Commentary on the Singapore High Court case of Ezion Holdings and Shareholder Access to Company Financials

By Vedam Rakesh

I. BACKGROUND

This case concerns the right of a shareholder of a company to financial information if the company has been dilatory in holding meetings.

The Plaintiff, Ezion Holdings Ltd., had previously owned the Defendant, Teras Cargo Transport Pte Ltd., but had subsequently sold the majority of the shares and become a minority shareholder.1

The Plaintiff sought an order under s 203 of the Companies Act [the Act]2 for the Defendant’s financial statements and accounts for the financial year [FY] ending in 2015, though these had yet to be prepared and audited.

In 2016, the Plaintiff filed an application seeking an order under s 203 of the Act for the Defendant to produce its financial statements and accounts FY 2015, though these had not been prepared or audited.

The last audited accounts had been issued in the FY 2012 and an annual general meeting [AGM] had been held in July 2016, three months after the present application was filed, where the audited accounts and financial statements for FY 2013 were produced to the shareholders and queries were made.3

The issue that arose was how s 203 of the Act should be read and whether the Plaintiff could request for and receive the unaudited financial statements for FY 2015.

II. DECISION

The Court denied the application by the Plaintiff4 and held that the Act did not confer a broad right to financial information to a member or shareholder.5

The Court found that s 203 of the Act operates in tandem with s 201 of the Act, which deals with AGMs.6 Therefore, s 203 did not give a right to general financial information, but rather, the financial information that is to be provided to a member is financial information tied to a general meeting.7

The Plaintiff argued for a broader reading of s 203 putting forward several reasons in support.

Argument #1

The Plaintiff argued that on the proper interpretation of s 203, the accounts do not have to be audited and laid, before a right arises to the statements.8

This argument was rejected as it ignored the structure of s 203(1), which reads: “A copy of the financial statements...which is duly audited and which (or which but for s 201C) is to be laid before the company.”9

Argument #2

The Plaintiff argued that the title of the section, which reads “Members of company entitled to financial statements, etc”, supported a broad reading of s 203.10

However, the Court observed that the title of a section is not determinative of its contents and is only intended to summarise the contents of sections for ease of reference; such titles are thus not always exhaustive or precise.11 It noted that although titles and marginal notes can and have been used in interpretation, according to the Court of Appeal at [41] in Tee Soon Kay v AG,12 the marginal notes must be taken against the backdrop of the actual language used in the section.

In the present case, the title of the section was only a broad and incomplete summary of the contents of the section. The term “etc” in the title clearly indicated that this section governs many matters, and that the title was not intended to be exhaustive.

Argument #3

The Plaintiff cited Burdeny v K & D Gourmet Baked Foods and Investments Inc [Burdeny]13 as authority for the proposition that the Defendant could be ordered to produce the unaudited financial statements to the Plaintiff.

The court found that the wording of the section of the British Columbia Company Act cited was different from s 203 of the Act. Furthermore, the financial statement referred to in Burdeny were statements that had already been prepared and the focus of Burdeny had been on the oppression suffered by the applicant there. Burdeny was therefore distinguished and did not offer strong authority for the Plaintiff’s arguments.14

Argument #4

The Plaintiff then relied on Article 122(B) of the Articles of Association [AOA] of the Defendant, which required that a copy of every profit and loss account and balance sheet together with the auditor’s report, to be sent to persons entitled to receive notice of an AGM not less than 14 days before the meeting.

The Court held that the AOA of the Defendant could not assist the Plaintiff either, because it was restrained by the same obligations as s 203 of the Act.15

Argument #5

The Plaintiff also cited the speech made by Mr Ong Teng Koon at the second reading of the Companies (Amendment) Bill [the Bill] on 8 October 2014,16 where the Member of Parliament had stated that "The third objective of this Bill is to achieve the correct balance between flexibility and transparency…”. The Plaintiff advanced the argument that this comported with a shareholder’s right to access financial information of the company.

The Court held that the speech could not assist in the interpretation of the provision because the it was concerned with other areas of the Bill and not specifically with the member’s right to financial information.17

The court set out the conditions when a parliamentary speech could be useful in interpreting a provision:

"[where] a Member proposes an amendment which is either accepted or rejected… the Member’s speech could be useful in interpreting the provisions if the amendment were passed, and even if it were not, any accompanying remarks in rejection may cast light on what was eventually enacted."18

Argument #6

The Plaintiff cited Devlin v Slough Estates Ltd,19 an English decision, for the proposition that a shareholder has a right to accounts where the articles of association require the preparation and laying of the accounts in compliance of the Act.

The Court observed that in that case, at p502, it was held that the individual shareholder had no personal right to commence an action for any breach of that obligation as the duty was owed by the directors to the company and not to the individual shareholders.20

Argument #7

The Plaintiff also cited Over & Over Ltd v Bonvests Holdings Ltd21 and Lim Swee Khiang v Borden Co (Pte) Ltd22 as authorities to support the argument that individual shareholders had a free-standing right to obtain financial information. However, both cases were concerned with the oppression of minority shareholders. Over & Over Ltd v Bonvests Holdings Ltd concerned an action for minority oppression by a plaintiff which had its interests disregarded; similarly, the statement by Chan Sek Keong CJ (as he then was) in Lim Swee Khiang v Borden Co (Pte) Ltd related to the enjoinment of the Courts to examine majority shareholders’ conduct under s 216. As minority oppression under s 216 was not pleaded by the Plaintiff in the present case, the Court found that the aforementioned cases did not apply nor offer strong authority.

II. COMMENTARY

It is now clear that a shareholder of a company does not have a right to obtain financial information of a company. He is only entitled to audited financial records that are presented at AGMs.

The rights that shareholders possess include the right to vote, the right to dividends when it is declared, the right to appoint and remove directors and the right to alter the company’s constitution. The management of the company is left to the directors to handle and the shareholders generally do not get involved in these matters. Since the shareholders do not participate in the management of the company, they do not need an unfettered right to financial information.23

However, if there have not been any AGMs held, or the AGMs have been postponed, the shareholder is left completely in the dark about the financial situation of the company in which he has invested.

In such a situation, the shareholder is left with a few options.

  • First, he can wait for the AGM to be held and hope that the delay (however long) in viewing the audited accounts does not adversely affect him.

  • Second, he can - as the court noted in the present case - make an application under s 216 of the Act for Minority Oppression.24

s 216 of the Act gives the court wide discretionary powers under which, if the majority is found to have acted unfairly, the court can direct or prohibit any act or cancel or vary any transaction or resolution under s 216(2)(a),25 as well as regulate the conduct of the affairs of the company in the future under s 216(2)(b).26

Therefore, under s 216, the court could order that the minority shareholders be allowed to view the audited financial records.

However, s 216 of the Act is somewhat of a poisoned chalice. As cases involving requests for shareholder access to financials are prone to recurrence, the only realistic solution is often for one of the parties to exit the company. Shareholders seeking such access would may be daunted by the possibility of an order for them to sell their shares to another should the courts find that they are unable to co-operate. In extreme instances, the Court is also empowered to order the winding-up of the company under s 216(2)(e) of the Act,27 even if the parties had not asked for such a result.

One can thus understand why minority shareholders may be hesitant to make a claim of minority oppression under s 216 of the Act.

In addition, these actions for shareholder access will fail if there are genuine reasons for postponing the AGMs, and the directors have acted fairly, honestly and diligently. In such a scenario, the shareholder has no other route to view the financial records of the company.

So, what does the minority shareholder do then?

A. Should a minority shareholder have a right to financial information?

As observed by the court at [31] in Ezion, “our present statutory regime balances the rights and obligations of a number of different parties, not only those of the shareholders or members, but also the directors and creditors.”28

While an unqualified right to financial information of the company would benefit the shareholders immensely, such a right would probably impose additional burdens on the company and its directors.

B. What is the solution for the Plaintiff in the present case?

In the present case, the Defendant had failed to present the Plaintiff with any financial statements of the company between the years 2012 and 2016 (a duration of 4 years). The former had only called an AGM to present the FY 2013 statements to the shareholders after the Plaintiff initiated its action in court in 2016. To add insult to injury, the Directors of the Defendant were not able to answer queries about the FY 2013 financial statements at their AGM.

One of the points made by the Plaintiff in the present case was that its rights could not be enforced through the relevant agencies as “the failure to hold an AGM only leads to small fines, and nothing more”.29 For instance, if a company fails to hold an AGM, “the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty” according to s 175(4)(a) of the Act.30

A fine of this amount is, unfortunately, hardly a deterrent to a company that is sufficiently motivated to keep its minority shareholders in the dark with regard to financial information and – as observed above – s 216 of the Act presents other difficulties that may dissuade shareholders from raising actions for Minority Oppression.

While it is agreed that an unqualified right to information should not be given to shareholders, under the present state of affairs the shareholder is left at the mercy of the company with regard to financial information.

It is humbly submitted that minority shareholders require another avenue to gain access to the financial information of the company.

One possible suggestion is that an amendment could be made to the Act, giving the shareholders a fettered right to check the financial records of the company if an AGM has not been called within the time limit stipulated in the Act, and a reasonable period of time has passed.


[1] Ezion Holdings Ltd v Teras Cargo Transport Pte Ltd [2016] SGHC 175; [2016] 5 SLR 226 [Ezion] at [2].

[2] Cap 50, 2006 Rev Ed.

[3] Supra note 1, at [3].

[4] Supra note 1 at [11].

[5] Ibid at [12].

[6] Ibid at [15].

[7] Ibid at [16].

[8] Ibid at [17].

[9] Ibid.

[10] Ibid at [17].

[11] Ibid at [18].

[12] [2007] 3 SLR(R) 133 at [41].

[13] [1999] BCJ No 953.

[14] Supra note 1 at [24].

[15] Ibid at [25].

[16] Parliamentary Debates Singapore: Official Report, vol 92 at col 14 (8 October 2014) (Ong Teng Koon, Member of Parliament, Sembawang).

[17] Supra note 1 at [27].

[18] Ibid at [28].

[19] [1983] BCLC 497.

[20] Supra note 1 at [26].

[21] [2010] 2 SLR 776.

[22] [2006] 4 SLR(R) 745.

[23] Ibid at [19].

[24] Supra note 2, s 216.

[25] Ibid, s 216(2)(a).

[26] Ibid, s 216(2)(b).

[27] Ibid, s216(2)(e).

[28] Supra note 1 at [31].

[29] Ibid at [9].

[30] Supra note 2, s 175(4)(a).


The PDF version of this article is available here.

The SLR at the 3rd Asia Conference on International Arbitration

By Fabian Chiang

On the 28th of June 2017, the SLR was honoured to be invited to the International Chamber of Commerce’s (ICC) 3rd Asia Conference on International Arbitration where the ICC conducted talks and training programmes on the arbitration and its impact on international business. The conference featured an illustrious register of senior lawyers, corporate counsels, arbitrators, and eminent academics, with the opening Keynote delivered by Senior Minister of State for Finance and Law, Ms. Indranee Rajah. The SLR sent two of its members to the conference. 

