Case Details
- Citation: [2021] SGHC 7
- Case Title: RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd) v Matthew Peloso
- Court: High Court of the Republic of Singapore
- Decision Date: 14 January 2021
- Judge: Chua Lee Ming J
- Coram: Chua Lee Ming J
- Case Number(s): Originating Summons No 1137 of 2019; Summons No 4835 of 2019
- Procedural Posture: Contempt proceedings (civil contempt) arising from alleged breach of an injunction; sentencing and costs; both parties appealed
- Plaintiff/Applicant: RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd) (“RCMA”)
- Defendant/Respondent: Matthew Peloso (“Peloso”)
- Legal Areas: Contempt of Court — Civil contempt; Contempt of Court — Sentencing
- Injunction Order at Issue: Injunction granted on 11 May 2018 in Suit No 191 of 2018 (“Suit 191”)
- Underlying Suit: Suit 191 of 2018 (RCMA v Sun Electric Power Pte Ltd)
- Energy Scheme Context: Forward Sales Contract Scheme (FSC Scheme) administered by the Energy Market Authority
- Key Parties/Entities: Sun Electric Power Pte Ltd (“SEP”); RCMA (outsourced market-making obligations); Sun Electric Energy Assets Pte Ltd (“SEEAPL”); Kashish Worldwide FZE (“Kashish”); OCBC Bank; DBS Bank Ltd
- Counsel for RCMA: Mohammed Reza s/o Mohammed Riaz, Victoria Katerina Jones and Kwek Yuan, Justin (JWS Asia Law Corporation)
- Counsel for Peloso: Lim Chee San (TanLim Partnership)
- Judgment Length: 8 pages, 4,080 words
Summary
In RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd) v Peloso, Matthew [2021] SGHC 7, the High Court dealt with civil contempt proceedings brought by RCMA against Peloso, an officer and sole director of Sun Electric Power Pte Ltd (“SEP”). The contempt allegation arose from Peloso’s alleged breach of an injunction order granted on 11 May 2018 in RCMA’s underlying commercial dispute (Suit 191). The injunction restrained SEP (and, by extension, its directors/officers) from disposing of, dealing with, or diminishing the value of RCMA’s 70% share of certain Forward Sales Contract Scheme (FSC) payments received by SEP.
The court found Peloso in contempt on only one of the grounds advanced by RCMA. Specifically, the judge rejected Peloso’s attempt to re-characterise the scope of the injunction and concluded that the “September 2018 Withdrawal” from an account designated to receive FSC payments breached the injunction. The court imposed a fine of S$15,000 (with a default term of 10 days’ imprisonment) and ordered Peloso to pay costs of S$16,000. Both Peloso and RCMA appealed the decision.
What Were the Facts of This Case?
The factual matrix is rooted in Singapore’s electricity market arrangements under the Forward Sales Contract Scheme (“FSC Scheme”). The FSC Scheme was introduced by the Energy Market Authority to spur competition and create liquidity in wholesale and retail electricity markets. Participants are required to carry out market-making obligations in the electricity futures market in return for incentive payments, referred to as “FSC Payments”. SEP, a company involved in the generation, transmission, distribution and sale of electricity, was a participant in the FSC Scheme at all material times.
RCMA, a trader of energy and other commodities, entered into an outsourcing arrangement with SEP. Under the Agreement, RCMA assumed SEP’s FSC market-making obligations in exchange for a 70% share of all FSC Payments that SEP would receive. This economic arrangement was formalised through a Deed of Assignment dated 7 December 2016, under which SEP assigned to RCMA, among other things, 70% of its present and future rights to receive FSC Payments.
Disputes then arose. On 22 February 2018, RCMA commenced Suit 191 against SEP seeking, among other things, S$6,533,333.52 representing RCMA’s 70% share of FSC Payments received by SEP for the months of December 2017 to July 2018. RCMA also sought injunctive relief to prevent SEP from dissipating the value of RCMA’s 70% share. On 26 February 2018, the court ordered an interim injunction (the “February 2018 Order”) restraining SEP and its relevant persons from disposing, dealing with, or diminishing RCMA’s 70% share of FSC Payments received by SEP in respect of market-making trades taken on by RCMA up to 26 February 2018.
