singapore law gazette (february 2013)

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

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A Happy & Healthy New Year 03Presidents Message

Diary and Upcoming Events 04Council and Committee Update 06Presenting the Portrait of The Honourable The Chief Justice Sundaresh Menon 08Thank You Dinner for Volunteers 10

News

Locus Standi in Judicial Review: Two Roads Diverge in a Singapore Wood 14Causation, Remoteness, Scope of Duty and the Rubenstein Decision 19The Export Import Licensing System of Myanmar 26

Features

Tea with the Law Gazette Alternate Dispute Resolution and the 30Law Society Arbitration Scheme An Interview with Mr Chan Leng Sun, SC The Young Lawyer Sitting with a Silk 34

Columns

Alter Ego The Changing Dream 36Travel Unforgettable Trip to Middle-Earth 38Book Shelf Law of Credit and Security by Loo Wee Ling 47

Lifestyle

Notices Professional Moves 49Information on Wills 50

51Appointments

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 Kimberley Leng, Ms Lye Huixian, Mr M Lukshumayeh, Mr Marcus Yip, Mr Melvin See, Mr Mohan Gopalan, Mr Rajan Chettiar, Ms Simran Kaur, Ms 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

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LexisNexis, a division of Reed Elsevier (Singapore) Pte Ltd, is a leading provider of legal and professional information in Asia, with offices in Singapore, Malaysia, Hong Kong, India, England, Scotland, Ireland, Australia, New Zealand, Canada and South Africa. The complete range of works published by LexisNexis include law reports, legal indexes, major works, looseleaf serivces, textbooks, electronice products and other reference works for Asia.

LexisNexis3 Killiney Road, # 08-08, Winsland House 1, Singapore 239519Tel: (65) 6733 1380Fax: (65) 6733 1719http://www.lawgazette.com.sgISSN 1019-942X

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.

Circulation 5,000

Subscription Fee S$228.00 (inclusive of GST) for 12 issues

The Law Societys Mission StatementTo serve our members and the communitty by sustaining a competent and independent Bar which upholds the rule of law and ensures access to justice.

Singapore Law Gazette February 2013

A Happy & Healthy New YearHappy New Year!

The New Year is one of the oldest celebrated traditions in the world. Apparently it was first observed in ancient Babylon some 4,000 years ago. Well, we cant pinpoint the exact starting date of the tradition for sure, but I do know that whether we take the solar or the lunar calendars, the new year is celebrated the world over to usher the beginning of Spring and to herald the coming of new things.

The Chinese have taken the celebrations to new heights the Babylonians never could have dreamed of. New year celebrations must now include new clothes, new socks, new bed sheets and um, good as new $2 notes.

When the MAS issued its press release a couple of weeks before Chinese New Year that they would be issuing good as new $2 notes, along with brand new ones, for the coming Lunar New Year, it touched a raw nerve amongst many Chinese Singaporeans. The thought of using re-used notes is quite unthinkable! Many went rushing off to their bankers hoping to be the first few to ask for the really brand new notes before they ran out. Others called their friends and relatives with premier banking accounts, hoping to get ahead in the queue for really crisp $2 notes with numbers that run in sequence. Ang pows are a must for Chinese New Year. And you cant stuff them with notes that are not genuinely new. In a funny sort of way, this shows that we Singaporeans do take our traditions seriously.

I am glad the legal profession also has its rich heritage and its time honoured traditions. One of the most cherished of the traditions is our Opening of the Legal Year (OLY), now celebrated on the first Friday of the new year. My predecessor, Mr Wong Meng Meng SC, had noted in the corresponding edition of this publication last year that while the Singapore OLY may be simpler than the events in Hong Kong and Malaysia, it is no less poignant and significant. I cannot agree more.

The OLY brings together the Judiciary, the Bar and the legal officers of the State in a manner that is both unique as well as powerful. It was said by the Hon Gurney E Newlin, President of the American Bar Association in his speech, Conservation of the Traditions of the Legal Profession, that

The Strength of the Law depends ultimately upon the confidence it enjoys among the mass of the people.

The gathering of the Judges, the Advocates & Solicitors, the Prosecutors and the teachers of the law at the OLY is an awesome show of strength. It enhances convictions that the rule of law is respected and inspires confidence amongst the peoples. The essence of such an event is clearly and succinctly captured by these words of the Hon Gurney E Newlin in the same speech:

Once again we meet in annual session, not for the purpose of reviewing the past and exulting our accomplishments or excusing the failures, but rather to counsel together and determine how we may in the future through the inspiration of united effort more successfully and effectively perform the duties which are our particular responsibility.

The OLY is ultimately significant because it espouses the selfless values of the profession and articulates our common hopes and objectives in our service of the community. It binds the objectives and efforts of the Bench, the Bar and the State for the collective good of the Community. Without the Community, the OLY would arguably be a self-congratulatory and indulgent event; a hollow and irrelevant tradition.

Back to our New Year celebrations. It is true that absent our Community and the people who really matter in our lives, the new clothes and the exchanges of ang pows may be merely self-congratulatory and indulgent events; traditions which are hollow and irrelevant.

Presidents Message


18 January 2013Thank You Dinner and Launch of the 2nd Edition of The Art of Family Lawyering6.30pmRestaurant Viet Lang

19 January 2013Launch of Law WorksJointly organised by the Law Society and NTUC10.30am-11.30amNTUC Business Centre

24 January 2013Seminar on Writing to WinOrganised by the Continuing Professional Development Committee1.00pm-4.00pmNTUC Business Centre

31 January to 1 February 2013Litigation Conference: Present Challenges, Future ProspectsOrganised by the Civil Practice Committee9.00am-6.00pmSupreme Court Auditorium

Diary

Upcoming Events

5-7 February 2013Legal Practice Management CourseNTUC Business Centre

15 February 2013Lunar New Year LuncheonSubordinate Courts Bar Room

1 March 2013UK and Singapore Banking, Arbitration and Insurance Review 2012Marina Bay Sands Convention Centre Level 4

March 2013 (Date to be confirmed)Seminar on Challenging Clients, Challenged LawyersNTUC Business Centre, One Marina Boulevard

Very recently, just as I was in the midst of celebrations between the two New Years, a friend sent me this delightful poem by Diana Loomans which I think offers excellent perspective as we now settle down to the serious business of calibrating our compasses to navigate our respective journeys to achieve professional goals in the new year ahead:

If I had my child to raise over again, I'd finger paint more, and point the finger less. I'd do less correcting, and more connecting. I'd take my eyes off my watch, and watch with my eyes. I would care to know less, and know to care more. I'd take more hikes and fly more kites. I'd stop playing serious, and seriously play. I'd run through more fields, and gaze at more stars. I'd do more hugging, and less tugging. I would be firm less often, and affirm much more.

I'd build self-esteem first, and the house later. I'd teach less about the love of power, And more about the power of love. It matters not whether my child is big or small, From this day forth, I'll cherish it all.

Our careers, like traditions, are worth celebrating and pursuing. Especially if they are for, and with, the people who matter. Otherwise, they may end up being self-congratulatory and indulgent pursuits; hollow and irrelevant at the end of the day.

Happy New Year!

