Ganesan Carlose & Partners (sued as a firm) v Lee Siew Chun

• Jurisdiction: Singapore
• Judge: Kan Ting Chiu J
• Judgment Date: 27 June 1994
• Neutral Citation: [1994] SGHC 173
• Date: 27 June 1994
• Subject Matter: Whether costs recoverable need to be costs incurred in other proceedings,s 120 Legal Profession Act (Cap 161),Whether costs recoverable to be quantified on party-and-party basis or solicitor-and-client basis,Taxation,Costs,Whether costs recovered must be taxed,Costs as damages,Civil Procedure,Costs recoverable on the basis of foreseeability and reasonableness
• Docket Number: Suit No 2961 of 1987 (Civil Appeal No 40 of 1994)
• Published date: 19 September 2003
• Defendant Counsel: C Arul (C Arul & Pnrs)
• Court: High Court (Singapore)
• Plaintiff Counsel: Tay Siok Leng (Loh Lin Kok)

Background

This matter came before me on appeal from an assessment of damages. The order for assessment was made by Michael Hwang JC after the trial of the action between the plaintiff, the second and third defendants, and the third and fourth parties. The full judgment appears in [1993] 2 SLR 297 . The headnotes of the report set out the parties and their involvement in the case:

The plaintiff brought this action to set aside a mortgage granted by her and her now deceased husband over a property in their joint names to the second defendant for the purpose of securing a joint and several guarantee by them of facilities granted by the latter to the first defendant. Her husband`s signature on the document had been forged by her son and she had signed after being told by her son that the document was a testimonial as to his character. The document was executed after her husband`s death. The signatures were witnessed and attested to by a legal assistant in the employ of the third defendants. The first defendant did not enter an appearance. In a third party action, the second defendant claimed an indemnity from the first and third defendants and the legal assistant. The third defendants further claimed indemnity or damages against the legal assistant in fourth party proceedings.

By the time the matter went for trial before Michael Hwang JC, the plaintiff had entered interlocutory judgment against the first defendants in default of appearance, with damages to be assessed. The learned judicial commissioner ordered that:

(1) The plaintiff`s action against the second defendants be dismissed with costs including the second defendants` third party costs to be paid by the plaintiff to the second defendants.

(2) The plaintiff do pay the second defendants the following amounts:

(a) ) the sum of $388,336.87 being the sum of $241,542.62 with interest thereon with monthly rests on the first $200,000 at the rate of 2% pa above the second defendants` prime lending rate and on the balance of $41,542.62 at the rate of 4.75% pa above the second defendants` prime lending rate from 5 October 1987 until judgment; and

(b) ) the second defendants` costs of their counterclaim.

(3) The third defendants do pay the plaintiff the following amounts:

(a) ) fifty percent of the damages to be assessed by the registrar as having been suffered by the plaintiff; and

(b) ) costs including all costs paid by the plaintiff to the second defendants but excluding all costs relating to the claim of the plaintiff against the third defendants based on conspiracy and fraud.

(4) The fourth party do fully indemnify the third defendants against the plaintiff`s claim for damages, interest and costs set out in para (3) herein.

Assessment of damages

In the assessment of the damages before the assistant registrar, the plaintiff itemised her damages as:

(a) Judgment debt and interest paid to the second defendants $402,880.79

(b) Solicitor-and-client costs in Suit No 1893 of 1992(plaintiff`s liability under cl 6 of the indenture of mortgage) $5,450.00

(c) Legal costs and expenses incurred by the plaintiff in the sale of the property $1,468.75

(d) Legal costs and expenses incurred by the plaintiff in suing the first defendants $2,593.00

(e) Legal costs and expenses incurred by the plaintiff in suing the second defendants $100,681.50

During the assessment counsel for the third defendants, Mr Arul informed the assistant registrar that he had no objections to items (a) to (d) and only objected to item (e). He also accepted that the plaintiff acted reasonably in joining the second defendants in the action.

His objections to item (e) were that the plaintiff should file a party-and-party bill against the third defendants and was not entitled to solicitor-and-client costs because the court did not award her solicitor-and-client costs or full indemnity costs. The plaintiff`s response was that the solicitor-and-client costs were claimed as damages and not as costs.

The assistant registrar allowed the plaintiff`s claim at 50% of items (a) to (e), from which order the third defendants appealed. In the notice of appeal, the third defendants appealed against the awards in respect of items (d) and (e). No reason was given for the appeal in respect of item (d) which the third defendants had not disputed at the assessment.

On the hearing of the appeal before me, Mr Arul argued that the plaintiff was wrong to claim solicitor-and-client costs for suing the first and second defendants. He said that she should draw a party-and-party bill and tax it against the third defendants, and that she was only entitled to costs on a solicitor-and-client basis if they were awarded by the judge.

The second point raised by Mr Arul if the plaintiff was entitled to recover solicitor-and-client costs, the costs should be taxed pursuant to section 120 of Legal Profession Act (Cap 161) before it can be recovered from his clients.

Costs as damages

It is settled law that a successful party in an action cannot claim from his adversary as damages the difference between the costs he is awarded and the costs he incurred. As Cotton LJ explained in Cockburn v Edwards :1

... the difference between solicitor-and-client costs and party-and-party costs in an action cannot be given by way of damages in the same action, the latter costs being all that the plaintiff is entitled to. Costs in another action stand on quite a different footing.

A successful party is, however, entitled to recover as damages the costs he incurred in pursuing or defending a claim in relation to a third party arising from the wrongdoing of his adversary. This proposition is stated in 12 Halsbury`s Laws of England (4th Ed) at para 1120 as:

Where, as a result of the defendant`s wrong, the plaintiff has incurred costs in other proceedings, the plaintiff may, subject to the rules of remoteness, recover those costs from the defendant as damages.

and in McGregor on Damages (15th Ed), at para 709 as:

Where the now plaintiff has unsuccessfully but reasonably defended an action against him he will generally recover, as well as damages he has been adjudged to pay the third party suing him, the taxed costs he has had to pay him and his own costs of defending the action taxed as between

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