Case Details
- Citation: [2021] SGCA 57
- Court: Court of Appeal of the Republic of Singapore
- Decision Date: 24 May 2021
- Court of Appeal Case Number: Civil Appeal No 113 of 2020
- Judges: Judith Prakash JCA; Steven Chong JCA; Belinda Ang Saw Ean JAD
- Parties (Appellants): Crest Capital Asia Pte Ltd; Crest Catalyst Equity Pte Ltd; The Enterprise Fund III Ltd; VMF3 Ltd; Value Monetization III Ltd
- Parties (Respondents): OUE Lippo Healthcare Ltd (formerly known as International Healthway Corp Ltd); IHC Medical Re Pte Ltd
- Representing Counsel for Appellants (1st to 3rd): Tan Chee Meng SC, Chng Zi Zhao Joel, Leo Zhen Wei Lionel, Wong Zheng Hui Daryl and Li Yiling Eden (WongPartnership LLP)
- Representing Counsel for Appellants (4th and 5th): Toby Landau QC (instructed), Tham Lijing and Rachel Low Tze-Lynn (Tham Lijing LLC)
- Representing Counsel for Respondents: Lee Eng Beng SC, Cheng Wai Yuen Mark, Chow Chao Wu Jansen, Sasha Anselm Gonsalves and Dawn Seow (Rajah & Tann Singapore LLP)
- Legal Areas: Civil Procedure — Costs; Civil Procedure — Judgment and orders
- Procedural Context: The appeal concerned two consequential matters arising after the Court of Appeal’s earlier decision in Crest Capital Asia Pte Ltd and others v OUE Lippo Healthcare Ltd and another and other appeals [2021] SGCA 25 (“the Appeal Judgment”).
- Key Issues Framed by the Court: (1) Whether sums paid by VMIII after first instance should be restored to VMIII following the success of VMF3 and VMIII’s appeals; (2) how costs should be ordered in relation to the respondents’ claims against VMF3 and VMIII at first instance and on appeal.
- Judgment Length: 11 pages, 6,015 words
Summary
This Court of Appeal decision addresses two post-judgment issues that arose after the court had allowed the appeals of VMF3 and VMIII but dismissed the appeals of the other Crest Entities. The judgment is therefore not a re-litigation of liability; rather, it focuses on the consequences of payments and the appropriate allocation of costs in a multi-principal, joint-and-several liability setting.
On the first issue (the “Consequential Order Issue”), the court declined to order the respondents to restore to VMIII the approximately $10.3m that VMIII had paid to satisfy the judgment sum and interest. The court held that the payment was made to discharge the indivisible judgment debt arising from the joint and several liability of all the Crest Entities. As a result, VMIII’s remedy was not restitution from the respondents, but reimbursement from the other Crest Entities.
On the second issue (the “Costs Issue”), the court upheld the first instance costs order and directed that VMIII should seek reimbursement of costs from the other Crest Entities. For costs on appeal, the respondents were ordered to pay VMF3 and VMIII fixed costs of $30,000 inclusive of disbursements, reflecting the limited grounds on which their appeals succeeded.
What Were the Facts of This Case?
The underlying dispute involved claims by the respondents against multiple Crest Entities, with the trial court finding that the Crest Entities were jointly and severally liable (along with others) to the respondents for a judgment sum of approximately $12.6m. After judgment, the respondents’ solicitors wrote to the Crest Entities demanding payment by late July 2020. The Crest Entities filed an appeal and initially applied for a stay of execution, but the stay application was withdrawn.
In early August 2020, the respondents commenced enforcement proceedings against the Crest Entities. On 18 August 2020, Tham Lijing LLC took over as solicitor for VMF3 and VMIII from WongPartnership LLP. Subsequently, WongPartnership proposed to the respondents’ solicitors, R&T, that the judgment sum be paid in three instalments in return for a stay of the enforcement proceedings. This proposal was agreed by all the Crest Entities on 29 August 2020.
