Syarikat Pembinaan Anggerik Sdn Bhd v Malaysia Airports Holdings Berhad (BA-22C-23-04/2017)

In the Closing Submissions, the parties did not address this Court on the question of costs and the amount thereof. However, there is a written request in the Plaintiff’s Closing Submissions asking for the question of costs and the amount thereof to be addressed separately in a separate submission. Pursuant to such request, this Court granted leave for both parties to file and exchange written submissions on the costs and the amount thereof. 2

After having read and considered the parties’ respective written submissions on costs, this Court awarded costs of the Plaintiff’s claims and the Defendant’s counterclaims as follows:

The Plaintiff is awarded half the costs of the claims in the original action;

The Defendant is awarded half the costs of the counterclaim proceeding;

The costs of the claims in the original action are assessed at RM250,000, and the Plaintiff is awarded RM250,000 x 50% = RM125,000;

The costs of the counterclaim proceeding are assessed at RM60,000, and the Defendant is awarded RM60,000 x 50% = RM30,000; and

After mutual set-off, the Plaintiff is awarded the net amount of RM125,000 – RM30,000 = RM95,000 as costs of the overall proceedings, subject to allocatur.

By Notice of Appeal dated and filed on 29 November 2021, the Plaintiff has appealed this Court’s aforesaid award of costs insofar as it relates to the award of costs of counterclaims in favour of the Defendant. On 9 December 2021 the Defendant by its Notice of Appeal dated 7 December 2021 also appealed against the entirety of this Court’s decision on award of costs. 3

The general rule is that the costs follow the event. This means that the successful party is entitled to be paid his costs unless there are special grounds to order otherwise.

The ‘event’ assumes that there is a clear discernible winning party. However, where a case involves several different issues or heads of claim and not all are won by the plaintiff (such as the present case), the costs relating to the issue go to the party who succeeds on it (Reid, Hewitt & Co v Joseph [1918] AC 717 and Heng Holdings SEA (Pte) Ltd v Tomongo Shipping Co Ltd [1997] 3

With regard to costs payable for trial in the High Court, Order 59 Rule 19 of the Rules of Court 2012 (“ROC”) stipulates inter alia that the amount of costs that are payable shall be at the discretion of the Court and shall exclude disbursements.

Order 59 Rule 19 of the Rules of Court 2012 (“ROC 2012”) stipulates that in exercising its discretion to order the costs payable for a trial in the High Court, the Court shall have regard to the relevant circumstances including but not limited to factors set out in Order 59 Rule 16 of the ROC 2012.

The non-exhaustive factors set out in Order 59 Rule 16 of the ROC 2012 are as follows: 4

The complexity of the item or the cause or matter in which it arises, and the difficulty or novelty of the questions involved;

The skill, specialised knowledge and responsibility of, and the time and labour expended by, the solicitor or counsel;

The number and importance of the documents, however brief, prepared or perused;

The place and circumstances in which the business involved is transacted;

The importance of the cause or matter to the client;

Where money or property is involved, the amount or value;

Any other fees and allowances payable to the solicitor or counsel in respect of other items in the same cause or matter, but only where work done in relation to those items has reduced the work which would otherwise have been necessary in relation to the item in question. SUMMARY OF HEADS AND AMOUNTS AWARDED IN THE PRESENT CASE

A summary of the judgment of this Court is summarised in the table below: 5 PLAINTIFF’S CLAIMS Heads of Claim Amount Claimed (RM) Judgment Sum

Balance of Works for Package 1 2,630,911.50 2,036,521.50 Partially Successful 2. Balance of Works for Package 2 16,443,051.19 8,642,914.73 Partially Successful 3. Prolongation Claim 12,176,474.11 0.00 Unsuccessful 4. Acceleration Claim 20,076,768.75 0.00 Unsuccessful 5. Interest and Financing Charges 15,506,989.93 0.00 5% simple interest on sums awarded Unsuccessful on financing charges but successful on interest TOTAL 66,834,195.48 10,679.436.23 (plus interest) - DEFENDANT’S COUNTERCLAIMS Heads of Claim Amount Claimed (RM) Judgment Sum

