Cheong Ghim Fah and Another v Murugian s/o Rangasamy (No 2) [2004] 3 SLR 193

Words and Phrases – "Sufficient reason" – Definition – Section
39 Subordinate Courts Act (Cap 321, 1999 Rev Ed)

Conflict of Laws – Foreign Judgments – Recognition – Judgment from Singapore
Subordinate Courts not recognised by foreign jurisdiction – Whether sufficient
reason to commence proceedings in Singapore High Court – Malaysian
Reciprocal Enforcement of Judgments Act 1958

Civil Procedure – Costs – Taxation – Proceedings prima facie falling within
jurisdiction of Subordinate Courts – Whether proceedings ought to be taxed
on High Court scale – Order 59 r 27(5) Rules of Court (Cap 322, R 5, 2004
Rev Ed)

Case Summary

Facts

This application arose out of a suit in which the defendant was assigned
liability to the extent of 85% for causing the death of a jogger in a
motor accident. Interlocutory judgment was entered in favour of the plaintiffs
(the deceased’s wife and his estate). At the assessment hearing,
the assistant registrar assessed damages due to the deceased’s estate
at $216,523.60. In light of O 59 r 27 of the Rules of Court (Cap 322,
R 5, 2004 Rev Ed), the assistant registrar ruled that the plaintiffs’
costs should be taxed on the District Court scale on a standard basis.

The plaintiffs applied to the judge for a final decision as to whether
costs should be assessed on the High Court scale, contending that there
was sufficient reason within the meaning of s 39 of the Subordinate Courts
Act (Cap 321, 1999 Rev Ed) (the “SCA”) to initiate proceedings
in the High Court.

Held, ordering the plaintiffs’ costs to be taxed on the High Court
scale:

(1) A solicitor who believed that there was “sufficient reason”
for proceedings which prima facie fell within the purview of the SCA to
be tried in the High Court should file proceedings in the Subordinate
Courts, and thereafter apply for the transfer of proceedings to the High
Court. Otherwise, there might be a consequential delay arising from the
subsequent transfer of those proceedings to the Subordinate Court and/or
adverse costs consequences, which might crystallise into a personal liability
for the solicitor concerned: at [12].

(2) If Subordinate Court proceedings were commenced in the High Court,
costs awarded should usually be assessed on the Subordinate Courts scale.
A successful defendant would almost invariably be awarded the lower scale
of costs since solicitors for both parties shared the duty to ensure that
proceedings were heard in the proper forum. The court might direct that
an offending solicitor recover only a fraction of his usual costs or be
ordered to bear the consequential costs personally: at [13].

(3) The term “sufficient reason” in s 39 of the SCA had no
fixed or settled meaning. Only a case of unusual complexity or one that
raised an issue of public interest or an important point of law could
ever justify the initiation of proceedings in the High Court if they prima
facie fell within the purview of the SCA. The issues raised in the present
proceedings were well within the purview and competence of the District
Court: at [10] and [17].

(4) Nevertheless, it was appropriate for the plaintiffs’ solicitors
to have initiated proceedings in the High Court. First, they had reasonable
ground to believe that the damages their clients might potentially recover
would exceed the District Court’s jurisdiction. That the plaintiffs
did not eventually recover such an amount should not be held against them.
Second, if a Subordinate Court judgment could not be enforced as a foreign
judgment in another jurisdiction, as in the present case, this could be
“sufficient reason” for initiating the action in the High
Court: at [14] to [15].

Case(s) referred to
Australian Master Builders Co Pty Ltd v Ng
Tai Tuan [1987]
SLR 539 (folld)
Cheong Ghim Fah and another v Murugian s/o
Rangasamy [2004] 1 SLR 628 (refd)
Excelmore Trading Pte Ltd v Excelmore
Classics Sdn Bhd (cited in Mallal’s Digest of Malaysian and
Singapore Case Law vol 2(3) (4th Ed, 2001 Reissue) at para 5056 (refd)
Sunlink Engineering Pte Ltd v Koru Bena Sdn Bhd [2003]
2 SLR 452 (distd)

Legislation referred to
Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev
Ed)
Reciprocal Enforcement of Foreign Judgments Act (Cap 265, 2001 Rev Ed)
Rules of Court (Cap 322, R 5, 2004 Rev Ed) O 59 r 27(5)
Subordinate Courts Act (Cap 321, 1985 Rev Ed) s 46
Subordinate Courts Act (Cap 321, 1999 Rev Ed) ss 31, 37, 38, 39(4)(a),
39(6)
Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed)
Reciprocal Enforcement of Judgments Act 1958 (M’sia)

Judgment

11 June 2004

V K Rajah JC:

1 In Cheong Ghim Fah and another v Murugian s/o Rangasamy [2004]
1 SLR 628, I assigned liability to the extent of 85% to the defendant
for causing the death of a jogger in a motor accident. Interlocutory
judgment was entered in favour of the plaintiffs with damages to be
assessed by the Registrar. On 2 April 2004, an assistant registrar assessed
damages due to the deceased’s estate at $216,523.60. This sum
falls within the pecuniary limit of $250,000 which represents the jurisdictional
scope of the District Court in civil matters.

