Merchant Ventures Pte Ltd v Chin Bay Ching

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu J
• Judgment Date: 19 November 2004
• Neutral Citation: [2004] SGHC 262
• Docket Number: Suit No 97 of 2004 (Summons in
• Date: 19 November 2004
• Published date: 24 November 2004
• Year: 2004
• Plaintiff Counsel: Kenny Khoo (Ascentsia Law Corporation)
• Citation: [2004] SGHC 262
• Defendant Counsel: Mak Kok Weng (Mak and Partners)
• Court: High Court (Singapore)
• Subject Matter: Defamation,Mandatory injunction,Whether damages adequate remedy,Injunctions,Tort,Whether defendant justified in sending letters,Whether withholding of mandatory injunction carrying greater risk of injustice,Whether any prejudice to defendant resulting if injunction granted,Whether preservation of own interest valid defence to claim in defamation,Letters sent by defendant to Chinese authorities prompting revocation of grant,Plaintiff alleging that letters defamatory,Plaintiff seeking mandatory injunction for withdrawal of letters,Justification

19 November 2004

Lai Siu Chiu J:

The background

1 Merchant Ventures Pte Ltd (“the plaintiff”) is a Singapore company and Chin Bay Ching (“the defendant”) was at one time an investor in the plaintiff, which in turn invested in the construction of a golf course, country club and several bungalows (“the project”) in Zhuhai, Guangdong Province, China.

2 On 14 June 2004, the plaintiff filed Summons in Chambers No 3183 of 2004 (“the application”) praying, inter alia, for the following orders:

(a) an injunction requiring the defendant to retract two letters, one dated 8 November 2002 (“the first letter”) issued by his solicitors, M/s Rajah & Tann, and the other dated 16 September 2003 (“the second letter”) issued by Vijay & Co on the defendant’s behalf and addressed to the Executive Deputy Mayor (“the Mayor”) of the Zhuhai Municipal People’s Government, Guangdong Province, by issuing a letter to the Mayor within seven days of the date of the order on the terms set out in the schedule to the application and to provide a copy of the said letter and the Chinese translation to the plaintiff within the same period;

(b) an injunction restraining the defendant, whether by himself, or his solicitors, servants or agents, from further communicating with the Mayor, the Zhuhai Land Administration Bureau or such other relevant authorities of Zhuhai municipality or Guangdong Province, whether directly or indirectly, on any matters relating to the plaintiff, the plaintiff’s involvement in the project and the Land Usage Right Grant (“the Grant”) given to the project and all matters in connection thereto including, without limitation, revocation of the Grant and any or all right of compensation arising therefrom until the determination of the main action.

3 I granted an order in terms of the above prayers of the application. The defendant has now appealed against my decision (in Civil Appeal No 86 of 2004).

The facts

4 According to the pleadings in this suit (and in two other related suits), sometime in 1997, the plaintiff entered into a joint venture with Zhuhai City Jin Xing Industry & Commerce Company (“Jin Xing”) to develop the project through a joint venture known as the Zhuhai Pearl Golf and Country Club (“the Club”).

5 Pursuant to the joint venture with Jin Xing, the plaintiff invested into the project RMB18.9m, which was equivalent to S$4.2m, whilst Jin Xing secured the Grant in favour of the Club from the Zhuhai Municipal People’s Government and other relevant authorities (hereinafter referred to as “the Chinese authorities”). The Grant was subsequently revoked by the Chinese authorities in January 2003. The plaintiff has appealed against the revocation of the Grant and is currently in the midst of negotiations with the Chinese authorities on the appropriate compensation for the revocation.

6 Of the S$4.2m invested in the joint venture, the defendant contributed $1,948,301 whilst the remaining $2,591,556 came from one Tan Siak Meng (“Tan”). The defendant, however, denied that Tan had contributed this or any sum towards the investment. In support thereof, he relied on the plaintiff’s Statement of Claim where it was pleaded[1] that Tan was not reflected as a shareholder of the plaintiff, nor was his loan entered into the books of accounts of the plaintiff. Neither was Tan appointed a director of the plaintiff.

