Ng Eng Ghee and Others v Mamata Kapildev Dave and Others (Horizon Partners Pte Ltd, intervener) and Another Appeal

V K Rajah JA (delivering the judgment of the court):

[3] The material facts have been fully elaborated in our judgment in Ng Eng Ghee, and we need not repeat them in the present judgment in full. For ease of reference, in this judgment, we shall adopt the same references to the parties that we had earlier employed in Ng Eng Ghee. Needless to say, the present judgment and Ng Eng Ghee ought to be read together as the present judgment is the corollary of Ng Eng Ghee. For present purposes, however, it should be recalled that the identity of the applicants for the collective sale had changed twice in the course of the Strata Titles Board (“the Horizon Board”) proceedings (in July to August 2007 (“the First Tranche”) and October to November 2007 (“the Second Tranche”) (collectively referred to as “the Horizon Board proceedings”) before the respondents in the Appeals were substituted for the earlier applicants in the application for the collective sale. For this reason, we will refer to the earlier applicants for the collective sale as “the majority owners”. Where, from time to time, we intend to refer to those who consented to the collective sale generally, we will use the term “consenting subsidiary proprietors”. Broadly speaking, however, both of these terms refer to the same persons.

To this we should add that the indemnity principle as applied in Singapore rests on one bedrock feature. It only extends to costs reasonably incurred and not all costs incurred. Therefore, the principle, does not, in practice, amount to a full and complete indemnity to the successful party against all the expenses to which he has incurred in relation to the proceedings (see Singapore Civil Procedure 2007 at para 59/27/5) unless this has been contractually agreed upon or if the court makes a special order in exceptional circumstances.

(a) This court has the power to award such costs on the basis of O 59 rr 2(2) and 3(2) of the Rules.

(b) The non-appealing parties expended substantial time, effort and money in building and contributing to the final success of the Appeals; eg, through the cross-examination of the applicant’s witnesses in the Horizon Board proceedings.

(c) This court’s decision in Ng Eng Ghee ([2] supra) affirmed the non-appealing parties’ position on issues that they had consistently raised in the Horizon Board proceedings and the High Court proceedings.

(d) This court’s decision in Ng Eng Ghee reversed the decisions of the Horizon Board and the High Court. It would be illogical and inequitable if those decisions (including the costs orders) were overturned only for the benefit of the objecting subsidiary proprietors who appeared before this court but not all those who appeared below. All of them shared an indivisible community of interests in the proceedings below, in that any decision regarding the collective sale order would simultaneously affect the ability of each and every one of them to retain their homes.

(e) This court should give effect to its finding of bad faith apropos the en bloc sale of Horizon Towers by compensating all those who had contributed towards the build-up of the case.

(f) The non-appealing parties should not have to suffer out-of-pocket expenses because they wanted to right a wrong done to them and their neighbours.

[9] TRC (for the respondents in the Appeals) and A&G (for the interveners) submitted that the decision of the High Court in Tan Harry v Teo Chee Yeow Aloysius [2004] 1 SLR 513 (“Aloysius (HC)”) and the decision of this court in Teo Chee Yeow Aloysius v Tan Harry [2004] 3 SLR 588 (“Aloysius (CA)”) (collectively referred to as “the Aloysius cases”) underscored an established principle of law: if a court or tribunal makes a decision affecting two or more parties, against which only one party appeals but not the others, then if the appeal is successful, the parties with overlapping interests which fail to appeal are generally not entitled to the fruits of the successful party’s appeal.

[13] This court’s power to order payment to a non-appealing party in the situation envisaged in [11] above may be found in O 59 r 4 of the Rules, which states:

This provision confers a generous power on the appellate court to deal with the costs of all the proceedings preceding an appeal.

[14] Furthermore, O 57 r 13 of the Rules provides that:

The power conferred on this court by the above would necessarily include the power to make such orders as to the costs as the High Court would be empowered to make.

To this, we would add the qualification that these observations should now be read in the context of our present costs regime that allows recovery of all costs reasonably rather then just necessarily incurred.

