Lee Kuan Yew v Tang Liang Hong and Another and other actions (No 2)

• Jurisdiction: Singapore
• Judgment Date: 29 May 1997
• Date: 29 May 1997
• Docket Number: Suits Nos 2523, 2524, 2525 and,Suits Nos 1116, 2523, 2524 and in Chambers No 2229 of 1997)
• Court: High Court (Singapore)

Lee Kuan Yew

Plaintiff

and

Tang Liang Hong and another and other actions

Defendant

[1997] SGHC 137

Lai Kew Chai J

Suits Nos 1116, 2523, 2524 and 2525 of 1996; 70, 76, 82, 172, 181, 182, 187 and 188 of 1997 (Summons in Chambers No 2229 of 1997)

High Court

Civil Procedure–Mareva injunctions–Enjoined party failing to explain transfer of assets out of jurisdiction–Enjoined party requesting for more funds for legal costs–Policy underlying Mareva injunction–Whether request to be allowed–Civil Procedure–Mareva injunctions–Receivership–Duties of receiver appointed pursuant to Mareva injunction–Party enjoined allowed living expenses by court–Receiver requiring party enjoined to allow it access to bank account for oversight and control purposes–Whether demand by receiver appropriate–Duty of receiver to prevent extravagant spending by party enjoined

By a combined order of court, the applicant was appointed receiver of all the assets of the first defendant and his wife, the second defendant, to a specified limit. The appointment was made pursuant to a Mareva injunction. The first defendant had transferred substantial moneys from his account in Singapore to his account in Malaysia, and had not given any explanation on any of these matters although the receiver had reported on these matters in his affidavit. Under the terms of the Mareva injunction (as varied), the second defendant was allowed to draw out a sum for her solicitors' legal costs and another for living allowances. For the living allowances, the receiver issued the cheque for the said sum but required the second defendant to let him have access to particulars of the bank account to be opened with his consent in writing. Her solicitors regarded this condition as intrusive and demanded the payment of cash instead. The receiver applied for the court's directions as to how further legal fees claimed to be necessary by the second defendant were to be handled.

Held:

(1) The receiver had the basic duty to see that all assets of the parties under a Mareva injunction were marshalled in. He had the duty to ensure that the assets were not frittered away by extravagance and that the enjoined parties should not receive any money or property other than those allowed under the injunction order and the variation order: at [6].

(2) It was the intention of the parties enjoined to run down their assets in Singapore whilst keeping their other assets intact, and they should not be permitted to undermine the effect of the Mareva injunction order. It was not sufficient for the parties enjoined merely to assert that they had debts or expenses to pay; they had to prove that they had no other available assets. So long as the party enjoined remained a recalcitrant in not disclosing his assets, the presumption must be made against him that he was not candid and forthright. He must not be allowed to run down the assets which had been enjoined: at [11].

A v C (No 2) [1981] QB 961; [1981] 2 All ER 126 (folld)

Avant Petroleum v Gatoil [1986] 2 Lloyd's Rep 237 (refd)

National Bank of Greece v Constantinos Dimitriou (10 November 1987) (Court of Appeal, UK) (refd)

Sarjit Singh Gill (Shook Lin & Bok) for the receiver/applicant

Davinder Singh and Hri Kumar (Drew & Napier) for the plaintiff in Suit 2523/1996, Suit 181/1997 and Suit 182/1997

Ashok Kumar (Allen & Gledhill) for the plaintiff in Suit 2524/1996 and Suit 187/1997

Tan Kok Quan (Lee & Lee) for the plaintiff in Suit 1116/1996, Suit 172/1997 and Suit 70/1997

Nishith Shetty (Wong Partnership) for the plaintiff in Suit 76/1997

Cheah Kok Khun (Wee Swee Teo & Co) for the plaintiff in Suit 82/1997

Harry Elias (Harry Elias & Partners) for the plaintiff in Suit 2525/1996 and Suit 188/1997

Peter Cuthbert Low and Loo Ngan Chor (Peter Low Seong Tang & Partners) for the first defendant

Daniel John and Michell Jeganathan (John & Tan) for the second defendant.

