Sarawak Timber Industry Development Corporation v Asia Pulp & Paper Company Ltd

Judgment Date13 November 2013
Date13 November 2013
Docket NumberOriginating Summons No 1075 of 2012 (Registrar's Appeal No 109 of 2013)
CourtHigh Court (Singapore)
Sarawak Timber Industry Development Corp and another
Plaintiff
and
Asia Pulp & Paper Co Ltd
Defendant

[2013] SGHC 243

Judith Prakash J

Originating Summons No 1075 of 2012 (Registrar's Appeal No 109 of 2013)

High Court

Civil Procedure—Judgments and orders—Enforcement—Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) —Whether foreign judgment conferring on contributories the right to receive sums of money payable to liquidator could and should be registered in Singapore under Reciprocal Enforcement of Commonwealth Judgments Act—Whether registration of foreign judgment should be allowed after expiration of 12-month time period—Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed)

The appellants and respondent were contributories in a Malaysian company which had been wound up. In 2007, during the liquidation, the liquidator applied for and obtained from the High Court in Sabah and Sarawak, Malaysia (‘Sarawak HC’) orders providing, inter alia, that the liquidator shall have leave to make a call against the respondent for unpaid share capital in the company; the liquidator may set off the sum due under the call with sums which were payable by the company to the respondent; and that the rights of enforcement to the balance sum after the set off (‘Balance Payment’) be wholly assigned to the appellants. The liquidator subsequently served a call on the respondent for the unpaid share capital. The respondent did not make any payment to the liquidator or the appellants. The respondent appealed against the Sarawak HC's orders but its appeal was dismissed by the Malaysian Court of Appeal.

In November 2012, the appellants sought to have one of the Sarawak HC orders which conferred on the appellants the rights of enforcement to the Balance Payment (‘the Relevant Order’) registered in Singapore under the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) (‘the Act’). The assistant registrar (‘AR’) hearing the application ex parte initially granted registration of the Relevant order. The application was then heard inter partes and the AR set aside her order granting registration, primarily on the ground that the Relevant Order was not a judgment for a sum of money. The appellants appealed against the AR's decision to refuse registration.

Held, allowing the appeal:

(1) The point of the applications taken out by the liquidator before the Sarawak HC was beyond doubt. The liquidator wanted to expedite the remainder of the winding-up process by seeking leave to make the call, ask for a set off of the amount owed by the company to the respondent from the amount under the call payable to the company, and return the surplus capital in the company to the appellants as contributories by assigning to the appellants the company's right to receive the Balance Payment from the respondent. In giving the orders which it did, the Sarawak HC effectively sanctioned the scheme conceived by the liquidator: at [23] .

(2) By ordering under the Relevant Order that the appellants shall have the rights of enforcement to the Balance Payment, the Sarawak HC had to have contemplated or intended that the appellants were entitled to receive the Balance Payment which was otherwise payable to the liquidator. If the rights of enforcement did not entitle the appellants to claim the Balance Payment directly from the respondent, the Relevant Order would be a null assignment. Compelling reasons must be present before a Singapore court should construe a judgment of a friendly foreign nation as being a nullity: at [31] .

(3) The statutory right of the liquidator to make calls on unpaid capital was generally regarded as an alternative to an action at law against the contributories for the same liability. Therefore, if the liquidator had already sought, obtained approval and made the call, it would seem a duplication to require the appellants being assignees of the liquidator's right to payment under that call to then commence an action for the same liability: at [32] .

(4) When construing the effect of a foreign judgment, the role of the Singapore court was not to construe foreign statutes which might or might not be applicable. The court's sole function was to construe the foreign judgment and what, from the Singapore court's perspective, the foreign court intended and did: at [36] .

(5) Apart from a bare assertion, the respondent did not show how it was prejudiced by the appellants' late application for registration of the order by the Sarawak HC. The delay of approximately one year after the expiry of the 12-month time period while long was not inordinate. Although the appellants were not as conscientious in seeking to locate the respondent's assets in Singapore as they could have been, it was fairly well-known and reported in two Singapore court decisions that the respondent was insolvent to the tune of USD 7 bn in 2002 and did not own any significant tangible assets or have any operations in Singapore. Although that was some eight years ago, it was reasonable to expect that it would have taken the respondent some time to restructure its business. The judgment creditor's lack of diligence in pursuing enforcement should not usually in itself be a reason for the court to dismiss a late application for registration. In the absence of any strong prejudice to the judgment debtor, the Singapore court should give effect to the spirit of the Act, viz,to facilitate the reciprocal enforcement of judgments: at [46] .

