Aero-Gate Pte Ltd v Engen Marine Engineering Pte Ltd: Contempt of Court & Mareva Injunction Breach
In [2018] SGHC 267, Aero-Gate Pte Ltd sued Engen Marine Engineering Pte Ltd for breach of contract. Aero-Gate obtained a Mareva injunction against Engen Marine. Aero-Gate then applied to the High Court of Singapore to commit Engen Marine's director, Mdm Selvarajoo Mageswari, and general manager, Mr Ramasamy Tanabalan, for contempt of court, alleging breaches of the Mareva injunction. The High Court, presided over by Justice Vinodh Coomaraswamy, found Mdm Mageswari in contempt on three of seven charges and Mr Tanabalan in contempt on one of seven charges, declining to impose imprisonment and instead ordering fines. Aero-Gate's appeal against the decision on liability and sentencing was noted, while the respondents did not appeal.
1. Case Overview
1.1 Court
High Court1.2 Outcome
The court declined to commit either respondent to prison. Mdm Mageswari was ordered to pay a fine of $25,000, and Mr Tanabalan was ordered to pay a fine of $50,000.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Aero-Gate sought to commit Engen Marine's director and general manager to prison for breaching a Mareva injunction. The court found both in contempt but imposed fines instead of imprisonment.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Aero-Gate Pte Ltd | Plaintiff | Corporation | Partial Success | Partial | |
| Engen Marine Engineering Pte Ltd | Defendant | Corporation | Fines Ordered | Lost | |
| Selvarajoo Mageswari | Respondent | Individual | Fine Ordered | Lost | |
| Ramasamy Tanabalan | Respondent | Individual | Fine Ordered | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vinodh Coomaraswamy | Judge | Yes |
4. Counsels
4. Facts
- Plaintiff obtained a mareva injunction against the defendant, restraining disposal of assets up to $1.5m.
- Defendant was required to disclose all assets worldwide and their value.
- Defendant filed an affidavit of assets listing assets worth $4.4m.
- Defendant moved some assets to different locations and informed the plaintiff.
- Some assets stored with Singatac and Transvictory were disposed of due to unpaid rent/debt.
- Plaintiff alleged that the respondents intentionally provided inaccurate asset values.
- Plaintiff sought to commit the respondents to prison for contempt of court.
5. Formal Citations
- Aero-Gate Pte Ltd v Engen Marine Engineering Pte Ltd, Suit No 373 of 2012, Summons No 2151 of 2016, Summons Nos 235 and 236 of 2017, [2018] SGHC 267
6. Timeline
| Date | Event |
|---|---|
| Plaintiff entered into a contract with the defendant. | |
| Plaintiff issued the writ against the defendant. | |
| Plaintiff applied ex parte for and obtained a mareva injunction against the defendant. | |
| Defendant filed an affidavit of assets. | |
| Mareva injunction was amended. | |
| Trial before judge in 2012 and 2013. | |
| Plaintiff's representatives visited the defendant’s premises with the sheriff to inspect the assets. | |
| Judgment entered for the plaintiff on its claim and dismissed the defendant’s counterclaim. | |
| Defendant’s landlord gave the defendant notice to vacate its business premises. | |
| Sheriff seized 19 of the defendant’s assets under a writ of seizure and sale. | |
| Plaintiff’s valuer valued 19 assets. | |
| Defendant vacated premises and moved assets. | |
| Mdm Mageswari issued a letter of instructions to Standard Chartered Bank to close the SCB SGD account. | |
| Defendant wrote to the plaintiff to inform the plaintiff of the new location of 36 out of the 70 assets. | |
| Plaintiff inspected the Singatac assets. | |
| Defendant sent two further letters relating to the location of the Transvictory, Singatac and Soon Lee Street assets. | |
| Sheriff seized two engines at the Singatac premises under a writ of seizure and sale. | |
| Damages were assessed at just over US$606,000. | |
| Plaintiff again levied execution on the judgment. | |
| Mr Tanabalan visited both Transvictory’s premises and Singatac’s premises and discovered that all of the Transvictory assets and Singatac assets had been disposed of. | |
