Singapore Comparative Law Review 2018 by The UKSLSS

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Foreword by Chan Sek Keong It has always been a learning experience, and therefore a real pleasure, to write the foreword to the Singapore Comparative Law Review (formerly known as Lex Loci). This annual publication serves as an accessible platform for all law students reading law in English law schools who believe that they have something new or useful to say about the state of the law in both jurisdictions. English law has always been a source of Singapore law from the time English law was introduced in Singapore in 1826. Singapore asserted its independence from English law in 1993 pursuant to the Application of English Law Act 1993, but because of our common link, the current state of English law is still relevant to the betterment of Singapore law in every sphere of legal disputes. Many United Kingdom law students have been, and will continue to be, appointed as Justices’ Law Clerks. In those positions, they have the opportunity to provide their views to the judges they are serving on English law as taught by English law teachers. In the right case, they may make a crucial difference in enabling Singapore judges to establish or apply the correct principles of law for cases in hand. As should be apparent to those who have practised, studied or applied it, the law is a collection of norms, principles, rules and legislative commands objectively determined, that are basically part reason, part justice and fairness, public morality, personal autonomy, part politics. How they are applied in a particular case depends on the interplay of these norms and principles, and sometimes in accord with the values of the decision-maker(s). Like its previous issues, the 2018 edition of the Singapore Comparative Law Review has put together a collection of stimulating articles, commentaries and practice features on the life of the law in England and Singapore. This issue contains 17 substantive articles and 6 feature articles on the law and law practice. The articles and commentaries are organised under the headings of ‘Law and Commerce’ (7), and ‘Law and Society’ (10). The feature articles are concerned with the Singapore legal scene, and prospects for lawyers in Singapore in an already saturated legal profession which will become even more saturated if the numbers of new entrants are not capped or reduced. The contributors have chosen their topics well. They are topical, and with respect to many of the English decisions critiqued, there are Singapore counterparts (or counterpoints) for evaluation of their comparative merits. Thus, on the requirement of consideration in contract, Justin Jun Xiang Tan and Eliza Chee (both University of Oxford) seek, in their commentary ‘Reconsidering Consideration’, to ‘re-clarify’ the doctrine of consideration in the light of the judgments of in the United Kingdom Supreme Court in MWB Business Exchange Centres Ltd v Rock Advertising Ltd1and to draw a useful insight from Singapore law,2 as to how the doctrine of consideration could be improved. The commentators suggest that Singapore case law yields a useful perspective on what, if any, alternative doctrines could replace the doctrine of consideration. But, they further argue that there is value in preserving the doctrine of consideration instead of outright abolishing it. So, quo vadis? Better to accept the status quo, and distinguish it if and when the justice of the case requires than to journey into unknown terrain? In contrast with the strict enforcement of contractual rights, the principle of conscience, fair dealing and moral obligations in equity in the area of domestic rights is discussed in an article ‘Context is Everything: The Application of the Common Intention Constructive Trust to Family Homes’. In BMM v BMN3, the plaintiff had married the defendant, and lived together with their two children for 20 years. He purchased a property, and in order to enjoy discounted interest rates on his mortgage loan, he registered the defendant (a Singapore citizen) as co-owner. The marriage was subsequently annulled by a United States Court on the ground that the defendant had not obtained a decree absolute at the time of the marriage. Furthermore, it was later discovered that Mr BMM was not the biological father of the twins. The Singapore High Court found on the evidence that the parties shared a common intention that the property would be solely-owned by him. Ng Shu Wen (University College London) agrees with the decision on its ‘unique facts’, but considers the outcome as illustrating ‘a situation arising where legal safeguards failed to secure an equitable outcome for disputants’, which she seems to attribute to the judgment of the Court of Appeal in Chan Yuen Lan v See Fong Mun.4 In that case, the Court approved Lord Neuberger’s minority approach in Stack v Dowden5 and declared the limited

[2016] EWCA Civ 553, [2018] UKSC 24.

2 332.

See Sea-Land Service Inc v Cheong Fook Chee Vincent [1994] 3 SLR 631, and Gay Choon Ing v Loh Sze Ti Terence Peter [2009] 2 SLR(R)

[2017] SGHC 1318.

[2014] SGCA 36, [2014] 3 SLR 1048.

[2007] UKHL 17, [2007] 2 AC 432.

utility of the common intention constructive trust approach in Singapore. Shu Wen argues that ‘the common intention constructive trust analysis still has a degree of utility in its application to family breakdowns in Singapore – it fills the void to bring forth an equitable outcome for the parties in a long lasting relationship where it is not secured by marriage.’ Her concerns may be misplaced. Firstly, in Chan Yuen Lan there was a marriage, but not cohabitation as in BMM v BMN. Secondly, the High Court in BMM v BMN applied a common intention constructive trust analysis to the evidence and found that the common intention was that the plaintiff would be the sole beneficial owner of the property. It would appear that the High Court did regard Chan Yuen Lan as having rejected a common law constructive trust. What may be confusing about BMM v BMN is that the High Court also held that on a resulting trust analysis that the defendant would have a beneficial interest in the property in the proportion of the interest saved by the plaintiff to the purchase price of the property had there been no savings on interest, but that the resulting trust analysis was displaced by evidence of the parties’ common intention. On a related subject, Adelle Yii (University College London) discusses the judgment statements of the Singapore Court of Appeal in Tan Yok Koon v Tan Choo Suan6 on the relationship between trust duties and fiduciary duties in her article ‘Has Singapore’s Position on Fiduciary Duties Shifted Significantly from the United Kingdom’s Precedent?’ She finds the judgment unclear ‘as to precisely how fiduciary duties can arise’ because the Court first found a resulting trust on the evidence and then held that the trustee owed fiduciary duties to the beneficiaries. She comments: Using the case of Tan Yok Koon as an example, it was found that the events which gave rise to the resulting trust were also the event that gave rise to Tan Choo Suan’s fiduciary duties. This seems to contradict the Court’s stance that voluntary assumption of responsibility is the crucial element of finding fiduciary duties. ... In order to provide clarity in the law of trusts, the Court must take a clear stance as to whether fiduciary duties should arise from an event or through the voluntary assumption of responsibility. In Tan Yok Koon, the Court of Appeal found that the respondent held the shares in a company (as a family trust) on a resulting trust for her four siblings, and that she breached her fiduciary duties in refusing to recognise them as beneficial owners and in removing two of them as directors of the company. A trustee is always a fiduciary in relation to the interests of the beneficiary. His duties and obligations are determined by the trust instrument, if any, and the Trustees Act and also equitable principles of trust and confidence. A trustee is always a fiduciary vis-à-vis the beneficiary, but not the other way round. A fiduciary relationship arises whenever a person undertakes to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. Hence, if a person holds property on a resulting trust or a constructive trust (as found by the court), he would owe fiduciary duties like any trustee, and must act always in, and not against, the interest of the beneficiary. Accordingly, the decision in Tan Yok Koon accords with established principles. On the same topic, Herman LY Ahmad (University of Oxford) discusses the difference between the institutional constructive trust and the remedial constructive trust under English law and Singapore law in his article ‘“JudgeDriven in a Vehicle of Discretion”: Is the Road Blocked Off to Remedial Constructive Trusts in Singapore?’ The remedial constructive trust applicable in United States and Canadian jurisprudence has found no traction in England as it is not regarded as an institutional constructive trust arising by operation of law, governed by principles of law (and hence are known and certain) but nothing more than a restitutionary remedy applied by judicial discretion to do what the court considers to be just in a particular case (and hence can be subjective and uncertain). Herman makes a spirited case for the acceptance of the remedial constructive trust in Singapore for its flexibility as it is a discretionary remedy that can be applied to do justice in any case, and especially when the interests of innocent third parties may be prejudiced. He points out that the remedy has not been rejected in Singapore although it was referred to in Ching Mun Fong v Liu Cho Chit (No 2)7, and accepted by the High Court in a ‘highly criticised’ judgment of Comboni Vincenzo v Shankar’s Emporium (Pte) Ltd.8 However, Herman may be over optimistic. Unless the remedial constructive trust is accepted under English law, the prospect of it being accepted by the Singapore courts is not good. In this connection, it is worth making the point that academic writings (and also judgments) are replete with references to different kinds of trusts, such as express trusts, resulting trusts, implied trusts, constructive trusts, secret trusts, etc. 6

[2017] SGCA 13.

[2001] SGCA 36, [2001] 1 SLR(R) 856.

[2007] SGHC 55, [2007] 2 SLR(R) 1020.

These are essentially classification labels. Conceptually, and reduced to its simplest form, it is arguable that there are only two kinds of trusts in equity, viz, the express trust, written or oral which may be created by persons or by legislation, and the constructive trust which a court of equity ‘constructs’ in circumstances where the legal owner of property claims it as his own in circumstances where by operation of law or by his own agreement or conduct he has agreed to hold it for another person or for a purpose which may have failed. In essence, a resulting trust is also a constructive trust. In his article, ‘Homicide Law – A Comparison’, Joshua Wang (University of Oxford) discusses the doctrine of constructive liability for murder and other offences in the United Kingdom and Singapore. Inevitably, the focus is on the notoriety of section 300(c) of the Penal Code, and the judgments in Tan Joo Cheng9 and Lim Poh Lye,10 both of which are cited as instances of ‘affronts to the ideals of autonomy, and the moral content of the law in basing punishment on the blameworthiness of the defendant.’ This discussion, whilst useful jurisprudentially, is no longer relevant to the criminal law of Singapore.11 In a commentary on punishment that fits the crime, Adelle Yii (University College London) asks the question: ‘Should the Directors Involved in the City Harvest Church Case12 be Given Heavier Sentences under Section 409 of the Penal Code?13’ The City Harvest Church (‘CHC’) prosecution is a most fascinating and unusual case involving the use of vast sums of CHC’s funds. The directors were charged under section 409 for aggravated criminal breach of trust (‘CBT’) ‘in the way of their business’ as ‘agents’ of CHC. Their defence was that they did not commit CBT in that they had the funds in aid of CHC’s mission to bring in more believers via a crossover project through rock music. The legal issue under section 409 was whether the directors were agents of CHC by way of their business. The High Court and the Court of Appeal both held that the directors were not agents of CHC by way of their business. However, the directors were convicted for simple CBT under section 408 of the Penal Code. Adelle argues that ‘this should not be the case’, meaning that the directors deserved, and should have been punished with, heavier sentences, which would be the case if they were found guilty under section 409. It would seem that the prosecution (and certainly a section of the public) agreed with this sentiment. The Government has decided to amend the law accordingly. But, ultimately, it is difficult to see what the brouhaha was all about. It was not about the inadequacy of the Penal Code. After all, they were convicted for CBT under section 408, i.e., simple CBT and could have been sentenced to the maximum punishment under the section, although the judge did not do so (presumably on the basis of established sentencing practice that a first offender is normally not punished with the maximum penalty). The courts were not unaware of public sentiment, but to their credit, they were not prepared to interpret section 409 to satisfy public sentiment by ignoring the meaning of the qualification ‘in the way of his business’. They are intended to mean something, and it means that the agent must be entrusted with property in the way of his business as an agent. A director is an agent of the company, but he is an agent not in the way of his business, like, for example, a commission agent, or a banker or a broker. The courts should be applauded for their fidelity to the law. This is what the rule of law means. In his commentary, ‘Ivey v Casinos – Reform to the Dishonest Principle?’, Muhammad Hasif (University of Southampton) discusses the decision of the United Kingdom Supreme Court in Ivey v Casinos,14 where it was held that the test of dishonesty in the offence of cheating under section 42 of the Cheating Offences Act is objective, i.e., whether his conduct was honest or dishonest by the (objective) standards of ordinary decent people. He compares this decision with the test of dishonesty under section 24 of the Penal Code which defines ‘dishonesty’ as ‘the intention of causing wrongful gain to one person or wrongful loss to another’. He accepts that ‘Even from the language used in the legislation itself, it could be argued that the test for dishonesty in Singapore is set out to be an objective standard’. In Wong Seng Kwan

[1992] SGCA 12.

[2005] 4 SLR(R) 582.

11 The problem of disproportionate punishment for murder under section 300(c) arose only because originally under the Penal Code, death penalty for murder under section 300 was discretionary and not mandatory, as provided under the Indian Penal Code. As a result, the Indian courts did not impose the death penalty, but life imprisonment for murder under section 300(c), which is still the practice today. However, the Straits Settlements Government made the penalty mandatory in 1883 by the Penal Code (Amendment) Ordinance 1883.

Public Prosecutor v Lam Leng Hung [2017] SGCA 7.

Section 409 of the Penal Code (Cap 224, 2008 Rev Ed) provides: Whoever, being in any manner entrusted with property, or with any dominion over property, in his capacity of a public servant, or in the way of his business as a banker, a merchant, a factor, a broker, an attorney or an agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment for a term which may extend to 20 years, and shall also be liable to fine.

[2017] UKSC 67, [2017] 3 WLR 1212.

v PP,15 the Singapore High Court held that the defendant was guilty of misappropriating money from a wallet which he had found lying on the floor in a casino. The wallet was obviously not abandoned by its owner. The taking of the money was dishonest under section 403 of the Penal Code because, as defined, that act caused a wrongful gain to the taker and also a wrongful loss to the owner. Wong Seng Kwan merely applied the clear terms of section 403 of the Penal Code. It is therefore unclear what the point is that is being advanced in this commentary. When the issue is whether an accused has committed a Penal Code offence, it is only necessary to look at decisions under the Penal Code, and not allow English criminal law to cloud its clarity and concision. In this vein, it is really a breath of fresh air that Edwin Teong Ying Keat (University of Bristol) argues in his article ‘When Breath Becomes Air: Why the Hii Chii Kok Test Should Be Applied in the English Courts’, a reverse assessment that Singapore law has something to offer English criminal law regarding the test for acceptable medical advice laid down by the Singapore Court of Appeal in Hii Chii Kok v Ooi Peng Jin London Lucien16 for 3 reasons: (a) it provides clear guidance on defining ‘consent’ for the United Kingdom Courts; (b) it enshrines the moral autonomy of patients in making informed decisions; and (c) it balances both patients’ and doctors’ rights, thus taking an objective approach. However, even if his comment is valid, it will not be considered unless the decision is cited in English courts. The law on divorce also is the subject of Adelle Yii’s (University College London) commentary ‘Should Married Couples be Granted Divorces on a “No Fault” Basis?’ she discusses the relative merits of no-fault divorce and its perceived positive and negative consequences the institution of marriage and to society. Families are the bedrock of society, and therefore the breakup of marriages raises fundamental issues for society. These are policy issues for the Government to decide. Adelle’s views on no-fault divorce would have been more rounded or salient if she had provided more data, e.g., the reasons Parliament gave for section 95 of the Women’s Charter and in including section 94A (Parenting programme) in the Women’s Charter in 2016. In her article, ‘An Unwanted Child? Awards for Damages in the Tort of Negligence’, Bernice Tan (University College London) discusses the poignant case of ACB v Thomson Medical Pte Ltd.17 The appellant conceived a daughter via invitro fertilisation. However, her ovum was fertilised by a stranger’s semen rather than her husband’s. She noticed that the skin tone of the daughter was different from hers and her husband’s. She was shocked to learn the truth. The issue was whether she was entitled to compensation for the fiasco. What compensable loss in law had she suffered? She claimed damages in the nature of upkeep costs of an unwanted child. The High Court dismissed the claim on the ground that she had always wanted a second child. The Court of Appeal disagreed with this finding of fact, and held that she had not wanted a child with genetic makeup from her and her husband. However, the Court of Appeal also rejected the claim for upkeep costs on the ground that there is a legal and a moral duty to provide material support for ‘one’s child’, and this responsibility is incapable of valuation as ‘loss’ in any meaningful sense and could not be the subject of a claim for damages. The Court also observed that ‘Given that the Appellant and her husband had accepted Baby P as their own (and assumed the status of parents), they had to be taken to have accepted the responsibility of maintaining Baby P (financially and in all other respects)’. It is not clear whether this finding is an alternative ratio for rejecting the claim: volenti non fit injuria in a different legal setting. To compensate the appellant for her ‘loss’, the Court of Appeal introduced into the law a new cause of action – loss of genetic affinity by an unlawful act. The doctors were held to owe a duty of care to the appellant which was breached because the appellant: had lost something of profound significance and suffered a serious wrong. This loss of ‘genetic affinity’ could also result in social stigma and embarrassment arising out of the misperceptions of others, as was the case here. The damage to the Appellant’s interest in ‘genetic affinity’ was a cognisable injury that should sound in damages: at [127] to [135]. The loss of genetic affinity could be seen as an element of non-pecuniary loss, akin in some ways to an award for pain and suffering, but with distinct incidents. In the absence of comparable precedents, the award would be benchmarked as a percentage of the financial costs of raising Baby P. This did not derogate from the finding that the obligations of parenthood were incapable of being regarded as loss, but was a practical approach that 15

[2012] SGHC 81.

[2017] SGCA 38.

[2017] SGCA 20.

prevented the court from having to pluck a figure out of thin air. Having regard to all the circumstances of the case, an award equivalent to 30% of the financial costs of raising Baby P properly reflected the seriousness of the Appellant’s loss and was just, equitable, and proportionate: at [139], [145], [149] and [150]. Bernice queries the logic of the Court’s finding and of benchmarking loss of affinity damages against upkeep costs, since, as she argues, it suffers from the same policy objections that led the Court to reject the claim for upkeep costs. The Court was aware of these problems in its discussion of the possible application of the ‘benefit rule’ in American jurisprudence, which it also rejected. But, perhaps one day when genomics science is so advanced that it can tell what types of genes can create beauty, intelligence and other desired characteristics in an offspring, the courts would have then no problem in applying the benefit rule where the unintended gene will create a beautiful and intelligent girl, and apply an ‘impairment rule’ where the girl will turn out to be ugly and also a dud. Science can create new law, but law cannot create science. Equally material is her observation that, scientifically speaking, the appellant did not suffer any loss of genetic affinity since she is the biological mother of the child. The persons who have suffered genetic loss would be the husband and the IVF-conceived daughter – the husband being deprived of a child having his genes, the child being deprived of the genes of her father. Perhaps, what the Court had meant was that the appellant lost having her genes and those of her husband in the conceived child. If that were the case, the Court would have to assume that if the husband’s genes had been used, the IVF would have been successful. An issue of causation would arise. Furthermore, if this were the case, the husband should also have a cause of action for loss of genetic affinity. That the husband did not sign an agreement with the hospital (which was probably the case here since he was not a co-plaintiff) would not be relevant. What about the child? Does the hospital owe her a duty of care not to visit on her the prospect of ‘social stigma and embarrassment arising out of the misperceptions of others, as was the case here’? But, if so, what would be the compensable damages in law? Should a defendant be penalised for the misperceptions of others which have social consequences or psychological effects on the innocent parties? If Bernice is correct that the appellant did not suffer a genetic loss, it would follow that she could not claim damages, and that even if she did suffer such a loss, it is arguable that the Court of Appeal had effectively done indirectly what it held it could not do directly, i.e., to award upkeep costs as damages by benchmarking what is immeasurable, i.e., genetic loss, to what is measurable loss, i.e., costs of upkeep, and giving it what can only be a ‘guesstimated’ discount. Ultimately, she applauds what is essentially a policy decision as bold and innovative, and having more merits than flaws. The outcome certainly accords with the justice of the case. The aggrieved appellant gets her solatium and the respondents are held to account for damages for their negligence, but not punitively. Another case of duty of care, viz, Robinson v CC West Yorkshire18 is noted by Glenn Chua (University of Bristol). In that case, the appellant, a bystander, was injured in the course of a police arrest of a drug dealer. ‘The general question of importance in this appeal is when the police do or do not owe a legal duty of care to individuals in the course of performing their public functions of investigating and preventing crime.’ The United Kingdom Supreme Court, after reviewing the relevant case law, held that the police are liable for negligence resulting in personal injuries where such liability would arise under ordinary principles of the law of tort. Accordingly, on the evidence, the police was liable to the appellant for injuries suffered by her as they were caused by the carelessness on the part of the police officers in circumstances in which it was reasonably foreseeable that their carelessness would result in the appellant being injured. The article does not refer to any such claim in Singapore, but there would be no reason why the English court’s ruling would not be followed here, as it falls within the approach approved by the Court of Appeal in Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency.19 Still on the topic of family law, Chng Jieying (University of Warwick) discusses the legalisation of same-sex marriage in her article ‘Legalising Love: A Study of Same-Sex Marriages in the United Kingdom, the United States of America and Singapore’. Although same-sex marriage is being legalised in more and more western liberal countries, Jieying points out it is no-go in Singapore, which is not ready to legalise same-sex marriage. But beyond this, she does not take a stand on the issue, which diminishes the value of the commentary. Vicarious liability makes an appearance in ‘Liability for the Acts of Others: Armes v Nottinghamshire County Council and

[2018] UKSC 4.

[2007] 4 SLR(R) 100.

Some Comparative Observations’ by Yen Jean Wee, (University of Cambridge). In a useful article, she draws the attention to the decision of the United Kingdom Supreme Court in Armes20 which was decided shortly after the Singapore Court of Appeal’s decision in Ng Huat Seng v Munib Mohammad Madni.21 This case involved the physical and sexual abuse of a child (the claimant) by foster parents with whom the local authority had placed her while she was committed to its care. The issue was whether the duty to care for the child was delegable or non-delegable, and whether in any case the local authority was vicariously liable for the acts of the foster parents. The Supreme Court held that the local authority was vicariously liable for the torts committed by the foster parents, but that it had not breached a non-delegable duty of care owed to the child. These are distinct legal doctrines with different incidents and different rationales. Yen Jean suggests that ‘It is also difficult to know whether, on similar facts, Singapore’s courts would arrive at the same conclusion as that in Armes. The cases in which issues of vicarious liability and non-delegable duties have arisen in Singapore have (fortunately) not involved facts similar to Armes and the line of abuse cases preceding it.’ This suggestion appears to refer to the finding on vicarious liability and not delegability. It is suggested that on the basis of reasonable redistribution of risks and capacity to pay damages, most practitioners would not find it difficult to give an answer to this question if a similar fact situation were to arise. Muhammad Hasif (University of Southampton) tackles the vexed issue of quantifying unquantifiable damages in his essay ‘The Problem with Quantification of Unquantifiable Damages for Breach of Contract’. The general principle in awarding damages is to put the injured party in a position as if the contract had been carried out. Damages are compensatory in nature. However, there are many types of contracts where it is difficult if not impossible to ascertain the damages for the loss. Two models have been applied by the courts. The first is the Wrotham Park Damages Model, named after the case of Wrotham Park Estate Co Ltd v Parkside Homes Ltd22 where it was reasoned that the court could award damages amounting to what the parties would have negotiated for to release one party from the contractual obligations. Singapore courts have considered this model in Clearlab v Ting Chong Chai23, JES International Holdings Ltd v Yang Shushan,24 and PH Hydraulics & Engineering Pte Ltd v Airtrust (HK) Ltd25. This model has certain weaknesses which were pointed out by the United Kingdom Supreme Court in MorrisGarner v One Step (Support) Ltd.26 In this case, the general principle for contract damages to put the injured party in a position as if the contract had been carried out was reaffirmed. Damages based on a breach of contract must be on legal right and not the courts’ discretion. The second model is the Loss Amenities model approved in Ruxley v Forsyth,27 where the court reasoned for damages based on a ‘loss of amenities’. Hasif thoughtfully suggests a framework for both models to operate. Where the breach involves positive obligations, the performance of which has a subjective value to the other party, the courts should follow Ruxley for loss of amenities. Where the breach involves restrictive obligations, the courts should apply the Wrotham Park model as there is no way to quantify the injured party’s expectation or reliance loss based on hypotheticals and opportunity loss, in cases where the contractual obligation is to not act in a certain way, limited to cases where the breach takes away the right of the injured party as stipulated by the terms. He may be pleased to know that in Turf Club Auto Emporium Pte Ltd v Yeo Boong Hua,28 the Singapore Court of Appeal confirmed Wrotham Park damages are applicable in Singapore, and that their normative basis is compensatory in nature, although descriptively restitutionary in a sense. The Court further stated that such damages can only be awarded if three requirements are satisfied, one of which is that the obligation breached must be a negative covenant. In ‘“Sweat of the Brow” to the “Spark of Creativity”’, Glenn Chua (University of Bristol) discusses the decision of the Singapore Court of Appeal in Global Yellow Pages Ltd v Promedia Directories Pte Ltd29 where the Court held, 20

[2017] UKSC 60.

[2017] SGCA 58.

[1974] 1 WLR 798.

[2014] SGHC 221.

[2016] SGHC 52.

[2017] 2 SLR 129.

[2018] UKSC 20.

[1996] 1 AC 344.

[2018] SGCA 44.

[2017] SGCA 28.

in determining whether a work is entitled to copyright, that the relevant factor is whether the final work exhibits the ‘creativity’ or ‘intellectual effort’ of the author. The preparatory work – i.e. ‘skill, labour and judgment’ exercised in sifting for relevant data – is not relevant. In the light of the ‘sweat of the brow’ approach being jettisoned, Glenn makes a useful proposal in light of the fact that a segment of compilation works could potentially be left unprotected, such as compilations where substantial labour and effort have been expended to gathering data but which exhibit limited creativity in its expression. This could include directories or football fixtures, where data could be arranged in alphabetical order or are categorised based on business type. Glenn suggests that Parliament should legislate to recognise such work as ‘sui generis’ rights in line with European Union Database Directive which was introduced after the European Court of Justice’s ruling in Infopaq International v Danske Dagblades Forening.30 This is to maintain the dissemination of such works. In her article ‘The Defence of Illegality Defended: Analysing Patel v Mirza31 in light of Ochroid Trading Ltd v Chua Siok Lui32’, Tee Ming Zee (University of Oxford) examines the different approaches of the United Kingdom Supreme Court and the Singapore Court of Appeal on the illegality as a defence in a claim in contract, and argues that the Singapore approach manages to balance these conflicting positions by satisfactorily circumscribing legal uncertainty within a residual area of law, while still preserving a degree of flexibility through the vehicle of proportionality analysis. She refers to the leading judgment of Lord Toulson in Patel which undertook a thorough analysis of the defence of illegality in other Commonwealth jurisdictions, and that if he had considered Ochroid Trading, he might find lessons to be drawn from the Singaporean approach. The commentaries and articles in this issue show that our courts are current and in some areas ahead of the curve in the development of the common law in Singapore. Where social changes are constant, law cannot be static. But, vita brevis, lex longa. The Editorial Committee is to be commended for putting together this issue and the contributors for taking the time and making the effort to write the articles and the commentaries.

Chan Sek Keong (Chief Justice 2006-2012)

[2009] C- 05/08.

[2016] UKSC 42.

[2018] SGCA 5.

President’s Address

Dear Readers, It is truly an honour to be writing the President’s Address for UKSLSS’ annual publication. For the last 13 years, the Singapore Comparative Law Review (formerly known as Lex Loci) has been a unique publication, providing comparative academic debates and displaying excellent knowledge of the law in both Singapore and the United Kingdom. Looking back at previous editions has also made me realise how quickly the legal scene changes, emphasising the need for Singaporean students in the United Kingdom to remain aware of happenings back home. This year, the Executive and Editorial Committee have seen students from various universities across the United Kingdom take the effort to conduct independent research and provide greater insight into the jurisprudence of both Singapore and the United Kingdom. In particular, the Editorial Committee has worked hard to encourage writers to adopt comparative analyses between the jurisdictions and to provide readers with thought-provoking arguments shedding light on the key issues that arise. The Singapore Comparative Law Review is fully produced by our members, who are all full-time students. I would like to thank our Editor-in-Chief, Herman Lin Yao Ahmad, and his Editorial Committee, as well as the writers, for their tremendous work. As members of the Editorial Committee are spread across the United Kingdom, they barely had the opportunity to meet in person and their meetings had to be held online. Despite these challenges, they have done a fantastic job in discussing ideas for articles with potential writers, coordinating and authoring the features, and for spending majority of their time after examinations editing each article. I am also proud to announce that the Editorial Committee has established a brand new online newsletter, which will be circulated through our mailing list every term. Through these newsletters, our members have a platform to keep up with the legal scene and learn more about firms through interviews or features, as well as find out about our upcoming events. I am extremely proud of the work the Editorial Committee has done and I am grateful for their perseverance over the last year. Other than providing readers with a platform to compare jurisprudence across jurisdictions, the Singapore Comparative Law Review serves as an important reminder of the unique position that our members are in. Our writers have not only explored topics which are of rising importance in Singapore and the United Kingdom but have sought to dig deeper and consider whether the varying positions can be reconciled or should be reconciled at all. Whether it is on legalising samesex marriage, trusts, family homes, damages or consideration, our writers have covered topics in both a commercial and societal aspect. Personally, these articles provide a good starting point to get in touch with what is happening in the legal scene back home and may even present a good discussion topic for any upcoming interviews you may have. There is no doubt that the legal scene in Singapore, or in all jurisdictions for that matter, will continue to evolve. Our members must adapt to these changes, by keeping abreast of growing industries and by looking to areas of law struggling with a shortage of lawyers. As the Ministry of Law has continuously emphasised, despite the oversupply of lawyers, much more can be done in the Community Law sector. In order to provide members with an avenue to explore this path, the Singapore Legal Forum 2018 has included Criminal Law and Pro Bono Work as one of our concurrent session topics. I would like to take this opportunity to encourage all members to get involved in Pro Bono or voluntary work whilst time permits. Nothing will point you in the right direction like hands-on work in different environments and practice areas. Community Law is definitely not the only area which we should look to. As United Kingdom graduates, we have the option of practising overseas, whether temporarily or with an intention to settle down overseas. To bring life to this avenue, we have also invited Dr Colin Ong QC, to provide insight on his experience in an international career. Despite this, I would like to remind members that at the end of the day, they should opt for career paths that suit them. As cliché as it sounds, you define your career and how many lives you eventually impact with your law degree. My past predecessors have stood firm in their beliefs that United Kingdom universities produce stellar law graduates and I too, have taken and will continue to take this stance. I encourage all members not to get caught up in comparisons between overseas and local universities and make the best of wherever we are. You will not be disadvantaged. My time in London

has given me so much more than legal knowledge but has also equipped me with important practical skills which form the foundation of practising as a lawyer. There are several people who ought to be recognised for their contributions to this year’s publication. First of all, I would like to thank Ally Tan, whose artwork forms the cover page of this year’s edition of the Singapore Comparative Law Review. I also wish to extend my heartfelt appreciation to Senior Judge and Former Chief Justice Chan Sek Keong for his continued support as our Patron and for taking the time to read through every article in the formulation of his foreword. He has continually offered words of wisdom and generously shared his experiences and advice with us. I would also like to thank Dr Michael Hwang SC, Samuel Seow, Jerrold Soh, Leonard Lee, Professor Leslie Chew and Kyle Koh for participating in interviews and sharing their experiences in the respective practice areas. Last but not least, a big thank you goes out to you, the reader. Thank you for supporting the Society over the years. I sincerely hope that the Society has been and will continue to be a source of support for you. Words cannot express how privileged I am to have served you as President over the last year, and I wish you all the best, whichever path you may embark on. Yours Sincerely, Adelle Yii President of the United Kingdom Singapore Law Students’ Society

United Kingdom Singapore Law Students’ Society Executive Committee

From Left to Right: Herman Ahmad (Editor-in-Chief), Carmen Lee (Marketing Director), Chng Jie Ying (General Secretary), Adelle Yii (President), Ashwati Venkatesh (Vice President), Yi Ching Chan (Finance Director), Jean Hee (Public Relations Director [Sponsorship]), Chiraag Thadani (Public Relations Director [Professional and Academic Affairs]).

Editorial Foreword

Dear Readers, It is with great pleasure that the Editorial Committee and I present to you this year’s edition of the Singapore Comparative Law Review, the annual flagship publication of the United Kingdom Singapore Law Students’ Society. It is our tremendous privilege to once again have Senior Judge and former Chief Justice Chan Sek Keong write the foreword for the journal as the patron of the society. We are also immensely grateful for the support of our sponsors, without whom such an endeavour would not have been possible. As many of you know, the Singapore Comparative Law Review was formerly known as Lex Loci. Since its first launch in 2006, Lex Loci has gone from strength to strength in showcasing the works of Singapore law students studying in the United Kingdom, with this year marking its 13th edition. I am proud to announce that from this edition forward, Lex Loci will be renamed the Singapore Comparative Law Review. The rationale for this is two-fold. First, the renaming aims to more accurately frame the publication as the respectable academic journal that it is, aligning itself with other student-run law journals like the Cambridge Law Review and the National University of Singapore’s Singapore Law Review. The publication is not just one of many initiatives of a student society: it is a showcase of the immense jurisprudential knowledge of all Singapore law students educated in the United Kingdom. In a similar vein, I am excited to say that the Editorial Committee is also in talks with HeinOnline to get the Singapore Comparative Law Review published on its online database. Second, the new title embodies the comparative nature of our publication, which remains the fundamental element grounding all the articles published within. It additionally signals a move away from a merely bilateral comparison with English law and towards a multilateral analysis of the law across all jurisdictions. As foreign-educated law students, our members bring to the table not just the hard legal knowledge of English law, but more importantly the transferable comparative mindsets and skills that are increasingly crucial in today’s globally-connected legal industry. It is the unique position between jurisdictions that enables our members to be aptly poised for a more nuanced legal understanding. Learning the principles of law in the United Kingdom but having first encountered the working of these principles in practice in Singapore gives our members pause to question not just what the law is, but also why the law is what it is. This is especially so with the increasing divergences of Singapore law from its roots in the English common law, which engender interesting yet relevant questions at the forefront of the law. The constant exposure to these deeper questions is what equips our members with the incisive analytical skills that will enable them to be the future movers and shakers of the legal industry. It is with this conviction that we have embarked on this year’s publication. The 13th edition of the Singapore Comparative Law Review brings to you 17 academic articles from students from a wide range of universities across the United Kingdom. Broadly, these articles have been split into two categories: ‘Law and Commerce’ and ‘Law and Society’. But one question grounds all the articles: how can a background of jurisprudence in the United Kingdom benefit an understanding of the Singapore legal scene and vice versa? We have also striven to include discussions on the most recent cases and legal developments, ranging from the 2018 United Kingdom Supreme Court decision of MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] UKSC 24 to the 2018 Singapore Court of Appeal decision in Ochroid Trading v Chua Siok Lui [2018] SGCA 5. This year’s publication indeed seeks to bring into sharp focus some very exciting areas of law. For the first time, the WongPartnership Award for Best Written Article will be provided this year for the best-written academic article in the Singapore Comparative Law Review, with the goal of incentivising continued thought leadership. We are incredibly grateful to WongPartnership for going above and beyond their initial sponsorship arrangements to help the United Kingdom Singapore Law Students’ Society better contribute to jurisprudential thought in Singapore. Despite the positioning of the Singapore Comparative Law Review as an academic journal, the publication will nonetheless still have the unique addition of feature articles, given its two-pronged mission to be as much an external demonstration of legal knowhow as an inward-looking pool of knowledge for the collective benefit of all members. This 13

year’s edition therefore includes 6 feature articles, comprising fascinating topics such as the impact of technology in the legal industry and the future of international arbitration in Singapore in light of the growth of Singapore’s dispute resolution centres. At this juncture, I would like to give my heartfelt thanks to the many talented individuals who have taken time off their busy schedules to impart us with their knowledge, insight and advice: Senior Counsel Dr Michael Hwang, Professor Leslie Chew, Mr Samuel Seow, Mr Leonard Lee, Mr Jerrold Soh, and Mr Kyle Koh. With the same goal of developing an internal pool of knowledge within the society but beyond the publication, the Editorial Committee has also launched a quarterly newsletter, which will be circulated through the mailing list before the start of the new academic year and at the end of each term. The newsletters aim to update UKSLSS members on happenings of the society, highlight upcoming events, and showcase some of our members’ works. Before I conclude, I would like to express my sincerest thanks to the writers and contributors. I speak for the Editorial Committee and indeed the Society when I say that I have been thoroughly impressed by all your work. The fact that you bravely put pen to paper and inked your thoughts for the world to see is truly admirable. It is our hope that you continue to develop your passions and attain new heights in your understanding and analysis of the law. Last but not least, I would like to give my most heartfelt gratitude to my editorial team. You have worked tirelessly and thanklessly to bring this publication to fruition. I have learnt a lot from each and every one of you, and I mean it when I say that it was truly a joy working with you over the past year. I hope you will enjoy reading this journal as much as I have enjoyed producing it. Whether you read just a page of this publication, or whether you read it from cover to cover, I assure you that it will be time well-spent. Yours Sincerely, Herman Lin Yao Ahmad Editor-in-Chief of the United Kingdom Singapore Law Students’ Society

Editorial Committee

Editor-in-Chief:

Vice Editor-in-Chief:

Managing Editor (Academic):

Deputy Editor (Academic):

Managing Editor (Features):

Deputy Editor (Features):

Deputy Editor (Newsletter):

Deputy Editor (Newsletter) and Head of Design:

Herman Ahmad

Jared Kang

Bernice Tan

Koh Cheng Jun

Kelvin Tan

Glenn Chua

Lee Kay Howe

Annabelle Lee

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Contents LAW & COMMERCE Reconsidering Consideration (Justin Tan & Eliza Chee, University of Oxford) 20 The Defence of Illegality Defended: Analysing Patel v Mirza in light of Ochroid Trading Ltd v Chua Siok Lui (Tee Ming Zee, University of Oxford) 26 The Problem with Quantification of Unquantifiable Damages for Breach of Contract (Muhammad Hasif, University of Southampton) 32 Prest v Petrodel versus Alwie v Tjong: A Comparative Study (Muhammad Hasif, University of Southampton) 38 Has Singapore’s Position on Fiduciary Duties Shifted Significantly from the United Kingdom’s Precedent? (Adelle Yii, University College London) 45 ‘Judge-Driven in a Vehicle of Discretion’: Is the Road Blocked Off to Remedial Constructive Trusts in Singapore? (Herman Lin Yao Ahmad, University of Oxford) 51 ‘Sweat of the Brow’ to the ‘Spark of Creativity’ (Glenn Chua, University of Bristol) 63

LAW & SOCIETY Legalising Love: A Study of Same-Sex Marriages in the United Kingdom, the United States of America and Singapore (Chng Jie Ying, University of Warwick) 70 Should Married Couples be Granted Divorces on a ‘No Fault’ Basis? (Adelle Yii, University College London) 75 Context is Everything: The Application of the Common Intention Constructive Trust to Family Homes (Ng Shu Wen, University College London) 80

Liability for the Acts of Others: Armes v Nottinghamshire CC and Some Comparative Observations (Yen Jean Wee, University of Cambridge) 86 Case Note: Robinson v CC West Yorkshire (Glenn Chua, University of Bristol) 93 An Unwanted Child? Awards for Damages in the Tort of Negligence (Bernice Tan, University College London) 97 When Breath Becomes Air: Why the Hii Chii Kok Test Should Be Applied in the English Courts (Edwin Teong, University of Bristol) 104 Ivey v Casinos: Reform to the Dishonest Principle? (Muhammad Hasif, University of Southampton) 108 Homicide Law: A Comparison (Joshua Wang, University of Oxford) 112 Should the Directors Involved in the City Harvest Church Case be Given Heavier Sentences under Section 409 of the Penal Code? (Adelle Yii, University College London) 119

FEATURES The Future of Arbitration in Singapore (Dr Michael Hwang SC) 123 Life as an Arbitration Lawyer (Samuel Seow An, Samuel Seow Law Corporation) 127 The Legal Magic 8-Ball (Jerrold Soh, Lex Quanta) 129 Innovation in the Pro Bono Scene (Leonard Lee, Community Justice Centre) 132 Law as a Second Career (Professor Leslie Chew, Singapore University of Social Sciences) 135 Working in London vs Singapore (Kyle Koh, Shearman & Sterling LLP) 137

LAW AND COMMERCE

Reconsidering Consideration Justin Tan & Eliza Chee, University of Oxford Introduction The recent case of MWB Business Exchange Centres Ltd v Rock Advertising Ltd (“MWB Business”)1 reviewed, inter alia, fundamental aspects of consideration—a doctrine that has been subject to significant criticism2 and described by some judges and academics as ‘unnecessary’3 and ‘inconsistent’.4 In particular, the Court of Appeal paid detailed attention to the earlier Court of Appeal ruling in In Re Selectmove Ltd,5 where a legal reconciliation was attempted between Williams v Roffey Bros & Nicholls (Contractors) Ltd (“Williams v Roffey”)6 and Foakes v Beer.7 The aim of this article is to re-clarify the doctrine of consideration in light of the decisions in MWB Business, as well as explore potential scope for future development. This article will also embark on a comparative analysis with Singapore’s legal jurisdiction, in order to draw useful insight for how the doctrine of consideration in English law could be improved.

The Clash Between Williams v Roffey and Foakes v Beer The significance of MWB Business to the doctrine of consideration rests squarely on the background dispute between Foakes v Beer and Williams v Roffey about whether part payment of an existing debt (or performance of a service already owed) can constitute good consideration. It is helpful to briefly consider these cases. Foakes v Beer is a leading case that reaffirmed the orthodox view of consideration - that performance of a pre-existing contractual duty owed to the other contracting party cannot suffice as consideration. However, more than a century later, this view came under attack in the case of Williams v Roffey. 1

[2016] EWCA Civ 553, [2018] UKSC 24.

2 The Law Revision Committee, Sixth Interim Report (Cmd 5449, 1937). 3 See for example Lord Goff’s comments in White v Jones [1995] UKHL 5, [1995] 2 AC 207: ‘our law of contract is widely seen as deficient in the sense that it is perceived to be hampered by the presence of an unnecessary doctrine of consideration’.

Mindy Chen-Wishart, Contract Law (6th edn, OUP 2018).

[1995] 1 WLR 474.

[1989] EWCA Civ 5.

[1884] UKHL 1.

Williams v Roffey was remarkable in suggesting that a promise to perform a pre-existing contractual obligation might constitute good consideration where there is ‘practical benefit’ to the promisee. This seemed to contravene the principle in Foakes v Beer, because it suggested that even part payment of a debt, or part performance of a service, could be valid consideration so long as there was ‘practical benefit’.8 This came to a head in In Re Selectmove Ltd, where the Court of Appeal held that the Williams v Roffey principle could not be extended to an obligation to make payment because it would leave the Foakes v Beer principle ‘without any application’9. This left the Court of Appeal no choice but to maintain an uneasy distinction: Foakes v Beer would be applied to scenarios involving part-payment of debts, while Williams v Roffey would be applied to all other scenarios, primarily the supply of services. Gibson LJ admitted that he saw the force of extending the principle, as has been supported by legal academics like Adams and Brownsworth10, but was also bound by precedent. If an extension were to be made, he declared, that would be the role of the House of Lords, or more appropriately, by Parliament after consideration by the Law Commission.

MWB Business: Facts and Rulings of the Case MWB Business Exchange Centres Ltd (“MWB”) operated serviced offices in London, and they allowed Rock Advertising Limited (“Rock”) to occupy this space as a licensee. In August 2011, Rock decided to expand its business and thus entered into a new written contract with MWB for a larger space, paying an increased license fee. Unfortunately, the expansion of Rock’s business was not as successful as it had hoped, and by February 2012, it had incurred various arrears and charges of more than £12,000. As a result, MWB locked Rock out of the premises in March 2012 and gave notice purporting to terminate the agreement. MWB also brought claims 8

Williams v Roffey (n 6) [13].

(n 5) 481.

10 John Adams and Roger Brownsword, Consideration and the Critical Path’ (1990) 53 MLR 536.

‘Contract,

LAW AND COMMERCE

against Rock for the unpaid arrears and charges as well as damages for other losses. In response, Rock argued that there had been a valid oral agreement between the managing director of Rock and the credit controller of MWB to reschedule the license fee payments, and the first instalment for this revised payment schedule had been made on the same day. On this basis, Rock asserted that they had been wrongfully evicted from the premises. (i) Court of Appeal In the Court of Appeal, Kitchin LJ made careful consideration of the submissions by MWB’s counsel. The counsel for MWB relied heavily on In Re Selectmove Ltd’s reconciliation of Williams v Roffey and Foakes v Beer, arguing that the doctrine of ‘practical benefit’ recognised in Williams v Roffey could not be extended to the part-payment of debt situation covered in Foakes v Beer. In the present case, he submitted that any ‘practical benefits’ had arisen only in connection with the part-payment of debt, and thus they could not suffice as valid consideration. Kitchin LJ clearly approved of this argument, at least in principle. He expressed that he was ‘initially much attracted by these submissions’, although he disagreed with the factual conclusion that there was no practical benefit for MWB. Instead, Kitchin LJ pointed to the trial judge’s findings, that there were two key benefits accruing to MWB. Firstly, ‘MWB would recover some of the arrears immediately and would have some hope of recovering them all in due course.’11 Secondly, ‘Rock would remain a licensee and continue to occupy the property with the result that it would not be left standing empty for some time at further loss to MWB.’12 It should be noted that the first benefit that Kitchin LJ states above seems internally inconsistent - immediately after Kitchin LJ cites In Re Selectmove Ltd with approval, he appears to consider that part-payment of the debt was one of the practical benefits accruing to MWB, which is exactly what In Re Selectmove Ltd stated to be inconsistent with authority. It is unclear whether Kitchin LJ was making an argument that the part-payment of a debt should be considered a practical benefit, or whether he simply mis-stated the point. Overall the latter view seems more likely, given the clear approval directed by Kitchin LJ towards In Re Selectmove Ltd.

Firstly, MWB would gain ‘hope of recovering… [all the arrears] in due course’ This presumably does not refer to the promise of recovering the arrears, since that would be worth even less than the part-payment itself to MWB. Rather, this should be taken to mean a material increase in the prospects of MWB receiving full payment of arrears. Secondly, Rock would remain a licensee, meaning that MWB would not have ‘unoccupied and therefore unproductive property’13, and would not have to expend resources searching for new tenants. On this basis, the Court of Appeal held that there was sufficient consideration to support the oral variation. (ii) United Kingdom Supreme Court MWB contested these findings. On 1 February 2018, three issues were put before the Supreme Court for appeal. The third issue, concerning consideration, posed the question of whether on the factual findings of the trial judge, there was a practical benefit which could amount to consideration at law, given the principle that part payment of an existing debt cannot amount to good consideration (In Re Selectmove Ltd). It might be thought that this presented an unparalleled opportunity for the Supreme Court to authoritatively resolve the dispute between Williams v Roffey and Foakes v Beer once and for all. Unfortunately, the Supreme Court sidestepped the issue altogether. Holding that a non-oral variation clause in the contract was valid and binding, the Supreme Court found that it was ‘unnecessary’14 and ‘undesirable’15 to deal with consideration since the oral variation was invalid either way. Lord Sumption (with whom Lady Hale, Lord Wilson and Lord Lloyd-Jones agreed) did concede that reform was long overdue, stating that Foakes v Beer was ‘ripe for reexamination’16. In so doing, they seemed to suggest that Foakes v Beer would be the case to be reconsidered in favour of the principle in Williams v Roffey.

Implications of the Case Given that the Supreme Court hardly dealt with the issue of consideration, much of what we can distil from MWB v Rock stems from the Court of Appeal’s analysis. Despite purporting to follow established case authority instead of breaking new ground, it is argued that the Court of Appeal’s decision in fact altered the position in law to a significant degree.

The two benefits can thus be summarised as follows: 13

ibid [72].

MWB Business (UKSC) (n 1) [18].

MWB Business (CA) (n 1) [47].

ibid.

ibid [47].

ibid.

LAW AND COMMERCE

benefit to himself in so doing’20. (i) Shifting the Nature of Inquiry (ii) Considerations of Commercial Interest Firstly, Kenny Chng and Goh Yihan point out that the Court of Appeal made a subtle but important shift in the nature of the inquiry in determining whether there was a ‘practical benefit’ under Williams v Roffey.17 The old position, established by the Court of Appeal in In Re Selectmove Ltd, was that the Courts would assess the type of transaction in deciding whether to apply Williams v Roffey or not. If the transaction involved the part payment of debt, as in Foakes v Beer, then Williams v Roffey was entirely inapplicable. If the transaction involved something else, such as the provision of services, whether there was a ‘practical benefit’ or not would be considered. However, the reasoning of the Court of Appeal in MWB Business diverges from this, in what we might term the ‘new position’. Kitchin LJ and Arden LJJ focus their reasoning on the nature of the practical benefit instead of the nature of the transaction. They consider that while the part-payment of debt itself could not be consideration, other collateral benefits flowing from this part-payment could. The practical benefit they consider, of MWB ‘avoiding the void’18 of having unoccupied premises, stems from the part-payment of debt by Rock Advertising, and this is a benefit that would have been entirely excluded by the Courts in In Re Selectmove Ltd. While Peter Gibson LJ in In Re Selectmove Ltd was primarily concerned with not leaving ‘the principle in Foakes v Beer without any application’19, the reasoning employed by Kitchin LJ and Arden LJJ threatens to do exactly that. Their reasoning, as quoted above, would seem to imply that any collateral benefits arising from part-payment of a debt can be considered as ‘practical benefits’ and thus consideration. But if this were so, then there will be little difficulty in finding consideration in every case of part-payment to begin with. In Foakes v Beer, for example, we might well say that the agreement resulted in a collateral and practical benefit to Ms Beer, who did not have to expend time and resources in filing a legal claim for the money owed. This slippery slope was well-recognised by Peter Gibson LJ in In Re Selectmove Ltd, where he points out that ‘When a creditor and a debtor who are at arm’s length reach agreement on the payment of the debt by instalments to accommodate the debtor, the creditor will no doubt always see a practical 17 Kenny Chng and Goh Yihan, ‘A Renewed Consideration of Consideration: MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553’ (2016) 16(2) OUCLJ 323-332.

Secondly, it is argued that Arden LJJ’s judgement, in particular, muddied the waters by introducing the concept of ‘commercial interest’ in evaluating whether there was a practical benefit. Part of Arden LJJ’s judgement centered around MWB not being ‘faced with a part payment plan which… [they had] no commercial interest in accepting’21. On this basis, Her Ladyship found that it was proper for the trial judge to infer that there had been a practical benefit. But what exactly did she mean by ‘commercial interest’? Clearly, she was not using ‘commercial interest’ interchangeably with ‘practical benefit’. Apart from being a needless and confusing shift in terminology, using language in this way would seem to overlook Peter Gibson LJ’s comments in In Re Selectmove Ltd that ‘when a creditor and a debtor who are at arm’s length reach agreement on the payment of the debt by instalments to accommodate the debtor, the creditor will no doubt always see a practical benefit to himself in so doing.’22 If she were using the two terms interchangeably, this would imply that there were a commercial interest to be found in every case of part-payment, which would void her statement of any value. This also seems unlikely, considering the close attention given by the Court of Appeal to the judgement in In Re Selectmove Ltd. Rather, Arden LJJ’s comments, when read in context, seem to suggest that even once a practical benefit has been found (in situations where Williams v Roffey applies), the further factor of ‘commercial interest’ is to be considered by the judge in determining whether these practical benefits will suffice as consideration. This would be a significant qualification of the principle in Williams v Roffey, and how this might work in practice is not explored. The rest of Arden LJJ’s judgement provides no further guidance on this issue. It is unclear whether Arden LJJ indeed intended to further develop the principle in Williams v Roffey or whether she unwittingly made a simple misstatement. Regardless, it is argued that her judgement has muddied the already murky waters in the discussion surrounding consideration, and some clarity is sorely needed in this area.

Comparative Analysis with Singapore At this juncture, it is appropriate to examine how the 20

ibid.

MWB Business (CA) (n 1) [76].

In Re Selectmove (n 8) [481].

In Re Selectmove (n 8) 481.

LAW AND COMMERCE

Singapore legal system has dealt with the issue of consideration, and in particular, how it has attempted to reconcile Williams v Roffey and Foakes v Beer. By and large, the Singaporean system has followed the examples set out by English case law, applying consideration in a very similar way to the United Kingdom. However, there are three distinctions that need to be drawn. (i) Williams v Roffey – A Limited Application The principle in Williams v Roffey was almost immediately applied by the Singaporean courts in the months following the ruling. However, the Courts have expressed their reservations on extending the principle too far, instead preferring to apply it modestly and conservatively. In the case of Sea-Land Service Inc v Cheong Fook Chee Vincent,23 for example, the Singaporean Court of Appeal referred to Williams v Roffey twice as a ‘limited exception’24. Carter, Phang and Poole25 suggest that this was an attempt to limit the ambit of Williams v Roffey to cases where the other party’s promise was to pay more. In Gay Choon Ing v Loh Sze Ti Terence Peter (“Gay Choon Ing”),26 the Court of Appeal was even more explicit in lamenting the ‘very practical difficulties’27 generated by Williams v Roffey. Andrew Phang JA in the Court of Appeal was clearly concerned that ‘Williams has, by introducing the concept of a factual benefit or detriment, led... to a practical redundancy’28 in the sense that it may have made consideration too easy to find. As we will see later in this article, this is not wrong per se, but is undesirable in the absence of an alternative doctrine to replace consideration. (ii) Clear Separation between Foakes and Williams The Singaporean Court of Appeal in Gay Choon Ing also drew a clear line between Williams v Roffey and Foakes v Beer, making clear that Williams v Roffey was to be applied to cases where the promisee attempted to ‘enforce a promise by the promisor to pay more’.29 Foakes v Beer, on the other hand, was to apply to ‘the 23

[1994] 3 SLR 631.

ibid 634-635.

25 J W Carter, A Phang and J Poole, ‘Reactions to Williams v Roffey’ (1995) 8 JCL 248. 26

[2009] 2 SLR(R) 332.

ibid [100].

ibid [101].

ibid [102].

attempt by the promisee to enforce a promise by the promisor to take less’30. The Court noted that there was ‘no legal impediment from the perspective of precedent preventing the Singapore courts from extending the reach of Williams’31, although it stopped short of outright stating that this was preferable. Given that the Courts have had opportunities in subsequent cases to extend Williams v Roffey but have hitherto declined to do so, it seems likely that a clear separation will be maintained, at least for the time being. (iii) Potential Substitutes for Consideration It might seem counter-intuitive that the Singaporean Court of Appeal might apply Williams v Roffey conservatively and yet consider how consideration should be broadened or abolished in the same ruling. Yet this apparent contradiction might be explained on the grounds that the Courts were seeking to maintain ‘a legal mechanism... that will enable the courts to effectively and practically ascertain which promises ought to be enforceable’.32 It is not useful to say that Williams v Roffey should be extended, or that consideration should be abolished altogether, without first examining what alternative doctrines might take its place. One possibility considered by the Court of Appeal in Gay Choon Ing was that ‘the alternative doctrine of economic duress might well prove to be an appropriate replacement for the doctrine of consideration itself’33. In Singaporean law, the doctrine of economic duress operates to invalidate a contract where there has been (i) pressure amounting to compulsion of the will of the victim and (ii) such pressure is illegitimate.34 Thus, it seems possible that in cases of possible extortion - such as when a debtor pressures a creditor to accept less than what he is owed - the doctrine of economic duress might serve to protect creditors from being strong-armed into exploitative agreements, even if the doctrine of consideration were removed altogether. However, the Court of Appeal’s enthusiasm for economic duress was not necessarily shared by the wider academic community. Goh Yihan35 points out that it is first 30

ibid [102].

ibid [106].

ibid [117].

ibid [107].

34 240.

Tam Tak Chuen v Khairul bin Abdul Rahman [2009] 2 SLR(R)

35 Goh Yihan, ‘Compromising on Consideration in Singapore: Gay Choon Ing v Loh Sze Ti Terence Peter’ (2009) 23(1) CLQ 11.

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important to ensure that ‘the rationale for consideration is fully understood’36, and further ‘that the alternative doctrine is capable of giving effect to this rationale’37. Given, as they argue, that there is no clear consensus as to what consideration even does, it is difficult to start a conversation on what is to replace it.

Re-Considering Consideration It might be useful to consider the approach taken in the Singaporean system in deciding the way forward for consideration in the United Kingdom. Gay Choon Ing remains the single most extensive judicial exposition in Singapore on possible alternatives to the existing approach on consideration. As mentioned, in Gay Choon Ing, Andrew Phang JA considers the possibility of abolishing consideration and relying on other doctrines as a method of determining which promises ought to be enforceable. This is similar to the Supreme Court’s position in MWB Business, where it was suggested by Lord Sumption that the principle in Foakes v Beer would have to give way to the principle in Williams v Roffey. A wholesale endorsement of Williams v Roffey would seem to dilute the doctrine of consideration, which might take English law a step closer towards the outright abolition that academics like Andrew Burrows38 have called for. Where Gay Choon Ing goes a step a further is in considering related doctrines. Andrew Phang JA considers the doctrines of undue influence and unconscionability in addition to economic duress, given the ‘possible linkages’39 between these doctrines. In his case judgement, he suggests that these doctrines ‘appear to be more clearly suited not only to modern commercial circumstances but also (more importantly) to situations where there has been possible “extortion”’.40 What reasoning does Andrew Phang JA provide for favouring these alternative doctrines? He refers closely to the English case of Glasbrook Brothers Ltd v Glamorgan City Council.41 In that case, it was held that performance of an existing public duty could not constitute consideration, but going beyond such duty could. In Phang JA’s view, one important purpose of 36

ibid 13.

consideration was to protect the people against possible tyranny by the state, to guard against ‘the danger… of extortion by public authorities’42. If this is so, he argues, other doctrines can serve precisely the same purpose, with less controversy and dispute. However, it should be noted that Andrew Phang JA does conclude by remarking that the ‘maintenance of the status quo (viz, the availability of both (a somewhat dilute) doctrine of consideration as well as the alternative doctrines canvassed above) may well be the most practical solution inasmuch as it will afford the courts a range of legal options to achieve a just and fair result in the case concerned’43. It is suggested that even if UK Courts extend the principle in Williams v Roffey to situations covered by Foakes v Beer, they should be wary of abolishing consideration entirely. Even if consideration is preserved only nominally (and in fact can be found in nearly every situation), it has value in the sense that it can still be applied in some situations where alternative doctrines such duress, undue influence and unconscionability fall short.

