Olivine Capital Pte Ltd and another v Chia Chin Yan and another matter

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 09 April 2014
• Neutral Citation: [2014] SGCA 19
• Court: Court of Appeal (Singapore)
• Hearing Date: 16 January 2014
• Docket Number: Civil Appeal No 86 of 2013 and Summons No 6101 of 2013
• Plaintiff Counsel: James Leslie Ponniah and Vincent Yeoh (Malkin & Maxwell LLP)
• Defendant Counsel: Daniel Chia and Loh Jien Li (Stamford Law Corporation)
• Subject Matter: Civil Procedure,Summary Judgment,Contract,Interpretation
• Published date: 14 April 2014

Andrew Phang Boon Leong JA (delivering the grounds of decision of the court): Introduction

This was an appeal against the decision of the High Court judge (“the Judge”) in Olivine Capital Pte Ltd and another v Lee Chiew Leong and another [2013] SGHC 168 (“the GD”) dismissing Registrar’s Appeal No 125 of 2013 (“RA 125/2013”). That was an appeal against the decision of the assistant registrar (“the AR”) in Summons No 608 of 2013 (“SUM 608/2013”), an application made pursuant to O 14 r 12 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“the Rules of Court”). The Judge agreed with the AR that the parties had compromised all the claims between them. We allowed the appeal against the ruling of the Judge and now give the detailed grounds for our decision.

The facts

The first appellant, Olivine Capital Pte Ltd (“the First Appellant”), was the leaseholder of a plot of land at 180–188 Rangoon Road. The second appellant, Ong Puay Guan @ Steven Ong (“the Second Appellant”), is the chief executive officer (“CEO”) and a director of the First Appellant. The First Appellant sought to redevelop the land and initially hired Chia Chin Yan (“the Respondent”) as the professional engineer and one Lee Chiew Leong (“Lee”) as the architect in May 2006.

Work began on the redevelopment project (“the Project”) in late 2007. In September 2007, an underground sewer pipe was damaged during piling work. The First Appellant and the Second Appellant (collectively, “the Appellants”) alleged that the damage was caused by the negligence of the Respondent and Lee. 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 the foregoing, and alleged that the Appellants were negligent in commencing the piling work without his knowledge and consent. The alleged negligence of Lee is not germane to this appeal as it was not the subject of the O 14 r 12 proceedings.

The Public Utilities Board (“the PUB”), on 24 December 2007, 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, Lee, and the piling contractor that they were holding them liable for the repair costs.

The Respondent oversaw the repair work on the damaged sewer from December 2007 to February 2008. On 28 April 2008, the PUB invoiced the First Appellant an amount of $512,939.18. The First Appellant has yet to make the requisite payment.

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. According to the Appellants, the Respondent was to be paid by HPC under this new arrangement.

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) (“the Act”). No other parties were charged at that time.

On 15 October 2009, the Respondent resigned and gave the Second Appellant a letter (“the Compromise Letter”) on the Respondent’s company letterhead. The material parts of the Compromise Letter are as follows:¹

With regards to the captioned project, 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.

The letter was signed by the Respondent. The Second Appellant signed the letter in his capacity as CEO of the First Appellant below the phrase “I agree and acknowledge receipt of this letter”.²

On 9 March 2012, almost three years after the Respondent was initially charged, the PUB charged the Second Appellant and Lee with offences under ss 14 and 20 of the Act. The Respondent was also charged with an additional offence under s 20 of the same.

On 11 September 2012, the Appellants filed Suit No 762 of 2012 (“Suit 762/2012”) 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 filed SUM 608/2013 seeking a determination under O 14 r 12 of the Rules of Court as to whether the Compromise Letter was effective to release him from any liability to the Appellants apropos the damaged sewer. The AR held that the Compromise Letter did have this effect. The Judge in turn dismissed the Appellants’ appeal against the AR’s decision (viz, RA 125/2013).

Summary of the arguments below

The Respondent argued that the Compromise Letter compromised all claims between the Appellants and him with regard to his roles as architect, professional engineer and project coordinator. Any claim that the Appellants might have had against him for negligently causing damage to the sewer had therefore been compromised.

The Appellants argued that the ambit and effect of the Compromise Letter was not a matter suitable for summary determination under O 14 r 12 of the Rules of Court because the factual matrix surrounding the letter was in dispute. The Appellants also argued that the Compromise Letter did not release the Respondent from liability apropos the damaged sewer. Instead, the Compromise Letter only compromised claims relating to the period when the Respondent concurrently held all three roles as architect, professional engineer and project coordinator (ie, the period between June and October 2009).

It should also be noted that the Appellants did not raise the issue of mistake in the proceedings below, although they have now sought to raise this particular issue via an amendment of their pleadings.

The decision below

The Judge accepted that the factual context surrounding the signing of the Compromise Letter was relevant and in dispute. She noted that ordinarily, summary determination under O 14 r 12 was inappropriate if there were factual disputes affecting the point of construction. She pointed out that this proposition was, however, subject to two caveats: (a) there must be a genuine dispute of fact; and (b) the contract must be capable of bearing the meaning which the resisting party asserted.

In the Judge’s view, the Appellants had taken the opening words of the Compromise Letter out of context to qualify the phrase “no claim from either party”.³ It was plain on its face that the phrase was not limited in time. The Judge found the Appellants’ version of the facts incredible for three reasons: first, this was not a case of the Respondent waiving $6,000 in unpaid fees in exchange for the First Appellant releasing him from a half-a-million-dollar liability; second, there was no objective evidence of a claim by the Appellants against the Respondent, even though the PUB had already invoiced the First Appellant for the cost of repairing the damaged sewer by then; and third, it was incredible, having regard to the circumstances, that the Second Appellant would sign the Compromise Letter without qualification to the phrase “with no claim”.⁴

The Judge thus held that the Compromise Letter had effectively compromised the Appellants’ claims against the Respondent.

The parties’ respective cases on appeal and the Appellants’ proposed amendment of their pleaded defence

The Appellants submit that a determination under O 14 r 12 should not be made because the factual context surrounding the signing of the Compromise Letter is in dispute. They take the position that their evidence is not so incredible that it should be rejected, and the Compromise Letter should not be construed to release the Respondent from liability for the damage to the sewer. In any event, the Appellants contend, the Compromise Letter is void or voidable on the ground of mistake.

The Respondent, on the other hand, submits that the case is suitable for determination under O 14 r 12 because there are no genuine disputes of fact relating to the objective evidence. The Respondent contends that the Appellants’ evidence is incredible. The Compromise Letter was drafted clearly and unambiguously, and compromised all claims, including any claims pertaining to liability for the damaged sewer. The Compromise Letter, the Respondent submits, is also not void or voidable on the ground of mistake.

The Appellants’ submissions on mistake are new, and were neither pleaded in their defence to the Respondent’s counterclaim nor raised at the two hearings below. This raises a few preliminary issues, one of which centres on Summons No 6101 of 2013 (“SUM 6101/2013”), which is the Appellants’ application for leave to amend their pleaded defence. These issues shall be explored first.

The preliminary issues

The following preliminary issues are raised by the Appellants’ new submissions on mistake: Can a defendant introduce new arguments in an appeal from an O 14 determination? Is a defendant bound by the four corners of his pleadings during an O 14 determination? If a defendant is so bound, should the Appellants nonetheless be allowed to amend their pleaded defence to the Respondent’s counterclaim?

Can a defendant introduce new arguments in an appeal from an O 14 determination?

The starting point underlying the issue of whether a defendant can introduce new arguments in an appeal from an...