Tort Law

• Author: Kumaralingam AMIRTHALINGAM LLB (Hons), PhD (Australian National University); Professor, Faculty of Law; National University of Singapore. Gary CHAN Kok Yew LLB (Hons), MA (National University of Singapore), MA (Birmingham), LLM, BA (University of London); Professor, School of Law; Singapore Management University.
• Date: 01 December 2020
• Published date: 01 December 2020
• Publication year: 2020

I. Introduction

28.1 This review examines the ten most significant decisions in tort law for 2020. It was an interesting year for the range of significant decisions in tort law handed down by the courts on matters including limitation period, medical negligence, the scope of duty in negligence, breach of confidence, conspiracy, and defamation.

II. Negligence

28.2 Tan Woo Thian v PricewaterhouseCoopers Advisory Services Pte Ltd1 involved a claim in negligence by the plaintiff, a former director and chief executive officer (“CEO”) of SBI Offshore Limited (“SBI”), against the defendant, which was engaged by SBI to conduct a fact-finding review of certain impugned transactions involving the plaintiff. SBI had acquired a 35% stake in another entity, Jiangyin Neptune Marine Appliance Co Ltd (“NPT”), which was 65% owned by Jiangyin Wanjia Yacht Co Ltd (“Wanjia”). Two acquisition equity transfer agreements (“ETAs”) were entered into. The first was signed by the former CEO and the second by both the former CEO and the plaintiff. Both ETAs related to the same transaction, but there was a discrepancy: the first ETA stated that the consideration was US$1.75m while the second ETA stated that it was US$350,000.

28.3 When SBI was listed on the Singapore Exchange Securities Trading Ltd (“SGX-ST”), its 35% stake in NPT was disclosed as US$1.75m in SBI's offer document. Subsequently, SBI entered into an agreement to dispose of its 35% stake in NPT. Again, two ETAs were entered into for

the disposal. The first was to dispose the stake at the price of US$3.5m to Hua Hanshou, the father of Ollie Hua, a representative of NPT, who had advised the plaintiff on SBI's acquisition of the 35% stake. The purchaser insisted that the purchase price be paid in two halves, with US$1.75m paid out of Hong Kong and US$1.75m paid out of the People's Republic of China (“PRC”). Ollie Hua then advised SBI that the PRC tax for the transaction would be calculated on the basis of a capital gain of US$1.4m, being the difference between US$1.75m (purchase price paid out of the PRC) and US$350,000 (price stipulated in the second acquisition ETA). SBI's chief financial officer responded, stating that the correct figures were US$3.5m for the disposal and US$1.75m for the acquisition, giving a capital gain of US$1.75m to be taxed.

28.4 Subsequently, Hua Hanshou proposed to the plaintiff that a second disposal ETA be executed between SBI and Wanjia for the transfer of the 35% stake in NPT to Wanjia for the sum of US$1.75m. Hua claimed that this was necessary due to Chinese laws prohibiting ownership of joint ventures and to account for the US$1.75m paid out of the PRC. The plaintiff brought this proposal to the SBI Board (“the Board”) which rejected it. The plaintiff nevertheless went ahead and signed it on behalf of SBI. Meanwhile, SBI approved a novation agreement to replace Hua with Wanjia as the purchaser of the 35% stake.

28.5 SBI then appointed the defendant to review the acquisition and disposal of its 35% stake in NPT and to investigate allegations against another party (irrelevant to the negligence action by the plaintiff). Following its review, the defendant made several factual findings and noted that the conflicting acquisition ETAs meant that SBI could have violated the Securities and Futures Act2 (“SFA”) and the SGX-ST Catalist Rules (“CR”) or Chinese tax laws. The disposal ETAs were equally problematic, exposing SBI to potential violations of the SFA and CR or having ETAs that were not valid as they were not approved by the Board. SBI sought legal advice and subsequently lodged a report with the Commercial Affairs Division of the Singapore Police Force (“CAD”). The CAD investigated and dismissed the matter. Based on its legal advisers' findings, SBI made an announcement stating that it potentially faced a tax levy risk and that the plaintiff and another individual had committed breaches of statutory duties and obligations to SBI.

