432 SAL Annual Review (2012) 13 SAL Ann Rev 24. TORT LAW

Transcription

1 432 SAL Annual Review (2012) 13 SAL Ann Rev 24. TORT LAW Kumaralingam AMIRTHALINGAM LLB (Hons), PhD (Australian National University); Professor, Faculty of Law, National University of Singapore; Senior Director (Research & Policy), Attorney-General s Chambers. Gary CHAN LLB (Hons), MA (National University of Singapore), LLM, BA (University of London); Associate Professor, School of Law, Singapore Management University. Breach of statutory duty 24.1 In Shaik Abu Bakar Bin Abdul Sukol v Saag Oilfield Engineering (S) Pte Ltd [2012] SGHC 251, the plaintiff was employed as a derrick builder by the first defendant, a company in the business of manufacturing and repairing oilfield and gas field machinery and equipment, including derricks. The second defendant, a company engaged in the construction, repairing and improving of oil rigs, ships and other ocean going vessels, owned a shipyard. The plaintiff suffered injury while working at the shipyard and claimed against the second defendant for damages in negligence and breach of statutory duty. The first defendant has gone into liquidation The claim in breach of statutory duty failed due to improper pleadings by the plaintiff. The High Court stated that the shipyard would fall within the meaning of a workplace (ie, any premises where a person is at work or is to work and includes a factory ) under s 5(1) of the Workplace Safety and Health Act (Cap 354A, 2007 Rev Ed) ( WSHA ). The word factory was defined in s 5(2)(a)(iii) of the WSHA as any premises within which persons are employed in the repair, construction or manufacturing of any vessel or vehicle. Though the WSHA imposes certain duties on the occupier of a workplace under s 11 and the facts showed that the second defendant was clearly in breach of its statutory duty, the provision was not pleaded in the statement of claim. The plaintiff had instead pleaded under s 12(1) of the WSHA (pertaining to an employer-employee relationship) which was not relevant vis-à-vis the second defendant Nevertheless, the claim in negligence against the second defendant succeeded. First, the second defendant owed a duty of care to all persons who worked at the shipyard as it had foreseen the dangers from certain types of works such as hot work and lifting works for which the second defendant had required inspections and certifications.

2 (2012) 13 SAL Ann Rev Tort Law 433 Secondly, the second defendant had breached its duty to the plaintiff by permitting the lifting works, which had resulted in the plaintiff s injuries, to proceed. The court found that the scaffolding installed at the lifting site had obstructed the lifting works. Though the second defendant was held liable to the plaintiff for damages resulting from the injury, the plaintiff was found contributorily negligent for 50% of the damage. The latter had not exercised due care by failing to wear gloves which he knew he was required to wear. Conversion 24.4 There were a few cases involving conversion in 2012 which arose from different factual contexts involving share transactions, distress of property, car financing and cargo shipments. In the first case, Tjong Very Sumito v Chan Sing En [2012] 3 SLR 953, there were two sets of claims. In the first set of claims, two of the defendants, Aventi and OAFL, had received moneys and shares from the sale of shares pursuant to a sale and purchase agreement. They subsequently sold the shares. The plaintiffs sought to recover the moneys and shares based on various causes of action: money had and received, resulting trust, conversion, fraudulent misrepresentation and unlawful means conspiracy. The fraudulent misrepresentation claim was not successful due to a lack of proof of reliance by the plaintiffs on the alleged misrepresentations and the failure to prove losses. The claim in unlawful means conspiracy also failed as it was parasitic on the fraud claim In the second set of claims, arising from another sale of shares pursuant to the second and third sale and purchase agreements, the first plaintiff claimed he had signed the sale documents under duress, was induced by fraudulent misrepresentation to execute the agreements and that certain of the defendants conspired to induce him to sell at an undervalue via the alleged duress and fraudulent misrepresentation. This claim in fraudulent misrepresentation succeeded. However, the conspiracy claim failed as it was parasitic on the failed duress claim due to a lack of evidence of compulsion of the first plaintiff s will With regard to conversion, which related only to the shares arising from the first set of claims, the plaintiffs had to show they had either actual possession or a right to immediate possession of the shares. In this case, the plaintiffs did not have actual possession of the shares since the shares were issued directly to Aventi and OAFL. Nonetheless, they had the right to immediate possession of the shares when the shares were sold by Aventi and OAFL as the latter two parties were holding the shares as bailees and agents of the plaintiffs. The court reasoned as follows:

3 434 SAL Annual Review (2012) 13 SAL Ann Rev (a) Bailees Aventi and OAFL acted as bailees of the shares based on their voluntary possession of the shares. They acted in a manner repugnant to the terms of bailment when they sold the shares. As such, the bailment was terminated under the law and the right of possession re-vested in the bailor (the plaintiffs). Hence, the plaintiffs, with the right of immediate possession, had the locus standi to sue in conversion. (b) Agents a clause in the sale agreements stating that Aventi and OAFL were authorised to receive the shares for and on behalf of [the plaintiffs] constituted evidence of the plaintiffs consent to the appointment of Aventi and OAFL as agents to receive the moneys and shares. In this case, the agents had sold the property without authority. Thus, the sale itself constituted an act of conversion. The plaintiffs had a right of immediate possession of the shares when the latter were allotted and received by Aventi and OAFL for and on behalf of the plaintiffs or when Aventi and OAFL had consummated the conversion of the shares by selling them As part of the action in conversion, the plaintiffs proved that the defendants acts were intentional and inconsistent with the plaintiffs rights and that those acts excluded the plaintiffs from the use and possession of the shares. Damages were assessed at the time of the conversion based on the sale price of the shares multiplied by the number of shares The judge stated that corporeal objects representing intangible property such as cheques and share certificates may be the subject matter of conversion (see Yeow Chern Lean v Neo Kok Eng [2009] 3 SLR(R) 1131 (cheques), Cycle & Carriage Motor Dealer Pte Ltd v Hong Leong Finance Ltd [2005] 1 SLR(R) 458 (Preferential Additional Registration Fee Certificates) and EG Tan & Co (Pte) v Lim & Tan (Pte) [ ] SLR(R) 1081 (share certificates)). Though the shares in this case were scripless, they were scripless only for the purpose of trading via book entry in the Central Depository ( CDP ) register. The shares were in fact represented by physical share certificates issued by the issuing company, deposited with the CDP and registered in the name of the CDP or its nominee The action in conversion in Comfort Management Pte Ltd v Afco East Pte Ltd [2012] 4 SLR 66 arose from prior court processes initiated by the parties. The first defendant ( Afco ), the landlord of certain premises, had earlier applied to the Subordinate Courts under the provisions of the Distress Act (Cap 84, 1996 Rev Ed) for the issue of a writ of distress against a particular firm ( Alaskan Ice ) to recover rental due in respect of Afco s premises. At the time of the application, the plaintiff s equipment was located within the premises. Afco was granted

