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Grounds publishedDecided 14 Aug 2014
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High Court

Chu Said Thong and another v Vision Law LLC

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[2014] SGHC 160Case no. Suit No 735 of 2011

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  1. Vinodh Coomaraswamy J:

  2. Overview

  3. [1] Victor Tan is an audacious identity thief. In September 2010, he fabricated in its entirety an option which purportedly gave him the right to buy the property known as 13A Jalan Berjaya from Lum Whye Hee, its true owner. He wrote a note on the “option” addressed to Susan Chua, a conveyancing secretary employed by the defendant law firm. In that note, he pretended to be Lum Whye Hee, instructed the defendant to act for him in selling the property and set out his own mobile phone number. At the foot of the note, he fraudulently signed Lum Whye Hee’s name. He then faxed a copy of the “option” to the defendant.

  4. [2] Victor Tan used his fabricated “option” to defraud the plaintiffs into agreeing to acquire from him his non-existent right to buy 13A Jalan Berjaya. Before they agreed to do so, the first plaintiff called the defendant and spoke to Susan Chua about the “option”. It is the plaintiffs’ case that Susan Chua in this conversation made three critical misrepresentations. These misrepresentations, the plaintiffs say, gave them the confidence to enter into the transaction with Victor Tan by which he defrauded them and have thereby caused them loss and damage.

  5. [3] The plaintiffs now seek compensation from the defendant for that loss and damage under two heads. First, they seek to recover from the defendant the sum of $105,200 which Victor Tan tricked them into handing over to him to buy his right under his fabricated “option”. Second, their case is that their ill-fated transaction with Victor Tan caused them to lose the opportunity to buy an alternative property in their desired area in September and October 2010. Although they resumed house hunting in January 2011, no property came on the market in that area until in December 2011. The plaintiffs bought that property, 13 Jalan Berjaya, at a price of $8m. That price was more than double the price at which Victor Tan had fraudulently offered 13A Jalan Berjaya to them. The increase reflected, at least in part, the steep rise in property prices in that area between September 2010 and December 2011. The plaintiffs therefore seek damages from the defendant for their lost opportunity to purchase a property until December 2011. They value their compensation for this lost opportunity as being over $2m.

  6. [4] The plaintiffs submit that the defendant is liable to compensate them for these losses either because the defendant, through Susan Chua, made her three misrepresentations to them fraudulently or negligently; alternatively because the defendant, through Susan Chua, falsely warranted to them that it had authority to act for Lum Whye Hee in a sale of 13A Jalan Berjaya.

  7. The facts

  8. The plaintiffs look for a property in the Bishan/Thomson area

  9. [6] The plaintiffs are husband and wife. The first plaintiff is an oil trader with British Petroleum plc. The second plaintiff is a homemaker. In 2010, they lived in a semi-detached house in the Bishan/Thomson area. For various reasons, they love that area and would never consider moving out of it. In early 2010, they realised that they needed a bigger house. So began their search for a larger, detached house in the same area.

  10. [7] Large, detached properties in that area rarely come onto the market. From April 2010 to September 2010, only two did. The plaintiffs made offers on both but were unsuccessful both times. The first property came on the market in April 2010. This was a 6,340 square foot property at 29 Jalan Binchang. The plaintiffs made an offer of $5m, or $788 per square foot, for this property. They were outbid by another purchaser who offered $5.3m. Soon after that, the second property came on the market. This was a 7,111 square foot house at 23 Jalan Berjaya. The plaintiffs made an offer of $6.5m, or $921 per square foot, for this property. The owner did not accept the offer. The plaintiffs were prepared to improve their offer, but the owner withdrew the property from the market before they could do so.

  11. Victor Tan places an advertisement

  12. [8] On Saturday, 18 September 2010, Victor Tan fraudulently advertised 13A Jalan Berjaya for sale in the classified advertisements in the Straits Times. His advertisement read as follows: “OPP BISHAN MRT! Old bunglw 5600 sqft. For rebuild/ subdivide. $690 psf neg. [XXX]”. For a property of 5,600 square feet, $690 per square foot worked out to a total price of $3.864m. That was the price Victor Tan had inserted in his “option”.

  13. [9] The second plaintiff saw this advertisement on the same day it was published. She told the first plaintiff about it. Both plaintiffs were very excited. The property was just what the plaintiffs were looking for: a large, detached property in a very good location within their desired area. And the asking price was a reasonable one: significantly lower than the asking prices of both properties on which the plaintiffs had made unsuccessful offers in the first half of 2010 (see [7] above).

  14. [10] The second plaintiff telephoned the number in the advertisement. The man who answered the call introduced himself to her as “Steven Sim”. That was a lie: he was almost certainly Victor Tan. He told her that he was a property broker with DTZ Debenham Tie Leung (SEA) Pte Ltd (“DTZ”). That too was a lie. There was no property broker named “Steven Sim” associated with DTZ. He told her that the address of the property he had advertised was 13A Jalan Berjaya. That at least was true. But he had no connection whatsoever with that property or with Lum Whye Hee, its true owner.

  15. [11] The plaintiffs viewed the outside of the property from the street that very day. Since their intention was to demolish and rebuild, their external viewing was sufficient for the plaintiffs to know that this was just the property they were looking for.

  16. The plaintiffs talk to Victor Tan, posing as “Steven Sim”

  17. [12] After the viewing, but still on 18 September 2010, the first plaintiff called “Steven Sim” back. “Steven Sim” told him that the owner of 13A Jalan Berjaya had granted an option to purchase it to a man called Victor Tan at a price of $3.864m. That was yet another lie. The true owner of 13A Jalan Berjaya, Lum Whye Hee, was then over 89 years old. She had suffered a serious stroke in 2006, leaving her bed-ridden and entirely unable to communicate. She did not intend to sell the property and had not issued an option to purchase it to anyone, let alone to Victor Tan.

  18. [13] “Steven Sim” told the first plaintiff that Victor Tan was keen to sell his right to purchase 13A Jalan Berjaya under the option because he needed money to pay his gambling debts. “Steven Sim” urged the plaintiffs to act fast. If they did not, he told them, Victor Tan might sell his option to somebody else. Given the price and location, “Steven Sim” told the plaintiffs, the property was a bargain.

  19. [14] After a short negotiation, the first plaintiff and “Steven Sim” agreed that the plaintiffs would pay Victor Tan $105,200 to buy his right under the “option” to purchase 13A Jalan Berjaya. This comprised $35,200, being 1% of the agreed sub-sale price, as option money; and an additional sum of $70,000 as goodwill money to Victor Tan for parting with his right under the “option”.

  20. [15] “Steven Sim” told the first plaintiff that the defendant acted for Lum Whye Hee in selling the property and gave him Susan Chua’s number. The plaintiffs say that the very mention of a law firm’s name was crucial to them: “With the involvement of a law firm, [the plaintiffs] felt reassured that the transaction would be smooth” and that “everything was above board”. The plaintiffs agreed to “Steven Sim’s” suggestion that he send his assistant that very evening to see them and to show them the original “option”. “Steven Sim” gave his assistant’s name as “Lucas Ong”. In fact, “Lucas Ong” was to be yet another one of Victor Tan’s guises.