2 On the issue of costs, the assistant registrar, taking into account
O 59 r 27 of the Rules of Court (Cap 322, R 5, 2004 Rev Ed) (“RSC”),
ruled that “costs are awarded to the plaintiffs to be taxed on
the [District Court] scale on a standard basis”. The assistant
registrar concurrently granted the plaintiffs liberty to apply directly
to me, pursuant to O 59 r 27(5), for a final decision as to whether
costs should be assessed on the High Court scale.

The legislative matrix

3 While the High Court retains the general jurisdiction to entertain
all manner of actions and causes, the legislature has directed, with
clear lines of demarcation, which matters ought to be heard in the subordinate
courts alone. There are strong policy reasons underpinned by expediency

dictating that this jurisdictional demarcation be respected in the absence
of any grounds satisfying the statutory acid test of “sufficient
reason”. The administrative and judicial arteries of work flow
in the High Court would be clogged if a cavalier approach were adopted
by solicitors in observing this vital jurisdictional demarcation. Moreover,
solicitors should in no event incur unnecessary costs if a more economical
and equally expeditious process of dispute resolution exists. The subordinate
courts have been constituted to provide a forum for the just, expeditious
and economical resolution of smaller claims.

4 In light of these considerations there are inherent legislative directives
governing the assessment of costs of matters which, though adjudicated
in the High Court, fall within the jurisdiction of the subordinate courts.
Prima facie the costs awarded in such matters ought to be assessed on
the subordinate courts scale. (For ease of reference, I shall refer
to such proceedings henceforth as “subordinate court proceedings”).

The legislative directives

5 Section 39 of the Subordinate Courts Act (Cap 321, 1999 Rev Ed) (“SCA”)
stipulates:
(1) Where an action founded on contract or tort or any written law to
recover a sum of money is commenced in the High Court which could have
been commenced in a subordinate court, then, subject to subsections
(3) and (4), the plaintiff —
(a) if he recovers a sum not exceeding the District Court limit, shall
not be entitled to any more costs of the action than those to which
he would have been entitled if the action had been brought in a District
Court; and
(b) if he recovers a sum not exceeding the Magistrate’s Court
limit, shall not be entitled to any more costs of the action than those
to which he would have been entitled if the action had been brought
in a Magistrate’s Court.

(2) For the purposes of subsection (1)(a) and (b), a plaintiff shall
be treated as recovering the full amount recoverable in respect of his
claim without regard to any deduction made in respect of contributory
negligence on his part or otherwise in respect of matters not falling
to be taken into account in determining whether the action could have
been commenced in a subordinate court.

(3) Where a plaintiff is entitled to costs on the subordinate courts
scale only, the Registrar of the Supreme Court shall have the same power
of allowing any items of costs as a District Judge or Magistrate would
have had if the action had been brought in a subordinate court.

(4) In any action, the High Court, if satisfied —
(a) that there was sufficient reason for bringing the action in the
High Court; or
(b) that the defendant or one of the defendants objected to the transfer
of the action to a subordinate court,
may make an order allowing the costs or any part of the costs thereof
on the High Court scale or on the subordinate courts scale as it may
direct.
…
(6) This section shall not affect any question as to costs if it appears
to the High Court that there was reasonable ground for supposing the
amount recoverable in respect of the plaintiff’s claim to be in
excess of the amount recoverable in an action commenced in a subordinate
court.
[emphasis added]

6 Order 59 r 27(5) of the RSC stipulates:
Notwithstanding paragraphs (1) to (4), if any action is brought in the
High Court, which would have been within the jurisdiction of a Subordinate
Court, the plaintiff shall not be entitled to any more costs than he
would have been entitled to if the proceedings had been brought in a
Subordinate Court, unless in any such action a Judge certifies that
there was sufficient reason for bringing the action in the High Court.
[emphasis added]

