How Weng Fan and others v Pasir Ris-Punggol Town Council

This was the Court of Appeal's decision on the costs of five appeals (Civil Appeals Nos 196, 197, 198, 199 and 200 of 2019) arising from Suit Nos 668 and 716 of 2017, brought by Aljunied-Hougang Town Council (AHTC) and Pasir Ris-Punggol Town Council against town councillors Ms Sylvia Lim, Mr Low Thia Khiang, Mr Pritam Singh, Mr Chua Zhi Hon and Mr Kenneth Foo, against senior employees Ms How Weng Fan and the late Mr Danny Loh (through his estate), and against FM Solutions & Services Pte Ltd (FMSS). Sengkang Town Council (STC) was the respondent in CA 196 and CA 198 and the appellant in CA 200.

In its earlier judgment and supplementary judgment, the court reversed many of the trial judge's findings. It held that the councillors and employees owed AHTC no fiduciary duties and acted in good faith in the award of the contracts, but found certain of them negligent, to the level of gross negligence, for control failures in AHTC's payment system, and found Ms Lim negligent over a contract awarded to Red-Power. CA 196 to CA 199 were allowed in part and STC's CA 200 was dismissed. The parties then made written submissions on costs. AHTC said it was the successful party; STC accepted it should pay costs but sought a single costs order and discounts; the councillors sought a certificate allowing costs for three counsel.

1. Whether the councillors, employees and FMSS were the successful parties entitled to costs
2. Whether a certificate for more than two solicitors should be granted to the councillors
3. Whether STC should face a single costs order or separate orders for each separately represented group
4. What quantum of costs and disbursements was appropriate for each appeal

Costs follow the event, and where neither side wins outright the court asks who in substance won. Most of the issues, including fiduciary duties, the meaning of s 52 of the Town Councils Act and good faith in awarding the contracts, went against the town councils, and only the control-failure claims and a small part of another issue proceeded to assessment. So the councillors, employees and FMSS had substantially succeeded, and AHTC's claim to be the winning party was rejected.

A certificate for three counsel is exceptional. It was granted for CA 198 and CA 199 because the appeals raised complex questions on whether public servants also owe private law duties, before a five-judge bench, with 206 bundles totalling 52,694 pages and very high stakes. It was refused for CA 200, a confined appeal on causation that largely fell away and was partly withdrawn.

Separate representation was reasonable. The councillors and employees ran different arguments, held different positions (some councillors were elected MPs facing political consequences), and faced partly different claims, so separate costs orders were made against both councils.

On quantum, the court applied a 50% uplift for the third counsel, a 25% discount for overlap between the STC and AHTC appeals, and a 15% discount for issues lost, and split the costs 45:55 between STC and AHTC, as STC had been more successful and AHTC's case raised an unpleaded-claim issue. STC's further overlap discount was rejected. For CA 200 the court took the mean of the two estimates and applied a 5% discount for the late partial withdrawal.

The court ordered costs against the town councils: STC to pay the employees and FMSS $51,637.50 plus disbursements of $4,444.27 for CA 196; AHTC to pay them $63,112.50 plus $5,431.88 for CA 197; STC to pay the councillors $78,532.03 plus $9,583.48 for CA 198; AHTC to pay the councillors $95,983.59 plus $11,713.14 for CA 199; and for CA 200, STC to pay Ms Lim and Mr Low $31,350 plus $3,539.04 and the employees $31,350 plus $2,105.20. STC's security for CA 200 was to be divided equally between those two groups.