Case Details
- Citation: [2010] SGCA 36
- Court: Court of Appeal of the Republic of Singapore
- Date: 18 October 2010
- Coram: Chao Hick Tin JA; Andrew Phang Boon Leong JA; V K Rajah JA
- Case Numbers: Civil Appeals Nos 169 and 171 of 2009
- Title: MFM Restaurants Pte Ltd and another v Fish & Co Restaurants Pte Ltd and another appeal
- Appellants/Applicants: MFM Restaurants Pte Ltd and Dickson Low
- Respondents: Fish & Co Restaurants Pte Ltd and another
- Legal Areas: Contract; Damages; Causation; Remoteness of damage
- Procedural History: Appeal from the High Court Judge’s assessment of damages in Fish & Co Restaurants Pte Ltd v MFM Restaurants Pte Ltd and another [2010] 1 SLR 1104
- Judgment Length: 48 pages; 31,713 words
- Counsel for Appellants: Lau Kok Keng and Wendy Low Wei Ling (Rajah & Tann LLP)
- Counsel for Respondent: Tony Yeo Soo Mong and Rozalynne Asmali (Drew & Napier LLC)
- Key Contractual Instrument: Settlement Deed dated 27 April 2005 (including “Pans”, “Slogans”, “Phrases”, and “Sauces” undertakings)
- Key Background Litigation: Respondent sued Dickson for breach of non-competition/confidentiality obligations; parties later settled
- Notable Timing: Alleged breaches began soon after operations at Plaza Singapura (20 May 2005); proceedings commenced (20 September 2005); consent judgment entered (27 November 2006); injunction and damages to be assessed
- Reported Related Decisions: [2010] 1 SLR 1104 (High Court decision giving rise to these appeals)
Summary
This Court of Appeal decision concerns the assessment of damages arising from breaches of a settlement deed entered into after litigation over alleged misuse of confidential information and breach of non-competition obligations. The respondent, Fish & Co Restaurants Pte Ltd (“Fish & Co”), owned a chain of seafood restaurants branded “Fish & Co”. The appellants were MFM Restaurants Pte Ltd (“MFM”), which operated “The Manhattan Fish Market”, and Dickson Low, a former employee of Fish & Co. The settlement deed imposed multiple restrictive undertakings designed to preserve the “Fish & Co concept”, including undertakings relating to serving pans, slogans/jingles, certain phrases, and sauces.
After MFM commenced operations in Singapore near Fish & Co’s outlet, Fish & Co alleged that the appellants breached the settlement deed almost immediately. The parties entered into a consent judgment on liability and injunctive relief, with damages to be assessed. On appeal, the Court of Appeal emphasised that damages assessment is not mechanistic: while legal rules guide the analysis, the application—particularly causation and remoteness—requires careful evaluation of the factual matrix. The Court ultimately upheld the High Court’s approach to causation and damages, rejecting the appellants’ arguments that Fish & Co’s losses were unconnected with the breaches, and addressing the subsidiary question of remoteness in the post-breach period.
What Were the Facts of This Case?
Fish & Co owned and operated a chain of seafood restaurants under the “Fish & Co” brand. Dickson Low had been employed by Fish & Co and, under his employment contract, agreed to confidentiality and non-competition obligations. In particular, he undertook not to wilfully divulge confidential information to outside parties and not to help set up competing restaurants during his employment or for two years after resigning. After Dickson resigned, he became involved in setting up MFM’s business. The first MFM restaurant opened in Malaysia in 2002, and additional restaurants followed.
On 30 March 2004, Fish & Co commenced proceedings against Dickson alleging breach of the non-competition obligations, including allegations that Dickson copied Fish & Co’s concepts for use in MFM restaurants. Dickson denied the allegations. During the course of the trial, the parties settled. A settlement deed was recorded on 27 April 2005. Although MFM and its Malaysian counterparts were added as parties to the settlement deed, they were not original parties to the suit. Fish & Co’s stated rationale for including MFM was to ensure that both Dickson and MFM were prevented from employing Fish & Co’s concepts.
The settlement deed contained multiple undertakings. For present purposes, the undertakings included: (i) a “Pans undertaking” not to use serving pans identical and/or similar to those used by Fish & Co within a defined period; (ii) a “Slogans undertaking” not to use slogans and/or jingles identical to or confusingly similar to Fish & Co’s; (iii) a “Phrases undertaking” not to use certain words and/or phrases described in a schedule; and (iv) a “Sauces undertaking” requiring MFM to use a completely different garlic lemon butter sauce (and related sauces) from those used by Fish & Co. The undertakings were to take effect at different times after the deed date.
After the settlement deed, MFM began operations at Plaza Singapura on 20 May 2005, located approximately 0.28 km from Fish & Co’s “Glass House” outlet on Penang Road. Fish & Co alleged that despite the undertakings, MFM breached the deed almost immediately. The alleged breaches included: using a slogan (“One bite and you’re hooked”) on menus; using phrases (“Garlic Lemon Butter”, “Lemon Butter”, and “Creamy Garlic Lemon”) on its website; failing to use completely different sauces; and using serving pans similar to Fish & Co’s pans. Fish & Co commenced proceedings on 20 September 2005 seeking an injunction and damages for breach of the settlement deed.
By around 8 November 2005, MFM discontinued use of the disputed slogan and phrases. On 27 November 2006, at the start of trial, the parties entered into a consent judgment: an injunction was granted on agreed terms, and damages were to be assessed. The consent judgment specified, among other things, that MFM would be restrained from using similar serving pans, from using the relevant slogans/jingles, and from using the specified phrases, with certain effective dates. For the sauces undertaking, the injunction took effect from 11 January 2007. Importantly, for the purposes of the damages assessment, Fish & Co did not claim damages for breaches alleged to have occurred after January 2007, thereby focusing the damages inquiry on the pre- and immediate post-breach period.
