Anglo-American Corp Sdn Bhd v The London Steam-ship Owners' Mutual Insurance Association Ltd and others

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 11 September 2018
• Neutral Citation: [2018] SGHC 201
• Court: High Court (Singapore)
• Docket Number: Suit No 268 of 2015 (Registrar’s Appeal Nos 302 and 303 of 2016)
• Year: 2018
• Published date: 23 August 2019
• Hearing Date: 28 August 2018,05 April 2018,17 April 2018,29 August 2018,30 August 2018,04 April 2018,27 August 2018,03 April 2018
• Plaintiff Counsel: Goh Kok Leong, Muhammad Asyraf bin Isnin and John Koh (Ang & Partners)
• Defendant Counsel: Ian Teo Ke-Wei and Dedi Affandi bin Ahmad (Rajah & Tann Singapore LLP),third respondent not represented, not present,Mohan s/o Ramamirtha Subbaraman, Adrian Aw Hon Wei and Rachel Loke Jia Min (Resource Law LLC)
• Subject Matter: Civil Procedure,Striking out
• Citation: [2018] SGHC 201

Belinda Ang Saw Ean J: Introduction

Registrar’s Appeal Nos 302 and 303 of 2016 are appeals against the Assistant Registrar’s (“AR”) decisions in Summons No 1187 of 2016 and Summons No 901 of 2016 respectively. The two applications by way of summons were brought to strike out the claims of the plaintiff, Anglo-American Corporation Sdn Bhd (“AAC”), in Suit No 268 of 2015. The first defendant, The London Steam-ship Owners’ Mutual Insurance Association Ltd (“D1”), and the second defendant, A. Bilbrough & Co Ltd (“D2”), brought their striking out application in Summons No 1187 of 2016, pursuant to O 18 r 19(1)(b) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“ROC”) and the inherent jurisdiction of the court. The fourth defendant, Richard Ian Lovell (“D4”), applied in Summons No 901 of 2016 to strike out AAC’s claim pursuant to O 18 r 19(1)(b) and O 18 r 19(1)(d) of the ROC and the inherent jurisdiction of the court. The third defendant is not involved in these proceedings at all. AAC has not served the Writ of Summons on the third defendant.

AAC’s claim against the three defendants arises out of a collision between the United Endurance and the Sunbright in Singapore on or about 28 October 2006 (“the Collision”). AAC was at all material times the owner of the Sunbright. Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) (“SOP”) was the Protection and Indemnity (“P&I”) insurer of the Sunbright and Hilary Michael Hammond (“MH”) was the London-based claims-handler for SOP in respect of the Collision. D1 was the P&I insurer of the United Endurance. D2 was the manager of D1, and Ioanna Pavlidou, commonly referred to as Joanna Pavlidis (“JP”), was an associate director of D2. Spica Services (S) Pte Ltd (“Spica”) was the Singapore correspondent for D1, D2 and SOP. A Rahman (“Rahman”) from Spica was in charge of the matter with respect to the United Endurance while Thomas Yan (“TY”) from Spica was in charge of the matter with respect to the Sunbright. D4 was at the material time an English solicitor in Ince & Co’s Singapore office. He was appointed by D2 to represent the owner of the United Endurance, Trade Tankers Inc. (“Trade Tankers”), in respect of the Collision.

The test of whether a claim can be struck out under O 18 r 19(1)(b) of the ROC or under the inherent jurisdiction of the court depends on whether the party’s action is plainly or obviously unsustainable. The Court of Appeal held in The “Bunga Melati 5” [2012] 4 SLR 546, at [39], that a “plainly and obviously unsustainable action” would be one which is either: (a) legally unsustainable: if “it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks”; or (b) factually unsustainable: if it is “possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance, [for example, if it is] clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based”.

As to O18 r 19(1)(d), a claim is considered to be an abuse of the court’s process if the court’s machinery is being misused. This ground involves a fact-specific inquiry. After all, there is considerable variety in the particular methods by which an abuse of the court’s process may be brought to bear. An example of an abuse of process is that of bringing a claim for a collateral purpose (see Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others [1997] 3 SLR(R) 649).

It is fair to say that before me, the arguments of all the parties were mainly based on O18 r 19(b).

Registrar’s Appeal No 302 of 2016

In Suit No 268 of 2015 and the proceedings before the AR, AAC asserted two claims against D1 and D2. The first was for breach of contract (“the Contract Claim”) and the second was for misrepresentation pursuant to s 2 of the Misrepresentation Act (Cap 390, 1994 Rev Ed) (“the Misrepresentation Claim”). In the course of the current appeal proceedings, two new additional arguments have been canvassed by AAC. The first argument is a claim in unjust enrichment while the second is on the issue of good faith.

