BLG and another v BLI and others [2018] SGHC 86

Costs

This review under Bill of Costs No 189 of 2016 relates all the way back to Originating Summons (Family) No 71 of 2011 (“the OS”). In the OS, two sisters namely BLG and BLH (“the applicants”) applied to the State Courts for a declaration pursuant to s 20 of the Mental Capacity Act (Cap 177A, 2010 Rev Ed) (“the MCA application”) that their sister BLK (“the third respondent”) was unable to make decisions for herself relating to her property and affairs, and to appoint the applicants as deputies to act in relation to the third respondent’s property and affairs.

Costs

The applicants appealed to the Court of Appeal against the decision of this court in Civil Appeal No 27 of 2014. The appeal was allowed (see Re BKR [2015] 4 SLR 81) with costs reserved. Subsequently, the Court of Appeal heard parties on costs. On 24 November 2015, the Court of Appeal made the following costs orders:

Costs

In compliance with the above order of the Court of Appeal, the applicants’ solicitors prepared a bill of costs (“Original Bill of Costs”) which included the following proceedings:

Costs

After a lengthy hearing spread over three months and six days in 2017, the Senior Assistant Registrar (“SAR”) reduced the applicants’ costs in Section 1 of the Amended Bill of Costs from $3,530,226.65 to $878,600.00 and Section 3 disbursements from $665,165.39 to $663,430.46. The total costs claimed by the applicants for Sections 1 and 3 amounted to $4,194,392.04 and the total amount allowed was $1,542,030.46. A claim was made under Section 2 for $20,066.67, but no costs were awarded.

Costs

Both parties were dissatisfied with the SAR’s taxation of the Amended Bill of Costs. Consequently, the applicants filed Summons No 3183 of 2017 for review of Sections 1 and 2 costs while the first two respondents filed Summons No 3184 of 2017 for review of Section 3 costs. Before both taxation reviews could take place, the applicants filed Summons No 5386 of 2017 (“the applicants’ summons”) on 22 November 2017 praying for the following orders:

Costs

At the hearing, the court inquired of the applicants’ counsel (“Mr Eng”) his reason(s) for wanting to see the solicitor-and-client charges rendered by the first two respondents’ solicitors. He informed the court that it was necessary and relevant for the taxation review(s) of the Amended Bill of Costs. In support of his arguments, Mr Eng cited O 59 of the Rules of Court (Cap 322, R 5, 1997 Rev Ed) (“the Rules of Court”) for the non-exhaustive factors the court must take into account in the multifactorial approach to be taken in taxation. He also relied on the Court of Appeal’s decisions in Lin Jian Wei and another v Lim Eng Hock Peter [2011] 3 SLR 1052 (“Lin Jian Wei”) and Likpin International Ltd v Swiber Holdings Ltd and another [2016] 4 SLR 1079 (“Likpin International”) as well as the High Court’s decision in Singapore Medical Council v Lim Mey Lee Susan [2015] SGHC 129 (“Susan Lim”).

Costs

To a further question from the court, Mr Eng clarified that he did not require to see the solicitors’ bill(s) of the first two respondents; he only wanted a breakdown of the hours their solicitors said they spent on the proceedings. Mr Eng complained that while the applicants had complied with the requisite Supreme Court Practice Directions (“the PD”) and filed a costs schedule before the Court of Appeal hearing, the first and second respondents had failed to do so in regard to the proceedings listed at [6] (save for CA 27/2014). Consequently, the court did not have a comparative schedule of costs to assist in the taxation and/or review of the Amended Bill of Costs.

Costs

Counsel for the first two respondents (“Mr Poon”) in opposing the applicants’ summons pointed out that apart from the first two respondents’ solicitor-and-client bills, there were two other objective comparators the applicants had recourse to, namely Appendix G of O 59 and the costs schedule that the applicants’ solicitors had themselves filed for CA 27/2014.

Costs

Mr Poon pointed out that at the taxation below, the applicants initially gave no breakdown of the hours spent by the applicants’ solicitors or the tasks for the charges billed to enable the court to ascertain how the figure in the Amended Bill of Costs could have increased almost six-fold from the figure in their costs schedule. He submitted that the applicants’ summons was a strategy to distract from the key question at stake – why was there such a vast discrepancy between the figure the applicants informed the Court of Appeal was their costs ($606,000) and the figure finally presented in the Amended Bill of Costs ($3,530,226.65)?

Costs

Mr Poon explained that Justice Woo Bih Li’s decision in Susan Lim was issued before the PD on costs scheduling came into effect. (This submission is incorrect – the costs scheduling provisions in paragraphs 99A and 99B took effect on 15 July 2014 by way of Amendment No. 3 of 2014 to the PD while Justice Woo’s decision was dated 13 May 2015). As for the omission to file a costs schedule on the first two respondents’ behalf save for CA 27/2014, Mr Poon stated it was not necessary to do so as, just before the hearing of CA 27/2014, another PD was issued stating parties were only required to file the costs schedule pertaining to CA 27/2014 and nothing else.

