High Court · Decided 11 August 2009

Shafeeg bin Salim Talib And Another (administrators of the estate of Obeidillah bin Salim bin Talib, deceased) v Helmi bin Ali bin Salim bin Talib and Others

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[2009] SGHC 180Case no. OS 1406/2008, SUM 1760/2009

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Grounds of decision

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Ng Yong Kiat, Francis AR:
[1] This is an application by the fourth defendant in Originating Summons No 1406 of 2008 (“the OS”) for the following orders:
(a) that the proceedings in the OS be set aside under O 2 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“ROC”) on the grounds that the proceedings do not constitute an administration action within the meaning of O 80;
(b) that, further or in the alternative, the proceedings in the OS be stayed on the grounds of forum non conveniens; and
(c) that an order made by the Assistant Registrar (“AR”) in Summons No 5534 of 2008 (“SUM 5534”) that the plaintiffs’ costs and disbursements of and incidental to SUM 5534 be paid from the fourth defendant’s share of the estate of the late Obeidillah bin Salim bin Talib, deceased (“the costs order”), be set aside on the ground that it was made ex parte in respect of the fourth defendant.
The background facts leading up to the filing of the OS and the present application
[2] The plaintiffs in the OS are the administrators of the estate of the late Obeidillah bin Salim bin Talib, deceased (“the deceased”), who died intestate on 5 May 2005, domiciled in Singapore. The four defendants in the OS are brothers and, being the sons of one of the deceased’s brothers, are among the beneficiaries of the deceased’s estate under Muslim law; the plaintiffs are not among the beneficiaries of the deceased’s estate. The plaintiffs and defendants are on opposing sides in a decades-old family feud, the genesis of which is not material for purposes of the present application.
[3] At the time of his death, the deceased held shares in an entity known as Al-Taleb Al Akaria. A total of 16 persons, comprising the mother of the deceased, the deceased, his then-living siblings and the heir of a deceased sibling, established the entity on 27 July 1948 in Cairo, Egypt.
[4] According to the fourth defendant, the entity is a “civil property company” under Egyptian law. In the English translation of documents produced by the fourth defendant, including an expert opinion on Egyptian law from an Egyptian lawyer, Mr Moataz Mohamed Al-Farash (“Mr Moataz”), and the document creating the entity, the entity is described as a “company”. In the Preamble of the document creating the entity, deemed to be an integral part of the document by its First Article, it is written that the capital of the entity is divided into a hundred shares distributed among the 16 persons who established the entity, who are referred to in the document as “partners”.
[5] Although the entity is described in the plaintiffs’ affidavits and submissions as a “partnership”, it is also referred to as a “company” in the English translations of documents produced by the plaintiffs, which include an Egyptian court order and expert opinions on Egyptian law. As such, I will refer to the entity hereafter as “the company” and the document creating the company as the “foundation contract”, after a phrase used in the English translation of the aforementioned Egyptian court order to describe this document.
[6] According to Mr Moataz’s expert opinion, the company is an independent legal entity under Egyptian law and owns assets. These include a building in Cairo, which is the company’s main asset, and which generates profits for the company in the form of rent payable by tenants of the building.
[7] The defendants were the company’s “managers” (as described in the foundation contract) from 5 November 1986 until 31 October 2007, on which date they were removed as managers by the Egyptian court order referred to at [5] above. By the same court order, which was made in an action initiated by the second plaintiff and others against the defendants, a receiver was appointed to handle the affairs of the company. The making of this order and subsequent events in Egypt following the appointment of the receiver has led to a series of litigation in Egypt that will be referred to later in this judgment. Currently, the company is being managed by two new managers appointed on 15 May 2008, one of whom is the second plaintiff.
[8] The company maintains a “Partners’s Current Account” which, according to the company’s audited accounts for 2005 (“the 2005 accounts”), held a credit balance of 133,891.190 Egyptian pounds (over S$34,600 at current rates) set aside for distribution to the deceased. As a partner of the company holding shares, the deceased was entitled by virtue of the Eighth and Ninth Articles of the foundation contract to receive, annually, the company’s accounts and profits distributed by the company. The material portions of the Eighth and Ninth Articles of the foundation contract read as follows:
It should be noted that the 2005 accounts were never presented by the defendants to the partners for approval as required by the Eighth Article of the foundation contract.
[9] The plaintiffs contend that the sum of 133,891.190 Egyptian pounds due to the deceased (as reflected in the 2005 accounts) has not been distributed by the defendants and that the defendants have not presented the company’s accounts for 2006 and 2007 for approval. Furthermore, the plaintiffs claim that after the defendants’ removal as managers, they failed to hand over the property of the company, including its full accounts and monies in the “Partners’s Current Account”, to the receiver and currently remain in illegal possession of the same.
[10] On 31 October 2008, the plaintiffs filed the OS against the defendants in their capacity as administrators of the deceased’s estate. The OS is titled “In the Matter of the Estate of [the deceased] And In the Matter of Order 80 Rules of Court”, and contains prayers seeking:
It should be noted that prayer 2 of the OS erroneously makes reference to the sum of 133,324.287 Egyptian pounds (instead of 133,891.190 Egyptian pounds). The sum of 133,324.287 Egyptian pounds appears from the 2005 accounts to be the share of profits due to one of the deceased’s sisters. This error, however, is not material for purposes of the present proceedings.
The issues before the court
[13] Having set out the background facts above, I will consider the following three issues before me:
The first issue: non-compliance of the OS with O 80 and the consequences thereof
[14] The first issue can be considered in terms of two sub-issues; first, whether the OS fails to comply with O 80 such that there is an irregularity and, secondly, whether the proceedings should be set aside if there is an irregularity. The second sub-issue will only become relevant if I find that there is an irregularity.
The first sub-issue: whether there has been non-compliance with O 80
[15] Counsel for the fourth defendant submitted that the reliefs prayed for in the OS do not fall within the scope of O 80 and that the OS therefore fails to comply with O 80, giving rise to an irregularity within the meaning of O 2 r 1(1). This provision states:
[16] Counsel further submitted, relying on extracts from various English and Australian textbooks, that an administration action described in O 80 r 1 as “an action for the administration under the direction of the court of the estate of a deceased person or for the execution under the direction of the court of a trust” is meant to give assistance and protection to, inter alia, personal representatives who are administering an estate, as well as to protect those interested in the estate as creditors and beneficiaries.
