Attorney General v Phang Fook Seng [1999] 3 SLR 641; [1999] SGCA 50

Catchwords

Civil Procedure – Judgments and Orders – Whether judgment in default
of defence can be entered against the government – O 73 r 7(1) Rules
of Court leave to enter judgment in default of defence against government

Civil Procedure – Pleadings – Filing defence – Whether issuance of a
s 14 certificate under the Government Proceedings Act (Cap 21) means
not having to file defence

Case Summary
Facts
The respondent Phang , an SAF member was injured in the course of destroying
classified documents by burning. He was informed that his injuries would
not be treated as attributable to service and he would not be entitled
to an award under the Singapore Arm Forces (Pensions) Regulations (Cap
295, Rg 9) (‘SAF Regulations’). He served a statement of
claim endorsed on the appellant, the Attorney General (‘AG’)
pursuant to s 19(3) of the Government Proceedings Act (Cap 21) (‘GPA’)
claiming damages. The AG entered an appearance. No defence was filed.
Subsequently, a s 14 certificate of the GPA was issued, entitling Phang
to claim disability compensation under the SAF Regulations. The AG asserted
that a defence was unnecessary once the s 14 certificate was issued.
Phang’s solicitors disagreed. Phang proceeded to apply for leave
to enter interlocutory judgment in default of defence. The high court
reversed the assistant registrar’s decision and ordered the AG
to file defence within seven days failing which judgment in default
of defence would be entered against the AG. The AG appealed.
Held, dismissing the appeal:
(1) The question whether judgment in default of defence should be entered
against the government was one of procedural law. Once the AG had entered
an appearance, he ought to serve a defence. Otherwise, leave under Order
73 r 7(1) of the Rules of Court would be granted. Even if the s 14 certificate
provided a cast-iron defence in law, the onus was still on the AG to
raise it by pleading it in a formal defence. Filing a defence and raising
the issue of the s 14 certificate were not mutually exclusive. Phang
was not obliged to accept the AG’s ipse dixit on the issue and
was entitled to challenge their position. The AG should be ordered to
file his defence.

Case(s) referred to
Burns v Kondel [1971] 1 Lloyd’s Rep 554 (refd)
Evans v Bartlam [1937] AC 473 (refd)
Farden v Richter (1889) 23 QBD 124 (refd)
Watt v Barnett (1877-1878) 3 QBD 363 (refd)

Legislation referred to
Government Proceedings Act (Cap 121) s 14(1)
Rules of Court 1997 O 16 r 5, O 18 r 19, O 19, O 73 r 7
Singapore Armed Forces (Pensions) Regulations (Cap 295, Rg 9)

Judgment

[Please note that this case has not been edited in accordance with
the current Singapore Law Reports house style.]

Judgment reserved.

Karthigesu JA: (delivering the judgment of the court):

1 This is an appeal against the decision of the learned judge to (a)
set aside the decision of the assistant registrar refusing the respondent
leave to enter judgment in default of defence; and (b) order the appellant
to file a defence within seven days failing which judgment in default
be entered against the appellant. The orders of the learned judge were
made in the respondent’s appeal against the decision of the assistant
registrar who had refused the respondent’s application under O
73 r 7 of the Rules of Court 1997 for leave to enter judgment in default
of defence against the appellant.

Background

2 The respondent was at all material times a member of the Singapore
Armed Forces (‘SAF’). On 19 January 1996, while serving
his full-time national service as a storeman at SIB Maju Camp, he suffered
injuries in the course of destroying classified documents by burning
them in a bin with the use of kerosene or thinner. The flames spread
to his uniform which caught fire and the respondent was injured thereby.

3 The SAF initially took the view that the respondent was not acting
under instructions and had negligently poured thinner from a can into
the bin in which the documents were being burnt, purportedly to aid
in their combustion. As such, his injuries were solely attributable
to his own negligence as ‘he did the unauthorised act of burning
paper in an unauthorised place, by unauthorised and clearly dangerous
means’: the letter dated 29 October 1997 from the Permanent Secretary
(Defence) to the respondent’s solicitors. The respondent was thus
informed that his injuries would not be treated as attributable to service
for the purposes of entitlement to an award under the Singapore Armed
Forces (Pensions) Regulations (Cap 295, Rg 9) (‘SAF Regulations’)
relating to the death or disablement of a member of the forces.

