Larpin, Christian Alfred v Kaikhushru Shiavax Nargolwala

• Jurisdiction: Singapore
• Judge: Roger Giles IJ
• Judgment Date: 25 April 2022
• Court: High Court (Singapore)
• Docket Number: Suit No 3 of 2020

Larpin, Christian Alfred and another

and

Kaikhushru Shiavax Nargolwala and another

[2022] SGHC(I) 7

Roger Giles IJ

Suit No 3 of 2020

Singapore International Commercial Court

Civil Procedure — Costs — Principles — Successful defendants seeking costs on indemnity basis in Singapore International Commercial Court — Whether costs on indemnity basis should be awarded

Held, dismissing the application:

(1) This case had 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, was to apply to the assessment of costs in respect of the proceedings after their transfer. Order 110 r 46(1) provided for payment of “the reasonable costs of the application or proceedings … unless the court orders otherwise”. Order 110 r 46 had since been replaced by O 22 of the Singapore International Commercial Court Rules 2021, which came into operation on 1 April 2022, but the proceedings remained subject to the Rules: at [7].

(2) The distinction between costs on the standard basis and costs on the indemnity basis was found in O 59 of the Rules. Costs on the indemnity basis did not mean that the receiving party recovered all their costs. For costs on the indemnity basis and the standard basis, the receiving party recovered only their reasonable costs (reasonable in amount and in incurring): the distinction sounded in the resolution of doubt over reasonableness of amount or incurring. Costs on the standard basis and costs on the indemnity basis differed only in the burden of proof: at [9] and [11].

(3) Order 110 r 46(6) expressly provided that O 59 “does not apply to” proceedings in the SICC. Order 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: at [12].

(4) When regard was had to the meaning of costs on the indemnity basis, it was difficult to see an order for costs on that basis as an order otherwise pursuant to the discretion in O 110 r 46(1). The costs were still the reasonable costs of the application or proceedings. The difference was in the burden of proof, that doubt over reasonableness was resolved in favour of the receiving party rather than in favour of the paying party. Directing how doubt was to be resolved was scarcely “otherwise” from payment of reasonable costs, and importation of the concept of indemnity costs would be expected to be made clear; on the contrary, it was excluded by the disapplication of O 59: at [24].

(5) Indemnity costs as distinct from costs on the standard basis did not arise under the SICC costs regime. It was therefore not open to the court to make the order sought by the defendants: at [12] to [18] and [26].

(6) If appropriate, account might be taken of matters which in proceedings before the High Court might have resulted in the making of a costs order on the indemnity basis, not by an order for costs on the indemnity basis (since this was not available under the SICC costs regime), but through arriving at the amount of reasonable costs or perhaps by departure from the measure of reasonable costs as an order otherwise. Reasonable costs was a broad and flexible concept, allowing arrival at proper compensation to a successful party taking account of all the circumstances: at [27].

(7) Even if it was open to the court to make the order sought by the defendants, the court would have declined to do so: at [37].

(8) The court did not accept that the recovery of the costs in a separate proceeding commenced by Mr Solomon Lew against the plaintiffs, defendants and others should be seen as the real reason for the proceedings. A person could justifiably seek to undo a transaction into which the person was misled by fraud, even if the asset acquired was acquired at proper value, in order to vindicate the wrong done and to be restored to the person's previous position: at [33].

(9) The proceedings were not unreasonably brought or brought when the plaintiffs should have foreseen that they were likely to fail, and certainly not brought as an abuse of process. It was not unreasonable for the plaintiffs to have declined to accept the defendants' offer to settle on the basis of discontinuance with no order as to costs in a letter of 29 March 2021: at [34] and [35].

(10) There was no unreasonableness in the plaintiffs' conduct of the proceedings to an extent calling for sanction in indemnity costs: at [36].

Case(s) referred to

Abani Trading Pte Ltd v BNP Paribas [2014] 3 SLR 909 (refd)

BNP Paribas SA v Jacob Agam [2019] 1 SLR 83 (refd)

CPIT Investments Ltd v Qilin World Capital Ltd [2018] 4 SLR 38 (refd)

Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171 (refd)

GTMS Construction Pte Ltd v Ser Kim Koi [2021] SGHC 33 (refd)

Kiri Industries Ltd v Senda International Capital Ltd [2022] 3 SLR 174 (refd)

Larpin, Christian Alfred v Kaikhushru Shiavax Nargolwala [2022] SGHC(I) 4 (refd)

Lim Oon Kuin v Ocean Tankers (Pte) Ltd [2022] 1 SLR 434 (refd)

Man B&W Diesel S E Asia Pte Ltd v PT Bumi International Tankers [2004] 3 SLR(R) 267; [2004] 3 SLR 267 (refd)

Maryani Sadeli v Arjun Permanand Samtani [2015] 1 SLR 496 (refd)

NSL Oilchem Waste Management Pte Ltd v Prosper Marine Pte Ltd [2020] SGHC 204 (refd)

Ong & Ong Pte Ltd v Fairview Developments Pte Ltd [2014] 2 SLR 1285 (refd)

Qilin World Capital Ltd v CPIT Investments Ltd [2019] 1 SLR 1 (refd)

Facts

The judgment on the substantive issues, Larpin, Christian Alfred v Kaikhushru Shiavax Nargolwala[2022] SGHC(I) 4 (the “Main Judgment”), was given on 21 February 2022. In the Main Judgment, the court dismissed the plaintiffs' suit in misrepresentation and ordered that the plaintiffs pay the defendants' costs with liberty to apply if either party sought a different or additional order.

By way of a letter dated 2 March 2022, the defendants applied for an 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 plaintiffs opposed the defendants' application on the basis that indemnity costs did not apply in Singapore International Commercial Court (“SICC”) proceedings, and also took issue with the defendants' reasons why the order should be made.

Legislation referred to

Rules of Court (2014 Rev Ed) O 22A, O 22A r 9, O 59, O 59 r 1(1), O 59 r 20, O 59 r 27, O 59 r 27(2), O 59 r 27(3), O 110 r 46, O 110 r 46(1), O 110 r 46(6)

Singapore International Commercial Court Rules 2021 O 22

Christopher Anand Daniel, Harjean Kaur, Keith Valentine Lee Jia Jin(Advocatus Law LLP) for the first and second plaintiffs;

Ramesh Kumar s/o Ramasamy, Natalie NgandEdmond Lim Tian Zhong (Allen & Gledhill LLP) for the first and second defendants.

25 April 2022

Judgment reserved.

Roger Giles IJ:

1 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.

2 The proceedings were dismissed, and the Main Judgment concluded (at [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.

3 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”.

4 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...