4 (2012) 13 SAL Ann Rev Tort Law 435 leave to levy a distress for rent on the basis that Alaskan Ice had not paid rental for the premises and Alaskan Ice as tenant was in possession of the equipment. The writ of distress was then issued and executed on the equipment. The plaintiff later sought an injunction to restrain Afco from selling or otherwise disposing of the equipment and further, an order discharging the writ of distress or any sale made thereunder. However, the application was unsuccessful. The plaintiff did not appeal against the court decision and the equipment was sold by auction Three years later, the plaintiff claimed for damages for conversion and/or wrongful or illegal distress of the plaintiff s equipment. The plaintiff s position was that the equipment was wrongly seized and sold because it did not belong to Alaskan Ice but to the plaintiff as the defendant well knew at the time of the seizure The High Court decided there was no viable cause of action in conversion. The plaintiff, as the legal owner or bailee of most of the equipment, had legal standing to sue for conversion of the equipment. However, Afco had not committed any act of conversion of the equipment. The application for the writ of distress did not amount to a transfer of title of the equipment to the bailiff or to any other party. Afco was entitled to the issue of a writ of distress on the evidence produced before the court. Action taken in a court of law to protect one s legal rights could not be regarded as unauthorised even if, as a result thereof, a third party s right to possession of goods was interfered with The court also added that a person aggrieved by a writ of distress obtained through a proper court process cannot sue the applicant for the writ on the basis of the common law cause of action for wrongful or illegal distress. The remedy for such an aggrieved person lies in an action for malicious prosecution (see Chop Chye Hin Chong v Ng Yeok Seng [1934] 1 MLJ 265 at 266; Ginsin Holdings Pte Ltd v Tan Mui Khoon [1996] 3 SLR(R) 500 at [14]; Heng Chyu Kee v Far East Square Pte Ltd [2001] 3 SLR(R) 651 at [16]). The case authorities relate to malicious prosecution arising from wrongful distress specifically and not for malicious prosecution of civil proceedings in general In Chenet Finance Ltd v Lim Poh Yen (alias Lim Allene) [2012] SGHC 158, Chenet s claim in conspiracy against the defendants failed. One of the defendants counterclaimed that Chenet s legal action was brought in bad faith and maliciously to damage her name. The learned judge opined that there is no tort of abuse of civil process. Woo Bih Li J cited Clerk & Lindsell on Torts (Michael Jones & Anthony Dugdale eds) (London: Sweet & Maxwell, 20th Ed, 2010) at para that there is no tort of malicious prosecution of civil proceedings (Gregory v Portsmouth City Council [2000] 1 AC 419).

5 436 SAL Annual Review (2012) 13 SAL Ann Rev In Chiam Hui Tian Cindy v Kenso Leasing Pte Ltd; Bellcar Pte Ltd [2012] SGDC 80, both the plaintiff and defendants were victims of fraud perpetrated by a car dealer. Kenso Leasing Pte Ltd ( Kenso ), a company which provides financing to car dealers acquiring stocks of new vehicles for sale in Singapore, had extended a loan to the car dealer, Car Zone Pte Ltd ( Car Zone ) to facilitate the purchase of a car. Car Zone signed an agreement with Kenso which provided that title to the car would vest with Kenso whilst possession would be with Car Zone. Should a buyer be found, Car Zone would request Kenso to execute the Land Transport Authority s ( LTA ) Transfer Form in favour of the buyer and would repay the loan to Kenso with the agreed interest Kenso is a member of the Hire Purchase, Finance and Leasing Association of Singapore ( HPFLAS ) whose members comprise banks, finance houses and car dealers. HPFLAS maintains a database linked to LTA s Vehicle Registration and Licensing System that allows its members to notify their interest in a vehicle already registered with LTA by filing an online form known as Form A ( PFA ). For vehicles that have not yet been registered with LTA, there is a separate database in which a HPFLAS member can notify its interest by filing a Temporary Form A ( TFA ). Kenso lodged a TFA with HPFLAS to notify its interest in the car Unknown to Kenso, Car Zone had purportedly sold the car to another car dealer, Bellcar Pte Ltd ( Bellcar ). The plaintiff, Chiam, bought the car at the showroom and signed the vehicle sales order as purchaser. Financing was obtained from United Overseas Bank Ltd ( UOB ) through a hire purchase agreement which Chiam signed. UOB later lodged the PFA with HPFLAS. Kenso received a notification of the registration of the car but did not lodge any PFA after receiving this notification. Shortly after Chiam took delivery of the car, Kenso repossessed it. Both Chiam and Kenso mounted a claim in conversion against each other and sought declarations that title to the car was vested in them With regard to the claims in conversion, although title and ownership of the car would have vested with UOB under the hire purchase agreement, Chiam had possession at the time the car was taken away by Kenso. Thus, Chiam, rather than UOB, had the right to commence the action in conversion. To sue in conversion, a plaintiff has to show that at the time of the alleged conversion, he had either actual possession of, or the immediate right to possess, the chattel concerned. Title to the goods does not equate to an immediate right to possession The court also made a declaration that Kenso was the legal owner of the car. The argument that Kenso s omission to lodge a PFA estopped Kenso from denying Bellcar s authority to sell the car was

