Toyota Tsusho (Malaysia) Sdn Bhd v Foo Tseh Wan and others

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu SJ
• Judgment Date: 10 February 2017
• Neutral Citation: [2017] SGHC 24
• Plaintiff Counsel: Han Guangyuan, Keith and Goh Rui Xian Elsa (Cavenagh Law LLP)
• Docket Number: Suit No 753 of 2015 (Summons No 4665 of 2016)
• Date: 10 February 2017
• Hearing Date: 21 November 2016
• Subject Matter: Contempt of Court,Civil Contempt
• Year: 2017
• Defendant Counsel: Kirpal Singh s/o Hakam Singh and Oh Hsiu Leem Osborne (Hu Shoulin) (Kirpal & Associates)
• Court: High Court (Singapore)
• Citation: [2017] SGHC 24
• Published date: 28 October 2017

Lai Siu Chiu SJ: Introduction

This action concerned a conspiracy which Toyota Tsusho (Malaysia) Sdn Bhd (“the plaintiff”) alleged was committed by its former employee and senior manager Foo Tseh Wan also known as Henry Foo (“the first defendant”) with the help and connivance of Wah Sin Industrial Pte Ltd (“Wah Sin”), Vintech Engrg Pte Ltd (“Vintech”) and TKA Amusement (S) Pte Ltd (“TKA”) who are the second, third and fourth defendants respectively. The second, third and fourth defendants will henceforth be referred to collectively as “the defendants”. All four defendants will be referred to collectively as “the four defendants”.

The plaintiff is a Malaysian company and is a subsidiary of Toyota Tsusho Corporation, a company listed on the Tokyo and Nagoya Stock Exchanges. It is an international trading house and carries out the business of inter alia import, export and domestic businesses involving products such as automotives, plastics, chemicals, machinery, and metals. The plaintiff's Malaysian head office is in Kuala Lumpur and it has several offices around Malaysia, including an office in Johor Bahru, state of Johor (“the JB office”).

The first defendant was the most senior employee in the JB office until his abrupt resignation on 23 June 2015. He had assisted the plaintiff in the setting up of the JB office’s operations in 2008. While in the plaintiff’s employment, the first defendant was in sole charge of the buying and selling of plastics and the day-to-day operations of the JB office.

The second to fourth defendants are Singapore private companies which purportedly supplied and delivered superior engineering plastics to the plaintiff.

In the writ of summons filed on 24 July 2015, the plaintiff claimed the following reliefs against all four defendants: Damages for fraud and/or conspiracy and/or deceit and/or misrepresentation and/or breach of contract; and/or Monies had and received; and/or An account of profits and the payment of such sums found to be due to the plaintiff on the taking of such an account; and/or A declaration that the defendants are constructive trustees of the plaintiff or alternatively that the defendants be liable to account to the plaintiff as if they were constructive trustees; and/or Exemplary and/or punitive damages; arising out or in relating to the defendants' involvement in a scheme to defraud the plaintiff and/or to the benefit the defendants at the expense of and/or cause wrongful loss to the plaintiff.

In its statement of claim filed on 19 August 2015, the plaintiff alleged that the defendants had acted in concert with the first defendant to defraud the plaintiff through a series of fictitious transactions involving the purported sale and purchase of superior engineering plastics. The scale of the fraud perpetrated against the plaintiff is reflected in the fact that the plaintiff’s claim against the defendants jointly and severally is for RM82,261,271.50. As against Vintech only, the claim is for RM27,597,585.51.

As these grounds of decision only involve Vintech, the court will not elaborate on the roles of the first, second and fourth defendants in the conspiracy. Vintech’s founder and one of its directors is Gan Teck Beng also known as Vincent Gan (“Gan”).

I should point out that by an order of court dated 23 September 2015 made in Summons No 4034 of 2015, the plaintiff consented to a stay of proceedings in this suit against Vintech on condition that Vintech did not challenge parallel proceedings taken out against the company in the Malaysian High Court in Kuala Lumpur by the plaintiff (“the Malaysian proceedings”). Similar stay orders were granted to the other three defendants as they too were defendants in the Malaysian proceedings.

In the course of these proceedings, the plaintiff secured innumerable orders against some or all the defendants the chief of which were: (i) a worldwide Mareva Injunction in Summons No 3622 of 2015 (“the Mareva Injunction”) against the four defendants and (ii) an Anton Piller order against the defendants (“the Anton Piller Order”) in Summons No 3624 of 2015. Both orders were obtained on 27 July 2015.

Besides a freezing of their bank accounts and other assets, the terms of the Mareva Injunction required the four defendants to inform the plaintiff in writing of all their assets whether in or outside Singapore and whether in their own name or not and whether solely or jointly owned, giving the value, location and details of all such assets (“the Disclosure Order”). The requisite information was to be confirmed in an affidavit which had to be served on the plaintiff’s solicitors within 14 days after the order of court for the Mareva Injunction had been served on the four defendants.

