Singapore Law Gazette (April 2013)

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An Official Publication of The Law Society of Singapore | April 2013

Ambiguity in Amenability

to Judicial Review

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Continued on page 4

Should We Stay or Should We GoShould I Stay or Should I Go was a song written in 1981 and sung by the British rock group, The Clash. It soon gained popularity on the dance floors and radio waves throughout the world and in 1991, reached No. 1 on the UK Singles Chart. Opinion is split as to the inspiration for the song. Some rumours have it that it refers to the lead vocals (Mick Jones) impending departure from the group whilst others postulate that it refers to the rocky relationship between Jones and another member of the group, Ellen Foley.

In recent weeks, the lyrics of this song suddenly became popular along the corridors and in the meeting rooms of the Law Society. No, this wasnt because there is talk of any impending departure or issues of rocky relationships at the Secretariat. Thankfully, the issues are somewhat less emotional but they have become increasingly pressing in recent months.

Space, or the lack of it, has been the subject matter of these pressing concerns. With an increasing membership base, a fast expanding pro bono platform, greater engagement in law reform and enhanced membership services, headcount has been playing catch up in recent months; adding pressure to the already tight working conditions at our current premises at 39 & 41 South Bridge Road.

Members who have been to the Law Society premises recently would have seen how work areas have extended to the ground floor where the Re-Lex Lounge and part of the entrance lobby used to be. These renovations are indeed most timely in relieving extreme space shortage at the existing work place, but these are solutions on a very short-term basis.

HR projections and increased meeting room needs reveal that at least 2,000 square feet of additional work space would be required over the next two years. This additional

space requirement is not obtainable from renovating our existing office spaces.

Should we convert some of the space at the open roof top to office use? Should we close up the central staircase? Should we convert yet another meeting room to work stations? Shut down Jus Curio? Or, perhaps we should take additional space nearby whilst keeping the existing premises, operating out from three separate premises (including our Pro Bono Services Office at the Subordinate Courts Building)? Should we move to premises that could give us all the space we now use plus the additional 2,000 square feet we will eventually need and rent out our existing premises? Or should we perhaps sell our existing premises and buy a bigger home?

The lyrics of the song still ring in my ears.

If I go, there will be trouble And if I stay it will be double So you got to let me know This indecisions bugging me

Almost exactly 14 years ago on 25 May 1999 in what was described as a historic occasion by the late Mr R Palakrishnan, then Chairman of the Premises Committee, the Law Society commenced operations at our current premises. The description was apt because it marked the first time the Law Society was operating out of premises we owned and because this privilege was possible only because a group of visionary leaders of the Society also had the courage to mobilise the entire membership along a course that was not bereft of financial risks.

Today, that decision to take the bold step of buying the shophouse through the imposition of the building levy instead of the less painful decision of renting has been fully

Presidents Message

Singapore Law Gazette April 2013

Should We Stay or Should We Go 01

Presidents Message

Diary and Upcoming Events 06Council and Committee Update 08Law Fraternity Games 09

News

Amenability to Judicial Review: the Ambiguity in Manjit Singh v Attorney-General 14Misrepresentation, Fiduciary Duty and Negligence: 19Investor Scores Rare Win in Deutsche Bank v ChangRestraint of Trade: Freedom to Contract v Freedom to Trade in the Free Trade World 26

Features

Tea with the Law Gazette An Interview with Derrick Wong A Conveyancing Practice 32Pro Bono Publico Ensuring Access to Justice for All: HASI in Singapore 36

Columns

Legal Updates 40In Practice

Alter Ego The Entrepreneur Life 42Travel A Bangladesh Road Trip 44

Lifestyle

Notices Professional Moves 49Information on Wills 50

53 Appointments

Contents

The Singapore Law Gazette

An Official Publication of The Law Society of Singapore

The Law Society of Singapore39 South Bridge Road, Singapore 058673Tel: (65) 6538 2500Fax: (65) 6533 5700Website: http://www.lawsociety.org.sgE-mail: [email protected]

The Council of The Law Society of SingaporePresident Mr Lok Vi Ming, SCVice Presidents Mr Leo Cheng Suan Mr Thio Shen Yi, SCTreasurer Mr Kelvin Wong

Mr Wong Meng Meng, SC, Mr Young Chee Foong, Mr Lim Seng Siew, Ms Kuah Boon Theng, Ms Rachel Eng, Mr Adrian Tan, Mr Gregory Vijayendran, Ms Lisa Sam, Mr Michael S

Chia, Mr Moiz Sithawalla, Mr Anand Nalachandran, Mr Sean La Brooy, Mr Lee Terk Yang, Mr See Chern Yang, Ms Hazel Tang, Mr Josephus Tan, Ms Simran Kaur, Mr Kenneth See

Editorial BoardMr Gregory Vijayendran, Ms Malathi Das, Mr Prakash Pillai, Ms Celeste Ang, Mr Chua Sui Tong, Ms Vanessa Lim, Ms Lye Huixian, Mr M Lukshumayeh, Mr Marcus Yip, Mr Mohan Gopalan, Mr Rajan Chettiar, Ms Simran Kaur, Mr Supreeta Suman, Mr Vincent Leow, Mr Yeo Chuan Tat, Mr Yeoh Lian Chuan

The Law Society SecretariatChief Executive Officer Ms Tan Su-YinBusiness Development & Marketing Ms Adeline TanCommunications & Membership Interests Mr Shawn TohCompliance Mr Kenneth GohConduct Ms Ambika Rajendram, Ms Vimala ChandrarajanContinuing Professional Development Ms Jean WongFinance Ms Jasmine Liew, Mr Clifford HangInformation Technology Mr Michael HoPro Bono Services Mr Tanguy Lim, Ms Shahrany Hassan, Ms Usha ChandradasPublications Ms Sharmaine LauRepresentation & Law Reform Ms Michelle Woodworth Cordeiro, Ms Jasmine Foong

Publishing ReedElsevier(Singapore)PteLtd tradingasLexisNexisAssociate Director, Contract Publishing Ivan YapEditor ChandranieCover Design Ryan YeeDesigner Ryan YeeWeb Administrator Jessica WangAdvertising Account Manager Anthony Eng For Advertising EnquiriesTel: (65) 6349 0172Email: [email protected] Markono Print Media Pte Ltd

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The Singapore Law Gazette is the official publication of the Law Society of singapore. Copyright in all material published in journal is retained by the Law Society. no part of this journal may be reproduced or transmitted in any form or by any means, including recording and photocopying without the written permission of the copyright holder, application for which should be addressed to the law society. Written permission must also be obtained before any part of this publication is stored in a retrieval system of any nature. the journal does not accept liability for any views, opinions, or advice given in the journal. Further, the contents of the journal do not necessarily reflect the views or opinions of the publisher, the Law Society or members of the Law Society and no liability is accepted or members of the Law Society and no liability is accepted in relation thereto. Advertisements appearing within this publication should not be taken to imply any direct support for, or sympathy with the views and aims of the publisher or the Law Society.

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Continued from page 1

vindicated. The premises are today worth many millions of dollars, many times the price paid. We are certainly glad for that decision to buy.

The lesson I take away from the historic occasion is not just of the courage of the visionary leaders which had led to the fortification of our Balance Sheet by the millions which the property is worth today, but of the wise consultative process they invoked which helped to bind and unite the membership to the apparently risky decision to buy.

