SUN YONGJIAN & Anor v GOH SENG HENG

Facts

Dr Goh Seng Heng was a director and shareholder of Aesthetic Medical Partners Pte Ltd (AMP). In 2014 he sold AMP shares to Liberty Sky Investment Ltd (LSI). In earlier litigation, LSI's suit for fraudulent misrepresentation, the High Court found that Dr Goh had made fraudulent misrepresentations to LSI's representatives about an imminent trade sale and a planned listing of AMP. Because LSI had passed most of the shares to two Chinese investors, it recovered damages only for the shares it kept, and the Court of Appeal upheld that decision. Dr Goh was adjudged a bankrupt on 19 March 2020.

Mr Sun Yongjian and Ms Fu Shanping claimed to be those investors. After the Official Assignee asked them to obtain judgments to support their proofs of debt, they sued Dr Goh in Originating Claim No 48 of 2022. They alleged that LSI passed his misrepresentations on to them and that they relied on them. Personal service failed: Dr Goh said he lived on a yacht and offered to be served at sea, so the court ordered substituted service by email. He emailed to deny the claim but filed nothing, and default judgment for damages to be assessed was entered on 17 August 2022. During the assessment hearing he raised liability, and on 12 October 2023 he applied to set the default judgment aside. An assistant registrar dismissed that application, and Dr Goh appealed in Registrar's Appeal No 11 of 2024.

Issues

1. Whether the default judgment was regularly obtained
2. Whether Dr Goh had shown a prima facie defence to the claim in fraudulent misrepresentation
3. Whether the court should exercise its discretion to set aside the default judgment given the delay and the prejudice to the claimants

Holding

The High Court dismissed the appeal. Although it accepted that Dr Goh had, barely, a prima facie defence, it declined to set aside the regularly obtained default judgment because his delay was inordinate and inexcusable and setting it aside would cause the claimants prejudice that a costs order could not cure. Dr Goh was ordered to pay the claimants costs of the appeal fixed at $10,000 inclusive of disbursements. Dr Goh has appealed against the decision.

Reasoning

The judgment was regular. Substituted service by email had never been challenged and plainly brought the claim to Dr Goh's notice, and the claimants waited until both filing deadlines had passed before applying.

Applying Merucrine Pte Ltd v Canberra Development Pte Ltd [2008] 4 SLR(R) 907 and U Myo Nyunt (alias Michael Nyunt) v First Property Holdings Pte Ltd [2021] 2 SLR 816, a regular default judgment may be set aside only if a prima facie defence exists, after which the court weighs delay, its reasons and prejudice. Most of Dr Goh's arguments failed. The earlier appeal had not decided that he owed nothing to the investors. Registration as shareholders and privity of contract were irrelevant to a tort claim. He could not dispute the investment agreements he had relied on before, or re-run findings blaming another person. A representation made to a third party for passing on can found a claim, and he knew LSI was raising money from friends. But on whether LSI actually passed the representations on and whether the claimants relied on them, their affidavits were bare and cross-referred to the pleadings, and they mischaracterised clauses 3, 4 and 6 of the investment agreements. Since those facts were within the claimants' control, the court held there were circumstances that ought to be investigated, as in Miles v Bull [1969] 1 QB 258, so leave to defend would have been granted.

On discretion, the court did not accept that Dr Goh was unaware of time limits, since he had engaged lawyers twice. It excused the period spent awaiting the Official Assignee's sanction and seeking legal aid, but he did nothing for more than seven months after 21 February 2023 and gave no explanation. As a medical doctor and businessman with litigation experience, he could have acted for himself. Because he was bankrupt, an adverse costs order would not protect the claimants. His conduct before judgment was entered was not egregious, but that did not outweigh the delay.

From the judgment