Conclusion In the final analysis, it is clear that the case of MWB Business has had significant impact on the doctrine of consideration. The Court of Appeal ruling has made important, though disarmingly subtle, alterations to the attempted reconciliation in In Re Selectmove Ltd, thereby affecting the law’s position on the clash between Williams v Roffey and Foakes v Beer. Furthermore, the terminology employed in the ruling of Arden LJJ has further confused the issue. It is thus unfortunate that the UK Supreme Court declined the opportunity to address the issue directly. Regardless, the UK Supreme Court did concede that reforms to consideration, and to Foakes v Beer, were long overdue. On this basis, it is argued that an examination of Singaporean case law yields a useful perspective on what, if any, alternative doctrines might be proposed to supplement or replace the doctrine of consideration. It is further argued that there is value in preserving the doctrine of consideration instead of outright abolition.

38 Andrew Burrows, ‘Improving Contract and Tort’ in Andrew Burrows (ed), Understanding the Law of Obligations: Essays on Contract, Tort and Restitution (1998) 164.

(n 26) [112].

ibid [113].

(n 26) [107].

[1925] AC 270.

ibid [118].

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The Defence of Illegality Defended: Analysing Patel v Mirza in light of Ochroid Trading Ltd v Chua Siok Lui Tee Ming Zee, University of Oxford

Introduction

to work against their favour.

‘No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act.’1 Lord Mansfield’s dicta in Holman v Johnson represents the orthodox position of the common law defence of illegality: that a person should not be able to benefit from their own wrongdoing. The rationale behind this doctrine is the preservation of the integrity of the legal system2: to allow an actionable claim founded upon an illegal act would produce ‘inconsistency and disharmony’3, by ‘giving with the left hand what [the law] takes with the right’4. The defence applies in a wide range of commercial scenarios, as where an investor claims loss for a void investment because his representative failed to hold the necessary licence to invest, or where a buyer seeks the return of money paid for goods sold illegally.

While the rationale for the defence is clear, the rules it operates by are less so. As Gloster LJ in the Court of Appeal opined in Patel v Mirza (“Patel”),7 ‘it is almost impossible to ascertain or articulate principled rules from the authorities’, either for the recovery of money or assets transferred under illegal contracts, or for the range of cases to which the defence might apply – such as claims for contractual damages, specific performance, tort, or unjust enrichment. Lord Toulson in the Supreme Court (hearing the same case decried the law of illegality as fraught with ‘uncertainty, complexity and sometimes inconsistency’8. And the Singapore Court of Appeal in Ting Siew May v Boon Lay Choo (“Ting Siew May”) described the defence as being ‘one of the most confused (and confusing) areas in the common law of contract’9.

However, the defence of illegality cannot be absolute. In certain situations, a claim tainted by illegality can and should be enforced by courts. This is because the plaintiff’s breach may be so egregious such as to outweigh the seriousness of the defendant’s initial illegality; for example, the forfeiture of contractual remedies because of minor or incidental transgressions would seem like an unjust outcome.5 This difficulty particularly plagues the broad category of contracts that are not expressly prohibited by statute nor common law public policy, but which nevertheless involve the commission of a legal wrong in their formation, purpose or performance6. Thus, this swathe of contracts could potentially be rendered unenforceable, yet plaintiffs have no clear guidance on the degree of knowledge or participation in illegality required before a defence of illegality applies

Academics and practitioners are united in their desire to uphold a coherent legal system; however, disagreements arise on the method best able to achieve this ideal. Should we vest our trust in judges to direct the law on questions of policy, or task them to apply predetermined principles to the facts? Alternatively, is there a compromise solution available, such as the ‘structured discretion’ proposed by the Law Commission10? Whatever the answer may be, courts must take care that this process of rationalisation does not, as Lord Sumption put it, ‘simply substitute a new mess for the old one’11.

Holman v Johnson (1775) 1 Cowp 341, 343.

2 See McLachlin J’s dicta in Hall v Hebert [1993] 2 SCR 159 [169]: ‘the basis of this power [to allow the illegality defence], as I see it, lies in duty of courts to preserve the integrity of the legal system, and is exercisable only where this concern is in issue’, affd in Patel v Mirza [2016] UKSC 42 and Ochroid Trading Ltd v Chua Siok Lui [2018] SGCA 5 [20].

Hall v Herbert [1993] 2 SCR 159 [100].

Patel (n 2) [99].

This article considers two such methods of rationalisation: the discretionary approach of Patel, which departed from the traditional strict position of Holman v Johnson, and the approach of the Singapore Court of Appeal in Ochroid Trading Ltd v Chua Siok Lui (“Ochroid”),12 which upheld the traditional position subject to a caveat. It argues that the Singapore approach manages to balance 7 [2014] EWCA Civ 1047 [47], affd in the United Kingdom Supreme Court in Patel (n 2) [15]. 8

Patel (n 2) [265].

[2014] 3 SLR 609 [3].

5 Lord Sumption, ‘Reflections of the Law of Illegality’ (2012) 20 RLR 1, 2; Law Commission, The Illegality Defence: A Consultative Report (Law Com CP No 189, 2009) para 3.31.

10 Law Commission, The Illegality Defence in Tort (Law Com CP No 160, 2001) para 7.18. 11

Patel (n 2) at [265].

(n 2).

Ochroid (n 2) at [31].

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these conflicting positions by circumscribing legal uncertainty within a residual area of law, while still preserving a degree of flexibility through the inclusion of an analysis on proportionality.

History of the Illegality Defence The history of the defence of illegality is fraught with twists and turns. Before Patel, courts had adhered to the ‘reliance test’ established in Tinsley v Milligan13: that a defence of illegality, subject to certain exceptions, would succeed only if the defendant had ‘relied’ on the plaintiff’s own illegal act. This test has been heavily criticised for its arbitrariness.14 Focusing on procedural issues rather than policy reasons underpinning the defence of illegality, it had resulted in contradictory trial outcomes when otherwise identical cases were tweaked slightly on their facts. For example, in Tribe v Tribe15, the Court of Appeal was able to avoid the harsh effects of the reliance test. Since rebutting of the presumption of advancement was necessary, they were able to reference the doctrine of locus poenitentiae in order to sidestep the reliance test and its ramifications. With this critique in mind, the Supreme Court in Patel rejected the reliance test. Instead, a ‘range of factors’ approach was advanced, foregrounding policy considerations and fact-specificity. It was held that the illegality defence only applied if it would be contrary to the public interest to enforce a claim, where to do so would be harmful to the integrity of the legal system. To determine this, Lord Toulson considered three factors: a) the underlying purpose of the prohibition which has been transgressed and whether that purpose will be enhanced by denial of the claim, b) any other relevant public policy on which the denial of the claim may have an impact, and c) whether denial of the claim would be a proportionate response to the illegality, bearing in mind that punishment is a matter for the criminal courts.16

to the contract, whether it was intentional and whether there was marked disparity in the parties’ respective culpability.’18 The facts of the case were as follows: Patel had paid £620,000 to Mirza to bet on the price of shares based on insider information. Said information was mistaken, and the scheme failed as a result. Patel sued for the recovery of the sum, premised on a claim on unjust enrichment. Mirza in turn relied on the defence of illegality, arguing that no such obligation could be enforced based on insider trading. The Court had to consider the scope of restitutionary recovery of the benefits conferred under an illegal contract, through an independent cause of action in unjust enrichment. It held that restitution was permitted: there was no logical basis why considerations of public policy should require Patel to forfeit the monies paid to Mirza. Since the moneys were never used for the purposes for which they were paid, and Patel was seeking to unwind the arrangement, and not profit from it, the policy underlying the statutory provisions on insider trading was not contravened.19 Although the relevant cause of action which Patel focused on was unjust enrichment, the majority nevertheless held that the principles espoused were to be of general application in ‘civil claims…relating to contract, property, [and] tort.’20 The Singapore Court of Appeal did not adopt this approach. In Ochroid, it upheld the traditional rule mooted in Holman v Johnson that no recovery is permitted under a prohibited contract, subject to an important caveat elucidated in Ting Siew May. The court employed a two-stage inquiry, with Andrew Phang JA delivering the judgment: [first stage] …the court will have to ascertain whether the contract is prohibited either pursuant to a statute (expressly or impliedly) and/ or an established head of common law public policy21. If the contract is indeed thus prohibited, there can be no recovery pursuant to the (illegal) contract.

On the third issue of proportionality, no definitive test was offered. However, Lord Toulson referred to a ‘range of factors’ identified by Professor Andrew Burrows in his work Restatement of the English Law of Contract,17 including ‘the seriousness of the conduct, its centrality 13

[second stage] This is subject to the caveat that, in the general common law category of con-

[1994] 1 AC 340.

14 Hugh Stowe, ‘The “Unruly Horse” Has Bolted: Tinsley v Milligan’ (1994) 57 MLR 441; Law Commission (n 5).

Patel (n 2) [107].

[1995] 3 WLR 913.

Patel (n 2) [115].

Patel (n 2) [120].

Patel (n 2) [2].

17 Andrew Burrows, Restatement of the English Law of Contract (OUP 2016).

21 Such heads may include: contracts prejudicial to the administration of justice, contracts to commit a crime, contracts to deceive public authorities, and contracts to oust the jurisdiction of the courts.

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tracts which are not unlawful per se but entered into with the object of committing an illegal act (and only in this category), the proportionality principle laid down in Ting Siew May ought to be applied to determine if the contract is enforceable.’22 Ting Siew May had identified five factors to be considered when assessing proportionality: (a) whether allowing the claim would undermine the purpose of the prohibiting rule; (b) the nature and gravity of the illegality; (c) the remoteness or centrality of the illegality to the contract; (d) the object, intent, and conduct of the parties, and (e) the consequences of denying the claim.23 At the second stage, and notwithstanding that the contract was prohibited under the first stage, the court would consider granting damages on a restitutionary basis24. This would be possible via three legal avenues: (a) where parties are not in pari delicto; (b) where the doctrine of locus poenitentiae applies because there has been timely repudiation by the plaintiff of the illegal contract, and (c) where the plaintiff brings an independent cause of action for the recovery of the benefits conferred under the illegal contract which does not allow the plaintiff to enforce, and thereby profit from, the illegal contract. Moreover, the availability of restitutionary damages would be subject to the principle of stultification, which considers whether allowing the claim would undermine the fundamental policy that rendered the underlying contract void and unenforceable in the first place. The facts of the case are as follows: Ochroid Trading Ltd had provided ‘loans’ to VIE Import & Export pursuant to over 700 agreements, and VIE had failed to pay Ochroid back. Ochroid sued VIE for breach of contract and unjust enrichment. VIE relied on the defence of illegality, arguing that the sums were loans and the plaintiff was not a licensed moneylender under the Moneylenders Act (Cap 188, 2010 Rev Ed) (“MLA”). In the first stage of inquiry (the ‘claim in contract’), the court held that the moneylending contracts were unenforceable under the MLA; as such, Ochroid’s claims failed, and the court did not have to apply the principle of proportionality. In the second stage of inquiry (the ‘claim for restitution’), the avenues for recovery on in pari delocto and locus poenitentiae bases were not relevant. However, the requirements for the third avenue – avenue (c) as pointed out above – were satisfied: (i) the defendant had been enriched; (ii) the enrichment was at the

Ochroid (n 2) [176] (emphasis added).

(n 9) [70].

24 Relief is only by way of restitution; it does not allow the plaintiff to enforce or profit from the illegal contract: Ochroid (n 2) [42].

plaintiff’s expense; and (iii) the enrichment was unjust since there had been a total failure of consideration. The court then considered the principle of stultification. It held that to permit recovery would stultify the social and public policy against unlicensed moneylending undergirding the MLA, specifically under section 14(2)(a).25 In particular, the court referred to the strong need to deter illegal moneylending due to its status as a serious social menace, and the need to maintain the integrity of Singapore as an international finance centre.26 As such, the alternative claim in unjust enrichment could not succeed.

Comparing the Two Approaches Ochroid differs from Patel in two key ways: its principle-based approach; and its treatment of proportionality. First, Ochroid rejects the balancing exercise adopted in in Patel, and instead keeps in line with the traditional principle-based position. Any scope for a discretionary approach is confined to the residuary common law category of contracts entered into with the object of committing an illegal act. This is contrasted to the UK approach, where the remit of discretion extends to the entire field of illegality.27 Second, the scope for application of proportionality is smaller in Ochroid than in Patel, but where it does apply, it takes centre stage. In Patel, the majority applied the balancing exercise (which included considerations of proportionality) to all cases of illegality at common law28. This would include scenarios where even a common law head of claim is transgressed. Whereas in Ochroid, proportionality is relevant only where a contract is tainted by illegality but not prohibited by an established head of common law. In other words, once a contract is prohibited by common law, it must fail under the defence of illegality. However, within this residual scope, the concept of proportionality takes centre stage in the balancing approach; it is ‘not simply one of the factors to be considered, but applies as an overarching principle’29. This is contrasted to Patel, where the majority adopted a more general test, considering Toulson’s broader ‘range of factors’ approach (in which proportionality is just one factor). The Patel approach is an overtly consequentialist one. It approaches disputes by asking whether a Court should assist the plaintiff to enforce their claim (based on a 25

Ochroid (n 2) [215].

ibid [219].

ibid [110].

28 Notably, the balancing exercise does not apply to statutory illegality: Patel, at [109]. This is the position of Singapore law in Ochroid as well: Ochroid (n 2) [40]. 29

Ting Siew May (n 9) [68].

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‘range of factors’ as reasons), instead of asking whether a plaintiff has the right to bring a claim (based on substantive law governing the transaction)30. This is best illustrated where Lord Toulson eschewed analyses on whether title had passed under an illegal contract, and instead focused on whether the Court would ‘lend its assistance to an owner to enforce his title’31. In contrast, Ochroid nuances this consequentialism. It begins with a principled analysis, confining outcome-based reasoning to residual branch of contracts illegal in nature.

Evaluating the Two Approaches Patel and Ochroid represent the UK and Singapore’s distinct approaches to the same ideal: that the defence of illegality should preserve the integrity and coherence of the legal system. The Patel approach vests greater flexibility in the law, giving wider scope to the judiciary to incorporate policy factors into their analysis; whereas the Ochroid approach advocates for a more rule-based system, mindful that the curtailment of the illegality defence should be based on an analysis driven by clear principles. There are four points of tension between these approaches. The concept of certainty Andrew Phang JA’s primary critique of Patel was that it ‘generated more uncertainty in introducing even more discretion in an area of contract law that is already excessively fluid’32. Indeed, Lord Toulson had declined to identify a ‘prescriptive or definitive list’ of material factors to the proportionality analysis, instead offering a ‘range of factors’ based on Professor Burrows’ recommendations33. There are three levels of legal uncertainty at play here: first, the list of factors is an open one; secondly, the weight attributed to each factor when applied to different cases may vary; third, the balancing approach itself leaves room for debate. The strongest philosophical objection to legal uncertainty highlights its disregard for human autonomy. A legally uncertain regime fails to provide a coherent framework of laws that an individual can use to inform his conduct. He cannot consciously avoid legal liability, nor can he choose to commit legal wrong, with no reference point of ‘lawfulness’ to evaluate his actions against in the first place. Certainly, Lord Kerr and Lord Toulson have argued that the virtue of certainty is less important with crimi-

nals or those ‘engaged in disreputable conduct’34. However, it is submitted that the law must apply equally to all regardless of their pedigree or criminality,35 and legal certainty cannot be conditional upon the social or moral abhorrence of one’s conduct. However, the concern that Patel insufficiently protects legal certainty may be overstated. Firstly, the negative ramifications of uncertainty have not materialised in case law history36. Secondly, if Patel results in a regime that directly targets the core of injustice, legal uncertainty will be minimized. Giliker argues that the current uncertainty in the law stems from judicial attempts to circumvent the ‘unjust consequences’ of the defence of illegality, namely that it enables the defendant to reap the benefits of the contract, however unjustly acquired. Giliker cites the example of the Moneylenders Act (Cap 188) of Singapore, and the case law surrounding it. Section 15 plainly provides that ‘no contract for the repayment of money lent by an unlicensed moneylender shall be enforceable’. However, where courts have judged that the enforcement of such contracts would be the just outcome, they have circumvented Section 15 by interpreting transactions to be outside its ambit: either as an exception to the rule (as in Lorrain Esme Osman v Elders Finance Asia Ltd37), or because the contract was not a ‘loan agreement’ within the meaning of the Act (as in Subramaniam Dhanapakiam v Ghaanthimathi38). As such, if the Patel direction can deliver more just consequences, courts will be confident in applying the rule in a consistent manner, leading to the development of a ‘more coherent and structured concept of illegality’39. Regardless of whether one is persuaded by this analysis, the Ochroid approach attempts to circumscribe the impact of uncertainty. The discretionary space given to judges has been confined to a residuary area of common law illegality: that of contracts not prohibited per se, but only those ‘tainted’ with some form of illegality. Moreover, the balancing approach is anchored to an overarching principle of proportionality, which is a more ‘well-established legal principle (than the ‘range of factors’ test)’, drawing on lengthy canons of conventional use40. Judges have historically referred to proportionality in the contexts of assessing damages, taxation of costs, criminal sentencing, and more. This enhances the predictability and certainty of law. 34

Patel (n 2) [113] (Lord Toulson), [137] (Lord Kerr).

Patel (n 2) [158].

Law Commission (n 10).

30 Benjamin Ong, ‘Illegality and the civil law in Singapore: Lessons from the UK? [2017] Singapore Law Gazette. 12, 14.

[1992] SLR 369.

Patel (n 2) [110].

[1991] SLR 432.

Ochroid (n 2) [20].

39 Paula Giliker, ‘Restitution, Reform and Illegality: An End to Transactional Uncertainty?’ [2001] SJLS 102, 114.

Patel (n 2) [107].

Ochroid (n 2) [123].

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Issues concerning clarity Burrows asserts that the defence of illegality involves so many variables that a normal formulation of rules is problematic; indeed, this confusion ‘seems at least as likely to give rise to disputes as any discretionary regime’41. He argues that admitting a policy-based approach resolves this problem, leading to greater transparency in judges’ reasoning42. However, it is more convincingly argued that Patel undermines clarity43. Goudkamp reasons that the exercise of weighing the three factors in Patel is an impossible one, because they are incommensurable. In a logical exercise, a comparison of factors can only be achieved with a common metric of assessment, yet Patel’s policy-based test identifies no such metric. In consequence, the law applied to facts could result in incommensurable outcomes, because each public policy is underpinned by different rationales that cannot be easily prioritised against another. In United Project Consultants Pte Ltd v Leong Kwok Onn,44 a company had been penalized for making inaccurate tax returns. The Singapore Court of Appeal allowed its claim against its tax agent for failing to warn it about such inaccuracies. Yet these two wrongs sit uneasily beside one another: equally strong arguments can be advanced for the policy importance of pursuing the company’s violation of tax law, and that of penalizing the agent’s negligence. Certainly, judges have had no difficulty ‘weighing’ policy factors historically. However, such an argument would miss the point: the fact that responses can be given to an incoherent question does not make the question coherent45. Judicial competence Stevens attacks the idea that judges should be permitted to make decisions on policy: they lack both the political mandate to weigh competing policy claims, and the technical competence to make informed policy decisions46. The field of torts is especially susceptible to policy involvement, as it engages areas of socioeconomic life such as product liability, professional responsibility, and the compensation of economic loss. 41 Jonathan Mance, ‘Ex Turpi Causa – When Latin Avoids Liability’ (2014) 18(2) Edin L Rev 175, 192. 42 CLP 55.

Andrew Burrows, ‘Illegality After Patel v Mirza’ (2017) 70(1)

43 Clarity here is distinguished from certainty: certainty pertains to the reproducibility of legal decisions, such as that of consistent decisions across different trial judges, whereas clarity is the distinctness of outcomes in a case. 44

[2005] 4 SLR(R) 214 (CA).

However, this argument can be rebutted on three grounds. First, the structures which govern the common law make it well-placed to opine on policy. Gardner emphasizes how precedent, incrementalism and the weight of legal tradition act as severe constraints on what judges may decide.47 Ample experience is necessary before one becomes a judge, and major decisions undergo a period of intense debate. Such measures safeguard the credibility of our legal institutions. Lord Neuberger adduced to this idea in his address to the Singapore Conference on Protecting Business and Economic Interests concerning contemporary tort law: ‘common law is experience, not logic… [and] a judge’s decision in a particular case is ultimately based on centuries of judicial experience of multifarious cases.’48 Because judges cannot act radically, they cannot make radical errors; moreover, error where committed can be rectified via legislative override. Secondly, tort law is impossibly intertwined with policy considerations. Burrows argues that the very application of the ‘duty of care’ concept acknowledges that what is ‘reasonable’ may vary according to the importance of the activity being pursued.49 Additionally, policy-based concerns such as the ‘floodgates’ argument of pure economic loss50 and public authority liability51 are core driving forces in the development of different heads of claim in tort. As such, to advance a law precluding policy concerns would be to desiccate the body of law we are concerned with. Thirdly, it incoherent to hold that policy-influenced reasoning is permissible in other areas of law, but not in tort – or, in particular, not in the confined tort defence of illegality. In public law, judicial review requires the application of principles of proportionality and Wednesbury unreasonableness52; in contract law, decisions under the Unfair Contract Terms Act 1977 consider factors such as bargaining positions and availability of insurance; in the Human Rights Act 1998, judges are explicitly granted the mandate to incorporate policy considerations into their assessment of the constitutionality of statutes53. All of the aforementioned feature reasoning from policy grounds. 47 37-42.

John Gardner, Law as a Leap of Faith (OUP 2012) 19-53, esp

48 Lord Neuberger, ‘Some Thoughts on Principles Governing the Law of Thoughts’ (Singapore Conference on Protecting Business and Economic Interests, Singapore, 19 August 2016) <https://www.supremecourt.uk/docs/speech-160819-03.pdf> accessed 10 July 2018, para 44. 49

Burrows (n 42) 69.

50 Spartan Steel & Alloys Ltd v Martin & Co (Contractors) Ltd [1973] 1 QB 27. 51

Hill v Chief Constable of West Yorkshire [1989] AC 53.

45 James Goudkamp, ‘The End of An Era? Illegality in Private Law in the Supreme Court’ (2017) 133 LQR 14, 19.

52 Paul Craig, ‘The Nature of Reasonableness Review’ (2013) 66 CLP 131.

Robert Stevens, Torts and Rights (OUP 2007) 308-311.

Bellinger v Bellinger [2003] UKHL 21.

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A similar mandate has been granted to the Singapore Court in the case of Spandeck Engineering v DSTA54. The explicit admission of the role of policy in judgments concerning other areas of law demands similar concessions for tort law. The constitutional remit of the judiciary and Parliament is a perennially sensitive topic. The culture of judicial deference, counterbalanced by modest instances of judicial assertiveness, are part of a give-and-take dynamic characteristic of the relationship between the judiciary and the legislature. Indeed, a large part of the controversy generated by Patel was that the Supreme Court had given effect to proposals of the Law Commission, which the UK Parliament had not themselves acted on55. It is submitted that the Singapore Court of Appeal’s restraint is an astute political manoeuvre: it did not foreclose the possibility of adopting a broad balancing approach per the majority of Patel, instead stating that such an approach would ‘have to be introduced by the legislature.56‘ The Law Reform Committee of the Singapore Academy of Law has, too, set out its recommendations57. The baton has now passed to Parliament.

edged that going forward, the process of application of legal principle to fact may be problematic, but that such difficulties would be an inevitable part of adjudication61. This raises a curious question about how the law remedies its own contradictions: when constructing a priori principles in a neat and orderly manner, are we merely glossing over problems, foisting them downstream to another stage of the judicial reasoning process? Such is a testament to the practical difficulties of law-making: how to create a sufficiently flexible scheme of exceptions to the defence of illegality, while maintaining the doctrine’s original purpose and form. Nevertheless, it is submitted that Ochroid does this soundly. The two-stage test retains the virtue of certainty through its principle-based decision-making model, while permitting a margin of flexibility by introducing the element of discretionary restitution, mediated by the proportionality analysis. Lord Toulson, in his leading judgment in Patel, undertook a thorough analysis of the defence of illegality in other Commonwealth jurisdictions62. Were he to consider the decision now, he may find lessons to be drawn from Singapore’s approach.

Ramifications on the appeals process Already, appellate courts are hesitant to revisit the exercise of a discretion vested in a trial judge: per Jackson v Murray, an appellate court must respect the differing views of judges ‘within the limits of reasonable disagreement (emphasis added)’, interfering only where the court below reaches a decision which was ‘not one which was reasonably open to it’58. The bar to review is pegged high. Giving trial judges the latitude to decide which factors are material and the weight that they carry makes appeals even more unpromising, because the range of ‘reasonability’ has been cast so wide59. Indeed, a great deal will be left to judges’ visceral reactions to the particular facts of a case60. Moreover, this ossifying impact on the appeals process entrenches the three previous critiques of Patel: uncertainty, incommensurability and judicial competence.

Conclusion Andrew Phang JA describes Ochroid’s position as clear, ‘insofar as the legal approach is concerned.’ He acknowl54 Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 1 SLR 720, [2006] SGHC 229. 55

Goudkamp (n 45) 19-20.

Ochroid (n 2) [121].

57 Law Reform Committee, Relief from Unenforceability of Illegal Contracts and Trusts (Singapore Academy of Law 2002). 58

[2015] UKSC 5 [28].

Goudkamp (n 45) 19.

Ochroid (n 2) [66].

Patel (n 2) [263].

Patel (n 2) [50]-[66].

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The Problem with Quantification of Unquantifiable Damages for Breach of Contract Muhammad Hasif, University of Southampton Introduction Contractual promises are voluntary promises between parties for an exchange of considerations, for example: monies, services, or products, which could be set out in specific and legally enforceable terms.1 Based on the importance of the terms, a non-performance or defective performance could be considered a breach of contract.2 The Courts will then look to correct the injustice a party suffers for the breach. This article will focus on one method of mitigating the loss suffered: awarding damages. For a vanilla-type case of breach of contract, where the damages that should be awarded is clear, either because the terms dictate it or the amount that would put the injured party in the position as if the contract was carried out is easily ascertainable, the court could award damages based on the clear circumstances.3 However, this is hardly ever the case. More often than not, the circumstances of the case would obscure the clarity required for the quantification of damages. This article will look at these specific problems, ie when the facts of the case can hinder quantification, and how the United Kingdom and Singapore courts have dealt with this issue. This article will also look at how both jurisdictions should develop this area of law moving forward.

Issue of Quantification

interests: expectation, reliance, and restitution interests.4 This formulation has since been explored by academics,5 as well as ruled for and against by the courts. Before the turn of the 20th Century, damage arising from a breach of contract could be first defined in two ways: direct and consequential damages. Direct damages refer to the damages that arise specifically due to the breach of the contract. Consequential damages could be defined as damages that arise due to the breach of the contract, but not specifically from the act(s) of the breach but the after-effects of those act(s). The UK courts have since removed awarding consequential damages from jurisprudence through cases such as Hadley v Baxendale6 and The Heron II.7 However, even with direct damages, the issue of unquantifiability could still arise. The first possible reason that this is the case is that the courts have not figured out which of the aforementioned interests it wants to protect, as the different interests could come up with different formulations for the quantification of damages. Secondly, using the stringent Robinson-type damages could result in the plaintiff making a “windfall” of damages. Here, the courts then created a whole jurisprudence of “compensatory” cases, where it has deemed that the injured party is not entitled to the protection of its expectation or reliance interest but only to compensation.8

The general rule for damages is set out in the case of Robinson where it was reasoned that the nature of damages should be to the effect of putting the injured party in a position as if the contract had been carried out. However, the problem arises when the courts have to deal with circumstances where the quantification based on the Robinson principle is not so clear-cut. The reaction of the Courts and academics since has been to try and define the interests that the courts should try to protect. This way, the methodologies for quantification could be narrowed down to protect those interests. The earliest formulation could be traced back to two articles written by Fuller and Perdue, outlining three basic

The last possible reason that the issue of unquantifiability would arise is drawn from the nature of the promise and the considerations between the parties. Contracts are created by more than just commercial parties and beyond just the exchange of quantifiable considerations. The first example of this is a contract for loyalty and fidelity, where one party contracts to give up the freedom to act in a particular manner. Here, usually in a non-compete clause of an employment contract that takes effect in the event of a dismissal or resignation, the party is contracted to

1 Charles Fried, Contract as Promise: A Theory of Contractual Obligation (Harvard University Press 1981).

Hadley v Baxendale (1854) 156 ER 145.

2 L Schuler AG v Wickman Machine Tooles Sales Ltd [1974] AC 235; The Mihalis Angelos [1971] 1 QB 164.

Czarnikow v Koufus (“The Heron II”) [1969] 1 AC 350.

8 British Westinghouse v Underground Electric Railways [1912] AC 673; Beswick v Beswick [1968] AC 58; Surrey Council v Bredero Homes Ltd [1993] 1 WLR 1361.

Robinson v Harman (1848) 154 ER 363 (“Robinson”).

4 L. L. Fuller & William R. Purdue Jr, The Reliance Interest in Contract Damages: 1, (1936) 46 Yale Law Journal 52. 5 Alan Bunbury, Quantification of Contractual Damages: Have We Moved on from Fuller and Perdue, (2014) 13 Hibernian L.J. 1; Daniel Friedmann, The Performance Interest in Contract Damages (1995) 111 LQR 628.

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not act in a particular way that has been stipulated in the contract. However, if that party reneges on or breaches on the obligation, the damages to the injured party could be argued as unquantifiable as it is predicated on so many hypotheticals. The other example is a contract where subjective enjoyment of the consideration is the main consideration for one party to enter into the main contract. The damages for this kind of contracts could be considered as non-pecuniary loss, where the UK courts used to deny the injured party the loss of “injured feelings”9 until the case of Watts v Morrow.10 In that case, the court reasoned that where the contract’s main purpose is to provide the subjective consideration and the effect of the non-provision or defective provision of that particular is the physical and mental suffering of the injured party, then there is an exception to the rule of the courts not awarding damages for “injured feelings”.11 That being said, Lord Bingham’s reasoning did not provide the adequate methodology for quantification of damages, a question that still remains.

The Different Methods of Solving the Problem A. Wrotham Park-Damages Model As the name suggests, the model is derived from the case of Wrotham Park, where the court reasoned for a methodology for quantification of damages that would eventually be referred to in jurisprudence as WrothamPark damages.12 In that case, it was reasoned that the court could award damages amounting to what the parties would have negotiated for to release one party from the contractual obligations. In 2016, the UK Courts returned to the discourse of whether Wrotham-Park damages are available as a remedy for breaches of contract, in the Court of Appeal judgment of One Step.13 In that case, the Court of Appeal reasoned that there should be a two-step test that the Courts must utilise so as to apply the Wrotham-Park damages. The first step is for the Courts to determine whether it would be very difficult in the circumstances for the claimant to prove identifiable financial loss or where compensation cannot be measured solely by identifiable financial loss.14 The second step is to decide if WrothamPark damages are a just response to the breach.15 Its

justification is that on the authority of AG v Blake16 and Experience Hendrix, it is well established that WrothamPark damages could potentially be available in breach of contractual claims.17 Singapore Courts also dealt with the issue of WrothamPark damages in Clearlab, where the court reasoned, although not in favour for awarding the damages, that Wrotham-Park type damages were possible for use in breaches of contract.18 However, it was grounded in a factual matrix of three considerations: (a) the likely parameters given by ordinary commercial considerations bearing on each of the parties; (b) any additional factors particularly affecting the just balance to be struck between the competing interests of the parties; and (c) the court’s overriding obligation to ensure that an award of damages for breach of contract does not provide relief out of proportion to the real extent of the claimant’s interest in proper performance judged on an objective basis by reference to the situation which presents itself to the court.19 This reasoning was clarified further in the case of JES International Holdings Ltd v Yang Shushan.20 In JES, the court clarified that the Wrotham-Park damages that was incorporated by the courts in Clearlab is based on the position that the parties would have put each other in after a negotiation for an exchange of consideration for a release from contractual obligations.21 In PH Hydraulics,22 the Court of Appeal then discussed the novel issue of whether Wrotham-Park damages could replace punitive damages as a remedial alternative to punitive damages.23 It reasoned that although the nature of Wrotham-Park damages differs from the traditional loss-based measure of damages, its primary purpose of protecting the claimant’s interest in contractual obligations and providing compensation for loss makes it compensatory in nature. However, the reasoning that created an exceptional circumstance for justifying Wrotham-Park damages in AG v Blake reveals a major issue with this line of reasoning. In this case, the plaintiff argued that the defendant had breached his contract by using information that he was contractually obligated not to disclose and thus gained earnings that the government was entitled to. The plaintiff therefore sought award of restitutionary 16

Attorney General v Blake [2000] UKHL 45, [2001] 1 AC 268.

Addis v Gramophone [1909] AC 488.

17 Leo Zhi Wei, ‘Wrotham Park Damages Revisited’ (February 2018) retrieved May 2018 from: <https://lawgazette.com.sg/feature/ wrotham-park-damages-revisited/>

Watts v Morrow [1991] 1 WLR 1421.

Clearlab v Ting Chong Chai [2014] SGHC 221

ibid at 1445 (per Lord Bingham).

ibid [342]

12 Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798.

20 JES International Holdings Ltd v Yang Shushan [2016] SGHC 52; [2016] 3 SLR 193.

13 Karren-Morris Gardner & Andrea Morris-Gardner v One Step (Support) Ltd [2016] EWCA Civ 180

ibid at [210]-[217].

One Step (op cit n 13) at [85].

22 PH Hydraulics & Engineering Pte Ltd v Airtrust (HK) Ltd and another appeal [2017] 2 SLR 129.

ibid.

ibid at [82].

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damages. The Court agreed with the plaintiff’s argument, but its reasoning had one major flaw, as highlighted by Lord Hobhouse in his dissenting judgment. He reasoned that for restitutionary damages to be awarded, it would necessitate the conclusion that the plaintiff had a proprietary claim over the earnings that the breaching party had gained. The nature of restitutionary damages, taking away the benefit gained by one party and giving it to the innocent party, meant that the innocent party had a proprietary claim over the earnings—essentially, the breaching party was holding on to the earnings on behalf of the innocent party. The proprietary nature of such damages highlights a major issue of any proponent for the use of Wrotham-Park damages, either in the United Kingdom or Singapore Courts. One of the salient aspects in the factual matrix for Wrotham Park is that the plaintiff had a proprietary claim over the subject of the covenant. Whilst a restrictive covenant is still a contractual obligation, unlike almost all other types of contract, the plaintiff in Wrotham Park had a proprietary claim over the property that the defendant was contractually obligated not to alter. This cannot be said to be the same for all cases, especially for the two aforementioned examples of contracts. In most cases, the injured party or claimant does not have a proprietary claim over the end product or service. Wrotham Park should therefore be distinguished, since a proprietary claim over subject matter would always give more leeway for the Courts to reverse the injustice done on the claimant. A purposive use of the principle laid down in the case would lead to uncertainty and confusion. This confusion has undoubtedly resulted in the Courts attempting to categorise Wrotham-Park damages as part of damages for conventional breaches of contract, either by justifying them as restitutionary or compensatory damages. Proponents of Wrotham-Park damages being classified as compensatory would argue that it fits as a subset to the traditional compensatory model of damages, which is to compensate for the injured party’s loss as a result of the breach. Their argument is that Wrotham-Park damages seek to compensate for the loss that the injured party suffers as a result of the loss of opportunity to negotiate for the breaching party’s release from the contractual obligation. However, the biggest flaw in this argument is the assumption that the parties would have come to the negotiating table to discuss the release. Whilst it could be argued that it could and should happen in contracts that require a release from contractual obligations, in his obiter comment in Marathon Asset,24 Leggatt J opined

24 Marathon Asset Management LLP v Seddon & Another [2017] EWHC 300 (Comm).

that such a method of quantification for damages “makes no sense” as it “lacks any verisimilitude”. Since there is no way to ascertain for sure that the injured party would have agreed to the amount under Wrotham-Park damages, it cannot be said to be compensatory as it would have not restored the injured party to the position prior to the breach.25 Classifying Wrotham-Park damages as restitutionary damages, per Lord Nicholls in Blake, would be to focus on shifting away the injured party’s loss towards the breaching party’s unjustly acquired gain. Whilst similar conceptually to the compensatory approach, its focus makes more practical sense. The compensatory approach has too many hypothetical points to consider as it is predicated on the notion of loss that is unquantifiable. Using the restitutionary approach, the Courts would have the information needed to make a value judgment on what needs to be disgorged and given to the injured party. However, there are still major pitfalls to this approach. Firstly, it completely deviates from the traditional “allor-nothing” approach the Court has used in the past when awarding restitutionary damages.26 The Courts in Wrotham Park and other cases using the WrothamPark damages have ruled for damages based on a fair proportion of the benefits or profits that the breaching party have acquired. In Marathon Asset, Leggatt J similarly observed that the two different strands of reasoning could be harmonised into a single measure; but that for the time being, remained doctrinally different.27 Secondly, in the Singapore Courts, it would seem that the reasoning does not conform to the justification of disgorging the benefit or profit that the breaching party gained. From Clearlab and JES International, it would seem that Singapore Courts are looking to compensate the loss that the injured party would have suffered from the breach of the contract. The focus is still on quantifying the value of the hypothetical release of contractual obligation that the parties would have agreed to. In essence, this is the purest form of the Wrotham-Park damages that was first discerned in the case itself. However, whilst the UK Courts has shifted its focus on how to quantify the damages using surrounding facts, the Singapore Courts is still wrestling with the quantification based on this salient aspect of the factual matrix. All of these pitfalls of the Wrotham-Park damages model, from the various proprietary issues to the justifications, were highlighted and reasoned in the Supreme Court 25

Leo (op cit n 17).

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decision One Step.28 In this case, the Courts first reaffirmed that the general rule for contract damages is to put the injured party in a position as if the contract had been carried out, synonymous with the Robinson principle. It concluded, as a general rule, that damages based on a breach of contract needs to be based on legal right and not based on the Courts’ discretion. On the specific issue of Wrotham-Park damages, Lord Reed reasoned that the Courts’ jurisprudence on the issue has been on a wider and less certain basis than the original intent of the Courts in Wrotham Park.29 He also analysed two cases that were pertinent to WrothamPark damages, questioning the judgment in Experience Hendrix and discussing the uncertainty that was seeded prior to and cemented in Blake, and seemingly agreed with the nuances that Lord Hobhouse was trying to highlight in his dissenting judgment in Blake.30 Dealing with the compensatory argument, Lord Reed reasoned that whilst damages based on an imaginary negotiation may give the impression that it is incompatible with the principle of compensation—as discussed above— he argued that the loss suffered by injured party is the deprivation of an asset.31 He asserted that the contractual agreement between the parties was this asset as it created a right that the injured party was benefitting from, such as an intellectual property or restrictive covenant.32 By acting in breach of its contractual obligations, the breaching party essentially took an asset from the injured party – therefore, the injured party is “entitled to require payment”.33 However, Lord Reed acknowledged that the limiting factor of using Wrotham-Park damages is the fact that there is a proprietary factor in which if the obligation is just a contractual obligation, it would not make the loss an asset to the injured party. In such cases, the Courts cannot award Wrotham-Park damages.34 Looking at the Supreme Court’s decision in One Step, a few points could be concluded about the applicability of the Wrotham-Park damages model. Firstly, the UK Courts have acknowledged that Wrotham-Park damages is to be considered as part of the compensatory model for damages and not a separate justification for awarding damages. Secondly, it pertains to contractual obligations where the breaching party takes a right away from the injured party. In this aspect, although is not fully clear from the UK courts jurisprudence, it could be argued that application of Wrotham-Park damages in cases where 28 Morris-Garner and another (Appellants) v One Step (Support) Ltd (Respondent) [2018] UKSC 20. 29

ibid at [83]-[90].

ibid at [64] – [82].

ibid at [91].

One Step (SC) (op cit n 28) at [92].

ibid.

ibid at [93]-[94].

there is a contractual obligation for the provision of goods or services would hardly be applicable unless the breach essentially takes away an asset from the injured party. Another salient aspect that could be concluded is that the UK courts are still unable to reason away from the proprietary aspect of the Wrotham Park reasoning where the damages can only be awarded when the injured party has a proprietary right in the manner, or as Lord Reed reasoned as an asset. Therefore, even though the breach takes away a right from the injured party, the Courts still seem to require some form of proprietary right, either a legal right over the subject matter or a breach of fiduciary duty that would also entitle the injured party to proprietary remedies. These points greatly limit the applicability of Wrotham-Park damages as it takes a specific circumstance for the Courts to be able to apply it to a breach of contract. B. Loss of Amenities Model Another possible methodology the Courts have created is the use of a loss of amenities damage model, where the focus is on the intangible loss suffered by the injured party. The authority on non-pecuniary damages is Ruxley v Forsyth,35 where the court reasoned for damages based on a “loss of amenities”. However, the quantification in that case was done arbitrarily. In his iconic judgment, Lord Mustill reasoned that although the loss of consumer surplus is unquantifiable, it has not and should not hinder the courts from awarding and quantifying damages based on what it deems as the best methodology for reversing the injustice.36 He concluded that the plaintiff in Ruxley was not entitled to the purest protection of its expectation interest, which would necessitate the cost of cure, but the cost of difference was not enough. The conclusion was that the courts should award the plaintiff damages for his “loss of amenities” from the breach of contract. This formulation has been the standard methodology for quantification of damages for breaches of contract where the terms have a subjective and unquantifiable consumer value to the injured party.37 The first major issue with Ruxley is the fact that the reasoning had used incorrect premises. In Ruxley, Lord Mustill reasoned that the unquantifiability of damages that come up due to non-pecuniary loss should not stop the Courts from quantifying it themselves and reversing the injustice. However, the biggest problem with allowing the Courts free-reign based on this reasoning is that the

Ruxley v Forsyth [1996] 1 AC 344.

ibid at 361.

37 Freeman v Niroomand (1997) 52 Con LR 116; Farley v Skinner (No 2) [2002] 2 AC 732.

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premise that Lord Mustill is basing his ruling on is false.38 It has been shown in economic theorists that consumer surplus—the loss suffered by the injured party in a nonpecuniary contract—is actually quantifiable. Therefore, Lord Mustill’s whole reasoning that gives the UK Courts free reign to give arbitrary “loss of amenities” damages becomes unhinged and illogical. The next issue with the Ruxley solution is the fact that it is not able to cover situations where the contract is for one party to not act in the specified manner. Although Lord Mustill’s reasoning would provide for quantification for losses that seem unquantifiable, a salient aspect of the case is that there was a provision of imperfect performance. The main point of contention in the case is whether the breach warranted the harsher cost of cure damages, nominal cost of difference damages or a new methodology, but the breach was for an imperfect or non-performance as it has to result in what was defined in Watts as physical and/or mental suffering of the injured party. The salient aspect here is that the performance was not according to the terms created, which would raise doubt about the applicability of the loss of amenities model to contracts where, like Wrotham Park, Clearlab, One Step, and the rest, the term was for the other party to not act in a specific manner. In these cases, the breaching party had acted in opposition of the performance that was agreed upon but it cannot be said to be a defective or non-performance that created the breach of contract. Additionally, even if it were possible to argue that the act(s) of the breaching party is synonymous to the defective or non-performance per the non-pecuniary cases, the nature of the loss to the injured party would raise another issue. In the cases that reasoned for or against Wrotham-Park damages, the loss to the injured party is usually unquantifiable due to the fact that its hypothetical nature. Due to the act(s) of the breaching party, the injured party suffered loss of opportunity to either negotiate for release or loss of business, as breaches of non-compete clauses would exemplify. This is vastly different from a performance that would cause a physical or emotional distress as reasoned in Watts. Thus, it is clear that Ruxley would not apply to most contractual obligation to not act in a certain way unless it is to the entertainment or subjective enjoyment of the parties. However, at this point it is also argued that Ruxley would apply for contracts that have unquantifiable damages if breached due to the fact that the only circumstance where this would happen is if the contract was for subjective enjoyment of one party.

38 Stephanie Mullen, ‘Damages for Breach of Contract: Quantifying the Lost Consumer Surplus’ (2016) OJLS 36(1) 83.

There is another conceptual issue that the UK Courts did not deal with satisfactorily with in Ruxley. The Courts were adamant that the cost of cure, a form of damages based on the Robinson principle would be too unreasonable for a non-pecuniary contract. This was picked up by the trial judge, by Dillon J in his dissenting judgment in the Court of Appeal, and finally in the House of Lords. However, the arguments supporting this notion seemed to disregard the terms of the contract itself. In Ruxley, no matter what other circumstantial facts that the Courts brought up about dispute resolution, the reasonableness of the term itself, and the actions of the injured party, there was the inescapable fact that the parties had contracted to the terms that were breached after all. Therefore, a reasoning based on this line of argument would also necessitate a discussion on which of the injured party’s interest the Courts sought to protect. It is clear that the UK court in Ruxley were trying to figure out how to enforce the injured party’s expectation interest whilst balancing policy decision. The Courts, from the trial all the way to the House of Lords acknowledge that although the terms that were agreed was altered and may not be reasonable, the term is still binding on the breaching party and that the injured party is entitled to damages. The problem that the Courts had to grapple with was that both the options that were available to them; cost of cure and cost of difference, offered either a certain windfall of damages or was nominal in nature. Windfall damages was problematic, as they would present a circumstance where one party still gains more than the contract, a relationship that both parties freely entered into, that is imposed by an entity that is not a party to the contracts. Nominal damages would just mean that the Courts acknowledge the breach but were also convinced that the injured party was not entitled to the protection to any of the “Fuller & Perdue” interests. Thus, it is clear that even in Ruxley, the UK Courts were essentially still trying to formulate a damage model that fits within the Robinson principle of putting the injured party as if the contract was performed. By creating a new legal principle that is not nominal yet too harsh, the Courts were trying to protect the injured party’s expectation interests without falling prey to the issue of awarding “windfall” damages to the injured party.

What Then? Seeing that there are two ways the Courts have attempted to quantify damages that are usually unquantifiable, due to it being hypothetical or subjective, the next question is then what should the Courts do? Here, this writer is submitting that the Courts—having the opportunity of looking at a vast amount of jurisprudence on unquantifiable damages—should now attempt to clarify,

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as well as improve on, which model should be used and draw distinctions and limitations on their applications. These are this writer’s suggestions for the Courts’ future framework for unquantifiable damages:

A. Positive Obligations In cases where the parties are obligated to perform in a certain manner, in which the performance has a subjective value to the other party, the Courts should follow the Ruxley model for loss of amenities. However, instead of just applying the Courts’ discretion for arbitrary awards, as the Supreme Court in One Step reasoned against, the Courts should reconsider the premise that the subjective loss—or as economist and Lord Mustill reasoned as “consumer surplus”—as unquantifiable and allow court process to be able to quantify the loss. This way, the Courts would be able to justify the awards as part of the model, alongside cost of cure and cost of difference, for protecting the expectation interest of the injured party.

of unquantifiable loss suffered by the injured party. This analysis has revealed that the justifications have been uncertain and need further clarification, as exemplified in the recent Supreme Court in One Step. This article then laid out this writer’s submissions for a framework that the Courts should use in clarifying the methodology for quantification of seemingly unquantifiable damages. Whilst it is acknowledged that the area would remain complicated, it is submitted that the suggested framework would limit the current deviations and increase legal certainty.

B. Restrictive Obligations Since there is no way to quantify the injured party’s expectation or reliance loss based on hypotheticals and opportunity loss, in cases where the contractual obligation is to not act in a certain way, Wrotham-Park damages would suit better to quantify the damages the injured party suffered. However, the use of this type of damages would need to be limited to cases where the breach takes away the right of the injured party as stipulated by the terms. In this manner, the Courts would be justified to obligate the breaching party to compensate the injured party as the loss could be reasoned as assets of the injured party. Such “assets” can then be reasoned as quasi-property for the injured party. This would allow the Courts to then reason either that the injured party is then entitled to payment for releasing the breaching party from its contractual obligations— essentially a purchase—or in a fiduciary setting, to obligate the breaching party to account for the profits that is made due to the breach. This would narrow the current deviation from the reasoning in Wrotham Park and not necessitate the Courts to flex its legal creativity so as to justify an application of Wrotham-Park damages to a breach of contract.

Concluding Remarks This article has explored the circumstance where a breach of contract would not enable the Courts to use vanillatype damages models to quantify the loss suffered by the injured party. It then explored the two models that the UK and Singapore Courts have tried to solve this issue 37

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Prest v Petrodel versus Alwie v Tjong: A Comparative Study Muhammad Hasif, University of Southampton

Introduction Arguably one of the most important decision in the realm of company law was provided by the House of Lords in Salomon1, where it was ruled that an incorporated company is a separate legal entity, with its own independent rights and that “the motives of those who took part in the promotion of the company are absolutely irrelevant in discussing what those rights and liabilities are”. In Singapore, this has been codified in section 19(5) Companies Act, where it is stipulated that an incorporated company is capable to exercise “all the functions of an incorporated company and of suing and being sued”.2 The economic and legal benefits of having this “legal fiction” of the existence of a company as a legal person, is highlighted from the lack of liability it provides the company’s members, shareholders, and investors. However, this separate legal entity principle has exceptions in both jurisdictions. In the United Kingdom (“UK”), the exceptions to the sanctity of this rule has been explored and reasoned for by the UK Supreme Court in Petrodel Resources Ltd v Prest (“Prest”).3 In Singapore, Chong J in the High Court Tjong Very Sumito and others v Chan Sing En (“Tjong (HC)”)4 analysed the historical development to the rule and reasoned for the framework for the exception that would exist in Singapore. This discourse aims to discuss the difference in the reasoning between the two cases as well as provide a comparative analysis of each approach. Before actually critically analysing the two cases, this discourse needs to be scoped. The first scope is that the discourse will focus mainly on cases where the companies that were at the focal point of the issues are one-man companies. The main reason for this is the similarity in facts and how conceptually important the fact that the company in question is a “one-man company”. In Salomon, the House of Lords tried to grapple with whether the wording in the legislation in 18605 meant to confer an exclusion to definition of an 1

Salomon v Salomon [1897] AC 22 (HL).

Companies Act (Cap 50), 2006 Rev Ed.

3 415.

Petrodel Resources Ltd v Prest [2013] UKSC 34; [2013] 2 AC

4 Tjong Very Sumito and others v Chan Sing En [2012] SGHC 125; [2012] 3 SLR 953.

Companies Act 1860; Salomon (op cit n 1) at 53

incorporated company just based on the fact that the company is under absolute control of a single person. Since, the UK courts have had to deal with a multitude of legal issue dealing with one-man companies,6 such as in recent times; employment,7 whether one man behind a corporate director is the de facto director of the that company,8 whether the defence of ex turpi causa could be raised due to the fraud of the one man,9 and the main exception to the separate legal entity principle in Salomon.10 In Tjong (HC), the High Court in Singapore dealt with companies that were primarily ran by a single person. Conceptually, the reason that the puzzle still exists could be pinned to the fact that the “control” of the company is vital to the issue of the wrong that was done by the company. If the injustice could be pinned to a person who had control over the company, one that could bear the personal liability of the wrong, it would seem that the person is the logical choice for that liability to be pinned. However, the main issue with a company is that although it is a legal person, assigning liability and the enforcing the liability would be difficult due to the ease for the option of insolvency, a main objective and benefit of incorporation. Thus, if the liability for an injustice, be it a breach of contract or an illegitimate moving of assets, could be pinned to a single person in control of the company, it would be easier to reverse the injustice and enforce the liability. Therefore, this discourse would focus on the issue of piercing the corporate veil that arise from cases of companies run or controlled by one man.

Do Legal Obligations Outside of Company Law Create an Exception to Salomon? A preliminary point of discussion is the effects that other legal obligations have on the principle of separate legal entity. The scenario in Prest is hardly a commercial setting. The case concerned the ability of the court in divorce proceedings to make orders in favour of a wife 6 Brenda Hannigan, Wedded to Salomon: evasion, concealment and the confusion on piercing the veil of the one-man company (2013) 50 Irish Jurist 11. 7 Secretary of State for Business, Enterprise and Regulatory Reform v Neufeld [2009] 2 BCLC 273. 8 Re Paycheck Services 3 Ltd, Revenue and Customs v Holland [2011] 1 BCLC 563. 9

Stone & Rolls Ltd v Moore Stephens [2009] 2 BCLC 563.

10 VTB Capital PLC v Nutritek [2013] 1 BCLC 179 (“Nutritek”); Prest (op cit n 3).

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requiring companies wholly owned or controlled by the husband to transfer assets held by the companies on the basis that this property was to which the husband was “entitled in possession or reversion” for the purposes of Matrimonial Causes Act 1973.11 Whilst the Supreme Court in this case did rule in favour of the wife, its reasoning is important for the question of whether a legal obligation beyond pure commercial company law creates a secondary yardstick. The Supreme Court, whilst overturning the eventual Court of Appeal’s decision, agreed with the Court of Appeal and confirmed that the there is no different or broader veil jurisdiction in the Family Division.12 Lord Sumption reasoned that the “courts exercising family jurisdiction do not occupy a desert island in which general concepts are suspended or mean something different”.13

English law which applies when a person is under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. The court may then pierce the corporate veil for the purpose, and only for the purpose, of depriving the company or its controller of the advantage that they would otherwise have obtained by the company’s separate legal personality.15 [Emphasis in italics added] In Tjong (HC), the judgment in High Court was upheld in the Court of Appeal (“Tjong (CA)”),16 and this discourse would therefore focus on both reasoning that was put forward by Steven Chong J and the Court of Appeal. In the High Court, Chong J reasoned that:

In light of the judgment from Tjong, the courts in Singapore in 2014 dealt with the issue of jurisdiction and arbitration agreements in Manuchar Steel Hong Kong Ltd v Star Pacific Line Pte Ltd.14 In that case, the courts similarly reasoned that the rules of separate legal entity in company law still applies and the obligation under arbitration rules as well as contract rules do not make rules that is not encompassed by the general company rules. These cases show that no matter what the jurisdiction of law that may be included in the legal discourse, if there is a company that is involved, then the courts would have to consider the legal implications of the Salomon principle before any other legal obligations. Interestingly, whilst the congruent jurisprudence show that the sanctity of the Salomon principle is protected once there is a company is involved, it also shows that the principle can be a barrier to reversing injustice. This salient yet congruent fact is the centrepiece of the legal discourse that purports to find a solution to the barrier to justice the Salomon principle raises.

Judgments of Prest and Tjong At this juncture, this article would lay out the judgments in the different cases. In Prest, the Supreme Court ruled in favour of the wife but reasoned for its ruling in a manner that would rewrite the development of the exception to the Salomon principle. Lord Sumption stated the scope of piercing the corporate veil as the following: I conclude that there is a limited principle of

[W]hile there is as yet no single test to determine whether the corporate veil should be pierced in any particular case, there are, in general, two justifications for doing so at common law: first, whether the evidence shows that the company is in fact not a separate entity; and second, where the corporate form had been abused for an improper purpose. [Emphasis in italics added] This reasoning was approved in the Court of Appeal by V K Rajah JA (delivering the judgment of the court) with a few clarifications: The Judge lifted OAFL’s corporate veil on the ground that Alwie was OAFL’s alter ego, not that OAFL was a mere device, sham or façade (see Judgment at [70]). The ground of alter ego is distinct from that based on façade or sham, and the key question that must be asked whenever an argument of alter ego is raised is whether the company is carrying on the business of its controller.17 [Emphasis in italics added]

Issues of Discussion This article is focused on a comparative study between the two cases. There has been an argument made that Tjong was decided around the same as Prest and therefore the judges in Tjong might not have had the luxury of the reasoning in Prest.18 However, this article is not meant to be a critical analysis about the inconsistency between the reasoning but a comparative 15

Prest (op cit n 3) at [28].

Matrimonial Causes Act 1973, section 24(1)(a).

Hannnigan (op cit n 6).

16 Alwie Handoyo v Tjong Very Sumito [2013] SGCA 44; [2013] 4 SLR 308.

Prest (op cit n 3).

14 Manuchar Steel Hong Kong Ltd v Star Pacific Line Pte Ltd [2014] 4 SLR 832.

Tjong (CA) (ibid) at [96].

18 Yeo Hwee Ying and Ruth Yeo, Revisiting the Alter Ego Exception in Corporate Veil Piercing (2015) 27 SAcLJ 177.

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analysis between the judgments. There are a few points of contention between Prest and Tjong, which are: language and characterisation, the appreciation of actual legal obligations of the company, and the issues of remedies. These points of contention all lead to the main issue of comparison between the two cases; the issue of which is the concern of the courts, sophistication or certainty.

disregarding the ‘facade’, but only looking behind it to discover the facts which the corporate structure is concealing. The evasion principle is different. It is that the court may disregard the corporate veil if there is a legal right against the person in control of it which exists independently of the company’s involvement, and a company is interposed so that the separate legal personality of the company will defeat the right or frustrate its enforcement. Many cases will fall into both categories, but in some circumstances the difference between them may be critical.23 [Emphasis in italics added]

A. Language and Characterisation Prior to Prest, the classification of the firms that a piercing of the corporate veil would permit seemed to be defined by Woolfson v Strathclyde RC.19 Lord Keith in the case had described the company that was interposed in between the defendant and his legal obligation in a multitude of manners. Words such as: mere façade, sham, stratagem, mask, creature, and device were used indiscriminately to describe the company in question.20 However, even before Prest, Lord Neuberger pointed out in Nutritek that the idea of using the term “sham” was inappropriate.21 In the same case, Lord Lloyd also reasoned that the company, no matter the purpose, was an incorporated company and therefore it was a genuine company. In Prest, the Supreme Court reasoned that the language used before raised too many questions than it answered. The court then reasoned that the issue is not about the company being a sham company, as it was legitimately incorporated company, but the issue was that this genuine company was used in an inappropriate manner.22 This use of language and characterisation shows that the judges in Prest have the appreciation for the misguided line of precedence, exemplified by the now essentially overruled reasoning in Woolfson, in terms of the language and characterisation. The other point that shows the emphasis on the language used in these cases is in the distinction between piercing the corporate veil, an exception to the Salomon rule, and lifting the veil. Lord Sumption reasoned for a distinction, and what he described as a critical distinction, between concealment and evasion. The main reasoning, as presented by Lord Sumption: The concealment principle is legally banal and does not involve piercing the corporate veil at all. It is that the interposition of a company or perhaps several companies so as to conceal the identity of the real actors will not deter the courts from identifying them, assuming that their identity is legally relevant. In these cases the court is not

Lord Sumption then went on to use four different cases, all of which were essential to the development of the law in this area, to show the distinctions between concealment and evasion.24 This distinction is further analysed by the other judges on the panel. Lord Neuberger analysed the cases that Lord Sumption uses to distinguish the two justifications and disagreed on Lord Sumption’s distinction. He then went on to postulate that the application of agency and trusteeship law could be the answer to the issue.25 This discussion on the definition of the scope for piercing the corporate veil and the difference between piercing and lifting the corporate veil, which show that the Supreme Court was cognisant for the need to properly define and distinguish the circumstance that allows for piercing the corporate veil. In Tjong, Chong J and the subsequent Court of Appeal seemed to not have the same level of appreciation for the necessity for extensive language discourse to define the justification for the exception the Salomon principle. In multiple paragraphs in his judgment, Chong J used different words to imply the same meaning or outcome. In his reasoning highlighted above, he used the word “pierced”, yet in a few paragraphs later, he concluded that the “OAFL’s corporate veil should be lifted”.26 From the way Chong J reasoned, it did not seem that he was concerned with the difference between lifting and piercing the veil, which led to some uncertainty. This is highlighted by the subsequent appeal and the submissions that were made to the Court of Appeal. The Court of Appeal clarified the Courts position in that “alter ego” was different from defining the company as a “mere device, sham or façade”. However, the reasoning by the Court of Appeal does nothing to clarify that the difference in vocabulary that Chong J used in his judgment, such as the indiscriminate use of both “lifting” and “piercing” the corporate veil. Even in its judgment 23

Prest (op cit n 3) at [28].