Today, we again are called to consider and to make an important decision on our premises. Dear fellow members, we are ready to share the ideas and information we have

gathered to date. It is time to discuss and we will listen. For starters, we will be having a special lunch on 9 May 2013 at the Subordinate Courts Bar Room at the Subordinate Courts Building, Level 1. In the meantime, suggestions and feedback are also welcome at [email protected]. Talk with us, as the words of these timeless lyrics (slightly modified) implore:

So you got to let us know Should we stay or should we go?

Lok Vi Ming, Senior Counsel President The Law Society of Singapore

The Art of Family Lawyering (2nd Edition)The 2nd edition of this publication is an initiative by the Law Societys Family Law Practice Committee and a collective

effort of 15 authors. It is a useful guide for practitioners keen on the area of Family Law. The book, which was first launched

in 2005, has been a recommended text for the Preparatory Course Leading to Part B of the Singapore Bar Examinations.

The book is available as an e-book (in pdf format) from

the Law Societys e-shop at $25.00 per copy. NUS/SMU

and Part B students enjoy a special rate of $20.00.Prices are inclusive of GST.

Get your copy at www.lawsociety.org.sg

> For Members > e-Shop and be updated

on the latest developments in family law!

Presidents Message


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Legal Counsel - financial institution singapore. Min 8 years pQe.

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Corporate secretariat Manager Logistics singapore. Min 5 years experience.

This excellent brand in the Singapore logistics industry is seeking a seasoned Corporate Secretarial Manager with the ability and nous to discharge all corporate secretarial duties in respect of the client, its subsidiaries, JVs and associated companies.

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1 March 2013UK and Singapore Banking, Arbitration and Insurance Review 2012 Jointly organised by the Continuing Professional Development Department and 2 Temple Gardens1.30pm-5.30pmMarina Bay Sands Convention Centre

6 March 2013What Every Lawyer Needs to Know About Applying for a Practising Certificate Briefing Session 2013 Organised by the Continuing Professional Development Department3.00pm-5.00pmLaw Society Conference Room

6 March 2013 Seminar on Challenging Clients, Challenged LawyersOrganised by the Continuing Professional Development Department3.00pm-5.30pmSupreme Court Auditorium

19 March 2013Seminar on the Psychology and Law of Witness PreparationJointly organised by the Continuing Professional Development Department and Singapore Psychological Society 4.30pm6.30pmNTUC Business Centre

21 March 2013 Law Society Councils Luncheon12.30pmSubordinate Courts Bar Room

28 March 2013 Primers on Professional Ethics and Legal Profession (Solicitors Accounts) Rules for Practice Trainees (Ethics)Organised by the Continuing Professional Development Department9.15am12.00pm NTUC Business Centre

25 March 2013Primers on Professional Ethics and Legal Profession (Solicitors Accounts) Rules for Practice Trainees (SAR) Organised by the Continuing Professional Development Department9.00am1.15pm NTUC Business Centre

Diary

Upcoming Events

16-18 May 2013Annual Malaysia/Singapore Bench & Bar Games 2013

21 May, 12 & 18 June 2013Primers on Professional Ethics and Legal Profession (Solicitors Accounts) Rules for Practice Trainees

7 May 2013Seminar on Demystifying Financial Statements

14 May 2013Investment Arbitration Seminar

News


Diary & Upcoming Events

Associate Ship Finance, 3+PQEIn light of regional growth plans, an international firm with a top tier ship finance practice is looking to hire an Associate. Whilst specific experience in handling ship financing transactions will be ideal, lawyers with general financing experience will also be considered. The role will work as part of a close-knit legal team and be involved in high-profile transactions. (Ref: CPP013)

Associate Aviation Finance, 1 4PQEAn exciting opportunity has arisen for an Asset Finance Lawyer to be part of the Aviation Finance and Leasing practice of an international firm. Work with highly regarded partners in the related industry and deal with big-ticket aircraft financing and leasing transactions. Strong academic credentials and commercial astuteness are prerequisites for this role. (Ref: CPP008)

Legal Counsel Private Banking, 5+PQEPursuing its regional goal to becoming a key player in the wealth management industry, this highly regarded financial institution is looking to hire a Senior Legal Counsel. Familiarity with banking and asset management products with a genuine interest in the establishment of a private banking arm is essential for this opportunity. This role offers excellent prospects and visible career progression. (Ref: CLIH195)

Associate Employment, 3 6PQEThis top-tier international law firm is currently seeking an Associate with at least three years of legal experience to support their Employment practice in their Singapore office. Possessing knowledge of domestic employment law issues, both contentious and non-contentious, you will work closely with the team in implementing cross-border employment strategies. (Ref: CPP011)

Head Legal/ Company Secretary Hospitality, 12+PQEA fantastic opportunity to head the legal and corporate secretariat team of a leading hospitality investment company has arisen. Possessing at least five years of experience as a named Company Secretary for a listed organization, the successful candidates will take responsibility for a global legal function and provide expert leadership, advice and guidance on all legal affairs. (Ref: CLIH179)

Legal & Compliance Manager REITS, 4 6PQEThis listed real estate fund house is recruiting a Legal Manager to oversee a regional legal and regulatory portfolio. Work in tandem with business units and be part of a small team that is responsible for a variety of corporate legal and operational matters. This is an exceptional opportunity to work for a group that has achieved astounding results over the last few years. (Ref: CLIH175)

Associate Tax, 2+PQEDriven by the growth of wealth management and complex transactions in the region, this leading international firm requires a corporate lawyer to be a part of their full service tax team. Strong experiences in tax laws involving corporate advisory, structuring and relevant regulatory matters are pre-requisites for the role. Singapore qualifications will be highly regarded.(Ref: CPP012)

Legal Counsel Offshore, 5 7PQEHeadquartered in the UK, this offshore engineering and construction conglomerate has a vacancy for a Legal Counsel to join its expanding operations in Asia. The appointee will act as legal advisor to the executive management team as well as the upholder of compliance relating to laws and regulations such as competition, UK Bribery Act and US FCPA matters. Travelling is required. (Ref: CLIH193)

Legal Counsel Manufacturing, 3 6PQEAn established semiconductor multinational is recruiting a dynamic Legal Counsel to provide advice and support to local and regional operations. The candidate will work closely with business units and assist with a wide range of commercial issues as well as daily operational matters. This exciting role will suit junior to mid-level lawyers looking to move in-house with on-the-job training and guidance. (Ref: CLIH192)

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Introducing the Singapore Law Gazette AwardsThe Law Society will be awarding two awards for best feature article in the Singapore Law Gazette in 2013. Two awards, namely, Best Feature Article and Best Feature Article by a Young Lawyer* will be awarded for the best two articles published in the Features section of the Singapore Law Gazette during the period July 2012 to June 2013. Articles published in the Features section are required to have substantive law content. The judging process will commence in June 2013 and the winners will be announced in the 4th quarter of 2013.

The Feature articles will be judged based on the following:1. Depth of analysis, display of thought leadership and

whether cited in a judgment (30% weightage);

2. Depth of research (30% weightage);

3. Writing style (20% weightage); and

4. Votes by members (20% weightage).

We welcome article contributions to the Singapore Law Gazette. Apart from the opportunity to share your views on an area of law of interest to you and the satisfaction of seeing your name in print, you might stand a chance to win the coveted award as well. If you are interested in contributing an article to the Singapore Law Gazette, please contact Publications Director, Sharmaine Lau, at [email protected]

* Best Feature Article by a Singaporean or PR above 35 years of age at the time of submission of the article, and who is a practising member, former member, member of the Judiciary/AGC/government body, law academic, or in-house counsel. Articles written jointly by two or more persons qualify as well.

