CSR South East Asia Pte Ltd (formerly known as CSR Bradford Insulation (S) Pte Ltd) v Sunrise Insulation Pte Ltd

• Jurisdiction: Singapore
• Judge: MPH Rubin J
• Judgment Date: 13 May 2002
• Neutral Citation: [2002] SGHC 106
• Citation: [2002] SGHC 106
• Defendant Counsel: M Segaram (Segaram & Co)
• Published date: 19 September 2003
• Plaintiff Counsel: Jason Lim (Michael Khoo & Partners)
• Date: 13 May 2002
• Docket Number: District Court Suit No 1771 of (Registrar's Appeal No 600006 of 2002)
• Court: High Court (Singapore)
• Subject Matter: Whether creditor's conduct evidences acceptance of satisfaction of debt,Remedies,Consent order following settlement agreement,Nature of consent order,Whether judgment irregular and to be set aside ex debito justitiae,Whether creditor's remedies in suspension until dishonouring of cheque,Regularity of judgment,Whether consent order evidences contract between parties,Contract,Judgment failing to take into account debtor's payment in satisfaction of debt,Court judgments,Default judgment,Civil Procedure,Creditor accepting and retaining debtor's cheque,Courts and Jurisdiction,Judgments and orders,Whether defendants in breach of consent order

defendants were in breach of consent order Whether plaintiffs entitled to enter default judgment

Civil Procedure

Entering of default judgment Failure of plaintiffs to take in account sums paid by defendants Whether judgment should be set aside ex debito justitiae

Facts

On 18 June 2001, the plaintiffs and the defendants arrived at a negotiated settlement in relation to their claim and counter-claim in DC Suit 1771/98. A consent order recorded by the court provided inter alia that the defendants were to pay the plaintiffs the sum of $21,718.92 in 4 equal instalments of S$5,429.73 each commencing on the 30^th day of June 2001 and thereafter on the 30^th day of each succeeding month; and in the event of default in any of the instalment payment on the part of the defendants, the plaintiffs shall be at liberty to enter judgment on the plaintiffs claimed sum of S$36,343.92 less any payments received from the defendants together with interest and costs. The defendants paid and the plaintiffs received the first three instalment payments in compliance with the terms of the consent order. The fourth and final instalment fell due on 1 October 2001 (30 September 2001 being a Sunday). A cheque drawn by the defendants dated 29 September 2001 was reportedly mailed to the plaintiffs at about 6.30pm on 1 October 2001 and was received by the plaintiffs only on 3 October 2001. The plaintiffs deemed the late arrival of the cheque to be in breach of the consent order and entered judgment against the defendants for the sum claimed originally by them in the suit less the amount of the three instalment sums. The defendants applied to set aside the default judgment, submitting that the posting of the cheque at 6.30pm on 1 October 2001 would have constituted compliance with the said consent order. Their application was dismissed by the Deputy Registrar and the defendants appealed unsuccessfully to a District Judge. The defendants appealed again to the High Court. In the course of the appeal, another feature suddenly surfaced. The High Court was informed that the plaintiffs, after having received the defendants cheque that was forwarded for the purposes of meeting the defendants fourth and final instalment obligation, retained possession of it and without telling the defendants what they were going to do with the cheque, proceeded to enter default judgment against the defendants for a sum which did not include the amount of the said cheque. Whilst the terms of the draft judgment forwarded to defendants counsel for their approval was still under contest, the cheque was banked in by the plaintiffs and had the sum stated in the said cheque credited into the plaintiffs account.

Held

, allowing the appeal

(1) The consent order expressly provided for a strict time frame for the instalment payments and a default clause spelling out the consequences of non-compliance with the said instalment arrangements. The defendants argument that the posting of the cheque at 6.30pm on 1 October 2001 would have constituted compliance with the said consent order, to say the least, was both untenable and disingenuous. The order was unequivocal and stipulates payment by the 30th of each succeeding month. In regard to the fourth instalment, the payment should have been made to the plaintiffs on or before 1 October 2001 but in the present case the cheque did not reach the plaintiffs until 3 October 2001. The terms of the consent order imports a clear implication that time is indeed of the essence in relation to the instalment payments and any default thereof would trigger the consequences stipulated under cl 4 of the said consent order. There could be no other interpretation. The consent order did indeed evidence a contract between the parties and given the factual background thus far, there was no justification to vary or modify the said order, without the consent of both the parties (See 11-12).

