Wellmix Organics (International)
Pte Ltd v Lau Yu Man [2006] SGCA 11, [2006] 2 SLR 525
As a result of repeated failures by the respondent to file his affidavits of evidence-in-chief (“AEICs”) on time, the Assistant Registrar made an unless order that if the AEICs were not filed and served by the deadline, judgment would be entered for the appellant. The respondent failed to comply with the unless order, and interlocutory judgment was entered in favour of the appellant, with damages to be assessed. The respondent’s application to set aside the judgment was unsuccessful on appeal (the “15 July order”). The respondent then wrote in for further arguments. After hearing further arguments, the Judge set aside the interlocutory judgment and restored the matter for trial (“the 23 September order”). The appellant appealed to the Court of Appeal, but the respondent applied to strike out the appeal. The issues before the Court were: (i) whether the 15 July order was a final order which precluded the Judge from hearing further arguments; and (b) whether the 23 September order was an order setting aside unconditionally a default judgment, and therefore precluded from appeal by s 34(1)(a) of the Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) (“SCJA”).
In deciding whether the 15 July order was an interlocutory or final order, the Court of Appeal reaffirmed the Bozson test. The key words in the Bozson test were “finally”, “disposes” and “rights”. The word “finally” meant either “the last” or “completely”. On this basis, an interlocutory judgment with damages to be assessed was not an order which finally disposed of the rights of the parties in the action. This was because in such situations where damages were also claimed, a determination of liability was only a partial determination of rights, since damages were really what the plaintiff was seeking. Therefore, the 15 July order was an interlocutory judgment for which the Judge could hear further arguments.
On the second issue, the Court found that there was nothing in s 34(1)(a) of the SCJA which suggested that the “default judgment” referred to in the provision was limited only to a judgment obtained by default in complying with the Rules of Court and not default in complying with an order of court. “Default” simply meant non-compliance with something. The 23 September order having set aside unconditionally a default judgment, the present case fell squarely within s 34(1)(a) and the notice of appeal was struck out.
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Cheng-Wong Mei Ling Theresa v Oei
Hong Leong [2006] SGCA 12, [2006] 2 SLR 637
In the High Court, the appellant had unsuccessfully applied for a declaration that a property she intended to buy enjoyed an implied easement of way through an adjoining property. One of the grounds upon which the trial Judge dismissed the appellant’s application was not raised by counsel or the trial Judge at the hearing, but appeared for the first time in the judgment. The appellant applied to admit new evidence regarding the additional point in the appeal.
The Court of Appeal admitted the additional evidence even though it could have been obtained with reasonable diligence before the trial Judge. Had the point been brought up during the hearing, the appellant could easily have brought in the new evidence to seal the point. While a trial Judge could take a new point which the parties had not raised when deciding a case, he should give notice of it to the parties, especially where it was of a substantive nature, so that they could have the opportunity to address it. In this case, the parties did not receive any notice of the new point before judgment was delivered. The Court held that in these very exceptional circumstances, the strict rule in Ladd
v Marshall should not be applied rigidly.
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Neo Corp Pte Ltd (in liquidation) v Neocorp
Innovations Pte Ltd [2006] SGCA 15, [2006] 2 SLR 717
In this case, the Court of Appeal upheld the High Court’s decision that proceedings instituted by the judicial managers of a company under s 227T of the Companies Act (Cap 50, 1994 Rev Ed) could not be continued by the liquidators when judicial management was followed by a winding up order before the proceedings in question were adjudicated upon.
Under s 227T of the Companies Act, transactions entered into by the company with a third party that were tainted by unfair preference or were at an undervalue “shall … be void as against the judicial manager”. It was clear from the words of the provision that the right to void such transactions was personal to the judicial manager. Only the judicial manager could institute and pursue an action invoking s 227T of the Companies Act.