Best Feature Article by a Young Lawyer who is a Singaporean or PR and is 35 years of age or below at the time of submission of the article, and who is a practising member or former member.

Council and Committee UpdateCouncils Practice Direction 1 of 2013 Granting of Access for E-Lodgement and Registration of Singapore Land Authority (SLA) Documents/Instruments for Conveyancing Transactions

Councils Practice Direction 1 of 2013 on Granting of Access for E-Lodgement and Registration of Singapore Land Authority (SLA) Documents/Instruments for Conveyancing Transactions took effect on 26 March 2013.

This Practice Direction states that in all conveyancing transactions and unless otherwise agreed between parties, solicitors acting for any party(s) obliged to grant access for encryption and e-lodgement of SLA documents/instruments shall do so within three working days after completion (for purpose of registration of documents/instruments).

Councils Practice Direction 1 of 2013 is available at the Societys website (Members Library > Practice Directions, Rulings and Guidance Notes of the Council).

Conveyancing Practice Committee Circular 1 of 2013 Amendments to Recommended Clauses in Options to Purchase and Sale and Purchase Agreements

The Law Societys Conveyancing Practice Committee (the Committee) has issued a circular on 29 January 2013 concerning the recommended clauses to be used in

Options to Purchase (Options) and Sale and Purchase Agreements (S&P Agreements).

In light of the issuance of the Law Society of Singapores Conditions of Sale 2012, the Committee has reviewed the recommended clauses for Options and S&P Agreements as set out in the Committees Circular 2 of 2011 and updated the recommended clauses. In the process of this review, the Committee sought the views of the Ministry of Law and other relevant stakeholders. The updated recommended clauses for Options and S&P Agreements are annexed to the Committees Circular 1 of 2013.

The Conveyancing Practice Committees Circular 1 of 2013 is available at the Societys website (Members Library > Practice Matters > Conveyancing).

Law Awareness Project 2013

The bi-annual Law Awareness Project spearheaded by the Law Awareness Committee, will focus on a youth theme for 2013.

Collaboration between Family Law Practice Committee and Singapore Academy of Law to Organise Seminars

The Family Law Practice Committee will be collaborating with the Singapore Academy of Law to co-organise seminars on family law.

News


Council and Committee Bulletin

Co-organised by the Law Society, National University of Singapore (NUS) and Singapore Management University (SMU), the Law Fraternity Games took place from 1 to 2 February 2013. A total of 11 competitive games and two friendly games were played, with the rankings of each game as follows:

Hear from some of Law Societys champion teams:

Law Fraternity Games 1-2 February 2013

Sport 1st 2nd 3rdBasketball (men's) Law Society NUS SMUSoccer (women's, friendly) NUS Law Society -Tennis (mixed) Law Society NUS SMUPool (friendly) Law Society SMU -Badminton (mixed) Law Society NUS SMU

Volleyball (mixed) Law Society NUS SMUNetball (women's) Law Society NUS SMUFrisbee (mixed) Law Society NUS SMUTouch Rugby (mixed) Law Society NUS SMUFloorball (men's) Law Society NUS SMUFloorball (women's) Law Society NUS SMUSquash (mixed) NUS Law Society SMUSoccer (men's) NUS Law Society SMUOVERALL Law Society NUS SMU

Basketball We are on a roll! Fresh from breaking the Accountants vice-like grip on the Inter-Professional Games (IPG) basketball event last November to become IPG champions for the first time, the Law Society basketball team followed up with victory over the Law faculty students from NUS and SMU to defend our title in the Law Fraternity Games (LFG).

Admittedly, the stars were not aligned in our favour in the weeks leading up to the tournament. Four of our key players were either called up to serve the nation, away on business or sunning themselves at a beach resort in some remote part of the globe. All lame excuses if you ask me! Further, rumours of a new superstar

News


Law Fraternity Games

addition to the NUS team which ran us close last year meant that we approached this years LFG with trepidation.

Our fears proved unfounded. Decked out proudly in our spanking new jerseys for our first game against NUS, our grey haired senior citizen starters, with an average age of about 40 and led by our own superstar first-year point guard Darren Chua, played with a fire hotter than that of Mordors Mount Doom. Take away the braces and bandages covering every joint in their bodies and add some black hair dye and botox and the reasonable bystander would have thought he was watching a match between two student teams. With the tough to beat combination of effort, enterprise and experience, we raced away from the outset and never looked back, eventually winning by more than 30 points.

Particularly noteworthy was Daniel hitting two 3-pointers in the fourth quarter after having sprained his ankle in the second quarter.

The NUS team beat SMU in the second match of the day, which meant that a victory over the seemingly weaker SMU team would seal the deal for us.

We were in for a rude shock, however. Whether it was complacency or bad luck, or simply a case of old legs needing

more time to loosen up after a hard game, we always seem to dig ourselves into a hole in key matches against teams we really should beat. As was the case with the doctors in the IPG, the SMU players came out hitting everything and beating us to rebounds, and we found ourselves trailing for most of the first two quarters. Nevertheless, we gradually clawed our way back and triumphed by a close but comfortable 12 points.

The cost of our victory? Besides Daniels sprained ankle, there were jammed fingers and toes, a creaky back, sore knees and cramps shared between Alvin and Leonard, who proceeded for a well-deserved massage, hopefully at a wholesome establishment.

Thanks to the guys who played with unreserved effort Alvin Chang, Kenneth Choo, Darren Chua, Leander Coutinho, Gan Theng Chong, Leonard Koh, Daryl Sim, Daniel Tan, Wee Choo Hua, Wong Foong Wee and Jeremy Yap and thanks to the NUS and SMU players for another most enjoyable LFG.

Wong Foong WeeActing Captain Law Society Basketball Team

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BadmintonMen (and women) do not quit playing because they grow old; they grow old because they quit playing.

- Oliver Wendell Holmes

They say that age is all in the mind and the trick is keeping it from creeping down into your body (especially the hips). The tired and weary bones belonging to the players of the Law Societys badminton team certainly had some tricks up their sleeves when we played against the law students from NUS and SMU at the Law Fraternity Games.

The match ups, on paper at least, did not favour the Law Society team. We were up against youngsters who have never heard of Ice Ice Baby and think that Engelbert Humperdinck is a bad word. The first match was between the Law Society and SMU. The combined age of SMUs first mens doubles team was the same as one of the players on the team from Law Society. Fortunately, we had experience (and luck) on our side and we drew first blood by beating SMU with a score of 41. The most exciting match of that series was between the womens doubles pairing. It was a hard fought encounter with the match going to a third set. Unfortunately, the SMU team had a couple of shots go their way and they edged it in the rubber set. In the mixed doubles match, Associate Professor Low Kee Yang from the Law Society team, managed to squeeze some time in between giving lectures at SMU to show his students how its done by executing a Lin Dan-esque back hand cross-

court drop from the baseline, much to the awe and admiration of those present.

