Mycitydeal Ltd (trading as Groupon UK) and others v Villas International Property Pte Ltd and others

• Judge: Steven Chong J
• Judgment Date: 09 October 2014
• Neutral Citation: [2014] SGHC 196
• Docket Number: Suit No 281 of 2012
• Subject Matter: Judgments and orders,Pleadings,Order 27 r 3,Admissions of fact,Proof of contents,Evidence,Civil Procedure,Documentary evidence,Breach,Contract
• Hearing Date: 06 August 2014,25 August 2014,07 August 2014,05 August 2014
• Plaintiff Counsel: Navinder Singh and Amirul Hairi (Navin & Co LLP)
• Defendant Counsel: Rasanathan s/o Sothynathan and Nazirah K Din (Colin Ng & Partners LLP)
• Court: High Court (Singapore)
• Published date: 14 October 2014

Steven Chong J: Introduction

Prior to the trial of an action, it is quite usual for parties to engage in different forms of interlocutory applications of varying complexities. They are often either a source of distraction or useful ammunition for trial preparation. However when the dust is settled after the resolution of the interlocutories, it is essential for the claimant not to lose sight of or ignore the primary requirement to prove its claim. This is especially so if the claim is for a liquidated sum based on an allegedly unpaid contractual debt. This was, unfortunately for the claimant, precisely what happened in this case.

The trial of the action only concerned the defendants’ counterclaims against 13 Groupon entities from 13 different countries for numerous unpaid vouchers that had allegedly been redeemed, the plaintiffs’ claims having been dismissed for failure to comply with an “unless order”. Separate and distinct claim amounts were pleaded against each of the 13 Groupon entities. However, only bare particulars were provided in respect of each counterclaim. Not unexpectedly, this prompted the plaintiffs to apply for further and better particulars of the respective claim amounts. The application was successfully resisted by the defendants. They were able to convince the Assistant Registrar that the particulars sought relate to matters of evidence and hence need not be pleaded.

Having taken the position that the breakdown of each of the claim amounts relates to evidence, the defendants would be expected to provide the evidence at the trial to prove the respective claim amounts against each of the plaintiffs. Inexplicably, this was not done. In their Opening Statement, the defendants sought to advance their claim on an aggregate basis, ie, by purporting to add up all the redeemed vouchers less the total amounts paid by the plaintiffs to prove the balance amount outstanding from all 13 plaintiffs collectively. In response to my observation at the start of the trial on the lack of evidential basis to support the total number of redeemed vouchers and that the claim amounts need to be proved against each of the 13 plaintiffs separately and not on an aggregate basis, two exhibits, D1 and D2 were belatedly tendered by the defendants. They comprised spreadsheets, the origins of which were not satisfactorily explained. More will be said of the exhibits below. For now, it suffices to say that it is not clear how the spreadsheets were prepared. Further, tabulating the figures in a spreadsheet does not dispense with the basic requirement to prove the claim amounts. The defendants claim that they were not able to provide all the supporting documents because the documents had earlier been seized by the Commercial Affairs Department (“CAD”) in connection with the plaintiffs’ complaint. However no evidence was led to show that they took any steps to secure the release of the documents from the CAD to fulfil their discovery obligations. Nonetheless they were still able to produce a “sampling” of the primary documents but this was of little comfort to the defendants because, based on those documents, the sums simply did not add up to support the pleaded claim amounts. No explanation was offered as to why the defendants were able to provide a sampling of the primary documents when all had allegedly been seized by the CAD.

Recognising that there are severe gaps in exhibits D1 and D2, the defendants sought to address the flaws of their case in seeking to rely on alleged “admissions” by the plaintiffs’ representative in an earlier affidavit filed in connection with the defendants’ application to discharge a Mareva Injunction then in force against them. These “admissions” are not the usual admissions which a party relies on to obtain judgment under O 27 r 3 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“Rules of Court”). None of them admits to the claim amounts. Instead they are statements in an affidavit (extracted from a different context) which the defendants seek to rely on to prove one component of the claim amounts against the plaintiffs. There are many difficulties with such an approach, the most serious of which is the conspicuous fact that reliance on the alleged “admissions” would result in claim amounts quite different, some higher and some lower, from the pleaded claim amounts. No explanation was forthcoming from the defendants to reconcile the conflicting amounts. In fact, they readily concede that they simply cannot be reconciled. To date, no application has been made to amend the pleaded claim amounts to those arrived at on the basis of this new “admissions” case theory. Naturally this approach took the plaintiffs by surprise since the case which they were asked to meet at the closing submissions was quite different from the case as pleaded. Is such an approach permissible to prove the claim amounts? Clearly not. As such, the various attempts by the defendants to plug the evidential gaps of their claims not only failed to address them, they in fact highlighted the gaps and hence compounded the defendants’ shortcomings as regards proof or the lack thereof of their claims.

