IBM Singapore Pte Ltd v Beans Group Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 23 December 2011
• Date: 23 December 2011
• Docket Number: Suit No 380 of 2011 (Registrar's Appeal No 243 of 2011)
• Court: High Court (Singapore)

IBM Singapore Pte Ltd

Plaintiff

and

Beans Group Pte Ltd

Defendant

[2011] SGHC 269

Lai Siu Chiu J

Suit No 380 of 2011 (Registrar's Appeal No 243 of 2011)

High Court

Civil Procedure—Setting aside of default judgment—Conditional leave to defend—Plaintiff subcontractor demanding payment for services rendered—Defendant contractor repeatedly failing to either dispute or make payment until just before execution of default judgment—Whether bona fides of defence called into question such that conditional leave to defend ought to be granted—Order 13 r 8 Rules of Court (Cap 322, R5, 2006 Rev Ed)

On 20 March 2009, the plaintiff entered into an agreement for the provision and maintenance of informational technology services (‘the Agreement’) with Singalab Pte Ltd (‘Singalab’). The plaintiff and defendant were joint owners of the project, with the defendant as main contractor, and the plaintiff as subcontractor. Around March 2010, there was a novation of the Agreement, with the defendant assuming Singalab's obligation to pay the plaintiff.

The plaintiff subsequently issued four invoices to the defendant for services rendered. As the defendant made no payment, invoices for late payment fees were also issued. The defendant neither disputed nor took issue with any of those invoices. The total sum due and owing was $798,454.52.

Prompted by the defendant's inaction, the plaintiff then sent three letters to demand payment. There continued to be no response. It was only after a formal notice of demand for payment under two of the invoices was sent by the plaintiff that the defendant responded, admitting liability but asking for more time. Despite this, and a further letter of demand from the plaintiff, nothing further was heard from the defendant.

The plaintiff thus commenced this suit, and obtained default judgment on 7 June 2011. The judgment was served on the defendant on 8 June 2011. On 16 June 2011, the defendant's solicitors wrote to the plaintiff's solicitors requesting a copy of the writ of summons. Even at this stage, there was no indication by the defendant that they intended to dispute liability under the invoices.

The plaintiff applied for and obtained a garnishee order nisi against DBS Bank Limited (‘DBS bank’), where the defendant held an account. It was only on the eve of the hearing to make the garnishee order absolute, that the defendant finally filed its application to set aside. In the affidavit filed by its managing director a week later, the defendant indicated for the first time that it was disputing liability under the invoices.

Before the assistant registrar, the defendant admitted liability with respect to the amount of $539,942.52 (‘the sum’), but disputed the plaintiff's claim for the remaining sum of $258,512.00. The assistant registrar granted the plaintiff judgment for $539,942.52, but only allowed the defendant conditional leave to defend the sum on the condition that the defendant provide security by way of a bankers' guarantee or a solicitor's undertaking for the same. The defendant appealed against the order for conditional leave made by the assistant registrar.

Held, dismissing the appeal:

(1) In allowing an application to set aside a judgment in default of appearance or defence, the court had discretion to require the defendant to provide security for the plaintiff's claim where this would be just (as when the defendant's veracity was in doubt and his defence suspect): at [14].

(2) A condition was apposite where the court had the sense that although it could not be said that the claimed defence was so hopeless that, in truth, there was no defence, the overall impression was such that some demonstration of commitment on the part of the defendant to the claimed defence was called for. To decide this, the court would look at the whole situation critically and not accept ‘mere assertions’ by the defendant: at [15] and [16].

(3) The defendant's claim that it was unaware of the alleged breaches by the plaintiff, when critically examined against the facts, was wholly unconvincing: at [19].

(4) The defendant's silence and failure to dispute liability throughout the plaintiff's repeated demands for payment, which conduct continued even after the default judgment was served on the defendant, called into serious question the bona...