Re Nirumalan Kanapathi Pillai (A Solicitor)

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 30 November 1999
• Neutral Citation: [1999] SGHC 312
• Docket Number: Petition of Course No 4 of 1997
• Date: 30 November 1999
• Published date: 19 September 2003
• Year: 1999
• Plaintiff Counsel: R Govintharasah (Gurbani & Co)
• Citation: [1999] SGHC 312
• Defendant Counsel: Liew Teck Huat (Niru & Co)
• Court: High Court (Singapore)
• Subject Matter: Whether quantum awarded excessive,Costs,Cost sharing agreement not stated in order,Petitioner one of multiple clients,Civil Procedure,Solicitor and client bill,Whether question one of interpretation of order made,Taxation,Whether taxation should be based on cost sharing agreement,Whether order made can be corrected

: This is a review of a taxation by the assistant registrar of a solicitor and client bill of costs presented by the respondent firm, Niru & Co, for taxation subsequent to an order made on a petition of course presented by Guardian Royal Exchange Assurance (Malaysia) Sdn Bhd. The review was applied for by the petitioner. I first heard it over two days on 30 April and 11 May 1999 and at the end of that hearing, whilst I taxed a further $20,000 off Section 1 of the bill, I disallowed the petitioner`s arguments on principle. Neither party was satisfied with my decision and both wrote in for further arguments. They also put in written submissions.

Background

In 1994, Progressive Insurance Sdn Bhd and Malaysian Assurance Alliance Berhad (`the claimants`) were the co-insurers of Sabah Shipyard against loss or damage to its cargo during a voyage from Houston, Texas to Labuan, East Malaysia. Each of the claimants provided the insurance via their respective marine cargo policies, insuring the cargo against marine risks. The claimants obtained facultative reinsurance cover from 30 insurance companies. The petitioner was one such company and they assumed 7.15% of the reinsurance risk.

During the voyage, the cargo fell into the sea. Sabah Shipyard made a claim against the claimants under the policies and, liability being repudiated, subsequently commenced a civil action in the High Court of Malaya in Kuala Lumpur against the claimants. The claimants thereupon took out third party proceedings against all 30 reinsurers including the petitioner. In the meantime, Sabah Shipyard also commenced proceedings in Texas against, amongst others, the carriers for loss and damage to the cargo. In September 1995, the claimants were joined as defendants to the Texas action.

The claimants subsequently intimated an intention to join the reinsurers as third parties to the US action. Before this application was made, the reinsurers applied to the High Court of Malaya for an anti-suit injunction restraining the claimants from joining them as parties to the Texas action. The reinsurers` application was not heard as an amicable settlement was reached among the parties whereby the reinsurers paid the claimants US$4.5m in full and final settlement of their claims. It should be noted that the original claim was quantified as being in the sum of US$14.5m.

Turning to the position on legal representation, this starts with a meeting held on 14 October 1994 in Kuala Lumpur between representatives from 25 of the reinsurers and Mr NK Pillai, a partner of the respondent law firm. The petitioner was among the reinsurers represented at the meeting. According to a letter sent out by the respondent on 17 October it was decided at the meeting that Niru & Co, advocates & solicitors in Singapore, and Alsop Wilkinson, solicitors in London, would be appointed jointly to represent the interest of the reinsurers. Further, according to para B4 `All costs and expenses to be incurred by reinsurers will be shared on a pro-rated basis of their share of the slip`. By para B10, it was stated that all reinsurers who had agreed on the terms of the appointment would send a confirmation of the appointment to the respondent. The petitioner duly wrote to the respondent on 21 October 1994 confirming that they wished to appoint the respondent and Alsop Wilkinson to act on their behalf in relation to the claim.

