I. Executive Summary

In the prior decision of How Weng Fan and others v Sengkang Town Council and other appeals [2022] SGCA 72 (the “How Weng Fan (Breach)”), the Court of Appeal (“CA”) held that the members and senior employees of the then-Aljunied-Hougang Town Council[1] (“then-AHTC”) had breached their tortious duty of care and skill owed to Aljunied-Hougang Town Council (“AHTC”) and to Sengkang Town Council (“STC”) in respect of their implementation of AHTC’s payment process (the “System”).[2] These members are Ms Sylvia Lim (“Ms Lim”), Mr Low Thia Khiang (“Mr Low”), Mr Pritam Singh (“Mr Singh”), Mr Chua Zhi Hon (“Mr Chua”) and Mr Kenneth Foo (“Mr Foo”) (collectively, the “Town Councillors”). As for the senior employees, they are Ms How Weng Fan (“Ms How”) and Mr Danny Loh (“Mr Loh”) (collectively, the “Employees”).

Ms Lim was also held to have breached her tortious duty of care and skill owed to AHTC and STC by causing the then-AHTC’s award of a contract to a company called Red-Power Electrical Engineering Pte Ltd (“Red-Power”) instead of renewing the contracts with other companies which offered the same services at significantly cheaper rates.

Despite these breaches of tortious duties, the CA observed that AHTC’s pleadings[3] with respect to these breaches appeared to have been inadequately pleaded. It hence left open the question as to the appropriate orders to be made.

Against this context, in the present case of How Weng Fan and others v Sengkang Town Council and other appeals [2023] SGCA 21, the CA addressed the seeming inadequacy of AHTC’s pleadings with respect to the Town Councillors’ and the Employees’ breaches of their tortious duties. It held, after clarifying the relevant legal principles of pleadings (in particular, when it may be appropriate for a court to find a party liable despite some possible shortcomings in the pleadings), that AHTC did not plead a case in tort against Mr Singh, Mr Chua, and Mr Foo in respect of their implementation of the System, and that they were therefore not liable to AHTC in this regard.  

As for Ms Lim’s award of the new contract to Red-Power, AHTC accepted that it did not plead a claim against Ms Lim in this regard, and hence that she would not be liable to AHTC.    

II. Background

In Aljunied-Hougang Town Council and another v Lim Swee Lian Sylvia and others and another suit [2019] SGHC 241, AHTC, as well as STC[4], had commenced suits against the Town Councillors and the Employees in the High Court (“HC”). Among other allegations, AHTC and STC claimed that the System implemented by the Town Councillors and the Employees was embedded with what they termed “control failures” (which were then allowed to persist), because it lacked any protocol or process to ensure the independent and objective assessment of the service levels of certain contractors.  

AHTC and STC also claimed that Ms Lim should not have awarded a certain new contract to Red-Power because Red-Power’s rates were many times higher than the rates that AHTC’s existing contractors were charging for the same services. By virtue of these actions, AHTC and STC claimed that the Town Councillors and the Employees had breached their fiduciary, equitable, and/or tortious duties owed to the then-AHTC.

It should be noted that AHTC’s and STC’s suits were not consolidated. This means that AHTC and STC ran independent cases, based on independent sets of pleadings, even though both suits involved claims arising from a largely common factual substratum, and were ordered to be tried together with the parties’ consent.

Following the trial in the HC, the trial Judge found the Town Councillors and the Employees liable for various breaches of fiduciary duties and equitable duties of skill and care owed to the then-AHTC between 2011 and 2015. The Town Councillors and the Employees appealed to the CA on the substantive merits of the case. 

Partially reversing the HC’s decision, the CA held that the Town Councillors and the Employees did not owe fiduciary or equitable duties to the then-AHTC. However, they were held to have owed a tortious duty of care and skill to the then-AHTC, which they had breached in implementing the System. Further, Ms Lim was held to have breached her duty of care and skill owed to the then-AHTC when she had awarded the new contract to Red-Power.

Notwithstanding these breaches, the CA did not make a final order. Instead, it had directed the parties to file further written submissions to address two issues arising out of what appeared to be AHTC’s inadequate pleadings on two areas (the “Outstanding Issues”).

