Zhang Jinwei v Tradsurance Agency Pte Ltd and another

• Jurisdiction: Singapore
• Judge: Lewis Tan
• Judgment Date: 22 September 2022
• Neutral Citation: [2022] SGMC 58
• Court: Magistrates' Court (Singapore)
• Docket Number: Magistrate Court Suit No 9266 of 2021 (Summons No 3201 of 2022)
• Published date: 30 September 2022
• Year: 2022
• Hearing Date: 19 September 2022
• Plaintiff Counsel: Chelliah Lalita (Mathew Chew & Chelliah)
• Defendant Counsel: Boo Moh Cheh (Kurup & Boo)
• Subject Matter: Civil Procedure,Offer to settle,Calderbank offer,Whether plaintiff reasonable in not accepting pre-writ Calderbank offers,Damages,Interest,Whether plaintiff should be disallowed interest
• Citation: [2022] SGMC 58

Deputy Registrar Lewis Tan: Introduction

Calderbank offers, which owe their name to the case of Calderbank v Calderbank [1976] Fam 93 (CA), allow parties to exchange offers to settle a matter “without prejudice save as to costs”; if the eventual outcome of the matter turns out to be less favourable than the Calderbank offer, the Calderbank offer may be shown to the court and can be taken into consideration for the purposes of determining costs: Ong & Ong Pte Ltd v Fairview Developments Pte Ltd [2014] 2 SLR 1285 (“Ong & Ong”) at [35] and SBS Transit Ltd (formerly known as Singapore Bus Services Limited) v Koh Swee Ann [2004] 3 SLR(R) 365 (“SBS Transit”) at [21] and [24].

Such a process of making an offer to settle, with a potential implication on costs, was formalised by O 22A of the Rules of Court 2014 (“ROC 2014”), which was introduced to “spur the parties to bring litigation to an expeditious end without judgment and thus save costs and judicial time” (Singapore Airlines Ltd v Tan Shwu Leng [2001] 3 SLR(R) 439 at [37]).

Nonetheless, Calderbank offers remain in place, even if their use has been significantly reduced in the light of the regime in O 22A. A survey of cases demonstrates the varying uses of Calderbank offers. For example, in SBS Transit, a pre-writ Calderbank offer was followed up with a formal offer to settle made pursuant to O 22A after the respondent commenced proceedings against the appellant. Later, in NTUC Foodfare Co-operative Ltd v SIA Engineering Co Ltd and another [2018] 2 SLR 1043, the respondents served a formal O 22A offer to settle before trial and followed this up with a Calderbank offer after the trial but before the appeal of the action.

Their continued relevance is caused in part by the fact that while a Calderbank offer can be issued before litigation starts, an O 22A offer to settle (“OTS”) can only be made after court proceedings have begun (SBS Transit at [16]). Furthermore, the specificity and strict confines of the O 22A regime means that certain offers may fall “outside the ambit of the requirements in [O 22A] rr 9(1) and 9(3)” (CCM Industrial Pte Ltd v Uniquetech Pte Ltd [2009] 2 SLR(R) 20 (“CCM Industrial”) at [44], per Chan Sek Keong CJ).

Whether Calderbank offers will retain their utility in light of the introduction of offers of amicable resolution (O 5 rr 1 and 2 of Rules of Court 2021 (“ROC 2021”)) which can be made before the commencement of an action is something that remains to be seen. What is for certain however is that a reasonable offer, whether titled an offer of amicable resolution or a “without prejudice save as to costs” offer, can continue to have implications on the costs order to be made, and in the appropriate case, can lead to an adverse costs order against a successful party (see O 21 rr 2 and 4 of ROC 2021).

Hence, regardless of the applicable ROC regime, the message, as the result of this application will show, remains uniform (GTMS Construction Pte Ltd v Ser Kim Koi (Chan Sau Yan (formerly trading as Chan Sau Yan Associates) and another, third parties) [2021] SGHC 33 at [23]):

… In so far as [offers to settle] represent genuine attempts by the parties to settle, the court should give such offers due recognition when it comes to the issue of costs. This is in line with the policy of encouraging parties to settle, thereby saving judicial time and costs.

Facts

In this case, the accident occurred in February 2021, and parties began negotiations around August 2021, when the Plaintiff’s solicitors wrote to the Defendants’ solicitors seeking damages of $20,997.81, with the breakdown as follows:¹

	Head of claim	S$
(a)	Cost of repairs	18,858.81
(b)	Car wrap and spray painting	80.00
(c)	Rental	1,080.00
(d)	GIA report	29.00
(e)	Costs contribution (at this stage)	900.00
(f)	Incidentals	50.00
	Total	20,997.81

The Defendants responded by stating that they had a counterclaim against the Plaintiff for $1,915.00, this being their own cost of repairs, car rental and towing charges.²

Subsequently, on 3 September 2021, the Defendants made a global offer to settle the Plaintiff’s claim and their counterclaim by paying $9,991 to the Plaintiff and “costs and disbursements” which could “either be agreed between or respective law firms or be referred to the Registrar of the State Courts” (“the First Calderbank Offer”).³ This offer was rejected ten days later, with the Plaintiff indicating that he was “maintaining his full claim”.⁴

About one month later, on 12 October 2021, the Plaintiff gave ten clear days’ notice to the Defendants that he intended to issue a Writ of Summons in respect of his claim (“the 10 Days’ Notice”).⁵ The Defendants replied the next day, stating that the Calderbank Offer remained “open for acceptance” (“the Second Calderbank Offer”).⁶

The Plaintiff did not accept the Second Calderbank Offer, Instead, on 25 October 2021, he issued his Writ of Summons and Statement of Claim, in which he sought $20,018.81 in damages, as well as interest and costs.