At the inter partes hearing on 11 May 2018, the court granted an interim injunction pending final determination of Suit 191 (the “Injunction Order”). The Injunction Order restrained SEP, its directors, officers, employees and/or agents from “in any way disposing, dealing with or diminishing the value of” RCMA’s 70% share of FSC Payments paid to SEP, provided RCMA met its obligations under the Agreement. By July 2018, RCMA had completed its obligations. Between January and August 2018, FSC Payments for January to June 2018 were paid into a specific OCBC account (the “OCBC Account”). The amount of FSC Payments was fixed at S$1,555,555.60 per month, with the June 2018 payment being made over three months from June to August 2018.
Suit 191 was later disrupted when SEP failed to exchange affidavits of evidence-in-chief, leading to the trial being vacated. On 21 August 2019, SEP applied for judicial management (OS 1060). RCMA, upon reviewing Peloso’s affidavit filed in OS 1060, discovered transactions that appeared to undermine the Injunction Order. Peloso withdrew S$1.5 million from the OCBC Account on 24 September 2018 and loaned it to SEEAPL, a company he controlled. Peloso also transferred substantial sums from the OCBC Account to SEP’s DBS account between November and December 2018. Further, SEP did not contest a claim by Kashish, which obtained garnishee orders against the DBS account and ultimately received the transferred funds.
RCMA then sought leave to apply for an order of committal against Peloso for contempt. Leave was granted on 24 September 2019, and Peloso was later cross-examined. The contempt proceedings thus focused on whether Peloso, as an officer and sole director, breached the Injunction Order by causing SEP to withdraw and transfer funds that were subject to the injunction, and by failing to take steps that would have protected the “Injunction Funds” from dissipation.
What Were the Key Legal Issues?
The first key issue was whether the “September 2018 Withdrawal” breached the Injunction Order. Peloso’s defence was essentially a scope argument: he contended that the Injunction Order only enjoined 70% of FSC Payments for January to June 2018 excluding April 2018, because the April 2018 payment had been withdrawn on 30 April 2018 to pay expenses and therefore could not have been enjoined. On this basis, he argued that the September 2018 withdrawal was not a breach.
The second issue concerned whether other alleged conduct amounted to contempt. RCMA pleaded multiple grounds, including the “DBS Transfers” (transfers from the OCBC Account to the DBS Account) and alleged omissions relating to Kashish’s claim and garnishee proceedings. The court had to determine whether these actions or omissions were sufficiently connected to the Injunction Order and whether they constituted disposing of, dealing with, or diminishing the value of RCMA’s 70% share of the FSC Payments subject to the injunction.
Finally, once contempt was established (at least on some grounds), the court had to address sentencing and costs. In civil contempt, the court’s approach to punishment and deterrence is closely linked to the nature of the breach, the contemnor’s conduct, and the need to uphold the authority of court orders.
How Did the Court Analyse the Issues?
On the September 2018 Withdrawal, the court rejected Peloso’s attempt to narrow the injunction’s scope. The judge found that Peloso’s reasons were not credible and were “nothing more than an afterthought”. This conclusion was not merely a matter of demeanour; it was anchored in inconsistencies across Peloso’s own affidavits in different proceedings. In Peloso’s first affidavit in OS 1060, he admitted that the September 2018 Withdrawal should not have been made and explained that he withdrew because SEEAPL needed the money urgently and the funds in the OCBC Account were the only option available at the time. That admission undermined Peloso’s later attempt to argue that the withdrawal was outside the injunction’s reach.
The court also considered Peloso’s other affidavit evidence in a separate action (Suit 200 of 2016). There, Peloso described the September 2018 Withdrawal as being done “purely out of desperation”. In court, Peloso attempted to explain that both affidavits were drafted by the same solicitor and that “calculation errors” had been made. The judge did not accept this explanation because Peloso did not adduce evidence of the alleged solicitor errors. Instead, the judge treated the explanation as unsupported and inconsistent with Peloso’s own prior admissions.
