Elbow Holdings Pte Ltd v Marina Bay Sands Pte Ltd
Jurisdiction | Singapore |
Judge | Choo Han Teck J |
Judgment Date | 29 October 2014 |
Neutral Citation | [2014] SGHC 219 |
Court | High Court (Singapore) |
Docket Number | Suit No 954 of 2012 (Registrar’s Appeal No 239 of 2014) |
Published date | 11 November 2014 |
Year | 2014 |
Hearing Date | 24 July 2014,07 October 2014,27 October 2014 |
Plaintiff Counsel | Tan Weiyi, Lucas Lim and Chia Joanne (Wong & Leow LLC) |
Defendant Counsel | Alma Yong and Sim Mei Ling (WongPartnership LLP) |
Subject Matter | Civil Procedure,Security for costs |
Citation | [2014] SGHC 219 |
This is an appeal by the plaintiff, Elbow Holdings Pte Ltd (“Elbow”) against the decision of the Supreme Court Registrar (“Registrar”) in Summons No 2330 of 2014 (“Summons 2330 of 2014”) on 26 July 2014 to award security for costs amounting to $75,000 in favour of the defendant, Marina Bay Sands Pte Ltd (“MBS”). The Registrar ordered that the security be furnished within 14 days of that order, namely, by 10 July 2014 and further ordered a stay of proceedings in the interim pending the payment of security. To date, the plaintiff has not provided the security, nor has it paid costs (which were fixed at $5,000 including disbursements) arising out of the security for costs application.
Elbow is a Singapore incorporated company that owns and operates an Australian themed bar and bistro known as South Coast Bar & Bistro (“South Coast”) located at Marina Bay Sands Shoppes in Singapore’s Marina Bay Sands Integrated Resort. South Coast is Elbow’s only business. MBS is the landlord of and manages Marina Bay Sands Shoppes. On 8 March 2010, Elbow and MBS Pte Ltd entered into a lease agreement for units #01-R7 and #B1-R7 of Marina Bay Sands Shoppes. South Coast opened for business on 3 December 2010. Unit #01-R7 is the kiosk of South Coast, whereas #B1-R7 is the basement kitchen.
On 7 November 2012, Elbow commenced Suit No 954 of 2012 (“Suit 954 of 2012”) for damages for misrepresentation and breach of a collateral contract. Elbow says that in the course of negotiations for the lease agreement from March 2009 to early March 2010, MBS had made the following oral and/or written representations to Elbow:
Since Elbow’s commencement of Suit 954 of 2012, MBS has commenced two further actions against Elbow. Both actions are in relation to the leased units. The first is Suit No 702 of 2013 (“Suit 702 of 2013”) commenced on 5 August 2013 for further arrears allegedly due and owing for the period from 1 March 2013 to 1 August 2013. The second, Suit 553 of 2014 (“Suit 553 of 2014”) is a claim for arrears allegedly due and owing from September 2013 and May 2013 under the alleged restructured lease agreement and alternatively, the original lease agreement. In Suit 553 of 2014, MBS also seeks repossession of the units. The plaintiff obtained an order in Summons No 2654 of 2014 (“Summon 2654 of 2014”) on 31 July 2014 consolidating Suits 702 of 2013, 553 of 2014 and 954 of 2012. These suits will proceed as one action.
On 21 April 2014, MBS’s lawyers wrote to Elbow’s lawyers requesting security for costs in the sum of $150,000 by way of a banker’s guarantee. On 28 April 2014, Elbow’s lawyers replied, saying that their client will not agree to provide security. MBS then took out Summons 2330 of 2014 for security for cost amounting to $150,000. As mentioned in [1] above, the registrar ordered security against Elbow who now appeals against that order.
Section 388(1) of the Companies Act (Cap 50, 2006 Rev Ed) (“CA”) reads:
The inability to pay the defendant’s costs is one of two conditions for the courts to award security for costs. It must also be just to make such an order, having regard to all relevant circumstances (
Security for costs 388. –(1) Where a corporation is plaintiff in any action or other legal proceeding the court having jurisdiction may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.
I begin by determining if the first condition is satisfied. MBS’s lawyers argue there is reason to believe that Elbow will be unable to pay its (MBS’s) costs as Elbow is in a “poor financial situation”. MBS says that this is evidenced by: (1) Elbow’s own documents; (2) concessions made by Elbow’s Managing Director, Ms Kate McGettigan; and (3) Elbow’s failure to pay arrears due and owing from its lease of the units.
Elbow’s lawyers submit that MBS has not shown that Elbow will not be able to pay MBS’s costs:
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