Toh Wee Ping Benjamin and another v Grande Corp Pte Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 14 May 2020
• Neutral Citation: [2020] SGCA 48
• Plaintiff Counsel: Goh Aik Leng Mark and Ng Boon Gan (VanillaLaw LLC)
• Docket Number: Civil Appeal No 138 of 2019
• Date: 14 May 2020
• Hearing Date: 21 February 2020
• Subject Matter: Striking out,Pleadings,Assessment,Damages,Civil Procedure
• Published date: 20 May 2020
• Defendant Counsel: Chan Wai Kit Darren Dominic and Daniel Ng (Characterist LLC)
• Court: Court of Appeal (Singapore)
• Citation: [2020] SGCA 48
• Year: 2020

Judith Prakash JA (delivering the grounds of decision of the court): Introduction

The appellants in this appeal were two of the defendants in a High Court suit (“Suit 331”) brought against them and several others by the respondent-plaintiff. Some years into the proceedings, the appellants’ defence in Suit 331 was struck out by the High Court judge below (“the Judge”) on the application of the respondent and interlocutory judgment for damages to be assessed was entered against the appellants. These damages were subsequently assessed in a further hearing before the same Judge.

The Judge found that the appellants jointly and severally owed the respondent certain sums described and claimed for in its statement of claim filed in Suit 331 (“the SOC”). These sums were compendiously referred to as “the Loans” and “the Sums Received” in the respondent’s pleadings and we will use the same terms here.

The appellants appealed against the orders made for payment of the Loans and the Sums Received. After considering the parties’ submissions, we allowed the appeal in part by setting aside the judgment for the Sums Received while maintaining the judgment for the Loans.

The resolution of the appeal involved a consideration of the effect of striking out a party’s defence and the application of the rule concerning averments in a statement of claim that are not denied. The question that the appellants raised was whether the striking out of their defence entailed admission to the entirety of the respondent’s SOC, including the damages claimed so as to prevent them from challenging the amounts pleaded.

The background The parties and their story

The first appellant is Mr Toh Wee Ping Benjamin (“Mr Toh”). Mr Toh is the sole director and shareholder of Cubix International Pte Ltd (“Cubix International”), the first defendant in Suit 331. It is a company in the business of art and graphic design services. Mr Toh is also the sole director and majority shareholder of Cubix Group Pte Ltd (“Cubix Group”), an investment holding company and the second defendant in Suit 331. He holds 95% of its capital. The second appellant is Ms Goh Bee Heong (“Ms Goh”). Ms Goh holds 5% of the issued shares in Cubix Group. We shall sometimes hereafter refer to Mr Toh and Ms Goh jointly as “the appellants”.

The respondent is Grande Corporation Pte Ltd (“Grande”), a Singapore-incorporated investment holding company. Its director and sole shareholder is Mr Nemamkurral Vijaykumar Krishna (“Mr Krishna”).

Discussions between Grande and Cubix Group took place between late December 2006 and mid-2007 on the possibility of doing business together. As a result, a company called Cubix and Kosmic Pte Ltd (“C&K”) was incorporated in March 2007 as a joint venture company to carry on the business of development, production and exploitation of film and other media. Its shareholders were Grande and Cubix Group, holding one share each. On incorporation, Mr Toh was appointed its sole director.

The terms of the joint venture were recorded in a joint venture agreement (“the JV Agreement”) entered into by Grande and Cubix Group on 18 July 2007. As part of the JV Agreement, Grande transferred to C&K on various dates sums totalling S$291,288 and US$458,000 as contributions to and/or loans for, the operating expenses of C&K. In the SOC filed in Suit 331, these sums were collectively called “the Loans”.

Under the JV Agreement, Grande and Cubix Group undertook, inter alia, not to engage in any non-competitive conduct vis-à-vis C&K. Grande subsequently claimed that the funding, business, clientele, projects and staff of C&K were wrongfully transferred to three companies incorporated by Mr Toh and Ms Goh in or about 2008 and that, by reason of this wrongdoing, it was entitled to the return of all moneys it had transferred to C&K. The alleged recipient companies can be collectively referred to as “the AXXIS Companies”.

The initiation and conduct of Suit 331

On 15 April 2013, Grande and Mr Krishna commenced Suit 331 (formally known as Suit No 331 of 2013) against a total of 12 defendants including Cubix International, Cubix Group, Mr Toh, Ms Goh, C&K and the AXXIS Companies. In the SOC filed at that time, Grande sought the return of: (a) the Loan Sums; and (b) a separate amount of US$900,000. Several causes of action were pleaded by Grande against the various defendants. These included breaches of fiduciary duties and breaches of the JV Agreement.

