Silberline Asia Pacific Inc v Lim Yong Wah Allan and Others

JurisdictionSingapore
JudgeBelinda Ang Saw Ean J
Judgment Date16 February 2006
Neutral Citation[2006] SGHC 27
Plaintiff CounselAdrian Tan and Chui Li Jun (Drew and Napier LLC)
Published date16 February 2006
CourtHigh Court (Singapore)
Defendant CounselPeter Yap (instructed) and Choo Kwun Kiat (Choo Kwun Kiat)
Subject MatterCivil Procedure,Summary judgment,Whether to stay execution of summary judgment until after trial of defendant's counterclaim,Degree of connection between plaintiff's claim and defendant's counterclaim,Plausibility of defendant's counterclaim,Order 14 r 3(2) Rules of Court (Cap 322, R 5, 2004 Rev Ed)

16 February 2006

Belinda Ang Saw Ean J:

1 The plaintiff, Silberline Asia Pacific Inc, is a Delaware corporation with a registered branch office in Singapore. The plaintiff is part of the Silberline group of companies and the main business of the group is in the manufacture and worldwide distribution of special effects pigment products. At all material times, the Singapore branch office was responsible for the distribution of Silberline products in Asia Pacific and the Middle East. The first defendant, Allan Lim Yong Wah, at the relevant time headed the plaintiff’s branch office in Singapore as its managing director. The second defendant, Jason Lim Kah Soon, is a director of the third defendant, Globell Chemical Co Pte Ltd (“Globell”). The second defendant is also the managing director of Globell Chemical (China) Co Ltd (“Globell Hong Kong”), a company incorporated in Hong Kong SAR. This appeal only concerned Globell.

2 On 13 October 2005, the plaintiff obtained summary judgment against Globell for the total sum of US$5,245,736.96 with interest as prayed and costs in any event to be taxed, if not agreed. At the same time, the assistant registrar ordered a stay of execution of the entire judgment sum pending determination of Globell’s counterclaim for wrongful termination of its sole distribution agreement of Silberline products. Globell asserted that the quantum of the counterclaim exceeded the judgment sum. On 27 October 2005, the plaintiff appealed against the stay order. At the conclusion of the hearing of the appeal, I was of the view that a stay should not be granted in respect of the entire judgment sum. The correct outcome of this appeal must be to order a stay of execution of part of the judgment sum, namely, US$1,785,247.65. I also ordered costs of the appeal fixed at $2,000. Globell has appealed against my decision.

3 Notably, Globell did not appeal against the summary judgment. A stay of execution in such a situation is at the discretion of the court based on what is just in all the circumstances of the particular case as such an order will effectively require a successful plaintiff to wait for its money. Order 14 r 3(2) of the Rules of Court (Cap 322, R 5, 2004 Rev Ed) confers on the court discretionary powers to order a stay of execution of a summary judgment until after the trial of a defendant’s counterclaim. In exercising its discretion, the court will have regard to the degree of connection between the claim and cross-claim together with any other relevant circumstances such as the merits of the counterclaim and the financial ability of the plaintiff to satisfy any judgment on the counterclaim (as to which see Singapore Civil Procedure 2003 (Sweet & Maxwell Asia, 2003) at p 155).

4 The requirement of a connection between the claim and cross-claim was reaffirmed by the Court of Appeal in Cheng Poh Construction Pte Ltd v First City Builders Pte Ltd [2003] 2 SLR 170 at [11] and [18] in these terms:

It is settled law that where claims and counterclaims arise out of the same transaction, and while the claims are admitted and the counterclaims are disputed, then so long as the counterclaims are plausible, the correct order to make would be that while judgment should be entered in respect of the claims, it should be stayed pending trial of the counterclaims: see Sheppards & Co v Wilkinson & Jarvis (1889) 6 TLR 13. But where a counterclaim does not arise from the same transaction, or is not connected therewith, different rules apply: eg, Anglian Building Products Ltd v W & C French (Construction) Ltd (1978) 16 BLR 6, and AB Contractor Ltd v Flaherty Brothers Ltd (1978) 16 BLR 10.

In short, special circumstances must be shown for there to be a stay of execution. The mere fact that a defendant has a bona fide counterclaim arising out of another contract with the plaintiff, unconnected with the contract which forms the subject matter of the action, will not of itself constitute a “special circumstance” justifying a stay of execution.

5 I begin with the question of whether the nature of Globell’s counterclaim was sufficiently connected with the plaintiff’s claim to allow a defence of equitable set-off. Having rejected for the reasons below the plaintiff’s contention that Globell was not the proper party to bring the counterclaim, I was of the view that the degree of closeness between the plaintiff’s claim and Globell’s counterclaim required for an equitable set-off was made out. The plaintiff’s claim was for the price of Silberline products. The purpose of the distribution agreement was to enable Globell to sell in the designated territories the Silberline products which it procured, ordered and purchased from the plaintiff. It would therefore be unjust to allow the plaintiffs’ claim for the price of Silberline products sold and delivered without taking into account Globell’s counterclaim.

6 This leads to the issue of whether there is a plausible counterclaim for a...

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3 cases
  • Australian and New Zealand Banking Group Ltd v Joseph Shihara Rukshan De Saram
    • Singapore
    • High Court (Singapore)
    • 27 Noviembre 2014
    ...Counterclaim was: (a) not closely connected to the Bank’s claims (see for eg, Silberline Asia Pacific Inc v Lim Yong Wah Allen and Others [2006] SGHC 27 (“Silberline Asia Pacific”) at [3]); and (b) the Counterclaim was ostensibly fanciful (ie, there was no arguable triable issues, see for e......
  • Barun Electronics Co Ltd v EZY Infotech Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 30 Julio 2020
    ...up or calculated, so that the court has material on which to make the proper order (Silberline Asia Pacific Inc v. Lim Yong Wah Allan [2006] S.G.H.C. 27). [emphasis added] Further, in the context of a summary judgment application, a party’s ability (or inability as the case may be) to prese......
  • Australian and New Zealand Banking Group Ltd v Joseph Shihara Rukshan De Saram
    • Singapore
    • High Court (Singapore)
    • 27 Noviembre 2014
    ...Counterclaim was: (a) not closely connected to the Bank’s claims (see for eg, Silberline Asia Pacific Inc v Lim Yong Wah Allen and Others [2006] SGHC 27 (“Silberline Asia Pacific”) at [3]); and (b) the Counterclaim was ostensibly fanciful (ie, there was no arguable triable issues, see for e......
2 books & journal articles
  • THE COURT‘S RESPONSE TO COUNTERCLAIMS IN PROCEEDINGS FOR SUMMARY JUDGMENT
    • Singapore
    • Singapore Academy of Law Journal No. 2011, December 2011
    • 1 Diciembre 2011
    ...Chemical Co (S) Pte Ltd v Szu Ming Trading Pte Ltd [2008] SGHC 13 at [32]. 42 See, eg, Silberline Asia Pacific Inc v Lim Yong Wah Allan [2006] SGHC 27. 43 [2003] 2 SLR(R) 170. In this case, the defendant‘s counterclaim in respect of previous building projects was not regarded as being suffi......
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2006, December 2006
    • 1 Diciembre 2006
    ...the plaintiff not be taken by surprise. Particularisation of the counterclaim 7.73 In Silberline Asia Pacific Inc v Lim Yong Wah Allan[2006] SGHC 27, it was held that a counterclaim for wrongful termination of a sole distribution agreement was a basis for staying the plaintiff”s judgment in......

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