(1979) 38 P & CR 521 (HL).

Hannigan (op cit n 6).

24 Gilford v Horne [1933] Ch 935; Jones v Lipman [1962] 1 WLR 832; Trustor AB v Smallbone [2001] 1 WLR 1177; Gencor ACP Ltd v Dalby [2000] 2 BCLC 734.

Nutritek (op cit n 10).

Prest (op cit n 3) at [81]-[83].

Prest (op cit n 3).

Tjong (HC) (op cit n 4) at [73] (emphasis in italics added).

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as highlighted above, the Court of Appeal had used the words “lifting” and “piercing” indiscriminately to mean the same thing. This shows that the Singapore Courts is less concerned with the language used to define the justification for piercing of the corporate veil. Thus, it can be concluded that, the Singapore Courts were not as concerned with the issue of sophistication where it pertains to language and classification. B. Appreciation for Liability the Salomon Principle Protects The idea that the Salomon principle only protects the interposed company and the party that controls it is one-dimensional. In Prest, the Supreme Court has made it clear that the evasion must be a pre-existing legal obligation that the controller has and that the piercing must not merely attempt to hold the controller liable for what in truth is an obligation of the company. Even before Prest, Toulson J in Yukong Line v Rendsburg Investment27 rejected any jurisdiction to pierce the corporate veil for that case and reasoned that the wrong that the Courts needed to correct was the breach of contract. Making the controller personally liable would render a perfectly incorporated company innocent for an act that was no doubt the company had done. The reasoning in Prest went a step further, where Lord Sumption reasoned that even if there is a personal obligation tied to the controller of the company, if it is not necessary to pierce the veil, then it is not appropriate to do so.28 This reasoning is also lined with public policy considerations and essentially endorsed Lord Neuberger’s reasoning in Nutritek. In Nutritek, Lord Neuberger reasoned that the courts could only pierce the corporate veil if there is no other solution to correct the injustice.29 This restrictive scoping of the jurisdiction of the Courts to pierce the corporate veil, even in the presence of a personal obligation, shows that the UK courts had a nuanced appreciation for the need to protect the Salomon principle. At the start of this article, it was highlighted that the benefit of the Salomon principle is primarily the limited liability for the members, shareholders, and the investors of the company. However, it is clear from the jurisprudence of the UK Courts that there are other more nuanced reasons for the protection of the Salomon principle. From both the reasoning of Yukong Line and Nutritek, it is also clear that protecting the sanctity of the Salomon principle also protects the principle of privity of contract. Opening up the jurisdiction for piercing the corporate veil, the issue of the controlling party could be considered a third party to the contract and the courts 27

Yukong Line v Rendsburg Investment [1998] BCLC 485.

Prest (op cit n 3) at [35].

Nutritek (op cit n 10).

would run into the issues of privity of contract. Also, if piercing the corporate veil becomes more open, then companies that have been caught with wrongdoing could offer up an individual that could bear the personal liability for the wrong. Lastly, which will be discussed in the next section, this jurisprudence is also layered with the fact that the Courts are aware of the fact that there are other ways to reverse the injustice that was suffered and therefore there is less of a need to completely dilute the Salomon principle by opening up exceptions. In Tjong, in both the High Court and Court of Appeal, it seems clear that the Courts were determined to pin the actions of the company on its controller. As discussed before in the previous section, the Courts were less concerned with language punctilious discourse and was more concerned with just defining the justification for piercing the corporate veil and the correction of the harm. The same was the case for the appreciation for the legal obligation that might stem from the Salomon principle. By referring to the interposed company in Tjong as the “alter ego” of the controller, the Courts are essentially reasoning that the controller was the party to the contract. In that case, this was very much the scenario due to the agreed upon facts, however, one might postulate that this certain kind of reasoning causes issues with the privity of contract if the controller was not factually a party to the contract. Also, there is the issue that this alter-ego principle creates a parallel principle to the application of general rules of agency.30 However, it can be seen that the Singapore Courts are trying to keep the principle simple and certain, which has its advantages especially for the purpose of reversing the injustice that was suffered. As a comparison, the appreciation for the liability beyond the Salomon principle is varied between Singapore and UK Courts. The UK Courts appreciated that the dilution of the piercing principle would lead to other problems in other realms of the law. Its reaction was therefore to be nuanced and reason for a very specific circumstance for piercing the corporate veil. The Singapore Courts are more focused on the wrong that was done and reversing the injustice done. Therefore, apart from clarifying the fact that the principle is not characterising the company as a “sham, mere device or façade” the Singapore Courts were more concerned with trying to determine if the company was an alter ego of the controller or not. C. Issues of Remedies The issue of remedies is important and interesting when 30

Yeo and Yeo (op cit n 18).

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comparing the cases. In both the cases, the Courts eventually ruled in favour of the alleged injured party. However, the manner and reasoning for remedies is ultimately very different between the two Courts. The reasoning from the UK Courts have been that if there is a remedy that does not require piercing the corporate veil, than piercing is not the appropriate remedy. Before Prest, in Yukong Line and Nutritek, the Courts did not reason for the piercing of the corporate veil but yet still be able to find a remedy for the injured party. In Yukong Line, there was a possible remedy based on the powers to challenge the transfer of assets between companies and the authorisation of the transfer based on the Insolvency Act 1986.31 In Nutritek, Lord Neuberger reasoned that piercing was not needed, as the injured party was able to get redress based on directly suing the controllers for deceit and conspiracy.32 As stated before, the setting of Prest is hardly commercial and was actually a divorce proceeding. In the ruling for this case, Lord Sumption reasoned for the remedy to be based on trust law and not to be as a result of piercing the corporate veil. This discernible and consistent unwillingness to pierce the corporate veil but willingness to find an alternative basis for liability for the controller, is the UK Courts response to the issue of reversing an injustice suffered yet still protecting the sanctity of the Salomon principle.33 This line of reasoning also shows that the UK Courts have a different legal discourse for remedies, even before deciding on whether piercing the corporate veil. This added yardstick piles on another level of sophistication to the reasoning for or against piercing the corporate veil. Apart from essentially setting a dual step reasoning for piercing the corporate veil, it also sets the threshold for the justification of any actions to be higher and therefore constricts the jurisdiction that the Courts have in piercing the corporate veil. Singapore Courts, on the other hand, have consistently showed that it is, as argued above, less concerned with defining the legal issues and pedantic classifications. The Courts would rather reverse the injustice and therefore be more focused in defining acts that would be considered to have caused the injustice. Cases in Singapore in recent history shows that the Courts were focused on areas such as: acts that show an evasion of

legal obligation,34 agency,35 façade or sham,36 alter ego,37 and basic unconscionability and bad faith.38 With the focus is on the actual wrong, it is clear that the Singapore Courts’ reasoning for the remedies has been whether the controller can be held personally liable. This definitive manner of reasoning causes the remedies to be certain and thus the main focus for legal discourse is whether the interposed company is an “alter-ego” of the controller. D. Prest and Tjong: Different Principles for Different Circumstances? At this juncture, this article would attempt to address the argument that Prest and Tjong could be different principles due to the apparent inconsistencies in reasoning.39 This argument does not hold weight for two main reasons: both cases reasons for a principle that disregards the corporate veil, and both cases reasons that if that is the route the Courts take to address the injustice suffered, that personal liability is attached to the controller and not the company. In Prest, Lord Sumption, as highlighted multiple times above, reasoned that the Courts may be allowed to “disregard the corporate veil” if evasion occurred. This means that the Courts would completely disregard the separate legal entity of a legitimately incorporated company. In Tjong, both the High Court and the Court of Appeal reasoned in a manner that consistently makes the controller and the interposed company indistinguishable. This reasoning goes directly in contrast to the Salomon principle, where the incorporated company is to be treated as a separate legal person/ entity to any controller. Therefore, the reasoning in the Singapore Courts leads to the conclusion that the corporate veil is to be disregarded or in essence does not exist. In conclusion, with regards to corporate veil, both cases ruled that if the circumstances fit the justification for piercing the corporate veil, in each jurisdiction, the Courts should disregard the corporate veil. As a direct result from the above conclusions, in both cases, the controller would be held liable for the injustice that was suffered. In Prest, Lord Sumption reasoned that the Courts would be able to “deprive the company or its controller of the advantage that they would have 34 Singapore Tourism Board v Children Media Ltd and others [2008] 3 SLR 981. 35 SLR 98.

Win Line (UK) Ltd v Masterpart (Singapore) Pte Ltd [2002] 2

36 NEC Asia Pte Ltd v Picket & Rail Asia Pacific Pte Ltd [2011] 2 SLR 565.

37 Tjong (HC) (op cit n 4); TV Media Pte Ltd v De Cruz Andrea Heidi [2004] 3 SLR 543.

Yukong Line (op cit n 27).

Nutritek (op cit n 10).

38 Raffles Town Club Pte Ltd v Lim Eng Hock Peter [2013] 1 SLR 374.

Hannigan (op cit n 6).

Yeo and Yeo (op cit n 18).

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otherwise obtained from the company’s separate legal entity”. Since the Courts are piercing the corporate veil and in essence disregarding the company, this conclusion would only apply to the advantage gained by the controller. If the controller had obtained an advantage, by profits or evading legal obligations or liability, and the Courts are depriving the controller of this advantage, then it is in essence assigning personal liability to the controller. In Tjong, the Singapore Courts’ conclusion is more straightforward. Since the Courts were adamant in treating the interposed company as the alter ego of the controller, therefore any liability that the interposed company would have is essentially the liability of the controller. Therefore, with both of the factors as argued above, the two cases are reasoning for the same principle, albeit with different yardstick. E. Sophistication vs. Certainty From the discourse above, it can be seen that there is a difference in the two Courts’ focus. The UK’s courts seemed to be more focused on closely analysing the justification and seem to be willing to add more layers to the definition. This is very clear from the seemingly two-step test reasoned from both Lords Sumption and Neuberger in Prest. It is also clear from the hesitant reasoning to rule for piercing in multiple cases to conclude that piercing the corporate veil is the answer needed to correct the injustice, with the analysis of other legal liability that the Salomon principle protects and the fact that there may be other remedies that are available. The Singapore Courts’ reasoning seemed more straightforward, focusing on the acts that could be considered under the justification for piercing the veil and if the interposed company fits the justification then the Courts would not hesitate to pierce the veil and make the controller liable. Since it has been shown that the principles have the same purpose and outcome, a comparative analysis could be done as to ascertain what should be the Courts’ focus in the legal discourse; sophistication or certainty. The UK Courts’ jurisprudence in the area seems to focus on the sophistication of the principle. It could be argued that this is conceptually attractive as more clarification and discourse would develop any legal principle and somehow harmonise the various different remedies available so as to protect one of the most important tenet of company law. However, this sophistication has its own detractors. Hannigan, in her article, argued that the reasoning in Prest, in its efforts to create a coherent principle for the definition created more confusion and uncertainty in the law. She argued that the distinction between cases of evasion and concealment Lord Sumption argued for, and essentially

agreed upon by the majority, was problematic in its premises and therefore is difficult to apply consistently and objectively. Hannigan further argued that that the difference between evasion and concealment reasoned by Lord Sumption is questionable as “concealment is inherent in many evasion cases is commonly achieved through concealment. This is then evidenced by the Lord Neuberger’s indiscriminate use of both lifting and piercing in Nutritek. Hannigan then went on to argue that another negative effect from the possibly over-sophistication by the Supreme Court was that it renders the piercing principle obsolete. This is due to two factors, the first being that the justification for piercing the corporate veil being so specific and precise that very little circumstances would fit the justification. The event of an interposed company, in control by a single person, who also has an existing legal obligation, and the interposed company existing only to frustrate the exercise or enforcing of that legal obligation, could be arguably uncommon. Additionally, with the multitude array of remedies that is available to the injured party, as Lord Neuberger reasoned, any attempt to reason for piercing the corporate veil would be hampered by policy factors. This is evidenced by the hesitant jurisprudence to reason for the piercing of the corporate veil, pre-Prest and post-Prest.40 The other factor was that the reasoning for concealment and therefore merely “lifting” the corporate veil seemed very haphazardly done. Lord Sumption’s reasoning for it was merely one of relevance, which could be argued to be a deviation to the sophistication showed by the Courts when attempting to clarify the justification and definitions for piercing. Even in Prest itself, Lord Clarke reasoned that this haphazard distinction and definition for “lifting” was problematic and the courts should hear submissions before ruling on this.41 This would result in the principle of lifting to be the benchmark for injured parties to stake their claim, as it is arguably a lower threshold and the aim of assigning the controller liability is more of a possibility. In conclusion for Prest, it would seem that although it is conceptually attractive to have legal discourse as to the boundaries for an exception to the Salomon principle, the judgment has actually raised further practical and enforcement issues. Therefore, it could be said that in the effort to clarify the UK Courts position, the judgment in Prest, was to over-sophisticated and over-complicated the situation which rendered the piercing principle obsolete yet not making the realm of law any more certain. 40 R v Sale [2013] EWCA Crim 1306; Jevita v Bilta [2014] EWCA Civ 968. 41

Prest (op cit n 3) at [103].

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As is evidently clear from the flow of the discourse above, the Singapore Courts have been more concerned with making the area easier to enforce. This is evidently clear from Tjong, where the reasoning from Chong J and the Court of Appeal was evidently purposed at encompassing the injustice that was suffered and as long as the interposed company and the controller cannot be separated, the alter-ego principle, then the Courts may pierce the corporate veil. However, the disregard for the conceptual discourse, which the UK Courts displayed, raised several conceptual issues. As dealt with in the previous section, whether this principle was synonymous to the UK equivalent piercing principle. Furthermore, the similarity of the “alter-ego” principle to other legal principles connected to company law, such as attribution, agency, concealment, and other tortious principle,42 shows that Tjong needs further clarification. If a judgment needs further clarification then the judgment could be argued to be conceptually deficient. As argued by Yeo and Yeo, for Singapore Courts moving forward, it needs to strike a better balance between principle and policy, as the current stance is too focused on correcting the injustice that has been done and lacks the principle astuteness to be coherent with commercial reality.43 This shows that while Tjong does have its advantages in terms of applicability to correct injustice, its apparent lack of sophistication raises conceptual issues that need further clarification.

Conclusion The problem with the Salomon principle, particularly with one-man companies, is that the perpetrators of an injustice can evade their legal obligations using the separate legal entity principle. The UK Courts, as shown in Prest, dealt with the issue by focusing on the definition and reasoning for a remedy for the injured party whilst showing appreciation other legal obligations the Salomon principle protects as well as protecting its sanctity. However, this reasoning, whilst attempting to balance the need to protect the sanctity of Salomon also over-complicated the situation and thus created further uncertainty. The Singapore Courts, on the other hand, was less concerned with punctilious language discourse and were more straightforward with their solution. However, this approach raised further conceptual issues due to its lack of sophistication and similarity to other principles. It is ironic that a comparative study reveals that either case represent the solution to the other’s pitfalls.

Yeo and Yeo (op cit n 18) at 205.

ibid.

However, it is conceded that the principles represents the same outcome and even though most would argue that there is a need for further clarification and reform on either side, they both have massive advantages. Thus, in conclusion, if at all possible, the best solution is for each Courts to show the sophistication and nuanced approach that the UK Courts show towards language and the different layers of legal obligations and protection that comes with the Salomon principle, as well as Singapore Court’s attitude towards correcting the situation by being straightforward and focused on reversing the injustice caused.

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Has Singapore’s Position on Fiduciary Duties Shifted Significantly from the United Kingdom’s Precedent? Adelle Yii, University College London

The concept of fiduciary duties plays an important role in the law of trusts, both in the United Kingdom and Singapore. Although the position in Singapore is vaguely similar to that in the United Kingdom, there has been plenty of judicial and academic discussion in both jurisdictions as to when fiduciary duties should arise and what exactly they entail. These two issues were considered in the recent case of Tan Yok Koon v Tan Choo Suan (“Tan Yok Koon”),1 wherein the Singapore Court of Appeal discussed the nature of fiduciary duties and held in obiter that constructive trustees do owe fiduciary duties. Although the Court referred to cases decided in the United Kingdom, the decision in Tan Yok Koon signified a shift in position, placing emphasis on the need for a voluntary assumption of responsibility for a fiduciary duty to arise and the duty of a fiduciary not to act out of self-interest. Yet the law is still unclear and a greater degree of clarity needs to be provided, either by the courts or Parliament. This article therefore analyses these two aspects of fiduciary duties and how they differ between Singapore and the United Kingdom. Ultimately, this writer will seek to prove that Singapore’s broader scope of what fiduciary duties entail provides for greater consistency in terms of application, although the Singapore courts can consider following the United Kingdom’s approach of keeping constructive trusts as a remedy for the breach of fiduciary duties.

The Position in the United Kingdom and Singapore Prior to Tan Yok Koon When Fiduciary Duties Arise Prior to the decision in Tan Yok Koon, the position in Singapore was similar to that in the United Kingdom, namely, that fiduciary duties arise where someone ‘has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence’.2 Focus was placed by the United Kingdom courts on the voluntary assumption or awareness of duty by the fiduciary.3 On 1

[2017] SGCA 13.

2 Bristol and West Building Society v Mothew [1996] EWCA Civ 533, [1998] Ch 1 18, 19 (Lord Millett) (emphasis added). 3 See for example Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669, 705C–706A.

this understanding, trusts that arise purely by operation of law (namely resulting or constructive trusts) do not in themselves give rise to fiduciary duties. As argued by Professor Lionel Smith, constructive trustees who do not voluntary undertake the duties of an express trustee ‘cannot, without fiction, be said to have assumed obligations of the utmost selflessness’ and therefore cannot be subject to fiduciary obligations.4 Instead, a constructive trust is used as a possible remedy for a breach of fiduciary duties. In FHR European Ventures v Cedar Capital Partners,5 the United Kingdom Supreme Court held that where a fiduciary acquires a benefit which came to his notice as a result of his position, he is to be treated as having acquired the benefit on behalf of his principal, such that it is beneficially owned by his principal. This means that even without a constructive trust being in place, the fiduciary already owes distinct fiduciary duties not to act for his own benefit. By finding a constructive trust, the Court is attempting to remedy an existing breach of duty by ensuring that future transactions relating to the trust property are used solely for the benefit of the principal. The Scope of Fiduciary Duties The scope of fiduciary duties in the United Kingdom was elucidated by Lord Millett in Bristol and West Building Society v Mothew (“Bristol v Mothew”).6 Crucially, Lord Millett explained that a party is not subject to fiduciary duties because he is a fiduciary, but is a fiduciary because he is subject to these duties. A fiduciary must act in good faith without making a profit out of his trust and must not place himself in a position where there may be a conflict between his duty and self-interest. He also has a duty not to act for himself or the benefit of a third party without the informed consent of his principal.7 This provides a clear description of what is expected of a fiduciary and how a fiduciary’s duties may differ 4 Lionel Smith, ‘Constructive Fiduciaries?’ in Peter Birks (ed), Privacy and Loyalty (OUP 1997) 267. 5

[2014] UKSC 4, [2014] 3 WLR 535 [7] (Lord Neuberger).

(n 2).

ibid 18.

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from those of a trustee. In AIB Group (UK) Plc v Redler,8 Lord Toulson reasoned that since trustees are expressly appointed, they are required to preserve the assets of the trust according to the terms of the trust and to manage the property with care. On the other hand, fiduciaries are those who have voluntarily undertaken to act for their principals and have duties which are more general in nature, such as to simply act for the benefit of their principals. As opposed to using the property for a sole purpose, as would be done in a trust deed, the fiduciary must simply ensure that they are acting for the wellbeing of their principal. The United Kingdom has therefore maintained a clear distinction between fiduciary duties and trustee duties. Trustees, being appointed, have a narrower scope of duties which are defined by the trust deed, while fiduciaries, having voluntarily assumed their duties, are responsible for broader and rather generic duties for the benefit of their principals.

Scope of Fiduciary Duties

The Singapore Court of Appeal’s decision in Tan Yok Koon signified a shift from the United Kingdom position on both these issues. The facts of Tan Yok Koon are long drawn, centring around a family dispute. Four siblings, represented by Tan Yok Koon, argued that Tan Choo Suan, the oldest of the five siblings, held shares on trust for them – accordingly, she had therefore breached her fiduciary duties by refusing to recognise their beneficial ownership and by removing two of her siblings as shareholders of the family business.

It was also held in Tan Yok Koon that the first respondent owed a duty not to act in her own benefit from the moment the shares were transferred to her, and that she was liable for breaches of fiduciary duty from that particular point in time.11 The Singapore Court of Appeal kept to a broad concept of fiduciary, describing the duty as ‘not acting out of self-interest’ and having to act for a proper purpose. This marks a shift from the United Kingdom position in Bristol v Mothew: it does away with the detailed explanation in Bristol v Mothew of what fiduciary duties entail and attempts to consolidate the different duties into one broad category. Another contrast exists between the jurisdictions in terms of the distinction between fiduciary duties and trustee duties. While fiduciary duties in Tan Yok Koon were seen to include acting for a proper purpose, fiduciary duties in the United Kingdom have to be special to a fiduciary and not merely constitute general trustee duties. As put forth by Matthew Conaglen, fiduciary duties in the United Kingdom are not deemed to entail acting for a proper purpose because all power holders are subject to such a duty.12

When Fiduciary Duties Arise

Advantages of Singapore’s Position

On the facts, the Court of Appeal found that there was a presumption of a resulting trust since consideration had not been provided in the initial transfer of shares. Tan Choon Suan therefore did have fiduciary duties and subsequently acted in breach of such duties.9 What is crucial for the first issue is Andrew Phang J’s dicta that fiduciary duties can indeed arise in the context of trusts imposed by operation of law at the time the trust crystallises, and that the inquiry into whether a fiduciary duty was undertaken is objective in nature.10 On this note, this article acknowledges (and will subsequently discuss) that although the inquiry of fiduciary duties is supposed to be objective, the ratio of Tan Yok Koon is heavily intertwined with the facts of the case and in some respects, seems to be subjective in nature. Broadly, however, the Court of Appeal’s openness to imposing fiduciary duties on constructive trustees marked a shift from the United Kingdom’s position of using constructive

The decision to find a resulting trust and impose fiduciary duties in Tan Yok Koon was heavily intertwined with the facts of the case. The Court of Appeal examined the actions of each party to determine whether the transfers of shares were intended to be gifts to Tan Choo Suan or to be held on trust by her for the siblings. The position adopted by the Court of Appeal was to find that there was a resulting trust because Tan Choo Suan had provided no consideration for the share transfers and the presumption is that the share transfers were not intended to be gifts.13 The presumption of a resulting trust then gave rise to the fiduciary duties which Tan Choo Suan owed to her siblings, such that she could not validly act in her self-interest.

The Position in Singapore after Tan Yok Koon

trusts as merely a remedy for breach of fiduciary duties. The Singapore courts have instead taken the approach of first declaring a constructive trust and finding a breach of fiduciary duties arising from the constructive trust – in other words, a constructive trustee can owe fiduciary duties.

By adopting a position where the intentions of parties form the key element of determining whether fiduciary 11

ibid [221].

[2014] UKSC 58, [2014] 3 WLR 1367 [69]-[73].

Tan Yok Koon (n 1) [52]-[65].

12 Matthew Conaglen, Fiduciary Loyalty: Protecting the Due Performance of Non-Fiduciary Duties (Hart Publishing 2011).

ibid [188]-[191].

Tan Yok Koon (n 1) [205]-[207].

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duties had arisen, the courts truly engage in an inquiry of whether there was indeed a voluntary assumption of responsibility regarding the trust property in question – a trust cannot simply be imputed where parties had no intention to constitute a trust. Phang J emphasised this by reasoning that there can only be a trust or fiduciary duties where the fiduciary was aware of his duties in that respect.14 It can be argued that this provides certainty for parties in two different ways. Where both parties recognise that one party has undertaken a responsibility towards the other, the courts can enforce these duties, providing security and certainty to the principal. It also provides certainty in the sense that people can enter into transactions with peace of mind that they will not owe additional responsibilities that they were previously unaware of towards another. By making decisions based on the facts of the case, the courts can strike a good balance between protecting the interests of both parties in question, instead of having a strict test which may favour one side more than the other. In addition, Phang J in obiter made it clear that constructive trustees owe fiduciary duties, ensuring that they act in the best interests of the beneficiaries.15 The court plays a declaratory role when it comes to resulting and constructive trusts, with the most common circumstances being where an express trust has failed, or where a trustee voluntarily assumes responsibility with regards to trust property. It is not difficult to see why Phang J adopted this position since there was already an underlying intention to constitute a trust and it would only be natural that the constructive trustee should owe fiduciary duties. By placing fiduciary duties on the constructive trustee, it ensures that the trustee acts in the best interests of the beneficiaries, as was intended. This means that a constructive trustee cannot deny any responsibility simply because the intended express trust had failed and act in his self-interest. This will lead to unfair outcomes for the intended beneficiaries and will bring about uncertainty in the law of trusts. It is the opinion of this article that ensuring that constructive trustees must be accountable for fiduciary duties ensures that parties with beneficial ownership over the trust property will be protected. Other than preventing the constructive trustee from denying his assumed responsibility, fiduciary duties also make sure that the constructive trustee does not abuse his position for his own benefit. A good example of these advantages can be seen through the facts of Tan Yok Koon. The Court found that since the transfer of shares from the four siblings to 14

ibid [198]-[214].

ibid [199]-[204].

Tan Choo Suan was not a gift and no consideration was provided, there was a presumption of a resulting trust. This demonstrates the first advantage of Singapore’s approach, in that Tan Choo Suan could not deny any knowledge that the shares were meant to be held on trust, preventing her from taking the shares for herself. Furthermore, the Court found that Tan Choo Suan was guilty of breaching her fiduciary duties by using the shares and acting in her self-interest. This could be seen where Tan Choo Suan removed two of her siblings as directors of the family company and admitted that she had done so because they were not showing her due respect as director of the company.16 This demonstrates the second advantage in that Tan Choo Suan could not argue that since the intended ‘Tan family trust’ had failed, she could be absolutely entitled to the shares which were transferred to her. She was also prohibited from abusing her position as director to act according to her own wishes, but had to act for a proper purpose which would benefit her siblings. Phang J seems right to adopt this position as it provides a high level of protection for those with beneficial ownership of trust property, whilst giving due consideration to the degree of knowledge which the constructive trustee has.

Problems with Singapore’s Approach When Fiduciary Duties Arise Although the Court of Appeal made it clear that intentions of a trust are to be determined on an objective basis, the fact that intentions are heavily dependent on the facts of the case stretches the limits of objectivity and introduces potential uncertainty. It is possible that the courts may end up imposing duties on parties even where there may not have been a clear intention for the property in question to be held on trust. In some cases where the intentions of parties may not be clear through their actions, the courts will have to make assumptions as to the intended outcome. Evidence of intention is often drawn from transfer documents, which does not provide conclusive reasons for the transfer or the intended purpose of the property. The whole issue giving rise to resulting trusts is that a full trust document has not been drawn up and by relying on inconclusive documents, the courts must exercise discretion in assuming the intention of parties. Leaving the courts with wide powers of discretion will only introduce inconsistency in case law and will lead to uncertainty in the law of trusts. In Tan Yok Koon, Phang J recognised that, although in certain transactions it was clear that the transfers of shares were not gifts, there were instances of uncertainty as many transactions took place within the family and 16

ibid [221]-[222].

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were not in writing. This made it harder for the Court of Appeal to ascertain the true intention of the siblings when they made certain transfers of shares and the Court may have had to make assumptions regarding their intentions. This undermines the objective test set out and may lead to a subjective test that can favour parties with a beneficial interest, whilst working to the detriment of the supposed trustee. By introducing subjectivity, the Court is running a risk of having cases where a resulting trust is declared even where it is uncertain as to whether the ‘trustee’ has assumed responsibility towards the other party. In order to ensure there is certainty in this area of law, the courts must be clear as to whether the test is objective or subjective. If a subjective approach is preferred, the courts should only declare a resulting trust where there is a high degree of certainty as to the parties’ intentions. Scope of Fiduciary Duties The definition of fiduciary duties set out by the Singapore courts is also arguably too vague and has undermined the distinction between fiduciary duties and trustee duties. In Tan Yok Koon, the Court of Appeal continuously emphasised that a fiduciary’s duty is to act for the benefit of the parties with beneficial ownership and not out of self-interest. It is unclear what exactly falls within the definition of ‘self-interest’ and whether actions which may place a fiduciary in a position of potential conflict of interest will be sufficient. Although the Court did consider the position adopted by the English Courts in Bristol v Mothew, which prohibited fiduciaries from being in a position of conflict,17 the Court still opted for the briefer description of not acting out of self-interest. By first declaring a resulting trust and then finding that the trustee owes fiduciary duties, the Court has left barely any distinction between the two types of duties and removed the utility of fiduciary duties. It would be far simpler and less confusing if the Court found that Tan Choo Suan owed duties as a trustee, instead of finding that she had acted in breach of fiduciary duties – Tan Choo Suan could have been said to be in breach of a normal trustee duty to act for the benefit of her beneficiaries. The counter-argument to this is that there is unlikely to be a trust document detailing the trustee’s duties in a resulting trust. However, in the present case, even without a trust document it was clear that Tan Choo Suan’s actions of removing her siblings as directors of the company could not be part of their intentions when they transferred the shares to her. It is evident even without a trust document that acting in such a manner would be in breach of a trustee’s general duty not to abuse the trust property for his own benefit. Therefore, 48

(n 6).

at least with regards to the case of Tan Yok Koon, the distinction between fiduciary duties and trustee duties was unnecessarily blurred.

Should Singapore Have Kept the United Kingdom Approach? It can be argued that the shift in position from the United Kingdom was for the better of the legal system in Singapore. As recognised by Professor James Penner, the notion of loyalty relied on in the United Kingdom is both over and under-inclusive as many wrongs which are classified as disloyal are not necessarily breach of fiduciary duties.18 The mere fact that one acted in a disloyal manner does not immediately point to a breach in fiduciary duty and it would be misleading to classify the two as being the same. Singapore’s position seems to provide greater clarity in this sense, as there must be an act which is similar to a breach of duty, as opposed to the vague notion of loyalty. Therefore, Singapore should continue finding a breach of fiduciary duties on the basis of acting in one’s self-interest, as opposed to a breach of loyalty, as it ensures that there is consistent application of the concept and provides greater transparency in the law of trusts in Singapore. However, Singapore can reconsider its position of imposing resulting trusts before finding that one owes fiduciary duties. In Tan Yok Koon, Phang J recognised that imposing resulting trusts does cause a problem for fiduciary duties. Although the Court accepted the resulting trust as a form of fiduciary relationship, this shifts the focus of how fiduciary duties come about. Instead of finding that such duties arise from a voluntary assumption of responsibility, it seems that such duties now arise from an event.19 Using the case of Tan Yok Koon as an example, it was found that the events which gave rise to the resulting trust were also the events that gave rise to Tan Choo Suan’s fiduciary duties. This seems to contradict the Court’s stance that voluntary assumption of responsibility is the crucial element of finding fiduciary duties. In order to provide clarity in the law of trusts, the courts must take a clear stance as to whether fiduciary duties should arise from an event or through the voluntary assumption of responsibility. Given that the current precedent has been set through the courts’ decisions, at this point of time it would be better for reform to be left to the courts, instead of having Parliament step in. In this area, perhaps Singapore should have remained with the United Kingdom’s position of relying on the 18 James E Penner, ‘Distinguishing Fiduciary, Trust and Accounting Relationships’ (2014) 8 Journal of Equity 202, 214-234. 19

Robert Chambers, Resulting Trusts (OUP 1997) 196-200.

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assumption of responsibility in finding fiduciary duties, instead of solely on the imposition of a resulting trust. By allowing fiduciary duties to arise from an event may be to impose responsibility where parties had no intention to do so or were unaware that they were expected to act in a certain manner. It would be unfair if the courts were to place fiduciary duties on parties where they were genuinely unaware that they were expected to carry out such responsibilities. One of the possible problems with relying on intention in finding fiduciary duties is that intention is often hard to judge, especially where it is not put down in writing. However, in the case of fiduciary duties, an assumption of responsibility can often be seen through the actions of both parties. In Commissioners for Customs and Excise v Barclays Bank,20 albeit a case in tort, the House of Lords held that reliance is typically visible in the behaviour of the principal. The same principle can be applied to fiduciary relationships, as it will be evident through the behaviour of the principal whether there was reliance on the fiduciary to act on his behalf. If such behaviour is capable of being noticed by the courts, it will also be obvious to the fiduciary who will recognise that he has undertaken responsibility towards the principal. This ensures that fiduciary duties are only imposed where both parties intended to enter a fiduciary relationship and where there was a voluntary assumption of such responsibility. This is arguably a better position for the Singapore courts to take as it gives effect to the intentions of both parties, instead of having to go through the process of declaring a resulting or constructive trust first.

Concluding Thoughts It is evident that both jurisdictions share the same underlying principles when it comes to fiduciary duties, emphasising the importance of acting for the benefit of the principal. The positions differed in terms of defining the scope of fiduciary duties and the role that resulting trusts play in the law of trusts. Singapore has adopted a broader definition of fiduciary duties and has adopted the process of first declaring a resulting or constructive trust and later considering whether there was a breach of fiduciary duty. The United Kingdom has taken the route of a detailed analysis of fiduciary duties, whilst keeping constructive trusts a remedy for the breach of fiduciary duties. This article has sought to prove that Singaporeâ&#x20AC;&#x2122;s broader definition of fiduciary duties provides greater consistency in terms of application. On the other hand, the Singapore courts can consider following the United Kingdomâ&#x20AC;&#x2122;s approach by keeping constructive trusts as a remedy, instead of using it as the step before imposing fiduciary duties. 20

[2006] UKHL 28, [2006] 3 WLR 1.

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‘Judge-Driven in a Vehicle of Discretion’: Is the Road Blocked Off to Remedial Constructive Trusts in Singapore? Herman Lin Yao Ahmad, University of Oxford

Introduction The remedial constructive trust remains one of the many perennial difficulties in equity jurisprudence, and like most of trusts law, has been confounded by conflicting case law and academic writing. Since the distinction between institutional and remedial constructive trusts was first articulated by American legal scholar Roscoe Pound in the Harvard Law Review in 1920,1 it has since been interpreted and brought into English law (and consequently Singapore law) through legal writing2 and the common law.3 A century later, the remedial trust seems to have been condemned in English law, with the courts choosing to limit findings of constructive trusts to an orthodox institutional constructive trust analysis.4 However, its position in Singapore jurisprudence is less certain. This article therefore seeks to explore the status of the remedial constructive trusts in Singapore de lege ferenda by considering, first, the key differences between institutional and remedial constructive trusts de lege lata; second, the status of the remedial constructive trust in the United Kingdom and in Singapore; and third and most importantly, the central issues at stake when choosing whether or not to accept this doctrine. Ultimately, it is submitted that these issues can be condensed into one singular dilemma which lies in the heart of equity. With this in mind, this article then suggests that the Singapore courts should embark on an overhaul of constructive trusts so as to achieve muchneeded legal coherence and certainty.

The Distinction Between ‘Institutional’ ‘Remedial’ Constructive Trusts

and

The meaning of a remedial constructive trust, as opposed to an institutional constructive trust,5 has helpfully been clarified by the English courts.6 Lord Browne-Wilkinson’s explanation in Westdeutsche Landesbank Girozentrale v Islington LBC (“Westdeutsche”) is instructive: Under an institutional constructive trust, the trust arises by operation of law as from the date of the circumstances which give rise to it: the function of the court is merely to declare that such trust has arisen in the past. The consequences that flow from such trust having arisen (including the possibly unfair consequences to third parties who in the interim have received the trust property) are also determined by rules of law, not under a discretion. A remedial constructive trust, as I understand it, is different. It is a judicial remedy giving rise to an enforceable equitable obligation: the extent to which it operates retrospectively to the prejudice of third parties lies in the discretion of the court.7

1 Roscoe Pound, ‘The Progress of the Law – Equity’ (1919-20) 33 Harv L Rev 420, 420-421.

Summarily, the distinction boils down to two matters of judicial discretion and retrospectivity,8 namely: (a) that an institutional trust arises by operation of law, while a remedial trust is a judicial remedy arising under an exercise of judicial discretion; and (b) the corollary of the first matter) that an institutional trust must arise from the date of the circumstances which give rise to it, while a remedial trust may operate retrospectively from the date of the court order.

2 Ronald Maudsley, ‘Proprietary Remedies for the Recovery of Money’ (1959) 75 LQR 234, 237; Donovan W M Waters, The Constructive Trust (Sweet & Maxwell 1964). While much writing has been devoted to arguing that Pound’s writing was misinterpreted, it is undoubtable that the distinction between institutional and remedial constructive trusts has since been entrenched into orthodoxy through case law (see n 3).

5 It is acknowledged that terminology of ‘institutional’ and ‘remedial’ might not be accurate, as argued by the likes of Peter Birks and William Swadling. This is discussed subsequently, but for the immediate purposes of laying out the law as it stands, these terms will be adopted and explained accordingly.

3 Hussey v Palmer [1972] 3 All ER 744, 747; Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391, 478-480; El Ajou v Dollar Land Holdings plc [1993] 3 All ER 717, 733-734; Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, 714-716; Re Polly Peck International Plc (No 2) [1998] 3 All ER 812, 823-827, 830-831. 4 Re Polly Peck (No 2) (n 3) 823-827, 830-831 (noted Peter Birks, ‘The End of the Remedial Constructive Trust’ (1998) 12 TLI 202).

6 This has been accepted and applied by the Singapore courts: see for example Ching Mun Fong v Liu Cho Chit (No 2) [2001] SGCA 36, [2001] 1 SLR(R) 856. 7 Westdeutsche Landesbank Girozentrale (n 3) 714-715 (emphasis added). 8 Birks (n 4) 203; London Allied Holdings v Lee [2007] EWHC 2061 (Ch), [2007] All ER (D) 153 (Sep) [273]; Crossco No 4 Unlimited v Jolan Ltd [2011] EWCA Civ 1619, [2012] 2 All ER 754 [84].

LAW AND COMMERCE The Significance of the Remedial Constructive Trust

Westdeutsche,13 which has been cited in all subsequent cases concerning the remedial trust in both jurisdictions.

It must first be understood that the constructive trust is a form of relief frequently sought by litigants. This is because it is a proprietary remedy, as opposed to a personal remedy (such as damages). There are several advantages to a remedy in rem,9 but the primary reason is that a claimant who has a proprietary right will have priority over the rest of the defendant’s creditors in cases where the defendant is insolvent. However, it has been said that trusts are governed by ‘hard-nosed property rights’.10 As a result, an institutional constructive trust adopts a stringent approach guided by property law: the trust either exists from the date of the circumstances, or it does not exist at all. The court merely performs an identificatory function. The corollary of this is that innocent third parties (such as the defendant’s unsecured creditors) are often disadvantaged due to factors beyond their control.

Interestingly, Westdeutsche was primarily concerned not with constructive trusts, but with resulting trusts in circumstances where the settlor’s intention had been vitiated by mistake. The brief facts of the case are as follows. The claimant bank had entered into an interest rate swap with the defendant local authority. It was later discovered in separate proceedings that local authorities in England lacked the capacity to enter into such contracts and the contract was therefore void. The claimant had however previously paid a tranche of money to the defendant pursuant to the agreement. An action was brought for restitution of the said money. The claimant wished to also claim compound interest. Since this remedy was only available in equity (other than in cases of fraud), the claimant therefore sought to establish that a resulting trust had arisen in favour of the claimant. An institutional constructive trust could not have arisen because the defendant had no relevant knowledge (and therefore no unconscionability) sufficient to raise a constructive trust at any time before the moneys became untraceable (when the bank account went into overdraft).14 What is crucial to this discussion is that although Lord Browne-Wilkinson held that resulting or constructive trusts were inappropriate on the facts, he suggested that the remedial constructive trust ‘may provide a more satisfactory road forward’.15 Nevertheless, his Lordship concluded by leaving the possibility of such a doctrine open: ‘whether English law should follow the United States and Canada by adopting the remedial constructive trust will have to be decided in some future case when the point is directly in issue.’

In contrast, the remedial trust is a creature of discretion. Since a remedial trust can operate retrospectively, it effectively allows judges, by an order of court, to grant a proprietary right de novo to someone who previously had none.11 It does not apply, and is therefore not constrained by, hard-nosed property rights. As a result of this lack of rigidity, the remedy granted can be ‘tailored to the circumstances of the particular case, [such that] innocent third parties would not be prejudiced and restitutionary defences, such as change of position, are capable of being given effect’.12 The courts could exercise their discretion and achieve the best possible outcome between the claimant and innocent third parties. In theory, therefore, the remedial trust could be a useful tool.

Status of the Remedial Constructive Trust in the United Kingdom and Singapore In order to comprehensively analyse the future of the remedial constructive trust in Singapore, it is worth taking into account its origins in case law in both the United Kingdom and Singapore, with particular focus on why and in what manner the positions in the two jurisdictions have diverged. The common starting point for both jurisdictions is the House of Lords’ seminal decision in

9 See for example Foskett v McKeown [2001] 1 AC 102 (increase in value of the property); Westdeutsche (n 3) (ability to claim compound interest); Ching Mun Fong (n 6) (better limitation period).

A. The United Kingdom Whatever was left open by Lord Browne-Wilkinson in 13 ibid. It is acknowledged that prior cases such as Metall und Rohstoff (n 3), El Ajou (n 3) and In re Goldcorp Exchange Ltd [1994] UKPC 3, [1995] 1 AC 74 also considered the remedial constructive trust. That being said, Westdeutsche remains the first instance in which the courts clearly laid out the elements of the doctrine and has been the case most cited by the Singapore courts. 14

ibid 707, citing with approval Re Goldcorp (n 13).

11 Metall und Rohstoff (n 3) 478-479; Re Polly Peck (No 2) (n 3) 830; Ching Mun Fong (n 6) [34].

ibid 716.

(n 3).

12 Westdeutsche (n 3) 716.

(n 6).

10 Foskett v McKeown (n 9) 109.

The positions in the United Kingdom and Singapore diverge from here, starting from the varied treatments of the remedial trust doctrine in the English Court of Appeal’s 1998 decision in Re Polly Peck International Plc (No 2) (“Re Polly Peck (No 2)”)16 and the Singapore Court of Appeal’s 2001 decision in Ching Mun Fong v Liu Cho Chit (“Ching Mun Fong”)17.

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Westdeutsche seems to have been conclusively shut close by the Court of Appeal in Re Polly Peck (No 2).18 This case involved an application to commence legal action against a company that was insolvent and in administration. One of the principal claims was that the applicants were entitled to a remedial trust over the proceeds of sale of shares held by the company’s subsidiaries. A claim for institutional constructive trust had failed in the lower courts for want of a fiduciary relationship. The Court of Appeal rejected any finding of remedial constructive trust, on the basis that exercising judicial discretion in this regard would have run contrary to the administration scheme imposed by the Insolvency Act 1986 and usurped the role of the legislature. Mummery LJ famously held that ‘[t]he insolvency road is blocked off to remedial constructive trusts, at least when judge-driven in a vehicle of discretion.’ Nourse LJ went even further to rule emphatically that even if the defendant had not been insolvent (and had therefore not triggered the statutory insolvency regime), a remedial constructive trust should not be found: ‘It is not that you need an Act of Parliament to prohibit a variation of proprietary rights. You need one to permit it.’ This harsh treatment of the remedial trust has therefore led commentators such as Peter Birks to conclude that such a doctrine has seen its demise in English law.19 Several subsequent rulings have also as a result simply concluded that the English courts do not recognise a remedial constructive trust.20 Notwithstanding, it is worth mentioning the judgment of Etherton J in the High Court of Justice in London Allied Holdings v Lee (“London Allied Holdings”).21 While his statements on the remedial trust are obiter in a lower court and have not been recognised in any subsequent case, they provide some food for thought. The case concerned an action for restitution of money paid as a result of fraudulent misrepresentations. The claimant sued on various grounds, including that a constructive trust had arisen in its favour upon payment of the said money. While Etherton J eventually ruled that the defendant held the money on an institutional constructive trust for the claimant, what is crucial for the discussion at hand was his comments on the remedial trust. After considering the doctrine in case law and academic writing and concluding that it ‘received a generally hostile reception in England’, the learned judge

(n 3).

Birks (n 4).

20 Sinclair Investment Holdings SA v Versailles Trade Finance [2011] EWCA Civ 347, [2012] Ch 453 [37]; FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45, [2015] AC 250 [47]; Bailey v Angove’s Pty Ltd [2016] UKSC 47, [2016] 1 WLR 3179 [27]. 21

(n 8).

made three points.22 First, he suggested that criticisms of judicial discretion might be considered ‘overly emphatic’ on the basis that such discretion also existed in the doctrine of proprietary estoppel. Proprietary estoppel, he noted, gave strong discretion to the court to decide upon the appropriate form of relief, ‘including whether it should be personal or proprietary and whether it should be to protect the claimant’s expectations or compensate for reliance loss’. Second, he recognised that in principle, there was no binding authority in English law against the remedial constructive trust. The judgment in Re Polly Peck (No 2) should be confined to cases of insolvency. Third, he opined that there was still scope for a model of the remedial trust ‘more suited to English jurisprudence, borrowing from proprietary estoppel’. Unfortunately, Etherton J’s statements have no bearing on the current status of the remedial trust in English law. Nevertheless, they will be worth keeping in mind when we subsequently consider the issues facing the remedial trust and the future of such a doctrine in Singapore. B. Singapore In contrast, the Singapore courts have not been overtly hostile to the concept of the remedial constructive trust.23 The remedial trust was first recognised by the Singapore High Court in PP v Intra Group (Holdings) Co Inc (“PP v Intra Group”).24 However, Yong Pung How CJ withheld any consideration of remedial trusts and stopped short at agreeing with Lord Browne-Wilkinson in Westdeutsche that the doctrine will have to be considered in future cases.25 There is therefore little merit in examining this judgment in this regard. The first meaningful discussion of the remedial trust in Singapore jurisprudence was two years later, in the seminal case of Ching Mun Fong.26 The facts are as follows. The appellant’s husband, Mr Tan, had agreed to buy land from the respondent and the respondent’s wife. In furtherance of this, Mr Tan paid the respondent a portion of the purchase price, amounting to US$642,451.04. No conveyance ever occurred. It was later discovered (almost seventeen years after the payment) that neither the respondent nor the respondent’s wife had any interest in the land. The appellant, on behalf of her late husband’s estate, brought an action for restitution of the said amount. In order to overcome the issue of the statutory limitation period, the appellant argued that the

ibid [274].

23 See generally Tang Hang Wu, ‘The Constructive Trust in Singapore: Five Persistent Puzzles’ (2010) 22 SacLJ 136 [12]-[23]. 24

[1999] SGHC 11; [1999] 1 SLR(R) 154.

ibid [46]-[47], citing with approval Westdeutsche (n 3) 716.

(n 6).

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court should declare a remedial trust over the sum paid.27 L P Thean JA, delivering the judgment of the Court of Appeal, refused to impose a remedial constructive trust, instead holding that the respondent owed only a personal obligation (which had since been time-barred). Citing Westdeutsche, he elucidated the principles behind the court’s reasoning: A remedial constructive trust is a restitutionary remedy which the court, in appropriate circumstances, gives by way of equitable relief. In order for a remedial constructive trust to arise, the payee’s conscience must have been affected, while the monies in question still remain with him. If, as was the situation in the Westdeutsche case, the payee learns of the mistake only after the monies have got mixed with other funds or dissipated, no constructive trust in respect of these monies can arise. This is because there would no longer be an identifiable fund for the trust to bite.28 It seems that the remedial trust failed for the same reasons an institutional constructive trust would have failed.29 Additionally, the court also took into account the following facts: first, the relationship between parties was only that of a vendor and purchaser and was wholly commercial (likely because this was indicative that no fiduciary relationship could have arisen); second, there was no dishonest conduct by the respondent (likely because this was indicative that unconscionability only arose upon discovery of the mistake); and third, it was never the parties’ intention for the money to be kept distinct as an identifiable fund (likely because this was indicative that no express or implied trust could have arisen).30 Despite the fact that the remedial trust was not applied, the decision in Ching Mun Fong is significant. It does not reject the remedial trust as a doctrine – instead it purports to lay down some guiding principles as to its application, which have been considered and developed in subsequent case law. The remedial trust was next considered in the High Court in the difficult case of Comboni Vincenzo v Shankar’s 27 The existence of an institutional constructive trust was not pleaded. This is likely because on the facts, the money had already been spent or mixed with the respondent’s funds by the time that parties became aware of the mistake; in other words, by the time there was sufficient knowledge and unconscionability to give rise to a possible institutional constructive trust, the moneys (being the subject matter of the trust) had become unidentifiable, precluding the finding of a trust: Westdeutsche (n 3) 707; Re Goldcorp (n 13). 28 Ching Mun Fong (n 6) [36], citing Westdeutsche (n 3) 707. 29

(n 27).

30 Ching Mun Fong (n 6) [37].

Emporium (Pte) Ltd (“Comboni”).31 On the facts, the first plaintiff was the victim of an elaborate fraud. As part of the fraud, he paid substantial sums of money into a bank account owned by the defendant. The defendant claimed that it was an innocent third party: it was not privy to the fraud and had no knowledge of any wrongdoing. According to the defendant, it traded with a Nigerian company that frequently instructed third parties to pay the defendant in order to write off debts between them. With the plaintiff’s claim of express trust rejected by the court, the plaintiff’s second head of claim based on knowing receipt was considered by the court. Kan Ting Chiu J reasoned that the requisite elements of knowing receipt (as laid out in El Ajou v Dollar Land Holdings)32 could not be made out unless a remedial constructive trust is found against the defendant. Kan J thought that since a remedial constructive trust was premised on unconscionability (citing Ching Mun Fong),33 the vital issues in this context were: ‘first, what does it mean for a recipient’s conscience to be affected, and second, whether the defendant’s conscience was in fact affected in this case’.34 On the facts, it was held that the defendant did not have actual or wilful knowledge of the fraud and as a result its conscience was not affected. However, by the end of the trial, the defendant must have known that the remittances were tainted by fraud. The defendant therefore became a constructive trustee of a sum of money still in the defendant’s hands at the date of the trial. The reasoning of Comboni has since been heavily criticised.35 With respect, Kan J indeed seemed to have conflated a personal claim for liability to account (under the doctrine of knowing receipt) and a proprietary claim (under the remedial constructive trust). In doing so, he relaxed the requirements for establishing knowing receipt, effectively doing away with the need for a breach of fiduciary duty. Yet both doctrines, at least in lex lata, are very different creatures and their elements should not be fused. Given that a higher court has recognised this error in Wee Chiaw Sek Anna v Ng Li-Ann Genevieve (“Anna Wee”),36 it is hereby submitted that the ratio in Comboni should be limited to knowing receipt and should not factor into the present analysis on remedial constructive trusts. That being said, it is worth noting that Kan J thought that the remedial constructive trust was certainly a part of Singapore law—a clear departure 31

[2007] SGHC 55; [2007] 2 SLR(R) 1020.

[1994] 2 All ER 685 700.

(n 6).

34 Comboni Vincenzo v Shankar’s Emporium (Pte) Ltd (n 31) [50]-[53]. 35 Tang (n 23) [18]-[21], cited with approval in Wee Chiaw Sek Anna v Ng Li-Ann Genevieve [2013] SGCA 36, [2013] 3 SLR 801 [138]. 36

(n 35) [138].

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from English jurisprudence.37 Briefly, the donatio mortis causa case of Koh Cheong Heng v Ho Yee Fong (“Koh Cheong Heng”)38 should be mentioned. Judith Prakash J in the High Court reasoned that the plaintiff donor could revoke an earlier gift under donatio mortis causa because a remedial constructive trust would arise upon revocation. Prakash J was careful to explain that utilising the remedial trust in cases of donatio mortis causa ‘would not be overly extending the law or generating uncertainty in proprietary interest’ given the stringency of its pre-existing requirements.39 However, such a novel development in the remedial trust doctrine should be narrowly confined to donatio mortis causa cases. Indeed, it was clarified in the later Court of Appeal decision of Anna Wee that Koh Cheong Heng was adopted within these limited confines and does not have any bearing on the imposition of remedial constructive trusts ‘under the general law’.40 We finally turn to the important case of Anna Wee,41 wherein the doctrine of the remedial constructive trust was extensively considered by the Court of Appeal. On the facts, the appellant brought a claim of fraudulent misrepresentation against the first respondent, who represented the estate of the appellant’s ex-husband. She alleged that her ex-husband had fraudulently misrepresented to her that he had little or no assets, inducing her to forgo her entitlement to a division of the matrimonial assets at the time of the divorce. Subsequently, the appellant discovered the existence of two trusts of substantial monies, created by her exhusband, held by the second respondent in favour of their children. The appellant therefore also pursued a claim of unjust enrichment against the second respondent, pleading that the court should impose, as a remedy, a remedial constructive trust over the monies for her benefit. On the facts, the Court of Appeal held that the appellant’s claims failed on the basis that the ‘threshold question’ of fraudulent misrepresentation was not successfully proven. Nonetheless, what is relevant to this discussion is the court’s observations regarding the remedial trust.42 The Court of Appeal’s comments were in response to the appellant’s submission that a remedial constructive trust may be imposed as a ‘discretionary tool for fairness and justice’ and that as such, it was not premised on any fraud or wrongdoing on the part of the defendant. 37

(n 31) [52].

[2011] SGHC 48, [2011] 3 SLR 125.

ibid [46].

Andrew Phang JA, delivering the judgment, disagreed emphatically: “In our view, it cannot be the case that vague notions of fairness or justice are the sole yardsticks in the exercise of the court’s discretion.” Citing Ching Mun Fong,43 Phang JA held that a remedial constructive trust may only be imposed where the defendant’s conscience is affected. The court proceeded to consider various cases from jurisdictions that recognise the remedial constructive trust (Canada, New Zealand and Australia), concluding as follows: (1) [a remedial constructive trust] is not simply a response to some broad notion of unconscionability but is being developed incrementally in response to certain events and factors, including unjust factors in unjust enrichment; and (2) unconscientiousness or unconscionability (as the conclusion of a process of legal reasoning in the main claim) affecting the knowledge of the recipient of the assets in question is an additional element which must exist before [a remedial constructive trust] may be imposed.44 Following Anna Wee, the principles governing the imposition of a remedial constructive trust in Singapore seem to be more clearly defined. First, a remedial constructive trust is not a pure exercise of discretion imposed by virtue of broad notions of fairness, justice or unconscionability. Like the institutional constructive trust, it can only be applied in response to certain events and factors, incrementally developed by the common law. Second, establishing these main events or factors (such as unjust enrichment) is not enough. There must exist an additional element of unconscionability affecting the knowledge of the recipient of the assets in question. Ultimately, it is clear that the doctrine has not been rejected in Singapore jurisprudence; however, the courts have been especially careful in defining and confining its scope before any application of it under general trusts law.

The Central Issues at Stake : What is Wrong with the Remedial Constructive Trust? How should the Singapore courts develop this doctrine from here: should it go the way of the English courts in condemning the remedial trust? Any meaningful analysis of the future of the remedial trust will require a deep consideration of the reasons why courts, particularly in the United Kingdom, are slow or even averse to recognising such a doctrine. Much ink has been spilt on criticising the remedial trust. Lord Neuberger famously

40 Anna Wee (n 35) [171]-[172]. 41

(n 35).

ibid [169]-[185].

44 Anna Wee (n 35) [182].

(n 6) [36].

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commented, extra-judicially: There is much to be said for the notion of a remedial constructive trust displays equity at its flexible flabby worst… [I]t is unprincipled, incoherent and impractical,… it renders the law unpredictable,… it is an affront to the common law view of property rights and interests,… it involves the court usurping the role of the legislature, and, as if that were not enough,… the development of the remedial constructive trust is largely unnecessary.45 This article attempts to identify several of these issues, grounded in case law and academic writing, before evaluating each issue on its merits. In this author’s view, four broad concerns exist: first, whether the remedial trust is indeed necessary given the availability of personal remedies and the institutional constructive trust; second, the danger of judicial discretion and the alleged legal uncertainty its exercise brings; third, the fear that the courts usurp the role of legislature; and fourth, the discomfort with allowing judicial redistribution of hard-nosed property rights. As earlier mentioned, it is submitted that the real bone of contention in each of these issues truly boils down to one issue lying in the heart of equity, that being the last issue of judicial redistribution of proprietary rights. A. Is the Remedial Constructive Trust Really Necessary? First, it is questioned whether there is actually a need for the remedial trust, especially given the availability of personal remedies and the institutional constructive trust. These will be discussed and evaluated separately. (i) The Availability of Personal Remedies Potential claimants can resort to personal remedies, typically an award for damages. Given this, is there then really a need for the courts to grant a proprietary remedy through the creation of an equitable proprietary interest de novo? It is acknowledged that there are several reasons why claimants would prefer the proprietary route, with a major reason being better protection in cases of the defendant’s insolvency. But this, it is argued, should apply only to institutional constructive trusts, which, in lex lata, arises by operation of law – the court has no choice but to declare a trust and let claimants ‘vindicate’46 their property rights if the elements are made out. In contrast, 45 Lord Neuberger, ‘The Remedial Constructive Trust – Fact or Fiction’ (Banking Services and Finance Law Association Conference, Queenstown, August 2014) <https://www.supremecourt.uk/docs/ speech-140810.pdf> accessed 30 May 2018.