  21. The plaintiffs meet Victor Tan, posing as “Lucas Ong”

  22. [16] On the evening of 18 September 2010, Victor Tan went to the plaintiff’s house posing as “Lucas Ong”. The plaintiffs did not suspect anything because they had never met Victor Tan at all. At that point, they had dealt only with “Steven Sim”, and even then only over the phone. “Lucas Ong” gave the plaintiffs “Steven Sim’s” business card. Like the “option”, the business card was a complete fabrication. It described “Steven Sim” as a sales director with DTZ, complete with a false Housing Agency Licence number. “Lucas Ong” also showed the plaintiffs the original “option” dated 16 September 2010. It was ostensibly granted by “Lum Whye Hee” as vendor to “Victor Tan” as purchaser, witnessed by a “Lock Sau Lain”.

  23. [17] “Lucas Ong” told the plaintiffs that if they went ahead and purchased the option from Victor Tan, Victor Tan would prepare a letter of nomination and authority to be issued to the vendor to transfer Victor Tan’s right under the option to them. The plaintiffs say that they did not want to commit to the purchase before they could check with the defendant whether it indeed acted for Lum Whye Hee as the vendor and whether the vendor had indeed granted Victor Tan an option to purchase the property. So the plaintiffs deferred their decision on the purchase until 20 September 2010. That was the next working day, a Monday, when they expected the defendant’s office to be open.

  24. Victor Tan faxes the “option” to the defendant

  25. [18] Susan Chua works for the defendant as a conveyancing secretary. She often works on Saturdays and so believes she was in the office on Saturday, 18 September 2010. Either on 18 September 2010 or on 20 September 2010 – Susan Chua cannot now recall which – the defendant’s receptionist handed her a faxed copy of the “option.” This was a facsimile of what “Lucas Ong” had shown the plaintiffs on the evening of 18 September 2010 (see [16] above).

  26. [19] At the top of the first page of the fax was Victor Tan’s handwritten note to Susan Chua:

  27. Crucially, no title was attached to the name of Lum Whye Hee on the “option”. It thus gave no indication on its face that Lum Whye Hee is a woman.

  28. [20] On 20 September 2010, Susan Chua conducted a title search on 13A Jalan Berjaya to verify that the owner of that property as named in the “option” matched the owner that property as registered with the Singapore Land Authority. The search confirmed that the names matched, both being Lum Whye Hee. Immediately after confirming this, Susan Chua rang the number set out on her copy of the “option” in order to speak to Lum Whye Hee. That number, of course, was Victor Tan’s mobile telephone number. Victor Tan answered Susan Chua’s call. Not knowing from the “option” or from the title search that Lum Whye Hee is a woman, Susan Chua asked to speak to “Mr Lum”. Victor Tan confirmed to Susan Chua – fraudulently – that he was “Mr Lum”. Susan Chua asked “Mr Lum” to confirm that he had faxed an option to the defendant and that he wanted the defendant to represent him in selling 13A Jalan Berjaya. Victor Tan confirmed this. Susan Chua ended the call by telling “Mr Lum” that the defendant would let him know once the option had been exercised.

  29. The first plaintiff calls the defendant

  30. [21] Also on 20 September 2010, the first plaintiff called the defendant at the number given to him by “Steven Sim” and had the critical conversation with Susan Chua on which the plaintiffs’ entire claim turns. He recounts this fateful conversation in his evidence in chief as follows:

  31. [22] I set out Susan Chua’s account of this crucial telephone conversation and resolve the differences between the two witnesses’ accounts below at [50]-[71].

  32. The plaintiffs hand over the money

  33. [23] The plaintiffs say that as lay persons, they “trust law firms to verify matters and ensure that everything is done legally and properly.” They therefore say they believed Susan Chua’s three representations set out at [21] above precisely because they came from a law firm. Thus assured, the first plaintiff then called “Steven Sim” back to confirm that they agreed to purchase Victor Tan’s rights under his “option” to acquire 13A Jalan Berjaya. “Steven Sim” told them that he would arrange for “Lucas Ong” to meet them that evening to conclude the transaction.

  34. [24] That evening, the plaintiffs handed over to Victor Tan – who was again pretending to be “Lucas Ong” – their crossed cheque for $105,200 drawn in his favour. In exchange, they got Victor Tan’s “option”, his letter of nomination and “Lucas Ong’s” acknowledgment of receipt.

  35. [25] At 10.51 pm on 20 September 2010, after meeting Lucas Ong, the second plaintiff sent an email attaching copies of these documents to a conveyancing solicitor known to the second plaintiff. That solicitor was a Lee Ping who practises with WLAW LLC (“WLaw”). The second plaintiff’s email read as follows:

  36. The plaintiffs exercise the “option”

  37. [26] The “option” specified that it should be exercised at or before 4.00 pm on 7 October 2010 by signing and returning its acceptance copy to the defendant together with a cheque for 5% of the sale price less the option money. The plaintiffs were, however, eager to exercise the “option” and complete the purchase of 13A Jalan Berjaya early. On 23 September 2010, therefore, the plaintiffs went to WLaw and saw Lee Ping. There, they signed the acceptance copy of the “option”. They also gave WLaw a cheque drawn in favour of the defendant for the sum due upon exercise. WLaw duly forwarded the acceptance copy and the cheque to the defendant on the same day. WLaw also protected the plaintiffs’ interest as the ostensible purchasers of 13A Jalan Berjaya by lodging a caveat against that property.

  38. The defendant’s clockwork-like standard operating procedure

  39. [27] The defendant is a specialist conveyancing firm with a clockwork-like standard operating procedure for handling conveyancing matters. That procedure calls only for a title search to be undertaken when a new client informs the defendant that it has issued an option and would like the defendant to represent that client as the seller. So after Susan Chua did the title search on 20 September 2010 (see [20] above), nothing further was done.

  40. [28] But on 23 September 2010, when the defendant received WLaw’s letter exercising the “option” and enclosing the plaintiffs’ cheque, the defendant’s clockwork-like standard procedure swung into full action. A conveyancing secretary took the decision to accept “Lum Whye Hee” as a client of the firm in the sale of 13A Jalan Berjaya. She informed the defendant’s administrative staff, who opened a physical file. Under the defendant’s standard operating procedure, all of this would have been done without the involvement of any of the defendant’s solicitors. Before accepting “Lum Whye Hee” as a client, the defendant did none of the know-your-client identity checks mandated by Rule 11F of the Legal Profession (Professional Conduct) Rules. The defendant accepts that if it had done so, and had insisted on obtaining proof of its putative client’s identity, it would have realised, at the very least, that Lum Whye Hee is a woman and not a man.

  41. [29] Another one of the defendant’s conveyancing secretaries now took the physical file to the only lawyer in the defendant’s conveyancing practice, Leong Li Lin, to inform her that the plaintiffs had exercised the option. This was the first time that any of the defendant’s solicitors became aware that the defendant represented or intended to represent “Mr Lum” in selling 13A Jalan Berjaya. I deal with Leong Li Lin’s evidence and her role in the defendant’s practice in more detail at [74] below. The file presented to Leong Li Lin contained the original “option” faxed to Susan Chua, the initial title search which Susan Chua conducted on 20 September 2010 and WLaw’s letter exercising the “option” together with enclosures. The file contained no warrant to act and no evidence of the identity of the defendant’s client. Leong Li Lin looked over the documents and noticed nothing unusual. So she took the usual next steps: she issued the firm’s standard form letter to “Mr Lum” informing him that the option had been exercised and ensured that the plaintiffs’ cheque was deposited into the defendant’s client account to be held as stakeholding money pending completion. The date fixed for completion was 15 December 2010.