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

Presidents Message


Recruit Legal391A Orchard Road

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Legal In-HouseL1212-2021- Head Legal- Insurance- 8 PQE A well-established insurer is seeking a legal professional with insurance experience to lead their legal team. This will be a managerial role based in Singapore, where candidates will be working closely with the Head Compliance to manage the life insurance sector of the company. Contact TraceyL0113-2043 - Contract/Commercial Manager Telecommunications 15+ PQE A telecommunications industry leader with operations in around 150 countries is looking for very experienced lawyers with strong contract management background. Preference for candidates who are willing to relocate to Indonesia/Bangkok/Korea/New Zealand. Candidates from IT and construction background are welcomed to apply. Contact SilviaL0812-1967-Regional Legal Counsel- IT >8PQE-An established European leader in the banking software industry is looking for a Regional Legal Counsel. Candidates must be called to the Singapore Bar or from a commonwealth jurisdiction with prior in-house experience. Contact AmyL1212-2015- Senior Legal Counsel - Investment Asset Management >8 PQE A leader in the asset management field is seeking to hire an experienced lawyer to handle international investment fund matters. This will be a standalone role in Singapore, candidates should demonstrate experience in negotiating complex Investment Management Agreements and possess good working knowledge of global financial services regulatory and policy matters. Contact LinusL0113-2048-Senior Legal Counsel - Manufacturing industry - 7 - 10 PQE My client, a Singapore-listed manufacturing company with an extensive China presence, is looking for a senior legal counsel to manage a team of two. This is a great opportunity to step into a head role once you prove yourself. Youll be providing legal advice and guidance to business and support units, managing the Groups IP matters, as well as claims and dispute resolutions and M & A transactions. Contact Cassandra L0113-2044- Legal Counsel- Oil and Gas Industry >6-8PQE A Regional Leader in the offshore oil and gas and shipping industry is looking to hire a legal counsel. Experience in shipping, engineering, procurement and construction (EPC) and offshore oil and gas experience is highly regarded. Contact LinusL1012-2007- Legal Counsel- Pharmaceutical 5-10 PQE Our client is a leading pharmaceutical company and they are looking for a junior legal counsel to join the team. This counsel will be expected to draft, review and negotiate contracts and to give legal advice to affiliates. Prior experience in the pharmaceutical industry would be an added advantage. Mandarin skills are required. Contact AmyL0113-2049 - Legal Counsel - IT industry - 5 - 7 PQE One of Singapores leading IT companies is looking for a legal counsel to join their stable team. Youll be reviewing contracts, tenders, vendor agreements and related documents as well as advising on contractual issues, legal and commercial risks. If youre personable, engaging and open-minded and looking for a family-oriented environment, youll fit right in. Contact Cassandra L1112-2012 - Legal Counsel - IT > 5 PQE A holding company is seeking

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lawyers well-versed in the IT sphere. Mid level lawyers qualified in the Commonwealth are welcomed to apply. Contact HelmiL0113-2040-Legal Counsel (Contract)-Insurance >5PQEOur Client is an European Insurance Company and they are looking for a Legal Counsel to assist them with one of their projects. Prior in-house and industry experience is preferred. Contact Amy L0113-2034-Legal Counsel Property Industry- >5PQE A regional leader in the hospitality industry is seeking to hire a legal counsel. Experience in corporate commercial, real estate or hotel management contracts is greatly regarded. Contact LinusL0113-2045- Contracts Manager- IT Industry - >5PQE A leading global player in the IT industry is seeking to hire a Contracts Manager to support the team in APAC. This is a newly created role with a regional focus. Experience in Information Technology industry or supplier related contracts is greatly valued. Contact LinusL-0312-1906 Legal Counsel - Infrastructure - >4PQE A rapidly expanding Asian infrastructure group is looking for a Mid-level Counsel. Experience working in China is highly valued with excellent Mandarin language proficiency. M&A and Corporate Finance Background required. Candidates should preferably be called to the Singapore Bar or commonwealth jurisdictions. Contact HelmiL0113-2041-Legal Counsel-Chemicals 4-6PQE-A world leader in the chemicals industry is seeking a legal counsel to join its team. Candidates with prior in-house experience with M&A exposure are highly preferred. Contact AmyL0113-2050 - Legal Counsel - IT Industry - 2 - 4 PQE A Fortune 500 company thats expanding in the APAC region, is looking for a junior legal counsel to join them. You must be from one of the top four law firms, sharp, willing to learn, and commercially savvy. Related IT background is not important as youll be under the guidance and mentoring of one of the most capable Associate General Counsels. Contact Cassandra

ComplianceL0113-2048 - Compliance Officer - Trust - >5PQE An independent trustee is seeking a Compliance Officer to come on-board. Compliance professionals with trust experience who are seeking a challenging of a standalone role, working closely with the regional office are welcome to apply. Contact TraceyL0113-2049 - Compliance Manager - Insurance - >5 PQE A well-established insurer is seeking a compliance professional to join their Business Advisory Unit or their new exciting project, where a managerial position will be assumed. Experience with life insurance is preferred. Contact TraceyL0113-2050 - AML Compliance Officer - Bank - >5PQE One of the leading banks is seeking an AML specialist to join their AML Advisory Team. Experience with AML and KYC in banks or insurance companies is preferred. Contact TraceyL0113-2051 - Compliance Officer Asset Management - >3PQE A fund house/asset management firm is seeking a compliance professional to join their team as a standalone role. Experience with funds compliance and internal audit is a must. Contact Tracey

Launch of 2nd Edition of The Art of Family Lawyering

The Family Law Practice Committee launched the 2nd edition of The Art of Family Lawyering on 18 January 2013. This publication, in the format of an e-book, is a collective effort of 15 authors and a useful guide for practitioners keen on the area of family law. The book was first launched in 2005 and has been a recommended text for the Preparatory Course Leading to Part B of the Singapore Bar Examinations.

The e-book is now available at the Law Societys e-shop (via the Societys website www.lawsociety.org.sg) at a special launch price of $20.00 till 17 February 2013 (original price $25.00).

Service to Disseminate Holiday/Office Closures to Designated Third Party Organisations

The Publications Committee has launched a new service for law practices where, for a reasonable fee, the Law Society will assist law practices to disseminate their holiday/office closures to a list of designated third party organisations. The objective of this service is to assist law practices to notify third party organisations of impending office closures without the law practices having to inform these organisations on their own. More information about this service is available at the Societys website.

Law Works 2013

Law Works, launched officially on 19 January 2013, is a partnership between the Law Society and the National Trades Union Congress. The aim of the initiative is to educate workers on their legal rights through a series of legal clinics, legal primers addressing the concerns of workers, and recent developments in the law. These activities will be held in conjunction with the publication of a pocket series on employment law.

Resource Database for Small Law Firm Practitioners

As part of an initiative to establish a resource database for small law firm practitioners, the Small Law Firms Committee had in 2011, developed 18 sample precedents. In 2012, 10 additional sample precedents were developed for small firm practitioners to use and adapt as appropriate. These include Agreement for Sale of Shares, Guarantee for Loans, Deed of Assignment, Novation Agreement, Share Transfer Form, Shareholder Agreement, Partnership Agreement for Lawyers, Settlement Agreement, Distribution Agreement, and Notices of Company Meetings and Resolutions.

The sample precedents are available at the Members Library of the Societys website.

Council and Committee Update

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.

Legal Counsel - Transport, 2-4PQEA leading organisation with interests in the transport market is urgently looking to recruit a junior Legal Counsel. You will be supporting various offices in the region on legal evaluations of tender documents and other corporate and commercial matters. This role offers clear career progression opportunities and will suit an ambitious young lawyer looking for an in-house move. (Ref: CLIH162)

Legal Counsel - Telecommunications, 5-8PQEAs a result of regional growth, an established telecommunications conglomerate is recruiting a lawyer to assist on all legal matters relating to M&A, investments, asset management and corporate compliance. This is an excellent role that would suit a mid-level lawyer seeking regional exposure and a challenging portfolio within a progressive environment. (Ref: CLIH049)

Legal Counsel - EPC, 4-8PQEA global multinational is looking for a qualified lawyer to be responsible for legal matters across the APAC region. Possessing strong EPC experience, you will provide legal advice on all commercial transactions and will work closely with key stakeholders. The role will suit a commercially astute lawyer who is able to balance risks and commercial benefits that arise in projects and acquisitions. (Ref: CLIH171)

ISDA Negotiator - Energy, 2+PQEAn excellent ISDA Negotiator role with the trading arm of an energy multinational is now available. The ideal candidate will have prior experience negotiating and drafting ISDA contracts and related derivative documentation and should possess a basic understanding of compliance and regulatory requirements. The role offers excellent work-life balance as well as a market-rate salary. (Ref: CLIH154)

Legal Counsel - Technology, 5+PQEA leading multinational is recruiting a capable lawyer with the ability to provide legal support to ASEAN regional businesses on various areas including corporate commercial, litigation and compliance. The role offers a wide corporate remit and will suit candidates who possess relevant experience in the manufacturing industry or who possess substantial commercial contracts experience. (Ref: CLIH137)

