Tay Eng Chuan v United Overseas Insurance Ltd

Judith Prakash J:

[1] On 3 February 2009, the applicant, Mr Tay Eng Chuan, acting in person, filed the originating summons herein. As stated in the summons he wanted orders:

(a) that the time limit of 28 days prescribed in Section 50(3) of the Arbitration Act (Cap 10) be declared to begin to run from the date when the Applicant Tay Eng Chuan is notified by the Arbitral Tribunal or the SIAC of the result of his request stated in his NOTICE dated 29 January 2009 served on the respondent, United Overseas Insurance Limited, and the Arbitral Tribunal and filed with the Registrar of SIAC requesting the Arbitral Tribunal to clarify and correct and to make additional award for the mistakes in the Arbitration Award pursuant to Rules 34 and 35 of the SIAC Domestic Arbitration Rules (2 Edition, 1 September 2002) and to Section 43 of the Arbitration Act (Cap 10);

(b) that the costs plus reasonable disbursements for this application to be fixed and ordered by this Honourable Court [to be in] the cause of an application or appeal under Sections 49 and 50 of the Arbitration Act to be made by the applicant in due course;

(c) that this Honourable Court to make any other appropriate orders or directions it deems fit for the Applicant to secure the chance of an application or appeal under Sections 49 and 50 of the Arbitration Act to be made by the Applicant in due course.

[2] Although the originating summons was entitled “Ex-parte Originating Summons”, the applicant was instructed to, and did, serve the summons on United Overseas Insurance Limited (“the respondent”). Thereafter, the respondent filed affidavits in response to the application and the same proceeded on an inter-partes basis. I dismissed the application after both parties had made fairly lengthy arguments. The applicant has since appealed.

[3] The applicant was the insured under five insurance policies issued by the respondent, a well known insurance company. The applicant had also taken out a policy (“the first policy”) with Overseas Union Insurance Limited (“OUI”). Subsequently, the respondent took over OUI and assumed liability under the first policy as well. All six policies contained arbitration clauses.

[4] On 12 November 2002, the applicant sustained an injury to his left eye. As a result of the injury, the applicant lost the lens in his left eye and thereafter lost sight in the normal vision range but could still see light peripherally. About two weeks after this unfortunate accident, the applicant made claims under the six insurance policies.

[5] The applicant’s claims under all six insurance policies were rejected by the respondent on 6 April 2004 on the grounds, inter alia, that the applicant had not disclosed material facts to the respondent and had intentionally caused his eye injury. On 12 November 2004, the applicant, as a litigant in person, commenced arbitration proceedings against the respondent in respect of his claims under the six policies. The arbitration proceedings were conducted by a tribunal (“the tribunal”) comprising a single arbitrator in accordance with the relevant arbitration agreements. The arbitration was conducted under the auspices of the Singapore International Arbitration Centre (“SIAC”).

[6] The tribunal issued its award on 18 December 2008. It allowed most of the applicant’s claims but dismissed certain claims. In summary, the tribunal’s findings were that:

(a) the claim under the first policy (a claim in the sum of $500,000) failed because the provisions of Condition 5 of the first policy required disclosure of other insurances effected against accident or incapacity during the course of the first policy as a condition precedent to the applicant’s right to sue and recover under the first policy and the applicant had failed to comply with Condition 5. The tribunal further found that the respondent had not waived compliance by the applicant with the provisions of Condition 5;

(b) the applicant was entitled to recover the sum of $500,000 for the loss of one eye under the second policy;

(c) the applicant was entitled to recover $125,000 for the permanent loss of sight in one eye under the third policy;

(d) the applicant was entitled to recover $5,000 for Accident Medical Reimbursement under the third policy;

(e) the applicant’s claim for $5,000 for UOB Credit Card Indemnity under the third policy failed because, in the opinion of the tribunal, the bodily injury suffered by the applicant did not result in “Accidental Death or Permanent Disablement” within the meaning of this wording in the policy and therefore no liability under this head of claim attached;

(f) the applicant was entitled to recover $110,000 for loss of one eye under the fourth policy;

(g) the applicant’s claim for Free Family Income Benefit under the fourth policy failed because such benefit was payable only in the event of “Accidental Death or Accidental Permanent Total Disability” and in the opinion of the tribunal, the injury to the applicant did not fall within either of those categories;

(h) the applicant was entitled to recover $5,500 for Daily Hospital Cash Benefit under the fifth policy;

(i) the applicant was entitled to recover $4,000 for Medical Reimbursement under the fifth policy; and

(j) the applicant was entitled to recover $5,000 for Surgery Indemnity under the sixth policy.