  42. [30] Once they had exercised the “option” on 23 September 2010, the plaintiffs stopped their house hunting. As far as they were concerned, their purchase of 13A Jalan Berjaya was a concluded transaction which was proceeding smoothly to completion. Indeed, that was also the defendant’s view of the transaction.

  43. The fraud is uncovered

  44. [31] The plaintiffs were not Victor Tan’s only victims. Victor Tan perpetrated the same fraud on two other purchasers. The solicitors representing one of those other purchasers paid a visit to the property on 8 October 2010. At the property, they saw the defendant’s now rain-soaked, standard-form letter of 23 September 2010 dangling in the post box. Noting that the letter was from a law firm, ie the defendant, their suspicions were aroused. They therefore contacted the defendant and spoke to Leong Li Lin to inform her of their suspicions.

  45. [32] Coincidentally, also on 8 October 2010, WLaw learned that two other parties claimed to have exercised an option to purchase 13A Jalan Berjaya. WLaw told the plaintiffs. The plaintiffs were understandably shocked. They tried to contact “Steven Sim” and “Lucas Ong” but could not do so. They contacted DTZ for assistance in tracing both men. DTZ later told them that nobody by either name was associated with DTZ.

  46. [33] WLaw conveyed the plaintiff’s concerns to Leong Li Lin in a telephone call on 8 October 2010. At the same time yet another law firm informed the defendant that it acted for a purchaser of 13A Jalan Berjaya. Leong Li Lin tried contacting “Mr Lum” at the telephone number which Victor Tan had written on the “option”. She could not get a response. Leong Li Lin asked for a fresh title search. It confirmed the worst: two other purchasers had lodged caveats against 13A Jalan Berjaya. Leong Li Lin became alarmed. She escalated the matter to the defendant’s director, Eric Ng. Eric Ng sought the assistance of Rayney Wong in resolving the issue. Rayney Wong is a former partner of Eric Ng’s who was then sharing premises with the defendant.

  47. [34] On 11 October 2010, the defendant told WLaw that it was no longer able to contact its client. WLaw responded by writing formally to the defendant on the same day asking specifically for: (i) confirmation that the option which the plaintiffs had exercised was the only option granted by the defendant’s client; (ii) confirmation that all other options which the defendant’s client appeared to have granted were invalid; (iii) confirmation of the “procedure(s) [the defendant] had taken to verify [its] client’s identity to ensure that he is the registered proprietor” of 13A Jalan Berjaya; and (iv) the further steps that the defendant was or would be taking to contact its client.

  48. [35] On 11 October 2010, because it was unable to get instructions from its client “Mr Lum”, the defendant took the decision that it should discharge itself from acting for the “owner” of 13A Jalan Berjaya with immediate effect. Eric Ng took this decision, in consultation with Rayney Wong. Leong Li Lin was directed to inform the Law Society of the defendant’s decision. She did so by a letter dated 12 October 2010.

  49. [36] This letter was a curious letter for the defendant to have written. It did not seek permission, ask for guidance or indeed make any other request of the Law Society. It simply set out the circumstances in which the defendant found itself and set out what it proposed to do. Leong Li Lin conceded in cross-examination that she did not know the thinking behind sending this letter.

  50. [37] Leong Li Lin was instructed to inform WLaw that the defendant had decided to discharge itself. She did so in her letter sent on 12 October 2010 to WLaw in reply to its letter of 11 October 2010 (see [34] above). In that letter, Leong Li Lin told WLaw that the defendant was unable to provide the first and second confirmations it sought in its letter of 11 October 2010 because the defendant was unable to contact “Mr Lum Whye Hee”. She did not address the third and fourth confirmations that WLaw sought. She informed WLaw that the stakeholding money that the defendant had received would be kept on month-to-month interest-bearing deposit “pending resolution of the matter”. She concluded by enclosing a copy of the defendant's curious letter to the Law Society.

  51. The plaintiffs make a police report

  52. [38] On 13 October 2010, the second plaintiff reported Victor Tan’s fraud to the police. The police investigated the matter. In the course of those investigations, they showed the second plaintiff a photograph of Victor Tan. She confirmed that she knew the man in the photograph as “Lucas Ong”. The police informed the second plaintiff that Victor Tan had left the country and could not be traced.

  53. The plaintiffs ask for the stakeholding money back

  54. [39] On 13 October 2010, WLaw asked the defendant to return the stakeholding money. On 15 October 2010, the defendant took the position that they would return the stakeholding money only if ordered by the court to do so.

  55. The real Lum Whye Hee appears on the scene

  56. [40] In October 2010, members of the family of Lum Whye Hee, the true owner of 13A Jalan Berjaya, visited the property to collect her mail. They found various solicitors’ letters (the defendant’s among them) informing “Mr Lum” that three different options to purchase 13A Jalan Berjaya had been exercised. But the family knew that the property was not for sale and that Lum Whye Hee was in no position at all to issue an option to anyone to purchase it. They instructed solicitors, WongPartnership LLP (“WongP”), who wrote to WLaw to inform it that Lum Whye Hee was an 88 year old lady who had not been communicating for several years and that she had not granted any option to anyone to purchase 13A Jalan Berjaya.

  57. [41] The plaintiffs then discharged WLaw and engaged Drew & Napier LLC (“D&N”) to act for them. In answer to follow-up questions in November 2010 from D&N, WongP informed the plaintiffs that neither Lum Whye Hee nor her family knew Victor Tan or “Lock Sau Lain”, the ostensible witness named in the “option”. D&N asked WongP whether Lum Whye Hee’s family were nevertheless prepared to sell 13A Jalan Berjaya to the plaintiffs. WongP told the plaintiffs on 12 November 2010 that the property was not for sale. Their correspondence ended there.

  58. The plaintiffs plan their next steps

  59. [42] While D&N was corresponding with WongP, it were also corresponding with the defendant. D&N wrote to the defendant on 27 October 2010 and again on 10 November 2010 seeking information in an attempt to piece together how the fraud had been perpetrated. The defendant failed to reply to either letter.

  60. [43] D&N next wrote to the defendant on 1 April 2011. D&N demanded repayment of the stakeholding monies and of the $105,200 the plaintiff had paid to Victor Tan. D&N asserted that the plaintiffs would not have paid that money to Victor Tan but for Susan Chua’s representation to them that the defendant acted for the true owner of 13A Jalan Berjaya. This is a significant letter to which I return at [64] below. On 27 April 2011, the defendant replied. The defendant agreed to refund the stakeholding money but rejected the plaintiffs’ claim for payment of $105,200.

  61. [44] The defendant refunded the plaintiffs’ stakeholding money on 15 June 2011 by cheque. The plaintiffs did not deposit the cheque for several months, lest they be taken to have waived their rights against the defendant. In October 2011, they finally deposited the cheque subject to an express reservation of their rights.