M&A Lawyer - Commodities, 10+PQEA global commodities group is seeking an M&A lawyer with experience in either the energy or the commodity market sectors. This exciting transactional role would suit a driven and dynamic personality with strong commercial acumen and a pragmatic approach to legal work. An attractive package will be tailored for the chosen candidate. (Ref: CLIH125)

Legal Counsel - Construction, 5-7PQEAn opportunity with a construction consultancy conglomerate has arisen. As the first lawyer to be appointed in Asia, you will support various offices in the region on a wide range of corporate and commercial matters including executing M&A transactions. A competitive base salary and excellent career progression opportunities are on offer. (Ref: CLIH146)

Legal Counsel - Real Estate, 6+PQEA rare opportunity to be part of the pioneer team in Singapore, this role has Asia-Pacific coverage and would suit a lawyer with a dynamic personality. The ideal candidate should have private practice experience gained from a top law firm and be adept at communicating with a variety of people from diverse backgrounds. A stable, multicultural environment and an exciting portfolio are on offer. (Ref: CLIH147)

Associate - Debt Capital Markets, 4-6PQE (UK Qualified)Apply for this fantastic opportunity to be part of a dynamic international finance practice advising on DCM and banking matters, covering major debt disciplines across multiple jurisdictions. Suitable candidates should possess excellent academics and a strong technical background in general finance and debt capital markets including MTNs, secured bonds and securitisations. (Ref: CPP004)

Tailored recruitment soutionsCalico Asia is an executive search consultancy dedicated to the provision of tailored recruitment solutions and consulting services for the legal and compliance communities throughout Asia. Our fast growing brand has been built upon the proven recruitment expertise and transparent approach of our experienced consultants. Along with managing search and selection assignments, we provide bespoke recruitment services for our clients and our global network of candidates.

For further information on the advertised positions or for any recruitment enquiries, please contact Samantha Soh, Celine Tay or Evelyn Xu at +65 68085665 or email us at [email protected]. Alternatively, please visit our website: www.calicoasia.com/opportunities for a full listing of available vacancies.

One Raffles Place Tower 2 #19-61 Singapore 048616

www.calicoasia.com

Calico-Ad-Feb13-210x280.indd 1 2/13/13 2:56 PM

News


Council and Committee Bulletin

Legal Counsel - Transport, 2-4PQEA leading organisation with interests in the transport market is urgently looking to recruit a junior Legal Counsel. You will be supporting various offices in the region on legal evaluations of tender documents and other corporate and commercial matters. This role offers clear career progression opportunities and will suit an ambitious young lawyer looking for an in-house move. (Ref: CLIH162)

Legal Counsel - Telecommunications, 5-8PQEAs a result of regional growth, an established telecommunications conglomerate is recruiting a lawyer to assist on all legal matters relating to M&A, investments, asset management and corporate compliance. This is an excellent role that would suit a mid-level lawyer seeking regional exposure and a challenging portfolio within a progressive environment. (Ref: CLIH049)

Legal Counsel - EPC, 4-8PQEA global multinational is looking for a qualified lawyer to be responsible for legal matters across the APAC region. Possessing strong EPC experience, you will provide legal advice on all commercial transactions and will work closely with key stakeholders. The role will suit a commercially astute lawyer who is able to balance risks and commercial benefits that arise in projects and acquisitions. (Ref: CLIH171)

ISDA Negotiator - Energy, 2+PQEAn excellent ISDA Negotiator role with the trading arm of an energy multinational is now available. The ideal candidate will have prior experience negotiating and drafting ISDA contracts and related derivative documentation and should possess a basic understanding of compliance and regulatory requirements. The role offers excellent work-life balance as well as a market-rate salary. (Ref: CLIH154)

Legal Counsel - Technology, 5+PQEA leading multinational is recruiting a capable lawyer with the ability to provide legal support to ASEAN regional businesses on various areas including corporate commercial, litigation and compliance. The role offers a wide corporate remit and will suit candidates who possess relevant experience in the manufacturing industry or who possess substantial commercial contracts experience. (Ref: CLIH137)

M&A Lawyer - Commodities, 10+PQEA global commodities group is seeking an M&A lawyer with experience in either the energy or the commodity market sectors. This exciting transactional role would suit a driven and dynamic personality with strong commercial acumen and a pragmatic approach to legal work. An attractive package will be tailored for the chosen candidate. (Ref: CLIH125)

Legal Counsel - Construction, 5-7PQEAn opportunity with a construction consultancy conglomerate has arisen. As the first lawyer to be appointed in Asia, you will support various offices in the region on a wide range of corporate and commercial matters including executing M&A transactions. A competitive base salary and excellent career progression opportunities are on offer. (Ref: CLIH146)

Legal Counsel - Real Estate, 6+PQEA rare opportunity to be part of the pioneer team in Singapore, this role has Asia-Pacific coverage and would suit a lawyer with a dynamic personality. The ideal candidate should have private practice experience gained from a top law firm and be adept at communicating with a variety of people from diverse backgrounds. A stable, multicultural environment and an exciting portfolio are on offer. (Ref: CLIH147)

Associate - Debt Capital Markets, 4-6PQE (UK Qualified)Apply for this fantastic opportunity to be part of a dynamic international finance practice advising on DCM and banking matters, covering major debt disciplines across multiple jurisdictions. Suitable candidates should possess excellent academics and a strong technical background in general finance and debt capital markets including MTNs, secured bonds and securitisations. (Ref: CPP004)

Tailored recruitment soutionsCalico Asia is an executive search consultancy dedicated to the provision of tailored recruitment solutions and consulting services for the legal and compliance communities throughout Asia. Our fast growing brand has been built upon the proven recruitment expertise and transparent approach of our experienced consultants. Along with managing search and selection assignments, we provide bespoke recruitment services for our clients and our global network of candidates.

For further information on the advertised positions or for any recruitment enquiries, please contact Samantha Soh, Celine Tay or Evelyn Xu at +65 68085665 or email us at [email protected]. Alternatively, please visit our website: www.calicoasia.com/opportunities for a full listing of available vacancies.

One Raffles Place Tower 2 #19-61 Singapore 048616

www.calicoasia.com

Calico-Ad-Feb13-210x280.indd 1 2/13/13 2:56 PM

Presenting the Portrait of The Honourable The Chief Justice Sundaresh Menon

On 3 January 2013, the Law Society presented a specially commissioned portrait of The Honourable The Chief Justice Sundaresh Menon at a ceremony at the Supreme Court, attended by the Law Societys Council members. The portrait was the work of Mr Jian Yao.

Presenting portraits of the Chief Justice has been a tradition of the Bar. In 1990, the Law Society presented to the Supreme Court the portrait of the late former Chief Justice Wee Chong Jin, first Chief Justice of independent Singapore. In 1993, the Law Society presented a portrait of

former Chief Justice Yong Pung How to the Supreme Court; and in 2007, presented a portrait of former Chief Justice Chan Sek Keong to the Supreme Court.

This tradition marks the Bar's respect for the Bench and for the Chief Justice in particular as the leader and apex of the legal profession in Singapore.

The four portraits now take pride of place beside the auditorium of the Supreme Court.

Chief Justice Sundaresh Menon (centre) with members of the Council (L to R): Mr Leo Cheng Suan, Mr Wong Meng Meng, SC, Mr Lok Vi Ming, SC, Mr Thio Shen Yi, SC, Mr Kelvin Wong and Mr Anand Nalachandran

News


Presenting the Portrait of the Chief Justice

News


Presenting the Portrait of the Chief Justice

Thank You Dinner for Volunteers

Serving the profession is a privilege, says Ms Lisa Sam, who served as Chairperson of the Small Law Firms Committee for three years. Mr Alvin Yeo, SC adds, The Society has the vital task of looking after the interests of its members and guiding the direction the profession should take, while bearing the responsibility of regulating the conduct of lawyers. It can only discharge this heavy burden with the contributions of all its members. Alvin served as Chairperson of the Audit Committee for two years. Both Lisa and Alvin were amongst the 14 outgoing Chairpersons who were awarded a plaque of appreciation at the Law Societys Annual Thank You Dinner.

