6/21/2016 MarcoPoloShippingCompanyPteLtdvFairmacsShipping&ampTransportServicesPteLtd

MarcoPoloShippingCompanyPteLtdvFairmacsShipping
&TransportServicesPteLtd[2015]SGCA44
CaseNumber : CivilAppealNo129of2014

DecisionDate : 21August2015

Tribunal/Court : CourtofAppeal

Coram : AndrewPhangBoonLeongJAStevenChongJ

CounselName(s) MathiewChristopheRajoo,CaiJianyeEdwinandVikneshJegPillay(DennisMathiew)fortheappellant
:
TanWeeKongandPohYingYingJoanna(LegalSolutionsLLC)fortherespondent.

Parties :

DamagesAssessment

[LawNetEditorialNote:Thedecisionfromwhichthisappealaroseisreportedat[2015]1SLR904.]

21August2015

AndrewPhangBoonLeongJA(deliveringthegroundsofdecisionofthecourt):

Introduction

1ThiswasanappealagainstthedecisionoftheHighCourtjudge("theJudge")reportedasFairmacsShipping&Transport
ServicesPteLtdvHarikutaiEngineeringPteLtdandanother[2015]1SLR904("theGD").Thecaseconcernedashipmentof
riversandthatnevermadeitswaytotheintendedbuyer,FairmacsShipping&TransportServicesPteLtd("theRespondent").
ThematterfirstwentbeforetheAssistantRegistrar("theAR")whoassesseddamagesatUS$62,950withinterestat5.33%from
thedateoftheWritofSummons.TheRespondentappealed.Afterhearingparties,theJudgeallowedtheappeal,assessing
damagesatUS$141,226(withthesameorderastointerest).MarcoPoloShippingCompanyPteLtd("theAppellant"),the
seconddefendantatthetime,appealedtothiscourt.

2Partiesappearedbeforeuson8July2015.Afterhearingtheirsubmissions,weallowedtheappealandrestoredtheAR's
award,issuingthefollowingbriefgrounds(whichareelaborateduponinthisjudgment):

Whilstweagreethatitisnotanessentialrequirementtohaveamarketindexinordertodeterminethemarketvalueofthe
cargoinquestion,therespondenthasnotadducedsufficientevidenceofarelevantmarketforriversandinPortBlairduringthe
firstweekofOctober2011.

Inthecircumstances,weallowtheappealandrestoretheassistantregistrar'sawardofUSD62,950,whichreflectsthesumthat
therespondenthaspaidinrespectofthecargo.

Facts

Partiestothedispute

3TheRespondentwasacompanyincorporatedinIndiapurportedlyinthebusinessoftrading,importingandexporting
constructionmaterials.Byacontractofsaledated18August2011,theRespondentagreedtopurchaseriversandfromMarine
AllianceGroup(Singapore)PteLtd("MarineAlliance").ThesandwastobeshippedfromMyeik,Myanmar,toPortBlair,India,
inthreeshipments.Theshipmentinquestionthesecondshipmentinvolved4,300metrictonnes("MT")ofriversand.

4TheAppellantwastheownerofthevesselsthatwereusedtotransporttheriversand.HarikutaiEngineeringPteLtd
("Harikutai"),apartytotheproceedingsbelow,butnotbeforethiscourt,wasthecontractingcarrier.

Backgroundtothedispute

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5Thesecondshipmentof4,300MTofriversandwasexpectedtoreachPortBlairon1October2011.Itneverdid.On
3October2011,thecommercialmanageroftheRespondent,MrSreenathRajendhranath("MrRajendhranath"),telephoned
MrDanadsWong("MrWong"),arepresentativeoftheAppellant.Inthatconversation,MrWonginformedMrRajendhranaththat
thevesselswereonthelastlegoftheirvoyageandthatthedelaywascausedbyunfavourableweatherconditions.
MrRajendhranaththereafterwroteanemailtoMrWongtodocumenttheirconversation.

6On18October2011,withnocargoinsight,theRespondent'ssolicitorsfromLegalSolutionsLLC,whocontinuedto
representtheminproceedingsbeforethecourt,wrotetotheAppellantandHarikutaidemanding:(a)informationonthelocation
ofthevesselsand(b)deliveryupofthesecondshipment.

7On15December2011,theRespondentfileditsWritofSummons.ItscasewasagainstboththeAppellant(inthetortof
conversion)andHarikutai(forbreachofthecontractofcarriage).FromtheAppellant,theRespondentsoughtdeliveryupofthe
cargoor,alternatively,US$201,455indamages.Thisfigurewasderivedbymultiplying4,300MTwiththeallegedmarketprice
ofthecargoatPortBlairattherelevanttime,US$46.85perMT.

8On28December2011,theAppellantappliedforsecurityforcosts.Initsaffidavitinsupportofitsapplication,whichwas
filedthatsameday(ie,28December2011)byMrAzhariBinMohdJadi("MrAzhari"),theOperatingManageroftheAppellant,
theAppellantexplainedforthefirsttimewhathadhappenedtothecargo(seealsotheGDat[10]).Harikutaihaddefaultedon
thepaymentofthecharterhire.Inresponse,theAppellanthadwithdrawnthevesselsandsoldthecargoonboard,including
thesecondshipmentofriversand,tomitigateitslosses.MrAzharididnotstatethepriceatwhichtheriversandwassoldsave
astonote"theCargoisnotvaluableandiseasilyreplaceable".Inhissubsequentaffidavitdated13January2012,MrAzhari
clarifiedthatitwasnottheAppellantthathadsoldthecargobut,possibly,MPShippingPteLtd,awhollyownedsubsidiaryof
theAppellant(seealsotheGDat[10]).

