Teleoptik-Ziroskopi v Westacre Investments Inc.

• Judgment Date: 31 January 2012
• Date: 31 January 2012
• Docket Number: Civil Appeals No 7, 9, 60 and 63 of 2011
• Court: Court of Appeal (Singapore)

Teleoptik-Ziroskopi and others

Plaintiff

and

Westacre Investments Inc and other appeals

Defendant

[2012] SGCA 8

Chao Hick Tin JA

,

Andrew Phang Boon Leong JA

and

V K Rajah JA

Civil Appeals No 7, 9, 60 and 63 of 2011

Court of Appeal

Civil Procedure—Garnishee proceedings—Whether summary determination was appropriate

Conflict of Laws—Choice of law—Contract

A judgment creditor on an English judgment applied to garnish monies held by the local branch of an international bank. The basis of the garnishee orders was the allegation that the true owner of those monies was the judgment debtor under the same English judgment. But this allegation was challenged by three other companies (‘the Other Parties’). Staking their claims to the garnisheed monies, they alleged the existence of a commission agency relationship, under which they were the true owners instead. These claims were rejected by the judgment creditor, who denied the existence of the commission agency. The judge declined to hold a trial and summarily determined that the garnished monies belonged wholly and exclusively to the judgment debtor. Accordingly, he made the garnishee orders absolute. His decision was appealed.

Held, allowing the appeals in part:

(1) Summary determination was appropriate only when there was no arguable defence in fact and law. In this case, the judge did not make any finding of fact, and had summarily dismissed the Other Parties' claims on the ground that they were baseless in law: at [35] and [36].

(2) In the circumstances of this case, the questions of fact and law could not be neatly separated. The resolution of key legal issues would hinge upon the facts from which they arose. Since certain findings of fact had not been made by the judge, the legal merits of the Other Parties' claims could not be properly assessed. For example: on the question of the proper law of the Commission Agreement, that could not be determined unless the court first made factual findings on the circumstances in which the contract had been entered into: at [37] to [43].

(3) Notwithstanding the fact that there had been considerable delay brought about by the judgment debtor in these proceedings, it would be unfair to deny the Other Parties (who had no part in the procedural manoeuvres of the judgment debtor) their day in court. Accordingly, the order making the garnishment absolute was set aside, and a trial ordered to resolve the factual disputes: at [44] and [45].

Pacific Recreation Pte Ltd v S Y Technology Inc [2008] 2 SLR (R) 491; [2008] 2 SLR 491 (refd)

Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2004] 1 AC 260 (refd)

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

Francis Xavier SC, Avinash Pradhan and Sarah Lim (Rajah & Tann LLP) and Suresh Damodara (Damodara Hazra LLP) for the appellants in CA 7/2011 and CA 60/2011 and the third to fifth respondents in CA 63/2011

Peter Gabriel and Kelvin Tan (Gabriel Law Corporation) for the appellant (s) in CA 9/2011 and CA 63/2011 and the second and third respondents in CA 60/2011

Khoo Boo Jin and Tan Hsuan Boon (Wee Swee Teow & Co) for the first respondent in CA 7/2011, CA 9/2011, CA 60/2011 and CA 63/2011

Leona Wong Yoke Cheng (Allen & Gledhill LLP) for the fourth respondent in CA 60/2011 and the second respondent in CA 63/2011.

Chao Hick Tin JA

(delivering the grounds of decision of the court):

1 The present four related appeals arose from a High Court judge's (‘the Judge’) decision to make absolute a number of interim garnishee orders which he had earlier granted (see Westacre Investments Inc v The State-Owned Company Yugoimport SDPR (Deuteron (Asia) Pte Ltd, garnishee) [2011] SGHC 123 (‘Judgment’) at [73]). In Civil Appeal No 60 of 2011 (‘CA 60/2011’) and Civil Appeal No 63 of 2011 (‘CA 63/2011’), the judgment debtor and related parties sought to reverse that decision, and their appeals were allowed to the extent that the garnishee orders absolute were set aside. The reason was that, in our view, a trial ought to be ordered to resolve certain factual issues raised by the judgment debtor and its related parties. Civil Appeal No 7 of 2011 (‘CA 7/2011’) and Civil Appeal No 9 of 2011 (‘CA 9/2011’) related to the same parties' applications to adduce new evidence, which the Judge had refused to admit. However, in view of our decisions in CA 60/2011 and CA 63/2011 (that there be a trial), CA 7/2011 and CA 9/2011 were rendered premature and no order was made on them. We now set out our reasons for ordering a trial of the factual issues raised by the judgment debtor and related parties.

The background

2 These appeals were the latest developments in a set of proceedings with a long and chequered history. These proceedings have, in one form or another, already appeared before this court twice previously (see Westacre Investments Inc v The State-Owned Company Yugoimport SDPR (also known as Jugoimport-SDPR) [2009] 2 SLR (R)166).

3 It began on 28 February 1994, when Westacre Investments Inc (‘the Judgment Creditor’) obtained an arbitral award in its favour. The Judgment Creditor subsequently commenced legal proceedings in England to enforce the award. On 13 March 1998, it obtained judgment against Yugoimport SPDR (‘the Judgment Debtor’) from the English High Court for slightly more than £41.5 m.

4 The English judgment was registered in Singapore many years later on 5 October 2004. On 28 October 2004, a Mareva injunction was granted to freeze Deuteron (Asia) Pte Ltd's (‘Deuteron’) accounts with Dn B Nor Bank ASA Singapore Branch (‘the Bank’). According to Deuteron's bank statements, the funds in these accounts (‘the Funds’) amounted to more than US$17 m as of March 2009.

5 On 28 April 2005, the Judgment Creditor took out Summons-in-Chambers No 2151 of 2005 (‘SIC 2151/2005’) and Summons-in-Chambers No 2152 of 2005 (‘SIC 2152/2005’) for provisional garnishee orders against the Bank and Deuteron respectively. The court issued garnishee orders to show cause a day later on 29 April 2005. However, the garnishee proceedings were stayed when the Judgment Debtor applied on 5 June 2005 to set aside the registration of the English judgment in Singapore.

6 The Judgment Debtor's application went up all the way to this court and on 9 May 2007, it directed the Judgment Creditor to refer, to the English courts, the question of whether the English judgment remained enforceable in England. The English High Court subsequently ruled in the affirmative. On 30 December 2008, this court denied the Judgment Debtor's application, and the...