Goodwill Enterprise (Malaysia) Sdn Bhd v CT Nominees Ltd ((in Liquidation)) and Others

• Jurisdiction: Singapore
• Judgment Date: 29 February 1996
• Date: 29 February 1996
• Docket Number: Suit No 1781 of 1993
• Court: High Court (Singapore)

Goodwill Enterprise (Malaysia) Sdn Bhd

Plaintiff

and

CT Nominees Ltd (in liquidation) and others

Defendant

[1996] SGHC 34

Warren L H Khoo J

Suit No 1781 of 1993

High Court

Civil Procedure–Service–Service of writ outside jurisdiction–Application for leave to serve proceedings out of jurisdiction–Whether court should exercise discretion to grant leave–Standard merits serious question to be tried rather than good arguable case–Plaintiff seeking declaration of beneficial ownership of shares–Evidence showing that beneficial ownership could belong to either plaintiff or another party–Whether serious question of beneficial ownership to be tried–Conversion taking place more than six years prior to action–Plaintiff showing defendant deliberately concealing material facts–Whether serious question of limitation existed

The plaintiff sought a declaration that it was the beneficial owner of three million shares in a company. The shares were registered in the name of the first defendant, a company incorporated in Hong Kong. The first defendant on 24 August 1981 executed a declaration that it held the shares on trust for another company, ICL, and subsequently pledged the shares to a bank on 11 March 1983 which in its turn sold them to the fourth defendant more than eight years later, in August 1991.

The plaintiff adduced evidence of the transaction history of the ownership of the shares, which appeared to show that it could have been the beneficial owner, and questioned the bona fides of the first defendant's declaration of trust, and subsequent pledge. The plaintiff commenced an action against the defendants on 30 August 1993. By leave of court it was amended on 18 September 1993 but was not served. On 17 August 1994, the plaintiff obtained an order extending the validity of the amended writ for 12 months from 30 August 1994. On the same day, they obtained leave to serve the defendants overseas. All four defendants applied to set aside the order extending validity and the order giving leave to serve out of jurisdiction. The assistant registrar dismissed the first and fourth defendants' applications and they appealed.

At trial, the defendants submitted that as the action was time barred, the writ should not have been renewed and that no leave to serve out of jurisdiction should have been granted. On the limitation point, the plaintiff submitted that the material facts relevant to its right of action were deliberately concealed by the first defendant, implying that the limitation period should have been a longer one premised on the existence of fraud. On appeal, the defendants confined argument to whether there was a serious question to be tried; hence the validity of writ renewal was no longer an issue before the court.

Held, dismissing the appeals:

(1) The test of the strength of the case on the merits which a plaintiff had to establish for the grant of leave to serve proceedings out of jurisdiction was merely whether the evidence disclosed that there was a serious issue to be tried, not whether he had a good arguable case. Where there was a dispute in beneficial ownership of the subject matter of the dispute, and...