Singapore Shooting Association v Singapore Rifle Association

• Court: Court of Three Judges (Singapore)
• Judge: Judith Prakash JA,Andrew Phang Boon Leong JA,Sundaresh Menon CJ
• Judgment Date: 20 December 2019
• Docket Number: Civil Appeal No 103 of 2018
• Date: 20 December 2019

Singapore Shooting Association and others

and

Singapore Rifle Association

[2019] SGCA 83

Sundaresh Menon CJ, Andrew Phang Boon Leong JA and Judith Prakash JA

Civil Appeal No 103 of 2018

Court of Appeal

Charities — Charity proceedings — Authorisation of charity proceedings — Constituent club of charitable association pursuing declaratory relief against association for breaches of its constitution — Constituent club also pursuing claim in unlawful means conspiracy against council members of charitable association — Whether authorisation of Commissioner of Charities required to undertake charity proceedings — Whether authorisation of Commissioner of Charities had been obtained for claim in unlawful means conspiracy

Contract — Contractual terms — Rules of construction — Indemnity clause — Clause in agreement providing that constituent club of charitable association should indemnify association from claims, proceedings, costs, losses and expenses for losses caused by “its” activities — Whether association entitled to claim indemnity for expenses incurred out of its own unilateral action — Whether word “its” encompassed association

Courts and Jurisdiction — Court judgments — Declaratory — Constituent club of charitable association applying for declaratory relief concerning circular resolution allegedly passed in breach of association's constitution suspending its privileges — Whether application disclosed any real controversy

Legal Profession — Professional conduct — Counsel's conduct of litigation disproportionate — Counsel's duty to evaluate client's case — Proportionality in litigation

Tort — Conspiracy — Elements of unlawful means conspiracy — Actionable loss or damage — Investigation costs — Constituent club of charitable association bringing claim in tort of unlawful means conspiracy against council members of association for passing ultra vires circular resolution — Whether investigation costs amounted to actionable damage in tort of conspiracy — Whether investigation costs incurred by solicitors amounted to actionable damage in tort of conspiracy

Words and Phrases — “Any person interested in the charity” — Section 31(1) Charities Act (Cap 37, 2007 Rev Ed)

Words and Phrases — “Charity proceedings” — Section 31(8) Charities Act (Cap 37, 2007 Rev Ed)

Held, allowing the appeal in part:

(1) The Individual Defendants were not liable in the tort of unlawful means conspiracy. Legal fees incurred in investigating, detecting, unravelling and/or mitigating a conspiracy could not constitute actionable loss or damage for the purposes of this tort if they were in substance the sort of expenses that would be incurred in preparation for litigation, and so would be recoverable as costs in any action that might be brought: at [92].

(2) There were three reasons for this rule. First, if legal fees that could be recovered as costs were held to be sufficient to constitute actionable loss or damage in the tort of conspiracy, the element of damage would be satisfied in virtually every case where the litigant pleading conspiracy engaged a lawyer. This would too readily dilute the requirement that the claimant in an action in conspiracy had to prove that he had suffered loss or damage as a result of the conspiracy. Second, allowing solicitors' fees that were recoverable as costs to be recovered as damages instead would subvert the costs regime put in place to regulate the recoverability of such fees. Third, there was no authority to support SRA's contention that the legal fees incurred for the purposes of investigating a conspiracy could constitute actionable loss or damage in the tort of conspiracy: at [93] to [96].

(3) There was no evidence that the legal fees which SRA had paid its lawyers were for investigative work in respect of the conspiracy alleged by SRA, rather than for advisory work of the type that solicitors would typically do in preparing for litigation. SRA also could not rely on the expenses incurred by its council members in relation to the investigation of the conspiracy as constituting the relevant actionable loss or damage because: (a) the council members did not appear to have pursued any investigations on their own; and (b) SRA was not obliged to pay its council members, given that they were volunteers. SRA's claim in unlawful means conspiracy thus failed because the element of actionable loss or damage was not made out: at [103] to [113].

