Comfort Management v OGSP Engineering: Costs Allocation After Breach of Contract Dispute

In a suit between Comfort Management Pte Ltd (Plaintiff) and OGSP Engineering Pte Ltd (Defendant), the High Court of Singapore, General Division, presided over by Justice Vinodh Coomaraswamy, addressed the issue of costs following a judgment on the merits of a breach of contract claim and counterclaim related to air conditioning ducting system and mechanical ventilation works. The court ruled that Comfort Management is entitled to recover its costs from OGSP Engineering, but is deprived of 50% of those costs due to failing on several claims and defenses. The court also ruled that the second defendant is entitled to recover his costs from the plaintiff. The court ordered OGSP Engineering to pay GST at 7% on the net sum of $363,030.51 which it owes to Comfort Management.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Following a breach of contract dispute, the court addresses costs allocation, ruling Comfort Management is entitled to recover costs from OGSP Engineering, but is deprived of 50% due to failed claims.

1.7 Decision Date

5 April 2022

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
COMFORT MANAGEMENT PTE LTD	Plaintiff, Defendant in Counterclaim	Corporation	Judgment for Plaintiff	Partial	Zhulkarnain bin Abdul Rahim of Dentons Rodyk & Davidson LLP Philip Teh of Dentons Rodyk & Davidson LLP Paul Wong of Dentons Rodyk & Davidson LLP Andrea Gan of Dentons Rodyk & Davidson LLP Francis Wu of Dentons Rodyk & Davidson LLP
OGSP ENGINEERING PTE LTD	Defendant, Plaintiff in Counterclaim	Corporation	Judgment Against Defendant	Lost	Nicholas Lazarus of Justicius Law Corporation
PINTU KUMAR SARKER	Defendant	Individual	Claim Dismissed	Won

3. Judges

Judge Name	Title	Delivered Judgment
Vinodh Coomaraswamy	Judge of the High Court	Yes

4. Counsels

Counsel Name	Organization
Zhulkarnain bin Abdul Rahim	Dentons Rodyk & Davidson LLP
Philip Teh	Dentons Rodyk & Davidson LLP
Paul Wong	Dentons Rodyk & Davidson LLP
Andrea Gan	Dentons Rodyk & Davidson LLP
Francis Wu	Dentons Rodyk & Davidson LLP
Nicholas Lazarus	Justicius Law Corporation

4. Facts

Lead Management Engineering & Construction Pte Ltd subcontracted the Works to the plaintiff under the Lead Contract.
The plaintiff subcontracted the Works to the first defendant under the Comfort Contract, a lump-sum contract at a price of $1.25m.
The Comfort Contract was back-to-back with the Lead Contract.
The second defendant was the plaintiff’s project manager for the Works.
The first defendant commenced the Works in October 2013 and demobilised its team in October 2014 before completing the Works.
The plaintiff sought to recover a total of just over $1.5m from the first defendant on four claims.
The first defendant sought to recover a total of just over $780,000 from the plaintiff on two counterclaims.

5. Formal Citations

Comfort Management Pte Ltd v OGSP Engineering Pte Ltd and another, Suit No 509 of 2017, [2022] SGHC 77
Comfort Management Pte Ltd v OGSP Engineering Pte Ltd and another, , [2020] SGHC 165

6. Timeline

Date	Event
2013-10-01	First defendant commenced the Works
2014-10-01	First defendant demobilised its team and withdrew from the site
2020-09-15	Hearing date
2020-09-15	Judgment reserved
2022-03-07	Hearing date
2022-04-06	Judgment reserved
2022-04-06	Judgment issued

7. Legal Issues

Allocation of Costs
- Outcome: The court ruled that Comfort Management is entitled to recover its costs from OGSP Engineering, but is deprived of 50% of those costs due to failing on several claims and defenses.
- Category: Procedural
- Sub-Issues:
  - Departure from general rule
  - Type I order
  - Type II order
- Related Cases:
  - [2007] EWHC 2699 (Comm)
  - [2004] 2 Lloyd’s Rep 119
  - [2000] ECDR 266
  - [2003] BLR 331
  - 149 NLJ 1222
  - [2006] EWHC 2428 (Ch)
  - [1998] EMLR 161
  - [2005] EWCA Civ 358
  - [2003] EWCA Civ 402
  - [2008] EWHC 2280 (TCC)
  - [1992] 1 WLR 1207
  - [1994] 2 SLR(R) 501
  - [1891] AC 173
  - (1998) 193 CLR 72
  - [2011] EWCA Civ 790
  - [1976] Fam 93
  - [1984] 2 WLR 349
  - [2009] 4 SLR(R) 155
  - [2020] SGHC 140
  - [1999] 1 WLR 347
  - [2005] 3 SLR(R) 116
  - [2006] EWHC 2885 (Comm)
  - [2004] EWCA Civ 1703
  - [2002] 1 WLR 2409
  - [2001] EWCA Civ 2020
  - [1999] 1 WLR 1507
  - [2001] EWCA Civ 535
  - [2012] EWCA Civ 494
  - [2008] FCAFC 107
  - [1929] 1 AC 68
  - [2014] 1 SLR 245
Breach of Contract
- Outcome: The court found that the first defendant owed the plaintiff a net sum of $363,030.51, subject to GST.
- Category: Substantive

