Crescendas Bionics Pte Ltd v Jurong Primewide Pte Ltd
| Jurisdiction | Singapore |
| Judge | Woo Bih Li JAD,Hoo Sheau Peng J,Quentin Loh SJ |
| Judgment Date | 09 February 2023 |
| Docket Number | Civil Appeals Nos 87, 88 and 128 of 2021 |
| Court | High Court Appellate Division (Singapore) |
[2023] SGHC(A) 9
Woo Bih Li JAD, Hoo Sheau Peng J and Quentin Loh SJ
Civil Appeals Nos 87, 88 and 128 of 2021
Appellate Division of the High Court
Civil Procedure — Damages — Interest — Whether pre-judgment interest should run from date of counterclaim or date of writ
Contract — Remedies — Damages — Causation — Whether there was causal link between management contractor's delay and property developer's loss — Whether combined delay caused property developer to lose two pre-commitment tenants — Whether settlement sum should be taken into account to reduce damages awarded
Contract — Remedies — Damages — Loss of chance — Management contractor and property developer jointly causing delay in completion of building — Property developer claiming damages against management contractor for delay caused by the latter — Whether property developer was in substance seeking damages for loss of chance to earn net rental revenue or for loss of net rental revenue
Contract — Remedies — Damages — Property developer incurring holding costs during combined delay — Property developer granting rent-free fitting-out periods to its tenants in absence of combined delay — Whether property developer was entitled to claim holding costs incurred during what would have been rent-free fitting-out periods
Contract — Remedies — Damages — Quantification — Whether property developer's net rental revenue loss should be computed over multiple years stretching from combined delay to years thereafter or only over period of combined delay
Contract — Remedies — Remoteness of damage — Whether property developer's net rental revenue loss was too remote to be recoverable
Held, allowing CA 87 and CA 88 in part, and dismissing CA 128 in part:
(1) A claimant had to ordinarily establish a causal link between the contractual breach and the alleged loss. This, however, was an uphill task where the loss consisted of a favourable outcome which was dependent on third party action, and the claimant, who had no control over what the third party chose to do, had to prove the causal link on an all-or-nothing basis. To relieve the burden on the claimant, the loss of chance doctrine allowed the claimant to characterise the loss as being the chance of securing the favourable outcome, thus making it easier for the claimant to prove the causal link between the loss and the contractual breach. It followed that for the purpose of the loss of chance doctrine, the favourable outcome should be characterised at a lower level (eg, the chance of winning a beauty contest or of securing a contract with a third party) upon a comparison between the state of affairs in the breach position and the hypothetical no-breach position, this being part and parcel of the loss identification and factual causation assessment. The favourable outcome should not be identified by reference to the exact quantity of the value lost. Difficulty and uncertainty in calculating the quantum of loss was different from there not having been a loss of a favourable outcome in the first place and only a loss of a chance to secure that outcome: at [42], [43] and [45].
(2) Crescendas was in substance seeking damages for the loss of net rental revenue rather than the loss of chance to earn net rental revenue. The favourable outcome was the gain of additional net rental revenue in the hypothetical no-breach position which was not earned in the breach position. Had Crescendas' claim truly been for a loss of chance to earn net rental revenue, it would have said that it might or might not have earned additional net rental revenue in the hypothetical no-breach position, but that this chance was lost due to the breach. But that was not how Crescendas ran its case. Instead, Crescendas ran its entire case on the basis that but for JP's breach, it would (not could) have earned those additional net rental revenue: at [44].
(3) When the breach of a contract was one of two causes, the contract-breaker was liable so long as his breach was an effective cause of the plaintiff's loss. On the facts, both Crescendas' and JP's delays were effective causes of Crescendas' loss, given that the length of delay attributable to Crescendas and JP respectively were almost evenly balanced: at [54] and [60].
(4) The Combined Delay caused the loss of Philip Morris as a tenant, but not PetNet. As such, JP was not liable to Crescendas for any loss of rent from PetNet. The Settlement Sum associated with PetNet's departure was not to be taken into account to reduce any other loss that JP was liable to Crescendas for: at [71] and [85].