The rival contentions

7 Counsel for the plaintiffs accepted that the assistant registrar had
no discretion in light of O 59 r 27(5) to make any other order of costs.
He however contended that there was sufficient reason for initiating
the subject proceedings in the High Court and that a judge could vary
the assistant registrar’s order. He asserted first of all that
the sum of $216,000 awarded by the assistant registrar loomed close
to the jurisdictional limit of the subordinate courts. According to
his clients’ genuine estimation, damages should have been assessed
in the region between $300,000 to $400,000 and his clients should not,
to that extent be penalised if the actual amount fell barely short of
such an estimation. Next, there were several allegedly interesting and
difficult points of law and fact raised in the subject proceedings which
would, in the interests of finality, have rendered High Court proceedings
preferable. This, he claimed, would in the final analysis obviate an
appeal and lead to an ultimate saving of costs. Finally, he drew my
attention to a 1996 decision of the Malaysian High Court, Excelmore
Trading Pte Ltd v Excelmore Classics Sdn Bhd (cited in Mallal’s
Digest of Malaysian and Singapore Case Law vol 2(3) (4th Ed, 2001 Reissue)
at para 5056). The Malaysian High Court held in that decision that a
judgment emanating from the subordinate courts in Singapore was not
registrable under the Malaysian Reciprocal Enforcement of Judgments
Act 1958 (“MREJA”); the MREJA recognised only the judgments
of a superior court. Counsel contended that commencing proceedings in
the subordinate courts would, in the circumstances, have amounted to
negligence on his part. The defendant, a Malaysian, had no assets in
Singapore. Furthermore, the defendant’s Malaysian insurer, the
substantive defendant in the proceedings, had neither a physical presence
nor any assets in Singapore.

8 Counsel for the defendant, on the other hand, argued that the court’s
primary, if not sole, consideration was to have regard to the final
amount adjudged. Acceding to the plaintiffs’ arguments would,
he contended, open the floodgates encouraging the filing of matters
in the High Court that should rightly be commenced in the subordinate
courts.

Principles

9 The general rule is that an award of costs is made for the purpose
of compensating, in some way, the successful party for the legal costs
it has incurred. An award of costs does not normally carry with it any
punitive element designed to punish the unsuccessful party.

10 The legislative directive in s 39 of the SCA is patently intended
to ensure that the statutory division of the caseload between the two
courts is religiously observed by litigants and their solicitors. A
party that breaches this statutory mandate by incorrectly commencing
proceedings in the High Court should not be entitled to recover costs
that have been unreasonably incurred; hence it should only be permitted
to recover the subordinate courts scale of costs unless there is sufficient
reason justifying the initial election. Without attempting an exhaustive
definition of the term “sufficient reason”, in the context
of s 39 of the SCA, it can be said to embrace matters that are out of
the ordinary. All said and done, this term is an etymological chameleon
that has no fixed or settled meaning; satisfying this requirement is
coloured and evaluated entirely by its statutory context and the relevant
factual matrix. The term has overlapping but not consistently identical
meanings in ss 37, 38 and 39 of the SCA.

11 In Australian Master Builders Co Pty Ltd v Ng Tai Tuan [1987]
SLR 539, Chan Sek Keong JC (as he then was) opined that s 37 of
the SCA gave the High Court an unfettered discretion to transfer, at
any time, any proceedings commenced in the High Court by writ of summons
to the District Court. He corrrectly pointed out that the words “notwithstanding
any other provisions of this Act” vest in the High Court the discretion
to increase the ordinary civil jurisdiction of the District Court by
means of such a transfer. Chan JC also emphasised that it is not desirable
to design specific rules as to when and how the court should exercise
its discretion to transfer proceedings. More recently, in Sunlink
Engineering Pte Ltd v Koru Bena Sdn Bhd [2003]
2 SLR 452, Tan Lee Meng J, after citing Chan JC’s views, observed
that the need to meet another country’s legislation on reciprocal
enforcement of foreign judgments did not, without more, confer on a
plaintiff the right to be heard in the High Court if the case could
in the normal course of events be heard in the subordinate courts. He
was concerned that otherwise, a different set of rules could, without
exception, apply to every such foreign defendant. This could result
in a misallocation of High Court resources, as time could then be unjustifiably
spent on claims which ought to be dealt with in the subordinate courts.
These are indeed legitimate concerns. It is noteworthy, however, that
Tan J, in transferring the subject proceedings to a subordinate court,
grounded his decision on the basis that the foreign defendant had not
only a presence in Singapore but had also just secured a multi-million
dollar contract for the construction of a Singapore school.

