Crescendas Bionics Pte Ltd v Jurong Primewide Pte Ltd and other appeals

• Jurisdiction: Singapore
• Judge: Woo Bih Li JAD
• Judgment Date: 09 February 2023
• Neutral Citation: [2023] SGHC(A) 9
• Court: High Court Appellate Division (Singapore)
• Docket Number: Civil Appeals Nos 87, 88 and 128 of 2021
• Hearing Date: 28 July 2022
• Citation: [2023] SGHC(A) 9
• Year: 2023
• Plaintiff Counsel: Karam Singh Parmar and Leong Lijie (Tan Kok Quan Partnership)
• Defendant Counsel: Koh Kia Jeng, Lau Wen Jin and Alexander Choo Wei Wen (Dentons Rodyk & Davidson LLP)
• Published date: 14 February 2023

Woo Bih Li JAD (delivering the judgment of the court): Introduction

Before us are three appeals (the “Appeals”) arising from the trial in HC/S 477/2015 (the “Suit”): AD/CA 87/2021 (“CA 87”), which is Crescendas Bionics Pte Ltd’s (“Crescendas”) appeal against the award of damages by a judge of the General Division of the High Court (the “Judge”) in Crescendas Bionics Pte Ltd v Jurong Primewide Pte Ltd [2021] SGHC 189 (the “Damages Judgment (HC)”); AD/CA 88/2021 (“CA 88”), which is Jurong Primewide Pte Ltd’s (“JP”) cross-appeal against the Judge’s award of damages in the Damages Judgment (HC); and AD/CA 128/2021 (“CA 128”), which is Crescendas’ appeal against part of the Judge’s decision on pre-judgment interest and costs for both the liability and assessment of damages tranches of the trial.

Facts Background to the dispute

Crescendas is a property developer.¹ JP is a general building contractor registered as a Grade A1 contractor with the Building and Construction Authority (“BCA”).²

On 30 June 2008, the parties signed a Letter of Intent dated 26 June 2008 (the “LOI”) under which Crescendas engaged JP as the management contractor to build Biopolis 3. This is a seven-storey multi-tenanted business park development in One-North³ envisaged as a research and development (“R&D”) hub for biomedical sciences (“BMS”) institutes and organisations, offering specialised facilities such as wet laboratories, chemistry laboratories and an animal facility.⁴

Under cl 5.0 of the LOI, JP was obliged to complete Biopolis 3 in 18 months, ie, by 22 January 2010.⁵ However, the time taken for completion exceeded the 18 months stipulated in the LOI – BCA directed the Superintending Officer to apply for the Temporary Occupation Permit (“TOP”) only on 22 December 2010.⁶ The TOP was obtained only on 12 January 2011.

Procedural history

In the light of the delay, Crescendas commenced the Suit against JP, which in turn brought various counterclaims against Crescendas.

The trial was bifurcated, such that issues of liability and assessment of damages were decided separately in two tranches.⁷

Following the first tranche of the trial, the Judge reached a decision on liability in Crescendas Bionics Pte Ltd v Jurong Primewide Pte Ltd [2019] SGHC 4 (the “Liability Judgment (HC)”), which was affirmed on appeal in Jurong Primewide Pte Ltd v Crescendas Bionics Pte Ltd and another appeal [2019] SGCA 63 (the “Liability Judgment (CA)”), save in relation to the arithmetic computation of the days of delay for which JP was responsible and the time taken for capping beams work (see the Liability Judgment (CA) at [14]–[20]).

In gist, the Liability Judgment (HC) and the Liability Judgment (CA) found that for the purpose of cl 5.0 of the LOI, Biopolis 3 was deemed to be completed on 22 December 2010 when Biopolis 3 was considered by BCA to be ready for TOP application (see the Liability Judgment (HC) at [223]–[244]). On this basis, the completion of Biopolis 3 was deemed to be delayed by a total of 334 days, from 23 January 2010 (ie, the day after the contractual completion date) to 22 December 2010 (the “Combined Delay”).⁸ Of these 334 days, Crescendas was responsible for an aggregate of 173 days of delay caused by its own acts of prevention. As a result, time for Biopolis 3’s completion was set at large, and JP was only liable to complete Biopolis 3 within a reasonable time of 18 months (the original period) plus 173 days. 14 July 2010 was the reasonable date of completion. JP exceeded the reasonable time for completion by 161 days (see the Liability Judgment (HC) at [352] and [392], and the Liability Judgment (CA) at [14]–[20]). JP was liable to Crescendas in general damages rather than under the liquidated damages clause in cl 6.0 of the LOI, as the latter, in the absence of an extension of time clause, had been rendered inoperative by Crescendas’ acts of prevention (Liability Judgment (HC) at [353]).

