Lee Kuan Yew v Tang Liang Hong and...

[1999] 1 SLR(R) SINGAPORE LAW REPORTS (REISSUE) 533

Lee Kuan Yew v

Tang Liang Hong and another

[1999] SGHC 50

High Court — Suit No 2523 of 1996G P Selvam J9–11 November 1998; 26 February 1999

Civil Procedure — Injunctions — Order for inquiry as to damages — Permissible iffinancial loss can be proven

Family Law — Advancement — Presumption — Whether presumption applicable —Factors in ascertaining beneficial interests of parties to marriage

Facts

The plaintiff, Lee Kuan Yew (“LKY”), had filed a defamation suit against Tang.Tang had left Singapore. Believing that he would not return and would take stepsto dissipate or conceal his assets, LKY obtained a worldwide Mareva injunctionagainst him and his wife, Teo. The significant asset in Singapore was a propertyregistered in Teo’s name and was subject to a mortgage in Oversea-ChineseBanking Corp Ltd’s (“OCBC”) favour. The property market plummeteddrastically. There was no equity to answer a writ of execution and the Marevaorder could not fulfil its purpose. LKY, as a gesture of compassion, released allthe properties in Teo’s name. Teo, being dissatisfied, claimed general damageson the ground that the Mareva order was obtained against her without warrantbecause her addition as second defendant was a misjoinder since Tang had nobeneficial interest in the property.

Held, dismissing the application:

(1) Where assets in which the defendant was alleged to have an equitableinterest were in the name of a person related or beholden to the defendant, itwould be just and proper to join that person as a defendant. On the facts, LKYhad an unassailable right to target any equitable interest Tang had in propertiesin Teo’s name: at [14] and [17].

(2) The presumption of advancement was a moribund doctrine as regardsproperty acquired during marriage. In determining the beneficial interests of theparties to a marriage, the best resort was to ascertain their common intention byan objective exercise having regard to the local conditions and traditions andtheir legitimate expectations. On the facts, Teo never worked after marriage.Tang was the provider of funds for the property which was purchased as aninvestment. Teo acquiesced in Tang’s conduct and declarations that Tang had abeneficial interest in the property with a right of disposal: at [21], [24] and [25].

(3) Though the extension of the Mareva injunction against Teo was justified,it was too wide in enveloping everything Teo owned. However, Teo was not inany way deprived of the use of her personal effects and suffered no financial loss:at [26], [27] and [29].

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534 SINGAPORE LAW REPORTS (REISSUE) [1999] 1 SLR(R)

(4) An order for an inquiry as to damages could not be made when aninjunction was dissolved unless financial loss was proved or obvious. Teosuffered no financial loss: at [33].

Case(s) referred toAddis v Gramophone Co Ltd [1909] AC 488 (folld)Bliss v South East Thames Regional Health Authority [1987] ICR 701 (folld)Falconer v Falconer [1970] 1 WLR 1333; [1970] 3 All ER 449 (folld)F Hoffman-La Roche & Co AG v Secretary of State for Trade and Industry [1975]

AC 295 (folld)Gissing v Gissing [1971] AC 886 (refd)Griffith v Blake (1884) 27 Ch D 474 (folld)Levermore v Levermore [1979] 1 WLR 1277; [1980] 1 All ER 1 (refd)McGrath v Wallis [1995] 2 FLR 114 (folld)Neo Tai Kim v Foo Stie Wah [1985–1986] SLR(R) 48 (folld)Stevens v Hutchinson [1953] Ch 299 (refd)Tang Liang Hong v Lee Kuan Yew [1997] 3 SLR(R) 576; [1998] 1 SLR 97 (refd)TSB Private Bank International SA v Chabra [1992] 1 WLR 231; [1992] 2 All ER

245 (refd)Vieweger Construction Co Ltd v Rush & Tompkins Construction Ltd (1965)

48 DLR (2d) 509 (folld)

Davinder Singh SC and Hri Kumar (Drew and Napier) for the plaintiff; Daniel John and Michelle Jeganathan (John, Tan & Chan) for the second defendant.

[Editorial note: The appeal to this decision in Civil Appeal No 303 of 1998 wasdismissed by the Court of Appeal on 16 September 1999. See [1999] 3 SLR(R) 410.]

26 February 1999

G P Selvam J:

Prelude

1 In this case the matter for decision is an application by the seconddefendant, Madam Teo Siew Har, to discharge a worldwide Mareva orderobtained by the plaintiff against her and her husband Mr Tang Liang Hong,the first defendant.

2 The decision in this case will serve as a pilot case for 11 other caseswhere similar Mareva orders had been made. The plaintiff in this case wasthe first Prime Minister of Singapore and presently is the Senior Minister inthe Prime Minister’s Office. The first defendant, an advocate and solicitorof the Supreme Court of Singapore, was an unsuccessful oppositionWorker’s Party candidate in the last parliamentary election. The main issuein these proceedings was whether the Mareva order was properly extended


[1999] 1 SLR(R) Lee Kuan Yew v Tang Liang Hong 535

against Madam Teo. I have determined that issue in the affirmative infavour of the plaintiff and shall now reason out my decision.

Background facts

3 The proceedings arose out of 12 defamation actions (“the 12 actions”)instituted by the plaintiff and other leaders of the ruling People’s ActionParty (“the PAP leaders”) against Mr Tang in January 1997 in respect ofstatements made by Mr Tang antecedent to general election held on2 January 1997.

4 After the actions were commenced Mr Tang left Singapore on4 January 1997. He has not returned since.

5 The PAP leaders believed that Mr Tang would not return toSingapore and was taking steps to dissipate or conceal his assets.Accordingly on 27 January 1997 they applied:

(a) to add Madam Teo as second defendant in the 12 actions; and

(b) for a Mareva order against both defendants.

6 Lai Kew Chai J heard the ex parte application and granted a Marevaorder against both defendants. The material parts of the order were asfollows:

Disposal of assets

1(1) The defendants must not (i) remove from Singapore any of theirassets which are in Singapore whether in their own name or not andwhether solely or jointly owned up to the value of S$11,200,000.00 or(ii) in any way dispose of or deal with or diminish the value of any oftheir assets whether they are in or outside Singapore whether in theirown name or not and whether solely or jointly owned up to the samevalue. Without prejudice to the generality of the above, this prohibitionincludes the following assets:

(a) the property known as no 75 Hua Guan AvenueSingapore 589171 or the net sale money after payment of anymortgages if it has been sold; and

(b) the property and assets (and proceeds of sale thereof) ofthe first defendant’s practice known as M/s Tang & Co.

(2) If the total unincumbered value of the defendants’ assets inSingapore exceeds S$11,200,000.00, the defendants may remove any ofthose assets from Singapore or may dispose of or deal with them solong as the total unincumbered value of their assets still in Singaporeremains about S$11,200,000.00. If the total unincumbered value of thedefendants’ assets in Singapore does not exceed S$11,200,000.00, thedefendants must not remove any of those assets from Singapore andmust not dispose of or deal with any of them, but if they have otherassets outside Singapore the defendants may dispose of or deal with



those assets so long as the total unincumbered value of all their assetswhether in or outside Singapore remains above S$11,200,000.00.

Disclosure of information

2(1) The defendants must inform the plaintiff in writing at once of alltheir assets in Singapore whether in or outside Singapore and whetherin their own name or not and whether solely or jointly owned, givingthe value, location and details of all such assets.

(2) The information must be confirmed in an affidavit which mustbe served on the plaintiff’s solicitors within 5 days after this order hasbeen served on the defendants.

Exceptions to this order

(1) This order does not prohibit the defendants from spendingS$2,000.00 a week towards their ordinary living expenses and also areasonable sum on legal advice and representation. But beforespending any money the defendants must tell the plaintiff’s solicitorswhere the money is to come from.

(2) This order does not prohibit the defendants from dealing with ordisposing of any of their assets in the ordinary and proper course ofbusiness. The defendants shall account to the plaintiff bi-weekly for theamount of money spent in this regard.

(3) The defendants may agree with the plaintiff’s solicitors that theabove spending limits should be increased or that this order should bevaried in any other respect but any such agreement must be in writing.

