Resorts World at Sentosa Pte Ltd v Goel Adesh Kumar and another appeal [2018] SGCA 58

Costs

This pair of cross-appeals arose out of the judgment on costs issued by the High Court judge (“the Judge”) in Suit No 484 of 2013 (“the Suit”): see Goel Adesh Kumar v Resorts World at Sentosa Pte Ltd (SATS Security Services Pte Ltd, third party) [2017] SGHC 43 (“the Costs Judgment”). Civil Appeal No 127 of 2017 was an appeal by Resorts World at Sentosa Pte Ltd (“RWS”) against the decision of the Judge in the Costs Judgment for RWS to pay 80% of the costs incurred by the third party to the Suit, SATS Security Services Pte Ltd (“SATS”), on a standard basis on the High Court scale. Civil Appeal No 21 of 2018 was an appeal by Mr Goel Adesh Kumar (“Mr Goel”) against the decision of the Judge in the Costs Judgment for: (a) RWS to pay Mr Goel’s costs on a standard basis on the Magistrate’s Court scale up to 2 July 2014; and (b) Mr Goel to pay RWS’s costs on an indemnity basis on the High Court scale from 2 July 2014. We shall hereinafter refer to each of these cross-appeals as RWS’s Appeal and Mr Goel’s Appeal respectively.

Costs

Mr Goel’s Appeal, which concerned the application of the costs consequences engaged pursuant to O 22A r 9(3) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“the ROC”), has given us the opportunity to consider and apply various aspects of the recent decision of this Court in NTUC Foodfare Co-operative Ltd v SIA Engineering Co Ltd and another [2018] SGCA 56 (“NTUC”). At the same time, RWS’s Appeal has raised some interesting issues as to the circumstances under which a plaintiff may be ordered to bear the costs of third party proceedings commenced by a defendant in response to a claim. Following the hearing of the appeals on 11 September 2018, we dismissed Mr Goel’s Appeal and allowed RWS’s Appeal with brief grounds, and indicated that we would provide our full grounds in due course. This, we now do.

Costs

On 29 May 2013, Mr Goel commenced the Suit against RWS, claiming that RWS was vicariously liable for the acts of assault, battery and wrongful imprisonment committed by both RWS’s security officers and SATS’s APOs, and that RWS was negligent in failing to keep him safe and secure while he was within its premises. Mr Goel eventually quantified his claim on 29 May 2015 at a total sum of S$484,196.16, comprising damages for the pain and suffering and loss of amenities arising from the injuries that he had sustained, loss of liberty for about an hour, medical and transport costs incurred as a result of his injuries, loss of pre-trial income, loss of his year-long membership at the Casino, loss of the credit that he had accumulated in his Genting Rewards Gold Card, as well as for aggravated and exemplary damages for the “haughty and high-handed attitude” that RWS had allegedly displayed during and after the Incident.

Costs

On 19 November 2013, RWS joined SATS as a third party to the Suit, seeking from SATS an indemnity or contribution in respect of Mr Goel’s claim and the costs of the Suit (“the Third Party Proceedings”). The Third Party Proceedings against SATS was grounded on a contractual indemnity provided for in a letter of agreement entered into between RWS and SATS on 31 August 2009 for SATS to provide security services at the Casino. The relevant terms of the agreement stated as follows:

Costs

On 2 July 2014, RWS and SATS made a joint offer to fully and finally settle Mr Goel’s claim for damages in the Suit for S$62,000, with all parties to bear their own costs (“the First Offer”). Mr Goel rejected the First Offer. On 17 September 2014, RWS and SATS made another joint offer, this time offering an increased amount of S$100,000 in full and final settlement of Mr Goel’s claim for damages and interest in the Suit and for costs to be in accordance with O 22A of the ROC (“the Second Offer”). Mr Goel also rejected the Second Offer. Both the First Offer and the Second Offer will be collectively referred to as “the Offers”.

