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Grounds publishedDecided 25 Nov 2015
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High Court

Simgood Pte Ltd v MLC Shipbuilding Sdn Bhd and others

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[2015] SGHC 303Case no. Suit No 39 of 2011

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  1. Vinodh Coomaraswamy J:

  2. Introduction

  3. [2] As a quite separate claim arising from the same underlying facts, the plaintiff claims also that it is entitled to recover from both the fifth defendant and the sixth defendant the sums of US$4,399,980 and RMB14m as money paid to them during the construction of Vessel B but outside the terms of the shipbuilding contract for Vessel B (“the Extra-Contractual Payments”). The relief the plaintiff seeks for this claim is repayment of these sums, save to the extent that they are applied towards the balance of the purchase price of Vessel B.

  4. [3] The plaintiff has brought its action against nine defendants and seeks a judgment on the merits, on differing grounds, against each defendant. All nine of the defendants have been served with the writ. However, only four defendants are participating in defending this action. They are the second, third, seventh and eighth defendants. Although the remaining five non-participating defendants are in default either of appearance or of defence, the plaintiff has not taken judgment in default against them. It presumably prefers to secure at trial a judgment on the merits against even the non-participating defendants.

  5. [4] The second and third defendants, in addition to defending the action, advance a counterclaim seeking a declaration that the plaintiff does not own and has no right to possession of Vessel B. Part of the defence of all four of the participating defendants is that the third defendant still owns Vessel B because the first defendant failed to pay for it. They say that they are, like the plaintiff, the victims of the ninth defendant’s deception practised through the first defendant. As I have mentioned, both these defendants have elected not to enter an appearance in this action.

  6. [5] Having heard the plaintiff’s claim on the merits, I have allowed the claim in part while dismissing the counterclaim entirely. I have ordered the first defendant to perform specifically its contractual obligation to deliver Vessel B to the plaintiff. I have also ordered the fifth defendant to deliver up Vessel B to the plaintiff and to pay damages in detinue. I have further held that the first defendant and the fifth defendant are jointly and severally liable to repay the plaintiff the sum of US$1.3m, being the Extra-Contractual Payments less the final instalment for Vessel B.

  7. [6] Being dissatisfied with my decision to dismiss the plaintiff’s claims against the second, third, sixth, seventh and eighth defendants, the plaintiff has appealed to the Court of Appeal against that part of my decision. I now provide the grounds for that decision. I begin with a brief overview of the identity of the parties at the material time (from 2008 to 2010), followed by an account of the events which eventually led to this action. I then turn to the reasons for my decision.

  8. The parties

  9. [7] The plaintiff is a company incorporated under the laws of Labuan, a special economic zone in Malaysia. It is in the business of providing offshore marine services to the oil industry. The plaintiff is part of a group of companies which I shall call the “Simgood Group”. The ultimate holding company of the Simgood Group, and the plaintiff’s sole shareholder, is Simgood Holdings Ltd (“Simgood Holdings”). The other companies in the Simgood Group which are relevant for the purposes of this action are Simgaz Pte Ltd (“Simgaz”), Kumpulan Liziz Sdn Bhd (“Liziz Malaysia”) and PT Indoliziz (“Indoliziz”).

  10. [8] For ease of exposition, I begin my introduction of the defendants with the defendants who are individuals: the seventh, eighth and ninth defendants.

  11. [9] The seventh defendant (“Mr Tan”) is married to the eighth defendant (“Mrs Tan”). I shall refer to Mr Tan and Mrs Tan collectively as “the Tans”. The Tans are participating defendants. The ninth defendant (“Redzuan”) is the ex-husband of the Tans’ daughter, Tan Ker Chia. Redzuan has been served with the writ in this action but has not entered an appearance. He is a non-participating defendant.

  12. [10] The first defendant, which I shall refer to as “MLC Shipbuilding”, is a Malaysian company. MLC Shipbuilding is a non-participating defendant. At all material times, MLC Shipbuilding had three shareholders. Mr Tan held 30% of its shares, Redzuan held 69.2% of its shares and Tan Ker Chia held the remaining 0.8% of its shares. Redzuan was at all material times the managing director of MLC Shipbuilding. Tan Ker Chia and Mr Tan were directors of MLC Shipbuilding until May 2009. According to Mr Tan, even while he and Tan Ker Chia were directors, Redzuan had exclusive control of MLC Shipbuilding’s business and management and was in charge of its day-to-day operations. Mr Tan says that to the best of his knowledge, MLC Shipbuilding is now “defunct and/or liquidated”.

  13. [11] The second defendant, whom I shall refer to as “MLC Barging”, is a company incorporated in Singapore. MLC Barging is a participating defendant. From August 2007 to February 2010, Redzuan was a director of MLC Barging. From August 2008 to July 2009, Redzuan held a 40% stake in MLC Barging. Despite all of that, he was not involved in its day-to-day management. As at August 2010, MLC Barging had only two shareholders. Mr Tan held 60% of its shares and Tan Ker Chia held 40% of its shares. Its present directors are the Tans and Tan Ker Chia.

  14. [12] The third defendant, which I shall refer to as “MLC Maritime”, is also a company incorporated in Singapore and is also a participating defendant. The Tans are the only two directors and the only two shareholders of MLC Maritime. Mr Tan holds 60% of its shares and Mrs Tan holds 40% of its shares.

  15. [13] The fourth defendant, which I shall refer to as “Jiangsu”, is a company incorporated in the People’s Republic of China (“China”). Jiangsu is a non-participating defendant. The corporate information available on Jiangsu is scant. Its general business is described as the “import and export of ship, ship equipment and various goods and technologies on its own and as agent, domestic trading, industrial investment [sic]”.

  16. [14] The sixth defendant, which I shall refer to as “Nantong Tongbao”, is a company incorporated in China. Although Nantong Tongbao entered an appearance in this matter, it did not file a defence and did not participate in the trial. It is therefore a non-participating defendant. It has two shareholders, both of whom are Chinese nationals. Zhu Jian Hua holds 51% of its shares and Wang An Mei holds 49% of its shares. From the time it was incorporated in June 2006 until January 2008, Nantong Tongbao owned and operated the shipyard in Nantong, Jiangsu Province, China in which Vessel B was constructed.

  17. [15] The fifth defendant, which I shall refer to as “Nantong MLC”, is a company incorporated in China. It was a joint venture entity incorporated in January 2008 to take over ownership and operation of the shipyard at which Vessel B was under construction. Nantong MLC had three shareholders upon incorporation. Nantong Tongbao held 56% of its shares, Mr Tan held 24% of its shares and Redzuan held 20% of its shares. It appears that pursuant to a resolution of Nantong MLC’s shareholders dated 29 June 2008, Nantong Tongbao reduced its shareholding to 40% while Mr Tan and Redzuan increased their shareholding to 35% and 25% respectively. Zhu Jian Hua was Nantong Tongbao’s corporate representative in Nantong MLC.

  18. [16] As I have mentioned, the Tans portray Redzuan as the villain of the piece for betraying the trust which they, like the plaintiff, reposed in him. The Tans maintain that their family and their companies – MLC Barging and MLC Maritime – are as much a victim of Redzuan as the plaintiff is. They accept that Redzuan perpetrated wrongdoing through his company, MLC Shipbuilding, including cheating, forgery and fraud. But the Tans say that they and their companies were in no way complicit in that wrongdoing. Redzuan, they say, is now on the run to avoid legal liability for his wrongdoing. Indeed, their position is that Redzuan’s betrayal has caused not just the Tans’ business relationship with him to sour. Tan Ker Chia divorced Redzuan in 2010 and he now shows no interest even in maintaining contact with his own children.