First, in relation to the control failures in the System, AHTC’s pleaded case was that the relevant acts constituted a breach of fiduciary duties.[5] It did not plead that the Town Councillors had breached their duty of skill and care in tort in implementing the payment process, leading to the control failures in the System. The question thus arose as to what orders (on liability and apportionment towards AHTC and STC), if any, could the court make in respect of this claim (the “Control Failures Issue”).

Second, in relation to Ms Lim’s breach of her tortious duty of skill and care in causing the then-AHTC to award a new contract to Red-Power, it appeared that AHTC did not plead this claim. The question thus arose as to how, if at all, Ms Lim’s liability towards AHTC and STC should be apportioned on this issue (the “Red-Power Issue”).

III. Issues

Preliminarily, with respect to the Red-Power Issue, AHTC accepted that it did not plead a claim against Ms Lim regarding the award of the new contract to Red-Power, and confirmed that it was not praying for an order in its favour in respect of this claim made by STC. The CA thus held that Ms Lim was only liable to STC in relation to the award of the contract to Red-Power.

The CA then had to determine the following remaining issues pertaining to the Control Failures Issue:

  1. Did AHTC adequately plead that the Town Councillors had breached their duty of skill and care in tort in relation to the control failures in the then-AHTC’s System?
  2. If not, should the Town Councillors nevertheless have been held liable to AHTC for the control failures in the System?
  3. In the alternative, should AHTC have been permitted to bring a fresh application to amend its pleadings to include a claim against the Town Councillors for the breach of their duty of skill and care in tort in relation to the control failures of the System?
  4. If the answer to any of the above questions was in the affirmative, how should the Town Councillors’ liability owed towards AHTC and STC on the Control Failures issue have been apportioned?

IV. The CA’s decision

The CA first clarified the relevant legal principles on pleadings (in particular, when it may be appropriate for a court to find a party liable despite some possible shortcomings in the pleadings), before answering the first three issues raised in the negative. That being the case, the last issue was no longer applicable.

(A) The relevant legal principles of pleadings

The CA explained that pleadings form the cornerstone of Singapore’s civil justice system, serving at least a dual function. First, pleadings critically define the parameters within which a claimant’s claim and a defendant’s defence are mounted, which prevents either party from being taken by surprise. Second, pleadings assist the court by defining with clarity and precision the factual and legal issues that are in dispute and which fall to be determined by the court. This is vital to ensure the efficient conduct of the proceedings while also helping to conserve judicial resources. In overall terms, the purpose of pleadings is to ensure certainty, fairness and transparency in Singapore’s dispute resolution processes.

The general rule therefore is that parties are bound by their pleadings and the court is precluded from deciding matters that have not been put into issue by the parties. This would prevent injustice from being occasioned to the party who, because of the failure of the opposing party to plead, did not have a chance to respond to the claim or defence in question.

The CA then emphasised that there are, however, two important principles that qualify the general rule. First, only material facts need to be pleaded. Specifically, it is the material facts supporting each element of a legal claim that must be pleaded (the “Material Facts Principle”). On this basis, the particular legal result flowing from the material facts that the claimant wishes to pursue need not always be pleaded. Equally, the relevant propositions or inferences of law need not be pleaded. Therefore, for instance, a court may find a landlord liable to a tenant for trespass even if the tenant only pleaded a claim for a breach of covenant on quiet enjoyment, as long as the material facts pertaining to a claim in trespass were sufficiently pleaded.

Second, a narrow exception exists where the court may permit an unpleaded point to be raised (and to be determined) where there is no irreparable prejudice caused to the other party in the trial that cannot be compensated by costs[6] or where it would be clearly unjust for the court not to do so (the “Prejudice Principle”). Satisfaction of the former would probably be uncommon, but an example would be when a defendant clearly knew that it had to address the claimant’s reformulated claim (from what was originally pleaded), and had the opportunity to do so. 

