Lum Ooi Lin v Hyflux Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ,Steven Chong JCA,Belinda Ang Saw Ean JCA
• Judgment Date: 30 November 2023
• Docket Number: Civil Appeal No 30 of 2023
• Court: Court of Appeal (Singapore)

Lum Ooi Lin

and

Hyflux Ltd (in compulsory liquidation) and others

[2023] SGCA 43

Sundaresh Menon CJ, Steven Chong JCA and Belinda Ang Saw Ean JCA

Civil Appeal No 30 of 2023

Court of Appeal

Civil Procedure — Appeals — Leave — Permission to appeal on two questions of law granted by Appellate Division of High Court — Whether permission to appeal confined to legal questions posed by Appellate Division of High Court

Civil Procedure — Costs — Security — Respondents proposing security for costs in form of undertaking by related companies of litigation funder — How court should exercise discretion to determine form of security for costs — Order 23 r 2 Rules of Court (2014 Rev Ed) — Order 9 r 12 Rules of Court 2021

Held, dismissing the appeal:

(1) With respect to the construction of the Appellate Division's order and its effect, the Appellate Division had intended to limit its permission to appeal to the PTA Questions: at [16] and [17].

(2) The appeal was not rendered academic or meaningless if confined to the two PTA Questions. The appeal was capable of disposal on determination of the two PTA Questions.: at [19].

(3) It was not necessary to address the related question of whether this court was open to grant permission to raise other issues or additional points where there was a desire on the part of the appellant to advance arguments which were not covered by the appeal: at [20] and [21].

(4) There was no default expectation that security would take the form of money or a bank guarantee. The plaintiff could offer any form of security that was workable. The court's inquiry was not whether the proposed form was worse than cash or any other conventional security, but whether it had the characteristics of a fund or asset against which a successful defendant could readily enforce an order for costs against the plaintiff. In each case the court's inquiry into the adequacy of the form of security depended on the evidence provided and the court would weigh the evidence accordingly: at [23] and [24].

(5) A wide discretion was afforded to the court under O 23 r 2 of the Rules of Court (2014 Rev Ed) (“ROC 2014”) to order security in any form that it deemed fit: at [26].

(6) The court's discretion to determine the form of SFC under the present Rules of Court 2021 remained as wide as it was under O 23 r 2 of the ROC 2014: at [29].

(7) With respect to how the court should exercise its discretion to accept and order security in the manner and form offered, there was no basis for prioritising conventionally and frequently employed modes of security (namely, bank guarantees, solicitors' undertakings or payments into court) (the “conventional modes”) over alternative forms: at [39].

(8) Australian and English jurisprudence was aligned with DIF III in saying that any proposed security, regardless of form, should be considered by way of an evidential assessment of the facts and circumstances of the case. The law had been generally consistent in: (a) not preferring conventional modes of SFC as a default option; (b) placing the burden of proof on the party proffering SFC to justify its preferred form of SFC; and (c) considering the adequacy of the preferred form of SFC in terms of whether it provided sufficient protection for the defendant should the defendant need to recover costs at the end of the proceedings: at [40] and [44].

(9) Although the Mode Principles guided the court in the exercise of its discretion, it was important to consider each case on its facts. The consideration of whether a party was unable to or would be disadvantaged if required to put up conventional modes of SFC was only one of the various factual circumstances that the court would take into consideration when determining the adequacy of the proffered security: at [46].

Case(s) referred to

AP (UK) Ltd v West Midlands Fire and Civil Defence Authority [2001] EWCA Civ 1917 (refd)

Blue Oil Energy Pty Ltd v Tan [2014] NSWCA 81 (refd)

DIF III Global Co-Investment Fund, LP v BBLP LLC [2016] VSC 401 (folld)

Global Finance Group Pty Ltd v Marsden Partners [2004] WASC 52 (refd)

Hong Kong Island Development Ltd v The World Food Fair Ltd [2006] HKCU 449 (refd)

Iddles v Fonterra Australia Pty Ltd [2021] VSC 609 (folld)

Infinity Distribution Ltd v The Khan Partnership LLP [2021] EWCA Civ 565 (refd)

Jeil Crystal, The [2021] SGHC 292 (refd)

Jeil Crystal, The [2022] 2 SLR 1385, CA (refd)

Nylex Corp Pty Ltd v Basell Australia Pty Ltd [2009] VSC 97 (refd)

Pioneer Energy Holdings Pty Ltd, Re [2013] NSWSC 1366 (refd)

Rosengrens Ltd v Safe Deposit Centres Ltd [1984] 1 WLR 1334 (EWCA) (folld)

Tiaro Coal Ltd, Re [2018] NSWSC 746 (folld)

Trailer Trash Franchise Systems Pty Ltd v GM Fascia & Gutter Pty Ltd [2017] VSCA 293 (folld)

Tulip Trading Ltd v Bitcoin Association for BSV [2022] EWHC 141 (Ch) (refd)

Versloot Dredging BV v HDI Gerling Industrie Vesicherung AG [2013] EWHC 658 (Comm) (folld)

Facts

The appellant was Ms Lum Ooi Lin (“Ms Lum”). The respondents consisted of three companies and the joint and several liquidators of two of these companies. The respondents were the plaintiffs in HC/S 267/2022 (“Suit 267”).