[17] It was contended by counsel that insofar as prayers 1 and 2 of the OS are concerned, such reliefs as sought therein cannot be granted in an administration action as there is no issue regarding the beneficiaries of the estate for the court to resolve and neither are the plaintiffs asking the court for protection in their administration of the estate. As for prayer 4, counsel submitted that even if this prayer can be said to relate to the administration of the estate by reason of the fourth defendant’s interest as a beneficiary, it is so closely connected to prayers 1 and 2 as to be incapable of being validly granted on its own in an administration action.
[18] Counsel for the plaintiffs did not address the textbook extracts relied on by the fourth defendant but asserted that the entire subject matter of the OS is prima facie an administration action within the meaning of O 80. Counsel argued that there is no definition in the ROC as to what amounts to an “an action for the administration under the direction of the court of the estate of a deceased person” as stated in O 80 r 1, and submitted that the examples listed in O 80 rr 2(2) and 2(3) of the questions that a court can determine and the orders that the court can make in an administration action are not exhaustive. As such, although counsel did not refer me to any precedents where similar orders had been made in administration actions, he submitted that the examples in O 80 did not preclude the court from granting the relief sought in the main prayers of the OS, namely prayers 1, 2 and 4. In the final analysis, counsel for the plaintiffs contended that the OS is for an administration action as it is somehow related to and concerns the administration of the deceased’s estate, and particularly a scenario where the plaintiffs, as administrators, are seeking to establish the deceased’s entitlement to the funds of the company.
The court’s findings on the first sub-issue
[19] Order 80 is titled “Administration and Similar Actions” and provides as follows:
[20] While the ROC does not elaborate on what an administration action is beyond what is stated in O 80 r 1 and although there is a potentially wide scope of relief that can be obtained under O 80 r 2, the provisions of O 80 provide contextual clues which indicate that it is only particular types of relief and orders that can be obtained or made in an administration action. For instance, although O 80 r 2(1) provides that “any relief … which could be granted … in an administration action”, the words “any relief” are qualified by the later words, which indicate that the court can grant only particular types of relief in an administration action.
[21] Apart from stating that prayer 4 of the OS falls under O 80 r 2(2)(c), the plaintiffs did not specify which provision(s) of O 80 the orders in prayers 1 and 2 were being sought pursuant to. O 80 r 2(2) allows the court to make declarations in relation to questions that the court is asked to determine; the plaintiffs did not indicate that they were seeking declaratory relief of this nature in relation to prayers 1 and 2. As for O 80 r 2(3), although the orders listed therein that the court can make are not exhaustive, they are all directed at or affect personal representatives; they do not purport to direct other parties to perform acts, even where those acts may have an effect on the administration of the estate. The orders listed at O 80 r 2(3)(a)–(d) specifically refer to personal representatives and while the order listed at O 80 r 2(3)(e) does not expressly refer to personal representatives, the purpose of this order appears to be to allow the court to step into the shoes of personal representatives and order the performance of acts which could have been done by the personal representatives in their capacity as such. In Neoh Ah Yan v Ong Leng Choo & Anor [2008] 7 MLJ 151, Mohd Hishamudin J considered that the Malaysian equivalent of O 80 r 2(3)(e) (which is in pari materia) allowed the court to interfere in a case involving allegations of mismanagement and misconduct by the administrators of a deceased’s estate, while in Rachel Mei Ling Ong & Anor v Dato’ Bruno Henry Almeida (as the executor for the estate of Ong Soon Hoe, deceased) [1998] 6 MLJ 258, Kamalanathan Ratnam JC opined that the provision gives the court the general power to act in respect of an executor or trustee and was wide enough to give the court the power to remove or substitute an executor or trustee from such capacity.
[22] Apart from the wording of O 80 itself, the historical background to O 80 sheds light on the nature of what an administration action is and what powers the court has in dealing with such an action. It is noted in Singapore Civil Procedure 2007 (G P Selvam chief ed) (Sweet & Maxwell Asia, 2007) (“Singapore Civil Procedure 2007”) at para 80/0/2 that Order 80 is similar to O 85 of the English Rules of Supreme Court 1965 (“O 85 RSC”) while in Singapore Court Practice 2006 (Jeffrey Pinsler gen ed) (LexisNexis, 2006) (“Singapore Court Practice 2006”) at para 80/1/1, the observation is made that apart from minor differences, O 85 RSC is in pari materia with O 80.
[23] In this regard, I find the commentary at pp 821 – 822 of Williams, Mortimer and Sunnocks on Executors, Administrators and Probate (J H G Sunnucks, J G Ross Martyn & K M Garnett gen eds) (Stevens & Sons, 17th edition of Williams on Executors and 5th edition of Mortimer on Probate, 1993) (“Williams, Mortimer and Sunnocks”) on the origins of O 85 RSC, an authority that was cited by counsel for the fourth defendant, to be a particularly illuminating elucidation on the scope and ambit of an administration action:
[24] The above commentary indicates that an administration action is not meant for personal representatives to collect in assets for the estate but to provide guidance to personal representatives in the performance of their duties or protection to beneficiaries and creditors against the actions of personal representatives. Accordingly, the court can, under O 80 r 2(2), determine questions concerning the duties of personal representatives in managing the deceased’s estate as well as the rights and interests of creditors and beneficiaries. The court can also make orders under O 80 r 2(3) orders that compel the personal representatives to perform certain acts or enjoin them from doing so.
[25] That an administration action is not meant for personal representatives to collect in assets for the estate is illustrated by the case of In re Royle (1890) ChD 18 (“Re Royle”), a case cited in the above commentary from Williams, Mortimer and Sunnocks for the proposition that the court has no jurisdiction under the procedure in O 85 RSC to decide questions which could not have been decided in an administration action. In this case, the testator handed a sum of £171 15s to his wife while he was on his deathbed. The wife placed the money in a bank while the testator was still alive. After the testator’s death, one of his executors brought an administration action by originating summons against the wife and the other executor to determine whether the money given to the wife formed part of the testator’s estate at the time of his death. Kekewich J decided that the wife had not established that the testator had made a gift to her and made an order declaring that the money formed part of the testator’s personal estate at his death.
[26] The wife and the other executor appealed against Kekewich J’s decision on, inter alia, the basis that the court had no jurisdiction to try a case like this on the originating summons. The Court of Appeal proceeded to determine the question of whether a gift had been made to the wife on its merits after parties specifically consented to the Court of Appeal’s doing so. After deciding that a gift had been made to the wife, Cotton LJ, with whom Bowen LJ and Fry LJ agreed, stated at 21 that:
[27] In the light of the foregoing, I am of the view that the relief sought by prayers 1 and 2 is not such as can be obtained in an administration action within the meaning of O 80. According to counsel for the plaintiffs, prayer 1(a) seeks to enforce the deceased’s entitlement under the Eighth Article of the foundation contract to see the company’s accounts; prayer 1(b) actually goes even further than what the foundation contract provides for by seeking documentary records, spanning nearly two decades, of past distribution of profits to the deceased. As for prayer 2, counsel submitted that the plaintiffs are trying to compel the defendants to pay over the sum of money shown in the 2005 accounts which is due to the deceased pursuant to the Ninth Article of the foundation contract and which they are allegedly retaining wrongfully. Though the issues raised by prayers 1 and 2 are not those that the court can determine in an administration action, I am of the view that such issues can be determined in what has been described in Williams, Mortimer and Sunnocks as “litigation adverse to the estate in which the personal representatives are involved as plaintiffs … representing the deceased” (see [23] above). It should also be noted that in Re Royle, the Court of Appeal considered that the question as to whether the money belonged to the estate or the wife should ordinarily have been determined in an action brought against the wife or by way of a special inquiry in the administration action that the wife would have to consent to before the court would have jurisdiction to decide the issue.
[28] As for prayer 4, the plaintiffs described this as a prayer for “an order permitting [the plaintiffs] to withhold making distributions to the [d]efendants until they comply with the other orders sought in the [OS]”. I agree with the plaintiffs that O 80 appears to allow them to ask for this prayer in an administration action; specifically, they may be able to do so pursuant to either O 80 r 2(2)(c) or O 80 r 2(3)(d). However, I agree with the fourth defendant that the relief in prayer 4 is so closely connected with prayers 1 and 2 that it is incapable of standing on its own in an administration action.
[29] Accordingly, having heard the arguments of both parties, I have reached the conclusion that there has been a failure to comply with O 80 because although the OS purports to have been brought as an administration action under O 80, the relief sought by prayers 1 and 2 of the OS is not such as can be granted by the court in an administration action; further, while relief of the type in prayer 4 can ordinarily be granted under O 80, prayer 4 is so closely connected with prayers 1 and 2 that it cannot be granted in its present form. In other words, there is a mismatch between the label used to describe the action (ie an administration action under O 80) and what the action is in substance. I thus find that there is an irregularity within the meaning of O 2 r 1(1).
The second sub-issue: whether the proceedings ought to be set aside
[30] Having decided that there is an irregularity, the next question that arises is whether the proceedings should be set aside pursuant to O 2 rr 1(2) and 2, which provide:
In the present case, the plaintiffs do not dispute the fact that the fourth defendant’s application to set aside for irregularity was made within a reasonable time and before the fourth defendant had taken any fresh step after becoming aware of the irregularity.
[31] Being cognisant of the fact that O 2 r 1(2) also allows irregularity to be cured, counsel for the fourth defendant advanced three arguments as to why the OS should be set aside instead of being allowed to survive in an amended form.
[32] The first argument is essentially that if the OS is converted into a normal OS by deleting the reference to O 80 in its title, it will become apparent that the plaintiffs have no locus standi in their capacity as administrators to bring such an action. Counsel submitted that the plaintiffs had commenced proceedings under O 80 so as to get around this problem. Counsel contended that the fact of the OS having been commenced under O 80 therefore amounts to a fundamental and serious irregularity, as contemplated in Kuah Kok Kim v Chong Lee Leong Seng Co [1991] SLR 122 (“Kuah Kok Kim”), which cannot be remedied.
[33] Counsel’s key contention, relying on Mr Moataz’s expert opinion, is that the rights that the plaintiffs are seeking to enforce do not accrue to them at all. Counsel submitted that while the personal representatives of a deceased person would ordinarily have to claim foreign assets in the place where such assets are located, personal representatives are not recognised by Egyptian law, under which the deceased’s interest in the company’s shares devolves to his legal heirs directly. Counsel submitted that the deceased’s legal heirs would have to obtain an inheritance order from an Egyptian court and register the same with the company so that the ownership of the shares therein can be updated and that an Egyptian court had already made such an order on 28 January 2008 (it is not disputed that the plaintiffs are not named as legal heirs in the order). Thus, only the deceased’s legal heirs, and not the deceased’s personal representatives are recognised as shareholders of the company for purposes of exercising rights under the shares, including receiving profits and the company’s accounts. Counsel submitted that the plaintiffs should be well aware of this position since the second plaintiff had applied for such an order in Egypt to be registered as a shareholder of the company in place of his late mother.
[34] Counsel’s second argument is that the fourth defendant would suffer substantial injustice if the OS is allowed to proceed because the plaintiffs are prosecuting the OS only to vex and frustrate the defendants as part of the ongoing family feud and to find an excuse to delay distributing the defendants’ share of the deceased’s estate. Counsel referred to para 26-026 of Dicey, Morris and Collins on The Conflict of Laws (Sir Lawrence Collins gen ed) (Sweet & Maxwell, 14th Ed, 2006) (“Dicey, Morris and Collins”) to make the proposition that the plaintiffs are not obliged to collect the deceased’s shares in the company and can simply let the deceased’s shares vest in his legal heirs since there are enough assets in Singapore to pay the deceased’s debts; it was contended that the plaintiffs’ decision to commence the action despite not having to do so showed their true motivations.
[36] In response to the fourth defendant’s submissions, counsel for the plaintiffs confirmed that the plaintiffs were claiming from the defendants the documents and assets that the estate “is entitled to by it being a partner in the [company]”, partners of the company having rights under Egyptian law and the company’s articles of incorporation to review its documents and receive profits. Counsel submitted that based on the actual holding in Kuah Kok Kim, any irregularity in the OS can be remedied because even if the court finds that the OS is not for an administration action, the court can easily remedy this irregularity by deleting the words “In the Matter of Order 80 Rules of Court” from the title of the OS and making a corresponding order that the proceedings carry on forthwith with the OS as amended. In further arguments before me, counsel also suggested that if the court is of the view that prayer 4, but not the other prayers, is for relief obtainable under O 80, the title of the OS can be amended to state that the OS is “also” in the matter of O 80 to make clear that there is a distinction between relief that is sought under O 80 and relief that is not.
