Cova Group v Advanced Submarine Networks: Security for Costs in Construction Equipment Rental Dispute

In Cova Group Holdings Ltd v Advanced Submarine Networks Pte Ltd and Tiong Woon Offshore Pte Ltd, the General Division of the High Court of Singapore addressed appeals regarding security for costs. Cova Group, the claimant, was ordered to provide security for costs to both defendants, Advanced Submarine Networks and Tiong Woon Offshore, in relation to a dispute over construction equipment rental for a Taiwan project. The court dismissed Cova Group's appeals, upholding the order for security for costs, finding that the defendants had raised plausible defenses and that Cova Group, being a foreign entity, could pose enforcement challenges. The court also considered the overlap between the defendants' defenses and counterclaims, ultimately concluding that it did not preclude the order for security for costs.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Claimant's appeals dismissed; claimant to furnish security for costs to the defendants.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court orders Cova Group to provide security for costs to Advanced Submarine Networks and Tiong Woon in a construction equipment rental dispute.

1.7 Decision Date

26 June 2023

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Cova Group Holdings Ltd	Claimant, Appellant	Corporation	Appeals Dismissed	Lost	Lee Koon Foong Adam Hariz of Joseph Tan Jude Benny LLP Tan Shi Yun Jolene of Joseph Tan Jude Benny LLP Sonia Elizabeth Rajendra of Joseph Tan Jude Benny LLP
Advanced Submarine Networks Pte Ltd	Defendant, Respondent	Corporation	Security for Costs Granted	Won	Ramachandran Doraisamy Raghunath of PDLegal LLC Cathryn Neo Mei Qin of PDLegal LLC Vincent Lee Hong Hui of PDLegal LLC
Tiong Woon Offshore Pte Ltd	Defendant, Respondent	Corporation	Security for Costs Granted	Won	Abirame S of Asia Ascent Law Corporation Chia Chee Hyong Leonard of Asia Ascent Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Goh Yihan	Judicial Commissioner	Yes

4. Counsels

Counsel Name	Organization
Lee Koon Foong Adam Hariz	Joseph Tan Jude Benny LLP
Tan Shi Yun Jolene	Joseph Tan Jude Benny LLP
Sonia Elizabeth Rajendra	Joseph Tan Jude Benny LLP
Ramachandran Doraisamy Raghunath	PDLegal LLC
Cathryn Neo Mei Qin	PDLegal LLC
Vincent Lee Hong Hui	PDLegal LLC
Abirame S	Asia Ascent Law Corporation
Chia Chee Hyong Leonard	Asia Ascent Law Corporation

4. Facts

Claimant agreed to rent construction equipment to Global Explorer, a subcontractor of the first defendant.
The equipment was loaded on board the barge owned by the second defendant.
Global Explorer became involved in the Yunlin Wind Power Project in Taiwan.
Global Explorer entered into liquidation in Malaysia.
Claimant terminated the proposal and demanded the return of the equipment.
Second defendant exercised a purported lien over the equipment due to Global Explorer’s failure to pay charter hire fees.
Defendants did not return the equipment, leading the claimant to commence legal action.

5. Formal Citations

Cova Group Holdings Ltd v Advanced Submarine Networks Pte Ltd and another, Originating Claim No 236 of 2022 (Registrar’s Appeals Nos 57, 58, 74 and 75 of 2023), [2023] SGHC 178

6. Timeline

Date	Event
2019-02-28	Claimant agreed to rent construction equipment to Global Explorer Sdn Bhd.
2021-02-02	Claimant wrote a proposal to Global Explorer for rental of carousel and tensioner.
2021-02-08	Finalised purchase order made for rental of carousel and tensioner.
2022-07-07	Global Explorer entered into liquidation in Malaysia.
2022-07-14	Claimant terminated the Proposal.
2022-07-14	Claimant wrote to the first and second defendants.
2022-07-19	Claimant notified that the second defendant had exercised a purported lien over the Equipment.
2022-07-22	Claimant wrote to the second defendant.
2022-08-22	Claimant wrote to the defendants to demand return of the Equipment.
2022-09-02	Claimant obtained an injunction preventing the defendants from operating the Equipment.
2022-01-01	Defendants brought SUM 4255 and SUM 4260 to apply for security for costs.
2023-05-23	Judgment reserved.
2023-06-27	Judgment issued.

