THIRD EYE CAPITAL CORPORATION v PRETTY VIEW SHIPPING S.A. & 2 Ors

Facts

Third Eye Capital Corporation (TEC) obtained arbitration awards for unpaid charter hire against Pretty View Shipping SA and Pretty Urban Shipping SA, and against their parent Parakou Tankers Inc as guarantor, and obtained judgment in terms of the awards in Originating Summons No 207 of 2022. Mr Liu Por is the sole shareholder and director of Parakou Tankers and a director of the two subsidiaries. In October 2022 TEC obtained an order for examination of judgment debtor (EJD) naming Mr Liu as examinee; in October 2023 it had that order discharged, saying it had been led to believe the subsidiaries had disclosed all their assets and had too little to pay.

In January 2025 TEC applied again, explaining that International Seaways Inc, with which it had a confidential settlement, had told it of a payment of US$339,578.71 received from the two subsidiaries on 6 August 2024. A second EJD order was made on 31 January 2025 and served on 5 February 2025 via e-Litigation on the defendants' solicitors on record, LVM Law Chambers LLC, not personally. The defendants applied in Summons No 650 of 2025 to set aside the service and the order, or to narrow the questions allowed. They said service was invalid, and that TEC had not disclosed that the payment notice also named a third party, Parakou Shipping Limited; Mr Liu said the payment was made entirely by a third party. The application was heard by an Assistant Registrar, whose decision has been appealed.

Issues

1. Whether service of the second EJD order by e-Litigation on the defendants' solicitors was valid service on the defendants and on Mr Liu.
2. Whether a judgment creditor seeking a second EJD order against the same examinee must show a change in circumstances, and whether TEC breached its duty of full and frank disclosure.
3. Whether the order should be varied to limit the questions, and whether Mr Liu should personally pay the costs.

Holding

The Assistant Registrar dismissed the application, holding that the order had been properly served and validly obtained, and left objections on the scope of questioning to the Registrar conducting the examination. Mr Liu was ordered personally to pay TEC costs of $16,000 and disbursements of $2,341.67.

Reasoning

The Assistant Registrar first declined TEC's requests to refuse to hear the application because of unpaid costs and alleged contempt, preferring the defendants' right to be heard. On service, an EJD order must be served personally unless the party agrees to electronic service, which can be implied where a reasonable person in the serving solicitors' position would conclude the other solicitors were instructed to accept service. The firm was on record for the defendants and had written that it acted for them without qualification. As for Mr Liu, the firm had argued on his behalf against a personal costs order in an earlier application, counsel had said in court that they did act for him in his personal capacity, and the firm's first letter after service sought more time for him to comply. Service on both was therefore valid. Even if irregular, the requirement would have been dispensed with, since a party seeking time to comply cannot also complain of service.

Rejecting TEC's argument that EJD orders are available as of right, the Assistant Registrar held that a judgment creditor seeking a further examination after an earlier one ended must show new or changed circumstances making it likely that more information can be obtained, without having to prove the debtor's finances actually changed. The subsidiaries' involvement in the payment met that test. Whether a third party also paid, and in what share, went to matters for the examination itself, not to whether the order should be made; it was not a fact whose omission breached the duty of disclosure, and TEC need not have made inquiries about it. Indeed, a third party paying the subsidiaries' debt would itself raise questions.

Objections to particular questions were for the examining Registrar. On costs, Mr Liu was closely connected to the application, controlled it, was the only person who stood to benefit, and caused the costs; the application did not serve the apparently impecunious defendants' interests, so the caution against non-party costs orders did not apply.

From the judgment