Case Details
- Citation: [2023] SGHC(I) 12
- Title: CNA v CNB and another and other matters
- Court: Singapore International Commercial Court (“SICC”)
- Originating Summonses: SIC/OS Nos 2, 3, 4 and 5 of 2022
- Date of Judgment: 13 June 2023 (judgment reserved)
- Date of Delivery: 2 August 2023
- Judges: Philip Jeyaretnam J, Simon Thorley IJ and Yuko Miyazaki IJ
- Applicant/Plaintiff: CNA (and, in related OSes, CND and CNE)
- Respondents/Defendants: CNB and CNC
- Legal Area: Arbitration-related litigation; costs; transfer of proceedings to SICC
- Key Procedural Context: Costs following a prior SICC substantive judgment in CNA v CNB and another and other matters [2023] SGHC(I) 6
- Judgment Length: 24 pages; 5,921 words
- Core Topic of This Decision: Division and assessment of costs pre- and post-transfer, including disbursements in foreign currency
Summary
This SICC decision concerns the assessment of costs arising from multiple originating summonses in which the court had already determined the substantive disputes in favour of the defendants. Following the substantive judgment (CNA v CNB and another and other matters [2023] SGHC(I) 6), the court was left to determine the appropriate costs order, particularly how to divide and assess costs incurred before and after the transfer of the proceedings to the SICC.
The court accepted that costs should be assessed as a unitary whole between the plaintiffs and defendants, with the plaintiffs paying the defendants’ costs and disbursements in equal proportions (CNA paying 50% and CND/CNE paying the other 50%). Crucially, the court applied a structured approach to dividing costs between the pre-transfer period and the post-transfer period, relying on the defendants’ detailed costs schedule and the procedural framework set by the transfer order.
Although the plaintiffs raised concerns that the defendants’ costs were “back-loaded” into the post-transfer stage and that the costs schedule might be inaccurate, the court declined to disregard the schedule. Instead, it proceeded on the basis that the schedule accurately reflected when costs were incurred, and it moderated any excess through the applicable costs regimes, including the relevant provisions of the Rules of Court and the SICC’s approach to reasonableness for post-transfer costs.
What Were the Facts of This Case?
The litigation comprised several originating summonses: SIC/OS No 2 of 2022 and SIC/OS No 5 of 2022 were brought by CNA against CNB and CNC, while SIC/OS Nos 3 and 4 of 2022 were brought by CND and CNE against CNB and CNC. The substantive issues were determined earlier by the SICC in the Substantive Judgment, where the court found in favour of the defendants on all the summonses and directed that the parties should seek agreement on costs.
After the substantive decision, the parties reached partial agreement but could not agree fully on costs. Written submissions were filed by both sides, followed by reply submissions. The dispute in this costs judgment therefore focused not on liability but on the quantum and allocation of costs, particularly the division between costs incurred before the proceedings were transferred to the SICC and costs incurred after transfer.
Procedurally, the summonses were initially commenced in the High Court and were transferred to the SICC on 4 January 2022 by an order of a Deputy Registrar. The transfer order was pivotal: it directed that costs incurred prior to transfer should be assessed under the costs regime in O 59 r 7 of the Rules of Court (Cap 322, 2014 Rev Ed) (“ROC 2014”), while the approach to costs after transfer was reserved for determination by the SICC. This meant that the court had to apply different legal tests to pre-transfer and post-transfer costs.
In the costs submissions, the defendants produced a revised costs schedule (Annex A to their reply submissions). The schedule broke down counsel’s fees and disbursements into pre-transfer and post-transfer components. Pre-transfer, the defendants’ counsel’s fees were stated as S$266,127. Pre-transfer disbursements were S$19,553 and KRW139,742,050. Post-transfer, fees were stated as S$921,903 and disbursements as S$48,324 and KRW195,085,126. The Korean Won amounts were said to relate primarily to fees and disbursements incurred by a Korean law expert (Professor Kwon) and by KL Partners, a Korean law firm acting as Korean counsel.
What Were the Key Legal Issues?
