Ram Das V N P v SIA Engineering Co Ltd

Hoo Sheau Peng:

[2] The plaintiff-appellant is Ram Das V N P (“the Appellant”), an employee of the defendant-respondent, SIA Engineering Company Ltd (“the Respondent”). The Appellant sustained an injury at work on 1 August 2008 while he was supervising the cleaning of an aircraft. He sued the Respondent. The trial was a bifurcated action, with the issue of liability being heard first. After the first day of trial on liability, the Respondent offered on 4 July 2011 to settle the proceedings under O 22A of the ROC as follows:

[3] The Appellant did not accept the offer. On 12 July 2011, the Appellant made a similar offer to settle on liability to the Respondent. The offer to settle made by the Appellant stated as follows:

[4] At first instance, the District Judge dismissed the entirety of the Appellant’s claim (see Ram Das V N P v SIA Engineering Company Ltd [2012] SGDC 8). On appeal to the High Court in respect of District Court Appeal 41 of 2011 (“DCA 41/2011”), Choo Han Teck J made the following orders:

(a) from the date of the issue of the writ of summons to the date when the OTS was served on 4 July 2011 (“stage 1”);

(b) from the date of service of the OTS on 4 July 2011 to the date when the Appellant’s claim was dismissed with costs by the District Judge on 28 November 2011 (“stage 2”);

(c) the work done in respect of DCA 41/2011 (ie, from the date that the appeal was filed to the date of the High Court’s decision on liability) (“stage 3”); and

(d) the work done for the assessment of damages (ie, after the date of the High Court’s decision on liability up to the date when the Appellant accepted the Respondent’s Calderbank offer on 9 January 2014) (“stage 4”).

[10] Before the District Judge, as well as before this Court, the Appellant argued that the Court of Appeal case of The “Endurance 1” [1998] 3 SLR(R) 970 (“The Endurance 1”) had settled the issue of the validity of an offer to settle that dealt only with liability. The relevant paragraphs of the judgment are set out here as follows:

Thus, in the Appellant’s submission, The Endurance 1 stood for the proposition that an offer to settle that did not prescribe a “dollar and cents” value could not be a serious and genuine offer to settle and thus could not be a valid offer under O 22A.

[14] The District Judge held that O 22A did not preclude parties from making offers to settle in respect of liability only. In analysing The Endurance 1, the District Judge held at [25] of the Judgment that:

[16] The District Judge also held that O 22A r 1 did not prevent the offer to settle regime from applying to appeals (at [41] of the Judgment). As the Respondent’s OTS did not include an expiry date and was never withdrawn, it remained open for the Appellant to accept even up to the appeal hearing before the High Court since the issue of liability remained alive between the parties until the appeal judgment was delivered (at [43] of the Judgment).

[19] In order for this issue to be answered, four sub-issues should be considered, namely:

(a) whether the Respondent’s OTS on liability is valid and effective under O 22A;

(b) if so, whether the elements under O 22A r 9(3) are satisfied such that the Respondent was entitled to be paid costs on an indemnity basis by the Appellant;

(c) whether the cost consequences in Or 22A r 9(3) applies to the work done in DCA 41/2011; and

(d) whether the Court should exercise its discretion under O 22A rr 9(3) and 12 not to order indemnity costs (if the Court finds that O 22A r 9(3) applies) or under O 22A r 9(5) to order indemnity costs against the Appellant (should the Court find that O 22A r 9(3) is inapplicable).

[21] First, the offer must be validly made under O 22A r 1. Order 22A r 1 provides that “[a] party to any proceedings may serve on any other party an offer to settle any one or more of the claims in the proceedings on the terms specified in the offer to settle”. Order 22A r 1 also provides that the offer to settle must be in Form 33 of the ROC.

[22] Additionally, an offer to settle should also be clear and precise (Denis Matthew Harte v Tan Hun Hoe and Gleneagles Hospital Ltd [2001] SGHC 19). In the present case, the terms of the OTS were simple. Indeed, the Appellant had made a counter-offer on similar terms (see [3] above). Both parties understood the Respondent’s OTS to be a settlement on the issue of liability, with liability to be apportioned in the percentages as offered by either party, and have argued on this basis in this appeal.

