Case Details
- Citation: [2017] SGHC 91
- Title: Parakou Shipping Pte Ltd (in liquidation) v Liu Cheng Chan and others
- Court: High Court of the Republic of Singapore
- Date of Decision: 25 April 2017
- Coram: Chua Lee Ming J
- Case Number: Suit No 434 of 2014 (Summons No 1040 of 2017)
- Proceedings Type: Costs decision following earlier liability judgment
- Plaintiff/Applicant: Parakou Shipping Pte Ltd (in liquidation)
- Defendants/Respondents: Liu Cheng Chan and others (1st to 6th defendants)
- Parties (as identified in the judgment extract): Parakou Shipping Pte Ltd (In Liquidation); Liu Cheng Chan; Chik Sau Kam; Liu Por; Yang Jianguo; Parakou Investment Holdings Pte Ltd; Parakou Shipmanagement Pte Ltd
- Judicial Officer: Chua Lee Ming J
- Counsel for Plaintiff: Kenneth Lim Tao Chung, Chua Xinying, Yu Kexin and Yeo Kok Quan, Nigel (Allen & Gledhill LLP)
- Counsel for 1st and 2nd Defendants: Lok Vi Ming, SC, Chan Junhao, Justin and Lee Sien Liang Joseph (LVM Law Chambers LLC)
- Counsel for 3rd and 4th Defendants: Siraj Omar and Premalatha Silwaraju (Premier Law LLC)
- Counsel for 5th and 6th Defendants: Yap Hao Jin and Joan Tee (Sim Chong LLC)
- Legal Area: Civil Procedure — Costs
- Key Procedural Context: Costs after liability judgment in Parakou Shipping Pte Ltd (In Liquidation) v Liu Cheng Chan and others [2017] SGHC 15
- Related Appeal Note: Appeals to this decision in Civil Appeals Nos 55, 56, 57 and 58 of 2017 were allowed in part by the Court of Appeal on 17 January 2018 (see [2018] SGCA 3)
- Judgment Length (as provided): 5 pages, 2,334 words
Summary
This High Court decision concerns the assessment of costs following a prior liability judgment in a complex multi-transaction dispute brought by Parakou Shipping Pte Ltd (in liquidation) against six defendants. Although the plaintiff succeeded on two major contested issues—whether the impugned transactions formed part of a restructuring plan and whether the plaintiff was insolvent at the material times—the plaintiff did not succeed on all claims against each defendant. The court therefore rejected the plaintiff’s submission that it should receive full costs as a “substantially successful” party.
In determining costs, Chua Lee Ming J emphasised fairness and proportionality: costs should not be imposed on defendants for claims that were dismissed, particularly where each impugned transaction generated separate and distinct claims. The court also declined to award a certificate for costs for three solicitors, holding that while the case was complex, it was not of the high degree of complexity warranting such an exceptional certificate. Finally, the court refused to order indemnity costs on balance, despite accepting that there were serious grounds that could have justified indemnity costs against the defendants, because the plaintiff’s own litigation approach was also relevant.
What Were the Facts of This Case?
The underlying dispute arose from allegations that the defendants orchestrated transactions designed to strip Parakou Shipping Pte Ltd of assets in anticipation of the company being placed into liquidation. The plaintiff, acting through the liquidator, brought a multitude of claims relating to each impugned transaction. The claims were not limited to one cause of action; they included allegations of breaches of fiduciary duties and/or statutory duties of care and skill, breaches of trust, liability to account as constructive trustees, lifting of the corporate veil, and claims relating to undervalued transactions.
At the liability stage, the court found each defendant liable for one or more claims. However, the plaintiff did not obtain complete success. The costs judgment makes clear that the plaintiff’s case was structured around multiple impugned transactions, and for each transaction the plaintiff advanced separate and distinct claims against each defendant. While the plaintiff prevailed on two major issues that cut across the transactions—namely, whether the transactions were part of a restructuring plan and whether the plaintiff was insolvent at the material times—there were still claims that failed against particular defendants in respect of particular transactions.
After the liability judgment, the parties returned to court specifically on costs. The plaintiff argued that it had substantially succeeded in the majority of its claims and should therefore be awarded full costs. The defendants, by contrast, accepted that the plaintiff was entitled to costs against them, but sought reductions reflecting the extent of their individual liability and the plaintiff’s lack of success on some claims. The court also had to deal with ancillary costs issues arising from interlocutory applications, including applications connected to a Mareva injunction.