8. Remedies Sought

Monetary Damages
Costs

9. Cause of Actions

Breach of Contract
Breach of Duty
Tort

10. Practice Areas

Commercial Litigation
Construction Litigation

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Comfort Management Pte Ltd v OGSP Engineering Pte Ltd and another	High Court	Yes	[2020] SGHC 165	Singapore	Judgment on the merits of the action from which the consequential issues of costs arise.
HLB Kidsons (A Firm) v Lloyds Underwriters subscribing to Lloyds Policy No 621/PKID00101 & Others	English High Court	Yes	[2007] EWHC 2699 (Comm)	England and Wales	Cited for the principles applicable to awarding costs, including the court's wide discretion and the general rule that costs should follow the event.
Kastor Navigation v Axa Global Risks	Court of Appeal	Yes	[2004] 2 Lloyd’s Rep 119	England and Wales	Cited to support the general rule that costs should follow the event and that the 'successful party' must be determined by reference to the litigation as a whole.
Scholes Windows v Magnet (No 2)	N/A	Yes	[2000] ECDR 266	N/A	Cited to support the principle that real weight should be given to the overall success of the winning party when awarding costs.
Barnes v Time Talk	Court of Appeal	Yes	[2003] BLR 331	England and Wales	Cited for the importance of identifying the 'successful party' at the outset when awarding costs and that disputes are ultimately about money in commercial litigation.
BCCI v Ali (No 4)	N/A	Yes	149 NLJ 1222	N/A	Cited for the principle that the question of who is the successful party is a matter for the exercise of common sense.
Fulham Leisure Holdings v Nicholson Graham & Jones	English High Court	Yes	[2006] EWHC 2428 (Ch)	England and Wales	Cited for the principle that the matter must be looked at in a realistic and commercially sensible way.
Roache v News Group Newspapers Limited and others	N/A	Yes	[1998] EMLR 161	N/A	Cited for the principle that the judge must look closely at the facts and ask who, as a matter of substance and reality, has won.
Burchell v Bullard	Court of Appeal	Yes	[2005] EWCA Civ 358	England and Wales	Cited for the principle that in commercial litigation, the event is typically in favor of the party whom the court has found is entitled to receive money.
AL Barnes Limited v Time Talk (UK) Limited	Court of Appeal	Yes	[2003] EWCA Civ 402	England and Wales	Cited for the principle that the most important thing in deciding who is the successful party is to identify the party who is to pay money to the other.
Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd and another	English High Court	Yes	[2008] EWHC 2280 (TCC)	England and Wales	Cited for the principle that in litigation comprising both claims and counterclaims, the event is typically in favor of the party whom the court has found is entitled to receive money.
Re Elgindata (No. 2)	Court of Appeal	Yes	[1992] 1 WLR 1207	England and Wales	Cited for the five principles to regulate the judicial discretion to depart from the general rule by making a Type I or a Type II order.
Tullio Planeta v Maoro Andrea G	Court of Appeal	Yes	[1994] 2 SLR(R) 501	Singapore	Endorsed the Elgindata principles regarding the judicial discretion to depart from the general rule when awarding costs.
Sharp v Wakefield	House of Lords	Yes	[1891] AC 173	United Kingdom	Cited for the principle that judicial discretion must be exercised on fixed principles, adhering to reason and justice.
Oshlack v Richmond River Council	N/A	Yes	(1998) 193 CLR 72	Australia	Cited for the principle that every party has a reasonable expectation that, if he succeeds, he will recover his costs from the unsuccessful party.
Fox v Foundation Piling Ltd	Court of Appeal	Yes	[2011] EWCA Civ 790	England and Wales	Warned against the growing tendency to depart from the general rule too far and too often, leading to uncertainty and satellite litigation over costs.
Calderbank v Calderbank	N/A	Yes	[1976] Fam 93	N/A	Mentioned in passing as an example of Calderbank offers at common law.
Cutts v Head and another	N/A	Yes	[1984] 2 WLR 349	N/A	Mentioned in passing as an example of Calderbank offers at common law.
