Main-Line Corporate Holdings Ltd v United Overseas Bank Ltd

• Jurisdiction: Singapore
• Judgment Date: 03 March 2010
• Date: 03 March 2010
• Docket Number: Civil Appeal No 98 of 2009
• Court: Court of Appeal (Singapore)

Main-Line Corporate Holdings Ltd

Plaintiff

and

United Overseas Bank Ltd

Defendant

[2010] SGCA 9

Chao Hick Tin JA

and

Andrew Phang Boon Leong JA

Civil Appeal No 98 of 2009

Court of Appeal

Civil procedure–Interim payments–Foreign party seeking interim payment pending accounts of profits–Whether party showed with reasonable certainty minimum sum likely to be recoverable–Whether party had to show need or prejudice before interim payment might be ordered–Whether interim payment should be paid directly to foreign party or into court–Order 29 r 12 (a) Rules of Court (Cap 322, R 5, 2006 Rev Ed)

In the main proceedings which took place earlier, Main-Line Corporate Holdings Ltd ( Main-Line ) successfully sued United Overseas Bank Ltd ( UOB ) for infringing a patent it owned. The trial judge ordered for an inquiry to be held by a registrar on damages or an account of profits for the infringement of the patent, and for Main-Line to elect its preferred remedy. During the pre-election discovery, UOB's representative filed an affidavit declaring that the total revenue of UOB arising from the infringement of the patent was $3,135,236.40; but that UOB did not have a precise breakdown of its costs in earning that revenue and; therefore, to provide Main-Line with a basis for election, UOB disclosed its general expense/income ratios for the relevant financial years. By applying the ratio for each financial year in question to the commissions received in that financial year, the sum of $1,999,285.28 was derived.

Subsequently, Main-Line applied, pursuant to O 29 r 12 (a) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) ( the Rules ), for interim payment in relation to the account of UOB's profits. UOB reiterated its position at the pre-election discovery (ie, that it did not have a precise breakdown of its costs), but revised the estimated profits to take into account certain errors and the expense/income ratio for financial year 2007. Thus, the sum of $1,962,424.30 was derived as the estimated profits earned by UOB. The assistant registrar ordered that UOB made an interim payment of $1,962,424.30 into court. Both parties appealed, and the order was set aside by the High Court Judge ( the Judge ) on the basis that Main-Line had not satisfied the court that there was an amount below which the assessment of profit will not go and that the raw estimate furnished by UOB's representatives was insufficient.

On appeal, Main-Line submitted that the minimum amount of profits that would have to be accounted for would be $3,135,236.40, or, in the alternative, $1,962,424.30, and there was no reason for payment not to be made to Main-Line instead of into court as it would be Main-Line's minimum entitlement at law. UOB submitted that (a) it should be presumed that the Judge had correctly exercised his discretion, (b) Main-Line had not shown evidence of hardship, and (c) Main-Line had not shown evidence of an irreducible recoverable sum. In addition, UOB also submitted that any interim payment should be made into court, due to the risk of non-recoverability of any excess amount.

Held, allowing the appeal:

(1) The Judge's approach (ie,requiring an amount below which the assessment of profit would not go) should not be used to deny interim payment to an applicant especially in a case where all the relevant information and particulars needed to ascertain the amount due were in the exclusive possession of the other party. Here, to deny Main-Line any interim payment completely just because the profits could not as yet be ascertained would be to reward UOB for the inadequacy of its own administrative process to the prejudice of Main-Line. Further, the Judge erred in law because he appeared to have insisted on a higher standard of certainty, viz, absolute certainty, when the courts only required that there was reasonable certainty of the minimum sum recoverable: at [17] to [20].

(2) The sum of $3,135,236.40 was not the minimum sum ascertainable (with absolute or reasonable certainty) because it was reasonable to assume that some costs would have been incurred by UOB: at [23].

