Lee Kuan Yew v Tang Liang Hong and Another

• Jurisdiction: Singapore
• Judge: G P Selvam J
• Judgment Date: 26 February 1999
• Neutral Citation: [1999] SGHC 50
• Date: 26 February 1999
• Subject Matter: Permissible if financial loss can be proven,Factors in ascertaining beneficial interests of parties to marriage,Injunctions,Presumption,Order for inquiry as to damages,Civil Procedure,Family Law,Advancement,Whether presumption applicable
• Docket Number: Suit No 2523 of 1996
• Published date: 19 September 2003
• Defendant Counsel: Daniel John and Michelle Jeganathan (John, Tan & Chan)
• Court: High Court (Singapore)
• Plaintiff Counsel: Davinder Singh SC and Hri Kumar (Drew and Napier)

Judgment:

1.GP SELVAM J

Prelude

In this case the matter for decision is an application by the second defendant, Madam Teo Siew Har, to discharge a world-wide Mareva order obtained by the plaintiff against her and her husband Mr Tang Liang Hong, the first defendant

2.The decision in this case will serve as a pilot case for 11 other cases where similar Mareva orders had been made. The plaintiff in this case was the first Prime Minister of Singapore and presently is the Senior Minister in the Prime Minister`s Office. The first defendant, an advocate and solicitor of the Supreme Court of Singapore, was an unsuccessful opposition Worker`s Party candidate in the last parliamentary election. The main issue in these proceedings was whether the Mareva order was properly extended against Madam Teo. I have determined that issue in the affirmative in favour of the plaintiff and shall now reason out my decision.

3. Background facts

The proceedings arose out of 12 defamation actions (`the 12 actions`) instituted by the plaintiff and other leaders of the ruling People`s Action Party (`the PAP leaders`) against Mr Tang in January 1997 in respect of statements made by Mr Tang antecedent to general election held on 2 January 1997.

4.After the actions were commenced Mr Tang left Singapore on 4 January 1997. He has not returned since.

5.The PAP leaders believed that Mr Tang would not return to Singapore and was taking steps to dissipate or conceal his assets. Accordingly on 27 January 1997 they applied: (a). to add Madam Teo as second defendant in the 12 actions; and

(b). for a Mareva order against both defendants.

6.Lai Kew Chai J heard the ex parte application and granted a Mareva order against both defendants. The material parts of the order were as follows:

Disposal of assets

1(1) The defendants must not (i) remove from Singapore any of their assets which are in Singapore whether in their own name or not and whether solely or jointly owned up to the value of S$11,200,000.00 or (ii) in any way dispose of or deal with or diminish the value of any of their assets whether they are in or outside Singapore whether in their own name or not and whether solely or jointly owned up to the same value. Without prejudice to the generality of the above, this prohibition includes the following assets:

(a) the property known as no 75 Hua Guan Avenue Singapore 589171 or the net sale money after payment of any mortgages if it has been sold; and

(b) the property and assets (and proceeds of sale thereof) of the first defendant`s practice known as M/s Tang & Co.

(2) If the total unincumbered value of the defendants` assets in Singapore exceeds S$11,200,000.00, the defendants may remove any of those assets from Singapore or may dispose of or deal with them so long as the total unincumbered value of their assets still in Singapore remains about S$11,200,000.00. If the total unincumbered value of the defendants` assets in Singapore does not exceed S$11,200,000.00, the defendants must not remove any of those assets from Singapore and must not dispose of or deal with any of them, but if they have other assets outside Singapore the defendants may dispose of or deal with those assets so long as the total unincumbered value of all their assets whether in or outside Singapore remains above S$11,200,000.00.

Disclosure of information

2(1) The defendants must inform the plaintiff in writing at once of all their assets in Singapore whether in or outside Singapore and whether in their own name or not and whether solely or jointly owned, giving the value, location and details of all such assets.

(2) The information must be confirmed in an affidavit which must be served on the plaintiff`s solicitors within 5 days after this order has been served on the defendants.

Exceptions to this order

(1) This order does not prohibit the defendants from spending S$2,000.00 a week towards their ordinary living expenses and also a reasonable sum on legal advice and representation. But before spending any money the defendants must tell the plaintiff`s solicitors where the money is to come from.

(2) This order does not prohibit the defendants from dealing with or disposing of any of their assets in the ordinary and proper course of business. The defendants shall account to the plaintiff bi-weekly for the amount of money spent in this regard.

