Sandar Aung v Parkway Hospitals Singapore Pte Ltd (trading as Mount Elizabeth Hospital) and Another

• Judge: Andrew Ang J
• Judgment Date: 30 March 2007
• Neutral Citation: [2007] SGCA 20
• Citation: [2007] SGCA 20
• Defendant Counsel: Lek Siang Pheng and Mar Seow Hwei (Rodyk & Davidson)
• Published date: 04 April 2007
• Plaintiff Counsel: Ponniah James Leslie and Leong Sue Lynn (Wong & Lim)
• Date: 30 March 2007
• Docket Number: Civil Appeal No 102 of 2006
• Court: Court of Appeal (Singapore)
• Subject Matter: Whether contract including estimate of bill such that no liability for payment of excess costs existing,Final bill exceeding estimate greatly,Contract,Whether context and factual background of agreement relevant,Contractual terms,Rules of construction,Contract with hospital to pay all expenses incurred by stay in hospital and estimate of bill furnished by hospital signed

30 March 2007 Judgment reserved.

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

1 This is an appeal by Sandar Aung (“the appellant”) against the decision of the trial judge (“the Judge”) allowing, inter alia, Parkway Hospitals Singapore Pte Ltd (“the first respondent”) to add Mount Elizabeth Medical Holdings Ltd (“the second respondent”) as a co-plaintiff and giving judgment to the respondents for the sum of $320,083.77 on the basis of an agreement signed by the appellant (see Parkway Hospitals Singapore Pte Ltd (trading as Mount Elizabeth Hospital) v Sandar Aung [2007] 1 SLR 227 (“GD”)).

2 After considering the parties’ arguments on appeal, we have decided to allow the appeal, and set out our reasons for doing so.

The facts

3 This appeal arises out of a most unfortunate and unanticipated chain of events. On 7 January 2004, the appellant admitted her mother, Daw Tin Nyunt (“the patient”) to Mount Elizabeth Hospital (“the hospital”) for the purpose of undergoing an angioplasty. At the time of the patient’s admission, the appellant had signed two documents – an “Estimate of Hospital Charges” (“the Estimate”) and a standard form document entitled “Mount Elizabeth Hospital Ltd Conditions of Services/Hospital Policies” (“the contract”).

4 The first respondent’s witness, Ms Siew Mun Hong (“Ms Siew”), who served as a business office executive at the hospital during the relevant period, testified that she had handled the admission of the patient on 7 January 2004. While she could not specifically recall the patient or the appellant, Ms Siew’s evidence was that she would have followed her usual routine of registering the patient and giving financial counselling. She further stated that the appellant was probably the only one present at the admission counter and who had undergone financial counselling, as only the appellant’s signature appeared on both documents.

5 As the appellant elected not to call any evidence, Ms Siew’s account of counselling, which entailed a two-step process, should be noted. First, a billing estimate would be given as part of the financial counselling process. According to Ms Siew, she would first obtain the doctor’s admission letter and verify the patient’s identity, before proceeding to register the patient for admission. She would then provide a financial estimate to the patient. This estimate was based on the diagnosis and medical procedure to be carried out, and would be generated by means of a computer programme. The estimate would then be printed out in a document entitled “Estimate of Hospital Charges” (ie, the Estimate), and its contents brought to the attention of the patient as well as the guarantor. She would then go through the estimated length of stay, accommodation charges and ancillary charges, and highlight that the estimates given excluded the doctors’ charges. As part of her routine, she would also underscore that the figures shown were only estimates. Ms Siew would then inform the patient as well as the guarantor of the need for a deposit, and request that the patient as well as the guarantor sign the Estimate.

6 While Ms Siew was aware that complications could potentially arise and thereby inflate the cost of treatment beyond that stated in the Estimate, she testified that she had not informed the appellant or other patients about this possibility because it was not her task to do so. Neither did she inform or represent to the appellant that the final hospital bill would be limited to the amount stated in the Estimate.

7 The second stage of the process required Ms Siew to go through the contract, and ensure that the patient and the guarantor sign the contract. The guarantor would also have to sign an undertaking agreeing to be jointly and severally liable with the patient for “all charges, expenses and liabilities incurred by and on behalf of the patient” (“the undertaking”). The patient would then be given signed copies of the Estimate and the contract.

8 In the appellant’s case, the Estimate for the patient’s angioplasty stated that the accommodation charges for two days would be $878 and the ancillary charges would be $14,349.30. The “total estimated hospital charges” was thus computed to be $15,227.30.