46 Foskett v McKeown (n 9) 109.

the remedial trust is a creature of the court’s discretion – it is entirely up to the court whether to impose such a remedy. Why should the court then actively choose to favour the claimant to the detriment of innocent third parties (such as unsecured creditors), especially when presumably a claim for an institutional constructive trust has already failed? As argued by Roy Goode: It is when [scholars] seek to … argue for a proprietary right when there is no proprietary base that the line is crossed between what is fair and what is not, for it is the defendant’s unsecured creditors who are then at risk … the wrong done to the plaintiff by the defendant’s improper receipt is no different in kind from that done to creditors who have supplied goods and services without receiving the bargained for payment.47 Two responses can be levelled against this criticism. Firstly, it is far too simplistic to draw a dichotomy between institutional and remedial constructive trusts on the basis that the courts have no choice in the former but complete discretion in the latter. It is by no means the case that no choice is made by the courts in relation to institutional constructive trusts – it is merely that this choice had already been made when the class of constructive trust was first recognised;48 subsequent courts have no choice only because they are bound by precedent. Looking forward, it is inevitable the courts will once more exercise discretion in developing and expanding institutional constructive trusts, especially if they should recognise new categories of constructive trusts.49 In fact, it has been argued50 that recognising new types of remedial constructive trusts is a principled way to expand the types of constructive trusts.51 Therefore, in any given case, the reasons why the courts should grant claimants proprietary remedies to the detriment of third parties is the same whether a remedial or institutional constructive trust is imposed. This article does not purport to go into these reasons or their merits in detail. Summarily, they include, inter alia: that the claimant did not accept the risk of the insolvency; that the property in question was never meant to be for the benefit of the defendant and so cannot form part of the estate; that the 47 Roy Goode, ‘Ownership and Obligation in Commercial Transactions’ (1987) 103 LQR 433, 444, cited with approval in Bailey v Angove’s (n 20) [26]. 48 For example Keech v Sandford (1726) Sel Cas King 61 (unauthorised profits); Lysaght v Edwards (1876) 2 Ch D 499 (specifically-enforceable contracts); Binions v Evans [1972] Ch 359 (contractual licences); Pallant v Morgan [1953] Ch 43 (cooperative acquisitions); Stack v Dowden [2007] 2 All ER 929 (family homes). 49 As the English courts recently did in Stack v Dowden (n 48) and Jones v Kernott [2011] 3 WLR 1121. 50

Tang (n 23) [25]-[27].

51 It could be argued that Koh Cheong Heng (n 38) is one such instance, given that Prakash J used the vehicle of the remedial trust to expand constructive trusts into cases of donatio mortis causa.

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creditors would otherwise reap a windfall and be unjustly enriched at the claimant’s expense.52 The second response relates to the underlying concern of this issue – the protection of innocent third parties. A criticism against the remedial trust on this basis is unfounded given that the remedial trust actually allows greater protection to third parties than the institutional constructive trust. As recognised by Lord BrowneWilkinson in Westdeutsche,53 the remedy granted can be nuanced such that innocent third parties would not be prejudiced. Restitutionary defences like change of position, not recognised in the institutional constructive trust, can also be given effect to. It is crucial to note that unlike the institutional constructive trust in lex lata, the remedial trust is an option at the disposal of the courts. It therefore further strengthens the protection of third parties: when a court thinks that, on the facts, personal remedies are sufficient and a constructive trust is unnecessary or unduly detrimental to third parties, it can always refuse to give a proprietary remedy. On this reading, the doctrine ensures that the remedial trust is only used when absolutely necessary (akin to the availability of specific performance in contract law). This is therefore a non-issue. (ii) The Development of Institutional Constructive Trusts It has been argued by Lord Millett, writing extra-judicially, that instead of recognising the remedial trust, there exists a more viable alternative in developing the existing law of the institutional constructive trust: ‘There is neither room nor need for the remedial constructive trust… We need to be more ready to categorise wrongdoers as fiduciaries and to extend the situations in which proprietary remedies are made available, but we can do all this while adhering to established principles.’54 This argument purports that once developed, the institutional constructive trust can reap the same benefits of the remedial trust, such as greater protection for innocent third parties, whilst avoiding the problems the remedial trust brings. This is however erroneously idealistic if we adopt the understanding of the institutional constructive trust in lex lata and view it as a vindication of property rights.55 On this understanding, the institutional constructive trust is inherently and inevitably rigid. 52 See generally Craig Rotherham, Proprietary Remedies in Context (Hart Publishing 2002); cf William Swadling, ‘Policy Arguments for Proprietary Restitution’ (2008) 28 LS 506. This ‘bankruptcy puzzle’ is briefly summarised by Tang (n 23) [44]-[46].

This is evident from the Singapore case of PP v Intra Group,56 discussed briefly above. On the facts, Mr Chotirmall and the defendant attempted to create an express trust on a property, which turned out to be illegal and void. Mr Chotirmall later sold the property without the consent of the defendant. The defendant argued that despite the failure of the express trust, it was still the beneficiary of a constructive trust of the proceeds of sale. Yong Pung How CJ roundly rejected this argument, saying that if legislature does not permit the defendant’s claim ‘to bite on the property, neither can it bite on the proceeds. A proprietary claim premised on a constructive trust cannot… “lay dormant”: it either exists or it does not.’57 Given that the institutional constructive trust is based on a property law analysis, its application is stringent: it either exists, to the possible detriment of third parties, or it does not exist, to the possible detriment of the claimant. Ownership is a right good against the world; restitutionary defences like change of position cannot serve to undermine or transfer ownership. It is hard to see how, barring an overhaul of constructive trusts as a whole, any development of the doctrine can change the stringency of a property analysis and reap the benefits of flexibility that the remedial trust can. It is noted that the aforementioned defences of the remedial trust are heavily centred on the benefits of flexibility that arises from granting discretion to the court in determining the appropriate remedy. But several critics are wary of this judicial discretion. It is therefore to this issue that we now turn. B. Judicial Discretion and Legal Uncertainty Does the operation of judicial discretion in remedial trusts engender legal uncertainty? This seems the case, given that the courts can elect to impose a remedial trust as and when they see fit. This concern is especially worrying given that trusts are widely used in the commercial world, and any uncertainty might stifle commercial transactions. It is this fear of ‘palm-tree justice’ that caused Lord Neuberger to remark that ‘the remedial constructive trust represents an unnecessary weapon in the judiciary’s armoury, a book too many in equity’s library, and a discretion too many in a Chancery judge’s locker.’58 In fact, it could even be argued that recognising the remedial trust would bring the law of equity close to Lord Denning’s ‘new model’ of constructive trust (wherein a trust will arise ‘wherever justice and good conscience require it’),59 a model that has since been condemned for 56

(n 24).

53 Westdeutsche (n 3) 716.

ibid [26].

54 at19.

Lord Neuberger (n 45).

Lord Millett, ‘Equity: the road ahead’ (1995-1996) 6 KCLJ 1

55 Foskett v McKeown (n 9) 109.

59 Hussey v Palmer (n 3) 1290; Eves v Eves [1975] EWCA Civ 3, [1975] 1 WLR 1338, 1341-1342.

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giving the courts carte blanche.60 On further analysis, however, the problems caused by judicial discretion are more apparent than real. This conclusion is backed by three premises. First, allowing the remedial trust as an exercise of discretion is not equivalent to giving the judiciary a blanket discretion – any discretion granted to the courts in imposing remedial trusts will not be unfettered. This is especially in common law jurisdictions, where the courts are bound by precedent. It is far more likely that such discretion will be exercised in line with existing equitable principles, as per the remedial trust doctrine in Australia. In Muschinski v Dodds, the High Court of Australia upheld the existence of a remedial trust and rejected this criticism against discretion: The fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice… [T]he function of the constructive trust is not to render superfluous, but to reflect and enforce, the principles of the law of equity.61

It is possible that the real discomfort with judicial discretion specifically relates to judicial discretion in the redistribution of property rights, rather than judicial discretion as a concept. This will be discussed subsequently in the fourth issue.

In fact, Deane J explicitly rejected Lord Denning’s ‘new model’ on the basis that notions of ‘justice’ and ‘fairness’ were undefined and should give way to ‘the rule of ordered principle which is of the essence of any coherent system of rational law’.62 This is indeed the road taken by the Singapore courts in laying down ordered principles in cases like Ching Mun Fong63 and Anna Wee64. As discussed earlier, the Court of Appeal in the latter case was clear to eschew broad concepts in favour of defined legal rules, laying out the requisite elements for a remedial trust to be found. As long as Singapore continues to adopt such a measured approach, the remedial constructive trust and any accompanying judicial discretion cannot be said to be in opposition with legal certainty.

The third concern is that the judiciary might intervene with statute in imposing a remedial constructive trust. This is particularly in cases of insolvency, given that Parliament has already established its own insolvency scheme amongst creditors. By instead ruling that a debtor should prioritise a certain creditor over another, the remedial trust seems to be modifying the insolvency scheme contrary to statute, stepping into the shoes of Parliament. Indeed, this argument constitutes the main ratio decidendi of the English Court of Appeal in Re Polly Peck (No 2).67

Second, as mentioned earlier, discretion is by no means unique to the remedial trust. The courts have and will inevitably exercise discretion in developing and expanding institutional constructive trusts. The remedial trust will create no more uncertainty than the institutional constructive trust does. Third, equity is not a stranger to discretion. As noted 60 Grant v Edwards [1986] 2 All ER 426, [1986] Ch 638; Re Polly Peck (No 2) (n 3) 831; Muschinski v Dodds [1985] HCA 78, (1985) 160 CLR 583 [9].

by Etherton J in London Allied Holdings,65 proprietary estoppel also gives strong discretion to the courts to decide upon the appropriate form of relief, ‘including whether it should be personal or proprietary and whether it should be to protect the claimant’s expectations or compensate for reliance loss’. It was even suggested by Etherton J that the remedial trust doctrine can borrow from the equitable principles of proprietary estoppel in refining its scope: ‘namely a constructive trust by way of discretionary restitutionary relief, the right to which is a mere equity prior to judgment, but which will have priority over the intervening rights of third parties on established principles.’66 Should this suggestion be picked up, any judicial discretion will be defined in accordance to preexisting principles in equity. The remedial trust will by no means lead to legal uncertainty.

C. Usurping the Role of Legislature

With respect, this concern should not factor into Singapore jurisprudence. As acknowledged by Etherton J in London Allied Holdings,68 this is only confined to insolvency cases and does not preclude the existence of the doctrine in other areas of law. More importantly, even if Re Polly Peck (No 2) was not confined to insolvency cases, the concern is still a non-issue: by imposing a remedial trust, the courts are not acting contrary to nor modifying the statutory scheme; they are merely declaring which assets exist outside the statutory scheme. As is the case for the institutional constructive trust, the trust property of a remedial trust, being beneficially owned by the claimant, is not entitled to creditors and not subject to insolvency rules.

61 Muschinski v Dodds (n 60) [8].

(n 8) [274].

ibid [9].

ibid.

(n 6) [36]-[37].

(n 3).

(n 35) [182].

(n 8) [274].

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One might however have a problem with equating the institutional and remedial constructive trusts in this regard. It could be argued that there is a clear difference between the two: the court’s function in imposing an institutional constructive trust is merely to passively declare a trust which arises by operation of law, whereas its function in imposing a remedial trust involves an active decision on its part. But, as mentioned above, what makes one right and the other wrong? Perhaps guidance can be provided by Nourse LJ’s dicta in Re Polly Peck (No 2): ‘It is not that you need an Act of Parliament to prohibit a variation of proprietary rights. You need one to permit it…’69 The real issue here is therefore not about insolvency schemes, but the discomfort with judicial redistribution of property rights, which we will finally address. D. Judicial Redistribution of Property Rights It seems that the crux of the criticisms against the remedial trust lies in the uneasiness to grant the judiciary powers to redistribute property rights. Indeed, this is made out in case law. The Supreme Court of the United Kingdom in the recent case of Bailey v Angove’s Pty Limited recognised that ‘English law is generally averse to the discretionary adjustment of property rights’.70 This notion is similarly fleshed out by Lord Millett in Foskett v McKeown: ‘Property rights are determined by fixed rules and settled principles. They are not discretionary. They do not depend upon ideas of what is “fair, just and unreasonable”. Such concepts, which in reality mask decisions of legal policy, have no place in the law of property.’71 Yet what exactly is wrong with discretion in the law of property? Two concerns are apparent in case law, put neatly in London Allied Holdings: ‘In particular, [the remedial trust] has been regarded as offending settled principles of English property law and the need for certainty in commercial transactions.’72 Uncertainty has been addressed, with most of the issue canvassed and evaluated above under the general heading of judicial discretion. The real question is why discretion is even more frowned upon specifically in the law of property. This seems to be explained by the fact that ownership, at least in the United Kingdom and Singapore, is viewed as a right good against the world. As a result, property rights should be ‘fixed and ascertainable’.73 The consequence

of adopting this understanding of property on the constructive trust is evident from Yong Pung How CJ’s ruling in PP v Intra Group: ‘A proprietary claim premised on a constructive trust cannot… “lay dormant”: it either exists or it does not.’74 In other words, if a proprietary right exists, the courts have no choice but to declare it; conversely, if a proprietary right does not exist, there is nothing that the courts can do to change it. This is in line with the existing doctrine of the institutional constructive trust. Being an operation of law, such a trust arises automatically from the date of the circumstances that give rise to it, and the court’s only function is a passive declaratory one. In contrast, allowing the remedial trust—i.e. allowing the judiciary the discretion to create proprietary rights de novo—will allow the courts to actively vary and redistribute proprietary rights, running directly contrary to the orthodox conception of property. If the remedial trust exists, ownership cannot be said to be good against the world—at the very least, it cannot be good against the courts. But is there really a difference between institutional and remedial constructive trusts? It is submitted that the distinction drawn is in fact more apparent than real. First and foremost, it is unclear what ‘institutional’, as opposed to ‘remedial’, means. Peter Birks thought the term was inappropriate and unusable.75 It has also been argued extensively that in coining the dichotomy, Ronald Maudsley had in fact misinterpreted Roscoe Pound’s writings.76 But even Maudsley’s conception does not seem to provide an adequate explanation. Maudsley wrote: ‘Modern American legal thought thinks more of a constructive trust as a remedy, but admits that occasionally it can be an institution. English law has always thought of a constructive trust as an institution, a type of trust.’ But if ‘institution’ means ‘a type of trust’, there seems to be no good reason why a remedial trust (as understood in lex lata) does not fall within this category—clearly, it is a type of trust. Conversely, there seems to be no good reason why an institutional constructive trust (as understood in lex lata) cannot be understood as ‘remedial’. In fact, its remedial function has been recognised by the Australian courts in Muschinski v Dodd.77 Deane J reasoned that trusts in general developed as a remedial relationship superimposed upon common law rights by order of the Chancery Court. Whilst express and implied trusts are now identified by reference to intention, the constructive 74

(n 3) 830.

(n 20) [27].

(n 9) 127.

(n 8) [273].

73 Bailey v Angove’s (n 20) [28].

(n 24) [26].

75 Peter Birks, Can Sense Be Made of the Remedial Constructive Trust? (University of Western Australia Law School 1999). 76 Tang (n 23) [7]-[9]; Rotherham (n 52) 12; Michael Bryan, ‘Constructive Trusts: Understanding Remedialism’ in Jamie Glister and Pauline Ridge (eds), Fault Lines in Equity (Hart Publishing 2012) 218. 77

(n 60).

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trust ‘must still be found essentially in its remedial function which it has predominantly retained’.78 The learned judge concluded by characterising the constructive trust as a ‘remedial institution’—it is, in his opinion, both an institution and a remedy. Brushing terminology aside, the distinction could just be that an institutional constructive trust arises and exists by operation of law independently of a court order, whereas a remedial trust is an ad hoc exercise of discretion. But this is questionable. As argued by William Swadling, all constructive trusts ‘are nothing more than court orders’.79 In his view, the constructive trust is but a ‘fiction’ imposed by the courts so as to avail proprietary remedies to injured parties. This seems true on a closer analysis of the different classes of constructive trusts. If the institutional constructive trust was really about the vindication of property rights, then it must be shown that the claimant indeed had equitable ownership in the property—the court merely gives effect to this preexisting ownership right. In cases of unjust enrichment, such as mistaken payment, the claimant clearly intended, at least at the point of transfer, to pass both the legal and equitable ownership of the property to the defendant. It is clear in case law that a constructive trust only arises when there is unconscionability.80 So a constructive trust over a mistaken payment will only arise upon actual knowledge of the mistake.81 At the point that the trust arises, the claimant should, based on a hard-nosed property analysis, own an equitable interest in the property by operation of law. Yet how did the ‘fixed and ascertainable’ ownership in property transfer from the defendant to the claimant without any intent of the parties? Arguments that the claimant had retained equitable title upon the initial transfer or that the initial transfer had been conditional have been roundly rejected by the courts.82 It will be more doctrinally sound to view such a constructive trust as a court order, i.e. that the court recognises that full ownership had been transferred, but by virtue of subsequent unconscionability, it retrospectively orders the property to be held on trust. Similarly, in cases involving unauthorised profits from a fiduciary breach, such as bribes, it is clear that full ownership of the profits was intended to be transferred to the defendant. The defendant clearly intended to act

in breach (whether or not he/she was aware of the breach is a distinct issue), i.e. he/she clearly did not intend for the claimant to have equitable interest over the profits. It is the court which imputes to the defendant fiduciary an intention for any profits to be held on trust for the principal. It is an order of court that creates this trust, which would not have arisen otherwise. This is especially so if the profits have been used by the defendant to acquire a new proprietary right, such as ownership of a house83 or a car84. On a hard-nosed property analysis, it is difficult to rationalise how the claimant can assert a proprietary interest in a substitute property in which they previously had no interest. Borrowing the example of Andrew Burrows,85 if the claimant was entitled to trace from a pig to a horse to a car, it would be arbitrary to say that he/she has proprietary rights in the car merely because he/she owned a pig that is now represented by the car. If the claimant rightfully had equitable ownership over the money, should this proprietary right in the money not be strictly followed away from the defendant, rather than traced? By allowing the claimant to trace into substitute property, the courts are effectively redistributing proprietary rights by an order of court. There then seems to be no difference between tracing in equity and a remedial trust. The fact that constructive trusts are just remedial court orders clothed in a property law analysis is further evident when it comes to Binions v Evans contractual licences.86 There is never any intention of parties to create property rights in favour of the claimant since a contractual licence does not amount to a proprietary interest.87 The courts only impose a constructive trust when the defendant seeks to revoke the licence unconscionably. Unless this a unique case where the property right ‘lays dormant’ contrary to hard-nosed property law principles,88 it cannot be argued that such a trust is a vindication of such a right. Further, the courts only impose such a proprietary remedy (as opposed to a personal claim for damages) due to the special nature of land – the trust therefore arises due to policy reasons and not automatically due to a pre-existing property right. This is even clearer when it comes to constructive trusts in specifically-enforceable contracts.89 Such scenarios have been said to give rise to an unusual form of trust, 83 AG for Hong Kong v Reid [1993] UKPC 2, [1994] 1 AC 324. 84 London Allied Holdings (n 8).

ibid [6].

79 William Swadling, ‘The Fiction of the Constructive Trust’ (2011) 64(1) CLP 399, 432. 80 Westdeutsche (n 3) 705; Ching Mun Fong (n 6) [36]-[37]; Anna Wee (n 35) [182]. 81

ibid.

82 Westdeutsche (n 3) 706-708 (albeit in a case of resulting trust).

85 Andrew Burrows, The Law of Restitution (3rd edn, OUP 2011) 170. 86 Binions v Evans (n 48); Lyus v Prowsa Developments Ltd [1982] 1 WLR 1044; Ashburn Anstalt v W J Arnold & Co [1989] Ch 1. 87

Law of Property Act 1925, s 1.

88 PP v Intra Group (n 24) [26]. 89 Lysaght v Edwards (n 48); Englewood Properties Ltd v Patel [2005] 1 WLR 1961.

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given not only that there is no intention to create trust nor unconscionability amongst the parties, but also that the vendor trustee retains a substantial portion of the rights. Attempts to understand this trust in terms of property law have been convoluted.90 This article submits that this trust would be better understood as an equitable order of court, especially since its existence is premised on the availability of specific performance as a remedy in such contracts. Viewed in this context, such a constructive trust is much more doctrinally sound. Ultimately, the point of this category-by-category analysis is to show that all constructive trusts are remedial in nature. They are better understood as equitable orders of court and not based on hard-nosed property law. When this dichotomy between institutional and remedial constructive trusts is abandoned, it is clear that all constructive trusts involve judicial redistribution of property rights. Any discomfort with this discretion is therefore unfounded. Unless we throw the baby out with the bathwater and do away with the constructive trust, we have to acknowledge that hard-nosed property law should not form the understanding of this area of law.

Reflections on the Future of the Constructive Trust Once we recognise that all constructive trusts are remedial, the limitations of the constructive trust lex lata disappear. There seems to be no real reason why constructive trusts need to rigidly act in dichotomies: a trust may or may not bite; a trust may arise from the date of transfer or the date of the judgment; a trust may or may not take into account the interests of innocent third parties. All constructive trusts can then reap the benefit of flexibility enjoyed by the ‘remedial constructive trust’. Fears of uncertainty are still unfounded: constructive trusts will continue to be bound by precedent and principle. The only change is that the courts now have greater ability to shape nuanced remedies and foster protection of innocent third parties, akin to proprietary estoppel. This can only be a good thing.

that constructive trusts are remedial orders of court (‘the remedial class’); (2) trusts which fall into what Elias terms the ‘perfection’ aim. This includes express trusts that fail for want of formality, trusts in family homes and the Pallant v Morgan equity. These trusts give effect to the intentions of parties, which fail to create express trusts only because formality requirements are not met. These trusts should be understood as a subset of—or indeed, an exception to – the express trust (‘the intention class’). Trusts arising from specifically-enforceable contracts and imperfect gifts are worth singling out. The former can be dealt with summarily. As discussed above, such a trust arises only due to the availability of specific performance, and not because parties intended to create a trust. It should accordingly fall under the remedial class, despite Elias categorising it under the ‘perfection’ aim. On the other hand, an imperfect gift seems to prima facie fall into the intention class since the trust operates to give effect to the donor’s intention. However, the ‘intention’ that the intention class gives effect to should be an intention to create an express trust, not an intention to gift. The trust which arises should be seen more as a remedy of specific performance – compelling a gift which had earlier been promised. It should therefore fall under the remedial class. Of course, such a classification still does not assist in understanding why certain trusts exist (what Tang Hang Wu coins the ‘explanatory puzzle’)92 and in what areas new types of trusts should be recognised. Nonetheless, it is hoped that segregating the two classes of lex lata constructive trusts will aid in an understanding of constructive trusts as remedial orders of court.

Conclusion

90 Lysaght v Edwards (n 48); Englewood Properties Ltd v Patel (n 89) [40]-[58]; Scott v Southern Pacific Mortgages Ltd [2014] UKSC 52 [55]-[79], [104]-[114].

Going back to the question of the remedial constructive trust, it is clear that, unlike the English courts, the Singapore courts have not condemned the remedial trust. Instead, the courts have sought to define and delimit the applicability of the doctrine. This article contends that this is the right step, on the basis that the remedial trust was never meant to grant unfettered judicial discretion. Further, as discussed above, the key criticisms of the remedial trust are, upon further analysis, non-issues. But this author submits that the Singapore courts should go one step further. The understanding of constructive trusts should be reformed as a whole. To extend the analogy used by Mummery LJ in Re Polly Peck (No 2), all constructive trusts are judge-driven in the vehicle of discretion, but with clear rules as to how the vehicle is to be driven and which routes the vehicle may take. Only by recognising that constructive trusts

91 1990) 4.

At this juncture it is suggested that the lex lata categories of constructive trust should be redefined for greater clarity. Borrowing and adapting the classification of Gbolahan Elias,91 two broad classes exist: (1) trusts which fall into what Elias terms the ‘restitution’ and ‘reparation’ aims. This includes, for instance, cases of mistaken payment and cases of wrongdoing, most of which are outlined above. These trusts arise separately from parties’ intentions and fall neatly into the primary analysis

Gbolahan Elias, Explaining Constructive Trusts (Oxford

Tang (n 23) 152ff.

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are remedial orders of courts (and not based on hardnosed property law), can the law in this area reap the benefits of flexibility and simultaneously avoid doctrinal inconsistency. It is submitted that this is the best way forward to uphold the broad notions of ‘justice’ and ‘fairness’, and bring about a development of equity with much-needed coherence.

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‘Sweat of the Brow’ to the ‘Spark of Creativity’ Glenn Chua, University of Bristol It was held in the recent Singapore Court of Appeal judgment that the ‘creativity approach’ in ascertaining whether copyright subsists in a work is the ‘correct one’.1 The Court decided that preparatory work – i.e. ‘skill, labour and judgment’ exercised in sifting for relevant data – is not relevant in ascertaining whether a work is copyrightable. Rather, the relevant factor is whether the final work exhibits the ‘creativity’ or ‘intellectual effort’2 of the author. This marks a departure from the ‘sweat of the brow’ approach in Singapore. Notably, a shift in position can also be observed in the United Kingdom after the European Court of Justice’s (‘ECJ’) ruling in Infopaq.3 It is the intention of this article to highlight this shift in approach, in both the UK and Singapore. It will be submitted that this is a positive shift, because it brings both copyright regimes into greater coherence with the original purposes of copyright law. However, an inevitable consequence will be that some technical works – such as directories or other types of compilations – might not be copyrightable. This is of greater concern in Singapore than in the UK, because such technical works are protected by sui generis rights in the latter jurisdiction.4 In this light, it will be suggested that sui generis compilation rights – such as that conferred by the EU Database Directive5 – ought to be implemented in Singapore by the legislature. This article will first consider the orthodox ‘sweat of the brow’ approach taken in the UK. It will be noted that the approach has been superseded by the ‘intellectual creation’ approach post-Infopaq. Secondly, it will be highlighted that a similar shift could be observed in Singapore’s copyright regime in light of the Court of Appeal ruling in Global Yellow Pages (‘GYP’). Importantly, the judgment confirms a departure from the orthodox ‘sweat of the brow’ doctrine. Thirdly, it will be argued that this is a positive development for the copyright regime in both Singapore and the UK. Finally, as a segment of compilation works could potentially be left unprotected in Singapore, it is submitted that ‘sui generis’ rights – such as those recognised under EU Database Directive

– should be introduced in Singapore. This is to maintain the dissemination of such works.

UK Approach to ‘Originality’ For a work to be protected by copyright, it must be ‘original’ in the sense that the work must both – i) originate from the author, and ii) be a result of the author’s ‘skill, labour and judgment’. The former requirement was expounded upon in University of London Press,6 where it was decided that copyright could subsist in an examination paper. Notably, Peterson Justice commented that the Copyright Act ‘does not require that the expression must be in an original or novel form, but that the work must not be copied from another work’.7 Put differently, the UK copyright legislation is ‘not concerned with the originality of ideas, but with the expression of thought’.8 This was the orthodox position in subsequent case laws. The latter requirement – ‘skill, labour and judgment’ – was set out by the House of Lords in Ladbroke (Football) Ltd9 and has also been applied consistently in copyright cases ever since. In ascertaining whether copyright subsists in football pool coupons – which includes inter alia a compilation of forthcoming matches – Lord Reid explained that the exercise of ‘sufficient skill and judgment’ in compiling the list of matches ‘can be an important or even decisive element in deciding whether the work as a whole is protected by copyright.’10 This two-pronged approach was applied consistently in subsequent judgments until the ECJ’s ruling in Infopaq. For some academics, the orthodox ‘skill and labour’ approach was opined to be ‘under pressure’,11 or more specifically ‘replaced by the test of the author’s own intellectual creation, requiring the additional element of creativity’.12 The subject matters at issue in Infopaq, were a series of eleven-word extracts from various newspapers. The extracts were scanned and printed for 6 601.

University of London Press v University Tutorial [1916] 2 Ch

ibid 608.

1 Global Yellow Pages Ltd v Promedia Directories Pte Ltd and Another Matter [2017] SGCA 28 [24].

ibid 608.

Ladbroke Football Ltd v William Hill Ltd [1964] 1 All ER 465.

ibid 277.

ibid [24].

3 Infopaq International v Danske Dagblades Forening [2009] C- 05/08. Copyright, Designs and Patents Act 1988, s 3A.

11 Rahmatian Andreas, ‘Originality in UK Copyright Law: The Old “Skill and Labour” Doctrine Under Pressure’ (2013) 44 International Review of Intellectual Property and Competition Law 4, 4-34.

5 Directive 96/9/EC of The European Parliament and of The Council on The Legal Protection of Databases [1996] OJ L 77/20, art 7.

12 Liu Deming, ‘Of Originality: Originality in English Copyright Law: Past and Present’ (2014) 36 EIPR 6, 376-389.

LAW AND COMMERCE

the end purposes of providing ‘abstracts of newsfeed to their customers’.13 As was succinctly summarised by Fredenslund, one of the questions referred by the Danish Supreme Court to the ECJ was whether ‘acts of reproduction of 11 words of articles, reproductions that can be protected by the exclusive copyrights of the right holders’.14 The ECJ held that the extract was copyrightable, because ‘it is only through the choice, sequence and combination of those words that the author may express his creativity in an original manner and achieve a result that is an intellectual creation.’15 This approach is noticeably different from the ‘skill, labour and judgment’ approach in the UK. Specifically, the exercise of substantial ‘skill, labour and judgment’ is not paramount in ascertaining whether the ‘originality’ threshold is crossed. In other words, the quantity of effort does not per se lead to a finding the subsistence of copyright. Rather, there needs to be some ‘creativity’ involved that the final work must exhibit. For example, the author’s stamp of ‘personal touch’16 and the expression of his/her ‘free and creative choices’17 on the final work (in this case, a portrait photograph) was held by the ECJ in Painer, to pass the ‘originality’ threshold. Although uncertain as to how this shift would affect UK’s copyright jurisprudence, Justice Proudman acknowledged in Meltwater that Infopaq has in fact altered the orthodox ‘originality’ test. She opined that ‘the test for quality has been re-stated’ but that ‘the full implications of the decision have not yet been worked out’.18 In the same vein, Justice Lewison acknowledged in the more recent case of SAS Institute19 that the ‘intellectual creation’ test ‘may not be quite the same as the traditional test in English law’, and opined further that the former ‘has raised rather than lowered the hurdle to obtaining copyright protection’20

Singapore’s Approach to ‘Originality’ The shift in approach can also be observed in Singapore in both Asia Pacific Publishing Ltd (‘APP’) and the recent GYP ruling. Similar to the UK, the orthodox approach in Singapore before APP and GYP, was whether sufficient 13 Maria Fredenslund, ‘Denmark: Infopaq Case finally decided after eight-years’ (Kluwer Copyright Blog, 17 May 2013) <http://copyrightblog.kluweriplaw.com/2013/05/17/denmark-infopaq-case-finally-decided-after-eight-years> accessed 25 June 2018 14

ibid.

15 Infopaq International v Danske Dagblades Forening [2009] C-05/08 [45]. 16

Painer, [2010] C-145/10 para 99

ibid.

18 Newspaper Licensing Agency Ltd v Meltwater Holding BV [2010] EWHC 3099 (Ch) [81].

‘skill and labour’ was exercised in creating the work. In Auvi Pte Ltd, Chao Hick Tin J opined that in addition to the work originating from the author, he needs to ‘expend towards its creation a substantial amount of skill or labour’.21 Similarly, and as noted by Wei J in GYP, the Virtual Map case which predates APP and GYP ‘may … have expressed a view [as to what constitutes ‘originality’] that was in line with the sweat of the brow approach’.22 It was not long until the Court of Appeal ruling in APP. Specifically, APP was considered to have ‘foreshadowed a significant shift in Singapore copyright jurisprudence’23 to the ‘intellectual creation’ approach. Notably, VK Rajah JA was of the view that ‘it is the thought effort involved in creating the form of expression that is embraced by copyright’,24 rather than the ‘skill and labour’ that went into consolidating preparatory materials. In other words, the court is concerned about the final product which emanates from the thought process, when ascertaining the subsistence of copyright. Moreover, mere compilation of data that does not involve adequate ‘thought effort’ and notwithstanding the involvement of substantial labour – for example, the arrangement of facts and data in alphabetical order or more generally, according to industry standards – is unlikely to satisfy the originality requirement post-GYP. This shift was affirmed in the recent ruling in GYP. Here, the court had to consider inter alia if copyright subsists in – GYP’s directories ‘in whole’ or ‘in part’, and the ‘seeds’ contained within the directory. In relation to the former, it was decided that copyright only subsists in GYP’s directories ‘as a whole’ and not ‘in part’. As opined by Wei J in the High Court, adequate creative choices were made in the ‘selection and arrangement of the various classifications and listings within each of the Yellow Pages directories as a whole’,25 to satisfy the ‘intellectual creation’ threshold. On the other hand, no copyright was held to subsist in the individual parts of the directory. This was because ‘any intellectual effort’ expended, in relation to those individual parts, ‘was directed at the discovery of fact’.26 In other words, the effort was not directed ‘upon the selection and arrangement of the listings within the classification’.27 At this juncture, it is clear once again 21

Auvi Pte Ltd v Seah Siew Tee [1991] 2 SLR (R) 786 [32]-[33].

22 Global Yellow Pages Ltd v Promedia Directories Pte Ltd [2016] 2 SLR 165 [174]. 23 David Tan and Stanley Lai Tze Chang SC, ‘19. Intellectual Property Law’ [2016] 17 SAL Ann Rev, para 19.23. 24 Asia Pacific Publishing Pte Ltd v Pioneers & Leaders (Publishers) Pte Ltd [2011] 4 SLR 381 [37]. 25

Global Yellow Pages (n 23) [251].

SAS Institute v World Programming [2013] EWCA Civ 1482.

ibid [227].

ibid [36]-[37].

ibid [227].

LAW AND COMMERCE

that the court is concerned largely about the ‘cognitive’ effort that was directed to creating, and as expressed in the work. Additionally, the High Court considered whether the ‘seeds’ – fictitious listings ‘planted’ in the directory for the purposes of identifying unauthorised copying – qualify for copyright protection. Broadly speaking, those fictitious listings might be considered as literary works if the Infopaq test were to be applied without qualification. In this case, although Wei J did not foreclose the possibility of copyright subsistence in short phrases – where he endorsed the ascertainment as ‘a matter of judgment’ by reference to the degree of ‘intellectual input and content’28 – it was decided that there was ‘insufficient skill’ involved in ‘devising the individual seeds to qualify them for copyright protection’.29 Menon CJ, in the Court of Appeal, concurred with Wei J that ‘the creation of a fictitious name and telephone number falls well short of the requisite standard of creativity’.30 This is notwithstanding the High Court’s finding that ‘some effort was expended’31 in deriving the seeds.

Implications of the Shift in UK and Singapore As elucidated in foregoing sections, a paradigmatic shift in approach in both the UK and Singapore can be observed. Broadly, there is a shift from a largely ‘quantitative’ (skill, labour and judgment) to a more ‘qualitative’ (intellectual creation/creativity) assessment of the work. Also, the focus of the assessment has arguably been shifted to the final work per se, and away from the efforts directed to preparatory work. i)

United Kingdom

For UK’s copyright regime, the implications could be observed in Meltwater where the court had to ascertain inter alia the subsistence of copyright in newspaper headlines. Proudman J decided in the High Court that ‘headlines are capable of being literary works, whether independently or as part of the articles to which they relate’.32 In this instance, some of the headlines considered by the court ‘are certainly independent works within the Infopaq test.’33 On appeal, the High Court’s ruling was upheld, where Sir Andrew Morritt considered the former’s decision to be ‘unassailable’.34

Global Yellow Pages (n 23) [299].

ibid [303].

ibid [52].

ibid [302].

32 National Licensing Agency v Meltwater Holding BV [2010] EWHC 3099 (Ch) [71].

Juxtaposing Meltwater with the earlier case of Francis Day & Hunter Ltd, an apparent inconsistency would come to light. It was decided in Francis Day that a 9-worded song title – ‘The Man Who Broke the Bank at Monte Carlo’ – ‘is not sufficiently substantial to justify a claim to protection’35 [emphasis added] as a literary work. Francis Day might however be decided differently today, following the case of Infopaq and Meltwater. Whilst the Court was very much concerned about ‘substantiality’ – i.e. arguably a largely quantitative assessment – in Francis Day, the focus in Meltwater was on the ‘intellectual effort’ directed to deriving the headline. Indeed, copyright was held to subsist in the headlines in Meltwater because they ‘involve considerable skill in devising’.36 In this light, one could argue that the headline would be devoid of copyright protection but for Infopaq, for it would certainly fall within the reign of Francis Day. Rosati, in considering the implications of Infopaq, commented that the new approach could result in a ‘change in scope and meaning of protected subject matter … and will certainly affect low-creativity and technical subject matter’.37 The Francis Day-Meltwater juxtaposition could be one such example, as to how the ‘scope and meaning’ of protected subject matter would change. ii)

Singapore

The implications of such a shift on Singapore’s copyright regime is however less evident, for the shift in approach was confirmed only recently. Moreover. GYP’s judgment has not yet been considered or refined by the judiciary in later cases. Nonetheless, the judgments in APP and GYP do provide some guidance as to the ‘intellectual creation’ approach. Moreover, it is arguable that the implications are likely to mirror that of the UK, where ‘low creativity and technical’38 works might not qualify for copyright protection now. In APP, VK Rajah JA cited the ‘four key principles discerningly summarised’39 in the seminal case of Feist with approval, when ascertaining the subsistence of copyright. In particular, he said that the ‘… issue of whether copyright subsists … rest primarily on the fourth principle – the existence of a minimum degree of creativity independently exercised by the author’.40 This entails that ‘sweat of the brow’ per se might not suffice, as is the case in the UK. It follows that both Auvi Pte Ltd and Virtual Maps may cease to be authoritative. Indeed, 35 Francis Day and Hunter, Limited v Twentieth Century Fox Corporation, Limited [1940] AC 112, 116. 36 [70].

National Licensing Agency v Meltwater Holding BV (n 33)

37 Eleonora Rosati, ‘Originality in a Work, or a Work of Originality: The Effects of the Infopaq Decision’ (2011) 33 EIPR 12, 752 38

ibid.

39 Asia Pacific Publishing Pte Ltd v Pioneers & Leaders (Publishers) Pte Ltd (n 25) [38]

ibid [22].

ibid [39].

LAW AND COMMERCE

Sundaresh Menon CJ acknowledged in GYP, that APP has changed the approach in ascertaining originality, and even considered Virtual Maps to be ‘incorrect insofar as it adopted the “sweat of the brow approach”.’41 iii)

A Positive Shift in Approach?

It is submitted that the shift in approach is a positive one and is laudable, for it better aligns both copyright regimes with the original purposes of copyright law. Moreover, it averts the issue of ‘copyright over-protection’ as Justice Laddie flagged in his seminal piece. As elucidated in the earlier sections, the orthodox approach to ‘originality’ has inched towards protecting one’s labour. It is however questionable if the protection of one’s labour is the primary objective of copyright law from the outset. As argued by Liu, ‘it is debateable whether the sole foundation of English law is to reward labour’.42 This is especially so, if one were to consider that the purpose of Statute of Anne 1710 – arguably the foundation of English copyright law – was to ‘encourage learned man to compose and write useful books’.43 In other words, copyright law was meant to encourage ‘creative endeavours’. The fruits of such endeavours, as expressed in the final work, is then arguably what copyright ought to recognise and protect. On the contrary, the orthodox ‘skill, labour and judgment’ or ‘sweat of the brow’ approach in both Singapore and the UK is based largely upon Lockean’s ‘Labour Theory’. In particular, it recognises the ‘expenditure of labour’ as the central focus in ascertaining copyright subsistence.44 As pointed out by Rahmatian, the justification of copyright protection in the U.K, is the ‘prevention of a shortcut and of a free ride on a competitor’s effort and investment.’45 Similarly, Sundaresh Menon J in the Singapore Court of Appeal ruling of GYP seem to consider that the key difference between the ‘skill and labour’ and ‘intellectual creation’ approach is one of focus. The former approach ‘considers the author’s labour and industry to be relevant, and admits consideration of the effort taken in the preparatory steps leading to the reduction of the work to its form.’46 On the other hand, the latter approach focuses ‘on the end-product of the work, and considers efforts applied towards the formulation of how

that end product will be expressed’. 47 Arguably, and as elucidated earlier, the latter is what copyright recognises and protects from the outset. Also, this notion of what copyright ought to recognise and protect was fortified in the GYP ruling. In acknowledging the possibility of technical compilations being devoid of copyright protection – specifically, the opening the floodgates to the ‘commercially immoral’ conduct of free-riding – the Singapore Court of Appeal in GYP held that this is ‘simply not within the purview of copyright law’.48 In other words, the court recognises that copyright law does not protect one’s ‘investment or labour’ by guarding against free-riding of the work. Rather, copyright seeks to protect the author’s ‘intellectual creation’ and more particularly, recognises the ‘authorial creation that is causally connected with the engagement of the human intellect’.49 Moreover, the shift in approach mitigates the problem of overprotection. The upshot of the orthodox ‘skill and labour’ approach is that seemingly trivial works could be subject to copyright protection, insofar as some labour – and satisfying the requisite threshold that is arguably low – was exerted in their creation. This is because, as elucidated earlier, central to the Lockean approach to copyright is the protection of one’s labour and investment. Perhaps, this is best illumed by the poignant case of Walter v Lane and more recently, Elanco v Mandops. In Walter v Lane, copyright protection was granted to verbatim account of a speech. Notably, the judgment was informed by the construction of copyright law, as not permitting ‘… one man to make profit and to appropriate to himself the labour, skill, and capital of another’.50 Similarly, in Elanco v Mandops, copyright protection was granted to a label affixed to a herbicide can. This is notwithstanding that the label contained mostly common place information, which exhibits very minimal creativity by the author. The rationale of granting protection in Elanco was rather similar to that in Walter v Lane. In particular, Buckley J opined that the defendants ‘could not make use of the plaintiff’s skill and judgment to save themselves the trouble and cost of assembling and selecting literature.’51 [Emphasis added] Justice Laddie, writing extra-judicially, commented that Elanco highlights one of the troubles of copyright law.

Global Yellow Pages (n 23) [26].

Liu (n 13) 386.

ibid [23].

Statute of Anne 1710.

ibid [34].

44 Locke J, ‘The Second Treatise of Government’ in Laslett P (ed), Two Treatises of Government (2nd edn, CUP 1967).

ibid.

Andreas (n 12) 4-34.

Walter v Lane [1900] AC 539, 545.

Global Yellow Pages (n 23) [23].

51 Elanco Products Limited and Another v Mandops (Agrochemical Specialists) Limited [1979] FSR 46, 48.

LAW AND COMMERCE

That is, ‘it springs up to protect nearly every creation of the human mind, be it ever so trivial’.52 With the ‘intellectual creation’ approach, protection is limited to works that illumes the author’s personal touch. Protection does not then extend to works where the author has exercised limited intellectual effort to sift and arrange data in a common place manner. In short, the focus when ascertaining copyright subsistence, will be redirected away from ‘expenditure of labour’ by the creator, and towards the application of ‘intellectual creation or creativity’ towards the authorial creation. It follows that the subject matters considered in Walter and Elanco are unlikely to be protected by copyright under the new approach. iv)

Introduction of Sui Generis Rights in Singapore

One of the main implications of such a shift is that some compilations could be devoid of copyright protection. This is especially so for compilations where substantial labour and effort were directed to gathering data, but nonetheless exhibit very limited creativity in its expression. This could include directories or football fixtures, where data could be arranged in alphabetical order or are categorised based on business type. As discussed above, the Singapore Court of Appeal acknowledged that the recognition of one’s ‘labour or investment’ in painstakingly gathering relevant facts or data is ‘simply not within the purview of copyright law’. Considering the limited reach of copyright law, individuals in the business of producing such works could be dis-incentivised to invest in their production. This is in the knowledge that its competitors could utilise its works to derive commercial advantage with impunity. As succinctly put forth by Tan, the ramifications of the ‘intellectual creation’ approach ‘is that it fails to recognise that the commercial value and social importance of such works lie not so much in the selection and arrangement of their contents as in their comprehensiveness and accuracy.’53 Although the above observation is applicable to copyright regimes in both the UK and Singapore, its ramifications are arguably less far-reaching in the UK. Specifically, the recognition of sui generis database rights – as conferred by the EU Database Directive54 – in the UK, ensures that at least some rights are granted to its creator. As laid down in Recital 39 of the Directive, the purposes of recognising sui generis rights in addition 52 Laddie J, ‘Copyright: Over-strength, Over-regulated, Over-rated?’ (1996) 18 EIPR 5, 257. 53 Tan Tee Jim SC, ‘New Law For Compilations and Databases in Singapore?’ [2012] SAcLJ 745, para 84. 54 Directive 96/9/EC of The European Parliament and of The Council on The Legal Protection of Databases [1996] OJ L 77/20.

to copyright, is to ‘safeguard the position of makers of databases against misappropriation of the results of the financial and professional investment made in collection [of] contents by protecting the whole or substantial parts of a database against certain acts by a user or a competitor’.55 Importantly, the sui generis rights were introduced upon the EC’s recognition that ‘copyright alone’ under the intellectual creation approach (as recognised in most EU Member States) ‘could not afford adequate protection’.56 In light of the shift to the ‘intellectual creation’ approach in Singapore, there is now an even greater impetus to introduce and recognise sui generis rights. Although the proposal to introduce such rights was once considered by the legislature, it was nonetheless rejected. Notably, Professor S Jayakumar (who was Minister of Law then) commented that the introduction of sui generis rights might not be necessary, given that ‘databases and compilations as of now already enjoy protection under the existing [Copyright] Act.’57 This view might hold water under the orthodox ‘skill, labour and judgment’ approach, which ‘admits consideration of the effort taken in the preparatory steps leading to the reduction of the work to its form’. However, as discussed at length above, the ‘intellectual creation’ approach does not seem to recognise such efforts. Indeed, the shift in approach would leave a ‘gaping hole’ in protecting the substantial effort that have gone towards creating the compilation. Moreover, it ‘would amount to a serious failing in our law’.58

Conclusion Overall, the orthodox ‘skill and labour’ approach is arguably overtaken by the ‘intellectual creation’ approach. This is observable in both UK and Singapore, and is a positive shift for it realigns both copyright regimes with the core purposes of copyright law. Perhaps, the time has now come for the Singapore Parliament to reconsider the introduction of sui generis database rights, such as the EU Database Directive, to fill the lacuna caused by a shift to the ‘intellectual creation’ approach.

ibid art 39.

Tan (n 54) para 91.

57 S. Jayakumar, Singapore Parliamentary Debates, Official Report (19 February 1998) vol 68 cols 321–322. 58

Tan (n 54) para 131.

WHERE BRIGHT MINDS MEET

YOUR FIRST JOB CAN SHAPE YOUR EXPERIENCE AND THE RANGE OF OPTIONS THAT YOU HAVE FOR THE REST OF YOUR CAREER Once you’ve read about our firms and what we can offer you, we encourage you to talk with us directly, get to know our people and decide on whether working with us is the right choice for you.

SUMMER INTERNSHIP

Clifford Chance in conjunction with Cavenagh Law LLP offers an annual summer internship scheme which allows you to spend four weeks working with us in Singapore and getting to know more about our people and our business.

THIS COULD BE YOUR YEAR

In 2019, we will offer two summer internship intakes for a period of four weeks over June and July. For each internship there are eight places for students who are Singapore nationals (including those who hold permanent residence status in Singapore) studying a primary law degree in Singapore or abroad. Numbers are small so that interns can get the best experience possible from this bespoke programme. We are specifically seeking students who are interested in embarking on their practice training contract with Cavenagh Law LLP upon graduation. Applicants should be in their second year of study at the time of application. We are looking for intelligent and articulate applicants, who are capable of contributing and communicating their own ideas and opinions. We need enthusiastic people who enjoy getting to know clients and colleagues and who understand that working at the forefront of global legal services often requires hard work, applied intellect and a collaborative approach to working in a team. We are looking for people who display the drive and commitment to meet the high standards expected of all of our team. Applicants should also possess outstanding academic abilities. The overriding purpose of our programme is to give interns a sense of what life is like in a cutting edge law firm. You will have the opportunity to: • Experience work in two of our practice groups (interns will be able to state a preference for practice groups and these will be accommodated where possible). •

Work with buddies during the internship and build relationships.

• Undertake transactional work alongside our lawyers and partners, and attend/observe meetings and calls where appropriate. • Learn about the business side of law and the opportunities available to you in sessions from our partners and business services leaders. •

Present a ten minute pitch at the end of the programme with advice and guidance from our team.

•

Network with trainees in Singapore and trainees seconded from London.

•

Attend regular legal education & training sessions.

•

Participate in various community initiatives.

In addition to the above you will be provided an allowance of SG$1800 for the period of the internship. DATES OF INTERNSHIP Intake 1: Monday 27 May, 2019 - Friday 21 June, 2019 Intake 2: Monday 1 July, 2019 - Friday 26 July, 2019

PROCESS OF SELECTION Applications for the 2019 scheme will open early December 2018 and close 15 February 2019. Applications must be submitted, and will only be accepted, via the firm’s online job portal. Positions will be finalised by end March 2019. For all enquiries regarding Graduate Recruitment please contact Yim Jing Xiu at Recruitment.Singapore@CliffordChance.com © Clifford Chance, 2018 Clifford Chance Pte Ltd and Cavenagh Law LLP Clifford Chance Pte Ltd, Marina Bay Financial Centre, 25th Floor, Tower 3 12 Marina Boulevard, Singapore

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LAW AND SOCIETY

Legalising Love: A Study of Same-Sex Relationships in the United Kingdom, the United States of America and Singapore Chng Jieying, University of Warwick

Constitutionally, Singapore is fundamentally different from the United Kingdom (“UK”) and the United States of America (“USA”). The process of making law in each constitution is therefore distinct from one another. I will discuss how same-sex relationships were legalised in the UK and the USA and the problems they faced or are facing. I will then consider the approach on how samesex relationships would be legalised in Singapore.

UK and the ECHR The UK signed the European Convention of Human Rights (“ECHR”) in 1951. From 1966, individuals could take a case to the European Court of Human Rights (“ECtHR”), but only after appeal to the House of Lords (now the Supreme Court) had failed. The Human Rights Act (“HRA”) 1998 came into force in October 2000 and then became a significant part of the UK unwritten constitution. It was to incorporate the rights contained in the ECHR into UK law, and it makes a remedy for breach of a Convention right available in UK courts, without the need to go to the ECtHR in Strasbourg. Individuals, however, retain the right to sue in the Strasbourg court. Section 3 of the HRA 1998 requires courts to interpret both primary and subordinate legislation in a way which is compatible with the Convention rights so far as it is possible to do so.1 It applies to primary and subordinate legislation whenever enacted,2 which means that the Act is valid both retrospectively and prospectively, therefore preventing the Act from being impliedly repealed. If it is not possible to so interpret, the courts may issue a declaration of incompatibility under section 4.3 The UK recognises the doctrine of parliamentary sovereignty which makes the Parliament the supreme legal authority in the UK. The legislature is above the courts, and the courts therefore cannot declare legislation invalid. A declaration of incompatibility under section 4 neither invalidates the existing legislation nor binds the parties to the proceedings in which it is made.4 It is merely a flag that alerts the Parliament that people’s

Human Rights Act 1998, s 3(1).

ibid, s 3(2)(a).

ibid, s 4(2).

ibid, s 4(6).

human rights are being infringed.

Civil Partnership Act 2004 The Civil Partnership Act 2004 (“2004 Act”) was passed by the Westminster Parliament in November 2004, and it came into effect in December 2005. Same-sex couples can then register a civil partnership which has almost the same legal effects, rights and obligations as marriage does for opposite-sex couples.5 Key differences include the inability to perform a religious ceremony and that adultery could not relied on as a ground for dissolution.6 With the enactment of the Marriage (Same Sex Couples) Act 2013, same-sex couples are also allowed to get married. Therefore, same-sex couples could choose between a marriage and a civil partnership.

Steinfeld and Keidan v Secretary of State for Education7 However, opposite-sex couples could only formalise their relationship with marriage. Steinfeld and Keidan was a significant case in the UK where Rebecca Steinfeld and Charles Keidan appealed to allow oppositesex couples to form civil partnerships. Steinfeld and Keidan are a young couple in a committed long-term relationship who wish to formalise their relationship. In particular, neither do they deem the historically patriarchal nature of marriage to reflect the way in which they understand their commitment to each other nor wish their relationship to be seen in that light.8 Instead, they consider that the status of civil partnership would better reflect their values and give due recognition to the equal nature of their relationship.

5 The United Kingdom Government, ‘Comparison of Civil Partnership and marriage for same sex couples’, GOV.UK (10 December 2013) <https://www.gov.uk/government/publications/comparison-of-civil-partnership-and-marriage-for-same-sex-couples> accessed 2 July 2018. 6 I would like to highlight that adultery is also not a ground for divorce between same-sex couples unless the act was with someone of the opposite sex. Adultery is defined as sexual intercourse with someone of the opposite sex outside of marriage. 7

[2017] EWCA Civ 81.

8 A. R. ‘What is a civil partnership?’ The Economist (2 July 2018) <https://www.economist.com/the-economist-explains/2018/07/02/ what-is-a-civil-partnership> accessed 15 July 2018.

LAW AND SOCIETY

Steinfeld and Keidan relied on Article 14 (prohibition of discrimination) taken with Article 8 (right to respect for private and family life) of the ECHR. All three Court of Appeal judges agreed that the ban constitutes a potential violation of the appellants’ human rights. Briggs and Beatson LLJ concluded that the Government’s policy of ‘wait and see’ justified the different treatment of opposite-sex and same-sex couples while Arden LJ thought that the justification was not sufficient. Nevertheless, all three judges also agreed that there should not be a declaration of incompatibility and such an important social issue should be left to the Parliament to address. It was therefore the unanimous view of the Court, albeit with different reasons, that the appeal should be dismissed. The UK Supreme Court granted the appellants permission to hear the case on 14 May 2018. Before the hearing, Steinfeld and Keidan’s legal team was optimistic that the judges appointed will acknowledge the discrimination of the 2004 Act now that same-sex couples may also marry. They hoped that the UK Supreme Court would declare its incompatibility with the ECHR, and thereby strongly encourage the Government to end the difference in treatment by opening civil partnerships to opposite and same-sex couples alike.9 They were not wrong. On 27 June 2018, Lord Kerr delivered the unanimous judgment. The UK Supreme Court allowed the appeal and made a declaration that the 2004 Act, in particular sections 1 and 3, was incompatible with Article 14 taken in conjunction with Article 8 of the ECHR.10 It is worthy to note that Tim Loughton’s Civil Partnerships, Marriages and Deaths (Registration Etc.) Bill had received its second reading in the House of Commons on 2 February 2018. One of the main purposes of the bill is to legalise civil partnership between opposite-sex couples. The Bill has now been committed to a Public Bill Committee even though the meeting date has yet to be announced.11 Even though the UK Supreme Court has declared incompatibility, the civil partnership law has not changed. The Parliament will, however, be alerted that people’s human rights are indeed being infringed by the 2004 Act. It will potentially hasten the decision-making process to open civil partnerships to both opposite and 9 ‘The Legal Challenge’ (Equal Civil Partnerships) <http:// equalcivilpartnerships.org.uk/legal-challenge/> accessed 15 July 2018. 10 Steinfeld and Keidan v Secretary of State for International Development [2018] UKSC 32. 11 ‘Civil Partnerships, Marriages and Deaths (Registration Etc.) Bill 2017-19’ www.parliament.uk <https://services.parliament. uk/bills/2017-19/civilpartnershipsmarriagesanddeathsregistrationetc. html> accessed 15 July 2018.

same-sex couples. It may also trigger a further debate on the relevance of marriage and the Matrimonial Causes Act 1973 in today’s world. As Herring et al questioned,12 should we move to universal civil partnership? Should we still retain civil partnerships for same-sex couples since they now may marry?13 Should we extend civil partnerships to opposite-sex couples as Steinfeld and Keidan has suggested?14 Or should we replace marriage entirely with universal civil partnerships? The ultimate decision for a radical change lies in the hands of the UK Parliament as the doctrine of parliamentary sovereignty continues to reign.

Obergefell v Hodges15 in the USA In contrast, the USA has a much liberal approach. In Obergefell v Hodges, the US Supreme Court ruled that the fundamental right to marry is guaranteed to samesex couples by both the Due Process Clause and the Equal Protection Clause of the Fourteenth Amendment to the US Constitution. By a majority, Obergefell explicitly overruled Baker v Nelson16 and required all states to issue marriage licenses to same-sex couples and to recognise same-sex marriages validly performed in other jurisdictions, thereby establishing same-sex marriage throughout the United States and its territories. Obergefell was a consolidation of six lower-court cases from different states. Claimants of the lower-court cases included sixteen same-sex couples and seven of their children. All six federal distinct court rulings found for the same-sex couples and other claimants. However, six decisions of the four federal district courts were appealed to the US Court of Appeals for the Sixth Circuit. On 6 November 2014, the Six Circuit ruled that Ohio’s ban on same-sex marriage did not violate the US Constitution as it was bound by the US Supreme Court’s action in Baker, which dismissed a same-sex couple’s marriage claim.17 Judge Jeffrey Sutton wrote the Sixth Circuit’s majority opinion upholding same-sex marriage bans, causing the circuit split18 that helped trigger Supreme Court review. Judge Sutton also dismissed the arguments made on behalf of the same-sex couples in 12 Jonathan Herring, Rebecca Probert, and Stephen Gilmore, Great Debates in Family Law (2nd edn, Palgrave 2015). 13 In Scandinavia, civil partnership has since been replaced by same-sex marriages. 14 France is an example where civil partnership has been extended to opposite-sex couples. 15

135 S. Ct. 2584 (2015).

291 Minn. 310, 191 N.W.2d 185 (1971).

DeBoer v Snyder, 772 F.3d 388 (6th Cir. 2014).

