The “Xin Chang Shu”

• Jurisdiction: Singapore
• Judge: Steven Chong J
• Judgment Date: 18 May 2016
• Neutral Citation: [2016] SGHC 93
• Year: 2016
• Date: 18 May 2016
• Published date: 20 May 2016
• Hearing Date: 01 April 2016
• Plaintiff Counsel: Lawrence Teh and Khoo Eu Shen (Rodyk & Davidson LLP)
• Citation: [2016] SGHC 93
• Defendant Counsel: Toh Kian Sing, SC, Koh See Bin and Jonathan Tan (Rajah & Tann Singapore LLP)
• Court: High Court (Singapore)
• Docket Number: Admiralty in Rem No 239 of 2014 (Summon No 1038 of 2016)

Steven Chong J:Introduction

Disgruntled litigants pondering over an appeal to the Court of Appeal against a decision made on an interlocutory application have long been plagued by the question of whether leave of court is necessary to do so. Tests have been developed by the courts to address this issue, and recent legislative amendments have been made to clarify this vexing area of civil procedure. Nevertheless, the question continues to come before the courts (as I previously noted in Sinwa SS (HK) Co Ltd v Nordic International Ltd and another[2015] 2 SLR 54 at [4]). This may be inevitable given the vagaries of litigation, and the unfeasibility of fashioning a set of rules to anticipate all possible scenarios. Yet the issue of whether leave is required to lodge an appeal on interlocutory matters is pivotal for at least three reasons. First, and obviously, it determines the legal rights of the party who wishes to appeal. Second, adopting a wrong position may expose the lawyer to allegations of professional negligence if the client is prejudiced by a failure to seek leave as required. Finally, any uncertainty over whether leave is in fact required is likely to result in unproductive litigation over the issue and consequent delays, which is hardly conducive to the expedient resolution of disputes. So the question must be susceptible to a clear and readily ascertainable answer.

In the context of admiralty practice, the direction of the courts is especially necessary as the Report of the Law Reform Committee to Review and Update the Supreme Court of Judicature Act and the Subordinate Courts Act (31 July 2009) (“the Report”) and the Singapore Parliamentary Debates on the new statutory framework governing rights of appeal to the Court of Appeal which came into force on 15 November 2010¹ (“the 2010 amendments”) did not specifically address interlocutory applications peculiar to this area of litigation, particularly applications relating to the arrest of a ship. That being said, the Court of Appeal in The Nasco Gem[2014] 2 SLR 63 aptly observed at [17] that in respect of admiralty actions, “the court must carry out the usual exercise of statutory interpretation and decide the question on the basis of first principles”, and provided some guidance in this regard. Notwithstanding this guidance, it appears that some degree of uncertainty continues to persist. This is perhaps the reason for this current application by the plaintiff seeking, inter alia, a declaration that it does not require leave to appeal against the order which I made on 4 December 2015 in Registrar’s Appeal No 226 of 2015 (“RA 226/2015”) for it to pay the defendant damages, to be assessed, for the wrongful arrest of The Xin Chang Shu (“the Vessel”) (“the Wrongful Arrest order”).

Background

Given my full judgment in The Xin Chang Shu[2016] 1 SLR 1096 (“Judgment for RA 226/2015”), there is no need for me to restate the facts of the substantial dispute between the parties in detail. In summary, the plaintiff commenced the present proceedings against the defendant shipowner claiming US$1,768,000 for the supply of bunkers to the Vessel. Although the bunkers were supplied under a contract between the plaintiff and the now insolvent OW Bunker Far East (Singapore) Pte Ltd (“OW Singapore”) (“the Contract”), the plaintiff’s case was that OW Singapore was the defendant’s agent and had entered into the Contract on the defendant’s behalf. The Vessel was subsequently arrested by the plaintiff on 10 December 2014. It was released three days later, on 12 December 2014, after the defendant furnished security by way of payment into court in the sum of US$2.6m.²

Registrar’s appeals

The parties then brought the following applications: (a) Summons No 6364 of 2014 (“SUM 6364/2014”) by the defendant to strike out the writ, set aside the warrant of arrest, and for damages for wrongful arrest; and (b) Summons No 6218 of 2014 (“SUM 6218/2014”) by the plaintiff for a stay of proceedings in favour of arbitration under ss 6 and 7 of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“the IAA”).³ These applications led to the registrar’s appeals which I heard together on 23 September 2015:⁴Registrar’s Appeal No 224 of 2015 (“RA 224/2015”) by the plaintiff against the decision of the assistant registrar (“the AR”) striking out its writ;Registrar’s Appeal No 225 of 2015 (“RA 225/2015”) by the plaintiff against the AR’s dismissal of its stay application; andRA 226/2015 by the defendant against the AR’s decision in not awarding damages for wrongful arrest, and in not setting aside the warrant of arrest.

