1 DC/SUM 987/2026 (“the Application”) was a summons under O 21 r 2(6) of the Rules of Court 2021 (“ROC”) by H M Luqman Al Hakim Ang (“Luqman”) and Sri Nelli Wiwisma (“Nelli”) (collectively, “the claimants”) against Halalxpert Pte Ltd and ARK Group of Companies Pte Ltd (“the defendants”), the second and third defendants respectively in DC/OC 706/2024 (“OC 706”), for the defendants’ defence in OC 706 to be struck out forthwith or, alternatively, on an unless order basis. The Application was premised on the defendants’ refusal or neglect to pay two outstanding costs orders made in favour of the claimants in OC 706.

2 O 21 r 2(6) of the ROC confers an express power on the court to “stay or dismiss any application, action or appeal or make any other order as the Court deems fit if a party refuses or neglects to pay any costs ordered within the specified time, whether the costs were ordered in the present proceedings or in some related proceedings”. At the time of decision, there had been no reported decision on how O 21 r 2(6) should be applied where a claimant seeks to strike out a defendant’s defence at an interlocutory stage of proceedings.

3 In the recent decision of Owner of the vessel(s) “CHLOE V” v UBS AG [2026] 1 SLR 107 (“Chloe V”), the Court of Appeal laid down a two-stage test to be applied when determining whether an appeal should be stayed or dismissed under O 21 r 2(6) of the ROC. First, it must be shown that the appellant has “refused or neglected” to pay the outstanding costs (Chloe V at [31]–[32]). Second, even if the court is satisfied that the appellant has refused or neglected to pay the outstanding costs, it retains a discretion to refuse to stay or dismiss the appeal under O 21 r 2(6) of the ROC. In the context of an appeal, however, the Court of Appeal held that the situations in which the court would exercise its discretion to allow the appeal to proceed should be “extremely limited” (Chloe V at [36]).

4 A key task for this court in determining the Application was to consider whether the “extremely limited” standard articulated in Chloe V should likewise govern the exercise of the court’s discretion where a claimant seeks to strike out a defence by virtue of the defendant’s refusal or neglect to pay outstanding costs that were ordered against it during the interlocutory stages of an action. This court concluded that it should not. The striking out of a defence, which would deny a defendant the right to defend the claim on the merits, should be an order of last resort under O 21 r 2(6) of the ROC. Instead, a more flexible approach should guide the exercise of the court’s discretion at the second stage, underpinned by proportionality and the recognition that, save in exceptional cases, a defendant should not be deprived of the opportunity to defend a claim on its merits solely because of a failure to pay outstanding costs.

5 Applying this modified approach, the court allowed the Application in part and ordered that the defendants be debarred from filing further interlocutory applications (with a stay of any outstanding interlocutory applications that were filed by the defendants) until they had satisfied both outstanding costs orders in full.

6 On 7 May 2024, the claimants sued Wonderz Pty Ltd (“Wonderz”), and the defendants, ie, Halalxpert Pte Ltd (“Halalxpert”) and ARK Group of Companies Pte Ltd (“ARK”), for breach of contract. According to the claimants, they were lay investors who separately entered into “Contract Agreements for Sheep Meat Trading Program (SMTP)” with Wonderz and the defendants in 2022 (“the Agreements”). Wonderz did not enter an appearance as it was insolvent.

7 Wonderz provided wethers (castrated male sheep) for meat trading and pregnant ewes for the SMTP, whilst Halalxpert administered the SMTP on behalf of Wonderz and the defendants. In turn, ARK managed the SMTP and ensured that it was Syariah compliant.

8 In their statement of claim, the claimants pleaded that they invested sums for wethers in Australia for trading in the halal meat market for a period of 13 months, under separate agreements. Both claimants claimed that they had opted for the “Compounded Profit Earned” option in the Agreements for which they were each entitled “to switch between receiving a share of the profits earned each month”. Luqman pleaded that he had invested the sum of $45,000 for 150 wethers. His contract matured on or about 7 June 2023. Based on Schedule I of his agreement, Luqman was to receive a sum of $141,229.28 on maturity of his contract. Nelli, on the other hand, invested the sum of $30,000 for 100 wethers. Her contract matured on or about 7 September 2023. Based on Schedule I of her agreement, Nelli was to receive a sum of $94,152.85 on maturity of her contract.

9 According to the claimants, in breach of the Agreements, Wonderz and the defendants failed to fulfil their obligations and decided to terminate the SMTP on or around 22 November 2023, when Halalxpert sent an undated “Agreement for Refund of Principal Amount for the Termination of Sheep Meat Trading Program” (“Refund Agreement”). This agreement provided that the claimants would receive the sums they had invested within 180 days, but Wonderz and the defendants failed to pay the proceeds “despite numerous requests and demands” in breach of the Refund Agreement. This led to the claim in OC 706 where Luqman and Nelli respectively sought $141,229.28 and $94,152.85 in damages.

10 The defendants denied the claim in full. According to the defendants, Nelli’s husband, one Jumari Naiyan, was the shareholder, corporate secretary, and managing director of Halalxpert with full control of the company until 12 March 2023. Further, various terms including the following must be implied into the Agreements to give meaning to the words “Syariah Compliance”: (a) the underlying business shall have an element of risk sharing; (b) investors agree to bear the loss; and (c) recovery of the principal sums invested is not guaranteed. The Refund Agreement was also unenforceable as the claimants did not provide valuable consideration, and in any case it was entered into under a unilateral mistake of Halalxpert who had falsely believed that it was liable to the claimants under the Agreements.