The Annual Thank You Dinner was held at Viet Lang Restaurant on 18 January 2013. The dinner was a small way for the Society to show its appreciation to members who volunteered in the Societys Committees of 2012.

At the dinner, President Mr Lok Vi Ming, SC presented Plaques of Appreciation to the following outgoing Committee Chairpersons:

1. Mr N Sreenivasan, SC Chairperson of Advocacy Committee (1 August 2012

31 August 2012)

2. Mr Gary Allen Pryke Chairperson of Anti-Money Laundering Committee

(2011 to 2012)

3. Mr Alvin Yeo Khirn Hai, SC Chairperson of Audit Committee (2011 to 2012)

4. Mr Abdul Rashid Bin Abdul Gani Chairperson of Compensation Fund Committee (2008

to 2012)

5. Mr Thio Shen Yi, SC Chairperson of Continuing Professional Development

Committee (2003 to 2012)

6. Mr Derrick Wong Ong Eu Chairperson of Conveyancing Practice Committee

(2008 to 2012)

7. Ms Margaret Chew Sing Seng Chairperson of Funds Coordination Committee (2010 to

2012)

8. Ms Renuka Chettiar Co-Chairperson of NIMA-PIMA Committee (2012)

9. Mr Patrick Yeo Kim Hai Co-Chairperson of NIMA-PIMA Committee (2012)

10. Mr Cyril Chua Chairperson of Project Law Help Committee (2011 to

2012)

Members of the Family Law Practice Committee with the authors of The Art of Family Lawyering as well as District Judges from the Subordinate Courts

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Thank You Dinner

President Mr Lok Vi Ming, SC Mr Yap Teong Liang, Chairperson of the Family Law Practice Committee

Mr Lok Vi Ming, SC, and Mr N Sreenivasan, SC, Chairperson of the Advocacy Committee (Aug-Dec 2012)

Ms Renuka Chettiar, Co-Chairperson of the NIMA-PIMA Committee 2012

Mr Thio Shen Yi, SC (right), Chairperson of the Continuing Professional Development Committee (2003-2012)

Mr Alvin Yeo, SC (right), Chairperson of the Audit Committee (2011-2012)

Mr Raymond Yeo (left), one of the authors of The Art of Family Lawyering

Ms Malathi Das, one of the authors of The Art of Family Lawyering

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Thank You Dinner

11. Mr Simon Tay Seong Chee Chairperson of Public and International Law Committee

(2011 to 2012)

12. Ms Lisa Sam Hui Min Chairperson of Small Law Firms Committee (2010 to

2012)

13. Ms Hazel Tang Bik Kwan Chairperson of Social & Welfare Committee (2012)

14. Mr Low Chai Chong Chairperson of Solicitors Accounts Rules Committee

(2001 to 2012)

At the dinner, the 2nd edition of The Art of Family Lawyering was launched by President Mr Lok Vi Ming, SC and Mr Yap Teong Liang, Chairperson of the Family Law Pratice Committee. The Art of Family Lawyering was first launched in 2005 and is a recommended text for the Preparatory Course leading to Part B of the Singapore Bar Examinations conducted by SILE. The 2nd edition, in the format of an e-Book, is an initiative of the Family Law Practice Committee who worked on the updated version for two years.

The Law Society would like to thank everyone who attended the dinner, in particular, Chief District Judge Mr Tan Siong Thye, Deputy District Judge Ms Jennifer Marie, and Senior District Judge Ms Foo Tuat Yien.

News

Thank You Dinner

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Locus Standi in Judicial Review: Two Roads Diverge in a Singapore WoodHistory and Procedure

Traditionally, the locus standi requirements for judicial review differed according to the remedy sought. The threshold was low for a prohibiting order: an applicant had to show only that he was adversely affected2. The threshold was also low for a quashing order: the High Court observed in Chan Hiang Leng Colin v Minister for Information and the Arts [1995] 2 SLR(R) 627 (Colin Chan) that It was sufficient that there had been an abuse of power which inconvenienced someone.3 It was harder to show standing for a mandatory order. The applicant had to have a specific legal right,4 have a direct and substantial interest at stake, or at the very least be adversely affected.5

Prohibiting, quashing, and mandatory orders are prerogative remedies. In contrast, a declaration is a non-prerogative remedy. The standing requirements for a declaration were stricter than those for the prerogative remedies.6 The applicant had to show that the declaration he sought related to a right that was personally vested in him and that he had a real interest at stake. That test was affirmed by the House of Lords in Gouriet v Union of Post Office Workers [1978] AC 435, and later followed by the Singapore Court of Appeal in Karaha Bodas Co LLC v Pertamina Energy Trading Ltd [2006] 1 SLR(R) 1127 (Karaha Bodas).

It was confusing for each remedy to prescribe its own standing requirements. Hence in 1978, England reformed its procedural rules. The prerogative remedies and declaration could be obtained under a single procedure with a unified standing requirement: the applicant had to show a sufficient interest. Accordingly, in the subsequent case of R v I.R.C. ex parte National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617, the House of Lords broadly favoured a unified test for standing.

Singapore did not follow the English procedural reforms. Here, an application for prohibiting, quashing, or mandatory orders is made via O 53 of the Rules of Court. Since May 2011, a declaration can be applied for under O 538 or O

15 r 16. Before May 2011, a declaration was available only under O 15 r 16.9 The High Court in Colin Chan therefore commented that the law in Singapore was that which existed prior to the changes in the English procedure.10

Nonetheless, a lack of procedural reform does not restrict the Courts from developing the substantive rules on standing. The arguments against a multitude of standing requirements apply as cogently in Singapore as they do in England. The first step towards unification of the standing requirements was made by the Court of Appeal in Eng Foong Ho v Attorney-General [2009] 2 SLR(R) 542 (Eng Foong Ho).

Eng Foong Ho v Attorney-General

The applicants in Eng Foong Ho were devotees of a Buddhist temple. Next to the temple were a Hindu mission and a Christian church. On 20 January 2003, the Government announced that the temple would be compulsorily acquired for the construction of the MRT Circle line. The mission and church went unacquired. Over the next four years, the temples trustees wrote in vain to various government departments protesting against the acquisition of the temple.11 So on 16 January 2008, the applicants applied under O 15 r 16 for a declaration that the Governments acquisition of the temple violated their right to equality under art 12 of the Constitution.

The issue of standing that arose for the Courts consideration was subtle. The Attorney-General (AG) had challenged the applicants standing to seek a declaration. The AG argued that because the applicants had proceeded via O 15 r 16 and not O 53, they had to satisfy what was described as the stricter test for locus standi as decided in Karaha Bodas.12 But the relevance of O 53 is not immediately apparent: the applicants had not sought prerogative relief under O 53, and neither was a declaration available under O 53 at that time.

As the number of judicial review applications increase, it becomes correspondingly important to understand who may or may not bring judicial review the issue of locus standi.1 This article will describe the Court of Appeals recent endeavour to unify the standing requirements for judicial review. It will also submit that the difficult choices still lie ahead, as suggested by two recent High Court decisions.

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The relevance of O 53 is explicable upon a closer examination of the facts. The application had been brought on 16 January 2008, more than five years after the decision to acquire the temple.13 What the applicants essentially wanted was to quash that decision. But the applicants were out of time to quash under the three month deadline in O 53 r 1(6). Hence the next best remedy was an O 15 r 16 declaration that the decision was unconstitutional. Although the remedy differed, the outcome (if the applicants succeeded) would be the same in practice: the Government could be expected not to act unconstitutionally.

The problem for the applicants was that, as explained, the standing requirements for a declaration were traditionally stricter than those for a quashing order. Hence, as the AG appeared to contend, the procedural route taken by the applicants under O 15 r 16 made it more difficult for them to enforce their substantive constitutional rights, than if they had proceeded under O 53. That would be awkward since in both cases the rights that the applicants were seeking to protect were the same.

The Court of Appeal rejected the AGs argument, saying:14 In our view, it does not matter what procedure the [applicants] have used. The substantive elements of locus standi cannot change in the context of the constitutional protection of fundamental rights.

This was an important ruling. By focusing on the cause of action the constitutional protection of fundamental rights the Court moved away from the traditional common law position that had focused on the procedure and remedy. This change of focus was a significant step towards unification of the standing requirements. But the Court left the key question open: what then are the standing requirements?