  62. [45] Shortly afterwards, on 18 October 2011, the plaintiffs commenced this suit.

  63. The plaintiffs re-enter the property market

  64. [46] On 28 December 2011, the plaintiffs exercised an option to purchase an alternative property at a price of $8m, or $1,346 per square foot. By coincidence, this property is 13 Jalan Berjaya, right next door to Lum Whye Hee’s house at 13A Jalan Berjaya. This property was the first one to come on the market after the plaintiffs resumed house hunting in January 2011. They had remained out of the housing market until then because, they say, they needed time to return to a fit state of mind to think about house hunting again. In the time that elapsed between being defrauded by Victor Tan in September 2010 and purchasing this alternative property in December 2011, property prices in their desired area leapt. The plaintiffs say that the defendant caused them to miss the opportunity to purchase either of the only two properties which came onto the market in that area during that period, in September and October 2010. Both these properties fit the plaintiffs’ requirements and sold at prices substantially below the $8m they paid for 13 Jalan Berjaya.

  65. The plaintiffs’ claims

  66. [47] The plaintiffs now seek compensation from the defendant by way of damages for fraudulent or negligent misrepresentation or breach of warranty of authority comprising the following:

  67. (a) The sum of $105,200 which they paid to Victor Tan, then posing as “Lucas Ong”, to acquire his non-existent right to purchase 13A Jalan Berjaya under his “option”; and

  68. (b) The sum of $2.046m being the difference in price between what the plaintiffs actually paid per square foot for 13 Jalan Berjaya in December 2011 and the average price per square foot of suitable properties in their desired area in September and October 2010.

  69. [48] The defendant’s response, in brief, is to deny that Susan Chua made any actionable misrepresentation to the plaintiffs. Alternatively, insofar as Susan Chua may have confirmed that the defendant acted for Lum Whye Hee, the defendant submits that her representation cannot be attributed to it. Finally, the defendant submits that the plaintiffs’ losses were not caused by the defendant or, alternatively, are too remote to be recovered.

  70. The issues arising

  71. [49] It is common ground that the first plaintiff had a telephone conversation with Susan Chua on 20 September 2010 in which Susan Chua said certain things to him. With that in mind, the questions of fact and law which I have to determine are the following:

  72. (a) What did Susan Chua represent to the first plaintiff on 20 September 2010?

  73. (b) Did Susan Chua make those representations in the course of her employment with the defendant?

  74. (c) Fraudulent misrepresentation:

  75. (i) Were Susan Chua’s representations false?

  76. (ii) If so, was Susan Chua fraudulent in making those misrepresentations?

  77. (iii) If so, what is the measure of the plaintiffs’ damages?

  78. (d) Negligent misrepresentation:

  79. (i) Did the defendant owe the plaintiffs a duty of care?

  80. (ii) If so, did the defendant breach that duty of care?

  81. (iii) If so, what is the measure of the plaintiffs’ damages?

  82. (e) Breach of warranty of authority

  83. (i) Did Susan Chua warrant that the defendant had Lum Whye Hee’s authority to act for her in the sale of 13A Jalan Berjaya?

  84. (ii) If so, did the defendant breach that warranty?

  85. (iii) If so, what is the measure of the plaintiffs’ damages?

  86. What did Susan Chua say to the first plaintiff on 20 September 2010

  87. [50] As mentioned at [21] above, the plaintiffs’ case is that Susan Chua made the following three representations to the first plaintiff on 20 September 2010:

  88. (a) That the defendant acted for Lum Whye Hee (the 1st representation);

  89. (b) That Lum Whye Hee had issued the “option” to Victor Tan (the 2nd representation); and

  90. (c) That there were no problems with the plaintiffs purchasing the “option” from Victor Tan and paying him $35,200 for the “option” and $70,000 as goodwill money (the 3rd representation).

  91. [51] For the reasons given below, I find that Susan Chua most definitely made the first representation and most likely made the second representation. But I find that she did not make the third representation.

  92. Susan Chua’s account of the conversation

  93. [52] Susan Chua’s recollection of her conversation with the first plaintiff on 20 September 2010 is not as clear as the first plaintiff’s (see [21] above). Her poor recollection, she says, is partly because of the lapse of time, partly because she receives many calls in the course of her work as a conveyancing secretary, partly because she did not consider the matter to be an ongoing transaction at the time and partly because the caller was a third party and not the defendant’s client. She does recall that she was not expecting the call and that it was a short call. She does not recall whether the caller was a man or a woman. The caller did not identify himself but it is possible that he initiated the call by asking her whether she was Susan Chua. She would presumably have replied yes. The caller then asked whether the defendant was acting for Lum Whye Hee. She answered “Yes, [I] received a fax copy naming…Vision Law as…vendor’s lawyers”. Counsel for the plaintiffs suggested to her that the reason for the caller’s query must have been because the inquirer was thinking of buying the option from the purchaser. Susan Chua disagreed with that suggestion. Her evidence was that the question could equally have been asked by the purchaser himself (or someone on his behalf) to ensure that the vendor had duly authorised the defendant to accept the exercise of the option. She could not remember the caller asking any follow-up questions. She was adamant that the caller did not tell her that he was thinking of buying the option and that the caller did not ask her whether there was any problem with doing so.

  94. The first representation

  95. [53] Susan Chua’s evidence effectively admits making the first representation. She accepts that her caller asked her whether the defendant acted for Lum Whye Hee. She is clear that she replied: “Yes, [I] received a fax copy…naming Vision Law as…vendor’s lawyers”. The opening “yes” of her answer, coming as it did in response to a direct and unambiguous question, obviously addressed that question. It confirmed to the caller that the defendant indeed acted for Lum Whye Hee.

  96. [54] It also makes perfect sense for Susan Chua to have said this to the first plaintiff. She was simply telling him what she genuinely believed at the time of the conversation. She had seen the name “Lum Whye Hee” on the copy of the option faxed to her. She had conducted a title search on the property which confirmed that the registered owner was “Lum Whye Hee”. She had spoken to “Mr Lum” who had confirmed “his” handwritten instructions on the “option”. She noticed nothing unusual in any of this. I accept Susan Chua’s evidence that it never entered her mind that the “option” could be a forgery. All this led her genuinely to believe that “Mr Lum”, as a new client in a new matter, had instructed the defendant to act for “him” in selling 13A Jalan Berjaya. This was her state of mind when the first plaintiff called. So when he asked whether the defendant acted for “Lum Whye Hee”, it is perfectly consistent with these circumstances for Susan Chua to have answered “Yes” without qualification.

  97. The second representation

  98. [55] Susan Chua did not in terms or in effect admit making the second representation. However, I find it probable that after Susan Chua made her first representation to the first plaintiff, the first plaintiff moved the conversation on from the grantor of the option to the grantee of the “option”, Victor Tan. It seems wholly improbable to me that the first plaintiff ended his call to Susan Chua upon hearing her first representation. That would have been an unnaturally and improbably abrupt conversation. Further, that representation alone would not have addressed the first plaintiff’s purpose in calling Susan Chua in the first place. His purpose was not simply to check on the identity of the grantor of the “option” or on the defendant’s role as the grantor’s solicitors but more importantly to inquire about the grantee, Victor Tan. It was Victor Tan, and not Lum Whye Hee, who was to be the counterparty to the transaction which the plaintiffs were contemplating at that time. I therefore find it likely that the first plaintiff continued his conversation with Susan Chua by asking her the follow up question which he testifies that he did.

