Singapore and other Commonwealth countries used to be part of the British colonies, so English Law has a founding effect on Singapore Law and to a certain extent is still relevant today. Since Singapore follows a common law system, it is important to note that the basis of common law is on the principle of precedent, which is summed up by the term Stare Decisis which means “to stand by things decided” (www.wikipedia.org). Singapore practiced Vertical Stare Decisis whereby past cases decided by superior courts are binding and authoritative for future cases decided by lower courts in the same hierarchy.* On the other hand, Horizontal Stare Decisis is seldom adhered with, where a court is bound by its own prior decision, but deviation is probable where consistency in judgment is to be maintained.
* Every decided case reflects a ruling of law known as Ratio Decidendi, meaning the rationale for the decision, which is important as it serves as the basis for like cases to be decided in like manner.(Lecture 1 notes) So Ratios, the only binding entity, are to be extracted from past cases for the judge to maintain consistency in judgment and to “exercise the discretion to change and develop the law”. (law.nus.edu.
sg/asli/docs/margaret2005_01.pdf)2) Decisions from England, Canada and Australia are referred to in this case not because such decisions represent Singapore Law, but because Singapore has it roots in common law and due to the similarities among the legal systems that derived from that of the United Kingdom, it is possible to take reference from these cases on probable applicable principles. Any decision from outside of Singapore’s jurisdiction is persuasive in nature* but are cited here because they aid in supporting arguments during a trial.3) Dutton v Bognor Regis Urban District Council was mentioned to bring forth the applicability of the principle in Donoghue v Stevenson which states that a person who appreciates that his careless act or omission may cause physical injury to others or their property, owes a duty to those people to exercise reasonable care to avoid such careless act or omission.(Para 34)4) D & F estates Ltd v Church Commissioners for England was brought up to limit the applicability of the Donoghue principle, meaning claims are only probable where there exists a contractual relationship between the parties concerned (privity of contract) and that foreseeability of harm does not leads to a duty of care.(Para 21)5) Anns V Merton London Borough Council was brought up to emphasize on the two step approach advanced by Lord Wilberforce to determine whether third parties are liable in tort for pure economic losses. Mainly on whether there exists a degree of proximity that would give rise to duty of care, the scope of duty and whether any factors precluded such a duty from arising.
(Para 13)6) RSP Architects v Ocean Front where the developer of a condominium was held liable in tort for pure economic loss suffered by the management corporation, shows how the two step test in Anns v Merton was adopted and great effort was used to portray the special position of the management corporation which was in fact the creation of the developers. It was under this light that an otherwise remediless tort has been made available.(Para 33) Ocean Front was brought up to serve as a basis of consideration of “all the conflicting claims of the plaintiffs and defendants as viewed in a wider context of society” (Para 50), affirmed in Lord Roskill’s statement in Caparo Industries v Dickman.7) Rivtow Marine Ltd v Washington Iron Works was brought in to examine how far the decision in Ocean Front has attended the law of tortuous duty and to what extent should the Donoghue principle be extended to new situations.
(Para 42)8) To sum it up, the court examined all the cases to come to a better light as to whether there was any “compelling reason as to extend the law to afford a separate remedy to Bumi”.(Para 53) Bumi had contractually agreed to limit their recourse should the vessel/engine fails to meet its specifications and its was Bumi’s choice not to be in direct contractual relationship with Man B & W and Mirrlees. It was “not the duty of the court to improve a party commercial gain after an event”.(Para 53)9) Law in Business provide a comprehensive framework of regulations in which business activities can be regulated and constitutes an element of certainty and consistency on what and how transactions can be carried out. The aftermath of the Enron and WorldCom episodes reminded us of the benefits of having law to impose punishments on those who infringes upon rules and regulations set forth to create deterrence for future recurrences.
(Reference made to Chapter 2 Accountants Act and Chapter 67 Criminal Law Act)10) Firstly, law facilitates businesses by providing a framework in which contracts and agreements can be made and enforced.* Without these rules, businesses will be unsure on their rights and obligations and it will be hard for the parties concerned to come to an agreement as each party can decide unilaterally what is in their best interest, how they perceived law to be. Also, contracts can be formed with minors, the incapacitated and in the absence of law, no form of recourse is available for them.(Chapter 7A Application of English Law Act on Contracts and Sales of Goods)11) Secondly, business law, through government intervention serves to regulate the type of activities that are allowed in society, discouraging undesirable ones.* The government on pricing and allocation issues regulates public utilities, which is a basic commodity for all Singaporeans. This helps to prevent the abuse of power by companies in overpricing and ensure that no form of selective allocation is practiced.
(Chapter 50B Competition Act) Another example will be the imposing of age limits on socially undesirable behaviors such as gambling, smoking and the consumption of alcoholic drinks in Singapore.(Chapter 309 Smoking- Control of Advertisement and Sale of Tobacco Act and Chapter 21 Betting Act) All these regulations benefit the consumers as goods and services will be more competitively priced. At the other end of the spectrum, it encourages businesses to maintain a high level of efficiency and productivity and to keeps costs down.12) Lastly, Law serves as a platform for resolving inevitable business related disputes through various means such as litigation and conciliation.* One high profile case is Creative Technology v Apple on the Patent rights of their MP3 Players.(Chapter 221 Patents Act) If such laws are non-existing, companies will no longer be willing to innovate and engage in Research and Development, which will bring about a standstill in technological breakthroughs.Citations (Other then those mentioned therewith)1)*=Singapore Business Law 4th edition Chp 1,22) For part b) reference was made to http://statutes.agc.gov.sg/, http://www.singaporelaw.sg/ and “The Statues of the Republic of Singapore- a Police Publication” on the relevant Statutes and its applicability.Total word count = 998