In theory, the Court could have picked one of three answers: (i) the stringent Karaha Bodas criteria; (ii) the more relaxed requirements for a prohibiting/quashing order; or (iii) a compromise of the two. However on the facts, it was not necessary for the Court to decide which of the three answers to adopt. This is because even the most stringent criteria of Karaha Bodas would have been satisfied: since the applicants were members of an association that was a joint tenant of the temple, they had a personal right and real interest15.

It would be three years before the question left open in Eng Foong Ho was answered by the Court of Appeal in Tan Eng Hong v Attorney-General [2012] 4 SLR 476 (Tan Eng Hong).

Tan Eng Hong v Attorney-General

The decision in Tan Eng Hong is subtle and learned, repaying close reading. It analyses important issues, but only one aspect of its discussion of locus standi will be discussed here.

The applicant, Mr Tan, was a gay Singaporean. He was caught having oral sex with another man in a public toilet. The Prosecution initially charged him under s 377A of the Penal Code (Cap 224, 2008 Rev Ed). On 24 September 2010, Mr Tan applied to the Court under O 15 r 16 for a declaration that s 377A was unconstitutional, in particular, for breaching art 12. The Prosecution later substituted the charge to one under s 294(a) of the Penal Code.

What Mr Tan wanted was to void s 377A. So long as s 377A existed, there was the threat of prosecution under it.16 The Governments apparent policy not to proactively enforce s 377A did not fully dispel the spectre of prosecution.17 To achieve his desired outcome, Mr Tans primary remedy was a declaration under O 15 r 16 that the law was unconstitutional and hence, void.18 It is useful to note that in this sense, the factual situation in Tan Eng Hong differed somewhat from Eng Foong Ho. Mr Tan was not compelled to seek a declaration under O 15 r 16 as a second best option. Conversely, a declaration was presumably Mr Tans preferred remedy.

The AG applied to strike out Mr Tans application. He argued, among other things, that Mr Tan lacked standing. On the assumption that the Karaha Bodas criteria applied, Mr Tans counsel argued that they were satisfied. Alternatively, it was submitted that a lower threshold of standing was applicable to cases involving constitutional rights.19

The Court first explained20 that Karaha Bodas imposed two21 standing requirements: (i) the declaration must relate to a right personal to the applicant and enforceable against the respondent; and (ii) the applicant must have a real interest in bringing the action. Crucially, the Court then answered the question it had left open in Eng Foong Ho. The Karaha Bodas criteria, as described, would apply to O 15 r 16 and O 53 applications, whether or not constitutional rights were involved.22

Strictly speaking, it was not necessary for the Court to answer the open question in Eng Foong Ho. Tan Eng Hong was concerned purely with a declaration under O 15 r 16 at the time of the application, no declaration could be brought under O 53. Unlike in Eng Foong Ho, Order 53 was not in issue. Mr Tans and the AGs arguments also seemed confined to the application of Karaha Bodas to constitutional cases under O 15 r 16 only.23

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Yet, it is sufficiently clear that the Court intended to unify the standing requirements. This is apparent from two aspects of its judgment. First, it held that the point of Eng Foong Ho was to unify the threshold of locus standi for cases brought under O 15 r 16 and cases brought under O 53 r 1. No distinction was drawn between the different remedies.24

Second, the Court adopted the reasoning in its earlier decision of Chan Hiang Leng Colin v Minister of Information and the Arts (CA) [1996] 1 SLR(R) 294. It interpreted Colin Chan (CA) as implicitly accepting that a violation of personal rights was necessary to establish standing.25 Colin Chan was not about an O 15 r 16 declaration the applicant had applied for one, but that part of his claim had been struck out.26 Instead, the reasoning in the High Court27 and Court of Appeal judgments in Colin Chan had been made solely in the context of a quashing order under O 53.28

For these reasons, although the facts of Tan Eng Hong involved only O 15 r 16, the substance and thrust of the judgment demonstrate that it was intended to apply to all applications for judicial review, whether under O 15 r 16 or O 53. Following Tan Eng Hong, it is submitted that the locus standi requirements for judicial review now are: an applicant will have to show: (i) a violation of a personal right; and (ii) a real interest in bringing the action.

Importantly, the Court also held29 that the mere existence of an allegedly unconstitutional law could possibly constitute a violation of a citizens constitutional rights. The requirement of a real interest would generally be satisfied once a violation of constitutional rights was established. Accordingly, the Court found that the existence of s 377A arguably infringed Mr Tans constitutional rights under art 12. Hence Mr Tan had locus standi.

Jeyaretnam Kenneth Andrew v Attorney-General

Two months after Tan Eng Hong, the High Court delivered its judgment in Jeyaretnam Kenneth Andrew v Attorney-General [2012] SGHC 210 (Jeyaretnam). On 20 April 2012, the Monetary Authority of Singapore (MAS) offered a loan to the International Monetary Fund (IMF). The applicant, Mr Jeyaretnam, contended that the offer of the loan was unconstitutional. He alleged that the offer of the loan had not satisfied the requirements set out in art 144 of the Constitution. Article 144 states that no guarantee or loan shall be given or raised without the approval of Parliament or the concurrence of the President.

Mr Jeyaretnam sought: (i) an order to quash the offer of the loan; (ii) an order to prohibit the making of any loan to the IMF unless it was in accordance with art 144; and (iii) declarations that a loan to the IMF had to satisfy art 144. Although not made explicit, it appeared that these remedies had been applied for under O 53.30

The Court refused leave to proceed with judicial review. The stated ratio was that art 144 applied only to the raising, and not the giving, of loans.31 Having decided that the claim failed on the substantive merits, the Court, for the sake of completeness,32 went on to discuss locus standi. It acknowledged in obiter dicta33 that Tan Eng Hong (which, it will be remembered, concerned only O 15 r 16 on the facts) had unified the standing requirements. After applying the Karaha Bodas criteria to the O 53 application,34 the Court held that Mr Jeyaretnam lacked locus standi.35

The crux of the Courts reasoning was that Mr Jeyaretnam had not been personally affected by the offer of the loan.36 Mr Jeyaretnam was relying upon a public right (art 144), whereas the constitutional right at stake in Eng Foong Ho and Tan Eng Hong (art 12) had been of a private nature.37 The Court explained that the difference between a private and public right was that the former was held and vindicated by a private individual, while the latter was held and vindicated by public authorities.38 The Court then went on to say that where public rights were involved, the applicant had to show special damage and a genuine private interest. Mr Jeyaretnam could show neither, hence he had no standing.39

In other words, while Mr Jeyaretnam could allege a violation of art 144 generally, he could not allege a violation of art 144 that was personal to him. This is probably because the impact or harm of a violation of art 144 will more usually be diffused among all Singaporeans: everybody was (allegedly) denied the procedural safeguards in art 144. Conversely, a violation of say the right to equality under art 12 will impact particularly on a specific person or class of persons: there was somebody who was denied equal protection. Since Mr Jeyaretnam could not show an infringement of a personal right, he failed the first limb of Karaha Bodas as explained in Tan Eng Hong.

Divergent Approaches?

It is useful to compare Jeyaretnam with the slightly earlier case of Vellama d/o Marie Muthu v Attorney-General [2012] 4 SLR 698 (Vellama).40 In Vellama, the Member of Parliament (MP) for Hougang resigned his seat. Ms Vellama was a Hougang resident who sought a mandatory order and declaration under O 53. She alleged that pursuant to art 49(1), the Government had to call a by-election within a reasonable time to fill the vacant seat.

Although the issue of Ms Vellamas standing was conceded by the AG, locus standi goes to jurisdiction and parties may not confer jurisdiction upon the Court where it has none.41 So the Court in Vellama must have tacitly agreed that the AGs concession was rightly made. But since art 49(1) confers a public right,42 that raises the question of why the Court and

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the AG in Vellama, unlike in Jeyaretnam, accepted that Ms Vellama had standing to enforce public rights.

