Ooi Ching Ling Shirley v Just Gems Inc

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 14 August 2002
• Neutral Citation: [2002] SGCA 38
• Date: 11 October 2002
• Subject Matter: Costs,O 57 r 3(4) Rules of Court,'Fit',Words and Phrases,Applicable test and considerations in granting such applications,Application for further security for costs,Civil Procedure,Whether circumstances warrant making order for further security,Security for costs
• Docket Number: Civil Appeal No 15 of 2002
• Published date: 19 September 2003
• Defendant Counsel: Philip Ling (instructed) and Mohamed Gul (Peter Low, Tang & Belinda Ang)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Benjamin Goh (Arthur Loke Bernard Rada & Lee)

Finance [1999] 3 SLR 229 meant that enforcing a judgment for costs against the appellant’s property would entail undue delay and expense.

Held,

granting the respondents’ application

(1) The power granted to the court by O 57 r 3(4) confers an unfettered discretion to the court to make orders as it deems "fit". This concept of "fit" must encompass the notion of what is just in all the circumstances (see 17-18)

(2) Foreign residency is a ground warranting the imposition of further security for costs if there would be undue delay and expense in enforcing an order for costs, since the whole point of ordering a foreign plaintiff or appellant to furnish security is to ensure that a fund would be available within the jurisdiction of this court against which a successful defendant or respondent could enforce the order for costs (see 19, 27), De Bry v Fitzgerald [1990] 1 All ER 560 and Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420 followed.

(3) The merits of the appeal are also a valid factor for consideration in determining whether it is just to order that further security be furnished. Here, it had been assumed that there could be some merits in the appeal. (see 29)

(4) Another factor to be considered is if the application is so late that the bulk of the costs have already been incurred by the appellant. The court would look at whether there was a satisfactory explanation by the appellant, in the absence of which the application may be refused. (see 20)

(5) In the present case, the appellant’s previous conduct evidenced an intention to resist vigorously an order for costs if made against her and it was likely that she would make it difficult for any enforcement of such order to take place. It was notable that in her affidavit filed to oppose the application, she was silent concerning the respondents’ allegations that she did not intend to satisfy the judgement debt and/or costs awarded against her. In addition, her conduct in relation to the attempts by the respondents’ to satisfy their judgment debt gave the impression that she was trying to evade enforcement action. (see 14, 24-25)

(6) The respondents had only made their application when it became clear from the appellant’s conduct that she was likely to resist enforcement of an order for costs against her; hence, there could not be said to be a delay in the making of the application (see 21,22)

(7) Enforcement of an order for costs against the appellant was also likely to give rise to undue delay and expense for two reasons: Firstly, there is no arrangement for reciprocal enforcement of judgments between Singapore and USA, where the appellant is resident; secondly, the ruling in Malayan Banking meant that the fact that the appellant was a joint tenant of a private residential property in Singapore would not obviate there from being difficulties in enforcement of an order for costs (see 26)

(8) It was also clear that the appellant was a person with means, hence there was no danger of her appeal being stifled by an order to furnish security. In view of all the circumstances, an order to the appellants to furnish further security of $30,000 was appropriate and just. (see 27-28)

Case(s) referred to

De Bry v Fitzgerald

[1990] 1 All ER 560 (folld)

Lek Swee Hua v American Express International Inc

[1991] 2 MLJ 151 (refd)

Malayan Banking Bhd v Focal Finance Ltd

[1999] 3 SLR 229 (refd)

Porzelack KG v Porzelack (UK) Ltd

[1987] 1 WLR 420 (folld)

Legislation referred to

Rules of Court O 57 r 3(4)

Rules of the Supreme Court (1965) [UK] O 59 r 10(5)

Judgment

GROUNDS OF DECISION

1 This was an application by way of a motion, filed by the respondent, in Civil Appeal No. 15/2002 for an order to require the appellant to furnish further security for the costs of the appeal. After hearing the parties, we allowed the motion by ordering that a further security of $30,000 be furnished by the appellant. The standard security of $10,000 was already furnished when the notice of appeal was filed. We now give our reasons.

