Stansfield Business International Pte Ltd (trading as Stansfield School of Business) v Vithya Sri Sumathis

• Jurisdiction: Singapore
• Judgment Date: 25 November 1998
• Date: 25 November 1998
• Docket Number: Small Claims Tribunal Appeal No 3
• Court: High Court (Singapore)

Stansfield Business International Pte Ltd (trading as Stansfield School of Business)

Plaintiff

and

Vithya Sri Sumathis

Defendant

[1998] SGHC 423

Chao Hick Tin J

Small Claims Tribunal Appeal No 3 of 1998

High Court

Civil Procedure—Appeals—Notice of appeal—Discretion of court in granting extension of time to file notice of appeal—Whether court should exercise discretion to extend time—Contract—Remedies—Whether action for agreed sum or enforcement of penalty clause

The respondent, Vithya Sri Sumathis, enrolled as a student in the appellant Stansfield Business International Pte Ltd. She signed an application form on enrolment which contained, inter alia, a contractual term requiring her to pay the full fees of $2,502.90 should she decide not to complete the course for the academic year. At the time when she left the course, the balance fee of $1,502.90 still remained outstanding. The school claimed for such balance at the Small Claims Tribunal. The referee held the term to be a penalty clause and refused the school’s claim. The school appealed. It argued that it was not suing for damages but a sum which the student had contracted to pay. For the appeal, the student’s counsel raised a preliminary objection: that as the notice of appeal was served out of time, there was no proper appeal.

Held, allowing the appeal if it was proper:

(1) This was a claim for the contract sum. There was no question of any breach of contract or any penalty. The respondent knew that a place was allocated to her following her enrolment and the appellant fulfilled its part of the bargain by providing the facilities and teaching staff to conduct the course. The respondent’s attention was specifically drawn to the term and she had a choice whether to enrol or not to: at [18].

(2) While the notice of appeal was filed in time, the notice was served out of time by some seven days. This effectively meant that there was no appeal. An application for an extension of time to serve had to be viewed on the same basis as an application for extension of time to file a notice of appeal. On the facts, the failure to serve the notice in time was due to: (a) the solicitor’s failure to instruct his clerk to serve it immediately after filing; and (b) the clerk’s failure in taking his time to serve. Either ground would not be sufficient to warrant the court exercising its discretion to grant an extension of time in the appellant’s favour, despite the fact that there were merits in the appeal: at [26] and [33].

Alder v Moore [1961] 2 QB 57 (folld)

Cheah Teong Tat v Ho Gee Seng [1974] 1 MLJ 31 (folld)

Chin Hua Sawmill Co Sdn Bhd v Tuan Yusoff bin Tuan Mohamed [1974] 1 MLJ 58 (folld)

Coles and Ravenshear, In the matter of an Arbitration between [1907] 1 KB 1 (folld)

Dunlop Pneumatic Tyre Company, Limited v New Garage and Motor Company, Limited [1915] AC 79 (folld)

Hau Khee Wee v Chua Kian Tong [1985-1986] SLR (R) 1075; [1986] SLR 484 (folld)

Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433; [1988] 1 All ER 348 (refd)

Pearson Judith Rosemary v Chen Chien Wen Edwin [1991] 2 SLR (R) 260; [1991] SLR 212 (refd)

Ratnam v Cumarasamy [1965] 1 MLJ 228, [1965] 1 WLR 8 (refd)

Tan Chai Heng v Yeo Seng Choon [1979-1980] SLR (R) 658; [1980-1981] SLR 381 (folld)

Tokai Maru, The [1998] 2 SLR (R) 646; [1998] 3 SLR 105 (refd)

Vettath v Vettath [1991] 2 SLR (R) 685; [1992] 1 SLR 1 (folld)

White and Carter (Councils) Ltd v McGregor [1962] AC 413 (refd)

Willson v Love [1896] 1 QB 626 (refd)

Small Claims Tribunals Rules (Cap 308, R 1, 1998 Rev Ed) rr 21 (5), 22

Yeo Soon Keong (Yeo Erunal & Partners) for the appellant

Manimaran Arumugam (Mani & Partners) for the respondent.

Judgment reserved.

Chao Hick Tin J

1 This is an appeal against a decision of the learned referee of the Small Claims Tribunal who refused the appellant’s claim in contract for a sum of $1,502.90 against the respondent. At the hearing of the appeal, counsel for the respondent raised a preliminary objection that there is no proper appeal before the High Court. I shall, however, deal first with the merits and then the preliminary objection.

2 The facts of the case are straightforward and are largely not in dispute. The appellant is a private school (“the School?) providing teaching to enable students to acquire various qualifications, diplomas as well as degrees, from overseas universities and institutions. On 27 March 1997 the respondent enrolled herself as a student with the School with a view to acquiring the Diploma in Economics (External) of the University of London. She signed an application form on enrolment where the terms of the contract were set out.

3 The provision of the contract which is germane to the present claim is cl 2 and it reads:

Enrolment for the course, together with payment of the required deposit or first instalment of fees creates a binding agreement to follow the course and pay the full fees, even if a student subsequently decides not to complete the course for the academic year. Further, no refund can be made as a space has been committed to the student for the duration of the programme, and the school will not entertain any request for refund.

The attention of the respondent was drawn to this clause as she signed specifically against that clause. It is not the respondent’s case that she was misled or did not read that clause.

4 The fees to be paid by the respondent for the course as found by the referee was the sum of $2,502.90. She paid $1,000 upon enrolment. She attended the course in the month of April 1998 but ceased to attend from May 1998. She informed the assistant director of the School, who advised her to write in formally. She did accordingly. At the time she left the course the balance fee of $1,502.90 still remained outstanding. Thus this claim by the School for the balance of the fee before the Small Claims Tribunal.

5 The referee held Condition 2 to be unconscionable, particularly in a case where the student had not attended any lessons yet, or had attended only a few lessons, at the time of the withdrawal. She queried if a student’s withdrawal resulted in any loss to the School, though she recognised there could be loss of profit. She asked: “Can the court refuse to enforce the clause given its unconscionable effect?? She felt the answer should be in the affirmative provided the clause was a penalty clause. She held it to be a penalty clause because she “was not convinced that the sum to be paid represented a genuine pre-estimate of the loss to the [School] in the event that the [respondent] breached the contract by withdrawing from the course?. Thus she refused to...