LAD relating to the CUB 444,000.00 0.00 Unsuccessful 2. LAD relating to the ADW 9,250,000.00 750,000.00 Partially Successful TOTAL 9,694,000.00 750,000.00 - 6 PARTIES’ RESPECTIVE POSITIONS ON COSTS AND AMOUNT

The Plaintiff’s position is that the costs of the Plaintiff’s claims in the original action should be RM400,000 and after taking into account the dismissal of the acceleration claim and the prolongation costs claim the Plaintiff should be awarded an amount of RM300,000 as costs of the Plaintiff’s original action [see paragraphs 27 to 30 of the Plaintiff’s Submission on Costs]. As regards the Defendant’s counterclaim action, the Plaintiff’s position is that as only a small fraction of the counterclaims was allowed the Defendant should only be awarded an amount of RM15,000 as costs of the Defendant’s counterclaim action [see paragraphs 31 to 38 of the Plaintiff’s Submission on Costs].

The Defendant’s position is that taking all factors into consideration, a fair amount of costs to be awarded to the Defendant on a standard basis for successfully defending the majority of the Plaintiff’s claims is RM80,000.00 and that a fair amount of costs to be awarded to the Defendant on a standard basis for the Defendant’s partially successful counterclaim is RM20,000.00. In summing-up, the Defendant contends that the overall costs that should be awarded to the Defendant should be RM100,000. See paragraphs 38 to 40 of the Defendant’s Submission on Costs. THIS COURT’S ANALYSIS AND DECISION 1st Factor: Complexity, Difficulty and Novelty 7

The Plaintiff’s claims involved various aspects of laws relating to construction contracts, namely payments for works done, alleged acceleration costs, alleged prolongations costs, alleged financing charges and interest, all of which were extensively challenged by the Defendant. The number of claims made by the Plaintiff, the voluminous documents and the numerous aspects of law involved made the Plaintiff’s case complex and difficult to pursue and defend.

The Defendant’s counterclaim solely related to liquidated damages. The Plaintiff did not challenge the applicability of the liquidated damages clause or the reasonableness of the liquidated damages rate relied on by the Defendant. The legal position in Malaysia with regard to liquidated damages clauses is also well-settled in any event. In this regard, the Defendant’s counterclaim was legally less complex and difficult than the Plaintiff’s claims, though there are some complex facts relating to the delay events for extension of time.

The factual and legal issues relating to acceleration claim are rather novel as they are not extensively covered by the past written judgments of the courts in Malaysia. Other than the acceleration claims, the other heads of claims do not involve novel areas of law.

The complexity and volume of the facts and laws involved in the present case are also reflected in the lengthy written submissions filed by and exchanged between the parties, these written submissions ran into several hundreds of pages. The written Grounds of Judgment itself consists of 221 pages. 8 2nd Factor: Skill, Specialised Knowledge, Responsibility and

In our present case, the skill, specialised knowledge, time and labour involved in this action is not limited to that of counsel, but also of the delay and quantum experts engaged by the Plaintiff as well as by the Defendant.

With regard to the expertise by counsel, it is noted that from the outset, the circumstances of this case, including the quantum claimed by the Plaintiff, the voluminous number of documents submitted and the importance of this case to both the Plaintiff and the Defendant, necessitated that both parties to be represented by lawyers with considerable experience and/or specialised knowledge of construction law to be allocated to this matter.