  19. [17] I begin with the undisputed facts.

  20. Undisputed facts

  21. The Tans deal with Nantong Tongbao

  22. [19] The keels for these two vessels were laid in April 2007 and their hulls were assigned the numbers 5281 and 5282. I will refer to the vessel assigned hull number MLC 5281 in April 2007 as Vessel X and to the vessel assigned hull number MLC 5282 in April 2007 as Vessel A. I will not refer to these vessels by their hull numbers because, in July or August 2008, the Tans changed the number of Vessel A’s hull to MLC 5284 and later re-assigned the number MLC 5282 to the hull of a different vessel.

  23. [20] The shipyard at which Vessel X and Vessel A were under construction was owned and operated by Nantong Tongbao. As a result of their dealings with Jiangsu, the Tans came to be acquainted with the principals behind Nantong Tongbao. The Tans and Nantong Tongbao’s principals decided to go into a shipbuilding joint venture together. Nantong MLC was incorporated in 2008 as their joint venture vehicle. From 2008, it took over ownership and operation of the shipyard from Nantong Tongbao and thereby took over of the construction of Vessel X and Vessel A.

  24. The loan facility

  25. [21] By a facility letter dated 8 May 2007, DBS Bank Ltd (“DBS”) agreed to extend a loan facility of US$5.95m (“the DBS loan”) to MLC Maritime. The DBS loan was to finance the purchase of a vessel with hull number 5282. At that time, May 2007, the number of Vessel A’s hull was 5282.

  26. [22] The financing period for the DBS loan was three years. This three-year period excluded a construction period of up to 12 months commencing from the date of the shipbuilding contract. The shipbuilding contract for Vessel A was dated 23 January 2007. It should be noted, however, that that contract was between Jiangsu and MLC Barging, not MLC Maritime (see [18] above).

  27. [23] It was a term of the DBS loan that there would “be no change of flag, classification society, legal and/or beneficial ownership of the Vessel without the prior written approval of DBS Bank”.

  28. The Simgood Group enters the scene

  29. [24] In 2008, the Simgood Group was looking to expand its offshore marine services business. The Simgood Group had by then been for some time in the business of chartering third party vessels and then sub-chartering these vessels to oil companies in South East Asia. It came to learn that a major international oil company was looking to charter offshore support vessels, but wished to do so directly from the actual owners of the vessels.

  30. [25] To take advantage of this opportunity, the Simgood Group decided to commission and purchase offshore support vessels based on the oil companies’ specifications and then, as owner, to charter these vessels directly to the oil companies. Thus, in the first quarter of 2008, the plaintiff’s manager, Captain Liew Thin Poh (“Capt Liew”), began negotiating with the Tans for them to construct these vessels for the Simgood Group. Out of these negotiations, the Simgood Group commissioned a total of seven vessels under seven contracts. All seven of the contracts were entered into with MLC Shipbuilding and all except the last is dated 5 April 2008. The seven contracts are as follows:

  31. (a) A contract with the plaintiff for a vessel with hull number MLC 5282 (“Contract 5282”).

  32. (b) A contract with Indoliziz for a vessel with hull number MLC 5284 (“Contract 5284”).

  33. (c) A contract with Liziz Malaysia for a vessel with hull number MLC 5285.

  34. (d) A contract with Liziz Malaysia for a vessel with hull number MLC 5286.

  35. (e) A contract with Liziz Malaysia for a vessel with hull number MLC 5288.

  36. (f) A contract with Liziz Malaysia for a vessel with hull number MLC 12001.

  37. (g) A contract dated 9 July 2009 with the plaintiff for a vessel with hull number MLC 7807 (“the 7807 Contract”).

  38. [26] Under each of these seven contracts, MLC Shipbuilding agreed to “build, equip, launch and complete at an appointed Chinese shipbuilder [Nantong MLC] … [and] sell and deliver” to the relevant Simgood Group entity a single vessel meeting the specifications set out in the contract on or before a specified delivery date. In exchange, the Simgood Group agreed to pay the price for each vessel by instalments. The total price of all seven vessels was US$92.89m at an average price of US$13.27m per vessel. The Simgood Group has paid a total of US$60.16m under these seven contracts. Despite having paid just under 65% of the total price, it is common ground that MLC Shipbuilding has delivered only one vessel to the Simgood Group: the vessel due under Contract 5284. MLC Shipbuilding has not delivered under any of the six remaining contracts.

  39. [27] The action before me concerns only Contract 5282.

  40. Construction of the vessels

  41. [28] The Simgood Group in due course began to make the instalment payments due under Contract 5282. Over time, the plaintiff paid six instalments totalling US$5.95m. That left only the final instalment of US$2.05m unpaid. It is common ground that the final instalment under Contract 5282 is payable only when MLC Shipbuilding makes actual delivery of the vessel. The plaintiff has, therefore, performed all of its obligations under Contract 5282 thus far.

  42. [29] In April 2008, Steven Lau, a director of Simgood Holdings, visited for the first time the Nantong MLC shipyard where Vessel A was under construction. There, he met Mr Tan. He continued to make visits to the shipyard as the construction of Vessel A progressed.

  43. [30] In the meantime, MLC Maritime was drawing on the DBS loan. As at 16 June 2008, MLC Maritime had drawn a total of US$4,850,000 on the loan.

  44. The Tans change the number of Vessel A’s hull and re-assign it

  45. [31] In July or August 2008, the Tans changed the number of Vessel A’s hull from MLC 5282 to MLC 5284. By that time, Vessel A was at an advanced stage of construction.

  46. [32] Later, in September 2008, the keels for a further two vessels were laid at the shipyard. I shall call these two vessels Vessel Y and Vessel B. The Tans re-assigned hull number MLC 5282 to the hull of Vessel B.

  47. The Extra-Contractual Payments

  48. [33] From August to November 2008, the Simgood Group made the Extra-Contractual payments totalling US$4,399,980 and RMB14m to Nantong MLC. The participating defendants accept that the Simgood Group made these payments. There is a dispute, however, as to what these payments are referable to.

  49. [34] The Extra-Contractual payments are denominated in US dollars and in Chinese renminbi. The Chinese renminbi sums were remitted to Nantong MLC by Full Mount Investment Ltd (“Full Mount”), a substantial shareholder of Simgood Holdings. It made the Extra-Contractual Payments after Mr Tan had given Steven Lau the bank account details of Nantong MLC via email on 25 August 2008. The breakdown of the Chinese renminbi Extra-Contractual Payments is as follows:

  50. (a) RMB 5m remitted on 25 August 2008.

  51. (b) RMB 3m remitted on 26 August 2008.

  52. (c) RMB 3m remitted on 28 August 2008.

  53. (d) RMB 3m remitted on 19 September 2008.

  54. The plaintiff remitted the Extra-Contractual Payment denominated in US dollars, amounting to US$4,399,980, to Nantong MLC in a single remittance on 19 November 2008.

  55. Delivery of Vessel A and launch of Vessel B

  56. [35] Vessel A was completed in March 2009. The number of its hull was then MLC 5284. The purchaser under Contract 5284, Indoliziz, had by then assigned its rights under that contract to Simgaz. Simgaz had made payment by instalments of the full purchase price of US$8m for Vessel A to MLC Shipbuilding. Vessel A was therefore delivered under Contract 5284 to Simgaz upon completion. Contract 5284 was thus discharged by performance on both sides.

  57. [36] Construction of Vessel B continued until September 2009. The number of its hull was then MLC 5282. On 6 September 2009, Vessel B was named Simgood 15 and launched. Nantong Tongbao issued and delivered to the plaintiff a “Certificate for Launching” certifying this.