[23] It has also been consistently held by our courts that the offer to settle must be a serious and genuine offer, and should contain an element that would induce or facilitate settlement (see Singapore Airlines Ltd and another v Fujitsu Microelectronics (Malaysia) Sdn Bhd and others [2001] 1 SLR(R) 38 at [10]–[11]). In order for an offer to be a serious and genuine one, it should also contain reasonable terms (see Wyno Marine Pte Ltd (in liquidation) v Lim Teck Cheng and Others [1998] SGHC 340 at [9]). What would constitute a serious and genuine offer to settle must depend on the circumstances and issues of the case (see Man B&W Diesel S E Asia Pte Ltd and another v PT Bumi International Tankers and another appeal [2004] 3 SLR(R) 267 (“Man B&W Diesel”) at [10]).

[27] As mandated by s 9A of the Interpretation Act (Cap 1, 2002 Rev Ed) (“Interpretation Act”), the court is required to take a purposive interpretation of written laws. Order 1 r 3 of the ROC provides that the Interpretation Act shall apply in relation to the ROC as well. The narrow interpretation of The Endurance 1 should be preferred because this approach accords with the purpose of the O 22A offer to settle regime. The purpose of O 22A was highlighted in The Endurance 1, where the Court of Appeal, citing the Ontario Court of Appeal in Data General (Canada) Ltd v Molnar Systems Group Inc (1991) 85 DLR (4th) 392 (“Data General”), found that the rationale of the O 22A regime was to “encourage the termination of litigation by agreement of the parties – more speedily and less expensively than by judgment of the court at the end of trial” (at [44]). Similarly, Chao Hick Tin JA in Singapore Airlines Ltd v Tan Shwu Leng [2001] 3 SLR(R) 439 set out the rationale behind O 22A as such (at [38]):

[28] As noted by Lee Seiu Kin J in Ong & Ong Pte Ltd v Fairview Developments Pte Ltd [2014] 2 SLR 1285 (“Ong & Ong (HC)”), various statutory procedures in relation of offers to settle existed in a number of Canadian and Australian states at the time O 22A was included in the Rules of the Supreme Court and in the Rules of the Subordinate Courts in Singapore. This included the jurisdictions of British Columbia, Ontario, New South Wales and Victoria, and the regime in these jurisdictions formed the background against which O 22A was included in Singapore’s civil procedure rules. In summarising the purpose behind the offer to settle regimes in these jurisdictions, Lee J stated (at [48]):

[30] Furthermore, it should be noted that there is nothing in O 22A that requires the offer to settle the entirety of the proceedings. In fact, O 22A r 1 expressly states that the offer to settle can be made on “any one or more of the claims in the proceedings” [emphasis added]. The term “claim” is not defined in the ROC. However, it has been interpreted by the court in Bachoo Mohan Singh v Public Prosecutor and another matter [2010] 4 SLR 137 in the context of s 209 of the Penal Code (Cap 224, 1985 Rev Ed). In that case, V K Rajah JA, as he then was, with whom Andrew Phang JA agreed, held that the word “claim” is an etymological chameleon that takes its colour and definition from the context in which it is used (at [61]). In coming to that conclusion, Rajah JA considered the definition in Black’s Law Dictionary (Bryan A Garner chief ed) (West, 9th Ed, 2009) and P Ramanatha Aiyar's The Law Lexicon (Justice Y V Chandrachud and V R Manohar gen eds) (Wadhwa and Company, 2nd Ed, 1997) (“The Law Lexicon”). In particular, the authors of The Law Lexicon noted that the word “claim” is “of very extensive signification, embracing every species of legal demand” (at p 329). In the same case, Choo J held that a “claim” in a court of justice should be understood as “any demand or assertion of right made before any court and requiring the sanction of that court” (at [153]).

[31] The word “claim” takes its definition from the context in which it is found. Again, as mandated by s 9A(1) of the Interpretation Act, the interpretation of the word “claim” that promotes its purpose and object in the context of O 22A should be preferred. It is my view that, taking a purposive approach to O 22A r 1, the word “claim” should be interpreted to include any question of liability and/or damages and/or other relief (eg, injunction) which a court may be required to determine. Such an interpretation would promote the purpose and policy behind O 22A.