The first key issue was how the court should divide costs between the pre-transfer and post-transfer periods. The plaintiffs did not dispute that the defendants incurred the amounts claimed, but they challenged whether the defendants had allocated too much of those costs to the post-transfer stage. Their argument relied heavily on a Costs Management Costs Plan (“CMP”) dated 7 March 2022, which estimated additional fees of S$350,000 and stated that fees incurred prior to 7 March 2022 were approximately S$850,000. The plaintiffs contended that the actual costs schedule showed a much larger post-transfer figure than anticipated, suggesting inaccuracy or unreasonable allocation.
The second issue was the legal approach to assessing pre-transfer costs versus post-transfer costs. The transfer order required pre-transfer costs to be assessed under O 59 r 7 ROC 2014, while post-transfer costs were to be assessed under the relevant SICC costs rule, identified by the parties as O 110 r 46 ROC 2014 (“Rule 46”). The court therefore had to determine what standard applied to each period and how the CMP estimates should (or should not) influence the assessment.
A third issue concerned the evidential burden and the role of costs estimates. The plaintiffs argued that the CMP should constrain the defendants from claiming excessive costs and should serve as the starting point for allocation. The defendants responded that estimates are not determinative and that the detailed costs schedule should be accepted as accurate, with any excess addressed through the applicable costs regimes and reasonableness analysis.
How Did the Court Analyse the Issues?
The court began by setting out the parties’ areas of agreement on costs. It was common ground that the plaintiffs should pay the defendants’ costs and disbursements in equal proportions, resulting in a unitary assessment where CNA pays 50% and CND/CNE pay the other 50%. It was also agreed that post-transfer costs should be assessed under Rule 46, and that the court should assess costs based on written submissions alone without an oral hearing.
On the division of costs pre- and post-transfer, the court addressed the plaintiffs’ reliance on the CMP. The plaintiffs argued that the CMP’s estimates were intended to restrain a successful litigant from claiming excessive costs, citing BLG and another v BLI and others [2018] SGHC 86 at [18]. They submitted that the defendants should be held to the CMP figures both for determining the ratio of pre- and post-transfer costs and as a baseline for assessment.
The defendants’ response was that the CMP contained an error: the CMP’s figure for costs incurred prior to 7 March 2022 inadvertently included costs attributable to a striking out application of approximately S$400,000. Correcting for that error, the defendants said the pre-7 March figure should be reduced to approximately S$450,000, which they contrasted with the S$266,127 stated in the costs schedule for pre-transfer costs up to 4 January 2022. The defendants further argued that once a detailed costs schedule is provided, reliance on estimates becomes less appropriate, and that the court should instead apply the relevant regulatory mechanisms: Appendix G of the Supreme Court Practice Directions 2013 (“Appendix G”) for pre-transfer costs and the reasonableness framework under Rule 46 for post-transfer costs.
The court then articulated the “correct approach” in the SICC context where there is a significant difference between costs actually incurred (as shown in a detailed schedule) and anticipated future costs in a CMP. The court held, first, that the detailed costs schedule should be accepted as accurate both as to the costs incurred and the date on which they were incurred, and that the burden would be on the paying party to demonstrate that the detailed costs statement is inaccurate. Second, where the paying party suggests that the costs are excessive rather than inaccurate, the court would moderate pre-transfer costs by reference to Appendix G and, if appropriate, by reference to CMP estimates. For post-transfer costs, where reasonableness is the test, the court could consider the contrast between actual costs and CMP estimates as one factor among others.
Applying this framework, the court accepted the defendants’ schedule as the basis for dividing costs. It noted that the plaintiffs’ contention that a disproportionately large amount of fees had been incorrectly allocated to post-transfer stage depended on an earlier CMP figure of S$850,000 for pre-transfer work, which had been reduced to S$450,000 once the striking out costs were excluded. The court also observed that the CMP figure was assessed as at 7 March 2022, whereas the costs schedule’s pre-transfer figure of S$266,127 was assessed up to 4 January 2022. The court considered it plausible that significant work could have been done in the intervening period, and it therefore did not treat the apparent “anomaly” as sufficient to displace the schedule.