Effect of this order

(1) A defendant which is an individual who is ordered not to dosomething must not do it himself or in any other way. He must not doit through others acting on his behalf or on his instructions or with hisencouragement.

(2) A defendant which is a corporation and which is ordered not todo something must not do it itself or by its directors, officers,employees or agents or in any other way.

7 On 17 February 1997 Madam Teo applied to discharge the Marevaorder but did not file any affidavit in support of the application. When itcame up for hearing her counsel applied to withdraw the application. In theevent, it was dismissed with costs.

8 The order was made in respect of assets in Singapore as well as outsideSingapore. It must, however, be remembered that it was merely an inpersonam order. Accordingly it did not effectively bite any assets outsideSingapore. That was made clear by a term in the order to that effect.

9 Even in Singapore the only significant asset which was captured bythe order was the immoveable property, 75 Hua Guan Avenue (“theproperty”), which was held in the sole name of Madam Teo.



10 By the time the application came up for hearing before me judgmentshad been entered against Mr Tang in the 12 actions and damages assessedat $3.63m all told and costs. All the judgments remain unsatisfied. Mr Tangwas made a bankrupt on 6 February 1998. At the time the Mareva order wasobtained the open market value of the property was about $5m. By the timethe application came up for hearing before me, due to the economic turmoilin Asia, the value of the property had plummeted drastically as did everyother property in Singapore. It also came to light that the property wassubject to a mortgage in favour of OCBC. In the result there was no equityto answer a writ of execution.

11 The Mareva order therefore could no longer substantially fulfil itspurpose. Further, although the plaintiffs could have pursued the matterfurther in respect of property in Malaysia, in view of the changedcircumstances, they decided against it. They asked me as a gesture ofcompassion to Madam Teo to release from the hold of the order all theproperties in her name. I did this without more ado. Madam Teo was notsatisfied with this and claimed general damages on the ground that theMareva order was obtained against her without warrant. I therefore gavefull and fair opportunity to her and her counsel to present her case. Afterconsidering all the evidence and submissions I dismissed the application. Ishall now give the reasons for my decision.

12 The ground on which she based her application was that her additionas second defendant was a misjoinder because Mr Tang had no beneficialinterest in the property or any other property in her name. That assertionwas postulated to depend on the equitable doctrine of presumption ofadvancement. In other words he purchased them for her sole benefit.

The joinder issue

13 Madam Teo argued that her joinder was improper as service on her ofan order made against Mr Tang would have sufficed. I cannot agree withthe contention. I shall explain why. When a Mareva injunction is granted itoften catches assets in the possession or name of innocent third partiesagainst whom no claim is asserted. In most cases it is a bank. In such cases itis unnecessary and improper to join the bank as an additional party to theproceedings. It is sufficient to give notice of the order to such parties whoordinarily would have no beneficial interest in the assets. They normallyabide by the order and do not assist the defendant to defeat the order. If theperson served with the injunction is prejudiced in any way by the order hecan intervene in the action and seek appropriate reliefs.

14 However, where assets, in which the defendant is alleged to have anequitable interest, are in the name of a person who in some way is related orbeholden to the defendant it would be just and proper to join that person asa defendant. The joinder would also be in the interests of the nominal

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owner of the asset as that nominal owner could come before the court as ofright without having to intervene. More importantly, the nominal owner,by reason of him being a party, will have the benefit of the plaintiff’scounter-indemnity, should the court eventually order an inquiry as todamages suffered by him. See TSB Private Bank International SA v Chabra[1992] 2 All ER 245; [1992] 1 WLR 231.

15 There is yet another reason for joining the nominal owner as anadditional defendant. There are various interests in property to which ajudgment debtor may be entitled, yet which cannot be taken in executionunder the usual form of execution. Equitable interests in property held inthe name of someone else is an example of proprietary interests which arenot amenable to legal execution. Appointment of a receiver by way ofequitable execution of equitable interests in property was conceived by theCourt of Chancery to reach such interest. Where necessary theappointment of a receiver was supplemented by an injunction restrainingthe judgment debtor from dealing with the property. See Levermore vLevermore [1980] 1 All ER 1; [1979] 1 WLR 1277 and Stevens v Hutchinson[1953] Ch 299.

16 Moreover, for the Mareva order to have the intended effect in respectof Mr Tang’s interest in immovable property, in the name of Madam Teo, itwas necessary to file a caveat against such property. The Registrar of Titleswill not readily accept or act on a Mareva order, affecting the rights of oneregistered owner of an immoveable property, if it is not manifest, on theface of the order, that it is binding on the registered owner. The addition ofthe registered owner as a defendant is the most convenient and properdevise of achieving that end.

17 The above statement of the law shows that the plaintiffs had anunassailable right to target any equitable interest Mr Tang had in propertiesin the name of Madam Teo. The real issue therefore was whether Mr Tanghad such an equitable interest.

18 I therefore hold without any hesitation that subject to the issue ofequitable interest the extension of the Mareva order against Madam Teowas amply justified.

The presumption of advancement issue

19 I now turn to the frontline argument of Madam Teo – that is whetherMr Tang had an equitable interest in the properties in the nominalownership of Madam Teo. It would be appropriate now to make certainobservations on the meaning and effect of the equitable doctrine ofpresumption of advancement. It is not a rule of substantive law but anevidentiary tool of adjectival law. It enables the court to make an inferenceas to the intention of a man when he makes a transfer of his property to hisdependant or pays for a property and takes it in the name of his dependant.



Dependant here means his child or wife. This case is concerned only withthe latter.

20 Stated in an ostensive form, the effect of the rule is this: Where ahusband purchases property or makes an investment in his wife’s name, animmediate gift is presumed in the absence of evidence of an intention to thecontrary. The rule at first was conceived and applied in the last centuryprimarily to protect the wife from the husband’s creditors. Later it became arule of general application. It was the legal construct of a bygone age whenthe fair sex was not given fair treatment in terms of material welfare. Theworld has changed since. So has the law.

21 Since the last world war the law has undergone radical changes inrespect of properties and in particular properties acquired during marriage.Today the husband needs as much protection as the wife. In the result, thepresumption of advancement is a moribund doctrine as regards propertyacquired during marriage. Its place in modern law is well illustrated byFalconer v Falconer [1970] 3 All ER 449; [1970] 1 WLR 1333, CA. The caseconcerned an application under s 17 of the Married Women’s PropertyAct 1882. The wife in that case acquired a plot of land in her own name. Sheraised two mortgages in her name. She and her husband were gainfullyemployed. The second mortgage was to finance the building of amatrimonial house on the plot. The husband stood surety and his fatherguaranteed the repayments. For two years the husband and the wife paidhalf each of the mortgage instalments and rates. The marriage wasdissolved. The wife wanted everything by invoking the presumption ofadvancement. The county court held that the land belonged to the wife andthe house was owned by the couple in equal shares. The wife appealedsaying that “the judge erred in not applying the presumption ofadvancement when all the relevant transactions were in the wife’s name”.The Court of Appeal rejected the appeal on the basis that, in proceedingsrelating to property disputes between spouses, the court pays little or noregard to the presumption of advancement. Lord Denning MR said at[1970] 3 All ER 449, 452; [1970] 1 WLR 1333, 1335–1336:

If this case had come up for decision 20 years ago, there wouldundoubtedly have been a presumption of advancement: because at thattime whenever a husband made financial contributions towards ahouse in his wife’s name, there was a presumption that he was makinga gift to her. That presumption found its place in the law in Victoriandays when a wife was utterly subordinate to her husband. It has noplace, or, at any rate, very little place, in our law today: See Pettitt vPettitt [1970] AC 777, per Lord Reid at p 793, per Lord Hodson atp 811 and per Lord Diplock at p 824. We have decided these cases nowfor some years without much regard to a presumption of advancement,and I think we should continue to do so.



