Tjong Very Sumito and others v Chan Sing En and others

Chao Hick Tin JA (delivering the judgment of the court):

[13] The Appellants’ arguments essentially focused on the fact that Sumito is ordinarily resident in Singapore. They contended that any individual who is ordinarily resident in Singapore cannot fall within the scope of O 23 r 1(1)(a) of the ROC, even if he is also ordinarily resident outside of Singapore. This was based on the premise that the rule only targets plaintiffs who are not amenable to the process of the court. In this connection they argued that the Judge had erred in not considering an Australian case, ie, Rivera v Australian Broadcasting Corporation [2005] FCA 661, (“Rivera”), which they asserted was an authority in their favour that was brought to the court’s attention below.

[18] The issues that are raised in this appeal can be broadly categorised under the following heads:

(a) Whether it is possible for a court to find that a plaintiff is concurrently ordinarily resident in more than one place for the purposes of O 23 r 1(1)(a) of the ROC.

(b) What the underlying rationale is for jurisdiction under O 23 r 1(1)(a) of the ROC – whether it is to ensure the plaintiff’s amenability to the process of the court or to ensure the availability of a fund to facilitate the payment of costs to the defendant(s) if so ordered.

(c) Assuming a plaintiff is found to be ordinarily resident in Singapore as well as outside it, whether jurisdiction is triggered under O 23 r 1(1)(a) of the ROC.

(d) If jurisdiction is triggered under O 23 r 1(1) of the ROC, whether and to what extent the fact of ordinary residence in Singapore is relevant to the exercise of the court’s discretion to order security for costs.

(e) On the facts, whether the appellants are ordinarily resident in Indonesia, Singapore, or both, and therefore whether jurisdiction is triggered under O 23 r 1(1)(a) of the ROC.

(f) Whether, in the circumstances of the case, the Judge had erred in exercising his discretion under O 23 r 1(1) of the ROC to order security for costs against the appellants.

We will also be considering the new argument of undue delay raised by the appellants at this appeal in relation to the application of the second and third respondents for security for costs.

[19] We should mention that although at the hearing below questions relating to the scope of O 23 r 1(1)(b) of the ROC and the status of the second and third appellants as nominal plaintiffs were raised, they are no longer live issues in this appeal (see [15] above). We will, therefore, not be addressing them in this judgment.

[20] We will begin our consideration by looking at the applicable rules of court. Order 23 r 1(1) of the ROC provides:

It would be seen that this rule creates a two-stage test, consisting of the “jurisdiction” stage and the “discretion” stage. It is only if the applicant-defendant can show that the court has jurisdiction to order security against the plaintiff under one of the four grounds set out in O 23 rr 1(1)(a)–(d) that the court would then proceed to consider whether it would, in the circumstances, exercise its discretion to order security in favour of the defendant. For the purposes of this appeal, O 23 r 1(1)(a) contains the most relevant ground of jurisdiction.

This passage was quoted in Westacre Investments Inc v The State-Owned Company Yugoimport SDPR (also known as Jugoimport-SDPR) [2009] 2 SLR(R) 166 at [17], where this court also stated (at [18]) that “the starting presumption would be that the Judge had rightly exercised his discretion.”

[22] At [11] of the Judgment, the Judge explained the meaning of the term “ordinarily resident” as follows:

All parties do not dispute the correctness of this basic definition of the term “ordinary residence”; nor do we disagree with it. It will be seen from this passage that a person’s ordinary residence is to be determined not only by his or her physical presence in a place, but also his mental attitude and purpose in relation to that place. In other words, the test for “ordinary residence” depends to a significant degree upon the state of mind of the person. It also connotes residence in a place with some degree of continuity apart from accidental or temporary absences: see Levene v Commissioners of Inland Revenue [1928] AC 217 at 225.

