Proving losses - the Ikumene case

In the case of Ikumene Singapore v Leong Chee Leng, the plaintiffs, who were the audited company and its majority shareholder, lost because no duty of care was owed by the auditor to the plaintiff shareholder as regards the statutory audit.

Another reason for the plaintiffs' loss was that they could not prove that their loss was caused by the auditor's negligence. Normally, in the case of negligent misstatement cases eg wrong advice given to a client by a professional, the plaintiff must prove that the wrong information or advice caused his loss. This is shown as follows - if the defendant had provided correct information, the plaintiff would have taken action A, but since wrong information was given, the plaintiff took action B, which turned out to be worse than action A.

In the Ikumene case, the plaintiffs were not able to show how if the auditor was not negligent,and provided them with correct information, they would have avoided losses to the company which were trading losses.