The answer is perhaps that the alleged violation of art 49(1) was to some extent particularised to Ms Vellama in her capacity as a Hougang resident. She was personally affected in a way that Singaporean residents in another part of the island was not. Indeed, the AG might not have conceded the issue of standing had the application been brought by a non-Hougang resident. But this answer cannot satisfactorily reconcile Vellama with Jeyaretnam. To understand why, imagine a situation where one or two MPs from every constituency resigns.

In this imaginary scenario, Ms Vellama would not be personally affected vis--vis other Singaporeans. Her status as a Hougang resident would not grant her any particularity of harm or loss, since the rights of a resident in eg Aljunied or Ang Mo Kio would be equally affected. Therefore, a strict application of the personal interest or personally affected criterion would deprive Ms Vellama of standing in this imaginary situation. But can it be that a Hougang resident has standing if only that constituency is affected, but nobody has standing if the whole of Singapore

is concerned? One might say that the enforceability of the peoples right to an elected representative in Parliament should not depend on something as fortuitous as the number of by-elections involved.

Tweaking the facts of Jeyaretnam, say MAS had offered the IMF loan out of funds that had been earmarked for upgrading projects in Hougang. In such a case, it seems arguable that a Hougang resident would be personally affected compared to Singaporeans in other constituencies. So that Hougang Resident would have standing, but not Mr Jeyaretnam. Yet in both cases they are essentially seeking the same thing: to enforce art 144 of the Constitution. It is questionable whether a factor like the source of funds should affect a citizens ability to enforce his Constitutional rights under art 144.

Conclusion

Strong arguments of consistency and logic favoured unification of the standing requirements, which was finally achieved in Tan Eng Hong. Henceforth, the standing requirements for judicial review are: (i) a personal right; and (ii) a real interest. But as with any general rule, it is

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Notes

1 Locus standi and standing will be used interchangeably.

2 S.M. Thio, Locus Standi and Judicial Review (1971) pp 84-86.

3 [12] of the judgment. Although, see Thio, Chapter 4, where she writes at 103 that a better view is that the person had to be an aggrieved person, ie one with a peculiar personal grievance beyond that which affects the public at large.

4 Damien Cremean, MP Jain on Administrative Law of Malaysia and Singapore (4th ed, 2011) p 618.

5 Thio, 129-130.

6 Clive Lewis QC, Judicial Remedies in Public Law (4th ed, 2009) at 7-006.

7 See [15] and [19] of the judgment.

8 Although the nature of an O 53 r 1(1) declaration is contingent upon the principal application for prerogative relief: see Vellama d/o Marie Muthu v Attorney-General [2012] 4 SLR 698 at [33].

9 Yong Vui Kong v Attorney-General [2011] 2 SLR 1189 at [25].

10 [10] of the judgment.

11 See [8], [9], and [20] of the judgment.


inevitable that the Courts will eventually be called upon to consider exceptions to the rule.

The width of these exceptions will in turn depend on the purpose of judicial review. The requirement of a personal right is most consistent with judicial review as a vindication of private rights against unlawful acts by public bodies. But if judicial review also serves the purpose of upholding good governance,43 it follows that the requirement of a personal right could be more flexibly applied.

One tentative suggestion is to have a two-staged process. First, where it is clear that there is a class of persons whose personal rights have been affected, the applicant will be required to show a personal right, or that he is personally affected. Otherwise he would just be a nosy-parker. Second, but where no one can be said to be personally affected, the Court has the discretion to dispense with the requirement of a personal right.

In Robert Frosts well-worn poem, the poets persona imbues his choice of the road not taken with ironic significance. In 1978, the Singapore path diverged from its English counterpart. 34 years later, a similar destination was reached. Now there is a new fork in the road.

*B.A. (Oxon), B.C.L., Advocate and Solicitor

13 Alternatively, one could take the date of the Governments final confirmation that it would not reverse its decision: 20 June 2007.

14 At [18] of the judgment.

15 See Tan Eng Hong v Attorney-General [2012] 4 SLR 476 at [77].


17 [180]-[182] of the judgment.

18 One alternative might have been to seek an order prohibiting any further prosecution under s 377A. But that would only be possible with a corresponding declaration that s 377A was unconstitutional. It is also questionable whether the court ought to exercise its discretion to make the prohibiting order, since the Government had already said s 377A would not be enforced. Neither did Mr Tan need to quash a prosecution against him under s 377A the s 377A charge had already been amended to one under s 294(a).



21 The requirement of a real controversy was deemed to be relevant only to the exercise of the Courts discretion, and not to the issue of locus standi: [134]-[146].


23 As described at [66]-[68] of the judgment.

24 As suggested by the use of the word cases.


26 Colin Chan (CA) at [2].

27 It should be noted that the learned Judge was on the coram of Tan Eng Hong.

28 Most apparent from Colin Chan (HC) at [11]-[12].


30 Quashing and prohibiting orders are available only under O 53. The Judge appeared to apply the leave requirement to the declarations as well, which suggests they were applied for under O 53 r 1(1): leave is not required for a declaration under O 15 r 16. Also, see [39] of the judgment where it is implied that O 15 r 16 was not in issue.



33 Although strictly speaking, since the issue of locus standi goes towards jurisdiction, it was perhaps logically prior to the substantive merits.







40 Decided before Tan Eng Hong.

41 De Smiths Judicial Review (6th ed, 2007) at 2-009.

42 See [41] of Jeyaretnam.

43 Eg see Chan Sek Keong, Judicial Review From Angst to Empathy (2010) 22 SAcLJ at [6] to [7].

Tham Lijing* Tan Rajah & Cheah

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The Rubenstein case involves the typical scenario where an investor is introduced to an investment said to be equivalent to a bank deposit when it is not. The English Court of Appeal decision is an important one as it deals with intriguing related issues of causation, remoteness and scope of duty, and across the areas of breach of statutory duty, negligence and contract.

Causation, Remoteness, Scope of Duty and the Rubenstein Decision

Introduction

Oftentimes, based on the facts of a case, what justice requires is reasonably clear; yet, when the clever arguments of the defendants lawyers have to be dealt with, the Judge faces difficult, even insurmountable obstacles as he seeks the legal justification for the result which he knows (or feels) is the correct one. Rubenstein v HSBC1 is such a case.

The Rubenstein judgment is not easy to digest, for several reasons. First, the claims traversed statutory duty, tort of negligence and contract and, along with that, the perennial vexed question of whether different paths should lead to the same result. Second, the core of the decision involves related arguments and issues of causation, remoteness, foreseeability and scope of duty. Third, the reader would have been much assisted if the appeal Judge had been more systematic by segregating the discussion of the law from its application to the facts.

Facts

The facts of the case are quite straightforward. Rubenstein (R) and his wife had sold their home and were waiting to buy another and, in the meantime, wanted to put the money (1.25m) into a safe investment with a better yield than a fixed deposit. The time frame for the investment was a year.2

R dealt with HSBCs officer Marsden (M), a qualified independent financial adviser employed by the bank. Rs behest was crystal clear: We cant afford to accept any risk in the investment in the principal sum. M recommended an AIG EVRF (enhanced variable rate fund) and assured R that the product was the same as cash deposited in one of our accounts and that the only risk was the risk of default by the financial institution. He omitted to explain that the essential risk of the EVRF was that it was an investment in the market,3 and, therefore, subject to market fluctuations. In September 2005, R invested his money in the EVRF.

It should be noted that in relation to Rs query on fees, M had replied that the minimum fee (and no more) would be payable [a]s once the account open [sic] it is effectively an instant access account so it is unlikely that you will need further advice.

R was still invested in the fund in September 2008 when the run on AIG, triggered by the collapse of Lehman Brothers, occurred. He was eventually able to withdraw his money in November 2008 but received 180,000 less than he had invested. He sued for this loss under breach of statutory duty,4 negligence and contract.

Defendants Arguments

Many issues were raised by the defendants. This case comment focuses on the issues of causation, foreseeability and remoteness. The defendant argued that even if the bank (through M) had been in breach of its statutory duty, duty of care or contractual duty (in not recommending an appropriate investment), the loss was caused not by the breach but by the collapse of the markets in the assets held by the EVRF. The bank also argued the loss was not reasonably foreseeable and was too remote.

