Mohamed Amin bin Mohamed Taib and others v Lim Choon Thye and others

Judith Prakash J:

(a) The non-stamping of the SPA; and

(b) The nature of the fee-paying arrangement between the plaintiffs and their solicitors.

I shall address them in turn.

According to Mr Rai, the plaintiffs’ failure to ensure that the SPA had been duly stamped and their failure to disclose this fact earlier caused a significant increase in the length of the proceedings. He argued that the plaintiffs’ arguments in OS 17/2008 had been made improperly and unreasonably as they were, in the end, entirely futile. As the SPA had not been stamped, it could not be used before the STB as evidence and without it being in evidence, the plaintiffs could not proceed with their application for collective sale. Thus, he submitted, principles (iii) and (iv) from Tullio justified depriving the plaintiffs of their costs and ordering that costs should be paid to the defendants instead.

The plaintiffs’ failure to procure the stamping of the SPA amounted, therefore, to an offence under the Act and, according to Mr Cheong, a court could not and should not ignore that fact. Where a party’s failure to fulfil a statutory duty would have disposed of an appeal one way or the other, a court should take such conduct into consideration by denying them costs. The entire purpose of introducing the SPA as evidence before the STB (and indeed, its entire purpose when it was referred to in OS 17/2008) was to demonstrate the purchaser’s intention to proceed with the sale; thus, the fact that it was not stamped was evidence to the contrary. Had the intention not to proceed with completion been known at either the STB hearing or the hearing of OS 17/2008, the plaintiff’s application in the former would have been dismissed out of hand and the latter would never have been pursued.

[13] Mr Low’s responses to the arguments above canvassed several points previously made before Woo J at the hearing for Sum 3938/2009. First, he argued that there was no duty or obligation on the plaintiff to ensure that the SPA had been stamped. Section 34(a) of the Act – in conjunction with the Third Schedule – made it clear that the stamp duty in conveyances such as this was to be borne by the transferee or purchaser. The plaintiffs were under no duty to ensure that the purchaser complied with the purchaser’s own obligations under the statute; nor could they be faulted for having failed to check with the purchaser in order to establish whether the SPA had been stamped. Secondly, he reiterated that there was no basis to suggest that the plaintiffs concealed or were even aware of the fact that the SPA was unstamped. His third point was that the failure to disclose the non-stamping of the SPA earlier might not necessarily have obviated the need for the STB hearings or the hearing in OS 17/2008. Section 52(2) of the Act expressly allows unstamped documents to be admitted in evidence upon payment of the relevant duty and penalty under s 46 of the Act and this was precisely what the STB allowed the parties to do when the failure to stamp the SPA first became known. The Board only dismissed the application in March 2009 when it became manifestly clear that the purchaser would not be rectifying the omission and having the documents stamped. The fact that the purchaser proved unwilling to stamp the SPA in 2009 did not necessarily mean that it would have been unwilling – if offered the opportunity – to stamp the SPA at an earlier point of time. It could not, therefore, be said that the hearings that proceeded on the basis of the SPA would have been obviated had the fact that the SPA was not stamped been known at an earlier stage. At the hearing of Sum 3938/2009, Woo J accepted these arguments in rebuttal to the seventh and eighth defendants’ application to strike out my initial order in OS 17/2008. Mr Low, no doubt, hoped that they might have the same effect here.

[18] The non-stamping of the SPA was – as Woo J correctly observed at [15] of his judgment, in Sum 3938/2009 (found at [2009] SGHC 216) – a situation that could have been easily rectified at any time. It did not affect the essential validity of the document but merely rendered it inadmissible in evidence. Section 52(2) of the Act explicitly provides for admissibility upon payment of the stamp duty and any penalty. Thus, as Mr Low suggested, it is by no means evident that early discovery of the non-stamping of the SPA would have obviated the need for the STB proceedings and OS 17/2008. Had the non-stamping of the SPA been discovered in 2007 and the situation rectified, the STB application may have continued as a matter of course with nothing more than a slight delay. Mr Rai and Mr Cheong were wrong, therefore, to ascribe the causative significance that they did to the non-stamping of the SPA.

