Vita Life Sciences Limited and Another v Arthur Andersen and Another
| Jurisdiction | Singapore |
| Judge | Chi Qiyuan Douglas AR |
| Judgment Date | 09 June 2008 |
| Neutral Citation | [2008] SGHC 85 |
| Court | High Court (Singapore) |
| Year | 2008 |
| Published date | 24 June 2008 |
| Plaintiff Counsel | Muthu Kumaran (Bernard & Rada Law Corporation) |
| Defendant Counsel | Rethnam Chandra Mohan and Ng Jin (Rajah & Tann LLP) |
| Subject Matter | Civil Procedure |
| Citation | [2008] SGHC 85 |
| 9 June 2008 |
Judgment reserved. |
Introduction
1 The present application comes at the end of a protracted dispute between the parties which began almost three years ago with the issuance of the plaintiffs’ writ of summons in June 2005. The dispute has been successfully resolved as the parties have managed to reach a settlement without the need to go to trial. Unfortunately, there remains some further disagreement between the parties on the issue of costs arising out of an Offer to Settle (“OTS”) which was made by the first defendant, and which was accepted by the plaintiffs. Before outlining the issues that arise for determination, I first proceed to lay out the background facts.
Background facts
2 The plaintiffs’ claim against the defendants was based on an alleged breach of contract and/or negligence on the part of the first defendant in connection with its audits of various financial statements of the second plaintiff and the latter’s parent company. The plaintiffs did not proceed with the action as against the second defendant, and so the first defendant, Messrs Arthur Andersen, was the sole defendant in these proceedings (for convenience, hereinafter referred to as “the defendant”). The defendant is the applicant in the present application, while the plaintiffs are the respondents.
3 At a pre-trial conference (“PTC”) on 19 October 2007, the parties took directions on, inter alia, the timelines for the filing and exchange of affidavits of evidence-in-chief (“AEICs”). The court also directed that the action be set down by 24 December 2007, and fixed trial dates for 21 January 2008 to 1 February 2008.
4 On 31 October 2007, the defendant served on the plaintiffs an OTS made pursuant to O 22A of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“the Rules”) in the following terms:
[The defendant] offer (sic) to settle the above proceedings on the following terms:
[The defendant] pay to [the plaintiffs] the sum of S$450,000 in full and final settlement of [the plaintiffs’] claim herein and costs, up to and including the date of the offer herein, on the appropriate basis to be taxed, if not agreed.
The OTS was dated 31 October 2007, and as we shall see later, was accepted by the plaintiffs on 10 January 2008. For convenience, I will refer to this OTS in the judgment as “the defendant’s OTS”.
5 In the meanwhile, the parties proceeded to exchange their AEICs. While it appeared that the plaintiffs had some difficulty in complying with the original timelines given by the court, the parties eventually exchanged their AEICs on 19 December 2007, and the taking of objections to the contents of the AEICs was completed by 2 January 2008. There was, however, some delay in the setting down for trial and although the set down date had already been extended to 8 January 2008, the matter still had not been set down by 9 January 2008. In any event, on 9 January 2008, the Registry of the Supreme Court (“the Registry”) wrote to the parties informing them to attend before the court for a PTC on 11 January 2008. I should also mention that it was also on 9 January 2008 that the plaintiffs served an OTS of their own (“the plaintiffs’ OTS”) on the defendant. However, since the plaintiffs’ OTS did not form the basis of the settlement between the parties, it is unnecessary for me to set out its terms in the judgment.
6 On 10 January 2008, the defendant served on the plaintiffs a notice of its intention to withdraw the defendant’s OTS pursuant to O 22A r 3 of the Rules. On the same day, however, within the notice period for the withdrawal of the defendant’s OTS, the plaintiffs accepted the defendant’s OTS. It bears mention that no question arose as to whether or not the defendant’s OTS was capable of being accepted by the plaintiffs on 10 January 2008; rightly so, given the requirement in O 22A r 3(2) of the Rules of providing at least one day’s prior notice of the intention to withdraw the offer. In other words, both parties were agreed that there was a valid acceptance of the defendant’s OTS on 10 January 2008. Accordingly, before the parties were due to attend before the court on 11 January 2008 for the PTC, they had reached an out-of-court settlement.
7 On 11 January 2008, the parties duly attended before the registrar having conduct of the PTC (“the PTC Registrar”). The parties’ solicitors informed the PTC Registrar that the parties had settled, and then went on to provide the court with the terms of the settlement, which were the terms set out in the defendant’s OTS. The PTC Registrar then recorded that “By consent, judgment [was] so entered”.