6 (2012) 13 SAL Ann Rev Tort Law 437 rejected by the court as there was no culpable neglect on Kenso s part or a negligent omission that served as the proximate or real cause of the ultimate sale and financing of the car to Chiam. It ordered Chiam to pay Kenso the amount of the loan that they had lent to Car Zone. Moreover, Bellcar was in breach of an implied condition of the sale agreement and had to indemnify Chiam fully with respect to the judgment obtained by Kenso against her together with interest and costs The decision in Antariksa Logistics Pte Ltd v McTrans Cargo (S) Pte Ltd [2012] 4 SLR 250 ( Antariksa Logistics Pte Ltd ) involved a claim in conversion in respect of certain cargo in a shipment. The first three plaintiffs, companies engaged in door-to-door freight forwarding services, shipped containers of goods belonging to customers from Singapore to Jakarta. However, the carriers could not deliver the 30 containers at the discharge port in Jakarta. The Indonesian customs authorities initially did not allow the containers to be shipped back to Singapore. However, the 30 containers were subsequently permitted to be returned to Singapore after an Indonesian court ruling which reviewed the decision of the Indonesian customs authorities The first three plaintiffs had an agreement with an Indonesian person, C, who was engaged in freight forwarding and logistics business, that C would, through the defendant s principal (PT Prolink Logistics ( Prolink )), handle the receipt, customs clearance and container transport to the warehouses in Indonesia. It was also agreed between C and the director of the second and third plaintiffs that the first plaintiff would be the consignee on the bill of lading for the shipment of the 30 containers back to Singapore. Contrary to this agreement, the name of the consignee had been unilaterally changed by Prolink from the first plaintiff to the defendant, a forwarder. Upon arrival in Singapore, the defendant took possession of the containers. The defendant was prepared to release the cargo if so authorised by the cargo owners. It refused to release the cargo unless the first three plaintiffs authority to deal with the 30 containers was revoked. Evidence showed that the defendant wanted Prolink to deal with the goods instead The three plaintiffs commenced an action in conversion with respect to the 30 containers and applied for a mandatory injunction to compel the defendant to deliver up the containers. Thereafter, the revocation of authority was obtained by Prolink from cargo owners with respect to some of the cargo ( Group A Cargo ) which were then released by the defendant. At the time of the court judgment, the defendant was still in possession of the remaining cargo ( Group B Cargo ). There were other plaintiffs ( Group B plaintiffs ) who had purchased goods from suppliers in Singapore and appointed one of the first three plaintiffs to provide the freight forwarding services from Singapore to Jakarta. These Group B plaintiffs had not revoked the first

7 438 SAL Annual Review (2012) 13 SAL Ann Rev three plaintiffs authority and therefore the cargo was not released. The Group B plaintiffs were joined to the first three plaintiffs action The defendant was ultimately liable in conversion as against the first three plaintiffs and the defendant had to indemnify the first three plaintiffs against all liabilities and losses incurred arising from the conversion of the Group A Cargo and Group B Cargo. The defendant was liable to the Group B plaintiffs in conversion in respect of the Group B Cargo The first three plaintiffs as head bailees under the agreement with their customers were entitled, if not obliged, to protect and preserve the shipment. In this regard, they had appointed Prolink (sub-bailee) to arrange for the goods to be shipped back to Singapore. By reason of the unauthorised switch of consignee to the defendant, the sub-bailment ended and the right of possession to the bailed property re-vested in the first three plaintiffs. The first three plaintiffs had possessory title to the 30 containers that was superior to the defendant s bare possessory title. The defendant could retain the goods until a party with a superior interest asked for the goods. Being the named consignee on a bill of lading merely gave the defendant a contractual right to obtain delivery of the containers vis-à-vis the carrier. The Group B plaintiffs, having fully paid for the Group B cargo, had proprietary title to those goods. In addition, the Group B plaintiffs enjoyed the right to immediate possession as bailors of their respective shares in the Group B Cargo The defendant raised defences based on, amongst others, (a) the ministerial acts of an innocent intermediary; and (b) liens. Defence (a) was available to an intermediary agent whose act was prima facie ministerial because it was performed in good faith and without notice of his principal s lack of title (see Tat Seng Machine Movers Pte Ltd v Orix Leasing Singapore Ltd [2009] 4 SLR(R) 1101( Tat Seng Machine Movers Pte Ltd )). A ministerial act is one which does not sufficiently interfere with the rights of the true owner. If the defendant is able to show that it acted reasonably in the course of business, the evidential burden of proof to establish conversion will shift back to the plaintiff: Tat Seng Machine Movers Pte Ltd at [96]. In Antariksa Logistics Pte Ltd, the defendant knew the first three plaintiffs were entitled to the containers and that Prolink lacked authority and possessory title. The defendant had even assisted Prolink to interfere with the first three plaintiffs right to immediate possession by withholding the Group B Cargo. The defendant was thus not an innocent intermediary and its involvement and participation in the detention of the 30 containers were not merely ministerial acts. The defendant s acts were also not performed in good faith.