(5) Loss of rent was an ordinary, and thus foreseeable, loss arising from delayed completion especially when the main contractor had to have been aware that the building would be let out. Holding costs might also be ordinary damage claimable as an alternative, or in addition, to loss of rent depending on how the loss of rent was calculated. On the present facts, Crescendas' entire net rental revenue loss was an ordinary damage: at [103] to [105].
(6) Crescendas had, because of the Combined Delay, suffered post-completion net rental revenue loss over multiple years. Such loss would result even if Crescendas had taken reasonable efforts to mitigate its loss. The key reason for this was that Biopolis 3 was a multi-tenanted development which would take several years to fill up. This, coupled with the fact that Crescendas' income stream arose from multi-year leases with tenants in Biopolis 3, meant that the Combined Delay had impacted Crescendas' net rental revenue stream over several years. This pointed strongly in favour of using the Multi-Year Model to compute Crescendas' multi-year loss. The Single-Year Model, on the other hand, was defective in that it only reflected Crescendas' loss during the period of the Combined Delay in the year 2010: at [146] and [149].
(7) A claimant had to satisfy the court as to the fact of damage and its amount to justify an award of substantial damages. If the fact of damage was shown but no evidence was given as to its amount such that it was virtually impossible to assess damages, this would generally permit only an award of nominal damages. Outside such situations, where the claimant had attempted its level best to prove its loss and the evidence was cogent, the court should allow it to recover the damages claimed and do the best it could to assess the loss suffered by the claimant. Where it was clear that substantial loss has been incurred, the fact that an assessment was difficult because of the nature of the loss was no reason for awarding no damages or merely nominal damages: at [160] to [162].
(8) On the facts, the level of speculation entailed in projecting Crescendas' post-completion net rental revenue loss over several years did not rise to the level of rendering it virtually impossible to meaningfully quantify this loss. Further, given the existence of this loss and the fact that Crescendas had attempted its level best in placing cogent evidence of this loss before the court, Crescendas should not be denied compensation for this loss. The speculation entailed in using the Multi-Year Model flowed from the nature of the post-completion net rental revenue loss, and the circumstances in which it was sustained. The nature and circumstances of this loss should not be held against Crescendas when it had done its best in the proof of quantum and there was sufficient material for the court to make a reasoned estimate of this loss. It was unfair to deny Crescendas' compensation for this loss when the uncertainty in quantification arose not for want of effort on Crescendas' part to assist the court in quantification, but was inherent in the quantification process of such loss: at [170] and [172] to [174].
(9) The Multi-Year Model had to rely on parameters which were influenced by variables beyond JP's control due to the nature and circumstances of the loss. The extent of the loss suffered would naturally be contingent on Crescendas' own actions in relation to its leasing business, custom from potential tenants and variable market conditions. However, the fact that the quantum of contractual loss was influenced by variables beyond the contract-breaker's control did not by itself preclude recovery. It was quite often the case that the extent of a claimant's loss was beyond the control of a contract-breaker. However, the latter was not at the mercy of the claimant as the claimant had to prove the quantum of loss and that he had taken reasonable steps to mitigate his loss, where applicable. The concept of remoteness also applied: at [180] and [181].
(10) The Judge sought to illustrate, using two hypotheticals, that the Multi-Year Model was capable of illogical and plainly inequitable outcomes. However, those outcomes were a result of the application of settled legal principles and were not attributable to any particular defect in the method of quantification employed by the Multi-Year Model: at [183] to [185].
(11) Applying the Multi-Year Model as found by the Judge, subject to two adjustments agreed upon by parties and taking into account the finding that the Combined Delay did not cause the loss of PetNet as a tenant, JP was liable for $4,185,802.60 in general damages in respect of Crescendas' net rental revenue loss: at [196].
(12) To avoid double compensation, the law precluded a claimant from recovering gross profits it had lost as a result of the breach, alongside expenditure wasted as a result of the breach. A claimant usually had to elect between the two. However, double compensation would be avoided when the lost profits were claimed on a net basis, in which case the claimant could claim damages for both his wasted expenditure and loss of net profits: at [205].
(13) There was a distinction between saying that Crescendas would have incurred expenses in...
To continue reading
Request your trial