How Weng Fan and others v Sengkang Town Council and other appeals

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 09 November 2022
• Neutral Citation: [2022] SGCA 72
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeals Nos 196, 197, 198, 199 and 200 of 2019
• Published date: 12 November 2022
• Year: 2022
• Hearing Date: 25 February 2021
• Plaintiff Counsel: Netto Leslie, Netto Leslie née Lucy Michael, Roqiyah Begum d/o Mohd Aslam, and Chiam Jia-An (Netto & Magin LLC),Chelva Retnam Rajah SC, Eusuff Ali s/o N B M Mohamed Kassim, Yong Manling Jasmine, Rachel Hui Min De Silva and Samantha Tan Sin Ying (Tan Rajah & Cheah)
• Defendant Counsel: Chin Li Yuen Marina SC, Toh Zhen Teck Jeremy, Yeow Yuet Cheong and Teo Jin Yun Germaine (Tan Kok Quan Partnership),Chan Ming Onn David, Joseph Tay Weiwen, Fong Zhiwei Daryl, Lin Ruizi and Tan Kah Wai (Shook Lin & Bok LLP)
• Subject Matter: Equity,Fiduciary relationships,Duties,When arising,Trusts,Accessory liability,Recipient liability,Tort,Negligence,Duty of care,Breach of statutory duty,Duties imposed by statute,Statutory Interpretation,Construction of statute
• Citation: [2022] SGCA 72

Sundaresh Menon CJ (delivering the judgment of the court): Introduction

These appeals raise the important question of whether a public servant exercising statutory duties under public law is also subject to duties under private law (specifically, fiduciary and equitable duties). It is alleged and was found in the court below that fiduciary and equitable duties are owed and were breached by the members (both elected and appointed) and senior employees of Aljunied-Hougang Town Council (“AHTC”) and entities associated with the latter from 2011 to 2015. Within this period, AHTC was reconstituted as Aljunied-Hougang-Punggol East Town Council (“AHPETC”) from 22 February 2013 to 30 September 2015 to include the Single Member Constituency (“SMC”) of Punggol East (“Punggol East SMC”). On 1 October 2015, AHPETC was reconstituted as AHTC while Punggol East SMC was reconstituted to come under Pasir Ris-Punggol Town Council (“PRPTC”). With effect from 1 December 2015, all the properties, assets and liabilities in respect of Punggol East SMC were transferred to PRPTC. On 28 October 2020, all the assets and liabilities of PRPTC were transferred to Sengkang Town Council (“STC”), and it is on this basis that STC replaced PRPTC as a party in these appeals. We will elaborate on these developments later.

Town Councils were established as a feature of local administration and housing estate management in 1989. Since then, they have come to perform an integral and essential public role for their residents. Town Councils are charged with the responsibility to control, manage, maintain and improve the common property of our public housing estates. Town Councils, being creatures of statute, are unique public bodies corporate incorporated pursuant to the Town Councils Act (Cap 329A, 2000 Rev Ed) (the “TCA”). A host of subsidiary legislation has also been enacted under the TCA, chief amongst which and relevant for present purposes is the Town Councils Financial Rules (Cap 329A, R 1, 1998 Rev Ed) (the “TCFR”). The TCA, supplemented by the TCFR, collectively provide the legislative framework for the financial management of Town Councils.

Before the present suits were filed, this court had occasion to address a number of related issues that arose out of the same underlying factual context in Attorney-General v Aljunied-Hougang-Punggol East Town Council [2016] 1 SLR 915 (“AG v AHPETC”). We held there that, if a Town Council fails to act in accordance with the applicable principles and guidelines set out in the TCA and TCFR, the Housing and Development Board (“HDB”) may apply for relief under s 21(2) of the TCA to compel the Town Council to perform the duties arising under the TCA and/or the TCFR that it had failed to carry out. In AG v AHPETC, it was not disputed that there were various breaches of these duties. However, it was unclear whether all the potential breaches had been uncovered and whether those that had been uncovered remained unresolved. We therefore ordered the then-constituted AHPETC to, among other things, appoint an accountant to assist in identifying any remaining breaches and to advise on the steps that should be taken in order to remedy the breaches that remained outstanding.

AG v AHPETC thus concerned the question of how a Town Council, as a public body, may be compelled by a statutory mechanism to carry out its statutory duties. However, as a Town Council is a body corporate run by individual persons, the question facing this court is whether the Town Council’s members and senior employees can be made personally liable for the Town Council’s breaches of its statutory duties under the TCA and the TCFR. This was the question that was raised before the High Court judge (the “Judge”). In Aljunied-Hougang Town Council and another v Lim Swee Lian Sylvia and others and another suit [2019] SGHC 241 (the “Judgment”), the Judge found several current and former Town Council members liable for various breaches of fiduciary duties and equitable duties of skill and care owed to AHTC between 2011 and 2015 (including when it was reconstituted as AHPETC from 22 February 2013 to 30 September 2015).