The Mareva Injunction relating to Vintech was for the sum of RM28,180,781.00. A separate Mareva Injunction and Disclosure Order was obtained against Gan personally by the plaintiff on 19 August 2015 in Suit No 834 of 2015 (“Suit 834”) in which one Lee Haw Ling (“Lee”) and Gan are the first and second defendants respectively. Lee is the managing director of Wah Sin and a director of TKA. In compliance with the Disclosure Order made in Suit 834, Gan filed an affidavit of his personal assets and means on 7 September 2015 (“Gan’s affidavit of means”).

In compliance with the Disclosure Order, Gan filed an affidavit of assets and means on behalf of Vintech on 14 August 2015 (“Vintech’s affidavit of means”). The plaintiff was dissatisfied with Vintech’s affidavit of means, asserting that Gan had failed to account for cash withdrawals totalling US$10,136,400 (“the US$ sum”) from Vintech’s United Overseas Bank Limited account no. XXX-XXX-XXX-X (“Vintech’s Account”) over the course of 2014 and 2015.

As for Gan’s affidavit of means filed on 7 September 2015, he had there disclosed his personal assets as (i) a bank account with a balance of S$6,302.06; (ii) a joint bank account with his wife with a balance of S$10,860.45; (iii) a public housing flat (“HDB flat”) jointly owned with his wife; (iv) shares in a private company; (v) shares in Vintech; (vi) sole proprietorship of Vintech Engineering; (vii) a joint bank account with his mother with a balance of S$8,839.13; (viii) a motor vehicle bought with hire-purchase financing worth about S$49,804 as of 24 August 2015; (ix) a private apartment in Johor Bahru; (v) a Changi Golf Club membership and (xi) a bank account in Malaysia to service the mortgage instalments on the private apartment in Johor Bahru. Gan’s cash assets (jointly and individually owned) according to his affidavit of means did not exceed S$27,000.00 leaving aside the HDB flat and his motor vehicle which is a depreciating/wasting asset.

The plaintiff subsequently applied to court in Summons No 972 of 2016 to cross-examine Gan on Vintech’s affidavit of means and in Summons No 1000 of 2016 to cross-examine him on Gan’s affidavit of means (“the cross-examination applications”). The cross-examination applications were granted and cross-examination of Gan took place on 31 May 2016 (“the first examination hearing”) and on 21 June 2016 (“the second examination hearing” and collectively “the examination hearings”).

In the light of the evidence adduced from Gan in the examination hearings as well as from Gan’s and Vintech’s affidavits of means, the plaintiff took the view that Gan had failed to comply with the Disclosure Order in this action and in Suit 834.

The plaintiff applied to court under s 175(1) of the Evidence Act (Cap 97, 1997 Rev Ed) in Originating Summons No 872 of 2015 (“the Discovery Application”) against United Overseas Bank (“the Bank”) for copies of:- All cheques drawn on Vintech’s Account from 1 January 2014 to date; All bank statements in respect of Vintech’s Account from 1 January 2014 to date; and All debit vouchers, transfer applications and orders in respect of Vintech’s Account from 1 January 2014 to date.

On 19 November 2015, the plaintiff was granted an order in terms of the Discovery Application. The Bank duly furnished the requested documents to the plaintiff on 3 February 2016. Having looked at the Bank’s documents, the plaintiff formed the view that Gan’s and Vintech’s affidavit of means had failed to comply with the Disclosure Order in [10].

Consequently, the plaintiff applied for and was granted leave to apply for Gan’s committal for contempt of court. The plaintiff then filed Summons No 4665 of 2016 for a committal order against Gan for contempt of court (“the Committal Application”) supported by the 6th affidavit of Toshihiro Sadowara (“Sadowara’s 6th affidavit”).

The Committal Application came up for hearing before this court. After hearing arguments from counsel, the court granted the Committal Application and sentenced Gan to three months’ imprisonment for contempt of court but suspended the sentence for ten days to afford Gan an opportunity to comply with the Mareva Injunction (“the Committal Order”). Failing his compliance with the terms of the Mareva Injunction by 1 December 2016, Gan would be imprisoned to purge his contempt.

Gan filed his 9th affidavit on 1 December 2016 in purported compliance of the Committal Order. I use the words “purported compliance” because Gan’s 9th affidavit was essentially a rehash of Vintech’s affidavit of means filed on 14 August 2015 which Gan asserted complied with the Disclosure Order; he repeated his arguments therein in his 9th affidavit.

Gan is dissatisfied with the Committal Order made on 21 November 2016 and has filed a notice of appeal (in Civil Appeal No 159 of 2016) against the court’s decision. Consequently, I now set out the reasons for making the order.

The arguments The plaintiff’s arguments

It was the plaintiff’s case that Gan had failed in Vintech’s affidavit of means to make full and proper disclosure of all assets beneficially owned by Vintech. As stated earlier at [12], the US$ sum...