CONSUMER PROTECTION, STATUTE AND

• Date: 01 December 2016
• Published date: 01 December 2016
• Citation: (2016) 28 SAcLJ 1079
• Author: Jeannie Marie PATERSON BA, LLB, PhD (Monash University); Associate Professor, Melbourne Law School, University of Melbourne. Veronica WONG BA, JD (University of Melbourne); Solicitor at Alderuccio Solicitors, Melbourne.

THE ONGOING INFLUENCE OF THE GENERAL LAW

IN SINGAPORE

Consumers seeking redress for misleading and other types of wrongful conduct by traders will usually seek to rely on the rights provided under consumer protection statutes, primarily in Singapore the Consumer Protection (Fair Trading) Act (Cap 52A, 2009 Rev Ed) (“CPFTA”), even where well-established doctrines in equity, contract and tort may also be available to provide relief. This body of general law doctrines and principles nonetheless remains influential in interpreting and applying the provisions of consumer protection statutes. This article considers the rights and remedies given to consumers under the CPFTA, the role of the general law in interpreting these provisions and also, given the inevitable scarcity of relevant case law, the imperative to have regard to the judicial interpretation of comparable legislative regimes in other jurisdictions.

I. Introduction

1 In 2014 The Straits Times reported the case of a Vietnamese tourist who tried to buy the latest iPhone in Singapore. The tourist paid $950 for the phone, and was then asked by the trader to pay an additional $1,500 as the fee for a warranty pursuant to a contract signed by the tourist. The tourist had been asked if he wanted a warranty accompanying the sale of the phone but assumed it was complimentary. The tourist was not told he would have to pay for the warranty. The tourist had then been asked to sign an agreement, but “did not scrutinise it as his English was not fluent, and he thought Singapore was a safe place to shop”. After the trader requested the further $1500, the tourist left the shop without the phone and having forfeited the $950 he had paid towards the purchase.1 Although the details of the transaction are somewhat scanty, the inference from the article is that the trader took advantage of the inexperience and poor language skills of the tourist to trick him into signing a contract containing an exorbitantly expensive warranty.

2 The problems facing this hapless tourist may well have been satisfactorily addressed by well-established principles of contract and equity. As every student of contract law knows, while signature binds a party to the terms of a contractual document regardless of whether he or she read or understood those terms,2 the rule is not conclusive. The signature rule will not apply where some form of vitiating factor, such as mistake, misrepresentation, undue influence or duress, has compromised the consent of the party who has signed, which would appear to have been the case in the reported scenario.3 However, it is likely that, had the tourist pursued the matter, he would have turned to statute as the most easily accessible source of legal relief.

3 In Singapore, the Consumer Protection (Fair Trading) Act4 (“CPFTA”) provides extensive and relatively straightforward rights of redress to consumers who have been induced to enter a contract as a result of specified forms of “unfair practice”.5 Nonetheless, principles from contract, tort, equity and restitution continue to prove a pervasive source of influence on the development of consumer protection law. Whilst not always explicitly drawn upon by consumer protection statutes, the general law is often of assistance in the process of understanding what the content and scope of the statutory provisions should be. Indeed, the CPFTA provides a good illustration of the different ways in which statute may itself determine the role for the general law in informing the interpretation of its substantive and remedial provisions.

4 This article uses the story of the unfortunate Vietnamese tourist as a prompt for exploring the rights and remedies given to consumers under the CPFTA and the role of the general law in interpreting and applying the provisions of this regime. Part II6 provides an overview of the statutory regime and the opportunities for recourse to the general law in interpreting that regime. Part III7 considers the nature of an unfair practice under the CPFTA. Part IV8 considers the rights of redress provided to consumers in response to an unfair practice. Part V9 concludes. The discussion throughout draws on the experience of Australian courts in applying cognate provisions under the Australian Consumer Law,10 and its precursor the Trade Practices Act 1974, as a useful resource in the light of the sparse body of case law applying the CPFTA.