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Koh Zhan Quan Tony v Public
Prosecutor and Another Motion [2006] SGCA 17, [2006] 2 SLR 830
The applicants were originally charged with murder but were convicted by the High Court of the lesser charge of robbery with hurt. On appeal by the Prosecution to the Court of Appeal, the applicants were convicted of the original charge of murder and sentenced to death. The applicants filed motions to the Court of Appeal, arguing that their conviction on a lesser charge in the High Court had not amounted to an acquittal and, therefore, the Prosecution’s appeal fell outside the language and scope of s 44(3) of the Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) (“SCJA”). The Prosecution opposed the motions, arguing that the Court of Appeal had no jurisdiction to hear them as it was functus officio, and that there was no basis for the motions in any event.
The Court of Appeal held that it had the jurisdiction to entertain the motions under s 29A of the SCJA. Although the Court had earlier heard and allowed the Prosecution’s appeal, no ruling had been handed down insofar as the issue of the Court’s jurisdiction to hear the appeal was concerned. The Court was thus not functus
officio in so far as this particular issue was concerned. However, the Court stressed that it would have been functus
officio if the motions had involved an attempt to re-litigate the substantive merits of the case.
Having found that it had jurisdiction to entertain the motions, the Court of Appeal ultimately dismissed them. Given the context of the hearing before the High Court and the Court of Appeal, the Court of Appeal found it clear that applicants must necessarily have been acquitted of the original charge of murder although the High Court convicted them of the lesser charge of robbery with hurt. Therefore, the circumstances fell squarely within the ambit of s 44(3) of the SCJA.
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Jet Holding Ltd and Others v Cooper
Cameron (Singapore) Pte Ltd and Another [2006] SGCA 20, [2006] 3 SLR
769
The proceedings arose from the fracture of a slip joint on board a vessel (“the Vessel”), which was owned by the first plaintiff (“JHL”) and chartered by the second plaintiff (“JSL”). The Vessel’s manager had contracted with the first defendant (“Cameron”) on JSL’s behalf to refurbish and repair the two original slip joints on board the Vessel. Cameron had then, in turn, subcontracted with the second defendant (“Stork”) for it to create a new slip joint out of certain unused parts of the two original joints. When the slip joint refurbished by Stork fractured, the plaintiffs commenced a suit against Cameron for breach of contract and against both Cameron and Stork for negligent breach of duty.
The High Court held that Cameron and Stork were concurrent tortfeasors, and ordered Stork to indemnify Cameron for 50% of JHL’s and JSL’s total damages. However, the Judge held that the plaintiffs had only managed to prove a small part of their alleged loss, as the bulk of their documents on quantum (“the Damages Bundle”) were not admitted into evidence. The plaintiffs appealed. Cameron and Stork also appealed. Cameron averred, inter alia, that as Stork was in breach of their refurbishment contract, Stork was liable to Cameron for damages which amounted to Cameron’s entire liability to the plaintiffs.
The Court of Appeal agreed with the Judge’s decision not to admit the Damages Bundle into evidence. There was no evidence that the parties involved had agreed to dispense with formal proof of the claims for damages. Further, the contents of documents exhibited to an affidavit would only be admitted into evidence as authentic if they satisfied the relevant criteria in the Evidence Act (Cap 97, 1997 Rev Ed) or fell within the established exceptions. Automatically admitting such documents would enable parties to circumvent the rule that only the best evidence is admitted for the consideration of the Court. Additionally, the plaintiffs had failed to call the makers of the documents in the Damages Bundle to the stand, and had not been able to bring themselves within the exceptions to the rule against hearsay. The Court made clear that it was a question of fact whether or not there were grounds for holding that the relevant evidence could not be procured without unreasonable delay or expense within the meaning of s 33 of the Evidence Act.
On the facts, the Court also held that Cameron was entitled to claim an indemnity from Stork, which had breached its contractual duty in failing to conduct the inspection of the slip joint proficiently. However, the Court did not go as far as to hold Stork fully liable for Cameron’s liability to the plaintiffs. By applying the doctrine of contributory negligence, the Court decided that Cameron had been 50% liable for its own loss and therefore could only claim an indemnity from Stork for 50% of its liability to the plaintiffs. According to the Court, the doctrine of contributory negligence would be available as a defence in contract where the defendant’s liability in contract was the same as his or her liability in the tort of negligence, independent of the existence of any contract. This doctrine was applicable to the contractual relationship between Cameron and Stork because Stork owed concurrent duties to Cameron in both contract and tort.