In total, therefore, the tribunal awarded $754,500 to the applicant. It also ordered that the respondent was to pay interest on the award and that the costs of the arbitration be paid as to 25% thereof by the applicant and 75% thereof by the respondent and that if either party had paid more than that party’s share, that party would be entitled to recover the excess from the other party.

[9] On 23 January 2009, the respondent sent the applicant two cheques. The first was for $749,500 and the second was for $5,000 making a total of $754,500. The respondent paid the applicant a further sum of $126,827.40 as interest on 29 January 2009.

[10] On 29 January 2009, the applicant himself served a Notice for Interpretation, Correction and Additional Award (“the Notice”) pursuant to s 43 of the Act. By the Notice, the applicant requested the tribunal to clarify and correct and make an additional award for what he considered were “mistakes” in the award. The corrections that the applicant asked the tribunal to make were as follows:

The “Respondent’s financial position” in Para 165 should be corrected to “the Claimant’s financial position”.

The “Claimant’s 4 ground of defence” in Para 183 should be corrected to the “Respondent’s 4 ground of defence”.

Paras 52 and 53 of the Final Award should be corrected to allow the Applicant’s claim against the 1 policy.

Para 172 of the Final Award should be corrected to allow the Applicant’s claim of S$5,000 for UOB Credit Card Indemnity under the 3 Policy.

Para 174 of the Final Award should be corrected to allow the Applicant’s claim of S$12,000 for Family Income Benefit under the 4 Policy.

An additional award for costs to compensate the Applicant for his time expended in the arbitration.

[12] The next development was the filing of this application on 3 February 2009. It was originally fixed for hearing on Monday, 23 February 2009.

[13] In the meantime, on 10 February 2009, the applicant was informed of the outcome of his Notice which did not alter the previous award in any substantive aspect. The tribunal only allowed two out of the applicant’s six requests for correction and amendment ie the first two of the same.

[14] As stated, the application was made pursuant to s 43 of the Act. Sub-sections 43(1) and (3) of the Act provide:

[15] The effect of an award and of an application under s 43 of the Act is set out in s 44 thereof which provides, inter alia:

[16] It appears plainly from ss 43 and 44 read together that an award once made is final and may not be varied, amended or corrected or added to thereafter except in accordance with s 43. When it comes to correcting an award, a party is only entitled under s 43(1)(a) to ask the arbitrator to correct an error in computation, a typographical or clerical error or an error of similar nature. The procedure provided under this sub-section is to allow for the correction of obvious errors in calculation or phraseology or reference. It does not function as a procedure which allows the arbitrator to correct mistakes in his findings whether those mistakes are mistakes of fact or mistakes of law. If a party to an arbitration considers that such a mistake has been made, then he may challenge the award by using any available arbitral process of appeal or review which is provided by the Act (see sub-s 44(4)).

[17] In the present case, out of the six items listed for clarification and/or correction in the Notice, only two pertained to clerical slips such as the respondent being wrongly referred as the claimant in the arbitration. The other four “clarifications and/or corrections” asked for were directed at the substantive findings of the tribunal which the applicant had taken issue with and wanted corrected. The applicant put his request to the arbitrator as a request for correction. He did not ask for an interpretation of the award, a matter in respect of which he would have needed the consent of the respondent. Nor did he ask for the making of an additional award under s 43(4).

[18] It appeared to me that the appropriate channel for the applicant to seek redress in respect of his grievances for those four matters was the appeal process and not via a “correction” of the award. As s 43(1)(a) of the Act clearly shows, only technical and non-substantive errors are open to correction. The respondent also highlighted that R 34 of the SIAC Domestic Arbitration Rules was consistent with this position as it too prescribed correction for only computational and clerical errors.

