Toh Wee Ping Benjamin and another v Grande Corp Pte Ltd [2020] SGCA 48: Judge of Appeal Judith Prakash (Photo credits: The Straits Times)

CASE SUMMARY

The courts have on numerous occasions stressed the importance of pleadings as they shape the contours, the battle-lines, of any civil dispute. This point was recently thrown into sharp relief in Toh Wee Ping Benjamin and another v Grande Corp Pte Ltd [2020] SGCA 48 in rather unusual circumstances. 

The appellants were the defendants in a suit brought by the respondent. In the Statement of Claim (“the SOC”), the respondent pleaded myriad causes of action against the appellants, including fraudulent misrepresentation, piercing of the corporate veil and liability as constructive trustee. As to the quantum claimed, the respondent pleaded 2 discrete heads of claim. The first, labelled “Loans”, comprised the sums of S$291,288 and US$458,000. The second, headed “Sums Received”, consisted of the sums of “US$270,000 and/or US$600,000 – US$700,000”. Notably, the respondent pleaded for damages to be assessed in the alternative.

The appellants filed their defences to the SOC. As the matter progressed, the appellants committed a string of breaches of discovery orders. This prompted the respondent to apply to strike out the appellants’ defences. The application was allowed as a result of which interlocutory

judgment was entered against the appellants with damages to be assessed. The matter proceeded to the assessment stage before the High Court judge (“the Judge”). 

THE HIGH COURT’S DECISION

An issue arose as to the the consequence of the defences having been struck out. The respondent’s position was that this meant that the appellants must be taken to have admitted all the matters pleaded in the SOC, including the sums claimed as pleaded. The appellants, whilst accepting that the striking out meant that they could not challenge the factual assertions in the SOC, asserted that they were not precluded from challenging the quantum of the sums claimed.

The Judge awarded the respondent the Loans in the sums claimed. As for the claim for “Sums Received”, the Judge awarded the respondent the sums of US$270,000 and US$600,000, the latter being the lower end of the sum pleaded. The appellants appealed to the Court of Appeal (“the CA”). 

THE CA’S DECISION

The appellants renewed their argument that the striking out of their defences did not mean that they had admitted to the quantum claimed. The respondent still bore the burden of proving that a given loss was the result of the appellants’ wrongful act. Judith Prakash JA, delivering the judgment, framed the issue thus (highlighting added):

“29     ……what was the effect of the appellants’ defence having been struck out? Specifically, were the appellants deemed to have acceded to the entirety of the SOC, including the quantum of loss payable? It is important to note in this regard that the appellants did not challenge the findings that the Judge had made as to certain causes of action having been made out. Their challenge, rather, was whether the amounts awarded could be legally linked to the causes of action.”

To answer the question, Prakash JA examined the relevant provisions in the Rules of Court (“RC”) starting with O 24 r 16 (1). That rule confers the power on the court to strike out a defence for breach of discovery obligations and for “judgment [to be] entered accordingly”.  That was the provision under which the appellants’ defence was struck out. The question for the court’s consideration was the meaning of the italicized words.

Prakash JA then examined O 18, in particular, O 18 r 13 (3), and O 19 and concluded that the following principles apply where a defence has been struck out:  

  • The defendant is to be treated as if no defence has been filed and thus, O 19 RC, which deals with a default of defence, applies. This means that where the claim is for a liquidated amount, final judgment will be entered for the sum claimed (see O 19 r 2). Where the claim is for an unliquidated amount, interlocutory judgment will be entered with damages to be assessed (O 19 r 3) and so on as provided under the other limbs of O 19.
  • Only allegations of fact made in the statement of claim are admitted. 
  • Averments of law, or points of law, are not admitted as conclusions of law are the province of the courts. 
  • As to averments that engage both issues of fact and law (such as a claim for loss of profits), the court must be satisfied on an examination of the statement of claim alone that the facts pleaded therein are sufficient to sustain the pleaded cause of action or claim. 
  • Where the claim is for an unliquidated sum, unless specifically admitted, any allegation that a party has suffered damage and any allegation as to the amount of damage is deemed to be traversed. Thus, it is still incumbent on the plaintiff to prove facts to show that damage has been suffered.

Given that the respondent had pleaded for damages to be assessed in the alternative to the specific sums pleaded under Loans and Sums Received, the CA ruled that the Judge was correct in referring those claims for assessment. More importantly, based on the principles enunciated above, the appellants cannot be regarded as having admitted the amounts claimed on account of their defence having been struck out. The respondent still had to prove their damages. 

Applying those principles, the CA upheld the Judge’s decision to award the sums claimed under “Loans” as they were clearly the result of the pleaded fraudulent misrepresentation claim. 

The CA however overturned the Judge’s decision on the Sums Received claim. In so doing, the CA first examined the relevant pleading on this claim which read:

“19C.   Further or alternatively, as a result of the matters set out in paragraphs 19A and 19B above, [the appellants] are liable to account to Grande for any and all profits and/or other benefits derived from or traceable to:- (i) the wrongful use or use of the Loans; and/or (ii) the transfer of the business, clientele and/or management staff and employees of C&K, and such profits and/or other benefits which include but are not limited to the sums of US$270,000 received by the AXXIS Companies, [Mr Toh and/or Ms Goh] in the year of 2009 evidenced by an email dated 8 May 2010 from [Mr Toh] to the CAD’s Damian Low and/or US$600,000 – US$700,000 received by the AXXIS Companies, [Mr Toh and/or Ms Goh] evidenced by an email dated 7 May 2010 from Joshua Pang to the CAD’s Damian Low (collectively, the “Sums Received”). Further or alternatively, [the appellants] have been unjustly enriched at the expense of Grande, and are liable to account to Grande for the same.”

The CA noted that in essence, the respondent was asserting that as a result of the appellants’ breaches of fiduciary duties, the latter were liable to account for all profits they made. This was a conclusion of legal consequence, namely the remedial consequences of a purported breach of fiduciary duties, and not an averment of facts. Thus, the respondent had to prove that it was entitled to the sums claimed. On examining the SOC, the CA ruled that there was no factual basis for supporting this conclusion providing 2 reasons: 

  • First, the pleading was vague and embarrassing both as to the source of the funds and the uncertain amount (a range of US$600,000 – US$700,000). In fact, the respondent’s counsel admitted that the source of the funds was not pleaded. The CA held that this was fatal to its claim.  
  • Second, it appeared that the claim for the Loans and Sums Received were in fact pleaded in the alternative, a point which the respondent’s counsel confirmed at the hearing.

CONCLUDING REMARKS

As can be seen, in the final analysis, it was the lack of clarity in its pleadings that caused the respondent’s claim for the Sums Received to be dismissed. In concluding its judgment, the CA issued this reminder: 

“80     In closing, we emphasise that pleadings form the foundation upon which the evidence and arguments in a civil dispute are built. As we noted in PT Prima International Development v Kempinski Hotels SA and other appeals [2012] 4 SLR 98 at [35], pleadings fulfil two essential functions. First, they serve to inform each party of the case of the opposing party which would have to be met before and at the trial. Second, pleadings apprise the court of the salient factual and legal issues at play. In a rather unusual case such as the present where the defence is struck out, the reliability of that foundation is thrown into sharp relief and plaintiffs will stand or fall by how clearly and adequately they have pleaded the essential facts.”

To read the full judgment, click here.