The Class Actions Law Review: Singapore

Introduction to the class actions framework

Representative proceedings in Singapore may be brought under Order 15 Rule 12 of the Rules of Court (R 5, Cap 322, 2014 Rev Ed) (ROC). This general process allows a large number of people to be (indirectly) involved in the litigation.

Under this Rule, one or more persons of a 'class' of people may commence or defend a claim on behalf of themselves and other members of that 'class' as long as the 'common interest' in the said proceeding can be established to the court's satisfaction. It is thus appropriate to commence representative actions where a large number of people are affected or injured by the same defendant or defendants in the same manner.

Representative actions, like any other civil claim, may be heard by the state courts or the High Court (HC) of Singapore. Although these two courts have original civil jurisdiction in Singapore,2 claims of S$250,000 and above must be commenced in the HC.3 Accordingly, practically speaking, due to the multiplicity of claimants and the likelihood of the aggregate claim sum exceeding S$250,000, a class action is likely to be commenced in and heard by the HC.

The year in review

i Court decisions

In Singapore, representative proceedings are not common.

Since 2000, there have only been two reported decisions that involve representation actions. One was commenced in 2002 (Tan Chin Seng and Others v. Raffles Town Club Pte Ltd [2002] SGHC 278 (the RTC Action)) and the other in 2008 (Koh Chong Chiah and others v. Treasure Resort Pte Ltd and another [2013] 1 SLR 1069 (TR (HC))).4 Both actions were commenced in the HC.

Interestingly, both lawsuits involved (separate) social clubs and allegations of misrepresentation and breach of contract by the members of the clubs against their clubs. TR (HC) reached the Singapore Court of Appeal (CA), the highest court in the land, and the CA's decision is reported in Koh Chong Chiah and others v. Treasure Resort Pte Ltd [2013] 4 SLR 1204 (TR (CA)).

Further, in Syed Nomani v. Chong Yeow Peh [2017] 4 SLR 1064 (Syed Nomani), the claimant attempted to appoint the defendant as a representative defendant for 11 other individuals despite having only commenced an action against the defendant. The claimant's application, and his appeal against the decision at first instance, were dismissed by the HC.

ii Legislation

There is no new legislation or change announced for the future that may directly impact representative actions.

In 2017, Singapore abolished the torts of maintenance and champerty, save for cases in which a contract is found to be contrary to public policy or illegal.5 Presently, Singapore allows third-party commercial funders to fund international arbitration proceedings.6 There are also announcements to extend such third-party funding to domestic arbitration, certain proceedings in the Singapore International Commercial Court and mediations associated with these proceedings.7 It is yet to be seen whether third-party funding would be allowed for representative actions.

Procedure

i Types of action available

Singapore law does not restrict the use of representative proceedings to certain forms of action or particular areas of law. Indeed, there are certain statutory provisions, such as the Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed) (the BMSMA), which expressly allows for representative actions.8

Generally speaking, there is no special procedure to commence a representative action, save that the prospective claimants must satisfy Order 15 Rule 12(1) of the ROC, which states as follows:

Where numerous persons have the same interest in any proceedings, not being such proceedings as are mentioned in Rule 13, the proceedings may be begun, and, unless the Court otherwise orders, continued, by or against any one or more of them as representing all or as representing all except one or more of them.

The critical element of this rule is that all the representative claimants and the represented persons should 'have the same interest' in the proceedings. The Singapore courts have also held that any representative proceedings should lead to procedural efficiency, so as to outweigh any prejudice that may be caused to any potential defendants.9

To this end, Order 15 Rule 12(1) of the ROC only applies to cases where the persons having the same cause in the proceedings are 'numerous'. However, legislation does not stipulate a minimum number that constitutes numerous, and it appears that this matter is up to the discretion of the court. For example, five persons will not be regarded as numerous under this rule.10 Even 11 does not appear to be sufficient. In Syed Nomani, in declining the application for representative proceedings, the HC observed that there were only 11 potential represented defendants such that there would not be any significant enhancement in terms of procedural or administrative efficiency.11 The court went on to observe that the procedural benefits of representative proceedings would be far more significant in cases such as the TR Action which involved hundreds of represented persons.12

The commencement of any representative actions is also subject to the applicable limitation periods as set out in the Limitation Act (Cap 163, 1996 Rev Ed) (the Limitation Act).