8 (2012) 13 SAL Ann Rev Tort Law For defence (b), the defendant argued that the detention of the containers was in lawful exercise of a possessory lien. However, it did not possess any lien (whether a contractual lien or a warehousemen s lien) to justify the detention of the 30 containers. The defendant s possession of the containers as an agent arose from the wrongful acts of its principal, Prolink. As mentioned, Prolink had consigned the goods in the defendant s name, contrary to the agreement between C and the director of the second and third plaintiffs. Based on the nemo dat quod non habet rule, the defendant did not have lawful possession to assert a lien. Moreover, there was no debt due from the first three plaintiffs upon which the defendant could assert a lien Finally, the court awarded damages but refused the claims by certain of the plaintiffs for delivery up of property. Lawyers should be reminded that the relief of delivery up is not available in a claim for conversion, but only in detinue, which was not pleaded by the plaintiffs in this case. In this regard, the UK position is different, having abolished the tort of detinue via the Torts (Interference With Goods) Act 1977 (c 32) (UK). Defamation Low Tuck Kwong v Sukamto Sia [2013] 1 SLR 1016 involved claims in defamation and malicious falsehood. The plaintiff was the president commissioner and shareholder of Bayan Resources, a coal mining company listed in the Indonesian stock exchange ( IDX ). The plaintiff was preparing for a global Initial Public Offering ( IPO ) on the IDX. The defendant s lawyers sent two letters to the plaintiff and Bayan Resources to demand the return of 50% of the shares of, and interests in, Bayan Resources which, they alleged, the plaintiff had promised to pay in exchange for the defendant funding and facilitating the investment of the coal mine, including obtaining the concession rights to the coal mine. The defendant s lawyers later sent another letter addressed to various parties, including the Indonesian Capital Market and Financial Institutions Supervisory Agency ( BAPEPAM ), Director of Chief of IDX and certain IPO advisers (such as the domestic lead managing underwriter, sole book runner and the international selling agent, all based in Jakarta), enclosing the two letters and requesting, amongst others, that Bayan Resources be suspended from going public due to the ongoing dispute with the defendant. The plaintiff claimed that the above allegedly defamatory letters ( Indonesian Publications ) had been republished in both Indonesia ( Indonesian Republications ) and Singapore ( Singapore Republications ) This review focuses on the claims under Singapore law (note: the judgment also examined issues of conflicts of law and the

9 440 SAL Annual Review (2012) 13 SAL Ann Rev defamation claims under Indonesian law). The claims in defamation ultimately failed as there was a viable defence of qualified privilege with respect to the Indonesian Publications, Indonesian Republications and Singapore Republications. The claims in malicious falsehood also failed as the plaintiff could not prove the elements of malice and falsehood The meaning of the Indonesian Publications (ie, that the defendant and the plaintiff had a private arrangement or understanding to account for and deliver the 50% shares in Bayan Resources but the plaintiff had not performed it) was defamatory under Singapore law in that it would tend to lower the plaintiff in the estimation of rightthinking members of society generally or impute a lack of integrity The Indonesian Republications were actionable under Singapore law. The Indonesian Republications to BAPEPAM in the newspaper and the final prospectus were adjudged to be defamatory under the third defamatory meaning in Chase v News Group Newspapers Ltd [2003] EMLR 218, namely, that there are grounds for investigating if the plaintiff had an agreement or understanding with the defendant which he had not performed. The defendant was responsible for the Indonesian Republications as they were the natural and probable result of the Indonesian Publications (by reason of disclosure requirements for public offerings of securities under Indonesian law) The Singapore Republications were also actionable under Singapore law. They imputed similar defamatory meanings in para above under Singapore law. The defendant was responsible for the Singapore Republications as they were a natural and probable consequence of the Indonesian Publications since the IPO was a global offering The defendant argued that the Indonesian Publications are protected by absolute privilege as (a) the third letter sent to BAPEPAM was the first step in a regulatory process of a quasi-judicial nature ; and (b) that the letters were necessary to the commencement of proposed legal proceedings by the defendant against the plaintiff (see Lincoln v Daniels [1962] 1 QB 237 at , per Devlin LJ) The judge observed in response that the third letter was not a complaint for BAPEPAM to conduct an investigation but a request that BAPEPAM suspend the planned IPO due to the legal dispute between the plaintiff and the defendant. There was also no evidence that the defendant was under a legal obligation to send the third letter to BAPEPAM, IDX and IPO advisers prior to commencing court action against the plaintiff and Bayan Resources in Indonesia. Thus, the elements of the defence of absolute privilege were not established.

10 (2012) 13 SAL Ann Rev Tort Law As mentioned above, the defence of qualified privilege was applicable. The Indonesian Publications were made by the defendant to protect his business interests. He believed he had a claim against the plaintiff and that the Indonesian Publications were true. All the recipients of the Indonesian Publications (Bayan Resources, IDX, BAPEPAM and the IPO advisers) had an interest in receiving them. Moreover, there was no malice on the part of the defendant. The defence of qualified privilege extended to the Singapore Republications and Indonesian Republications as the plaintiff, Bayan Resources and IPO advisers had a legal duty to disclose the defendant s claims to BAPEPAM and the investing public. BAPEPAM and potential IPO share purchasers also had an interest in receiving the information concerning those claims. Economic torts Conspiracy In Quek Tiong Kheng v Chang Choong Khoon Mark [2012] SGDC 76 ( Quek Tiong Kheng ), the plaintiffs (husband and wife) entered in a contract with the third defendant, a Singapore company, to buy certain investments in oil and gas leases in reliance on the statements of the second defendant, a sales consultant working for the third defendant. The second defendant had made a sales presentation on the merits of a US corporation s working interests (ie, a right of a lessee to work on the land leased to him and to derive for his own enjoyment the oil and gas found on the land). The first defendant was the sole executive director of the third defendant. The plaintiffs initially received dividends from the investments. It later transpired that the US Corporation was embroiled in various legal proceedings in the US and accused of running a Ponzi scheme The plaintiffs sued the defendants for the investment moneys (minus the dividends received) in two causes of action (at [5]): (a) fraudulent, or in the alternative, negligent misrepresentation based on the statements made by the second defendant in November 2006 which allegedly induced the plaintiffs to purchase the working interests; and (b) tort of conspiracy to injure by unlawful means, namely (i) the above misrepresentations; and (ii) the third defendant s offer of working interests for sale in Singapore in contravention of the Securities and Futures Act (Cap 289, 2006 Rev Ed) ( SFA ).