[37] The plaintiffs tendered their own expert opinion from Mr Ra’fat Rashad (“Mr Ra’fat”) which states that Mr Moataz’s expert opinion is incorrect and which also suggests that Singapore courts, as the courts of the place of the deceased’s domicile, are “competent to prove the heirs, wills and inheritance liquidation”. Counsel also referred to para 7-002 of Dicey, Morris and Collins for the proposition that procedural matters are governed by the lex fori, a principle that has been accepted in Star Cruise Services Ltd v Overseas Union Bank Ltd [1999] 3 SLR 412. Counsel submitted that as questions of locus standi are questions of procedure, these should be determined according to Singapore law, under which plaintiffs have standing to institute these proceedings because they are the administrators of the estate.
[38] Counsel further submitted that the fourth defendant had not shown that he would suffer any prejudice even if the action had been wrongly instituted. Finally, in response to the reference to para 26-026 of Dicey, Morris and Collins by counsel for the fourth defendant, it was argued that regardless of whether there are sufficient assets in Singapore to pay the debts of the deceased, the plaintiffs have the prerogative as administrators to institute proceedings for the benefit of the estate and cannot therefore be said to have hidden motivations for bringing the action.
The court’s findings on the second sub-issue
[39] I will first deal with the second and third arguments raised by the fourth defendant, which essentially relate to the issues of prejudice and the aggravation of the seriousness of the irregularity.
[41] For the same reasons, I am also of the view that the fourth defendant cannot complain about “patent abuse of process” or “general lack of bona fides” on the part of the plaintiffs that aggravates the seriousness of the irregularity. Whatever the plaintiffs’ reasons for not applying under O 11, they failed to serve the OS on the fourth defendant and would not have been able to prosecute the OS against him in the normal course of events.
[42] That said, the Court of Appeal has recognised in The Melati [2004] 4 SLR 7 at [27], citing the dicta of Lloyd LJ in The Goldean Mariner [1990] 2 Lloyd’s Rep 215 with approval, that in deciding whether to set aside proceedings for irregularity, absence of prejudice is by no means conclusive in favour of a plaintiff and that even though there may be no prejudice, a mistake may not be an irregularity fit to be cured under O 2 r 1.
[43] Returning to the fourth defendant’s first argument, I am of the view that counsel’s contention that the plaintiffs have no locus standi to bring the present proceedings merits further consideration. Before doing so, I will first deal with Kuah Kok Kim, since both parties relied on this case in support of their respective positions.
[44] In Kuah Kok Kim, the appellants, minority shareholders of the respondent company, commenced proceedings to wind-up the respondent by way of a winding-up petition pursuant to the Company (Winding-Up) Rules. The respondent succeeded in having the petition struck out on the basis that proceedings ought to have been commenced by way of original petition under O 88 of the Rules of the Supreme Court 1970 (“O 88”). The Court of Appeal held that while proceedings ought indeed to have been commenced by petition under O 88, the only defect was that the petition bore the title of a companies winding-up petition. The Court of Appeal considered that there had only been a failure to comply with a procedural requirement and that while this was an irregularity, it was not so fundamental or serious that the discretion to remedy the same under O 2 r 1 ought not to be exercised. Accordingly, the Court of Appeal allowed the appeal against striking out and ordered that the title of the petition and all cause papers be amended to state that the petition was an original petition.
[45] The plaintiffs are essentially seeking particular forms of substantive relief in an action that they have called an administration action. In substance, however, the action is not an administration action since most of the relief prayed for is not of the sort that can be obtained in an administration action. On one level, it may therefore be said that like in Kuah Kok Kim, there has only been a failure to comply with a procedural requirement occasioned by the plaintiffs wrongly calling the OS an administration action and wrongly referring to O 80 in the title of the OS and that, therefore, it is only the title of the OS that needs to be amended in order for the OS to proceed. However, the fourth defendant’s argument is essentially that Kuah Kok Kim is distinguishable because even though the title of the petition was amended in that case, this did not change the fact that the minority shareholders had the standing to initiate the winding-up proceedings that formed the subject matter of the petition, whereas the plaintiffs in this case do not have standing to commence this action. As such, the capacity in which the plaintiffs purport to have commenced the action requires closer scrutiny.
[46] To recap, the plaintiffs’ submission is that by virtue of their appointment as administrators of the deceased’s estate, they can exercise the rights that the deceased had as a partner in the company against the defendants. The plaintiffs also rely on Mr Ra’fat’s expert opinion which states that a Singapore court is “competent to prove the heirs, wills and inheritance liquidation”, and further assert that they have locus standi under Singapore law to bring these proceedings because they are administrators.
[47] On the other hand, the fourth defendant’s submission is that the plaintiffs are not entitled to institute the OS to enforce the rights attached to the deceased’s shares as the question of who can enforce these rights depends on Egyptian law and under Egyptian law, only the deceased’s lawful heirs, and not his personal representatives, can deal with the shares. The fourth defendant relies on Mr Moataz’s expert opinion to make these points; the plaintiffs have not challenged this aspect of Mr Moataz’s expert opinion except by a bare assertion in Mr Ra’fat’s expert opinion that it is erroneous.
[48] To ascertain which argument is correct, I start by considering the principle cited by the plaintiffs that questions of locus standi are questions of procedure to be determined by the lex fori. As noted earlier, counsel for the plaintiffs made reference to para 7-002 of Dicey, Morris and Collins, which states:
[49] Paragraph 7-002 of Dicey, Morris and Collins forms part of the commentary to Rule 17 of Dicey, Morris and Collins which states that “[a]ll matters of procedure are governed by the domestic law of the country to which the court wherein any legal proceedings are taken belong (lex fori)”. While the general principle cited by the plaintiffs has been accepted by our courts, a later portion of the same commentary to Rule 17 indicates that it is not the case that the lex causae has no role in determining who the proper parties to proceedings are. In this regard, paras 7-011–70-12 of Dicey, Morris and Collins state:
[50] Both the plaintiffs and the fourth defendant agree that the lex causae governing the dispute in this case is the law of Egypt. That must be correct. The company was created in Egypt and its legal nature is determined by the law of Egypt. In this connection, paras 30R-009–30-011 of Dicey, Morris and Collins state:
