RBG Resources plc (in liquidation) v Banque Cantonale Vaudoise and Others

Woo Bih Li J:

[1] In my judgment of 7 June 2004, I declared that the plaintiff, RBG Resources plc (“RBG”), remained the legal and beneficial owner of metals in certain warehouses which had been held for the account of RBG prior to any dealing of the metals between RBG and the second defendant, Credit Lyonnais (“CL”), save for one drum of nickel identified as 519-W127 by SGS Testing & Control Services Singapore Pte Ltd. I also ordered that the sale proceeds of RBG’s metal be released to RBG or its solicitors.

[2] I further ordered CL to pay damages to RBG for conversion of nickel briquettes which CL had taken delivery of from one of the warehouses, such damages being the net purchase price or prices which CL had obtained for the briquettes as CL had sold the same.

[3] Consequently, CL’s counterclaim for the metals in the warehouses, which also formed the subject matter of RBG’s claim, was dismissed, save for the one drum of nickel identified as 519-W127. CL was consequently entitled to the sale proceeds of that one drum of nickel.

[6] RBG relied on the decision of the Court of Appeal in MCST No 473 v De Beers Jewellery Pte Ltd [2002] 2 SLR 1 where Yong Pung How CJ said at [57]:

[8] RBG also disclosed that it had made offers to settle. The first offer was served on 22 December 2003 but was subsequently withdrawn. The second offer was served on 23 December 2003. The third offer was served on 9 January 2004, a day after the commencement of trial.

[9] The second offer was on the following terms:

[10] The third offer was on the following terms:

[11] I should add that the value of the metals in the warehouses which were the subject of RBG’s and CL’s claims was between US$8m and US$9m and the value of the nickel briquettes under the claim for conversion was over US$2m.

[15] CL submitted that work done up to and including the filing of RBG’s re-amended statement of claim, excluding the claim for conversion, should not be awarded to RBG as its statement of claim, prior to amendment, disclosed no reasonable cause of action and/or was an abuse of court process.

[28] As regards the existing offers to settle, the Court of Appeal said in Neo Hock Pheng (supra [18])at [24]:

However, it must be borne in mind that in that case, the offer to settle was made five days before the date of commencement of trial and nine days before the claim was disposed of. Accordingly, the offeree did not have 14 days to consider the offer before the claim was disposed of. The Court of Appeal did not lay down a general rule that an offer to settle made before or even after the commencement of trial would be considered as one which is not genuine. Indeed, CL did not suggest that Neo Hock Pheng amounted to such a general rule. It would depend on the circumstances.

[29] As for the point that an offer to settle may put pressure on an offeree, I was of the view that the purpose of such an offer was indeed to put pressure on an offeree. The real question was whether the purpose of an offer was to put such pressure on an offeree as not to amount to a serious and genuine offer to settle.

[30] In the case before me, I was of the view that the pressure was not illegitimate. I also did not accept that CL had inadequate time to consider the third offer. The terms thereof were simple enough. Although the second offer was technically incomplete, its effect was clear. If CL were to discontinue its counterclaim for the same metals as RBG was claiming, it would follow that CL’s defence to RBG’s claim would be withdrawn too and RBG would then be entitled to judgment on its claim. By the time the third offer to settle was served, which specifically stated that CL was also to withdraw its defence to the metals in the warehouses, CL could not have been completely surprised by its terms although there was also an additional $100,000 included in the third offer. Furthermore, CL did have 14 days from the date of service of the third offer to consider the same.

[35] I was of the view that while the scenario was initially complicated by the claims of other defendants, it had become a relatively straightforward battle between RBG and CL after the other defendants dropped out. The s 20A issue was novel but not particularly complex.

[37] In the circumstances, I declined to grant such a certification.

[39] In the light of my finding that RBG had succeeded on its claim for CL’s conversion of nickel briquettes, I had ordered CL to pay damages being the net purchase price or prices which CL had obtained for the briquettes. The parties were able to agree on the quantum of the same, leaving the question of interest to be paid thereon to be decided by me. On such interest, there were two sub-issues if interest were ordered to be paid: the period for which interest should be paid and the rate of interest.