4 On 5 June 1998, the respondent issued and served a writ with a statement
of claim endorsed on the appellant (pursuant to s 19(3) of the Government
Proceedings Act (Cap 121) (‘GPA’) claiming general and special
damages for personal injury, pain and suffering, disability and loss
and damage. The respondent alleged that these were caused by the failure
of the SAF to provide a safe system of work, as particularised in para
4 of his statement of claim. On 9 June 1998, the appellant entered an
appearance, but did not file a defence. On 29 June 1998, a certificate
under s 14 of the GPA was issued in respect of the respondent’s
injuries, entitling him to claim disability compensation under the SAF
Regulations (‘the s 14 certificate’). The appellant accordingly
informed the respondent’s solicitors on the same day that a defence
would not be filed in view of the issuance of the certificate and enclosed
a copy of the certificate, and sought confirmation that the respondent
was willing to withdraw the action by consent. The appellant also offered
to pay the respondent costs of the proceedings up to that stage. However,
the respondent’s solicitors did not agree that a defence need
not be filed in the circumstances and rejected the appellant’s
offer. The appellant was invited to file his defence, failing which
an application to enter judgment in default of defence would be taken
out. No defence was filed in the event and the respondent applied for
leave to enter interlocutory judgment in default of defence.

The decisions below

5 The application first came up for hearing before the assistant registrar
on 20 July 1998. An affidavit was filed on behalf of the respondent
in support of the application but none was filed on behalf of the appellant.
Counsel for the respondent simply submitted that leave should be granted
because no defence had been filed and the s 14 certificate was not applicable
to the respondent’s claim. In reply, counsel for the appellant
contended that, once the conditions in ss 14(1)(a) and (b) of the GPA
respectively were satisfied, the respondent could not maintain his action
in view of s 14(1), and he was to be compensated under the provisions
of the SAF Act (Cap 295) instead. No defence would be filed and the
action should be struck out. The assistant registrar dismissed the application
for leave to enter judgment in default, and the respondent appealed.

6 The application was heard by the learned judge on 16 September 1998.
Before the learned judge, counsel for the respondent submitted that
(a) the basis of the respondent’s claim was not the vicarious
liability of the SAF (or the government) but rather their failure to
provide a safe system of work; (b) s 14(1)(a) only deals with vicarious
liability and the s 14 certificate was thus irrelevant; and (c) even
if the s 14 certificate was relevant, it was not conclusive because
of the Permanent Secretary’s letter of 29 October 1997 which stated
that the respondent’s injuries were not attributable to service.
Counsel for the appellant replied that (a) under O 73 r 7, no judgment
in default of defence can be entered against the government except with
the leave of the court, and this means that the court will judiciously
consider the government’s reasons for not filing a defence; (b)
the court has to be satisfied that the government is liable; (c) the
court having cognisance of the s 14 certificate is in a position to
decide that no tortious liability as alleged can attach to the government;
and (d) the court cannot therefore enter judgment in default of defence
against the government, and no defence need be filed.

7 The learned judge set aside the decision of the assistant registrar.
However, he did not give leave to enter default judgment, but instead
directed that the appellant file his defence within seven days, failing
which judgment in default of defence would be entered (‘the unless
order’).

8 Thereafter, the appellant made an application for further arguments.
The learned judge acceded to the appellant’s request and the hearing
was held on 22 September 1998. The gist of the further arguments raised
by the appellant, as set out in his written request dated 18 September
1998, was that (a) the court when hearing an application under O 73
r 7 should not be concerned to enquire why a defence has not been filed
but rather with whether the government has a valid reason not to file
a defence and yet resist default judgment; (b) the learned judge did
not disagree with the appellant on the effect of the s 14 certificate
and thus did not give leave to enter default judgment; (c) the making
of the unless order was therefore inconsistent with this; and (d) the
s 14 certificate had rendered the action unsustainable by virtue of
a statutory provision — s 14 GPA — which need not be pleaded
as a matter of law.

9 After hearing the further arguments, the learned judge maintained
his position that he would not go into the merits of the case unless
the appellant filed a formal defence. He then confirmed his earlier
order made on 16 September 1998. The appellant’s request for a
stay of execution of the unless order was refused.

10 Subsequently, however, the appellant succeeded in obtaining an order
for a stay of execution of the unless order pending an appeal to the
Court of Appeal. Stay was granted so as not to render the appeal nugatory
and because it was agreed that guidance from the Court of Appeal on
the issue at hand was required.

The appeal

11 Before us there were two main issues. The first — on which
the appeal turned — was whether judgment in default of defence
could be entered against the government. The second was the true effect
in law of the s 14 certificate and whether or not it was applicable
to the respondent’s claim. There was no necessary correlation
between these two issues, nor did our conclusion on the second inevitably
affect our answer to the first. We will call the first issue the procedural
point and the second issue the substantive point, and deal with them
seriatim.

