Sun Electric Pte Ltd and another v Menrva Solutions Pte Ltd and another

• Jurisdiction: Singapore
• Judge: Andrew Phang Boon Leong JA
• Judgment Date: 26 September 2019
• Neutral Citation: [2019] SGCA 51
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 1 of 2019
• Year: 2019
• Published date: 01 October 2019
• Hearing Date: 26 September 2019
• Plaintiff Counsel: Koh Swee Yen, Daniel Liu Zhao Xiang, Zoe Kok and Andrew Pflug (WongPartnership LLP)
• Defendant Counsel: Ng Lip Chih (Foo & Quek LLC) (instructed), Jennifer Sia Pei Ru and Rezvana Fairouse d/o Mazhar Deen (NLC Law Asia LLC)
• Subject Matter: Contract,Breach,Privity of contract,Common law,Tort,Negligence,Duty of care,Breach of duty,Causation
• Citation: [2019] SGCA 51

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

This is an appeal by the first appellant, Sun Electric Pte Ltd (“SE”), and the second appellant, Sun Electric Power Pte Ltd (“SE Power”), against the decision of the High Court judge (“the Judge”) in Sun Electric Pte Ltd v Menrva Solutions Pte Ltd [2018] SGHC 264.

Having carefully considered the written as well as oral submissions of the parties, we dismiss the appeal. Turning first to the claims in contract, we agree with the Judge’s decision that there was only breach of cl 1(b)(v)(a) of the Consulting Agreement. There was no breach of sub-cll (b) to (e). In any event, we are not persuaded that the losses sustained by SE Power were caused by any of the alleged breaches of sub-cll (b) to (e).

The Judge was also entitled to find that, on the relevant facts, there was no causal link between the breach of sub-cl (a) by the first defendant, Menrva Solutions Pte Ltd (“Menrva Solutions”), and the losses sustained by SE Power on the contracts for differences (“CFDs”). The Appellants argued that it was never put to Dr Peloso that he would have disregarded the daily valuations had they been produced. We find, however, that there was no breach of procedural fairness on the facts because Dr Peloso was not deprived of the opportunity to put forward his case on the matter. First, a part of the cross-examination of Dr Peloso focused on his failure to ask Menrva Solutions for the daily valuations and on whether the daily valuations were important for SE’s purposes, and he had responded to these questions, claiming that the daily valuations were important. Second, Dr Peloso also testified on matters relating to whether he would have taken heed of the daily valuations: he admitted that he did not read most of the SGX market updates SE Power received despite the fact that he knew these updates would give him information as to how the market was performing, and that he did not always read the Reports produced by Tong Teik Pte Ltd containing data on the performance of the CFDs. We are not persuaded that we should interfere with the Judge’s finding that it was more likely than not that Dr Peloso would not have read and acted on Menrva Solutions’ daily indicative valuations even if Menrva Solutions had produced them.

In so far as the issue of privity is concerned, in particular that relating to the fact that SE Power was not a party to the Consulting Agreement and that relating to the question whether the losses it sustained could be claimed by SE under the Consulting Agreement, we agree with the Appellants that the Judge should have given parties the opportunity to address the issue. It is not definitely the case that SE could never claim for the amount of losses sustained by SE Power if it was not a party to the Consulting Agreement. The Appellants argued that on a construction of the Consulting Agreement, SE Power’s losses are to be treated as part of SE’s losses. In the alternative, they argued that the exception to the general rule that a plaintiff can only recover nominal damages for a breach of contract where it has suffered no loss, referred to in the case law as the “broad ground”, applies. The “broad ground”, as approved by this court in the cases of Chia Kok Leong v Prosperland Pte Ltd [2005] 2 SLR(R) 484 and Family Food Court (a firm) v Seah Boon Lock and another (trading as Boon Lock Duck and Noodle House) ...