22 In the same case Lord Denning MR referred to Gissing v Gissing[1971] AC 886, HL and said at [1970] 3 All ER 449, 452; [1970] 1 WLR1333, 1336:

(The House of Lords) stated the principles on which a matrimonialhome, which stands in the name of husband or wife alone, isnevertheless held to belong to them both jointly (in equal or unequalshares). It is done, not so much by virtue of an agreement, express orimplied, but rather by virtue of a trust which is imposed by law. The lawimputes to husband and wife an intention to create a trust, the one forthe other. It does so by way of an inference from their conduct and thesurrounding circumstances, even though the parties themselves madeno agreement upon it. This inference of a trust, the one for the other, isreadily drawn when each has made a financial contribution to thepurchase price or to the mortgage instalments. The financialcontribution may be direct, as where it is actually stated to be acontribution towards the price or the instalments. It my be indirect, aswhere both go out to work, and one pays the housekeeping and theother the mortgage instalments. It does not matter which way round itis. It does not matter who pays what. So long as there is a substantialfinancial contribution towards the family expenses, it raises theinference of a trust. But where it is insubstantial, no such inference canbe drawn: see the cases collected in the dissenting judgment ofEdmund Davies LJ in the Court of Appeal [1969] 2 Ch 85, 97, whichwas upheld by the House.

23 The doctrine of presumption of advancement as between marriedcouples has not been coffined but preserved in the arsenal of judicialremedies to be drawn when the modern rule of common intention isinapplicable. At present time, “in its application to houses acquired for jointoccupation, the equitable presumption of advancement has beenreclassified as a judicial instrument of last resort, its subordinate statuscomparable to that of the contra proferentem in the construction of deedsand contracts”. See McGrath v Wallis [1995] 2 FLR 114, CA at 115, perNourse LJ. It is human nature not to give up a possession readily. Judicialnature is no different.

The modern rule

24 Today, in determining the beneficial interests of the parties to amarriage the first and best resort is to ascertain the common intention ofthe parties by an objective exercise having regard to the local conditionsand traditions as well as the legitimate expectations of the parties. Exceptingexceptions, the result of this exercise would normally yield the conclusiveresult. The following extract from the speech of Lord Brightman in Neo TaiKim v Foo Stie Wah [1985–1986] SLR(R) 48, PC at [16] is a succinctexpression of how the modern rule operates in Singapore:



In the opinion of their Lordships the presumption of advancement isnot an immutable rule to be applied blindly where there is no directevidence as to the common intention of the spouses. It is rather aguideline to be followed by the court in an appropriate case when itsearches for the intention which ought, in the absence of evidence, tobe imputed to the parties. It is proper for the trial judge to review thebackground of the case and to decide in appropriate circumstances thatthe guideline is not one which can sensibly be followed in the casebefore him. In the instant case the trial judge had to consider the affairsof a Chinese family and the legal effect of the purchase of a number ofhouses out of the funds of businesses in which they were equalpartners. The trial judge, with his knowledge of local conditions,considered it inappropriate to apply the presumption of advancementto such a case, and so did the Court of Appeal. The view taken by thetrial judge and the Court of Appeal in Singapore as to what isappropriate to a case concerning the local Chinese community oughtnot to be disturbed by their Lordships. Their Lordships thereforeaccept, as correct, the opinion of the trial judge and of the Court ofAppeal that the circumstances of the present case were not appropriatefor the application of the presumption of advancement so as to vest theentire beneficial interest in the five properties in the wife.

25 Applying the above principles I was compelled to find that Mr Tanghad an equitable interest in the property in the name of Madam Teo. Thisproperty was purchased as an investment. Another property which had alsobeen purchased earlier in the name of the wife had to be sold to finance thepurchase of this property. The wife never worked after the marriage. Thehusband, who was a legal practitioner, was the provider of the funds. Itappeared that he purchased the property in the name of his wife so that inthe event of an unforeseen event it would be beyond the reach of hiscreditors. In saying that I am not suggesting that he had a fraudulentintention. But I do say that he did not wish to run the risk. It isinconceivable that the property which was intended to be an investmentwas given to the wife absolutely leaving him at the mercy and sympathy ofhis wife. All demonstrations suggested that it was intended for theimmediate and ultimate benefit of both and occupation by the entire family.The husband and wife at all times declared by their conduct that he had abeneficial interest in the property with a right of disposal. The wife not onlynever protested but also acquiesced in his conduct and declarations. Theconduct of both as established by objective evidence confirmed that thebeneficial in the property belonged to both.

26 At this juncture I should advert to an event in June 1996. In its issue of2 June 1996, Yazhon Zhoukon, a Hong Kong newspaper, published aninterview of Mr Tang. That interview was given in the hope of daunting thepresent plaintiff. The interview must have taken place shortly before thatdate. The following day there was an egregious act on the part of Mr Tang.He transferred to his bank account in Johore Bahru a substantial sum of



money from the bank account of Madam Teo with OCBC. It was alreadyoverdrawn. The withdrawal on 3 June 1996 virtually exhausted theoverdraft facility. He retained the power of disposal. The overdraft wassecured by the property. Madam Teo when giving evidence said she had noknowledge of the withdrawal and transfer. After the transfer the accountwas $3,090,637.41 in debit. The overdraft limit at that point in time was$3.2m. Why did he do this? In the absence of an explanation by Madam Teothe answer is obvious. What he had said in the interview troubledMr Tang’s conscience. His unconscious cerebration told him to expect adefamation action on account of the interview. It also advised him to emptyhis account before he was mulcted with damages as it subsequentlyhappened. See Suit No 172 of 1996 and Tang Liang Hong v Lee Kuan Yew[1997] 3 SLR(R) 576. It was a clear piece of evidence of a devious mind. Butwhat is of immediate relevance to this case is the control he had over thebank account. In name it was hers. In reality it was his. It at once sustainedthe plaintiff’s contention that the assets in Madam Teo’s name at leastpartly belonged to Mr Tang and his propensity to put away his assets fromthe arm of the law. I therefore conclude with moral certainty that Mr Tanghad a substantial interest in the property nominally owned by Madam Teo.The frontline argument of Madam Teo, therefore, falls to the ground. Theextension of the Mareva order against her was amply justified.

27 Nonetheless the Mareva order was too wide in enveloping everythingMadam Teo owned. The trammel was too wide for its purpose as it impliedthat Mr Tang had an equitable interest in everything that was in thepossession and ownership of Madam Teo, however, trivial and personal itwas to her. Common sense says that that cannot be right. Counsel for theplaintiff readily conceded the point. I therefore hold that the order shouldhave expressly excluded the personal effects, ornaments and clothing. Itappeared to have been a technical oversight of lawyers. In the heat of themoment they followed Mareva order precedents used in commercial caseswithout making the appropriate modifications. As it happened, however,Madam Teo was not in any way deprived the use of those effects. Shenevertheless sought damages at large on account of this technical glitch.The question then arises as to whether an inquiry as to damages on theplaintiff’s counter undertaking to pay damages should be directed.

The damages issue

28 Except where special circumstances dictate otherwise, an order fordamages would be made as a matter of course when the injunction is shownto have been wrongly obtained. See Griffith v Blake (1884) 27 Ch D 474,Vieweger Construction Co Ltd v Rush & Tompkins Construction Ltd (1965)48 DLR (2d) 509. A defendant asking that there be an inquiry as todamages, however, must make out a prima facie case that he has suffereddamages. “Damages” in this context means not general damages or



damages at large as would be awarded in tort cases but special damages aswould be awarded in contract cases. In short it means calculable financialloss. The principle was stated by Lord Diplock in F Hoffman-La Roche & CoAG v Secretary of State for Trade and Industry [1975] AC 295, HL at 361:

It is assessed on an inquiry into damages at which principles to beapplied are fixed and clear. The assessment is made upon the samebasis as that upon which damages for breach of contract would beassessed if the undertaking had been a contract between the plaintiffand the defendant that the plaintiff would not prevent the defendantfrom doing that which he was restrained from doing by the terms ofthe injunction.

29 Counsel for Madam Teo at first readily conceded that his client hadnot suffered any financial loss but asked for general damages for the mentaltorture and torment she allegedly had suffered. When he was made aware ofthe principle enunciated by Lord Diplock he called it a monstrous principleand added that his client would appeal to the Court of Appeal to set rightthe law. Next, as a second string to his bow, he submitted that even on acontractual basis the court has the power to award general damages. I couldnot accept his contentions and I shall now explain why.