11 On 21 February 2025, the defendants filed DC/SUM 330/2025 (“SUM 330”), a summons to strike out the entire claim against them on the basis that it (a) disclosed no reasonable cause of action; (b) was an abuse of process of the court; and (c) was in the interests of justice to be struck out. SUM 330 was dismissed by a Deputy Registrar (“the DR”) on 6 August 2025 with costs of $4,000 (all-in) ordered against the defendants.

12 Dissatisfied, on 18 August 2025, the defendants appealed against the DR’s decision to a District Judge in chambers (“the learned DJ”) vide DC/RA 47/2025 (“RA 47”). RA 47 was dismissed by the learned DJ on 22 October 2025, with costs fixed at $5,000 (inclusive of disbursements) in favour of the claimants.

13 The defendants filed a further appeal to the General Division of the High Court (“General Division”) vide HC/RAS 16/2025 (“RAS 16”) on 22 October 2025. RAS 16 was, however, deemed withdrawn on 3 December 2025 as the defendants had failed to file the requisite documents under O 18 r 21(5) of the ROC.

14 Subsequently, on 21 May 2026, the claimants filed the Application on the basis that the defendants had failed to comply with the two outstanding costs orders made against them, totalling $9,000 (“the Outstanding Costs Orders”).

15 This court first heard the Application on 17 June 2026. In submissions, the claimants relied mainly on the Appellate Division of the High Court’s decision of Huttons Asia Pte Ltd and another v Chen Qiming [2024] SGHC(A) 33 (“Huttons Asia”). However, as the court had pointed out to counsel for the claimants, Huttons Asia primarily discussed the contrast between the present position under O 21 r 2(6) of the ROC (which expressly stipulates that the court has the power to stay an appeal pending payment of the costs ordered) and the prior approach under the Rules of Court (2014 Rev Ed) (“ROC 2014”). Under the old approach, special or exceptional circumstances were required before the court would invoke its inherent powers under O 92 r 4 of the ROC 2014 to stay an appeal pending payment of the costs that were ordered below. The main purport of Huttons Asia was that the “special or exceptional circumstances” threshold was no longer applicable in light of the express power under O 21 r 2(6). Huttons Asia did not expressly set out the test to be employed in exercising the court’s power under O 21 r 2(6) of the ROC.

16 Instead, a more appropriate and relevant authority was the Court of Appeal’s decision in Chloe V (which was cited by the defendants). However, counsel for the claimants had overlooked Chloe V and required time to consider it. Moreover, counsel informed the court that he did not have the opportunity to consider the reasons set out in the defendants’ affidavit on why they were unable to comply with the Outstanding Costs Orders. Those reasons were central to the determination of the Application. In the circumstances, the hearing was adjourned. Both sides were also directed by this court to consider the English High Court authority of Beech Hill Capital Limited v Lucas Duplan & Ors [2026] EWHC 1390 (Comm) (“Beech Hill”), which directly dealt with the situation where a defendant (as opposed to an appellant on appeal) had failed to pay outstanding costs.

17 Subsequently, the Application was heard substantively on 8 July 2026. In the defendants’ affidavit, the defendants averred that they did not have any funds to satisfy the Outstanding Costs Orders as (a) Halalxpert’s bank account was closed in or around June 2025 as it was unable to maintain a minimum monthly balance; and (b) ARK had never maintained a bank account. ¹ The defendants also alluded to the general downturn in the Australian livestock industry from April 2023, which seriously affected sheep meat prices. ² In short, they were financially impecunious and hence were unable to satisfy the Outstanding Costs Orders. The non-payment was not due to any refusal or neglect on the part of the defendants. ³

18 However, as pointed out by the court during the hearing, the defendants’ affidavit was bereft of any documentary evidence such as financial records and bank documents, which would have added substance to their claim of financial impecuniosity. Perhaps because they had themselves conducted the proceedings in a less-than-ideal fashion (as outlined at [15]–[16] above), the claimants did not object to the filing of a supplementary affidavit by the defendants subject to the question of costs.

19 Had the claimants objected to the filing of a supplementary affidavit, this court would likely have sustained that objection in view of the strict requirements for allowing a further affidavit (see Mazzagatti, Francesco v Alliance Petrochemical Investment (Singapore) Pte Ltd [2025] SGCA 46 (“Mazzagatti”) at [35]–[37]). In the main, when a party’s conduct indicated that a further affidavit is needed to supplement his defective or ill-prepared affidavit, and there are no good reasons to explain the defect, the court would be unlikely to exercise its discretion to allow a further affidavit (Mazzagatti at [36]). The financial documents that were missing in the original affidavit were clearly relevant information which should have been adduced at the outset, but they were not. Instead, the defendants made bare allegations of their financial problems and only exhibited some news articles on the general downturn of the sheep farming industry in Australia. This court accordingly allowed the defendants to file supplementary affidavits exhibiting such essential documents by 21 August 2026. A further hearing was fixed on 2 September 2026.

20 On 18 August 2026, at the eleventh hour of the court’s very liberal six-week period to file their supplementary affidavits, the defendants wrote in seeking a month’s extension of time to file the affidavits. The claimants objected to the extension of time by their letter to court dated 19 August 2026.