The talks covered topics such as developments in third party funding, expedited arbitration mechanisms and investment arbitration. Of particular interest was the talk on third party funding, given Singapore’s recent changes under the Civil Law (Amendment) Bill 2016 which introduced third party funding in Singapore. The changes also apply to international arbitration proceedings, thereby abolishing the common law tort of maintenance and champerty. No doubt, the passing of the amendments would strengthen Singapore's ongoing pursuit of becoming an international arbitration hub since third party funding is a common practice in other major arbitration centres. These changes are also closely watched, with Hong Kong having just passed a similar amendment bill in June 2017 to allow the practice. The discussion was led by a distinguished panel of international lawyers from France, Hong Kong and Singapore. With the changes having only recently taken effect in Januarythis year, one can see the adaptability and dynamism required of lawyers and arbitrators in this rapidly expanding field.

Arbitration aside, we note too that amendments were also made to the Legal Profession Act such that lawyers are now allowed to introduce or refer third party funding to their clients so long as they do not receive any direct financial benefit in the process. The practical ramifications of these changes across jurisdictions, along with other sea changes in arbitration, were tabled and discussed by practitioners and guests. Convening to share their insights, the discussants brought together a plethora of experiences from across the globe.

The significance of recent developments and innovations in arbitration cannot be understated; arbitration’s importance has grown beyond merely being an alternative for dispute resolution to being a competitive and viable one. While we were regrettably unable to attend the talks themselves, the SLR’s members anchored on the opportunity at the conference to speak and learn from various legal and business professionals, including a Deputy Solicitor General of Hong Kong. These interactions have certainly been fruitful to us, and we similarly hope that the guests have become more familiar with the SLR’s work and our Singaporean legal landscape.

Our SLR Editors, Fabian Terh and Fabian Chiang, at their conference booth.

Our SLR Editors, Fabian Terh and Fabian Chiang, at their conference booth.

The 4th ICC Asia Conference on International Arbitration will be held on 26-28 June 2018 in Hong Kong. Do click on this link (or on the preview below) to find out more, and mark down the upcoming Conference on your agenda.

The SLR would once again like to thank the ICC for inviting us to the conference. We look forward to expanding our working partnership in the future if possible and hope to publish more arbitration related papers in our publication in the future.

Writer: Fabian Chiang

Photo Credits: ICC


More photos of the event can be found here.

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A Law Student's Guide to the National Gallery

by Agnes Lo

“For I suppose there is no institution more ancient and going back further back into the past, than our British conception of justice and rule of law – the government of the people through the law of the land, administered in open courts under the eyes of all, so that impartiality may be apparent and so that any defects in the law may become manifest and reformed.” - Chief Justice Percy McElwaine (as he then was), at the Supreme Court foundation stone ceremony, 1 April 1937.1

The time capsule containing six Singapore newspapers dated 31 March 1937 and a handful of Strait Settlement coins were buried beneath the foundation stone, only to be retrieved in the year 3000. The foundation stone can be located at the Supreme Court Wing, Level 1 (exactly under the centre of the dome).

The Foundation Stone at Supreme Court

The former Supreme Court Building is perhaps the most handsome and majestic of the historic buildings in Singapore, rivalling the best of the classical buildings built by the British in the Commonwealth. Constructed between 1937 and 1939, this iconic building topped by a distinctive big oxidised green copper dome, housed Singapore’s highest Court for more than 60 years until 2005. The former Supreme Court was gazetted a National Monument of Singapore on 14 February 1992.2

A. The Tympanum

Many would agree that the most professionally meaningful symbol of the building is the triangular feature - tympanum - on the pediment visible below the cupola. Designed by Milanese sculptor Cavelieri Rudolfo Nolli, the tympanum constituted an eloquent allegory of justice, which as officers of the Court, we are committed to uphold - the legal principle that “all are equal before the law”. In the tympanum, there is the central figure of Justice holding scales and a sword; two legislators holding books in their hands representing the Law are on one side of Justice and figures representing the People, are on the other side.

The Tympanum at National Gallery Singapore

B. National Gallery Singapore

Following from an ambitious ten-year renovation process, the former Supreme Court Building is now united with the former City Hall as a house of Southeast Asian Art and renamed the National Gallery Singapore. Aspiring architects would be thrilled to witness the intricately re-created architectural model of the gallery (Concourse, Level B1). It shows a fascinating cross-section of the two neo-classical monuments and showcases the complexity of the gallery’s extensive design to gain insights into the challenges of integrating old and new architectural elements and explore the seemingly labyrinth corridors at a single glance.

Take this opportunity to walk through the newly opened ArchiGallery (City Hall Wing, Level 4) to relive the momentous events that took place within these walls: the Japanese surrender ceremony in 1945, the inauguration of Yusof bin Ishak as Yang-di Pertuan Negara (Head of State) in 1959 and the Singapore’s Proclamation of Independence in 1965.3

C. Listening to Architecture: The gallery’s histories and transformation

Listening to Architecture is the first exhibition to be housed at the ArchiGallery. It features two galleries and a walkway, and invites you to think of architecture as a conversation between different generations that develop over time.

Archigallery 1

Explore ArchiGallery 1 to learn about the enduring histories of the site and the architectural plans of the two buildings which once represented the power of the British colonial government.

Many famous cases were heard in this building, and perhaps the most historic of all is the war crime trials of members of the Japanese military in 1946. While you are here, do browse through the two journal articles written by our home-grown academic, Dr Cheah Wui Ling and Professor David J Cohen, on how the Singapore War Crime Trials present legal issues that are of particular relevance for the lower- level prosecutions and its relevance in today’s international criminal law debates. You may locate bound copies of these articles in the drawers underneath the reading table (ArchiGallery 1) Archaeological artefacts from the Yuan Dynasty can also be found in this gallery.

The linkway between the galleries provides an interactive 360 degree virtual tour of the main dome and the prisoner’s passage way, which are public-restricted areas of the buildings.

ArchiGallery 2

ArchiGallery 2 brings you through a timeline of the building’s historic moments: from the idea of a national gallery of the art was first mooted in 1957 to the making of the National Gallery Singapore we see today as part of the government’s Renaissance City Plan in 2000.

Law of Land: Highlights of Singapore’s Constitutional Documents

D. Law of the Land: Highlights of Singapore’s Constitutional Documents

While at the gallery, do visit the Law of the Land: Highlights of Singapore’s Constitutional Documents exhibition (Supreme Court Wing, Level 3, Chief Justice’s Chamber & Office) to indulge yourself in the rich history of Singapore’s constitutional development from its founding as a British settlement in 1819 to its emergence as a sovereign republic in 1965.

Discover rare documents from the collections from the National Archives including the original copy of the Third Charter of Justice, 1855. This document affirmed the reception of English law in Singapore and provided the settlement with its own professional judge (then known as a recorder). You will also find printed on paper and parchment, with gold leaf accents and brightly coloured flower motifs, the documents proclaiming Singapore’s merger with Malaya embodied the hope in the air in 1963, as well as the draft agreement relating to the separation of Singapore from Malaysia as an independent and sovereign state, dated 7 August 1965.4

E. What else?

It is highly recommended that you cap the evening with a visit to the rooftop bar at the City Hall Wing (via the link bridges at levels 3 and 4) to enjoy magnificent panoramic views over the Padang and Marina Bay, while taking in the majestic presence of the dome over some drinks.

Opening Hours

Sun – Thu, Public Holidays: 10am – 7pm

Fri- Sat, Eve of Public Holidays: 10am – 10pm

Admission

Free entry for Singaporean & PRs

Standard ticket for non-Singaporean: $20 (Concessions available)


[1] Sir Percy Alexander McElwaine was the Chief Justice of the Strait Settlements for 1936 – 1946.
[2] William Wan, “Down Memory Lane: Memories of the Old Supreme Court”
<http://www.lawgazette.com.sg/2015-08/1367.htm> (accessed 14 July 2017)

[3] National Gallery, “The Gallery Guide Apr- June 2017”
<https://www.nationalgallery.sg/sites/default/files/2017-GALLERY_QUARTERLY_APR_JUN_2017-Digital.pdf> (accessed 14 July 2017).

[4] “In Pictures: Singapore’s constitutional documents at the National Gallery”
<http://www.straitstimes.com/multimedia/photos/in-pictures-singapores-constitutional- documents-at- the-national-gallery> (accessed 14 July 2017).


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First Steps Towards a Gender-Neutral Maintenance Obligation

by Siew Jey Ren

I. INTRODUCTION

Recent amendments made to the Women’s Charter1 have extended the possibility of obtaining maintenance to incapacitated husbands who are able to prove their need. This article will discuss the significance of these changes and the arguments raised against full gender neutrality in our maintenance provisions.

II. THE WOMEN’S CHARTER (AMENDMENT) ACT 2016

A. Differences in attitudes towards maintenance of spouses and maintenance of children

The unilateral character of the maintenance obligation provided for in s 69 and s 113 of the Women’s Charter is an aspect of the law that has persisted through changes from fault-based divorce to fault-neutral divorce.2 Prior to the 2016 legislative amendments, it has never been possible for husbands to apply for maintenance from their wives. It has been suggested that the practice of placing the maintenance obligation solely upon the husband was inherited from the common law as quid pro quo for the historical rule that a married woman relinquished her personal property rights.3 Although this rule is no longer part of our law, the Singapore Legislature has been reluctant to transform the maintenance obligation into one that is mutual and gender-neutral. The relevance of gender is unique to the duty between spouses inter se; the duty of spouses to maintain their children does not differentiate on this basis and is equally applicable to both mother and father.4 No one doubts that parents, regardless of gender, have a responsibility to support their dependent children.

The position vis-à-vis maintenance of children appears more consistent with the aspirational ideal of marriage as an equal cooperative partnership espoused under s 46 of the Women’s Charter. In contrast, controversy has resurfaced each time proposals seeking to abolish gender as a differentia in spousal maintenance were raised. For instance, during the second reading of the Women’s Charter (Amendment) Bill,5 the Minister for Social and Family Development, Mr Tan Chuan-Jin, cited feedback received during the public consultation that gender neutrality in maintenance would be inappropriate in a society where men are expected to be the primary breadwinners.6 The Minister took great pains to stress that this was by and large the case, and that it reflected economic reality. Similar views were aired during the round of amendments in 19967 with the caveat that further developments would be possible in the future where the disparity between men and women was less marked.8

That we should speak of ‘parent’ rather than ‘father’ and ‘mother’ but insist on ‘husband’ and ‘wife’ instead of ‘spouse’ speaks to differing societal attitudes as well as the differences between maintenance during the subsistence of a marriage and post-divorce. While maintenance during the subsistence of a marriage for both dependent spouse and child is primarily concerned with the modest goal of meeting financial needs,9 maintenance of an ex-spouse serves the more ambitious objective of giving her a fair share of the wealth acquired over the course of the marriage.10 It would appear from public feedback that resistance was not merely directed towards the expansion of the category of persons who could be compelled to provide maintenance, but also the provision of maintenance to a wider class of recipients.11 Association with notions of dependency and need would be particularly damaging to the perception of the male as the breadwinner and head of the household in the context of post-divorce alimony, given its suggested aim of compensating for economic prejudice suffered during the marriage.

