Chan Kern Miang v Kea Resources Pte Ltd

• Jurisdiction: Singapore
• Judge: Chao Hick Tin J
• Judgment Date: 20 April 1998
• Neutral Citation: [1998] SGCA 25
• Citation: [1998] SGCA 25
• Date: 20 April 1998
• Published date: 19 September 2003
• Plaintiff Counsel: Mohan Pillay and Chan Hock Keng (Wong Partnership)
• Docket Number: Civil Appeal No 52 of 1998
• Defendant Counsel: Hee Thee Fong and Doris Lee (Hee Theng Fong & Co)
• Court: Court of Appeal (Singapore)
• Year: 1998

Judgment:

CHAO HICK TIN J

(delivering the grounds of decision of the court): This was an appeal against certain interlocutory decisions of GP Selvam J made in respect of the applications in two summons-in-chambers numbered SIC 1027/98 and SIC 1325/98 as well as an oral application. At the conclusion of the hearing we dismissed the appeal. We now give our reasons.

2.In SIC 1027/98, the appellant, Chan Kern Miang (Chan), applied for the proceedings in Suit No 2000 of 1996 (Chan is the defendant in the action) to be stayed until the respondent, Kea Resources Pte Ltd (Kea Resources), amend their writ of summons and statement of claim by adding one Ngiam Choong Kam (Ngiam) as a co-defendant in S 2000/1996. In SIC 1325/98 Chan applied for the hearing dates, 30 March to 3 April 1998, fixed for the continued hearing of the consolidated actions (S 2004/1993 with S 2000/1996) to be vacated and fresh dates fixed. During the course of hearing SIC 1027/98, as an alternative, counsel for Chan made an oral application for leave to issue a third-party notice against Ngiam. The learned judge dismissed all three applications.

3. Background

Kea Resources, a company incorporated in October 1988, is engaged in the business of shipbuilding and the sale and purchase of vessels. Then it had two shareholders, Kea Holding Pte Ltd, which held 75% of the shares, and Ngiam, who held the remaining 25%. Ngiam was the managing director of Kea Resources from 18 October 1988 to 11 August 1993 when he resigned.

4.Chan was appointed as the business development manager of Kea Resources in January 1989. He was promoted to assistant general manager on 2 September 1991. He resigned from Kea Resources on 15 May 1992.

5.Marine Technologies Holdings Pte Ltd (MTPL) was a company incorporated on 29 July 1991, with Lim Koh Chee and Tan Yong Aun each holding one share. In March 1992, Ngiam sounded out Chan of the possibility of both of them joining MTPL. On 30 April 1992 Chan became a shareholder and director of MTPL. Kea Resources did not know of Chan`s involvement in MTPL. Ngiam represented Kea Resources in entering into the contracts with MTPL. Kea Resources felt that Ngiam and Chan had conspired to injure its business by selling barges to MTPL at an undervalue and in not collecting money owed by MTPL to Kea Resources.

6.On 7 October 1993 Kea Resources commenced Suit 2004/93 against MTPL where it claimed for a sum of $600,000, being the balance due under nine contracts for the sale of barges to MTPL. It also claimed for an account of profits made by MTPL on the ground that barges were sold to MTPL at an undervalue due to breaches of fiduciary duties on the part of Chan and Ngiam.

7.In November 1993, Kea Resources also instituted Suit No 2270/93 against Ngiam for breach of fiduciary duties as managing director and for negligence. On 5 December 1994 Kea Resources and Ngiam entered into a settlement agreement to resolve their disputes (`the settlement agreement`), including Suit 2270/93. Under the settlement, Ngiam was to transfer 500,000 shares in Kea Resources to Kea Holding Pte Ltd at a fair value to be fixed by the accountant of Kea Resources, and Kea Resources was to discontinue Suit No 2270/93 (among other actions) against Ngiam.

8.On 17 October 1996 Kea Resources commenced Suit No 2000/96 against Chan for damages for breach of the implied terms of his contract of employment, for conspiracy and for knowing receipt of proceeds in breach of trust, arising out of broadly the same transactions in which Ngiam was involved. Kea Resources prayed for a declaration that Chan was a constructive trustee in respect of the profits which he made from the sale of the barges.

9.Suit No 2270/93 and Suit No 2000/91 were consolidated and the consolidated actions were heared by GP Selvam J for seven days before it was adjourned for further dates to be given for the continued hearing. At the time of the adjournment, Kea Resources was about to close its case as all its principal witnesses had been called and cross-examined. Only one more witness on valuation remained to be called. At that part of the hearing, Chan was represented by M/s C Arul & Partners. However, on 24 October 1997 M/s Wong Partnership took over the conduct of the defence of Chan from M/s C Arul & Partners.

10.On 14 November 1997 the parties appeared before the learned Registrar who fixed 30 March-3 April 1998 and 24-30 April 1998 (altogether ten hearing days) for the resumed hearing. The latter set of dates were later altered to 27-30 April and 6 May 1998. On 19 November 1997 Chan`s leading counsel, Mr Mohan Pillay, was informed by MINDEF that his reservist training scheduled for 9-14 February 1998 had been postponed to 30 March-3 April 1998. On 11 December 1997 Mr Pillay wrote to MINDEF requesting for a deferment on account of this case. On 14 January 1998 MINDEF turned down the request. On 23 January 1998 Mr Pillay asked MINDEF to review their decision. On 2 February 1998, MINDEF replied affirming their decision. This brought about the application in SIC 1325/98.

11.To complete the picture, we ought to mention that in December 1995, Ngiam instituted OS 1181/95 against Chan, MTPL and another party over a dispute on the ownership of certain shares in MTPL. On 16 September 1996, midway through the trial in the High Court, the parties entered into an arbitration agreement and the action was discontinued.

12. Decision below

In his brief grounds of decision the learned judge gave the following reasons for the decisions he made: (i). Kea Resources had almost concluded its case. To compel it to add another party as a second defendant at this stage of the proceedings, which would require Kea Resources to revise its statement of claim, and literally to start all over again, was oppressive; all the more so when Kea Resources had entered into a settlement agreement with Ngiam.

(ii). Chan had plenty of time to apply to add Ngiam as a party but chose not to do so.

(iii). Costs could not adequately compensate the plaintiffs for the loss of time and effort if the application had been allowed.

(iv). For the same reasons, the addition of a third party at this juncture was equally objectionable. It would enable Chan to achieve indirectly what he could not achieve directly.

(v). Vacating the hearing dates was disallowed as Chan and their solicitors had ample time to arrange for another counsel/solicitor in the same firm to take over the conduct of the case and vacating the five days would cause `administration difficulties and loss of public funds.`

13. Vacating of dates

We shall first deal with the issue of vacating hearing dates. In recent years, in the interest of prompt administration of justice and efficiency and to avoid wastage of judicial time, the High Court adopted a strict view on the question of vacating hearing dates. Strong compelling grounds must exist before the court will consider the exercise of its discretion.

14.In the present case, M/s Wong Partnership (Mr Mohan Pillay in particular) took over the conduct of...