Larpin, Christian Alfred and another v Kaikhushru Shiavax Nargolwala and another

• Jurisdiction: Singapore
• Court: International Commercial Court (Singapore)
• Judge: Roger Giles IJ
• Judgment Date: 25 April 2022
• Neutral Citation: [2022] SGHC(I) 7
• Citation: [2022] SGHC(I) 7
• Docket Number: Suit No 3 of 2020
• Hearing Date: 29 March 2022,10 March 2022,02 March 2022,25 April 2022
• Plaintiff Counsel: Christopher Anand Daniel, Harjean Kaur, Keith Valentine Lee Jia Jin (Advocatus Law LLP)
• Defendant Counsel: Ramesh Kumar s/o Ramasamy, Natalie Ng and Edmond Lim Tian Zhong (Allen & Gledhill LLP)
• Subject Matter: Civil Procedure,Costs,Principles,Indemnity costs
• Published date: 30 April 2022

Roger Giles IJ:

The judgment on the substantive issues in these proceedings, Larpin, Christian Alfred and another v Kaikhushru Shiavax Nargolwala and another [2022] SGHC(I) 4 (the “Main Judgment”), was given on 21 February 2022. This judgment assumes familiarity with the Main Judgment.

The proceedings were dismissed, and the Main Judgment concluded (at [218]): 218 … It is not easy to see any disposition of costs other than that the plaintiffs pay the defendants’ costs, and I also make that order, but with liberty to apply within 21 days if either party seeks a different or additional order; the application may be made by letter to the Registry. I invite the parties, if they are unable to agree on the amount of costs, to propose directions for their determination.

By letter dated 2 March 2022, the defendants applied for an additional order “that the Defendants shall be entitled to party-and-party costs on the indemnity basis (as opposed the usual standard basis) for work done on the matter from 29 March 2021”.

The defendants’ reasons were set out in the letter. The principal reason was that the defendants had, by Calderbank letters dated 6 July 2020 and 29 March 2021, given the plaintiffs the opportunity to discontinue the proceedings on a “no order as to costs” basis, but the plaintiffs had not responded to either letter. The date of 29 March 2021 in the proposed order was evidently taken as the date of the second of these letters. To the Calderbank letters the plaintiffs added the submissions, in summary: the plaintiffs having accepted that the price paid for the Villa was a proper price, the real reason for the proceedings must have been to obtain indemnity for the irrecoverable costs incurred in the Lew proceedings (Main Judgment at [9]); but in the light of the decision of the Court of Appeal in Maryani Sadeli v Arjun Permanand Samtani and another and other appeals [2015] 1 SLR 496 (“Maryani”), that endeavour was doomed to fail, and the plaintiffs “cannot seek to deny that they appreciated or otherwise ought to have appreciated the likelihood that the Suit constituted an abuse of process”; the plaintiffs had unreasonably declined to admit the facts in a Notice to Admit Facts dated 14 June 2021, whereby the defendants were needlessly required to deal with the facts in evidence; and the refusal to admit the facts was “indicative of the [generally] unreasonable manner in which the Plaintiffs’ case was conducted”. However, the defendants did not provide any further instances or explanation of the asserted general unreasonableness.

The application was opposed by the plaintiffs in a letter dated 10 March 2022. The plaintiffs first submitted that indemnity costs do not apply in Singapore International Commercial Court (“SICC”) proceedings, referring to CPIT Investments Ltd v Qilin World Capital Ltd and another [2018] 4 SLR 38 (“CPIT”). As to the defendants’ reasons they submitted, again in summary: the Calderbank letters were not genuine offers to compromise the plaintiffs’ claim but asked the plaintiffs to capitulate, and (with reference to Man B&W Diesel S E Asia Pte Ltd and another v PT Bumi International Tankers and another appeal [2004] 3 SLR(R) 267 (“Man B&W”)) such an offer will not bring indemnity costs; the refusal to admit facts was of no significance, because the facts in question were not relevant and the defendants were in any event put on notice that they did not have to deal with them; their claim could not be said to be entirely without factual and/or legal basis, for reasons given, and there were not the exceptional circumstances or unreasonable conduct required for an order for indemnity costs (referring to GTMS Construction Pte Ltd v Ser Kim Koi (Chan Sau Yan (formerly trading as ChanSau Yan Associates) and another, third parties) [2021] SGHC 33 and Lim Oon Kuin and others v Ocean Tankers (Pte) Ltd (interim judicial managers appointed) [2021] SGCA 100); to which was added that the defendants had not applied to strike out the plaintiffs’ claim, which “speaks volumes”.

