Wellmix Organics (International) Pte Ltd v Lau Yu Man

• Jurisdiction: Singapore
• Judge: Andrew Phang Boon Leong J
• Judgment Date: 26 January 2006
• Neutral Citation: [2006] SGHC 14
• Docket Number: Suit No 642 of 2001 (Registrar's
• Date: 26 January 2006
• Year: 2006
• Published date: 27 January 2006
• Plaintiff Counsel: Melvin Lum Kwong Hoe (Rajah and Tann)
• Citation: [2006] SGHC 14
• Defendant Counsel: Michael Por Hock Sing, Anand Kumar and Siva Krishnasamy (Tan Lee and Partners)
• Court: High Court (Singapore)
• Subject Matter: Mistake,Test for determining whether order is unless order or consent unless order,Jurisdiction,Whether parties bound by agreement,Judgments and orders,Mutual or unilateral mistake,Whether clear evidence of agreement between parties,Contract,Civil Procedure,Whether agreement giving rise to consent unless order existing between parties,Whether party's conduct so extreme that consent order should deprive it of rights in litigation,Objective approach in ascertaining parties' intentions,Whether clear terms of agreement between parties,Relevant principles,Court's discretion to interpret and enforce unless orders,Order 92 r 4 Rules of Court (Cap 322, R 5, 2004 Rev Ed),Nature of order,Inherent,Parties at cross-purposes,Unless order

26 January 2006

Andrew Phang Boon Leong J:

Introduction – unless orders and consent unless orders

1 The issue in this case is a simple one. The plaintiff alleged that the defendant was in breach of a consent unless order, whereas the defendant denied the very existence of such an order in the first instance – at least in the manner the plaintiff had framed it. The assistant registrar found in favour of the plaintiff , and hence refused to set aside the interlocutory judgment entered in favour of the plaintiff for breach of the unless order, with damages to be assessed. The defendant appealed. I allowed the defendant’s appeal. The plaintiff has appealed against my decision. I now give the detailed grounds for my decision.

2 The general law relating to unless (in contrast to consent unless) orders is clear. Such orders are issued by the court only when this is considered to be really necessary. To this end, they are draconian in nature and effect. Because this is so, courts will enforce such orders only if the party breaches the order both intentionally and contumeliously or contumaciously, although the Singapore Court of Appeal in Syed Mohamed Abdul Muthaliff v Arjan Bhisham Chotrani [1999] 1 SLR 750 (“the Syed Mohamed case”) also pointed (at [13]) to an apparent requirement to the effect that “the failure to obey was due to extraneous circumstances”. Tan Lee Meng J, who delivered the judgment of the court, further observed thus (at [15]):

Whether or not there has been prejudice to the other party is also a factor to be taken into account. The nature of the relief sought by the party in default and whether or not the penalty imposed is proportionate to the default in question are also relevant. In short, all the circumstances of the case must be taken into account. [emphasis added]

3 In so far as the criterion of “extraneous circumstances” is concerned, however, this may not be limited only to circumstances beyond the defaulting party’s control, at least where exceptional circumstances can be demonstrated (see Singapore Court Practice 2005 (Jeffrey Pinsler gen ed) (LexisNexis, 2005) at para 3/4/3; see also RG Carter (West Norfolk) Ltd v Ham Gray Associates Ltd (1994) 42 ConLR 68). What is clear, as embodied in the quotation above, is that all the circumstances of the case must be considered by the court concerned.

4 The principles set out briefly above reflect the important task of balancing the need to ensure compliance with the rules of civil procedure on the one hand and the need to ensure that a party is deprived of its cause of action only when its lack of compliance is so extreme as to justify such a drastic consequence.

5 Nevertheless, some modification to these principles appears to be required where the parties themselves enter into an agreement that if the unless order issued by the court is not complied with, the party in breach must, without more, suffer the drastic and draconian consequences of such a breach. Such unless orders are termed “consent unless orders”.

6 However, consent unless orders are a rare species. Indeed, in the Singapore context at least, there has, to the best of my knowledge, been only one such reported decision – that of the Singapore High Court in Wiltopps (Asia) Ltd v Drew & Napier [2000] 3 SLR 244 (“the Wiltopps case”).

7 The relative dearth of cases relating to consent unless orders is not surprising. It is hard to envisage a party consenting to such an order in order to “purchase” more time for, say, the filing and serving of an affidavit. After all, it is almost invariably the court which has charge of proceedings and which will therefore make an unless order in the event that one party in whose favour such an order is made can demonstrate to its satisfaction that there would otherwise be an abuse of process.

8 Given the drastic consequences that will ensue from the breach of a consent unless order, it is imperative that the terms of the agreement in question be clear and unambiguous.