Following this arrangement, VMIII paid approximately $10.3m to the respondents. The payment was made to satisfy the judgment debt and the interest accruing thereon. After VMF3’s and VMIII’s appeals were allowed in the earlier Appeal Judgment, Tham Lijing LLC demanded repayment from the respondents, with interest. The respondents refused, prompting the present application/appeal concerning the consequential restitutionary relief and costs.
Crucially, the court emphasised that the Crest Entities were represented by the same legal team at relevant times, and that the legal consequences of payments made under joint and several liability can be unintentionally distorted if the court treats all principals as if they were in the same position. The present decision therefore examines the intended purpose of VMIII’s payment and the proper allocation of reimbursement and costs among the Crest Entities.
What Were the Key Legal Issues?
The Court of Appeal identified two issues. First, it considered whether VMIII was entitled to a consequential order requiring the respondents to restore the sums VMIII had paid (about $10.3m) together with interest, after VMF3 and VMIII succeeded on appeal. This issue required the court to determine the legal character of the payment and whether the restitutionary “unravelling” principle applies in the circumstances.
Second, the court addressed the “Costs Issue”: how costs should be ordered in relation to the respondents’ claims against VMF3 and VMIII, both at first instance and on appeal. This required the court to consider the effect of the earlier Appeal Judgment and the extent to which VMF3 and VMIII’s success should translate into cost recovery from the respondents, as opposed to reimbursement from other Crest Entities.
Underlying both issues was a practical and doctrinal question: when multiple principals are jointly and severally liable and one principal pays the judgment debt to discharge the entire indivisible liability, what is the correct legal route for that paying principal to recover funds after part of the judgment is overturned on appeal?
How Did the Court Analyse the Issues?
The court began by explaining the restitutionary rule for payments made under a judgment that is subsequently reversed. It noted that the restitutionary principle is often described as requiring the appellate court to direct the respondent to restore money paid or property transferred under the original order. However, the court also clarified that the restitutionary rule is best understood as a procedural mechanism designed to reduce the risk of judicial error and to undo the practical consequences of the lower court’s order when that order is reversed. The court drew on Goff & Jones and the reasoning attributed to Lord Nicholls in Nykredit Mortgage Bank PLC v Edward Erdman Group Ltd (formerly Edward Erdman (an unlimited company)).
Importantly, the court did not treat the restitutionary rule as purely an unjust enrichment doctrine. Even though unjust enrichment principles are sometimes invoked in restitutionary contexts, the court reasoned that the restitutionary rule can be rationalised as a rule of judicial policy: a practical instrument through which the court unravels the consequences of the orders made by the courts below and carried out by the unsuccessful party. The court stated that, on the facts, the outcome would be the same whether the restitutionary rule is premised on judicial policy or on unjust enrichment.
Turning to the Consequential Order Issue, the court focused on the purpose of VMIII’s $10.3m payment. It posed a conditional analysis: if the payment had been intended to discharge only VMIII’s liability, then restoring the money to VMIII would be straightforward and fair because it would reverse the erroneous finding that VMIII was liable. But if the payment was intended to discharge all of the Crest Entities’ liability, then restoration to VMIII would be problematic because it would effectively reverse a correct finding—namely, that certain Crest Entities (Crest Capital, Crest Catalyst and EFIII) remained liable and had not succeeded on appeal.
The court accepted the respondents’ central factual contention: the $10.3m was not paid only on behalf of VMIII or only to discharge VMIII’s liability. There was no evidence that the payment was made in exchange for a stay limited only to VMF3 and VMIII. Instead, the correspondence and the agreed arrangement showed that the payment was made on behalf of all the Crest Entities, and the respondents received it on that basis. The court therefore treated VMIII’s payment as discharging the indivisible judgment debt arising from joint and several liability.
On that basis, the court held that VMIII should not obtain restitution from the respondents. The court reasoned that VMIII’s payment was meant to discharge the joint and several liability of the same indivisible judgment debt for all the Crest Entities. Accordingly, VMIII’s proper remedy was to seek reimbursement from the other Crest Entities that were still liable. This approach also aligned with the respondents’ submission that, in a joint and several liability context, contribution or reimbursement among judgment debtors is the appropriate mechanism rather than shifting the burden back onto the respondents after partial success on appeal.
