Ching Chew Weng Paul, deceased v Ching Pui Sim

• Jurisdiction: Singapore
• Judgment Date: 28 March 2011
• Date: 28 March 2011
• Docket Number: Suit No 594 of 2008 (Summonses Nos 4104, 4280 and 4569 of 2010)
• Court: High Court (Singapore)

Ching Chew Weng Paul, deceased, and others

Plaintiff

and

Ching Pui Sim and others

Defendant

[2011] SGHC 69

Steven Chong J

Suit No 594 of 2008 (Summonses Nos 4104, 4280 and 4569 of 2010)

High Court

Civil Procedure—Judgments and orders—Setting aside judgment made after trial—Alleged fraud—Reasons for absence from trial—Reasons for delay in application—Ambit of fraud exception—Actual fraud had to be proved—Erroneous and inadvertent adduction of incorrect evidence did not amount to deliberate fraud—Failure to adduce corroborative evidence did not amount to actual fraud—Erroneous insistence on rights based on opinion or inference reasonably drawn did not amount to actual fraud—Order 35 r 2 (Cap 322, R 5, 2006 Rev Ed)

The plaintiff commenced action against the defendants to recover assets which his father, the late Ching Kwong Kuen (‘KK Ching’), had intended to leave behind for him. Shortly after the defence was filed, the second defendant passed away and the plaintiff applied for the fifth to ninth defendants to be substituted as parties to continue the action against the second defendant's estate. The fifth to ninth defendants elected not to participate in the proceedings at all. At the end of trial, the first, second and fourth defendants were ordered to transfer various assets including shares in several companies back to the estate of KK Ching under which the plaintiff was the sole beneficiary (‘the Judgment’). The fifth to ninth defendants, representing the estate of the second defendant, filed a notice of appeal on 4 January 2010, and applied for a stay of execution (‘the stay application’). The stay application was dismissed upon an undertaking from the estate of KK Ching not to transfer the assets pending the outcome of the appeal. The appeal, however, lapsed as the fifth to ninth defendants failed to file the record of appeal, core bundle and the appellants' case altogether. The plaintiff had also since passed away.

Subsequently on 9 September 2010, the fifth to ninth defendants applied under O 35 r 2 of the Rules of Court to set aside the Judgment on the ground that it was procured by fraud (‘the application’). The allegation of fraud was directed against the first defendant, and it was alleged that the plaintiff's evidence at trial was based on the evidence of the first defendant.

Held, dismissing the applications:

(1) Where judgment had been entered after trial in the defendant's absence, the predominant consideration in deciding whether to set aside the judgment was the reason for the defendant's absence, and a court was reluctant to set aside the judgment if the absence was deliberate and contumelious. The authorities showed that absence from trial due to personal reasons would not necessarily prevent the court from finding the absence to be deliberate. It was, however, emphasised that there was no overriding principle that personal reasons would never be accepted as valid reasons to explain the absence from the trial; as the court would be inclined to set aside the judgment where the personal reasons given could show that the absence from trial was wholly innocent or due to mistake or unavoidable accident. In the present case, the fifth to ninth defendants were well aware of the trial dates, but chose not to participate in the trial. The purported reason that they trusted the plaintiff to conduct the proceedings was a disingenuous one, as it was contrary to the complaints and insinuations made against the plaintiff's unreasonable behaviour. Furthermore, the fifth to ninth defendants were fully aware of the evidence that was alleged against the second defendant from the outset: at [13] to [20].

(2) The reasons for the delay in bringing the application were unconvincing. The alleged inadvertence of the former solicitors was, in and of itself, not a good reason to explain the delay. An application for leave to file and serve the appeal documents out of time could have been made (but was not). Furthermore, the lapse in filing the appeal documents could not be a valid excuse for the delay in bringing the application. Although the court found that the reasons for the fifth to ninth defendants' absence from trial and the late application to be wholly unconvincing, it would still be necessary to examine the allegations of fraud. This was because a judgment obtained by fraud could not be allowed to stand even if the reasons for the defendant's absence or delay in filing the application were found to be unconvincing: at [13] to [27].

