Goh Eileen née Chia and another v Goh Mei Ling Yvonne and another

• Jurisdiction: Singapore
• Judge: Quentin Loh J
• Judgment Date: 16 July 2014
• Neutral Citation: [2014] SGHC 141
• Plaintiff Counsel: Loh Chai Chong and Suchitra Ragupathy (Rodyk & Davidson LLP)
• Docket Number: Suit No 732 of 2012
• Date: 16 July 2014
• Hearing Date: 22 April 2014,02 June 2014
• Subject Matter: Costs,Civil Procedure
• Published date: 17 July 2014
• Citation: [2014] SGHC 141
• Defendant Counsel: Alfred Dodwell and Ivan Tay (Dodwell & Co LLC),Gregory Vijayendran and Lester Chua (Rajah & Tann LLP)
• Court: High Court (Singapore)
• Year: 2014

Quentin Loh J: Introduction

This is a supplemental judgement on costs for Suit No 732 of 2012 (“S 732/2012”). After the hearing which lasted about 17 days over three tranches and having considered the matter, I dismissed the Plaintiffs’ claim in S 732/2012 entirely on 16 October 2013 with brief reasons (“the brief GD”). The Plaintiffs appealed and I have issued my grounds of decision dated 10 January 2014 (see Goh Eileen née Chia and another v Goh Mei Ling Yvonne and another [2014] SGHC 3 (“the GD”)). At [75] of the GD, I indicated that I would hear the parties on the issue of costs. I directed that if the Defendants are inclined to seek an order for costs against Goh Wai Mun Eric (“Eric”), Wee Phui Leong Penelope (“Penny”) and/or Goh Evan Wyming (“Evan”), they should serve a copy of the brief oral GD on them, and give them notice of the date fixed for the parties to be heard on costs.

On 22 April 2014, the counsel for the parties (including Eric and Penny (collectively known as the “Non-Parties”)) appeared before me to submit on the issue of costs. It would appear that the Defendants had not sought to recover costs from Evan because I had earlier found that Evan was the “more passive participant” in S 732/2012 (GD at [72]).¹ After deliberation, I gave my decision on costs with brief reasons on 2 June 2014. The parties have appealed against my decision and I now set out the grounds of my decision.

The Defendants asked for costs on indemnity basis against the Non-Parties and/or the Plaintiffs’ solicitors, Rodyk & Davidson LLP.² The Defendants also sought to recover costs from the Plaintiffs in the event that neither the Non-Parties nor the Plaintiffs’ solicitors are ordered to pay costs, or are unable to bear the costs, or have defaulted on costs.³

At the hearing, I was informed that the Non-Parties had offered to undertake to pay costs in favour of the Defendants if and to the extent that the 1st Plaintiff is unable to bear the costs. To date, the offer has not been accepted by the Defendants. As I explain later ([32] below), the Non-Parties’ offer does not necessarily undermine the basis for ordering costs against the Non-Parties.

The issues before me were as follows: whether the Non-Parties and/or the Plaintiffs’ solicitors and/or the Plaintiffs should be ordered to pay costs; whether costs should be ordered on an indemnity basis; and what is the quantum of costs payable.

Having considered the matter, I ordered that the Non-Parties pay the Defendants the sum of $164,955.78 as costs of S 732/2012 assessed on the standard basis.

Who should be liable for costs? Whether the Non-Parties should be liable for costs?

In my view, the Non-Parties should be made liable for the costs as it would be just in the circumstances to do so.

The power of the court to make an order for costs against a non-party stems from O 59 r 2(2) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed). The overarching rule that governs the exercise of the court’s discretion in ordering costs against a non-party is that it must, in all circumstances of the case, be just to do so: DB Trustees (Hong Kong) Ltd v Consult Asia Pte Ltd and another appeal [2010] 3 SLR 542 (“DB Trustees”) at [27], [29] and [36].

In deciding if the Non-Parties should be liable for costs, I took into account the following factors: a close connection between the non-party and the proceedings: DB Trustees at [29]–[34], citing Dymocks Franchise System (NSW) Pty Ltd v Todd and others (Associated Industrial Finance Pty Ltd, Third Party) [2004] 1 WLR 2807 (“Dymocks”); a causal link between the non-party and the incurring of the costs: DB Trustees at [29]–[30] and [35], citing Dymocks; the ability of the party through whom the proceedings are brought or defended to meet any order for costs: DB Trustees at [42]; Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties) [2011] 1 SLR 582 (“RTC”) at [28]; and the fact that due process ought to be accorded to the non-party before an order of costs is made against it: DB Trustees at [36] and [47].

All four of the factors identified above have been addressed by the parties to varying degrees. As such, I will consider each factor in turn, starting with the close connection between the non-party and the proceedings.

