Singapore Comparative Law Review (UKSLSS Law Journal) 2020

SINGAPORE COMPARATIVE LAW REVIEW 2020 The UKSLSS Law Journal

SINGAPORE COMPARATIVE LAW REVIEW 2020

Editor-in-Chief Tan Yan Shen

Published by United Kingdom Singapore Law Students’ Society

TABLE OF CONTENTS Front Matter Patron’s Foreword

1

Chan Sek Keong United Kingdom Singapore Law Students’ Society Executive Committee

11

Singapore Comparative Law Review Editorial Committee

12

President’s Address

13

Noel Low

Editorial Foreword

15

Tan Yan Shen

Articles Is Implying a Term into a Contract an Aspect of Contractual Interpretation?

18

Lord Neuberger of Abbotsbury

The Publication of Prosecutorial Guidelines and Duties; a Necessary ‘Evil’ of the Criminal Justice System in Singapore

28

Benjamin Khoh

The Mandatory Death Penalty for Certain DrugRelated Offences in Singapore

34

Charmaine Low

Questioning Our Insanity: An Examination of the M’Naghten Rules and the Singapore Equivalent

42

Clinton Wee

Crossing the Rubicon: The Push for Loss of Chance Claims in Medical Negligence Cases

49

Darien The

A Comparative Study of the English and Singaporean Approaches to Contractual Interpretation Jeanette Faith Lee

59

Fair and Ohpen Dealings: The Enforceability of Tiered Dispute Resolution Clauses

68

Jenna Tan

Disclosure, Detection, Decriminalisation: HIV transmission as a crime in the United Kingdom and Singapore

78

Pang Kar Lok

Judicial Review of Errors of Law: Privacy International and Nagaenthran

87

Kiera Yu

Pure Economic Loss: Lessons from Singapore?

97

Wong Lei Yi

On Knife’s Edge—The Operation of Duress and Necessity as Murder Defences

103

Marcus Ho

Blurred Lines: No Distinction Between Agency and Vicarious Liability in Fraud

111

Ng Sze Hian

COVID-19: Implications for Contracts under Singapore and English Law

121

Nicole Lim

A “Digital Economy”

130

Nicole Lim

Rule of Law and Executive Exemption from the Personal Data Protection Act (PDPA) 2012

138

Zhou Xiaojian

Case Notes Warner Music UK Ltd and Others v TuneIn Inc

145

Carol Yin

Reverse Veil Piercing: Jhaveri Darsan Jitendra v Salgaocar Anil Vassudeva Ryan Chua

152

Singapore Comparative Law Review

PATRON’S FOREWORD Chan Sek Keong It gives me great pleasure to write this year’s foreword for the third issue of the Singapore Comparative Law Journal under its new title.

This issue contains 15 articles and 2 case notes covering the following areas: (a) criminal law (5), (b) civil law (8), (c) administrative law (1), (d) general (3). Given the massive disruption caused to their legal studies by COVID-19, the student contributors are to be commended for making the effort to write their articles and case notes. It is always educational for me to read their writings for their thoughts about the law in action, the law in politics, and the law in legal philosophy and morality. However, the COVID-19 pandemic reminds us that nature respects neither law nor rights or good or bad government and confronts us with the realisation that every person in every country and across countries must co-operate with one another to conquer it.

Guest contributor For the 2019 Issue, two law professors were guest contributors of an article on company law and on tort, respectively.1 This year, the SCLR has a very distinguished guest contributor, the Right Honourable Lord Neuberger of Abbotsbury, the former President of the Supreme Court, who has written an article “Is Implying a Term into a Contract an Aspect of Contractual Interpretation?”. His contribution is definitely a big plus for the SCLR and enhances its standing as a comparative law review. The article is a response to Lord Hoffmann’s article on strict contractual interpretation and implied terms under English law, as decided by both Lord Neuberger and Lord Hoffmann in Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd,2 and Attorney General of Belize v Belize Telecom Ltd respectively.3 The article also makes reference to and expresses its agreement with the decisions of the Singapore Court of Appeal in Foo Jong Peng and others v Phua Kiah Mai4 and Sembcorp Marine

v PPL Holdings Pte Ltd.

5

However, what is interesting, and perhaps significant for the development, or rather the clarification, of principles of the common law, is that although Lord Neuberger’s article is a wellreasoned rebuttal of Lord Hoffman’s approach in that he considers the approach in Marks and Spencer preferable (and therefore “correct”)6 to Lord Hoffman’s approach in Belize Telecom, he eschews any intention of departing from the traditional approach of letting the “ judgments

speak for themselves, for better or for worse: it risks confusion and uncertainty when a judgment Professor Walter Woon on ‘Lift Not the Painted Veil’, and Professor Ken Oliphant on ‘Liability for Road Accidents Caused by Driverless Cars’ [2015] UKSC 72 [2009] 1 WLR 1988 [2012] 4 SLR 1267 [2013] 4 SLR 193 Lord Neuberger’s analysis was followed the Supreme Court in an unanimous judgment in 11-13 RC Ltd v Duval at [2020] UKSC 18 at [26].

1

2 3 4 5 6

1

Singapore Comparative Law Review is cited in court if, in a subsequent extra-curial statement, the judge concerned appears to have added to, subtracted from, or varied what he or she said in the judgment – and, of course, confusion and uncertainty are inimical to the rule of law.” The problem, of course, is that not all judgments speak for themselves as many are not models of clarity. Indeed, Lord Neuberger says that Lord Hoffmann’s judgment in Belize Telecom can fairly be read either way on this point (i.e., it may or may not be intended to change the law of contractual interpretation in relation to implied terms). There is no judicial policy reason why judges should be reticent in defending their own judgments especially when they have legitimate reasons to disagree with a later decision which purports to disapprove of his decision for reasons with which he cannot agree. This is not the same thing as adding to or subtracting from or varying his own judgment.

This is precisely what Lord Neuberger’s article does.

Contracts and contractual interpretation In her article “A Comparative Study of the English and Singaporean Approaches to Contractual Interpretation”, Jeanette Faith Lee takes a comparative look at English law, which is primarily common law, and Singapore law, which is primarily statutory under the Evidence Act, on a different aspect of contractual interpretation, i.e., textualism and contextualism. Citing Rainy Sky v Kookmin Bank, 7 Arnold v Britton 8 and Wood v Capita 9 she concludes that the English approach is unclear. In contrast, she viewed the Singapore approach, as evidenced by three decisions of the Court of Appeal, viz., Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd10, Yap Son On v Ding Pei Zhen 11 and Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd12, as reflecting the Singapore judiciary in growing an autochthonous legal regime.

Arbitration In her article, Fair and Ohpen Dealings: The Enforceability of Tiered Dispute Resolution Clauses, Jenna Tan discusses English law and Singapore law on tiered ADR clauses in contracts, comparing the decisions in Ohpen Operations13 and Tomolugen Holdings v Silica Investors. 14 Unfortunately, the comparison is not apt because Tomolugen was not concerned with a tiered ADR clause. The relevant Singapore decisions is Ling Kong Henry v Tanglin Club 15 which applied the statement of the Court of Appeal in International Research Corp PLC v Lufthansa

Systems Asia Pacific Pte Ltd. 7 7 8 9 10 11 12 13 14 15

16

[2011] UKSC 50 [2017] UKSC 24 [2015] UKSC 36 [2017] UKSC [2008] SGCA 27 [2013] SGCA 43 [2015] SGCA 55

Ohpen Operations UK Ltd v Invesco Managers Ltd [2019] EWHC 2245 Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2016] 1 SLR 373 [2018] SGHC 153. See also PT Selecta Bestama v Sin Huat Huat Marine Transportation Pte Ltd [2016] 1 SLR

72.

[2014] 1 SLR 16

2

Singapore Comparative Law Review

In “Covid-19: Implications for Contracts under Singapore and English Law ”, Nicole Lim discusses the issue as to whether COVID-19 is a force majeure event in contracts governed by English law and Singapore law. The article analyses the relevant English and Singapore case law on force majeure, frustration, cancellation of events, and causation which should be very useful as a starting point for further analysis by any lawyer who has to advise on the subject. Much depends on the specific wording of the contract and/or its contents or subject matter. Recognising the laws and also the law’s delay or inherent difficulty in providing immediate answers to problems that need immediate resolution, the Singapore and UK parliaments have stepped in to enact legislation to provide temporary relief for parties who are unable to fulfil their contractual obligations due to a material extent to COVID-19. Many of these legal issues are better solved by mediation, rather than litigation or arbitration.

Criminal law and punishment In the area of criminal law, some old clothes have been given an airing in this issue. In his article “The Publication of Prosecutorial Guidelines and Duties; A Necessary ‘Evil’ of the Criminal Justice System in Singapore”, Benjamin Khoh weighs the benefits and the detriments to the criminal justice system of Singapore in making public the prosecutorial guidelines of the Public Prosecutor and concludes that they should be published as it is in the public interest that there should be transparency and accountability in the way prosecutorial decisions are made. It is also argued that the non-publication of prosecutorial guidelines makes it difficult to challenge “abusive” or “unlawful” prosecutions by way of judicial review. More interesting is the proposal that Parliament should introduce new legislation to direct the AGC to lay down rules and guidelines to provide a ‘full code test’ and a ‘threshold test’ similar to the ones in the UK, while retaining sufficient tracks of discretion to enable flexibility. Apart from its unrealism, the proposal raises an interesting constitutional question as to whether Parliament has the power to enact such a law given the terms of Art 35(8) of the Constitution.

In his article “On Knife’s Edge—The Operation of Duress and Necessity as Murder Defences”, Marcus Ho discusses the law in England and in Singapore on these two acts as defences to the offence of murder. In both jurisdictions, necessity is a defence but not duress is not. These are difficult issues of law and morality in the context of human behaviour, of acts heroism and cowardice, altruism and selfishness, where the instinct is to preserve one’s own life and not to sacrifice it for another’s. There is also the instinct of kinship to preserve the life of a kin over that of a stranger’s. If a father is given the choice of killing his child in order to save the child of a stranger, or 10 children of strangers, no one can know what his decision would be. The law may make a distinction between the culpability of a person acting out of necessity (to save one’s own life over than of another) and one acting out of duress (to save a kin’s life over that of a stranger’s), abstract. But, should it? One answer may be to focus not so much on culpability or liability in law but on the punishment. In the UK, where there is no capital punishment, legal distinctions are important, but they are not life and death issues for persons charged for murder. In Singapore, where the death penalty is mandatory (until the recent amendment to s 300(c) of the Penal Code), it is a life and death issue for the accused. Unfortunately, an offence cannot be defined in terms 3

Singapore Comparative Law Review of the prescribed punishment. The only answer seems to be to make the death penalty discretionary and leave it to the good sense of the judge to determine the appropriate punishment in cases where the defence of necessity or duress fails. The other alternative lies in the good sense of the Public Prosecutor to charge the accused with a lesser offence in exercise of his prosecutorial discretion.

In his article “Questioning our Insanity: An Examination of The M’Naghten Rules and the Singapore Equivalent”, Clinton Wee discusses the defence of insanity under English law and Singapore law and suggests that the Singapore model is to be preferred. 17 Unsoundness of mind is a flawed mental condition that is capable of being determined by doctors and psychiatrists but the problem arises, as it invariably does, when the defence is raised. How is a judge to determine whose opinion is right, since he can only go by the opinions of medical experts? Should judges play God in such cases? Again, it may be said that in the UK, it is not a life and death issue for the accused as even if the defence fails, he will only be imprisoned. But, not in Singapore. If his defence fails, he will be hanged if he is convicted of murder. Perhaps the answer lies in making capital punishment discretionary, as that will allow the judge to consider with the utmost care whether the accused deserves to die for homicide.

In his article “Disclosure, Detection, Decriminalisation: HIV transmission as a crime in the United Kingdom and Singapore”, Pang Kar Lok looks at the law in both jurisdictions on criminalising HIV transmission. Having regard to the High Court’s interpretation of s 23(1) of the Infectious Diseases Act in GCP v Public Prosecutor,18 the author argues that the law “impedes societal progressiveness by limiting persons living with HIV from living their lives with certainty” and that “[v]agueness surrounding the extent of communication to obtain consent imposes unfair burdens on [such persons], who already contend with stigmatisation and, increasingly, stresses associated with courts’ arbitrary definitions of ensuring others are fully informed.” However, it should be pointed out that the Judge’s interpretation of s 23 was obiter because the District Judge’s finding that the appellant had not informed his partner that he had HIV was not disturbed on appeal.

In her article “The Mandatory Death Penalty for certain Drug-Related Offences in Singapore ”, Charmaine Low revisits the question of whether, “even if deterrence is prioritised as a sentencing consideration, it is worth considering ... how should one punish the offender so as to best achieve that goal” since “it cannot be proven beyond reasonable doubt that the death penalty has a uniquely effective deterrent value.” The author asks whether “this is a goal worth pursuing to the very end in light of the significant trade-offs that the mandatory death penalty brings”. However, she offers no answer to this question.

Agency and vicarious liability

Section 84 of the Penal Code provides as follows: Nothing is an offence which is done by a person who, at the time of doing it, by reason of unsoundness of mind, is incapable of knowing the nature of the act, or that he is doing what is either wrong or contrary to law.

[2019] SGHC 153 17

18

4

Singapore Comparative Law Review In his article “Blurred Lines: No Distinction between Agency and Vicarious Liability in Fraud”, Ng Sze Hian compares the decisions of the Singapore courts in Ong Han Ling v AIA19 and Skandinaviska Enskilda Banken AB v Asia Pacific Breweries20 with the decisions of the English courts in Armagas Ltd v Mundogas S.A.21, and Winter v Hockley Mint22. The author prefers the Singaporean approach in applying a two-stage test as it is perfectly capable of determining whether it is fair, just and reasonable to impose liability on a principal, without relying on agency principles.

“Having a unitary test for all torts creates certainty and prevents an overlap between tort and contract”.

Rule of law and ouster clauses In her article “Rule of Law and Executive Exemption from the Personal Data Protection Act 2012”, Jenn Zhou XiaoJian examines the scope of the legislation in the context of the rule of law according to Joseph Raz and A V Dicey, and the generality of law as advocated by Friedrich Hayek and Paul Powder, and concludes that exempting public agencies for the purposes of the Act is justifiable for the reasons given by the Government.23 In her article “Judicial Review of Errors of Law: Privacy International and Nagaenthran”, Yu Jiaqi discusses the latest UK Supreme Court decision in R (Privacy International) v Investigatory Powers Tribunal (“Privacy International”) 24 and the Singapore High Court decision in Nagaenthran a/l K Dharmalingam v PP25 on ouster clauses in legislation. In the UK case, s 67(8) of RIPA provides:

“Except to such extent as the Secretary of State may by order otherwise provide, determinations, awards and other decisions of the Tribunal (including decisions as to whether they have jurisdiction) shall not be subject to appeal or be liable to be questioned in any court.)

The Supreme Court, in a majority decision, held that s 67(8) does not oust the supervisory jurisdiction of the High Court for errors of law. The exercise is not one of ordinary statutory interpretation, as there is a common law presumption against ousting the jurisdiction of the High Court. The plain words of the subsection must yield to the principle that such a clause will not protect a decision that is legally invalid. Therefore, the exclusion in s 67(8) of RIPA applies only to determinations, awards, or other decisions that are not erroneous in law. Judicial review can only be excluded by the most clear and explicit words.

[2018] 5 SLR 549 (SGHC) [2011] 3 SLR 540 (SGCA) [1986] 1 A.C. 717 (HL) [2019] 1 W.L.R. 1617 (CA) [48] The Minister for Trade and Industry, Mr S. Iswaran, said: “Public agencies are not governed by the Personal Data Protection Act (PDPA) because there are fundamental differences in how the public sector operates compared to the private sector. While personal data is managed as a common resource within the public sector to enable a wholeof-government approach to deliver public services, the considerations are different in the private sector, where there is no such expectation of a holistic approach to the delivery of commercial services across organizations.”

[2019] UKSC 22 [2019] 2 SLR 0216 19 20 21 22 23

24 25

5

Singapore Comparative Law Review In the Singaporean case, the issue was whether s 33B(4) of the Misuse of Drugs Act has the effect of ousting judicial review of the legality of the Public Prosecutor’s determination whether or not to issue a certificate of substantive assistance. The Public Prosecutor’s determination is a matter of life and death for the offender. In a somewhat convoluted and inconclusive judgment, the High Court held (at [70]) that s 33B(4) is a constitutionally valid ouster clause, but “it remains in principle possible for the ouster clause to be circumvented when the Public Prosecutor’s determination is tainted by a jurisdictional error of law [i.e., under Animismic]. It thus cannot be said that s 33B(4) of the MDA restricts judicial review of the Public Prosecutor’s decision not to issue a certificate of substantive assistance to only the limited grounds of bad faith, malice, and unconstitutionality that the ouster clause was valid.” Yu Jiaqi submits that the English approach could be considered by Singapore courts as an alternative to its current model. 26 However, the High Court decision and observations should now be read in the light of the Court of Appeal’s decision and observations that the court’s power of judicial review, which is a core aspect of the judicial power and function, would not ordinarily be capable of being excluded by ordinary legislation such as the MDA (at [71]]), and that s 33B(4) of the MDA does not have this effect of ousting the power of the courts to review the legality as opposed to the merits of the PP’s determination under s 33B(2)(b), at [77]. The Court of Appeal appears to have made a distinction between immunising the Public Prosecutor from suit in respect of his determination save on certain excepted grounds, and immunising the determination from judicial review.

Perhaps Yu Jiaqi may wish to write a follow up on the subject.

Intellectual property In her case note on the decision of the English High Court in “Warner Music UK Ltd and Others v TuneIn Inc”, Carol Yin discusses the meaning of “communication” and “targeting” in s 20 of the Copyright, Designs and Patents Act 1988 and concludes that this decision will provide significant guidance for communication to the public in Singapore’s copyright law.

Company law In his article “Reverse Veil Piercing: Jhaveri Darsan Jitendra V Salgaocar Anil Vassudeva ”, Ryan Chua discusses the failed attempt by the respondent to invoke “insider reverse veil piercing” to justify his lodging of caveats against the properties registered in the names of companies on the basis that he was the beneficial owner of all the shares in the companies held by the applicant.

The High Court held that insider reverse piercing is unsupported by authority and also contrary to principle. Piercing the veil in company law is not the norm. The norm is that a company is a separate legal person from its corporators. Law students and company lawyers should read Prof Walter Woon’s article “Lift Not the Painted Veil”27 on the principles and approaches relevant to the doctrine of piercing the corporate veil.

Torts 26 27

[2019] 2 SLR 216 [2019] SCLR 185

6

Singapore Comparative Law Review

Last year’s issue contains two articles for and against the doctrine of a loss of chance in medical negligence arising from a written moot “Does the High Court judgment in Carol Ann Armstrong introduce uncertainty into the doctrine of lost chance in Tort law?” In his article “Crossing the Rubicon: The Push for Loss of Chance Claims in Medical Negligence Cases”, Darien The takes another stab at piercing the heart of the doctrine in medical negligence by revisiting what he describes as the “obscurely-worded” judgment of the High Court. To recall, in that case, the plaintiff’s expert opined that the plaintiff had a 10-year survival rate between 68% to 80% if he had been properly diagnosed earlier, while the defendant’s expert suggested that this figure was below 50%. The High Court accepted the plaintiff’s expert’s assessment that the doctor’s misdiagnosis caused the plaintiff to “lose a fighting chance” and to die years earlier and did not accept the statistic of a “68% chance of surviving 10 years”. The Judge assessed that the plaintiff would have lived for another 4 years had he been properly diagnosed. In other words, it could be said that the Judge found that the plaintiff had lost the chance of living 4 years longer.

Accordingly, damages for loss of dependency and other claims were based on that finding of fact.

On appeal, the Court of Appeal held on the facts that negligent diagnosis had resulted in the loss of a “complete cure” for the deceased, and hence the doctrine of loss of a chance did not arise. 28 However, Darien is in favour of the doctrine on policy grounds. He argues that while it might be difficult to justify and formulate a principled approach, as a blanket rejection of the doctrine would leave deserving claimants uncompensated, and negligent defendants undeterred – effectively a twofold blow. He prefers the approach of Lord Nicholls’ dissent in Greg v Scott, that “[i]f the law were to proceed in this way it would deserve to be likened to the proverbial ass”.

In her article, “Pure Economic Loss: Lessons from Singapore?”, Wong Lei Yi refers to the law in the UK that denies recovery of pure economic loss arising from negligence (with the exception of the principle set out in Hedley Byrne v Heller & Partners29) and makes the point that there is merit in the approach of the Singapore Court of Appeal in Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency30 in enunciating a single test for claims in the tort of negligence (including for pure economic loss). The thesis of this article is that English courts could learn from the approach taken by Singaporean courts in order to alleviate arbitrariness in the law. This article will set out in individual sections the law in each jurisdiction and will analyse the reasons for the different approaches.

This issue of the SCLR lives up to its mission of highlighting the differences between the decisions of the UK courts and the Singapore courts in many areas of the law in spite of the common law being the basic foundation of both systems of law. Social, economic, religious, cultural, and even political conditions in the UK are not necessarily the same as that in Singapore even though we may share the same values. With a dedicated editorial team, the SCLR will continue to provide academic and professional value to our law students and practising lawyers who care to read the Armstrong Carol Ann v Quest Laboratories [2019] SGCA 75 at [192]: “Hence, but for the Respondents’ negligence, Mr Traynor would have been cured of his melanoma through the use of the SLNB procedure … The Appellant has succeeded in her primary argument on the Causation Question on the balance of probabilities on the facts. In the circumstances, we do not need to consider the Appellant’s alternative arguments or whether the Judge was correct to have had recourse to the minority’s reasoning in Gregg v Scott pertaining to the loss of a chance doctrine”.

28

29 30

[1964] AC 465 [2007] 4 SLR (R) 100

7

Singapore Comparative Law Review commendable efforts of the contributors of the articles and commentaries in each issue of the SCLR. Chan Sek Keong Chief Justice 2006-2012 Attorney General 1992-2006 Judge/Judicial Commissioner 1986-1992

8

Singapore Comparative Law Review

UNITED KINGDOM SINGAPORE LAW STUDENTS’ SOCIETY 2020 EXECUTIVE COMMITTEE

Noel Low

President

Soh Yun Wen

Selene Tanne

Vice-President

General Secretary

Carol Yin

Tan Xin Yi

Sponsorships Director

Finance Director

Tan Yan Shen

Kimberley Ng

Editor-in-Chief

Marketing Director 9

Singapore Comparative Law Review

SINGAPORE COMPARATIVE LAW REVIEW 2020 EDITORIAL BOARD

Editor-in-Chief

Tan Yan Shen

University of Oxford

Associate Editors

Marcus Ho

Philip Mahboobani

University of Cambridge

University College London

Phoenix Gay

Ryan Chua

University of Bristol

University College London

Pang Kar Lok

Pang Wenn Ler

University of Oxford

University of Bristol

10

Singapore Comparative Law Review

PRESIDENT’S ADDRESS Noel Low It has been an exciting year for the United Kingdom Singapore Law Students’ Society (UKSLSS), and we are proud to conclude it with the publication of this edition of the Singapore Comparative Law Review (SCLR). Formerly known as Lex Loci, this is the 15th year of the journal’s publication.

The SCLR is a student-run law journal with a comparative eye on legal developments in Singapore, the UK, and beyond. It enables students to develop and hone legal writing skills, and to keep abreast of developments in the legal landscape back home as they pursue their studies abroad. We are proud of the quality of work that the SCLR produces each year, which is credit to the rigorous editorial process and the dedication of our contributors.

The editorial team, helmed by Tan Yan Shen, has worked tirelessly to produce this edition of the SCLR. As you’ll soon discover, the product is something they can be proud of and a real testament to their ability. Needless to say, the SCLR is nothing without its writers as well. Special mention goes to the invaluable contribution by Lord Neuberger of Abbotsbury, and the gracious foreword by former Chief Justice Chan Sek Keong. There are also notable contributions by our alumni Nicole Lim and Charmaine Low who bring a perspective that comes with experience in the industry. I hope you find the SCLR engaging and gainful, and I hope that you will be inspired to get involved with similar endeavours.

The UKSLSS has had a fulfilling year. At the beginning of the academic year, the Vacation Scheme Help Desk organised with the Singapore Young Professionals Network Community (SYNC) in the UK had a large turnout of students who got a chance to meet and hear from alumni in the legal industry. We also organised our first-ever Christmas Lunch in London, where members had a chance to socialise while tucking into Singaporean food. Following that, we had the privilege to co-organise a Bar Careers Talk with the Honourable Society of the Middle Temple and the Law Society of Singapore, featuring barristers such as Wei Jian Chan and JernFei Ng QC of Essex Court Chambers. In the midst of the Covid-19 pandemic disruption, we were grateful to have alumni Koh Shang-Hsuen and Ong Hua Xin host a webinar on applying for training contracts in the UK. All this could not have been possible without the support of our generous sponsors. This includes event sponsorship by the Singapore Global Network, as well as various international and Singaporean law firms. Of these, we had the privilege of welcoming seven new sponsors this year and we are grateful for their trust and commitment. Going forward, we hope that our partnerships will grow stronger and provide meaningful opportunities for our members.

I encourage every Singaporean law student in the UK to tap on the opportunities that the UKSLSS has to offer. The society is an incredible platform to meet fellow students and to get a head start into the legal industry. It also serves as a priceless support network as you navigate your university experience. In this regard, I am grateful for the 15 university representatives this year that served as our conduit to students from the various universities.

Last but not least, I would like to thank the rest of the Executive Committee: Soh Yun Wen (Vice President); Selene Tanne (Secretary); Carol Yin (Sponsorships Director); Tan Xin Yi 11

Singapore Comparative Law Review (Finance Director); Kimberley Ng (Marketing Director); and Tan Yan Shen (Editor-in-Chief).

They have been indefatigable in serving the society, and I am grateful for the chance to work alongside them. As we pass on the leadership to the next committee, I am confident that the UKSLSS will continue to grow from strength to strength in serving the student community.

Happy reading!

Yours sincerely, Noel Low

President

12

Singapore Comparative Law Review

EDITORIAL FOREWORD Tan Yan Shen Dear Readers, It is the great pleasure of the Editorial Committee and I to present this year’s iteration of the Singapore Comparative Law Review. We are once again privileged and honoured to have the former Chief Justice Chan Sek Keong to write the foreword for the journal and serve as the patron of our society. We are also grateful to our sponsors, without whom such an endeavour would be impossible.

This year marks the 15th edition of the Singapore Comparative Law Review since its original inception as Lex Loci in 2006. In one and a half decades, much has happened in the legal world in both the UK and in Singapore — since the founding of this journal, three English and one Singaporean Chief Justices have come and gone and the Appellate Committee of the House of Lords has been replaced by the United Kingdom Supreme Court. Yet, one thing has remained constant throughout these changes and that is the work of the Singapore Comparative Law Review. Since its inception, the Singapore Comparative Law Review has striven to create a space for Singaporean students and young practitioners to showcase their immense jurisprudential knowledge31 and conduct a comparative study of issues at the forefront of the law. In fact, its name change in 2018 from Lex Loci to its current name was meant to ‘more accurately frame the publication’32 to reflect this comparative nature of our publication.

It is thus my pleasure to report that the Singapore Comparative Law Review will continue this mission in and despite these difficult times. We see much uncertainty in the world around us today, ranging from the uncertainty in the contractual positions of commercial parties owing to the COVID-19 crisis to the uncertainty of the future of Hong Kong law. Yet, our authors this year have remained undeterred by the uncertain world around them and have remained steadfast in their comparative analysis of the different legal issues that they have chosen to tackle.

This year, we have received 15 excellent submissions on various issues in the law, ranging from issues as grave as the mandatory death penalty for certain drug-related crimes in Singapore to the imposition of digital services taxes in various countries all over the world. We have elected to categorise these submissions into “Articles” and “Case Notes”. We have also subsumed the category of 'Commentaries', which was newly created last year to deal with the legal issues from a sociological slant, into the category of 'Articles'. This is because we feel that it is difficult and perhaps somewhat arbitrary to insist on a clean division between law and sociology as the two are often inextricably linked. The increasing number of submissions that approach issues, especially that in public law, from both a legal and sociological perspective, is a testament to our beliefs.

We also have the immense honour of publishing a thought-provoking article by the former President of the United Kingdom Supreme Court, Lord Neuberger of Abbotsbury, on the interpretation of contracts. This article was written in response to Lord Hoffmann’s article on strict contractual interpretation and implied terms under English law published in the Law 31 32

Singapore Comparative Law Review 2018,13

Ibid

13

Singapore Comparative Law Review Quarterly Review33. We believe that Lord Neuberger’s article will lend much insight into this issue in both Singapore and English law.

Before I conclude, I would like to express my gratitude to the Editorial Committee. Publishing the journal in such difficult times is a taxing task that is greatly alleviated by their immense help.

I would thus like to give my thanks to all of the members of the Editorial Committee in helping me with this onerous task.

Yours Sincerely, Tan Yan Shen

Editor-In-Chief

33

'Language and Lawyer' [2018] 134 LQR (Oct) 553

14

Singapore Comparative Law Review

Articles

15

Singapore Comparative Law Review

IS IMPLYING A TERM INTO A CONTRACT AN ASPECT OF CONTRACTUAL INTERPRETATION? Lord Neuberger of Abbotsbury

INTRODUCTION There are, at least according to a traditional approach, three principal tools available to lawyers and judges when determining the nature and extent of the rights and obligations of the parties under a commercial contract. They are (i) interpretation (to which, in order to avoid what would otherwise be a justifiable accusation of tilting the playing field, I will refer as ‘strict interpretation’), (ii) implication of terms, and (iii) rectification. This short article is concerned with the contention that this traditional approach is wrong to the extent that strict interpretation and implication of terms are in fact part of the same exercise, and (maybe) are even subject to the same rules.

In a stimulating article in the Law Quarterly Review 1 in support of this contention, Lord Hoffmann explained why he disagreed with the view expressed by the UK Supreme Court (or at least by the majority of the Justices) in the 2015 Marks and Spencer case2 (“Marks and Spencer”), which was to the effect that what I have called the strict interpretation of contracts and the implication of terms into contracts are “different processes governed by different rules”. 3 I have been invited by the editors of the Singapore Comparative Law Review to respond to Lord Hoffmann’s article, and I do so, albeit with some diffidence. I have real concern about the wisdom of judges (or former judges) outside court commenting on their own past judgments, and

1 2

Language and Lawyers 134 LQR 553 Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd [2015] UKSC 72, [2016]

AC 742 Ibid, [26] 3

16

Singapore Comparative Law Review while my four colleagues4 all made substantial contributions to the leading judgment in Marks

and Spencer, it was given by me. Judges should generally let their judgments speak for themselves for better or for worse: it risks confusion and uncertainty when a judgment is cited in court if, in a subsequent extra-curial statement, the judge concerned appears to have added to, subtracted from, or varied what he or she said in the judgment – and, of course, confusion and uncertainty are inimical to the rule of law.

To rely on the fact that I am responding to an article in which Lord Hoffmann was defending his own analysis in the Privy Council Belize Telecom case5 (“Belize Telecom”) would scarcely be a justification: two wrongs would not make a right. A better defence and one on which I rest my case (and it applies equally to Lord Hoffmann in relation to his article), is that nothing I say can (I hope) fairly be said to cut down, add, or alter the thrust of, what I said in Marks and Spencer.

However, it is only right to acknowledge that in the discussion below I do add to what I said in my judgment in that case, but not, I hope, in any way that alters the effect of any part of that judgment.

THE TRADITIONAL VIEW AND LORD HOFFMANN’S VIEW In Belize Telecom6, Lord Hoffmann made it clear that he considered that the question whether to imply a term was part of the interpretation exercise. Decisions of the Privy Council are accorded great weight by the UK Supreme Court, and of course most, indeed very frequently all, the members of a Privy Council panel are UK Supreme Court Justices (and, at the time of Belize

Telecom were Law Lords). However, Privy Council decisions are not binding on the UK Supreme Court and in Marks and Spencer, the majority of the Justices decided to adopt and follow the traditional approach rather than that favoured by Lord Hoffmann. In taking that view, the UK Supreme Court was, of course, following in the footsteps of the Singapore Court of Appeal in the 2012 Foo Jong Peng case7 (“Foo Yong Peng”), as affirmed in the 2013 Sembcorp

Marine case.

8

4 5 6 7 8

Lord Clarke, Lord Sumption, Lord Carnwath and Lord Hodge Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988 Ibid, [21] Foo Jong Peng and others v Phua Kiah Mai [2012] 4 SLR 1267 Sembcorp Marine v PPL Holdings Pte Ltd [2013] 4 SLR 193

17

Singapore Comparative Law Review As Andrew Phang Boon Leong JA said, when giving the judgment of the Court of Appeal in Foo

Jong Peng , until Belize Telecom, “[t] he law relating to implied terms in fact was … thought to 9

be well established, albeit not entirely certain in its precise ambit of application”, namely that there were “two traditional tests, viz, the ‘business efficacy’ test and the ‘officious bystander’ test”, at least one of which had to be satisfied before a term could be implied. As he went on to explain10, Lord Hoffmann in Belize Telecom said that these two tests were “not … to be treated as different or additional tests” and that, as with normal interpretation, “[t]here is only one question: is that what the instrument, read as a whole against the relevant background, would reasonably be understood to mean?”.

Lord Hoffmann’s analysis undoubtedly treats the implication of terms as part of the exercise of interpretation. What is less clear is whether, as the Court of Appeal thought in Foo Jong Peng11 and a number of academics12 have concluded, he also considered that the test for implying terms effectively involved the same approach as normal interpretation. However, given that there are other judgments13 and academic articles14 which express the view that Belize Telecom was not intended to change the law in this radical way, it may come as no surprise when I say that, at least in my opinion, Lord Hoffmann’s judgment can fairly be read either way on this point.

So, the decision in Belize Telecom can be seen as raising two issues, one of which could be characterised as substantive, and the other of which as procedural. The first is whether the traditional tests of “business efficacy” and “officious bystander” for deciding whether to imply a term are still good law. The second is whether the question of whether to imply a term is part of, or separate from (and indeed to be considered after) any question of strict interpretation. I shall consider those two questions in turn, although I will focus more on the second issue.

ARE THE TRADITIONAL TESTS FOR IMPLYING A TERM STILL GOOD LAW?

n7, [27] Ibid, [29] Ibid, [29]-[35] E.g. Paul S Davies, ‘Recent developments in the law of implied terms’ [2010] LMCLQ 14; John McCaughran, ‘Implied Terms: The Journey of the Man on the Clapham Omnibus’ [2011] CLJ 607; Goh Yihan, ‘Terms Implied in Fact Clarified in Singapore’ (2013) 2 JBL 237 See Marks and Spencer, n2, [73] and [77] (Lord Carnwath and Lord Clarke) Lord Grabiner QC, The Iterative Process of Contractual Interpretation (2012) 28 LQR 41, 58–61 9

10 11 12

13 14

18

Singapore Comparative Law Review The argument that it is now easier to imply a term because the strict “business efficacy” and “officious bystander” tests are no longer applicable as a result of Belize Telecom suffers from the disadvantage that it has very little support indeed in the cases or among academics. The main debate on this issue is whether that was the effect of Lord Hoffmann’s analysis, or whether Lord Hoffmann did not intend to change the substantive law on implied terms. Those who interpret

Belize Telecom as having the effect of changing the test to be applied when deciding whether to imply a term almost all disagree with that conclusion – see for instance Foo Jong Peng and the articles which have interpreted Belize Telecom as seeking to change the substantive law.15 On the other hand, those who interpret Belize Telecom as not seeking to change the substantive law clearly think that it was right not to do so – see the judgments in Marks and Spencer and the relevant academic articles.16 In the Sembcorp case17, Sundaresh Menon CJ giving the judgment of the Court of Appeal referred to some of the conflicting views and effectively concluded that

Belize Telecom should not be followed if it purported to change the law.

18

It appears to me to be clear that the almost unanimous judicial and academic view that the original stringent tests for implying a term remain unaffected by the judgment in Belize Telecom is correct.

The reasons for this have been very well expressed and analysed in the judgment of the Court of Appeal in Foo Jong Peng19 as well as by Professor Goh Yihan in his 2013 article20. In summary terms, those reasons are both pragmatic and principled. So far as pragmatism is concerned, certainty and predictability are very important features of any civilised legal system, and, at least until Belize Telecom, the law on implied terms has been understood and applied in a consistent way in all common law jurisdictions, as Andrew Phang Boon Leong JA said, when giving the judgment of the Court of Appeal in Foo Jong Peng.21 In addition, application of the now-well established approach to the substantive law of implied terms has not been controversial: there has been no movement for change from the international, or indeed any national, business community. Turning to principle, it seems right that anyone seeking to impose a duty or grant a right under a contract on the basis of words which are not in the contract, should face a high hurdle, and in particular a significantly higher hurdle than someone seeking to impose a duty or grant a right under a contract on the basis of words which are included in the contract.

15 16 17 18 19 20 21

n12 n14 n8, [77]-[82] Ibid, [82] n7, [29]-[36] n12 n9

19

Singapore Comparative Law Review Having reconsidered, for the purposes of this article, what Lord Hoffmann said in British

Telecom, I am, as I have said, in some doubt whether he was intending to alter the substantive law on implied terms. I strongly doubt that he was intending to do anything as radical (and, in my respectful view at least, as misguided) as to suggest that reasonableness was the only requirement that had to be satisfied before a term could be implied. (Of course, reasonableness can come in all sorts of shapes and sizes, but it is clearly a looser, probably a much looser, test than the established tests.) But I do think that, intentionally or otherwise, the effect of his judgment, if applied, would be to weaken the strictness of the well-established tests for implying a term. That is not only because of what Lord Hoffmann said in the passage quoted above from Foo Jong

Peng. It is also because I believe a loosening of the test would follow if the law followed Lord 22

Hoffmann’s approach on the procedural issue, to which I now turn.

IS IMPLICATION PART OF INTERPRETATION: THE NATURE OF THE ARGUMENT Turning then to the issue whether (to use shorthand) implication is part of interpretation, it is right to begin by getting one point out of the way. As with many arguments which lawyers (and indeed others) get stuck into, at least at one level the dispute on this issue simply involves a definitional question on which the two opposing views are equally valid. The answer to the question, at least when it is viewed academically, ultimately depends what one means by “interpretation”.

