Nganthavee Teriya alias Gan Hui Poo v Ang Yee Lim Lawrence and Others (Lim Eng Hock Peter and Another, Third Parties)

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 10 April 2003
• Neutral Citation: [2003] SGHC 86
• Date: 10 April 2003
• Subject Matter: Striking out,Whether wrongdoer entitled to claim contribution from third party if it would result in wrongdoer retaining part of wrongful gain,No reasonable cause of action,No common issues to be determined,Civil Law Act (Cap 43, 1994 Rev Ed) s 11(2),Civil Procedure,Third party proceedings
• Docket Number: Suit No 693 of 2002 (Registrar's
• Published date: 12 October 2003
• Defendant Counsel: Michael Palmer (Harry Elias Partnership),Harry Elias SC (Harry Elias Partnership),Chentil Kumarasingam (Harry Elias Partnership),Josephine Chong
• Court: High Court (Singapore)
• Plaintiff Counsel: Engeline Teh SC

1 The plaintiff, Ms Teriya Nganthavee, and her husband, Mr Tan Buck Chye (‘BC Tan’), were, until June 1997, shareholders and directors of two Singapore companies, Europa Holdings Pte Ltd (‘Europa’) and Erasmia Pte Ltd (‘Erasmia’). The defendants, Ang Yee Lim Lawrence, Tan Leong Ko William and Foo Jong Long Dennis were also shareholders and directors of the two companies. Subsequently, the plaintiff and BC Tan sold their shares in the companies to the defendants.

2 This action was commenced in June 2002. In it, the plaintiff claimed against all three defendants damages for misrepresentation and/or breach of an oral agreement and/or breach of fiduciary duties and/or conspiracy. She also claimed the costs of and expenses of investigating their conspiracy. There was a further or alternative claim for an account of all monies and benefits allegedly received by the defendants arising out of their alleged fraud of the plaintiff. Finally, she wanted a declaration that the defendants each held all sums received by them in fraud of the plaintiff as resulting or constructive trustees for her and an order that they pay those sums to her.

3 The disputes between the parties arose after Europa embarked on what it called the RTC project. This project involved the construction and management of a private recreation club to be known as the Raffles Town Club. To obtain land to be used for the club’s premises, Europa successful tendered for a 30 year leasehold interest in a piece of vacant land at the junction of Dunearn Road and Whitley Road. The tender price was $100 million. In view of this large sum, one Lim Eng Hock Peter (‘Peter Lim’) was brought in as another investor in the RTC project.

4 According to the plaintiff, following Peter Lim’s entry, the three defendants embarked on a conspiracy to defraud her and her husband by, first, diluting their respective shareholdings in Europa and Erasmia and, secondly, by procuring the sale of the plaintiff’s and BC Tan’s shares in the two companies at an undervalue. The conspiracy was effected by a series of overt acts that included:

(i) a series of fraudulent misrepresentations by Lawrence Ang and William Tan to induce the plaintiff and BC Tan to consent to a rights issue exercise for Europa on 13 November 1996, the object of which was the dilution of their shares in Europa. Pursuant to this rights issue their shares were in fact diluted by half and this eventually resulted in their entitlement to shares in Erasmia being similarly halved;

(ii) a series of fraudulent misrepresentations by each of the defendants, in breach of their fiduciary duties, as to the success of the RTC project and a deliberate suppression of material information from the plaintiff and BC Tan, thereby inducing the sale of all the plaintiff’s and BC Tan’s shares in Europa and Erasmia at an undervalue.

It should be noted that by Suit 288 of 2002, BC Tan commenced action against the same three defendants as those sued here on the same bases as those set out here and for similar reliefs.

5 Lawrence Ang and William Tan appointed the same lawyer to defend the claim on their behalf. They filed a joint defence denying liability and disputing the plaintiff’s claim. Subsequently, they filed a third party notice against two third parties, the first being Peter Lim and the second being BC Tan. This was followed up by a third party statement of claim. Basically, they wanted the third parties to indemnify them against any liability in respect of the plaintiff’s claim and the costs of the action or for a contribution to the plaintiff’s claim and the costs of the action to such extent as the court deemed fit. In relation to the third party action, I will refer to Lawrence Ang and William Tan jointly as ‘the claimants’.

