United Overseas Bank Ltd v Sin Leong Ironbed & Furniture Manufacturing Co (Pte) Ltd and Others

• Jurisdiction: Singapore
• Judge: Chan Sek Keong JC
• Judgment Date: 20 January 1988
• Neutral Citation: [1988] SGHC 9
• Docket Number: Suit No 657 of 1987
• Date: 20 January 1988
• Year: 1988
• Published date: 19 September 2003
• Plaintiff Counsel: RE Martin (Ramdas & Wong)
• Citation: [1988] SGHC 9
• Defendant Counsel: RS Wijaya (RS Wijaya & Co)
• Court: High Court (Singapore)
• Subject Matter: Costs,Whether order as to fixed costs correct,Whether costs could be taxed costs on solicitor and client basis,O 59 r 31(4) Rules of the Supreme Court 1970,Civil Procedure

Cur Adv Vult

This is an appeal by the plaintiffs against the decision of the senior assistant registrar in refusing to award to them taxed costs on a solicitor and client basis.

The plaintiffs, who are bankers, commenced an action against the first defendant for repayment of $63,900.52 being the outstanding credit facilities granted to it and against the second to sixth defendants as guarantors. The plantiffs also claim costs on a solicitor and client basis as part of their claim in their pleadings.

It is not disputed that the plaintiffs had agreed to grant banking facilities to the first defendant on terms as to costs of enforcement as follows:

5 All costs, expenses, legal or otherwise connected with the execution, implementation and enforcement of the above line of credit shall be borne by your company.

It is also not disputed by the guarantors who had appeared that they had also agreed to pay the plaintiffs` costs of enforcement as follows:

... all costs including solicitor and client costs charges and expenses which you may incur in enforcing or seeking to obtain payment of all or any of the moneys hereby guaranteed.

The writ was served on all the defendants other than the fifth defendant. Each of them entered appearance, following which the plaintiffs applied for summary judgment. The plantiffs were given leave to enter final judgment against the said defendants but were only allowed fixed costs of $700 as provided in App 2 to O 59 of the Rules of the Supreme Court.

The fixed costs were awarded on the following grounds as set out in the grounds of decision of the senior assistant registrar:

(a) the court has no discretion to award taxed costs under O 59 r 31(4) which rule sets out the power of the court to award costs;

(b) if the court has a discretion to award taxed costs, he would not exercise it in the plaintiffs` favour as the claim was a simple claim with no special features which would warrant taxed costs;

(c) further, even if taxed costs were warranted, he would only order that costs be taxed on a party and party basis and not on a solicitor and client basis, bearing in mind the circumstances of this case;

(d) the rules of court have curtailed the contractual right of the plaintiffs to solicitor and client costs.

Before me, the plaintiffs have contended that the decision of the senior assistant registrar was wrong on the following grounds:

(a) the court has a discretion under O 59 r 31(4) to award taxed costs in lieu of fixed costs;

(b) the senior assistant registrar`s refusal to exercise his discretion in favour of the plaintiffs was wrong as the reasons given in support of it did not touch upon the conduct of the plaintiffs in connection with these proceedings;

(c) in any case, the plaintiffs were entitled by contract to solicitor and client costs and the rules of court cannot take away such rights; the court therefore has no discretion in the matter.

The senior assistant registrar`s decision that the court does not have any discretion to award taxed costs was based on his interpretation of the words `unless the court otherwise orders` in O 59 r 31(4) read with App 2 thereto.

The material portions of O 59 r 31 read as follows:

(1) Subject to the foregoing rules and the following provisions of this rule, the scale Of costs contained in Appendix 1 to this Order, together with the notes and general provisions contained in that Appendix, shall apply to the taxation of all costs incurred in relation to contentious business done on or after the coming into force of these Rules. ...

(4) Notwithstanding para (1) costs shall, unless the court otherwise orders, be allowed in the causes to which Appendix 2 to this Order applies in accordance with the provisions of that Appendix.

The material portions of App 2 read as follows:

FIXED COSTS

PART I

COSTS ON JUDGMENT WITHOUT TRIAL FOR A LIQUIDATED SUM

1 The scale of costs set out in Pt II of this Appendix shall apply in relation to the following cases if the writ of summons therein was issued and indorsed in accordance with O 6 r 2(1)(b), with a claim for a debt or liquidated demand, that is to say -

(a)...