Case Summaries

Michael Vaz Lorrain v Singapore Rifle Association

SUPREME COURT OF SINGAPORE

20 November 2020

Case summary

Michael Vaz Lorrain v Singapore Rifle Association [2020] SGCA 114
Civil Appeal No 60 of 2019

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Decision of the Court of Appeal:

Outcome: CoA allows the appeal and holds that O 22A r 9(3) applies because the judgment obtained by the respondent was not more favourable than the offer to settle served by the appellant.

Decision of the appeal

1 The appellant, Mr Michael Vaz Lorrain (“Mr Vaz”), is the president of the Singapore Shooting Association’s (“SSA”) council. The respondent, the Singapore Rifle Association (“SRA”), is a member of the SSA. In HC/S 109/2017 (“Suit 109”), SRA commenced an action against Mr Vaz for breach of a mediation agreement entered into between, inter alia, SRA and Mr Vaz and/or a duty of confidence owed to SRA. As Mr Vaz did not dispute liability, interlocutory judgment was entered against him.

2 Following the trial for the assessment of damages, the High Court judge (“the Judge”) allowed SRA’s “claim of $8,100 as legal fees and disbursements incurred to respond to Mr Vaz’s breach of his confidentiality obligations in relation to the mediation” (“the Legal Advice Costs”). The Judge dismissed SRA’s other claims for damages, including its claim for punitive damages in the sum of $1.5m.

3 On the issue of costs, the Judge held that costs would follow the event and made various costs orders in favour of SRA, amounting to $62,300 in total, with reasonable disbursements to be agreed or taxed. Although Mr Vaz had served an offer to settle on SRA on 3 April 2017 (“the OTS”), the Judge held that O 22A r 9(3) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) did not apply. The Judge concluded that the offered settlement sum of $25,000 (“the OTS Sum”) was not more favourable than the judgment obtained by SRA (ie, $8,100) together with SRA’s costs incurred up to the date the OTS was served (“the Pre-OTS Costs”).

4 There were broadly three main issues before the Court of Appeal (“the Court”):

  1. First, whether the judgment sum of $8,100, being legal fees and disbursements allegedly incurred by SRA, was recoverable by way of a claim for damages.
  2. Second, whether the Judge should have applied O 22A r 9(3) in respect of the OTS.
  3. Third, whether the Court should exercise its discretion under O 22A r 9(5) not to apply O 22A r 9(3) even if the requirements therein were satisfied.

The Court's decision

Whether the Legal Advice Costs could be recovered as damages

5 The Court noted that SRA did not produce any documentary evidence to support its claim for the Legal Advice Costs. Nonetheless, it was not necessary to conclusively determine whether the Legal Advice Costs were in fact incurred. This is because even if such costs were incurred, they could not, as a matter of principle, be recovered as damages. The Legal Advice Costs were in the nature of legal fees and disbursements in relation to Suit 109 and could only be recovered as costs (at [25] and [28]).

6 The Court did not accept SRA’s submission that the Legal Advice Costs did not relate to the conduct of Suit 109 and could not be claimed as costs in Suit 109. This position was not taken by SRA in the court below and was not supported by the evidence (at [35][36]).

7 The Court held that only nominal damages might be awarded given SRA’s inability to prove that it had suffered any loss as a result of Mr Vaz’s breach including the quantum of its loss, if any. Accordingly, the Judge’s damages award of $8,100 was set aside and nominal damages of $1,000 was awarded to SRA (at [37]).

The applicability of O 22A r 9(3) of the Rules of Court

8 To determine whether the Judge should have applied O 22A r 9(3), this required the Court to consider whether the “Validity Requirement” in O 22A r 9(3)(a) and the “Favourability Requirement” in O 22A r 9(3)(b) were satisfied at the time of the Judge’s decision. The OTS had not been accepted, withdrawn nor had it expired when the Judge made his decision. Hence, the Validity Requirement was satisfied (at [41])

9 The Court held that the judgment obtained by SRA (ie, $1,000) was not more favourable than the OTS, even after accounting for interest and SRA’s estimate of the Pre-OTS Costs in its submissions before the Judge (ie, $18,068.65). The Favourability Requirement was therefore satisfied (at [48] and [66]).

10 The Court found that there was no basis to account for the non-monetary value of the judgment when considering the Favourability Requirement. The Favourability Requirement had to be considered by reference to the terms of the offer to settle and the remedies obtained from the judgment. However, the non-monetary value of the judgment would invariably be subjective and incapable of precise quantification. SRA’s contention that the Court ought to consider the non-monetary value of the judgment was also not supported by the case law that it cited (at [56][58]).

Whether the Court should exercise its discretion under O 22A r 9(5) not to apply O 22A r 9(3) even when the two requirements have been satisfied

11 The Court was not persuaded by SRA’s submissions as to why the costs consequences in O 22A r 9(3) should not apply (at [69]).

12 The mere fact that there were novel and complex legal issues of public interest, did not, in and of itself, ordinarily provide a sufficient basis not to apply O 22A r 9(3). Furthermore, the strength of SRA’s claim had to be considered in the final analysis (at [71][72]).

13 The Court did not accept SRA’s contention that the OTS was not a serious and genuine attempt to settle Suit 109. The OTS Sum of $25,000 was not an illusory one. There was a legitimate basis for the sum proposed and it was not a strategic or tactical offer made purely to secure indemnity costs (at [76]).

14 SRA’s reasons for not accepting the OTS were irrelevant to the issue of whether O 22A r 9(3) ought not to apply. The reasons advanced did not have any legal or factual foundation and, in any event, did not provide a sufficient basis not to apply O 22A r 9(3) (at [77] and [79]).

15 Accordingly, applying O 22A r 9(3), the Court made the following costs orders (at [82]):

  1. Mr Vaz was to pay SRA’s costs incurred in Suit 109 on a standard basis on the High Court scale up to 3 April 2017 (ie, the Pre-OTS Costs). This was fixed at $15,000 inclusive of disbursements (at [50]).
  2. SRA was to pay Mr Vaz’s costs incurred in Suit 109 on an indemnity basis on the High Court scale from 3 April 2017 (ie, “the Post-OTS Costs”). Unless the parties were able to come to an agreement within 14 days of the date of the judgment, the quantum of the Post-OTS Costs was remitted to the Judge (at [86]).
  3. The costs orders made by the Judge in respect of the interlocutory applications in Suit 109, which Mr Vaz had appealed against, were set aside. Mr Vaz did not appeal against three of the costs orders made by the Judge and was not asking for costs in respect of these interlocutory applications. The Court therefore exercised its discretion under O 22A r 9(5) to allow those orders to remain and to order that Mr Vaz was not to be awarded any costs for these applications (at [84]).

16 The Court ordered SRA to pay Mr Vaz the sum of $20,000 inclusive of disbursements for the costs of the appeal (at [87]).

This summary is provided to assist in the understanding of the Court’s judgment. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s judgment.

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