Michael Vaz Lorrain v Singapore Rifle Association [2020] SGCA 72

Introduction and background facts

The sole issue in this judgment is whether an offer to settle that contains a term requiring the discontinuance of an action can be validly accepted after a judgment on the merits. At the outset, we note that this appears to be the first time that this issue is squarely before us.

The facts can be stated briefly. The respondent, the Singapore Rifle Association (“SRA”), is a member of the Singapore Shooting Association (“SSA”). The appellant, Mr Michael Vaz Lorrain (“Mr Vaz”), is the president of SSA’s council. On 8 February 2017, SRA commenced HC/S 109/2017 (“Suit 109”) against Mr Vaz, alleging that he had breached a mediation agreement and/or a duty of confidence. Mr Vaz did not dispute liability. Accordingly, interlocutory judgment for damages to be assessed was entered against Mr Vaz on 23 May 2017.

For convenience, we refer to a term that requires the action to be discontinued as a “Discontinuance Term”. In addition, unless otherwise stated, a “judgment” refers to a first instance judgment that completely disposes of the cause of action or matter (both with regard to liability and damages).

The parties’ further submissions

Mr Vaz advances the following submissions:

(a) Mr Vaz acknowledges that he had previously taken the position that the OTS was capable of acceptance by SRA. He considered that the Discontinuance Term did not prevent SRA from accepting the OTS, relying on the decision of this court in NTUC Foodfare Co-operative Ltd v SIA Engineering Co Ltd and another [2018] 2 SLR 1043 (“NTUC Foodfare”). There, the offer to settle likewise contained a Discontinuance Term.

(b) Notwithstanding his previous position, Mr Vaz now submits that the OTS could not be validly accepted by SRA. Distinguishing NTUC Foodfare, he argues that once the High Court had delivered judgment, the Discontinuance Term could not be complied with. Hence, the OTS lapsed and ceased to be open for acceptance.

We turn to SRA’s submissions:

(a) SRA notes that the OTS did not state a time for acceptance. Order 22A r 3(5) of the Rules of Court provides that “[w]here an offer to settle does not specify a time for acceptance, it may be accepted at any time before the Court disposes of the matter in respect of which it is made”. It was held in NTUC Foodfare that the matter is disposed of only when the appellate court renders its decision on the merits (at [17]).

(b) SRA argues that the fact that the OTS contained a Discontinuance Term did not mean it was incapable of being accepted. In this connection, SRA refers to NTUC Foodfare and another previous decision of this court, Ong & Ong Pte Ltd v Fairview Developments Pte Ltd [2015] 2 SLR 470 (“Ong & Ong”). The offers to settle in both cases contained a Discontinuance Term. Nonetheless, SRA accepts that a “Notice of Discontinuance … is typically filed before a first instance judgment is rendered”.

Whether the OTS which contained a Discontinuance Term could be accepted after judgment

We turn to our analysis of the preliminary issue.

In construing an offer to settle, the law should focus on the intentions of the offeror as determined objectively. This is no different from a normal contractual offer (see, for example, Norwest Holdings Pte Ltd (in liquidation) v Newport Mining Ltd [2010] 3 SLR 956 at [34]). The Discontinuance Term in the OTS is unambiguous and an offer to settle with such a term clearly suggests that, objectively construed, the offeror only intended for the offer to settle to be capable of acceptance before judgment was obtained. In our view, the Discontinuance Term contemplates the existence of an outstanding cause or matter not disposed of which is within the scope of the offer to settle, and it is in such an unchanged circumstance that the offer to settle remains open for acceptance. Accordingly, if the Discontinuance Term is not capable of compliance because there is already a judgment on the merits, it would follow that an offer to settle that requires discontinuance is an impotent offer under O 22A that is incapable of acceptance once judgment has been obtained.

In the circumstances, the anterior question in relation to whether the OTS could be accepted after judgment is whether an action can be discontinued after judgment. For the reasons that follow, we are satisfied that the question must be answered in the negative as a matter of principle and coherence. We then explain why the cases cited by SRA, namely, NTUC Foodfare and Ong & Ong, can be distinguished for present purposes.

An action can only be discontinued before judgment

We begin by considering the well-established doctrine of merger. Pursuant to this doctrine, once a judgment has been given on a cause of action, the cause of action merges with the judgment of the court and ceases to exist as an independent entity. There is no doubt that the doctrine is part of Singapore law (see the decision of this court in Chiam Heng Hsien (on his own behalf and as partner of Mitre Hotel Proprietors) v Chiam Heng Chow (executor of the estate of Chiam Toh Say, deceased) and others [2015] 4 SLR 180 at [155]).

