, the consideration that underlies the court's circumspect approach towards service out of jurisdiction, viz, the notion that a foreigner should not be unduly inconvenienced, is less relevant where the Mareva relief is sought to restrict the defendants from dispensing their assets across various jurisdictions.27 Fourth, where the court's jurisdiction is invoked in aid of foreign proceedings, international comity would demand a more permissive approach to allow the court to deal with international fraud.28

8.8 The High Court agreed with the plaintiff's arguments. It also agreed that the current state of the law posed practical problems, as it makes it impossible for a plaintiff who commences foreign court proceedings to obtain a Mareva injunction in support of foreign court proceedings, given that Singapore would be forum non conveniens in such a situation.29 Further, the High Court highlighted the concern that the current state of the law would allow more instances of cross-border fraud and easy dissipation of assets.30 Additionally, the High Court observed that the dispensation of the forum conveniens requirement in such a situation would bring the court's approach in line with s 12A

of the International Arbitration Act,31 where judicial remedies may be sought in aid of foreign arbitration.32 Nonetheless, the court observed that any change to the jurisdictional requirements for granting a Mareva injunction can only come by legislative amendments, or by the Court of Appeal.33

8.9 On the facts, the High Court declined to exercise its jurisdiction in relation to the claim grounded in Cayman Bankruptcy Law, given that Singapore was forum non conveniens, and no arguments were raised as to why substantial injustice would result if the court declined to exercise jurisdiction.34 As to the Mareva injunction in Singapore, the High Court found that as the plaintiff had a substantive claim under s 73B of the Conveyancing and Law of Property Act,35 Singapore was forum conveniens and the injunction was therefore properly granted.36

II. Effect of striking out a defence on a plaintiff's statement of claim

8.10 In Toh Wee Ping Benjamin v Grande Corp Pte Ltd,37 the respondent commenced proceedings at the High Court, alleging that the appellants had breached their fiduciary duties and were in breach of the joint venture agreement.38 Subsequently, the appellants' defence was struck out for failure to comply with discovery obligations and court orders.39 During the assessment of damages, the trial judge held that the respondent's statement of claim (“SOC”), including the sums claimed as pleaded, was admitted in its entirety as a result of the appellants' defence being struck out.40 On appeal, the appellants contended that the trial judge erred in finding that they were deemed to have admitted to the quantum of damages claimed by the respondent in the SOC.41

8.11 According to the Court of Appeal, the issue turned on whether the effect of striking out the appellants' defence meant that the appellants were deemed to accede to the entirety of the SOC, including the quantum

claimed.42 The Court of Appeal began by analysing O 24 r 16(1) of the ROC, the provision that allows the court to strike out a defence for breach of discovery obligations and make an order for “judgment [to] be entered accordingly”.43 The Court of Appeal held that the words “judgment be entered accordingly” imported all of the rules in O 19 of the ROC dealing with default of defence, in particular, rr 2 to 8.44 The specific rule that applies depends on the claim in the SOC. For example, if a claim is for a liquidation sum, then O 19 r 2 applies and the plaintiff would be entitled to apply for a judgment under this rule.45

8.12 The Court of Appeal then turned to examine O 18 r 13(3) and O 19 r 7 and laid down the applicable principles where a defence has been struck out:46

(a) Only allegations of fact made in the SOC are deemed admitted. The corollary to this is that averments of law and points of law are not deemed admitted, and for good reason, as conclusions of law fall within the court's remit.

(b) Where averments engage both issues of fact and law, the facts in the SOC must be sufficient to sustain the pleaded cause of action or claim. For example, where there is a claim for damages, the SOC should contain facts to show that damage has been suffered.

(c) Where the claim is for an unliquidated amount, the failure to file a defence only means that there is an admission to the facts pleaded to substantiate damage, but the quantum of damages claimed still needs to be assessed.

(d) Where the claim is instead for a liquidated amount, non-filing of the defence implies admission to the amount claimed, and this entitles the plaintiff to enter final judgment for the amount.

8.13 Applying these principles, the Court of Appeal held that the appellants were therefore entitled to contest whether the facts pleaded showed that the respondent had suffered damage, as well as the quantum of damages claimed in the respondent's SOC.47 On the facts, the Court of Appeal upheld the trial judge's decision in part. The Court of Appeal agreed with the trial judge's decision to award the first head of claim in

the SOC relating to moneys transferred by the respondent to their joint venture, as the facts pleaded...

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