In the next match against the NUS team, our opponents raced to a 20 lead after NUS taking the first mens and ladies doubles match. NUS, knowing that we were tired out from the match against SMU, dragged our players to all corners of the court with well placed shots. Fortunately, we roared back by taking the remaining matches after we managed to dictate the pace of play and played to our strengths (which was diminishing by that

time) instead to eventually be crowned LFG 2013 badminton champions. This just shows that slow and steady does win the race ... sometimes.

In the final match of the afternoon, NUS beat SMU with a score of 32 to finish in second place. This match gave us an opportunity to identify some of the brighter badminton talents to replace some of us in the upcoming editions of the Bench & Bar Games and other competitions, which we regularly participate in, before the hips and knees have to replaced after years of abuse on the badminton courts. All in all, it was a good afternoon for the Law Society badminton team. However, we realised that it was no longer the proverbial walk in the park. Time to OD on the glucosamine!

Muhamad ImaduddienConvenorLaw Society Badminton Team

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Volleyball Although I had just concluded a busy week at work and all I wanted to do was take a nap in the afternoon of 2 February, I found myself at my alma mater instead, for a (friendly) face-off against SMU and NUS in a game of volleyball.

I was promptly joined by my teammates who came in one after another in their Saturday lounging around attire. Having trained eagerly for some time now, the team couldnt wait to finally play an actual game against real opponents and although the Law Society team had known all along that we would be up against much younger and fitter teams, we were determined to put up a fight and snatch ourselves a victory.

Law Society vs NUS

The games kicked off with the Law Society team going up against the NUS team. Even though Law Society drew first blood and gained several consecutive points against NUS, our opponents quickly warmed up and started scoring good blocks and swift spikes. Before long, we found ourselves panting and scrambling on court to defend our lead. Although we eventually triumphed in the first and second set, it was only by a close margin.

With two sets down, the Law Society was left with one more set to clinch the win over NUS but our younger and more agile opponents took advantage of their youth by sending thunderous spikes that left us collapsing to the ground time and again. While we put up a tough fight, NUS determination to win claimed victory against us in the third and fourth set.

The fifth and final set between NUS left the supporters at the edge of their seats. On display from both teams were premeditated tactical moves, quick reflexes and, of course, very aggressive spikes, which attracted loud cheers from the supporters. Fortunately, Law Societys potent mix of skill and experience eventually won us the game and it could definitely be said that NUS did not make things easy for us.

Final score: Law Society wins 32.

NUS vs SMU

Given that we had played way into the time scheduled for the first match, in the interest of time, all teams decided to convert the games from a best-of-five to a best-of three. For the second game, perennial and eternal archrivals SMU and NUS faced off. Despite being few in number, SMU teams daunting height would have struck fear in any teams heart. On the other hand, it was clear to any spectator that NUS was anxious to register a win against SMU.

Although NUS took the lead for most of the game, the rallies subsequently became longer as SMU warmed up. It was an exciting match and could have been anybodys game. Despite being the stronger team, NUS made a series of errors that lost them several points. However, faced with the possibility of losing, NUS eventually snapped back into their rhythm to take the lead over SMU. Bent on not going down without a fight, SMU tapped on the athleticism of their team players to stay in the game. Alas, NUS strong spikes and smart tactical moves eventually won them the game against SMU.

Final score: NUS wins 20

When the match between NUS and SMU concluded, it was already time for many players to rush off to their various evening appointments and by consent, the three teams decided to call it a day and name the winners in the following order:

First Place: The Law Society

Second Place: NUS

Third Place: SMU

After the winners were announced, a handful of players from the Law Society decided to stick around to play a recreational game with the SMU team and given that the competitive element was taken out of the game, there was an easy camaraderie between the teams as we shared laughs in between the points. All in all, the Law Fraternity Games was a great opportunity for the lawyers and legal officers to meet and mingle with the younger members of the fraternity and vice versa and I am sure my teammates will all agree that it was a Saturday afternoon well spent.

Leann LeeTeam PlayerLaw Society Volleyball Team

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Closing Dinner In celebration of the closure of the Games, a Closing Reception was held on the last day of the games. Laura Liew, Chairperson of the Sports Committee, presented the championship trophy to Joseph Liow who received the trophy on behalf of the Law Society. The Law Society thanks all members as well as the NUS and SMU Law Faculty participants for their support of the Law Fraternity Games.

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Amenability to Judicial Review: the Ambiguity in Manjit Singh v Attorney-GeneralThere is in administrative law, a difficult but fundamental question: when is a decision amenable to judicial review? The beguiling reply that a decision is amenable to judicial review where there is a public element serves only to recast the same question in a different form: what counts as a public element? Thereon, the mind is led down paths of fine distinctions that, more often than not, end in confusion. The Court of Appeals recent decision of Manjit Singh s/o Kirpal Singh and another v Attorney-General [2013] SGCA 22 (Manjit Singh) lays down what appears to be a clear framework of analysing the issue of amenability to judicial review. The promise of an admirably simple starting point for future cases beckons. Yet an ambiguity lurks within. This article identifies that ambiguity and explains why it is important.

Manjit Singh v Attorney-General A Brief Summary

The appellants in Manjit Singh were Mr Manjit Singh and Mr Sree Govind Menon (collectively, the Appellants). A complaint had been made against them to The Law Society of Singapore. Pursuant to s 90(1) of the Legal Profession Act (Cap 161, 2009 Rev Ed) (the LPA), the Chief Justice appointed Mr L P Thean as the chairman of the Disciplinary Tribunal. The Appellants wrote to the Chief Justice objecting to the appointment on the essential ground that Mr L P Thean might be in a position of conflict.1 Subsequently, the Chief Justice, without accepting the truth of the Appellants allegations of impartiality, appointed Mr G P Selvam instead to head the Disciplinary Tribunal. The Appellants again wrote in to object to the appointment of Mr G P Selvam on the ground that he might not be fully impartial.2 The Appellants also suggested a list of more than ten Senior Counsel from which the chairman of the Disciplinary Tribunal could be appointed.3

This time, the Chief Justice did not accede to their request. After an exchange of correspondence with the Disciplinary Tribunal Secretariat, the Appellants applied for leave to apply to quash the Chief Justices decision to appoint Mr G P Selvam.

The Appellants leave application raised two essential issues:1. Whether the Chief Justices decision to appoint Mr G P

Selvam was amenable to judicial review; and

2. Whether there was sufficient factual merit to grant leave.

The first issue was one of law, and the second, one of fact. The Appellants would have to succeed on both issues for leave to be granted. As it was, the Appellants failed on the second issue in the High Court and on appeal. Both Courts held that the Appellants allegations of bias or lack of natural justice were factually unsustainable. But the Court of Appeal differed from the High Court on the first issue. The High Court had held that the Chief Justices decision was not amenable to judicial review;4 the Court of Appeal disagreed. The rest of this article will focus on the analytical framework that the Court of Appeal applied in arriving at its decision that the Chief Justices decision was amenable to judicial review.

The Court of Appeals Analysis on Amenability to Judicial Review

The crux of the Court of Appeals reasoning that the Chief Justices decision was amenable to judicial review is found at [25]-[33] of the Grounds of Decision. The Chief Justices power to appoint the chairman of the Disciplinary Tribunal stems from s 90(1) of the LPA. The Appellants argued that the source of the Chief Justices decision was statutory and that the exercise of a statutory power was always amenable to judicial review.5 The Attorney-General disagreed and submitted that the source of a power had never been held to be the sole determinative factor of whether a power or decision was amenable to judicial review. This was because the Courts would also consider the nature of the power.6

The Court of Appeal began its analysis by stating the uncontroversial proposition that [i]n modern administrative law, it is well-established that powers which are not conferred by statute may still be amenable to judicial review.7 But of course, this proposition was, in the circumstances, neither

An analysis of the recent Court of Appeal decision of Manjit Singh s/o Kirpal Singh and another v Attorney-General [2013] SGCA 22.