Trial Judges Decision

At first instance, the trial Judge, Judge Havelock-Allan QC, found that HSBC was negligent in breach of statutory duty and in breach of contract. The bank could have and should have recommended alternatives such as the SVRF (standard variable rate fund). However, he awarded only nominal damages. This was because the loss was unforeseeable and too remote, and was caused not by the banks breach but by the extraordinary and unprecedented financial turmoil following the collapse of Lehman Brothers.

Arguments on Appeal The plaintiff appealed as regards causation and remoteness while the defendant cross-appealed on the finding that the

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bank had breached its duties. HSBC, in resisting the appeal, argued that it had no duty beyond the investment horizon of one year projected by R (the loss occurred more than three years after the investment was made). It argued that whether viewed in terms of scope of duty (under the law of negligence) or reasonable contemplation of the parties (under contract law) or in terms of causation, foreseeability or remoteness, the bank should not be liable for the clients loss.

The Court of Appeal had to deal with many questions, the foremost of which were:1. Was the bank negligent?

2. Was the loss caused by the banks negligence?

3. Was the loss unforeseeable and too remote? and

4. Was the loss within the banks scope of duty?

The Rubenstein case is intriguing also because it raises two captious issues:1. What is the relationship between causation, remoteness

and the emergent concept of scope of duty?

2. Should the analysis of a claim from the different approaches of breach of statutory duty, negligence and contract lead to the same result (ie in favour of the plaintiff or defendant)?

Decision of Court of Appeal

The Court of Appeal allowed the appeal and held that there was causation and that the damage was foreseeable and not too remote. The Court dismissed the cross-appeal as the bank was clearly in breach of its obligations under statute, tort of negligence and contract.

For clarity of understanding, we shall consider the Courts treatment of the causation issue and the remoteness (and scope of duty) issue separately even though they were intertwined in Rix LJs judgment.

Causation

Many factors, some sequential, led to the losses incurred by the investors in the EVRF, namely:1. the collapse of Lehman Brothers;

2. financial turmoil;

3. collapse in the market value of the securities in which the EVRF was invested;

4. run on AIG;

5. loss of confidence by investors in the EVRF; and

6. excessive encashment by EVRF investors.

The Judge at first instance found5 that Rs loss was caused not by the banks breach but by the collapse of the markets, the run on AIG and the financial turmoil surrounding the collapse of Lehman Brothers. However, such a finding was a legal assessment and not a factual assessment; and the Court of Appeal was entitled to act upon its own understanding and analysis of the factual findings of the trial Court.6

Compared with the remoteness issue (which is discussed below), there was minimal discussion of the law on causation and instead the judgment focused on the application of causation principles to the facts. In Rix LJs assessment of the causation issue,7 the trial Judge had wrongly selected the run on AIG as the essential cause of the loss. In his view:8

what connected the erroneous advice and the loss was the combination of putting [R] into a fund which was subject to market losses while at the same time misleading him by telling him that the investment was the same as a cash deposit, when it is not. Therefore, the correct selection of the cause of [Rs] loss was the loss in value of the assets which the EVRF was invested.

In short, in Rix LJs opinion, the essential cause of Rs loss was not any of the connecting factors identified by the trial Judge but rather the loss of value of the underlying assets of the EVRF or, as better rephrased later in his judgment, the exposure to market risk.9

The correct sequential causal factors appear to be:1. Wrong advice by M;

2. Investment in the EVRF;

3. Exposure to market risk;

4. Loss in value of the EVRF; and

5. Rs loss.

The selection of the earlier set of factors, in Rix LJs view, was wrong. The reason why the selection was wrong, the writer suggests, is that the factors were irrelevant. The exposure to market risk, which R did not want and had expressly intimated to M, caused the loss; the details of factors and events which actually unfolded as a result of this unwanted market risk were irrelevant to R and his claim for the loss.10 These causes and events would not have affected R if M had introduced him to an investment which, as M had purported in relation to the EVRF, was the same as cash deposited with HSBC.

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In contrast, R was prepared to bear institutional risk (Rix LJ used the term default risk the risk of the failure of the bank with whom the money is deposited or, in this case, AIG Life, the issuer of the EVRF). If events had turned out differently and AIG and AIG Life had collapsed (which indeed they would have if the US government had not intervened and saved AIG), then the causation argument would have availed the bank because even if M had arranged for what was in effect a cash deposit with AIG Life, loss would still have occurred.11

He continued:12

If such an investment goes wrong, there will nearly always be other causes (bad management, bad markets, fraud, political change etc): but it will be an exercise in legal judgment to decide whether some change in markets is so extraneous to the validity of the investment advice as to absolve the adviser for failing to carry out his duty or duties on the basis that the result was not within the scope of those duties. (Emphasis added).

Although his Honour was speaking in the context of the scope of duty issue, the essence of the discussion was on causation that even if an adviser was in breach of his duty, he may not be held liable if the loss was caused by an extraneous event or, to use the familiar causation terminology, a novus actus interveniens. It is implicit in Rix LJs judgment that he thought none of the factors of financial turmoil, run on AIG or collapse of secondary markets can be said to be extraneous to the banks wrong advice in recommending the EVRF. On the contrary, they flowed from it.

Comment

In the writers view, the Court of Appeal was correct in reversing the lower Courts decision on the point of causation. If one were to apply the established causative principle, it is clear that but-for Ms exposing R to market risk, the loss would not have taken place. As R did not want market risk, it is irrelevant how the market risk actualised.

Whilst on causation, it is observed that Rix LJ employed the expression material contribution a concept originating from medical indeterminacy scenarios in discussing causation:

An investment adviser who as adviser recommends a particular investment may well be responsible if some flaw in the investment turns out materially to contribute to some investment loss.13

However, material contribution is a controversial concept and it is highly debateable whether it should be applied outside of medical indeterminacy cases.14

Remoteness and Scope of Duty: The Law

On appeal, the bank argued that the loss was not foreseeable and, therefore, too remote. It also argued that the loss was not within the banks scope of duty. A significant portion of the Court of Appeals judgment deals with the issue of remoteness.

Rix LJ perceived the law, as it applied to the current scenario, as having three perspectives:1. The traditional or classic principle that only the type of

loss needs to be foreseeable:

2. The need for balancing the expectations of the defendant with those of the plaintiff; and

3. The concept of scope of duty.

As regards the traditional principle, Rix LJ referred15 to the House of Lords decision of Hughes v Lord Advocate16 for the established tort principle that while the type of loss needs to be foreseeable, the extent of loss or the manner of harm need not be. On the latter point, Rix LJ noted, approvingly, Lord Reids words17 in Hughes that an unforeseeable mechanism of injury does not make the injury too remote.

Rix LJ then referred to contract law authorities, in particular The Achilleas,18 where Lord Hoffmann spoke of the generally accepted principle that if losses of that type are foreseeable, damages will include compensation for those losses, however large, if the loss of that type or kind fell within one or other of the rules in Hadley v Baxendale. This principle, Lord Hoffmann opined,19 was generally an inclusive principle if losses are of that type are foreseeable, damages will include compensation for the losses, however large. This is similar to the tort position mentioned above.

But, as Lord Hoffmann continued to explain in The Achilleas,20 the general principle may also be exclusive a party may not be liable for foreseeable losses because they are not of a type or kind for which he can be treated as having assumed responsibility. He then remarked that while the question of whether the damage was foreseeable is a question of fact, the question of whether a given type of loss was one which a party assumed contractual responsibility is a question of law.

Rix LJ next referred21 to the scope of duty concept or approach laid down by Lord Hoffmann in SAAMCO v York Montague:22

The scope of the duty, in the sense of the consequences for which the [defendant] is responsible, is that which the law regards as best giving effect to the express obligations assumed by the [defendant]: neither cutting them down so that the [plaintiff] obtains less than he was reasonably entitled to expect, nor extending them so as

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to impose on the [defendant] a liability greater than he could reasonably have thought he was undertaking.

Let us pause for a moment to examine the above passage, for it says much. First, a defendant is liable only for losses which the law regards as being within his scope of duty. Second, this scope of duty is arrived at through delicate balancing of the expectations and perspectives of the defendant against those of the plaintiff. Third, it is the reasonable expectations of the parties that are to be considered.

