Sim Kwai Meng v Pang Moh Yin Patricia and another [2022] SGHC(A) 1

Introduction

This appeal concerns a dispute on the terms of an oral agreement made on 22 June 2015 between a husband (“H”) and wife (“W”) before they were divorced. H is the appellant and W is the first respondent. The second respondent is W’s mother (“M”), who is involved only because she is a co-owner of a property, as elaborated below.

The parties owned two properties:

(a) a property in Signature Park (“SP”) which the parties owned as joint tenants; and

(b) a property in Mulberry Avenue (“MA”) which was owned as follows:

According to H, all that was orally agreed on 22 June 2015 was that SP would be sold.

In contrast, W’s account was that the agreed terms of the oral agreement were as follows:

(a) She would consent to H’s request to sell SP.

(b) H would transfer his interest in MA to W.

(c) W would transfer her half share of the sale proceeds of SP to H, after deducting $180,000 to compensate her for loss of rent which she would forego as a result of the sale of SP.

As can be seen, there was no dispute about the existence of an oral agreement as such. The dispute was on the existence of an oral agreement based on the terms alleged by W. We will refer to such terms as W’s oral agreement or “the WOA” for convenience.

The main issue before us was whether W was precluded from relying on the WOA by the doctrine of res judicata. There was also the question of whether H himself was precluded by the doctrine of res judicata from raising res judicata against W.

Background

We recount the history underlying this appeal briefly here. These events are important and will be dealt with in greater detail subsequently.

Thereafter, pleadings were filed. OS 1359 became HC/S 980/2019 (“the Present Suit”). On 25 and 26 August 2020, the Present Suit was heard by Gill J of the High Court.

On 21 January 2021, Gill J issued his judgment (“the Judgment”). He found that H was not precluded by the decision of Lee J in RA 104 from arguing that W was precluded from raising the WOA (at [41]). However, he also found that W was not precluded by the decisions of DJ Toh and Tan JC in the Divorce Suit from relying on the existence of the WOA (at [46]–[47]). On the evidence, he found that W had established the existence of the WOA (at [52]–[78]).

H then appealed against that decision to the Appellate Division of the High Court. His Appellant’s Case was focused on the question of res judicata against W and did not address the evidence about the WOA.

Our decision

The proceedings between the parties

Before addressing the issues raised in this appeal, it is necessary to consider in some detail the prior proceedings between the parties and their proper interpretation. These proceedings largely consisted of a series of events which gave rise to confusion and misunderstanding. At all material times, W was represented by solicitors, although she was represented by one set of solicitors before DJ Toh and Tan JC in the Divorce Suit and a different set of solicitors for OS 1359 and the Present Suit. H was represented by solicitors before DJ Toh and Tan JC in the Divorce Suit, but he represented himself before AR Choo and Lee J. Before us, he was represented by the solicitors who had represented him in the Divorce Suit. For convenience, we will use the expression “family justice court” or “FJC” to refer to the Family Court and the High Court (Family Division) or either of them as the context warrants.

The first important point of reference is the DJGD. At [7]–[9], DJ Toh observed as follows:

The last sentence at [9] of DJ Toh’s decision was the source of contention between the parties. W argued that this sentence meant that DJ Toh did not rule on the validity of the WOA as she had no power to do so. H contended otherwise, ie, that the reference to “such property disputes” was not to the dispute about the WOA, but rather to disputes in respect of SP and MA raised by W’s family members and a friend, which were in relation to an alleged oral agreement that was not made in contemplation of divorce. H argued that it was clear from the DJGD that DJ Toh had concluded that the WOA was not an agreement “made in contemplation of divorce” as mentioned in s 112(2)(e) of the Women’s Charter (Cap 353, 2009 Rev Ed) (“WC”); thus, the WOA should be disregarded.

We are of the view that the last sentence of [9] of the DJGD was unfortunate as it was not clear what it meant. Also, H’s argument as set out in the preceding paragraph did not make sense. In any event, the question was whether DJ Toh meant that:

(a) the validity of the WOA was to be determined by the High Court since the FJC had no power to adjudicate on property disputes (“the first interpretation”); or

(b) the validity of the WOA was irrelevant because even if W established the WOA, the FJC would disregard it because it was not an agreement made in contemplation of divorce (“the second interpretation”).

