Cases

BANKING
Bok Chee Seng Construction Pte Ltd v Development Bank of Singapore Ltd [2002] 2 SLR 61

High Court - District Court Appeal No 600012 of 2001
Judith Prakash J
9, 26 October, 26, 30 November 2001, 22 February 2002

Cheques - Mandate to pay out on cheques - New mandate affected by court order which rescinded resolution effecting mandate - Impact of court order on third parties - Bank relying on void mandate in honouring customer's cheques - Bank's liability for wrongful debit of customer's account in paying out on cheques

Tan Cheng Yew (Tan JinHwee, Eunice & Lim ChooEng) for the appellants.
Deborah Barker SC and Chan Kia Pheng (Khattar Wong & Partners) for the respondents.

Bok Chee Seng Construction Pte Ltd ('BCPL') brought an action in the district court against their bankers, the Development Bank of Singapore Ltd ('DBS'). They sought to recover sums totalling $186,938.38 on the ground that DBS had wrongfully debited the sums from their current account. The judge below had concluded that BCPL was bound by the cheques honoured by DBS, who were entitled to rely on the new mandate given by BCPL on 23 July 1997. Whilst there was a court order of 11 December 1998 obtained pursuant to an action for relief under s 216 of the Companies Act (Cap 50, 1994 Ed), which rescinded the resolution of 23 July 1997, the court order only affected the parties to that action and not third parties generally. The judge dismissed the claim in light of the indoor management rule and the conclusive evidence clause in favour of DBS. BCPL appealed against this decision on the ground, inter alia, that the narrowness of the defence pleaded by DBS precluded them from relying on the indoor management rule or any other basis to justify their acting in accordance with the new mandate.

Held, allowing the appeal:
The main plank of the defence of DBS was that the new mandate issued by BCPL was valid and that the order of court of 11 December 1998 operated solely between the parties to the action and did not affect the validity of the new mandate vis-à-vis DBS. However, the effect of the court order was that there was no valid resolution effecting the new mandate. The new mandate was consequently void ab initio.

The court order affected third parties. This did not mean that third parties who had acted in reliance on the void mandate were automatically liable for having done so. It did, however, mean that such third parties would have to establish a legal reason why they should not be held liable.

On the pleadings as they stood, DBS were not entitled to submit (and the court was not entitled to hold) that they could be exonerated from liability on the basis of the conclusive evidence clause or the indoor management rule.

BETTING, GAMING AND LOTTERY
Star City Pty Ltd (fka Sydney Harbour Casino Pty Ltd) v Tan Hong Woon [2002] 2 SLR 22

Court of Appeal - Civil Appeal No 600093 of 2001
Yong Pung How CJ, Chao Hick Tin JA and Lai Kew Chai J
21 January, 25 February 2002

Gaming - Gaming contract made abroad - Whether enforceable - Civil Law Act (Cap 43, 1999 Ed) s 5

See CONFLICT OF LAWS.

CIVIL PROCEDURE
Bok Chee Seng Construction Pte Ltd v Development Bank of Singapore Ltd
[2002] 2 SLR 61

High Court - District Court Appeal No 600012 of 2001
Judith Prakash J
9, 26 October, 26, 30 November 2001, 22 February 2002

Pleadings - Defence - Failure to plead facts in order to invoke specific defences - Effect on defence case

See BANKING.

CONFLICT OF LAWS
Star City Pty Ltd (fka Sydney Harbour Casino Pty Ltd) v Tan Hong Woon [2002] 2 SLR 22

Court of Appeal - Civil Appeal No 600093 of 2001
Yong Pung How CJ, Chao Hick Tin JA and Lai Kew Chai J
21 January, 25 February 2002

Gaming transaction - Characterisation of transaction - Action to recover sum of money as unpaid loans made to patron of casino to enable him to gamble - Whether money sought to be recovered is 'a sum of money won upon a wager' or a loan - Whether lex fori or proper law of contract to be applied - Whether recovery repugnant to local public policy - Relevant public policy considerations

Foo Maw Shen, Ng Wai Hong and Deborah Koh (Ang & Partners) for the appellant.
Jason Lim and Tan Kay Khai (Michael Khoo & Partners) for the respondent.

