Ng Eng Ghee v Mamata Kapildev Dave

• Jurisdiction: Singapore
• Judge: Chan Sek Keong CJ
• Judgment Date: 07 July 2009
• Neutral Citation: [2009] SGCA 30
• Citation: [2009] SGCA 30
• Date: 07 July 2009
• Published date: 10 July 2009
• Plaintiff Counsel: Harry Elias SC, Philip Fong, Justin Chia and Kylie Peh (Harry Elias Partnership),Rudy Darmawan (in person)
• Docket Number: Civil Appeal Nos 119 and 120 of 2008 (Originating Summonses Nos 10 and 11 of
• Defendant Counsel: Ang Cheng Hock SC, Corina Song, William Ong and Loong Tse Chuan (Allen & Gledhill LLP),C R Rajah SC, Karthigesu Anand Thiyagarajah, Burton Chen and Lalitha Rajah (Tan Rajah & Cheah)
• Court: Court of Appeal (Singapore)
• Year: 2009

7 July 2009 Judgment reserved.

V K Rajah JA (delivering the judgment of the court):

Introduction

1 The right to recover legal costs is especially significant when considerable costs have been incurred in a dispute where one party has deeper pockets than the other. Costs rules and awards could in such circumstances have a profound impact on the final outcome of the legal proceedings. A party’s vindication on the merits may prove to be hollow if the fruits of success are soured by uncompensated costs. The primary objective of a costs order is to compensate the successful party for all reasonable costs incurred rather than to punish the unsuccessful party. Nevertheless, it is trite law that the court may exercise its discretion to give different costs orders on the basis of what it thinks is fair and just. In adjudicating on costs, the court also has to bear in mind that unmerited barriers in the path of recovering reasonably incurred costs might well have the chilling effect of deterring parties, in future, from legitimately pursuing or defending their rights.

2 This judgment is in relation to the cost orders to be made for Civil Appeal No 119 of 2008 (“CA 119/2008”) and Civil Appeal No 120 of 2008 (“CA 120/2008”) (collectively referred to as “the Appeals”) relating to the collective sale of the development known as “Horizon Towers”. We gave judgment in the Appeals in favour of the appellants on 2 April 2009 (see Ng Eng Ghee v Mamata Kapildev Dave [2009] SGCA 14 (“Ng Eng Ghee”)). At the conclusion of our judgment (ie, Ng Eng Ghee), we invited the parties to address us on the various possible costs permutations that ought to follow our various findings. The parties (as well as two objecting subsidiary proprietors owning a single unit, Then Khek Koon and Tan Kim Lian Jasmine, who had appeared in the High Court proceedings but did not appeal to this court (collectively referred to as “the non-appealing parties”)), responded vigorously to our request. After considering their submissions, we now give our decision.

Factual matrix

3 The material facts have been fully elaborated in our judgment in Ng Eng Ghee, and we need not repeat them in the present judgment in full. For ease of reference, in this judgment, we shall adopt the same references to the parties that we had earlier employed in Ng Eng Ghee. Needless to say, the present judgment and Ng Eng Ghee ought to be read together as the present judgment is the corollary of Ng Eng Ghee. For present purposes, however, it should be recalled that the identity of the applicants for the collective sale had changed twice in the course of the Strata Titles Board (“the Horizon Board”) proceedings (in July to August 2007 (“the First Tranche”) and October to November 2007 (“the Second Tranche”) (collectively referred to as “the Horizon Board proceedings”) before the respondents in the Appeals were substituted for the earlier applicants in the application for the collective sale. For this reason, we will refer to the earlier applicants for the collective sale as “the majority owners”. Where, from time to time, we intend to refer to those who consented to the collective sale generally, we will use the term “consenting subsidiary proprietors”. Broadly speaking, however, both of these terms refer to the same persons.

4 It should also be remembered that various proceedings involving the parties to the Appeals and other parties had been concluded prior to the filing of the Appeals. It is pertinent, for the purposes of assessing costs, that not all of the parties had been involved in each of these earlier proceedings. By way of a quick illustration, we need only mention that the intervener, Horizon Partners Pte Ltd, was not allowed to be heard in the Horizon Board proceedings. Therefore, to facilitate understanding, we think it will be helpful to tabulate an outline of all of the parties’ actual involvement at the various stages of the dispute, up to and including the Appeals:

Stage of proceedings	Relevant parties	Counsel
The Horizon Board proceedings (ie, the First Tranche and the Second Tranche)	The majority owners	M/s Tan Rajah & Cheah (“TRC”)
	The appellants in; CA 119/2008	M/s Harry Elias; Partnership (“HEP”)
	The appellants in; CA 120/2008 and the; non-appealing parties	M/s Tan Kok Quan; Partnership (“TKQ”)
The appeal by way of Originating Summons No 1269 of 2007 (“OS 1269/2007”) to the High Court against the Horizon Board’s decision after the First Tranche to dismiss the application for a collective sale on the ground that the application was technically irregular	The majority owners	TRC
	The appellants in; CA 119/2008	HEP
	The appellants in; CA 120/2008 and the; non-appealing parties	TKQ
	The intervener in the; Appeals	M/s Allen & Gledhill LLP; (“A&G”)
The appeals by the objecting subsidiary proprietors by way of Originating Summonses Nos 10 of 2008 and 11 of 2008 to the High Court against the Horizon Board’s decision in October 2007 to allow the application for a collective sale (“the High Court Proceedings”), which led to the appeals	The respondents in the; Appeals	TRC
	The appellants in; CA 119/2008	HEP
	The appellants in; CA 120/2008 and the; non-appealing parties	All in person
	The intervener in the; Appeals	A&G
The appeals against the decision in the High Court proceedings to uphold the Horizon Board’s order for a collective sale (ie, the Appeals)	The respondents in the; Appeals	TRC
	The appellants in; CA 119/2008	HEP
	The appellants in; CA 120/2008	In person
	The intervener in the; Appeals	A&G

Issues to be considered

5 In arriving at our final cost orders we had to primarily determine: (a) who is entitled to costs; (b) what costs are recoverable; and (c) who is liable to pay costs.

The costs indemnity principle

6 Before we discuss the issues set out in [5] above, it is important to recall the general rule in Singapore, viz, that costs should follow the event except in special circumstances (see Singapore Civil Procedure 2007 (GP Selvam gen ed) (Sweet & Maxwell Asia, 2007) (“Singapore Civil Procedure 2007”) at paras 59/3/1 and 59/3/5; see also Tullio v Maoro [1994] 2 SLR 489). This principle (ie, that an unsuccessful party would generally be ordered to pay the successful party’s reasonable litigation costs) has been sometimes termed “the indemnity principle”. It is not to be confused with costs on “the indemnity basis”, which would be costs taxed on the basis that any doubts as to their reasonableness are to be resolved in favour of the receiving party (O 59 r 27(3) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“the Rules”)), as the alternative to costs on “the standard basis”, where any doubts as to reasonableness is to be resolved in favour of the paying party (see O 59 rr 27(1) and 27(2) of the Rules).

7 The fundamental conception of costs which underlies the indemnity principle is that costs are imposed to compensate the successful party and not to punish the losing party (although costs may sometimes be imposed as a punishment for improper or unreasonable behaviour in the proceedings; see, eg, O 59 rr 7 and 8 of the Rules). As Bramwell B astutely noted in Harold v Smith (1860) 5 H & N 381 (at 385); 157 ER 1229 (at 1231):

Costs as between party and party are given by the law as an indemnity to the person entitled to them : they are not imposed as a punishment on the party who pays them, nor given as a bonus to the party who receives them. Therefore, if the extent of the damnification can be found out, the extent to which costs ought to be allowed is also ascertained.

To this we should add that the indemnity principle as applied in Singapore rests on one bedrock feature. It only extends to costs reasonably incurred and not all costs incurred. Therefore, the principle, does not, in practice, amount to a full and complete indemnity to the successful party against all the expenses to which he has incurred in relation to the proceedings (see Singapore Civil Procedure 2007 at para 59/27/5) unless this has been contractually agreed upon or if the court makes a special order in exceptional circumstances.

Parties entitled to costs

Entitlement of the non-appealing parties to costs

The submissions

8 The appellants in CA 120/2008 and the non-appealing parties submitted that the non-appealing parties should be awarded costs for the following reasons:

(a) This court has the power to award such costs on the basis of O 59 rr 2(2) and 3(2) of the Rules.

(b) The non-appealing parties expended substantial time, effort and money in building and contributing to the final success of the Appeals; eg, through the cross-examination of the applicant’s witnesses in the Horizon Board proceedings.

(c) This court’s decision in Ng Eng Ghee ([2] supra) affirmed the non-appealing parties’ position on issues that they had consistently raised in the Horizon Board proceedings and the High Court proceedings.

(d) This court’s decision in Ng Eng Ghee reversed the decisions of the Horizon Board and the High Court. It would be illogical and inequitable if those decisions (including the costs orders) were overturned only for the benefit of the objecting subsidiary proprietors who appeared before this court but not all those who appeared below. All of them shared an indivisible community of interests in the proceedings below, in that any decision regarding the collective sale order would simultaneously affect the ability of each and every one of them to retain their homes.

(e) This court should give effect to its finding of bad faith apropos the en bloc sale of Horizon Towers by compensating all those who had contributed towards the build-up of the case.

(f) The non-appealing parties should not have to suffer out-of-pocket expenses because they wanted to right a wrong done to them and their neighbours.

9 TRC (for the respondents in the Appeals) and A&G (for the interveners) submitted that the decision of the High Court in Tan Harry v...