Case Summaries

SGB Starkstrom Pte Ltd v The Commissioner for Labour

22 April 2016

 Media Summary

 Court of Appeal Civil Appeal No 89 of 2015

SGB Starkstrom Pte Ltd v The Commissioner for Labour [2016] SGCA 27

Background to the application

  1. Two issues came up for decision in this appeal. The first was whether a next-of-kin who had not been appointed a deputy under the Mental Capacity Act (Cap 177A, 2010 Rev Ed) (“Mental Capacity Act”) could make a claim for compensation under the Work Injury Compensation Act (Cap 354, 2009 Rev Ed) (“WICA”) on behalf of a mentally incapacitated employee. The second was whether the appellant, SGB Starkstrom Pte Ltd, could rely on the doctrine of substantive legitimate expectations to obtain the relief it sought.

Facts

  1. On 19 March 2009, Mr Tan Yun Yeow (“the Injured Employee”), an employee of the appellant, was involved in a workplace accident. He suffered serious injuries, which rendered him mentally incapacitated. On 20 May 2010, his brother, Mr Rodney Tan, made a claim for statutory compensation under the WICA on his behalf (“the Disputed Claim”). When he did so, Mr Rodney Tan had not been authorised to act on his brother’s behalf under the Mental Disorders and Treatment Act (Cap 178, 1985 Rev Ed), which was the prevailing legislation and the equivalent of the Mental Capacity Act at that time.

  2. The WICA establishes a statutory compensation scheme for employees who suffer injuries in the course of employment. This statutory compensation scheme generally offers a more certain, faster and lower cost alternative to pursuing a common law claim for damages arising from workplace negligence. However, the compensation received under the WICA would generally be less than the damages which may be obtained following a successful common law claim. Under s 33(2) of the WICA, an employee who elects to pursue his claim under the WICA forgoes his rights to bring ordinary legal proceedings for damages.

  3. On 14 June 2010, the Commissioner of Labour (“the Commissioner”) accepted the Disputed Claim and issued a Notice of Assessment pursuant to s 24(2) of the WICA (“the Notice of Assessment”). In her assessment, the compensation payable to the Injured Employee was $225,000, which was the maximum the Injured Employee could recover under the WICA. The appellant’s insurers paid the sum of $225,000 to the Commissioner. Mr Rodney Tan, however, changed his mind about making a claim under the WICA. He wrote to the Commissioner taking the position that the Disputed Claim and the Notice of Assessment were invalid in law because he had not been properly authorised to make the Disputed Claim on his brother’s behalf on 20 May 2010. He also informed the Commissioner of his intention to pursue a claim for damages under the common law instead.

  4. The Commissioner initially maintained the position that the Disputed Claim was a valid one. Mr Rodney Tan then commenced judicial review proceedings in Originating Summons No 265 of 2014 (“OS 265/2014”) on behalf of his brother, applying to quash the Commissioner’s decision that the Disputed Claim was valid. Subsequently, however, having further considered the legal position, the Commissioner took the position that Mr Rodney Tan had no authority to bind the Injured Employee on 20 May 2010, and hence, that the Disputed Claim as well as the Notice of Assessment were invalid. When the appellant was notified of the Commissioner’s change of position, it commenced separate judicial review proceedings in Originating Summons 918 of 2014 (“OS 918/2014”) to quash the Commissioner’s subsequent decision that the Notice of Assessment was a nullity and issued in error. The appellant did so because if the Disputed Claim was validly made, then the Injured Employee would have forfeited his right to a potentially larger common law claim for damages. Mr Rodney Tan was appointed as the Injured Employee’s deputy under the Mental Capacity Act on 23 August 2012. He has commenced common law proceedings as deputy of the Injured Employee against the appellant and some other parties. 

  5. The High Court granted the relief in OS 265/2014 and dismissed OS 918/2014. The judge found that Mr Rodney Tan, not having been properly authorised at the time, could not elect to claim compensation under the WICA on behalf of his brother on 20 May 2010. It followed that the Disputed Claim and the Notice of Assessment were invalid.

    The outcome of the appeal

  6. The appellant appealed against the High Court’s decision in OS 918/2014. On appeal, it argued that the Disputed Claim was valid notwithstanding the fact that Mr Rodney Tan had not been appointed his brother’s deputy on or before 20 May 2010. The appellant also argued that in the alternative, it had a substantive legitimate expectation that the Disputed Claim was valid because the Commissioner had represented it to be so, and had accepted its payment of $225,000 pursuant to the Notice of Assessment. The appellant thus asserted that its legitimate expectation should be protected.