Ms Lum sought security for her costs in Suit 267. The respondents were agreeable to furnishing security for costs (“SFC”) in the sum of $90,000, but the parties could not agree on the form of security to be provided. The parties appeared before Senior Assistant Registrar Cornie Ng (“SAR Ng”) for a decision on the matter, and the respondents were ordered to make payment into court of the agreed quantum of security if the parties could not come to an agreement on any one of the other forms of security mentioned in SAR Ng's order. The parties could not agree on an appropriate arrangement. The respondents maintained that an undertaking from the parent company of their litigation funder and a Singapore-incorporated subsidiary of that parent company (the “Omni Undertaking”) would be satisfactory.

The respondents appealed against SAR Ng's order in HC/RA 42/2023 (“RA 42”). The High Court judge (the “Judge”) allowed the appeal in RA 42. The Judge adopted as a matter of Singapore law the principles enunciated in DIF III Global Co-Investment Fund, LP v BBLP LLC[2016] VSC 401 (“DIF III”) for the determination of the mode of SFC and synthesised them into two principles to adopt as the legal framework governing the court's exercise of discretion when determining the adequacy of the form of security offered (the “Mode Principles”). The Mode Principles were that: (a) the plaintiff was not restricted to any fixed form of SFC; and (b) the plaintiff would bear the burden of showing that the proposed form of security was “adequate”, ie, whether it provided a fund or asset against which a successful defendant could readily enforce an order for costs against the plaintiff. Applying the Mode Principles, the Judge accepted the Omni Undertaking as an adequate form of security and ordered that the respondents furnish security for Ms Lum's costs for the period until the filing and/or exchange of affidavits of evidence-in-chief by way of the Omni Undertaking.

Ms Lum applied for permission to appeal against the order made in RA 42 by way of AD/OA 33/2023 (“OA 33”). In OA 33, the Appellate Division of the High Court (the “Appellate Division”) granted permission to appeal against the decision in RA 42 and crafted two questions of law (the “PTA Questions”) for consideration in the appeal.

Legislation referred to

Rules of Court (2014 Rev Ed) O 23 r 2 (consd); O 23

Rules of Court 2021 O 9 r 12 (consd); O 9 r 12(1), O 9 r 12(3), O 18 r 8(4)

Supreme Court of Judicature Act 1969 (2020 Rev Ed) ss 29D(1)(a), 29D(2)(a), 41(6), 59(6), 59(7)

Jaikanth Shankar, Rajvinder Singh Chahal, Stella Ng Yu Xin, Sheiffa Safi ShirbeeniandSambhavi Rajangam (Davinder Singh Chambers LLC) for the appellant;

Kenneth Tan SC (Kenneth Tan Partnership) (instructed), Ng Ka Luon Eddee, Leong Qianyu, Teo Jin Yun GermaineandGitta Priska Adelya (Tan Kok Quan Partnership) for the respondents.

30 November 2023

Belinda Ang Saw Ean JCA (delivering the judgment of the court):

Introduction

1 This appeal, CA/CA 30/2023 (“CA 30”), is against a recent decision of the General Division of the High Court in HC/RA 42/2023 (“RA 42”) filed in HC/S 267/2022 (“Suit 267”) ordering security for costs (“SFC”) in the manner and form of a joint undertaking furnished by the respondents' litigation funder's parent company and a Singapore-incorporated subsidiary of that parent company. The decision in RA 42 highlights and reinforces the wide discretion of the court as to the infinite forms of SFC that the court may accept and order.

2 In AD/OA 33/2023 (“OA 33”), the Appellate Division of the High Court (the “Appellate Division”) granted permission to appeal against the decision in RA 42 and crafted two questions of law for consideration in the appeal. The two questions of law pertain to the nature of the principles governing the exercise of the court's discretion to accept and order the form of SFC offered by a party. A preliminary issue in the present appeal is the scope of the Appellate Division's order in OA 33 granting permission to appeal. The respondents argue that the permission to appeal is confined to the two legal questions posed by the Appellate Division, whereas the appellant adopts the position that the scope of the permission to appeal is wider and allows for an assessment of the merits of the decision of the High Court judge (the “Judge”).

Background facts

3 The appellant is Ms Lum Ooi Lin (“Ms Lum”). The respondents in this appeal are three companies – Hyflux Ltd, Hydrochem (S) Pte Ltd and Tuaspring Pte Ltd – and the joint and several liquidators of Hyflux Ltd and Hydrochem (S) Pte Ltd, Mr Cosimo Borrelli and Mr Patrick Bance.

4 The respondents are the five...