21 According to the defendants, in light of their financial constraints, they did not have sufficient funds available to engage their existing accountants to finalise the respective companies’ financial statements and were “exploring the possibility of engaging suitably qualified overseas accountants or accounting service providers who may be able to assist in preparing the required financial statements at a more affordable cost”. ⁴ More time was therefore required to prepare the financial statements. For completeness, the letter to court contained several bank inquiry slips from Maybank indicating that Halalxpert’s bank account was closed with no balance.

22 This court summarily refused the defendants’ request on 21 August 2026 and directed that the further hearing fixed on 2 September 2026 was to stand. In deciding whether an extension of time should be granted generally in interlocutory applications, the following legal principles, as summarised by the General Division in Affert Resources Pte Ltd (in compulsory winding up) v Industries Chimiques du Senegal and another [2024] 4 SLR 258 at [26], apply:

23 The court was mindful that the refusal of an extension of time should not operate merely as a punishment for a procedural breach, particularly where it would deprive a party of an opportunity to have the relevant issues determined on their merits. That being so, this consideration did not apply in the present case. As stated at [19] above, the financial documents should have been exhibited in the defendants’ original affidavit. Despite this, this court exercised its discretion generously and granted the defendants permission to supplement their evidence.

24 More importantly, the reason advanced by the defendants did not justify the extension sought. The defendants appeared to have proceeded on the premise that they had to engage accountants to prepare or finalise their financial statements. That was not what the court had directed. The defendants were only required to produce documentary evidence to substantiate their alleged financial impecuniosity, which could have included bank statements, documents evidencing the closure of bank accounts and other existing financial records. It was also telling that the Maybank inquiry slips were dated a few days prior to the letter to court.

25 Nor did the defendants explain at all what steps they had taken during the six weeks afforded to them to obtain the necessary documents. Their bare statement that they were “exploring the possibility” of engaging more affordable accountants or accounting service providers did not explain why the documents which the court had granted them the indulgence to produce could not have been obtained within that period. It was also only three days before the deadline that the defendants sought a further extension of one month. In the court’s view, the defendants had clearly failed to furnish a satisfactory explanation for requiring an extension of time.

26 Lastly, the refusal of the extension did not deprive the defendants of the opportunity to substantiate their claim of financial impecuniosity. They remained at liberty to file any documentary evidence that was already in existence to substantiate their financial position. The fact that further time might have enabled the defendants to obtain additional evidence did not, in light of the considerations outlined above, justify a further one-month extension. In contrast, granting an extension of time would have required the further hearing fixed on 2 September 2026 to be vacated and further delayed the determination of the Application and the progress of the entire action to trial.

27 Consequently, the defendants’ request for a one-month extension to file their supplementary affidavits was rejected, although a final short extension of time to 26 August 2026 was granted for the affidavits to be filed.

28 Subsequently, the defendants duly filed their supplementary affidavits: (a) an affidavit deposed by Imran Musa (“Imran”), the director of Halalxpert, dated 26 August 2026; and (b) an affidavit deposed by Muhammad Khalis Imran, the sole shareholder and a director of ARK, dated 23 July 2026.

29 On 2 September 2026, after hearing the parties, this court allowed the Application in part by ordering that the defendants be debarred from taking out any further interlocutory applications until the Outstanding Costs Orders had been satisfied in full.

30 According to the claimants, the defendants’ failure to pay the Outstanding Costs Orders amounted to a refusal or neglect to pay which justified the grant of the Application. The failure to pay was not an isolated oversight, but rather a persistent failure to comply with orders of court. ⁵

31 As for the defendants’ professed impecuniosity, this was difficult to reconcile in light of their continued ability to fund the present litigation. They pointed to the defendants’ three earlier unsuccessful applications and their continued preparation for the proceedings in OC 706, including an intended application for certain witnesses to give evidence by video link. These matters suggested that, notwithstanding the defendants’ assertion that they had no funds or bank account, they continued to have access to funds for the litigation. ⁶

32 The claimants also relied on the purported continuance of commercial activity on the part of the defendants, by pointing out that: (a) the defendants failed to explain their current operations with Halal Centre Australia Pty Ltd (“Halal Centre Australia”), which the claimants contended had taken over the role of Wonderz; and (b) Halalxpert’s website was still live, despite the defendants’ repeated claim that they had no money. ⁷ In this connection, the claimants submitted that the defendants had not produced sufficient evidence to substantiate their assertion of financial impecuniosity. Moreover, the defendants failed to provide full and frank disclosure of their financial position by failing to disclose their assets, bank statements and liabilities. ⁸ The claimants further contended that the defendants had not demonstrated what steps, if any, they had taken to obtain the funds required to satisfy the Outstanding Costs Orders. ⁹

33 Finally, the claimants contended that it would be unfair for them to be required to incur further expenditure in continuing the proceedings while the defendants remained in default of the Outstanding Costs Orders. Accordingly, an unless order should be made to compel the defendants to satisfy the Outstanding Costs Orders with the consequence that the Defence be struck out if such costs were not paid within 14 days. ¹⁰ It should be noted that the seeking of an unless order was an alternative prayer of the Application. The main prayer was for the Defence to be struck out forthwith, but over the course of submissions, the claimants revised their position and sought only an unless order.