The court also addressed the plaintiffs’ argument that the ratio of pre- to post-transfer fees (22/78%) “beggars belief” and that the work distribution implied by that ratio was implausible. The court recognised that litigation involving oral hearings—here, a three-day hearing involving two sets of plaintiffs separately represented—often results in “back-loading” of costs, with more work occurring later in the proceedings. The court further noted that it would have been assisted by a costs statement from each set of plaintiffs to demonstrate the balance between pre-transfer and post-transfer fees, referencing Senda International Capital Ltd v Kiri Industries Ltd [2023] 1 SLR 96 at [75] and [90]. The plaintiffs had been asked to provide such statements but declined.
Ultimately, the court concluded that while the plaintiffs’ submissions raised concerns, they were not sufficient to cease reliance on the schedule. It therefore proceeded on the basis that the correct division of fees pre- and post-transfer was 22/78%, derived from the costs schedule. This division then informed the subsequent assessment of pre-transfer costs under O 59 r 7 ROC 2014 and the assessment of post-transfer costs under Rule 46.
Although the extract provided is truncated after the opening of the pre-transfer assessment section, the court’s reasoning up to that point demonstrates the central methodological choice: accept the detailed schedule as accurate for allocation purposes, then apply the appropriate legal standards to determine recoverable amounts. The court’s approach reflects a balance between (i) the evidential value of detailed costs schedules and (ii) the policy behind costs estimates and regulatory controls to prevent excessive claims.
What Was the Outcome?
The court ordered that the plaintiffs pay the defendants’ costs and disbursements, assessed in accordance with the agreed unitary structure: CNA bears 50% and CND/CNE bear the remaining 50%. It also confirmed that costs incurred post-transfer would be assessed under Rule 46, while pre-transfer costs would be assessed under O 59 r 7 ROC 2014, consistent with the transfer order.
On the allocation question, the court proceeded on the basis that the defendants’ detailed costs schedule accurately reflected when costs were incurred and adopted a 22/78% division between pre-transfer and post-transfer fees. This allocation then governed the assessment of recoverable costs for each period, subject to moderation and reasonableness controls under the applicable rules.
Why Does This Case Matter?
This decision is significant for practitioners because it clarifies how the SICC will deal with disputes about the allocation of costs across procedural milestones—particularly where proceedings are transferred from the High Court to the SICC. The court’s approach provides a practical framework: accept the detailed costs schedule as the primary evidence of both quantum and timing, place the burden on the paying party to show inaccuracy, and then apply different assessment standards to pre-transfer and post-transfer costs.
From a litigation strategy perspective, the judgment underscores the limited utility of CMP estimates once a detailed costs schedule is produced, while still recognising that CMP contrasts may be relevant to reasonableness. For successful parties, the case supports the importance of preparing detailed, date-specific costs schedules that can withstand allocation challenges. For paying parties, it highlights the evidential burden: mere suspicion of “back-loading” is unlikely to displace a detailed schedule without cogent evidence, such as a comparable costs statement or other material demonstrating inaccuracy.
Finally, the decision reinforces broader costs principles in Singapore litigation: costs estimates serve a restraint function, but they do not automatically override later detailed evidence. The court’s reasoning also reflects the realities of complex litigation, where oral hearings and document-intensive work can shift the timing of costs. As such, CNA v CNB & Anor is a useful authority for both law students and practitioners dealing with costs assessment, transfer-related cost regimes, and the evidential treatment of CMPs versus detailed schedules.
Legislation Referenced
- Rules of Court (Cap 322, 2014 Rev Ed) — O 59 r 7 (pre-transfer costs assessment regime)
- Rules of Court (Cap 322, 2014 Rev Ed) — O 110 r 46 (Rule 46; post-transfer costs assessment)
- Supreme Court Practice Directions 2013 — Appendix G (regulatory framework for moderation of costs against estimates)
Cases Cited
- BLG and another v BLI and others [2018] SGHC 86
- Senda International Capital Ltd v Kiri Industries Ltd [2023] 1 SLR 96
Source Documents
This article analyses [2023] SGHCI 12 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.