No damages for mental stress of litigation

30 The reasons are based on historical and policy grounds. Damages,namely a monetary judgment, is a common law remedy. Injunction is anequitable relief. A court of equity in granting damages when an injunctionis dissolved resorts to the common law remedy of damages. Since equityfollows the law it could only award damages on common law basis. At lawthe general rule is that in contract cases only special damages are awarded.Special damages must be pleaded and proved. In tort damages are at large.That is to say, damages are estimated without proof.

31 In respect of judicial proceedings common law recognised the tort ofmalicious prosecution which is based on wrongful motive. To constitutemalicious prosecution, malice and absence of reasonable cause must unite.For this reason a successful plaintiff in the usual case cannot recover fromthe defendant damages in addition to costs for any mental torment andtorture he might have suffered in having resorting to legal process. Thedefendant who is subjected to legal process can be in no better position thanthe plaintiff. the same reasoning applies to the cross undertaking as todamages and that is the policy of the law.

32 Next, exceptions excepted, it is settled law that where damages fall tobe assessed for breach of contract, rather than tort, it is not permissible toaward general damages for frustration, mental distress, injured feelings orannoyance occasioned by breach of contract. See Addis v Gramophone CoLtd [1909] AC 488, HL and Bliss v South East Thames Regional Health



Authority [1987] ICR 701. In Addis Lord Atkinson at 495 gave the reasonwhy the House of Lords was unwilling to extend the exceptions:

There are three well-known exceptions to the general rule applicable tothe measure of damages for breach of contract, namely, actions againsta banker for refusing to pay a customer’s cheque when he has in hishands funds of the customer’s to meet it, actions for breach of promiseof marriage, and actions like that in Flureau v Thornhill, where thevendor of real estate, without any fault on his part, fails to make title. Iknow of none other.

The peculiar nature of the first two of these exceptions justified theirexistence. Ancient practice upholds the last, though it has often beenadversely criticized, as in Bain v Fothergill. If there be a tendency tocreate a fourth exception it ought, in my view, to be checked ratherthan stimulated; inasmuch as to apply in their entirety the principleson which damages are measured in tort to cases of damages forbreaches of contract would lead to confusion and uncertainty incommercial affairs, while to apply them only in part and in particularcases would create anomalies, lead occasionally to injustice, and makethe law a still more ‘lawless science’ that it is said to be.

33 I am mindful of the fact that in some recent cases damages for painsuffering and mental suffering or mental distress have been awarded inactions for breach of contract. These heads of damages usually belong to therealm of tort. In those cases where damages were awarded for them in acontract claim, tortious negligence overlapped contractual negligence. Thecourts awarded general damages because the party cannot bring a separateaction to recover damages for tortious negligence. Where tort and contractclaims merged and the principal claim was for breach of contract, generaldamages were awarded for mental distress as an ancillary relief to damagesfor breach of contract. Setting aside a Mareva order belongs to an entirelydifferent regime. An order for an inquiry as to damages, therefore, cannotbe made when an injunction is dissolved unless financial loss is proved orobvious. In this case admittedly there was none.

34 In the result, Madam Teo’s prayer for inquiry as to damages isdisallowed because:

(a) The Mareva order was properly obtained against her.

(b) In any event, Madam Teo on the facts was not prevented fromselling the property before its value fell. The truth of the matter wasthat she postponed action in the expectation that value wouldescalate. An order for sale could have been obtained if she and herlawyers had applied their mind to it properly.

(c) As regards the order catching Madam Teo’s personal effects shesuffered no loss or inconvenience and in any case it has no legal basis.



35 The plaintiffs, again as a gesture of compassion to Madam Teo, didnot ask for costs. Accordingly no order for costs was made.

Headnoted by Agnes Tan Suan Ping.



Tan Poh Leng Stanley v

Tang Boon Jek Jeffrey

[2000] SGHC 260

High Court — Originating Motion No 14 of 2000G P Selvam J26, 29 June; 27 July; 30 November 2000

Arbitration — Arbitral tribunal — Arbitrator — Powers of arbitrator — Whetherarbitration had power to recall and reverse previous final award — Whether courtcould remit null award to arbitrator — International Arbitration Act (Cap 143A,1995 Rev Ed) — Article 34(4) UNCITRAL Model Law on International CommercialArbitration

Arbitration — Award — Recourse against award — Setting aside — Time limit formaking application — Whether application made out of time — Articles 16 and 34UNCITRAL Model Law on International Commercial Arbitration

Facts

The arbitrator made a final award dismissing the claim and counterclaim. Afterthe respondent made a request for a fresh hearing, the arbitrator held a furtherhearing and made another award on 6 March (“the March award”), in which hereversed his earlier decision and allowed the counterclaim. The applicant filedthe present motion to set aside the March award made by the arbitrator. Theissue was whether the arbitrator had the power to recall and reverse a final awardhe had made. As a preliminary issue, the respondent contended that theapplication to set aside was filed out of time.

Held, allowing the application:

(1) The argument that the application to set aside was out of time wasrejected. The time limit of 30 days stipulated in Art 16 of the UNCITRAL ModelLaw of International Commercial Arbitration (“the Model Law”) applied onlywhen there was a preliminary decision by the arbitrator on the issue ofjurisdiction, which was not the case here. The applicable time limit in thepresent case was three months from the receipt of the award, as stipulated inArt 34 of the Model Law: at [13] and [15].

(2) The doctrine of functus officio was expressed in Art 32 of the Model Law.There was nothing in the Model Law which authorised the arbitrator to recall orreconsider his award after he had made his final award and his mandate wasthereby terminated: at [24] and [28].

(3) Thus, the March award was made by the arbitrator outside his mandateand was a nullity. The arbitrator had become functus officio and he had no powerto recall and reverse the award. More importantly, he had no power to createthat power when it was not contained in the International Arbitration Act(Cap 143A, 1995 Rev Ed) or the Model Law. The absence of the power was

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deliberate and was founded on the principle of finality and public policy to bringan early end to commercial disputes: at [32] and [34].

(4) The court could not invoke Art 34(4) of the Model Law to suspend thesetting aside proceedings and remit the award to the arbitrator. Article 34(4)could only be invoked when there were irregularities in the award and not whenthe award was a nullity. Furthermore, the power to remit did not apply to anaward made after the arbitrator had become functus officio: at [36].

Case(s) referred toFidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 (refd)Montan, The [1984] 1 Lloyd’s Rep 389 (refd)

Legislation referred toInternational Arbitration Act (Cap 143A, 1995 Rev Ed) s 12, First Schedule

Arts 16, 32, 33, 34Arbitration Act 1950 (c 27) (UK) s 17Arbitration Act 1979 (c 42) (UK)

Philip Jeyaretnam (Helen Yeo & Partners) for the applicant; Alvin Yeo, Tan Kay Kheng and Emily Yeow (Wong Partnership) for the respondent.

[Editorial note: The appeal to this decision in Civil Appeal No 107 of 2000 wasallowed by the Court of Appeal on 22 June 2001. See [2001] 2 SLR(R) 273.]

30 November 2000

G P Selvam J:

The final award

1 The question for determination in this case is whether an arbitratorhas the power to revisit and reverse a final award he made disallowing aclaim. The chain of events that brought the parties before me are as follows.

2 On 10 January 2000 the arbitrator made a final award. I shall call it“the January award”. It ended with four lines of conclusion:

I find hold award and adjudge as follows:

1 The claimants’ claim be dismissed.

2 The respondents’ counterclaim be dismissed.

3 The award is final save as to costs.

[emphasis added]

Those lines of conclusion were at the end of a 37-page award. It contained atwo-page introduction and a body of 136 paragraphs. He gave it this title:Arbitrator’s Award (Arbitration 2). There was an earlier award which doesnot concern me.


