Mohamed Amin bin Mohamed Taib and others v Lim Choon Thye and others

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 18 November 2010
• Neutral Citation: [2010] SGHC 341
• Plaintiff Counsel: Gary Low and Emmanual Chua (Drew & Napier LLC)
• Docket Number: Originating Summons No 17 of 2008
• Date: 18 November 2010
• Hearing Date: 22 July 2010,03 August 2009
• Subject Matter: Civil Procedure
• Year: 2010
• Citation: [2010] SGHC 341
• Defendant Counsel: Cheong Aik Chye and Cheng Yuen Hee (A C Cheong & Co),Vijay Kumar Rai (Arbiters' Inc Law Corporation),Ranvir Kumar Singh (Unilegal LLC)
• Court: High Court (Singapore)
• Published date: 23 November 2010

Judith Prakash J: Introduction

The substantive issue in Originating Summons 17 of 2008 (“OS 17/2008”) was the plaintiffs’ appeal to have a decision of the Strata Titles Board (“the Board”) set aside and to have their original application for approval of the collective sale of the condominium development known as Regent Court (Strata Title Plan No 866 comprised in Land Lot Mukim 17-5574T) remitted to the Board for a fresh decision. On 30 October 2008, I heard the appeal and granted the orders sought. I ordered the Board to decide who should bear the costs of the earlier hearing before it after it had completed the proceedings. I then adjourned the question of the costs of the appeal to a later date.

Pursuant to my order of 30 October 2008, the Board recommenced hearing the plaintiffs’ application for approval of the proposed collective sale on 18 March 2009. By that time, however, new information had come to light: the agreement relating to the collective sale (“the SPA”) had not, in fact, been stamped. The Board learnt of this from a letter sent (without prior request or prompting) by the Inland Revenue Authority of Singapore (“IRAS”) dated 4 December 2008; they then brought the letter’s contents to the parties’ attention. The parties made an attempt to settle the matter but were unsuccessful. On 23 March 2009, the Board gave the parties one final opportunity to have the SPA stamped; alternatively, they were to make one final attempt at arriving at a settlement. On 24 March, though, the SPA remained unstamped and no settlement had been arrived at. The Board then dismissed the plaintiffs’ application for approval of the collective sale on the ground that neither side would have been able to discharge their burden of proof without making reference to the SPA which, being unstamped, could not be admitted as evidence before the Board. It also directed parties to bear their own costs. On 27 July 2009, the seventh and eighth defendants filed Summons No 3938 of 2009 (“Sum 3938/2009”) to have my decision of 30 October 2008 set aside on the basis of the non-stamping of the SPA. Woo J heard the matter and dismissed the application on 18 August 2010. The seventh and eight defendants were ordered to pay the plaintiffs their costs in defending Sum 3938/2009.

On 22 July 2010, parties returned before me to address the question of costs awardable on the outcome of OS 17/2008. It was no surprise, in light of the previous cost orders made by the STB and by Woo J in Sum 3938/2009, that the arguments before me were hard-fought and fraught – doubtlessly, the defendants felt hard done by when they were required to bear their own and the plaintiffs’ costs in the STB proceedings and Sum 3938/2009 respectively. Nevertheless – as the plaintiffs were quick to remind me – the default position in law is that costs follow the event: see O 59 r 3(2) of the Rules of Court (Cap 322, Rule 5, 2006 Rev Ed). For all that happened after 30 October 2008, the fact remained that the plaintiffs had succeeded on their substantive application before me in OS 17/2008; they were entitled, therefore, to their costs unless it could be shown that the circumstances of the case justified an order otherwise.

The Parties’ Submissions

Costs are awarded at the court’s discretion; nevertheless, as I have already mentioned, the general rule is that cost should follow the event unless it appears to the court that in the circumstances of the case some other order should be made or that there are special reasons for depriving the successful litigant of his costs in part or in full: O 59 r 3(2); Tullio Planata v Maoro Andrea G [1994] 2 SLR(R) 501 (“Tullio”); and Ho Kon Kim v Lim Gek Kim Betsy and others and another appeal [2001] 3 SLR(R) 253. These reasons may arise from the conduct of all the parties, both from before and during the proceedings: O 59 r 5(1)(b). They would include the conduct of any party in raising unnecessary claims or issues and in unreasonably or improperly acting or omitting to act in such a way as to save costs: O 59 r 6A(1) and r 7, respectively.

