Case Note

• Citation: (2014) 26 SAcLJ 738
• Date: 01 December 2014
• Published date: 01 December 2014

WHEN DOES ONE CROSS THE RUBICON OF SUBMISSION?

Broadcast Solutions Pte Ltd v Zoom Communications Ltd

[2014] 1 SLR 1324

This Note Seeks To Examine The Recent High Court Decision Of Woo Bih Li J In broadcast Solutions Pte Ltd V Zoom Communications Ltd[2014] 1 Slr 1324. In Particular It Seeks To Examine The Issues Of What Acts Of The Defendant Amounts To Submission To The Jurisdiction Of The Court To Determine The Merits Of The Decision.

I. Introduction

1 The recent decision of Broadcast Solutions Pte Ltd v Zoom Communications Ltd1 is interesting as it makes us revisit the issues arising from service out of jurisdiction under O 11 of the Rules of Court2 (“ROC”). It also raises the question: when is one deemed to have crossed the Rubicon to be held to have submitted to the jurisdiction of the Singapore court?

II. Brief facts

2 The case involved Broadcast Solutions Pte Ltd (“Broadcast”), a Singapore company which was suing Zoom Communications Ltd (“Zoom”), an Indian company, for unpaid sums in respect of hire-purchase agreements.3 As Zoom was in India, Broadcast had to seek permission to serve out of jurisdiction pursuant to O 11 of the ROC. On 14 February 2013, Broadcast obtained leave, on an ex parte basis, to serve the writ of summons on Zoom,4 and managed to effect service on Zoom either on 22 or 25 February 2013.

3 On 4 April 2013, Zoom filed an application to extend the dateline for service by one week from the date on the order.5 It managed to obtain the order and was granted an extension of time to 15 April 2013 to file its defence (“First EOT Defence Application”). Instead of filing its defence, Zoom filed an application to set aside the service of the writ and to stay the proceedings (“Setting Aside and Stay Application”). Zoom was unsuccessful initially; it then appealed the application and sought a further extension of time to file and serve its defence.6

4 Zoom relied on the material non-disclosure made by the plaintiff in its ex parte application to set aside the order to serve out of jurisdiction.7 However, the key hurdle Zoom faced was the arguments made by Broadcast to the court that:

(a) the First EOT Defence Application by Zoom amounted to a submission by Zoom to the jurisdiction of the Singapore court; and if not,

(b) the Setting Aside and Stay Application by Zoom amounted to a submission to the court.

III. Submission

5 The issue of submission is important at two levels. The first, if the defendant has submitted to the jurisdiction of the Singapore court, he cannot thereafter protest to the existence of the jurisdiction of the Singapore court. Whether there is submission by the defendant is to be determined by Singapore law. At a secondary level, the issue of submission is often important. If there is an unfavourable judgment for the defendant, it is possible to reject enforcement on the basis that the defendant never submitted to the jurisdiction of the court giving the judgment (assuming the foreign country applies a similar law to Singapore). This is to be determined by the foreign court applying its own laws. Therefore, one can see the anxiety on the part of the defendant to ensure that it has never submitted to the Singapore courts.

A. Whether the First EOT Defence amounts to a submission by Zoom to the Singapore court?

6 Woo Bih Li J's decision on this point was that the First EOT Defence Application did not amount to the defendant submitting to the Singapore court.

7 Broadcast relied on the Court of Appeal's decision in Carona Holdings Pte Ltd v Go Go Delicacy Pte Ltd8 (“Carona”) and argued that if “the purpose of asking for an extension of time to file a defence is not bona fide for the purpose of applying for a stay of proceedings pending arbitration”, the court should either refuse the application for time to file a defence or dismiss the application for stay of proceedings.9

8 Woo J rejected the above arguments on the basis that Zoom had made it clear it needed time to take full instructions,10 and further, that the key issue to be determined is whether Zoom had submitted to the jurisdiction of the court. Woo J relied on Carona where it was held that “[a]n application for an extension of time is not in itself tantamount to an unequivocal submission to jurisdiction”,11 and held that the First EOT Defence Application did not amount to submission by Zoom to the Singapore court.

