Eurogreen Building Products Private Limited v Savourer Pte Ltd

• Jurisdiction: Singapore
• Judge: Lewis Tan
• Judgment Date: 01 September 2022
• Neutral Citation: [2022] SGMC 53
• Court: Magistrates' Court (Singapore)
• Docket Number: Magistrate Court Originating Claim No 49 of 2022 (Summons No 2889 of 2022)
• Published date: 06 September 2022
• Year: 2022
• Hearing Date: 26 August 2022
• Plaintiff Counsel: Chuah Hui Fen, Christine (Tan Oei & Oei LLC)
• Defendant Counsel: A Rajandran (A Rajandran)
• Subject Matter: Civil Procedure,Pleadings,Striking out,Res judicata
• Citation: [2022] SGMC 53

Deputy Registrar Lewis Tan: Introduction

The Claimant sued the Defendant in the Small Claims Tribunal (“SCT”), seeking payment for materials that it had supplied pursuant to a construction contract. The Defendant resisted the claim by relying on a settlement agreement between the parties which allegedly set-off the claimed sum. The tribunal magistrate found that a large portion of the claim and the defence of set-off fell outside his jurisdiction, and so only a small aspect of the claim was disposed of on the merits.

The Claimant then brought the present action, claiming the portion of the invoiced amount which was deemed to fall outside the SCT’s jurisdiction, and the Defendant sought again to set off this amount by relying on the settlement agreement. The Claimant considered this set-off defence to be, amongst others, a re-litigation of matters, and sought to strike off much of the Defence and Counterclaim (“DCC”). After hearing parties, I dismissed the Claimant’s striking out application.

Given that the application was brought under the new Rules of Court 2021 (“ROC 2021”), and with the lack of reported decisions in this regard, I now provide the fuller reasons for my decision.

Facts

The Defendant, Savourer Pte Ltd, was a sub-contractor involved in the refurbishment of the link bridges at Changi Airport Terminal 2. As part of the works, the Defendant engaged the Claimant for the supply of wall and roof panels. In addition, the Defendant sub-contracted the works pertaining to the removal and reinstallation of these roof and wall panels to another contractor, Island Construction Pte Ltd (“Island Construction”).

Amidst the installation of the panels, issues appeared to arise regarding the different colour tones on said panels, and this led to several meetings between the representatives of the Claimant, Defendant, and Island Construction. According to the Defendant, the result of these meetings was that (a) the Claimant would supply replacement panels at its own expense, and (b) Island Construction would carry out the rectification works, which would take an estimated two weeks and cost about $28,000. Upon completion of the rectification works, Island Construction submitted their invoice to the main contractor of the project. The main contractor then invoiced the Defendant for the said works.

It is unclear from the pleadings whether the Defendant has paid Island Construction and/or the main contractor for the rectification works. Nonetheless, any such payment would not have directly affected the Claimant because, as the Defendant pleads, there was an alleged settlement agreement between the Claimant and the Defendant whereby the Claimant would only have to pay the Defendant $20,000 plus Goods and Services Tax (“GST”) for the rectification works carried out by Island Construction (hereinafter, the “Settlement Agreement”). Pursuant to this Settlement Agreement, the Claimant made partial payment of $5,000 plus GST to the Defendant, leaving a sum of $15,000 plus GST owing to the Defendant.

The Claimant strenuously refutes the existence of said Settlement Agreement, and it instructed solicitors to issue a letter of demand claiming $22,682.61 from the Defendant for the supplied materials. Being of the view that $15,000 plus GST ($16,050) remained outstanding under the Settlement Agreement, the Defendant proceeded to tender a cheque for $6,632.61 (ie, $22,682.61 minus $16,050), but this did not put the matter to a close.

Procedural history

Instead, the Claimant lodged a claim against the Defendant in the SCT, claiming the sum of $16,050.¹ The Defendant resisted the claim, arguing that the Claimant had acknowledged its mistake in the supply of certain materials which had already been installed by Island Construction. After some negotiations, the Claimant agreed to compensate $20,000 plus GST, but only $5,350 (ie, $5,000 plus GST) was paid. Therefore, $16,050 remained owed by the Claimant to the Defendant. The Claimant disputed this, asserting that the $5,350 that it had paid amounted to a “full and final settlement of any disputes that had arisen”.²

Dealing first with the Claimant’s claim for $16,050, the learned Tribunal Magistrate (“TM”) allowed the claim for $4,791.46. As regards the remaining $11,258.54, the TM held that this sum stemmed from a contract which value exceeded the SCT’s jurisdiction of $20,000, and so that portion of the Claimant’s claim fell outside his jurisdiction. Turning to the Defendant’s defence of set-off, the TM held that this also fell outside of his jurisdiction as the set-off “d[id] not apply to the portion of the claim [ie, $4,791.46] that [was] within the Tribunal’s jurisdiction”.