34 The defendants did not dispute that the two costs orders remained outstanding. Their main submission, however, was that the non-payment stemmed from genuine financial inability, rather than any deliberate refusal or neglect to comply with the Outstanding Costs Orders. ¹¹ In support of their alleged financial impecuniosity, the defendants pointed to the fact that Halalxpert’s Maybank account had been closed on 19 July 2025 because it was unable to maintain the minimum monthly balance, and that ARK had never maintained a bank account in Singapore or elsewhere. ARK also had a paid-up capital of only $100. ¹²

35 The defendants also sought to account for the monies previously received in connection with the SMTP by arguing that the monies received by Halalxpert were remitted to Wonderz when sheep meat trading opportunities arose. However, the sheep meat trading business subsequently suffered a downturn which resulted in the eventual winding up of Wonderz. ¹³

36 The defendants further submitted that their continued participation in the litigation did not undermine their claim of impecuniosity. The mere fact that they continued to be legally represented and intended to rely on witnesses and expert evidence did not, without more, demonstrate that they had sufficient resources to satisfy the outstanding costs orders. ¹⁴ In this regard, litigation was being funded personally by Imran, who was not himself liable under the Outstanding Costs Orders. The mere fact that Imran provided funds for the present litigation did not render his assets those of the defendants or amount to his assumption of their liabilities to satisfy the Outstanding Costs Orders. Further, the defendants remained indebted to their solicitors for substantial legal fees, as Imran had only been able to meet the minimum filing expenses necessary to maintain the Defence out of his limited income and savings. ¹⁵

37 Relatedly, there was no evidence of any external investor, litigation funder or other source from which the defendants could obtain substantial funds. Accordingly, Imran’s ability to meet only the minimum expenses required to maintain the Defence could not reasonably support an inference that the defendants were capable of raising the funds necessary to satisfy the Outstanding Costs Orders. ¹⁶

38 As regards the claimants’ reliance on Halalxpert’s website and its apparent relationship with Halal Centre Australia, the defendants submitted that these matters did not undermine their evidence of impecuniosity. ¹⁷ The defendants further sought to distinguish Beech Hill. They pointed out that the defendants there had not asserted impecuniosity or contended that the order sought would stifle their substantive defence. More importantly, the order in Beech Hill merely prevented the defendants there from commencing or pursuing further applications while the costs remained unpaid. By contrast, the relief sought here could result in the Defence itself being struck out and judgment being entered without a trial on the merits. ¹⁸

39 The defendants also maintained that they stood in a different position from that of the appellant in Chloe V. The defendants had not commenced the present proceedings and were seeking only to defend the claim brought against them. The merits of their Defence had yet to be adjudicated. Accordingly, striking out the Defence would be disproportionate and deprive the defendants of the opportunity to defend the claim substantively. ¹⁹

40 The parties were in agreement that the first stage of the Chloe V test applied to the present Application to determine if the defendants had “refused or neglected” to comply with the Outstanding Costs Orders. This court had no reason to disagree. The issue for the court’s determination was whether the “extremely limited” standard articulated by the Court of Appeal at the second stage of the Chloe V test likewise applied to the present Application.

41 At the second stage of the Chloe V test, the court retained a discretion to refuse to stay or dismiss an appeal even where the appellant had been found to have refused or neglected to pay the outstanding costs (Chloe V at [36]). However, the situations in which the court would exercise its discretion to allow the appeal to proceed were described as “extremely limited” by the Court of Appeal in Chloe V. The justice of the case must strongly demand that the appeal be heard (Chloe V at [36]).

42 As mentioned, there was no reported decision on how the court’s discretionary powers should be exercised under O 21 r 2(6) of the ROC after it concludes that a defendant has failed to comply with outstanding costs orders made against it. The question was whether this “extremely limited” standard should be transposed to the present context, such that, once a defendant was found to have refused or neglected to pay outstanding costs, the court should ordinarily strike out the defence.

43 Initially, in response to the court’s invitation to consider the English High Court’s decision of Beech Hill, the defendants maintained that Chloe V is “binding on all lower courts in Singapore”, including this court. However, as the court alluded to during oral submissions, the purpose of referring Beech Hill to the parties was because it dealt directly with the situation where a defendant (as opposed to an appellant) had failed to pay outstanding costs entered against it. Following the court’s observations during the hearing that should the “extremely limited” standard articulated in Chloe V be applied to the discretionary stage of the present Application, the defence would likely have been struck out if it were found that the defendants had refused or neglected to comply with the Outstanding Costs Orders, counsel for the defendants accepted that this was not the case.

44 In this court’s view, the “extremely limited” standard pronounced by the Court of Appeal at the second stage of the Chloe V test should not be transposed wholesale to an application under O 21 r 2(6) of the ROC to strike out a defence by virtue of a defendant’s failure to pay outstanding costs. Chloe V concerned the situation when an appellant fails to pay outstanding costs in the proceedings below. Granted, the Court of Appeal did hold that “an appellant should not ordinarily be allowed to ignore costs orders with impunity” (at [36]), and this reasoning would similarly apply to defendants at first instance. It remains the case, however, that defendants at first instance stand in a vastly different position from appellants on appeal. An appellant has already had its claim or defence substantively determined below. Indeed, Chloe V itself proceeded on the basis that the respondent had already “secured a victory”, while the appellant’s case had been “found to be without merit by the lower court” (at [1]). This is also why, in the appellate context, the findings of a trial judge are taken as prima facie correct and should not be disturbed in the absence of sound reasons: Charles Lim Teng Siang and another v Hong Choon Hau and another [2021] 2 SLR 153 at [62]. Further, the successful respondent has already incurred costs in obtaining the judgment below and, as the Court of Appeal observed in Chloe V at [1], has every right to seek payment of those costs before being required to incur further costs defending that judgment on appeal.