9 However, an unanticipated series of events resulted in a medical bill that was far greater than that contained in the Estimate. The angioplasty procedure did not have the intended outcome and the patient was required to undergo an urgent open heart bypass surgery. The patient’s health woes did not end there; her path to recovery was far from smooth and she suffered from a litany of ailments that included a minor stroke, infection, gangrene, bleeding into the intestinal tract, skin ulcers, deep vein thrombosis, eye problems as well as emotional changes. The patient thus had to be hospitalised for some eleven months until her eventual discharge from the hospital on 19 December 2004. The hospital subsequently rendered an invoice for $537,432.34, being the balance due for hospitalisation, medical facilities and services (“medical services”) after the deposit payments of $23,000 were taken into account. Of the amount claimed, $128,728.50 was described as being doctors’ fees.

10 While the patient was still hospitalised, the second respondent underwent a corporate restructuring, in consequence of which the second respondent transferred and assigned all its assets to the first respondent with effect from 1 October 2004. The hospital was thereafter registered as a business of the first respondent, who operated the hospital and provided medical services to the patient. Neither the first nor the second respondent gave the appellant any written notice of the assignment.

11 The patient failed to pay the invoice and this suit was thus brought against the appellant on the basis of the contract and the undertaking contained therein. The first respondent further pleaded that the sum of $537,432.34 had been transferred and assigned by the second respondent to the first respondent on 1 October 2004.

12 The appellant denied liability on numerous grounds. She contended, inter alia, that the scope and ambit of the undertaking was limited only to the charges, expenses and liabilities incurred by or on behalf of the patient in relation to the angioplasty procedure and the estimated two days of hospitalisation after the angioplasty procedure. The appellant further averred that she had not been informed of the assignment of her debt to the first respondent, and that the first respondent’s claim was unconscionable.

13 When the matter came on for trial, the appellant elected not to offer any evidence. It was at this point that the first respondent applied to amend the writ of summons and pleadings by adding the second respondent as co-plaintiff. The Judge proceeded to allow the application despite the appellant’s objections. In the Judge’s opinion, it was clear from the beginning of the action that the first respondent was suing as an assignee, and the problem of non-joinder was a technical one (see GD at [13]).

14 The Judge took the view that the contract was binding, and that the appellant was liable to pay for all medical services provided by the second respondent to the patient by reason of the undertaking contained therein. The wording of the undertaking made it plain that no limit would be imposed on the appellant’s liability to pay (see GD at [27] and [30]).

15 However, the Judge only gave judgment for the respondents in the sum of $320,083.77, with interest at 6% from the date of the writ and costs on an indemnity basis. The judgment sum of $320,083.77 was arrived at by making the following three deductions from the sum of $537,432.34 claimed:

(a) $88,452.04 for medical expenses incurred after 1 October 2004, as these services had been provided by the first respondent with whom the appellant had no agreement. The scope of the undertaking was confined to medical services provided by the second respondent from 7 January 2004 to 1 October 2004 (ie, before the assignment);

(b) $128,728.50 being fees of the doctors, with whom the appellant had no contract; and

(c) $168 being charges for ambulance services not provided by the respondents.

The ambit and scope of the contract

16 The present appeal raised one basic issue – what was the true construction of the contract between the appellant and the second respondent? More specifically, was the ambit and scope of the contract confined (as the appellant argued) only to expenses related to the angioplasty procedure or did the contract cover all the expenses incurred (as the respondents argued)?

17 Not surprisingly, each party focused only on specific portions of the contract.

18 We find the construction advanced by the appellant to be the correct one, having regard to the language as well as the context of the contract itself.

19 Whilst Mr Lek Siang Pheng, counsel for the respondents, argued that the undertaking by the appellant as guarantor covered “all charges, expenses and liabilities incurred by and on behalf of the patient”, this argument alone is not conclusive. The focus, in our view, ought not to be on the word “all” but, rather, on the type of charges, expenses and liabilities that the parties intended to be covered under the contract. This was the threshold question that ought to have been asked. It would then follow that the appellant would be liable for all of the charges that fell within the ambit and scope of the contract.

20 Mr Lek also focused on the first paragraph of the contract (under the heading “Financial Obligation”). In particular, he referred to the first sentence, which reads as follows:

The undersigned is liable to pay the account of the hospital immediately upon his discharge in accordance with the prevailing rates and terms of the hospital.

21 Once again, however, the above sentence is, in the context of the basic issue in the present appeal, neutral at best. It is true that the...