(3) The court observed that it was useful to set out some relevant facts to understand the entire case in its proper context. First, the plaintiff had, at all material times, openly asserted that the second defendant held the relevant assets on trust for KK Ching. This was corroborated by the first and third defendant's evidence. Second, to avoid any issue of irreparable prejudice, in view that the plaintiff had since passed away, the fifth to ninth defendants made no allegation of fraud against the plaintiff (but had instead directed them at the first defendant). They alleged that the plaintiff's evidence was entirely based on what the first defendant had told him about the trust assets held by the second defendant. However, it was important that the plaintiff's evidence was not limited to information provided by the first defendant, but had included the admission made by the second defendant that the trust assets had belonged to the plaintiff. The fifth to ninth defendants had failed to challenge this aspect of the plaintiff's evidence. This omission was fatal to the application, as it was clear that the Judgment was made in part based on the unchallenged evidence of the plaintiff that the second defendant had admitted to the existence of the trusts. Third, the third defendant gave evidence that the second defendant did hold the assets on trust for KK Ching: at [31] to [35].

(4) The application was premised solely on the ground of fraud. The applicant alleging fraud should, in the interests of finality of judgments, generally adduce new evidence which could not have been discovered at the time of trial with due diligence, but this requirement ought not to be imposed rigidly such as to cause injustice in a situation where the evidence uncovered fraud. To successfully set aside the Judgment, the applicant has to show that the Judgment was procured by actual fraud that struck at the root of the litigation. The court, in a review of the authorities, observed the requirements to prove actual fraud: first, a case of erroneous or misleading evidence, short of a meditated or intentional contrivance to mislead or deceive the court, did not amount to actual fraud. Second, mere suspicion or conjecture was insufficient to establish actual fraud. Third, a witness' inadvertent adduction of false evidence (that is, incorrect evidence) without more did not equate to deliberate fraud; it would at best affect the witness'credibility. Fourth, the failure to adduce evidence to corroborate the opponent's case, where the adduction of such evidence would not in any event disclose any new fact, did not amount to actual fraud. Finally, the erroneous insistence on rights based on an opinion or an inference that was fairly and reasonably reached did not amount to fraud. In the decisions where actual fraud was established, it was found that the parties had actively concealed a material fact from the court, or had deliberately misled the court. The rationale for the high threshold to prove actual fraud was that the usual recourse for a party who was dissatisfied with a judgment would be to file an appeal on the ground that it was wrongly decided: at [38] to [60].

(5) The evidence relied on by the fifth to ninth defendants was not in fact fresh evidence, as the evidence was either in the possession, custody and control of the second defendant at all material times, or could have been made available without any difficulty: at [62].

(6) With regard to the shares issued in KK Holdings, the first defendant had merely made an error in using the word ‘transfer’ instead of ‘allot’ in her evidence. Significantly, she made the same error in respect of the one share which she herself acknowledged was held on trust for KK Ching. The court found that the burden of proving actual fraud could not be discharged by merely pointing out the first defendant's inadvertent use of imprecise language: at [63].

(7) It was alleged that the first defendant's evidence in relation to shares in National Aerated was fraudulent because the share register showed that the shares were transferred from KK Ching to the second defendant in 1985 instead of 1982. The court observed that it was undisputed that a rights issue was made on 8 January 1982, where KK Ching, like the other shareholders (except for the Yap family), was allotted one share in National Aerated for every one share owned. A further 38,350 shares were allotted to KK Ching from an excess rights issue in February 1982. KK Ching transferred 62,250 shares to the first defendant to hold on trust on 15 October 1982, and the balance 101,100 shares to the second defendant on 8 July 1985. It could at most be said that the first defendant made an error in stating that the transfer of shares to the second defendant occurred in 1982 instead of 1985: at [66] and [67].

(8) The fifth to ninth defendants alleged that the shares owned by KK Ching in National Aerated were paid by the second defendant. This allegation was, however, based on a journal where the entries were shown to be equivocal and inconclusive; there were unresolved doubts on the reliability and accuracy of the journal. It was unclear how this journal was relevant to the allegation of fraud, given that the plaintiff and first defendant had no access to the financial journal when they gave evidence at trial: at [68] to [70].

(9) The fifth to ninth defendants alleged that there was no...