Vol 9 (2017/18)

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Legal Translation of Common Law Derivative Action in the Indonesian Company Act (No. 40 of 2007)

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A PDF copy of the article, along with its bibliography in full, is available for download here.

The Editors would also like to thank Mr. Sean Rafferty for his assistance and contibution, which have been significant in the course of editing this work.

Common Law Derivative Action in the Indonesian Company Act (No. 40 of 2007)

Novritsar Hasintongan Pakpahan*

I. INTRODUCTION

Provisions for derivative actions in the Indonesian Company Act1 (the “Act”) provide shareholders with a means to act on behalf of the company, which are additional to statutory derivative actions. While the aspect of acting on behalf of the company closely parallels common law derivative actions, existing legal translations of the Act do not sufficiently explain the concept. Misunderstanding is common since there is a difference between the legal systems under Indonesian civil law2 and the common law3 contained in the Act. Legal translation is therefore necessary to understand the implementation of the legal concept of common law derivative action. The Indonesian Government has yet to issue an official English translation of its Act. Accordingly, this study focuses on more popular, frequently-used, or credible translations to both laypersons and legal practitioners. It focuses on the three translations by the UNODC, Irma Devita, and Global Business Indonesia – which have been reflected on the top 5 results of Google search4 and Alexa5 as at July 2nd, 2017.

In a prior commentary referring to Jopek-Bosiacka, the author has stressed that legal translation is not merely a translation of legal texts between two different languages, but also translates at least two different legal systems.6 Since there is no specific legal translation technique exists,7 it is apposite to consider 6 translation techniques that are often applied by Indonesian legal translators. These are: literal translation, pure borrowing, naturalized borrowing, mixed borrowing, description, and expansion.8

II. LEGAL TRANSLATION OF COMMON LAW DERIVATIVE ACTION IN INDONESIAN COMPANY ACT

There are three translations of s 97(6) of the Act for the same phrase:

“Atas nama Perseroan, pemegang saham yang mewakili paling sedikit 1/10 (satu persepuluh) bagian dari jumlah seluruh saham dengan hak suara dapat mengajukan gugatan melalui pengadilan negeri terhadap anggota Direksi yang karena kesalahan atau kelalaiannya menimbulkan kerugian pada Perseroan”.9

A. The UNODC translation

The first translation by United Nations Office on Drugs and Crime (“UNODC”)10 applied literal translation throughout; this can be observed where the resultant translation maintains exactly the same sentence structure.11 For example, “…against members of Directors whose faults and negligence create damages…” is a word-for-word translation from “…terhadap anggota Direksi yang karena kesalahan atau kelalaiannya menimbulkan kerugian…” without any change towards the grammatical structure of the phrase.

However, for legal practitioners, literally translating phrases as above may cause confusion between common law derivative action and statutory derivative action. It is important to point out that there is significant difference between the two. The former is submitted by minority shareholders on behalf of the company and regulated at common law and equity, whereas the latter’s scope is ruled in a statute and wider than the former because it covers director’s duty to exercise reasonable care, skill, and diligence.12 The translation above is ambivalent as to whether a single shareholder who represents a minimum of one-tenth of entire shares is required, or whether several shareholders who represent the same proportion of shares must be gathered instead. Practitioners will be more uncertain about the separate requirements at common law and statute for submitting a derivative action on behalf of corporations.

Furthermore, the term ‘damages’ may be confused with another legal concept of ‘loss’; the former refers to compensation for damages caused, whereas the latter relates to the actual losses incurred by director of the corporations. The term ‘kerugian’, as mentioned by the Act, contained the concept of loss caused by the personal wrongdoings of director. Wilamarta even added that there should be compensation for such wrongdoings of a director as formulated in the Act.13 Therefore, the term ‘loss’, or specifically “loss caused by negligence”, would be best suited to translate the term ‘kerugian’ rather than ‘damages’ as regulated in the Act. Literal translation applied by the translator also confuses by converting “pemegang saham” into “shareholders” rather than “shareholder”, which leads the reader to assume that there must be several shareholders to allow any shareholder to submit a derivative action. It is important to note the use of “pemegang saham” in the plural form rather than singular form because it would be difficult and rare for a single shareholder to have 1/10 (one-tenth) of entire shares in reality. That is why the translators, lay persons, and legal practitioners do not really differ the singular or plural form of “pemegang saham” and would immediately assume “pemegang saham” in plural form instead of singular form. Hence, although the translation by UNODC can be considered generally sufficient for use, it is submitted that there is room for improvement to prevent these misunderstandings.