Costs

The issue of costs of the Suit was remitted to the Judge, who issued the Costs Judgment on 9 March 2017. The Judge held that: (a) RWS was to pay Mr Goel’s costs of the Suit on a standard basis on the Magistrate’s Court scale up to 2 July 2014 (ie, the date of the First Offer) (at [9] and [13(a)]); and (b) Mr Goel was to pay RWS’s costs of the Suit on an indemnity basis on the High Court scale from 2 July 2014 (at [9] and [13(b)]).

Costs

As for the costs for the Third Party Proceedings, the Judge held that RWS was to pay 80% of SATS’s costs on a standard basis on the High Court scale (at [13(c)]). The Judge reasoned that first, SATS (and not RWS) was entitled to costs in the Third Party Proceedings given that RWS was vicariously liable only for the acts of its own security officers (and not SATS’s APOs), and hence no question of indemnity against SATS arose for determination (at [11]). Second, RWS (and not Mr Goel) should be liable for SATS’s costs in the Third Party Proceedings because Mr Goel, as the plaintiff in the Suit, had the right to choose not to make SATS a defendant in the Suit, and had in fact substantially succeeded (in terms of liability but not the quantum) in his claim against RWS. Mr Goel would be liable for costs of the Third Party Proceedings only if the real issue of the Suit turned out to be between Mr Goel and SATS, or RWS was clearly the wrong party to sue; neither of these scenarios presented themselves in the Suit (at [12]). Consequently, the Judge considered it fair to order RWS to pay 80% of SATS’s costs in the Third Party Proceedings.

Costs

On 29 June 2017, the Judge granted the application by RWS in Summons No 1264 of 2017 (“SUM 1264”) seeking leave to appeal against the Judge’s decision in not ordering Mr Goel to indemnify it in respect of SATS’s costs incurred in the Third Party Proceedings. RWS duly filed its Notice of Appeal on 24 July 2017.

Costs

On 2 October 2017, Mr Goel filed Summons No 4600 of 2017 (“SUM 4600”), seeking an extension of time from the High Court for leave to appeal against the Costs Judgment. Although the Judge granted Mr Goel leave to appeal out of time, Mr Goel failed to file a Notice of Appeal accompanied by a certificate for security for costs on time. On 20 December 2017, Mr Goel filed Court of Appeal Originating Summons No 24 of 2017 (“OS 24”), seeking leave, this time from the Court of Appeal, to file and serve a Notice of Appeal against the Costs Judgement out of time.

Costs

At the hearing fixed for both RWS’s Appeal and OS 24 on 6 February 2018, we allowed OS 24, and adjourned RWS’s Appeal to be heard together with Mr Goel’s Appeal. We also reserved the costs of OS 24 to be determined together with the costs of the cross-appeals. Mr Goel filed his Notice of Appeal on 7 February 2018.

Costs

Mr Goel submitted that this Court should order RWS to pay him costs incurred in the Suit on a standard basis on the High Court scale from the commencement of the Suit. We disagreed.

Costs

Order 22A r 9(3) of the ROC states that where a defendant makes an offer to settle that the plaintiff does not accept, unless the Court orders otherwise, the plaintiff is entitled to costs on the standard basis to the date the offer was served and the defendant is entitled to costs on an indemnity basis from that date, provided: (a) the offer was not withdrawn and has not expired before the disposal of the claim; and (b) the plaintiff obtains a judgment that is not more favourable than the terms of the offer to settle (see NTUC at [15]).