9On20February2012,theRespondentappliedforsummaryjudgmentagainstbothHarikutaiandtheAppellant.During
thehearingbeforetheARon15June2012,allthreepartieswerepresent.HarikutaiwasrepresentedbyHaridass
Ho&Partners.TheARgrantedinterlocutoryjudgmentagainstboththeAppellantandHarikutaiwithdamagestobeassessed,
withinterestattherateof5.33%fromthedateoftheWritofSummons(ie,15December2011)tothedateofpayment.The
Appellantappealed,butitsappealwasdismissedbytheJudgeon3August2012.

10Attheassessmentofdamageshearing,theRespondentsoughtUS$201,455which,itargued,wasreflectiveofthemarket
valueof4,300MTofriversandatPortBlairinthefirstweekofOctober2011(theexpecteddateofdeliverywas3October2011).
Harikutaiwasabsentfromthishearing.Fromtheonset,theamountofriversandconvertedwasnotindispute.Neitherwasthe
pointoflawthatmarketvaluewasthefirstportofcallindeterminingthevalueoftheriversandconverted.Assuch,the
Respondent'smainchallenge(inmakinggooditsUS$201,455claim)wastoprovethattherelevantmarketvalue(ie,the
marketvalueofriversandatPortBlairinthefirstweekofOctober2011)wasindeedUS$46.85perMT.Itsoughttodosoby
relyingontheevidenceofMrBabuvenkateshLoganathan("MrLoganathan"),GeneralManagerofFairmacsTradingCompany
PteLtd("FTPL").FTPLwasthetradingarmofthe"Fairmacsgroup"ofcompaniesagrouptowhichtheRespondentbelonged.

11Inhisaffidavit,MrLoganathanaffirmedthattherewere"nopublishedindicesinPortBlair,Indiasettingoutthemarket
pricingofriversand".Forthatreason,headducedinhisaffidavitfourteenpagesofinvoices,deliveryordersandreceipts
evidencingthesaleofriversandbyFTPLinPortBlairduringthefirstweekofOctober2011inabidtoamassfiguresfrom
whichhecoulddiscerna"marketprice".Hetabulatedthefiguresasfollows:

No InvoiceNo Date NameofBuyer QuantityRate INRto Rate

perMT USD in
inINR exchangeUSD
rate
1 SD012/10/1112 3October2011 Sankar 7MT 2242.8649.4240 45.38
Contractor&Construction
2 SD014/10/1112 3October2011 SturdyDevelopers&Builders 7MT 2242.8649.4240 45.38
3 SD025/10/1112 4October2011 Sankar 7MT 2242.8649.2250 45.563
Contractor&Construction
4 SD026/10/1112 5October2011 BinuKumar 7MT 2357.1449.1918 47.917
5 SD034/10/1112 7October2011 Hamza 3.5MT 2457.1449.1355 50.007
AveragepricingofriversandinearlyOctober2011 2308.5749.280 46.85

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12TheARwasnotpersuadedbythisevidence.Inparticular,hewasconcernedbythreethings:(a)theabsenceofamarket
indexforriversandatPortBlair(b)thelackofabreakdownoftheproposedfigureofUS$46.85perMT(inparticular,how
muchofthatfigureconstitutedFTPL'sprofits)and(c)thefactthattherateofUS$46.85perMTwasreachedbycomparinglow
volumesalesofriversandatnomorethan7MTpersale(whereas,theAR'sconcernwasthathighvolumesalesintheregion
of4,300MTwouldlikelyfetchlowerprices).Givenhisviewthattherewasalackofcredibleevidence,theARwastherefore
unabletoconcludethatthemarketvalueofriversandwasindeedUS$46.85perMTinPortBlairinearlyOctober2011.He
optedtoassessdamagesonthebasisofthecostthattheRespondenthadincurredfortheriversandratherthanmarketprice.
HearrivedatthefigureofUS$62,950,theamountthattheRespondenthadactuallypaidfortheriversand.

13TheRespondentappealedtotheJudgeinRegistrar'sAppealNo290of2013.

Decisionbelow

14TheJudgeallowedtheRespondent'sappeal.However,shedidnotawardittheentiretyoftheUS$201,455sought.
Rather,sheassessedthedamagesatUS$141,226(plus5.33%interest).Shearrivedatthisfigureinthefollowingmanner:

(a)First,shepreferredUS$39.82perMT(asopposedtotheRespondent'sallegedUS$46.85perMT)astheappropriate
rate.AlthoughsheacceptedtheRespondent'sevidencethatUS$46.85perMTwasthemarketvalue(seeaboveat[11]),she
effecteda15%reductiontoaccountforthecustoms(5%)andlandingcosts(10%)thattheRespondentwouldhavehadtopay
hadthecargoarrivedatPortBlair(theGDat[73]and[77]).Mathematically,thisisrepresentedasfollows:

(i)US$46.85x85%=US$39.82.

(ii)US$39.82x4,300=US$171,226.

(b)Secondly,shesubtractedUS$30,000fromthefigurederivedabovetoaccountforthefreightthatwouldhavebeenpaid
bytheRespondenthadthecargobeendelivered.Mathematically,thisisrepresentedasfollows:US$171,226US$30,000=
US$141,226.

