Comfort Management Pte Ltd v OGSP Engineering Pte Ltd

JurisdictionSingapore
JudgeVinodh Coomaraswamy J
Judgment Date06 April 2022
Docket NumberSuit No 509 of 2017
CourtHigh Court (Singapore)
Comfort Management Pte Ltd
and
OGSP Engineering Pte Ltd and another

[2022] SGHC 77

Vinodh Coomaraswamy J

Suit No 509 of 2017

General Division of the High Court

Civil Procedure — Costs — Principles — Costs to follow event — Order 59 r 2(2) and O 59 r 3(2) Rules of Court (2014 Rev Ed)

Civil Procedure — Costs — Principles — Factors to consider in exercising judicial discretion to depart from general rule that costs followed event

Civil Procedure — Costs — Principles — Plaintiff's conduct warranting departure from general rule that costs followed event — Order 59 r 6A Rules of Court (2014 Rev Ed)

Held, allowing the plaintiff's costs in part:

(1) The general rule was that the court's discretion to award costs ought to be exercised to order costs to follow the event. The “event” for the purposes of the general rule was the outcome of the litigation overall: at [25], [26] and [85(b)].

(2) The starting point in exercising the discretion to award costs was ascertaining the event. This required the court to identify which party in substance and reality won the litigation. In commercial litigation, the event was typically in favour of the party whom the court had found was entitled to receive money: at [27] to [29].

(3) If the party who was successful overall had nevertheless failed on certain claims or issues, the court might make two types of order to reflect that outcome by way of a departure from the general rule. The first type of order was to deprive the successful party of the right to recover all or part of his costs from the unsuccessful party (“Type I order”). The second type was to require the successful party to pay all or part of the unsuccessful party's costs (“Type II order”): at [41].

(4) The fact that the successful party raised claims or issues in the litigation on which it failed was not, in itself, a reason for departing from the general rule: at [45(c)].

(5) A Type I order was justified under O 59 r 6A of the Rules of Court (2014 Rev Ed) (“the Rules”) when (a) the successful party failed to establish a discrete claim or issue which he raised in the litigation; and (b) he thereby unnecessarily or unreasonably protracted or added to the costs or complexity of the litigation: at [50].

(6) A Type I order adopted a broad brush or a rough and ready approach to deprive the successful party of a flat proportion or percentage of its costs. A neat segregation of the issues was not required: at [68].

(7) A Type II order was justified under O 59 r 6A of the Rules when (a) the successful party failed to establish a discrete claim or issue which he raised in the litigation; (b) he thereby unnecessarily or unreasonably protracted or added to the costs or complexity of the litigation; and (c) he raised the claim or issue improperly or unreasonably: at [45(d)], [45(e)], [50], [78] and [85(e)].

(8) Even if the three criteria for making a Type II order were satisfied, the court should consider making a Type I order instead, if it was practicable to do so. The court should make a Type II order only if the issues on which the successful party failed in the litigation could be segregated from the common costs and the other issue-based costs without that exercise itself leading to increased costs, further delay and satellite litigation, and there were good reasons to incur the additional time, cost and complexity associated with taxing or assessing all or part of both sides' costs in order to ascertain the net costs payable under the order: at [67] and [85(f)].

(9) The plaintiff was the successful party because the first defendant was found liable to pay the plaintiff a substantial sum. The event was thus in the plaintiff’ favour, and the plaintiff was prima facie entitled to recover its costs from the first defendant: at [36] and [39].

(10) A Type I order depriving the plaintiff of 50% of its costs as against the first defendant was justified. The six issues were sufficiently discrete in terms of the facts, the law and the evidence. Further, the plaintiff unnecessarily added to the length and the complexity of the proceedings by raising and pursuing the four issues on which it failed in whole or in part: at [89], [92], [98] and [101].

(11) A Type II order requiring the plaintiff to pay all or part of the first defendant's costs was not justified. The plaintiff's decision to advance the issues on which it failed was not unreasonable or improper in itself. It was also not practicable to make a Type II order in this action bearing in mind the difficulties in separating the common costs of the litigation from the issue-based costs, and also in separating the issue-based costs from each other: at [105].

(12) As regards the plaintiff's failed claim against the second defendant, there was no justification for visiting the costs of that claim on the first defendant either directly or indirectly. The plaintiff's claims against the second defendant were separate and distinct from the plaintiff's claims against the first defendant. In addition, the plaintiff had acted unreasonably in bringing its claims against the second defendant: at [143] and [144].