[33] One such authority is Mahoney v Curwood Transport Ltd [1998] NJ No 311 (“Mahoney”), a decision of the Newfoundland Supreme Court, which was cited by the Respondent and relied on by the District Judge in her Judgment. The offer to settle regime in Newfoundland, Canada, may be found at r 20A of the Newfoundland Rules of the Supreme Court, 1986, c 42, Sched D (“Newfoundland Rules”), a provision similar to O 22A of the ROC. The provisions relevant in Mahoney are set out here:

[34] In Mahoney, the offer to settle was worded as follows: “TAKE NOTICE that Defendants offers [sic] to accept 50% liability in settlement of the liability trial in these proceedings.” Like the present case, the trial in Mahoney was a bifurcated one. The court, in recognising the validity of the offer for the purposes of r 20A, held that r 20A of the Newfoundland Rules was not limited to judgments for money. Furthermore, given that the purpose of r 20A was to encourage parties to settle their disputes without going to court, the availability of the rule should not be unduly restricted. Orsborn J then continued (at [24]–[27]):

This reasoning is apposite and applicable to the present case.

[36] The opinion expressed by the court in Hunger Project above accord with the position taken by the Singapore courts in relation to the issue of favourability (as discussed at [44]–[45] below). Given the similarity of the Newfoundland and Ontario offer to settle regimes to the rules in Singapore, and the fact that they formed the background against which Singapore’s O 22A was enacted, these cases form persuasive authorities as to how O 22A should be interpreted. Mahoney has also been cited and followed in a number of recent Canadian cases (see eg, Mercer v Gollop [2000] NJ No 98 at[13] , Webster v BCR Construction [2012] OJ No 6672 at[15] ).

[37] The Respondent also bolstered its argument with the case of Coombes v Road and Traffic Authority & Ors (No 2) [2007] NSWCA 70 (“Coombes”) from New South Wales where the court held that an offer to settle in respect of liability only is valid. In Coombes, the Court of Appeal of New South Wales considered whether an offer made only on the issue of liability is capable of acceptance and held that it was. The court in Coombes also referred to the decision of Thomas William Vale v Timothy David Eggins (No 2) [2007] NSWCA 12 (“Vale”) where no objection was expressed in relation to an offer made as to liability only.

[38] There is however an important point of distinction between New South Wales and Singapore’s offer to settle regime. This is the presence of the definition of “claim for relief”, which includes “a claim for the determination of any question or matter which may be determined by the Court”, in both the New South Wales Supreme Court Act (Act No 52 of 1970) (NSW) and Civil Procedure Act 2005 (NSW), under which the New South Wales Supreme Court Rules 1970 (NSW) (“NSW Supreme Court Rules”) and the New South Wales Uniform Civil Procedure Code (Reg No 418 of 2005) (NSW) (“Uniform Civil Procedure Code 2005”) were enacted respectively.

[41] There is no similar definition of “claim” or “claim for relief” in Singapore’s ROC. However, as discussed at [30]–[31] above, I am of the view that a purposive interpretation of O 22A r 1 requires that the word “claim” be defined broadly. A wider definition of the term “claim” will also bring the O 22A regime in line with the relevant jurisdictions in Canada and Australia.

[42] The fact that the offer to settle regime under O 22A of the ROC has been held to be available for non-monetary claims is an additional reason for holding that offers to settle under O 22A may be made in respect of liability only.

[43] It is clear that offers to settle do not apply only to monetary claims (see eg, Mopi Pte Ltd v Central Mercantile Corporation (S) Ltd [2001] SGHC 328 where the offer to settle dealt only with the use of a trade mark and had no monetary value). Indeed, one reason why the O 22A regime was introduced was to provide an alternative to the payment into court procedure under O 22, which was only available for monetary claims (see Singapore Civil Procedure 2015 at para 22A/0/2).

[44] That an offer to settle should not be restricted only to monetary values can also be seen in the context of the test of favourability. In this regard, the Appellant had relied on Tan Shwu Leng v Singapore Airlines Limited and another [2001] SGHC 51 at [96] for the proposition that the test for favourability must be in dollars and cents, and argued that it followed from that that an offer to settle must have a monetary value to be valid under O 22A r 9. This is mistaken.

