Otto Systems Singapore Pte Ltd v Greenline-Onyx Envirotech Phils, Inc

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 29 September 2006
• Neutral Citation: [2006] SGHC 176
• Docket Number: Suit No 688 of 2005
• Date: 29 September 2006
• Published date: 04 October 2006
• Year: 2006
• Plaintiff Counsel: Teh Ee-Von (Infinitus Law Corporation)
• Citation: [2006] SGHC 176
• Defendant Counsel: Tan Kah Hin (Choo Hin & Partners)
• Court: High Court (Singapore)
• Subject Matter: Private documents,Plaintiff company and defendant company unable to agree as to exact amount owing under settlement agreement,Evidence,Whether letter subject to without prejudice privilege and inadmissible as evidence,Plaintiff applying for trial of preliminary issue of whether letter from defendant to plaintiff challenging amount of debt owing from defendant amounting to acknowledgment of debt,Documentary evidence,Whether letter containing acknowledgment of debt

29 September 2006

Judith Prakash J:

1 In this action, the plaintiff had alternative claims. The first claim was based on a cheque issued by the defendant in favour of the plaintiff that had been dishonoured by non-payment. The second claim was for the sums of S$399,561.03 and DM251,976 as the amount of indebtedness that the defendant had acknowledged as being due to the plaintiff. On the first day of the trial, the plaintiff applied for the trial of a preliminary issue, namely, whether the defendant had by its solicitors’ letter dated 23 May 2002 and/or other documents, acknowledged its debt to the plaintiff. I granted leave for the trial of the preliminary issue and, after hearing the parties on that issue, I granted judgment for the plaintiff in the amount claimed, interest and costs. The defendant has appealed.

Background

2 The plaintiff is a company incorporated in Singapore that is in the business of supplying waste disposal and waste management equipment and apparatus. The defendant is a company incorporated in the Philippines and it carries on the business of waste management and waste collection, transportation and disposal.

3 In 1996 and 1997, the defendant bought equipment from the plaintiff. The defendant made only partial payment for the equipment. In September 1997, the parties entered into a settlement agreement to provide for the payment of the outstanding balance due to the plaintiff (“the settlement agreement”). The defendant made several payments to the plaintiff but did not adhere to the schedule in the settlement agreement. Some time toward the end of 2000, the defendant stopped paying altogether even though there was still an outstanding balance.

4 On 18 April 2002, the plaintiff’s Filipino attorneys, M/s Sycip Salazar Hernandez & Gatmaitan, made a demand on the defendant for payment. The letter stated that the outstanding balances due to the plaintiff were S$670,000 and DM66,376.52. The defendant was notified that if full settlement of the amounts demanded was not made within five days, legal proceedings would be commenced. The defendant’s attorneys, M/s Puyat Jacinto & Santos, replied on 29 April 2002 to ask that a meeting be scheduled to discuss settlement of any outstanding obligation of the defendant to the plaintiff. The attorneys also said that they were reviewing the defendant’s records to determine the total amount that it had paid to the plaintiff for the equipment. On 30 April 2002, the plaintiff’s attorneys rejected the request for a meeting but asked for the defendant’s proposals regarding payment of the account.

5 On 23 May 2002, M/s Puyat Jacinto & Santos wrote the letter that came to be at the centre of the case. It is worthwhile quoting that letter at some length. It states:

In the course of our review of the outstanding account of Greenline Envirotech Philippines, Inc. (“Greenline”) in favour of your client, Otto Systems (S) Pte. Ltd. (“Otto Systems”), we discovered a substantial difference in amount between Greenline’s and Otto System’s respective accounts of the remaining balance of Greenline’s obligation.

Thus, per your letter of 18 April 2002, the outstanding obligation of Greenline to Otto Systems to the total of S$670,000 and DEM66,376.52. On the other hand, based on Greenline’s own account, its outstanding obligation to Otto Systems amounts to the total of S$399,561.03 and DEM251,976.00. For reference, we attach a copy of Greenline’s Summary of Payments for the years 1998 – 2000.

