In Grounds of Decision released on 1 October 2020, the Singapore High Court in Lee Bee Eng (formerly trading as AFCO East Development) v Cheng William [2020] SGHC 207 accepted arguments by LIMN Law Corporation on pertinent points of civil procedure.

Our Director John Lim, together with Legal Associates Alvin Sia and Ng Kai Ling, successfully argued the Plaintiff’s case.

This update seeks to examine the decision of the Honourable Justice Lee Seiu Kin, which arose out of Registrar’s Appeals.

 

Brief Background Facts

The Plaintiff is a director of a construction company, AFCO East Development Pte Ltd (“AFCO”). It was the original Plaintiff to the Suit.

The Defendant was an individual.

In 2006, the Plaintiff registered a sole proprietorship trading under the name and style of AFCO East Development.

In 2012, the Defendant engaged the Plaintiff to replace a prior contractor to construct a terrace house at 210 Yio Chu Kang Road pursuant to the Plaintiff’s quotation dated 23 April 2012.

Subsequently in 2014, AFCO was incorporated and the sole proprietorship was terminated. Disputes arose over the project with the Defendant. The Defendant only paid $322,000 out of the original contract sum of $460,000 under the original scope of work, in full satisfaction under the first three invoices but only in partial settlement of the fourth invoice.

AFCO commenced a Suit against the Defendant in 2017 for the balance payment under the fourth and fifth invoices plus an additional $193,280 for variation works.

The Defendant argued that AFCO had no standing to bring the Suit because the contract was entered with the Plaintiff and not with AFCO. The Defendant applied to strike out AFCO’s claims and sought security for costs. In response, AFCO applied to add the Plaintiff, a sole proprietor at the material time, as a plaintiff to the Suit alongside AFCO.

At first instance, the Assistant Registrar agreed that the Plaintiff sole proprietor should be added to the Suit, and ordered accordingly. The Defendant appealed against the Assistant Registrar’s decision.

The High Court Decision

The High Court considered there were primarily two issues to be decided in the Registrar’s Appeals, namely, (a) whether the Assistant Registrar made any procedural errors in substituting AFCO for the Plaintiff in the Suit, and (b) whether the Plaintiff’s claims were time-barred:

• Substitution of AFCO for the Plaintiff
  • The High Court held that the relevant provision in the Rules of Court, O. 15, r. 6, allowed it to order a substitution of AFCO for the Plaintiff. It highlighted that the power of joinder was supported by the provision’s core principle, which was to save rather than to destroy the action. The High Court dismissed the Defendant’s argument that there could not be a joinder because the Assistant Registrar had, as a matter of sequence of events, first ordered the striking out of AFCO as a party to the Suit before ordering the substitution of AFCO for the Plaintiff. The High Court agreed that the Assistant Registrar correctly exercised his discretion to substitute AFCO for the Plaintiff because the plaintiff’s pleaded case was not plainly unsustainable even at the preliminary stage.
• Plaintiff’s claims were not time-barred
  • The High Court examined the evidence and agreed with the Plaintiff that the claims were not time-barred. It found that the Plaintiff’s application for substitution of AFCO (for the Plaintiff) was made on 20 September 2018 and this date was not more than six years from the date on which the Plaintiff’s cause of action accrued. Pertinently, the High Court found that the causes of action for both the progress payments in respect of the fourth and fifth invoices and the variation claims were well within the limitation period. The assertion that the claims were time-barred was unsustainable.

Our Comments

The High Court’s Grounds of Decision explaining the common intent of both O. 15 r 4 and O. 15 r 6, is instructive. It explains that both provisions ultimately seek to ensure that all necessary parties are brought before the Court such that all issues can be determined by the Court without the expense of multiple actions.

Pertinently, the Grounds of Decision are instructive in clarifying that the Court’s power of joinder did not depend on whether striking out of AFCO was ordered before or after the party’s addition. Adopting the Defendant’s argument would have led to an absurd result, in that the Defendant would have had no cause of complaint if the Assistant Registrar had simply added the Plaintiff before striking out AFCO as a party. The High Court stressed that the availability of the power of joinder should abide by the core principle underlying O. 15 r 4 and O. 15 r 6 – to save the action rather than to destroy.

This decision has great significance to future cases. It makes clear that the courts will not allow a defendant’s attempts to frustrate the action on the basis of a mere misjoinder or nonjoinder or through an overly technical reading of the Rules of Court, which regulate and prescribe the procedure and practice to be followed in civil proceedings.