The ‘Bunga Melati 5’

• Jurisdiction: Singapore
• Court: Court of Three Judges (Singapore)
• Judgment Date: 21 August 2012
• Docket Number: Civil Appeal No193 of 2010
• Date: 21 August 2012

[2012] SGCA 46

Court of Appeal

Chan Sek Keong CJ, Andrew Phang Boon Leong JA and VK Rajah JA

Civil Appeal No193 of 2010

The ‘Bunga Melati 5’

Leong Kah Wah, Teo Ke-Wei Ian and Koh See Bin (Rajah & TannLLP) for the appellant

Prem Gurbani and Tan Hui Tsing (Gurbani & Co) for the respondent.

AA V, The [1999] 3 SLR (R) 664; [2001] 1 SLR 207 (refd)

Alliance Entertainment Singapore Pte Ltd v Sim Kay Teck [2006] 3 SLR (R) 712; [2006] 3 SLR 712 (folld)

Armagas Ltd v Mundogas SA [1986] AC 717 (folld)

Boris Abramovich Berezovsky v Roman Arkadievich Abramovich [2010] EWHC 647 (Comm) (refd)

Carl Zeiss Stiftung v Rayner & Keeler Ltd [1967] 1 AC 853 (folld)

DSVSilo-Und Verwaltungsgesellschaft mbH v Owners of The Sennar and 13 Other Ships [1985] 1 WLR 490 (folld)

DPP v Ray [1974] AC 370 (refd)

Equatorial Marine Fuel Management Services Pte Ltd v The ‘Bunga Melati 5’[2010] SGHC 193 (overd)

Freeman & Lockyer (A Firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 (folld)

Goh Nellie v Goh Lian Teck [2007] 1 SLR (R) 453; [2007] 1 SLR 453 (folld)

Golden Petroleum, The [1993] 3 SLR (R) 209; [1994] 1 SLR 92 (refd)

‘Iran Amanat’, The Owners of the Motor Vessel v KMP Coastal Oil Pte Ltd (1999) 196 CLR 130 (folld)

Irini A (No2) , The [1999] 1 Lloyd's Rep 189 (folld)

JFaster, The [2000] 1 HKC 652 (refd)

Jarguh Sawit, The [1997] 3 SLR (R) 829; [1998] 1 SLR 648 (refd)

MV, The [1996] 4 MLJ 109 (refd)

Oh Thevesa v Sia Hok Chai [1992] 1 MLJ 215 (refd)

Opal 3, The; ex Kuchino [1992] 2 SLR (R) 231; [1992] 2 SLR 585 (refd)

Osprey, The [1999] 3 SLR (R) 1099; [2000] 1 SLR 281 (refd)

Rainbow Spring, The [2003] 3 SLR (R) 362; [2003] 3 SLR 362 (refd)

Recordtv Pte Ltd v MediaCorp TV Singapore Pte Ltd [2009] 4 SLR (R) 43; [2009] 4 SLR 43 (refd)

Schwarz & Co (Grain) Ltd v St Elefterio ex Arion (Owners) (The St Elefterio) [1957] P 179 (folld)

Skandinaviska Enskilda Banken AB (Publ) , Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd [2009] 4 SLR (R) 788; [2009] 4 SLR 788 (folld)

Skandinaviska Enskilda Banken AB (Publ) , Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd [2011] 3 SLR 540 (folld)

Sunly Petroleum Co Ltd v The Owners of the Ship or Vessel Lok Maheshwari [1996] SGHC 212 (folld)

Three Rivers District Council v Governor and Company of the Bank of England [2003] 2 AC 1; [2001] UKHL 16 (folld)

Thorlina, The [1985-1986] SLR (R) 258; [1984-1985] SLR 283 (refd)

Tolla, The [1921] P 22 (refd)

Vasiliy Golovnin, The [2006] SGHC 247 (refd)

Vasiliy Golovnin, The [2007] 4 SLR (R) 277; [2007] 4 SLR 277,HC (folld)

Vasiliy Golovnin, The [2008] 4 SLR (R) 994; [2008] 4 SLR 994,CA (refd)

Vostok Shipping Co Ltd v Confederation Ltd [2000] 1 NZLR 37 (folld)

Yuta Bondarovskaya, The [1998] 2 Lloyd's Rep 357 (refd)

High Court (Admiralty Jurisdiction) Act (Cap123, 2001Rev Ed) ss3 (1) , 4 (4) (consd) ;ss3,3 (1) (c) ,3 (1) (g) ,3 (1) (h) ,3 (1) (l) ,3 (1) (d) - (q) , 4,4 (4) (b) ,4 (4) (b) (i)

Rules of Court (Cap322, R5, 2006Rev Ed) O12r7, O18r19 (1) (b) (consd) ;O18r19, O18r19 (1)

Admiralty Act1973 (NZ) s5 (2) (b) (i)

Civil Procedure Rules 1998 (SI 1998 No 3132) (UK) r24.2 (a) (i)