As intimated in Marks and Spencer23, I accept that the word “interpretation” can as a matter of language cover the implication of terms. As Lord Hoffmann says in his article, implying terms is part of the exercise of working out the effect of a contract by reference to the same factors as strict interpretation, namely by considering the question, be it one of strict interpretation or of implication of terms, by reference to the words used by the parties, the surrounding circumstances known to both parties and commercial common sense – but not, as is permitted where rectification is in issue, the negotiations leading up to the contract. In that sense, one can be said to be interpreting the contract when considering whether to imply terms, and if so what terms.

22 23

n10 n2, [26] – [29]

20

Singapore Comparative Law Review Equally, it seems to me that the concept of “interpretation” can fairly be said not to extend to implying terms, because, effectively by definition, the words in the contract do not, as a matter of language, extend to an implied term, and when one is interpreting a contract, one is seeking to identify the meaning of the words which the parties have used. Lord Bingham, as Bingham LJ, expressed the point tellingly in 1995 in the Philips Electronique case24 in a passage cited in my judgment in Marks and Spencer 25 and by Lord Hoffmann in his article: strict interpretation involves the court “attribut[ing] the true meaning to which the parties have expressed their contract”, whereas implication of terms involves “the interpolation of terms to deal with matters for which, ex hypothesi, the parties themselves have made no provision”. As Bingham LJ went on to say, “It is because the implication of terms is so potentially intrusive that the law imposes strict constraints on the exercise of this extraordinary power”. Lord Steyn made the same points in the 2001 Equitable Life case26, when he said that it was “necessary to distinguish between the processes of interpretation and implication” in that interpretation involves “assign[ing] to the language of the text the most appropriate meaning which the words can legitimately bear”, and that “[t]he legal test for the implication of such a term is a standard of strict necessity”.

At the risk of being a little glib, Lord Hoffmann’s view in Belize Telecom, and as supported in his article27 can be said to be supported by the notion that interpretation involves construing the contract as a document in its documentary, factual, and commercial context (which would, at least arguably, include implied terms), whereas the traditional view is consistent with the notion that interpretation involves construing the words which the parties have used in the contract in their documentary, factual, and commercial context (which would appear to exclude implied terms).

IS IMPLICATION PART OF INTERPRETATION: WHY INTERPRETATION SHOULD BE DISTINGUISHED FROM INTERPRETATION Given that I accept that the concept of “interpretation” may or may not apply to implying terms, the obvious question is why I favour the view that, at least when it comes to contractual issues, judges should treat strict interpretation as a separate exercise from implication. My view is not 24 25 26 27

Philips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472, 481 n2, [29]

Equitable Life Assurance Society v Hyman [2002] 1 AC 408, 458 n1

21

Singapore Comparative Law Review based on philosophical principle, nor is it based on linguistic purity. And it is not, at least primarily, attributable to the fact that Lord Bingham and Lord Steyn have made it clear that they consider that it is the right analysis. Having said that, not only is it reassuring to have their support, but the fact that they have clearly and authoritatively articulated the law in the English Court of Appeal House of Lords does at least mean that the UK Supreme Court, should be very slow to depart from what they say in the interest of certainty - a very important commodity in the law, as I have already intimated. As for other common law jurisdictions, the same point can be made, and indeed the point was made in relation to Singapore in Foo Jong Peng.28 My view that the traditional distinction between strict interpretation and implication of terms is primarily based on practicality, and in that respect I believe that my approach chimes with the time-honoured traditions of the common law, which is to respect, and where possible to give effect to, practical considerations. However, my view is also based on principle. So far as my specific reasons are concerned, while the point I have just made about certainty undoubtedly carries weight with me, I think that there are four reasons for my view (although the third and fourth reasons may be manifestations of the first two).

First, the approach I favour reminds judges and lawyers of the difference between the proper approach to questions of strict interpretation and the proper approach to questions as to the implication of terms. Strict interpretation simply involves resolving a dispute as to the effect of a provision in a contract by deciding whose construction of the words of the centrally relevant provision (or provisions) accords better with those words as used in that provision (or those provisions) when assessed in their documentary, factual, and commercial context. Neither of the competing parties can rely on any presumption (although often one party can – and sometimes both parties try to - pray in aid the prima facie more natural meaning of the words). By contrast, a party seeking to imply a term must face up to the fact that it has to satisfy the stringent test so clearly identified by Bingham LJ and Lord Steyn in the passages quoted above 29, and in particular that a term can only be implied if (using shorthand again) it is necessary or obvious, and if it can be stated with reasonable precision.

Secondly, the separation of strict interpretation from implication involves imposing a temporal sequence as between the two exercises, a sequence which logically reflects the nature of the distinction between what is actually involved in the two exercises. One should not be delving into

28 29

n7, [36] referring back to [27]-[28] n26 and n28

22

Singapore Comparative Law Review a question of whether to imply a term into a contract until one has decided what the various express provisions of the contract mean without implying any term. It is only when there is an arguable “gap” as a result of strict interpretation that it is appropriate to consider whether a term can be implied. Accordingly, it appears to me to follow that one cannot decide whether to consider implying a term until one has ascertained whether there is indeed a gap, and one cannot ascertain whether there is a gap until one has carried out an exercise of strict interpretation. The fact that, if, after deciding that it may well be appropriate to imply a term, one then sometimes needs to investigate whether a proposed implied term has any effect on any of the other provisions of the contract as strictly interpreted does not invalidate this point. On the contrary: it emphasises the importance of first carrying out a strict interpretation exercise without addressing any question of implication, and only then addressing the implication question.

Thirdly, Lord Hoffmann’s approach has led to confusion. Thus, a number of judges and academics have interpreted the judgment in Belize Telecom as approving a more flexible approach than that stated by Bingham LJ and Lord Steyn to the question of whether a term can be implied. As I have already explained, that is, for instance, how the Singapore Court of Appeal saw the matter in its Foo Jong Peng and Sembcorp Marine judgments30. In Marks and Spencer, by contrast, Lord Clarke and Lord Carnwath were both of the view that Lord Hoffmann was not intending to alter the very well-established test for implying a term 31. I did not commit myself on that issue: in my judgment, I simply said that Lord Hoffmann’s judgment was “open to more than one interpretation”32. But for present purposes, my point is that, whatever Lord Hoffmann’s intention, the way his judgment has been interpreted demonstrates the danger of conflating the strict interpretation exercise with the exercise of implying terms. His approach has led to confusion, which is a powerful reason for doubting its correctness.

Fourthly, I believe that if Lord Hoffmann’s approach to the procedural issue was adopted, it would almost inevitably lead to a change in the substantive law – a loosening of the strictness of the established tests which have to be satisfied before a term can be implied into a contract. By conflating the exercises of strict interpretation and implication, there will be “leakage” between the mental approaches to the two exercises. In other words, the confusion which I have referred to when giving my third reason, would manifest itself in a different and potentially more malign form. As I said when discussing the question whether Belize Telecom was intended to alter the

30 31 32

n7 and n8 n2, [60] and [77] n2, [31]

23

Singapore Comparative Law Review substantive law: even if it was not so intended, it would, if followed, have that effect. And for the reasons I have already given, that would be a wrong turn for the law to take.

Thus, the sequential approach serves to assist anyone, whether a party, a lawyer, or a judge, concerned with a dispute about the effect of a contract, by helping to ensure that an approach is adopted to the resolution of the dispute, which is logically structured, which minimises the risk of confusing the different rules governing strict interpretation and the implication of terms, and which helps ensure that the law remains as clear and consistent as it can be in this field.

IS IMPLICATION PART OF INTERPRETATION: THE CASE OF RECTIFICATION This analysis is, I think, consistent with the approach that courts regularly adopt towards the third of the three principal tools available to a common law court when deciding on the effect of a contract, namely rectification. Many lawyers, including me, would disagree with the proposition that rectification can be treated as being in the same category as strict interpretation and implication, on the ground that rectification is different from strict interpretation and implication, because it does not involve deciding what the contract means: it involves, in effect, correcting the contract. But, as I see it, on analysis, that is a very similar point to the one I am making about the difference between strict interpretation and implication.

In principled terms, rectification, implication and strict interpretation all involve the court deciding what the rights and duties under the relevant contract are. In business terms, parties to commercial contracts want to know from their lawyers, or from the court, what their rights and duties are under their contract, and could not care whether the answer derives from strict interpretation, implication, or rectification. In so far as it can be said that there is no reason in principle why a court should not determine questions of strict interpretation and questions of implication at the same time, so it can equally be said that there is no reason why a court should not also determine any question of rectification at the same time.

It is true that rectification is different from strict interpretation in that, conceptually, it involves departing from the actual words which the parties have used, and, in practical terms, evidence of the understanding and intention of the parties is admissible. However, implication involves departing from the actual words of the contract (albeit less radically than rectification), and it involves different rules from strict interpretation (notably a requirement of necessity or self24

Singapore Comparative Law Review evidence). Further, few lawyers would challenge the notion that it is necessary for a court to decide what a contract means as a matter of strict interpretation and in relation to implying a term, before it can go on to consider any question of rectification.

Just as it is convenient in practice and appropriate in principle to strict interpretation (and, where it is in issue, implication of terms) before turning to any argument about rectification, so is it more convenient in practice and appropriate in principle to consider the strict interpretation of a contract before turning to any argument about implying a term into it (although the convenience factor is, I accept, more self-evident in the case of rectification).

CONCLUSION When I practised at the Bar of England and Wales 25 years ago, I specialised in property law.

The fact that the word “construction” could refer to both building works and the interpretation of contracts could sometimes give rise to misunderstandings or confusion. While analogies can be dangerous, it appears to me that the exercise of strict interpretation of a contract can be seen to be like assessing the extent and nature of a building, while implying a term is rather like adding an extension to a building, and rectification is comparable to some limited reconstruction of a building. Each is a separate exercise, and one only gets to erect an extension or to carry out reconstruction work if one is dissatisfied with the building in its present form. So, too, in the field of contracts, one only gets to arguments about implication or rectification if at least one of the parties is dissatisfied with the analysis of the contract as a matter of strict interpretation.

25

Singapore Comparative Law Review

THE PUBLICATION OF PROSECUTORIAL GUIDELINES AND DUTIES; A NECESSARY ‘EVIL’ OF THE CRIMINAL JUSTICE SYSTEM IN SINGAPORE Benjamin Khoh

INTRODUCTION Singapore is one of the few common law jurisdictions where prosecutorial guidelines and duties are not published. The official position of the Attorney-General Chambers (‘AGC’) is that the publication of guidelines would be distracting, redundant and cumbersome to the criminal justice system.1 Mr Aedit Abdullah, then chief prosecutor, claimed that calls for accountability were misguided, that guidelines without relevant details and scrutiny of the prosecution are redundant, and that such calls will increase litigation involving procedural points, thus hindering the efficiency of the criminal justice system.

Publishing prosecutorial guidelines allows for transparency in the decision-making process and increases accountability. The AGC must ensure that the exercise of their discretionary power is consistent and not abused. Most of the major common law jurisdictions have published prosecutorial guidelines and it is instructive to review their successes and failures to learn from them. This article will look to the United Kingdom for comparative purposes.

THE UNITED KINGDOM

Abdullah Aedit, ‘Publishing prosecutorial guidelines: promise, risk and reality’ The Straits Times (Singapore, 22 May 2013) 1

26

Singapore Comparative Law Review There are broad similarities in the exercise of prosecutorial discretion between the UK and Singapore. Empirical evidence in the UK has shown that limits placed on the power of discretion by publishing prosecutorial guidelines have resulted in a higher standard of protection of individual rights.2 In the last few decades, the UK has made significant progress in the reinvention of their criminal justice system, most notably, in 1986 when the Prosecution of Offences Act 1985 established the Crown Prosecution Service and codified the prosecution process.

Crown Prosecutors are legally obliged to follow the Code for Crown Prosecutors (‘the Code’) issued by the Director of Public Prosecution (‘DPP’) when exercising discretionary powers to prosecute. The current Crown Prosecution Service ‘Charging Guidance’ is the result of ongoing policy-maker revisions, which are also influenced by real-world, criminal justice developments. 3 The guidance provides for: (1) prosecutor responsibility for making charging decisions and providing advice and guidance in cases as the Guidance specifies; and (2) deciding whether applying the threshold test is appropriate. 4 This discretion is an essential tool that has been described as a strength of the system5 that equips prosecutors to effectively deal with matters in consistent ways as different cases will invariably involve diverse facts. 6 Failure to comply to the Code, or relevant Crown Prosecution Service guidelines can result in a court order to reconsider the decision.7 Thus, prosecutorial conduct is scrutinised from the time proceedings are instituted until their conclusion.8 In Purdy9, it was held that one had the right to know the requirements and prospects regarding the risk of potential prosecution. The claimant in Purdy was seeking to be euthanised in Switzerland, where it was legal. However, due to her deteriorating medical condition, it was physically impossible for her to travel without her husband’s assistance. There was substantial risk that her husband would be prosecuted under the Suicide Act 1961. She sought a clarification from the DPP on how the law was being enforced but her request was denied as the DPP believed that the existing guidelines were sufficient, and they had no legal duty to make further clarifications. The claimant made an application for judicial review and succeeded on appeal.

The court held that the DPP is required to promulgate an offence-specific policy identifying the A. Sanders, ‘The CPS – 30 Years On’, [2016] Criminal Law Review 82 Crown Prosecution Service (CPS) ‘Charging (The Director's Guidance) 2013’ (5 edn May 2013) <https://www.cps.gov.uk/legal-guidance/charging-directors-guidance-2013-fifth-edition-may-2013-revisedarrangements> [26 April 2020], ‘Guidance’, citing Police and Criminal Evidence Act 1984, s 37A Guidance, [2] Liz Campbell, Andrew Ashworth, Mike Redmayne, The Criminal Process (5 edn, OUP 2019), 78, 79 Ibid, 79 R (Corner House Research) v Director of Serious Frauds Office [2008] UKHL 60 R v Birmingham Crown Court, ex parte Ricketts [1991] R.T.R. 105, DC R (On the Application of Purdy) v DPP [2009] UKHL 45 2 3

th

4 5

th

6 7 8 9

27

Singapore Comparative Law Review facts and circumstances which the prosecutors will take into account when exercising the discretion to prosecute. This is to prevent abuse, have a measure of consistency, and provide some central control over the criminal law where it intrudes into areas that are particularly sensitive and controversial. The judgement in Purdy is an example where clear prosecutorial guidelines are necessary to uphold the rule of law – the law needs to be clear and accessible.

It is submitted that prosecutorial decisions are properly left to the prosecutor’s discretion in the UK because the prevailing framework is sufficiently robust to ensure that in most instances, prosecutors exercise their available discretion in ways that reflect their dual adversarial and interests of justice roles.

SINGAPORE In Singapore, the Public Prosecutor, through the Attorney-General, enjoys a near absolute discretion in criminal proceedings. The source of this discretion is provided by Art 35(8) of the Constitution of the Republic of Singapore, which states that ‘[t]he Attorney-General shall have power, exercisable at his discretion, to institute, conduct or discontinue any proceedings for any offence’. In Singapore, the power of discretion to prosecute is also subjected to judicial review.

In Prabagaran10 and Mohammed Ridzuan11, the court alluded to the possibility of this although there is a dearth of successful cases as such applications have been rare.

In theory, the discretion conferred by Art 35(8) is not – and should not be – absolute in providing the AGC with blanket immunity for scrutiny and accountability. However, it is difficult for this discretionary power to be subjected to judicial review due to the lack of prosecutorial guidelines to limit its ambit in practice. It is in the public interest that this power be exercised in accordance with the rule of law – laws must be open and clear to enable people to understand them and guide their actions. This must be implicit in the Constitution of Singapore 12 , and must be compatible with other provisions of the Constitution, such as liberty and equality provisions under Art 9 and 12 respectively. Art.9 provides that no one should be deprived of his life and personal liberty save in accordance with the law, while Art 12 provides that all persons are equal

10 11

Prabagaran a/l Srivijayan v Public Prosecutor [2016] SGCA 67 Mohammed Ridzuan bin MD Ali v Public Prosecutor [2014] SGCA 32

K Shanmugam, ‘The Rule of Law in Singapore’ [2012] 357(365) Singapore Journal of Legal Studies 1-3: “Singapore remains committed to the Rule of Law as a foundational principle”.

12

28

Singapore Comparative Law Review before the law and entitled to the protection of the law. There is potential for the discretionary power to be abused if it is exercised in an arbitrary manner.

In PP v Chum Tat Suan13, the accused was convicted of drug trafficking under s.7 of the Misuse of Drugs Act where he imported Diamorphine at a quantity which carried the mandatory death penalty unless he satisfied the two conditions under s.33B(1)-(3) of the Act: (1) The trial judge must be satisfied that the accused is merely a courier; and (2) the AGC issues a Certificate of Substantial Assistance. Only in satisfying both requirements, the mandatory death penalty can be replaced with life imprisonment. The accused made known to the court that he would prefer a death sentence over life imprisonment. The court in its deliberation then considered that if there is any possibility where the prosecution could withhold the certificate at his discretion to facilitate that request for humanitarian reasons. Chao Han Teck J held that the prosecution was ‘dutybound’ to act in a manner where the facts justify it, and to do otherwise will result in a breach of his duties. It is submitted that if the prosecution decided to withhold the certificate for humanitarian reasons, that decision can be subjected to judicial review under grounds of illegality, in that the Public Prosecutor took irrelevant considerations in arriving at the decision. A careful consideration of Chum Tat Suan can be interpreted to mean that the AGC cannot exercise the discretion arbitrarily and is bound to guidelines and duties.

While it is true to some extent to say that the discretion is already subjected to judicial review, such level of scrutiny is still inadequate. The absence of published guidelines makes it near impossible to scrutinise the prosecution’s decision-making process. This is highly relevant in cases where one is trying to establish certain forms of prosecutorial misconduct, for example, where one is alleging procedural impropriety. The nature of such an allegation rests its prospects on having specific and identifiable guidelines to refer to. It is unrealistic to try to prove that there was improper prosecutorial conduct when the rules governing the conduct are a mystery, accessible only within the AGC. Prosecutorial guidelines and duties must be promulgated to ensure transparency and accountability so that it can be effectively opened to challenges based on the various principles of judicial review, as well as to address other sensitive areas of laws (i.e. non-enforcement of 377A Penal Code)14.

This is not to say that the courts should question the merits of the Public Prosecutor’s exercise of the discretion power, but rather that the test should be one of impropriety and not merely on

[2016] SGHC 27 at [9] Jonathan Wong, ‘A-G: Prosecutor’s discretion on Section 377A not curbed’ The Strait Times (Singapore, 3 October 2018) 13 14

29

Singapore Comparative Law Review unreasonableness. On this basis, the prosecution’s conduct must be ‘… starkly improper such that no great investigation into the facts or decision-making process is necessary to establish it’. 15 Additionally, any claims that the charging decision was improper must be balanced against the equally reasonable contention that no individual has ‘… a monopoly of legal wisdom, and many legal points are properly arguable.16 A prosecutor’s permissible exercise of discretion should not be the subject of a successful legal challenge, unless the applicant demonstrate that in their exceptional case, the prosecution has committed a ‘clear and stark error as a result of which a defendant has incurred costs for which it is appropriate to compensate him'. 17 In his 2013 article18, Mr Abdullah expressed concerns that criminals will seek to exploit the system with the guidelines and spur growth in satellite litigation over procedural points. He also mentioned that it is not possible to formulate any guideline that will be comprehensive enough to measure against prosecutorial decision. These concerns revealed tacit assumptions that: (1) the degree of effort to formulate the guidelines is not warranted as it will not be comprehensive enough to deter exploitation and provide certainty; and (2) the increase in satellite litigation involving procedural points are mostly frivolous and cumbersome to the system.

Even if published guidelines are not comprehensive enough, it is not a valid argument for not having one. Publication of guidelines and duties will assist to properly define criminal laws to avoid or at least reduce any violations. This is part of the criminal process, which is part of procedural law, and should be as important as substantive criminal law as it assists in the fair and consistent application of fundamental justice, and this is imperative to the rule of law.

It is easy to forget that prosecutorial guidelines are not merely for those who may potentially commit crimes, but also for victims seeking to proactively seek justice for themselves. An effective criminal justice system must be interactive. Even if published prosecutorial guidelines temporarily spur satellite litigation, they will eventually result in a better system. Thus, it is irrational to fear progressive litigation.

Parliament should introduce new legislation to direct the AGC to lay down rules and guidelines.

The proposed guidelines should provide a ‘full code test’ and a ‘threshold test’ similar to the ones in the UK, while retaining sufficient tracks of discretion to enable flexibility. This will allow

15 16 17

R v Counsell (Geoffrey) [2014] 3 WLUK 332 (QB) Evans v Serious Fraud Office [2015] EWHC 1525 (QB); [2015] 6 WLUK 80 (QB) Ibid

Abdullah Aedit, ‘Publishing prosecutorial guidelines: promise, risk and reality’ The Strait Times (Singapore, 22 May 2013) 18

30

Singapore Comparative Law Review more grounds of judicial review to be more realistic in practice (i.e. abuse of the discretion, irrelevant considerations, and legitimate expectations).

CONCLUSION Prosecutorial guidelines are not redundant as they have a legitimate purpose in the criminal justice system – to provide sufficient limits for preventing the exercise of discretion in an arbitrary manner and hold state prosecutors accountable. While it is important to assume trust in our current government in exercising the powers granted to them by the Constitution, it is idealistic, and perhaps naïve to think that this trust should exist on the basis of blind faith. Blind faith is to be ignorant to logic and reasoning, and this is antithetical to the principles of law. This sets a dangerous precedent as there are no guarantees that the government of the day will be deterred from abusing such powers. Appropriate frameworks must be in place to ensure that the system is sufficiently robust. No one should be made to suffer the uncertainty of prosecution because it is a considerable inconvenience and burdens on citizens in a democracy.

31

Singapore Comparative Law Review

THE MANDATORY DEATH PENALTY FOR CERTAIN DRUG-RELATED OFFENCES IN SINGAPORE Charmaine Low1

INTRODUCTION At the 2014 Sentencing Conference, Chief Justice Sundaresh Menon cited two key questions a court is concerned with when sentencing an offender: “what is it seeking to achieve by punishing

this offender; and second, how should it punish the offender so as to best achieve that goal? ”

2

Menon CJ noted that sentencing courts should be guided by criminal legislation in answering these questions. However, they should also be guided by certain trite sentencing principles – one being that the sentence must be proportionate to the severity of the offence and the culpability of the offender3, and the other being that the punishment should be properly tailored to the individual, having considered the offender’s characteristics and the offence-specific circumstances4.

Here, I seek to argue that the mandatory death penalty for drug trafficking under the Misuse of Drugs Act5 (“MDA”) and the court’s duty to give effect to it lead to sentences that undermine the fundamental judicial principles cited above, warranting a careful re-examination of this Act.

The views and opinions expressed in this article are solely those of the author and are not the views and opinions of the author’s employer or any subsidiary or affiliated entity of the author’s employer.

1

Menon CJ, ‘Opening Address at Sentencing Conference 2014’. <https://v1.lawgazette.com.sg/2015-02/1239.htm> accessed April 15, 2020 2

3 4 5

Ibid Ibid

Cap 185, 2008 Rev Ed

32

Singapore Comparative Law Review THE LAW IN SINGAPORE—MISUSE OF DRUGS ACT 2008 Section 33(1) of the MDA6 provides a mandatory death penalty once the unauthorised trafficking of particular drugs exceeds a specified quantity, subject to two defences. In both defences, the convicted person first has to prove on a balance of probabilities that his trafficking role was merely that of a courier7. Additionally, to rely on the first defence, he must prove that he was suffering from such abnormality of mind that it substantially impaired his mental responsibility 8 - an evidently high threshold. For the second defence, the Public Prosecutor must certify that the convicted person has substantively assisted in disrupting drug trafficking activities 9 . It is challenging to successfully rely on the second defence as it focuses not on the offender’s best efforts or intentions, but on the outcome of whether his assistance actually disrupted drug trafficking. The Court of Appeal stated that it would in fact be ultra vires for a certificate of cooperation to be issued to a defendant who disclosed everything he knew, if his full cooperation did not actually disrupt drug trafficking 10 . Additionally, it is difficult to challenge the Public Prosecutor’s discretion– the threshold required is that of bad faith or malice 11. This, coupled with the presumption that prosecutorial discretion has been exercised in accordance with the law 12, and the fact that the Public Prosecutor is not required to give reasons for deciding not to issue a certificate13, makes challenging such a determination a formidable hurdle.

Even if these narrow exceptions have been made out, there is just one alternative sentence the court is empowered to prescribe – imprisonment for life14.

THE LAW IN ENGLAND AND WALES While the death penalty is not a sentencing option in England and Wales owing to its abolishment in 1969, drug trafficking is still punished severely. Drug trafficking covers a range of offences15, and the more serious ones, such as being concerned in the supply of Class A drugs, carry a maximum sentence of life imprisonment 16 . Additionally, s 110(2) of the Powers of 6 7 8 9

Read together with sch 2 of the MDA MDA, s 33B(2)(a); section 33B(3)(a) MDA, s 33B(3) MDA, s 33B(2)

10

Muhammad Ridzuan bin Mohd Ali v Attorney-General [2015] SGCA 53 at [48]

11

MDA, s 33B(4) See Ramalingam Ravinthran v Attorney-General [2012] 2 SLR 49 at [47] Ibid, [74]–[78] MDA, s 33B(1) Proceeds of Crime Act 2002, sch 2 Misuse of Drugs Act 1971, sch 4

12 13 14 15 16

33

Singapore Comparative Law Review Criminal Courts (Sentencing) Act 2000 (“PCCA”) imposes a minimum seven-year sentence for third-time traffickers of Class A drugs. However, this is not mandatory – the court may depart from this if there are specific circumstances which relate to the offences or the offender and would make the prescribed custodial sentence unjust in all the circumstances17.

SIMILARITIES BETWEEN SINGAPORE AND ENGLAND AND WALES A similarity underlying the criminal justice policies of Singapore and England and Wales is the need to ensure proportionality in sentencing. In Singapore, V.K. Rajah J (as he then was) stated that “[d]eterrence must always be tempered by proportionality in relation to the severity of the offence committed as well as by the moral and legal culpability of the offender.” 18 Meanwhile, the English and Welsh Sentencing Guidelines provide that a court is required to pass a sentence commensurate with the seriousness of the offence, mainly determined by the offender’s culpability and the offence’s harm.”19 In relation to drug policy, it is commonly accepted that deterrence is a key goal. The HM Government’s 2017 Drug Strategy states that tackling trafficking and distribution is part of the UK Government’s strategy to prevent drug misuse20. Meanwhile, Mrs Josephine Teo, Minister for Manpower and Second Minister for Home Affairs in Singapore, has stated that “[g]iven the highly negative consequences on society, Singapore imposes stiff penalties against drug trafficking.”21 DIFFERENCES While deterring drug trafficking is a common drug policy goal, the divergence in sentencing approaches between Singapore and England and Wales stems from the differences in the way such deterrence is both executed and prioritised in criminal justice policy at the legislative level.

The first difference, that of execution, questions how effective the mandatory death penalty is as a tool for deterrence, while the second difference, that of priority, questions how much

17 18

PCCA, s 110(2)

Tan Kay Beng v PP [2006] SGHC 117 at [31]

Sentencing Guidelines Council ‘Overarching Principles: Seriousness’ <https://www.sentencingcouncil.org.uk/wpcontent/uploads/Seriousness-guideline.pdf> accessed April 15, 2020 HM Government, ‘Drug Strategy’ <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/628148/Drug_s trategy_2017.PDF > accessed July 05, 2020 Josephine Teo, ‘Foreword of Home Team Journal Special Issuer: Spotlight on Drugs’ <https://www.mha.gov.sg/docs/default-source/default-document-library/home-team-journal-jan-2020issue17e1a5b21df14567924fbde0000a6c25.pdf > accessed July 05, 2020 19

20

21

34

Singapore Comparative Law Review deterrence as an objective should be pursued, even if it could be said that the mandatory death penalty is effective in achieving it.

How deterrence is achieved – is the mandatory death penalty an effective tool?

In Singapore, it is not just the existence of the death penalty, but its mandatory application that has been defended because of its perceived value in deterring drug trafficking. In the Second Reading of the MDA, law minister K. Shanmugam argued: “Can we conceive of a discretionary sentencing approach which maintains the deterrent value of the death penalty across the whole spectrum of drug trafficking activities? With the best of intentions, it will be difficult – I think it is impossible.”22 This has been supported by a study done by Singapore’s Ministry of Home Affairs (MHA), which found that although the absolute number of traffickers did not decrease after the mandatory death penalty was implemented in 1990, once potential confounders such as time trends in trafficking or enforcement activities were accounted for, the mandatory death penalty was associated with a substantial reduction in the probability that cannabis traffickers choose to traffic above the capital threshold23.

Comparatively, England and Wales adopts a more sceptical view on the death penalty’s deterrent effect. The HMG Strategy for Abolition of the Death Penalty, which sets out UK’s mission to decrease worldwide use of the death penalty, argued that “there is no conclusive evidence of its deterrent value”24. The aforementioned MHA study also noted that a few studies done in other jurisdictions found no evidence of the death penalty’s deterrent effect, and its own research data indicates that there was no statistically significant change in the percentage of opium traffickers who trafficked above the capital threshold after the mandatory death penalty was implemented 25.

Ultimately, there is an abundance of research studies to support both ends of this perennial

Shanmugam, Kasiviswanathan ‘Second Reading of the Misuse of Drugs (Amendment) Bill’, Singapore Parliamentary Debates <https://www.mlaw.gov.sg/news/parliamentary-speeches/response-by-minister-for-law--mr-k22

shanmugam--during-the-second-> accessed April 15, 2020 Yee Fei Chia ‘Deterrent Effect of Historical Amendments to Singapore’s Sanction Regime for Drug Trafficking’ <https://www.mha.gov.sg/docs/default-source/default-document-library/home-team-journal-jan-2020issue17e1a5b21df14567924fbde0000a6c25.pdf> accessed April 15, 2020 Foreign & Commonwealth Office ‘HMG Strategy for Abolition of the Death Penalty 2010 – 2015’ <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/35448/deathpenalty-strategy-oct-11-15.pdf > accessed April 15, 2020 Yee Fei Chia, ‘Deterrent Effect of Historical Amendments to Singapore’s Sanction Regime for Drug Trafficking’ <https://www.mha.gov.sg/docs/default-source/default-document-library/home-team-journal-jan-2020issue17e1a5b21df14567924fbde0000a6c25.pdf > accessed April 15, 2020 23

24

25

35

Singapore Comparative Law Review debate. Right now, it suffices to note that there is at least room for contention on the mandatory death penalty’s effectiveness as a deterrent.

Balancing of principles – to what extent should deterrence be prioritised?

The chasm between the sentencing approaches of Singapore and England and Wales also goes more fundamentally to divergences in how the legislature has prioritised deterrence against other sentencing principles. One of them is the need to ensure that the punishment is tailored to the individual by considering the offender’s characteristics and offender-specific circumstances, as cited from Menon CJ earlier. The scope for such tailoring is significantly limited in Singapore as the only characteristics allowed to be considered are that of the defendant’s abnormality of mind and substantive assistance. Even the latter focuses on outcomes rather than the offender’s characteristics, as the offender has no control over how his assistance is used to disrupt drug trafficking26. Under the MDA, a wide range of other characteristics and circumstances, such as undue influence of an offender, are irrelevant considerations for sentencing. Moreover, if the offender was caught trafficking drugs in any capacity other than that of a courier, even having substantially impaired mental responsibility would not be a relevant consideration 27. This lack of discretion also has ramifications on the proportionality principle. It is patently more difficult to ensure a proportionate sentence commensurate to individual culpability when a vast majority of circumstances reflecting this culpability are ignored. The mastermind behind a drug syndicate and a mentally impaired person who was exploited and influenced by that mastermind would both face the death penalty under the MDA. Moreover, even if an exception is made out on one of the two circumstances that can be considered, the court only can prescribe life imprisonment as an alternative – hardly a huge legroom to tailor a proportionate sentence.

The position in Singapore is clear – public protection, and the concomitant sentencing objective of deterrence, are paramount. Judicial discretion is deliberately restricted to maximise the death penalty’s deterrent value, even at the cost of allowing individual justice to be done on each case.

After all, the move to enact the MDA in its current form was a decision made even after taking into account this tension. As K. Shanmugam acknowledged in the Parliamentary debates, “In the context of drugs, the suggestion to give discretion to judges looks attractive at first sight: maintain

Kumaralingam Amirthalingam ‘The public prosecutor and sentencing: drug trafficking and the death penalty in Singapore’ 2018 Oxford University Commonwealth Law Journal 67 See Public Prosecutor v Sulaiman bin Jumari [2019] SGHC 210 at [92] where the court said that the Accused was found to have drugs for sale, and hence did not qualify for the alternative sentencing regime.

26

27

36

Singapore Comparative Law Review the death penalty for deterrence, but allow for mercy in individual cases.” 28 Yet, in the face of some MPs’ opposition to the death penalty, or its mandatory application, Deputy Prime Minister Teo Chee Hean summarised the stance that “[t]hey have looked at this from the point of view of the drug trafficker… We also have to look at abolition from the point of view of society and the victims of drug-related crimes.”29 The difference in the English and Welsh perspective can be most astutely observed by comparing divergences in policy even when the UK was at the height of its “crime control” phase. In 1993, a crime wave resulted in penal policy being characterised by “populism and its increasing punitiveness”30. Further attempts to reduce judicial discretion for crimes such as drug trafficking were introduced, eventually culminating in the PCCA where the minimum seven-year sentence now sits. Yet, even when “public protection” became the dominant idea in UK’s criminal justice policy31, the PCCA provided for much greater judicial discretion to depart from the minimum term, demonstrating that some judicial scope to do justice on the individual facts was enshrined.

EVALUATION OF THE MADATORY DEATH PENALTY The balance to be struck between public protection and the other sentencing principles is not an easy one. It is worth revisiting the first question posed by Menon CJ: what is one seeking to achieve by punishing the offender? The answer given by Singapore’s legislature in the form of the MDA is that public protection is paramount. While this has its merits, the more intangible trade-offs in undermining other key sentencing principles cannot be easily brushed aside. After all, these principles form the bedrock of Singapore’s trusted criminal justice system. Crucially, they play their most important role in situations like that of drug trafficking, where it is especially tempting to adopt the harshest stance possible to win the war on drugs. As Menon CJ noted in

Public Prosecutor v Low Ji Qing32,

Shanmugam, Kasiviswanathan, ‘Second Reading of the Misuse of Drugs (Amendment) Bill’ Singapore Parliamentary Debates <https://www.mlaw.gov.sg/news/parliamentary-speeches/response-by-minister-for-law--mr-k28

shanmugam--during-the-second-> accessed April 15, 2020 Teo Chee Hean, ‘Second Reading of the Misuse of Drugs (Amendment) Bill’ Singapore Parliamentary Debates. <https://sprs.parl.gov.sg/search/sprs3topic?reportid=bill-38> accessed April 15, 2020 Newburn, T, ‘Tough on Crime: Penal Policy in England and Wales. Crime and Justice’ The University of Chicago Press Journals 425 – 470 Stenson and Sullivan, Crime, Risk and Justice: The Politics of Crime Control in Liberal Democracies, Willan Publishing 148 [2019] SGHC 174 at [80] 29

30

31

32

37

Singapore Comparative Law Review “The [proportionality] principle acts as a counterweight against the more goal-

driven sentencing considerations of prevention, deterrence and rehabilitation. In essence, proportionality is a check – pulling back on the extent to which the other sentencing considerations weigh into the calculus.”

There are reasons for why this is important. Menon CJ noted 33, “…Where the length of a sentence, which has been imposed because of its general

deterrent effect on others, bears no relation to the gravity of the offence…, the offender is being used essentially as a means to another end and the offender’s dignity assailed…”

From a consequentialist angle, disproportionate sentences also risk a criminal justice system losing the support of its community as they offend common sentiments that privileges and obligations ought to be distributed in accordance with the accused’s blameworthiness 34. While this is an extreme outcome that happens after repeated violations of the proportionality principle, it is worth mentioning that a survey conducted in Singapore 35 revealed that only 33% of respondents supported the mandatory death penalty for drug trafficking 36 , and far fewer respondents (10%) actually applied this belief in practice by choosing the death sentence in every scenario they were asked to judge 37 . The survey also revealed that respondents considered mitigating circumstances to be important in determining if the death penalty is deserved, which is not permitted under a mandatory death penalty 38. As V.K. Rajah J observed, “There is in the final analysis, an overriding constitutional and public interest

imperative warranting that individuals are not unfairly sentenced.” While public 39

protection is clearly important, “it would however be wrong to consider that the

mandates of law and order on the one hand and the right of the offender to be fairly treated on the other are inimically irreconcilable. It is the duty and obligation

Public Prosecutor v Low Ji Qing [2019] SGHC at [79], quoting ‘Disproportionate Sentences as Human Rights Violations’ (2004) 67 MLR 541 (Dirk van Zyl Smit and Andrew Ashworth, eds), at 546, citing S v Dodo 2001 (3) SA 382 (CC), at 403–404 Mirko Bagaric, ‘Proportionality in Sentencing: its Justification, Meaning and Role’, Current Issues in Criminal Justice, 156 The survey was done on a representative sample size of 1500 Singaporeans.

Chan, Wing-Cheong; Tan, Ern Ser; Lee, Jack Tsen-Ta; and Mathi, Braema, ‘How strong is public support for the death penalty in Singapore?’, 2018 Asian Journal of Criminology, Table 7 Ibid, Table 9 Ibid, 9 Tan Kay Beng v PP [2006] SGHC 117 at [33] 33

34

35 36

37 38 39

38

Singapore Comparative Law Review of the sentencing judge to assess and balance these competing concerns and to strike an appropriate balance between the two.”

40

The mandatory death penalty, however, determines public order to be the fulcrum of sentencing objectives, with considerations of the offender being so peripheral as to become almost irrelevant .

The principle of tailoring a sentence to the individual, closely linked to a rehabilitative angle of criminal justice, also reminds us that society ought to try rehabilitating offenders so that they will not re-offend. This stems from the view that crime is often the symptom of a social disease which rehabilitation aims to cure through treatment41. In the context of drugs which is widely recognised as a social problem, this perspective is especially relevant. Some jurisdictions including the UK 42 provide for alternative sentences to low-level actors who courier drugs as they are regarded as a disenfranchised group whose socio-economic marginalisation contributed to their path, and hence deserve rehabilitation of some sort43. In saying that the only prospect is death for most drug traffickers, this possibility is irretrievably shut off.