[2000] 3 SLR(R) Tan Poh Leng Stanley v Tang Boon Jek Jeffrey 849

3 Seven days later, on 17 January 2000, the arbitrator added somethingto the award mentioned above. He gave it this title “Additional Award(Arbitration 2)”. I shall call this “the clarification award”. Paragraph 10made this clarification:

For the avoidance of any doubt, with regard to the issue of theUS$2.6m deposit (of which a sum of A$1,375,762.64 is an item of therespondents’ counterclaim being the amount in excess overA$3,000,000 pursuant to cl 2(A)2(b) of the SA), I agree with theclaimants that cl 2(A)2(b) of the SA must be read literally as applyingto the case where DA instructs ANZ Bank (Hong Kong) to transfercash deposits in United States Dollars deposited by DA with ANZBank (Hong Kong) to Dynasty Pacific Group Pty Ltd (‘DPG Pty Ltd’).Here the respondents admit in para 111 of the respondents’ closingwritten submissions that it was STA who procured the appropriationof this deposit in partial satisfaction of DPG Pty Ltd’s liability. Thisapproach is not inconsistent with the literal approach adopted by me inArbitration 1 in dealing with cl 2(C) of the SA. I reiterate the generalposition that I have taken in my awards in Arbitration 1 andArbitration 2, which is, that if a claim falls foul of the wording of theSA, that claim cannot be allowed. This item of counterclaim has beendismissed in my award of 10 January 2000.

4 The clarification award contained the arbitrator’s decision on anothermatter which he had omitted. I am not concerned with it either.

5 The matter did not end there. On 31 January 2000 the arbitrator at therequest of the respondent before me had a fresh hearing with counsel forthe parties concerned. The parties before me are Stanley Tan Poh Leng, oneof the seven claimants before the arbitrator and Jeffrey Tang Book Jek, oneof the two respondents before the arbitrator. The other parties were notconcerned with the matter at issue. At the fresh hearing Jeffrey Tangwanted the arbitrator to make a reversal of the January award which thearbitrator said was a final award. Counsel for Stanley Tan objected to thearbitrator revisiting the decision by dismissing Jeffrey Tang’s claim. StanleyTan’s contention was that the arbitrator had completed and terminated thehearing by making a final award. He was functus officio. He had exhaustedhis mandate. Accordingly it was outside the arbitration agreement whichconferred the arbitration power on the arbitrator. All the same thearbitrator went ahead with the hearing. On 6 March 2000 he made anotheraward. He called it “Additional Award II”. I shall call it the “March Award”.By this award the arbitrator made a volte face and made this award:

I find hold award and adjudge that the claimants pay the respondentsthe sum of A$1,375,762.64 together with interest at the rate of 6% perannum from the date of the award dated 10 January 2000 to the date ofpayment.

6 The March award included matters which do not concern me. StanleyTan on 29 April 2000 filed the notice of Originating Motion No 14 of 2000



which is before me. By that notice of motion Stanley Tan asked for thefollowing principal order:

That paras 19 to 34 of Additional Award II (Arbitration 2) delivered on6 March 2000 by the arbitrator in an arbitration between the applicantand the respondent pursuant to an arbitration agreement contained ina settlement agreement dated 24 January 1998 and a supplementalagreement contained in or evidenced by an exchange of letters betweenthe respective parties’ solicitors dated 6 April 1999 be set aside.

Preliminary point on procedure

7 Before I consider the merits of the motion there is a preliminaryprocedural matter to decide. This was a contention on behalf of JeffreyTang that the motion was filed out of time. It was contended for JeffreyTang that it should have been made within 30 days.

8 To understand this procedural and the substantive issue it isnecessary to take in the relevant provisions of the International ArbitrationAct (Cap 143A). I shall call it “the Act”.

9 The Act provides a code for the conduct of international commercialarbitrations based on the Model Law on International CommercialArbitration. The Model Law was adopted by the United NationsCommission on International Trade Law and Conciliatory Proceedings.

10 The Act defines “Model Law” as follows:

The UNCITRAL Model Law on International Commercial Arbitrationadopted by the United Nations Commission on International TradeLaw on 21st June 1985, the text in English of which is set out in theFirst Schedule.

11 The Model Law deals with the constitution and powers of the arbitraltribunal and regulates the process of arbitration. It is not a complete body oflaw. Provisions in the Act complement the powers of the arbitrationtribunal. They also empower the High Court to stay court proceedings, setaside an award made in the purported jurisdiction of the arbitrationtribunal and for applications to the High Court.

12 The preliminary point calls for a consideration of Art 16 of the ModelLaw. It reads as follows:

Article 16: Competence of arbitral tribunal to rule on its jurisdiction.

(1) The arbitral tribunal may rule on its own jurisdiction, includingany objections with respect to the existence or validity of thearbitration agreement. For that purpose, an arbitration clause whichforms part of a contract shall be treated as an agreement independentof the other terms of the contract. A decision by the arbitral tribunalthat the contract is null and void shall not entail ipso jure the invalidityof the arbitration clause.



(2) A plea that the arbitral tribunal does not have jurisdiction shallbe raised not later than the submission of the statement of defence. Aparty is not precluded from raising such a plea by the fact that he hasappointed, or participated in the appointment of, an arbitrator. A pleathat the arbitral tribunal is exceeding the scope of its authority shall beraised as soon as the matter alleged to be beyond the scope of itsauthority is raised during the arbitral proceedings. The arbitraltribunal may, in either case, admit a later plea if it considers the delayjustified.

(3) The arbitral tribunal may rule on a plea referred to in paragraph(2) of this Article either as a preliminary question or in an award on themerits. If the arbitral tribunal rules as a preliminary question that it hasjurisdiction, any party may request, within thirty days after havingreceived notice of that ruling, the court specified in Article 6 to decidethe matter, which decision shall be subject to no appeal; while such arequest is pending, the arbitral tribunal may continue the arbitralproceedings and make an award.

13 On a plain reading of Art 16, the stipulation of 30 days for appealingto the High Court on the issue of jurisdiction applies only when the arbitraltribunal rules as a preliminary question that it has jurisdiction.Furthermore, the tribunal cannot be compelled to make a preliminaryruling on the jurisdiction issue. Additionally, the right to request the HighCourt for a decision on the preliminary decision is an option. This isindicated by the words “may request”. It does not bar a challenge by anapplication to set aside the award on the ground of lack of jurisdiction.

14 In this case, there was no preliminary decision by the arbitrator on theissue of jurisdiction. Additionally, Art 16 applies to a challenge to thejurisdiction of the tribunal at the commencement of the arbitralproceedings and not at or after the conclusion stage of the arbitralproceedings. This is indicated by the stipulation that the plea “shall beraised not later than the submission of the statement of defence”.

15 The time limit that applies to this case is stipulated in Art 34 of theModel Law. It is three months from the receipt of the award. This applieswhen the arbitrator’s ruling on jurisdiction is included in the award.

16 For the reasons set out above, Jeffrey Tang’s plea that the applicationto set aside was incorrect and out of time, fails. I, therefore, turn to thesubstantive points.

The law of functus officio

17 The doctrine of functus officio owes its origin to a wider principleexpressed in the Latin maxim: Nemo debet bis vexari pro eadem causa (Noman should be twice troubled). The purpose of the principle is finality todispute resolution. When applied to litigation and arbitration, this principlemay take the form of res judicata, issue estoppel and functus officio. Finality



may also be reached by the operation of the doctrine of merger and thedoctrine of extinction of a cause of action.

18 The meaning and effect of what has been said crystallise into theprinciple that: Once a matter is finally adjudicated or arbitrated no partybound by it is permitted to reopen it. The court or the arbitrator becomesfunctus officio. They have exhausted their jurisdiction or mandate as thecase may be. A decision in favour of the claimant merges the claim into ajudgment or arbitral award. If the claim is disallowed the cause of action isextinguished. There is nothing to adjudicate or arbitrate. The doctrine offunctus officio is analogous to the effect of the statute of limitation whichextinguishes the claim. Under the regime of the Act and the Model Law theoriginal cause of action and the arbitrator have no life after the release of thefinal award.

19 The doctrine of functus officio is expressed lucidly in Russell OnArbitration (21st Ed, 1997) para 5–235:

Proceedings will close after the oral hearings have finished and anypost-hearing submissions have been made. Thereafter the tribunalmakes its award. Once a final award is made, the tribunal becomesfunctus officio. This means that its authority to act ceases, the referenceterminates and the award cannot thereafter be amended.

20 There are statutory exceptions in Arbitration Acts to the basic rulethat once the tribunal has made its final award it becomes functus officioand cannot subsequently amend the award. Section 17 of the EnglishArbitration Act 1950 for instance conferred the power on the arbitrator tocorrect in an award any clerical mistake or error arising from any accidentalslip or omission.