15TheJudge'sreasoningastowhysheallowedtheappealcanbesummarisedinfourmainpoints.First,onthelaw,the
JudgewaslargelyinagreementwiththeAR.LiketheAR,sheproceededonthebasisthatthevalueofgoodsshouldtypically
bedeterminedbytheirmarketvalueattheplaceanddateoftheconversionand,inthecaseofgoodsconvertedatsea,the
marketvalueofthegoodsattheplaceanddateofexpecteddelivery(seetheGDat[36]).Thismightyieldtosomeotherbasis
ofvaluationwhere,forinstance,therewasnomarketforthegoodsorwherethemarketvaluecouldnotbedetermined(seethe
GDat[26]).Inthiscase,therefore,thevalueofthecargoshouldprimafaciebebaseduponthemarketvalueofthecargoat
PortBlairduringthefirstweekofOctober2011(seetheGDat[37]).

16Secondly,andthisisfundamentallywheretheJudgedisagreedwiththeAR'sanalysis,theJudgefoundthat
MrLoganathan'stablesupportedtheexistenceofamarketforriversandatPortBlairduringthefirstweekofOctober2011(see
theGDat[39]).TheJudgedefinedamarketasastateofaffairswherethereisawillingsellerandwillingbuyerafter
negotiations(seetheGDat[40]).Havingfoundassuch,shenotedthattheAppellantboretheevidentialburdentoshow,asit
hadasserted,theabsenceofamarket(seetheGDat[43]).Todetermineifithadmetthisburden,sheturnedtothetwo
argumentsadvancedbytheAppellant.ThefirstwasthattherewasnomarketpriceindexinPortBlair.Althoughamarketprice
indexwasindicativeoftheexistenceofamarket,shenotedthatthelackofanindexdidnot,onitsown,provetheabsenceofa
market(seetheGDat[46]).Thesecondwasthatitwouldtakeaminimumof20to25daysforanysellerofriversandtodeliver
thegoodstoPortBlair.This"20to25days"figurecamefromMrLoganathan'sownevidenceduringcrossexamination.In
response,theJudgenotedthatimmediatedeliverywasnotanecessaryconditionforestablishingamarket(seetheGDat[53]).

17Thirdly,theJudgefoundMrLoganathan'sevidencepersuasiveandthatitsupportedthepropositionthatthemarketvalue
ofriversandinPortBlairinthefirstweekofOctober2011wasUS$46.85perMT(seetheGDat[64]).TheAppellantdidnot
adduceanycountervailingevidenceofitsown.ItsonlyattempttodosothroughitsTechnicalSuperintendent,MrLauChung
Hon,whoallegedthatthepricewasbetweenS$7andS$7.50perMT,waspremisedentirelyonhearsay(seetheGDat[62]).

18Fourthly,theJudgedismissedtheAppellant'sratherbelatedargumentthattheRespondentshouldhavemitigateditsloss
bypurchasinganequivalentvolumeofriversandaftertheconversion.Thiswasfortwomainreasons.First,theRespondent
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hadbeenkeptinthedarkaboutwhathadhappenedtothecargo,andwashenceinnopositiontomakeadecisionabout
whetherto,forinstance,sourceforareplacement(seetheGDat[82]).Secondly,theAppellant's"mitigationofdamages"
defencehadnotbeenpleaded(seetheGDat[81]).

Theparties'casesonappeal

TheAppellant'scase

19TheAppellant'scasebeforethiscourtwasessentiallyarepriseoftheargumentsithadraised(successfully)beforetheAR
and(unsuccessfully)beforetheJudge.First,itarguedtherewasnomarketforriversandinPortBlairinthefirstweekof
October2011.Indoingso,itimplicitlyacceptedthatthefirstportofcallinassessingdamagesincaseslikethiswasthemarket
valueofthegoods.ItalsoagreedthatthemarketinquestionwasthatinPortBlairasatthefirstweekofOctober2011.Itsonly
pointofcontentionwasthat,contrarytotheJudge'sfinding,therewasnosuchmarketinPortBlairduringthisperiod.Atbest,it
argued,therewasanoligopolisticmarket,whichdidnotcountasamarketforthepurposeofassessingthemarketvalue.The
oligopolisticnatureofthemarketwasevincedbythedifficultyfacedbytheRespondentinascertainingthepriceschargedbyits
competitorsaswellasthefactthatgoodshadtobeimportedfromoverseasmarkets.

20Secondly,theAppellantarguedtherewasnoascertainablemarketvalue.MrLoganathan'stablewasofnoprobative
value.Insupportofthisassertion,theAppellantseemedtorelyonceagainontheargumentsitmadetorebuttheexistenceofa
market.Inthisrespect,itseemedthatitssecondargumentwasnotadistinctone.

21Thirdly,theAppellantarguedthatthe"generalmarketrule"shouldinanycasenotberelieduponastodosowouldresult
inawindfallaccruingtotheRespondent.TheRespondentwasessentiallyactingasamiddlemaninthetransactioninvolving
riversandandinsuchcases,aswasheldintheSupremeCourtofVictoriaAppealDivisiondecisionofFurnessvAdrium
IndustriesPtyLtd[1996]1VR668("Furness"),thedamagesrecoverableshouldbe"assessedbycalculatingthecostof
replacing[the]stockatthedateofconversion"(at678).ThedifferencebetweenUS$62,950(theAR'saward,whichrepresented
the"costprice")andUS$141,226(theJudge'saward)wasasubstantialamount(ie,US$78,276).Thislikelyrepresentedthe
amountofprofitsthatFTPLwouldobtaininconductingitsbusiness.Implicitly,andnecessarily,theAppellantwasarguingthat
thesewereprofitsthattheRespondentwouldneverhavemadeinthecourseofits(ratherdifferent)business.