45 Accordingly, there were sound reasons of principle and policy for requiring a party who seeks to change the status quo by way of an appeal should be made to pay outstanding costs below, on pain of having the appeal stayed or dismissed, if that party has been found to have refused or neglected to satisfy the outstanding costs.

46 Unlike an appellant, who voluntarily invokes the court’s appellate jurisdiction to overturn an existing judgment, a defendant at first instance is brought before the court at the election of the claimant (see SIC College of Business and Technology Pte Ltd v Yeo Poh Siah and others [2016] 2 SLR 118 at [75]). The power to strike out pleadings has consistently been described as draconian and is exercisable only in plain and obvious cases (see Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others [1997] 3 SLR(R) 649 at [18] and [39]; Leong Quee Ching Karen v Lim Soon Huat and others [2023] 4 SLR 1133 at [25]). Striking out a defence summarily deprives the defendant of the opportunity to defend itself at trial and, in this court’s view, should not ordinarily be the automatic consequence of a defendant’s refusal or neglect to pay outstanding costs. The consequences of the respective orders are also materially different. A stay or dismissal of an appeal leaves intact an existing judgment rendered after the lower court’s substantive determination. By contrast, striking out a defence ordinarily results in judgment being entered without any determination of the defendant’s liability on the merits.

47 For the foregoing reasons, this court did not consider that the Court of Appeal intended the “extremely limited” standard articulated in Chloe V at [36] to govern the exercise of a court’s discretion where a claimant sought to strike out a defence under O 21 r 2(6). In particular, it did not follow from a finding at the first stage that a defendant had refused or neglected to pay outstanding costs that its defence should ordinarily be struck out.

48 Having concluded that the “extremely limited” standard in Chloe V did not govern the exercise of discretion in the present context, this court was left to determine the principles that should guide the discretionary stage after a defendant had been found to have refused or neglected to pay outstanding costs. After all, discretion must be exercised judicially, in accordance with well-established principles: see Lee Sian Hee (trading as Lee Sian Hee Pork Trader) v Oh Kheng Soon (trading as Ban Hon Trading Enterprise) [1991] 2 SLR(R) 869 at [5].

49 In Beech Hill, the claimant sought an order debarring the defendants from filing further applications until they had complied with three outstanding costs orders made against them (Beech Hill at [3(ii)] and [7]). The defendants accepted that they were in breach of the court’s previous costs orders and did not contend that they had failed to pay on the grounds of impecuniosity or stifling (Beech Hill at [37]). The English High Court, after surveying several cases, concluded that the English courts have a case management power, derived from the court’s inherent powers, to impose conditions on a party for failing to pay one or more prior costs orders in the same proceedings (Beech Hill at [33(i)–(ii)]). In exercising this discretionary power, the court must have regard to (Beech Hill at [33(iv)]):

50 Further, there is no rigid rule that the court must impose conditions whenever a costs order remains unpaid. The court retains discretion that must be exercised in light of all the relevant circumstances. That said, the balance will ordinarily favour the imposition of conditions where a party has failed to comply with a costs order without satisfactory explanation, such that the reasonable inference is that the non-payment amounts to wilful disobedience of the court’s order (Beech Hill at [33(vi)]). If the court decides to exercise its discretion, there are a range of orders it may make, including debarring a defendant from defending or striking out a defence. However, the court must be careful to ensure that the order is proportionate (Beech Hill at [33(v)]). Lastly, the court will usually make an order on an unless basis rather than simply ordering the immediate imposition of a sanction (Beech Hill at [33(vii)]).

51 Applying the above principles, the English High Court in Beech Hill allowed the claimant’s application to debar the defendants from filing further applications until they had complied with three outstanding costs orders. In allowing the application, the court took into account, among other things, the following circumstances: (a) the defendants were in breach of the prior costs orders which had been outstanding for some considerable time; (b) the orders were all made at a time when the defendants were legally represented; (c) no explanation had been offered for the defendants’ failure to comply with the orders; (d) the defendants did not allege that they were impecunious nor that the payment of the outstanding costs would stifle their defence of the proceedings; (e) the defendants did not allege that the debarring order would affect their right to a fair trial or access to justice; (f) the defendants did not even make a part payment of the sums due; and (g) the claimant faced a series of applications from the defendants which had not been pursued (Beech Hill at [48]).

52 Ultimately, the English High Court found that it would be unfair to expect the claimant to incur expenses dealing with the defendants’ applications in circumstances where the defendants had apparently deliberately chosen not to discharge costs orders payable to the claimant (Beech Hill at [48(ix)]). The order preventing the filing of further interlocutory applications was reasonable and proportionate as the defendants would still be able to defend the claim substantively (Beech Hill at [49]).