B. Irma Devita’s translation

The second translation by Irma Devita14 uses literal translation and explicitation. Firstly, the translator chose to use literal translation to translate half of the sentence. This choice of literal translation can be observed from the similar grammatical structure of the translation. For example, “…representing at least 1/10 (one tenth) of the total number of shares with voting rights may file suit…” is a literal translation from “…mewakili paling sedikit 1/10 (satu persepuluh) bagian dari jumlah seluruh saham dengan hak suara dapat mengajukan gugatan…”. Also, as observed in the UNODC translation above, Irma Devita prefers to use ‘shareholders’ to translate ‘pemegang saham’ rather than using only ‘shareholder’. This is similarly germane to confusion among legal practitioners regarding the minimum number of shareholders required to apply for derivative actions, which could be a shareholder or several shareholders as long as they represent 1/0 (one-tenth) of the entire shares with voting rights.

However, Irma Devita used explicitation to clarify the term ‘kerugian’. The term ‘kerugian’ has two possible literal interpretations in Indonesian which are separate legal concepts; it may refer either to damages caused by personal wrongdoing, or losses as a part of operational cost of a corporation. Accordingly, the phrase “… menimbulkan kerugian pada perusahaan…” has two literal translations, namely: “… create damages to a corporation” or “… create losses to a corporation”. Irma Devita chose to use the latter phrase referring to ‘losses’ so as to explicate the ambiguous translation of the term ‘kerugian’. This employment of explicitation adds information of the source-text which is implied in the text.15 Similarly in the next part of the sentence, Irma Devita’s translation maintains the reference to losses, and selects the phrase ‘… give rise to the losses…[emphasis added]”. This is likewise a form of explicitation: it accurately connotes that a member or director’s fault or negligence is more relevant for consequential losses caused by it, and not merely every loss suffered by the company. Companies may well incur losses as a result of technical operations, which are separate from those caused by their member or director. This translation not only shows that the translator has a strong understanding of a company’s technical operations, but is also more helpful for legal practitioners where it defines which losses they may bring a derivative action for the true requirement for derivative actions.

C. Global Business Guide Indonesia’s translation

The third translation by Global Business Guide Indonesia16 uses literal translation and modulation. The use of literal translation techniques can be observed where the first half of a sentence is translated word-for-word: “… representing at least 1/10 (one-tenth) from the total number of shares with voting right, may submit a claim to a District Court…” literally translates to “…mewakili paling sedikit 1/10 (satu persepuluh) bagian dari jumlah seluruh saham dengan hak suara dapat mengajukan gugatan melalui pengadilan negeri…”. Similar to the previous translators, Global Business Guide Indonesia chose to use ‘shareholders’ to translate ‘pemegang saham’ rather than using only ‘shareholder’. This literal translation may ease the work of translators easily without changing the essential meaning of the formulation of the section of the Act.

The difference, however, is that Global Business Guide Indonesia also employs modulation to translate this section. Modulation helps readers understand the extended meaning of the sentence’s concept by changing the point of view.17 This can be seen from the translation of “…terhadap anggota Direksi yang karena kesalahan atau kelalaiannya menimbulkan kerugian…” to “…against member of the Board of Directors which causes loss to the Company due to their fault or negligence.” In contrast, a literal translation such as that used by UNODC would be “…against members of Directors whose faults and negligence create damages…” Modulation here aids in understanding this concept by directly indicating the relevant party whose fault or negligence has caused loss. This translation of Global Business Guide Indonesia clarifies that it was the fault or negligence of a singular member of the Board of Directors, rather the fault or negligence of the entire Board.

D. General assessment across popular translations

A similarity found throughout the aforementioned three translations is the preference in translating ‘pemegang saham’ as ‘shareholders’ instead of ‘shareholder’. This choice of words likely arose of the translators’ practical consideration – that it would be absurd if a single shareholder was legally required to have such a large number of shares, even though the large number of shares would be some sort of investment for the shareholder and become equity for the company involved.18 To illustrate the point: Jakarta Post reported that the shares of highest valued company in Indonesia, Indocement Tunggal (“INTP”), would cost about Rp. 17,332 (equivalent to S$1,74096) per share out of Rp. 7.74 Trillion worth of sale.19 It showed how difficult it would be for a single shareholder to have 1/10 (one-tenth) of Rp. 7.74 Trillion as regulated in s 97 (6) of the Act.20 Furthermore, such a large purchase of shares must be paid-up in full without instalments under Article 22 of Indonesian Investment Coordinating Board (“BKPM”) Regulation Number 5 of 2013.21 Hence, although the term ‘pemegang saham’ is a singular noun contrary to its plural translation as ‘shareholders’, the translations above are nonetheless sensible. They reflect the practicalities of the Indonesian Companies Act as correctly understood by the translators.

