Hock Tong Bee Pte Ltd v Quek Hock Tiong and another

• Jurisdiction: Singapore
• Judge: Liu Zeming
• Judgment Date: 07 January 2022
• Neutral Citation: [2021] SGDC 296
• Court: District Court (Singapore)
• Docket Number: District Court Suit No. 2197 of 2018, Assessment of Damages No. 192 of 2020
• Year: 2022
• Published date: 14 January 2022
• Hearing Date: 30 June 2021,21 April 2021
• Plaintiff Counsel: Ronald JJ Wong, Stacey Lopez, Chin Yen Bing, Arthur (Covenant Chambers LLC)
• Defendant Counsel: Tan Wen Cheng Adrian (August Law Corporation)
• Subject Matter: Tort,Conversion,Damages,Chattels,Evidence,Admissibility of evidence,Hearsay
• Citation: [2021] SGDC 296

Deputy Registrar Liu Zeming:

In these assessment of damages proceedings (the “AD proceedings”), the Plaintiff makes the novel argument that the contents of an expert report was admissible in evidence despite the expert’s absence at these AD proceedings, because the report had already been admitted into evidence at the trial on liability. For the reasons set out in this decision, I rejected the argument. In my view, in a bifurcated trial, evidence must be admitted and received in the usual course for each distinct part of the trial. These AD proceedings also raised interesting issues on how to assess damages for converted goods and the issue of costs where the Plaintiff succeeded in proving conversion for only around half of the items claimed.

The AD proceedings took place before me on 21 April 2021 and I gave my decision on 31 May 2021. My decision on costs was separately rendered on 30 June 2021. These are the grounds of my decision.

Background

These proceedings arose out of the Plaintiff’s claims against the 1st and 2nd Defendants for conversion of 280 bottles of high-end and commercial wines. The factual background had been set out in the decision of the trial judge in Hock Tong Bee Pte Ltd v Quek Hock Tiong and another [2020] SGDC 81. I will summarise only the salient facts relevant to these AD proceedings.

The Plaintiff, Hock Tong Bee Pte Ltd, is in the business of selling wines. It is one of the largest wine distributors and retailers in Singapore.¹ From 2011 to 2013, one of the Plaintiff’s relationship manager, Ms. Luciana Lim (“Luciana”), dishonestly converted 14,698 bottles of the Plaintiff’s wines. Luciana was convicted for criminal breach of trust under section 408 of the Penal Code (Cap. 224).

Some of the wines misappropriated by Luciana were sold by Luciana to the 1st and 2nd Defendants, and the Plaintiff commenced the present suit against the Defendants for conversion of 280 bottles of wine. The suit was bifurcated and the trial on liability took place over five days between September 2019 to March 2020. At the end of the trial, the trial judge found the Defendants liable in conversion for all 280 bottles. The Defendants appealed against the decision of the trial judge and their appeal was allowed in part. The High Court Judge found the Defendants liable for conversion of 150 bottles of wine (instead of all 280 bottles) listed at Annex A (the “Misappropriated Bottles”). The Plaintiff’s damages for the conversion of the Misappropriated Bottles were to be assessed.

The Issues

The parties’ positions and the main issues before me in these AD proceedings can be summarised as follows: First, there was a preliminary issue as to what evidence I could and should have regard to in assessing the Plaintiff’s damages. The particular issue arose in this case because the Plaintiff’s expert witness did not attend to be cross-examined at the AD proceedings. The Plaintiff submitted that notwithstanding, the expert’s evidence was admissible because he was cross-examined during the trial on liability, and his expert report was admitted into evidence then. The Defendants objected to the admission of the Plaintiff’s expert evidence. I shall refer to this as the “Evidential Issue”. Second, I had to determine how to assess the value of the Misappropriated Bottles. The Plaintiff argued that the correct measure was the “market value” or the hypothetical selling price of the wines, whereas the Defendants contended that I should use the “replacement cost”, or the hypothetical purchase price of the Misappropriated Bottles at the time of conversion. I shall refer to this as the “Assessment Issue”. Third, the Defendants contended that the Plaintiff had failed to mitigate its losses because the Plaintiff “[failed] to verify…the orders placed by Luciana Lim”, and therefore “assumed responsibility for its own mistake in allowing Luciana Lim to misappropriate the wines”.² I therefore had to consider whether deductions should be made on account of any alleged failure by the Plaintiff to mitigate its losses. I shall refer to this as the “Mitigation Issue”. Lastly, there was the issue of costs. Specifically, the Defendants contended that the Plaintiff should only be entitled to 44% of the usual costs, since it only succeeded in proving conversion of 150 bottles out of the 280 bottles claimed. The Plaintiff, on the other hand, argued that it should be entitled to the full costs of the claim since it succeeded in proving the “fundamental issue in the suit”.³ I shall refer to this as the “Costs Issue”.