The evidence adduced by the fourth defendant as to the nature and characteristics of the company under Egyptian law (see above at [4], [6]), which was not challenged by the plaintiffs, shows that the company is a corporation with its place of incorporation in Egypt, notwithstanding the use of terms like “managers” and “partners” instead of “directors” and “shareholders” in the English translations of the documents that were tendered in evidence. The rights that the plaintiffs seek to exercise by the OS are part of the bundle of rights and obligations that make up the deceased’s shares in the company, which are assets that would be regarded under Singapore law as being situate in Egypt, the place of incorporation and the place where the shares are registered (see Macmillan Inc v Bishopgate Trust (No.3) [1995] 1 WLR 978 at 991).
[51] In addition, para 30-024 of Dicey, Morris & Collins, which counsel for the fourth defendant referred to, states:
Apart from the fact that the rights that the plaintiffs seek to exercise are conferred by the foundation contract, which is itself governed by Egyptian law, the defendants’ conduct that the plaintiffs complain of relates to the internal management of the company during their tenure as managers of the company. All these factors point to the law of Egypt as the lex causae.
[52] The fourth defendant’s evidence shows that under the lex causae, the shares, and therefore the rights under the shares that are sought to be enforced by the OS, vest in the deceased’s lawful heirs and not the plaintiffs. The plaintiffs have not shown otherwise. In fact, Mr Ra’fat’s expert opinion states, as pointed out by the fourth defendant, that the company’s former managers should, before the appointment of the receiver, have paid what was not distributed to the deceased to his heirs. While there is a subsequent paragraph in Mr Ra’fat’s expert opinion that appears to contradict his earlier statement by stating that the former managers should have paid what was due to “the deserved heirs or to their lawful representatives ‘assigned trustees in accordance with the Singapore court sentence’”, the English translation of the original expert opinion which is in Arabic has been disputed by the fourth defendant, who asserts that the Arabic text of the expert opinion refers to payment to the lawful guardians of any heirs who are minors. In any event, the plaintiffs did not show that the phrase “assigned trustees in accordance with the Singapore court sentence” in Mr Ra’fat’s expert opinion refers to personal representatives such as administrators.
[53] The evidence that the parties have placed before me thus shows that the rights that the plaintiffs seek to enforce are vested in the deceased’s lawful heirs and it is for them, and not the plaintiffs, to exercise these rights. Accordingly, I am of the view that the fourth defendant has succeeded in establishing, based on the evidence before me, that the plaintiffs have no locus standi to bring a normal OS seeking relief based on the rights attached to the shares.
[54] I note in passing that in the English decision of Konamaneni and others v Rolls Royce Industrial Power (India) Ltd and others [2002] 1 WLR 1269, a case which was referred to in para 30-024 of Dicey, Morris and Collins ([51] supra), Lawrence Collins J considered (obiter at [48]–[50]) that the rights of shareholders of a foreign company, including the right to sue derivatively in England, should be determined by the law of the place of incorporation as a matter of substance and not procedure. No evidence was placed before me as to whether Egyptian law allows shareholders to commence an action based on rights attached to their shares such as the one that the plaintiffs have commenced. As this point was not argued before me, I express no firm view on it and have not taken it into account in reaching my conclusion above.
[55] Apart from assessing the parties’ arguments based on the lex causae, the plaintiffs’ claim that they have standing can also be analysed in the alternative from the perspective of their appointment as administrators. Although the deceased was domiciled in Singapore and the plaintiffs have been validly appointed administrators under a Singapore grant, the question arises as to what effect this grant has in relation to the shares, which are foreign assets. The position in England is set out at para 26-022 of Dicey, Morris and Collins, which states:
[56] A similar view is set out at para 53-02 of Williams, Mortimer and Sunnocks on Executors, Administrators and Probate (John Ross Martyn & Nicholas Caddick gen eds) (Sweet & Maxwell, 19th edition of Williams on Executors and 7th edition of Mortimer on Probate, 2008):
It is also stated at para 49-30 of the above textbook that:
[57] The above points are made even more emphatically, and in a context closer to the facts of the present case, at para 9.12 of a more recent work, Probate Disputes and Remedies (Dawn Goodman et al eds) (Jordans, 2nd Ed, 2008):
[58] The common law position with regard to foreign assets as set out above does not appear to be inconsistent with anything in the Probate and Administration Act (Cap 251, 2000 Rev Ed). If this position also applies in the case of a Singapore grant, the shares being foreign assets do not vest in the plaintiffs as administrators by virtue of the grant and the plaintiffs would ordinarily have to take steps in the place where the shares are located to deal with the shares. This was the point made by the fourth defendant in his submissions, which the excerpts above appear to support; the excerpts also support the fourth defendant’s evidence, which the plaintiffs have not challenged, that the plaintiffs cannot in fact take any steps in Egypt to have the shares vest in them. Accordingly, since the shares vest in the deceased’s legal heirs, only they have the standing to institute proceedings based on the rights attached to the shares. This is the same conclusion that I reached above by applying an analysis based on the lex causae of the dispute.
[59] In the circumstances. I am of the view that the fourth defendant has established that the plaintiffs do not have locus standi to institute these proceedings as a normal OS to seek relief based on the rights attached to the shares. For this reason, deleting the reference to O 80 in the title of the OS or amending the title to state that it is “also” in the matter of O 80 to ‘cure’ the irregularity does not assist the plaintiffs. It would also not be feasible to amend the OS by deleting prayers 1 and 2 of the OS and allow the OS to continue purely as an administration action for prayer 4 because this prayer, as noted above, is contingent on prayers 1 and 2 being granted in the first place and cannot stand on its own. As such, I am of the view that the OS should be set aside as against the fourth defendant for irregularity. While I was not referred to any case where an OS has been set aside in similar circumstances, I note that in Karaha Bodas Co LLC v Pertamina Energy Trading Ltd and another appeal [2006] 1 SLR 112, an OS was set aside on the basis that the plaintiff had no locus standi to ask for a declaration.
[60] Although I have decided to set aside the OS, I should make it clear that this does not preclude the plaintiffs from instituting proceedings against the fourth defendant for the same relief either in their capacity as administrators, if they can subsequently show that under the lex causae or otherwise, the deceased’s shares or the rights under these shares that they seek to enforce are vested in them as administrators, or in some other capacity.
