SGB Starkstrom Pte Ltd v Commissioner for Labour

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 21 April 2016
• Neutral Citation: [2016] SGCA 27
• Citation: [2016] SGCA 27
• Docket Number: Civil Appeal No 89 of 2015
• Date: 21 April 2016
• Hearing Date: 29 March 2016
• Plaintiff Counsel: Anparasan s/o Kamachi, Grace Tan Hui Ying and Audrey Wong (KhattarWong LLP)
• Year: 2016
• Defendant Counsel: Kwek Mean Luck, V Jesudevan, Nicholas Lim Kah Hwee, Koo Zhi Xuan and Seah Ee Wei (Attorney General's Chambers),Patrick Ang (Rajah & Tann LLP) as amicus curiae.
• Court: Court of Appeal (Singapore)
• Published date: 27 April 2016

Sundaresh Menon CJ (delivering the grounds of decision of the court):

Mr Tan Yun Yeow (“the Injured Employee”) was employed by the appellant, SGB Starkstrom Pte Ltd. Following a tragic workplace accident, the Injured Employee suffered serious injuries and became mentally incapacitated as a result. The Injured Employee’s brother, Mr Rodney Tan, was eventually appointed as his deputy under the Mental Capacity Act (Cap 177A, 2010 Rev Ed) (“Mental Capacity Act”). However, prior to his appointment as a deputy, Mr Rodney Tan purported to make a claim on behalf of the Injured Employee under the Work Injury Compensation Act (Cap 354, 2009 Rev Ed) (“WICA”) (“the Disputed Claim”). The WICA establishes a statutory compensation scheme that is available to employees who suffer injuries in the course of employment. This statutory compensation scheme generally offers a lower cost alternative to pursuing a common law claim for damages arising from workplace negligence. However, the heads of damages that may be recovered are constrained by the terms of the WICA. An employee who elects to pursue his claim under the WICA will also forgo his rights at common law. The filing of the Disputed Claim therefore had important potential consequences for the Injured Employee.

The Commissioner of Labour (“the Commissioner”) initially accepted the Disputed Claim, and issued a Notice of Assessment to both the appellant and Mr Rodney Tan pursuant to s 24(2)(a) of the WICA (“the Notice of Assessment”). Having received the Notice of Assessment, Mr Rodney Tan then resiled from the position he had taken earlier and maintained that he wished and was entitled to pursue the claims of the Injured Employee at common law. The Commissioner did not agree with this initially, but changed her position upon receiving advice from the Attorney-General’s Chambers. She informed the appellant that the Disputed Claim was not a valid claim on the basis that Mr Rodney Tan did not have the authority at the material time to make a valid election on behalf of the Injured Employee to pursue his remedies under the WICA instead of under the common law.

On appeal, the primary question before us was whether Mr Rodney Tan had the capacity, prior to being appointed as a deputy under the Mental Capacity Act, to make an election on behalf of the Injured Employee to seek relief under the WICA. A second issue relating to the administrative law doctrine of substantive legitimate expectations was also raised, for the first time on appeal, by the appellant. In essence, the appellant asserted that it had a substantive legitimate expectation that the Disputed Claim was valid and bound the Injured Employee on the basis of the Commissioner’s representation that this was so. The appellant submitted that if it was correct on this, then even if the Disputed Claim was invalid in law, the court should nevertheless treat it as having been validly made and so foreclose the possibility of Mr Rodney Tan pursuing the Injured Employee’s claims for damages against the appellant at common law. It was said that this was appropriate so that the appellant’s legitimate expectations would not be frustrated. To put this in another way, the appellant’s case was that even if the incapacitated person had not, as a matter of law, compromised his common law rights, those rights had been compromised and extinguished, in effect, by the actions of the Commissioner.

After hearing the parties, we dismissed the appeal. We found that the Disputed Claim was not valid because Mr Rodney Tan did not have authority to make the Disputed Claim on behalf of his brother at the material time. Further, leaving aside the question of whether the doctrine of substantive legitimate expectations was part of Singapore law, we found that the doctrine had no possible application on the facts, and hence, could be of no possible assistance to the appellant. We gave brief reasons at the time we dismissed the appeal and now explain the reasons for our decision in more detail. We preface this with a summary of the key facts.

