I Overview

The approach of the Singapore courts with regard to compensatory damages claimed in civil litigation has been based on the usual principles like causation, remoteness of damages, and mitigation. The claimant or plaintiff bears the burden of proving both the fact and amount of loss, and therefore must adduce sufficient evidence to quantify the damage.2 In terms of proving loss suffered by the plaintiff in claims for unliquidated damages, the Court of Appeal in Singapore has stated that an award of compensatory damages in contract law should be based ideally on the plaintiff's own loss rather than measuring it by reference to the defendant's gains or profits.3

Most notably perhaps, the Singapore courts have remained committed to the traditional principles of remoteness of damages espoused under Hadley v. Baxendale,4 declining to follow the new test set out by Lord Hoffman in The Achilleas,5 which is whether the defendant assumed responsibility for the loss that arose from the breach. Thus in MFM Restaurants Pte Ltd v. Fish & Co Restaurants Pte Ltd, the Court of Appeal expressly decided against adopting the 'assumption of responsibility' test, pointing out, inter alia, that the 'assumption of responsibility' approach (which is agreement-centred and based on whether the contract breaker had, on a true interpretation of the contract, assumed responsibility) appeared to exclude the operation of the very doctrine of remoteness of damage in contract law itself.6 The Court of Appeal was concerned with the practical uncertainties in applying this new test, given that parties at the time of entering the contract would usually not be thinking of assuming responsibility for the consequences of a future breach.7 The Court thus rejected Lord Hoffman's approach, except to the extent that the concept of assumption of responsibility is already incorporated in both limbs of Hadley v. Baxendale.8 The position under Singapore law was reaffirmed in Out of the Box,9 where the Court of Appeal reiterated its preference for the orthodox approach under Hadley. The Court also stressed that, conceptually, 'it is important that cases that in fact concern the interpretation of a contract in order to identify the specific nature of the obligation that has been undertaken not be conflated, or for that matter confused, with cases that truly are concerned with questions of remoteness.'10

While this is a section on compensatory damages, it should be noted that the Singapore courts have expressed caution on the award of restitutionary damages recognised by the UK courts under AG v. Blake,11 or at least the characterisation of AG v. Blake damages as restitutionary in nature. AG v. Blake was an exceptional case, where the defendant breached his contractual undertaking not to divulge official information gained as a member of the UK intelligence service by entering into a publishing deal for his autobiography, and where the Attorney General sought a full account of his wrongfully gained profits. AG v. Blake therefore allowed the award of damages based on the defendant's gains or profits, rather than the plaintiff's losses. The Court of Appeal in Singapore held that the main difficulty with recognising AG v. Blake damages as a part of Singapore law is the uncertainty of the legal criteria to be applied in awarding such damages.12 Nonetheless, the Court left open the possibility that AG v. Blake damages could be recognised, although the precise status and scope of this category of damages under Singapore law is likely to remain unresolved until it is determined by the Court in the future.13

In addition, while the Court of Appeal recently accepted Wrotham Park damages as a part of the contractual remedies available under Singapore law, its approach differs from the UK position in some important respects that will be briefly discussed below.14

II Quantification of financial loss

i Introduction

The quantification of financial loss usually underpins any compensatory claim for damages – while such quantification may involve technical evidence assisted by the relevant experts, it is usually on the basis that damages should compensate the plaintiff for the defendant's wrongdoing. In tort, the purpose of damages is to put the claimant back into the position in which he would have been, if the tort had not been committed.15 In a contractual claim, damages seek to put the plaintiff in the position he or she would have been in had the contract been performed; this is often seen as compensation for the plaintiff's expectation loss – such expectation loss would encompass the plaintiff's total (or gross) loss – including the expected (or net) profit that the plaintiff would have received had there been no breach of contract as well as his or her expected expenses, which he or she would have recouped if the contract had been performed.16 Both approaches in tort and contract are compensatory, and seek to compensate the claimant for his or her loss. Hence, quantification of financial loss in contractual claims would often be premised on a valuation of the position which the plaintiff would be in had the contract been performed, complete with the expected costs or expenses incurred in performing the contract. Quantification of financial loss for tort would involve an exercise of what would have happened if the tort had not been committed – so a conspiracy to divert business away from a claimant would involve assessing the revenue or profits which had been lost, complete with the expected costs or expenses in serving the customers had they not been diverted away by the conspirators.

An award of substantial damages where loss is asserted will only be justified where the court is satisfied as to both the fact of damage (i.e., the adverse consequence) and the amount.17 If the plaintiff satisfies the court on neither, he will at the most be awarded nominal damages where a right has been infringed or where liability is established.18

ii Evidence

It is well established that a plaintiff claiming damages must adduce before the court sufficient evidence of his or her loss. This approach has been affirmed by the Court of Appeal, which has held that proof of damage is very much a primary matter – topics such as remoteness and mitigation are potentially relevant only after there is proof of damage to begin with.19 Such proof depends wholly on the factual matrix concerned, which can take a myriad of forms.20

That being said, where it is clear that some substantial loss has been suffered, the fact that an assessment is difficult because of the nature of the damage is no reason for awarding no damages or merely nominal damages.21 In this respect, '[w]here precise evidence is obtainable, the court naturally expects to have it, [but] where it is not, the court must do the best it can.'22 The Court must do the best it can on the evidence available and adopt a flexible approach where it is clear that some substantial loss has been incurred.23

In doing its 'best', the courts will adopt a flexible approach,24 so as to balance the plaintiff's burden of adducing sufficient evidence of his loss on the one hand, and the fact that absolute certainty and precision is impossible to achieve in some cases on the other.25 In this regard, the Court of Appeal acknowledged the reality that 'some educated guesses have to be made – regardless of the precise methodology ultimately adopted by the court', and that 'life is far more complex than simple law school hypotheticals and even textbooks would have us believe.'26

Thus, where the plaintiff has done its level best to prove its loss and the evidence is cogent, the court should allow it to recover the damages claimed.27 Even where 'the available evidence on which to base an award of damages' is 'far from satisfactory', the courts are still able to award 'just and fair sums to plaintiffs if the legal rules and principles justified them.'28

The flexible approach does not mean that a plaintiff could simply claim that evidence was not available or irrelevant without more. Where the plaintiff has failed to attempt its level best to prove its loss and adduce cogent evidence, this failure to meet the evidentiary threshold necessary to quantify its loss will result in the award of nominal damages only.29

iii Date of assessment

As a general rule, damages for breach of contract or tort are assessed as at the date of breach.30

In The Golden Victory,31 the UK Supreme Court held that this general rule is not inflexible, and that the courts are not precluded from taking into account events that occur subsequent to a breach of contract, if doing so would give effect to the overriding compensatory principle that the damages awarded should represent no more than the value of the contractual benefits of which the plaintiff had been deprived.

The High Court of Singapore has also recognised that the general rule that damages are to be assessed as at the date of the breach is not an absolute one. Thus the Court held that where it is necessary in order to compensate the plaintiff adequately for the damage suffered, or if it would otherwise lead to injustice, a different date of assessment can be selected.32

In Swiss Singapore Overseas Enterprises Pte Ltd v. Exim Rajathi India Pvt Ltd,33 the High Court distinguished The Golden Victory based on its facts – the overriding compensatory principle was that damages awarded should represent no more than the value of the contractual benefits which the claimant had been deprived and therefore where at the date of assessment an event had already happened that would have terminated the contract had it been still in place, the court should have regard to what actually occurred.34 In Swiss Singapore there was a one-off sale and delivery contract, as opposed to the longer-term contract in The Golden Victory that provided for obligations to be performed over a period of time.35

However, any notion that there is a material distinction between one-off contracts and contracts for performance over a prolonged period of time for the purposes of the date of assessing damages was rejected by the UK Supreme Court in Bunge SA v. Nidera BV.36 In Bunge v. Nidera, there was a one-off contract for the sale and purchase of Russian milling wheat. Following Russia's introduction of an embargo on the export of wheat, the sellers notified the buyers of the embargo and purported to cancel the contract. The buyers treated this cancellation as premature, and thus a repudiation, which they accepted. On the assessment of damages, the sellers argued that, even if the termination was premature, the fact that shipment under the contract would have been subject to the ban when the time for shipment came meant that no loss had been suffered. The UK Supreme Court stated that the compensatory principle in The Golden Victory is not limited to instalment contracts, and awarded the buyers nominal damages. Lord Sumption held that '(t)here is no principled reason why, in order to determine the value of the contractual performance that has been lost by the repudiation, one should not consider what would have happened if the repudiation had not occurred', since this is 'fundamental to any assessment of damages designed to compensate the injured party for the consequences of the breach'.37

While certainty as engendered by the breach date rule for assessment of damages may be valuable, the Courts have shown that they are willing to take into account supervening events which have occurred post-breach to ensure that the claimant is truly compensated for his loss). Although Swiss Singapore dealt with a one-off contract, the decision on which date to assess damages did not turn on whether the contract was a one-off contract or instalment contract. Thus the Singapore courts will, in accordance with the compensatory principle, exercise the flexibility of taking into account supervening events that have taken place by the date of assessment in order to ensure that the claimant is truly compensated for the loss he has suffered (if any).

iv Financial projections

Financial projections are sometimes necessary where a quantification of financial loss involves assessing loss of a prospective nature. For example, this may be achieved through a loss of profits analysis, whereby the plaintiff is awarded the difference between its actual profits and the profits it would have obtained 'but for' the defendant's breach. Alternatively, a business valuation analysis may be available, whereby loss is quantified as the diminution in value of a business, income stream or other specified asset as a result of the defendant's breach of contract.

The courts are cognisant of the fact that such financial projections, which involve projections into the future, are inevitably speculative to some degree.38 As such, regardless of what calculation or valuation method is used for the financial projections, so long as the application of the method rests on certain assumptions, the court will look to scrutinise the reasonableness of these assumptions. In any event, the use of any projection or valuation method would be deemed inappropriate if it is significantly at variance with the evidence of what actually happened.39

v Assumptions

It is common knowledge that each financial or valuation model for the purposes of loss assessment is highly dependent on its underlying assumptions. For instance, the discounted cash flow (DCF) model, which is widely used in both loss of profits and business valuation analyses, is nothing more than a calculation machine – the value that emerges from the model is completely dependent on the values it has been fed with.40 The integrity of the financial model is thus dependent on the assumptions underpinning the specific method.

As such, where financial projections rest on certain assumptions, the court will consider both qualitatively whether the assumption is reasonable in light of the evidence and also quantitatively the likelihood of the assumed event actually materialising.41 For instance, if one were to make a projection based on the DCF model, that likelihood of the assumption materialising – to the extent that it is found to be less than a certainty – represents a risk to the business that must be accounted for in the analysis.42 As such, parties looking to rely on the various models for financial projections or valuations ought to be aware that such projections are not just a matter of arithmetical calculation – obtaining reliable information and making credible assumptions for the financial model are just as important in producing an accurate valuation or assessment.

vi Discount rates

It is generally accepted that a discount has to be given for accelerated receipt of any sums that had not fallen due at the date of the breach (i.e., future loss of profits), so as to properly account for the potential interest accrued by the plaintiff until the final date on which money would have been due. An award of compensation that failed to take this into account would overcompensate the plaintiff.43 This is largely standard practice – the High Court has recognised that 'this was the discount to be given to the [defendant] because the damages were being crystallised at one go and [the plaintiff] would be paid the damages immediately instead of having the payment stretched over a number of years'.44

In addition, many financial projections, especially those involving cash-flow models, do factor in discount rates that are applied to the projected cash flows. For instance, under the DCF model, a discount rate is applied to transform the future cash flows into their net present value. This discount rate should reflect the risk inherent in the forecast future cash flows, and can, for example, be the company's or business' weighted average cost of capital (WACC),45 which is a measure of a company's return to those who finance its business by both debt and equity.46

Where the court finds that the discount rate used in a particular financial projection fails to reflect certain risks to the business, it will not shy away from making an appropriate adjustment to account for those risks.47 Thus, in Poh Fu Tek, the High Court increased the discount rate to reflect the risk of the company losing the right to continue its operations at its two key properties, and the risk that a major customer may not place any orders with the company in the future.48

vii Currency conversion

The law on currency conversion for damages is governed by the Miliangos principle, which establishes that an English court could give judgment for a sum of money expressed in foreign currency and, if it was necessary to execute on the judgment, the judgment in foreign currency would be converted to local currency on the date when the plaintiff was given leave to levy execution.49

This principle has been applied in Singapore, and the High Court has confirmed that there is no right of election – of asking for judgment in local currency or for conversion of the judgment sum from foreign currency to local on a date other than the date of execution – open to the plaintiff.50 The Court reasoned that the rationale for the Miliangos doctrine was that it was right to allow judgment to be entered in a foreign currency either because it was the relevant currency of the transaction or because it was the currency in which the plaintiff had most truly suffered his loss. In addition, the House of Lords in Miliangos was not giving the plaintiff an option to select his currency but was instead redefining the obligation of the debtor to pay the sum owed in the relevant currency, and had found that using the date on which the court authorised execution as the date for conversion of the foreign currency into the local currency was nearest to securing to the plaintiff exactly what he bargained for.51 This underlying rationale would thus be instructive as to when a Singapore court could give judgment for a sum of money expressed in foreign currency.

viii Interest on damages

The power of the Singapore courts to award interest on damages is derived from Paragraph 6 of the First Schedule of the Supreme Court of Judicature Act. Section 12 of the Civil Law Act allows the court to order that interest be awarded on the judgment sum at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment.

A plain reading of Section 12 suggests that interest is not awarded as of right – it is a matter of the court's discretion.52 However, as a matter of principle, plaintiffs who have been kept out of pocket without basis should be able to recover interest on money that is found to have been owed to them from the date of their entitlement until the date it is paid. Thus the purpose of the judicial discretion is to enable the courts to achieve justice according to the unique circumstances of each case. Such discretion would extend to a determination of whether to award interest at all; what the relevant rate of interest should be; what proportion of the sum should bear interest; and the period for which interest should be awarded.53

The general rule is that interest should commence from the date of accrual of loss; however, this is subject to the court's discretion to order that interest run from a date later than the date of accrual of loss. The court can therefore delay the start date for calculating interest where there has been an unjustifiable delay on the part of the plaintiff in bringing his action to trial.54 Thus in Robertson Quay, the Court of Appeal ordered that interest on damages awarded should run only from the date of service of the statement of claim. The Court departed from the general rule because of the plaintiff's unwarranted delay (of five years after its loss accrued) in commencing the suit.55

With respect to the nature of the interest awarded, Section 12 of the Civil Law Act specifically enables the courts to award simple pre-judgment interests on debts and damages – the provision does not authorise the award of compound interest. However, the High Court has found that this did not necessarily prohibit the Court from granting compound interest per se or from granting damages assessed with reference to the actual compound interest lost or foregone by the plaintiff who had suffered those damages.56 Thus the Court held that the Singapore courts have an 'unfettered discretion to award simple or compound interest as damages'. This approach 'accords with commercial and economic reality' and would better reflect a plaintiff's loss because if it were otherwise, a plaintiff in a long-running case risks being severely under-compensated in damages, especially where the interest rate was ascertained to be very high.57

The key distinction here is between 'interest as damages' and 'interest upon the damages'. Section 12(2)(a) of the Civil Law Act states that nothing in the section 'shall authorise the giving of interest upon interest', but the Court has held that this section will not apply to an award of interest as damages, which comprises of the loss to the plaintiff assessed with reference for instance to the compound interest that the money could possibly have earned. This separate head of damage represented by the compound interest is therefore not within the scope of Section 12.58

ix Tax

Any quantification of financial loss (and subsequent calculation of the quantum of damages) must take into account the relevant tax implications so as to restore the plaintiff to the position it would have been in had the relevant breach or tortious conduct not occurred.

The relationship between taxation and damages awarded for the loss of future earnings was established in British Transport Commission v. Gourley.59 It was held that the award of damages should reflect the deductions that would have been made for tax and national insurance in arriving at the settlement figure, because 'to ignore the tax element at the present day would be to act in a manner which is out of touch with reality'.60

The Court of Appeal has since affirmed the Gourley principle,61 and it is clear that where damages are awarded for taxable losses (i.e., loss of future income, loss of profits), an income tax or corporate profits tax deduction ought to be made. However, where the damages are meant to compensate for a non-taxable loss (i.e., loss of a capital asset, loss of capital gains), it would be inappropriate to make a deduction for tax as the plaintiff would not have incurred any tax liability thereon.62

III Expert evidence

i Introduction

The role of expert evidence in legal proceedings is set out in Section 47(1) of the Evidence Act, which establishes that 'when the court is likely to derive assistance from an opinion upon a point of scientific, technical or other specialised knowledge, the opinions of experts upon that point are relevant facts'.

ii The role of expert evidence in calculation of damages

There is no difference in the principles governing experts in different fields. They all relate to impartiality, and this is reflected in the relevant requirements for expert witnesses outlined in Order 40A of the Rules of Court.

Typically, expert evidence on assessment of damages involves (but is not limited to) issues such as making of assumptions, projection of cash flows and valuation of hypothetical scenarios. Thus, expert evidence usually plays an important role in helping the court understand how each party had derived the figures they have relied upon in their respective cases. The Singapore High Court has stated, in the context of valuation evidence on the valuation of shares, that 'the court must not defer too readily to expert evidence…. [T]he Court must assess for itself the reasonableness of an expert's opinion against the criteria of fact and logic. This will sometimes require the court to go deeper into the technical basis upon which the expert valuation has been performed and to consider whether that basis for valuation has been applied using assumptions which are reasonable and justified by the facts'.63

The courts have recognised that an accountant expert may be engaged to fulfil one of at least three roles in connection to litigation. These include: acting as an independent expert and providing an opinion on liability, quantum or both; acting as a consultant assisting in the preparation of the case of one of the litigants; and acting in a supporting administrative role in managing the documentary information required for the litigation. It is only in the first role that the forensic accountant is acting as a forensic expert.64 When the accountant acts as a consultant, his or her role is inconsistent with the expert's duty to be independent – therefore the accountant should not accept a role that requires him or her to be a consultant as well as an independent expert.

iii The court's role excluding and managing expert evidence

The court's role in excluding and managing expert evidence is illustrated by Order 25 Rule 3 of the Rules of the Court. In particular, the court will determine, inter alia, whether an order should be made limiting the number of expert witnesses;65 whether any direction should be made for a discussion between the experts prior to the exchange of their affidavits exhibiting their reports for the purpose of requiring them to identify the issues in the proceedings and where possible, reach agreement on an issue, and if such a direction should be made, whether: (1) to specify the issues which the experts are to discuss; and (2) to direct the experts to prepare a joint statement indicating the agreed issues, the issues not agreed and a summary of the reasons for any non-agreement;66 and whether directions should be given pursuant to Order 40A.67

Where it is apparent that the experts' further assistance is necessary, the courts have seen fit to conduct a hot-tubbing exercise where each expert gives his or her reasons to support his or her conclusions and challenge the opposing expert's conclusions, with the opposing expert having the opportunity to respond immediately. This could be done with the court and counsel asking questions on the reasons and counsel providing facts to support or challenge the reasons given.68

Also, in cases where valuation evidence on shares as well as assessment of damages is undertaken, the court has suggested that parties should consider whether the same person should be appointed as the valuer of shares and assessor of damages, to avoid any concern that there may be some discrepancy in the approaches.69

iv Independence of experts

The duties of an expert are well summarised in Ikarian Reefer,70 but probably the most important duty is that of independence. The independence of expert witnesses is governed by Order 40A Rule 2(1), which establishes 'the duty of an expert to assist the Court on the matters within his expertise'. This duty overrides any obligation to the person from whom he or she has received instructions or by whom he or she is paid.71

There is no overriding objection to a properly qualified person giving expert evidence just because he or she is employed by one of the parties.72 The fact of the expert witness' employment may affect the weight of the evidence but that is a separate matter from the question of the expert's independence.73

That being said, when an accountant expert acts as a consultant and assists in the preparation of a party's case, he or she is assisting in the advocacy of the client's case, which is a role that is inconsistent with the expert's need for independence. As such, careful consideration should be accorded to the evidence of an expert accountant who has been engaged as an investigator and collator of facts, and later reprises in court the role of an advocate in support of evidence that he or she has gathered. The courts are cognisant that such evidence may, at times, be coloured by the difficult and sometimes conflicting roles being discharged by the expert accountant.74

In addition, the evidence of an expert 'should not only be independent but should also be seen to be independent'.75 This means that while the courts will permit a strong defence of an expert's independent views and position, the expert should not stray into engaging in partisan advocacy to advance his or her client's cause.76 If he or she appears to do so, his or her independence will be called into question and he or she will inexorably lose credibility.77 The expert's advocacy is thus limited to supporting his or her independent views and not the client's cause – this must be brought to the expert's attention by the instructing solicitor.78

In addition, in the interests of ensuring that the independence of the expert is preserved, if an expert 'either has or has previously had a significant relationship with any interested party, particulars of this too ought to be disclosed without any prompting. A failure to make proper disclosure in a timely manner may raise serious concerns about apparent or actual bias on the part of the expert'.79

Order 40A Rule 3(2)(h) further sets out the requirement for an expert's report to 'contain a statement that the expert understands that in giving his report, his duty is to the Court and that he complies with that duty'. This emphasises that it is to the court that the expert's overriding duty is owed irrespective of who instructed or called the expert.80

v Challenging experts' credentials

Per Section 47(2) of the Evidence Act, '[a]n expert is a person with such scientific, technical or other specialised knowledge based on training, study or experience'. There is no need for the expert to be qualified professionally – as long as the court is satisfied that the witness has sufficient knowledge or expertise to qualify as an expert, he or she could be regarded as such.81 Thus an expert's credentials may be established by his or her experience concerning the matters in question,82 so long as the experience relates specifically to those matters.83 Nonetheless, it remains open for any party to challenge an expert's credentials on the basis of his or her lack of professional qualifications or experience, since such matters still affect the weight accorded to the expert evidence.84

The expert witness is also required to give details of his or her qualifications in the expert report.85 At the very minimum, a curriculum vitae detailing the expert's relevant experience should be provided, with special regard to the issue on which the expert's opinion is sought. The expert's report should state the precise manner, and not merely the general area of inquiry, in which the witness would be of use to the court.86 A party may thus use this information as a basis upon which to challenge the expert's credentials.

vi Oral and written submissions

Unless the court otherwise directs, expert evidence must be given in a written report signed by the expert and exhibited in an affidavit sworn to or affirmed by him or her testifying that the report exhibited is his or hers and that he or she accepts full responsibility for the report.87 Such a report must, inter alia, give details of the expert's qualifications;88 give details of any literature or other material that the expert has relied on in making the report;89 contain a statement setting out the issues that he or she has been asked to consider and the basis upon which the evidence was given;90 where there is a range of opinion on the matters dealt with in the report, summarise the range of opinion, and give reasons for his or her opinion;91 and contain a summary of the conclusions reached.92

So, for instance, where damages are to be assessed by reference to a business valuation prepared by an expert witness, the expert should consider the full range of the common methods used in such a valuation (i.e., asset, market and income). Any omission to prepare a valuation on one or more of these methods should be explained in his or her report; likewise, the ultimate choice of valuation should be justified, and where divergent valuations are attained, these should be discussed and explained.

Non-compliance with these requirements does not automatically render the evidence inadmissible.93 However, it may result in the expert's opinion being accorded little or no evidentiary weight as well as in adverse cost consequences for the party who engaged that expert.94

IV Recent case law

In a landmark decision, the Court of Appeal has affirmed in Turf Club Auto Emporium v. Yeo Boong Hua95 the availability of Wrotham Park damages under Singapore law. Prior to Turf Club, references have been made to Wrotham Park damages by the Singapore courts,96 although such damages have never been awarded. Wrotham Park damages are measured (objectively) by such a sum of money as might reasonably have been demanded by the plaintiff from the defendant as a quid pro quo for relaxing the covenant between them.97 This is akin to a 'licence fee' that the plaintiff could reasonably have extracted in return for his or her consent to the defendant's actions that would otherwise constitute a breach of contract.

In rejecting the restitutionary analysis of Wrotham Park damages in favour of the conceptualisation of such damages as compensation for the value of the contractual right that has been breached, the underlying principles of Turf Club converge with the recent UK Supreme Court decision in One Step,98 which sets out the legal position on Wrotham Park damages in the United Kingdom.

The Court of Appeal established that the legal requirements for the award of Wrotham Park damages under Singapore law are as follows: first, the court must be satisfied that orthodox compensatory damages (measured by reference to the plaintiff's expectation or reliance loss) and specific relief are unavailable; second, it must, as a general rule, be established that there has been (in substance, and not merely in form) a breach of a negative covenant; third, and finally, the case must not be one where it would be irrational or totally unrealistic to expect the parties to bargain for the release of the relevant covenant, even on a hypothetical basis.99

This, however, represents a divergence from the UK position regarding the legal requirements of Wrotham Park damages. In particular, the Court of Appeal declined to follow the UK Supreme Court in limiting the award of such damages to cases where the contractual right breached is considered to be an economically valuable 'asset' (i.e., where the breach results in the loss of a valuable asset created or protected by the right that was infringed, such as in cases involving a restrictive covenant over land, intellectual property or confidential information).100 As such, for the purposes of the award of Wrotham Park damages under Singapore law, the relevant legal test to be used is the one set out by the Court of Appeal in Turf Club, rather than the test adopted by the UK Supreme Court in One Step.101

V Civil justice reforms

In October 2018, the Ministry of Law in Singapore sought public consultation on civil justice reforms, following the recommendations of the Civil Justice Review Committee (CJRC) and Civil Justice Commission (CJC). By way of context, the CJC was constituted by the Honourable Chief Justice Sundaresh Menon on 5 January 2015 with the mandate to, inter alia, 'transform, not merely reform, the litigation process by modernizing it, enhancing efficiency and speed of adjudication and maintaining costs at reasonable levels'.102 Subsequently, the Ministry of Law announced the establishment of the CJRC on 18 May 2016 to recommend reforms to Singapore's civil justice system. The recommendations made by the CJC and CJRC are wide and far-reaching, ranging from instituting a more judge-driven process in the case management system to an arbitration-style discovery regime to introducing scale costs in litigation. Among the recommendations is one that adopts a default position where a single court expert will be appointed in cases where expert evidence is necessary. The court expert will be granted access to all evidence to assist in the formulation of his or her expert opinion and, generally, no party expert witnesses will be permitted.103

The rationale driving the recommendation was that the current system of party appointed experts has its difficulties, namely (1) the expert witnesses often have irreconcilable differences in opinion – their evidence may then unnecessarily complicate the issues before the court, thus becoming counterproductive rather than helpful to the adjudicative process; (2) party-appointed experts are presented with the facts of the case framed according to a particular perspective by the party engaging them, which may influence their interpretation of the evidence; and (3) the disproportionately high costs usually incurred in the preparation and presentation of expert testimony.104

There is merit in the recommendation as there is much value in having an impartial expert whose paramount duty is to the court, and who has access to all available evidence from both sides to formulate his or her views. It is not uncommon to see party-appointed experts present to the court starkly different opinions, leaving the court with the unenviable task of assessing which of the opinions (if any) to adopt. Under the recommendation, however, the court retains the discretion to allow parties to have their own party-appointed experts in appropriate cases.


Footnotes

1 William Ong is a partner at Allen & Gledhill. The author would like to thank Dion Loy, trainee at Allen & Gledhill LLP, for his assistance in the production of this chapter.

2 Robertson Quay Investment Pte Ltd v. Steen Consultants Pte Ltd and another [2008] 2 SLR(R) 623; [2008] SGCA 8 at [27].

3 MFM Restaurants Pte Ltd and another v. Fish & Co Restaurants Pte Ltd and another appeal [2011] 1 SLR 150 at [66].

4 (1854) 9 Exch 341; (1854) 156 ER 145.

5 [2009] 1 AC 61; [2008] UKHL 48.

6 MFM Restaurants (No. 3) at [92]–[95].

7 ibid at [92]–[100].

8 ibid at [140].

9 Out of the Box Pte Ltd v. Wanin Industries Pte Ltd [2013] 2 SLR 363; [2013] SGCA 15.

10 ibid at [29].

11 Attorney-General v. Blake (Jonathan Cape Ltd Third Party) [2001] AC 268.

12 Turf Club Auto Emporium Pte Ltd and others v. Yeo Boong Hua and others and another appeal [2018] SGCA 44 at [252]–[254].

13 ibid at [255].

14 See the 'Recent Case Law' section for a more thorough discussion.

15 Swiss Butchery Pte Ltd v. Huber Ernst and others and another suit [2013] 4 SLR 381 at [14].

16 Turf Club (No. 12) at [125].

17 Biofuel Industries Pte Ltd v. V8 Environmental Pte Ltd and another appeal [2018] 2 SLR 199; [2018] SGCA 28 at [41].

18 Justice James Edelman, McGregor on Damages (20th edn, Sweet & Maxwell 2018) at para. 10-001.

19 Robertson Quay (No. 2) at [27].

20 ibid.

21 McGregor on Damages (No. 18) at para. 10-002.

22 Biggin & Co Ld v. Permanite, Ltd [1951] 1 KB 422 at 438.

23 Robertson Quay (No. 2) at [30].

24 ibid.

25 Ramesh s/o Krishnan v. AXA Life Insurance Singapore Pte Ltd [2017] SGHC 197 at [65].

26 MFM Restaurants (No. 3) at [62].

27 Robertson Quay (No. 2) at [31].

28 MFM Restaurants (No. 3) at [62] and [65].

29 Biofuel Industries (No. 17) at [42]–[45].

30 Tay Joo Sing v. Ku Yu Sang [1994] 1 SLR(R) 765 at [36]–[37].

31 Golden Strait Corpn v. Nippon Yusen Kubishika Kaisha [2007] 2 AC 353 (HL).

32 Justlogin Pte Ltd and another v. Oversea-Chinese Banking Corp Ltd and another [2007] 1 SLR(R) 425; [2006] SGHC 209 at [66].

33 [2010] 1 SLR 573; [2009] SGHC 231.

34 ibid at [77].

35 ibid at [78].

36 [2015] UKSC 43.

37 ibid at [23].

38 Poh Fu Tek and others v. Lee Shung Guan and others [2018] 4 SLR 425; [2017] SGHC 212 at [41].

39 Columbia Asia Healthcare Sdn Bhd v. Hong Hin Kit Edward and another and another appeal [2015] 2 SLR 395 at [38]. (NB. This was in the context of a share valuation dispute.)

40 D Frykman and J Tolleryd, Corporate Valuation – an easy guide to measuring value, p. 88.

41 Poh Fu Tek (No. 38) at [42]; see also the Australian case of Pownall v. Conlan Management Pty Ltd (1995) 16 ACSR 227, where evidence pertaining to financial projection and valuation of shares was deemed inadmissible because the assumptions underlying the DCF valuation were not proved.

42 ibid.

43 Christopher Moran Holdings Ltd. v. Bairstow and another [2000] 2 AC 172 at 184E. Though this is in the context of a disclaimer of a lease by a liquidator, the court held that assessing compensation payable pursuant to a statutory right of compensation arising from the disclaimer is 'precisely the same exercise as has to be undertaken when assessing the damages for a breach of contract': see 180D.

44 Swiss Butchery (No. 15) at [22].

45 D Frykman and J Tolleryd (No. 40) pp. 72–78; see also Christopher Glover, The Valuation of Unquoted Companies (4th Edn, Thomson Gee 2004), pp. 240–244.

46 Poh Fu Tek (No. 38) at [110].

47 ibid.

48 ibid at [124]–[130].

49 Miliangos v. George Frank Ltd [1976] 1 AC 443.

50 Indo Commercial Society (Pte) Ltd v. Ebrahim and another [1992] 2 SLR(R) 667; [1992] SGHC 230.

51 ibid at [35].

52 Grains and Industrial Products Trading Pte Ltd v. Bank of India and another [2016] 3 SLR 1308; [2016] SGCA 32 at [138].

53 ibid.

54 ibid at [139].

55 Robertson Quay (No. 2) at [104]–[108].

56 The Oriental Insurance Co Ltd v. Reliance National Asia Re Pte Ltd [2009] 2 SLR(R) 385 at [127]–[128].

57 ibid at [137]–[138].

58 ibid at [129].

59 [1956] AC 185 (HL).

60 ibid 203.

61 Teo Sing Keng and another v. Sim Ban Kiat [1994] 1 SLR(R) 340.

62 ibid 645.

63 Poh Fu Tek (No. 38) at [27].

64 Vita Health Laboratories Pte Ltd and others v. Pang Seng Meng [2004] 4 SLR(R) 162; [2004] SGHC 158

at [84].

65 Order 25 Rule 3(1)(d) and Order 40A Rule 1.

66 Order 25 Rule 3(1)(f).

67 Order 25 Rule 3(1)(h).

68 Swiss Butchery (No. 15) at [114].

69 ibid at [112].

70 [1993] 2 Lloyds rep 68.

71 Order 40A Rule 2(2).

72 Field v. Leeds C.C. (2000) 32 H.L.R. 618, at 624.

73 ibid.

74 Vita Health (No. 64) at [84]–[85].

75 Ku Jia Shiuen (an infant suing through her mother and next friend, Tay Pei Hoon) & Anor v. Government of Malaysia & Ors [2013] 4 MLJ 108 at [37].

76 Resource Piling Pte. Ltd. v. Geospecs Pte Ltd. [2014] 1 S.L.R. 485 at [103] citing Pacific Recreation Pte Ltd v. SY Technology Inc [2008] 2 SLR (R) at [69]–[73].

77 Pacific Recreation Pte. Ltd. v. SY Technology Inc. and another appeal [2008] 2 SLR(R) 491; [2008] SGCA 1 at [70].

78 ibid at [72].

79 HSBC Institutional Trust Services (Singapore) Ltd. v. Toshin Development Singapore Pte. Ltd. [2012] 4 SLR. 738 at [71].

80 Judicial Commissioner Foo Chee Hock, Singapore Civil Procedure Volume 2018 Volume 1 (Sweet & Maxwell 2018) at 40A/2/1.

81 ibid at 40A/1/2.

82 Leong Wing Kong v. Public Prosecutor [1994] 1 SLR(R) 681 at [15].

83 Singapore Civil Procedure 2018 (No. 80) at 40A/1/2.

84 Kong Nan Siew v. Lim Siew Hong [1971] 1 M.L.J. 262.

85 Order 40A Rule 3(2)(a).

86 Pacific Recreation (No. 77) at [67].

87 Order 40A Rule 3(1).

88 Order 40A Rule 3(2)(a).

89 Order 40A Rule 3(2)(b).

90 Order 40A Rule 3(2)(c).

91 Order 40A Rule 3(2)(e).

92 Order 40A Rule 3(2)(f).

93 Alwie Handoyo v. Tjong Very Sumito & Anor. and another appeal [2013] 4 S.L.R. 308 at [173].

94 Pacific Recreation (No. 77) at [89].

95 Turf Club (No. 12).

96 See PH Hydraulics & Engineering Pte Ltd v. Airtrust (Hong Kong) Ltd and another appeal [2017] 2 SLR 129 at [80]; see also MFM Restaurants (No. 3) at [55].

97 Wrotham Park Estate Co Ltd v. Parkside Homes Ltd and Others [1974] 1 WLR 798 at 815.

98 One Step (Support) Ltd v. Morris-Garner and another [2018] 2 WLR 1353.

99 Turf Club (No. 12) at [217].

100 One Step (No. 98) at [92]–[94].

101 Turf Club (No. 12) at [283].

102 Civil Justice Commission Report, 29 December 2017, foreword by the Honourable Judge of Appeal Tay Yong Kwang at [1].

103 Report of the Civil Justice Review Committee at [94].

104 Ibid at [95].