However, none of the above translations sufficiently explain the nature of derivative actions in the Act. Notwithstanding their mention of minimum requirements to submit these actions, these translations do not clearly indicate that “derivative action” in Section 97(6) of the Act employs aspects of both statutory and common law derivative actions. This runs possible risks where legal practitioners, especially those accustomed to the Common Law legal system, may automatically assume that the derivative action in Indonesia refers to common law derivative action.22

E. Suggestions for improvement

All 3 translation techniques should therefore be used in translating Section 97 (6) of the Act (namely literal translation, modulation, and description). First, literal translation can be used to translate the phrase of “Atas nama Perseroan, pemegang saham yang mewakili paling sedikit 1/10 (satu persepuluh) bagian dari jumlah seluruh saham dengan hak suara…” into “On behalf of the Company, the shareholders representing at least 1/10 (one-tenth) from the total number of shares with voting rights…” similar to the translation by Global Business Guide Indonesia.23 This translation technique builds the fundamental understanding of the formulation of Section 97(6) since the literal meaning of the first phrase best captures the core of the legal concept of the legal requirements for legal subject to make claim or submission of derivative action.

On the other hand, the subsequent phrase would be more accurately translated via modulation: “…dapat mengajukan gugatan melalui pengadilan negeri terhadap anggota Direksi yang karena kesalahan atau kelalaiannya menimbulkan kerugian pada Perseroan”, can be translated into “…may submit a claim to a District Court against member of the Board of Directors which causes loss to the Company due to their fault or negligence”. Modulation here clarifies the identity of the subject whose fault or negligence causes the Company’s loss. This avoids ambiguity, and is preferable to a literal translation. With regards to applying Description as a translation technique, 2 possible applications are suggested. The first is to apply Description in the formulation of the section itself, where a description of the legal concept may be appended after the first phrase. (that is to say, “On behalf of the Company, …”) Descriptions attached here can elaborate on the similar requirements to be qualified for submitting a derivative law. For instance, the description may add “…, similar to common law derivative action that requires the minority shareholder to submit a claim on behalf of the company instead of their own personally”.

This additional description clarifies the kind of derivative action which a minority shareholder would need to submit under this section of the Act, although it may add to the section’s length. It is further recommended that such descriptions be supported by opinions from an expert in corporate law, and it would be sufficient if this source’s reference was indicated in the Explanation of the Act. The source need not be specified explicitly in the formulation itself, as noted by the term [learned textbook authors].24

Alternatively, Description can also be applied in the Explanation of each section of the Act. These Explanations supplement each section of the Indonesian Company Act, and are presently required to contain a legal norm, and be formulated in short and clear sentences as specified in Point 77 of The Annex of Regulations Act Number 12 of 201125. These rules are to maintain the clarity of legal norms in sections, but it is submitted that Descriptions can further elaborate on these legal concepts. An example for description translation technique applied in the explanation of an act is as follows:

“This section regulates derivative action that may be submitted by minority shareholders. The derivative action in this Act is similar to the common law derivative claim in the matter of submitting on behalf of the company, where the minority shareholder must have specific minimum requirement of shares and valid voting rights, and can only be submitted against breach of negligence. Although it is regulated in a statute, rather similar to statutory derivative action, derivative action in this section resembles the common law derivative action since it has same elements as common law derivative action referring to Dignam’s opinion (Dignam and Lowry, Company Law, 2012, p. 109)”.

III. CONCLUSION

Legal practitioners would be confused between the three translations mentioned above, especially if they have been accustomed to derivative actions at Common Law. Therefore, literal translation, modulation, and description translation techniques should be combined to create a proper legal translation of Section 97 (6) of the Act. This is necessary to provide both lay persons and legal practitioners a proper understanding and prevent confusion. 

*Novritsar Hasintongan Pakpahan. Graduated as Law undergraduate of Airlangga University and English education undergraduate of Wijaya Kusuma University of Surabaya. Currently studying as a first-year student in Master of Law program in Faculty of Law of National University of Singapore specialising in Corporate and Financial Services in 2016/2017. All errors remain Novritsar’s own.

[1] No. 40 of 2007.

[2] Frank Tumbuan, “Two-Tier Board and Corporate Governance” (Pointers for discussion delivered at the One-Day Seminar on Capital Market and Corporate Governance Issues in Bali, Indonesia, 7 September 2005), p. 7-8.

[3] Susan Sarcevic, New Approach To Legal Translation (The Hague: Kluwer Law International, 1997), p. 67.

[4] Google Search Results, https://www.google.co.id/#q=indonesian+company+act+40+2007, accessed on July 2nd, 2017.

