Png Hock Leng v AXA Insurance Pte Ltd

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean JAD
• Judgment Date: 21 March 2022
• Neutral Citation: [2022] SGHC(A) 12
• Published date: 24 March 2022
• Docket Number: Civil Appeal No 102 of 2021
• Plaintiff Counsel: Carolyn Tan Beng Hui and Kevin Leong (Tan & Au LLP)
• Defendant Counsel: Ang Tze Phern and Shaun Ou Wai Hung (Rajah & Tann Singapore LLP)
• Subject Matter: Courts and Jurisdiction,District Court,Transfer of cases
• Hearing Date: 11 March 2022
• Court: High Court Appellate Division (Singapore)

Belinda Ang Saw Ean JAD (delivering the judgment of the court): Introduction

AD/CA 102/2021 (“AD/CA 102”) concerns an application to transfer proceedings from the Magistrate’s Court to the General Division of the High Court. In AD/CA 102, the appellant, Png Hock Leng (“Png”), appeals against the decision of the High Court judge (“the Judge”) in HC/RA 162/2021, which affirmed an assistant registrar’s (“the AR”) decision in HC/OS 171/2021 (“OS 171”), to dismiss his application to transfer the whole of MC/MC 146/2020 (“MC 146”), consisting of a claim and counterclaim, to the High Court.

Png primarily contends that he has the right to transfer MC 146 to the High Court under s 54E of the State Courts Act (Cap 321, Rev Ed 2007) (“SCA”) because his counterclaim in MC 146 exceeds the monetary cap on the District Court’s jurisdiction of $250,000. Alternatively, MC 146 ought to be transferred under s 54B of the SCA because there is “sufficient reason”, an important question of law or MC 146 is a test case and there would be no irreparable prejudice to the respondent, AXA Insurance Pte Ltd (“AXA”). AXA opposes the transfer application.

In our judgment, Png’s appeal has no merits. MC 146 should not be transferred to the High Court under ss 54B and 54E of the SCA. We accordingly dismiss AD/CA 102.

The facts

Png was an insurance agent with AXA. On joining AXA in November 2013, Png entered into a front-loaded incentive agreement called the “AXA Experienced Hire Programme 2013 Agreement” dated 28 October 2013 (“EHP Agreement”) and an advisor’s agreement dated 11 November 2013 (“Adviser’s Agreement”) with AXA which, read together, conditionally paid Png certain sums of monies upfront upon his appointment as an agent of AXA.¹

On 6 January 2020, AXA commenced MC 146 against Png in the Magistrate’s Court. In its Statement of Claim, AXA pleads that it paid Png the total sums of $71,108 (“Payout Sums”) including a sign-on fee of $40,000 (“SOF”) in January 2014 and monthly transition bonuses between June 2014 and March 2017 pursuant to the EHP Agreement and the Adviser’s Agreement.² Png failed to meet his production and persistency requirements in breach of the EHP Agreement and AXA sought to recover the SOF.³ Png resigned on 25 April 2017 and his resignation terminated the EHP Agreement.⁴ As a result of the contractual breaches and the termination, AXA claims an outstanding sum of $54,904.38 (ie, clawbacks of proportions of the Payout Sums and SOF).⁵

In his Defence and Counterclaim (Amendment No 1), Png denies that he breached the EHP Agreement and that he is contractually obliged to repay any amount to AXA.⁶ In his defence, he claims that the contractual provisions relied upon by AXA are penalty clauses and that AXA committed a repudiatory breach of the Adviser’s Agreement and EHP Agreement by illegally varying the terms of the agreements and unlawfully suspending him from selling single-premium insurance products.⁷ Further, AXA unlawfully interfered with Png’s trade and profession as an insurance agent by giving him an “N” grade for his balanced scorecard and failing to provide him with a letter of release.⁸ As a result, Png claims that he was unable to work in the finance industry due to alleged damage to his reputation caused by AXA and he now works in the construction industry.⁹ Thus, he counterclaims for $1,000,000 being the loss of income from May 2017 to April 2021 (the date of Defence and Counterclaim (Amendment No 1)) and/or damages to be assessed in respect of other heads of claim.¹⁰

On 23 February 2021, Png commenced OS 171 to transfer the whole of MC 146 from the Magistrate’s Court to the High Court pursuant to ss 54B or 54E of the SCA. Pursuant to the Magistrate’s Court directions, AXA need not file its defence to Png’s counterclaim pending the conclusion of OS 171, including the present appeal. On 10 June 2021, the AR heard and dismissed OS 171 with costs of $3,000 (all inclusive) awarded to AXA. His reasons are contained in the notes of evidence dated 10 June 2021 (“NE”).

On 23 June 2021, Png appealed against the AR’s decision. On 18 August 2021, the Judge heard and dismissed RA 162 with costs of $5,000 (all inclusive) awarded to AXA. The Judge also rejected Png’s request on 27 August 2021 for further arguments and an oral hearing. Png then filed AD/CA 102 on 29 September 2021.

