Guan Chong Cocoa Manufacturer Sdn Bhd v Pratiwi Shipping S A

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean JC
• Judgment Date: 31 August 2002
• Neutral Citation: [2002] SGHC 202
• Published date: 19 March 2013
• Court: High Court (Singapore)
• Plaintiff Counsel: Lawrence Lee (Chui Sim Goh & Lim)
• Defendant Counsel: Joseph Tan (Kenneth Tan Partnership)

Judgment

GROUNDS OF DECISION

1. On 12 July 2002, the Plaintiffs, Guan Chong Cocoa Manufacturer Sdn Bhd commenced in personam action against shipowners, Pratiwi Shipping S.A., a Panamanian company, claiming damages for loss of and/or damage to two consignments (with a total gross weight of approximately 609 mt) of Sulawesi cocoa beans in bags lately laden on board the vessel "PRATIWI" pursuant to bills of lading nos. 01/PRT/PL/VII/01 and 02/PRT/PL/VII/01 both dated 13 July 2001 at Palu.

2. The Plaintiffs, as cargo interests, sued the Defendants, Pratiwi Shipping S.A., for breach of contracts of carriage evidenced by the two bills of lading, breach of duty as bailees of the cocoa beans and/or negligence of the Defendants, their servants or agents in or about the carriage, custody and care of the two consignments of cocoa beans.

3. The Plaintiffs’ claim arose as a consequence of a fire on board the "PRATIWI" which started in the engine room on or about 17 July 2001 during the voyage from Pantoloan, Palu, Indonesia to Pasir Gudang, Malaysia. The "PRATIWI" was towed to Banjarmasin, Indonesia where the bags of cocoa beans were discharged. The "PRATIWI" was a constructive total loss and was eventually sold for S$50,000.

4. Since the Defendants abandoned the voyage at Banjarmasin, the two consignments of cocoa beans were forwarded to Pasir Gudang on another vessel "SUN RAY". The damaged cocoa beans were eventually disposed in a salvage sale. The Plaintiffs’ loss is computed at $904,164.22 plus interest and costs.

5. On 29 July 2002, the Plaintiffs applied for a worldwide mareva injunction to freeze the assets of the Defendants within and outside Singapore up to the value of the Plaintiffs’ claim of $904,164.22 plus costs. The assets sought to be injuncted included the hull proceeds of the "PRATIWI", the net sale proceeds of "PRATIWI", the vessel "LANGSA" or if sold, the net sale proceeds after payment of any mortgage.

6. M/s Kenneth Tan Partnership ("KTP") was appointed in June 2002 to represent the Defendants and their liability insurers, China Insurance Co Limited. M/s Chui, Sim, Goh & Lim ("CSGL") represented the Plaintiffs.

7. On 30 July 2002, counsel for both the Plaintiffs and Defendants attended before Justice Lai Kew Chai. The Plaintiffs obtained leave to serve the in personam Writ on Foong Sun Shipping (Pte) Ltd ("Foong Sun"), the managers of "PRATIWI". Justice Lai directed the ex-parte application for a mareva injunction to be heard inter parte.

8. I heard the application on 2 August 2002. It transpired during the course of the hearing that the vessel "PRATIWI" had no hull and machinery insurance and her sister ship, the "LANGSA", had been sold for US$150,000. The only asset, which could conceivable be attached was the sale proceeds of the "LANGSA".

9. It was not the Defendants’ case nor was it suggested then that the sale of the "LANGSA" was a sham. This could not be clearer than from CSGL’s letters dated 5 and 6 August 2002 requesting further arguments. In both letters, Counsel stated:

"We are instructed to write under section 34(1)(c) of the Supreme Court of Judicature Act (Cap 322) and Order 56 rule 2 of Rules of Court for further arguments in respect of the Plaintiffs’ application for mareva injunction in connection with the sale proceeds of the motor vessel "LANGSA" only. "

10. I dismissed the Plaintiffs’ application. The Plaintiffs, being dissatisfied with my decision, filed Notice of Appeal on 19 August 2002. I now publish my reasons for dismissing the application.