In addition, the plaintiff sought a certificate for costs for more than two solicitors (specifically, three solicitors). The plaintiff’s position was that the case’s complexity warranted such a certificate. The court’s task was therefore not only to decide the appropriate overall costs order, but also to determine whether the procedural and substantive complexity met the threshold for an exceptional certificate, and whether the circumstances justified indemnity costs.
What Were the Key Legal Issues?
The first key issue was whether the plaintiff was entitled to full costs. This required the court to assess the extent of the plaintiff’s success and to determine whether the plaintiff could properly be characterised as “substantially successful” in a way that would justify awarding full costs, notwithstanding that some claims were dismissed against each defendant.
The second issue concerned the plaintiff’s application for a certificate for costs for three solicitors. Under Singapore costs practice, such certificates are exceptional and are typically granted only where the case involves a high degree of complexity of facts and/or law, or where there are many issues of fact and law and the trial is lengthy. The court had to decide whether the case met that threshold, taking into account the number of claims, the volume of documents, the overlap of issues, and the actual length of the trial.
The third issue was whether indemnity costs should be awarded. The court considered the conduct of the parties, including pre-trial and trial conduct, as relevant to the exercise of discretion on costs. The plaintiff pointed to alleged wrongdoing by the defendants (including asset stripping and fabrication of a restructuring defence). The court had to weigh those grounds against the plaintiff’s own litigation conduct, including the breadth of claims advanced indiscriminately.
How Did the Court Analyse the Issues?
1. Full costs and proportionality
Chua Lee Ming J approached the “full costs” question by focusing on fairness to the defendants and the structure of the plaintiff’s case. Although the plaintiff succeeded on two major cross-cutting issues, the court stressed that each impugned transaction generated separate and distinct claims. The plaintiff’s success on overarching issues did not automatically translate into success on every claim for every transaction against every defendant. The court considered it wrong and unfair to require defendants to pay costs for claims that were dismissed.
The court also rejected the plaintiff’s framing that it had substantially succeeded in the majority of its claims. The judge explained that even where a plaintiff substantially succeeds on a claim but fails on one or more issues argued in respect of that claim, full costs may still be inappropriate depending on which issues succeeded and which failed. This reasoning reflects a costs philosophy that is not purely outcome-based, but issue- and claim-sensitive. In other words, costs should reflect the real extent of success, not merely the fact that some major issues were decided in the plaintiff’s favour.
2. Allocation of costs among multiple defendants
Having determined that full costs were not warranted, the court then allocated costs liability among the defendants based on the extent of each defendant’s responsibility and the plaintiff’s success against them. The defendants’ positions on quantum varied: CC Liu and Chik suggested their liability should not exceed 65%; Liu Por and Yang suggested not more than 40%; PIH suggested not more than 50%; and PSMPL argued it should recover costs from the plaintiff because the plaintiff succeeded against it only on a “discrete and minor point.”
The court disagreed with PSMPL’s characterisation. It held that the plaintiff succeeded against PSMPL on the two major issues relating to restructuring and insolvency, and also succeeded on one of the impugned transactions. The court therefore fixed PSMPL’s liability for costs at 60%. For CC Liu and Chik, the court fixed liability at 90% because the plaintiff succeeded against them on several claims but failed on a few. For Liu Por and Yang, liability was fixed at 80% because the plaintiff succeeded to a lesser extent as against them. For PIH, liability was fixed at 70% given the number of impugned transactions involved and the relative success.
3. Certificate for costs for three solicitors
The court then addressed the plaintiff’s application for a certificate for costs for three solicitors. The judge reiterated that such certificates are awarded only in exceptional circumstances, such as where the case involves a high degree of complexity of facts and/or law, or where there are many issues of fact and law and the trial is lengthy. The judge accepted that the case was complex because it involved multiple claims across several impugned transactions and six defendants. There was also a significant documentary burden: voluminous discovery and core bundles comprising 19 volumes totalling 12,171 pages.
However, the court placed weight on the trial duration and the overlap of issues. The trial took about 14.5 days, including time for interlocutory matters and oral submissions. The judge considered that, although complex, the case was not of such a high degree of complexity as to warrant a certificate for three solicitors. This illustrates that Singapore courts will not treat document volume alone as determinative; the practical conduct of the trial and the degree of distinct complexity are crucial.
