Singapore Bus Service (1978) Ltd v Mohd Kamal bin Abas and Another

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 13 May 1996
• Neutral Citation: [1996] SGHC 105
• Docket Number: Suit No 1888 of 1994 (Registrar's
• Date: 13 May 1996
• Year: 1996
• Published date: 19 September 2003
• Plaintiff Counsel: Toh Kok Seng (Lee & Lee)
• Citation: [1996] SGHC 105
• Defendant Counsel: Low Tiang Hock (Chor Pee & Co)
• Court: High Court (Singapore)
• Subject Matter: Whether a relevant factor,Plaintiffs having spare vehicles replacing vehicle under repair,Whether award of nominal damages justified,Methods of calculation,Whether claim for loss of use justified,Whether historical cost or cost of new vehicle to be used as basis where no similar second hand vehicles were available,Vehicle damaged beyond repair,Plaintiffs having spare vehicle and having no need to buy new vehicle immediately,Operational costs as basis for calculation of loss,Loss of use of chattel,Chattel damaged beyond repair,No loss of profit shown as plaintiffs had spare vehicles available,Whether court entitled to use estimate where operational costs not proved,Damages,Assessment

This appeal raised interesting questions concerning the measure of damages recoverable by the plaintiffs, Singapore`s foremost provider of public bus services, in respect of buses damaged in road accidents.

Two of the plaintiffs` buses, those bearing registration numbers SBS 6898M and SBS 316R respectively, were involved in an accident on 4 December 1993. What happened that morning was that while bus 6898M was stationary at a bus-stop alongside old Tampines Road, a motor lorry belonging to the second defendant and driven by the first defendant, travelling in the same direction, suddenly hit the rear of the bus. The lorry then went on to collide into the right side of bus 316R which was in the opposite lane of old Tampines Road and travelling in the opposite direction. As a result of the accidents, bus 6898M was damaged beyond repair and was written off by the plaintiff. Bus 316R suffered less serious damage but had to be taken off the road for 21 days until the repairs were completed.

The plaintiffs commenced this action for damages against the defendants in November 1994. Although he filed a defence, the second defendant did not seriously dispute liability for the plaintiffs` claim and on 4 January 1995, by consent, interlocutory judgment was entered against the second defendant for damages to be assessed. The assessment of damages took place before the assistant registrar in October 1995 and the damages were assessed as follows:

(A) SBS 6898M (non-air-conditioned double decker)

(i) Replacement of damaged bus (beyond repair) $ 77,349.00

(ii) Loss of use for 240 days at $312.20 per day($446.00 less 30% deduction for tax) $74,928.00

(iii) Less scrap value $500.00

(iv) Advertisement compensation (agreed) $744.95

$152,521.95

(B) SBS 316R (air-conditioned single decker)

(i) Cost of repair $870.74

(ii) Loss of use for 21 days at $324.80 per day($464.00 less 30% deduction for tax) $6,820.80

$7,691.54

The second defendant appealed against certain items of the assessment. I allowed the appeal and reduced the amounts awarded for those items. In respect of bus 6898M, I assessed the damage for the total loss of the bus as being $56,666 and the loss of its use at the nominal figure of $500. In respect of bus 316R, I reduced the loss of use to $4,872. The plaintiffs are dissatisfied and have appealed.

Principles applicable to the awards

In adjudicating on the appeal I was guided by the fundamental principle of law repeated in so many cases of this kind that the plaintiffs` entitlement was to be awarded such sum as would fairly compensate them for the loss which they actually sustained by reason of the damage to their buses. I was also bound by the equally fundamental principle that it was for the plaintiffs to show what damage they had actually suffered and that if they did not succeed in doing this, they could not be awarded damages on their theoretical estimate of their loss.