Costs

It would be appropriate at this juncture to refer to the costs schedule of the applicants filed in compliance with paras 99A and 99B of the PD. The provisions state:

Costs

As set out at [10] of the SAR’s well-reasoned grounds of decision dated 27 June 2017 (which this court endorses), there were huge discrepancies between the figures in the costs schedule filed by the applicants and the amounts for the same items in the Amended Bill of Costs. This can be seen from the table below:

Costs

It is a truism that the purpose of costs scheduling is to restrain a litigant from claiming excessive costs when he wins a case. I can do no better at this stage than to quote certain passages from the very case cited by the applicants namely Likpin International. There, the Court of Appeal exhorted:

Costs

In awarding costs of $50,000 to the successful party, the Court of Appeal acknowledged that even costs of $45,000 would have been generous. However, because the losing party put a figure of $60,000 into its costs schedule, the Court of Appeal gave a higher award of costs. Here, the shoe is on the other foot. The applicants’ costs schedule was reasonably moderate. But they now want to depart drastically from those figures.

Costs

The court is mindful that the costs dealt with by the Court of Appeal in Likpin International was on a standard or party-and-party basis. The issue of indemnity costs, however, was the subject of appeal in Lin Jian Wei following the Court of Appeal’s earlier decision to award such costs in Lim Eng Hock Peter v Lin Jian Wei [2010] 45 SLR 331 to the successful plaintiff in his defamation suit against the two defendants. The appellate court’s decision was given in 2011 before the costs scheduling provisions came into effect. It was there held that besides the considerations listed in para 1(2) of Appendix 1 to O 59, the principle of proportionality must also apply regardless of whether taxation is on a standard or indemnity basis. The Court of Appeal said at [56]:

Costs

At this juncture it would be appropriate to look at the guidelines in Appendix G of para 99B on Costs Guidelines. In Appendix G the following estimates were the party-and-party costs for:

Costs

The above figures are to be contrasted with the applicants’ figures in the Amended Bill of Costs at [17]:

Costs

Mr Poon (who appeared at the hearing) had informed the SAR that it was not his position that there can be no departure from the costs schedule that had been submitted. What was in issue before the court he said was the “magnitude of the discrepancy” between the applicants’ costs schedule and the Amended Bill of Costs. This court agrees. Tellingly, there was no affidavit before the court to explain what the “mistake” in the applicants’ costs schedule was.

Costs

Before this court, Mr Eng was also unable to explain to any degree of conviction why his firm had departed so drastically from the costs schedule it had submitted to the appellate court before the hearing of CA 27/2014, albeit on a standard basis. Instead, he contended that a costs schedule was not the be all and end all in taxation. In answer to this submission, I refer again to the advice given to counsel by the Court of Appeal (at [15]) in Likpin International (supra [18]):

Costs

None of the factors proffered to the court below on behalf of the applicants could excuse their drastic departure from their costs schedule. Indeed, for them to submit that the court should accept their excuses (not reasons) in [23] and allow the applicants to depart from their costs schedule would make a mockery of paras 99A and 99B of the PD and render them otiose. Equally, it meant that there is no distinction being made between the jurisdictional limits of the State Courts vis-à-vis the High Court if there is no difference in costs structure between cases brought in the two courts (which counsel for the applicants sought to argue before the SAR). That cannot be right. Taking into account that the OS was commenced in the State Courts, a discount should have been applied to the Costs Guidance range of costs of $15,000–$20,000 (see Appendix G set out at [21] above) for contentious originating summons proceedings in the High Court.

Costs

However, the SAR (see [45] of his grounds of decision) gave the benefit of the doubt to the applicants pursuant to O 59 r 27(3) and did not apply any discount at all. Instead, the SAR accepted Mr Poon’s suggestion that a daily tariff of $20,000 for medical negligence trials was appropriate, taking into account that the hearing had a strong focus on expert medical evidence. In addition, the SAR gave an uplift of $3,000 to the daily tariff (at [51] of his decision) Using a multiplier of 30 for the number of trial days and the percentage tariffs to be applied for each hearing day set out in Part III(A)(i) of the Costs Guidelines for trials, he arrived at a figure of $485,000 (rounded up from $483,000) for the 30 days’ trial. The sum represented an uplift of 32.87% on the applicants’ figure of $365,000 in their costs schedule. This took into account the indemnity basis for the taxation. The allowed sum should be contrasted with the figure of $1,363,488.25 in the Amended Bill of Costs which is clearly excessive.

Costs

I had pointed out to Mr Eng at the hearing that if counsel for the applicants persisted in asking the same question 21 times of the third respondent within half an hour (as this court noted at [134] in Re BKR) the unnecessarily prolonged cross-examination would have been done at the expense of the first two respondents who now have to bear the charges. The Court of Appeal in Lin Jian Wei (at [69]) had cautioned against placing too emphasis on time-costing. The fact that the applicants’ lead counsel may have spent 8 hours cross-examining the third respondent should not automatically translate into an 8 hour time charge. Besides proportionality, the reasonableness principle applies to costs taxed on an indemnity basis.

Costs

Paragraph 99B(3) as set out at [16] above specifically states that solicitor-and-client costs do not come within the purview of the costs scheduling in the PD. That being the case, how can the applicants say that the bills rendered by the first and second respondents’ solicitors “may be relevant” (pursuant to O 24 r 1 and O 59 r 13(d) of the Rules of Court) for taxation/review of the Amended Bill of Costs?