Westacre Investments Inc v Yugoimport SDPR: Garnishee Proceedings & Beneficial Ownership of Funds
Westacre Investments Inc (“Westacre”) sought to enforce an English judgment against The State-Owned Company Yugoimport SDPR (“Yugoimport”) by garnishing funds held in Deuteron (Asia) Pte Ltd’s (“Deuteron”) bank account. Yugoimport claimed the funds were held in trust for Teleoptik-Ziroskopi, Zrak-Teslic and Cajavec. The High Court of Singapore found that no trust existed and the funds belonged to Yugoimport, allowing Westacre's application and making the garnishee orders final.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Summons 5282 allowed; Summons 5377 dismissed; provisional garnishee orders made final.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Garnishee proceedings to enforce an English judgment. The court determined the beneficial ownership of funds in Deuteron (Asia) Pte Ltd's bank account.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Westacre Investments Inc | Judgment Creditor | Corporation | Judgment for Judgment Creditor | Won | Khoo Boo Jin, Tan Hsuan Boon |
| The State-Owned Company Yugoimport SDPR | Judgment Debtor, Garnishee | Corporation | Judgment against Judgment Debtor | Lost | Gabriel Peter, Kelvin Tan |
| Deuteron (Asia) Pte Ltd | Garnishee | Corporation | Neutral | Neutral | Lim Ai Min |
| Teleoptik-Ziroskopi | Other | Corporation | Claim Dismissed | Lost | Suresh Damodara |
| Zrak-Teslic | Other | Corporation | Claim Dismissed | Lost | Suresh Damodara |
| Cajavec | Other | Corporation | Claim Dismissed | Lost | Suresh Damodara |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Choo Han Teck | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Khoo Boo Jin | Wee Swee Teow & Co |
| Tan Hsuan Boon | Wee Swee Teow & Co |
| Gabriel Peter | Gabriel Law Corporation |
| Kelvin Tan | Gabriel Law Corporation |
| Lim Ai Min | Allen & Gledhill LLP |
| Suresh Damodara | Damodara Hazra LLP |
4. Facts
- Westacre obtained an English judgment against Yugoimport for over £56 million.
- Westacre sought to enforce the judgment by garnishing Yugoimport's funds in Deuteron's Singapore bank account.
- Yugoimport claimed the funds were held in trust for Teleoptik-Ziroskopi, Zrak-Teslic, and Cajavec.
- The funds originated from a contract to supply military equipment to a government.
- Deuteron's financial statements from 1998 to 2008 stated the funds belonged wholly and exclusively to Yugoimport.
- A unanimous shareholder resolution of Deuteron confirmed the funds belonged to Yugoimport.
- The court found inconsistencies in Yugoimport's arguments regarding the trust.
5. Formal Citations
- Westacre Investments Inc v The State-Owned Company Yugoimport SDPR (Deuteron (Asia) Pte Ltd, garnishee) and others, Originating Summons No 1311 of 2004, [2011] SGHC 123
6. Timeline
| Date | Event |
|---|---|
| Funds deposited in Garnishee's account. | |
| English High Court issued judgment in favor of Judgment Creditor. | |
| Judgment Creditor discovered Funds held for Judgment Debtor in Garnishee’s account. | |
| English Judgment registered in Singapore. | |
| Funds enjoined by ex parte mareva injunction. | |
| Garnishee proceedings commenced against the Bank and the Garnishee. | |
| Court issued garnishee orders to show cause. | |
| Judgment Debtor applied to set aside the registration of the English Judgment in Singapore. | |
| Court of Appeal directed Judgment Creditor to refer to English Court to determine enforceability of English Judgment. | |
| English Reference Proceedings - English High Court ruled in favor of Judgment Creditor. | |
| Court of Appeal denied Judgment Debtor’s application to set aside registration of English Judgment. | |
| Judgment Debtor and Garnishee filed affidavits alleging Funds belonged to Other Parties. | |
| Court allowed inspection of two documents. | |
| Court dismissed Summonses 4431, 4846 and 5736 and allowed the garnishee proceedings to be summarily determined. | |
| Court ordered parties to file further submissions regarding the governing law for the trust. | |
| Court dismissed Summonses 5513 and 5763. | |
| Judgment Reserved |
7. Legal Issues
- Beneficial Ownership of Funds
- Outcome: The court held that the funds belonged to the Judgment Debtor and were not held in trust for the Other Parties.
