LITIGATING FOR VINDICATION REQUIRES SPECIAL CIRCUMSTANCES
In TMT Asia Limited v BHP Billiton Marketing AG (Singapore Branch) and Anor [2019] SGCA 60 (“TMT v BHPM”), the Singapore Court of Appeal did not allow an action to continue when an offer to settle would have given the plaintiff all the compensatory reliefs it sought, as there was no practical benefit to be gained.
Brief facts. The plaintiff TMT Asia Limited (“TMT”) had sued the defendants BMT Billiton Marketing AG (Singapore Branch) and BHP Billiton Marketing Asia Pte Ltd (collectively “BHPM”) for losses of US$81,500 incurred on forward freight agreements due to alleged manipulation of freight prices by BHPM ([5], [12], [13] TMT v BHPM).
1st striking out application. Before an assistant registrar, BHPM managed to strike out the claim on the basis that the forward freight agreements were not futures contracts under the Securities and Futures Act. However, this was overturned on appeal to a judge, allowing the appeal on the basis that the questions of law raised matters of public importance ([7] TMT v BHPM).
2nd striking out application. BHPM subsequently registered an English judgment in its favour against TMT for US$115m, and BHPM then made an offer to settle to TMT, essentially to set-off TMT’s claim against the sum owed by TMT under the English judgment. TMT rejected the offer, and BHPM applied to strike out the claim on account of the offer to settle. An Assistant Registrar declined to strike out as there were matters of public importance involved ([7], [29] TMT v BHPM).
3rd striking out application. The Securities and Futures Act was subsequently amended, and BHPM again applied to strike out TMT’s claim on account of the offer to settle. The matter came before the High Court Judge, who decided as a preliminary issue under O 14 r 12 and/or O 33 r 2 of the Rules of Court that continuing the action was an abuse of process, and the claim was struck out ([7] TMT v BHPM).
The appeal. TMT thus appealed to the Court of Appeal against the High Court Judge’s decision.
High Court’s decision. The High Court held that the 2nd striking out application did not preclude the 3rd striking out application, as the Assistant Registrar’s decision was not final and conclusive on the preliminary issue ([9] TMT v BHPM).
This was because the preliminary issue before the High Court was one under O 14 r 12 and/or O 33 r 2 of the Rules of Court, whereas the Assistant Registrar’s decision in the 2nd striking out application was under O 18 r 19 of the Rules of Court ([9] TMT v BHPM): as such, the Assistant Registrar’s decision was not that “… there was no abuse of process but rather that the point was arguable and did not merit a striking out”. Hence, it remained open for the High Court to determine the abuse of process issue under O 14 r 12 and/or O 33 r 2 of the Rules of Court.
The High Court then held that allowing TMT’s claim to proceed would be an abuse of process as there was no useful purpose in TMT continuing its action in light of the offer to settle, under which TMT would receive all reliefs it was seeking ([11] TMT v BHPM).
The High Court also rejected all of TMT’s reasons for refusing to accept the offer ([14] TMT v BHPM):
· The judge rejected TMT’s contention that it was entitled to a finding of liability, as that was not a relief sought by TMT.
· The judge also rejected TMT’s non-acceptance of the offer on the basis that it was subject to contract, as TMT could have asked BHPM to remove that requirement.
· TMT had also argued that the offer had expired, but BHPM had subsequently stated that it remained open for acceptance.
Court of Appeal decision. The Court of Appeal disagreed that the Assistant Registrar’s decision on the 2nd striking out application was not final and conclusive. This is because “there is no difference in the threshold applicable for a finding of abuse of process under O 18 r 19 and a preliminary determination of that same issue made pursuant to O 14 r 12 and/or O 33 r 2” of the Rules of Court ([25] TMT v BHPM).
However, the 3rd striking out application was not precluded by the 2nd striking out application, because the amendments to the Securities and Futures Act had materially changed the facts and circumstances forming the backdrop of the issue ([30] TMT v BHPM). As such, there was no identity of subject matter, and hence no issue estoppel arose ([27] TMT v BHPM).
Nonetheless, the Court of Appeal dismissed the appeal, as the Court of Appeal found that TMT’s continuation of its action in light of the offer to settle was an abuse of the court’s process ([38] TMT v BHPM).
Amongst others, the Court of Appeal rejected the argument on obtaining vindicatory relief ([37] TMT v BHPM).
According to the Court of Appeal, “… seeking vindicatory relief in the form of a formal finding of liability or a declaration of non-liability, in the face of an open offer to agree to all reliefs sought in an action without any admission of liability, may be justified in only very special circumstances”, for example, in the case of very grave defamation where a defendant offers to pay damages but refuses to withdraw the pleaded justification ([37] TMT v BHPM).
As such, the Court did not allow TMT’s claim to carry on as it was essentially a commercial claim ([37] TMT v BHPM).
Significance. There are two key points to note from TMT v BHPM. Firstly, there is the Court of Appeal’s holding on whether there was an issue estoppel arising from the 2nd striking out application. It makes clear that a finding under O 18 r 19 of the Rules of Court can, in certain circumstances, attract issue estoppel.
Secondly, it also makes clear that if there is an open offer to settle for all reliefs claimed, which admittedly is not common, it would take something “special” to allow an action to continue despite the said offer.
Tags: Striking out; Abuse of process; Offer to settle; Vindicatory relief; Issue Estoppel; O 18 r 19; O 14 r 12; O 33 r 2
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