Lion City Holdings Pte Ltd (in liquidation) v Jumabhoy Asad and Others

Choo Han Teck J:

[1] This suit was filed by the liquidators of the plaintiff, Lion City Holdings Pte Ltd, against three of its former directors. The writ when filed on 18 April 2002 was filed as a generally endorsed writ. No statement of claim was filed until 18 May 2004. The endorsement on the writ merely stated as follows:

[2] The plaintiff applied to amend the writ to include a claim based on a breach of the duties of care. The application was allowed by the assistant registrar and consequently the plaintiff filed its statement of claim on 18 May 2004. The defendants appealed against the order granting leave to the plaintiff to amend the writ because by the amendment the plaintiff was able to present a claim that would otherwise be time barred. This was not disputed but the plaintiff’s contention was that the cause of action based on the breach of a duty of care arose from the same or substantially the same facts.

[3] It will be useful to set out the context for a better understanding of the issue in dispute in these appeals. The courts will not normally allow a claim to be amended if the amendment produces a new cause of action that would have been defeated by a limitation defence. This is encapsulated in a passage in the judgment of Lord Esher in Weldon v Neal (1887) 19 QBD 394 at 395:

L P Thean JA in Chan Mui Eng v Chua Chu Huwe [1994] 1 SLR 375 concurred with the even stronger view of Scrutton LJ in Mabro v Eagle, Star and British Dominions Insurance Company, Limited [1932] 1 KB 485 at 487 where Scrutton LJ held:

[4] Counsel for the plaintiff relied on O 20 of the Rules of Court (Cap 322, R 5, 2004 Rev Ed) which provides an exception that ameliorates the harshness to the rulings above. Order 20 provides as follows:

The way O 20 was to be applied was considered by the Court of Appeal in Lim Yong Swan v Lim Jee Tee [1993] 1 SLR 500. Noting the intention to depart from Weldon v Neal, the court held at 506, [19]:

Further on at 508, [28], the court summarised the purport and application of O 20 r 5 as follows:

[5] The above two conditions were clearly meant to be read conjunctively otherwise the first condition would be limp as it would be subsumed under the word “just” in the second condition. As to the first condition the court approved the test in Steamship Mutual Underwriting Association Ltd v Trollope & Colls (City) Ltd (1986) 33 BLR 77, that is to say, “whether there is a sufficient overlap between the facts supporting the existing claim and those supporting the new claim” (per Yong Pung How CJ at 508, [29]).

[6] Reverting to the present appeals before me, I find that I am unable to apply the first condition because there were no facts upon which I can determine whether there was an “overlap” between those facts and those in which the new cause of action was intended to be pleaded. A generally endorsed writ without a statement of claim provided insufficient material to work with. The claim for breach of fiduciary duty is an allegation, not a statement of fact. Furthermore, the plaintiff has not convinced me that even the second condition could be satisfied. The writ was filed, on its admission, merely as a “protective writ” in 2002. That is to say that at that time the plaintiff had not made up its mind whether it ought to pursue its claim in court. The position remained unchanged for two years when the writ was renewed three times. As counsel for the defendants pointed out, it was only four years after the plaintiff company was wound up (24 March 2000) and two years after the bare writ was filed, that the plaintiff decided to pursue its action against the defendants. I am of the view that the plaintiff had taken too long to decide on the present course of action. In such circumstances, I do not think that it would be right to allow the amendment and deprive the defendants of a limitation defence.