  99. [56] In the course of that continued conversation, I find it likely that Susan Chua made the second representation. Just like the name of the grantor and the role of the defendant – the subject-matter of the first representation – Victor Tan’s name was also set out in the option. When asked about the grantee, it would have been entirely natural, and therefore probable, for Susan Chua to confirm to the first plaintiff that Victor Tan was the grantee, based on what she saw in her copy of the “option” and based on what I find she genuinely believed at that time.

  100. The third representation

  101. [57] I find on the balance of probabilities that the first plaintiff did not ask the third and final question which he says he asked Susan Chua in this conversation; and, even if he did, I find that Susan Chua did not answer it by making the third representation. I make these findings for the following five reasons.

  102. [58] First, the final question is a very wide, open-ended question, posed at a very high level of generality. It can certainly be answered with a simple yes or no. But a moment’s analysis shows that a simple yes or no answer is meaningless to the questioner. The final question does not explain what the first plaintiff means by the words “any problem”. Is he asking whether there are any problems with Lum Whye Hee’s title to 13A Jalan Berjaya? Or is he asking whether the “option” Lum Whye Hee granted to Victor Tan is assignable in law such that the plaintiffs can take the ultimate conveyance as Victor Tan’s nominees? Or is he asking whether Lum Whye Hee or Victor Tan lack the capacity – for example by reason of mental incapacity or insolvency – to dispose of their proprietary or contractual rights? Or is he asking whether Lum Whye Hee and Victor Tan are persons who can be trusted? These questions – and many, many more – are all aspects of the single, broad, final question which the first plaintiff says he asked of Susan Chua. Nothing in the words of that question or in the context which the first plaintiff supplied when asking it – which on his own evidence was limited – indicates which aspect of the question the first plaintiff wanted answered. In the circumstances, I find it improbable that the first plaintiff would have asked such a broad question.

  103. [59] Second, the nature of the final question and the representation which the first plaintiff says it elicited is completely different from that of the earlier questions and the representations they elicited. Those earlier questions and representations relate to issues of pure fact: the identity of the vendor, the identity of the vendor’s solicitors and the identity of the grantee of the “option”. Further, these issues of pure fact are issues which an inquirer like the first plaintiff would be likely to expect to be within Susan Chua’s knowledge and within her competence to answer. And they in fact were. That makes it likely that an inquirer would ask Susan Chua questions about these issues of fact. That also makes it likely that Susan Chua would have answered those questions and made the first and second representations. The third question and representation are completely different. The question is not one of fact but, in effect, seeks legal advice. Indeed what it seeks goes beyond legal advice. For the reasons set out at [58] above, the question is so open-ended that it is in fact seeking legal and commercial advice. The first plaintiff admits that Susan Chua did not identify herself to him as a lawyer. It appears to me highly improbable that the first plaintiff, whom I find to be a shrewd individual, would call up a law firm which he has never dealt with, speak to a person whom he does not know, and whom he does not know to be a lawyer, and ask that person for legal and commercial advice.

  104. [60] Third, even if the first plaintiff had put that wide, open-ended question to Susan Chua, I find it highly unlikely that she would have answered a question of that nature at all, let alone with a simple yes or no. I assessed Susan Chua’s demeanour in the witness box. Susan Chua is a conveyancing secretary with an “O”-Level education. In court, she was a diffident and careful witness. That demeanour, in my view, reflected her true personality and was not the result of the artificial and inevitably intimidating environment of the courtroom. She did not speculate on matters outside her domain. And her domain, without intending any disrespect, is implementing the defendant’s clockwork-like standard operating procedure for routine conveyancing. For the reasons set out in [58] and [59] above, I have found it highly improbable that the first plaintiff asked the question which he says elicited the third representation. Those same reasons apply equally to make it highly improbable that a cautious person like Susan Chua – being a non-lawyer and speaking to a stranger whom I find was not identified to her as a client, as a prospective client or as a client’s counterparty – would have answered that stranger’s request for legal and commercial advice with an unequivocal yes or no.

  105. [61] I am of course aware of the risks of relying on demeanour alone to make critical findings of veracity or mendacity: Sandz Solutions (Singapore) Pte Ltd v Strategic Worldwide Assets Ltd [2014] SGCA 27 a [42]-[56]. That is why I do not rely on my assessment of Susan Chua’s demeanour alone to make my finding that she did not make the third representation as alleged. Instead, I rely on her demeanour to support the reasonable inferences which I draw and analyse in these paragraphs based on the undisputed and indisputable facts and the inherent probabilities.

  106. [62] Fourth, if the plaintiffs in fact wanted legal and commercial advice on 20 September 2010, they had throughout that day – and indeed, throughout the preceding weekend – the means to contact Lee Ping of WLaw, the lawyer whom they eventually instructed to act for them in purchasing 13A Jalan Berjaya (see [26] above). The second plaintiff had had direct dealings with Lee Ping from an earlier conveyancing transaction in which the second plaintiff had instructed Lee Ping on behalf of the second plaintiff’s mother. The second plaintiff thus had Lee Ping’s email address and mobile phone number in hand over the weekend. She could also have called Lee Ping through WLaw’s switchboard on 20 September 2010. Indeed, one of the very first acts of the second plaintiff, immediately after the plaintiffs had handed their cheque for $105,200 over to Victor Tan posing as “Lucas Ong”, was to instruct Lee Ping at 10.51 pm on 20 September 2010 to look over the documents (see [25] above). It is highly improbable that the plaintiffs, having Lee Ping’s contact details in hand on 20 September 2010, and having been shrewd enough to seek her advice on that very day (albeit not before handing over $105,200 to Victor Tan) would have preferred to ask Susan Chua on 20 September 2010 for legal and commercial advice, knowing that the defendant acted for the counterparty (Lum Whye Hee) of their proposed counterparty (Victor Tan) and not even knowing whether she was professionally qualified to give that advice.

  107. [63] Finally, I find it very telling that the third representation made a very late entry indeed in the plaintiffs’ case. The plaintiffs’ positive case in this action, set out in their statement of claim filed on 18 October 2011, alleged only that the defendant, through Susan Chua, had made the first representation and no others. The plaintiffs made no reference whatsoever to the third representation in any correspondence, in any pleading or in any affidavit until it was introduced for the first time in the plaintiffs’ Reply filed on 23 November 2011. That was a month after the plaintiffs had pleaded their positive case in their statement of claim and more than a year after the third representation was said to have been made. Indeed, the third representation did not become a part of the plaintiff’s positive case (ie part of their statement of claim as opposed to appearing in their reply) only when they amended the statement of claim on the first day of trial.

