PT Bumi International Tankers v Man B&W Diesel S E Asia Pte Ltd and Another (No 2) [2004] SGHC 99

"the court should not interfere and allow such an application because it runs against a clear and express undertaking freely given." — Per Choo Han Teck J, Para 5

Case Information

• Citation: [2004] SGHC 99 (Para 0)
• Court: High Court (Para 0)
• Date: 14 May 2004 (Para 0)
• Coram: Choo Han Teck J (Para 0)
• Case Number: Suit 149/2001, RA 367/2003 (Para 0)
• Area of Law: Civil Procedure – Costs – Security – Security for costs provided by plaintiffs' solicitors by way of solicitors' undertakings – Whether application to be released from undertakings ought to be granted (Para 0)
• Counsel for the Plaintiff: Philip Tay (Rajah and Tann) (Para 0)
• Counsel for the Defendants: Charles Lin (Donaldson and Burkinshaw) (Para 0)
• Judgment Length: Not answerable from the extraction provided (Para 0)

Summary

This was an appeal by the defendants against an order by the assistant registrar discharging two undertakings given by the plaintiffs’ solicitors as security for costs. The plaintiffs, who were foreign plaintiffs, had been ordered to provide security for costs, and instead of paying money into court or furnishing a banker’s guarantee, their solicitors gave undertakings in two letters dated 12 March 2002 and 18 June 2002 for a total of $250,000. The plaintiffs later succeeded at trial, and after judgment was entered in their favour, they applied to be released from the undertakings. The assistant registrar granted that relief, but the defendants appealed. (Para 1, Para 2)

The High Court held that the undertakings had to be enforced according to their own terms. The court reasoned that the wording of the undertakings was clear and that the solicitors remained bound until the stated amount was paid, or until the defendants were paid their costs without having to call on the undertaking. The court rejected the attempt to treat the undertakings as if they were merely ordinary security arrangements that could be discharged once the plaintiffs had succeeded at trial. (Para 5)

The court further held that, even if there was no express prohibition against an application to discharge the undertakings, the court should not interfere with a clear and express undertaking freely given except in exceptional circumstances. The appeal was therefore allowed, and the assistant registrar’s orders were set aside. The decision underscores the strict approach taken to solicitors’ undertakings, especially where they are given specifically as security for costs covering both the trial and any appeal. (Para 5, Para 6)

Why Did the Defendants Say the Solicitors’ Undertakings Had to Be Enforced?

The defendants’ position was that the undertakings were not merely procedural conveniences but binding promises given to secure the defendants’ costs exposure in the suit. The court recorded that the defendants had obtained an order requiring the foreign plaintiffs to provide security for costs, and the security was furnished through the plaintiffs’ solicitors’ undertakings. The defendants therefore argued that the undertakings should be treated as serious and enforceable commitments, not as arrangements that could be undone simply because the plaintiffs later succeeded at trial. (Para 1, Para 3)

"Hawkins’ case, in so far as it is relevant here, lies in its emphasis that undertakings are serious assertions and would be strictly enforced." — Per Choo Han Teck J, Para 3

The court accepted the defendants’ reliance on Hawkins Hill Consolidated Gold Mining Company Limited v Want, Johnson, and Co as an authority for the proposition that undertakings are to be taken seriously and enforced strictly. The judgment does not suggest that Hawkins Hill was applied mechanically; rather, it was used to reinforce the broader principle that a solicitor’s undertaking is not a casual statement but a solemn commitment. That principle mattered because the undertakings in this case were the very mechanism by which the plaintiffs satisfied the security-for-costs order. (Para 3)

The court’s treatment of the defendants’ argument also shows that the context of the undertaking was central. The security was not given in the abstract; it was given in response to a court order requiring security from foreign plaintiffs. The defendants’ appeal therefore invited the court to decide whether the plaintiffs could later escape the consequences of that chosen mode of compliance. The court answered that question by focusing on the undertaking’s text and the circumstances in which it was given. (Para 1, Para 5)

What Were the Plaintiffs’ Main Arguments for Being Released from the Undertakings?

The plaintiffs argued that they were entitled to be released from all obligations as to security for costs unless there was an order of court specifically preventing release. Counsel for the plaintiffs submitted that the assistant registrar’s decision was discretionary and that the court should permit discharge of the undertakings. The plaintiffs also relied on authority to support the proposition that payment out of security for costs could involve judicial discretion. (Para 4, Para 6)

"Mr Philip Tay, counsel for the plaintiffs, argued that the plaintiffs were entitled to be released of all their obligations as to security for costs unless there was an order of court that specifically prevented them from being so released." — Per Choo Han Teck J, Para 4

The plaintiffs’ argument was also linked to the fact that they had succeeded at trial. The extraction records that judgment was handed down in their favour on 18 July 2003, and they then applied on 15 October 2003 to be released from the undertakings. Their position, as reflected in the judgment, was that once the substantive claim had been won, the security-for-costs purpose had fallen away, so the undertakings should no longer bind them. The court, however, did not accept that the success at trial automatically extinguished the undertaking. (Para 2, Para 5)

The plaintiffs further relied on Eagleview Ltd v Worthgate Ltd for the proposition that an order by the court in respect of payment out of security for costs is an exercise of judicial discretion. The court acknowledged that this was the plaintiffs’ reliance, but it distinguished the case on the basis that Eagleview concerned a different situation from one where a party had given a direct undertaking to another party. The distinction mattered because the present case turned on the express terms of the undertaking itself. (Para 6)

How Did the Court Read the Wording of the Solicitors’ Undertakings?

