JTJB LEGAL UPDATE MAY 2017

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THE APPEAL OF A CLAIM BEYOND ORDINARY DAMAGES

The claim for disgorgement of profits and punitive, exemplary or aggravated damages

 JTJB acted for the successful party in Aries Telecoms (M) Bhd v ViewQwest Pte Ltd (Fiberail Sdn Bhd, third party) [2017] SGHC 124. The Court held that the Plaintiff failed to establish its claim for disgorgement of profits as it failed to prove that the facts justified the granting of such a relief even if the said relief was applicable in Singapore for the tort of conversion. The Court also decided that the Plaintiff was not entitled to punitive, exemplary or aggravated damages as its claim was also based on deliberate conduct by the Defendant.

The Plaintiff relied heavily on the suggestion made by Professor James Edelman that the said relief was an appropriate relief for wrongs committed deliberately and cynically where the tortfeasor had calculated that his gain would exceed the damage he might be liable for. The Plaintiff was prepared to proceed with the application on the basis that it had sufficient evidence to prove its entitlement to the relief. However, all that the Plaintiff could point to was that the Defendant was still using the equipment after the Plaintiff demanded for its return. The Plaintiff had the opportunity of presenting its evidence or to cross-examine the Defendant’s witnesses at the trial on this issue but the Plaintiff failed to do so.

The Court preferred the Defendant’s witness version of events and this was an important factor which the Court considered in deciding in favour of the Defendant.  Even though the Court did not definitively decide whether the relief of disgorgement of profits was applicable in Singapore for the tort of conversion, it appears that what the Plaintiff has presented the Court with is insufficient to meet the requisite standard for the relief of disgorgement of profits as suggested by Professor Edelman.

Dissatisfied with the Court’s decision, the Plaintiff appealed against the said decision. This gave rise to the decision of Aries Telecoms (M) Bhd v ViewQwest Pte Ltd (Fiberail Sdn Bhd, third party) [2017] SGHC 83.

What constitutes “an order at the hearing of an interlocutory application”?

 The Court considered the question in the context of para (e) of the Fifth Schedule of the Supreme Court of Judicature Act. The effect is that if an order was a final order (as opposed to an interlocutory order), then it would not come within para (e) and an appeal to the Court of Appeal was available as of right.

The Court was of the view that it does not necessarily follow that an order must dispose of the entire action to be considered a final order. Further, that a decision which affects the substantive rights of the parties on an issue in the action is still a final order even if it does not dismiss the entire action or cause judgment to be entered.

Accordingly, the Court held that an order for the determination of a preliminary issue in relation to whether the Plaintiff is entitled to an account of profits, disgorgement of profits, punitive, exemplary or aggravated damages is a final order as it effectively disposes of the Plaintiff’s substantive claim in the main action, even though damages have not been assessed.

Extension of time to file application for leave to appeal

 The Court held that if leave to appeal is required, the Plaintiff would have to file for an extension of time to apply for leave to appeal as its application for leave to appeal was late.

The factors to be considered as to whether an extension of time to appeal ought to be granted are the length of delay, reason for delay, chances of the intended appellant’s appeal succeeding on the merits, if extension of time were granted and the degree of prejudice to the intended respondent, if extension of time were granted.  The overall question is where the justice of the case lies. The Court did not see the need to address the aforestated factors individually and held that it was clear that the justice of the case lay in granting the extension of time as the Plaintiff’s substantive right was disposed of, the appeal was not obviously unmeritorious and it was understandable why the Plaintiff thought no leave to appeal was required.

Leave to appeal – a new test of substantive rights?

 Generally, leave to appeal will only be granted in one of the three situations where there is a prima facie case of law, a question of general principle or a question of importance upon which further argument and a decision of a higher tribunal would be to the public advantage.

The Court held that leave to appeal should be granted to the Plaintiff, if leave was required, as the Plaintiff’s substantive rights was affected. Notably, the Court reached its decision even though it agreed with the Defendant that the Plaintiff did not qualify for any of the 3 situations set out above.  It therefore seems like leave to appeal would be granted in a case where a party qualifies for one of the aforestated situations or simply where a party’s substantive rights were affected.

John-Sze Nicola-Loh
Contributed by:
John Sze / Nicola Loh
Deputy Managing Partner / Senior Associate
Johnsze@jtjb.com / nicolaloh@jtjb.com

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