Woo Koon Chee v Scandinavian Boiler Service (Asia) Pte Ltd and others

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 24 September 2010
• Neutral Citation: [2010] SGCA 35
• Plaintiff Counsel: Raymond Lye Hoong Yip and Yeo Wen Si Cheryl-Ann (Citilegal LLC)
• Docket Number: Civil Appeal No 21 of 2010
• Date: 24 September 2010
• Hearing Date: 18 May 2010
• Subject Matter: Civil Procedure
• Published date: 05 October 2010
• Citation: [2010] SGCA 35
• Defendant Counsel: Sarbjit Singh Chopra (Lim & Lim),Adrian Tan Gim Hai and Aaron Kok Ther Chien (Drew & Napier LLC)
• Court: Court of Appeal (Singapore)
• Year: 2010

Chao Hick Tin JA (delivering the grounds of decision of the court):

This interlocutory appeal raised a procedural issue arising from a dispute concerning the completion of the sale and purchase of shares, owned by the Appellant in the 1st Respondent, to the Respondents.

Pursuant to certain legal proceedings (Suit No 53 of 2008) which we need not go into, Woo Bih Li J ordered on 27 April 2009, by consent of the parties (“the Consent Order”), that the “2nd [Respondent] and/or the 3rd [Respondent] and/or the 4th [Respondent] and/or their respective nominees purchase the [Appellant’s] shares in the 1st [Respondent] at [a] fair value” to be determined by an independent valuer, whose valuation report (“Valuation Report”) setting out the fair value of the Appellant’s shares in the 1st Respondent would be final and binding on all parties.¹

The valuer, Stone Forest Corporate Advisory Pte Ltd (“Valuer”) was appointed on 27 May 2009. The Consent Order prescribed that the completion of the sale and purchase of the Appellant’s shares was to take place within three weeks after the Valuer had furnished its Valuation Report to the parties. The Valuation Report was finally released on 8 December 2009. However, on 29 December 2009, three weeks after the release of the Valuation Report, the sale and purchase of the shares had still not taken place. This was despite the fact that the solicitors for the 2nd, 3rd, 4th, 5th, 6th, 8th, 9th, 10th and 11th Respondents (“Relevant Respondents”) had written to the Appellant’s solicitors on 11 December 2009 and 22 December 2009 offering to tender a cashier’s order as payment for the shares and requesting for completion of the sale and purchase.

On 30 December 2009, the Appellant’s newly appointed solicitors wrote to the Relevant Respondents’ solicitors requesting for more time to respond to the latter’s letter of 22 December 2009. The Relevant Respondents agreed to give the Appellant more time and a fresh request was sent by the Relevant Respondents’ solicitors to the Appellant’s new solicitors requiring completion of the sale and purchase of the shares by 5 January 2010. However, when 5 January 2010 arrived, the Appellant’s solicitors requested, once again, for more time. Accordingly, the sale and purchase did not take place. On 7 January 2010, the Relevant Respondents applied by way of Summons No 76 of 2010 (“Summons No 76”) for a direction that any Assistant Registrar and/or the Registrar of the Supreme Court be authorised to sign the share transfer forms on behalf of the Appellant so as to effect completion of the sale and purchase of the shares as directed under the Consent Order.

The decision below

Summons No 76 was heard by a Judicial Commissioner in the High Court (“the Judge”). In opposing the Summons, the Appellant ran three arguments before the Judge: The filing of Summons No 76 was the wrong procedure to enforce the Consent Order. The Relevant Respondents should have started the enforcement proceeding by way of a fresh originating summons or writ and not by way of a summons under the existing suit (Suit No 53 of 2008). The Appellant could not accept the valuation of the shares set out in the Valuation Report and was actively engaged with experts to commence legal action to challenge the Valuation Report. The Relevant Respondents had improperly sought to enforce the Consent Order pursuant to O 45 r 8 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“Rules of Court”), which provided for the enforcement of Mandatory Orders, injunctions and orders for the specific performance of contracts. That rule did not apply to the enforcement of consent orders.

The Judge made short shrift of these arguments. With respect to (a), he felt that the authority cited by the Appellant’s solicitors, Indian Overseas Bank v Motorcycle Industries (1973) Pte Ltd & Ors [1992] 3 SLR(R) 841 (“IOB v Motorcycle Industries”) ,stood for the uncontroversial principle that a consent order puts an end to proceedings as it supersedes the original cause of action altogether. No further steps could be taken in that action in pursuance of the original cause of action. What was sought in Summons No 76, however, was performance or enforcement of the Consent Order and not the original cause of action. Therefore, the Judge did not think that the principles enunciated in IOB v Motorcycle Industries precluded the Relevant Respondents from filing Summons No 76. This argument was, in his view, wholly unmeritorious.

