Mitora Pte Ltd v Agritrade International (Pte) Ltd

• Judgment Date: 03 July 2013
• Date: 03 July 2013
• Docket Number: Civil Appeals Nos 85 and 86 of 2012
• Court: Court of Appeal (Singapore)

Mitora Pte Ltd

Plaintiff

and

Agritrade International (Pte) Ltd

Defendant

[2013] SGCA 38

Sundaresh Menon CJ

,

V K Rajah JA

and

Tan Lee Meng J

Civil Appeals Nos 85 and 86 of 2012

Court of Appeal

Civil Procedure—Striking out—Breach of ‘unless orders’—Breaching two ‘unless orders’ for discovery of documents—Whether plaintiff's statement of claim should have been struck out for breach of ‘unless orders’

The appellant (‘the Appellant’) was the assignee of a purported debt owed by the respondent (‘the Respondent’). The action was commenced on 22 July 2010 and on 9 May 2011 the Respondent filed an application for the discovery of eight categories of documents. These documents were principally relevant to the Respondent's counterclaim. The application was granted on 26 May 2011. Due to the assignor's initial unwillingness to release certain classes of documents the Respondent then obtained two successive ‘unless orders’ against the Appellant to compel compliance with the 26 May 2011 order. The Appellant's failure to comply fully with these orders culminated in its statement of claim being struck off by the assistant registrar (‘AR’). At the hearing of the appeal against the AR's order, the judge granted two further adjournments for the Appellant to fully comply with its discovery obligations. By 18 May 2012 the Appellant had substantively complied with the 26 May 2011 order. However, at the final hearing before the judge on 23 May 2012 the Respondent raised a fresh objection which alleged that one of the categories of disclosed documents was unsatisfactory. The judge upheld this objection and subsequently dismissed the appeal on the basis that there had not been extraneous circumstances which prevented the Appellant from complying with the court orders.

Held, allowing the appeal:

(1) It was evident from the record that the Appellant did substantively comply with all its discovery obligations by 18 May 2012. Further, the two adjournments granted by the judge suggested that he had a favourable disposition towards the Appellant up to the point of the third hearing. As such it was the fresh objection that discovery had been inadequate rather than incomplete which had been the tipping point for the judge. However, this objection had little merit given that the requested documents did not exist and, in any event, an adequate substitute had been disclosed in their place. The statement of claim had therefore been incorrectly struck out on a mere technicality: at [21] and [23] to [26].

(2) A further procedural irregularity was that the Appellant's statement of claim had been struck out even though the documents referred to in the 26 May 2011 order pertained principally to the Respondent's counterclaim.This irregularity was amplified by the fact that the Appellant was stricto sensu a non-party to the Respondent's counterclaim: at [31] and [33].

(3) Even where there had been an intentional and contumelious breach of an ‘unless order’, the court would nevertheless have to determine what sanction should be imposed as a result. In doing so the court would be guided by considerations of proportionality after taking all circumstances of the case into account. All things considered the striking out of the Appellant's statement of claim owing to its previous breaches of ‘unless orders’ was not proportionate: at [37] to [39] and [41].

(4) As it was axiomatic that ‘unless orders’ had to mean what they said, it was imperative that such orders were drafted with due care and consideration. To that end ‘unless orders’ would be more scrupulously employed if they were not given as a matter of course, contained conditions which were tailored to the prejudice which would be suffered should there be non-compliance, and also contemplated other means of penalising contumelious or persistent process breaches. Litigants remained vulnerable to the ultimate sanction of a striking-out order in cases which involved an inexcusable breach of a significant procedural obligation: at [45] and [47].

[Observation: Counsel had a duty to take up all objections at the right time for the same reasons which underpin the species of res judicata based on abuse of power. It was all the more incumbent upon the applicant for an ‘unless order’ to raise all its arguments at the earliest opportunity: at [26] and [29].)

The immediate purpose of an ‘unless order’ was not to punish misconduct but to secure a fair trial in accordance with due process of law. However, in exceptional circumstances an action could be struck out even where there was still a reasonable prospect of a fair trial: at [45] and [48].]

Chun Thong Ping v Soh Kok Hong [2003] 3 SLR (R) 204; [2003] 3 SLR 204 (refd)

Coles and Ravenshear, Re an Arbitration between [1907] 1 KB 1 (refd)

Goh Nellie v Goh Lian Teck [2007] 1 SLR (R) 453; [2007] 1 SLR 453 (refd)

Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 (refd)

Hunter v Chief Constable of the West Midlands Police [1982] AC 529 (refd)

Husband's of Marchwood Ltd v Drummond Walker Developments Ltd [1975] 1 WLR 603 (refd)

Hytec Information Systems Ltd v Coventry City Council [1997] 1 WLR 1666 (folld)

Johnson v Gore Wood & Co [2002] 2 AC 1 (refd)

Jokai Tea Holdings Ltd, Re [1992] 1 WLR 1196 (refd)