18 A circuit split occurs when two or more different federal circuit court of appeals provide conflicting rulings on the same legal issue. The existence of a circuit split is one of the factors that the US Supreme Court considers when deciding whether to grant review of a case.

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this case as he thought that none of the theories made the case for constitutionalising the definition of marriage and for removing the issue from the hands of state voters. The dissenting Judge Daughtrey, however, speculated the possibility that the majority had purposefully taken the contrary position to create the circuit split to prompt the US Supreme Court to grant review of the case and end the uncertainty of status and the discrepancy in state laws. Eventually, the claimants did file petitions for writs of certiorari with the US Supreme Court. There were two questions before the US Supreme Court, namely: 1 Does the Fourteenth Amendment require a state to license a marriage between two people of the same sex? 2 Does the Fourteenth Amendment require a state to recognise a marriage between two people of the same sex that was legally licensed and performed in another state? Justice Anthony M. Kennedy delivered the affirmative opinion for the majority. The US Supreme Court held that the right to marry applies to same-sex couples in the same manner as it does to opposite-sex couples based on the Due Process Clause of the Fourteenth Amendment. As there are no differences between a same-sex marriage and an opposite-sex marriage with respect to the concept of individual autonomy, the same-sex marriage ban violated the Due Process Clause of the Fourteenth Amendment. In addition, the Equal Protection Clause of the said Amendment guarantees the right of same-sex couples to marry as the denial of that right would deny them equal protection under the law. Judge Kennedy suggested that the US Constitution protects the fundamental right of same-sex couples to marry through the interrelated principles of liberty and equality. Attorney John Bursch who defended four states’ bans on gay marriage before the US Supreme Court argued that it was not about the definition of marriage but rather about who gets to decide the question.19 It seemed clear that his argument was in line with the view of the dissenting judges.

Chief Justice Roberts therefore suggested that it was beyond the US Supreme Court to decide whether states have to recognise or license such unions. He seemed to concur with Judge Sutton in the US Court of Appeals for the Sixth Circuit that the issue should be decided by individual state legislatures based on the will of their voters. Although the US Constitution and judicial precedent clearly protect a right to marry and require states to apply laws regarding marriage equally, the US Supreme Court cannot engage in judicial policymaking and make a state alter its definition of marriage without precedential support. The other three dissenting judges, Justice Antonin Scalia, Justice Clarence Thomas, and Justice Samuel A. Alito, Jr., also believed that a political change should only occur through the votes of elected representatives and should not be decided by unelected judges.

Was it really a landmark civil rights case? While many celebrates the liberal decision of the landmark civil rights case, it remains problematic for two reasons. Firstly, the US Constitution works very differently from the unwritten one in the UK. The doctrine of parliamentary sovereignty does not apply in countries with written and entrenched constitutions, and the US is a key example. As such, the US Supreme Court may disapply or strike down legislation passed by the Congress,20 but by creating a new right, the majority opinion in Obergefell dangerously strayed away from that democratic process.21 Secondly, the USA recognises the separation of powers. Three branches are created in the US Constitution.22 The Legislative, composed of the House and Senate, is set up in Article 1. The Executive, composed of the President, Vice-President, and the Departments, is set up in Article 2. The Judicial, composed of the federal courts and the Supreme Court, is set up in Article 3. Each of these branches has certain powers, and each of these powers is checked by another branch. As such, the US Supreme Court can rule a law to be unconstitutional, but the Congress, with the States, can amend the US Constitution. The majority opinion in Obergefell also greatly expanded the power of the judiciary beyond what the US Constitution allows.23

Chief Justice John G. Roberts, Jr. was one of the four (minority) dissenting judges. He argued that even though it might be a good and fair policy to adopt, the US Constitution did not address same-sex marriage.

20 Dawn Oliver, ‘Parliamentary Sovereignty in Comparative Perspective’ UK Constitutional Law (2 April 2013) <https://ukconstitutionallaw.org/2013/04/02/dawn-oliver-parliamentary-sovereignty-in-comparative-perspective/> accessed 15 July 2018.

19 Ariane de Vogue and Jeremy Diamond, ‘Supreme Court rules in favor of same-sex marriage nationwide’ CNN (Washington, 27 June 2015) <https://edition.cnn.com/2015/06/26/politics/supremecourt-same-sex-marriage-ruling/index.html> accessed 15 July 2018.

22 ‘The Constitution of the United States’ <http://constitutionus.com/> accessed 15 July 2018.

21 ‘Obergefell v Hodges’ Oyez (2014) <https://www.oyez.org/ cases/2014/14-556> accessed 15 July 2018.

(n 21).

LAW AND SOCIETY Singapore’s Community

Attitudes

towards

the

LGBT

The text of the Constitution of the Republic of Singapore is one of the legally binding sources of constitutional law in Singapore, and the others being judicial interpretations of the Constitution, and certain other statutes. Article 4 of the Constitution expressly declares that it is the supreme law of the land, and in this regard, it is closely similar to that of the US Constitution. However, in practice, it may not be supreme as the Singapore legal system is de facto characterised by parliamentary sovereignty, which in this case is similar to that of the UK unwritten constitution. Despite the visibly strong English influence on Singapore’s governmental system, Singapore’s take on the separation of powers is greatly informed by its unique values and legal culture. Singapore exercises a partial separation of powers, where the legislature and executive powers are not separate or independent. The Executive through the Parliament takes the lead and legislates on behalf of the population.24 When considering the ‘appropriateness of judges’ views overriding properly-passed laws’ and whether ‘a political or judicial solution is better to address’ Singapore’s LGBT issues in view of the legalisation of same-sex marriage in the US, Prime Minister Lee Hsien Loong (“PM Lee”) rejected the application of the US legal system in Singapore.25 PM Lee does not think Singapore is ready for same-sex marriage.26 Despite the gradual change in social attitudes, the society is still largely conservative.27 In addition to his 2007 speech in Parliament, PM Lee maintains his stance on Section 377A of the Penal Code, the main remaining piece of legislation which criminalises sex between mutually consenting adult men.28 Singapore’s outright position that same-sex relationships are not recognisable is also visible in the courts. On 29 October 2014, the Singapore Supreme Court upheld the Singapore’s ban on same-sex relations between consenting adult men. The Supreme Court held that Section 377A does not violate Articles 9 and 12 of the Singapore Constitution, which guarantee the right to life and personal liberty, and provide that all people are entitled to equal protection before the law. The joint 24

ibid.

26 Wong Siew Ying, ‘Singapore not ready for same-sex marriage as society is still conservative: PM Lee’ The Straits Times (Singapore, 5 June 2015) <https://www.straitstimes.com/singapore/ singapore-not-ready-for-same-sex-marriage-as-society-is-still-conservative-pm-lee> accessed 15 July 2018. 27

ibid.

28 ‘PM Lee discusses gay rights and succession planning on BBC’s HARDTalk’ Channel News Asia (Singapore, 1 March 2017) <https://www.channelnewsasia.com/news/singapore/pm-lee-discusses-gay-rights-and-succession-planning-on-bbc-s-har-8751864> accessed 15 July 2018.

appeal by three Singapore citizens, including Gary Lim and Kenneth Chee who had been involved in a romantic relationship for 16 years, was dismissed.29 More recently, the Registry of Marriages (“ROM”) voided the marriage between a same-sex couple.30 They wedded as man and wife in October 2015, and in June 2016, the man went for a sex change and updated the identity card to say ‘female’. They were a married same-sex couple until the marriage was voided in February 2017. Family lawyer Sim Bock Eng said, ‘There is no requirement that parties must remain the same gender throughout the marriage, nor is there any provision that such marriages are void.’ ROM’s authority to void the marriage without going to court was therefore questioned.31 Even though the Singapore’s High Court granted the request to have the authorities’ actions examined,32 the couple subsequently decided to drop the case. It was therefore no longer possible for the courts to address the ambiguity in the law. Likelihood of judicial solution to legalise same-sex marriage in Singapore begins to decrease exponentially. Perhaps the issue is truly a normative constitutional one as the Constitution cannot be interpreted as such to protect the right to life and personal liberty of gay men. It might be time to address the fault in the text of the Constitution to ensure that all Singaporeans can enjoy their constitutional civil rights. Unfortunately, Singapore does not have an Act in anyway similar to the HRA 1998, nor does it have a Court within the region where Singaporeans could sue for the infringement of human rights. Regardless, it does not seem necessary for the courts to flag the issue to the Parliament as it is already an issue the legislature is aware of. It remains a ‘wait and see’ for when Singapore is finally ready for a political solution to address same-sex marriage. How would, or how should, Singapore legalise samesex relationships then? There are a few steps Singapore may take towards legalising same-sex relationships. Current social attitudes could be illustrated by a public poll. It may not be binding but it would suggest that Singaporeans 29 ‘Singapore: Court Ruling a Major Setback for Gay Rights’ Human Rights Watch (Berlin, 29 October 2014) <https://www.hrw.org/ news/2014/10/29/singapore-court-ruling-major-setback-gay-rights> accessed 15 July 2018. 30 Kirsten Han, ‘An LGBT couple whose marriage was wiped off the books in Singapore is going to court’ Quartz (29 January 2018) <https://qz.com/988514/a-straight-married-couple-became-a-samesex-one-and-singapores-famous-efficiency-broke-down/> accessed 15 July 2018. 31 Kok Xing Hui, ‘ROM voids marriage between same-sex couple’ The Straits Times (Singapore, 18 July 2017) <https://www. straitstimes.com/singapore/rom-voids-marriage-between-same-sexcouple> accessed 15 July 2018. 32

(n 30).

LAW AND SOCIETY

might be ready to legalise same-sex relationships. With the social attitudes then cast aside, it could be raised for a debate in the Parliament. However, it does not seem to be the most important issue at hand. In addition, PM Lee was firm that Section 377A would still stand even if a referendum was held.33 Even though introducing civil partnership is considered as the first step towards marriage equality in many countries, I consider repealing Section 377A the first step towards legalising same-sex relationships in Singapore. Section 377A has to be repealed before civil partnership or same-sex marriage would make sense. Should civil partnership ever be introduced as a compromise between supporters and opponents of same-sex marriage in Singapore, it is critical to consider the situation the UK is currently facing. Is there a possibility that Singapore will legalise same-sex marriage? Would Singaporeans be urging for equal civil partnership then? Such a situation could be avoided if Singapore introduces same-sex marriage from the outset. It seemed unlikely to me, but it will be impossible to be certain at this very moment. I am hopeful that an eventual change will occur, but I remain pessimistic as to the amount of time we have to wait before we will see it happen in Singapore.

(n 28).

LAW AND SOCIETY

Should Married Couples be Granted Divorces on a ‘No Fault’ Basis? Adelle Yii, University College London

Divorce procedures in both Singapore and the United Kingdom are governed by the need to establish fault, the only exception being where the parties have been separated. The conditions under which a divorce can be granted are strict, the main ground being that the marriage has broken down irretrievably. This was however questioned in Owens v Owens (‘Owens’),1 where Munby J considered the possibility of granting divorce on a ‘no fault’ basis, premised fully on parties’ consent. This article considers the possibility of adopting a “no fault” approach to consensual divorce and the wider implications it may have on both jurisdictions. The author seeks to prove that although a ‘no fault’ approach does seem ideal and has its advantages, it can have negative consequences on the way marriage is viewed in both jurisdictions and should not be adopted at this time. Although the system Singapore adopts is similar to that of the United Kingdom, with the added emphasis on alternative platforms to resolve disputes in divorce cases, Singapore should be slow to consider the ‘no fault’ position where there is consent.

The Position in the United Kingdom The conditions under which a divorce can be granted in the United Kingdom are listed in section 1 of the Matrimonial Causes Act 1973, focusing on the need to prove fault on the respondent’s part, usually through incidents of adultery2 or behaviour where the petitioner cannot reasonably be expected to live with the respondent3. In Owens,4 the trial judge found that the respective incidents brought up by Mrs Owens were not sufficient to prove that the marriage had broken down irretrievably and the divorce was not granted. Mrs Owens appealed on the grounds that the need to establish fault contravened her Article 8 and Article 12 rights under the European Convention on Human Rights. However, the Court of Appeal upheld the decision, reasoning that the Convention did not confer a right to divorce, or a right to favourable outcome in a file for divorce. Although it was evident that the Court of Appeal was reluctant in rejecting the petition for divorce, the Court unanimously held that a change of law to a ‘no fault’ approach could not be dealt with by the judiciary. That being said, it is

acknowledged that the decision in Owens was recently challenged in the United Kingdom Supreme Court in May and is currently pending judgement.

The Position in Singapore In Singapore, section 95 of the Women’s Charter5 makes clear that ‘either party to a marriage may file a writ for divorce on the ground that the marriage has irretrievably broken down’. This can be proved by various facts, including that the defendant committed adultery6 or behaved in such a way that the plaintiff cannot reasonably be expected to live with the defendant7. A divorce application will fail for want of such evidence: in Tan Yan Ling Kyna v Chan Wei Zhong Terence (“Kyna Tan”),8 it was held by Choo Han Teck J that the divorce could not be granted because the marriage had not lasted three years and there was insufficient proof of fault. Unlike the United Kingdom, however, there has been, no consideration of a ‘no fault’ divorce in the Singapore courts. Nevertheless, given that statute and case law from both jurisdictions are largely similar, there seems to be no real reason why Singapore should not consider Munby J’s suggestion of a ‘no fault’ approach.

Element of Fault Although the term ‘fault’ is not explicitly mentioned or used in any of the statutes mentioned above, it is clear that save where the parties have been separated, there must be some form of wrongdoing on the part of one party to the marriage. This essentially means that the plaintiff needs to assert that the defendant was at fault for causing the marriage to break down irretrievably.

Problems with the Current Approach There are three main issues with relying on fault as a ground for divorce. The first issue is that requiring fault to be established will inevitably lead to a higher volume of contested divorces. The second issue is that it is unclear what degree of fault is required before the courts will be satisfied in granting a divorce – even an objective test seems to set too high a bar. The corollary of this,

[2017] EWCA Civ 182.

(Cap 353, 2009 Rev Ed).

Matrimonial Causes Act 1973 (MCA 1973) s 1(2)(a).

Women’s Charter (Cap 353, 2009 Rev Ed)) s 95(3)(a).

MCA 1973 s 1(2)(b).

ibid, s 95(3)(b).

Owens (n 1) [64]-[67] (Munby J).

[2014] SGHC 195 [6]-[7].

LAW AND SOCIETY

and the third issue, is that this forces many couples to remain in unhappy marriages, contrary to the principle of individual autonomy. Higher Volume of Contested Divorces Forcing one party to blame the other can lead to more cases of contested divorces, not necessarily because the other party wishes to remain in the marriage, but because the defendant seeks to be absolved of fault for the divorce. This view is heavily supported by Resolution, an organisation representing lawyers working in family law in the United Kingdom. Nigel Shepherd, a former chair of Resolution, argues that the current laws ‘create unnecessary conflict in divorce, forcing many couples to blame each other when there is no real need – other than a legal requirement – to do so’.9 Indeed, forcing one party to blame the other can lead to higher cases of contested divorce simply because there is no feasible alternative. High Barriers in Terms of Establishing Fault It is also unclear what the element of ‘fault’ entails. Rayden and Jackson propose the use of an objective test by asking ‘whether a right-thinking person, looking at the particular husband and wife or civil partners, would ask whether the one could reasonably be expected to live with the other taking into account all the circumstances of the case and the respective characters and personalities of the two parties concerned’.10 This definition was affirmed by Munby J in his dicta where he reasoned that the words ‘reasonably be expected’ in the Matrimonial Causes Act suggests the need for an objective test,11 although he later added that the Court must evaluate what is proved to have happened in the context of the marriage in question and in relation to the parties involved. Adopting the objective test, both jurisdictions have implied that there must be a high degree of fault in order for a divorce to be granted. In Owens, Mrs Owens brought up several incidents, such as Mr Owens having lost his temper at her in an airport, drawing attention from the public and causing her to feel embarrassed. She also argued that Mr Owens suffered from mood swings, causing him to unreasonably lose his temper at her, 9 Owen Bowcott, ‘Nobody’s Fault but the Law: Tini Owens Boosts Case to Legalise No-Fault Divorce’ The Guardian (London, 17 May 2018) <https://www.theguardian.com/lifeandstyle/2018/may/17/ nobodys-fault-but-the-law-tini-owens-boosts-case-to-legalise-nofault-divorce> accessed 1 June 2018. 10 Stephen Trowell and David Williams (eds), Rayden and Jackson on Relationship Breakdown, Finances and Children (LexisNexis 2016) 6.82-6.85.

Owens (n 1) [35]-[36] (Munby J).

giving her great unhappiness and distress. Despite clear evidence that she was not happy in the marriage, the Court of Appeal, though reluctantly, found that there was insufficient finding of fault to grant the divorce. Similarly, in Kyna Tan, the plaintiff raised six incidents of abuse and although two incidents of the alleged abuse took place during the marriage, Choo Han Teck J found that the circumstances did not fall within the requirements of the Women’s Charter. Although the test is supposed to be a combination of an objective and contextual considerations, it can be argued that judges are neglecting personal thresholds when determining the degree of fault. There is no doubt that a certain degree of objectivity is required, but it can be argued that the emotional capacity of an individual should also be a central aspect in the findings. Marriages are built on individual characteristics and some parties may be more easily affected than others by actions of their partners. For example, in Owens, it is possible that Mrs Owens was more easily affected by the public arguments as opposed to an ideally objective and reasonable person. Given the intimacy of a marriage, it would be unfair to expect parties in a marriage to be objective at all times, especially where the marriage has taken a turn for the worse. Therefore, it is uncertain when it would be fair to find that, from an objective point of view, there has been sufficient fault for a divorce to be granted. Being Trapped in an Unhappy Marriage The third problem with restricting divorce to cases of fault is that it traps people in an unhappy marriage when they do not fall within the required degree of fault. In Owens, Hallett J expressed his ‘regret that our decision will leave the wife in an unhappy marriage’ and his recognition that ‘the marriage is over’.12 In his dicta, he made a final persuasive attempt for Mr Owens to relent and consent to the divorce, given the negative turn in the marriage. Although such reluctance was not expressed in Kyna Tan, it is evident through the petitions submitted during proceedings that the marriage had essentially ended, though not legally dissolved. The parties no longer behave like married couples do, having lived separate lives, and argued that the marriage had only brought them hardship. This seems contrary to the principle of individual autonomy. Parties to a marriage should be allowed to determine when, in their opinions, the marriage had ended, entitling them to a divorce. This is especially given the intrinsically personal nature of marriage – being trapped in a marriage that has broken down 12

Owens (n 1) [102] (Hallett J).

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can undoubtedly have adverse consequences on the wellbeing of both parties. Forcing parties to live separately whilst waiting for the three-year mark to pass is redundant, since they are essentially living as if they were divorced. Their marriage is essentially only recognised on paper and when parties are determined on living separate lives, the hope of reconciliation is minute. It would be far more beneficial if parties were granted a divorce, even where there was no element of fault, allowing them to lead individual lives freely, without having the concern of a divorce at the back of their minds.

‘No Fault’ Grounds for Consensual Divorce On the other hand, adopting the ‘no fault’ position for divorce where parties consent essentially means that parties do not have to prove that there was adultery or unreasonable behaviour. Removing the element of fault reduces conflicts during divorce proceedings and can reduce the number of contested cases. As mentioned above, a divorce is often contested because the defendant wishes to defend himself from the allegations of fault, not because he wants to contest the divorce itself. It could very well be the case that parties recognise that the marriage has broken down but contest the petition on the basis that cited incidents of fault are exaggerated or not as the defendant remembered. By taking out the need to prove fault, both parties can come to an agreement outside litigation, speeding up the process and removing the emotional rollercoaster of having to argue in court. However, implementing the ‘no fault’ position would require legislation by Parliament, since it contradicts the requirements laid down in both the Matrimonial Causes Act 1973 (in the United Kingdom) and the Women’s Charter13 (in Singapore). Such a change, if adopted, cannot be done by the courts as it would usurp the function of the legislation. Furthermore, although a ‘no fault’ divorce where there is consent seems ideal, there are wider societal implications that must be taken into consideration. A balancing exercise must therefore be conducted, to determine whether there is a real need in society for such a pivotal change in divorce proceedings. Sending the Wrong Message to Society? One of the main concerns with introducing ‘no fault’ divorces, even where there is consent, is that it sends the message that one can easily dissolve their marriage as and when they please. This view is represented by Choo Han Teck J in Kyna Tan, where he mentions that ‘marriage is not an event that one can sign in and out as 13

(Cap 353, 2009 Rev Ed).

they fancy’.14 There is no doubt that allowing ‘no fault’ divorces will speed up the process and make it far easier for parties to dissolve their marriage. This could have negative implications since it encourages people to walk away from and not reconcile problems in their marriages. Other than undermining the purpose and even the sanctity of a marriage, this can generate a society of distrust, where marriages lose their commitment aspect since parties can so easily decide against it. The effects of making divorce processes easier to go through can also implicate family members and children who may get caught in the proceedings. When deciding whether to grant a divorce, judges often must look at whether minor children are involved and how the divorce may affect them. Ideally, children should be brought up in a complete family and divorce should be the last resort when attempts at mediation and reconciliation have failed. Even though ‘no fault’ proceedings protect children from getting tangled in conflict, they should not be brought up with the mindset that divorce is an easy way out of their future marital or family problems. Allowing a floodgate of divorce cases on a ‘no fault’ basis will have negative consequences on society as a whole and legislators should think twice before simply supporting the idea. Removing Accountability A key aspect of having to prove fault in divorce proceedings is to ensure that where fault has been established, the respondent should be accountable for his actions. Removing the need to prove fault may encourage parties to simply opt for a consensual ‘no fault’ divorce, as opposed to bringing up issues of adultery or unreasonable behaviour. Society is based on a system of wrongdoers being held accountable for their wrongdoings. This is evident in all aspects of law, such as criminal or contract law, and family law should not be an exception to the rule. The option of a more convenient route without having to prove fault may remove the severity of committing adultery or conducting oneself in an unreasonable manner. This is because parties know that in order to get away with such acts, all they need to do is simply consent to the divorce. Given that the plaintiff is aware of the wrongdoing of the defendant, it is unlikely that the divorce will be contested and therefore, the process will be completed in a hassle-free manner. Entrenching such a practice will be detrimental to society as a whole, as it allows parties to engage in wrongful acts without having to be accountable for them. 14

Kyna Tan (n 8) [6].

LAW AND SOCIETY

There is also the need to look at how such conduct will affect future generations. Being brought up in a society where adulterous acts simply result in an easily attainable divorce removes the sanctity of marriage. This position marks the beginning of a slippery slope, where eventually there will be no element of accountability in marriages, leaving only the legal recognition to differentiate it from normal passing relationships.

Implications in the United Kingdom Other than looking at the general pros and cons of ‘no fault’ divorce, we must also consider the specific implications such a policy will have in each jurisdiction. Munby J raises the point that in 2017, only 2,600 cases of the 113,996 petitions had an initial intention to contest the divorce.15 The actual number of contentions filed was 760, which accounted for 0.67% of all petitions. Although there are no clear statistics as to which cases proceed to the final stages of a contested divorce, these percentages prove that very few divorces are contested on underlying issues of fault – the current requirement to establish fault only affects the minority of cases. As such, the policy justification for relying on fault as a form of floodgate is undermined and no longer serve any practical purpose in the United Kingdom. Further statistics may justify the consideration of adopting ‘no fault’ divorce proceedings where both parties consent. The Office for National Statistics released figures for divorce in 2016 at 106,959 cases, an increase of 5.8% from 2015.16 Although the official figures for 2017 have not been released, assuming that there is an increasing trend for divorce proceedings, it can be argued there is a need to seriously consider moving towards a ‘no fault’ approach, reducing the number of unhappy marriages and protecting the mental welfare of parties involved in lengthy divorce proceedings. Although one can argue that the rise in divorce cases signifies the need for stricter rules to discourage divorce, this may not be the case in the United Kingdom. It was found that the median duration of marriage for divorces granted in 2016 was 12 years, an increase from 2009 when it was 11 years.17 This increased duration of marriage can suggest several possibilities. It can prove that either marital problems have developed later in the marriage, that couples have left divorce as a last resort, or that couples have decided to separate instead of alleging fault against one another. If this is truly the case, then implementing a ‘no fault’ approach where there is 15

Owens (n 1) [98] (Munby J).

16 Office for National Statistics, Divorces in England and Wales (2016) <https://www.ons.gov.uk/peoplepopulationandcommunity/ birthsdeathsandmarriages/divorce/bulletins/divorcesinenglandandwales/2016> accessed 1 June 2018, para 1.

ibid, para 8.

consent will not have a significant effect of increasing the number of divorce cases. Instead, the ‘no fault’ approach will promote efficiency in the system for consensual petitions, as fewer cases will have to go before court and can be dealt with in an administrative manner. There may be an initial spike in divorce cases in the first few years after implementation of ‘no fault’ divorce, as couples who have chosen separation over fault will no longer have to wait to go through divorce proceedings. However, even without the implementation of ‘no fault’ divorce, the number of such cases will be spread over several years, as couples simply wait to satisfy a duration of separation before filing for divorce. Therefore, the United Kingdom Parliament should seriously consider the possibility of adopting a system of allowing divorces where there is no fault, as long as the petition for divorce is not contested.

Implications in Singapore The mere fact that ‘no fault’ divorces should be considered in the United Kingdom does not mean that it will be an ideal change to impose in Singapore. One of the key differences between Singapore and the United Kingdom is the emphasis on mediation before petitioning or contesting a divorce. Although this could be a consideration for the United Kingdom, it will be harder to implement than ‘no fault’ divorce, since resources have not been set aside to support such a system. Debbie Ong J, Presiding Judge of the Family Justice Courts, noted that 15% of divorce cases were partially solved at mediation, reducing the number of cases that went on to contested hearings.18 In her speech, she also emphasised that the aim of increasing mediation efforts is to minimise conflict through nonlitigious action at all stages of the process. The Family Justice Courts have even looked into the possibility of an Online Dispute Resolution platform, providing a forum for parties to negotiate instead of turning to litigation. Although the number of divorce cases in Singapore has risen, the Courts have increasingly taken steps to look into the possibility of promoting peaceful negotiations or reconciliation. As such, it would be impulsive to instantly push in the direction of ‘no fault’ divorces, where alternative resolutions are being put in place. Given that 53.7% of plaintiffs in civil divorces cited ‘unreasonable behaviour’ as the grounds for divorce,19 it can be argued that the increased emphasis on mediation will be a more 18 Rahimah Rashith, ‘“Encouraging” Results from Divorce Mediation: Family Justice Courts’ The Straits Times (Singapore, 28 February 2018) <https://www.straitstimes.com/singapore/courtscrime/7-out-of-10-divorce-cases-settled-through-mediation-in-2017> accessed 1 June 2018. 19 Amir Yusof, ‘More Getting Divorced, Fewer Getting Married in Singapore’ Channel News Asia (Singapore, 13 July 2016) <https:// www.channelnewsasia.com/news/singapore/more-getting-divorcedfewer-getting-married-in-singapore-7912746> accessed 1 June 2018.

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effective measure than ‘no fault’ divorce. This allows couples to resolve issues in an amicable manner, whilst still setting a high bar for divorce and maintaining the sanctity of a marriage. Perhaps the better approach would be to allow the Family Justice Courts to implement programmes encouraging mediation as well as the Online Dispute Resolution, before making any concrete decisions regarding ‘no fault’ divorce. If statistics prove that these methods are not effective in reducing the number of divorce cases, then perhaps a ‘no fault’ position should be considered alongside mediation, in order to promote efficiency in the system and reduce conflicts over the element of fault and wrongdoing.

Concluding Thoughts The benefits of allowing ‘no fault’ divorces where both parties consent does seem to be an ideal system. It respects the wishes of both parties and does not force either party to blame the other for the divorce. ‘No fault’ divorces will also be more of an administrative process than a litigious process, reducing the number of cases being brought before the Courts. However, there is also a need to consider the downside of such a system. Allowing people to divorce easily will undermine the sanctity of marriage, sending the message that any

marital problem can easily be resolved through divorce. Removing the element of fault also allows those who have genuinely committed some form of wrongdoing, such as adultery or unreasonable behaviour, to get away with their wrongdoings for the sake of a simpler divorce process. The United Kingdom has not made significant attempts to implement alternative measures for resolution, with little emphasis placed on the possibility of mediation. There has also been tremendous support by judges and lawyers for the ‘no fault’ divorce system to be put in place. As Mrs Owens has appealed against the Court of Appeal’s finding against her divorce petition, the Supreme Court may shed further light regarding the potential shift away from the element of fault. However, the same cannot be said in Singapore. The Family Justice Courts have focused heavily on mediation and the possibility of resolving conflicts, leaving divorce as a final option. Since the Family Justice Courts are looking into ways to provide more alternative methods of resolution, it is only fair to allow a window of time to determine whether these measures are effective in reducing the number of divorce cases. If the newly implemented measures and platforms prove to be ineffective, then perhaps it is time for Singapore’s Parliament to consider a shift to the ‘no fault’ position. Until then, this writer submits that there is no real need for such a consideration.

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LAW AND SOCIETY

Context is Everything: The Application of the Common Intention Constructive Trust to Family Homes Ng Shu Wen, University College London

Introduction In BMM v BMN decided on 29 May 2017, the High Court of Singapore applied the resulting trust analysis to a family home in a situation where the marriage between parties was found to be void.1 Mr BMM had purchased the property in contention in his sole name in 1997, before he met Mrs BMN in early 1998 while she was married. Mrs BMN filed for divorce in 1999 and was granted the decree nisi in respect of her divorce on 8 July 1999. Mrs BMN realised she was pregnant with twins whom she thought Mr BMM had fathered. Mr BMM later proposed, knowing that Mrs BMN was pregnant, and the parties married in the US on 23 November 1999. In 2001, Mr BMM transferred the property to be held by Mrs BMN and himself as joint tenants. He maintained that this transfer was effected only because he could enjoy discounted interest rates in respect of his mortgage loan by naming Mrs BMN (a Singapore citizen) as a registered co-owner of the property. Despite the records however, Mr BMM remained solely responsible for the mortgage payments at all times and claimed to have clarified with Mrs BMN that he would remain the Property’s sole beneficial owner. Mrs BMN however, claimed that the transfer was made because he had wanted to provide her with some security should anything happen to him, whose job required frequent overseas travel. Critically, the parties never stayed in the Property. In 2004, the family relocated in the US where Mrs BMN filed divorce proceedings the following year. In 2008 while the divorce proceedings were ongoing, Mr BMM discovered that the parties’ marriage was invalid as Mrs BMN had not obtained the decree absolute at the time of their marriage. Mr BMM successfully applied to the US courts to have their marriage annulled. It was later discovered that Mr BMM was not the biological father of the twins. As the US courts had declared the marriage void in May 2009, the US courts did not need to rule on division of matrimonial assets and maintenance. Parties agreed that Mrs BMN could not obtain ancillary

BMM v BMN [2017] SGHC 131; [2017] 4 SLR 1315.

relief pursuant to a nullity of marriage.2 Accordingly, the parties’ dispute over the Property could only be resolved under the law of property and trusts. In holding that Mr BMM beneficially owns the entirety of the Property, the High Court applied the instructive case of Chan Yuen Lam v See Fong Mun3 which affirmed Lord Neuberger’s minority approach in Stack v Dowden4 and the limited utility of the common intention constructive trust approach in Singapore. On the unique facts of BMM v BMN, we agree that the High Court was correct in finding that Mr BMM had held the full beneficial interest of the Property. What we would like to discuss is that the case of BMM v BNM nonetheless presented a fact matrix that could be potentially challenging to reconcile with justice using the strict resulting trust analysis provided for in Chan Yuen Lam v See Fong Mun.

The English Approach In two landmark cases,5 the apex court of the United Kingdom applied the common intention constructive trust in displacing the ratio of beneficial interest derived from the presumption of a resulting trust in properties held jointly by co-habiting couples. This was a marked departure from established case law that had aligned beneficial interests in the family home with that of commercial property. Before Stack v Dowden, the default position for family homes was provided for in Lloyds Bank plc v Rosset6 and Pettitt v Pettitt.7 On this approach, contributions to the costs of running a household and improvements 2 Under Chapter 4A of the Women’s Charter (Cap 353, 2009 Rev Ed), which applied only to marriages dissolved or annulled with effect from 2011. 3 Chan Yuen Lam v See Fong Mun [2014] SGCA 36; [2014] 3 SLR 1048. 4

Stack v Dowden [2007] UKHL 17; [2007] 2 AC.

5 The House of Lords decision in Stack v Dowden (ibid) and the Supreme Court decision in Jones v Kernott [2011] UKSC 53; [2012] 1 AC 776. 6

Lloyds Bank plc v Rosset [1990] UKHL144; [1991] 1 AC 107.

Pettitt v Pettitt [1970] AC 777.

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made to the property amongst other factors did not, in itself, create a beneficial interest in the property. Even in the family home, the presumption of a resulting trust would operate—each party’s beneficial interest would be determined proportionately to their contribution to the purchase price. In Stack v Dowden, the House of Lords held that the presumption of resulting trust is no longer conclusive as to the beneficial interest in family property after the breakdown of a cohabitation relationship. The majority of the House (Lord Neuberger dissenting) found it justified in light of changing social and economic conditions8 along with the Law Commission findings that devising a statutory scheme for such relationships was quite impossible.9 The courts found themselves entitled to fill the gap by turning to the common intention constructive trust. Where there is evidence in the parties’ whole course of conduct in relation to the property to justify an inference of common intention, the courts were entitled to depart from the apportionment that would arise using the resulting trust analysis. On the facts, maintenance of financial independence throughout the 18-year relationship was strong evidence that the parties had no intention to pool and manage their resources together. As Baroness Hale observed, “context is everything”. On this note, the House held that such application was fact-sensitive and that many more factors than financial contributions may be relevant to discerning the parties’ true intentions.10 Baroness Hale confirmed in the Privy Council soon after Stack, that “the law has indeed moved on since then. The parties’ whole course of conduct in relation to the property must be taken into account in determining their shared intentions as to its ownership”.11 Jones v Kernott affirmed the shift in the law and went further in holding that courts were not only entitled to infer, but also to impute intentions where share intentions could not be found on the evidence submitted. The House was divided on the ability to impute such intention though the decision was unanimous.12 It is now confirmed that the operation of the resulting trust is limited in determining the beneficial interest of the parties in the family home. It is also worth noting that such approach would be applicable in a domestic context, not a commercial context notwithstanding the

parties’ familial ties.13

The Singapore Approach In stark contrast, the Court of Appeal in Singapore has expressly declined to follow the departure from established law as the English courts have done. The leading case on the matter in Singapore is Chan Yuen Lan v See Fong Mun. In delivering the judgment of the Court of Appeal in Chan Yuen Lan v See Fong Mun, V K Rajah JA affirmed that the application of the common intention constructive trust to domestic contexts has limited place in Singapore.14 Such a decision was supported by five observations. It was first observed that the resulting trust approached provided a pragmatic and clear guidance on the application of the law in such contexts which is necessary in facilitating certainty in legal advice as well as minimising unnecessary litigation. Second, it removes the unclear distinction that has emerged in England between the domestic and the commercial contexts, ensuring better consistency of results. Third, this approach prevents the court from imputing to the parties an intention which they never had, preventing the court from foisting upon the parties an intention which they never had in order to achieve a “fair” result. Fourth, it would mean that the common intention constructive trust would also be applicable in the commercial contexts. Fifth, the use of the resulting trust as the default analytical tool in the absence of any evidence of a common intention between the parties as to how the beneficial interest in the property concerned is to be held is also consistent with the lack-of-intention analysis of the resulting trust. The court concluded in recognising that while the conventional analysis Lord Neuberger stood for in Stack may be perceived as “unfair” in certain cases, subjective fairness may not be the most appropriate yardstick to apply in resolving property disputes and each party’s share of the beneficial interest in a property ought to be determined in a principled and fairly predictable manner. V K Rajah JA then laid out the broad framework for subsequent cases in paragraph 160 of the judgment, quoted here verbatim: (a) Is there sufficient evidence of the parties’ respective financial contributions to the purchase price of the property? If the answer is “yes”, it will be presumed that the parties hold the beneficial interest in the property in proportion to their respective contributions to the purchase price (ie, the presumption of resulting trust

Stack v Dowden (op cit n 4) at [44] and [45].

ibid at [46].

Stack v Dowden (op cit n 4) at [69].

Abbott v Abbott [2007] UKPC 53 at [19].

13 Laskar v Laskar [2008] EWCA Civ 347 applied a strict resulting trust where a mother and daughter had purchased property for investment purposes.

Jones v Kernott (op cit n 5) at [26] to [36].

Chan Yuen Lan (op cit n 3) at [151] – [158].

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arises). If the answer is “no”, it will be presumed that the parties hold the beneficial interest in the same manner as that in which the legal interest is held. (b) Regardless of whether the answer to (a) is “yes” or “no”, is there sufficient evidence of an express or an inferred common intention that the parties should hold the beneficial interest in the property in a proportion which is different from that set out in (a)? If the answer is “yes”, the parties will hold the beneficial interest in accordance with that common intention instead, and not in the manner set out in (a). In this regard, the court may not impute a common intention to the parties where one did not in fact exist. (c) If the answer to both (a) and (b) is “no”, the parties will hold the beneficial interest in the property in the same manner as the manner in which they hold the legal interest. (d) If the answer to (a) is “yes” but the answer to (b) is “no”, is there nevertheless sufficient evidence that the party who paid a larger part of the purchase price of the property (“X”) intended to benefit the other party (“Y”) with the entire amount which he or she paid? If the answer is “yes”, then X would be considered to have made a gift to Y of that larger sum and Y will be entitled to the entire beneficial interest in the property. (e) If the answer to (d) is “no”, does the presumption of advancement nevertheless operate to rebut the presumption of resulting trust in (a)? If the answer is “yes”, then: (i) there will be no resulting trust on the facts where the property is registered in Y’s sole name (ie, Y will be entitled to the property absolutely); and (ii) the parties will hold the beneficial interest in the property jointly where the property is registered in their joint names. If the answer is “no”, the parties will hold the beneficial interest in the property in proportion to their respective contributions to the purchase price. (f) Notwithstanding the situation at the time the property was acquired, is there sufficient and compelling evidence of a subsequent express or inferred common intention that the parties should hold the beneficial interest in a proportion which is different from that in which the beneficial interest was held at the time of acquisition of the property? If the answer is “yes”, the parties will hold the beneficial interest in accordance with the subsequent altered proportion. If the answer is “no”, the parties will hold the beneficial interest in one of the modes set out at (b)–(e) above, depending on which is applicable. 82

Discussion Despite the allowance for inference of common intention at stage (b) of the framework, the flexibility of its application is doubtful. With respect, it is submitted that the Court of Appeal could have taken a more lenient approach even after accounting for the differences in social setting. While the common constructive trust is indeed within the proposed analytical framework to be applied by courts, it is submitted that its utility is in reality, severely curtailed as a result of the unwelcoming attitude of the SGCA towards this shift. Such disapproval of the common intention constructive trust maintains the rigid application of the resulting trust approach which may lead to inequitable outcomes that may be detached from the reality of the matter. As I will analyse below, while there are indeed compelling reasons for the retention of the resulting trust analysis and sound reasoning for the SGCA’s approach, there is nonetheless room for further relaxation of the rule. A. Support for Singapore’s Approach The ability to contribute to the purchase of one’s family home is influenced by a number of factors, some of them unique to Singapore. First, Singapore has one of the highest rates of home ownership in the world, hovering at a steady rate of about 90%.15 This is in sharp contrast to that of the United Kingdom which maintains a rate of approximately 63%16 (its capital city London maintains a rate of 50%).17 This means that a far higher percentage of Singaporeans have a proprietary stake in their residential homes compared to residents in the UK. This may be attributed to cultural values and pro-home ownership policies amongst others. Regardless, what this means is that Singaporeans have a huge stake in property which demands legal recognition and protection that may be achieved in part by the resulting trust analysis. This is further supported by the sanctity of proprietary rights. Finally, this also affirms the necessity of guarding against excessive litigation, given the relatively large numbers of home ownership. The high rate of home ownership is further accentuated by the Public Housing and Private Properties Scheme 15 Statistics Singapore, ‘Home Ownership Rate of Resident Households’, retrieved 1 April 2018 from: <https://www.singstat. gov.sg/statistics/visualising-data/charts/home-ownership-rate-of-resident-households> 16 Office for National Statistics, ‘UK Perspectives 2016: Housing and Home Ownership in the UK’ (25 May 2016) retrieved 1 April 2018 from: <https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/ukperspectives2016housingandhomeownershipintheuk/2016-05-25> 17 Cassie Barton, Home Ownership & Renting: Demographics (House of Commons Library, 9 June 2017).

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under the Central Provident Fund. These schemes supplement the personal finances of homeowners, bolstering their resources and helping them purchase their homes. Since inception, the schemes have contributed a whopping approximately $200 billion in enabling homeowners to purchase their own homes18 with no signs of slowing down. It is also worth noting that the CPF housing schemes are utilised mostly by married couples, a trend that can be attributed to the threshold requirements for application. The strong push for home ownership, along with the extraordinarily high rates of homeownership in Singapore indeed supports the Court of Appeal’s approach in protecting the beneficial interests of home ownership in Singapore by pegging it to the contribution to purchase price under the resulting trust analysis. Additionally, Singapore is seeing an increasing proportion of dual-career marriages.19 This means that both parties to a marriage are now increasingly able to both contribute towards the purchase price, or at least upkeep of the mortgage. On this analysis, the resulting trust analysis is increasingly representative of the financial contributions towards acquiring the family property. Gone are the days of the patriarchal model where the husband brings home the bacon while the wife contributes to the entirety of running the household and raising children of the union. These trends mean that wives are now more able to contribute to, and secure a beneficial interest in, the purchase price of the family home. Overall, there is a highly orchestrated and concerted push towards home ownership across various institutions for multiple public policy reasons that reinforces the importance of the law to maintain certainty in the protection of proprietary rights in the domestic home in Singapore by relying on a resulting trust analysis. B. Critique of Singapore’s Approach However, the case of BMM v BMN illustrates a situation arising where legal safeguards failed to secure an equitable outcome for disputants. Notably, the parties were in a long-term relationship (20 years) with two children. Notwithstanding the unique facts of the case 18 Central Provident Fund Board (Singapore), ‘CPF Statistics: Housing’ retrieved 1 April 2018 from: <https://www.cpf.gov.sg/ Members/AboutUs/about-us-info/cpf-statistics> 19 Statistics Singapore, ‘General Resident Survey 2016’ retrieved 1 April 2018 from: <https://www.singstat.gov.sg/docs/ default-source/default-document-library/publications/publications_ and_papers/GHS/ghs2015/findings.pdf>; Ministry of Social and Family Development (Singapore), ‘Insight Series: Family and Work’ (2017) retrieved 1 April 2018 from: <https://www.msf.gov.sg/researchand-data/Research-and-Data-Series/Documents/Family%20and%20 Work%20Report.pdf>

where the children were found not be the biological offspring of the male disputant (I shall refrain from using “husband” since the marriage was found to be void) and that the parties had never lived in the property in dispute, one can imagine a situation where parties in a long-term relationship are not protected by the laws regulating breakdown in a marriage, i.e. the Women’s Charter. It appears that the Court of Appeal in deciding Chan Yuen Lan had never considered such a situation where without the stamp of marriage, the parties would be left completely exposed, subject to the strict resulting trust analysis and its archaic presumptions (that have since been abolished in the UK)20 in order to derive a share from the “matrimonial” assets. It is hereby suggested that the common intention constructive trust analysis still has a degree of utility in its application to family breakdowns in Singapore – it fills the void to bring forth an equitable outcome for the parties in a long lasting relationship where it is not secured by marriage. For the above reasons, it is first submitted that the constructive trust analysis would only be relied upon in a handful of cases on unique facts. As previously explained, the majority of residential property in Singapore are firstly, owned and secondly, by married couples. As a result, the number of cases that could possibly arise on dispute as to the family property in a situation where the parties are not married are small. It is hence contended that the law remains clear for the vast majority of domestic property disputes where parties contributing to the household may be remunerated by award of maintenance or otherwise. Second, there is difficulty in reconciling the court’s reluctance to place a value on non-financial contributions, or indeed financial contributions to the upkeep of the household, to the family home with the general approach taken in matrimonial law. It is in fact common practice for courts to place monetary value and afford weight to non-financial and intangible contributions to family life such as where the wife had borne a child of the marriage, undertaken childcare responsibilities and other non-financial contributions in deciding maintenance and other financial arrangements after the breakdown of a marriage.21 While it is undeniably important for the value of such contributions to be as accurate as humanly possible, it is equally undeniable that such apportionment nonetheless carry a significant symbolic value for the parties in recognising such efforts 20 See Section 199 of the UK’s Equality Act 2010 which has not yet been brought into force. However, in Bhura v Bhura [2014] EWHC 727 (Fam), it was found that such presumptions “can be regarded as being on its death-bed given that they have been abolished by s199”. 21 ANJ v ANK [2015] 4 SLR 1043 at [17], courts discretion flowing from sections 112 to 113 of the Women’s Charter 1961 (Cap 353, Rev Ed 2009).

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into the family. It is submitted that it is not wise for court to refrain from valuing contributions other than financial contributions to purchase price for fear of inaccurate valuation, especially since the act of valuation itself carries symbolic value in vindicating the efforts of the contributing party. Also in relation to this, the strict application of the resulting trust disregards situations where financial arrangements between partners are unexpectedly shifted. Given the support for home ownership and heavy reliance on housing loans, the possibility of a divergence between the proposed and actual financing of the domestic home is now enhanced22. To nonetheless discern beneficial interest based on the proportion of financial contribution to the acquisition would then be an artificial legal distinction from the reality of the proportions in which the family home had indeed been financed. Third, the imputation of common intention remains a contentious issue for the Supreme Court in England and Wales as well. This is to say that it is possible to divorce the imputation of intention from the general application of the common intention constructive trust. Indeed the possibility of imputation of intention is a contentious issue in various areas of law. In delivering the majority judgment of Jones v Kernott itself, Lord Walker and Baroness Hale doubted whether the court was indeed entitled to impute such intention23. The desire to avoid imputing such intention, with respect, does not provide a compelling reason to constrain the utility of the common intention constructive trust. Fourth, ensuring the applicability of the common intention constructive trust to be applied to commercial properties is not a convincing reason to refuse the application of the common intention constructive trust to the domestic home. Allowing the application of the common intention constructive trust does not preclude its application to the commercial context. It is less likely for parties to be inequitably remunerated in commercial contexts as compared to domestic contexts given the nature of and safeguards, such as seeking legal advice, in commercial arrangements as compared to the informal and private nature of domestic arrangements. Allowing the beneficial interest of the common intention constructive trust is a positive step towards protection of the parties due to the unique nature of spousal or quasi-spousal relationships; whereas refraining from taking such a step does not amount to extending such protection to the commercial context.

Chan Yuen Lan (op cit n 3) at [53]-[57].

Jones v Kernott (op cit n 5) at [26]-[36].

Finally, there is difficulty in accepting the SGCA’s position to prefer the conventional approach supported by Lord Neuberger with full knowledge that it may result in “unfair” outcomes for disputants. It is submitted that it would align far better with notions of justice for the Court to allow for greater flexibility in the law by expressly permitting the application of the common intention constructive trust where the situation calls for such. Particularly in the domestic situation, context is indeed everything and it appears to be rather naïve for the law to draw such an artificial distinction. Over time, it is believed that a coherent set of legal rules will emerge with the result of enhancing certainty and consistency in the law while keeping in line with the general notions of justice and fairness.

Conclusion Hopefully a case allowing the CA to consider the issue would come up soon. In any case, the factual matrix of BMM v BNM was potentially challenging for justice and fairness to be achieved if the strict resulting analysis provided for in Chan Yuen Lam v See Fong Mun were to be applied. In spite of societal differences in the UK and SG, it is nonetheless contended that a more nuanced approach can be adopted in Singapore to provide for domestic disputes that may nonetheless arise beyond the limits of matrimonial law.

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LAW AND SOCIETY

Liability for the Acts of Others: Armes v Nottinghamshire CC and Some Comparative Observations Yen Jean Wee, University of Cambridge Introduction

Mohammad Madni (“Ng Huat Seng”).4

The recent decision of the UK Supreme Court (UKSC) in Armes v Nottinghamshire County Council1 (Armes) indicates just how far English law has come in imposing tortious liability on an individual or organisation for the acts of another. The troubling facts of Armes involved the physical and sexual abuse of a child (the claimant) by foster parents with whom the local authority had placed her while she was committed to its care. The UKSC held that the local authority was vicariously liable for the torts committed by the foster parents, but that it had not breached a non-delegable duty of care owed to the child. As Deakin has noted, this outcome would have been “inconceivable” less than two decades ago, given that the traditional model for vicarious liability revolved around an employer-employee relationship and imposed liability on employers for torts committed by employees in the course of their employment.2 Armes, by contrast, concerned a very different sort of a relationship, and is perhaps illustrative of the extent to which legal doctrines must evolve—sometimes beyond recognition—to deal with emerging problems. As Lord Phillips commented in Various Claimants v Catholic Child Welfare Society (Catholic Child Welfare Society), the law of vicarious liability is “on the move”.3

Armes v Nottinghamshire City Council

However, while this outcome certainly satisfies our instinctive sense that the local authority should be held responsible in some way for placing an already vulnerable child in such a position of exploitation, the route by which the UKSC reached this result warrants further examination. This article will begin by outlining the UKSC’s reasoning in relation to both vicarious liability and non-delegable duties, and then evaluate the two routes to liability, considering also the approaches taken by two other European jurisdictions – France and Germany. It will then compare English law with Singapore’s position, most recently articulated in Ng Huat Seng v Munib

As already alluded to above, there were two separate issues for the UKSC to consider: (a) whether the local authority had breached a non-delegable duty of care to the claimant, and (b) whether the local authority was vicariously liable for the foster parents’ torts. Lord Reed, delivering the judgment of the majority, made it a point to emphasise that the two were “distinct legal doctrines with different incidents and different rationales”.5 On this ground, his Lordship rejected the view expressed by Burnett LJ in the Court of Appeal6 that, if vicarious liability is absent, the common law should not impose liability via non-delegable duties.7 This sounds a welcome note of caution against eliding the vicarious liability and non-delegable duties: liability for breach of the latter is based on the direct, primary liability of the local authority, while vicarious liability is not. Indeed, Lord Reed observed that there could not be “any rationale” for imposing vicarious liability on a defendant who was directly liable for the harm caused by the third party.8 As Giliker has argued, primary liability is inadequate to justify the imposition of vicarious liability: “[a]t best, it is a fiction, at worst misleading”.9 A. Non-Delegable Duties Taking the issues in the order in which the UKSC dealt with them, the court’s analysis of non-delegable duties will be considered first. Referring to Lord Sumption’s influential judgment in Woodland v Essex County Council,10 Lord Reed stated that this non-delegable duty 4 Ng Huat Seng v Munib Mohammad Madni [2017] SGCA 58. 5

Armes (op cit n 1) at [50].

6 NA v Nottinghamshire County Council [2015] EWCA Civ 1139; [2016] 2 WLR 1455.

1 Armes v Nottinghamshire County Council [2017] UKSC 60; [2018] AC 355.

op cit n 5.

ibid at [30].

2 S. Deakin, “Organisational Torts: Vicarious Liability versus Non-Delegable Duty” (2018) CLJ 15.

9 P. Giliker, Vicarious Liability in Tort: A Comparative Perspective (Cambridge University Press, 2010) at 234.

3 Various Claimants v Catholic Child Welfare Society [2012] UKSC 56 at [19].

10 Woodland v Essex County Council [2013] UKSC 66; [2014] AC 537.

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was a duty to ensure that care was taken to protect those to whom the duty was owed.11 The question whether the local authority had breached a non-delegable duty thus turned on whether the local authority had a duty of care, analogous to that owed by hospitals to their patients and schools to their pupils, to ensure that care was taken to protect the safety of the children in their care; or simply to arrange for the provision of day-to-day care for the children, subject to a duty to take care in making and supervising those arrangements.12 It is clear that the former imposes a more onerous burden on the local authority than the latter—it “cannot be discharged merely by the exercise of reasonable care in the selection of a third party to whom the function in question is delegated”.13 On the facts of Armes, where the relationship between the local authority and the foster parents had been created by statute rather than having been assumed voluntarily by the local authority, the question thus formulated became one of construction of the relevant statutory provisions: sections 10, 21, and 22 of the Child Care Act 1980 (‘the 1980 Act’). An analysis of these provisions led Lord Reed to conclude that the local authority’s duty was limited to the latter option: to arrange for and supervise the provision of day-to-day care for the claimant. Section 10 inter alia imposed upon a local authority the duties which a parent or guardian would have in relation to a child in their care, and Lord Reed noted that there were “no authorities suggesting that parents, or persons with analogous responsibilities, must not merely take personal care for their children’s safety, but must ensure that reasonable care is taken by anyone else to whom the safety of the children may be entrusted”.14 Similarly, Lord Hughes (dissenting on the vicarious liability point, but concurring in respect of non-delegable duties) stated that neither parents nor local authorities owe their children an obligation to guarantee that others whom they may ask to help in the children’s care will not be careless or deliberately abusive.15 Section 21(1) allowed the local authority to “discharge” its duty to provide accommodation and maintenance for a child in its care by “boarding him out on such terms as to payment by the authority and otherwise as the authority may… determine”. Lord Reed held that the language of ‘discharge’ implied that the placement of a child with foster parents “constitute[d] the performance of the local authority’s duty to provide accommodation and

maintenance”.16 These observations were further supported by an examination of section 22, the implication of which was that the local authority’s “continuing responsibility… for the care of the child, in accordance with section 10, is discharged in relation to the boarding-out of children by means of prior approval of the households in which they are placed, and subsequent inspection, supervision and removal if appropriate”.17 Lord Reed therefore concluded that the statutory regime did not impose on the local authority “any other responsibility for the day-to-day care of the child or for ensuring that no harm comes to the child in the course of that care”,18 and that the local authority was not in breach of a non-delegable duty. Questions of statutory construction aside, the influence of broader policy considerations should also be highlighted. In the very second paragraph of his Lordship’s treatment of non-delegable duties, Lord Reed stressed that “[t]ortious liabilities based not on personal fault but on a duty to ensure that care is taken are exceptional, and have to be kept within reasonable limits”.19 This concern seemed to permeate the subsequent analysis. For example, in the course of considering section 10 of the 1980 Act, Lord Reed noted two undesirable practical consequences of holding the local authority liable for a breach of a non-delegable duty on these facts. First, if a local authority believed that it was in a child’s best interest to allow them to stay with their families or friends, this would “risk creating a conflict between the local authority’s duty towards the children under section 18(1) [which imposed a general duty on the local authority to give first consideration to the need to safeguard and promote the child’s welfare] and their interests in avoiding exposure to… liability [for any want of care on the part of those families or friends]”.20 Secondly, it might amount to “a form of state insurance for the actions of the child’s family members (and, indeed, their friends, relatives and babysitters, if the child were left with them)”.21 The impression that Lord Reed was concerned about the potentially wide-ranging and indeterminate liability that a non-delegable duty would impose on the authority in these circumstances, and the concomitant strain this could place on both the local authority’s fulfilment of its statutory duties and on 16

ibid at [47] (emphasis in italics added).

Armes (op cit n 1) at [31] and [34].

ibid at [48].

ibid at [32] and [37].

Armes (op cit n 1) at [48].

Armes (op cit n 1) at [31].

ibid at [32].

ibid at [41].

Armes (op cit n 1) at [45] and [4].

Armes (op cit n 1) at [75].

ibid at [45].