This Court also notes that the full trial took 14 days including a hot-tubbing session with both parties’ experts, there are more than 200 enclosures filed in respect of the present case and quite a number of intensive case management sessions and interlocutory steps and paper works in compliance with the case management directions and in the pre-trial discussions and sorting out of the quantum figures attended by both parties’ solicitors and experts. This Court notes that both parties’ experts spent considerable time and effort during the pre-trial stages on quantum issues. 3rd Factor: Number and Importance of Documents 9

A large number of 71 bundle of documents were submitted during the trial. However, the vast majority of these documents were submitted by the Plaintiff. Specifically, 67 bundles were submitted by the Plaintiff while the Defendant only submitted 3 bundles (AB13 to AB15), with both parties submitting additional documents in the final bundle (AB16). Together with bundle of pleadings, Statement of Issues to be Tried, Statement of Agreed Facts, Witness Statements, Summary of Case, Experts’ Reports, there were about 90 total bundles of cause papers in the present case.

Many of the bundles of documents are important to the parties’ case and defences. 4th Factor: Importance of the Matter to the Parties

Due to the huge amount of the pleaded claims totalling about RM66 million, the matter is of importance to both the Plaintiff and the Defendant.

The Plaintiff being a private company which is not part of a public-listed company or large group of companies, a suit for about RM66 million is of great importance to the Plaintiff. As for the Defendant which is a public-listed company, a suit of this magnitude is a material litigation which requires announcement and disclosure to the public according to the Listing Requirements of the stock exchange. Moreover, as the airport holding company in Malaysia, a suit of this magnitude is important to the Defendant. 10

In the Plaintiff’s Submission on Costs, the Plaintiff referred to these decided cases on amounts of costs:

In Malaysian International Consultants Sdn Bhd v RR Chelliah Brothers (didakwa sebagai sebuah firma) [2009] MLJU 107, the Court was dealing with a negligence claim related to the engagement of consultant engineers pertaining to the construction of a road, drainage and sewerage system in the sum of RM6 million. The Defendant engaged counsel to prepare a defence to the claim, which was prepared. A dispute then arose as to the legal fee payable to counsel for preparation of the defence. At first instance the taxing Registrar awarded a sum of RM10,000.00 only for getting up in the preparation of the defence. On appeal, the High Court Judge increased the award of costs to RM140,000.00, which was upheld on appeal to the Court of Appeal, having regard to the failure by the taxing Registrar to consider the nature of the claim, its seriousness, the importance of litigation to the client and the nature and extent of the work that must have been done in preparing the kind of defence.

In Sagujuta (Sabah) Sdn Bhd v Trane Malaysia Sales & Services Sdn Bhd [2014] 5 MLJ 535, the Court of Appeal held that costs awarded in the High Court of RM80,000.00 for a summary judgment application resulting in judgment of RM3,641,315.73 was not excessive, bearing in mind the nature of the claim, its seriousness, the importance of litigation to the client and the nature and extent of the work that must be done in preparing the matter in question. 11

In Giga Engineering & Construction Sdn Bhd v Yip Chee Seng & Sons Sdn Bhd & Ors [2013] 10 MLJ 805, the High Court revised the getting up fee awarded to the defendants from RM60,000.00 as awarded by the taxing registrar to RM150,000.00, taking into account the complexity of the matter and its importance to the defendant, bearing in mind that the trial in that matter related to the interpretation of a pre-tender agreement, with 6 witnesses in total over 7 days of trial involving 14 bundles of documents in total.

In the considered view of this Court, the nature of this suit is construction contract claims, and that of Giga Engineering case is also of the same nature of construction contract claims, while the other two decided cases were of different nature of causes of action. Of the three decided cases cited by the Plaintiff, Giga Engineering case can be used as a relevant guide and comparison.

In Giga Engineering case, the getting-up fee was increased to RM150,000 in a full trial of 7 days involving 6 witnesses 14 bundles of documents. In our present case, there are 14 days of full trial, more than 6 witnesses including 2 experts and there were 71 bundles of documents. The quantum experts and the solicitors also attended to pre-trial discussions and meetings to prepare the Joint Report on Quantum Issues. Much more time and efforts have been put in by the respective parties in our present case as compared with those in Giga Engineering case. 12

Taking into account the factors stated above, this Court finds that an amount of RM250,000 would be reasonable costs of the Plaintiff’s claims in the original action.