Following the Material Facts Principle and the Prejudice Principle, the CA summarised[7] the relevant principles of pleadings:

  • Where the material facts of each element of the legal claim have been pleaded, albeit in support of a different legal conclusion than that which is subsequently advanced, the court will be more inclined to allow the legal claim unless there is clear evidence that the defendant will be unduly prejudiced. It will generally be for the party resisting the reformulated claim to show such prejudice.
  • Where the material facts of each element of the legal claim have not been pleaded, the court will only allow the legal claim if the court is satisfied that there will be no prejudice occasioned as a result because both sides engaged with the issue at trial. It will generally be for the party advancing the unpleaded claim to show that there is no prejudice and this could be shown, for instance, by establishing that the issue was raised in evidence, that it was clearly appreciated by the other party, and that no reasonable objections were taken at the trial to such evidence being led and to the point in question being put into issue.

(B) Whether AHTC adequately pleaded its case in tort

In accordance with the above principles, the CA held that what was key in the case at hand was whether AHTC had pleaded the material facts which supported each element of a tortious claim in negligence against the Town Councillors and the Employees (i.e. whether the Material Facts Principle had been adhered to). These elements are: (a) that a duty of care (b) was breached by the Town Councillors and the Employees, and that (c) this breach caused AHTC damage.

If not, the CA would then have had to consider the Prejudice Principle to determine whether the evidence adduced at trial supported each of these same elements of the tort of negligence such that the Town Councillors and the Employees knew the case they had to meet, and it would not cause them irremediable prejudice to find them liable for negligence for permitting the control failures to exist in the System.

(1) Application of the Material Facts Principle

Applying the Material Facts Principle, the CA observed, after examining AHTC’s Statement of Claim, evidence led at trial, and closing submissions made at trial, that AHTC did plead, albeit loosely, that Mr Low and Ms Lim had set up the “flawed” System. These were the material facts going towards the elements of a breach of a duty of care. AHTC also pleaded that the flawed System caused AHTC damage, as the flaws allowed Mr Loh and Ms How to be responsible for certifying work done, approving payments and/or signing cheques to certain contractors to benefit themselves from the very same payments.

As such, as against Mr Low, Ms Lim, Mr Loh, and Ms How, while AHTC did not expressly plead that the legal result of the pleaded facts resulted in the commission of the tort of negligence (that is, that a tortious duty of care was breached by Mr Low, Ms Lim, Ms How, and Mr Loh), AHTC did plead the material facts of the elements of this claim against these four individuals. The Material Facts Principle was thus satisfied. In other words, the CA was satisfied that AHTC had pleaded the material facts of each element of a claim in the tort of negligence against Mr Low, Ms Lim, Mr Loh, and Ms How for permitting the control failures to persist in the System.

Moreover, these four individuals would not be unduly prejudiced by a finding of liability in the tort of negligence for the control failures because AHTC had, through AHTC’s evidence led at trial and AHTC’s trial closing submissions, clearly put into issue the question of whether they had breached their duty of care owed to the then-AHTC by permitting the control failures in the System to exist. Hence, the CA held that they were liable to AHTC for a breach of their tortious duty of care for permitting the control failures in the System to exist.

In contrast, as against Mr Singh, Mr Chua, and Mr Foo, the CA held that the Material Facts Principle was not satisfied, because AHTC did not plead that any of them were involved in setting up or implementing the System. The CA thus had to go on to the next step to consider the Prejudice Principle to determine whether the evidence adduced at trial was such that Mr Singh, Mr Chua and Mr Foo knew that they had to defend against a case that they had breached their duty of care owed to AHTC by permitting the control failures to exist in the System.

(2) Application of the Prejudice Principle

Applying the Prejudice Principle to Mr Singh, Mr Chua and Mr Foo, the CA first observed that one of the claimants, PRPTC (which later became STC),[8] did run a case, and did adduce evidence, against the Town Councillors and the Employees regarding their breach of duty of care for the control failures in the System. Consequently, the Town Councillors and the Employees knew that this was a case which they had to meet, albeit against PRPTC and not AHTC.

However, the CA emphasised that it was important to distinguish between AHTC’s and PRPTC’s individual claims and to not conflate one party’s claim with another party’s claim, especially given the fact that the two suits were not consolidated but merely heard together.