28.6 The plaintiff sued the defendant in negligence, claiming for loss of employment with SBI, loss of business reputation, deterioration of the value of his shares in SBI, and emotional and psychological trauma. See Kee Oon J dismissed the action, holding that the plaintiff had failed to

prove duty, breach, or causation of damage. The case is noteworthy for its application of the duty of care test set out in Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency3 (“Spandeck”) and for its apparent treatment of damage. See J held that it was plainly foreseeable that the plaintiff could be affected by the defendant's conduct. See J then went on to consider whether there was a proximate relationship between the parties. In doing so, he adopted an incremental approach, identifying three categories of cases that were most closely related. The first involved cases in which investigators were held to owe a duty of care to suspects under investigation (“Negligent Investigation Cases”). The second involved cases in which an employer was held to owe a duty to existing or former employees (“Negligent Employer Referral Cases”). The third involved cases of professionals who were sued by third parties who had relied on their published reports (“Negligent Advice Affecting Third Party Cases”).

28.7 See J distinguished the first two categories and held that the third category was the closest. This category, represented by cases in the vein of Caparo Industries plc v Dickman4 (“Caparo”), involved third parties who had engaged the defendants whose advice affected the plaintiffs. However, there is a difference between this category and the present case: in the Negligent Advice Affecting Third Party cases, the plaintiffs had acted in reliance on the statements provided by the defendants to the third parties. In this case, the plaintiff was affected by the actions of the third parties who had acted in reliance on the defendant. It is suggested that instead of the third category, it is the second category (Negligent Employer Referral Cases) that is most closely related to the facts in this case. Having said that, it is noted that the Court of Appeal in Ramesh s/o Krishnan v AXA Life Insurance Singapore Pte Ltd5 had stressed that proximity was made out in the Negligent Employer Referral cases partly because the defendant had special knowledge of, and implied authority from, the former employee, unlike in this case, where there was no such knowledge or implied authority.

28.8 To determine whether there was sufficient proximity, See J noted that courts would consider “physical, circumstantial and causal proximity, as well as the ‘twin criteria of voluntary assumption of responsibility and reliance’”.6 Taking into account the contractual matrix and the defendant's own disclaimer of responsibility, See J held that the

defendant had not voluntarily assumed responsibility. This is a subjective approach to voluntary assumption of responsibility that arguably is inappropriate in the context of the proximity inquiry under Spandeck. The UK has adopted a pluralist approach to the duty of care, drawing on assumption of responsibility, the Caparo approach, and incrementalism.7 Assumption of responsibility as a standalone test is subjectively assessed, while assumption of responsibility and reasonable reliance as part of the Caparo inquiry are objectively assessed.8 Singapore has rejected the pluralist approach to the duty of care in preference of a single, universal test (Spandeck). Thus, assumption of responsibility should be assessed objectively. In any case, the mere fact that the defendant disclaimed responsibility does not mean that a judge cannot find that there was assumption of responsibility on the facts. The House of Lords decision in Smith v Eric S Bush9 is illustrative.

28.9 Having dealt with assumption of responsibility, See J went on to find that the plaintiff had not relied on the defendant. The plaintiff argued that while it had not relied on the defendant in the sense of taking action based on the defendant's advice, it was nonetheless dependent on the defendant acting with due care. See J's treatment of this argument requires close reading. His Honour held that there was no real distinction to be drawn between reliance and dependence, noting that the closest concept of dependence was to be found in White v Jones10 (“White”). In See J's view, this point in White has not been accepted in Singapore. With respect, this conception of dependence in White was based on notions of general or imputed reliance.11 In the modern context, this concept is viewed through the lens of vulnerability, a concept that has been accepted as a relevant proximity factor in Singapore.12

28.10 See J then considered the relevant policy factors that militated against recognising a duty of care, including potential inconsistency with the law of defamation, potential conflict with the contractual matrix, and perhaps most significantly, a chilling effect on professional fact finding. Having found that there was no duty, See J nonetheless went on to consider breach and causation of damage, finding that there was no breach of duty on the facts and that the plaintiff had failed to prove that the defendant had caused any of the losses claimed. There did not appear to be any submission by counsel on whether the loss of business reputation as well

as emotional and psychological trauma were recognised forms of damage to ground a negligence action.13

28.11 Seto Wei Meng v Foo Chee Boon Edward14 raised a host of interesting issues on factual findings, the burden of proof, and causation with respect to the duty to inform and loss of chance in medical negligence. The plaintiffs were the estate and dependants of the deceased who died following a liposuction and fat transfer procedure. The deceased had two prior liposuction procedures (in 2010 and 2011). The third, and fateful, procedure occurred on 28 June 2013, following which she...