DB Trustees v Consult Asia: Personal Liability for Costs in Security Redemption Dispute

The Singapore Court of Appeal heard two appeals, CA 19/2009 and CA 90/2009, involving DB Trustees (Hong Kong) Ltd and Consult Asia Pte Ltd, concerning the validity of receivership appointments and related costs. The court found in favor of DB Trustees, ordering Consult Asia to pay costs on an indemnity basis. Subsequently, the court considered whether Ms. Koh, the director and majority shareholder of Consult Asia, should be personally liable for these costs. The court determined that Ms. Koh should bear the costs jointly and severally with Consult Asia, citing her unreasonable conduct, abuse of process, and the company's inability to pay.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Ms. Koh to bear the costs of CA 19/2009 and CA 90/2009, which were awarded on an indemnity basis, jointly and severally with Consult Asia.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding security redemption. Court held director personally liable for costs due to unreasonable conduct and abuse of process.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
DB Trustees (Hong Kong) LtdAppellant, RespondentCorporationAppeal AllowedWon
Consult Asia Pte LtdRespondent, AppellantCorporationAppeal DismissedLost
Florence Koh Lee KhengOtherIndividualCosts OrderLost

3. Judges

Judge NameTitleDelivered Judgment
Chan Sek KeongChief JusticeYes
Andrew Phang Boon LeongJustice of the Court of AppealYes
V K RajahJustice of the Court of AppealYes

4. Counsels

Counsel NameOrganization
Sarjit Singh GillShook Lin & Bok LLP
Koh JunxiangShook Lin & Bok LLP
Ernest Yogarajah BalasubramaniamArfat Selvam Alliance LLC

4. Facts

  1. Consult Asia entered into an arrangement with UBS for US$32 million in secured notes.
  2. The notes were secured by a floating charge and a legal mortgage over properties.
  3. Consult Asia failed to redeem the notes by the stipulated date.
  4. DB Trustees appointed receivers and managers over Consult Asia.
  5. Ms. Koh, the director, refused to cooperate with the receivers.
  6. Consult Asia was unable to obtain refinancing to redeem the notes.
  7. The court found Ms. Koh's conduct to be unreasonable and an abuse of process.

5. Formal Citations

  1. DB Trustees (Hong Kong) Ltd v Consult Asia Pte Ltd and another appeal, Civil Appeal No 19 of 2009 (Originating Summons No 1044 of 2008) and Civil Appeal No 90 of 2009 (Originating Summons No 800 of 2009), [2010] SGCA 21

6. Timeline

DateEvent
Consult Asia entered into an arrangement with UBS AG to issue US$32 million worth of senior secured notes.
Merrill Lynch sought to confirm arrangements to act as exclusive placement agent for Consult Asia's issuance of SGD 90 million principal amount of senior secured notes.
Consult Asia failed to redeem the Notes by the contractually stipulated redemption date.
DB Trustees appointed receivers and managers over the business and assets of Consult Asia.
OS 1044/2008 first came before the OS 1044/2008 Judge.
OS 1044/2008 was heard on its merits.
Consult Asia failed to comply with the deadline to redeem the Notes.
DB Trustees re-appointed the Receivers.
Receivers applied for Ms Koh to be made to personally provide security for DB Trustees’ costs in CA 19/2009.
OS 800/2009 was heard by the OS 800/2009 Judge.
Closing date for tender exercise in respect of the Changi Road property.
Closing date for tender exercise in respect of the Balestier Road property; urgent application granted for DB Trustees to be restrained from dealing with Consult Asia’s assets.
Hearings of CA 19/2009 and CA 90/2009.
Hearings of CA 19/2009 and CA 90/2009; DB Trustees filed an affidavit with valuation reports.
Consult Asia filed an affidavit by Ms Koh.
Decision released in favor of DB Trustees for both CA 19/2009 and CA 90/2009; Mr. Singh submitted that Ms. Koh should be ordered to pay the costs of both appeals.
Mr Balasubramaniam and Mr Daniel responded with letters.
Mr Singh put forward reasons in support of his submission that Ms Koh ought to be made to pay the costs of the appeals.
Decision Date

