Management Corporation v Wintree: Offer to Settle & Indemnity Costs in Construction Defect Claim

In Management Corporation Strata Title Plan No 3563 v Wintree Investment Pte Ltd, the High Court of Singapore heard an appeal against the cost orders made by the assistant registrar. The plaintiff, Management Corporation Strata Title Plan No 3563, brought a claim against multiple defendants, including Leng Ee Construction Pte Ltd, for alleged defects in a development. Leng Ee Construction Pte Ltd made an offer to settle, which was not accepted. The claim against Leng Ee Construction Pte Ltd was struck out. The court dismissed the appeal and ordered costs to be paid by the appellant to the respondent.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding cost orders after striking out claim. Court considered offer to settle and awarded indemnity costs against the appellant.

1.7 Decision Date

1 May 2018

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
The Management Corporation Strata Title Plan No 3563	Plaintiff, Appellant	Corporation	Appeal Dismissed	Lost	Ponnampalam Sivakumar of Bernard & Rada Law Corporation Liao Ruiyi of Bernard & Rada Law Corporation
Wintree Investment Pte Ltd	Defendant	Corporation
Greatearth Construction Pte Ltd	Defendant	Corporation
P & T Consultants Pte Ltd	Defendant	Corporation
Maxbond Singapore Pte Ltd	Defendant	Corporation
Leng Ee Construction Pte Ltd	Defendant, Respondent	Corporation	Costs awarded	Won	Twang Kern Zern of Central Chambers Law Corporation
Akzo Nobel Paints (Singapore) Pte Ltd	Defendant	Corporation
Greatearth Corporation Pte Ltd	Third Party	Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Lee Seiu Kin	Judge	Yes

4. Counsels

Counsel Name	Organization
Ponnampalam Sivakumar	Bernard & Rada Law Corporation
Liao Ruiyi	Bernard & Rada Law Corporation
Twang Kern Zern	Central Chambers Law Corporation

4. Facts

The appellant brought a claim in respect of various alleged defects in the Development.
The respondent was engaged as a sub-contractor to undertake part of the works in the Development.
The respondent served an offer to settle on the appellant, which was not accepted.
The respondent’s application for striking out was granted without any objection by the appellant.
The AR ordered the appellant to pay the respondent costs of the action which are to be taxed.
The AR made cost orders which form the subject matter of the present appeal.

5. Formal Citations

Management Corporation Strata Title Plan No 3563 v Wintree Investment Pte Ltd and others, Suit No 328 of 2016, [2018] SGHC 111

6. Timeline

Date	Event
2016-04-04	Claim brought by the appellant
2016-06-27	Respondent filed its defence
2016-06-27	Respondent served the offer to settle on the appellant
2017-06-08	Respondent filed summons to strike out the appellant’s claim
2017-07-17	Respondent’s application for striking out was granted
2017-10-24	Assistant Registrar made cost orders
2018-01-15	Appeal dismissed
2018-05-02	Grounds of decision issued

7. Legal Issues

Offer to Settle
- Outcome: The court found that the offer to settle was valid and that the cost implications of Order 22A of the Rules of Court were triggered.
- Category: Procedural
- Sub-Issues:
  - Validity of offer to settle
  - Compliance with Order 22A of the Rules of Court
  - Whether the offer was a serious and genuine offer to settle
Indemnity Costs
- Outcome: The court ordered indemnity costs against the appellant from the date of the offer to settle.
- Category: Procedural
- Sub-Issues:
  - Whether the court should exercise its discretion to order indemnity costs
  - Whether the striking-out of the appellant’s claim constituted a ‘judgment’ within the meaning of Order 22A rule 9(3)(b) of the Rules of Court
Functus Officio
- Outcome: The court found that the AR was not functus officio and rightly held that she had jurisdiction to rule on the issue of costs.
- Category: Procedural
- Sub-Issues:
  - Whether the AR was functus officio and should not have made the cost order

8. Remedies Sought

Costs

9. Cause of Actions

Breach of Contract
Negligence

10. Practice Areas

Construction Litigation
Commercial Litigation

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Merchant Industries (S) Pte Ltd v X-Media Communications Pte Ltd	High Court	Yes	[2001] SGHC 338	Singapore	Cited for the principle that dismissal of a claim is treated the same way as a judgment for the purposes of Order 22A rule 9(3) of the Rules of Court.
The “Endurance 1”	N/A	Yes	[1998] 3 SLR(R) 970	N/A	Cited to argue that an offer must be serious and genuine before it will attract the cost consequences of Order 22A rule 9 of the Rules of Court.
Singapore Airlines Ltd and another v Fujitsu Microelectronics (Malaysia) Sdn Bhd and others	N/A	Yes	[2001] 1 SLR(R) 38	N/A	Cited to argue that an offer should contain an element that would induce or facilitate settlement.
Man B&W Diesel S E Asia Pte Ltd and another v PT Bumi International Tankers	N/A	Yes	[2004] 3 SLR(R) 267	N/A	Cited for the principle that what constitutes a serious and genuine offer to settle must depend on the circumstances of the case.
Lim Geok Lin Andy v Yap Jin Meng Bryan and another appeal	N/A	Yes	[2017] 2 SLR 760	N/A	Cited for the key question to ask is whether the offeror is effectively expecting the other party to capitulate.
Data General (Canada) Ltd v Molnar Systems Group Inc	N/A	Yes	(1991) 85 DLR (4th) 392	N/A	Endorsed by the Court of Appeal in Man B&W Diesel, is that where it is clear that a plaintiff will succeed in obtaining judgment, it should not have to forgo part of its claim in order to avail itself of a rule that aims to discourage a defendant from delaying the judicial process.
Denis Matthew Harte v Tan Hun Hoe and Another	High Court	Yes	[2001] SGHC 19	Singapore	Cited for the principle that whether or not Order 22A rule 10 of the Rules of Court is triggered by reason of a defendant’s joint liability is an issue to be determined based on the pleadings.
Singapore Airlines Ltd v Tan Shwu Leng	N/A	Yes	[2001] 3 SLR(R) 439	N/A	Cited for the OTS regime aims to spur the parties to bring litigation to an expeditious end without judgment, and thus to save costs and judicial time.
Tan Shwu Leng v Singapore Airlines Limited and Another	High Court	Yes	[2001] SGHC 51	Singapore	Cited for the test of favourability usually rests on the dollar value of what has been awarded
CCM Industrial Pte Ltd v Uniquetech Pte Ltd	N/A	Yes	[2009] 2 SLR(R) 20	N/A	Cited for favourability should also be interpreted in context and may depend on the terms of the particular offer

13. Applicable Rules

Rule Name
Order 18 rule 19
Order 22A rule 9
Order 22A rule 10
Order 22A rule 9(2)(b)
Order 22A rr 9 and 12

14. Applicable Statutes

Statute Name	Jurisdiction
Rules of Court (Cap 322, R 5, 2014 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Offer to settle
Indemnity costs
Standard costs
Striking out
Functus officio
Joint and several liability

15.2 Keywords

Offer to settle
Indemnity costs
Construction defects
Rules of Court
Singapore High Court

17. Areas of Law

Area Name	Relevance Score
Offer to Settle	90
Costs	85
Civil Practice	75
Appeal	40
Defect Claims	35
Contract Law	30
Construction Law	30
Building and Construction Contracts	25
Damages	20

16. Subjects

Civil Litigation
Cost Orders
Offer to Settle