The court treated the wording of the undertakings as decisive. It noted that the wording was identical in both letters and that the total amount of security was $250,000. The court then focused on the discharge clause, which stated that the undertaking would be discharged and of no further effect only upon payment of the sum above and/or if the defendants were paid all their costs without having to call on the undertaking. That language was treated as clear and express, leaving little room for a contrary construction. (Para 1, Para 5)

"The wording is identical in both letters. The total amount of security in the two letters of undertaking was $250,000." — Per Choo Han Teck J, Para 1

"the solicitors’ letter provided that the undertaking ‘shall be discharged and be of no further effect upon payment of the sum above and/or if the defendants are paid all their costs without having to call on this undertaking’." — Per Choo Han Teck J, Para 5

On that wording, the court held that the solicitors remained bound until one of the stated conditions occurred. The judgment states in direct terms that the solicitors were bound until the amount stated in the letter of undertaking was paid, or if the defendants were paid their costs without having to call on the undertaking. This was the core contractual-like reading of the undertaking: the court did not treat the undertaking as something that could be re-written after the event simply because the plaintiffs had prevailed at trial. (Para 5)

The court’s reasoning was also that the undertaking had been given to cover the trial and any appeal arising from it. That factual context was important because it explained why the court rejected the plaintiffs’ attempt to analogize the undertaking to a more limited security arrangement. The court said there was no mention in the authorities relied on by the plaintiffs as to the terms and circumstances in which security for costs was provided there, and therefore those authorities were of no assistance where the payment for security was made specifically to cover the trial as well as any appeal. (Para 5)

"There was no mention as to the terms and circumstances in which security for costs was provided in that case. Hence, it is of no assistance in cases where the payment for security was made specifically to cover the trial as well as any appeal arising from it." — Per Choo Han Teck J, Para 5

Why Did the Court Reject the Plaintiffs’ Reliance on The Bernisse and the Elve and Eagleview?

The court distinguished The Bernisse and the Elve because, on the extraction, that case did not address undertakings given specifically to cover trial and appeal security in the same way as the present case. The judgment expressly says that there was no mention in that case of the terms and circumstances in which security for costs was provided, and for that reason it was not helpful to the plaintiffs. The court’s approach was therefore not to deny the existence of discretion in all security-for-costs contexts, but to insist that the particular undertaking before it had to be interpreted in its own setting. (Para 5)

"Mr Tay relied on the case of The Bernisse and the Elve [1920] P 1" — Per Choo Han Teck J, Para 5

The court also distinguished Eagleview Ltd v Worthgate Ltd. The plaintiffs had relied on Eagleview for the proposition that an order by the court in respect of payment out of security for costs is an exercise of judicial discretion. The court responded that Eagleview would be the relevant situation where the issue was a court order about payment out of security, but not where a party had given an undertaking to another party. In the latter situation, the court said, the undertaking itself governed and relief would only be granted in exceptional circumstances. (Para 6)

"Mr Tay relied on the case of Eagleview Ltd v Worthgate Ltd [1998] EWCA Civ 1232; [1998] EGCS 119 for the proposition that an order by the court in respect of payment out of security for costs is an exercise of judicial discretion" — Per Choo Han Teck J, Para 6

The court’s distinction is important because it shows that the source of the security matters. Security ordered by the court and security furnished by a solicitor’s undertaking are not treated identically. The former may involve a more obvious exercise of judicial discretion when payment out is sought; the latter is a promise that the court will generally hold the solicitor to, unless exceptional circumstances justify intervention. That is why the court concluded that the plaintiffs’ reliance on Eagleview did not answer the problem created by the express undertaking in this case. (Para 6)

What Was the Court’s Core Legal Principle on Solicitors’ Undertakings?

The court stated the governing principle in emphatic terms: a solicitor’s undertaking must be enforced according to its own terms, and the court should not interfere with a clear and express undertaking freely given. The judgment makes clear that the court’s role is not to relieve a party from a bad bargain or an inconvenient promise merely because circumstances have changed. Instead, the undertaking is to be observed as nearly as possible to the terms upon which it was made. (Para 5, Para 6)

"this court was persuaded that a solicitor’s undertaking to a party in the present circumstances must be governed by the terms set out in the undertaking itself." — Per Choo Han Teck J, Para 5

"the court may only relieve a party from his undertaking in exceptional circumstances." — Per Choo Han Teck J, Para 6

The court also stated that, even if there was no express prohibition against the plaintiffs applying for an order discharging their solicitors from the undertakings, the court should not interfere because doing so would run against a clear and express undertaking freely given. This is the ratio decidendi of the case as extracted: the existence of a clear undertaking, coupled with the absence of exceptional circumstances, meant that the court would not grant relief. The court thus treated the undertaking as binding in a manner analogous to a solemn promise that the court will not lightly undo. (Para 5, Para 6)

