Case Details
- Citation: [2021] SGHC 33
- Title: GTMS Construction Pte Ltd v Ser Kim Koi (Chan Sau Yan (formerly trading as Chan Sau Yan Associates) and another, third parties)
- Court: High Court of the Republic of Singapore (General Division)
- Date of Decision: 10 February 2021
- Judge: Tan Siong Thye J
- Case Number: Suit No 50 of 2014
- Coram: Tan Siong Thye J
- Plaintiff/Applicant: GTMS Construction Pte Ltd
- Defendant/Respondent: Ser Kim Koi
- Third Parties: Chan Sau Yan (formerly trading as Chan Sau Yan Associates); CSYA Pte Ltd
- Legal Area: Civil Procedure — Costs
- Procedural Context: Costs decision following the release of the earlier liability judgment in GTMS Construction Pte Ltd v Ser Kim Koi [2021] SGHC 9
- Counsel for Plaintiff: Thulasidas s/o Rengasamy Suppramaniam and Mendel Yap (Ling Das & Partners)
- Counsel for Defendant: Chong Chi Chuin Christopher, Josh Samuel Tan Wensu, Chen Zhihui and Calvin Lee (Drew & Napier LLC)
- Counsel for Third Parties: Thio Shen Yi SC, Monisha Cheong, Md Noor E Adnaan and Uday Duggal (TSMP Law Corporation)
- Judgment Length: 13 pages, 6,297 words
- Statutes Referenced: Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”) — in particular O 59 rr 5, 27, and O 59 r 19 (Certificate of Three Counsel); also referenced: O 22A (cost consequences for offers to settle) and O 22A’s applicability
- Other Practice Directions Referenced: Supreme Court Practice Directions, para 77 (default interest rate)
- Related Decisions Cited: [2020] SGHC 53; [2021] SGHC 9; [2021] SGHC 33 (this decision)
Summary
GTMS Construction Pte Ltd v Ser Kim Koi [2021] SGHC 33 is a High Court decision dealing with costs after the court had already determined liability and awarded the plaintiff a substantial judgment sum. The costs application turned on whether the defendant’s conduct warranted an order for indemnity costs, and whether the third parties were entitled to recover costs—potentially on an indemnity basis—from the defendant. The court also considered whether the third parties should be granted a “Certificate of Three Counsel” under O 59 r 19 of the Rules of Court.
The court began by setting out the governing principles for costs, emphasising that indemnity costs are the exception rather than the norm and require clear justification. It relied on established authority that focuses on the high degree of unreasonableness required for indemnity costs, and that such unreasonableness may be assessed by reference to the parties’ conduct before and during the proceedings, including their approach to mediation and dispute resolution.
What Were the Facts of This Case?
The underlying dispute arose from construction-related works and alleged defects/non-compliant works, culminating in a liability judgment in GTMS Construction Pte Ltd v Ser Kim Koi [2021] SGHC 9. In that earlier judgment, the plaintiff obtained judgment for a sum of $1,103,915.48. Following the release of the liability judgment, the plaintiff wrote to the court to inquire whether interest had been included in the judgment sum. The judge clarified that interest had been inadvertently omitted and awarded interest at the default rate of 5.33% per annum on the sums due under TI25, TI26 and TI27 from the date each cause of action arose, applying the Supreme Court Practice Directions (para 77).
After the liability decision, the court directed parties to file written submissions on costs pursuant to a specific paragraph in the earlier judgment (not reproduced in the extract). A hearing was fixed for 10 February 2021 for oral submissions. The costs hearing therefore did not revisit liability; it focused on the appropriate basis of taxation (standard or indemnity) and on whether special costs-related orders should be made in favour of the plaintiff and the third parties.
The plaintiff sought indemnity costs from the defendant, advancing five main grounds. First, it alleged that the defendant conducted the case in an improper and oppressive manner by inundating the plaintiff with multiple false allegations of defects, thereby misusing judicial resources. Second, it argued that the defendant abused the judicial process by raising at trial allegations not contained in pleadings and in the defendant’s affidavits of evidence-in-chief (AEICs), and by introducing new evidence mid-trial, which allegedly caused needless escalation of costs. Third, it contended that the defendant pursued trivial claims, forcing the plaintiff to expend disproportionate time and resources. Fourth, it alleged dishonesty and lying in evidence. Fifth, it argued that unmeritorious fraud allegations were made, harming the plaintiff’s professional reputation.
