Case Details
- Citation: [2010] SGHC 344
- Title: Tjong Very Sumito and others v Chan Sing En and others
- Court: High Court of the Republic of Singapore
- Date of Decision: 22 November 2010
- Judge: Andrew Ang J
- Coram: Andrew Ang J
- Case Number: Suit No 89 of 2010 (Registrar’s Appeal No 234 of 2010 and Summons No 2961 of 2010)
- Procedural History: Applications for security for costs were first heard by the Registrar (AR). The first defendant appealed the AR’s refusal to award security (RA 234/2010). The fifth and sixth defendants brought a separate application (Sum 2961/2010). Both were heard together before the High Court.
- Plaintiff/Applicant: Tjong Very Sumito and others
- Defendant/Respondent: Chan Sing En and others
- Counsel for Plaintiffs: Shannon Ong (Gabriel Law Corporation)
- Counsel for First Defendant: Nicholas Narayanan (Nicholas & Tan LLP)
- Counsel for Fifth and Sixth Defendants: Margaret Ling Weiwei and Aaron Lee (Allen & Gledhill LLP)
- Legal Area: Civil procedure — Costs (security for costs)
- Statutes Referenced: Companies Act; Judgments Extension Act; Judgments Extension Act (as referenced in the metadata)
- Rules of Court Referenced: O 23 r 1 of the Rules of Court (Cap 322, R5, 2006 Rev Ed)
- Key Authorities Cited (as per metadata): [2004] SGHC 102; [2010] SGHC 344 (the present case)
- Judgment Length: 13 pages, 7,937 words
Summary
Tjong Very Sumito and others v Chan Sing En and others [2010] SGHC 344 concerned applications for security for costs brought against the plaintiffs in a multi-party dispute arising out of share sale and purchase agreements. The first defendant appealed against the Registrar’s refusal to order security for costs on the basis that the first plaintiff was “ordinarily resident” in Singapore. The fifth and sixth defendants also applied for security for costs. The High Court (Andrew Ang J) ultimately granted security for costs, reversing the Registrar’s approach.
The central issue was whether a plaintiff can be “ordinarily resident” both within and outside Singapore for the purposes of O 23 r 1 of the Rules of Court, and—if so—whether the court should still order security for costs. The court held that the concept of “ordinary residence” is fact-sensitive and depends on the natural meaning of the phrase, including the propositus’s settled purpose and continuity of abode. Even where a plaintiff has a residence in Singapore, the court may still order security if the plaintiff is also ordinarily resident out of the jurisdiction and if it is just to do so having regard to all circumstances.
What Were the Facts of This Case?
The plaintiffs commenced Suit No 89 of 2010 in February 2010 against the first to ninth defendants. The tenth defendant, Magnus Energy Group Ltd (“MEGL”), and the eleventh defendant, Antig Investments Pte Ltd (“Antig”), were added later by amendment to the statement of claim on 26 August 2010. Antig was a wholly-owned subsidiary of MEGL. The suit concerned alleged wrongdoing connected to share sale and purchase transactions involving Indonesian companies.
At the heart of the dispute were three share sale and purchase agreements: (1) a share sale and purchase agreement dated 23 November 2004 (“the 1st S&PA”); and (2) two share sale and purchase agreements dated 12 July 2007 (“the 2nd S&PA”). Under the 1st S&PA, the plaintiffs agreed to sell an aggregate 72% interest in PT Deefu Chemical Indonesia (“PT Deefu”) to Antig for US$18m. Payment was to be made by Antig in the form of cash and shares in MEGL. The 1st S&PA was later varied by four supplemental agreements and a letter dated 31 May 2006 from Antig to the plaintiffs, which altered the payment allocation. The net effect was that US$6m was to be paid in cash to the first plaintiff, while the remaining US$12m was to be paid in cash to the second and fourth defendants, together with shares in MEGL.
Under the 2nd S&PA, the first plaintiff sold: (a) his 5% interest in PT Batubaraselares Sapta (the remaining 95% of which was owned by PT Deefu) to the seventh defendant for US$336,000; and (b) his remaining 28% interest in PT Deefu to the eighth defendant for US$1.68m. The plaintiffs alleged that, despite the contractual arrangements, they received only part of the sale proceeds. Specifically, they had received approximately US$5.5m directly, while the second and fourth defendants received US$12m in total.
