Cbx v Cbz

• Court: Court of Three Judges (Singapore)
• Judge: Judith Prakash JCA,Quentin Loh JAD,Jonathan Mance IJ
• Judgment Date: 21 June 2021
• Docket Number: Civil Appeal No 197 of 2020

CBX and another

and

CBZ and others

[2021] SGCA(I) 4

Judith Prakash JCA, Quentin Loh JAD and Jonathan Mance IJ

Civil Appeal No 197 of 2020

Court of Appeal

Civil Procedure — Costs — Principles — Singapore International Commercial Court (“SICC”) — Case commencing in General Division of High Court being later transferred to SICC — Applicability of O 110 Rules of Court (2014 Rev Ed) — Applicability of O 59 Rules of Court and Appendix G Supreme Court Practice Directions in assessment of post-transfer costs — Order 59 and O 110 Rules of Court (2014 Rev Ed)

Held, allowing the appeal:

(1) As the basis on which the Costs Judgment had been made no longer held after the Merits Judgment was set aside in CA 136, CA 197 should also succeed, and consequently the costs order made by the Judge set aside. However, while the appellants in CA 197 would have succeeded given their success in the substantive appeal (ie, CA 136), CA 197 would have been allowed and the Judge's orders as to costs adjusted downwards even if the Buyers had failed in their substantive appeal: at [7] and [43].

(2) There were two types of cases that were heard in and determined by the SICC. The first was a case that emanated from a fresh filing in the SICC Registry. Such a case was from its inception governed by O 110 of the Rules of Court (2014 Rev Ed) (“ROC”) and thus subject, always and only, to the costs regime established by O 110 r 46 of the ROC (“Rule 46”). Secondly, there was the case that was filed initially in the Registry of the High Court. This category of case was subject to the ROC generally (excluding O 110) and the applicable costs regime established by O 59, and the award of costs was subject to the guidance of Appendix G: at [17].

(3) The Judge's reliance on BYL v BYN[2020] 4 SLR 204 (“BYL (Costs)”), which he had previously decided, was misplaced. In BYL (Costs), the court had misinterpreted the deputy registrar's order by over-emphasising the word “all” at the expense of the phrases “shall continue to apply” and “after its transfer”, which also appeared in the direction. An order had to be read as a whole: one should not glean its meaning from one word when the thrust of the sentence was to the contrary effect. The deputy registrar's order did not disapply Appendix G to the steps taken in the proceedings before its transfer. It merely stated that whether the costs of whatever happened after the transfer would still be assessed in accordance with Appendix G or not was up to the SICC judge who heard the case. The order did not give the Judge the authority to disapply Appendix G from the earlier steps before transfer: at [25].

(4) In the absence of any order made by the Registrar handling the transfer to the SICC that Appendix G was entirely disapplied or of consent from both the parties to such disapplication, Appendix G would continue to be the guide for the assessment of pre-transfer costs. Whether it played a role in the assessment of post-transfer costs which, on the face of it, would be assessed under Rule 46 of the ROC, would depend on the circumstances of the case. In relation to pre-transfer costs, however, the losing party should not have to bear the burden of providing “compelling justification” why Appendix G should be referred to; rather it should be the party who wanted Appendix G to be departed from who needed to provide the justification for doing so: at [28].

(5) The Appendix G order did not bear the interpretation that the Judge gave it. Although the sentence construction of the Appendix G order differed somewhat from the order made in BYL (Costs), the term “proceedings in and arising from” in the Appendix G order was defined by the phrase “after its transfer to the [SICC]”. Rather than considering himself totally freed from the constraints of Appendix G, the Judge should have applied it to his assessment of the pre-transfer costs: at [29].

(6) The Judge stated at [12] of the Costs Judgment that: “Appendix G can serve as a useful reality test or starting point against which to evaluate whether costs are or are not reasonable within the terms of Rule 46”. The Court of Appeal did not agree with this statement in relation to the assessment of pre-transfer costs. In relation to such costs, Appendix G would be the starting point and then a judge would need to decide whether there were factors that justified a higher assessment of the costs, but, regardless, Rule 46 would not be applicable: at [29].

(7) The Court of Appeal's consideration of the appropriate quantum turned on two aspects. First, in relation to pre-transfer costs, the Court of Appeal found that determination of such costs had been done on the wrong basis, and so provided a ground for interference with the Judge's determination in principle. Second, the question arose as to whether the Judge's determination of post-transfer costs was reasonable. There needed to be a significant enough difference in the estimations of the appropriate level of costs made by the first instance court and by the appellate court before the appellate court would interfere: at [39] and [40].

