Ng Chee Weng v Lim Jit Ming Bryan

• Jurisdiction: Singapore
• Judgment Date: 18 November 2011
• Date: 18 November 2011
• Docket Number: Civil Appeal No 190 of 2010
• Court: Court of Appeal (Singapore)

Ng Chee Weng

Plaintiff

and

Lim Jit Ming Bryan and another

Defendant

[2011] SGCA 62

Chao Hick Tin JA

and

Andrew Phang Boon Leong JA

Civil Appeal No 190 of 2010

Court of Appeal

Civil Procedure—Pleadings—Alternative pleadings—Whether alternative pleadings allowed in Singapore—Whether there were any restrictions as to putting forth inconsistent alternative pleadings—Order 18 r 7 Rules of Court (Cap 322, R 5, 2006 Rev Ed)

Civil Procedure—Pleadings—Amendment—Appellant commenced action on original cause of action before proposing to amend statement of claim to plead settlement agreement as primary claim—Whether appellant precluded by doctrine of election from making proposed amendment—Whether appellant precluded by doctrine of total failure of consideration from making proposed amendment

Civil Procedure—Pleadings—Striking out—Whether proposed amendment ought to be struck out for disclosing no reasonable cause of action—Whether proposed amendment ought to be struck out for abuse of process of court—Order 18 rr 19 (a) and 19 (d) Rules of Court (Cap 322, R 5, 2006 Rev Ed)

Civil Procedure—Pleadings—‘Without prejudice’ evidence previously struck out—Whether appellant allowed to adduce ‘without prejudice’ evidence to prove existence of settlement agreement and content of settlement agreement

Ng Chee Weng (‘the Appellant’) alleged that Bryan Lim Jit Ming (‘the Respondent’) held some shares in Sin Co Technologies (‘the Company’) on trust for him. The Appellant wanted to claim from the Respondent the dividends declared by the Company between 2003 and 2007, amounting to some $8.88 m (‘the original cause of action’). The Appellant further alleged that, sometime on or around 23 March 2009, both parties entered into settlement negotiations.

On 26 May 2009, the Appellant commenced an action in Suit No 453 of 2009 against the Respondent, pleading the original cause of action as the primary claim. In his original statement of claim, the Appellant referred to the content of the settlement negotiations between the parties, although he stopped short of alleging that there was a concluded settlement agreement. As the settlement negotiations were found to be made ‘without prejudice’, the paragraphs that referred to the settlement negotiations (‘the offending paragraphs’) were struck out by the High Court judge. The Appellants appealed to the Court of Appeal in Civil Appeal No 93 of 2009 (‘CA 93/2009’).

Over the course of arguments in CA 93/2009, the Appellant applied to amend the original statement of claim to allege the existence of a concluded settlement agreement (‘the First Proposed Amendment’). In the First Proposed Amendment, the Appellant proposed to plead the original cause of action as the primary claim, and in the alternative, to plead that there was a concluded settlement agreement. The Court of Appeal dismissed the appeal in CA 93/2009. However, an Addendum to CA 93/2009 was subsequently issued, clarifying that the Appellant was not precluded from applying for leave to make further amendments to his statement of claim, although an amendment in the precise form and sequence set out in the First Proposed Amendment should not be allowed.

The Appellant then brought the present application in Summons No 3969 of 2010 (‘SUM 3969/2010’), where he proposed to amend the original statement of claim by reversing the order of his claims (‘the Second Proposed Amendment’). In the Second Proposed Amendment, the Appellant proposed to plead a concluded settlement agreement as the primary claim, and, in the alternative, if no such agreement was found to exist, to plead that the Respondent held the dividends declared by the Company between 2003 and 2007 on trust for him. The Assistant Registrar disallowed the Second Proposed Amendment in SUM 3969/2010 and his decision was affirmed by the High Court judge in Registrar's Appeal No 379 of 2010. The Appellant appealed.

Held, allowing the appeal:

(1) The law that governed amendment of pleadings was well-established. An amendment which would enable the real issues between the parties to be tried should be allowed subject to penalties on costs and adjournment, if necessary, unless the amendment would cause injustice or injury to the opposing party which could not be compensated for by costs or otherwise. If there would be no injustice caused save some inconvenience that could be compensated by costs, and if the amendment was in order, the court would lean favourably towards allowing the amendment: at [22] and [29].