[19] The SIAC Rules 2007 (3 Ed, 1 July 2007) (“SIAC Rules 2007”) have since replaced the SIAC Domestic Arbitration Rules and R 34 of the latter has been reincarnated as R 28.1 of the SIAC Rules 2007. Rule 28.1 provides that:

It thus cannot be gainsaid that correction of an arbitral award whether under s 43 or under the SIAC Rules 2007 is confined only to technical errors.

[20] The applicant argued that the time limit of 28 days from the date of the award (a period that expired on 20 January 2009) did not apply to him because of the operation of s 50(3) of the Act. This states:

The applicant argued that that what he had done was to apply for a review of the award and that therefore time would run from 10 February 2009 when he was informed of the outcome of the Notice. He contended that a “correction award [was] necessary” because “NO (sic) part in the Award” mentioned whether his claims were within the respective policies’ scope of cover or whether the respondent’s defence that his claims fell outside the scope of cover had failed. This omission to state explicitly whether his claims were within the ambit of cover led to ambiguity in the award which, the applicant asserted, had to be clarified before he could appeal against the award.

[21] The applicant cited the authorities of AHT v Tradigrain [2002] 2 Lloyd’s Rep 525 and Blackdale Ltd v Mclean Homes South East Ltd (TCC Nov 2, 2001, unreported) (“Blackdale Ltd”) in support of his arguments, extracting a quote from the former judgment that:

[22] Shorn of its context, the above quotation would support the applicant’s position that time should run from the date the award was corrected instead of the original date. However, it appeared to me that Judge Humphrey Lloyd, Q.C. in Blackdale was making his observations in the context of a situation in which substantive changes were being made to an award. Indeed, as Judge Humphrey Lloyd, Q.C pointed out at [19] of his judgment, s 57 of the English Arbitration Act 1996 was “dealing not merely with slips and other such mistakes but with substantive clarifications and the removal of ambiguities, both of which are likely to be of potential importance if required…the change might affect the substance. The date of an award, if corrected, must be the date of the corrected award.” In the paragraph preceding that observation, he had also stated that parties had to know exactly what their position was and have any uncertainties resolved before they could decide whether to appeal against an arbitral award or to resist such an appeal.

[23] Given that the amended award only corrected clerical errors and it was not possible under s 43(1)(a) to correct more than clerical or similar errors, the force of Judge Humphrey Lloyd Q.C’s reasoning in Blackdale did not apply in this instance. This was also because I did not accept that there was such ambiguity in the award that the applicant did not know exactly where he stood. Simply because the tribunal had not expressly articulated whether the claims fell within or outside the policies did not give rise to ambiguity which affected the applicant’s position. If there had been such ambiguity as the applicant alleged, he was free to ask for an interpretation of the award under section 43(b) of the Act. To my mind, it was obvious from the tribunal’s decision what its views were as to the coverage of the policies. The applicant is an educated and intelligent litigant and would have appreciated fully his position under the tribunal’s decision. I noted too, that the applicant was no stranger to arbitration proceedings and was acquainted with the various procedures in such proceedings. I found that from an objective standpoint, there was no inherent ambiguity in the award that could have caused genuine confusion and further, there was no real confusion that was actually created in the applicant’s mind. In my judgment, bearing in mind the different legislative provisions in Singapore, s 50(3) cannot be read as referring to an application for correction under s 43(1)(a) of the Act when it refers to an “arbitral process of appeal or review”. It may be referring to a process of interpretation under s 43(1)(b) of the Act or to a request for an additional award under s 43(4) in respect of claims presented during the arbitration proceedings but omitted from the award. I express no concluded view on this.

[24] In view of the relevant legislative provisions and for the reasons I have set out above, the applicant’s application for a declaration that the time limit of 28 days prescribed in s 50(3) in the Act (ie the time within which an application for leave to appeal against an arbitration award has to be made) was misconceived and doomed to fail. I had no choice but to dismiss it. It was, however, clear that the applicant had filed this application as a way of obtaining an extension of time for leave to appeal. I therefore thought it appropriate to consider whether there was a basis for giving him such an extension quite independently of s 43 of the Act.

