What did Transpac Investments Ltd v TIH Ltd [2024] SGHC(I) 30 decide?

Sir Henry Bernard Eder IJ resolved the two outstanding issues following the main judgment, namely Transpac's claims for costs and disbursements and for pre-judgment interest, after the court had earlier granted judgment for Transpac against TIH in [2024] SGHC(I) 23.

How are costs assessed for proceedings transferred to the SICC?

The judgment distinguished pre-transfer costs from post-transfer costs. Appendix G of the Supreme Court Practice Directions 2021 was accepted as a guide for pre-transfer costs, citing Lao Holdings NV v Government of Laos [2023] 4 SLR 77 and CBX v CBZ [2022] 1 SLR 88.

[2024] SGHC(I) 30 — Transpac Investments Limited v TIH Limited

SUPREME COURT OF SINGAPORE

18 October 2024

Case summary

Transpac Investments Ltd v TIH Ltd [2024] SGHC(I) 30
Originating Application No 8 of 2023

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Judgment of the Singapore International Commercial Court (delivered by Justice Sir Henry Bernard Eder):

Outcome: A Judge of the Singapore International Commercial Court ordered costs and disbursements of $790,500 to be paid by the defendant to the claimant and declined to award any pre-judgment interest.

Pertinent and significant points of the decision

• The court did not see any basis to support the claimant’s argument for mechanistically adding together the tariffs in Appendix G of the Supreme Court Practice Directions 2021 for both commercial matters and equity and trusts matters, such as to arrive at an indicative costs range of between $10,000 and $32,000 for party-and-party costs for matters that are settled before trial at the pleadings stage in the General Division of the High Court: at [6(b)] and [9].

• While it is open to the court to apply an uplift on the Appendix G costs in appropriate circumstances, this case was still at a relatively early stage when it was transferred to the Singapore International Commercial Court (“SICC”). The uplift ordered by courts in other complex precedents were also fairly modest and the court did not see a reason to award a higher uplift in this case: at [9].

• Whilst the figures given by the parties in their Case Management Plan filed before trial are not determinative or binding on costs, they are nevertheless a potentially relevant factor to be taken into account: at [17(f)].

Background

1 The Singapore International Commercial Court rendered judgment in favour of the claimant (“TIL”) against the defendant (“TIH”) on 20 August 2024 in SIC/OA 8/2023 (the “Suit”), holding that an “account closure event” falling within a clause of an agreement regulating the operation of a bond account (the “Bond Account”) had occurred. Thus, TIL was entitled to give notice to the custodian of the Bond Account that the account should be closed and the moneys therein (the “Bond Amount”) returned to TIL. The judgment was published as Transpac Investments Ltd v TIH Ltd [2024] SGHC(I) 23 (the “Judgment”). The two outstanding issues concern: (a) TIL’s claim for costs and disbursements; and (b) TIL’s claim for interest.

Decision

Costs

2 It was not disputed that a distinction had to be drawn between costs incurred before the transfer of the Suit to the SICC (“pre-transfer costs”) and costs incurred after the transfer of the Suit to the SICC (“post-transfer costs”). Appendix G of the Supreme Court Practice Directions 2021 (“Appendix G”) would continue to be a guide for the assessment of pre-transfer costs. With regard to post-transfer costs, a successful party is entitled to costs and the quantum of the costs award will generally reflect the costs incurred by the party entitled to costs, subject to principles of proportionality and reasonableness: at [2].

Pre-transfer costs

3 The court did not see any basis to support TIL’s argument for mechanistically adding together the tariffs in Appendix G for both commercial matters and equity and trusts matters, such as to arrive at an indicative costs range of between $10,000 and $32,000 for party-and-party costs for matters that are settled before trial at the pleadings stage in the General Division of the High Court: at [6(b)] and [9].

4 While it is open to the court to apply an uplift on the Appendix G costs in appropriate circumstances, this case was still at a relatively early stage when it was transferred to the SICC. The uplift ordered by courts in other complex precedents were also fairly modest and the court did not see a reason to award a higher uplift in this case: at [9].

5 The court allowed $20,000 (all-in) in respect of pre-transfer costs: at [10].

Post-transfer costs

6 There is no doubt that TIL is properly to be regarded as the overall successful party: at [12].

7 The litigation raised complex and substantial issues of both law and fact (the latter requiring consideration of relevant events over an extended period). In light of that fact and that the amount in dispute was in excess of US$10m, it cannot be said that the costs incurred were disproportionate: at [14].

8 While the court recognised the force of TIH’s reference to the Guide to the Assessment of Costs in the Singapore International Commercial Court and the reference there made to a number of other costs awards previously made in the SICC, ultimately each case must turn on its facts: at [17(a)].

9 The court rejected TIH’s submission that this case did not involve any particular difficulty or novelty. TIH had raised a plethora of difficult points of law (both Singapore law and Chinese law) and fact which were far from straightforward: at [17(b)].

10 Both sets of solicitors for the parties operated with lean teams, such that it appeared to the court that there must have been at least duplication of work on both sides and that this must be taken into account: at [17(c)].

11 While it was technically true that there was no particular urgency in the case, the court understood why, after so much delay, TIL was keen to obtain a decision as soon as possible: at [17(d)].

