Mercurine v Canberra: Setting Aside Default Judgment & Delay in Application

In Mercurine Pte Ltd v Canberra Development Pte Ltd, the Singapore Court of Appeal addressed the setting aside of a default judgment. Canberra sued Mercurine for unpaid rent and vacant possession. Mercurine failed to enter an appearance, and a default judgment was entered against it. Mercurine applied to set aside the default judgment, which was initially granted but later reversed on appeal due to delay. The Court of Appeal varied the Judge’s orders and held that the Default Judgment would be deemed to be set aside in the event that Mercurine succeeds in the Consolidated Suit.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal varied; Default Judgment deemed set aside if Mercurine succeeds in Consolidated Suit.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal addresses setting aside a default judgment, delay, and the merits of the defence in a rental dispute.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Mercurine Pte LtdAppellantCorporationAppeal Allowed in PartPartialChristopher Chong, Kelvin Teo
Canberra Development Pte LtdRespondentCorporationAppeal Dismissed in PartPartialHarpreet Singh Nehal, Kelly Fan, Lin Yan Yan

3. Judges

Judge NameTitleDelivered Judgment
Chan Sek KeongChief JusticeNo
Andrew Phang Boon LeongJustice of the Court of AppealNo
V K RajahJustice of the Court of AppealYes

4. Counsels

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

4. Facts

  1. Canberra owns Sun Plaza, a shopping mall.
  2. Mercurine claims to be the tenant of units in Sun Plaza.
  3. No written lease agreement was executed between the parties.
  4. Disagreements arose over the term of the Lease.
  5. Mercurine did not pay the contractual monthly rent between April 2003 and November 2005.
  6. Canberra commenced Suit 861 claiming unpaid rent and vacant possession.
  7. Mercurine failed to enter an appearance, and a Default Judgment was entered against it.

5. Formal Citations

  1. Mercurine Pte Ltd v Canberra Development Pte Ltd, CA 143/2007, [2008] SGCA 38

6. Timeline

DateEvent
Canberra issued letter of offer for lease to Mercurine.
Mercurine took possession of the Premises.
Canberra sent engrossed lease agreement to Mercurine.
Mercurine stopped paying contractual monthly rent.
Parties met to resolve differences; Mercurine claimed Set-Off Agreement was reached.
Parties met; Mercurine claimed Pay Later Agreement was affirmed.
Canberra commenced Suit 861 claiming unpaid rent and vacant possession.
Writ served on Mercurine.
Deadline for Mercurine to enter an appearance.
Default Judgment entered against Mercurine.
Mercurine learned of Default Judgment.
Canberra offered to withhold execution of Default Judgment.
Ms Goh replied stating Mercurine would pay if Default Judgment was withdrawn.
Canberra maintained Lease had been terminated.
Mercurine paid the Compromise Sum.
Canberra required Mercurine to deliver possession.
Ms Goh sent letter disputing Canberra's right to enforce Default Judgment.
Canberra denied it would withdraw Default Judgment upon payment.
Mercurine filed Originating Summons No 2374 of 2006.
Ms Goh sent letter disputing Canberra's right to enforce Default Judgment.
Senior assistant register granted declarations sought in OS 2374.
Belinda Ang J allowed Canberra’s appeal and ordered that OS 2374 be converted into a writ action.
Mercurine filed its statement of claim in respect of Suit 244.
Mercurine applied via SUM 1843 to set aside the Default Judgment.
Canberra filed its defence.
Mercurine commenced Suit 354.
Trial of Suit 244, consolidated with Suit 354 was set down.
Court of Appeal decision.
Trial of Consolidated Suit adjourned until 30 October 2008 to 7 November 2008.

7. Legal Issues

  1. Setting Aside Default Judgment
    • Outcome: The Court of Appeal clarified the applicable principles for setting aside a default judgment, emphasizing the importance of the Evans v Bartlam test for regular judgments and the ex debito justitiae rule for irregular judgments.
    • Category: Procedural
    • Sub-Issues:
      • Regularity of Default Judgment
      • Merits of Defence
      • Reason for Delay
    • Related Cases:
      • [1937] AC 473
      • [1986] 2 Lloyd’s Rep 221
  2. Delay in Application to Set Aside Default Judgment
    • Outcome: The Court of Appeal held that the delay should be assessed in the context of other prior and ongoing occurrences as well as the plausibility of Mercurine’s explanation for its delay.
    • Category: Procedural
    • Related Cases:
      • [2000] EWCA Civ 379
      • [1997] 3 SLR 619