What Were the Key Legal Issues?
The central legal issues concerned the assessment of damages for breach of contract—specifically, whether Fish & Co’s claimed losses were caused by the appellants’ breaches of the settlement deed. While the appellants’ breaches were described as “clear” and “continuing”, the appellants argued vigorously that Fish & Co’s losses were unconnected with those breaches. Much of the appeal therefore turned on causation: whether the breaches were the legal cause of the respondent’s financial decline, and if so, how that causation should be reflected in the quantum of damages.
A second issue was the appellants’ “fallback” argument that even if causation were established, Fish & Co was the “main author” of its own loss because it was already experiencing a decline in sales independent of the breaches. This argument, in substance, sought to reduce or cap damages by attributing the loss to factors other than the contractual breaches.
Third, although described as subsidiary, the appellants raised an argument relating to remoteness of damage in the post-breach situation. They contended that losses allegedly caused after the breaches were too remote. The Court of Appeal noted that this issue raised a potential divergence between Singapore authority and a recent House of Lords decision, and because remoteness principles are of continuing importance for future cases, the Court addressed the legal question even if it was not the primary focus of the appeal.
How Did the Court Analyse the Issues?
The Court of Appeal began by framing damages assessment as a non-mechanistic exercise. While legal rules exist to guide the inquiry, the application of those rules to the facts is often difficult. The Court’s introductory discussion is significant for practitioners because it signals that the court will not treat causation and quantification as purely mathematical exercises. Instead, the court must evaluate the evidence and the commercial realities of how breaches of contractual undertakings affect market behaviour, customer choice, and sales performance.
On causation, the Court considered the appellants’ argument that Fish & Co’s loss was unconnected with the settlement deed breaches. The Court’s approach reflects the principle that damages for breach of contract are intended to place the innocent party, so far as money can, in the position it would have been in had the contract been performed. However, that objective depends on establishing that the breach caused the loss claimed. In a competitive retail environment, sales decline can stem from multiple causes, including general market conditions, consumer preferences, and the presence of competitors. The Court therefore required a careful link between the specific breaches (such as use of prohibited slogans/phrases, similar pans, and non-compliant sauces) and the respondent’s sales outcomes.
The Court also addressed the appellants’ contention that Fish & Co was already suffering from declining sales. This “main author” argument effectively sought to break the chain of causation or reduce damages by attributing the decline to pre-existing trends. The Court’s analysis indicates that where a claimant’s business is already in decline, the court must distinguish between the portion of loss attributable to the breach and the portion that would have occurred anyway. The evidential challenge is substantial: parties must show, through sales data, timing, and other relevant indicators, what would likely have happened absent the breach. The Court’s reasoning underscores that causation is not presumed merely because a breach occurred; it must be supported by evidence that the breach materially contributed to the loss.
On remoteness, the Court considered whether losses arising after the breaches were too remote. The Court noted that remoteness principles have long-standing foundations in contract law and that a House of Lords decision had introduced a different legal orientation in England. The Court treated this as a matter of legal importance for Singapore’s future cases, because if the House of Lords proposition were correct, it would require a radical change to the law endorsed by Singapore courts for more than a century and a half. The Court therefore engaged with the legal principles governing remoteness, including the foreseeability-based framework traditionally applied in contract damages, and evaluated whether the post-breach losses fell within the scope of losses that the parties could reasonably contemplate as consequences of breach at the time of contracting/settlement.
Overall, the Court’s analysis combined doctrinal contract principles with a fact-intensive assessment of how breaches affected the respondent’s business. The Court’s emphasis on fairness and justice for future litigants is also apparent: because damages assessment is often contested, the Court sought to clarify the proper approach to causation, apportionment, and remoteness so that future parties can structure evidence and arguments more effectively.
What Was the Outcome?
The Court of Appeal dismissed the appellants’ appeals against the High Court’s assessment of damages. In doing so, it accepted the High Court’s approach to causation and the quantification of damages, rejecting the appellants’ arguments that Fish & Co’s loss was unconnected with the breaches or that Fish & Co’s own conduct was the primary cause of the decline such that damages should be substantially reduced.
The practical effect of the decision is that Fish & Co retained entitlement to damages assessed for the period relevant to the breaches, notwithstanding the appellants’ attempts to limit liability by invoking causation, apportionment, and remoteness. The decision also reinforces that contractual undertakings in settlement deeds—particularly those designed to protect brand concepts and customer-facing elements—can give rise to meaningful monetary exposure when breached.
Why Does This Case Matter?
This case is important for lawyers and law students because it illustrates how Singapore courts handle damages assessment in the context of settlement deeds and competitive business settings. First, it demonstrates that even where breaches are “blatant”, the court will still scrutinise causation and require a defensible evidential basis linking the breach to the claimed loss. This is a reminder that damages are not automatic; they must be proved within the legal framework of contract damages.
Second, the decision highlights the evidential and analytical difficulties of apportioning loss where the claimant’s business is already experiencing decline. Practitioners should take from this that arguments about pre-existing trends must be supported by credible evidence and a coherent methodology for separating “but for” loss from loss that would have occurred anyway. Without such a methodology, courts are likely to be reluctant to reduce damages on speculative grounds.
Third, the Court’s engagement with remoteness—particularly its attention to potential divergence from English law—shows that Singapore courts will treat remoteness as a doctrinal issue with long-term implications. For future cases, the decision provides guidance on how Singapore courts may approach post-breach losses and the extent to which foreseeability and contractual contemplation constrain recovery.
Legislation Referenced
- No specific statutory provisions were identified in the provided judgment extract.
Cases Cited
Source Documents
This article analyses [2010] SGCA 36 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.