Tjong Very

• Jurisdiction: Singapore
• Judgment Date: 22 November 2010
• Date: 22 November 2010
• Docket Number: Suit No 89 of 2010
• Court: High Court (Singapore)

Tjong Very Sumito and others

Plaintiff

and

Chan Sing En and others

Defendant

[2010] SGHC 344

Andrew Ang J

Suit No 89 of 2010 (Registrar's Appeal No 234 of 2010 and Summons No 2961 of 2010)

High Court

Civil Procedure—Costs—Security—Plaintiff having connections with both Singapore and Indonesia—Meaning of “ordinarily resident” in O 23 r 1 Rules of Court (Cap 322, R 5, 2006 Rev Ed)—Whether individual plaintiff could be ordinarily resident both out of and within jurisdiction for purposes of security for costs—Whether security for costs should be ordered against individual plaintiff ordinarily resident both in Indonesia and Singapore—Order 23 r 1 Rules of Court (Cap 322, R 5, 2006 Rev Ed)

The plaintiffs commenced an action to recover monies allegedly due to them as sale proceeds of a shares sale and purchase agreement (“the 1st S&PA”) but paid out to the defendants. In support of their claim, the first plaintiff alleged non est factum, but the defendants asserted that the monies were paid to them to service debts that the plaintiffs owed to them.

The first defendant applied for security for costs against the plaintiffs who were all Indonesian individuals. The first plaintiff sought to resist the application by maintaining that O 23 r 1 of the Rules of Court (Cap 322, R5, 2006 Rev Ed) did not apply to him as he was ordinarily resident in Singapore. The assistant registrar dismissed the first defendant's application, against which decision the first defendant appealed. The fifth and sixth defendants also applied for security for costs against the plaintiffs.

Held, allowing the appeal and granting the application:

(1) The words “ordinarily resident” should be given their natural and ordinary meaning, not being a term of art with any technical or special meaning. It was the state of mind of the “propositus” (ie,the plaintiff, for the purposes of security for costs) that was paramount in determining ordinary residence. Not only should the place of residence be adopted voluntarily (as opposed to enforced presence in a particular jurisdiction) there should also be a degree of settled purpose: at [11].

(2) The court was not precluded from finding that, for the purposes of ordering security for costs under O 23, an individual plaintiff was ordinarily resident out of, as well as within, the jurisdiction. Provided that the court found that an individual plaintiff was ordinarily resident out of the jurisdiction, it was seised of jurisdiction to exercise its discretion to order security for costs against such a plaintiff, even though the plaintiff might also be ordinarily resident within the jurisdiction. This interpretation of O 23 would preserve the court's discretion to order security if it was just in all the circumstances to do so: at [19].

(3) The pre-condition for the exercise of the court's discretion to order security for costs against the plaintiffs under O 23 r 1 (1) (a)had been satisfied. The objective evidence indicated that the plaintiffs were ordinarily resident in Indonesia as they appeared to have adopted Indonesia voluntarily as a place of residence with a substantial degree of settled purpose, viz,for residential and business purposes: at [21] and [24].

(4) The first plaintiff was also ordinarily resident in Singapore. He had spent a considerable amount of time in Singapore since 2007 as he had strong family ties and business interests here: at [25] to [27].

(5) The connection of the plaintiff with Singapore was relevant to the exercise of the court's discretion to order security for costs against him. If the plaintiff had an established home and was ordinarily resident in Singapore, an order for security might rarely be ordered against him. While the first plaintiff had close connections with Singapore, he did not own any substantial property in Singapore of a fixed and permanent nature, and doubts had been raised as to the value of the shares that he owned in the companies in Singapore. It did not appear that the plaintiffs owned any assets of substance in Singapore against which costs orders in the defendants' favour could be enforced: at [37] to [39].

(6) At first blush that one principal ground of the plaintiffs' claim was non est factum did not inspire confidence that the first plaintiff would succeed since he was a seasoned businessman. However, the defendants had not produced credible documentary evidence to support their defence that part of the sale proceeds of the 1st S&PA had been paid to them to service debts owed to them by the plaintiffs. In such a situation where the relative strengths of the parties' cases were so evenly balanced, the plaintiffs' lack of substantial assets in Singapore would ordinarily make it just to order security for costs against them, provided that such an order would not oppressively stifle their claim: at [42], [43] and [45].

(7) The plaintiffs had not given credible evidence to support their claim that an order for security for costs against them would unfairly stifle their claim. In the event that the other defendants similarly applied for security for costs against the plaintiffs, each of their applications should be considered separately and the likelihood of stifling of the plaintiffs' claims should be assessed separately in each application: at [46].