| Mdm Mageswari lodged a police report. | |
| Plaintiff’s solicitors asked the defendant for the current location of all assets frozen by the mareva injunction. | |
| Defendant replied to say that the defendant had not changed the location of the assets frozen by the mareva injunction since the last update. | |
| Plaintiff put Mdm Mageswari on notice that it intended to commence proceedings against her for contempt of court. | |
| Court granted the plaintiff leave to commence the first of the three committal applications. | |
| Mr Tanabalan affirmed an affidavit stating that the Soon Lee Street assets remained at the Soon Lee Street premises. | |
| Cross-examination took place on one hearing day. | |
| Mdm Mageswari affirmed an affidavit to the same effect. | |
| Court granted the plaintiff leave to commence the second of the three committal applications. | |
| Plaintiff applied for and obtained a writ of seizure and sale in respect of the Soon Lee Street assets. | |
| Court granted the plaintiff leave to commence the third of the three committal applications. | |
| Plaintiff found only seven of the Soon Lee Street assets at the Soon Lee Street premises. | |
| Plaintiff appointed Exaco to value the seven assets seized at the Soon Lee Street premises. | |
| According to the Exaco report, many of these assets had been misdescribed in the defendant’s March 2014 letter and were worth much less than the value stated in that letter. | |
| Exaco valued these seven assets at $15,600. | |
| These seven assets were eventually sold at auction for $2,100. | |
| Judgment Date |
7. Legal Issues
- Breach of Mareva Injunction
- Outcome: The court found that Mdm Mageswari and Mr Tanabalan had breached the Mareva injunction.
- Category: Substantive
- Sub-Issues:
- Dissipation of assets
- Failure to disclose assets
- Dealing with assets subject to injunction
- Contempt of Court
- Outcome: The court found Mdm Mageswari and Mr Tanabalan in contempt of court but declined to impose imprisonment.
- Category: Substantive
- Sub-Issues:
- Disobedience of court order
- Impeding administration of justice
- Standard of Proof for Contempt
- Outcome: The court reiterated that the standard of proof for contempt is beyond a reasonable doubt.
- Category: Procedural
8. Remedies Sought
- Committal to Prison
9. Cause of Actions
- Contempt of Court
- Breach of Injunction
10. Practice Areas
- Civil Contempt
- Mareva Injunctions
11. Industries
- Engineering
- Oil and Gas
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Customs and Excise Commissioners v Barclays Bank plc | N/A | Yes | [2007] 1 AC 181 | N/A | Cited for the purpose of a mareva injunction is to restrain a defendant from dissipating his assets so as to render nugatory, wholly or in part, any judgment which a plaintiff might eventually obtain against it in the action |
| Lee Shieh-Peen Clement and another v Ho Chin Nguang and others | N/A | Yes | [2010] 4 SLR 801 | Singapore | Cited for the principle that a party against whom a mareva injunction is issued must obey both the letter and the spirit of the injunction |
| Pertamina Energy Trading Ltd v Karaha Bodas Co LLC and others | N/A | Yes | [2007] 2 SLR(R) 518 | Singapore | Cited for the relevant standard of knowledge and intention is simply that: (i) the alleged contemnor had notice of the injunction; and (ii) he intended to do an act or to omit to act which is in fact a breach of the injunction. |
| Maruti Shipping Pte Ltd v Tay Sien Djim and others | High Court | Yes | [2014] SGHC 227 | Singapore | Cited for the relevant standard of knowledge and intention is simply that: (i) the alleged contemnor had notice of the injunction; and (ii) he intended to do an act or to omit to act which is in fact a breach of the injunction. |
| Carey v Laiken | N/A | Yes | Carey v Laiken (2015) SCC 17 | N/A | Cited for the relevant standard of knowledge and intention is simply that: (i) the alleged contemnor had notice of the injunction; and (ii) he intended to do an act or to omit to act which is in fact a breach of the injunction. |