Ng Eng Ghee and others v Mamata Kapildev Dave and others (Horizon Partners Pte Ltd, intervener) and another appeal	Court of Appeal	Yes	[2009] 4 SLR(R) 155	Singapore	Cited for the principle that a party who succeeds in litigation is accorded complete justice if and only if he recovers compensation for the costs of the litigation.
Element Six Technologies Ltd v IIa Technologies Pte Ltd	High Court	Yes	[2020] SGHC 140	Singapore	Cited for the principle that the indemnity principle incentivizes discipline in litigation by shifting the costs to the unsuccessful party.
R v Lord Chancellor, Ex parte Child Poverty Action Group and another matter	N/A	Yes	[1999] 1 WLR 347	N/A	Cited for the principle that the indemnity principle focuses the minds of parties on the need to assess carefully the strength of their case.
Lim Lie Hoa v Ong Jane Rebecca and others and another appeal	Court of Appeal	Yes	[2005] 3 SLR(R) 116	Singapore	Cited for the principle that the factors enumerated in Order 59 Rule 6A are not intended to be exhaustive or to detract from the width of the discretion conferred by Order 59 Rule 2(2).
Travelers Casualty and Surety Co of Canada v Sun Life Assurance Company of Canada (UK)	English High Court	Yes	[2006] EWHC 2885 (Comm)	England and Wales	Cited for the principle that the aim always is to make an order that reflects the overall justice of the case.
Smithkline Beecham plc and another v Apotex Europe Limited and others	Court of Appeal	Yes	[2004] EWCA Civ 1703	England and Wales	Cited for the difficulties associated with segregating the costs of an individual issue and the impossibility of achieving great precision in awarding costs.
English v Emery Reimbold & Strick Ltd	Court of Appeal	Yes	[2002] 1 WLR 2409	England and Wales	Cited for the principle that an order which allows or disallows costs by reference to certain issues should be made only if other forms of an order cannot be made which sufficiently reflect the justice of the case.
Summit Property Limited v Pitmans (a firm)	Court of Appeal	Yes	[2001] EWCA Civ 2020	England and Wales	Cited for the principle that a successful party could be subject to a Type II order even if he did not act unreasonably or improperly.
A.E.I. Rediffusion Music Limited v Phonographic Performance Limited	N/A	Yes	[1999] 1 WLR 1507	N/A	Cited for the principle that it is no longer necessary for a party to have acted unreasonably or improperly before he can be required to pay the costs of the other party of a particular issue on which he has failed.
Johnsey Estates (1990) Ltd v The Secretary of State for the Environment	Court of Appeal	Yes	[2001] EWCA Civ 535	England and Wales	Expressed enthusiasm for the discretion to make a Type II order.
Specsavers International Healthcare Ltd and others v Asda Stores Ltd	Court of Appeal	Yes	[2012] EWCA Civ 494	England and Wales	Cited for the principle that the nature of typical intellectual property litigation lends itself more readily to Type II orders.
Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2)	N/A	Yes	[2008] FCAFC 107	Australia	Cited for the principle that the ultimate objective in making a costs order is to produce a result which is fair to both the successful and the unsuccessful parties.
Medway Oil and Storage Co Ltd v Continental Contractors Ltd & Ors	N/A	Yes	[1929] 1 AC 68	N/A	Cited for the principle that the successful party should ordinarily recover all of his common costs of the action.
Then Khek Koon and another v Arjun Permanand Samtani and another and other suits	N/A	Yes	[2014] 1 SLR 245	Singapore	Cited for the principle that the indemnity is not an actual indemnity but a deemed indemnity assessed in accordance the Costs Guidelines.

13. Applicable Rules

Rule Name
Rules of Court

14. Applicable Statutes

Statute Name	Jurisdiction
Supreme Court of Judicature Act 1969	Singapore
Civil Law Act 1909	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Works
Lead Contract
Comfort Contract
Variation Orders
Liquidated Damages
Overpayment
Back Charges
GST
Costs
Disbursements
Professional Fees

15.2 Keywords

costs
breach of contract
construction
singapore
litigation
costs allocation
OGSP Engineering
Comfort Management

17. Areas of Law

Area Name	Relevance Score
Costs	95
Civil Practice	80
Civil Litigation	75
Construction Law	65
Contract Law	60
Construction Contracts	55

16. Subjects

Civil Procedure
Contract Law
Construction Law
Costs