Several related concepts of dependency are also at play. It has been pointed out that certain types of dependency are developmental and biological in nature, with the result that they are universally experienced at some point in our lives.12 Children and many of those advanced in age are dependent in this sense, as well as those who become incapacitated as adults. There is also a distinct type of dependency that is structural in nature; this has been characterised as ‘derivative’.13 This concept recognises the reality that those who are assigned the role of caring for others are themselves dependent upon resources to undertake that care. Derivative dependency and its associated caretaking role are not universally experienced but assigned to certain members of society through a confluence of cultural and legal factors. To the extent that full gender neutrality in our maintenance provisions is perceived as recognition of a broader latitude for assuming derivative dependency, a degree of cultural resistance must be expected. However, the compromise of allowing a small subset of incapacitated former husbands to apply for maintenance represents a calibrated step in the right direction insofar as it confines the expansion to those who can prove their dependency falls within the former type. For this reason, it should not be perceived as a threat to existing gender roles.

B. The argument that wide economic disparities still exist between women and men

One common argument raised against gender neutrality in our maintenance provisions is that significant economic disparities persist between women and men, as signalled by gaps in labour force participation rates and other socio-economic markers.14 Taking the factor of normative attitudes out of the equation, this argument essentially hinges on using gender as a reliable proxy for need. It is uncontroversial that maintenance under the Women’s Charter is contingent on a host of circumstances including the need for maintenance and the capacity to provide for it.15 Where provisions in force direct the courts to have regard to fact-specific elements, it becomes both unnecessary and illogical to fashion gender as an additional requirement in deserving cases.16 Even if it is conceded that gender may serve as an accurate proxy for need, the existence of a general observation does not require all non-incapacitated men to be excluded,17 nor does allowing the claims of dependent men in any way defeat the claims of dependent women.18

C. The argument based on social values

In ATE v ATD,19 the Singapore Court of Appeal observed that a husband should not be regarded as a general insurer vis-à-vis his wife through the award of nominal maintenance as a matter of course. Faced with the occasional factual matrix where the wife earned more than the husband, the courts have readily held that maintenance cannot be considered an unalloyed right. There has been judicial recognition of the potential reverse discrimination against women engendered by ‘patronising gestures’ of token protection.20 In general, it has become rightfully more acceptable to recognise women outside the dependent role, but there remains a lack of progress on the legislative front in recognising men within the dependent role.21 Apart from the questionable desirability of traditional gender roles, it is disingenuous to argue that retaining differential treatment de jure is an effective way of promoting preferred social values relating to the financial responsibilities of husbands and the economic dependency of wives given that maintenance is not awarded on the blanket basis of social characteristics, but contingent on multiple factors independent of gender.22

D. The argument that an additional burden will be placed on wives of incapacitated husbands

A third issue that was directly addressed by the Minister for Social and Family Development concerns the potential imposition of a long term burden on former wives of incapacitated men.23 It was pointed out that monetary difficulties could be exacerbated by the presence of young children, and that long term support might disadvantage the former wife in entering future relationships.24 Beyond the strict criteria that must be met before a husband or ex-husband may apply for maintenance,25 the courts’ consideration of case-specific circumstances such as earning capacity and need would largely minimise the occurrence of situations in which maintenance obligations result in financial difficulty. The implementation of supportive measures and a referral protocol between the Social Service Offices and the Community Justice Centre26 to assist dependents and defaulters who are genuinely unable to keep up with maintenance payments is a further step towards preserving the welfare of families post-divorce.

III. CONCLUSION

Legal suppositions that defy marital reality recall the famous words of Charles Dickens in Oliver Twist, “the law is an ass … the law is a bachelor”. Recognising the need for the law to be in step with evolving mores and attitudes towards marriage, the 2016 amendments made to the Women’s Charter strive to strike a delicate balance on an emotive issue strongly felt about by many Singaporeans. Legislation, as was rightly pointed out by the Minister, is only part of an entire effort, and the push for symbolic change should not ignore the sensitivities involved and the need to be effective and relevant. Nevertheless, it is to be hoped that the day will arrive when the idea of gender neutrality ceases to attract controversy, and parity is achieved in line with the broader principles of the Women’s Charter.


[1] (Cap 353, 2009 Rev Ed Sing), as amended by Women’s Charter (Amendment) Act 2016 (No 7 of 2016).

[2] This follows from the Women’s Charter (Amendment) Act 1980 (No 26 of 1980), which substituted the fault principle with the modern principle of proof of an irretrievable breakdown of marriage.

[3] Leong Wai Kum, “Fifty Years and More of the Women’s Charter of Singapore” (2008) 1 SJLS 1 at 22-23.

[4] As provided for by ss 68 and 69(2) of the Women’s Charter.

[5] (No 6 of 2016).

[6] Parliamentary Debates Singapore: Official Report, vol 94 (29 February 2016) (Mr Tan Chuan-Jin).

[7] In the form of the Women’s Charter (Amendment) Act 1996 (No 30 of 1996).

[8] Parliamentary Debates Singapore: Official Report, vol 66 at col 520-528 (27 August 1996) (Mr Abdullah Tarmugi).

[9] Leong Wai Kum, Elements of Family Law in Singapore (Singapore: LexisNexis, 2007) at 476.

[10] Ibid.

[11] Supra note 6.

[12] Martha Albertson Fineman, “Women, Marriage and Motherhood in the United States: Allocating Responsibility in a Changing World” (2011) 1 SJLS 1 at 4.

[13] Ibid.

[14] In 2016, there was a 15.8 percentage point difference in labour force participation rate and a wage gap of $438 in median gross monthly income based on gender. Ministry of Social and Family Development, Data Tables: Gender, online: <https://www.msf.gov.sg/research-and-data/Research-and-Data-Series/Pages/Data-Tables-Gender.aspx>. 

[15] As provided for by ss 69(4) and 114(1) of the Women’s Charter.

[16] The discussion of the US Supreme Court case of Orr v Orr 440 US 268 (1979) in Kelvin Low, Kelry Loi & Serene Wee, “Towards a Maintenance of Equality (Part I): A Study of the Constitutionality of Maintenance Provisions that Sexually Discriminate” (1998) 19 SingLRev 45 at 58-59 is instructive.

[17] Leong Wai Kum, “The Next Fifty Years of the Women’s Charter—Ripples of Change” (2011) 1 SJLS 152 at 170.

[18] Supra note 16 at 59.

[19] [2016] SGCA 2.

[20] ADB v ADC [2014] SGHC 76 at [11].

[21] Parliamentary Debates Singapore: Official Report, vol 94 (29 February 2016) (Mr Seah Kian Peng).

[22] Supra note 16 at 58.

[23] Parliamentary Debates Singapore: Official Report, vol 94 (29 February 2016) (Dr Lily Neo).

[24] Ibid.

[25] As provided by the definition of “incapacitated husband” and “incapacitated former husband” under s 2 of the Women’s Charter. During the second reading of the Women’s Charter (Amendment) Bill 2016, the Minister for Social and Family Development also gave some examples of husbands and ex-husbands who would not qualify: (i) an incapacitated husband or ex-husband who is able to earn a livelihood sufficient to maintain himself; (ii) an incapacitated husband or ex-husband who has other means, such as income from investments or insurance pay-outs, to support himself; and (iii) an ex-husband who becomes incapacitated after the divorce has been finalised.  

[26] Ministry of Social and Family Development, Maintenance Support, online: <https://www.msf.gov.sg/policies/Marriages/Divorce-and-Child-Custody/Pages/Getting-a-Divorce.aspx>.

The PDF version of this entry can be found here.

Ill Advice or Ill-advised? Negligent Medical Advice and the Modified Montgomery Test

by Tan Wei Ming

I. INTRODUCTION

When is a doctor liable for giving a patient negligent medical advice? In the case of Hii Chii Kok v Ooi Peng Jin London Lucien [Hii Chii Kok],1 the Court of Appeal departed from established case law and created a new test to determine the standard of care a doctor must meet to discharge his duty to the patient he is advising. This article will outline the state of the law regarding negligent medical advice in Singapore, analyse the new three-stage modified Montgomery test and discuss some of its implications on the medical and legal practice.

II. BACKGROUND

As reiterated in Hii Chii Kok, the practice of medicine by doctors comprises of three aspects:2

  1. Diagnosis – Establishing what the medical issue is.
  2. Advice – Providing the patient relevant and material information about recommended courses of action, alternative treatments and the potential risk.
  3. Treatment – Carrying out “that which the patient has agreed should be carried out”; this may, for example, refer to surgery as well as relevant pre- and post-operative treatment.3

Prior to the ruling in Hii Chii Kok, the leading local authority on the applicable standard of care expected of medical professionals was Dr Khoo James & Anor v Gunapathy d/o Muniandy [Gunapathy].4 It accepted and applied the longstanding Bolam-Bolitho test to all three aspects of medical practice.5 The Bolam-Bolitho test comprises of two stages – the Bolam test and the Bolitho addendum.

According to the Bolam test, laid down in the case of Bolam v Friern Hospital Management Committee [Bolam],6 the standard of care expected of a professional practicing a special skill is that of an “ordinary skilled man exercising and professing to have that special skill.”7 In medical negligence, the court assesses whether the doctor “acted in accordance with a practice accepted as proper by a responsible body medical men skilled in that particular art.”8 The presence of a body of opinion that takes a contrary view will not result in liability. Thus, even if the body of opinion that accepts the specific practice is in the minority, the doctor will not be found liable so long as they made use of a reasonable practice.

The test was developed in recognition of the fact that the courts are generally not well-placed to settle medical controversies. Given the diversity of reasonable views that may be held on a particular medical issue, it may be unfair for the courts to find a doctor liable for holding that view even if the view is subsequently found to be wrong. On the other hand, not every view can be found acceptable by the Court. Consequently, for a doctor to meet the standard of care and show that an ordinary skilled member of his profession would have acted in the same way, the test only requires that the doctor show that some other doctors would have acted in the same way.9

The Bolam test was later supplemented by the Bolitho addendum in the case of Bolitho v City & Hackney Health Authority [Bolitho].10 The addendum requires the expert medical opinion to pass a threshold test of logic; it is met if the medical experts who gave testimony have compared the risks and benefits and come to a defensible conclusion that fulfils a threshold of logic and consistency.

While the test was initially only applicable to diagnosis and treatment, it was subsequently extended to the disclosure of medical risks by the Court in Sidaway v Bethlem Royal Hospital Governors [Sidaway].11 The majority ruled that a decision to omit disclosing risks of medical treatment is, like treatment and diagnosis, an exercise of professional skill and judgement and should be determined through the Bolam test.

However, the blanket application of the Bolam-Bolitho test to all aspects of medical treatment was a controversial decision for its promotion of medical paternalism.

Notably, the UK Supreme Court, in the case of Montgomery v Lanarkshire Health Board [Montgomery],12 introduced a new test that overruled Sidaway’s application of the Bolam-Bolitho test in the context of medical advice. A doctor must disclose material risks as well as reasonable alternatives to the recommended treatment. Material risks are defined as those which a reasonable person in the patient’s position would likely find significant, or that the doctor should reasonably aware that the patient would find significant.13

This change came in reaction to developments in how the medical profession and society viewed the doctor-patient relationship. The Court noted that the General Medical Council viewed the informed involvement of patients as an integral aspect of professionalism in treatment.14 Another important social development considered by the Court was the recognition of the right to respect of private life by the European Convention on Human Rights. This was deemed by the European Court of Human Rights to give rise to a duty to involve the patient in decisions relating to their treatment.15

Other jurisdictions such as Australia16 and Malaysia17 have also adopted a ‘prudent patient’ approach to risk disclosure.

