Wishing Star Ltd v Jurong Town Corp

JudgeChoo Han Teck J
Judgment Date08 October 2003
Neutral Citation[2003] SGHC 276
Date08 October 2003
Subject MatterExercise of court's discretion to order security for costs,O 23 r 1(1)(a) Rules of Court (Cap 322, R 5, 1997 Rev Ed),Costs,Civil Procedure,Whether plaintiff company "ordinarily resident out of jurisdiction",Security
Docket NumberSuit No 31 of 2003 (Registrar's Appeal No 315 of 2003)
Published date28 November 2003
Defendant CounselHo Chien Mien (Allen & Gledhill)
CourtHigh Court (Singapore)
Plaintiff CounselEdmund Kronenburg (Drew & Napier LLC)

1 This was an appeal by the defendants against the order of the assistant registrar dismissing the defendants’ application for security for costs to be provided by the plaintiffs. The plaintiffs are a company registered in Hong Kong with a registered branch in Singapore. The defendants applied under O 23 r 1(1)(a) of the Rules of Court for security for costs in the sum of $400,000 to be furnished because they say that the plaintiffs are ‘ordinarily resident out of jurisdiction’. Mr Kronenburg, counsel for the plaintiffs submitted before me that an order for the provision of security for costs should not be made because the plaintiffs are not ordinarily resident out of jurisdiction, and in any event, the court ought not exercise its discretion to order security in this case.

2 In regard to the first issue, Mr Kronenburg’s argument was simply that a company that has a registered branch in Singapore cannot be described as one that is ordinarily resident outside its jurisdiction. Mr Kronenburg submitted that once a branch is registered in the jurisdiction, one need not look further to enquire where the seat of governance is. The branch, in other words, establishes the residency of the company. He further argued that not only did the plaintiffs register a branch in Singapore, it was carrying on business in Singapore, unlike the plaintiffs in Re Little Olympian Each Ways [1994] 4 All ER 561. Mr Ho, counsel for the defendants, argued that whether a company is ‘ordinarily resident’ is determined by where the ‘central management and control’ of the company is located.

3 A branch is but a part of the company. When reference is made to the term ‘ordinarily resident’ it applies to the company and not to its branches. The question arises as to whether a company can be ordinarily resident in a jurisdiction where its branches is located. Generally speaking, it would do violence to the language to hold that anyone, whether a body corporate or an individual person, may be said to be ordinarily resident in more than one place at a time. A person or a company may always set up more than one residence in as many jurisdiction as they can afford - but a house is not a home. Support for this view can be gleaned from the judgment of the court in Jones v Scottish Accident Co (1886) 17 QBD 421, 423: 'An individual carrying on business in Scotland with branches in England is resident at the place where he carries on his business; why should we adopt a different rule for a company'. Security for costs may be sought against a corporation under the Companies Act only if that corporation is not 'ordinarily resident' in Singapore. Having a registered branch does not necessarily satisfy that criteria. It is no more than having another address, another house. We want to be satisfied that the corporation has deeper roots than that so that it may be excused from providing security for costs in the event that it fails in the action. Hence, having registered an office or even carrying on some of its business through that address may not be sufficient in this regard. There are also authorities from the Canadian courts that support the proposition that a mere presence of a branch within the jurisdiction (when the parent is outside jurisdiction) still entitles the defendants to security for costs. See, for example, Canadian Railway Accident Co. v Kelly (1907) Vol XVI, Manitoba R. 608.

4 Therefore, in itself, the mere fact that a company has a branch within the jurisdiction does not confer any special reason to deny a defendants from getting security for costs. It is possible that a company who has a registered office elsewhere prefers to operate principally from its branch. In such a case, it is possible that the company may be said to be ordinarily resident in the jurisdiction where that branch is located. Thus, courts have preferred to apply 'the central management and command of the company' test. The central management and control test is also applied in revenue cases and although it is, in my view, desirable that the same test be applied uniformly in respect of the residency of a company (see De Beers Consolidated Mines Ltd v Howe [1906] AC 455), liability for tax purposes and liability for...

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