Wishing Star Ltd v Jurong Town Corporation

• Court: Court of Appeal (Singapore)
• Judgment Date: 09 April 2008
• Docket Number: Civil Appeal No 107 of 2007
• Date: 09 April 2008

Wishing Star Ltd

Plaintiff

and

Jurong Town Corp

Defendant

[2008] SGCA 17

Chan Sek Keong CJ

,

Andrew Phang Boon Leong JA

and

V K Rajah JA

Civil Appeal No 107 of 2007

Court of Appeal

Contract–Misrepresentation–Fraudulent–Land developer entering into transaction in reliance upon fraudulent misrepresentations of contractor–Whether land developer furnishing sufficient proof or evidence of loss–Whether losses suffered by land developer recoverable–Scope of recovery of damages for fraudulent misrepresentation–Damages–Measure of damages–Contract and tort–Different objectives in awarding damages in contract and tort respectively–Possible coincidence in quantum between respective measures of damages more by way of factual coincidence–Tort–Misrepresentation–Fraud and deceit–Scope of recovery of damages for fraudulent misrepresentation–Loss flowing directly as a result of entry by land developer (in reliance upon fraudulent misrepresentation) into transaction in question, including all consequential loss–Loss recoverable even if not reasonably foreseeable

The respondent (“JTC”) was to develop a large research complex, the Biopolis, on a fast-track basis (“the Project”). One important facet of the construction works comprised the design, supply, delivery and installation of curtain walling and cladding systems for the seven tower blocks of the Biopolis (“the façade works”).

JTC was assisted in the Project by its consultant (“JCPL”). JCPL invited tenders for the façade works. The tenderers were required to meet certain evaluation criteria imposed by JTC (“the evaluation criteria”) for the purposes of shortlisting and selecting potential subcontractors. This tender exercise (“the original tender exercise”) drew a total of eight bids. Amongst these was the appellant's (“WSL”) bid of $54m which turned out to be the lowest. The next lowest bid, which was submitted by SB Façade Pte Ltd (“SB Façade”), was in the sum of $54,071,488. However, JTC did not give any consideration to this bid because of its past experience with SB Façade. The next lowest bid after the bids submitted by WSL and by SB Façade was that submitted by Liang Huat Aluminium Industries Pte Ltd (“Liang Huat”) in the value of $63,458,706.

The contract for the façade works was awarded to WSL on 14 June 2002. In its bid, WSL had made a number of representations of compliance with various items under the evaluation criteria, some of which were later found to be false. On 9 September 2002, JTC terminated its contract with WSL (“the WSL Contract”) for, inter alia, misrepresentation and breach of contract. JTC then engaged a new contractor, Bovis Lend Lease (“BLL”), to take over and complete the façade works pursuant to an invitation to tender on 13 September 2002 (“the 13 September 2002 tender exercise”) where it had submitted the lowest bid. The total amount to be paid to BLL under this contract (“the BLL Contract”) was $61.81m.

WSL subsequently commenced an action against JTC for various reliefs, including damages for wrongful termination. JTC counterclaimed for damages for fraudulent misrepresentation. After the trial judge had decided the issue of misrepresentation in favour of WSL (see Wishing Star Ltd v Jurong Town Corp [2005] 1 SLR (R) 339), upon JTC's appeal, the Court of Appeal, in Jurong Town Corp v Wishing Star Ltd [2005] 3 SLR (R) 283, found that WSL had indeed made numerous fraudulent misrepresentations. The court also held that JTC had validly terminated the WSL Contract. Accordingly, the court ordered WSL to pay JTC damages to be assessed.

In the assessment of damages, JTC claimed damages under a number of heads which the judge in the court below (“the Judge”) mostly allowed. Dissatisfied with the Judge's decision, WSL appealed. The main issue that arose for determination in the appeal was whether JTC had proved that the sum of $7.81m, being the difference between the value of the WSL Contract and that of the BLL Contract, which was awarded as damages to JTC by the Judge, was loss flowing directly from WSL's fraudulent misrepresentations.

Held, allowing the appeal in part:

(1) Damages for fraudulent misrepresentation included all loss that flowed directly as a result of the entry by the plaintiff (in reliance upon the fraudulent misrepresentation) into the transaction in question, regardless of whether or not such loss was foreseeable, and included all consequential loss as well. The scope of recovery of damages for fraudulent misrepresentation was very broad: at [21] and [27].

(2) There were different objectives in awarding damages in contract and in tort, respectively. In contract, the object of damages was to put the plaintiff in as good a position, as far as money could do it, as if the promise had been performed. In tort, the purpose of damages was to put the victim into the position in which he would have been, if the tort had not been committed. There could, however, be a coincidence in quantum between the contractual and the tortious measures of damages, depending on the precise facts of the case concerned, although this would be more by way of a factual coincidence and did not signify any coincidence in the purposes that the law of contract and the law of tort, respectively, serve: at [28] and [43].

