Rajabali Jumabhoy and Others v Ameerali R Jumabhoy and Others (No 2)

• Jurisdiction: Singapore
• Judge: Chao Hick Tin J
• Judgment Date: 03 June 1998
• Neutral Citation: [1998] SGCA 39
• Docket Number: Civil Appeal No 145 of 1997
• Date: 03 June 1998
• Published date: 19 September 2003
• Year: 1998
• Plaintiff Counsel: Terence Etherton QC, Harry Wee and Leong Why Kong (Braddell Brothers)
• Citation: [1998] SGCA 39
• Defendant Counsel: Davinder Singh SC, Ameera Ashraf and Harpreet Singh (Drew & Napier),Jules Sher QC and Edwin Tong (Allen & Gledhill),Chong Boon Leong (Rajah & Tann)
• Court: Court of Appeal (Singapore)
• Subject Matter: O 59 r 6(2) Rules of Court,Appellants succeed on major issues argued before court,Appellants' conduct,Principles,Acting more in own interests rather than for benefit of trust,Whether respondents can rely on Rules of Court O 59 r 6(2) for indemnity on costs to be paid by trust funds,Civil Procedure,Whether respondents have acted unreasonably in defending claim,Appellants' arguments in court below not as extensive as on appeal,Respondents not entitled to full costs of appeal,Whether a respondent is entitled to costs of appeal and below if appeal withdrawn against him as part of the settlement between him and the appellants,Costs,Whether respondent not represented at appeal hearing but after has file case through solicitors entitled to costs of appeal,Whether the appellants have acted for benefit of trusts,Appeal costs,Respondents' success at appeal not substantial,Whether respondents' cost should be lower than costs awarded on appeal

Judgment:

LP THEAN JA

Cur Adv Vult

(delivering the judgment of the court): The general principles upon which the court awards costs are too well settled to need any repetition here. Suffice it here to say that they have been authoritatively laid down by the English Court of Appeal in the Re Elgindata Ltd (No 2) [1993] 1 All ER 232, adopted by this court in Tullio v Maoro [1994] 2 SLR 489 , and recently restated by this court in Tan Liang Hong v Lee Kuan Yew & Anor (Unreported) .

2.Although this appeal was dismissed, there were major issues raised and argued before us, on which the appellants succeeded. First, they succeeded in establishing that the trustees of the settlement were in breach of trust in effecting the share swap in 1991, ie transferring the shares they held in SHL to SIS in exchange for the shares of the latter. This issue turned on the true construction of cl 5 of the settlement and involved a detailed consideration of (i) the nature of the transaction effected in 1979, in which the Scotts Road properties were sold to SHL, the purchase price of which was satisfied by SHL by the issue and allotment of fully paid shares in that company, and (i) the meanings of the terms `colony of Singapore` and `securities` in cl 5. Secondly, the appellants succeeded in their argument that s 11(4) of the Trustees Act (Cap 337) (the Act) was not available to sanction the share swap, as that section was excluded by s 2(2) of the Act and accordingly the share swap was not saved by s 11(4) of the Act. Thirdly, they also succeeded in the argument that the court had no jurisdiction to approve the share swap either under the court`s inherent jurisdiction or under s 59(1) of the Act. The appellants` contentions on these issues formed the major part of their case against the respondents. In effect, they had established their claims against the respondents, but the latter by reason of cl 6 of the settlement and s 63 of the Act were relieved from any liability for the breach of trust.

3.The appellants, however, did not succeed in their claim against SIS as a constructive trustee of those shares in SHL which were transferred to it by the trustees of the settlement. Nor did they succeed in their claim against the respondents in respect of the other breaches of trust allegedly committed by the respondents, namely, the carrying on of the loss-making businesses and the pledging of the SHL shares. Further, on a relatively minor issue on the status of the two shareholder agreements, they also failed.

4.In these circumstances, although the end result was the dismissal of the appeal, it cannot really be said that the respondents succeeded substantially in this appeal. Indeed on the major issues they failed. Further, the claim for the declaration that SIS is a constructive trustee of the shares in SHL did not concern them but SIS. Bearing in mind that the major issues occupied the bulk of the time and the attention of the parties before us, the respondents should not be entitled to the entire costs of the appeal. In all the circumstances, they should be awarded only 40% of the costs of the appeal, and in this connection we agree that there should be a certificate of two solicitors for getting up the case and attendance in court pursuant to O 59 r 19(1) of the Rules of Court. We so order. Only one set of costs is to be allowed.

5.Although SIS was not represented by counsel before us at the hearing it is a party to the appeal, and it has through its solicitors at the material time filed its case. It should be entitled to the costs of the appeal, although it should not be entitled to any costs for attendance before us. We therefore order the appellants to pay to SIS the costs of the appeal, and direct that on taxation of costs there should be allowed only the costs relating to the issue of constructive trust and that no costs...