Tort Law

Published date01 December 2016
Date01 December 2016
Breach of statutory duty

26.1 The plaintiff in Tan Bee Hock v F G Builders Pte Ltd1 was riding a motorbike when he skidded on a metal plate placed by the defendant at the entrance to a condominium. The plaintiff sued for his injuries in negligence, nuisance, and breach of statutory duty. On the facts, Kannan Ramesh JC (as his Honour then was) found that there was nothing unsafe about the metal plate and dismissed the claims in nuisance and negligence. Having found that the defendants had not done anything unsafe, Ramesh JC also dismissed the breach of statutory duty action, and in doing so, observed that even if the defendant had breached the Code of Practice for Traffic Control at Work Zone (2006 Ed), this code was not intended to give rise to a private cause of action, being designed only to offer practical guidance on traffic safety rather than to impose legal obligations.

Conspiracy

26.2 United Overseas Bank Ltd v Lippo Marina Collection Pte Ltd2 concerns the vexed question of the attributability to a company of the knowledge of an officer or director of the company in the context of a conspiracy claim. The plaintiff bank made claims in conspiracy against all eight defendants involved and deceit against two of the defendants. The first defendant was a developer, the second and third defendants were real estate agents, and the fourth to eight defendants were the second and third defendants' relatives. The allegations were that:

(a) the eight defendants had conspired to obtain financing from the bank in contravention of cooling-off measures implemented by the Monetary Authority of Singapore; and

(b) the second and third defendants misled the bank into granting the loans based on inflated purchase prices.

The second and third defendants, in turn, alleged that the plaintiff's vice-president of home loans had knowledge of the matters in connection with the loans and had suggested the transfer of moneys between bank accounts (the very acts alleged by the plaintiff to be fraudulent). The second and third defendants, therefore, argued that such knowledge and acts of the employee or officer would be attributed to the plaintiff bank; and, as a result, the plaintiff should be estopped from making those claims against them.

26.3 The High Court applied the Re Hampshire Land3 principle to preclude the defendants from relying on the rules of attribution in order to attribute the knowledge and acts of the officer to the plaintiff so as to defeat the plaintiff's claims. In Re Hampshire Land Co4 (“Re Hampshire Land”), the issue was whether a building society which had lent money to a company should be imputed with the knowledge of its secretary regarding a defect in the resolution passed by the company's shareholders. The secretary's knowledge of the defect was acquired whilst he was acting as a secretary of the company. Vaughan Williams J held that the secretary's knowledge could not be imputed to the building society unless he owed the society a duty to disclose the information.5

26.4 In England, the attribution principle has been applied to prevent imputation of wrongdoing, or knowledge of such wrongdoing, by directors of a company that is a victim of such wrongdoing.6 In a related vein, the directors will not be entitled to raise the defence of ex turpi causa based on the attribution of knowledge to the company.7 This may be contrasted with the recent Hong Kong Court of Final Appeal decision of Moulin Global Eyecare Trading Ltd v Commissioner of Inland Revenue,8 in which knowledge of the directors as to their fraudulent inflation of profits was attributed to the company in respect of the liquidator's claim against the Commissioner of Inland Revenue to reclaim the taxes which were paid.

26.5 Ultimately, attribution rules should be applied in a manner sensitive to the context of the statutory rule in question and its underlying purpose. One public policy rationale is that a company should not be denied redress against a defaulting director by virtue of the attribution of the wrongdoer's culpability to the company.9 Seen in this light, the Re Hampshire Land principle should also be applied to the present case where the plaintiff bank was seeking to show that it was a victim of fraud in which the defendants were complicit.10 As a result, the defendants could not rely on the officer's knowledge to argue estoppel or lack of inducement on the part of the plaintiff.

26.6 The High Court also struck out the defence; 12 of the 15 averments in the defence were barred by the Re Hampshire Land principle. The remaining three averments raised contributory negligence, which, according to the learned judicial commissioner, were not viable defences to the torts of deceit and conspiracy.11

26.7 In Syed Ahmad Jamal Alsagoff v Harun bin Syed Hussain Aljunied,12 the plaintiffs sought a declaration that they were entitled to certain leasehold interests in three properties. They alleged that in 1994, the fourth to seventh defendants purportedly conveyed the reversionary and leasehold interests in the properties to the third defendant and, subsequently, the same parties entered into a deed of rectification and confirmation. In addition, the plaintiffs claimed that the conveyance and deed were executed either in fraud and/or conspiracy. Whilst the claim relating to the leasehold interests succeeded, the latter claims were dismissed.

