Relfo Ltd v Bhimji Velji Jadva Varsani

Judgment Date31 July 2009
Date31 July 2009
Docket NumberSuit No 612 of 2006 (Summons No 1527 of 2009 and Registrar's Appeals Nos 111 and 112
CourtHigh Court (Singapore)
Relfo Ltd (in liquidation)
Bhimji Velji Jadva Varsani

[2009] SGHC 174

Andrew Ang J

Suit No 612 of 2006 (Summons No 1527 of 2009 and Registrar's Appeals Nos 111 and 112 of 2009)

High Court

Civil Procedure–Stay of proceedings–Stay of proceedings pending payment of taxed costs of action–Conflict of laws–Restraint of foreign proceedings–Whether action commenced in foreign jurisdiction vexatious or oppressive–Revenue Law–International taxation–Whether disclosure of documents to foreign court amounted to indirect enforcement of foreign revenue laws

The current application and two registrar's appeals were a sequel to Relfo Ltd v Bhimji Velji Jadva Varsani [2008] 4 SLR (R) 657 (“the Singapore Action”). The defendant held 25% of the share capital of the plaintiff company. Subsequently, the plaintiff wound up voluntarily. In the Singapore Action, the High Court held that the defendant knowingly received traceable proceeds of 500,000 sent out of the plaintiff's bank account. However, at the time of the suit, the only creditor of the plaintiff was the UK Inland Revenue. In the light of this, the High Court found that the purpose of the claim was to recover funds to pay the outstanding taxes. The High Court therefore dismissed the claim as an attempt to enforce foreign revenue law indirectly. Although the plaintiff's subsequent appeal to the Court of Appeal was dismissed, the Court of Appeal did not vary the findings of fact made by the High Court.

The current application and appeals made by the defendant are:

  1. (a) For an anti-suit injunction so that the plaintiff would be restrained from pursuing any foreign legal action against the defendant for matters or issues related to the Singapore Action.

  2. (b) An appeal against the decision of the assistant registrar (“AR”) allowing the plaintiff's application to adduce documents obtained for the Singapore Action in foreign proceedings.

  3. (c) An appeal against the decision of the AR dismissing the defendant's application to stay proceedings in the plaintiff's application to adduce documents in foreign proceedings pending payment by the plaintiff to the defendant of the balance of the cost awarded by the Court of Appeal in the Singapore Action.

Held, dismissing the application and appeals:

(1) The court was entitled to look at all the relevant factors when deciding whether an anti-suit injunction ought to be ordered. Here, it would be absurd for a Singapore Court, having declined to grant judgment on the ground that to do so would be an indirect enforcement of UK revenue law, to then step beyond that to restrain proceedings in the UK for recovery of the same money knowingly received: at [12] and [14].

(2) The fact that the parties and issues were the same might constitute cogent and persuasive reason for the release from the implied undertaking not to use documents disclosed in one suit for the purposes of another. Here, cogent reason was found given the commonality of parties and causes of action in the UK Proceedings and the Singapore Action: at [28] and [34].

(3) A distinction should be made between enforcing foreign revenue law and assisting the foreign court. In the latter case, any enforcement of revenue law would only be in the foreign country itself. Here, the court was asked to permit the plaintiff to adduce documents discovered in Singapore in its UK proceedings. While that would assist the plaintiff in the UK proceedings, there was no enforcement in Singapore of UK revenue law: at [31] and [33].

(4) The inherent jurisdiction to stay proceedings pending payment of legal costs should only be invoked in exceptional circumstances where there was a clear need for it and the justice of the case so demanded. Although the plaintiff was insolvent and therefore, the costs owed to the defendant were not recoverable under the normal enforcement process, the circumstances were not exceptional enough to stay proceedings. Moreover, the defendant was still holding on to money which properly belonged to the plaintiff: at [36], [38] and [39].

Bank of America National Trust and Savings Association v Djoni Widjaja [1994] 2 SLR (R) 898; [1994] 2 SLR 816 (folld)

Bayer AG v Winter (No 2) [1986] ECC 465 (refd)

Beckkett Pte Ltd v Deutsche Bank AG [2005] 3 SLR (R) 555; [2005] 3 SLR 555 (refd)

Halcon International Inc v The Shell Transport and Trading Co [1979] RPC 97 (refd)

Ho Wing On Christopher v ECRC Land Pte Ltd [2006] 4 SLR (R) 817; [2006] 4 SLR 817 (refd)

Hong Lam Marine Pte Ltd v Koh Chye Heng [1998] 3 SLR (R) 526; [1998] 3 SLR 833 (refd)

John Reginald Stott Kirkham v Trane US Inc [2009] SGCA 32 (refd)