  58. The Tans fall out with Zhu Jian Hua

  59. [37] Zhu Jian Hua, a shareholder of Nantong Tongbao and its representative in Nantong MLC, was the Chairman of the Board of Nantong MLC and in overall charge of managing its business. Mr Tan was in charge of its production and infrastructure development. According to Mr Tan, his relationship with Zhu Jian Hua was not very good because the latter had little experience in running a shipyard. The difficulties were compounded by the difference in culture and work ethic between the two men.

  60. [38] These business differences resulted in an acrimonious meeting on 26 April 2010 in China. According to Mr Tan, he refused Zhu Jian Hua’s requests to sign certain class certificates for two vessels unrelated to these proceedings. As a result, both he and Tan Ker Chia were threatened. In cross-examination, Mr Tan said that Zhu Jian Hua had instigated a mob of 100 people to besiege him. Mr Tan had to call the mayor of a nearby town for help. The Chinese police were also called. According to Mr Tan, Zhu Jian Hua prevented him from leaving the meeting while he sent people to Mr Tan’s residence in Nantong to remove his files and computers.

  61. [39] In May 2011, Mr Tan came across documents falsely showing that he and Redzuan had resigned as directors of Nantong MLC. He believes that Zhu Jian Hua forged these documents as part of his plan to oust Mr Tan from all involvement in Nantong MLC. Mr Tan commenced legal action in China against Nantong MLC to challenge his purported removal as a director and also to gain access to its financial records. He was successful in both actions. This further strained the relationship between himself and Zhu Jian Hua. According to Mr Tan, Zhu Jian Hua has since prevented MLC Barging and MLC Maritime from claiming Vessel B.

  62. [40] After all these incidents, Mr Tan did not return to the shipyard because he feared for his safety. Even though the Jiangsu High People’s Court ordered that Mr Tan be allowed access to Nantong MLC’s financial records, he claims that Nantong MLC failed to comply with that order.

  63. [41] Mr Tan’s position is that he has no connection or involvement with Nantong MLC now, save as a disaffected shareholder, and that he certainly has no control over it. In particular, he disavows any responsibility for its acts after he was driven out on 26 April 2010.

  64. Vessel B is not delivered

  65. [42] Article 7.1 of Contract 5282 obliged MLC Shipbuilding to deliver a vessel to the plaintiff within 13 months from either the date of the contract or from the date of payment of the first instalment, whichever was later. The date of Contract 5282 was 5 April 2008 and the plaintiff paid the first instalment on 7 May 2008. MLC Shipbuilding was therefore obliged to deliver a vessel to the plaintiff under Contract 5282 on or before 7 June 2009. It failed to do so.

  66. [43] On 7 October 2010, the plaintiff’s solicitors sent a letter of demand to MLC Shipbuilding, MLC Barging, Jiangsu and Nantong Tongbao. The letter pointed out that the plaintiff had duly made payment under Contract 5282 towards the purchase of Vessel A, but that the defendants had sold Vessel A to a third party for profit and thereafter substituted Vessel B for it without the plaintiff’s knowledge or consent. The plaintiff also put the defendants on notice that it had learned that the defendants were now attempting to sell Vessel B to a third party. The plaintiff informed the defendants that, without waiving any of its rights, it was prepared to accept Vessel B in place of Vessel A provided that Vessel B was actually delivered to the plaintiff in accordance with the agreed specifications and under a new contract.

  67. [44] On 12 October 2010, MLC Shipbuilding responded with a holding letter. It never followed up on this holding letter with a substantive response. MLC Barging responded on the same day, denying that it had any contract with the plaintiff to deliver a ship or that it owed any duty to the plaintiff to do so and informing the plaintiff that its recourse was against MLC Shipbuilding alone.

  68. [45] On 17 December 2010, through separate letters, both Nantong MLC and Nantong Tongbao confirmed and acknowledged that the “vessel bearing hull no. MLC 5282 (ex MLC 5284) and named as ‘SIMGOOD 15’ ... [was] built for and intended for” the plaintiff. The letters also stated that Nantong MLC and Nantong Tongbao would cause the Builder’s Certificate and all Class Certificates for Vessel B to refer to the plaintiff.

  69. The plaintiff commences action

  70. [46] The plaintiff commenced this action in January 2011. Initially, the plaintiff brought this action against only the corporate defendants, ie the first to sixth defendants.

  71. [47] In April 2011, Nantong Tongbao issued a notarised Builder Certificate for Vessel B directly to the plaintiff. But Vessel B was still not delivered to the plaintiff.

  72. [48] In June 2011, upon the plaintiff’s application in this action, the court restrained the parties from removing, selling or disposing of Vessel B until further order.

  73. [49] In September 2011, the plaintiff added the Tans and Redzuan as defendants to this action.

  74. The claim

  75. [51] The plaintiff also seeks to hold the other eight defendants liable to compensate the plaintiff for MLC Shipbuilding’s failure to deliver Vessel B. To reach the other defendants – being entities with whom it has no contractual relationship – the plaintiff invites me to pierce the corporate veil. It avers that MLC Shipbuilding, MLC Barging, MLC Maritime and Nantong MLC (“the MLC Companies”) are mere business vehicles for the Tans and Redzuan because they were treated as a functional whole, without any real demarcation of rights and obligations between each individual company. As a result, the plaintiff argues, they are all liable to compensate the plaintiff for MLC Shipbuilding’s failure to deliver Vessel B.

  76. [52] In addition, the plaintiff claims damages against the various defendants for the following tortious acts:

  77. (a) Against all defendants in the tort of conspiracy by unlawful means. It avers that the defendants wrongfully conspired to change the number of Vessel A’s hull from MLC 5282 to MLC 5284.

  78. (b) Against all defendants, save for MLC Shipbuilding, for wrongfully procuring MLC Shipbuilding’s breach of Contract 5282.

  79. (c) Against all defendants, save for MLC Shipbuilding, in the tort of conversion, for wrongfully changing the number of Vessel A’s hull from MLC 5282 to 5284 and for the wrongful sale of Vessel A and/or Vessel B to a third party.

  80. [53] The plaintiff also advances a claim in detinue against all nine defendants. It avers that it has a sufficient interest in Vessel B to maintain a claim in detinue because the plaintiff has the right to possession of or a right to obtain delivery of Vessel B and that the defendants have wrongfully failed to deliver it up. The defendants ought therefore to be ordered to deliver up Vessel B to the plaintiff.

  81. [54] Further and in the alternative, the plaintiff seeks a remedial constructive trust over Vessel B in its favour. It claims that by virtue of the payments which it made under Contract 5282 and by virtue of certain representations by Mr Tan on which it relied, the defendants are acting unconscionably in refusing to deliver Vessel B to the plaintiff.

  82. [55] Also as an alternative claim, the plaintiff avers that the defendants have been unjustly enriched at the expense of the plaintiff. The plaintiff has paid the first to sixth instalments under Contract 5282. But it has suffered a total failure of consideration under that contract in that the defendants have failed entirely to perform their end of the bargain. Its case therefore is that it would be unjust for the defendants to retain those instalments. The plaintiff thus seeks restitution of the instalments paid to the defendants under Contract 5282.

  83. [56] Finally, the plaintiff seeks repayment of the Extra-Contractual Payments set out at [34] above, save only to the extent that these monies are applied towards the unpaid final instalment for Vessel B.