[61] In the event that I am wrong in making the above finding that the plaintiffs lack locus standi, the OS cannot nevertheless proceed in its present form and would have to be amended. In such a case, I would have ordered that the OS be amended by deleting the words “And In the Matter of Order 80 Rules of Court” from the title as well as prayer 4, so that it simply becomes a normal OS. Prayer 4 should be deleted because, apart from the fact that the matters a court would have to consider in an administration action under O 80 may be very different from those that would arise in contentious litigation commenced by the personal representatives of an estate, the question that lies at the heart of prayer 4 of the OS only arises for determination if the fourth defendant is actually found liable in relation to the other prayers in the first place. If the plaintiffs eventually succeed on issues of liability, it is always open for them to commence an administration action and seek whatever order or declaration they require.
The second issue: whether the proceedings should be stayed on the ground of forum non conveniens
[62] As I have decided that the proceedings should be set aside, it is technically unnecessary to go into the second issue. However, as parties canvassed arguments for and against a stay on the ground of forum non conveniens before me, I will consider the issue of whether the proceedings against the fourth defendant should be stayed if the OS is not set aside.
[63] The legal principles in this area are well settled and are not in dispute. Under the first stage of the two-stage test propounded in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 (“the Spiliada test”), which has been adopted by our courts in numerous cases, a defendant seeking a stay must show not only that that Singapore is not the natural or appropriate forum for trial but also that there is another available forum that is clearly or distinctly more appropriate than Singapore. If the court considers at the end of stage one that there is no other available forum clearly or distinctly more appropriate than Singapore, it will ordinarily refuse a stay. On the other hand, if the court is of the view that there is some other available forum that prima facie is clearly or distinctly more appropriate than Singapore, a stay will ordinarily be granted unless the plaintiff can establish circumstances by reason of which justice requires that a stay should nevertheless be refused. This is stage two of the Spiliada test and the court will, at this stage, consider all the circumstances of the case, including circumstances going beyond those taken into account when considering connecting factors with other jurisdictions.
Stage one of the Spiliada test
[64] In making his case for a stay, the fourth defendant contends that Egypt is clearly and distinctly a more appropriate forum whereas the plaintiffs argue that Singapore is the appropriate forum and that even if it is not, there are more than sufficient reasons why the claim should be heard in Singapore. A number of connecting factors have been raised by the parties. Before considering these connecting factors, I note that the Court of Appeal has, in CIMB Bank Bhd v Dresdner Kleinwort Ltd [2008] 4 SLR 543 (“CIMB Bank Bhd”), recognised that at the end of the day, weighing the various connecting factors is not a numbers game and that it is the legal significance of the factors in order to achieve the ends of justice which would be decisive.
Convenience and expense
[65] Counsel for the fourth defendant submitted that the fact that all the shareholder agreements, accounts, records and other documents relating to the company are located in Cairo points to Egypt being the more natural and appropriate forum for determining the dispute. In reply, counsel for the plaintiffs contended that there is already ample evidence before the court, as contained in the affidavits filed by the plaintiffs and defendants, and that, there is therefore no need to have recourse to other documents located in Egypt.
[66] While counsel for the fourth defendant made reference to the various documents mentioned above, he did not elaborate on what their contents are or how they would be relevant for the determination of the dispute between the parties. What appear to be the key documents needed for this purpose, namely the foundation contract and the 2005 accounts, are already before the court and it has not been shown that substantial expense would be incurred or that time would be wasted in obtaining other documents from Egypt if the OS is heard in Singapore. In the circumstances, I regard the location of the company’s documents as a neutral factor.
The applicable law governing the dispute
[67] Counsel for the fourth defendant submitted that Egyptian law governs the dispute between the parties and has been applied for the past 60 years to resolve disputes between the company’s shareholders. Counsel submitted that the reliefs claimed by the plaintiffs are typically those that are found in a dispute between a shareholder and a corporate entity and that as the corporate entity in this case is in Egypt, the law of the place of incorporation governs all matters concerning its constitution.
[68] In addition, counsel repeated the argument that under Egyptian law, the plaintiffs have no standing to institute the present proceedings and that only the deceased’s heirs are entitled to the monies and accounts demanded by the plaintiffs. Counsel also relied on Mr Moataz’s expert opinion to argue that under Egyptian law, the defendants can only account to the receiver for the monies and accounts. In essence, counsel’s contention was that Egyptian courts would be more adept at applying Egyptian law to the issues in the OS.
[69] Counsel for the plaintiffs submitted in reply that even if Egyptian law governs the dispute, there is already evidence on the relevant aspects of such law before the court as found in the affidavits filed in the proceedings. Counsel also made the point that, in any event, there is no dispute under Egyptian law that the deceased is entitled to at least the amount reflected in the 2005 accounts and is also entitled to the company’s accounts because this is clearly stated in the foundation contract. Counsel also asserted that the plaintiffs have standing under Singapore law to bring the action.
[70] In this case, parties are not really in dispute as to the fact that the substantive law governing the dispute is Egyptian law, given that the company was created and managed in Egypt. While counsel for the plaintiffs submitted that there is no issue as to what the rights in the foundation contract entitle partners to even if Egyptian law is the lex causae, the fourth defendant has put forward various explanations for the non-compliance with the foundation contract and the effect of these explanations on the question of liability would depend on Egyptian law. In addition, there may be other unresolved issues that would depend on Egyptian law to resolve, such as whether shareholders have the right to bring an action such as the present one. None of these issues are addressed in the expert opinions on Egyptian law that have already been filed.
[71] I also note that in Rickshaw Investments Ltd and another v Nicolai Baron von Uexkull [2007] 1 SLR 377, the Court of Appeal noted, at 42, that choice of law considerations can be a significant factor in determining the appropriate forum to hear a dispute as there will clearly be savings in time and resources if a court applies the law of its own jurisdiction to the substantive dispute. The Court of Appeal also noted, at 43, that even where a party has failed to adduce evidence of foreign law, the mere factum of a foreign lex causae may be accorded due weight despite a failure to adduce evidence regarding the content of this law.
