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

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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.

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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.

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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.

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[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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My Opinion: Too Many Lawyers?

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My Opinion: Too Many Lawyers?

The following is an article from the previous iteration of Juris Illuminae, published in September 2009 as Vol. 6, Issue 1. It was authored by Mr. Mubin Shah, the Associate Editor and Events Director of the 29th Editorial Board.

THE LEGAL PROFESSION ACT was amended in 2008,¹ giving effect to three important changes: the introduction of the Qualifying Foreign Law Practice scheme, enhancements to the Joint Law Venture structure and the liberation of Singapore law with respect to international commercial arbitration.

The 2008 Amendments were enacted to “provide greater flexibility to respond to changing business needs”. But I like to think that the Ministry of Law had us NUS students in mind while deliberating these amendments. The amendments create additional jobs for local undergraduates, by attracting Foreign Law Practices and increasing Singapore’s attractiveness as a hub for international arbitration. After all, the introduction of a second law school in Singapore inevitably leads to an increase in the number of lawyers competing for the same number of jobs. The first batch of SMU graduates increases the number of local undergraduates joining the legal industry in 2011 by at least 70%. Despite the shortage of lawyers in the legal workforce, Singapore would still need to create more jobs to accommodate all her local undergraduates.

To summarize, the amendments in 2008 encourage job growth in the legal sector. These amendments were made in anticipation of the influx of local graduates in 2011.

In 2009, a year later, the Legal Profession Act was amended again,² with the foreseeable effect of further enlarging the pool of lawyers in Singapore. The question that begs to be asked is: Are the 2008 and 2009 Amendments antagonistic to their own purposes? Ultimately, can the Amendments in 2008 provide enough jobs for the larger pool of legal practitioners we can expect in the future?

I think we should not be overly concerned.

While it is easier for experienced Singaporean lawyers practicing overseas to return home, realistically, the number of lawyers who qualify under this scheme is, for want of a better word, insignificant. The purpose of making it easier for these lawyers to receive their Practicing Certificates is to attract them back to Singapore. These lawyers are assets to the legal community in Singapore and will bring with them a wealth of knowledge, experience and potentially even a Foreign Law Practice.

The 2009 Amendments also allow overseas graduates with Lower Second Class degrees to practice immediately. I find this change slightly more controversial. Previously, there were 2 mechanisms in place to ensure that Singaporeans who studied abroad were competent to practice law back home. The first mechanism, which is still in place, limits the number of recognised overseas foreign law schools while the second mechanism, which has been scrapped, limited the number of overseas graduates taking the Bar examinations immediately upon their return. In the past, only Upper Second-Class degree holders could take the Bar examination. Now, anyone with a Second-Class degree can do so.

One of the benefits of studying law locally, in all honesty, used to be that everyone who graduated with a Second-Class degree could practice. This is arguably unfair to overseas graduates, but it is nevertheless a strong incentive to study in Singapore (or at least I thought so). In light of this amendment, more students would seriously consider the benefits of studying overseas, in certain colleges or universities, where the entry requirements (this is moot) are not as stringent as that of NUS. The pertinent question now is: will there be a sudden influx of students applying to overseas law schools?

At face value, the 2008 and 2009 Amendments seem to contradict each other. The establishment of Foreign Law Practices and an international arbitration hub in Singapore envisioned by the Government will not take place overnight, though we can look forward to a flourishing legal industry in the near future. But how near is near? Are we going to be caught off-guard by the sudden surge of lawyers in 2011, or will we be prepared in time?

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[1] Legal Profession (Amendment) Act 2008 (No. 19 of 2008)

[2] Legal Profession (Amendment) Act 2009 (No. 20 of 2009)

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

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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.

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[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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The SLR at the 3rd Asia Conference on International Arbitration

The SLR at the 3rd Asia Conference on International Arbitration

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.

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

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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 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.

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.

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 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.

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)

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[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

The PDF version of this entry can be found here.

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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.

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[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>.

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

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

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

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.

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[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].

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Good Faith in Contractual Agreements in Singapore

The PDF version of this entry can be found here.

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Good Faith in Contractual Agreements in Singapore

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

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[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.

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

The PDF version of this entry can be found here.

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

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.

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[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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