Costs

In our view, the Judge was correct to apply the general costs consequences provided for under O 22A r 9(3). First, it was undisputed that Mr Goel had rejected the First Offer (see [7] above). Second, the First Offer was not withdrawn before liability in the Suit was disposed of on appeal on 17 August 2016 (see [9] above). The First Offer was not deemed to have been withdrawn even though RWS and SATS subsequently made the Second Offer (see RBG Resources plc (in liquidation) v Banque Cantonale Vaudoise and Others [2004] SGHC 167 at [12] and [32], citing LK Ang Construction Pte Ltd v Chubb Singapore Pte Ltd (judgment on costs) [2004] 1 SLR(R) 134 at [18]). Nor did the First Offer expire, given that the offer did not specify any time within which it had to be accepted (see O 22A r 3(5) of the ROC and NTUC at [16]), and hence remained open for acceptance any time before the final disposal of the Suit on appeal (see NTUC at [17], citing Man B&W Diesel S E Asia Pte Ltd and another v PT Bumi International Tankers and another appeal [2004] 3 SLR(R) 267 (“PT Bumi”) at [20]).

Costs

Third, the judgment sum of S$45,915.74 obtained by Mr Goel in the Liability Judgment was not, even when taken together with the costs incurred by Mr Goel up to the date of the First Offer, more favourable than the settlement sum of S$62,000 offered in the First Offer. As recently emphasised by this Court in NTUC (at [23] and [25(c)(i)]), it was necessary to add to the judgment sum the costs incurred by Mr Goel up to the date of the First Offer when determining if the judgment sum was “not more favourable” than the settlement sum, since the First Offer did not make separate provision for Mr Goel to be paid his costs up to the date of the offer (see [7] above). Nevertheless, we were satisfied that these costs would not exceed the difference between the judgment sum awarded and the settlement sum offered (the difference being S$16,084.26) for the following reasons:

Costs

Finally, we also saw no reason to conclude that the Judge ought to have exercised his discretion to depart from the general rule on costs provided under O 22A r 9(3) of the ROC. The quintessential situation in which the court may exercise its discretion to vary the default cost consequences specified under O 22A r 9(3) is where the offer to settle was not a reasonable, serious or genuine offer that was aimed at inducing or facilitating settlement. In this regard, this Court held in PT Bumi (at [8] and [10]) as follows:

Costs

In determining whether an offer to settle is reasonable, serious or genuine, it would suffice that there is a legitimate basis for the offer made and the offer is not illusory – in other words, the offer should “not [be made] just to entail the payment of costs on an indemnity basis” (PT Bumi at [8]), and should not be one where “the offeror effectively [expects] the other party to capitulate” (PT Bumi at [14]). There is no strict necessity for the offer to provide for each head of the contested claim. Nor is there any requirement for the offer to bear some proportionality to the claim. To hold otherwise would suggest that a modest but realistic offer will not be treated as a reasonable, serious or genuine offer for the purposes of O 22A as long as the sum offered is substantially less than the amount claimed. Such an interpretation would undermine the very purpose of O 22A, which is designed to protect a defendant who has made a realistic offer in response to an inflated claim from escalating costs should the eventual judgment be less than the amount offered. In the same way as it is for a plaintiff to quantify his claim amount, it is likewise a defendant’s right to assess the likely sum which the plaintiff may be awarded in order to protect himself from adverse costs consequences by making an appropriate offer to settle. At the end of the day, if the offer is more than the judgment sum, then the costs consequences under O 22A would be engaged even if the offer made is significantly less than the amount claimed, provided that, as stated above, the offer has a legitimate basis and is not illusory.

Costs

We should emphasise that although such an outcome might appear to be at odds with the earlier decision of this Court in Singapore Airlines Ltd and another v Fujitsu Microelectronics (Malaysia) Sdn Bhd and others [2001] 1 SLR(R) 38 (“Singapore Airlines”), on reflection, we did not consider the reasoning in Singapore Airlines to be inconsistent with the analysis undertaken in this appeal. In Singapore Airlines, the defendant-appellants offered S$347 to settle a claim of US$286,344.14 made by the plaintiff-respondents for the loss of a package that the appellants had carried from Tokyo to Kuala Lumpur via Singapore. The appellants successfully argued on appeal that it was entitled to the protection of limitation of liability laid down under the Convention for the Unification of Certain Rules Relating to International Carriage by Air (12 October 1929) 137 LNTS 11 (entered into force 13 February 1933), as amended by the Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air (28 September 1955) 478 UNTS 371 (entered into force 1 August 1963) (collectively, “the amended Warsaw Convention”), under which the appellants’ liability was limited to S$312. This Court held that the appellants’ offer to settle was not a genuine or serious offer to settle as it did not in substance contain any incentive to settle, and did not evince a genuine or serious effort to seek a compromise as to the crux of the dispute, which “related to the difference between the actual value of the lost package and the sum laid down in the amended [Warsaw] Convention as being payable to the respondents for the loss” (at [11]). The court thus exercised its discretion to order the respondents to pay the appellants costs for the action from the date of the offer on the standard basis (instead of on the indemnity basis) (at [12]).

