Uni Development Pte Ltd v Ranjit Singh s/o Mukhtar Singh and others

• Jurisdiction: Singapore
• Judge: Ang Cheng Hock JC
• Judgment Date: 31 October 2018
• Neutral Citation: [2018] SGHC 235
• Court: High Court (Singapore)
• Docket Number: Registrar’s Appeal from State Court No 22 of 2018
• Published date: 06 November 2018
• Year: 2018
• Hearing Date: 10 September 2018
• Plaintiff Counsel: Mr Willie Yeo and Mr Ronald Yeo (Yeo Marini & Partners)
• Defendant Counsel: The first, second and third respondents in person.
• Subject Matter: Credit and security,Hire-purchase,Remedies
• Citation: [2018] SGHC 235

Ang Cheng Hock JC: Introduction

This is an appeal against a decision by a District Judge, who had dismissed an appeal brought against the decision of a Deputy Registrar made in an assessment of damages hearing. What was immediately notable about the Deputy Registrar’s decision was that the plaintiff hire purchase company, which was having its damages assessed for amounts due to it in a typical claim arising from default of instalment payments under a hire purchase agreement, ended up being ordered to pay a sum of money to the defendant hirer, even though judgment on liability had been entered for the plaintiff on its claim by consent of the parties. The key question before me was whether the Deputy Registrar had misapprehended the scope of the assessment hearing and also the contractual arrangements between the parties, and thus erred in making the various orders that she did.

Facts The parties

Uni Development Pte Ltd (“the Appellant”) is a hire purchase company incorporated and carrying on business in Singapore. It has been a member of the Hire Purchase, Finance and Leasing Association of Singapore since 1998.

Ranjit Singh s/o Mukhtar Singh (“the 1st Respondent”) is the operations manager of Ranco Transport and Services, a sole proprietorship carrying on a transport business. His wife is the sole proprietor. The Appellant says that the 1st Respondent used to own the business himself, but that is denied by the 1st Respondent. He claims that the business has always been in his wife’s name and he simply worked for her. But, nothing really turns on this point.

Shriperkash Rai s/o Ramgobind Rai (“the 2nd Respondent”) is a close friend of the 1st Respondent. Jasveer s/o Jassa Singh (“the 3rd Respondent”) is the 1st Respondent’s brother-in-law.

Background to the dispute

The 1st Respondent wanted to buy a 49-seater new Isuzu air-conditioned bus and needed financing. The Appellant and 1st Respondent then entered into a hire purchase agreement dated 2 January 2001 (“the HP Agreement”) in respect of the bus which bore the registration number PZ515E. The interest rate was 5.25% per annum and the instalment payments were to be made monthly for six years. It was a term of the HP Agreement that, if the 1st Respondent defaults on his instalments, an interest charge on the overdue instalments at 18% per annum simple interest calculated on a daily basis would be levied. The 2nd and 3rd Respondents were guarantors for the 1st Respondent in relation to his obligations under the HP Agreement.

At the same time, the 1st Respondent had purchased two other buses which were also financed by the Appellant. He signed two other hire purchase agreements on similar terms as the HP Agreement.¹ There were no problems in relation to the 1st Respondent’s hire purchase instalment payments for these two other buses, which had the registration numbers PZ1100L and PZ642X.

As for bus PZ515E, the 1st Respondent fell into arrears not long after the bus was purchased. It appears that the Appellant exercised its right to terminate the HP Agreement and it repossessed the vehicle on 11 March 2003.² Then, on 20 May 2003, the Appellant commenced DC 2101/2003/W against the Respondents to recover the amounts owed under the HP Agreement.

The Appellant and the 1st Respondent then entered into a new agreement on 1 August 2003, which they titled as “Memorandum” (“the Memorandum”), to revive and vary the terms of the HP Agreement. The Appellant then discontinued DC 2101/2003/W on 15 August 2003.

The Memorandum states it “is supplemental to the [HP Agreement] and is to be read in conjunction with the [HP Agreement]”. It sets out a schedule which provides certain agreed amounts to be paid in the following manner:

Price & Payments
(a) Cash Price	$140,000.00
Add (b) COE	$ -
TOTAL	$140,000.00
DEDUCT
(c) Downpayment	$ -
(d) Total of (a) & (b)	$140,000.00
Less (c)
Add (e) Term Charges	$58,800
BALANCE OF HIRE	$198,800.00
PURCHASE PRICE
Mode of Payment
1st instalment of $2,422.00
(From August 2003)
2nd to 84th Instalment of $2,366.00
(From Sept 2003 until full payment)

The Appellant’s representative and the 1st Respondent appended their signatures on the schedule beneath these payment sums and dates. The main features to note about this schedule are that (i) the Appellant and the 1st Respondent had agreed to the amounts that were owed and the instalment payments to be made by the 1st Respondent; (ii) the instalment payments by the 1st Respondent were for a longer period of 84 months starting from August 2003; and (iii) there had been an increase in the interest rate from 5.25% per annum as stipulated in the HP Agreement to now 6% per annum, as shown by the term charges of $58,8000, which is derived by applying 6% per annum to the amount of $140,000 for a period of seven years.