8 Through a series of correspondence that followed between the parties’ solicitors, a clear disagreement over the issue of costs and the applicability of O 22A r 9(2) of the Rules to the defendant’s OTS arose. I will refer to the relevant correspondence later in the judgment. For present purposes, it suffices to note that the defendant took the position that O 22A r 9(2) of the Rules applied such that it was entitled to costs from “the date 14 days after the date of the service of the offer assessed up to the date that the notice of acceptance was served”. Unsurprisingly, the plaintiffs took the opposite view: the issue of costs had already been provided for in the defendant’s OTS and accordingly, O 22A r 9(2) of the Rules had no application whatsoever.
9 In addition, the plaintiffs’ solicitors’ had also drawn up a draft Order of Court (“the Draft Order”) for the defendant’s solicitors’ endorsement. Yet again, there was a large dispute between the respective solicitors over the terms of the Draft Order to be approved. This was another issue, albeit clearly related to the issue of costs, which was being continuously hammered about by both sets of solicitors in the correspondence I have referred to in the paragraph above, and details of which I will provide in the relevant portion of my judgment. For now, it suffices to note that an Order of Court dated 11 January 2008 (which was in the same terms as the Draft Order) was extracted by the plaintiffs’ solicitors on 14 February 2008 (“the Extracted Order”) despite the lack of agreement on the part of the defendant’s solicitors.
10 On 18 February 2008, the defendant’s solicitors took out the present application which prayed for, inter alia, the following orders:
(a) the Extracted Order be set aside and/or revoked and/or expunged;
(b) directions be given, if necessary, for parties to see the PTC Registrar to settle the terms of the Extracted Order; and
(c) the plaintiffs pay the defendant costs of the proceedings from the date 14 days after the date of service of the defendant’s OTS (ie, 14 November 2007) to the date when the defendant’s OTS was accepted by the plaintiffs (ie, 10 January 2008).
Issues
11 There were two main issues that arose in the present application:
(a) Whether O 22A r 9(2) of the Rules applied to the defendant’s OTS (“the OTS issue”); and
(b) Whether the Extracted Order should be set aside and/or revoked and/or expunged (“the Extracted Order issue”).
12 Before dealing with these issues in seriatim, it will be helpful to detail the way in which I dealt with some preliminary issues that emerged at the hearing itself. First, a concern of mine was to ensure that the minute sheet of the PTC Registrar (“the Court minute sheet”) properly recorded and reflected the proceedings as they transpired during the PTC on 11 January 2008. In particular, I wanted to dispose of any issue as to whether what was recorded on the Court minute sheet was not what was informed to the PTC Registrar and/or intended by the parties at that relevant time. To my mind, if there were any slight doubt (held by either party) as to the accuracy of the Court minute sheet, the proper course would be for the parties to see the PTC Registrar to clarify those doubts. Ultimately, my concerns proved to be unfounded as the parties confirmed before me that the Court minute sheet properly recorded what was told to her by counsel during that PTC. This effectively disposed of the prayer in the defendant’s application for directions to be given for the parties to see the PTC Registrar to settle the terms of the Extracted Order. Since there was no doubt that the Court minute sheet was an accurate reflection of the proceedings before the court, there was no necessity for the parties to go back to the PTC Registrar to seek clarification.
13 Secondly, I wanted to find out whether the fact that the settlement was reached by means of an accepted OTS under the Rules was mentioned to the PTC Registrar. To this question, counsel could not give me a conclusive answer one way or the other: both counsel endeavoured to check their respective attendance notes for a record of the same but were unable to confirm either way. Be that as it may, the parties did however confirm that the information provided to the PTC Registrar was premised on the plaintiffs’ acceptance of the defendant’s OTS and not on some other agreement or fresh settlement entered into by the parties. I should state briefly why this was of some concern to me. In my view, if the parties had appeared before the PTC Registrar merely to record a consent judgment per se, even though the terms of that consent judgment might have been identical to that of an accepted OTS, that would have taken the matter beyond the realms of the OTS regime under O 22A of the Rules and the parties would have to stand and fall by the terms of the freely agreed consent judgment (save for the existence of any grounds upon which an agreement can be set aside: see below at [62])).
14 I should state that I am of the view that this remains one possible way of dealing with the matter before me, notwithstanding the inconclusive inquiries into whether or not an OTS was mentioned to the PTC Registrar. This is because I find it both reasonable and logical to hold that since the parties have decided to enter a “by...
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