[25] Finality is of paramount importance in arbitration proceedings as the Court of Appeal observed at [32] of Hong Huat Development Co (Pte) Ltd v Hiap Hong & Co Pte Ltd [2000] 2 SLR 609 (“Hong Huat”). Endorsing the remarks of Hobhouse J in The Faith; International Petroleum Refining & Supply Sdad v Elpis Finance [1993] 2 Lloyd’s Rep 408, the court cited from the latter:

And the court continued to note at [33] of its judgment that:

[26] Evidently, the principle of finality is to be upheld and should not be compromised, at least not without compelling reasons. Pearson v Chan Chien Wan Edwin [1991] SLR 212 identifies the general principles governing the exercise of discretion in deciding whether an extension of time should be granted: (a) the length of the delay; (b) reasons for the delay; (c) the prospects of success if time for appealing was extended and (d) the degree of prejudice to the other party if the application was granted.

[27] The applicant filed this application on 3 February 2009. This was 14 days after his time for filing an application for leave to appeal had expired. Whilst the application was not, in form, an application for an extension of time, in substance it could be looked in that light bearing in mind that the third prayer of the application asked the court to make appropriate orders so that the applicant could secure the chance of an application for leave to appeal under s 49 of the Act. On that basis, I was willing to treat the length of the delay for purposes of appeal as being 14 days.

[28] In Denko-HLB Sdn Bhd v Fagerdala Singapore Pte Ltd [2002] 3 SLR 357 (“Denko”), the Court of Appeal found that a 14-days’ delay was “quite substantial” bearing in mind that Denko had seven days to file an application. In the present case, the applicant had 28 days to file his application, but only did so 14 days after his right had expired. The applicant having had a longer period to make his application on the face of it, a delay of 14 days appeared more serious and therefore I considered that his grounds needed to be strong to persuade the court to show him indulgence.

[29] Many reasons were listed by the applicant for his delay. He remarked that the award was made only 19 months after the arbitration hearing in May 2007, and he needed time to review the award and to recall the evidence. Additionally, he had sought the counsel of many people in order to formulate the right questions of law which had been a time-consuming process especially when many “confusing” views were given to him. Further, he had been troubled by the “ambiguity” at paragraph 183 of the award which had referred to the respondent wrongly as the “Claimant” (ie the applicant) and wanted to clarify the award before lodging an appeal. Most importantly, the applicant averred, was that he had had a hearing before Tay Yong Kwang J on 20 and 21 January 2009 in relation to his claim against one ACE Insurance Ltd (“ACE”). Therefore from 15 to 19 January 2009, “most of [his] time was expended” in preparing his cross-examination of the court expert in that case and formulating his closing submissions to be presented on 21 January 2009. It was only on the following day (ie 22 January 2009), “after a good night sleep” [sic] that he was able to focus his efforts and energies on reviewing the award and formulating the questions of law for the appeal against the award.

[30] As a result of the above factors, the applicant asserted that it was “impossible” for him to file his application in time, ie by 20 January 2009. Similarly, it was “impossible” for him to file the application when he only had five days from the day he collected the award on 15 January 2009, in which to do so.

[31] The most important reason for the delay, according to the applicant, was that he had been preparing the case before Justice Tay and that it was thus “impossible” for him to comply with the deadline. I think this was an overstatement of the state of affairs existing at that point in time. Whilst the applicant did have his obligations in relation to the ACE case, he had found the time to take steps to enforce the award against the respondent. The facts are stated in [8] above. He not only made written demands on the respondent but filed a court application for enforcement.

[32] It thus appeared to me that far from being wholly immersed and absorbed in preparing his case before Justice Tay so that he neglected the deadline for his application for leave to appeal, the applicant was actually quite capable of “multi-tasking” and dealing with the award as well.

[33] I would add that it was most unclear to me what exactly the applicant meant when he asserted it was “impossible” for him to file his application just in time on 20 January 2009. Did he mean that he was so preoccupied with the matter before Justice Tay that it was “impossible” for him to be conscious of the looming deadline, i.e. he simply forgot all about it? Or did he mean that he was so busy with the matter before Justice Tay that it was “impossible” for him to simultaneously give his attention to this application for leave to appeal?