[24] The High Court in Wishing Star relied on the analogy between individual and corporate parties made in Jones v The Scottish Accident Insurance Company, Limited (1886) 17 QBD 421 (“Jones”), where Cave J stated (at 423):

[25] Cave J’s point was that an individual did not become ordinarily resident in a place just because he had a branch of his business there, when it was clear that his main residence and business was elsewhere. One should be careful not to extend the scope of what a judge says to situations which were not within his contemplation. For the sake of argument, even if we further extended the example given by Cave J to a person having branches of his business in several (not just one) foreign countries, we would agree with him that this fact, without more, would not mean that that person was concurrently ordinarily resident in those several countries if it was clear that his main residence and business was in one specific place. The logic of Cave J’s conclusion, in the specific context of his example, cannot be faulted. But this is not to say that a person cannot be ordinarily resident in more than one jurisdiction in other appropriate circumstances. Cave J did not, on the facts of the case before him, expressly address that possibility. Similarly, the High Court in Wishing Star was making the same point that having a registered branch or a house in a jurisdiction did not, without more, mean that a company or person was ordinarily resident in that jurisdiction. Indeed, the court in Wishing Star explicitly recognised (at [4]) a scenario where having a branch in a foreign jurisdiction could lead to acquiring ordinary residence in that jurisdiction, namely, where the branch was a place of principal operation. It even went further to say that where several branches were equally dominant centres of management, the company could be said to be ordinarily resident in the various jurisdictions of those branches at the same time.

[26] Admittedly, if one were to compare [3] with [4] of Wishing Star, there appears, at first blush, to be a slight inconsistency between them. This is because at [3] the court stated that “[g]enerally speaking, it would do violence to the language to hold that anyone, whether a corporate body or an individual person, may be said to be ordinarily resident in more than one place at a time”. But it should be noted that this sentence begins with the words “[g]enerally speaking” [emphasis added]. Clearly the court was conscious that in certain particular circumstances a company or a person could be ordinarily resident in more than one jurisdiction. At [4] of Wishing Star, the court there indeed elaborated on one such set of circumstances. As such, we cannot see how the appellants could rely upon Wishing Star to contend that in law, a company or an individual can only be ordinarily resident in one jurisdiction at any one time. It seems to us that this assertion is based on an erroneous appreciation of the opinion of the court in Wishing Star.

[27] We would reiterate that what Wishing Star and Jones established is that the place of ordinary residence of a company is the place of its central management. The rationale for this is that establishing a place as a place of central management would indicate the settled purpose of the company to do business from there (see Akbarali v Brent London Borough Council [1983] 2 AC 309 at 344 as quoted in the Judgment at [11], reproduced above at [22]). If, for instance, all the directors and managers of the company were away from that location for a corporate retreat, the ordinary residence of the company would remain there; it would not be shifted to the place of the retreat. This is because the place of ordinary residence is based on a settled purpose, not on the temporary physical presence of the company’s directors or managers. If the settled purpose of the management is that its principal operations be divided among several places, as described in Wishing Star at [4], the ordinary residence of the company could very well be in those several places simultaneously. The same would follow in the case of an individual. It is a question of fact and evidence as to whether it has been shown that the person has indeed adopted and established two (or more) places of ordinary residence. The fact that he cannot physically be in more than one place at the same time is immaterial. It is the settled purpose that would be determinative. Once this purpose is established, temporary absence from a place does not per se alter the fact that a company or an individual is still ordinarily resident there.

[28] At this juncture, we should refer to the case of In re Little Olympian Each Ways Ltd [1995] 1 WLR 560 (“Little Olympian”), which was cited by the appellants. In Little Olympian at 568, Lindsay J held that to determine where a corporation ordinarily resides, the court must ascertain where its central management and control actually resides. This holding, as mentioned above, is uncontroversial. Lindsay J also stated, in obiter (at 565–566):

While this is a strong statement, it is still a qualified one. It envisages that it is still possible for a person to be ordinarily resident in more than one jurisdiction “in exceptional circumstances”. At the end of the day, as stated above at [27], the question of multiple places of ordinary residence is a matter of evidence.

[29] Moreover, there are other recent cases which have taken a less conservative approach (and, one could say, perhaps a more appropriate approach in this modern age of globalisation) than Little Olympian in addressing this question of ordinary residence. We note that it is now becoming more common for individuals to have multiple homes and places of business across the globe, more than one of which they might possibly have adopted as their ordinary residence. One English case adopting the more progressive approach is Leyvand v Barasch and others (2000) The Times 23 March 2000 (“Leyvand”), decided by Lightman J. Although on the facts of Leyvand Lightman J did not consider it necessary to make a finding that the plaintiff was ordinarily resident in more than one place simultaneously, he did make the following remark in obiter (at [5]):

We would further note that Lightman J added (at [8]) that if it were necessary for him to do so he would have held that the claimant was ordinarily resident in England as well as in Israel.