Costs

On the face of the outcome arrived at in Singapore Airlines, it might appear that the court had compared the offer made of S$347 with the sum claimed of US$286,344.14 and found that even though the offer ultimately exceeded the judgment sum of S$312, the usual costs consequences pursuant to O 22A r 9(3) of the ROC should not apply given that the offer was vastly disproportionate to the claim made. However, as we see it, the court in Singapore Airlines had rightly declined to award the appellants costs for the action from the date of the offer on the indemnity basis, not because the offer was disproportionate to the claim made, but because the offer lacked any legitimate basis. Although the fact that the appellants were relying on the limitation of liability under the amended Warsaw Convention appeared to give the offer made a veneer of legitimacy, the court nevertheless made the following observations (at [7]):

Costs

We turn next to address RWS’s Appeal. We agreed that Mr Goel, instead of RWS, should pay 80% of SATS’s costs incurred in the Third Party Proceedings on a standard basis on the High Court scale.

Costs

RWS submitted that Mr Goel (and not RWS) should pay for SATS’s costs in the Third Party Proceedings because it was inevitable and necessary for RWS to have made SATS a third party to the Suit, and SATS should have been made a co-defendant to the Suit so that the question of liability arising from the SATS’s APOs’ tortious acts could have been directly determined between Mr Goel and SATS.

Costs

The principles governing when a plaintiff may be made to bear the costs of third party proceedings were recently canvassed in some detail in the decision of the High Court in Telemedia Pacific Group Ltd v Credit Agricole (Suisse) SA (Yeh Mao-Yuan, third party) [2015] 4 SLR 1019 (“Telemedia”), in which George Wei J undertook a compendious survey of the relevant case authorities in this regard. In our judgment, the relevant principles that can be distilled from Telemedia, and which we now affirm, are as follows:

Costs

The application of the above principles to a claim where only one party is alleged to be liable and where the dispute is whether such a party is the correct defendant to be sued is generally uncontroversial. However, in a situation such as the present case where the claim involved liability of more than one party but where only one party has been sued, it becomes essential to examine whether as regards all aspects of the claim, it was proper to have commenced proceedings only against one defendant. We should add that the mere fact that a defendant is found to be liable in some aspects of a claim does not per se rule out a plaintiff from being liable for the costs of third party proceedings. The Judge appeared to have adopted a contrary view: see Costs Judgment at [12]. In our view, it remains relevant to determine whether such a plaintiff has acted properly and reasonably in bringing all aspects of the claim against that one defendant. In a situation where an action brought by a plaintiff raises a claim which implicates a party beyond the defendant, and at least one of the issues ought to be litigated between that plaintiff and a third party (and not between that plaintiff and the defendant), that plaintiff could be said to have commenced the claim in respect of those issue(s) against the wrong party. In such a situation, the plaintiff may be found to have acted improperly and unreasonably in failing to include the third party as a co-defendant to its claim in respect of the aforementioned issue(s), and in failing to do so, has made it inevitable for the defendant to commence third party proceedings to seek an indemnity or contribution in respect of that issue. Such a plaintiff should be made liable for the costs of the third party proceedings.

