Koh Chong Chiah v Treasure Resort Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 01 October 2013
• Date: 01 October 2013
• Docket Number: Civil Appeal No 36 of 2012
• Court: Court of Appeal (Singapore)

Koh Chong Chiah and others

Plaintiff

and

Treasure Resort Pte Ltd

Defendant

[2013] SGCA 52

Sundaresh Menon CJ

,

Chao Hick Tin JA

and

Andrew Phang Boon Leong JA

Civil Appeal No 36 of 2012

Court of Appeal

Civil Procedure—Representative proceedings—‘Same interest’ requirement—Whether claimants need to be identically situated—Whether court ought to exercise discretion to discontinue—Order 15 r 12 (1) Rules of Court (Cap 322, R 5, 2006 Rev Ed)

The appellants (‘the Appellants’) were representative plaintiffs who had commenced Suit No 849 of 2009 (‘Suit 849’), a representative action pursuant to O 15 r 12 (1) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed), on behalf of themselves and 202 other members of Sijori Resort Club (‘the represented persons’) (collectively ‘the claimants’). The respondent (‘the Respondent’) and Colony Members Service Club Pte Ltd (‘Colony’) were the defendants to Suit 849.

In Suit 849, the Appellants claimed for breach of contract, repudiation of contract and misrepresentation vis-à-vis the Respondent. In respect of the contractual claims, the Appellants pleaded that their membership agreements with Sijori Resort (Sentosa) Pte Ltd (‘Sijori’) had been novated to the Respondent (‘the novated membership agreements’) and that the Respondent acted in breach of contract by failing to accord the membership benefits conferred by the novated membership agreements. The Appellants also averred that the Respondent had repudiated the novated membership agreements by reason of its letter dated 4 February 2008, the contents of which allegedly evinced the Respondent's intention to renounce all of its obligations under the novated membership agreements. With regard to their misrepresentation claim, the Appellants pleaded that the Respondent had fraudulently represented in its letter dated 16 December 2006 that club members would continue to enjoy all existing benefits extended to them; they also relied on s 2 of the Misrepresentation Act in the alternative. The Appellants also claimed conspiracy to injure vis-à-vis the Respondent and Colony jointly. This claim was based on the Respondent's alleged breach and repudiation of the novated membership agreements and the circumstances surrounding the foregoing. As relief in respect of these causes of action, the Appellants sought a declaration that each of the claimants was entitled to damages (to be assessed separately at an assessment of damages stage).

Subsequently, the Respondent filed two summonses including one for an order that Suit 849 be discontinued as a representative action. Both applications were heard and dismissed by the same assistant registrar. Dissatisfied, the Respondent appealed. The same High Court judge heard and allowed both appeals; Suit 849 was discontinued as a representative action (albeit without prejudice to each of the represented persons commencing a separate action in his or her own right). The Appellants appealed against the decision to discontinue Suit 849 as a representative action.

Held, allowing the appeal in part:

(1) Order 15 r 12 (1) operated in two stages. At the first (jurisdictional) stage, the threshold requirement that the claimants have the same interest in the proceedings (ie, the ‘same interest’ requirement) must be met. It was only after the ‘same interest’ requirement had been met and the representative action properly commenced that the second (discretionary) stage was reached. At the second stage, the court could exercise its discretion to discontinue the proceedings in question as a representative action where the overall circumstances of the case so justified: at [26] , [27] and [29] .

(2) Given the equitable origin of the representative action and its function as a ‘tool of convenience’ in the administration of justice, O 15 r 12 (1) ought to be applied in a broad and flexible manner. For instance, the court retained the power to make the necessary orders to reshape proceedings at a later stage if they became impossibly complex or if the defendant was prejudiced: at [31] to [33] and [37] .

(3) Although representative actions offered a practical and economical method of asserting and enforcing a claim, this had to be weighed against prejudicial consequences for the defendant in a representative action. Ultimately, the court ought to strive to strike a balance between the interests of parties bearing in mind the purpose of O 15 r 12 (1), which was to facilitate access to and the efficacious administration of justice: at [34] to [36] and [38] .

