Sin Lian Heng Construction Pte Ltd v Singapore Telecommunications Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon JC
• Judgment Date: 15 February 2007
• Neutral Citation: [2007] SGHC 22
• Docket Number: Suit No 525 of 2006 (Registrar's Appeal No 292 of 2006)
• Date: 15 February 2007
• Year: 2007
• Published date: 13 March 2007
• Plaintiff Counsel: S Magintharan, James Liew (Netto & Magin LLC)
• Citation: [2007] SGHC 22
• Defendant Counsel: Dawn Tan, Julian Soong (Rajah & Tann)
• Court: High Court (Singapore)
• Subject Matter: Whether communications amounting to admissions,Admissibility of evidence,Whether communications made by contractor in course of discussions with and in letter to employer made "without prejudice" and therefore inadmissible,Whether communications made in context of negotiations to settle dispute between parties,"Without prejudice" communications,Whether privilege applying to negotiations on quantum even where admission of liability existing,Evidence

15 February 2007

Sundaresh Menon JC:

1 The ‘without prejudice’ privilege is well recognised by the courts and in legislation. Its object is to ensure that parties to disputes are not discouraged from making genuine attempts at peaceful resolution of their disputes for fear that their communications during negotiations may be used to their prejudice in subsequent proceedings. The policy has always been to encourage such parties to try to settle their disputes as far as possible without resorting to litigation. Free and uninhibited communications are seen as vital to this end and accordingly, communications made in the course of negotiations are privileged and as a general rule, cannot be referred to or relied upon in subsequent proceedings. This case presents an occasion for me to consider the proper ambit of the privilege and its application.

Background

2 The plaintiff, Sin Lian Heng Construction Pte Ltd (“the plaintiff”), is the contractor appointed by the defendant, Singapore Telecommunications Limited (“the defendant”), to undertake the laying and recovery of telecommunication cables, pursuant to various contracts entered into between the parties. The plaintiff contends that it duly completed all the contracted and additional works requested by the defendant but did not receive payment despite various requests, reminders and demands. The plaintiff accordingly commenced this action in August 2006.

3 The defendant, in response, brought a counterclaim seeking damages for breach of contract, conversion and/or detention in respect of copper cables that the plaintiff was to have recovered on the defendant’s behalf pursuant to a contract dated July 2004 (“the agreement”), but which the plaintiff allegedly failed to deliver or to account for. The agreement was entered into on or about 29 July 2004.

4 In its counterclaim, the defendant pleaded various admissions that were allegedly made by the plaintiff’s officers in the course of their dealings with the defendant’s officers (“the admissions”). The admissions were made in the course of four site meetings (“the meetings”) at which the issues of the outstanding payments and the ‘missing’ copper cables were discussed among other matters, and in a letter from the plaintiff to the defendant dated 20 March 2006 (“the letter”).

5 The plaintiff objected to the admissions being pleaded and applied to have them struck out. The plaintiff maintained that the admissions had been made “without prejudice”. The plaintiff founded its application on O 18 rr 19(c) and (d) of the Rules of Court (Cap 322, R5, 2006 Rev Ed) and the inherent jurisdiction of the court.

6 It was common ground that neither party had specifically said prior to or at the meetings that the discussions were to be conducted on a “without prejudice” basis. Similarly, the letter in question did not contain any express qualification to this effect. However it was also common ground that the privilege could arise in the appropriate circumstances even in the absence of an express qualification. Thus, the arguments centred on the nature of the discussions at the meetings and on this, the learned Assistant Registrar who heard the application at first instance, found that the meetings had not been conducted in circumstances which warranted the conclusion that the discussions were privileged. It was noted that the meetings had involved discussions of a number of issues apart from the ‘missing cables’. The learned Assistant Registrar was also of the opinion that there was no real dispute that the cables were missing. It also appears that the learned Assistant Registrar considered that the letter was bound up with the meetings and therefore the same conclusions applied to both the minutes of the meetings and the letter. Accordingly, the application was dismissed. Dissatisfied, the plaintiff appealed and this came before me.