The appellant, Star City Pty Ltd operates a licensed casino known as Star City Casino. Between 26 March and 28 March 1998, the respondent, Mr Tan, signed and handed over to Star City five house cheques, each for the sum of AU$50,000. These house cheques were exchanged for chips for gaming at the tables. It was a term of this facility that the agreement between the parties was to be governed by the laws of New South Wales. Mr Tan lost the entire sum of AU$250,000. When these house cheques were presented to his bank for payment, all five were dishonoured for lack of sufficient funds in his bank account. Subsequently Mr Tan made good to the casino AU$55,160, leaving the sum of AU$194,840 unpaid. The appellant sought to recover this sum as unpaid loans made to the respondent to enable him to gamble at their casino.

The trial judge disallowed the claim on the basis that this was actually an action to recover a sum of money won upon a wager within s 5(2) of the Civil Law Act (Cap 43, 1999 Ed). On appeal, Star City argued that the trial judge having accepted that the proper law of the contract between the parties was New South Wales law and that according to this law, a loan had been advanced by Star City to Mr Tan, cannot subsequently re-apply the lex fori to re-characterise the moneys as 'a sum of money won upon a wager'. Star City also argued that s 5(2) of the Civil Law Act is a substantive provision and does not form part of the lex fori precluding an action to recover the outstanding sum of AU$194,840. Alternatively, Star City claimed upon the dishonoured house cheques which it argued was unaffected by s 5(2) of the Civil Law Act.

Held, dismissing the appeal:
In every case, to determine whether a provision is substantive or procedural, one must look at the effect and purpose of that provision. If the provision regulates proceedings rather than affects the existence of a legal right, it is a procedural provision. A distinction is drawn between the essential validity of a right and its enforceability. It is clear that the interpretation of s 5(2) taken by the House of Lords in Hill v William Hill (Park Lane) [1949] AC 530; [1949] 2 All ER 452 does not per se render it a substantive provision. The case was not concerned with the nature of s 5(2) but rather the scope of its application. Although s 5(2) now renders unenforceable all actions to recover sums won upon wagers, it does not nullify such other actions not falling within s 5(1). Furthermore the bulk of authority is also that s 5(2) is procedural. Therefore our courts must apply s 5(2) as part of the lex fori; lex fori ad litis ordinationa.

It is clear that recovery turns upon the characterisation of the transaction in question. An action on the loan itself will succeed if the loan is valid by its governing law. This is in contradistinction to the other principle contained within s 5 of the Civil Law Act that a wagering contract which is valid by its governing law is valid in Singapore, but no action lies in Singapore to recover any sum of money won on such a contract.

The cases as a whole do not clearly reveal the characterisation process of the courts when applying the procedural laws of the forum. The issue must ultimately depend upon the public policy of Singapore. It is an established principle of private international law that the courts of the forum will not enforce a foreign cause of action that is contrary to local public policy.

In order to determine whether the enforcement of a foreign cause of action would be contrary to forum policy, the court must necessarily apply its mind and the lex fori to determine its true substance. Otherwise, the forum would no longer be master of its own home and local public policy concerns easily circumvented by 'forum-shopping'. The clear and peremptory words of s 5 of the Civil Law Act also make it clear that s 5 is intended by legislature to be a forum mandatory provision which parties cannot avoid by contracting out. Putting the two principles together, it follows that the courts of the forum are entitled to re-characterise a transaction according to the law and logic of the lex fori.

There is no general principle of public policy in Singapore, against the recovery of money lent for the purposes of gambling abroad, so long if the transaction is a genuine loan which is valid and enforceable according to that foreign law. However, it is contrary to local public policy for the courts to be used by casinos to enforce gambling debts disguised in the 'form' of loans. Valuable court time and resources that can be better used elsewhere are wasted on the recovery of such unmeritorious claims. The courts of justice must remain out of bounds to claims for moneys won upon wagers, however cleverly or covertly disguised; Star Cruise Services v Overseas Union Bank [1999] 3 SLR 412 followed.

