Canberra Development v Mercurine: Setting Aside Default Judgment for Unpaid Rent and Possession

Canberra Development Pte Ltd, the plaintiff, appealed against the decision to set aside a default judgment obtained against Mercurine Pte Ltd, the defendant, for unpaid rent and possession of commercial units in Sun Plaza. The High Court allowed the appeal, reinstating the default judgment but varying the amount payable to $725,116.81, considering the defendant's delay in applying to set aside the judgment and the merits of the defense.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Allowed. The default judgment was reinstated but varied to reflect the adjusted amount payable.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding setting aside a default judgment for unpaid rent and possession. The court considered delay and defense merits.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Mercurine Pte LtdRespondent, DefendantCorporationJudgment Set AsideLost
Canberra Development Pte LtdAppellant, PlaintiffCorporationAppeal Allowed in PartPartial

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJusticeYes

4. Counsels

Counsel NameOrganization
Kelvin TeoLegal Solutions LLC
Christopher ChongLegal Solutions LLC
Harpreet Singh NehalDrew & Napier LLC
Lin Yan YanDrew & Napier LLC

4. Facts

  1. Plaintiff leased commercial units to the defendant in February 2000.
  2. Disputes arose regarding air-conditioning charges and movie gift passes.
  3. Defendant stopped paying rent in April 2003.
  4. Plaintiff commenced action against the defendant on 30 November 2005 for unpaid rent.
  5. Defendant did not enter an appearance, and default judgment was entered on 9 January 2006.
  6. Defendant found out about the default judgment on 16 January 2006.
  7. Defendant delayed applying to set aside the judgment until 26 April 2007.

5. Formal Citations

  1. Canberra Development Pte Ltd v Mercurine Pte Ltd, Suit 861/2005, RA 168/2007, [2007] SGHC 185

6. Timeline

DateEvent
Plaintiff leased units to the defendant.
Defendant took possession of the premises.
Defendant commenced paying rent.
Defendant stopped paying rent.
Plaintiff accepted defendant's repudiation of the lease.
Plaintiff commenced action against the defendant.
Defendant made a payment of $141,528.50 towards rent.
Plaintiff entered default judgment against the defendant.
Defendant found out about the default judgment.
Defendant paid the plaintiff $519,155.62.
Plaintiff's solicitors stated intention to enforce order for possession.
Defendant filed originating summons (OS 2374 of 2006).
Defendant granted declaration in OS 2374 of 2006.
Appeal allowed, order in favor of defendant set aside.
Defendant filed Summons-in-chambers No 1843 of 2007.
Defendant's summons heard before the Assistant Registrar.
Judgment reserved.

7. Legal Issues

  1. Setting Aside Default Judgment
    • Outcome: The court held that the default judgment should not have been set aside due to the defendant's delay and failure to demonstrate a defense that was not bound to fail.
    • Category: Procedural
    • Sub-Issues:
      • Irregular Default Judgment
      • Delay in Application
      • Meritorious Defence
    • Related Cases:
      • [1998], The Times, February 20
      • [1990] SLR 1230
      • [1986] 2 LLR 221
      • [1995] 1 SLR 484
  2. Breach of Contract
    • Outcome: The court found that the defendant had an arguable defense regarding the unpaid rent, but this was ultimately outweighed by the delay in applying to set aside the default judgment.
    • Category: Substantive
    • Sub-Issues:
      • Unpaid Rent
      • Repudiation of Lease
      • Right of Re-entry