[34] Given the tenor of the applicant’s submissions, I was inclined to adopt the latter interpretation. Indeed, there had been no allusion to him being careless and inadvertent in not complying with the deadline. He had not pleaded that he was so mentally or physically exhausted from the preparation of his case that the deadline completely slipped his mind. Rather, his pleaded case seemed to be that he was engaged in another matter, and had to give it his fullest attention because he had to “prepare it well.” As such, I was of the view that the applicant might have deliberately turned a blind eye to the deadline, labouring under the false impression that he would be able to obtain an extension. Alternatively, the applicant may not have made himself aware of the deadline, and had simply chosen to place this matter on the backburner whilst he sorted out the seemingly more pressing and urgent matter before Justice Tay. If so, then the applicant was pursuing a reckless course. Between forgetting the deadline and neglecting it altogether, I find that the latter attracts greater opprobrium, though for the purpose of clarity, I would state that both situations are unmeritorious, unless some mitigating factor(s) can be furnished to show why an applicant may have forgotten the deadline.

[36] The other reasons furnished by the applicant were that he had to spend much time recalling the evidence and consolidating the various (conflicting) legal opinions. This reason was unconvincing in view of the correspondence shown to me by the respondent which indicated that throughout 2007 and 2008 the applicant was, as contended by the respondent, on top of his own case. The stronger reason was that he needed time to take advice and formulate questions of law. This reason might have explained why he was not able to file the application by 20 January 2009 but it did not explain why he had not formulated the questions of law by 3 February 2009 or even by the first substantive hearing date which was 26 February 2009. By then there would have been more than sufficient time to get the relevant advice.

[37] The applicant did not give any reason why during the period between 22 January 2009 when he had completed the ACE case and 3 February 2009 when he filed this application, he did not consider filing an application for an extension of time. During that period, he appears to have concentrated on preparing the Notice and the present application. It seemed to me possible that the applicant had resorted to the Notice and the procedure under s 43 as a means of lengthening the time granted to file an application for leave to appeal rather than having genuinely considered that the award required correction before he could consider whether there were questions of law upon which an appeal could be launched. In relation to this point, I found helpful the following observations of Judge Humphrey Lloyd QC in the English case of Gbanbola v Smith & Sheriff Ltd [1988] 3 All ER 730 (“Gbanbola”) (at 736-7):

[38] This passage underscores the futility of the applicant’s argument that the award was ambiguous and that he needed to seek clarification before applying for leave to appeal against it. As I explained above, these “ambiguities” were mere clerical ones; I did not even think they could give rise to any genuine confusion on the applicant’s part because there was no material ambiguity to begin with. The applicant’s conduct described in [37] smacked of opportunism and a desire to avoid the weight of having to establish extenuating circumstances which he would have incurred had he immediately filed an application for an extension of time.

[39] I thus found that the delay was substantial, and that while there were circumstances that would have attracted the court’s sympathy, the applicant by his own conduct had, to a large extent, dissipated that sympathy. I might, however, still have considered the applicant’s position favourably had I been more persuaded of his chances of succeeding in an application for leave to appeal.

[40] In Lee Hsien Loong v Singapore Democratic Party and Others and Another Suit [2008] 1 SLR 757 (“Lee Hsien Loong”) at [19], the court observed that this particular limb is:

[41] Taking the issue in the context of arbitration proceedings what I had to consider was not whether the appeal itself would be hopeless but whether the application for leave to appeal could be said to be “hopeless”.

[42] Section 49 of the Act provides that:

[43] The applicant’s proposed appeal pertains to the insurance benefits under the first, third and fourth policies. In dismissing the applicant’s $500,000 claim under the first policy, the tribunal found as a matter of fact, that there had been no unequivocal communication of a waiver by the respondent to the applicant that the first policy was still in force despite the applicant’s failure to make a certain material disclosure to the respondent. It had been the applicant’s contention that even though he did not disclose the fact that he had other insurance polices, by sending a medical expert to examine him, the respondent had by its conduct unequivocally waived its rights under the policy to render the policy ab initio. This argument did not impress the tribunal. It considered that, as an insurer, the respondent was “always entitled to investigate a claim as fully and thoroughly as the circumstances of the claim warrant”.