  84. The defence and counterclaim

  85. [57] The participating defendants have presented a united defence. Their position is that MLC Shipbuilding’s contractual relationship with the plaintiff is a matter purely between these two companies. The Tans assert that they cannot be liable for MLC Shipbuilding’s defaults because it is a separate entity at law both from its shareholders and from the other MLC companies. Further, Redzuan alone ran MLC Shipbuilding and the Tans had no involvement in its day-to-day affairs.

  86. [58] The participating defendants also claim that neither the plaintiff nor MLC Shipbuilding is entitled to Vessel B. They accept that the plaintiff contracted with MLC Shipbuilding to construct and sell it a vessel under Contract 5282. But their case is that the plaintiff is merely the end buyer of Vessel B and that Contract 5282 is merely the final link in a contractual chain involving MLC Shipbuilding, MLC Barging, MLC Maritime, Jiangsu and Nantong Tongbao. It is their position that MLC Shipbuilding could not and cannot pass title to Vessel B to the plaintiff because that title never passed to MLC Shipbuilding under its contract with MLC Barging. That came about because MLC Shipbuilding failed to perform its contractual obligation to MLC Barging to make progress payments for Vessel B. That failure put MLC Shipbuilding in repudiatory breach of its contract with MLC Barging and brought that contract to an end. The plaintiff’s very strong response to this aspect of the defence is that the contractual chain is nothing but a sham, constructed to defeat the plaintiff’s claim.

  87. [59] The participating defendants deny any conspiracy by unlawful means. The Tans initially planned to build Vessels X and A for their own use. Subsequently, they decided to sell these two vessels because they were not being built to their expectations. When this happened, they changed the number of Vessel A’s hull. The Tans plead that the plaintiff knew that they had changed the number of Vessel A’s hull from MLC 5282 to MLC 5284 and that the plaintiff consented to this change. Somewhat inconsistently, the Tans also assert in their evidence that it was the plaintiff itself who asked for the number of Vessel A’s hull to be changed.

  88. [60] As for the Extra-Contractual Payments, the participating defendants aver that these payments are personal loans by one Mr Choy Wang Kong (“Mr Choy”), a director of Simgood Holdings and the sole director of Full Mount, to Nantong MLC. Further, the defendants assert that a substantial amount of these Extra-Contractual Payments have been repaid and the remaining loan monies are to be applied as part of the purchase price of the vessel to be constructed under the 7807 Contract. In oral submissions, counsel for the plaintiff confirmed that US$3.1m of the Extra-Contractual Payments is to be treated as having been repaid. The participating defendants do not dispute this figure.

  89. [61] Finally, MLC Barging’s and MLC Maritime’s counterclaim seeks a declaration that the plaintiff does not own and has no right to possession of Vessel B.

  90. The issues

  91. [62] From the foregoing, the issues which I have to determine in both the claim and counterclaim are:

  92. (a) whether the contractual chain upon which the participating defendants rely to assert that the plaintiff has no right to Vessel B is genuine or a sham;

  93. (b) whether the plaintiff consented to or asked for the number of Vessel A’s hull to be changed;

  94. (c) whether MLC Shipbuilding breached Contract 5282 and if so, what is the appropriate relief;

  95. (d) whether the defendants are liable to the plaintiff in the tort of inducing a breach of contract, and if so which defendants;

  96. (e) whether the defendants are liable to the plaintiff in the tort of conversion, and if so which defendants;

  97. (f) whether the defendants are liable to the plaintiff in the tort of detinue, and if so which defendants;

  98. (g) whether the defendants are liable to the plaintiff in the tort of conspiracy by unlawful means, and if so which defendants;

  99. (h) whether the plaintiff is entitled to a remedial constructive trust over Vessel B;

  100. (i) whether the plaintiff’s claim against the defendants in unjust enrichment has been made out, and if so against which defendants;

  101. (j) whether the defendants are obliged to repay the Extra-Contractual Payments, and if so which defendants; and

  102. (k) whether the corporate veil between the defendants should be pierced, and if so, between which defendants.

  103. The contractual chain

  104. [63] I shall deal first with the contractual chain issue. If the contractual chain asserted by the defendants is indeed genuine and not a sham, that finding is not only directly relevant to MLC Barging’s and MLC Maritime’s counterclaim but negates the plaintiff’s claim for delivery of Vessel B on any ground.

  105. [64] In order to appreciate fully the participating defendants’ defence, it is necessary to set out the contractual chain for both Vessel A and Vessel B because they are both relevant. Following the contractual chain is complicated, however, because the vessels are referred to in the contracts by their hull numbers. It will be remembered that in August or September 2008, the Tans changed the number of Vessel A’s hull from 5282 to 5284 and re-assigned the number 5282 to Vessel B’s hull.

  106. [65] Vessel A was built and delivered under the following contractual chain:

  107. (a) By a shipbuilding contract dated 26 January 2007 (“Contract A1”), Jiangsu agreed to build, sell and deliver to MLC Maritime a vessel with hull number 5282.

  108. (b) By Contract 5284 dated 5 April 2008, MLC Shipbuilding agreed to sell to Indoliziz a vessel with hull number 5284.

  109. (c) By a shipbuilding contract dated 6 May 2008 (“Contract A2”), MLC Barging agreed to build and sell a vessel with hull number 5284 to MLC Shipbuilding.

  110. (d) In or around September 2008 (“Contract A3”), Jiangsu and Nantong Tongbao agreed to build, sell and deliver to MLC Maritime a vessel with hull number MLC 5284.

  111. [66] The Tans’ case is that Contract A1 initially referred to Vessel A but, from September 2008, referred to Vessel B. That is why Contract A3 was necessary to replace Contract A1 as the top of Vessel A’s contractual chain. That is also why Contract A3’s date is out of sequence.

  112. [67] By the time delivery was due under the contracts in Vessel A’s contractual chain, the number of Vessel A’s hull was MLC 5284. Thus, in March 2009, Jiangsu delivered and passed title to Vessel A to MLC Maritime under Contract A3. MLC Barging delivered and passed title to Vessel A to MLC Shipbuilding under Contract A2. And MLC Shipbuilding delivered and passed title to Vessel A to Indoliziz’s assignee, Simgaz under Contract 5284. Although there appears to be a missing link in the contractual chain for Vessel A since there is no contract under which MLC Maritime delivered and passed title to Vessel A to MLC Barging, no one now contends that title in Vessel A did not pass validly down the chain to Simgaz.

  113. [68] Vessel B was built and was to be delivered under the following contractual chain:

  114. (a) By Contract 5282 dated 5 April 2008, MLC Shipbuilding agreed to sell to the plaintiff a vessel with hull number 5282.

  115. (b) From the time Vessel B’s hull was assigned the number MLC 5282 in September 2008, Contract A1 covered Vessel B and obliged Jiangsu to deliver Vessel B to MLC Maritime.

  116. (c) By a shipbuilding contract entered into in August 2009 (“Contract B1”), MLC Barging agreed to build and sell a vessel with hull number 5282 to MLC Shipbuilding.

  117. [69] The participating defendants claim that MLC Maritime made payment for Vessel B to Jiangsu who paid these monies on to Nantong Tongbao. Once again, there appears to be a missing link in the contractual chain for Vessel B between MLC Maritime and MLC Barging. Once again, neither side takes any point on this missing link. Therefore, the participating defendants claim that it was necessary for MLC Barging to deliver and pass title to Vessel B to MLC Shipbuilding before the latter could deliver and pass title to the plaintiff. But MLC Shipbuilding did not pay MLC Barging for Vessel B under Contract B1. As such, it never acquired any title to Vessel B which it could pass on to the plaintiff. The necessary implication is that, on MLC Maritime’s case, MLC Maritime continues to own Vessel B. It is on this basis that MLC Barging and MLC Maritime seek a declaration by counterclaim that the plaintiff has no right to possession, ownership or title in Vessel B.