26.8 With respect to the fraud claim, the plaintiffs failed to plead the elements of a specific cause of action. Aedit Abdullah JC held that it was not sufficient merely to plead fraud simpliciter. More specifically, the pleadings did not allege any representation by the defendants, nor any inducement or reliance by any party, both of which are necessary elements to establish the tort of deceit or fraudulent misrepresentation.

26.9 As for the conspiracy claim, the actions of the fourth to seventh defendants in making an ex parte application to have themselves appointed as trustees of certain trusts did not involve the other defendants or any common design amongst them. Thus, the plaintiffs

failed to prove a combination or an agreement amongst the defendants in pursuit of a common design, which is a requirement in conspiracy whether by lawful or unlawful means. With respect to lawful means conspiracy, the learned judge observed that there was a lack of evidence pertaining to any predominant purpose on the part of the defendants to injure the plaintiffs. Moreover, Abdullah JC noted that “a wrong assertion of property rights is not in itself necessarily a tort” and will not give rise to unlawful means conspiracy.13

26.10 In Beyonics Technology Ltd v Goh Chan Peng,14 the first plaintiff, Beyonics Technology Ltd, a company incorporated in Singapore, and the second plaintiff, a subsidiary company of the first plaintiff, were part of the “Beyonics Group”. The first plaintiff claimed that the first defendant, the former director and chief executive officer of the plaintiffs, the third defendant, and another party conspired to make payments under certain agreements, divert work from the Beyonics Group to a competitor of the Beyonics Group, and ultimately hollow out the Beyonics Group's baseplate business with its customers. There was an agreement between the parties to divert baseplates from the Beyonics Group to the competitor for the work to be done by the latter. It was clearly agreed that payments would accrue to the first defendant through the third defendant.

26.11 Hoo Sheau Peng JC denied the claim in unlawful conspiracy due to a lack of evidence of an “obvious agreement” between the alleged conspirators to do acts which would hollow out the baseplate business of the Beyonics Group entirely. Strictly speaking, there was no requirement for an “obvious agreement” to commit the acts. What was required, however, was a combination between the alleged conspirators; in fact, the agreement, if any, might be tacit in nature or inferred from the parties' acts.15

26.12 The learned judge also found that the predominant intention of the first and third defendants was to benefit the first defendant and the competitor and that “the necessary corollary of the benefit to the [competitor] was loss to the First Plaintiff”16 due to the direct diversion of the baseplates. The learned judge concluded that if the first and third defendants intended to benefit the competitor, they must also have intended to injure the first plaintiff, even if this intention was not

predominant. Hoo JC was correct to highlight that for unlawful means conspiracy, the intention of the conspirators to injure the plaintiff needs not be a “predominant” intention. This technique of treating the benefit to the competitor as a corollary to the loss to the first plaintiff has also been applied in Singapore in the context of a lawful means conspiracy claim.17

26.13 In Simgood Pte Ltd v MLC Barging Pte Ltd,18 the appellant, Simgood Pte Ltd (“Simgood”), had entered into a shipbuilding contract with MLC Shipbuilding Sdn Bhd (“MLC Shipbuilding”) in which the latter was to construct and deliver a vessel with a specific hull number to Simgood. MLC Shipbuilding failed to deliver the vessel. Simgood alleged that the respondents (comprising shareholders or directors of MLC Shipbuilding or its affiliate companies) had conspired to switch the hull number of the vessel with that of another vessel that had a later completion date.

26.14 The Court of Appeal agreed with the trial judge's finding in Simgood Pte Ltd v MLC Shipbuilding Sdn Bhd19 that the respondents wanted to postpone the repayment of a loan facility extended by a bank. There was, therefore, no unlawful means conspiracy as the respondents' acts of switching the hull numbers were not carried out to injure Simgood. Referencing the prior Court of Appeal decision in EFT Holdings Inc v Marinteknik Shipbuilders (S) Pte Ltd20 (“EFT”), it is clear that the respondents' actions in the...

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