Tort Law
| Date | 01 December 2013 |
| Author | Kumaralingam AMIRTHALINGAM LLB (Hons), PhD (Australian National University); Professor, Faculty of Law, National University of Singapore; Senior Director (Research & Policy), Criminal Justice Division, Attorney-General's Chambers. Gary CHAN LLB (Hons), MA (National University of Singapore), LLM, BA (University of London); Associate Professor, School of Law, Singapore Management University. |
| Published date | 01 December 2013 |
24.1 The case of Neo Siong Chew v Cheng Guan Seng[2013] SGHC 93 (‘Neo Siong Chew’) involved claims in both negligence and breach of statutory duty in respect of personal injuries which the plaintiff sustained in an accident involving an excavator operated by the first defendant. The second defendant, the main contractor for the construction of an office building, appointed a company to cut and uproot trees at the site. The company in turn subcontracted the job to the third defendant. The third defendant hired an excavator from a contracting firm to do the job, and the firm subcontracted the work to the first defendant.
24.2 The plaintiff alleged that the second defendant breached ss 11(a) and 11(b) of the Workplace Safety and Health Act (Cap 354A, 2009 Rev Ed) (‘WSHA’) for failing to ensure that there was a safety supervisor on site to regulate a safe system of work. However, the learned judge found that there was no evidence that Parliament intended to confer such a private right of action for a breach of statutory duty: Tan Juay Pah v Kimly Construction Pte Ltd[2012] 2 SLR 549 at [54]. Both the WSHA and parliamentary materials (see Singapore Parliamentary Debates, Official Report (17 January 2006) vol 80) are silent on the issue of parliamentary intention to confer a private right of action. Further, the breach of s 11 of the WSHA attracts criminal penalties (see s 20 read with s 50 of the WSHA) which is one factor against the finding of such parliamentary intention (Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd[2009] 4 SLR(R) 788 at [210]). As for the plaintiff's contention that the third defendant breached ss 12(2) and 12(3) of the WSHA because it failed to take reasonable safety measures to ensure that the excavator would not collide with the plaintiff, Lai J found there were no reasonably practicable measures that the third defendant could have taken to prevent the collision. Hence, there was no breach of statutory duty to begin with. The liability of the first defendant was based on the tort of negligence. The claims in negligence and the defence of contributory negligence are discussed below, paras 24.61–24.62.
24.3 The case of Alwie Handoyo v Tjong Very Sumito[2013] 4 SLR 308 concerned a sale and purchase agreement for the purchase of shares in an Indonesian company. Antig Investments Pte Ltd (‘Antig’), a wholly-owned subsidiary of a Singapore public-listed company (‘MEGL’), purchased the shares for US$18m from the plaintiffs and respondents (Tjong and Iman) and Herman. According to the sale and purchase agreement, the purchase price of US$18m was to be paid partly in cash and partly by an allotment and issuance of shares in MEGL. Of the purchase price of US$18m, US$6m was to be paid to Tjong, US$10m in cash and shares to Aventi Holdings Ltd (‘Aventi’), and US$2m in cash and shares to Overseas Alliance Financial Ltd (‘OAFL’). Aventi and OAFL were the offshore entities of MEGL. Alwie, an Indonesian businessman and the appellant in Civil Appeal No 82 of 2012, was (together with Johanes) the directing mind and will of OAFL and Aventi. Chan, the appellant in Civil Appeal No 83 of 2012, was a key person for MEGL and Antig in the negotiations and execution of the sale and purchase agreement.
24.4 The plaintiffs claimed to be the beneficial owners of certain MEGL shares which OAFL had taken into possession without the consent of the plaintiffs, and thereby converted the plaintiffs' right to ownership or immediate possession of the MEGL shares. There were other claims based on Chan's alleged fraudulent misrepresentation, Chan's alleged personal guarantee to Tjong that the latter would receive the full US$18m, and claims based on resulting trust and/or constructive trust and unjust enrichment. The High Court had found in favour of the plaintiffs in respect of, inter alia, the misrepresentation and conversion claims.