7 In October 2001, the defendant entered into negotiations with Tan, who claimed he could revive the project which had been put on “hold” by the Chinese authorities in or about 1998 due to delays. On 1 December 2001, following negotiations between Tan, the defendant and one Ong Sooi Eng (“Ong”), an agreement (“the agreement”) was reached whereby Tan agreed to purchase the defendant’s entire shareholding in the plaintiff for the sum of S$2.6m. Tan would also give the defendant a bungalow and two golf memberships in the Club. In consideration thereof, the defendant would transfer to Tan one of the defendant’s shares in the plaintiff and also issue to Tan or his nominee seven new shares in the plaintiff. Earlier, Ong had been issued one share in the plaintiff for helping to reinstate the project.

8 On or about 18 February 2002, the agreement was varied and it was agreed that Ong’s share would be transferred to Tan while the seven new shares would be transferred to Anchorage Capital Pte Ltd (“Anchorage”). Anchorage is a Singapore private exempt company and its two shareholders are Tan and one Ong Tee Siang. Tan and Anchorage agreed to deposit blank transfer forms with a third party (Tan Soo Kiat) in the event that Tan failed to comply with his agreement to pay the sum due and to transfer the bungalow and golf memberships to the defendant. The one and seven shares were transferred to Tan and Anchorage respectively by the defendant.

9 As things turned out, Tan failed to abide by the agreement and failed (together with Anchorage) to execute the blank transfer deeds despite demands by the defendant. Consequently, the defendant instituted proceedings against Tan and Anchorage in Suit No 1395 of 2002 (“the first suit”) on 19 November 2002.

10 Just before the writ in the first suit was filed, the defendant’s solicitors wrote the first letter to the Mayor, the material portion of which, translated into English, reads as follows:

We wish to inform you that owing to the legal dispute over the shareholding among the members of the [plaintiff], we would like to request the authorities concerned through Your Honour to temporarily cease all consultations in respect of the use of land and other matters pertaining to the Zhuhai Mingzhu Country Club Project.

...

Enclosed are our letters written on behalf of our client to Mr Tan Siak Meng and Singapore Anchorage Capital Private Limited.

The first letter prompted the Chinese authorities to revoke the Grant in January 2003.

11 In June 2003, the first suit was amicably settled between the defendant and Tan by an exchange of letters dated 25 and 26 June 2003 between their solicitors (“the settlement”). Tan agreed to pay the defendant $1.95m (“the settlement sum”) to settle the defendant’s claim which sum would be paid by equal monthly instalments of $155,000 each with effect from 1 August 2003. The first suit would be discontinued upon full payment of the settlement sum. One of the terms of settlement was that the defendant would appoint a Chinese legal representative for the Club (called a “fa ren” in China) to withdraw the first letter.

12 Tan only paid the first instalment due on 1 August 2003 and refused to pay the further instalments, claiming that the defendant was in breach of the settlement terms. This prompted the defendant’s second set of solicitors to send the second letter to the Chinese authorities. The relevant extracts of the second letter read as follows:

We act for Chin Bay Ching (Chin) in place of Messrs Rajah & Tann who were Mr Chin’s previous solicitors in his suit against Tan Siak Meng and Anchorage Capital Pte Ltd. In this Suit No 1395/2002/E, Chin had sued Tan Siak Meng and Anchorage Pte Ltd for the return of shares in Merchant Ventures Pte Ltd (MVPL) that belonged to him because Tan and Anchorage had breached agreed conditions.

...

In these circumstances, we would like to put you on Notice that you may want to avoid any dealings with Mr Tan Siak Meng, Anchorage and MVPL or any party other than Chin concerning compensation until the matter is resolved.

13 On 1 October 2003, the defendant executed a deed of assignment with one Chuah Chong Eu (“Chuah”) whereby his claim for the balance $1,795,000 (“the assigned debt”) owed by Tan was assigned to Chuah in consideration of a payment of $300,000 by Chuah. Notice of the assignment was given to Tan on 4 October 2003 together with a demand for payment of the assigned debt, which notice received no response from Tan.

14 On 31 October 2003, Chuah commenced proceedings against Tan and Anchorage for the assigned debt in Suit No 1070 of 2003 (“the second suit”). On 9 February 2004, conditional leave to defend the action was granted to Tan and Anchorage. They failed to furnish security by the deadline imposed by the court with the result that final judgment was entered against them in the second suit on 24 February 2004. Their appeal to a judge in chambers was dismissed on 25...