The confusion was compounded by the fact that DJ Toh mentioned that W had not conclusively proved the WOA, when the relevant standard of proof was proof on the balance of probabilities and not proof with conclusive evidence. Nevertheless, even if DJ Toh had applied the wrong standard, the question was still what her decision meant.

We are of the view that the second interpretation is the correct one for two reasons.

First, DJ Toh had emphasised that the WOA would not have been an agreement made in contemplation of divorce. This suggested that even if W could establish the WOA on the facts, DJ Toh would have disregarded it since it did not come within s 112(2)(e) of the WC.

Secondly, DJ Toh went on to grant W the first right to buy H’s interest in MA and, alternatively, ordered a sale of MA and the distribution of the sale proceeds in accordance with the shares of the owners as stated in the title deed. If DJ Toh was of the view that the existence of the WOA would have to be decided by another court, then she would have adjourned the hearing for that determination to be made first because it would not make sense to make a decision about MA pending that determination. If W then succeeded in establishing the existence of the WOA, that would have meant that MA would no longer be the subject of division by DJ Toh as H had agreed to transfer his interest in it to W in exchange for her consent to the sale of SP. The fact that DJ Toh did not adjourn the hearing and instead made orders in respect of MA was inconsistent with the first interpretation and consistent with the second interpretation.

But that was not all. W then filed the HCF Appeal. Importantly, on 10 August 2018, her counsel informed Tan JC that, “W will not be proceeding with arguments on the [WOA]. She will be seeking to recover the entire amount of the proceeds of sale of [SP] into the pool of matrimonial assets”. This, in our view, was critical. Whatever the correct interpretation of the last sentence of [9] of the DJGD, W was no longer pursuing her arguments on the WOA. In other words, W had abandoned the WOA. It was not necessary to establish the existence of the WOA or whether the FJC could have regard to it.

Realising the importance of this withdrawal, W argued in this appeal that she was doing the right thing by withdrawing the WOA from the FJC “and bringing the claim via civil proceedings”. There were various difficulties facing this contention.

First, there was no such qualification by W’s counsel when the counsel withdrew her arguments on the WOA before Tan JC on 10 August 2018. The minutes of the hearing as recorded by Tan JC do not reflect this qualification at all. Furthermore, the withdrawal by W’s counsel was not made inadvertently. Indeed, Tan JC had stood down the hearing to give counsel time to reflect on the WOA and how the proceeds of sale were to be dealt with. Thereafter, W’s counsel withdrew her arguments on the WOA.

Secondly, after W’s counsel said that W would not be proceeding with arguments on the WOA, W’s counsel went on to argue about the proceeds of sale of SP. If W was maintaining her right to rely on the WOA, then her counsel could not be arguing for the sale proceeds of SP to be included in the pool of matrimonial assets, as that would be inconsistent with the terms of the WOA.

Thirdly, if W really intended for the WOA to be decided by another court, then her counsel would have asked Tan JC to stay the hearing of her appeal pending the outcome of her claim on the WOA. As already mentioned, it would not have made sense to continue with any hearing in the Divorce Suit about MA (much less make a decision about MA) if there was going to be a claim in another court to establish the existence of the WOA. The fact that W’s counsel did not ask for the HCF Appeal to be adjourned pending the outcome of W’s claim based on the WOA also contradicted the Respondent’s Case that W wanted to pursue the WOA in a separate court.

Fourthly, it will be remembered that W had discontinued the Previous Suit on 16 March 2018. While we agreed that the mere discontinuance of an existing suit is not necessarily evidence that might be used to support H’s argument about res judicata, the point was that even after the decision of Tan JC on 8 October 2018, W did not commence a claim based on the WOA. On the contrary, it was H who commenced OS 1359 on 8 November 2018, one month after Tan JC’s decision on 8 October 2018, to seek an order for MA to be sold. It was only in response to this step that W then filed SUM 937 on 22 February 2019 to convert OS 1359 into a writ.

We add that when parties appeared before Tan JC again at the second hearing on 6 September 2018, H’s counsel mentioned that W had abandoned her arguments on the WOA on appeal. Importantly, W’s counsel did not disagree with this, and simply said that there was nothing to add.

