Case Summaries

Larpin, Christian Alfred and another v Kaikhushru Shiavax Nargolwala (Case Summary)

24 November 2020

Case summary

Larpin, Christian Alfred and another v Kaikhushru Shiavax Nargolwala [2020] SGHC(I) 24 Suit No 3 of 2020 (Summons No 59 of 2020)

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Decision of the Singapore International Commercial Court (Roger Giles IJ):

Outcome: The Singapore International Commercial Court dismisses an application for the plaintiff to provide security for costs.

Background

1) The defendants, the Nargolwalas, owned a villa in the Andara Resort in Phuket, Thailand (the “Villa”) through a British Virgin Islands company, Querencia Ltd. In 2017, the defendants sold the Villa to the first plaintiff, Mr Christian Alfred Larpin (“Mr Larpin”) by entering into agreements to sell and transfer the shares in Querencia Ltd to Mr Larpin’s beneficially owned company, the second plaintiff, Quo Vadis Investments Limited (“Quo Vadis”) (the “Agreements”). The plaintiffs alleged that by executing the Agreements, and by a telephone conversation, the defendants made a number of representations concerning the sale of the Villa via the Querencia shares, including that all information which would materially affect the sale of the Villa had been disclosed (the “Representations”).

2) The plaintiffs sued the defendants, alleging that they had failed to disclose material information and that the Representations were otherwise false because of dealings with another interested purchaser, Mr Solomon Lew (“Mr Lew”), culminating in Mr Lew claiming to have an agreement for the sale of the Villa and had threatening legal action to enforce it. The plaintiffs claimed that this falsified the Representations and that had they known that the representations were false, they would not have entered into the Agreements or purchased the Villa.

3) In this application, the defendants sought an order that the plaintiffs provide security for their costs under Order 23 Rule 1(1)(a) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) on the basis that the plaintiffs were ordinarily resident out of the jurisdiction and that, considering all the circumstances of the case, it was just that such an order be made.

The court’s decision

4) It was common ground that, as Mr Larpin was a Swiss citizen resident in Hong Kong and Quo Vadis was a Hong Kong company, the threshold condition for ordering security for costs had been satisfied. The Court then went on to consider various factors relevant to whether the plaintiffs ought to be ordered to provide security for costs (at [15]–[17]).

5) The Court found that although Mr Larpin was a wealthy man, he did not have any assets in Singapore, and that the shares in Querencia Ltd were Quo Vadis’ only asset (at [18]–[19]).

6) The relative strengths of the parties’ cases could be a relevant consideration in deciding whether to order security for costs. The Court, however, noted that it would not enter into a detailed consideration of the merits of the parties’ cases unless a high probability of success one way or the other could be clearly shown. Here, the Court was of the view that a full and careful analysis and consideration of the facts and law should be reserved to trial. It therefore declined to find that one side had a stronger case than the other. On that basis, it considered the strength of the parties’ respective cases to be a neutral factor (at [20]–[22]).

7) The defendants argued that the plaintiffs ought to provide security for costs as there would be inconvenience, delay and expense in enforcing any costs judgment against the plaintiffs in Hong Kong. The Court noted that a judgment of the Singapore courts could be enforced as if it was a judgment of the Hong Kong courts under the Reciprocal Enforcement of Foreign Judgments Act (Cap 265, 2001 Rev Ed) and the Reciprocal Enforcement of Foreign Judgments (Hong Kong Special Administrative Region of the People’s Republic of China) Order (S 93/1999), and that and the defendants did not identify any real or particular difficulty in enforcing a Singapore judgment in Hong Kong. The Court accepted, however, that some weight remained to be attached to the need to enforce any costs judgment in Hong Kong or elsewhere (at [23]–[26]).

8) However, the Court also considered that there was weight in the facts that Mr Larpin was a wealthy Hong Kong resident, that he was likely to have assets in Hong Kong, and that there was no evident reason for him to avoid meeting a costs order or seek to frustrate enforcement (at [27]–[28]). In the Court’s view, the circumstances were balanced in the plaintiffs’ favour, and it would not be just to order the plaintiffs to provide security for costs. The Court dismissed the defendants’ application for security for costs and ordered the defendants to pay the plaintiffs’ costs of the application, with determination of amount at a later date if the parties were unable to agree on the amount (at [29]–[30]).

This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.