Lakshmi Anil Salgaocar v Hadley James Chilton and Others

• Jurisdiction: Singapore
• Judge: Aedit Abdullah J
• Judgment Date: 16 April 2018
• Court: High Court (Singapore)
• Docket Number: Suit No 202 of 2017 (Summons No 1709 of 2017)
• Date: 16 April 2018

Lakshmi Anil Salgaocar

and

Hadley James Chilton and others

[2018] SGHC 87

Aedit Abdullah J

Suit No 202 of 2017 (Summons No 1709 of 2017)

High Court

Civil Procedure — Jurisdiction — Whether conduct of foreign receivers constituted submission to jurisdiction of Singapore court

Civil Procedure — Service — Plaintiff bringing civil claim against foreign receivers in Singapore court in relation to acts undertaken pursuant to foreign receivership — Foreign receivers applying to set aside order granting plaintiff leave to serve originating process out of jurisdiction — Whether service out of jurisdiction permissible — Order 11 rr 1(b), 1(f) and 1(p) Rules of Court (Cap 322, R 5, 2014 Rev Ed)

Companies — Incorporation of companies — Lifting corporate veil — Plaintiff bringing civil claim concerning duty owed by foreign receivers to company — Plaintiff bringing claim in capacity as beneficiary of estate of sole shareholder of company — Whether plaintiff had standing to bring claim

Conflict of Laws — Jurisdiction — Forum non conveniens — Plaintiff bringing civil claim against foreign receivers in Singapore court in relation to acts undertaken pursuant to foreign receivership — Whether Singapore natural forum for dispute — Whether justice requird Singapore court to hear matter

Held, granting the application to set aside leave to serve out of jurisdiction:

(1) Jurisdiction would be established over a foreign defendant if there was (a) consent; (b) submission; or (c) valid service of originating process out of jurisdiction. In relation to (c), three requirements had to be met, namely, (i) the plaintiff's claim had to fall within one of the limbs under O 11 r 1 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“Rules of Court”); (ii) the plaintiff's claim had to have a sufficient degree of merit; and (iii) Singapore had to be the proper forum for the trial of the action. Where these three requirements were fulfilled, the court could nevertheless set aside leave to serve out of jurisdiction where the plaintiff had failed to make full and frank disclosure of all material facts when applying ex parte for leave: at [30] to [32].

(2) The defendants' submission to the jurisdiction of the Singapore courts in Suit 966 did not constitute submission to jurisdiction in Suit 202. Where a defendant had taken a step in a previous suit which had since been discontinued, it was not appropriate to infer that he had also submitted to the jurisdiction of the Singapore courts in a separate fresh suit, notwithstanding that there may be some overlap in the parties and the subject matter of both suits: at [36].

(3) The defendants' commencement of proceedings in Singapore to seek recognition of the appointment of the receivers did not constitute submission to jurisdiction either. An application for recognition of foreign receivership did not amount to a taking of a step as such an application was not premised on the Singapore courts having jurisdiction over a dispute concerning whether the receivers breached duties owed: at [39].

(4) In order to obtain leave to serve originating process out of jurisdiction, a plaintiff had to establish, amongst others, that it had a good arguable case that its claim fell within one of the grounds under O 11 r 1. Once this was satisfied, the plaintiff also had to show that there was a serious question to be tried on the merits of its claim. There could be some overlap between the court's consideration of the two matters because, depending on the ground(s) relied on under O 11 r 1, it may be that the requirement of a serious issue to be tried on the merits would have been proved once the higher standard of proof, ie, good arguable case, was satisfied: at [47] and [48].

(5) It was at the stage of considering whether a good arguable case had been made out under O 11 r 1 that questions on the locus standi of the plaintiff was to be considered. The plaintiff lacked locus standi to bring the claim in her capacity as the beneficiary of the Estate since she sought to recover losses for alleged breaches of duties owed to MDWL, rather than to recover or protect the assets belonging to the deceased which were held on trust for the Estate: at [47] and [54].

(6) Even if the claim was brought by the plaintiff in her capacity as administrator rather than beneficiary of the Estate, and therefore qua shareholder of MDWL, the defect in the plaintiff's standing could not be remedied. The plaintiff's claim concerned a duty owed to MDWL and not to the shareholder of MDWL, and there was no direct duty owed by the receivers to the shareholder of MDWL. The plaintiff therefore could not establish jurisdiction under O 11 r 1(f) or under O 11 r 1(p) as she lacked locus standi to bring the claim against the defendants: at [56] and [65] to [67].

(7) An interim injunction preserving the state of affairs pending final resolution of the dispute was not itself a cause of action and could not, without a pre-existing cause of action, found jurisdiction under O 11 r 1(b). The plaintiff therefore could not rely on the fact that she had sought and obtained an ex parte injunction against the receivers in Suit 202 to establish jurisdiction: at [61] to [63].

