Case Note

Citation(2014) 26 SAcLJ 295
Published date01 December 2014
Date01 December 2014

Mitora: THE MANTRA ON “UNLESS ORDERS”?

Mitora Pte Ltd v Agritrade International (Pte) Ltd [2013] 3 Slr 1179

The Court Of Appeal in Mitora Pte Ltd v Agritrade International (Pte) Ltd[2013] 3 SLR 1179 (“Mitora”) laid down clear pointers as to when an “unless order” may be made. Though the crux of the judgment mainly considered whether the appellant's statement of claim, which was struck out in default of compliance of “unless orders”, should be restored, the court also provided useful guidance on alternative means of penalising persistent breaches including raising adverse inferences against the defaulting party at trial and striking out only the relevant portions of the pleading rather than the whole. In addition, the judgment in Mitora reiterates the Court of Appeal's penchant for the merits of the case to be adjudicated instead of having parties' substantive rights summarily disposed due to procedural irregularities. Will Mitora be the mantra for the making of “unless orders”?

I. Introduction

1 An “unless order” (otherwise known as a “peremptory order”) is a legal parlance to describe an order which typically compels a party to do something, usually within a time frame, and, unless he complies, very serious consequences will follow.1 A litigant in default of compliance with an “unless order” typically runs the risk of either having its action struck out or judgment entered in default. It is a judicial creation which has earned an infamous name for itself over the decades. Indeed, it has struck fear in the hearts of recalcitrant litigants. Moore-Bick LJ paints “unless orders” as “one of the most powerful weapons in the court's case

management armoury”.2 Ward LJ hails “unless orders” as a “necessary forensic weapon which the broader interests of the administration of justice require”.3 Closer to home, the Singapore Court of Appeal cautions4 that the routine use of “unless orders” would be the forensic equivalent of using a sledgehammer to crack a walnut. Whatever titles “unless orders” have been crowned with, one thing is certain — due to its draconian nature, it is meant to be an order of last resort5 and not the first salvo the moment there is a default. In addition, it has been frequently noted that an “unless order” will not be made provided there is a history of failure to comply with other orders.6

2 Over the decades, “unless orders” have also proven to be extremely vital as a case management tool. The 1989 judgment in Manilal and Sons (Pte) Ltd v Bhupendra K J Shan7 (“Manilal and Sons”) is a useful illustration. The plaintiffs claimed the sum of $892,611.77 (a noticeably large claim in the early 1980s) being the balance due for goods sold and delivered. The plaintiffs' action was eventually dismissed eight years after the action commenced for a failure to comply with an “unless order” to provide a further and better list of documents.8 The court held that disobedience to an “unless order” is likely to be held to be contumelious9 behaviour resulting in the dismissal of the action or striking out of the defence.

3 It is rather alarming to note that in Manilal and Sons, though the action had commenced for a period of eight years, the parties were still contesting discovery orders — something quite unheard of these days. Indeed, those were the bygone years when the Judiciary was saddled with a huge backlog of trials waiting to be heard. Anecdotally, a civil action then could even take up to ten years or more to conclude. However, for the dismissal of the claim pursuant to an “unless order”, it would likely have gone past the ten-year period. It is widely known that the massive backlogs in the courts had been cleared since the mid-1990s.

The use of “unless orders” must have facilitated, to a certain degree, the elimination of the backlog. Fast forward to the present, some 20 years after the backlogs had been cleared and the courts are on top of its case management with healthy disposal rates and timelines: what are the prevailing attitudes of the judiciary towards the use of “unless orders”?

II. The undisputed facts and holding in Mitora

4 The plaintiff and appellant, Mitora Pte Ltd (“Mitora”), was a company incorporated in Singapore providing business and management consultancy services. The defendant and respondent, Agritrade International (Pte) Ltd, is incorporated in Singapore and engaged in the business of, inter alia, coal trading. Senamas Far East Inc (“Senamas”), incorporated in Japan and operating out of Tokyo, was set up primarily to provide consulting services to the respondent in respect of the latter's coal mines in the Republic of Indonesia. Senamas was also to act as the respondent's exclusive agent to develop and market the respondent's coal to Japan and Korea. These arrangements were made pursuant to a consultancy agreement signed by Senamas and the respondent with the following terms: the respondent agreed to pay Senamas: (a) a commitment fee of US$50,000 per year starting 1 April 2005 up to April 2009; and (b) a monthly consultancy fee of US$12,500 on the first of each month starting from April 2005.

