The limits of reliance on reliance damages? Case comment: Liu Shu Ming and another v Koh Chew Chee

In Liu Shu Ming v Koh Chew Chee [2023] 1 SLR 1477 (“Liu Shu Ming (AD)”), the Court considered two questions on damages. These were, firstly, when a claimant would be able to claim reliance damages and secondly, whether a claimant would be able to claim reliance damages in the alternative to expectation damages. After considering these two issues, the Court seemingly expressed a preference for limiting claims for reliance damages to where it would be “impossible” or “extremely difficult” to prove expectation damages and not permitting claims for reliance damages in the alternative to expectation damages, or at the very least only where the claimant pleads such a case as early as possible. This case note addresses three questions that emerge following the Court’s remarks on these issues: (a) whether reliance damages should be available as of right; (b) whether the two-pronged strategy should be permissible; and (c) how claimants should draft their pleadings to maximise recovery following the potential difficulties in claiming for reliance damages following Liu Shu Ming (AD). In response, this note argues that it may be desirable to implement a threshold before allowing claimants to claim reliance damages and discusses some potential options. Secondly, this note argues that a claimant should only be permitted to pursue reliance damages in the alternative to expectation damages where the claimant pleads his case in a way that fulfils two conditions, as explained below. Lastly, if it becomes more difficult for claimants to claim reliance damages following Liu Shu Ming (AD), this note recommends that claimants maximise their chances of obtaining effective compensation through more detailed and well-substantiated pleadings for expectation damages.