It was submitted by Mr Low on behalf of the plaintiffs that the only special reason that might justify depriving a successful party of its costs would be if that party had acted either improperly or unreasonably: Singapore Civil Procedure 2007 (GP Selvam ed-in-chief) (Singapore Sweet & Maxwell Asia, 2007), at para 59/3/7. In this case, the plaintiffs did neither. They alleged that it was the defendants – in particular the eight defendant – who made factual allegations that sought to discredit the plaintiffs and their solicitors, failed to address the relevant point of law before the court, and who made procedural errors that unnecessarily complicated the plaintiffs’ response and preparation for the appeal in OS 17/2008. Thus, any wasted time and costs arose out of the defendants’ conduct and the plaintiffs could not be said to be disentitled to their costs.

However, Mr Singh (for the first to sixth defendants) submitted that it was more appropriate in this case for no order to be made as to costs. He relied on three main grounds for this submission: first, he pointed out that the plaintiffs were being maintained in this action by a non-party (the purchaser’s property agent who was responsible for arranging the collective sale). To award the plaintiffs costs would amount, therefore, to awarding them a bonus. His second point was that the issue raised in OS 17/2008 dealt with a legal question that was both novel and of general interest and, as a result, the defendants should not be made to bear the plaintiffs’ costs in the appeal. Finally, he argued that the defendants had already been deprived of costs by the STB on two previous occasions. The court should, he argued, take note of this fact in deciding the appropriate costs order in OS 17/2008.

Mr Rai, who was the eight defendant and who argued on behalf of himself and the seventh defendant, submitted that the plaintiffs should not merely be deprived of their costs but have costs ordered against them as well. I shall be considering Mr Rai’s arguments in greater detail below. For now, it suffices to summarise his arguments thus: that it was the plaintiffs’ failure to ensure that the SPA had been duly stamped and failure to disclose this fact earlier that caused parties to waste much time and effort in addressing a futile case. For that reason, they should be deprived of their costs and ordered to pay costs to the defendants instead.

Mr Cheong, for the ninth and tenth defendants, also asked that no order be made as to costs. He supplemented Mr Rai’s submissions with reference to ss 42 and 63 of the Stamp Duties Act (Cap 312, 2006 Rev Ed) (“the Act”) – arguing that the failure to procure the stamping of the SPA amounted to an offence under the Act and this was conduct that the court could and would take into consideration in assessing costs. As for the question of maintenance: while Mr Cheong acknowledged that plaintiffs were not being maintained by a third party in the technical sense of the word, he argued that where a successful plaintiff had agreed with his solicitor not to pay the latter any costs for conducting the action on his behalf, that plaintiff would be precluded from recovering costs from the other side. Again, the details of this argument will be considered below.

The Issues

I do not accept Mr Singh’s submissions concerning the (supposed) novelty of the point of law raised in OS 17/2008 relevant to the question of costs before me; nor do I accept his submission concerning the defendants’ (alleged) deprivation of costs in the hearing before the STB. Both arguments seem to me to have no impact on the question of whether the plaintiffs are entitled to costs following their success in OS 17/2008. The complaint about deprivation of costs, in particular, is one that should be taken up before the STB itself. This is not the forum for it and it evidently has no bearing on the costs of OS 17/2008.

There are, however, two issues raised that – to my mind – may have an impact on the plaintiffs’ entitlement to costs. These are: The non-stamping of the SPA; and The nature of the fee-paying arrangement between the plaintiffs and their solicitors. I shall address them in turn.

The failure to procure stamping of the SPA

As mentioned, it was Mr Rai who first raised the fact of the SPA’s non-stamping as a relevant consideration to the plaintiffs’ entitlement to costs. In Tullio, the Singapore Court of Appeal, at [24], endorsed the headnote from the English Court of Appeal decision in Re Elgindata Ltd (No 2) [1992] 1 WLR 1207 as accurately summarising the relevant principles governing the award of costs:

... The principles on which costs were to be awarded were (i) that costs were in the discretion of the court, (ii) that costs should follow the event except when it appeared to the court that in the circumstances of the case some other order should be made, (iii) that the general rule did not cease to apply simply because the successful party raised issues or made allegations that failed, but that he could be deprived of his costs in whole or in part where he had caused a significant increase in the length of the proceedings, and (iv) that where the successful party raised issues or made allegations improperly or unreasonably the court could not only deprive him of his costs but could also order him to pay the whole or part of the unsuccessful party’s costs. The fourth principle implied, moreover, that a successful party who neither improperly nor unreasonably raised issues or made allegations which failed ought not to be ordered to pay any part of the unsuccessful party’s costs...

[emphasis added]

According to Mr Rai, the plaintiffs’ failure to ensure that the SPA had been duly stamped and their failure to disclose this fact earlier caused a significant increase in the length of the proceedings....