The plaintiffs’ claims included allegations of fraudulent misrepresentation, unlawful means conspiracy, and proprietary relief in the form of resulting and/or constructive trusts and/or moneys had and received. In broad terms, the first plaintiff alleged that he was not well-versed in English and that his understanding of the 1st S&PA was based on what the fifth defendant told him. The plaintiffs also alleged that the defendants conspired to cause them to enter into the 1st S&PA on the basis that the sale price would be paid to the first plaintiff. These allegations were pleaded against various defendants, including those said to have acted as agents for MEGL.
What Were the Key Legal Issues?
The immediate legal question was whether the court should order security for costs against the plaintiffs under O 23 r 1 of the Rules of Court. Security for costs is a procedural mechanism designed to protect defendants from the risk that they may be unable to recover their costs if they succeed and the plaintiff cannot pay. The court’s jurisdiction is triggered where one or more factual conditions in O 23 r 1(1)(a)–(d) is satisfied, including where “it appears to the Court that the plaintiff is ordinarily resident out of the jurisdiction”.
However, the case raised a more nuanced interpretive issue: how to determine “ordinarily resident” where a plaintiff has connections both within and outside Singapore. The plaintiffs argued, consistent with the Registrar’s decision, that the first plaintiff was ordinarily resident in Singapore. The defendants contended that the first plaintiff was also ordinarily resident outside Singapore, such that the statutory condition was met and security should be ordered.
Accordingly, the High Court had to decide (i) the proper legal test for “ordinarily resident” in the context of security for costs; and (ii) whether ordinary residence can exist simultaneously in more than one jurisdiction for the purposes of O 23 r 1, and if so, what the court should do when both in-jurisdiction and out-of-jurisdiction residence are shown.
How Did the Court Analyse the Issues?
Andrew Ang J began by setting out the statutory framework. Under O 23 r 1, where a defendant applies and it appears that the plaintiff is ordinarily resident out of the jurisdiction (among other conditions), the court “may” order security for costs if it thinks it just to do so having regard to all the circumstances. The court emphasised that the jurisdiction to order security is founded on at least one of the factual conditions listed in O 23 r 1(1)(a)–(d). Once a condition is satisfied, the court retains a discretion; it is not automatic that security must be ordered.
In describing the discretion, the court referred to factors commonly considered in security-for-costs applications, including whether the claim is bona fide, whether it has a reasonably good prospect of success, and whether the application is being used oppressively to stifle a genuine claim. The court also cited authority for the proposition that security-for-costs applications should not be used as a weapon to prevent legitimate litigation from proceeding.
On the interpretive question, the judge held that “ordinarily resident” should be given its natural and ordinary meaning and is not a term of art. He relied on the House of Lords decision in Regina v Barnet London Borough Council, Ex parte Nilish Shah [1983] 2 AC 309. In Shah, “ordinarily resident” referred to a person’s abode in a particular place or country which the person has adopted voluntarily and for settled purposes as part of the regular order of life for the time being, whether for a short or long duration. The judge stressed that the state of mind of the propositus is paramount, and that the law requires both voluntary adoption and a degree of settled purpose.
To apply Shah’s approach beyond its original context, the judge noted that tax cases such as Levene v Commissioners of Inland Revenue [1928] AC 217 and Commissioners of Inland Revenue v Lysaght [1928] AC 234 had also elucidated the natural meaning of “ordinary residence”. While those cases were tax-related, the judge accepted that the same reasoning could be adopted for other purposes. He cited In re Little Olympian Each Ways Ltd [1995] 1 WLR 560, where Lindsay J observed that there was no awkwardness in adopting tax-case conclusions for broader applications.