9 As, if not more, importantly, the inquiry into whether or not there was indeed a consent unless order must be ascertained on an objective basis. This is consistent with the time-honoured approach towards the interpretation of contracts and is emphasised – time and again – in the case law (see, for example, the cases cited at [17] below) and is of the first importance in so far as the facts and outcome of the present proceedings are concerned. Indeed, as we shall see, it is precisely because counsel for the plaintiff had, with respect, omitted to apply this very basic principle that he arrived at the erroneous view that a consent unless order had been entered into between him and counsel for the defendant in the present proceedings.

10 Even assuming that the parties did prima facie enter into a consent unless order, I will also consider whether or not any contractual doctrine nevertheless operated to vitiate that agreement. As we shall see, the principal doctrine in this regard is that pertaining to the general doctrine of mistake.

11 I also consider a broader basis that, as we shall see, also supports the decision I have arrived at in these proceedings.

Did the parties enter into a consent unless order and, if so, was it vitiated?

The imperative of objectivity

12 In order to ascertain which party is correct, an examination of what precisely transpired between the parties is imperative. Before proceeding to analyse the salient facts and circumstances, a general (and important) point of methodology which has a significant impact on this case ought to be considered.

13 Counsel for the plaintiff had, at the initial hearing in these proceedings, relied heavily on the learned assistant registrar’s own interpretation of the order he (the assistant registrar) had earlier made and which the plaintiff had (as we have seen) argued (and which the assistant registrar accepted) was a consent unless order. I must confess that this had seemed to me a persuasive approach at first blush because one would have thought that the assistant registrar would have known best the type of order he had made. However, on further reflection, it was clear that such an approach was flawed.

14 The general (albeit crucial) starting-point is this: One has to adopt an objective approach towards ascertaining the parties’ intentions at the initial hearing before the assistant registrar and, indeed, before he made the order concerned. In this regard, close attention had to be paid not only to the parties’ own actions in the context of the relevant surrounding circumstances but also to the language and terms of the actual order made by the assistant registrar himself. Looked at in this light, it is clear that the assistant registrar’s own subjective interpretation of the order he had made earlier on, whilst not totally irrelevant, was clearly not decisive by any means. Let me elaborate.

15 In the first instance, there had been an interval of time between the making of the order and the assistant registrar’s interpretation of it subsequently, which interpretation constituted the factual pith and marrow of the present appeal. It is entirely possible that he might not have remembered what he had done. Human memories are fallible and recollections of events do fade with time. Indeed, given the intense hustle and bustle of everyday legal life, the lapse of a few days – or even a few hours, in some instances – might suffice to have this effect. This is precisely why an objective approach is not only desirable, but imperative.

16 More fundamentally, on that subsequent occasion, the assistant registrar would himself have been interpreting precisely what I had now to interpret – bearing in mind that the present proceedings are, in a sense, a rehearing of the matter. Indeed, he could not ignore the fact that his interpretation had to be consistent – to reiterate a very important point – not only with parties’ own actions in the context of the relevant surrounding circumstances but also with his own minutes as well as the actual terms and language of the actual order he had made. In other words, even his own subjective understanding of the parties’ intentions had to be subject to the objective facts and circumstances concerned. In this regard, he would, with respect, have been in no better a position than I was in so far as this crucial issue (of interpretation) was concerned.

17 Even more importantly, and taking the point in the preceding paragraph one logical step further, the assistant registrar might, at the material point in time, himself have misunderstood the parties’ intentions and, hence, might have recorded their intentions wrongly (hence, the importance of his own minutes, as alluded to in the preceding paragraph). If so, then his confirmation of what he thought he had done would still be erroneous, simply because he would be subjectively confirming something that he had erroneously recorded. In this respect, the learned assistant registrar’s minutes as well as the actual language and terms of the order made would also give us valuable clues as to the parties’ actual intentions. And this is also why I have taken pains to emphasise – more than once – the importance of the parties’ own objective actions in the context of the surrounding circumstances. What is crucial, taking the matter in the round, is what the objective evidence tells us. That is why it is now firmly established law and practice in the common law of contract that whether or not a valid agreement has been arrived at by the parties concerned (here, as between the plaintiff and the defendant) must be ascertained on an objective basis. The authorities, even in the local context alone, are legion (see, for example, the Singapore Court of Appeal decisions of Tribune Investment Trust Inc v Soosan Trading Co Ltd [2000] 3 SLR 405 at [40]–[41]; Projection Pte Ltd v The Tai Ping Insurance Co Ltd [2001] 2 SLR 399 at [15]; The “Rainbow Spring” [2003] 3...