The respondent`s retainer came to an end in September 1996 with the settlement of the claim. The respondent rendered individual bills to each of the 30 reinsurers. The bill rendered to the petitioner was dated 19 September 1996 and was in two parts. The first part dealt with the professional charges billed by the respondent and these were quantified as amounting to $62,920. The second part of the bill was for disbursements which were quantified as $7,039.41. About a week later, the respondent sent the reinsurers a schedule which gave a breakdown of how they had been billed. The schedule gave the name of each reinsurer, the amount of professional costs payable by that reinsurer, the percentage of the total costs which the individual insurer`s costs comprised and the amount of the disbursements to be paid by each reinsurer. The schedule showed that the respondent`s total professional fees came up to $880,000 and that the sum of $62,920 billed to the petitioner as professional fees amounted to 7.15% of the total fees.

Of the 30 reinsurers so billed, 25 paid the respondent`s costs as billed without objection and another paid after judgment was obtained against it in a district court action. Four reinsurers have, however, disputed the bills sent to them. Each of them took out a petition of course and obtained orders on those petitions.

This petition was, like the other three, filed on 17 September 1997. In para 1 of the petition, it was stated, inter alia, that the petitioner was one of a group of 30 reinsurers for whom the respondent had acted `on the basis of cost sharing`. The petition was heard before me the same day and a draft order was placed before me by the respondent`s solicitors. I made an order in terms of the draft so presented.

For the purpose of understanding the arguments that were put forward before me, it may be helpful to reproduce the first two paragraphs of this order. They read as follows:

Upon the petition of Guardian Royal Exchange Assurance (Malaysia) Bhd (`the petitioner`) this day preferred unto this court it was alleged that the petitioner employed the abovenamed Nirumalan Kanapathi Pillai who carries on business under the name of `Niru & Co` to act as its solicitor in relation to defending a claim made by Progressive Insurance Sdn Bhd and Malaysian Assurance Alliance Berhad (hereinafter referred to as the `claimants`) against the petitioner for an indemnity under a policy of reinsurance issued by the petitioner in respect of the loss of a turbine and machinery insured by the claimants under their marine Cargo Policy No 215-2000/00/A/11829/93 dated 24 December 1993. The petitioner was one of a group of 30 reinsurers for whom the said Nirumalan Kanapathi Pillai acted on the basis of cost sharing. The claim was settled amicably on or about mid-September 1996 and that the said solicitor on or about 19 September 1996, delivered unto the petitioner a bill of costs which as the petitioner is advised ought to be taxed and that the petitioner submits to pay what shall be certified as payable to the said solicitor on the taxation of his said bill.

It was therefore prayed and it is accordingly ordered that it be referred to the Registrar to tax and settle the said bill and that the petitioner and also the said solicitor do produce before the said Registrar upon oath as he shall direct all books papers and writings in their custody or power respectively relating to the matters hereby referred or any of them and that they be examined touching the same matters or any of them as the said Registrar shall direct.

How the taxation proceeded

Pursuant to the order made, the respondent filed Bill of Costs No 881 of 1998 in October 1998. As drawn, the bill was for $110,000 as professional costs and $7,038.03 as disbursements. Under Section 3 which dealt with the disbursements, the various items were described and thereafter the amount of the disbursement charged to the petitioner was calculated on the basis of 7.15% of the total sum incurred for that disbursement. It was clear that in respect of disbursements, the figure of $7,038.03 represented not simply disbursements incurred for the petitioner but was a percentage of the total disbursements incurred for all 30 reinsurers. This was not the case with the professional costs which purported to represent the value of the work done for the petitioner alone.

The petitioner`s solicitors duly marked the bill of costs. They had objections in principle to some of the items of work stated in the bill in relation to the legal issues considered and they also had objections on quantum in particular to the figure of $110,000 under Section 1. They did not, however, reject the bill in toto as being drawn up on the wrong basis. The bill was taxed by the learned assistant registrar Ms Vivian Wong on 29 December 1998. After hearing argument, she made the following awards:

Section 1	:	$75,000
Section 2	:	$1,500
Section 3	:	$5,377.99

After hearing further argument on 21 January 1999, the petitioner`s share of a bill rendered by Kuala Lumpur solicitors was allowed as part of the...