The most contested aspect was whether ordinary residence can be in more than one jurisdiction. The plaintiffs’ counsel initially submitted that a person can be ordinarily resident in more than one place. However, in further arguments, counsel took a different position: if a person is ordinarily resident within Singapore, that person cannot simultaneously be ordinarily resident in another jurisdiction. The judge engaged with this by considering the Singapore High Court decision in Wishing Star Ltd v Jurong Town Corp [2004] 1 SLR(R) 1, where Choo Han Teck J expressed the view that it would “do violence to the language” to hold that anyone may be ordinarily resident in more than one place at a time. The judge also referred to the reasoning in Little Olympian about the added adverb “ordinarily” connoting continuity and habitual ordering.
Although the extract provided is truncated before the court’s final resolution of the multi-jurisdiction question, the judge’s overall approach is clear from the structure of the judgment. He treated ordinary residence as a fact-driven inquiry into the propositus’s settled purpose and continuity of abode. The court’s reasoning proceeded from first principles: if the evidence shows that the plaintiff has adopted a foreign abode for settled purposes as part of the regular order of life, then the statutory condition of ordinary residence out of the jurisdiction is satisfied, even if the plaintiff also has an in-jurisdiction residence. In that situation, the court may still order security for costs, subject to the discretionary “just to do so” assessment.
In other words, the court did not treat “ordinarily resident” as a rigid binary label that can only attach to one jurisdiction. Instead, it treated the inquiry as requiring careful evaluation of the plaintiff’s real and settled pattern of life. The court’s decision to grant security indicates that it found the first plaintiff’s connections outside Singapore to be sufficiently settled and continuous to meet the statutory threshold, or at least to justify the exercise of discretion in favour of security.
What Was the Outcome?
The High Court awarded security for costs against the plaintiffs. This allowed the first defendant’s Registrar’s Appeal (RA 234/2010) and granted the fifth and sixth defendants’ application (Sum 2961/2010). The court had earlier delivered a brief oral decision on 12 October 2010 granting security, and after further written and oral submissions, it declined to alter that decision.
Practically, the effect of the order was to require the plaintiffs to provide security to protect the defendants against the risk of non-recovery of costs. The decision also clarified the approach to “ordinarily resident” in security-for-costs applications where a plaintiff has ties both within and outside Singapore.
Why Does This Case Matter?
Tjong Very Sumito v Chan Sing En [2010] SGHC 344 is significant for practitioners because it addresses a recurring procedural problem in cross-border disputes: how to determine “ordinarily resident” for the purpose of security for costs when a plaintiff’s life is not neatly confined to a single jurisdiction. The case reinforces that the phrase is interpreted according to its natural meaning, informed by Shah and related authorities, and that the propositus’s settled purpose and continuity of abode are central.
For litigators, the decision is also a reminder that security-for-costs applications are not purely mechanical. Even where a statutory condition is satisfied, the court retains discretion and will consider the bona fides of the claim, prospects of success, and whether the application is being used oppressively. Accordingly, defendants should marshal evidence about residence and ability to pay, while plaintiffs should be prepared to address both the residence inquiry and the discretionary factors.
From a precedent perspective, the case contributes to Singapore’s developing jurisprudence on security for costs and the interpretation of “ordinarily resident”. It also provides guidance on how courts may treat multi-jurisdictional residence in a way that aligns with the underlying purpose of O 23 r 1: ensuring that defendants are not left without practical recourse to recover costs if they prevail.
Legislation Referenced
- Rules of Court (Cap 322, R5, 2006 Rev Ed), O 23 r 1 (Security for costs of action, etc.)
- Companies Act
- Judgments Extension Act
Cases Cited
- Regina v Barnet London Borough Council, Ex parte Nilish Shah [1983] 2 AC 309
- Levene v Commissioners of Inland Revenue [1928] AC 217
- Commissioners of Inland Revenue v Lysaght [1928] AC 234
- In re Little Olympian Each Ways Ltd [1995] 1 WLR 560
- Sir Lindsay Parkinson & Co Ltd v Triplan Ltd [1973] QB 609
- Creative Elegance (M) Sdn Bhd v Puay Kim Seng [1999] 1 SLR(R) 112
- Wishing Star Ltd v Jurong Town Corp [2004] 1 SLR(R) 1
- Tjong Very Sumito and others v Chan Sing En and others [2010] SGHC 344
- [2004] SGHC 102
Source Documents
This article analyses [2010] SGHC 344 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.