  108. [64] Most importantly, D&N did not refer to the third representation in its letter before action dated 1 April 2011 (see above at [43]). The first plaintiff accepted that D&N was instructed at the latest by 27 October 2010 and that by 1 April 2011, the plaintiffs had given D&N the full story and the whole truth about the events of September 2010. D&N’s letter of 1 April 2011 restates the facts leading up to the plaintiffs’ handing over $105,200 to Victor Tan. In the course of that, the letter recounts the telephone call between Susan Chua and the first plaintiff as follows:

  109. [65] Paragraph 10 of the letter sets out what the plaintiffs say was the consequence of the Representation:

  110. [66] There are two significant points from these paragraphs. First, they allege that Susan Chua made only one representation (that the defendant acted for Lum Whye Hee). Second, it alleges that the plaintiffs relied only on that one representation when they paid the $105,200 to Victor Tan. The letter makes no allegation that Susan Chua made the third representation. The third representation is an afterthought.

  111. [67] It is true that this letter does not allege that Susan Chua made the second representation either: a representation which I have found that Susan Chua probably made. But from the context in which Susan Chua’s conversation with the first plaintiff took place – with her speaking with the faxed option in hand, or at the very least in mind – that second representation is a natural consequence or extension of the first representation. But as I have explained, the third representation is of an entirely different nature. It amounts to the defendant’s employee giving legal and commercial advice to the first plaintiff that she sees no problem in the plaintiffs adopting the very course which has now caused them loss. That representation is the very essence of the plaintiffs’ negligent misrepresentation claim. That was the only cause of action the plaintiffs relied on until they reformulated their claim during trial to include by amendment a cause of action for breach of warranty of authority.

  112. [68] As the plaintiffs’ case stands before me, the third representation is the most important of the three. Thus, the first plaintiff’s evidence in chief gives pride of place to the third representation. After setting out his account of the three representations cited in [21] above in his affidavit of evidence in chief, the first plaintiff concludes as follows:

  113. [69] This passage shows that the first plaintiff was relying primarily not on the first representation, or even on the first and second representations taken together. It was the third representation which was the crucial assurance. Indeed, the first plaintiff seems to refer to the first and second representations merely to set the conversational context for the third representation.

  114. [70] The first plaintiff was cross-examined on this omission. His explanation was that he told D&N about the second and third representations but left it in D&N’s discretion to abridge his account of the facts. Even if that explains the omission in the letter before action, it does not explain its absence in the correspondence with the defendant which followed 1 April 2011 or in the statement of claim filed on 18 October 2011. It is one thing to omit an essential allegation on a single occasion, on the basis that it is not necessary to mention it on that occasion (ie, in a letter before action). It is quite another to omit that essential allegation from all subsequent correspondence and more importantly, from a statement of claim which was presumably drafted to put the plaintiffs’ best case forward in litigation, unabridged. If Susan Chua had in fact made the third representation, I find it inexplicable that it did not feature anywhere in the plaintiff’s case until 23 November 2011.

  115. [71] For the reasons given above, I accept the defendant’s submission that the plaintiffs’ evidence of the third representation is an afterthought which I should, and do, reject.

  116. Susan Chua made her representations in the course of her employment

  117. [72] Having found that the first representation was made, that the second representation was likely to have been made and that the third representation was not made, the next question is whether the defendant can, in principle, be held liable for the consequences of Susan Chua’s two representations. The plaintiffs argue: (a) that those representations are directly attributable to the defendant and were therefore in reality its representations; alternatively (b) that Susan Chua made her representations in the course of her employment such that the defendant can, in principle, be held vicariously liable for their consequences.

  118. [73] Both of the plaintiffs’ submissions would fail in the usual case involving the usual law firm and the usual conveyancing (or other) secretary. A conveyancing secretary’s acts are not ordinarily attributable to the law firm he works for. He is neither a partner nor a director of the firm and is not the firm’s controlling mind and will. Further, the scope of a conveyancing secretary’s employment does not ordinarily encompass dealing with members of the public on the firm’s professional work. A conveyancing secretary does not have the legal education or training necessary to give legal advice. Indeed, because he is not an advocate and solicitor, he is prohibited by law from doing so. It is not part of his employment to act of his own accord even to disclose information about the firm’s professional business, whether such disclosure is to a client, a client’s transactional counterparty or, for even stronger reasons, to a member of the public. But, as I will show, the defendant is not the usual law firm and its conveyancing secretaries are not the usual conveyancing secretaries. I say this for four reasons: (a) the defendant’s conveyancing secretaries develop business for the defendant; (b) they are – and are intended to be – the first point of contact for property brokers and potential clients; (c) they work without the supervision of solicitors; and (d) they communicate with members of the public on the defendant’s professional work.

  119. The defendant’s conveyancing secretaries develop business

  120. [74] The defendant’s Toa Payoh branch, where Susan Chua works, specialises in conveyancing. Leong Li Lin is a conveyancer and, as I have mentioned above (see [29]), was the sole solicitor in the defendant’s conveyancing practice. The defendant employed her as a legal assistant from September 2009 to February 2011. Like Susan Chua, Leong Li Lin was merely an employee of the defendant. She had no role in the defendant’s management and was never one of its directors. The role which the defendant’s management assigned to Leong Li Lin was not the usual role of a solicitor. The usual role of a solicitor is to develop business, to execute the firm’s professional work and to supervise others in the defendant (whether lawyers or otherwise) in executing the firm’s professional work. As Leong Li Lin explained in evidence, the defendant’s clockwork-like system assigns virtually all of that work to its conveyancing secretaries.

  121. [75] All of the defendant’s conveyancing secretaries, including Susan Chua, are concurrently designated as its business development managers. The defendant issues them business cards. Susan Chua’s business card explicitly mentions her role in developing business for the defendant. In performing her business development role, Susan Chua attends property brokers’ conferences and seminars and distributes her business cards to other attendees with a view to attracting business for the defendant.

  122. The defendant’s conveyancing secretaries are the first point of contact for brokers

  123. [76] The plaintiffs put in evidence a printed copy of the defendant’s internet brochure (Exhibits P1 to P4) as it stood at the time of trial. The brochure is intended to attract business, or at the very least to attract inquiries with a view to attracting business. The brochure is hosted on the website of PropNex, a property broker. The brochure carries a banner heading which reads as follows:

  124. [77] Under that banner heading are three subheadings. Arranged under the subheadings are the photographs, names, mobile phone numbers and email addresses of twelve individuals. The first subheading reads “For Enquiries, please contact”. Under that subheading appear two individuals: an Agnes Tan and a Lilian Tan. Agnes Tan is identified both as a “Paralegal” and as a “Business Development Manager”. Lilian Tan is identified simply as a “Business Development Manager”. Neither of them is a lawyer. The second of the three subheadings reads “Private Properties Department”. Under that subheading appear the photographs of four individuals. The final subheading reads “HDB Properties Department”. Susan Chua’s photograph and details are the first to appear under this subheading.

  125. [78] None of the individuals who appear in this brochure – leaving aside Agnes Tan and Lilian Tan – carry any designation at all. This includes Susan Chua. It is true that the brochure does not positively designate any of the remaining ten individuals as a lawyer. But it equally gives no indication that any of these ten individuals is not a lawyer. In that sense, the brochure is ambiguous. Someone with the background knowledge that I have gained from the evidence before me will be able to resolve the ambiguity and draw the inference that the ten undesignated individuals are not solicitors. But an ordinary reader of the brochure, not knowing what I know, might well not be able to resolve the ambiguity.

