SREE RAM CONSTRUCTION PTE LTD v GREEN TAG SCAFFOLDING PTE LTD & Anor

Facts

Sree Ram Construction Pte Ltd (SRC) and Green Tag Scaffolding Pte Ltd (GTS) are scaffolding companies once co-owned by Mr Velu and Mr Kumar. Under a share swap agreement dated 8 August 2022, they split the companies so that Mr Velu owned SRC and Mr Kumar owned GTS. On 11 August 2022 SRC paid GTS $200,000 against a GTS invoice for scaffolding services; SRC's position was that this represented a goodwill payment agreed in a handwritten agreement of 30 July 2022.

On 7 January 2025 GTS sued SRC in OC 15 for breaches of the share swap agreement. SRC filed its defence on 31 January 2025 without a counterclaim, though it reserved a right to claim the $200,000. On 31 May 2025 SRC sued GTS and Mr Kumar in Originating Claim No 429 of 2025, claiming unpaid tax and recovery costs under the agreement, inducement of breach of contract, wrongful interference with its phone number, breach of fiduciary duty, conspiracy, and return of the $200,000 as unjust enrichment, pleading that GTS provided no services and that any agreement failed for want of consideration. GTS and Mr Kumar applied by Summons No 2221 of 2025 to strike out the whole action, arguing that O 6 r 8(1) of the Rules of Court 2021 required SRC's claims to be brought as a counterclaim in OC 15, and to strike out the unjust enrichment claim in particular. SRC first said its solicitors could not act on a counterclaim because of a Law Society complaint, but later called that a miscommunication.

Issues

1. Whether O 6 r 8(1) of the Rules of Court 2021 obliges a defendant to bring all its claims against the claimant as a counterclaim rather than a separate action.
2. Whether bringing a separate action was in the circumstances an abuse of process warranting striking out the whole claim.
3. Whether the unjust enrichment claim should be struck out as disclosing no reasonable cause of action or as factually unsustainable.

Holding

The Assistant Registrar dismissed the striking out application in its entirety, including the application to strike out the unjust enrichment claim, and ordered GTS and Mr Kumar to pay SRC costs fixed at S$6,000, all-in.

Reasoning

Under the old rules a counterclaim was optional, as Ram Thayalan Raman Siv and another v Liew Yap Tong (trading as Tong Heng Motor Work) [2002] 2 SLR(R) 706 held. Although O 6 r 8(1) omits the word "may", it still begins with the condition that the defendant intends to counterclaim, and "must" only prescribes how such a counterclaim is to be filed. Nothing in the reform materials showed an intention to change the law, so the rule enables but does not compel a counterclaim.

A separate action could still be an abuse of process, but not here. SRC's explanations were unsatisfactory, its first account being contradicted by the agreed timeline, yet there was no collateral purpose, no duplication of claims, and adjusting a case in light of developments in other litigation is not abusive. Even if the rule were mandatory, the court would have used its power under O 3 r 2(1) to allow the action, since striking it out would only lead to an amendment in OC 15, and the two actions could be consolidated or heard together.

The principle that unjust enrichment is unavailable where a valid contract governs the payment was not engaged, because SRC pleaded that any agreement was invalid for lack of consideration. There was some inconsistency between SRC's pleadings in the two actions, but not so fundamental as to make the claim fanciful; the handwritten agreement, the invoice and the parties' discussions needed examination at trial. Costs were reduced to reflect the hearing wasted by the inaccurate affidavit.

From the judgment