In connection with (b), the Judge noted that there “(was) no obstacle to the [Appellant] challenging the [V]aluation [R]eport in a separate legal action”. And finally, in regard to (c), he was of the view that it could not be the case that a consent order could “only be enforced under O 45 r 8 of the [Rules of Court] by a further action and another court order”.

Accordingly, the Judge allowed the Relevant Respondents’ application in Summons No 76 and granted an order of court in the following terms: Any Assistant Registrar and/or Registrar of the Supreme Court may sign the share transfer forms to give effect to the completion of the sale and purchase of the Appellant’s shares in the 1st Respondent as provided for under the terms of the Consent Order; and The Appellant is to file a consent to entry of satisfaction within three days of completion of the sale and purchase of the Appellant’s shares in the 1st Respondent.

This appeal

In this appeal, we were primarily concerned with two questions: (a) whether the Relevant Respondents ought to have started a fresh action to enforce the Consent Order; and (b) whether the Relevant Respondents were entitled to relief under O 45 r 8 of the Rules of Court.

Whether the Relevant Respondents ought to have started a fresh action to enforce the Consent Order

In Singapore Court Practice 2009 (Jeffrey Pinsler SC Gen Ed, LexisNexis 2009) (“Singapore Court Practice 2009”), the author made the following commentary relating to consent judgments and orders at para 42/1/6:

42/1/6. Consent judgments and orders. The terms of a settlement agreement may be enforced by a separate action, assuming the agreement has the status of a legally binding contract. (See Green v Rozen [1955] 1 WLR 741; Deans Property v Land Estates Apartments [1994] 2 SLR 198; Tong Lee Hwa v Chin Ah Kwi [1971] 2 MLJ 75.) …

However, the advantage of embodying the terms of the settlement in a consent judgment or order is that it may be automatically enforced in the event of non-compliance (as in the case of any other judgment or order): A consent judgment or order is meant to be the formal result and expression of an agreement already arrived at between the parties to proceedings embodied in an order of the court. The fact of its being so expressed puts the parties in a different position from the position of those who have simply entered into an ordinary agreement. It is, of course, enforceable while it stands, and a party affected by it cannot, if he conceives he is entitled to relief from its operation, simply wait until it is sought to be enforced against him, and then raise by way of defence the matters in respect of which he desires to be relieved. He must, when once it has been completed, obey it, unless and until he can get it set aside in proceedings duly constituted for the purpose. [Wilding v Sanderson [1897] 2 Ch 534, at 543, per Byrne J]

[emphasis added]

On the above proposition of the law, which we endorse, it would follow that the Relevant Respondents were entitled to initiate execution proceedings, like Summons No 76, to enforce the Consent Order. There was no necessity for the Relevant Respondents to institute a fresh action to compel due compliance with the Consent Order.

As we saw it, there appeared to be some misunderstanding on the part of the solicitors for the Appellant as to what was decided in IOB v Motorcycle Industries, due perhaps, in part, to a certain statement made by the court. In that case, summary judgment was entered into against some of the respondents following a compromise agreement between them and the appellant bank. In accordance with the compromise agreement, the respondents would make an immediate payment to the appellant bank of the sum of $300,000, with the remaining outstanding amount by monthly instalments of $300,000. The appellant bank also agreed in the meantime not to execute or take bankruptcy proceedings on the judgment against the respondents. There was a breach of the compromise agreement. The appellant bank took out a fresh action to enforce the compromise agreement. This Court, in reliance on the following passage in Halsbury’s Laws of England Vol 37 (Butterworths, 4th Ed) (“Halsbury’s Laws of England”) at para 391:

… [w]here the parties settle or compromise pending proceedings, whether before, at or during the trial, the settlement or compromise constitutes a new and independent agreement between them made for good consideration. Its effects are (1) to put an end to the proceedings, for they are thereby spent and exhausted; (2) to preclude the parties from taking any further steps in the action, except where they have provided for liberty to apply to enforce the agreed terms; and (3) to supersede the original cause of action altogether … An agreement for a compromise may be enforced or set aside on the same grounds and in the same way as any other contract …

[emphasis added]

held that (at [21] in IOB v Motorcycle Industries):

[t]he result was to compromise the bank’s claim against the respondents. It is immaterial that a summary judgment was entered. In the event the respondents defaulted in the payments they agreed to make under the agreement concluded on 9 March 1978 the bank’s remedy would be to take action to enforce the agreement concluded on 9 March 1978 and not to execute the judgment which on our view of the law was rendered otiose by the agreement concluded on 9 March...