When faced with errant litigants who deliberately breach court orders, an aggrieved party to a civil action may seek redress by applying to court for two powerful but draconian remedies available under the Rules of Court: (a) an “Unless Order”; and (b) a “Committal Order”.
- An Unless Order is an order for a litigant to comply with orders made against it within a given time, failing which, the litigant runs the risk of serious sanctions from the court such as having its pleadings struck out, and consequently, dismissal of its action and/or having judgment entered against it.
- A Committal Order is an order for a litigant to comply with orders made against it within a given time, failing which, the litigant will be committed to prison for being in contempt of court.
In the recent case of Energy & Commodity Pte Ltd & Ors v BTS Tankers Pte Ltd  SGCA 76, the Singapore Court of Appeal upheld the High Court’s decision in BTS Tankers Pte Ltd v Energy & Commodity Pte Ltd & Ors  SGHC 58 to grant a Committal Order against the second and fourth appellants (“Contemnors”) committing them to prison for seven and five months respectively and an Unless Order against all the appellants for their various breaches of discovery and freezing injunction orders (“Court Orders”). As the appellants failed to comply with the terms of the Unless Order, their defences were eventually struck out and judgment entered against them.
Allen & Gledhill Partner Yap Yin Soon represented the successful respondent shipowner in this case.
Background to the appeal
The respondent shipowner of the vessel “BTS CHRISTINA” (“Vessel”) had commenced suit against the first to third appellants for conspiring with persons in Vietnam to charter the Vessel to smuggle gasoil into Vietnam (“Smuggling Activities”). The second appellant (an individual) was the controlling mind of the first and third appellants, who were respectively, the voyage charterers of the Vessel and shippers of the gasoil. Among other things, the respondent claimed against the first to third appellants for the loss and damage it suffered whilst the Vessel was detained by the Vietnamese authorities for three years pending criminal investigations into the Smuggling Activities. Against the fourth appellant (who was the second appellant’s wife), the respondent sought declarations that she held certain assets that in truth and in fact belonged to the first to third appellants.
Over the course of the proceedings in the High Court, due to the failure by the first to third appellants to provide proper discovery and there being found to be a risk of dissipation of assets on their part, the respondent applied for and obtained the Court Orders that directed, among other things, the appellants to disclose certain documents and information relating to the Smuggling Activities and their assets. As the appellants chose deliberately not to comply with the said Court Orders, the respondent applied for and obtained a Committal Order and an Unless Order which gave the appellants a final opportunity to comply with the Court Orders failing which they would be sentenced to prison and have their defences struck out and judgment entered against them.
Even with the Committal Order and the Unless Order against them, the appellants continued to be in breach of the Court Orders and chose to appeal against the High Court’s decision to grant the said orders.
The appellants’ arguments on appeal
The issues raised on appeal were:
- Whether it had been proven that the appellants were liable for civil contempt;
- Whether the sentences imposed by the High Court in the Committal Order were excessive; and
- Whether the Unless Order was a proportionate sanction for the appellants’ breaches of the Court Orders.
The Court of Appeal’s decision
Liability for civil contempt
On the first issue concerning liability, the Court of Appeal affirmed the High Court’s decision that the respondent had established that the Contemnors had breached each and every one of the Court Orders beyond a reasonable doubt. The Court of Appeal saw no reason to doubt the High Court’s observations that the Contemnors’ conduct could not be said to have been the result of an honest and reasonable failure to understand their discovery obligations and that their “bald assertions” were insufficient to excuse them from their breaches of the Court Orders. By way of an example, the Court of Appeal noted that, while the appellants had consistently maintained on affidavit that they were “impecunious”, they were in truth spending more than S$25,000 a month to support their lifestyles.
The Court of Appeal also dismissed the appellants’ contentions in effect that the High Court Judge’s decision was tainted with apparent bias. The Court of Appeal found that certain comments made by the High Court that were critical of the appellants were made at the conclusion of the hearing, after the High Court had considered the merits of the application before it, and had been reproduced by the appellants in the appeal in a manner that had the tendency to mislead the court. In this regard, the court reiterated the caution against making the argument of apparent bias lightly as, should the allegation prove to be unmeritorious, there could be serious consequences.
The Court of Appeal also rejected the appellants’ complaints that the Contemnors had not been given a chance to be cross-examined on the matters stated in their affidavits and that the statements issued by the respondent pursuant to Order 52 of the Rules of Court in the committal proceedings (“Order 52 Statements”) were defective. In this regard, the Court of Appeal agreed with the respondent that a cross-examination of the appellants would have been an exercise in futility as it was clear from the various affidavits filed by them that they lacked credibility. The Court of Appeal also found that the Order 52 Statements were not defective and were instead manifold and precise and served their objective of giving notice to the Contemnors of the charges proffered against them.
On the issue of sentencing, the Court of Appeal agreed with the respondent that seven and five months’ imprisonment for the second and fourth appellants respectively was not excessive.
In arriving at its conclusion, the Court of Appeal considered the sentencing factors for civil contempt which included: (a) whether the claimant has been prejudiced by the contempt and whether the prejudice is capable of remedy; (b) the extent to which the contemnor has acted under pressure; (c) whether the breach of the order was deliberate or unintentional; (d) the degree of culpability; (e) whether the contemnor has been placed in breach of the order by reason of the conduct of others; (f) whether the contemnor appreciates the seriousness of the deliberate breach; and (g) whether the contemnor has co-operated.
On the facts, the Court of Appeal found that all the said factors operated against the Contemnors as, among other things, the respondent had been prejudiced by the contempt which had caused the suit to drag on for several years, there were no extraneous circumstances that prevented them from making the relevant disclosures and they had repeatedly acted in wanton disregard of their discovery obligations and had even lied to the court. Although the Contemnors had in some instances made certain disclosures, these were made in disregard of the court’s timelines or were paltry. The Court of Appeal also found that the Contemnors had not been co-operative and there was no indication that they understood the seriousness of their breaches.
Proportionality of Unless Order
On the third issue, the Court of Appeal, applying the guiding principle of proportionality, found that the appellants’ intentional breaches of court orders, the prejudicial effect that the breaches had on the respondent, the appellants’ constant lying as well as lack of any genuine attempt to comply, rendered the Unless Order proportionate.
In the circumstances, the Court of Appeal affirmed the High Court’s decision to impose the Unless Order finding that it had exhausted all other measures to secure the appellants’ compliance with the Court Orders.
The Court of Appeal’s judgment serves as a cautionary tale to all litigants to strongly reconsider whether any perceived advantage that may be had by refusing to comply with court orders is worth facing the drastic consequences that could follow for being found to be in contempt of court. The judgment is also a clear illustration of the efficacy of Unless Orders and Committal Orders. When obtained in the appropriate case, the non-compliant litigant will be compelled to make a choice: either comply, or face the consequences, which may include a prison sentence.