Case Details
- Citation: [2017] SGHC 91
- Case Title: Parakou Shipping Pte Ltd (in liquidation) v Liu Cheng Chan and others
- Court: High Court of the Republic of Singapore
- Decision Date: 25 April 2017
- Judge: Chua Lee Ming J
- Coram: Chua Lee Ming J
- Case Number: Suit No 434 of 2014 (Summons No 1040 of 2017)
- Plaintiff/Applicant: Parakou Shipping Pte Ltd (in liquidation)
- Defendants/Respondents: Liu Cheng Chan and others
- Parties (as reflected in metadata): 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
- Legal Area: Civil Procedure — Costs
- Key Procedural Context: Post-trial costs determination following an earlier liability judgment: Parakou Shipping Pte Ltd (In Liquidation) v Liu Cheng Chan and others [2017] SGHC 15
- Primary Costs Applications/Issues: (i) whether plaintiff was entitled to full costs; (ii) whether a certificate for costs for more than two solicitors should be granted; (iii) whether indemnity costs should be ordered; (iv) quantum of party-and-party costs; (v) costs for interlocutory applications relating to Mareva injunction proceedings
- Judgment Length: 5 pages; 2,334 words
- Counsel for Plaintiff: Kenneth Lim Tao Chung, Chua Xinying, Yu Kexin and Yeo Kok Quan (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)
- Appeals/Editorial 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)
Summary
Parakou Shipping Pte Ltd (in liquidation) v Liu Cheng Chan and others [2017] SGHC 91 is a High Court decision focused exclusively on costs following an earlier liability judgment in the same action. After the plaintiff succeeded against the defendants on important issues—particularly whether certain transactions were part of a restructuring plan and whether the plaintiff was insolvent at material times—the plaintiff sought full costs on the basis that it had “substantially succeeded” in its overall case.
Chua Lee Ming J rejected that submission. The court emphasised that the plaintiff’s claims were not a single unified claim with one set of issues, but a multitude of separate and distinct claims tied to different impugned transactions and different defendants. Because the plaintiff failed on some claims against each defendant, it was “wrong and unfair” to require defendants to bear costs for dismissed claims. The judge therefore applied a discounted costs approach, fixing party-and-party costs on the standard basis at $600,000 (excluding disbursements) and allocating different percentages of liability for costs and disbursements among the six defendants.
The court also addressed three further costs-related matters: (i) the plaintiff’s application for a certificate for costs for three solicitors, which was dismissed because the case, though complex, did not reach the exceptional threshold; (ii) the plaintiff’s request for indemnity costs, which was refused on balance despite findings that the defendants’ conduct could have justified such an order; and (iii) costs consequences for interlocutory applications concerning a Mareva injunction, where the court ordered each party to bear its own costs for certain summonses and declined to award the plaintiff costs for another Mareva-related application.
What Were the Facts of This Case?
The underlying dispute arose from allegations that the defendants orchestrated transactions to strip Parakou Shipping Pte Ltd (in liquidation) of its assets in anticipation of the company being put into liquidation. The plaintiff brought a “multitude of claims” against six defendants, each connected to different impugned transactions. The claims spanned several legal bases, including 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.
In the earlier liability judgment, Parakou Shipping Pte Ltd (In Liquidation) v Liu Cheng Chan and others [2017] SGHC 15, the High Court found each defendant liable for one or more claims. However, the plaintiff did not succeed on all claims against each defendant. The costs decision in [2017] SGHC 91 therefore did not revisit liability; it assessed how the partial success should translate into costs consequences.
Two issues were described as “major issues” cutting across the impugned transactions: first, whether the impugned transactions were part of a restructuring plan; and second, whether the plaintiff was insolvent at the material times. All defendants contested these issues, but the plaintiff prevailed on them. Yet the court stressed that the plaintiff’s success on these overarching issues did not automatically entitle it to full costs, because each impugned transaction generated separate claims and separate outcomes.
After the liability judgment, the parties returned to court on costs. The judge heard submissions on 13 March 2017 and made several orders, including clarifications on disbursements on 19 April 2017. The costs regime was further complicated by interlocutory applications, particularly those involving a Mareva injunction. The Mareva injunction had been granted and subsequently set aside after the defendants provided alternative security, and costs for these interlocutory steps were reserved to the trial judge.
