CRESCENDAS BIONICS PTE LTD v JURONG PRIMEWIDE PTE LTD

Facts

Crescendas Bionics Pte Ltd, a property developer, engaged Jurong Primewide Pte Ltd (JP) as management contractor under a letter of intent to build Biopolis 3, a seven-storey multi-tenanted business park in One-North meant to serve biomedical research tenants. JP was to finish within 18 months, by 22 January 2010, but the building was only treated as complete on 22 December 2010. Crescendas sued in HC/S 477/2015. Of 334 days of combined delay, 173 days were caused by Crescendas' acts of prevention and 161 days by JP, so time was set at large and JP was liable only in general damages.

At the damages tranche, the trial judge measured Crescendas' lost net rental revenue using a Single-Year Model confined to 2010, awarded $1,789,398.82 under that head, and held that losses after completion were too remote. He also cut the award for holding costs (land rent and property tax) to $775,310.63 by excluding a 90-day rent-free fitting-out period. Crescendas appealed in AD/CA 87/2021, JP cross-appealed in AD/CA 88/2021, and Crescendas separately appealed on pre-judgment interest and costs in AD/CA 128/2021.

Issues

1. Whether Crescendas was in substance claiming for a loss of chance or for lost net rental revenue
2. Whether JP's delay caused the loss, and whether the delay caused Crescendas to lose Philip Morris and PetNet as pre-commitment tenants
3. Whether post-completion net rental revenue loss was too remote, and whether the Single-Year or Multi-Year Model should be used to quantify the loss
4. Whether holding costs incurred during the rent-free fitting-out period were recoverable, and from when pre-judgment interest on the Shared Savings should run

Holding

The Appellate Division allowed CA 87 in part and allowed CA 88 in part. It held that the Multi-Year Model should be used, with the discount applied on a compounded basis and the loss apportioned on 161 out of 355 days, and that the delay had not caused the loss of PetNet. Crescendas' net rental revenue loss was assessed at $4,185,802.60 instead of $1,789,398.82, and its holding costs claim was allowed at $1,061,285.86 instead of $775,310.63. The court dismissed CA 128 on pre-judgment interest, set aside the trial costs orders, and reserved costs for further submissions, indicating that Crescendas was the main successful party.

Reasoning

On the preliminary point, the court agreed with the judge that the label "loss of chance" was a misnomer. Crescendas had run its case on the footing that it would, not merely could, have earned more rent but for the delay, and neither side identified any chance that had been lost.

On causation, the delays of each party were almost evenly balanced and each was an effective cause of the loss, so JP's argument that Crescendas had to link its loss to a specific period after 14 July 2010 failed. The finding that Philip Morris was lost because of the delay was not disturbed, given the evidence that the completion timeline mattered to it. PetNet was different: it kept negotiating well after completion, raised delay only once, and later paid Crescendas a settlement sum of $4.75m, which suggested it was not walking away because of the delay. JP was therefore not liable for rent lost from PetNet, and the settlement sum did not reduce other losses.

On remoteness, the court permitted Crescendas to argue on appeal that its post-completion loss was ordinary damage, as JP had not been prejudiced by Crescendas' inconsistent position below. Departing from the views of Cole J in Multiplex, it held that loss of rent is an ordinary consequence of delayed completion where the contractor knows the building will be let. As both parties knew Biopolis 3 would take years to fill on multi-year leases, the whole loss fell within the first limb of Hadley v Baxendale.

On quantification, the expert evidence showed a multi-year loss. The judge's three objections did not justify rejecting the Multi-Year Model: the speculation involved was not so great as to make assessment impossible, the court must do its best once the fact of damage is shown, variables outside the contract-breaker's control do not bar recovery, and the hypothetical negative outcomes simply reflected the compensatory principle.

On holding costs, Crescendas' claim was for net, not gross, revenue, so adding back holding costs did not double count. Had there been no delay, rent earned on the remaining days would have recouped the costs of the rent-free period, so those costs were wasted because of the delay. The judge's choice of the writ date for interest was not plainly wrong, as the Shared Savings were due earlier.

From the judgment