8. Remedies Sought

  1. Possession of the Premises
  2. Monetary Damages
  3. Interest and Costs

9. Cause of Actions

  • Breach of Contract
  • Recovery of Possession

10. Practice Areas

  • Commercial Litigation
  • Real Estate Litigation

11. Industries

  • Real Estate
  • Entertainment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Tan Ewe Chong & Ors v Pribudi Sdn Bhd & OrsHigh CourtYes[1998] 5 MLJ 108MalaysiaThe court declined to set aside a wholly irregular judgment as the defendant had failed to show any sort of defence on the merits.
Faircharm Investments Ltd v Citibank International plcUK Court of AppealYes[1998], The Times, February 20EnglandThe court has a wide discretion to consider whether to set aside and are entitled to look at all circumstances including circumstances under which default judgment was allowed to be entered, the explanation for any delay in making the application and any other relevant matters, including whether there is a defence on the merits.
Standard Chartered Bank v Chip Hong Machinery (S) Pte Ltd and AnotherHigh CourtYes[1990] SLR 1230SingaporeCourts ought not to act in vain and therefore where it was clear that setting aside an irregularly obtained writ of possession would be an exercise in futility, such writ should not be set aside.
Alpine Bulk Transport v Saudi Eagle ShippingCourt of AppealYes[1986] 2 LLR 221England and WalesThe Assistant Registrar was of the view that if he had applied the test to evaluate the merits of a regular default judgment set out in Alpine Bulk Transport v Saudi Eagle Shipping to the present case, the defendant would not have succeeded in setting aside the default judgment.
Abdul Gaffer v Chua Kwang YongCourt of AppealYes[1995] 1 SLR 484SingaporeThe discretion to set aside judgment in default is exercised when the applicant has a defence with a real prospect of success and which carries some degree of conviction.
TR Networks Ltd v Elixir Health Holdings Pte LtdHigh CourtYes[2005] SGHC 106SingaporeUnder the Rules of Court, if a default judgment is found to be irregular and incapable of being corrected by varying it, then the defendant may have it set aside as a matter of right.
National Westminster Bank Ltd v HumphreyUK Court of AppealYes128 SJ 81England and WalesThe court may set aside the default judgment in whole or in part.
Kuah Kok Kim v Chong Lee Leong SengUnknownYes[1991] 2 MLJ 129MalaysiaThe breach of O 13 r 4(1) by not producing the certificate was not an error so fundamental or serious that the court ought not to exercise its discretion under r 1 to remedy it.
Philip Securities v Yong Tet MiawHigh CourtYes[1988] SLR 594SingaporeIn cases where the party had inadvertently entered the wrong sum in the default judgment, the courts had readily amended the judgment to reflect the correct sum.
Bayersiche Landesbank Girozentrale v Dato Azlan bin HashimHigh CourtYes[2002] 4 SLR 838SingaporeIn cases where the party had inadvertently entered the wrong sum in the default judgment, the courts had readily amended the judgment to reflect the correct sum.
Ang Kim Soon v Sunray MarineHigh CourtYes[1997] 3 SLR 619SingaporeInordinate delay in making the application may lead the court to believe that it is not bona fide or that the defendant is not serious or that he is irresponsible about the relief he seeks.
CSR South East Asia Pte Ltd v Sunrise Insulation Pte LtdHigh CourtYes[2002] 3 SLR 281SingaporeWhether the court exercises its discretion to set aside a judgment or not, depends on the circumstances before the court and the judge’s evaluation of those circumstances. There is nothing in the case that indicates that an irregular judgment cannot be amended.

13. Applicable Rules

Rule Name
Order 13 Rule 4(1) of the Rules of Court
Order 13 Rule 8 of the Rules of Court
Order 2 Rule 1 of the Rules of Court
Order 2 Rule 2 of the Rules of Court
Order 14 of the Rules of Court

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Default Judgment
  • Setting Aside
  • Irregular Judgment
  • Delay
  • Meritorious Defence
  • Pay Later Agreement
  • Repudiation
  • Re-entry
  • Compromise Agreement

15.2 Keywords

  • default judgment
  • setting aside
  • unpaid rent
  • possession
  • delay
  • meritorious defence

17. Areas of Law

Area NameRelevance Score
Civil Practice90
Judgments and Orders90
Breach of Contract50
Contract Law50
Property Law30

16. Subjects

  • Civil Procedure
  • Contract Law
  • Real Estate Law