Ley Choon Constructions and Engineering Pte Ltd v Tan Koon Huee Adrian

• Jurisdiction: Singapore
• Judge: Chua Wei Yuan
• Judgment Date: 09 October 2017
• Neutral Citation: [2017] SGMC 56
• Court: Magistrates' Court (Singapore)
• Docket Number: MC/Magistrate’s Court Suit No 5192 of 2015 (MC/Assessment of Damages No 582 of 2016)
• Published date: 29 November 2017
• Year: 2017
• Hearing Date: 22 March 2017,12 May 2017
• Plaintiff Counsel: Yap Hiang Hwa Michael (JusEquity Law Corporation)
• Defendant Counsel: and Lim Hui Ying (KhattarWong LLP)
• Subject Matter: Damages - Assessment,Civil procedure - Simplified process - Interrogatories
• Citation: [2017] SGMC 56

Deputy Registrar Chua Wei Yuan:

This is an assessment of damages in an action concerning property damage caused by a non-injury motor accident, in respect of which interlocutory judgment was entered at 100%.

Facts

On 29 May 2013, the defendant’s motor car collided into the rear of the plaintiff’s truck, which had been parked on the middle lane of an expressway.¹ This damaged a piece of safety equipment mounted on its rear known as a truck-mounted attenuator (“TMA”) or a rear anti-crash system. Loosely speaking, it is designed to deform and collapse when a large, fast-moving object (eg, a vehicle) collides with it. This way, it attenuates the impact by absorbing the energy of that vehicle, and accordingly mitigates the injuries done to persons in the vehicles involved in the collision.

The plaintiff’s truck was sent to Lian Hong Seng Motor Works (“the Repairer”),² where the damaged TMA was replaced with a brand new one. Repairing the TMA was not viable because the TMA was, as a piece of safety equipment, subject to certification by the Land Transport Authority of Singapore (“LTA”) and the LTA would not allow the use of a TMA that had been damaged and subsequently repaired.³

Prior to repairs, Mr Dennis Yap Teck Wee of PAL’s Appraiser Pte Ltd (“the Surveyor”) inspected the truck on 1 June 2013.⁴ He recommended that $51,830 be charged for the repairs, which should last four days.⁵ This sum comprised: $48,000, being the cost of a new TMA; $3,800, being the cost to remove and replace the damaged parts, straighten, knock out, realign and repair (including cutting and welding) body panels, and to re-adjust the TMA to its original position (“replacement works”); and $30, being the cost to remove and refit the electrical wiring, replace the damaged lamps and test their functionality (“electrical works”). The latter two figures had been revised downward from $4,500 and $50, which the Repairer had originally proposed.⁶ The repairs were carried out over approximately four days and, on 1 December 2014, the Repairer invoiced the plaintiff for $51,830, being the sum recommended by the Surveyor.⁷

The claim in this action

In this action, the plaintiff claimed $53,630, comprising $51,830 being the cost of supplying and installing a new TMA and $1,800 being damages for the loss of use of the TMA or the truck for six days (ie, two days for the pre-repair inspections and four days for the repairs).

My decision

I will address the issue of the losses flowing from the replacement of the destroyed TMA, and then the issue of the loss flowing from the plaintiff’s loss of use of the truck or TMA.

Main issue 1: Loss in replacing the destroyed TMA

Before the hearing, there was some confusion as to whether the TMA was repaired or replaced. Mr Tok Cheng Sim (the Repairer’s manager), Mr Loh Swee Huat (the plaintiff’s representative) and Mr Victor Fong Whye Phoy (“the SJE”), the single joint expert appointed pursuant to O 108 r 5(3)(a) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”), clarified in oral evidence that the TMA had been replaced because it had been so badly damaged that the LTA would not have allowed it to be repaired and used again.⁸ The hearing thus proceeded on the footing that the actual repairs involved the provision and installation of a new TMA.

Issue 1A: Is the value of the destroyed TMA at the time and place of destruction relevant?

The central issue here is the plaintiff’s loss when it suffers a constructive total loss of the TMA — a piece of used specialised equipment — for which there was no active market. Specifically, the question is whether the defendant is liable for the full cost of replacing the destroyed TMA with a new one or the value of the TMA at its time and place of destruction. In my view, the latter (broadly speaking) represents the plaintiff’s loss.

I will address the plaintiff’s main arguments which focused on precedent and (to some extent) principle, before disposing of a minor argument based on practice.

