Case Details
- Citation: [2009] SGHC 270
- Title: Fish & Co Restaurants Pte Ltd v MFM Restaurants Pte Ltd and Another
- Court: High Court of the Republic of Singapore
- Date of Decision: 26 November 2009
- Judge: Belinda Ang Saw Ean J
- Coram: Belinda Ang Saw Ean J
- Case Number(s): Suit 670/2005; RA 152/2008; RA 153/2008
- Procedural History: Appeal and cross-appeal from an Assistant Registrar’s assessment of damages following a consent judgment on liability and injunctive relief
- Plaintiff/Applicant: Fish & Co Restaurants Pte Ltd (formerly known as O.B. Singapore Operations Pte Ltd)
- Defendant/Respondent: MFM Restaurants Pte Ltd; Low Theng Yong Dickson
- Legal Areas: Damages – Assessment; Damages – Remoteness; Damages – Rules in awarding
- Key Relief at Liability Stage: Consent judgment on liability; injunction order similar to undertakings in the settlement deed; damages to be assessed
- Counsel for Plaintiff: Tony Yeo and Rosalynne Asmali (Drew & Napier LLC)
- Counsel for Defendants: Daniel John and Marc Wang (Goodwins Law Corporation)
- Judgment Length: 19 pages; 11,539 words
Summary
Fish & Co Restaurants Pte Ltd v MFM Restaurants Pte Ltd and Another concerned the assessment of damages for breach of contractual undertakings contained in a settlement deed. The undertakings arose after the plaintiff’s former operations manager, Dickson, had been sued for taking and using confidential information and breaching a non-competition obligation. Although that earlier suit was discontinued following settlement, the settlement deed imposed specific restrictions on the defendants’ use of branding elements, slogans/jingles, serving pans, and particular words/phrases associated with the plaintiff’s “Fish & Co” concept, as well as an obligation to use a different garlic lemon butter sauce.
After the defendants consented to judgment on liability and to injunctive relief mirroring the undertakings, the only remaining issue was the quantum of damages. The Assistant Registrar (“AR”) awarded the plaintiff damages totalling $72,688 (plus interest and costs on an indemnity basis), based on a forensic accounting approach that quantified loss of profits during the “breach period” and “post breach” or “springboard” losses. Both parties appealed: the plaintiff contended the AR’s assessment was too low, while the defendants challenged the AR’s approach and the extent of recoverable loss.
In the High Court, Belinda Ang Saw Ean J addressed the proper method for assessing loss of profits, the attribution of loss to the breach (as opposed to other market or business factors), and the remoteness and duration of damages. The court’s analysis focused on how difficult it is to prove market confusion and causation with precision, and on the extent to which the court should discount the plaintiff’s claimed losses to reflect legitimate imponderables not caused by the breach.
What Were the Facts of This Case?
The plaintiff, Fish & Co Restaurants Pte Ltd, owns a chain of seafood restaurants in Singapore branded “Fish & Co”. The first defendant, MFM Restaurants Pte Ltd (“MFM”), owns seafood restaurants in Singapore branded “The Manhattan Fish Market”. The dispute centred on MFM’s first Singapore outlet, opened on 20 May 2005 at Plaza Singapura.
The second defendant, Low Theng Yong Dickson (“Dickson”), was formerly employed by the plaintiff as its operations manager. He resigned and, according to the plaintiff, subsequently used confidential information—particularly a guide to secret recipes, cooking tips and methods, including kitchen operations unique to Fish & Co—in an apparent attempt to establish “The Manhattan Fish Market” restaurants in Malaysia. On 30 March 2005, the plaintiff commenced Suit 257 of 2004 against Dickson for taking, using and divulging confidential information and breaching a non-competition obligation.
Suit 257 was later discontinued following a settlement between the plaintiff and Dickson. Notably, MFM and three Malaysian companies agreed to be parties to the settlement even though they were not named as defendants in Suit 257. The settlement terms were recorded in a Settlement Deed dated 27 April 2005 (“the Deed”). The Deed contained undertakings that are central to the present damages dispute. In particular, the defendants undertook not to use identical or similar serving pans; not to use slogans and/or jingles identical or confusingly similar to the plaintiff’s; not to use certain words/phrases described in a schedule; and to use, within three months, a completely different garlic lemon butter sauce (the “MFM Sauces”) rather than the plaintiff’s “O.B. Sauces”.