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Sim Yong Kim v Evenstar
Investments Pte Ltd [2006] SGCA 23, [2006] 3 SLR 827
The appellant filed an application to wind up the respondent company under s 254(1)(i) of the Companies Act (Cap 50, 1994 Rev Ed) on the ground that it would be just and equitable to do so. One of the issues considered by the Court of Appeal was the relationship between the “just and equitable” ground for winding up under s 254(1)(i) of the Companies Act and the cause of action in “oppression” under s 216 of the same Act.
According to the Court, ss 254(1)(i) and 216 each had their own respective spheres of application and should be treated as prescribing different grounds to warrant the winding up of a company. The “just and equitable” jurisdiction under s 254(1)(i) should not be treated as necessarily being a subset of the “oppression” jurisdiction under s 216. However, the Court recognised that these two jurisdictions, though distinct, did in fact overlap in many situations since the concept of unfairness was common to both. In such overlapping situations, the degree of unfairness required to invoke the “just and equitable” jurisdiction should be as onerous as that required to invoke the “oppression” jurisdiction.
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Comptroller of Income Tax v IA
[2006] SGCA 24, [2006] 4 SLR 161
In this case, the Court of Appeal had to consider if certain expenses incurred by a taxpayer in relation to a syndicated loan were revenue expenses deductible against the taxpayer’s taxable income under ss 14(1) and 15(1)(c) of the Income Tax Act (Cap 134, 2004 Rev Ed) (“ITA”).
The Court of Appeal held that in such cases, the Court should first ascertain the purpose of the loan, taking into account the linkage between the loan and the main transaction. If insufficient linkage was established, the loan must ex hypothesi be capital in nature. If sufficient linkage was established, the court would then proceed to consider if the main transaction was of a capital or revenue nature, applying the broader temporary and fluctuating test. The character of the loan would be determined at the time the loan was entered into, and would follow the character of the main transaction.
On the facts of the case, there was a sufficient linkage between the loan and the taxpayer’s project, which had the character of a revenue transaction. It was clear that the entire loan was intended to be temporary and fluctuating. Having determined that the loan was revenue in nature, the Court went on to find that the relevant expenses incurred by the taxpayer were similarly revenue in nature and deductible under s 14(1) of the ITA.
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Ho Wing On Christopher and others v ECRC
Land Pte Ltd (in liquidation) [2006] SGCA 25
The liquidators of the respondent company (“ECRC”) had previously commenced a suit against the appellants in ECRC’s name. This claim failed both at first instance and on appeal, and costs were ordered in the appellants’ favour. ECRC was unable to satisfy the costs orders because the liquidators had, in breach of the estate costs rule, applied ECRC’s available funds towards satisfying ECRC’s own legal costs first. According to the estate costs rule, a successful litigant against a company in liquidation would be entitled to be paid his costs in priority to the other general expenses of liquidation. The appellants commenced these proceedings to hold the liquidators personally liable for their unpaid legal costs.
The appellants’ claim was dismissed in the High Court, but allowed by the Court of Appeal. According to the Court of Appeal, a liquidator who breached the estate costs rule should be made to remedy his breach. Since the liquidators had caused the deficiency in ECRC’s assets by breaching the estate costs rule, it was only fair that they compensate the appellants for their unpaid costs. The Court highlighted that a liquidator’s duty to recover the company’s assets was not absolute. Hence, where a company had insufficient assets to satisfy both the company’s own legal fees as well as the opposing party’s potential costs, the liquidator should seek an indemnity from the company’s creditors before commencing litigation. It would not be fair to make the opposing party bear the risk of litigating for the creditors’ benefit.