What Were the Key Legal Issues?
The first key issue was whether the plaintiff, having succeeded on major issues and obtained liability findings against all defendants, was entitled to full costs. This required the court to consider the proper approach to costs when a party succeeds on some issues but fails on other claims, especially where the claims are numerous and distinct across different transactions and defendants.
The second issue concerned the plaintiff’s application for a certificate for costs for more than two solicitors (ie, three solicitors). Under Singapore civil procedure, such certificates are exceptional and typically require a showing of high complexity of facts and/or law, or other circumstances such as a lengthy trial with many issues. The court had to determine whether the case met that exceptional threshold.
The third issue was whether indemnity costs should be awarded. Indemnity costs are discretionary and are generally justified by conduct that takes the case outside the ordinary range, such as unreasonable behaviour or other factors relevant to the court’s discretion. The court also had to decide the quantum of party-and-party costs and how to allocate costs for interlocutory applications relating to the Mareva injunction.
How Did the Court Analyse the Issues?
1. Full costs and the “substantially succeeded” argument
The judge began by framing the costs question in terms of fairness and proportionality. The plaintiff argued that because it prevailed on the two major cross-cutting issues and obtained liability findings against each defendant, it should be treated as substantially successful and therefore awarded full costs. Chua Lee Ming J disagreed. The court accepted that the plaintiff succeeded on the major issues, but it held that this did not resolve the separate question of whether the plaintiff succeeded on each defendant’s liability for each impugned transaction.
Critically, the court treated each impugned transaction as giving rise to separate and distinct claims. Even where a party succeeds on major issues, it may still fail on some claims. The judge stated that it would be “wrong and unfair” to make defendants pay costs for claims that were dismissed. This analysis reflects a costs principle that success must be assessed claim-by-claim (or at least outcome-by-outcome), rather than by reference to broad themes alone. The court distinguished the case from situations where a party substantially succeeds in a claim but fails on one or more issues within that same claim; here, the plaintiff’s failures were not merely issue-level setbacks but claim-level failures across multiple transactions.
2. Allocation of costs percentages among defendants
Although the plaintiff did not succeed on all claims, the judge recognised that the plaintiff did obtain meaningful success against each defendant. The defendants did not contest that the plaintiff was entitled to costs against them, but they argued for different caps or discounts based on their perceived degree of responsibility and the extent of the plaintiff’s success against them.
The court’s approach was to determine appropriate percentages of liability for costs and disbursements for each defendant. In doing so, the judge considered: (a) each defendant’s failure on the two major issues; (b) differences in complexity and amounts claimed across transactions; and (c) the number of impugned transactions each defendant faced. The judge also took into account the relative extent of success against each defendant. For example, the plaintiff succeeded on several claims against CC Liu and Chik but failed on a few, leading the judge to fix their liability at 90%. For Liu Por and Yang, the plaintiff succeeded to a lesser extent, so their liability was fixed at 80%. For PIH, fewer impugned transactions were involved, and the judge fixed liability at 70%. Finally, PSMPL faced the least number of claims, and the judge fixed liability at 60%.
Notably, the judge rejected PSMPL’s attempt to characterise its success as being limited to a “one discrete and minor point.” The court held that the plaintiff succeeded against PSMPL on the two major issues and on a claim relating to one impugned transaction. This illustrates that the court will not accept an overly narrow characterisation of success where the plaintiff’s wins are tied to the central contested issues.
3. Certificate for costs for three solicitors
The plaintiff sought a certificate for costs for three solicitors. The judge dismissed the application, emphasising that such certificates are awarded only in “exceptional circumstances.” The court cited the standard that exceptional circumstances may exist where there is a high degree of complexity of facts and/or law, or where there are many issues of both fact and law and the trial is lengthy.
While the case was complex due to the multitude of claims across several impugned transactions and six defendants, the judge found that the complexity did not rise to the exceptional level required. The court noted overlap in law and facts, voluminous discovery, and core bundles of 19 volumes totalling 12,171 pages. However, the trial itself was not particularly lengthy—about 14.5 days including interlocutory matters and oral submissions. The judge therefore concluded that, although complex, the case did not warrant additional solicitors under the exceptional-costs framework.
