Case Summaries

Tecnomar & Associates Pte Ltd v SBM Offshore NV

SUPREME COURT OF SINGAPORE

13April 2021

Case summary

Tecnomar & Associates Pte Ltd v SBM Offshore NV[2021] SCGA 36
Civil Appeal No 152 of 2020

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Decision of the Court of Appeal (delivered by Steven Chong JCA):

Outcome: The Court of Appeal upholds the High Court’s decision to set aside an order granting leave to serve out of jurisdiction (the “Service Order”), as well as the service of the Writ of Summons (the “Writ”) and Statement of Claim (the “SOC”) duly served pursuant to the Service Order.

Pertinent and significant points of the judgment

  • The applicant in an ex parte application is subject to a duty of full and frank disclosure, a duty that is owed to the Court. Such duty invariably extends to facts that may go towards rebutting the applicant’s claim. The applicant may well disagree with its opponent’s case, but it remains obligatory, and indeed incumbent on it, to candidly disclose all such information. Only then may a Court be able to properly deliberate, with the benefit of the holistic evidence placed before it. When non-disclosure is deliberate, it must be a special case for the court to exercise its discretion not to discharge the ex parte order.
  • The Court will not hesitate to order costs on an indemnity basis in the face of unreasonable conduct by litigants who evince a flagrant disregard of their duty of full and frank disclosure owed to the Court. The existence of an appeal mechanism as of right should not be interpreted as giving litigants (and counsel) carte blanche to pursue arguments that are wholly unmeritorious, devoid of any legal and factual basis.

Background

1 On 10 September 2019, the appellant commenced Suit No 897 of 2019 (the “Suit”) against the respondent, a company incorporated in the Netherlands for breach of contract. The appellant alleged that it had entered into a contract with the respondent to provide decontamination, cleaning and preparation services for a vessel known as the “Yetagun FSO” (the “Vessel”) for “Green Ship” recycling, such contract having been concluded by way of a quotation that its representative, Mr Paul Hopkins (“Mr Hopkins”) had sent  to the respondent on 10 April 2018 (the “10 April Quote”) and the respondent’s subsequent reply on 17 April 2018 (the “17 April Email”) by a Units Operation Manager for the Vessel, Ms Carolina Fonzar dos Santos (“Ms Fonzar”). The respondent’s position was that no such contract had been concluded with the appellant and that the contract had instead been concluded between the appellant and the respondent’s subsidiary, an entity known as South East Shipping Co Ltd (“SES”), the owner of the Vessel.

2 On 10 October 2019, the appellant sought leave to serve the Writ and SOC out of jurisdiction (the “Leave Application”). On 11 October 2019, the Leave Application was heard ex parte and the Court subsequently granted the Service Order. On 30 October 2019, the appellant duly served the Writ and SOC on the respondent at its registered office in the Netherlands. 

3 On 18 November 2019, after having entered appearance in the Suit, the respondent applied for the Service Order to be discharged and for the service of the Writ and SOC to be set aside, on the basis that there was no full and frank disclosure in the appellant’s affidavit in support of the Leave Application.           

4 On 29 July 2020, the learned Assistant Registrar (the “AR”) granted the respondent’s application and exercised her discretion to set aside the Service Order as well as the service of the Writ and SOC, on the basis that there had been non-disclosure of material facts by the appellant in its Leave Application and that the appellant had failed to demonstrate that it had “the better of the argument” that it had contracted with the respondent. The appellant appealed against the AR’s decision.

5 On 25 August 2020, the High Court Judge (the “Judge”) dismissed the appellant’s appeal against the AR’s decision. Dissatisfied, the appellant appealed against the Judge’s decision.

The Court of Appeal’s decision

Whether there was material non-disclosure in the appellant’s Leave Application

6 The appellant’s reliance on a statement made by the respondent’s representative, Mr Thomas Chapman (“Mr Chapman”) in his affidavit, to argue that the respondent had made an admission as to the existence of the contract, was misguided. First, Mr Chapman’s affidavit was filed after the Leave Application was heard. Second, the extract cited by the appellant did not amount to any admission and was simply a woeful mischaracterisation of the statement in the affidavit. There was material non-disclosure by the appellant in its Leave Application as none of the documents disclosed therein contained any reference to SES or alluded to any hint that the appellant had not contracted with the respondent but with SES instead. This was notwithstanding the fact that this was an argument that had already been raised by the respondent’s and SES’s solicitors in a response to a Notice of Arbitration that had been filed by the appellant, an arbitration that was subsequently aborted. Such documents making reference to SES were all materials that would have been very relevant to the Court in arriving at its decision whether to grant the Service Order, as it concerned the most basic element of any contractual claim, ie, the identities of the contracting parties (at [14]to [16]).

7 This was not just a textbook case of non-disclosure, but also a paradigmatic case of deliberate and systematic non-disclosure, aimed at omitting any trace of SES whatsoever. This was not a case of mere inadvertence as there was a complete and conspicuous absence of any reference to SES. In short, this was a case of wilful suppression of material facts (at [18]and [19]).

Whether the appellant had a good arguable case

8 The appellant had no good arguable case that it had in fact entered into a contract with the respondent on the terms of the 10 April Quote; it did not have a good arguable case that it had any contract with the respondent. First, the Judge had not erred in considering correspondence after the 17 April Email as he was merely relying on the objective evidence of the parties’ correspondence and conduct to infer what the parties’ objective intention must have been at the time when the 10 April Quote and the 17 April Email were sent. Second, on whatever interpretation that the parties may seek to ascribe to the 10 April Quote and the 17 April Email, it is clear that both parties contemplated and in fact agreed that a purchase order (the “PO”) would be issued for the provision of the appellant’s services. After the issuance of the PO by SES to the appellant, the parties acted on the basis that the PO would form the governing contractual document and further, that SES, as the owner of the Vessel was the contracting party. Finally, the Suit was triggered by the sale of the Vessel and the appellant’s reaction to the sale, stating that the “change of ownership does not absolve SES of accrued liability” meant that the appellant had itself recognised that it had contracted with SES which was the reason why it claimed it could look to SES for the “accrued liability” (at [20]to [24]).

Costs and further observations

9 This was an appropriate case to award costs against the appellant on an indemnity basis. The conduct of the appellant throughout the course of the proceedings was shocking, troubling and unreasonable to say the least and was antithetical to the rationale underlying the duty of full and frank disclosure in an ex parte application. The appellant had not proffered any satisfactory explanation for the non-disclosure, apart from a perfunctory assertion that it was not deliberate. The deliberate non-disclosure gave the Court hearing the Leave Application the misleading impression that it was undisputed that the appellant had entered into a contract with the respondent when the appellant knew that this was challenged by the respondent. In addition, the appellant made increasingly disingenuous arguments as it became apparent that it had no real arguable case on the facts (at [26] to [28]).

10 The Court will not hesitate to order costs on an indemnity basis in the face of such unreasonable conduct by litigants who evidence a flagrant disregard of their duty of full and frank disclosure owed to the Court. Such duty should not and cannot be breached with impunity. In the same vein, the existence of an appeal mechanism as of right merely provides the opportunity to pursue a matter further. This, however, should not be interpreted as giving litigants (and counsel) carte blanche to pursue arguments that are wholly unmeritorious, devoid of any legal and factual basis. The Court was concerned that the appellant’s counsel might be responsible for the non-disclosure, the full extent of which, if any, would be addressed separately (at [29] and [31]).

 

This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.

 

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