Diversey (Far East) Pte Ltd v Chester Chai Chung Ching and Others

• Jurisdiction: Singapore
• Judge: Chua F A J
• Judgment Date: 12 November 1992
• Neutral Citation: [1992] SGCA 77
• Docket Number: Civil Appeal No 52 of 1991
• Date: 12 November 1992
• Published date: 19 September 2003
• Year: 1992
• Plaintiff Counsel: K S Lo (Allen & Gledhill)
• Citation: [1992] SGCA 77
• Defendant Counsel: Johnny Cheo (Shook Lin & Bok) with Yeoh Lam Hock
• Court: Court of Appeal (Singapore)
• Subject Matter: Express terms,Whether evidence of negotiations admissible,Contract,s 94(f)Evidence Act (Cap 97),Judgments and orders,Amendment,Contractual terms,Construction of settlement agreement with regard to judgment order,Civil Procedure,Whether to be construed by reference to settlement agreement,Settlement agreement,Whether rectification can be sought under a construction summons,Pleadings,Construction,Rectification

This appeal concerns the construction of a settlement agreement (`the agreement`) reached between the parties to Suit No 5626 of 1986. It arose from the following facts.

By an action filed by way of Suit No 5626 of 1986, the respondents claimed against the appellants for, inter alia, (a) injunctive relief to restrain the appellants from (i) using or divulging any trade secrets of Diversey; (ii) trading or dealing with any of the respondents` suppliers; (iii) inducing the respondents` employees from leaving the respondents; and (iv) damages for conspiracy to defraud or injure the respondents.

On 8 September 1989, three days before the trial, the parties reached an overall settlement of the dispute in the action. The settlement`s terms and conditions were contemporaneously reduced into writing in an agreement dated 8 September 1989. On 11 September 1989, a consent judgment order was recorded by Yong Pung How J (as he then was). Both the agreement and the judgment order provided that the appellants were entitled to taxed costs of the action on a party and party basis. When their bill of costs came up for taxation on 25 January 1991, the respondents disputed the following two items:

(a) item 639 for the sum of $60,024 being the amount of professional fees paid by the appellants to Messrs Coopers & Lybrand; and

(b) item 641 for the recovery of the sum of $57,136.44 being the amount of professional fees paid by the appellants to Commercial Trademark Services (Far East) Pte Ltd and Lionel Security Services Pte Ltd (collectively hereinafter referred to as `CTS`).

At the taxation of the bill of costs, the respondents objected in principle (whilst reserving their right to object to quantum) to the inclusion of these fees in the bill of costs. The AR directed that an application be taken out by the plaintiffs to determine the construction and ambit of the settlement agreement with regard to the judgment order for the purpose of taxing the bill of costs presented by the appellants in the action. The respondents accordingly took out Originating Summons No 86 of 1991 in which they sought:

(1) a declaration that upon a true construction of the settlement agreement the appellants are not entitled to claim from the respondents the professional fees paid by the appellants to Messrs Coopers & Lybrand and CTS; and

(2) a declaration that items 639 and 641 of the appellants` Bill of Costs No 572 of 1990 be struck off.

At the hearing below Goh Joon Seng JC granted an order in terms of prayer (1). He also made the following order:

... a declaration that the defendants (ie the appellants) are not entitled to claim party and party costs in respect of items 639 and 641 of the defendants` Bill of Costs No 572/90 filed with regard to Suit No 5626 of 1986.

The clauses in the settlement agreement reached on 8 September 1989 relevant to these proceedings were:

Clause 2: by which the first, second, third and sixth defendants undertook to pay $400,000 to the appellants.

Clause 3(a): by which the said defendants agreed to pay to the plaintiffs their costs of the action, the same to be taxed if not agreed.

Clause 7 which reads:

In consideration of the mutual agreements and undertakings set out in this agreement:

(i) The plaintiffs in the suit unconditionally and irrevocably release and discharge the defendants in the suit, and each of them from any and all claims, demands and liabilities of whatsoever nature and whensoever arising or incurred up to and inclusive of the date hereof, including but not limited to the claims in the suit ...

The learned judicial commissioner noted that under cl 7, the appellants had agreed to release the respondents from `all claims ... including but not limited to the claims in the suit ... .` In his view, the words ` claims in this suit` were clear and unambiguous. They meant what was claimed by the appellants in the action, ie injunctive relief, damages and costs. Applying Lord Wilberforce`s dicta in Prenn v Simmonds, 1 he looked at the `genesis` of the agreement which was the statement of claim filed by the respondents in Suit No 5626 of 1986. In para 12 where the damages claimed were particularized, the disputed items had been expressly included. He held that these items, although they could have been claimed as costs, could not now be recovered as costs in the action as they had already been included in the damages claim and formed part of the settlement.

Having found the terms of the agreement to be unambiguous, the learned judicial commissioner declined counsel`s invitation to look at the surrounding circumstances leading to the agreement.

It was also appellants` counsel`s submission in the court below that unless and until the judgment order was set aside or varied the appellants were entitled to enforce the judgment order and have their bill of costs taxed in the usual way. Clause 4 of the order provided that ` The first, second,...