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Pertamina Energy Trading Limited v Credit
Suisse [2006] SGCA 27, [2006] 4 SLR 273
The appellant company opened a fixed deposit account with the respondent bank. The appellant subsequently drew down US$8m on a credit facility offered by the respondent, and the respondent set off the draw down against the appellant’s deposit. It was later discovered that the documents authorising the establishment of the credit facilities and the draw down had been forged.
The respondent’s key defence was the “conclusive evidence clause” in the Account Opening Conditions. Under the clause, the customer was obliged to examine all statements issued by the bank and to report any inaccuracies or discrepancies within 14 days from the date of the statements, failing which the bank was entitled to treat the statements as conclusive evidence of “all the matters” contained in the statements.
While the High Court had previously upheld the validity of such conclusive evidence clauses, this was the first time that the Court of Appeal was asked to consider the issue. The Court of Appeal held that such a clause was valid and effective against the appellant, aligning itself with a 1986 Privy Council decision and other major Commonwealth jurisdictions such as Hong Kong, Australia and Canada.
In cases where the customer was a commercial entity, the Court of Appeal found it neither onerous nor unreasonable to place the risk of loss on the customer if this had already been agreed upon. However, the Court expressly declined to rule on the validity of such clauses in cases where the customer was either a non-corporate body or an individual, as such cases would have to be examined on their own facts with a careful scrutiny of the clauses in question.
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United Overseas Bank Limited v Bebe
binte Mohammad (by Hajjah Aisah Binte Haji @ Mimi Haji her guardian
ad litem) [2006] SGCA 30
The appellant bank (“UOB”) had offered JSN Enterprises, of which one of the respondent’s daughter was a partner, credit facilities to be secured by a legal mortgage over the respondent’s property. The original certificate of title for the property was used by the appellant’s solicitors to register the mortgage. However, the respondent had actually obtained a replacement certificate of title after she discovered the loss of the original in early 2000.
The High Court set aside UOB’s registered mortgage against the respondent’s property, taking the view that there was wilful blindness akin to fraud on the part of UOB’s solicitors through their conveyancing clerk, as the clerk had registered the mortgage using the original certificate of title which had been cancelled.
The Court of Appeal allowed UOB’s appeal, and disagreed that the conveyancing clerk had been guilty of wilful blindness akin to fraud. At the worst, UOB’s solicitors were only guilty of negligence. In ordinary banking transactions, the bank’s primary interest was to ensure that it had a valid and enforceable security. There was no reason for the bank to act dishonestly. Similarly, solicitors acting for their clients in the ordinary course of their profession normally had no personal interest in the outcome of the transaction. The solicitors could have been careless, negligent, indifferent or reckless, but were unlikely, in the ordinary circumstances, to be dishonest or fraudulent.
Under s 160(1)(b) of the Land Titles Act (Cap 157, 1994 Rev Ed) (“LTA”), the Court could order rectification of the land register if it was satisfied that any registration has been obtained through fraud, omission or mistake. The Court held that the power of rectification under s 160(1)(b) of the LTA should only be exercised if the registered proprietor had obtained his title to the property as a result of his fraud, omission or mistake. In this case, the mortgage was registered as a result of the mistake of the registry staff, rather than UOB’s solicitors. Accordingly, s 160(1)(b) could not apply. The Court of Appeal also disagreed with the trial Judge’s finding that the respondent had a personal equity against UOB to set aside the mortgage. There was no evidence that the conveyancing clerk had any knowledge that the original certificate had been cancelled. Central to the Torrens system was the idea of paramountcy of the registered title or the indefeasibility of the registered title. The land register mirrored what a purchaser was or was not subjected to, save for the overriding and express exceptions. While these exceptions did not necessarily encompass all personal equities, the Torrens system was designed to give finality to the title of the registered title. The Court cautioned against extending personal equities further, noting that past decisions which had allowed in personam claims could in fact be brought under the express exceptions in the LTA.