The judgment’s language also indicates that the court saw the undertaking as continuing until the conditions in the letter were satisfied. That meant the plaintiffs could not simply point to their success at trial and ask for release. The undertaking remained operative until the defendants were paid their costs without needing to call on it, or until the stated sum was paid. The court’s conclusion therefore turned on the text of the undertaking and the absence of any exceptional circumstance justifying departure from it. (Para 5, Para 6)

"Where none is evident, the undertaking must be observed as nearly as possible to the terms upon which it was made." — Per Choo Han Teck J, Para 6

How Did the Procedural History Shape the Outcome of the Appeal?

The procedural history was straightforward but important. The plaintiffs were required to provide security for costs because they were foreign plaintiffs. They did so through two letters of undertaking from their solicitors. After succeeding at trial, they applied to the assistant registrar to be released from those undertakings, and the assistant registrar discharged them while also disallowing the defendants’ application for a stay of execution. The defendants then appealed. (Para 1, Para 2)

"The plaintiffs were required to provide security for costs pursuant to an application by the defendants on the ground that the plaintiffs were foreign plaintiffs." — Per Choo Han Teck J, Para 1

"The assistant registrar discharged the undertakings and also disallowed the defendants’ application for a stay of execution of her order." — Per Choo Han Teck J, Para 2

The extraction also records that the defendants’ appeal was first heard in the High Court on 29 October 2003 and dismissed, but that on 21 April 2004 the registrar’s appeal was allowed and the assistant registrar’s orders were set aside. That procedural sequence shows that the issue was revisited after further arguments, and the final result was the opposite of the assistant registrar’s original decision. The final appellate outcome therefore reinforced the strict approach to undertakings. (Para 2, Para 3)

"The defendants appealed against the assistant registrar’s orders, and the appeal was heard in this court on 29 October 2003 and dismissed." — Per Choo Han Teck J, Para 2

"On 21 April 2004, the registrar’s appeal was allowed and the assistant registrar’s orders were set aside." — Per Choo Han Teck J, Para 3

That procedural history matters because it shows that the court did not simply defer to the earlier discharge order. Instead, after further arguments, the court reconsidered the matter and concluded that the assistant registrar’s approach could not stand. The appeal was allowed because the legal effect of the undertaking had been underestimated below. The final order thus restored the binding force of the undertakings. (Para 3, Para 6)

What Exactly Did the Court Decide About the Plaintiffs’ Application to Be Released?

The court decided that the plaintiffs’ application to be released from the undertakings ought not to have been granted. The judgment states that the court should not interfere and allow such an application because it runs against a clear and express undertaking freely given. That statement is the clearest expression of the court’s conclusion on the application itself. (Para 5)

"the court should not interfere and allow such an application because it runs against a clear and express undertaking freely given." — Per Choo Han Teck J, Para 5

The court’s conclusion was not merely that the plaintiffs’ application was premature or poorly framed. Rather, the court held that the undertaking remained binding according to its terms, and that the court would only relieve a party from such an undertaking in exceptional circumstances. Since no such exceptional circumstances were identified in the extraction, the application failed. The result was that the plaintiffs’ solicitors remained bound by the undertakings until the contractual conditions for discharge were met. (Para 5, Para 6)

The appeal was therefore allowed. The practical consequence was that the assistant registrar’s discharge order could not stand, and the undertakings continued to have effect. The court’s final disposition is concise in the extraction, but its significance is substantial: it confirms that a solicitor’s undertaking given as security for costs is not automatically extinguished by a plaintiff’s success at trial. (Para 3, Para 6)

"Appeal allowed." — Per Choo Han Teck J, Para 6

Why Does This Case Matter for Security for Costs Practice?

This case matters because it draws a sharp line between ordinary security-for-costs orders and security furnished by solicitors’ undertakings. The court made clear that where a party chooses to satisfy a security-for-costs obligation by way of a solicitor’s undertaking, the undertaking is to be enforced according to its own terms. That means practitioners cannot assume that success on the merits will automatically release the security. (Para 1, Para 5, Para 6)

The case also matters because it reinforces the seriousness of solicitors’ undertakings as instruments of litigation practice. The court’s reliance on the strict-enforcement principle means that lawyers who give such undertakings must draft them carefully and understand the conditions under which they will be discharged. The judgment suggests that the court will not readily rewrite or relax those conditions after the fact. (Para 3, Para 5, Para 6)

Finally, the case is practically important for foreign plaintiffs and defendants seeking security for costs. It shows that if security is provided through an undertaking intended to cover the trial and any appeal, the undertaking may survive the trial result and continue until the express discharge conditions are met. For litigators, the lesson is that the form of security chosen at the outset can have continuing consequences long after judgment. (Para 1, Para 2, Para 5)

Cases Referred To

Source Documents

• Original Judgment — Singapore Courts
• Archived Copy (PDF) — Litt Law CDN

This article analyses [2004] SGHC 99 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.