12 It is evident from the statutory scheme and policy of the SCA and
the Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) (“SCJA”)
that all proceedings falling prima facie within the purview of the SCA
ought to be commenced in the subordinate courts. Even if a matter involves
“some important question of law, or being a test case or for any
other sufficient reason is one which should be tried in the High Court”,
the proper course of procedure for a solicitor to adopt is to file the
proceedings in the subordinate courts, in the first instance, and thereafter
apply for the transfer of the proceedings to the High Court, pursuant
to s 38 of the SCA. Section 31 of the SCA now expressly confers on the
District Court the same power as the High Court; it is, to that extent,
no longer an option for parties seeking an injunction or a declaration
as their primary or sole relief to commence proceedings in the High
Court, if the matter prima facie falls within the jurisdiction of the
subordinate courts. A solicitor who insouciantly initiates subordinate
court proceedings in the High Court by simply assuming that there is
“sufficient reason” for doing this could be placing his
client’s interests in jeopardy by adopting such a course of action.
There could be a consequential delay arising from the subsequent transfer
of those proceedings to the subordinate court and/or adverse costs consequences
– this may eventually crystallise into a personal liability for
the solicitor concerned.

13 What exactly is the gamut of cost consequences for parties if and
when subordinate court proceedings are commenced in the High Court?
In the usual course of events, costs awarded ought to be assessed on
the subordinate courts scale. A successful defendant in such a matter
should also almost invariably be awarded the lower scale of costs; the
rationale being that it shared a duty to ensure that the proceedings
ought to be heard in the appropriate forum. The fact that O 59 r 27(5)
of the RSC only refers to plaintiffs does not undermine the nature or
scope of this overriding duty and obligation vis-à-vis defendants.
The obligation to correctly initiate proceedings or appropriately transfer
proceedings (as the case may be) rests squarely on all the solicitors
involved in a matter. It should also be noted that instances, where
it would have been obvious from the outset to any reasonable solicitor
that the High Court was not the appropriate forum for the proceedings,
should almost invariably warrant that the solicitor and client costs
be similarly taxed on the subordinate courts scale. In addition, the
court has an overriding inherent jurisdiction to direct that an offending
solicitor be allowed to recover only a fraction of his usual costs for
having transgressed the statutory directives on jurisdiction. A solicitor
may, in these circumstances, end up entitled to only a portion of the
usual costs. Furthermore, if subordinate court proceedings are transferred
out by the High Court, the plaintiffs’ solicitors could be ordered
to bear the consequential costs personally. Such a sanction, which could
be deployed in egregious cases, serves to deter solicitors from commencing
proceedings indiscriminately, in flagrant disregard of the statutory
policy and prerequisites embodied in the SCJA and SCA.

Decision

14 On the basis of the then available facts, it was reasonable for the
plaintiffs’ solicitors, at the outset, to take the view that the
damages their clients might potentially recover would fall in the region
of $300,000 to $400,000. There were a number of factual imponderables
in play. Commencing proceedings in the subordinate courts would have
precluded their clients from recovering damages in excess of the District
Court’s jurisdiction. It must be emphasised that s 39(6) of the
SCA recognises that if there is “reasonable ground for supposing
the amount recoverable” [emphasis added] would be in excess of
the subordinate court’s jurisdiction, the strictures imposed do
not apply. That the plaintiffs did not in fact ultimately recover an
amount in excess of the District Court jurisdiction should not, in the
circumstances of these proceedings, be held against them. The test is
not one of hindsight but of reasonableness refracted through the factual
prism existing when the proceedings were initiated. Needless to say,
if solicitors realise that the upper limit of recoverability falls within
the subordinate courts’ jurisdiction prior to the commencement
of a hearing, steps ought to be taken to immediately transfer the proceedings
to the appropriate forum.

15 There is yet another reason why I was persuaded that it was appropriate
to initiate the subject proceedings in the High Court. It seems clear
to me that if a subordinate court judgment cannot be enforced as a foreign
judgment in another jurisdiction, this could be a “sufficient
reason” for initiating the action in the High Court. Historically,
common law courts in various jurisdictions have only recognised judgments
of other foreign superior courts for the purposes of enforcement (see
Halsbury’s Laws of England vol 10 (4th Ed Reissue, 2002) at para
309):

The chief distinctions between superior and inferior courts are found
in connection with jurisdiction. Prima facie, no matter is deemed to
be beyond the jurisdiction of a superior court unless it is expressly
shown to be so, while nothing is within the jurisdiction of an inferior
court unless it is expressly shown on the face of the proceedings that
the particular matter is within the cognisance of the particular court
…

Another distinction between superior courts and inferior courts is that
while the unreversed judgment of a superior court is conclusive as to
all relevant matters decided by it, the judgment of an inferior court
involving a question of jurisdiction is not final. [emphasis added]