22Forcompleteness,theAppellantalsoraisedafurtherandalternativeargumentthatifthecourtweretoassessdamages
onthebasisofthemarketvalue,thecurrencyshouldbeinIndianRupees,notUSDollars,asthiswasthecurrencytypically
usedintheRespondent'ssaletransactions.Asweallowedtheappeal,thisargumentwasirrelevantandwesaynomoreabout
this.

TheRespondent'scase

23InresponsetotheAppellant'smainarguments,theRespondentfirstarguedthattherewasanavailablemarketforriver
sandinPortBlairinthefirstweekofOctober2011.Itdefined"market"as"astateofaffairswheretherearesufficienttraderswho
areintouchwith[oneanother]",citingBenjamin'sSaleofGoods(MichaelGBridge,gened)(Sweet&Maxwell,8thEd,2010)at
para16066,andarguedthattheinvoicesadducedbyFTPL(asrepresentedinMrLoganathan'stablereproducedaboveat
[11])evincedsuchastateofaffairs.Further,itcriticisedtheAppellant'sassertionthatthemarketwasoligopolisticas:
(a)unsupportedbyevidenceand(b)premisedonanincorrectunderstandingoftheterm"oligopoly".

24Secondly,theRespondentarguedthatthemarketvalueatthematerialtimewasindeedUS$46.85perMTbasedonthe
evidenceofMrLoganathan.Thirdly,thecaseofFurnessinvolveddifferentfacts.Furnessdealtwithaclaimbyacompany
AdriumIndustriesthatmanufacturedandimportednoveltyitemswhichitsoldtowholesalers.Theappellant/defendant,
Furness,wastheownerofthefactoryinwhichAdriumIndustriesoperated.AdriumIndustriesleftsomeoftheirmanufactured
goodsthesubjectoftheirconversionclaimbehindinthefactoryaftertheyleftthepremises.Furnesssoldthoseitems.In
Furness,itwasdoubtfulastohowmanyofthenoveltyitemscouldhavebeensoldandAdriumIndustrieshadfailedtocallin
anyevidencewhichpointedtoahighercostatthedateoftheconversiontoreplacethegoods.Here,however,theRespondent
argued,ithadadducedevidencetodemonstratewhatthemarketvaluewas.

Issues

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25Thereweretwomainissuesbeforethiscourt.First,wastheJudgecorrectinfindingtherewasamarketfortheconverted
riversandatPortBlairinthefirstweekofOctober2011("Issue1")?Secondly,wastheJudgecorrectinfindingthatthemarket
valueoftheconvertedriversandwasUS$46.85perMT("Issue2")?

26TheAppellant'sargumentcentringonthedoctrineofmitigationofdamagesfailed,inourview,atthethresholdlevelfor
thereasonshighlightedbytheJudge.NotonlydidtheAppellantnotpleaditasadefence,theargumentitselflackedany
factualbasis.ItwasundisputedthattheRespondenthadonlylearntofthewhereaboutsofthecargoattheeleventhhour
threemonthsaftertheexpecteddeliveryofthecargo(seeaboveat[8]).Itwasthereforeinnopositiontodecideifitshould
purchaseareplacementshipment.Furthermore,itwasnotthecasethattheRespondentwassimplytakingabackseat
throughouttheentireepisode.Notonlywasit(throughMrRajendhranath)activelymonitoringtheprogressofthevoyage,it
wasinconstantcontactwiththesupplier,MarineAlliance,throughoutthefirstweekofOctoberdiscussinghowtoproceedin
relationtothemissingcargo.

Ourdecision

27Afterhearingarguments,weallowedtheappeal.AlthoughweagreedinprinciplewiththeJudge'sviewonthelaw(ie,that
themarketvalueshouldbethefirstportofcallinassessingdamages),wefoundthataclarificationwasnecessary:themarket
valueinquestionmustpertaintoarelevantmarket,thatis,amarketinwhichtheclaimantisinfactsellingorintendingtosell
thegoods.Inthiscase,theRespondentwasinvolvedinaverydifferentmarketonefurtherupthesupplychain.Therewasno
evidenceadducedofthisparticularmarket,letalonethevalueatwhichgoodsweresoldifsuchamarketexisted.Toawardthe
RespondentdamagesbasedonthepricestypicallychargedbyFTPLwouldamounttoconferringupontheRespondenta
windfall.Giventhedearthofevidenceofarelevantmarket,wefoundthisanappropriatecasewheretheprimarybasisof
assessingdamages(marketvalue)shouldyieldtothesecondarybasis(costofreplacement).WethereforerestoredtheAR's
award.Wenowproceedtogivethedetailedgroundsforourdecision.

Ourgrounds

Theapplicableprinciples

28Beforeexaminingeitheroftheissuessetoutabove(at[25]),westatebrieflytheapplicableprinciples.First,atthe
broadestlevelofabstraction,theobjectofanawardofdamagesistocompensatetheplaintiffforthedamageithassuffered
(seethedecisionofthiscourtinCharteredElectronicsIndustriesPteLtdvComtechITPteLtd[1998]2SLR(R)1010
("Chartered")at[16]).

