Telemedia Pacific Group Ltd v Credit Agricole (Suisse) SA (Yeh Mao-Yuan, third party)
Judge | George Wei JC (as he then was) |
Judgment Date | 03 July 2015 |
Neutral Citation | [2015] SGHC 170 |
Plaintiff Counsel | Muralli Rajaram and Claire Tan Kai Ning (Straits Law Practice LLC) |
Hearing Date | 15 May 2015 |
Citation | [2015] SGHC 170 |
Year | 2015 |
Published date | 08 July 2015 |
Court | High Court (Singapore) |
Docket Number | Suit No 379 of 2012 |
Subject Matter | Third party costs,Contractual agreement,Civil Procedure,Costs,Indemnity costs |
Defendant Counsel | Benedict Teo Chun-Wei and Terence Tan Wee Kio (Drew & Napier LLC),Toh Wei Yi (Harry Elias Partnership LLP) |
This is my decision on costs for Suit No 379 of 2012 (“S 379/2012”). This judgment raises legal issues relating to contractual agreements on costs, as well as when a plaintiff ought to be made to bear the costs of a third party claim brought by the defendant. I delivered my judgment for the main substantive hearing of S 379/2012 on 18 November 2014 (see
I start by providing a brief factual background, highlighting only the key facts. I adopt the detailed facts and the abbreviations found in the
The plaintiff company, Telemedia, was a customer of the defendant bank, Crédit Agricole. Telemedia commenced S 379/2012 to recover the losses it claimed to have suffered from Crédit Agricole’s transfer of 225m NexGen shares out of Telemedia’s bank account.
The transfer of the NexGen shares was executed by Crédit Agricole on the instructions of the third party, Mr Yeh. Telemedia’s main claims were that Crédit Agricole transferred the 225m NexGen shares without authority and in breach of its duty of care. Telemedia denied that Mr Yeh had the authority to handle its bank account on its behalf.
Crédit Agricole’s defence was that Mr Yeh had been authorised from the outset of the account opening as a signatory with the power to sign on his own. That being so, the defence was that the transfer was carried out on the instructions of Mr Yeh whose authority had never been revoked.
Before trial, Crédit Agricole commenced third party proceedings to join Mr Yeh as a third party. Crédit Agricole was seeking an indemnity from Mr Yeh in the event that Crédit Agricole was found liable to pay Telemedia damages for its transfer of the 225m NexGen shares. The basis of Crédit Agricole’s third party claim against Mr Yeh was that Mr Yeh had fraudulently misrepresented to Crédit Agricole that he was singly authorised to operate Telemedia’s bank account. Crédit Agricole had been induced by those misrepresentations to transfer the 225m NexGen shares out of Telemedia’s account on Mr Yeh’s instructions.
In the
I now deliver my decision on costs in light of the
Based on the parties’ submissions (I note that no written submissions were tendered on behalf of Telemedia), two sets of costs arise for determination – the first is the costs arising from Telemedia’s claim against Crédit Agricole; and the second is the costs arising from the third party claim.
On the first set of costs, the parties have agreed that costs should follow the event, which means Telemedia should bear Crédit Agricole’s costs. The only question is whether costs should be awarded against Telemedia on an indemnity basis.
On the second set of costs, the parties have agreed that Mr Yeh should not be made to bear his own costs (or the costs of any other party). There is however disagreement over whether Telemedia or Crédit Agricole should bear the costs of the third party proceedings (both Crédit Agricole’s and the Mr Yeh’s costs). Should the court find that Telemedia ought to bear Mr Yeh’s costs, there is also disagreement as to the form this costs order should take (
I will deal with each of these issues in turn.
Issue 1: Indemnity costs between Telemedia and Crédit AgricoleIt is well-established that costs are usually awarded against the losing party on a standard basis; indemnity costs awards are exceptional. In the present case, Crédit Agricole submits that there are exceptional circumstances to justify making Telemedia bear Crédit Agricole’s costs on an indemnity basis.
First, Crédit Agricole submits that it is entitled to indemnity costs because Telemedia has contractually agreed to indemnify Crédit Agricole against the costs it incurs in the present legal proceedings. Second, Crédit Agricole submits that Telemedia’s conduct of S 379/2012 also justifies the court exercising its discretion under general costs principles to award indemnity costs to Crédit Agricole. I shall first consider the submission on the cost agreement between Telemedia and Crédit Agricole.
Costs agreement between Telemedia and Crédit Agricole Crédit Agricole relies on two contractual clauses. The first is cl 7.15 of Crédit Agricole’s General Conditions, which has been incorporated as part of the contractual documents signed by Telemedia and Crédit Agricole (see the
The client undertakes to indemnify the Bank, as well as its correspondents and respective directors and employees, for any damages, costs or other expenses incurred or which they are liable or might be liable towards any correspondent, authority, third party (Singapore, Swiss or foreign), as a result or due to acts effected on behalf of the client, including in the event of acts undertaken on instructions of representatives or agents of the client, or forgery or abuse made by persons other than the Bank’s bodies or employees.
The second is cl 7 of the Certified Extract of Board Resolution, which is a board resolution passed by Telemedia authorising its agents to enter into business relations on its behalf with Crédit Agricole. More details of the Certified Extract of Board Resolution can be found at [28] of the
THAT the Company indemnifies the Bank and its officers fully from and against any actions, proceedings, claims, loss and damage which may be brought against, suffered or incurred by any of them and any cost and expenses (including legal costs) of reasonable amount and reasonably incurred by any of them in connection with the Bank acting on or pursuant to any instructions given by the Company and/or the Authorised Person(s) to the Bank by any means and in any circumstances described in this Board Resolution.
I pause to note that the Certified Extract of Board Resolution sets out a Telemedia Board resolution stating that Telemedia is authorised to enter into business relations with Crédit Agricole. The Board Resolution names Mr Yeh as one of the two persons entitled to singly instruct Crédit Agricole on behalf of Telemedia. The Board Resolution also states that it constitutes Telemedia’s mandate to Crédit Agricole. Crédit Agricole submits that the Certified Extract of Board Resolution is part of the terms and conditions binding on Telemedia.
It is beyond dispute that cl 7 is part of the company board resolution passed by Telemedia authorising Mr Yeh to enter into business relations with Crédit Agricole on its behalf. The Certified Extract of Board Resolution is a relevant and important document being part of the documents provided to Crédit Agricole for the account opening. It is relevant to the mandate and the authority of Mr Yeh to sign a contract on behalf of Telemedia. Clause 7 sets out an indemnity provision. The question therefore arises as to whether cl 7 of the Certified Extract of Board Resolution is a
That being so, I shall proceed to consider cl 7.15 of the General Conditions as well as cl 7 of the Certified Extract of Board Resolution.
Telemedia’s submissions in reply are twofold.
First, Telemedia submits that the contractual indemnity clauses are not wide enough to cover the costs incurred by Crédit Agricole in S 379/2012. Second, making reference to [266]–[268] of the
Two sub-issues arise for consideration. The first relates to the relevance of a contractual agreement on costs...
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