Mok Kwong Yue v Ding Leng Kong

Judith Prakash J:

[2] The principles in question (“the Medway principles”) are summed up in the headnote of the case which reads:

[5] As drawn, the plaintiff claimed the following amounts under the bill:

(a) In respect of Section 1, $80,000;

(b) In respect of Section 2, $1,260; and

(c) In respect of Section 3, $9,617.80.

Taxation took place over two sessions and at the end of the second session, the Assistant Registrar (“the AR”) awarded the plaintiff $7,000 in respect of Section 1, $400 in respect of Section 2 and taxed off all items in Section 3 except items 62 and 63. The AR disallowed the taxing and the allocatur fee in view of the amount that had been taxed off. The basis of the AR’s decision that the plaintiff was only entitled to $7,000 in respect of getting up for the counterclaim was that she accepted that the Medway principles applied to this case.

Part of the significance of Saner v Bilton and the basis of its weight as an authority was it was decided after consulting the judicial officers who regularly taxed costs.

The learned judge expressed the view that if the defendants’ case had been treated as a pure set-off to the amount of the plaintiff’s claim and it had so appeared in the judgment, then the defendants would have been entitled to the costs of the action, because then the defendants would have denied by way of defence that the plaintiff had any right to bring an action at all and would have succeeded in their defence. To me, it appears that the distinction between this case and the earlier one was that in Baines v Bromley the claim and counterclaims were distinct from each other and did not have facts in common. As the counterclaim was a separate action and not, essentially, a set-off to the plaintiff’s claim, the plaintiff was entitled to tax his costs as a successful party notwithstanding that the amount he recovered on the claim was less than the amount the defendants had recovered on the counterclaim.

[11] In the Court of Appeal, the defendants relied on Saner v Bilton. The judgment of the court (Lindley M.R. and Chitty L.J.) allowing the appeal was delivered by Lindley M.R. His Lordship noted that Saner v Bilton had been approved and followed by the Court of Appeal in three later cases including Ward v Morse. After a survey of the authorities, he said at p 504:

[14] From the recitation of the facts, it would be noted that this case was akin to the factual situation in Ward v Morse and was not identical with Saner v Bilton where both the plaintiff and the defendant had failed in their actions. However, the taxing master’s decision was in line with Atlas Metal, the case that he used to justify his decision.

[18] The next case I must deal with is Wilson v Walters [1926] 1 K.B. 511. By the time it was decided, there had been attempts to reconcile Saner v Bilton and Christie v Platt.

[20] Scrutton L.J. accepted that approach and held that where it was the same transaction that the parties were fighting about, the rule as laid down in Saner v Bilton applied and it was not a case for apportionment. The other judge, Sargant L.J., agreed. He noted that on the facts of the case neither party had had any right against the other and therefore no litigation ought to have ensued. He continued:

It will be appreciated that this was the justification that Fry L.J. had applied in the first place when he decided Saner v Bilton.

[22] In the House of Lords, Saner v Bilton and Wilson v Walters were approved and followed. On the other hand, Christie v Platt was explained and distinguished. In the event, the decision of the Court of Appeal was reversed and MacKinnon J’s judgment was restored. Viscount Haldane delivered the leading judgment and in the course of his judgment he went through all the previous cases (including the ones that I have cited herein above). Upon the review, he concluded that Atlas Metal had obviously followed the principle of Saner v Bilton and that successive Courts of Appeal had laid down a principle which was not only intelligible, but capable of being easily applied by the Taxing Master. Although the principle might work out apparently harshly in exceptional cases, when these threatened to occur the remedy was to apply at the trial for special directions as to issues and details. In Viscount Haldane’s view, the law had been settled since 1898, the year of the judgment in Atlas Metal.

This case is the first (perhaps the only) reported decision in Singapore which applied Medway Oil in relation to the costs payable by an unsuccessful defendant in respect of his counterclaim. It is noteworthy that there was no hesitation in doing so and no suggestion that any other rule might apply.

[27] From this somewhat brief account of the cases it would be realised that the Medway principles are well embedded in English law. Christie v Platt is regarded as a wrong turning brought about by sympathy in relation to a result that was patently unfair. In fact, even Lord Blanesburgh who was party with Atkin L.J. to the decision in Christie v Platt, admitted in Medway Oil that Christie v Platt had fundamentally misunderstood the Saner v Bilton rule and stated that now that he had had further time for consideration, that rule appeared preferable to the substitute of apportionment proposed in Christie v Platt. He also noted that in any case where the Saner v Bilton rule appeared likely to result in injustice, the court would have the power to give special directions which could vary the rule.

[29] It follows from what I have said above that the AR was correct in applying the Medway principles.

[31] As I stated above, the plaintiff had claimed the return of money paid by mistake. The plaintiff’s case was that he had paid these sums because he thought he had a liability as guarantor for the debts of his companies. Woo J (see Ding Leng Kong v Mok Kwong Yue & Others [2003] 4 SLR(R) 637) had, however, held that he was not a guarantor. Therefore, the plaintiff said, he had been operating under a mistake of law when he made the payments and the moneys should be returned by the defendant. There were three sums involved: $240,000, $519,000 and RM200,000. The plaintiff obtained summary judgment for the first of these amounts and therefore only the second and third amounts claimed were before me when the matters came on for trial.

[32] The defendant raised the following defences:

(a) The sums of $519,000 and RM200,000 had been paid towards the satisfaction of trade debts and not by reason of a mistake.

(b) At the time of payment, the plaintiff had said he wanted to settle all debts and since no specific debts had been mentioned, the defendant appropriated the payments towards the settlement of the trade debts and the plaintiff could not recover them.

(c) The plaintiff was estopped from recovering the sums on various factual grounds.

(d) The plaintiff was estopped from recovering the sums by reason of res judicata.

(e) The defendant was entitled to set off the sums claimed by way of counterclaim and the defendant counterclaimed the sum of $240,000 and the sum of US$381,450.02 as being the trade debts owing to him.

[33] It can be seen that most of the issues raised by the defence related to the claim. The counterclaim itself arose out of one of the defences, ie, that the plaintiff owed the defendant the trade debts and had paid the sums towards settlement of the same. The counterclaim also arose in connection with the defence because part of the defence was that the plaintiff had agreed to his payments being appropriated to pay the trade debts. The counterclaim was filed to obtain judgment for the trade debts so that the sums claimed by the plaintiff could, if the plaintiff succeeded, be set off against them.