According to the Court of Appeal in DB Trustees, there are various ways to demonstrate that there is a close connection between the non-party and the proceedings in question (at [34]). Much depends on the facts. Specifically, the Court of Appeal considered that it would be sufficient if “the non-party either funds or controls legal proceedings with the intention of ultimately deriving a benefit from them” (at [30]). In this regard, the Court of Appeal clarified that funding and control need not be conjunctive (at [30]). It is also apparent that the intention behind the funding or control is relevant. The non-party must have intended to derive a benefit from funding or controlling the proceedings. It would not suffice if the funding was out of purely altruistic reasons, eg, out of the natural affection of a disinterested relative (see Murphy v Young & Co’s Brewery plc [1997] 1 WLR 1591 at 1603–1604, cited in Dymocks at [34]). I should add that the “benefit” which the non-party might intend to derive from the proceedings can be in the form of getting the fruits of the litigation (at [31], citing Dymocks) or avoiding the adverse consequences of litigation, eg, an adverse costs order (at [32], citing Karting Club of Singapore v Mak David and others (Wee Soon Kim Anthony, intervener) [1992] 1 SLR(R) 786 at [9]).

The Defendants contend that the Non-Parties have a close connection to the proceedings because they have not only funded but also controlled the proceedings.⁴ The Defendants further assert that the Non-Parties were the true litigants in S 732/2012 and that the 1st Plaintiff was merely a “pawn”.⁵ The Defendants also argue that Eric, as one of the Non-Parties, would benefit from the proceedings if the Plaintiffs succeeded.⁶ On the other hand, the Non-Parties argue that there is “no credible evidence” to show that the Non-Parties had controlled or funded the proceedings with the intention of deriving a benefit from it.⁷

I find that, in the present case, the Non-Parties have a close connection to the proceedings because they have not only funded but also controlled the proceedings. Based on the factual findings in S 732/2012, the logical inference is that the Non-Parties had funded and controlled the proceedings with the intention of ultimately deriving a benefit from it. The pertinent findings of fact are as follows: the Plaintiffs had not signed any warrant to act; the terms of the warrant to act, which was signed by Eric on 26 January 2012, made it “very clear” that he was the client (GD at [4] and [70]); the Non-Parties displayed an unusually high level of interest and involvement in the proceedings (GD at [62], [65]–[66] and [68]); the proceedings were brought “for the benefit and at the behest of Eric and Evan”, and the Non-Parties and to a considerably lesser extent, Evan, were the “main driving forces” behind the proceedings (GD at [46]–[47], [51] and [60]); the Non-Parties paid the deposit and the legal fees for the proceedings (GD at [69]–[70]); and Eric and Evan stood to gain from the proceedings (GD at [36]).

The Non-Parties argue that there is no credible evidence to conclude that there is a close connection between the Non-Parties and the proceedings. I do not agree with the Non-Parties.

First, the Non-Parties argue that they had not funded the proceedings as the 1st Plaintiff was supposed to repay them later.⁸ I do not agree for two reasons: The definition of “funding”, for the purpose of establishing close connection, is sufficiently wide to encompass loans. For instance, the non-party in Dymocks funded the litigation by providing loans (see Dymocks at [3]–[6]). This was acknowledged in DB Trustees (at [31]). Thus, this argument is of no weight and fails. In any event, the fact that the 1st Plaintiff is neither aware nor concerned about the legal fees incurred for the litigation suggests that she would not be the one ultimately paying for it. The Non-Parties say that it would be unusual for a person of the 1st Plaintiff’s age to “have the finer details of finances at the fingertips”, especially when Eric and Evan were managing the 1st Plaintiff’s finances.⁹ Even if I accept this, it would not have explained why the 1st Plaintiff knows nothing about the legal fees. The 1st Plaintiff admits that she had never asked how much the legal fees were and does not know how much had been incurred so far (GD at [69]). While the 1st Plaintiff is not impecunious, I do not think that she would have been comfortable incurring legal fees personally without regard for whether she could have afforded it. Indeed, there is some evidence to suggest that the 1st Plaintiff could not afford a lawyer back in 2013 (GD at [69]). In light of the above, I cannot accept the bare assertion that there is some form of arrangement between the 1st Plaintiff and the Non-Parties for the repayment of the legal fees. It necessarily follows that the Non-Parties would, in all likelihood, have been the ones who were actually paying for the legal fees.

Secondly, the Non-Parties contend that there is no credible evidence to say that they had controlled the proceedings.¹⁰ This argument consists of several limbs and I will explore them in turn.

The Non-Parties argue that the Plaintiffs were advised and represented by solicitors acting on their behalf even though there was no warrant to act signed by the Plaintiffs because the lead counsel for the Plaintiffs confirmed that they took instructions directly from the Plaintiffs, and the 1st Plaintiff had referred to the Plaintiffs’ solicitors as her lawyers (as...