Senda International Capital Ltd v Kiri Industries Ltd
Jurisdiction | Singapore |
Judge | Sundaresh Menon CJ,Judith Prakash JCA,Quentin Loh JAD,Robert French IJ,Sir Vivian Ramsey IJ |
Judgment Date | 25 November 2022 |
Docket Number | Civil Appeal No 14 of 2022 |
Court | Court of Appeal (Singapore) |
Sundaresh Menon CJ, Judith Prakash JCA, Quentin Loh JAD, Robert French IJ and Sir Vivian Ramsey IJ
Civil Appeal No 14 of 2022
Court of Appeal
Civil Procedure — Costs — Principles — Assessment of costs for minority oppression proceedings in Singapore International Commercial Court (“SICC”) — Successful party providing breakdown of costs post-transfer to SICC according to Appendix B Form 24 SICC Practice Directions but providing no breakdown of expert fees claimed as disbursements — Unsuccessful party not providing separate calculations for costs mirroring those provided by successful party despite SICC's invitation — SICC quantifying post-transfer costs using successful party's claimed costs and applying 30.41% discount and only allowing successful party to recover part of expert fees — Whether SICC erred in its assessment of post-transfer costs and in allowing recovery of part of expert fees — Whether level of information in successful party's costs breakdown was sufficient to substantiate claim for “reasonable costs” under O 110 r 46 Rules of Court (2014 Rev Ed) — Whether level of information in successful party's claim for expert fees was sufficient for unsuccessful party to assess if they were reasonably incurred — Order 110 r 46 Rules of Court (2014 Rev Ed)
Civil Procedure — Costs — Principles — Principles on assessment of costs for proceedings in Singapore International Commercial Court — What was proper interpretation of “reasonable costs” under O 110 r 46(1) Rules of Court (2014 Rev Ed) — How were “reasonable costs” under O 110 r 46 Rules of Court assessed — Order 110 r 46 and O 110 r 46(1) Rules of Court (2014 Rev Ed)
Held, dismissing the appeal:
The proper interpretation of “reasonable costs” under Order 110 rule 46
(1) The civil litigation system in the High Court was underpinned by the policy of enhancing access to justice for all. Therefore, costs awarded under O 59 were assessed at such a level as would enable a litigant with reasonable merits to pursue justice. This required the application of an objective standard to determine the level of recoverable costs in each case, shaped by the normative question of what ought to be the amount of costs a successful party could recover for the particular work done in the context of the dispute in question, irrespective of the level of costs the successful party might have actually incurred in the legal proceedings. The assessment was independent of subjective considerations such as how much costs the individual litigant might be willing to incur: at [47] and [50].
(2) The use of an objective standard manifested itself in costs assessments under O 59 in two ways. The first was the use by the High Court of costs precedents, which meant that courts tended to award the same level of costs in what appeared to be similar or comparable cases. The second was the use of Appendix G in the assessment of costs. The effect of Appendix G meant that, even catering for the specificities of individual cases, the level of recoverable costs would generally remain within the ranges that had been set out therein, which represented the level of fees which members of the public and the legal profession would generally accept as reasonable: at [48] and [49].
(3) The “international” and “commercial” nature of the disputes that came to be litigated in the SICC meant that the parties who came before the SICC would generally be better-resourced. Such parties might generally also be more willing to incur greater expense on litigation. The policy of enhancing access to justice was therefore less relevant in the SICC. The principal underlying consideration in the SICC was a commercial one of ensuring that a successful litigant was not unfairly put out of pocket for sensibly prosecuting his claim or defence: at [51].
(4) Given the commercial consideration underlying the costs regime in the SICC, an award of costs was generally intended to restore or compensate the other party for the expense it had incurred in the legal proceedings as long as this had been incurred in sensibly mounting his claim or defence. The determination of the level of recoverable costs in each case therefore involved, as a starting point, a subjective inquiry into just what costs had in fact been incurred by the successful party in the particular case: at [52].
