Kosui Singapore Pte Ltd v Thangavelu

JudgeVinodh Coomaraswamy J
Judgment Date28 August 2015
Neutral Citation[2015] SGHC 221
Citation[2015] SGHC 221
Docket NumberOriginating Summons No 745 of 2014
Published date27 January 2016
Hearing Date18 March 2015
Plaintiff CounselJonathan Yuen and Doreen Chia (Rajah and Tann Singapore LLP)
Date28 August 2015
Defendant CounselN Sreenivasan SC and Palaniappan Sundararaj (Straits Law Practice LLC)
CourtHigh Court (Singapore)
Subject MatterLegal Profession,Bill of Costs
Vinodh Coomaraswamy J:

The applicant seeks an order to refer to taxation eight bills which its solicitor issued to it in 2010 and 2011. The court’s power to make that order arises under s 120 of the Legal Profession Act (Cap 161, 2009 Rev Ed) (“the Act”). That section reads as follows:

Order for taxation of delivered bill of costs

120.—(1) An order for the taxation of a bill of costs delivered by any solicitor may be obtained on an application made by originating summons ... by the party chargeable therewith ... at any time within 12 months from the delivery of the bill ....

Section 120 is, however, subject to s 122:

Time limit for taxation of bills of costs

122. After the expiration of 12 months from the delivery of a bill of costs, or after payment of the bill, no order shall be made for taxation of a solicitor’s bill of costs, except upon notice to the solicitor and under special circumstances to be proved to the satisfaction of the court.

The applicant commenced these proceedings after 12 months had expired from the delivery of the bills and after it had paid the bills. Under s 122 of the Act, therefore, the court cannot make the order sought unless the applicant is able to prove to the court’s satisfaction that there are special circumstances which justify referring these eight bills to taxation.

The applicant has failed to satisfy me that there any such special circumstances. I have therefore dismissed its application with costs. The applicant has appealed against my decision. I now provide the grounds for my decision.

All references to taxation in this judgment are references only to taxation as between solicitor and client and not to taxation as between party and party.

The facts The parties

The applicant is a company in the construction business. Its managing director is Mr Ito Fumiyuki (“Mr Ito”).1

The respondent is an advocate and solicitor of the Supreme Court of Singapore. He was called to the Bar in 1985. In 2010, when the story in the present case begins, the respondent practised in the law firm of Wong Thomas & Leong (“WTL”). From August 2010 to July 2012, he practised in a firm known as Advocates Legal Chambers LLP (“ALC”). Since July 2012 he has practised in the firm of Thangavelu LLC.

The bills which the applicant seeks to refer to taxation were issued by ALC, the limited liability partnership, and not by the respondent. However, ALC has ceased to exist as a firm. For that reason, the applicant brings these proceedings against the respondent in his personal capacity. The respondent accepts for the purposes of these proceedings that he is to be treated as having responsibility for the manner in which ALC’s bills were quantified, drawn, rendered and discharged.

The applicant’s litigation The applicant engages WTL

In 2008, the applicant was awarded a sub-contract to construct eight of the attractions at Universal Studios Singapore on Sentosa.2 By March 2010, disputes had arisen between the applicant and the main contractor on the project. Mr Ito believed that the main contractor’s delays and variations had caused the applicant to suffer losses exceeding $7m under the sub-contract. He wanted to sue both the main contractor and its Japanese parent company in order to recover compensation for the applicant.

Mr Ito was given the name of Mr Raymond Wong (“Mr Wong”).3 Mr Wong, then as now, is a solicitor who practises as a partner of WTL. The respondent then also practised with WTL. Mr Ito had by then known the respondent for more than 20 years. He asked the respondent to introduce him to Mr Wong.4

As a result, Mr Ito met Mr Wong and the respondent in March 2010. Mr Ito agreed to engage WTL to represent the applicant in litigation against the main contractor and its parent company.5

The applicant wins the suit and the appeal

On 4 May 2010, Mr Wong commenced Suit 312 of 2010 (“Suit 312”) on behalf of the applicant. The applicant’s claim was initially for $7.2m. That sum was later reduced by amendment to $3.6m. On 31 October 2011, following an eight-day trial, Quentin Loh J entered judgment in favour of the applicant for just over $3m, net of the counterclaim and excluding goods and services tax, interest and costs.6 The applicant eventually recovered from the defendants $250,000, excluding disbursements, as party and party costs for Suit 312.7

On 25 November 2011, the defendants in Suit 312 filed an appeal to the Court of Appeal against Loh J’s decision. That appeal was dismissed with costs on 23 July 2012.

The respondent’s involvement in Suit 312

The applicant, by the terms of WTL’s letter of engagement, acknowledged that Mr Wong could seek assistance from other lawyers in WTL in representing the applicant. The respondent’s initial involvement in Suit 312 was in that capacity.

In August 2010, the respondent left WTL to join ALC. Mr Ito agreed to appoint ALC to act for the applicant in Suit 312, but only if Mr Wong continued, in Mr Ito’s words, to “handle it”.8 The respondent agreed. The respondent’s involvement in Suit 312 now was as the applicant’s solicitor instructing Mr Wong as counsel.9 The applicant was aware of the respective roles of the respondent and of Mr Wong. He was copied on letters exchanged between ALC and WTL in September 2010 confirming these new roles.10

ALC filed its notice of change of solicitors in Suit 312 on 18 November 2010.11 From that point onwards, it was ALC rather than WTL who billed the applicant for the professional fees and disbursements arising from Suit 312.12

WTL’s and ALC’s bills to the applicant

In September 2010, during a fruitless mediation of the dispute underlying Suit 312, Mr Ito asked Mr Wong how much the applicant would have to pay for its own professional fees if it were to take Suit 312 all the way to trial.13 Mr Wong told Mr Ito that he estimated that the fees would be $650,000, excluding goods and services tax (“GST”) and disbursements, on the assumption that it was a long trial and that he and the respondent handled the case together.14 Mr Ito instructed Mr Wong to proceed to trial.15

The total professional fees which the applicant actually paid to both WTL and ALC in Suit 312, up to and including trial, was $751,580. Out of that figure, WTL billed the applicant $36,000 and ALC billed the applicant $715,580. Brief particulars of the bills rendered by each firm are set out in the table which appears at the end of this judgment.