CIR v Lysaght [1928] AC 234 (refd)

Corbett v Nguyen [2008] NSWSC 1265 (folld)

Creative Elegance (M) Sdn Bhd v Puay Kim Seng [1999] 1 SLR (R) 112; [1999] 1 SLR 600 (refd)

DSQ Property Co Ltd v Lotus Cars Ltd [1987] 1 WLR 127 (distd)

Jurong Town Corp v Wishing Star Ltd [2004] 2 SLR (R) 427; [2004] 2 SLR 427 (refd)

Keary Developments Ltd v Tarmac Construction Ltd [1995] 3 All ER 534 (refd)

Levene v CIR [1928] AC 217 (refd)

Leyvand v Barasch The Times (23 March 2000) (folld)

Little Olympian Each Ways Ltd, Re [1995] 1 WLR 560 (distd)

Logue v Hansen Technologies Ltd [2003] FCA 81 (folld)

Ong Jane Rebecca v Pricewaterhousecoopers [2009] 2 SLR (R) 796; [2009] 2 SLR 796 (refd)

Ooi Ching Ling Shirley v Just Gems Inc [2002] 2 SLR (R) 738; [2002] 3 SLR 538 (refd)

Parkinson v Myer Wolff and Manley (a firm) (23 April 1985; CA (Eng) ) (refd)

Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420 (refd)

Raeburn v Andrews (1874) LR 9 QB 118 (distd)

R v Barnet London Borough Council, Ex parte Nilish Shah [1983] 2 AC 309 (folld)

Sir Lindsay Parkinson & Co Ltd v Triplan Ltd [1973] QB 609 (refd)

Sumio Sakata v Fuminori Paul Naruse [2004] SGHC 102 (refd)

Wilson Vehicle Distributions Ltd v The Colt Car Co Ltd [1984] BCLC 93 (refd)

Wishing Star Ltd v Jurong Town Corp [2004] 1 SLR (R) 1; [2004] 1 SLR 1 (refd)

Companies Act (Cap 50, 2006 Rev Ed) ss 173 (2) , 173 (6) , 388 (1)

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 23 r 1 (1) (consd) ;O 23, O 23 r 1, O 23 r 1 (1) (a) , O 23 r 1 (1) (b) , O 23 r 1 (1) (c) , O 23 r 1 (1) (d)

Judgments Extension Act 1868 (c 54) (UK)

Rules of the Supreme Court (UK) O 23 r 1 (1)

Shannon Ong (Gabriel Law Corporation) for the plaintiffs

Nicholas Narayanan (Nicholas & Tan LLP) for the first defendant

Margaret Ling Weiwei and Aaron Lee (Allen & Gledhill LLP) for the fifth and sixth defendants.

Judgment reserved.

Andrew Ang J

Introduction

1 These were applications for security for costs against the plaintiffs. Having failed before the assistant registrar (“the AR”), the first defendant filed Registrar's Appeal No 234 of 2010 (“RA 234/2010”) appealing against the AR's decision not to award security for costs. The fifth and sixth defendants also applied under Summons No 2961 of 2010 (“Sum 2961/2010”) for security for costs against the plaintiffs. Both RA 234/2010 and Sum 2961/2010 were fixed to be heard together before me.

2 After hearing submissions from all the relevant parties on 29 September 2010, I gave a brief oral judgment on 12 October 2010 awarding security for costs against the plaintiffs, thus allowing the appeal in RA 234/2010 and the application in Sum 2961/2010.

3 On 15 October 2010, counsel for the plaintiffs wrote in requesting for further arguments. This was followed by a letter dated 18 October 2010 from counsel for the fifth and sixth defendants and another letter in reply the following day from counsel for the plaintiffs, who also sought clarification of my orders made on 12 October 2010. I heard parties' further arguments on 26 October 2010. Despite the strenuous arguments of counsel for the plaintiffs, I was not persuaded to alter my earlier decision granting security for costs against the plaintiffs.

4 As these proceedings concerned the interesting issue of whether a plaintiff can be ordinarily resident both within and out of the jurisdiction for the purpose of ordering security for costs against him (and if so, whether such security should be ordered) and in order to provide the clarification sought by the plaintiffs, I now render in writing the grounds for my judgment.

Background facts

5 The plaintiffs commenced Suit No 89 of 2010 (“the Suit”) against the first to ninth defendants in February 2010. The tenth defendant Magnus Energy Group Ltd (“MEGL”) and the eleventh defendant Antig Investments Pte Ltd (“Antig”) were added by way of an amendment to the statement of claim on 26 August 2010. Antig is a wholly-owned subsidiary of MEGL. The Suit related to a shares sale and purchase agreement dated 23 November 2004 (“the 1st S&PA”) and two other share sale agreements dated 12 July 2007 (“the 2nd S&PA”).

6 Under the 1st S&PA between the plaintiffs and Antig, the plaintiffs agreed to sell in aggregate 72% of the shares in an Indonesian company PT Deefu Chemical Indonesia (“PT Deefu”) to Antig for US$18m (“the Sale Price”), which was to be paid by Antig in the form of cash and shares in MEGL. The 1st S&PA was subsequently varied by four supplemental agreements and a letter dated 31 May 2006 from Antig to the plaintiffs. The net effect of these variations to the payment terms of the 1st...