Yenty Lily v ACES System Development Pte Ltd

• Judgment Date: 18 October 2012
• Date: 18 October 2012
• Docket Number: Suit No 679 of 2009 (Registrar's Appeal No 247 of 2011)
• Court: High Court (Singapore)

Yenty Lily (trading as Access International Services)

Plaintiff

and

ACES System Development Pte Ltd

Defendant

[2012] SGHC 208

Judith Prakash J

Suit No 679 of 2009 (Registrar's Appeal No 247 of 2011)

High Court

Damages—Assessment of damages—Damages arising from repudiatory breach of contract—Quantification of costs which would have been incurred had contract been performed

Damages—Assessment of damages—Tort—Wrongful detention of property belonging to another—Quantification of loss and damage to property during period of detention

Damages—Measure of damages—Tort—Wrongful detention of property belonging to another—User principle—Whether user damages recoverable where converter did not put property to actual use

The defendant was the main contractor in a construction project involving improvement works to the metal roofs of certain blocks of flats (‘the project’). On 10 July 2008, it entered into a contract (‘the subcontract’) with the plaintiff, requiring the plaintiff to provide mobile platforms for the project, and to erect and dismantle these platforms at various locations at the site. The subcontract price was $850,000, which was to be paid by way of progress payments. The platforms were to be made available to the defendant for a period of 16 months ending on 31 January 2010, and the defendant was to provide the plaintiff with financial assistance for their purchase. The plaintiff was to repay the defendant via monthly deductions from the progress payments due from the defendant.

The platforms were purchased and the plaintiff proceeded to carry out the subcontract works. However, in repudiation of the subcontract, the defendant failed to pay several progress payments. The plaintiff accepted the repudiation, terminated the subcontract on 3 July 2009 and commenced proceedings against the defendant in August 2009, claiming for unpaid progress payments totalling $188,404.30, loss of profits, the return of the platforms and damages for wrongful detention of the same.

Interlocutory judgment was entered for the plaintiff for damages to be assessed on the basis of the lump sum of $850,000 less (a)cash payments received by the plaintiff from the defendant totalling $281,800; (b)the cost of the six platforms totalling $227,600.70; and (c)costs that would have been incurred by the plaintiff to complete the remaining blocks of the project (‘costs of completing the project’). The trial judge also declared that the plaintiff was the legal and beneficial owner of the platforms and ordered that damages be assessed for the defendant's wrongful detention of the platforms as from 31 January 2010.

The assistant registrar (‘the AR’) heard the assessment and held as follows: first, the costs of completing the project was assessed as $52,124.11, on the basis that costs of $10,000 (rounded up from $9,056.40) would be incurred per month over a five-month period, and $2,124.11 would be incurred on a one-off basis. Second, the plaintiff was awarded €9,420.70 as damages to the platforms and $3,748 for maintenance, servicing and retrieval fees in relation to the platforms. Third, and significantly, the AR disallowed the plaintiff's claim for substantial damages for the defendant's wrongful detention of the platforms and only awarded nominal damages of $100.

The plaintiff appealed against all of the AR's holdings, and the chief legal issue before the High Court was whether damages for wrongful detention of property could be recovered under the user principle where the defendant had not put the property to use.

Held, allowing the appeal:

Costs of completing the project

(1) The plaintiff's notional costs should have been assessed over a two-month, instead of five-month, period. Based on the evidence, costs of $7,975.50 would have been incurred monthly, and costs of $480 would have been incurred on a one-off basis. The plaintiff's costs of completing the project was therefore $16,431.80 (being $7,975.90 x 2 + $480), instead of $52,124.11 as assessed by the AR: at [18], [19], [29] and [30].

Damage to the inventory

(2) The list of damaged and lost items should have been determined by comparing the original inventory sent to the defendant in July 2009 and another inventory prepared in October 2010. Based on this comparison, the plaintiff had sustained a loss of €15,050.52. The AR's award of €9,420.70 was accordingly set aside: at [35] and [36].

(3) The plaintiff was entitled to recover $695.50 as costs of obtaining a survey report in October 2010 because she needed to determine the damage to and number of items collected when the platforms were finally re-delivered to her: at [37].

(4) The AR's award of $3,748 for maintenance, servicing and retrieval fees in relation to the platforms was affirmed: at [38].

Damages for wrongful detention

(5) Damages were generally, and as far as possible, awarded to put the injured party in the same position he would have been in had he not suffered the wrong. As an exception to this general rule, ‘user damages’ were awarded where a defendant wrongfully detained and used another's property for his own purposes, even if the property owner had suffered no financial loss: at [43].

(6) The user principle protected property rights in themselves and therefore triggered compensation where the property owner's mere right to exclude others at his own discretion had been infringed: at [43].

(7) Whether the user principle applied to cases such as the present depended on the juridical basis of awards of user damages. While restitutionary analysis focused on the benefit obtained by the converter by virtue of his wrong and was unlikely to be engaged where the converter failed to put the detained property to use, compensatory analysis sought to reverse the causative effects of the converter's wrong by focusing on the property owner's loss. As ‘loss’ may be construed in non-financial terms, viz, the ‘abstraction or invasion of property’, the compensatory approach allowed recovery of user damages whether or not the convertor actually used the property: at [49], [50] and [51].

(8) The user principle could not be purely restitutionary in nature since it did not lie in the mouth of the converter to argue that he had failed to derive actual benefit or make a profit from his tort: at [66].

(9) The user principle was also not purely compensatory in nature. While English courts have generally stressed the compensatory nature of damages for wrongful detention, they have also recognised that user damages might contain some restitutionary element: at [57] and [62].

(10) Recognising that the user principle contained elements of restitution did not necessarily mean that a property owner could not recover user damages if the converter had not made discernable use of the property. The converter had, by detaining or misappropriating the property, gained the opportunity to use the property concerned whilst simultaneously depriving the owner of such opportunity. The converter's failure to exploit such opportunity was irrelevant: at [68] and [69].

(11) The actions of the defendant, who used the platforms until December 2009 and refused to return them to the plaintiff thereafter, could be likened to that of the dog who buried the bone it no longer wanted to chew. It did not release the platforms to the plaintiff until the court ordered it to do so, notwithstanding that it had no use itself for the platforms after December 2009, and despite knowing that the plaintiff would have continued to hire out or attempt to hire out the platforms at a profit after the project ended: at [70] and [71].

(12) The defendant thus knowingly deprived the plaintiff of the use of a profit-earning chattel, which the defendant knew had been acquired only for business purposes. Depriving the plaintiff of user damages would allow the defendant to avoid the consequences of its deliberate action, which was neither equitable to the plaintiff nor justified on principle: at [53], [68] and [72].

(13) The plaintiff was awarded $189,000 being the rental she could have earned from February to October 2010 while the platforms were wrongfully detained by the defendant. The fact that the plaintiff could not, or chose not to, obtain new platforms and rent them out so as to be able to show actual loss could not justify relieving the defendant of the liability to pay compensatory damages: at [73] and [77].

AG v Blake [2001] 1 AC 268 (refd)

Chartered Electronics Industries Pte Ltd v Comtech IT Pte Ltd [1998] 2 SLR (R) 1010; [1998] 3 SLR 502 (refd)

Gaba Formwork Contractors Pty Ltd v Turner Corp Ltd (1991) 32 NSWLR 175 (not folld)

Hillesden Securities Ltd v Ryjack Ltd [1983] 1 WLR 959 (refd)

Inverugie Investments Ltd v Hackett [1995] 1 WLR 713 (refd)

Jaggard v Sawyer [1995] 1 WLR 269 (refd)

Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883 (refd)

Livingstone v The Rawyards Coal Co (1880) 5 App Cas 25 (refd)

Siew Kong Engineering Works v Lian Yit Engineering Sdn Bhd [1993] 1 SLR (R) 736; [1993] 2 SLR 505 (refd)

Strand Electric and Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246 (refd)

Mediana, The [1900] AC 113 (refd)

Watson, Laidlaw & Co Ltd v Pott, Cassels, and Williamson (1914) 31 RPC 104 (refd)

WWF-World Wide Fund for Nature v World Wrestling Federation Entertainment Inc [2008] 1 WLR 445 (refd)

Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 (refd)

Civil Law Act (Cap 43, 1999 Rev Ed) s 12 (1)

Lee Mun Hooi and Lee Shi Hui (Lee Mun Hooi & Co) for the plaintiff

NSreenivasan and Valerie Ang (instructed) and Mimi Oh (Mimi Oh & Associates) for the defendant.

Judgment reserved.

Judith Prakash J

1 Ihave before me an appeal against the assessment of the damages incurred by the plaintiff in the action as a result of the defendant's breach of contract and tortious actions. The damages were assessed in August last year and the...