7 After hearing arguments by both counsel, I allowed the appeal in part by varying the decision of the learned Assistant Registrar in relation to paragraph 19(e) of the Defence and Counterclaim. I ordered that paragraph to be struck out. In essence, I differed from the learned Assistant Registrar’s conclusions in respect of the letter but not in respect of the meetings. Having regard to the fact that the matter was fully argued and that a number of issues of practical significance were raised, I thought it appropriate to set out the reasons for my decision and this I now do.

The Meetings

8 The focus of the arguments at the appeal was in relation to the letter. The submissions in relation to the minutes of the meetings were not vigorously pursued before me. Nonetheless, I briefly set out my reasons for dismissing this part of the appeal.

9 The starting point of the analysis is the principle that the ‘without prejudice’ privilege “governs the admissibility of evidence and is founded on the public policy of encouraging litigants to settle their differences rather than litigate them to a finish”: Rush & Tompkins Ltd v Greater London Council & another [1989] AC 1280 (“Rush & Tompkins”) at 1299. This rationale underlying the privilege was reaffirmed by the Singapore Court of Appeal in its recent decision in Mariwu Industrial Co (S) Pte Ltd v Dextra Asia Co Ltd & another [2006] 4 SLR 807 (“Mariwu”) at [24] and [30], as well as by the House of Lords in Bradford & Bingley Plc v Rashid [2006] 4 All ER 705 (“Bradford & Bingley”) at [4], [73] and [85].

10 It is trite law that the availability of the ‘without prejudice’ privilege is not dependent upon the use of the words “without prejudice”: Rush & Tompkins ([9] supra at 1299); Sinojaya Sdn Bhd v Metal Component Engineering Pte Ltd (Hoyo Crosstec Sdn Bhd, third party) [2003] 1 SLR 281 at [31]. The failure to stipulate expressly that a communication is made “without prejudice” also does not preclude the operation of s 23 of the Evidence Act (Cap 97, 1997 Rev Ed) (“the Evidence Act”) which is in the following terms:

Admissions in civil cases when relevant

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

11 The Court of Appeal in Mariwu ([9] supra) considered s 23 to be a statutory enactment of the common law rule and stated as follows at [24]:

The words in s 23 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].

12 Thus, in cases where the communication is expressly stated to be made “without prejudice” then, subject to such exceptional situations as were identified by Robert Walker LJ in Unilever plc v The Procter & Gamble Co [2001] 1 All ER 783 (“Unilever”) at 791 to 793, it will not be admissible. In cases where no express condition has been imposed as to the admissibility of any admission, it is a matter for the court to examine the surrounding circumstances in which the communication was made and then ascertain whether these were such that the court may infer an agreement to the effect that evidence of the communication should not be given. The classic instance of this would be where the parties were in fact seeking to settle a dispute at the material time.

13 For present purposes, there are two prerequisites before the privilege can be invoked. The first is that the communication must be an “admission”. I return to this a little later in this judgment when I consider the position in relation to the letter. The second is that there must in fact be a dispute which the parties are trying to settle and it is this I begin with.

14 In the present case, the plaintiff argued that there clearly were existing disputes between the parties. In particular, the plaintiff pointed to the outstanding payments that were due to it for the works it had completed. The issue of the ‘missing cables’ had been brought to the plaintiff’s attention by the defendant some time in December 2005. The plaintiff contended that these issues had led to the meetings in question. Therefore, it was submitted, the meetings were held in the context of the parties’ attempts to resolve these outstanding disputes, and that it was clear that the parties were in the process of negotiating a compromise.

15 In response, the defendant argued that it was apparent from the facts and surrounding circumstances that there was no dispute between the parties that the copper cables were missing. The defendant submitted that the parties were not in fact negotiating a compromise at all but were discussing operational matters. It was further submitted that the plaintiff had admitted that it did not keep a proper record of the cables in its possession and had not returned all the cables it had recovered. Hence, the meetings could not have attracted the privilege because there was neither a dispute nor negotiations aimed at settling any dispute.

16 In my view, the inquiry begins with trying to establish what it was that the parties were seeking to achieve at the meetings. In this regard, it was clear from the minutes of the meetings...