Significance: The bankrupt made certain cheque payments to his family members in the clawback period prior to his bankruptcy. The trustee in bankruptcy applied to claw back these payments for being unfair preference (as two of the family members were also creditors of the bankrupt) and undervalue transaction (this was essentially a gift to his daughter which she used to pay for expenses for her wedding, which cost a total of about S$135,000). The statutory presumption of unfair preference was not found to have been rebutted. The court found that it would not be justified to not order a claw back for the gift to the daughter as it would otherwise be tantamount to the bankrupt’s creditors footing the bill of the daughter’s “lavish wedding”.
Case: Okpabi v Royal Dutch Shell Plc [2021] UKSC 3 – suing foreign parent company for negligence
Significance: This case involves an interesting litigation strategy which has paid off up to this step in the proceeding.
Claimants in Nigeria sued the UK-domiciled parent company of a Nigerian-registered company for breach of common law duty of care on the basis that the parent exercised significant control over material aspects of the subsidiary’s operations and/or assumed responsibility for its operations, which allegedly failed to protect the appellants against the risk of foreseeable harm arising from its operations (oil spills).
UK Supreme Court granted the possibility of this claim and allowed the matter to proceed as a matter of jurisdiction.
Common Sense Rules of Trial Advocacy
Best practices, principles and tips for effective trial lawyering.
Adapted from Common Sense Rules of Advocacy for Lawyers by Keith Evans.
Case: CAI v CAJ [2021] SGHC 21 – arbitration award set aside for breach of natural justice
Significance: the General Division of the Singapore High Court (S Mohan JC) set aside part of an arbitral award and the 3-member Tribunal’s decision on an extension of time defence for breach of natural justice. Judgment here.
Whether Managing Director or CEO has legal power or authority to borrow money or give security
Blasco, Martinez Gemma v Ee Meng Yen Angela [2020] SGHC 247
Significance: Singapore High Court, per Kannan Ramesh J, held that a managing director or CEO (acting or otherwise) did not, as a general rule, have the power (implied actual authority or apparent / ostensible authority) to borrow money or give security on behalf of the company by reason of his position. This was a context-sensitive issue and regard should be had to all the circumstances of the case: at [38].
Jurong Aromatics Corp Pte Ltd v BP Singapore Pte Ltd [2018] SGHC 215 – Charges over receivables as security; contracts prohibiting assignment
In Jurong Aromatics Corp Pte Ltd (receivers and managers appointed) and others v BP Singapore Pte Ltd and another matter [2018] SGHC 215, the Singapore High Court considered the nature of charges and whether contractual clauses prohibiting assignments applied to prevent the charge from arising. The court also considered decrystallisation, estoppel, waiver, and whether insolvency set-off applied.
Ma Hongjin v SCP Holdings Pte Ltd [2020] SGCA 106 – Doctrine of Consideration in Variation of Contracts Upheld
Significance: five-person bench of the Singapore Court of Appeal refuses to abolish the doctrine and requirement of valid consideration for variation of contracts, while suggesting that contracting parties may expressly agree to dispense with the requirement for varying a particular contract.
Retailer Insolvency and Rights of Goods Suppliers
It was reported that in the light of the liquidation of long-surviving departmental store Robinsons, goods suppliers have been experiencing issues with payments for sold consigned goods.
What has not been considered in these reports is that suppliers who consigned goods to Robinsons should consider if it is indeed a consignment at law and whether title or property of goods have passed to Robinsons, or if not then whether they can take back the goods.
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Lazada’s Personal Data Breach and Rethinking Cost-Benefit Analysis of PDPA Compliance
Lazada’s Data Breach
Lazada reported that its Redmart customers’ personal data had been illegally accessed and sold online. The stolen data includes names, phone numbers, email and mailing addresses, encrypted passwords and partial credit card numbers of 1.1 million accounts.
The Personal Data Protection Commission (PDPC) has been informed. If Lazada is eventually found to have failed to put in place reasonable security arrangements to protect the personal data, it will be subject to penalties.
Yet, one wonders how effective the penalties are on making organisations, especially large profit-making ones, from taking users’ personal data seriously.
Case: Offence of Raising Funds Without Prospectus and Small Offer Exemption
Significance: In Public Prosecutor v Tay Chee Ming [2020] SGMC 1, the court found a company director and shareholder, Tay, guilty of an offence under section 240 of the Securities and Futures Act (Cap. 289) (SFA) for raising funds from the public in Singapore through offers of convertible loan agreements (CLA) with investors by his company. Tay was sentenced to imprisonment for 15 months. Tay raised about S$8 million in total.
This appears to be the first court decision on the offence and a discussion on the small offer exemption under section 272A(1) of the SFA, which is one of the safe harbour exemptions from prospectus requirements for businesses to raise funds. The private placement exemption in section 272B of the SFA was not raised by the accused and so was not considered.
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