Furthermore, AHTC did not cross-examine or put its case[9] to the Town Councillors and the Employees. Instead, AHTC relied on the cross-examination by PRPTC’s counsel. Neither did AHTC make any claim against Mr Singh, Mr Chua, and Mr Foo in its trial closing submissions.

In these circumstances, the CA held that AHTC did not run any case against Mr Singh, Mr Chua, and Mr Foo regarding the System. Consequently, the three of them did not know that they had to defend a case against AHTC that they had breached any tortious duties in relation to the System. It would thus unduly prejudice them for the court to then find them liable to AHTC in tort for a breach of duty in permitting the control failures to exist in the System.

(C) Whether AHTC should be permitted to make a fresh application to amend its pleadings

As an alternative submission, AHTC also contended that it should be allowed to make a fresh application to amend its pleadings (to include the claim that the Town Councillors had breached their tortious duty of care), and that the Town Councillors would not be prejudiced by this.

The CA rejected AHTC’s alternative submission. In doing so, the CA first highlighted the principles pertaining to the amendment of pleadings. Since the suits were commenced before 1 April 2022,[10] the statutory regime governing the amendment of pleadings would be Order 20 rule 5 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed). This provision affords the court a wide discretion to allow pleadings to be amended at any stage of the proceedings on such terms as may be just, including in the course of an appeal itself. However, the later an amendment application is made, the stronger the grounds required to justify it must be.  

The CA emphasised that the court must carefully consider two primary considerations before allowing an amendment. The first is whether the amendment sought would enable the real question and/or issue in dispute between the parties to be determined, thereby ensuring that the ends of substantive justice are met. The second requires that procedural fairness to the opposing party be maintained. A just outcome requires that neither consideration be made clearly subordinate to the other. The court must have regard to “the justice of the case” and must bear in mind two key factors: (a) whether the amendments would cause any prejudice to the other party which cannot be compensated in costs; and (b) whether the amendments are effectively giving the party who is applying for leave to amend a “second bite at the cherry” (i.e. a second opportunity to advance its case). All the relevant circumstances of the case at hand should be considered by the court in deciding whether to allow an amendment to pleadings.

Having explained the principles relevant to the amendment of pleadings, the CA then rejected AHTC’s application to amend its pleadings. For the same reasons given in the CA’s application of the Prejudice Principle detailed at Part IV(B)(2) above, the CA held that it would cause Mr Singh, Mr Chua and Mr Foo substantial prejudice that could not be adequately compensated in costs if an amendment to include a claim in tort in relation to the control failures in the System were to be allowed against them. This is because AHTC’s fresh amendment application was only made belatedly, after both the trial and the appeal judgments had been rendered. Moreover, if AHTC’s amendment application were to be allowed, it would be giving AHTC a “second bite at the cherry” when AHTC never ran any case in tort against the three individuals at trial.

In light of the above, the CA held that Mr Singh, Mr Chua, and Mr Foo could not be made liable to AHTC for the control failures in the System. They remained liable in damages, however, to STC in this regard. As for Mr Low, Ms Lim, Mr Loh, and Ms How, they remained liable to both STC and AHTC in damages for the control failures, to be apportioned subsequently after the damages have been assessed. Ms Lim was also held liable to pay STC damages (to be assessed) for causing the then-AHTC to award the contract to Red-Power.

V. Takeaways from this case

This case leaves all lawyers with a crucial reminder on the importance of always making proper and adequate pleadings. At the end of the day, a party will probably not be able to get any relief from the courts regardless of the strength of the substantive merits of its case unless it has properly pleaded its case.

The importance of making proper and adequate pleadings will probably be further amplified following the operation of the Rules of Court 2021 (“ROC 2021”) for proceedings commenced on or after 1 April 2022, which have tightened the rules pertaining to the amendment of pleadings. Under Order 9 rule 9(4)(f) of the ROC 2021, an amendment application must generally wait until the single application pending trial to be made. If a party wishes to amend its pleadings earlier or later, it would, pursuant to Order 9 rule 14(5), have to do so via the written agreement between the parties, or, pursuant to Order 9 rule 9(8), have to seek to court’s approval to file a further amendment application, though these generally still have to be done at least 14 days before the commencement of the trial (see Order 9 rule 14(3)).