Based on our review of the 1998-2000 payments made by Greenline to Otto Systems, it appears that the latter erroneously used the then prevailing conversion rate of the Peso to Singapore Dollar when it applied said payments to the outstanding account of Greenline.

Please note that under the 12 September 1997 “Agreement for Settlement of Outstanding Accounts Receivable” between the parties, the maximum ceiling exchange rate for payments to be made by Greenline is S$1.00 to Ppeso 20.00. We attach a copy of the agreement for your easy reference.

Greenline is prepared to present to Otto Systems its proposal for payment of its outstanding obligation. However, its proposal for payment is based on its account of the remaining balance of its obligation which is S$399,561.03 and DEM251,976.00.

6 The plaintiff at that stage did not accept that the amounts due were as stated by the defendant’s attorneys. It replied to reassert its claim for the amounts set out in its attorneys’ letter of 18 April 2002. In August 2002, the defendant’s attorneys sent the plaintiff’s attorneys a proposed schedule of payments. The schedule attached to this letter showed that the defendant would pay the plaintiff a total of S$407,061.03 and DM221,738.88. The plaintiff did not accept this and instead in November 2002, put forward a different schedule based on the amounts of S$407,061.03 and DM251,976. No agreement was reached on these figures either and the matter was then at an impasse.

7 This action was commenced in the Subordinate Courts in June 2004. Initially, the plaintiff’s claim was for the sum of 2m Philippine pesos or its Singapore equivalent being the amount of a cheque drawn by the defendant in favour of the plaintiff on 25 May 1998. Subsequently, the action was transferred to this court and the plaintiff amended its statement of claim to include an alternative claim based on the letter of 23 May 2002. The relevant paragraphs of the amended statement of claim read:

12. Further, in spite of not having adhered to the Settlement Agreement, the Defendants made ad hoc payments to the Plaintiffs in an attempt to settle their outstanding debt with the Plaintiffs. As at 31 December 2000, according to the Defendants’ calculations, the sum of S$399,561.03 and DEM251,976.00 remained outstanding. The Defendants had acknowledged their debt to the Plaintiffs through their solicitors letters dated 23 May 2002 and 5 August 2002.

13. In their solicitors’ letter dated 5 August 2002, the Defendants had proposed a payment scheme to repay the outstanding debt. However negotiations broke down and no further payments were made.

8 In response to these amendments, the defendant added the following paragraphs to its defence:

14 Paragraph[s] 12 and 13 of the Amended Statement of Claim are not admitted.

14[a] On 18^th April 2002 the Plaintiff demanded payment for S$670,000.00 and DEM 66,376.52.

14[b] The Defendant by their solicitors’ letter of 23^rd May disputed the sums aforesaid, inter alia, in that the currency conversion rate under the 1997 Agreement between the parties was not applied. The Defendant’s preliminary computation was S$399,561.03 and DEM 251,976 which sums were revised to S$407,061.03 and DEM 221,738.88 by way of the Defendant’s solicitors’ letter of 5 August 2002.

14[c] The Plaintiffs through their solicitors’ letter of [18 November 2002] rejected the said letter of 5 August 2002.

14[d] The parties could not agree on any amounts and as such there was no admission to any sum or sums.

14[e] The Plaintiffs in view of the [impasse] aforesaid, re-instituted proceedings in The Philippines without success.

14[f] In any event, the sums of S$407,061.03 and DEM 221,738.88 were covered by arrangement referred to in paragraph 7 of the Amended Statement of Claim and are, accordingly, time barred.

Determination of the preliminary issue

9 Under O 33 rr 2 and 5 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed), the court has the power to order any issue arising in a cause or matter to be tried before, at or after the trial of the matter and if it appears to the court that the decision of such issue substantially disposes of the cause or...