The Court observed that adopting such a strict approach was not necessarily unfair to persons holding unregistered interests in registered land, as they were free to protect their interests by lodging caveats against the registered title. Also, in the present case, the respondent could have lodged a claim against the assurance fund under s 151 of the LTA if she could prove loss suffered arising from the mistake of the registry staff in accepting the wrong certificate of title for registration.
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G Krishnasamy Naidu v Public
Prosecutor [2006] SGCA 36
The appellant suffered from a jealous preoccupation with his wife. Whilst on bail on a charge of stabbing her with a knife, his jealous preoccupation continued unabated and he killed her.
The High Court convicted him of murder, rejecting his defence of diminished responsibility by reason of an abnormality of mind (occasioned by a psychiatric illness termed “morbid jealousy”) that substantially impaired his mental responsibility under Exception 7 to s 300 of the Penal Code (Cap 224, 1985 Rev Ed). In rejecting the defence, the Judge applied Exception 7 in a three-stage manner. The first two stages were: (1) whether the appellant suffered from an abnormality of mind; and (2) whether such abnormality arose from a condition of the mind or some illness. Having answered the first two stages in the affirmative, however, the Judge was of the opinion that the third stage – that mental responsibility of the appellant was sufficiently diminished by the abnormality of mind – was not satisfied on the facts.
The Court of Appeal disagreed with the High Court’s approach. While the three-stage test would remain a convenient way of drawing attention to the three critical aspects of Exception 7 in many cases, the provision had to be read and applied as a whole. The splitting of Exception 7 was only acceptable provided the court eventually reconstituted the three stages to the composite question and answered it as a whole.
In this case, as the factors that the High Court relied upon in arriving at its decision did not result in the correct inference being made, the Court of Appeal held that the High Court’s conclusion on the third critical question could not be sustained. The appellant’s conviction on the charge of murder was accordingly set aside and he was convicted of culpable homicide not amounting to murder.
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There were three main changes to the Rules of Court in 2006.
First, the Rules of Court were amended to simplify the modes of commencement of proceedings. These amendments took effect in two phases. The first phase, which commenced on 1 January 2006, applied to all civil proceedings except bankruptcy, judicial management, matrimonial and winding up proceedings. The second phase took effect on 1 April 2006 and applied to the remaining proceedings. The following were the primary amendments made:
- The number of modes of proceedings was reduced from four to two modes, namely, the writ of summons and the originating summons. Orders 8 and 9 on originating motions and petitions respectively were deleted.
- Under the amended Order 5 rules 2 and 4, proceedings in which substantial disputes of fact were likely to arise must be commenced by writ of summons, and the originating summons should be used for non-factual disputes and originating applications to the court under any written law.
- A new rule (rule 9) was included in Order 12 to remove the requirement to enter an appearance to an originating summons.
- Order 28 rule 2 was modified to provide that originating summonses shall be heard in chambers in the first instance, subject to the Court’s discretion or any written law or practice direction that certain cases be heard in open Court.
- Amendments were made to Order 32 to provide that the summons was the sole mode of interlocutory application to the court, to be heard in chambers in the first instance, subject to the court’s discretion or any written or Practice Direction.
- Certain Latin and archaic terms were modernised. For instance, the term “habeas corpus ad subjiciendum” in Order 54 has been amended to “order for review of detention” and the term “writ
of subpoena ad testificandum” in Order 38 rule 15 has been substituted with “subpoena to testify”.
- The forms in Appendix A have been arranged in sequential order and re-numbered where necessary.
Second, a revised edition of the Rules of Court was published and came into effect on 1 April 2006. The 2006 Revised Edition of the Rules of Court incorporated all amendments to the Rules of Court up till 1 April 2006.
Third, the Rules of Court (Amendment) Rules 2006 were gazetted on 24 November 2006 and will come into effect on 1 January 2007. The main amendments under these Rules include the amendment of Order 59 rule 19 to require a Judge to certify costs for more than two solicitors, the amendment of Order 3 rule 4 to limit parties’ right to extend time by consent, the amendment of Order 26 rule 2 to decrease the time given to answer interrogatories, and the amendment of Form 38 (affidavit verifying list of documents).