Further, pursuant to Order 9 rule 14(6), the court may draw appropriate inferences if material facts in the pleadings are amended. The practical implication of this is that adverse inferences could potentially be drawn against a party if it amends the material facts in its pleadings.

— — — For a PDF version of this article, click here — — —

­­­­­­­­­­­­­­­Written by: Ivan Tang Wu Hwan, 4th-Year LLB student, Singapore Management University Yong Pung How School of Law.

Edited by: Caitlyn Yeo Kai Lin and Isabelle Lau Xin Qi, 3rd-Year LLB students, Singapore Management University Yong Pung How School of Law.

[1] The Town Councils for the Aljunied Group Representation Constituency (“GRC”), the Hougang Single Member Constituency (“SMC”) and the Punggol East SMC were variously reconstituted between 2011 and 2020. At the time when the alleged breaches of duties started, in 2011, the then-AHTC had been responsible for managing the Aljunied GRC and the Hougang SMC. From 22 February 2013 to 30 September 2015, the then-AHTC was reconstituted as the Aljunied-Hougang-Punggol East Town Council (“AHPETC”) to include Punggol East SMC. It was during this period of time, from 2011 to 2015, when the alleged breaches of duties had occurred.

On 1 October 2015, AHPETC was reconstituted as AHTC, while Punggol East SMC was reconstituted to come under the Pasir Ris-Punggol Town Council (“PRPTC”). On 21 July 2017 and 3 August 2017, AHTC and PRPTC, respectively, commenced the present suits. On 28 October 2020, all of PRPTC’s assets and liabilities were transferred to the Sengkang Town Council (“STC”).

It is against this procedural history that AHTC and STC became the claimants suing the Town Councillors and the Employees for their alleged breaches of duties in this case.   

[2] For a summary of How Weng Fan and others v Sengkang Town Council and other appeals [2022] SGCA 72, see https://smulexicon.com/2023/07/04/can-public-servants-exercising-statutory-duties-be-sued-for-breaches-of-private-law-duties-how-weng-fan-and-others-v-sengkang-town-council-and-other-appeals-2022-sgca-72/.

[3] The definition of, legal significance of, and legal principles pertaining to, pleadings will be explained at Section IV(A) below.

[4] For an explanation of the parties involved in this case, please see footnote 1 above.

[5] The core duty of a fiduciary is to act with undivided loyalty to the beneficiary (which would, in this case, be the then-AHTC).

[6] “Costs” in this context refers to the amount which is payable by a party to another party as ordered by the court, for expenses incurred in the course of a legal action. Generally, the costs of an action are awarded to the successful party, although the court has the discretion to make cost orders as it deems appropriate (see Order 21 rule 3(2) of the Rules of Court 2021).

It should also be noted that the concept of “costs” is different from “damages”, which refers to monetary compensation made to the claimant for the losses caused by a defendant with respect to the claimant’s claim(s).

[7] Notwithstanding this summary, the CA emphasised that these legal principles are inherently limited. Thus, it is not the case that as long as a plaintiff pleads a certain fact, a court may find a defendant liable for any legal consequence arising from that fact. For instance, the court will ensure that the facts pleaded and adduced support each element of a claimant’s claim. It will also scrutinise the position to ensure that no injustice would ensue in such a situation. 

[8] For an explanation of the parties involved in this case, please see footnote 1 above.

[9] In a trial, parties will be given the opportunity to cross-examine the opposing party, during which they must also “put” their case to the opposing party to give the latter an opportunity to respond to the case against it (see the rule in Browne v Dunn:https://v1.lawgazette.com.sg/2011-07/155.htm#:~:text=If%20the%20cross%2Dexaminer%20fails,of%20the%20cross%2Dexaminer’s%20case).

[10] The Rules of Court (Cap 322, R 5, 2014 Rev Ed) have been revoked with effect from 1 April 2022. All civil proceedings commenced on or after 1 April 2022 would, instead, generally be governed by the Rules of Court 2021 (see https://www.judiciary.gov.sg/civil/new-rules-of-court-2021/the-applicable-rules-of-court-for-matters-before-the-courts).