The above sequence of events belied W’s submission that when her counsel said that W was not proceeding with arguments on the WOA, W was intending to pursue it separately. This submission was simply a desperate attempt by W to introduce a qualification through her new solicitors to salvage her reliance on the WOA. It was too late.

Thus, when Tan JC gave his decision on 8 October 2018, the WOA was no longer in play. W was precluded by the extended doctrine of res judicata, as expressed in Henderson v Henderson (1843) 67 ER 313 and followed in Setiadi Hendrawan v OCBC Securities Pte Ltd and others [2001] 3 SLR(R) 296, from raising the WOA again subsequently. Under this doctrine, a party is precluded from relying on an argument in a subsequent proceeding which should have been made in an earlier proceeding. Here, not only did W withdraw her arguments on the WOA, she then proceeded to argue as though the WOA no longer applied. The decision of Tan JC was made on that basis.

However, that was also not the end of the matter.

After H filed OS 1359, W had filed SUM 937 to convert OS 1359 into a writ. As mentioned, AR Choo decided on 19 March 2019 to convert OS 1359 into a writ. His reasons are important. The material part of his Notes of Argument states:

As can be seen, AR Choo did not merely say that there was a substantial dispute of fact about the existence of the WOA. He also said that he did not see any abuse of process by W and it was within her rights to pursue the WOA. She had not abandoned or waived her right to pursue the WOA. He gave directions for W (and M) to be the plaintiffs and H to be the defendant and on the filing and service of pleadings.

H then filed RA 104 on 1 April 2019 against AR Choo’s decision to convert OS 1359 into a writ.

On 2 May 2019, Lee J heard RA 104. He directed parties to seek clarification from Tan JC under the liberty to apply provision.

On 8 July 2019, Tan JC heard the parties and made the following remarks, as noted in his minute sheet:

Unfortunately, when relaying Tan JC’s clarifications to Lee J, parties could not agree as to what he had actually said. According to H (who was unrepresented then), Tan JC had said that W’s solicitors had dropped her contention on the WOA. However, W’s new solicitors said that Tan JC only said that there were no submissions on the issue of the WOA. In fact, as we learned from reading the relevant minute sheet of Tan JC – and as elaborated at [20], [23] and [28] above – W’s counsel did abandon the WOA at the hearing before Tan JC on 10 August 2018 and then continued on that basis till the decision of Tan JC on 8 October 2018.

When parties appeared again before Lee J on 6 August 2019 (after the clarification by Tan JC on 8 July 2019), Lee J dismissed H’s appeal against the decision of AR Choo without elaborating on his reasons.

After that, pleadings were filed. W’s claim asserted the WOA and sought an order for H to transfer his interest in MA to her. H filed a defence to W’s claim on the WOA. He also filed a counterclaim for alleged loss because W did not buy out his interest in MA. On 21 January 2021, Gill J issued the Judgment in favour of W (as elaborated at [10] above).

At the hearing before Gill J, W contended that H himself was precluded by res judicata from relying on res judicata, ie, H should not be allowed to argue that what had transpired in the FJC meant that W could not rely on the WOA. W’s argument on res judicata against H was based on the decision of Lee J and not the decision of AR Choo. Perhaps that was why the Judgment did not refer to AR Choo’s decision as a possible ground which would preclude H from raising res judicata against W. However, before us, W relied on both the decisions of Lee J and AR Choo to raise res judicata against H.

Whether H is precluded from raising res judicata against W

We had to decide first whether the decision of Lee J and/or the decision of AR Choo precluded H from raising the issue of res judicata against W because of issue estoppel.

Gill J concluded that the decision of Lee J did not preclude H from raising res judicata against W because it was not clear whether Lee J had decided the point (at [41] of the Judgment). We agree. Lee J could simply have decided to allow the action to continue as a writ because there were substantial disputes of fact over both the question of res judicata against W and the WOA.

However, while it is true that it is unclear whether Lee J had decided the point, the same does not apply to AR Choo. It seemed to us that he had decided the point in favour of W (see [30]–[31] above).

Nevertheless, in our view, AR Choo’s decision did not preclude H from raising res judicata against W for two reasons.

First, since it is unclear whether Lee J had decided the point, it is also unclear whether he endorsed that aspect of AR Choo’s decision which decided that W was not precluded from raising the WOA.