29Turningmorespecificallytotheissueathand,wenotethereis,understandably,nouniversalrulefortheassessmentof
damages(seethedecisionofthiscourtinThe"PioneerGlory"[2002]1SLR(R)232("ThePioneerGlory")at[47]).Thetypical
approach,however,istoequatethedamageswiththevalueofthegoods(seeCharteredat[18]),ie,Damages=Valueofthe
Goods.Theremaybecaseswheretheplaintiffisalsoallowedtorecoverconsequentiallossessuchaslossofprofitsand
lossesincurredbybeingdeprivedoftheuseofthegoods(Charteredat[19]),ie,Damages=ValueoftheGoods+
ConsequentialLosses.

30How,then,isthevalueofthegoodsdetermined?Typically,courtslooktothemarketvalue(seeCharteredat[18]).The
mostcommonlycitedjustificationforthemarketvalueruleisthatitisthebestapproximateofthelosssufferedbytheplaintiff
whohasbeendeprivedofhisgoods(seeCharteredat[18]GaryChanKokYewandLeePeyWoan,TheLawofTortsin
Singapore(AcademyPublishing,2011)("TheLawofTortsinSingapore")atpara11.054andHarveyMcGregor,McGregoron
Damages(Sweet&Maxwell,19thEd,2014)("McGregoronDamages")atpara36006).Themarketpriceistypically
determinedasatthedateofconversion(seeTheLawofTortsinSingaporeatpara11.055),orasinthepresentcase,where
goodsareconvertedintransit,atthedateofexpecteddelivery(seethedecisionofthePrivyCouncil(onappealfromthe
SingaporeCourtofAppeal)inThe"JagShakti"[19851986]SLR(R)448at[13]).Needlesstosay,todetermineamarketvalue,
onemustfirstascertainifamarketexists."Market"hasbeenvariouslydefined,asfollows:

(a)Thereisamarketifthereisawillingsellerandwillingbuyerafternegotiations,notwithstandingthatthecircleofbuyers
andsellersmaybesmalland/orthatgoodsmaynotbeimmediatelydelivered(seetheGDat[40]and[53]).

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(b)Theremustbeasufficientnumberoftraderswhoareintouchwitheachother.Inotherwords,theavailabilityofbuyers
andsellers,andtheirreadycapacitytosupplyortoabsorbtherelevantgoodsisthebasicconceptofan"availablemarket".
Thereisnoneedtoaddtothisthetestofapriceliabletofluctuationsinaccordancewithsupplyanddemand,asoccursin
officialexchangesorcertaincommoditymarkets(seeBenjamin'sSaleofGoods(MichaelGBridge,gened)(Sweet&Maxwell,
9thEd,2014)atpara16066).

(c)Theremustbeareasonablyavailablesupplyofgoodsandareasonablyavailablesourceofdemandforsuchgoods(see
McGregoronDamagesatpara23007,citingtheEnglishHighCourtdecisionofM&JMarineEngineeringServicesCoLtdv
ShipshoreLtd[2009]EWHC2031(Comm)).

31Wefindthatthegistacrossthesedefinitionsis,toborrowtheJudge'swords,thatthereisawillingsellerandwillingbuyer
afternegotiations.Thisrulesoutcommandeconomiesormonopoliesinwhichtherearenonegotiationstospeakof(althoughit
maywellbethecasethatthepricewhichisfixedineitherofthesetwoparticularcontextswouldnotonlyconstitutea"market"
priceofsortsbutwouldalso(andmoreimportantly)bethepricewhichthecourthasrecoursetoasameasureofreplacement
cost).However,thatdoesnotmeanonlycompletelyfreemarketsarerelevant.Itistritethatcompletelyfreemarkets(wherein
thereisunrestrictedcompetitionbetweensellersandbuyershaveperfectinformation)arealmostnonexistentinreality.Market
imperfectionsmaybetoleratedsolongasthecorefactorswillingness(ofbothbuyerandseller)andtheabilitytonegotiate
arepresent.Oligopolies,forinstance,typicallyconstitutesuch"imperfectmarkets".Thatsaid,wewouldcautionagainsta
preoccupationwithlabels.Inthepresentcase,forexample,wenotetheAppellant'sargumentthatthemarketwas
"oligopolistic"mayhavebeenpredicatedonamisunderstandingofwhatanoligopolisticmarketinfactis.Thecruxisnotwhat
labelcanbeascribedtothemarketbut,rather,whetherthecorefactorsreferredtoabovearepresent.

