INDOGUNA (Singapore) Pte Ltd v De Ceulaer - [2007] WASC 169

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: INDOGUNA (SINGAPORE) PTE LTD -v- DE CEULAER [2007] WASC 169

CORAM: MASTER SANDERSON

HEARD: 10 MAY 2007

DELIVERED : 1 AUGUST 2007

FILE NO/S: FRJ 1 of 2005

MATTER :Foreign Judgments Act 1991 of the Commonwealth and regulations thereunder made relating to the Republic of Singapore
and
Judgment of the High Court of the Republic of Singapore obtained in Suit 1080 of 2003/J by Indoguna (Singapore) Pte Ltd against Leo De Ceulaer LA and dated the 21st day of April 2005

BETWEEN: INDOGUNA (SINGAPORE) PTE LTD
Judgment Creditor
AND
LEO DE CEULAER
Judgment Debtor

Catchwords:

Registration of foreign judgment - Claim by judgment debtor that shares are held by him on trust and are not available to satisfy judgment - Turns on own facts

Legislation:

Nil

Result:

Judgment debtor's application to set aside orders dismissed
Orders obtained by judgment creditor varied

Category: B

Representation:

Counsel:

Judgment Creditor : Mr P D Quinlan
Judgment Debtor : Mr M F Rynne

Solicitors:

Judgment Creditor : Mallesons Stephen Jaques
Judgment Debtor : Tottle Partners

Case(s) referred to in judgment(s):

Andco Nominees Pty Ltd v Lestato Pty Ltd (1995) 13 ACLC 835
Jones v Dunkel (1959) 101 CLR 298