(2) An amendment was in order if it complied with the established rules of pleading set out in O 18 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) as well as under the common law. Since our Rules of Court were silent as to whether or not inconsistent alternatives could be pleaded, the common law rules on alternative pleadings continued to apply in Singapore: at [30] and [31].

(3) A plaintiff might base his claim alternatively, upon two or more different sets of facts, each entitling him to the relief sought, or of some modifications of it. When pleading inconsistent causes of action in the alternative, a litigant had to ensure that the facts were not mixed up and were stated separately in order to demonstrate on what facts each alternative relief was based. Failure to do so would likely result in confusion and embarrassment: at [33] and [34].

(4) While a party could plead inconsistent rights in the alternative, the inconsistency could not offend common sense. An example of an inconsistency that offended common sense was where the pleader had actualknowledge of which version of the inconsistent alternatives that he put forth was true. In the present appeal, the Appellant had set out the facts supporting each of his alternative claims separately in the Second Proposed Amendment: at [35] to [37] and [40].

(5) Where the existence of a settlement agreement was in dispute, that question had to first be determined by the court before any party could be said to have breached the settlement agreement. At this stage, neither party was put to an election. The need for election between inconsistent remedies did not arise because the court had not decided whether or not there was a settlement agreement to breach. If the court determined that there was no settlement agreement, the original cause of action was not affected: at [51], [52] and [55].

(6) The issue of total failure of consideration was a premature argument to raise at this stage of the proceedings because the court had not determined whether or not there was a settlement agreement: at [82]to [84].

(7) One key exception to the ‘without prejudice’ rule was that when the issue in dispute was whether or not the settlement negotiations resulted in a concluded settlement agreement, the ‘without prejudice’ evidence exchanged over the course of negotiations was admissible at trial to prove the existence of the settlement agreement and its terms. If the court found that a settlement agreement had not been concluded, a veil could be drawn over the ‘without prejudice’ evidence for the subsequent trial of the original cause of action: at [94] to [97].

(8) An amendment could not be resisted on the ground of estoppel or defectiveness because it was precisely because the original pleading was defective that the pleader was seeking leave to amend his pleading. An amendment took effect from the date of the original pleading, as if the pleading had existed in the amended form right from the start: at [101] to [104].

(9) The draconian power of the court to strike out a claim at the interlocutory stage under O 18 r 19 (1) (a) could only be exercised when it was patently clear that there was no reasonable cause of action on the face of the pleadings. A reasonable cause of action was disclosed on the face of the Second Proposed Amendment. The mere fact that a case was weak and not likely to succeed was not a valid ground for striking out a claim under O 18 r 19 (1) (a): at [110] and [113].

(10) The Second Proposed Amendment, being properly pleaded in the alternative, was not simply a reversal of the order of the claims in the First Proposed Amendment amounting to an abuse of process of court. Taking inconsistent positions at different points in the affidavit only affected the fact finding exercise at trial, and was not, per se, an abuse of the process of court within the meaning of O 18 r 19 (1) (d): at [118] to [120].

[Observation: Generally, if the existence of a settlement agreement was in question, either party could make an application for that question to be determined as a preliminary issue. Where no application to such effect was made, but the pleadings disclosed that such an issue existed, the court could, on its own motion, make a direction to determine the question as a preliminary issue: at [60].]

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Brailsford v Tobie (1888) 10 ALT 194 (refd)

Chong Poh Siew v Chong Poh Heng [1994] 3 SLR (R) 188; [1995] 1 SLR 135 (folld)

Cropper v Smith (1884) 26 Ch D 700 (refd)

Deman Construction Corp v 1429036 Ontario Inc 64 CLR (3 d) 82 (distd)

Dilmun Fulmar, The [2004] 1 SLR (R) 140; [2004] 1 SLR 140 (distd)

Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 (refd)

Ketteman v Hansel Properties Ltd [1987] AC 189 (refd)

Lam Fung-ying v Ho Tung-sing [1993] 2 HKLR 187 (distd)

Luk Por v Chau Kim Hung [2001] 1 HKC 674 (distd)

Philipps v Philipps (1878) 4 QBD 127 (folld)

Quek Kheng Leong Nicky v Teo Beng Ngoh [2009] 4 SLR (R) 181; [2009] 4 SLR 181 (folld)

Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 (refd)

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