Following the TM’s decision, the Claimant brought the present action, claiming for the remaining $11,258.54 which fell outside the TM’s jurisdiction. The Defendant resisted this claim for much the same reasons provided at [8] above, namely that the claimed sum should be set-off against the $16,050 (ie, $15,000 plus GST) which remains outstanding under the Settlement Agreement. Alternatively, the Defendant was entitled to counterclaim for $16,050 and/or damages to be assessed for the rectification works done by Island Construction.

The striking out application

By way of the present summons, the Claimant seeks to strike out portions of the DCC which rely on the Settlement Agreement. According to the Claimant, such references to the Settlement Agreement by the Defendant should be struck out pursuant to O 9 rr 16(1)(b) or 16(1)(c) of ROC 2021 for being an abuse of process or as it would be in the interests of justice to do so. This is for three reasons: First, the TM had held that both legal and equitable set-off could not apply in the Defendant’s favour, so that by operation of the doctrine of res judicata, the Defendant is barred from raising its counterclaim and/or relying on the Settlement Agreement in this action. Second, the Defendant’s position that the Settlement Agreement was between the Claimant and the Defendant is inconsistent with the evidence given at the SCT proceedings, where the Defendant’s position was that the sum under the said agreement should be paid by the Claimant to Island Construction (and not the Defendant).³ Closely related to the second reason, the Defendant is, by pleading that the Settlement Agreement was entered into between the Claimant and the Defendant, attempting to “get around the issue of privity” after the TM had observed that “it does not appear that [the Defendant] was party to [the Settlement Agreement]”.⁴

Applicable principles

The application was brought under the new ROC 2021 regime, which differs from the Rules of Court 2014 (“ROC 2014”) in substantial ways. For ease of comparison, the rules providing for the striking out of pleadings under both sets of Rules (ie, O 18 r 19(1) of ROC 2014 and O 9 r 16(1) of ROC 2021) are set out:

O 18 r 19(1) of ROC 2014

O 9 r 16(1) of ROC 2021

19.—(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement of any writ in the action, or anything in any pleading or in the endorsement, on the ground that — (a) it discloses no reasonable cause of action or defence, as the case may be; (b) it is scandalous, frivolous or vexatious; (c) it may prejudice, embarrass or delay the fair trial of the action; or (d) it is otherwise an abuse of the process of the Court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.

16.—(1) The Court may order any or part of any pleading to be struck out or amended, on the ground that — (a) it discloses no reasonable cause of action or defence; (b) it is an abuse of process of the Court; or (c) it is in the interests of justice to do so, and may order the action to be stayed or dismissed or judgment to be entered accordingly.

The differences notwithstanding, similarities remain – for example, both O 18 r 19(1)(d) of ROC 2014 and O 9 r 16(1)(b) of ROC 2021 provide for the power to strike out or amend any pleading on the ground that it is an abuse of process of the Court. Further guidance is provided in the recent decision of Iskandar bin Rahmat and others v Attorney-General and another [2022] SGCA 58 (“Iskandar bin Rahmat”). There, in explaining the applicable test for each limb under O 9 r 16(1) of ROC 2021, the Court of Appeal relied on cases that pre-dated ROC 2021, thus showing that such authorities remain relevant in assessing the merits of a striking out application under the new regime (Iskandar bin Rahmat at [17]–[19]): 17 Under O 9 r 16(1)(a) [of] ROC [2021], the test is whether the action has some chance of success when only the allegations in the pleadings are concerned: Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others [1997] 3 SLR(R) 649 (“Gabriel Peter”) at [21]. If that is found to be the case, then the action will not be struck out. 18 Order 9 r 16(1)(b) allows the court to strike out pleadings which constitute an abuse of process of the court. The inquiry here includes considerations of public policy and the interests of justice, and signifies that the process of the court must be used bona fide and properly and must not be abused; the court will prevent improper use of its machinery and the judicial process from being used as a means of vexation and oppression in the process of litigation: Gabriel Peter at [22]. 19 In addition, Order 9 r 16(1)(c) allows the Court to strike out pleadings when it is in the interests of justice to do so. … [T]his gives effect to the court’s inherent jurisdiction to prevent injustice, such as where the claim is plainly or obviously unsustainable: The “Bunga Melati 5” [2012] 4 SLR 546 at [33].

This approach of referring to decisions that predate the new Rules has also been adopted in other cases where the...