(2) The plaintiffs holding on to the defendants cheque for the fourth instalment was no mere accident or inadvertence but a conscious act. They had misjudged the legal implications of their action in retaining and subsequently cashing the said cheque. By proceeding to enter judgment for a sum which did not take into account the amount stated in the fourth instalment cheque was irregular and ought to be set aside ex debito justitiae (See 21).

Case(s) referred to

Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 All E R 377 (CA) (refd)

Australasian Automatic Weighing Machine Company v Walter [1891] WN 170

Hughes v Justin [1894] 1 QB 667

Bolt & Nut Co (Tipton) Ltd v Rowlands Nicholls & Co Ltd [1964] 2 QB 10 (CA)

Legislation referred to

Rules of Court, Order 3 r 3

Judgment

GROUNDS OF DECISION

1 The issue in this appeal revolves around a default provision in relation to instalment payments contained in a consent order made by the court, following a settlement agreement between the plaintiffs and the defendants in this suit

2 The background facts which give rise to the appeal before me are set out by the Learned District Judge in her grounds of decision and they could be summarised as follows.

3 On 18 June 2001, the plaintiffs and the defendants arrived at a negotiated settlement in relation to their claim and counter-claim in the suit herein. Following the settlement on the same day, a consent order was recorded by the court as follows:

1. the Defendants to pay the Plaintiffs the sum of $21,718.92 in 4 equal instalments of S$5,429.73 each commencing on the 30^th day of June 2001 and thereafter on the 30^th day of each succeeding month;

2. each party to bear [its] own cost;

3. the Notice of Discontinuance for the Plaintiffs and the Defendants to be filed within 14 days from the date of the last payment;

4. in the event of default in any of the instalment payment on the part of the Defendants, the Plaintiffs shall be at liberty to enter Judgement on the Plaintiffs claimed sum of S$36,343.92 less any payments received from the Defendants together with interest at the rate of 6% per annum from the date of Writ of Summons to the date of Judgment, costs to be agreed or taxed and the Defendants counterclaim shall be deemed to be withdrawn.

4 Following the consent order the defendants paid and the plaintiffs received the first three instalment payments in compliance with the terms of the consent order. The fourth and final instalment fell due on 30 September 2001 which was a Sunday. However, since the due date for the last instalment payment fell on a Sunday, the provisions of O 3 r (3) of the Rules of Court which stipulate that where the time prescribed by these Rules or by any Judgment, order or direction for doing any act expires on a day other than a working day, the act shall be in time if done on the next working day, became applicable. Consequently, the due date for payment for the last instalment was 1 October 2001. Unhappily for the defendants, a cheque drawn by the defendants dated 29 September 2001 was reportedly mailed to the plaintiffs at about 6.30pm on 1 October 2001 and was received by the plaintiffs only on 3 October 2001. The plaintiffs deemed the late arrival of the cheque to be in breach of the consent order. Consequently, they purported to exercise their rights reserved under clause 4 of the consent order and entered judgment against the defendants on 11 October 2001 for the sum claimed originally by them in this suit less the amount of the three instalment sums. Insofar as material, the relevant segment of the judgment so entered by the plaintiffs against the defendants on 11 October 2001, following the said breach, reads as follows:

And default having been made in that the Defendants had failed to pay the final instalment of $5,429.73 by the 1^st day of October 2001, IT IS THIS DAY ADJUDGED that Judgment be entered against the Defendants for:-

1. the sum of $20,054.73 being the balance of the Plaintiffs claimed sum of $36,343.92 less payments of $16,289.19 received;

2. interest at the rate of 6% per annum from the date of Writ of Summons to the date of Judgment;

3. costs to be agreed or taxed,

and the Defendants counterclaim shall be deemed to be withdrawn.

5 The defendants applied to the court on 19 October 2001 to set aside the said default judgment contending that the cheque sent out by them allegedly on 1 October 2001 was in compliance with the consent order. Their application to set aside the judgment was heard on 13 November 2001 and turned down in the first instance by the Deputy Registrar of the Subordinate Courts. The defendants appeal to the District Judge which was heard on 21 December 2001 was equally unsuccessful. It would appear from the grounds delivered that the main argument advanced by the defendants before her was...