53 Although the English and Singapore approaches share common underlying concerns, they differ in their procedural foundation and structure. To begin, the English courts have had to rely on their inherent case management powers as there is no equivalent of O 21 r 2(6) of the ROC, which confers an express, standalone power to stay or dismiss an application, action or appeal (or make any other order) where a party has refused or neglected to pay costs. Moreover, it appears that the court’s inherent powers in England are only engaged where outstanding costs have not been paid in the same proceedings (see Beech Hill at [19] and [33(i)]), but O 21 r 2(6) of the ROC goes further to provide that adverse consequences may follow “whether the costs were ordered in the present proceedings or in some related proceedings [emphasis added]”. Another key difference is that the English courts consider the exercise of their powers as a whole, whilst following the guidance of the Court of Appeal in Chloe V, the approach in Singapore proceeds in two stages: first, whether the defaulting party has “refused or neglected” to pay the outstanding costs; and second, if that threshold is crossed, whether an adverse order should be made and, if so, what form that order should take.

54 Two further points may be made. First, it was held in Beech Hill at [33(iv)(c)] that the court must consider “all of the available options including other enforcement mechanisms outside the proceedings (including the usual procedures for enforcement of judgment debts) and the full range of possible orders within the proceedings designed to secure compliance with the court’s previous order(s)”. In the court’s respectful view, the claimant should not ordinarily be required to pursue alternative enforcement mechanisms before seeking relief under O 21 r 2(6) in view of the following pronouncement by the Court of Appeal at [34] of Chloe V, which should apply to both defaulting appellants and defendants:

55 Second, although the English High Court in Beech Hill referred to “a party’s right to a fair trial under Article 6 of the ECHR” (at [33(iv)(e)]), Singapore is not a signatory to the European Convention on Human Rights. While Art 9(1) of the Constitution of the Republic of Singapore (2020 Rev Ed) guarantees a right to a fair trial (Howe Wen Khong Rocky and others v Attorney-General [2026] SGCA 39 at [48]), this does not amount to a freestanding constitutional right to a fair trial in ordinary civil proceedings, unlike Art 6(1) of the ECHR, which expressly extends to the determination of “civil rights and obligations”. Article 9(1) is instead concerned with the guarantee that “[n]o person shall be deprived of his life or personal liberty save in accordance with law” [emphasis added]. Nevertheless, the Ideals in civil procedure under O 3 r 1 of the ROC, which have been described as “akin to constitutional principles by which the parties and the Court are guided in conducting civil proceedings” (Dai Yi Ting v Chuang Fu Yuan (Grabcycle (SG) Pte Ltd and another, third parties) [2023] 3 SLR 1574 at [13]), underscore the fundamental importance of procedural fairness in the conduct of civil litigation.

56 Apart from the above, the other principles set out by the English High Court in Beech Hill are relevant in guiding the court’s exercise of its discretion under the second stage in determining (a) whether an adverse order should be made and, if so, (b) the appropriate form of that order.

57 Before setting out the applicable principles in the exercise of the court’s discretion, it is appropriate to consider the following principles, concerning unless orders, from the Court of Appeal’s leading decision of Mitora Pte Ltd v Agritrade International (Pte) Ltd [2013] 3 SLR 1179 (“Mitora”):

58 Although Mitora concerned an unless order made in the context of case management rather than an application under O 21 r 2(6) of the ROC, the principles articulated by the Court of Appeal are equally applicable for the present purposes. This is because, in both situations, the court is concerned with whether to impose a procedural sanction that may have the ultimate consequence of striking out a party’s claim or defence, thereby depriving that party of a determination of its substantive rights on the merits. The rationale underpinning Mitora reflects broader principles governing the exercise of judicial discretion where a possible consequence is effectively to dispose of the case. Those principles include that such sanctions should be imposed only as a measure of last resort, that the conditions imposed should be proportionate to the default in question, and that the court should consider whether less severe measures would adequately address the prejudice occasioned by the default (Mitora at [45]). In this court’s view, those considerations apply with equal force when the court is asked, pursuant to O 21 r 2(6), to strike out a defence or make an unless order against a defendant for its failure to pay outstanding costs.

59 Drawing the foregoing principles together, the following two-stage framework should apply in an application under O 21 r 2(6) of the ROC by a claimant against a defendant who has failed to pay outstanding costs during the interlocutory stages of an action (ie, before the defence has been substantively determined at trial).

60 The first stage of the framework is identical to that set out by the Court of Appeal in Chloe V which concerns an application under O 21 r 2(6) against a defaulting appellant. Under the first stage, the claimant is required to show, on a prima facie basis, that the defendant has “refused or neglected” to pay the outstanding costs. The fact that the defendant has failed or omitted to pay the outstanding costs should suffice to demonstrate such a prima facie case: Chloe V at [31].

61 The burden then falls on the defendant to explain why the outstanding costs order has not been satisfied (Chloe V at [32]). As to what “neglect” entails, the “[m]ere omission to pay a debt on demand does not of itself constitute neglect to do so within the meaning of that provision”: Chloe V at [35], citing with approval Ng Tai Tuan v Chng Gim Huat Pte Ltd [1990] 2 SLR(R) 231 at [14]. Accordingly, “neglect” requires an omission to pay without reasonable excuse: Chloe V at [35].

62 If the defendant truly lacked financial resources, it may not be considered to have “refused or neglected” to pay the outstanding costs (Chloe V at [33] and [35]). However, it is incumbent upon such a defendant who claims that it lacks the financial resources to explain its financial position, including the provenance of the funds for the litigation (Chloe V at [33]). Further, it does not lie in the mouth of the defendant to claim that the claimant should take steps to enforce the outstanding costs order. The claimant should not have to incur additional costs and expenses to recover the outstanding costs (Chloe V at [34]).