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here nor there since the power exercised by the Chief Justice had been conferred by statute. The Court of Appeal, therefore, went on to crystallise the core issue as: This appeal concerned the opposite question: whether, in some circumstances, a power conferred by statute may not be amenable to judicial review.8

Having set out clearly the point of engagement, the Court of Appeal then stopped short of accepting the Appellants contention that the exercise of a statutory power necessarily meant that it was amenable to judicial review. Instead, the Court held that the exercise of a statutory power would ordinarily be amenable to judicial review, unless compelling reasons to the contrary existed.9 What would count as a compelling reason to the contrary? It would be a reason that indicates the absence of such a public element in what is nonetheless a statutory power or duty.10 The Court of Appeal took the plainly correct view that there would be no judicial review without a public element. It gave the powers conferred by the Companies Act (Cap 50, 2006 Rev Ed) and the Trustees Act (Cap 337, 2005 Rev Ed)11 as two general examples of statutory powers without a public element.

The effect of the Court of Appeals decision in Manjit Singh is that now every exercise of a statutory power is prima facie amenable to judicial review. It is then up to the Attorney-General to argue that there are compelling reasons not to judicially review the decision. In most cases, this will be through showing a lack of public element justifying judicial review. This clean analytical framework is premised on the sound principle that there is a public interest in ensuring

that statutory powers are exercised lawfully.12 Good governance and the rule of law demand that the exercise of statutory powers is prima facie subject to the supervisory jurisdiction of the Courts.13 It follows that, as the Court of Appeal helpfully clarified, a decision may be amenable to judicial review even if the applicant had not suffered harm as a result. This is because judicial review is concerned with the process whether the decision-maker overstepped the limits of his power not the actual outcome.14

Since the Chief Justice had indisputably exercised a statutory power in appointing Mr G P Selvam, that decision was, on the Court of Appeals analysis, prima facie amenable to judicial review. It was then for the Attorney-General to argue that the required public element was lacking. None of the Attorney-Generals other arguments obviously addressed the issue of a lack of public element,15 so the default position prevailed: the Chief Justices decision was amenable to judicial review.

The Ambiguity

The careful reader will have noticed by now that there is an ambiguity in what exactly the Attorney-General must show to displace the prima facie position that the exercise of a statutory power is amenable to judicial review. At least two interpretations of Manjit Singh are possible: (i) the Attorney-General must show the absence of a public element;16 or (ii) the Attorney-General must show the lack of a sufficient public element.17 Both interpretations are problematic, and both have practical consequences for the practitioner.

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Absence of a Public Element

The first interpretation of Manjit Singh is that the Attorney-General has to show the absence of any public element. In other words, the Attorney-General has to show that there was no public element involved. Apart from requiring the Attorney-General to essentially prove a negative, this interpretation of Manjit Singh would have far-reaching consequences. In particular, it would seem that henceforth, any exercise by a government ministry or statutory board of a statutory power will necessarily be amenable to judicial review the required public element being provided by the character of the decision-maker.

Hence it would mean that the Jurong Town Corporations (a statutory board) decision to grant a scholarship (being the exercise of a statutory power under s 12(2)(gb) of the Jurong Town Corporation Act (Cap 150, 1998 Rev Ed)) (JTC Act) would necessarily be amenable to judicial review. It would also mean that Manjit Singh may have impliedly18 overruled the High Court decision of UDL Marine (Singapore) Pte Ltd v Jurong Town Corporation [2011] 3 SLR 94 (UDL Marine).

Briefly, the applicant in UDL Marine (UDL) sought judicial review of JTCs decision not to renew UDLs lease of certain waterfront industrial premises. One question before the High Court was whether JTCs decision not to renew the lease was amenable to judicial review. The learned Judge accepted that JTCs power to lease land was ultimately derived from statute, s 12(2)(d) of the JTC Act.19 But on the facts, her Honour held that the source of JTCs decision not to renew the lease had instead been the lease contract.20 This was one reason why JTCs decision was not amenable

to judicial review. But one might argue that even if JTC had been exercising its contractual right not to renew the lease, JTC would still have been concurrently exercising its statutory power to lease.21 As JTC is a body created by statute, its powers are necessarily circumscribed by what Parliament has granted. It cannot contract to confer itself powers that it does not have.22

How would the present interpretation of Manjit Singh apply to the facts in UDL Marine? Since JTC was exercising a statutory power when it decided not to renew the lease, that decision would prima facie be amenable to judicial review. JTC is a statutory body discharging the public function of developing industrial land in Singapore.23 Since JTC is clearly a public body, there would exist a public element such that the Attorney-General would not be able to show the absence of any. It follows that JTCs decision would have been amenable to judicial review. But it is not clear whether the Court in Manjit Singh had intended to overrule UDL Marine as the latter case was not discussed. Neither did the Court of Appeal discuss the aspect on amenability to judicial review in its earlier decision of Public Service Commission v Lai Swee Lin Linda [2001] 1 SLR(R) 133, which also concerned the question of whether the source of a public bodys decision was statutory or contractual. For these reasons, one could ask if the present interpretation reads too much into Manjit Singh.

Lack of a Sufficient Public Element

The second interpretation of Manjit Singh is that the Attorney-General only has to show the lack of a sufficient public element. In other words, the Attorney-General does

A room cannot be empty if there is a ball, however small, in it.

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not have to show that there is no public element; he only has to show that the public element(s) are insufficient or inadequate to justify judicial review. Hence the second interpretation of Manjit Singh is less demanding of the Attorney-General than the first. The difficulty with this interpretation is that it is like trying to nail jelly to a wall:24 the sufficiency of a public interest justifying judicial review is likely to depend on a combination of value judgement and facts. Neither does Manjit Singh explain how a public element may be sufficient, or why it was sufficient on the facts of the case.

Requiring the Attorney-General to show the lack of a sufficient public element would also in effect shift the enquiry from identifying the source of the power (which would be simple) to identifying the sufficient public interest (which would not). Why bother with the source of the power when the real fight is whether there is a sufficient public element? But such an outcome would seem incongruous with the tenor of Manjit Singh, which repeatedly emphasised the importance of keeping the exercise of a statutory power within its legal limits.25

Practical Considerations

As noted, there are difficulties with the two interpretations of Manjit Singh set out above. These theoretical difficulties may have practical consequences, some of which will now be identified.

If the first interpretation is correct that the Attorney-General has to show no public element the applicant seeking judicial review of a statutory power only has to point to one public element to succeed on the point of amenability to judicial review. One expects that this would not be too difficult a room cannot be empty if there is a ball, however small, in it. One could go further and say that in this case there is no such thing as an empty room: as the Court in Manjit Singh observed, there will almost invariably be a public interest in ensuring that statutory powers are exercised lawfully.26 Hence, there would be a clear strategic advantage for the applicant to seize the initiative and identify the public element from the outset.