[5] Alexa Search Results, http://www.alexa.com/siteinfo/irmadevita.com;  http://www.alexa.com/siteinfo/gbgindonesia.com; http://www.alexa.com/siteinfo/unodc.org, accessed on July 2nd, 2017.

[6] As previously argued by the author in Novritsar Hasintongan Pakpahan, English-Indonesian Translation Techniques Applied on Legal Terms in John Grisham’s ‘The Litigators’, The Novel (Bachelor of Education, Universitas Wijaya Kusuma, 2015) [unpublished], at p. 5

[7] Ibid, at p. 22.

[8] Ibid.

[9] Undang-Undang Nomor 40 Tahun 2007 Tentang Perseroan Terbatas, Lembaran Negara Republik Indonesia Tahun 2007 Nomor 106, Pasal 97(6).

[10] United Nations Office on Drugs and and Crime, Law of The Republic of Indonesia Number 40 Year 2007 Concerning Limited Liability Company.

[11] Fawcett explained that literal translation doesn’t make any change from the source-language to the target-language grammar, in Peter D. Fawcett, Translation and Language. Linguistic Theories (Great Britain, St. Jerome Publishing, 1997), at p. 36

[12] Alan Dignam and John Lowry, Company Law (Great Britain: Oxford University Press, 2012) at p. 202.

[13] Misahardi Wilamarta, Hak Pemegang Saham Minoritas dalam Rangka Good Corporate Governance (Jakarta, Fakultas Hukum Universitas Indonesia, 2002) at p. 306.

[14] Irma Devita, Law of The Republic of Indonesia Number 40 of 2007 Concerning Limited Liability Companies

[15] Lucia Molina and Amparo Hurtado Albir, Translaton Techniques Revisited: A Dynamic and Functionalist Approach (Barcelona: Meta XLVII , Universitat Autonoma de Barcelona, 2002), at p. 500

[16] Global Business Guide Indonesia, Law of The Republic of Indonesia Number 40 of 2007 Concerning Limited Liability Company.

[17] Supra note 11, at pp. 499-500.

[18] Shareholders must have at least 1/10 (one-tenth) from the total number of shares with voting rights, in Rudhi Prasetya, Teori & Praktik Perseroan Terbatas (Jakarta: Sinar Grafika, 2011), p. 26.

[19] Adam Rizky Nugroho, ‘Five Most Wanted Stocks for Foreign Investors’ in http://www.thejakartapost.com/news/2016/09/17/five-most-wanted-stocks-for-foreign-investors.html, accessed on October 18th, 2017.

[20] Supra note 9.

[21] Peraturan Kepala Badan Koordinasi Penanaman Modal Republik Indonesia Nomor 5 Tahun 2013 tentang Pedoman dan Tata Cara Perizinan dan Nonperizinan Penanaman Modal.

[22] Supra note 3.

[23] Supra note 12.

[24] Supra note 4 at p. 190.

[25] Lampiran Undang-Undang Pembentukan Peraturan Perundangan-Undangan Tahun 2011.

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The Reserved Election Mechanism: A Step in the Right Direction for Promoting Multiracialism and Protecting Minority Rights?

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A copy of this article in PDF format can be downloaded here.

The Reserved Election Mechanism: A Step in the Right Direction for Promoting Multiracialism and Protecting Minority Rights?

This article was contributed by Ms. Susanna Yim, who is presently pursuing her third and final year in her Bachelors' in Law at the Singapore Management University. The Editors would like to thank her for going the extra mile to make this submission.

The Reserved Election Mechanism (‘REM’) was introduced into Singapore’s Constitution recently as a response to Singapore’s current state of multiracialism. Specifically, Singapore has not evolved into a post-racial society yet and the REM was deemed necessary to strengthen multiracialism. This novel initiative has been met with varied response. This paper argues that, on balance, the REM is a robust example of the constitutional importance accorded to multiracialism and minority rights in Singapore. The mechanism holds true to constitutional principles and shows fixed commitment to guaranteeing minority rights. Still, the mechanism has room for improvement. Largely, the inescapable effects of implementing the mechanism and the perception of minorities that the scheme perpetuates among the population may end up, though guaranteeing minority rights, undermining multiracialism drastically. Additionally, the current community categorisation may water-down the REM’s protection of certain minorities’ rights. Nevertheless, considering the inherent delicacy of presidential office, due to its solitary and high-stakes nature, the REM remains sufficiently balanced.

I. INTRODUCTION

Multiracialism is the proverbial glue holding Singapore’s otherwise racially fragmented society together. Unsurprisingly, multiracialism has been accorded constitutional importance since Singapore attained independence in 1965. In 2016, the Reserved Election Mechanism (“REM”) was introduced in furtherance of this ideal.

