Sheila Kazzaz and another v Standard Chartered Bank and others

• Judge: Anselmo Reyes IJ
• Judgment Date: 31 August 2020
• Neutral Citation: [2020] SGHC(I) 19
• Citation: [2020] SGHC(I) 19
• Defendant Counsel: Tan Xeauwei, Melissa Mak, Daniel Seow and Marrissa Karuna (Allen & Gledhill LLP)
• Published date: 25 September 2020
• Hearing Date: 18 February 2019,23 February 2019,22 February 2019,20 February 2019,22 April 2019,28 February 2019,19 February 2019,25 February 2019,24 February 2019,01 March 2019,29 March 2019,21 February 2019,26 February 2019,27 February 2019
• Plaintiff Counsel: Chia Voon Jiet, Koh Choon Min, Sim Bing Wen and Grace Lim Rui Si (Drew & Napier LLC)
• Date: 31 August 2020
• Docket Number: Suit No 4 of 2018
• Court: International Commercial Court (Singapore)
• Subject Matter: Costs,Civil Procedure

Anselmo Reyes IJ: Introduction

This is my judgment on the costs of this action.

By a previous judgment dated 14 October 2019, I dismissed the Plaintiffs’ claims against the Defendants. At the same time, I stated that, within 28 days of the judgment, the parties were to propose directions for dealing with the costs of this action. The Plaintiffs having thereafter appealed against my judgment, by agreement among the parties, the determination of the costs of this action was deferred pending resolution of the appeal. On 11 June 2020, the Court of Appeal dismissed the appeal, handing down its reasons on 13 July 2020. The Court of Appeal awarded the costs of the appeal (inclusive of disbursements) to the Defendants, fixing the amount at S$80,000. Following dismissal of the Plaintiffs’ appeal, I restored the assessment of the costs of this action and directed that the costs be determined on the basis of the parties’ sequential written submissions alone.

The Defendants having substantially prevailed, they should have their costs in the ordinary course of events. The real dispute among the parties is over quantum.

The Defendants claim (1) legal fees of S$1,100,000 (inclusive of the fees of counsel in the Dubai International Financial Centre (“DIFC”) and Goods & Services Tax (“GST”) and (2) disbursements of S$113,177.12, £178,672.23, AED88,844.73, and US$4,336.83. In support of their claim, the Defendants rely (among other grounds) on an indemnity clause (“Clause 14.1”) in the client agreements which the Plaintiffs entered into with them. The Plaintiffs, on the other hand, argue that the Defendants should receive no more than legal fees of S$382,800 (or alternatively S$512,400 if costs are ordered on an indemnity basis) and disbursements of S$86,672.57, £90,538.02, AED88,844.73, and US$4,336.83. More specifically, in answer to the Defendants, the Plaintiffs make four submissions: (1) Clause 14.1 does not cover the present action; (2) Appendix G of the Supreme Court Practice Directions (“Appendix G”) (which provides guidelines on the assessment of costs in proceedings before the Singapore High Court) should be given significant weight in my assessment of costs; (3) the Defendants did not succeed in every argument which they advanced at trial and so should not be entitled to the costs incurred in respect of unsuccessful arguments; and (4) the Plaintiffs should have the reserved costs of certain interlocutory applications and such costs should be set-off against amounts payable to the Defendants.

Discussion The application of Clause 14.1

Clause 14.1 stipulates:

The Client will indemnify on a full indemnity basis and hold harmless the DIFC Branch, the Account Branch and any Group member, including their officers, employees, custodians, nominees, brokers, correspondents, and agents (each an Indemnified Party), and reimburse on demand, against all Losses which an Indemnified Party may suffer as a result of or in connection with the operation or provision of the Account(s), Facilities, Transactions and Services whether incurred directly or indirectly, including the purchase, sale, holding, switching and redemption of Securities, Derivatives and Investments, and any Loss resulting from: (i) any breach by the Client of its obligations under this Agreement or the relevant agreement between the Account Branch and the Client and/or (ii) the DIFC Branch performing or exercising its duties or discretions under this Agreement or acting on any instructions (including stop payment Instructions, and Instructions to sell or purchase Securities, Derivatives and Investments); and/or (iii) any default under the terms and conditions and any default in the repayment of the Client’s liabilities, save to the extent that the Loss is the direct result of an Indemnified Party’s gross negligence, willful default or fraud.

The Plaintiffs submit that Clause 14.1 does not cover the situation where (as was the case here) the Defendants are sued by a client in respect of circumstances leading to the taking up of banking services. I am unable to agree.

By Clause 14.1 the Plaintiffs agreed to compensate the Defendants on “a full indemnity basis” for “all Losses which [the Defendants] may suffer as a result of or in connection with the operation or provision of the Account(s), Facilities, Transactions and Services whether incurred directly or indirectly”. The present action essentially concerned the Plaintiffs’ complaints about the way in which the Defendants operated the Plaintiffs’ Accounts, Facilities, and Transactions and the way in which the Defendants provided services in respect of those matters. The Plaintiffs alleged that, when providing services, the Defendants negligently misled the Plaintiffs about the scope, nature and suitability of the same for the Plaintiffs’ needs. On its terms, Clause 14.1 does not distinguish between services and advice rendered by the Defendants before or after the Plaintiffs took up a banking product or entered into a particular transaction. Clause 14.1 thus applies where (as here) the Defendants have incurred loss (in the form of legal expenses and disbursements) as a result of defending themselves against the Plaintiffs’ wrongful allegations about the way in which the Defendants’ went about providing their advice and services. The Defendants are consequently entitled to be indemnified in full for their legal fees and disbursements under Clause 14.1.

The application of Appendix G

Order 110, r 46(1) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“Rules of Court”) provides that: 46.—(1) The unsuccessful party in any application or proceedings in the [SICC] must pay the reasonable costs of the application or proceedings to the successful party, unless the Court orders otherwise.

However, when transferring the action to the SICC, the Registrar directed that “Appendix G shall continue to be relevant to the assessment of costs in respect of all proceedings in and arising from this suit after its transfer to the SICC”. In some cases, applying O 110, r 46(1) of the Rules of Court can lead to significantly greater...