(4) SRA's application for declaratory relief in respect of the Circular Resolution failed because there was no real controversy underlying the declaratory relief sought by SRA at the time it brought its application. The entire purpose of the Circular Resolution was to suspend SRA's privileges at the NSC, as the relevant part of the Circular Resolution made clear. But SSA lost the power to manage and operate the NSC when its sub-lease with Sport SG was terminated on 6 February 2016, well before the present suit commenced on 6 May 2016. Although Sport SG gave SSA certain residual powers to manage the NSC after terminating the sub-lease, those powers were severely restricted by Sport SG's own conditions. This meant that SSA was unable to confer on or grant SRA any privileges at the NSC, which correspondingly entailed that it also could not suspend any such privileges. Thus, the real controversy underlying the declaratory relief sought by SRA had been extinguished by the time the present suit commenced, and the declarations granted by the Judge were set aside: at [122] to [127].

(5) SSA was not entitled to an indemnity from SRA for the cost of demolishing the Proprietary Range. On a natural reading of cl 10 of the Agreement, which required SRA to indemnify SSA and keep it indemnified against liabilities which SSA might suffer or incur “for any death, injury, loss and/or damage caused directly or indirectly by its activities, including the activities of its members, employees, independent contractors, agents, invitees or other permitted occupier at the [NSC]” [emphasis added], the word “its” therein could only refer to SRA. In other words, SRA would indemnify SSA in respect of all liability and loss that SSA might suffer or incur as a result of SRA's activities. This was also commercially sensible. In contrast, an absurd result would ensue if the word “its” was interpreted as referring to SSA instead. In that event, SRA would be required to indemnify SSA for liabilities that SSA had suffered or incurred as a result of SSA's own activities. No evidence was put forward to suggest that the parties had intended such a result: at [136] and [137].

(6) SSA's demolition of the Proprietary Range fell outside the indemnity in cl 10 as the cost of the demolition did not represent loss incurred by SSA that was caused by SRA's activities. SSA acted unilaterally in hiring its own contractor to demolish the Proprietary Range even though SRA had asked SSA to desist from doing so. Further, to give SSA the benefit of the indemnity in cl 10 would be to allow it essentially to benefit from its own wrong: at [138] and [139].

(7) SRA had standing to bring the present suit as a “person interested in the charity” under s 31(1) of the Charities Act. This was because SRA had a materially greater interest than ordinary members of the public in securing the due administration of SSA, given that: (a) it was a founder member and constituent club of SSA; and (b) it was seeking declaratory relief in respect of a resolution which it perceived not only to have been passed ultra vires SSA's constitution, but moreover, to have had the effect of depriving it of certain privileges to which it considered itself entitled: at [156] and [157].

(8) SRA had failed, however, to obtain the Commissioner's authorisation to bring the conspiracy claim against the Individual Defendants as required by s 31(2) of the Charities Act. The failure to obtain the Commissioner's authorisation to pursue a particular head of claim or relief barred a claimant from presenting that head of claim or relief as part of charity proceedings in the High Court. In the present case, the authorisation granted by the Commissioner had been restricted only to those claims by SRA that formed the subject of its application for declaratory relief; no authorisation had been sought by or granted to SRA for the conspiracy claim: at [161] to [165].

(9) SSA, too, had failed to obtain the Commissioner's authorisation for its counterclaim for an indemnity for the cost of demolishing the Proprietary Range. The value of the counterclaim was also far below the monetary threshold for proceedings to be brought in the High Court. Thus, the counterclaim, too, could not have supported the litigation in the High Court: at [169].

(10) In any event, both SRA's conspiracy claim and SSA's counterclaim for an indemnity did not fall within the ambit of “charity proceedings” as defined in s 31(8) of the Charities Act, which proceedings had to be brought in the High Court. “Charity proceedings” typically concerned the administration of a charity, as opposed to the enforcement of common law rights or equitable rights not relating to the administration of a charity. SSA's counterclaim for an indemnity was plainly concerned with the enforcement of its common law rights, and SRA's conspiracy claim similarly did not concern the administration of SSA as a charity as it was directed against the Individual Defendants only: at [171] to [173].

(11) Lawyers had a professional obligation to ensure that a proper risk-benefit evaluation was undertaken at each stage of legal proceedings. Even if a lawyer's client were prepared to take a matter to court and bear the expense of litigation, the lawyer, as an officer of the court, nevertheless owed a higher duty to the court to assess whether it would be in the interests of the administration of justice to pursue the matter: at [175] and [178].

(12) The present litigation was disproportionately conducted by SRA in several ways...