There are two features of these bills which ought to be noted. First, all of the bills which include an element for professional fees, whether those bills were issued by WTL or by ALC, are gross bills. They do not itemise the specific work done. Instead, they describe the work in general terms with the following standard form of words: “To our professional charges in respect of work done [to date] in connection with the above matter including other incidentals necessary to carry out the business entrusted to us [from ...]”.16 The words enclosed in square brackets do not appear in all the bills.

Second, WTL charged GST in all of the bills which it rendered to the applicant up to September 2010; and continued to charge GST in all of the bills which it rendered to ALC after September 2010. Despite this, ALC charged no GST at all in any of the bills which it rendered to the applicant in and after December 2010. It was the respondent’s belated attempt to recover this element of GST from the applicant in 2012 which triggered the chain of events which has eventually led to the present application.

Between April 2010 and April 2011, the applicant paid deposits totalling $60,000 to WTL17 and $770,000 to ALC18 to be held in each firm’s client account against that firm’s fees and disbursements. As the respondent issued each bill, he set off the sum due on that bill against the applicant’s deposit. Although there is a dispute about whether the respondent secured the applicant’s approval to do this with respect to the last bill dated 15 July 2011,19 it is common ground for the purposes of these proceedings that all of ALC’s bills, including its last bill, are to be treated as having been paid.20

The applicant queries the respondent’s invoicing

On 2 February 2012, the applicant asked the respondent to confirm the applicant’s calculation that $24,204.59 was left of its deposits.21 The respondent said he would reply on the same day. Despite several reminders, he did not respond until six weeks later.

On 15 March 2012, the respondent took the position that there was nothing left of the applicant’s deposits because of certain unpaid disbursements. The applicant was surprised to hear this. Mr Ito and the respondent met on 20 March 2012 to reconcile the figures. They did not succeed.

On 3 April 2012, the respondent informed Mr Ito that not only had the applicant’s deposits been entirely used up, the actual position was that the applicant owed ALC a further $60,123.50. That sum was said to comprise: (i) $22,703.00 being unpaid disbursements incurred by ALC in Suit 312; (ii) $8,662.35 being disbursements incurred by WTL in Suit 312 for which ALC had reimbursed WTL but which ALC had not yet billed the applicant; and (iii) $28,757.65 being GST which ALC had paid to WTL on its bills rendered after September 2010.22 The applicant rejected the respondent’s claims.23 The respondent did not pursue any of these claims.

From the fact that ALC had paid $28,757.65 in GST to WTL, the applicant worked out24 that WTL must have billed ALC around $400,000 for Mr Wong’s fees as the applicant’s counsel in Suit 312. This in turn meant that the respondent’s fees as instructing solicitor would have been over $300,000. This was the first time that Mr Ito had any insight into how Mr Wong and the respondent had split the total professional fees of $715,580 which the applicant had paid ALC. Mr Ito was dismayed. He felt that the respondent’s fees were...

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    • Singapore
    • High Court (Singapore)
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    ...Sen [2009] 3 SLR(R) 206 at [16]). The categories of special circumstances are not exhaustive. In Kosui Singapore Pte Ltd v Thangavelu [2015] 5 SLR 722 (“Kosui”), the court summarised some examples in which bills were sent for taxation (at [61]): There is no rigid rule as to what kind of cir......
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    ...& Co) [2019] SGHC 253, Sports Connection Pte Ltd v Asia Law Corp and another [2010] 4 SLR 590 and Kosui Singapore Pte Ltd v Thangavelu [2015] 5 SLR 722. For the above reasons, I am not persuaded that there is a prima facie case of error of law and/or fact which justifies the granting of lea......
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    • Singapore
    • High Court (Singapore)
    • 27 July 2020
    ...Sen [2009] 3 SLR(R) 206 at [16]). 39 The categories of special circumstances are not exhaustive. In Kosui Singapore Pte Ltd v Thangavelu [2015] 5 SLR 722 (“Kosui”), the court summarised some examples in which bills were sent for taxation (at There is no rigid rule as to what kind of circums......
  • Koh Kim Teck v Shook Lin & Bok LLP
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    • Court of Appeal (Singapore)
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    ...judicial recourse available to any challenge over the quantum of the defendant’s fees (following Kosui Singapore Pte Ltd v Thangavelu [2015] 5 SLR 722 (“Kosui”) at [56]–[57]). The appellant did not file an appeal against the court’s decision in OS 67/19 that he was not entitled to an order ......
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1 books & journal articles
  • Legal Profession
    • Singapore
    • Singapore Academy of Law Annual Review No. 2015, December 2015
    • 1 December 2015
    ...solicitor and under special circumstances to be proved to the satisfaction of the court. 21.19 In Kosui Singapore Pte Ltd v Thangavelu[2015] 5 SLR 722 (‘Kosui Singapore’), the applicant commenced taxation proceedings in respect of eight bills of its solicitor, ALC, under s 120 of the LPA af......

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