Afro-Asia Shipping Co (Pte) Ltd v Da Zhong Investment Pte Ltd and Others (No 2)

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 21 May 2004
• Neutral Citation: [2004] SGHC 105
• Date: 21 May 2004
• Subject Matter: Plaintiffs managing to prove only one minor portion of claim,Order 59 r 3(2) Rules of Court (Cap 332, R 5, 2004 Rev Ed),Principles,Whether defendants entitled to costs on indemnity basis,Defendants electing not to call any witnesses late into trial,Whether defendants should bear costs incurred by plaintiffs in preparing to cross-examine defendants' witnesses,Whether offer reasonable or genuine,Order 22A r 9(3) Rules of Court (Cap 332, R 5, 2004 Rev Ed),Civil Procedure,Whether defendants should bear costs of hearing fees thrown away,Offer to settle made by defendants,Plaintiffs failing in action,Whether plaintiffs entitled to raise arguments on substantive issues for justifying award of costs in their favour,Costs,Whether plaintiffs should pay defendants' costs,Order 35 r 4(3), O 59 r 3(2) Rules of Court (Cap 332, R 5, 2004 Rev Ed)
• Docket Number: Suit No 352 of 2001
• Published date: 08 June 2004
• Defendant Counsel: Hong Heng Leong, Ng Wai Hong and John Wang (Ang and Partners),Edwin Lee and Looi Ming Ming (Rajah and Tann)
• Court: High Court (Singapore)
• Plaintiff Counsel: Manjit Singh and Sree Govind Menon (Manjit Govind and Partners)

21 May 2004 Judgment reserved.

Judith Prakash J:

Introduction

1 This judgment deals only with the issue of costs in relation to the plaintiffs’ claims against the fourth and fifth defendants in this action, namely Trevi Contractors (Singapore) Pte Ltd (“Trevi”) and Chin Kok Kwong Design & Build Pte Ltd (“CKK”). The action was tried before me over an extended period of time in 2002 and 2003. On 21 November 2003, I issued my judgment ([2004] 2 SLR 117) dealing with the substantive issues in the case. In that judgment, I dismissed the plaintiffs’ claim against Trevi and, whilst I entered judgment for the plaintiffs against CKK, I did so on the basis that the plaintiffs had proved only one minor portion of their claim against CKK. I indicated in my judgment that I would hear the parties on costs.

2 The parties appeared before me on the issue of costs in January and February this year. Thereafter the plaintiffs and Trevi both put in written submissions. The situations of Trevi and CKK are not the same and distinct issues arise in each case. I will deal with these in turn.

Trevi’s claim for costs

3 The plaintiffs’ action against Trevi failed completely. Applying the usual rule prescribed by O 59 r 3(2) of the Rules of Court (in those circumstances would mean ordering the plaintiffs to pay Trevi’s costs. There was only one reason that I hesitated to make such an order. I had a concern over Trevi’s decision not to call any evidence. As I explained in my earlier judgment, before the trial started, Trevi had filed affidavits from seven witnesses whom they intended to call to give evidence on their behalf. They had also made disclosure of voluminous documents. The plaintiffs’ case closed on 10 April 2002. When the case resumed on 2 September 2002, the first three defendants opened their joint defence. This was concluded on 14 January 2003. At that stage, Trevi elected not to call any evidence. As the fifth defendants, CKK, also made that same election, the case then concluded. It had been anticipated that it would take a further eight days for Trevi and CKK to each present their evidence. Those eight days were vacated. After considering the evidence, I found that the plaintiffs had not proved their case against Trevi. I reserved the issue of the costs payable to Trevi, however, as I wished to give further consideration to the question whether Trevi should have to bear some of the costs incurred by the plaintiffs in preparing to cross-examine Trevi’s witnesses since such costs were thrown away by reason of Trevi’s election not to call evidence.

4 The plaintiffs submitted that Trevi should pay, on the indemnity basis, for all work done by them in preparing to cross-examine Trevi’s seven witnesses including their review of Trevi’s documents and other material and the getting up required. They pointed out that the work had been considerable. The affidavits of evidence-in-chief and documents filed by Trevi totalled 17,000 pages. Further, Trevi’s election not to call any witnesses had taken place only on the 33rd day of the trial. This was after hearing dates had been taken for Trevi’s witnesses. Despite the plaintiffs’ efforts to recover the costs of the hearing dates vacated because Trevi and CKK had not called witnesses, the amount recovered was $4,960 less than the sum that had been paid to the Registry. The plaintiffs submitted that Trevi should pay that sum of $4,960.