In Salijah bte Ab Latef v Mohd Irwan bin Abdullah Teo [1995] 3 SLR(R) 233 at [23], the High Court, citing George Spencer Bower and Alexander Kingcome Turner, The Doctrine of Res Judicata (Butterworths, 2nd Ed, 1969) at para 427, referred to the doctrine of merger as follows:

The High Court’s application of the doctrine of merger was endorsed by this court on appeal (see Salijah bte Ab Latef v Mohd Irwan bin Abdullah Teo [1996] 2 SLR(R) 80 at [76]).

Clearly, as a matter of principle, there is simply nothing for the parties to “discontinue” once a judgment has been obtained. Upon judgment, the cause of action merges with the judgment and the doctrine of res judicata applies. Accordingly, as a matter of law, an action can only be discontinued before judgment.

Indeed, we note that there are Canadian authorities which have similarly taken the position that an action cannot be discontinued after judgment (see, for instance, Karaha Bodas Co LLC v Negara [2011] AJ No 1064 at [3], where the Court of Appeal of Alberta observed that “a discontinuance after judgment is inappropriate”).

The conclusion we have reached is also consistent with O 21 r 4 of the Rules of Court, which sets out the effect of a discontinuance before judgment on the merits:

In our view, O 21 r 4 contemplates a scenario where the cause of action has yet to merge with the judgment of the court and is therefore not extinguished or superseded. This explains why O 21 r 4 refers to a “subsequent action for the same, or substantially the same cause of action” [emphasis added], and provides that a discontinuance shall not operate as a defence to that cause of action being litigated in the future. This supports the principle that an action can only be discontinued before judgment, since the “cause of action” referred to in O 21 r 4 would have merged with the judgment of the court if one had been obtained. In that scenario, the doctrine of res judicata would apply to bar that cause of action from being re-litigated.

We note that in Singapore Civil Procedure 2020 vol 1 (Chua Lee Ming gen ed) (Sweet & Maxwell, 10th Ed, 2020), it is suggested at para 21/5/28 that it may be possible (albeit rare) for an action to be discontinued after judgment:

However, in our view, the authority cited, Stahlschmidt v Walford (1879) 4 QBD 217, does not suggest that an action can be discontinued after judgment. In short, there was no judgment in that case. There, an action was referred to an arbitrator, and the arbitrator made findings of fact in favour of the defendant. The plaintiff then applied for leave to discontinue the action and Field J granted leave. The defendant appealed against Field J’s decision to allow the discontinuance, precisely because he sought to have a judgment that will have the effect of an estoppel (at 218). On appeal, Cockburn CJ and Mellor J held that the discontinuance ought not to be allowed, and Cockburn CJ reasoned as follows (at 219):

Coherence with the law on automatic discontinuance

In reaching the conclusion that an action cannot be discontinued after judgment, we also have regard to our procedural law on automatic discontinuance, whereby it is established that an action is not subject to automatic discontinuance after final judgment is obtained.

Order 21 r 2(6) of the Rules of Court states:

In Tan Kim Seng v Ibrahim Victor Adam [2004] 1 SLR(R) 181 (“Tan Kim Seng”), this court considered whether O 21 r 2(6) applied to interlocutory judgments. The question was answered in the affirmative and it was held that “O 21 r 2(6) would apply to any case where steps are still required to be taken to obtain a judgment which is enforceable” (at [26]).

The corollary that follows from Tan Kim Seng is that O 21 r 2(6) does not apply once a final judgment has been obtained. After all, O 21 r 2(6) is a case management rule to ensure that a litigant pursues a case throughout the course of proceedings in a timely manner. A dilatory litigant faces the prospect of proceedings being automatically discontinued for want of prosecution of a case for more than a year after the last step in the proceedings.

Accordingly, our holding that an action cannot be discontinued after judgment, which we have defined to exclude interlocutory judgments (see [6] above), would promote coherence in the law.

The cases cited by SRA can be distinguished

In contending that the OTS was validly accepted, SRA relies on two decisions of this court, NTUC Foodfare ([8(a)] supra) and Ong & Ong ([9(b)] supra). The offers to settle in both cases contained a Discontinuance Term. In our judgment, these two decisions do not affect the analysis we have set out above. In both cases, this court did not squarely address the preliminary issue – whether an offer to settle which contains a Discontinuance Term can be validly accepted after judgment.

Further, both decisions can also be distinguished on other bases. In Ong & Ong, the matter was bifurcated and the facts may be summarised as follows:

(a) The plaintiff commenced an action against the defendant, and the defendant responded with a counterclaim (at [3] and [4]).

(b) Thereafter, the plaintiff served on the defendant an offer to settle which contained a Discontinuance Term (at [5]).