[46] Following from the reasoning in the above authorities, there is no reason to restrict the validity of offers to settle to require a monetary value, even if the claim is for an unliquidated sum, when the action is bifurcated. Rather, what is important is that the offer to settle is a serious and genuine one, which must be a question of fact in every case.

[48] The claim in The Endurance 1 was made by the charterers of a vessel against the owners for breach of a time charterparty, or the wrongful withdrawal of the vessel in the alternative, as well as for the wrongful conversion of two water-makers placed by the charterers on board the vessel for use. The owners counterclaimed for unpaid charter-hire and for damages for the wrongful arrest of the vessel. The vessel was chartered by the charterers at a rate of US$2,000 per day for a period of one year commencing from the date of delivery of the vessel. The charterers then subchartered the vessel for a charter-hire of US$2,800 per day. On 17 March 1994, the vessel was delivered by the owners directly to the subcharterers. The charterers paid the owners the charter-hire for the first month amounting to US$60,000 in advance of delivery.

[49] Under the charter and subcharter, the vessel was intended to be used to supply fuel oil to fishing vessels. However, the equipment was not in good repair, and from the date of delivery on 17 March 1994, the main engine and cargo pump broke down frequently. About a month later, on 8 April 1994, the subcharterer expressed the intention to terminate the subcharter on account of the unseaworthiness of the vessel, and withheld payment which accrued from that date. Around a week later, on 15 and 18 April 1994, the owners wrote to the charterers demanding payment and threatened to withdraw the vessel if payment was not made. On 25 April 1994, the owners purportedly withdrew the vessel from the charterers. The two water-makers aboard the vessel which had been purchased by the charterers for the subcharterers were not returned to the charterers after the owners withdrew the vessel.

The question in this appeal is whether this statement by the Court of Appeal rules out all and any offers to settle on liability only from being serious and genuine offers to settle.

[53] The District Judge, after analysing The Endurance 1, concluded that the case did not stand for the proposition that all offers to settle must stipulate a monetary sum in order to be regarded as serious and genuine, or that all offers made in terms of a percentage of an unliquidated sum would be invalid for the purposes of O 22A r 9 (at [25] of the Judgment). The District Judge was of the view that the Court of Appeal regarded the two specific offers to settle which did not specify any monetary sums “as offers which could not have merited proper consideration by the defendant” (at [24] of the Judgment). I agree. When the terms of both offers are examined, neither seemed to be a serious and genuine offer that would induce or facilitate settlement.

[54] The first offer required the owners to admit liability, with the charterers offering to accept 80% of the damages as assessed. In relation to liability, there was no element of compromise. In relation to damages, the District Judge stated that the charterers’ claims were “easily quantifiable” (see [24] of the Judgment). To the extent that the District Judge meant that the charterers could have “easily” quantified their claims in the sense of attributing a figure to their offer rather than to leave the owners in a conundrum, I agree. However, if the District Judge meant that the process of assessment of damages was an easy task for the court in The Endurance 1, this was not so clear to me. Indeed, the assessment of damages in The Endurance 1 turned out not to be such a straightforward process. On the facts, the Court of Appeal disagreed with the trial judge’s award of damages for breach of the charterparty, and in relation to the award of damages for wrongful conversion, sent the case back for damages to be reassessed. The Court of Appeal’s primary objection in The Endurance 1 to an offer to settle on liability alone was the fact that an assessment of damages could give rise to numerous complexities and result in protracted hearings (at [46]).

[55] Given these complexities, it would have been difficult for the owners, looking at the first offer on its face, to understand whether there was a compromise, and exactly what settlement it would be accepting. The first offer was therefore not a serious and genuine offer. In any event, I also note that the first offer did not appear to comply with O 22A r 9(1)(a) as it would have expired on 1 July 1997, months before the disposal of the claim.

