Lim Eng Hock Peter v Lin Jian Wei and another

Chan Seng Onn J:

[4] Para 59/27/5 of the Singapore Court Practice 2009 (Jeffrey Pinsler gen ed) (LexisNexis Singapore, 2009) elaborates on the difference between the standard and the indemnity basis:

(a) Writ: 3 pages.

(b) Statement of Claim (Amendment No. 1): 14 pages.

(c) Defence (Amendment No.1): 36 pages.

(d) Reply (Amendment No.1): 4 pages.

(e) SUM 4849/2007/S: The Defendants’ application for a determination pursuant to Order 14 Rule 12 of the Rules of Court that the words complained of were not capable of any meaning defamatory of the Plaintiff and/or for the Writ of Summons and the Statement of Claim be struck out under Order 18 Rule 19 of the Rules of Court and/or under the inherent jurisdiction of the court. The matter was heard before Tan Lee Meng J over 3 days with a total hearing time of some 9.5 hours. The Plaintiff’s submissions totalled 35 pages with 20 authorities. The Defendants’ submissions totalled 90 pages with 28 authorities cited. Costs were ordered to be in the cause.

(f) Attendance at 7 Pre-Trial-Conferences.

(g) 71 letters exchanged between solicitors, 41 letters exchanged with the court and 145 letters exchanged with the client.

(h) Documents provided at discovery: 71 documents by the Plaintiff; 3706 documents by the Defendants.

(i) The Plaintiff’s opening statement at trial: 24 pages with 30 cases cited.

(j) The Defendants’ opening statement at trial: 20 pages with 10 cases cited.

(k) One affidavit of the Plaintiff: 30 pages of text with 13 exhibits running to 559 pages.

(l) Three affidavits of the Defendants: 67 pages of text with 46 exhibits running to 1115 pages.

(m) The Plaintiff’s bundles: 7 volumes totalling 2341 pages.

(n) The Defendants’ bundles: 52 volumes totalling 14,885 pages.

(o) The Plaintiff: 1 witness of fact.

(p) The Defendants: 3 witnesses of fact; 1 expert witness (no witnesses called). The Defendants initially confirmed that they would be calling 8 factual witnesses, 5 of whom had been subpoenaed, and 1 expert witness.

(q) The Plaintiff’s closing submissions for the trial: 171 pages and 7 cases.

(r) The Defendants’ closing submissions for the trial: 234 pages and 22 cases.

(s) Trial fixed for 10 days: Actual number of days used at trial was 6 days.

(t) The Plaintiff’s submissions on costs: 5 pages with 8 authorities.

(u) The Defendants’ submissions on costs: 5 pages with 4 authorities.

(v) Hearing on costs took 1.5 hours.

[12] A perusal of the 82-page grounds of decision by the trial judge would also help to indicate the degree of complexity of the numerous factual and legal issues involved in the case.

[13] The Defendants’ counsel kept harping on the fact that the Plaintiff’s counsel, Mr Alvin Yeo SC, in his opening statement had submitted that, “This is a straightforward defamation case, and Mr Lim will be the primary person giving evidence on his case .. ” [emphasis added] which was contrary to the Plaintiff’s present position that the matter was unusual and complex. The Defendants’ counsel emphasised that the Plaintiff himself was the only witness called by the Plaintiff, which suggested that the Plaintiff did not believe that this case was factually or evidentially difficult for him to establish.

[15] Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties) [2010] SGHC 163 (“Suit 46”) was another High Court action involving Raffles Town Club (“RTC”), the Plaintiff and the Defendants (and some other parties), which eventually concluded after some 87 days of hearing in the Megacourt. RTC in that suit alleged that, in the period from 1997 to 1999, the present Plaintiff and three other persons, while they were the directors and shareholders of RTC, had in breach of their fiduciary duty, conspired to siphon out monies from RTC by way of (a) management fees paid to a company known as Europa under a sham management agreement; (b) other consultancy and directors’ fees; and (c) loans. They had also breached their duties owed to RTC by accepting too many members into RTC resulting in the members’ action for which RTC had to pay damages. The complicated matters in Suit 46 became of relevance in the defamation action when the Defendants themselves annexed RTC’s statement of claim (of 25 pages) in Suit 46 as a schedule to the Defendants’ defence in the defamation action as particulars of their plea of justification. I agree with the submission of the Plaintiff’s counsel that the Defendants were the ones who had transplanted the discovery in Suit 46 into the defamation action, disclosing over hundreds of thousands of documents. Obviously, the Plaintiff’s counsel would have to carefully consider all the documents disclosed to them in the light of the justification defence based on the particulars alleged by RTC in Suit 46 against the Plaintiff here. Clearly, the Plaintiff’s counsel would have to prepare rebuttals to the allegations raised by RTC in Suit 46 in order to refute the justification defence. They would have to spend time preparing for cross-examination of the Defendants as the current directors of RTC on RTC’s allegations that the Plaintiff together with three other then directors of RTC had, from 1997 to 1999, acted in breach of trust and mismanaged RTC.