11 442 SAL Annual Review (2012) 13 SAL Ann Rev No damage was, however, sustained by the second plaintiff as the investments were paid from moneys wholly belonging to the first plaintiff. Certain alleged misrepresentations were regarded by the court as non-actionable on the ground that they were representations as to the future and that a promisor is only liable if at the time of publication he lacks the intention to fulfil those promises. Some of the statements were, however, actionable misrepresentations and were reasonably understood by the plaintiffs as follows: (a) The US corporation had title to the oil and gas properties they were selling to the plaintiffs; and (b) The US corporation was an honest and viable company First, the statements were false: Evidence showed that the US corporation was never a viable company and did not own any part of the oil and gas leases at the time the representations were made. It was also likely that the US corporation ran a Ponzi scheme. Secondly, the representations on the honesty and legitimacy of the US corporation and its ownership in the investment subject matter were material information. They are not words which no reasonable person would regard as unimportant and it was likely that the plaintiffs were enticed by the prospect of earning high returns. The court applied the principle in Raiffeisen Zentralbank Osterreich AG v Archer Daniels Midland Co [2007] 1 SLR(R) 196 at [56] that once materiality is proven, the representor is presumed to have the intent to induce and the burden of proof then shifts to the representor to displace the prima facie case The court regarded the second defendant as an employee of the third defendant. There was exclusivity of service with clear and distinct restrictions imposed on the second defendant in the consultancy service agreement. She also received formal training from the third defendant, only used company-issued materials to market the investments and reported to personnel within the hierarchy of the third defendant. However, the second defendant honestly believed in the statements made and was therefore not liable in tort of deceit On the other hand, the court found an absence of honest belief on the part of the first defendant. He was liable for fraudulent misrepresentation and the third defendant was held vicariously liable for the tort. However, the court did not explain why the first defendant should be treated as an employee of the third defendant but instead suggested that the first defendant s acts as director should be attributed to the third defendant (company) (see Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378; Tesco Supermarkets Ltd v Nattrass [1972] AC 153 at 170). It should be noted that the doctrine of vicarious liability (based on a tort committed by the employee, rather than the employer) is distinct from the operation of the doctrine of attribution (which results

12 (2012) 13 SAL Ann Rev Tort Law 443 in the commission of a tort by the company). Further, the learned judge stated without any elaboration that the representations by the first and/or second defendants were made in the course of employment. In this regard, the close connection test coupled with policy considerations (in the Court of Appeal decision of Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd [2011] 3 SLR 540) should have been applied Turning to the claim in negligent misrepresentation, the court stated that, applying the duty of care test in Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100 ( Spandeck ), there was sufficient proximity of relationship between the plaintiffs and the third defendant for establishing a duty of care and that the third defendant had acted in breach of its duty of care to the plaintiffs. In respect of the second defendant, though she owed a duty of care to the plaintiffs, there was no breach of that duty as she was at all times discharging her bona fide duties as an employee of the third defendant As for the first defendant, the court decided he owed a personal duty of care to the plaintiffs as he had procured and induced the company to commit the tort (citing Thode Gerd Walter v Mintwell Industry Pte Ltd [2009] SGHC 44). The court proceeded to apply the duty of care test in Spandeck and found that, apart from physical and circumstantial proximity, there was strong evidence of causal proximity (ie, the closeness or directness between a particular act or conduct with the injury sustained) on the part of the first defendant who was the sole directing mind and will and the beneficial owner of the third defendant: Quek Tiong Kheng at [73] As for the claim of conspiracy, the court found that the third defendant offered a collective investment scheme to the public in breach of ss 285 and 296 of the SFA. The element of unlawfulness in the tort of unlawful conspiracy does not require the unlawful means to be independently actionable and a criminal act per se will suffice: see Chan Sek Keong CJ s comments in Beckett Pte Ltd v Deutsche Bank AG [2009] 3 SLR(R) 452 at [120] and [121]; Swiss Butchery Pte Ltd v Huber Ernst [2010] 3 SLR The first and third defendants intended to injure the investors, their objective being to earn commissions and profits. The first plaintiff s loss (represented by payments made to the third defendant) was the means by which the first and third defendants obtained their gains. It is clear that the first and third defendants income from commissions to management fee was derived from the investors subscription moneys (an alternative analysis is that the losses suffered by the first plaintiff are the other side of the coin of the defendant s gain;

13 444 SAL Annual Review (2012) 13 SAL Ann Rev in this regard, see the discussion in Raffles Town Club Pte Ltd v Lim Eng Hock Peter [2013] 1 SLR 374 ( Raffles Town Club Pte Ltd ) in para below) The case of Raffles Town Club Pte Ltd concerned Raffles Town Club s ( RTC ) claim against PL, LA and WT (all former directors of RTC) for breach of their duties when they were directors of RTC. Two of the former directors, LA and WT, in turn claimed by third party notice against the current directors of RTC for breach of agreement and a deed by causing and/or conspiring with RTC to commence a suit to injure them. PL, another former director, took out a third party notice against the current directors seeking an indemnity or contribution in the event RTC succeeded in its claims against him and damages for causing and/or conspiring with RTC to commence a suit to injure him. The trial judge dismissed RTC s claims against the former directors as well as LA s, WT s and PL s claims against the current directors. On appeal, the claims in conspiracy succeeded The Court of Appeal made two important findings. Firstly, the current directors intended to injure the former directors in pursuing the suit. This was on the basis that the current directors would not have brought a loss to the former directors without bringing about a gain to themselves at the same time. In this regard, the Court of Appeal applied Lord Nicholls dictum in OBG Ltd v Allan; Douglas v Hello! Ltd (No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1 ( OBG v Allan ) at [167] which referred to a case where loss to the claimant is the obverse side of the coin from gain to the defendant and that the defendant in such an instance will satisfy the mental ingredient of the unlawful interference tort Secondly, notwithstanding the presence of the requisite intention, there was no unlawful means employed in the conspiracy on the facts of the present case. With reference to the tort of lawful means conspiracy, the issue was whether there was a predominant purpose on the part of the current directors to cause harm to the former directors in commencing the suit. The court held, in similar vein, that the current directors had the predominant purpose to cause financial harm to the former directors just as much as to profit themselves. It applied Lord Neuberger s dictum in Revenue and Customs Commissioners v Total Network SL [2008] 1 AC 1174 at [228], based on the reasoning in OBG v Allan: there is little, if any, difference between the conspirator s intention to make money and their intention to deprive the [plaintiffs] of money: each is the obverse of the other. On that basis, it may well be that it could be said that the predominant purpose of Total and the other conspirators was indeed to inflict loss on the [plaintiffs] just as