III. THE MODIFIED MONTGOMERY TEST

In Hii Chii Kok, the Court of Appeal recognised the need to distinguish between the various aspects of medical treatment to align the law with societal developments. While the Court recognised the difficulty in rigidly distinguishing between the three aspects of medical practice, it stated that it would be artificial to treat them as monolithic and capable of being assessed with reference to a single test.18

The Bolam-Bolitho test was retained for diagnosis and treatment. Here, the patient is a passive participant that provides information and received treatment in accordance with the directions of the doctor.19 The test is suited for these aspects as it recognises that doctors possess expert knowledge on medical matters. A doctor is ultimately in charge of making the diagnosis and treatment. The acts of diagnosing illness and providing treatment are considered to be an exercise of professional skill and judgment. This is because a wide variety of factors – advancing medical knowledge, the doctor’s personal experience and patient-specific information – may lead to disagreements over the appropriate result or treatment. In such situations, it may be reasonable for a doctor to recommend a particular diagnosis or treatment. As previously mentioned, it is not appropriate for the Court to attempt to settle medical controversies and decide that one particular view is correct. The better approach in determining whether a doctor meets the professional standard of care, as seen in the continued application of the Bolam-Bolitho test for diagnosis and treatment, is to examine whether their professional judgment was supported by a responsible body of opinion.

However, the Court recognised that in the context of medical advice, both the medical profession and society in general now perceive patients as active participants engaged in a dialogue with their doctors. Unlike the aspects of diagnosis and treatment, where the doctor is in charge, the decision to undergo treatment is ultimately made by the patient. As their decision can be informed by circumstances, objectives and values beyond purely medical considerations,20 the patient must have all the information they would reasonably require to make such decisions.

Referencing the reasoning in Montgomery, the Court noted that similar developments had occurred in the perception of medical advice by the medical industry and public. It relied on the Singapore Medical Council’s Ethical Code and Ethical Guidelines (2016 Edition) [ECEG] to show this change. The ECEG states that patients are now more knowledgeable about medical issues and want their doctors to provide sufficient information to allow them to make informed decisions.21 Consequently, it encourages doctors to respect patient autonomy and facilitate their decision-making by ensuring they are advised of the benefits and risks involved.22 The guidelines were recognised by the Court as an indication of the new perspective that both society and the medical industry have adopted with regard to medical advice. This gave rise to the impetus to adjust the applicable test to better reflect the values of society and the medical industry.

The Bolam-Bolitho test, applied to medical advice, would allow a doctor to withhold information so long as some of his peers would have acted similarly. This conflicts with the patient’s entitlement to make decisions and created the need for a new test to account for the patient’s perspective. For these reasons, the Court departed from the Bolam-Bolitho test as adopted in Gunapathy and established the new patient-centric three stage test to determine whether a doctor meets the applicable standard of care when dispensing medical advice.

At the first stage, the patient must identify the exact nature of the information that he alleges was not given to him and establish why it would be regarded as relevant and material. This assessment is made from the perspective of the patient. The Court stated that information which doctors ought to disclose is information that would be relevant and material to a reasonable patient situated in the particular patient’s position, or information that a doctor knows is important to the particular patient in question.23

The second stage inquires whether the doctor was in possession of that information.24 If the doctor was not aware of the information, the court returns to the Bolam-Bolitho test to assess whether the doctor was negligent in diagnosis or treatment.25

If the doctor was in possession of the information, the third stage of the test examines the reasons why the doctor chose to withhold the information from the patient. The court will assess whether the doctor’s reasons for withholding the information were justified and consider whether this was a sound judgment, having regard to the standards of a reasonable and competent doctor.26 The burden is on the doctor to justify the non-disclosure and the testimony of medical experts on reasons to withhold information will assume more significance because the decision includes an element of professional judgment.27 Examples of situations where a doctor may be justified in withholding information include a patient waiving their right to receive further information, emergency treatment or exercise of therapeutic privilege by the doctor.28

IV. HII CHII KOK'S MODIFICATIONS TO THE MONTGOMERY TEST

While the Montgomery test and the Modified Montgomery test are broadly similar, there are a number of key differences that distinguish the two.

A. Disclosure of Relevant and Material Information

While the scope of material information under the Modified Montgomery test appears to be great, the Montgomery test and the first stage of the Hii Chii Kok formulation are likely to be substantially similar in practice.

The Hii Chii Kok formulation focuses its discussion of risk along the lines of likelihood and severity. A remote risk with minor consequences is unlikely to be considered material, while a likely risk with severe consequences is likely to be considered material. The Court also stressed that a severe consequence with a very low probability of eventuating may not necessarily need to be disclosed.29

Next, the Hii Chii Kok formulation does not restrict material and relevant information to material risks involved in recommended treatment as well as reasonable alternative treatments.30 Despite this apparent increase in scope under the Hii Chii Kok formulation, it is submitted that the Montgomery test can be interpreted broadly to encompass much of what Singaporean courts would consider material and relevant information.

Referencing the Canadian case of Dickson v Pinder,31 the Court in Hii Chii Kok gave several examples of information that would likely be considered material: the doctor’s diagnosis of the patient’s condition, the prognosis of that condition with and without medical treatment, the nature of the proposed medical treatment, the risks associated with the proposed medical treatment and the alternatives to the proposed medical treatment as well as the advantages and risks of those alternatives.32

These are notably very similar to the characterisation of risk in Montgomery. In the UK, the materiality of a risk is determined by assessing its magnitude, nature, effect upon the life of the patient, importance of the benefit sought by the treatment, the alternatives and risks of alternatives.33 As a result, it is unlikely that information provided by doctors in the two jurisdictions will drastically differ in practice.

B. Inclusion of Second Stage of Test

The second stage of Hii Chii Kok’s formulation requires that the doctor actually possess the information that the patient alleges was not given.34 Although not expressly provided for in Montgomery, it is submitted that the doctor actually having the information is a logical and implicit requirement. The courts are unlikely to penalise a doctor for failing to advise if the information in question was not available. Nonetheless, the discussion of the second stage in Hii Chii Kok is noteworthy for highlighting that the doctor lacking information primarily a problem of diagnosis and treatment. These are aspects best handled by the Bolam-Bolitho test.

C. Exceptions to Test

In Montgomery, the Court discussed a number of exceptions to the test. A doctor will be entitled to withhold information if its disclosure would be seriously detrimental to the patient’s health and in situations of necessity.35

Hii Chii Kok deliberately avoided closing off the list of exceptions. The Court is only to assess whether the doctor’s conduct was justified in the circumstances. However, the Court indicated that situations involving waiver of the right to receive further information, emergencies and exercises of therapeutic privilege would likely justify a doctor’s conduct.36

V. COMMENTARY

It is submitted that the Hii Chii Kok formulation is a commendable refinement of local law that effectively deals with some of the criticisms levelled at Montgomery. It also presents the possibility of development of the law in a non-medical context.

A. The Modified Montgomery Test and Patient Autonomy

The Modified Montgomery test is an unequivocal recognition of the importance of patient autonomy by the courts. However, while the concept of patient autonomy was the driver of change in both the medical industry and the courts, the court did not explore the content of this concept in great detail.

Future cases will inevitably grapple with the problem of what and how much information is relevant and material to the patient. The answers to these questions may very well be grounded in how patient autonomy comes to be understood in Singapore.

The Court has recently discussed the concept of autonomy in ACB v Thomson Medical Pte Ltd.37 Two main concepts of autonomy were offered. The first places prominence on the patient having the freedom to choose, even if the choice may be considered detrimental or irrational. The second argues that the concept of autonomy should facilitate both the current as well as long term desires of the patient. The focus shifts from the patient having a choice to the patient making a good quality choice that best account for their desires in life as a whole.

These two concepts of autonomy have significant implications on the nature of the standard of care. It may be sufficient for a doctor to provide only enough information for the patient to make a decision about the medical issue at hand. However, a more expansive conception of autonomy may require the doctor to go significantly beyond the current medical issue and consider the long-term well-being of the patient.

It is presently unclear how future courts will resolve the problem of autonomy as it relates to medical advice. This is likely to give rise to some confusion and uncertainty in the short term. Future cases will be invaluable in shedding light on how far doctors should go to respect patient autonomy in a post-Hii Chii Kok Singapore. It may well be that this problem will prove to be more theoretical than real.

B. Defensive Practice

With the present uncertainty over the nature of the doctor’s duty to advise and the removal of the protection that the Bolam-Bolitho test afforded medical practitioners, a principal concern from the shift towards a patient-centric approach is how doctors will react to the change in the law. Montgomery has been questioned for raising the likelihood of defensive practice.38 This refers to doctors advising and undertaking the treatment believed to be legally safe.39 Examples include inundating patients with information to ensure the legal boxes are ticked and to maximise the likelihood of patient comprehension.

However, the doctor is expected to take reasonable care to ensure the patient understands the information. It bears noting that the duty is only that of reasonable care; doctors are not expected to meet unrealistic standards of behaviour by ensuring complete comprehension. Additionally, the doctor must ensure the provision of information is balanced with proper communication of said information such that the patient is able to understand the advice.40 The Court also noted that concerns raised in Gunapathy about defensive practice mainly concerned the aspects of diagnosis and treatment rather than the provision of advice.41

It is submitted that such concerns may be overstated. While there was no legal necessity for a doctor to take the steps laid out in the Modified Montgomery test, the ECEG has already recognised the importance of patient autonomy and encouraged doctors to facilitate informed decisions. The practice of providing sufficient information for patients to make an informed decision is one that doctors should not be unfamiliar with. The Modified Montgomery test should not result in drastic shifts in behaviour to compensate for concerns that the advice is deficient.

C. Increased Litigation

On the flipside, the removal of the protection afforded to doctors by the Bolam-Bolitho test may also lead to an increase in medical litigation, which would drive up medical insurance and healthcare costs. Patients may be more likely to commence litigation if they believe they are more likely to win under the new test.

A useful indicator of the likelihood of increased litigation would be to examine other jurisdictions which have adopted similar tests. While it may be too soon to decide if Montgomery has resulted in a significant increase in litigation in the UK, Australia has not experienced the dreaded flood of litigation in the wake of Rogers v Whitaker. Litigation on disclosure of medical risks has been rare and generally involved factual disagreement over what was disclosed rather than the more contentious issue of whether a risk should have been disclosed.42

The Court in Hii Chii Kok noted that many of the primary drivers of increased litigation, such as contingency fees, are not present in Singapore. It stated that this would ameliorate concerns about the Modified Montgomery test, on its own, opening the floodgates to litigation. Additionally, it rightly noted that a possibility of increased litigation should not shut out legal reform.43 However, it is submitted that the perception of decreased protection of medical practitioners may, rightly or wrongly, still drive litigants to make claims where they might not have done so under Gunapathy. While this may not represent the drastic increase in litigation that the concern was concerned about, a gradual uptick in litigation and by extension, malpractice insurance costs may be an unfortunate result of the new paradigm. This may be exacerbated in the future if the patient-centric approach does in fact result in more successful claims.