The REM, established by Article 19B of the Constitution,1 operates such that within every five terms of the Elected Presidency (“EP”), individuals from each of the three constitutionally-defined communities2 are elected into the Presidential Office (the “Office”) at least once. This guarantees each community’s representation in the highest office every 30 years. The fact that the REM is constitutionally-entrenched speaks volumes of the paramountcy accorded to it in promoting multiracialism.

II. MULTIRACIALISM AND MINORITY RIGHTS

Multiracialism entails tolerating each ethnic community’s cultural values. Minorities generally refer to numerically inferior or subordinated groups in society. The attitude espoused in Singapore is one of promoting multiracialism and protecting minority rights.

A. Protection of minority rights

Generally, minority communities require formal arrangements by the government as reassurance that they will not be marginalized in their country.3 This is done by giving the minority communities autonomy and an active stake in the nation through power-sharing arrangements.4

Consequently, no community is excluded when it comes to decision-making and the use of executive power, as seen in Singapore’s Group Representation Constituencies (“GRC”).5

Moreover, minority communities face disadvantages due to their minority status, 6 especially since Singapore is not a post-racial society yet.7 Thus, efforts may have to be made to level the playing field for all communities through affirmative action,8 for example with the REM.

B. The delicate balance between minority protection and multiracialism

According additional rights to minorities may be perceived by non-beneficiary communities as unfairly privileging minorities, thereby increasing racial awareness instead of minimising it. Therefore, the government introduced the ethos of meritocracy to overcome this inescapable by-product of affirmative action; without meritocracy, “suspicion and prejudice [will] fester and grow” between communities.9 The adherence to democracy is also useful in this balancing exercise as it assures all communities that their views would be considered and represented.

III. HOW THE REM PROMOTES MULTIRACIALISM AND PROTECTS MINORITY RIGHTS

A. The REM recognizes distinct cultural identities, thus allowing it to include all races in its precise workings

First, the major racial communities of Singapore are accounted for in Article 19B(6).10 These neat delineations provide a clear basis for the rotation of the Office among the communities so as to promote multiracialism. This allows a systematic application of the REM, leaving little room for ambiguity; it is useful to make a contrast with the similar rotating-presidency scheme adopted in Nigeria.11 The Nigerian example has largely been criticized as having failed due to the ambiguous wording of its operative mechanism, which allowed certain communities to entrench their position of power instead of giving way to other communities as the Nigerian Peoples Democratic Party Constitution had intended.12

Further, the Presidential Elections Act13 introduces a Community Committee which will issue a community certificate to each election candidate14 to declare which community he or she belongs to, thus facilitating the counting of reserved elections. 15 Through this, the categorizing of each community becomes less semantic as a hand-picked group of individuals can better deal with the complexity of racial differentiation16 than mere words in a statute. The Committee will be instructed to take an inclusive approach in their assessment to strike a balance between ethnicity and identity, especially for individuals of mixed heritage.17 This clearly demonstrates the careful treatment of the sensitive issue of race and how the REM gives effect to multiracialism by considering all communities.

B. The REM demonstrates fixed commitment to representing minorities in the Office

Second, the REM safeguards minority rights by guaranteeing the election of a minority candidate every so often. This fixed commitment has a direct effect, leaving no room for ambiguity or discretion that may result in an alternative outcome that discriminates against minorities. As such, the minority groups should appreciate the REM for ‘championing’ their access to the Office. In contrast, consider the Serbian example. The requisite percentage of minority population in local communities for officialising the use of their minority language was left to local assemblies’ discretion. This resulted in biased local assemblies terminating the official use of minority languages in several communities. The minorities had proposed and would have preferred a set percentage instead of having to subject the protection of their language rights to the discretion of the local assemblies.18

C. The REM is consistent with constitutional ideals cherished in Singapore

1. Facilitates Representative Democracy

Third, representative democracy is facilitated as the Office remains multiracial over time.19 This is observed on two levels: firstly, since the President represents the nation itself in the global arena, the occasional minority President would show that Singapore consists not only of Chinese people, but also Indians, Malays and other racial minorities. Secondly, the REM allows wider participation in the EP since all communities would have one of their own taking the Office at least once every five terms.

2. Demonstrates substantive and procedural equality

Fourth, by reserving elections for communities under-represented in the EP, the REM has the effect of ensuring substantive equality12 since it levels the playing field to allow equality of opportunity.21 This can be seen as giving effect to the constitutional principle of equality.22 Additionally, the same qualification criteria in Article 1923 is applicable to both the reserved and the open elections, thus upholding procedural equality in the mathematical sense that only those who meet the threshold qualifications can stand for election.24

D. The REM is a self-correcting mechanism

Fifth, the REM’s hiatus-trigger25 is laudable as it gently nudges the population towards the goal of post-racial voting; once Singaporean society can vote in a manner that apparently does not indicate racial-bias,26 the REM would not be triggered.

