LK Ang Construction Pte Ltd v Chubb Singapore Pte Ltd (judgment on costs)

• Jurisdiction: Singapore
• Judge: Kan Ting Chiu J
• Judgment Date: 29 October 2003
• Neutral Citation: [2003] SGHC 263
• Docket Number: Suit No 355 of 2002
• Date: 29 October 2003
• Year: 2003
• Published date: 07 November 2003
• Plaintiff Counsel: Raymond Chan (Chan Tan LLC)
• Citation: [2003] SGHC 263
• Defendant Counsel: Wong Yoong Phin (Wong Yoong Phin and Co)
• Court: High Court (Singapore)
• Subject Matter: Whether initial offer deemed withdrawn by final offer,Civil Procedure,Implications on costs,Whether judgment sum more favourable than offer,Order 22A r 9 of the Rules of Court (Cap 322, R 5, 1997 Rev Ed),Offer to settle

1. The plaintiff sued the defendant for breach of contract and libel. The plaintiff failed on the former and succeeded in the latter. I entered interlocutory judgment for the plaintiff on 18 December 2002 with damages to be assessed and reserved costs as counsel informed me that there were offers of settlement from the defendant.

2. On 25 May 2003 the damages were assessed at $15,000 with interest at 6% p.a. from the date of the writ to the date of assessment, which worked out to $424.84. The plaintiff’s appeal from the assessment was dismissed.

3. The defendant had made two offers of settlement. The first offer was made on 5 August 2002 for $20,000 in full and final settlement of the plaintiff’s claim. On 20 September, the defendant made a second offer of $30,000 inclusive of costs. Both offers were made on a global basis for the plaintiff’s claims in contract and libel.

4. Neither offer was accepted, and the matter proceeded to trial between 30 September and 4 October 2002.

5. After the dismissal of the plaintiff’s appeal on the damages, parties came back to me on the reserved costs of the trial.

6. Both parties presented their arguments with reference to the second offer. I will refer to the status of the offers in a later part of these grounds.

7. Costs in such a situation is governed by Order 22A rule 9(3) of the Rules of Court which provides that

Where an offer to settle made by a defendant –

(a) is not withdrawn and has not expired before the disposal of the claim in respect of which the offer to settle is made; and

(b) is not accepted by the plaintiff, and the plaintiff obtains judgment not more favourable than the terms of the offer to settle,

the plaintiff is entitled to costs on the standard basis to the date the offer was served and the defendant is entitled to costs on the indemnity basis from that date, unless the Court orders otherwise.

8. The defendant contended that as the plaintiff had obtained judgment of $15,424.84 ($15,000 principal sum plus $424.84 interest) without taking costs into account, it is only entitled standard costs up to 20 September and the defendant is entitled to indemnity costs from 21 September unless the plaintiff obtained costs of more than $14,575.16 as at 20 September, so that the total judgment sum will be less than the offer made.

9. The plaintiff submitted that the $30,000 offered was less than the amount the plaintiff would recover inclusive of costs because the plaintiff’s costs would exceed $15,000 if taxed. Since the costs were not determined no one can say with certainty whether the judgment sum was more or less favourable than the offer.

10. The plaintiff argued in the alternative that the offer to settle inclusive of costs is ambiguous and ineffectual. Reference was made to Associated Confectionery (Aust) Ltd v Mineral and Chemical Traders Pty Ltd (1991) 25 NSWLR 349. In that case, the defendants made an offer of compromise “in the sum of $135,000 inclusive of costs”. The offer was not accepted and the plaintiffs eventually obtained judgment of $88,007.80 and interest of $18,216.96. The court then had to decide on costs under the Supreme Court Rules 1970 Pt 52, r 17 which appears from the report to be similar to our r 9.

11. Giles J held at p 351 –

(I)t may be that the offer of compromise simply cannot be treated as an offer of compromise to which effect can be given because it is just not possible to determine whether or not the result of the proceedings is more favourable or less favourable than the offer. It is impossible to determine that because one does not know how much of the sum of $135,000 was or should be attributed to costs.

and that

If the impact of costs upon an offer had to be borne in mind then whenever a court was required, … to determine whether the offer was more favourable or less favourable than the result of the proceedings it would be necessary to indulge in a taxation of costs. That is simply not practicable.

12. I do not think counsel was correct to say that the judge found the offer ambiguous. He could have no difficulty in understanding the offer. It was “We offer $135,000 in settlement, and that includes your costs.” If the plaintiff accepted the offer, there would be a binding and enforceable obligation on the defendant to pay the sum offered.

13. The judge found the formulation of the offer not practicable. It is true that such an offer may require taxation to...