The chips placed on the gaming tables represent the moneys paid in advance by the gamblers to the casino by the cheques, although the actual transfer of funds will come later. Therefore the chips lost at the tables represented the gambling losses of the patron. Although cheques are to remain uncashed and can be redeemed upon 'repayment' by gamblers within a period of ten days, this is only a deferred form of payment to give gamblers time to ensure that they have sufficient funds to repay their gambling losses in their bank accounts. The cheque cashing facility provided by Star City to their patrons cannot be genuine loans because the facility merely enables them to gamble on credit and is not for any other purpose.

CONTRACT
Star City Pty Ltd (fka Sydney Harbour Casino Pty Ltd) v Tan Hong Woon [2002] 2 SLR 22

Court of Appeal - Civil Appeal No 600093 of 2001
Yong Pung How CJ, Chao Hick Tin JA and Lai Kew Chai J
21 January, 25 February 2002

Gaming contract - Gaming contract made abroad - Whether valid - Whether enforceable - Civil Law Act (Cap 43, 1999 Ed) s 5(1) & (2)

See CONFLICT OF LAWS.

LABOUR LAW
Lee Keng Hiong t/a William Trade & Tran-Services v Ramlan bin Haron [2002] 2 SLR 52

High Court - District Court Appeal No 600017 of 2001
Woo Bih Li JC
21 November 2001, 22 February 2002

Workmen's compensation - Claim for compensation - Respondent's liability to pay compensation - Claimant employed by third party - Whether third party an employee or independent contractor of respondent at material time - Relevant factors to be considered - Whether respondent absolved from liability if claimant employed by independent contractor - Whether claimant's injuries arose out of and in course of employment - Workmen's Compensation Act (Cap 354, 1998 Ed) ss 3(1), (6) & 17(1)

Workmen's compensation - Employer's liability for compensation - Whether claimant employed by respondent - Whether claimant's injuries arose out of and in course of employment - Statutory presumption that injury arising in course of employment also arose out of that employment - Workmen's Compensation Act (Cap 354, 1998 Ed)
s 3(1) & (6)

Boon Khoon Lim and Dora Boon (Dora Boon & Co) for the appellant.
Suchitra Ragupathy (Palakrishnan & Partners) for the respondent.

The respondent was the sole proprietor of William Trade & Tran-Services ('WTTS'). WTTS was engaged by McDermott South East Asia Pte Ltd to clear three pieces of cargo from the vessel MV Ocean Ady by unloading them onto a barge at the Pasir Panjang Wharves. The respondent instructed his operations manager to give the job to Putiyan who in turn engaged three workers for the job. The claimant was one of the workers who was employed to unload the cargo by releasing and unshackling the cargo.

The claimant was injured when he was trying to unshackle a piece of cargo. He had climbed up a ladder to do the unshackling after which he jumped down to avoid the shackle which was on a swinging cable. He landed on his feet, slipped, fell backwards and injured his head when it hit the floor of the barge. He was left severely incapacitated. The respondent denied liability but did not dispute quantum which was fixed at S$134,000.

Held, dismissing the appeal:
Putiyan employed the claimant. Putiyan, himself, was an employee of WTTS and not an independent contractor. The relevant factors showing that Putiyan was WTTS's employee were that: WTTS would dictate how many workers Putiyan was to employ and the workers' salaries; both Putiyan and WTTS treated their relationship as one of employee- employer and he was often described as being in WTTS's employ; he did not invoice WTTS for services rendered but was paid hourly; he worked for WTTS and another company controlled by the respondent and his wife exclusively; and he had free access to the premises and stationery of WTTS.

Even if Putiyan was an independent contractor, WTTS would still be liable for the claimant's injury pursuant to s 17(1) of the Workmen's Compensation Act (Cap 354, 1998 Ed) which makes a person liable to pay any workman employed in the execution of that person's work pursuant to a contract, any compensation if he is liable to pay that workman had the workman been immediately employed by him.

The claimant was injured by an accident and had not inflicted the injuries on himself. The injury arose in the course of his employment. In the absence of any evidence to the contrary, the natural presumption would be that the injury also arose out of that employment. This presumption has statutory force under s 3(6) of the Workmen's Compensation Act.