After the hearing on 23 September 2015, I dismissed the plaintiff’s appeals in RA 224/2015 and RA 225/2015 while I reserved judgment in relation to RA 226/2015.⁵ After considering the matter, I delivered my judgment for RA 226/2015 on 4 December 2015 in which I made two orders in favour of the defendant. First, I ordered the plaintiff to pay the defendant damages to be assessed for the wrongful arrest of the Vessel from 10 to 12 December 2014 (ie, the Wrongful Arrest order). In essence, these damages were awarded because: ⁶the arrest had been pursued on a false and/or factually and legally misconceived premise, as the plaintiff must have known, based on its correspondence with the defendant prior to the arrest, that it neither had a factual nor legal basis to assert that OW Singapore had acted as the defendant’s agent in respect of the supply of the bunkers; andthere has been non-disclosure of material facts by the plaintiff at the ex parte stage where the warrant of arrest was sought.

Second, I set aside the plaintiff’s warrant of arrest. Although damages for wrongful arrest could be awarded even if the warrant of arrest was not set aside, a warrant of arrest could not exist without an issuance of a valid in rem writ. Hence, the setting aside of the warrant of arrest was consequent on the AR’s order, which I upheld in RA 224/2015, striking out the in rem writ.⁷

Parties’ subsequent applications

On 4 January 2016, the plaintiff filed its notice of appeal (“the NOA”) in CA/CA No 2 of 2016 (“CA/CA 2/2016”) against the Wrongful Arrest order in RA 226/2015 on the premise that no leave was required to do so. In response, the defendant applied, vide Summons No 7 of 2016 filed on 18 January 2016 (“CA/SUM 7/2016”), to set aside the NOA on the basis that the Wrongful Arrest order is an interlocutory order, for the purposes of para (e) of the Fifth Schedule to the Supreme Court of Judicature Act (Cap 332, 2007 Rev Ed) (“the SCJA”), for which leave to appeal is required.

Further, on 4 January 2016, the plaintiff commenced CA/OS No 1 of 2016 (“CA/OS 1/2016”) seeking an extension of time to file a notice of appeal against the order striking out its writ in RA 224/2015, as well as the order dismissing its stay application in RA 225/2015. As noted above, these orders were made some three months ago on 23 September 2015. It is common ground that no leave is required to appeal against the striking out order in RA 224/2015. But by filing the present application, the plaintiff has acknowledged that it requires leave of court to appeal against the order in RA 225/2015 pursuant to para (d) of the Fifth Schedule to the SCJA.⁸ Therefore, in respect of RA 225/2015, the plaintiff faces three hurdles – it needs to obtain first, an extension of time to apply for leave to appeal; second, the leave of this court to appeal; and finally an extension of time to file the notice of appeal.

The Court of Appeal then issued its judgment in The Chem Orchid and other appeals and another matter[2016] 2 SLR 50 (“The Chem Orchid”) on 20 January 2016. Therein, the court suggested that in an appropriate case, where there is uncertainty over whether leave to appeal is required, the proper approach is for the appellant to seek a declaration from the Judge that it does not need leave to appeal (at [57]). I should mention that it is implicit in the suggestion by the Court of Appeal that any application to seek clarification from the Judge should be made in good time. Certainly, the application should be made within the seven day deadline stipulated under O 56 r 3(1) of the Rules of Court (Cap 332, R 5, 2014 Rev Ed) (“ROC”) for the appellant to apply for leave to appeal, if required. The same application should also include a fall back prayer seeking leave to appeal, so as to avoid a situation where the appellant finds itself with insufficient time to apply for leave if the court finds that such leave is required. Such an application should only be made if there is genuine uncertainty. This guidance should not be taken as a licence for litigants to rush to court for such rulings as a matter of course. After all, the duty remains on the lawyers to advise the client, based on the governing principles, whether leave of court is required.

Here, at the time when the NOA was filed, the plaintiff took the view that no leave was required. The present application was, however, prompted by the defendant’s application in CA/SUM 7/2016 to set aside the NOA and even then, it was only filed on 2 March 2016, well after the stipulated time. The plaintiff now seeks, inter alia, the following prayers:A declaration that the plaintiff does not require leave of court to appeal against the Wrongful Arrest order (“Prayer 1”).Alternatively, if such leave is necessary, for the plaintiff to be granted an extension of time to apply for the said leave, and for the said leave to be granted (“Prayer 2”).For the plaintiff to be granted an extension of time to apply for leave to bring an appeal against the order dismissing its application for a stay of proceedings in RA 225/2015, and for the said leave to be granted (“Prayer 3”).

I dismissed Prayer 3 summarily following the hearing on 1 April 2016 as I found the substantial delay in applying for leave to appeal against the...