II. Consumer protection and general law influences

A. The consumer protection framework

5 The primary consumer protection statutes in Singapore are the Unfair Contract Terms Act11 and the CPFTA. The Unfair Contract Terms Act regulates the use of exclusion and limitation clauses in consumer contracts and is a substantial re-enactment of the English Unfair Contract Terms Act 1977.12 The CPFTA provides a “consumer”13 who has entered into “consumer transaction”14 involving an “unfair practice”15 with a right to commence an action16 against the supplier for some form of redress.17 The CPFTA was based on the Saskatchewan Consumer Protection Act18 and also has similarities with the European

Union's Unfair Commercial Practices Directive19 and the Australian Consumer Law.20

6 The objectives of the Parliament in enacting the CPFTA were to protect consumers while balancing the interests of traders. In the second reading of the CPFTA in Parliament, the Minister of State for Trade and Industry, Raymond Lim Siang Keat, stated:21

On the one hand, the Act must provide adequate safeguards for consumers and allow them legal recourse to claim against unfair practices. On the other hand, we do not want to over-regulate and add to business costs. Amongst traders, those who engage in unfair practices are a minority. It will be unfair to impose undue regulatory costs on the majority who conduct business ethically. This would also be bad for consumers, for such costs will in the end be passed back to them.

The CPFTA seeks to achieve this balance between the interests of consumers and traders by providing provisions for the protection of consumers but also maintaining an expectation that consumers will take reasonable steps to protect their own interests. The Minister explained that:22

… the principle of caveat emptor remains. That is the operating paradigm. What does it mean when we say ‘buyers beware’? It means that, as a society, we believe that the individual should take responsibility for his or her own action when he or she enters into a transaction.

7 There are few reported cases applying the protections in the CPFTA.23 This is not altogether surprising and certainly does not indicate some form of deficiency in the regime. Rather it reflects the primacy of alternative dispute resolution methods in addressing consumer-trader disputes. There is no regulator overseeing the operation of the CPFTA. Instead reliance is placed on consumers themselves enforcing their rights under the legislation. The Consumers Association of Singapore reports that most consumer complaints received by it are settled directly by consumers after receiving advice or letter writing assistance,24 or by negotiation and mediation.25 It will usually be preferable for consumer-trader disputes to be resolved by these informal means26 rather than in court.27 Consumer claims typically involve relatively small amounts of money that do not justify litigation and consumers typically do not have the resources to pursue a claim through court in any event.

8 Where a dispute cannot be resolved informally, the CPFTA provides that a consumer who has entered a consumer transaction involving an “unfair practice” may commence an action in “a court of competent jurisdiction against the supplier”.28 Most small amount consumer claims will be heard in the Small Claims Tribunal (“SCT”). The rationale behind the establishment of the SCT was “for disputes to be resolved in a quick, efficient and cost-effective manner”.29 Under the Small Claims Tribunals Act30 the tribunal is directed to balance the

demands of substantive justice and of justice according to the law.31 Thus, the Act provides that:32

A tribunal shall determine the dispute according to the substantial merits and justice of the case, and in doing so shall have regard to the law but shall not be bound to give effect to strict legal forms or technicalities.

The body of law that will determine the “substantial merits and justice of the case” is largely found in the CPFTA. The protections provided to consumers in this statute can be characterised as an attempt to avoid “strict legal forms or technicalities” because, as we shall see, they replicate the protective themes found in the general law of contract, equity and tort in a simplified form. Inevitably, therefore, understanding the rights of redress in response to unfair practices under the CPFTA involves thinking about the relationship between statute and the general law.

B. Statute and the general law

9 The relationship between statute and the general law with which it overlaps is a topic of increasing importance to legal scholars, practitioners and courts.33 In this “age of statutes”34 it is almost impossible to consider an area of private law without colliding with statute.35 In the context of consumer protection, statute can no longer be treated as the “elephant in the room”,36 nor can the relationship between the two sources of law be thought of as “oil and water”.37 Consumer

protection statutes such as the CPFTA are situated squarely in a field traditionally governed by tort, contract and equity and will usually, either explicitly or by necessity, require courts to draw on this body of general law to determine the meaning and scope of the protections granted by that statute.38

10 The process of statutory interpretation must be undertaken with a primary focus on the words and the purposes of the statute.39 Nonetheless, recourse to the general law principles with which the statute...