Tan Teck Boon v Lee Gim Siong and others

Lai Siu Chiu J:

[1] This was an appeal to a judge in chambers in Registrar’s Appeal No 115 of 2011 (“the Appeal”) by the first to third defendants viz Lee Gim Siong, Oh Geok Chuan and Richland Logistics Services Pte Ltd respectively (“the Appellants”) against the award of damages made by an Assistant Registrar (“the AR”) in favour of Tan Teck Boon (“the plaintiff”). The AR had on 31 March 2011 awarded damages to the plaintiff for:

[2] The Appellants appealed to reverse or reduce the damages awarded for:-

[3] The other damages awarded by the AR (which totalled $88,714.30) were not disputed and partial payments were made to the plaintiff in two tranches on 14 August 2009 and on 27 October 2010 respectively.

[4] The plaintiff’s injuries stemmed from a traffic accident with the Appellants on 26 December 2006 which involved the plaintiff’s motor vehicle and the vehicles driven by the first and second defendants. The plaintiff sued for his injuries which included fractures to his right thigh bone, right forearm and left wrist. On 14 December 2009, interlocutory judgment by consent was entered for the plaintiff against the Appellants in the proportion of 90% and 10% for the first defendant and jointly against the second/third defendants respectively.

[5] The plaintiff was born in 1977 and was 33 years of age at the date of assessment. He was/is the sole-proprietor of Tom Express which is a courier business. Under a “DHL Owner Operator Agreement” made with DHL Express (Singapore) Pte Ltd (“DHL”), Tom Express provided express transport services for DHL over certain routes (“the DHL Agreement”). The DHL Agreement was given to ex-employees of DHL to run their own business of delivering goods and documents for DHL. The plaintiff started operating Tom Express in September 2005 and he personally carried out courier assignments in the Changi South Lane and Bedok North areas. He also paid one Ahmadkalil Bin Mohamed (“Ahmadkalil”) to carry out courier assignments within the Tampines Central area.

[6] The plaintiff would occasionally rely on a company called i.Logistics Pte Ltd if he or Ahmadkalil were not available to complete the assigned jobs. After the accident in December 2006, the plaintiff was unable to personally make courier deliveries and took on what the Appellants described as a “more managerial role in the business”.

[7] It was not disputed that the plaintiff’s business had grown and he was earning more than he did before the accident. From his tax returns, it was not disputed that the profits earned by Tom Express was the plaintiff’s only source of income. The table below tabulates the net profit of Tom Express over the last 5 years:

[8] The injuries suffered by the plaintiff were not disputed. The medical report of his treating doctor, David Paul Bell (“Dr Bell”), dated 27 March 2009, stated that the plaintiff underwent surgery for the following injuries:-

The AR noted (at [3] of her Grounds of Decision [the GD”]) that the plaintiff was discharged from hospital on 3 January 2007 but had two further surgeries for revision of fixation and bone grafting on 22 February 2007 and 3 October 2007.

[9] The plaintiff was given hospitalisation leave continuously from 26 December 2006 to 14 September 2010. Besides several surgical scars on his right forearm, left wrist, both hips and right knee caps, the plaintiff suffered residual pain in his right groin (also referred to as his right inner thigh) and left wrist. His right leg was also shortened by 1cm.

[10] The dispute between the parties centred on the extent of the plaintiff’s recovery from his injuries. The Appellants argued that the plaintiff may need to rely on pain medication intermittently, but he had recovered uneventfully from his injuries and could return to courier work even though he may require assistance to carry heavy loads. The plaintiff’s position was that the pain in his right thigh prevented him from continuing to personally carry out courier assignments. The AR (at [7] of her GD) preferred the opinion of the plaintiff’s two experts and agreed that he could no longer carry out courier assignments personally. The Appellants did not appeal against this finding and it was on the basis that the plaintiff could no longer carry out courier assignments personally that the loss of pre-trial earnings, loss of future earnings and loss of earning capacity were assessed.

[12] The plaintiff claimed a total of $146,661 for loss of pre-trial earnings - $117,271 paid to Neo Say Seong (“Neo”) and $29,390 paid to i.Supplies Pte Ltd (“i.Supplies”) to carry out courier assignments on his behalf from January 2007 to October 2010. The AR only allowed the plaintiff to recover the sum ($117,271) paid to Neo. The AR found that on the evidence i.Supplies was hired only when Neo was unable to carry out deliveries and the plaintiff had conceded that even before the accident, he would hire someone else to take on his duties during the times he could not report for work. The AR found it unbelievable that the plaintiff would have “singlehandedly” been able to do all the work Neo and i.Supplies did (see [41] of the GD).

[13] The AR rejected the Appellants’ submission that the plaintiff did not suffer any drop in his assessable income since his income increased after the accident. The AR stressed again that “what was important was that but for the accident, the plaintiff could have earned even more by carrying out courier assignments himself rather than paying Neo to do so on his behalf” ([44] of the GD).

[14] The AR also rejected the Appellants’ submission that the plaintiff could still personally deliver the goods, albeit at a slightly reduced capacity with light loads. The AR found that an award of loss of future earnings appropriate because there was sufficient evidence before her to fix a multiplier and multiplicand.

[17] Broadly, did the AR err in law or fact in her awards for:-

[18] The Court of Appeal in Singapore Airlines Ltd v Tan Shwu Leng [2001] 3 SLR(R) 439 made it clear that the judge was not constrained by the principles set out in Davies v Powell Duffryn Associated Colleries [1942] AC 601 when considering an appeal on assessment of damages in a Registrar’s Appeal. The Court of Appeal held at [17] that all appeals from a Registrar to a judge in chambers were dealt with by an actual rehearing of the application and the judge was entitled to treat the matter as if it came before him or her for the first time.

[20] The Appellants argued that the plaintiff had failed to prove any real assessable drop in earnings because his income actually increased during the period between the time of accident and the date of assessment. The Appellants disagreed that his earnings were affected by the sum total of what he paid an extra worker to do on his behalf. The AR had rejected the Appellants’ argument that loss of pre-trial earnings can only be calculated by comparing what the plaintiff earned pre-accident and what he earned post-accident. The AR cited the proposition in Chai Kang Wei Samuel at [29] that:

[21] The Appellants had argued that this proposition was used in the context of loss of future earnings and should not be applied for pre-trial loss of earnings. This argument of the Appellants is flawed. While the proposition was used in Chai Kang Wei Samuel in the context of loss of future earnings, the proposition being applied is clearly a general principle embodying the compensatory purpose of damages in personal injuries as stated by Lord Blackburn in Livingstone v Raywards Coal Co (1880) 5 App Cas 25 at 39:

[22] In Chai Kang Wei Samuel, the claimant’s post-accident income was slightly more than her average yearly income pre-accident. However, the Court of Appeal held at [28] that it would be wholly inequitable to hold that the victim suffered no loss just because her post-accident income was slightly more than her average yearly income pre-accident. The injury had affected the number of hours the claimant was able to work and a more accurate reflection of her loss was the actual number of hours she had worked before the accident multiplied by the actual rate she was earning after the accident (since the rate was normally higher with inflation and her greater experience).

[24] The AR did not refer to other cases besides Chai Kang Wei Samuel in her analysis of pre-trial loss of earnings. Neither did the parties submit any authorities with similar facts on point where the Court had awarded loss of pre-trial earnings despite the victim’s business being more profitable. In this regard, the English Court of Appeal case of Phillips v Holliday & ANR [2001] EWCA Civ 1074 (“Phillips v Holliday”) is particularly useful. In Phillips v Holliday, the claimant was awarded loss of pre-trial earnings despite his business being more profitable. The claimant worked for a company both administratively (as a contracts manager) and manually (painter and decorator). The Court of Appeal treated the profits of the company as the claimant’s own, as the company was owned fully by the claimant’s wife with the wife also being the sole director of the company. Similar to our case, the Court of Appeal found that the claimant’s injuries severely limited his ability to carry out the manual work he used to be able to do for the company as a painter and decorator and he could only carry out administrative work. Most pertinently, the Court of Appeal held at [20] that:

[25] The Court of Appeal also addressed another valid concern in our case at [25] of:

[26] The Court of Appeal recognised that the inability of the claimant to carry out the manual work that he used to do was a loss even if the company had an increase in profit at [30]:

[27] It is also important to consider how the Court of Appeal in Phillips v Holliday distinguished the case of Ashcroft v Curtin [1971] 1 WLR 1731 (“Ashcroft v Curtin”) at [30]:

[28] In Ashcroft v Curtin, the claimant was a skilled engineer who carried a successful business through a private company of which he was the active managing director. The profits of the company had declined but the claimant had failed to claim loss of profits owing to his disabilities because the company’s accounts were unreliable. The Court of Appeal in Ashcroft v Curtin had made an observation that may be helpful to the present case:

The obiter dicta in Ashcroft v Curtin suggests that the Court cannot assume that the profits may go down by the amount of salary used to hire the replacement for the pre-accident work, for the replacement may have cause the business to be more profitable. However, what Phillips v Holliday is stating is that even if the business becomes more profitable, the profits could have been even greater if the claimant did not have to bear the additional cost of hiring the replacement for doing the work he could have done himself. To prevent over-compensation the Court of Appeal in Phillips v Holliday would then consider the appropriate deduction for the value of the claimant’s increased managerial role.

[32] The evidence on record does provide support for the fact that the plaintiff’s role post-accident did not evolve into substantial managerial duties. His evidence was that he only needed to go back to the office to check on matters 4-5 times a year:

Neo, the plaintiff’s driver, also supported the plaintiff’s evidence that the plaintiff only came to office a few times a year; Neo testified that:

Gee also testified that the plaintiff only had to attend monthly meetings with DHL:

[34] The AR’s reasoning for this award was similar to her reasoning for pre-trial loss of earnings. At [44] of the GD, the AR said:

The AR also found that there was sufficient evidence before her to fix a multiplier and multiplicand to award the Plaintiff loss of future earnings.

[35] In Phillips v Holliday, the Court of Appeal had also awarded loss of future earnings to the claimant at [33]:

The Court of Appeal had also added at [34] that “[t]he next question is what deduction should be made for the fact that money will still be paid out to the claimant albeit his role will be that of administrator and the manual work that he can do will be much more limited”. Previously for pre-trial loss of earnings, the concern was also that the claimant may be overcompensated if there was no appropriate deduction for the value of the claimant’s increased capacity for managerial work. It was noted that the Court of Appeal in Phillips v Holliday awarded a sum for loss of future earnings and loss of earning capacity together, but it would be more appropriate to assess them separately in this case.

[36] I believe from her GD that the AR may have not fully considered the aspect of deducting the value of the plaintiff’s increased managerial role after the accident. For pre-trial loss of earnings, the evidence did show that the plaintiff’s administrative work did not change substantially from what he carried out pre-accident. However, in light of the fact that the plaintiff’s business is expanding and increasing in profits, it would be unsafe to assume that in future he will always be a full time driver for his company concurrently with his increasing managerial role.

[38] In Koh Soon Pheng v Tan Kah Eng [2003] 2 SLR(R) 538 (“Koh Soon Pheng”), the High Court upheld an AR’s award of $180,000 for loss of earning capacity to a 42 year old sole-proprietor who owned a motorcycle workshop and whose specific skill was to repair large motorcycles with high capacity engines. The High Court had upheld the AR’s award for loss of earning capacity instead of loss of future earnings as the High Court had found that it was too speculative to determine how well the claimant’s business would perform in future. It is noteworthy that the Court stated at [17]:

While the Court recognised the loss of earnings similar to the present case when the claimant had to hire someone to do the work he used to do, no award was made since the claimant there did not actually claim to have hired someone to supplement his reduced working abilities. In Koh Soon Pheng, the business was also making losses.

[40] On an examination of the other cases, it is clear that the award in each case was confined to the specific facts and evidence produced before the Court, because the Court would be unable to award loss of future earnings when it cannot fix a proper multiplicand and multiplier. The Court must also be wary of the fact that some of the older cases before Chai Kang Wei Samuel operated on the premise that loss of future earnings and loss of earning capacity were awarded as alternatives and did not see them as conceptually distinct heads of damages.

[42] The basis for using the average figures of Neo’s annual pay in 2008 and 2009 as the multiplicand would not reflect what loss of future earnings is meant to compensate. If loss of future earnings is to compensate the plaintiff for his additional expense of always having to hire an additional courier to do the work he used to carry out personally, it would be more logical on the evidence provided to take the average annual salary of the drivers in the plaintiff’s business. The plaintiff had 3 drivers and Neo’s monthly salary used to be the highest of all the 3 drivers until Ahmadkalil had a raise in May 2010. The figures are set out below:

Only the annual salary for 2008 and 2009 was taken as there was insufficient evidence to calculate the annual salaries of the drives for 2010. I am of the view that the appropriate multiplicand (averaging the annual salary of all 3 drivers for 2008 and 2009) would be $31,223.60.

[43] The parties did not submit that the award for loss of future earnings should be reduced by income tax payable and the AR’s award did not deduct any income tax. I believe it should and a fair deduction to reflect the income tax for the plaintiff’s income bracket would be $2,000 from the multiplicand. Therefore, making the appropriate reduction for the plaintiff’s income tax, I find that the multiplicand for loss of future earnings should be $29,223.60.

[44] While the AR reduced the multiplier to take account of the inevitable fluctuations in the business of Tom Express and the inflated expenses of plaintiff’s business accounts, she did not make the appropriate deduction for the value received by the plaintiff in carrying out a greater managerial role in Tom Express. Due weight should have been given to the fact that the plaintiff had always performed dual roles (both managerial and operational) and the reality of the business was that it had grown from a 2 man 1 vehicle sole-proprietorship to one having 3 drivers and 2 lorries with the evidence suggesting that it was likely to grow further in the future. Hence, the necessary and appropriate deduction for the value of the plaintiff’s increased capacity for managerial work in future would be to reduce the multiplier to 3. This would more fairly reflect what the plaintiff had actually lost. I therefore reduce the AR’s award for loss of future earnings to $87,670.80.

[45] The Appellant submitted that the plaintiff at the hearing below did not submit on a claim for loss of earning capacity in addition to an award for loss of future earnings. This is not entirely correct as the plaintiff’s submissions below did argue for an award of loss of earning capacity as in the alternative to loss of future earnings. Furthermore, since an award for loss of earning capacity is part of general damages, it need not be specifically pleaded. The plaintiff had submitted that:

[46] I am of the view that the AR applied the correct legal test for an award for loss of earning capacity – and had carefully assessed if (i) there was a substantial or real risk that the plaintiff would lose his present job at some time or before the estimated end of his working life and (ii) whether the plaintiff would be disadvantaged in the open employment market because of his injuries. The evidence did support the plaintiff’s contention that there was a real risk that he would lose the ability to sustain Tom Express. His business was highly dependent on his contract with DHL and Gee of DHL had testified that the plaintiff’s inability to personally drive and meet customers would be a factor relevant in the renewal of the DHL contract. However, the AR was right in assessing this risk conservatively as it was undisputed that DHL had renewed the plaintiff’s contract twice after the accident, despite the fact that the plaintiff could no longer personally delivery the goods.

[47] If the plaintiff was unable to run Tom Express and had to seek alternative employment, he would be seriously disadvantaged as he has been a driver all his life. However, he would not be able to tap on his driving experience whilst his highest educational qualification was only completion of his primary school examinations. Any sedentary job the plaintiff could manage to get in the open market would pay him far below what he was earning now. Consequently, the AR’s lump sum award of $30,000 for loss of earning capacity was fair and is accordingly upheld.

[48] While I accept that the AR’s award for pre-trial loss of earnings and loss of earning capacity should be upheld, her award for loss of future earnings should be reduced from $214,613 to $ 87,670.80.