Lee Yeow Peng v Fitness First Singapore Pte Ltd

• Jurisdiction: Singapore
• Judge: Hairul Hakkim
• Judgment Date: 03 July 2020
• Neutral Citation: [2020] SGMC 37
• Court: Magistrates' Court (Singapore)
• Docket Number: Suit No 16087 of 2019 (Magistrate Summons No 7047 of 2019)
• Year: 2020
• Published date: 25 July 2020
• Hearing Date: 10 May 2020,03 July 2020,26 June 2020
• Plaintiff Counsel: Ushan Premaratne and Jonathan Tan (Withers KhattarWong LLP)
• Defendant Counsel: Paul Tan, Benjamin Cheong and Benny Santoso (Rajah & Tann Singapore LLP)
• Subject Matter: Civil Procedure,Striking out,Evidence,Admissibility of evidence,Without prejudice
• Citation: [2020] SGMC 37

Deputy Registrar Hairul Hakkim: Introduction

A gymnasium (“gym”) member continued to pay for his gym membership every month for about 14 years without once visiting the gym as a member. He thought that he had cancelled the said membership. After discovering this error, he corresponded with the gym via several telephone communications. He alleges that during these conversations, the gym had admitted to mistakenly making monthly deductions and that it was therefore willing to compensate him. The gym denies these admissions. The question before me is whether these communications he had with the gym (assuming they are true and accurate) are protected by privilege.

Salient facts and parties’ cases

Mr Lee Yeow Peng (“the Plaintiff”) was a patron of Fitness First Singapore Pte Ltd (“the Defendant”).

The Plaintiff’s claim against the Defendant can be summarised as follows: The Plaintiff had signed up as a member of the Defendant’s fitness studios sometime around August 2004. The Plaintiff subsequently terminated his membership with the Defendant sometime around mid-2005. He thereafter did not utilise his membership and did not visit as a member at any of the Defendant’s fitness centres. Despite the termination, his bank account was continually billed every month for more than 14 years. The Plaintiff was unaware of these monthly deductions until August 2019 when he had subscribed for mobile banking. The Plaintiff then visited one of the Defendant’s physical branches to highlight that his membership was not properly terminated. The Defendant’s representatives subsequently corresponded with the Plaintiff via telephone conversations. During these calls, the Defendant had admitted that these monthly deductions were inaccurate and had expressed a willingness to compensate him. The Defendant then took immediate steps to prevent any further deductions from September 2019. The parties then entered into negotiations. However, as the Plaintiff finds the terms of the compensation offered by the Defendant to be unacceptable, he has refused the offer and has chosen instead to mount the present legal proceedings against the Defendant in unjust enrichment.

The Defendant simply disputes the purported cancellation of the membership by the Plaintiff. In relation to the telephone conversations, while the Defendant does not deny their existence, the Defendant’s case is that their representatives made no admission and/or any promises to offer compensation during the telephone communications.

The Defendant’s application

The present application before me is filed by the Defendant. The Defendant has applied to strike out parts of the statement of claim (“SOC”) filed on 30 October 2019 and for an extension of time to file its defence. In my judgment, the more pertinent issue for determination is whether the striking out application should be granted. This is because there is nothing in principle to preclude the application for an extension of time and the only issue in that application is one of costs. Further, the incidence of costs for the application for extension of time may also be influenced by my decision on the first issue of striking out. I therefore deal primarily with the first issue in my decision below.

There are two allegedly offending portions of the SOC which the Defendant seeks to strike out, and these are (“the Disputed Portions”): paragraph 7 of the SOC and all paragraphs that refer to that paragraph; and the last clause of paragraph 13 of the SOC.

To provide the necessary context, I reproduce below in full the two paragraphs of the Disputed Portions referred to above: 7. Sometime in August 2019, there were several telephone conversations during which, inter alia, the plaintiff informed the Defendant's representative that there were monthly deductions made from the UOB Account, despite the cancellation of his membership in early or mid-2005. During these conversations, the Defendant's representative informed and/or admitted to the Plaintiff that: (a) The monthly deductions from the Plaintiff's UOB Account by the Defendant was [sic] not correct; (b) The Defendant will take immediate steps to cease the monthly deductions from the Plaintiff's UOB Account; (c) The Defendant was willing to provide some form of compensation to the Plaintiff such as free membership. 13. The Defendant had deducted from the UOB Account membership fees for the Defendant's fitness studios fully aware that the Plaintiff had cancelled his membership sometime in early or mid-2005, which the Defendant accepted.

The Defendant argues that the Disputed Portions ought to be struck out because they refer to “without prejudice” conversations; they are therefore privileged and hence inadmissible.

The Plaintiff argues that the communications are not privileged because they took place before the parties had entered into settlement negotiations and the communications took place in the context of a fact gathering exercise.

My decision

Having carefully considered the parties’ oral and written arguments, I am of the view that paragraphs 7(a) and 7(c) of the SOC should be struck out because they reference “without prejudice” communications and are therefore inadmissible.

I start first with the relevant principles of the law.

Relevant legal principles on “without prejudice” communications

It is trite that the Evidence Act (Cap 97, 1997 Rev Ed) (“the EA”) only allows relevant evidence to be considered by the court. In this regard, s 23(1) of the EA provides that an admission is not relevant where either of the two conditions stipulated in the section is satisfied. Section 23(1) reads as follows:

Admissions in civil cases when relevant

23.—(1) In civil cases, no admission is relevant if it is made — (a) upon an express condition that evidence of it is not to be given; or (b) upon circumstances from which the court can infer that the parties agreed together that evidence of it should not be given.

It is clear from the express language in s 23(1) of the EA that a “without prejudice” communication does not have to be expressly marked or prefaced as such in order to gain protection (see s 23(1)(b) of the EA). This much is also clear from the observation of the Court of Appeal in Mariwu Industrial Co (S) Pte Ltd v Dextra Asia Co Ltd and another [2016] 4 SLR(R) 807 (“Mariwu”) at [24]:

…

The words in s 23 [EA] contemplate two different situations that invoke the underlying rationales of the ‘without prejudice’ rule. The first situation is where there is an express condition that any admission made by either party in the context of negotiations to settle a dispute is not to be ‘given’, ie, admissible in evidence against the party making the admission. The situation applies to all communications made expressly ‘without prejudice’. The second situation is where an admission is made ‘under circumstances from which the court can infer that the parties agreed together that evidence of it should not be given’. This situation will cover cases where even though a statement is not expressly made ‘without prejudice’ the law holds that it is made without prejudice because it was made in the course of negotiations to settle a dispute: see the judgment of Lord Hoffmann in Bradford & Bingley plc v Rashid [2006] 1 WLR 2066 at [13]… [emphasis added]

To similar effect, the House of Lords has remarked that the determination of the “without prejudice” privilege is not an exercise in literary construction. As...