LAW AND SOCIETY

public administration more generally, is reinforced by his Lordship’s conclusion on this issue: “the proposition that a local authority is under a duty to ensure that reasonable care is taken for the safety of children in care, while they are in the care and control of foster parents, is too broad, and … the responsibility with which it fixes local authorities is too demanding”.22 B. Vicarious Liability Vicarious liability was the ground on which a majority of the UKSC was willing to find the local authority liable. Lord Reed restated the two-stage inquiry to determine the scope of vicarious liability that had been set out in Cox v Ministry of Justice:23 “First, what sort of relationship has to exist between an individual and a defendant before the defendant can be made vicariously liable in tort for the conduct of that individual? Secondly, in what manner does the conduct of that individual have to be related to that relationship in order for vicarious liability to be imposed?”24 In Armes, the answer to the first question was determinative of the outcome of the case, since it was conceded that if the relationship between local authority and foster parent is one which could give to vicarious liability, child abuse was a tort for which vicarious liability would be imposed.25 Lord Reed began his analysis of this issue by making clear that vicarious liability was no longer confined to particular legal relationships, like employment and agency; a “more fine-grained approach” had been adopted in more recent cases.26 Thus, although the “classic example” of a relationship with particular characteristics justifying the imposition of vicarious liability remains that between employer and employee,27 that is simply the quintessential relationship in which vicarious liability will be found, surrounded by a penumbra whose edges have not yet been sharply defined. Lord Reed examined the facts in the light of five factors that had been identified in Cox v Ministry of Justice and Catholic Child Welfare Society as usually making it fair, just and reasonable to impose vicarious liability in an employer-employee relationship, and which if present in other cases could make them “akin to employment” and so justify a finding of vicarious liability.28 The first factor considered was the relationship between the activity of the foster parents and that of the local

authority—whether the tort was committed as a result of activity taken by the foster parents on behalf of the local authority. Lord Reed concluded that it was: the nature of the arrangements between the local authority and foster parents was such that the foster parents were not carrying on an independent business of their own, but rather assisting the local authority in discharging its statutory duty to care for the children in its care, through the provision of accommodation, maintenance, and daily care.29 The second factor was whether the foster parents provided care as an integral part of the local authority’s organisation of its child care services. Again, Lord Reed answered this question in the affirmative, observing that it was “impossible to draw a sharp line” between the local authority’s activity, and its responsibility for caring for the child and promoting her welfare, and the activity of the foster parents, whom the local authority “recruited and trained, and with whom they placed the child, in order for her to receive care in the setting which they considered would best promote her welfare”—the foster parents’ torts were thus committed “in the course of an activity carried on for the benefit of the local authority”,30 and which was central to the local authority’s performance of its duties. The third factor was whether the local authority had created the risk of the tort committed by the foster parents. Lord Reed found that they had. The local authority’s choice to place children in their care with foster parents “create[d] a relationship of authority and trust between the foster parents and the children, in circumstances where close control [could not] be exercised by the local authority”, and a particular risk of abuse was “inherent in that choice”.31 Considerations of risk distribution also came in at this stage: Lord Reed considered that, if a local authority considered it advantageous on balance to place a child in foster care, notwithstanding that inherent risk of abuse, it was fair that the local authority “should compensate the unfortunate children for whom that risk materialises”, especially since the children were under its protection and had no control over their placement, so that “the burden of [that] risk borne in the general interest [was] shared, rather than being borne solely by the victims”.32 The fourth factor was the degree to which the foster parents were under the control of the local authority. Lord Reed said that, although the foster parents were responsible for the day-to-day care of the children without

ibid at [49].

Cox v Ministry of Justice [2016] UKSC 10.

Armes (op cit n 1) at [53].

ibid at [53].

ibid at [59].

ibid at [52].

Armes (op cit n 1) at [60].

ibid at [54].

ibid at [61].

Armes (op cit n 1) at [55].

Armes (op cit n 1) at [61].

LAW AND SOCIETY

immediate supervision, the local authority “exercised powers of approval, inspection, supervision and removal without any parallel in ordinary family life”, by virtue of which they “exercised a significant degree of control over both what the foster parents did and how they did it, in order to ensure that the children’s needs were met”.33 Responding to Tomlinson LJ’s conclusion to the contrary in the Court of Appeal, Lord Reed stressed that it was not necessary for there to be “micro-management, or any high degree of control, in order for vicarious liability to be imposed”: vicarious liability has been imposed on the owners and operators of a boarding house for child abuse committed by its warden (Lister v Hesley Hall Ltd34), on a diocesan bishop for abuse committed by a priest (E v English Province of Our Lady of Charity35), and on a religious association for abuse committed by one of its members while working for a third party (Catholic Child Welfare Society).36 The fifth factor was whether the local authority was more likely to have the means to compensate the claimant than the foster parents. Lord Reed noted that most foster parents had insufficient means to satisfy a large award of damages, nor were they likely to be insured in respect of such behaviour, whereas local authorities were more able to pay compensation.37 On these facts, therefore, all five factors were present, tipping the balance in favour of imposing vicarious liability. However, the weight of each factor supporting this conclusion should not be overstated. This is made clear by Lord Hughes’ dissenting judgment, in which his Lordship’s analysis of many of the above factors swung the other way. For example, the fifth factor – relative ability to compensate—“tends to be circular”,38 since the imposition of vicarious liability on a local authority in a case like this would itself contribute to the perceived need for local authorities to insure themselves against similar risks in the future. Lord Hughes also reached the opposite conclusion on the second and fourth factors (whether the foster parents provided care as an integral part of the local authority’s organisation of child care services, and the degree to which the foster parents were under the local authority’s control), after a detailed consideration of the “legal and practical shape of fostering”.39 This led Lord Hughes 33

ibid at [62].

Lister v Hesley Hall Ltd [2001] UKHL 22; [2002] 1 AC 215.

35 E v English Province of Our Lady of Charity [2012] EWCA Civ 938; [2013] QB 722.

to conclude that the extension of vicarious liability to fostering was neither “called for [n]or justified”, but rather “fraught with difficulty and contraindicated”.40 While the detailed statutory and regulatory regime involved in fostering in the UK makes it difficult to come to a confident conclusion on whether Lord Reed or Lord Hughes was ultimately ‘right’, the disagreement on this point highlights the extremely fact- and context-sensitive nature of the vicarious liability inquiry. It also illustrates that, even though the case law has come a long way in accepting that relationships beyond employment can give rise to vicarious liability and has now established a list of factors to be weighed in determining if vicarious liability should be imposed, the actual application of these factors to new factual scenarios is likely to pose real difficulty and lead to some uncertainty. As in the court’s analysis of non-delegable duties, policy considerations were also influential in its discussion of vicarious liability—but here they pulled in opposite directions. On one hand, Lord Hughes raised the concern that the spectre of vicarious liability might deter local authorities from making fostering arrangements for the children in their care, even though this was a “generally laudable practice” and might be in the best interests of the child.41 On the other hand, Lord Reed pointed out that, if there had been “such a widespread problem of child abuse by foster parents that the imposition of vicarious liability would have major financial and other consequences”, then “there is every reason why the law should expose how this has occurred”; and even if the taking of greater precautions (such as more vetting and supervision) might place strain on local authorities’ resources, “there is also a considerable cost to society if appropriate mechanisms are not put in place to protect vulnerable children”, and these societal costs are likely to accrue far into the future.42 With respect, Lord Reed’s view on this point seems more persuasive, and perhaps this was also a background factor that influenced the majority’s decision that the imposition of vicarious liability on the local authority was fair, just and reasonable in these circumstances. One final point to make regarding the Armes decision concerns its precedential value in England. In the Court of Appeal, Tomlinson LJ had observed that the legislative framework concerned in Armes had since changed (the Child Care Act 1980, for example, having since been replaced by the Children Act 1989), such that “nothing that [the court said] in relation to the position which

Armes (op cit n 1) at [65].

ibid at [63].

ibid at [91].

ibid at [77].

Armes (op cit n 1) at [89].

Armes (op cit n 1) at [78].

Armes (op cit n 1) at [70].

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obtained in 1985-1988 [was] of any necessary relevance to the position today”.43 However, this statement should be treated with some caution. As Tofaris has pointed out, it is misleading: the new legislation has not materially changed “the conceptualisation of the independence of foster parents in the day-to-day provision of family life as the essential element of the foster arrangement”, which therefore “potentially applies with equal force today”, so that a similar result is likely to follow in English law in relation to foster arrangements made under the Children Act 1989.44

European Perspectives: Liability for the Acts of Others in French and German Law Having considered the decision in Armes, representing the current position of English law, in some detail, this section will compare the approaches that have been taken in some other European jurisdictions. The contrasting approaches of French and German law to the strictness of liability for the acts of others is of particular interest, especially since Lord Hughes—in rejecting vicarious liability on the facts of Armes—concluded by remarking that, it being a form of strict liability “imposed on a party which has been in no sense at fault”, the extension of vicarious liability “needs careful justification”.45 Liability for the acts of others is strict in French law, as in English law. Article 1242(1) of the French Code Civil sets out the principle that “[e]veryone is liable for the damage caused not only by one’s own conduct, but also by the conduct of persons for whom one is responsible”; Article 1242(5) then specifies that principals and employers are liable for the damage caused by their servants and employees in the course of the functions for which they are employed.46 It is immaterial that the principal or employer was not personally at fault and could not prevent the harm, nor even that he could not have foreseen or avoided the harm.47 Van Gerven, Lever and Larouche therefore argue that the rationale for imposing liability is based on risk: principals and employers are held responsible for the risks associated with the activities they are undertaking, especially if the principal or employer benefits overall from his servants’ and employees’ performance of their functions.48 A very similar rationale for vicarious liability in England was 43 [3].

German law presents a very different picture. Liability is fault-based under § 831(1) of the German BGB, which provides that “[a]nyone who employs another person for a task is liable for the injury unlawfully caused to a third party by that other person in the accomplishment of the task”, but that liability can be avoided “if (i) the employer exercised reasonable care in the selection of the employee and—when the employer himself… directs the accomplishment of the task—in the… direction [of the employee], or (ii) the injury would also have been caused if the employer had taken such reasonable care”.50 For this reason, Van Gerven, Lever and Larouche have argued that this is not a true regime of liability for others, since it ultimately rests on the principal’s fault— even though that fault is presumed.51 This approach would place a less onerous burden on a defendant in the position of the local authority in Armes, but would also mean that many claimants may be deprived of a remedy; indeed, the vicarious liability claim in Armes may well not have succeeded under German law, since the local authority was found not to have been negligent in the selection or supervision of the foster parents.52 The desirability of this fault-based approach has also been questioned: Van Dam observes that the breadth of the possibilities of escaping liability has prompted the development in German law of various means to circumvent the limitations of § 831.53 One such circumvention is the notion of ‘organisational fault’ developed on the basis of § 823 BGB, which broadly maps onto the English law concept of nondelegable duties. This “obliges the employer to organize and supervise the management and the activities of his employees in such a way as, depending on the circumstances of the case, is required with respect to preventing damage to third parties”.54 As Deakin explains, the question then becomes “whether the risk of harm to the claimant was one for which the [local authority] retained organisational responsibility, even after it discharged to the foster parents the task of caring for the claimant, and the same result could have

NA v Nottinghamshire County Council (CA) (op cit n 6) at

44 S. Tofaris, “Vicarious Liability and Non-Delegable Duty for Child Abuse in Foster Care: A Step Too Far?” (2016) 79(5) MLR 884 at 887-888.

Armes (op cit n 1) at [67].

Translation by Van Gerven (op cit n 46) at 480.

ibid at 480.

Armes (op cit n 1) at [1].

Armes (op cit n 1) at [91].

46 Translation by W. van Gerven, J. F. Lever, and P. Larouche, Tort Law (Hart Publishing, 2001) at 468.

articulated by Lord Reed in Armes: “it is just that an enterprise which takes the benefit of activities carried on by a person integrated into its organisation should also bear the cost of harm wrongfully caused by that person in the course of those activities”.49

ibid at 469.

53 C. Van Dam, European Tort Law (Oxford University Press, 2013) at 504.

ibid at 472.

ibid at 505.

LAW AND SOCIETY

been arrived at in Armes on this ground”.55 Indeed, analysing non-delegable duties in English law along the lines of organisational fault and retained organisational responsibility, rather than based exclusively on an interpretation of the scope of the specific duty-imposing provisions involved, may help to solve problems arising from the indeterminacy of the extent of ‘control’: before the UKSC’s decision in Armes, Tofaris argued that liability should be imposed on the basis of non-delegable duties rather than vicarious liability, inter alia because the “absence of control by the local authority over the foster parents in the provision of family life, which makes it problematic to view them as part of the authority’s enterprise and thus negates vicarious liability, has no purchase on the imposition of non-delegable duty”.56 In turn, the need to show organisational fault could “provide courts with a control device which may not be available if they go down the vicarious liability route”.57

The Singaporean Position The judgment in Armes was handed down less than a month after the Singaporean Court of Appeal’s decision in Ng Huat Seng, and so Menon CJ did not have the opportunity in that case to consider the position in English law post-Armes. It is also difficult to know whether, on similar facts, Singapore’s courts would arrive at the same conclusion as that in Armes. The cases in which issues of vicarious liability and non-delegable duties have arisen in Singapore have (fortunately) not involved facts similar to Armes and the line of abuse cases preceding it. Moreover, Low has pointed out that much will depend on the specific delineation of duties under the relevant statutes, and in particular that the extent of public authorities’ immunity from liability will turn on the statutory language used;58 it is common for statutory provisions to stipulate that public authorities acting in good faith will not be liable,59 which would seem to preclude liability in a situation like Armes. In Ng Huat Seng, the Court of Appeal also expressed caution about extending the ambit of non-delegable duties: citing the court’s earlier judgment in Management Corporation Strata Title Plan No. 3322 v Tiong Aik Construction Pte Ltd60 and the Canadian decision of 55

Deakin (op cit n 2) at 18.

Tofaris (op cit n 44) at 900.

Deakin (op cit n 2) at 18.

Leichhardt Municipal Council v Montgomery,61 Menon CJ stressed that non-delegable duties should remain “exceptional” and should proceed only “on the basis of a clear analogy to a recognised class” of non-delegable duties, “and then only for compelling reasons of legal principle and policy”, because “in many instances, it would be unrealistic or even impossible for the dutybearer to fulfil the non-delegable duty in question, and this could lead to very artificial outcomes”.62 Ng Huat Seng itself raised the question of non-delegable duties arising by virtue of ultra-hazardous acts, rather than the type of non-delegable duties that could potentially have arisen in Armes. Notwithstanding that, it remains possible for Singaporean law to extend liability to such situations on the ground of vicarious liability. In Ng Huat Seng, Menon CJ accepted that Catholic Child Welfare Society and Cox v Ministry of Justice showed that the doctrine of vicarious liability could be extended beyond the “strict confines of an employment relationship”, thus seeming to accept that the vicarious liability could properly apply to the relationships at issue in these cases. Since the third party in Ng Huat Seng was an independent contractor, all that Menon CJ needed to say to dispose of this issue was that the imposition of vicarious liability for the acts of an independent contractor was clearly unacceptable, as it would be “antithetical to the doctrine’s very foundations”, and there would be “simply nothing fair, just and reasonable” about doing so.63 This might leave the door open for vicarious liability to be found in an Armes-type situation in the future, following the approach taken by the UKSC, should such facts ever arise. However, before this step is taken, and in light of both academic commentary on Armes in the UK and the approaches adopted by France and Germany, it will be important to carefully consider the relationship between the two closely intertwined doctrines—vicarious liability and non-delegable duties—and the precise rationale on which each is imposed, so as to avoid “reach[ing] the right result by the wrong route”.64

58 K.Y. Low, ‘Vicarious Liability, Non-Delegable Duty and the Ng Huat Seng Decision’ (December 2017), Singapore Law Gazette.

61 CLR 22.

Leichhardt Municipal Council v Montgomery (2007) 230

59 Low gives as examples s.16 of the Agri-food and Veterinary Authority Act, and s.32 of the Building Control Act.

Low (op cit n 58) at [85].

Armes (op cit n 1) at [64].

60 Management Corporation Strata Title Plan No. 3322 v Tiong Aik Construction Pte Ltd [2016] 4 SLR 521.

64 Phrase borrowed from Deakin (op cit n 2) at p.18 (commenting on Armes).

SINGAPORE LEGAL SERVICE

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APPLICATION FOR AN INTERNSHIP IN THE SINGAPORE LEGAL SERVICE OR POSSIBLE APPOINTMENT AS AN LSO Candidates who wish to apply for an internship and/or a career in the Singapore Legal Service as an LSO are requested to review and ensure that they fully satisfy the eligibility criteria/requirements (available at http://www.lsc.gov.sg) before submitting an online application.

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LAW AND SOCIETY

Case Note: Robinson v Chief Constable of West Yorkshire Police Glenn Chua, University of Bristol

Facts

Court of Appeal

In the case of Robinson v Chief Constable of West Yorkshire Police,1 Mrs Robinsons (R) was standing metres away from the initial point of arrest. However, the drug dealer’s (W) struggle to avoid arrest by the police (P) brought them closer to Mrs R. W and P fell and collided with R. R suffered injuries and sought a claim against P, on the basis that P were negligent in carrying out their duties. At both First Instance and in the Court of Appeal, no duty of care was held to be owed by the police to R. The finding of negligence at first instance was also dismissed in the Court of Appeal. On appeal to the Supreme Court, the trial judge’s finding of negligence was restored. It was held further that the police owed a duty of care to R, and are therefore liable for R’s injuries.

Mrs R appealed against Recorder’s decision that no duty of care was owed by P, whilst P cross-appealed in relation to the finding of negligence. In relation to the former, Hallett LJ said that the Caparo test is applicable to ‘all claims in modern law of negligence’.5 Additionally, she recognised the ‘general principle’ that, ‘most claims against the police in negligence for their acts and omissions in the course of investigating and suppressing crime and apprehending offenders will fail the third stage of the Caparo test.’ In other words, it is not ‘fair, just and reasonable’ to impose a duty on the police who might be negligent whilst executing his/her duties, for ‘the interests of the public will not be best served by imposing a duty to individuals’.6

First Instance

Nonetheless, Hallett LJ conceded that earlier authorities do not support the notion of ‘blanket immunity’ for police.7 On the contrary, it might be ‘fair, just and reasonable’ to impose a duty in circumstances such as where—negligence occurred in situations that ‘do not relate to the core’ policing functions or where there is an ‘assumption of responsibility’ for the claimant’s safety. The present case did not fall within this set of situations and hence, the ‘general principle’ applies. In relation to the finding of negligence, Hallett LJ contended that she has ‘greater doubts as to the finding of negligence’ by the recorder. In particular, she considered that the Recorder had acted ‘as if he were an expert in the arrest and detention of suspects’. Moreover, the evidence adduced ‘did not come close to justifying’ the Recorder’s finding of negligence. Arnold J concurred with Hallett LJ on this point.

The recorder, in reliance on the adduced evidence, found that there was a foreseeable risk that Mrs R would be injured whilst the arrest occurred. This is because Mrs R was of old age and was in ‘very close proximity’ to W during the arrest. Moreover, there was a ‘significant and foreseeable’ risk that W would evade arrest. In this light, the recorder ruled that the police were negligent and the ruling is based on three reasons: (a) Neil Willan (a police officer) conceded ‘that he ought to have been taking care’ for the public’s safety; (b) P could have delayed the arrest, in order to choose a ‘safer opportunity’ to arrest W; and (c) the arrest was not carried out by all four officers—the minimum number of officers required to effect the arrest safely.2 Although the Recorder decided that the police officers were negligent, he held that the police officers were not liable. Notably, he relied on Hill v CC West Yorkshire3 and said that the case ‘had conferred on the police an immunity against claims in negligence.’4 Additionally, that immunity extends beyond cases of omissions, and was equally applicable to the present case.

an nts

Supreme Court The case was appealed to the Supreme Court, where three important issues were addressed and clarified: (a) whether the Caparo test should be applied in adjudicating ‘all claims in modern law of negligence’;8 (b) whether there a ‘blanket immunity’ for police, in relation to negligence claims; and (c) whether there is

1 Robinson v Chief Constable of West Yorkshire Police [2018] UKSC 4.

ibid at [13].

6 ibid at [46].

[1987] UKHL 12.

ibid at [48].

op cit n 1 [14].

ibid at [40].

[2014] EWCA Civ 15 at [40].

LAW AND SOCIETY

a distinction between ‘positive acts’ and ‘omissions’— where the former is more likely to attract a duty of care. A. Whether the Caparo Test should be applied in Adjudicating ‘All Claims in Modern Law of Negligence’ The Supreme Court decided that the court need not apply the three-staged Caparo test, where a case concerns an ‘established category of liability’.9 It was clarified that it is only in novel circumstances when the court might apply the Caparo test in establishing a duty of care, but with a view of maintaining consistency with earlier authorities. Lord Reed said that: [I]t is normally only in a novel type of case, where established principles do not provide an answer, that the courts need to go beyond those principles in order to decide whether a duty of care should be recognised… [W]here the question whether a duty of care arises has not previously been decided, the courts will consider the closest analogies in the existing law, with a view to maintaining the coherence of the law and the avoidance of inappropriate distinctions.10 In other words, the court would rely on earlier case authorities insofar as they are analogous to the case at hand. The Caparo test would only be adopted where no such precedents could be relied upon. Lord Hughes and Lord Mance concurred with Lord Reed, that the tripartite Caparo test ought to be applied only in ‘novel circumstances’: Where the law is clear that a particular relationship, or recurrent factual situation, gives rise to a duty of care, there is no occasion to resort to Caparo, at least unless the court is being invited to depart from previous authority.11 … [I]t is unnecessary in every claim of negligence to resort to the three-stage analysis.12 B. Whether there is a ‘Blanket Immunity’ for Police, in Relation to Negligence Claims The Supreme Court decided this in the negative. It was held that duty could be owed by the police whenever ‘… the public authority has created a danger of harm which would not otherwise have existed or has assumed a responsibility for an individual’s safety on which the

individual has relied’13 This is notwithstanding that, in the present case, the harm was caused by a third-party. Indeed, as pointed out by Lord Hughes, ‘it matters not that the suspect was the first to be in physical contact with the claimant given that the collision with her was by him plus two of the policemen.’ Importantly, Lord Reed clarified that the case of Hill does not establish a precedent that the ‘police enjoy a general immunity from suit in respect of anything done by them in the course of investigating or preventing crime.’14 Rather, this immunity is limited to damages or liability arising from the ‘performance of [the] function of investigating crimes’ and ‘in the absence of special circumstances’. The police would be equally liable for ‘negligence or other tortious conduct’ that results in personal injury ‘… where liability would arise under ordinary principles of the law of tort…’15 Ruling in favour of Mrs Robinsons, Lord Mance said that the police might be liable where physical injury is a foreseeable consequence arising from ‘positive negligent conduct’—in this case, effecting arrest in a negligent manner: [W]e should now recognise the direct physical interface between the police and the public, in the course of an arrest placing an innocent passer-by or bystander at risk, as falling within a now established area of general police liability for positive negligent conduct which foreseeably and directly inflicts physical injury on the public.16 This is clear departure from the commonly held (and mistaken) notion that the police are immune for liability arising from either acts or omissions. C. Positive -Omission Dichotomy Lord Reed considered that the present case concerns a positive act. Lord Mance and Lord Hughes concurred and asserted that the trial judge’s finding of negligence should be restored. In particular, the ‘reasonably foreseeable risk of injury to the Appellant when the arrest was attempted’17 suffices to impose a duty of care on the police. As noted by Lord Reed, ‘the role of the police in the accident in which Mrs Robinson was injured is not comparable to that of the defendant in the examples commonly given of pure omissions.’

13 ibid at [37]. 9

op cit n 1 at [28]

14 ibid at [55].

10 ibid at [27]-[29].

15 ibid at [55].

11 ibid at [100] (Lord Hughes).

16 ibid at [97].

12 ibid at [83] (Lord Mance).

17 ibid at [74].

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Indeed, this is unlike the earlier cases of Michael or Hill, which concern pure omissions. Michael concerns a failure to arrest a murderer that led to the killing of a future victim, whereas Hill concerns a failure to respond to an emergency call in time to save the caller from attack. In this light, the distinction between Michael/Hill and Robinsons (and hence the difference in decision) seems to be that – the former involved a pure omission whereas the latter involved a positive act. Nonetheless, Lord Mance cautioned that ‘it was not possible to state absolutely that policy considerations may not shape liability where the conduct of the police may be analysed as positive, rather than … involving some form of omission’.18

to how the facts are presented and construed by the trial judge—whom Lord Hughes considered ‘important not to second guess’.24

As far as the ‘positive-omission’ dichotomy could be helpful and relevant in finding a duty of care, it does not come without problem. One of the key issue stemming from this approach is one of classification. Indeed, as Lord Hughes had pointed out, ‘there is no firm line capable of determination between a case of omission and of commission… the great majority of cases can be analysed in terms of either.’19 In other words, there is no straightforward rule or guidance, in ascertaining whether the case concerns a positive-act or omission. It follows that the finding of liability could potentially be a rather arbitrary assessment, and ‘can merely depend on how it is described’.20 A firm recognition of the dichotomy could then counter-intuitively generate uncertainty in the law. In fact, this distinction (and its relevance in finding a duty of care) was once considered by the House of Lords in Hill, but was nonetheless dismissed by Lord Steyn as ‘unmeritorious’.21 In particular, the House considered that the distinction ‘hardly does justice to the essential reasoning in Hill’s case’22—i.e. policy considerations. Perhaps, Lord Hughes’ stance that, the ‘ultimate reason’ for not finding a duty of care ‘lies in the policy considerations’23, will be the paramount consideration by the judiciary when assessing similar cases in future. This has been the longstanding stance of the Court and will continue to be. Needless to say, this be supplanted by the notion will that there will be no ‘blanket immunity’ for the police, and that the police are more likely to be liable where a positive act is concerned. At the end of the day, the finding of liability could ultimately bound down 18 ibid at [85]. 19 ibid at [117]. 20 Ian Skelt, ‘Case Comment: Robinson v Chief Constable of West Yorkshire Police’ (UK Supreme Court Blog, 12 February 2018) <http://ukscblog.com/case-comment-robinson-v-chief-constableof-west-yorkshire-police-2018-uksc-4-part-three/> accessed 30 June 2018. 21

Hill v CC West Yorkshire (op cit n 4) at [32].

22 ibid at [3]. 23

Robinson v CC West Yorkshire (op cit n 1) at [118].

24 ibid at [123].

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LAW AND SOCIETY

An Unwanted Child? Awards for Damages in the Tort of Negligence Bernice Tan, University College London

Introduction

Denying Upkeep Costs

‘I wanted a child… but not this child. I wanted a child my husband and I could call our own.’ This was the essence of the Appellant’s case in ACB v Thomson Medical Pte Ltd (“ACB”).1

In upholding the decision that upkeep costs were not recoverable, the SCA rejected the trial judge’s reasoning on causation, choosing to focus on two main public policy reasons. Firstly, the obligation to maintain one’s child is an obligation at the heart of parenthood and cannot be a legally cognisable head of loss. Secondly, that to recognise upkeep costs would be fundamentally inconsistent with the nature of the parent-child relationship and would place the Appellant in a position where her personal interests as a litigant would conflict with her duties as a parent.5

ACB involved the fertilisation of the appellant’s ovum with an unknown Indian donor’s sperm instead of sperm from her own German husband in a negligent in-vitro fertilisation process, resulting in her daughter, Baby P, having distinctly different physical features from the parents. In the High Court, Choo Han Teck J held that the Appellant was not entitled to bring a claim for the cost of raising Baby P (“upkeep costs”) since this was not an ‘unwanted birth’.2 Yet, in a potentially ground-breaking judgment, the Court of Appeal (“SCA”) in 2017 upheld the High Court’s decision to reject the claim for upkeep costs, but also took a step further—after examining but rejecting a claim for the loss of autonomy suffered by the Appellant, they recognised a new head of damages under the loss of genetic affinity for the first time in the history of claims for wrongful births. Cases of medical negligence leading to unsuccessful sterilisation have previously occurred in other common law jurisdictions in the United Kingdom (“UK”) and Australia, mostly notably in the cases of McFarlane v Tayside Health Board3 and Cattanach v Melchior4 respectively. However, it is the first time that loss of genetic affinity has been recognised as a recoverable head of damage in any jurisdiction, and this decision could potentially influence other common law jurisdictions such as the UK and Australia in further cases of ‘wrongful fertilisation’. This article will therefore examine the SCA’s reasoning of the three different heads of damages (upkeep costs, loss of autonomy and loss of genetic affinity) and shed some light on how other common law jurisdictions have previously approached these issues, or with the new head of loss of genetic affinity, how these jurisdictions may potentially respond in the future.

A. The Issue of Causation Although the SCA reached the same conclusion as the High Court on rejecting the claim for upkeep costs, their reasoning on causation has been regarded as a ‘curious aspect of the decision’.6 The SCA asserted that the purpose for which the upkeep costs were incurred was different—while the Appellant would have incurred upkeep costs in any event, they would have been for a different purpose, that is, to raise a different child that was genetically related to both parents. Such an analysis has been criticised for taking an unorthodox approach inconsistent with the common law’s ‘but for’ test, which never previously had any regard to the ‘purpose’ of the loss suffered by claimants.7 While it may seem over-simplistic to suggest (as the High Court judge did)8 that the upkeep costs would be incurred anyway, it should be noted that the focus in the claim for upkeep costs is the financial costs of raising the child. Hence, the purpose of the loss suffered in the orthodox approach of causation would only matter if it could be contended that the upkeep costs for Baby P would be different due to his/her different genetic traits. Nevertheless, putting aside the issue of causation, the SCA’s public policy reasons provide more convincing grounds for rejecting the claim on upkeep costs. 5

ibid [86].

2 ACB v Thomson Medical Pte Ltd [2014] SGHC 36; [2014] 2 SLR 990.

6 Jordan English and Mohammud Jaamae Hafeez-Baig, ‘Recovery of Upkeep Costs, Claims for Loss of Autonomy and Loss of Genetic Affinity: Fertile Ground for Development?’ (2018) 41(3) Melbourne University Law Review 1360.

McFarlane v Tayside Health Board [1999] 3 WLR 1301.

ibid 1375.

Cattanach v Melchior (2003) 199 ALR 131.

(n 2).

[2017] SGCA 20; [2017] 1 SLR 918.

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B. Public Policy Grounds The public policy factors against an upkeep claim were addressed head-on by the SCA by exposing the normative considerations behind the claim, an approach commended by many academics.9 The SCA held that the responsibilities of parenthood are viewed as obligations of a legal and moral character,10 and to allow a claim for upkeep costs would thus undermine the value of such obligations that go beyond monetary terms, such as the love and affection that plays a central role in a child’s upbringing. In addition, the courts rightly assert that parenthood comprises an indivisible bundle of rights of obligations that cannot be peeled away and hived off a la carte.11 Allowing a claim for the financial upkeep of the child implies that all other obligations, such as providing the child with emotional care and support, should be separated and presumed to be willingly embraced by the parent. English authorities support the conclusion reached by the SCA; however, the approach taken by the English courts in rejecting upkeep claims is arguably more conservative. In McFarlane v Tayside Health Board,12 the House of Lords unanimously denied upkeep costs to the appellant-mother in a case of ‘wrongful conception’, in which the appellant’s husband had been negligently advised that his vasectomy was successful, and no contraception was required. However, instead of relying on the policy factors invoked in the earlier case of Udale v Bloomsbury Area Health Authority13 in denying upkeep costs, the Lords chose to rely on either legal policy or the original principles of the law of negligence, such as establishing that the claim was for pure economic loss, which is generally unrecoverable in English law. Interestingly, the High Court of Australia reached a different conclusion altogether, effectively allowing upkeep claims by a slim majority of 4:3 in Cattanach v Melchior.14 The majority effectively, in contrast to the England House of Lords, allowed the claim based on ordinary principles of tortious liability—the existence of a causative link to the defendant’s negligence and the damage being reasonably foreseeable. The SCA’s approach to upkeep claims is argued to be very much preferred. While it is respectable that the courts in UK and Australia seek to establish their decisions

on principled grounds, the much simpler Spandeck15 framework for the law of negligence in Singapore plays a huge role in the SCA’s clarity in reasoning. Using a single test irrespective of the head of claim pleaded, which focuses on two limbs of sufficient legal proximity and policy considerations that militate against imposition of a duty,16 the Singapore courts avoid grappling with situations such as distinguishing consequential and pure economic loss. Further, the SCA should be lauded for not attempting to force-fit the facts of ACB such as to deny claims under causation or remoteness. In fact, the SCA had overturned the High Court’s finding that there was no causal link between the defendant’s negligence and the upkeep costs sought. The result is the SCA’s clarity in reasoning by addressing the underlying reasons behind denying upkeep claims. Unsurprisingly, the decision to reject the claim for upkeep costs left the SCA feeling unsettled, which they explicitly acknowledged may raise questions of ‘an incongruous— and even unjust as well as unfair—result’.17 This paved the way for them to seek an actionable damage that could allow some form of compensation for the claimants.

Loss of Autonomy A. Identifying the ‘Real Loss’ Suffered by the Appellant The courts first asserted their desire to compensate for the ‘real loss’ suffered by the Appellant. A claim for upkeep costs thus inadequately captured the ‘real loss’ since it merely focuses on one aspect of the result of the child’s birth and existence (ie the financial cost for subsistence of the child), while closing an eye to non-pecuniary aspects of parenting and other financial obligations outside of subsistence (eg birthday presents).18 The courts addressed the concept of a loss of autonomy which found its roots in English authorities. This idea was most notably developed by Hale LJ asserting that that an unwanted pregnancy is an ‘invasion of the bodily integrity and personal autonomy involved in every pregnancy’.19 The courts then recognised that loss of autonomy was the underlying motivation for the House of Lords to modify the traditional principles of causation in Chester.20 In fact, it has been suggested that Chester 15 Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100. 16

ibid.

ACB (CA) (n 1) [106].

ibid [107].

(n 6) 1378-1379.

ACB (CA) (n 1) [90].

ACB (CA) (n 1) [93].

(n 3).

[1983] 1 WLR 1098.

19 Parkinson v St James and Seacroft University Hospital NHS Trust [2001] EWCA Civ 530; Brenda Hale DBE, ‘The Value of Life and the Cost of Living – Damages for Wrongful Birth’ (2001) 7 British Actuarial Journal 747.

(n 4).

ACB (CA) (n 1) [113].

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could be straightforwardly decided on the basis that the plaintiff’s right to autonomy had been infringed.21 Thus, it seemed like a sensible starting point for the SCA to examine whether loss of autonomy could be recognised as an actionable injury in its own right.

would be forcing someone to belt up in a motor vehicle,25 and pulling a person back from stepping into oncoming traffic26—in both situations, one would be better off by the restriction of autonomy in the sense of not freely choosing one’s actions.

The courts ultimately answered the question of whether loss of autonomy could be an actionable damage in the negative. While the SCA acknowledged the upsides of such a claim as compared to claims for upkeep costs, they concluded that such a development had fatal drawbacks that ultimately prevented it from being recognised as an actionable injury in its own right.

Finally, the over-inclusiveness objection is concerned with the fact that any form of damage can, with some ingenuity, be reconceptualised in terms of a damage to autonomy, which will undermine the restrictions in place for recovery in the tort of negligence. This was also the main policy reason behind the Court of Appeal of England and Wales’s (“EWCA”) refusal to award damages for ‘loss of autonomy’ in the recent case of Shaw v Kovac,27 where Davis LJ expressed his concern about the risk for a proliferation of such claims in the ‘current climate of claims farming’.28

B. Merits of the Claim for Loss of Autonomy On the surface, a claim for loss of autonomy backtracks and addresses the claimant’s lost ability to decide on whether to give birth to a child genetically unrelated to her husband, which encompassing the entire result of the child’s birth and existence. Further, this claim avoids the unsurmountable policy objections that beset the upkeep claim by focusing on the independent interests of the parents transgressed as a result of the negligent act,22 similarly to how claims for pain and suffering resulting from the pregnancy and birth are framed (which is generally recoverable in common law jurisdictions like the United Kingdom).23 C. Fatal Drawbacks to The Claim for Loss Of Autonomy However, the SCA eventually recognised three main objections to rejecting loss of autonomy as an actionable damage: (a) the conceptual objection; (b) the coherence objection; and (c) the over-inclusiveness objection. The conceptual objection, which has been fatal to the claim, addresses the fact that the term ‘autonomy’ has been expressed in many different views and definitions. This objection seeks to point out the inherent uncertainty of the term ‘autonomy’ which the courts are not best placed to resolve as it ‘turn[s] on more fundamental questions of political… as well as moral… philosophy’.24 Thus, the courts are unable to arrive at a single concept of autonomy to afford legal protection to. The coherence objection attacks the incompatibility of the notion of an action for ‘loss of autonomy’ with the common law’s understanding of ‘damage’ in terms of objective detriment. Two key examples illustrating this

D. Evaluation At first glance, one may wonder whether the conceptual objection simply reflects an overly cautious approach from the SCA. Looking at past case laws, it seems that the courts in different jurisdictions, including Singapore, have previously made moral judgments that are reflected in the current framework of tort law. A clear example would be the UK courts’ stance that pure economic loss resulting from negligence is not recoverable except in specific circumstances that satisfy the Hedley Byrne test or a modified Caparo test, as opposed to Singapore’s single Spandeck test for all negligence claims which creates no such barriers. This difference in the common law clearly reflects a difference in moral stance on whether one should be liable for causing financial damage to another through one’s negligence, as opposed to physical damage. However, the conceptual objection seems much clearer and convincing when taken together with the overinclusiveness objection. One can imagine the detrimental effects of allowing a claim for loss of autonomy in a situation in which the court is unable to successfully pin down a single definition of autonomy for which recovery should be allowed, or worse still have dissenting judges disagree on the proper definition of autonomy appropriate for such a claim. Perhaps a clear example would be how loss of a chance claims which are generally not an actionable head of damage, as exemplified in Gregg v Scott,29 could be recoverable by framing it as 25

ACB (CA) (n 1) [120].

21 Kumaralingam Amirthalingam, ‘Causation and the Gist of Negligence’ (2005) 64(1) CLJ 32, 34.

26 James Edelman, ‘Vindicatory Damages’ in Kit Barker, Karen Fairweather and Ross Grantham (eds), Private Law in the 21st Century (Hart Publishing 2017) 343, 362.

ACB (CA) (n 1) [108].

[2017] EWCA Civ 1028.

McFarlane (n 10).

ibid [82].

ACB (CA) (n 1) [119].

[2005] UKHL 2, [2005] 2 WLR 268.

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a loss of autonomy claim. Taking Gregg v Scott as an example, the argument would be that the misdiagnosis of the cancerous lump violated his autonomy by denying him the choice of seeking treatment earlier and as a result allowing the cancer to violate his bodily integrity. Seen in this manner, it would thus be problematic for the courts to pin down loss of autonomy as a recoverable head of damages. Particularly because there is not yet any generalised principle of damages for loss of autonomy, the courts may struggle to distinguish and explain why damages would be recoverable in some cases but not others.30 As for the coherence objection, it may not be an entirely convincing basis in rejecting the other than the fact that a loss of autonomy may lead to a better result and it may thus seem counter-intuitive for the common law to award damages in such situations. However, imagine a hypothetical situation where the Appellant’s husband carried a virus which would have been passed on to Baby P if the IVF had been carried out correctly instead of with another healthy male’s sperm. The bigger issue in such a case would not be the fact that the Appellant had suffered a loss of autonomy, since the loss of autonomy had indirectly benefitted the Appellant by reducing Baby P’s potential medical costs to cure the virus. Rather, the Appellant would take issue with the fact that Baby P has no genetic link to her husband. This suggests that a loss of autonomy claim does not fully reflect the Appellant’s loss, and it is heartening to note that the SCA explicitly acknowledged this point, stating that the heart of the matter seemed to relate to ‘the fracture of biological parenthood’.31 In the case of Shaw v Kovac,32 the EWCA similarly rejected a claim for the claimant’s loss of personal autonomy. However, Davis LJ’s policy argument against compensating violations of autonomy was much less convincing, as he denied that a loss of autonomy is something ‘over and above what is already comprehended in the award of general damages for pain, suffering and loss of amenity’.33 Yet, this analysis is unsatisfactory as it firstly seems to confuse the question of actionable damage with the question of damages awarded,34 and secondly equates damages arising from a loss of autonomy to general damages in a broadbrushed manner without explanation.

100

Edelman (n 26) 362.

ACB (CA) (n 1).

(n 27).

ibid [68].

34 Craig Purshouse, ‘Autonomy, Affinity, and the Assessment of Damages: ACB v Thomson Medical Pte Ltd [2017] SGCA 20 and Shaw v Kovak [2017] EWCA Civ 1028’ (2018) Medical Law Review (forthcoming) 7.

It is therefore argued that the SCA in ACB was right to reject loss of autonomy as a recoverable head of damages, and that their reasons, once seen in tandem with each other, provided a clear and compelling basis to reject such a claim. In comparison to the UK’s approach in rejecting loss of autonomy claims in Shaw, the SCA should be applauded for addressing the root of the problem, ie why loss of autonomy cannot be an actionable head of damages. Should any future claimants attempt to rely on loss of autonomy to recover damages, the UK courts should draw from the SCA’s reasoning in ACB which clearly reflect the difficulties behind allowing such claims.

A New Head of Damage: Loss of Genetic Affinity The focus of this article lies in this section—the SCA’s recognition of loss of genetic affinity as a new head of damages. As mentioned earlier, this is the first time a court in any jurisdiction has recognised that damage to an Appellant’s interest in genetic affinity is a cognisable injury that should sound in damages. A. The SCA’s Reasoning: What is the True Harm? The SCA’s task thus lay in identifying the true harm suffered by the Appellant. While there have been many cases of wrongful births across several jurisdictions, the only other case of wrongful fertilisation (as identified by the SCA) was the case of Andrews v Keltz35 in the United States (New York), which was a notably short judgment that did not engage in an in-depth discussion of the issues at hand. The lack of precedents for wrongful fertilisation meant that the SCA began to draw from cases in the broader category of wrongful births that had discussed the importance of ‘affinity’ in their judgment. The most notable case was the Northern Ireland case of A and B by C (their mother and next friend) v A – Health and Social Services Trust (“A and B”),36 where the complainants, the twins born as a result of IVF treatment by the Defendant Trust, brought a claim for the Defendant’s negligence in choosing sperm from a wrong donor resulting in the twins having darker skin than their parents and different skin colour from each other as well. The Court of Appeal upheld the decision of the trial judge which denied the claim on the ground that a difference in skin colour could not constitute a form of damage. While the SCA in ACB agreed with the decision in A and B, it seemed to suggest that the claim, if formulated 35

Andrews v Keltz 15 Misc 3d 940 (2007).

[2011] NICA 28.

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differently, would have revealed the ‘true harm that was suffered’.37 This ‘true harm’ was later identified to be the ‘profound social and emotional consequences which will persist for years to come’ for the Appellant whose baby was born with different physical features from the rest of the family. The SCA thus concluded that damage to the Appellant’s interest in genetic affinity should be an actionable damage. The reactions by commentators to the SCA’s decision have been largely positive, acknowledging the novel resolution to the claim for wrongful birth as one that took a ‘pragmatic path that enabled it both to underscore the fundamental importance of the family unit, while still providing a remedy for the consequences of carelessness in the provision of IVF’.38 However, one curious aspect of the decision is the fact that the claim succeeded despite the Appellant herself not suffering a loss of genetic affinity because she is the biological mother of Baby P. To be factually accurate, the Appellant’s husband is the one that suffered a loss of genetic affinity.39 Thus, to allow the appeal on the grounds of loss of genetic affinity once again seemed inaccurate. However, if this is ever raised as an issue in future cases of wrongful fertilisation, it is not a huge hurdle to cross as long as the parent who has suffered the loss of genetic affinity in the child brings the claim instead. Perhaps the real loss suffered by the Appellant in ACB is more accurately described as the loss of ‘the chance to have a family structure which comport[ed] with her aspirations’.40 However, this brings about other complications as well—should such a claim succeed, the courts may in the future be required to assess which familial aspirations are worthy of legal protection. This would ultimately depend upon the values each society respects. While every jurisdiction is likely to be willing to protect the aspiration of a claimant’s wish to have a child with her husband given the law’s recognition and protection of marriage as an institution, the approach in a relatively conservative Singapore may differ from that of more liberal societies if it concerns a claimant’s aspiration to have a child with her (possibly same-sex) partner. Further, it may not be appropriate for the courts to recognise such a loss as actionable damage given that it may involve taking a moral stance with respect to certain social issues such as homosexuality. Given the conservative approach of the SCA in rejecting loss of 37

ACB (CA) (n 1) [133].

38 Roger Magnusson, ‘IVF stuff-ups and tort liability for loss of genetic affinity’ (Sydney Health Law, 1 November 2017) <https:// sydneyhealthlaw.com/2017/11/01/youve-got-the-wrong-skin-colourivf-stuff-ups-and-tort-liability-for-loss-of-genetic-affinity/> accessed 4 May 2018. 39

English and Hafeez-Baig (n 6) 1379-1380.

ACB (CA) (n 1) [130].

autonomy as actionable damages by maintaining moral neutrality, it is unlikely that such a claim will take foot in Singapore. B. A Better Head of Damages than Loss of Autonomy? Despite the edge that a claim for loss of genetic affinity seemingly has over a claim for loss of autonomy, this new head of damages has been described as a ‘wolf in sheep’s clothing’, disguising the ultimate purpose of the award which is to protect the Appellant’s autonomy.41 The claim is not without force—the SCA explicitly acknowledges that a loss of genetic affinity is simply a specific subset of a loss of autonomy.42 Put this way, there does not seem to be any reasonable grounds on which the Appellant’s interest in maintaining her reproductive plans should be protected any more than the interests of parents maintaining their reproductive plans in wrongful birth cases. The SCA had left it an open question of whether claimants in the latter case could potentially bring a claim for disruption to their reproductive plans as well. However, it is argued that it would have been much clearer for the SCA to argue that the loss of genetic affinity is an interest entirely distinct from the loss of autonomy, such that the objections to a loss of autonomy claim can be avoided. Reflecting on the ACB decision, it may be best for the courts to confine the application of this new head of damages to wrongful fertilisation cases to draw the line that compensation should not be allowed for loss of autonomy more generally in wrongful birth cases. C. Nature vs. Nurture Debate The question of the significance of genes in determining the traits of a child may also play on the back of the minds of commentators when considering the impacts of such a claim. By allowing the claim for a loss of genetic affinity, the courts inherently affirm that genes do play a role in determining a child’s personal identity, or at least their aesthetic traits. However, one may wonder whether it is a frequently misunderstood and exaggerated argument that parental traits will truly be reflected in the child, or whether these traits are something that can be nurtured over time.43 There is less room for debate in ACB itself given that the key issue was the child’s differing physical features, and the fact that a child does inherit physical traits from his/ her parents is rarely disputed. However, should a future case arise that a parent has a child with a donated egg 41

English and Hafeez-Baig (n 6) 1381.

ACB (CA) (n 1) [135].

43 Suresh Viswanath, ‘An Analysis of Genetic Affinity as an Actionable Head of Damages – ACB v Thomson Medical Pte Ltd, Singapore Law Review’ (2016/17) 8 Sing LR, 4.

101

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or sperm and brings a claim motivated by eugenic rather than affinity interests (from a desire to impart functionally desirable traits to their child), such a claim should be rejected.44 In such a case, the same public policy reasons that motivated the SCA to recognise loss of genetic affinity as actionable damage, that is, the social and emotional consequences for the parent would be much less convincing particularly since the lack of traits such as high intelligence is unlikely to lead to social ostracisation or scepticism in the same way that differing physical traits would. It can be noted that in Northern Ireland, the case of A and B45 seemed to suggest that the UK may take a harder stance against a claim for genetic affinity and reject it even if there is a mix-up which affects symbolic rather than functional traits. However, we should recall that the SCA noted that the decision in A and B failed to consider the true harm (ie lack of physical resemblance and the following emotional and social consequences) that the differing physical traits would cause. Further, the claimants in A and B were the children rather than the parents, and genetic affinity thus would not be relevant since it is a parental interest. It is thus argued that the UK higher courts may potentially follow in the footsteps of the SCA and be open to recognising loss of genetic affinity as a new head of damages should a similar case of wrongful fertilisation arise in the future. D. Psychological Impact to the Child Lastly, one may be concerned with the potential psychological impact on the child who later finds out that he or she had previously been embroiled in a legal dispute regarding his differing physical characteristics. Yet, apart from being dismissed as a speculative and uncertain argument in the Australian High Court in Cattanach v Melchior,46 the possible psychological impact was also undermined and compared to ‘many harsher truths which children have to confront in growing up’.47 The SCA in ACB had similarly given little weight to this concern when addressing it in its judgment on upkeep costs.48 However, one may consider that the psychological impact on the children should not deter the courts from holding such Defendants liable for their negligence. Given the rise of assisted reproductive technology in many countries, it may be contrary to public policy for the courts to keep an eye closed to the reality that

102

ibid 5.

A and B (n 36).

Cattanach (n 4).

47 48

any procedures gone wrong should be adequately compensated for, especially since it would likely lead to adverse and potentially lasting consequences for the parents.

Quantification of Damages for Loss of Genetic Affinity Finally, the SCA decided to benchmark the eventual award of damages as a percentage (30%) of the financial costs of raising Baby P.49 In the absence of any comparable precedents to which appropriate comparisons could be drawn, the SCA decided that this approach would be preferable to others since it would achieve the purpose of providing solace to the Appellant and that it produces a substantial award that offers ‘reasonable compensation’. Such an approach may raise eyebrows since it would invoke the same policy objections that led to the SCA rejecting an award for upkeep costs—the parents would be incentivised to exaggerate the detriments and downplay any benefits gained from the child.50 Furthermore, it is unclear how awarding a percentage of a pecuniary award adequately takes into account the non-pecuniary harms suffered by the Appellant due to a loss of genetic affinity.51 However, in a multiracial society such as Singapore, it may be inappropriate for the courts to engage in an attempt to quantify the Appellant’s actual losses since it may raise potentially controversial issues—for example, an exercise of quantification in the losses suffered by Chinese parents with an Indian child vis-à-vis Indian parents with a Chinese child. This does not mean that this approach is entirely satisfactory and should be relied upon in future cases. It has been suggested in the UK that a uniform award can be set through parliamentary intervention, with the amount to be determined by consultation and studies.52 Another alternative would be to draw a comparison with claims for trespass to the person, noting that such comparisons have been done in the UK in relation to quantification of damages for libel (a comparison to damages in personal injury claims).53 However, the former approach may be preferable since it would be easier and more practical to set a uniform award in all cases in order to reflect the court’s neutral attitude towards the loss of genetic affinity rather than engaging in potentially sensitive discussions 49

ibid [148].

50 Hairul Hakkim and Kevin Ho Hin Tat, ‘Genetic Affinity as a Novel Remedy for Wrongful Fertilisation – a Case of Assessing the Incalculable?’ <http://www.singaporelawblog.sg/blog/article/182> accessed 4 May 2018. 51

ibid.

ibid [301].

52 [77].

Rees v Darlington [2003] UKHL 52, [2004] 1 AC 309 [46],

ACB (CA) (n 1) [83].

John v MGN Ltd [1997] QB 586, [1996] 3 WLR 593.

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about which race may have more valuable physical traits in any society. One may also question whether awarding damages as a significant percentage of upkeep costs could lead to huge unwarranted financial burden on the defendants. However, it is argued that the consequences for the parents should outweigh the concern of the financial burden on the defendants whom the parents had relied upon for a procedure which they proclaim to have the expertise to carry out with sufficient care and expertise. Ultimately, the SCA also recognised that the ‘Appellant would be ill-served by a judicial refusal to fully engage with [the] issues’.54 Thus, the question of quantification of damages for loss of genetic affinity should not be concluded in the ACB decision. Better methods of quantifying such a damage should be adopted in the future, and other jurisdictions may wish to take this into account should such a claim arise.

Conclusion Overall, the judgment delivered by the SCA in ACB has more merits than flaws. The SCA’s judgment should be applauded for boldly coming up with a new head of damages despite the substantial body of jurisprudence, instead of attempting to force-fit the claim into existing heads of damages or to simply stop after addressing the claim for upkeep costs. This symbolises the SCA’s recognition that these errors made by institutions that carry out any form of assisted reproductive technology should not be easily pardoned. It is also interesting to note that the cultural and historical background of Singapore has also influenced the way the SCA proceeded in their reasoning, especially refraining from quantifying the Appellant’s loss due to potentially racially sensitive issues. It would also be interesting to note the effects of the decision in ACB on future cases which may potentially involve the alteration of the genetic make-up of embryos. In a case where the alteration procedure is unsuccessful, and the embryo’s genetic make-up was different from what the parents wanted, should this constitute a loss of genetic affinity? How about the usage of this technology by the medical institutions to alter the embryo make-up such that the traits are similar or identical to the parents in the case of wrongful fertilisation—will there no longer be a need for a claim for loss of genetic affinity? It all boils down to how advance such technologies will be in the future, and we cannot possibly rule out the fact that these technologies may in fact lead to more legal 54

ACB (CA) (n 1) [135].

disputes pleading new forms of damages as well. One may also ponder upon whether the legislation in New South Wales,55 Queensland,56 and South Australia57 passed to prohibit awards for upkeeps costs may preclude recovery for loss of genetic affinity in wrongful fertilisation cases,58 particularly since the quantification of damages in the SCA’s decision is based upon a quantification of damages for upkeep costs. However, it is argued that there is still scope for Australian courts to ‘consider, unrestrained by the statutory prohibitions, whether loss of genetic affinity ought to be recognised as a compensable head of damage’.59 However, the courts may then refrain from taking a similar approach to the SCA’s quantification of damages to keep in line with the prohibitions in the three states and also to prevent any form of double recovery, since some states in Australia still allow the recovery of upkeep costs. In light of the rising number of people relying on IVF to have children across many jurisdictions, including the UK60 and Australia, this decision on genetic affinity is extremely significant. We can only hope that medical professionals devise a systematic and fool-proof procedure for IVF and other fertilisation methods so that such claims will be on the decline in the future.

Civil Liability Act 2002 (New South Wales), s 71.

Civil Liability Act 2003 (Queensland), ss 49A and 49B(2).

Civil Liability Act 1936 (South Australia), s 67.

English and Hafeez-Baig (n 6) 1381.

ibid.

60 Human Fertilisation & Embryology Authority, ‘Fertility Treatment 2014-2016: Trends and Figures’ (2016) <https://www.hfea.gov. uk/media/2563/hfea-fertility-trends-and-figures-2017-v2.pdf> accessed 4 May 2018, 49.

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When Breath Becomes Air: Why the Hii Chii Kok Test Should Be Applied in the English Courts Edwin Teong Ying Keat, University of Bristol

To the best of one’s ‘ability and judgment’,1 doctors treat patients. With technological improvements in medical treatment, more sophisticated legal tests are required to deter medical negligence. Hii Chii Kok v Ooi Peng Jin London Lucien (“Hii Chii Kok”)2 established 3 expectations of doctors in upholding the standard of care. These 3 concerns include diagnosis, advice and treatment. Regarding advice, it refined the ‘patientcentric’ test in Montgomery v Lanarkshire Health Board (“Montgomery”).3 This article posits that the U.K. Courts can adopt the test regarding medical advice in Hii Chii Kok. This is informed by 3 reasons. Firstly, doing so will provide unprecedented and clear guidance on defining ‘consent’ for the UK Courts. Secondly, it will enshrine the moral autonomy of patients in making informed decisions. Lastly, it balances both patients’ and doctors’ rights, thus taking an objective approach. This is as the existing Montgomery test only focuses on the patient’s informed consent.

Added Guidance on ‘Consent’ (i) Critique of Montgomery Herring argues that in the UK, there is no ‘clear guidance’ on the exact perimeters governing consent.4 The 2-strand test on consent is set out in Montgomery. It establishes the need to disclose material risks with 2 qualifications. The test is as follows: i) if the reasonable person would be likely to attach significance to a risk ii) Risk was so material that a particular patient would accord significance to it when reasonable persons do not. The test is however subject to 2 qualifications which are: i) informing the patient would be ‘seriously detrimental to the patient’s health’5 and ii) emergencies6. However, Herring has 3 main contentions with the test. Firstly, he argues that the second strand may be too onerous. This is as it covers too many categories of patients. An example includes having to disclose all risks to things most people find irrelevant.7 Secondly, 1

The Hippocratic Oath.

[2017] SGCA 38.

[2015] AC 1430.

4 Jonathan Herring, Medical Law and Ethics (6th edn, OUP 2016) 172.

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the need to discuss reasonable alternatives remains open-ended. For instance, what constitutes ‘reasonable alternatives’ that necessitate disclosure? Lastly, patients may be overwhelmed if they are informed of every risk attached to all medical procedures. These contentions render the Montgomery test inadequate in establishing the perimeters of consent. (ii) Refining Montgomery The 3-strand test in Hii Chii Kok refines the Montgomery test. The first strand entails the relevance and materiality of information provided8. Materiality is construed from the patient’s perspective. It includes information besides risks taken which a patient should know, including alternatives to proposed medical treatment and a benefit-risk analysis of those alternatives. Secondly, the test entails whether the doctor ought to have prescribed certain tests or apprised himself of the medical information. Lastly, the courts must consider why the information regarding treatment was withheld. Hii Chii Kok goes further than Montgomery in balancing between the concerns of doctors and patients. Firstly, it addresses Herring’s critique that the second strand in Montgomery risks being too onerous. It considers whether the doctor ought to have known about the risks and reasons for nondisclosure. This prevents all categories of patients from claiming they should have been informed of significant risks. If the doctor can demonstrate reasonably justifiable reasons for non-disclosure, he will not have breached his duty. The Court in Hii Chii Kok explains this strand undergirds the principle that doctors are not obliged to provide patients with ‘encyclopedic’9 ranges of information. (iii) Defining the Perimeters of Relevant Information Hii Chii Kok establishes the ‘quantity and quality’ aspect of information disclosed, thereby defining the perimeters of relevant information to patients. This includes:10 (a) the doctor’s diagnosis of the patient’s condition; (b) the prognosis of that condition with and

5 Montgomery (n 3) [88].

8 Hii Chii Kok (n 2) [137].

6 ibid [27].

9 Hii Chii Kok (n 2) [186].

10 Hii Chii Kok (n 2) [138].

(n 4) 175.

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without medical treatment; (c) the nature of the proposed medical treatment; (d) the risks associated with the proposed medical treatment; and (e) the alternatives to the proposed medical treatment, and the advantages and risks of those alternatives. Strand a) addresses Lady Hale’s concern in Montgomery that the patient is entitled to information enabling a ‘proper part in that decision’.11 As for risks disclosed, strands b) and c) elucidate what aspects of the medical treatment are required to help the patient reach a ‘proper decision’.12 One may argue that risks ‘associated with the proposed medical treatment’ do not clarify what need not be disclosed. This concern is easily addressed by harking back to asking whether withholding such risks was ‘reasonably justified’. This safeguards against minor risks which doctors have no need to disclose to prevent overwhelming patients. The broad wording of strand d) being risks associated with medical treatment accounts for Montgomery’s point on risks associated with both mother and child.13 Thus, the Hii Chii Kok test provides guidance on informed consent, which the UK Courts require, following the uncertainties of Montgomery. (iv) ‘Reasonable Alternatives’ The need to consider alternatives as espoused in Montgomery14 was duly accounted for in Hii Chii Kok. It was further refined to include ‘advantages and risks of those alternatives’. Also, Herring’s criticism of what constitutes ‘reasonable alternatives’ is addressed in strand e). Only alternatives to the proposed medical treatment have to be disclosed. One might argue that this may not add clarity since alternatives will accompany each step of proposed medical treatment. Again, Hii Chii Kok clarifies that only ‘reasonable alternatives’ are disclosed, to prevent an ‘information dump’.15 Hii Chii Kok held that there was no omission of material information regarding lesion treatment. This safeguards doctors from vexatious claims. Thus, the Hii Chii Kok test should be implemented as it addresses the limitations of Montgomery.