Finally, even if deterrence is prioritised as a sentencing consideration, it is worth considering the second question posed by Menon CJ as well – how should one punish the offender so as to best achieve that goal? As previously noted, it cannot be proven beyond reasonable doubt that the death penalty has a uniquely effective deterrent value. Taking these two questions together, even if it is likely that the mandatory death penalty would deter some traffickers from carrying drugs above the capital threshold, it is worth revisiting whether this is a goal worth pursuing to the very end in light of the significant trade-offs that the mandatory death penalty brings.

40

Ibid

Bean, P. (1981), ‘Punishment: A Philosophical and Criminological Inquiry’, Oxford, England: Martin Robertson, 54.

The UK sentencing guidelines provide that where the defendant is dependent on or has a propensity to misuse drugs and there is sufficient prospect of success, a community order with a drug rehabilitation requirement can imposed as an alternative to a short or moderate length custodial sentence, which includes where the defendant performed a lesser role in the drug supply operation.

Koman, R. N. (2018), ‘It Is Not about the Drugs. A Comparative and Contextual Analysis of Singapore and European Drug Approaches’, Beijing Law Review, 443 41

42

43

39

Singapore Comparative Law Review

QUESTIONING OUR INSANITY: AN EXAMINATION OF THE M’NAGHTEN RULES AND THE SINGAPORE EQUIVALENT Clinton Wee

INTRODUCTION One of the main tenets of criminal law is that liability should not fall upon those who are not responsible for their actions. This principle reflects our respect for individual autonomy as actors should only be held to account for the choices they have made. One way in which this principle is reflected in modern criminal law is via the mental requirement (mens rea) for various crimes, such as recklessness and intention. These serve as a mechanism through which we assign criminal responsibility to those who have committed the relevant criminal acts. For example, if a person stabbed another, we would only hold him responsible for murder if he had intended to cause death. Any mental intention short of that would be insufficient. The defence of insanity also embodies this principle. It serves as an excusatory defence, absolving the defendant from criminal liability even if all the elements of the crime are made out. Therefore, this defence does more than just deny that the defendant had the requisite mens rea, it absolves the defendant in spite of having the mens rea. An insane man who intentionally killed his wife out of a delusional fear that his wife is actually a man-eating spider, might have the mens rea for murder (i.e. intention to kill), but he would not be guilty of murder because he does not know what he is doing is unlawful.

In a movie revolving around a psychopathic criminal, Joaquin Phoenix, playing that criminal, sarcastically asks "Is it me? Or is it getting crazier out there?" In developed countries such as the UK and Singapore, where the stresses of the modern-day rat race are having an increasingly dangerous impact on our mental health, the defence of insanity has never been more relevant.

40

Singapore Comparative Law Review Therefore, it is important to ensure that the law on insanity is up-to-date with current medical psychiatry and is effective in assigning criminal responsibility where it is due. This article will: (i)

set out the legal position on the defence of insanity in both the UK and Singapore, providing a side-by-side comparison;

(ii)

argue that although the law in both countries are fairly similar, ultimately the Singapore model is preferred; and

(iii)

provide a few suggestions on how the law on the defence on insanity may be improved.

PRELIMINARY POINTS It is necessary to clarify what this defence actually means and when it is employed. There are two instances where a defendant's mental abnormality may be relevant to criminal proceedings. The first is where the defendant, due to his mental condition at the time of the trial, is unfit to plead (procedural bar to a trial).1 The second instance, which is the focus of this article, is where even if the defendant is currently fit to plead, the contention is that he was mentally disordered at the time of committing the offence (substantive defence of insanity).

In the UK, if a defendant is found to have committed the act or omission charged, but has mounted a successful insanity defence, the court will return a special verdict of "not guilty by reason of insanity".2 In Singapore, the courts will return an "acquittal on the grounds of unsound mind", and must make a finding as to whether the defendant committed the act or omission charged. After a special verdict is given, the courts have the power to make an order for the detention of the defendant at a psychiatric ward.3 The burden of proof in both countries is the same, the defendant will have to prove, on the balance of probabilities, that their mental state fulfilled the relevant requirements for the defence at the time of the offence.

In the UK, the relevant rules on the insanity defence are found in the M'Naghten Rules:

[E]very man is presumed to be sane, and to possess a sufficient degree of reason to be responsible for his crimes, until the contrary is proved ...; and ... to establish a defence on the ground of insanity, it must be clearly proved that, at the time of

1 2 3

Criminal Procedure Code, s 247; Criminal Procedure (Insanity Act) 1964, s 4 Trial of Lunatics Act 1883, s 2 Criminal Procedure Code, s 251

41

Singapore Comparative Law Review committing the act, the party accused was labouring under such a defect of reason, from disease of the mind, as not to know the nature and quality of the act he was doing; or if he did know it that he did not know he was doing what was wrong. 4 Meanwhile in Singapore, the corresponding requirements are set out in section 84 of the Singapore Penal Code:

Nothing is an offence which is done by a person who, at the time of doing it, by reason of unsoundness of mind, is incapable of knowing the nature of the act, or that he is doing what is either wrong or contrary to law.

THE MENTAL CONDITION In the UK, the mental condition required is a "disease of the mind" which produces a "defect of reason". In R v Sullivan, Lord Diplock clarified that the word "mind" was to be used "in the ordinary sense of the mental faculties of reason, memory and understanding." Examples include hyperglycaemia5, sleepwalking6, and cerebral arteriosclerosis7. Case law has sought to establish a distinction between diseases of the mind and other mental conditions based on whether the condition was brought about by internal or external factors. This distinction is highly unsatisfactory as it leads to arbitrary results. For example, hyperglycaemia, a condition induced by a failure to take insulin is considered a "disease of the mind" as the condition arises internally, while hypoglycaemia, which is brought about by an overdose of insulin, an external factor (i.e. the insulin), would not be considered as such8. There is no principled reason for allowing the defence of insanity to a person suffering from the former condition, but barring the defence for a person suffering from the latter condition.

In Singapore, the relevant mental condition required is an "unsoundness of mind", which carries a broader scope compared to its UK counterpart. Huda has suggested that this would cover "mental defects both congenital and post-natal, such as idiocy, madness, delirium, melancholia, mania, hypochondria, dementia, hallucination and every other possible form of mental affection known to medical science by whatever name designated." 9 Conditions which affect a person's

4 5 6 7 8 9

R v M’Naghten (1843) 8 E.R. 718; (1843) 10 Cl. & F. 200 R v Hennessy [1989] 1 WLR 297 R v Burgess [1991] 2 WLR 1206 R v Kemp (1957) 1 QB 399 R v Quick [1973] Q.B. 910 Syed Shamsul Huda, The Principles of the Law of Crimes in British India, (1 Edition, Calcutta: Butterworth, 1902) st

42

Singapore Comparative Law Review mental capacity, irrespective of whether it was triggered by internal or external factors, would also be covered under this expression. Even "brutish stupidity without rational power", which was excluded from "disease of the mind" in R v Kemp, 10 could arguably fall within the ambit of "unsoundness of mind". This position is preferred as it disposes of the unnecessary external/internal distinction found in UK law, and places the focus rightly back on the mental state of the defendant. However, more guidance and clarity on exactly which mental conditions would fall under "unsoundness of mind" is required. It is submitted that the UK Law Commission's proposal to only allow recognised mental conditions to ground the defence of insanity is optimal.11 Under this proposal, although the question of whether a mental condition is "recognised" is a question of law, the judge will be guided by medical reference texts and expert opinion. This would not only bring certainty and clarity to this area of law, but it would also align the law with current scientific consensus on what qualifies as a mental disorder.

KNOWLEDGE Establishing a mental condition which satisfies that of insanity is merely the first step. The defendant also has to prove that as a result of his insanity, he did not possess the cognitive capacity to make rational choices. This goes to the heart of criminal law, as established earlier, where responsibility for certain actions is only attached to individuals if they had made a truly autonomous choice to perform those actions. Therefore, after establishing the relevant mental condition, under the M'Naghten Rules, the defendant must go on to show that due to this mental condition, he did not "know" the "nature and quality" of his act or that what he did was wrong. In contrast, under s 84 of the Penal Code, he must show that he was "incapable of knowing" the "nature of his act" or he is doing what is either "wrong or contrary to law".

The Singaporean stance on knowledge in this area is slightly narrower as one might be "capable of knowing" something, but still not actually "know" the “nature and quality” of it. However, this difference is insignificant in practice. If a person does not know something as a result of his unsoundness or disease of the mind, it would be, as McKillop puts it, "splitting verbal hairs" to argue that he might still be capable of knowing it. 12

(1957) 1 QB 399 Law Commission, Criminal Liability: Insanity and Automatism (2013) paras 3.12 – 3.14 12 Bron McKillop, 'Insanity under the Penal Code' (1966) 7 Me Judice 65, 69 10 11

43

Singapore Comparative Law Review NATURE (AND QUALITY) OF THE ACT It is best to describe this limb of the insanity test by giving a few examples where a defendant might be said to lack knowledge of the nature and quality of his act. In Loake v CPS, the court gave three such examples: (i)

where A kills B under an insane delusion that he is breaking a jar;

(ii)

where a madman cuts a woman's throat under the delusion that he is cutting a loaf of bread; and

(iii)

where a drunken nurse puts a baby on the fire thinking it is a log.13

It is glaringly clear that the ‘perpetrators’ in each example do not warrant criminal sanction even though their actions carry grave consequences. It might be argued that the Singaporean rules are more lenient as it only requires defendants to be incapable of knowing the ‘nature’ of the act while the M'Naghten rules require a lack of knowledge as to both the "nature and quality" of the act. Once again, the difference is inconsequential as one who does not know the nature of his act, is unlikely to know the quality of his act.

WRONGNESS In the UK, "knowledge of illegality" is the sole criterion of knowing what is wrong.14 In contrast, under the Singapore regime, the defendant must be incapable of knowing his actions were either "wrong or contrary to law". It can be inferred therefore that "wrong", in this sense, refers to the immorality of the act. It might be argued that the state should only abstain from punishing those who are truly unable to conform their behaviour with the law because they are incapable of comprehending the law, while those who do understand the illegality of their actions but choose to defy the law due to personal morality should not be allowed the defence as they have made a conscious choice to follow their allegiance to personal morality while accepting any criminal sanction that might follow. This argument is misguided for two reasons. First, in practice, psychiatrists often focus on the moral justification of defendant's acts, rather than the legal wrongness.15 Second, there are conditions under which we might be deeply sympathetic to the

13 14

[2017] EWHC 2855 (Admin), [2018] QB 998 [38]

R v Windle [1952] 2 QB 82

R.D. Mackay, B.J. Mitchell and Leonie Howe, 'Yet more facts about the insanity defence' Crim. L.R. 2006, May 399 15

44

Singapore Comparative Law Review defendant and argue that the moral considerations of a circumstance outweigh the legal outcomes.

For example, where A is under the delusion that B is the Anti-Christ and if A does not kill B, the entire world would be subsumed by darkness and evil, few people would say A bears the requisite criminal mental element. If A's delusion were true, his acts would not only be excusable, it might even be considered heroic. Therefore, it is submitted that the Singapore position is preferable as the mere "knowledge of illegality" is insufficient to capture situations where mentally challenged defendants do not meet the moral blameworthiness required to ground criminal liability.

Moreover, an ambiguity exists within s 84, namely that the words "either wrong or contrary to law" could be interpreted disjunctively or conjunctively. If they are interpreted disjunctively, either ignorance as to the moral wrongness or the legal prohibition would be sufficient to satisfy this limb of the defence. If interpreted conjunctively, an incapacity to know both the moral and legal wrongness of the act would be necessary. Singapore courts apply the latter approach, requiring a defendant to prove that he did not know his actions were wrong and that it was contary to law.16 However, this approach leaves the defence unduly restrictive. Both the incapacity to know moral wrongness and legal wrongness should be sufficient in itself to establish the defence. The case has already been made in the previous paragraph that defendants who are under the misguided delusion that their acts are morally upright should not suffer criminal liability. In regards to knowledge of the law, it is not difficult to imagine cases where it would be unjust to hold criminally liable one who thinks his actions are clearly in line with the relevant domestic law. Take for example a mad serial killer who is under the deranged belief that he is a citizen of the alien planet of Titan, where the supreme ruler, Thanos, makes a divine and legally binding decree that all citizens must seek to kill each other until half the population is extinguished. It would be unreasonable to hold him criminally liable as he genuinely believed his murderous acts were in accordance with the law.

CONCLUSION The law on the defence of insanity strikes at the heart of criminal law, where the hard question we have to ask ourselves is: "When should someone be held accountable for their actions?" In answering this question, a balance needs to be struck between the respect for individual autonomy and protection of the wider public. Two arguments have been put forward in this 16

P.P. v Rozman bin Jusoh [1995] 3 S.L.R. 317

45

Singapore Comparative Law Review article. First, the most rational and principled way forward would be to align the law as closely as possible with current medical consensus on mental conditions. Second, mentally ill defendants who are unable to understand either the moral or legal implications of their actions should not be denied this defence. In a world where mental health issues are on the rise, it is imperative that the law accommodates individuals plagued with a disease they have no substantial control over.

46

Singapore Comparative Law Review

CROSSING THE RUBICON: THE PUSH FOR LOSS OF CHANCE CLAIMS IN MEDICAL NEGLIGENCE CASES Darien The

INTRODUCTION The “loss of a chance” doctrine is relevant where a patient alleges that a medical practitioner’s negligence has resulted in the reduced prospects of recovery from a medical condition. 1 There are many unresolved problems in this area since it is often difficult to pinpoint whether the doctor had indeed caused the patient’s loss.

At the outset, it is worth noting that there is a distinction between legal causation and factual causation. Legal causation is “an attributive question as to whether the defendant should be made responsible for the consequences of his actions that have befallen the plaintiff”. 2 Conversely, the factual causation inquiry concerns the physical connection between the defendant’s actions and the damage suffered by the plaintiff, and we examine the “cause and effect in accordance with scientific or objective notions of physical sequence”. 3 In loss of chance cases, the greater hurdle for claimants is often the issue of factual causation, especially where there is a paucity of scientific knowledge over a certain condition.

Conventionally, proof of factual causation is necessary for a successful negligence claim.4 It is the link between the actor and the tort which renders the tortfeasor responsible to make

Armstrong Carol Ann v. Quest Laboratories [2019] SGCA 75 (“Armstrong (CA)”) at [3] Ibid, [87] Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric [2007] 3 SLR(R) 782 at [52] Jones, M. A., Anthony M. Dugdale, J. F. Clerk, and W. H. B. Lindsell, Clerk & Lindsell on Torts, (Sweet & Maxwell, 22nd Ed, 2018) at [2-09] (“Clerk & Lindsell”) 1 2 3 4

47

Singapore Comparative Law Review compensation.5 To establish factual causation, the “but-for” test is adopted: the claimant must adduce evidence to show that there is a more than 50% probability that but-for the defendant’s negligence,6 the relevant damage would not have occurred.7 In the great majority of cases, the but-for test of causation would not give rise to difficulties. As Professor Lunney noted, “[t]he attraction of the but-for test is its simplicity: if the injury would in fact have occurred even without the defendant’s negligence that negligence can be ruled out as a factual cause of the injury.” 8 However, simplicity may sometimes lead to unfairness. 9 Victims of tortious conduct may inadvertently be deprived of relief when the situation does not lend itself to but-for causation analysis.

10

Loss of chance claims in medical negligence cases remain a controversial area that has caused much hand-wringing when the traditional but-for test fails. This is especially so when compensation is sought for the loss of a chance of recovery which stem “from diseases with an unclear aetiology” and it is simply impracticable to apply but-for causation analysis. 11 For example, it may be impossible to determine whether the surgical removal of a potentially cancerous lump could have arrested the spread of cancer, assuming that there was no negligent diagnosis. 12 As aptly noted by the Singapore Court of Appeal: “The paradox of [modern medicine] is that it works so well, and yet never well enough”.13 The issue of recognising claims for the lost chance of recovery has regained prominence in the Singapore High Court judgment of Armstrong Carol Ann v. Quest Laboratories. While Choo J

Fairchild v. Glenhaven Funeral Services [2002] UKHL 22 at [37] (Lord Nicholls) (“Fairchild”) See also, S. Kagan, ‘Causation, Liability, and Internalism’ (1986) 15 Philosophy and Public Affairs 41 at 41.

Peter Cane and P. S. Atiyah, Atiyah's Accidents, Compensation and the Law, (Cambridge University Press, 7th Ed, 2006) at p 111. (“Atiyah”) See also, Sienkiewicz v. Greif (UK) Ltd [2011] UKSC 10 at [16]: “It is a basic principle of the law of tort that the claimant will only have a cause of action if he can prove, on balance of probabilities, that the defendant’s tortious conduct caused the damage in respect of which compensation is claimed.” (“ Sienkiewicz”) Clerk & Lindsell (n 4) at [2-09] Mark Lunney and Ken Oliphant, Tort Law: text and materials (Oxford University Press, 5th Ed, 2013) at p 216.

Gregg v. Scott [2005] UKHL 2 at [15] – [16] (Lord Nicholls) (“Gregg”) Fairchild (n 5) at [33] (Lord Bingham). See also, Snell v Farrell [1990] 2 SCR 311 at 320 (Sophinka J); Jane Stapleton, ‘Compensating Victims of Disease’ (1985) 5 Oxford Journal of Legal Studies 248 at 250 – 252 and 267 Hillary Chua, ‘Re-examining Tortious ‘loss of a chance’ in light of ACB v. Thomson Medical Pte Ltd [2015]’ (2016) 1 Lex Loci 40 at 4 (“Hillary”) See Armstrong Carol Ann v. Quest Laboratories Pte Ltd [2018] SGHC 66 at [9]. (“Armstrong (HC)”) See also, Perry v. Raleys Solicitors [2019] UKSC 5 at [15]: “The assessment of causation and loss in cases of professional negligence has given rise to difficult conceptual and practical issues which have troubled the courts on many occasions. The most recent example at the level of this court is Gregg v. Scott … in which the House of Lords had to wrestle with the intractable question whether negligent medical advice, which reduced the patient’s prospects of long-term survival from cancer from 42% to 25%, sounded in damages when, probably, he would have died anyway, even if competently treated.”

Armstrong (CA) (n 1) at [1] 5

6

7 8 9

10

11

12

13

48

Singapore Comparative Law Review took a bold step towards acknowledging such claims, it is regrettable that the issue was not fully fleshed out due to the obscurely-worded judgement. This paper seeks to provide a fuller discussion on the thorny issue of whether the lost chance of recovery should be an actionable claim in tort.

CURRENT LEGAL POSITION United Kingdom The position in the United Kingdom remains that as stated in the seminal decision of Gregg v.

Scott (“Gregg”).

In Gregg, a lump under the claimant’s arm was misdiagnosed as being non-cancerous and he sought compensation for the reduction in his chances of recovery due to the negligent diagnosis. 14 The majority of the House of Lords, consisting of Lord Hoffmann, Baroness Hale and Lord Philipps, rejected this claim while Lord Nicholls and Lord Hope dissented.

Lord Hoffmann was concerned with the impact of allowing such claims since “a wholesale adoption of possible rather than probable causation as the criterion of liability would be so radical a change in our law as to amount to a legislative act. It would have enormous consequences for insurance companies and the National Health Service”.15 Baroness Hale opined that recognising such a head of claim would have “substantial” implications since “[a]lmost any claim for loss of an outcome could be reformulated as a claim for loss of a chance of that outcome”. 16 Lastly, Lord Phillips was troubled by the practical difficulties surrounding the analysis of loss of chance claims.

It remains easier to adopt the orthodox “but-for” approach since “a robust test which produces rough justice may be preferable to a test that on occasion will be difficult, if not impossible, to apply with confidence in practice”.17 Lord Nicholls delivered a compelling dissent, opining that in the realm of hypothetical past events, it would be “too crude an approach” to decide the matter on a balance of probabilities,18

14 15 16 17 18

Gregg (n 9) at [185] (Baroness Hale) Ibid, [90] (Lord Hoffmann) Ibid, [224] (Baroness Hale) Ibid, [170] (Lord Phillips) Ibid, [15] (Lord Nicholls)

49

Singapore Comparative Law Review and that further, the claimant’s lost chance of recovery itself can constitute actionable damage.19 Lord Hope was largely in agreement with Lord Nicholls.20 Nevertheless, by a narrow 3-2 majority, it remains the position that loss of chance claims in the realm of medical negligence are not permitted in the United Kingdom.

Singapore The position in Singapore regarding loss of claims in medical negligence cases remains an open question, albeit with some favourable statements from the High Court.

In the High Court judgement of Armstrong Carol Ann v. Quest Laboratories (“Armstrong (HC)”), the plaintiff’s expert opined that the plaintiff had a 10-year survival rate between 68% to 80% if had he been properly diagnosed earlier, while the defendant’s expert suggested that this figure was below 50%. 21 While Choo J accepted the plaintiff’s expert’s assessment that the doctor’s misdiagnosis caused the plaintiff to “lose a fighting chance” and to die years earlier, he did not accept the statistic of a “68% chance of suriving 10 years”. 22 Instead, he relied on the dissent of Lord Nicholls in Gregg to “leap an evidentiary gap when overall fairness plainly so requires” and to estimate that the plaintiff would have lived for another 4 years had he been properly diagnosed.23 While he acknowledged that we can never determine what might have been in a counter-factual world where there was no negligence, that does not mean that no compensation should be awarded. 24 Thus, he seemed to have endorsed the loss of chance doctrine in medical negligence cases.

However, academic commentators have opined that Choo J did not directly engage with a loss of chance issue,25 but rather, took the more conventional “lost years”26 approach. The “lost years” 19 20 21 22 23 24 25

Ibid, [17] (Lord Nicholls) Ibid, [92] (Lord Hope) Armstrong (HC) (n 12) at [12] Ibid, [19] Ibid, [16] Ibid, [18]

See Kumaralingam Amirthalingam and Gary Chan Kok Yew, ‘Tort Law’ (2018) 19 SAL Ann Rev 756 at [26.85].

Armstrong (HC) (n 12) at [18]: “What the parties are disputing is how much longer Peter Traynor could have survived had his malignancy been diagnosed in 2009. Unlike Tabet and Gregg, the real problem in this case, therefore, lies in determining the value of that loss.”

Armstrong (HC) (n 12) at [19]. See also, Gregg (n 9) at [184] (Baroness Hale): “where a claimant proves on balance of probability that an injury has been caused by negligence, and that such injury has shortened his life, he can recover damages in respect of the earnings lost in the "lost years". The lost years are calculated by comparing the age at which the claimant would have expected to die had he not been injured with the age at which he is expected to die in consequence of his injury.”

26

50

Singapore Comparative Law Review approach is premised on a claim for a loss of expectation of life instead. As noted recently by the Court of Appeal, it is ambiguous as to whether Choo J had endorsed the loss of chance doctrine as a matter of ratio because he couched the award in terms of the number of years lost (i.e., four years of life expectancy lost): “It is therefore … not entirely clear to us if the basis of the Judge’s award as to these “lost years” was predicated on the loss of a chance doctrine, or on a claim for a loss of expectation of life”.27 It is also worth mentioning that Court of Appeal did not have to engage with the loss of chance issue since the claimant succeeded on the primary argument that the negligent diagnosis had resulted in the loss of a “complete cure” for Mr Traynor on a balance of probabilities. 28 Nonetheless, as mentioned above, there were encouraging obiter statements made in favour of the loss of chance doctrine in the High Court judgement. Choo J seemed to endorse the view that the lost chance of recovery could itself constitute actionable damage and agreed with the minority judgments in Gregg which advocated for this approach.29 He opined that “Dr Tan’s negligence had caused Peter Traynor to lose a fighting chance”.30 Regardless, the issue remains unsettled,31 and it is fruitful to explore possible justifications for accepting loss of chance claims should the issue arise again.

JUSTIFICATIONS FOR ADOPTING THE LOSS OF CHANCE DOCTRINE Doctrinal inconsistency with material contribution to risk cases While the courts are opposed to loss of chance claims in medical negligence cases, they are more amenable to claimants in material contribution to risk situations. As will be explained below, there are great similarities between these two categories of cases concerning the causation analysis,

27 28

Armstrong (CA) (n 1) at [11] Ibid, [192]: “Hence, but for the Respondents’ negligence, Mr Traynor would have been cured of his melanoma

through the use of the SLNB procedure … The Appellant has succeeded in her primary argument on the Causation Question on the balance of probabilities on the facts. In the circumstances, we do not need to consider the Appellant’s alternative arguments or whether the Judge was correct to have had recourse to the minority’s reasoning in Gregg v Scott pertaining to the loss of a chance doctrine”.

Armstrong (HC) (n 12) at [16]: “And if this case should indeed turn on the law, I declare unequivocally that I agree with the dissenting voices of Lords Nicholls of Birkenhead and Hope of Craighead, and leave this point with the words of Lord Nicholls”.

Ibid, [19] Armstrong (CA) (n 1) at [192] and [273] 29

30 31

51

Singapore Comparative Law Review and yet, they are being treated differently. One wonders whether loss of chance claims should be accepted to achieve doctrinal consistency within tort law.

In the seminal case of Fairchild v. Glenhaven Funeral Services (“Fairchild”), the claimantemployees suffered from mesothelioma. 32 Crucially, it was not known whether the onset of the disease was caused by inhalation of a certain quantity of asbestos fibres, or whether a single fibre was sufficient. 33 This made it impossible to apply the traditional but-for test of causation to determine which employer was responsible since “the causal link could only ever be established by scientific investigation and the current state of the relevant science leaves it uncertain exactly how the injury was caused”. 34 This would lead to the unfortunate result that none of the defendant-employers can be held liable.

The House of Lords decided that this cannot be right. Thus, a “special rule of causation” was 35

formulated which allowed the claimant to bypass this “evidential gap”, 36 where it need only be shown that the employers had materially increased the employee’s risk of contracting mesothelioma. 37 This was necessary to prevent mesothelioma claims from being thwarted through no fault of the innocent claimant, and to prevent negligent employers from capitalising on this technicality.38 In light of Fairchild, a special rule of causation ought to be developed for loss of chance cases as well. The loss of chance and material contribution of risk scenarios are “mirror image[s]” of one another, since “taking away a chance of a positive outcome and imposing a risk of injury are two 39

sides of the same coin”. Indeed, analogous difficulties are faced by claimants in both types of 40

cases. A claimant in the loss of chance situation fails in his claim if he started with an initial chance of recovery below 50%, while a claimant in the material contribution to risk situation (under the

Fairchild (n 5) at [3] (Lord Bingham) Ibid, [7] (Lord Bingham) Ibid, [170] (Lord Rodger) Sienkiewicz (n 6) at [3] – [4] McGhee v. National Coal Board [1983] 1 W.L.R. 1., 6 (Lord Wilberforce) (“McGhee”). See also, Wilsher v Essex AHA [1988] A.C. 1074, 1077 (Lord Bridge) (“Wilsher”).

Fairchild (n 5) at [44] (Lord Nicholls). The test was originally conceived of in McGhee. However, it was previously limited to the special facts of that case only, according to Wilsher.

32 33 34 35 36

37

Claire McIvor, ‘Debunking Some Judicial Myths about Epidemiology and Its Relevance to UK Tort Law’ (2013) Med. L. Rev. 553, 558 Barker v. Corus (UK) plc [2006] UKHL 20 at [114] (Lord Walker) Donal Nolan, ‘Causation and the Goals of Tort Law’ in The Goals of Private Law (Andrew Robertson and Tang Hang Wu (eds)), (Hart Publishing, 1st Ed, 2009) 179 (“Nolan”) 38

39 40

52

Singapore Comparative Law Review previous position) would fail if he began with an above 50% risk of developing the medical condition.

Further, the justification for favouring the claimant in the material contribution to risk situation applies with equal force in the loss of chance situation: the evidential difficulty should rest on the tortfeasor’s shoulders rather than the claimant. 41 In the context of material contribution to risk it has been asserted that: “the employers should be liable for an injury, squarely within the risk which they created and that they, not the pursuer, should suffer the consequence of the impossibility, foreseeably inherent in the nature of his injury.”42 Similarly, where the doctor had negligently failed to properly diagnose the cancer, it does not lie in his mouth to assert that the patient’s cancer would have worsened in any event, especially where the culpable actor has set in motion events which made it more difficult to prove the causes of his own act.43 As the law currently stands, it is difficult to see why claimants in the material contribution to risk situation are permitted a modified test of causation and “deserve to be given a helping hand in the litigation lottery”,44 but not claimants in the loss of chance situation.45 The courts have yet to provide good justification as to why different approaches are taken despite certain similarities in both situations. 46 As aptly summed up by Tony Weir, “[i]f contribution to a risk of harm is sufficient [for a claim], it is hard to see why diminishing the chance of avoiding it should not be”.47 The crux of the duty is to protect the chances of recovery

Fairchild (n 5) at [39] (Lord Nicholls): 'As between the plaintiff and the two hunters, the evidential difficulty arising from the impossibility of identifying the gun which fired the crucial pellet should redound upon the negligent hunters, not the blameless plaintiff. The unattractive consequence, that one of the hunters will be held liable for an injury he did not in fact inflict, is outweighed by the even less attractive alternative, that the innocent plaintiff should receive no recompense even though one of the negligent hunters injured him. It is this balance … which justifies a relaxation in the standard of causation required. Insistence on the normal standard of causation would work an injustice.”.

Fairchild (n 5) at [33] (Lord Bingham), citing McGhee (n 36) at 7 (Lord Wilberforce) Cook v. Lewis [1951] SCR 830, 832-833 (Rand J) Michael Jones, ‘Proving Causation – Beyond the ‘But-for’ Test’ (2006) 22 P.N. 251, 268 Atiyah (n 6), 114: “On the face of things, it is difficult to see how the reasoning in these loss-of-chance cases can be reconciled with the material-increase-in-risk approach. If a person, who can prove (on the balance of probabilities) only that tortious conduct ‘materially’ increased the risk of harm, can recover damages for that harm, why should a person, who can prove (on the balance of probabilities) that tortious conduct deprived them of a specified (significant) percentage chance of avoiding harm, not recover damages proportional to the increase in risk?”

Richard Goldberg, Perspectives on Causation (Hart Publishing, 1st Ed, 2011) 63 Tony Weir, ‘All or Nothing?’ (2004) 78 Tulane Law Review 511 at 531. C.f. Leonard Hoffmann, ‘Causation’ (2005) 121 L.Q.R 592, 601 41

42 43 44 45

46 47

53

Singapore Comparative Law Review While it is generally difficult to justify the imposition of “chance-protecting” duties between strangers, where a professional has made an implicit representation that he can be relied upon not to negligently diminish a person’s chances, the case is much stronger. 48 Loss of chance claims ought to be permitted where one party assumes a responsibility to protect the other party’s chances.49 This is especially so, where “the provision of the chance is the object of the duty”.50 For instance, such a “chance-protecting” duty is often owed from the lawyer to his client. While the lawyer cannot guarantee a particular legal outcome for his client, “the purpose of the duty in question [is] either to protect the claimant from being deprived of economic opportunity or to provide the claimant with an opportunity to recover losses”. 51 A solicitor who negligently deprives a client of a viable claim is liable to pay damages, even where the chance of succeeding in the claim is below 50%.52 The client need only show that the original lawsuit had some prospect of success.53 In Haithwaite v Snell & Passmore, the lawyer was negligent in allowing the claim to be time-barred. Although the claimant only had a cumulative 30% chance of succeeding in the original litigation, 54 the court permitted proportionate recovery since it was more than a speculative chance.55

Sandy Steel, ‘Rationalising loss of a chance in tort’ in Challenging Orthodoxy in Tort Law (Stephen Pitel, Jason Neyers and Erika Chamberlain (eds)), (Hart Publishing, 1st Ed, 2013) 247, 258 (“Sandy”) Ibid: “Whether lost chances should be able to establish liability in, say, the tort of negligence is simply a question of whether the defendant's duty of care extends to protect against such losses. And we can see an obvious situation in which this will be so: whenever the defendant assumes a responsibility to protect the claimant's chances.”

Harvey McGregor, ‘Loss of a Chance: Where has it come from and where is it going?’ (2008) 24 P.N. 2 at 6 Kumaralingam Amirthalingam, ‘The changing Face of the Gist of Negligence’ in Emerging Issues in Tort Law (Jason W Neyers, Erika Chamberlain and Stephen GA Pitel (eds)), (Hart Publishing, 1st Ed, 2007) 481.

Gregg (n 9) at [218] (Baroness Hale): “It has long been established that a solicitor whose negligence deprives the client of a viable claim is liable for damages even though the chances of succeeding in the claim were never better than evens”.

Kitchen v. Royal Air Force Association [1958] 1 W.L.R. 563 at 576 – 577 (Parker LJ): “The matter remains a mystery and were it necessary for this court to decide whether the plaintiff would have succeeded, I, for my part, would have found great difficulty in coming to that conclusion; but, as I understand it, that is not our task. If the plaintiff can satisfy the court that she would have had some prospect of success, then it would be for the court to evaluate those prospects, taking into consideration the difficulties that remained to be surmounted. In other words, unless the court is satisfied that her claim was bound to fail, something more than nominal damages fall to be awarded.”

Haithwaite v. Snell & Passmore [2009] EWHC 647 (QB) at [131] – [132]. (“Haithwaite”) There was a 40% chance of establishing negligence, multiplied by a 75% chance of proving causation Haithwaite (n 54) at [25] 48

49

50 51

52

53

54

55

54

Singapore Comparative Law Review Similarly, the “chance-protecting” duty arises in the doctor-patient relationship. 56 A patient never visits the doctor expecting the guarantee of a cure,57 but rather, they seek “prompt diagnosis and immediate treatment, so that he has a chance to stop the condition from getting any worse and thus a chance of being cured”.58 A doctor owes a “duty to take reasonable care to maximise the prospects of a favourable outcome”,59 and this prospect is highly valued by the patient.60 It is “the very nature of the doctor's duty of reasonable care and skill that directs it to achieving the best chance of a favourable medical outcome”.61 While the interest being protected by these two professions are distinct, one concerning economic opportunity and rights while the other concerning life and health, both involve a relationship of trust and reliance to protect those important interests. There should not be any distinction made between cases involving lawyers and doctors, since in both scenarios, the protection of chance is a vital part of that duty.62 Indeed, Lord Nicholls contends that the law would rightly be open to reproach “were it to provide a remedy if what is lost by a professional adviser's negligence is a financial opportunity or chance but refuse a remedy where what is lost by a doctor's negligence is the chance of health or even life itself”. 63 Hence, loss of chance claims should be permitted for medical negligence cases as well.

CONCLUSION The Court of Appeal in Armstrong noted that the loss of chance doctrine remained a controversial issue but left the position open to be resolved in a more appropriate case.64 It seems Stephen R. Perry, ‘Protected Interests and Undertaking in the Law of Negligence’ (1992) 42 U.T.L.J. 247 at 308: “A doctor who treats a patient is implicitly representing that he or she has a certain level of medical skill and competence and that the patient, in submitting to treatment, can rely on the doctor to exercise that skill and competence. The doctor can, in other words, be reasonably taken as intending to induce a belief in the patient that he or she may rely on the doctor … In so relying the patient shifts his or her position to the extent that other choices, such as going to a different doctor or seeking a second opinion, are foregone and eventually foreclosed.”

Hillary (n 11) at 43 – 44: “That doctors undertake not to guarantee a cure, but to give their patients the chance of cure”.s Margaret Fordham, ‘Loss of chance – a lost opportunity?’ (2005) SJLS 204 at 214 at 251. See also, Jenny Steele, Tort Law: Text, Cases, and Materials (Oxford University Press, 4th Ed, 2017) at p 265 Gregg (n 9) at [101] (Lord Hope) Gemma Turton, Evidential Uncertainty in Causation in Negligence, (Hart Publishing, 1st Ed, 2016) at p 153. See also, Wright v. Cambridge Medical Group [2011] EWCA Civ 669 at [129] (“Wright”) Rufo v. Hosking [2004] N.S.W.C.A 391 at [52] (Hodgson JA) Gregg (n 9) at [218] (Baroness Hale): “So why should my solicitor be liable for negligently depriving me of the chance of winning my action, even if I never had a better than evens chance of success, when my doctor is not liable for negligently depriving me of the chance of getting better, even if I never had a better than evens chance of getting better? Is this another example of the law being kinder to the medical profession than to other professionals?”

Gregg (n 9) at [25] (Lord Nicholls) Armstrong (CA) (n 1) at [273] 56

57

58

59 60

61 62

63 64

55

Singapore Comparative Law Review that the same position is taken in the United Kingdom as well. 65 Nevertheless, there are signs, in Singapore at least, of the courts favouring a policy of effective deterrence against misconduct by medical professionals. Albeit in a different context, the observations in Singapore Medical

Council v. Lim Lian Arn66 are apposite. It was held that disciplinary action is warranted where the doctor’s departure from acceptable standards of conduct is “egregious”67, especially where “grave failure on the part of the medical practitioner with possibly severe consequences for the patient”. 68 It is proffered that the courts should recognise loss of chance claims where the negligence of the medical professional is flagrant to ensure that medical standards are maintained.

Requiring egregious conduct as a prerequisite to loss of chance claims could also function as a control mechanism to prevent vexatious suits, though it remains to be seen what analytical framework would be developed by the courts in future.

While it might be difficult to justify and formulate a principled approach, the courts should not shy away from such a challenge. To impose a blanket rejection on all loss of chance cases would leave deserving claimants being uncompensated, and negligent defendants remaining undeterred – effectively a twofold blow.69 To echo the words of Lord Nicholls in Greg v. Scott, “[i]f the law were to proceed in this way it would deserve to be likened to the proverbial ass”. 70

See Wright (n 60) at [84]: “I accept that the reasoning of the House of Lords on this point does not conclusively shut out, as a matter of strict logic, this court from applying a loss of a chance approach in this case, which is concerned with rather a different point. However, certainty and consistency are of great importance in this difficult area, and, while the question would be appropriate for reconsideration by the Supreme Court, I consider that, at this level, we should probably not expand the loss of a chance doctrine into the realm of clinical negligence.”