According to Mr Singh, the fact that the legal fees were being paid for by Mr Chew indicated that the plaintiffs did not and would not themselves incur any legal fees in OS 17/2008. The rule at common law is that a litigant may not recover from the opposing litigant more than what he is liable to pay to his own solicitor in costs; in short, party and party costs are given in the character of an indemnity: Gundry v Sainsbury [1910] 1 KB 645, 649. Since the plaintiffs admitted that the fees for OS 17/2008 were being borne by a non-party, what they have indicated is that they would not be incurring any legal costs themselves. As a result, any costs paid to them by the defendants would not amount to compensation but a bonus instead. The plaintiffs should, therefore, be deprived of their costs in OS 17/2008 in their entirety.

[23] Mr Low made no substantive reply to either Mr Singh or Mr Cheong’s submissions in his rebuttal.

It is also the position adopted by local statutory law. Section 112(2) of the Legal Profession Act (Cap 161, 2009 Rev Ed) provides that a litigant should not be entitled to recover from any other person more in costs than the amount payable by the litigant to his own solicitor under a s 111(1) written agreement between himself and his solicitor governing the amount and manner of the payment of costs for conducting contentious business.

The same principle is expressed a little more strongly in the decision of Joyce v Kammac, supra, which was relied upon by Mr Cheong in the course of his argument. There, Morland J stated, at 928:

Thus, the fact that the purchaser’s property agent would ultimately be bearing the legal fees of OS 17/2008 is immaterial to determining the plaintiffs’ entitlement to costs unless it could be shown that the plaintiffs were not primarily and potentially legally obliged to pay their solicitors at all.

[27] Mr Cheong pointed out that it was Mr Amin who gave evidence that the legal fees of OS 17/2008 were to be borne not by the plaintiffs but by another. It was the plaintiffs’ own evidence that raised the very real possibility that an agreement by the plaintiffs’ solicitors not to charge their clients was actually made; the onus was on them, therefore, to adduce some evidence in order to support any assertion to the contrary. Mr Cheong submitted that the best way for the plaintiffs to do this was to disclose the terms of their solicitors’ retainer to the court. On his part, he would be satisfied with the court having sight of the document; he and his clients would not insist seeing it for themselves.

[28] The first portion of Mr Cheong’s argument above is consistent with the position espoused by Hobhouse J in Pamplin v Express Newspapers Ltd [1985] 1 WLR 689, 696-697:

This seems to me to be the correct approach to take. The evidence that is currently before me strongly suggests the existence of an agreement stating that the plaintiffs’ solicitors will not be looking to the plaintiffs for their legal fees; it is only fair that the plaintiffs should be given a chance to voluntarily respond and adduce such evidence to rebut the allegation made against them. As this was not a taxation hearing, I could not compel the plaintiffs to produce their written retainer. Operating on the basis of the Pamplin approach, however, I could and did invite the plaintiffs to (voluntarily) waive privilege and disclose the written retainer in order to determine the true nature of the arrangement they have with their solicitors. After taking instructions from their clients, the plaintiffs’ solicitors indicated that their clients were not willing to waive their privilege, nor make the limited disclosure being asked of them. Pressed for a response to Mr Singh and Mr Cheong’s allegations, all Mr Low could offer was his assurance that the plaintiffs were their clients on record and that the written retainer reflected the agreement arrived at between Mr Chew and the plaintiffs for Mr Chew to pay the legal costs of the proceedings.

[30] The plaintiffs could not – by virtue of s 131 of the Evidence Act (Cap 97, 1997 Rev Ed) – be compelled to disclose their solicitors’ retainer to the court. However, the dispute of fact is concerned with the nature of the plaintiffs’ agreement with their solicitors and this would evidently be a fact that was especially within the plaintiffs’ knowledge. Section 108 of the Evidence Act places the burden of proving such a fact squarely on the plaintiffs’ shoulders. The key provision in the Evidence Act, however, is s 116. It provides that:

Illustrations (g) and (h) to s 116 then go on to provide that:

Section 116, therefore, allows me to draw an adverse conclusion from the plaintiffs’ silence and in my view, there is sufficient ground in this case for me to do so.