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But if the second interpretation is adopted that the Attorney-General has to show insufficient public element it is not so obvious that the applicant should at the outset attempt to identify a sufficient public element. Given the uncertainty over what exactly a sufficient public element is, and given that Manjit Singh did not expressly identify where the public element lay in the Chief Justices exercise of the s 90(1) LPA power, there might be some merit in allowing the Attorney-General to, so to speak, go first.

It is also noted that on either interpretation, identifying the publicness of a particular function may prove controversial in borderline cases. Substituting public for governmental,27 as some authorities have done, provides only limited clarification. Indeed, the Court of Appeal in Manjit Singh approved the English Court of Appeals dicta that the search for a public element is very broad, not to say question begging.28 Significantly, the inquiry into whether there exists a public element or sufficient public element is often premised on ones theory of the State countries draw the line between public and private functions in different places at different times.29 Such political differences between jurisdictions (which are sometimes reflected in domestic legislation) should not be ignored. Practically speaking, this means that there will be cases where counsel will certainly be put through their paces in marshalling the relevant comparative and socio-scientific materials to assist the Court. At a more theoretical level, some may question whether this is an inquiry which is even appropriate for the Courts. There would appear to be no straightforward answers.

Conclusion

The Court of Appeals judgment in Manjit Singh is tantalising, both for what it promises and what it withholds. At first it appears that a plain and clear analytical framework has been provided for future judicial review of statutory powers. But as explained above, things are not quite as simple as they seem. It looks like the project has only just begun.

Notes

1 [6] of the GD.

2 [9] of the GD.

3 [8(e)] of the GD.

4 The High Courts decision on this point is summarised at [16(b)] of the Court of Appeals GD.

5 [25] of the GD.

6 [25] of the GD.

7 [27] of the GD.

8 [27] of the GD.

9 [28] of the GD.

10 [32] of the GD.

11 [31] of the GD.

12 [60] of the GD.

13 [52] and [55] of the GD.

14 [53] of the GD.

15 The Attorney-General had instead made the two main arguments that: (i) the character of the decision ie, that it involved no element of discretion and was hence ministerial rendered it unsuitable for judicial review; and (ii) that judicial review was excluded by s 91A of the LPA. Both arguments were rejected by the Court: see [35] and [58].

16 [32] of the GD.

17 Supported by the quote at [32] of the GD from Regina (Beer (trading as Hammer Trout Farm)) v Hampshire Farmers Markets Ltd [2004] 1 WLR 233, which refers to whether the decision has a sufficient pubic element, flavour or character to bring it within the purview of public law.

(emphasis added)

18 Because the case was not discussed in Manjit Singh.

19 [54] and [55] of the judgment.

20 [56] of the judgment.

21 The statutory power to lease would include the power not to lease: s 27(3) of the Interpretation Act (Cap 1, 2002 Rev Ed).

22 See Padfield v Minister of Agriculture Fisheries and Food [1968] AC 997.

23 At [54] of the judgment.

24 To borrow a simile from The Economist.

25 Ibid, note 9.

26 [60] of the GD.

27 See R v Disciplinary Committee of the Jockey Club, ex parte Aga Khan [1993] 1 WLR 909 at 923.

28 [32] of the GD.

29 See Aga Khan at 932 where Hoffman LJ made reference to the fact that horseracing in Tasmania is regulated by a statutory body. One might argue that eg cricket in Sri Lanka comes close to being a public interest.

30 BA (Oxon), BCL.

31 LLB (LSE), BCL.

Tham Lijing30 Tan Rajah & Cheah E-mail: [email protected]

Calvin Liang31 Tan Kok Quan Partnership E-mail: [email protected]

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It is becoming common for a defendant to an action based on misrepresentation to allege that a contract clause estops the plea. The Deutsche Bank decision grapples with some of the difficult issues in this novel area of law.

Misrepresentation, Fiduciary Duty and Negligence: Investor Scores Rare Win in Deutsche Bank v ChangIntroduction

Law reports of the last decade are littered with unsuccessful suits by investors against their banks for negligent or unsuitable advice. Rarely do investors succeed. This is despite the wide array of courses of action available, allowing them to sue for breaches by the bank of contractual duty (in particular, through misrepresentation), duty of care, statutory duty and fiduciary duty. Yet, often, the investor stumbles and the reasons include:1. No duty was owed to the investor;

2. There was no breach of duty;

3. There was no causation; and

4. Liability was negated by contract clauses.

The outcome also tends to be negative where the claimant:1. is a sophisticated investor;

2. is an institution rather than an individual; or

3. has strong financial resources (is of high net worth, so the banking clich goes) and thus is in a good bargaining position.

Against such a background, the recent Singapore High Court decision in Deutsche Bank v Chang Tse Wen1 is a momentous one. In this case comment, we consider the decision and its implications.

Facts

The defendant Chang Tse Wen (Chang), a Taiwanese scientist, was about to receive a considerable amount of new wealth (US$118m) through selling his shares in a company he founded. Wan Fan Ting Johnny (Wan) was a relationship manager at Deutsche Bank (the Bank), the plaintiff. Wan, who first met Chang while Wan was an employee at another bank, courted Chang as a prospective client and was aware that Chang had limited investment experience. After a presentation by Wan, Chang opened an advisory account with the Bank and signed a Service Agreement and a Derivative Agreement. The Bank also extended to him unsolicited margin financing to the tune of US$35m.

Through this account the Bank sold Chang derivative products called Discounted Share Purchase Programmes (DSPPs, also known in the industry as accumulators). An accumulator is a speculative product which commits the buyer to purchase more of certain shares if its price falls below a specified price and allows the seller to terminate the contract if the share goes above another specified price. Within a short period of time commencing mid-November 2007, Chang purchased 34 DSPPs (the first 32 within 23 days).

Chang learnt for the first time in March 2008 that he had an exposure of US$78m and thereafter faced several margin calls. Subsequently, in November 2008, the Bank exercised its contractual termination and security rights and liquidated

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the shares in the account, with a net amount of close to US$1.8m owing to the Bank. The Bank sued for this sum while Chang counterclaimed for his investment loss of US $49m.

Arguments

Chang mounted three arguments in support of his counterclaim. First, Chang argued that the Bank had through Wan misrepresented that they would provide him with advice to manage his new wealth, including acting in his best interests, understand his investment objectives and provide suitable products and advice.2 Second, he argued that the Bank owed him a fiduciary obligation and that this obligation was breached. Third, Chang argued that the Bank owed him a duty of care and was in breach of this duty.

The Bank challenged these assertions, adding that the disclaimers contained in the Service Agreement and the Derivative Agreement estopped Wans assertions.

Decision

Justice Philip Pillai decided in favour of Chang, holding that Deutsche Bank had breached its duty of care to Chang and that the disclaimers did not estop Changs claim. The arguments based on misrepresentation and fiduciary duty, however, were dismissed.

Reasoning and Writers Comments

Misrepresentation

As regards misrepresentation, Justice Pillai pointed out that the statements were not statements of fact but rather statements as to intention or future conduct. He acknowledged that statements of intention can, in certain circumstances, amount to misrepresentation but found no evidence that the Bank or Wan did not have an honest belief in the statements of intention that were made. He also doubted if some of the statements were not business promotional puffs3 and mere praise and non-actionable hyperbole.4

Of course, this is a matter of evidence and the Judge is best placed to make the assessment, but one cannot help but sense from the backdrop of the case, a significant amount of dishonesty on Wans part. It seems incredulous that an inexperienced investor should be introduced to such a risky product. An observer would have serious doubts as to whether Wan had any intention to give Chang appropriate advice.