[16] The degree of importance of Suit 46 to the defamation trial could be seen in the opening remarks of the Defendants’ counsel that they “intend to show by way of reference, inter alia, to matters raised in [suit 46] that the said meaning is indeed justified” [emphasis added]. In fact, the Defendants’ counsel had spent most of the time cross-examining the Plaintiff on matters in Suit 46 and had devoted a substantial part of their closing submissions to the matters in Suit 46.

[17] Counsel for the Defendants argued that the Plaintiff had always taken the position that Suit 46 was irrelevant to the defamation action, and that the defence of justification was not the main issue at the trial, thereby suggesting that the Plaintiff’s counsel would have spent only a minimal amount of time considering the matters raised in Suit 46. The Defendants’ counsel submitted that the consistent position taken by the Plaintiff during the trial that Suit 46 was irrelevant and that evidence pertaining to justification was unimportant belies any present attempt by the Plaintiff’s counsel to argue that extensive preparation was done for cross-examination of the 8 factual witnesses and 1 expert witness that the Defendants had intended to call in relation to the justification defence. I reject the argument. Work must still be done by the Plaintiff’s counsel to go through the voluminous documents carefully in relation to Suit 46 to first consider how relevant they were before mounting a submission that the matters and issues raised in Suit 46 were irrelevant. Detailed preparation must also be done for the rebuttal of those matters and issues raised by the Defendants in Suit 46 in the event that the court disagrees and finds to the contrary that those matters and issues raised are indeed relevant. Hence, it would not be unreasonable for the Plaintiff’s counsel in this case to fully prepare the case also on the basis that the allegations against the Plaintiff in Suit 46, even if relevant, were untrue, baseless or unsupportable on the evidence and hence, the Defendants’ plea of justification based on the matters in Suit 46 would fail.

[18] In my judgment, it was also not unreasonable for the Plaintiff’s counsel to prepare the case and the cross-examination of the Defendants on the additional basis that it was not the Plaintiff but the Defendants themselves who had mismanaged RTC to the point that RTC was unable to pay the damages ordered of $3,000 per member to its members and RTC had to resort to a Scheme of Arrangement with its creditors. In the event that the Defendants could establish that the alleged defamatory words in the Explanatory Statement were made on an occasion of qualified privilege, it was also not unreasonable for the Plaintiff to thoroughly prepare the case (including the cross-examination of the Defendants) to prove that the Defendants had in fact acted with malice, inter alia, by:

[19] In my view, it might well be remiss of the Plaintiff’s counsel not to thoroughly prepare the case on the alternative basis that the matters in Suit 46 raised by the Defendants were relevant in order to ameliorate the risk to the client, despite an insistence by way of submission by the Plaintiff’s counsel that the matters in Suit 46 were irrelevant to the issues before the court. If I had any doubt I would have resolved it in favour of the Plaintiff’s counsel that it was reasonable for them to have prepared for extensive cross-examination of the Defendants’ witnesses, in particular of the Defendants themselves, on all the matters raised in Suit 46. In fact, I entertained no reasonable doubt that if the Defendants had taken the witness stand, the Plaintiff’s counsel would have had a field day cross-examining the Defendants to show that it was due to their own financial mismanagement of RTC during the entire period they were in charge and to their siphoning of moneys from RTC by way of large amounts of dividends to themselves that caused RTC (a) to be in financial difficulties and (b) to enter into a Scheme of Arrangement with its creditors after RTC had lost the members’ suit. The Plaintiff’s counsel clearly would want to prove that RTC’s financial difficulties had nothing at all to do with the Plaintiff in order to demolish the plea of justification. There would be lots of fertile areas for cross-examination of the Defendants which the Plaintiff’s counsel would no doubt have spent a lot of time and effort making extensive preparations for.

