Canberra Development v Mercurine: Setting Aside Default Judgment for Excessive Sum

In Canberra Development Pte Ltd v Mercurine Pte Ltd, the High Court of Singapore addressed Mercurine's application to set aside a default judgment obtained by Canberra for rental arrears. The court, presided over by Assistant Registrar Lim Jian Yi, found the default judgment irregular because Canberra had claimed an excessive sum. The court held that setting aside the judgment was appropriate as Mercurine had raised triable issues in its defense. The court also considered and rejected arguments related to delay and conduct subsequent to the judgment as reasons to deny Mercurine's application. The court ordered the default judgment to be set aside and will hear further submissions on ancillary matters.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Default Judgment set aside.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court set aside a default judgment against Mercurine for rental arrears, finding the judgment irregular due to an excessive sum claimed by Canberra.

1.7 Decision Date

27 June 2007

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Mercurine Pte Ltd	Defendant	Corporation	Application to set aside Default Judgment granted	Won	Kelvin Teo of Legal Solutions LLC Christopher Chong of Legal Solutions LLC
Canberra Development Pte Ltd	Plaintiff	Corporation	Default Judgment set aside	Lost	Lin Yan Yan of Drew & Napier LLC Harpreet Singh SC of Drew & Napier LLC

3. Judges

Judge Name	Title	Delivered Judgment
Lim Jian Yi	Assistant Registrar	Yes

4. Counsels

Counsel Name	Organization
Kelvin Teo	Legal Solutions LLC
Christopher Chong	Legal Solutions LLC
Lin Yan Yan	Drew & Napier LLC
Harpreet Singh SC	Drew & Napier LLC

4. Facts

Canberra and Mercurine entered into a lease agreement in February 2000.
Mercurine stopped paying rent in April 2003.
Canberra commenced a suit on 30 November 2005 seeking rental arrears and possession of the premises.
A default judgment was entered in favor of Canberra on 9 January 2006.
Mercurine applied to set aside the default judgment on 26 April 2007.
Mercurine claimed a set-off agreement for air-conditioning charges and movie gift passes.
Mercurine alleged a pay-later agreement for the balance after the set-off.

5. Formal Citations

Canberra Development Pte Ltd v Mercurine Pte Ltd, Suit 861/2005, SUM 1843/2007, [2007] SGHC 107

6. Timeline

Date	Event
2000-02-01	Canberra and Mercurine entered into an agreement for lease of premises.
2003-04-01	Mercurine stopped paying rent for the Premises.
2005-11-30	Canberra commenced suit against Mercurine.
2006-01-09	Judgment in default of appearance was entered in favor of Canberra.
2006-12-21	Mercurine filed Originating Summons No 2374 of 2006.
2007-02-02	Senior Assistant Registrar granted Mercurine’s application at first instance.
2007-03-29	Belinda Ang Saw Ean J reversed the Senior Assistant Registrar's decision.
2007-04-26	Mercurine applied to have the Default Judgment set aside.
2007-06-28	Judgment reserved.

