Case Summaries

Qilin World Capital Limited v CPIT Investments Limited and another appeal (Case Summary)

11 July 2018

Case summary

Qilin World Capital Limited v CPIT Investments Limited [2018] SGCA(I) 04
Civil Appeals Nos 126 and 145 of 2017

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Decision of the Court of Appeal (delivered by International Judge Dyson Heydon):

Background to the appeal

1          CPIT Investments Limited (“CPIT”) brought claims against Qilin World Capital Ltd (“Qilin”) arising from loans made under a loan agreement (“the Loan Agreement”) secured by certain shares. CPIT claimed that Qilin had wrongfully disposed of these shares in breach of the Loan Agreement, and thus held the proceeds on constructive trust for CPIT. In CPIT Investments Ltd v Qilin World Capital Ltd [2017] 5 SLR 1, the learned trial judge, Vivian Ramsey IJ, found that Qilin held HK$31.25m on constructive trust for CPIT. However, he also dismissed CPIT’s claim that Qilin’s conduct caused a large fall in the value of certain other shares owned by CPIT which were not used as security for the loan.

2          Qilin appealed against the orders relating to the constructive trust. CPIT appealed against the order rejecting its claim that Qilin was responsible for the fall in value of its other shares which were not used as security for the loan.

3          Shortly before the Court of Appeal issued its judgment on Qilin’s appeal and CPIT’s cross appeal, the trial judge issued his decision on the costs of the proceedings at first instance (see CPIT Investments Ltd v Qilin World Capital Ltd [2018] SGHC(I) 02). He ordered Qilin to pay CPIT a total of S$431,906.20 in costs and S$28,600.26 plus HK$648,427.57 in disbursements. 

4          On 6 March 2018, the Court of Appeal issued its judgment on Qilin’s appeal and CPIT’s cross appeal in Qilin World Capital Ltd v CPIT Investments Ltd [2018] SGCA(I) 01. The court reversed the trial judge’s finding that Qilin held HK$31.25m on constructive trust for CPIT. It also upheld the trial judge’s finding that Qilin did not cause the fall in the value of CPIT’s shares. The result was that CPIT failed entirely to obtain any compensation from Qilin.

5          The present judgment dealt with the costs and disbursements of the appeals, as well as the costs and disbursements of the proceedings at first instance.

Decision on costs

The proceedings at first instance

6          With regard to the costs of the proceedings at first instance, the Court of Appeal noted that the trial judge had issued a closely reasoned judgment on costs which contained a careful exposition of the principles applicable to costs in the Singapore International Commercial Court (“SICC”). The court did not take issue with the trial judge’s reasoning in this regard. However, the trial judge’s costs orders were made on the basis that CPIT had been partially successful in its claims. It was necessary to set aside the trial judge’s costs orders, in light of the fact that CPIT’s claims had failed entirely, following Qilin’s successful appeal (at [12]–[14]).

7          The court noted that, with regard to several aspects of the proceedings at first instance, Qilin had sought to be compensated in amounts that were substantially similar to those ordered by the trial judge in favour of CPIT. With regard to these aspects of the proceedings at first instance, the court found that the costs sought by Qilin were generally reasonable and awarded Qilin the following:

  1. S$41,500 in costs and S$4,022 in disbursements in respect of the six interlocutory applications where costs had been in the cause (at [15]);
  2. S$50,000 in costs for the proceedings in the Singapore High Court from commencement until 28 June 2016, when the matter was transferred to the SICC (at [17]);
  3. S$206,000 in costs for the proceedings from 28 June 2016 up until commencement of the trial on 13 December 2016 (at [18]);

8          The court also found that Qilin was reasonable in seeking costs of S$11,500 for pre-trial conferences and case management conferences, and awarded Qilin this sum (at [16]).

9          With respect to the trial itself and post-trial matters, Qilin had sought costs in the sum of S$300,000, whereas the trial judge awarded CPIT only S$128,500 for the equivalent period. The Court of Appeal found that the size of Qilin’s claim was partly supported by the fact that it had reasonably engaged the services of a Senior Counsel, given the complexity of the case and the large sums in dispute (at [20]). It was also supported by the fact that Qilin had succeeded entirely in resisting CPIT’s claims (at [21]). However, the court found that an offer to settle made by Qilin to CPIT did not justify an increase in the costs otherwise recoverable. The outcome of the proceedings was not significantly more favourable to Qilin compared to the terms of its offer. Further, the basis of the offer, which assumed that Qilin had not breached the Loan Agreement and was still entitled to receive interest, had not been vindicated by the outcome of the proceedings (at [25]). Taking the circumstances in the round, the court awarded Qilin S$225,000 in costs for the trial and post-trial proceedings (at [26]).

10        With respect to disbursements, the court granted Qilin’s claims for S$28,600.26 in standard disbursements, and S$74,000 for the costs of engaging an expert on the value of CPIT’s shares (at [27]–[28]). However, it was unclear how Qilin had incurred some HK$1,328,089.94 and US$94,897.40 in legal fees for advice on Hong Kong law, and the court ordered that these disbursements be taxed if not agreed (at [29]).

The appeals

11        The court found that Qilin’s claims for S$70,000 and S$100,000 in costs (for Qilin’s own appeal and CPIT’s cross appeal, respectively) were reasonable and awarded Qilin the sums it sought (at [30] and [32]). However, the size of the sums sought by Qilin as disbursements for the appeals had not been adequately explained and the court ordered that these be taxed if not agreed (at [31] and [32]).

This summary is provided to assist in the understanding of the Court’s judgment. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s judgment.