The third parties adopted a similar position and sought indemnity costs from the defendant. Their submissions highlighted, among other things, the defendant’s alleged unreasonable rejection of mediation offers made in May and June 2019; the defendant’s persistence in unmeritorious conspiracy claims; and what they described as a reckless and dishonest pattern of evolving allegations. They also argued that the second third party should not have been joined because a deed of novation transferring obligations had never been signed, and that the defendant’s explanation for joining the second third party was insufficient. In the alternative, the third parties sought standard costs for defined periods, and then indemnity costs after specified dates, relying on settlement offers made by the third parties in letters dated 22 February 2017 and 5 July 2019.
What Were the Key Legal Issues?
The primary legal issue was whether the court should depart from the usual rule of standard costs and award indemnity costs. This required the court to determine whether the defendant’s conduct met the high threshold for indemnity costs under the ROC and the jurisprudence interpreting it. The court had to assess not only whether the defendant’s claims failed, but whether the defendant’s conduct was sufficiently unreasonable in the relevant sense—potentially including dishonesty or unscrupulous intent, though dishonesty was not strictly required.
A second issue concerned the third parties’ entitlement to costs, including whether costs should be ordered on an indemnity basis and whether the third parties could rely on offers to settle to shift the costs basis after certain dates. This involved questions about the applicability of the costs consequences framework in O 22A of the ROC and whether the offers relied upon were properly characterised as offers to settle.
A third issue was whether the third parties should obtain a “Certificate of Three Counsel” under O 59 r 19 of the ROC, which would allow costs for more than two solicitors to be recovered. This required the court to consider whether the case involved exceptional complexity, specialised issues, or other circumstances justifying the certificate.
How Did the Court Analyse the Issues?
The court began by identifying the applicable legal framework. Under O 59 r 27(1)(a) of the ROC, where costs are ordered to be paid by one party to another, the default position is that costs are taxed on the standard basis. However, the court retains discretion to order taxation on the indemnity basis if it appears appropriate. The court then explained the practical difference: on indemnity taxation, “all costs shall be allowed” except those that are unreasonable in amount or unreasonably incurred, and doubts as to whether costs were reasonably incurred or reasonable in amount are resolved in favour of the receiving party.
Having set out the statutory structure, the court emphasised that indemnity costs are “the exception rather than the norm” and require justification. It cited the principle that indemnity costs are awarded only in exceptional circumstances “when it is clearly just or appropriate to do so.” The court also relied on Airtrust (Hong Kong) Ltd v PH Hydraulics & Engineering Pte Ltd [2016] 5 SLR 103, where Chan Seng Onn J had observed that a focus on unreasonableness may be preferred, and that the relevant conduct must reflect a high degree of unreasonableness rather than merely being wrong or misguided in hindsight.
In applying these principles, the court treated the baseline inquiry as being anchored in O 59 r 5 of the ROC, which directs the court, in exercising its discretion on costs, to take into account the conduct of all parties, including conduct before and during the proceedings, and in particular the extent to which parties attempted to resolve the dispute by mediation or other dispute resolution. The court’s approach therefore required a holistic assessment: it was not enough for the defendant to have lost; the court had to consider how the defendant conducted the litigation and whether that conduct was so unreasonable as to justify indemnity costs.
On the plaintiff’s and third parties’ allegations, the court would have had to evaluate the evidential and procedural context behind claims such as “false allegations,” “dishonesty,” “oppressive manner,” and “abuse of process.” While the extract does not include the full reasoning beyond the principles section, the structure of the submissions indicates that the court was asked to infer a pattern of litigation misconduct from (i) alleged departures from pleadings and AEICs, (ii) mid-trial introduction of new evidence, (iii) pursuit of allegedly trivial claims, (iv) alleged fraud allegations, and (v) alleged unreasonable refusal to mediate. The court’s analysis would also have required careful attention to whether these matters were supported by the record and whether they were causally linked to unnecessary costs.
