Lian Sheng (s) Brothers Enterprise Co Pte Ltd v Green Leaves Enterprise Pte Ltd and others

• Jurisdiction: Singapore
• Judge: Hoo Sheau Peng
• Judgment Date: 10 June 2011
• Neutral Citation: [2011] SGDC 186
• Court: District Court (Singapore)
• Docket Number: District Court Suit 609 of 2009
• Published date: 28 June 2011
• Year: 2011
• Hearing Date: 29 April 2011
• Plaintiff Counsel: Mr Allister Lim (M/s Allister Lim & Thrumurgan)
• Defendant Counsel: Mr Irving Choh & Ms Wong (M/s KhattarWong)
• Citation: [2011] SGDC 186

District Judge Hoo Sheau Peng: Background

This is an appeal by the Defendants against the decision to uphold the Deputy Registrar’s dismissal of the Defendants’ application to set aside a judgment entered on 5 August 2010 (‘the judgment’), after the Defendants’ default of an unless order of 29 July 2010 made by consent of the parties, being the second unless order made by consent in the case (‘the second unless order’).

Chronology of Events

The chronology of events was undisputed. The Plaintiffs, as landlords, commenced the action on 23 February 2009 against the Defendants, the tenants and guarantors of the tenancy agreement, claiming rent, reinstatement and rectification costs. The last pleading was filed on 30 April 2009.

At the summons for directions hearing on 3 September 2009, the directions stated that the parties were to file the list of documents, and affidavits verifying the list of documents by 24 September 2009, and that inspection of the documents were to be allowed by 8 October 2009 (‘the SFD directions’).

After the Plaintiffs filed their list of documents on 13 October 2009, they reminded the Defendants to do so. As the Defendants did not respond to the Plaintiffs’ letters, on 9 December 2009, the Plaintiffs applied to Court for an ‘unless order’. When the application was heard on 5 January 2010, the Defendants consented to an unless order (‘the first unless order’). In accordance with the first unless order, the Defendants filed their list of documents and affidavit verifying the list of documents on 11 January 2010.

For the next stage relating to the inspection of the documents, the Plaintiffs wrote to the Defendants requesting for copies. Again, there was no response. On 1 July 2010, the Plaintiffs applied to court for directions. When the application was heard on 29 July 2010, the Defendants consented to the second unless order which provided for inspection by the Plaintiffs and/or their solicitors of the Defendants’ documents, as well as copies of the said documents to be made available by 3 August 2010, failing which final judgment be entered by the Plaintiffs against the Defendants.

At close of business on 3 August 2010, there was a fax from the Defendants’ solicitors to the Plaintiffs’ solicitors, informing them that the documents may be inspected at the former’s office, and purportedly enclosing the Defendants’ documents. However, the documents were not furnished. The documents were served by the despatch clerk only on 11 am, 4 August 2010.

On 5 August 2010, pursuant to the failure to comply with the second unless order, the Plaintiffs entered the judgment against the Defendants. On 13 August 2010, the Plaintiffs’ solicitors served the judgment on the Defendants. Meanwhile, the second unless order was finalized, and served on the Defendants on 17 August 2010.

On 10 January 2011, the Defendants applied to set aside the judgment. In support of the application, an affidavit dated 10 January 2011 was filed by the Defendants’ solicitor and counsel, Mr Allister Lim (‘Mr Lim’). At the hearing on 10 March 2011, the Deputy Registrar dismissed the application, and ordered costs of $800 against the Defendants.

The Defendants’ Position

On appeal, the Defendants raised three main arguments, and relied on the same affidavit filed by Mr Lim. First, it was submitted that the Defendants had every intention to, and were in the position to comply with the second unless order. In the affidavit, Mr Lim explained that honest errors on the law firm’s part led to the technical breach of the second unless order. Inadvertently, the secretary did not fax the documents along with the faxed copy of the letter. Also, the despatch clerk was supposed to serve the hard copy of the letter and the copies of the documents on 3 August 2011. The Defendants were barely half a day late in complying with the second unless order. The test to be applied should be whether such failure is intentional and contumelious: Lea Tool and Moulding Industries Pte Ltd (In Liquidation) v CGU International Insurance Co PLC [2000] SGHC 241; Syed Mohamed Abdul Muthaliff v Arjan Bhisham Chotrani [1999] 1 SLR 750. In this case, there was no intention to flout the second unless order.

Secondly, on the five months’ delay before filing the application to set aside, Mr Lim explained that much time was taken to obtain instructions from the Defendants. Also, he was on urgent leave for most of December 2010. It was submitted that the emphasis should be placed on the non-compliance with the second unless order, which has been adequately explained.

Thirdly, the Defendants have meritorious defences to the claim. There would not be any prejudice to the Plaintiffs that cannot be compensated by costs if the judgment were to be set aside. If the judgment were not set aside, it would be an injustice to the Defendants. The severe...