William Jacks & Co (Singapore) Pte Ltd v Nelson Honey & Marketing (NZ) Ltd

• Jurisdiction: Singapore
• Judge: Zhuang WenXiong AR
• Judgment Date: 16 September 2015
• Neutral Citation: [2015] SGHCR 21
• Citation: [2015] SGHCR 21
• Court: High Court (Singapore)
• Published date: 18 September 2015
• Docket Number: Suit No 85 of 2015 (Summons No 2064 of 2015)
• Plaintiff Counsel: Chandra Mohan Rethnam, Jonathan Cheong and Tan Ruo Yu (Rajah & Tann Singapore LLP)
• Defendant Counsel: Gerald Yee, Prakash Nair and Ms Yoga Vyjayanthimala (Clasis LLC)
• Subject Matter: Civil Procedure,Pleadings,When bound,Conflict of Laws,Choice of Law,Contract,Alleged void contract,Choice of Jurisdiction,Foreign Judgments,Recognition,Issue estoppel,Jurisdiction,Discretionary,Natural Forum,Formation,Evidence,Admissibility of evidence
• Hearing Date: 17 June 2015,16 July 2015

Zhuang WenXiong AR:

“The power of a sovereign to affect the rights of persons, whether by legislation, by executive decree, or by the judgment of a court, is called jurisdiction” (J H Beale, “The Jurisdiction of a Sovereign State”, (1923) 36 Harv L Rev 241 at p 241). Long-arm jurisdiction — that is, jurisdiction over persons outside of the territorial confines of the state — does not sit easily with a territorial notion of sovereignty. This calls into question whether judgments against extra-territorial persons ought to be recognised outside of that territory. More specifically, where a foreign court has assumed long-arm jurisdiction, how should this affect a local court’s determination of its own long-arm jurisdiction?

The plaintiff, William Jacks & Company (Singapore) Pte Ltd (“William Jacks”), is a Singapore-incorporated company in the business of the wholesale and retail distribution of health food and supplements. The defendant, Nelson Honey & Marketing (NZ) Limited (“Nelson Honey”), is a New Zealand-incorporated company in the business of exporting honey.

William Jacks bought some manuka honey from Nelson Honey for a sum of NZ$206,300, to be delivered from New Zealand to Shanghai, China in two shipments (a full recounting of the facts is at [76]–[77] below). William Jacks initially pleaded that the purchase was pursuant to a purchase order, but during proceedings before me, William Jacks sought to argue that the parties had agreed to an exclusive distributorship agreement which contained an exclusive jurisdiction clause in favour of Singapore and controlled individual purchases. This was an area of controversy and I return to this later on in the judgment (at [65]–[74] below).

In November 2014, Nelson Honey commenced a suit against William Jacks in the High Court of New Zealand for the unpaid purchase price of the honey. William Jacks did not file a defence in New Zealand, and applied to dismiss proceedings (the New Zealand equivalent of applying to set aside service ex juris of the writ) or in the alternative stay proceedings on the basis of forum non conveniens. This application was dismissed in June 2015 (reported as [2015] NZHC 1215, (“the New Zealand Judgment”)), and is currently undergoing review. William Jacks commenced Suit No 85 of 2015 against Nelson Honey in January 2015 for non-conformity, alleging that the honey supplied in the first shipment was defective, and that the batch number and expiry dates were not printed for the second shipment. William Jacks’ application for leave under O 11 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) to serve the writ and statement of claim was granted in February 2015. Service was effected in March 2015. Nelson Honey filed Summons No 2064 of 2015 on 20 April 2015, seeking to set aside the service ex juris of the writ, or in the alternative, to stay proceedings on the grounds of forum non conveniens.

When I first heard this matter, I noticed that William Jacks was relying on matters that were not pleaded in its statement of claim and on evidence outside of its initial supporting affidavit. The parties had also not submitted on whether the dismissal of William Jack’s application in New Zealand gives rise to an estoppel. I therefore directed the parties to address me on the mentioned three issues at a subsequent hearing.

The issues

The straightforward procedural history belies the complexity of the issues that arise. These are: Is an O 11 applicant bound by her pleaded statement of claim for the O 11 application? Can an O 11 applicant rely on evidence outside of the initial supporting affidavit in an application by the counterparty to set aside service ex juris? Does the New Zealand court’s dismissal of William Jack’s application to dismiss or stay proceedings give rise to an estoppel? Did the parties agree to the exclusive jurisdiction of the Singapore courts? Is Singapore a more appropriate forum than New Zealand, or vice versa? Should service ex juris of the writ on Nelson Honey be set aside? Should proceedings be stayed on the basis of forum non conveniens? I deal with the issues seriatim.