Further, the judge analysed Peloso’s attempt to attribute his earlier statements about the April 2018 withdrawal to mistaken assumptions. The court held that even if Peloso’s assumption about the April 2018 withdrawal was mistaken, it was immaterial to the central point: Peloso’s admission in OS 1060 that the September 2018 withdrawal was wrong could not be explained away by a mistaken view about April 2018. The court therefore treated Peloso’s narrative as internally inconsistent and not a genuine basis for disputing contempt.
Having rejected Peloso’s scope argument and credibility challenges, the court found that the September 2018 Withdrawal breached the Injunction Order. The reasoning reflects a common contempt principle: where an injunction is clear and the contemnor has knowledge of it, the court will not permit technical or opportunistic re-framing to defeat the order, especially where the contemnor’s own earlier statements acknowledge non-compliance.
On the second set of allegations, the court’s analysis was more granular. RCMA argued that SEP still had sufficient funds after the September 2018 withdrawal and that other balances could not be treated as “Injunction Funds” in a way that would negate the breach. Peloso attempted to count balances in the DBS trading account and SEP’s operating account as part of the funds protected by the injunction. The judge disagreed and did not accept that these balances could be treated as substituting for the specific funds restrained by the Injunction Order. This approach is consistent with the logic of injunctive relief: the court’s order is directed at preventing dissipation of specific value or assets within a defined framework, and a contemnor cannot generally neutralise non-compliance by pointing to unrelated balances.
Importantly, the court found against Peloso only on one of RCMA’s grounds. This indicates that, while the court was prepared to hold Peloso accountable for the September 2018 withdrawal, it was not persuaded that all other pleaded acts and omissions met the threshold for contempt. The judgment therefore illustrates that contempt findings require careful matching between the injunction’s terms and the alleged conduct, rather than an assumption that any financial movement after an injunction automatically constitutes contempt.
On sentencing, the judge imposed a fine of S$15,000, with a default term of 10 days’ imprisonment. The imposition of a fine with imprisonment in default is a typical structure in contempt sentencing, reflecting the dual goals of punishment and coercive deterrence. The court also ordered costs of S$16,000, reinforcing that contempt proceedings are not merely declaratory; they carry financial consequences for the contemnor.
What Was the Outcome?
The High Court found Peloso in civil contempt on only one of RCMA’s grounds: the September 2018 Withdrawal was held to breach the Injunction Order. The court therefore imposed a fine of S$15,000, with a default sentence of 10 days’ imprisonment, and ordered Peloso to pay costs amounting to S$16,000.
Both Peloso and RCMA appealed. The fact that RCMA appealed suggests it was dissatisfied with the court’s decision to find contempt on only one ground, while Peloso’s appeal indicates he challenged either the finding of contempt, the scope of the injunction as applied, or the sentence and costs.
Why Does This Case Matter?
This decision is significant for practitioners because it demonstrates how Singapore courts approach civil contempt in the context of injunctions that restrain dealing with or diminishing the value of assets. The case underscores that where a contemnor has knowledge of an injunction and is responsible for the relevant actions or omissions, the court will scrutinise credibility and consistency across affidavits and proceedings. Unsupported explanations—particularly those that appear to be afterthoughts—will not readily displace findings of breach.
From a compliance perspective, the case highlights the importance of understanding that injunctive relief is not merely a “direction” but a binding court order. Officers and directors who control corporate actions cannot assume that later financial rearrangements or arguments about “what was still available” will automatically cure or negate non-compliance. The court’s rejection of Peloso’s attempt to treat other account balances as substituting for the injunction-protected funds reflects a strict approach to the protective purpose of injunctions.
For litigators, the case also provides a cautionary lesson on pleading and proving contempt grounds. RCMA succeeded on one ground but failed on others. This indicates that contempt is not a catch-all remedy for alleged wrongdoing after an injunction; each alleged act or omission must be carefully tied to the injunction’s terms and the legal threshold for contempt. The decision therefore serves as a practical guide for structuring contempt applications and for anticipating how courts will evaluate evidence, causation, and the scope of injunctive language.
Legislation Referenced
- Rules of Court (Cap 322, R 5, 2014 Rev Ed), Order 52, Rule 2 (Statement Pursuant to Order 52, Rule 2)
Cases Cited
- [2021] SGHC 7 (the present case)
Source Documents
This article analyses [2021] SGHC 7 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.