High Court Clarifies Expert Evidence Importance

EXECUTIVE SUMMARY

In Aquarius Corporation v Haribo Asia Pacific Pte Ltd [2022] SGHC(A) 39 (the “Judgment”), the Appellate Division of the High Court (“AD”) reiterated the importance of adducing source documents which parties’ expert witnesses are relying on when giving expert evidence.

In the General Division of the High Court (“GD”), the Honourable Judge found, inter alia, that Aquarius Corporation (“Aquarius”) succeeded in its counterclaim against Haribo Asia Pacific Pte Ltd (“HAP”) in part. However, the Honourable Judge found that HAP was only liable for lost profits suffered by Aquarius up until 30 April 2017. In this regard, the Judge accepted calculations made by Aquarius’ expert witness and awarded Aquarius damages of approximately €1.7 million (being Aquarius’ lost profits).

On appeal, the AD set aside the Honourable Judge’s award of approximately €1.7 million of damages, and instead awarded nominal damages of S$1,000 to Aquarius. The AD took the view that the Honourable Judge in the GD failed to consider that Aquarius’ computations of its alleged lost profits i.e., as computed by Aquarius’ expert witness, have not been established by admissible evidence. The AD’s decision highlights the importance of adducing admissible source documents which a party’s expert wishes to rely on in his/her expert evidence. Failure to do might lead to an adverse finding that a party has not discharged its burden of proving the quantum of damages/losses sought.

 

BACKGROUND

In the suit, HAP claimed an outstanding sum of €1,526,224.76 (with interest) from Aquarius, being outstanding invoices allegedly left unpaid by Aquarius. Aquarius counterclaimed for the sum of €1.7 million from Aquarius for alleged breaches of the distributorship agreement. In particular, Aquarius claimed, inter alia, that HAP was in breach of the distributorship agreement by failing to deliver seven orders it had placed. As a result, Aquarius claimed that HAP is liable to Aquarius for lost profits.

The GD allowed HAP’s claim for the unpaid invoices. The GD also allowed Aquarius’ counterclaim in part and awarded Aquarius damages of approximately €1.7 million, being lost profits until 30 April 2017. The GD dismissed Aquarius’ claim for lost profits after 30 April 2017. As regards Aquarius’ lost profits until 30 April 2017, the GD accepted calculations made by Aquarius’ expert witness. This was notwithstanding that HAP had objected to the contents of Aquarius’ expert witness report on the basis that “the relevant facts, documents and assumptions relied on by Ms Jenny Teo for her computations have not been established by admissible evidence” ([54] of Judgment).

Aquarius appealed against the Judge’s decision on the counterclaim. Similarly, HAP appealed against its liability for Aquarius’ successful counterclaim.

 

APELLATE DIVISION ALLOWED HAP’S APPEAL IN PART

Aquarius’ appeal was dismissed in its entirety. HAP’s appeal was allowed in part. In particular, the AD allowed HAP’s appeal on the ground that Aquarius had failed to prove the quantum of its alleged lost profits. In other words, the GD’s findings on HAP’s liability viz. Aquarius’ counterclaim remain undisturbed.

The AD noted that the Judge had erred in failing to address a point of admissibility which had been raised by HAP. In particular, HAP had submitted that the expert report adduced by Aquarius’ expert on quantification on damages contained calculations which had not been established by admissible evidence. For example, the numbers used in the expert’s calculations originated from summaries which were tabulated and given to the expert (and not actual source documents). Further, those source documents relied upon to produce the summaries had neither been adduced, nor produced by any person with first-hand knowledge.

In addition, the AD found that Aquarius had on multiple occasions, been challenged by HAP on admissibility but had failed to take any steps in addressing HAP’s objections. The AD also rejected Aquarius’ reliance on the business record exception under s 32(1)(b)(iv) of the Evidence Act 1893. In this regard, the Court clarified that a charitable interpretation would not avail Aquarius to the said exception because “some of the source documents do not appear to have been produced to the court in the first place” for the exception to apply.

In short, the AD agreed with HAP’s objections and found that Aquarius had not proven the quantum of its alleged lost profits chiefly because source documents used to support its expert calculations on the appropriate quantum were not adduced and admitted as evidence. In the premises, the AD partially reversed the decision of the Judge below and set aside the counterclaim, and instead awarded nominal damages of $1,000 to Aquarius.

 

CONCLUSION

The AD’s decision serves as a reminder on the importance of ensuring that all source documents (as far as possible) relied by an expert in preparing his/her expert opinion should be adduced by parties. Failing which, the Court might find that a party has failed to discharge its burden of proving the quantum of damages/losses sought against the other party.

 

 

Written by Gerard Quek (Deputy Managing Partner) and Glenn Chua (Associate)

The writers are grateful for the contribution of Lim Wei Tze, 3^rd Year Law Student at the Singapore Management University.