7. Legal Issues

Setting Aside Irregular Judgment
- Outcome: The court held that the default judgment was irregular and should be set aside.
- Category: Procedural
- Sub-Issues:
  - Excessive judgment sum
  - Failure to produce required certificate
  - Claims falling outside Order 13 Rules of Court
- Related Cases:
  - [2007] SGHC 107
  - (1888) 20 QBD 764
  - [1985] AC 97
  - [1945] AC 271
  - [1962] AC 152
  - [2005] SGHC 106
  - [2000] 1 MLJ 479
  - [1996] 1 AMR 215
  - (1998) The Times, February 20
  - [1990] SLR 1230
  - [1996] 1 MLJ 223
  - [1988] SLR 594
  - [1986] 2 Lloyd’s Rep 221
  - [1995] 1 SLR 484
  - [1995] 3 SLR 137
  - [2002] 3 SLR 281
  - [2002] 4 SLR 838
  - [1997] 3 SLR 619
  - [2003] SGHC 173
  - [1993] 3 MLJ 503
  - [1991] 1 MLJ 55
  - [1987] 2 CLJ
  - [1996] 1 MLJ 30
  - [2000] 3 MLJ 364
  - [1913] 2 KB 412
Merits of Defence in Setting Aside Application
- Outcome: The court found that Mercurine's defense raised triable issues, making it inappropriate to deny the setting aside application.
- Category: Substantive
- Sub-Issues:
  - Set-off agreement
  - Pay-later agreement
- Related Cases:
  - [1986] 2 Lloyd’s Rep 221
  - [1995] 1 SLR 484
  - (1998) The Times, February 20
  - [1990] SLR 1230
Delay in Applying to Set Aside Judgment
- Outcome: The court held that the delay was not so inordinate as to preclude Mercurine from setting aside the judgment.
- Category: Procedural
- Related Cases:
  - [1997] 3 SLR 619
  - [2003] SGHC 173
  - [1993] 3 MLJ 503
  - [1991] 1 MLJ 55
  - [1987] 2 CLJ
  - [1996] 1 MLJ 30
  - [1913] 2 KB 412
  - [1996] 1 MLJ 223