14 (2012) 13 SAL Ann Rev Tort Law 445 much as it was to profit the conspirators, and hence the claim in tort is made out in conspiracy to injure On the basis that the same analysis of the plaintiff s loss as the obverse side of the defendant s gains can be applied to both torts, as in Raffles Town Club Pte Ltd, the decision seems to suggest that the difference in the state of mind (predominant purpose to injure versus intention to injure) in the respective torts is not as material. Prior authorities have, however, indicated that the requirement of predominant purpose to injure in lawful means conspiracy is fairly stringent. One reason is that the advancement of the conspirator s self-interests or benefit in committing the alleged acts would generally amount to a legitimate interest and thereby negate the action in lawful means conspiracy (Crofter Hand Woven Harris Tweed Co, Ltd v Veitch [1942] AC 435; Quah Kay Tee v Ong and Co Pte Ltd [1996] 3 SLR(R) 637). For this reason, it is more difficult to prove predominant purpose to injure in lawful means conspiracy than to prove intention to injure in unlawful means interference The case of EFT Holdings Inc v Marinteknik Shipbuilders (S) Pte Ltd [2013] 1 SLR 1254 examined the elements of combination or agreement and intention to injure in the tort of unlawful means conspiracy. The first plaintiff, a publicly traded company incorporated in the USA, and Excalibur International Marine Corp ( EIMC ), a Taiwanese company, executed a subscription agreement and a loan agreement relating to the first plaintiff s investment in EIMC shares in June The second plaintiff was a company incorporated in Taiwan to hold the new share allotments. EIMC held a licence to operate a ferry service across the Straits of Taiwan between Taiwan and China. EIMC entered into an agreement that was paid for by the loan moneys to purchase a catamaran ( OCEAN LALA ) for its cross-strait ferry business The plaintiffs claimed in unlawful means conspiracy for damages or a refund of the moneys that was invested in EIMC. They alleged that the defendants had, through the use of false documents, inflated the paid-up capital of EIMC to induce the plaintiffs to invest in EIMC. The first defendant was a Singapore-incorporated company in the business of building and repairing ships and vessels. The second defendant was a director of the first defendant. The third defendant was a director of EIMC. The fourth defendant entered into contracts with the first defendant to purchase two catamarans in November 2005 which contracts were later novated to EIMC Default judgment was entered against the third and fourth defendants. The focus of this case was the action against the first and second defendants. At the centre of the dispute were certain alleged

15 446 SAL Annual Review (2012) 13 SAL Ann Rev misrepresentations made by EIMC and its directors and the third defendant to the first plaintiff and its representative and certain documents that were shown to the first plaintiff s representative in June The plaintiffs had to prove (a) the nature of the agreement or combination; (b) the unlawful means alleged; (c) each of the unlawful acts relied on; (d) the fact that each act was carried out pursuant to the agreement or combination; and (e) the relevant state of mind of the alleged conspirator (see De Krassel and Chu Vincent [2010] 2 HKLRD 937 at [39] [42]) The claim in unlawful means conspiracy failed. The plaintiffs could not show that the first and second defendants were party to an agreement or had acted in combination with the other defendants to injure the plaintiffs. The first and second defendants were not involved in the events of June There was no evidence that the oral representations and the production of the documents to the plaintiffs representative were made on behalf of EIMC and the first and second defendants, or that they were presented with the knowledge of the first and second defendants. The plaintiffs had not proved the existence of an agreement amongst the four defendants at the relevant time The plan amongst EIMC and the four defendants was to obtain money from the banks to purchase certain vessels. The documents were designed to enable EIMC and the third defendant to issue and register shares as paid up in the fourth defendant s name and to obtain banking loan facilities, but not for any subsequent commercial transactions. The contents of the documents relating to the sale and purchase of the vessels stated an expiry date which meant that the representations therein were for an intended transaction and for a specific period of time. The first and second defendants did not intend for the third and fourth defendants and EIMC to pass the documents to future potential investors for the purpose of providing equity to EIMC for the purchase of the OCEAN LALA. The requirement of intention to injure the plaintiffs was not satisfied. Negligence General The facts in Sato Kogyo (S) Pte Ltd v Socomec SA [2012] 2 SLR 1057 ( Sato Kogyo ) were that a fire broke out on premises leased by the second plaintiff ( Singtel ), causing loss both to Singtel and the first plaintiff, Sato Kogyo (S) Pte Ltd ( Sato Kogyo ), who was Singtel s main contractor and bailee of much of the damaged property. The defendant manufactured and supplied eight Uninterruptible Power Supply ( UPS ) units through its Asian subsidiary for Sato Kogyo to