Singapore Medical Council v. Lim Lian Arn [2019] SGHC 172 (“Singapore Medical Council”) Singapore Medical Council (n 65) at [1] 65

66 67 68

Ibid

Nolan (n 40) at p 188. “the enforcement of a causation requirement will mean that claimants who have suffered losses will go uncompensated, and that defendants who have acted negligently will go unpunished, with the result that tort law will under-deter”.

Gregg (n 9) at [43] (Lord Nicholls) 69

70

56

Singapore Comparative Law Review

A COMPARATIVE STUDY OF THE ENGLISH AND SINGAPOREAN APPROACHES TO CONTRACTUAL INTERPRETATION Jeanette Faith Lee

INTRODUCTION This article provides a comparative look at the UK’s and Singapore’s approaches to contractual interpretation. While the courts of both countries interpret contracts objectively, this plays out differently in each jurisdiction. Contractual interpretation in England has its roots in (and is developed purely by) the common law1, whereas this is governed by both statute and common law in Singapore. This article begins with an overview of the English approach before moving onto a two-stage analysis of Singapore’s approach: first reflecting on the potential consequences of misreading 2 English jurisprudence, then highlighting doubts around the domestic court’s faithfulness to contextualism3. Ultimately, this article is optimistic about the development of a Singaporean approach to contractual interpretation as a larger reflection of continued growth in Singapore’s autochthonous legal regime.

CONTRACTUAL INTERPRETATION IN THE UK Contractual interpretation is based on the objective ‘reasonable man’ test: what would a ‘reasonable person having all the background knowledge which would have been available to the The UK’s long history of cases on contractual interpretation dates back to the 16 century: see, inter alia, Throgmorton v Tracey (1555) Dyer 124b, 126b; Colthirst v Bejushin (1550) Plow 21, 23a and Chapman v Dalton (1565) Plow 284, 291. The theories of statutory interpretation that were being developed in this period naturally affected lawyers’ and courts’ principles of contractual interpretation. However, no statute was promulgated to directly affect contractual interpretation. See J McCunn, ‘Revolutions in contractual interpretation: a historical perspective’ in Worthington, Robertson & Virgo (eds), Revolution and Evolution in Private Law (Hart Publishing 2018).

In Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd [2015] SGCA 55 In Yap Son On v Ding Pei Zhen [2017] UKSC 24 1

th

2 3

57

Singapore Comparative Law Review parties…have understood them to be using the language in the contract to mean’ 4? Phrased more succinctly, how would ‘an objective observer’ interpret the parties’ intentions5? Despite being unequivocal about the objective approach, English judges diverge on how this applies practically.

Proponents for textualism argue that the objective observer understands a contract based primarily on the words used, ascertaining meaning within the ‘four corners’ of the contract 6.

Meanwhile, contextualists argue that such a man necessarily draws upon context to understand the contract, adjusting the contract’s natural language where it does not accord with common sense to eventually choose the contract’s correct meaning7. The debate continues outside the courtroom, with Lords Sumption and Hoffmann arguing in favour of textualism and contextualism respectively8.

This issue has repercussions beyond the academic realm: in practice, the two methods often yield starkly different interpretations of the same clause. In recent years, it has become unclear which approach the English court favours: it prized commercial common sense over a literal interpretation of a clause in Rainy Sky v Kookmin Bank9, but seemingly rolled back on this in

Arnold v Britton 10 . Furthermore, Lord Hodge’s attempt to reconcile the two approaches in Wood v Capita 11 was arguably unconvincing. The English approach towards interpretation therefore remains unclear.

CONTEXTUALISM IN THE UK Contextualism came to the forefront of English jurisprudence in ICS v West Bromwich Building

Society12, where Lord Hoffmann emphatically summarised the five factors relevant to contractual interpretation. These include the importance of the ‘matrix of fact’ 13 , the reasonable man’s ‘background knowledge’14 and even whether linguistic mistakes were made during drafting15. This

4 5 6 7

Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101 [14] (Lord Hoffmann) Ibid, [60] (Lord Hoffmann) Lovell and Christmas Ltd v Wall (1911) 104 LT 85 Mannai Investment Co Ltd v Eagle Star Life Assurance [1997] UKHL 19, 774 (Lord Hoffmann)

See Lord Sumption, ‘A Question of Taste: The Supreme Court and the Interpretation of Contracts’ (inaugural Farquharson Lecture, delivered at Keble College, Oxford, on 8 May 2017); cf. Leonard Hoffmann, ‘Language and lawyers’ (2018) 134 LQR 553 [2011] UKSC 50 [2015] UKSC 36 [2017] UKSC 24 Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28 Ibid, 912H (Lord Hoffmann) 8

9

10 11 12 13 14 15

Ibid Ibid, 913D (Lord Hoffmann)

58

Singapore Comparative Law Review marked a departure from traditional reliance on the parol evidence rule which precluded judges from finding that something had ‘gone wrong with the language’ 16.

Yet, contextualism became tempered post-ICS in Rainy Sky. While broadly affirming Lord Hoffmann’s contextualism, the court in Rainy Sky also made ambiguity a precondition for applying contextual analysis17. Nonetheless, judges ultimately preferred the interpretation of a clause that accorded more with business common sense. Rainy Sky’s plaintiff argued that the defendant’s refund guarantee in paragraph 3 of the contract was triggered upon a specified third party’s insolvency. The defendant argued that this was only triggered by the events in paragraph 2, which excluded insolvency. The Supreme Court disagreed, finding no good commercial reason for the plaintiff to agree to the guarantees covering every situation except the one they most needed it for: the third party’s insolvency. This decision is not unproblematic: by rendering paragraph 2 meaningless, it contradicts the principle that contracts should be read as a whole.

While the Supreme Court reasoned that the two paragraphs must be read in the context of an

earlier contract between the parties, this also contradicts the principle that prior negotiations and antecedent agreements are inadmissible18. It would be more honest to frame Rainy Sky as a case on rectification, whereby prior negotiations are admissible 19.

RETREAT TO TEXTUALISM?

Arnold v Britton rolled backed on the relevance of contextualism: commercial common sense was only relevant to determine how matters ‘would…have been perceived by…reasonable people in the [parties’] position’20. It could not be invoked to ‘undervalue’21 the importance of natural language, which assumed utmost importance. On the facts, the court accepted a textual reading of the relevant clause, despite it providing for an ‘increasingly absurdly high annual service charge’22 payable by the tenants to their landlord23. The court rejected the tenants’ claim as it was not the court’s function to ‘relieve a party from the consequences of his imprudence or poor

16 17 18 19 20 21 22

Ibid Rainy Sky (n 9) [23] (Lord Clarke) Prenn v Simmonds [1971] 1 WLR 1381 ICS v West Bromwich Building Society (n 12) 913 (Lord Hoffmann) Arnold v Britton (n 10) [19] (Lord Neuberger) Ibid, [17] (Lord Neuberger) Ibid, [10] (Lord Neuberger)

£90 per annum, increasing on a compound basis by 10% each year, over the course of a 99-year lease. The tenants had contended that “£90” referred to the maximum sum payable in the first year, with that limit rising by 10% each year.

23

59

Singapore Comparative Law Review advice’24. Despite the court’s eventual endorsement of the contract’s literal meaning, it is worth noting that Arnold does not represent an outright rejection of contextualism as the court drew partly upon historical context to justify its literal interpretation of the clause 25.

The Supreme Court’s skilful blending of text and context in Arnold lends credence to Lord Hodge’s argument in Wood v Capita that textualism and contextualism are ‘not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation’ 26 .

However, this is unconvincing for several reasons. First, the use of ‘context’ in Arnold could have equally justified the tenants’ interpretation, as Lord Carnwarth did by drawing upon commercial context and the actual rates of inflation in his dissent. Second, Lord Hodge’s remarks cannot explain the academic community’s sustained debate, post- Wood, over the better approach27.

Third, Lord Hodge fails to address the fundamental inconsistencies between ICS and subsequent case law, where judges chose definitively between text and context. Finally, Lord Hodge’s comments have only ever been cited obiter in Actavis UK v Eli Lilly28. Though Wood approved of Arnold’s general framework towards interpretation (the court can bring in context only after examining the text) and even adopted a literalist reading of the clause in question, Wood does not shed further light on the English approach towards interpretation. Lord Hodge’s willingness to invoke context as a tool ‘when interpreting any contract’ 29 does not square with Lord Neuberger’s remark that context cannot be invoked ‘save perhaps in a very unusual case’30. Rather than clarify the law once and for all, Lord Hodge’s balancing approach keeps the law suspended between textualism and contextualism.

CONTRACTUAL INTERPRETATION IN SINGAPORE While contractual interpretation in England is shaped entirely by common law, in Singapore this is governed first and foremost by the Evidence Act31 and expanded upon by common law. Per

Zurich Insurance v B-Gold Interior Design & Construction 32 , Singapore takes a two-step 24

Ibid, [20] (Lord Neuberger)

‘Clauses which provide for charges which vary with the costs of providing services have resulted, at least since around 1960, in “more trouble between landlord and tenant than anything else”.’ (Arnold (n 18) at [25] (Lord Neuberger) citing Mark Wonnacott, The History of the Law of Landlord and Tenant in England and Wales (The Lawbook Exchange, 2011)).

Wood v Capita (n 11) [13] (Lord Hodge) See footnote 8 [2017] UKSC 48 [58] (Lord Neuberger) Wood v Capita (n 26) Arnold (n 10) [17] (Lord Neuberger) Evidence Act s 94-99 Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] SGCA 27 25

26 27 28 29 30 31 32

60

Singapore Comparative Law Review approach towards interpretation33. First, judges decide if extrinsic evidence can be admitted as a matter of evidence by reference to the procedural rules of evidence in the Evidence Act. When parties intend a document to represent their complete agreement, s 94 bars extrinsic evidence from operating to contradict, vary, add to, or subtract from that contract. However, extrinsic evidence may be admitted to determine parties’ intentions.

Only after assessing the admissibility of extrinsic evidence do judges then interpret the contract substantively. This is where the debate between textualism and contextualism becomes relevant.

In Soup Restaurant, the Singapore Court of Appeal similarly wrestled with the tension between textualism and contextualism. While the text remained the ‘first port of call’34, the court ultimately interpreted a sublease clause to better reflect the commercial context. This is because contextualism is ‘statutorily embedded’ in s 94(f) of Singapore’s Evidence Act 35; having readier recourse to contextualism therefore does not reflect judges conferring excessive discretion upon themselves. There are two caveats to this approach: first, it is only possible through interpreting s 94(f) in a ‘permissive’ manner36; second, judges ‘remain ever vigilant’ to ensure that context is not a ‘pretext’ for contradicting or varying the contractual language 37, showing that a balance between context and text remains important in Singapore.

Notwithstanding these caveats, Singapore’s judges remain more willing than English judges to consider the context. In particular, the Court in Soup Restaurant preferred a more permissive approach than Lord Clarke in Rainy Sky: judges should be able to draw upon the context even where the language used is unambiguous. Context ‘ breaks down the rigidly-defined boundaries of meaning, introduces hues and shades, and defines the contours and limits of the penumbra’ 38 (emphasis mine). In other words, context is relevant not only after the language has been established as being unambiguous, but also to ‘break down’ the language and render it ambiguous

in the very first place. This differs from the English approach which more clearly confines text and context to their respective stages in the interpretive exercise.

It is argued that the Court in Soup Restaurant had suitably modified English jurisprudence to better suit Singapore’s legal context, wherein there is statutory support for judges to rely on the context when interpreting contracts. This contrasts with England’s lack of statutes relating to

33 34 35 36 37 38

Ibid, [124] (Sundaresh Menon CJ) Soup Restaurant (n 2) [32] (Andrew Phang Boon Leong JA) Ibid, [37] (Andrew Phang Boon Leong JA citing Zurich Insurance at [121]).

Ibid Ibid, [38] (Andrew Phang Boon Leong JA citing Zurich Insurance at [122]).

Ibid

61

Singapore Comparative Law Review contractual interpretation. Undoubtedly, Singapore’s Parliament could legislate for a narrower reading of s 94(f) if it so wished. However, absent any legislative amendments, statute and common law operate together as a cohesive whole—the approach in Soup Restaurant is good law.

A small gripe: Soup Restaurant’s misreading of Arnold One criticism of Soup Restaurant is its misreading of Arnold. The Singapore Court remarked that Arnold aligned with Singapore’s position on contextualism 39 . Arnold adopted a literal approach only after considering the context, which ‘did not change anything with regard to the text’40. Thus, the English court was not outrightly rejecting contextualism. However, this is a clear misreading of Arnold, which limited contextualism to the ‘very unusual case’41 . Therefore, it is questionable to ground Singapore’s approach towards interpretation in Arnold. Singapore’s legal development is arguably better served through acknowledging that Singapore’s jurisprudence and legislation have diverged from England’s. This would aid Singapore’s development of an autochthonous legal regime – one unbounded from its English colonial roots to better serve the ‘context of [domestic] society and culture’42.

Yap Son On’s accurate reading of Arnold Fortunately, this misinterpretation of Arnold has not resurfaced: subsequent cases make only peripheral references to Soup Restaurant, and accurately cite Arnold for the proposition that the text assumes ‘primacy of place’ 43 . Since then, judges have grown comfortable embracing contextualism as a Singaporean approach existing independently of English cases. This allows Singapore’s courts to delineate contextualism to best suit the local legal landscape. Yap Son On is a crucial case in this regard: while the Court of Appeal endorsed contextualism, it did not regard this as a licence to admit all extrinsic evidence. Rather, the admission of extrinsic evidence is a systematic two-stage process44. Furthermore, the use of extrinsic evidence under s 94(f) is subject to four safeguards, including the pleading requirements in Sembcorp Marine v PPL

39 40 41

Ibid, [52] (Andrew Phang Boon Leong JA) Ibid Arnold (n 10)

VK Rajah SC, ‘Opening of the Legal Year 2015’ (Singapore, 5 January 2015) <https://www.agc.gov.sg/docs/defaultsource/speeches/2015/opening-of-legal-year-2015_attorney-general-v-k-rajah's-speech_5-jan_checked-againstdelivery.pdf> accessed 8 Jun 2020 Yap Son On (n 3) [38] (Sundaresh Menon CJ) Zurich Insurance (n 32) 42

43 44

62

Singapore Comparative Law Review Holdings45 and the tripartite requirements in Zurich Insurance (that the evidence be relevant, reasonably available and relate to a clear and obvious context)46. Collectively, these safeguards balance conceptual clarity, evidentiary discipline and procedural rigour during interpretation 47.

These limits have their foundations in Singaporean law (i.e. the Evidence Act). Therefore, the move away from reliance upon English case law to bolster the Singapore approach is regarded favourably.

Does Yap Son On commit fully to contextualism?

However, Yap Son On raises another question: did the court stay true to contextualism or simply pay lip service to it? While formally endorsing contextualism, the court refused to admit extrinsic evidence on the facts of the case. Yap Son On was a dispute over how parties had agreed to allot a certain number of shares amongst themselves. Under their agreement, the Respondent was entitled to 10.35% of what the Appellant’s companies owned in another German-company-cumlisting-vehicle. The Appellant’s companies’ shareholding was stated to be ‘Total: 19%’ 48. Parties disagreed on whether ‘19%’ reflected a percentage of post-listing shares49, or if it was shorthand for an absolute amount of 5.5 million shares50.

The Court of Appeal refused to consider extrinsic evidence. There was ‘simply no basis’51 to go outside the terms of the agreement as the Respondent’s interpretation was not one that the text could ‘reasonably bear’52: a percentage is, by definition, a fraction and not an integer. Thus, ‘19%’ could never indicate a fixed allotment of shares 53 . Nonetheless, the court knew that its firm rejection of extrinsic evidence could be seen as ‘a retreat to literalism’ and assured that this was not so: there remain situations where judges can justifiably disregard extrinsic evidence, even under the contextual approach54. The resulting question is thus: was the court in Yap Son On justified in disregarding extrinsic evidence? This feeds into our larger question of whether the Court stayed true to contextualism.

45 46 47 48 49 50 51 52 53 54

[2013] SGCA 43 [73] (Sundaresh Menon CJ)

Zurich Insurance (n 32) [125] (Sundaresh Menon CJ) Yap Son On (n 3) [3] (Sundaresh Menon CJ) Yap Son On (n 3) [1]-[10] (Sundaresh Menon CJ) Ibid, [11(b)] (Sundaresh Menon CJ) Ibid, [11(a)] (Sundaresh Menon CJ) Ibid, [29] (Sundaresh Menon CJ) Ibid, [31] (Sundaresh Menon CJ) Ibid, [33] (Sundaresh Menon CJ) Ibid, [37] (Sundaresh Menon CJ)

63

Singapore Comparative Law Review

Why the Court should have admitted extrinsic evidence A plain reading of s 96 ostensibly justifies the Court’s decision: where the contract’s language is ‘plain in itself’ and ‘applies accurately to existing facts’, no further evidence may be given to show that it was not meant to apply to such facts. However, it is argued that extrinsic evidence must be admitted as a preliminary step: to determine whether s 96 even applies in the first place. Such admission is sensible – and indeed necessary – for consistency with statute and case law.

Statute First, this is how s 96 of the Evidence Act is properly meant to function. The court in Zurich

Insurance remarked that s 96, having originated as a rule of interpretation regarding wills, should not be read too restrictively55. The court then compared s 96 of Singapore’s Evidence Act to s 94 of the Indian Evidence Act 56 , before holding that it requires the court to ‘look into all the

circumstances’ to find the author’s intention . Only if the words are ‘clear in the context of the 57

surrounding circumstances’

58

(emphasis mine) can the court disregard said surrounding

circumstances. This suggests that contextualism is baked into s 94 of the Indian Act (and s 96 of Singapore’s Evidence Act). Even before deciding to disregard extrinsic evidence under s 96, we must first decide if s 96 applies at all; this necessitates a consideration of extrinsic evidence.

Regrettably, Yap Son On neglects the second limb (‘applies accurately to existing facts’) of s 96.

Case law The court in Soup Restaurant declined to depart from the plain meaning of a clause in order to avoid an absurd result if parties had intended this absurd result 59 . This means that extrinsic evidence remained relevant to confirm that parties did intend an absurd result. The situation in

Yap Son On is similar but not identical: one party gives the words an interpretation that is absurd not in its result, but in how it seemingly contradicts the text. Soup Restaurant could arguably be extended to the present case, such that extrinsic evidence remains relevant to confirm whether parties’ intended a result notwithstanding its ‘absurd’ wording60. This is especially justified in cases

55 56 57 58 59

Zurich Insurance (n 32) [77] (Sundaresh Menon CJ) Indian Evidence Act, 1872

Ibid Ibid Soup Restaurant (n 34)

Leong Hoi Seng Victor & Zhuang Changzhong, ‘Yap Son On v Ding Pei Zhen clarified Contractual Interpretation but left questions about Extrinsic Evidence and the Starting Points for Interpretation’ (Singapore Law Blog, 20 February 2017) <https://www.singaporelawblog.sg/blog/article/178> accessed 4 March 2020 60

64

Singapore Comparative Law Review involving non-native speakers, who may not have understood the consequences of a strict literalist interpretation of their words.

Admitting extrinsic evidence as a preliminary step is also consistent with Zurich Insurance’s framework approach for interpretation: first deciding extrinsic evidence is admissible, before substantively interpreting the contract. This approach, which recognises that extrinsic evidence inevitably bears upon substantive interpretation, was itself approved in Yap Son On 61 . It is therefore coherent to consider extrinsic evidence when applying s 96.

CONCLUSION England’s approach to contractual interpretation remains unclear, with the debate between textualism versus contextualism raging on – and rightly so, since Wood v Capita scarcely reconciled the two approaches. On the other side of the world, Singapore’s judges have moved on from misreading English case law, to imbuing Singapore's contractual interpretation regime with a distinctly domestic judicial flavour. It is unfortunate that the court in Yap Son On does not employ contextualism nearly as faithfully as it claimed to, but still the court consistently links contractual interpretation back to its foundations in the domestic Evidence Act. This is no small comfort in terms of the continued growth of Singapore’s autochthonous legal regime. Looking ahead, it is hoped that Singapore’s judges continue developing a uniquely Singaporean contractual regime, emphasising issues such as non-native speakers and bilingual negotiations, which may not be pressing in other parts of the world but are doubtless pertinent to Singapore.

61

Yap Son On (n 3) [28] (Sundaresh Menon CJ)

65

Singapore Comparative Law Review

Fair and Ohpen Dealings: The Enforceability of Tiered Dispute Resolution Clauses Jenna Tan

INTRODUCTION In comparison with Alternative Dispute Resolution (‘ADR’), litigation is lengthier and more expensive.1 This has led to the widespread adoption of tiered dispute resolution clauses within contractual agreements, stating that parties must take certain steps prior to commencing litigation to amicably settle the dispute. This article concerns the enforceability of such clauses in the UK and Singapore.

First, the landmark cases Ohpen Operations2 and Tomolugen Holdings v Silica Investors3 will be discussed, along with the requirements which must be met for stays of proceedings to be granted in favour of ADR in the UK and Singapore respectively. Secondly, the differences between the approaches adopted by both jurisdictions will be examined. Finally, it will be questioned if the relative lack of stringency in the standard of review which must be met for a stay to be granted in Singapore is driven by policy considerations at the expense of general principles of contract law, and if such an approach might be justified.

LANDMARK CASES

Ohpen Operations

Scott Burroughs, ‘Copyright Litigation: Now More Expensive and With More Delay Than Ever Before!’ (Above the Law, 13 March 2019) <https://abovethelaw.com/2019/03/copyright-litigation-now-more-expensive-and-withmore-delay-than-ever-before/> accessed 7 March 2020.

Ohpen Operations UK Ltd v Invesco Managers Ltd [2019] EWHC 2245 Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2016] 1 SLR 373 1

2 3

66

Singapore Comparative Law Review The dispute arose in respect of a framework agreement between the parties. Invesco sought to terminate the agreement on the basis that delays had occurred. Ohpen disputed the validity of Invesco’s purported termination and alleged that the purported termination was a repudiatory breach which constituted grounds for actual termination. The agreement came to an end and Ohpen commenced court proceedings.

Invesco argued that the framework agreement contained a valid tiered dispute resolution clause, and that escalation and mediation procedures should have been sought prior to the commencement of litigation.

O’Farrell J held that if the claim had been brought in contravention of the contractually agreed dispute resolution procedure, court proceedings should be stayed. She set out 4 applicable principles at [32]: (a) the clause must create an enforceable obligation requiring parties to engage in ADR; (b) the obligation must be clearly expressed as a condition precedent to proceedings; (c) the dispute resolution process must be sufficiently clear by reference to objective criteria; and (d) the court has a discretion to stay proceedings commenced in breach of an enforceable ADR agreement and will have regard to the public policy in favour of upholding ADR clauses.

Tomolugen Holdings v Silica Investors Silica Investors brought a suit against eight defendants, alleging that one of the defendants (ARGL) had engaged in unfairly prejudicial conduct. Their interest in ARGL was obtained via a sharesale agreement with another defendant (Lionsgate) which contained a mandatory arbitration clause Lionsgate made an application for a stay of court proceedings against it in accordance with the mandatory arbitration clause. The case also gave rise to the question of whether the plaintiff’s allegations against the other defendants should be stayed as well, though they were not subject to the clause.

67

Singapore Comparative Law Review The Court of Appeal held that the allegation prima facie fell within the scope of the arbitration clause. The party seeking a stay must show that: 4 (a) there is a valid arbitration agreement between the parties involved in the court proceeding; (b) the dispute falls within the scope of the arbitration agreemen; and (c) the arbitration agreement is not null and void, inoperative or incapable of being performed.

Since the other allegations were not subject to the clause, the Court listed the three options available to it: (a) stay the whole proceedings pending the relevant arbitration (between the plaintiff and Lionsgate); (b) allow the other claims to be resolved in court, and the relevant arbitration to take place after their resolution; or (c) allow the claims in court to continue parallel to the commencement of arbitration.

The Court allowed for court proceedings of the other ancillary claims to be stayed on case management grounds prior to the resolution of the relevant arbitration.

HEAVY EMPHASIS ON JUDICIAL DISCRETION TO GRANT STAYS OF COURT PROCEEDINGS In both jurisdictions, courts are likely to look upon ADR clauses favourably and enforce them for policy reasons. It is a “unifying theme” in Singaporean case law that the court will be “the

final arbiter” and has discretion to take the necessary steps to ensure resolution of the dispute as a whole.5 Similarly, English courts have a “discretion to stay proceedings” commenced in breach of ADR clauses and will have “regard to the public policy in favour” of upholding these clauses.6 In the UK, the current view is that parties should be encouraged to settle their disputes by discussion since contentious means are more expensive. 7 In Singapore, it is the “strong legislative

policy in favour of arbitration” which drives the court to enforce alternative dispute resolution 8

The above principles have been affirmed in Wilson Taylor Asia Pacific Pte Ltd v Dyna-Jet Pte Ltd [2017] SGCA 32 at [11] Tomolugen at [186] Ohpen at [32] Emirates Trading LLC v Prime Mineral Exports Pte Ltd [2014] EWHC 2104 (Teare J) Tomolugen at [186] 4

5 6 7 8

68

Singapore Comparative Law Review clauses. The bulk of Singaporean cases concerning stays of court proceedings in breach of an ADR clause sees the relevant clause prescribing arbitration as a necessary step preceding litigation, swaying the courts towards enforcing ADR clauses in general. This can be contrasted against the English position, whereby arbitration as a method of dispute resolution is viewed as being on par with litigation in terms of cost and lengthiness.9 The approach taken in Singapore is better understood when evaluated against the backdrop of her status as a hub of international arbitration in Asia. In recent years, Singapore has seen new initiatives set to raise her profile as a neutral venue of international commercial arbitration, such as the creation of the ICC Singapore Arbitration Group, the signing of the Singapore Convention on Mediation, and the opening of Maxwell Chambers Suites. 10

DIFFERENCE IN STRINGENCY OF REQUIREMENTS FOR A STAY TO BE GRANTED In Singapore, it is sufficient that a “prima facie” standard of review is met; in other words, that a party applying for a stay of proceedings can show the prima facie existence of a valid arbitration agreement -11 it has even been recognised by the court that this is how the judicial approach is “distinguished [from] the approach in England.”12 The English courts set stricter requirements which must be met for a stay to be granted. This has been described as a “rare and compelling threshold” 13 in Tomolugen. The relevant dispute resolution clause will only be enforced if they constitute a binding contractual obligation. English case law has seen extensive discussion of what would constitute an “ enforceable obligation” requiring parties to engage in ADR.14 Two of them are explicitly listed in Ohpen:

Clearly expressed as a condition precedent

See footnote 9 Charmaine Ng, ‘New Body Set to Raise Singapore’s profile as Dispute Resolution Hub’ (The Straits Times, 27 June 2019) <https://www.straitstimes.com/singapore/new-body-set-to-raise-singapores-profile-as-dispute-resolutionhub> accessed 31 March 2020 Malini Ventura v Knight Capital Pte Ltd and others [2015] SGHC 225 at [36] Tomolugen at [61] Tomolugen at [187] Tomolugen at [32] 9

10

11 12 13 14

69

Singapore Comparative Law Review The relevant ADR clause must be clearly expressed as a condition precedent to more contentious dispute resolution methods.15 A “mere undertaking to negotiate a contract” or an “agreement to strive to settle the dispute amicably ” are examples of clauses lacking certainty.16 This requirement allows a court to readily ascertain whether any obligations enshrined in such clauses have been complied with,17 reflecting the longstanding English view that valid contractual clauses must be grounded in sufficient certainty before matters proceed.18 On its face, Singaporean case law seems to cohere with the above- the relevant ADR clause 19 must be “valid” and not “null and void, inoperative, or incapable of being performed”.20 While questions of certainty are fundamental to constitute a valid contract under Singaporean law, 21 the jurisprudence suggests that the threshold of certainty an ADR clause must meet to be enforceable is much lower.

First, the statutory regime set out in s 6 of the International Arbitration Act 1994 22 (IAA) confers on an arbitral tribunal the power to “ rule on its own jurisdiction…with respect to the existence

and validity of the arbitration agreement”. If there is “any matter” covered by a valid arbitration agreement, courts must stay proceedings.23 Uncertainty arises as any court judgement regarding the existence and validity of an arbitration agreement might intrude into the kompetenz-

kompetenz

24

of the arbitral tribunal, calling into question the standard of review which

Singaporean courts should provide before granting a stay. Menon CJ posits in Tomolugen25 that there are two approaches — deference to the tribunal once it is prima facie satisfied that a valid arbitration agreement exists (the “prima facie approach”) or an actual determination of the existence, validity and scope of an agreement where a stay is granted only upon satisfaction that requirements have been met (the “full merits approach”, adopted by English courts).

15 16 17 18

Ibid Cable and Wireless Plc v IBM UK Ltd [2002] EWHC 2059 Ibid, [24] Holloway v Chancery Mead Ltd [2008] EWHC 2495 at [81]

Though it would be prudent to note that case law makes mostly references to Arbitration Agreements, since the bulk of Singaporean case law sees parties seek stays of litigation proceedings in favour of arbitration.

See footnote 6 T2 Networks Pte Ltd v Nasioncom Sdn Bhd [2008] 2 SLR (R) 1 The IAA 1994 gives the UNCITRAL Model Law on International Commercial Arbitration the force of law in s3.

The relevant discussion regarding s6 of the IAA reflects Article 16 of the abovementioned Model Law- the principle of kompetenz-kompetenz Tomolugen at [25] This concept refers to the authority of an arbitral tribunal to decide its own jurisdiction, which might include the existence, validity, and scope of an arbitration agreement.

At [29] 19

20 21 22

23 24

25

70

Singapore Comparative Law Review Singaporean courts have chosen to adopt the former to give primacy to the tribunal, even as “logical discomfort” arises.26 Secondly, it is emphasised that the decisions made by Singaporean courts seek to ensure the “efficient and fair resolution of disputes” as a whole to “ultimately serve the ends of justice”.27 This stands in direct contrast to the stringent approach taken by the English court in Ohpen, where O’Farrell J posited that contractual validity of an ADR clause is what ultimately enables English courts to grant stays of proceedings since the court “ [would] not permit such an action to

be brought in breach” of a valid agreement.

28

Sufficiently clear with reference to objective criteria For an ADR clause to be sufficiently clear, English courts have held that they must contain some objective criteria as to the dispute resolution process laid out. These would include the steps each party would be required to take to commence or terminate the ADR process 29 and the administrative process of selecting a party to resolve a dispute.30 In contrast, no such requirement must be met to satisfy the standard of review in Singapore.31

Scope of the ADR clause in relation to relevant disputes English courts are more stringent in deciding if a dispute is covered by an ADR clause than Singaporean courts.

In Ohpen, O’Farrell J evaluated whether the dispute in question fell within the scope and applicability of the ADR clause. She considered the extent of contractual performance and the temporal limitations of provisions to decide if the relevant ADR clause would survive termination of the contract as an ancillary provision,32 inferring that the parties had agreed on distinct dispute resolution processes.

26 27 28 29 30 31 32

Judgement of Prakash J in Ventura v Knight Capital at [37] Tomolugen at [188] Ohpen at [58] Ibid, [60] Holloway v Chancery Mead at [81] n6

Ohpen at [34]

71

Singapore Comparative Law Review Judicial guidance in Tomolugen simply states that an examination of whether a dispute falls within the scope of an arbitration agreement has two stages: (1) a determination of the matters in the court proceedings and (2) an ascertainment of whether they fell within the scope of the arbitration clause.33 Though the courts are satisfied once a matter is prima facie covered, any dispute which “is clearly not covered” by the relevant clause will not meet the minimum standard of review.34 Still, an issue arises in Tomolugen which is not discussed in Ohpen - the management of ancillary disputes where the central dispute has been stayed. Though these disputes do not fall within the scope of the arbitration agreement and involve litigants who are not party to the agreement, the courts may stay such proceedings pending the resolution of the relevant arbitration. 35 The justification given is that this prevents duplication of resources and “re-litigation” of issues.36 It is prudent to note that these stays are not granted to enforce ADR mechanisms and merely postpone litigation proceedings.

IS THE SINGAPOREAN APPROACH UNSATISFACTORY SINCE IT FAILS TO UPHOLD GENERAL PRINCIPLES OF CONTRACT LAW? The English approach, with its emphasis on ensuring that ADR clauses are sufficiently certain to be enforced and a “full-merits” standard of review, is heavily governed by fundamental 37

principles of contract law such as contractual certainty and giving effect to the wishes of the parties. 38 English courts generally seek to uphold ADR clauses so long as they are “ valid

machinery” and contractually binding. The standard of review adopted by Singaporean courts 39

seems lax in comparison40 - the threshold of certainty which needs to be met is lower with the

prima facie approach.

The development of Singaporean jurisprudence seemingly reflects the current policy position in favour of arbitration 41 at the expense of contract law principles like certainty of terms and

33

at [108]

Ibid, [137] Ibid, [139] Ibid, [142]. Also, in this context “re-litigation” refers to the rehashing of issues already decided in the arbitration, not re-litigation in the res judicata sense.

34 35 36

37 38 39 40 41

n 26 n 19, 37 n 29 n 15 n 12

72

Singapore Comparative Law Review contractual sanctity, this is justified given that Singaporean case law deals largely with the issue of arbitration agreements and seeks to promote the efficacy of case management.

The constitution of ADR clauses in both jurisdictions As stated in the Introduction, ADR clauses are contractual clauses which oblige parties to engage in specific dispute resolution processes prior to litigation. While this definition has general applicability, one must recognise that the bulk of Singaporean case law deals specifically with the enforceability of arbitration agreements. On the other hand, English courts view arbitration as a dispute resolution process on par with litigation in terms of expense and lengthiness, 42 and case law largely examines the enforceability of ADR clauses stipulating settlement or mediation.

Therefore, Singaporean jurisprudence deals with specific factors which would not necessarily apply in cases where the enforceability of a non-arbitration ADR clause is concerned.

Applicability of s 6 International Arbitration Act 1994 Since s 6 of the IAA “rule[s] on its own jurisdiction, including any objections with respect to the

existence and validity of the arbitration agreement” , the adoption of the prima facie standard of 43

review has been justified by Singaporean courts on the grounds of deference in favour of the arbitral tribunal. Admittedly, national approaches differ on the spectrum of deference to be awarded. While a more deferential approach promotes efficacy of the arbitration system, fairness is sometimes impeded as national jurisdictions might fail to uphold a litigant’s fundamental right of access to courts, especially in cases where the right has not actually been contractually forgone. 44 Instead of justifying the extent of deference given to an arbitral tribunal’s kompetenz-kompetenz by engaging in a balancing of policy considerations, Prakash J posits in Ventura v Knight Capital that a deferential approach is more appropriate45 considering that the IAA had been enacted to incorporate Model Law in Singapore, giving arbitral tribunals primary jurisdiction over national courts to rule on matters.

n 11 n 25 Barcelo, J., ‘Kompetenz-Kompetenz and Its Negative Effect — A Comparative View’ Cornell Legal Studies Research Paper No. 17-40 <https://ssrn.com/abstract=3035485> accessed 20 March 2020 n 29 42 43 44

45

73

Singapore Comparative Law Review Menon CJ explains in Tomolugen46 that the English approach to the kompetenz-kompetenz principle is a vastly different, less deferential “full merits approach”. Part 62 of the English Civil Procedure Rules (CPR) contains express provisions granting national courts some jurisdiction to decide on the existence and scope of arbitration agreements. Therefore, it is justified that the stringent standard of review adopted by English courts which seems so firmly grounded in the principles of contract law is not followed in Singapore as Singaporean cases have largely necessitated a consideration of the IAA, which lends support for a deferential standard of review which English courts can circumvent.

The promotion of case management interests As stated in s 4.3, the Singaporean court is more generous in granting stays of court proceedings than the English courts, seemingly disregarding whether a dispute falls within the scope of an ADR clause containing an arbitration agreement. In Tomolugen, the central dispute was stayed and referred to arbitration to enforce a valid arbitration agreement, yet the courts chose to exercise their inherent discretion to stay ancillary disputes until the conclusion of the relevant arbitration.

The fact that the SGCA in Tomolugen granted a stay of proceedings where the disputes did not fall under the scope of the ADR clause can be justified on the grounds of appropriate case management. While the focus has been shifted away from mere contractual enforcement and certainty of terms, the court ultimately seeks to make decisions which are efficient and fair as a

whole. The measures taken by the court will turn on the “facts and precise contours” of each 47

case48 to achieve a fair outcome. In Tomolugen, the courts considered that staying the ancillary disputes would be more efficient as resource duplication would be prevented, and the plaintiff’s right to sue would not be curtailed since the stay was temporary.

CONCLUSION When it comes to granting stay of court proceedings in favour of enforcing an ADR clause, English and Singaporean courts emphasise the discretion of the courts to make a suitable decision.49 Though the English standard of review for enforcement of an ADR clause is stricter,

46 47 48 49

at [48]-[49] at [186], emphasis added

Ibid

n 7, 8

74

Singapore Comparative Law Review this is because the bulk of Singaporean case law concerns arbitration agreements and thus fall under the ambit of the IAA, necessitating a more deferential approach. It might even be disingenuous to make this general statement, as it is probable that Singaporean courts will take a similar full merits approach when dealing with the enforceability of ADR clauses which do not involve arbitration agreements, since they would not be bound by the IAA to give primacy to arbitral tribunals.50 The Singaporean focus on appropriate case management promotes efficiency and ensures that contractual dealings are still fair and open despite a strong policy in favour of arbitration.

50

Though there has yet to be established case law.

75

Singapore Comparative Law Review

DISCLOSURE, DETECTION, DECRIMINALISATION: HIV TRANSMISSION AS A CRIME IN THE UNITED KINGDOM AND SINGAPORE Pang Kar Lok1

INTRODUCTION In the 1990s, the Human Immunodeficiency Virus (‘HIV’) epidemic became a global human rights issue. 2 Litigation, advocacy, 3 public education and the media brought awareness of the epidemic to the fore. The spread was alarming because it reflected deficiencies in healthcare provision – critics argued against prohibitively expensive costs of medical patents, which limited access to healthcare and prevented recovery.

While HIV disproportionately affects gay and bisexual men in both UK and Singapore, the effectiveness of public health systems is questionable. More worryingly, Singapore’s emphasis that Pre Exposure Prophylaxis (‘PrEP’) “is good for those at high risk but abstinence, being faithful and condom use are still important”4, and relative lack of public health focus, do little to tackle the root cause. In the UK, although HIV transmissions have decreased, 5 gay and bisexual men remain the most severely affected.6

1

I am grateful to Mr Justin Lim for his contributions towards an early draft of this paper. Any errors remain my own.

