Ong Jane Rebecca v Lim Lie Hoa and Others

[3] After the AR had given her decision on the Credit Card Disbursements on 14 May 2007, Norman filed an affidavit on 11 June 2007 whereby he testified that he had never at any point reached an agreement with the plaintiff that would exonerate her from repaying him the sums incurred by her under the supplementary card. Norman further testified in his affidavit that the plaintiff has so far repaid him all the Credit Card Disbursements save for the sum of £24,962.62 (“the remaining debt”). Norman’s affidavit was, however, not admitted as evidence by the AR at the next taxation hearing on 4 July 2007. The first defendant argued at the hearing that, notwithstanding Norman’s affidavit, no proof of debt had been filed in respect of the claim by Norman in the plaintiff’s Individual Voluntary Arrangement (“IVA”) in UK and both the “Claim” and “Agreed Claim” columns in the plaintiff’s IVA statement reflected “£0.00”. An IVA is a scheme of arrangement made under the UK insolvency law. The AR agreed that the remaining debt was not proved in the plaintiff’s IVA in UK. In the AR’s own words:

The AR (relying on the authority of Braga v Braga [1949] SLR 52 (“Braga”)) also took the view, in respect of the remaining debt, that liability to repay (in contrast to an expense actually paid out by a party) is insufficient to constitute a proper disbursement that could be recovered under taxation. Thus, the AR declined to change her decision on the Credit Card Disbursements.

[4] Before me, the plaintiff argued that the AR was wrong to have rejected Norman’s clear evidence. The plaintiff also sought leave to adduce letters from the plaintiff’s IVA supervisors (leave to adduce such evidence below was denied) so as to explain the significance of the “Claim” and “Agreed Claim” columns in the plaintiff’s IVA statement and to explain that although no proof of debt has been filed by Norman, he is, nevertheless, entitled to make a claim later when there are sufficient funds to enable a distribution to the plaintiff’s creditors. The plaintiff also took issue with the AR’s definition of “disbursement” for the purposes of taxation and argued that “disbursement” is not limited to actual payment or expenditure, but should include a loan or debt.

[5] Leaving aside the question of the definition of “disbursement” (which I will deal with later at [10], and, in any event, has no bearing on the Credit Card Disbursements) and considering the evidence before me on the whole, I am of the view that the AR’s order on the Credit Card Disbursements should not be disturbed, and I do not think that granting the plaintiff leave to adduce the letters from the plaintiff’s IVA supervisors will make a difference to this outcome (and accordingly, leave is disallowed). The bottom line remains that Norman has not filed a proof of debt in respect of the remaining debt, and if he was indeed bent on recovering all the Credit Card Disbursements from the plaintiff, he would have done so. Further, there is only a bare assertion from Norman that the plaintiff has so far repaid him £108,629.58 out of the Credit Card Disbursements. He has not exhibited any cheque or evidence in his affidavit to show how the alleged payment of £108,629.58 was made to him and when they were made to him. I find it puzzling how the plaintiff, in the first place, managed to secure funds to repay Norman, given that she is under the IVA regime in UK. It seems more probable than not that Norman was prepared to pay for all the plaintiff’s expenses incurred on the supplementary card, especially since he had allowed her a free hand in chalking up huge expenses on the supplementary card. Given the lack of evidence that the plaintiff had paid for all the Credit Card Disbursements, I would agree with the AR’s decision to disallow these 96 items.

[7] The plaintiff did not produce the relevant court order or notes of evidence to prove Lai J’s decision. However, in principle, I do not see why air miles cannot be a proper disbursement that could be recovered in taxation. There is no reason why a plaintiff who pays for an airplane ticket should be better off (in taxation) than one who decides to redeem an airplane ticket using his or her air miles for whatever reason (be it that he or she was out of funds at the material time or just wanted to save some money). However, during the hearing of the review before me, it transpired that the air miles used to redeem the air ticket, although belonging in name to the plaintiff, were accumulated through the use of the supplementary card given by Norman to the plaintiff. In consequence, I do not think that item 110 should be allowed.

[8] In regard of the other items that the plaintiff claimed that should have been allowed by the AR (or should have been allowed in full and not discounted), the plaintiff made mostly bare assertions that these items were wrongly disallowed or discounted. From her grounds of decision, I am of the view that the AR has addressed her mind to all the relevant considerations in deciding to disallow or to discount these items. As such, I see no reason to disturb the AR’s order in respect of these items.

Order 59 r 24(1)(c) and the above passage from Braga only require disbursements to be “made” before they can be claimed in taxation, but do not go as far as to define what “disbursement” is and whether the word includes an outstanding debt incurred by a party. If “disbursement” is wide enough to include an outstanding debt that is payable, then such debt actually incurred by a successful litigant can be said to be a disbursement that has been “made”. Thus, the question is whether “disbursement” can include an outstanding debt. Counsel for both parties agreed that there is no statutory definition of “disbursement” (O 57 r 1(1) merely provides that ““costs” includes fees, charges, disbursements, expenses and remunerations”) and it appears that no local case has construed “disbursement” for the purposes of taxation. As such, both counsel cited numerous dictionary definitions of “disbursement” in support of their contentions. It seems to me, based on these definitions, that the word “disbursement” has a rather wide meaning. The meaning of “disbursement” was examined by the Untied States Court of Appeal for the Eleventh Circuit in Cash Cow v US Trustee 296 F.3d 1261, which is a case cited by the plaintiff. In that case, the court was trying to construe the meaning of “disbursement” under 28 U.S.C. § 1930(a)(6). In doing so, the court discussed the meaning of “disbursement” in general, and the comments of the court in this regard are helpful; the court, after considering nine dictionaries and their definitions of “disbursement” took the view that the word “disbursement” was wide enough to include loans (at 1263-1264):

[15] In conclusion, I affirm the AR’s decision below.