  118. The evidence of the contractual chain

  119. [70] The plaintiff submits the contractual chain is a sham created by the participating defendants to position themselves ahead of MLC Shipbuilding (as the plaintiff’s vendor) in order to deny the plaintiff entitlement to Vessel B. The four main contracts in the chain that are in question are contracts A1, A2, A3 and B1. I will deal with the evidence of each contract in turn to see if they are genuine contracts or mere shams. Given that this case is about Vessel B only, the contractual chain relating to Vessel A does not go to the merits of the claim or the counterclaim. My findings on that contractual chain are, however, relevant to the credibility of the Tans.

  120. Evidence of Contract A1

  121. [71] I find that Contract A1 is not a sham. The DBS loan facility letter at cl (2)(k)(i)(a) makes specific reference to a shipbuilding contract dated 26 January 2007 executed between MLC Maritime and Jiangsu. This letter from DBS is dated 8 May 2007 and is close in time to the date of Contract A1. It is produced by a neutral party independent of any of the defendants. It raises a strong inference that Contract A1 is genuine.

  122. [72] The plaintiff relies on the fact that Contract A1 was not disclosed in discovery until only a week before trial to argue that it is a sham. In the absence of any allegation of forgery, I do not think the fact that it was disclosed late undermines the strength of the inference I can draw from the DBS loan facility letter about Contract A1.

  123. [73] I therefore find, on the balance of probabilities, that Contract A1 is genuine and is not a sham.

  124. Evidence of Contract A2

  125. [74] Contract A2 is on its face a contract for the sale of a vessel between MLC Barging as seller and MLC Shipbuilding as buyer. Unlike Contract A1, there are no contemporaneous documents, whether originating from the defendants or from a third party, which corroborate Contract A2 as a genuine contract for the sale of a ship. MLC Shipbuilding and MLC Barging are two closely-related companies run by members of the same family. This is a factor that cuts both ways. I can accept that these two companies, because of their closeness, might have conducted their business with a degree of informality. It is therefore certainly possible that Contract A2 could have come into existence without any other surrounding communication. But it is also the case that if a sham contract is to be created, it can most easily be created where the counterparties are in such a close relationship.

  126. [75] The curious aspect of Contract A2 is that the language of the contract is more consistent with a shipbuilding contract than with a ship sale contract. Thus, Contract A2 makes references to the seller engaging a design consultant agreed by both parties (Art 1.4) and to the seller constructing the vessel in accordance with the specifications as approved by the Classification Society (Art 4.1). Again, I accept that it is possible that MLC Shipbuilding and MLC Barging documented their ship sale contract as a shipbuilding contract for innocent reasons. Indeed, a common theme in the defence of the participating defendants is that I should not hold it against them if their documentation is not in “tiptop” condition. Thus far I have been prepared to accede to this submission.

  127. [76] There is, however, a central difficulty in the evidence which I cannot permit the participating defendants to explain away as the result of poor documentation. The participating defendants’ pleaded case is that at the time MLC Barging entered into Contract A2 with MLC Shipbuilding, it was a contract of sale for Vessel A. Appendix A of Contract A2 specifies the hull number of the vessel to which the contract applies as MLC 5284. So far, so good: this is consistent with the participating defendants’ pleaded case that Contract A2 was for Vessel A, which bore hull number MLC 5284 upon completion.

  128. [77] But on 6 May 2008, the date on which Contract A2 was entered into, the number of Vessel A’s hull was still MLC 5282. Vessel A’s hull number changed after Contract A2’s date, in July or August 2008. This discrepancy could be explained by the fact that when Contract A2 was entered into, both MLC Shipbuilding and MLC Barging knew that Vessel A’s hull number was going to be changed in a few months’ time. But the evidence does not bear this out. On Mrs Tan’s own evidence, she was unsure in May 2008 whether she could change Vessel A’s hull number. While she was aware of the possibility of a change – on her case, at the plaintiff’s suggestion – when Contract A2 was executed, she stated that the change would be subject ultimately to the approval of Jiangsu. Therefore, when MLC Barging and MLC Shipbuilding entered into Contract A2, she could not have been certain that the change would take place as it eventually did or that Contract A2 would cover Vessel A as it eventually did.

  129. [78] Mrs Tan confirmed this in cross examination when she said:

  130. [79] The second part of Mrs Tan’s answer is another reason why Contract A2 cannot have been entered into for Vessel A. The delivery date of the vessel under Appendix A of Contract A2 is “on or before end of July 2010”. But at the time Contract A2 was entered into, Vessel A had been under construction for over a year. The plaintiff correctly points out that a delivery date more than two years away from the date of Contract A2 is inconsistent with that contract being for a vessel which had had its keel laid over a year earlier.

  131. [80] The fact that Mrs Tan could not be sure that the number of Vessel A’s hull would be changed and the fact that the delivery date stipulated in Contract A2 is more consistent with a vessel whose keel had not yet been laid and whose construction had not yet commenced leads me to find that Contract A2 was not intended at the time of its execution to apply to Vessel A.

  132. [81] Mrs Tan then curiously took the position in cross-examination that it was not her pleaded case that Contract A2 applied to a vessel which had had its keel laid in April 2007 and which was under construction at the time Contract A2 was entered into. This was a clear volte-face from her pleadings which state unequivocally that Contract A2 was entered into for Vessel A, ie, a vessel which had had its keel laid in April 2007 and which was under construction at the time Contract A2 was entered into.

  133. [82] I find that Mrs Tan’s shifts in evidence and the inconsistency between her evidence and her pleaded position cast serious doubt on her version of events. I thus find it likely that Contract A2 was created after this dispute arose in order to give the false impression that MLC Barging ranked ahead of the plaintiff as against MLC Shipbuilding in respect of Vessel A.

  134. Evidence of Contract A3

  135. [83] It is the participating defendants who assert the existence of Contract A3. Section 106 of the Evidence Act (Cap 97, 1997 Rev Ed) therefore places the burden of proving that fact on them. In my view, the participating defendants have failed to establish on the balance of probabilities that Contract A3 exists. I say that for the following reasons.

  136. [84] First, the participating defendants’ case is that MLC Maritime is a contracting party to Contract A3. I would therefore have expected the participating defendants to have been able to produce Contract A3 if it did truly exist and was genuine. If they could not produce either the original or a copy of Contract A3, I would have expected them to be able to produce at least some contemporaneous evidence of negotiations or discussions from which the existence and terms of Contract A3 could be inferred. The participating defendants could do none of this. This failure weighs heavily against them and strongly suggests that no such contract exists. Indeed, Mrs Tan accepted in cross-examination that there was no Contract A3.

  137. [85] Second, the existence of Contract A3 is not supported by MLC Maritime’s financial statements for the period in question. Those financial statements suggest that only one shipbuilding contract for one vessel existed at the material time.

  138. [86] I begin with the financial statement for the year ending 31 December 2007. That statement notes a loan under the heading “Non-Current Liability”. The loan is tied to only one vessel. That is presumably Vessel A: the note refers to a vessel under construction and Vessel A was the only vessel under construction for MLC Maritime in December 2007. Note 5 and note 9 to this financial statement also refer to only one loan facility for only one vessel. The loan amount is US$5,950,000. This corresponds neatly with the DBS loan. The DBS loan facility letter refers to Contract A1 and was extended to MLC Maritime. These entries therefore clearly record Contract A1. This further supports the finding I have already made that Contract A1 is genuine.

