ISSUES TO CONSIDER IN A LAW SUIT
It is crucial that a Plaintiff or Defendant understands what they are getting themselves into when they embark upon the litigation process. There is plenty of speculation, strategising and psychology that goes into planning a lawsuit. This article will primarily focus on the Civil Litigation process, but the overall theme is applicable to family litigation as well.
Tiers of court
There are four tiers of Court in Singapore. The first three tiers are used for trial processes and hearings.
Let us start with the Magistrates’ Courts (MC). This is for suits that are less than $60,000.00 in value. There is a simplified and expedited process for matters that fall within this category. Simply put, a simplified process is put in place to resolve disputes faster, and in a more (hopefully) amicable and upfront manner.
To facilitate this, there is an upfront discovery process. This means that you will have to produce your evidence when you file your Writ and Defence in a document called the ‘list of documents’.
Further, the Courts have added a Case Management Conference (CMC), which will be attended by solicitors, unless parties are not represented. One of the purposes of this is for the Judge to narrow down on certain issues and provide an ‘indication’ to allow parties’ to facilitate settlement of the matter.
Thereafter, there may be a Mediation session which parties attend together with their solicitor(s) (if any). This is an “off the record” session wherein the mediator will attempt to facilitate parties to meet somewhere in the middle and either drop hands (withdraw) or obtain an Order of Court by consent. If this fails, there is no other option except for a trial.
It is also pertinent to note that MC suits differ from the District Court (DC) suits (claims above $60,000 and below $250,000) and High Court (HC) suits (above $250,000) in that certain popular interlocutory are prohibited. The interlocutories are as follows:
(a) Order 14 (Summary judgment and disposal of case on the point of law);
(b) Order 24 (Discovery and inspection of documents);
(c) Order 26 (Interrogatories).
You may take out other applications in the MC suit category such as a ‘striking out’ application, i.e. to pray to Court for the Plaintiff claim to be struck off because it is embarrassing, frivolous, vexatious and or has no reasonable cause of action and/or an abuse of court process. These are technical procedures, and it is not advisable for parties to do it by themselves in person. These are technical ‘battles’, and it would be best to be represented by a solicitor, although it is not compulsory, unless you are a body corporate, of course.
Interlocutories are minor ‘skirmishes’ before ‘war,’ i.e. the trial. These interlocutories may serve to narrow the focus by forcing parties to either amend and or clarify their facts and/or to achieve a swift disposal of the suit before even going to trial. It is to be noted that these can be appealed only twice, and each of these may cost a minimum of $4,000 to $5,000 (subject to the complexity of the work). You will have to pay these fees to your lawyer regardless of whether you are the applicant or respondent. Yes, so even if you are defending an interlocutory, you will have to fork out monies should you wish to be represented.
Costs may be awarded against you if you lose, and vice versa. As such, in the DC and the HC (as compared to MC suits), solicitors will not be able to determine the course of your case. If faced with a reasonable opposing party, one might resolve it at the mediation stage, or by way of ‘without prejudice’ letters. However, when one is faced with an unyielding party with deep pockets, he/she is in for a long and costly fight. Sometimes one may not mind spending huge sums of money to prove a point if its a matter of principle. Yes. Litigation may be akin to feeding an elephant.
Nevertheless, in the MC suit category, while these interlocutories are available, the practice or ‘convention’ by the Courts is to try to hold them in abeyance while parties try to settle the matter. Further, solicitors might not advise clients to take up these interlocutories unless they are necessary as the costs awarded for an MC summons is low. It may be from $800 to $1,600 whereas for DC suits, it is $1,000 to $8,000, and even higher for the High Court ($4000.00 to $15,000.00).
If a party does not show up, you may obtain a default judgement after filing and serving a statement of claim without the Court looking into the merits of your case. This may happen in two ways; not entering an appearance (i.e. not informing the court that you are going to defend the suit) or not filing a defence when due. However, one is to note that the Defendant may later file a summons to set aside the default judgement by stating that they were unaware and/or there are some issues that need to be determined.