21 The fact that this is an exception created by statute emphaticallyaffirms the basic rule that the arbitrator has no power to reconsider or makea reversal of the substantive award even if it is perceived to be in error. Anyattempt on the part of the arbitrator to confer upon himself such powerwould be utterly without authority and against the policy, purpose andscope of the Arbitration Acts. The principle and logic are stated in theeloquent words of Spencer Bower, Turner and Handley’s The Doctrine ofRes Judicata (3rd Ed, 1996) at para 128:

Where the arbitral tribunal is shown to have acted within, or is notshown to have acted in excess of, its jurisdiction, and the otherconditions of a valid res judicata are established, the award binds theparties and cannot be impeached for error of law or fact. Jurisdiction,for this purpose, does not mean jurisdiction to give a correct decisiononly. At common law if error in law appeared on the face of the award,or in any memorandum intended to form part of it, it might be setaside, or remitted on the motion of the party aggrieved, except where aspecific question of law was submitted, or the tribunal had authority toadjudicate upon a debt of honour, or other matter not cognisable by



the courts of law. This jurisdiction was abolished by section 1(1) of theArbitration Act 1979. The award may be remitted to enable thearbitrator to rectify any mistake of fact apparent on its face, or to whichthe arbitrator calls attention, and an arbitrator or umpire now hasstatutory authority ‘to correct any clerical mistake, or error arisingfrom any accidental slip or omission’. The existence of these powersshows that, unless and until they are exercised, the award, howeverwrong in law, or mistaken in fact, operates as a res judicata.

22 In the case of The Montan [1984] 1 Lloyd’s Rep 389 at 394,Hobhouse J pointed up the point of principle that the power to correct aclerical error must not be converted into a power to reconsider and reversethe substantive decision:

It is an exception to the rule that the award as published is final and thearbitrator having made his award is functus officio. This rule is one offundamental importance. Arbitrators cannot be allowed to havesecond thoughts or to change their minds after making their awards.Such a reconsideration by the arbitrator can only occur if the court hasremitted the award to him under the Arbitration Acts. There are verystrong reasons of policy which underly this. There must be an end toan arbitration, as to litigation. The exception which s 17 allows is verylimited. It in no way allows any change of mind by the arbitrator, nordoes it allow the arbitrator to correct mistakes of reasoning or ofevaluation or assessment or even of expression.

23 Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 isauthority for the proposition that once the arbitrator has made a formalaward on a specific matter he has no power to reconsider that award.

24 The doctrine of finality and functus officio is expressed in Art 32 of theModel Law:

The arbitral proceedings are terminated by the final award. Themandate of the arbitral tribunal terminates with the termination of thearbitral proceedings, subject to the provisions of arts 33 and 34(4).

25 Article 33 empowers the arbitral tribunal to correct in the award(a) any errors in computation, any clerical or typographical errors or anyerrors of similar nature; (b) to give an interpretation of a specific point orpart of the award; and (c) to make an additional award as to claimspresented in the arbitration proceedings but omitted from the award.

26 Article 34(4) provides as follows:

The court, when asked to set aside an award, may, where appropriateand so requested by a party, suspend the setting aside proceedings for aperiod of time determined by it in order to give the arbitral tribunal anopportunity to resume the arbitral proceedings or to take such otheraction as in the arbitral tribunal’s opinion will eliminate the groundsfor setting aside.



27 Article 34 is important. It is the only article in Chapter VII of theModel Law. It provides for recourse against an award. The heading of thesection is as follows:

Application for setting aside as exclusive recourse against arbitralaward.

Paragraph (1) of Art 34 says that recourse to a court against an atrbitralaward may be made only by an application for setting aside in accordancewith paras (2) and (3) of this article.

28 There is nothing in the Model Law which authorises the arbitrator torecall or reconsider his award after he has made the final award and hismandate is thereby terminated.

29 The quest for justice under a hierarchical court system can be a longhaul. Under it justice inclines now one side and now to another side.Sometimes she makes a full circle and returns to where she started. ModelLaw regime avoids such vicissitudes entirely. There is no provision forappeals or to recall, reconsider and reverse of a substantive award which theloser perceives to be in error. Furthermore, the scheme and substance of theModel Law are entirely against the court making the substantive decision orinvestigating the correctness of the decision.

A historical note

30 It is fitting moment to make a historical note. It was a time whenLondon was the bastion of transnational arbitration. London’s role asinternational arbitration and commercial litigation centre was part of itsparaphernalia as the foremost financial centre and commercial exchange. Itwas “a valuable economic asset, part of its capital, although an intangibleone”. By the 1970s, however, foreign parties became disillusioned withEnglish arbitration jurisprudence. This was because of the procedures ofstating a case for a ruling by the court and the procedure of error of law orfact on the face of the award. Defeated parties used these methods to delayand at times defeat arbitral justice. These interminable procedures wereradically different from and unknown to Europe and America. Theybrought a bad name to London. In the result foreign parties began to avoidLondon. Paris and New York found much favour. This prompted theEnglish Parliament to pass the Arbitration Act of 1979 to remove thepitfalls mentioned above. It prescribed judicial review in the form ofappeals in extremely circumscribed circumstances. Singapore followed suitin 1980: see Act 2 of 1980. The hallmark of the Model Law is that it does notprovide for appeals on the merits of an arbitral decision even on points oflaw. It gives effective force to the doctrine of functus officio in respect of thesubstantive decision contained in an arbitral award. The powers to recall,reconsider and reverse does not fit in well with the fit of things of the ModelLaw. It is foreign to the jurisprudence of the Model Law. The omission of



the power to recall and reconsider is deliberate. We have accepted theUnited Nations’ Model Law as the transcending copybook instead of thetraditional English precedent. So, the only eyes with which we must view anaward made under the Model Law are the eyes of the Model Law and noother law – written or unwritten. We must not go our own way intransnational arbitration.

31 In respect of an arbitration governed by the Act and the Model Law,Art 34(4) applies only to an award made before the mandate of thearbitrator is terminated as provided in Art 32 and no other. The court hasno choice on the matter.

The decision

32 The foregoing analysis of the law and facts decrees me to concludethat the March award was made by the arbitrator outside his mandate. Itwas a nullity and accordingly without any force or effect.

33 The arbitrator, in order to get around the lack of power and the fact offunctus officio wrote his own writ. He admitted that there was no provisionin the Act or the Model Law which enabled him recall and reverse theaward. But, he said, he had the power because “It is inconceivable that thelaw or public policy would permit such a situation.” He assumed theauthority to add something to the Act and the Model Law. The arbitratoradded this to justify his unauthorised assumption of power:

I am therefore of the view that an arbitrator can reconsider the awardnot only on the terms of Art 33(1) of the Model Law but under thegeneral powers given to him to determine the rules and procedure ofthe tribunal which would include the power to reconsider an awardbefore enforcement if the arbitrator so decide. If I have good reasons toreconsider the matter, I should be allowed to do it. Otherwise, aninjustice would be perpetuated.

34 The propositions of the arbitrator assume that there is a shortcomingin the Model Law to provide for a possible shortcoming of an arbitrator. Irepeat that the absence of the power on the Model Law to recall, reconsiderand reverse the decision contained in an award is deliberate and is foundedon the principle of finality and public policy to bring an early end tocommercial disputes. Its purpose is to compel the arbitrator to act withextreme care and decide with competence and decisiveness. An inclusion ofthe powers the arbitrator argues for will encourage defeated parties toreopen the arbitration even after his mandate has been terminated. It willprovide for indecisive and incompetent arbitrators a second chance. Irepeat that what the arbitrator attempted to do was to write his own writ. Itwas utterly outside the parameters and dynamics of the Act and the ModelLaw. Once he became functus officio he had no power to recall and reversethe award. More importantly he had no power to create that power when itis not contained in the Act or the Model Law. The only powers he had an



award after he became functus officio were those under Art 33. Article 33did not empower the arbitrator to recall and reverse a final award.