(3) On the evidence before the court, WSL's bid was the lowest overall. With respect to the original tender exercise, JTC could not in reality have accepted any bid below that of $63,458,706 submitted by Liang Huat. With respect to the 13 September 2002 tender exercise, the lowest bid (ie, that submitted by BLL) was below the aforementioned bid of $63,458,706. If WSL had not made the fraudulent misrepresentations in question, JTC would, in any event, have had to accept a bid pitched at a sum higher than the value of the bid which resulted in the BLL Contract as JTC would have been left with no alternative but to accept Liang Huat's bid of $63,458,706 in the original tender exercise. The difference between the value of the WSL Contract and that of the BLL Contract (which difference amounted to $7.81m) was not loss that flowed directly from the transaction entered into as a result of WSL's fraudulent misrepresentations. JTC had failed to furnish sufficient proof or evidence of loss in respect of its claim for $7.81m: at [37], [40]to [42], [46].

(4) Although WSL had accepted in the court below that the difference between the value of the WSL Contract and that of the BLL Contract was the basis, in principle, upon which damages would be awarded, there was no reason why WSL could not raise an argument on appeal which would correct the inappropriate application of a principle of law to the facts of the case in the court below: at [45].

Angus v Clifford [1891] 2 Ch 449 (refd)

Baker v Asia Motor Co Ltd [1962] MLJ 425 (refd)

Chop Ban Kheng v Chop Siang Huah and Latham & Co (1925) 2 MC 69 (refd)

CHS CPO GmbH v Vikas Goel [2005] 3 SLR (R) 202; [2005] 3 SLR 202 (refd)

Chua Kwee Chen v Koh Choon Chin [2006] 3 SLR (R) 469; [2006] 3 SLR 469 (refd)

Clef Aquitaine SARL v Laporte Materials (Barrow) Ltd [2001] QB 488 (refd)

Derry v Peek (1889) 14 App Cas 337 (refd)

Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158 (refd)

East v Maurer [1991] 1 WLR 461 (refd)

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (refd)

Jurong Town Corp v Wishing Star Ltd [2005] 3 SLR (R) 283; [2005] 3 SLR 283 (refd)

Letchemy Arumugan v N Annamalay [1982] 2 MLJ 199 (refd)

Magnum Finance Berhad v Tan Ah Poi [1997] 3 AMR 2265 (refd)

Malayan Miners Co (M) Ltd v Lian Hock & Co [1965-1967] SLR (R) 307; [1965-1968] SLR 481 (refd)

Ng Buay Hock v Tan Keng Huat [1997] 1 SLR (R) 507; [1997] 2 SLR 788 (refd)

Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd (The Wagon Mound) [1961] AC 388 (refd)

Panatron Pte Ltd v Lee Cheow Lee [2001] 2 SLR (R) 435; [2001] 3 SLR 405 (refd)

Panwah Steel Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd [2006] 4 SLR (R) 571; [2006] 4 SLR 571 (refd)

Raiffeisen Zentralbank Osterreich AG v Archer Daniels Midland Co [2007] 1 SLR (R) 196; [2007] 1 SLR 196 (refd)

Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd [2008] 2 SLR (R) 623; [2008] 2 SLR 623 (refd)

Segar Oil Palm Estate Sdn Bhd v Tay Tho Bok [1997] 3 MLJ 211 (refd)

Sim Thong Realty Sdn Bhd v Teh Kim Dar @ Tee Kim [2003] 3 MLJ 460 (refd)

Smith New Court Securities Ltd v Citibank NA [1997] AC 254 (folld)

South Australia Asset Management Corporation v York Montague Ltd [1997] AC 191 (refd)

Tang Yoke Kheng v Lek Benedict [2005] 3 SLR (R) 263; [2005] 3 SLR 263 (refd)

Tay Tho Bok v Segar Oil Palm Estate Sdn Bhd [1996] 3 MLJ 181 (refd)

Vita Health Laboratories Pte Ltd v Pang Seng Meng [2004] 4 SLR (R) 162; [2004] 4 SLR 162 (refd)

Wishing Star Ltd v Jurong Town Corp [2005] 1 SLR (R) 339; [2005] 1 SLR 339 (refd)

Tan Liam Beng, Tan Kon Yeng Eugene, Ling Vey Hong and Sandra Tan Pei May (Drew & Napier LLC) for the appellant

Ho Chien Mien and Sheik Umar bin Mohamed Bagushair (Allen & Gledhill LLP) for the respondent.

Judgment reserved.

Andrew Phang Boon Leong JA

(delivering the judgment of the court):

Introduction

1 This is an appeal against the award of damages made by the judge in the court below (“the Judge”) in favour of the respondent, Jurong Town Corporation (“JTC”), for fraudulent misrepresentations on the part of the appellant, Wishing Star Limited (“WSL”) (see Wishing Star Ltd v Jurong Town Corp [2007] SGHC 128). The Court of Appeal, in Jurong Town Corp v Wishing Star Ltd [2005] 3 SLR (R) 283 (“Wishing Star (No 2)”), had previously determined the issue of liability in favour of JTC and had ordered WSL to pay damages to be assessed. Pursuant to that decision, JTC proceeded to have its damages assessed. The Judge found largely in favour of JTC and allowed the bulk of its claims.

2 At the heart of this appeal lies a crucial question: What losses did JTC...