Case(s) referred to

AEI Rediffusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507 (refd)

AL Barnes Ltd v Time Talk (UK) Ltd [2003] EWCA Civ 402 (folld)

Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 (refd)

Burchell v Bullard [2005] EWCA Civ 358 (folld)

Calderbank v Calderbank [1976] Fam 93 (refd)

Comfort Management Pte Ltd v OGSP Engineering Pte Ltd [2020] SGHC 165 (refd)

Cutts v Head [1984] 2 WLR 349 (refd)

Element Six Technologies Ltd v IIa Technologies Pte Ltd [2020] SGHC 140 (distd)

Elgindata Ltd (No 2), Re [1992] 1 WLR 1207 (folld)

English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409 (refd)

Fox v Foundation Piling Ltd [2011] EWCA Civ 790 (refd)

HLB Kidsons v Lloyds Underwriters subscribing to Lloyds Policy No 621/PKID00101 [2007] EWHC 2699 (Comm) (folld)

Johnsey Estates (1990) Ltd v The Secretary of State for the Environment [2001] EWCA Civ 535 (refd)

Lim Lie Hoa v Ong Jane Rebecca [2005] 3 SLR(R) 116; [2005] 3 SLR 116 (folld)

Medway Oil and Storage Co Ltd v Continental Contractors Ltd [1929] AC 88 (folld)

Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd [2008] EWHC 2280 (TCC) (refd)

Ng Eng Ghee v Mamata Kapildev Dave [2009] 4 SLR(R) 155; [2009] 4 SLR 155 (folld)

Oshlack v Richmond River Council (1998) 193 CLR 72 (refd)

R v Lord Chancellor, ex parte Child Poverty Action Group [1999] 1 WLR 347 (refd)

Roache v News Group Newspapers Ltd [1998] EMLR 161 (refd)

Sharp v Wakefield [1891] AC 173 (folld)

Smithkline Beecham plc v Apotex Europe Ltd [2004] EWCA Civ 1703 (refd)

Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ 494 (refd)

Straker v Tudor Rose [2007] EWCA Civ 368 (folld)

Summit Property Ltd v Pitmans [2001] EWCA Civ 2020 (refd)

Then Khek Koon v Arjun Permanand Samtani [2014] 1 SLR 245 (refd)

Travelers Casualty and Surety Co of Canada v Sun Life Assurance Co of Canada (UK) [2006] EWHC 2885 (Comm) (refd)

Tullio Planeta v Maoro Andrea G [1994] 2 SLR(R) 501; [1994] 2 SLR 489 (refd)

Facts

At the trial of this action, the plaintiff and the first defendant advanced claims and counterclaims against each other raising six issues. The court decided two of the issues wholly in favour of the plaintiff and four of the issues wholly or partly in favour of the first defendant. As a result, the court entered judgment in favour of the plaintiff against the first defendant for the net sum of $363,030.51.

Both the plaintiff and the first defendant claimed to be the victor in the action and claimed to be entitled to recover the costs of the action in full from the other.

In the same action, the plaintiff also advanced a claim against the second defendant. The court dismissed the plaintiff's claim against the second defendant in its entirety.

Legislation referred to

Civil Law Act 1909 (2020 Rev Ed) s 12(1)

Rules of Court (2014 Rev Ed) O 22A, O 59 r 1(1), O 59 r 2(2), O 59 r 3(2), O 59 r 6A, O 59 r 7, O 59 r 9(4)(b) (consd)

Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) s 18(2) (consd)

Civil Procedure Rules 1998 (SI 1998 No 3132) (UK) rr 44.2(6)(a), 44.2(6)(f)

Paul Wong, ZhulkarnainbinAbdul Rahim, Andrea Gan, Philip TehandFrancis Wu (Dentons Rodyk&Davidson LLP) for the plaintiff and defendant in counterclaim;

Nicholas Lazarus (Justicius Law Corp) for the first defendant and plaintiff in counterclaim;

Lalwani Anil Mangan and Adrian Teo (DL Law Corp) for the second defendant.

6 April 2022

Judgment reserved.

Vinodh Coomaraswamy J:

1 I gave my judgment on the merits of this action in Comfort Management Pte Ltd v OGSP Engineering Pte Ltd and another[2020] SGHC 165 (“Comfort Management”). This judgment deals with consequential issues arising from Comfort Management. Those issues are principally the costs of the action.

Introduction

2 The subject matter of the action was the air conditioning ducting system and mechanical ventilation works (“the Works”) for a project in Jurong. Lead Management Engineering & Construction Pte Ltd (“Lead”) subcontracted the Works to the plaintiff under what I shall call “the Lead Contract”. The plaintiff in turn subcontracted the Works to the first defendant under what I shall call “the Comfort Contract”. The Comfort Contract was a lump-sum contract at a price of $1.25m. In all other respects, the Comfort Contract was back-to-back with the Lead Contract.

3 The second defendant was the plaintiff's project manager for the Works. The plaintiff engaged the second defendant to supervise the Works on site.

4 The first defendant commenced the Works in October 2013. In October 2014, before completing the Works, the first defendant demobilised its team and withdrew from the site. Various disputes arose between the parties. Those disputes led to the claims and counterclaims in this action.

5 Following an 81...

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