For the third parties, the court also had to address the defendant’s objections to the reliance on O 22A. The defendant argued that the costs consequences in O 22A should not apply because the offers were not offers to settle, and further argued that one letter was nullified by a later letter. This meant the court had to consider the characterisation of the offers and whether the procedural prerequisites for shifting costs under O 22A were satisfied. The court also had to consider the defendant’s argument that indemnity costs against the second third party were not warranted merely because of an ill-advised joinder, and that the third parties were effectively seeking duplicate costs where both third parties were represented by the same solicitors throughout.
Finally, on the Certificate of Three Counsel, the court would have applied the ROC framework and its underlying policy: the certificate is not automatic and is typically granted where the case is sufficiently complex or requires specialised expertise such that more than two counsel/specialists are justified. The third parties argued that specialised construction law knowledge was necessary, that significant time was expended, that there were multiple distinct claims against them requiring detailed analysis and voluminous documents, and that the matter was of great personal and professional importance. The defendant’s response was that no exceptional circumstances or novel/complex issues of law warranted the certificate, and that the third parties had not made a formal application.
What Was the Outcome?
The extract provided does not include the operative orders or the final determinations on costs. However, the decision is clearly structured as a costs judgment following the liability and interest clarification. The court’s reasoning section establishes the legal thresholds it would apply to determine whether indemnity costs were justified, and it addresses the competing positions on (i) indemnity versus standard costs, (ii) the third parties’ reliance on offers to settle and O 22A, and (iii) the request for a Certificate of Three Counsel.
Practically, the outcome would have determined the basis of taxation for costs payable by the defendant to the plaintiff and/or the third parties, the time periods (if any) after which indemnity costs would apply, and whether the third parties would be permitted to recover costs associated with more than two solicitors. For practitioners, the key value of the case lies in the court’s reaffirmation of the “exceptional circumstances” threshold for indemnity costs and its emphasis on assessing litigation conduct and mediation efforts under O 59 r 5.
Why Does This Case Matter?
GTMS Construction Pte Ltd v Ser Kim Koi [2021] SGHC 33 is significant for costs practitioners because it sits at the intersection of (a) indemnity costs and (b) the court’s assessment of conduct-based unreasonableness. The decision reiterates that indemnity costs are not a punitive mechanism for losing parties; rather, they are reserved for cases where the losing party’s conduct is sufficiently unreasonable to justify departing from the standard basis. This is consistent with the broader Singapore jurisprudence that treats indemnity costs as an exception requiring clear justification.
The case is also useful for litigators because it demonstrates how courts may evaluate allegations of procedural abuse—such as raising allegations not pleaded, introducing evidence mid-trial, and pursuing claims characterised as trivial or unmeritorious—when deciding costs consequences. Even where dishonesty is alleged, the court’s framework suggests that the inquiry is ultimately anchored in the degree of unreasonableness and the extent to which conduct increased costs unnecessarily.
For defendants and third parties, the decision is a reminder that settlement conduct and mediation efforts can be relevant to costs outcomes. The third parties’ reliance on offers to settle and the defendant’s objections under O 22A highlight that costs shifting is not automatic; parties must ensure that offers are properly framed and that the procedural and substantive requirements for costs consequences are met. Finally, the Certificate of Three Counsel request underscores that special costs orders require more than the existence of complexity; they require justification grounded in the ROC and the case’s factual demands.
Legislation Referenced
- Rules of Court (Cap 322, R 5, 2014 Rev Ed) — O 59 r 5 (factors for costs discretion)
- Rules of Court (Cap 322, R 5, 2014 Rev Ed) — O 59 r 27 (basis of taxation; standard vs indemnity)
- Rules of Court (Cap 322, R 5, 2014 Rev Ed) — O 59 r 19 (Certificate of Three Counsel)
- Rules of Court (Cap 322, R 5, 2014 Rev Ed) — O 22A (cost consequences for offers to settle) (disputed applicability)
- Supreme Court Practice Directions — para 77 (default interest rate of 5.33% per annum)
Cases Cited
- Airtrust (Hong Kong) Ltd v PH Hydraulics & Engineering Pte Ltd [2016] 5 SLR 103
- GTMS Construction Pte Ltd v Ser Kim Koi [2021] SGHC 9
- [2020] SGHC 53
- [2021] SGHC 33 (this decision)
Source Documents
This article analyses [2021] SGHC 33 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.