Energy & Commodity Pte Ltd and others v BTS Tankers Pte Ltd

JudgeAndrew Phang Boon Leong JCA
Judgment Date05 August 2021
Neutral Citation[2021] SGCA 76
Citation[2021] SGCA 76
Defendant CounselYap Yin Soon and Dorcas Seah Yi Hui (Allen & Gledhill LLP)
Hearing Date12 July 2021
Plaintiff CounselLim Chee San (TanLim Partnership)
Docket NumberCivil Appeal No 187 of 2020
Published date11 August 2021
CourtCourt of Appeal (Singapore)
Subject MatterCivil Procedure,Striking out,Civil contempt,Contempt Of Court
Andrew Phang Boon Leong JCA (delivering the grounds of decision of the court): Introduction

This is an appeal against the decision of the High Court judge (“the Judge”) in BTS Tankers Pte Ltd v Energy & Commodity Pte Ltd and others [2021] SGHC 58 (“the GD”).

The respondent’s case below was that the second appellant and the companies he controlled – the first appellant (“ECPL”) and the third appellant (“D&N”) – acted in concert with persons in Vietnam to charter the respondent’s vessel “BTS CHRISTINA” (“the Vessel”) and smuggle oil into Vietnam. The Vietnamese authorities caught the relevant persons in Vietnam and sentenced them to imprisonment. The Vietnamese authorities also detained the Vessel for three years, which, according to the respondent, caused it substantial loss. Thus, in 2017, the respondent commenced HC/S 844/2017 (“Suit 844”) against the appellants, to which the third appellant never entered an appearance. As against the fourth appellant, the respondent’s case was that she, being the second appellant’s wife, held certain assets that in fact belonged to the first and third appellants, including a condominium at Leonie Hill worth approximately S$900,000 (“the Leonie Property”).

Throughout the proceedings below, the appellants failed to comply with numerous court orders directing them to make certain disclosures. In consequence, the Judge made two orders dated 27 October 2020. First, she ordered that the second and the fourth appellants be committed to prison for seven months and five months respectively, both for civil contempt (“the Committal Order”). Second, the Judge ordered that, failing compliance with their outstanding disclosure obligations, the appellants’ defences were to be struck out and judgment was to be entered against them (“the Unless Order”). The latter order was breached, and judgment was entered in favour of the respondent on 17 November 2020. Before us, the appellants appealed against both orders. The Committal Order had been stayed pending the determination of this appeal. We dismissed the appeal and now set out the detailed grounds for our decision.

Facts

The Judge set out a detailed account of the facts concerning the appellants’ conduct in the proceedings below. This is adequate for present purposes and we see no need for us to repeat the facts here, save to highlight the key events that underscore the egregious nature of the appellants’ conduct.

Initially, only the second appellant entered an appearance in Suit 844 and filed what can reasonably be said to be a bare defence. ECPL subsequently entered an appearance two years later, while, as stated before, D&N never entered an appearance. Pursuant to a first discovery order, the second appellant only disclosed five items in his list of documents filed on 14 December 2017. As this was plainly insufficient, the respondent requested for 58 categories of documents focusing on exchanges between the second appellant, ECPL, D&N and the Vietnamese company known as “DDHP”. The second appellant resisted and only drip-fed documents when pressed to disclose them. He did eventually file a supplemental list of documents on 26 January 2018 disclosing 27 items and a second supplemental list of documents on 30 April 2018 disclosing another five items. However, 19 of the documents disclosed in his first supplemental list of documents were repetitions from the respondent’s own list of documents.

More importantly, what arose from the disclosures was that the dealings between the first three appellants and DDHP appeared not to be bona fide. The payment terms in ECPL’s and D&N’s sales contracts with DDHP did not correspond with the sums deposited into, for example, ECPL’s bank account. The second appellant’s cursory response was that he would “reserve the explanation … to a later stage”. Moreover, the second appellant only disclosed 14 emails between ECPL, D&N and DDHP which he said represented the entirety of his written exchange with DDHP for the sale and purchase of millions of dollars’ worth of cargo. His explanation was that he dealt with DDHP mainly via “oral communication” and that he did not need to give particulars about the said communication.