4. Indemnity costs and discretionary balancing
The plaintiff sought indemnity costs, relying on the defendants’ alleged conduct. The judge accepted that there were strong grounds that could justify indemnity costs, including allegations and findings that the defendants stripped the plaintiff of assets and shifted them out of the company to avoid a substantial claim by a contingent creditor, that the defendants (1st to 4th) had flagrantly disregarded fiduciary duties, and that the defence of corporate restructuring was found to be a fabrication. These factors, if taken alone, could support an indemnity costs order.
However, the court also applied the requirement to consider the conduct of the plaintiff itself. Under O 59 r 5(b) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed), the court must take into account the conduct of all parties, including before and during proceedings. 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 were reasonably brought against each defendant. On balance, the judge refused indemnity costs. This demonstrates that indemnity costs are not purely punitive; they are a discretionary response to conduct, and the court will weigh both sides’ litigation behaviour.
5. Quantum of party-and-party costs and proportionality
The plaintiff proposed party-and-party costs of $1,174,500, while the defendants submitted a range of $200,000 to $240,000. The judge fixed party-and-party costs on the standard basis at $600,000 (undiscounted and excluding disbursements). In arriving at this figure, the court explicitly referenced proportionality and considered the complexity of the matter, the volume of documents, the amount recovered, the length of the trial, and the fact that the defendants were represented by three sets of solicitors.
This quantum analysis is useful for practitioners because it shows the court’s willingness to moderate both extremes. Even where the plaintiff achieved significant success, the court still reduced costs to reflect partial failure and the overall litigation footprint.
6. Costs for interlocutory applications (Mareva injunction)
The judge also dealt with costs arising from interlocutory applications. For Summonses Nos 6150–6152 of 2014, the defendants sought to set aside or vary a Mareva injunction. The Mareva injunction had been granted on 21 November 2014, and the defendants indicated they would apply for variation. When the defendants provided sufficient alternative security, the Mareva order was set aside on 13 April 2015, and costs were reserved to the trial judge. The judge ordered each party to pay its own costs for those summonses, reasoning that the Mareva order was set aside only because of the alternative security provided.
For Summons No 2021 of 2014 (the plaintiff’s application for the Mareva injunction), the judge ruled that the plaintiff was not entitled to the costs of that application. Although the extract provided is truncated, the decision’s direction is clear: costs were not awarded to the plaintiff for the Mareva injunction application, consistent with the overall approach that costs should reflect the eventual outcome and the circumstances leading to the setting aside of the injunction.
What Was the Outcome?
The court made several principal costs orders. First, the defendants (1st to 6th) were jointly and severally liable for the plaintiff’s costs in the action. Second, the judge allocated different percentages of liability for costs and disbursements: CC Liu and Chik at 90%, Liu Por and Yang at 80%, PIH at 70%, and PSMPL at 60%. Third, the plaintiff’s application for a certificate for costs for three solicitors was dismissed.
In addition, the judge fixed party-and-party costs on the standard basis at $600,000 (excluding disbursements). The disbursements were to be fixed by the court if not agreed. The court also ordered that each party bear its own costs for the defendants’ applications in Summonses Nos 6150–6152 of 2014 and ordered that the plaintiff was not entitled to costs for its Summons No 2021 of 2014 concerning the Mareva injunction.
Why Does This Case Matter?
Parakou Shipping [2017] SGHC 91 is a significant costs decision because it clarifies how courts should approach “substantial success” arguments in complex multi-claim, multi-defendant litigation. The judgment underscores that success on overarching issues does not automatically translate into full costs where the plaintiff fails on some claims against each defendant. For litigators, this is a practical warning: costs outcomes will be calibrated to the granular structure of the case, not merely to the headline themes on which the plaintiff prevailed.
The decision also provides guidance on the exceptional nature of certificates for more than two solicitors. Even where a case involves voluminous documents and multiple claims, the court will focus on whether the trial’s complexity and length justify additional solicitors. This is particularly relevant for parties planning staffing and budgeting in high-stakes commercial disputes.
Finally, the judgment illustrates the balanced nature of indemnity costs. While the court acknowledged that the defendants’ conduct could have justified indemnity costs, it refused the order because the plaintiff’s own litigation conduct—asserting a broad range of claims indiscriminately—was also relevant. This reinforces that indemnity costs are not a one-way remedy; they depend on the overall conduct of both parties and the court’s assessment of reasonableness.
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.