Background facts

The background facts are undisputed and are as described in the judgment below (Tan Lip Tiong, Rodney as Deputy for Tan Yun Yeow v The Commissioner for Labour and another matter [2015] 3 SLR 604) (“the Judgment”). The Injured Employee was employed by the appellant when he was involved in a serious workplace accident on 19 March 2009. He suffered serious injuries, which rendered him mentally incapacitated and incapable of managing his financial and personal affairs. On 22 January 2010, Mr Rodney Tan by his solicitors, M/s Marican & Associates (“Marican”), wrote to the Commissioner to inform her of the fact that Mr Rodney Tan was acting on behalf of the Injured Employee pursuant to a power of attorney that had been granted by the Injured Employee’s next-of-kin. On 10 May 2010, having received a medical report from the hospital confirming that the Injured Employee was incapacitated and incapable of managing himself or his affairs, the Commissioner asked Marican whether the Injured Employee’s next-of-kin wished to claim compensation on his behalf under the WICA. Acting on Mr Rodney Tan’s instructions, Marican replied on 20 May 2010 stating that its client did wish to claim compensation on behalf of the Injured Employee under the WICA. This letter formed the essence of the Disputed Claim. We emphasise that on 20 May 2010, Mr Rodney Tan had not yet been appointed under the legislation applicable at that time (see [8] below) to act on his brother’s behalf.

On 14 June 2010, the Commissioner issued the Notice of Assessment. The Notice of Assessment was served on Marican, the appellant, and the appellant’s insurers on 21 June 2010. The following notation was set out at Part II of the Notice of Assessment: Claim is found valid and the compensation payable is as stated: 125.00% X $180,000.00 (MAXIMUM) = $225,000.00

The cover letter, however, also noted the following: 2 … We understand that the injured employee is unable to come forward to claim his compensation award as he is of unsound mind and incapable of managing himself or his affairs. In such circumstances, the claim is payable to his estate and under the law, a person can only act for the injured employee’s estate if he or she has obtained a court order for the Committee of the Person and Estate of the injured employee. 3. Hence, you are advised to apply for the Committee of the Person and Estate of the injured employee. Thereafter, the appointed committee is advised to forward the following to the ministry for our verification before we process payment of compensation: a) A copy of the Committee of the Person and Estate of the injured employee; b) The completed Authority to Claim as attached; and c) The completed Interbank Giro form as attached.

The prevailing legislation at that time for the appointment of those empowered to act on behalf of persons lacking mental capacity was the Mental Disorders and Treatment Act (Cap 178, 1985 Rev Ed). Under that Act, the court was empowered to appoint a committee of the person and estate of an incapacitated person to manage his personal welfare and financial matters. This legislation and the associated practice of appointing a committee was later replaced by the Mental Capacity Act which provides instead for the appointment of a deputy to act on behalf of the mentally incapacitated person.

By the time Mr Rodney Tan received the Notice of Assessment, he had changed his mind about proceeding under the WICA. He therefore did not accept the Notice of Assessment. On 23 June 2010, Marican replied to the Commissioner’s Notice of Assessment stating, among other things, that “the injured employee lacks the capacity to make the decision whether to accept or reject the work injury compensation assessed by you”, and that they are “taking instructions from the injured employee’s next of kin … on the application and appropriate Orders to seek” under the Mental Capacity Act. In the meantime, on 12 July 2010, having received the Notice of Assessment albeit with the cover letter which contained an important qualification as to the Injured Employee’s capacity (as noted at [7] above), the appellant’s insurers paid the sum of $225,000 assessed as the compensation due under the WICA to the Commissioner.

On 23 August 2012, Mr Rodney Tan was finally appointed as the Injured Employee’s deputy under the Mental Capacity Act. Thereafter, the Commissioner wrote to Marican on 29 October 2012 to ask if Mr Rodney Tan “wished to claim compensation for the deceased”. A series of correspondence was then exchanged between them. By a letter dated 28 February 2013 to the Commissioner, Marican took the position that the Injured Employee had not made a valid application for compensation under the WICA and that the Notice of Assessment was therefore invalid. Subsequently, in its letters to the Commissioner dated 31 July 2013 and 29 August 2013, Marican indicated Mr Rodney Tan’s intention to pursue his brother’s claim under the common law and repeated its position that the Notice of Assessment was a nullity.

On 2 January 2014, the Commissioner replied to Marican taking the position that the 20 May 2010 letter (see [5] above) constituted a valid claim under s 11(1) of the WICA and that because an objection had not been timeously raised to the Notice of Assessment, it was deemed to be an order under the WICA. The Commissioner also observed that even if the Injured Employee’s claim under WICA was withdrawn, he might not be able to pursue a claim under the common law. The same position had been taken by the Commissioner in an earlier letter dated 5 August 2013 addressed to Mr Rodney Tan. These letters were not copied to the appellant.

On 21 March 2014, Mr Rodney Tan, as deputy of the Injured Employee, commenced judicial review proceedings in Originating Summons No 265 of 2014 (“OS 265/2014”) “to...