  7. The unanimous decision of the Court of Appeal was that the appeal should be dismissed. The Court of Appeal agreed that Mr Rodney Tan was not properly authorised to make the Disputed Claim on his brother’s behalf. The court also held that even assuming the doctrine of substantive legitimate expectations was a part of Singapore law, it did not apply on the facts.

Issue 1: Legal capacity

  1. On the question of legal capacity, the court held that Mr Rodney Tan had to be properly authorised before he could elect to claim compensation under the WICA on the Injured Employee’s behalf: SGB Starkstrom Pte Ltd v The Commissioner for Labour [2016] SGCA 27 (“the GD”) at [22]. In Singapore, the Mental Capacity Act was the prevailing legislation governing the conferment of authority on a third party to manage the affairs of a mentally incapacitated person: the GD at [25]. Given that the WICA did not establish a separate framework that enabled third parties to bring a claim on behalf of a mentally incapacitated worker, Mr Rodney Tan could only elect to claim compensation under the WICA if he had been appointed as his brother’s deputy under the Mental Capacity Act: the GD at [27]. In reaching this conclusion, the court observed that Parliament could not have intended to prioritise speed and the minimisation of cost over the need to ensure that there existed proper safeguards in empowering a representative to act on behalf of a mentally incapacitated employee and to bind that employee to decisions made on his behalf by the representative: the GD at [31].

    Issue 2: Substantive legitimate expectations

  2. The second issue that arose for decision related to the doctrine of substantive legitimate expectations. The doctrine of substantive legitimate expectations is a doctrine which requires a public authority, in certain circumstances, to act in accordance with representations it has made to members of the public as to how it will exercise its powers or will otherwise act in the future. The doctrine is generally invoked when (a) a public authority has, by its actions, induced an expectation that it will act in a particular way; (b) a member of the public has reasonably relied on the public authority’s representations to his detriment; and (c) the public authority seeks to act in a manner contrary to the expectation induced. This doctrine has been accepted by the Singapore High Court in Chiu Teng @ Kallang Pte Ltd v Singapore Land Authority [2014] 1 SLR 1047, but has not been pronounced on by the Singapore Court of Appeal.   

  3. The court found that even assuming the doctrine of substantive legitimate expectations was a part of Singapore law, it did not apply on the facts of this case. The Commissioner had not made any actionable representation that she could be held to: the GD at [46]. She may have, as part of her official duties, assessed that the Disputed Claim was valid; but this was not an undertaking as to what she or the Ministry she represents would or would not do in future: the GD at [47]. Further, she could not, by her erroneous assessment about the legal validity of the Disputed Claim, bind the position of the Injured Employee: the GD at [47]–[48]. The court also held that after a claim has been found to be void in law, the doctrine of substantive legitimate expectations could not render the same claim valid: the GD at [51].   

  4. Given that the doctrine of substantive legitimate expectations did not apply in this case, the court found it preferable to defer the question of whether the doctrine was part of Singapore law to an occasion when it becomes essential for a decision to be made on the issue: the GD at [59]. However, the court made a few observations on the potential introduction of the doctrine:

    1. First, the court observed that the acceptance of the doctrine of substantive legitimate expectations would represent a significant departure from our current understanding of the scope and limits of judicial review: the GD at [59].

    2. Second, the court observed that while many compelling reasons for protecting legitimate expectations do exist, the countervailing public interest concerns which may arise in each case were generally of equal importance. The real issue was thus which body should decide whether the legitimate expectation should prevail over the countervailing public interests which may be at stake. This would raise questions regarding separation of powers, and the institutional competence of the court to decide issues which may have a wider impact on the public: the GD at [62].  

    3. Third, the court observed that there were a range of possible measures in between recognising a judicial power to enforce substantive legitimate expectations, and complete judicial abstinence when a public authority disregards a clear representation it has made, even if there has been reasonable and detrimental reliance: the GD at [63]. These possibilities would have to be examined and weighed should the issue come up for decision.

  5. In conclusion, the court dismissed the appeal and held that the Injured Employee’s right to pursue an action for damages was unaffected by the WICA.

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