35 Counsel for Jeffrey Tang referred to s 12 of the Act which conferscertain powers on the arbitrator relating to the conduct of an arbitration.These include the powers to make orders or give directions in relation tosecurity for costs, discovery of documents, and securing the amount indispute. It also enables the arbitrator to award any remedy or relief whichcould be ordered by the High Court if the dispute had been subject of civilproceedings in that court. These are limited procedural powers which canonly be exercised during the arbitration before the arbitrator becomesfunctus officio. There is nothing in s 12 of the Act which empowers thearbitrator to recall and reverse a final award. The arbitrator quite rightly didnot rely on s 12 of the Act.

36 Finally, counsel for Jeffrey Tang asked me to invoke Art 34(4) andsuspend the setting aside proceedings before me and remit the award to thearbitrator. I cannot do that. Article 33(4) can be invoked only when thereare irregularities in the award and not when the award is a nullity.Furthermore the power to remit does not apply to an award made after thearbitrator became functus officio. The court has no power to resuscitate adead arbitrator.

37 By reason of the matters stated above I set aside the March Award andlet the January award stand.

Headnoted by Cheng Pei Feng.



Re How William Glen

[1994] SGHC 135

High Court — Originating Motion No 39 of 1994G P Selvam J11 May 1994

Legal Profession — Admission — Ad hoc — Canadian Queen’s Counsel seeking toappear as counsel — Scope of s 21 Legal Profession Act (Cap 161, 1990 Rev Ed) —Whether what was contemplated was admission of Queen’s Counsel from the UnitedKingdom only — Whether admission should be restricted to banking and commercialmatters — Whether present case of sufficient complexity and difficulty — Whetherapplicant sufficiently qualified — Section 21 Legal Profession Act (Cap 161, 1990 RevEd)

Statutory Interpretation — Construction of statute — Purposive approach — Wordsof statute plain and free from ambiguity — Whether to read in restrictions based onspeeches in Parliament

Facts

A Canadian Queen’s Counsel (“the applicant”) applied for an ad hoc admissionto appear as counsel for four appellants in their appeal to the High Court againsttheir convictions. The Attorney-General, the Public Prosecutor and the LawSociety submitted that the court ought not to grant the application, because s 21of the Legal Profession Act (Cap 161, 1990 Rev Ed) was subject to twolimitations: that what was contemplated was admission of Queen’s Counselfrom the United Kingdom only; and that admission should be restricted tobanking and commercial matters. It was also asserted that the case wasinsufficiently complex or difficult to warrant a Queen’s Counsel, and that theapplicant had no special experience or knowledge to argue the case at hand.

Held, granting the application:

(1) The primary duty of the courts was to give effect to the words of a statute.Where the words of a statute were plain and free from ambiguity, the courtscould not call in aid extrinsic material for interpretation. The purposiveapproach to interpreting a statute applied only where the words wereambiguous. In the present case, the words of s 21 of the Legal Profession Actwere very clear. As such, the court would not accept the restrictions argued forbased on the speeches in Parliament: at [14], [16] and [17].

(2) Admissions should be considered on the basis of the essential rule ofjustice that like cases should be given like treatment. Admissions in the past havenot been limited to Queen’s Counsel from UK nor confined to banking andcommercial cases: at [18], [19] and [20].

(3) The present application involving constitutional issues was more complexand difficult than several other cases where admissions were granted in the past.Questions relating to fundamental rights enshrined in the Constitution wouldinevitably be brought up in the appeal: at [21].



(4) It had been demonstrated clearly that the experience and credentials theapplicant possessed eminently qualified him to argue the appeal: at [22].

Case(s) referred toFothergill v Monarch Airlines Ltd [1981] AC 251 (refd)Sussex Peerage Case (1844) 11 Cl & Fin 85; 8 ER 1034 (folld)

Legislation referred toConstitution of the Republic of Singapore (1985 Rev Ed) Art 15Interpretation Act (Cap 1, 1985 Rev Ed) s 9AInterpretation (Amendment) Act 1993 (Act 11 of 1993)Legal Profession Act (Cap 161, 1990 Rev Ed) s 21 (consd)Undesirable Publications Act (Cap 338, 1985 Rev Ed) ss 3, 4(2)

Leslie Netto and Tan Beng Swee (Netto Tan & S Magin) for the applicant; Jaswant Singh (Attorney-General’s Chambers) for the Attorney-General; Tek Heng (Chor Pee & Co) for the Law Society of Singapore; Bala Reddy (Deputy Public Prosecutor) for the Public Prosecutor.

11 May 1994 Judgment reserved.

G P Selvam J:

The application

1 Mr William Glen How, a Canadian Queen’s Counsel, applied to thiscourt for an ad hoc admission to appear as counsel for four appellants intheir appeal to the High Court against their convictions. The appellantswere convicted on charges of having in their possession prohibitedpublications without reasonable excuse under ss 3 and 4(2) of theUndesirable Publications Act (Cap 338) (“the Act”). Fines of $800, $500,$500 and $700 were imposed on the four appellants.

2 The issues which, according to the appellants, are to be resolved in theappeals are set out in an affidavit leading to the application. They are:

(a) whether a subordinate court which has no power of judicialreview has the jurisdiction to determine the validity of GazetteNotification No 123 (hereinafter referred to as “Order 123”) whensuch validity is raised by way of a defence to a criminal charge;

(b) the scope of and proper meaning of the term “patent invalidity”;

(c) whether there is a patent invalidity in Order 123;

(d) whether Order 123 was ultra vires the Constitution of theRepublic Singapore;


[1994] 2 SLR(R) Re How William Glen 359

(e) the scope of and proper meaning of the term “reasonableexcuse” as stated in s 3(1) of the Undesirable Publications Act(Cap 338) (hereinafter referred to as “the UPA”);

(f) whether the Legislature has intended that the UPA to apply toreligious publications; and

(g) whether the ministerial decision in making Order 123 is sounreasonable, arbitrary, so as to violate the fundamental liberties ofthe individual as enshrined in the Constitution of the Republic ofSingapore.

3 The Order 123 made by the Minister in 1972 was in the followingterms:

In exercise of the powers conferred by sub-s (1) of s 3 of theUndesirable Publications Act, the Minister for Culture herebyprohibits the importation, sale and circulation of all publicationspublished or printed by the Watch Tower Bible and Tract Society.

Dated 14 January 1972.

4 Section 3 of the Act is as follows:

(1) If the Minister is of opinion that the importation, sale orcirculation of any publication or series of publications published orprinted outside Singapore or within Singapore by any person would becontrary to the public interest, he may in his discretion, by orderpublished in the Gazette, prohibit the importation, sale or circulationof that particular publication or series of publications or allpublications published or printed by that person.

(2) If an order made under subsection (1) specifies by name apublication which is a periodical publication, the order shall, unless acontrary intention be expressed therein, have effect with respect to —

(a) all past and subsequent issues of such publication; and

(b) any publication published or printed under any othername if the publishing or printing thereof is in any respect acontinuation of, or in substitution for, the publishing or printingof the publication named in the order.

(3) If an order made under subsection (1) prohibits the importation,sale or circulation of all publications published or printed by aspecified person that order shall, unless a contrary intention isexpressed therein, have effect not only with respect to all publicationspublished or printed by that person before the date of the order butalso with respect to all publications so published or printed on or afterthat date.

(4) An order made under subsection (1) shall, unless a contraryintention is expressed therein, apply to any translation into anylanguage of the publication specified in the order.



(5) The Minister may at any time revoke, vary or amend any ordermade under this section.

5 Section 4(2) reads as follows:

Any person who without reasonable excuse has in his possession anyprohibited publication or any extract therefrom shall be guilty of anoffence and shall be liable on conviction for a first offence to a fine notexceeding $1,000 or to imprisonment for a term not exceeding oneyear or to both, and for a subsequent offence to imprisonment for aterm not exceeding 2 years.

6 The relevant provisions of the Constitution of the Republic ofSingapore read as follows:

15 (1) Every person has the right to profess and practise hisreligion and to propagate it.

(2) No person shall be compelled to pay any tax the proceedsof which are specially allocated in whole or in part for thepurposes of a religion other than his own.

(3) Every religious group has the right —

(a) to manage its own religious affairs;

(b) to establish and maintain institutions for religiousor charitable purposes; and

(c) to acquire and own property and hold andadminister it in accordance with law.

(4) This Article does not authorise any act contrary to anygeneral law relating to public order, public health or morality.

