Case: terms of Offer to Settle must correspond with reliefs pleaded and which the court can and is likely to grant

In this decision by the Appellate Division (AD) of the Singapore High Court, the AD overturned the trial judge’s decision to award indemnity costs based on an Offer to Settle (OTS).

It’s interesting because the turning point was that the OTS required the defendants to admit that they as well as OTHER persons had no defences to the alleged prior copyright infringement.

The AD observed that this remedy was not pleaded by the claimants, and was not something the court could order anyway. As such, the judgment granted by the trial judge could not be said to be more favourable than the OTS.

The AD thus held costs to be payable on a standard and not indemnity basis.

Comment: In the new Rules of Court 2021, the Order 22A provisions which require the above said threshold for indemnity costs to be ordered have been removed. Instead, the court will have discretion to consider all circumstances to determine costs, including presumably whether any genuine and serious OTS was made.

It is not clear how the court would approach a similar case under the new ROC 2021. Perhaps the court would look at the substance of the OTS and consider if it’s in substance reasonable and if the judgment granted turned out to be mainly, and not necessarily entirely, more favourable than the OTS. Perhaps the fact that a term included in the OTS which is not something the court could have granted would lead the court to hold that the OTS should not justify indemnity costs.

In any event, the learning point here is to be extremely measured about the terms of an OTS. They must be reliefs pleaded and sought; practicably something which the court can grant, and indeed is likely to grant.

Click to access %5B2023%5D%20SGHC(A)%2011.pdf

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