Generally speaking, most actions, such as those founded on contract/tort or the enforcement of foreign judgments/arbitral awards, have a limitation period of six years, which begins from the date on which the cause of action accrued.13 There are several exceptions to the aforesaid six-year limitation period rule as follows.

  1. In the case of an action based upon allegations of fraud by the defendant and/or his agent, or if the right of action was so concealed by the fraud of such aforesaid person, or the action is for relief from the consequence of a mistake, the limitation period does not begin to run until the claimant has discovered the fraud or the mistake, or could with reasonable diligence have discovered the same.14
  2. In the case of an action based on negligence, nuisance or breach of duty, the claimant may commence such action even after the six-year limitation period had expired, provided he or she can prove that it was no more than three years from the date he or she first acquired the requisite knowledge and the right to bring an action for damages in respect of the relevant damage.15
  3. The overriding time limit in respect of actions based on negligence, nuisance or breach of duty is 15 years from the date on which there occurred any act or omission that is alleged to constitute negligence, nuisance or breach of duty, or to which the injury in respect of which damages are claimed is alleged to be attributable (in part or in whole). This overriding time limit bars the right of such actions notwithstanding that cause of action has not yet accrued before the end of the limitation period.16

ii Commencing proceedings

A person or persons claiming to represent numerous other persons having the same interest may begin an action as the representative claimant or claimants. Claimants do not require the leave of, or an order from, the court to do so. Further, it is not necessary to obtain the consent of those whom they purport to represent.17

After an action has been commenced, the defendant or defendants may apply to the court to discontinue the lawsuit on the ground that the claimants did not have the requisite 'same interest' so as to maintain the proceedings as a representative action.18

In TR (CA), one of the main issues was whether the suit should be allowed to proceed as a representative action. Surveying leading decisions in the Commonwealth,19 the CA held that Order 15 Rule 12 of the ROC operates in two stages:

  1. the jurisdictional stage: This is the threshold requirement that the claimants must cross. The claimants must prove to the court's satisfaction that all claimants have the same interest in the proceedings (also known as the same interest requirement). It is only after this 'same interest' requirement is met that the inquiry moves to the next stage; and
  2. the discretionary stage: At this stage, the court considers whether to exercise its discretion to discontinue the proceedings as a representative action if the overall circumstances (i.e., the downsides outweigh the advantages) of the case justify such a discontinuance.20

Further, the applicable principles of law concerning the 'same interest' requirement21 are as follows:

  1. the class of represented persons must be capable of clear definition, and the members of the class of represented persons must be identified by an objective criterion that bears a rational relationship to the common issues being asserted;
  2. the proposed representative claimants must adequately represent the interests of the class of represented persons, and must prosecute the interests of the entire class as a whole;
  3. there must be significant issues of fact or law common to all the claimants (i.e., the representative claimants and the persons they are representing). The courts must carry out a comparison of the significance of the common issues between the claimants with the significance of the issues that differ between them;22 and
  4. all the claimants in a representative action must benefit from the relief granted by the court (i.e., they must have the same interest in the relief granted by the court).

Insofar as the 'class' is concerned, anyone can be a claimant (including overseas claimants) as long as he or she falls within that class of represented persons, all of whom are able to be 'identified by an objective criterion which bears a rational relationship to the common issues being asserted'.23

In Abdul Rahim, the HC observed that so long as the representative claimant represents a 'common interest',24 there is no requirement that he or she should represent the whole group.25 As such, the existence of two factions with two opposing points of view within a group does not necessarily impede the proper institution of a representative action.26 The opposing faction of that class can either be excluded from the representation of the representative claimant or be made defendants to that action.27

The CA in TR (CA) stressed that the application of Order 15 Rule 12(1) of the ROC should be 'broad and flexible', and that the court should strive to 'strike a balance between the interests of both parties, bearing in mind the purpose of the provision, which is to facilitate access to and the efficacious administration of justice'.28

iii Procedural rules

The procedural rules for civil claims, including representative actions, are largely found within the ROC. Other than what has been highlighted above, there are generally no significant procedural differences between representative actions and the other types of civil claims. It is important to note that the Singapore courts retain significant power and discretion to deal with issues raised by the parties or reshape the proceedings in a representative action.