As it turned out, this was not the only problem that the defendants faced in their quest to prove their claims. The contractual arrangement between the parties required the defendants to submit evidence of valid redemption of the vouchers to the plaintiffs within 28 days of the vouchers having been validly redeemed by the end-consumer failing which the defendants “shall lose its right to receive” payment. Both parties relied on the same clause for different purposes and each adopted diametrically opposing views on the question of the burden of proof. Was it for the defendants to prove that the evidence of valid redemption was submitted within 28 days or for the plaintiffs to establish that such evidence was submitted outside the 28-day window? The defendants claimed that this requirement was never previously insisted upon and was only pleaded by the plaintiffs at a late stage of the proceedings. Yet, no waiver or estoppel was pleaded by the defendants in response.

Having broadly set out my general observations on the relevant issues, I turn now to provide the background to the present dispute.

The facts The parties

The 13 plaintiffs are related entities worldwide which are each partly owned by Groupon Inc, a company incorporated in the United States of America.1Affidavit of Evidence-in-Chief of Mr Adrien Jean Bernard Jorge dated 31 March 2014 (“Mr Jorge’s AEIC) at para 10.1 Where relevant, each of these Groupon entities will be individually referred to with a suffix indicating its geographical location. Therefore the first plaintiff will be referred to as “Groupon UK”, the second plaintiff as “Groupon France” and so on.

The plaintiffs’ primary business is in the running of “deal-of-the-day” 2Mr Jorge’s AEIC at para 11 websites where discount vouchers for a range of advertised goods and services may be purchased by internet users. To be clear, the actual provision of such goods and services to the end-consumer is not by the plaintiffs themselves; instead, this is typically undertaken by various merchants who have contracted with the plaintiffs to have their goods and services promoted at a discounted rate on the plaintiffs’ online platform.3Mr Jorge’s AEIC at paras 12–13 However there may also be instances where the contracting merchant is not the actual goods/service provider (as in the present case).4Mr Jorge’s AEIC at para 13 To illustrate, this may occur where a merchant which contracts to advertise hotel stay packages on the plaintiffs’ websites is not actually the hotel itself but, for example, a travel agency. In all instances, however, the process which the end-consumer has to go through is the same: first, he purchases a voucher directly from the plaintiffs online; then, he looks to the contracting merchant to redeem the voucher and obtain the purchased good or service as the case may be, and this usually involves him having to present a computer print-out of the voucher to the merchant.5Mr Jorge’s AEIC at para 15; Statement of Claim dated 4 June 2012 (“SOC”) at para 17

Subsequently, the merchant would seek to obtain payment from the plaintiffs in respect of the redeemed vouchers according to the mechanism provided under the contract with the plaintiffs.6Mr Jorge’s AEIC at para 14 The sum payable to the merchant is usually stipulated as the price of the voucher less an agreed success fee to which the plaintiffs are entitled and any tax which is payable.7SOC at para 19

The first defendant was incorporated on 9 March 2011 as a private limited company of which the third and fourth defendants are listed as directors and equal shareholders. Its business is concerned with hotel management, consultancy services, luxury property management and booking services.8Mr Jorge’s AEIC at para 10.5 The second defendant is a sole proprietorship registered on 24 August 2010 with the fourth defendant as its sole proprietor and it provides a similar but more limited range of services than the first defendant.9Mr Jorge’s AEIC at para 10.6 However, according to its corporate profile maintained with the Accounting and Corporate Regulatory Authority, the second defendant had ceased carrying on business prior to the commencement of the trial.10Mr Jorge’s AEIC at para 10.6 Both the first and second defendants are relatively young set-ups and they share the same registered address in Textile Centre along Jalan Sultan.11Mr Jorge’s AEIC at para 10.5

The dispute

The first and second defendants contracted as merchants with the plaintiffs under agreements which shall hereinafter be referred to collectively as “the Co-operation Agreements”.12Affidavit of Evidence-in-Chief of Ms Samirah Bte Hamza dated 28 March 2014 (“Ms Hamza’s AEIC”) at para 8 It was agreed that the first...