Robertson Quay Investment v Steen Consultants: Delay Damages & Interest

In Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd, the Singapore Court of Appeal addressed an appeal by Robertson Quay Investment Pte Ltd (RQI) against a decision regarding damages awarded for delays in the construction of the Gallery Hotel. The primary legal issue was whether RQI was entitled to claim interest incurred on loans during the period of delay as damages, and from what date interest on the awarded damages should run. The Court dismissed RQI's appeal, finding that RQI failed to sufficiently prove it incurred additional interest as a result of the delay and upholding the decision that interest on damages should run from the date of service of the statement of claim.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal dismissed with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal addresses damages for construction delay, focusing on interest on loans and the Hadley v Baxendale rule.

1.7 Decision Date

28 February 2008

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Robertson Quay Investment Pte Ltd	Appellant	Corporation	Appeal dismissed with costs	Lost	Chou Sean Yu, Chua Sui Tong
Steen Consultants Pte Ltd	Respondent	Corporation	Appeal dismissed	Won	Morris John
Shahbaz Ahmad	Respondent	Individual	Appeal dismissed	Won	Morris John

3. Judges

Judge Name	Title	Delivered Judgment
Chan Sek Keong	Chief Justice	No
Andrew Phang Boon Leong	Justice of the Court of Appeal	Yes
V K Rajah	Justice of the Court of Appeal	No

4. Counsels

Counsel Name	Organization
Chou Sean Yu	WongPartnership
Chua Sui Tong	WongPartnership
Morris John	Drew & Napier LLC

4. Facts

RQI is the owner and developer of the Gallery Hotel.
Steen Consultants was engaged by RQI to provide civil and structural engineering services for the construction of the Hotel.
Shahbaz Ahmad was a director of Steen Consultants and the civil and structural engineer responsible for the Hotel’s structural works.
The structural drawings of the Hotel were underdesigned.
The respondents gave the building contractor the uncorrected 1996 version of the drawings instead.
Structural deficiencies in the Hotel required additional remedial and strengthening works.
The repairs delayed the completion of the Project by 101 days.
RQI claimed interest on loans as damages due to the delay.

5. Formal Citations

Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd and Another, CA 36/2007, [2008] SGCA 8

6. Timeline

Date	Event
1996-01-01	Structural drawings of the Hotel were done by Shahbaz.
1997-01-01	Drawings were corrected and submitted to the relevant building authorities.
1997-09-18	Facility Agreement signed between RQI and UOB.
1999-09-01	Original completion date of the Project.
1999-09-10	Steen Consultants undertook to pay for the costs of the repairs in a letter to RQI.
1999-12-10	Actual completion date of the Project after delay.
1999-12-31	Originally scheduled date for the issuance of the temporary occupation permit for the Hotel.
2000-02-01	Steen Consultants certified payment of a total sum of $597,893.35 to the contractor carrying out the repairs.
2000-03-01	Temporary occupation permit for the Hotel was eventually issued.
2000-11-01	Steen Consultants certified payment of a total sum of $597,893.35 to the contractor carrying out the repairs.
2002-05-09	Repayment date for the Term Loan.
2005-05-10	RQI filed its writ of summons against Steen Consultants and Goh.
2005-07-04	RQI filed an amended writ of summons which added Shahbaz as a defendant.
2005-08-01	Amended writ served on Steen Consultants.
2005-08-03	Amended writ served on Shahbaz.
2005-09-19	Statement of claim was filed and served.
2005-11-09	Interlocutory judgment was entered by consent against the respondents.
2006-12-07	Assistant registrar delivered oral judgment following an assessment of damages hearing.
2008-02-29	Judgment reserved.

7. Legal Issues

Remoteness of Damage
- Outcome: The court found that additional interest incurred on construction loans as a result of a delay in the completion of a construction project is not too remote to be recoverable under the first limb of Hadley.
- Category: Substantive
- Related Cases:
  - (1854) 9 Exch 341; 165 ER 145
Proof of Damage
- Outcome: The court found that RQI failed to sufficiently prove it incurred additional interest as a result of the delay.
- Category: Substantive
Date of Commencement of Interest
- Outcome: The court upheld the decision that interest on damages should run from the date of service of the statement of claim.
- Category: Procedural

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Contract
Negligence

10. Practice Areas

Construction Law
Commercial Litigation

11. Industries

Construction
Hospitality

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Hadley v Baxendale	Court of Exchequer	Yes	(1854) 9 Exch 341; 165 ER 145	England and Wales	Established the rule for remoteness of damage in contract law, central to determining recoverable losses.
Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd	High Court	Yes	[2007] SGHC 30	Singapore	The trial judge's decision that is being appealed in the current judgment.
Victoria Laundry (Windsor) Ld v Newman Industries Ld	Court of Appeal	Yes	[1949] 2 KB 528	England and Wales	Reformulated the rule in Hadley v Baxendale, providing a modern exposition of remoteness in contract.
Chaplin v Hicks	Court of Appeal	Yes	[1911] 2 KB 786	England and Wales	Addressed the issue of certainty in proving damages, emphasizing that difficulty in assessment does not relieve the wrongdoer of liability.
Biggin & Co Ld v Permanite, Ld	High Court	Yes	[1951] 1 KB 422	England and Wales	Outlined the approach to proof of damage, stating that the court expects precise evidence where obtainable, and does its best where it is not.
Raffles Town Club Pte Ltd v Tan Chin Seng	High Court	Yes	[2005] 4 SLR 351	Singapore	Cited Chaplin v Hicks and Biggin & Co Ld v Permanite, Ld with approval and emphasized the observation by Devlin J.
Koufos v C Czarnikow Ltd	House of Lords	Yes	[1969] 1 AC 350	United Kingdom	Clarified the degree of probability required for remoteness under Hadley v Baxendale, rejecting the phrase 'on the cards'.
CHS CPO GmbH v Vikas Goel	High Court	Yes	[2005] 3 SLR 202	Singapore	Summarized the law on remoteness of damage in contract, distinguishing between imputed and actual knowledge.
Jet Holding Ltd v Cooper Cameron (Singapore) Pte Ltd	Court of Appeal	Yes	[2006] 3 SLR 769	Singapore	Reaffirmed that the principles established in Hadley v Baxendale continue to be the law in Singapore.
Tang Kin Hwa v Traditional Chinese Medicine Practitioners Board	High Court	Yes	[2005] 4 SLR 604	Singapore	Discussed the dangers of focusing on the form of words as opposed to their substance in the test for remoteness of damage in contract law.
Aruna Mills Ltd v Dhanrajmal Gobindram	High Court	Yes	[1968] 1 QB 655	England and Wales	Summarized the effect of the decision of the House in Koufos v C Czarnikow Ltd.
Sempra Metals Ltd v Inland Revenue Commissioners	House of Lords	Yes	[2007] 3 WLR 354	United Kingdom	Endorsed the rule in Hadley and distinguished between what is to be taken as within contracting parties’ reasonable contemplation and what may be said to be reasonably foreseeable for the purpose of a claim for purely tortious damages.
Jackson v Royal Bank of Scotland plc	House of Lords	Yes	[2005] 1 WLR 377	United Kingdom	Endorsed the rule in Hadley.
The Achilleas	High Court	Yes	[2007] 1 Lloyd’s Rep 19	England and Wales	Case commented that the rule in Hadley should be treated as a composite whole and viewed as stating a single principle.
The Pegase	High Court	Yes	[1981] 1 Lloyd’s Rep 175	England and Wales	Case commented that the rule in Hadley should be treated as a composite whole and viewed as stating a single principle.
H Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd	Court of Appeal	Yes	[1978] QB 791	England and Wales	Case where Lord Denning MR sought to apply the tortious rules on remoteness to a contractual claim for physical injury or damage.
Kienzle v Stringer	Court of Appeal	Yes	(1981) 130 DLR (3d) 272	Canada	Case where Lord Denning MR sought to apply the tortious rules on remoteness to a contractual claim for physical injury or damage.
Brown v KMR Services Ltd	Court of Appeal	Yes	[1995] 4 All ER 598	England and Wales	Case where Lord Denning MR sought to apply the tortious rules on remoteness to a contractual claim for physical injury or damage.
McElroy Milne v Commercial Electronics Ltd	Court of Appeal	Yes	[1993] 1 NZLR 39	New Zealand	A New Zealand Court of Appeal decision that questioned the viability of Hadley v Baxendale.
Senate Electrical Wholesalers Ltd v Alcatel Submarine Networks Ltd	Court of Appeal	Yes	[1999] 2 Lloyd’s Rep 423	England and Wales	The plaintiff was denied recovery of damages for breach of contractual warranties as it failed to prove the relevance of the quantum of damages which it was claiming.
Roanoke Hospital Association v Doyle and Russell, Inc	Supreme Court	Yes	214 SE 2d 155 (1975)	Virginia, United States	Allowed recovery of added interest costs during the construction period arising from the longer term of borrowing necessitated by the contractor’s unexcused delay.
Herbert & Brooner Construction Co v Golden	Court of Appeals	Yes	499 SW 2d 541 (1973)	Missouri, United States	Allowed recovery of the extension fee and the interest paid for the extended construction period, given that the precise amounts paid by way of such extension fee and interest were clearly established.
Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co (The Wagon Mound)	Privy Council	Yes	[1961] AC 388	United Kingdom	Case that established the term “reasonable foreseeability” in the law of tort.
Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric	Court of Appeal	Yes	[2007] 3 SLR 782	Singapore	Recognized that the concept of remoteness of damages is essentially a necessary limitation imposed by the law to protect the contract-breaker from infinite damages.
Dunlop Pneumatic Tyre Company, Limited v New Garage and Motor Company, Limited	House of Lords	Yes	[1915] AC 79	United Kingdom	Classic statement of the applicable principles in this particular area of contractual remedies.
Friis v Casetech Trading Pte Ltd	High Court	Yes	[2000] 3 SLR 590	Singapore	Endorsed the principles that interest should commence to run from the moment the cause of action does accrue in respect of loss which also then accrues, and that the court may order interest to run from a date later than that at which the claimant’s loss accrued where there has been an unjustifiable delay on the part of the claimant in bringing his action to trial.
Kaines (UK) Ltd v Osterreichische Warrenhandelsgesellshaft Austrowaren Gesellschaft mbH	Court of Appeal	Yes	[1993] 2 Lloyd’s Rep 1	England and Wales	Case that illustrates the principle that interest was to run, not from the time when the breach occurred (and, hence, the cause of action accrued), but rather from the (later) time when the buyers were required to make payment for the substitute goods.
MCST No 473 v De Beers Jewellery Pte Ltd	High Court	Yes	[2002] 2 SLR 1	Singapore	Case that noted that s 12(1) of the Act is in pari materia with s 3(1) of the Law Reform (Miscellaneous Provisions) Act 1934 (c 41) (UK).
Fidelity and Guaranty Insurance Underwriters, Inc v Allied Realty Company, Ltd	Supreme Court	Yes	384 SE 2d 613 (1989)	Virginia, United States	Followed Roanoke Hospital Association.
W M Foley Construction Corp v Bono	Circuit Court	Yes	2006 WL 3604785	Virginia, United States	Followed Roanoke Hospital Association.
Elar Investments, Inc v Southwest Culvert Co, Inc	Court of Appeals	Yes	676 P 2d 659 (1983)	Arizona, United States	Followed Roanoke Hospital Association.
Multiplex Constructions Pty Ltd v Abgarus Pty Ltd	Supreme Court	Yes	(1992) 33 NSWLR 504	New South Wales, Australia	Case concerned the validity of a liquidated damages clause and does not stand as direct authority that additional interest incurred on construction loans as a result of delays in construction projects is recoverable as direct damages under the first limb of Hadley.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Civil Law Act (Cap 43, 1999 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Period of Delay
Shareholder Loans
Bank Loans
Capitalisation of Interest
Remoteness of Damage
Hadley v Baxendale
Construction Loans
Construction Project

15.2 Keywords

construction delay
damages
interest on loans
remoteness of damage
Hadley v Baxendale
Singapore Court of Appeal

16. Subjects

Construction Dispute
Contract Law
Civil Procedure
Damages

17. Areas of Law

Building and Construction Law
Contract Law
Civil Procedure
Damages