Sonja Maingard v Kira Pecherska

• Jurisdiction: Singapore
• Judge: Tan May Tee
• Judgment Date: 02 August 2018
• Neutral Citation: [2018] SGDC 206
• Court: District Court (Singapore)
• Docket Number: District Court Suit No. 3133 of 2017, Registrar’s Appeal No. 24 of 2018, RAS No. 17 of 2018
• Year: 2018
• Published date: 01 November 2018
• Hearing Date: 25 June 2018,09 May 2018,12 June 2018
• Plaintiff Counsel: Plaintiff-in-Person
• Defendant Counsel: Mr K Rajendran with Mr R Subash (Relianze Law Corporation)
• Subject Matter: Civil procedure,Striking out,Res judicata,Abuse of process
• Citation: [2018] SGDC 206

District Judge Tan May Tee: Introduction

The Plaintiff in this action, Sonja Maingard, was the defendant as well as plaintiff by counterclaim in a previous suit in the District Court, namely DC Suit 3268 of 2015 (“DC 3268”) instituted by Kira Pecherska, the Defendant herein, who was the plaintiff in the original action and defendant by counterclaim in DC 3268. For convenience and in order to avoid confusion, I will in these Grounds, refer to the Plaintiff herein as “SM” and the Defendant as “KP”.

DC 3268 was fixed for trial but the parties settled with a consent Final Judgment being recorded by the trial judge. Subsequently, when KP’s solicitors sought payment of unpaid costs from SM, she failed to pay but instead made claims that led to the institution of the current suit. KP’s solicitors then applied in DC/SUM 136/2018 to strike out SM’s statement of claim in this suit under O 18 r 19 of the Rules of Court on the grounds that it discloses no reasonable cause of action, it is frivolous and/or vexatious, and/or is otherwise an abuse of the process of the Court. SM had in the meanwhile also filed an application for summary judgment on her claim in DC/SUM 4276/2017.

Both applications were heard and dismissed by a deputy registrar and appeals were filed by both parties. The appeals came on for hearing before me. After due consideration of the documents and the submissions, I agreed with KP’s solicitors that SM was attempting to relitigate her counterclaim in DC 3268 in breach of the res judicata principles. Accordingly, I allowed the appeal by KP for the claim to be struck out for abuse of process. As a consequence of the claim being struck out, I made no order on SM’s application for summary judgment. SM has filed an appeal to the High Court against the orders I made. My reasons for striking out her claim are explained in these Grounds.

SM was initially represented by solicitors in DC 3268 who had filed her Defence. She had chosen to act in person some time before the trial and had applied for and obtained leave of the Court to amend the Defence to add a substantial counterclaim. She is also unrepresented in this action.

Background facts

SM was the sole proprietor of a business dealing with fashion apparel called Foxtrot Fashion House. In 2014, she needed funds to make payment for goods that she had purchased and invited KP to invest in her business. On 16 December 2014, the parties signed an agreement called a “Temporary Share Agreement” which stipulated that KP would invest the sum of $80,000 for which she would be entitled to a 40% shareholding in a company to be incorporated from SM’s sole-proprietorship business to be named Foxtrot Asia Pte Ltd. Pursuant to the agreement, KP duly paid the sum of $80,000 which was used by SM for payment of goods and business expenses. KP had further expended a sum of $20,366.02 of her monies for the business at SM’s request.

As SM had no storage space for the goods, the parties had agreed to use KP’s residence for storage. SM was given the necessary access code into KP’s residence to retrieve the goods as and when required.

After some delays, the company was eventually incorporated on 19 August 2015. However, the entire shareholding of Foxtrot Asia Pte Ltd was registered in the name of SM contrary to the agreement between the parties which provided that KP was to have 40% share in the company.

On or around 2 September 2015, upon discovering that she held no shares in Foxtrot Asia Pte Ltd, KP treated the agreement as having been repudiated by SM. She changed the access code for entry to her residence thereby denying SM access as a consequence of which SM was unable to retrieve any of the goods thereafter.

In October 2015, KP commenced proceedings in DC 3268 against SM for the return of the $80,000 which she had paid for the shares on the basis of total failure of consideration and the $20,663.02 which was pleaded as a friendly loan to SM. KP’s total claim against SM was $100,663.02. SM made a counterclaim for possession of the goods retained by KP in the latter’s home, as well as consequential losses and damages in connection with KP’s detention of the goods.