Generally, if the Defendant can show some triable issues (issues that must be determined at trial) then the Court will set aside the judgement. However, the Court will compensate the other party by awarding it costs. Summons for Setting Aside is one of the few summonses where the successful party pays costs to the other side.
You will have understood by now that litigation is unpredictable. Sometimes, even after obtaining a judgement, a party may not pay up. It is then that we take out enforcement proceedings (i.e. practical steps to recover the monies). The pros and cons are listed below:
Garnishee proceedings are most commonly used to attach or freeze the sums of money in the judgment debtor’s bank account. Using this method, a judgement creditor can temporarily freeze the judgement debtor’s account and attach the debt (take out the debt) owed to you, and after that the bank will proceed to unfreeze the account. However, there is a risk that the judgement debtor may not have any money in their bank account. In such cases, you will have spent money more money on professional fees and obtained nothing.
Writ of seizure of sale (wss)
Under a WSS, a judgement creditor can request the Court to seize and sell movable property belonging to Judgement Debtor to pay the judgement debt. However, under this method, there is no guarantee that:
A WSS will be executed successfully; or
That you will recover the amount owing to you; or
That the expenses you have incurred for the execution; or
That you will recover any money at all.
Also, there may also be a risk that the judgement debtor does not have any movable property on their premises.
In such cases, you will have spent money more money on professional fees and obtained nothing.
Examination of judgment debtor (EJD)
Under this method, you may apply by way of summons for the judgment debtor to be examined under oath to determine what assets are available to satisfy the judgment debt.
Before the hearing of the Summons, your solicitors would have served the court order on the judgment debtor, requiring the judgement debtor to attend court on a certain date for the hearing. This court order will also enclose a questionnaire to be completed by the judgment debtor. It will state a list of documents which judgement debtor has to provide in support of his answers stated in the questionnaire. However, there is a risk that Judgement debtor will not cooperate or they fail to turn up in Court on the date of the hearing. There is no automatic ‘contempt of court’ proceedings if the judgment debtor fails to turn up, but one may use his absence for committal proceedings (note: expensive). This is useful to fine or imprisons the debtor. However, it is not easy.
Winding up the company
Where the judgment debtor cannot pay the sums owed, the judgment creditor can apply for bankruptcy or winding-up proceedings against the debtor. The Court can order compulsory winding up of the company. When a company is wound up compulsorily by the Court, the winding up is deemed to have commenced at the time of presentation of the Originating Summons for winding up. Upon the commencement of winding up, the company’s officers have no power to carry on the business of the company. The liquidator takes over control of the company.
Additional disbursements: $15K to $16K ($10,2000 OA Fees; around $3,000.00 for an advertisement in The Strait Times or any well-known newspaper). This is over and above our professional costs.
*Winding up is expensive and we do not recommend it unless the debt is sizeable and or the company has assets that may be liquidated.
The OA takes over the assets of the individual once the order has been made. You may or may not get back your monies depending on whether the judgement debtor has assets or whether he is interested to get out of bankruptcy. However, one may not want to be adjudged a bankrupt for a multitude of reasons such as losing their job or having issues travelling or simply to avoid the stigma.
Imagine if you had obtained a default judgement and proceeded to enforce the judgement by taking out garnishee proceedings. You obtained an order, and the Plaintiff applied to set aside the judgement. What may happen is that, while there is no automatic stay on proceedings (i.e. by taking out a summons, it does not mean enforcement proceedings must stop), if a party has taken out a summons to set aside, the Court is unlikely to make the order final. As such, the only way is to compensate the Plaintiff with costs. You may be frustrated after having spent professional fees and not obtained anything.
In another example involving WSS, a matter may get complicated when the only way to enter the premises is by breaking the main door. It is pertinent to note that we are not allowed to break open a door for a flat under the HDB. In such an event, there may be no purpose in pursuing the recovery of your monies via this route. This is distinguished from breaking/picking a lock, which is allowed.
This is a very short article to explain how litigation may go either way. Litigation is not for the faint-hearted or frugal soul. You either litigate to defend, recover monies/obtain an order or as a matter of principle. If you litigate, you have some chance. If you don’t do anything, you may have no chance at all!
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