(c) The trial was bifurcated. The High Court granted interlocutory judgment for the plaintiff in respect of one claim, but dismissed the other. The High Court dismissed the defendant’s counterclaim. Damages were ordered to be assessed (at [6]).

(d) Both parties appealed against the High Court’s interlocutory judgment. The defendant did not appeal against the dismissal of the counterclaim (at [8]).

(e) On appeal, the plaintiff’s appeal was allowed and the defendant’s appeal was dismissed. On the same day, the defendant accepted the plaintiff’s offer to settle (at [10]). The plaintiff replied that the counterclaim had been determined when the defendant did not appeal against the High Court’s dismissal of the counterclaim. Accordingly, the court had disposed of the matter in respect of which the offer to settle was made, and it was no longer capable of acceptance (at [11]).

The issue in Ong & Ong was thus whether an offer to settle can be accepted if the court has disposed of part of the matter (ie, the counterclaim in Ong & Ong). This court held that “so long as there is an outstanding matter not disposed of which is within the scope of the offer to settle, the offer to settle remains open for acceptance” (at [54] and [55]). Since damages had to be assessed for the plaintiff’s claims, there were outstanding matters which had not been disposed of. Consequently, the offer to settle remained open for acceptance.

The scenario is materially different in the present case. Here, the Judge had decided both the issue of liability and damages and there was simply nothing left in the concluded action for SRA to “discontinue”. As explained at [11] above, the Discontinuance Term is an indication that the offer to settle was not intended to survive beyond the conclusion of the action. Indeed, the emphasis placed by this court in Ong & Ong on the fact that there had been an outstanding matter not yet disposed of fortifies the conclusion we have reached.

We turn to NTUC Foodfare ([8(a)] supra). There, the plaintiff commenced an action against the defendants. Eleven days before the trial, the defendants served an offer to settle that was never accepted by the plaintiff. The offer to settle contained a Discontinuance Term (at [3], [4] and [7]).

The plaintiff argued that the offer to settle was not open for acceptance after the trial ended. To the contrary, the defendants submitted that the offer to settle was open for acceptance until the disposal of the appeal (at [9] and [10]).

This court agreed with the defendants and reasoned as follows at [16] and [17]:

As stated at [27] above, NTUC Foodfare may be distinguished on the basis that the preliminary issue considered in this case was not an issue there, and was therefore not addressed. The defendants’ offer to settle was in any event never accepted by the plaintiff. Furthermore, the question of whether there could be compliance with the requirement of discontinuance after judgment was not an issue before the court. With regard to the general proposition that an offer to settle may be accepted after judgment, we provide some preliminary observations below.

Decision on preliminary issue

Preliminary observations on whether an offer to settle can be accepted after judgment regardless of whether it contains a discontinuance term

We turn to make some preliminary observations on whether an offer to settle can be accepted after judgment, regardless of whether it contains a Discontinuance Term. To be clear, because of the analysis set out above, it is unnecessary for us to reach a conclusive view on this broader issue.

We begin with statutory interpretation. The relevant provision in this regard is O 22A r 3(5) of the Rules of Court:

It should be noted that the Rules of Court contains a specific definition of “Court”, as defined in O 1 r 4(2):

Order 22A r 3(5) can be contrasted with other provisions in the Rules of Court which make explicit reference to the Court of Appeal:

As a matter of statutory interpretation, it therefore seems arguable to us that the reference to “Court” in O 22A r 3(5) refers exclusively to a first instance court.

We note that it also appears to be the legal position in Ontario that an offer to settle cannot be accepted after judgment. It should be noted that the offer to settle regimes in a number of Canadian and Australian states formed the background against which O 22A was included in Singapore’s civil procedure rules (see Ram Das V N P v SIA Engineering Co Ltd [2015] 3 SLR 267 at [36] and Ong & Ong at [15]).

The relevant case from Ontario is Grass (Litigation guardian of) v Women’s College Hospital [2004] OJ No 1519. There, the first trial was held in 1998 and judgment was rendered in 1999. A new trial was then ordered by the Court of Appeal in 2001 and the second trial was held in 2003. The plaintiff had made an offer to settle before the first trial, and argued that the offer to settle was “resurrected” when the Court of Appeal overturned the first trial disposition. The Ontario Superior Court of Justice dismissed this argument, but in so doing, also observed that both parties had agreed that the offer to settle was not open for acceptance after the first trial judge rendered judgment (at [21]):

We acknowledge that our preliminary observations may appear to contradict NTUC Foodfare ([8(a)] supra) at [17]. Nonetheless, as we have explained, it is not necessary for us to reach a conclusive view on whether an offer to settle can be accepted after judgment. We therefore leave this issue for detailed consideration on a future occasion, where the parties may make their submissions with the benefit of our foregoing observations.

Conclusion