63 If, and only if, it is established under the first stage that the defendant has “refused or neglected” to pay the outstanding costs, the inquiry proceeds to the second stage. At the second stage, the court retained a discretion whether to make an adverse order and (see Beech Hill at [33(vi)]), if so, as to the appropriate form of that order. In exercising its discretion, the court should have regard to all the circumstances, including the following non-exhaustive factors:

(a) The reasons why the unpaid costs orders were made. For example, where the costs were occasioned by the defendant’s breach of a court order, abuse of process, or other misconduct during litigation, a more serious sanction may be warranted.

(b) The amount of the outstanding costs relative to the value of the claim. Where the outstanding costs are substantial in comparison with the value of the claim, it may be appropriate to strike out the defence. Even then, it should generally be made on an unless order basis (see Beech Hill at [33(vii)]).

(c) The degree of the defendant’s culpability in failing to comply with the costs orders. In this regard, the reasons why the defendant has been found to have refused or neglected, at the first stage, to pay the outstanding costs will be relevant. A defendant whose conduct demonstrates deliberate or contumelious disregard of the court’s orders is more blameworthy than one whose failure, although unexplained or inadequately explained, does not evince such wilful disobedience.

(d) The prejudice to the claimant that has been caused by the non-payment.

(e) Whether the defendant has made genuine efforts to comply with the costs orders, for example by making partial payment, offering instalments, or proposing some reasonable arrangement.

64 Given that the striking out of a defence is the most severe sanction available under O 21 r 2(6) against a defaulting defendant, the court should first consider whether less intrusive and equally effective measures would adequately secure compliance with its earlier costs orders. Depending on the circumstances, such measures may include: (a) staying any outstanding interlocutory applications that have been filed by the defendant until outstanding costs have been paid; (b) precluding the defendant from taking out further interlocutory applications until outstanding costs have been paid (as was the case in Beech Hill); (c) awarding costs of the O 21 r 2(6) application in favour of the claimant on an indemnity basis; and (d) ordering the payment of the claimant’s claim or part thereof into court (see Mitora at [45(c)(ii)]).

65 It was undisputed that the Outstanding Costs Orders, totalling $9,000, remained unpaid. The claimants had therefore established, on a prima facie basis, that the defendants had “refused or neglected” to satisfy the Outstanding Costs Orders. The question was whether the defendants had discharged their burden of showing that their non-payment was due to a genuine financial inability, rather than a refusal or neglect to pay.

66 To begin with, the defendants’ evidence did not provide a sufficiently complete picture of their financial position. The evidence that Halalxpert’s Maybank account had been closed on 19 July 2025 because it was unable to maintain the minimum balance lent some support to its asserted impecuniosity. Likewise, ARK’s evidence that it had never maintained a bank account and had a paid-up capital of $100 was relevant. But these matters did not, without more, establish that the defendants had no financial resources available to them. In particular, the absence of a bank account said little about whether a company had assets or receivables. It was telling that despite being given the opportunity to supplement their evidence, neither defendant produced any existing financial documents which would shed light on the companies’ financial positions, such as financial statements, accounting records, bank statements or documents evidencing their assets and liabilities.

67 The defendants’ explanation concerning the SMTP funds likewise fell short. As mentioned, the defendants contended that the monies received by Halalxpert had been remitted to Wonderz as sheep meat trading opportunities arose, and that the sheep meat trading business subsequently suffered a downturn which culminated in the winding-up of Wonderz. Whilst the defendants annexed news articles on the downturn of the sheep meat trading industry in Australia, there was no documentary evidence of the transfer of monies. Such records, if the transfers had occurred as alleged, would ordinarily have been existing documents and did not require the defendants to engage accountants to prepare them. Even if the court had accepted that monies relating to the SMTP were indeed all remitted away to Wonderz, this did not provide a complete picture of Halalxpert’s and ARK’s financial positions. Nor did it explain whether the defendants had any other assets, liabilities or sources from which the comparatively modest sum of $9,000 in outstanding costs could have been raised.

68 More significantly, the defendants’ own evidence revealed that funds continued to be made available by Imran for the conduct of the litigation. The defendants relied on the fact that Imran was not personally liable under the Outstanding Costs Orders and contended that his personal assets could not be treated as assets of the defendants. However, the Court of Appeal in Chloe V expressly stated that where a party relied on impecuniosity under O 21 r 2(6) of the ROC, the provenance of its litigation funding was directly relevant. A third-party funder could not simply elect to finance one side of the litigation while declining to provide funds to satisfy the costs liabilities generated by that very litigation. The Court of Appeal regarded such an approach as “plainly self-serving”: Chloe V at [33]. On the facts of that case, the Court rejected the argument that controllers could provide financial support when it suited their interests but withhold such support for the payment of costs orders: Chloe V at [39].

69 The same reasoning applied here. The point was not that Imran was personally liable for the Outstanding Costs Orders, or that his assets were legally to be regarded as the defendants’ assets. Rather, the defendants could not maintain, on the one hand, that Imran was prepared to fund the defendants so that they could continue defending the action but, on the other, that Imran’s funding was confined to the defendants’ own litigation expenses and could not extend to satisfying the Outstanding Costs Orders.