Deutsche Bank AG v Asia Pulp & Paper Co Ltd [2002] SGHC 257, HC (refd)

Deutsche Bank AG v Asia Pulp & Paper Co Ltd [2003] 2 SLR (R) 320; [2003] 2 SLR 320, CA (refd)

Duer v Frazer [2001] 1 WLR 919 (refd)

Peter Lalor Home Building Co-operative Society Ltd, Re [1958] VR 165 (refd)

Westacre Investments Inc v The State-Owned Company Yugoimport SDPR [2009] 2 SLR (R) 166; [2009] 2 SLR 166 (folld)

Companies Act (Cap 50, 2006 Rev Ed)

Companies (Winding Up) Rules (Cap 50, R 1, 2006 Rev Ed)

Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) ss 2 (1) , 3 (1) (consd)

Reciprocal Enforcement of Commonwealth Judgments (Extension) (Consolidation) Notification (Cap 264, N 1, 1999 Rev Ed)

Companies Act 1965 (1973 Rev Ed) (M'sia) s 215

Companies (Winding Up) Rules 1972 (M'sia) rr 74, 74 (3)

Wendy Lin and Benjamin Fong (Wong Partnership LLP) for the appellants

Adrian Tan, Raymond Lam and Mohan Gopalan (Drew & Napier LLC) for therespondent.

Judgment reserved.

Judith Prakash J

Introduction

1 This matter came before me as an appeal against the decision in Summons No 6372 of 2012 (‘SUM 6372’). Asia Pulp & Paper Company Limited (‘APP’) had successfully applied by SUM 6372 to set aside the decision of the assistant registrar (‘AR’) to register an order made by a Malaysian court under the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) (‘the Act’). The appellants before me, the parties who applied to register the order, are Sarawak Timber Industry Development Corporation (‘STIDC’) and State Financial Secretary Incorporated (‘SFS’).

Background

2 On 20 September 2002, the High Court in Sabah and Sarawak, Malaysia (‘Sarawak HC’) made a winding-up order in respect of a Malaysian company, Borneo Pulp & Paper Sdn Bhd (‘BPP’) and appointed a liquidator (‘the Liquidator’). APP, a Singapore company, STDIC, and SFS were shareholders of BPP at that time.

3 About a year later, on 5 December 2003, the Liquidator applied for leave from the Sarawak HC to make a call on APP in the sum of RM 117 m in respect of unpaid share capital in BPP (‘the SIC application’). On 25 August 2005, the Liquidator issued a report on the status of the liquidation of BPP (‘Final Report’). The SIC application had not yet been heard at this time.

4 In the Final Report, the Liquidator reported that all of the creditors of BPP had been paid in full. The Liquidator also reported that on collection of all assets (including calls on contributories), there would be a surplus of RM 41,821,029 which would be returned to the contributories. APP's share of this surplus would amount to RM 25,092,617. The Liquidator noted that a debt of RM 75,035,515 was due and owing from BPP to APP. As a result, a total amount of RM 100,176,132 would have to be credited to APP in the final analysis.

5 Subsequently, the Liquidator took the view that the liquidation process could be hastened if the total sum payable to APP was set off from the sum which was to be called from APP, with the balance of approximately RM 16.8 m payable by APP (‘the Balance Payment’) to be made payable to STDIC and SFS who were also entitled to the return of capital. The Balance Payment would be split between STDIC and SFS according to their respective shareholdings in BPP. Accordingly, the Liquidator filed a notice of motion on 30 August 2005 (‘the NOM’) seeking orders from the Sarawak HC to that effect.

6 In the event, the SIC application and the NOM were heard together on 31 May 2007 and decided on the same day as well. In respect of the SIC application, the Sarawak HC granted the Liquidator leave to make a call on APP for the amount of RM 117 m. The Liquidator had in fact sought a number of orders which were listed by the Sarawak HC in its judgment (‘the SIC Judgment’):

  1. (1) that the said liquidator of [BPP] be at liberty to make a call on [APP]... for the total amount of RM 117,000,000.00;

  2. (2) that in the event of failure by APP to settle the amount of RM 117 million [sic], the liquidator is at liberty to charge APP interest at the rate of four centum per annum from the date of judgment to date of payment;

  3. (3) such further or other orders be made or given as this Honourable Court deem just; and

  4. (4) costs of and occasioned by this application be provided for.

The SIC Judgement also stated the grounds of the Liquidator's application:

The grounds...

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1 books & journal articles
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2014, December 2014
    • 1 December 2014
    ...extent of his involvement in the matters relating to the claim. 8.54 Sarawak Timber Industry Development Corp v Asia Pulp & Paper Co Ltd[2014] 1 SLR 776 (Sarawak Timber) concerned a Malaysian court order assigning to the appellants the rights of enforcement to a sum payable by the responden......

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