8. Remedies Sought

Payment of Rental Arrears
Possession of the Premises
Damages
Interests
Costs

9. Cause of Actions

Recovery of Rental Arrears
Possession of Immovable Property

10. Practice Areas

Commercial Litigation
Setting Aside Default Judgment

11. Industries

Real Estate
Entertainment

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Anlaby v Praetorius	Queen's Bench Division	Yes	(1888) 20 QBD 764	England and Wales	Cited for the principle that an irregular judgment should be set aside ex debito justitiae.
Isaacs v Robertson	Privy Council	Yes	[1985] AC 97	United Kingdom	Cited to discuss the principle of setting aside orders ex debito justitiae.
Marsh v Marsh	House of Lords	Yes	[1945] AC 271	United Kingdom	Cited in relation to the interpretation of setting aside orders.
MacFoy v United Africa Co Ltd	Privy Council	Yes	[1962] AC 152	United Kingdom	Cited in relation to the interpretation of setting aside orders.
TR Networks Ltd and Others v Elixir Health Holdings Pte Ltd and Others	High Court	Yes	[2005] SGHC 106	Singapore	Cited to clarify that setting aside a judgment ex debito justitiae is the exercise of rights conferred and limited by the Rules of Court.
Tenaga Nasional Bhd v Prorak Sdn Bhd & Anor	Court of Appeal	Yes	[2000] 1 MLJ 479	Malaysia	Cited for the proposition that an irregular default judgment is liable to be set aside ex debito justitiae without reference to merits.
Tuan Haji Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd	Federal Court	Yes	[1996] 1 AMR 215	Malaysia	Cited for the definition of an irregular judgment and the conditions for setting it aside.
Faircharm Investments Ltd v Citibank International plc	Court of Appeal (Civil Division)	Yes	(1998) The Times, February 20	England and Wales	Cited for the proposition that setting aside an irregular judgment is no longer a matter of right and the courts have wide discretion.
Standard Chartered Bank v Chip Hong Machinery (S) Pte Ltd and Another	High Court	Yes	[1990] SLR 1230	Singapore	Cited for the principle that in exceptional cases, where setting aside a writ of possession would be an exercise in futility, the court ought not to act in vain.
Khor Cheng Wah v Sungai Way Leasing	Court of Appeal	Yes	[1996] 1 MLJ 223	Malaysia	Cited for the principle that after the coming into force of the Rules of the High Court 1980, the distinction between irregularities and nullities ceased to exist.
Philip Securities (Pte) v Yong Tet Miaw	High Court	Yes	[1988] SLR 594	Singapore	Cited for the principle that instead of setting aside an irregular judgment, a court may choose to vary it in the appropriate circumstances.
Alpine Bulk Transport v Saudi Eagle Shipping	Not specified	Yes	[1986] 2 Lloyd’s Rep 221	Not specified	Cited for the standard of defense required to set aside a regular judgment.
Abdul Gaffer v Chua Kwang Yong	Court of Appeal	Yes	[1995] 1 SLR 484	Singapore	Cited for the principle that to set aside a regular judgment, the defense must have a real prospect of success and carry some degree of conviction.
Panwell Investments v Lau Ee Theow	High Court	Yes	[1995] 3 SLR 137	Singapore	Cited for the interpretation of the word 'only' in Order 13 rr 1-4 of the Rules of Court.
CSR South East Asia Pte Ltd v Sunrise Insulation Pte Ltd	High Court	Yes	[2002] 3 SLR 281	Singapore	Cited for the principle that a judgment entered for an excessive sum was irregular and ought to be set aside ex debito justitiae.
Bayerische Landesbank Girozentrale v Dato Azlan bin Hashim	High Court	Yes	[2002] 4 SLR 838	Singapore	Cited for the power of the court to make amendments to reduce the judgment sum to the proper figure.
Ang Kim Soon v Sunray Marine Pte Ltd	High Court	Yes	[1997] 3 SLR 619	Singapore	Cited for the principle that delay is a relevant consideration for setting aside regular default judgments.
Lee Theng Wee v Tay Chor Teng	High Court	Yes	[2003] SGHC 173	Singapore	Cited for the principle that delay is a relevant consideration for setting aside regular default judgments.
Malayan Banking v Sykt Jaya Perkakas (Sabah)	High Court	Yes	[1993] 3 MLJ 503	Malaysia	Cited for the proposition that delay was irrelevant to whether an irregular judgment ought to be set aside.
United Malayan Banking Corp Bhd v Mideast Development Sdn Bhd & Ors	High Court	Yes	[1991] 1 MLJ 55	Malaysia	Cited for the proposition that delay was irrelevant to whether an irregular judgment ought to be set aside.
Taman Pangkor Sdn Bhd v Doric Development Sdn Bhd & 2 Ors	High Court	Yes	[1987] 2 CLJ	Malaysia	Cited for the proposition that delay was irrelevant to whether an irregular judgment ought to be set aside.
Tuan Haji Ahmed Abdul Rahman v Arab-Malaysian Finance	Federal Court	Yes	[1996] 1 MLJ 30	Malaysia	Cited for considering delay as a relevant factor in setting aside irregular judgments.
Lee Tain Tshing v Hong Leong Finance Bhd	Not specified	Yes	[2000] 3 MLJ 364	Malaysia	Cited for criticism of the use of the word 'nullity' to describe an irregular judgment.
Muir v Jenks	Court of Appeal	Yes	[1913] 2 KB 412	England and Wales	Cited for the principle that it is the duty of the creditor to correct a wrong judgment, not the debtor.

13. Applicable Rules

Rule Name
Order 13 of the Rules of Court
Order 2 Rule 2
Order 13 Rule 8
Order 19 Rule 9
Order 42 Rule 11
Order 13 Rule 1
Order 13 Rule 2
Order 13 Rule 3
Order 13 Rule 4
Order 13 Rule 5
Order 13 Rule 6
Order 13 Rule 4(1)
Order 83 Rule 1
Order 2 Rule 1

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Default Judgment
Irregular Judgment
Ex Debito Justitiae
Set-off Agreement
Pay-later Agreement
Rental Arrears
Movie Gift Vouchers
Air-conditioning Charges
Triable Issues
Delay
Compromise Agreement

15.2 Keywords

default judgment
setting aside
irregular judgment
rental arrears
Singapore
civil procedure

17. Areas of Law

Area Name	Relevance Score
Setting Aside Default Judgement	85
Irregular Judgment	75
Civil Procedure	70
Rules of court	65
Contract Law	60
Summary Judgement	50
Property Law	30

16. Subjects

Civil Procedure
Default Judgment
Setting Aside Judgment
Contract Law
Landlord and Tenant