ACES System Development Pte Ltd v Yenty Lily (trading as Access International Services)

• Court: Court of Appeal (Singapore)
• Judge: Sundaresh Menon CJ
• Judgment Date: 04 October 2013
• Neutral Citation: [2013] SGCA 53
• Citation: [2013] SGCA 53
• Docket Number: Civil Appeal No 149 of 2012
• Hearing Date: 21 May 2013
• Plaintiff Counsel: N Sreenivasan SC and Valerie Ang (Straits Law Practice LLC)
• Defendant Counsel: Lee Mun Hooi and Lee Shihui (Lee Mun Hooi & Co)
• Subject Matter: Tort,Detinue,Damages,Assessment,Compensation,User principle
• Published date: 02 December 2013

Andrew Phang Boon Leong JA (delivering the judgment of the court): Introduction

This is an appeal by the Appellant, Aces System Development Pte Ltd, against the decision of the High Court Judge (“the Judge”) in Yenty Lily (trading as Access International Services) v ACES System Development Pte Ltd [2013] 1 SLR 577 (“the Judgment”), which had allowed the appeal by the Respondent, Yenty Lily, against the decision of the Assistant Registrar (“the AR”).

Parties to the dispute

Both parties carry out business in the construction industry. The Respondent was a subcontractor of the Appellant for the project known as the “Proposed improvement works to metal roofs for a total of 39 blocks of flats at Bishan-Toa Payoh North and Toa Payoh Central Divisions” (“the project”). The Appellant was appointed by the Bishan-Toa Payoh Town Council in the first half of 2008, and the Respondent entered into the subcontract with the Appellant (“the subcontract”) on 10 July 2008.

Background to the dispute

In the subcontract, the Respondent was to provide mobile platforms as well as erect and dismantle these platforms at various locations at the site of the project where the Appellant was carrying out work. She was to provide six sets of single mast climbing platforms and accessories (collectively, “the platforms”) for a maximum period of 16 months, ending 31 January 2010.

Notably, the subcontract contained a provision for the Appellant to financially assist the Respondent to purchase the platforms, and this was executed in the form of a letter of credit in favour of the vendor of the platforms. The Respondent would repay the purchase price and the charges incurred by the Appellant in relation to the letter of credit by 12 equal monthly instalments, and such instalments would be deducted from the progress payments to be made by the Appellant to the Respondent pursuant to the subcontract.

Under the subcontract, the Respondent would be paid a total of $850,000 for work done at 39 blocks of flats: $21,795 each for the first 38 blocks, and $21,790 for the last block. The Respondent carried out the subcontract works and submitted progress claims to the Appellant for payment. By July 2009, there was an outstanding balance of over $188,000 due to the Respondent. On 3 July 2009, the Respondent informed the Appellant that she was unable to carry out further works on the site. The next day, the Appellant replied that if the Respondent did not proceed with the work, it would engage a third party and recover the cost of employing the third party from the Respondent. On 7 July 2009, the Respondent wrote to the Appellant noting that it had continued to use the platforms on site and stated that she would hold the Appellant responsible for any loss or damage to the same. She also stated that she would be removing the platforms from the site immediately. On the same day, the Appellant responded to the effect that the platforms were exclusive to the project and that the Respondent could not remove the platforms without the Appellant’s consent. On 11 July 2009, the Appellant terminated the subcontract. The Appellant continued to use the platforms up to December 2009 when the project was completed and kept them in storage thereafter.

The Respondent commenced proceedings against the Appellant in August 2009 and claimed the balance sum owing to her, loss of profits, the return of the platforms and damages for wrongful detention of the same for the period that the platforms were kept in storage. The trial judge delivered judgment on 4 October 2010 and held that: The Appellant had wrongfully terminated the subcontract on 11 July 2009, and the Respondent had been entitled to terminate it on 3 July 2009; Interlocutory judgment was to be entered for the Respondent for damages to be assessed on the basis of the lump sum of $850,000 less: Cash payments received by the Respondent from the Appellant totalling $281,800; The cost of the six platforms (which the Appellant had financially assisted the Respondent in buying) totalling $227,600.70; The cost that would have been incurred by the Respondent to complete the project; The Respondent was the legal and lawful owner of the platforms and that there would be interlocutory judgment for her for damages to be assessed for the Appellant’s wrongful detention of the platforms with effect from 31 January 2010; The Respondent be awarded interest at the rate of 5.33% per annum on the sums found due and payable to her by the Appellant with the date from which the interest was to run to be decided by the Registrar; The Respondent be awarded the costs of the proceedings.