(8) The absence of leave obtained from the BVI court to commence proceedings in Singapore against the receivers was another factor in favour of setting aside the leave to serve out of jurisdiction. Where a party seeks to bring an action against a receiver, leave from the court that appointed the receiver should be obtained prior to the commencement of proceedings. While the denial or grant of leave by a foreign appointing court to commence action in Singapore was itself not determinative of the Singapore court's jurisdiction to hear the matter, it could be taken into consideration in the Singapore court's assessment of whether the plaintiff had established a good arguable case under O 11 r 1, and if Singapore was the appropriate forum for the suit: at [69] to [72].

(9) The plaintiff failed to establish that Singapore was the more appropriate forum for Suit 202. The thrust of the plaintiff's claim concerned whether the receivers had properly discharged their duties as receivers. Given that the receivers were appointed by a BVI court in relation to a BVI-incorporated company, BVI was both the place giving rise to the tort and the place in which damages, if any, were incurred. Moreover, the applicable law was BVI law as the conduct and scope of duties owed by the receivers were to be measured against the law applicable to the receivership. It was generally more appropriate for a party aggrieved by the conduct of a receiver to commence an action in the court in which the receiver was appointed: at [85] to [88].

(10) There were also no special circumstances that required the Singapore courts to hear the matter notwithstanding that BVI was the natural forum for the dispute. The need to commence enforcement proceedings in one jurisdiction, in addition to the main proceedings in another jurisdiction, was a normal occurrence to be expected in all disputes involving cross-border transactions. Therefore, this factor alone could not tip the scale in favour of the Singapore courts hearing the matter: at [92].

(11) A plaintiff had a duty of full and frank disclosure in an ex parte application for leave to serve out of jurisdiction. The applicable test was the objective test of materiality, in which the relevant question was whether the facts in question were matters that the court would likely have taken into consideration in making its decision on the ex parte application. On the facts, there was no lack of disclosure or misinformation on the part of the plaintiff that was so material as to warrant the setting aside of the leave to serve out of jurisdiction on this ground: at [99], [101] and [106].

Case(s) referred to

Beluga Chartering GmbH v Beluga Projects (Singapore) Pte Ltd [2014] 2 SLR 815 (refd)

Bradley Lomas Electrolok Ltd v Colt Ventilation East Asia Pte Ltd [1999] 3 SLR(R) 1156; [2000] 1 SLR 673 (folld)

Excalibur Group Pte Ltd v Goh Boon Kok [2012] 2 SLR 999 (folld)

Foss v Harbottle (1843) 2 Hare 461; 67 ER 189 (refd)

Goodwill Enterprise (Malaysia) Sdn Bhd v CT Nominees Ltd [1996] 1 SLR(R) 330; [1996] 2 SLR 404 (refd)

Humpuss Sea Transport Pte Ltd v PT Humpuss Intermoda Transportasi TBK [2016] 5 SLR 1322 (refd)

Jhaveri Darsan Jitendra v Salgaocar Anil Vassudeva [2018] SGHC 24 (refd)

JIO Minerals FZC v Mineral Enterprises Ltd [2011] 1 SLR 391 (folld)

Karaha Bodas Co LLC v Pertamina Energy Trading Ltd [2006] 1 SLR(R) 112; [2006] 1 SLR 112 (folld)

Koh Kim Teck v Credit Suisse AG, Singapore Branch [2015] SGHC 52 (distd)

Lakshmi Anil Salgaocar v Vivek Sudarshan Khabya [2017] 4 SLR 1124 (refd)

Lam Soon (Thailand) Co Ltd v Transpac Capital Pte Ltd [1998] SGHC 328 (refd)

Maidstone Palace of Varieties Ltd, [1909] 2 Ch 283 (folld)

Manharlal Trikamdas Mody v Sumikin Bussan International (HK) Ltd [2014] 3 SLR 1161 (folld)

Oriental Insurance Co Ltd v Bhavani Stores Pte Ltd [1997] 3 SLR(R) 363; [1998] 1 SLR 253 (refd)

Peters Roger May v Pinder Lillian Gek Lian [2006] 2 SLR(R) 381; [2006] 2 SLR 381 (refd)

Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438; [1993] 3 WLR 756 (refd)

Siskina v Distos Compania Naviera SA [1979] AC 210 (folld)

Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 (folld)

Transniko Pte Ltd v Communication Technology Sdn Bhd [1995] 3 SLR(R) 941; [1996] 1 SLR 580 (refd)

Vasiliy Golovnin, The [2008] 4 SLR(R) 994; [2008] 4 SLR 994 (refd)

Wong Moy v Soo Ah Choy [1996] 3 SLR(R) 27; [1996] 3 SLR 398 (distd)

Zetta Jet Pte Ltd, Re [2018] 4 SLR 801 (refd)

Zoom Communications Ltd v Broadcast Solutions Pte Ltd [2014] 4 SLR 500 (folld)

Facts

The plaintiff, Lakshmi Anil Salgaocar, was the widow of Anil Vassudeva Salgaocar (“AVS”), who in his lifetime was the sole shareholder and the sole director of Million Dragon Wealth Ltd (“MDWL”). MDWL...