Wu Shun Foods Company Ltd v Ken Ken Food Manufacturing Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 12 August 2002
• Docket Number: District Court Suit No 4047 of (Registrar's Appeal No 17 of 2002)
• Date: 12 August 2002
• Court: High Court (Singapore)

Wu Shun Foods Co Ltd

Plaintiff

and

Ken Ken Food Manufacturing Pte Ltd

Defendant

[2002] SGHC 176

Woo Bih Li JC

District Court Suit No 4047 of 2001 (Registrar's Appeal No 17 of 2002)

High Court

Conflict of Laws–Foreign judgments–Defences–Judgment obtained in foreign jurisdiction in contract claim–Application to enforce judgment in Singapore–Contract allegedly illegal under foreign law–Effect of illegality under foreign law not known–Illegality not raised as defence before foreign court–Whether illegality could be raised before Singapore court in application to strike out action to enforce foreign judgment

The plaintiff (“WSF”), a Republic of China (“the ROC”) company, bought some dried squid from the defendant (“KKF”), a Singapore company. When KKF failed to deliver the squids, WSF sought to recover moneys paid and successfully sued KKF in the ROC.

As WSF could not register the ROC judgment under the Singapore Reciprocal Enforcement of Foreign Judgments Act (Cap 265), it commenced an action in Singapore to enforce it. KKF then unsuccessfully applied to strike out WSF's action on the basis of illegality, viz that the sale and purchase contract was illegal because the importing of squid into the ROC was prohibited under ROC law. KKF had not raised this issue during the ROC proceedings. KKF appealed.

Held, dismissing the appeal:

KKF's application could not succeed. First, it was the effect of the breach of the breach of the import regulation that was the significant issue, and which could not be resolved through affidavit evidence alone. Second, KKF could not raise the illegality issue, even though it was not raised in the ROC proceedings. This was because the Singapore court was not an appellate tribunal vis-à-vis the ROC court's judgment, and KKF should have raised the illegality issue there and not expect that its omission to do so could be made good in the Singapore courts. Finally, KKF should have applied to set aside the ROC judgment there given that the alleged illegality arose from an import regulation of ROC, and not use the back door approach in trying to prevent WSF's enforcement of the ROC judgment in Singapore: at [32] to [35] and [42] to [49].

Batra v Ebrahim [1982] 2 Lloyd's Rep 11 (distd)

Hong Pian Tee v Les Placements Germain Gauthier Inc [2002] 1 SLR (R) 515; [2002] 2 SLR 81 (folld)

Keng Soon Finance Bhd v M K Retnam Holdings Sdn Bhd [1989] 1 MLJ 457 (distd)

Soleimany v Soleimany [1999] QB 785; [1999] 3 All ER 847 (distd)

Hee Theng Fong and Tay Wee Chong (Hee Theng Fong & Co) for the plaintiff

Margaret Wan and Andrew Ho (Braddell Bros) for the defendant.

Woo Bih Li JC

Introduction

1 The plaintiff Wu Shun Foods Co Ltd (“Wu Shun”) is a company incorporated under the laws of Taiwan. The defendant Ken Ken Food Manufacturing Pte Ltd (“Ken Ken”) is a company incorporated in Singapore.

2 In April 1995, Wu Shun commenced action against Ken Ken in the Taipei District Court seeking recovery of New Taiwan Dollars (“NT$”) 1,482,010 being the balance of an advance payment made by Wu Shun to Ken Ken for goods under a sale and purchase contract dated 12 September 1994 between the parties, which Ken Ken failed to deliver.

3 Wu Shun succeeded and obtained a judgment from the Taipei District Court ordering Ken Ken to pay the sum claimed, interest and costs. Ken Ken's appeals to the Taiwan High Court and the Supreme Court of Taiwan were unsuccessful. I will say more on the proceedings in Taiwan later.

4 Wu Shun said that as it could not register the Taiwan judgment it had obtained under the Singapore Reciprocal Enforcement of Foreign Judgments Act (Cap 265), it commenced an action in Singapore on 15 October 2001 to sue on the Taiwan judgment.

5 On 22 October 2001, Ken Ken entered an appearance to the Singapore action and applied for security for costs on the ground that Wu Shun was ordinarily resident out of Singapore and for a stay of further steps in the meantime.

6 On 5 December 2001, Wu Shun applied for summary judgment.

7 On 11 December 2001, both the applications for security for costs and for summary judgment were adjourned to 22 January 2002.

8 On 22 January 2002, the applications were adjourned to 29 January 2002 pending the decision of the Singapore Court of Appeal in CA 600101/2001 Hong Pian Tee v Les Placements Germain Gauthier Inc (“Hong's case”). The judgment of the Court of Appeal is reported in [2002] 1 SLR (R) 515.

9 On 28 January 2002, Ken Ken applied to strike out Wu Shun's claim in the Singapore action. Ken Ken relied on two grounds:

(a) the amount stated in the Taiwan judgment was wrong;

(b) Wu Shun's claim in Taiwan was based on an illegal contract because the contract in question related to the importing of squid which was prohibited under Taiwan law.

10 On 29 January 2002, the Deputy Registrar Ms Ong Chin Rhu directed that the striking out application be heard first. After hearing arguments, she dismissed the application for striking out. She then gave directions in respect of Wu Shun's application for summary judgment and Ken Ken's application for security for costs.

11 On 21 February 2002, Ken Ken filed a notice of appeal to the district judge on the sole ground of illegality.

12 On 25 March 2002, District Judge Ng Peng Hong dismissed Ken Ken's appeal after hearing arguments and gave directions with respect to the application for security for costs. The application for summary judgment had still not been heard by then.

13 On 8 April 2002, Ken Ken served its notice of appeal to the High Court against the district judge's decision. This appeal was heard by me. The only issue before me was the one based on illegality. After hearing arguments, I dismissed the appeal. Ken Ken is appealing to the Court of Appeal.

Arguments for Ken Ken

14 Ken Ken relied primarily on two affidavits. The first is the second affidavit from Ken HC Chiu, an attorney-at-law in Taipei, Taiwan.

15 Mr Chiu's affidavit was to the effect that at all material times, the import of squid (except prepared or preserved squid which is canned) into Taiwan was illegal under the Lists of Goods the Import of Which is Restricted published by the Board of Foreign Trade of the Ministry of Economic Affairs of Taiwan, unless a prior import permit was obtained from the relevant authority. I will refer to the lists as “the import regulation” for convenience. An importer who did so, without the permit, was liable to be fined and could be suspended from importing goods for a certain duration. Also the goods could be considered smuggled goods and confiscated.

16 The other affidavit which Ken Ken relied on primarily was the...