Kaki Bukit Industrial Park Pte Ltd v Ng Man Heng and Others

MPH Rubin J:

[1] In this Registrar’s Appeal, the defendants appealed against the decision of Assistant Registrar Joyce Low, who dismissed the defendants’ application for a stay of proceedings. The said application was based on the ground that Malaysia, and not Singapore, was the appropriate forum in respect of this action. After hearing arguments on 28 January 2004 and further arguments on 26 February 2004, I dismissed the defendants’ appeal. My grounds now follow.

[2] The plaintiff, Kaki Bukit Industrial Park Pte Ltd, a company incorporated in Singapore, is now in compulsory liquidation. The winding up order against the plaintiff was made on 11 January 2002 by the High Court. Prior to the winding up order, the plaintiff was, for a period, under judicial management. Pursuant to the winding up order, Mr Goh Boon Kok was appointed as the liquidator of the plaintiff.

[3] According to the liquidator, his review of the plaintiff’s records appeared to confirm that between December 1997 and July 1999, a sum of about $107,781,100 had been paid out of the plaintiff’s bank accounts to various third parties as follows:

(a) $44.5m for the purchase of shares in a Malaysian company known as Syarikat Permata Gemilang Sdn Bhd (“SPG”), the third defendant; and

(b) $63,281,100 for the purchase of two plots of land (Lots 1447 and 1450) in Bentong, Pahang (“the Bentong land”) from one Deluxe Gain Sdn Bhd (“Deluxe Gain”) at the price of RM183m.

[4] The liquidator’s view, in a synopsis, as appears from the affidavits filed by him, was that the said payments were not legitimate payments, the records did not seem to reflect any commercial benefit to the plaintiff in relation to the SPG transaction and the price paid for the Bentong land was grossly inflated and far in excess of its true market value. He averred that the said payments were made by the first defendant in breach of trust and in breach of the first defendant’s fiduciary duties to the plaintiff. It appeared from the records that at the date of the winding up order the first defendant was one of the two directors of the plaintiff, the other person being one Mdm Ho Peng Sze. It would also appear from the averments of the liquidator that apart from the first defendant, a number of other individuals were also involved in the management and control of the plaintiff. They included one Mr Ho Kok Cheong from Singapore and members of his family.

[5] In para 14 of his affidavit filed on 3 November 2003, the liquidator said that the transactions and payments which formed the basis for the plaintiff’s claims in this action were carried out over a period of about two years between December 1997 and July 1999. The officers of the plaintiff during this period of time were:

[6] In the event, the plaintiff commenced proceedings against all the named defendants. The order sought against the first defendant was for him to pay the plaintiff the sums set out in [3] herein on the ground that he had committed breaches of trust and had acted in breach of his fiduciary duties to the plaintiff. The plaintiff also sought declarations that the first defendant had failed to act honestly and use reasonable diligence in the discharge of his duties as a director of the plaintiff and that he was privy to carrying on the business of the plaintiff for a fraudulent purpose. There was also a claim for damages against him for conspiracy. As against the second to the fourth defendants, the plaintiff’s claim was founded on knowing receipt, dishonest assistance and conspiracy. The plaintiff also sought various tracing orders against the second, third and fourth defendants. It must be added at this stage that the plaintiff has also instituted a parallel action in Singapore against Ho Kok Cheong, Yeo Kai Eng, Ho Miaw Ling and Ho Peng Sze in Suit No 707 of 2003, claiming relief for breach of trust and other wrong-doings on their part in relation to the plaintiff’s affairs.

[7] Having failed to set aside the service of the writ of summons, the defendants filed an application to the court for a stay of proceedings on the grounds that Malaysia was the appropriate forum in relation to the plaintiff’s claim. In this connection, the first defendant who is a Malaysian citizen and resident in Malaysia, filed two affidavits, one on 21 October 2003 and the second on 24 November 2003. He claimed that he suffers from severe asthma and cardiac problems which prevent him from coming to Singapore. As regards the Bentong land transaction, the first defendant averred that Mr Steven Ng, who valued the land at the material time and is thus an important witness, is unwilling to testify in court. In this regard, he referred the court to the correspondence exchanged between SPG and Mr Steven Ng of Chesterton International, Malaysia. In so far as is material, the letter dated 22 November 2003 and signed by Mr Steven Ng reads as follows:

[8] In the main, the contention by the first defendant was that his present medical condition would not permit him to come to Singapore to defend the suit against him and that Mr Steven Ng who is a vital witness, whilst he can be subpoenaed to appear in Malaysian courts, cannot be forced to testify in Singapore courts. It must also be mentioned at this stage that the first defendant was the sole spokesman and affirmant for all the defendants. It would appear from the statement of claim that the plaintiff and the second, third, and fourth defendants had common shareholders and that the first defendant had been at all times an alternate director in the second, third, and fourth defendants, in addition to being a director of the plaintiff.