‘Human Rights and HIV’ Avert (October 10, 2019) <https://www.avert.org/human-rights-and-hiv> accessed March 28, 2020 ‘ARASA’ <https://www.arasa.info/home/1> accessed March 28, 2020 Teo J, ‘New Drug to Prevent HIV Infections Available Here’ The Straits Times (December 5, 2016) <https://www.straitstimes.com/singapore/health/new-drug-to-prevent-hiv-infections-available-here> accessed March 28, 2020 From 2,800 in 2012 to 800 in 2018.

Haigh J, ‘HIV Infections among Gay and Bi Men Fall by 71% in UK’ BBC News (January 16, 2020) <https://www.bbc.com/news/health-51122979> accessed March 28, 2020 2

3 4

5 6

76

Singapore Comparative Law Review The HIV epidemic is multi-faceted and requires a targeted approach which considers the unique challenges and disproportionate effect on a country’s population. While the law merely regulates HIV transmission, arguably, in sending policy signals and reflecting society’s moral views, it has wide-reaching sociological impacts. Considered thus, it is submitted that decriminalising HIV transmission is an enlightened step in the right direction.

BACKGROUND The UK set a goal of ending local HIV transmission by 2030. With the invention of treatments that not only manage symptoms but enable infected individuals to lead ‘normal’ lives (in March 2020, the second HIV patient was cured),7 forecasts remain optimistic as “[HIV] transmissions continue to fall”.8 In Singapore, the Ministry of Health (‘MOH’)9 advisory reflects the government’s broader policy stance in favour of the nuclear family structure. 10 Alongside regular prevention and early detection,11 MOH endorses the “most effective way to prevent HIV infection”12 as “remain[ing] faithful to one’s spouse/partner and avoid[ing] casual sex”. 13 Similar to the UK, Singapore has witnessed decline in new HIV cases. 14 Nonetheless, this may not be easily attributable to public health measures: while the UK made PrEP more readily available and accessible,15 PrEP in Singapore is available at the only public sexually transmitted infection clinic16 and two major hospitals.17

Roberts M, ‘Second Patient Cured of HIV, Say Doctors’ BBC News (March 10, 2020) <https://www.bbc.com/news/health-51804454> accessed March 28, 2020 Haigh J, ‘HIV Infections among Gay and Bi Men Fall by 71% in UK’ BBC News (January 16, 2020) <https://www.bbc.co.uk/news/health-51122979> accessed March 28, 2020 ‘Update on the HIV/AIDS situation in Singapore 2018’ (June 2019) Ministry of Health <https://www.moh.gov.sg/resources-statistics/infectious-disease-statistics/hiv-stats/update-on-the-hiv-aids-situation-insingapore-2018-(june-2019)> accessed March 28, 2020 Of a married couple, comprising one male and one female. e.g. using condoms when engaging in sexual activity and going for early and regular HIV-testing Ibid, [5] 7

8

9

10 11 12 13

Ibid

Yong C and Iau J, ‘Decline in New HIV Cases, Even as More Go for Voluntary Screening’ The Straits Times (December 1, 2019) <https://www.straitstimes.com/singapore/health/men-accounted-for-most-of-the-275-cases-ofhiv-reported-from-jan-to-oct-this-year> accessed March 28, 2020 Pebody R, ‘How to Get PrEP in the UK’ aidsmap.com (July 1, 2019) <https://www.aidsmap.com/about-hiv/howget-prep-uk> accessed March 28, 2020 ‘Status of PrEP by Country’ PrEPMAP <https://www.prepmap.org/prep_status_by_country> accessed March 28, 2020 The National University Hospital and Tan Tock Seng Hospital.

14

15

16

17

77

Singapore Comparative Law Review PrEP: The scientific consensus PrEP can be taken by high-risk individuals 18 and HIV-negative partners, 19 prior to sexual intercourse, to prevent HIV infection.20 One study21 found an 86% fall in new infections among gay men on PrEP.22 Viral suppression is when antiretroviral therapy (‘ART’) reduces one's viral load to an undetectable level. Although HIV remains in the body,23 the risk of transmission is negligible, meaning that said risk is statistically so small that it is not worth considering. 24 Two studies25 found that after the HIV-positive partner was on ART for at least six months, there was no HIV transmission during unprotected sex. 26 Further, the Centers for Disease Control and Prevention concurred with scientific evidence asserting that when an individual has an undetectable HIV viral count, there is effectively no risk of transmission. 27 This follows the lead of more than 400 international groups that signed a consensus statement recognising that “undetectable = untransmittable”.28 Echoing the sentiment of the Commission on Human Rights that the right to the highest attainable standard of health includes access to ART,29 and given the scientific consensus, the law should be reviewed to keep pace with existing medical knowledge.

UK and Singapore courts’ views

Who frequently have unprotected sex.

With HIV that is not virally suppressed.

If taken consistently, when a condom is not worn and someone comes into contact with HIV, it protects cells in the body and disables the virus to stop it multiplying.

Run by the UK Medical Research Council.

Medical Research Council and Mrc, ‘PROUD Study Shows Pre-Exposure Prophylaxis Is Highly Protective against HIV Infection’ News and features - Medical Research Council (June 14, 2018) <https://mrc.ukri.org/news/browse/proud-study-shows-pre-exposure-prophylaxis-is-highly-protective-against-hivinfection/> accessed March 28, 2020 ‘Viral Suppression Definition’ National Institutes of Health <https://aidsinfo.nih.gov/understanding-hivaids/glossary/1650/viral-suppression> accessed March 28, 2020 ‘Undetectable = Untransmittable’ Asia's Leading Sexual Healthcare Network. <https://www.pulse-clinic.com/u-u/> accessed March 28, 2020.

Cohen MS and others, ‘Antiretroviral Therapy for the Prevention of HIV-1 Transmission: NEJM’ New England Journal of Medicine (March 17, 2020) <https://www.nejm.org/doi/full/10.1056/NEJMoa1600693#t=article> accessed March 28, 2020; Rodger AJ and others; ‘Sexual Activity Without Condoms and Risk of HIV Transmission in Serodifferent Couples When the HIV-Positive Partner Is Using Suppressive Antiretroviral Therapy’ JAMA (July 12, 2016) <https://www.ncbi.nlm.nih.gov/pubmed/27404185> accessed March 28, 2020 The studies tracked couples in which one partner was HIV-positive and one partner was not.

‘Consensus Statement: United States: Prevention Access Campaign’ <https://www.preventionaccess.org/consensus> accessed March 28, 2020 Akers W, ‘HIV: Undetectable, Can't Transmit the Virus’ Healthline (September 28, 2018) <https://www.healthline.com/health-news/cdc-person-with-undetectable-hiv-cannot-transmit-virus#2> accessed March 28, 2020 ‘States’ UNAIDS <http://data.unaids.org/publications/irc-pub03/3797_en.html> accessed March 28, 2020 18 19 20

21 22

23

24

25

26 27

28

29

78

Singapore Comparative Law Review Classification of HIV transmission as a crime In Singapore, s 23(3) of the Infectious Diseases Act (‘IDA’) 30 criminalises the failure of persons living with HIV (‘PLHIV’) to disclose the risk of HIV transmission to sexual partners before engaging in sexual activity. Though the use of the law for HIV prevention is not limited to Singapore, most jurisdictions do not punish non-disclosure of HIV-positive status; what is criminalised is reckless or malicious exposure to, or actual HIV transmission.

In the UK, HIV transmission is considered inflicting31 grievous bodily harm under s 20 of the Offences Against the Person Act 1861 (‘OAPA’). 32 The UK Law Commission has called for reform of the OAPA,33 termed a ‘force-fitting’ of a law “widely recognised as being outdated”34 that sought to include too much within its ambit.35 The “unsatisfactory”36 structure of the Act was criticised: there is no clear hierarchy of offences and the differences between the three most commonly prosecuted offences37 are not clearly spelt out.

Compared to Singapore,38 the OAPA is over-broad and unclear. Further, under the OAPA, it is for the jury to determine whether a particular harm is serious. This thus introduces uncertainty that rests on the subjective discretion of juries.

The case for consent GCP v Public Prosecutor, the first IDA prosecution case that reached the Singapore High Court 39

(‘SGHC’), was dismissed as the SGHC found that HIV-positive status was not communicated to the sexual partner, and even if communicated, it may not be sufficient to discharge the legal obligation under s 23(1). Instead, PLHIV must go further by communicating the risk of HIV transmission.40

Originally enacted in 1976 and amended in January 2016. ‘inflict’ was held to be synonymous to ‘cause’ by Lord Hope in R v Ireland, R v Burstow [1997] 4 All ER 225 HL. Dica [2004] EWCA Crim 1103, [2004] Q.B. 1257 Reform of Offences against the Person (Law Com No 361) <http://www.lawcom.gov.uk/app/uploads/2015/11/51950-LC-HC555_Web.pdf> accessed March 28, 2020 30 31 32 33

34

Ibid

The claim was that the OAPA uses archaic language and follows a Victorian legislative approach of listing separate offences for individual factual scenarios, many of which are no longer necessary.

35

36

Ibid

ss 18, 20 and 47 Where specific legislation is used to identify HIV within the category of “infectious diseases”.

[2019] SGHC 153 This is prescribed by s 23(1), which requires the PLHIV to inform their sexual partner of “the risk of contracting HIV” from them.

37 38 39 40

79

Singapore Comparative Law Review Though disclosing one’s HIV-positive status may “ordinarily be sufficient,” 41 a protective stance favoured “ignorant, poorly informed or misinformed” victims.42 Noting Parliament’s intention43 “for the sexual partner to be placed in a position to assess the risks and then to make an informed decision as to whether to accept them”,44 the SGHC posited that it would be “undesirable”45 for PLHIV to assume or take for granted their sexual partners’ appreciation or knowledge of the risk of HIV transmission.

Similarly, the UK case of Konzani46 held that consent to the risk of contracting HIV could not be inferred from consent to unprotected sexual intercourse, and was therefore not a valid defence.

For a valid defence, Dica47 held that there had to be willing and informed consent to the specific

risk of contracting HIV: “It does not follow … that consensual acts of sexual intercourse are unlawful merely because there may be a known risk to the health of one or other participants. These participants are … simply prepared, knowingly, to run the risk – not the certainty – of infection.”

Both Singapore and UK courts emphasise willing and informed consent, specifically to the risk of HIV transmission. That said, the courts do not reveal a blatant paternalistic stance in deciding whether one has the capacity to consent, or whether one ought to be protected from making bad decisions.

Ascertaining consent: disclosure The SGHC dismissed MOH’s standard that PLHIV must inform their sexual partners if they have been diagnosed with HIV before engaging in sexual intercourse,48 on the basis that an expert

41 42 43 44 45 46 47 48

Ibid Ibid Referring to Parliamentary debate on this law.

Ibid Ibid

[2005] EWCA Crim 706, [2005] 2 Cr. App. R. 14 [2004] EWCA Crim 1103, [2004] Q.B. 1257 ‘AIDs/HIV’ Ministry of Health <https://www.moh.gov.sg/diseases-updates/aids-hiv> accessed March 28, 2020

80

Singapore Comparative Law Review witness’s49 opinion of the law “cannot be conclusive”50 and “ignorance or misapprehension of the law”51 was inexcusable.

In the UK, schools of thought for consent have been divided: i. the ‘subjective view’ sees consent as a state of mind of the victim; 52 ii. the ‘objective view’ sees consent as an outward manifestation by the victim in words or acts which indicate permission is granted to the defendant to do the act;53 iii. the third view requires both a subjective state of mind of the victim and the expression of that state of mind.54 The UK Government Home Office summarised its views as follows:55

“[T]he role of the law [is] to make it unambiguously clear that intimate sexual acts should only take place with the agreement of both parties.”

Meanwhile, Herring argues for stricter definitions of consent, which depends on “good reason” i.e. knowing the wishes of the other person before sexual intercourse. 56 s 74 of the Sexual Offences Act 2003 states that “a person consents if he agrees by choice, and has the freedom and capacity to make that choice”. The question of consent in the UK is thus a question of law, not a question of fact for the jury.

THE IMPLICATIONS OF CONSENT AND SCIENCE ON THE LAW The requirement for consent

49 50 51

From the Singapore’s National Public Health Unit.

GCP v Public Prosecutor [2019] SGHC 153 Ibid

‘Rape and Sexual Offences - Chapter 3: Consent’ Rape and Sexual Offences - Chapter 3: Consent | The Crown Prosecution Service <https://www.cps.gov.uk/legal-guidance/rape-and-sexual-offences-chapter-3-consent> accessed 52

March 28, 2020 Brett N (1998) ‘Sexual offences and consent’ Canadian Journal of Law and Jurisprudence 11(1): 69–88 Alexander, L., Hurd, H., & Westen, P. (2016) ‘Consent Does Not Require Communication: A Reply to Dougherty’ Law and Philosophy 35(6), 655-660 Government White Paper (November 2002) Protecting the Public: strengthening protection against sex offenders and reforming the law on sexual offences (Cm 5668) Herring J. (2018) Criminal Law: Text, Cases, and Materials 53 54

55

56

81

Singapore Comparative Law Review The requirement for consent57 safeguards against the violation of individual bodily integrity. 58 It is because the body is where we experience states of well-being, it is the way in which we execute our agency, that we have such a broad and all-encompassing right over our own bodies. 59 Hurd argues that “the “moral magic” of consent … turns trespass into a dinner party and rape into love making”;60 Herring adopts the extreme view that sex, “the stuff of abuse, oppression and a tool of war”,61 is a prima facie moral wrong.

The moral argument based on justification 62 and the feminist argument that “any credible interpretation of … sexual penetration in our culture betray[s] a social meaning of sexual penetration which devalues women qua women and disrespects women’s humanity” 63 can also be advanced, since HIV transmission disproportionately affects vulnerable groups. 64

Decriminalising HIV transmission As discussed, case law in both jurisdictions is far from definitive in ascertaining consent, and schools of thought are split between descriptive and normative expositions of consent.

While consent is essential in the law of sexual offences, the uncertainty posed regarding the extent of consent required introduces ambiguity over how one is expected to communicate the risk of HIV transmission: How much information is necessary for a person to sufficiently communicate their risk of HIV transmission? How does the scope of this duty change, depending on the level of knowledge of the putative victim?65 With the advent of technology,66 Dica shows how full disclosure is difficult to police: 67

The right gives a person exclusive use of, and control over, their body on the basis that the body is the site, location, or focal point of their subjectivity (however understood and constituted).

Wall J. (2017) ‘Depression and the Law’ (ed Foster and Herring) Herring J. and Wall J. (2017) ‘The nature and significance of the right to bodily integrity’ Cambridge Law Journal 76: 566 Heidi H. (2005) ‘Blaming the Victim: A Response to the Proposal That Criminal Law Recognize a General Defense of Contributory Responsibility’ 8 Criminal Law Review 503, 504 Herring J. (2007) ‘Human rights and rape: A reply to Hyman Gross’ Criminal Law Review MAR., 228–231.

Madden D. and Herring (2007) ‘Why Sexual Penetration Requires Justification’ Herring J. (2018) Criminal Law: Text, Cases, and Materials Gay and bisexual males and the black African population in the UK; gay and bisexual males and women as a whole in Singapore.

Yang D and others, ‘At Your Own Risk: The Criminalisation of HIV Non-Disclosure in Singapore’ Right Now (January 29, 2020) <http://rightnow.org.au/analysis/risk-criminalization-hiv-non-disclosuresingapore/?fbclid=IwAR19jv9Wrh4Ud43iB1Lcn_Z-Qeg3MmkIiteVLVjZ1NUZkK8BTMvT146PKY0> accessed March 28, 2020 M.J. Scannell (2019) ‘Online Dating and the Risk of Sexual Assault to College Students’ Center for Clinical 57

58 59

60

61 62 63 64

65

66

Investigation Brigham and Women’s Hospital 67

[2004] EWCA Crim 1103, [2004] Q.B. 1257

82

Singapore Comparative Law Review “[C]riminalising the consensual taking of risks … undermine[s] the general understanding that sexual relationships are pre-eminently private … if adults were to be liable to prosecution for the consequences of taking known risks with their health, it would seem odd that this should be confined to … sexual intercourse.”

Dica68 further raised the floodgates argument of whether other “serious contagious illness[es]”

69

ought to be considered similarly. The legal duty to forewarn (the harm principle) ought to be general and “not one restricted to HIV transmission”.70 While a person with a communicable disease should ensure he does not transmit it, a person free from disease is also under a duty to ensure he does not acquire it.

Notwithstanding, the criminalisation of HIV transmission could be regarded as “prejudice against those who are HIV-positive”. 71 Konzani discusses the difficulties of balancing potentially conflicting interests:72

In the public interest … the spread of catastrophic illness must be avoided or prevented. On the other hand, the public interest also requires that the principle of personal autonomy in the context of adult non-violent sexual relationships should be maintained.

Risk of HIV transmission is ambiguous to the extent that a 1% risk and a 99% risk are both considered ‘risks’, yet the latter poses an altogether disproportionate risk with serious consequences that, but for another 1%, would have been near certainty of contracting a communicable disease. A fair balance between the rights of victims and potential perpetrators must be struck; consideration must be given to current scientific consensus and policy interests.

CONCLUSION While recommendations to reform the OAPA were submitted, 73 full adoption without parliamentary consultation is unlikely in the UK. Meanwhile, there is no conterminous intention in Singapore. Reasons include MOH’s policy concern of protecting public health, society’s

68 69 70 71 72 73

Ibid Ibid Ibid

Herring J. (2012) ‘Criminal Law: Great Debates’ Palgrave MacMillan [2005] EWCA Crim 706, [2005] 2 Cr. App. R. 14 (1998) ‘Violence: Reforming the Offences Against the Person Act 1861’ Home Office Consultation Paper

83

Singapore Comparative Law Review stigmatisation of the gay and bisexual male population,74 and the court’s unwillingness to accept the scientific consensus.

Considering HIV as a sociological issue in light of the floodgates argument in Dica,75 and noting COVID-19’s classification under the IDA, 76 the law in both jurisdictions impedes societal progressiveness by limiting PLHIV77 from living their lives with certainty. Vagueness surrounding the extent of communication to obtain consent imposes unfair burdens on PLHIV, who already contend with stigmatisation and, increasingly, stresses associated with courts’ arbitrary definitions of ensuring others are fully informed.

Criminalising same-gender sex and HIV non-disclosure adds to the epidemic: the root cause can be better addressed by efforts to understand the multi-faceted challenges posed. In this regard, the decriminalisation of HIV transmission is an enlightened step towards societal integration, promoting understanding, and relieving PLHIV of undue burdens. Fundamentally, the issue of consent can be reframed with greater public awareness and education efforts that inform and shape constructive perspectives of PLHIV.

As shown in the reluctance to repeal s 377A of the Penal Code.

[2004] EWCA Crim 1103, [2004] Q.B. 1257 Owing to its high rates of infection. Interestingly, this raises the question of whether HIV transmission ought to be criminalised in the same way, since it is not contagious but transmitted sexually.

Who are overwhelmingly from vulnerable minority groups in society.

74 75 76

77

84

Singapore Comparative Law Review

JUDICIAL REVIEW OF ERRORS OF LAW:

PRIVACY INTERNATIONAL AND NAGAENTHRAN Yu Jiaqi

INTRODUCTION In administrative law, the court’s ability to judicially review a decision-maker’s compliance with the statute is a major facet of imbuing accountability and fairness in the system. One of the key mechanisms to do so is the court finding that the decision-maker has made an error of law in its decision-making process which warrants the court’s intervention. However, the nature of errors of law that may be subjected to judicial review has been far from certain, featuring a confusing mix of case law and commentary that has spawned many different theories. The recent case of

R (Privacy International) v Investigatory Powers Tribunal (“Privacy International”) has seen the 1

Supreme Court once again review the fundamental understanding of the judicial review of errors of law. This article aims to clarify the present English law in light of the ruling. Further, Singapore’s position on judicial review of errors of law will also be examined in comparison, in hopes of drawing out implications of the case on the future development of English and Singapore administrative law in this area.

THE ENGLISH LAW ON JUDICIAL REVIEW OF ERRORS OF LAW “Jurisdictional” and “Non-jurisdictional” Errors of Law Traditionally, a distinction was drawn between “jurisdictional” and “non-jurisdictional” errors of law. A jurisdictional error of law would mean that the decision was made outside of the decision-

1

[2019] UKSC 22

85

Singapore Comparative Law Review maker’s jurisdiction and could be subjected to judicial review, while a non-jurisdictional error of law would remain within the decision-maker’s jurisdiction and was largely exempted from review by the courts unless disclosed on the face of the record of proceedings. This was affirmed by Denning LJ in R v Northumberland Compensation Appeal Tribunal ex parte Shaw 2, and marked the starting point of the modern classification on judicial review of errors of law.

However, there were significant difficulties to this categorisation. Conceptually, it was notoriously difficult to distinguish between “jurisdictional” and “non-jurisdictional” errors of law as the legal concept was unclear and statutes gave little guidance. This translated into an inconsistent application of the law. Where various decision-makers attach different meanings onto the same legal provisions, the courts will have to accept all decisions as long as they were non-jurisdictional, which is inimical to ensuring legal certainty.

Anisminic Due to these considerations, the courts gradually moved away from the jurisdictional and nonjurisdictional distinction, as reflected in one of the most influential administrative law cases:

Anisminic v Foreign Compensation Commission (“Anisminic”). In Anisminic, the House of 3

Lords did not abolish the distinction, but laid the foundations for that possibility by recognising jurisdictional errors as a broad concept that may be committed by authorities embarking on an unauthorised inquiry, or breaching rules of natural justice by exercising powers in an unauthorised manner. This was made abundantly clear in Lord Pearce’s speech that “[l]ack of

jurisdiction may arise in various ways.”4 This suggests that whenever decision-makers commit an error fulfilling the above, it did not matter if the error could be classified as “jurisdictional” or not: all could be subjected to judicial review. Nonetheless, their Lordships still saw some merit in maintaining the divide where a decision-maker might be permitted to decide some questions of law conclusively for itself for it may have legal expertise5.

[1952] 1 KB 338 (Denning LJ) “No one has ever doubted that the Court of King’s Bench can intervene to prevent a statutory tribunal from exceeding the jurisdiction which Parliament has conferred on it;…the King’s Bench can intervene when a tribunal makes a mistake of law. A tribunal may often decide a point of law wrongly whilst keeping well within its jurisdiction.”

[1969] 2 AC 147 Ibid, 194 Ibid, 207 (Lord Wilberforce) “[t]here is always an area, narrow or wide, which is the tribunal’s area” 2

3 4 5

86

Singapore Comparative Law Review It remained uncertain if the concept of non-jurisdictional error of law survived. In Pearlman v

Harrow School (“Pearlman”) , all three judges adopted different interpretations of the law after 6

Anisminic. Lane LJ stated that Anisminic retained the distinction, but held that the case was a non-jurisdictional matter. Eveleigh LJ agreed to the extent that Anisminic retained the distinction, but on the facts, he held that this was a jurisdictional question of law. Lord Denning thought

Anisminic articulated a general principle that all questions of law are jurisdictional. This state of uncertainty in the law continued until the case of R v Hull University Visitor, ex p Page7 (“Page”).

Clarification in Page: all errors of law are jurisdictional

Page clarified the law on errors of law. The House of Lords held that as a general principle, “any error of law made…in reaching its decision can be quashed”. This suggested that the distinction between jurisdictional and non-jurisdictional errors of law had been made redundant in English law, such that all errors of law are considered jurisdictional” and can be subjected to judicial review by the courts, seemingly putting an end to the post-Anisminic debate.

However, the decision in Page was not without criticism. Giving courts complete power to judicially review decision-makers could frustrate the legislative intent of delegating decisionmaking powers to these bodies. Daly 8 argued that these delegated bodies may actually be in a vastly superior position compared to a reviewing court in handling niche questions of law, as they have greater institutional competence than a reviewing court and are democratically accountable for decisions made. As such, it appeared that the law on reviewing errors of law had yet to achieve a satisfactory balance.

Privacy International, and what this means for English Law The most recent decision in Privacy International suggested that courts were., progressing in a new direction when judicially reviewing errors of law.

Privacy International: Facts and Ruling

6 7 8

[1979] QB 56 [1993] AC 682 Paul Daly, ‘Deference on Questions of Law’ [2011] 74(5) MLR 694

87

Singapore Comparative Law Review Privacy International claimed for judicial review of the Investigatory Powers Tribunal’s (“IPT”) decision. They argued that the IPT had misinterpreted s 5 of the Intelligence Services Act 1994 and erroneously concluded that the Secretary of State could authorise computer hacking on a thematic basis. IPT argued that its decision should be excluded from judicial review under s 67(8) of the Regulation of Investigatory Powers Act 2000 (“RIPA”), which provided that “determinations, awards, orders and other decisions of the Tribunal (including decisions as to whether they have jurisdiction) shall not be subject to appeal or be liable to be questioned in any court”.

The Divisional Court9 and the Court of Appeal10 held that there should be no judicial review of IPT’s decision as the RIPA exemption of “decisions as to…jurisdiction” meant that all decisions founded on “an erroneous view of the law” were immune from review. However, the Supreme Court held to the contrary and steered clear of reasoning using the language of “jurisdictional” decisions.

Lord Carnwath (with whom Lady Hale and Lord Kerr agreed) criticised the

distinction between jurisdictional and non-jurisdictional errors as “based on foundations of sand”11, and held that s 67(8) only removed judicial review over errors of fact but still allowed for judicial review of legal errors made by the IPT.

Implications on English Law The first implication of the Supreme Court’s judgement and reasoning is a crucial re-examination of the basis of judicial review 12 . Is judicial review to be triggered by a decision-maker’s jurisdictional error (regardless of fact or law); or by an error of law (regardless if it were jurisdictional or non-jurisdictional)? From Lord Carnwath and Lord Sumption’s reasoning, it can be seen that the courts did not focus on classifying the error as jurisdictional or not. As such, it seems clear that the notion of jurisdiction is no longer the driving force behind determining the scope of the court’s powers of judicial review.

[2017] EWHC 114 (Admin), [42], that there was a “material difference” between the sort of decision-making body whose decision was impugned in Anisminic and the IPT, since the latter was itself “exercising a supervisory jurisdiction over the actions of public authorities”.

[2017] EWCA Civ 1868, [24], the statutory language “decisions as to…jurisdiction” meant that all decisions, including those founded on “an erroneous view of the law”, were immune from review.

[2019] UKSC 22, [84] Mark Elliott, Alison L Young, ‘Privacy International in the Supreme Court: Jurisdiction, The Rule of Law and Parliamentary Sovereignty’ (2019) 78(3) CLJ 490-496 9

10

11 12

88

Singapore Comparative Law Review This is related to the second implication, where the courts instead adopt a more flexible and pragmatic approach to determining when courts should review decisions of inferior courts or tribunals 13 . Rather than looking to classify an error as jurisdictional, the majority in Privacy

International focused on an amalgamation of considerations such as the rule of law, the specific statutory interpretation, and the institutional features of the inferior court or tribunal in question to determine the scope of judicial review.14 At first glance, this new pragmatic approach might appear to be an unprecedented and complete departure from the previous categorical approach that focused solely on determining if the error was jurisdictional.

However, upon scrutiny of the case law since Anisminic, it becomes clear that there is actually little novelty in the idea that courts focus on more pragmatic considerations when deciding the proper approach to judicial review. It has been argued that the theory that all legal errors result in an excess of jurisdiction and was treated by courts to be judicially reviewable is “more commonly a feature of textbook analysis than it is of judicial reasoning itself”, and was retrospectively “grafted” onto judicial decision making15.

Firstly, it is a long-standing feature of the courts to focus on navigating the details of the specific statute and extracting the policy goals underlying it to determine if the decision should be reviewed16. In R v Hillingdon LBC ex parte Puhlhofer17, Lord Brightman took the legislation in question as the proper starting point, dedicating the bulk of the judgement to uncovering the policy goals behind the passing of the Act and considering whether judicially reviewing the authority’s decision will frustrate these legislative goals. It was eventually held that the court should judicially review only where the authority departed from the “ordinary meaning” of the language of the Act, while making no mention of the jurisdictional question from the Anisminic decision. Similarly, in R (A) v Croydon London Borough Council18, the Supreme Court focused on identifying the policy aims underlying the Children Act 1989 and the implications it would have on judicial oversight of decisions by local authorities. Lord Hope reasoned that given that the parliamentary intention behind the statutory scheme was not “to leave the matter to the judgment of the local authority”, the courts therefore should have the ability to review the correctness of the local authority’s findings. Clearly, in practice, judges have long employed an

n 12 [130]-[132] n 13, 493 Joanna Bell, ‘Rethinking the Story of Cart v Upper Tribunal and its Implications for Administrative Law’ (2019) 39(1) OJLS 74 13 14 15

16 17 18

Ibid

[1986] AC 484 [2009] UKSC 8

89

Singapore Comparative Law Review approach that focused on the specific statutory framework to determine if judicial review should be carried out. The decision of Privacy International only articulated and highlighted the approach.

Secondly, courts have also been deciding their approach to judicial review in consideration of the institutional features of the decision-maker in question. In R (Cart) v Upper Tribunal 19

(“Cart”), the Supreme Court notably disparaged the Court of Appeal’s attempt to leverage on the jurisdictional concept to shape the extent of judicial review of the Upper Tribunal’s decisions.

Instead, the court invoked the “second-appeals criteria” to strike the best balance between two sets of practical considerations: aligning with the parliamentary intention of creating the Upper Tribunal to alleviate the High Court’s caseload whilst safeguarding against rule of law concerns that errors of law would be left unchecked in the system. Post- Cart, judicial review of errors of law were carried out based on a balance of those two factors, and not on whether the error was within the decision-maker’s jurisdiction. This once again echoes the focus on pragmatic factors raised in Privacy International.

As such, while it is difficult to predict the exact extent of the impact of Privacy International, it is ultimately clear that there has been a shift in direction of judicial reasoning when it comes to determining when courts may judicially review a decision that made an error of law. Rather than the orthodox categorical approach of scrutinising analytical distinctions between semantics of “jurisdictional” and “non-jurisdictional”, courts are moving towards a pragmatic approach with a specific focus on the rule of law, statutory intentions, and underlying policy goals of the decisionmaker in question.

SINGAPORE’S POSITION ON JUDICIAL REVIEW OF ERRORS OF LAW At this juncture, it is useful to turn our attention to Singapore’s position on the law for comparative purposes.

Article 93 In contrast to English law, judicial review in Singapore is first and foremost governed by Article 93 of the Constitution of the Republic of Singapore 20, which vests judicial power exclusively in the courts. As such, while there has been relatively limited discussion on the law of judicially 19 20

[2011] UKSC 28 Constitution of the Republic of Singapore (1999 reprint of 1985 Rev Ed)

90

Singapore Comparative Law Review reviewing errors of law in Singapore21, the statutory intention of Article 93 itself arguably demands that all errors of law are to be considered jurisdictional errors of law. Given that judicial power includes the power to state the law authoritatively22, all errors of law must therefore be able to be subjected to the court’s final scrutiny, and there would be no such thing as an error of law that the executive has the jurisdiction to commit.

Hence, it seems that there was no question of when errors of law can be subjected to judicial review. However, this relatively settled area of law was reviewed by the Supreme Court recently in the case of Nagaenthran a/l K Dharmalingam v PP23 (“Nagaenthran”).

Nagaenthran and “Jurisdiction” On the facts, s 33B (4)24 of Singapore’s Misuse of Drugs Act purportedly partly ousts judicial review of the Public Prosecutor’s determination of whether a drug trafficker has substantively assisted the anti-drug enforcement agency. The claimant thus sought to argue against the ouster clause on the basis that it was (a) unconstitutional in consideration of Article 93, and (b) ineffective because of the Anisminic principle.

The High Court25 commented obiter that even though the ouster clause was constitutionally valid, the Anisminic principle could be applied such that judicial review was not prevented as the Public Prosecutor had made a jurisdictional error of law26. It noted that while existing precedent “do(es) not offer instructive guidance in respect of whether the courts in Singapore currently regard all errors of law as jurisdictional errors of law” 27 , but “if the principle in Anisminic…is indeed affirmed in the context of Singapore, this would effectively be facilitating the judicial review of administrative actions tainted by all errors of law, even when a relevant ouster clause has been It is noted that the “jurisdictional” and “non-jurisdictional” distinction was mentioned in Stansfield Business International Pte Ltd v Minister for Manpower [2018] SGHC 112, [2019] SGCA 37, which cited passages that 21

alluded to adoption of such categorisation in Singapore. However, there was no conclusion on the exact state of that possibility, and the comment was made obiter.

Tan Seet Eng v Attorney-General [2015] SGCA 59 [90]. ‘the Judiciary has the responsibility for the adjudication of controversies which carries with it the power to pronounce authoritatively and conclusively on the meaning of the Constitution and all other laws’.

[2019] 2 SLR 0216 22

23

Discretion of court not to impose sentence of death in certain circumstances 33B.— ... (4) The determination of whether or not any person has substantively assisted the Central Narcotics Bureau in disrupting drug trafficking activities shall be at the sole discretion of the Public Prosecutor and no action or proceeding shall lie against the Public Prosecutor in relation to any such determination unless it is proved to the court that the determination was done in bad faith or with malice 24

25 26 27

[2018] SGHC 112

Ibid, [117] Ibid, [120]

91

Singapore Comparative Law Review enacted.”28 This demonstrates that the courts at least recognised the possibility of applying the concept of jurisdiction as a factor in granting judicial review. It is perhaps telling that ultimately, while the court repeatedly highlights that it declines to make a conclusive comment on whether all errors of law are jurisdictional errors of law29, it proceeds “on the assumption that all errors of law should be regarded as jurisdictional errors of law” 30. It is submitted that the Singapore Courts do employ the Anisminic principle (even if implicitly) in their consideration of granting judicial review.

Nagaenthran and “Green Light Theory” However, just as how Privacy International highlighted pragmatic concerns that English courts have beyond the jurisdictional question when determining the appropriateness of judicial review,

Nagaenthran also goes on to highlight another factor termed the “green-light” approach that Singapore courts might consider when deciding on judicial review.

This approach is premised on the idea that the objective of administrative law is not to “stop bad administrative practices but to encourage the good ones”31. Hence, good governance should be less sought through judicial oversight and more through political avenues 32. According to the court, the “green-light” approach “is presently the most accurate reflection of the socio-political attitude in the existing Singapore milieu” and is “not aligned” with the Anisminic principle of nullifying every single decision tainted by the error of law. While again, this factor was raised obiter and hence not binding on Singapore law, it still sheds light on the court’s approach towards a rarely discussed area of Singapore administrative law and could be used as suggestive precedent in future cases.

GOING FORWARD: WHAT SHOULD THE LAW ON JUDICIAL REVIEW BE BASED ON?

28 29 30

Ibid, [123] Ibid, [119] Ibid, [124]

Chan Sek Keong, ‘Judicial Review—From Angst to Empathy’ (2010) 22 Singapore Academy of Law Journal 480. (n 25), [123] “…the “green-light” approach towards administrative law…entails the seeking of good government through the political process and public avenues rather than the seeking of redress for bad government through the courts, with courts operating not as the first line of defence against administrative abuses of power, but merely as supporting members in a tripartite government by helping to articulate clear rules and principles which the government may abide by and conform to…”

31 32

92

Singapore Comparative Law Review As discussed, the English and Singapore positions differ on their current treatment of judicial review of errors of law.

Singapore courts have chosen to continue to apply the Anisminic principle strictly, where only jurisdictional errors of law can be subjected to judicial review. Nagaenthran suggests that even such a limited approach might provide courts with still too excessive judicial oversight, which should be reined in by the “green-light” theory.

However, the judgement has also been criticised33 for distorting the “green-light” theory to justify exempting certain errors of law from judicial review. It has been argued that contrary to what

Nagaenthran appears to suggest, the theory does not require that the courts continue to hold back even when some irregularity in the decision-making process has been proven 34. At best, it only advocates for a greater level of deference to the executive in the process of considering whether an error of law has been committed at all, but will not justify an exemption from being considered for judicial review in the first place. As such, the “green-light” theory is likely a descriptive model that is sometimes given prescriptive value, but nonetheless should not be determinative of the question of whether courts should judicially review the decision.

On the other hand, it is seen that English law has gained more flexibility with the judgement of

Privacy International. Courts are likely moving away from the Anisminic approach of distinguishing errors of law by whether they are within “jurisdiction”, and towards taking a pragmatic approach through considering a wider amalgamation of policy factors. It is submitted that Privacy International is a welcomed change. The previous conceptual apparatus and semantics of “jurisdiction” had heavily obscured important policy questions 35 that encapsulated the underlying considerations to granting judicial review powers. A retreat from jurisdictional analysis would hence be desirable if it enables courts to have more direct and explicit judicial engagement with underlying issues of policy of principle, instead of trying to shoehorn such concerns into the false binary of ”jurisdictional” and “non-jurisdictional” errors of law.

Benjamin Joshua Ong, ‘The Constitutionality of Ouster Clauses’ (2019) 19(1) OUCLJ 157-178 Lee Zhe Xu, ‘When Is an Ouster Clause Ousted?’ Singapore Law Blog (6 July 2018) <www.singaporelawblog.sg/blog/article/214> accessed 6 October 2018 Joanna Bell ‘To what extent should the reviewing court proceed on the basis that legislation has delimited the authority of the decision- maker, and that constitutional principle dictates that the court must see that the scope of that authority is not exceeded? And to what extent should the reviewing court be sensitive to the notion that the decision- maker—whether because the legislature so intended, or because of sound reasons of policy or constitutional principle—might or should itself play some role in shaping the contours of its authority’ 33 34

35

93

Singapore Comparative Law Review Crucially, it is submitted that the English approach could be considered by Singapore courts as an alternative to its current model. The increased flexibility for courts to check executive action is particularly valuable, as Singapore’s executive-dominated legislature has negligible power to politically control the executive. Coupled with a heightened public consciousness on the reviewability of public authority decisions, the law will hopefully be nudged to better allocate the authority between courts and decision-makers.

94

Singapore Comparative Law Review

PURE ECONOMIC LOSS: LESSONS FROM SINGAPORE? Wong Lei Yi

INTRODUCTION One type of loss that has traditionally been controversial in negligence claims in terms of its actionability is pure economic loss. This refers to economic loss not resulting from physical damage to one’s person or property.