Is an O 11 applicant bound by her pleaded statement of claim?

William Jacks raised the argument that the parties had agreed to an exclusive distributorship agreement containing an exclusive jurisdiction clause in favour of Singapore, but this was a matter which was not pleaded in its statement of claim. As has been mentioned, this was an issue upon which I directed further research.

William Jacks took the position that an O 11 applicant is not bound by her pleaded statement of claim, and may apply to amend the same. Nelson Honey took the position that an O 11 applicant is bound by the pleaded cause of action, and in any event cannot rely on another head of jurisdiction that was not initially relied on.

Any analysis of the law in this area must start with two opposed English Court of Appeal cases decided a century ago: Holland and another v Leslie [1894] 2 QB 450 (“Holland v Leslie”) and Parker v Schuller (1901) 17 TLR 299.

In Holland v Leslie, leave had been granted for service ex juris; the cause of action was for an unpaid bill of exchange. The indorsed statement of claim erroneously described the bill of exchange. The plaintiffs applied to amend the statement of claim. Lord Esher MR allowed this amendment, and held that there was no difference between writs served out of the jurisdiction and writs served within the jurisdiction, save that an amendment will not be allowed if the effect was to introduce a cause of action in respect of which leave could not have been originally granted for service ex juris.

I turn to Parker v Schuller (1901) 17 TLR 299. The claim in this action as endorsed in the writ of summons was breach of a CIF contract because of non-delivery of certain chemicals in Liverpool. The plaintiff had relied on Order XI, r 1(e), that is, a breach of a contract within the jurisdiction, for service ex juris. On appeal to the Court of Appeal, the defendants argued that the contract would have been fulfilled if they had delivered the goods to the ship at the foreign port, and posted documents to Liverpool; there was therefore no breach within the jurisdiction. The plaintiffs conceded that the CIF contract was breached by reason of non-delivery of documents. Romer LJ said:

… an application for leave to issue a writ for service out of the jurisdiction ought to be made with great care and looked at strictly. If a material representation upon which the leave was obtained in the first instance turned out to be unfounded, the plaintiff ought not to be allowed, when an application was made by the defendant to discharge the order for the issue of the writ and the service, to set up another and a distinct cause of action which was not before the judge upon the original application.

Service ex juris of the writ was therefore set aside.

Perhaps unaware of Holland v Leslie, a spate of English cases followed Parker v Schuller (see e.g. In re Jogia (A Bankrupt) [1988] 1 WLR 484 at 491 and Metall und Roshstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391 (“Metall und Roshstoff”) at 436). Walton Insurance Limited v Deutsche Rock (UK) Reinsurance Company Limited and another 1990 WL 754929 (“Walton Insurance”) marked a turning point. The plaintiff initially sued the first defendant for negligent misrepresentation. The plaintiff also obtained leave for service ex juris on the second defendant on the ground that it was a necessary and proper party, in that it would be liable for breach of warranty of authority. The first defendant subsequently took the position that it would not challenge the authority of the second defendant. The plaintiff changed tack, and sought to uphold service ex juris on the basis that the second defendant was a necessary and proper party because it would be liable for negligent misrepresentation. The Court of Appeal held that this was permissible, because Parker v Schuller does not apply to the substitution of one reason (why the second defendant was a necessary and proper party) for another. Tellingly, the court resoundingly approved of the decision below, and cited, verbatim, passages from the same. A portion is reproduced:

.. it is not right to extend the principle in Parker v Schuller to this case which is not covered by the earlier decision. In saying this, I bear in mind the absence of prejudice to [the second defendant] and the waste of time and money which would be caused if the Plaintiff were forced to start all over again.”

Although not stated in these terms, the effect is that a plaintiff may invoke a new cause of action so long as she is relying on the same O 11 head of jurisdiction.

Walton is plainly at odds with Parker v Shuller. Walton’s attempt at distinguishing Parker v Shuller is wholly unconvincing. Romer LJ clearly said that a plaintiff cannot rely on a new cause of action, simpliciter; Romer LJ did not say that a plaintiff cannot rely on a new cause of action where the new cause of action does not fall within the same O 11 jurisdictional head as the original pleaded cause of action. Walton is best explained by reference to the court’s reluctance to force the plaintiff to start afresh.

Another Court of Appeal decision, AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2012] 1 WLR 920 (“AES”), declined to extend Parker v Shuller. The claimant relied on the breach of an arbitration agreement governed by English law, and one CPR jurisdictional head for service ex juris, but sought to rely on another jurisdictional head when the defendant challenged service. The Court of Appeal held that Parker v Schuller was not applicable because the claimant was relying on the same cause of action. While technically reconcilable with Parker v Schuller, AES is at odds with the rationale behind Parker v Schuller: if it...