32Tothis,weaddafurtherpoint:themarketmustbearelevantmarket.Bythiswemeanthattheclaimantmustshowthatit
isaparticipantoftypicallyasellerinthatmarket.Thisiseminentlysensibleinthelightofthecompensatoryaimofawarding
damages.Thatistosay,aclaimantshouldneverbeallowedtorelysimplyon"someothermarketoutthere"typically
somewheremuchfurtherdownthesupplychainwhereingoodsaretradedatavastlymoreexpensiverate.Thesimplereply
tosuchanargumentisthatthatparticularmarketisirrelevantastheclaimantwouldneverbeabletofetchthatsortofprice
wereittosellthegoodsinthecourseofitsbusiness.Inmostcases,thedichotomybetweensuccessive"markets"withina
supplychainwouldbeeasytoenvisionaseachstepinthesupplychainwouldinvolvesomeformof"valueadding"tothegood
whichmaymanifestphysically(suchasrepackagingthegoodintoamoreconvenientform).Thatisnottosaythatwhereno
physicalchangetothegoodtakesplace,thevariousmarketscollapseintooneanother.Rather,asupplychainmightstillbe
necessitatedbythegoodwillandnetworksofthevariouscompaniesinvolvedalongthechain.Forinstance,thosefurtherup
thesupplychainsimplysourceforthegoodsinbulkandtransportthemtothoselowerdownthesupplychain.Thelatterthen
leverageontheirextensivenetworksofclientsclientspresumablylocatedwherethegoodsarehardertocomebyandsellto
theseclientsatasignificantlymarkedupprice.

33Wherethemarketpricecannotbedetermined,thevalueofthegoodscanbedetermined,instead,bythecostof
replacement,whichistypicallythepriceatwhichthegoodswerebought(seeCharteredat[18]).Wherenomarketexistsin
whichtoreplacethegoods,theirvalueistobefixedatwhattheplaintiffcouldgetbysaletoasolventbuyer(seeCharteredat
[18]).

Issue1

34Weansweredthisissueintheaffirmative.Wefound,withrespect,thattheJudgehaderredinfindingthattherewasa
marketfortheconvertedriversandfortworeasons.First,itwasdifficulttoconclude,fromMrLoganathan'stablealone(see
aboveat[11]),thattherewasanymarketforriversandinPortBlairinthefirstweekofOctober2011.Secondly,evenif
MrLoganathan'stablesufficed,themarketevincedwasanirrelevantmarket.

35Turningtothefirstpoint,wepausetoacknowledgethatthiswasacaseinwhichtherewerecrucialpiecesofevidence
missing.First,MrLoganathan'stable(seeaboveat[11])wasincompleteinthatitdidnotincludesalesoflargerquantitiesof
riversand(ie,inthehundredsorthousandsofMT).TheJudgedidnotappearperturbedbythisas,shenoted,MrLoganathan
"had,inhistestimony,atleastattemptedtoexplainthereasonswhytherewouldbenosignificantpricingdifference"between
bulkpurchasesandsmallerpurchases(seetheGDat[71]).Insupportofthatproposition,theJudgereferred(inafootnote)toa
portionoftheNotesofEvidencedocumentingthereexaminationofMrLoganathan,whichreadsasfollows:
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Q:MyLearnedFriendbroughtyouaskedyouwhy[FTPL]hasnotgiventhepricingofriversandfromothersellersinPort
Blair.Canyouexplainwhy?

A:Icannotgetdetailsfromothercompetitors.

TheportionciteddidnotseemtostandforthepropositionthattheJudgestated.Anotherportionofthetranscript,which
documentsasegmentofthecrossexaminationofMrLoganathan,however,didseemrelevant.Itreadsasfollows:

Q:Youaretalkingaboutexyard.Myquestionis,ifsomeoneweretobuy4300MTexshipatPortBlair,thepricewouldbe
significantlylowerthantheoneyouquoted?

A:Therewouldbeasmalldifference.

Q:Inotherwords,yourpriceisforsellingexyardinsmallparcels?

A:Retailsales.Somewholesalealso,100MT,200MT.

Q:Whichyoudidnotproducedocumentson.

A:Thosearecreditsales.Wewanttoonlyshowcashsaletransactionstoreflectthemarketrate.

36OnMrLoganathan'saccount,thereasonhedidnotprovidefiguresforbulksaleswasthattheywerecreditsales,which
werepresumablyatalowerprice,ascanbeinferredfromhisreply"[t]herewouldbeasmalldifference"tothequestion"the
pricewouldbesignificantlylower...?".However,thisseemedatoddswithwhathestatedduringreexamination.Whenasked
whyhedidnotincludedocumentsoncreditsales,MrLoganathanrespondedthat"[p]ricesforcreditsalewouldbe2or3%
more.Becausethosearecreditsales".NotonlyhadMrLoganathannotexplainedwhybulkpurchaseswerepricedsimilarlyto
smallerpurchases,hisevidencewascontradictoryfirstindicatingbulkpurchaseswerecheaperyetlaterstatingtheywere"2
or3%"moreexpensive.Furthermore,hedidnotclearlyexplainwhybulkpurchasesweremore(orless)expensive(unlessit
wasthecasethatallbulkpurchaseswerecreditsales).Also,ifitwasthecasethathehadaccesstofurtherrecordsofsalesofa
similarvolumetotheconvertedriversand,notwithstandingthattheywerecreditsales,itwashighlypeculiarthathehad
chosennottoincludetheminhisevidence.Woulditnothavebeenfarmoreconvincingifhehadincludedrecordsofthose
salesandthenexplainedthemawayasanomalies?