Costs

Given this clarification, we pause to consider the decision in Telemedia, which was a case that appeared, like the present appeal, to involve liability on the part of more than one party but where only one party had been sued. In Telemedia, the plaintiff, Telemedia Pacific Group Ltd (“Telemedia”), sued the defendant bank, Crédit Agricole (Suisse) SA (“Crédit Agricole”), for executing a transfer of some shares out of Telemedia’s account with Crédit Agricole. The shares were transferred on the instructions of one Yeh Mao-Yuan (“Yeh”), who was listed as an authorised signatory of Telemedia in the account-opening documents. Crédit Agricole joined Yeh as a third party to the suit, claiming an indemnity against Yeh on the ground of fraudulent misrepresentation. Wei J found in favour of Crédit Agricole, holding that the transfer of the shares was not wrongful because Yeh had actual authority to transfer the shares on behalf of Telemedia. The third party claim thus did not arise. In relation to the issue of the costs of the third party claim, Wei J held that Crédit Agricole (and not Telemedia) was to bear the costs of the third party proceedings. With respect, we agree with that decision. In our view, there was no question of Crédit Agricole being the “wrong party” as there was no dispute that it was the party who transferred the shares on the instructions of Yeh – the question was whether there was liability on Crédit Agricole for acting on Yeh’s instructions. Further, unlike the present case, there was no question of Yeh bearing some portion of the liability should the claim against Crédit Agricole succeed because vis-à-vis Telemedia, Crédit Agricole was either liable in full or not at all.

Costs

Turning now to the facts before us, it was of significance to us that the Judge effectively found in the Costs Judgment (at [5]) that Mr Goel should have added SATS as a co-defendant as SATS was found to be liable for the tortious acts of the APOs. In addition, the Judge also found (at [11]) that RWS was “right to have joined SATS as a third party because some of the tortious acts were committed by the employees of SATS [ie, the APOs]”. Given these findings, it was somewhat surprising that Mr Goel was not ordered to bear the costs of the Third Party Proceedings.

Costs

In our judgment, in addition to the above findings by the Judge, there were several additional reasons why Mr Goel should be ordered to bear the costs of the Third Party Proceedings. First, we examined the pleadings. In the original Statement of Claim filed by Mr Goel on 29 May 2013 (at paras 3, 19, 20, 23, 26 and 28), Mr Goel averred that RWS was “liable”, “vicariously liable” or “responsible” for the acts or omissions of the personnel, servants and/or agents of RWS, who were at all material times acting under RWS’s direction and control in performance of their respective duties, but whose identities were unknown to Mr Goel at that time. However, in the original Defence filed by RWS on 14 June 2013, RWS expressly pleaded at para 14 that:

Costs

The upshot of the foregoing discussion was that while it may be true that it was Mr Goel’s prerogative to decide who he should sue, as the Judge aptly observed at [12] of the Costs Judgment, his decision could give rise to adverse costs consequences if he had acted improperly and unreasonably in omitting to include a party whom he knew, from the very nature of his claim, ought to have been added as a co-defendant. Hence, in our judgment, Mr Goel had, in effect, wrongly commenced the Suit against RWS in respect of the tortious acts of SATS’s APOs and, in so doing, made it inevitable for RWS to commence the Third Party Proceedings against SATS. In the result, it should be Mr Goel, and not RWS, who should be made to bear 80% of SATS’s costs incurred in the Third Party Proceedings on a standard basis on the High Court scale.

Costs

For the reasons stated above, we dismissed Mr Goel’s Appeal and allowed RWS’s Appeal. Accordingly, in relation to the costs below, we substituted the following orders for the orders made by the Judge in the Costs Judgment:

Costs

As regards the costs of the cross-appeals and the accompanying ancillary proceedings in SUM 1264, SUM 4600 and OS 24, we ordered Mr Goel to pay RWS a global sum of S$27,000 inclusive of all disbursements, such sum to be paid out from the security deposits placed by Mr Goel for his appeal. As for RWS’s Appeal, the usual consequential orders for the release of the security deposits were to apply.