Singapore High Court reiterates high threshold for striking out applications
29 April 2019
Qroi Ltd v Pascoe, Ian & Anor [2019] SGHC 36
In the recent case of Qroi Ltd v Pascoe, Ian & Anor, the Singapore High Court considered whether a claim for breach of warranty of authority against a managing partner of a company could be struck out.
In his written grounds of decision, Justice Choo Han Teck reiterated that the threshold for striking out is high, and that as long as there are issues of fact and law that need to be proven, no claim should be struck out without trial. Drawing from recent events in the English Premier League, Justice Choo observed that “The principle here is simple - if Newcastle United can beat Manchester City in the English Premier League, anything can happen”.
Facts
The plaintiff, QRoi Ltd (“QRoi”), is a company incorporated in Hong Kong, providing end-to-end technical services and technology solutions to mobile operators in Southeast Asia. The dispute in the suit arose out of non-payment of services under an agreement between QRoi and the second defendant, Grant Thornton Advisory Services Co, Ltd (“Grant Thornton Advisory”), a company incorporated in Myanmar.
The first defendant in the suit was Ian Pascoe (“Ian Pascoe”), the managing partner of Grant Thornton Advisory and a number of other Thailand-incorporated entitles bearing the “Grant Thornton” brand name. As against Ian Pascoe, QRoi’s claim was based on a breach of warranty of authority. In particular, QRoi contended that Ian Pascoe represented that he was acting on behalf of a Grant Thornton entity in Thailand when he negotiated and executed the agreement. However, when QRoi demanded payment for services rendered, Ian Pascoe demurred and stated that he was acting on behalf of Grant Thornton Advisory.
Ian Pascoe applied to strike out QRoi’s claim against him. He contended, first, that he had authority to act for all the Grant Thornton entities in Thailand and, second, that QRoi failed to identify any entity for which he had no authority to act for. In response, QRoi contended that the necessary elements for a claim of breach of warranty of authority had been set out in its Statement of Claim.
Holding
The court observed that counsel for Grant Thornton Advisory had cited several cases concerning claims for breach of warranty of authority, but noted that in all the cases cited, the issues were only determined after trial. The court also observed that, in any event, QRoi was entitled to challenge the law and its application, as set out in the cases.
The court reaffirmed that the threshold for striking out is high, and even if the plaintiff’s claim seems weak, if there are issues of fact and law that need to be proven, no claim can be struck out without a trial. In this case, the court observed that QRoi’s claim was a reasonable one and if proved, it should be granted the relief it seeks.
Key takeaways
The decision is significant because it reiterates the high threshold involved in striking out applications. The above decision in Qroi Ltd v Pascoe, Ian & Anor [2019] SGHC 36 has subsequently been cited by the Singapore High Court in Lee Hsien Loong v Leong Sze Hian [2019] SGHC 66, and in Werner Samuel Vuillemin v Oversea-Chinese Banking Corp Ltd [2019] SGHC 88, as a case which reiterates the accepted approach that an action should only be struck out in a plain and obvious case or if it was clearly unsustainable. Accordingly, litigants should carefully assess whether a case is clearly unsustainable or whether there are no facts or points of law that need to be proven, before bringing any application to strike out a claim.
Allen & Gledhill Partner Kenneth Lim acted for the successful plaintiff.