Goel Adesh Kumar v Resorts World a t Sentosa Pte Ltd (SATS Security Services Pte Ltd, third party) [2017] SGHC 43

Costs

Mr Goel commenced suit against the Casino on 29 May 2013. The Casino joined SATS as a third party on 19 November 2013. Approximately a year before the trial, on 2 July 2014, the Casino and SATS made a joint offer to settle Mr Goel’s claim at $62,000. Mr Goel rejected this offer. The trial commenced on 30 June 2015 and ended on 3 September 2015 with breaks in between the dates. On 17 September 2014, the Casino and SATS made a second offer to settle. This time they offered $100,000 and again Mr Goel rejected this offer. The two offers to settle were made without prejudice to the action and thus not disclosed to the court. I delivered judgment on 4 November 2015. The parties now appear before me on the question of costs.

Costs

Ordinarily, the party who succeeds will be entitled to costs of the action. Hence, in the normal case, the Casino will have to pay the costs of Mr Goel’s claims. In this case, because offers to settle were made to Mr Goel before judgment, the court may refuse costs to him and, conversely, order costs against him. The cost consequences resulting from an offer to settle are set out in Order 22A of the Rules of Court (Cap 322, R 5, 2014 Rev Ed). The procedure for making offers to settle is to encourage litigants to re-evaluate their claims, and, if done reasonably, the parties can settle their dispute without trial. A long, protracted trial like this takes a toll on public funds and thus the inducement of an offer to settle is not only of benefit to the parties but also the public.

Costs

In this case, Mr Goel suffered some inconvenience and injury but they were not as serious or as costly as he claimed. He sought more than $484,196.16 but was awarded only $36,732.59. He might have received the full $45,915.74 had he joined SATS as a defendant. He did not realise how important it was to make sure that all relevant parties are joined in the action, just as he failed to realise that in addition to suing the right parties, he had to sue in the right causes of action. His claim in negligence was not founded on the evidence and was dismissed. That too will have an impact, though not a major one on the facts of this case, on the award of costs.

Costs

The first issue before me now is whether the Casino can rely on the first offer to settle or whether it is obliged to stand by its second offer. Both offers were more than what Mr Goel was awarded but the importance lies in the costs that Mr Goel has to pay for not accepting the offers. Had he accepted the first, he would not have to pay costs, but by rejecting it, the costs that accrue after that date has to be borne by him on an indemnity basis.

Costs

That is why his counsel argued that the Casino (and SATS), having made a second offer to settle, is bound by that offer and that the first offer cannot be relied upon to mark the date from which Mr Goel has to pay costs. The difference between the two, therefore, is that if the first offer is valid and applicable, Mr Goel has to pay costs to the Casino from 2 July 2014, but if the second offer is applicable, then Mr Goel only needs to pay the Casino costs from 17 September 2014.

Costs

There is no merit in Mr Goel’s counsel’s argument that the second offer is the valid and binding one. When a party makes a second offer it is to induce the opposing party to reassess his position. The second offer may be higher or lower than the first. The idea is to encourage the other party to end the proceedings. If the offer is higher, then the other party obtains the benefit of the increase. If he does not, he cannot claim that the offeror cannot rely on the first offer to benefit from its cost consequences. That offer remains otherwise there is no incentive for parties to improve their offers to facilitate a settlement. It is possible that a party’s second offer may be lower than the one it first made. There may be good reasons for this. Discovery may lead him to realise that his case is stronger than initially thought. The lowered offer will nonetheless force the other party to reassess his case. In the event that a party makes a second offer that is lower than the first, reason suggests that he ought to state whether he is withdrawing the first.

Costs

In this case, Mr Goel rejected the first and second offers. He must therefore be responsible for costs incurred after that. The Casino will thus pay him costs up to 2 July 2014. The costs are payable only on the scale of the Magistrate’s Court on a standard basis as the damages awarded are within the Magistrate’s Court’s jurisdiction and the claim ought to have been pursued there: see s 39(1)(b) of the State Courts Act (Cap 321, 2007 Rev Ed). Mr Goel will have to pay the Casino costs on an indemnity basis from 2 July 2014.

Costs

I now move on to the question of costs for the third party proceedings, which I dismissed. The Casino was right to have joined SATS as a third party because some of the tortious acts were committed by the employees of SATS. SATS would have to pay costs if it had been found liable to the Casino but in this case, I think that it ought to be entitled to costs because Mr Goel succeeded against the Casino for up to 80% of his claim. The fair order is therefore for the Casino to pay SATS costs up to 80%.

Costs

For completeness, I note that the Casino’s counsel submitted that Mr Goel should be liable for SATS’ costs as the third party proceedings were an inevitable and necessary result of Mr Goel’s decision not to make SATS a defendant. It would take exceptional circumstances before a plaintiff is made responsible for costs of third party proceedings, especially when the plaintiff’s claim has substantially succeeded, as in Mr Goel’s case. The plaintiff has the right to choose who to sue, and unless the real issue of the litigation is between the plaintiff and the third party, or the defendant is clearly the wrong party, it is not responsible for the defendant’s decision to join third parties to the suit. None of the abovementioned factors are present in this case.