- Category: Substantive
- Related Cases:
- (1881) 8 QBD 319
- Enforceability of Foreign Judgment
- Outcome: The court enforced the English Judgment in Singapore.
- Category: Procedural
- Existence of Trust
- Outcome: The court held that no trust was created under Singapore law.
- Category: Substantive
- Related Cases:
- [2004] 4 SLR(R) 216
- [2001] 3 SLR(R) 119
- Proper Law of Contract
- Outcome: The court determined that the Supply Contract and Commission Agreement were governed by Indian law, while the Pre-Protocol and Protocol were governed by Singapore law.
- Category: Substantive
- Related Cases:
- [2008] 2 SLR(R) 491
- [2011] 1 SLR 391
- Agency Relationship
- Outcome: The court held that the Judgment Debtor did not act as the Other Parties’ agent at the time of the Supply Contract.
- Category: Substantive
- Related Cases:
- AIR 1969 Cal 496
- AIR 1975 SC 1564
8. Remedies Sought
- Garnishee Order
- Monetary Recovery
9. Cause of Actions
- Enforcement of Foreign Judgment
- Garnishee Proceedings
10. Practice Areas
- Commercial Litigation
- International Litigation
- Enforcement of Foreign Judgments
11. Industries
- Defense
- Banking
- Legal
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Roberts v Death | Queen's Bench Division | Yes | (1881) 8 QBD 319 | England and Wales | Cited for the principle that if a trust is found to exist, the provisional garnishee order cannot be made final since the beneficial owner of the Funds is not the Judgment Debtor. |
| Westacre Investments Inc v The State-Owned Company Yugoimport SDPR (also known as Jugoimport-SDPR) | Court of Appeal | No | [2009] 2 SLR(R) 166 | Singapore | Cited for the difficulty of enforcing a judgment debt against an uncooperative judgment debtor. |
| Westacre Investments Inc v The State-Owned Company Yugoimport SDPR | English High Court | Yes | [2008] EWHC 801 (Comm) | England and Wales | Cited as the English Reference Proceedings where the Court ruled that the English Judgment remained enforceable in England. |
| Leads Engineering (s) Pte Ltd v Chin Choon Co (Pte) Ltd | High Court | Yes | [2009] SGHC 53 | Singapore | Cited for the principle that the burden of showing cause why a provisional garnishee order should not be made final is on the garnishee. |
| Commercial Bank of Kuwait S.A.K. v Nair | High Court | Yes | [1993] 3 SLR(R) 281 | Singapore | Cited for the principle that the provisional garnishee order will not be made final if it would be inequitable or unfair. |
| Pacific Recreation Pte Ltd v SY Technology Inc and another appeal | Court of Appeal | Yes | [2008] 2 SLR(R) 491 | Singapore | Cited for the three-stage approach to determine the governing law of a contract. |
| JIO Minerals FZC and others v Mineral Enterprises | Court of Appeal | Yes | [2011] 1 SLR 391 | Singapore | Cited for the proposition that it is possible to infer that the parties intended that a contract be governed by the same law that governs a closely related contract. |
| Wu Yang Construction Group Ltd v Zhejiang Jinyi Group Co, Ltd and others | High Court | Yes | [2006] 4 SLR(R) 451 | Singapore | Cited for the principle that the proof of foreign law in a domestic court is a question of fact. |
| Sakthivel Punithavathi v PP | High Court | Yes | [2007] 2 SLR(R) 983 | Singapore | Cited for the principle that where there is conflicting evidence between experts, the consistency and logic of the preferred evidence is paramount. |
| Modi Vanaspati Manufacturing Company v Katihar Jute Mills (Pvt) Ltd | Calcutta High Court | Yes | AIR 1969 Cal 496 | India | Cited for the principle that the fact the parties entered into subsequent contracts indicates there was no agency. |
| Serajuddin and Ors v The State of Orissa | Supreme Court | Yes | AIR 1975 SC 1564 | India | Cited for the principle that unless a principal-agent relationship can be specifically proven, the mere fact that a state owned company is used as a channelising agent to enter into transactions will not be sufficient to establish agency between the parties. |
| K Gopinathan Nair v State of Kerala | Supreme Court | Yes | AIR 1997 SC 1925 | India | Cited for the principle that unless a principal-agent relationship can be specifically proven, the mere fact that a state owned company is used as a channelising agent to enter into transactions will not be sufficient to establish agency between the parties. |