I set out my decision on each of the four issues in that order.

The Evidential Issue

The Evidential issue arose in respect of the admissibility of the evidence of Mr. Tay Ngee Beng (“Mr. Tay”).

Background

Mr. Tay is an expert in the trading, sales and distribution of wine and spirits, and was the Plaintiff’s expert witness at the trial on liability. Mr. Tay had affirmed an affidavit of evidence in chief dated 21 May 2019 and produced an expert report dated 21 May 2019 (“Expert Report”). The Expert Report addressed, amongst other things, the retail market value of the Misappropriated Wines.

As the Plaintiff’s expert witness, Mr. Tay attended the trial on liability on 8 January 2020 and his evidence, including the contents of the Expert Report, was subjected to cross-examination by the Defendants’ counsel on that occasion.

By the time of the AD proceedings, however, I was informed by the Plaintiff’s counsel that Mr. Tay had been rendered bed-ridden by terminal liver cancer and was unable to attend the assessment of damages hearing. For compassionate reasons and out of respect of his privacy, the Plaintiff decided not to ask Mr. Tay for any documentary proof of his medical condition, and there was therefore no such evidence before me.⁴

Parties’ Positions

Notwithstanding Mr. Tay’s absence, the Plaintiff sought to rely on the contents of the Expert Report in these AD proceedings, and contended that I could have regard to them as well. The reason, as the Plaintiff submitted, was because the Expert Report had already been admitted into evidence by virtue of Mr. Tay’s attendance at trial on liability.⁵ Accordingly, the Plaintiff submitted that there was no issue of admissibility with respect to Mr. Tay’s evidence. The only issue was the appropriate weight to be given to the Expert Report in light of Mr. Tay’s inability to attend the AD proceedings to be cross-examined. In this regard, the Plaintiff submitted that some weight should nevertheless be given to the Expert Report as it has high probative value.⁶

Unsurprisingly, the Defendants objected to the use of the Expert Report for the obvious reason that Mr. Tay did not attend the assessment of damages hearing to give evidence and be cross-examined. This, the Defendants submitted, was clearly not in compliance with Order 38 Rules 1 and 2(1) of the Rules of Court (2014 Rev Ed) (the “ROC”), which provided that any evidence of witnesses shall be proven by the examination of the witness in open Court and that unless the Court otherwise orders or the parties agree, such a witness shall attend trial for cross-examination. Accordingly, if the witness did not attend for examination, his affidavit shall not be received in evidence except with the leave of the Court.⁷ The relevant portions of Order 38 of the ROC are set out below:

General rule: Witnesses to be examined (O. 38, r. 1)

1. Subject to these Rules and the Evidence Act (Cap. 97), and any other written law relating to evidence, any fact required to be proved at the trial of any action begun by writ by the evidence of witnesses shall be proved by the examination of the witnesses in open Court.

Evidence by affidavit (O. 38, r. 2)

2.—(1) Without prejudice to the generality of Rule 1, and unless otherwise provided by any written law or by these Rules, at the trial of an action commenced by writ, evidence-in-chief of a witness shall be given by way of affidavit and, unless the Court otherwise orders or the parties to the action otherwise agree, such a witness shall attend trial for cross-examination and, in default of his attendance, his affidavit shall not be received in evidence except with the leave of the Court.

…

(4) Notwithstanding paragraph (1), (2) or (3), the Court may, if it thinks just, order that evidence of a party or any witness or any part of such evidence be given orally at the trial or hearing of any cause or matter.

[emphasis added in bold]

My Decision

The requirement for a witness giving evidence to attend at the trial with the opposing party having the corresponding opportunity to cross-examine and test the evidence of that witness is fundamental to our adversarial system, and I need not cite any authority for that. The question was how that should be applied in a bifurcated trial.

At first glance, there might be some superficial attraction in the Plaintiff’s submissions because a bifurcated trial can be seen as one single trial that had simply been split into distinct and separate parts. The cause of action, the suit and the inquiries remained the same, only the manner in which the trial is conducted is separated into two (or more) distinct parts. On that view, I could see some force in the Plaintiff’s submissions that evidence admitted for the trial on liability is deemed as having been admitted for the entire trial, including the trial on damages.

Despite that superficial attraction, I was ultimately unable to accept these submissions as I found the position to be contrary to the evidential regime, case authorities and, fundamentally, the rules of fairness. In my view, in a bifurcated trial, evidence must be admitted and received in the usual course for each distinct part of the trial.

I start first with the evidential regime.

Although none of the parties referred to the provisions of the Evidence Act ...