8. Remedies Sought

  1. Monetary Damages
  2. Possession of Premises

9. Cause of Actions

  • Unpaid Rent
  • Claim for Vacant Possession

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Real Estate
  • Entertainment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Canberra Development Pte Ltd v Mercurine Pte LtdHigh CourtYes[2007] SGHC 107SingaporeCited for the decision of Assistant Registrar Lim Jian Yi to set aside the Default Judgment.
Canberra Development Pte Ltd v Mercurine Pte LtdHigh CourtYes[2008] 1 SLR 316SingaporeCited for the Judge's decision to reverse AR Lim's decision and reinstate the Default Judgment.
Evans v BartlamHouse of LordsYes[1937] AC 473EnglandCited as the leading authority on the test for setting aside a regular default judgment, focusing on whether the defendant has a prima facie defence.
Alpine Bulk Transport Co Inc v Saudi Eagle Shipping Co IncEnglish Court of AppealYes[1986] 2 Lloyd’s Rep 221EnglandCited for its 'real prospect of success' test for setting aside a regular default judgment, which the current judgment critiques and ultimately rejects in favor of Evans v Bartlam.
Burns v KondelEnglish Court of AppealYes[1971] 1 Lloyd’s Rep 554EnglandCited as a case that applied the Evans v Bartlam test.
Singapore Gems Co v The Personal Representatives for Akber AliHigh CourtYes[1992] 2 SLR 254SingaporeCited as a local case that applied the Evans v Bartlam test.
Regency Rolls Limited v Murat Anthony CarnallEnglish Court of AppealYes[2000] EWCA Civ 379EnglandCited as an example of a case where the English courts emphasized the necessity of making a setting-aside application promptly.
Ang Kim Soon v Sunray Marine Pte LtdHigh CourtYes[1997] 3 SLR 619SingaporeCited as a case where the defendant's delay in making its setting-aside application was viewed unfavorably by the court.
Lee Theng Wee v Tay Chor TengHigh CourtYes[2003] SGHC 173SingaporeCited as a case where the defendant's delay in making its setting-aside application was not looked upon kindly by the court.
European Asian Bank v Chia Ngee ThuangHigh CourtYes[1995] 3 SLR 171SingaporeCited for the principle that the court considers the merits of the defendant's case and any explanation for delay in approaching the court when exercising its discretion to set aside default judgments.
Tuan Haji Ahmed Abdul Rahmanv Arab-Malaysian Finance BhdFederal Court of MalaysiaYes[1996] 1 MLJ 30MalaysiaCited for the principle that the court retains discretion to set aside an irregular judgment despite a long delay, provided no prejudice has been suffered or it would constitute oppression to let the judgment stand.
The “Ruben Martinez Villena”High CourtYes[1987] 2 Lloyd’s Rep 621EnglandCited as a case that reverted to the Evans v Bartlam test and emphasized the peculiar facts of The Saudi Eagle.
Lim Quee Choo v David RasifHigh CourtYes[2008] SGHC 36SingaporeCited for its lucid and comprehensive disquisition of the test currently applicable to the setting aside of regular judgments.
Allen v TaylorEnglish Court of AppealYes[1992] PIQR 255EnglandCited as a case where the English Court of Appeal declined to adopt the Saudi Eagle test.
Day v Royal Automobile Club Motoring Services LtdEnglish Court of AppealYes[1999] 1 WLR 2150EnglandCited as a case that endorsed a departure from The Saudi Eagle and shifted focus away from the strength of the defendant's case.
Hong Leong Finance Ltd v Tay Keow NeoHigh CourtYes[1992] 1 SLR 205SingaporeCited as a case where the Saudi Eagle test was first applied without any explanation or examination.
Abdul Gaffer v Chua Kwang YongCourt of AppealYes[1995] 1 SLR 484SingaporeCited as a case where the Saudi Eagle test was approved without any analysis, and which the current judgment revisits and qualifies.
Awyong Shi Peng v Lim Siu LayHigh CourtYes[2007] 2 SLR 225SingaporeCited as a case where the courts took the view that there were underlying factual disputes that ought to be adjudicated in a full trial.
Su Sh-Hsyu v Wee Yue ChewCourt of AppealYes[2007] 3 SLR 673SingaporeCited as an example of a case where a setting-aside order was conditional on appropriate terms being met.
Anlaby v PraetoriusEnglish Court of AppealYes20 QBD 764EnglandCited for the principle that a defendant was entitled to set aside an irregular default judgment ex debito justitiae.
