PERSONAL LIABILITY OF SOLICITOR FOR COSTS
In Munshi Rasal v Enlighten Furniture Decoration Co Pte Ltd [2021] SGCA 23, the Court of Appeal ordered that the appellant’s solicitor is to bear all the costs incurred in the appeal personally.
The facts. The facts in Munshi Rasal v Enlighten Furniture Decoration Co Pte Ltd [2021] SGCA 23 (“MR v EF”) are summarised below:
1. The appellant suffered a workplace accident ([1] – [2] MR v EF).
2. He was awarded $43,464.88 by the Workmen’s Compensation Board in compensation ([3] MR v EF).
3. Dissatisfied, he sued his employer for negligence and for breach of statutory duties. The proceedings were originally commenced in the High Court but was transferred to the District Court ostensibly because the value of the claim was less than $250,000 ([3] MR v EF).
4. The case was dismissed by the District Judge ([4] MR v EF), and on appeal, it was dismissed by the High Court ([5] MR v EF).
5. The appellant appealed to the Court of Appeal ([5] MR v EF).
6. No leave was obtained for the appeal to the Court of Appeal ([7] MR v EF).
7. This was even though the Statement of Claim was for a total sum of approximately $190,000 ([6] MR v EF), and the appellant’s counsel was alerted to this issue at a case management conference ([7] MR v EF) and during the High Court proceedings ([7] MR v EF).
8. And on appeal, the appellant’s counsel continued to suggest that the appellant’s claim exceeded $250,000, though no evidence was adduced to support this ([7] MR v EF).
9. The appellant’s counsel had also suggested that the appellant was entitled to appeal as of right to the Court of Appeal ([8] MR v EF), which, as the Court of Appeal found, ignored the plain language of s. 34(2)(a) of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) ([9] MR v EF).
10. The Court of Appeal also rejected the argument that no leave was needed as the respondent did not apply to strike out the notice of appeal ([10] MR v EF).
Appeal dismissed. In rejecting the appeal, the Court of Appeal found that the findings of the District Judge and the High Court Judge were overwhelmingly supported by evidence, and that even if leave had been sought, no leave would have been granted as the leave requirements were not met ([12] MR v EF).
Personally liable for costs. The Court of Appeal then ordered that the appellant’s solicitor bear all the costs incurred in the appeal personally ([21] MR v EF).
The Court of Appeal held that the applicable test is the three-step test set out in Ridehalgh v Horsefield [1994] Ch 205 at 231 ([17] MR v EF) and found that the appellant’s solicitor had “acted improperly and unreasonably and thereby caused the appellant to incur unnecessary costs.” ([20] MR v EF).
The Court of Appeal emphasized that “[t]he appeal was ill-conceived given that leave was not sought” and “[w]hat was egregious about [the appellant’s solicitor’s] conduct was not merely the fact that he had failed to obtain leave, but that he had persisted in his failure to do so despite having been alerted to the leave requirement on multiple occasions.” ([20] MR v EF).
The Court of Appeal stated that “We were particularly dismayed by [the appellant’s solicitor’s] insistence that he could dispense with the leave requirement… despite the court’s repeated efforts to advise him otherwise on this point.” ([20] MR v EF).
As such, given that “… this hopeless appeal should never have been filed in the first place, and it certainly should never have been filed without leave”, the Court of Appeal ordered at [21] MR v EF that the appellant’s solicitor is to bear all the costs incurred in the appeal personally, instead of ordering the appellant’s solicitor to bear “a portion” of the party-and-party costs. The Court of Appeal further ordered that the appellant’s solicitor is not to charge the appellant for any fees or disbursements incurred in respect of the appeal.
Significance. That solicitors may be held liable for costs of proceedings is not new law. However, it is rare for such an order to be made by the courts, and even rarer for the solicitor to be ordered to bear all the costs of the relevant proceedings. MR v EF is one such rare case. Thus, while we sincerely hope that this situation would not arise again (or at least continues to be rare), MR v EF is nonetheless a useful guide on when such an order may be made.
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