24.5 On appeal, the Court of Appeal held that there was no conversion. It interpreted the amended cl 4.02(2) of the sale and purchase agreement, which stated that Aventi and OAFL were parties ‘authorised to receive [the sums] for and on behalf of the [Plaintiffs]’, as reflecting the parties' intention that the US$12m was to be paid to Aventi and OAFL as third party beneficiaries nominated by the plaintiffs, and not as agents of the plaintiffs: at [21] and [83]. As the clause stated clearly the values of the cash payments and MEGL share payments due to both Aventi and OAFL, Tjong would have known that a substantial amount would be paid to Aventi and OAFL. The Court of Appeal accepted the contention of the appellant that the deal was plausibly structured in the following manner: the plaintiffs would sell their stake in the Indonesian company for US$6m; the contractual purchase price would be inflated to US$18m; and Alwie and Johanes would pocket the difference for facilitating the deal by structuring US$12m of the purchase price to be paid through OAFL and Aventi. Hence, the conversion claim failed.
24.6 The Court of Appeal nevertheless proceeded to examine specific points relating to the conversion claim. It clarified that the conversion claim was not premised on the vindication of proprietary rights. Instead, it arose out of the respondents' contractual rights under the first sale and purchase agreement. Secondly, the MEGL shares in the form of share certificates, which were tied to the book entries in the Central Depository (‘CDP’) register, were capable of being the subject matter of a conversion claim. As explained by the Court of Appeal, although the shares were scripless for the purposes of trading, they were backed by certificates. The account holder to whom the shares were issued would have a book entry under his account reflecting his title to the shares, and would enjoy the same rights and privileges as a shareholder of the issuer. When the account holder transferred shares electronically, his account and that of the transferee's would be updated to reflect the change in title to the shares. In the present case, the scripless shares issued to OAFL could be traced to the book entry in its CDP account which was based on the share certificates issued by MEGL which, though registered in CDP's name, were expressed to be for OAFL's account with the CDP.
24.7 Thirdly, the respondents never had actual possession of the MEGL shares since the shares were allotted and issued directly to OAFL's nominee. Moreover, the respondents did not have any possessory interest in the MEGL shares but merely a contractual right that Antig make the payments to OAFL. The High Court's decision that the plaintiffs had a right to immediate possession of the MEGL shares premised on bailment and agency was overruled. The MEGL shares were never owned by the respondents and prior to their issuance, they could not have been owned by anyone, including Antig. Antig's direct issuance and allotment of the MEGL shares to OAFL did not create a bailment relationship between Antig and OAFL as Antig did not retain any possessory interest in the shares. Further, no evidence of any agency relationship between OAFL and the respondents was found. In particular, there was no evidence that OAFL had consented to receive the MEGL shares as agents for the respondents.
24.8 In Thomas Teddy v Kuiper International Pte Ltd[2013] SGHC 7 (‘Thomas Teddy’), the appellants sued for conversion in respect of a computer file server belonging to the first appellant. The second appellant, who is the wife of the first appellant, was employed as an operations manager of the respondent company. She let the respondent use her husband's computer file server. When her employment was terminated, the appellants sought return of the file server. The respondent's solicitors replied that it was ready to return the file server and asked for three days' notice prior to the second appellant sending her contractors to dismantle and remove the file server. However, the second appellant did not respond for three months. The respondent's solicitor wrote to the appellants' solicitor asking them to collect the file server on or before 20 August 2012. The second appellant's solicitors sent a facsimile on 27 August 2012 stating that the second appellant would be performing checks after re-assembling the server and reserved the right to claim for any damages to the server.
24.9 With respect to the claim in conversion, there must be an intention on the part of the defendant to act inconsistently with the owner's proprietary right. In this regard, the defendant's refusal to return the owner's property must be unconditional and unjustifiable. Here, the respondent's reply on 28 August 2012 was merely a suggestion to postpone the collection date pending resolution of the issue of possible damage to the file server, and was not an ‘unjustified refusal’ or an expression of an intention inconsistent with the appellants' ownership of the file server. Nevertheless, the respondent was liable for conversion for unlawful detention of the file server for that short period between 2 to 7 September 2012 for its subsequent unreasonable conduct and for failing to respond with a proposal to resolve the issue of the file server in their possession.
24.10 The next issue was whether substantial damages could be ordered against a defendant who did not use the owner's property for his own benefit and caused no actual loss to the owner. The judge referred to the cases of Siew Kong Engineering Works v Lian Yit Engineering Sdn Bhd[1993] 1 SLR(R) 736; Strand Electric & Engineering Co Ld v Brisford Entertainments Ld[1952] QB 246; and Yenty Lily v ACES System Development Pte Ltd[2013] 1 SLR 577 (‘Yenty Lily (HC)’)). His Honour concluded that it was not necessary to establish the actual use of the property by the defendant for its own benefit before the owner of the property has a right to...
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