Harkness v Bell’s Asbestos and Engineering LtdEnglish Court of AppealYes[1966] 2 QB 729EnglandCited for explaining the effect of the new English O 2 r 1 and eliminating the stark contrast between the legal effect of a void court order and that of a voidable court order.
White v WestonEnglish Court of AppealYes[1968] 2 QB 647EnglandCited as a case where the ex debito justitiae rule remains relevant despite the wide discretion conferred on the courts to uphold or vary irregular default judgments.
Willowgreen Ltd v SmithersEnglish Court of AppealYes[1994] 1 WLR 832EnglandCited as a case where the ex debito justitiae rule remains relevant despite the wide discretion conferred on the courts to uphold or vary irregular default judgments.
Po Kwong Marble Factory Ltd v Wah Yee Decoration Co LtdHong Kong Court of AppealYes[1996] 4 HKC 157Hong KongCited as an example of the breadth of the court’s power under O 13 r 8 to set aside or vary irregular judgments.
Faircharm Investments Ltd v Citibank International PlcEnglish Court of AppealYes[1998] EWCA Civ 171EnglandCited for identifying a class of situations where an irregular default judgment would be allowed to stand – namely, cases where the defendant was 'bound to lose' if the irregular default judgment were set aside and the matter re-litigated.
Chu Kam Lun v Yap Lisa SusantoHong Kong Court of AppealYes[1999] 3 HKC 378Hong KongCited as a case where the Hong Kong judiciary expressed reservations about and refrained from adopting Faircharm.
Marjorie Joyce Cusack v Agostino De AngelisCourt of Appeal of the Supreme Court of QueenslandYes[2007] QCA 313AustraliaCited as a case where the Court of Appeal of the Supreme Court of Queensland made some positive comments about Faircharm.
BCCI v Habib BankEnglish High CourtYes[1999] 1 WLR 42EnglandCited as a good illustration of when it would be apt to uphold an irregular default judgment – which is not set aside ex debito justitiae – on the ground that the defendant would be 'bound to lose' as stated in Faircharm.
Standard Chartered Bank v Chip Hong Machinery (S) Pte LtdHigh CourtYes[1990] SLR 1230SingaporeCited as a good example of the type of situation where the Faircharm approach would be apposite.
Purwadi v Ung Hooi LengHigh CourtYes[2003] 4 SLR 292SingaporeCited for the principle that the defendant only needs to establish the irregularity, whether factual or legal.
Philip Securities (Pte) v Yong Tet MiawHigh CourtYes[1988] SLR 594SingaporeCited as an example of a case where the court may invoke O 20 r 11 only if the irregularity consists specifically of a clerical mistake or an accidental slip or omission in the judgment.
Malayan United Bank Bhd v Mohammed Salleh bin Mohammed YusoffHigh CourtYes[1988] 3 MLJ 165MalaysiaCited as a case where the court would have to invoke O 2 r 1(2) or, alternatively, depending on whether the irregular default judgment is an O 13 default judgment or an O 19 default judgment, either O 13 r 8 or O 19 r 9 respectively.
Lee Chee Wei v Tan Hor Peow VictorCourt of AppealYes[2007] 3 SLR 537SingaporeCited for the principle that the rules of court practice and procedure exist to provide a convenient framework to facilitate dispute resolution and to serve the ultimate and overriding objective of justice.

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 19 rule 9 of the Rules of Court
Order 2 rule 1 of the Rules of Court
Order 20 rule 11 of the Rules of Court

14. Applicable Statutes

Statute NameJurisdiction
Rules of Court (Cap 322, R 5, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Default Judgment
  • Setting-Aside Application
  • Regular Judgment
  • Irregular Judgment
  • Ex Debito Justitiae
  • Prima Facie Defence
  • Real Prospect of Success
  • Triable Issues
  • Undue Delay
  • Consolidated Suit
  • Compromise Sum

15.2 Keywords

  • default judgment
  • setting aside
  • delay
  • regular judgment
  • irregular judgment
  • lease agreement
  • unpaid rent
  • vacant possession

16. Subjects

  • Civil Procedure
  • Default Judgments
  • Setting Aside Judgments
  • Contract Law
  • Landlord and Tenant Law

17. Areas of Law

  • Civil Procedure
  • Judgments and Orders