The objections

7 The relevant parts of s 21 of the Legal Profession Act (Cap 161,1990 Ed) read as follows:

(1) Notwithstanding anything to the contrary in this Act, the courtmay, for the purpose of any one case where the court is satisfied that itis of sufficient difficulty and complexity and having regard to thecircumstances of the case, admit to practise as an advocate and solicitorany person who—

(a) holds Her Majesty’s Patent as Queen’s Counsel;

(b) does not ordinarily reside in Singapore or Malaysia butwho has come or intends to come to Singapore for the purposeof appearing in the case; and

(c) has special qualifications or experience for the purpose ofthe case.

8 The Attorney-General, the Public Prosecutor and the Law Societysubmitted that the court ought not to grant the applications. Their views insummary are as follows. Admission of Queen’s Counsel under s 21 of the



Legal Profession Act has two limitations. Firstly, what is contemplated isadmission of Queen’s Counsel from the United Kingdom only. Secondly,admission should be restricted to banking and commercial matters. Insupport of this contention counsel relied on extracts from speeches of theMinister who introduced the provision and subsequent amendments tos 21.

9 On 21 December 1981 [21 December 1966], the Minister for Law,Mr Barker, said in Parliament (Singapore Parliamentary Debates, OfficialReport vol 25 at col 1078):

Special provision is made for the admission of legal practitionersalready admitted in West Malaysia, the ad hoc admissions of Queen’sCounsel from the United Kingdom, …

10 On 20 March 1990, the Minister for Law, Prof S Jayakumar, said(Singapore Parliamentary Debates, Official Report vol 25 at cols 524–536):

The reason why we allow QCs to come in is really public interest andnational interest, ie it is a recognition of the fact that there are cases orthere can be cases of such complexity or difficulty that there may notbe the local expertise here or there may not be enough of the localexpertise here to provide that kind of skills to handle cases of suchcomplexity and difficulty.

If that is the reason why QCs were allowed in and why the LegalProfession Act provided for it, I would say that reason continues toexist. With Singapore trying to be a leading financial and commercialcentre, we will have this need for expertise to handle difficult andcomplex cases. So I too share the views expressed by the three of themthat the practice of allowing QCs should not be stopped and it shouldcontinue.

The specific provision in the Legal Profession Act says that QCs can beadmitted on an ad hoc basis where ‘he has special qualifications orexperience for the purpose of the case’. So the legislative policy is veryclear. They are obviously to be admitted for cases of complexity ordifficulty where the needed skills or experience or the specialistknowledge is not readily available here. To put it in a different way,Parliament never envisaged or contemplated that they should beadmitted for the routine or the ordinary or the simple case which caneasily be handled by Singapore lawyers. It is for this reason, I believe,that the scheme for the provisions of QCs also allows for the LawSociety, in addition to the Attorney-General, to specifically put theirviews on each application of a QC to the court. So if they haveobjections, they can and should register the objections with the court,because then the court taking note of all views expressed before it canmake a decision.

I too have had feedback from lawyers expressing the same concern ofthe three colleagues that the system of admission of QCs has gone in adirection which might have not been intended by the legislature and



that they are being admitted for simple, routine and ordinary cases.Such a trend not only was never contemplated or envisaged byParliament, but I agree with the Members that one unhealthyconsequence of this would be that it will stultify the growth of aspecialist bar in Singapore.

11 Again, on 14 January 1991, the Minister for Law, Prof S Jayakumar,said (Singapore Parliamentary Debates, Official Report vol 56 at col 798):

Obviously, it will take some time to develop a significant pool of locallitigation lawyers who can service the requirements of Singapore as aninternational financial and commercial centre. When we will achievethat is difficult to predict. In the meantime, however, we should notdeprive our financial and commercial centre of the assistance of QCs.The proposed amendment will allow the Courts to continue to liberallyadmit QCs for important and complex commercial and banking cases.

12 It was not made clear whether these passages should be looked at forthe purpose of construction of the statute or as facts taken intoconsideration in the exercise of discretion which is conferred on the court.

13 Next, it was said that the case is not complex or difficult enough towarrant a Queen’s Counsel. Further, Mr How has no special experience orknowledge to argue the case at hand.

The rule of interpretation

14 The first rule for the understanding of the words of a statute is theplain meaning of the rule. It is only where the draftsman has failed to useplain words that aids to interpretation are to be employed. The primaryduty of the courts, therefore, is to give effect to the words of a statute. Thewords of a Minister in Parliament are not the words of the statute.

15 Tindal CJ, when advising the House of Lords in the Sussex PeerageCase 8 ER 1034, stated the rule succinctly at 1057:

If the words of the statute are in themselves precise and unambiguous,then no more can be necessary than to expound those words in theirnatural and ordinary sense. The words themselves alone do, in suchcase, best declare the intention of the lawgiver. But if any doubt arisesfrom the terms employed by the legislature, it has always been held asafe means of collecting the intention to call in aid the ground andcause of making the statute, and to have recourse to the preamble,which, according to Chief Justice Dyer (Stowel v Lord Zouch, Plowden,369), is ‘a key to open the minds of the makers of the Act, and themischiefs which they intended to redress’.

16 The principle stated by Tindal CJ holds today as it did when he statedit. I am also mindful of s 9A of the Interpretation Act (Cap 1) introduced byAct 11 of 1993. That section does not in any way affect the rule stated byTindal CJ in the Sussex Peerage claim [case]. Accordingly, where the wordsof the statute are plain and free from ambiguity the courts cannot call in aid



the various extrinsic material enumerated in that section. Further, the ruleof purposive approach in interpreting a statute comes in only where thewords of the statute are ambiguous. See Fothergill v Monarch Airlines Ltd[1981] AC 251 at 272.

The decision

17 The words of s 21 are very clear. All that is required is that theapplicant must “hold Her Majesty’s Patent as Queen’s Counsel”.Mr William Glen How holds the patent and thus holds the requirementwhich enables him to be admitted. As regards the case, all that is required isthat the court must be “satisfied that it is of sufficient difficulty andcomplexity” to warrant the services of a Queen’s Counsel. There is norestriction on the type of case. I am therefore unable to accept therestrictions argued for based on the speeches in Parliament.

18 Apart from what I have said earlier, I feel compelled to admitMr William Glen How to appear in this by an essential rule of justice: likecases should be given like treatment.

19 The patent held by Mr William Glen How says that he is “learned inthe law for the Province of Ontario” and is granted by the Lt Governor ofthe Province of Ontario. The patent given to a Queen’s Counsel fromUnited Kingdom has no such words of limitation as to his learning.Further, it is granted by the Queen herself. If Mr William Glen How isdisqualified by the words of limitation as to his learning, AustralianQueen’s Counsel would equally be disqualified for the patent held by themalso carry similar words of limitation. For example, the patent of Mr RogerVincent Gyles who was admitted in Originating Motion No 6 of 1994, wasgranted by the Governor of New South Wales and contained the words oflimitation: “learned in the law of New South Wales”.

20 Next, admissions in the past have not been confined to banking andcommercial cases. In OM 79/1991 Mr Roy Clarence Pearman Allaway, aQueen’s Counsel of New South Wales, was granted admission to appear ina case with charges under the Penal Code (Cap 224) and the Prevention ofCorruption Act (Cap 248). More recently, in OM 25/1994, Mr MichaelDavid Sherrard QC was granted admission to appear for an appellant inMagistrate’s Appeal No 48/94/01 which was an appeal against sentenceonly. The main grounds of appeal related to the principles to be applied inconsidering the suitability of a youthful offender for probation.

21 As to complexity and difficulty, the present application involvingconstitutional issues is more complex and difficult than several other caseswhere admissions were granted in the past under the new law. The issueconcerns not merely the fines imposed by a magistrate. What is at issue isthe validity of governmental action in making Order 123 – a judicial reviewof the order in a broad sense of the term on the ground that it is ultra vires



the Constitution. Questions relating to fundamental rights enshrined in theConstitution inevitably will be brought up in the appeal.

22 As to the qualifications of Mr William Glen How, it has beendemonstrated clearly that the experience and credentials he possesseseminently qualify him to argue the appeal.

23 I accordingly grant the application.

Headnoted by Pao Pei Yu, Peggy.


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