The Affidavits

11. The Plaintiffs’ filed one affidavit in support of the application. This was the affidavit of Hia Cheng filed on 29 July 2002. Hia Cheng is the Finance & Trading manager of the Plaintiffs. The Defendants filed one affidavit to oppose the application. On 2 August 2002, Elaine Quek Ee Ling ("Elaine") affirmed an affidavit on behalf of the Defendants. Elaine is the manager of Foong Sun.

12. On 5 and 6 August 2002, the Plaintiffs filed two other affidavits. Those two affidavits were sworn by the Plaintiffs’ counsel, Lawrence Lee, in support of the Plaintiffs’ application for further arguments. The Defendants naturally objected to their use as they were filed without leave and after I had dismissed the application. For completeness, I should mention that I declined to hear further arguments.

The Plaintiffs’ case

13. In this interlocutory application, the Defendants did not touch on the Plaintiffs’ assertion that they have "a good arguable case", prefering to resist the application on the ground that the Plaintiffs have not establised any risk of dissipation of assets.

14. It was said on behalf of the Plaintiffs that a risk of dissipation of the assets is to be inferred from the following facts:

(i) the Defendants became a one-ship company after "PRATIWI" was sold. The Defendants subsequently sold their only asset "LANGSA". The Defendants appeared to be no longer in business.

(ii) the timing of the sale of the "LANGSA". The sale was on 22 June 2002 after the Defendants were informed that the Plaintiffs’ cargo underwriters had repudiated liability and after M/s Zaid Ibrahim & Partners and CSGL had written to the Defendants and China Insurance demanding payment of the claim. The Plaintiffs had earlier informed Foong Sun that they would claim from their cargo underwriters.

(iii) the length of time the Defendants have been in business. The Defendants appeared to have started business from early 2001.

(iv) Asset to be attached is the sale proceeds, which by its very nature is easily dissipated.

(v) The Defendants are not incorporated in a country where a Singapore judgment may be registered.

(vi) The Defendants’ liability cover is for S$500,000 and the Plaintiffs’ claim is for S$904,164.22.

The Defendants’ case

15. Elaine denied the Plaintiffs’ accusation that the Defendants were "trying to hide their assets". The Defendants had in the past on numerous occasions shipped cargo on board the "LANGSA". The "PRATIWI" and "LANGSA" used to ply regularly between Singapore, Malaysia and Indonesia. She was perplexed to see Hia Cheng’s statement that the Plaintiffs did not know until July 2002 that the Defendants also owned the "LANGSA". The Plaintiffs’ lawyers had ascertained the ownership of "LANGSA" from Lloyds’ Register. It was wrong to state that it was not easy to trace the ownership of "LANGSA" to the Defendants. The insinuation that the Defendants carry on business in an elusive manner was baseless.

16. I should mention that this business relationship with Foong Sun appeared more than cordial as the Plaintiffs were able to discreetly obtain from Foong Sun’s staff, information such as (i) "PRATIWI" had no hull cover and (ii) the "LANGSA" had changed name to "SRI BAHARI". The "SRI BAHARI" is managed by Foong Sun and the Plaintiffs in July 2002 had shipped cargo on board that vessel.

17. Elaine said in paragraph 18 of her affidavit that the "LANGSA" was sold to an Indonesian concern PT Fajar Sribahari Sakti for US$ 150,000. The Bill of Sale was dated 22 June 2002.

Decision

18. The Plaintiffs’ application is to attach assets belonging to the Defendants within and outside the jurisdiction.

19. In SSAB Oxelosund AB v Xendral Trading Pte Ltd [1992] 1 SLR 600, the defendants successfully set aside the ex-parte order prohibiting the defendants, their servants or agents from disposing the hull proceeds following the sinking of the vessel...