7. Legal Issues

Security for Costs
- Outcome: The court dismissed the claimant's appeals, ordering the claimant to furnish security for costs to the defendants.
- Category: Procedural
- Sub-Issues:
  - Claimant ordinarily resident out of jurisdiction
  - Overlap between defence and counterclaim
  - Risk of stifling claimant's claim
- Related Cases:
  - [2017] SGHCR 5
  - [2022] SGHC 253
  - [1999] SLR(R) 112
  - [2016] 2 SLR 118
  - [2001] 3 SLR(R) 208
  - [2023] SGHC 160
  - [2004] 2 SLR(R) 427
  - [2009] 3 SLR(R) 1017
  - [1990] 2 SLR(R) 514
  - [2020] 1 SLR 115
  - [1992] 2 SLR(R) 358
  - [2002] 2 SLR(R) 738
  - [2009] 2 SLR(R) 796
  - [2014] 3 SLR 329
  - [2016] AC 1
  - [2006] SGHC 154
  - (1990) 59 BLR 43
  - [2010] 2 CLC 661
  - [2015] 2 BCLC 560
  - [1993] BCLC 307
  - [2016] SGCA 46
  - (1885) 28 Ch D 482
  - [2001] BCJ No 1722
  - [2019] VSC 702
  - [2021] VSC 404
  - [2008] 4 SLR(R) 224
  - [2022] SGHCR 9
  - [2018] 5 SLR 105
  - [2017] SGCA(I) 2
  - [1974] 3 All ER 715

8. Remedies Sought

Return of Equipment
Damages
Injunction

9. Cause of Actions

Conversion
Trespass
Detinue
Unjust Enrichment
Fraudulent Misrepresentation
Conspiracy to cause loss by unlawful means