[57] Additionally, and perhaps more importantly, I would also highlight the following aspect of the present case which distinguishes it from The Endurance 1. Unlike The Endurance 1, the action in this case was bifurcated into separate trials for liability and assessment of damages. The Respondent’s OTS was issued on 4 July 2011, in between the first and second tranches of the trial on liability. When the Respondent’s OTS was issued, it was clear that the issues of liability and damages would be heard in separate trials. Hence, unlike the situation in The Endurance 1, at the time the Respondent made its OTS, there were separate and distinct proceedings (being the trial on liability and the appeal thereupon (if any)) which were capable of being settled entirely.

[58] On the other hand, the action in The Endurance 1 was not bifurcated into separate trials for liability and assessment of damages. Hence, the offers to settle, which dealt only with liability and still required damages to be assessed for both claims for breach of charterparty and wrongful conversion, if accepted, would have only have disposed of a part of the trial in which a substantial portion would be taken up by the assessment of damages. In such a situation, it would be incongruous to allow such offers which dealt only with liability to be seen to be serious and genuine.

(a) the offer must not have been withdrawn or the time limit for acceptance must not have expired before the disposal of the claim in respect of which the offer is made;

(b) the plaintiff must not have accepted the offer; and

(c) the plaintiff must have obtained judgment not more favourable than the terms of the offer.

[63] It is not in dispute that the first two pre-conditions above were satisfied. On the last pre-condition, the Appellant argued that because O 22A r 9(4)(a) provides that the interest awarded in respect of the period before the service of the offer to settle is to be considered by the court in determining whether the judgment obtained by the plaintiff is more favourable, this goes towards showing that the court is obliged to consider the “dollar value” of what has been awarded. Since the Respondent’s OTS was made in percentage terms, the Appellant’s argument was that no comparison can be made.

[64] In my judgment, it is clear that the Appellant has obtained a judgment, whether on appeal or at first instance, which was not more favourable than the terms of the OTS. The Appellant’s objections have been addressed above and no more need be said on it.

[66] The Appellant cited para 22A/1/2 of Singapore Civil Procedure 2015 and the case of Niagara Structural Steel (St. Catherines) Ltd v WD Laflamme Ltd [1987] OJ No 2239 (“Niagara”) to argue that O 22A does not apply to appeals. This commentary and case however, deals with the issue of whether an offer to settle may be made pending an appeal. With respect to the learned counsel, this is not the issue in the present case.

[68] The District Judge at [42]–[43] of the Judgment held that as the issue of liability was only finally disposed of when the appeal was heard in the High Court, the OTS made when the trial on liability was pending remained valid and capable of acceptance until the appeal was full dealt with. Also, since the Respondent’s OTS did not specify an expiry date, it remained open for the Appellant to accept even up to the hearing before the High Court.

[72] In the recent case of Ong & Ong (CA), the Court of Appeal interpreted the term “disposal of the matter” to mean 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]–[55]). Given that the offer in that case was made for both the claims of the appellant and the counterclaim of the respondent, the fact that the counterclaim was no longer a live issue did not mean that the entire matter was disposed of (at [57]–[61]). In this regard, it was implicit in the judgment that the counterclaim had only been “disposed of” when the time limit for its appeal had expired. This is also in line with the approach of the Court of Appeal in Compaq Computer Asia and Man B&W Diesel.

[73] The reasoning in the above cases in interpreting the phrase “disposal of the claim” to mean final disposal on appeal, implies that an offer to settle made by a defendant would still be open for acceptance even after judgment at first instance has been rendered. The decision in Ong & Ong (CA) also appears to suggest that even if no appeal is filed, a party may still accept an offer to settle so long as the time limit for appealing has not expired. As stated by the Court of Appeal in Ong & Ong (CA), any prejudice to the offeror may be mitigated in two ways (at [56]):

[74] In the present case, the issue is not complicated, as at both first instance and on appeal, the Appellant did not obtain a judgment more favourable than the terms of the Respondent’s OTS. It appears therefore to be a straightforward case in which O 22A r 9(3) could apply.

[80] The District Judge found that the Respondent’s OTS was a serious, genuine and reasonable offer. There did not seem to be anything exceptional in the present case to justify a departure from the prima facie position under O 22A r 9(3). I agree. There was also no evidence before me pertaining to the issue of CDR; the Appellant submitted on the basis of bare assertions. I therefore do not rely on this.