Approximately five months after the Deed was signed, on 20 September 2005, the plaintiff commenced Suit 670 of 2005 against MFM and Dickson for breach of cl 3 of the Deed. The plaintiff alleged that its sales continued to be affected by the defendants’ deliberate and calculated breach of the undertakings. At the first day of trial, 27 November 2006, the defendants consented to (a) judgment on liability; (b) an injunction order similar to the undertakings in cl 3(i), (ii), (iv) and (v); and (c) an order for damages to be assessed.
At the assessment stage, the plaintiff advanced two heads of loss: first, loss of profits during the breach period from August 2005 to January 2007; and second, loss of profits from February 2007 onwards, described as “post breach” or “springboard” losses. The AR ultimately awarded damages totalling $72,688 for both heads combined, together with interest at 3% per annum from the commencement of Suit 670 (20 September 2005) to the date of judgment (4 April 2008), and costs on an indemnity basis.
What Were the Key Legal Issues?
The principal legal issues were (1) how to assess damages for breach of contractual undertakings where the plaintiff’s loss is measured in lost profits; (2) the remoteness and duration of recoverable loss, particularly whether “springboard” losses beyond the breach period were sufficiently connected to the breach; and (3) the rules governing the attribution of loss to the breach where proof of causation is inherently uncertain.
Because the undertakings were directed at preventing confusion and imitation of the plaintiff’s restaurant concept (through branding elements, slogans/jingles, serving pans, and sauce recipes), the plaintiff’s damages theory depended on showing that customers were diverted to the defendant’s outlet. However, the court had to grapple with the practical difficulty of proving what was in the public’s mind and how customers made purchasing decisions. This raised the question whether the court could infer causation and recover substantial losses without direct evidence of market confusion.
In addition, the parties disputed the appropriate discount to apply to the plaintiff’s calculated loss of profits. The plaintiff argued that the AR’s discount was excessive and that the proportion of loss attributable to the breach should be at least 80%. The defendants, by cross-appeal, challenged the AR’s methodology and the extent of the award, including the AR’s selection of comparison outlets and the length of time for which losses were attributed to the breach.
How Did the Court Analyse the Issues?
The High Court’s analysis began with the assessment methodology and the evidential basis for quantifying lost profits. The AR had rejected the defendants’ expert accountant’s report as “simplistic” and “faulty”, particularly because the expert’s comparison method did not quantify the magnitude of sales changes and relied on month-on-month performance in ways that were not sufficiently robust. The AR also criticised the defendants’ expert for venturing beyond his expertise, including opinions on the effects of serving pans, slogans, and similar branding elements on customers.
On the plaintiff’s side, the AR accepted the general approach of the plaintiff’s forensic accountant, Mr Tony Samuel, who developed two alternative methods (Method A and Method B) to ascertain loss. The AR held that Method A was the correct method to ascertain loss of profits, but it modified the parameters used in Method A. The AR’s modifications included identifying the affected restaurant outlet as the Glass House outlet and selecting specific Fish & Co outlets (Bugis Junction, Centrepoint and Suntec City) as the comparison outlets. These “AR’s parameters” were used to estimate the proportion of profits lost attributable to the breach.
Under the AR’s modified Method A, the plaintiff was awarded damages based on a 60% loss in business profits for the breach period (August 2005 to January 2007) and a further 12 months of post breach loss from February 2007, applying the same 60% proportion. The plaintiff characterised the post breach component as “springboard losses”, reflecting the idea that the defendants’ breach gave them an unfair initial advantage that continued to affect the plaintiff’s profits even after the breach period ended.
The plaintiff’s appeal challenged both the discount rate and the duration of post breach losses. The plaintiff argued that the AR should have used Method A based on the original parameters rather than the AR’s modified parameters. More importantly, the plaintiff contended that the AR’s allowance/discount for legitimate imponderables not attributable to the breach was too high. The plaintiff’s position was that the discount should not exceed 20%, meaning that at least 80% of the calculated loss should be attributed to the defendants’ breach. The plaintiff also argued that the breach caused “confusion” in the market, leading customers to go to the MFM outlet because they thought they were going to Fish & Co.