Fiduciary Duties

His Honour surveyed the relevant principles and authorities on the subject. He noted5 that apart from where the duty arose by contract and by established categories of relationships, the circumstances had to be sufficiently exceptional for a duty to arise. Such exceptional circumstances can be found if there had been an undertaking, express or implied, by one person to put the other persons interest ahead of his own.6 Here, he cited approvingly the following passage of the Singapore Court of Appeal in Ng Eng Ghee v Mamata Kapildev Dave:7

The raison detre of fiduciary obligations is that an agent who has undertaken to act in the interests of another person (the principal) should not be permitted to act against his principals interest. Indeed, a distinguishing characteristic of recognized fiduciary relationships is the peculiar vulnerability of a party to be affected by an abuse of a power or duty that has been entrusted to another (emphasis added)

He then stressed the importance and necessity of finding facts to support an express or implied undertaking, cautioning:

it is grossly unacceptable for the court to read equity backwards and impose fiduciary duties on an errant party whenever the court thinks that if it is fair, just and reasonable to do so.

Pillai J then turned to the facts, including the fact that Wan knew that Chang was financially inexperienced. His Honour, however, concluded there was no undertaking by Wan to place Changs interest above his own. In his view:

whilst the conduct does not reflect best industry practice, it is insufficient to establish that the RM and DB had exceptionally undertaken to promote Dr Changs interests above their own. The starting point of a self-interested RM and DB has not on these facts been displaced by exceptional circumstances warranting an assumption of fiduciary obligation to Dr Chang.

(emphasis added)

He also noted, obiter, that the contractual clauses have no effect on fiduciary obligations.

The writer acknowledges that outside of contract and established categories, exceptional circumstances are required for a fiduciary obligation may be found. One also understands the position that a fiduciary obligation should

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not be imposed just because it is just, fair and reasonable to do so. However, the writer has doubts as to the application of the principles to the facts of the instant case.

Particularly perplexing is the Judges adoption of the starting point of a self-interested relationship manager and bank. The Monetary Authority of Singapore (MAS) has high expectations of the providers of financial services and rightly so. The Guidelines on Fit and Proper Criteria issued by the MAS, for example, explicitly require them to perform their activities honestly, fairly and to act in the best interests of their customers.8 One wonders, then, how such a starting point could be judicially tolerated or endorsed.

Further, the learned Judge had cited the passage from Ng Eng Ghee that a distinguishing characteristic is the peculiar vulnerability of a party. On the facts, Wan had pursued a newly wealthy client whom he knew had limited investment experience. Could it not be said, in the circumstances of the case, that Chang had a peculiar vulnerability and that Wan had undertaken to act in Changs best interests?

There is reason to wonder whether, on the facts of the case, Wan and Deutsche Bank did not owe Chang fiduciary duties.

Negligence

Justice Pillais analysis9 of the negligence liability of Wan and the Bank began with what is by now the standard Spandeck10 approach in ascertaining whether there is a duty of care, namely:1. the threshold test of factual foreseeability;

2. the first stage of legal proximity, based on the twin criteria of voluntary assumption of responsibility and reliance; and

3. the second stage of asking if there are any policy considerations that would negate the duty.

In short, a Singapore Court would go through the requirements of foreseeability, proximity and policy.

His Honour then cited with approval the principles laid down by Gloster J in JP Morgan v Springwell (Springwell)11 for ascertaining if a duty of care arose between a bank and its client and noted that the mere giving of advice, even specific investment advice, is without more insufficient to establish a duty of care.12 Of these, he thought, citing Ellingers Modern Banking Law, the following were particularly important:

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1. The customers degree of commercial sophistication and financial acumen;

2. The extent to which the bank held itself out as offering financial advisory services or as a financial expert;

3. The status and role of the banks representative; and

4. Even where the bank has crossed the line to become a financial adviser, whether the contractual terms negated the existence of a duty of care.

Applying these factors to the case before him, Justice Pillai concluded that Wan (and the Bank) had crossed the line and assumed a duty of care towards Chang. As for the possibility of contractual clauses negating the duty, he noted that a tortious duty could exist concurrently with a contractual duty, citing Henderson v Merrett13 and Go Dante Yap v Bank Austria Creditanstalt.14 Observing how, on the facts, there was complete asymmetry of commercial sophistication and experience between Chang and the Bank, his Honour concluded that the duty was not negated by the contractual disclaimers. He added that, in any event,15 Chang was relying on a pre-contractual duty.

Evidential Estoppel, Contractual Estoppel

His Honour then proceeded to consider the issue of whether the contractual disclaimers operated to estop Chang from alleging that Wan and the Bank had been negligent. The Service Agreement had several disclaimers, including the following:161. We and our affiliates are not acting as your fiduciary

or adviser in respect of any services provided to you unless expressly agreed in writing ;

2. You have made your own decisions in relation to any transaction with us and as to whether any such transaction is appropriate for you; and

3. We may (but need not) give advice or make recommendations. If we do so, such advice or recommendations are given and [sic] on the basis you will make your own assessment and rely on your own judgment.

The Derivative Agreement had similar clauses.17

Justice Pillai then considered the doctrine of evidential estoppel (also known as estoppel by representation) laid down by Diplock J (as he then was) in Lowe v Lombank (Lowe)18 and its three requirements that:1. the clause is clear and unambiguous;

2. the representor intended the representee to act on the statements in the clause; and

3. the representee entered into the contract in the belief that the statements were true.

His Honour observed how in the development of the principle of contractual estoppel, starting from the English Court of Appeal decision in Peekay Intermark v ANZ Banking,19 the second and third requirements of the Lowe principle were watered down and that contractual estoppel reached its high watermark in the English Court of Appeal decision in Springwell v JP Morgan Chase.20

He then referred to the Singapore Court of Appeal decision in Orient Centre Investments v Societe Generale (Orient) where the Court observed:21

In our view, the combined effect of the express general and specific terms and conditions applicable to the structured products provides an insuperable obstacle to any claim by the [plaintiffs] against [the defendant] based on an alleged breach of representations or duties, fiduciary or contractual or on negligence on the part of [the second plaintiff].

He stressed that in Orient, both plaintiffs were financially sophisticated parties (unlike Chang in the case before him). He then noted the intimation of Chan Sek Keong CJ in Als Memasa v UBS22 that it may be desirable to reconsider whether financial institutions should be entitled to rely on disclaimers and non-reliance clauses which unsophisticated customers might have been induced or persuaded to sign without truly understanding their potential legal effect.23

Applying the law to the facts before him, Pillai J held that evidential estoppel did not avail the Bank as the second element of the doctrine that the representor intended the representee to act on the statements was not satisfied. He added24 that the position might have been different had Chang been told before he signed the account opening form that he could not rely on Wan or the Bank to exercise reasonable care in advising him.

As regards contractual estoppel, Justice Pillai was extremely hesitant to apply the doctrine. Although he thought he was bound by the Singapore Court of Appeal decision in Orient, he felt able to distinguish the precedent on the bases that in the case before him:1. The representor (Chang) was known to the representees

(Wan and the Bank) to be financially inexperienced;

2. The representees had financial expertise; and

3. The representees undertook pre-contractually to advise him in managing his new wealth.

Feature


His Honour added:25

I further find that even if the doctrine of contractual estoppel did operate in Singapore, that [sic] the precondition to its operation, viz, the clear intention for it to operate, has not been established on the evidence before me.