7. Legal Issues

  1. Personal Liability for Costs
    • Outcome: The court held that Ms. Koh should be personally liable for the costs of the appeals due to her unreasonable behavior, abuse of process, and close connection to the proceedings.
    • Category: Procedural
    • Sub-Issues:
      • Abuse of process
      • Unreasonable conduct
      • Alter ego of company
    • Related Cases:
      • [1994] 1 QB 179
      • [2004] 1 WLR 2807
  2. Validity of Receivership Appointment
    • Outcome: The court upheld the validity of the receivership appointment.
    • Category: Substantive

8. Remedies Sought

  1. Costs
  2. Rescission of Receivership Appointment

9. Cause of Actions

  • Breach of Contract
  • Abuse of Process

10. Practice Areas

  • Commercial Litigation
  • Appeals
  • Insolvency
  • Receivership

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
DB Trustees (Hong Kong) Ltd v Consult Asia Pte Ltd and another appealCourt of AppealYes[2009] SGCA 39SingaporeThe current judgment is a supplement to the grounds of decision in this cited case.
Karting Club of Singapore v Mak David and others (Wee Soon Kim Anthony, intervener)High CourtYes[1992] 1 SLR(R) 786SingaporeCited for the principle that the court's power to award costs is completely unfettered and must be exercised judicially, and to illustrate a close connection between a non-party and legal proceedings.
O’Keefe v Hayes Knight GTO Pty LtdFederal Court of AustraliaYes[2005] FCA 1559AustraliaCited for the principle that the jurisdiction of the court to award costs is sufficiently wide to enable the court to make an order for costs in favor of a non-party.
Knight and another v FP Special Assets Limited and othersHigh Court of AustraliaYes(1992) 174 CLR 178AustraliaCited for the principle that the court can award costs against a non-party.
Symphony Group PLC v HodgsonEnglish Court of AppealYes[1994] 1 QB 179England and WalesCited for material considerations to be taken into account when ordering costs against a non-party.
Dymocks Franchise Systems (NSW) Pty Ltd v Todd and others (Associated Industrial Finance Pty Ltd, Third Party)Privy CouncilYes[2004] 1 WLR 2807New South WalesCited for relevant considerations when awarding costs against a non-party, particularly when the non-party controls or benefits from the proceedings.
Globe Equities Limited v Globe Legal Services Limited and orsUnspecifiedYes[1999] BLR 232UnspecifiedCited for the principle that the ultimate test is whether in all the circumstances it is just to exercise the power to make a non-party pay the costs of the proceedings.
Chin Yoke Choong Bobby and another v Hong Lam Marine Pte LtdCourt of AppealYes[1999] 3 SLR(R) 907SingaporeCited for the principle that an order for costs of court proceedings could be granted against a non-party where just to do so.
Godfrey Gerald QC v UBS AG and othersCourt of AppealYes[2003] 2 SLR(R) 306SingaporeCited to illustrate a close connection between a non-party and legal proceedings.
Shah and another v Karanjia and anotherEnglish High CourtYes[1993] 4 All ER 792England and WalesCited as a case where the lack of prior warning was taken into consideration to dismiss an application for a non-party to pay costs.
Har Chee Choey v Lee Khai Seng and anotherDistrict CourtYes[2003] SGDC 237SingaporeCited as a case where the court held that it could not grant the application to make a non-party pay costs because it was oppressive to the non-party to be sprung with a surprise attack.
DB Trustees (Hong Kong) Ltd v Consult Asia Pte LtdHigh CourtYes[2009] SGHC 62SingaporeThe reasons for the OS 1044/2008 Judge's decision can be found in this case.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 59 r 2(2)Singapore
Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 59 r 3(2)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Receivership
  • Security
  • Notes
  • Redemption
  • Indemnity Costs
  • Personal Liability
  • Abuse of Process
  • Director's Duties
  • Alter Ego

15.2 Keywords

  • receivership
  • costs
  • personal liability
  • security
  • notes
  • redemption
  • DB Trustees
  • Consult Asia
  • Singapore
  • appeal

17. Areas of Law

Area NameRelevance Score
Costs80
Company Law70
Bankruptcy60
Contract Law50
Commercial Disputes40
Estoppel30
Fiduciary Duties30
Civil Procedure20
Injunctions20
Misrepresentation20

16. Subjects

  • Civil Procedure
  • Company Law
  • Contract Law
  • Costs
  • Securities
  • Trusts