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Grounds publishedDecided 3 Apr 2013
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High Court

Diamond Exchange of Singapore v Singapore Diamond Exchange Pte Ltd

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[2013] SGHCR 10Case no. Suit No 984 of 2012; Summons No 1281 of 20138 paragraphs

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Grounds of decision

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  1. AR Eunice Chua:

  2. Facts

  3. [2] The plaintiff, Diamond Exchange of Singapore, is a trade association registered as a society in Singapore since 20 August 1976. It seeks to, inter alia:

  4. [3] The plaintiff’s members are manufacturers, dealers, wholesalers, retailers and individuals in the trade of diamonds, other precious and semi-precious stones, pearls and jewellery.

  5. Background to s 36(1) of the Societies Act

  6. [7] Section 36(1) of the Societies Act states:

  7. [8] This section was introduced by the Societies (Amendment) Bill 1982 (Act 16 of 1982) (“the Amendment Bill”). During the second reading speech of the Amendment Bill in Parliament, the purpose of s 36(1) was described as follows (Singapore Parliamentary Debates, Official Report (27 July 1982) vol 42 cols 56–58):

  8. Principles governing the application of s 36(1) of the Societies Act

  9. [13] Section 388(1) of the Companies Act states:

  10. Whether the condition for invocation of the court’s discretion to order security for costs is satisfied

  11. The parties’ arguments

  12. [16] The defendant relied on Frantonios Marine Services Pte Ltd and another v Kay Swee Tuan [2008] 4 SLR(R) 224 (“Frantonios Marine Services”) for the proposition that the court would consider the:

  13. My decision

  14. [21] The defendant’s reliance on Frantonios Marine Services was not appropriate in the present case. The company in question in that case was one that had ceased to carry on business and had no sources of income. It had staved off liquidation and bankruptcy proceedings by paying its debts through instalments and progress payments and with moneys from two interested third parties who had no intention of allowing the company to become insolvent. The company had also argued that it still had tremendous goodwill despite its cash flow problems. The High Court’s observations (quoted at [15] above) had to be considered in this context.

  15. Whether the court should exercise its discretion to order security for costs

  16. The parties’ arguments

  17. [29] The plaintiff argued that it was not necessary for it to offer such evidence given that the defendant had not satisfied the condition to adduce credible testimony. Nevertheless, the plaintiff urged the court to consider that its claim had a good prospect of success and that the defendant had failed to place any material before the court to enable the court to come to a view on an appropriate quantum to be ordered as security.

  18. My decision

  19. Conclusion