The plaintiff’s argument from precedent/principle: the approach in Singapore

Where a chattel is damaged beyond repair, damages are measured by the replacement cost of the damaged chattel, which is taken as a fair approximation of the present market value of the destroyed chattel at the time and place of destruction (Singapore Bus Service (1978) Ltd v Gwee Sok Ai (trading as Chuan Bok Wong Trading [1996] 3 SLR(R) 307 (“SBS”) at [15] and [20]). In that case, where a double-decker bus was destroyed and replaced with a new one some time after the accident, the correct approach to determine the replacement cost (and, therefore, the present market value) was to depreciate the cost of a new bus at the time the old one was destroyed on a straight-line basis over the number of years it was in use having regard to the number of years its use was permitted, less the scrap value of the destroyed bus (at [16] and [21]). M Karthigesu JA, delivering the judgment for the Court of Appeal, explained: 15 We now turn to the double-decker. The principle is well established. Where a chattel is damaged beyond repair and there is no market value for such chattel which is the proper measure for the award of damages then damages are measured by the replacement cost of the damaged chattel, which is taken as a fair approximation of the market value of the destroyed chattel at the time and place of destruction. The principle is correctly stated at para 1283 of McGregor on Damages (15th Ed) to which the learned judge referred at [11] of her judgment. The question is how such replacement cost is to be determined. 16 It was submitted by both parties and accepted by the learned judge that in the circumstances of this case it would be correct to depreciate the cost on a straight line basis over the number of years the chattel was in use having regard to the number of years its use was permitted. We agree. Applying that to this case it was agreed that the permitted or statutory period a public transport vehicle, such as the double-decker, could be used for profit on the roads was 12 years (144 months) and that this double-decker had 46 months of use left. The burning question is whether the cost to be depreciated is the present day cost of a Leyland (later renamed Volvo) Olympian which is $242,135, the make of the double-decker, a Leyland Atlantean having gone out of production or the historical cost of the double-decker which was said to be $170,000. 17 Respondent’s counsel sought to persuade us, as he had already persuaded the learned judge below, that there was authority that where there was absence of evidence of market value of the destroyed chattel, the court could rely on the original or historical cost of the destroyed chattel. …

…

20 In our judgment there can be no justification in this case for taking the historical cost of the double-decker. To do so is to take a price of eight years before the date of accident and this overlooks the fluctuations of currency and the variations in interest rates over the years. It would not be placing the appellants in the same position as they would have been had the double-decker not been destroyed as it would not allow them to buy a replacement at the prices available at the time of the destruction of the double-decker, ie at 1993 prices. We also see no merit in the learned judge having opted for the historical price of the double-decker on the grounds that the appellants had not placed their order for a new double-decker bus immediately following the destruction of the double-decker but had waited for the outcome of their claim before doing so. This cannot be a material consideration and seems illogical for she says that had the appellants placed the order for a new double-decker bus immediately following the destruction of the double-decker, she would have been inclined to compute the replacement costs on the current price of a new double-decker bus. (See [13] of her judgment.) 21 In the result we disagree with the learned judge and agree with the learned assistant registrar. We would therefore set aside the learned judge’s award of $56,666 for this item and reinstate the learned assistant registrar’s award of $77,349, that is to say the depreciated cost of a new double-decker bus and deduct therefrom $500 for the scrap value of the double-decker.

[emphasis added in bold and underlined bold]

Ultimately, market value is but one of many ways that the court seeks to ascertain the value of the chattel at the time and place of its destruction. Even if the market value cannot be determined or will be inadequate because of the special or unique nature of the chattel, the court will still to the best of its ability seek to establish or estimate the value of the chattel. (Yip Holdings Pte Ltd v Asia Link Marine Industries Pte Ltd [2012] 1 SLR 131 (“Yip Holdings”) at [36]–[41]). In Yip Holdings, what was destroyed was a 40-year-old, 150-ton crane, which was no longer in production and whose manufacturer was no longer in business. It would ordinarily have become obsolete when it reached 30 years of age, but it was at that time given a new lease of life through refurbishment. Thus, the court relied on expert opinion corroborated by a bona fide offer to arrive at the value of the crane, being the price at which such it could have been sold to third parties if undamaged. Belinda Ang Saw Ean J explained:

Value of the Crane: pre-breach

36 The Crane was manufactured in 1967. It was an old and second-hand crane that was no longer in production as its manufacturers were no longer in business. The market was unable to supply any close replica or suitable replacement of what had been lost. Damages were awarded for the loss of the Crane. In other words, the loss was prima facie the value of the Crane. A question for consideration is how is the value of the Crane to be assessed? 37 One way of...