SATS Construction Pte Ltd v Islam Md Ohidul

• Jurisdiction: Singapore
• Judge: Debbie Ong JC
• Judgment Date: 17 May 2016
• Neutral Citation: [2016] SGHC 99
• Plaintiff Counsel: Dhanwant Singh and Krishna Morthy (S K Kumar Law Practice LLP)
• Docket Number: Tribunal Appeal No 7 of 2015
• Date: 17 May 2016
• Hearing Date: 11 March 2016,29 January 2016,27 April 2016
• Subject Matter: Pro Bono Services,Costs,Civil Procedure
• Year: 2016
• Citation: [2016] SGHC 99
• Defendant Counsel: Chan Kah Keen Melvin and Hannah Tjoa Kai Xuan (TSMP Law Corporation)
• Court: High Court (Singapore)
• Published date: 25 May 2016

Debbie Ong JC: Introduction

On 29 January 2016, I dismissed the Appellant’s appeal against the decision of the Assistant Commissioner for Labour (“the Assistant Commissioner”) who had made an award in the Respondent’s favour. The Assistant Commissioner had earlier awarded the Respondent, a Bangladeshi foreign worker employed by the Appellant for a salary of $22 a day (excluding over-time pay, meals and transport allowances), a sum of $1,931.13 for unpaid salaries due to him. The Appellant employer had appealed against the award.

After dismissing the appeal, I ordered costs in favour of the Respondent despite his lawyer telling the court that the law firm was acting for the Respondent on a pro bono basis and that any costs recovered would be donated to the Humanitarian Organization for Migration Economics (“HOME”), a registered charity dedicated to upholding the rights of migrant workers in Singapore. I subsequently fixed the matter for hearing on 11 March 2016 in order to hear any submissions parties may have on whether costs may be ordered in favour of a party whose lawyers are representing him on a pro bono basis. My concern was that the award of costs to a successful litigant represented on a pro bono basis could be viewed broadly as allowing a champertous agreement. Further, it could be argued that a party with the benefit of pro bono services does not need to be indemnified for any costs. At the hearing on 11 March 2016, both counsel made submissions on this issue of costs. Counsel for the Respondent also informed the court that he had sought guidance from the Law Society of Singapore (“the Law Society”) on the matter as well. He then relayed a request from the representatives of the Law Society to seek clarification on the legal position from this Court, urging this Court to make available its grounds of decision to guide the legal profession. I write these Grounds of Decision to set out my views and decision on this narrow issue.

The legal principles

The award of costs is a matter in the court’s discretion. The Court of Appeal in Aurol Anthony Sabastian v Sembcorp Marine Ltd [2013] 2 SLR 246 (“Aurol”) reiterated that (at [103] – [104]): 103 … The power to award costs is fundamentally and essentially one that is discretionary. Even though the general principle is for costs to follow the event, the overriding concern of the court must be to exercise its discretion to achieve the fairest allocation of costs ... 104 The court has a very wide discretion in determining what the fairest allocation of costs is and in this regard it is not confined to considering the particular outcome of the litigation. ...

While the Court of Appeal’s findings were directed at the allocation of costs between parties and did not specifically address the issue of whether a successful litigant represented on a pro bono basis could be awarded costs, there is no ambiguity as to the broad discretion the court exercises in ordering costs.

In JBB v JBA [2015] 5 SLR 153, I cited the decision of the Court of Appeal in Maryani Sadeli v Arjun Permanand Samtani and another and other appeals [2015] 1 SLR 496 (“Maryani”) at [30] for the general principle that costs should follow the event:

One fundamental aspect of our scheme of costs recovery is a cost-shifting rule which dictates that the successful litigant is ordinarily indemnified by the losing party for the legal costs incurred as between the successful party and his solicitor. This is commonly referred to as the principle that costs should generally follow the event ... [emphasis added]

These principles are enshrined in O 59 rr 2(2) and 3(2) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed). In the present case, there was nothing on the facts that warranted a departure from the general principle that the Respondent, as the successful party, ought to be entitled to recover costs from the losing party. However, whether such costs should be awarded required further consideration in view of my concerns highlighted at [2] above. The indemnity principle The present costs arrangement

As pointed out in Then Khek Koon and another v Arjun Permanand Samtani and another and other suits [2014] 1 SLR 245 (“Then Khek Koon”) at [153]–[154], the rule that costs should generally follow the event is one aspect of the indemnity principle. Another aspect relates to the quantification of costs — the indemnification operates in relation to the sums for which the winner is under a legal obligation to pay his solicitors for the legal services rendered (see Mohamed Amin bin Mohamed Taib and others v Lim Choon Thye and others [2011] 2 SLR 343 at [21], referring to Gundry v Sainsbury [1910] 1 KB 645 (“Gundry”)). A party ought not to enjoy any windfall by virtue of costs awards (see Wentworth v Rogers (2006) 66 NSWLR 474 (“Wentworth”) at [50]). The reason is well stated by the court in Harold v Smith (1860) 5 H & N 381 at 385 (cited in Gundry at 649) — costs are neither imposed as a punishment to the losing party nor as a reward to the winning party.

This was not a concern in the present case. On the facts, the arrangement between the Respondent and his solicitors had crystallised in the following manner: after his employment was terminated by the Appellant on 13 March 2015, the Respondent had remained in Singapore on a special pass issued by the Ministry of Manpower for the purpose of resolving his dispute before the Assistant Commissioner. That decision was rendered on 25 May 2015 and the Respondent, apparently in anticipation of his impending return to Bangladesh, executed a Power of Attorney in favour of a case worker from HOME (“the Respondent’s Representative”) on 16 July 2015, authorising her to instruct counsel in respect of the appeal. He returned to Bangladesh shortly thereafter on 20 July 2015. It was then clarified and...