The "King Darwin"

• Jurisdiction: Singapore
• Judge: Vincent Hoong JC
• Judgment Date: 30 July 2019
• Neutral Citation: [2019] SGHC 177
• Court: High Court (Singapore)
• Hearing Date: 08 July 2019,03 July 2019
• Docket Number: Admiralty in Rem No 126 of 2018 (Registrar’s Appeal No 145 of 2019)
• Plaintiff Counsel: Yap Ming Kwang Kelly and Keng Xin Wee, Shereen (Oon & Bazul LLP)
• Defendant Counsel: Yap Yin Soon and Dorcas Seah (Allen & Gledhill LLP)
• Subject Matter: Civil Procedure,Inherent powers,Striking out,Notice of Discontinuance,Claim for wrongful arrest outside an in rem action
• Published date: 02 August 2019

Vincent Hoong JC: Introduction

By Summons No 1453 of 2019, the Intervener applied to strike out the Plaintiff’s Notice of Discontinuance (“NOD”) of Admiralty in Rem No 126 of 2018 (“the Action”) on the ground that it is necessary to prevent injustice or an abuse of the process of the Court: O 92 r 4, Rules of Court (Cap 322, R5, 2014 Rev Ed) (“ROC”).

The Senior Assistant Registrar (“SAR”) granted the Intervener’s application. This appeal is concerned solely with whether the SAR was correct in striking out the NOD.

Having heard the parties’ submissions, I agree that this is an appropriate case for the court to exercise its inherent powers to strike out the NOD. Accordingly, I dismiss the Plaintiff’s appeal and uphold the SAR’s order to strike out the NOD. However, to strike a balance between the parties’ respective positions, I also impose terms (at [36]) in the striking out order.

Facts

The facts to the extent that they are material to the striking out application are as follows. The Plaintiff commenced the Action against the Defendant on 13 November 2018¹ for the sum of EUR 5,864.00 (“the Outstanding sum”), which the Plaintiff claimed was the sum remaining unpaid for services which it had rendered to the vessel, the “King Darwin”. The vessel is owned by the Defendant.²

On the same day, the Plaintiff arrested the vessel pursuant to a warrant of arrest.³ The vessel was subsequently released on 19 November 2018,⁴ after the Defendant had furnished a Letter of Undertaking providing security to the Plaintiff.⁵

On 21 January 2019, after the Intervener was granted leave to intervene in the Action in his capacity as the Insolvency Administrator of the Defendant,⁶ he filed Summons No 365 of 2019, seeking, among others, to set aside the warrant of arrest and damages for wrongful arrest of the vessel from the Plaintiff.⁷

On 21 March 2019, the Plaintiff served the NOD, which it had filed on 7 February 2019.⁸ On 22 March 2019, the Intervener applied to strike out the NOD.⁹ The SAR granted the application.

My decision Principles in applications to set aside NODs

Under O 21 r 2(1) of the ROC, a plaintiff may, without the leave of the court, discontinue his action, or withdraw any particular claim made by him therein at any time not later than 14 days after service of the defence on him by filing and serving a NOD on the defendant(s). While leave is not required, the plaintiff’s right to discontinue his action or withdraw his claim is subject to the inherent powers of the court, and the NOD may be set aside if the purported discontinuance amounts to injustice or an abuse of process: Singapore Court Practice 2017 vol I (Jeffrey Pinsler gen ed) (LexisNexis, 2017) at para 21/2/3.

In an application to set aside a plaintiff’s NOD, a helpful consideration is whether the court would have granted unconditional leave to serve the NOD had leave been required: Castanho v Brown & Root (UK) Ltd and another [1981] AC 557(“Castanho”) at 572.

If such unconditional leave would not have been granted, it may be appropriate for the court to exercise its inherent powers to set aside the NOD. However, not every case is deserving of the exercise of the court’s inherent powers. It should only be exercised in special circumstances; the essential touchstone being that of “need”: Roberto Building Material Pte Ltd and others v Oversea-Chinese Banking Corp Ltd and another [2003] 2 SLR(R) 353 at [16]. In Wee Soon Kim Anthony v Law Society of Singapore [2001] 2 SLR(R) 821, Chao Hick Tin JA (as he then was), who delivered the judgment of the Court of Appeal, observed at [27] and [30]: 27 It seems to us clear that by its very nature, how an inherent jurisdiction, whether as set out in O 92 r 4 or under common law, should be exercised should not be circumscribed by rigid criteria or tests. In each instance the court must exercise it judiciously. … this jurisdiction may be invoked when it is just and equitable to do so and in particular to ensure the observance of the due process of law, to prevent improper vexation or oppression and to do justice between the parties. Without intending to be exhaustive, we think an essential touchstone is really that of “need”. …

…

30 The question might well be asked, what prejudice would the intervention cause to the complainant/applicant. But we do not think that that is the correct approach upon which to invoke the court’s inherent jurisdiction. It may well be that the question of prejudice is relevant to determine whether intervention should be allowed in the circumstances of a case. But that is not to say that once no prejudice is shown, the court should invoke that jurisdiction. There must nevertheless be reasonably strong or compelling reasons showing why that jurisdiction should be invoked.