[20] I was informed that less than one month before the commencement of the defamation trial, the Defendants’ counsel suddenly disclosed over 100 arch files of documents and 40 cartons of working papers which had earlier been disclosed by RTC in Suit 46. This was followed by another late disclosure of a further 30 arch files of documents which had earlier been disclosed by another party in Suit 46, less than two weeks before this defamation trial was to commence. One week before the trial, the Defendants disclosed another 11 itemised documents. At the trial, the Defendants tendered 52 volumes of documents totalling 14,885 pages. Further, affidavits of evidence-in-chief (“AEICs”) intended to be AEICs for Suit 46 (including an AEIC from an expert witness) were also filed. All the discovery documents were primarily in support of the Defendants’ plea in justification. For the Defendants’ justification, they were basically relying on their allegations in Suit No 46 in their entirety, as well as the allegations made by Tan Buck Chye inNganthavee Teriya (alias Gan Hui Poo) v Ang Yee Lim Lawrence and others[2003] 2 SLR(R) 361.

[21] The fact that voluminous documents were disclosed by the Defendants at very late stages of the proceedings would have added to the urgency of the work and unnecessarily added to the stress levels experienced by the Plaintiff’s counsel in combing through the hundreds of thousands of documents in the course of performing their duty diligently to their client. No responsible counsel would take the risk of cursorily going through the voluminous documents simply because they were delivered to them relatively late in the day. Overtime work and working after office hours would likely have to be resorted to. Counsel would be remiss in their obligations to their client if they did not spend sufficient time to carefully consider all the documents produced by the Defendants in relation to all the issues and in particular the defences in the defamation claim.

[22] Counsel for the Plaintiff submitted that the defamation suit was of importance to their client because the defamatory statements had attacked the competence and integrity of the Plaintiff. The defamatory statements obviously had serious consequences on the Plaintiff’s personal and professional reputation as a prominent businessman and investor. This is evidenced in part by the amount of damages awarded to him by the Court of Appeal for the defamation.

[23] As the Explanatory Statement of some 391 pages was drafted with the assistance of professional advisers such as lawyers from Allen & Gledhill LLP and accountants from Ernst & Young, who must have carefully vetted the Explanatory Statement before its publication and had in fact ensured that every positive fact stated therein was in fact accurate and true, counsel for the Plaintiff obviously had to take greater care to study the matter before advising the Plaintiff to launch a defamation suit based on certain passages in the Explanatory Statement. Having regard to the Plaintiff’s standing in the business community, it is no light-hearted matter to hold the Defendants responsible for the defamatory statements found in the Explanatory Statement when the Defendants might well have relied heavily on their professional advisers to draft the Explanatory Statement on their behalf. What if the Defendants were to take the stand and testify that they left the entire drafting completely in the hands of their professional advisers as to (a) what facts may be inserted into the Explanatory Statement and (b) how the facts should be presented in order to show that they harboured no malice towards the Plaintiff and that they had no intention to use the Explanatory Statement for any improper motive. The Plaintiff’s counsel had to be alive to such an eventuality when advising the Plaintiff on and preparing for the case.

[24] To allege that parts of the Explanatory Statement had become defamatory of the Plaintiff merely because the amount of dividends taken by the Defendants themselves totalling $54 million had not been expressly stated within the main text of the Explanatory Statement was not that straightforward. This omission of fact from the main text formed the principal basis for the Plaintiff’s defamation action.

[25] Hence, this is not the ordinary defamation case where the positive allegations themselves are clearly defamatory on its face. It is not the relatively simpler case of finding the meaning of the words spoken based on their construction. It was a more complex case of deducing whether it was nevertheless still defamatory and if so, what the sting of the defamation was, based on what was not disclosed in the main text but which could still be deduced mathematically or discovered perhaps by a very discerning reader from the total dividends paid out which had been stipulated accurately elsewhere in an appendix to the Explanatory Statement.

[26] Additionally, if the defamatory remarks came within the occasion of qualified privilege, then the Plaintiff would have to further prove malice or improper motive on the part of the Defendants, who might well have relied completely on professional advisers to advise them and eventually to draft the whole Explanatory Statement for them.

[27] In paragraphs 7 and 8 of the amended defence, it was stated that:

[28] It bears repeating that with lawyers and accountants from an eminent law firm and accounting firm closely associated with the preparation and drafting of the Explanatory Statement, counsel for the Plaintiff would obviously have to take extra care and effort in ascertaining whether or not they could indeed prove malice or improper motive on the part of the Defendants (and by implication on the part of their advisers too depending on the Defendants’ testimonies) because failing in a defamation action would also bring adverse consequences to the Plaintiff. It would not do the Plaintiff’s personal reputation much good to launch the defamation suit, bring publicity on himself, attract attention to the alleged defamatory remarks and then fail in the defamation action.