Secondly, in order for res judicata to apply, AR Choo’s determination that W was not precluded from raising the WOA had to be fundamental to his decision to allow W’s application to convert OS 1359 into a writ action. In Goh Nellie v Goh Lian Teck and others [2007] 1 SLR(R) 453, Sundaresh Menon JC (as he then was) elaborated at [35] that for issue estoppel to be established, the previous determination on the issue in question must have been fundamental and not merely collateral to the previous decision so that the decision could not stand without that determination. He referred to K R Handley, Spencer Bower, Turner and Handley: The Doctrine of Res Judicata (Butterworths, 3rd Ed, 1996) and Blair v Curran (1939) 62 CLR 464. This proposition was not disputed before us.

AR Choo need not have decided that W was not precluded from raising the WOA in order to allow her application to convert OS 1359 into a writ action. Both the res judicata point against W as well as the existence of the WOA could be left to be decided by the trial judge. It would have been different if AR Choo had decided to dismiss W’s application because she was precluded from raising the WOA. In that scenario, there would be no substantial dispute of fact left to be decided.

Whether W was precluded from relying on the WOA

We now come back to the decision of Gill J on whether W was precluded from relying on the WOA because of res judicata.

Gill J was of the view that the decision of DJ Toh did not preclude W from relying on the WOA as there was no final and conclusive decision by DJ Toh on the issue. This was because of the last sentence at [9] of the DJGD. It appears that Gill J favoured the first interpretation (see [15(a)] above).

The parties did not produce the minute sheet of the hearings on 10 August 2018 and 6 September 2018 before Tan JC to Gill J. However, Gill J was of the view that even assuming that W’s counsel had abandoned the WOA before Tan JC, there was nothing to indicate that Tan JC had reached a final and conclusive decision on the merits of the WOA. Hence, Tan JC’s decision did not meet the first requirement of res judicata or issue estoppel as mentioned in Lee Tat Development Pte Ltd v Management Corporation of Strata Title Plan No 301 [2005] 3 SLR(R) 157, at [14]–[15], ie, that there must be a final and conclusive judgment on the merits (see [47] of the Judgment).

With respect, we are of the view that this is where Gill J erred. The reason why Tan JC did not decide on the merits of the WOA was because W had abandoned it. One would therefore not expect him to rule on it. The real issue was not one of res judicata in the sense that Tan JC had ruled on the WOA but whether, as we mentioned at [28] above, there was res judicata in the wider sense because W had not raised the WOA before Tan JC when she ought to have done so. Indeed, she had in fact deliberately withdrawn it and thereafter proceeded on the basis that the WOA did not apply. She is bound by that election regardless of the earlier decision of DJ Toh, which we need not discuss any further. In other words, whatever the decision of DJ Toh meant, this was academic because W had abandoned the WOA on appeal.

In the circumstances, it was not open to Gill J to hear evidence and decide on the WOA. Hence, we allowed H’s appeal and set aside Gill J’s decision in respect of W’s claim.

H’s counterclaim for damages

As for H’s counterclaim for damages, we agreed with Gill J that W was not obliged to buy H’s interest in MA under the decisions of DJ Toh and Tan JC (see [117] of the Judgment). She had a right but not an obligation to do so. This counterclaim was not the subject of the Appellant’s Case, though H’s notice of appeal specifically stated that he was appealing against Gill J’s dismissal of it. For the avoidance of doubt, we dismissed H’s appeal on the counterclaim.

Orders

As for the question whether W (and M) should be ordered to join H to sell MA, Gill J said that this relief was not sought in H’s defence and counterclaim, although it was originally sought in OS 1359. In any event, this was inconsequential as he saw no basis to make such an order (at [117] of the Judgment).

Notwithstanding Gill J’s remarks and decision, W’s counsel accepted before us that the High Court had the power to order a sale of MA under paragraph 2 of the First Schedule of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) if that relief had been sought by H.

Fortunately for the parties, W did not insist that H should seek an order for sale of MA in separate proceedings if we were to allow H’s appeal in respect of W’s claim. The parties were inclined for us to address this issue rather than wait for separate proceedings.

In the circumstances, after the parties addressed us on the terms of the sale of MA, we ordered a sale of MA as mentioned at [7] above.

Conclusion

For these reasons, we allowed H’s appeal on W’s claim and dismissed his appeal in respect of the dismissal of his counterclaim.