On the one hand, UK courts have generally continued to uphold the rule that pure economic loss is not actionable in negligence, with the exception of the principle set out in Hedley Byrne v

Heller & Partners (“Hedley Byrne”). On the other hand, Singapore’s Court of Appeal has set 1

out a test for the tort of negligence as a whole (including pure economic loss claims) in Spandeck

Engineering (S) Pte Ltd v Defence Science & Technology Agency (“Spandeck”). The thesis of 2

this article is that English courts could learn from the approach taken by Singaporean courts in order to alleviate arbitrariness in the law. This article will set out in individual sections the law in each jurisdiction and will analyse the reasons for the different approaches.

THE UK APPROACH The UK courts have historically taken a restrictive approach towards pure economic loss claims in negligence. Such claims are not actionable, save for the Hedley Byrne principle. In Hedley

Byrne, it was held that a negligent misstatement may give rise to an action for damages for financial loss, since the law will imply a duty of care when a party seeking information from a

1 2

[1964] AC 465 [2007] 4 SLR(R) 100

95

Singapore Comparative Law Review party possessed of a special skill trusts him to exercise due care, and that party knew or ought to have known that reliance was being placed on his skill and judgment.

Justifications The rationale for such an approach is centred on the indeterminacy of pure economic loss claims.

It is difficult for tort to sanction wrongs where the wrongs do not have clear boundaries. Firstly, there may be an indeterminate number of claimants for pure economic loss for a single negligent act. This is because the limits of proximity do not apply as transparently to economic loss as they do to physical damage, as physical damage suffered by one is usually not shared with another. 3 Secondly, a claim in negligence for pure economic loss may be indeterminate in size. It has been said that when it comes to lost profits, for example, it will often only be the claimant who can accurately determine the size of the economic loss.4 As such, in the process of balancing the interests of potential claimants and defendants, the courts have decided to stay within certainty.

Hedley Byrne is a stark exception to this rule. Their Lordships arguably came to their decision by considering if negligent words could give rise to a duty of care, starting their analysis with the decision in Derry v Peek (“Derry”).5 They reasoned that Derry did not preclude a duty of care being founded on negligent words. In doing so, they unfortunately did not isolate and explicitly address the issues of a pure economic loss claim. However, they did provide limits to such a claim by requiring an assumption of responsibility in order for a duty of care to arise. Although this may have been an adequate safeguard for the purposes of such a claim alone, the decision in Hedley created issues in the law with regards to pure economic loss.

Problems

Hedley created an awkward boundary in the law, which may even be arbitrary, because there is no meaningful distinction between being negligent by conduct and being negligent by words for the purposes of negligence liability. This can be demonstrated by comparing two cases. In Smith

v Bush, it was held that a valuer owed a duty of care to a mortgagor to exercise reasonable skill 6

and care in carrying out the valuation if he was aware that the mortgagor would probably purchase 3

Caparo Industries PLC v Dickman [1990] 2 A.C. 605, 632

4

J. Stapleton, ‘Duty of care and economic loss: a wider agenda’ (1991) 107 LQR 249, 255 [1889] UKHL 1 [1990] 1 AC 831

5 6

96

Singapore Comparative Law Review the house in reliance on the valuation without an independent survey. This came under Hedley liability. In Murphy v Brentwood DC (“Murphy”), 7 the defendant council relied upon the consulting engineers' advice, which had not taken account of calculation errors in the design of the foundation, and passed the building plans. Thus, the house was built with a defective foundation, which caused extensive damage to the walls and pipes of the house. It was held that where a defect was discovered before any injury to person or damage to property other than the defective house itself had been done, the cost of repair was pure economic loss, and that therefore, there was no recognised duty of care. Therefore, it would seem that the difference in the recognition of a duty of care was merely in that one case involved a statement of information and the other did not. Jane Stapleton argues that there is no meaningful distinction between a builder building the foundations three feet deep and a surveyor stating it should be three feet deep.8 Hence, it may be concluded that in the effort not to stray from Hedley, the courts have produced a difference in verdict where there may not have been a substantial difference in the facts. This is dangerously close to arbitrariness.

Another problem with disallowing pure economic loss claims more generally is that of the strict separation between pure economic loss and economic consequences flowing from negligent damage to property. In the latter case, a duty of care can be found. The distinction blurs, however, when it comes to property like a house. Lord Keith in Murphy remarked that it would be unrealistic to separate a house from its electrical wiring if the entire package had been provided by a contractor. However, if ‘the electric wiring had been installed by a subcontractor […], it might not be stretching ordinary principles too far to hold the electrical subcontractor liable for the damage’.9 In the same case, Lord Bridge said instead that there was a difference between the flawed construction of a foundational part of the structure and ‘some distinct item incorporated in the structure which positively malfunctions so as to inflict positive damage on the structure in which it is incorporated’.10 Lord Keith’s distinction was based on who would have been ‘at fault’ for the flaw in the structure, whereas Lord Bridge’s distinction was based on which part of the structure was faulty. These distinctions purportedly draw the line between a claim in negligence and no claim, and yet there is almost an element of arbitrariness to them.

7 8 9 10

[1991] 1 AC 398 J. Stapleton, ‘Duty of care and economic loss: a wider agenda’ (1991) 107 LQR 249, 282 [1991] 1 AC 398, 470 Ibid, 478

97

Singapore Comparative Law Review SINGAPORE’S APPROACH The Singaporean approach has been to create an entirely new test for negligence (including pure economic loss cases). Singaporean courts first departed from the traditional approach (seen above) in the case of RSP Architects & Engineers v Ocean Front Pte Ltd,11 which would set the precedent for cases involving condominium defects.

Condominium cases The Court of Appeal in Ocean Front imposed a duty of care for pure economic loss in actions brought by management corporations for the negligent design and defective construction of condominiums. The Court declined to follow English authority and premised its decision on what it found to be sufficient proximity in the relationship between the management corporation and the developers of the condominium. It held further that since the cost of repair was of a certain amount, there would not be indeterminate liability as to the size of the claim. Additionally, as the common property would remain in the control of the management corporation, there would not be indeterminacy as to the number of claimants.

This decision was important for claims involving real property, because it is precisely in such cases that there is a determinate claimant. This is usually the owner of the property or the management corporation. The size of the claim is accordingly determinate as well, so there is no problem of foreseeability. Such a decision is also the natural solution for the real property issue exposed in Murphy.

However, it could also be said that reforming this pocket of liability alone simply creates problems not dissimilar to the ones already present in English law. Moreover, we have not yet reached the heart of the issue in pure economic loss, which is key to solving the problems it spawns. This is where proximity once again becomes central to the discussion.

The New Test The Court of Appeal in Spandeck set out a new test for recognising duties of care in a negligence claim, irrespective of the type of damages claimed, including claims for pure economic loss. 12

11 12

[1996] 1 SLR 113 [2007] 4 SLR (R) 100

98

Singapore Comparative Law Review The requirements are that the damage suffered is (1) factually foreseeable; (2) there exists sufficient legal proximity between the parties for a duty of care to arise; (3) a breach of that duty has occurred; and (4) there are no policy considerations as to why the duty of care in question ought not to be imposed. The Court alleviated the difficulties of giving proximity a precise definition by clarifying that the twin criteria of voluntary assumption of responsibility and reliance were the best indicators of proximity.

By deciding on the existence of duties of care on common criteria rather than on the type of loss, the new test aids in reducing the potential for arbitrariness and goes directly to the heart of negligence liability. The Court recognised that different tests ‘diminishes the desirability of having a general principle that can provide a coherent, consistent and reliable way of determining or recognising a duty of care.’ 13 Moreover, the requirement of considering policy reasons for disallowing liability is useful for trickier cases such as those involving indeterminate liability. The Singapore courts are likely to apply the test more stringently in such cases. Additionally, the safeguard of policy could also be used to bar claims where the claimant has already accepted a prior risk allocation, such as in a contract. Thus, the role of tort in this context does not necessarily have to overlap with contract and create double liability.

WHY THE DIFFERENCE? There are two main reasons as to why this difference in approach taken exists. Firstly, courts in the UK prefer to use categories of recognised situations to find duties of care, instead of having to rely on concepts like proximity, which tends to be considered an empty concept.14 However, such an approach has allowed the law to be riddled with inconsistency and arbitrariness. It would be better, as the Singapore Court of Appeal has done, to examine once more the heart of negligence liability and to clarify the requirements in greater detail whilst making provision for areas of the law in which there is greater potential for indeterminacy.

The second reason for the difference in approach may lie in Singapore’s social circumstances.

Prof. Goh Yihan has posited the view that land scarcity in Singapore is a major reason for its approach in pure economic loss cases.15 He drew attention to the reasoning in RSP Architects

Planners & Engineers v. Management Corp. Strata Title Plan No. 1075, where the Court held 13

Ibid, [72]

[1990] 2 A.C. 605, 618 Goh, Yihan. ‘Tort Law in the Face of Land Scarcity in Singapore’. (2009). Arizona Journal of International and Comparative Law. 26, (2), 335-391 14 15

99

Singapore Comparative Law Review that the scarcity and price of land in Singapore were ‘realities which, to our mind, are instrumental in dictating the expectations and degree of reliance placed upon the persons developing, building or designing the structure which stands upon it.’16 As such, it is not a surprise that the first step the Singapore courts took towards departing from the exclusionary rule with regards to pure economic loss was in cases regarding real property. This does not mean that UK courts ought not to depart from the exclusionary rule, but that they may have less of a socio-economic motivation to do so.

CONCLUSION Ultimately, the courts in the UK may be able to learn from Singapore’s approach, by dealing with problems that are mostly intertwined with pure economic loss, rather than by disallowing such cases completely and as a result creating arbitrariness in the law. Provisions can be made to accord the requisite deference to Parliament in respect of the role of policy, but the necessity of using policy reasons itself should not cause English courts to shy away from setting a more robust test for recognising duties of care.

16

[1999] 2 SLR at 470

100

Singapore Comparative Law Review

ON KNIFE’S EDGE—THE OPERATION OF DURESS AND NECESSITY AS MURDER DEFENCES Marcus Ho

INTRODUCTION English and Singapore jurisdictions have long grappled with the Gordian Knot of crafting a finely balanced offence of murder. At first glance, the doctrine of murder may seem balanced. Yet, it is but an iron fist in a velvet glove, disguising unprincipled legislative developments barring duress and ‘necessity’ as murder defences in both jurisdictions.

This article argues that necessity and duress should be defences to murder. Currently, English law only recognises necessity as a pseudo-defence to murder, confined to the narrow context of

Re A. Conversely, duress is completely excluded as a defence to murder.

1

In Singapore, necessity is a defence to murder pursuant to s 81 of the Singapore Penal Code (‘PC’), while duress is not a defence to murder pursuant to s 94 of the PC. Whilst the current position relating to necessity is satisfactory, duress should be extended to murder in both jurisdictions. In the final analysis, rather than adopting a sweeping position for excluding duress in every murder charge, this article argues that courts should be granted discretion to determine the suitability of the defence in specific circumstances. This is consistent with views shared by the English Law Commission 2 and of Singaporean academics such as Chan.3 ENGLISH LAW

1

Re A (Children) (Conjoined Twins – Surgical Separation) [2000] 4 All ER 961

The Law Commission; Murder, Manslaughter and Infanticide (No 304) <http://www.lawcom.gov.uk/app/uploads/2015/03/lc304_Murder_Manslaughter_and_Infanticide_Report.pdf> W.C.Chan, ‘Legislation and Case Notes: Developments in Duress: Coercion, Moral Choice and Subjectivism’ [2012] Sing. J.L.S. 154 (Jul) 2

3

101

Singapore Comparative Law Review Necessity Though several cases held there is no general defence of necessity in English law, 4 they must be contrasted with cases where a necessity plea was successful.5 This apparent inconsistency has led to academics such as Stark to posit there is no defence of ‘necessity’ per se.6 Instead, ‘necessity’ is better regarded as an overarching principle, classified into ‘justificatory necessity’, ‘best-interest interventions’ and ‘excusatory necessity’ (i.e. duress). This article will examine each limb, justifying whether it should exist as a defence to murder.

‘Justificatory necessity’ At present, ‘justificatory necessity’ is recognised only as a murder defence confined to the narrow context of Re A. Re A involved a surgical intervention to separate a pair of conjoined twins, with death of the weaker twin being a virtual certainty.

In Re A, necessity justified the death of the weaker twin, as he was an “innocent threat designated for an early death”.7 Brooke LJ recognised necessity as the “lesser of two evils”,8 confining it to when: (i)

the act is needed to avoid inevitable evil;

(ii)

no more should be done than reasonably necessary;

(iii)

evil inflicted must not be disproportionate to evil avoided.9

As Simester and Sullivan opines, ‘justificatory necessity’ has been suitably confined to a balanced state.10 In general, this is when an individual impedes another’s survival, and if no action is taken said individual would have died, lowering the survival odds of the others with his demise.

Viewed thus, it is possible to draw a parallel between Re A and the Zeebrugge ferry disaster.11 In the disaster, the defendant (‘D’) sought to climb a ladder to escape drowning. The way was barred by the victim (‘V’) who, immobilised by fear, clung to the ladder. D, in order to save himself and

Dudley and Stephens [1884] 14 Q.B.D. 273; Southwark L.B.C v. Williams [1971] Ch 734 Gillick v. West Norfolk and Wisbech AHA [1986] A.C. 112; Re A (Children) (Conjoined twins – Surgical Separation) [2000] 4 All ER 961 F. Stark, ‘Nicklinson and Necessity’ [2013] Crim. L.R. 949-965 Re A (Children) (Conjoined Twins – Surgical Separation) [2000] 4 All ER 961 239E Ibid, 192G Ibid, 240D 4 5

6 7 8 9

10 11

Simester and Sullivan’s Criminal Law 825

Ibid, 817; Smith, Justification and Excuse in the Criminal Law (1989) 73-4

102

Singapore Comparative Law Review others, tore V from the ladder. Consequently, V died from drowning; D and others climbed to safety.12 There, D’s acts could be justified by ‘justificatory necessity’; should V continue barring the way, everyone would have died. The present position of ‘justificatory necessity’ is thus satisfactory, being founded on Stephen’s conception of “the greater good”, with the ulterior goal of protecting the wider public.13 In ‘justificatory necessity’, the lack of culpability supersedes the ultimate harm which results.

Here, the normative principle undergirding the principle of justificatory necessity is fuelled by the idea that the ‘justification’ for performing the act ‘for the greater good’ absolves the culpability of the individual. Taking this further, one may view justificatory necessity as being based on the ‘greater good’, as opposed to being based more on an ‘economic justification’ of weighing up the proportionality between the ‘evil inflicted’ and ‘evil avoided’. Brooke LJ’s calculus harmonises these ideas and wrangles them into the doctrine of justificatory necessity, bringing much balance to this doctrine.

Indeed, cases fulfilling the criteria to raise justificatory necessity as a criminal defence ought to be defences to murder.

‘Best-interest interventions’ ‘Best-interest interventions’ necessity could be analysed in terms of whether harm is caused to the person whose ‘best-interests’ are advanced, akin to Re F.14 Stark’s hypothetical example of a soldier on fire, with no way to extinguish the flames, is relevant. Said soldier, in too much pain, is unable to ask his fellow soldiers to shoot him, and they have no indication of his wishes. D, in compassion, shoots V, believing that instant death, not prolonged suffering, is in V’s ‘bestinterests’. 15 It is persuasive to believe that D acted in V’s interest: this inevitably reduces his culpability; and to label him a murderer offends fair labelling. As Robinson argues, criminal law as an institution loses moral legitimacy if it does not ensure D is punished in a way commensurate to his culpability.16

Simester and Sullivan’s Criminal Law 817 Marc O. DeGirolami, ‘Against Theories of Punishment: The Thought of Sir Fitzjames Stephen’, 9 Ohio St. J. Criminal L.699 (2012) Re F (Mental patient sterilisation) [1990] 2 AC 1 F. Stark, ‘Nicklinson and Necessity’ [2013] Crim. L.R. 949-965 Paul H. Robinson, ‘Institutions of Justice – Implications for Criminal Law and Justice Policy’, 27 12 13

14 15 16

103

Singapore Comparative Law Review Yet, the context where this could operate is limited; it must be virtually certain V is facing imminent death before one can claim such defence.

Admittedly, this raises thorny issues, such as applicability to voluntary euthanasia .17 Indeed, ‘bestinterest interventions’ is an area deserving further judicial examination in order to fortify its existence as a principled one.

Duress Duress is not a murder defence, as held in Howe.18 Yet, in Hasan19, Lord Bingham opined that extending duress to murder was “irresistible”. 20 Two key flaws in Howe render this stance unsatisfactory: Firstly, Lord Hailsham suggested an ordinary person is not expected to be capable of heroism if asked to take an innocent life rather than sacrifice his own21 — to rule otherwise will vindicate “the coward and poltroon”.22 Here, Lord Hailsham might be drumming at a wider doctrinal issue entrenched in criminal law.

The heroism argument may not just be about vindicating cowards. A better view would be that it is consistent with ideas of morality in modern society. Indeed, a coward, thinking he is a hero, may not actually be a hero, and it is in society’s interest to discourage subjective and skewed individual perceptions of heroism, rather than protect morally deplorable actions from prosecution.

However, this focus on altruism is but an arbitrary watermark. As Lord Reed posited, “it is inapt to demand heroism as [a] pre-requisite for exculpation”.23 Moreover, there are circumstances in which the citizen of reasonable fortitude not only would, but should yield to the threat.24 To do so might be considered as choosing the lesser of two evils — an example canvassed by Smith and Hogan would be a threat to kill D and his family if D does not commit, or assist in, an act he knows will cause grievous harm (‘GBH’) but not death (though, ex hypothesi, it results in death

17 18 19 20 21 22

R (Nicklinson) v MOJ [2013] EWCA Civ 961 Howe [1987] AC 417 Hasan (sub nom Z) [2005] UKHL 22, [2005] 2 A.C. 467 ([2006] Crim. L.R. 142) Ibid, 490D Howe [1987] AC 417 432B Ibid

A Reed, ‘Duress and Normative Moral Excuse – Comparative standardisations and the Ambit of Affirmative Defences’, General Defences in Criminal Law (2014) 100 Smith and Hogan’s Criminal Law, 407 23

24

104

Singapore Comparative Law Review and constitutes murder).

25

Notwithstanding, caution should be raised against this

counterargument that D is choosing the lesser of two evils. Duress recognises the pressures faced

by D and the circumstances in which it might be reasonable for D to act in the way he did due to his state of mind. Here, to consider D’s act as the ‘lesser of two evils’ might be dangerous, as this could very well lead to the same problems faced by the ‘necessity’ defence.

The second argument raised was that, in controversial cases, prosecution could be avoided 26 as D will not be considered a murderer.

However, even if D was not prosecuted, D would be, in law, a murderer. Furthermore, in select cases, the person under duress might be expected to appear as the principal witness for the prosecution,27 in which case the judge would be required to inform the jury that he was a murder accomplice— on whose evidence it would be dangerous to act in absence of corroboration.28 Since a morally innocent person should not be left at the mercy of administrative discretion on a murder charge, the current position is unsatisfactory.

Pragmatic Considerations Excluding duress could also lead to pragmatic inconsistencies. For example, should D intentionally cause GBH, fulfilling the mens rea for murder, he will only be able to raise duress successfully should V survive.29 Therefore, raising duress becomes a matter of moral luck.

The principled position should be that suggested by the English Law Commission — allowing duress as a defence to murder.30

SINGAPORE LAW Necessity s 81 of the PC posits “nothing is an offence” should a crime be committed under necessity, thereby including murder. s 8 provides a helpful illustration — a captain is faced with a dilemma

25 26 27 28 29 30

Ibid, 408 Howe [1987] AC 417 445D

Schedule 4; Crime & Disorder Act 1988; Sub-Paragraphs (1) & (2) Smith and Hogan’s Criminal Law, 408 s 18, Offences Against the Person Act 1861

Ibid

105

Singapore Comparative Law Review — either he (i) runs a boat down (‘Boat B’) containing 30 passengers, or (ii) alters his course (though incurring the risk of running another boat down (‘Boat C’) with 2 passengers). If the captain performed the action (ii) in good faith without intention to run down Boat C, with the purpose of avoiding eminent danger to Boat B, he will be able to raise necessity.

Here, the captain may be liable for murder, if it can be shown that he knew that the change of course was “so imminently dangerous it could cause death”. The normative theory of ‘justificatory necessity’ (Part I) may be applied to justify the Singapore position, as reflected in the illustration above — killing two to save thirty.

Yet, Chan, Morgan and Yeo note an interesting anomaly — s 81 could be representative of both ‘justificatory’ and ‘excusatory’ necessity.31 Indeed, the use of ‘excuse’ in Illustration A of s 81 seems indicative of this. Perhaps, it was in the back of the drafter’s mind that deliberate destruction of human lives is an anthesis to the ‘justification’ principle, though ‘excusatory’ necessity may operate to preclude liability.

Nevertheless, necessity could be further refined. This author argues ‘proportionality’ must be a separate requirement added to s 81. This is especially important in murder, as it forces courts to confront whether this trade-off is justified. However, the other requirement in necessity — that conduct must be ‘necessary’ — bars courts from placing ‘sanctity of life’ at a pedestal, instead requiring a top-down analysis to be taken, which includes other considerations such as the unavoidable death of D, ‘best-interest’ principles, ‘lesser-evil’ principles or conflict of duties facing D. These were applied in Re LP.32 Viewed thus, the current Singapore position is normatively satisfactory. However, the operation of the necessity could benefit from more precision by forcing courts to undertake a more comprehensive dialogue in weighing up cases of necessity to murder charges.

Duress The defence of duress is outlined in s 94 PC. Yeo argues that the concept of duress remains rooted in the idea of a “competent moral agent” choosing the “lesser of two evils” in extreme circumstances, to which said severity of circumstances renders the moral agent blameless. 33 Right

31 32 33

Chan, Morgan and Yeo, ‘Criminal Law in Malaysia and Singapore, Third Edition’, 668

Re LP (adult patient: medical treatment) [2006] 2 SLR 13

Yeo, ‘Duress, Personality Disorder and Drug Syndicates’ [1989] 1 MLJ xviii

106

Singapore Comparative Law Review from the outset, s 94 excludes murder, and this provision has been strictly followed. 34 In interpretation of said provision, however, this defence has been further extended to offences such as abetment to murder.35 Comparing English and Singapore law, a much stricter position has been adopted in the former.

In English law, Howe prevents duress being applied in abetment of murder, as said distinction is highly artificial. There may be cases (such as contract killings) where abettors can be more culpable than murderers, and yet escape criminal liability. Several Lords in Gotts further asserted that the defence should not apply to attempted murder.36 A holistic review shows English law taking a tougher stance than Singapore.

Following this article’s thesis in favour of extending duress to murder, the same reasoning should extend to Singapore, a view supported by Chan, Morgan and Yeo.

37

Indeed, serious

consideration should be given to such an extension, allowing Singapore criminal law to advance alongside Commonwealth jurisdictions such as Australia. Viewed thus, the rigidity of murder can be shattered, providing a more balanced legal framework reflecting society’s advancement.

Taking Stock A final comparison between Singapore and English Law reveals an underlying judicial undercurrent for ‘justificatory necessity’ to remain a murder defence. Brooke LJ’s principles from Re A are reflected in s 81 Singapore PC as well, although Singapore’s current framework could be further refined by adding an element of proportionality, forcing courts to undertake a detailed top-down analysis of any given context. It remains uncertain whether ‘best interest necessity’ should be developed as an independent limb of necessity in both jurisdictions – indeed, the necessity defence in both jurisdictions remain tightly confined, though said author argues this is an area deserving further judicial examination.

CONCLUSION

34 35 36 37

Wan Kamil bin Md Shafian v PP [2002] SGCA 15 Chao Chong v PP [1960] MLJ 238 R v Gotts [1991] 2 AC 412

Chan, Morgan and Yeo, ‘Criminal Law in Malaysia and Singapore, Third Edition’, 629

107

Singapore Comparative Law Review This article has argued that necessity and duress should be defences to murder. The present position excluding duress as a murder defence in both jurisdictions cuts little ice in refining murder as a more sophisticated doctrine, and there has been calls in a myriad of common law jurisdictions for reform. Likewise, necessity should remain a defence to murder, though finer distinctions could be crafted in both jurisdictions.

It is hoped the Gordian Knot of crafting a balanced offence of murder could be unravelled in time to come, and that suggestions advanced in this article will allow an approach consistent with normative theory to be achieved.

108

Singapore Comparative Law Review

BLURRED LINES: NO DISTINCTION BETWEEN AGENCY AND VICARIOUS LIABILITY IN FRAUD Ng Sze Hian1

INTRODUCTION In English law, the doctrines of agency and vicarious liability in fraud overlap significantly as a product of English legal authority dating back to the 18th century. This was noted by Lord Keith in the leading case of Armagas Ltd v Mundogas S.A. (‘Armagas’)2, who stated that ‘ostensible authority in the contractual field is closely intertwined with that of vicarious liability for the fraud of a servant’3. By drawing on a combination of said legal authority and policy considerations, His Lordship then held that a principal’s vicarious liability for an agent’s tort of deceit is determined using agency principles. In essence, whether a principal is vicariously liable for an agent’s fraud should be determined by whether or not the deceitful conduct of the agent was within his or her actual or ostensible authority (the ‘authority test’). This was reaffirmed by the English Court of Appeal in the recent case of Winter v Hockley Mint4 (‘Hockley Mint’).

The Singaporean courts have taken a divergent path. In Ong Han Ling v AIA5 (‘Ong Han Ling’), Belinda Ang J distinguished agency from vicarious liability; a principal’s agency liability for an agent’s act is primary whereas an employer’s vicarious liability for an employee’s tort is secondary 6.

In this vein, ‘a principal’s liability for the acts of its agent, at least when established through the authority test, cannot be said to be truly vicarious’7. Belinda Ang J thus reaffirms the Singapore 1

I am grateful to Dr Paul MacMahon, Dr Emmanuel Voyiakis, and Ms Natalie Teoh for their helpful comments on a previous draft. Any errors in this article remain my own.

[1986] 1 A.C. 717 (HL) Ibid, 780F [2019] 1 W.L.R. 1617 (CA) [48] [2018] 5 SLR 549 (SGHC) Ibid, [210] 2 3 4 5 6 7

Ibid

109

Singapore Comparative Law Review Court of Appeal’s (SGCA) decision in Skandinaviska Enskilda Banken AB v Asia Pacific

Breweries (‘Skandinaviska’) 8, which rejects the Armagas test. In determining if a principal is vicariously liable for an agent’s fraud, the two-stage test in vicarious liability should be applied:

(1) Is the principal-agent relationship also a relationship of employment or is it akin to it?

(2) Does the tortious conduct of the agent possess a sufficient connection (or close connection) with the relationship between the agent and principal 9, such that the tort was committed in the course of an employee’s employment?

This article first considers the reasoning in Ong Han Ling and Skandinaviska. The Singaporean approach will then be contrasted with the English cases of Armagas and Hockley Mint. It is suggested that the former approach is preferable, and while the English position can be explained on policy grounds, this is ultimately not an adequate justification for the decision in Armagas.

Given the developments in vicarious liability, the two-stage test is perfectly capable of determining whether it is fair, just and reasonable to impose liability on a principal, without relying on agency principles.

AGENCY AND VICARIOUS LIABILITY—TWO SEPARATE CONCEPTS An examination of Ong Han Ling provides us with the Singaporean court’s doctrinal reasoning behind separating the principles of agency and vicarious liability. This is followed by a discussion of Skandinviska, which offers greater insight into the underlying policy reasons for the Singaporean position. In Ong Han Ling, an insurance agent engaged by AIA, the first defendant, defrauded the plaintiff, the Ongs, by selling them a fictitious policy ostensibly offered by the company. It was contended by the Ongs that, inter alia, AIA was vicariously liable for the agent’s fraud on either tort or agency principles. The Ongs’ claim in vicarious liability was subsequently allowed. Crucially, Her Honour affirmed the decision in Skandinaviska and held that the vicarious liability of AIA was determined solely based on principles of vicarious liability, notwithstanding the fact that AIA and the insurance agent were in an agency relationship. In

[2011] 3 SLR 540 (SGCA) n 5 at [160] & [213], also see Various Claimants v Catholic Child Welfare Society [2013] 2 A.C. 1 (HL) and Bazley v Curry [1999] 2 SCR 534 (SCC) 8 9

110

Singapore Comparative Law Review doing so, Her Honour confirmed that Singapore does not follow the English position in Armagas, where a principal’s vicarious liability for an agent’s fraud is determined by the authority test.

Belinda Ang J relied on the legal argument that agency and vicarious liability are fundamentally distinct10. A principal’s liability for his agent’s act, when determined through the authority test, is primary in nature11. The act of the agent is treated as the principal’s own act. In contrast, an employer’s liability for his employee’s tort is secondary. The employer is not taken to have committed the wrongdoing, but is held vicariously liable. According to Her Honour, this approach promotes legal certainty, ‘cleanly [separating] a principal’s primary liability on agency principles and an employer’s secondary or vicarious liability on the close connection test.’ 12 Her Honour also highlighted that principles of agency were not developed for tort law13 —agency is a contractual doctrine designed to regulate legal relations created when an agent, acting within his actual or apparent authority, enters into a contract with a third party on behalf of the principal.

It is not concerned with finding a principal liable for tortious acts committed by the agent, an area of law which is governed by vicarious liability instead.

SKANDINVISKA While Belinda Ang J’s reasoning is coherent insofar as it is based on legal principle, Her Honour did not address the policy reasons outlined by the SGCA in Skandinviska which was the original motivation for deviating from Armagas.

In Skandinviska, a finance manager of the defendant company defrauded the plaintiff banks by offering ostensible credit facilities. After the banks agreed, the manager accepted the credit facilities on behalf of the defendant by forging directors’ resolutions. The money was squandered, and the plaintiffs sought to recover their losses from the defendant on the basis of agency and vicarious liability. The Court first addressed the issue of agency liability, and held that the defendant company had not held out the finance manager as having either actual and/or ostensible authority to represent that the credit facilities had been duly accepted and that the forged resolutions were genuine 14.

10 11 12 13 14

n 5 at [209]

Ibid, [210] Ibid, [213] Ibid, [214] n 8 at 542

111

Singapore Comparative Law Review On the issue of vicarious liability, the SGCA declined to follow the authority test in Armagas15.

Instead, it held that vicarious liability imposed on an employer for all tortious acts committed by an employee, including fraud, should be determined based on the ‘close connection’ test16 first introduced in Lister v Hesley Hall (‘Lister’)17. In doing so, the Court ruled that vicarious liability for the tort of deceit should be determined purely based on principles of vicarious liability. Note that that the terminology used here differs from Ong Han Ling, as the scope of vicarious liability now includes not just parties in a relationship of employment, but also parties in a relationship akin to employment18. Nonetheless, the significance of the Court’s decision to reject Armagas remains unaffected.

The Court then explained its reasoning for using the ‘close connection’ test as the applicable test for vicarious liability for all torts, including fraud. Firstly, the Court noted that their Lordships in

Lister19 made no distinction between intentional acts (i.e. fraud) and inadvertent acts as it was 20

not ‘necessary to put any particular type of case into a special category where a different rule of liability should apply’21. This approach was endorsed in Skandinviska; if intentional torts are not distinguished from inadvertent torts, fraud should not be treated any differently 22. Thus, a unitary approach should be adopted when finding vicarious liability for all torts.

Next, the Court held that the ‘close connection’ test was normatively desirable, as it was ‘an intellectually satisfying and practical criterion’23. Crucially, the test allowed the Court to ‘examine all the relevant circumstances – including policy considerations – and determine whether it would be fair and just to impose vicarious liability on the employer’24. These policy considerations are (a) effective compensation for the victim; and (b) deterrence of future harm by encouraging the employer to reduce the risk of similar harm in future25.

Nonetheless, the Court acknowledged several problems with the ‘close connection’ test. Of relevance is the contention that imposing vicarious liability on an employer may not always be If the SGCA had applied Armagas, this would have rendered a discussion on the applicability of vicarious liability redundant since the same authority test used in determining agency liability would be applied. In choosing to adopt the ‘close connection’ test instead, it gave the appellants an alternative cause of action 16 n 8 at [75] and [86] [2002] 1 A.C. 215 (HL) Various Claimants v Catholic Child Welfare Society [2013] 2 A.C. 1 (HL); n 9; also see Mohamud v WM Morrison Supermarkets plc [2016] A.C. 677 (HL) n 17 n 8 at [86] Ibid, [86] 15

17 18

19 20 21 22 23 24 25

Ibid Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd [2002] 3 HKLRD 844 (HKCFA) n 8 at [75]

Ibid, [76]

112

Singapore Comparative Law Review effective in deterring future harm in intentional torts. Employers may have done ‘all that is reasonable to deter the tort’ but still fail to prevent its commission26. Thus, the aforementioned policy considerations ‘cannot in themselves be determinative of every case’ 27, and there are other potentially relevant policy considerations counterbalancing victim compensation and deterrence.

Yet the Court declined to list them and instead held that each case must be decided on its facts.

Following from this, it is instructive to ask – when the English Courts in Hockley Mint and

Armagas applied agency principles when finding whether a principal is vicariously liable for an agent’s fraud, were there different policy considerations at play apart from that of victim compensation and deterrence?

TRADITIONAL FOUNDATIONS IN THE TORT OF DECEIT In Hockley Mint, the Court of Appeal had the opportunity to revisit Armagas. Given that

Armagas pre-dated Lister, it was open to the Court to hold that Lister had superseded Armagas and that the tort of deceit should not be treated any differently from other wrongdoings.

Nevertheless, Armagas was reaffirmed28. After examining Hockley Mint and Armagas, one key policy consideration can be identified.

The tort of deceit requires the victim to rely upon a representation made by the tortfeasor (the ‘employee-agent’) 29. Unlike other intentional or negligent torts which are unilateral in nature (where a corresponding response from the victim is not necessary), the tort of deceit requires that the victim must have been induced by the fraudulent misrepresentation to enter into the transaction. If the misrepresentation was not made within the ostensible or actual authority of the employee-agent, then the victim must be placing his reliance exclusively upon the employeeagent30 and it will be unjust to hold the employer-principal vicariously liable for fraud, as the victim knew that the representation was made exclusively by the agent who was not authorised to do so.

It will be explained that this concern is fundamentally at odds with the policy consideration of victim compensation identified in Skandinviska, where the employer is ‘usually the best placed

26

Ibid, [80]; N. McBride and R. Bagshaw, Tort Law (Pearson, 6 edn 2018) 854. Arguably, vicarious liability, as a th

form of strict liability, requires that defendants pay whether or not they have taken all reasonable care.

27 n 8 at [81] [2019] 1 W.L.R. 1617 (CA) [48] Ibid, [50] n 2 at 738C-D, 739F-740A (Robert Goff LJ); n 2 (782E, 782H-783B) (Lord Keith) 28 29 30

113

Singapore Comparative Law Review and most able to provide effective compensation to the victim (of a tort)’31. This belief is closely intertwined with the theory of loss spreading made by Tony Weir, which argues that the costs of compensation can be better absorbed by companies32. Arguably, it is fair and just to do so, based on the concept of enterprise risk; since an employee is hired to advance the interests of the employer, he should bear the responsibility of compensating a victim’s loss arising from said employee’s tortious conduct when it was committed during the course of employment 33.

Nonetheless, the objective of victim compensation is not unfettered. Is it always fair and just to impose liability on an innocent employer simply because he is able to absorb the loss and spread it more easily than the tortfeasor? While the theory of enterprise risk may somewhat justify victim compensation, it fails to explain why non-profit bodies, who are not in business for themselves, are subject to vicarious liability as well34. A more helpful proposition may come from Chan Sek Keong CJ, who observed that the legitimacy of this policy consideration rests on the assumption that ‘the victim of the tort is not at fault for the tort, or is less at fault than the blameworthy party’35.

While vicarious liability is ‘strict’, and does not require any fault on the ultimate defendant’s part, it does not imply that victim should be absolved of any wrongdoing. If the cornerstone of the common law is moral culpability i.e. seeking justice against the blameworthy to compensate a victim’s loss, it must mean that the faults of a victim must be considered.

With this in mind, we now turn our attention back to the tort of deceit. If the victim relies upon the fraudulent misrepresentation without taking any reasonable steps to ascertain the authority of the agent to make the representation, it is arguable that vicarious liability cannot be imposed on the employer-principal because the victim is more blameworthy. Victim compensation thus loses much of its moral force. In this sense, there is a link between authority and victim compensation in relation to reliance-based torts such as fraud. The rationale for the test in Armagas crystallizes, and can be justified with significant conviction.

Moreover, as mentioned, the position in Skandinviska may be ineffective in deterring future harm36. It may even result in increased fraud; the disregard for authority places a significant risk

n 8 at [77] T. Weir, A Casebook on Tort (10 edn, Sweet & Maxwell, 2004) 269; P.S. Atiyah, Vicarious Liability in the Law of Torts (London: Butterworths, 1967) 27; G. Calabresi, ‘Some Thoughts on Risk Distribution and the Law of Torts’ (1961) 70 Yale L.J 500 n 31. Also see note 26 at 854 This was the result of the Various Claimants v Catholic Child Welfare Society (n 9); also see note 26 at 855. n 8 at [78] n 27 31 32

th

33 34 35 36

114

Singapore Comparative Law Review on businesses while providing less incentive for potential victims to exercise prudence and due diligence as may be appropriate37.

THE PREFERRED POSITION? In declining to follow Armagas, Belinda Ang J emphasised legal principle. Indeed, it is conceptually confusing to overlap the doctrines of agency and vicarious liability. At best, it is a product of English legal history. In Armagas, Lord Keith highlighted that dishonest conduct (i.e. fraud) is of a different character from other intentional or inadvertent torts, as it is perpetrated with no intention of benefitting the employer but solely to procure a personal gain. As such, in vicarious liability, fraud is governed by a ‘line of authority of peculiar application’ 38.

