Management Corporation Strata Title Plan No 3322 v Mer Vue Developments Pte Ltd

• Jurisdiction: Singapore
• Court: Court of Three Judges (Singapore)
• Judge: Chao Hick Tin JA
• Judgment Date: 13 June 2016
• Neutral Citation: [2016] SGCA 38
• Citation: [2016] SGCA 38
• Subject Matter: Limitation of Actions,Contract,Pleadings,Particular Causes of Action,Limitation,Civil Procedure,Amendment
• Published date: 18 June 2016
• Hearing Date: 06 May 2016
• Plaintiff Counsel: Samuel Seow and Jolene Lim (Samuel Seow Law Corporation), Kelvin Chia (Lumen Law Corporation) (instructed) and Gina Tan (Legal Solutions LLC) (instructed)
• Defendant Counsel: Christopher Chuah, Nikki Ngiam, Ng Pei Yin and Jasmine Low (WongPartnership LLP)
• Date: 13 June 2016
• Docket Number: Civil Appeal No 203 of 2015

Chao Hick Tin JA (delivering the grounds of decision of the court):

It is well-established that the law generally does not permit the joinder of new parties, or the addition of new causes of action to an existing suit, if at the time of the application, the relevant limitation period has expired in relation to the claim of the new party or the new cause of action. This procedural prohibition is important because it prevents parties from circumventing the statute of limitations. If a joinder of party, or an amendment to introduce a new cause of action, is allowed, the party or the new cause of action will be treated as being part of the underlying action instituted prior to the expiry of the limitation period, thereby circumventing the limitation defence. The present appeal arose from a contractual claim brought by the management corporation of a condominium against the developer for building defects in the condominium’s common property. The management corporation was entitled to bring the action by virtue of (a) the underlying contractual claims belonging to each subsidiary proprietor it represented; and (b) s 85 of the Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed) (“BMSMA”), which empowers the management corporation to take proceedings on behalf of the subsidiary proprietors who authorise it to do so in respect of those building defects.

The development involved in the present proceedings was “The Seaview”, located along Amber Road (“the Condominium”). Its management corporation (“the MCST”) instituted the action on behalf of only 30 subsidiary proprietors. The issue in this appeal was whether the MCST should be allowed to amend its pleadings to add 113 other subsidiary proprietors to the list of subsidiary proprietors it represented in the action for breach of contract after the limitation period of the contractual claim had expired. The MCST argued that the amendment neither added new parties to the proceedings (given that the MCST was the only plaintiff to the action under s 85 of the BMSMA), nor did it add a new cause of action (given that the additional subsidiary proprietors were simply asserting the same contractual rights and breaches which had been pleaded). We could not agree with this submission. It was clear to us that allowing the amendment would have the effect of allowing the additional subsidiary proprietors to prosecute their claims for breach of contract against the developer even though the claim was time barred at that point in time. The appeal raised novel questions about how the procedural rules governing the joinder of parties and amendment of pleadings applied in the unique context of an action brought by a management corporation under s 85 of the BMSMA. It also highlighted the importance of upholding substance over form, even in the application of procedural rules. After hearing the parties, we dismissed the appeal and disallowed the amendment. We now explain our decision in detail.

Factual background

The Condominium was completed in 2008, with six 22-storey residential blocks of apartments, and having a total of 546 residential units. In this appeal, the appellant was the MCST and the respondent, the developer of the Condominium (“the Developer”).

In Suit No 563 of 2011 (“S 563/2011”), the MCST brought proceedings against a number of defendants, including the Developer, for building defects in the common property of the Condominium. One of the MCST’s grounds for claiming relief against the Developer was that, by virtue of the building defects in the common property, the Developer was in breach of the sale and purchase agreement (“SPA”) which it entered into with each original purchaser of a unit in the Condominium.¹ We shall refer to this as the “contractual cause of action”.

Initially, in Schedule 1 of the further and better particulars (“F&BPs”) dated 31 October 2011, the MCST only set out the names of the 30 subsidiary proprietors which it represented in the contractual cause of action.² Almost four years later, on 30 June 2015, the MCST filed Summons No 3193 of 2015 (“SUM 3193/2015”) to amend the F&BPs to add a further 113 subsidiary proprietors to Schedule 1 (“the Proposed Amendment”). By this time, the limitation period of the contractual cause of action had expired (see [9] and [10] below). The terms of the SPAs entered into between the Developer and the various subsidiary proprietors were largely identical, save for the identity of the purchaser, the unit in question and the contract price.