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A new edition of the Supreme Court Practice Directions came into effect on 1 January 2006. These new Practice Directions were issued in conjunction with the amendments made to the Rules of Court to simplify the modes of commencing proceedings. In addition, six Practice Directions were issued in 2006.
The first Practice Direction was issued on 1 April 2006 to make the necessary amendments for the implementation of the second phase of the changes to the modes of commencement of proceedings. Two additional Parts – Matrimonial Proceedings and Proceedings Relating to the Guardianship of Infants, and Bankruptcy and Winding Up Proceedings – were added to the Supreme Court Practice Directions.
The second Practice Direction introduced the requirement for the contents of core bundles for appeals to the Court of Appeal to be arranged in two separate volumes. The first volume must comprise a copy of the grounds of judgment or order, and the judgment or order appealed from, while the second volume must contain all other relevant documents referred to in Order 57 rule 9(2A).
The third Practice Direction changed the practice for amendment of documents. In order to make the exact number of amendments more evident, all amended documents are to be named as “[document name] (Amendment No. 1)”, “[document name] (Amendment No. 2)” etc. as the case may be. Furthermore, a colour scheme has been introduced to differentiate between different rounds of amendments of pleadings and originating processes. When the originating process or pleading has been amended for three or more times, there is also a new requirement of filing a “clean” copy of the amended pleading or originating process, in addition to the version showing the alterations in colour.
The fourth Practice Direction introduced a new Part (Part XX) setting out directions on the requirements to be satisfied for applications made under the Mental Disorders and Treatment Act (Cap 178, 1985 Rev Ed) for the appointment of a committee of a person alleged to be of unsound mind and incapable of managing his affairs.
The next Practice Direction was issued to introduce mandatory electronic filing of all applications for practising certificates through the Practising Certificate Electronic Filing System. This initiative was implemented with effect from 1 November 2006 in view of the ease of usage of the web-based Practising Certificate Electronic Filing System and the declining number of manual applications for practising certificates.
The final Practice Direction was issued in conjunction with the Rules of Court (Amendment) Rules 2006. Some of the miscellaneous changes to the Supreme Court Practice Directions include replacing the term “certificate of two solicitors” with “certificate of more than two solicitors”. This Practice Direction will take effect from 1 January 2007.
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The Singapore Judiciary has performed consistently well in international surveys conducted by the Hong Kong-based Political and Economic Risk Consultancy (PERC) and the Swiss-based International Institute for Management Development (IMD).
This year, Singapore was ranked second in the IMD survey and second in Asia in the PERC survey.
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Singapore was ranked second in IMD’s annual survey on “Legal and Regulatory Framework” for 2006. IMD is an independent foundation, which conducts research projects, management and development programmes, and publishes the annual World Competitiveness Yearbook. This year’s survey included a total of 61 countries, and measured the extent to which the legal and regulatory framework of a country restricts or encourages the competitiveness of enterprises. Hong Kong was ranked first with a score of 8.57, while Singapore and Iceland ranked second and third respectively with scores of 8.11 and 7.44. Score gradings for IMD’s survey range from 0 to 10, where a higher score means that competitiveness of enterprises is more greatly encouraged in that country.
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In Issue No 711 (July 2006) of Asian Intelligence – an independent fortnightly report on Asian business and politics published by PERC – Singapore was ranked No 2 out of 12 jurisdictions in Asia in the category for Confidence in the Judicial Systems. The scores range from zero to 10, with zero being the best grade possible and 10 the worst.
Singapore achieved a score of 1.87, slightly behind Hong Kong which had a score of 1.55. Japan was ranked third in Asia with a score of 2.8.
Source: “Asian Intelligence”, An Independent Fortnight Report on Asian Business and Politics ( July 2006 issue).Published by Political & Economic Risk Consultancy Ltd.
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