16 (2012) 13 SAL Ann Rev Tort Law 447 install in the premises leased by Singtel. There were contractual relations respectively between Singtel and Sato Kogyo, Sato Kogyo and the defendant s Asian subsidiary, and the subsidiary and the defendant. There were no contractual relations between either of the plaintiffs and the defendant The plaintiffs alleged that one of the UPS units was defective and that its failure had caused the fire. The defendant denied liability on all counts, denying duty, breach and causation. The defendant further alleged that the plaintiffs had been negligent and that even if the fire had been caused by a defective UPS unit, the chain of causation was broken by the actions of the civil defence team in breaking open the windows of the room, thereby letting in oxygen which fuelled the fire Judith Prakash J began by applying the test for duty articulated in Spandeck. Her Honour found that it was factually foreseeable that a defective UPS unit could cause a fire capable of damaging the plaintiffs property. The parties were also clearly proximate and there were no policy reasons to deny the duty. The only issue was whether the contractual structure precluded a duty of care from arising. Prakash J referred to the judicial pronouncements in The Sunrise Crane [2004] 4 SLR(R) 715 ( Sunrise Crane ) and Man B&W Diesel S E Asia Pte Ltd v PT Bumi International Tankers [2004] 2 SLR(R) 300 ( PT Bumi ) on the intersection of torts and contracts, particularly when the contractual matrix precluded a tortious duty of care Prakash J held that PT Bumi, in which the contractual matrix precluded a tortious duty, had no application on the facts, as PT Bumi was confined to pure economic loss cases whereas Sato Kogyo involved physical damage, as was the case in the Sunrise Crane where a tortious duty was found to exist. While this appears to reintroduce a distinction between categories of cases in the application of the general principles of duty of care that was eschewed in Spandeck and reiterated in Tan Juay Pah v Kimly Construction Pte Ltd [2012] 2 SLR 549 ( Kimly ) at [82], it is clear from the judgment that the critical distinction lay in the fact that the contractual structure in Sato Kogyo did not evince a clear intention to exempt the defendant from tortious liability : Sato Kogyo at [35]. Thus, a duty of care was owed by the defendant to Singtel Sato Kogyo was in a slightly more difficult position as it was not the owner of the property that was damaged. The defendant relied on Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] AC 785 ( Leigh and Sillavan Ltd ) and Nacap Ltd v Moffat Plant Ltd [1987] SLT 221 to argue that Sato Kogyo needed to demonstrate that it had legal ownership or possessory title to the property. Prakash J distinguished both cases and found that Sato Kogyo was the bailee of the property as the contract between it and Singtel made clear that Sato

17 448 SAL Annual Review (2012) 13 SAL Ann Rev Kogyo was entitled to free and uninterrupted possession of the whole of the Site : Sato Kogyo at [41]. It was settled law that a bailee was entitled to sue when bailed goods were damaged by the negligent act of another Having determined the duty issue, Prakash J referred to JSI Shipping (S) Pte Ltd v Teofoongwonglcloong [2007] 4 SLR(R) 460 and applied the Bolam/Bolitho test of professional negligence to determine whether the defendant had breached its duty to the plaintiffs. All UPS units had to be tested before delivery and the defendant had two different tests the Automatic Test and the Factory Acceptance Test. The unit that was alleged to have caused the fire had only been subject to the less stringent Automatic Test which did not include testing for overloads and short circuits. As there was no expert evidence adduced on what the appropriate tests ought to be, the court only had the defendant s practices to go on. On that basis, Prakash J held that the defendant could not claim that the less stringent test was sufficient when it had a more stringent test in place and chose not to apply it to the unit. The defendant was thus found negligent The plaintiffs, however, failed to prove that the defendant s negligence had caused the fire. The plaintiff s evidence was that the defendant s negligence had caused a gradual overloading of the batteries, leading them to overheat and combust. The evidence, however, showed that the explosions occurred almost immediately after sparks were seen at the allegedly defective unit. This suggested that the fire was caused suddenly and not due to gradual overheating. The defendant s expert was of the view that the fire had been caused by electrical arcing rather than overheating. Prakash J held that the plaintiffs had not discharged the burden of proof with respect to causation The defendant s argument, had there been a prima facie case of causation, was that the actions of the civil defence personnel in breaking the window open had broken the chain of causation. This argument was perfunctorily dismissed by Prakash J. There was nothing unreasonable in the actions of the civil defence force in their efforts to put out the fire. On contributory negligence, Prakash J held that the plaintiffs had been contributorily negligent in failing to arm the fire extinguishing system. Ultimately, the plaintiffs failed on causation Kimly (above, para 24.57) arose out of a tragic workplace accident where three workers were killed when a crane toppled over. There were several parties involved. The plaintiff was Kimly Construction Pte Ltd ( Kimly ), the main contractor which had rented the crane from Rango Machinery Services ( Rango ). Rango had engaged the defendant, Tan Juay Pah ( TJP ), a mechanical engineer who was an authorised examiner under the Workplace Safety and