The defendants’ letter of 2 March 2022 had not addressed indemnity costs under the SICC costs regime. By a further letter dated 29 March 2022, the defendants responded to the plaintiffs’ submission that indemnity costs did not apply. They maintained that the SICC had power to order costs on the indemnity basis, but submitted that if no order was made on the present application they should be allowed to rely on the Calderbank letters to seek a higher amount of costs “if and when the parties are before the Court to ask the Court to fix the quantum of costs to be paid by the Plaintiffs to the Defendants”.

Indemnity costs in the SICC?

The first question is whether an order can be made that the defendants are entitled to costs on the indemnity basis. It should be noted that this is a transfer case, having been transferred from the High Court to the SICC on 2 April 2020. At the time of transfer it was ordered that O 110 r 46 of the Rules of Court (2014 Rev Ed) (“the Rules”), being the rule prescribing the costs regime in the SICC, is to apply to the assessment of costs in respect of the proceedings after their transfer. The possibility of an indemnity costs order in relation to the costs prior to 2 April 2020 may be put aside, since the order sought by the defendants is in relation to costs incurred after that date. (O 110 r 46 has since been replaced by O 22 of the Singapore International Commercial Court Rules 2021, which came into operation on 1 April 2022, but these proceedings remain subject to the Rules.)

The essential prescription is that in O 110 r 46(1) concerning proceedings in the SICC, with a mirror provision in r 46(2) concerning an appeal from the SICC to the Court of Appeal. It provides: 46.—(1) The unsuccessful party in any application or proceedings in the Court must pay the reasonable costs of the application or proceedings to the successful party, unless the Court orders otherwise.

The distinction between costs on the standard basis and costs on the indemnity basis is found in O 59 of the Rules. O 59 r 27 deals with taxation of costs by the Registrar, and includes: (2) On a taxation of costs on the standard basis, there shall be allowed a reasonable amount in respect of all costs reasonably incurred and any doubts which the Registrar may have as to whether the costs were reasonably incurred or reasonable in amount shall be resolved in favour of the paying party; and in these Rules, the term ‘the standard basis’, in relation to the taxation of costs, shall be construed accordingly. (3) On a taxation on the indemnity basis, all costs shall be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred and any doubt which the Registrar may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the receiving party; and in these Rules, the term ‘the indemnity basis’, in relation to the taxation of costs, shall be construed accordingly.

In O 59 r 1(1), it is provided that “standard basis” and “indemnity basis” have the same meaning assigned to them by rr 27(2) and 27(3), respectively.

Costs on the indemnity basis, therefore, does not mean that the receiving party recovers all their costs. On both bases, the receiving party recovers only their reasonable costs (reasonable in amount and in incurring): the distinction sounds in the resolution of doubt over reasonableness of amount or incurring. Costs on the standard basis and costs on the indemnity basis differ only in the burden of proof.

O 110 r 46(6) expressly provides that O 59 “does not apply to” proceedings in the SICC. Hence Vivian Ramsey IJ said, in CPIT at [15], that O 59 contained a separate regime for costs in the High Court, including the provisions for standard and indemnity costs and also the manner in which costs might be ordered, differing from O 110 r 46, and that it was “clear that the usual High Court costs regime in O 59 was intended to be replaced with the simpler regime in O 110 r 46.“

His Honour was not asked to order costs on the indemnity basis, but was asked to take account of an offer to settle, which under O 22A r 9 could bring an order for costs on that basis. In that connection, he said: 30 The provisions of O 22A r 9 of the ROC are clearly intended to operate in the context of the High Court costs regime under O 59, because of the reference therein to the ‘standard’ and ‘indemnity’ bases of costs, which, as explained earlier (at [15] above), are costs concepts that are specifically defined under O 59 r 1(1) read with O 59 rr 27(2) and 27(3). I therefore consider that r 9 cannot apply to proceedings in the SICC where the standard or indemnity basis is not applicable. The Plaintiff places reliance on the decision in Telemedia Pacific Group Ltd v Yuanta Asset Management International Ltd...