On 14 June 2013, Cubix International, Cubix Group, Mr Toh, Ms Goh and the AXXIS Companies jointly filed a defence. It suffices for present purposes to note that Cubix Group, C&K and the AXXIS Companies did not take further steps in Suit 331. Cubix International, Mr Toh and Ms Goh amended their defence twice, the second time being on 18 April 2016. The claim was subsequently discontinued as against Cubix International.

With leave of the court, the SOC was amended on 4 April 2016 to (a) remove from the proceedings (i) Mr Krishna as the second plaintiff, and (ii) four parties who had originally been included as the sixth, seventh, eighth and ninth defendants; and (b) to expunge the claim for US$900,000, replacing it with a claim for “Sums Received”. References to the SOC hereafter should be taken as references to that pleading in its amended form unless otherwise specifically indicated.

By the SOC, Grande sought various reliefs against the various defendants including reliefs against both the appellants on alternative bases which we paraphrase as follows: A declaration pursuant to s 340 of the Companies Act (Cap 50, 2006 Rev Ed) (“the Companies Act”) that each of the appellants was personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of C&K as the court directed, including the Loans, and an order for such sums to be paid over to Grande forthwith; Further, or alternatively, the Loans as set out previously, ie, S$291,288 and US$458,000; Further, or alternatively, a declaration that the appellants held, whether as dishonest accessories or otherwise, all profits and/or other benefits (including but not limited to the Sums Received) derived from and/or traceable to: the wrongful use or use of the Loans; and/or the transfer of the business, clientele and/or management staff and employees of C&K to the AXXIS Companies or other parties as trustee or constructive trustee for and to the benefit of Grande and that he/she was liable for the same to Grande, and an order for payment thereafter to Grande of such sums as may be determined by the court upon the taking of such an account and inquiry, or alternatively damages to be assessed; Further, or alternatively, in relation to misrepresentation, damages to be assessed; Further, or alternatively, damages.

As it turned out, as the proceedings continued, the appellants committed a string of breaches of discovery obligations and court orders made in Suit 331. Hence, on 12 May 2017, Grande filed Summons No 2275 of 2017 seeking to strike out the defence of the appellants and the AXXIS Companies and for judgment to be entered in its favour (“the Striking Out Application”). The Striking Out Application involved three categories of documents relating to the AXXIS Companies that were the subject of a specific discovery order. Specifically, these documents consisted of the bank account statements of the AXXIS Companies for the period from 2008 to 2009, their financial statements for the same period, and documents evidencing the costs, expenses and revenue of the AXXIS Companies in relation to their projects.

The Judge granted the application in respect of the appellants and struck out the joint defence as against them. As a consequence, interlocutory judgment against them for damages to be assessed was entered for the respondent. The Judge’s reasons are found in Grande Corp Pte Ltd v Cubix International Pte Ltd and others [2018] SGHC 13 (the “Striking Out Judgment”) issued on 19 January 2018.

In the Striking Out Judgment, the Judge gave two main reasons for striking out the defence of the appellants. Firstly, the Judge found that the appellants had committed intentional, contumelious and inexcusable breaches of their discovery obligations (at [108]–[113]). Secondly, the Judge stated that the conduct of the appellants gave him “no confidence that they would defend [Grande’s] claim in an honest and fair manner” and he struck out their defence on this basis as well (at [114]).

In the Striking Out Judgment the Judge highlighted the significant inconsistencies in the positions taken by, inter alia, the appellants in respect of the AXXIS documents as follows (at [59]–[64]): First, they had taken shifting positions regarding when, and by whom, the documents were destroyed. Second, they had taken shifting positions regarding whether some of the documents even existed to begin with. Third, they had taken inconsistent positions regarding whether they had any undisclosed documents remaining in their possession, custody or control. Fourth, the most significant shift in their case was that they initially gave the impression that Mr Toh and Ms Goh actually knew what became of the AXXIS documents, but much later admitted that this was not the case at all.

After the Striking Out Judgment was issued, Grande applied for the defences of Cubix Group and the AXXIS Companies to be struck out as well. This application was allowed on 16 May 2018. On 24 July 2018, the Judge granted interlocutory judgment for Grande against Cubix Group and the AXXIS Companies with damages to be assessed.

The assessment of damages

Neither of the appellants appealed against the Striking Out Judgment. They did, however, contest Grande’s claims at the assessment of damages hearing on 19 and 20 March 2019 before the Judge. We summarise briefly the arguments that were made to the Judge.

Counsel for Grande, Mr...