Airtrust (Hong Kong) Ltd v PH Hydraulics & Engineering Pte Ltd
Jurisdiction | Singapore |
Judge | Chan Seng Onn J |
Judgment Date | 23 August 2016 |
Neutral Citation | [2016] SGHC 167 |
Published date | 18 April 2017 |
Date | 23 August 2016 |
Year | 2016 |
Hearing Date | 18 May 2016 |
Plaintiff Counsel | Tan Chuan Thye SC, Avinash Pradhan, Alyssa Leong and Arthi Anbalagan (Rajah & Tann Singapore LLP) |
Defendant Counsel | Tan Chee Meng SC, Josephine Choo and Wilbur Lim (WongPartnership LLP) |
Court | High Court (Singapore) |
Citation | [2016] SGHC 167 |
Docket Number | Suit No 219 of 2013 |
These grounds pertain to my decision on the costs order for Suit No 219 of 2013 (“S 219/2013”). The trial for S 219/2013 was heard between July 2014 and August 2015. After hearing and considering the parties’ evidence and submissions, I gave judgment for the plaintiff, finding that the defendant was in breach of a sale and purchase agreement between the parties. The judgment is reported as
The plaintiff sought to recover costs on an indemnity basis, arguing that the defendant’s conduct of the case was so morally reprehensible and worthy of moral condemnation that indemnity costs were justified. I rejected the plaintiff’s submission and ordered the defendant to pay the plaintiff costs of and incidental to the action on the standard basis, to be taxed if not agreed. The plaintiff has appealed against my decision on costs, and I therefore set out the grounds for my decision.
During the course of oral and written submissions on costs, the parties referred me to a number of Singapore and English cases. In these grounds, I will discuss the authorities, summarise the relevant principles and explain the approach that I adopted to determine whether an order of indemnity costs was appropriate.
Background facts The disputeThe detailed facts of the dispute are set out in the Judgment. It suffices for me to briefly summarise the events leading up to the commencement of S 219/2013.
In 2007, the plaintiff entered into a sale and purchase agreement (“the Agreement”) with the defendant, which is a supplier, designer and manufacturer of heavy machinery for offshore use in the marine and oil and gas industry.1 The Agreement was for the purchase of a 300 ton reel drive unit (“RDU”) by the plaintiff from the defendant. Under the Agreement, the defendant was to ensure that the RDU was of merchantable quality, fit for the purpose for which it was intended and free from any latent or apparent defect in material or workmanship.2 The defendant was also contractually required to perform all work diligently, carefully, in a good and workmanlike manner and in accordance with accepted industry standards.3 The defendant was aware that the RDU was to be leased by the plaintiff to Trident Offshore Services, for the laying of undersea umbilical in the Bass Straits of Australia.4
The RDU was delivered to the plaintiff in April 2008 and thereafter mounted on board the “Maersk Responder”. On 20 May 2009, after one complete reel of umbilical was laid, a major failure of one of the gearbox assemblies occurred during the laying of a second reel. The hydraulic drive motor and gear assembly on one of the two towers of the RDU became detached from its mounting and fell off.5
The plaintiff commenced S 219/2013 against the defendant on 19 March 2013, seeking damages for breach of contract. The plaintiff also claimed that the defendant misrepresented that it had obtained full and proper certification of the RDU when it provided ABSG Consulting Inc (“ABSG”) with false input data.
The trial and my decisionThe trial was concerned only with liability, with damages (if any) to be assessed at a later stage. It was a lengthy trial involving a total of 24 witnesses, including 7 expert witnesses who gave evidence on various aspects of the design and construction of the RDU. The length of the trial and its technicality were largely attributable to the fact that numerous design and manufacturing defects were alleged by the plaintiff. Much time was also consumed by debate between the experts on the cause of the catastrophic failure of the RDU.
I delivered judgment on 30 November 2015. I held that the plaintiff was entitled to damages on the basis that the defendant had breached the Agreement by not delivering to the plaintiff an RDU that was of merchantable quality and fit for its purpose. I summarise my primary findings:
Given the circumstances, I found that this was a case in which the defendant’s behaviour was of such an outrageous and reprehensible nature as to call for the imposition of punitive damages.18 I therefore awarded the plaintiff damages for breach of contract and punitive damages to be assessed.19
The defendant’s appeal The defendant has filed an appeal only against the following aspects of my decision in S 219/2013:
I have set out the reasons for my decision in the Judgment. I will now explain my decision on costs, against which the plaintiff has taken up an appeal.
Submissions on costs On 18 May 2016, I heard the parties’ oral submissions on the basis on which costs were to be awarded. The plaintiff sought costs on an indemnity basis, claiming that there were exceptional circumstances which warranted a departure from the usual cost basis.20 It argued that the defendant’s conduct of the case was “so morally reprehensible and warranting of moral condemnation” that costs on an indemnity basis was justified, citing
The plaintiff’s submissions can be summarised as follows:
The defendant emphasised that following
I will describe the parties’ submissions in greater detail later in these grounds. After considering the parties’ oral and written arguments, I rejected the plaintiff’s submission that this was an appropriate case for costs on an indemnity basis to be ordered, and awarded costs to the plaintiff on the standard basis, to be taxed if not agreed.
The law on indemnity costsWhen costs are taxed on the indemnity basis, all costs are allowed except insofar as they are of an unreasonable amount or have been unreasonably incurred, and any doubts in these respects will be resolved in favour of the receiving party: O 59 r 27(3) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“Rules...
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