(4) Claimants in a representative action did not need to be identically situated vis-à-vis the defendant. Rather, all that was needed was that there were one or more significant issues of fact or law common to all the claimants for determination by the court. The court would have to compare the significance of the common issues between the claimants with the significance of the issues which differed as between them. Where the latter clearly outweighed the former, the ‘same interest’ requirement would not be met. In this regard, the court practice in relation to O 4 r 1 (1) (a) and O 15 r 4 (1) (a) of the Rules of Court would be relevant. The focus of the court's attention should be on what was common between the claimants, and not what differentiated the cases of individual claimants: at [57] and [60] to [62] .

(5) Whether an issue was common between the claimants in a representative action was largely fact-dependent and would have to be determined on a case-by-case basis. As a general guideline, where the legal and factual inquiry required for the determination of an issue in a claim in a representative action was also relevant to the determination of the same issue in the other claims in the representative action, it was highly probable that the issue was common to all the claimants: at [59] .

(6) The mere fact that the defendant had separate defences against different claimants ought not to necessarily suffice for the court to hold that the ‘same interest’ requirement was not met. However, this was a factor to be considered by the court in determining whether to exercise its discretion to discontinue the action as a representative action. The courts ought to adopt a practical and realistic approach when considering whether separate defences could be raised against different claimants and not indulge in speculation on hypothetical possibilities: at [67] , [68] and [70] .

(7) In order for a representative action to be brought, the relief sought had to, in its nature, be beneficial to all the persons whom the representative plaintiff (s) proposed to represent. A representative action could not be maintained where there were divided views between the members of the class of represented persons as to what outcome they hoped to achieve in the litigation or as to the desirability of seeking a particular remedy: at [71] .

(8) It was not the fact that damages were sought but rather the need for assessment on a personal basis of the damages due to each claimant, which was offensive to a representative action. In the present case, the reliefs sought were declarations that the claimants were entitled to damages, with an assessment of the damages due to each claimant to be carried out separately on a non-representative basis at a later stage. Whether it would be efficacious and just to allow the claimants to proceed in this manner was a matter best left to the court's discretion: at [77] .

(9) The standard of ‘plain and obvious case’ did not apply to the court's exercise of its discretion to discontinue an action as a representative action. Rather, much hinged on the ‘suitability’ of the representative; the action ought to be discontinued as a representative action where it would not provide an efficient or effective means of dealing with the claims in question, or where it was otherwise inappropriate in the circumstances. In this regard, the court ought to consider, inter alia, the real possibility that the defendant could raise separate defences against different claimants, the cost of a representative action and the procedural limitations (as weighed against the procedural convenience) of a representative action: at [80] to [86] .

(10) The Appellants had to make out a prima facie case that: (a) the ‘same interest’ requirement had been met; and (b) there was nothing in the facts and circumstances of this case to warrant the court exercising its discretion to refuse to reinstate Suit 849 as a representative action: at [89] .

(11) The claimants shared a common means of proving the alleged novation of the original membership agreements to the Respondent having based the novation claim on facts which were common to all the claimants and their consent to the alleged novation on the common basis of their act of paying their monthly subscription fees to the Respondent from January 2007 onwards. Similarly, the claimants shared a common method of proving the terms of the novated membership agreements based not only on the terms of the original membership agreements but also on the documents and acts which collectively brought about the novated membership agreements. Therefore, the novation and terms issues were common as between the claimants: at [96] , [97] and [103] .

(12) A single question arose in relation to the Appellants' repudiation claim - did the 4 February 2008 letter from the Respondent amount to a renunciation of its obligations under the novated membership agreements and, therefore, a wrongful repudiation of those agreements? In light of the foregoing, the issue of the Respondent's alleged repudiation of the novated membership agreements was common to all the claimants. Declaratory relief was sought in relation to the repudiation claim, which did not offend the ‘same interest’ requirement. Hence, the ‘same interest’ requirement was met and Suit 849 was properly commenced as a representative action with regard to the...