9 It is submitted that Woo J was right in that the focus of the issue is whether Zoom had unequivocally submitted to the jurisdiction of the court and, as such, it is immaterial that the original method of establishing jurisdiction over Zoom was susceptible to be set aside. This argument operates at two levels. First, Zoom, by submitting to the court has provided an independent way for the court to obtain jurisdiction. Next, it can also be argued that through the conduct of Zoom, it is estopped from arguing that it has not submitted to the jurisdiction of the court. The critical test of submission in this case is whether a reasonable person in the position of the plaintiff would have understood the defendant's conduct as waiving any irregularity as to service, and whether the plaintiff had suffered detriment or prejudice in reliance of the same.12

10 In the first situation described, there is actual submission by the defendant, ie, the defendant has, through his conduct expressly or impliedly consented to the exercise of jurisdiction over him. With respect to the latter argument, the defendant can no longer revisit the argument that he had not submitted to the court as his conduct has created an estoppel preventing him from revisiting the same.13

11 However, it is submitted that not all applications for an extension of time should be treated as the same and a nuanced approach is required. When assessing whether a defendant has submitted to the jurisdiction, we are concerned with whether the defendant has, through his conduct, taken a step in the proceedings, which in all the circumstances, amounts to a recognition of the court's jurisdiction in respect of the claim that is the subject matter of those proceedings.14 Therefore, it is important to investigate the reasons for the application for an extension of time. As Woo J rightly pointed out, it would be ideal for the defendant to expressly reserve the right to set aside the order to serve out of jurisdiction when he is filing an application for an extension of time.15 However, the mere absence of such reservation does not amount to submission.16 It appears that, unless the defendant has taken an overt step in showing his willingness to accept the jurisdiction of the court, it should be presumed that the defendant has not submitted to the jurisdiction of the court. This approach can be justified in that submission in and of itself robs the defendant of the right to contest the jurisdiction of the court any further. The basis of such an approach is precisely that the defendant has conducted himself in such a fashion that he has either actively consented or presumed to have consented to the removal of this right from him.

B. Whether the Setting Aside and Stay Application amounts to a submission to the court?

12 The second issue the court had to decide was whether the Setting Aside and Stay Application amounted to Zoom submitting to the jurisdiction of the court. The critical issue was with respect to the Stay Application and to whether it constitutes a submission to the jurisdiction of the court.

13 It must first be recognised that the two prayers in the summons were in and of themselves inconsistent courses of conduct, ie, both prayers can never be granted simultaneously.17 As Woo J rightly pointed out, the first prayer is a dispute of the existence of the jurisdiction of the court (ie, it never existed) while the second involves the defendant recognising the jurisdiction of the court to hear the case but submitting that the court should not exercise its jurisdiction to hear it (ie, it recognises that this jurisdiction exist).18

14 It would be helpful here to go through the requirements for service out of jurisdiction. At both the ex parte stage for leave to serve out of jurisdiction and the inter partes stage to set aside leave for service out of jurisdiction, the plaintiff always has the burden of proof19 to show the following:

(a) there is a serious issue to be tried on the merits;

(b) there is a good arguable case that one of the heads of jurisdiction under O 11 of the ROC is met; and

(c) Singapore is clearly the appropriate forum to hear the dispute.20

15 As seen above, the third factor that the plaintiff has to show is that Singapore is clearly the appropriate forum to hear the dispute. That requires the plaintiff to satisfy the two-stage test in Spiliada Maritime Corp v Cansulex Ltd21 (ie, Singapore is the natural forum and that the justice of the case does not demand that it be heard in another forum).

16 As an observation, the choice by Zoom to pursue both an application to set aside service out of jurisdiction and an application to stay appears to be a strange course of action as, it is submitted, it did not put it in a more advantageous position. In fact, as...