At the assessment, the plaintiffs adduced both documentary and oral evidence on their losses. No evidence was adduced by the defendants. The defendants, in fact, relied on the evidence of the plaintiffs` witnesses in making their arguments on the correct amounts to be awarded as damages. As there is no conflict of evidence to be resolved, I will not set out what was said by each witness, but will refer to the evidence in the course of the judgment as and where it relates to the relevant principles and quantum. I will discuss each of the buses in turn.

(i) SBS 6898M

This bus was damaged beyond economic repair and the plaintiffs therefore had to write it off. At the time of the accident, it was more than eight years old and, in accordance with the regulations allowing buses to run on Singapore roads for 12 years only, had a remaining useful lifespan of some 46 months at the end of which it would have been scrapped. The plaintiffs in fact had already completely depreciated the bus in their books and for the purposes of their accounts, its book value was nil. The second defendant, however, accepted, and rightfully so, that this did not mean that the plaintiffs had not suffered any loss by reason of the writing off of the bus and that they were nevertheless entitled to compensation for its destruction. The difference between the parties was which principle governed the ascertainment of the damages. The plaintiffs` contention, which was accepted by the assistant registrar, was that their damages should be assessed by reference to the cost they would incur in replacing the bus.

At the time of the assessment, the plaintiffs had not ordered a specific replacement for bus 6898M. Apparently, their policy was to await the outcome of the claim before placing their order. The plaintiffs did, however, have an estimate of how much it would cost to replace the bus on the basis of other orders which they had placed in accordance with their usual programme for fleet maintenance and replacement. The evidence was that the damaged bus was a Leyland Atlantean AN68. At the time of the accident, this model was no longer in production and had been replaced by the Leyland Olympian (subsequently renamed Volvo Olympian) which had very similar specifications. The total cost of a new Leyland Olympian bus at the time of the accident was $242,135 and the plaintiffs used this price as a basis for their claim.

The plaintiffs` submission was that they were to be restored to the position in which they were before the loss occurred. Normally, this would be the cost of repair but in a case where the damage was beyond repair or repair was not economically feasible, the compensation would be the cost of the replacement. In this particular case, the evidence was that there were no equivalent second-hand double decker buses available in the Singapore market. The plaintiffs said that they could have claimed the entire cost of a replacement bus but instead they had taken the extremely reasonable approach of depreciating the bus over 12 years and claiming only the value of the bus as it was at the time of the accident. The plaintiffs, in calculating the value of the bus at the time of the accident, took the figure of $242,135 (ie the cost of a new bus) and divided it by 144. This gave them a depreciation of $1,681.50 per month so that a bus with 46 months life left would be worth $77,349. This was the sum which the learned assistant registrar awarded the plaintiffs as compensation for the loss of the bus.

Mr Low for the second defendant submitted that that approach was flawed because it was not the replacement cost of the double decker that had to be ascertained but rather its market value at the time of the accident. He contended that this market value could not be derived by the plaintiffs` method of computation of taking the price of a new bus and dividing it by 144 months thereby giving an equal value to each month of the entire lifespan of a new bus. The assertion was that this computation did not take into account the prices of comparables as was customary in the valuation of assets and also the condition of the bus at the time of the accident which would obviously affect its price in the market. Also, the bus had itself originally cost much less than $242,135, so it would be entirely wrong to estimate its second hand value more than eight years after its purchase on the basis of the current price of the replacement value.

What then was the correct principle to be applied? According to McGregor on Damages (15th Ed), at para 1283, the normal measure of damages when a chattel is destroyed is the market value of the goods destroyed at the time and place of destruction. This sum would put the plaintiff back into the position he would have occupied had the chattel not been destroyed, for the amount awarded would enable him to purchase a replacement. This does not mean, however, that the plaintiff is entitled to the cost of a replacement in all circumstances. Where it is unreasonable for him to demand an exact replacement he will be awarded the cost of another chattel `which reasonably meets his needs ... and is reasonably in the same condition.` See Uctkos v Mazzetta [1956] l Lloyd`s Rep 209 at p 216.

It appeared, therefore, that both the plaintiffs and the...