The MCST’s main reason for pursuing the Proposed Amendment was that, as this court held in Management Corporation Strata Title Plan No 2297 v Seasons Park Ltd [2005] 2 SLR(R) 613 (“Seasons Park”) at [29], the eventual damages awarded by the court “would abate corresponding to the ratio that the collective share value of the units owned by subsidiary proprietors of the units on whose behalf the action was taken bore against the total share value of all the units in the development”.³ Hence, the Proposed Amendment would, if the contractual cause of action succeeded, significantly increase the damages recoverable by the MCST against the Developer.

The decision below

At first instance, the assistant registrar disallowed the Proposed Amendment. On appeal to the High Court, the judge (“the Judge”) dismissed the appeal and affirmed the decision to disallow the Proposed Amendment. The grounds of the Judge’s decision have been reported as Management Corporation Strata Title Plan No 3322 v Mer Vue Developments Pte Ltd and others (King Wan Construction Pte Ltd and others, third parties) [2016] SGHC 28 (“the GD”).

The first issue which the Judge had to deal with was whether SUM 3193/2015 was an application to join new parties under O 15 r 6 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“the Rules of Court”) rather than an application for an amendment of pleadings. Rejecting the Developer’s submission that SUM 3193/2015 was an attempt to add an additional 113 subsidiary proprietors as parties to S 563/2011, and finding that SUM 3193/2015 was correctly brought as an application to amend pleadings, the Judge held: The “parties” envisaged in O 15 r 6 were those whose names were reflected in the originating process (ie, the writ or originating summons); the names of the subsidiary proprietors were not reflected in the originating process (the GD at [14]). When a management corporation brought an action on behalf of its subsidiary proprietors, the management corporation itself, rather than the subsidiary proprietors, was the party before the court (the GD at [15]). The Judge went on to hold that even if the Proposed Amendment amounted to adding new parties, it should not be allowed under O 15 r 6 as limitation had set in in relation to the contractual claim of the new parties (the GD at [16])

The Judge then moved to consider whether he had the power to grant the Proposed Amendment under O 20 r 5 of the Rules of Court, and if so, whether he should exercise his discretion to do so. Finding that the contractual claims of the new parties were time barred at the time SUM 3193/2015 was filed (the GD at [35] and [39]), the Judge held that he had no power to grant the amendment: First, he held that O 20 r 5 operated in two distinct ways depending on whether the relevant limitation period had expired: (a) where limitation had not set in, amendments could be allowed under O 20 r 5(1); but (b) where the limitation period had expired, O 20 r 5(1) had no application and the court could only grant leave to amend the pleadings if the amendments fell strictly under the three situations in O 20 rr 5(3)–(5) read with r 5(2) (the GD at [18]). Given that the limitation period had expired in this case, the court had no discretion to allow an amendment under O 20 r 5(1) and could only allow the amendment if the amendment could be brought under O 20 rr 5(3)–(5) read with r 5(2) (the GD at [41]). The Proposed Amendment did not fall under any of the three exclusive situations set out in O 20 rr 5(3), 5(4) or 5(5) (the GD at [41]). Specifically, the Judge observed that the Proposed Amendment did not seek to add or substitute a new cause of action pursuant to O 20 r 5(5).

The appeal

The Judge’s finding that the contractual cause of action was time-barred at the time SUM 3193/2015 was filed, ie, on 30 June 2015 (see [9] above), was not challenged on appeal. The arguments on appeal centred on the following two issues: whether SUM 3193/2015 amounted to an application to join new parties to S 563/2011; and whether the Proposed Amendment should be allowed under O 20 r 5.

It should be noted that although both parties did address the joinder of parties issue in their submissions,⁴ there was no cross-appeal by the Developer against the determination of the Judge that SUM 3193/2015 did not amount to an application for the joining of new parties. While this was not raised by the parties, we would add for completeness that arguably, in light of the analysis in Lim Eng Hock Peter v Lin Jian Wei and another and another appeal [2010] 4 SLR 331 at [26]–[28] (affirmed in Chiam Heng Hsien (on his own behalf and as partner of Mitre Hotel Proprietors) v Chiam Heng Chow (executor of the estate of Chiam Toh Say, deceased) and others [2015] 4 SLR 180 at [100]–[101]), the Developer could not alternatively rely on O 57 r 9A(5) of the Rules of Court to challenge the Judge’s decision on the joinder of parties issue. Be that as it may, given that extensive arguments on the joinder of parties issue were made by both parties, and given also that no procedural objection was taken by the MCST in this regard, we deemed it appropriate to express our views on the issue.

Preliminary issue: characterising the application

Before discussing the two main issues that arose in this appeal, it is appropriate for us to address the preliminary question of how SUM 3193/2015 should be...