This is a historical anomaly and reality that has to be acknowledged
and acceded to. Indeed only judgments of foreign superior courts are
recognised in Singapore for the purposes of statutory enforcement: see
Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985
Rev Ed) and Reciprocal Enforcement of Foreign Judgments Act (Cap 265,
2001 Rev Ed). If the High Court were to turn away litigants whose sole
means of enforcing a judgment lies in a foreign jurisdiction and if
a judgment of the subordinate courts would not be recognised in that
jurisdiction, such litigants would effectively be deprived of any judicial
assistance by Singapore courts. That surely cannot be right if Singapore
is the appropriate forum to assume jurisdiction for the matters concerned.
It is inconceivable that the Legislature intended that the High Court
should assume a rigid approach by resolutely declining jurisdiction
in such cases, ergo the qualification by means of the safety net of
“sufficient reason”. In my view, Singapore is indeed the
appropriate jurisdiction for the subject proceedings. I do not interpret
Tan J’s decision in Sunlink Engineering ([11] supra) as postulating
anything further than that based on the facts of that case, and considering
the defendant had assets in Singapore, the High Court was not the appropriate
forum. “Sufficient reason” to commence subordinate court
proceedings in the High Court, as opposed to the District Court, had
not been established in that case as the judgment could, to all intents
and purposes, have been enforced in Singapore. Having said that, if
indeed there are concerns about an avalanche of such matters coming
before the High Court, then this should be a matter for law reform.
Perhaps a statutory mechanism to register subordinate court judgments
in the High Court to accord them the status of a decision of a superior
court through a deeming provision, prior to foreign enforcement, can
be contemplated. This should assuage all concerns and fears relating
to “floodgates”. It is interesting to note, until 1993,
s 46 of the Subordinate Courts Act (Cap 321, 1985 Rev Ed) allowed the
District Court to forward judgments to the High Court for execution.
Such judgments were, upon receipt, deemed to have “been made by
the High Court”. Curiously, this provision appears to have been
intended only to facilitate enforcement within the jurisdiction and
was unceremoniously repealed by Act 15 of 1993.

16 For completeness, I should state that if subordinate court proceedings
are entertained in the High Court, only on the basis of intended enforcement
in a foreign jurisdiction, the subordinate courts scale of costs should
continue to be applicable. Such matters are heard by the High Court
purely to facilitate enforcement and an additional layer of costs should
not be added.

17 I was not, however, in the least impressed by the plaintiffs’
remaining contention that the complexity or importance of the issues
raised in the proceedings justified the initiation of proceedings in
the High Court. The issues raised in the proceedings, while interesting,
were well within the purview and competence of the District Court. Only
a case of unusual complexity or one that raises an issue of public interest
or an important point of law could ever warrant such a contention. As
observed in [12], the correct procedure in such a case is to initiate
proceedings in the subordinate courts and then to apply for a transfer
to the High Court. Nor is it tenable to either assume or assert that
an appeal can be properly obviated by initiating proceedings in the
High Court in the first instance. This approach would make a mockery
of, and wholly undermine, the statutory scheme for the division of work
between the courts and will not be countenanced.

18 In the result, as the plaintiffs satisfied ss 39(4)(a) and 39(6)
of the SCA, I held that the plaintiffs were entitled to have commenced
the subject proceedings in the High Court and directed that the plaintiffs’
costs be assessed on the High
Court scale.

Concluding observations

19 In Australian Master Builders Co Pty Ltd v Ng Tai Tuan ([11]
supra), Chan JC rightly asserted that the discretion to transfer proceedings
between courts is an unfettered discretion; the same applies a fortiori
to the discretion to award costs. An unfettered discretion should not
by its very definition be fettered by inflexible guidelines, lest it
evolves in the process into an inflexible rule of thumb. Suffice it
to say that the court will view each such matter that comes before it
by asking, “Was it reasonable in the circumstances, having regard
to the legislative scheme, to have initiated proceedings directly in
the High Court?” The appropriate response will have to be formulated
against the backdrop of the legislative policy that there should be
different horses for different courses.

20 Solicitors must at all times exercise prudence and take the appropriate
steps to initiate civil proceedings in their proper fora. If they fail
to do so they run the risk of being penalised in costs and censured.
They may also find the proceedings delayed if the High Court, on its
own motion or otherwise, decides to transfer what should have started
off as subordinate court proceedings to their proper fora. Parties who
find their hearings delayed as a consequence could in turn legitimately
take their solicitors to task for any such delay and/or unnecessary
incurring of costs. Solicitors could face as a result issues of personal
liability for wasted costs, which would be most unfortunate.

Costs of the plaintiffs to be taxed on the High Court scale.

Reported by Tammy WJ Low.