As for the costs of the Defendant’s counterclaim action, this Court finds that the counterclaim action was comparatively much simpler and shorter than the Plaintiff’s claims in the original action. Taking into account the factors stated above, this Court finds that an amount of RM60,000 would be reasonable costs of the Defendant’s counterclaim action.

In assessing RM60,000 as reasonable costs of the Defendant’s counterclaim action, this Court was aware that tis amount of RM60,000 was more than the amount of RM15,000 proposed by the Plaintiff and RM20,000 proposed by the Defendant as the costs of the Defendant’s counterclaim action. In doing so, this Court has found that both the parties in their submissions were motivated or had intention of using their lower figures for costs of counterclaim action to press down the eventual costs to be awarded to the opposite party. For the Plaintiff, it wanted to press down the costs of the Defendant’s counterclaim so that after set-off against the Plaintiff’s costs of the Plaintiff’s original action, the Plaintiff would get a bigger net amount of costs as compared with a situation of not pressing down the costs of counterclaim action. For the Defendant, it could reasonably foresee that the Plaintiff who partly succeed in the claims in the Plaintiff’s original action would get the costs of the original action, it being a question of extent and amount thereof. A defendant with a counterclaim which is partly successful knows or can reasonably foresee that the amount of costs in the counterclaim 13 action would be assessed relative to and in comparison with the amount of costs of the plaintiff’s original action, with the consequence that if the defendant asks for higher amount of costs of counterclaim action, the amount of the costs of the plaintiff’s original action would also be proportionately higher. Where the amount of costs of original action is by the nature of the suit expected to be several times higher than the amount of the costs of counterclaim, then any step in inflating the amount of the counterclaim action would result in increasing the relative amount of the costs of the original action by several times, thereby leading to a very disadvantageous result to the defendant in terms of net amount of costs after mutual set-off. As this Court is to assess the reasonable amount of the costs of original action and the costs of counterclaim action based on the relevant 1st to 4th factors pursuant to O. 59 and taking into consideration that both parties submitted on costs after having known the decision of the Court on liability and quantum of claims and counterclaims, the Court is not bound by the suppressed figure of the amount of costs of counterclaim action which both parties, due to their own tactical reasons, have proposed.

After taking into consideration the fact that the Plaintiff succeeds partly in its claims and the Defendant succeeds partly in its counterclaims and the relative complexity involve and the time and efforts spent on the heads of claims and counterclaims which are allowed and which are dismissed, this Court has found and decided that the Plaintiff should get half the costs of the Plaintiff’s original 14 action while the Defendant should get half the costs of the counterclaim action.

In the premises, this Court on 12 November 2021 awarded costs of the Plaintiff’s claims and the Defendant’s counterclaims as follows:

The Plaintiff is awarded half the costs of the claims in the original action;

The Defendant is awarded half the costs of the counterclaim proceeding;

The costs of the claims in the original action are assessed at RM250,000, and the Plaintiff is awarded RM250,000 x 50% = RM125,000;

The costs of the counterclaim proceeding are assessed at RM60,000, and the Defendant is awarded RM60,000 x 50% = RM30,000; and

After mutual set-off, the Plaintiff is awarded the net amount of RM125,000 – RM30,000 = RM95,000 as costs of the overall proceedings.

After mutual set-off of costs, the net amount of costs of the suit awarded in favour of the Plaintiff is RM95,000, subject to allocator. Dated this : 21st December 2021. 15 Signed ............................................................ TEE GEOK HOCK JUDICIAL COMMISIONER HIGH COURT OF MALAYA AT SHAH ALAM (NCvC 10) To the parties’ solicitors:

For the Plaintiff :

For the Defendant : Ashok Kumar,