(5) The commercial consideration underlying the SICC, however, was not a reason for the successful party to recover whatever costs it had incurred. Even in the SICC where access to justice concerns were not the primary consideration, there remained an overarching interest in directing litigants to pursue their proceedings in a reasonable and sensible manner. The successful party was only entitled to recover “reasonable costs” from the unsuccessful party, and not whatever costs it had incurred. However, given the subjective starting point from which costs were assessed under O 110 r 46, this test of reasonableness would be directed at the costs that had in fact been incurred in the particular case, and not at what an appropriate level of costs to be incurred might be, in a generic sense, for a type of case similar to the one at hand: at [52].
(6) The determination of whether claimed costs were “reasonable costs” entailed the court looking both at whether costs had been reasonably incurred and whether the overall quantum of costs was reasonable. The two inquiries were fundamentally inseparable from each other because the manner in which costs had been incurred and whether they had been reasonably incurred would almost inevitably bear on what the overall quantum of costs would be, and whether that overall quantum was or was not reasonable: at [54].
(7) Order 22 r 3(1) of the SICC Rules 2021 (which is the equivalent of O 110 r 46(1) of the ROC 2014 in those rules) made clear the subjective basis on which costs were assessed in proceedings in the SICC: at [56].
(8) The Court took a mistaken view in its interpretation of “reasonable costs” under O 110 r 46. Given the very different bases on which the level of recoverable costs was to be determined under O 59 and O 110 r 46, they were not comparable in terms of their approaches to costs. The distinction drawn by the Court between O 59 and O 110 r 46 in terms of a double versus a single attenuation of reasonable was not a meaningful one. It was also incorrect for the Court to hold that the inquiry under O 110 r 46 should only be one about whether the claimed costs had been reasonably incurred and excluding the question of whether they were reasonable in amount: at [36], [39] and [53].
(9) Since the two bases for assessing costs in O 59 and O 110 r 46 were not related, it followed that there was no basis for importing into O 110 r 46 the concept of solicitor-and-client costs in O 59: at [59].
The assessment of “reasonable costs” under Order 110 rule 46
(10) The proper interpretation of the words “taxed if not agreed” was simply that costs were to be “taxed” in the absence of an agreement on costs between the parties. The Liability Tranche Costs Order did not, as Senda argued, impose on the parties an obligation to first attempt to make agreement on costs before they might resort to taxation: at [63].
(11) The word “taxed” or “taxation” was no more than a description of any process by which the amount of recoverable costs and disbursements was judicially determined. It did not import any specific requirement as to how that process should take place, which was ultimately dependent on the legal context in which that word was used: at [66].
(12) It was typically for the trial court that had heard the matter to assess costs under O 110 r 46. Whether costs were to be fixed, assessed at the conclusion of the substantive proceeding, or assessed by way of a separate process after the conclusion of the proceedings, was a matter for the trial court's discretion: at [67] to [69].
(13) The factors which the trial court should consider in the exercise of its discretion as to how questions of costs were to be determined included: (a) the complexity of the issues in the substantive proceeding; (b) the amount of costs claimed by the successful party; and (c) the nature and extent of the differences in the respective positions on costs taken by the parties. In its exercise of discretion, the trial court should be guided by the need to maintain a measure of proportionality between, on the one hand, the nature of the inquiry into “reasonable costs”, the corresponding level of detail involved in such an inquiry and the expense associated with such an inquiry, and on the other, the amount of costs claimed by the successful party: at [70].
(14) That it was for the trial court which heard the matter to assess costs was now made express in O 22 r 2(3) of the SICC Rules 2021. Similarly, O 22 r 2(4) also afforded wide discretion to the court in determining the procedure by which costs were to be assessed: at [67] and [69].
(15) The legal burden was on the successful party to prove that its claimed costs were “reasonable costs”. The successful party should adduce evidence of information on its incurred costs and include a sufficient breakdown of such costs. Such evidence would typically include: (a) a breakdown of the claimed costs in terms of the number of hours claimed; (b) information identifying by whom those hours were incurred, their levels of seniority and corresponding hourly rates; and (c) some explanation as to the types of work those hours were incurred for. This same level of information also applied to expert fees that the successful party sought to claim from the unsuccessful party as disbursements. This was also the level of information contemplated in Form 24 of the SICC PD 2021, as well as Form 24 of the SICC Practice Directions (effective 1 August 2022): at [72] to [74].
(16) Once the...
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