  126. [79] The critical point about the brochure, though, is not how these individuals are or are not designated. The critical point is that it shows clearly that part of the defendant’s business model is to invite the public – or at least a section of the public – who wish to refer conveyancing matters to the defendant to communicate directly and in the first instance with the defendant’s conveyancing secretaries rather than with a conveyancing solicitor. And the defendant’s conveyancing secretaries took on this role: Leong Li Lin confirmed in evidence that some of them were more successful at developing business for the defendant than others (see the quotation from the evidence at [82] below).

  127. The defendant’s conveyancing secretaries are the first point of contact for potential clients

  128. [80] One of the defendant’s witnesses was Sega Param. He was a director of the defendant at the time of trial. He was not a director of the defendant when the critical events in this action took place in 2010 and 2011. I have more to say about the significance of this point at [92] below. Sega Param gave evidence that the defendant’s internet brochure was designed for and directed at property brokers. But it was not suggested that access to the brochure was restricted to PropNex brokers or even to property brokers generally. Indeed the plaintiffs had no difficulty gaining access to it at the time of trial in order to put it in evidence.

  129. [81] More importantly, Leong Li Lin confirmed in cross-examination that the defendant’s business model contemplates not just brokers but also potential clients communicating directly with its conveyancing secretaries:

  130. The defendant’s conveyancing secretaries work unsupervised by a solicitor

  131. [82] The defendant’s conveyancing secretaries not only develop the defendant’s professional business, it is they who initiate the file-opening procedure, thereby accepting a person as the client of the defendant, and who handle the file thereafter:

  132. [83] Second, the defendant’s conveyancing secretaries carry out the defendant’s professional work, and do so without the supervision of a solicitor:

  133. The defendant’s conveyancing secretaries communicate with members of the public on the defendant’s professional work

  134. [84] Most importantly, Susan Chua confirmed that she is expected to and does receive calls not only from actual and potential clients in order to develop business for the defendant or to carry it out, but also from members of the public who are not actual or potential clients. That includes the counterparties of the defendant’s clients, after conveyancing transactions are under way. Thus, Susan Chua acknowledged:

  135. [85] Leong Li Lin confirmed this in her evidence:

  136. [86] Sega Param admitted that it was foreseeable that members of the public would call Susan Chua, although he tried to draw the sting of that admission by denying that she had the defendant’s authority to speak for it.

  137. [87] Sega Param’s final point misses the point. The question at this stage of the analysis is not whether Susan Chua had the defendant’s authority (as that term is used in the law of agency) to make the representations she did to the first plaintiff on 20 September 2010. The question is whether Susan Chua was acting within the scope of her employment when she did so. Therefore, the concluding question and answer in the passage I have quoted above from Sega Param’s cross-examination does not detract from the essential point he confirmed in the preceding questions and answers. It was foreseeable to the defendant – because it was intended by the defendant – that members of the public would communicate with the defendant’s conveyancing secretaries on the defendant’s professional work.

  138. The defendant’s business model

  139. [88] A law firm is undoubtedly a business. It must be run along commercial lines. Its management has an entirely legitimate interest in ensuring that the firm generates enough revenue not only to cover its overheads but also to make a profit for its proprietors. Running a conveyancing practice profitably, particularly a retail conveyancing practice, poses special difficulties. Conveyancing is now a commoditised, low-margin practice area. To be profitable, it must be run at high volume. That in turn requires management to devise and implement an efficient system which, on any particular matter, minimises the time spent by a solicitor on it by maximising the time spent by non-solicitors. So long as management observes the bounds of law and ethics, all of these responses to commercial pressures are normal and entirely compatible with the obligation to run a professional practice professionally. What is not compatible with that obligation is a law firm which responds to those pressures by adopting a business model which depends on its conveyancing secretaries both to develop its business and to carry out its business, all without the supervision of a solicitor. That appears to be what the defendant in this case has done.

  140. [89] On the unusual facts of this case, therefore, I am satisfied that the defendant intended Susan Chua in the course of her employment, like all of the defendant’s conveyancing secretaries, to speak to members of the public, ie persons who were not the defendant’s actual or potential clients or their representatives, about the defendant’s clients’ ongoing transactions. I therefore find that when Susan Chua made the first and second representations to the first plaintiff on 20 September 2010, she did so in the course of her employment by the defendant as a conveyancing secretary.

  141. Defendant chose not to have the directors involved testify

  142. [90] I make this last finding based on the clear weight of the evidence of Sega Param, Leong Li Lin and Susan Chua herself. It is true, however, that Leong Li Lin and Susan Chua could not speak for the management of the defendant because neither of them was ever a director of the defendant.

  143. [91] Sega Param, as a director of the defendant at the time of trial, was the witness who came the closest to speaking for the defendant’s management. But even he was not a director of the defendant in September 2010. His evidence of the defendant’s business model and working practices as they stood in September 2010, or even of the actual events of September 2010, was inadmissible hearsay. By his own admission, it was “derived from records” and therefore not within his personal knowledge.

  144. [92] Sega Param’s evidence on the defendant’s business model and working practices after he joined it was direct evidence, within his personal knowledge, and therefore admissible. The directors of the defendant in September 2010 were Eric Ng Chin Boon, Ong Boon Leng and Stanley Ang. None of them came forward to explain away the unusual features of the defendant’s business model which I have found on the evidence available to me and which are identified at [72] to [87] above. Neither did Rayney Wong, who it appears assisted the defendant in 2010 and 2011 in dealing with the aftermath of Victor Tan’s fraud and in overseeing how the defendant handled the plaintiffs’ claim and lawsuit.

  145. [93] If the evidence of Leong Li Lin, Susan Chua and Sega Param left any misapprehension about the defendant’s business model and working practices in September 2010, it was incumbent on the defendant to bring forward a director to dispel that misapprehension with direct evidence. The defendant did not do so.

  146. [94] There was therefore no evidence before me from a director who was in office in September 2010 to suggest that the defendant’s business model and working practices in September 2010 were any different from the account given by Sega Param of the position at the time of trial. Likewise, there was no evidence to suggest that the evidence of Leong Li Lin and Susan Chua on the facts should be seen in a different light. All of this fortified me in drawing the conclusions which I did from the evidence of Leong Li Lin, Susan Chua and Sega Param about the position in September 2010.

  147. Conclusion

  148. [95] For all of these reasons, therefore, I find that Susan Chua acted within the scope of her employment when she spoke to the first plaintiff on 20 September 2010 and when she made the two representations which I have found she did. Any liability for those representations is therefore properly attributable to the defendant.

  149. [96] This is a crucial threshold finding for the plaintiff’s case. But this finding does not in itself fix the defendant with liability. The plaintiff must also establish one of the causes of action on which it relies: (a) fraudulent misrepresentation; (b) negligent misrepresentation; or (c) breach of warranty of authority. Before dealing with them in that order, it is useful to sketch a brief taxonomy of the law of torts so as to situate in context the three bodies of principles on which the plaintiff relies.