The procedural point

12 The appellant pointed out that there are no authorities on how the
judicial discretion in granting leave to enter default judgment is to
be exercised in an application under O 73 r 7, but contended that the
learned judge had erred in refusing to entertain the merits of the case
without the filing of a formal defence. In other words, in an application
for leave to enter judgment in default of defence under O 73 r 7, the
court has the jurisdiction and the duty to judiciously consider whether
the plaintiff has a proper legal basis to enter default judgment against
the government based on the available facts, and to that end must have
regard to the merits of the case; the purpose of O 73 r 7 cannot merely
be to serve as a ‘wakeup’ call to the government to file
and serve its defence in order to avoid default judgment being entered
against it. It followed that the court having cognisance of the s 14
certificate must acknowledge that it effectively extinguishes a claim
against the government based on its vicarious liability, and that this
rendered the respondent’s claim legally unsustainable. In response,
counsel for the respondent contended that the requirement for leave
of the court in O 73 r 7 is intended only as a ‘wake-up’
call to the government to serve its defence; or alternatively, that
it cannot have been intended to impose upon the court the jurisdiction
to consider the merits of the case without a defence being filed. In
essence, the parties’ positions on this point were diametrically
opposed: the appellant on the one hand taking the view that the merits
of the case can (indeed, must) be considered without the filing of a
defence, with the respondent on the other asserting that this cannot
be so.

13 In our view, the appellant’s arguments were misconceived. Order
73 r 7(1) reads as follows:

Except with the leave of the Court, no judgment in default of appearance
or of pleading shall be entered against the Government in civil proceedings
against the Government or in third party proceedings against the Government.
Under this provision, where the plaintiff wishes to enter default judgment
against the government, an application to the court is necessary and
default judgment cannot be entered without the leave of the court. It
constitutes one of the exceptions (for another case where leave of the
court is necessary see O 16 r 5 — third party proceedings) to
the general rule, applicable in ordinary circumstances, that where the
plaintiff has established due default on the part of the defendant,
he is entitled to enter default judgment as of right and not as a mere
matter of discretion: see generally O 19. The plaintiff is not required
to make any application to the court nor is the court required to make
any judicial determination as to the plaintiff’s entitlement to
enter such default judgment, because

[t]he entitlement of the plaintiff to enter such default judgment without
any judicial determination is the sanction for failing to comply with
the time provided by the rules for the service of the defence or any
order extending such time. Such entitlement is also based on the ground
that if the defendant makes default in the service of the defence, all
the allegations in the statement of claim are deemed to be admitted.

See Jacob and Goldrein, Pleadings: Principles and Practice (1990) at
p 234. As the learned authors of 37 Halsbury’s Laws of England
(4th Ed, 1994 reprint) at pp 288–289 para 393 put it:
A judgment in default is not a judgment on the merits, but it is the
expression of the coercive power of the court where the default judgment
has only been obtained by a failure to follow any of the rules of procedure
or orders of the court.

For this reason, the defendant is given the opportunity to place the
merits of his case before the court on an application to set aside a
default judgment when the court may, on such terms as it thinks just,
set aside or vary the default judgment: O 19 r 9. Lord Atkin explained
the rationale of this in Evans v Bartlam [1937] AC 473 at p 480 thus:
The principle obviously is that unless and until the court has pronounced
a judgment upon the merits or by consent, it is to have the power to
revoke the expression of its coercive power where that has been obtained
by a failure to follow any of the rules of procedure.

14 Thus, on an application to set aside or vary a default judgment the
merits of the case are relevant — the court looks to see whether
the defendant has a defence on the merits, as otherwise there would
be no point in setting it aside: see, eg Watt v Barnett (1877–1878)
3 QBD 363 and Farden v Richter (1889) 23 QBD 124; and for this purpose,
it is enough to show that there is an arguable case or a triable issue:
Burns v Kondel [1971] 1 Lloyd’s Rep 554. However, the merits are
clearly irrelevant when entering default judgment, as that is a consequence
of failure to comply with the requirements of the rules of procedure
or orders of the court. The position is not altered by the leave requirement
in O 73 r 7(1) when the party against whom it is sought to enter default
judgment is the government. In our opinion, the object of that provision
is simply to give recognition to and make due allowance for the special
position of the government as a litigant with rights peculiar to it
different from those of the ordinary litigant, whether derived from
the common law or prescribed by statute. In this context, therefore,
its role is to act as a procedural safeguard only and the merits of
the case ought not to be considered. Rather, the more pertinent question
is whether there are any good reasons for non-compliance: in the present
case — why a defence was not filed.