MASTER SANDERSON: On 25 May 2005, on the application of the judgment creditor made by originating motion, I registered a judgment in favour of the judgment creditor against the judgment debtor under the provisions of the Foreign Judgments Act 1991 (Cth). The judgment creditor had obtained judgment against the judgment debtor in the High Court of Singapore. The judgment sum including interest was in an amount of $1,407,303.70. Various ancillary orders were made at the time the judgment was registered.
On 29 June 2005, the judgment creditor sought further orders to assist it in obtaining payment of the judgment. These orders, made on 26 July 2005, were directed at certain shares and options in a company known as Financial Resources Ltd. The shares and options were owned by the judgment debtor. Subsequent to the making of the orders, Financial Resources Ltd pointed out that they were unable to comply with the orders made because to do so would potentially breach the Corporations Act 2001 (Cth). There the matter rested for some time.
On 19 January 2007, the judgment creditor applied to vary the orders made on 26 July 2005. The judgment creditor sought relevantly to have the orders amended so as to require Financial Resources Ltd to transfer the shares and options held by the judgment debtor to the judgment creditor and, in the interim, restraining Financial Resources Ltd and the judgment debtor from dealing with the shares and options.
On 13 December 2005, the judgment debtor applied to set aside the orders made registering the judgment. That matter first came on for mention on 18 January 2006. It thereafter was adjourned intermittently for reasons which are not presently relevant. The application to set aside the registration of the order was supported by an affidavit of the judgment debtor sworn 12 January 2006. That affidavit was the only evidence filed by the judgment debtor in support of his application.
The two applications, as a matter of practicality, ran together. They came on for hearing in chambers on 30 March 2007. Counsel for the judgment debtor applied for an adjournment with a view to filing further affidavit material. I granted the adjournment and made programming orders for the filing of affidavits. I also ordered that any person on whose affidavit the judgment debtor sought to rely should be available for cross‑examination. In fact, no further affidavits were filed - either by the judgment debtor or anyone else. At the resumed hearing on 10 May 2007, the judgment debtor was made available for cross‑examination.
There was no issue between the parties as to the judgment debtor's right to apply to re‑open the orders registering the judgment. The judgment creditor conceded that as it was seeking a variation of orders, it was open to the judgment debtor to apply to have the original order set aside. That is the basis upon which the applications proceeded.
It was the judgment debtor's position that he held the shares in Financial Resources Ltd on trust for his sister and brother‑in‑law. His evidence on this point is concise and is set out in his affidavit. Rather than paraphrase this evidence, I will set it out in full:
"13.Between February 1987 and May 2003 I resided in Singapore. During this time I decided to become involved in the establishment of a restaurant business under the name of 'Chef G' which was operated through a company incorporated in Singapore called 'Chef G's Home Cooking Pte Ltd'.
14.To fund the restaurant business of Chef G I obtained a loan from my sister, Roza De Ceulaer, and brother‑in‑law, Ludo Weuts, who reside in Belgium in the sum of $500,000.00 Singapore dollars.
15.Pursuant to the loan agreement with my sister and brother‑in‑law cumulative interest was to accrue and the principal and interest was to be re‑paid after 5 years.
16.The sum of $500,000.00 Singapore dollars was advanced in 1999. Annexed hereto and marked with the letters 'LC6' are true copies of 2 receipts for the transfer of funds totalling $500,000.00 Singapore dollars.
17.This loan from my sister, Roza De Ceulaer, and brother‑in‑law, Ludo Weuts, was due to be repaid in 2004.
18.Due to the low rates of interest then being paid in the European Economic Union, my sister, Roza De Ceulaer, and brother‑in‑law, Ludo Weuts, asked me if I would continue to hold their funds and invest the money on their behalf in suitable investments in Australia, and I agreed to this request.
19.I then arranged for the transfer of the funds held for my sister, Roza De Ceulaer, and brother‑in‑law, Ludo Weuts, from Singapore to Western Australia.
20.I then opened a National Online Trading Account through a company National OnLine Trading Ltd associated with the National Australia Bank.
21.I also opened a National Cash Management Accelerator Account with the National Australia Bank.
22.I have invested the money held on behalf of my sister, Roza De Ceulaer, and brother‑in‑law, Ludo Weuts, by purchasing shares and options in the company Finance Resources Ltd on the Australian Stock Exchange."
A number of points are to be made about this evidence. First, there is nothing in the documents annexed to the judgment debtor's affidavit which in any way supports his case. Annexure "LC6" reproduces two receipts which appear to show that funds were advanced to someone by a Belgian bank. The receipts do not indicate who made the advance or to whom the advance was made. There is certainly no reference to the judgment debtor's sister and brother‑in‑law.
Second, there is no written contract evidencing the loan. Perhaps filial affection between the judgment debtor and his sister was seen as a sufficient safeguard such that no written record of the loan was required. Be that as it may, there is nothing in writing which supports the judgment debtor's position.
Thirdly, all share purchases were made in the name of the judgment debtor. There is nothing in the evidence to indicate that the judgment debtor made these share purchases as a trustee. There appears to be no reason why he could not have bought the shares in the name of his sister and brother‑in‑law.
There is one further matter which should be mentioned. In August 2005, the judgment debtor attempted to transfer the shares to his sister and brother‑in‑law. For that purpose, he prepared a transfer form. That document appears as Annexure "LC1" to the judgment debtor's affidavit. It shows as consideration for the purchase an amount of $700,000. It was the judgment creditor's contention that such a document was inconsistent with the judgment debtor's claim to hold the shares on trust for his sister and brother‑in‑law.
In cross‑examination, the judgment debtor explained the document as being necessary to transfer the shares in the most effective fashion. As I understood his evidence, it was prepared so as to avoid there being any question of the shares as a gift with consequent tax implications. Whatever may be the real reason for the production of the transfer form, in my view, for the purposes of this application, it is equivocal. I would not see it supporting the position of either the judgment creditor or the judgment debtor.
The judgment creditor's decision to cross‑examine the judgment debtor, while undoubtedly prudent in the circumstances, produced little of real value. The judgment debtor maintained his position without saying anything which added to what was in his affidavit. He answered counsel's questions directly and succinctly and he did not say anything which undermined his position. Nor was his demeanour such as to suggest that he was being less than truthful. It must be acknowledged, however, that counsel for the judgment creditor had precious little material to work with. In the end, the evidence given by the judgment debtor did nothing one way or the other to convince me of the veracity of his position.
The glaring weakness in the judgment debtor's case is his failure to produce evidence from his sister and brother‑in‑law. He was given ample opportunity to do so, but nothing was forthcoming. This is clearly a case where the rule in Jones v Dunkel (1959) 101 CLR 298 should be applied. There is an unexplained failure by the judgment debtor to call witnesses - his sister and brother‑in‑law. They could readily have confirmed the judgment debtor's version of events. In my view, it is possible to infer from the failure to call these witnesses that the uncalled evidence would not have assisted the judgment debtor's case. In other words, in this instance, the evidence of the judgment debtor's sister and brother‑in‑law would not have confirmed that funds were held on trust for them by the judgment debtor.
There are two further matters which operate in the judgment creditor's favour. The first is s 176 of the Corporations Act. Pursuant to that section, the register is prima facie evidence that the shares are in fact owned by the judgment debtor: see Andco Nominees Pty Ltd v Lestato Pty Ltd (1995) 13 ACLC 835 at 849. Further, under s 1072H(1), if the shares were non‑beneficially owned by the judgment debtor, then at the time of registration he was required to lodge a notice stating that he was not the beneficial owner of the shares. Failure to lodge such a notice is an offence under s 1311(1) of the Corporations Act. The fact that no such notice was lodged must, in my view, be taken to support the judgment creditor's claim that the shares were owned beneficially by the judgment debtor.
In all the circumstances, I am not satisfied that the shares are held by the judgment debtor on trust. I am therefore prepared to make the orders sought by the judgment creditor. I would dismiss the judgment debtor's application. I will hear the parties as to costs.