Lai Kew Chai J

1 By SIC No 2229/97 the receiver applied, inter alia, for the court's directions as to how various claims, bills, invoices and notice for payment which had been lodged with him against Tang Liang Hong and Mdm Teo Siew Har were to be dealt with. As at the date of the hearing on 2 April 1997, the credit balance of M/s Tang & Co, the sole proprietorship of Tang Liang Hong, stood at $118,549.89. In contrast, the claims totalled $120,000 (in round figures) and the sum of 45,122.50 being Tang Liang Hong's Queen's Counsel's fees.

2 In the course of the hearing, I declined to order any release of any money standing in the account of M/s Tang & Co save that the receiver was authorised to make the following payments out of the account of M/s Tang & Co: (a) Tang Liang Hong's deposit as security for costs in relation to his appeals in the sum of $11,000; (b) the court transcript fee for Tang Liang Hong's appeals; (c) the taxed costs payable in these proceedings as set out under item 3 in the list handed to me by counsel for the receiver; (d) the balance of the solicitors' fees of $20,000 payable to her solicitors, M/s John & Tan, after the money standing in Mdm Teo's own account with the receiver had been used to pay towards the same; and (e) that the living expenses of Mdm Teo at the rate of $1,000 per week and payable from the week beginning 27 January 1997 be paid into a bank account and that all expenses should be withdrawn from that account. As explained during the hearing, I wanted the payment in and withdrawals to be made out of the bank account of Mdm Teo for a period of two months so that this court could monitor the adequacy or otherwise of the rate of living expenses of $1,000 ordered.

3 Inow set out the factual background and my reasons. By a combined order of court dated 17 February 1997 (“the appointment order”) made upon separate applications filed by the plaintiffs in each of Suits Nos 1116, 2523, 2524 and 2525 of 1996 and Suits Nos 70, 76, 82, 172, 181, 182 and 188 of 1997 Nicky Tan Ng Kuang was appointed the receiver of all the assets of Tang Liang Hong and his wife, Mdm Teo Siew Har to the limit of $11,200,000. The appointment of the receiver was made in aid of an injunction granted by this court on 27 January 1997 in the Mareva form (“the Mareva injunction”). The Mareva injunction and the appointment order were, inter alia,varied by an order of court dated 5 March 1997 (“the variation order”). On 26 February 1997 the receiver on the authority of this court opened four receiver's accounts in the name of Tang Liang Hong, Mdm Teo Siew Har, Tang Liang Hong and Mdm Teo Siew Har jointly and M/s Tang & Co. The receiver required these accounts for payment into the appropriate account any funds he would receive in his capacity as receiver.

4 On 10 March 1997 the plaintiffs in these suits entered judgment against Tang Liang Hong. Both the Mareva injunction and the appointment order were extended.

5 By the terms of the variation order, Mdm Teo was allowed to draw out a sum of $20,000 and to pay the same to M/s John & Tan to account of their costs and disbursements. It was further ordered that subject to availability of funds and the absence of competing claims thereto the said sum of $20,000 be paid out of the office account of M/s Tang & Co. However, the credit in the office account of M/s Tang & Co was insufficient to pay both the firm's expenses and debts on the one hand and the said $20,000. Under the variation order, this court had ordered that $6,000 be released to Mdm Teo for the six weeks beginning 27 January 1997. The receiver issued the cheque for the said sum but, on legal advice given which I found appropriate and proper, the receiver required Mdm Teo to let him have access to particulars of the bank account to be opened with his consent in writing. The solicitors of Mdm Teo regarded this condition as intrusive and demanded the payment of cash instead. When the differences were ventilated before me, I decided that it was appropriate in all the circumstances that she should open a bank account to pay in and draw therefrom the living expenses and that the receiver be given access to the particulars of the deposits and withdrawals for a limited period of two months. The pattern of expenses for two months would give the receiver and the court some idea of the adequacy or otherwise of the rate of living allowances allowed per week.

6 During the hearing, Mr Daniel John, on behalf of Mdm Teo, complained that the receiver was out of line in having imposed the condition. I did not think so. The receiver had the basic duty to...