Olivine Capital Pte Ltd v Chia Chin Yan

Judgment Date09 April 2014
Date09 April 2014
Docket NumberCivil Appeal No 86 of 2013 and Summons No 6101 of 2013
CourtCourt of Appeal (Singapore)
Olivine Capital Pte Ltd and another
Chia Chin Yan and another matter

Chao Hick Tin JA


Andrew Phang Boon Leong JA


Quentin Loh J

Civil Appeal No 86 of 2013 and Summons No 6101 of 2013

Court of Appeal

Civil Procedure—Contract—Mistake—Compromise agreement purportedly entered into by mistake—Whether issue of mistake should be resolved at trial

Civil Procedure—Pleadings—Summary determination—Resisting defendant applying to amend defence—Whether amendment required—Whether defendant in O 14 proceedings bound by four corners of his pleadings—Order 14 Rules of Court (Cap 322, R 5, 2006 Rev Ed)

Civil Procedure—Summary determination—Compromise agreement utilising latently ambiguous language—Whether extrinsic evidence admissible—Whether construction of compromise agreement suitable for summary determination

The first appellant, Olivine Capital Pte Ltd, was the leaseholder of a plot of land that was to be redeveloped. The second appellant, Ong Puay Guan (alias Steven Ong), is the chief executive officer and a director of the first appellant. The first appellant initially hired the respondent, Chia Chin Yan, as the professional engineer of the redevelopment project. Work began in late 2007. In September 2007, an underground sewer pipe was damaged during piling work. The appellants alleged that the respondent had negligently failed to ascertain whether there was an underground sewer during the preparation of the piling plan, had given the go-ahead to proceed with the piling, and had also failed to supervise the piling operation. The respondent denied this and alleged that the appellants were negligent in commencing the piling work without his knowledge and consent.

On 24 December 2007, the Public Utilities Board (‘the PUB’) gave notice to the parties to repair the damaged sewer. On 31 December 2007, the appellants told the PUB that they would not do the repair work, and agreed to bear the cost of the PUB doing the repair work instead. On 16 January 2008, the PUB informed the appellants that the estimated cost would be $600,000. The following day, the appellants informed the respondent and other parties that they would be held liable for the repair cost. The respondent oversaw the repair work from December 2007 to February 2008. On 28 April 2008, the PUB invoiced the first appellant a sum of $513,939.18.

After a dispute with the initial builder for the project in June 2009, the first appellant appointed a second builder, HPC Builders Pte Ltd (‘HPC’). Contemporaneously with this, the respondent took on the additional roles of architect and project coordinator, on top of his initial role as professional engineer.

On 16 July 2009, the Respondent was charged with an offence under s 14 (1) of the Sewerage and Drainage Act (Cap 294, 2001 Rev Ed). On 15 October 2009, the respondent resigned and gave the second appellant a letter on the respondent's company letterhead (‘the Compromise Letter’). The Compromise Letter, signed by the second appellant in his capacity as chief executive officer of the first appellant and the respondent, stated that ‘we agree to amicably terminate my role as Qualified Person (Architectural and Structural) and project coordinator with effect from 15 October 2009 with no claim from either party’.

On 11 September 2012, the appellants filed suit against the respondent and Lee, essentially alleging that they were negligent and claiming, inter alia, an indemnity for compensation payable to the PUB. The respondent denied these allegations in his defence, and also counterclaimed for an order that the appellants indemnify him against all losses arising from the charges brought against him under the Act. On 1 February 2013, the respondent sought a determination under O 14 r 12 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) as to whether the Compromise Letter was effective to release him from any liability to the appellants apropos the damaged sewer. The assistant registrar held that the Compromise Letter did have this effect. The High Court judge in turn dismissed the appellants' appeal against the assistant registrar's decision. The appellants appealed, seeking to set aside the O 14 r 12 determination. In the course of this appeal, the appellants also made new submissions not found in their pleaded case, and applied to amend their pleadings.

Held, allowing the appellants' amendment to their pleaded defence, allowing the appeal, setting aside the Order 14 rule 12 determination and remitting the matter for trial:

(1) The starting point underlying the issue of whether a defendant could introduce new arguments in an appeal from an O 14 determination was the principle of finality in litigation. As an O 14 determination was conducted on the basis of affidavit evidence, this court was in as advantageous a position as the court below to adjudicate on the appellants' new submissions: at [21] and [22] .

