U Myo Nyunt @ Michael Nyunt v First Property Holdings Pte Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 02 August 2021
• Neutral Citation: [2021] SGCA 73
• Docket Number: Civil Appeal No 176 of 2020
• Subject Matter: Civil Procedure,Setting aside,Judgments and orders,Delay
• Published date: 05 August 2021
• Hearing Date: 17 May 2021
• Defendant Counsel: Chan Tai-hui Jason SC, Oh Jialing Evangeline, Tan Xue Yang and Gan Yun Han Rebecca (Allen & Gledhill LLP)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Abraham S Vergis SC, Zhuo Jiaxiang and Lau Hui Ming Kenny (Providence Law Asia LLC)

Belinda Ang Saw Ean JAD (delivering the grounds of decision of the court): Introduction

The respondent, First Property Holdings Pte Ltd, entered judgment in default of appearance on 14 January 2016 against the appellant, U Myo Nyunt (“the January default judgment”), and thereafter obtained a further judgment on assessment of damages in the absence of the appellant on 7 November 2016 (“the Assessment Judgment”). The January default judgment was for (a) a specified amount of a loan from the respondent to the appellant; and (b) damages to be assessed. For convenience, the part of the January default judgment providing for damages to be assessed is hereinafter referred to as the “O13 Interlocutory Judgment” (the “O13” being a reference to O 13 r 2 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”)).

The High Court judge (“Judge”) in First Property Holdings Pte Ltd v U Myo Nyunt @ Michael Nyunt [2020] SGHC 276 (the “HC/GD”) dismissed the appellant’s application to set aside the O13 Interlocutory Judgment and the Assessment Judgment. The Judge also refused to set aside the order granting leave to serve out of jurisdiction (“the Service Order”) a sealed copy of the writ of summons in Suit No 601 of 2015 (“the Singapore proceedings”). The Judge, however, set aside the part of the January default judgment for the loan amount. The respondent did not cross-appeal.

The appellant’s appeal was against the Judge’s refusal to set aside the Service Order, the O13 Interlocutory Judgment and the Assessment Judgment. The appellant filed his setting aside application on 26 August 2019, which was: (a) more than three and a half years after the O13 Interlocutory Judgment; (b) more than three years after the damages had been assessed and a final judgment entered in the respondent’s favour; and (c) more than five months after the appellant unsuccessfully resisted the registration of the January default judgment and the Assessment Judgment in Australia.

We heard the appeal on 17 May 2021 and dismissed the appeal. We ordered the appellant to pay the respondent costs of the appeal fixed at the sum of $40,000 inclusive of disbursements. There were to be the usual consequential orders.

We now set out the full grounds of our decision.

Facts and background

The full facts are set out in the HC/GD. We summarise the background to indicate the nature of dispute and the events leading to this appeal. The appellant is a national of Myanmar and a citizen and resident of Australia. The respondent is a Singapore company.

In September 1996, the appellant, his brother and the respondent entered into a joint venture agreement (“JVA”) for the development of property projects in Myanmar through a Myanmar company (“Company”) that was to be incorporated. The Company was incorporated in October 1996 and not in June 1996 as misstated in the JVA. The Company was placed in liquidation in August 2005 (HC/GD at [6], [9] and [14]).

At all material times, the shares in the Company were held beneficially by the appellant on account of a prohibition on foreign ownership of real property in Myanmar. The respondent’s interest was, in turn, to be protected by a debenture contemplated by cl 3.2 of the JVA. Accordingly, pursuant to a debenture (“Debenture”) made between the respondent and the Company, the former agreed to make a loan of US$7.6m to the Company. The JVA and Debenture provided for the following, among other things (HC/GD at [8]): The respondent’s loan of US$7.6m would be converted into a 95% shareholding in the Company at the earliest possible time that the respondent would be legally entitled under Myanmar law to become a shareholder of the Company. Until the US$7.6m loan and all other amounts payable under the Debenture had been paid in full, the Company: would (unless otherwise agreed to by the respondent) maintain its existence as a limited liability company, and deposit original title deeds to all its assets and properties with the respondent and any other documents and security which the respondent may require; would not (without the respondent’s prior written consent) merge or consolidate with any other company or dispose of or sell any of its assets; and would not voluntarily dissolve itself or liquidate its assets without the respondent’s prior written consent.

In March 1998, the respondent and the appellant entered into a loan agreement (“Loan Agreement”) by which the respondent agreed to extend a loan of up to US$850,000 to the Company, subject to the approval of the Central Bank of Myanmar (HC/GD at [10]). According to the respondent, the actual loan amount extended to the appellant was about US$585,000 (“the US$585,000 Payment”).