In Singapore, the parties may, prior to trial, apply for a bifurcation of the hearing on liability and damages pursuant to Order 33 Rule 2 of the ROC. These applications are common in litigation, and a Singapore court is likely to grant an order for bifurcation if it determines that it is just and convenient to do so. For example, on the facts of Lee Chee Wei v. Tan Hor Peow Victor and others and another appeal [2007] 3 SLR(R) 537, the CA observed that the claimant 'would have readily been granted a bifurcation order' if he had applied for it due to the controversial and complex issues concerning the assessment of damages which potentially require expert evidence on various matters, and substantial time and costs would be saved if the issues of liability were resolved first.29

It is also worth noting that jury trials have long been abolished in Singapore. Trials are heard before judges in open court.30

iv Damages and costs

Damages

In Singapore, the burden lies with the successful claimant to prove his or her damages.31 Generally speaking, there is no standard method of calculating damages, and damages will have to be proven based on the legal tenets of causation, reasonableness and remoteness.32

However, as it is apposite for an entire class of claimants to share the same interest in the relief sought, it would not be appropriate to grant a standard sum of liquidated damages, especially when the sum of damages may vary between each individual claimant. It is not the fact that damages are sought that is offensive to a representative action, but the necessity for assessment on a personal basis of damages due to each claimant.33

If one were to commence a class action in Singapore, the claimants should seek declarations that all the claimants are entitled to damages (which fulfils the 'same interest' element and benefits the entire class), with an assessment of the damages due to each claimant to be carried out separately (on a non-representative basis) at a later stage.34

Costs

The Singapore courts have absolute discretion to award costs pursuant to Order 59 of the ROC.

As a general rule, 'costs follow the event' and the unsuccessful party will usually be ordered to pay the costs of the successful party.35

There are two bases on which the court will order costs:

  1. the standard basis: Under Order 59 Rule 27 of the ROC, this is the default position. When the court has any doubts as to whether certain costs were reasonably incurred, the issue will be resolved in favour of the paying (or non-successful) party; and
  2. the indemnity basis: When the court has any doubts as to whether certain costs were reasonably incurred, the issue will be resolved in favour of the receiving (or successful) party.

Broadly speaking, costs may be: (1) fixed by the court; (2) agreed upon by the parties; or (3) ordered by the court for taxation. Where costs are being taxed, the overarching consideration by the courts is the principle of proportionality, and the courts will have regard to all relevant circumstances and, in particular, to the following matters:

  1. the complexity of the item or of the cause or matter in which it arises and the difficulty or novelty of the questions involved;
  2. the skill, specialised knowledge and responsibility required of, and the time and labour expended by, the solicitor;
  3. the number and importance of the documents (however brief) prepared or perused;
  4. the place and circumstances in which the business involved is transacted;
  5. the urgency and importance of the cause or matter to the client; and
  6. where money or property is involved, its amount or value.36

The rule against contingency and conditional fees

Presently, Singapore prohibits contingency and conditional fee agreements between solicitors and clients.37 The Law Society of Singapore takes a strict stance against lawyers entering into such agreements with their clients.

That said, between 27 August 2019 and 8 October 2019, the Ministry of Law sought comments and gathered public feedback on its proposal to allow conditional fee agreements for prescribed categories of legal proceedings.38 The rationale was to discourage lawyers from pursuing weak cases, while providing incentives for lawyers in respect of the cases they do pursue. There has been no outcome on this exercise.

