RBG Resources plc (in liquidation) v Banque Cantonale Vaudoise and Others

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 06 August 2004
• Neutral Citation: [2004] SGHC 167
• Court: High Court (Singapore)
• Published date: 13 August 2004
• Year: 2004
• Plaintiff Counsel: Sarjit Singh Gill SC and Seah Yi-Lein (Shook Lin and Bok), Matthew Saw (Lee and Lee)
• Defendant Counsel: Lawrence Teh and Loh Jen Wei (Rodyk and Davidson)
• Subject Matter: Civil Procedure,Costs,Certification of costs,Whether plaintiff should be given certification of costs for more than one counsel,Rules of Court (Cap 332, R5, 2004 Rev Ed) O 59 r 19.,Plaintiff obtained judgment against defendant,Whether plaintiff entitled to costs for entire proceedings even though plaintiff failed on one issue raised during trial,Whether plaintiff entitled to claim costs of preparing and filing affidavit of evidence-in-chief that was primarily on the unsuccessful issue.,Plaintiff did not call an intended witness to give evidence,Whether plaintiff entitled to costs of preparing and filing affidavit of evidence-in-chief of such witness,Whether costs reasonably incurred.,Offer to settle,Two offers to settle given one after another,Whether earlier offer deemed withdrawn,Subsequent offer given a day after commencement of trial,Whether offer serious and genuine,Whether plaintiff should have benefit of indemnity costs from date of service of offer.,Tort,Conversion,Damages,Interest payable on damages,Appropriate rate of interest,Appropriate date from which interest should run.
• Citation: [2004] SGHC 167

6 August 2004

Woo Bih Li J:

Background

1 In my judgment of 7 June 2004, I declared that the plaintiff, RBG Resources plc (“RBG”), remained the legal and beneficial owner of metals in certain warehouses which had been held for the account of RBG prior to any dealing of the metals between RBG and the second defendant, Credit Lyonnais (“CL”), save for one drum of nickel identified as 519-W127 by SGS Testing & Control Services Singapore Pte Ltd. I also ordered that the sale proceeds of RBG’s metal be released to RBG or its solicitors.

2 I further ordered CL to pay damages to RBG for conversion of nickel briquettes which CL had taken delivery of from one of the warehouses, such damages being the net purchase price or prices which CL had obtained for the briquettes as CL had sold the same.

3 Consequently, CL’s counterclaim for the metals in the warehouses, which also formed the subject matter of RBG’s claim, was dismissed, save for the one drum of nickel identified as 519-W127. CL was consequently entitled to the sale proceeds of that one drum of nickel.

4 I reserved the question of costs and interest for counsel’s submissions. After hearing submissions, I made certain orders on costs and interest. I set out below the arguments and my orders and reasons.

Costs

5 On the question of costs, RBG sought an order for costs of the entire proceedings to be paid by CL although it did not succeed on an issue under s 62(4) of the Sale of Goods Act (Cap 393, 1999 Rev Ed). I will refer to this legislation as “the Act”.

6 RBG relied on the decision of the Court of Appeal in MCST No 473 v De Beers Jewellery Pte Ltd [2002] 2 SLR 1 where Yong Pung How CJ said at [57]:

The principles governing the award of costs are elucidated in Re Elgindata (No 2) [1993] 1 All ER 232, and adopted in Singapore in Tullio v Maoro [1994] 2 SLR 489. The relevant passage in Re Elgindata (No 2) provides (at p 237):

The principles are these. (1) Costs are in the discretion of the court. (2) They should follow the event, except when it appears to the court that … some other order should be made. (3) The general rule does not cease to apply simply because that successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or a part of his costs. (4) Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs but order him to pay the whole or a part of the unsuccessful party’s costs … the fourth implies that a successful party who neither improperly nor unreasonably raises issues or makes allegations on which he fails ought not to be ordered to pay any part of the unsuccessful party’s costs.

As the respondent was the successful party below, according to principle (2), prima facie, it should be awarded costs. As for principle (3), the starting point was that the respondent failed on one ground, colore officii. However, it should not be deprived of its costs. Firstly, the trial ended within the allotted time. Secondly, as the respondent relied on the same facts for proving mistake of law and for proving colore officii, and as the appellant relied on the same defences to both claims, it was unlikely that the respondent’s pleading colore officii caused a significant increase in the cost of the proceedings. The respondent had also paid costs to the appellant for the late amendment of its pleadings. Since it was not alleged that the respondent had raised issues improperly or unreasonably, according to principle (4), it was not ordered to pay the appellant’s costs.

7 RBG argued that it was entitled to the costs for the entire proceedings because, firstly, the trial ended within the number of days for which it was fixed for hearing and, secondly, the s 62(4) issue was a legitimate one raised in response to CL’s own reliance on another provision of the Act, ie s 20A. It would have been irresponsible not to raise the s 62(4) issue.