12 Nothing turned on the point that there had been a mediation in 2023 which failed to result in a settlement: at [17(e)].

13 Both TIL’s and TIH’s costs estimate in the Case Management Plan dated 21 July 2023 of the overall costs if the matter proceeded to trial on the merits was $750,000 (excluding disbursements); and, although such estimates were not determinative or binding on costs, they were nevertheless a potentially relevant factor to be taken into account: at [17(f)].

14 The court had rejected, amongst other things, two significant parts of TIL’s case. Although one of these parts did not take up much time, the other involved a significant amount of time and therefore costs. While there was force in TIH’s submission that this should be reflected in a significant reduction in costs including the disallowance of the entirety of the expert’s fees that, on the basis of the Judgment, went solely to one of the rejected parts of TIL’s case, the counter-arguments were that: (a) if TIH had not sought to challenge that part of TIL’s case which TIL succeeded on, the whole trial would have been unnecessary; and (b) in relation to one of the aforementioned parts of TIL’s case which was rejected by the court, TIL succeeded on a substantial sub-issue in relation to Chinese law. These factors need to be taken into account and reflected in the award of costs: at [17(g)].

15 Bearing the aforementioned principles in mind, the court examined various line items in TIL’s costs submissions, and disallowed the entirety or parts of certain sums claimed as excessive and unreasonable. The court reduced the sum claimed by approximately $364,625 and therefore allowed the sum of $635,375 for post-transfer costs. To this sum, the court allowed the further sum claimed by TIL of $15,000 in respect of TIH’s application for a stay of enforcement which was withdrawn by TIH at a late stage – making a total (with some small rounding) of $650,500: at [18] and [19].

Disbursements

16 The work done by TIL’s expert, Mr Huang, appeared from the face of his reports which were thorough and careful. Given that work, his fees were perhaps somewhat modest. The court allowed those expert fees in full: at [21].

17 There was some force in TIH’s submission that certain disbursements claimed by TIL were “entirely opaque”. However, these concern three relatively small sums totalling approximately $16,000. In the circumstances, the court reduced the total amount claimed in respect of these sums by approximately $8,000 and ultimately allowed disbursements in the sum of $155,000: at [22] and [23].

Conclusion on costs

18 The court assessed the costs payable by TIH to TIL in the total sum of $650,500 + $155,000, ie, $805,500 including disbursements. From that sum, the court deducted the sum of $35,000 (all-in) to be paid by TIL to TIH after considering and netting off sums due (if any) in respect of various interlocutory matters. TIH must pay to TIL the net sum of $790,500 (taking into account pre-transfer costs, post-transfer costs and disbursements, but excluding goods and service tax (where applicable)), such sum to be paid within 14 days of the date of the Judgment together with simple interest at 5.33% per annum from that date until payment: at [24] and [25].

Pre-judgment interest

19 TIL accepted that the court retained the discretion whether to award pre-judgment interest at all, what the interest rate should be, what proportion of the sum should bear interest and the period for which interest should be awarded: Grains and Industrial Products Trading Pte Ltd v Bank of India and another [2016] 3 SLR 1308 at [138]: at [26].

20 The court rejected TIH’s argument that because its insistence on the maintenance of the Bond Account in which TIL’s moneys were deposited was done in good faith, it cannot be said that TIL was “wrongfully” kept out of its money. This argument was irrelevant in the face of the court’s conclusion that there was an event on 29 December 2015 that triggered the closure of the account and the money ought to have been returned to TIL then: at [32].

21 There was much force in TIH’s argument that TIL was not kept out of its money since it was contractually entitled to, and did in fact, invest the Bond Amount in funds managed or recommended by Bank Pictet. There was also no evidence as to specifically what TIL might otherwise have done with this fund: at [33].

22 There was much force in TIH’s submission that it did not have use of the Bond Amount: the Bond Amount was at all times TIL’s; and TIL was entitled to all income from investments made in the Bond Account, such that the primary bases for an award of pre-judgment interest were not satisfied: at [34].

23 There was also much force in TIH’s submission that if pre-judgment interest was awarded, this would be tantamount to double recovery. TIH argued that pre-judgment interest was not awarded for the purposes of improving the successful claimant’s returns from its own investments of its own funds; that, put another way – a claimant was not entitled to retrospectively choose the higher of two returns – the actual return made by it on its own investments or 5.33%; that pre-judgment interest did not amount to a guarantee of minimum investment returns; and that there was no evidence of what products were made available to TIL by Bank Pictet or the returns that would have been earned if TIL had chosen products other than those it chose to invest in; and similarly there was no evidence on what investments (or returns) TIL would have made if the funds were not kept in the Bond Account: at [35].

24 TIL also delayed commencing the present proceedings for many years. Bearing all the circumstances and arguments in mind, the court exercised its discretion and declined to award any pre-judgment interest: at [36] and [37].

This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.

Transpac Investments Limited v TIH Limited

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Summary

What did Transpac Investments Ltd v TIH Ltd [2024] SGHC(I) 30 decide?

How are costs assessed for proceedings transferred to the SICC?

Cases Cited (10)

Judgment