Third-party funding

As mentioned above, Singapore has allowed commercial third-party funders to fund certain proceedings.

However, the amendments to the Civil Law Act (Cap 43, 1999 Rev Ed) (CLA) and the enactment of the Civil Law (Third-Party Funding) Regulations 2017 were not intended to be exhaustive. In Re Fan Kow Hin [2019] 3 SLR 861 (Fan Kow Hin), the HC held that the amendments (insofar as permitting third-party funding for international arbitrations and related proceedings) were not meant to be understood as limiting the law on champerty and maintenance. In the court's view, Section 5A of the CLA 'leaves the scope of the doctrine of maintenance and champerty to be determined by the courts in the development of the common law'.39

Indeed, there are two such instances in the HC.

In Re Vanguard Energy Pte Ltd [2015] 4 SLR 597 (Re Vanguard), the HC allowed for third-party litigation funding in the realms of corporate insolvency. Specifically, in this case, the HC allowed the liquidators to sell their rights to the insolvent company's claims, and held that such an assignment of a cause of action or its fruits will not be champertous where: (1) the cause of action is ancillary to a transfer of property, (2) the assignee has a legitimate interest in the outcome of the litigation, or (3) there is no realistic possibility that the administration of justice may suffer as a result of the assignment.40

In Fan Kow Hin, the HC upheld an assignment agreement where the fruits of the litigation were assigned by trustees in bankruptcy to a third-party funder, and held that it was not contrary to public policy as it was aimed at providing access to justice in the context of insolvency where no other option for litigation funding would be viable.41 In other words, third-party funding of other dispute categories may not be precluded as long as it is not contrary to public policy and does not offend the rule against champerty and maintenance. These are all questions that are left open by the Parliament for the courts to decide on at the appropriate juncture.

It is currently unclear how these developments will apply to a representative action.

Further, and pursuant to Section 12 of the CLA, the Singapore courts have the power to award interest at such rate as they think fit on the whole or any part of the judgment debt. The prevailing interest rate is 5.33 per cent per annum.

Enforcement

In Singapore, there is an array of enforcement options under the ROC that are available for a successful claimant. These include:

  1. writs of execution (Order 46 of the ROC);
  2. seizure and sale of property (immovable and movable) (Order 47 of the ROC);
  3. garnishee proceedings (Order 49 of the ROC);
  4. stop orders concerning the sale of securities owned by the judgement debtors (Order 50 of the ROC); and
  5. the appointment of receivers by way of equitable execution (Order 51 of the ROC).

In order to decide the appropriate method for enforcement, a successful claimant may consider applying under Order 48 of the ROC to examine the judgment debtor to find out what assets the judgment debtor owns and where they are.

No leave is required to enforce the judgment as against the parties who appeared before the court in representative proceedings. However, the successful claimant may only enforce the judgment as against a person represented in but not a party to the said proceedings with the leave of the court.42 To this end, a separate application must be made by way of a summons, and the said summons must be served personally on the person against whom the judgment is sought to be enforced.

By virtue of Order 15 Rule 12(5) of the ROC, such person is estopped from challenging the validity of the judgment except 'by reasons of facts and matters particular to his case'. For example, such a person is allowed to prove that he or she was not in fact a member of the group or class represented in the action and at the time when the cause of action arose. He or she is, however, barred from raising defences that would have been available to be raised in the action.43

v Settlement

As with individual litigation, there are no special rules concerning private settlements in representative actions.

In potential contrast to other jurisdictions,44 the parties of representative proceedings in Singapore can enter into a private settlement on their own prerogative, and there is no requirement to obtain the court's approval for this. That said, the CA in TR (CA) has commented that (with no particular reference to the issue of settlement) that it is 'open to the court in a representative action to make the relevant orders to deal with the issues raised by the parties as it deems necessary and/or just'. The CA also commented, approving the views of the Australian Court in Carnie, that 'the representative action rule is broad and flexible enough such that the court retains the power to reshape the proceedings at a later stage if they become impossibly complex or if the defendant is prejudiced'.