  139. [87] Contract A3, if genuine, was entered into in or around September 2008. It is therefore not surprising that there is no entry matching Contract A3 in MLC Maritime’s financial statement for the year ending 31 December 2007. But MLC Maritime’s financial statement for the following year, the year ending 31 December 2008, also makes no reference to Contract A3. This statement continues to note a loan under “Non-Current Liability” which continues to relate to only one vessel. This note is carried forward from the preceding year’s financial statement. I have found that it corresponds to the DBS loan facility and to Vessel A.

  140. [88] MLC Maritime’s financial statement for the year ending 31 December 2009 also makes no reference to the existence of Contract A3.

  141. [89] If Contract A3 were indeed genuine, one would ordinarily expect MLC Maritime’s financial statements to capture this, especially if those same statements capture Contract A1. The absence of any mention whatsoever of Contract A3 in the financial statements for the year ending 31 December 2008 and 31 December 2009 is therefore a material fact from which I infer that Contract A3 does not exist.

  142. [90] I do bear in mind that Contract A3 might not appear in MLC Maritime’s financial statements simply because MLC Maritime took out no loan to finance its acquisition. But the participating defendants offer no explanation why MLC Maritime’s financial statements do not capture Contract A3 when they do capture Contract A1. It is also the case that neither the original nor even a copy of Contract A3 was adduced in evidence. I do not find the Tans’ oral testimony as to the existence of Contract A3 to be credible. Their oral evidence is not corroborated either directly or indirectly by any other evidence before me. The participating defendants have failed to prove on the balance of probabilities that Contract A3 exists.

  143. [91] My findings on the contractual chain relating to Vessel A do not go to the merits of the claim or of the counterclaim. Instead, they serve to undermine the credibility of the Tans’ and of the participating defendants’ defence.

  144. [92] I now turn to the contractual chain relating to Vessel B.

  145. Evidence of Contract B1

  146. [93] I start with Contract B1. This is said to be a shipbuilding contract by which MLC Barging agreed to build and sell a vessel with hull number 5282 to MLC Shipbuilding. But there is a material inconsistency in this contract itself. There are two versions of Contract B1 in evidence. One is undated. The other bears the date 16 April 2008. Mrs Tan’s evidence is that Contract B1 was not signed on 16 April 2008 but was in fact signed on or about 6 August 2009 and left undated on its face. The participating defendants’ pleaded position is also that Contract B1 was signed on or about 6 August 2009. Their case is that MLC Shipbuilding unilaterally and falsely inserted the date 16 April 2008 on Contract B1. This, Mrs Tan says, explains why she has two versions of Contract B1 exhibited to her affidavit of evidence in chief: one undated and one dated 16 April 2008.

  147. [94] Even if I were to accept Mrs Tan’s unsupported oral assertion that this contract was entered into in August 2009 and unilaterally backdated by MLC Shipbuilding, it remains the fact that Contract B1 provides for delivery of the vessel in June 2009. That is a date two months before the contract was supposedly entered into. This makes no sense. Mrs Tan accepted, in cross-examination, that this is absurd.

  148. [95] Given this, I find that Contract B1 was not a genuine contract and was created after the fact to give the appearance that MLC Barging had rights over Vessel B. I make this finding even though Contract B3 is apparently referred to in a letter of demand dated 8 January 2010 sent by Ang & Partners on behalf of MLC Barging to MLC Shipbuilding. That letter demands payment of instalments under a contract of sale made in or about August 2009. To my mind, this letter of demand does not establish that Contract B1 is a genuine contract. All it establishes is that Contract B1 was in existence on 8 January 2010 and was given to MLC Barging’s lawyers. It does not go so far to show that Contract B1 was indeed entered into on or about 6 August 2009. Much less does it show that Contract B3, whenever it was entered into, was intended to represent a genuine contract binding both parties.

  149. Conclusion on the contractual chain

  150. [96] In conclusion, I find that only Contract A1 is genuine. I am wholly unable to find on the balance of probabilities that the other contracts are genuine. Those findings collapse the contractual chain through which MLC Barging and MLC Maritime assert rights in Vessel B. For this reason, MLC Barging’s and MLC Maritime’s counterclaim must fail. I have therefore dismissed it.

  151. [97] I also find that the participating defendants assert the existence of these contracts in order now to create the impression that these contracts vested in them rights which come ahead of any right the plaintiff may have through its contract with MLC Shipbuilding. On the evidence before me, the participating defendants have failed to prove that the contracts creating this impression are genuine.

  152. The change of Vessel A’s hull number

  153. [98] I now turn to consider whether the plaintiff consented to or asked the Tans to change the number of Vessel A’s hull. This raises a larger factual question as to why the Tans changed the number of Vessel A’s hull. I will deal with each question in turn.

  154. Did the plaintiff ask for the change?

  155. [99] The participating defendants accept that the Tans changed the number of Vessel A’s hull and re-assigned it to Vessel B’s hull, but say that it was done only at the plaintiff’s request. Their case is that they had no reason to change the number of Vessel A’s hull from MLC 5282 to MLC 5284. It was only the plaintiff, they say, who had a clear reason to ask for the change.

  156. [100] To establish their case on this point, the participating defendants rely on a document entitled “Analysis of Total Payments to MLC Shipbuilding Sdn Bhd as at 31 December 2009” to show that the plaintiff obtained financing for MLC 5284 on 7 October 2008 from EON Bank. They also rely on documents from Maybank to show that the plaintiff obtained financing for MLC 5282 later, not until 21 January 2009, and that the funds were disbursed only on 18 June 2009. Vessel A, whose hull initially bore the number MLC 5282, was completed on 19 March 2009 (see [35] above), before the funds from Maybank were disbursed. Therefore, the participating defendants say, the plaintiff had a clear reason to ask for the hull number of Vessel A to be changed to MLC 5284: the change allowed the plaintiff to apply the funds obtained from EON Bank (earmarked for MLC 5284) towards Vessel A, given that they could not yet draw on the Maybank funds (earmarked for MLC 5282).

  157. [101] The participating defendants further assert that Steven Lau informed Redzuan sometime before May 2008 that he expected EON Bank to release the funds for the vessel with hull number MLC 5284 in October 2008. At that time, the keel for Vessel B had not yet been laid and the number of Vessel A’s hull was still MLC 5282. As Steven Lau was keen for the loan to go through, he and Redzuan discussed a way for the loan to be disbursed and came up with the idea to change the number of Vessel A’s hull to MLC 5284. They then suggested the idea to the Tans. Mr Tan even had to check with Steven Lau as to how he wanted the change of hull numbers to be done and to sort out the details of the change. While the Tans and Jiangsu were initially hesitant, they eventually agreed to the change since it would assist the plaintiff to secure financing.

  158. [102] The plaintiff denies that it ever asked the participating defendants to change the number of Vessel A’s hull. Steven Lau filed a supplementary affidavit of evidence in chief rejecting categorically the allegation that he had had any conversation or discussion with Redzuan in relation to changing the hull numbers. This evidence was not challenged in cross-examination. Steven Lau also clarified that he was not involved in any of the plaintiff’s financing or loan arrangements for the vessels including the arrangement with EON Bank, and therefore did not have the necessary knowledge to have discussed with Redzuan changing the number of Vessel A’s hull for the reason now put forward by the participating defendants.