5 It was agreed that Senamas would assign its debt against the respondent to the appellant. In this connection, a deed of assignment was entered into on 9 April 2010 in consideration of US$100,000. The appellant's main action was founded on a sum of US$625,000 which purportedly remained unpaid to Senamas under the consultancy agreement. The respondent denied that the Consultancy Agreement consisted of any commitment fee, and further argued that the consultancy agreement had been terminated in or around September 2008. A counterclaim was also advanced by the respondent on the basis that Senamas had breached its obligations as the respondent's exclusive agent in Japan by providing consultancy services to other companies. The appellant issued the writ of summons on 22 July 2010.

6 On 26 May 2011, the respondent successfully applied for the discovery of eight categories of documents principally relevant to the respondent's counterclaim. As Senemas was initially reluctant to release certain classes of documents, the respondent managed to secure two successive “unless orders” against the appellant to compel compliance with the 26 May 2011 order. The appellant's failure to comply fully with these orders resulted in its statement of claim (“SOC”) being struck out by the assistant registrar.

7 At the hearing of the appeal against the assistant registrar's order, the High Court judge granted two further adjournments for the appellant to fully comply with its discovery obligations. By 18 May 2012, the appellant had substantively complied with the 26 May 2011 order. However, at the final hearing before the judge on 23 May 2012, the respondent raised a fresh objection alleging that the order requiring disclosure of one of the categories of documents had not been complied with. The judge agreed with the objection and dismissed the appeal on the basis that there were no extraneous circumstances which prevented the appellant from complying with the court orders. Ancillary to this was the appellant's application to seek an extension of time to file its third and fourth supplementary list of documents. This application was also dismissed. In fact, if the “ancillary” order of extension of time were granted, the SOC would not have been struck out and the action would have subsisted.

8 Being dissatisfied with the High Court dismissing the appeals, the appellant appealed to the Court of Appeal. The Court of Appeal allowed both appeals with the net result of restoring the SOC and the appellant's action. The Court of Appeal found on the record that the appellant did substantively comply with all its discovery obligations and that the SOC should not have been struck out.10 Even if there had been an intentional and contumelious breach of an “unless order”, the Court of Appeal held that the court, in imposing the sanction, must be guided by considerations of proportionality after taking all the circumstances of the case into account. On the facts of Mitora, the Court of Appeal did not think that the striking out of the appellant's SOC owing to its previous breaches of “unless orders” was proportionate.11 The Court of Appeal further stressed the following on the making of “unless orders”: (a) they are to be scrupulously employed and not to be given as a matter of course; (b) the conditions must be tailored to the prejudice which would be suffered should there be non-compliance; and (c) the court must contemplate other means of penalising contumelious or persistent process breaches. The Court of Appeal, however, cautioned that litigants would always remain vulnerable to the ultimate sanction of a striking-out order in cases which involve an inexcusable breach of a significant procedural obligation.12 With these principles in mind, the Court of Appeal laid down a set of guidelines13 on the making of “unless orders” which will be discussed below.14

III. A timely mantra on the making of “unless orders”?

9 What was particularly helpful in Mitora was the Court of Appeal's guidance that if an “unless order” were to be made, the conditions appended to the “unless order” should as far as possible be tailored to the prejudice which would be suffered in the event of non-compliance. The typical consequences of a breach of an “unless order” are either the dismissal of the action (if the party in default is the plaintiff) or judgment entered (if the party in default is the defendant). The clarion call to dovetail the consequences of an “unless order” could not have been more timely. While the call to “dovetail” sounds logical, there are inherent limitations that would prevent a “dovetailing” of the consequences of every “unless order” by the very nature of the circumstances that necessitate “unless orders” to move civil litigation along. The Court of Appeal was visibly aware of this limitation when it...

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