[44] As for the third policy, the tribunal made a finding that there was no liability on the respondent’s part to pay the applicant $5,000 as the injury sustained by the applicant did not result in “Accidental Death or Permanent Disablement” as required under the policy. The fourth policy concerned a Family Income Benefit amounting to $12,000 which claim the tribunal denied because it found that the applicant had not suffered an “Accidental Death or Accidental Permanent Total Disability” as required under the fourth policy.

[45] Dealing first with the situation in relation to the first policy, the findings of the tribunal were evidently concerned with fact, not law. The applicant did not formulate any question of law for the court to consider but considering the award and the law as best I could it appeared to me that, prima facie, there was no “question of law” for a court to determine pursuant to s 49 of the Act. A “question of law” was defined in Ahong Construction (S) Pte Ltd v United Boulevard Pte Ltd [2000] 1 SLR 749 wherein GP Selvam J said at [7] that:

[46] Approving the above passage in Northern Elevator Manufacturing Sdn Bhd v United Engineers (Singapore) Pte Ltd (No 2) [2004] 2 SLR 494 at [19], the Court of Appeal noted that:

[47] In this case, even if the tribunal’s finding that there was no waiver was a finding of mixed fact and law, there was no disputed finding of law that required the guidance of the court. At the most, there would have been an incorrect application of an established principle of law, the legal principles relating to waiver being well established and non-controversial. As such, I could not find in relation to the first policy “a question of law” within the definition in Northern Elevator upon which an appeal could be launched. To me, therefore, an application for leave to appeal in relation to the findings of the tribunal on the first policy appeared hopeless.

[48] In respect of the third and fourth policies, however, it appeared to me that there would be questions of law involved as to the correct construction of the terms of the policies concerned ie as to whether these terms properly construed covered the injury sustained by the applicant so as to make the respondent liable to meet his claims hereunder. In fact, I would go so far as to say that it appeared to me that the tribunal had misconstrued the policies and, therefore, its decisions on these two claims were open to serious doubt. Notwithstanding that conclusion there was still a serious obstacle in the way of the applicant. As stated in ss 49(5)(a), the issue raised must, inter alia, “substantially affect the rights of one or more of the parties”.

[49] In Permasteelisa Pacific Holdings Ltd v Hyundai Engineering and Construction Co Ltd [2005] 2 SLR 270 at [13], I observed that:

[50] What does “substantially affect the rights” mean then? At [51] of Hong Huat, the Court of Appeal adopted the interpretation of the English Court of Appeal in Pioneer Shipping Pte Ltd v BTP Tioxide Ltd [1980] QB 547 (The Nema) at 564, where Lord Denning Mr found that the phrase “substantially affect the rights’ meant that the point of law must be a “point of practical importance – not an academic point – nor a minor point” [emphasis added].

[52] Should leave be granted, what prejudice will respondent suffer? This was the relevant question to be asked in considering the fourth factor ([24] of Lee Hsien Loong). The respondent argued that “it would be prejudicial to [its] interests if the applicant were granted an extension of time to file his appeal and [it] is denied the opportunity of doing so” but failed to elaborate further.

[53] At [25] of Lee Hsien Loong, the Court of Appeal stated that such “prejudice alleged must be tangibly proven”. Pertinently, it went on to cite the following observation in the case of Aberdeen Asset Management Asia Ltd [2001] 4 SLR 441:

[54] In the present case, the respondent had not identified the prejudice it would suffer should an appeal be allowed, much less tangibly proved that such prejudice would indeed be suffered. This factor therefore did not assist the respondent.

[55] Having weighed the factors and found that any application for leave to appeal against the award would be hopeless, I considered that even if the application could be viewed as an application for an extension of time in which to file an application for leave, it could not succeed. Accordingly, treating the application on this basis would not assist the applicant and there was no basis on which I could make any order save an order dismissing the application.