(8) In the Court of Appeal's view, a sum of $25,000 would have been closer to the mark for the pre-transfer stage. While this sum was considerably higher than the normal figure of $24,000 under Appendix G for an originating summons matter taking two days and where there was no cross-examination, it reflected the complexity of the work required in order to attack an arbitration award under the International Arbitration Act (Cap 143A, 2002 Rev Ed). In this case three such awards were involved. As for post-transfer costs, the Judge's sum of $61,600 and his basis for arriving at that sum could be adopted as a starting point for the assessment of reasonable costs, although it would always remain open to the court to consider whether there should be any reduction of that sum in the light of the substantially lower figure which would have been recoverable under Appendix G had the case remained in the High Court. Given the success of the appellants in CA 136, the ascertainment of precise figures for costs was a theoretical exercise, and the Court of Appeal declined to posit a final figure. Suffice to say, however, the likely result of such an exercise would have to be lower by a significant enough amount than the $127,000 (the net figure after deduction of disbursements) which the Judge had awarded the Sellers for their legal costs to warrant appellate intervention: at [41].

Case(s) referred to

BXS v BXT [2019] 5 SLR 48 (refd)

BYL v BYN [2020] 4 SLR 204 (overd)

CBX v CBZ [2020] 5 SLR 184, SICC (refd)

CBX v CBZ [2021] SGCA(I) 3, CA (refd)

CPIT Investments Ltd v Qilin World Capital Ltd [2018] 4 SLR 38 (refd)

Sheila Kazzaz v Standard Chartered Bank [2021] 3 SLR 1 (distd)

Facts

On 5 November 2019, HC/OS 1388/2019 was filed in the High Court by parties referred to as the “Buyers” to set aside parts of two partial awards and a consolidated costs award (collectively, “the Awards”) rendered against them in two International Chamber of Commerce arbitrations. The Awards had been rendered in favour of parties referred to as the “Sellers”, who were named as the respondents in HC/OS 1388/2019.

On 14 February 2020, the High Court, on its own motion, ordered that the setting-aside proceedings were to be transferred to the Singapore International Commercial Court (“SICC”). The orders made by the deputy registrar at the time of the transfer included the following (the “Appendix G order”):

The issue whether the High Court costs scale and Order 59 of the Rules of Court should continue to apply to the assessment of costs in respect of proceedings in and arising from HC/OS 1388/2019, after its transfer to the Singapore International Commercial Court, is reserved to the Singapore International Commercial Court.

The proceedings were then re-designated as SIC/OS 1/2020 in the SICC. At the time of the transfer, parties had already filed their first round of affidavits. Thereafter, four further affidavits were filed and both parties put in written submissions before proceeding to the hearing. The proceedings were heard before the judge (“Judge”) over several hours on the morning of 15 June 2020, and his decision, CBX v CBZ[2020] 5 SLR 184 (“the Merits Judgment”), was delivered on 16 July 2020.

In the Merits Judgment, the Judge found in favour of the Sellers and gave his reasons for dismissing the Buyers' setting-aside applications in respect of all three Awards. This was followed by a subsequent hearing on costs, which led to another judgment, CBX v CBZ[2021] 3 SLR 10 (“the Costs Judgment”). By the Costs Judgment, the Buyers were ordered to pay the Sellers costs of $150,000 all-in (ie, inclusive of disbursements), with interest at 5.33% per annum from the date of the Costs Judgment. The basis of the award of costs was that as the Sellers had prevailed in the setting-aside applications, they should have the costs of those applications.

The Buyers appealed against both judgments. CA/CA 136/2020 (“CA 136”) was their appeal against the Merits Judgment whilst this appeal, CA/CA 197/2020 (“CA 197”), was the appeal lodged against the Costs Judgment. The appeals were heard together by the Court of Appeal. In a separate judgment on CA 136 which concerned the substantive merits of the case, the Court of Appeal concluded that the Merits Judgment should be reversed and that the Awards should be set aside.

In CA 197, the Buyers raised the following issues in their appeal against the Costs Judgment:

• (a) whether the Judge erred in finding that Appendix G would not (at least) be applicable to costs incurred pre-transfer of proceedings to the SICC;

• (b) whether the Judge erred in entirely disregarding the guidance of Appendix G in assessing the reasonableness of costs incurred post-transfer to the SICC; and

• (c) whether the Judge erred in finding that the sum of $150,000 (all-in) was “reasonable” in the circumstances.

The...