[40] RBG suggested various starting dates for the interest period:

(a) 9 May 2002. This was the date when CL took delivery of the nickel briquettes and was considered to be the date of conversion.

(b) 17 June 2002. This date was the last of three dates when CL sold the nickel briquettes.

(c) 13 December 2002. This was the date when RBG’s claim for the nickel briquettes was filed as an amendment to its statement of claim.

RBG obviously wanted interest to run from as early a date as possible whereas CL wanted no interest to be payable, suggesting that no interest should be payable on a conversion claim. If interest were to be paid, CL obviously wanted it to run from a date as late as possible. CL submitted that interest should run from the last date of the sale of other metals by RBG’s liquidators. These other metals had remained in the warehouses until the liquidators sold them. CL’s argument was that RBG would not have received the sale proceeds from the sale of the nickel briquettes earlier than when the other metals were sold by RBG’s liquidators. In response, RBG submitted that there was some delay in the sale of other metals because of other disputes and it was speculative to say when the sale of the nickel briquettes would have been achieved if CL had not converted the same.

[41] As regards the rate of interest, RBG sought 6% per annum although it acknowledged that the sale proceeds of the other metals were deposited in a fixed deposit US$ account. CL’s position was that the deposit rates for US$ would be less than 6% per annum. However, no specific rate was mentioned at the time I was receiving submissions as to the question of interest which CL should pay. I rejected a late attempt by CL to adduce evidence on the US$ deposit rate. RBG also did not provide the rate for the same, although it did not dispute that it would be less than 6% per annum. On the other hand, CL also did not say how CL had used the funds from the sale proceeds of the nickel briquettes.

[42] I was of the view that since the nickel briquettes had been sold, and CL had received the net sale proceeds, which would otherwise have been received by RBG, interest should be payable by CL.

[43] As for the date when interest was to accrue, the two logical dates from the dates proposed in submissions would be the date when CL sold the nickel briquettes or the date when the liquidators would have sold the nickel briquettes if not for the conversion. On the latter date, I assumed that it would be one of the dates during the period from 25 October 2002 to 19 April 2003, mentioned to me as the period when the other metals were sold by the liquidators.

[44] To choose either of the two competing dates would result in a larger windfall for one side. The date of last sale by CL, ie 17 June 2002, would reduce CL’s windfall but, on the other hand, it would more than compensate RBG for its loss as its liquidators were unlikely to have sold the nickel briquettes by 17 June 2002. RBG was put into compulsory liquidation in England only on 12 June 2002 and the sale of the other metals by the liquidators commenced only from 25 October 2002. On the other hand, if interest were to accrue from, say, 25 October 2002 only, then CL would have a larger windfall since it had received the sale proceeds about four months earlier.

[45] The rate of interest would also affect the considerations of windfall and the extent thereof.

[46] In trying to minimise the windfall to either side, I decided that CL was to pay interest on the agreed quantum from the date of last sale by CL, ie 17 June 2002, to the date of my decision on interest, ie 4 August 2004, at the rate of 3% per annum.

[47] There remained one minor issue regarding interest. RBG had to pay the sale proceeds of one drum of nickel to CL pursuant to my judgment of 17 June 2004. By that, I meant the net sale proceeds. I was informed that the principal sum thereof was a small sum of around US$2,000. RBG reminded me that under orders for appointment of provisional liquidators and for the winding up of RBG in Singapore and the appointment of liquidators, various orders were made allowing the liquidators to sell metals in the warehouses and to place the gross sale proceeds in a US$ fixed deposit account to earn interest. The expenses of the survey and sale, as well as of any liens, were to be deducted from the gross sale proceeds. These orders were made with the knowledge of CL and other defendants. Accordingly, I ordered RBG to pay CL whatever interest was earned on the net sale proceeds of that one drum of nickel.

[48] The default prescribed rate of interest after judgment, ie 6% per annum, would apply to each sum which CL was to pay to RBG and RBG was to pay to CL from 5 August 2004 until the date of payment.