(3) It was reasonably certain that the sum of $1,962,424.30 would be the minimum sum payable by UOB to Main-Line following an account of profits. First, although UOB downplayed the relevance of the income/expense ratios, it could not point to any other basis which was likely to give a more accurate figure. Further, the court would be entitled to assume that UOB's representative, when filing the affidavit pursuant to pre-election discovery, did not set out to mislead Main-Line in order that the latter would not make the right election. Second, the burden was on UOB to show that the sum of $1,962,424.30 was not a reasonably ascertained sum due to Main-Line because all the information relating to the profits earned, and the expenses incurred were within the exclusive possession of UOB. Third, although more than a year had elapsed between the filing of affidavits by both UOB's representatives, UOB was unable to furnish any further information as to how the expenses incurred by it could be better ascertained. Fourth, precisely because of the lack of specific breakdowns, UOB's representatives were likely to have offered conservative estimates of the profits earned, in the interest of reducing the risk of over-payment by UOB: at [22] to [30].

(4) While need or prejudice might be the usual basis upon which an interim payment was sought, it did not follow that an applicant for interim payment had to show such need or prejudice before an interim order might be made. Where liability had already been established, it was generally appropriate and just to make an interim order where there would be some delay until the final disposal of the case: at [32] and [33].

(5) Since the objectives of interim payments would include mitigating hardship or preventing a party from being kept out of money owed to it for an extended period of time, an order that payment be made into court would not have served much purpose. There was no reason to doubt Main-Line's ability to make a repayment, if required, pursuant to an order under O 29 r 17 of the Rules. Moreover, there was a minimal likelihood that there would be any significant overpayment. An interim payment of the sum of $1,962,424.30 should therefore be paid directly to Main-Line: at [35] and [36].

American International Assurance Co Ltd v Wong Cherng Yaw [2009] SGHC 89 (folld)

American International Assurance Co Ltd v Wong Cherng Yaw [2009] 3 SLR (R) 1117; [2009] 3 SLR 1117 (folld)

First Currency Choice Pte Ltd v Main-Line Corporate Holdings Ltd [2008] 1 SLR (R) 335; [2008] 1 SLR 335 (refd)

Lian Soon Construction Pte Ltd v Guan Qian Realty Pte Ltd [1999] 1 SLR (R) 1053; [1999] 2 SLR 233 (refd)

Main-Line Corporate Holdings Ltd v United Overseas Bank Ltd [2007] 1 SLR (R) 1021; [2007] 1 SLR 1021 (refd)

Main-Line Corporate Holdings Ltd v United Overseas Bank Ltd [2010] 1 SLR 189 (refd)

Schott Kem Ltd v Bentley [1991] 1 QB 61 (folld)

Westacre Investments Inc v The State-Owned Company Yugoimport SDPR [2009] 2 SLR (R) 166; [2009] 2 SLR 166 (refd)

Rules of Court (Cap 322,R 5, 2006 Rev Ed) O 29r 12 (a) (consd) ;O 29rr 10, 11, 12,12 (c) ,17, 17 (a)

Wong Siew Hong and Adeline Chong Seow Ming (Infinitus Law Corporation) for the appellant

Kannan Ramesh and Jasmine Foong Shu Jun (Tan Kok Quan Partnership) for the respondent.

Chao Hick Tin JA

(delivering the grounds of decision of the court):

Introduction

1 This appeal concerned the decision of the High Court judge ( the Judge ) in Registrar's Appeal No 225 of 2009 ( RA 225 ) and Registrar's Appeal No 228 of 2009 ( RA 228 ) (see Main-Line Corporate Holdings Ltd v United Overseas Bank Ltd [2009] SGHC 212 ( the GD )). In his decision, the Judge reversed the decision of an assistant registrar ( the AR ), who ordered United Overseas Bank Ltd ( UOB ), on the application of Main-Line Corporate Holdings Ltd ( Main-Line ), to make an interim payment of $1,962,424.30 into court. At the conclusion of the hearing before us, Main-Line's appeal was allowed and the interim payment order made by the AR was restored, with the modification that the interim payment was to be made directly to Main-Line rather than into court. We now give the detailed reasons for our decision.

Background facts

2 The subject of the present appeal had its genesis in the decisions of the High Court in Main-Line Corporate Holdings Ltd v United Overseas Bank Ltd [2007] 1 SLR...