The Defendants promptly answered with a formal O 22A OTS. The OTS was substantially similar to the two Calderbank Offer in that they offered to pay $9,991 in damages. However, rather than offering to pay costs and disbursements, the OTS set the issues of interest, costs and disbursements at large, to be determined by the Registrar of the State Courts.⁷

The OTS was not accepted. However, after parties attended three Court Dispute Resolution (“CDR”) sessions, the Plaintiff wrote to the Defendants on 25 February 2022 to accept the O 22A OTS that had been made about four months prior.⁸

The settlement was recorded by the learned CDR judge on 21 April 2022, but despite numerous attempts to resolve the issue of interest, costs and disbursements, parties remain at odds as to whether any of such sums are due, the quantum of such sums, and who bears the liability for such sums.

By this application, the Defendants seek an order stipulating that they are not liable to pay the Plaintiff any interest in respect of the damages since any delay in receiving the sum of $9,991 was caused by his belated acceptance of their numerous offers.⁹ In addition, they are seeking costs and disbursements on an indemnity basis from the Plaintiff.

Was the Calderbank offer superseded by the Offer to Settle?

As a preliminary issue, the Plaintiff submitted that the Second Calderbank Offer was superseded by the O 22A OTS. Presumably, this meant that the Second Calderbank Offer ought not to be taken into account in determining who should bear the costs and disbursements, as well as whether interest ought to be paid to the Plaintiff.

In support, the Plaintiff relied on the decision of Valerie Thean DJ (as she then was) (“Thean DJ”) in Teng Lien Yen v SBS Transit Ltd [2003] SGMC 10, where her Honour stated (at [9], citing Shi Fang v Koh Pee Huat [1996] 2 SLR 221 (“Shi Fang”)) that “[w]here successive offers are made, the first offer would be superseded by the second offer”.

In Shi Fang, the husband had made a “without prejudice” offer of $230,000 to his wife in settlement of all her claims, to which she did not respond. He then made a renewed offer of $150,000, this time on a Calderbank basis (ie, “without prejudice save as to costs”). Again, the wife did not respond to this latter offer, even though it was increased orally to $170,000. The wife subsequently obtained judgment against the husband for $250,000, which sum was upheld on appeal. In reversing the costs order made by the High Court judge, the Court of Appeal observed that the first “without prejudice” offer for $230,000 ought not to have been considered as it was not a Calderbank offer. Additionally, “it was superseded by the second offer [of $150,000], which was substantially below what was awarded” (at [55]).

Subsequently, in SBS Transit ([1] supra), the Court of Appeal explained that while an O 22A OTS can only be withdrawn by following the procedure in O 22A r 3 of ROC 2014, no such procedure existed for Calderbank offers. To determine whether a Calderbank offer remains capable of acceptance, “the normal contractual principles of offer and acceptance would apply. That would mean that the respondent’s rejection of the offer … was an effective termination of that offer so that it could not be accepted thereafter unless renewed” (SBS Transit ([1] supra) at [20]).

Here, the First Calderbank Offer was unequivocally rejected by the Plaintiff, who stated through his solicitors as follows: “Our client rejects your [Calderbank offer]. Our client is maintaining his full claim…”.¹⁰ However, after the Plaintiff gave the 10 Days’ Notice intimating his intention to commence proceedings, the Defendants’ counsel renewed the Calderbank Offer by informing the Plaintiff’s counsel that the offer remained “open for acceptance; if your client is minded to do so”. Alternatively, “if your client is minded to issue a Writ of Summons against our clients, … [y]ou can do so immediately and serve the Writ of Summons on us”.¹¹

Despite this Second Calderbank Offer, the Plaintiff elected to commence the action. It may be that this election represented a rejection of the Second Calderbank Offer, as in so doing the Plaintiff was effectively opting for one of two options presented by the Defendants. This appeared to be the assessment of all parties, as the Defendants proceeded to issue the O 22A OTS shortly after the writ was issued. Later, the Plaintiff accepted the O 22A OTS rather than the Second Calderbank Offer, suggesting that he did not think the Second Calderbank Offer remained open for acceptance. This was even though the Second Calderbank Offer, which provided that the Defendants would pay the Plaintiff costs and disbursements, was potentially more favourable than the OTS, which set the issue...