[29] The Plaintiff gave evidence that he knew the implication of his defamation suit was very, very serious and he had to be very, very careful due to the involvement of professionals in the drafting of the Explanatory Statement. I am quite sure that he would have made this known to his solicitors, who therefore had to do comprehensive getting up to be fairly confident of the correctness of their advice to him to proceed with the defamation action. If they had to ensure that the legal research done, the fact finding and perusal of all documents were as thorough as possible by spending much more time and effort on account of the importance of the matter to the Plaintiff, I would not consider that to be unreasonable. If I had any doubt whether or not extra time and effort was spent in this regard, I would resolve it in favour of the Plaintiff in view of the indemnity basis of this taxation.

Total time spent of 2,309.3 hours @ $483.11 (blended hourly rate) = $1,115,655 as the total amount claimed. (For 1 lawyer working for 2309.3 hours, it is equivalent to 288 man days at 8 hours a day or 12.5 man months based on 23 working days per month. If it is based on 2 lawyers working concurrently, then 2309.3 hours is equivalent to 2 lawyers working concurrently on the case for 6.25 months approximately. This gives a better overall sense of how long 2309.3 hours is.)

[31] I noted that the charge out rates applied by M/s WongPartnership LLP for counsel of different seniorities ranged from $900 per hour for Alvin Yeo SC to $200 per hour for Reina Chua. They did not appear to me to be way out of line with the prevailing market rate. As the Defendants’ counsel had not made any submissions to me on them, I assumed that they were not contending that those charge out rates applied were unreasonable or excessively high when compared to the prevailing market rate.

[36] I must have regard to the fact that the Defendants’ solicitors had the benefit of acting for RTC in Suit 46 and therefore, they would already have intimate and detailed knowledge of all matters in Suit 46, such that the time spent getting up on matters concerning Suit 46 relevant to their plea of justification in this action would have been significantly reduced. Yet the Defendants’ solicitors had to spend a total of 1,149 hours on the defamation case alone. On the other hand, the Plaintiff’s solicitors did not act at all for the Plaintiff in Suit 46. Essentially it meant that the Plaintiff’s solicitors (unlike the Defendants’ solicitors) would have to do fresh getting up for the entire Suit 46 based on the Suit 46 documents sent to them and this involved a lot of work as can be seen from the voluminous documents given to the Plaintiff’s solicitors that stemmed from the Defendants’ action in making Suit 46 relevant to this defamation action from the perspective of their justification plea. Hence, it was not surprising that the Plaintiff’s counsel actually had to spend much more time than the Defendants’ counsel in preparing for the defamation case.

(a) A team of two reasonably senior counsel comprising Alvin Yeo, SC (20 years) --- 297.3 hours @ $900 per hour = $267,570 and Chan Hock Keng (14 years) --- 451.2 hours @ $750 per hour = $338,400 with a total cost claimed of $605,970. On this basis, the Plaintiff was not reimbursed for the costs claimed by the rest of the other four lawyers on the team, namely, Koh Swee Yen, Jacelyn Chan, Suegene Ang and Reina Chua; or

(b) A team of one senior counsel assisted by two more junior lawyers comprising Alvin Yeo, SC (20 years) --- 297.3 hours @$900 per hour = $267,570; Koh Swee Yen (3 years) --- 485 hours @ $425 per hour = $206,125 and Suegene Ang (1 year) --- 463.3 hours @ $325 per hour = $150,572.50 with a total cost claimed of $624,267.50. The costs claimed by the rest of the other three lawyers on the team, namely, Chan Hock Keng, Jacelyn Chan and Reina Chua would not have been covered.

[43] The pitfall is to compare the hourly rate computed for the “hours allowed” with the hourly rate computed for the “hours claimed”. In the present case before me, the hourly rate computed for the “hours claimed” is $650,000 ÷ 2309.3 hours claimed = $281 per hour as claimed, whereas the hourly rate for the “hours allowed” is $650,000 ÷ 1100 hours allowed (by the court as reasonable) = $590 per hour as allowed. Hence, it is clear that the hourly rate based on the “hours claimed” is very different from the hourly rate based on the “hours allowed”.

[44] If a comparison is made of the hourly rate of $590 for the “hours allowed” in this case with the hourly rate for the “hours claimed” in the comparable cases, then it is akin to comparing apples with oranges and is entirely flawed. In the absence of information in the comparable cases of the hourly rate for the “hours allowed”, a comparison based on the hourly rate for the “hours allowed” cannot be carried out. The only way is to compare the present case with the comparable cases based on the hourly rate for the “hours claimed”.

[46] In this case, I have given the hours allowed as 1,100 hours so that future comparisons may be made based on the hourly rate for the “hours allowed”. With time, more benchmarks could be established for comparison purposes based on the hourly rate for the “hours allowed”.