Moral Autonomy Autonomy is defined as ‘respect for the patient as a

person’ and is rooted in Kantian ideals.16 In a doctorpatient relationship, it involves informed consent to medical treatment. Herring clarifies that informed consent entails giving enough information to ensure due protection of the patient’s autonomy. It is not merely providing enough information. However, one can argue that the single-minded shift in Montgomery towards autonomy needs to be qualified. This is in considering the origins of autonomy and the need to prevent autonomy from militating against other values. (i) Ethical Considerations What is autonomy, beyond a simple definition of respecting one as a person? Coggon lists 3 versions of autonomy: ideal desire, best desire and current desire autonomy.17 ‘Ideal desire’ means actions decided based on what people should want. ‘Best desire’ means actions which reflect a person’s overall desire given his values. ‘Current desire’ means deciding based on one’s current inclinations. Given that all 3 conceptions of autonomous decisions are different, it would seem ‘foolhardy’ to accord all 3 the same moral weight.18 Montgomery seems to treat all autonomous wishes equally with its generic endorsement of the patient’s autonomy. For example, Montgomery establishes that patients are to be seen as consumers exercising choices, or persons holding rights.19 However, Hii Chii Kok in recognising Montgomery qualifies the need for recognising moral autonomy absolutely. Firstly, it argues that enshrining autonomy does not mean the doctor’s views ‘cease to be significant’.20 Secondly, it limits any exercise of autonomy to decisions that require consent. For instance it excludes treatment from autonomous decisions, as patient involvement is minimal.21 Lastly, it held that the courts are the ‘ultimate arbiter’22 as to whether one’s autonomy was compromised. This prevents autonomy from becoming an absolute consideration. Keown argues that exercising autonomy can only merit respect if it is conducted in accordance within a framework of sound moral values.23 This is as choices should not undermine survival. Neither should it undermine other values such as love, loyalty, friendship 16 Alastair Campbell, Grant Gillett and Gareth Jones, Medical Ethics (4th edn, OUP 2005) 12. 17 John Coggon, ‘Varied and Principled Understandings of Autonomy in English Law: Justifiable Inconsistency or Blinkered Moralism’ (2007) 15(3) Health Care Analysis 235. 18

11 Montgomery (n 3) [115]. 12

ibid.

ibid [111].

ibid [109].

15 Hii Chii Kok (n 2) [202].

Herring (n 4) 210.

19 Montgomery (n 3) [75]. 20 Hii Chii Kok (n 2) [98]. 21

ibid.

ibid [125].

23 John Keown, Euthanasia, Ethics and Public Policy (OUP 2002) 53.

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and care.24 This concern was arguably not addressed in Montgomery. Conversely, Hii Chii Kok addresses this concern by establishing that both principles of autonomy and beneficence are to be upheld. Neither should dominate the other.25 Therefore, as Hii Chii Kok treats the concept of autonomy more cautiously than Montgomery, it should be applied in the UK Courts. (ii) Practical Considerations: Bolam and Bolitho The Bolam test requires the defendant’s practice to be ‘supported by a responsible body of opinion within the profession26’. The Bolitho addendum requires a consideration of ‘comparative risks and benefits’ and whether the opinion was defensible27. This is despite the existence of another body of opinion which disagrees. The recent shift in the law from a generic ‘responsible body of opinion’ test in Bolam recognises its inadequacies. The law as it stands, recognises one’s ‘interest in their own physical and psychiatric integrity’.28 Hii Chii Kok recognizes the patient’s autonomy as a ‘central principle’,29 in line with Montgomery. However, Hii Chii Kok adds further clarity in defining the use of the Bolam and Bolitho test. In Montgomery, Lord Scarman’s dissenting judgement in Sidaway30 was affirmed. Lord Scarman held that mentally sound adults had right to decide their medical the treatment. This ‘right’ involves disclosure of material risks.31 Disclosing such risks informs one’s consent to decide on the doctor’s subsequent interference with their bodily integrity.32 Hii Chii Kok also recognises the inadequacies of Bolam and Bolitho. For example, it establishes that the Bolam test was conceived in a paternalistic era where ‘much less emphasis’33 was placed on autonomy in relation to beneficence. It rejects any mechanical use of the Bolam test, without regard for the ‘overarching principle which it serves’.34 The ‘overarching principle’ being striking a balance between respecting the ‘diverse views’ of the medical profession and holding doctors responsible.35 Thus, the Bolam and Bolitho tests were retained for medical treatment,36 where doctors 24

Herring (n 4) 213.

25 Hii Chii Kok (n 2) [120]. 26 ibid [76]. 27 ibid. 28 Montgomery (n 3) [108]. 29 Hii Chii Kok (n 2) [4]. 30 Sidaway v Board of Governors of the Bethlem Royal Hospital [1985] AC 871. 31

ibid.

ibid [87].

33 Hii Chii Kok (n 2) [115].

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exercise more control than patients. However, where medical advice is concerned, the Bolam and Bolitho tests were deemed inadequate. The tests did not afford a balance between the doctor and patient’s views. The right to choose which risks one undertakes should not be a matter of ‘pure professional judgment37’. Hii Chii Kok affirms Montgomery’s view that this balance needs to be necessitated by discussion38. Oliphant argues that the law tends to fixate on restricting outcomes rather than clarifying principles.39 Thus, adopting the Hii Chii Kok approach conduces for certainty. This is as it clarifies the use of Bolam and Bolitho while establishing perimeters for consent.

Balancing the rights of patients and doctors Objectivity is required to weed out illegitimate claims. Hii Chii Kok ensures objectivity in balancing the rights of patients and doctors. It differs from Montgomery, of which test for disclosure of material risks is largely patient-centric. Thus the Hii Chii Kok approach prevents defensive practice. Its objectivity is achieved in 2 ways. Firstly, objective safeguards are strengthened to prevent claims based on hindsight and outcome bias.40 Therefore, the Courts focus on what the doctor ‘reasonably knew’ rather than ‘what later transpired’.41 This protects the rights of doctors as it limits the scope of medical negligence to their knowledge at the point of treatment. In contrast, the test in Montgomery focused too heavily on what the reasonable person or patient ought to know. This results in a lopsided consideration and assessment of the doctor-patient relationship. Secondly, Hii Chi Kok clarifies that the formulated test will not engender defensive practice. Gunapathy42 raised concerns of defensive practice when judges interfere excessively in the medical profession.43 Their judgments may restrict innovative practice when doctors adhere to ‘mainstream’ approaches. However, Hii Chii Kok clarifies that Montgomery did not dictate what treatment doctors should recommend and is limited to communication of risks and alternative treatment.44 Therefore, the Hii Chii Kok test will not militate against the medical profession. Furthermore, the Hii Chii Kok test is aligned with existing policy arrangements in the UK. For example, 37 Hii Chii Kok (n 2) [121]. 38

ibid.

39 Ken Oliphant, ‘Against Certainty in Tort Law’ in Stephen Pitel, Jason Neyers and Erika Chamberlain (eds), Tort Law: Challenging Orthodoxy (Hart Publishing 2013) 1, 3. 40 Hii Chii Kok (n 2) [158]. 41

ibid [161].

ibid [55].

42 Dr Khoo James and Another v Gunapathy D/O Muniandy [2002] SGCA 25.

ibid [56].

ibid [102].

44 Hii Chii Kok (n 2) [87].

ibid [144].

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the NHS has a ‘direct duty to parliament’ to provide ‘reasonable healthcare’.45 The General Medical Council has also recognized Montgomery in implementing a need to ‘respect patients rights to reach decisions’46 on treatment. Its guidelines even stipulate for doctors to elucidate and obtain the patients’ consent even if they refuse to know of their condition.47 Thus, adopting the Hii Chii Kok test will ensure a balance of rights, aligned with existing policies. Nevertheless, the line between patients’ rights and that of the doctors’ is not easy to toe. As Oliphant illuminates, coining a universal definition of what is ‘reasonable’ is akin to catching a moonbeam.48 Thus, ‘objectivity’ is to be construed in the context of each case. Having said that, this should not prevent the UK Courts from adopting the Hii Chii Kok test. In fact, it offers the closest semblance to objectivity in deciding negligence regarding medical advice. Thus, it would be fair, just and reasonable to implement the Hii Chii Kok test.

Conclusion Paul Kalanathi promulgates the importance of having a ‘right to know’49 even for doctors turned cancer patients. While a truism, it is not easy to adjudicate on medical negligence cases. The courts grapple with interfering with the medical profession, policy considerations and upholding patients’ rights. Evidently, the Hii Chii Kok test accounts for all three considerations. Following Montgomery, it could just a start to curing the legal ailment of insufficient clarity on ‘consent’. Having said that, the law evolves with societal ideals, as with concepts of autonomy and policy considerations. Justice Cardozo once quipped, ‘Justice is not to be taken by storm, she is to be wooed by slow advances.’ The law on informed consent should be developed incrementally, drawing on case law from other jurisdictions. Thus, the UK Courts should adopt the Hii Chii Kok test due to the established reasons.

45 NHS Commissioning Board, ‘Commissioning Policy: Ethical Framework for Priority Setting and Resource Allocation’ (April 2013) <https://www.england.nhs.uk/wp-content/uploads/2013/04/cp-01. pdf> accessed 1 June 2018, 8. 46 General Medical Council, ‘Consent: Patients and Doctors Making Decisions Together’ (2 June 2008) < https://www.gmc-uk. org/-/media/documents/consent---english-0617_pdf-48903482.pdf> accessed 1 June 2018, 2. 47

ibid 11.

Oliphant (n 39) 17.

49 Paul Kalanithi, When Breath Becomes Air (Random House Books 2016) 123.

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Ivey v Casinos: Reform to the Dishonest Principle? Muhammad Hasif, University of Southhampton

Introduction If the man on the street were to be asked on the nature of dishonesty, the answer would be as varied as the people surveyed. This was the basic problem of reasoning that the UK Courts faced, the issue of whether dishonesty should be judged objectively or subjectively. For a long time, the UK entrenched its dishonesty principle in the two-step Ghosh test, where the defendant is able to vindicate himself with a subjective test on the objective test for the act.1 However, in 2017, the UK Supreme Court seemed to take a different route in Ivey v Casinos (“Ivey”)2. In that case the UK Supreme Court seemed to have ruled that the test for dishonesty should be an objective test of the person’s act. This article will discuss the salient aspects of Ivey and how it will affect offences that pertain to dishonesty in the UK. This article will also present a comparative analysis of this development to the current Singapore standpoint on dishonesty, based on section 24 of the Penal Code, and a case of criminal misappropriation of property, under section 403 of the Penal Code, Wong Seng Kwan v PP (“Wong Seng Kuan”)3. To scope this essay, the principle on dishonesty that this essay would focus on is on the criminal law effects.

Ivey v Casinos Before critically analysing the case this article will lay out the salient points of the case. This section will also lay out the judgment and reasoning of the UK Supreme Court. A. Facts

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advantage over the casino, when the two parties are not on equal terms, did not amount to cheating as it is not dishonest. The judge at first instance denied the claimants on the basis that he had breached the implied term of the contract, and the Court of Appeal upheld this judgment. B. Supreme Court Judgment The Supreme Court dismisses the claim, but takes a different reasoning standpoint. This first is that, disregarding the evidentiary proof difference between a civil and criminal claim, the notion of cheating in both context should carry the same meaning. Lord Hughes reasoned that adding the notion of dishonesty would “unnecessarily complicate” the situation, essentially “legitimise the illegitimate”.5

Ivey: Lord Hughes’ Reasoning Agaisnt Ghosh Whilst his judgment seemingly has nothing to do with the notion of dishonesty, which he has disregarded, Lord Hughes then went on to discuss the Ghosh test in obiter. His first criticism of the test is that firstly, the occasion of the test had nothing to do with the facts of the case.6 He then discussed how the case seemingly tried to have a compromise of the fact that there were a slew of cases pre-Ghosh that were confusing as to whether the test for “dishonesty” is meant to be objective or subjective.7 He then raises six criticisms of the second limb of the Ghoshtest but ultimately discussing the “principle objection” of the test; which is that “the less the defendant’s standards conform to society in general expects, the less likely he is to be held criminally responsible for his behaviour”.8

The claimant in this case, a professional gambler, had won a total of £7.7m at a Baccarat-type game using a method known as “edge-sorting”, giving him an advantage that was not available to the other players and the casino itself. The defendant, the casino, denied the claimant of his winnings, claiming that his acts had: (a) breached the implied term of the contract of not cheating; and (b) had committed an offence under section 42 of the Cheating Offences Act4 and therefore was not entitled to the winnings he had gained through the act of cheating. Whilst the first aspect was accepted by the claimant, he vehemently denied the second, stating that taking an

However, it is Lord Hughes’ criticism against the second limb of the Ghosh test that is pertinent to this discourse, and which could be listed into a couple of factors. Firstly, he reasons that the function of criminal law is to determine which set of behaviour is criminal and what is not, essentially “setting the standards of behaviour that is acceptable”.9 The second limb of the Ghosh test would allow for the subjectivity of intention, which arguably is unique to each person, to determine the criminality of the act, a convenient loophole and one that allows for 5

Ivey (op cit n 2) at [49].

R v Ghosh [1982] 3 WLR 110.

ibid at [55].

Ivey v Casinos [2017] 3 WLR 1212.

Ivey (op cit n 2) at [56].

Wong Seng Kwan v PP [2012] SGHC 81.

ibid at [57]-[58].

Cheating Offences Act 2005.

ibid at [59].

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disastrous results if it exculpates those with significantly different standards to society. Secondly, Lord Hughes reasoned that the main reason for the second limb to exist, which is the courts’ willingness to compromise in order to preserve the principle that the criminal responsibility for dishonesty must exist in the actual state of mind of the defendant, is already dealt with first limb of the test.10 If the defendant’s mind genuinely did not actually think that based on the facts, including the law and objective reasoning, would render his act to be criminal, then the person would objectively not be dishonest. His last criticism is that the Ghosh test was a divergence of the law, both of the UK Courts jurisprudence postTheft Act and the principle of dishonesty in civil law. On the jurisprudence point, Lord Hughes’ point, other than the fact that it has been inconsistent, is that the relevance of the defendant’s subjective view of dishonesty was in the case of R v Gilks11, where the case is predicated on the defendant’s knowledge of the mistake by the victim and whether it was dishonest for him to not raise the mistake.12 However, his point on divergence is more important in this discourse. Lord Hughes reasoned that the idea of “dishonesty” is not exclusive to criminal law, and draws comparison to the idea of dishonesty in civil law.13 His conclusion was that the second-limb of the Ghosh test does not represent the current law.14

Critical Analysis This section will discuss Lord Hughes’ obiter reasoning that had, in essence, overruled the second limb of the Ghosh test. The first two parts will look specifically at his reasoning and the last part would focus on the jurisprudential aspect of his reasoning.

and second limb of the Ghosh test. The significance is that the first limb of the Ghosh test is entirely objective and the defendant not appreciating the illegality of the facts or his actions does not absolve his actions just based on the first test. The objective test only decides if the action(s) is dishonest based on a reasonable man’s test and has nothing to do with the mind of the defendant. Thus, if only the first limb of the Ghosh test existed, the test would not even consider the subjective nature of the defendant’s mind. It is for this very fact that the second-limb of the test exist to vindicate the defendant if the defendant did not appreciate that his acts were dishonest. These aspects show that Lord Hughes’ reasoning did not really appreciate the relationship between the first and second limb of the Ghosh test. B. Civil Courts vs Criminal Courts? Another interesting aspect of Lord Hughes’ reasoning was that he drew parallels to civil law cases, reasoning that dishonesty is not unique to criminal law. He then reasoned that the test for dishonesty in civil law is characterised as objective.16 He then reasoned that although the ratio should be confined to their decision in civil cases. He also reasoned that there is “no logical or principled basis for dishonesty to differ according to whether it arises from a civil action or a criminal prosecution”.17 He also backed his reasoning with a fairly recent case18 where Leveson LJ highlighted that there is a discrepancy between criminal and civil law on the standard of dishonesty and that review is called for. Even in that case, the standard was deemed to be objective. This line of reasoning seems to make sense for the fact that the law should be certain, be it in criminal or civil cases.

A. Lack of Appreciation for Subjective Criminality It appears from Lord Hughes’ reasoning that he did not appreciate the reasoning for the subjective criminality in Ghosh. Although he quotes the example used by the courts in Ghosh15 with regards to an example of subjective dishonest opinion, he just dismisses the second limb test by saying that the objective first limb would have dismissed the defendant’s guilt if the defendant’s mind did not register the facts. This reasoning could be argued as a lack of appreciation as it does not fully understand the full significance for the relationship between the first 10

Ivey (op cit n 2) at [60].

R v Gilks [1972] 1 WLR 1341.

Ivey (op cit n 2) at [73].

ibid at [62].

Ivey (op cit n 2) at [74].

Ghosh (op cit n 1) at 1063.

However, it could be argued that the principle for criminal and civil law should be different. Firstly, as Lord Hughes admitted, the burden of proof would be different. Secondly, the consequences of criminal and civil cases are very different, where one could amount to criminal records or imprisonment and the other would amount to damages. William Blackstone, in his commentary about the law, argued, “the law holds better that ten guilty persons escape, than that one innocent party suffer”.19 This principle should show that the law, especially for criminal law, should be higher, even if only because it would be enough to protect any innocent from a 16 Per Barlow Clowes International Ltd v Abacha (“Barlow Clowes”) [2007] 102. 17

Ivey (op cit n 2) at [63].

Starglade Properties v Nash [2011] Llyod’s Rep FC 435.

19 William Blackstone, Commentaries on the Laws of England (1765-9).

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possible criminalisation. Following from the premises above, it could be a logical argument that the criminal law standard, both in evidentiary standards and the law, should be higher than civil law. C. Obiter, Yet Binding? The next interesting point is that Lord Hughes’ reasoning in Ivey is merely obiter and should only persuasive in the following cases. However, this is not really the case for a Supreme Court judgment, where a judgment could carry ripples in the law. Furthermore, the other judges agreed with Lord Hughes judgment on the panel, which would have further effects on the law. Ironically, an example could be drawn from Lord Hughes’ reasoning in Ivey, where he drew the objective civil standard for dishonesty from the case of Barlow Clowes. The principle from that case has its principles from the reasoning of Lord Hoffmann, who was in Barlow Clowes, in Twinsectra20. Twinsectra is a Privy Court judgment where Lord Hoffmann’s reasoning was not challenged by the panel of judges. Even though the judgment is not binding in the UK Courts, the reasoning did no doubt have an effect on the law after the judgment. Arguably, the same could be said about this current case. Whilst its ratio is about civil liabilities, the Lord Hughes’ obiter, from the aspects argued above, would have widespread effect on criminal law. The lack of a dissenting judgment shows that the Supreme Court has agreed on the formulation of the law, as pronounced by Lord Hughes in the case. The above factors show that even though Ivey is not a criminal case, its judgment would affect criminal cases, especially if one were to make its way back to the Supreme Court. Therefore, it is interesting that Lord Hughes’ reasoning in Ivey would have an effect on the principle of dishonesty in criminal law.

Singapore’s Standpoint on Dishonesty This chapter would focus on how Singapore, both in legislation and jurisprudence, have developed on the principle of dishonesty. This chapter would focus on two things, the encoded Penal Code and a recent case of Wong Seng Kuan. As a starting point, the criminal law in Singapore is entrenched in the Penal Code.21 For the principle of dishonesty, it is defined in s 24 of the Penal Code, where it is stated that; “intention of causing wrongful gain to one person, or wrongful loss to another person, is said to do that thing dishonestly”.22 Section 24 of the Penal Code, on the definition of wrongful gain and loss, is

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elaborated by section 23 of the Penal Code, where it is stated; “Wrongful gain” is gain by unlawful means of property to which the person gaining it is not legally entitled; “wrongful loss” is loss by unlawful means of property to which the person losing it is legally entitled.23 Even from the language used in the legislation itself, it could be argued that the test for dishonesty in Singapore is set out to be an objective standard. The focus of the legislation could be said to set the threshold to be about the legal ownership of the property. The gain and loss of the property were tagged to the legal entitlement of the property. Legal entitlement has nothing to do with subjectivity, as one only needs to look at the legal ownership of the property that requires no subjective perspective to determine. A. Wong Seng Kwan This case involved an offence, involving a criminal misappropriation of property, punishable under section 403 of the Penal Code. The reason this case is significant to the discourse is that the threshold for a conviction based on the mens rea is dishonesty, as defined under section 24 of the Penal Code. Therefore, the reasoning for this case, as delivered by Chong J, is very significant for the comparative analysis between UK and Singapore standpoint. The first significance of Chong J’s reasoning is the language used to colour the manner of determining intention. He first cited Yong Pung How CJ’s reasoning in Tan Tze Chye v PP24, where the CJ (at the time) reasoned that the term misappropriation “must be done dishonestly”.25 Chong J then reasoned that the term misappropriation “conveys an element of wrongfulness… it seems to be tautologous to qualify it with the word ‘dishonestly’”.26 This line of reasoning seems to suggest that the standard for mens rea for a crime involving dishonesty is judged with moral tinted glasses. The fact that Yong CJ reasoned that the only reason for the act to be criminal is a degree of wrongfulness and that degree is down to the fact that there is an element of dishonesty. Even in the present case, Chong J reasoned that the mere term of “misappropriation” contains an element of wrongfulness that differentiates itself from mere “appropriation”.27 This would raise some alarm bells if the Singapore Courts were placing moral thresholds on criminalising an act. However, this analysis on the reasoning in both cases is highly one-dimensional and does not take into account what wrongful actually means 23

Penal Code, section 23.

Tan Tze Chye v PP [1997] 1 SLR(R) 876.

Twinsectra Ltd v Yardley [2002] 2 AC 164.

ibid at [37].

Penal Code (Cap 224).

Ivey (op cit n 2) at [54].

ibid, section 24.

ibid at [54].

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in the Penal Code. A closer analysis of Chong J’s reasoning reveals that the Courts just used an objective test, using both section 23 and 24 of the Penal Code, to determine the mens rea element of the criminal act. He reasoned that the mere act of “appropriation” is not enough and only the objective element of intent to make a property that the victim has legal ownership their own would be considered as “misappropriation”. This is the objective standard that the Singapore Courts set for dishonesty, which is the objective transfer of possession tinted, either rightfully or wrongfully, based on an objective legal ownership of the object. B. Comparing Singapore and UK Comparing the Singapore and UK standpoints on dishonesty, it could be argued, although both are objective, are also very different. Even before Ivey, the Ghosh test did focus on the wrongfulness of the act but based on the yardstick set by the reasonable man. The Ivey test did essentially overrule the Ghosh test, but it did not remove the objective yardstick set by the reasonable man, it only removed the subjective second limb test. Therefore, the UK’s standpoint on dishonesty is still based on the reasonable person’s viewpoint on the actual act. Singapore’s standpoint is actually more objective, as it focuses on the legal ownership of the property. This can be seen from section 23 of the Penal Code, where the language focused on the legal entitlement of the property. Legal entitlement could be argued as the purest objective measure of whether someone’s intention was dishonest or not. Therefore, it can be conclusively said that the UK and Singapore standpoint on the principle of dishonesty, even after Ivey, is still very different. C. Which Way Forward? At this juncture, this article will focus on which standpoint each of the Courts should take, essentially an analysis of the pros and cons of each standpoint. The UK Courts, with Ivey, tried to make the law on the principle more objective and therefore more certain. It also removes the evidentiary problem of proving the specific mens rea of the defendant, the problem with the second limb of the Ghosh test. This eases the high threshold of the subjective test, for the prosecution to be able to prove that the defendant had dishonest intent. However, it could also be argued that the courts still have a big say on the objective threshold. Due to the fact that the objective standard is still based on the act, this still requires the Courts to decide the threshold, which still underlines some uncertainty to the law. A final criticism

could be argued to be the shifting of what the defendant has to prove. Using the Ghosh test, the issue is if the defendant appreciated the dishonest nature of their act. With Ivey, the question is whether the defendant should have appreciated the dishonest nature of the act. This shift could potentially still add some uncertainty, both because of the civil nature of the case competing against its jurisprudential nature of being a Supreme Court judgment with no dissenting judgment. With the Singapore standpoint, it is the most certain manner of determining dishonesty. The only possible uncertainty could be if the legal entitlement to the property could not be ascertained. However, it could be argued that this objective test also has its pitfalls. Firstly, it could be argued that this principle lowered the threshold of the mens rea element of dishonesty to the lowest possible level. As long as the prosecution can prove that the intent to make a wrongful gain or loss was present, the defendant was dishonest. This lowering of the threshold could also be argued that section 24 of the Penal Code does not actually refer to dishonesty which arguably should contain a malicious intent of some kind. If the prosecution only needs to prove some intent for gain or loss, it is possible that there was never any malicious intent by the defendant, which could inculpate innocent intent. Therefore, it is of this author’s opinion that there is a multitude of pros and cons to both standpoints. However, this author would also like to argue that a solution could be combining both methodologies. Singapore’s standpoint should be starting point for criminal prosecution, so as to allow a more certain application of the law. Then, the UK’s standpoint could be given to the Courts to be able for the Courts to exercise its discretion to prevent any innocent intent that section 24 of the Penal Code might inculpate.

Concluding Remarks This article first presented how the judgment in Ivey, though in obiter, essentially overruled the second-limb of the Ghosh test, and therefore changed the UK’s principle on dishonest intent. This article also presented and analyse the Singapore standpoint on dishonest intent, based on section 24 of the Penal Code and a case on section 403 of the Penal Code, Wong Seng Kuan. It then compared the two standpoints and lastly made the argument on the way forward. As a concluding remark, this author would reemphasise his argument that the law should incorporate the purely objective Singapore standpoint and the UK standpoint to allow the Courts’ discretion to preserve the criminal principle of not inculpating the innocent. 111

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Homicide Law: A Comparison A Critical Comparative Analysis and Assessment of United Kingdom and Singapore Homicide Law Against Criminal Law Principles Joshua Wang, University of Oxford

Introduction Homicide is a category of offences to which the harshest penal sanctions traditionally apply – in Singapore, murder carries either a mandatory (section 300(a) of the Penal Code) or discretionary (section 300(b)-(d) of the Penal Code) death penalty, and, in the UK, a mandatory life sentence. The social stigmatisation that comes from being labelled as a killer is also particularly harsh. For these reasons, it is an area of law where fidelity to the underlying principles of criminal law is essential, for any detraction could mean significant injustice. To begin, it may be worthwhile to note the fundamental differences in the way the law of homicide is structured. In both jurisdictions, homicide exists as a category of various offences in a hierarchy of severity, with murder being the most serious offence. However, murder in Singapore has a comparatively broader scope, with section 300(a)-(d) of the Penal Code encompassing a broad array of mens rea constituting murder, while in UK it is restricted to where the defendant intended to kill or cause grievous bodily harm.1 The successive degrees of homicide are culpable homicide (section 299 of the Penal Code) and causing death by a rash or negligent act (section 304A of the Penal Code) in Singapore, and voluntary and involuntary manslaughter in UK. Various other offences such as infanticide or abetment of suicide exist in both jurisdictions but will not be discussed in this essay owing to their relatively uncontroversial nature. In assessing the law, the benchmarks and ideals that we ought to hold the law to should be made clear. Firstly, the criminal law is not only directly punitive, it also attaches the label of criminality to defendants. To that end, the principle of fair labelling demands that widely felt distinctions between kinds of offences and degrees of wrongdoing are respected and signalled by the law, and that the offences are subdivided and labelled so as to represent fairly the nature and magnitude of the lawbreaking.2 Secondly, proportionality as a fundamental principle requires that the crime reflects the seriousness of the offence, with respect to both the consequences 1

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R v Cunningham [1982] AC 566.

2 Andrew Ashworth and Jeremy Horder, Principles of Criminal Law (7th edn, OUP 2013).

of the offence, and moral culpability of the defendant. Finally, rule of law dictates that individuals must be governed by concrete rules that deliver maximum certainty. As Lord Bingham opines, no one should be punished under a law unless it is sufficiently clear and certain to enable him to know what conduct is forbidden before he does it. On this basis, this essay will venture into four areas of analysis – constructive liability in the law of homicide, the mens rea of intention, the offences of rash and negligent manslaughter and partial-defences. In general, this essay does not attempt to yield a unified conclusion. Rather, it is hoped that a cross comparison will generate enlightening and useful ideas that contribute towards improving the law on homicide in both jurisdictions.

A Comparison Across Constructive Liability Constructive liability has long been a controversial form of liability in criminal law; it builds a greater crime out of a lesser one and makes a defendant who is already guilty of a criminal offence liable for a more serious one if his initial crime has certain consequences, even if he did not intend or foresee them. It therefore leans in favour of a consequentialist approach to liability,3 and in the context of homicide law, this takes the form of offences not requiring a specific mental state with respect to causing death. (i) The Normative Debate Before assessing the law, it is worthwhile to examine the doctrinal debate surrounding constructive liability. The justificatory basis for constructive liability lies in the idea that anyone who decides to transgress the criminal law crosses a crucial moral threshold and changes his normative position with respect to the law. His conduct would incur sufficient moral culpability to justly hold him liable for unintended and unforeseen consequences attached to his initial act of criminality.4 Particularly, where constructive liability is confined to resulting harms in the 3 ‘Why actions matter to the criminal law’ mcbridesguides (14 September 2013) <http://mcbridesguides.com/category/criminal-law/criminal-law-theory> accessed on 5 June 2018. 4 Andrew Ashworth, “A Change of Normative Position” (2008) 11 New Criminal Law Review 232.

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same “family of offences”, the role of outcome luck is minimal, and the imposition of liability is arguably fair. The spectre of serious criminal liability dependent on unforeseen consequence would also deter defendants from committing unlawful and dangerous acts to begin with. However, abolitionists retort that in criminal law, the fault element of the crime must correspond with the conduct element. The principle of autonomy holds individuals to be deliberative, choosing persons, whose moral culpability only extends to them being held criminally liable for consequences that they knowingly brought about or risked bringing about.5 More fundamentally, it is observed that mens rea is in effect at the normative heart of criminal censure. Children and the insane are not punished on the basis that they are not responsible agents, and the universal differentiation in severity between causing death by road accidents, and deliberative murder, despite them being consequentially identical, is testament to the primacy of mens rea and blameworthiness. The corollary is that holding a defendant liable for a consequence neither intended nor foreseen or known is unjust, and may lead to concerns of fair labelling and proportionality. Hence, on the battle of normative principles, the tradeoff takes place between the potential injustice due to the chasm between the severity of the offence and blameworthiness of the defendant, and the practical need to deter individuals from crossing the moral threshold of criminality. The question is, therefore, how this plays out in the law of homicide in either jurisdictions. (ii) An Assessment of the Law Benign forms of constructive liability exist in both jurisdictions. In UK, R v Cunningham6 held the mens rea required for murder to be an intention to kill or cause grievous bodily harm, defined to be ‘really serious harm’7. Hence, while the actus reus of the offence is to cause the death of another, a mens rea relating to something less will suffice. In Singapore, a similar form of liability can be found in section 299, providing that a defendant can commit culpable homicide if he causes death with the intention of causing such bodily injury as is likely to cause death. These are benign constructive liability because of the degree of proximity between the required mens rea, and the criminal offence. Grievous bodily harm and bodily

injury as is likely to cause death are both universally appreciated to be foreseeable and immediate causes of death, and the lack of mens rea as to death while intending such serious harm in itself is constitutive of a lack of moral consideration for the victim. Consequently, the close nexus between the degree of blameworthiness and the consequence would tilt the balance in favour of the need to deter potential wrongdoers from causing serious harm carrying a risk of death. Here, the law of both jurisdictions is justifiable. However, where the gap between legal liability and degree of moral culpability is great, there may be room for concern. In Singapore law, constructive liability ostensibly includes murder as per section 300(c) of the Penal Code, where a defendant can be liable for causing death with the intention of causing bodily injury to any person, and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death. There is no requirement that the defendant had intention for the injury to be sufficient in the ordinary course of nature to cause death, nor that he had sufficient medical knowledge that the injury would indeed lead to death. In this offence, the possibility that skilful and efficient medical treatment might prevent the fatal result is wholly irrelevant.8 Its distinction from section 299(2) is twofold – firstly, it requires a lower threshold of probability, and secondly, it gives rise to the much more serious offence of murder. In the UK, similarly, the law of constructive manslaughter in the UK holds a defendant liable where he has committed any unlawful act which is criminal per se, and objectively dangerous from the perspective of an ordinary person invested with knowledge possessed by the defendant, causing the death of a victim.9 This gives the offence an expansive ambit to the offence, as exemplified by the case of R v Mitchell,10 where a defendant who hit an old man in a dispute, who fell back into a queue causing an elderly lady to fall, break her leg and eventually die, was held liable for constructive manslaughter. The common feature of the aforementioned laws is a great disparity between the mens rea possessed by the defendant, and the consequent offence he would be held liable for. In particular, section 300(c) would have the effect of making anyone willing to cause violent physical harm a murderer, contingent upon the arbitrary moral luck of human anatomy and medical assistance. In PP v Lim Poh Lye,11 a defendant who stabbed a victim in the thigh, severing a femoral artery that led to death, was held liable under section 300(c) despite neither intending

5 Andrew Ashworth and Jeremy Horder, Principles of Criminal Law, (7th edn, OUP 2013) 73.

Kishore Singh V/s. State Of M.P., 1977 4 SCC 524.

A-G Ref No. 3 Of 1994 [1997] 3 All ER 936.

[1982] AC 566.

[1983] QB 741.

DPP v Smith [1961] AC 290.

[2005] 4 SLR(R) 582, [2005] SGCA 31.

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or knowing that death could result. In PP v Tan Joo Cheng (“Tan Joo Cheng”),12 the Court of Criminal Appeal went so far as to say even an accused intending to inflict only a relatively minor injury, if the injury he in fact inflicted met the requirements of section 300(c), he could be convicted or murder. Similarly, unlawful act manslaughter has the capacity of rendering petty criminals liable for a death caused. In R v Watson,13 a burglar was held liable for the death of the 87-year-old occupant from a coronary heart attack induced by the burglarious entry. The imposition of constructive liability in these cases is problematic for two reasons. Firstly, the chasm between blameworthiness and the offence gives rise to substantial injustice. It labels as murders and killers on individuals who are in truth moderately violent or petty criminals who are otherwise unlikely to kill. This is particularly egregious given the severe social stigmatisation attached to homicide offences. Hence, despite the low sentencing threshold for constructive manslaughter in the UK, constructive liability remains problematic. Section 300(c) of the Singapore Penal Code also constitutes an affront to proportionality, given the conviction for murder, and the accompanying death penalty or life sentence. Secondly, where the consequence of causing death is a distant and unforeseeable consequence of the initial wrongdoing, it is doubtful whether any significant deterrence effect is served. (iii) Conclusion Though the benign forms of constructive liability in homicide law across both jurisdictions are arguably justifiable, the same cannot be said for section 300(c) of the Singapore Penal Code and constructive manslaughter in the UK. Both are affronts to the ideals of autonomy, and the moral content of the law in basing punishment on the blameworthiness of the defendant. In particular, section 300(c) is, in addition to being unjust, also unnecessary, given that the same defendants can generally be caught by section 299(2). In the delineation of the distinct degrees of homicide, it is clear that the content of section 300(c) is much more appropriately categorised culpable homicide rather than murder.

Intention in the Law of Homicide The law of homicide is one where intention takes primacy. In section 300(a)-(c) of the Singapore Penal Code, as well as murder in English law, intention to kill or cause some degree of physical injury is a core constitutive requirement. Yet, there is considerable controversy and uncertainty as to the meaning of intent.

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[1992] 1 SLR(R) 219, [1992] SGCA 12.

[1989] 2 ALL ER 865.

At the core, direct intention carries the connotation of purpose or aim. In Bhagwant Appaji v Kedari Kashinath,14 it is said that ‘intent’, by its etymology, seems to have metaphorical allusion to archery, and implies ‘aim’ and thus connotes the one object for which the effort is made. In UK, direct intent is left in its ordinary meaning to the jury,15 with the Law Commission defining it as ‘acting to bring something about’. However, oblique intent, which equates virtually certain foreseeability of a consequence as intent, complicates the picture, and it is the primary focus of this section. (i) Oblique Intention – A Normative Examination Commentators such as Glanville Williams have been ardent proponents of the inclusivity of oblique intention as part of intention in the law, arguing that there should be no legal difference between desiring or intending a consequence and persisting in one’s conduct with knowledge that the consequence will inevitably follow from it, though not desiring that consequence.16 The rationale for this appears to be that oblique intention is sufficiently proximate to the moral wrong of direct intention that any distinction would only be merely conceptual and substantively empty.17 A standard hypothetical is the case of the aeroplane bomber, who plants a bomb on an aeroplane with the intention of carrying out insurance fraud by blowing up his insured goods on the plane, but does not desire the death of the pilot although he foresees it as virtually certain. Here, to not hold that he intended to kill the pilot would seem like an absurdity. However, importantly, the conceptual distinction between foresight and intent is a significant one. John Finnis and Michael Moore18 are proponents for its preservation, arguing that intention is distinct as the most serious kind of mens rea because the actor sought to control and endorse the result, and for that reason side effects are normatively distinct. This is supported by cases of oblique intent where the mental state of a defendant is ostensibly distinct from a common-sensical construction of intent. In the hypothetical of the burning father throwing his baby from the top of a burning building in a last-ditch attempt to save him, despite knowing that it is virtually certain to cause his death, it would be an affront to common sense to hold the father 14

(1901) ILR 25 Bom 202, 206.

R v Moloney [1985] AC 905.

R v Nedrick [1986] 1 WLR 1025.

17 H.L.A. Hart, Punishment and Responsibility: Essays in the Philosophy of Law 120 (2nd edn, Oxford Publications 2008). 18 Michael Moore, Placing Blame: A theory of the Criminal Law (Clarendon Press, 1997); John Finnis, ‘Intention and Side-Effects’, in R. Frey and C. Morris (eds), Liability and Responsibility: Essays in Law and Morals (Cambridge University Press, 1991).

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liable for murder. Similarly, a professor may give a lecture fully anticipating his students to be bored by it, but surely he does not intend for his students to be bored.19 These counterexamples conclusively demonstrate that the philosophical equivocation of virtually certain foreseeability with intention is unworkable. On balance, therefore, despite the philosophical incoherency, there seems to be a compelling moral case for the inclusion of certain cases of oblique intent within the mens rea of intention. As Kaveny questioned, even granting a conceptual distinction between intention and foresight, are they not so related that the law can and should treat them in the same way for all practical purposes?20 Yet, equally, in cases where the outcome is foreseen with virtual certainty, but yet is at moral odds of what the potential defendant is trying to do,21 it would be grossly unjust to hold that there was intention. (ii) The State of the Law In UK law, the position is fairly straightforward. The case of Woollin22 has definitively recognised oblique intent to be part of intention, providing that, in rare cases where direct intent is inadequate, the jury is entitled to find intention of a consequence, barring unforeseen intervention, is a virtually certain result of the defendant’s actions, and the defendant appreciated that such was the case. It is of crucial importance that the jury is ‘entitled’, but not obliged, to find intention, creating discretion and ‘moral elbowroom’ in the application of the rule to accommodate for exceptions. In Singapore law, the picture involves greater uncertainty. The core definition of intent appears to be understood as direct intent, following Indian case law,23 but courts sometimes wanted “intention” to be bear a wider meaning than aim or purpose. It has been suggested that it is indubitable that the intention to cause bodily injury in section 300(c) has the capacity to fall within both direct and oblique intent.24 However, the courts’ approach seems to be quasi-evidentiary, in making virtually certain foreseeability a basis for an inference of actual intention. In Tan Joo Cheng,25 despite the defence contending that the severance of the innominate vein of 19 Jonathan Herring, Great Debates: Criminal Law (3rd edn, Palgrave MacMillan 2015), 50. 20 M. Cathleen Kaveny, ‘Inferring Intention from Foresight’, [2004] L.Q.R. 81, 81. 21

A. Norrie, ‘After Woollin’ (1999) Crim LR 532.

R v Woollin [1999] AC 82.

Jai Prakash vs State (Delhi Administration) [1991] SCR (1).

24 Nathan-Ganesh, Rathna Devi D/O, Moralising Section 300(c) of the Singapore and Indian Penal Code: A Conceptual Analysis (2010), 52(2) JILI 145, 158. 25

(n 12).

the victim was unintended, the court found intent based on the depth and track of the wound, and the fact that it was inflicted on the neck. In other words, it appears that the court regarded the consequence as so immediately and intricately connected to the criminal act that the difference was merely conceptual. Likewise, in Tan Cheow Bock,26 the court held that the stab wound to the mouth, severing the internal carotid artery, was intended by the appellant on the basis of the tremendous force used and surrounding circumstances, implicitly appealing to the notion that a man intends the natural and probable consequences of his act. The difference in approach in the law of the two jurisdictions provides a good basis for comparison. While the approach of UK courts is to directly classify oblique intention as within the ambit of legal intention, and then provide discretion and wiggle room for the jury, that of Singapore is a general fidelity to the philosophical distinction, while relying on evidentiary inferences to find direct intention where the courts deem it necessary. In the end, it is perhaps the case that neither is satisfactory. UK law ignores the important conceptual distinction between foresight and intent, and in so doing damage the coherency of the law on mens rea. That the rule is permissive rather than obligatory in nature hints the existence of some undefinable notion of intent that juries have to figure out their own. On the other hand, the approach of Singapore courts to use virtually certain foreseeability as a quasi-evidentiary tool for finding intention also conflates the two in a different way. There are surely circumstances where such an inference would be illegitimate, and the defendant in fact did not intend the consequences. It is unclear what courts would do in that circumstance, and clarification is sorely needed in the interest of the rule of law. In fact, the Singapore law on homicide is an interesting commentary in itself on the moral proximity between foresight and direct intention. The Penal Code classifies within the offence of murder both causing death with direct intent to kill27 and where the offender intentions to commit a bodily injury that he knows to be likely to cause death,28 or if the person committing the act knows that it is so imminently dangerous that it must in all probability cause death, or such bodily injury as is likely to cause death.29 It acknowledges the fundamental distinction in moral culpability by preserving the mandatory death penalty only for section 300(a), while holding a high degree of foreseeability as indicative of sufficient 26

[1991] 2 SLR(R) 608.

Penal Code, s 300(a).

ibid, s 300(b).

ibid, s 300(c).

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moral culpability to suffice for classification as murder. This is the perhaps the most conceptually sound way of understanding and classifying the law on indirect intention – to recognize a high degree of foreseeability as an intermediate category between direct intent and recklessness, but sufficiently morally proximate to direct intent to be classified within the same category of offence, with differences reflected at the sentencing stage.

of damage or injury to others’.

(iii) Conclusion

It will be argued that the test for rashness or recklessness ought to be purely subjective. The foremost proposition is that, where the defendant foresees a risk and takes it anyway, there is a clear exhibition of a lack of moral consideration for the victim, while in contrast, those who fail to appreciate the existence of risk may merely be guilty of a lack of awareness and fastidiousness, which should not suffice for the incurrence of criminal liability. Crucially, inadvertent recklessness or rashness can involve varying degrees of moral culpability, and not all of them are deserving of criminal sanction. An objective test that pays no heed to the individual characteristics of defendants can be egregiously unfair, particularly where the defendant inherently lacks the capacity to appreciate the risk, as in R v G itself.

While the law on intent can be critiqued for being unsatisfactory, in reality it may be impossible to achieve a fully coherent normative position in the law of indirect intention, at least for now. The Singapore law on murder provides an interesting case study on the underlying moral intuitions behind the distinction between foresight and direct intent and indicates that perhaps the answer lies in the creation of an intermediate category of mens rea.

The Law of Causing Death by Rash or Negligent Act, and Reckless and Gross Negligence Manslaughter (i) Causing Death by a Rash Act and Reckless Manslaughter In Singapore, section 304A of the Penal Code grounds liability for causing death by any rash or negligent as culpable homicide not amounting to murder. The parallels in UK law take the form of reckless and gross negligence manslaughter. For causing death by a rash act, of particular interest is the mens rea required for the offence. The position of the law, as described in Ng So Kuen Connie v PP,30 is that the test for determining whether an appellant had the requisite mens rea is partly objective and partly subjective. The subjective element was described in the landmark case of Re Nidamarti Nagabhushanam31 as ‘acting with the consciousness that the mischievous and illegal consequence may follow, but with the hope that they will not’. However, the court had at various times ventured into an objective test of rashness, rather like the test of ‘obvious and serious’ risk that prevailed for some years in the UK following MPC v Caldwell.32 In S Balakrishnan v PP,33 referencing Ng Keng Yong v PP at [88], the court held that section 304A merely required the court to consider whether ‘a reasonable man in the same circumstances would have been aware of the likelihood

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In contrast, UK law following the House of Lords decision in R v G & R (“R v G”),34 which overturned Caldwell, takes a strict approach that recklessness can only be advertent, necessitating that the defendant actually foresees a risk. In reckless manslaughter, therefore, the defendant must have been conscious of the risk of serious harm or death.35

Hence, on this basis that the Singapore law on causing death by a rash act has ventured into an objective test for mens rea is regrettable. It is also the case that, given the uncertainty as to what the ‘partly objective and partly subjective’ encompasses, the predictability of the law is undermined. (ii) Causing Death by a Negligent Act and Gross Negligence Manslaughter The core similarity between the Singapore and UK offences here is that neither is dependent on the existence of fault or wrongdoing. In Singapore law, re Nidamarti Nagabhushanam36 held that culpable negligence is acting in circumstances which show that the actor has not exercised the caution incumbent upon him, and that the imputability arises from the neglect of the civic duty of circumspection. The case of R v Adomako37 in UK law on the other hand established the test for gross negligence manslaughter as incumbent upon a breach of a duty of care that was so serious as to the risk of death that it should be criminal. However, the crucial distinction lies in the standard of negligence required for criminal sanction. In UK, only

[2003] 3 SLR 178 [45].

[2003] 3 WLR 1060.

(1872) 7 MHCR 119, 120.

R v Lidar, unreported, 11 November 1999.

[1982] AC 341.

(n 31), 120.

[2005] 4 SLR 249.

[1994] 3 WLR 288.

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gross negligence would suffice. In R v Bateman,38 it was held that it must have been carelessness that went ‘beyond a mere matter of compensation between subjects and showed such disregard for the life and safety of others as to amount to a crime against the State and conduct deserving punishment’. This was reinforced in Adamako, describing the necessary conduct as being so bad in all the circumstances as to amount to a criminal act or omission. On the other hand, while the standard of gross negligence was applied at one point in Singapore law,39 negligence now means ordinary negligence to the civil standard of care,40 and both ‘gross’ and intermediate standards are decisively rejected in Singapore.41 As a result, the standard for criminality in causing death by a negligent act is set worryingly low. The civil standard for breaching the standard of care is arguably far from sufficiently egregious to deserve criminal punishment, contravening the principle that the criminal law should only be used to censure persons for substantial wrongdoings.42 It would have the effect of making criminals out of people who have no idea that they may cause harm to others by their conduct. Particularly given that the offence sets a strictly objective standard that does not rely on advertent fault, the bar should be set high to avoid unnecessarily draconian punishment. Despite that causing death by a negligent act only carries a maximum 2-year sentence, the concern of fair labelling still persists. Hence, in this respect, the standard of gross negligence adopted by UK law is more normatively appropriate for criminal censure.

Exceptions and partial-defences to murder In both jurisdictions, there exist exceptions or partialdefences that would render what would otherwise amount to murder to culpable homicide, and voluntary manslaughter. The underlying rationale appears to be that the law ought to recognize particular circumstances that mitigate the wrongfulness and severity of the offence. In Singapore, seven exceptions are set out in section 300 of the Penal Code, while in UK, the only three partial defences are that of the loss of control, diminished responsibility and suicide pact, of which the former two are shared by both jurisdictions. (i) Loss of self-control The loss of self-control partial defence is arguably the 38

(1925) 19 Cr App R 8.

Cheow Keok v PP [1940] MLJ 103

40 Woo Sing and Sim Ah Kow v R [1954] MLJ 200; Mah Kah Yew v PP [1969-1971] SLR 441. 41

Lim Poh Eng v PP [1999] 2 SLR 116.

42 Andrew Ashworth and Jeremy Horder, Principles of Criminal Law (7th edn, OUP 2013).

most prominent exception. It was significantly reformed by the Coroners and Justice Act 2009 (“CJA”) in the UK. As the law currently stands, the doctrine in both jurisdictions share certain core similarities – that the provocation must not be voluntarily sought by the defendant as an excuse for violence, and that it must cross a certain threshold of gravity or severity. However, the core distinction now is that the Singapore exception requires the provocation be sudden in section 300, while section 54(2) of the CJA in UK explicitly does not. The rationale was articulated by Lord Judge CJ in R v Dawes43 – a reaction to circumstances of extreme gravity may be delayed and that different individuals in different situations do not react identically, nor respond immediately. This is particularly important in light of potential gendered differences in the response to a serious wrong. Battered women are sometimes said to exhibit a ‘slow-burn reaction’ and are driven to a tipping point only after a long history of abuse. It is argued that they are no less deserving of the defence than men who react out of instinctive anger.44 Given the lack of any intrinsic reason why a loss of self-control should necessarily be sudden, that it remains a constituent requirement of the Singapore law is problematic. The concern that the killing may take the form of revenge rather than grounded in a loss of self-control can be allayed with a similar provision as section 54(4) in the CJA. Another distinction is that, while in UK law, a qualifying trigger can originate from a third party and not the victim, in Singapore law provocation must come from the victim, with the exception where a third party is killed by mistake or accident. The reluctance to allow the loss of self-control towards a third party as an exception reflects the underlying belief of the illegitimacy of outrage directed at an innocent party. There is moral force in this argument, though on a defendant-centric view of the mitigating force of righteous outrage, it may be arguable that whether the victim is a third party should not make a difference. Either way, the law would not be greatly objectionable. (ii) Further exceptions The categories of exceptional circumstances reducing murder to culpable homicide in Singapore ostensibly outnumbers the UK equivalent. Unique to Singapore are the exceptions45 of (1) exercising in good faith the 43

[2013] EWCA Crim 322.

44 Jonathan Herring, The Serious Wrong of Domestic Abuse and the Loss of Control Defence in Alan Reed and Michael Bohlander (eds), Loss of Control and Diminished Responsibility: Domestic, Comparative and International Perspectives (Ashgate Publishing Ltd 2011). 45

(n 27), s 300

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right to private defence and exceeds the power given to him by the law, (2) a public servant, or another aiding a public servant acting for the advancement of public justice, exceeds the powers given by law while acting in good faith, and believing the act to be lawful and necessary for the due discharge of his duty, (3) caused the death of another without premeditation in a sudden fight in the heat of passion, without the offender having taken undue advantage or acted in a cruel or unusual manner, (4) where the victim, being above the age of 18 years, consented to death or the risk of death, and (5) of a mother killing her child while the balance of her mind was disturbed by reason of her not having fully recovered from the effect of giving birth to the child or by reason of the effect of lactation. That Singapore recognises a great many more attenuating factors raises the natural question of whether they are legitimate and important ones. Exceptions (1) and (2) are recognitions of the potency of good faith and belief in a legal justification in the reduction of moral culpability. It seems indubitable that one using disproportionate force in the exercise of private defence or a public duty is less blameworthy than ordinary forms of murder. (3) bears a high degree of similarity to the loss of self-control, in reliance of the proposition that sudden, instinctive and irrational acts are less blameworthy than deliberative ones, and therefore appears justifiable as well. (4) is arguably based upon similar considerations as the suicide pact partial defence in UK law; in that the killing of a consenting party is much less heinous, given that the defendantâ&#x20AC;&#x2122;s actions may come from a place of indifference or even good-will, rather than viciousness. Lastly, (5) is premised upon the psychological consequences of childbirth; the core idea being it is something beyond the rational control of the mother. It seems relatively unobjectionable as well. On the whole, therefore, the extraneous exceptions in section 300 of Singaporeâ&#x20AC;&#x2122;s Penal Code are generally sound, and doctrinally justifiable. They point to there being more legitimate mitigating circumstances that requires recognition by UK law, particularly where the victim has consented to death or the risk of death, and where the defendant was acting in good faith believing that he is within the ambit of lawful justification, while in fact exceeding the powers granted by the law. However, it may also be questioned whether it is necessary or desirable for the law to make such fine distinctions in moral culpability within a category of offences. In other areas of criminal law, these distinctions are simply reflected in the sentencing process. Perhaps the real problem here is the mandatory life sentence (UK), and the death penalty or life sentence (Singapore) imposed for murder, which removes sentencing discretion, and 118

creates potential for injustice. The real reform would therefore be to allow greater sentencing discretion, although it is unclear if that creates more problems than it solves.

LAW AND SOCIETY

Should the Directors Involved in the City Harvest Church Case be Given Heavier Sentences under Section 409 of the Penal Code? Adelle Yii, University College London

In the infamous case of Public Prosecutor v Lam Leng Hung (“Lam Leng Hung”),1 the Court of Appeal held that the respondents were not liable as ‘agents’ under section 409 of the Penal Code2. This meant that they were spared from potentially heavier sentences, causing many in Singapore to question whether their punishments were severe enough. More crucially, the case embodies an important legal issue, in that the Court considered the meaning of ‘agent’ for the purposes of section 409 of the Penal Code. Indeed, the Court took a narrow interpretation of section 409 by limiting the scope of ‘agents’. This article seeks to consider, first, the implications this decision can have in the future; second, the position in the United Kingdom; and third, which system may be more suitable moving forward. Ultimately, this writer submits that although the United Kingdom’s position provides more room for civil punishments, the law in Singapore can be maintained, as it still punishes those who act in breach of trust, whilst carrying out the intentions of Parliament.

Position in Singapore Criminal breach of trust under section 409 applies to those who act in the capacity of a ‘public servant, or in the way of his business as a banker, a merchant, a factor, a broker, an attorney or an agent’. In Lam Leng Hung, the prosecution appealed on the grounds that the respondents were entrusted with the ‘Building Fund’ of City Harvest Church and acted as ‘agents’ of the Church. The prosecution argued that as members of the Church management board, they should fall within the scope of section 409, allowing for a heavier sentence. The breach of trust found here was the respondents’ use of the Building Fund to purchase shares in Xtron, a company in which the respondents were directors. However, Andrew Phang J, delivering the judgment of the Singapore Court of Appeal, found that section 409 only encompassed persons who are entrusted with property during the commercial activities of their trusted trades or professions, including those who are in the business of agency.3 The respondents were not in the business

of agency, nor did they provide their services to the community at large. The Court further found that since the respondents only had one principal, which was their company Xtron, it would be a stretch to find that they were agents, even if they had been remunerated for their services. As such, the respondents did not come within the scope of section 409 and were not given heavier sentences. This shows that the key element of section 409 is the role in which the respondent is acting and whether that position falls within the list in the section.

Position in the United Kingdom In the United Kingdom, section 4 of the Fraud Act 2006 governs cases of fraud by abuse of position. A person falls within the scope of section 4 if he occupies a position in which he is expected to safeguard the financial interests of another person, dishonestly abuses that position, and intends either to make a gain for himself or another, or to cause loss to another.4 The section applies to both acts and omissions.5 In R v Valujevs (“Valujevs”),6 the United Kingdom Court of Appeal held that section 4 of the 2006 Act was not restricted to situations where fiduciary duties were owed to the victim, although it was necessary to show a breach of a duty that was similar to a fiduciary duty. The central question was whether the defendant can be ‘expected’ to safeguard the financial interests of another, which is to be determined objectively. In Valujevs, the Court found that the defendant, acting as a gang master who had the responsibility of collecting wages for workers, occupied such a position. It is therefore evident that the United Kingdom has adopted a broader interpretation of persons who can be charged for criminal breach of trust by using a definition similar to that of a fiduciary.

Case for a Strict Interpretation of Section 409 In Lam Leng Hung, Phang J confirmed that section 409 is subject to a strict interpretation, such that it only applies to those who are ‘public servants, or in the way of his business as a banker, a merchant, a factor, a broker, an

[2017] SGCA 7.

Fraud Act 2006 (FA 2006) s 4(1).

(Cap 224, 2008 Rev Ed).

ibid, s 4(2).

Lam Leng Hung (n 1) [103]-[106].

[2015] 1 WLR 109 [43]-[45] (Fulford LJ).

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attorney or an agent’. The definition of agent, which was in contention in this case, was further narrowed by the Court of Appeal to mean persons who are entrusted with property during the commercial activities of their trusted trades or professions, including those who are in the business of agency. This shifts the focus of section 409 from the requirement of dishonesty to the capacity or position in which the respondent was acting in. There are advantages of maintaining a strict interpretation of section 409, especially since liability under section 409 encompasses harsh sentences, allowing for a fine, life sentence or imprisonment of up to 20 years. The first clear advantage is that it provides legal certainty and transparency in the application of the statute. By providing a clear definition of persons who fall within the scope of the section, the courts will no longer have to rely on judicial discretion, allowing for coherent precedent in this domain. This will also demand that those who are acting in the capacities or positions specified must display a high level of care when acting in respect to the entrusted property in question. In his judgment, Phang J also reasoned that the prosecution’s proposed definition of ‘agent’ was both over and under-inclusive.7 The prosecution argued that ‘agents’ should include directors and board members of corporations, charities, and societies, instead of being restricted to professional agents. Phang J seems to be right in finding that this definition can be over-inclusive as it would not only refer to directors, but also low-level workers entrusted with small amounts of money needed to carry out their regular responsibilities. Given that section 409 does not apply to specific thresholds of funds, it could potentially apply to petty amounts of money. Expanding the scope of the section would effectively mean that anyone who is entrusted even with a small sum of money for work-related purposes, can qualify as an agent and can be liable for disproportionately harsh sentences. It can be argued that cases involving small sums for the daily exercise of a person’s duties should be restricted to civil remedies, such as rescission or an account of profits. A sentence involving imprisonment or hefty fines go beyond what is necessary to punish culprits involved in small-scale crimes, justifying the narrow interpretation of section 409.