(2) There were two lines of cases taking diametrically opposed views on whether a defendant was bound by the four corners of his pleadings during an O 14 determination. The observations in Poh Soon Kiat v Desert Palace Inc[2010] 1 SLR 1129 were obiter dicta. The case concerned the key threshold issue of whether the court had the power to enforce a foreign judgment; the court would have considered this issue sua sponte and would have requested for submissions on the same even if the parties had not raised it in their pleadings: at [23] and [40] .

(3) If a defendant was not bound by his pleadings in O 14 proceedings, it could lead to an absurd situation. A defendant could succeed in resisting O 14 proceedings on the basis of an unpleaded defence. If an amendment to the defence was subsequently disallowed, the defendant would not be able to rely on it, with the paradoxical result that he would have no arguable defence and that summary judgment should have been entered in the plaintiff's favour in the first place. This would undermine the raison d'être of O 14, which was precisely the expeditious resolution of cases which did not require a full-blown trial: at [41] .

(4) Under the old regime prior to changes made to the Rules of Court in 2006, a plaintiff filing his O 14 application before the defence was filed could not pre-emptively rebut all of the defendant's possible defences, and had to wait for the defendant's affidavit in order to see what grounds the resisting defendant was relying on. Practically speaking, the plaintiff would always have to file and serve on the defendant a supplementary affidavit in order to reply to the resisting defendant's affidavit. This would drag out the O 14 process as leave was required for the parties to file further affidavits in response to the plaintiff's reply affidavit. After the 2006 amendments, an O 14 application was only allowed after the defence was filed. This meant that at least one round of affidavits was dispensed with, as the plaintiff knew exactly what the defendant's pleaded case was. If a defendant was not bound by his pleadings this would undermine the efficiency of the new regime and take the plaintiff by surprise: at [42] .

(5) In the circumstances, a fresh defence that had not been pleaded could not be relied on by the defendant in O 14 proceedings unless the defence was amended or unless the case was an exceptional one where the court concerned was of the view that there were good reasons to permit reliance on such a defence, as, for instance, if the fresh defence struck at the heart of the court's powers: at [43] .

(6) Amendments to pleadings ought to be allowed if they would enable the real question and/or issue in controversy between the parties to be determined. Order 14 proceedings, ex hypothesi, took place before or in place of a trial. If the appellants in this case were allowed to amend their defence to the respondent's counterclaim, the respondent could hardly be said to suffer from prejudice that could not be compensated by costs. On the contrary, if the appellants were not allowed to amend their defence to the respondent's counterclaim and failed to resist the O 14 application, that could be tantamount to a denial of justice. The appellants' application for leave to amend their pleaded defence was therefore allowed: at [44] , [46] and [47] .

(7) If a question of construction would finally determine whether an important issue was suitable for determination under O 14 and where it was a dominant feature of the case a court ought to proceed to so determine the issue. The construction had to be capable of being achieved without a full trial and fully determine the entire cause or matter. The invocation of O 14 r 12 was therefore not appropriate where factual disputes would affect the point of construction: at [49] to [51] .

(8) There was a sharp line between the use of extrinsic evidence to interpret a contract, and to contradict or vary it. The Compromise Letter in this case referred to the respondent's role as ‘Qualified Person (Architectural and Structural) and project coordinator’. The respondent was the professional engineer from May 2006 onwards, and took on the additional roles of architect and project coordinator from June 2009 onwards. There was latent ambiguity over whether the Compromise Letter applied to the respondent qua engineer alone, or qua engineer, architect and project coordinator all at once; it was therefore uncertain whether the Compromise Letter covered damage to the sewer. No variation or contradiction was involved in choosing one or the other, and extrinsic evidence was admissible. This matter was therefore unsuitable for an O 14 determination: at [54] , [56] to [58] and [60] .

(9) Whether or not there had been a common mistake at common law and in equity turned on the factual question of whether the parties held a common mistaken view of the ambit of the Compromise Letter. This could only be resolved at trial: at [68] and [70] .


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