Justice Pillai, therefore, concluded that the Bank had assumed a duty of care towards Chang and that the duty was not negated or estopped by the estoppel doctrines.

He then proceeded to consider whether the Bank had breached its duty of care. In his view, the Banks duty to advise Chang comprised advising him on:1. preserving, growing and investing his US$118m;

2. appropriate asset allocation and investment strategies in the light of his investment objectives; and

3. the risks of the recommended investment products.

His Honour found that the Bank had breached its duty in all these aspects.

Comment on Negligence Issues

Justice Pillais rendition and application of the law of negligence accords with the current state of law and does not raise any major concern. Two comments, however, are in order here.

First, Pillai J endorsed Gloster Js view that the mere giving of advice is in itself insufficient to establish a duty of care. One wonders if such an approach is appropriate or desirable as it contrasts sharply with the philosophy behind the following injunction in the MAS Guidelines on Fair Dealing:26

A financial institution that provides execution only services must put in place appropriate systems, procedures and training to ensure that it does not provide advice to customers. If advice is in fact given to a customer notwithstanding the execution only model adopted by the financial institution, it will be deemed to be providing advice and will be subject to the provisions under the Financial Advisers Act.

(emphasis added)

Second, in considering the effect of the contractual clause on the duty of care, Justice Pillai remarked that [i]n any event, on these facts Chang is relying on a pre-contractual duty of care. The suggestion is that a contractual clause is ineffective where before the entering into a contract the defendant had assumed a duty of care towards the defendant. However, it is far from clear what the analytical justification for such a position might be.

Comment on Estoppel

The application of estoppel in the Deutsche Bank case is noteworthy, and for several reasons.

First, unlike many of the recent cases on non-reliance clauses, Deutsche Bank v Chang deals (primarily) with the application of estoppel in the context of a negligence claim rather than a misrepresentation claim.27 A few points should be noted here.

One, while such a scenario is novel, the application of the estoppel argument is just as tenable in the negligence scenario as it is in the misrepresentation scenario. Essentially, where a bank seeks, through the use of a non-reliance clause, to estop the client from alleging negligence, it is attempting to negate elements in the tort of negligence, especially duty of care and causation similar to the negating, in a misrepresentation claim, of the elements of false statement and inducement.28 Two, as Judges and Courts grapple with such application, the evolution of the law is likely to follow a course similar to that experienced in the misrepresentation context. More specifically, there is a need to address the contention that the non-reliance clause is in effect an attempt to exclude liability for negligence and, therefore, needs to satisfy the test of reasonableness of the Unfair Contract Terms Act.29 Three, it would eventually be realised that the substantive controls within estoppel by representation and reasonable exclusion are largely similar and the two routes of analysis probably lead to the same result.30

Second, the Deutsche Bank case is useful as an illustration of the correct use of the Lowe principle of estoppel by representation. What remains doubtful is the ambit of the second requirement that the representor (the client) intended the representee (the bank) to act upon the statement. Justice Pillai appears to imply that, as a minimum, the bank should inform the client of the purport of the clause. Note, however, that CJ Chans words without truly understanding their potential legal effect go further. It may be that the second requirement of Lowe is not satisfied unless the client understood the legal effect of the clause, but this awaits further judicial deliberation and decision.31

Third, it appears that contractual estoppel, as Justice Pillai sees it, also has the requirement that the statement was intended to be acted upon, which is the second requirement of Lowe. If so, then this is a new requirement and is a departure from English law.

Finally, it is noted that Justice Pillai, in various parts of his judgment, dwelled upon the fact that Chang was an unsophisticated investor and that there was complete information asymmetry; in fact, he used this to distinguish the instant case from Titan Steel,32 Springwell and Orient.

Feature


Whilst this is a possible distinction to employ or retain, it does not address the deeper issues involved. This subject was brilliantly analysed by Christopher Clarke J in Raiffeisen Zentralbank Osterreich v Royal Bank of Scotland33 where the honourable Judge emphasised the criticality of awareness and assent. As the writer has commented elsewhere:34

The basis for upholding or striking down a contract clause is not so much whether the parties are commercial or non-commercial, sophisticated or unsophisticated, of equal or unequal bargaining power, important though these aspects may be, but rather that the clause was one which both parties were aware of and freely agreed to.

It is hoped that such a position would be explored and adopted by Singapore Courts.

Justice on the Facts, Passing Thoughts

Considering the broad factual matrix and the specific circumstances of the case, the actual result in Deutsche Bank is probably fair. The conduct of Wan, the Banks representative is certainly reprehensible; in fact, a case for fraud might even be made out against him. So far as Chang is concerned, the evidence points to him being largely an innocent victim.

However, as one reflects on the matter of fault, one becomes less confident. One wonders if and the extent to which there had been greed and/or complicity on Changs part, either initially or as events unfolded. If so, then there are difficult questions of causation, consent and contributory negligence and their impact on Changs claim, either wholly or partly.

Concluding Remarks

The Deutsche Bank decision is to be welcomed. It dealt with difficult and novel issues and the learned Judge is to be commended for his handling of these captious issues. However, so far as the evolving Singapore law on the subject is concerned, there is more that needs to be resolved as one aspires towards a highly robust and well-reasoned legal framework one which is able to discern and distinguish deserving and undeserving cases, and avoid focusing on features which may not be the sufficient or appropriate litmus tests (such as whether the parties are commercial or non-commercial, sophisticated or unsophisticated and of equal or unequal bargaining power). More narrowly, within the factual matrix of the Deutsche Bank case, the law needs to be able, and for the right reasons, to conclude that an investor may have a remedy notwithstanding that he signed a contract with clauses that appear to take away his rights, and that a wrong is a wrong, even if done to a party with substantial financial means.

* In writing this case comment, I benefitted from a discussion with Nicholas Liu. Deficiencies and errors are mine alone.

Notes

1 [2012] SGHC 248. The Bank has filed an appeal.

2 See [92] of judgment.

3 At [98].

4 At [101].

5 At [106].

6 At [110].

7 [2009] 3 SLR(R)109 at [110].

8 MCG-G01, issued on 1 July 2005. These Guidelines were amended on 17 January 2012 and replaced by new Guidelines FSG-G01, issued on 7 August 2012; the current wording is similar except that there is the inclusion of the interests of stakeholders.

9 At [116]-[117]. He also noted, at [119], whilst an incremental approach was taken, the absence of an analogous precedent need not bar a finding of duty.

10 Spandeck Engineering v DSTA [2007] 4 SLR(R)100.

11 [2008] EWHC 1186.

12 At [121].

13 [1995] 2 AC 145.

14 [2010] 4 SLR 916.

15 At [128].

16 See [33] and [37] of judgment.

17 See [50] of judgment.

18 [1960] 1 WLR 196.

19 [2006] EWCA Civ 386.

20 [2010] EWCA Civ 1221.

21 [2007] 3 SLR(R) 566 at [50].

22 [2012] SGCA 43.

23 At [29].

24 At [137].

25 At [138].

26 Para 3.3.2 of the Guidelines, FAA-G11, issued on 3 April 2009.

27 This scenario was in fact envisaged by the Court of Appeal in Orient.

28 Estoppel can also apply, though