70 There were two further issues. First, the defendants said that Imran had only been able to meet the minimum expenses necessary to maintain the Defence out of his “limited income and savings”, while the defendants remained indebted to their solicitors for substantial legal fees. This did not satisfactorily explain how the defendants were able to continue litigating. Second, the selective and piecemeal manner in which the defendants produced evidence of their financial position, despite having been afforded a further opportunity to substantiate their alleged impecuniosity, reinforced the conclusion that the defendants had failed to provide a reasonable excuse for their non-payment of the costs orders.

71 Lastly, before the court, counsel for the defendants also explained that he had advised Imran to wind up Halalxpert and not defend the action, but Imran was adamant that he would continue funding the defence as he wished to maintain his commercial reputation, instead of shutting Halalxpert down forthwith. Whatever the merits of that motivation, it did not detract from the fact that the defendants had failed to discharge their burden to displace the prima facie position that they had “refused or neglected” to satisfy the Outstanding Costs Orders. If anything, it demonstrated that Imran was making a considered choice to deploy his limited resources towards keeping Halalxpert’s defence alive because of his interest in preserving his commercial reputation, rather than towards satisfying the Outstanding Costs Orders.

72 For the foregoing reasons, this court had no hesitation in concluding that the defendants had “refused or neglected” to satisfy the Outstanding Costs Orders.

73 In determining the appropriate consequences, the court was of the view that granting the Application as sought (with the defence struck out either forthwith or on an unless basis) would effectively deny the defendants the opportunity to defend the claim on the merits. That would certainly have resulted in substantial prejudice. There was no positive evidence that the defendants had deliberately refused to comply with the Outstanding Costs Orders in bad faith despite being in possession of the requisite funds. All that was found above was that the defendants had failed to discharge their burden of showing that they had not “refused or neglected” to pay the outstanding costs. Accordingly, there was no deliberate or contumelious disregard (as contemplated at [63(c)] above) of the Outstanding Costs Orders. Moreover, the total amount of the unpaid costs, at $9,000, was relatively modest compared to the value of the claim, which exceeded $230,000.

74 Since the Outstanding Costs Orders were occasioned by interlocutory matters, the court found it appropriate to debar the defendants from taking out any further interlocutory applications in the action unless and until the Outstanding Costs Orders had been satisfied in full. Such an order was similarly made by the English High Court in Beech Hill. Any pending interlocutory applications that were filed by the defendants were also ordered to be stayed.

75 For completeness, the court was alive to the fact that such an order was not prayed for in the Application. The claimants contended that the order could be accommodated under the prayer in the Application for “[s]uch further or other relief as this Honourable Court deems fit”. However, as explained in Edmund Tie & Co (SEA) Pte Ltd v Savills Residential Pte Ltd [2018] 5 SLR 349 at [12] and Wong Shu Kiat and another v Chen Jinping Michelle (personal representative of the estate of Tin Koon Ming, deceased) and another [2023] SGHC 105 at [108], a prayer along such lines is intended to enable the court to make such orders that may facilitate the execution of the main orders, rather than a prayer for a substantive order.

76 That being said, the Application was expressly brought under O 21 r 2(6) of the ROC on account of the defendants’ failure to satisfy the Outstanding Costs Orders. That provision expressly empowered the court, once the requirements were satisfied, to stay or dismiss an application or action, “or make any other order as the Court deems fit”. The claimants had sought the more severe relief of striking out the Defence. The debarring order was instead a more limited response to the same underlying factual premise. Indeed, the central issue was whether the defendants had “refused or neglected” to pay the outstanding costs. There was also no unfairness to the defendants. The possibility of such an order had been clearly ventilated before the court as the parties had been specifically directed to address Beech Hill. In short, the debarring order was not a distinct substantive remedy introduced without notice, but a less intrusive order fashioned in response to the same default which formed the subject-matter of the Application.

77 For all the foregoing reasons, the court allowed the Application in part and ordered that the defendants be debarred from filing further interlocutory applications and that any outstanding interlocutory applications be stayed pending the full satisfaction of the Outstanding Costs Orders.

78 After the court had allowed the Application in part, the claimants sought costs fixed at $4,000 (all-in). The defendants also sought costs of $2,000 (all-in), on the basis that the claimants had not obtained the relief sought in the Application because the court had declined to strike out the Defence, whether immediately or on an unless order basis. Counsel for the defendants further submitted that the court had given the claimants “a way out”.

79 It was impossible to accept the defendants’ submission. Far from the notion that the claimants were given “a way out”, it was the court’s observations that the “extremely limited” standard in the second stage of Chloe V might not be appropriate that led counsel for the defendants to abandon his passionate position that the entirety of Chloe V was “clearly binding on this court”. Moreover, the defendants were also granted the liberty to supplement their ill-prepared affidavit. Therefore, if at all, it was the defendants who were afforded an avenue to continue their defence of the action.

80 Although the claimants did not obtain the precise relief sought in the Application, they succeeded on the central issue that the defendants had “refused or neglected” to satisfy the Outstanding Costs Orders and that an adverse order under O 21 r 2(6) of the ROC was warranted. The court accordingly made an order in the claimants’ favour, albeit one that was less severe than the striking-out relief they had sought. The fact that the court fashioned a more proportionate order obviously did not render the defendants the successful party in the Application. Nevertheless, the claimants’ failure to obtain the striking-out relief sought was a relevant consideration in determining the quantum of costs.

81 In the premises, costs were fixed at $2,000 (all-in) in the claimants’ favour.