37ThesecondpeculiarpointaboutMrLoganathan'stablewasthatitonlydocumentedFTPL'stransactions(whereinFTPL
wastheseller).TheJudgefoundthattheRespondent's(orFTPL's)inabilitytoobtainfurtherfiguresfromothersellerswas
understandablegiventhat"competitorswouldloathecooperatingwith[theRespondent]byrevealingtheirpricing"(seetheGD
at[71]).Insupportofthisproposition,theJudgereferredonceagaintothesameportionoftheNotesofEvidencedocumenting
thereexaminationofMrLoganathan(seeaboveat[35]).TheclosestMrLoganathancametoexplaininghisinabilitytoobtain
pricesfromothercompetitorswashisstatementthat"Icannotgetdetailsfromothercompetitors"(seeaboveat[35]).Wefoundit
difficulttodiscernfromthissinglestatementanyindicationthattheindustrywasofsuchacompetitiveandsecretivenaturethat
competitors'priceswereimpossibletoascertain.

38Thesetwopointsmentionedthusfarpertaintothedifficultieswehadwiththeevidencethatwasbeforethecourt.That
said,wealsohaddifficultywithevidencethatwasnotbeforethecourtbut,plainly,shouldhavebeen.Thisincludedthe
following:

(a)ThefirstdifficultypertainedtothepriceatwhichtheRespondentdisposedofthefirstshipmentofriversand.Itwasclear
thatthe4,300MTofriversandinquestion(whichconstitutedthesubjectmatterofthepresentproceedings)wasthesecond
shipment.Noevidencewasledtoshowwhetherthefirstshipmenthadbeensold,and,ifsold,towhomandatwhatprice.In
fact,MrLoganathan'sevidenceseemedtoimplythatthefirstshipmenthadbeensoldtoFTPL.Howeverthepriceofthissale
wasnotexhibitedinevidence.

(b)TheseconddifficultypertainedtothepriceatwhichtheRespondenttypicallysoldriversandontoFTPL.Asstatedby
MrLoganathan,FTPLtypicallyboughtriversandfromtheRespondentatPortBlairandwouldthereafterselliton.Notonlywas

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therenoevidenceastothepriceatwhichtheRespondentsoldriversandtoFTPL,MrRajendhranathansweredinthenegative
duringcrossexaminationwhenaskedifhehadprovidedanydocumentstoshowthetransactionsbetweentheRespondent
andFTPL.

(c)ThethirddifficultypertainedtothepriceatwhichtheriversandwaseventuallysoldbytheAppellant'ssubsidiary.Notonly
wastheAppellant'sevidenceratherconfusinginthatitfirstclaimedithadsoldoffthesandbeforeittookthepositionthatthe
sandwassoldoffbyitssubsidiary(whichboreaverysimilarname),italsofailedtoprovideanyinformationonthetermsofthat
sale,saveastostatethat"theCargoisnotvaluableandiseasilyreplaceable"(seeaboveat[8]).

Inshort,thereweresignificantlapsesintheevidenceadducedbybothparties.Theselapsesnotonlywenttotheburdenof
proofbutalsosignificantlycompromisedeachside'scasetheory.Nevertheless,wereturntothepointathandwas
MrLoganathan'stable(seeaboveat[11])sufficienttoestablishthepresenceofamarketinPortBlairattherelevanttime?For
thereasonssetoutaboveboththedifficultieswehadwiththetableandthemeagreexplanationsprofferedinrelationtothe
lapsesinevidencewefounditwasnot.Onthisbasisalone,wefoundourselvescompelledtoallowtheappeal.

39Nevertheless,evenifitcouldbesaidthatMrLoganathan'stableconstitutedsufficientevidenceofamarket,therewasa
moreimportantpointtonoteitwas,atbest,evidenceofanirrelevantmarket.

40Thereappearedtobeatleastthreedifferent"markets"intheriversandindustryinthecontextofthepresentcase,atleast
asdepictedbythelimitedevidencepresentedbeforetheAR(and,byextension,beforetheJudgeandthiscourt).First,furthest
upthesupplychain,therewasthe"wholesalemarket".Inthismarket,companiessuchastheRespondentpurchaseriversand
fromcompaniessuchasMarineAlliance.Thesesalesoccurinhighquantities(hundredsorthousandsofMT)atrelativelylow
prices(S$6.50perMT,excludingportandfreightcharges).Secondly,attheotherendofthesupplychain,therewasthe"retail
market",wherebycompaniessuchasFTPLselltheriversandontobuyers(thelikesofSankarContractor&Constructionand
BinuKumar).Thesesalesoccuratlowquantities(feworseveralMT)butatrelativelyhighprices(US$46.85perMT).Thirdly,
therewasthemarketthatconnectedtheretailerstothewholesalers.Forinstance,theRespondenttypicallysoldtheriversand
itpurchased(frompartiessuchasMarineAlliance)toFTPL.ThesalewouldtakeplaceatPortBlair.However,asnotedabove,
nopricesweredisclosedinrelationtosuchsales.Theoverallsupplychaincanbedescribedasfollows:

OriginalsellerTheRespondentFTPLEventualcustomer

41TherelevantmarketinthiscasewastheoneconnectingthoseinthepositionoftheRespondenttothoseinthepositionof
FTPL.Notonlyhadnopricesbeendisclosedinrelationtotransactionsinthisparticularmarket,therewasnoevidenceatall
thatsuchamarketevenexisted.Infact,theRespondent'ssaleofsandtoFTPLmightjusthavebeenapracticeuniquetothe
RespondentandFTPL,wherebytheRespondentsimplyactedasacarrierofgoods.Notonlydidthisseemapparentfromthe
Respondent'sname,FairmacsShippingandTransportServicesPteLtd(ascontrastedwithFTPL'sname,FairmacsTrading
CompanyPteLtd,andthelatter'sroleasthetradingarmofthe"Fairmacsgroup"ofcompanies,seeaboveat[10]),
MrRajendhranathseemedtoimplyasmuchduringcrossexamination.Therelevantportionofthetranscriptreadsasfollows:

Q:Canyouconfirmthat[theRespondent]hasbeendealinginsandformanyyearsbeforethisshipment?