The counterclaim in DC 3268

What can be discerned from the manner in which the counterclaim is pleaded is an assertion by SM of her rights over the goods which she referred to as the “Stock”. In particular, it was pleaded in SM’s counterclaim that: SM owned 4900 pieces of stock on or about the beginning of April 2015; SM needed storage for the Stock until such time that it was required for the Stock to be transferred to shops and points of sale; KP had offered storage facilities for the Stock; SM had placed the Stock in KP’s home on trust; KP never had any beneficial ownership over any part of the Stock; SM gave notification to KP for removal of the Stock on 1 September 2015 and removed some of the Stock on that day; SM returned on 2 September 2015 to remove the remainder of the Stock (“Remaining Stock”) over which KP had no rights or entitlement; KP refused SM access to retrieve the Remaining Stock; The Remaining Stock was under the control and/or power and/or possession of KP; SM was unable to sell the Remaining Stock. She had multiple sale opportunities for the Remaining Stock which she was unable to utilise, and suffered loss and damage; KP had caused loss and/or damage to the Stock and/or Remaining Stock while it was in her house; and KP had sold or traded in the Stock and/or Remaining Stock for profit without SM’s consent, some of which trades were done on KP’s online trading platform. KP had no right or entitlement to make the trades. SM had not received any payment or reimbursement for the trades carried out.

The remedies the SM prayed for in the Counterclaim included inter alia: a declaration that the Remaining Stock was owned by SM; a prayer that the Court direct KP to deliver the goods to SM at a venue of her choice, consequential losses and/or damages suffered from lost business opportunities and breach of commitments resulting from KP’s actions; loss and damages from missing stock; and loss and damages for trades carried out by KP using the stocks without her consent, including disgorgement of profits.

Final Judgment in DC 3268

DC 3268 was fixed for trial on 19 June 2017. On the day of trial, the parties negotiated and a consent Final Judgment was recorded before the trial judge which provided as follows: SM shall pay KP the sum of $80,000 within 6 months from 19 June 2017 or within such extended period as the parties may agree; KP shall within 7 days from 19 June 2017 release the goods which had been itemised at pages 225 to 230 in her affidavit dated 1 March 2017 and deliver them to SM’s residential address with the cost of delivery to be shared equally between both parties; SM’s counterclaim shall be withdrawn; and Each party shall bear her own costs. The Final Judgment was extracted as DC/JUD1430/2017 on 20 June 2017.

Events leading to the second suit

After the Final Judgment, arrangements were made to release the goods to SM on 22 June 2017. KP’s solicitors then sought to recover the outstanding costs and disbursements ordered in KP’s favour in the interlocutory proceedings in DC 3268 totalling $6,328.10. SM claimed that KP was pressurising her and requested that the costs be added to the sum of $80,000 which was agreed to be paid at a later date under the Final Judgment. SM further complained that KP had failed to return three items her, namely a ladder, a mirror and a railing which items were not in the inventory included in the consent Final Judgment. KP’s solicitors responded to state that there was no ladder, and the mirror and railing had been discarded a long time ago.

On 5 September 2017, SM sent a letter of demand to KP through the law firm of Ho Wong Law Practice, claiming a sum of $712,041.53 being alleged losses suffered as a result of KP’s conversion of her stocks. On 12 September 2017, KP’s solicitors responded to the letter of demand informing SM’s solicitors of the proceedings in the previous suit which had included SM’s counterclaim for conversion and enclosing a copy of the consent Judgment. In the same letter, KP’s solicitors had requested payment of the outstanding interlocutory costs of $6,328.10 in the previous suit to be paid within the next three days. There was no reply from SM’s solicitors.

On 9 October 2017, SM sent a further letter of demand to KP’s solicitors stating that she would be acting in person and claimed the sum of $212,743.88 for the conversion of her stocks during the two years that they were in KP’s possession. She offered in the same letter a purported settlement amount of $126,415.78 which was the sum demanded by her as her losses less the amounts of $80,000 and $6,328.10 that she was required to pay KP under DC 3268. On 27 October 2017, SM commenced the present action.

Statement of Claim in present suit

On examination of SM’s Statement of Claim in the present suit, it will be seen that paragraphs 1, 2 and 3 (reproduced below) refer essentially to the same allegations which were made in the Counterclaim in DC 3268, specifically at paragraphs 8, 10d and 18 therein. 1. In April 2015, the Defendant, a shareholder in my (the Plaintiff's) fashion business, agreed to offer temporary storage at no cost, at her residence, #05-04 The...