Cross-border issues

Under Section 18D of the SCJA, the Singapore International Commercial Court (SICC) has the jurisdiction to hear and try actions that are 'international and commercial' in nature.45 The SICC is attractive for international users, and in particular for overseas claimants, chiefly due to the panel of international judges,46 the possibility of having foreign legal representation, and the determination of foreign law based on expert evidence.

Order 110 of the ROC is formulated for, and governs all, SICC proceedings. Notwithstanding this, Order 110 Rule 3 specifically provides that, subject to Order 110 Rule 1(5), the provisions of the ROC apply to all SICC proceedings. This includes Order 15 Rule 12, which means that it is possible for overseas claimants to commence representative actions in the SICC.

An SICC judgment is enforceable as though it is a judgement from the Singapore courts. Section 18F of the SCJA stipulates that parties that have agreed to submit to the jurisdiction of the SICC shall, unless expressly stated otherwise, also be considered to have agreed to submit to the exclusive jurisdiction of the SICC, to carry out any SICC judgment without undue delay and to waive any recourse to any court or tribunal outside Singapore against any SICC judgment and the enforcement of such a judgment.

That said, the enforceability of an SICC judgment in a foreign jurisdiction would depend on that jurisdiction's rules governing the recognition and enforcement of a foreign judgment.

The Singapore courts will refuse to enforce certain types of judgments. First, the Singapore courts would not aid the enforcement of foreign judgments if the enforcement is contrary to or offends Singapore's public policy.47 As an example, the Singapore courts are generally reluctant to enforce foreign judgments that (for example) rest on a gambling debt as this would prima facie be contrary to Section 5 of the CLA.48

Second, if an overseas claimant wishes to enforce a foreign judgment in Singapore, the judgment must be 'for a sum other than a sum payable in respect of taxes or the like, or in respect of a fine or other penalty.'49 This is in line with the general rule in Singapore is that punitive damages cannot be awarded for claims involving breach of contract.50

However, that is not to say that punitive damages are not allowed in Singapore. In its landmark decision of ACB v. Thomson Medical Pte Ltd and others [2017] 1 SLR 918 (Thomson Medical), the CA awarded punitive damages to a mother who sued the defendant for, among other things, their mistake during an in-vitro fertilisation procedure where they had fertilised her ovum using sperm from an unknown third party instead of her husband's. In this case, the CA held that punitive damages may be awarded in tort where the totality of the defendant's conduct is so outrageous that it warranted punishment, deterrence and condemnation.51

Outlook and conclusions

In recent years, Singapore's Ministry of Law and the Supreme Court of Singapore have set up the Civil Justice Review Committee (CJRC) and the Civil Justice Commission (CJC) respectively to review the civil justice system in Singapore.52 In late 2018, a public consultation was launched to gather feedback on the proposed reforms. As such, we anticipate the ROC in Singapore to be substantially amended in the near future.53

The proposed reforms are not carved in stone yet. However, it is clear that the common recommendation by both the CJC54 and CJRC55 is for the Singapore courts to have enhanced control over the civil litigation process and to have flexibility over the proceedings. This means that the courts will retain significant power and discretion to shape and conduct representative actions in Singapore.

Footnotes

1 Sim Chong is a director and Wesley Liang is an associate at Sim Chong LLC.

2 See: (1) Section 19 of the State Courts Act (Cap 321, 2007 Rev Ed) (SCA); and (2) Sections 16–17A of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (SCJA).

3 See Section 19(4) read with Section 2 of the SCA.

4 For this reason, we will also touch on certain cases prior to 2000.

5 As expressed at Section 5A of the CLA.

6 See, in general, the Civil Law (Third-Party Funding) Regulations 2017.

7 Felicia Choo, 'Third-party funding in legal cases to be extended', The Straits Times (11 October 2019) https://www.straitstimes.com/singapore/third-party-funding-in-legal-cases-to-be-extended>;.