A:No.[TheRespondent]mayhavebeendealingasacarrier,notabuyer.[TheRespondent]hasbeenbringingsandfrom
mainlandIndiaformanyyearsonlyasacarrier,notasabuyer.

...

Q:So[theRespondent]couldhaveboughtsandfromothersellersinPortBlair?

A:[TheRespondent]?No.[TheRespondent]hasnotboughtsandpreviously.WhatIamtryingtosay,earliershipmentfrom
mainlandIndia,[theRespondent]wasonlythecarriertobringthecargowhichmaybelongtootherpartiesincluding[FTPL].

42TheportioncitedabovehintedthattheRespondentwassimplyacarrieroftheriversand(asopposedtobeingapartof
thesupplychain).WhatwasconfusingaboutMrRajendhranath'sevidencejustquotedabovewashisseemingdenialthatthe
Respondenthadeverboughtriversand(andthattheriversandseeminglybelongedatalltimestoFTPL).Leavingthis
aside,thepointwewishtomakeisthattheRespondentcouldneverhavesoldthe4,300MTofriversandconvertedattheprice

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ofUS$46.85perMT.ThismuchwasevenreadilyacceptedbycounselfortheRespondentduringtheoralhearing.Any
transactioninvolvingtheriversandinquestionmayhaveconstitutedadifferentstageofthesupplychainoritmaynoteven
havebeenpartofthesupplychain.TheburdenofproofwasontheRespondenttoestablisharelevantmarket,and(inso
doing)itsroleinthesupplychain.Itfailedtomeetthisburden.Thiswassufficienttodisposeofthematter.Buttocompletethe
picture,weobservedfurtherthattheonlyevidencetheRespondentdidplacebeforethecourtcastdoubtonitsabilitytosellthe
riversanditprocuredtoanyoneotherthanFTPL.ItappearedtobemoreofacarrierforFTPL(andFTPLalone)thananything
else.Ifthiswerethecase,howcoulditthenbesaidthatthedamageitsufferedshouldbecompensatedonthebasisof
US$46.85perMT?Suchcompensation,ifawarded,would,inthesecircumstances,surelyhaveconstitutedawindfall.

43OnthebasisthattheRespondenthadfailedtoprovetheexistenceofamarketonabalanceofprobabilities,wefoundthat
thereplacementcostwasaviablealternativemethodtoassessdamages.ItwasundisputedthatUS$62,950wastheamount
theRespondenthadactuallypaidforthesand.ThiswasalsotheamounttheARarrivedat.WethereforerestoredtheAR's
award.

Issue2

44Aswefoundtherewasno(relevant)markettobeginwith,therewas,strictlyspeaking,noneedtoconsiderthisparticular
issue(ie,marketvalue).Asmentionedabove,inthelightofthedearthofevidenceadducedtoestablishamarket(letalonea
marketvalue),wepreferredthecostofreplacementmeasure.Onthisnote,andforcompleteness,weaddresstheparties'
relianceonFurness(seeaboveat[21]and[24]).

45InFurness,thevictim'sdamageswereinitiallyassessedonthebasisofthe"wholesaleprice"oftheconvertedgoods.To
recapitulate,theplaintiffAdriumIndustrieswasinthebusinessofsellingtothewholesalerinaparticularnoveltygoods
industry(analogoustoMarineAlliance'spositioninthiscase).Onappeal,theSupremeCourtofVictoriaAppealDivisionfound
thatthejudgebelowhaderredinadoptingthe"wholesaleprice"and,instead,assessedtheplaintiff'sdamagesonthebasisof
theamountitpaidforthegoods,ie,thereplacementcost.Thereasonforthiswasthat"theonlyevidenceaboutthemarket[in]
whichtheconvertedgoodswerecapableofbeingpurchasedby[AdriumIndustries]wasthemarketfromwhichithadoriginally
purchasedthem[][t]herewasnoevidencewhichjustifiedanawardofdamagesbyreferencetothewholesaleprice"(at675).

46AswasthesituationinFurness,noevidencewasledastothemarketinwhichtheRespondentwassellingorintendingto
selltheconvertedgoods.ThecourtinFurnessappearedtoarriveatitsconclusionbyreasoningthat"marketvalue"couldrefer
eithertothemarketintowhichthegoodwasgoingtobesoldbythevictim(whichseemstocorrespondtomarketprice)orthe
marketfromwhichthegoodwasboughtbythevictim(whichcorrespondstocostofreplacement).InFurness,thecourtfound
thelattertobemoreappropriateinthelightofthedearthofevidenceoftheformer.

47Ourdeterminationofthesecondissuealsoledtotheconclusionthatthecostofreplacementwastheappropriate
measureofdamagestobeadoptedinthiscase.Further,asthepurchasefromMarineAlliancewasinUSDollars,itwas
appropriateforthedamagestobeawardedinthatcurrency.

Conclusion

48Forthereasonssetoutabove,weallowedtheappealandrestoredtheAR'saward.Wealsoawardedcostshereand
belowtotheAppellantfixedatS$20,000,excludingreasonabledisbursements.

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