| Attorney General v Punch Ltd and another | N/A | No | [2003] 1 AC 1046 | N/A | Cited for the relevant standard of knowledge or intention is that the third party: (i) had notice of the injunction; (ii) does an act which the injunction restrains the party against whom it is directed from doing; and (iii) intended by doing those acts to impede or prejudice the administration of justice |
| STX Corp v Jason Surjana Tanuwidjaja and others | N/A | Yes | [2014] 2 SLR 1261 | Singapore | Cited for the standard of proof to which the applicant must make out his case against the alleged contemnor is the criminal standard, ie proof beyond reasonable doubt |
| Mok Kah Hong v Zheng Zhuan Yao | Court of Appeal | Yes | [2016] 3 SLR 1 | Singapore | Cited for the principle that an O 52 r 2(2) statement is similar in purpose to a criminal charge and is a procedural safeguard adopted to ensure that a person accused of contempt of court knows the case that the applicant makes against him. |
| Tay Kar Oon v Tahir | N/A | Yes | [2017] 2 SLR 342 | Singapore | Cited for the principle that nothing in O 52 is intended to prejudice my power to make an order of committal of my own motion if I am satisfied that it is warranted |
| Daltel Europe Limited and others v Hassan Ali Makki and others | N/A | Yes | [2005] EWHC 749 (Ch) | N/A | Cited for the principle that where an alleged contemnor argues that he is permitted to deal with assets subject to a mareva injunction because the defendant has sufficient other assets to meet the financial threshold in the mareva injunction, the burden lies on the alleged contemnor to show that that is indeed the case |
| Summit Holdings Ltd and another v Business Software Alliance | N/A | Yes | [1999] 2 SLR(R) 592 | Singapore | Cited for the principle that the fact that a contemnor acted on legal advice goes only to mitigation and not to liability |
| OCM Opportunities Fund II, LP and others v Burhan Uray (alias Wong Ming Kiong) and others | High Court | Yes | [2005] 3 SLR(R) 60 | Singapore | That case involved multiple breaches of a mareva injunction, including failures to disclose assets and failures to attend court for cross-examination pursuant to orders and directions given. The court found that the contemnors had deliberately disobeyed the orders with no good excuse, under a single-minded objective of avoiding disclosure of their assets. There was clear defiance of the authority of the court. In the circumstances, the court ordered an imprisonment term of six months for each contemnor. |
| Toyota Tsusho (Malaysia) Sdn Bhd v Foo Tseh Wan and others | High Court | Yes | [2017] 4 SLR 1215 | Singapore | That case involved the breach of disclosure obligations under a mareva injunction. The contemnor persistently refused to disclose his assets and instead filed affidavits of assets and means which lacked any credibility. The High Court found that the contemnor had acted in flagrant disregard of the mareva injunction, and sentenced him to three months’ imprisonment. |
| Aero-Gate Pte Ltd v Engen Marine Engineering Pte Ltd | N/A | Yes | [2013] 4 SLR 409 | Singapore | Reference to the initial judgment in the case. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court O 41 r 5(2) |
| Rules of Court O 45 r 5(1)(ii) |
| Rules of Court O 45 r 7(4)(b) |
| Rules of Court O 52 r 2(2) |
| Rules of Court O 52 r 4 |
| Rules of Court O 52 r 5(3) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 148 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Mareva Injunction
- Contempt of Court
- Affidavit of Assets
- Dissipation of Assets
- Disclosure Obligation
- Committal Applications
- Standard of Proof
- Reasonable Doubt
- Third Party Liability
- Shadow Director
15.2 Keywords
- Contempt of Court
- Mareva Injunction
- Civil Procedure
- Injunctions
- Singapore
- High Court
- Civil Litigation
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Contempt of Court | 95 |
| Civil Contempt | 90 |
| Injunctions | 70 |
| Sentencing | 60 |
| Litigation | 30 |
16. Subjects
- Contempt of Court
- Civil Procedure
- Injunctions
- Mareva Injunctions