On 11 March 2022, we heard AD/CA 102 and reserved judgment. The day before, counsel for the appellant, Ms Carolyn Tan (“Ms Tan”), filed a notice to refer to two originating summonses, affidavits and orders of court filed in HC/OS 106/2020 and OS 15/2011. During the hearing, Ms Tan sought leave to refer to these documents as precedent that transfer applications have been allowed simply based on the pleaded quantification of the claims or counterclaims. Counsel for the respondent, Mr Ang Tze Phern (“Mr Tan”), objected on the basis that the notice to refer was a procedural misstep as it was being used as a backdoor attempt to introduce evidence on appeal. As we do not find these documents relevant to AD/CA 102, there is no need to deal with Mr Ang’s contentions.

AR’s decision in OS 171

We briefly summarise the decisions below. The AR considered both ss 54B and 54E of the SCA. Png relied on three main grounds for the transfer: (a) that the quantification of his counterclaim exceeded the District Court limit; (b) that the case involved important questions of law and public interest concerning the roles and responsibilities of a financial advisor, the Financial Advisors Act (Cap 110, 2007 Rev Ed) (“FAA”) and Monetary Association of Singapore (“MAS”) regulations; and (c) that for largely the same reasons as in (b), this is a test case more appropriately dealt with in the High Court: NE at [1].

Dealing with s 54B of the SCA, the AR held that the proceedings did not raise any important question of law or warrant characterisation as a test case. While it may have involved financial dealings, the FAA and the MAS, the shape of pleadings and arguments did not present any issue of law that required resolution by a higher court or where resolution by a higher court is needed for the fundamental operation of the industry or some other fundamental public interest. There was no specific issue of law that would necessarily have to be addressed at trial: NE at [2]–[3].

The “other sufficient reason” limb was not satisfied. As regards the prospects of mediation if the matter was transferred to the High Court, Png contended that AXA had indicated it was only open to mediation if the matter was transferred to the High Court. However, AXA clarified that it was also amenable to mediation in the State Courts. Thus, it was not necessary or helpful to order a transfer just so the parties would be amenable to mediation: NE at [4]–[5].

The AR did not find the other reasons raised by Png persuasive: NE at [6]. First, the fact that a counterclaim exceeded the District Court’s jurisdiction did not in itself constitute a “sufficient reason”. The AR relied on Autoexport & EPZ Pte Ltd (formerly known as AJ Towing (S) Pte Ltd v TOW77 Pte Ltd [2021] 4 SLR 1201 (“Autoexport (HC)”) for the proposition that something more than that fact is required. On the test – prima facie credible evidence supporting the counterclaim in a transfer application – the AR’s view is that given the preliminary stage of the proceedings in that AXA had not filed its Reply and Defence to the Counterclaim, a determination of the prima facie merits and credibility of the evidence would effectively be a preliminary trial. The better position is that if the pleadings made clear that the counterclaim was brought solely or vexatiously to abuse the transfer process, that would be sufficient to dismiss the transfer application. The AR did not consider this case an abuse of process: NE at [7]. Second, the AR rejected Png’s argument that it would be better for perception if the proceedings were heard by the High Court since this was a “David” versus “Goliath” situation: NE at [8]. Third, there was nothing particularly complex that would more appropriately be heard in the High Court. The causes of action seemed fairly straightforward and would be within the realm of issues dealt with regularly in the State Courts: NE at [9].

Dealing with s 54E of the SCA, the AR relied on the same three reasons stated in the preceding paragraph. Further, since MC 146 was on a simplified track which was designed to expedite matters and facilitate their resolution at lower costs, it would be beneficial for the parties and especially Png who was, in his counsel’s words, the “David” going up against the “Goliath”. The AR considered that making the transfer order would deprive parties of that set of procedures and subject them to the extended rules of the High Court: NE at [10]. Finally, the AR also noted that it was inappropriate to transfer the counterclaim alone since the claim and counterclaim are between the same parties and arise largely from the same set of facts: NE at [11].

Judge’s decision in RA 162

In RA 162, the Judge noted that Png had relied on substantially the same grounds as he did in OS 171. In Png Hock Leng v AXA Insurance Pte Ltd [2021] SGHC 231 at [2]–[3], the Judge agreed with the AR’s decision in toto and dismissed RA 162.

The parties’ arguments

Preliminarily, we note that it is common ground that neither party sought for Png’s counterclaim to be transferred to the High Court alone and for AXA’s claim to proceed in the Magistrate’s Court.¹¹ Png sought a transfer of the whole of MC 146 to the High Court while AXA submitted that MC 146 should remain in the Magistrate’s Court.

The appellant’s case

Png’s case is that MC 146 ought to be wholly transferred to the High Court under s 54E of the SCA because his counterclaim involves a matter beyond the District Court limit and AXA would not be prejudiced by a transfer.¹² Section 54E is couched as an ...