8 For example, Section 85 of the BMSMA allows the management corporation to commence proceedings on behalf of the subsidiary proprietors of a building, or to defend an action on their behalf.

9 See, for example, Syed Nomani [2017] 4 SLR 1064 at [16].

10 See, for example, Re Braybrook [1916] W.N. 74 as cited by Singapore Civil Procedure (2020) at [15/12/5].

11 See Syed Nomani [2017] 4 SLR 1064 at [16].

12 ibid.

13 See Section 6(1) of the Limitation Act.

14 See Section 29 of the Limitation Act.

15 See Section 24A(3) of the Limitation Act.

16 See Section 24B of the Limitation Act.

17 See [8] of Abdul Rahim v. Ling How Doong and others [1994] 1 SLR(R) 1054 (Abdul Rahim).

18 This was what the defendant company attempted to do in TR (HC).

19 For example, Irish Shipping Ltd v. Commercial Union Assurance Co plc [1991] 2 QB 206 (England & Wales), Western Canadian Shopping Centres Inc v. Dutton [2001] 2 SCR 534 (Canada) and Carnie v. Esanda Finance Corporation Limited (1995) 182 CLR 398 (Australia) (Carnie).

20 See [26]–[29] of TR (CA).

21 See [78] of TR (CA).

22 See also [60] of TR (CA).

23 See [78] of TR (CA).

24 The Singapore position follows that of the English position as set out in Markt & Co Ltd v. Knight Steamship & Co Ltd [1910] 2 KB 1021.

25 See [12] of Abdul Rahim.

26 See [15] of Abdul Rahim.

27 See [18] of Abdul Rahim.

28 See [32] and [38] of TR (CA).

29 See [64] of Lee Chee Wei v. Tan Hor Peow Victor and others and another appeal [2007] 3 SLR(R) 537.

30 Unless the Court grants an application for any matter to be heard in camera: see Section 8 of the SCJA.

31 See, for example, Robertson Quay Investment Pte Ltd v. Steen Consultants Pte Ltd [2008] 2 SLR(R) 623.

32 See, for example, Sunny Metal & Engineering Pte Ltd v. Ng Khim Ming Eric [2007] 3 SLR(R) 782.

33 See [76] of TR (CA).

34 See the guidance from the CA at [77] of TR (CA).

35 See Order 59 Rule 3 of the ROC.

36 See Order 59 Rule 31(1) of the ROC read with Appendix 1 to Order 59 of the ROC.

37 See, for example, Section 5B of the CLA, section 107(1)(b) of the Legal Profession Act (Cap 161, 2009 Rev Ed), and Rule 18 of the Legal Profession (Professional Conduct) Rules 2015.

39 See [32]–[33] of Fan Kow Hin.

40 See [43] of Re Vanguard.

41 See [5] of Fan Kow Hin.

42 See Order 15 Rule 12(3) of the ROC.

43 See Singapore Civil Procedure (2020) at [15/12/41].

44 For example, Rule 23(e) of the Federal Rules of Civil Procedure states that 'The claims, issues, or defences of a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval'.

45 As defined at Order 110 Rule 1 of the ROC.

46 Singapore International Commercial Court website https://www.sicc.gov.sg/about-the-sicc/judges>;.

47 See [14] of Poh Soon Kiat v. Desert Palace Inc (trading as Caesars Palace) [2010] 1 SLR 1129 (Desert Palace), and generally, BAZ v. BBA and others and other matter [2020] 5 SLR 266.

48 See also, generally, Desert Palace and The Star Entertainment QLD Ltd v. Wong Yew Choy and another matter [2020] 5 SLR 1.

49 See [13] Desert Palace citing Dicey, Morris and Collins on The Conflict of Laws (Sir Lawrence Collins gen ed) (Sweet & Maxwell, 14th Ed, 2006) at volume 1, paragraph 14-020.

50 See generally, PH Hydraulics & Engineering Pte Ltd v. Airtrust (Hong Kong) Ltd and another appeal [2017] 2 SLR 129 (PH Hydraulics).

51 See [176] of Thomson Medical.

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