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in Singapore instead, it is unlikely that the defendants would fall within the scope of ‘agents’ put forth by the prosecution. It is arguably unfair if criminal gang masters exploiting workers could escape severe criminal punishment, but a low-level worker who happens to misuse a small amount of money can be charged for criminal breach of trust. Should the courts instead follow the definition of ‘agent’ as one in a business of agency, it is likely that the defendants in Valujevs would fall within the ambit of section 409. As such, the broad interpretation put forth by the prosecution in Lam Leng Hung leads to questionable outcomes which do not fall in line with Parliament’s intentions.

Problems with the Narrow Interpretation of ‘Agent’ Restricting the definition of ‘agents’ under section 409 can however have negative implications in the long run. The current definition, which requires the ‘agent’ to be acting in the business of agency, precludes certain categories of people who are capable of committing a criminal breach of trust. The facts of Lam Leng Hung provide a clear example of such a category, mainly that of directors of charitable funds, who have the responsibility of using the entrusted property for a specified purpose. In Lam Leng Hung,8 the mere fact that the respondents did not provide their services at large and had only one principal was sufficient to preclude them from being classified as ‘agents’ under section 409. This should not be the case. The respondents were still entrusted with a large sum of money, constituting donations from members of City Harvest, and still had a responsibility to use the funds for the specified purpose. The original intended purpose of finding new spaces for the Church was one that would have affected the members of the Church – it can thus be argued that the respondents were in fact providing their services to the congregation at large. Drawing a distinction between those who act as directors of a charitable fund and those who act as public servants or in a ‘business of agency’ is artificial and unnecessary. A person who is not acting in the capacity of a public servant, a broker or an agent but is capable of controlling an equally large sum of funds for an equally important purpose should not be differentiated based on the position he is acting in.

On the other hand, Phang J is prima facie right in reasoning that the prosecution’s proposed definition of an ‘agent’ can also be under-inclusive, given that there remained many significant categories of persons deserving of equal or greater punishment who would not be deemed to be legal agents. For example, if the United Kingdom case of Valujevs had taken place

Such a narrow interpretation of section 409 allows for any person who commits a criminal breach of trust to escape heavier sentences simply by restricting his commercial transactions to one principal, regardless of how much money or property is involved. It also undermines the importance of integrity and accountability for directors

Lam Leng Hung (n 1) [276]-[282].

(n 1).

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of charities since such persons are now aware that they can escape harsher punishments under section 409. Directors entrusted with funds for charitable purposes should be treated in the same manner as commercial directors or brokers, if not with an even higher degree of integrity. Allowing directors of charities to escape harsher punishment under section 409 can raise higher levels of doubt and scepticism when it comes to members of the public donating to charitable trusts. Such doubt should not exist in society.

What if United Kingdom Law was Applied to Lam Leng Hung? If Lam Leng Hung had taken place in the United Kingdom, the case would fall under a ‘fraud by abuse of position’.9 The Fraud Act 2006 applies to those who are in a position where they are expected to safeguard the financial interests of another person, dishonestly abuses that position and intends either to make a gain for himself or another, or cause loss to another. The two main elements are that of ‘expectation’ and ‘dishonesty’.10 In Valujevs, the Court of Appeal held that the test was whether there was a breach of a fiduciary duty or an obligation akin to a fiduciary duty.11 The definition of a fiduciary is set in Bristol and West Building Society v Mothew12 as someone who has undertaken to act for or on behalf of another in circumstances which give rise to a relationship of trust and confidence. The defendants in Valujevs defrauded migrant workers and were consequently held to be within the ambit of section 4 of the Fraud Act 2006 since they were collecting money from the migrants and dishonestly using it for their own profits. Should the Fraud Act 2006 apply to the present case, the directors of City Harvest Church would have been subject to the fiduciary test, instead of one based on the position in which they were acting in. On the facts, the directors of City Harvest clearly undertook to act on behalf of their members who had donated to the Building Fund, given that members trusted that the funds would be used for the benefit of the Church. Using the funds to purchase shares of Xtron and other companies was not in line with the intended purpose of finding spaces for the Church, nor was it for the benefit of the Church community. There was therefore a clear breach of trust. Dishonesty is also a crucial aspect of fraud by abuse of position. Although the Court of Appeal in Valujevs did not specify a test for dishonesty, the most commonly used test is set out in Ivey v Genting Casinos (UK) Ltd (“Ivey”).13 Ivey overruled

the Ghosh test for dishonesty14 such that ‘the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the objective standards of ordinary decent people’.15 Applying the Ivey test, it is likely that the directors of City Harvest will be found dishonest according to objective standards, since a reasonable person would expect the Building Fund to be used for its stated objective. Therefore, if United Kingdom law had been applied in Lam Leng Hung, the case would most likely have fallen within the ambit of section 4 of the Fraud Act 2006. The United Kingdom test provides a broader interpretation of criminal frauds as opposed to section 409 of the Penal Code16. There is a clear advantage of imposing the fiduciary test: it ensures that anyone who assumes responsibility for the financial wellbeing of another must use the funds for a proper purpose. This solves the loophole caused by the under-inclusiveness of the narrow interpretation of section 409 in Singapore – agents of charities would not be able to escape heavier sentences for criminal breach of trust.

Should Singapore Adopt the United Kingdom’s Position? K Shanmugam, Singapore’s Minister for Home Affairs, mentioned in his speech that the Government will soon amend the law to ensure that legislation provides for higher penalties for directors and other senior officers who commit criminal breach of trust.17 He also affirms the Government’s position that a senior officer or director in the organisation who is in a position of greater trust should be more culpable if that trust is abused, recognising the decision in Lam Leng Hung as a departure from precedent. Similarly, the Singapore Court of Appeal in its judgment admitted that there did not appear to be ‘a good policy reason to ignore their heightened culpability and the enhanced potential for harm were [directors of companies and charities] to commit [a criminal breach of trust]’.18 Both the executive and the courts agree that reform is required in Singapore, but it remains unclear what kind of reform should be adopted. Although the United Kingdom system seems to set a clear and ideal test, the implications of adopting such a test in Singapore must first be considered.

[1982] 3 WLR 110, [1982] EWCA Crim 2.

Ivey (n 13) [74]-[75] (Lord Hughes).

(Cap 224, 2008 Rev Ed).

FA 2006 s 4.

ibid, s 4(1).

R v Valujevs (n 6) [43]-[45] (Fulford LJ).

[1996] EWCA Civ 533, [1998] Ch 1.

17 ‘Law will be Amended Soon to Plug Gap in Criminal Breach of Trust Law, Says Shanmugam’ The Business Times (Singapore, 5 February 2018) <https://www.businesstimes.com.sg/governmenteconomy/law-will-be-amended-soon-to-plug-gap-in-criminal-breachof-trust-law-says> accessed 1 June 2018.

[2017] UKSC 67, [2017] 3 WLR 1212.

Lam Leng Hung (n 1) [276].

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There are several problems that the United Kingdom system based on fiduciary duties and dishonesty fails to resolve. Firstly, there is a problem of uncertainty. The emphasis on the defendant occupying a position where he is expected to safeguard the financial interest of another begs the question as to whose expectation the situation should be judged against. There is a vast difference between the claimant’s expectation of a fiduciary relationship and the defendant recognising that he is expected to act in a certain way. Relying on the claimant’s expectation may lead to a very broad scope as the claimant will almost always demand an expectation that the defendant will act for his benefit. On the other hand, relying on the defendant’s expectation may lead to an extremely narrow scope, as the defendant can simply claim that he did not realise he was expected to act with such responsibility. Although in Valujevs the United Kingdom Court of Appeal held that expectation is to be judged based on the reasonable person,19 this can bring about inconsistency in its application.20 In order for the United Kingdom system to be effective in Singapore, Parliament must decide whose expectation is relevant in relation to criminal breach of trust. Secondly, the Fraud Act 2006 in the United Kingdom places emphasis on the proof of dishonesty, whereas dishonesty is not mentioned in section 409 of the Penal Code at all. Although the United Kingdom courts generally consider whether the accused is indeed dishonest, it is expressly provided for in statute. The Singapore Parliament will have to decide the weight of dishonesty in criminal breach of trust and the test for dishonesty to be applied by the Courts. It can be argued that Singapore should adopt dishonesty as a formal requirement for breach of trust as those who make innocent mistakes when dealing with trust property should not be held liable under section 409. At the same time, Parliament can then allow a broader range of persons to fall within the ambit of section 409, with dishonesty acting as a ‘safety net’ ensuring that the breach is serious enough to warrant a heavier sentence. If the objective test of dishonesty in Ivey is adopted, the courts can further strike a balance between the interests of both parties. However, before adopting the United Kingdom position, it is important to note that such reform will require a drastic shift from the current position in Singapore. Instead of opting for a complete shift to the United Kingdom’s approach on fiduciary duties and dishonesty, Singapore can perhaps cherry pick a few 19

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(n 6).

20 Dr Jennifer Collins, ‘Testing the boundaries of fraud by abuse of position’ University of Bristol Law School Blog (Bristol, 6 June 2016) <https://legalresearch.blogs.bris.ac.uk/2016/06/testing-theboundaries-of-fraud-by-abuse-of-position/> accessed 1 June 2018.

elements of the United Kingdom approach that will benefit Singapore’s legal system without completely changing the law. Although the decision in Lam Leng Hung received criticism, the respondents in the case did not get away unpunished – there are undoubtedly still measures in place to ensure that directors of charities are responsible to some extent. Reform will require efforts from both the Parliament and the judiciary. Parliament can consider maintaining the current structure of section 409 but including the additional element of dishonesty, making it a formal requirement that the courts must consider. Parliament should also decide on the precise definition of an ‘agent’, which the judiciary must apply in a consistent manner across all cases. This keeps the approach to criminal breach of trust vaguely the same in Singapore, but with a clearer definition of an ‘agent’ and dishonesty acting as a safety net, preventing lowlevel workers using funds for daily activities from being caught. Using this proposed version of section 409, directors of charities who have acted dishonestly can be given heavier sentences under criminal breach of trust even if they are not in the business of agency.

Concluding Thoughts There is no doubt that the scope of criminal breach of trust will need to be reviewed from time to time, especially as the economy changes, giving people new opportunities to act as agents for others. Lam Leng Hung has provided the opportune moment for Parliament to consider reforming section 409 of the Penal Code such that the scope of ‘agents’ remains relevant in practice. Although the United Kingdom’s system of using a fiduciary test coupled with proving dishonesty seems like an ideal test to adopt, it is submitted that adopting the same approach will be too far a jump from Singapore’s current law. Instead of recklessly changing the entire statute for criminal breach of trust, Parliament can consider amending it slightly to adopt a broader definition of ‘agent’ but also including a test of dishonesty, widening the ambit of section 409 but raising the bar for an accused to be held liable.

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The Future of Arbitration in Singapore An Interview With:

Dr Michael Hwang SC By Lee Kay Howe WHEN it comes to international arbitration in Singapore, there are few persons more experienced and accomplished than Dr Michael Hwang SC. Having practised as a chartered arbitrator for the better part of the last 30 years, Dr Hwang has also had the distinction of being a Judicial Commissioner of the High Court of Singapore, President of the Law Society of Singapore, and is currently serving as the Chief Justice of the Dubai International Finance Centre (“DIFC”) Courts, amongst other things.

binding law regardless of consent, courts have wider powers than arbitral tribunals. For instance, this allows the court to join third parties (e.g. subcontractors) to a bilateral dispute, or to allow for consolidation of different disputes with different parties. In contrast, arbitral tribunals cannot exercise such jurisdiction unless all the parties to the jurisdiction have consented to its jurisdiction.

Despite his many accomplishments, however, Dr Hwang cuts a professorial, almost fatherly figure, dispensing wisdom with a refreshing degree of thoughtfulness and candour. All this is welcome for the average law student, unfamiliar with this otherwise daunting and obscure area of law.

Arbitral tribunals also do not by themselves have the formal coercive power that courts possess. However, arbitral awards can still be enforced through the courts under both national law (such as in the International Arbitration Act (“IAA”) 1994) and international law (such as the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“1958 New York Convention”)).

Indeed, given that international arbitration does not feature in undergraduate law syllabi, what then, is international arbitration; how does it differ from litigation; and why is it relevant to the young lawyers of tomorrow?

Some matters are also, by their nature, not arbitrable. The concept of arbitrability, thus, acts as a constraint on the scope of arbitration. Criminal, family and insolvency cases are, for instance, not arbitrable.

Litigation and Arbitration

Additionally, since litigated cases are ordinarily reported, parties that prefer a greater degree of confidentiality would much prefer the relative privacy of arbitral proceedings. Thus, depending on the preferences and aims of different parties, litigation and arbitration can alternatively be the more appealing option.

Put simply, arbitration and litigation are just different methods of dispute resolution. Whilst arbitration is less formal, depending on the consent of the disputing parties for its jurisdiction, litigation is a formal process in the courts. This has several implications. In terms of jurisdiction, because courts apply mandatory

It might also surprise some students to learn that there is significantly less room to appeal against an arbitral 123

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award as compared to litigated cases. Indeed, the finality and certainty of arbitral decisions is a significant reason why parties arbitrate in the first place. However, whilst one cannot challenge an arbitral decision for a mistake of law or fact, or other merits of a case, it would be possible in several situations under the 1985 UNCITRAL Model Law on International Commercial Arbitration (“1985 UNCITRAL Model Law”) and the 1958 New York Convention, both of which have been incorporated into Singapore law by the first and second schedules of the IAA 1994. These largely comprise cases where there are procedural errors; or where the tribunal has exceeded its jurisdiction; or where there has been a “denial of natural justice”. Conflict of interest on the part of the arbitrator is, for instance, grounds for which an arbitral award can be set aside by the courts, on the basis that it is a failure of natural justice under s. 24(b) of the IAA 1994; or, in countries without specific provisions on natural justice, as contrary to public policy under the 1985 UNCITRAL Model Law. These are also reasons, why, Dr Hwang relates, the “seat [of the arbitration] is important” because if you arbitrate in Singapore, your recourse is to a Singapore court. In this way, the Singapore International Commercial Court (“SICC”) and Singapore International Arbitration Centre (“SIAC”) complement each other well. Another reason why arbitration is preferred over litigation could also be the greater enforceability of arbitral awards worldwide under the 1958 New York Convention, to which 159 jurisdictions are party to. In comparison, litigated cases have less international enforceability, especially in civil law jurisdictions. In the common law world, money judgments are universally enforceable under the common law doctrine of enforcement of foreign judgments. By contrast, whilst national court judgments are theoretically enforceable under the civil procedure code of most civil law countries, nearly all civil law countries require reciprocity of enforcement from the country of the judgment in order to qualify for enforcement in the enforcing country. Common law doctrine, on the other hand, does not require reciprocity as a pre-condition of enforcement, since the doctrine is based on the principle of comity and enforcement of the debtor’s implied promise to comply with the terms of a binding judgment. As a result, court judgements in Singapore may be of more limited reach as compared to arbitral awards, especially in civil law countries. As Chief Justice of the DIFC Courts, Dr Hwang has introduced a novel mechanism to increase the international enforceability of litigated decisions by introducing a “conversion” mechanism which allows for court decisions to be enforced using an arbitral 124

procedure. This is a two-step procedure in which there is first, a judgement, and second, a demand that the judgement be enforced. Thus, if the judgement is not performed by one party, it becomes a dispute which can be arbitrated. Whilst this procedure has yet to be adopted by the SICC and SIAC, this could, together with the 2005 Hague Convention on Choice of Court Agreements, significantly expand the enforceability of international litigation across jurisdictions. In terms of the skills required for each method of dispute resolution, Dr Hwang notes that counsel’s preparation in an arbitral case is “largely the same” as in litigation, although the use of foreign law in a mixed tribunal can add complexity, as counsel may not be familiar with that law. To address this issue, expert witnesses are brought in to explain what the principle of law is in relation to the issue at hand. Nonetheless, with practice, a trained lawyer can also be adept at arbitration.

Industry Knowledge and Expertise As any student of Contract Law will know, a substantial number of litigated contract disputes come from the shipping industry, with many a case named after the ships at the centre of the dispute. Similarly, Dr Hwang shares, domestic arbitration grew largely out of construction cases. The corresponding rise in international arbitration today, he states, is due to an increase in large infrastructure projects, which, unlike domestic cases, are “much broader in scope,” with a larger ecosystem of contracts and other legal matters for which further expertise is needed. For instance, there will often be “parallel contracts apart from the contract to build”, which can include project finance, matters relating to offshore drilling, technology disputes, and even shipping contracts. These changes to the face of arbitration have been reflected in legislation, with the United Kingdom (“UK”) updating the Arbitration Act 1950 in 1996 to account for the new realities of arbitration. In Singapore, we have both the Arbitration Act 2001 and the IAA 1994 which reflect some of these differences. This also has implications for the “massive infrastructure projects” that come under China’s Belt and Road Initiative, which has a presence around the world, and in Southeast Asia in particular. Whilst the relative recency of these projects means that they have led to “mostly construction-related disputes”, the trends in International Arbitration suggest that non-construction disputes will be “generated” in time to come. All this can be intimidating to the law student with no experience or understanding of any of these

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industries. Naturally, it would be an advantage to know these industries well before you begin your career, but luckily enough, Dr Hwang counsels, one can quite readily pick up industry knowledge on the job.

Further Education Noting the absence of arbitration from undergraduate syllabi, Dr Hwang helpfully points out several postgraduate programmes where one can develop a greater understanding on the subject. He picks out for special mention the “very famous” Queen Mary University of London, which offers an LLM in Comparative and International Dispute Resolution. The school, he relates, has a very distinguished faculty, with many practitioners, including Dr Julian Lew QC. It is also a “well-known” as a centre for international arbitration, with numerous surveys, theories, and questionnaires published annually. Elsewhere, King’s College London also has an outstanding programme, with an MSc in Construction Law and Dispute Resolution. In particular, Dr Hwang highlights the pairing of construction law and international arbitration, which have an intimate relationship with each other. Outside the UK, the National University of Singapore has a joint masters programme with the University of Geneva’s Masters in International Dispute Settlement, with a strong focus on Public International Law and International Arbitration. The University of Geneva is, in particular, an “important centre of practice” in the field, being easily accessible in the centre of Europe, and having historical connections with Public International Law. Indeed, Geneva is home to the alternate headquarters of the United Nations and other important international institutions, such as the World Intellectual Property Organisation and the World Trade Organisation. The city also has a strong tradition of practicing international arbitration, which continues to this day. Taken together, these also mean that students benefit from the many guest speakers and teachers popping in from time to time to lecture. Naturally, these courses will help the freshly-minted law graduate develop greater confidence and expertise for practice in international arbitration.

Arbitral Training and Developing Young Arbitrators Given the ability of disputing parties to pick the arbitrators deciding their cases, it seems natural that such parties will prefer to entrust their cases to more senior arbitrators. “Parties,” Dr Hwang relates, “don’t usually choose someone who is unknown or who doesn’t have a long track record.” This is especially so since such choices could provoke “allegations of impropriety” or suspicions of “some other relationship”

between the arbitrator and the disputing party. This seems to create an institutional bias against young arbitrators that may be difficult to overcome. In this context, it is fortunate that we have in Singapore formal training courses offered by the Chartered Institute of Arbitrators, alongside other informal training courses organised by professional training institutions. These, perhaps surprisingly, also take in a good number of retired architects, engineers, and other non-lawyers. Additionally, arbitral institutions - and the SIAC - have taken steps which aid the development of young arbitrators. It is true that in a typical arbitral case, each party will normally choose their own arbitrator, with the two arbitrators then choosing a chair. Most institutions today, however, do not allow the direct appointment of a chair by the parties or the co-arbitrators, but need to confirm a nomination by the parties or the co-arbitrators before it becomes effective. In this way, arbitral institutions can exercise control over arbitral proceedings, to the benefit of young arbitrators. Economically speaking, since remuneration for arbitrators is also pegged to the value of the case, small and straightforward cases are also usually handled by more junior lawyers as senior lawyers may feel that it is not worth their time. Thus, whilst it may seem like most arbitration cases are handled by senior arbitrators, it is clear that junior arbitrators are also given important chances to gain experience and develop their skills.

The Future of International Arbitration in Singapore When thinking about the attractiveness of an arbitral seat and jurisdiction to disputing parties, one naturally has to consider the concerns of said parties. A key factor is neutrality. Foreigners, Dr Hwang notes, often prefer England over the US as a place to resolve disputes, even when one of the parties is English - a true testament to the neutral image of the English arbitral centres and courts. Parties simply do not want to go to the other party’s courts for lack of familiarity with another’s language, legal system, and law used. Additionally, practical concerns also play a significant role in the decision of the disputing parties. For instance, good judges, good rules, a “good place to stay a week” and good supporting facilities all play into the mix as well. In that respect, Singapore is in a good position to attract international parties to our arbitral centres, with a strong reputation for neutrality, well-respected legal infrastructure, commercial fairness, and efficiency. 125

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Additionally, the SICC, part of the High Court of Singapore, is in a unique position as a national court with international judges, as it leverages on Singapore’s reputation for having a strong bench and familiarity with our court system to bring international litigation to Singapore. These are key factors which will help Singapore to build on its remarkable success in recent years as the legal hub of choice in the region and the world.

Concluding Remarks Despite overrunning our interview into his next appointment, Dr Hwang still patiently humours me, taking the time to answer my final questions. It certainly takes more than an hour to learn about a whole new area of law, but Dr Hwang’s careful explanations have been exceptionally helpful. Given the opportunities for learning, development and work in the field, International Arbitration will continue to play a large and important role in Singapore’s legal landscape in the years to come. With the right knowledge and resources, young Singaporean law students are in the right place and time to take advantage of this.

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Life as an Arbitration Lawyer An Interview With: Samuel Seow An

Senior Legal Counsel, Samuel Seow Law Corporation

By: Bernice Tan ARBITRATION is a popular form of dispute resolution, where parties to a dispute agree to be bound by the decision of an independent and impartial tribunal. It is generally regarded as an alternative to court litigation, and the existence of a valid agreement to arbitrate should mean that state courts refuse to hear disputes falling within the scope of that agreement. Arbitration has been gaining popularity in many jurisdictions and many law students may now wish to find out what a career in arbitration would entail. In this feature, Bernice speaks to lawyer Samuel Seow An, who leads the arbitration practice of Samuel Seow Law Corporation. Samuel is admitted to practice in both Singapore and Australia and has significant experience in resolving commercial disputes across a range of industries. He has experience in arbitrations conducted under SIAC, ICC, BANI, TAI, UNCITRAL and other arbitral rules. He is featured in the 2017 edition of the Thomson Reuters Asian Legal Business “40 under 40” lawyers in Asia. Samuel also has an interest in academia and is regularly invited to speak at institutions across the region. He has authored articles and book chapters for legal publications including the International Arbitration Review, Singapore Law Gazette and the Global Arbitration Review. He holds or has held adjunct appointments at universities in Australia, Indonesia and Thailand. He is currently also the Deputy Managing Editor of International Arbitration Asia. Bernice: What experiences or encounters first sparked your interest in international arbitration?

Samuel: I had just entered law school when several investor-state arbitrations were heating up, one of which was the Tobacco Plain-Packaging dispute between Philip Morris and the Australian government. I chanced upon a televised debate-style talk show where my typically placid, mild-mannered law professor denounced investment arbitration using very strong language (for an academic!). I vividly recall him describing the process of investment arbitration as usurping the role of the national courts and even as an affront to democracy! This was probably my first exposure to investment arbitration and arbitration generally. My curiosity in arbitration piqued, and I subsequently decided to explore topical issues in arbitration in for my final year thesis. Bernice: Why do you think arbitration is increasingly being relied upon as a form of dispute resolution? Samuel: I think an important factor leading to the popularity of arbitration is the growing internationalisation of business. More companies are engaged in crossborder transactions and deals than ever before. Where parties face the option of resolving disputes via litigation before the national courts of (a) Country X or (b) Country Y, international arbitration at a neutral seat is often perceived as a convenient middle ground. International arbitral awards are enforceable in most jurisdictions across the world (some jurisdictions more easily than others due to practical concerns) – for this, the current generation of international disputes lawyers must be grateful to the astute drafters and negotiators of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York 127

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Convention. Bernice: Over the years of practice in international arbitration, what aspects of this practice have stood out to you / appealed to you as a lawyer? Samuel: My practice has given me the privilege of working alongside lawyers from different legal traditions and hailing from across the world. I find international arbitration lawyers (both counsel and arbitrators) to be particularly creative, whether in the realm of substantive law or in procedural law. International arbitration often involves a multitude of varying laws, “soft laws”, and rules - without the strict case management perimeters and rigid procedures typically present in litigation, there is arguably more room for “creative expression” in international arbitration. Sometimes, such creativity blossoms in the form of the most unusual and intriguing arguments and case strategies. At other times it manifests itself as delaying or cost-building tactics, which often proves to be confounding and frustrating for the counterparty. Perhaps one day I will document my experiences in a book - “The Recalcitrant Respondent’s Guerrilla Tactics Playbook”.

“international arbitration often involves a multitude of varying laws” Bernice: Could you share some interesting experiences that you have had being involved in international arbitration? Samuel: A matter I was involved in required my team and I to travel to a mining project a three-hour car ride away from the nearest city. Swapping our suits and ties for high-vis vests and boots, we stayed onsite for almost a week. Evenings were spent around two ping pong tables – the only source of after-hours entertainment. Bernice: I understand that aside from your legal practice, you are also involved in academia and writing for various publications. What made you decide to get involved in this, and how do these experiences help you in your legal practice? Samuel: I consider writing and teaching meaningful activities in themselves and aligned with the development of my practice. As commercial arbitration proceedings and awards are normally private and confidential (unlike most court proceedings and court judgments), one important way in which there is engagement between arbitration practitioners of our experiences is through 128

scholarly discussion and review (with confidential information redacted of course). Academia provides a platform for such discourse. At a personal level, I enjoy interacting with students from across different legal backgrounds and facilitating their learning. The first few batches of students I taught have graduated and many of them are taking their first steps at law firms or engaged in other fascinating enterprises. I am excited to see how they develop and continue to keep in touch with many of them. Bernice: International arbitration is quite a specialised area of law - what opportunities do you think law students can / should take up to engage in this subject if they are interested in a future practice in this field? Samuel: Most international arbitration lawyers also have an active litigation practice. A solid background in litigation should serve one well in international arbitration. Arbitration mooting would be one way a student can gain some familiarity with arbitration. Students can also consider undertaking internships in this area. In this regard, I believe that students should not just spend time at the usual large law firms, but also consider attachments at specialist practices, regional arbitral institutions, with arbitrators and with end-user companies engaged in international arbitration. I believe that young practitioners with a holistic understanding of arbitration (most importantly, an understanding which is alive to the needs and concerns of end-users of arbitration) would help to future-proof our industry. An early academic grounding in international arbitration and conflict of laws would certainly not hurt one’s prospects of developing a practice in this area. However, failing to read international arbitration in your law studies shouldn’t be perceived as an impediment to practise in this area. I myself didn’t undertake any formal academic study of international arbitration during my undergraduate studies (shh!) and faced a steep (but surmountable!) challenge in my initial years of training. After graduation, there is also the option of undertaking professional courses with institutions such as the International Chamber of Commerce and the Chartered Institute of Arbitrators. To all aspiring arbitration lawyers – my colleagues and I look forward to welcoming you to the bar!

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The Legal Magic 8-Ball An Interview With:

Jerrold Soh Co-Founder, Lex Quanta By: Kelvin Tan KELVIN Tan sat down with Jerrold Soh, one of four founders of Lex Quanta, at Collision 8, home to the Singapore Academy of Law’s Future Law Innovation Programme (FLIP). FLIP is an initiative aimed at cultivating and supporting legal tech start-ups, and amongst those firms which have benefitted is Lex Quanta, a startup which aims to build legally-sensitive data analytics solutions. Jerrold and his former schoolmates started Lex Quanta in September 2016, with each of them strategically handling four different roles – data, coding, business and law. This formula proved to work wonders, with one of the team’s most notable achievements being the development of a simulator early this year that can predict the division of assets in a divorce case. The inspiration behind Lex Quanta was Jerrold’s eagerness to find out how “junior lawyers [could] be replaced by AI (artificial intelligence)”1 in the future. We dug a little deeper into the inspiration and workings of this divorce outcome simulator, and probed Jerrold on his thoughts about the evolution of AI in the legal industry. Kelvin: For the uninitiated amongst us, would you mind giving us a brief summary of what Lex Quanta is, and the services that it provides? Jerrold: Okay, so as a start-up, Lex Quanta does two things. Firstly, we provide data consultancy services to legal organizations on how to structure, manage and exploit the data they have. Oftentimes, this data is in a form not immediately usable for machine learning and other purposes. So, we’re talking about documents, sometimes not even scanned, which present a unique challenge for data science in general. As such, Lex 1 The Straits Times, “NUS law and economics student, along with three peers, creates divorce outcome simulator”, https://www. straitstimes.com/singapore/nus-law-and-economics-student-alongwith-three-peers-creates-case-outcome-simulator, accessed on 30 July 2018.

Quanta comes in to suggest ways for them to use and structure their data. Secondly, we create our own legal software; the main thing I can talk about is our outcome simulator for the division of matrimonial assets under Singaporean divorce law. To put it simply, after you input some facts, the system can tell you, based on what it has learned from the case law, an estimation of what the division will be like. That’s what you would call an AI system that does an outcome simulation. So that’s what we do in general. Consultancy and our own software. Kelvin: How might a lawyer use Lex Quanta to help him? Jerrold: For lawyers, the main value right now is in saving research time. For example, if you get a new case, and you want to have a very quick sense of what the outcome will be like, that’s when an outcome simulator will be useful. You can enter in the facts and within 5-10 minutes, you can get a first-cut outcome. We don’t claim that the simulator will be a 100% exact, but it will be akin to briefly reading through the case law for an hour and getting a sense of what the likely outcome will be. Kelvin: How would you put such common law rules into the simulator? Because each case is so unique, especially in the family law context, how do you reduce the intricacies of each case to something a computer can understand? Jerrold: That’s a very good question; I can’t share too much about this, but essentially, when you build a model, you try to capture patterns within that domain. As lawyers, we know that the judges don’t pull out random numbers but follow set frameworks when arriving at their decision. Specifically, with regard to divorce, there is case law in the division of matrimonial assets talking about calculating ratios for division and aggregating them. So that would be the case of ANJ v ANK [2015] SGCA 34, a Court of Appeal case. 129

FEATURES We try and look at how the judges decide, and what data points they rely on. Some would be the number of children, how each party has contributed to taking care of the children, taking care of the household, how long the marriage has lasted and so on. The main thing is that there are patterns in the case law, as the case law is not decided at random. So, we try to look at these patterns, and we try to convert these patterns into something the computer can understand. Kelvin: One touted advantage for AI applications like Lex Quanta is that it would help to drive down legal costs for private clients/start-ups. Have any such private individuals approached you to use Lex Quanta for their own purposes yet? Jerrold: We’ve had a few people approach us, but Lex Quanta is not as of yet open to the public. There are various concerns about doing so, and we are still in the phase of testing it out with lawyers first. We want to make sure we get it right, as we don’t want to wrongly advise the public. Kelvin: So, the plan is to expand Lex Quanta to private use in the future? Jerrold: That is one possibility, but we haven’t actively looked at it to be honest, as we are still focusing on getting it to become a tool for lawyers. Kelvin: Why did you choose for Lex Quanta to be involved in the field of family law? Jerrold: I think that there were a few reasons why. The first reason really is that we found sufficient data and the legal framework surrounding the framework of division was sufficiently amenable to data techniques. Secondly, family law is one area where we could make some impact, not least because there are actually a lot of divorces in Singapore; for example, there are at least 6500 divorces a year, for non-Muslims alone. Given this, if we had to do a simulator for complex commercial litigation, of which there might only be 3 cases a year, the impact might be smaller for example. Kelvin: Have the number of applications of Lex Quanta since been increased, or going forward in the future, what do you hope to achieve for Lex Quanta? For instance, I read that you hoped to extend the simulator’s abilities to IP/traffic disputes. I suppose it follows from what you said previously that as long as the case law in an area is sufficiently established, you can theoretically expand Lex Quanta to that area. Jerrold: We look at a few things; first question is, is there 130

enough data? Second question is whether the area is so complex that a model would not be able to capture the nuances; we talk about highly complex commercial disputes. I won’t say it’s impossible, but it would definitely be much more challenging. Thirdly, we look at the impact; if there are only a few cases a year, there’s not much point in simulating such cases. If it’s something like the UK, where they have a board which does parking ticket appeals, which a lot of people get, then the impact would be much larger. Kelvin: There has always been talk about how junior lawyers will be increasingly replaced by AI. What space do you think there is for junior lawyers to value-add or differentiate their services? Jerrold: The most direct value I can think of is being able to understand what the technology can or cannot do; something as simple as operating the software may be something that comes more naturally to people who have grown up with technology around them. That said, I wouldn’t want to generalize, as I’ve seen some people my age who can’t deal with software at all. Of course, some people from the older generations are also excellent with software. But if you’re a young lawyer who’s not good at software, you should get better with it, because you’ll have to deal with it a lot more than previous generations would have had to. The second thing is that technology will likely free you up to get more specialized in the legal nuances. It’ll be such that you will spend less time proofreading or getting to know the nuances, and you can take that time to study the law more in depth to really learn the more valuable skills. Kelvin: Do you think that the Singapore legal industry is doing enough to push for the use of more advanced technology? (For e.g., in my limited experience as an intern in law firms in Singapore, most of the heavy lifting, if not all, is still done by practice trainees or associates.) Jerrold: So, when you speak of the legal industry, I think that I can unpack that into a few different groups of people. There are law firms, the government, and other organizations like the Law Society. I think in Singapore, it’s quite interesting as over the course of the last few years, there has been a lot of interest from all three types of organization in trying to pushfor tech adoption. This is important, as it’s not just AI we’re looking at; we’re looking at baseline technology, which could be just using Microsoft Word or Excel better. But that alone delivers a lot of value add. Going to AI specifically, I think everybody is interested in it from various angles. However, fortunately or

FEATURES unfortunately, I’ll be honest in saying that the software hasn’t really matured in the sense that we are still in the phase of testing and getting it right. So, it may take some time before it becomes something that every lawyer in a firm can use. I think it will get there, but it will take some time.

what the lawyers actually want, so they might create something which is technically difficult but solves a problem which is non-existent. So I think we need solid, 2-way communication to have useful AI.

Right now, as far as I know, in law firms, there will probably be a small group of people working on testing it and understanding how it works. And once the software gets to a stage of accuracy that is sufficient, you will suddenly see that they will publicize that “the whole firm can use it”. So, we are still not at that level yet, but we are getting there.

Jerrold: I think these issues, as well as issues about ethics and regulation, will be worked through as time passes, as it does with all technology. Eventually, we hit a point where we learn how to regulate and manage it.

For government, not just in the legal section of the government, they have been pretty much dragging people along. SAL has been very proactive; they’ve come up with the FLIP program, they’ve come up with workshops and conferences to get people talking about legal tech and to connect people. I think this is already very encouraging, and it has helped us directly as a startup. If you ask me whether they should do more, honestly, I would say that they might not need to do anymore; there’s also the issue of doing too much where the government crowds out the private sector. If they do everything, what’s left for us to do? I think it’s okay now; the balance is not possible to objectively define. Such things take time as well; it’s not like you can pump in a million dollars and the next year you have AI everywhere. It’s a long journey, and people have to be patient.

“if you’re a young lawyer who’s not good at software, you should get better with it”

Kelvin: How about over-reliance?

Kelvin: What advice might you give to a current law student or fresh graduate in this transitional period of technological change? Jerrold: I think I can honestly say that the best advice is not to listen to advice; based on my personal experience, when people give advice, it’s always based on their own historical experiences. It might not be true for the future that people studying now would have to deal with. When I was in my 1st year, I was asking around for advice on whether I should do my Law and Economics degree in NUS, which almost everyone told me was useless. I think that’s valid advice, because it’s based on what historically has been the case; looking at the last 200 years, is economics useful for legal practice? More likely than not, no.But in the course of the few years I was in law school, there were many changes, and it just happened that the change was aligned with some of the skills I picked up in my Economics degree, which I did anyway, in spite of the advice I received. So, that has helped me get to a place where I want to be. The main point of that is you can listen to advice but do what you would do as a lawyer and read the primary sources; think to yourself whether it makes sense or not and look at different points of view. You have to predict what your own future would be; in 5 years’ time, AI might not even be a thing; there might be a big explosion where people realize AI is useless; it has happened before in the 1980s, though I don’t think it will happen again.

Jerrold: I think the main problem would be communication issues between users, often lawyers, and the technology developers. There are a lot of things that AI can do, but also a lot that it cannot do. It must be properly communicated about what to expect, and what not to expect. Lawyers might think that the software can do everything, when in reality, it might just be one facet of a larger legal issue. So that might be a problem.

I think the best piece of advice I received from a very capable lawyer is that everything you know will make you a better lawyer; so be open-minded, get lots of knowledge from different areas. The situation now might be such that you really have to understand the technology or the corporate/financial implications of something before you advise on something. For instance, for ICOs, if you don’t understand blockchain or tokens, how can you advise a client? For many years, it was possible for a software lawyer to not know much but still be a good lawyer, though with AI, it’s highly unlikely the same can be done.

On the other hand, the tech people might not understand

Kelvin: Thank you for your time!

Kelvin: What problems, if any, might you foresee for the use of AI or more modern technology in the legal field?

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Innovation in the Pro Bono Scene An Interview With: Leonard Lee

Executive Director, Community Justice Centre

By: Bernice Tan ONE who walks into the State Courts or the Family Justice Centre in Singapore would notice the many litigants-in-person (LiP) present to handle their legal matters alone. Many perceive the legal system they have little or no knowledge about as daunting, making it harder for them to present their case confidently. It is thus heartening that independent charity organisations such as the Community Justice Centre (CJC) have taken active steps towards ensuring an access to justice for all, regardless of status or race1. The CJC’s most recent notable step towards this goal is the launch of the new Self Help e-Web (SHeW, pronounced as ‘show’) on 13 April 2018, in light of the increasing number of LiPs seeking help over the years. This was also dubbed by Ms Indranee Rajah as a move “in line with the national push towards becoming a Smart Nation” and praised the CJC’s efforts to “[deliver] better services to litigants-in-person”2. In this feature, Bernice Tan speaks to Mr Leonard Lee, the Executive Director of the CJC, about the SHeW and the possible opportunities available to law students looking to engage in pro bono work. Mr Lee has been involved with the non-profit sector in various leadership roles for the past thirteen years and joined the CJC

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1 Community Justice Centre: “Who We Are”, https://cjc.org. sg/about/who-we-are/, accessed on 22 July 2018. 2 Speech by Ms Indranee Rajah, Senior Minister of State for Law & Finance, at the Community Justice Centre’s 5th Anniversary Dinner Celebrations, https://www.mlaw.gov.sg/content/minlaw/ en/news/speeches/speech-by-sms-indranee-CJC-fifth-anniversarydinner.html, accessed on 22 July 2018.

as its Executive Director during its fledgling years in 2013. Under his leadership, the CJC has formed strong collaborative partnerships and drawn upon the unique strengths of these partners in different sectors to meet the needs of the end user or the community. This has led the CJC to achieve several awards in the last five years.

The Creation of the SHeW (and Automated Court Documents Assembly (ACDA)) In a nutshell, what is the SHeW and how is it intended to benefit LiPs? The SHeW comprises of two key features. Firstly, the Automated Court Documents Assembly (ACDA) “enables a litigant to fill up their court forms remotely (at their own convenience) and effectively”, with the easy-to-understand infographics and the use of “simplified language that can be understood by most English-educated lay persons”. Secondly, the system will also feature a “chatbot that is able to give basic legal information for certain legal matters” – this feature is currently a work-in-progress in collaboration with data scientists from Datakind, who have been engaged to help improve the chatbot. What inspired the CJC to create and launch the SHeW? Mr Lee: “Over the years, customer centricity has modified the way we do things, including the processes within the legal sector; when technology becomes an enabler for such processes, the possibilities are limitless. Today, almost all Singaporeans own at least one smartphone.

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In other words, smart devices are tools that must be considered if we want to promote the access of justice.” The Self Help e-Web was designed with four specific aims in mind: enhancing access to justice, streamlining and automating work processes, increasing productivity and developing an in-built analytic tool. With 91% of Singaporeans now using smartphones3, the CJC’s move to create a smartphone-friendly webpage designed to help LiPs in the preparation of their court documents is a large step towards enhancing access to justice. The CJC recognises that the LiPs lacked a comprehensive support system that could assist them in understanding court processes and filling up court forms. Faced with an increase of at least threefold of cases handled in the past 4 years, the SHeW was thus a well-thought method of tackling this issue, requiring minimal or no manpower from the CJC’s side for the usage of the system. Hence, the SHeW is expected to go a long way in easing the workload of the CJC and enhancing the operational efficiency of the staff, with more resources channelled towards helping needy LiPs in more complicated and delicate situations. It is no surprise that the CJC is also taking a forwardlooking approach with the development of the SHeW. Besides its practical aspect, the SHeW is also designed with an in-built analytic tool to develop dashboard reporting and statistical analysis for effective predictions of legal trends. This will enable the CJC to enhance or develop other meaningful programs that can further improve the accessibility of justice to LiPs. How has the response been towards the SHeW from the LiPs who have had the opportunity to use it? Mr Lee: “Fantastic. So far, we have had 10 self-declared bankruptcy applicants and a mother who used the system for her mitigation plea to the judge for shoplifting. Feedback has also indicated the user-friendliness of the Automated Court Document Assembly (ACDA) and all users are keen to recommend this to their friends facing the same predicament as them. The Simplified Divorce Proceeding and Deputyship Application will be available during the 4th quarter of 2018 and I am confident it will be well-received by users as well.” The SHeW has only been launched for a few months, but the response from LiPs is a positive sign that the system is doing its job well. This could possibly be attributed to the CJC’s “citizen-centric” approach in 3 Singapore Business Review, “4.83 million Singaporeans are now online”, https://sbr.com.sg/information-technology/news/483million-singaporeans-are-now-online, accessed on 22 July 2018.

designing the system, which ensured that the simple and straightforward design addresses the “digital divide” that kept low-income people, who lack exposure to the usage of the internet, from accessing information available on the internet. However, Mr Lee also highlights that the ACDA should only be used by the LiPs when they have exhausted all other options, such as engaging a lawyer, contacting the Legal Aid Bureau, or using other legal aid schemes such as the Criminal Legal Aid Scheme under the Law Society Pro Bono Services, or the Primary Justice Project under the CJC. The current technology is good to assist and supplement, but not replace the legal services from lawyers.

Future development of the SHeW Beyond the ACDA, the SHeW is set to release its second key feature in the near future. The CJC is currently working with Data Scientists from Datakind to crunch information obtained during legal advice sessions and eventually (hopefully) avail a ‘legally trained’ chatbot that can provide legitimate answers for some straightforward legal matters. “This will be especially useful for those on the go, such as people who need to travel overseas [frequently], or even those deciding whether to take their legal matters forward to the next step, such as seeking legal services from legal professionals,” Mr Lee notes. Beyond the SHeW, Mr Lee is not ruling out any possibility of adopting other technological initiatives in the future, one example being Lex Quanta’s simulator for predicting matrimonial assets division. Other than the development of the SHeW’s key features, the CJC is also looking at practical ways in which the SHeW’s potential can be fully exploited to achieve and sustain better access to justice. The CJC is looking at the potential of engaging law students to assist litigants with the usage of the SHeW, and one target group Mr Lee has identified who can benefit from this are those who have a poor command of English. The CJC is also exploring the possibility of rolling out the SHeW at the community level, such as at Family Service Centres and the aged homes across Singapore, so that needy litigants will enjoy better access to the system.

“the SHeW is expected to go a long way in easing the workload of the CJC and enhancing the operational

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efficiency of the staff, with more resources channelled towards helping needy LiPs in more complicated and delicate situations.” Pro Bono – To Do or Not To Do? Would you encourage law students to get involved in pro bono work? Why? One may wonder why a law student should get involved in pro bono work even before becoming legally qualified and able to give legal advice. Mr Lee has the following words of wisdoms for law students pondering about this question: “If your main purpose of becoming a lawyer is to help others gain access to justice, then [you should] definitely [get involved in pro bono work] as this will help you gain knowledge and awareness of the lives of the ordinary people, especially those who are vulnerable and weak. If the reason for becoming a lawyer is to have a shot to be amongst the elite, then it will become even more relevant as this may then be your only chance to find a greater calling to becoming just an ordinary lawyer.” What opportunities are available for law students looking to be actively involved in pro bono work? The CJC offers a University Court Friends (UCF) volunteering scheme that allows law students to provide various court services to LiPs at the various divisions of the State Courts. Such services include explaining the relevant court procedures to LiPs and assisting in reviewing their claims. The main aim of this scheme is not so much about dealing with the substantive content of the law, but more about allowing every volunteer to get the chance to see how ordinary citizens are affected by the law and learn about how to kick-start a legal process. This popularity of this scheme is evident from the steep increase in the number of volunteers: from an initial 8 volunteers when the scheme was first rolled out, about 300 students now volunteer every year thanks to the active Pro Bono Societies from the different universities who help to coordinate the programme. Besides being involved in the UCF scheme, law students have previously been involved in drafting the original workflow of some of the now-established programmes of the CJC such as the Friends of Litigants-in-Person and 134

On-site Legal Advice Scheme; the latter has successfully provided more than 11,000 legal advice sessions for LiPs since its launch in September 2014. In fact, law students are also involved in the CJC’s latest project, the SHeW! As mentioned further above, the CJC may have opportunities for law students to assist litigants with the usage of the SHeW in the future, provided that this does not contravene any rules. Mr Lee is optimistic that such an opportunity can “potentially help [law students] hone their skills as future lawyers”. How has the feedback from past volunteers been regarding the attachments with the CJC? Mr Lee: “Many have rated our programmes as highly relevant. The feedback received was seriously considered and various tweaks have been made by my volunteer co-ordinator over the past years to make volunteering experiences a more meaningful one for the students.” As a law student who had previously volunteered with the CJC under the UCF scheme, I was glad to have been given the opportunity to understand and experience the legal processes from a layman’s point of view, and to provide some assistance to the LiPs and hopefully cast the legal system in a less daunting light. Given the positive feedback by other volunteers, I would encourage any students who have some free time on hand and wish to take on pro bono work to either contact the CJC for relevant volunteering opportunities or speak to the relevant Pro Bono Societies of your school (or the UKSLSS).

Conclusion Given that the CJC as a charity organisation has limited financial resources, it is heartening to see that it is very open to exploring various options, such as kickstarting technological initiatives and engaging student volunteers, to further their goal of better access to justice for all litigants. Exciting prospects are up ahead, for there may still be target groups in Singapore lacking support and help whom can be identified by the SHeW’s analytical tool in the future. With a surge in demand for legal aid may come greater innovation from the CJC in order for it to establish itself as a “one-stop hub that delivers a seamless amalgamation of services for needy court users”.4

(n 1).

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Law as a Second Career An Interview With:

Professor Leslie Chew Law Faculty Dean, Singapore University of Social Sciences (SUSS) By: Lee Kay Howe AGAINST the backdrop of the SkillsFuture initiative and constant encouragement for Singaporean workers to upskill themselves by taking new courses, Singapore’s third law school, the Singapore University of Social Sciences, was launched in 2017. With a niche focus on both the areas of criminal and family law, as well as catering almost exclusively to working adults, how, then, is the school faring in its second year of operations? Your correspondent speaks to the dean of the SUSS law faculty, Prof. Leslie Chew SC, to find out.

Teaching working adults Unlike Singapore’s other law schools, SUSS caters mainly to working adults looking to pursue a second career, with 80% of students having had working experience previously, and 20% being fresh graduates pursuing another degree. Indeed, amongst the 60-strong cohort, many are working professionals, coming from diverse backgrounds. These include paralegals already working in law firms; counsellors; school teachers; social workers; prison officers as well as police officers.

years. Whilst applicants need not have taken any specific degree at the undergraduate level, psychology and social work degrees, Prof. Chew says, will confer on students “an advantage”. As any law student will know, studying law full-time already presents a significant challenge. What more for the working adult with a day career? SUSS, Prof. Chew shares, is understanding in this regard, allowing significant levels of flexibility to its students to take classes. Already in its second intake, the school has a good retention rate, with only two students having dropped out of the course, with another five “struggling”. In terms of preparing students for their part B – or reaching a 2: 2 for their examinations, approximately half have reached that level, with another half “struggling”. Whilst this number may not appear reassuring for potential applicants, it should be noted that these are just results from the students’ second year of studies – and are not indicative of their eventual results.

A focus on criminal and family law For those taking a first degree, the LLB takes a total of four years. A JD, however, will take only three. Admissions to the school are highly competitive, with almost 400 applications for 60 places in the first cohort. Prof. Chew predicts that this rate will stabilise to about three application for every one place in the next few

Apart from its focus on working adults, SUSS is also famous for its focus on family and criminal law. This is not to say, Prof. Chew points out, that students do not cover other areas of law – indeed, the “basic stuff” such as the “core subjects” covered by both NUS and SMU

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are also taught in SUSS. However, SUSS is unique in that it dedicates “double the time” to criminal and family law, with courses such as Forensic Science and Social Work being compulsory in the first year. Many other non-law electives are also available for students to choose from. It “makes sense to have older lawyers”, Prof. Chew notes, to deal with these areas of law, which are widely known to be emotionally taxing and have high attrition rates among young lawyers. In that sense, it was a “deliberate” choice for SUSS to pair older, working adults, with this area of law. This focus is also reflected in the make-up of the class, of whom about 10% are police officers, and 5% are social workers. Beyond SUSS, however, Prof. Chew also expresses a hope that young lawyers will consider entering the field, noting a significant vacancy of young lawyers in the field. Indeed, the “current gap is being filled by senior counsel who are not ordinarily criminal lawyers”, with few “wellknown criminal lawyers” coming from the profession in recent years. To this end, he also says that “support must come from the senior lawyers” and the Law Society, to provide younger lawyers with mentorship much like the apprenticeships of yesteryear. These will “help younger lawyers have opportunities”. This could be an interesting area of work for our readers to explore in the future.

“it makes sense to have older lawyers... to deal with these (criminal and family) areas of law, which are widely known to be emotionally taxing and have high attrition rates among young lawyers” The ‘glut’ of lawyers in Singapore In 2014, Law Minister K Shanmugam announced that there was a “glut” of lawyers, with the ministry removing 8 UK schools from the schedule of approved universities (to a total of 11) for lawyers to practice law in Singapore. Over the years, there have also been a number of Committees on the Supply of Lawyers, which have alternatively recommended both an expansion and contraction in the number of places available to study law. Given the current “glut”, then, one might think that another law school is perhaps inappropriate. 136

Amid the debate on whether or not the government should, in fact, intervene to change the number of places available for students, Prof. Chew notes that the government has “done all it can” and “cannot stop people from going overseas”. The government, thus, can only play a limited role in regulating the supply of lawyers. With SUSS’ enrolment capped at 75 students per year, Prof. Chew opines that the government has “pretty much reached the limit without damaging our requirements”.

Concluding remarks Given SUSS’ niche focus on both the areas of criminal and family law, as well as on working professionals, the school arguably addresses an important need of the legal fraternity in Singapore, instead of contributing to a “glut” of lawyers. It may also be that more mature professionals will make better lawyers in these specific areas of law. Family and criminal law, however, should not be limited to those with an SUSS degree. Indeed, with greater support from the legal community, we could see greater numbers of lawyers, and perhaps even some of our readers, be a part of this group of lawyers in the future.

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Working in London vs Singapore An Interview With:

Kyle Koh Associate, Shearman & Sterling LLP By: Lee Kay Howe LONDON, or Singapore? Project finance, or arbitration? Often, our career choices are framed in terms of bywords - metonyms for which our knowledge barely extends beyond two-line responses to overly-concerned aunties at new year gatherings. But what does it really mean to work in London? What does it mean to pick a specialisation? In this feature, your correspondent speaks to Kyle Koh of the UCL Class of 2013 about his experiences working as a project finance lawyer with Shearman and Sterling - first in London, and now in Singapore - to better understand the considerations that informed the decisions he took as a young Singaporean student in the UK which led up to his career.

Where to work? Perhaps the most important career decision facing the Singaporean law student is - where do I start my career? For Kyle, it was the training and exposure available at a London law firm that tipped the scales in favour of the British capital. Despite the uncertainties surrounding Brexit, London, Kyle notes, is still the “portal to the global market of English law-governed deals and disputes” with a training contract in a London firm giving “a breadth of exposure that you can’t get in Singapore firms”. An added advantage is that City firms take legal training seriously, a benefit which has prepared him well for his work now in project finance. For any student who prioritises training and exposure, London seems to be the place to be. Of course, there are numerous considerations to be taken when deciding where to begin one’s career. Quality of training and breadth of exposure are but two of many metrics that one uses to plan a career. Singapore is, after all, home. Family, work hours, remuneration - these are all factors that come into play, depending on your priorities.

Choosing a firm, of course, bears similar considerations. With that in mind, it is perhaps surprising that Shearman and Sterling “barely registered” on Kyle’s mind at thetime, the young associate having only heard about the firm incidentally through a contact. The firm, however, eventually won him over for a number of reasons. First, as an international practice, apart from giving Kyle a worldly perspective, Shearman and Sterling also gave him the important option of moving back to Singapore one day, with offices located in the city-state as well. Remuneration, of course, is also an important factor, with Shearman and Sterling giving good compensation relative to peer firms. “At the top tier you’ll likely be working tough hours anyway,” Kyle remarks candidly. Beyond this, the relatively small trainee intake (15 - 20) of the firm allowed him greater attention from his senior colleagues, complementing the firm’s strong focus in both transactions (Finance, Project Finance and Mergers and Acquisitions) and disputes (Arbitration), which allowed him to experiment with both types of work during his training contract. Needless to say, these are all important considerations to bear in mind when choosing a firm.

A day in the life of an associate What, then, about the actual work that lawyers do? Naturally, life as a junior lawyer is not all fun and games - but it is perhaps not as bad as some make it out to be. Work for Kyle starts at 9.30 am every day, and although there are about two or three days a week where he will leave the office at about 10 pm - 12 am, he shares that he gets off at “more reasonable hours” the rest of the time. This, of course, depends on the practice area, and sometimes, the size of the office. Comparing Shearman and Sterling’s London and 137

FEATURES Singapore offices, Kyle notes the smaller Singapore office (with 25 lawyers to the 180 fee-earners in London) lends to a “cozier, more casual feel”, which can be “flatter” than the already “pretty egalitarian” teams in London. Whilst this gives more opportunities to wander across practice groups and speak to lawyers of widely varying specialisations, Kyle remarks that this flexibility can be a “double-edged sword”. Whilst you do not have to be around unless there is work to do, you are expected to be contactable 24/7 if there is. Work life can also vary significantly by practice area. In transactional departments, such as Finance or M&A, a junior lawyer’s job revolves around coordinating various parties, whether by email or by phone, and drafting the documents that underlie the transaction at hand. A junior lawyer here would thus, have to deal with a constant flow of email traffic that has to be monitored while amending contracts or other legal documents. Contentious and advisory departments, on the other hand, tend to involve longer periods of quiet focus, marked by research and drafting. But, Kyle reminds, these accounts merely describe a typical day, and exceptions are sure to abound.

borrower’s risk of default. They also have to ensure that the borrower’s arrangements with other entities do not jeopardize the borrower’s credit position or increase the overall risk to the lenders. When Kyle and his colleagues represent borrowers, they have to ensure that the borrowers do not agree to terms with the lenders that are too onerous in the long term, and that their agreements with other parties are “bankable”, meaning that the terms in such documents are sufficiently amenable to financial institutions such that they are willing to extend credit to the project. Whilst this area of the law may not be the first to come to the mind of a young law student, it is a possible avenue of exploration.

What can I do as a law student? Between the compulsion of peer pressure and the ever-looming deadlines for spring weeks and vacation schemes, preparing for future careers can sometimes feel overwhelming. Certainly, Kyle advises, it is a good idea to participate in law-related competions, noting how his passion for advocacy helped him in the Jessup moots whilst he was at UCL. It goes almost without saying that studying hard and achieving good grades are an imperative as well.

Specialising As any first-year student of law would know, individual parts of the law can bear significant differences. Naturally, these differences can affect the work done by lawyers. Whilst a full exploration of all the different types of law is unfortunately beyond the scope of this feature, your correspondent has endeavoured to shine the spotlight on a less familiar area of the law. Happy to share about the world of project finance, Kyle explains that this subject-area is typically understood as the financing of infrastructure, energy or mining projects by commercial lenders, development banks and/or multilateral institutions. This, he notes, often occurs where the government does not want to take the risk or does not have the resources to fund such a project. In his work, Kyle has done projects on wind farms in Pakistan, natural gas infrastructure in Mozambique, solar power plants in Egypt, and a large $14bn refinery and petrochemical integrated complex in Malaysia. The large and strategic nature of these projects means that almost invariably, project finance lawyers have to work closely with governments to ensure the project proceeds smoothly. You also work with lawyers from the jurisdiction where the project is physically located. Giving greater detail, Kyle shares that, in broad terms, when project finance lawyers represent lenders, their role is to draft loan documents that govern the loan, and ensure that the drafting protects the lenders from the 138

At the same time, however, one should not, as Kyle says “squander your holidays in an office”. Somewhat counter-intuitively, Kyle advises young law students to “explore the world and try new things while you’re abroad”. As long as humans (and not algorithms) make the hiring decisions, it does make sense to build a personal narrative that law firms find compelling. Why not enjoy yourself and build up your credentials at the same time? It is advice that your correspondent will certainly take and apply with great relish.

“explore the world and try new things while you’re abroad” Parting words In making our career decisions, it is always important to have access to the best information in order to make informed decisions that we can be happy with down the road. It is perhaps impossible to know everything entailed by the choices we make; but the research we do and the information we seek out can make a huge difference when it comes down to it. And thus, whether it be London or Singapore, project finance or arbitration or indeed any other career decision that comes our way, we hope this feature has helped shed some light on the profession and helped make your decision an easier one to make.

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