Admiralty and Shipping—Admiralty jurisdiction and arrest—Action in rem—Standard of proof—Bunker supplier commencing action in remagainst shipowner's vessel under s4 (4) (b) (ii) High Court (Admiralty Jurisdiction) Act (Cap123, 2001Rev Ed) in respect of unpaid bunkers—Whether any jurisdiction to bring action in rem in High Court—Whether s4 (4) satisfied—Whether shipowner ‘person who would be liable on the claim in an action in personam’ within meaning of s4 (4) (b)—Whether necessary to show ‘good arguable case’ that shipowner ‘would be liable on the claim in an action in personam’ within meaning of s4 (4) (b) in order to invoke admiralty jurisdiction—Whether any jurisdictional merits test independent of High Court (Admiralty Jurisdiction) Act—Section4 (4) High Court (Admiralty Jurisdiction) Act (Cap123, 2001Rev Ed)—Admiralty and Shipping—Practice and procedure of action in rem—Shipowner applying to strike out bunker supplier's action in rem under O18 r19 Rules of Court (Cap322, R5, 2006Rev Ed) or court's inherent jurisdiction—Shipowner applying to set aside bunker supplier's writ in rem under O12 r7—Whether proper for applications under O18 r19 and O12 r7 to be based on same arguments—Order 12 r7 and O18 r19 Rules of Court (Cap322, R5, 2006Rev Ed)—Civil Procedure—Striking out—Shipowner applying to strike out bunker supplier's action on basis that its contractual claim based on agency by estoppel was plainly or obviously unsustainable—Whether bunker supplier's contractual claim based on agency by estoppel was plainly or obviously unsustainable—Order18 r19 Rules of Court (Cap322, R5, 2006Rev Ed)—Conflict of Laws—Foreign proceedings—Issue estoppel—Shipowner applying to strike out bunker supplier's action on basis that foreign proceedings instituted by bunker supplier operated as issue estoppel—Whether foreign proceedings resulted in judgment which was final and conclusive on merits—Whether foreign proceedings operated as issue estoppel—Words and Phrases—Shipowner applying to strike out bunker supplier's writ in rem under O18 r19 Rules of Court (Cap322, R5, 2006Rev Ed) or court's inherent jurisdiction—Meaning of ‘plainly or obviously unsustainable’—Order 18 r19 (1) (b) Rules of Court (Cap322, R5, 2006Rev Ed)

The appellant was a company in the business of supplying bunkers, while the respondent was a shipping company and owner of a number of vessels, including the Bunga Kasturi Lima and the Bunga Melati 5.

The appellant alleged that it had entered into a contractual relationship with the respondent, under which the appellant would supply bunkers to a number of the respondent's vessels. The appellant claimed that the relevant contracts were brokered through the agency of Market Asia Link Sdn Bhd (‘MAL’), the alleged buying agent of the respondent. According to the appellant, an employee from the respondent's bunker unit had represented to one Mr Middleton (director of the appellant's bunker broker, Compass Marine) that MAL was the respondent's bunker broker, a representation which Compass Marine relied on to conclude contracts with MAL on the belief that MAL acted exclusively for the respondent.

When the appellant did not receive full payment in respect of the bunkers supplied, it commenced attachment proceedings in the United States (‘the US proceedings’) against the Bunga Kasturi Lima, but the attachment order was vacated by courts in the United States, and the appellant subsequently withdrew its action in the US proceedings. The appellant then commenced the present action in rem against the Bunga Melati 5 under s4 (4) (b) (ii) of the High Court (Admiralty Jurisdiction) Act (Cap123, 2001Rev Ed) (‘the HCAJA’) in respect of the unpaid bunkers, on the basis that the respondent was liable to it in contract and in unjust enrichment.

The respondent applied to strike out the appellant's action in rem pursuant to O18 r19 of the Rules of Court (Cap322, R5, 2006Rev Ed) (‘the ROC’) or the court's inherent jurisdiction, on the basis that it had not been in a contractual relationship with the appellant. The respondent alleged that it only had a contractual relationship with MAL, and MAL had in turn contracted (as principal, not agent of the respondent) with the appellant. As such, the respondent was not liable to the appellant in contract or in unjust enrichment, and the appellant's claim was therefore plainly unsustainable and had to be struck out. The respondent also argued that the US proceedings operated as an issue estoppel, and the appellant's action in rem ought therefore to be struck out on that ground as well. The respondent additionally applied to set aside the appellant's writ in rem under O12 r7 of the ROC, on the basis that, since it was not liable to the appellant in contract or in unjust enrichment, it was not ‘the person who would be liable on the claim in an action in personam’ (‘the relevant person’) under s4 (4) (b) of the HCAJA, and the appellant had therefore wrongly invoked the admiralty jurisdiction in rem of the High Court.

The High Court judge (‘the Judge’) affirmed the assistant registrar's (‘the AR’) decision to strike out the appellant's action under O18 r19 of the ROC or the inherent jurisdiction of the court. The Judge held that the appellant's contractual claim - which was based on the doctrine of agency by estoppel - was fraught with insurmountable evidential difficulties; and the legal requirements to establish agency by estoppel were also not satisfied. The appellant's claim in unjust enrichment was also held to be completely unsustainable. Having concluded that the appellant's action should be struck out, the Judge also agreed with the AR that the US proceedings were not final and conclusive on the merits and therefore did not give rise to an issue estoppel in the respondent's favour.

The Judge then disagreed with the AR's view that the appellant had to show a good arguable case on the merits of its claim in order to invoke admiralty jurisdiction. The Judge held that any challenge by the respondent to the identity of the ‘relevant person’ was not a jurisdictional matter to be dealt with under O12 r7 of the ROC, but was properly a dispute pertaining to the respondent's liability on the merits of the claim, and only in a striking out application under O18 r19 of the ROC would it be appropriate to investigate whether the appellant had an ‘arguable case’ on the merits.

Held, allowing the appeal:

(1) The test of whether a party's claim should be struck out under O18 r19 (1) (b) of the ROC or the inherent jurisdiction of court depended on whether the party's action was ‘plainly or obviously unsustainable’: at [32] and [33].

(2) A ‘plainly or obviously unsustainable’ action should be analytically understood as an action which was...