Rix LJ then considered Lord Hoffmanns illustration of the mountaineers knee. The scenario is that a mountaineer consults a doctor and is negligently advised that his knee is fit for a climb. The mountaineer goes for the climb and is injured in an accident which has nothing to do with his knee. As a matter of causation, even though the mountaineer would not have gone climbing and thus would have avoided the injury, the doctors negligence cannot be held responsible for the injury as it would have occurred even if the advice had been correct. The injury, which would have happened even if the doctor had not been negligent, is outside the doctors scope of duty.

What appears to be implied but not articulated here is that there must be a logical and not just sequential connection between the defendants breach and the plaintiffs loss. Sequentially, the doctors negligent advice caused, or rather resulted in, the mountaineers injury. As a matter of logic and legal responsibility, the advice is not connected to injury.

In the course of his judgment, Rix LJ also considered authorities on the subject of responsibility and foreseeability, citing with approval, the rhetorical words of Hobhouse LJ in Brown v KMR Services:23

If it was the duty of the defendants to protect the plaintiff from the losses of the kind which he subsequently suffers, how can it be just or appropriate to say that, because those losses are larger than either party anticipated, the plaintiff must bear those losses not the defendant?

and, in similar vein, Toulson LJs comment in Supershield v Siemens Building Technologies:24

If those responsible [for multiple protection systems] fail to do [as they ought] and the unlikely happens, it should be no answer for one of them to say that the occurrence was unlikely, when it was that partys responsibility to see that it did not occur.

Herein is a principle that if it is the defendants duty to protect the plaintiff from a kind of loss, the defendant will be liable even if the amount is larger than anticipated or the occurrence of harm is unlikely. This closely resembles the established tort principle mentioned earlier that the type of

loss must be foreseeable but the extent or manner of injury need not be.

Remoteness and Scope of Duty: Application to the Facts

Applying the principles to the facts of the case, Rix LJ first remarked25 that the clear statutory purpose of the COB (Conduct of Business) regime pursuant to the Financial Services & Markets Act was to give carefully balanced protection to the consumer. The regime was designed to ensure that the investment adviser understands his client and his client understands risk. Noting how M understood neither the client nor the product and how through omission and commission he misled him into thinking that he was investing in something that was the same as cash, Rix LJ commented26 that this situation was not a promising context in which to find that a loss suffered as a result was too remote and that it was wholly unlike the case of the mountaineers knee. (The reason the case at hand was different from Lord Hoffmanns mountaineers knee illustration was given earlier in Rix LJs judgment far from being unconnected to the loss suffered, the banks breach caused the loss.)

The learned Judge then dealt with the banks three arguments in support of the trial Judges conclusion that the loss was too remote.

First, on the argument that the loss was caused by unforeseeable events and, therefore, too remote, Rix LJ was of the view that the loss was caused by the collapse of the market securities in which the EVRF was invested and that the resulting loss was both foreseeable and foreseen.27 Further, as it was the banks duty to protect R from market risk, the losses cannot be considered as remote even if the incidence was unexpected. Any loss which is within the defendants scope of duty cannot be said to be remote.

Second, on the argument that the trial Judge had found that at the time of the investment the EVRF would have been regarded as without risk, Rix LJ responded28 with the interesting allegory that nearly all the greatest losses come out of a cloudless sky. The implication appears to be that so long as loss is theoretically possible, it matters not that the likelihood of its occurrence is extremely low.

Third, the Judge considered the timescale argument,29 which he acknowledged was a powerful submission,30 and came to the conclusion, on the facts, that the timescale was not a year but an indefinite period of about a year and that a period of three years was not significantly different from the indefinite period. The Judge was particularly influenced by the fact that M had told R that no further advice was needed since once the account was opened R would have instant access to a cash deposit account. Thus, the loss occurring more than a year after the account was opened was within the banks scope of duty.

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(Observe that there were really two applications of the concept of scope of duty in the Rubenstein case the banks duty to protect R from market risk and the duration of the banks duty.) Applying the various principles to the case at hand, Rix LJ concluded:

Where the obligation of a defendant is not merely to avoid injuring the claimant but to protect him from the very kind of misfortune which has come about, it is not helpful to make fine distinctions between foreseeable events which are unusual, most unusual, or of negligible account.

In other words, in such a scenario, the foreseeability of the actual events is irrelevant.

He continued:

Whether the test of remoteness is expressed in the classic terms or has to reflect the sense of balance to which Lord Hoffmann referred to in SAAMCO or has to take account of the manner in which the scope of

duty may extend responsibility for even unusual events (see Supershield), it should not be said that the loss which [R] suffered is to be regarded as too remote.

In simple terms, Rs loss was not too remote as it was:1. a foreseeable type of loss;

2. in accordance with the parties expectations; and

3. within the banks scope of duty, especially since it was the banks duty to protect R from that very risk of loss.

Comments

The somewhat complicated legal framework which emerges from Rix LJs analysis appears to be that whether in tort (of breach of statutory duty or negligence) or in contract, a claim for losses will not be too remote if the type of loss was foreseeable and either the defendant had assumed responsibility for the loss or the loss was within the defendants scope of duty. Where these requirements are satisfied, it matters not whether the actual loss is larger than expected, or the manner of occurrence is not anticipated or the event causing the loss is unforeseeable.

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In ascertaining assumption of responsibility, the Court carefully balances the reasonable expectations of the defendant against the reasonable expectations of the plaintiff. As for scope, a particular type of loss is within the scope of a defendants duty if it was his responsibility to protect the plaintiff against the very harm or danger.

This framework appears to be a sensible one. The upshot of it is that foreseeability of the type of loss alone is insufficient to satisfy the remoteness requirement. The type of loss must either be one for which the defendant had assumed responsibility or be within the defendants scope of duty. This is a significant development. Whilst it gives Judges additional tools to justify a desired outcome, it is also a source of greater confusion in the law.

And there is another thought are assumption of responsibility and scope of the duty the same thing? In essence, it would appear that they are.

Scope of Duty in the Tort of Negligence

The increasing importance of the concept of scope of duty raises the intriguing question of whether the concept is relevant only to the fourth element of the tort of negligence (ie damage which is not too remote).

Arguably, scope of duty relates as well to the first element of duty of care. If the loss is outside the scope of duty, one can say (as with, for example, claims for grief and sorrow being not claimable as they are not recognised psychiatric illnesses) that the defendant did not owe the plaintiff any duty as regards the type of loss being claimed.

Scope is also relevant for the second element breach of duty. Indeed, if the loss is outside the scope of duty of care, surely there cannot be any actionable breach.

Likewise, scope is also relevant to causation because if there is no breach then there cannot be causation.

Finally, it seems that scope of duty is the complement to consent. On the facts of Rubenstein, we can say that market risk was within the banks scope of duty while default/institutional risk was within the clients ambit of consent. If the events in Rubenstein were changed and that AIG Life had collapsed, then the bank would probably not have been liable since institutional risk was not within the banks scope of duty but rather within the clients ambit of consent.

It remains to be seen whether future Courts and Judges will adopt such lines of reasoning and whether this will add to or reduce the existing complexities in the law of negligence. The former seems more likely.

Different Paths to Same Result?

As mentioned at the start, the case raises the difficult question of whether the legal enquiry from different

branches of law (statutory duty, negligence and contract) should lead to the same result. Rix LJ does not engage in the substantive or doctrinal arguments on this issue but he regards the same general principles as being applicable to the contexts of contract, tort and statutory duty.31

He also cites32 with approval Lord Hoffmanns position stated in SAAMCO that:

in a case of statutory duty, the question as to scope of duty is to be answered by reference to the statute itself, and in such a context the position in negligence and in contract will fall in behind the statutorily discerned purpose.

Rix LJ, however, did entertain33 the possibility that, absent the statutory duty context, the tort and contract approaches might lead to separate (or different) results.

These tentative pointers aside, the interface of different major areas of law remains largely unexplored territory and awaits further judicial exposition.

Other Issues

The Rubenstein case, in particular the lower Court decision, also touches on a number of issues which may interest readers in the field of financial advisers law, including:1. The distinction betwe

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