The Body Shop (Singapore) Pte Ltd v Winmax Investment Pte Ltd and Another (Obayashi Corporation and Others, Third Parties)

• Jurisdiction: Singapore
• Judge: Valerie Thean Pik Yuen
• Judgment Date: 26 March 2004
• Neutral Citation: [2004] SGDC 73
• Court: District Court (Singapore)
• Year: 2004
• Published date: 12 April 2004
• Plaintiff Counsel: Ms Pauline Tan (P Tan and Company)
• Defendant Counsel: Mr Tai Chean Ming (Chong Chia and Lim LLC)
• Subject Matter: Civil Procedure,Application for stay of proceedings,Whether the 4th party had taken a step in the proceedings
• Citation: [2004] SGDC 73

26 March 2004

District Judge Valerie Thean:

1. This was an appeal against a deputy registrar's dismissal of an application by the fifth party for a stay of the proceedings brought against him by the fourth party in this suit. The application for a stay was made under s 6 of the Arbitration Act, Cap 10. I dismissed the appeal from the deputy registrar's order, and the fifth party has appealed therefrom.

Brief facts

2. The plaintiffs were, at the material time, the occupiers of an office in Winsland House II. The defendants occupied an adjoining apartment block, Lanson Place. The plaintiffs' claim against the defendants in the present suit arises from an incident on 12 June 2000, when the swimming pool at Lanson Place overflowed and caused damage to the plaintiffs' office. The plaintiffs brought this present claim against the defendant in negligence or alternatively, under the rule in Rylands v Fletcher.

3. The third party were the defendants' main contractor in the construction of Lanson Place, and were responsible for the supply and installation of the swimming pool and swimming pool equipment. The defendants joined the third party, claiming an indemnity or contribution on the basis of breach of contract or alternatively, negligence, arising from the third party's construction, design and installation of the defendants' ball joint and lever arm, Building Automation System and 6-inch drainage pipe and access hole in the defendants' water balancing tank. The third party's defence was that the incident of 12 June 2000 was caused by the fracture of the ball joint and lever arm of the balancing tank, supplied by its subcontractor. The third party therefore joined its subcontractor as fourth party, alleging any damage suffered arose from the third party's construction and installation of the ball joint and lever arm in the defendants' water balancing tank. As the ball joint and lever arm in question was supplied by a subcontractor of the fourth party, the fourth party, in turn, proceeded to join its subcontractor as fifth party in the suit.

4. On 6 August 2003, the fourth party's solicitors wrote to the fifth party, notifying them of the fourth party's claim for contribution and indemnity. On 17 September 2003, the fifth party's solicitors reverted, denying liability. The fifth party notice was filed on 19 September 2003 and served on the fifth party on 24 September 2003. On 26 September, the fifth party filed their memorandum of appearance. On 7 October, the fourth party filed their summons for fifth party directions. This summons was heard on 23 October, and the following orders obtained by consent:

1. The Fourth Party to file and serve their Statement of Claim on the Fifth Party by 27 October 2003 who shall plead thereto by 10 November 2003;

2. The Fifth Party shall file and serve on the Fourth Party a List of Documents and Affidavit verifying such List by 20 November 2003;

3. The Fourth Party shall file and serve on the Fifth Party a List of Documents and Affidavit verifying such List by 20 November 2003;

4. The Fifth Party shall be at liberty to appear at the trial of this action and take such part as the Judge/Registrar shall direct and be bound by the result of the trial;

5. The questions of liability of the Fifth Party to indemnity the Fourth party or contribute to the Third Party's claim be tried at the trial of this action but subsequent thereto;

6. The cost of this application be costs in the cause of the Fifth Party proceedings.

The draft consent order was thereafter sent to and signed by the fifth party's solicitors and the order duly extracted.

5. On 28 October, the fourth party's Statement of Claim was served on the fifth party. On 30 October, a Court Dispute Resolution ('CDR') conference was held for the action, which was attended by the fourth and fifth party. This conference was adjourned to 2 December 2003.

6. On 4 November, the fifth party filed this application for a stay of proceedings pursuant to the Arbitration Act. It is not disputed that the contract between the fourth and fifth parties contain an agreement to arbitrate. The fourth party resisted the application on two grounds. First, that the fifth party has taken a step in proceedings and was no longer entitled to a stay under s 6 of the Arbitration Act. Alternatively, that the undesirable multiplicity of actions which a stay would occasion would be good reason for me to exercise my discretion against granting a stay.

Whether the fifth party has taken a step in the proceedings

7. As stated by Lord Denning MR in Eagle Star Insurance Co Ltd v Yuval Insurance Co Ltd [1978] LLR 357, a "step in proceedings" is a step which affirms the correctness of the proceedings or demonstrates a willingness or intention to defend the substance of the claim in court instead of arbitration.

8. Mr Tai submitted that the fifth party's acquiescence in the summons for directions was sufficient to qualify as a step in the proceedings. Several English cases were produced in support. In County Theatres and Hotels Ltd v Knowles [1902] 1 KB 480, the plaintiff took out a summons for directions after writ was served. The summons was in the usual form, and an order was made upon it that a statement of claim was to be delivered in 7 days, a statement of defence ten days thereafter, a reply if necessary, to be delivered 7 days after. Directions were also given for mutual discovery, and as to place and mode of trial. Prior to the delivery of his defence, the defendant took out a summons to stay proceedings under the Arbitration Act. This was dismissed at first instance and subsequently by the English Court of Appeal. Collins MR, giving the judgment of the court, explained that the master's order on the summons, with the acquiescence of both parties, was a step in the proceedings. The defendant might have objected to the making of the order on the ground of an agreement to arbitrate, but he did not do so.

9. County Theatres was followed in Richardson v Le Maitre [1903] 2 Ch 222, where the order made at the summons for directions did not include orders for discovery. There, the order was: "Usual order for pleadings. Trial by judge. Middlesex. Statement of claim fourteen days. Defence fourteen days thereafter." In Richardson, the defendant sought to draw a distinction with County Theatres on the ground that discovery had not yet been ordered. Swinfen-Eady J rejected the argument, stating:

I should be frittering away the decision of the Court of Appeal if I held that it applied only to orders exactly similar to the one before them. Their decision is based on wider grounds. Attending this general summons for directions without objection, and without asking for an adjournment, in order to make an application to stay the action, is taking a step in the proceedings within the meaning of s 4 of the Arbitration Act, 1889.

10. Ms Tan contended that prior to the Statement of Claim being filed, the fifth party was not in possession of all the material facts and circumstances to be able to make an election. When the fifth party was joined, the fifth party notice contained a general claim of contribution or indemnity, no statement of claim was served. Participation in the summons for directions could not be deemed a step in proceedings as statement of claim had not yet been served. She cited in support Ives & Barker v Willans [1894] 2 LR 478 where the...