  159. [103] I prefer Steven Lau’s evidence to that of the participating defendants. I find the participating defendants’ assertion that the plaintiff requested the change of hull numbers to be nothing more than an afterthought. This assertion is not mentioned anywhere in the participating defendants’ pleadings. It emerged for the first time only when the Tans filed their affidavits of evidence in chief a few days before trial. If it was indeed the plaintiff who asked the Tans to change the hull numbers, this is a point which, on any view, would have formed a central plank of the participating defendants’ defence. Instead, their pleaded defence takes the position that the plaintiff consented to the change of hull numbers, not that the plaintiff asked for it. These two positions are inconsistent. If the plaintiff had indeed asked for the change in hull numbers, the question of their consent would not even arise. I therefore reject the participating defendants’ evidence that the plaintiff asked for the change of hull numbers. I prefer the evidence of Steven Lau. I find, on the balance of probabilities, that the plaintiff never made any request to change the number of Vessel A’s hull.

  160. [104] This conclusion is further strengthened by the plaintiff adducing evidence that the plaintiff's financing from EON Bank was not specific to a vessel with hull number 5282. There was therefore no need or reason for the plaintiff to ask the Tans to change the number of Vessel A’s hull in order to draw on the financing from EON Bank.

  161. [105] I now turn to consider the participating defendants’ alternative case that the plaintiff consented to the change of hull numbers. The participating defendants do not rely on express consent. Instead, they invite me to infer consent from the circumstances.

  162. [106] The participating defendants rely on two main grounds to invite me to infer that the plaintiff consented to the change of the number of Vessel A’s hull. First, Steven Lau visited the shipyard in April 2008 and saw two vessels being constructed. Mr Tan then instructed his employee to send an email to Steven Lau on 10 July 2008. Attached to this email were photographs showing the progress of the two vessels being constructed. These vessels had hulls numbered 5281 and 5282. From this, they say, it should be inferred that the plaintiff knew that the number of Vessel A’s hull had initially been 5282.

  163. [107] Thereafter, the plaintiff stationed their own representative, Vincent Lee, at Nantong MLC’s shipyard in order to observe the construction of the vessels. Vincent Lee regularly updated the plaintiff and other members of the Simgood Group on the progress of the construction of Vessel A and Vessel B. The participating defendants rely specifically on an email sent on 11 March 2009 in which Vincent Lee states that official amendments had to be made to the “ABS binding certificates” because the certificates reflect hull number 5282 whereas the true hull number is 5284. Vincent Lee also signed the re-issued keel laying certificate for Vessel A, in which its hull number was changed from 5282 to 5284, and the keel-laying certificate for Vessel B, where the hull number was reflected as 5282. These two certificates are not dated. Given all this, the participating defendants argue that the plaintiff must be taken to have consented to the change in the number of Vessel A’s hull.

  164. [108] The plaintiff’s position is that Mr Tan told Steven Lau in February 2009 that there had been a “paperwork mess-up” and that he therefore needed to change the number of Vessel A’s hull from 5282 to 5284. This was almost six months after the number of Vessel A’s hull had in fact been changed. Steven Lau also testified that he had always thought of Vessel A by its name, Simgood 12, and not by the number of its hull. He did not know that the vessel had initially been constructed under a different hull number and he did not know of any change in the number of its hull. He does, however, acknowledge that Vincent Lee’s emails and progress reports do refer to the number of Vessel B’s hull as being 5282. In spite of this, he says, he was not aware that the number of Vessel A’s hull was initially 5282.

  165. [109] I find Steven Lau’s evidence to be credible. As a buyer, he would be more concerned with the progress of the construction of a particular vessel. As the end buyer, it would not be surprising for him to keep track of the vessels by their name and not by their hull numbers. Therefore, even though Vincent Lee sent him emails and progress reports on the vessels, it cannot be assumed that Steven Lau took notice of the fact that the Tans had changed the hull numbers. As for the email on 11 March 2009 which stated that amendments had to be made to certain certificates (see [107] above), this was sent after Steven Lau had been told by Mr Tan that there had been a “paperwork mess-up”. In these circumstances, it is not surprising that Steven Lau should accept this explanation at face value.

  166. [110] As for the keel-laying certificates signed by Vincent Lee, it is clear that he lacked the authority, on his own, to authorise such a fundamental change on behalf of the plaintiff. This point was also acknowledged by Mrs Tan in cross-examination. No evidence that he ever sought approval for the changes was adduced.

  167. [111] I therefore find that the plaintiff became aware of the change in hull numbers only in February 2009, when Mr Tan told Steven Lau – falsely, as I will explain below – that there had been a “paperwork mess-up”. Because Steven Lau was given inadvertence as an explanation, he did not then note or object to the change in the hull numbers. Given that Steven Lau was labouring under this false impression created by Mr Tan, I cannot draw any inference that the plaintiff consented, in the true sense of the word, to the change in the hull numbers when it found out about the change in February 2009.

  168. The true motivation behind the change

  169. [112] I turn now to consider why the Tans changed the hull numbers. MLC Barging obtained the DBS loan facility from DBS Bank on 8 May 2007. The facility was tied to the construction of a vessel with hull number MLC 5282. Initially, this was Vessel A. By 16 June 2008, MLC Maritime had drawn a total of US$4.85m on the DBS loan facility to finance the construction of Vessel A. In August 2008, as Vessel A was nearing completion, Mrs Tan set out the options available to the participating defendants in an email to Redzuan. The first option was to repay DBS US$9.7m being the sums drawn for the construction of both Vessel A and Vessel X. The second option was to continue the financing from DBS. But the second option required changing the hull numbers of Vessel A and Vessel X. In Mrs Tan’s own words: “If we choose this option, ... we have to swap the Hull No. MLC 5283 to MLC 5281 [Vessel X] & Hull No. MLC 5284 to MLC 5282 [Vessel A]”. Redzuan replied a few hours later: “Option Two”. That is why the Tans came to change the number of Vessel A’s hull from MLC 5282 to 5284.

  170. [113] On 1 October 2008, after the number of Vessel A’s hull had been changed to MLC 5284 and hull number MLC 5282 had been re-assigned to Vessel B, Mrs Tan sent another email to Redzuan in which she said:

  171. [114] I have reproduced this email at length because it shows very clearly the true intent of the participating defendants in changing the number of Vessel A’s hull. The Tans did so as part of a calculated plan to postpone their companies’ obligation to repay or refinance their debt to DBS. The DBS loan facility was tied to a vessel with hull number MLC 5282. Before the hull numbers were changed, that was Vessel A. Vessel A was nearing completion. With Vessel A’s hull number now re-assigned to Vessel B, the DBS loan was now on its face tied to Vessel B, a vessel whose keel had not yet been laid. This allowed the participating defendants to deliver Vessel A to the Simgood group without having, at the same time, to repay DBS or refinance the DBS loan.

  172. [115] The change of hull numbers served only the interests of the participating defendants. The fact of the change was made known to the plaintiff well after the fact, and the purpose of the change was never made known to the plaintiff. Instead, the plaintiff was deliberately misled into believing that the change was needed to resolve the defendant’s “paperwork mess-up”. It is disingenuous for the participating defendants to turn around and claim, in those circumstances, that the plaintiff consented to the change. The participating defendants were fundamentally dishonest in their dealings with the plaintiff and, indeed, with DBS. It is somewhat surprising that the plaintiff did not mount an alternative case in fraud or deceit.

  173. [116] In cross-examination, Mrs Tan claimed that she had spoken to DBS and that they agreed to the Tans’ changing the number of Vessel A’s hull. This was another allegation that was found nowhere in the participating defendants’ pleadings. As she admitted, it was also found nowhere in her affidavit of evidence in chief. It was wholly unsupported by any documentary evidence whatsoever.