D. Impact of Hii Chii Kok on other areas of professional negligence

Looking to the future, it is possible that Hii Chii Kok may lead to development of the law in other areas of professional negligence. While it remains to be seen how the courts in Singapore will react to the principles established in Hii Chii Kok when applied to other professions, there is some precedent to suggest that the scope of the Bolam-Bolitho test may be further circumscribed.

The UK case of O'Hare v Coutts & Co [O’Hare]44 recently considered Montgomery’s approach to medical advice while assessing whether an investment advisor was negligent in explaining risks to the defendant bank. The Court ruled that an investment advisor’s duty to communicate the risks and ensure his client understood said risks should be governed by the Montgomery test instead of the Bolam test.45 This is because the finance industry does not presently have clear guidelines for investment advisors and their treatment of risk management. Finance industry regulations, analogous to those in the medical industry, also encourage advisors to act in a manner close to the approach prescribed in Montgomery. This led to the Montgomery test being preferred over the Bolam-Bolitho test. While O’Hare does not indicate a wholesale rejection of the Bolam-Bolitho test – an approach rejected in Hii Chii Kok46 – it indicates that the scope of the Bolam-Bolitho test may be further eroded in areas of professional negligence where the victim needs to make a decision based on expert advice.

VI. CONCLUSION

While courts are generally slow to depart from established local precedent, the judgment in Hii Chii Kok was a necessary refinement to bring Singaporean law in line with the values of its people. It is a timely reminder that the law, far from being static, is a reflection of the values and beliefs of Singaporeans that must adapt to grapple with the new legal challenges created by a constantly developing society.


[1] [2017] SGCA 38.

[2] Ibid at [95] – [98].

[3] Ibid at [98].

[4] [2002] 1 SLR(R) 1024.

[5] Supra note 1 at [54].

[6] [1957] 1 WLR 582.

[7] Ibid at 586.

[8] Ibid at 587.

[9] Ibid at [56].

[10] [1998] AC 232.

[11] [1985] AC 871.

[12] [2015] UKSC 11.

[13] Ibid at [87].

[14] Ibid at [78].

[15] Ibid at [80].

[16] Rogers v Whitaker (1992) 175 CLR 479.

[17] Foo Fio Na v Dr Soo Fook Mun & Anor [2007] 1 MLJ 593.

[18] Supra note 1 [2017] SGCA 38 at [90].

[19] Supra note 1 at [96], [98].

[20] Supra note 1 at [117].

[21] Ibid at [118].

[22] Ibid at [118].

[23] Ibid at [132], [137].

[24] Ibid at [147].

[25] Ibid at [147].

[26] Ibid at [148].

[27] Ibid at [149].

[28] Ibid at [150]-[152].

[29] Supra note 1 at [140], [141].

[30] Ibid at [132].

[31] [2010] ABQB 269.

[32] Supra note 1 at [138].

[33] Supra note 12 at [87].

[34] Ibid at [147].

[35] Supra note 12 at [88].

[36] Supra note 1 at [149].

[37] [2017] SGCA 20.

[38] Tracey Elliott, ‘A Break with the Past? Or More of the Same? Montgomery v Lanarkshire Health Board’ (2015) 31 Professional Negligence 190.

[39] Supra note 1 at [84].

[40] Ibid at [154]-[156].

[41] Ibid at [87].

[42] Bismark et al., ‘Legal Disputes over Duties to Disclose Treatment Risks to Patients: A Review of Negligence Claims and Complaints in Australia’, online: (2012) PLoS Med 9(8): e1001283 <https://doi.org/10.1371/journal.pmed.1001283>.

[43] Ibid at [84]-[86].

[44] [2016] EWHC 2224.

[45] Ibid at [199]-[214].

[46] Ibid at [83].


A PDF version of this entry is available for download here.

War Crimes Trials Articles exhibited at National Gallery Singapore

War Crimes Trials Articles exhibited at National Gallery Singapore

Two of the Singapore Law Review’s articles are being displayed at Listening to Architecture: The Gallery’s Histories and Transformations, an ongoing exhibition at National Gallery Singapore. These articles discuss the Singapore War Crimes Trials at length. The trials were an epochal moment in Singapore’s history, where justice and accountability was served following the numerous atrocities committed during the Second World War. This special feature will provide essential information for anyone who wishes to familiarise himself with the war crimes trials and their continued relevance today.

Good Faith in Contractual Agreements in Singapore

by Glen Ting

I. NO IMPLIED DUTY OF GOOD FAITH IN LAW

In Ng Giap Hon v Westcomb Securities Pte Ltd [Ng Giap Hon],1 the Court of Appeal firmly established that it would not endorse an implied duty of good faith as a matter of law in the context of contractual performance.

The primary reason for the Court’s rejection of the doctrine of good faith in the practical sphere stems from its fear of uncertainty surrounding the theoretical foundations of the doctrine.2 The Court perceived the doctrine as a fledgling one in English and Singaporean contract law, and highlighted the relative dearth of case law coupled with an abundance of academic literature which suggest that the doctrine is far from settled.3

As noted in Ng Giap Hon, there is still no consensus on the definition of good faith. One of the proposed definitions is the “excluder thesis” which regards good faith as the exclusion of bad faith.4 Other definitions propound that good faith imports concepts like honesty, reasonableness, “fair and open dealing”, and/or “fidelity to the bargain”.5 Opponents of the good faith doctrine have cited the uncertainty over the definition of good faith as a reason for rejecting the doctrine so as to preserve predictability for the facilitation of business transactions.

The uncertainty surrounding the doctrine is also evident in other jurisdictions. For instance, the Court has mentioned that “the situation in the Australian context is, at best, ambiguous”.6 Even in America – where good faith is established as an implied covenant under the Uniform Commercial Code – there is the view that the doctrine is currently in a state of flux.7

Dissidents have also rejected the doctrine for its inconsistency with the widely held perspective of contract as a “vehicle for self-interested exchange” for the individual. This perspective arises from a capitalist view of the world in which contracts are formed solely for the purpose of profit maximisation. The doctrine of good faith is antithetical to such an economic view because it would constrain an individual and require him to consider the interests of the other party.8 This criticism of the doctrine of good faith was also recognised by the House of Lords in Walford v Miles [Walford],9 where Lord Ackner stated that the duty of good faith is “inherently repugnant to the adversarial position of the parties involved in negotiations” as each party should be entitled to pursue his own interest.10

II. IS THE DOCTRINE REALLY THAT NOVEL AND UNCERTAIN?

The doctrine of good faith should not be perceived as a novel one as many distinct solutions that have been developed to deal with problems of unfairness are fundamentally built on the concept of good faith. These solutions include well-established contractual principles such as undue influence, promissory estoppel, specific performance and injunction.11 Essentially, the doctrine of good faith has actually long been utilised to deter parties from engaging in bad faith conduct, even though it has not been recognized as a general principle. Indeed, the existence of these tools have led proponents to suggest that the common law is already poised to recognise a general principle of good faith.12

This notion is further reinforced by Professor McKendrick who stated that most rules of English contract law “conform with the requirements of good faith and cases which are not dealt with in other systems under the rubric of good faith and fair dealing are analysed and resolved in a different way by the English courts, but the outcome is very often the same.”13

With respect to the ongoing debate over the definition of good faith, the lack of consensus should not prevent local courts from recognizing a general principle of good faith. Courts have managed to embrace and apply legal tools similarly imbued with imprecision – such as the concept of “reasonableness” in the law of negligence – without undue difficulty.14

Seen from this perspective, the content of the good faith doctrine might not be as elusive or uncertain as the courts appear to suggest. After all, the essence of good faith has already been embedded in many long-standing legal principles that have been consistently applied in the practical sphere.

III. FREEDOM TO ADVANCE SELF-INTEREST IS NOT AN ABSOLUTE ONE

One of the main criticisms against recognition of a general duty of good faith is its inconsistency with the advancement of self-interest inherent in contract law. However, cooperation between parties to implement a contract is similarly fundamental in this area of law.15 It has been established that the utility of contractual agreements for the advancement of self-interest comes attached with the condition that parties should not engage in conduct with bad faith. This is evinced by the necessity for principles such as misrepresentation and undue influence which are primarily developed to mitigate problems of unfairness arising from undesirable conduct. Hence, the advancement of self-interest and the concept of good faith should not be regarded as antithetical to each other as contracting parties would still be entitled to serve their self-interests as long as they do not engage in bad faith conduct and undermine the common purpose of the bargain that they have entered into.

It should also be noted that Lord Ackner’s dictum in Walford16 regarding the inconsistency of the good faith doctrine with the advancement of self-interest was set in the context of pre-contractual negotiations and not performance of the contract. It has been argued that Lord Ackner’s prohibition of the doctrine does not necessarily extend to the way in which a contract should be performed as it is “important to retain a clear analytical differentiation between contract performance and contract formation”. Pre-contractual good faith should not serve as a basis for the rejection of the general concept of good faith.17

IV. EXPRESS 'NEGOTIATE IN GOOD FAITH' CLAUSES

Although there is no general good faith duty governing contractual agreements in Singapore, in the recent Court of Appeal case of HSBC Institutional Trust Services Ltd v Toshin Development Singapore Pte Ltd [Toshin], it was stated that an express agreement to “negotiate in good faith” could be enforceable.18 The Court in Toshin supported its holding by noting that such ‘negotiate in good faith’ clauses are in the public interest as they promote the consensual disposition of any potential disputes. The Court then went on to elaborate that such good faith provisions are “consistent with our cultural value of promoting consensus whenever possible”.19 It was also noted in Toshin that the concept of good faith, at its core, encompasses the requirements of honesty and observance of accepted commercial standards of fair dealing.20

It is arguable that the reasons provided in Toshin to render clauses to negotiate in good faith similarly support agreements to perform contracts in good faith. Like the former, obligations to perform contracts honestly and fairly would also go a long way towards preserving consensus and cooperation between the parties. This is ultimately more conducive for public and commercial interests, as opposed to a categorical rejection of the doctrine of good faith. Taking this argument even further, these same reasons also reinforce the argument for an implication of a general good faith obligation in all contracts.21 Furthermore, with respect to the English jurisdiction, it has already been noted that “there are signs that the traditional English hostility towards a requirement of good faith might be abating”.22

V. CONCLUSION

There is substantial impetus for Singapore in recognizing good faith as a general principle in contract law as many major economies such as the USA, China and Japan have already done so. Acknowledgement of the general principle of good faith would help align the local jurisdiction with that of the major economies and render the nation more accessible and commercially attractive to investors.23

The concept of good faith is coherent with the fundamental objective of contract law which aims to “protect the reasonable expectations of honest men”.24 In order to achieve this purpose, essential virtues such as honesty, rationality and fidelity to the bargain must be upheld. Indeed, it has been stated that it is difficult to see how contracts could be agreed in the absence of mutual trust and sincerity.25 The uncertainty of the doctrine and its alleged inconsistency with fundamental interests protected in contract law should not be overstated. Instead, a thorough re-analysis of the viability and necessity of good faith would be appropriate in light of growing recognition of the role that good faith plays in ensuring that contractual powers are not exercised for improper purposes.26


[1] [2009] 3 SLR(R) 518; [2009] SGCA 19.

[2] Ibid at [60].

[3] Ibid at [51].

[4] Robert S. Summers, “Good Faith in General Contract Law and the Sales Provisions of the Uniform Commercial Code” (1968) 54:2 Va. L. Rev. 195.