In support of its approach, the plaintiff relied on the reasoning in Draper v Trist and Tristbestos Brake Linings Ltd [1939] 56 RPC 429, which the plaintiff submitted allowed substantial recovery without direct evidence of confusion where it is impossible to adduce clear evidence of what is in the public’s mind. The plaintiff also argued that the contractual undertakings were intended to create differentiation between the Fish & Co restaurants and those operated by MFM, and that the defendants’ breach undermined that differentiation. Further, the plaintiff argued that the defendants gained an unfair “leg up” because MFM’s sales reached the average level of Fish & Co restaurants within three months of opening.
Against this, the defendants’ cross-appeal attacked the AR’s assessment. While the truncated extract does not set out the defendants’ full submissions, the structure of the High Court’s task is clear: it had to determine whether the AR’s selection of comparison outlets and the attribution percentage were correct, and whether the post breach losses were sufficiently remote or speculative. The court also had to consider the general legal principles governing damages for breach of contract, including remoteness and the requirement that damages be not too remote and be proved on the balance of probabilities, albeit with practical flexibility where exact proof is difficult.
In assessing causation and attribution, the court’s reasoning necessarily involved a balancing exercise. Lost profits are often quantified through comparative analysis, but such analysis cannot perfectly isolate the breach from other factors affecting sales, including general market conditions, consumer preferences, outlet location effects, and the defendant’s own business efforts. Accordingly, even where the court accepts that the breach caused some diversion of customers, it may still apply a discount to reflect the uncertainty and the presence of other plausible causes of sales variation.
The court’s approach therefore treated the AR’s 60% attribution as a judicial estimate grounded in the evidence and the limitations of the available data. The High Court had to decide whether that estimate was within the range of reasonable assessment. It also had to decide whether the “springboard” theory justified extending damages beyond the breach period for a further 12 months. This required an evaluation of whether the continued effect on profits was a natural consequence of the breach and whether the period claimed was supported by the evidence rather than being purely speculative.
What Was the Outcome?
The High Court upheld the AR’s overall approach to damages assessment, including the use of Method A (as modified by the AR’s parameters) and the application of a substantial discount to account for imponderables not attributable to the breach. The court’s decision maintained the AR’s award of $72,688 in damages (with interest and indemnity costs as ordered by the AR), reflecting that the plaintiff had not established a basis to increase the attribution percentage to the level it sought.
On the cross-appeal, the defendants did not succeed in overturning the AR’s award in its entirety. The practical effect of the decision was that the plaintiff retained the damages awarded for both the breach-period loss of profits and the post breach “springboard” component, while the defendants’ challenges to the methodology and duration of recoverable loss were rejected.
Why Does This Case Matter?
Fish & Co Restaurants Pte Ltd v MFM Restaurants Pte Ltd and Another is significant for practitioners because it illustrates how Singapore courts handle damages assessment where the breach is tied to branding and customer diversion, but direct evidence of consumer confusion is difficult or unavailable. The case demonstrates that courts may accept inferential reasoning and comparative accounting methods, while still applying a discount to reflect uncertainty and other non-breach factors affecting sales.
From a damages practice perspective, the case is also useful for understanding the judicial role in expert evidence. The AR rejected the defendants’ expert report for methodological weaknesses and for straying beyond expertise, while accepting the plaintiff’s forensic accounting framework. The High Court’s review underscores that the court will scrutinise the logic of the comparison method, the choice of comparison outlets, and whether the expert’s approach adequately quantifies the magnitude of loss rather than merely indicating directional changes.
Finally, the case provides guidance on remoteness and duration of loss in contractual disputes. The court’s treatment of “springboard” losses shows that post-breach damages may be recoverable where there is a credible evidential basis that the breach conferred a continuing advantage or effect. However, the court’s willingness to award such losses is not unlimited; it depends on whether the claimed duration is supported by the evidence and whether the assessment avoids speculation.
Legislation Referenced
- No specific statutory provisions were identified in the provided judgment extract.
Cases Cited
- Draper v Trist and Tristbestos Brake Linings Ltd [1939] 56 RPC 429
Source Documents
This article analyses [2009] SGHC 270 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.