[26] In the present appeals (ie, the Appeals), it was not unreasonable for the appellants to engage separate counsel, given the importance of the subject matter at stake, viz, their homes, and the involved nature of the dispute. Given the emotional and sentimental attachment that people tend to form to their homes, it was quite understandable that each set of appellants chose counsel they trusted to personally manage their case, rather than simply casting their lot together with all of the other objecting subsidiary proprietors. The appellants have quite reasonably explained that they had indeed aligned themselves with other subsidiary proprietors they were familiar with and on that basis had attempted to engage common counsel where feasible. This assertion was not strenuously challenged by either the respondents or the intervener. In the circumstances, the key consideration for us in this matter would be whether there was an unnecessary duplication of work and/or wastage of time as a result of the appellants’ separate representation.

[27] Although both sets of appellants raised the issue of good faith, they had from the outset differentiated themselves in their cross-examination of witnesses and in the approaches adopted in their submissions. In particular, a not insignificant number of points we developed in Ng Eng Ghee ([2] supra) had their seeds in the cross-examination of Mr Ramesh Kannan from TKQ in the course of the Second Tranche of the Horizon Board proceedings. Not all of these points had been raised or followed up by counsel for the other objecting subsidiary proprietors. Mr Rudy Darmawan’s submissions before us (for the appellants in CA 120/2008) on the conflict of interest on the part of First Tree Properties Ltd and the members of the original sale committee who bought additional units in Horizon Towers (id at [188]–[192]) and the original sale committee’s decision at the 6 January 2007 sale committee meeting to proceed with the sale of Horizon Towers despite the erosion of the original sale committee’s estimated 80% premium (id at [193]–[195]), which were founded on the face of the facts, were also helpful and persuasive. They were quite distinct from the submissions made by HEP which were quite narrowly centred on the lack of proper disclosure and follow-up in relation to the offer from Vineyard Holdings (HK) Ltd (“Vineyard”) to purchase Horizon Towers (“the Vineyard offer”) (id at [178]–[180]).

[37] The intervener claims that its participation in the proceedings was all along “secondary” to that of the respondents. The record of proceedings indicates otherwise. It is clear from the transcripts of the High Court proceedings that the intervener took the lead in defending the Horizon Board’s decision to make an order for the collective sale. Indeed, although the intervener was not allowed to appear in the Horizon Board proceedings, it was quite apparent that the intervener was directly or indirectly influencing the majority owners in the conduct of those proceedings. Furthermore, it can be fairly said that the intervener by its conduct engendered the continuation of the dispute in the Second Tranche, the High Court proceedings and the present appeals (ie, the Appeals). It had, inter alia, filed proceedings against the majority owners in Originating Summons No 1238 of 2007 in respect of an alleged failure to fulfil their contractual obligation to obtain a collective sale order. Indeed, TRC now unequivocally asserts that:

[38] On the other hand, we note that the respondents could well have simply stood their ground and insisted that the collective sale had been aborted instead of meekly acquiescing to the intervener’s attempt to prevail on them through legal means (see Ng Eng Ghee ([2] supra) at [47]). They cannot be permitted to shirk all responsibility for their role in this matter and especially the conduct of the proceedings below.

[40] Our attention has also been drawn to another contentious issue which only surfaced after we delivered our judgment on 2 April 2009. A substantial amount of interest has accumulated on the deposit paid for the purchase of Horizon Towers. As at 6 May 2009, the amount was $1,883,087.40. In a letter to the consenting subsidiary proprietors dated 24 April 2009, the present sale committee stated it had taken legal advice from its conveyancing solicitors on the appropriate apportionment of the interest. The advice, as set out in the aforementioned letter, reads as follows:

[41] We wish to express our disappointment that the respondents’ conveyancing solicitors (who are not the same as counsel representing them in the Appeals) have failed to appreciate the clear thrust of our substantive decision as elaborated on in Ng Eng Ghee ([2] supra). Their advice has plainly failed to appreciate that the purchase consideration was paid by the intervener for all the units in Horizon Towers and not merely those owned by the consenting subsidiary proprietors. In a collective sale, the minority objecting proprietors have no choice in the sale of their flats, if all the requisite statutory conditions are met. Pending the completion of the sale, the sale committee will hold the purchase consideration (and the accrued interest) as the agent for all of the subsidiary proprietors. If completion is effected, the interest will be equitably distributed to all of them in accordance with the approved contractual arrangements. Whether or not the dissenting proprietors (or those who are not parties to the sale and purchase agreement) are entitled to enforce the agreement is irrelevant, because part of the purchase consideration was paid for their units. The conveyancing solicitors have confused beneficial rights with contractual rights. The setting aside of the sale to the respondents is also quite irrelevant, as the right to the interest is an accrued right, and not dependent on the actual performance of the sale and purchase agreement. The consenting subsidiary proprietors cannot be allowed to appropriate for themselves that portion of the interest held for the benefit of the objecting subsidiary proprietors.

[42] Thus, the interest is to be shared by all the subsidiary proprietors. The present sale committee is not entitled to decide that only the consenting subsidiary proprietors are entitled to the interest. Each subsidiary proprietor’s entitlement is to be calculated based on the share value and strata area of each unit in equal weightage as illustrated in cl 17.1(a) of the CSA (ie, on the same basis as the apportionment of the sale proceeds if a successful sale had taken place). It is entirely up to each individual objecting subsidiary proprietor to decide how he wants to deal with the proportionate amount of the interest due to him.

(a) No order as to the costs for the First Tranche of the Horizon Board Proceedings and OS 1269/2007.

(b) The appellants in CA 119/2008 (represented by HEP) are entitled to, firstly, one set of costs for the Second Tranche of the Horizon Board proceedings, to be taxed for two counsel and borne in full by the respondents; and, secondly, one set of costs for the High Court proceedings and one set of costs for CA 119/2008, each to be taxed on the basis of two counsel and borne equally by the respondents and the intervener. The appellants in CA 119/2008 are not entitled to recover any costs apropos the administrative and constitutional law arguments raised in the Horizon Board proceedings and the High Court proceedings. They are limited to recovering only 60% of the assessed costs of the aforementioned proceedings (see [28] above).

(c) The appellants in CA 120/2008 are entitled to, firstly, one set of costs for the Second Tranche of the Horizon Board proceedings, to be taxed on the basis of two counsel and borne fully by the respondents; and, secondly, one set of costs for the High Court proceedings and one set of reasonable compensatory costs for CA 120/2008, each pursuant to O 59 r 18A of the Rules and to be borne equally by the respondents and the intervener. They are limited to recovering only 80% of the assessed costs of the aforementioned proceedings (see [28] above), and the costs of the Second Tranche of the Horizon Board proceedings are to be shared equally with the non-appealing parties (see [28] above and (d) below).

(d) The non-appealing parties (ie, Then Khek Koon and Tan Kim Lian Jasmine) are entitled to, firstly, one set of costs for the Second Tranche of the Horizon Board proceedings, to be taxed on the basis of two counsel and borne fully by the respondents; and, secondly, one set of reasonable compensatory costs for the High Court proceedings pursuant to O 59 r 18A, to be borne equally by the respondents and the intervener. They are also limited to recovering only 80% of the assessed costs of the aforementioned proceedings (see [28] above), and the costs of the Second Tranche of the Horizon Board proceedings are to be shared equally with the appellants in CA 120/2008(see [28] above and (c) above).

(e) The interest on the deposit money is to be shared by all the subsidiary proprietors and each subsidiary proprietor’s entitlement is to be calculated, based on the share value and strata area of each unit in equal weightage, as illustrated in cl 17.1(a) of the CSA. It is for each individual objecting subsidiary proprietor to decide how he wants to deal with the amount paid over to him.

TRC’s letter of 25 May 2009 addressed to the Registrar, Supreme Court.