[30] The Judge had quoted and relied on this passage of Lightman J in coming to his decision (see [16] of the Judgment). What is significant is that Leyvand was endorsed, albeit in obiter, by the Federal Court of Australia in Logue v Hansen Technologies Ltd [2003] FCA 81 (“Logue”) at [24]. Both Leyvand and Logue were in turn applied by the New South Wales Supreme Court in Corbett v Nguyen & Ors [2008] NSWSC 1265 (“Corbett”), where there was an actual finding (at [21] and [24]) that the plaintiff was ordinarily resident both in Vietnam and in New South Wales, Australia, simultaneously.

[31] In so far as the Australian courts are concerned, as early as 1992 the Federal Court of Australia, in the case of Re Kenneth Dudley Taylor; Ex parte Natwest Australia Bank Ltd (1992) 37 FCR 194, had clearly accepted that a person could be ordinarily resident in more than one country. Quoting Lockhart J at [18] – [19]:

[32] The appellants did not address these cases directly, saying only that in “the English authorities” the ratio did not include a finding that the propositus was ordinarily resident in more than one place. While this was true in Leyvand and the Australian case of Logue, such a finding was actually made in Corbett.

[33] It seems to us that as a matter of principle, we cannot see any reason why a person cannot be ordinarily resident in more than one jurisdiction. This is a question of fact. We note that some countries, like England and Australia, do permit their citizens to have dual nationality – it would not be unlikely for such persons to have more than one ordinary residence. In any event, there is nothing to stop a person (even if his country of citizenship, like Singapore for example, does not permit dual nationality) from establishing a second home in another country and thus, in turn, have two (or even more than two) ordinary residences. This leads us to the next question: Does a factual finding that a party is ordinarily resident in Singapore as well as in another country, preclude the court from exercising jurisdiction under O 23 r 1(1)(a) of the ROC? To answer this question, we will first consider the rationale underlying jurisdiction under O 23 r 1(1)(a).

[36] Far from being persuaded that the appellants’ proposed rationale justifies departure from the express words of O 23 r 1(1)(a), on the contrary it seems to us that their contention concerning the rationale of that rule is effectively rebutted by the express words of the rule. Only by rejecting their proposed rationale can we avoid the truly absurd prospect of interpreting the rule to mean the exact opposite of what it says. To illustrate the difficulties with the appellants’ suggested rationale we offer the example of a person who is invariably physically present in Singapore but not ordinarily resident there (perhaps because of a lack of settled intention to reside there). He would be no less amenable to the process of the Singapore courts than someone who is ordinarily resident here. The logical consequence of the appellants’ contention, based on their proposed rationale for O 23 r 1(1)(a), is that jurisdiction under that ground would not arise against such a person, even if they were ordinarily resident out of jurisdiction. This would again obviate the express words of the rule.

The respondents also relied on a case following Shirley Ooi , namely the High Court decision in Pacific Integrated Logistics Pte Ltd v Gorman Vernel International Freight Ltd [2007] 1 SLR(R) 1017 (“Pacific Integrated Logistics”) at [7], where it was stated:

To these quotations we would add the following statement of the Federal Court of Australia in Logue at [18]:

Is jurisdiction triggered under O 23 r 1(1)(a) for persons ordinarily resident in Singapore as well as in another jurisdiction?

[43] In the light of the discussions in [39] to [42] above, it should be clear that we believe a plaintiff ordinarily resident out of jurisdiction would come within O 23 r 1(1)(a) even though he or she is also concurrently ordinarily resident within jurisdiction. On their part, the appellants argued that once a party is found to be ordinarily resident in Singapore, the jurisdiction in O 23 r 1(1)(a) cannot apply to that party. This is based partly on the rationale already rejected at [36] above and partly on the authority of various cases.

[44] One of the cases heavily relied upon by the appellants was Rivera (cited at [13] above). There the court stated (at [50]):

The applicable procedural rule in Rivera was the 23 December 2004 version of the Federal Court Rules (SR 1979 No 140) (Cth) (“the Federal Court Rules”), which is similar to the current version. The relevant parts of O 28 r 3 of that version of the Federal Court Rules (which we will call “the Australian rule”) state:

[45] The appellants argued that the Judge erred in law by not referring to Rivera (see [13] above). However, as pointed out by the respondents, the procedural rule applicable in Rivera was quite different from our O 23 r 1(1)(a) of the ROC. The Australian rule has no jurisdictional triggers; instead it treats the fact that the plaintiff is ordinarily resident outside Australia as one of the factors to be “taken into account” to inform the court’s discretion in making an order for security. The passage from Rivera cited above should be read in this light. As the Australian rule merely prescribes soft-edged discretionary factors, it is understandable that a court could interpret the concept of “ordinary residence outside Australia” as being similar to that of “lack of ordinary residence in Australia” for the purposes of exercising its discretion. However, under our O 23 r 1(1)(a), the test of being “ordinarily resident out of the jurisdiction” is a hard-edged and specific requirement (what the court in Pacific Integrated Logistics at [5] aptly called a “threshold condition” [emphasis in original]). The court should not seek to modify it.

[47] The appellants also referred to the English cases of Fitzgerald and Others v Williams and Others [1996] QB 657 and Berkeley Administration Inc and Others v McClelland and Others [1990] 2 QB 407. However, as pointed out by the respondents, both those cases did not consider the case of a plaintiff ordinarily resident both within and out of jurisdiction. We agree that they ought to be distinguished on that basis.

Having done this, they made the following contention:

It would be apparent that in the above passage from Singapore Court Practice, Professor Pinsler was not addressing the issue of jurisdiction under O 23 r 1(1)(a) but rather the much more specific question of whether in the light of changed circumstances (the plaintiff subsequently settling permanently within jurisdiction) an order for security for costs made against him earlier should continue. Even within that narrow context, which is not relevant to this appeal, the tentative language used by the author is noteworthy: “it may no longer be just (depending on the circumstances) to require a plaintiff to continue to provide security” [emphasis added].

[52] The Judge considered the objective evidence relating to the appellants’ place of ordinary residence at [21] of the Judgment and concluded that the appellants were ordinarily resident in Indonesia. There is hardly any basis upon which we could demur from this finding of the Judge, which was based on the evidence before him. We have not been given any cogent reason to depart from that finding of the Judge.

[53] The Judge found it significant that the appellants consistently provided their Indonesian addresses in various legal documents. For example, the first and third appellants provided an Indonesian address when registering themselves as directors of a Singapore incorporated company, Venus International Productions Pte Ltd. The appellants argued that they were not given a chance to explain this before the Judge, stating that it was possible that they did not realise that they were required to provide their “usual residential address” under ss 173(2) and (6) of the Companies Act (Cap 50, 2006 Rev Ed) for this purpose. We are not persuaded by this explanation. In our view, even if they subjectively did not know or understand the details of that statutory requirement, their provision of Indonesian addresses still showed that they were at least putting forward Indonesian addresses as their main address for business use. These are the addresses that would appear when customers or other interested parties performed Accounting and Corporate Regulatory Authority searches on the company or its directors. The same reasoning holds true in respect of the Indonesian addresses provided by the appellants in court documents for a separate litigation against the 11 defendant in the main action. The appellants sought to explain in the court below that these addresses were “simply a means of identification and for contact purposes”. With this having being said, they cannot then deny that by furnishing the Indonesian addresses they regarded these addresses as suitable to identify and contact them. This in turn shows their intention to do business from Indonesia.

[54] At this appeal, the appellants argued that the fact that a person holds himself out as being ordinarily resident in a place is not determinative of the question of his real ordinary residence. While this is technically true, the fact of holding-out is still highly relevant and was rightly given weight below. Here we would underscore the fact that Sumito and the second appellant are persons who have various businesses in Indonesia and Singapore. They are not ignoramuses, nor are they novices in legal proceedings. They would have appreciated the significance of those legal documents in which they were required to fill in their personal particulars.

[56] We now turn to the final issue of whether the Judge had correctly exercised his discretion under O 23 r 1(1) of the ROC. This exercise required him to consider what was just having regard to all the circumstances of the case.

We see some merit in this contention. As the appellants have not shown that they own any meaningful assets within jurisdiction which the respondents could look to for the purposes of satisfying any costs order which they may eventually obtain, and the Judge’s decision being made in exercise of his discretion under O 23 r 1(1) (see [21] above), we are unable to see any legitimate basis to interfere with it.

[62] However, an important preliminary question arises for consideration in relation to this new point: should this appellate court, in the circumstances of this case, allow this new point to be canvassed? The test for allowing such a new argument was enunciated by this court in Panwah Steel Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd [2006] 4 SLR(R) 571 at [15] as follows: