Court Of Appeal Slashes Damages Awarded To JTC

Source : The Business Times, April 12, 2008

The Court of Appeal has substantially slashed damages granted to JTC Corporation after its 2005 victory over Hong Kong contractor Wishing Star.

The Appeal Court, on Thursday, reduced JTC’s original award of $8.14 million damages to just $339,824 - and ordered it to pay three-quarters of costs.

The case has its roots in a contract dating back to June 2002. JTC Corporation, Singapore’s biggest industrial landlord, contracted Wishing Star to provide glass facade walls at the Biopolis, the biomedical research centre at JTC’s one-north project in Buona Vista.

In September 2002, JTC terminated the deal, accusing Wishing Star of misrepresenting its facilities and capabilities when it bid for the project in an open tender. Wishing Star sued, and the High Court ruled in its favour, in 2004. But JTC appealed.

In 2005, the Appeal Court found that Wishing Star had made fraudulent misrepresentations that were material to the award of the contract by JTC - and held Wishing Star liable to JTC for damages due to the termination of the contract.

In 2007, the High Court deemed Wishing Star to be liable to JTC for some $8.14 million damages - of which, $7.8 million was the difference in the value of Wishing Star’s contract and the value of contract between JTC and another sub-contractor, Bovine Lend Lease, which was hired to carry out the facade works after Wishing Star’s termination. Wishing Star appealed against the award of damages.

The Appeal Court on Wednesday dismissed Wishing Star’s appeal against all other claims - but allowed it against the $7.8 million.

The court looked at whether the $7.8 million was the loss suffered by JTC as a direct result of fraudulent misrepresentations by Wishing Star.

In the first tender, Wishing Star was the lowest bidder at $54 million, followed by SB Facade Pte Ltd at $54.07 million and Liang Huat Aluminum Industries Pte Ltd at $63.46 million.

JTC did not consider SB Facade’s bid because of its past experience with the contractor - which made Liang Huat’s the next lowest bid, after Wishing Star’s.

After JTC terminated the contract with Wishing Star, it invited parties to submit a tender - and Bovine Lend Lease won with its lowest bid of $61.81 million.

The Appeal Court noted that in the original tender exercise, if JTC had not contracted with Wishing Star it would have hired Liang Huat. And Liang Huat’s contract value at $63.46 million would have been more than that of Bovine Lend Lease’s at $61.81 million.

The court ruled that, given the principles governing the award of damages for tort, there was no loss proven by JTC.

Wishing Star was represented by Tan Liam Beng, Eugene Tan and Ling Vey Hong of Drew & Napier, while JTC was represented by Ho Chien Mien and Sheik Umar Bin Mohamed Bagushair.