Even if this hiatus-trigger is perceived to conflict with democracy and meritocracy, this would not remain the case for an indefinite duration. If the REM is triggered for three consecutive terms for each of the three constitutionally-defined communities to install in turn one of their own in the Office, the subsequent two elections will be open elections and, thus, as democratic and meritocratic as possible. The only criticism then would be that citizens must wait for these two elections within every five-term-cycle to have ‘truly’ democratic, meritocratic elections.

IV. CONTRASTING THE REM WITH EXISTING SAFEGUARDS

The EP is a particularly vexed platform to promote multiracialism and protect minority rights because of the solitary and high-stakes nature of the Office. In contrast, the GRC system27 involves multiple people, allowing a degree of simultaneous power-sharing. Additionally, the Presidential Council for Minority Rights scrutinizes parliamentary bills and the outcome of such scrutiny would invariably benefit all communities;28whereas the REM appears to benefit only one community each time it is triggered. Lastly, various constitutional articles29 can be relied upon by individuals from all communities at any point in time in litigation;30 whereas the REM is triggered only once in a while for a specific community when the conditions are right. Thus, the election of the President through the REM may periodically appear as a zero-sum game to be won by one community at the expense of all others.

Nonetheless, the REM is a step in the right direction for promoting multiracialism and protecting minority rights. A further step in the right direction would be to constitutionally provide for membership in the Council of Presidential Advisors to be multiracial as well, so that there is more opportunity for all the communities to engage in simultaneous power-sharing in relation to the high-stakes Office.

V. QUAERE: BUT DOES THE REM REALLY PROMOTE MULTIRACIALISM AND/OR PROTECT MINORITY RIGHTS?

A. Yes, the REM protects minority rights, but at the expense of meritocracy and democracy, ultimately detracting from multiracialism

First, while meritocracy appears to be upheld, it is also severely compromised – because the highest office of the land is no longer for the nation’s most deserving candidate but merely a good enough candidate from the community it is being reserved for.

Nevertheless, there have been calls to re-evaluate meritocracy considering the changing paradigm; meritocracy measures the individual’s performance but fails to account for additional inherent advantageous factors that the individual may have as against another individual of comparable ability.31 Arguably, an individual’s community can be considered as one of these factors, particularly in the context of elections.32 Further, the qualification criteria is applied indiscriminately of race,33 thus retaining some semblance of meritocracy. Moreover, this call to re-evaluate meritocracy is consonant with ensuring substantive equality.34

Second, the REM erodes democracy. Reserving elections for one community substantially reduces voters’ choice. Additionally, the Community Committee, which issues community certificates, is appointed by the Prime Minister on the nomination of the PCMR.35 This may result in a parallel controversy as in the uncontested 2005 Presidential Elections, where only one candidate was awarded the Certificate of Eligibility and thus became a ‘walk-in’ President. This consequently sparked furore as to the Committee’s decision and casting doubt as to whether the election was genuinely democratic.36

A potential area for abuse arises where candidates of mixed heritage are concerned: the Committee may choose to identify him as part of a particular community to bar or allow him to participate in a reserved election, or, in the case of an open election, affect the cycle for future elections.

Further, the basis on which the Community Committee is to make their decision is unclear. The Committee is to be guided by “the merits of the case”;37 but what are these merits? For instance, would the proficiency of the candidate in his mother tongue be relevant? More information would be helpful in promoting transparency and dialling down the disquiet surrounding the REM.38

B. No, the REM mechanically categorizes communities to the extent of over-homogenization

Third, the categorization of communities is inherently flawed, undermining both minority rights and multiracialism. While the process of declaring which community each candidate belongs to is now more palatable due to the Community Committee,39 the constitutional categorization itself is objectionable. Although these groupings have been utilized by the government for ease of administration,40 they over-homogenize and over-simplify the exquisitely diverse communities in Singapore,41 thus eroding multiracialism as defined above.

The government should re-formulate this categorization, particularly the “Indian and others” category. Given the sizeable increase of these subsumed communities42 and the apparent failure to appreciate their cultural differences, it seems unfair that these distinct communities have been collapsed into one convenient grouping – a blatant over-homogenization which has been unconvincingly rationalized as being a statistical decision. A practical effect of this is that, in extreme cases, instead of having a member of their community sitting in the Office at least once every five terms, either of the groups may have to wait for ten terms or more before a member of their community is elected.