Whilst each party’s delay was treated as a singular block of time for the purpose of computing the reasonable time for completion and the delay beyond this reasonable period, the days of delay which each party was responsible for were spread out over the period of the Combined Delay, both before and after the reasonable date of completion of 14 July 2010. The actual periods of delay attributable to Crescendas were six days from 26 to 31 December 2008; 147 days from 4 January 2009 to 1 June 2009; seven days in November 2010; and 13 days in December 2010. The actual periods of delay attributable to JP were interspersed between the periods of delay caused by Crescendas (see Damages Judgment (HC) at [12]–[23] and [79]; Liability Judgment (HC) at [76]–[77], [268], [327], [345] and [349]).

In the second tranche of the trial, Crescendas sought an assessment of general damages in respect of the 161 days of delay for which JP was responsible. The Judge delivered his decision on damages in Damages Judgment (HC).

Undisputed facts

For the second tranche of the trial, parties submitted an agreed statement of facts setting out some of the variables for calculating the loss suffered by Crescendas. The Net Lettable Area (“NLA”) of Biopolis 3 was 357,154 square feet.⁹ The quantum of holding costs incurred by Crescendas from 23 January 2010 to 12 January 2011 was $2,340,102.37 (“Holding Costs”).¹⁰ The quantum of site staff costs (“Site Staff Costs”) incurred by Crescendas from 23 January 2010 to 12 January 2011 was $284,142.14.¹¹

Parties’ cases before the Judge

Crescendas claimed general damages for the delayed completion in respect of three heads of loss:¹² “loss of chance” to earn net rental revenue; Holding Costs; and Site Staff Costs. JP accepted that it should be liable for Site Staff Costs incurred during the 161-day period from 15 July 2010 (ie, the day after the reasonable date of completion) to 22 December 2010, amounting to $132,157.12.¹³ The dispute between parties therefore revolved around the quantum and recoverability of damages for the “loss of chance” to earn net rental revenue and Holding Costs.

Crescendas’ claim in respect of the “loss of chance” to earn net rental revenue was made on an expectation basis. According to Crescendas, three forms of net rental revenue loss flowed from the Combined Delay:¹⁴ loss of net rental revenue for the period of the Combined Delay itself; loss of net rental revenue from each year of a tenancy that a pre-commitment tenant (as referred to below at [14]) would have entered into if not for the Combined Delay and whose lease term would have been longer than the Combined Delay; and all other loss of net rental revenue from the additional time required for Biopolis 3 to achieve stabilised occupancy due to the Combined Delay (the concept of stabilised occupancy is elaborated below at [114]). Crescendas referred to the first as “pre-completion losses” and the next two as “post-completion losses”.

In particular, Crescendas argued that the Combined Delay resulted in the loss of five pre-commitment tenants which would have otherwise taken up a lease in Biopolis 3 at the start of 2010. These five pre-commitment tenants were the Institute of Chemical and Engineering Sciences (“ICES”) under the Agency for Science, Technology and Research, Abbott Laboratories (Singapore) Pte Ltd (“Abbott”), the Nanyang Technological University (“NTU”), PetNet Solutions Pte Ltd (“PetNet”), and Philip Morris Products SA (“Philip Morris”).¹⁵

In quantifying its net rental revenue loss, Crescendas submitted that the appropriate method of quantification was the “Multi-Year Model”, which computed the difference between the projected net rental revenue it would have earned had there been no Combined Delay and the actual net rental revenue it had earned, over the span of multiple years stretching from the period of the Combined Delay to the years thereafter. A discount rate of 8% was then applied to this difference. Crescendas contended that the Multi-Year Model reflected the full loss it suffered and was preferable to the “Single-Year Model”, which only calculated Crescendas’ loss of net rental revenue in the year of 2010.¹⁶ Using the Multi-Year Model, Crescendas claimed net rental revenue loss of $10.2m from JP.

Next, in addition to the “loss of chance” to earn net rental revenue, Crescendas claimed Holding Costs as reliance loss. It argued that there would be no double recovery as the former covers net rental revenue loss (and not gross rental revenue loss).¹⁷

In response, JP raised various issues of causation and remoteness to deny the recoverability of damages for net rental revenue loss. As to quantum, JP argued that the maximum amount of damages that Crescendas could claim should be limited to the amount of liquidated damages it would have been liable for under cl 6.0 of the LOI.¹⁸ Further, the Single-Year Model should be used in lieu of the Multi-Year Model because the former had fewer speculative elements.¹⁹ Using the Single-Year Model, JP submitted that it should only be liable for a sum between $308,045.33 and $627,987.17 (depending on the parameters adopted by the court).²⁰ JP further argued that a settlement sum of $4.75m paid to Crescendas by one of the pre-commitment tenants, PetNet (the “Settlement Sum”), should be deducted from any damages awarded for net rental revenue loss.²¹

In respect of Crescendas’ claim for Holding Costs, JP again contested its recoverability on the grounds of causation and remoteness. Further, JP argued that Crescendas could not claim Holding Costs in addition to its alleged net rental revenue loss because it had to incur Holding Costs in order to earn the alleged net rental revenue.²² In relation to quantum, JP accepted that Crescendas incurred Holding Costs amounting to $2,340,102.37, but argued that the amount recoverable should exclude the Holding Costs incurred during the rent-free fitting-out period which Crescendas...