6 BC Tan then applied to strike out the statement of claim in the third party proceedings. At the first hearing of that application on 1 October 2002, the assistant registrar agreed with the submissions made by his counsel that the claimants’ statement of claim against BC Tan disclosed no cause of action and ought to be struck out. Counsel for the claimants argued, however, that they should be given the opportunity to amend their statement of claim. The court adjourned the hearing of the striking out application to give them this opportunity.

7 The claimants then filed an application to amend their third party notice and statement of claim against BC Tan and this application was fixed to be heard at the same time as the adjourned summons in chambers for striking out. The two applications were heard together on 29 October 2002. At the end of the hearing, the assistant registrar granted BC Tan’s application to strike out the statement of claim and dismissed the claimants’ application for amendments of the third party notice and statement of claim. The claimants appealed against both decisions. I heard both appeals and dismissed them.

Reasons

8 BC Tan was successful in his application and in resisting the appeals against the registrar’s decisions because I considered that the proposed amended third party statement of claim to be filed by the claimants did not disclose any basis on which they could claim an indemnity or any contribution from BC Tan in respect of any liability they had to his wife, the plaintiff. The original statement of claim had already been found wanting by the assistant registrar and their counsel had therefore put up a proposed amended draft in order to rectify the deficiencies of the original. In my view, the proposed amendments could not cure the fundamental flaws in their case against BC Tan. The proposed statement of claim is, however, a long and rather complicated document. The claims against BC Tan are stated at various paragraphs of the document. I will go through each relevant section of the pleading and indicate in relation thereto why I did not accept the contentions of Mr Elias, counsel for the claimants, that they had sustainable claims against BC Tan. Before doing so, however, I should refer to the relevant law.

The law

9 The right of a defendant who is sued in a civil action to claim an indemnity or contribution from a third party in respect of his liability to the plaintiff is conferred on him by the provisions of the Civil Law Act (Cap 43) (‘the Act’). At the time that the events giving rise to the plaintiff’s alleged right to sue the defendants herein took place, the relevant section of the Act was s 11. This has now been amended but the new version does not apply to events occurring before 1 January 1999.

10 The relevant portions of s 11 read as follows:

Proceedings against, and contribution between, joint and several tortfeasors.

11.(1) Where damage is suffered by any person as a result of a tort (whether a crime or not) –

(a) …

(b) …

(c) any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise, so however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought.

(2) In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity.

11 It would be noted that the right of one tortfeasor to recover a contribution from another tortfeasor depends only on whether the second tortfeasor would also have been responsible to the plaintiff for the damages sustained by the plaintiff if the plaintiff had sued him. Thus, the right of contribution does not depend on any contractual or tortious relationship between the two tortfeasors. However, the right conferred on one tortfeasor by s 11(1)(c) is not an absolute right. It is subject to the power given to the court by s 11(2) to exempt any person from liability to make a contribution.

12 During the course of the argument before me, I was somewhat perturbed by the notion that s 11 gave a tortfeasor who was a party to a conspiracy and who had been sued by the victim of that conspiracy for damages, the right to claim a contribution from a fellow conspirator. It seemed to me that allowing such a claim would be tantamount to allowing a party in an action to rely on his own illegality to recover damages from another and that this would be contrary to the ex turpi causa maxim. Mr Elias then cited K and Another v P and Others [1993] CH 140 that dealt with this very problem.

13 The plaintiffs in K v P brought an action against the defendants for, inter alia, conspiracy to defraud the plaintiffs by the obtaining of inflated fees and commission payments in relation to transactions conducted by the defendants on the plaintiffs’ behalf. The third defendant issued a third party notice against the plaintiffs’ accountant claiming an indemnity or contribution in the event of the third defendant being held liable to the plaintiffs, on the ground that the accountant had negligently failed to warn the plaintiffs of the risks inherent in the defendants’ transactions. The accountant sought to have the third party notice struck out. The master held that the claim was capable of falling within s 11 of the Civil Liability (Contribution) Act, 1978 (‘the English Act’) and dismissed the application. The third party’s appeal was dismissed. It was held that the liability imposed under s 11 of the English Act was intended by Parliament to enable claims for contribution to be made as between parties who had no claim to contribution under the general law, and...