10. Practice Areas

Commercial Litigation

11. Industries

Construction
Offshore
Energy

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Siva Industries and Holdings Ltd v Foreguard Shipping I Singapore Pte Ltd	High Court	Yes	[2017] SGHCR 5	Singapore	Cited for the two-stage framework in considering whether security for costs should be ordered.
Dai Yi Ting v Chuang Fu Yuan (Grabcycle (SG) Pte Ltd and another, third parties)	High Court	Yes	[2022] SGHC 253	Singapore	Cited for the importance of the Ideals in O 3 r 1 of the ROC 2021.
Creative Elegance (M) Sdn Bhd v Puay Kim Seng and another	Court of Appeal	Yes	[1999] SLR(R) 112	Singapore	Cited for the factors typically considered relevant to an application for security for costs.
SIC College of Business and Technology Pte Ltd v Yeo Poh Siah and others	Court of Appeal	Yes	[2016] 2 SLR 118	Singapore	Cited for the circumstances considered in the context of s 388 of the Companies Act and the inappropriateness of awarding security for costs where the claim and counterclaim are co-extensive.
L & M Concrete Specialists Pte Ltd v United Eng Contractors Pte Ltd	High Court	Yes	[2001] 3 SLR(R) 208	Singapore	Cited for the list of circumstances to consider when determining security for costs.
SW Trustees Pte Ltd (in compulsory liquidation) and another v Teodros Ashenafi Tesemma and others (Teodros Ashenafi Tesemma, third party)	High Court	Yes	[2023] SGHC 160	Singapore	Cited for the purposes behind the provision of security for costs.
Jurong Town Corp v Wishing Star Ltd	Court of Appeal	Yes	[2004] 2 SLR(R) 427	Singapore	Cited for the principle that it is no longer an inflexible rule that a claimant resident abroad will be ordered to provide security for costs.
Zhong Da Chemical Development Co Ltd v Lanco Industries Ltd	High Court	Yes	[2009] 3 SLR(R) 1017	Singapore	Cited for the principle that it would be ideal if the defendant does not experience the inconvenience and expense of enforcing his judgment in a different jurisdiction.
Lek Swee Hua and another v American Express International Inc	High Court	Yes	[1990] 2 SLR(R) 514	Singapore	Cited for the principle that the court has the discretion to order security for costs to be furnished by a foreign claimant even where there are co-claimants resident within the jurisdiction.
Red Star Marine Consultants Pte Ltd v Personal Representatives of Satwant Kaur d/o Sardara Singh, deceased and another	Court of Appeal	Yes	[2020] 1 SLR 115	Singapore	Cited for the principle that there is no hard and fast rule that the knowledge or conduct of a sole director or shareholder must be attributed to the company.
Sembawang Engineering Pte Ltd v Priser Asia Engineering Pte Ltd	High Court	Yes	[1992] 2 SLR(R) 358	Singapore	Cited for the principle that the court will not generally enter into a detailed examination of the merits at this stage of the proceedings.
Ooi Ching Ling Shirley v Just Gems Inc	Court of Appeal	Yes	[2002] 2 SLR(R) 738	Singapore	Cited for the principle that security for costs may be ordered if it may be difficult for the defendants to enforce any judgment against the claimant in the MI as there is no reciprocal treaty for the enforcement of foreign judgments between the MI and Singapore.
Ong Jane Rebecca v Pricewaterhousecoopers and others	High Court	Yes	[2009] 2 SLR(R) 796	Singapore	Cited for the principle that considerations of impecuniosity in this context are tied to the notion that ordering security might unfairly stifle the claimant’s claim if the claimant is unable to provide the security ordered.
Ho Kang Peng v Scintronix Corp Ltd (formerly known as TTL Holdings Ltd)	Court of Appeal	Yes	[2014] 3 SLR 329	Singapore	Cited for the principle that a director’s knowledge should be attributed to the company where the infringement of third-party rights is the subject of an action against the company.
Bilta (UK) Ltd (in liquidation) and others v Nazir and others (No 2)	UK Supreme Court	Yes	[2016] AC 1	United Kingdom	Cited for the principle that a director’s knowledge should be attributed to the company where the infringement of third-party rights is the subject of an action against the company.
PT Muliakeramik Indahraya TBK v Nam Huat Tiling & Panelling Co Pte Ltd	High Court	Yes	[2006] SGHC 154	Singapore	Cited for the principle that it cannot be that in all cases of overlap, regardless of the respective merits of the parties’ cases and the circumstances in each individual case, such a defendant will invariably be deprived of security for costs.
B J Crabtree (Insulation) Ltd v GPT Communication Systems Ltd	English Court of Appeal	Yes	(1990) 59 BLR 43	England	Cited for the principle that there may be injustice if the claimant succeeds in its defence to the counterclaim, and that defence raises the very issues that its claim raises.
Dumrul v Standard Chartered Bank	English High Court	Yes	[2010] 2 CLC 661	England	Cited for the principle that an unfair result may still be occasioned if the plaintiff succeeds in his defence by relying on the same issues he raised in his main claim.
Ardila Investments NV v ENRC NV (Zamin Ferrous Ltd, Part 20 defendant)	English High Court	Yes	[2015] 2 BCLC 560	England	Cited for the principle that if security were ordered and not paid, the claim would be struck out, but the same issues would still be litigated in the counterclaim.
Hutchison Telephone (UK) Ltd v Ultimate Response Ltd	English Court of Appeal	Yes	[1993] BCLC 307	England	Cited for the principle that an order should not ordinarily be made if all the defendant is doing, in substance, is to defend himself.
Simgood Pte Ltd v MLC Barging Pte Ltd and others	Court of Appeal	Yes	[2016] SGCA 46	Singapore	Cited for the elements of the tort of conspiracy to cause loss by unlawful means.
Farrer v Lacy Hartland & Co	Court of Appeal	Yes	(1885) 28 Ch D 482	England	Cited for the principle that to have required security for costs on the ground of an insolvency which (if the plaintiff was right) the defendant had wrongly caused, might have been a denial of justice.
Gray v Powerassist Technologies Inc	Supreme Court of British Columbia	Yes	[2001] BCJ No 1722	Canada	Cited for the principle that the court may consider the extent to which the claimant’s impecuniosity may be due to the actions of the defendant which form the basis for the claimant’s claim.
Coonwarra Pty Ltd v Cornonero Pty Ltd (No 2)	Supreme Court of Victoria	Yes	[2019] VSC 702	Australia	Cited for the principle that the allegation that the claimant’s impecuniosity was caused by the defendant must have a “strong evidentiary foundation”.
Re Southbank Liquor Stores Vic Pty Ltd	Supreme Court of Victoria	Yes	[2021] VSC 404	Australia	Cited for the principle that evidence for such allegations must be clear as the court would not go into a trial within a trial at this interlocutory stage of proceedings.
Frantonios Marine Services Pte Ltd and another v Kay Swee Tuan	High Court	Yes	[2008] 4 SLR(R) 224	Singapore	Cited for the principle that given the interlocutory nature of a security for costs application, it would not be practicable for the court to examine the evidence before it with a “fine-tooth[ed] comb”.
Credit Suisse AG v Owner of the Vessel “CHLOE V”	High Court	Yes	[2022] SGHCR 9	Singapore	Cited for the principle that the court has complete discretion in the amount of the security to be provided and will determine the appropriate sum considering the circumstances of the case.
B2C2 Ltd v Quoine Pte Ltd	Singapore International Commercial Court	Yes	[2018] 5 SLR 105	Singapore	Cited for the factors to consider when determining the quantum of security.
Yuanta Asset Management International Ltd and another v Telemedia Pacific Group Ltd and another	Court of Appeal	Yes	[2017] SGCA(I) 2	Singapore	Cited for the circumstances to consider when determining the quantum of security.
T Sloyan & Sons (Builders) Ltd and another v Brothers of Christian Instruction	English High Court	Yes	[1974] 3 All ER 715	England	Cited for the principle that the court does not set out to give full indemnity to a defendant.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act 1967	Singapore
Rules of Court 2021 O 9 r 12(1)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Security for costs
Construction equipment
Rental agreement
Lien
Injunction
Taiwan Project
Global Explorer
Carousel
Tensioner
Barge
Tort of conversion
Tort of detinue
Tort of trespass
Unjust enrichment

15.2 Keywords

Security for costs
Construction equipment
Rental dispute
Singapore High Court
Civil procedure
Construction Law

17. Areas of Law

Area Name	Relevance Score
Security for Costs	98
Costs	95
Civil Procedure	80
Civil Practice	75

16. Subjects

Civil Procedure
Security for Costs
Construction Law