[9] Defendants’ counsel, in his submission, contended that given the connecting factors, Malaysia is the appropriate forum for determining the issues in this case. In so far as is material, paras 21 to 36 of the submission read as follows:

[10] Plaintiff’s counsel in his submission underscored the following:

[11] The list submitted by plaintiff’s counsel stating the location of the prospective witnesses reads as follows:

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Wong Lye Kuen – Representative of Straits International Resources Pte Ltd at the EGM of 6 December 1997 [Bankrupt In Singapore]

[12] The principles governing the granting of stay of proceedings, such as the one before this court, are set out by Lord Goff of Chievely in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 (“The Spiliada”) and were re-stated succinctly in Dicey & Morris on the Conflict of Laws – Third Cumulative Supplement to the Eleventh Edition (Sweet & Maxwell, 1990) at paras 393–395 as follows:

[13] The Spiliada principles are well-entrenched in our system, having been re-affirmed by the High Court as well as the Court of Appeal in several cases (see: The Vishva Apurva [1992] 2 SLR 175; Brinkerhoff Maritime Drilling Corp v PT Airfast Services Indonesia [1992] 2 SLR 776; Eng Liat Kiang v Eng Bak Hern [1995] 3 SLR 97; Oriental Insurance Co Ltd v Bhavani Stores Pte Ltd [1998] 1 SLR 253; Datuk Hamzah bin Mohd Noor v Tunku Ibrahim Ismail Ibni Sultan Iskandar Al-Haj [2001] 4 SLR 396; PT Hutan Domas Raya v Yue Xiu Enerprises (Holdings) Ltd [2001] 2 SLR 49); Praptono Honggopati Tjitrohupojo v His Royal Highness Tunku Ibrahim Ismail Ibni Sultan Iskandar Al-Haj [2002] 4 SLR 667.

[14] In this context, it would suffice if reference is made only to PT Hutan Domas Raya, where it was held by the Court of Appeal at [16] that:

[15] In my view, the circumstances of the case did not seem to support the defendants’ contention that Malaysia, and not Singapore, was the most appropriate forum. First and foremost, the plaintiff, now in liquidation, is a Singapore entity. The claim formulated by the liquidator for the plaintiff bespoke wrongdoings and breaches committed in Singapore. The directorial responsibilities undertaken by the first defendant were carried out in Singapore. All the resolutions pertaining to the payments under the microscope were made in Singapore. At all times, the management and control of the plaintiff remained in Singapore. The relevant cheque payments in respect of the transactions were made from accounts operated with Singapore banks and in Singapore dollars. The winding up order of the plaintiff was made in Singapore. The liquidator is resident in Singapore and all the documents of the plaintiff (450 arch files, according to the liquidator) were at all times, and are now, housed in Singapore. The first defendant, who now wants the matter to be stayed in Singapore, has been a director of not only the plaintiff but, by his admission, also in other Singapore companies.

[16] The main strand in the application of the defendants is that their principal witness, the first defendant, is not well enough to travel to Singapore. The reply to this by plaintiff’s counsel is that if indeed the first defendant is so indisposed to travel to Singapore, the problem can be easily solved by his testifying in Malaysia by video link, as is not uncommon nowadays. The second objection by the defendants is that their valuer, Mr Steven Ng, whose evidence is so vital, is unwilling to give evidence at the trial and if the action were to continue in Singapore, the court process would not bind him. In my view, one of the issues to be determined at the trial is the true market value of the property in 1997. For this, the parties could produce evidence from any reputable valuer, even if Mr Steven Ng is unwilling to testify. At any rate, it would appear from the letter of Mr Steven Ng that court appearance was not within the scope of his appointment and he gave his valuation premised on certain assumptions which were seemingly suggested by the first defendant.

[17] Apart from the fact that the first defendant and Mr Steven Ng are located in Malaysia, all the other dramatis personae appear to be resident and available in Singapore. As to the point that the second, third and fourth defendants are Malaysian entities, my conclusion, having regard to the averments of the parties, was that this aspect was not a significant factor since the first defendant himself had in his affidavits made it plain that he would be the only material witness in relation to the dispute at hand. Additionally, there are parallel proceedings in relation to the acts and omissions of the other officers and de facto directors of the plaintiff in Singapore in Suit No 707 of 2003. In my view, the connecting factors in this case clearly pointed to Singapore as the most appropriate forum. The other arguments raised by defendants’ counsel, that the laws of Malaysia applied to the sale of Bentong land and to the transfer of shares in the third defendants, were found by me to be red herrings. In my view, even if an issue arose as to the applicability of Malaysian laws, Singapore courts would be able to deal with them, as has been done in so many cases.