Invar Realty Pte Ltd v Kenzo Tange Urtec Inc and Another

JurisdictionSingapore
JudgeYong Pung How J
Judgment Date05 September 1990
Neutral Citation[1990] SGHC 61
Docket NumberSuits Nos 983 and 3223 of 1987
Date05 September 1990
Year1990
Published date19 September 2003
Plaintiff CounselHarish Kumar (Chor Pee & Co)
Citation[1990] SGHC 61
Defendant CounselSuppramaniam Thulasidas (Shook Lin & Bok)
CourtHigh Court (Singapore)
Subject MatterWhether defendants entitled to summary judgment,Defendants counterclaiming in respect of professional fees,Debt and Recovery,O 20 r 5 Rules of the Supreme Court 1970,Summary judgment entered on counterclaim,Application for leave to amend defence to counterclaim,Amendment,Counterclaim,Whether plaintiff entitled to amend defence after final judgment,O 14 Rules of the Supreme Court 1970,Civil Procedure,Pleadings,Claim admitted by plaintiffs

Cur Adv Vult

The plaintiffs were the developers of a 28-storey commercial building known as GB Building at 143 Cecil Street Singapore. The first defendants were the architects who designed the building and were appointed by the plaintiff as the principal consultants for the building project. The second defendants were the civil and structural engineers appointed by the first defendants for the building project.

The design of the GB Building provided for a podium and a tower block with two special features, namely, a column-free tower block and a glass curtain wall from the 5th to the 28th storeys.
Problems arose over the curtain wall; it could not be installed, and this led to remedial works and delay. The plaintiffs brought actions for breach of contract and/or negligence against both defendants, which were later consolidated. The claims against both defendants were for very considerable amounts, totalling more than $15m.

After filing their defence, the second defendants obtained an order of court under which they made a counterclaim against the plaintiffs.
They alleged that their professional fees had been agreed in writing at 1% of the total building costs of the project. This came to $398,500 of which $219,250 had been paid, leaving a balance due to them by the plaintiffs of $179,250.

In their defence to the counterclaim, the plaintiffs admitted that the total professional fees due to the second defendants had been agreed at 1% of the total building costs of the project.
They disagreed however with the second defendants` calculations, contending after a detailed analysis of the counterclaim that the total professional fees came to only $339,057.07 instead of the $398,500 claimed by the second defendants; that of this they had paid $222,450 instead of $219,250, and that the balance due to the second defendants was therefore only $116,585.07 instead of $179,250. Further to this, the plaintiffs then contended in their defence to the counterclaim that they were entitled to set off against the counterclaim of $116,585.07 so much of their own claim against the second defendants as would satisfy and extinguish the counterclaim.

The second defendants applied under O 14 r 5 for summary judgment for the $116,585.07 and obtained judgment from the registrar for this amount, with a stay of execution pending trial of the plaintiffs` claim, and with leave to the plaintiffs to defend the balance sum of the counterclaim.
The plaintiffs appealed against this decision to the judge-in-chambers.

The plaintiffs then applied to amend their statement of claim and their defence to the counterclaim.
The amendments were, first, to add to their statement of claim a claim for the return of the $222,450 fees paid to the second defendants; and, second, to amend their defence to the counterclaim to make it clear that the $116,585.07 would have been payable to the second defendants but for their breach of contract and/or negligence. The registrar allowed the amendment to the statement of claim, but the second defendants resisted the plaintiffs` attempt to amend their defence to the counterclaim on the ground that the plaintiffs had made an admission on which a judgment could be founded, and that such an amendment could not be made after what was a final judgment had already been entered. The registrar dismissed the plaintiffs` application to amend their defence to the counterclaim, and the plaintiffs also appealed against this decision to the judge-in-chambers.

The issues on these two appeals are (1) whether the registrar was right in giving the second defendants summary judgment for $116,585.07 on their counterclaim; and (2) whether the registrar was right in dismissing the plaintiffs` application to amend their defence to the counterclaim.


First issue

Mr Kumar for the plaintiffs, in explaining the origins of set-offs, submitted on the first issue that the Insolvent Debtors Relief Act 1729 [UK] and the Debtors Relief Amendment Act 1735 [UK] did not allow a set-off if either of the claims was unliquidated.
A plaintiff who had supplied defective goods or services could recover judgment at law on the price. The defendant was left to his remedy in a separate action. Equity intervened in the interests of justice and fairness and developed the plea of abatement - a plea which was not a counterclaim but a pure defence. The price claimed by the plaintiff was to be seduced to the real value of the goods or services supplied, and equity granted an injunction against the plaintiff proceeding at law until the abatement plea had been tried. In that sense, the plea of abatement either reduced or completely extinguished the claim, depending on the trial court`s assessment of the value, if any, of the goods or services rendered.

In the present case, Mr Kumar contended that, although the sum of $116,585.07 is admitted to be due to the second defendants, it is subject to a set-off at this stage and can only be said to be notionally and not actually due to the second defendants.
The nature of the set-off in these circumstances has a direct effect on the counterclaim, that is, the value of the services rendered, quite apart from any question of damages sustained by the innocent party. It is not simply a matter of setting-off one sum against another. Once a verdict in favour of the plaintiffs is given, the court will have to assess separately, first, the value, if any, of the services rendered by the second defendants and, second, the damages sustained by the plaintiffs. While the language of the defence to the counterclaim...

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