  174. [117] I also find it hard to believe that DBS would have agreed to the change of hull numbers – as claimed by Mrs Tan – over the phone and without following up in writing. A hull number is fundamental to the identity of a vessel under construction. More importantly, the change prejudiced their security. Vessel A was nearly complete, and therefore of substantial value roughly commensurate with the amount advanced against it. On the other hand, Vessel B was at a very early stage of construction, and therefore worth far less, both in absolute terms and also relative to what DBS had advanced. Furthermore, Mrs Tan’s failure to mention that DBS had agreed to the change in her affidavit of evidence in chief puts her claim to have spoken to DBS in serious doubt. I cannot find on the balance of probabilities that DBS was even informed of the change of hull numbers, let alone that DBS agreed to it.

  175. [118] Another point which emerges from the email reproduced above is the reason the participating defendants created the contractual chain. The plaintiff suggests that the contractual chain through which MLC Barging and MLC Maritime now claim an interest in Vessel B ahead of the plaintiff and which I have found to be spurious was created in an attempt wrongfully to appropriate Vessel B away from the plaintiff. While I have found the defendants to have been dishonest in changing the hull numbers, I do not think that their dishonesty rose to such a level that they intended from the very beginning to deprive the plaintiff of Vessel B. The chain of contracts was created to cover the participating defendants’ tracks after the change of hull numbers and so as not to alert DBS. This is why Mrs Tan speaks of the problem of showing on their books that MLC Shipbuilding was now paying MLC Maritime after changing the hull numbers. After the change, the number of Vessel B’s hull was 5282. The participating defendants now had to find a way to transfer this vessel back to MLC Shipbuilding. This also explains why they entered into a contract for the purported sale of Vessel B to MLC Shipbuilding.

  176. [119] Therefore, I do not accept the plaintiff’s submission that the participating defendants created the contractual chain specifically in order to appropriate Vessel B to themselves, even though that is the purpose to which they now put the contractual chain in this action. This finding, however, does not change the fact that the contractual chain was a sham intended to give the impression that there were intervening contracts and rights in Vessel B when there were in fact none.

  177. [120] With these factual findings in mind, I now turn to address each specific cause of action pleaded by the plaintiff.

  178. The claim for breach of Contract 5282

  179. [121] The plaintiff can sustain a claim for breach of contract only against MLC Shipbuilding. Contract 5282 is the only contract on which the plaintiff relies in this action. The only counterparty to that contract is MLC Shipbuilding.

  180. [122] Pursuant to Art 7.1 of Contract 5282 (see above at [42]), MLC Shipbuilding undertook a contractual obligation to deliver to the plaintiff a vessel matching the specifications set out in that contract by 7 June 2009. In exchange, the plaintiff undertook a contractual obligation to make payment for the vessel by instalments. The plaintiff has performed its end of the bargain but MLC Shipbuilding has delivered no vessel whatsoever to the plaintiff. It is true that the final instalment of US$2.05m has not yet been paid by the plaintiff. But since that instalment is due contractually only upon delivery (see [28] above), the time for the plaintiff to perform this obligation has not yet arrived. The plaintiff is not, therefore, itself in breach of contract. MLC Shipbuilding has offered no contractual justification for its failure to deliver a vessel to the plaintiff in accordance with Contract 5282. I therefore hold that MLC Shipbuilding is in breach of Contract 5282.

  181. [123] I now consider the appropriate relief for MLC Shipbuilding’s breach of contract. Although the plaintiff’s prayer for relief in respect of this claim is phrased as an order for delivery up of Vessel B against payment of the final instalment to MLC Shipbuilding, it is common ground that what the plaintiff seeks is an order that MLC Shipbuilding specifically perform its contractual obligation to deliver a vessel to the plaintiff by delivering Vessel B to the plaintiff.

  182. Should the plaintiff be granted specific performance?

  183. [124] The plaintiff seeks an order that MLC Shipbuilding deliver Vessel B to the plaintiff under s 52(1) of the Sale of Goods Act. Section 52(1) provides:

  184. Preliminary point on governing law

  185. [125] I make a preliminary point about the governing law of Contract 5282. Art 13.2 of Contract 5282 provides that the contract “shall be governed by and construed in accordance with English law”. Neither party has pleaded, proved or submitted on English law. Both parties have assumed instead that Singapore law governs Contract 5282. I have therefore proceeded on the basis – both as to the plaintiff’s right as well as to its remedy – that English law is the same as Singapore law (see Goh Chok Tong v Tang Liang Hong [1997] 1 SLR(R) 811 at [84]; Rickshaw Investments Ltd and another v Nicolai Baron von Uexkull [2007] 1 SLR(R) 377 at [43]; EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and another [2014] 1 SLR 860 (“EFT Holdings”) at [58] and [62]).

  186. The relationship between s 52(1) and specific performance

  187. [126] Before s 52(1) of the Sale of Goods Act was enacted, specific performance of an obligation to deliver goods under a contract for the sale of goods was a remedy based purely in equity. The remedy now has a statutory basis in s 52(1). The principles of equity, however, remain relevant to the statutory remedy (see Michael Bridge, Benjamin’s Sale of Goods (Sweet & Maxwell, 9th Ed, 2014) (“Benjamin’s Sale of Goods”) at para 17-097). The words “may, if it thinks fit” in s 52(1) show that the statutory remedy is no more available as of right as is the equitable remedy of specific performance (see also Benjamin’s Sale of Goods at para 17-099).

  188. [127] The power to make an order under s 52(1), however, is enlivened only where the action is for the breach of a contract to deliver “specific or ascertained goods”. Contract 5282 was not a contract to deliver specific goods. “Specific goods” is defined in s 61(1) of the Sale of Goods Act as “goods identified and agreed on at the time a contract of sale is made”. This definition requires the parties to identify and agree upon the particular goods to be delivered under the contact at the time they enter into the contract. The language of s 61(1) implies that a contract is for the sale of specific goods only if the goods in question are in existence at the time of the contract, even if those goods may not yet be within the seller’s ownership. I say that because it is difficult to see how the parties can “identify” goods which do not even exist. At the time the parties entered into Contract 5282, Vessel B’s keel had not yet been laid nor was its hull in existence and in a position to be assigned a number. Contract 5282 is therefore not a contract for the delivery of specific goods with respect to Vessel B. I therefore consider whether it was a contract to deliver ascertained goods with respect to Vessel B.

  189. [128] “Ascertained goods” is not defined in the Sale of Goods Act. In Thames Sack and Bag Co Ltd v Knowles & Cl Ltd (1918) 88 LJKB 585, the court held that “‘ascertained’ means that the individuality of the goods must in some way be found out, and when it is, then the goods have been ascertained” (at 588). Contract 5282 can be a contract of the sale of “ascertained goods” within the meaning of s 52(1) with respect to Vessel B only if, at some point in time after the parties entered into Contract 5282, they unequivocally identified Vessel B as the individual vessel which MLC Shipbuilding was to deliver to the plaintiff under that contract. I find that the parties did so for two reasons.

  190. [129] First, the preamble of Contract 5282 makes clear that it is a contract to build a vessel and to deliver that same vessel once built. Contract 5282 stipulated that the vessel was to match the specifications provided in Art 1.2 of that contract. Article 1.2 further stipulated that the vessel to be built and delivered was to have the hull number MLC 5282. Vessel B was built according to these specifications and was assigned hull number MLC 5282 in September 2008 (see [32] above). It continued to bear that hull number until it was launched in September 2009 (see [36] above). It is to my mind immaterial that Vessel A had been assigned hull number MLC 5282 from April 2007 to July or August 2008 (see [31] above). The threshold question under s 52, insofar as it relates to ascertained goods, must be tested with regard to Vessel B. It was Vessel B whose hull bore the number MLC 5282 at the time it was launched. It was therefore Vessel B which satisfied the description in Contract 5282 at the moment that the obligation to deliver arose under Contract 5282.

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