At the same time that the Memorandum was signed, the 1st Respondent requested for a longer period of repayment for another bus, PZ1100L. The Appellant agreed and another memorandum was entered into in relation to the hire purchase agreement for bus number PZ1100L on the same date, 1 August 2003, on similar terms.³ The 1st Respondent fully paid the instalments due under that agreement for bus PZ1100L without any complaint.

As for the Memorandum, the 1st Respondent made the instalment payments to the Appellant for a number of years. According to the Appellant, the last payment that it received from the 1st Respondent was on 17 November 2011. A dispute then arose between the parties because parties could not agree whether there were any further amounts owed to the Appellant in terms of the principal amount owed and late interest charges.

The proceedings below

On 26 September 2014, the Appellant commenced MC Suit No. 18287/2014 claiming the amount of $41,400.07, or alternatively, damages, against the Respondents for amounts due under the Memorandum.

The 1st Respondent filed a Defence and Counterclaim. In gist, he pleaded that the HP Agreement was illegal and void as it was prepared and executed in a manner that was contrary to the Hire-Purchase Act (Cap 125, 2014 Rev Ed)(“Hire-Purchase Act). He also claimed that he had made a number of payments to the Appellant from 2002 to 2010 that had not been accounted for. He denied that there were any sums due to the Appellant. He counterclaimed for an account of all payments received by the Appellant and for a refund of any sums paid to the Appellant in excess of what he contractually owed.

Though represented by the same solicitors as the 1st Respondent, the 2nd and 3rd Respondent filed a separate Defence and Counterclaim. Amongst other things, they alleged that they were discharged from any liability to the Appellant because the Memorandum had been entered into without their knowledge and consent. They counterclaimed for declaration that their guarantees had been “lawfully rescinded” as a consequence thereof.

When the action came up for trial on 23 February 2017, counsel for the Appellant and the Respondents first saw the District Judge in chambers to try to settle the issues for determination by the court. In the course of this, the District Judge granted leave to the 1st Respondent to withdraw certain prayers for declarations he was seeking in his counterclaim, and also for the 2nd and 3rd Respondents to withdraw the whole of their counterclaim. Counsel for the Respondents then asked for the matter to be stood down for 20 minutes. After discussions, both counsel returned to see the District Judge in chambers to inform her that they had come to an agreement that the Respondents were admitting liability to the Appellant’s claim, without any order as to costs, and that the Appellant’s damages would be assessed. The District Judge then granted judgment by consent in the following terms (“the Consent Judgment”): 1. By CONSENT, interlocutory judgment to be entered against the Defendants with damages to be assessed. 2. There shall be no order as to costs with regard to the issue of liability. 3. Costs for the assessment of damages to be reserved. 4. On the issue of quantum, the Plaintiff is to file an affidavit by 16 March 2017 with supporting documents to give an account of the quantum of arrears and interest owing by the Defendant as of today, 23 February 2017. 5. The Defendants are to file affidavits in reply by 6 April 2017. 6. The assessment of damages to be heard before Deputy Registrar … on a date after 6 April 2017.”

Thereafter, matters did not progress directly to an assessment of damages hearing because of an unexpected turn of events. The Respondents alleged that they never instructed their counsel to consent to judgment. An application was taken out by the Respondents in the proceedings to set aside the Consent Judgment. This was successful in the first instance, but on appeal, the High Court decided that the Respondents should have commenced a separate action to set aside the Consent Judgement. The appeal against the decision to set aside the Consent Judgment was thus allowed.

The Respondents attempted again to set aside the Consent Judgment by commencing separate proceedings in DC/OSS 174/2017 against the Appellant and their former counsel. This was dismissed by the District Court on 8 January 2018. The Respondents did not appeal that decision.

The assessment of damages

With the issue of the validity of the Consent Judgment settled, the matter proceeded to a hearing for the assessment of damages. This took place on 5 April 2018 before a Deputy Registrar (“the DR”). At the start of the hearing, the DR stated that the proceedings before her was for the “taking of accounts”. This was repeated by the DR several times in the course of the hearing. The Appellant’s witness, Ms Cindy Sng Ee...