Starting from the cases of Hern v Nichols and Lickbarrow v Mason39, it was noted by Ashhurst J that ‘whenever one of two innocent persons must suffer by the (deceitful) acts of a third, he who has enabled such third person to occasion the loss must sustain it’. The case was examined in

Slingsby v District Bank Ltd 40 , with Scrutton LJ stating that ‘enabling’ here referred to the employer having ‘held out or represented the servant as having the authority to do the acts complained of’41. By relying on these cases, Lord Keith concludes that the doctrines of agency and vicarious liability are closely intertwined42. Likewise, the same reasoning was employed by Lord Macnaghten in Lloyd v Grace, Smith & Co43 (‘Lloyd’) 44. To both Lord Keith and Lord Macnaghten, the essential feature of the employer’s liability is thus ‘reliance by the injured party on actual or ostensible authority’45.

But yet it is clear from Ong Han Ling that ‘acting within the scope of actual or ostensible authority’ and ‘acting in the course of employment’ are not synonymous in the modern context. In Lister, it was noted by Lord Clyde that ‘it is not useful to explore the historical origins of the vicarious liability of an employer in the hope of finding guidance in the principles of its modern

Tan Cheng-Hin, ‘Authority, Vicarious Liability and Misrepresentation’ (2012) Sing. J.L.S 101 n 2 at 790H-780C See Hern v Nichols [1708] 1 Salk. 289 (Holt C.J.); Lickbarrow v Mason [1787] 2 Term Rep. 63, 35 (Ashhurst J) [1932] 1 K.B. 544 (CA) at 560 n 2 at 780F n2 [1912] A.C. 716 (HL) 44 Ibid, (736) n 2 at 782E 37 38 39 40 41 42 43

45

115

Singapore Comparative Law Review application’46. One may thus question the relevance of legal history as an authority in coming to the conclusion made in Armagas.

Furthermore, it is highly plausible that Lord Keith may have been mistaken in his reading of the cases of Hern v Nicols and Lickmarrow v Mason. While the cases did not distinguish between the doctrines of agency and vicarious liability, it does not mean that they were meant to be taken as the same thing. In both cases, none of the terms ‘agency’ or ‘vicarious liability’ were invoked.

It may thus have been the case that the doctrine of vicarious liability had not been fully developed yet. Indeed, Neyers notes that the historical or jurisprudential origins of vicarious liability itself are not entirely clear47. In light of this uncertainty, the historical basis to treat the two doctrines as synonymous in the tort of deceit is questionable.

The English position can thus only be defended based on policy considerations. As mentioned, the underlying legal policy behind vicarious liability is victim compensation and future deterrence, which the Lister ‘close connection’ test satisfactorily considers. In Dubai Aluminium v Salaam48, Lord Nicholls noted that carrying on a business enterprise necessarily involves risks to others, such as harm done to third-parties due to wrongful acts committed by agents of the business.

When risks ripen into loss, the business is responsible for compensating the victim. Thus, liability ‘should not be strictly confined to acts done with the employer’s authority’ 49 , and a close connection test is preferred. However, as seen from Armagas, given that reliance-based torts such as deceit are fundamentally different from inadvertent and intentional wrongdoings, there may be other policy considerations that agency can account for. It is therefore arguable that there is merit to the English position for adopting agency principles in the tort of deceit instead of the close connection test. This is supported by Roberts, who argues that unlike the Armagas authority test, the Lister close connection test was not designed for reliance-based torts and is ‘not concerned with external appearances at all’50.

An interesting reconciliation is proposed by Tan Cheng-Hin SC, where he observed that the results and reasoning in Lloyd and Armagas are consistent with the ‘close connection’ test51 in

Skandinviska. In determining whether the fraud of the employee is so closely connected with his employment, regard was given to the agent’s authority. In Skandinviska, it was noted that it was n 17 at [34] J. Neyers, ‘A Theory of Vicarious Liability’ (2005) 2 Alberta Law Review 287, 289 Dubai Aluminium Co Ltd v Salaam and Others [2003] 2 A.C. 366 (HL) Ibid, [22] M. Roberts, ‘Vicarious Liability for Fraudulent Misrepresentations: Quinn v CC Automotive’ (2011) LMCLQ 457, 461 n 37 at 105 46 47 48 49 50

51

116

Singapore Comparative Law Review not ‘reasonable … to hold that it was within [the defendant]’s contemplation that there was a risk that [the agent] might defraud a third party which he had no authority to deal with’ 52 . The appellants could have also prevented the fraud by taking simple precautions such as contacting the defendant’s directors to verify the acceptance of the credit facilities 53. Tan concluded that ‘the requirement of close-connection is not met where the representation falls outside the actual or apparent authority of the employee-agent’54. Yet in Ong Han Ling, while Belinda Ang J held that the agent had no actual or apparent authority55, Her Honour allowed the plaintiffs’ claims in vicarious liability. A sufficient connection between the fraud and the agent’s relationship with AIA was found on the basis that AIA had afforded its agent an opportunity to abuse his power.

Nevertheless, implicit reference to authority may have been made when she acknowledged that the fraud was perpetrated within a framework where the agents were given a ‘wide range of responsibilities to act effectively as a one-stop shop to policyholders’ 56.

If the aforementioned proposition is valid, the ‘close connection’ test would clearly be able to incorporate the concerns in Armagas, as it is capable of examining various policy considerations, and is sensitive enough to addresses the clash between authority and victim compensation .

Support can also be drawn from Quinn v CC Automotive57 (‘Quinn’), where the authority test and by the Lister close-connection test58 were held to be simply alternative ways of ‘considering the same question’ 59. This suggests that the close connection test is just as competent as the authority test, and is nuanced enough to consider the question of authority in the context of reliance-based torts. Indeed, in Quinn, Gross LJ held that for the misrepresentation to fall within the close connection test, the victim had to rely on the employer’s representation, ‘as to the employee’s authority in respect of the transaction in question’60. Coupled with the fact that the close connection test is also more certain and conceptually principled, there is no reason why it should not be adopted for all torts61, including the tort of deceit.

52 53 54

n 8 at [91] n 37 at 105

Ibid

n 5 at 551 n 5 at [184] [2010] EWCA Civ 1412 (CA) n 50 n 57 at [21] n 57 at [20] It is also noted that the Lister test already applies for negligent misrepresentation; see So v HSBC Bank Plc [2009] EWCA Civ 296 (CA) at [60]. This rejects the proposition in F. Reynolds, Bowstead and Reynolds on Agency (18 edn, Sweet & Maxwell 2006) that the authority test is the correct test for determining vicarious liability in all reliancebased torts.

55 56 57 58 59 60 61

th

117

Singapore Comparative Law Review

CONCLUSION It remains to be seen whether the close connection test achieves a similar outcome to a test based on agency principles. Nonetheless, it would be unsurprising if Tan was found to be correct by the SGCA in the future; after all, if an agent was not acting within his apparent or ostensible authority, it would be difficult to imagine a scenario where there was a close connection between the tort committed and the agent’s employment. In view of this, this article argues that the approach taken by the Singaporean courts is desirable both based on principle and policy.

Having a unitary test for all torts creates certainty and prevents an overlap between tort and contract. Moreover, it is arguable that the ‘close-connection’ is flexible enough to account for the policy considerations in Armagas. Ultimately, the close connection test allows us to examine all the relevant circumstances of a case, including policy considerations, such that it is fair and just to hold an employer vicariously liable62.

62

n 24

118

Singapore Comparative Law Review

COVID-19: IMPLICATIONS FOR CONTRACTS UNDER SINGAPORE AND ENGLISH LAW Nicole Lim

INTRODUCTION COVID-19 has been regarded as the “black swan” event of 2020, causing massive upheaval to businesses and impacting economic ecosystems on an unprecedented scale. Since the onset of the pandemic, governments across the globe have responded with measures in the form of border restrictions and orders requiring employees to stay at home, which have severely disrupted business operations and supply chains. Many businesses which encountered difficulties in fulfilling their contractual obligations faced the threat of damages claims or risked having their deposits forfeited or leases terminated. This article will explore two primary avenues of contractual relief—force majeure clauses and the doctrine of frustration—under English and Singapore law. While Singapore’s position in these two areas of law accords with the English position, local jurisprudence further elucidates the legal position for parties. Also, new legislation fast-tracked through the Singapore Parliament now offers affected businesses and individuals interim relief in relation to certain contracts.

FORCE MAJEURE There is no established definition of “force majeure” under common law, contrary to civil law jurisdictions where it has a statutory definition. Force majeure clauses anticipate a supervening event beyond the parties’ control which prevents either party from being able to fulfil its obligations. The underlying principle is that when an extraordinary event or circumstance occurs which is outside a party’s control, that party will not be liable for its failure to perform all or part of its obligations. Force majeure clauses are included in contracts to achieve flexibility during challenging circumstances and are critical in the light of the limited remedies available to parties 119

Singapore Comparative Law Review under English and Singapore law. Whether a clause can be successfully invoked depends on three general considerations: (i) whether COVID-19 is an event of force majeure, (ii) whether the force majeure event caused the non-performance and (iii) whether the affected party is obliged to mitigate the effect of the relevant force majeure event.

Is COVID-19 a force majeure event?

It is typical for contracts to specify the events that would qualify as force majeure. If the list includes “pandemic”, it would likely be relevant especially given the World Health Organisation’s declaration of COVID-19’s status as a pandemic. 1 Force majeure provisions may also contemplate an “Act of God”, which has been defined as “a direct and violent and sudden and irresistible act of Nature”.2 Arguably, the outbreak can be regarded as a natural disaster, albeit on a microscopic rather than geological plane.3 Nonetheless, as discussed below, even if COVID19 can fall within these terms, the key question is one of causation: whether it was the virus per se or other factors that caused a party’s non-performance.

In contracts where the force majeure clause includes a catch-all, for example, “any other causes beyond our control” in addition to a list of non-exhaustive events, early case law have suggested that such sweeper provisions would be given their wider and natural meaning, and not limited to the categories of events surrounding it.4 Prima facie, COVID-19 and its attendant effects can potentially be captured. In Tandrin Aviation Holdings Ltd v Aero Toy Store LLC,5 the force majeure clause in a contract for the sale of an aircraft contained a list of events, including acts of God, governmental actions and inability to obtain parts, and concluded with “any other cause beyond the Seller’s reasonable control”. The defendant claimed that the 2008 financial crisis had activated the clause. The court, while acknowledging that there was no requirement to limit the clause to the foregoing categories, considered the context of the clause and held that it was telling that nothing in the specific examples was “even remotely connected with economic downturn,

World Health Organisation 12 March 2020, www.euro.who.int/en/health-topics/health-emergencies/coronaviruscovid-19/news/news/2020/3/who-announces-covid-19-outbreak-a-pandemic Nugent v Smith (1876) 1 CPD 423, 426 (Cockburn CJ) Peter de Verneuil Smith QC, Adam Kramer and William Day, ‘COVID-19: Force Majeure, Frustration and Illegality in English Law: A Detailed Guide’ <https://www.3vb.com/images/uploads/vcards/3VB_Final_Version_Force_Majeure_Frustration_and_Supervening _Illegality.pdf> accessed 2 May 2020 Chandris v Isbrandtsen-Moller Co Inc [1951] 1 KB 240 (Devlin J); Navrom v Callitsis Ship Management SA [1987] 2 Lloyd’s Rep 276 (Staughton J) [2010] 2 Lloyd’s Rep 668 1

2 3

4

5

120

Singapore Comparative Law Review market circumstances or the financing of the deal”.6 It follows that, if there is no specific event listed, the courts will look at the intentions of the parties in considering whether general language should be construed broadly rather than restricted to the peripheral words. 7 In Singapore, the courts have affirmed that the precise construction of the clause is paramount as it would define the scope and ambit of the clause. The courts would also seek to give full effect to the intention of the parties, given the principle of freedom of contract.8

Is the non-performance caused by the event?

Where COVID-19 or its direct consequences are found to constitute a force majeure event within the definition used, the next step is to establish that the event has caused the contractually stipulated effect on performance: has the affected party been “prevented”, “hindered” or “disrupted” from performing its obligations?9 Different terms require different levels of impact on performance before a party can be excused from its obligations. Where the force majeure clause requires performance to be “prevented”, the party seeking to invoke force majeure must demonstrate that performance has become physically or legally impossible. 10 This is a relatively higher burden of proof compared to clauses that are activated where performance is “hindered” or “disrupted”. Recent judicial analysis in Singapore offered further guidance on determining the meaning of “disrupted”. Holcim (Singapore) v Precise Development held that the test is one of commercial impracticability.11 Therefore, a mere increase in price of supplies of goods is unlikely to cause commercial impracticability.

Further, it must be proven that the force majeure event caused the non-performance. In Seadrill

Ghana Operations Ltd v Tullow Ghana Ltd, the defendant was unable to fulfil its obligation 12

due to a drilling moratorium and the government’s rejection of the drilling plan. Only the former was specified as a force majeure event in the contract. It was held that the force majeure clause, as drafted, required the event to be the sole effective cause of non-performance, hence the defendant was not entitled to rely on the clause. In the current context, there could be several drivers in a supplier’s non-performance such as orders requiring staff to stay home preventing 6 7 8 9 10 11 12

Ibid, 675 Thames Valley Power Ltd v Total Gas & Power Ltd [2005] EWHC 2208 (Comm) RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007] 4 SLR(R) 413 at [54] Tandrin (n 5) Tennants (Lancashire) Ltd v G S Wilson & Co Ltd [1917] AC 495 Holcim (Singapore) v Precise Development [2011] 2 SLR 106 at [63] [2018] EWHC 1640 (Comm)

121

Singapore Comparative Law Review them from travelling to work, supply cuts to raw materials, and financial losses suffered due to the economic contraction. It is unlikely that COVID-19 in and of itself will have had direct consequences on performance. If a supplier has already been facing financial difficulties before COVID-19 hit, or if the supply had been disrupted by a government order, the causal link between non-performance and the force majeure event is a tenuous one. The wording of the clause must be scrutinised to see whether, on a proper construction, a force majeure event must be the sole cause of a failure to perform.

Mitigation Under English and Singapore law, there is no implied duty to mitigate the effects of a force majeure event. However, if there is wording to the effect that the event is one that is “beyond the control of parties”, reasonable steps should have been taken to mitigate its effects, 13 otherwise, it cannot be said that the occurrence was beyond that party’s control. 14 RDC Concrete v Sato

Kogyo clarified that there would be no blanket requirement of mitigation if there is no such 15

wording. In the current context, the UK government had permitted essential construction work to continue during the lockdown, provided that health guidance on site operating procedures could be adhered to.16 A concerned party which had elected not to comply with guidance and was consequently unable to satisfy its contractual obligations would not be able to rely on a force majeure clause which imposes such duty of mitigation.

FRUSTRATION A common alternative in the absence of an operative force majeure clause is the doctrine of frustration. Frustration occurs when an unforeseen event beyond the control of parties makes performance “physically or commercially impossible”, or where the contractual obligation becomes one that is “radically different” from that at the time the contract was formed. 17 In the

13 14

Channel Islands Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323 Holcim (n 11) at [66]

RDC (n 8) UK Government Guidance, ‘Remediation and COVID-19: Building Safety update’ <https://www.gov.uk/guidance/remediation-and-covid-19-building-safety-update-27-march-2020> accessed 19 April 2020 from The doctrine of frustration arose first in Taylor v Caldwell (1863) 3 B&S 826 and applied in Glahe International Expo AG v ACS Computer Pte Ltd [1999] 2 SLR 620.

15 16

17

122

Singapore Comparative Law Review current context, the relevant frustrating events can be categorised as change in law, delays and cancellation of events.

Change in law These are unprecedented times in which new laws have been introduced in efforts to control the outbreak. In Metropolitan Water Board v Dick, Kerr & Co Ltd,18 due to wartime regulations, the contractors were made to cease work. Notwithstanding that the contract provided for a time extension in the event of delays, it was held that the provision was intended to cover only temporary difficulties, not an interruption which fundamentally altered the contract’s nature.

Thus, frustration was successfully invoked. More recently, the Singapore courts held that the Indonesian sand ban in 2017 which halted concrete supplies was “a supervening event … and not within the reasonable control” of parties, making it impossible for the contracts to be carried out.19 In the present day, legislation in the UK20 and Singapore21 have enforced safe-distancing measures by mandating certain non-essential businesses to close their premises and prohibited people from leaving their residence. This has caused numerous businesses, particularly those that are dependent on physical labour, to terminate operations. A party might be able to refer to the changed law as a frustrating event. The the difference between advisories and legal rules should also be borne in mind. For example, the Health Ministry’s advisory 22 on deferment or cancellation of large-scale events do not have legal force, unlike safe-distancing regulations (for example, those made under Singapore’s Infectious Diseases Act) which if breached will result in offences.

Delays The shipping and construction industries were amongst the worst-hit industries, reporting severe delays in the deliveries of supplies and the completion of construction projects. Provided that it 18 19

[1918] AC 119

Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd [2014] SGCA 35

England Health Protection (Coronavirus, Restrictions) Regulations 2020. It is noted that certain restrictions have been relaxed since June 2020.

Infectious Diseases Act (Cap. 137), COVID-19 (Temporary Measures) (Control Order) Regulations 2020 Singapore Ministry of Health, ‘Advisory For Large-Scale Events Amidst The Novel Coronavirus Situation’ (8 February 2020)<https://www.moh.gov.sg/docs/librariesprovider5/default-document-library/advisory-for-large-scaleevents-amidst-the-novel-coronavirus-situation-(8-feb-2020)93cc0bb1c8964f7a8a97d3202056bcdd.pdf>, accessed 19 May 2020 20

21 22

123

Singapore Comparative Law Review was “abnormal” and caused by a “new and unforeseeable event”, 23 a delay can amount to a frustrating event. In Davis Contractors v Fareham UDC, due to a shortage of labour and unfavourable weather, the building project was severely delayed.24 The fact that the contract had become unprofitable or more difficult to perform was not sufficient to frustrate the contract since performance was still possible. In The Sea Angel, it was held that a delay of three months when a vessel was detained by port authorities as security for the costs of pollution did not frustrate the contract, as the risk was foreseeable in the industry.25 The Singapore High Court notably stated that “mere incidence of expense or delay or onerousness is not sufficient” to invoke the doctrine of frustration.26

Cancellations Due to the border and travel restrictions implemented to mitigate the virus risks, events of all scales were cancelled. Herne Bay Steam Boat Company v Hutton27 concerned a contract for the hire of a boat for the purpose of watching the king conduct a naval review and spending the day cruising around the naval fleet. Although the review did not take place, it was held that the review was not the sole basis of the contract and the cruising aspect was still possible. This was distinguished from Krell v Henry28 in which it was inferred from the circumstances that the rooms were hired for the purpose of attending the coronation processions, thus frustration was found.

The coronation processions formed the foundation of the contract. Therefore, the courts would look at the parties’ contractual bargain to decide whether COVID-19, including the restrictions and their knock-on effects, would trigger the application of the doctrine.

Where a contract is frustrated, both parties are discharged from their obligations. The Frustrated Contracts Act, a similar piece of legislation in both jurisdictions, sets out the legal principles on how parties would deal with the payments made, services rendered and expenses incurred prior to discharge.29 The effect of force majeure clauses, on the other hand, offers some room for

23 24 25 26 27 28 29

Davis Contractors Ltd v Fareham UDC [1956] 1 AC 696 Ibid Edwinton Commercial Corporation & Anor v Tsavliris Russ Ltd, The Sea Angel [2007] EWCA Civ 547 Solomon Alliance Management Pte Ltd v Pang Chee Kuan [2019] 4 SLR 577 [87] [1903] 2 KB 683 [1903] 2 KB 740 Singapore Frustrated Contracts Act (Cap 115) (2014 Rev Ed); UK Law Reform (Frustrated Contracts) Act 1943

124

Singapore Comparative Law Review manoveure depending on the wording – it could be to suspend performance, extend time for performance, or terminate the contract.

SINGAPORE’S LEGISLATIVE RESPONSE TO CONTRACTUAL RELIEF The Singapore and UK parliaments have imposed legislative measures to empower the executive to contain the virus, in addition to the fiscal policies and financial assistance for affected parties.

Notably, Singapore’s COVID-19 (Temporary Measures) Act 2020 30 (the “COVID-19 Act” or the “Act”) introduces temporary relief for parties who are unable to fulfil their obligations due to a material extent to COVID-19. The measures in the Act are applicable to certain scheduled contracts entered into or renewed before 25 March 2020 for an initial 6-month period.31 The scheduled contracts32 include event- and tourism-related contracts, certain secured loan facilities, leases of non-residential immovable property and construction and supply contracts. When a notification of relief is served on the counterparty, they would be prohibited from certain actions such as commencing court proceedings, enforcing security over immovable property and movable property used for business and trade, and terminating leases of non-residential premises.33 Drawing a parallel to the UK Corporate Insolvency and Governance Bill (the “CIGB”) which introduces temporary and permanent changes to insolvency law, the CIGB includes a provision to prohibit winding-up petitions from being issued against companies unless COVID-19 has not had a “financial effect” on the debtor company, or that the relevant winding-up ground would have been satisfied regardless of COVID-19. 34 In a similar vein, Singapore’s COVID-19 Act prohibits a counterparty from taking insolvency action where non-payment is materially caused

by COVID-19. 35 There is a relatively lower threshold for Singapore businesses due to the materiality qualifier and that the party has shown that it is “unable to perform” its obligations. As these terms are not further defined in the Act, it remains to be seen how the relevant provisions

COVID-19 (Temporary Measures) Act 2020 (Act 14 of 2020) COVID-19 (Temporary Measures) (Prescribed Period) Order 2020, published in the Government Gazette on 20 April 2020 Section 5(2) and (3), COVID-19 Act The scheduled contracts need to have a Singapore nexus, in particular, (i) at least 30% should be owned by a Singaporean or permanent resident, (ii) performance is required to be in Singapore, or (iii) they should relate to Singapore properties or events. s 5(3), COVID-19 Act s 2, Schedule 10 Part 2, COVID-19 Act s 5(g) and (h), COVID-19 Act 30

31 32

33 34 35

125

Singapore Comparative Law Review would be applied by the government-appointed assessors to decide each case or whether the “physical or legal impossibility” concept can be borrowed from the doctrine of frustration. Based on its ordinary meaning, “unable to perform” suggests impossibility so it may be that the Act would not provide relief if it merely more difficult to perform because of COVID-19. However, as the spirit of the Act is to help parties achieve a fair and equitable outcome,36 it is unlikely that the strict test as in the frustration doctrine would apply.

As a new and untested piece of legislation, there are a few notable limitations of Singapore’s COVID-19 Act. Firstly, it does not affect underlying contractual obligations, so late payment charges or increased interest rates will continue to incur. The Act also does not appear to have extra-territorial reach, which means the enforcement of offshore security may not be restricted.

Finally, the Act does not expressly provide that an assessor’s decision will be publicised, which is problematic for businesses which prefer to keep disputes out of the public sphere. It is also questionable whether assessors’ decisions hold any precedential (or persuasive) value in respect of future disputes.

The governments of both Singapore and the UK recognise that there is a need, in these exceptional circumstances, to help businesses continue their operations. They have taken fairly active approaches in rolling out financial assistance, tax and temporary relief measures to reduce the impact of COVID-19, for example, through offering loan schemes to smaller businesses which have lost revenues and cash flow problems. In particular, the UK launched the Coronavirus Business Interruption Loan Scheme (“CBILS”) on 23 March 2020, offering loans of up to £5 million for smaller businesses. 37 The Singapore government also unveiled the Enterprise Financing Scheme under which small and medium enterprises (“SMEs”) may borrow up to S$5 million from permitted lenders to finance their working capital requirements. 38 As a small and open economy, Singapore’s economic growth and employment have not been insulated from the effects of COVID-19. Together with the statutory relief from legal action under the COVID-19 Act, financial stimulus in the form of budgets handed since February, Singapore businesses are presented with various options ranging from tapping on the loan Section 13(2)(b), COVID-19 Act UK Government, ‘Guidance: Apply for the Coronavirus Business Interruption Loan Scheme’ (Gov.uk, 1 May 2020) <https://www.gov.uk/guidance/apply-for-the-coronavirus-business-interruption-loan-scheme>, accessed 10 May 2020 36 37

Enterprise Singapore, ‘Enterprise Financing Scheme (EFS)’ (Enterprise Singapore, 26 March 2020) <https://www.enterprisesg.gov.sg/financial-assistance/loans-and-insurance/loans-and-insurance/enterprise-financingscheme> 38

126

Singapore Comparative Law Review schemes, using cash grants, to excusing themselves from all or part of their obligations under the Act, depending on their respective eligibilities.

CONCLUSION Singapore’s Minister of Law said in an interview, “You’re looking at economic devastation. … In such a situation, you don’t talk contract. You talk equity, you talk justice.” 39 Both Singapore and the UK governments have taken a fairly active approach in rolling out measures to reduce the impact of COVID-19 on affected businesses and individuals, to avoid litigation or insolvency proceedings. The statutory contractual relief offered under Singapore’s COVID-19 Act is an additional option in the armoury of Singapore businesses which need more “breathing space” if they are unable to perform certain contractual obligations as a result of COVID-19. The Act will have a considerable impact on the enforcement of in-scope contracts and commercial disputes, at least for as long as it applies. UK businesses, as well as Singapore businesses which do not fall within the ambit of the Act, should closely examine their force majeure provisions, if any, or explore the applicability of the frustration doctrine. It remains to be seen in the cases coming before the (virtual) court whether a more relaxed approach to the interpretation of force majeure events and frustration principles would be taken.

39

Minister for Law K Shanmugam SC, Interview with CNBC, 7 April 2020

127

Singapore Comparative Law Review

A “DIGITAL ECONOMY” Nicole Lim

INTRODUCTION The speed and extent of digitalisation have transformed the way goods, services and intangibles are traded internationally. As the Organisation for Economic Cooperation and Development (the “OECD”) aptly pointed out, “the digital economy is increasingly becoming the economy itself”.1 With the pervasive nature of digital technology, digitalised businesses are able to generate significant value from interacting with users and easily carry out activities such as data collection, marketing and branding without having a physical presence in the market. 2 The result is a perceived misalignment between where value is created and where profits are taxed. 3 This poses a challenge to the prevailing international tax framework which operates predominantly by reference to physical presence.

Before 1 January 2020, digital services procured from offshore vendors were not subject to goods and services tax (“GST”) in Singapore; GST applies only if the supplier “belongs in” Singapore. 4 The supplier is treated as belonging in Singapore if it has a Singapore fixed establishment which entails some form of physical presence, such as an office, a shop or a factory. 5 This means that in practice, digital supplies made to customers or users residing in Singapore, but made by taxable persons not established in Singapore, are not subject to GST. These rules have largely been conceived in a brick-and-mortar economy, where the supplier and consumer of goods and services are situated in the same country. With the proliferation of OECD, ‘Addressing the Tax Challenges of the Digital Economy, Action 1 - 2015 Final Report’ (OECD, 5 October 2015) <https://www.oecd.org/ctp/addressing-the-tax-challenges-of-the-digital-economy-action-1-2015-final-report9789264241046-en.htm>, accessed 10 March 2020 HM Treasury, ‘Corporate tax and the digital economy: position paper update’ (HM Treasury, 13 March 2018) <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/689240/corpor ate_tax_and_the_digital_economy_update_web.pdf>, accessed 6 March 2020 HMRC Digital Services Tax Consultation (HMRC, 7 November 2018), para 1.5, <https://www.gov.uk/government/consultations/digital-services-tax-consultation>, accessed 5 March 2020 Goods and Services Tax Act (Cap 117A) (GST Act), s 13(4)(a) Ibid, s 15(3)(a) 1

2

3

4 5

128

Singapore Comparative Law Review disruptive business models based on data, user participation and network effects 6, a fundamental question is whether, and how, the tax framework under which a state is entitled to its taxing rights should be adapted. Various tax administrations have taken steps to diversify their tax base, such as by expanding the scope of existing indirect tax legislation or by introducing a new tax regime to capture the revenues generated by businesses operating virtually. This article will discuss and compare the UK and Singapore approaches to addressing the challenges of taxing the digital economy.

THE UK’S DIGITAL SERVICES TAX The limited progress in implementing a global solution has prompted unilateral measures from several countries to safeguard their tax bases. The UK government, for example, moved forward with plans to introduce a new digital services tax (“DST”) in the 2020 Finance Bill and which came into effect on 1 April 2020.7 The DST is a 2% tax on the revenues of digital services revenues that are attributable to UK users. Online businesses carrying out in-scope digital activities will be liable to DST when the group’s worldwide revenues from such activities exceed £500 million (S$875 million), and over £25 million (S$43 million) of these revenues are derived from UK users.8 The DST is calculated on a group-wide basis and apportioned

pro rata to each group member.

9

Businesses will be liable to DST on their in-scope revenues, which can fall into three main categories: social media services, search engines and online marketplaces. 10 To take these in turn, a social media service is defined as an online platform where the main purpose is to promote user interaction and content is being generated by users and is able to be shared.11 Examples include social networking websites, forums and other content-sharing platforms. While not explicitly defined, a search engine merely used to search material within the website itself or closely related websites will not be in-scope.12 Finally, an online marketplace is defined as one

OECD, ‘Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS’ (OECD, 16 March 2018), para 35 <https://www.oecd-ilibrary.org/sites/9789264293083en/index.html?itemId=/content/publication/9789264293083-en>, accessed 10 March 2020 HM Treasury, Budget 2018, s 4.8 UK Finance Bill 2019-21, cl 45(1) Ibid, cl 46(3) Ibid, cl 43(2) Ibid, cl 43(3) Ibid, cl 43(4) 6

7 8 9

10 11 12

129

Singapore Comparative Law Review which main purpose is to facilitate the sale of goods or services offered by users, and where users are able to advertise.13

SINGAPORE GST EXTENDED Since 1 January 2020, the Singapore GST Act has been extended to imported digital services under an overseas vendor registration (“OVR”) regime.14 The OVR regime requires overseas suppliers to register, charge and account for GST if they have a global turnover of over S$1 million and makes business-to-consumer (“B2C”) supplies of digital services to Singapore customers over S$100,000.15

“Digital services” are defined in the GST Act as services supplied over the internet with “minimal or no human intervention” and are impossible without the use of information technology. 16 The Inland Revenue Authority of Singapore (“IRAS”) maintains a list of examples which includes downloadable content like phone applications, e-books and movies, subscription-based media like games, television and music, and electronic data management like cloud storage and web hosting.17 Singapore is one of many countries which have introduced or amended legislation to ensure fair taxation of digital services. There are on-going broader international discussions as part of the OECD’s base erosion and profit shifting (“BEPS”) project aimed at addressing the tax challenges from digitalisation. The first part of its work, known as Pillar One, contemplates adapting the international tax system by introducing new nexus and profit allocation rules.18 The European Commission has also been considering the taxation of the digital economy as part of its wider digital single market initiative. 19 In addition to a new Directive on digital “permanent establishment”, the Commission proposed a short-term interim solution of a 3%

13 14 15 16 17

Ibid, cl 43(5)

GST Act, s 8(1A), Seventh Sch

Ibid, First Sch, para 1A(1) Ibid, Seventh Sch, para 2(1) Ibid, Seventh Sch, para 2(1)(a); IRAS e-Tax Guide, ‘GST: Taxing imported services by way of an overseas vendor

registration regime’ (20 February 2018), Annex A OECD, ‘Programme of Work to Develop a Consensus Solution to the Tax Challenges Arising from the Digitalisation of the Economy’ (OECD, 2019), <www.oecd.org/tax/beps/programme-of-work-to-developaconsensus-solution-to-the-tax-challenges-arising-from-the-digitalisation-of-the-economy.htm>, accessed 10 March 2020 European Commission, ‘A Fair and Efficient Tax System in the European Union for the Digital Single Market’ COM(2017) 547 final 18

19

130

Singapore Comparative Law Review tax on revenues derived from online advertising services, online marketplaces, and sales of user collected data.20 However, discussions reached a deadlock after meeting with opposition from several member states.

COMPARING THE UK AND SINGAPOREAN APPROACHES Singapore does not currently levy a direct tax on the digital economy. Instead, Singapore’s approach to addressing the tax issues of digitalisation has been to extend the ambit of a preexisting domestic tax regime originally applicable to only local suppliers, to foreign suppliers.

The objective is to achieve parity in GST treatment for both domestic and overseas services consumed in Singapore.21 Similarly, the UK, through the implementation of the EU’s Value Added Tax (“VAT”) rules, levies VAT on B2C electronically supplied services from both EU and non-EU states. 22 Electronically supplied services would be treated as being supplied at the customer’s home jurisdiction if the supplier’s total cross-border supplies of B2C electronically supplied services within the EU exceed £8,818 (S$15,000) in the year in which the supply was made. 23 The revised rules indicate a trend towards the destination principle (which focuses on where consumers are located) as opposed to the origin principle (which focuses on where the supplier is located), and was affirmed by the OECD in the context of taxation of services and intangibles. 24 In this respect, the nature of the DST is similar to that of GST/VAT in that the former is levied on the revenues in the jurisdiction of consumption and thus is also based upon the destination principle.

The definition of “digital services” in the Singapore GST Act is not dissimilar to that in the UK place of supply rules for VAT purposes. Under the UK’s VAT rules, electronically supplied services are defined as services delivered over the internet or an electronic network, where there is minimal or no human intervention and which are impossible to ensure without information technology.25 In particular, both definitions envisage that human intervention should be negligible.

Interestingly, distance learning such as virtual classrooms is a VAT taxable supply (with a carveEuropean Commission, ‘Proposal for a Council Directive on the common system of a digital services tax on revenues resulting from the provision of certain digital services’ COM(2018) 148 final IRAS e-Tax Guide (n 17), 4 Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax OJ L 347, art 58; Value Added Tax Act 1994 (VATA 1994), Sch 4A, pt 3, para 15 VATA 1994, Sch 4A, pt 3, para 15(1)-(3) OECD, ‘Addressing the Tax Challenges of the Digital Economy, Action 1: Final Report’ 126-129 Council Implementing Regulation (EU) No 282/2011 of 15 March 2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax (recast), art 7; VATA 1994, Sch 4A 20

21 22

23 24 25

131

Singapore Comparative Law Review out for instances where the electronic network is used as a tool for tutor-tutee communication)26 whereas this is not explicitly listed in the GST Act nor IRAS guidance. Another example of a service which is supplied over electronic means but ultimately provided by persons is subscription-based live stream sites where viewers can interact with the host and amongst themselves. Absent express legislative or tax authority guidance, it is unclear whether these fall within the ambit of “digital services” for Singapore GST purposes or “electronically supplied services” for UK VAT purposes.

Similar to the OVR in Singapore, overseas vendors providing B2C electronic supplies to EU customers can account for VAT using a simplified registration system by way of the Mini OneStop Shop (“MOSS”) scheme which permits suppliers to account for VAT in a single EU country for all their EU-based B2C supplies.27 At the end of the post-Brexit transition period, however, affected UK suppliers will need to either register for VAT in every EU member state where their consumers are located or register under the non-union scheme to benefit from MOSS. The DST is a separate tax regime relating to the VAT-exclusive revenues derived from UK users.

Businesses will be subject to the DST in addition to their existing UK tax liabilities on profits arising from the same digital activities. The scope of the DST is very broad, affecting numerous businesses with an online dimension. UK presence is also not a defining criterion for the DST to be applicable since it applies to revenues linked to UK users.28

CRITICISMS OF DST Singapore should strongly resist introducing a direct tax on digital services such as a DST, given the problems associated with the design and administration of DSTs in general. First of all, a DST is structured as a revenue tax, which means there could be high effective tax rates for businesses with low marginal profits. Over the years, Singapore has established itself as a hub for digital innovation and offer multinational companies a robust infrastructure to grow their businesses in Singapore. In the first half of 2019, Singapore accounted for 25% of roughly US$5.99 billion in capital invested in Southeast Asian tech firms.29 The burden of a DST could

EU VAT Directive, art 7(3)(j); VATA 1994, Sch 4A, Pt 2, para 9(3)(f) EU VAT Directive, arts 357–369k; VATA 1994, Sch 3B, Sch 3BA UK Finance Bill 2019-21, cl 44(3) Cento Ventures, ‘South East Asia Tech Investment report’ <https://www.cento.vc/southeast-asia-tech-investmenth1-2019/>, accessed 11 March 2020 26 27 28 29

132

Singapore Comparative Law Review potentially inhibit competitive growth of start-ups and will discourage investment into a fastgrowing industry.

Secondly, it is difficult to ring-fence the digital economy from the whole economy for tax purposes. The main justification for taxing profits in the jurisdiction where consumers are located is that most of the digitalised businesses’ value is created by users. This is based on the assumption that users can create value, for example, through posting content on social media platforms, trading goods on marketplaces and sharing their preferences online and thereby contributing towards the data collected and monetised for targeted marketing. 30 The user base directly drives increases in utility and, thus, creates economic value for the digital businesses. 31 Following this reasoning, users create a significant part of the business’ value, thereby justifying their state of residence to tax a non-resident that is digitally present. Arguably, however, it is the businesses which create value through developing their business models, engaging their user base through content contributions and collecting data. Furthermore, user-generated content and data are equivalent to sourcing inputs from independent third parties, and under normal taxation principles should not be seen as value-creating.32 The justification for the country of residence of users to tax a non-resident, and merely being digitally present, business thus remains elusive.

Another concern echoed by tax practitioners and policy groups involves the risk of double taxation in respect of businesses that already pay UK corporation tax and which now will be subject to the DST on revenues generated from the same digital activities. 33 While the DST is tax-deductible as a business expense, it will not be creditable against corporation tax.34 Double taxation can also arise if the unilateral measures adopted by other jurisdictions result in different conceptions of DSTs or profit allocation rules. While HMRC have expressed that the DST is not covered by double tax treaties which would otherwise prohibit the UK from charging DST where a non-UK treaty partner is subject to the UK DST,35 the UK’s treaty partners may not share the same view.

