Lee Shieh-Peen Clement and another v Ho Chin Nguang and others

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 09 September 2010
• Neutral Citation: [2010] SGCA 34
• Plaintiff Counsel: Luo Ling Ling and Rasanathan s/o Sothynathan (Colin Ng & Partners LLP)
• Docket Number: Civil Appeal No 17 of 2010
• Date: 09 September 2010
• Hearing Date: 06 July 2010
• Subject Matter: Civil Procedure
• Year: 2010
• Citation: [2010] SGCA 34
• Defendant Counsel: Julia Yeo Heem Lain and Richard Kalona (Robert Wang & Woo LLC)
• Court: Court of Appeal (Singapore)
• Published date: 21 September 2010

Chao Hick Tin JA (delivering the grounds of decision of the court): Introduction

This was an appeal against the decision of the Judge (“the Judge”) in Lee Shieh-Peen Clement and another v Ho Chin Nguang and others [2010] SGHC 12 which held that the Respondents were not in breach of, or in contempt of, a Mareva injunction issued against them. At the conclusion of the hearing we allowed the appeal and held that the Respondents were in breach of the Mareva injunction. We now give our reasons.

Background

Lee Shieh-Peen Clement and Kong Yew Seng, the plaintiffs in the main action and the first and second appellants in the appeal (“the Appellants”), are both businessmen. Ho Chin Nguang (“Ho”), the first defendant in the main action, is a friend of the Appellants and is also a businessman. Ng Sow Moi (“Ng”), the second defendant in the main action, is Ho’s wife, while Ho May Ing (“May Ing”), the third defendant in the main action, is Ho’s sister. For the purposes of the appeal, only Ho and Ng were the respondents and they will hereinafter be referred to collectively as “the Respondents”.

Sometime in May or June 2007, the Appellants entered into a joint venture (“the Agreement”) with Ho to incorporate a Chinese company (“the Company”) for the purposes of taking over a Gold Mining Project in Myanmar (“the first project”). While the exact oral terms of the Agreement on the first project were disputed, what was not in dispute was that in pursuance of the Agreement the Appellants in July/August 2007 issued two cheques for the total sum of S$4 million to Ho for the purposes of the first project. These cheques were deposited into a bank account in the name of the Respondents.

In March 2008, the second appellant, Kong Yew Seng, transferred another sum of S$4 million to Ho’s bank account for a potential joint investment in an iron ore mine in China. The Appellants averred that this sum of money was initially intended to be a bridging loan which could be converted into an investment in the purchase of the mine should the due diligence checks prove worthwhile. This bridging loan was also granted on the condition that it would be repaid in full to the Appellants in three months from the date of receipt of the said sum by Ho. However, with regard to this sum, the Respondents denied that it was intended to be a bridging loan. Instead, they asserted that the said sum was to all intents and purposes meant as a joint investment by the Appellants for subsequent investments (“the second project”) through the Company.

Later the Appellants discovered that some of the representations made by Ho in inducing the Appellants to be involved in the first project and the bridging loan were false. In September 2008, Ho returned a total of S$1.61 million to the Appellants. The Appellants also took away three cars which were registered in Ho’s name, Ho’s UOB bank passbook, identity card, passport and three of his watches. The Appellants alleged that all the payments and chattels were handed over to the Appellants by the Respondents on their own free will. These constituted part repayment of the monies due and owing by the Respondents to the Appellants with respect to the bridging loan. On the other hand, the Respondents contended that the Appellants wanted to back out of the first project and unreasonably demanded for the refund of S$4 million for the second project. Resorting to threats and harassments, the Respondents alleged that the Appellants compelled the Respondents to return the sum of S$1.61 million to them and also took away the abovementioned items.

On 31 March 2009, the Appellants commenced Suit 285 of 2009, which is the main action against Ho, Ng and May Ing to recover the sum of S$5.07 million to S$5.1 million. At the same time, the Appellants also took out an ex parte application for a Mareva injunction against all three defendants. On 7 April 2009, the Appellants successfully obtained an ex parte interim Mareva injunction against them. Under this order, the defendants were allowed to spend only S$500 a week for ordinary living expenses and S$500 a week or a reasonable sum on legal advice.