Lai Swee Lin Linda v AG [2006] 2 SLR (R) 565; [2006] 2 SLR 565 (refd)

Lee Chang-Rung v Standard Chartered Bank [2011] 1 SLR 337 (refd)

Lee Hiok Tng v Lee Hiok Tng [2001] 1 SLR (R) 771; [2001] 3 SLR 41 (refd)

Lee Hsien Loong v Review Publishing Co Ltd [2009] 1 SLR (R) 177; [2009] 1 SLR 177 (refd)

Lee Tat Development Pte Ltd v MCST Plan No 301 [2009] 1 SLR (R) 875; [2009] 1 SLR 875 (refd)

Manilal and Sons (Pte) Ltd v Bhupendra KJShan [1989] 2 SLR (R) 603; [1989] SLR 1182 (refd)

Marcan Shipping (London) Ltd v Kefalas [2007] 1 WLR 1864 (refd)

Review Publishing Co Ltd v Lee Hsien Loong [2010] 1 SLR 52 (refd)

Syed Mohamed Abdul Muthaliff v Arjan Bhisham Chotrani [1999] 1 SLR (R) 361; [1999] 1 SLR 750 (refd)

Tan Kok Ing v Ang Boon Aik [2002] SGHC 215 (refd)

Teeni Enterprise Pte Ltd v Singco Pte Ltd [2008] SGHC 115 (folld)

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 14, O 24 r 16 (1)

Peter Madhavan and Walter Ferix Justine (Joseph Tan Jude Benny LLP) for the appellant

Kelly Yap and Morgan Chng (Oon & Bazul LLP) for the respondent.

Introduction

1 These appeals related to the appellant's breach of two ‘unless orders’ which resulted in the striking out of its statement of claim despite its belated and clumsy efforts at compliance.

2 Mitora Pte Ltd (‘the Appellant’), was a company incorporated in Singapore providing business and management consultancy services. In late 2009 the Appellant's director, Mr Andreas Thanos (‘Mr Thanos’), met with one Mr Takeshi Sawanobori (‘Mr Takeshi’), the managing director of Senamas Far East Inc (‘Senamas’), through mutual associates. Senamas was incorporated in Japan (circa March 2005) and operates out of Tokyo. Broadly, it provides consultancy services to companies involved in the development of coal resources. According to Mr Takeshi, however, Senamas was set up primarily to provide consulting services to Agritrade International (Pte) Ltd (‘the Respondent’). This arrangement purportedly arose out of discussions between Mr Takeshi and the Respondent's director, Mr Ng Say Pek (‘Mr Ng’).

3 Mr Thanos was informed by Mr Takeshi that Senamas was having difficulty enforcing a debt against the Respondent. They decided that they could work together. ‘To keep matters simple’ - a phrase made ironic by the proceedings which led to this appeal - it was agreed that Senamas would assign its debt against the Respondent to the Appellant. A deed of assignment was entered into on 9 April 2010 (‘Deed of Assignment’) in consideration of US$100,000.

4 The Respondent was a company incorporated in Singapore and engaged in the business of, inter alia, coal trading. In a consultancy agreement with Senamas dated either 3 March 2005 or 5 March 2005 (‘the Consultant Agreement’), the Respondent appointed Senamas as a consultant in the development of the Respondent's coal mines in the Republic of Indonesia. Senamas was also to act as the Respondent's exclusive agent to develop and market the Respondent's coal to Japan and Korea. The Appellant asserted that the Consultant Agreement provided that:

(a) the Respondent was to pay Senamas a commitment fee of US$50,000 per year starting 1 April 2005 up to April 2009; and

(b) the Respondent was to pay Senamas a monthly consultancy fee of US$12,500 on the first of each month starting from April 2005.

5 The Appellant's main suit (Suit No 535 of 2010) was founded on a sum of US$625,000 which purportedly remained unpaid to Senamas under the the Consultant Agreement. It claimed that the Respondent ceased performance of its payment obligations after September 2007.

6 The Respondent denied that the Consultant Agreement consisted of any commitment fee, and further argued that the Consultant Agreement had been terminated in or around September 2008. A counterclaim was also advanced on the basis that Senamas had breached its obligations as the Respondent's exclusive agent in Japan by providing consultancy services to other companies.

Background to the appeal

7 The Appellant commenced its action on 22 July 2010. The first list of documents and affidavit verifying the same were filed on 31 March 2011. On 9 May 2011 the Respondent filed an application for discovery in Summons No 1960 of 2011 (‘SUM 1960/2011’) which was heard before Assistant Registrar (‘AR’) Sngeetha Devi. The application was granted on 26 May 2011 and the Appellant was ordered to file and serve a supplementary list of documents by 10 June 2011, disclosing the following eight categories of documents (‘the 26 May 2011 Order’):

(a) all documents, including but not limited to correspondence exchanged between Mr Takeshi and/or Senamas and the Respondent, payment...