Koh Kay Yew v Inno-Pacific Holdings Ltd [1997] 2 SLR (R) 148; [1997] 3 SLR 121 (folld)

Masri v Consolidated Contractors International Co SAL [2008] 2 Lloyd's Rep 301 (refd)

Relfo Ltd v Bhimji Velji Jadva Varsani [2008] 4 SLR (R) 657; [2008] 4 SLR 657 (refd)

Riddick v Thames Board Mills Ltd [1977] QB 881 (refd)

Roberto Building Material Pte Ltd v Oversea-Chinese Banking Corp Ltd [2003] 2 SLR (R) 353; [2003] 2 SLR 353 (folld)

Ser Kim Koi v William Merrell Fulton [2009] SGHC 5 (folld)

Société Eram Shipping Co Ltd v Compagnie Internationale de Navigation [2001] EWCA Civ 568 (folld)

Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 (folld)

State of Norway's Application,In re [1990] 1 AC 723 (folld)

Tucker (Jersey), In Re [2000] BPIR 876 (refd)

Wahr-Hansen v Compass Trust Co Ltd10 ITELR 580 (refd)

Manoj Sandrasegara, Tan Mingfen and Sheryl Wei Kejia (Drew & Napier LLC) for the plaintiff

Leo Cheng Suan and Teh Ee-Von (Infinitus Law Corporation) for the defendant.

Andrew Ang J


1 The application and two registrar's appeals before me are the sequel to Relfo Ltd v Bhimji Velji Jadva Varsani [2008] 4 SLR (R) 657 (“the Singapore Action”). The plaintiff company, Relfo Ltd (in liquidation), was incorporated in the United Kingdom in January 1996. From the inception, the defendant, Bhimji Velji Jadva Varsani, and his brother each held 25% of the plaintiff's share capital while another 25% was held by Devji Ramji Gorecia (“Gorecia”) and his wife. Two other shareholders, Geoffrey David Roberts (“Roberts”) and Simon Patrick Wainwright (“Wainwright”) held the remaining 25% between them. From the time of its incorporation until June 2001, the plaintiff's directors were Gorecia, Roberts, Wainwright and the defendant's father. In June 2001, the plaintiff sold a property for more than 4m. The plaintiff's tax liability was estimated to be about 1.26m. At a board meeting held in June 2001, it was agreed that a sum of 3,546,518 net of tax would be distributed to the shareholders of the plaintiff as dividends. The sum was duly paid out. Concurrently, all the directors (except Gorecia) resigned and Gorecia's wife was appointed a director of the plaintiff. On the same day, the shareholders (other than Gorecia) transferred their shares in the plaintiff to Gorecia and his wife at nominal values. Thereafter, Gorecia and his wife were the plaintiff's only directors and shareholders.

2 On 26 April 2004, the UK Inland Revenue (“UKIR”) issued a “Notice Warning of Legal Proceedings” to the plaintiff in relation to the tax liability incurred in 2001 (see above at [1]). However, no payment by the plaintiff was made to the UKIR.

3 Instead, on 4 May 2004, Gorecia gave instructions for a sum of 500,000 to be transferred from the plaintiff's HSBC account into the account of one Mirren Ltd (“Mirren”), a company registered in the British Virgin Islands. On 5 May 2004, a sum of US$878,479.35 was remitted to the defendant's account with Citibank, Singapore branch (“Citibank account”) by Intertrade Group LLC (“Intertrade”). On 10 May 2004, the sum of US$878,469.35 (after deducting US$10 for bank charges) was credited into the defendant's Citibank account. On 3 May 2004, the defendant transferred a sum of US$100,000 from his Citibank account to Gorecia and his wife.

4 On 23 July 2004, it was resolved at a meeting of the plaintiff's members that the plaintiff be wound up voluntarily as it could not, by reason of its liabilities, continue its business. The only two creditors of the plaintiff at that time were Gorecia and the UKIR, which was the majority creditor. At the creditors' meeting, Timothy James Bramston (“Bramston”) was appointed the liquidator. Gorecia informed Bramston that the sum of 500,000 (referred to above at [3]) was for an investment involving the purchase of a container of computer goods, but the investment had failed and there were no prospects of recovery of the payment. However, Bramston's investigations eventually led to the discovery...

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    • 10 April 2017
    ...Thames Board Mills Ltd [1977] QB 881 as applied and developed in Singapore in Relfo Ltd (in liquidation) v Bhimji Velji Jadva Varsani [2009] 4 SLR(R) 351 and Beckkett Pte Ltd v Deutsche Bank AG [2005] 3 SLR(R) 555. I add that nothing in this decision is to be taken as suggesting that any al......

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