The JVA,¹ Debenture² and Loan Agreement³ were all governed by the laws of Singapore and provided for the non-exclusive jurisdiction of the Singapore courts (HC/GD at [11]).

The respondent claimed that it invested the sum of US$7.6m pursuant to the Debenture (“the US$7.6m Payment”), and the US$585,000 Payment pursuant to the Loan Agreement (collectively, “the Investment Money”). The appellant refuted the claim and argued that no such funds ever came from the respondent. In addition, the Central Bank of Myanmar had rejected the Company’s application for approval to receive and pay back (up to the maximum) loan amount of US$850,000 (HC/GD at [12]).

The dispute between the parties arose out of two property projects in Yangon, Myanmar. One of the projects was in Natmauk Lane (“Natmauk Property”) and the other was in Tamwe Township (“Tarmway Plaza”) (HC/GD at [13]).

Natmauk Property

Natmauk Property was purchased by the Company from a third-party vendor in December 1996. The respondent claimed that the Company spent some US$3m on the acquisition and development of Natmauk Property, and that such funds came from the Investment Money (HC/GD at [15]). In November 2000, the appellant caused the Company to transfer the Natmauk Property to himself and his wife. The respondent claimed that the transfer was made dishonestly and fraudulently, without its consent. In reply, the appellant claimed that the Natmauk Property had been purchased by another of his companies from a third party back in April 1996 and subsequently transferred to the Company, representing his contributions to the paid-up capital of the Company. On the transfer of the Natmauk Property to himself and his wife, the appellant’s stance was that the respondent did not provide the Company with any funds, and that he financed the purchase of the Natmauk Property himself (HC/GD at [16]).

The respondent sued the appellant in Myanmar in respect of the Natmauk Property in one civil action and in one private criminal prosecution. Both proceedings failed: The civil proceeding, Major Civil Case No 330 of 2003 (“Civil Case 330”), was commenced in May 2003 in the Yangon Division Court.⁴ Civil Case 330 was a claim against the appellant, his wife and the Company (amongst others) for the transfer of the Natmauk Property to the appellant and wife to be annulled, and/or for the Natmauk Property to be returned to the Company. The basis of this claim was that the Natmauk Property was purchased using funds provided by the respondent,⁵ and that the purported transfer of the Natmauk Property was in breach of fiduciary duty and/or breach of trust.⁶ Civil Case 330 was dismissed in January 2015 by the Yangon Western District Court.⁷ The ground for the dismissal was that the respondent’s counsel was present at the hearing but did not have the requisite power of attorney.⁸ By reason of steps taken by the respondent, Civil Case 330 was put up for review before the High Court of Yangon. The review appears to be still pending ⁹ The criminal proceeding, Regular Criminal Case No 102/2003 (“Criminal Case 102”), was a private criminal prosecution commenced in February 2003 against the appellant (and another) for alleged violations of the Myanmar Companies Act and Myanmar Penal Code. The respondent complained, amongst other accusations, that the appellant had made a false statement claiming that the Natmauk Property was purchased by his family with their own money (GD at [17]). The Yangon Northern District Court acquitted the appellant in April 2008. The main ground for the court’s finding was the lack of evidence that the respondent had permission from the Central Bank of Myanmar to remit funds to the Company.¹⁰ An appeal against the acquittal was dismissed in January 2009 by the Supreme Court of Myanmar, for largely the same reasons.¹¹

Tarmway Plaza

Tarmway Plaza was constructed and owned by an intermediary, which was in turn owned by the Company and another Myanmar company. The Company owned 80% of the intermediary. The respondent claimed that the Company acquired 80% of the intermediary by funding the construction of Tarmway Plaza with the Investment Money.The appellant disagreed and claimed that the Company did not use the Investment Money in acquiring the intermediary (HC/GD at [23] – [24]).

The respondent was given possession and management of the Tarmway Plaza until February 2004, when the appellant caused the intermediary to remove the respondent from the management of the Tarmway Plaza. The respondent claimed that the removal was without cause and wrongful (HC/GD at [[25]).

In August 2004, the respondent commenced Major Civil Case No 2275 of 2004 (“Civil Case 2275”) against the appellant and his wife (amongst others), seeking orders to recover possession and management of Tarmway Plaza. The respondent argued that it had contributed US$5.1m towards the construction of Tarmway Plaza.¹² The judgment for Civil Case 2275 was rendered in October 2017 in favour of the appellant. The appellant produced an English translation of the judgment stating that the court “dealt with [the issue of the US$5.1m payment] by dismissing it on 19.1.2005”.¹³ The respondent, in turn, produced its own English translation...