4. Indemnity costs and conduct
The indemnity costs analysis turned on the discretion under O 59 r 5(b) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed), which requires the court to consider the conduct of the parties, including before and during proceedings. The plaintiff identified several grounds that could justify indemnity costs, including alleged asset stripping and shifting of assets to avoid a substantial claim by a contingent creditor, alleged flagrant disregard of fiduciary duties, and the court’s finding that the restructuring defence was a fabrication.
Chua Lee Ming J accepted that these grounds could have justified indemnity costs. Nevertheless, the court also treated the plaintiff’s conduct as relevant. The judge found that the plaintiff had asserted a “whole gamut of claims” against each defendant indiscriminately rather than being more discerning about which claims could reasonably be brought against each defendant. On balance, the court concluded that indemnity costs were not appropriate. This balancing approach is significant: even where defendants’ conduct is serious, indemnity costs may still be refused if the plaintiff’s own litigation strategy contributed to unnecessary breadth or overreach.
5. Quantum of party-and-party costs
The court then assessed the quantum. The plaintiff sought $1,174,500 in party-and-party costs; the defendants submitted a range of $200,000 to $240,000. Applying proportionality and considering all relevant circumstances—including complexity, volume of documents, amount recovered, trial length, and the fact that defendants were represented by three sets of solicitors—the court fixed party-and-party costs at $600,000 (undiscounted and excluding disbursements). Disbursements were to be fixed by the court if not agreed.
6. Costs of interlocutory applications
The judgment also addressed costs arising from interlocutory applications connected to the Mareva injunction. For Summonses Nos 6150–6152 of 2014, the Mareva injunction was granted initially, but later set aside after the defendants provided sufficient alternative security. The trial judge had reserved costs to the trial judge. In the costs decision, Chua Lee Ming J ordered that each party pay its own costs for those summonses, reasoning that the Mareva was set aside only because the defendants offered sufficient alternative security.
For Summons No 2021 of 2014 (the application that led to the Mareva injunction), the court ruled that the plaintiff was not entitled to the costs of that application. The extract provided truncates the remainder of the reasoning, but the decision indicates that the court treated the ultimate outcome and the procedural history as relevant to costs entitlement, consistent with the broader approach of linking costs to success and fairness.
What Was the Outcome?
The court made several consequential costs orders. First, the 1st to 6th defendants were jointly and severally liable for the plaintiff’s costs in the action. Second, the court allocated responsibility for costs and disbursements among the defendants at different percentages: CC Liu and Chik (90%), Liu Por and Yang (80%), PIH (70%), and PSMPL (60%). Third, the plaintiff’s application for a certificate for costs for three solicitors was dismissed.
Fourth, the court fixed party-and-party costs on the standard basis at $600,000 (excluding disbursements). It also ordered that the plaintiff was not entitled to costs for its Mareva injunction application (Summons No 2021 of 2014). For the defendants’ applications to set aside or vary the Mareva injunction (Summonses Nos 6150–6152 of 2014), the court ordered that each party bear its own costs, reflecting the fact that the Mareva was set aside due to the provision of sufficient alternative security.
Why Does This Case Matter?
This case is a useful authority on how Singapore courts approach costs where a plaintiff succeeds on major issues but fails on some claims across multiple transactions and defendants. It demonstrates that “substantial success” is not a mechanical label that automatically entitles a party to full costs. Instead, the court will examine the claim-by-claim and transaction-by-transaction outcomes, and will consider fairness to defendants for costs incurred on dismissed claims.
Practitioners should also note the court’s approach to certificates for costs for more than two solicitors. The decision clarifies that exceptional certificates require more than complexity in the abstract or large documentary volume. The court will look at the overlap of issues and the actual length and conduct of the trial. This is particularly relevant for parties planning their litigation strategy and budgeting for legal representation.
Finally, the indemnity costs discussion is instructive. Even where there are strong grounds to criticise defendants’ conduct, indemnity costs may be refused if the plaintiff’s own litigation conduct is overbroad or indiscriminate. The decision therefore supports a disciplined approach to pleadings and claim selection, and it reinforces that costs outcomes can reflect not only the merits but also the parties’ procedural behaviour.
Legislation Referenced
- Rules of Court (Cap 322, R 5, 2014 Rev Ed), O 59 r 5(b)
Cases Cited
- [2017] SGHC 15
- [2017] SGHC 91
- [2018] SGCA 3
Source Documents
This article analyses [2017] SGHC 91 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.