  150. A top-down approach to the law of torts

  151. [97] The incremental tradition of the common law has meant that the law of torts has developed bottom-up over the centuries as specific cases have come up for determination before specific judges. (Note that I speak here of the law of torts and not (yet) of the law of negligence.) Although it developed and is now applied bottom-up – on a case by case basis – the law of torts can usefully be analysed top-down. That analytical approach offers valuable conceptual insights. It has been developed with great detail and intellectual rigour in the various works of Professor Peter Cane, in Professor Robert Stevens’ Torts and Rights (Oxford University Press, 2009) (“Torts and Rights”) and in Professor Allan Beever’s Rediscovering the Law of Negligence (Hart Publishing, 2007).

  152. [98] Approached top-down, the law of torts emanates from a single moral precept. That moral precept is the ethic of reciprocity. This precept is universal. It is found in nearly every culture, religion and ethical system. In the English language, it is best known as the golden rule. That is the name which the Christian tradition gives it. The golden rule is a mandatory injunction to do good: “Therefore all things whatsoever ye would that men should do to you, do ye even so to them”: (Matthew 7:12, King James Version). But while a mandatory injunction to do good is a valid moral imperative, it is far too wide to be a valid legal imperative: Stovin v Wise [1996] AC 923 at 943F to 944C per Lord Hoffman. It covers much more than the minimum ground required to regulate our behaviour as we interact with each other in everyday life. It also conflicts with the importance which the common law attaches to personal autonomy. And its injunction to do good is impossible to enforce.

  153. [99] To arrive at a functional and practical legal imperative, the common law inverts the golden rule into a prohibitory injunction. You must do no harm to others that you would not want others to do to you: See Toh Siew Kee v Ho Ah Lam Ferrocement (Pte) Ltd and others [2013] 3 SLR 284 (“See Toh Siew Kee”) at [22]-[24]. As a moral precept, this is somewhat less aspirational than the golden rule. So Carl Sagan has dubbed it the silver rule.

  154. [100] Because it is the silver rule and not the golden rule which the common law enforces, the default position at common law is that you are not liable for failing to do good to another. It is not, therefore, a wrong to fail to confer a benefit on another or to protect another from harm: Stovin v Wise. But even the silver rule is far broader than necessary to regulate everyday life. It is a breach of the silver rule for you to hurt my feelings. It is a separate question entirely whether it should be a legal wrong, entailing legal liability, for you to do so. That then is the function of the law of torts: to identify those aspects of the silver rule which are sufficiently fundamental to everyday life as to constitute an exception to the common law’s default rule against liability and to offer a remedy for a breach.

  155. [101] For each of these aspects, the law of torts establishes a legal duty not to breach the silver rule. But if you are under a duty to me, then I have a correlative right against you. That is a right in the truest sense of the word, because it is a correlative right, the direct reciprocal of a duty. The law of torts thereby vests implicitly in each of us a set of fundamental rights, each of which is an aspect of the silver rule and the infringement of any of which yields a remedy.

  156. [102] Although the law of torts vindicates each of these fundamental rights, it does not create all of them. Some of these fundamental rights arise outside the law of torts. For example, property rights are created by the law of property. The law of torts takes rights of property as a given and vindicates those rights by offering a remedy to their holder for an infringement. But some of the fundamental rights which the law of torts vests in us by implication are created in and by the law of torts itself. Thus, when the law of torts first awarded compensation for personal injuries, it thereby recognised a fundamental right of bodily safety. By that same process of implication, the law of torts has vested in us a right to be free of harm to reputation and to be free of psychiatric harm.

  157. [103] This body of fundamental rights develops differently in different societies, as the law responds to the particular circumstances of that society. Thus, for example, the English law of torts does not recognise a fundamental right to be free from economic harm which is inflicted negligently: Spartan Steel & Alloys Ltd v Martin & Co (Contractors) Ltd [1973] QB 27. Singapore law does: Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100 (“Spandeck”) at [69].

  158. [104] This body of fundamental rights also develops over time, within the same society, as the law responds to changes within that society. Thus, for example, Lee Seiu Kin JC (as he then was) in 2001 granted a remedy to a plaintiff for deliberate harassment by a defendant: Malcomson Nicholas Hugh Bertram and another v Mehta Naresh Kumar [2001] 3 SLR(R) 379. That was the first time Singapore’s law of torts had ever acknowledged such a remedy. By so doing, Lee Seiu Kin JC recognised – in the incremental tradition of the common law – that changes over time had resulted in new technologies and had turned Singapore into an urbanised society, all of which made it just that the law of torts should recognise a duty on each of us not deliberately to harass another. The scope of that duty and, in particular, whether a breach of that duty can be vindicated by anything other than injunctive relief, is left to be worked out on a case by case basis. But by this first step, Singapore’s law of torts recognised a new fundamental right. The English common law of torts chose not to recognise the same right: Hunter v Canary Wharf Ltd [1997] AC 655.

  159. [105] All of this raises fundamental issues about the province of a common law judge in the 21st century. Can a judge legitimately add to the list of fundamental protected rights which the common law of torts has handed down to us, recognising that that list has been developed bottom-up, and therefore comes to us largely for historical rather than conceptual reasons? Or should a judge, acknowledging that he is unelected, confine himself merely to shaping the contours of the existing set of fundamental rights recognised by the law of torts and leave law reform to the elected legislature? Lee Seiu Kin JC felt that the answer to the former question was yes and to the latter no. Choo Han Teck J more recently expressed the opposite view: AXA Insurance Singapore Pte Ltd v Chandran s/o Natesan [2013] 4 SLR 545 at [8] and [10].

  160. [106] On a top-down analysis, the tort of negligence is a misnomer. When the law of torts recognises a new fundamental right, it also determines the quality of the conduct which will trigger liability for an infringement of that right: whether that right can be infringed without fault, negligently or only intentionally. Nominate torts are named after – or by reference to – the fundamental right which the tort vindicates, and not the quality of the conduct which triggers a remedy. The tort of false imprisonment vindicates a fundamental right to freedom of movement. The tort of trespass to the person vindicates a fundamental right to bodily safety. The tort of defamation vindicates a fundamental right of reputation. Some nominate torts are torts of strict liability and others require intention. But each of these torts is named after the fundamental right which it protects.

  161. [107] The tort of negligence is the only tort named for the quality of the defendant’s conduct rather than the right which the tort protects. It could be said that this is not a misnomer. It could be said that it is indeed an aspect of the silver rule that you shall not cause harm to another through negligence because, by the ethic of reciprocity, you would not want to suffer harm through the negligence of another. The logical result of that view would be to make negligence in itself a wrong and thereby to elevate freedom from negligence into a correlative fundamental right. But that is not the law. There is no general duty to be careful: Spandeck at [29] per Chan CJ; Hedley Byrne v Co Ltd v Heller & Partners Ltd [1964] AC 465 (“Hedley Byrne”) at 514 per Lord Devlin and 534 per Lord Pearce. There is at common law no fundamental right to be free of harm caused by negligence. Even within the tort of negligence, therefore, the common law’s default rule is against liability.

  162. [108] The tort of negligence is so named because of the bottom-up way in which it has developed. That has inevitably led the inquiry in each particular case to focus on the quality of the defendant’s conduct because it is that conduct which has caused the harm. But if it is accepted that the law of torts serves to vindicate a set of fundamental rights, the focus of the inquiry in each case, and particularly in a novel case, ought to be on whether the law recognises a fundamental right of the plaintiff which has been infringed.

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