[5] Colin Lew, “A Leap of Good Faith” [2012] 2 SJLS 416 at 418.

[6] Supra note 1 at [56].

[7] Howard O Hunger, “The Growing Uncertainty about Good Faith in American Contract Law” (2004) 20:1 JCL 50; Ng Giap Hon at [57].

[8] Matthew Harper, “The Implied Duty of ‘Good Faith’ in Australian Contract Law” (2004) 11:3 MurUEJL 22.

[9] [1992] 2 AC 128.

[10] Supra note 1 at [55].

[11] Zimmermann & Whitaker, ‘Good Faith in European Contract Law’ (United Kingdom: Cambridge University Press, 2000).

[12] Supra note 5 at p 421.

[13] McKendrick, “Good Faith: A Matter of Principle” in Forte, A.D.M., ed, Good Faith in Contract and Property (Oxford and Portland, Oregon, 1999) at 41.

[14] Supra note 5 at p 419.

[15] HSBC Institutional Trust Services Ltd v Toshin Development Singapore Pte Ltd [2012] 4 SLR 738 at [39].

[16] Supra note 8.

[17] V Sims, “Good Faith in English Contract Law: Of Triggers and Concentric Circles” (2004) 1:2 Ankara L.Rev. (Winter) 213 at 217.

[18] [2012] 4 SLR 738; [2012] SGCA 48 at [40], [42].

[19] Ibid at [41].

[20] Ibid at [45].

[21] Supra note 5 at p 439.

[22] Ewan McKendrick, Contract Law, 7th Ed (United Kingdom: Oxford University Press, 2016) at p 265.

[23] Lee Shen Yang, “A Look at ‘Good Faith’ in the Common Law” [unpublished, archived at CJ Koh Law Library] at p 12.

[24] Chwee Kin Keong v Digilandmall.com Pte Ltd [2004] SGHC 71 at [151].

[25] Supra note 5 at p 440.

[26] Ibid at p 440.


The PDF version of this entry can be found here.

An Analysis of Genetic Affinity as an Actionable Head of Damages – ACB v Thomson Medical Pte Ltd

by Suresh Viswanath

I. INTRODUCTION

In the recent case of ACB v Thomson Medical Pte Ltd [ACB]1, the Singapore Court of Appeal recognised a new head of damages for parents of children born out of medical negligence – that of “genetic affinity”.2 This article seeks to summarise the case for recognising genetic affinity as an actionable head of damages, and discuss some potential objections to this recognition.

II. BACKGROUND

A. Facts

The appellant underwent an in-vitro fertilisation (“IVF”) procedure and delivered a daughter (“Baby P”). Baby P’s skin colour was noticeably different from that of her parents. It was subsequently discovered that the appellant’s ovum had been fertilised with sperm from an unknown third party, instead of sperm from her husband. The appellant brought a suit in the tort of negligence and for breach of contract, and sought damages for, inter alia, the full costs of raising the child (“upkeep costs”).3

B. Decision on upkeep costs and loss of autonomy

The Court of Appeal did not allow recovery of upkeep costs4 because:

  1. The obligation to maintain one’s child is at the heart of parenthood. Parenthood is a relationship that is intrinsically incapable of valuation, and therefore its obligations cannot be a legally recognised head of damage.5
  2. It would be inconsistent with the nature of the parent-child relationship; parents’ personal interests as litigants would conflict with their duties as parents since they would be encouraged to show that their child is a “net loss” by exaggerating their infirmities and downplaying any benefits.6 A loving parent would therefore receive less in damages than a parent willing to “disparage and reject [his or her] child”.7

The court also rejected recovery for “loss of autonomy” because:

  1. The concept of “autonomy” is nebulous;8 some conceptions of autonomy only take into account an individual’s current desires, some additionally take into account their long-term desires, and others consider the importance of social relations in accounting for “autonomy”.9
  2. Damages for loss of autonomy would be vindicatory, rather than compensatory; damages could be awarded even if the defendant's act made a plaintiff better off. This would be incoherent with the compensatory concept of damage in the tort of negligence.10
  3. It would be over-inclusive, since any form of damage can “be reconceptualised in terms of a damage to autonomy”.11 This undermines “control mechanisms which keep recovery in the tort of negligence within sensible bounds”.12

However, the court was prepared to award damages for loss of “genetic affinity”.13 On the facts of ACB, the court quantified this loss as 30% of the full cost of raising Baby P.14

C. “Genetic affinity”

The court began from the premise that a person’s desire to have a child of their own (with their spouse) is a basic human impulse.15 In the “ordinary human experience”, parents and children are related by blood and share physical traits.16

Such blood relations are often significant to parents for several reasons. Firstly, parents may want children who are the literal physical manifestation of their parental union.17 Secondly, common traits may, for some, play a part in forging an emotional bond between parent and child.18 Thirdly, shared ancestry and genetic continuity can be important to religious and cultural belonging19 – for instance, there are often adverse social implications when a child has a different skin tone from their parents.20 These interests can be collectively referred to as “genetic affinity”.

The court was clear that it was not making a prescriptive definition of what a family should be or denigrating adoption.21 However, since the vast majority of people are biologically related to their families, there is a widely shared social construction of what a family is. Despite the fact that participation in different socially constructed units (families that do not share physical traits) may be rewarding, it might not provide the experience of blood relations that many people seek and value.22 People who undergo IVF treatment often do so at great difficulty and expense due to a conscious desire go through this “ordinary” experience of parenthood. In the court’s view, being denied this experience due to others’ negligence constituted a profound loss.23

III. DISCUSSION ON GENETIC AFFINITY

This author submits that the court’s decision on genetic affinity is to be welcomed for pinpointing the true loss suffered by the appellant, in the process recognising a head of loss unprecedented in any jurisdiction. This enabled the court to avoid an outcome which “most non-lawyers would doubtless find rather surprising”24 without having to ignore the concerns raised here and elsewhere25 regarding an award for upkeep costs or loss of autonomy. However, some objections have been raised26 as regards the recognition of an interest in genetic affinity.27 This section seeks to discuss these objections and highlight possible responses to them.

A. Issues related to discrimination

Firstly, it could be argued that an interest in “affinity” is inherently discriminatory. Although parents might possess an interest in having children with whom they share traits, the kind of traits they value often include things like physical appearance (such as skin colour). These are the very traits that modern society regards as illegitimate grounds for discrimination.28

This problem can be dealt with by drawing a distinction between discrimination in the public sphere and discrimination in private decisions about kinship and reproduction.29 The former usually has no legitimate purpose, and is motivated either by hostility to people who possess certain traits, or mistakenly uses these traits as a proxy for other qualities. On the other hand, choices motivated by affinity tend to emphasise symbolic traits which are significant due to their role in personal and social identity. They are not motivated by hostility towards people who do or do not possess such traits; rather, they merely celebrate characteristics that reinforce a sense of group identity. Neither are they proxies for any quality apart from membership of that group.30 Therefore, discrimination in decisions related to offspring appear not to be illegitimate in the way that discrimination is in the public sphere.

B. The importance of genes

A second argument questions the significance of genes in determining traits. Recognition of affinity as an actionable form of damage is premised on the idea that genes do, in fact, determine traits – however, some scientists have opined that the role of genes in determining traits is exaggerated and frequently misunderstood (this is essentially the age-old “nature vs nurture” debate).31

Nevertheless, even the strongest critics of genetic determinism concede that genes do play some role in determining personal identity, however small this may be. This is especially so for aesthetic traits, which are usually the ones emphasised by parents with an interest in affinity.32

It is also important to be clear that damages for affinity are not being awarded on the basis that one set of genes are somehow “less desirable” than another – rather, they are being awarded because the genes of the child are not similar to those of the parents.33

This is especially relevant in cases where a parent is having a child with a donated egg or sperm, rather than with one from their own spouse. In such cases, parents’ genetic choices sometimes stem not from a desire to have a child in their own image through common symbolic traits (affinity interests), but from a desire to impart functionally desirable traits to their children (eugenic interests). For example, the practise of advertising for egg donors in prestigious universities suggests that some parents seek children of high intelligence.34 If a parent seeks to impart in their children traits which they themselves lack, they are motivated by eugenic rather than affinity interests – their claim should not be allowed.

In any case, a claim for affinity seems unlikely to succeed in cases involving donated sperms or eggs, even where a mix-up affects symbolic rather than functional traits. In the Northern Ireland Court of Appeal decision of A and B by C (their mother and next friend) v A – Health and Social Services Trust (“A and B”)35, a mix-up in donated sperms caused the appellants (the children) to be born with a different skin colour from their parents.36 The Court of Appeal in ACB agreed with the decision in A and B that a difference in skin colour could not constitute an actionable form of damage.37 It should, however, be noted that this was a case where the children (rather than the parents) brought a suit; genetic affinity, as recognised in ACB, is a parental interest.38 Also, the court in ACB felt that the decision in A and B failed to consider the true harm – the lack of physical resemblance to parents – suffered by the appellants.39

Additionally, it is worth noting that in addition to the mother, her husband (the legal father) could also be eligible for an award for genetic affinity, especially since (unlike the mother) he has no genetic connection with the child.40

C. Quantification of damages

Thirdly, there are difficulties with the way the Court of Appeal chose to quantify the damages in ACB by benchmarking them against upkeep costs. The first issue here is that this results in the same policy objections that led to the Court of Appeal rejecting an award for upkeep costs; parents would be incentivised to exaggerate detriments and downplay any benefits gained from their children.41 The second issue is that benchmarking damages against upkeep costs is arguably incoherent with the nature of the damages being awarded; it is not clear how a percentage of a pecuniary award for upkeep costs takes into account the particular non-pecuniary harms suffered by the appellant due to loss of genetic affinity.42

Quantification of genetic affinity is undoubtedly difficult; the court accepted that its solution was not theoretically elegant, but stated that an elegant solution which attempted to quantify the appellant's actual losses would require it to engage in complex and controversial issues43 (some of which could be racially sensitive44). One alternative, proposed by a case comment that raised the above concerns, is to set a uniform award through parliamentary intervention, with the amount determined by consultation and studies.45 Being uniform, such an award would not compensate a particular plaintiff for the particular harms suffered. However, the authors of the case comment argue that a loss of genetic affinity is "abstractly incalculable" and that value judgments should not be made that genetic affinity is more important to some parents than others.47

D. Harm to children

Additionally, allowing an action for genetic affinity may cause psychological harm to a child – the litigation involved may make them feel that their parents do not value them, and that they are less desirable than a child with the parents' own genes.48 Similar arguments have been made against an award of upkeep costs both in Singapore and in other jurisdictions.49 The High Court of Australia in Cattanach v Melchior50 dismissed this argument; it held that in addition to being speculative (the harm caused to the child is uncertain, and children may discover the truth of their birth regardless of any litigation or lack thereof), there are also "many harsher truths which children have to confront in growing up than the knowledge that they were not, at the moment of their conception, wanted”.51 The court in ACB seemed to agree with the High Court of Australia on this point, giving the concern little weight with regard to upkeep costs.52

IV. CONCLUSION

The facts of ACB were tragic, and the legal issues complex; the case was described by the Court of Appeal as "possibly one of the most difficult" to come before it.53 As unfortunate as the circumstances were, it is probably not the last time that courts will have to deal with such issues, especially given the rising number of people relying on IVF to have children.54 In light of this, the decision on genetic affinity is extremely significant as it provides a substantial remedy for parents in cases of wrongful fertilisation.