| Joshua Steven v Joshua Deborah Steven and others | High Court | Yes | [2004] 4 SLR(R) 216 | Singapore | Cited for the principle that there needs to be three certainties to form a trust: (1)certainty of intention to create a trust, (2)certainty of subject matter of trust, and (3)certainty of objects of trust. |
| Hinckley Singapore Trading Pte Ltd v Sogo Department Stores (S) Pte Ltd (under judicial management) | High Court | Yes | [2001] 3 SLR(R) 119 | Singapore | Cited for the principle that in light of the terms of the Pre-Protocol and Protocol, there was an intention to create a trust. |
| Re Lewis’s of Leicester Ltd | Unknown | Yes | [1995] 1 BCLC 428 | England and Wales | Cited for the principle that a trust was found despite the money being deposited into a general bank account because there was an express stipulation of a trust in the contract and the trust monies could therefore be traced by equitable tracing rules. |
| Re Fleet Disposal Services Ltd | Unknown | Yes | [1995] 1 BCLC 345 | England and Wales | Cited for the principle that the proceeds of the principal’s goods were held to be trust monies because there was a designated account for the proceeds of sale and the credit period allowed for the agent to pay the principal was relatively short (five days). |
| Deutsche Schachtbau-Und Tiefbohr-Gesellschaft M.B.H. v Shell International Petroleum Co Ltd (Trading as Shell International Trading Co) | House of Lords | Yes | [1990] 1 AC 295 | England and Wales | Cited for the principle that a claim that a third party was entitled to the beneficial ownership of the debt ought to be considered and decided upon an inquiry under the procedure established by Order 49, Rule 6 of the UK Rules of Supreme Court 1965. |
| Eng Mee Yong and others v Letchumanan s/o Velayutham | Privy Council | Yes | [1979] 2 MLJ 212 | Malaysia | Cited for the principle that a judge is not bound to accept uncritically every statement on an affidavit as raising a dispute of fact which calls for further investigation. |
| Abdul Salam Asanaru Pillai (trading as South Kerala Cashew Exporters) v Nomanbhoy & Sons Pte Ltd | High Court | Yes | [2007] 2 SLR(R) 856 | Singapore | Cited for the principle that proceedings at the summary stage are not to be conducted as a trial on affidavits, but that does not mean anything set out in the affidavits is to be accepted without rational consideration to determine if there is a fair or reasonable probability of a real defence. |
| Pritchard v Westminster Bank | Unknown | Yes | [1969] 1 WLR 547 | England and Wales | Cited for the principle that the Court will generally be reluctant to make the order final if to do so would unjustifiably give the judgment creditor priority over the other creditors, especially if the judgment debtor is insolvent. |
| Arab Bank Ltd v Ng Soo Kin and others (Bank of Montreal, third party) | High Court | Yes | [1988] 2 SLR(R) 1 | Singapore | Cited for the principle that the Court will generally be reluctant to make the order final if to do so would unjustifiably give the judgment creditor priority over the other creditors, especially if the judgment debtor is insolvent. |
| Robert Petroleum Ltd v Bernard Kenny Ltd (in liquidation) | Unknown | No | [1982] 1 All ER 685 | England and Wales | Cited for the principle that the provisional garnishee order will not be made final if it would be inequitable or unfair. |
13. Applicable Rules
| Rule Name |
|---|
| O 49 r 5 of the Rules of Court |
| O 49 r 6(2) of the Rules of Court |
| O 49, r 10 of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) | Singapore |
| Rules of Court (Cap 322, R5, 2006 Rev Ed) | Singapore |
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Garnishee Proceedings
- Beneficial Ownership
- Trust
- English Judgment
- Mareva Injunction
- Financial Statements
- Shareholder Resolution
- Supply Contract
- Commission Agreement
- Pre-Protocol
- Protocol
15.2 Keywords
- garnishee
- judgment
- trust
- beneficial ownership
- Singapore
- Yugoimport
- Westacre
- Deuteron
16. Subjects
- Civil Procedure
- Trust Law
- Conflict of Laws
- Agency Law
- Contract Law
- Enforcement of Judgments
17. Areas of Law
- Civil Procedure
- Garnishee Proceedings
- Trust Law
- Conflict of Laws
- Agency Law
- Contract Law