5 The plaintiffs filed supplementary submissions on 24 February 2004. In these they argued that Trevi had had actual knowledge of the damage and subsidence caused by their work to AA Building and that Trevi had contracted with the first defendants, for a financial consideration, to assume responsibility for dismantling certain collective supports which had been erected at AA Building. Various items of evidence were cited in support of the contention that Trevi’s work had caused damage to AA Building. The plaintiffs also argued that Trevi had caused actual damage by failing to remove the collective supports and to replace them with a permanent solution. Submissions were also made on alleged suppression of documents by Trevi over the course of the proceedings. The plaintiffs contended that all these matters should be taken into account in the decision on costs. I find the contents of the supplementary submissions totally irrelevant to costs and, further, to be misplaced. My judgment set out my reasons for finding that the plaintiffs had not proved that Trevi’s works had damaged AA Building. The plaintiffs have appealed against that finding. They are entitled to do so and to argue in the Court of Appeal that my finding was against the weight of the evidence. They are not, however, entitled to bring up to me their arguments on the substantive issues as a ground for justifying an award of costs in their favour when they have lost the substantive case.

6 Trevi also put in extensive submissions on costs. Much of their submissions consisted of replies to the plaintiffs’ arguments on the evidence and the alleged suppression of documents. I need not detail those replies here. On the specific question as to whether there should be any modification of the normal rule that costs follow the event to reflect the impact on the plaintiffs of Trevi’s decision not to call evidence, Trevi made the following points:

(a) The work undertaken by the plaintiffs in preparing to cross-examine Trevi’s witnesses was part of basic trial preparation and must have been completed long before Trevi’s election not to adduce evidence. There was no causal link between Trevi’s election and the plaintiffs’ preparatory work. Most counsel would commence preparing cross-examination questions after the exchange of the affidavits of evidence-in-chief. If that had happened in this case, the plaintiffs would have prepared for the cross-examination of Trevi’s witnesses in February 2002.

(b) The trial was set down originally for more than 20 days and parties must have expected to complete the entire trial within that period. As such, in any event, the plaintiffs must have been prepared for the cross-examination of Trevi’s witnesses by the date the trial started, which was 4 March 2002.

(c) Again, when the trial was rescheduled for another 15 days in September 2002, the plaintiffs must have been prepared by then to cross-examine Trevi’s witnesses.

(d) As preparing to cross-examine an opponent’s witnesses is a basic part of trial preparation, that preparation is very much part and parcel of the basic costs in any litigation that goes to trial and should not be used to penalise a defendant who elects to call no evidence.

(e) There is no causal link between the two. The preparation did not cause the election. As such there is no reason to penalise Trevi in costs for the plaintiffs’ preparation which was totally unrelated to the election.

7 Trevi submitted that there was nothing in O 35 r 4(3) of the Rules of Court that provides for a plaintiff to be compensated for the costs of preparing cross-examination that subsequently goes to waste. Order 35 r 5(3) gives a defendant a right not to call any evidence. It is therefore a wholly legitimate course of action for a defendant to choose to exercise that right if he deems it the most appropriate course to take in the circumstances of the action.

8 Trevi also argued that their election not to call evidence had saved the plaintiffs eight days of court time and the additional costs that those days would have given rise to. If the plaintiffs had won their case against Trevi, they would have won it at a much lower cost than if the election had not made. Even though the plaintiffs lost the case against Trevi, that defeat would still cost them less than if they had lost after cross-examining Trevi’s witnesses for eight days. In these circumstances, it would not be right in principle to reduce the costs payable by the plaintiffs to Trevi by recognising costs that the plaintiffs would have incurred in any case whether or not the election was made.

9 Having given the matter more consideration, I have concluded that in this case there is no reason not to apply the normal rule that costs follow the event. In my judgment, Trevi, having been successful in their defence of the plaintiffs’ claim, are entitled to recover the costs of that claim. No allowance need be made for the time spent by the plaintiffs in preparing to cross-examine Trevi’s witnesses. I accept that time taken to prepare cross-examination questions is a basic part of the preparation process whenever a matter goes to trial. The Rules of Court allow a defendant to elect at the end of the plaintiff’s case whether or not to call evidence. By the time the end of the plaintiff’s case arrives, all preparatory work in relation to the defendant’s witnesses should have been completed. It would not be right to penalise a defendant for adopting a course which the Rules of Court make available to him and which will also lead to the saving of costs in that the case will not be prolonged by the cross-examination of the defendant’s witnesses. If I were to reduce the costs payable to Trevi because they elected not to call evidence, I would be undermining the application and utility of O 35 r 4(3).

10 Whilst an election by a defendant not to call evidence should not result in him having to pay for the plaintiff’s costs of preparing for cross-examination, that does not mean that such an election can never have any consequences in relation to costs. When O 35 r 4(3) was first enacted, no hearing fees were payable by litigants. We now have a system whereby hearing fees are payable and, in the first instance, these hearing fees are payable by the plaintiff. If hearing days are paid for but not used, the Registry may, at its discretion, refund all or part of the fees depending on the circumstances. In many instances, no full refund of fees is made.

11 In this case, the plaintiffs paid a considerable sum of...