First Property Holdings Pte Ltd v U Myo Nyunt (alias Michael Nyunt )

• Jurisdiction: Singapore
• Judge: Chua Lee Ming J
• Judgment Date: 18 December 2020
• Neutral Citation: [2020] SGHC 276
• Court: High Court (Singapore)
• Docket Number: Suit No 601 of 2015 (Summonses Nos 4246 and 4399 of 2019) (Registrar’s Appeal No 26 of 2020)
• Published date: 23 December 2020
• Year: 2020
• Hearing Date: 23 March 2020,24 June 2020
• Plaintiff Counsel: Chan Tai-Hui, Jason SC, Ong Min-Tse, Paul, Gan Yun Han, Rebecca, Lim Jun Rui, Ivan, Oh Jialing, Evangeline and Cheong Rui Jie, Kiron (Allen & Gledhill LLP)
• Defendant Counsel: Vergis S Abraham, Zhuo Jiaxiang and Kenny Lau (Providence Law Asia LLC)
• Subject Matter: Civil Procedure,Delay,Judgments and orders,Setting aside,Principles
• Citation: [2020] SGHC 276

Chua Lee Ming J: Introduction

In 2015, the plaintiff, First Property Holdings Pte Ltd, commenced the present action against the defendant, U Myo Nyunt @ Michael Nyunt, and effected service on the defendant in Australia pursuant to an order granting leave to serve the Writ of Summons out of jurisdiction (“the Service Order”). The defendant, a national of the Republic of the Union of Myanmar, chose not to defend the claim because he was advised that a judgment issued by a Singapore court would not be enforceable against him in Myanmar.

In January 2016, the plaintiff entered judgment in default of appearance for a liquidated sum of US$585,143.67 and for damages to be assessed (“the Default Judgment”). The defendant again chose not to participate in the assessment of damages hearings and in November 2016, damages were assessed in the sum of US$66,243,572.84 (“the Assessment Judgment”).

The plaintiff registered the judgments against the defendant in Australia. The defendant challenged the registration but failed. The defendant then applied to set aside the Service Order, the Default Judgment and the Assessment Judgment. The defendant also applied for leave to enter appearance. The Assistant Registrar (“AR”) dismissed the defendant’s application to set aside the Service Order and the Default Judgment, as well as his application for leave to enter appearance. The defendant’s application to set aside the Assessment Judgment was fixed for hearing before me.

I heard the appeal against the AR’s decisions and the application to set aside the Assessment Judgment. I set aside the Default Judgment with respect to the liquidated sum of US$585,143.67 but dismissed the rest of the defendant’s appeal. I also dismissed the defendant’s application to set aside the Assessment Judgment.

The defendant has appealed against my decision save for that part of my decision setting aside the Default Judgment for the liquidated sum of US$585,143.67.

Background facts

On 9 September 1996, the plaintiff entered into a Joint Venture Agreement (the “JVA”)¹ with the defendant and his brother, U Ye Myint (“Myint”) for the development of property projects in Myanmar (the “JV business”). The JV business was to be undertaken through a Myanmar company, Town & City Co Ltd (“TCC”). The shareholders of TCC were the defendant and Myint, each holding one share. Myint signed a Declaration of Trust, also dated 9 September 1996, declaring that he held his one share on trust for the defendant.² The plaintiff could not hold shares in TCC due to restrictions in foreign ownership of land under Myanmar law.

Clause 3.2 of the JVA contemplated the issuance of a debenture by TCC to the plaintiff. On the same day, 9 September 1996, the plaintiff and TCC entered into a US$7,600,000 Convertible Performance Debenture (the “Debenture”), under which TCC promised to pay the plaintiff the amount of US$7,600,000 (the “US$7.6m Loan”).³

The JVA and Debenture provided for the following, among other things: The plaintiff would have the US$7.6m Loan converted into a 95% shareholding in TCC at the earliest possible time that the plaintiff was legally entitled under Myanmar law to become a shareholder of TCC. Until the US$7.6m Loan and all other amounts that may become due under the Debenture have been paid in full, TCC: would (unless otherwise agreed to by the plaintiff) maintain its existence as a limited liability company, and deposit original title deeds to all its assets and properties with the plaintiff and any other documents and security which the plaintiff may require; would not (without the plaintiff’s prior written consent) merge or consolidate with any other company or dispose of or sell any of its assets; and would not voluntarily dissolve itself or liquidate its assets without the plaintiff’s prior written consent.

The JVA stated that TCC had been incorporated on 12 June 1996. However, according to the defendant, TCC was incorporated only on 30 October 1996.⁴ In its statement of claim, the plaintiff accepted that TCC was incorporated in or around October 1996.⁵

On 3 March 1998, the plaintiff entered into a Loan Agreement with the defendant by which the plaintiff agreed to extend a maximum loan of US$850,000 to TCC, subject to the approval of the Central Bank of Myanmar (the “Loan Agreement”).⁶

The JVA, Debenture and Loan Agreement were all governed by the laws of Singapore and provided for the non-exclusive jurisdiction of Singapore Courts.