15 The appellant maintained that filing a defence was unnecessary. Even
if this was done, it would only have pleaded a point of law already
known to both the respondent and the court — the s 14 certificate.
That was a statutory defence which, so it was argued, had the effect
of extinguishing a claim in tort against the government founded on its
vicarious liability, and thus removed the legal basis of the respondent’s
action. As there was no other way in which tortious liability against
the government could be established, the government was not liable and
default judgment could not be entered, and no defence need be filed.

16 It is the considered opinion of this court that this line of reasoning
is fallacious. Leaving aside for the moment the question of the effect
in law of the s 14 certificate (which in any event, as we have said,
is irrelevant for present purposes), it was clear to us that the question
whether judgment in default of defence should be entered against the
government was really one of procedural law only. Once the appellant
had entered an appearance, he ought to have filed and served a defence,
otherwise judgment in default thereof would have followed as a matter
of course. In other words, leave would have been granted on an application
under O 73 r 7(1). If the appellant did not want that to happen, it
was incumbent on him to file his defence. Even if the s 14 certificate
provided a cast-iron defence in law, the onus was still on the appellant
to raise it by pleading it in a formal defence, or by taking out an
application to strike out the statement of claim and hence dismiss the
action under O 18 r 19. Indeed, that was the appellant’s prerogative
as a matter of procedure, relying on rights under substantive law. To
insist that no formal defence was necessary because there was already
one at law which afforded immunity from suit was to conflate procedural
law with substantive law, and this we could not accept. Nor could we
permit the appellant to enter an appearance and not file a defence,
and so leave the matter hanging indefinitely, as it were. In the view
of the learned judge:
… I do not see why a defence should not or cannot be pleaded in
the present circumstances. A defendant who feels that the action is
so defective or flawed that no defence is necessary should apply to
strike out the action. If it elects not to do that, then it should file
is defence. I see no merits given by the state counsel for not filing
a defence. I asked if there was any rule of procedure that entitles
a defendant who is duly served and has entered an appearance to sit
back and do nothing. None was cited to me.

We would respectfully adopt those remarks. Before the learned judge,
counsel for the appellant also expressed his concern that, by filing
a defence, the appellant’s stand that the respondent’s action
was unsustainable in law would be prejudiced; or that the appellant
might be accused of not raising the point about the unsustainability
of the action at the application for leave to enter default judgment.
The learned judge did not think that these two courses — filing
a defence and raising the issue of the s 14 certificate — were
mutually exclusive, and with this we agree.

17 Further, there was another reason why a defence should be filed in
the instant case. In considering the effect of the s 14 certificate,
the learned judge said:
At the highest, it is that no action can be maintained in a matter in
respect of which a certificate is issued. However, the issuance of a
certificate does not by itself end the matter. Whether a proper certificate
has been issued is a question of fact and law that has to be pleaded
and determined. The proviso to s 14(1) underscores the fact that the
effectiveness of a certificate is justifiable [sic].
…
If the government takes the position that the claim cannot proceed after
the certificate is issued, it should plead that as a defence, so that
the [respondent] can respond to it. The [respondent] is not obliged
to accept the content or the effect of a certificate. He must be given
the opportunity to raise and develop the two lines of argument alluded
to — that s 14(1) does not apply to this action, and the government’s
inconsistent positions on the [respondent’s] entitlement to receive
payment or award.

To state the matter another way, the effect in law of the s 14 certificate
is a justiciable issue. The respondent was not obliged to accept the
appellant’s or the government’s ipse dixit on the issue,
and was entitled to challenge their position as he did, either by alleging
that the certificate did not have the effect contended for or by contesting
its applicability altogether. We would emphasise that this is quite
distinct from the question of the true effect in law of the certificate.
Accordingly, for the foregoing reasons, we concluded that the appellant
should be ordered to file his defence. As counsel for the appellant
indicated that he would have no difficulty in doing so, we affirmed
the order of the learned judge for the defence to be filed within seven
days, failing which judgment in default be entered by the respondent
against the appellant.

18 The appeal before us was really on the procedural point and not on
the substantive legal issue of the effect of a s 14 certificate. Although
some arguments were addressed to us by both counsel, we were of the
view that we should have the views of the court below on this issue
before addressing it ourselves. Accordingly we refrained from expressing
any views

Conclusion

19 In the result and for the foregoing reasons we have no alternative
but to dismiss this appeal with costs and confirm the order made by
the court below. The appeal deposit, if any, will be paid out to the
respondent on account of his costs.

Appeal dismissed.

Reported by Dawn Tan Ly