Yap Boon Fong Yvonne v Wong Kok Mun Alvin and another and another appeal

• Jurisdiction: Singapore
• Judge: Steven Chong JA
• Judgment Date: 26 November 2018
• Neutral Citation: [2018] SGCA 80
• Date: 26 November 2018
• Docket Number: Civil Appeals Nos 33 and 35 of 2018
• Published date: 30 November 2018
• Plaintiff Counsel: Margaret Neo Kee Heng and Pang Khin Wee (Hoh Law Corporation)
• Defendant Counsel: Narayanan Ramasamy, Shahira Anuar and Low Huai Pin (Tan Kok Quan Partnership)
• Court: Court of Appeal (Singapore)
• Hearing Date: 01 October 2018
• Subject Matter: Assessment,Damages

Steven Chong JA (delivering the judgment of the court): Introduction

These cross appeals arise from the High Court’s assessment of damages suffered by Ms Yap Boon Fong Yvonne (Ye Wenfeng Yvonne) (“Ms Yap”), the appellant in Civil Appeal No 33 of 2018 (“CA 33”) and respondent in Civil Appeal No 35 of 2018 (“CA 35”), following a road traffic accident between the parties. At the time of the accident, Ms Yap had left her salaried job as a finance manager to helm a nascent start-up business providing accounting and information technology (“IT”) services. Similar to cases involving students and young adults with no employment history, the factual matrix in this case presents exceptional difficulties in terms of proving and quantifying the amount of pre-trial loss of earnings incurred by Ms Yap and her start-up as a result of her accident.

The High Court Judge (“the Judge”) recognised these difficulties, but nonetheless found that Ms Yap had clearly suffered some loss. In these circumstances, he awarded Ms Yap a final judgment sum of $559,737.80, of which $265,000 was compensation for her pre-trial loss of earning capacity calculated by reference to her last-drawn salary as a finance manager, and $80,000 was in respect of her post-trial loss of earning capacity. Only these two heads of damages are disputed by the parties on appeal.

These appeals give rise to two challenging issues. First, if a plaintiff’s claim in special damages for pre-trial loss of earnings is truly incapable of proof, can the court award general damages for pre-trial loss of earning capacity instead? We note that this would be a novel claim that has never been recognised by this court. Second, given the evidential difficulties arising from the fact that Ms Yap’s business had not matured or stabilised, how should the court compensate her for her lost earnings and/or earning capacity?

Background

The background facts are set out in full in the High Court’s judgment, Yap Boon Fong Yvonne v Wong Kok Mun Alvin and another [2018] SGHC 26 (“the Judgment”).¹ We set out only the facts that are relevant to the appeals before us.

The accident

On 12 July 2011, the first respondent in CA 33 and first appellant in CA 35, Mr Wong Kok Mun Alvin (“Mr Wong”), was riding a motorcycle with Ms Yap as a pillion passenger. Their motorcycle collided into a lorry driven by the second respondent in CA 33 and the second appellant in CA 35, Mr Lim Chuah Heng (“Mr Lim”). As a result, Ms Yap fractured her right elbow, right radius and ulna, right kneecap and right tibia: Judgment at [1]–[2].

Following the accident, Ms Yap was bedridden for a few months. Her upper limb injuries healed without complications but she continued to have problems with her tibia which required bone grafting. In August 2013, she underwent reconstructive surgery to achieve equalisation of her shortened tibia with the use of a metal frame around her leg, followed by several related surgical procedures which lasted until July 2014. The procedures succeeded in achieving equalisation of her leg lengths and correction of her right tibia’s external rotation, but her tibia was again fractured two weeks after the metal frame was removed. She had to use a wheelchair and crutches to get around, but her condition has since improved: Judgment at [2]–[3].

Ms Yap was given a total of 1,780 days (almost five years) of medical leave from the date of the accident to June 2016. She no longer requires a wheelchair for travelling short distances but occasionally uses a walking stick and experiences pain if she walks for a prolonged duration: Judgment at [3]–[4]. She was 34 years old at the time of the accident and is 41 years old now.²

Ms Yap’s occupation and earnings

At the time of the accident in 2011, Ms Yap was one of two equity partners alongside Mr Wong in a firm named Resources XP (“the Partnership”). Ms Yap had joined the firm in November 2008 when it was a sole proprietorship under Mr Wong’s name, and she later became a partner in February 2009. Until 2010, the firm was in the business of providing digital imaging services for Community Development Councils and SPRING Singapore. In early 2011, just months prior to the accident, the Partnership began operating under a different business model and started providing accounting and IT services instead: Judgment at [73] and [81].³