C. No, the REM only promotes multiracialism and protects minority rights superficially

One must ask: how far can the REM go toward these two objectives? Undeniably, the REM will make the Office more superficially multiracial over time as a member of each of three communities takes its turn in the ‘hot seat’. However, such appointment per se does not necessarily translate into promotion of multiracialism and protection of minority rights, unless the EP wields his power and makes decisions and effects policies towards such ends. Should this happen, it is nonetheless hoped that the EP does not go ‘overboard’ and show bias towards a particular community and thereby become antithetical to representative democracy.43

VI. CONCLUSION

Promoting multiracialism and protecting minority rights requires a fine balance. The REM has struck a tenuous one by providing both guaranteed representation of all communities and some semblance of meritocracy. Its hiatus-trigger also ensures any unhappiness caused is short-lived. Nevertheless, its categorization of communities could do with some refinement.

The REM, being written into the Constitution, becomes part of the supreme law of the land. However, it is not a foregone conclusion that multiracialism will be promoted or minority rights protected – all the REM does is to ensure that each of the three communities takes its turn in the Office over time; it does not guide the way the President wields his power with respect to multiracialism and minority rights. To this end, more could be done in guiding the exercise of the EP’s powers.

[1] Constitution of the Republic of Singapore (1999 Reprint) Art 19B

[2] The three communities, the “Chinese”, “Malay” and “Indian and others”, are defined in Art 19B(6).

[3] Thomas Fleiner & Lidija R. Basta Fleiner, “The Multicultural State: The Challenge of the Future” in Constitutional Democracy in a Multicultural and Globalised World (K L Roy Trans) (Germany: Springer Berlin Heidelberg, 3rd Rev Ed, 2009), 511–650 at 649, section 8.4.4.3. The successful multicultural Swiss model of power-sharing is analysed in this chapter.

[4] Ibid, at 637–638, section 8.4.2.2.

[5] Speech during the Third Reading of the Parliamentary Elections (Amendment) Bill, Singapore Parliamentary Debates, Official Report (18 May 1988) vol 51 at col 23 (Mr Goh Chok Tong, First Deputy Prime Minister and Minister for Defence). Mr Goh stated that “the GRC proposal … effectively distributes power between leaders of the various communities. In fact, it favours the minorities.”

[6] Speech during the Second Reading of the Presidential Elections (Amendment) Bill, Singapore Parliamentary Debates, Official Report (6 February 2017) vol 94, column numbers not available (Mr Vikram Nair, Sembawang).

[7] Constitutional Commission, Report of the Constitutional Commission 2016 (17 August 2016) at p 87, para 5.15. (Chairman: Chief Justice Sundaresh Menon).

[8]  George Gerapetritis, “Introduction” in Mortimer Sellers & James Maxeiner, Affirmative Action Policies and Judicial Review Worldwide (Athens, Greece: Springer International Publishing, 2016), 1–9 at 2. The legitimacy of affirmative action lies in the very fact that “one cannot place at the same starting point people who have been treated differently in the past”.

[9] Chan Sek Keong, Multiculturalism in Singapore (2013) 25 SAcLJ at p 108, [45].

[10] Constitution of the Republic of Singapore (1999 Reprint) Art 19B(6).

[11] Agaptus Nwozor “Power Rotation, Ethnic Politics and the Challenges of Democratization in Contemporary Nigeria” African Study Monographs 2014; 35(1): 1–18, at 2. “The [Peoples Democratic Party] in 1999 designed the zoning formula to give all the six geopolitical zones of the country a chance to have a shot at the presidency. Each zone was expected to enjoy a four-year term in the presidency after which the race would be thrown open.”

[12] Ibid, at p 8, 10 and 13.

[13] Presidential Elections Act (Cap 240A).

[14] Ibid, ss 8E and 8F.

[15] Ibid, ss 5A, 8G and 8H.

[16] Speech during the Second Reading of the Presidential Elections (Amendment) Bill, Singapore Parliamentary Debates, Official Report (6 February 2017) vol 94, column numbers not available (Mr Vikram Nair, Sembawang).

[17] Ibid, column numbers not available (Mr Chan Chun Sing, Minister, Prime Minister's Office).

[18] Tibor Varady, “Minorities, Majorities, Law, and Ethnicity: Reflections of the Yugoslav Case” Human Rights Quarterly 1997; 19(1): 9–54, at p 22, under the heading “Decline of Minority Rights Praeter or Contra Legem”.

[19] In the same vein as then-Prime Minister Lee Kuan Yew; Zuraidah Ibrahim and Irene Ng, “Good to rotate EP among races”, The Straits Times (11 August 1999) at p 27.

[20] George Gerapetritis, “Introduction” in Mortimer Sellers & James Maxeiner, Affirmative Action Policies and Judicial Review Worldwide (Athens, Greece: Springer International Publishing, 2016), 1–9 at 4.