The court also addressed the respondents’ additional arguments. It noted that the alleged contract and the absence of an express refund term were relevant to the respondents’ position, though the court’s ultimate reasoning turned primarily on the intended scope of the payment and the indivisible nature of the judgment debt. The court further considered fairness concerns: ordering repayment by the respondents would risk leaving the respondents with an unsatisfied judgment debt against the other Crest Entities, despite the fact that the respondents had proceeded on the basis that the judgment sum had been satisfied in full.
With respect to the Costs Issue, the court upheld the first instance costs order. It reasoned that, since VMIII’s payment and costs were made on behalf of all the Crest Entities, VMIII should seek reimbursement of those costs from Crest Capital, Crest Catalyst and EFIII. This reflected the same underlying logic as the Consequential Order Issue: the court did not allow VMIII to reallocate the financial consequences of joint and several liability onto the respondents where the respondents’ liability had not been overturned.
On appeal costs, however, the court made a more tailored order. It ordered the respondents to pay VMF3 and VMIII fixed costs of $30,000 inclusive of disbursements. The court explained that this reflected the limited ground on which their appeals succeeded. In other words, while VMF3 and VMIII were entitled to some costs recovery from the respondents for their partial appellate success, the court did not disturb the broader reimbursement logic among the Crest Entities for the costs that were incurred in discharging the joint and several liability.
What Was the Outcome?
The Court of Appeal dismissed VMF3 and VMIII’s request for a consequential order requiring the respondents to restore the $10.3m paid by VMIII, together with interest. The court held that VMIII’s payment was intended to discharge the joint and several liability of all the Crest Entities for the indivisible judgment debt. Therefore, VMIII’s remedy lay in seeking reimbursement from the other Crest Entities rather than restitution from the respondents.
On costs, the court upheld the first instance costs order and directed that VMIII should seek reimbursement of costs from Crest Capital, Crest Catalyst and EFIII. For costs on appeal, the respondents were ordered to pay VMF3 and VMIII fixed costs of $30,000 inclusive of disbursements, reflecting the limited success on appeal.
Why Does This Case Matter?
This decision is significant for practitioners dealing with appellate outcomes in multi-party litigation, particularly where joint and several liability is involved. It clarifies that the restitutionary “unravelling” principle is not automatic in every case where an appellant succeeds. The court will examine the purpose and scope of the payment made under the lower court’s judgment, and whether restoration would undermine the parts of the judgment that were correctly upheld.
From a procedural and strategic standpoint, the case highlights the importance of distinguishing between different principals represented by the same solicitors. The court reiterated that separate factual inquiries are essential to avoid unintended consequences—especially in post-judgment scenarios where one principal pays the full judgment debt in discharge of joint and several liability. Lawyers should therefore consider documenting the intended scope of any payment arrangements and the basis on which stays or enforcement withdrawals are agreed.
For costs, the decision provides a structured approach: where a paying principal discharges an indivisible judgment debt on behalf of multiple jointly and severally liable parties, reimbursement among those parties will often be the appropriate remedy. At the same time, partial appellate success can still justify a limited costs order against the respondents, but the extent of that recovery will depend on the grounds on which the appeal succeeded.
Legislation Referenced
- Not specified in the provided judgment extract.
Cases Cited
- [2001] SGHC 19
- [2009] SGHC 248
- [2021] SGCA 25
- [2021] SGCA 57
- Nykredit Mortgage Bank PLC v Edward Erdman Group Ltd (formerly Edward Erdman (an unlimited company)) [1997] 1 WLR 1627
- Charles Mitchell, Paul Mitchell and Stephen Watterson, Goff & Jones: The Law of Unjust Enrichment (Sweet & Maxwell, 9th Ed, 2016) (cited for the restitutionary principle)
Source Documents
This article analyses [2021] SGCA 57 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.