European Commission, ‘Proposal for a Council Directive laying down rules relating to the corporate taxation of a significant digital presence’ COM (2018) 147 final OECD Interim Report (n 6), paras 41-42 Ibid, [39]; Murray Clayson, ‘Tax reform in the digital economy: recent OECD and EC activity’ (Tax Journal, 2018), Issue 1393, 9 at 10 The Chartered Institute of Taxation, Response to the Digital services tax: consultation (CIoT, 2019), <https://www.tax.org.uk/sites/default/files/190905%20Digital%20Services%20Tax%20-%20Draft%20Finance%20Bi ll%20-%20CIOT%20comments.pdf.>, accessed 10 March 2020 HMRC internal manual DST47100, ‘UK CT Deductibility of DST’, paras 1.18 and 8.6 HMRC Consultation (n 3), paras 10.12-10.18 30

31 32

33

34 35

133

Singapore Comparative Law Review Above all, Singapore should be cautious of introducing an uncoordinated unilateral measure to avoid the risk of putting a strain on trade relations. When France proposed a DST, it was met with vehement opposition from the Office of the United States Trade Representative, which, pursuant to investigations into the structure and operation of the French DST, had concluded that the French DST was discriminatory and would burden US commerce. 36 Given Singapore’s highly trade-dependent nature (being the 14th largest export and 15th largest importer globally)37, it relies heavily on its trade partners for economic growth and business stability. Hence, Singapore should steer clear of risking trade disputes. A wiser option would be to transition to destinationbased taxation in a coordinated, multilateral approach, one that coherently allocates some taxing rights to the destination country the right to tax routine returns to countries where economic activity takes place and the right to tax any residual profit to the destination country.38

CONCLUSION The digital era has seen an accelerated growth of highly digitalised businesses in many different sectors such as short-term accommodation, social networking and peer-to-peer e-commerce.

This has prompted numerous tax administrations to reconsider long-established international tax rules formulated on the assumption that the operator and supplies take place where the operator is established. Coupled with lockdown measures imposed by governments worldwide to counter the effects of COVID-19, people are spending a considerable portion of their time within the confines of their homes, which has contributed to an upward trend of people shifting online for telecommuting, entertainment and and partaking in the burgeoning gig economy. 39 It is now more relevant than ever for tax administrations, some of which have extended time for tax payments in the light of COVID-19, to consider the significance of a new DST or to expand the ambits of their indirect tax regimes to capture electronically supplied services. Singapore and the UK have adapted their domestic tax regimes and a patchwork of varying unilateral measures have been taken across the globe, including DSTs and new nexus rules like the “significant Office of the United States Trade Representative, ‘Initiation of a Section 301 Investigation of France’s Digital Services Tax’ (USTR, 10 July 2019), <https://ustr.gov/about-us/policy-offices/press-office/pressreleases/2019/july/ustr-announces-initiation-section-301>, accessed 10 March 2020; ‘Report on France's Digital Services Tax’ (USTR, 2 December 2019) <https://ustr.gov/sites/default/files/Report_On_France%27s_Digital_Services_Tax.pdf>, accessed 10 March 2020 ASEAN Singapore Briefing. Retrieved 10 March 2020 from https://www.aseanbriefing.com/regions/singapore M Devereux and J Vella, Implications of Digitalisation for International Corporation Tax Reform Working Paper 17/07, (Oxford University Centre for Business Taxation, July 2017).

Y Xiao and Z Fan, ‘Ten technology trends to watch in the COVID-19 pandemic’ (WEF, 27 April 2020) <https://www.weforum.org/agenda/2020/04/10-technology-trends-coronavirus-covid19-pandemic-roboticstelehealth/>, accessed 2 May 2020 36

37 38

39

134

Singapore Comparative Law Review economic presence” test in Israel and India. Unilateral and inconsistent actions raise concerns regarding the risk of double taxation, increased compliance burden and adverse economic impacts. It is hoped that a comprehensive multilateral approach to the taxation of the digital economy is not too distant a possibility.

135

Singapore Comparative Law Review

RULE OF LAW AND EXECUTIVE EXEMPTION FROM THE PERSONAL DATA PROTECTION ACT (PDPA) 2012 Jenn Zhou XiaoJian

INTRODUCTION In a Parliamentary Sitting on 12 February 2019, Ms Sylvia Lim MP asked if “ there is a convincing

reason to exclude public agencies from the Personal Data Protection Act (PDPA) 2012”. The renewed debate around the justifiability of public agencies’ exemption from the 2012 Act was a consequent of the series of severe data breaches that rocked the country.

The personal data of over 14,000 HIV-positive individuals in the national database were leaked online1. Just less than a year before in July 2018, the personal data of 1.5 million SingHealth patients, including that of Prime Minister Lee Hsien Loong, were also compromised. The Report by the Committee of Inquiry revealed the lack of basic security measures and inadequately trained staff.2 The PDPA aims to safeguard individuals' personal data against misuse by regulating the proper management of personal data. Section 4(1) establishes that the PDPA governs the collection, use and disclosure of personal data by private organisations, but not that of public agencies or any organisations in the course of acting on behalf of a public agency.

While the incidents cast doubt on why governmental agencies are not held to the same standard of data management in the PDPA as private players, I seek to explore, more fundamentally, whether broad exemption of the executive from an ordinary law is in accordance with rule of law

CNN, ‘HIV status of over 14,000 people leaked online, Singapore authorities say’, 29 January 2019 <https://edition.cnn.com/2019/01/28/health/hiv-status-data-leak-singapore-intl/index.html > The Straits Times, ‘Probe report on SingHealth data breach points to basic failings’, 10 January 2019 <https://www.straitstimes.com/singapore/probe-report-on-singhealth-data-breach-points-to-basic-failings> 1

2

136

Singapore Comparative Law Review – a key tenet of the Singapore legal fabric. This will be done through analysing the ‘thin’ or formal conception of rule of law most famously propounded by Raz and Dicey, and applying them to the present context of data protection in Singapore.

It is worth noting that discussing the ‘thick’ or substantive conception of rule of law will be beyond the remit of this essay. The substantive form of rule of law is, in my view, rightly criticized to be overly dependent on or even made redundant by its supporting rights-based theory of law and adjudication3. The background theory subscribed to and applicable in Singapore may differ, in kind and in weight, from that in the United Kingdom or the West. It is not my intention to lend added weight to any particular theory cloaked by the substantive form of rule of law. While there are substantive values (i.e. moral autonomy and respect for the individual) embedded even in the formal precepts of rule of law4, these basic values are widely recognised and upheld in Singapore.

RULE OF LAW ACCORDING TO JOSEPH RAZ Raz adopts a formal approach to rule of law and recognises its negative value of minimizing the dangers created by the law itself. Crucially, he requires the law to be administered in ways that are capable of guiding the behaviour of its subjects so that they can plan their lives to avoid punishment. To achieve this, laws should be, inter alia, open, clear, relatively stable and prospective (rather than retrospective). He recognises that every legal system consists of both general, open and stable rules and particular laws – rule of law only demands that the making of particular laws should be guided by the former. He even goes as far as claiming that it is “humanly inconceivable that law can consist only of general rules and it is very undesirable that it should” 5.

On this account, little is needed to justify that the exemption of public agencies in the PDPA is consistent with the Razian conception of rule of law. The 2012 Act, supposedly a particular law, is passed under the proper legislative procedures in Parliament. The Act is also made publicly available online, unambiguous (for the present purpose), prospective and relatively stable. Its provisions enable both private and public players to plan their lives accordingly. This is the orthodox account used to justify the legality of the PDPA, despite its glaring omission that it does not apply to public agencies.

3 4 5

T.R.S. Allan, Legislative Supremacy and the Rule of Law, Cambridge Law Journal (1985) T.R.S. Allan, Law, Liberty and Justice, The Legal Foundations of British Constitutionalism (1993) J. Raz, The Rule of Law and Its Virtue, (1977) 93 LQR 195, 197

137

Singapore Comparative Law Review However, it is doubtful whether Raz envisioned a particular law applicable to all private companies but not the executive government. It is more likely that he was thinking of particular laws applicable to specific public agencies to endow them with statutory rights, subject to the general rules of recognition6. The principle of generality that every man should be subject to the ordinary law of the land is better dealt with by other academics, as will be shown later.

Raz’s view has also been criticised for neglecting the important role of judicial interpretation in practice. In extreme cases deemed necessary, English courts have adopted the interpretation of legislation which linguistically may appear strained, such as through reading down express language or reading in words into the legislation7. Naturally evolving judge-made laws also run the risk of retrospective application of laws8. The inability of laymen to accurately predict the legal consequence of their actions thus posits a direct challenge to the Razian rule of law.

However, this criticism becomes arguably weaker in the context of Singapore, where the courts adopt a more purposive approach in judicial interpretation as enshrined in s 9A of the Interpretation Act9 (assuming that the wordings of the legislations are generally faithful to the will of the Parliament). Singapore courts prize the ‘co-equality’ of the three branches and when it comes to law-making, they respect parliamentary sovereignty as backed by electoral mandate10.

As such, clear and legally passed legislations that exempt the executive, such as the PDPA, constitutes no infraction to Raz’s conception of rule of law.

RULE OF LAW ACCORDING TO A.V. DICEY One of the central pillars of rule of law is that the law applies to all actors, including private players as well as the executive (in its broadest sense). This seems to be a more formidable attack launched against the PDPA exemption. This principle of generality is widely accepted (when qualified) and clearly outlined in the second aspect of Dicey’s conception of rule of law: “every man whatever be his rank or condition, is subject to the ordinary law of the realm and amenable

n 6, 199-200 E.g. R v. A (No 2) [2002] 1 AC 45, Ghaidan v. Godin-Mendoza [2004] UKHL 30 E.g. R v R [1991] UKHL 12 Section 9A of the Interpretations Act states that “an interpretation that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to an interpretation that would not promote that purpose or object”.

E.g. Tan Seet Eng v. Attorney General [2015] SGCA 59, Teo Soh Lung v. Minister for Home Affairs [1990] 1 S.L.R. (R.) 461 (H.C.) 6 7 8 9

10

138

Singapore Comparative Law Review to the jurisdiction of the ordinary tribunals”. In essence, he believes that rule of law requires legal equality or the universal subjection of all classes to one law administered by the ordinary Courts.11 There is little contention that it is naïve to think that the same law should apply to everyone.

Different legal actors, depending on their power, authority, the scope of activity and functions, have to be recognised and governed by the law differently. For instance, officials often need to be granted additional statutory powers in order to carry out their duties, and correspondingly more restrictions should be imposed to hold them accountable. However, at the same time, the application of the law should not unjustifiably favour any category of actors, not least those who make and/or enforce the law itself.

The central idea of Dicey’s theory is that wide discretionary (and thus arbitrary) authority exercised by the executive is undesirable and antithetical to rule of law. It may appear that in allowing ordinary laws like the PDPA to constrain private organisations but not the executive, the latter is favoured and would be afforded unlimited discretion in the area of data management.

However, this is far from the truth. Public officials have to comply with the Government Instruction Manual Policy on Data Management (IM8 PDM) 12 and Division 2 of the Public Sector (Governance) Act (PSGA) 2018 governing data sharing within the public sector.

According to Minister for Communications and Information S. Iswaran, “collectively, these provide comparable, if not higher, standards of data protection compared to the PDPA” 13. This is backed by the findings of the Public Sector Data Security Review convened after the data breach incidents. While such claims are subject to empirical scrutiny, it would be sound in principle if the facts are accurate.

FURTHER DEVELOPING THE PRINCIPLE OF GENERALITY The principle of generality espoused by Dicey and the spirit behind it are nonetheless echoed by various jurists with force. Hayek argued that general laws – the ones that legislators cannot know the particular cases to which it will apply – should apply to everyone, especially those who make and enforce it. However, as previously established, it would be foolish to think that this is A. C. Dicey, An Introduction to the Study of the Law of the Constitution (1885) The IM8 PDM is given legal force by Finance Circular Minute No. M3/2018 dated 29 March 2018 titled ‘Public Sector (Governance) Act 2018 – Ministerial direction for compliance with Government Instruction Manual (IMs), Circulars, And Circular Minutes’, [6] ‘Ministry of Communications and Information's (MCI) response to parliamentary questions on public agencies' exemption from PDPA’, 12 February 2019 <https://www.mci.gov.sg/pressroom/news-andstories/pressroom/2019/2/mcis-response-to-pq-on-public-agencies-exemption-from-pdpa?page=21> 11 12

13

139

Singapore Comparative Law Review an unqualified blanket principle. A natural question then follows: in what circumstances should the principle of generality apply, and in what circumstances should it not? The answer simply lies in the presence of sufficient difference between classes of legal actors necessary to justify different treatments. Hayek caveated his argument by allowing general laws to pick out particular classes of application if the distinction made is equally justifiable to those within and without the classes to which they apply.14 In the same vein, Rawls and Hart are both of the view that like cases

should be treated alike.

Paul Powder gave a comprehensive account of how this might work 15. He believes that the rules under which officials exercise coercion or officials' use of discretion under those rules should not make irrelevant distinctions between subjects of law; a distinction is irrelevant if it is not justifiable by public reasons. The relevance criterion is important since equality demands the law to not treat cases and individuals differently on the basis of any irrelevant personal properties. Public reasons – reasons that could reasonably expect to count as reasons for others – must be offered; this is part of expressing respect for people as agents to whom justification is owed for what is done to them.

Is there a relevant distinction between private organizations and public agencies for the purpose of the PDPA? Are there public reasons to justify the distinction drawn? I am inclined to say yes.

Minister Iswaran put this very well:

“Public agencies are not governed by the Personal Data Protection Act (PDPA) because there are fundamental differences in how the public sector operates compared to the private sector. While personal data is managed as a common resource within the public sector to enable a whole-of-government approach to deliver public services, the considerations are different in the private sector, where there is no such expectation of a holistic approach to the delivery of commercial services across organizations.”16 Furthermore, the Government has explained why the provisions in the PDPA may not be appropriate for the public sectors. For instance, financial penalties that may be incurred from the

Friedrich Hayek, The Constitution of Liberty (1960), 124 Paul Powder, The Rule of Law and Equality, Law and Philosophy (2013). N.B. While Powder meant to apply the principle of generality to non-officials in order to achieve horizontal equality, I see no reason why it should not be applied between officials and non-officials.

The Straits Times, ‘Parliament: Public agencies not governed by PDPA because of fundamental differences in how they operate’, 1 April 2019 < https://www.straitstimes.com/politics/parliament-public-agencies-not-governed-bypdpa-because-of-fundamental-differences-in-how> 14 15

16

140

Singapore Comparative Law Review PDPA will have to be borne by the “same public purse” used to perform the functions of the agency. More importantly, victims of a data breach are also not without remedy. They can lodge complaints with the Personal Data Protection Commission or the Government Technology Agency, and individual officials can still be held criminally liable under the PSGA if they are found to have dealt with public data in an unauthorised manner.

RULE OF LAW’S COMPROMISE It has been shown that the executive exemption to the PDPA did not make extensive inroads to the formalist conception of rule of law. This is, however, contingent on the truth that IM8 PDM and PSGA are no less stringent than the PDPA, and that there are relevant differences between private and public organizations to warrant distinct legal treatments of their data management.

Even if the credibility of these claims is called into question (since they are given by the executive itself) and rule of law in Singapore has been somewhat undermined, the exemption could still be justified.

Raz, in propounding his theory, highlighted that it would be a fallacy to assume the overriding importance of the rule of law. He argued that it is merely one of the virtues which a legal system may possess and by which it is to be judged. Most importantly, it may well have to be sacrificed in order to attain other (more) desired ends such as justice, if the attainment of which is impossible while adhering to the formal precepts mandated by rule of law17.

The need to do so is higher now than ever and especially in a relatively more interventionist society like Singapore. The Government is under the pressure to intervene in order to ameliorate problems flowing from disruptive forces, and asymmetrical balance of power between private actors and consumers. The PDPA is intended to fetter corporates’ ability to manipulate and abuse the personal data of individuals, who often lack the resource and power to protect themselves. This is evident from the other PDPA exemption: private individuals.

As Unger has suggested, the increased premium we place on “substantive as opposed to formal justice” meant that “we might wish to have more particular rules which differentiate between groups to a greater degree”. The generality of law (and rule of law) may thus be undermined, and

17

n 6, 196, 210-211

141

Singapore Comparative Law Review justifiably so, because “the complex problems which have to be dealt with often render the formulation of general rules impossible”.18 Treating the doctrine of rule of law not as the be-all and end-all, but rather the means to the end of substantive justice and that which can be sacrificed to achieve that end is precisely the position that Singapore takes. Minister of Law K Shanmugam made this clear when he propounded that: “We were determined to avoid such an outcome, where the forms of the Rule of

Law were observed but the ultimate goal of advancing the general welfare was sacrificed. The Rule of Law must deliver good governance. It should provide a framework and architecture that actively improves the life of Singaporeans.” 19 When addressing the rule of law in Singapore, the nation’s founding father Mr Lee Kuan Yew likewise made the powerful statements that: “The acid test of any legal system is not the greatness or the grandeur of its ideal

concepts, but whether in fact it is able to produce order and justice in the relationships between man and man and between man and the State” and “If the forms are not adapted and principles not adjusted to meet our own circumstances but blindly applied, it may be to our undoing” .

20

What is most important to the leaders of Singapore is the instrumental value (or the lack thereof) of rule of law, and that is a no less defensible position to take.

CONCLUSION The exemption of public agencies in the PDPA presents less challenge to the ‘thin’ rule of law than it appears to. It is clear, open, prospective and passed under the proper legislative process.

The only formal precept it prima facie violates is the principle of generality. However, striving for absolute generality in law, without qualification, is an untenable position. Non-general laws applicable to specific classes of individuals are permissible if public reasons can be given to justify a relevant distinction between the classes of individuals. There are significant differences between private and public organisations for the purpose of the PDPA, and public agencies are far from

Roberto Unger, Law in Modern Society (1976) Singapore Journal of Legal Studies, K Shanmugam, ‘The Rule of Law in Singapore’, 360 <https://law.nus.edu.sg/sjls/articles/SJLS-Dec-12-357.pdf> Lee Kuan Yew, Speech at the University of Singapore Law Society Annual Dinner, 18 January 1962 18 19

20

142

Singapore Comparative Law Review above the law when it comes to managing personal data. Finally, we should avoid exaggerating the supremacy of rule of law (and specifically, the generality requirement) over other equally important social outcomes a legal system should pursue.

143

Singapore Comparative Law Review

CASE NOTES

144

Singapore Comparative Law Review

WARNER MUSIC UK LTD AND OTHERS V TUNEIN INC1 Carol Yin

INTRODUCTION In copyright law, communication to the public encompasses the electronic transmission of a protected work to an indeterminate number of potential recipients or a fairly large number of third parties2 with full knowledge of the consequences. Assessment of whether the defendant’s action constituted a communication to the public is often an individualised and case-specific assessment3. Under s 20 of Copyright, Designs and Patents Act 1988 (‘CDPA 1988’), this would amount to an infringement if it was done without the licence of the copyright owner.

Warner Music UK Ltd and Others v TuneIn Inc involved a communication to the new public 4

through the internet by the defendant TuneIn for a profit-making purpose. The claimants, Warner Music UK, brought an action for copyright infringement of the sound recordings streamed via the TuneIn services. The court’s interpretation of “communication” and “targeting” evaluates the rights of copyright owners and the freedom of information, providing significant guidance for communication to the public in Singapore’s copyright law.

FACTS The claimants held exclusive licences to copyright in sound recordings of music. The defendant operated an online platform that provided access to internet radio stations globally 5. TuneIn provides its users with hyperlinks to radio streams that are freely available on the Internet as well as the tools to search, browse, and playback these audio contents. Instead of being directed to the respective radio station’s website, users on the TuneIn app or website would stream within

1 2 3

[2019] EWHC 2923

CJEU C-325/14 SBS Belgium NV/SABAM, at [21] Paramount Home Entertainment International Ltd v British Sky Broadcasting Ltd [2013] EWHC 3479, at [30]-

[54] [2019] EWHC 2923 Ibid, [1]-[4] 4 5

145

Singapore Comparative Law Review the TuneIn platform that contained advertisements put up by the defendant. Through these services, TuneIn capitalised on its technological innovation and benefited from the advertisements and subscription income, though the music providers did not6. The claimants sought payment from TuneIn for connecting users to radio stations that broadcasted their music 7.

ISSUES The claimants alleged that TuneIn was more than a mere internet intermediary as it had in effect communicated their copyrighted works to the public in contravention of s 20 of the CDPA 1988.

However, the defendant argued that the service only provided a directory or search function that linked users to websites containing the relevant content, which were already made freely available on the internet. To assess the potential infringement of the territorial intellectual property rights

by TuneIn, Mr Justice Birss first considered whether the service provided by TuneIn on the internet engaged English law. This was followed by an examination of the potential targeted visitors by the radio stations8.

The court examined four sample categories of works, as well as the integrated recording function made available to users to determine whether there was a communication to the public. The four categories of works identified were—(1) Stations licensed in the UK; (2) Stations licensed for a territory other than the UK; (3) Stations not licensed in the UK or elsewhere; (4) Premium stations created exclusively for TuneIn9.

JUDGMENT AND ANALYSIS Targeting

It is critical to first determine the applicability of English law on TuneIn’s service. The internet is international, while intellectual property rights are territorial 10 . In order to enforce UK copyright law, it must be established that the service targets the UK. Targeting in copyright law involves an intention by the claimant to have provided the content for the UK audience to access.

6 7 8 9 10

Ibid, [6]-[8] Ibid, [9]-[11] Ibid, [35]-[40] Ibid, [120]-[172] Ibid, [12]

146

Singapore Comparative Law Review This is distinguished from the fact that the public in the UK can and do access the service 11. Even if all internet users have free access to the online contents to a particular site, the content provider may not have intended to deliver the content to everyone in the world accessing that content. For UK law to apply, granting access to a UK audience would not suffice as targeting and would not be an infringement. Instead, there must be evidence that the defendant has provided their service with a specific intent for the content to be used by a UK audience. As such, an internet radio station that targets UK users will require a licence under the claimant’s copyright, regardless of the physical location of its business premise12. Concurrently, if the radio station does not target the UK, then the UK copyright law will not be engaged and a licence is not required.

After assessing the oral and visual advertisements, the language used by the service provided, the categorisation of local radio stations by reference to towns and cities within the UK as well as the language and currency in which premium services were offered 13, the court reasoned that the mere existence of a website and its accessibility by the domestic users were insufficient to establish targeting14. Instead, an objective test was conducted15 to evaluate whether, in light of the language and currency used by the service, the public16 would reasonably assume that they were targeted by the radio stations. On the facts, it was held that TuneIn had targeted the UK public. TuneIn’s subjective intention is also a relevant consideration for the court to establish targeting towards the UK audience17. Birss J concluded that for all relevant purposes, the service challenged by the claimants was targeted at the UK.

The Four Sample Categories of Works

Communication to the public requires an action of communication which makes the content available such that users could access it whenever and wherever they want 18. The public needs to be a fairly large indeterminate number of people. For such communication to be an infringement of the copyright work, there must either be a new public 19 or the communication was made through a new technical means20. Even if no one selects the link or goes to look at or listens to 11 12 13 14 15 16 17 18 19 20

Ibid, [13] Ibid, [14] Ibid, [19]-[33] Kitchin LJ in Merck v Merck [2017] EWCA 1834, at [168] Argos v Argos [2018] EWCA Civ 2211, at [51] Warner, at [16] Ibid, [16]-[17] Case C-306/05 SGAE, at [43] Ibid, [42]; C-403/08 FAPL, at [194]–[196] C-607/11 ITV Broadcasting Ltd v TVCatchup Ltd at [24]–[26]

147

Singapore Comparative Law Review the particular work, providing a link to the work makes it available and is capable of communication to the public.21 To establish a new communication to the public, one must distinguish whether the copyrightprotected work has been placed on the internet with or without the consent of the relevant rights holder. If the initial posting of the work was done with consent, it is an initial act of communication to the public. If the initial posting was made without consent, it would be an infringement of the author’s copyright work. Subsequent publication of the work may be an infringement if the audience involved a new public, which was not intended for during the initial authorised posting. However, the scope of the consented audience must be identified and interpreted broadly 22. In order for TuneIn to be charged with infringement, the second act of communication to the public through the internet must be targeted beyond the approved audience. Taking the initial public into account, the court then proceeded to analyse the four sample categories of works respectively for infringement of copyright law.

For category 1 (Radio stations licensed in the UK), the provision of hyperlinks to UK users was not an infringement23. Despite being an act of communication to the public, there was no new public24. As such, the territorial element was not in breach.

For category 2 (Radio stations not licensed in the UK or elsewhere), when the initial communication was not made with consent, the knowledge of the person posting the link was material. This is especially so, where in TuneIn’s position, a financial gain would give rise to the presumption that there was a requisite knowledge that there was act of communication 25. TuneIn infringed the copyright work when it posted the links with an actual or presumed knowledge that the work was published on the internet without permission26.

For category 3 (Radio stations which are licensed for a territory other than the UK), there was already an act of communication to the public prior to TuneIn’s intervention 27. However, the public to whom TuneIn’s act of communication was addressed in the second act of communication could not be said to have been taken as the targeted public in the first act of communication and thus it constituted an infringement.

21 22 23 24 25 26 27

C-160/15 GS Media, at [30]-[35] ITV at [20] s20 of the CDPA 1988

Warner, at [164]-[170] GS Media, at [52]-[57] Warner, at [143]-[158] Ibid, [132]-[140]

148

Singapore Comparative Law Review Finally, the fourth category (Premium stations created for TuneIn), consisting of content made available exclusively for TuneIn's subscribers that are based in the USA, are not licensed for the UK at all and do not pay the statutory US licence fee28. Since there is no prior act communication, such provision amounts to an act of communication to the public. This would be an infringement as the communication is targeted at the UK but not licensed.

Recording Function provided by TuneIn

The recording feature was held to constitute a further infringement for the output of stations in all four categories, including category 1. This is because recording and downloading were not permitted under the original licence for radio stations under category 1 29. Individual users of the app who had made use of this feature would be liable for infringement under s 17 of the CDPA 1988, with some exceptions provided by s 2030. At the same time, TuneIn would be liable for authorising such infringements as a joint tortfeasor. It was also held that TuneIn could not rely on the defence under Directive 2001/28/EC due to its intention to gain financially and knowledge of such infringement31.

IMPACT The judgement was welcomed by Warner and Sony Music as a major decision that victoriously combated blatant copyright infringement in the UK. It recognised the justification for copyright law to compensate copyright owners for creating the original works. Moreover, it redressed the unfair competitive advantage enjoyed by TuneIn32 as compared to the other licenced webcasters that honour their legal obligations imposed by UK copyright law. It is also a significant decision that brought some clarity to this complex area of the law. By setting guidelines, it becomes clear that even where a website does not transmit or store music, it will still need to be licensed, unless the rights holder has already consented to the communication 33.

In Singapore, infringement through communication to the public was first introduced as part of the 2004 amendments to the Copyright Act 1987. While a considerable amount of uncertainty continues to persist over the defined scope of such right, especially in the sphere of electronic

28 29 30 31 32 33

Ibid, [161]-[163] Ibid, [172]-[178] Ibid, [179]-[185] Ibid, [192]-[198] Ibid, [129] Ibid, [132]-[137]

149

Singapore Comparative Law Review and digital transmissions34, this decision will also contribute significantly to Singapore’s copyright law. Unlike the other jurisdictions, Singaporean law contained no additional exclusive distribution right (like in the US) or communication right (like in the EU) until 2004. This means that prior to the amendments in 2004, Singapore’s territorial copyrights offered limited protection by solely relying on the bundle of traditional exclusive copyright rights, namely, to reproduce the work in a material form, to publish the work if the work is unpublished, to perform the work in public, to make an adaptation of the works and to control the dissemination of their works35. For subject matters that could be broadcasted, such as sound recordings and films, the copyright owner could only rely on reproduction rights, publication rights, and broadcasting rights to control dissemination. In comparison to the rights granted under s 20 of the CDPA 1988, the rights in Singapore used to be very restricted to provide sufficient control and protection for copyright owners.

Since Singapore’s development on this area is considerably sparse given the more recent implementation in 2004, this decision is particularly helpful to define the scope of right in electronic transmissions, particularly via the internet. Identification of an infringement of copyright law through a communication to the new public remains fact-specific. It involves an analysis of the time when the communication was made through digital transmission, the parties involved in the act, and the geographical location where the communication took place 36. The direction of the English courts in the present case could assist authors on these factors by first identifying the scope of their consent and the presence of a new public in the act of communication. Rather than attempting to locate the client and the server during the transmission, which often moves from place to place 37 , this case affirmed that the public’s perspective should be emphasised. This means that besides the intention of the transmitter or the communicator, the public’s objective view whether they were targeted is the more determinative factor. From this perspective, it would likely untangle some of the complexity in Singapore’s copyright law following the rapid developments in the mobile and digital communication industry.

34 35 36 37

Susanna H S Leong and Yuanyuan Chen, 'The Right of Communication in Singapore' (2010) 22 SAcLJ 602, P602

Ibid, 603 Ibid, 604 Ibid, 630

150

Singapore Comparative Law Review

REVERSE VEIL PIERCING: JHAVERI DARSAN

JITENDRA V SALGAOCAR ANIL VASSUDEVA1 Ryan Chua

INTRODUCTION It is well-established in both statute and common law that registered companies, by virtue of incorporation, will be treated as separate legal persons from their shareholders. The principles of separate legal personality underpinning the corporate veil were under full examination by the House of Lords in Salomon v Salomon & Co Ltd,2 where Lord Halsbury LC stated that the company is “like any other independent person with its rights and liabilities appropriate to itself”. 3 Nonetheless, recent UK Supreme Court decisions such as Prest v Petrodel Resources4 (“Prest”) establish that the corporate veil can be pierced in limited circumstances relating to evasion of pre-existing legal obligations.

Veil piercing typically applies to enable third parties to hold shareholders liable for corporate activities. However, the recent Singapore decision in Jhaveri Darsan Jitendra v Salgaocar Anil

Vassudeva (“Salgaocar”) concerned an alleged beneficial shareholder seeking to treat the company’s assets as belonging to him.5This attempt at “reverse veil piercing” was unsuccessful, with the Singapore High Court clarifying Singapore’s position on corporate veil piercing.

FACTS

Salgaocar concerned two originating summonses applied under s 127(1) of the Land Titles Act (Cap 157, 2004 Rev Ed) by the plaintiff companies and their registered owner (“Mr Darsan”).

This was to remove caveats lodged by the defendant against properties owned by the plaintiff companies.

1 2 3 4 5

[2018] SGHC 24 [1897] AC 22 Ibid, [30] [2013] UKSC 4 [2018] SGHC 24

151

Singapore Comparative Law Review The defendant had argued based on an alleged December 2003 agreement that he was the sole beneficial shareholder of the plaintiff companies, with Mr Darsan holding shares in these companies on trust for him. Hence, the defendant argued he had a caveatable interest in the properties by virtue of, inter alia, reverse veil piercing. The plaintiffs applied to remove the caveats on grounds that there was no serious issue to be tried.

ISSUES This article will focus on how the Singapore High Court dealt with the following arguments of the defendant: (i)

Reverse veil piercing operated such that Mr Darsan held the properties on trust for the defendant (“reverse piercing argument”).

(ii)

Mr Darsan’s use of the corporate veil to perpetrate fraud formed a basis for the defendant to disregard separate legal personalities of the plaintiff companies (“lifting the veil argument”). This was argued on the basis that fraud unravels everything in corporate veil lifting, relying on Lord Sumption in Prest.6

JUDGMENT Reverse Piercing Argument The Singapore High Court rejected the reverse piercing argument. It identified three types of corporate veil piercing7: (i)

Standard piercing: disregarding the separate legal personality of the company to hold shareholders liable for company obligations8;

(ii)

Outsider reverse piercing: same as (i) but to hold companies liable for shareholder obligations9;

6 7

Prest v Petrodel Resources [2013] UKSC 4 at [18] Jhaveri Darsan Jitendra v Salgaocar Anil Vassudeva [2018] SGHC 24 at [47], referring to J H Y Chan, 'Should

‘reverse piercing’ of the corporate veil be introduced into English law?’ (2014) 35(6) Comp Law 163-171 at 163 and G S Crepi, ‘The Reverse Pierce Doctrine: Applying Appropriate Standards’ (1990-1991) 16 Journal of Corporation Law 33 at 37 See Children’s Media Ltd and other v Singapore Tourism Board [2009] 1 SLR(R) 524 See Gilford Motor Co Ltd v Horne [1993] Ch 935 and Jones v Lipman [1962] 1 WLR 832 8 9

152

Singapore Comparative Law Review

(iii)

Insider reverse piercing: shareholders inviting courts to disregard the separate legal personality of the company.

The court allowed for standard piercing and outsider reverse piercing, but not insider reverse piercing. This was established on the following grounds: (i)

Insider reverse piercing is unsupported by authority. The court found no Singapore cases supporting the claim. Conversely, English cases such as Macaura v Northern Assurance

Company, Limited, and Others and Tunstall v Steigmann rejected insider veil piercing 10

claims. 11 The court noted that insider reverse piercing was successful in the US, as seen in the Supreme Court of Minnesota decisions relied on by the defendant 12. However, the court declined to follow them on the basis that they adopted a more expansive test than allowed under Singapore law and turned on relevant statutory provisions. 13 (ii)

Insider reverse piercing is contrary to principle. The court identified the rationale of piercing the corporate veil as a means to prevent shareholders or controllers of the company to abuse its separate legal personality to the detriment of third parties 14, citing authorities such as Goh Chan Peng v Beyonics Technology Ltd 15 (“Beyonics”) and Prest.

On the contrary, insider reverse piercing operates not to benefit third parties, but shareholders or corporate insiders. In Prest, it was held that corporate veil piercing occurs only if it is necessary to achieve a public policy imperative.16 Here, it was not necessary for the plaintiffs to pierce the corporate veil. It was still open to the defendant to either commence a derivative action or recover title to the shares. Further, insider reverse piercing would allow the latter to benefit from the separate legal personality of the company while avoiding its disadvantages.17

[1925] AC 619 [1962] 2 QB 593 See Beverly Roepke et al Western National Mutual Insurance Company 302 NW 2d 350 (Minn, 1981) and Cargill Inc v Sam Hedge and Hedge Farm Inc and Annette G Hedge 375 NW 2d 477 (Minn, 1985) Jhaveri Darsan Jitendra v Salgaocar Anil Vassudeva [2018] SGHC 24 at [68] Ibid, [71] [2017] 2 SLR 592 Prest v Petrodel Resources [2013] UKSC 4 at [35], [62] and [103] Jhaveri Darsan Jitendra v Salgaocar Anil Vassudeva [2018] SGHC 24 at [74], referring to Tunstall v Steigmann [1962] 2 QB 593 and J H Y Chan, ‘Should ‘reverse piercing’ of the corporate veil be introduced into English law?’

(2014) 35(6) Comp Law 163-171 at 168 10 11 12

13 14 15 16 17

153

Singapore Comparative Law Review However, the court remained open to insider reverse piercing being allowed in some cases. 18 Referring to the above US decisions, this may be possible in the presence of relevant statute.

Nonetheless, this was held not to apply on the facts of Salgaocar, which concerned non-statutory veil piercing.

Lifting the Veil Argument The lifting the veil argument was also rejected by the Singapore High Court. It noted that the distinction between the three types of corporate veil piercing similarly applied to corporate veil lifting. Thus, the defendant’s claim is subject to the above objections on authority and principle.

Moreover, the court re-iterated that it was not necessary to lift the corporate veil to pursue a remedy.

IMPACT

Salgaocar further demonstrates the reluctance of Singapore courts to pierce the corporate veil.

Recently, the Singapore Court of Appeal in Beyonics affirmed that veil piercing is only allowed where there has been an abuse of the corporate form, or to give effect to legislation. The court also rejected the “single economic unit” theory proposed by Lord Denning in DHN Food

Distributors v Tower Hamlets LBC19, which postulates that companies within corporate groups are treated as a single legal entity.20 That Singapore courts are slow to disregard separate legal personality is consistent with UK decisions. In Prest, Lord Sumption stated that the corporate veil will not be pierced save in circumstances where the person interposes a company under his control to deliberately evade an existing legal obligation (the evasion principle). Understandably, insider reverse piercing falls outside such narrowly defined parameters of abuse.

Yet, the defendant’s arguments in Salgaocar should be considered in context with other Singapore decisions. In Koh Kim Teck v Credit Suisse AG, Singapore Branch21, it was suggested that insider veil piercing was “not unarguable and unsustainable”. 22 Steven Chong J in Tjong Very

Sumito v Chan Sing En23 also accepted two justifications for veil piercing – (i) where the company 18 19 20 21 22 23

Jhaveri Darsan Jitendra v Salgaocar Anil Vassudeva [2018] SGHC 24 at [49] and [68(b)] [1976] 1 WLR 852 Also, see Adams v Cape [1990] Ch 433 at 536E-G [2015] SGHC 52 Ibid, [63] [2012] 3 SLR 953

154

Singapore Comparative Law Review is one and the same as the controller or used as a mere front for the controller’s affairs; (ii) where the corporate structure was abused to further an improper purpose. 24 This is wider than the evasion principle in Prest. Even in Prest itself, the judicial opinions are not entirely consistent.

Lady Hale (with whom Lord Wilson agreed with) doubted that cases could be cleanly divided into evasion and concealment according to Lord Sumption’s analysis – they may simply be examples of the principle that individuals operating limited companies should not be allowed to take unconscionable advantage of those they do business with 25. Lord Walker disagrees that corporate veil piercing is a coherent doctrine, but rather a label used to describe the “disparate occasions on which some rule of law produces apparent exceptions” to the principle of separate legal personality.26 While Lord Mance agreed with Lord Sumption’s analysis, he remarked that there may be other, albeit rare, exceptions to the evasion principle. 27 As such, he was not prepared to “foreclose all possible future situations which may arise”. 28 Altogether, these decisions paved the way for a more expansive view justifying corporate veil piercing.

Nonetheless, Salgaocar remains founded in authority and principle, consolidating Singapore’s strict position regarding corporate veil piercing. This has practical implications for companies and shareholders. Unless provided by statute, it is unlikely that insider veil piercing will enable shareholders to assert rights in corporate assets. It remains to be seen where Singapore legislation could fall under this exception. As of now, company insiders may wish to pursue alternative legal action to assert their rights.

24 25 26 27 28

Ibid, [67] Prest v Petrodel Resources [2013] UKSC 4 at [92] Ibid, [106] Ibid, [102] Ibid, [100]

155

THANK YOU TO OUR SPONSORS Gold Tier Clifford Chance Emerald Law

Silver Tier Allen & Gledhill Baker McKenzie Wong & Leow Dentons Rodyk & Davidson LVM Chambers Oon & Bazul Rajah & Tann Singapore Singapore Legal Service TSMP Law Corporation WongPartnership

Bronze Tier Allen & Overy Drew & Napier Latham & Watkins Osborne Clarke Quahe Woo & Palmer Simmons & Simmons

Design and Cover Photo: Tan Yan Shen