It is undisputed that there were a number of accounting and governance lapses, which were the focus in AG v AHPETC, constituting breaches of the TCA and the TCFR by the relevant Town Council. But the present appeals raise a distinct legal question: are the members and senior employees of a Town Council subject to fiduciary, equitable and/or tortious duties when they act on behalf of a Town Council to carry out the statutory duties that are imposed on it by the TCA and TCFR? A fiduciary obligation is an equitable and exacting duty. As a result, fiduciary duties are not readily imposed. The imposition of fiduciary duties on public officers exercising statutory duties gives rise to a range of interrelated issues, including the question of whether the Town Council’s members and senior employees are subject to any other private legal duties (such as tortious duties), and the proper interpretation and effect of a statutory immunity clause affording public officers protection from personal liability (in this case, s 52 of the TCA). This case thus presents us with the opportunity to clarify the law in this area where public and private law intersect. We will consider these issues in this judgment.

Given the number of issues involved in the present judgment, it is helpful to set out a table of contents for reference:

The parties and persons involved The plaintiffs

The Judge heard HC/S 668/2017 (“Suit 668”) and HC/S 716/2017 (“Suit 716”) (collectively, the “Suits”) together. The Suits were not consolidated but were ordered to be tried together at the same time. The trial was bifurcated and the Judgment was concerned only with the liability of the defendants. The plaintiff in Suit 668 was AHTC while the plaintiff in Suit 716 was originally PRPTC (later replaced by STC for the purposes of the present appeals).

The plaintiffs have evolved in the course of the time covered by the events leading to the Suits. It will therefore be helpful for us to trace their development.

On 7 May 2011, the 2011 General Elections (the “2011 GE”) took place. Prior to the 2011 GE, Aljunied Town Council (“ATC”) and Hougang Town Council (“HTC”) were managed by Town Council members from the People’s Action Party (“PAP”) and the Workers’ Party (“WP”) respectively. In the 2011 GE, candidates from the WP were elected to the electoral division of the Aljunied Group Representation Constituency (“GRC”), as well as to the Hougang SMC as Members of Parliament (“MPs”). This was the first time in Singapore’s history that a political party other than the ruling PAP had been elected as MPs for a GRC. The candidates elected were: for Aljunied GRC, Mr Low Thia Khiang (“Mr Low”), Ms Sylvia Lim (“Ms Lim”), Mr Chen Show Mao (“Mr Chen”), Mr Pritam Singh (“Mr Singh”) and Mr Muhamad Faisal bin Abdul Manap (“Mr Faisal”); and for Hougang SMC, Mr Yaw Shin Leong (“Mr Yaw”).

On 27 May 2011, pursuant to the Town Councils (Declaration of Towns) Order 2011 (S 263/2011), ATC and HTC merged to form AHTC. On 26 May 2012, a by-election for Hougang SMC was held and Mr Yaw was replaced by Mr Png Eng Huat (“Mr Png”), also from the WP. On 26 January 2013, another candidate from the WP, Ms Lee Li Lian, was elected as the MP for the constituency of Punggol East SMC in a by-election. With effect from 22 February 2013, AHTC was reconstituted as AHPETC to include Punggol East SMC, pursuant to the Town Councils (Declaration of Towns) (Amendment) Order 2013 (S 97/2013).

On 11 September 2015, following the 2015 General Elections (the “2015 GE”), the candidate from the PAP, Mr Charles Chong, was elected in place of Ms Lee Li Lian as the MP for the constituency of Punggol East SMC. Consequently, on 1 October 2015, AHPETC was yet again reconstituted as AHTC while the Punggol East SMC was reconstituted as part of PRPTC, pursuant to the Town Councils (Declaration of Towns) Order 2015 (S 577/2015). Pursuant to this Order, AHPETC also transferred all the property, assets and liabilities in respect of Punggol East SMC to PRPTC with effect from 1 December 2015. As a result, any rights or causes of action that related to the transferred undertaking of Punggol East SMC could be enforced by or against PRPTC. It was on this basis that PRPTC commenced Suit 716. However, as we have mentioned and will elaborate later, all the assets and liabilities of PRPTC were transferred to STC on 28 October 2020. A tabular representation of the changes over the years may be depicted as follows:

27 May 2011 to 21 February 2013	22 February 2013 to 30 September 2015	1 October 2015 to date
AHTC	AHPETC	AHTC and PRPTC (and then STC)

In this judgment, for ease of reference, we shall refer to AHTC, AHPETC, PRPTC and STC from 27 May 2011 simply as “AHTC” unless there is a reason to distinguish between any of these parties. We will refer to AHTC and PRPTC/STC collectively as the “Plaintiffs”.

The defendants

Section 8(1) of the TCA provides that a Town Council shall consist of both elected members and appointed members. An elected member is defined under s 2(1) of the TCA as an MP for any constituency comprised within the town for which the Town Council is established; in other words, an elected MP becomes a member of the Town Council by virtue of his or her election to Parliament. One of these elected members is then appointed and designated as Chairman of the Town Council. By contrast, an appointed member is defined in s 2(1) of the TCA as a person who has been appointed by the Chairman of the Town Council. Section 8(3) of the TCA requires that each Town Council should have a minimum of six appointed members.

The Plaintiffs commenced the Suits against several of AHTC’s former and current Town Council members (both elected and...