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

[2] Ibid at [135].

[3] Ibid at [3].

[4] Ibid at [86].

[5] Ibid at [87]–[94].

[6] Ibid at [95].

[7] Ibid at [99].

[8] Ibid at [115].

[9] Ibid at [116]–[118].

[10] Ibid at [120]–[121].

[11] Ibid at [123].

[12] Ibid at [115].

[13] Ibid at [135].

[14] Ibid at [150].

[15] Ibid at [127].

[16] Ibid at [128].

[17] Fred Norton, “Assisted Reproduction and the Frustration of Genetic Affinity: Interest, Injury, and Damages” (1999) 74 NYU L Rev 793 at 798.

[18] Supra note 1 at [128].

[19] Ibid at [128].

[20] Ibid at [131].

[21] Ibid at [129].

[22] Ibid at [129].

[23] Ibid at [129].

[24] Margaret Fordham, “An IVF Baby and a Catastrophic Error - Actions for Wrongful Conception and Wrongful Birth Revisited in Singapore” [2015] Sing JLS 232 at 240.

[25] Supra note 1 at [61]–[66].

[26] Supra note 17 at 810–818.

[27] Hairul Hakkim and Kevin Ho Hin Tat, “Genetic affinity as a novel remedy for wrongful fertilisation – a case of assessing the incalculable?”  (9 April 2017), Singapore Law Blog (blog) online: <(http://www.singaporelawblog.sg/blog/article/182>.

[28] Supra note 17 at 810–811.

[29] Ibid at 810.

[30] Ibid at 811.

[31] Ibid at 812–813.

[32] Ibid at 813.

[33] Ibid at 814.

[34] Ibid at 814.

[35] [2011] NICA 28.

[36] Supra note 1 at [132].

[37] Ibid at [133].

[38] Ibid at [135].

[39] Ibid at [133]–[134].

[40] K.C. Vijayan, “New award for loss of genetic affinity a gain for IVF law”, The Straits Times (11 April 2017), online: <http://www.straitstimes.com/opinion/new-award-for-loss-of-genetic-affinity-a-gain-for-ivf-law>.

[41] Supra note 27.

[42] Ibid.

[43] Supra note 1 at [149].

[44] Supra note 27.

[45] Ibid.

[46] Ibid.

[47] Supra note 17 at 816–817.

[48] ACB v Thomson Medical Pte Ltd, [2015] SGHC 9, [2015] 2 SLR 218 at [16].

[49] McFarlane and Another v Tayside Health Board, [1999] UKHL 50, [2000] 2 AC 59 at 69D.

[50] (2003) 199 ALR 131.

[51] Supra note 1 at [77].

[52] Ibid at [83].

[53] Ibid at [210].

[54] Human Fertilisation & Embryology Authority, "Fertility treatment 2014: Trends and figures" (2016) at 49.


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Analysing the Need for Age Distinctions in Law

by Liew Jin Xuan

I. INTRODUCTION

In law, there are four main considerations taken into account by the Court when sentencing: retribution (or, more aptly, the punishment needing to fit the crime), deterrence, protection of the public, and rehabilitation. The weight accorded to each of these considerations varies with the age of the offender. Particularly for young offenders, the dominant consideration has been said to be rehabilitation.1 As explained by Yong CJ, the basis for this is that youths have supposedly better chances of reform in their formative years.2 A further consideration would be the aspect of culpability, which would fall under the retributive factor – impressionable teens may be “slightly less responsible than older offenders”.3

As a result, where youth and children are concerned, the law often adopts a more rehabilitative approach to sentencing. The law would look upon their mistakes more sympathetically,4 and this view that age is a measure of maturity is one adopted worldwide. While understandable, there are inherent flaws in such an approach. Firstly, it fails to consider instances where a person is a juvenile at the time of crime, but is past the age limit for juveniles at the time of trial. Secondly, the inconsistency of standards in law pertaining to what age limit to impose on each stage of maturity undermines the rationale behind prioritising rehabilitation for ‘minors’. Lastly, such a distinction acts as an overly blunt tool of justice and is, in fact, unnecessary.

II. DIFFERENTIATING BETWEEN THE TIME OF OFFENCE AND TIME OF TRIAL

In Singapore, a person can be considered a juvenile at the time of crime and yet still be held to the standard of an adult. As set out in the Children and Young Persons Act,5 age is calculated on the date when the Juvenile Court commences the hearing of the charge, not on the date when the offence was committed.6 The clearest manifestation of this would be that a 15-year-old can be charged in an adult Court instead of the Juvenile Courts if the case is not heard until he or she reaches 16 years of age.7 In effect, the rehabilitative consideration would be accorded lesser weight by the Courts if at the time of the trial, the person has grown past the age limit defining a ‘juvenile’.

If the law truly views the follies of youth more tolerantly as the young “don’t know any better”,8 it is incomprehensible why sentencing should focus on the time of the trial, merely because a person has ex post facto become older. It is precisely because the offence was committed when the juvenile was young and ignorant that the sentence should be lighter. This problem is exacerbated because of the possible time lapse between initiation of criminal charges and actual prosecution in Court.

III. ADULTHOOD VS. CHILDHOOD – INCONSISTENCY OF MEASUREMENT

Currently, inconsistencies between different Singapore statutes result in the odd outcome where a person can be both an adult and a child in the eyes of law.

For instance, the Children and Young Persons Act9 states that where a person is 16 or above at the time of trial, he or she is no longer under the jurisdiction of the Youth Court, and will be charged in the Subordinate Court like all adults. However, they are not yet considered adults according to the Civil Law Act,10 which states that a person must be at least 18 years of age before they can enter into a contract. As aptly explained in From Children to Citizens, “a 17-year-old may be treated as an adult on charges of committing a violent crime … but the same person could well be treated as a child for purposes of employment and other contractual relations, including marriage”.11

If the basis for prioritising rehabilitation in youth offender cases is because they are in their ‘formative’ years and vulnerable, this very basis is undermined by the varying standards held in general in law of how old, say, an ‘impressionistic teenager’ should be. The multiple standards suggest that even the law itself is confused as to the precise distinctions it should make between the age of a person who is still vulnerable and one who is already independent. One potential explanation for the plural standards in law could be that different concepts require different degrees of maturity to grasp. For instance, it is easier for the younger minds to understand that killing is wrong, but perhaps not why a marriage contract is more complicated than two people agreeing to live together. Yet if this is the true rationale, it would appear that the law is acting on the presumption of what a child can and cannot understand.

IV. CONCLUSION: AGE LIMIT AN OVERLY BLUNT TOOL

Ultimately, it would appear that the distinction between ages is a somewhat arbitrary distinction. Is a person who becomes 16 truly more mature than he was just one day prior?

Children under 7 years of age are immune from criminal liability.12 At 15, one gets charged in the juvenile court; turn 16, however, and the hearing commences in the subordinate court.

It is understandable that usage of age as a defining line roughly identifies those people who are deserving of a second chance. According to the Ministry of Social and Family Development, the recidivism rate of juveniles under rehabilitation schemes have been quite low – generally under 20% across the board – indicating its great success.13 Yet this gives the impression that law tends to judge the ‘worthiness’ of a person to whom a second chance would be provided based on his or her age and the correlated ‘probability’ of success.

Also, the current state of law provides discretionary powers both to deny rehabilitative approaches for young offenders14 and to grant probation to adult offenders. The use of age distinctions is hence not only unnecessary, but even encumbers judicial fairness. In PP v Muhammad Nuzaihan bin Kamal Luddin,15 the District Court merely sentenced the convict to 30 months’ probation. This was aptly reversed by Yong CJ upon appeal to reflect the seriousness of cyber-crime and Parliamentary intention to deter such behind the Computer Misuse Act.16 The method by which the Court reached its decision is one that should be widely adopted: rather than deciding solely based on age, each individual should be allowed rehabilitative approaches based on the overall merits of their case. Arbitrary age distinctions are unnecessary as sentences can be prudently determined without it. The age of the accused should only constitute one of several factors, and should vary in importance depending on the precise factual matrix. Indeed, it is noted that children between ages 7 and 12 are protected from criminal liability under s 83 of the Penal Code17 as long as they have not “attained sufficient maturity of understanding to judge of the nature and consequence of his conduct on that occasion”. In fact, it is proposed here that children should be protected only if they have not attained the requisite maturity as judged on a case-by-case basis.

The law is not a catch-all safety net: there are bound to be people who will fall through the cracks. The situation today continues to be flawed, but hopefully, things may just change for the better. The age distinction may arguably more practical than having to judge each case on a case-by-case basis, and it has been effective thus far. However, it is proposed that rather than having it written in the statute itself, age distinctions can simply serve as a useful guide in deciding the culpability of the offender, rather than usually acting as a free ticket to forgiveness for the ‘young’, and a bias against the ‘adult’ – who may just be a year apart.


[1] Public Prosecutor v Mok Yuen Ping Maurice [1998] 3 SLR(R) 439 at [21].

[2] Ibid.

[3] Ibid.

[4] Parliamentary Debates Singapore: Official Report, vol 87 at cols 2105-2106 (10 January 2011) (Minister for Community Development, Youth and Sports Dr Vivian Balakrishnan).

[5] Cap 38, 2001 Rev Ed Sing, s 33(6).

[6] (2010) 8:3 BJCJ 63 at 64.

[7] Ibid.

[8] Supra note 1.

[9] Supra note 5.

[10] Cap 43, 1999 Rev Ed Sing, s 35.

[11] Francis X. Hartmann, From Children to Citizens Volume II: The Role of the Juvenile Court, 1st ed (New York: Springer-Verlag, 1987) at 4.

[12] Penal Code (Cap 224, 2008 Rev Ed Sing), s 82.

[13] Ministry of Social and Family Development, “Juvenile Delinquents: Recidivism Rate” (14 April 2016), online: <https://www.msf.gov.sg/research-and-data/Research-and-Statistics/Pages/Juvenile-Delinquents-Recidivism-Rate.aspx>.

[14] PP v Muhammad Nuzaihan bin Kamal Luddin [1999] 3 SLR(R) 653 at [16].

[15] Supra note 14.

[16] Cap 50A, 1993 Ed.

[17] Cap 224, 2008 Rev Ed Sing.


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Obiter, Obiter, Obiter

by Lai Wei Kang, Louis

I. INTRODUCTION

One of the ways lawyers come into their own is by honing the distinction between the ratio decidendi and obiter dicta of cases. This distinction is taught since the beginning of their arduous journey in law school, yet emphasized throughout their career as one of paramount importance. Obiter in the courtroom is often relegated and back-benched; counsel may demonstrate his wealth of knowledge, but succeeds only by distilling and employing ratio.

This article argues, contrary to the general observation of a humble freshman, that obiter should not be dismissed. The paradigm is that dicta is secondary, but just as rules are subject to exceptions, human paradigm is malleable to so much more; in many instances, dicta remains an invaluable form of judicial guidance. Furthermore, with recent developments and unique local circumstances, obiter dicta is likely to become invaluable.