[21] George Gerapetritis, “The Moral Question: Interacting with Traditional Values” in Mortimer Sellers & James Maxeiner, Affirmative Action Policies and Judicial Review Worldwide (Athens, Greece: Springer International Publishing, 2016), 11–40 at 14.

[22] Constitution of the Republic of Singapore (1999 Reprint) Art 12.

[23] Constitution of the Republic of Singapore (1999 Reprint) Art 19.

[24] George Gerapetritis, “The Moral Question: Interacting with Traditional Values” in Mortimer Sellers & James Maxeiner, Affirmative Action Policies and Judicial Review Worldwide (Athens, Greece: Springer International Publishing, 2016), 11–40 at 13.

[25] A reserved election is only called where a particular community has not been represented in the Presidential Office at least once within the past five terms of the EP.

[26] The assumption is that the electorate has reached a post-racial state of voting when a minority candidate is elected without the need of any quota or affirmative action.

[27] Constitution of the Republic of Singapore (1999 Reprint) Art 39A.

[28] Ibid, Art 68–92. In particular, see Art 68 and Art 78.

[29] Ibid, Art 12, 15 and 152. See also Chan Sek Keong, Multiculturalism in Singapore (2013) 25 SAcLJ at p 98, [29].

[30] For instance, Art 15 was instrumental in the case of Vijaya Kumar s/o Rajendran v AG [2015] SGHC 244, which had to do with the constitutionality of a police permit that prohibited the applicants from playing “music, gongs, drums or music producing equipment such as portable radio and cassette recorder” during their Thaipusam procession, and the playing of certain drums were integral to the religion of the applicants.

[31] Kenneth Paul Tan, “How Singapore is fixing its meritocracy” The Washington Post (16 April 2016) < https://www.washingtonpost.com/news/in-theory/wp/2016/04/16/how-singapore-is-fixing-its-meritocracy/?postshare=7911460932318734&tid=ss_fb&utm_term=.ee978c40fe0f> (accessed 24 February 2017).

[32] Refer to the detailed explanation of written submissions in the Constitutional Commission, Report of the Constitutional Commission 2016 (17 August 2016) at pp 84–85, paras 5.10 and 5.11. (Chairman: Chief Justice Sundaresh Menon). It was submitted that “a portion of voters will feel a greater affinity to someone who is racially similar to themselves”.

[33] See also part III C (2) of this paper.

[34] See also part III C (2) of this paper.

[35] Presidential Elections Act (Cap 240A) s 8E(2).

[36] See generally Thio Li-ann, “(S)electing the President of Singapore – Diluting Democracy?” (2007) 5 Int’l J Const L 526.

[37] Presidential Elections Act (Cap 240A) s 8G(4)(b).

[38] When asked, Minister Chan Chun Sing only clarified that “this [method of assessing race] is not new; it has worked well in the GRC context.” Speech during the Second Reading of the Presidential Elections (Amendment) Bill, Singapore Parliamentary Debates, Official Report (6 February 2017) vol 94, column numbers not available (Mr Chan Chun Sing, Minister, Prime Minister's Office).

[39] This idea of engaging a Community Committee is similar to the Committee established for the purpose of the GRC system, found in Art 39A(2)(b).

[40] Chua Beng Huat, Taking Group Rights Seriously: Multiracialism in Singapore (Australia: Murdoch University Asia Research Centre, 2005), 1–25 at 4–5. These groupings are also like those found in Art 39A, regarding the GRCs, and section 27A of the Parliamentary Elections Act (Cap 218, 2011 Rev Ed).

[41] Ibid, at 6.

[42] The Indian and others communities have increased from 8.6% and 2.3% of the entire population in 2006 to 9.1% and 3.2% in 2016 respectively. Population Trends 2016 < http://www.singstat.gov.sg/docs/default-source/default-document-library/publications/publications_and_papers/population_and_population_structure/population2016.pdf> (accessed 1 March 2017).

[43] Shaw v Reno 509 U.S. 630 at 648 (1993). The US case had to do with whether a congressional redistricting plan in North Carolina, which had the effect of segregating races for purposes of voting, offended the equality of representation. It was mentioned that “when a district obviously is created solely to effectuate the perceived common interests of one racial group, elected officials are more likely to believe that their primary obligation is to represent only the members of that group, rather than their constituency as a whole. This is altogether antithetical to our system of representative democracy.”

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

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The PDF version of this article is available here.

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

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).

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First Steps Towards a Gender-Neutral Maintenance Obligation

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The PDF version of this entry can be found here.

First Steps Towards a Gender-Neutral Maintenance Obligation

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>.