The respondent then obtained a first discovery order directing the first three appellants to disclose email databases, computer hard drives and handphones. This order also required disclosure of an OCBC account held by D&N (“the D&N OCBC Account”). The second appellant did not comply. He claimed that: (a) DDHP had not paid any monies to D&N and therefore the D&N OCBC Account did not need to be disclosed; (b) he lost the passwords to three of his five email addresses; (c) he did not use a computer or hard drive for his business as printing and typing was outsourced; and (d) he had discarded his phone. In the circumstances, the respondent obtained a second discovery order as regards the outsourcing of the second appellant’s printing and typing. To this, the second appellant claimed that the outsourced documents were “not returned” to him or had been “discarded”, and that the individual who he allegedly engaged to do his printing and typing had “left Singapore”.

Fearing a potential dissipation of assets, the respondent obtained a first Mareva order which required the appellants to disclose all their assets. An application to set aside the first Mareva order was dismissed. The second appellant claimed that the first three appellants did not have assets and therefore did not make any disclosures. It was later revealed that the second appellant had sold his 1% share in the Leonie Property and all his shares in one TUTP Pte Ltd (“TUTP”) (an asset listed in the first Mareva order) to his wife, the fourth appellant, during the course of Suit 844. This arrangement was complex and involved a power of attorney and declarations of trust, with the effect that the second appellant held the assets on trust for his wife. Once this came to light, the respondent obtained a second Mareva order against the fourth appellant on the basis that the purported asset transfers were void as fraudulent conveyances and that she held assets that belonged to the first three appellants. Her application to set aside the second Mareva order, in which she claimed to be a woman of substance, was dismissed.

The respondent then discovered that, throughout Suit 844, the second and fourth appellants in truth were spending more than S$25,000 a month in support of their lifestyles. In response, the couple now claimed to be impecunious, asserting that it was the fourth appellant’s mother, one “Ms Hoang”, who had been financially supporting the family. However, Ms Hoang’s bank balance would not have been sufficient to maintain the couple’s standard of living for more than five months, and the couple’s IRAS statements showed that they had claimed “Parent Relief” in respect of Ms Hoang. Given the foregoing, the respondent obtained a third discovery order in aid of the Mareva orders to uncover the true extent of the couple’s wealth. Again, this proved to be futile.

When the respondent did eventually obtain the appellants’ bank statements (including those of the D&N OCBC Account) directly from the banks, the statements showed that the second appellant was not impecunious. On the face of the evidence, up to US$250m had been flowing through the three bank accounts of ECPL, D&N and TUTP from 2016 to 2019. The D&N OCBC Account also received US$1.2m in deposits from what were claimed to be unknown and unrecorded sources. In the circumstances, the respondent applied for the Committal Order and the Unless Order.

In relation to the Committal Order, the Judge held that the respondent had discharged its burden of proving that the second and fourth appellants were in contempt of court (see the GD at [60]). The Judge found that, in this case, the couple’s conduct could not be said to be the result of honest and reasonable failure to understand their discovery obligations (see the GD at [65]). This was not done once or twice but on multiple occasions. They had also maintained lies repeatedly (see the GD at [68]). Taking into account the circumstances, the second appellant was committed to seven months’ imprisonment while the fourth appellant was committed to five months’ imprisonment. In relation to the Unless Order, the Judge noted that it had been granted to give the appellants one last chance before their defences were to be struck out (see the GD at [82]–[83]). The guiding principle was proportionality, and the appellants – on whom the burden of proof lay – could not show that their breaches were not intentional and contumelious (see the GD at [84]).

Our decision

Before us, the appellants appealed against both orders on the basis that the orders had not been breached, that the sentences imposed were excessive, and that the Unless Order was a disproportionate sanction. We deal with these in turn.

On the issue of liability for civil contempt, we agree with the Judge that the respondent had established beyond reasonable doubt that the second and fourth appellants breached the Committal Order and the Unless Order. The Judge ensured that each and every alleged breach of a court order had been proven, and we therefore agree that every court order mentioned in...

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