II. PRIMARY OF RATIO DECIDENDI

Ratio decidendi is recognized as the section of judicial reasoning with direct correlation to material facts at hand.1 In a system of common law, it is widely recognized as the most valuable section of a judgment, and is the only part which binds lower courts in vertical stare decisis. Generally, the law avers from contemplating anything but the ratio: apart from making unnecessary complications in interpreting judgments, lawyers are taught that the law operates with analogical reasoning, and like cases must be decided alike. The most predictable result for a present case can only be drawn from another precedent that is “on all fours” with it; if favourable precedent is dissimilar from the present case in any way, the dissimilar facts must not concern the key reasoning behind judgment. The value that the law places on ratio is obvious from the devotion of legal practitioners in refining their skill of crystallizing the ratio decidendi of cases.

In contrast, students and practitioners of the law are incessantly reminded of the need – not only to omit – but to criticize and rebuke the use of obiter dicta. The obiter dicta of the judgment encompass every other part of the judgment not included within the ratio decidendi.2 Just as the ratio is persuasive in law, the obiter is rarely sufficient to convince; without direct bearing on the ultimate decision of the court, obiter are but commentary – passing remarks by judges that can be made without similar care to ratio.

This, however, does not seem true in any common law jurisdiction, and especially not in Singapore. The effort made by judges in commentary, both in their judicial capacity and in extra-judicial sitting, do not seem to commensurate with legal instinct that obiter is irrelevant. In fact, many of the advances made in substantial law are drawn from pure obiter, which have guided local courts in making decisions even before the opportunity to formulate a ratio arose.

III. OBITER COMPENSATES FOR RESTRICTED RATIO

Ratio decidendi faces limitations which obiter does not. In explaining the ratio decidendi of cases, judges adhere to the principles of legal precedents set before them, and strictly apply material fact to rule. As complex as it is promulgated thereafter, the ratio decidendi is essentially an input-output system. What elegant expression masks is legal machinery that makes binary decisions on minor tests.

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The persuasiveness of ratio is precisely due to and correlated with its limitations. Ratio is most powerful when it is restricted to key and analogous facts, and it is a fish out of water outside of such limited circumstances.

In contrast, the commentary made by judicial practitioners has wider applicability than the ratio decidendi of a case. Judges may consider the application of novel legal principles in alternative factual circumstances, (their opinion) on the disposition and direction of the law, and other comments they may have.3

At times, the decisive turn of a judgment may be found in dicta instead of its ratio decidendi. Where decisions are made and the arm of prevailing legal principle is twisted to achieve a just solution, obiter dicta may better explain the results achieved. For instance, the unsatisfactory state of the postal acceptance rule was not supplanted but circumvented in antecedent cases such as Holwell Securiities v Hughes4, where the generality may be excepted by specifically requiring “notice in writing” or would produce “manifest inconvenience and absurdity”. In effect, Holwell Securities v Hughes traced the dissent of Bramwell LJ in Household Fire & Carriage Accident Insurance Co Ltd v Grant5; the strenuous evasion of the tricky postal acceptance rule followed the expiration of policy considerations encouraging the use of postal delivery for contracts. Yet judges remain hesitant to remove a doctrine entrenched in the law of contract due to respect for the weight of precedent and fear of a vacuum left in the law of acceptance; thus, most of their deliberations are found in obiter.

In fact, the undisclosed rationale for decisions may easily be found in ostensibly unrelated comments and dicta. A novel application of psychological Freudian analysis to judgments6 discovered undercurrents to decisions, which were related to neither material fact nor legal principle. The authors found that judges could potentially “reach an early decision” before “iterating backwards…[to] an optimal solution to resolving the case”. Notwithstanding fervent hopes that such is anomalous, one cannot now discount the assistance that dicta provide in navigating to the heart of a judgment.

IV. MUTUALLY REINFORCING AND INSEPARABLE

Often, ratio decidendi makes little sense without the obiter dictum. Obiter explains the ratio of the case in relation to judicial principles, and the ratio decidendi is not amply convincing without its obiter. At times, judges may even establish limits and exceptions to ratio in their remarks.7

In fact, judges make a conscious effort to deal with obiter. Rare is the instance where a judge remarks that another’s word are “just obiter” or “dicta”; and even on such occasions, judges do not disapprove the dicta of another on that basis alone. For instance, Megarry J denied a submission that comments could be dismissed on the basis of being mere dicta. He reinforced the position of dicta with “the highest authority that any dictum can bear”, classifying “a third type of dictum” which bore the authority not only of the judge’s own opinion, but that of “an unseen cloud of his judicial brethren”.8 The spirited defence above evinces wide recognition that dicta carries significant weight; the opinion of as learned a practitioner in law as a judge cannot be so sorely mistaken as to be waived with a simple label of “obiter”.

Furthermore, one cannot truly isolate the obiter. Much to the dismay of the concerted efforts of practitioners, there is no clear demarcation between the ratio and obiter of a case; the interpretation of judicial reasoning is as uncertain as it is human. What is thought to be circumstantial to one lawyer could have substantive value to another.

With multiple lines of reasoning, what takes the position of ratio can be contested. Will only one applicable line of reasoning be accepted as binding judicial precedent? Competing ratios may ultimately undermine the decisive value of ratio as well.

V. DICTA MAKES LEAPS AND BOUNDS IN INCREMENTAL DEVELOPMENT

In the doctrine of judicial precedent, the use of ratio decidendi is purposed for a slow and careful development of the law. Although wariness is want in larger jurisdictions, slow development by analogy to past cases disadvantages smaller jurisdictions; opportunities to develop substantial law in one area may be limited by the regularity of cases coming forth. Judges may therefore use dictum to advance the law’s development; doing so is not incompatible with taking care in the law, and may be entirely justified by a plethora of considerations. For instance, where precedents differed over when consideration is provided for contract modifications, Arden LJ advanced an alternative idea of a “collateral unilateral contract” in MWB Business Exchange Centres Ltd v Rock Advertising Ltd9 to reconcile the precedents. While it may not have been necessary given that Kitchin LJ had not resorted to such a mechanism, the spate of dissonance welcomed a thorough effort to resolve it. One can hardly deny that the rules on “Himalaya clauses” developed in a similar fashion; the cases of The Eurymedon10 and The New York Star11 built on dicta left by Reid L in Scruttons v Midland Silicones12, fleshing out the solution for carriers seeking to protect their stevedores from liability to consigners. After all, the English courts have nothing to lose, and all to gain, from contemplating all viable options to open questions in law.

With the growth of alternatives to litigation in other forms of dispute resolution13 – most of which carry limited precedential value14 – common law jurisdictions may lose their source of incremental development. Under such circumstances, obiter may easily become more valuable.

Similarly, where the number of circumstances is limited – and desirably so – in a small jurisdiction like Singapore, obiter has significance since it is the quickest manner in which law can develop. Unlike larger jurisdictions which have had centuries of time to develop their laws with analogy and incremental development, states like Singapore with little more than half a century inevitably rely heavily on obiter dicta. In both Ngiam Kong Seng v Lim Chiew Hock15 and Man Mohan Singh s/o Jothirambal Singh v Zurich Insurance (Singapore) Pte Ltd16, the Singapore Court of Appeal applied the autochthonous legal test for a duty of care17 in full in spite of both claims having failed on the threshold requirement of factual foreseeability. Owing to the restricted size of jurisprudence, the honourable Judges of Appeal seized the opportunity to examine the application of Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency in psychiatric injury claims. The distinction between primary and secondary victims of psychiatric injury18 would not have been removed from Singapore law but for Andrew Phang JA’s dicta. Obiter dictum could thus supplant ratio in developing the law when:

  • a. Obiter is used to explain the preferred route of the law in the future, where the ratio decidendi cannot because the case itself does not lend a factual matrix appropriate for a legal issue to be addressed.
  • b. Obiter is used to make up for the lack of situations in which a binding ratio decidendi can be formulated
  • c. Obiter provides the widest explanations of multiple answers in law, and therefore expedites the law’s incremental development

VI. CONCLUSION

An American reference details that apart from the formal restrictions on dicta, dicta is sparingly used because “the reader may view its use as an attempt to misstate the law”.19 Perhaps the true concern of lawyers and judges alike is not truly against dicta being mere comments per se, but really against negligence and malice. Yet if this is the concern, our motivations to study obiter dicta should be stronger. While it would appease the rudimentary to know of ratio, a true and complete comprehension of the law cannot be achieved without reading dicta. If students, practitioners and critics of the law are to answer a calling above a vocation, then blindness to dicta will only cause us to fall short of our standards, and do injustice on those relying on our expertise.


[1] See Robert C. Beckman, Brady S. Coleman, Joel Lee, Case Analysis and Statutory Interpretation, (Singapore: National University of Singapore Faculty of Law), 76 for the definition ofratio. Further, the authors provide ample warning at p 63 that “the rule of law stated in a case…may not incorporate the material facts…[students] must be cautious and not assume that this wide proposition of law will be accepted as the ratio decidendi”.

[2] Ibid at 65, where obiter is referred to as “statements in a judgment which are not part of the decision, but which nevertheless are important”; at p 76 such significance is then redacted to being “at the most persuasive”.

[3] Ibid at 65, dicta assists in “predicting how related issues might be decided in subsequent cases”, especially when a noteworthy judge provides insight that “are not necessary to the decision in the present case”, or set “possible limits or exceptions” to the ratio.

[4] [1974] 1 All ER 161.

[5] [1879] 4 Ex C 216.

[6] Foo Check Teck, “Freudian Analysis of a Judgment”, Singapore Law Gazette (7 February 2003) (http://www.lawgazette.com.sg/2003-2/Feb03-feature3.htm).

[7] Supra note 3.

[8] Richard West and Partners v Dick [1969] 2 WLR 383 at 388A-D.

[9] [2016] EWCA Civ 553 at [89]. By devising a “collateral unilateral contract” over existing contracts, Professor Mindy Chen-Wishart’s device as borrowed could resolve a dispute over whether an agreement to accept payment by instalment was enforceable under consideration. This dispute recognizably plagued English Law since precedents of In re Selectmove [1995] 1 WLR 474 and Williams v Roffey Brothers [1991] 1 QB 1 were diametrically opposed on the issue.

[10] [1975] AC 154.

[11] [1980] 3 All ER 257.

[12] [1962] AC 446 at 472-479.

[13] The growth of alternative dispute resolution mechanisms (“ADR”), especially in Singapore, can be taken as trite. Notwithstanding the variety of reports, even leading textbooks recognize that ADR has seen “phenomenal development” and “is set to become an undeniable aspect of the Singapore legal system”. (Supra note 1 at 39).

[14] The rare instances in which alternative dispute resolution mechanisms have binding authority are when they are subject to judicial review: for example, see Clea Shipping Corp. v Bulk Oil International Ltd [1983] 2 Lloyd's Rep 646, where the Queen’s Bench considered and agreed on the arbitral decision.

[15] [2008] 3 SLR(R) 674.

[16] [2008] 3 SLR(R) 735.

[17] Often and affectionately called the Spandeck test, as derived from Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100.

[18] Originating from Page v Smith [1995] UKHL 7.

[19] Richard K. Neumann, Jr., Kristen Konrad Tiscione, Legal Reasoning and Legal Writing, 7th ed, 90.


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