(3) The defendants may agree with the plaintiff`s solicitors that the above spending limits should be increased or that this order should be varied in any other respect but any such agreement must be in writing.

Effect of this order

(1) A defendant which is an individual who is ordered not to do something must not do it himself or in any other way. He must not do it through others acting on his behalf or on his instructions or with his encouragement.

(2) A defendant which is a corporation and which is ordered not to do something must not do it itself or by its directors, officers, employees or agents or in any other way.

7.On 17 February 1997 Madam Teo applied to discharge the Mareva order but did not file any affidavit in support of the application. When it came up for hearing her counsel applied to withdraw the application. In the event, it was dismissed with costs.

8.The order was made in respect of assets in Singapore as well as outside Singapore. It must, however, be remembered that it was merely an in personam order. accordingly it did not effectively bite any assets outside Singapore. That was made clear by a term in the order to that effect.

9.Even in Singapore the only significant asset which was captured by the order was the immoveable property, No 75 Hua Guan Avenue (`the property`), which was held in the sole name of Madam Teo.

10.By the time the application came up for hearing before me judgments had been entered against Mr Tang in the 12 actions and damages assessed at $3.63m all told and costs. All the judgments remain unsatisfied. Mr Tang was made a bankrupt on 6 February 1998. At the time the Mareva order was obtained the open market value of the property was about $5m. By the time the application came up for hearing before me, due to the economic turmoil in Asia, the value of the property had plummeted drastically as did every other property in Singapore. It also came to light that the property was subject to a mortgage in favour of OCBC. In the result there was no equity to answer a writ of execution.

11.The Mareva order therefore could no longer substantially fulfil its purpose. Further, although the plaintiffs could have pursued the matter further in respect of property in Malaysia, in view of the changed circumstances, they decided against it. They asked me as a gesture of compassion to Madam Teo to release from the hold of the order all the properties in her name. I did this without more ado. Madam Teo was not satisfied with this and claimed general damages on the ground that the Mareva order was obtained against her without warrant. I therefore gave full and fair opportunity to her and her counsel to present her case. After considering all the evidence and submissions I dismissed the application. I shall now give the reasons for my decision.

12.The ground on which she based her application was that her addition as second defendant was a misjoinder because Mr Tang had no beneficial interest in the property or any other property in her name. That assertion was postulated to depend on the equitable doctrine of presumption of advancement. In other words he purchased them for her sole benefit.

13. The joinder issue

Madam Teo argued that her joinder was improper as service on her of an order made against Mr Tang would have sufficed. I cannot agree with the contention. I shall explain why. When a Mareva injunction is granted it often catches assets in the possession or name of innocent third parties against whom no claim is asserted. In most cases it is a bank. In such cases it is unnecessary and improper to join the bank as an additional party to the proceedings. it is sufficient to give notice of the order to such parties who ordinarily would have no beneficial interest in the assets. They normally abide by the order and do not assist the defendant to defeat the order. If the person served with the injunction is prejudiced in any way by the order he can intervene in the action and seek appropriate reliefs.

14.However, where assets, in which the defendant is alleged to have an equitable interest, are in the name of a person who in some way is related or beholden to the defendant it would be just and proper to join that person as a defendant. The joinder would also be in the interests of the nominal owner of the asset as that nominal owner could come before the court as of right without having to intervene. More importantly, the nominal owner, by reason of him being a party, will have the benefit of the plaintiff`s counter-indemnity, should the court eventually order an inquiry as to damages suffered by him. See TSB Private Bank International SA v Chabra [1992] 2 All ER 245[1992] 1 WLR 231.

15.There is yet another reason for joining the nominal owner as an additional defendant. There are various interests in property to which a judgment debtor may be entitled, yet which cannot be taken in execution under the usual form of execution. Equitable interests in property held in the name of someone else is an example of proprietary interests which are not amenable to legal execution. Appointment of a receiver by way of equitable execution of equitable interests in property was conceived by the Court of Chancery to reach such interest. Where necessary the appointment of a receiver was supplemented by an injunction restraining the judgment debtor from dealing with the property. See Levermore v Levermore [1980] 1 All ER 1[1979] 1 WLR 1277 and Stevens v Hutchinson [1953] Ch 299.

16.Moreover, for the Mareva order to have the intended effect in respect of Mr Tang`s interest in immovable property, in the...