The Contract Claim

In the Contract Claim, AAC pleads that the terms of the contract are as follows: It is an express term that AAC and D1 and D2 would hold off formal steps until D1, D2 and/or Trade Tankers had been given a reasonable opportunity to take a position on settlement; It is an express term that D4 (as agent of or on behalf of D1, D2 and/or Trade Tankers) would consider AAC’s claim with due dispatch and make reasonable proposals to settle it amicably; It is an express term that in the event that AAC’s claim was not settled amicably, D1 and/or D2 would provide AAC with suitable security in the usual form of a P&I letter of undertaking from D1; and Alternatively, it is an implied term that in the event that AAC’s claim was not settled amicably, D2 would provide AAC with suitable security in the usual form of a P&I letter of undertaking from D1.

AAC claims that “formal steps” under term (a) include, on the part of AAC, the issuance of an in rem writ and a warrant of arrest against the United Endurance, ship-watch on the United Endurance, demand and negotiation for security from D1 and/or D2, and unless such security is obtained, execution of the warrant of arrest against the United Endurance. On the part of D1 and/or D2, formal steps include a formal offer to provide or the provision of suitable security in the usual form of a P&I letter of undertaking from D1, to avert the risk of arrest.

I note that AAC’s position on the formation of the contract has been inconsistent as to the whether the contract was formed orally or in writing, and whether the email sent by D4 to AAC’s solicitor, Mr Goh Kok Leong (“Mr Goh”), on 22 January 2007 (“the 22 January Email”) concluded the contract or merely confirmed the contract already made orally. For the purpose of the appeal on striking out, I take AAC’s final position that the contract was in writing, with the 22 January Email being the offer and the email reply from Mr Goh to D4 on the same day being the acceptance. The telephone conversation between MH and D4 on 17 January 2007 (“the 17 January Telephone Conversation”) set the context for and gave rise to this contract. AAC alleges that D1 and D2 breached the contract when they refused to provide security for AAC’s claim after parties failed to settle.

Factual support for the pleaded terms

I start with the pleaded terms (a) and (b) (see [7] above). I am satisfied that there is basis in the email correspondence for the claim that there was a contract agreed between AAC and D1 and/or D2 with terms (a) and (b) as express terms. Terms (a) and (b) can be gathered from the 22 January Email and based on the objective evidence before me, I agree with Mr Goh that the threshold of a plainly or obviously unsustainable action is not made out. The email is as follows:¹

Without Prejudice

Kok Leong,

Thanks for your message.

Yes we do think there is a reasonable prospect of knocking this one [ie, AAC’s claim] on the head after sight of your clients’ claim/supporting documents. I understand it is also the Club’s [ie, SOP’s] preference to hold off any formal steps until our clients have been given a reasonable opportunity to take a position on settlement.

…

Regards

Richard [ie, D4]

[emphasis added]

The 22 January Email, read in the context of correspondence before and after it (analysed below at [10]–[15]), clearly sets out certain commitments on both sides. On AAC’s part, it was (a) to stop pressing on with its intention to secure its claim (and all other formal steps in pursuing its claim), (b) to submit its claim papers to those representing the United Endurance, and (c) to give them reasonable time to assess the papers. On D1 and D2’s part, the commitments were (a) to review the claim papers, (b) to take a position as to the settlement sum, and (c) after taking a position on the settlement sum as described in (b), to begin settlement talks with a view to settle whilst withholding formal steps. The contract between AAC and D1 and/or D2 can reasonably be described as a standstill agreement to settle.

The contents of the commitments are capable of being fleshed out and supported by email correspondence both before and after the 22 January Email. The genesis of the 22 January Email was the 17 January Telephone Conversation, which was initiated by D4. The gist of the conversation was reflected in the email from MH to D4 on the same day, stating that pursuant to their telephone conversation, he had written to TY of Spica for AAC to submit its claim papers to D4. MH told TY that he had received a call from D4, who said that the “claim (where liability would not appear to be in dispute) ought to be capable of a simple and straightforward resolution” and invited AAC to submit its claim documents to him. MH further informed that he was not sure if there had been any development in terms of getting security, but essentially, D4’s approach “was to try and cut through all the protocol and see if a deal [couldn’t] be done quickly to wrap this matter up”.² In D4’s reply to MH, he wrote that any position on liability should not get in the way of “a quick commercial settlement on the figures as soon as these [were] available together with the usual supporting documents”.³ The correspondence between D4, MH and TY show that D4 and MH were looking to have AAC agree to hold off formal steps, also referred to as “all the protocol”. The ordinary “protocol” in the context of in rem claims such as a ship collision case is to secure the claim and this often occurs before attempts at settlement. Typically, the wording of a P&I Letter of Undertaking would respond to any settlement or judgment....