[emphasis added]

Examples of when there would be a need to strike out a NOD include instances where: a plaintiff sought to discontinue the English proceedings after benefiting from two interim payments and an admission of liability on the defendant’s part, in the hope of obtaining a greater scale of damages before the Texan courts: Castanho; a plaintiff who had been ordered by the English court to terminate its Sierra Leone action sought to discontinue the English proceedings, in an attempt to continue with the Sierra Leone suit: Fakih Brothers v A P Moller (Copenhagen) Ltd and others [1994] 1 Lloyd’s Rep 103; and a plaintiff sought to discontinue an action after representing to the defendant that it would not do so. The result of the discontinuance was that the defendant’s counterclaim would have been time-barred: Ernst & Young (a firm) v Butte Mining Plc [1996] 1 WLR 1605.

Alternatively, where a defendant would be deprived of some advantage which he has gained in litigation by the discontinuance of the action, the court may, as an alternative to setting aside the NOD, allow the discontinuance with terms to preserve such advantages: see Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 (“Covell Matthews”) at 879. Ultimately, the appropriate order has to be guided by the facts of each case. As the court observed in UMCI Ltd v Tokio Marine & Fire Insurance Co (Singapore) Pte Ltd and others [2006] 4 SLR(R) 95 at [92], “in looking at the question of necessity in the context of the court’s inherent jurisdiction, one must take a sensible approach that has regard to all the circumstances of the case”. It is therefore to the facts that I now turn.

Claim for wrongful arrest outside of in rem proceedings

The Intervener submits that by discontinuing the Action, the Plaintiff would deprive the Intervener of his right to pursue his claim for wrongful arrest, which must be pursued in the context of the arresting party’s in rem action. In The “Xin Chang Shu” [2016] 1 SLR 1096 (“Xin Chang Shu”) at [24], Steven Chong J (as he then was) (“Chong J”) set out four methods for bringing a claim for wrongful arrest:

Based on the above discussion, damages for wrongful arrest can be pursued in at least three ways. [1] Typically and most commonly, it is brought in conjunction with an interlocutory application to strike out the writ and as a consequence of the successful striking out, the warrant of arrest would fall away as well … [2] Next, there are instances where the shipowner does not seek to strike out the in rem writ because the claim is brought within the [High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed)]. However, due to non-disclosure of material facts which led to the issuance of the warrant of arrest, the shipowner applies only to set aside the warrant of arrest and seeks damages for wrongful arrest … [3] The third mode which is less common is for the shipowner to provide security and defend the merits of the claim at the trial (as was done in [Fal Energy Company Limited v Owners of the Ship or Vessel “Kiku Pacific” [1998] SGHC 370] and to seek damages for wrongful arrest as a counterclaim following the dismissal of the claim … [4] In fact, [The “Trade Resolve” [1999] 2 SLR(R) 107] suggests that there could perhaps be a fourth way to pursue a claim for damages for wrongful arrest at the interlocutory stage without first applying to strike out the writ or even set aside the warrant of arrest. … [emphasis in original]

The common thread of the four methods, according to the Intervener, is that a claim for wrongful arrest has to be made in the context of the arresting party’s in rem action. On this basis, the Intervener submits that he would be prejudiced if the Action was discontinued as he would not be able to pursue his claim for wrongful arrest “via the proper procedural route” (ie, within the Action).¹⁰

However, a review of the authorities shows that the discontinuance of the Action (an in rem action) will not prohibit the Intervener from pursuing his claim for wrongful arrest.

As a starting point, the four methods in Xin Chang Shu which Chong J set out must be read in its proper context. In Xin Chang Shu, the assistant registrar (“AR”) had set aside the in rem writ but had declined to set aside the warrant of arrest as the AR found that there was no material non-disclosure by the plaintiff. Accordingly, damages for wrongful arrest were not awarded. The defendant appealed against, inter alia, the AR’s decision in not awarding damages for wrongful arrest. Before dealing with the merits of the defendant’s claim for damages for wrongful arrest, Chong J found it necessary to examine the issue of “whether damages for wrongful arrest can be awarded if the warrant of arrest was not first set aside” (Xin Chang Shu at [19]).

In seeking to resolve that issue, Chong J considered the methods in which damages for wrongful arrest may be pursued. The methods led Chong J to conclude that “the setting aside of a warrant of arrest is not a prerequisite to pursuing a claim for damages for wrongful arrest” (Xin Chang Shu at [25]),...