ROAD TRAFFIC
Sivakumar s/o Rajoo v Public Prosecutor [2002] 2 SLR 73

High Court - Magistrate's Appeal No 327 of 2001
Yong Pung How CJ
31 January, 20 February 2002

Sentencing - Driving while under influence of drink - Appeal against disqualification order - Special reasons - Whether special reasons existed for court to refrain from making disqualification order - Whether court should exercise discretion in favour of appellant - Factors to be considered - Road Traffic Act (Cap 276, 1997 Ed)
s 67(1)(b) & (2)

Sentencing - Disqualification from holding or obtaining licence - Special reasons - Driving while under influence of drink and speeding - Motivation leading to commission of offence - Lives at stake - Whether special reasons existed for court to refrain from making disqualification order - Factors to be considered - Road Traffic Act (Cap 276, 1997Ed) s 67(1)(b) & (2)

Rakesh Vasu (Gomez & Vasu) for the appellant.
Janet Wang (Deputy Public Prosecutor) for the respondent.

Faced with marital problems, the appellant consumed some beer and became inebriated. Soon after, a close friend called him and told him that she could no longer deal with her problems and was going to take the lives of her children and end her own life. She hung up the telephone abruptly. Unable to contact her after that, the appellant drove to her house. However, he was stopped by the Traffic Police for speeding at 133kmph in a 60kmph zone. He was later ascertained to have driven while under the influence of drink.

At the district court, the appellant pleaded guilty and was convicted of one charge of drink driving and one charge of speeding. The judge held that there were no extenuating or pressing circumstances. He noted that the appellant had not considered other forms of transport, or attempted to resolve the emergency by other means. He rejected the appellant's argument for a finding of 'special reasons' pursuant to s 67(2) of the Road Traffic Act (Cap 276, 1997 Ed) ('the Act'). Further, the judge held that even if 'special reasons' were established, he would not have exercised his discretion in favour of the appellant.

On the first charge, the appellant was fined $2,000, and disqualified from holding or obtaining a driving licence for all classes of vehicles for 12 months; on the second charge he was fined $800, and disqualified from holding or obtaining a driving licence for all classes of vehicles for three months.

The appellant appealed against the first order of disqualification contending that the judge erred in holding that his driving while under the influence of drink in the attempt to save his friend and her children did not amount to extenuating or pressing circumstances which constituted 'special reasons' for the purposes of s 67(2) of the Act. The appellant also contended that the judge erred in holding that even if there were 'special reasons', he would not have exercised his discretion not to disqualify him.

Held, dismissing the appeal:
For the purposes of s 67(2) of the Act, a 'special reason' comprised a mitigating or extenuating circumstance, not amounting in law to a defence to the charge, yet directly connected with the commission of the offence and one which the court ought properly to take into consideration when imposing punishment; R v Crossan [1939] NI 106 followed.

Before an emergency is capable of amounting to a 'special reason' under s 67(2) of the Act, the offender must show that there was no alternative but for him to drive, and that he had explored every reasonable alternative before driving.

Section 67(2) of the Act does not require a special relationship nor does it require an imminent threat of physical harm to an offender's kin.

Even if 'special reasons' were established, it did not automatically mean that the appellant would not be disqualified. The judge must go through a separate process of considering whether the discretion must be exercised in favour of the offender; PP v Balasubramaniam [1992] 1 SLR 822 followed.

The limited discretion not to disqualify can only be made in very exceptional circumstances, having regard to the special circumstances as well as to the whole of the circumstances surrounding the commission of the offence. This included the manner in which the defendant drove, the alcoholic content in his blood and whether he committed other offences such as speeding; Taylor v Rajan [1974] RTR 304 followed.

Regardless of whether 'special reasons' were found, in considering the appropriate period of disqualification, the court is entitled to have regard to the motivation leading to the commission of the drink driving offence.

WORDS AND PHRASES
Sivakumar s/o Rajoo v Public Prosecutor [2002] 2 SLR 73

High Court - Magistrate's Appeal No 327 of 2001
Yong Pung How CJ
31 January, 20 February 2002

'Special reasons' - Road Traffic Act (Cap 276, 1997 Ed) s 67(2)

See ROAD TRAFFIC.