The plaintiff claimed that it invested an aggregate sum of about USD8,185,143.67 in the joint venture (the “Plaintiff’s Investment Moneys”), comprising: USD7.6m pursuant to the Debenture; and US$585,143.67 drawn down under the Loan Agreement.

The defendant claimed that no funds were received from the plaintiff at all. The defendant also claimed that the Central Bank of Myanmar rejected TCC’s application for approval to receive and pay back the loan of US$850,000.⁷

It was not disputed that TCC was involved in two property projects in Myanmar: the planned development of units in Natmauk Lane, Bahan Township, Yangon Region, Myanmar (the “Natmauk Lane Property”); and the construction, development and management of a ten-storey commercial retail shop building called Tarmway Plaza, Tamwe Township, Yangon Region, Myanmar (“Tarmway Plaza”).

TCC was placed into liquidation in August 2005.

Natmauk Lane Property

On 30 December 1996, one Daw San Myint (seller) and TCC (buyer) entered into a Contract of Sale of Land and Building for the sale and purchase of the Natmauk Lane Property at the price of K44.05m (approximately US$117,567). The contract was registered with the Myanmar Office of Registration of Deeds on 31 December 1996.⁸ According to the defendant, one of his companies had acquired the property from Daw San Myint in April 1996 and the property was transferred to TCC, representing his contribution to the paid-up capital of TCC.⁹ The plaintiff disputed this and claimed that TCC paid US$3,064,210.37 to purchase and develop the Natmauk Lane Property and that this amount came from the Plaintiff’s Investment Moneys.

On 1 November 2000, the defendant caused TCC to transfer the Natmauk Lane Property to himself and his wife (the “Natmauk Lane Transaction”). The plaintiff claimed that the transfer was made dishonestly and fraudulently, without its knowledge and consent. The defendant claimed that the transfer was made because the plaintiff had failed to provide funds to TCC and that he had used his own money to finance the purchase of the Natmauk Lane Property.¹⁰

Proceedings in Myanmar

Criminal Case 102/2003

On 14 February 2003, the plaintiff, through its agent U Tin Win, commenced Regular Criminal Case No 102/2003 (“Criminal Case 102/2003”) in the Bahan Township Court, Yangon Division. Criminal Case 102/2003 was a private criminal prosecution against the defendant and one U Kyaw Tint (“Kyaw”) for violations of the Myanmar Companies Act and Penal Code.¹¹ The plaintiff’s complaints were as follows: A Board meeting at which Kyaw was appointed as a director of TCC was invalid and the defendant submitted a false return to the Registrar of Companies in relation to that meeting. The defendant had made a false statement claiming that the Natmauk Lane Property was purchased by his family with their own money, although TCC had bought the property under a registered contract. The defendant had wrongfully obtained possession of and wrongfully withheld the properties of TCC.

On 8 April 2008, the Yangon Northern District Court acquitted the defendant on the ground that the plaintiff had not proven its case. The main ground for the Court’s decision was the lack of evidence that the plaintiff had permission from the Central Bank of Myanmar to remit funds to TCC.¹²

The Attorney General’s Office of Myanmar filed an appeal against the acquittal in Appeal Case No 322 of 2008 before the Supreme Court of the Union of Myanmar. On 14 January 2009, the Supreme Court dismissed the appeal.¹³ Again, it appears that the absence of evidence of any permission from the Central Bank of Myanmar for the plaintiff to remit funds to TCC was a key consideration.

Case 330/2003

On 2 May 2003, the plaintiff commenced Major Civil Case No 330 of 2003 (“Case 330/2003”) in the Yangon Division Court in Myanmar against, among others, TCC, the defendant and his wife, seeking orders for the Natmauk Lane Transaction to be nullified and/or for the Natmauk Lane Property to be returned to TCC.¹⁴

On 14 January 2015, the Yangon Western District Court dismissed Case 330/2003 on the ground that the plaintiff failed to attend the hearing of the case on 30 December 2014.¹⁵ Although the plaintiff’s advocate was present at the hearing, he did not have the requisite power of attorney to appear in the case.

The plaintiff applied to set aside the order made on 14 January 2015 on the ground that it did attend the hearing and that the court had no jurisdiction to make the order. On 21 February 2019, another judge of the Yangon West District Court dismissed the plaintiff’s application on the ground that, as a judge who inherited the case, he was not entitled to consider the plaintiff’s submission.¹⁶

Tarmway Plaza

The Yangon City Development Committee of Myanmar awarded the rights to develop and manage Tarmway Plaza to Aung Thu Ka Co Ltd (“ATK”), a company incorporated in Myanmar. On 13 October 1996, ATK and TCC formed a joint venture company, Tamwe Market Development Co Ltd (“TMDC”) to construct and own Tarmway Plaza. The agreement between ATK and TCC was made orally.

It was not disputed that TCC held 80% of the shareholding in TMDC. The plaintiff claimed that TCC acquired the 80% shares by contributing a total sum of US$5,053,502.15 (from the Plaintiff’s Investment Moneys) to the construction of Tarmway Plaza whilst the defendant claimed that TCC did so by contributing K900m towards...