The Appellants later withdrew their claim against May Ing, and the ex parte interim Mareva injunction granted on 7 April 2009 was replaced by a final Mareva injunction on 31 July 2009 (“the Order”) against Ho and Ng, the Respondents in this appeal. Under the Order, the Respondents were allowed to spend S$1,500 a week towards their ordinary living expenses and S$1,500 a week or a reasonable sum on legal advice and representation. The relevant terms of the Order were:

Disposal of assets

1. (1) The 1st and 2nd Defendants must not:

(a) remove from Singapore, in any way dispose of or deal with or diminish the value of their assets which are in Singapore whether in their own name(s) or not and whether solely or jointly owned up to the value of SGD$5,100,000; or (b) 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(s) or not and whether solely or jointly owned up to the same value.

(2) This prohibition includes the following assets, in particular: (a) the property known as 57 Hume Avenue, #07-08 Parc Palais Singapore 598753 or the net sale proceeds if it has been sold; (b) any money in any sole or joint bank account(s) situated in Singapore, or elsewhere, as per Schedule 2: (c) the 1ST Defendant’s Seletar Country Club membership; (d) the following Vehicles owed (sic) by the 1st and 2nd Defendants: (i) BMW with Vehicle Registration No. SFF 80 R; and (ii) Toyota MPV with Vehicle Registration No. SBJ 80 S. (e) the following watches owed (sic) by the 1st Defendant: (i) Roger Dubui diamond studded watch; and (ii) Cartier rose gold watch.

(3) If the total unencumbered value of the 1st and 2nd Defendants’ assets in Singapore exceed SGD $5,100,000.00, the 1st and 2nd Defendants may remove any of those assets from Singapore or may dispose of or deal with them so long as the total unencumbered value of the assets still in Singapore remains not less than SGD $5,100,000.00.

(4) If the total unencumbered value of the 1st and 2nd Defendants’ assets in Singapore does not exceed SGD $5,100,000.00, the 1st and 2nd 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 1st and 2nd Defendants may dispose of or deal with those assets as long as the total unencumbered value of all his assets whether in or outside Singapore remains not less than SGD $5,100,000.00.

Disclosure of information

2. The 1st and 2nd Defendants must inform the Plaintiffs in writing at once all their assets whether in or outside Singapore whether in their own name(s) or not and whether solely or jointly owned, giving the value, location and details of all such assets. The information must be confirmed in an affidavit which must be served on the Plaintiffs’ solicitors within seven (7) days after this order has been served on the 1st and 2nd Defendants. [emphasis added]

EXCEPTIONS TO THIS ORDER

3. This order does not prohibit the 1st and 2nd Defendants from spending $1,500.00 a week towards their ordinary living expenses and also $1,500.00 a week or a reasonable sum on legal advice and representation. But before spending any money the 1st and 2nd Defendants concerned must tell the Plaintiffs’ solicitors where the money is to come from. [emphasis in original in bold; emphasis added in italics]

4. This order does not prohibit the 1st and 2nd Defendants from dealing with or disposing of any of their assets in the ordinary and proper course of business. The 1st and 2nd Defendants shall account to the Plaintiffs within three (3) weeks for the amount of money spent in this regard.

On 17 November 2009, the Appellants obtained leave to apply for an order of committal against the Respondents for their contempt of the orders of court of 7 April 2009 and 31 July 2009 by failing to inform the Appellants’ solicitors in writing within the requisite time limit or at all of: the value and details of all their assets whether in or outside Singapore by way of an affidavit which was to have been served on the Appellants’ solicitors within seven (7) days after the orders dated 7 April 2009 and 31 July 2009 had been served on the Respondents; and the source of the money to be used before spending the same in the amount specifically limited by the High Court for the Respondents’ expenditure on ordinary living and legal expenses.

The decision of the Judge

On 11 December 2009 the committal application came before the Judge who held that the Respondents had not breached cl 2 of the Order (“clause 2” or “cl 2”) with respect to the disclosure of the Respondents’ assets. In his view, cl 2 by its express terms only required a one-off disclosure by an affidavit listing out the assets of the Respondents and that had been done. Clause 2 did not require the Respondents to file further affidavits to set out assets which the Respondents might subsequently have acquired. On that basis, Ho’s subsequent receipt of a monthly cash allowance of IDR 134,819,900 (“the monthly allowance”) from the Indonesian company PT Mega Fortune (“PT Mega”) for his role as its advisor and Vice Chairman, after the due submission by the Respondents of the affidavit of assets as required by cl 2, was not an asset that was required to be disclosed by the Respondents pursuant to the terms of the Order, in particular cl 2.

The Judge also held that cl 1(4) of the Order by its terms only restricted the disposal or dealing of disclosed assets. It was concerned with the diminution of the disclosed assets. In his opinion, the monthly allowance was not by its nature an asset within the contemplation of the Order, and this was so even if we assumed that there was...