18 (2012) 13 SAL Ann Rev Tort Law 449 Health Act (Cap 354A, 2007 Rev Ed) ( WSHA ). TJP had contracted with two other parties, who ultimately were not relevant to the action As a result of the accident, Kimly suffered losses and sued Rango for breach of contract. Rango joined TJP and claimed an indemnity from TJP for Rango s liability to Kimly. The trial judge found Rango liable to Kimly for breach of contract and TJP liable to indemnify Rango. TJP appealed against this decision It was accepted that TJP had breached his statutory duty by failing to inspect the mast anchors before the erection of the crane. It was established that the crane toppled due to pre-existing cracks in the mast anchors which should have been detected by TJP had he conducted proper inspections. The key issue in the Court of Appeal was whether TJP was obliged to indemnify Rango. On the evidence, it was found that while the contract between Rango and Kimly included an indemnity clause, no such indemnity clause was discernible in the agreement between Rango and TJP; the agreement was not in writing and was for a modest sum of $ As there was no indemnity clause, V K Rajah JA, giving the judgment of the Court of Appeal, held that Rango had to show that TJP would have been liable to Kimly independently, thus allowing Rango to seek contribution from TJP for TJP s contribution to Kimly s loss under s 15(1) of the Civil Law Act (Cap 43, 1999 Rev Ed), which provides that any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage Referring to Animal Concerns Research & Education Society v Tan Boon Kwee [2011] 2 SLR 146, Rajah JA reiterated that breach of a statutory duty did not by itself give rise to liability unless there was an underlying common law duty of care. It should be noted that, in theory, there were two potential bases for TJP to be found liable to Kimly. One was through an action for breach of statutory duty and the other was on the basis of common law negligence. Rajah JA, while considering the statutory regime under the WSHA and related Regulations, focused on the common law duty, although there is an implicit rejection of a breach of statutory duty action on the facts: Kimly at [54] and [60] [68] Rajah JA applied the Spandeck duty of care test to the statutory context and TJP s responsibilities as an authorised examiner. The statutory framework and the defendant s obligations under that framework were relevant to both the first and second stages of the Spandeck test, namely, proximity and policy. As Rajah JA put it (at [55]): In essence, this question requires us to determine whether an AE, in the discharge of his statutory functions, owes a common law duty of

19 450 SAL Annual Review (2012) 13 SAL Ann Rev care to a person to whom he owes no contractual obligation. As the office of the AE is purely a statutory creation under the WSH Regime, we will need to decide whether the imposition of such a common law duty of care is consistent with the statutory scheme Referring to the Parliamentary debates at the second reading of the Workplace Safety and Health Bill 2005 (Singapore Parliamentary Debates, Official Report (17 January 2006) vol 80), Rajah JA concluded that the primary purpose of the legislation was to enhance worksite safety by imposing greater responsibility on certain classes of persons who created and controlled workplace risks. These persons included the main contractors and subcontractors. The authorised examiner was not intended to be the primary target of this strategy, although he was part of the overall strategy to enhance workplace safety to protect workers and others at worksites Here, the plaintiff was not an injured worker but the main contractor who was claiming for property damage and consequential economic loss. He did not belong to the category of persons intended to be protected by the legislation and thus was not in a proximate relationship with TJP, the authorised examiner. Even if the first stage of Spandeck were satisfied, Rajah JA went on to hold that for policy reasons, no such duty should be recognised as it would expose authorised examiners to indeterminate liability Another case involving a crane at a worksite was Moh Seng Cranes Pte Ltd v Hup Hin Transport Co Pte Ltd [2013] 2 SLR 1. The second defendant was the main contractor who had effective management and control of the worksite. The second defendant contracted with the first defendant for the supply of a heavy crane. The first defendant subcontracted with the plaintiff, which provided a heavy crane with an operator to the second defendant. The third defendant was responsible for structural, architectural and external works. The plaintiff s crane operator parked the crane at a location as instructed by the worksite lifting supervisor, the defendant s employee. Unknown to the plaintiff, the crane was parked over a concealed manhole and the left back outrigger collapsed into it, causing damage to the crane. The plaintiff sued the first defendant in contract, negligence and bailment, and the second and third defendants in negligence and bailment The plaintiff failed in the claims against the first defendant, but succeeded against the second defendant. Philip Pillai J held that the second defendant clearly owed a duty of care to the claimant as the proximity and policy considerations under Spandeck were satisfied. Pillai J also found that the second defendant had known of the concealed manhole and was negligent in failing to inform relevant

20 (2012) 13 SAL Ann Rev Tort Law 451 workers and subcontractors of the danger, or to cordon off the area or to put up warning signs The defence of contributory negligence failed as the plaintiff s crane operator had clearly indicated that the parking area was not suitable. However, he had no choice but to follow the instructions of the worksite lifting supervisor who directed him to park at the affected area. The crane operator had taken the additional precaution of placing a steel plate under the left back outrigger. In the circumstances, he had acted reasonably. The third defendant was found not to have known of the danger, nor to have had any reason to have known of the danger, and thus could not be found negligent In Zweite Ms Philippa Schulte Shipping GmbH & Co KG v PSA Corp Ltd [2012] SGHC 135, an accident occurred when a hatch, while being lifted off a berthed vessel, fell and damaged the ship and the wharf. The first plaintiff claimed to be the owner of the vessel and the second plaintiff claimed to be the demise charterer. The defendant was PSA Corp Ltd ( PSA ), which argued that the plaintiffs had not proved that they were respectively owner and demise charterer of the vessel. Relying on Leigh and Sillavan Ltd (above, para 24.58), PSA claimed that the plaintiffs were not entitled to maintain the action in the absence of such proof. Tan Lee Meng J, after evaluating the evidence submitted by the plaintiffs, held that each had failed to prove its status respectively as owner and demise charterer and dismissed their claims Nevertheless, Tan J went on to evaluate their claim on the assumption that their status had been proved. The existence of a duty was readily apparent under the Spandeck test. On whether PSA had been negligent, Tan J accepted the defendant s evidence over the plaintiffs and found that PSA s employees had exercised reasonable care in removing the hatch. Economic loss Deutsche Bank AG v Chang Tse Wen [2013] 1 SLR 1310 is a case that demands the close attention of banks and financial institutions. Deutsche Bank AG had sued its client for recovery of almost US$1.8m which the client owed the bank. The client countersued, alleging that the bank and its relationship manager ( RM ) had negligently advised him on how to manage his wealth and caused him to lose US$49m The client was an academic who had come into wealth after selling shares in a company he had co-founded. He met the RM when the latter was working at Standard Chartered Bank. After the RM moved to Deutsche Bank ( Deutsche Bank ), he contacted the client and persuaded the client to allow Deutsche Bank to manage his wealth. The