[72] In CIMB Bank Bhd, the Court of Appeal considered that the applicable law factor would not be of much significance even though the applicable law was English law, by reason of the fact that the laws of England and Singapore in relation to unjust enrichment were similar if not identical. In this case, however, the plaintiffs did not show such similarity and in fact appear to have conceded that the laws and procedures in Egypt are different from those in Singapore. Furthermore, given the different working languages of both countries, it does not appear to be the case that Singapore courts would be able to apply Egyptian law without the aid of experts and translators, unlike the situation in CIMB Bank Bhd where the Court of Appeal considered that Singapore courts would be able to apply English law without the aid of foreign experts.
[73] Taking into account all of the foregoing matters as well as the fact that the orders sought would affect assets belonging to an Egyptian company which in all probability are located in Egypt, no evidence being led to the contrary, my conclusion is that the applicable law is a factor that points to Egypt as the more appropriate forum.
Ongoing proceedings in Egypt
[74] Counsel for the fourth defendant contended that the existence of three sets of ongoing proceedings in Egypt that are related to matters raised in the OS is another factor that points to Egypt as the more appropriate and natural forum. These proceedings concern an appeal against the order removing the defendants as managers, an action by the plaintiffs against the defendants and the receiver for termination of the receivership and the appointment of new managers and, finally, an action by the defendants to dispute the propriety of amendments to the foundation contract and the appointment of new managers on 15 May 2008.
[75] Counsel for the plaintiffs argued that the ongoing proceedings in Egypt are irrelevant to the subject matter of the OS as they only deal with the issue of who the proper managers of the company are, as well as the interpretation of the foundation contract and amendments thereto relating to the defendants’ removal as managers. Counsel submitted that these proceedings do not concern the issue of whether the plaintiffs are entitled to demand from the defendants the sum due to the deceased and the company’s documents and that therefore, the existence of these proceedings does not show that Egypt is a more appropriate forum.
[76] I agree with the plaintiffs that the ongoing proceedings in Egypt do not appear to be relevant to the subject matter of the OS. The outcome of these proceedings will not change the fact that the defendants did not act in accordance with the foundation contract or affect the issue of who can exercise rights under the shares. While the Court of Appeal in Rickshaw accepted that weight could be accorded to the fact that there are concurrent foreign proceedings if there is a risk of conflicting judgments, there does not appear to be an overlap of facts and issues between the Egyptian proceedings and those in this OS such as to give rise to the risk of conflicting judgments, unlike in Rickshaw where there was an overlap of facts and issues between ongoing proceedings in Germany and those in Singapore. As such, I am of the view that the existence of the Egyptian proceedings is a neutral factor.
Enforceability
[77] Counsel for the plaintiffs submitted that Singapore is the only jurisdiction that can issue effective orders against the first to third defendants who are domiciled and located in Singapore and who are allegedly in control over the company’s documents and assets. Counsel also suggested that these documents and assets are in fact in Singapore.
[78] The present application is by the fourth defendant for a stay of proceedings as against him. Unlike the other defendants, the fourth defendant does not reside in Singapore. Further, as pointed out by counsel for the fourth defendant, the plaintiffs adduced no evidence to show that the assets that the plaintiffs are seeking delivery of are even located in Singapore. In the circumstances, I treat enforceability as a neutral factor in considering whether the proceedings against the fourth defendant should be stayed.
Exercise of discretion
[79] Having weighed the various connecting factors raised by the parties, I am of the view that while most of the factors are neutral, one factor, namely, that of the applicable law, clearly points to Egypt as being the more appropriate forum for the dispute between the plaintiffs and the fourth defendant to be tried. It is noted at para 12-029 of Dicey, Morris and Collins that “[i]n cases concerned with the internal management of foreign companies, there is a strong tendency to see the place of incorporation as the natural forum”; in the circumstances, I find that the fourth defendant has established that Egypt is clearly and distinctly a more appropriate forum than Singapore for the trial of the action against him.
Stage two of the Spiliada test
[80] Having found that Egypt is prima facie the more appropriate forum, I now turn to consider whether the plaintiffs have established circumstances by reason of which justice requires that a stay should nevertheless be refused.
[81] I have already noted how the plaintiffs have taken the position that the laws and civil procedure in Egypt are different from those in Singapore (see above at [72]). This point was made to support their contention that even if Egypt is found to be a more appropriate forum, justice requires that the action against the fourth defendant be heard in Singapore and not in Egypt. This concession as to the differences between the applicable laws actually supports the observations I have made regarding the applicable law as being a connecting factor pointing to Egypt as the more appropriate forum, and does not show that the justice of the case requires the action to be heard in Singapore.
[82] Counsel for the plaintiffs also submitted that the fact that the other three defendants have not applied for a stay of the Singapore proceedings in favour of Egypt but have actively participated in the Singapore proceedings by filing substantial affidavits is a factor in favour of Singapore as the more appropriate forum. The effect of closely-related actions against multiple defendants in different jurisdictions on stay applications was considered by our Court of Appeal in PT Hutan Domas Raya v Yue Xiu Enterprises (Holdings) Limited & Anor [2001] 2 SLR 49 (“PT Hutan Domas Raya”).
[83] In PT Hutan Domas Raya, the respondents commenced an action for the recovery of certain debts against an Indonesian company, PT Hutan, and one Kho Teng Kwee @ Alex Korompis (“Kho”), a Singapore permanent resident who was PT Hutan’s president and chief executive. PT Hutan later applied for a stay of proceedings on the ground of forum non conveniens and succeeded before an AR. On appeal, Judith Prakash J reversed the AR’s decision and discharged the stay order, inter alia, on the basis that, while Indonesia was prima facie the more appropriate forum, a stay would give rise to the real prospect of conflicting outcomes in Singapore and Indonesian courts on the main issues in the trial due to the similarities of the actions against PT Hutan and Kho. PT Hutan appealed to the Court of Appeal against Prakash J’s decision. In dismissing the appeal, Chao Hick Tin JA made the following observations at [24]–[27]:
[84] It can therefore be seen that in PT Hutan Domas Raya, a crucial consideration in deciding that the proceedings should not be stayed was the risk of conflicting decisions in Singapore and Indonesia if a stay had been ordered. However, there are at least two aspects in which the factual matrix in the instant case is very different from that in PT Hutan Domas Raya. First, unlike in PT Hutan Domas Raya where both defendants were properly served by the plaintiff, the plaintiffs never served the OS on the fourth defendant and were originally prepared to proceed in Singapore only against the other defendants since it is their case that all the defendants are jointly and severally liable. A stay of proceedings against the fourth defendant therefore does not change this status quo as far as the plaintiffs are concerned. Secondly, the plaintiffs have not challenged the fourth defendant’s evidence that they will not be able to institute proceedings in Egypt in any event as a matter of substantive Egyptian law; as such, it can be said that the risk of conflicting decisions caused by a stay is not as real as in PT Hutan Domas Raya.
[85] Counsel for the plaintiffs also asked me to question the fourth defendant’s motive in trying to stay proceedings and the defendants’ refusal to co-operate with the receiver appointed by the Egyptian court order, as well as the defendants’ long list of allegedly dishonest dealings, including some which reached the attention of Chan Sek Keong J (as he then was) in Yusof bin Ahmad v Hong Kong Bank Trustees (Singapore) Ltd [1989] SLR 410. The allegations as to the fourth defendant’s motive lack specificity just as the fourth defendant’s allegations about the plaintiffs’ lack of bona fides in commencing these proceedings. Insofar as the defendants are allegedly in non-compliance with the Egyptian court order, there ought to be recourse in Egypt to contempt proceedings or their equivalent and the plaintiffs have not shown otherwise. I also do not see how the comments made about the defendants by the High Court in an older case entirely unrelated to the present one can have a bearing on the question of whether these proceedings should be stayed against the fourth defendant.
[86] I am thus of the view that the plaintiffs have not discharged the burden upon them in stage two of the Spiliada test to show that justice requires that the action against the fourth defendant be nevertheless heard in Singapore.
Conclusion in relation to the second issue
[87] In view of the above conclusions, even if I am wrong in holding that the OS should not be set aside, I would have ordered that the proceedings against the fourth defendant be stayed on the ground of forum non conveniens.
The third issue: whether the costs order made in SUM 5534 should be set aside
[90] Counsel for fourth defendant submitted that that the plaintiffs had at all times, and even before taking out SUM 5534, been aware that they could serve the fourth defendant in Cairo, Egypt, at the address 171 Mohd Farid Street (“the Mohd Farid Street address”), which is also the address of the building owned by the company. As evidence of this, the counsel pointed to the fact that the plaintiffs’ Egyptian lawyer had previously served numerous processes related to actions in respect of the company, one of which was commenced by the plaintiffs and others, on the fourth defendant at the Mohd Farid Street address. The fourth defendant produced a copy of a notice dated 1 September 2008 (along with a translation) as an example of how he had previously been served at the Mohd Farid Street address. Counsel therefore submitted that the plaintiffs had misrepresented to the court in SUM 5534 that they were unable to reach the fourth defendant and did not know how to contact him.
The court’s findings on the third issue
[95] It is clear from the above passage that the unreasonable conduct referred to in O 59 r 6(2) includes unreasonable conduct on the part of personal representatives in commencing and conducting proceedings. In essence, the fourth defendant contends that the plaintiffs had acted unreasonably in taking out SUM 5534 instead of applying for service out of jurisdiction under O 11 despite knowing that the fourth defendant lives in Cairo and the address on which he could be served.
[96] The plaintiffs did not adduce any evidence in these proceedings to dispute the fourth defendant’s claims that they had been using the Mohd Farid Street address for service of processes relating to proceedings in Egypt even before SUM 5534 (and even the OS) was filed. In the circumstances, I am unable to accept the plaintiffs’ claim that they found out that the fourth defendant could be served at the Mohd Farid Street address only after SUM 5534 had been filed. In any event, as pointed out by the fourth defendant, the inscription on the OS indicates that the plaintiffs knew, at least, that the fourth defendant lived in Cairo at the time the OS was filed. In either case, the plaintiffs should have applied under O 11 for leave to serve the fourth defendant out of jurisdiction; even if the plaintiffs did not know the fourth defendant’s precise location in Cairo for purposes of personal service and even if the receiver did not manage to meet the fourth defendant, the plaintiffs could have applied for substituted service out of jurisdiction: see O 11 r 3(1) and Singapore Civil Procedure 2007 at para 11/2/4 and para 62/5/8.
[97] The plaintiffs proceeded to file SUM 5534 to obtain an order for substituted service of the fourth defendant within Singapore on the basis that the fourth defendant had to be served for the plaintiffs’ application to be able to proceed for hearing. They did not explain why even substituted service out of jurisdiction was not feasible and eventually conceded that the hearing could just proceed without the fourth defendant because it was their case that all the defendants were jointly and severally liable anyway. Viewed in this light, the application in SUM 5534 was unnecessary in the first place. Also, even if the plaintiffs’ had indeed been made aware of the fourth defendant’s address in Cairo only after SUM 5534 had been filed, they could have proceeded to withdraw the application and applied to serve the fourth defendant out of jurisdiction. Instead, they persisted with the application in SUM 5534, which was eventually dismissed after two adjournments.
[98] Although the fourth defendant has alleged that the plaintiffs had an ulterior motive in not applying for leave to serve out of jurisdiction under O 11, there does not appear to be enough evidence to establish such a motive. Nevertheless, I am of the view that the evidence produced by the fourth defendant shows that the plaintiffs had acted unreasonably in filing and proceeding with the application for substituted service of the fourth defendant within Singapore in SUM 5534 without showing clearly why they could not serve the fourth defendant out of jurisdiction whether personally or by way of substituted service.

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Shafeeg bin Salim Talib And Another (administrators of the estate of Obeidillah bin Salim bin Talib, deceased) v Helmi bin Ali bin Salim bin Talib and Others

Grounds of decision

The background facts leading up to the filing of the OS and the present application

The issues before the court

The first issue: non-compliance of the OS with O 80 and the consequences thereof

The first sub-issue: whether there has been non-compliance with O 80

The court’s findings on the first sub-issue

The second sub-issue: whether the proceedings ought to be set aside

The court’s findings on the second sub-issue

The second issue: whether the proceedings should be stayed on the ground of forum non conveniens

Stage one of the Spiliada test

Convenience and expense

The applicable law governing the dispute

Ongoing proceedings in Egypt

Enforceability

Exercise of discretion

Stage two of the Spiliada test

Conclusion in relation to the second issue

The third issue: whether the costs order made in SUM 5534 should be set aside

The court’s findings on the third issue