Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeBelinda Ang Saw Ean J
Judgment Date29 October 2004
Neutral Citation[2004] SGHC 243
Citation[2004] SGHC 243
Defendant CounselLai Kwok Seng (Lai Mun Onn and Co)
Subject MatterWhether application to set aside default judgment constituting "step in the proceedings",Arbitration,Whether judgment should be set aside,Plaintiff obtaining judgment in default of defence,Stay of court proceedings,Whether application to extend time to serve defence constituting "step in the proceedings",Principles governing court's discretion to set aside default judgments,Judgments and orders,Whether defendant should file defence pending outcome of stay application,Default judgment,Section 6(1) Arbitration Act (Cap 10, 2002 Rev Ed),Defendant applying to stay proceedings and refusing to file defence,Civil Procedure,Whether judgment regularly obtained,Whether defence having real prospect of success
Plaintiff CounselAndrew Chan (Allen and Gledhill) and Chua Boon Thien (David Siow Chua and Tan LLC)
Published date01 November 2004
Docket NumberDistrict Court Suit No 190 of 2004
Date29 October 2004

29 October 2004

Belinda Ang Saw Ean J:

1 The facts of this appeal are simple. On 16 June 1997, the defendant, Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd, as the main contractor for the “Villa Begonia” development at Saraca Road/Begonia Road (“the project”), appointed the plaintiff, Australian Timber Products Pte Ltd, as its nominated sub-contractor for the supply and installation of timber strip flooring for the project (“the works”). Following the purported completion of all of the works, a dispute arose between the plaintiff and the defendant as to the amount due to the plaintiff in respect of the works. That dispute was not resolved, and on 15 January 2004 the plaintiff commenced proceedings in the District Court against the defendant for the balance sum of $134,031.24.

2 The writ of summons was served on 20 January 2004. On the same day, an appearance to the action was entered on behalf of the defendant. An amended writ of summons was re-served on the defendant’s solicitor on 5 February 2004. The deadline for the defendant to serve its defence was 20 February 2004.

3 On 17 February 2004, the defendant applied to stay the entire action under s 6(1) of the Arbitration Act (Cap 10, 2002 Rev Ed). Before the stay application could be heard, Mr Chua Boon Thien, for the plaintiff, wrote to the defendant on 20 February 2004, which was a Friday. In his letter, he called upon the defendant to serve its defence within 48 hours. Mr Lai Kwok Seng, for the defendant, spoke to Mr Chua on the same day and in his letter of 24 February, he confirmed that the defendant would not be filing its defence pending the outcome of the stay application, which was fixed for hearing on 18 March 2004. Mr Lai explained that the defendant might be deemed to have taken a step in the proceedings if it were to file the defence, thereby affecting the stay application. Moreover, he stated that the filing of the defence would escalate costs unnecessarily.

4 The defendant’s case is that the contract with the plaintiff contained in or evidenced by the defendant’s letter dated 16 June 1997 provided for disputes to be referred to arbitration. The contrary position, which was taken by the plaintiff, was that the matters forming the subject matter of the action were not covered by the alleged arbitration clause. There was no agreement to arbitration as the arbitration clause relied upon by the defendant was inapplicable as far as the relationship between the plaintiff and the defendant was concerned.

5 It is common ground that the 48-hour notice expired on 24 February 2004. Since no defence was served, the plaintiff on 25 February 2004 entered judgment in default of defence in the sum of $134,031.24. On 9 March 2004, the defendant applied to set aside the default judgment.

6 The defendant’s application to set aside the default judgment was refused by the Deputy Registrar, whose decision was reversed on appeal to the district judge in chambers on 5 May 2004. The plaintiff on 14 May 2004 appealed against the decision of the district judge in which he set aside the default judgment.

7 Mr Andrew Chan was engaged as counsel to argue the appeal before me on behalf of the plaintiff. He contends that the plaintiff was entitled to enter default judgment following the failure of the defendant to serve its defence. If anything, it was up to the defendant to apply for leave to extend time to serve the defence. The default judgment was a regular judgment and it should not be set aside, the contention being that the defendant had not shown that it had a real prospect of successfully defending the claim.

8 To the defendant, the notice to serve the defence was issued without basis as the plaintiff was already served with the stay application on 18 February 2004. The defendant relied on the decision in Samsung Corp v Chinese Chamber Realty Pte Ltd [2004] 1 SLR 382 (“Samsung”) for the proposition that once a stay application has been served, and until it has been finally disposed of, it is not proper for the plaintiff to insist on the defence being served and to enter judgment in default of defence. Mr Lai pinned his colours on the following passage by Chao Hick Tin JA in Samsung at [7]:

It seems to us that as a matter of logic, it makes absolute sense that when the question of stay is put in issue that should first be determined before any further step is taken by either party in the action. In the context of an arbitration clause, it is all the more so as under s 6(1) of the Arbitration Act (Cap 10) it is expressly provided that the party who wants a stay of the court proceeding should apply “after appearance and before delivering any pleading or taking any other step in the proceeding”. Once the stay question is finally determined, then everything else will follow from that.

9 In resisting the appeal before me, the defendant adopted the reasoning of the learned district judge, who in his Notes of Arguments said that:

In my view, it would be conceptually wrong to compel a Defendant to file his Defence while the Defendant’s stay application pursuant to s 6(1) of the Arbitration Act is still pending, as it would be clearly inconsistent with the requirement in s 6(1) that the Defendant must not deliver any pleading or take any other step in the proceedings. See the Court of Appeal’s judgment in Samsung Corporation v Chinese Chamber Realty Pte Ltd [2004] 1 SLR 382.

In my view, a Defendant cannot be required or compelled by the [Rules...

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    ...approval by Belinda Ang Saw Ean J in Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd [2005] 1 SLR 168. Although, conceivably, an affidavit resisting the application for interim payment could be filed with the express reservation that this ......
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3 books & journal articles
  • Arbitration
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2008, December 2008
    • 1 December 2008
    ...both adopted the approach in Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd[2005] 1 SLR 168 [see author”s comments on this decision in (2004) 5 SAL Ann Rev 47 at 52—53, paras 3.14—3.18] and took the view that the defendants ought not to h......
  • Arbitration
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2007, December 2007
    • 1 December 2007
    ...of defence under O 19 ROC (see Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd [2005] 1 SLR 168 (‘Australian Timber’) where the court refused to set aside a default entered on this basis; see also the author”s comments on this decision in ......
  • Arbitration
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2004, December 2004
    • 1 December 2004
    ...Ean J, however, in her decision in Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd[2005] 1 SLR 168 took a slightly different approach when she was considering an application to set aside a judgment entered in default of service of defence.......

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