The Appellant returned the platforms to the Respondent on 23 October 2010.

The issues with regard to assessment

In the assessment of damages (which are the subject of the present appeal), the AR assessed the following heads of damage, which were in contention before the Judge and remain in contention on appeal: The cost that would have been incurred by the Respondent to complete work on the remaining blocks of the project (“Issue 1”); The extent to which the platforms had been damaged or lost whilst in the possession of the Appellant and the amount payable to the Respondent in respect of such loss and damage (“Issue 2”); and The quantum of damages that should be awarded to the Respondent in respect of the wrongful detention of the platforms when no loss was proved and the platforms were not put to use (“Issue 3”).

The decision of the AR

The AR held as follows: In so far as Issue 1 was concerned, the cost of completing the project was assessed at $52,124.11, on the basis that costs of $10,000 (rounded up from $9,056.40) would be incurred per month over a five-month period, and $2,124.11 would be incurred on a one-off basis; In so far as Issue 2 was concerned, damages of €9,420.70 were assessed for damage or loss to the platforms by comparing inventories prepared in December 2009 and October 2010 (the “Insight List”). $3,748 was also awarded for maintenance, servicing and retrieval fees in relation to the platforms; In so far as Issue 3 was concerned, the Respondent’s claim for substantial damages for the Appellant's wrongful detention of the platforms failed under the user principle as the Respondent had not proven any actual loss. She awarded $100 as nominal damages. Being dissatisfied with the quantum awarded by the AR, the Respondent appealed.

The decision of the Judge

On appeal, the Judge varied the assessment of damages as follows: In so far as Issue 1 was concerned, the Judge found that the Respondent’s notional costs should have been assessed over a two-month period instead of (as the AR held) over a five-month period. Based on the evidence, costs of $7,975.50 would have been incurred monthly, and costs of $480 would have been incurred on a one-off basis. The Respondent’s cost of completing the project was therefore $16,431.80. In so far as Issue 2 was concerned, the Judge assessed damages by reference to the original list that was sent to the Appellant in July 2009 as well as the Insight List. Based on this comparison, the Respondent had sustained a loss of €15,050.52. The Respondent was entitled to recover $695.50 as the cost of obtaining the Insight List because she needed to determine the number of items collected as well as the damage done to them when the platforms were finally re-delivered to her. The AR’s award of $3,748 for maintenance, servicing and retrieval fees in relation to the platforms was affirmed. In so far as Issue 3 was concerned, the Judge disagreed with the AR’s legal analysis of the user principle and allowed damages for the wrongful detention of the platforms. The Respondent was awarded $189,000, being the rental that she could have earned from February to October 2010. In the appeal before us, the Appellant sought to reinstate the AR’s decision.

Our decision Issue 1 and Issue 2

We are of the view that the Judge was correct in arriving at the decisions she did with respect to the first two issues (viz, Issue 1 and Issue 2). The Judge, in the de novo hearing, had the power to make her findings of fact and then exercise her discretion. Her discretion would only be upset if it was shown that she had erred in principle or had reached a conclusion that was manifestly wrong.

It is trite law that the nature of an appeal from a registrar of the High Court to the judge in chambers is by way of rehearing of the application and the judge treats the matter de novo, as though it came before him or her for the first time (see, for example, the decision of this court in Chang Ah Lek and others v Lim Ah Koon [1998] 3 SLR(R) 551 at [19] and [20], and approved (also by this court) in Ho Yeow Kim v Lai Hai Kuen [1999] 1 SLR(R) 1068). In other words, in a registrar’s appeal, the judge’s discretion is not fettered by the registrar’s discretion in coming to his or her decision.

Issue 3 Introduction

We agree with the Judge’s decision with respect to Issue 3 (viz, that relating to the detention of the platforms). However, we differ with regard to the reasoning. For reasons which we will set out in a moment, we are of the view that there was sufficient evidence on record to permit the court to arrive at the (same) conclusion with respect to this particular issue without accepting the Judge’s analysis of the user principle by relying, instead, on what we shall see is the more general compensation principle. At this juncture, it would be appropriate to commence with our reasons as to why we differ from the reasoning (and, consequently, approach) which the Judge adopted in arriving at her decision in so far as this particular head of damages is concerned.

The compensation principle

The compensation principle is a general principle which prescribes that when a tortious wrong is committed by the defendant, the plaintiff ought – as a matter of logic,...