Background

2 The appellant, Shirley Ooi Ching Ling (Shirley Ooi), is a substantial shareholder in a British Virgin Island company, Pacific Rim Trading Ltd (Pacific Rim). It is an investment company. Pacific Rim, in turn, held shares of a Californian company, Agate Technologies Inc (Agate), which is involved in the development of software technology. Shirley Ooi is a shareholder of Pacific Rim and a director of both Pacific Rim and Agate.

3 In June 1996, Shirley Ooi offered to sell to one Jamilah Binti Abu Bakar (Jamilah) 750,000 shares in Agate. The respondent company, Just Gems Inc (JGI), was incorporated by Jamilah also in British Virgin Island to hold the Agate shares for Jamilah. Some two months later, Shirley Ooi offered to Jamilah about 22% of Pacific Rim shares (or the equivalent of 1,000,000 Agate shares) for a sum of US$500,000. This latter offer was accepted. Payment was to be by instalments. Jamilah claimed that on 16 September 1996, she paid US$200,000 into Shirley Ooi’s Citibank account. This was followed by US$250,000 on 6 November 1996 and US$100,000 on 20 November 1996. In total, US$550,000 was paid. It was explained that an excess of US$50,000 was paid by mistake. The Pacific Rim shares so bought by Jamilah were to be registered in the name of JGI.

4 On the other hand, Shirley Ooi asserted that only US$450,000 had been paid. Eventually, a total of 126,001 shares in Pacific Rim were, by mistake, registered in the name of Jamilah. Following a capital restructuring, this shareholding of Jamilah became 900,007 shares, representing slightly more than 20% of the shares in Pacific Rim. Despite numerous requests, and Shirley Ooi’s promise that the shares would be transferred and registered in the name of the respondent, JGI, this was never done. JGI instituted the present action seeking a declaration that the contract between JGI and Shirley Ooi was void for a total failure of consideration, as JGI never became a shareholder of Pacific Rim. It also asked for the return of the US$550,000 paid to Shirley Ooi.

5 The trial judge, Judith Prakash J, found that a contract was concluded between JGI and Shirley Ooi; that the contract was void due to a failure of consideration, and that Shirley Ooi should return the US$550,000 to JGI. Shirley Ooi was dissatisfied with the decision and has appealed, and which appeal is pending.

6 On 21 May 2002, JGI applied by motion for further security for costs in a sum of S$100,000. On 2 July 2002, this was refused by a single Judge exercising the powers under s 36(1) of the Supreme Court of Judicature Act (SCJA). Following that refusal, JGI applied to this Court to review the decision of the single Judge and asked that the application for further security be granted.

Grounds for application

7 The grounds upon which JGI sought to obtain further security for costs fell under three main heads.

(i) Shirley Ooi is not ordinarily resident in Singapore;

(ii) the conduct of Shirley Ooi showed that she was evasive and did not want to satisfy the judgment debt owed by her and was likely to resist any enforcement of any order for costs; and

(iii) although she has an asset in Singapore, in the form of a flat jointly owned with her husband, enforcement of any order on costs would be protracted and expensive.

8 It was not in dispute that Shirley Ooi was and is ordinarily resident in California, USA. According to her solicitors, she has been residing in USA "for at least the past six years", if not longer. She is the Chief Financial Officer of Agate.

9 JGI also referred to the following facts regarding the residential address of Shirley Ooi. In her affidavit of evidence-in-chief she stated her address to be care of 519 Montague Expressway, Milipitas, CA 95035, the company address of Agate. At the trial she stated on oath that she resided at 1600 Carmentia Road, Cerritos, California 90703, which was not the case. In her certificate for security for costs, the address 16000 Carmentia Road was given as a "care of" address. Then, by a search through the INTERNET, for the purposes of levying execution on the judgment obtained against Shirley Ooi, JGI discovered the correct address to be "16000 Carmenita Road", and not "16000 Carmentia Road" and that the address was the address of Agate.

10 On 6 March 2002, JGI’s solicitors, M/s Peter Low, Tang & Belinda Ang (PL),...