Mr Wong handled the operations and IT aspects of the businesses while Ms Yap was in charge of accounting, human resource management, sales and business development: Judgment at [73]. In order to meet clients, Ms Yap was required to travel frequently within Singapore and occasionally overseas.⁴

In June 2011, just a month prior to the accident, Ms Yap and Mr Wong incorporated a separate company known as Resources XP Pte Ltd (“the Company”). Each of them is a director and 50% shareholder of the Company. The Company carries on the same business as the Partnership; the only difference between the two entities is that the Company is goods and services tax (“GST”) registered and can bill clients with GST where required. Where appropriate, we will refer to the collective business as “the Start-up”. As the Company was still in the first month of its operations, Ms Yap and Mr Wong had agreed to draw a nominal salary each so as to foster the Company’s growth and meet staff payroll requirements: Judgment at [125]. Ms Yap’s monthly salary was thus only $850 at the time of the accident.⁵

Prior to joining the Partnership in November 2008, Ms Yap had been employed as a finance manager with J Walter Thompson (Singapore) Pte Ltd (“JWT”) where she received a fixed monthly salary of $6,300 inclusive of bonuses: Judgment at [74]. She is a certified public accountant.⁶

Procedural history

On 10 March 2014, Ms Yap commenced the present action against Mr Wong and Mr Lim. On 2 June 2014, interlocutory judgment in default of appearance was entered against Mr Wong, while interlocutory judgment in default of defence was obtained against Mr Lim, with damages to be assessed: Judgment at [5].

The Judge heard the trial on assessment of damages over five days in end-March and early April 2017. The parties agreed on the following items of damages (Judgment at [9]): $108,000 in general damages for Ms Yap’s pain and suffering; $18,941.85 in special damages for her medical expenses; and $2,000 in special damages for her transport when seeking medical treatment.

The following items were disputed by the parties in the proceedings below (Judgment at [10]): special damages for pre-trial loss of earnings; special damages for domestic helper expenses; general damages for future medical expenses and future transport for medical treatment; and general damages for loss of future earnings and/or loss of earning capacity.

Decision below

The Judge awarded $52,980 in damages in respect of Ms Yap’s future medical expenses and future transport for medical treatment, and $32,815.95 in respect of her domestic helper expenses: Judgment at [169]. The parties are not appealing against this aspect of the award.⁷ This leaves only two items to be considered on appeal: (a) Ms Yap’s pre-trial loss of earnings or earning capacity; and (b) her post-trial loss of future earnings or earning capacity, and we summarise here the Judge’s findings in these two respects.

First, the Judge found that Ms Yap had in fact suffered a pre-trial loss of earnings from July 2011 to March 2017 because the Start-up was less profitable than it could have been, had she been able to develop the business without the disruptions caused by the accident and her injuries: Judgment at [82], [86] and [92]. The question, then, was how the court should compensate Ms Yap for her share of the net profit that the Start-up would otherwise have made.

The parties proposed several methods by which Ms Yap’s pre-trial loss of earnings could be calculated. However, the Judge rejected all of them. Ms Yap’s primary submission was that she had suffered a loss of $578,244.32 on the basis of her forecasts of the Start-up’s net profits. The Judge held that these forecasts were admissible but found that they were built upon assertions of the Start-up’s financial performance that were not supported by the documentary evidence. In particular, the Judge noted that the financial records for 2010 were not in evidence: Judgment at [102(b)] and [117]. Ms Yap’s alternative submission was that her pre-trial loss of earnings was at least $265,061.54 on the basis of her fixed monthly salary at JWT, but the Judge was not satisfied that she would have in fact earned at least $6,300 per month given the instability and the unprofitability of the Start-up in its early days: Judgment at [118]–[128]. The defendants proposed taking the difference between the Start-up’s net loss in 2011 and the Partnership’s average pre-accident net profits in 2009 and 2010 (totalling $85,070.89), halving it to account for the fact that Mr Wong’s injuries would also have contributed to the loss, and further halving it to account for Ms Yap’s half-share in the profits, resulting in a final figure of $21,267.70. The Judge rejected this method as the Partnership had been engaged in a completely different business in 2009 and 2010 and also because the method failed to take into account business growth which is important for a start-up business: Judgment at [129]–[135].

In light of the difficulties in quantifying pre-trial loss of earnings in these exceptional circumstances, the Judge held that the better approach was to award Ms Yap damages for her pre-trial loss of earning capacity: Judgment at [136] and [146]. The Judge took reference from Ms Yap’s last-drawn monthly salary at JWT and found that, on the basis of the significant improvement in the Start-up’s performance over 2011 to 2017 despite the accident, she would have eventually started to draw $6,300 or more per month by 2017. The Judge...