Tan Woo Thian v PricewaterhouseCoopers Advisory Services Pte Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 04 March 2021
• Neutral Citation: [2021] SGCA 20
• Year: 2021
• Published date: 10 March 2021
• Hearing Date: 04 March 2021
• Plaintiff Counsel: Narayanan Vijya Kumar (Vijay & Co)
• Defendant Counsel: Kelvin Poon, Ang Peng Koon Patrick, Chew Xiang, Chow Jie Ying, Cheong Tian Ci, Torsten (Rajah & Tann Singapore LLP)
• Court: Court of Appeal (Singapore)
• Citation: [2021] SGCA 20
• Docket Number: Civil Appeal No 93 of 2020

Sundaresh Menon CJ (delivering the judgment of the court ex-tempore): Introduction

This appeal arises out of a decision by the Judge below (the “Judge”) entirely dismissing the appellant’s claim for negligence in HC/S 267/2017 (“Suit 267”): see Tan Woo Thian v PricewaterhouseCoopers Advisory Services Pte Ltd [2020] SGHC 171. The Judge found that the respondent did not owe the appellant any duty of care. Even if such a duty of care was owed, the respondent had not acted in breach of it. Furthermore, even if there had been breach of such a duty, the appellant had not shown that he had suffered loss flowing from any such breach.

While this appeal bears the trappings of an ordinary claim in negligence, it should be seen in the context of a wider dispute over the control of SBI Offshore Limited (“SBI”), a Catalist-listed company, between its present and former management. The respondent had been engaged by SBI’s management at that time, in particular its Chief Executive Officer (“CEO”) Mr Chan Lai Thong (“John Chan”), to conduct a fact-finding review in respect of certain transactions. Those transactions included a series of transactions SBI had entered into in connection with its acquisition and subsequent disposal of shares in a Chinese entity known as Jiangyin Neptune Marine Appliance Co Ltd (“NPT”). The appellant had been involved in these transactions pertaining to NPT in his capacity as SBI’s former CEO. The respondent subsequently prepared a report on its findings, and an executive summary of the report (the “Executive Summary”) was circulated to SBI’s Board of Directors (“SBI’s Board”) and shareholders. Certain matters were then brought to the attention of the law enforcement agencies by way of a report that was subsequently made by John Chan to the Commercial Affairs Department (“CAD”), stemming from the respondent’s findings.

The appellant, who holds 21.89% of SBI’s shares, alleged that inaccurate and/or misleading statements had been made in the (allegedly) negligently prepared and/or presented Executive Summary and that these had caused him loss. The loss alleged in consequence of the respondent’s alleged negligence included reputational loss, diminution in the value of the appellant’s SBI shares, emotional trauma, and loss of influence in SBI. It is against this backdrop that this appeal arises.

Substance of the appeals

The appellant appealed against the Judge’s three main findings on the existence of a duty of care, breach of that duty, and whether that breach had caused loss. As all parties accepted, if the appellant failed on any one of these points, that would necessarily be fatal to its claim.

Apart from his substantive appeal, the appellant also appealed against the Judge’s order as to costs. The Judge had ordered that the appellant pay S$240,000 in costs to the respondent. Specifically, an uplift of S$60,000 above the “baseline” costs of S$180,000 was ordered on grounds of the appellant’s conduct at trial. The Judge also allowed the full sum of the respondent’s disbursements, or S$277,141.09. The appellant challenged both the uplift of S$60,000 and the Judge’s decision on disbursements.

Decision

This appeal may be dealt with swiftly even though we think a number of difficult issues arise in connection with the question of whether a duty of care arises. That is because even assuming, for the sake of argument, that a duty of care exists, and that the respondent had breached that duty, the appeal inevitably fails at the hurdle of causation. A cause of action in negligence is inchoate absent evidence of actual loss. This is distinct from the question of what the precise quantum of such loss is. The appellant’s sole argument on causation, as set out in his Appellant’s Case at [94], was that the trial was bifurcated between liability and quantum, and that the case should go for assessment of damages if breach of a duty of care was made out.

The appellant’s contention in this regard is, with respect, incorrect. It wrongly conflates the separate questions of whether the appellant is able to establish that the respondent’s breach has caused loss, with the quantum of that loss. In order to even make out the tort of negligence, it must first be shown that the defendant’s breach has in fact caused loss. As observed in Winfield & Jolowicz on Tort (Sweet & Maxwell, 2014, 19th Ed) at [7-002]:

Even if the claimant proves every other element in tortious liability he will lose the action or, in the case of torts actionable per se, normally fail to recover more than nominal damages, if what the defendant did is not treated as a legal cause of his loss. This issue is logically distinct from and anterior to the question of measure of damages which will be dealt with at a later stage. Thus, in one of the leading cases, the issue was whether the defendants were liable for fire damage to a wharf which arose from a rather unusual chain of events after the defendants spilled oil into a harbour. If they had been liable (in fact they were not) the prima facie measure of damages would have been the cost of repairing the wharf plus consequential losses like loss of business …

[Emphasis added in bold italics]

It follows from this that if, and to the extent, the trial had been bifurcated between liability and quantum, then the plaintiff would not have been obliged to adduce evidence at the liability stage of the trial as to the quantification of the losses and injuries he claims he suffered. But, he would nonetheless have been obliged to show that he did, in fact, suffer one or more types of loss that was causally connected to the alleged breach.

In this regard, the entirety of the appellant’s pleadings on causation consisted of the following:

By reason of the matters aforesaid, Mr Tan has suffered loss and damage. Full particulars will be supplied on receipt of an accountant’s report but the heads of damage are as follows: (1) Loss of business reputation in Singapore and abroad with consequential diminution in business opportunities and loss of income and/or profits such as being unable to connect with existing clients, to enter into new deals, or to be employed by other companies. (2) Diminution in the value of Mr Tan’s shareholding in the Company as a consequence of the share price falling due to the publicity arising out of the [appellant’s] Report and the submission of a report to the [Commercial Affairs Department]. (3) Loss of influence in the Company and loss of ability to stabilise the Company or to bring lucrative business to the Company with resultant loss of dividend income. In the event that the five resolutions had been passed in the EGM on 16 July 2016, the new Board would almost certainly have appointed Mr Tan to his old position, which...