8 RBG also disclosed that it had made offers to settle. The first offer was served on 22 December 2003 but was subsequently withdrawn. The second offer was served on 23 December 2003. The third offer was served on 9 January 2004, a day after the commencement of trial.

9 The second offer was on the following terms:

(i) The Plaintiff is to discontinue its claim against the 2^nd Defendant for damages for conversion of 300mt of nickel briquettes while the 2^nd Defendant is to discontinue its counterclaims against the Plaintiff;

(ii) Each party is to bear its own legal costs.

10 The third offer was on the following terms:

(i) The Plaintiff is to discontinue its claim against the 2^nd Defendant for damages for conversion of 300mt of nickel briquettes.

(ii) The 2^nd Defendant is to discontinue all its counterclaims against the Plaintiff, namely, the 2^nd Defendant’s counterclaim for the nickel cathodes, copper cathodes and tin ingots in the Warehouses.

(iii) The 2^nd Defendant is to withdraw its defence to the Plaintiff’s claim to the nickel cathodes, copper cathodes and tin ingots in the Warehouses.

(iv) The Plaintiff is to pay the 2^nd Defendant the sum of US$100,000.

(v) Each party is to bear its own legal costs.

11 I should add that the value of the metals in the warehouses which were the subject of RBG’s and CL’s claims was between US$8m and US$9m and the value of the nickel briquettes under the claim for conversion was over US$2m.

12 As RGB was successful in its claim for the metals in the warehouses and also successful in its claim for conversion, RBG sought indemnity costs from the date of service of the second offer or, alternatively, from the date of service of the third offer, and party to party costs for the period before. For its primary position, RBG relied on the judgment of Kan Ting Chiu J in LK Ang Construction Pte Ltd v Chubb Singapore Pte Ltd [2004] 1 SLR 134 where he said at [18]:

I do not think that an offer should be deemed to withdraw a previous offer. The rules do not provide for deemed withdrawals other than by expiration of time (r 3(4)). A subsequent offer will have that effect if it states that expressly, but that should not be a deemed effect. If no withdrawal is expressed then both offers remain open for acceptance as long as they remain and have not expired. It may be purposeless for the offeree to consider a $50,000 offer that is followed by a $100,000 offer, but that is meaningful to the offeror if judgment is entered for less than $50,000 as his entitlement to indemnity costs runs from the date of service of the $50,000 offer. Offers of different sums may have different attractions. An offer of $50,000 to be paid immediately may not be less attractive than a $75,000 offer to be paid in instalments, and there is no reason why the offeree should not be allowed to choose between them.

13 RBG also sought a certification of costs for two counsel under O 59 r 19 of the Rules of Court (Cap 322, R 5, 2004 Rev Ed). RBG submitted that the case involved complex factual and legal issues and novel questions of law. On the factual side, the case involved metal trading which has its own rules and processes. Both sides had to consult and engage experts to understand and explain to the court these rules and processes. On the legal side, RBG submitted that s 20A had not been previously considered by any court in the Commonwealth which relies on the English Sale of Goods Act as does Singapore. RBG further submitted that the issues were diverse. I should also mention that RBG were represented by Sarjit Singh Gill SC and Quek Mong Hua who were from different law firms and each of these counsel had his own colleague or colleagues assisting too.

14 CL did not agree that RBG should be awarded the entire costs of the action. Furthermore, its position was that all costs in relation to the defences and counterclaims of other defendants should be excluded.

15 CL submitted that work done up to and including the filing of RBG’s re‑amended statement of claim, excluding the claim for conversion, should not be awarded to RBG as its statement of claim, prior to amendment, disclosed no reasonable cause of action and/or was an abuse of court process.

16 CL also objected to costs being awarded to RBG for work done in relation to affidavits of evidence-in-chief (“AEIC”) of three persons ie Tay Choon Peng, Clement Paul Danin and Kon Yin Tong, and also asserted that costs in relation to the AEIC of Malcolm Shierson should be reduced significantly. Various reasons were given for the objections.

17 As for the s 62(4) issue, CL submitted that not only should RBG be deprived of costs thereof, RBG should pay such costs to CL.

18 On the offers to settle, CL submitted that the second offer was not complete as it did not address the rest of the proceedings, ie what CL was to do about RBG’s claim and its defence thereto. Indeed, CL’s solicitors had written to RBG’s solicitors regarding this on 24 December 2003. There was no response and instead, the third offer to settle was served. CL submitted that as the third offer to settle was served so late, it was not designed to encourage a settlement but to put pressure on CL. By then, the mind-set of CL was to go to trial. CL argued that an offer to settle should have been served with an ample amount of...