If you are sued for professional negligence, one idea that you should consider is whether or not there are others to blame for any negligence. Sometimes, negligence may be due not to your personal carelessness, but that of an employee.
Can you and should you sue him?
Well, employees are impliedly required to take reasonable care in the course of their employment duties. So you can use the employee for breach of contract.
Whether you should sue is another question. Suing employees except in the most obvious cases is not something that will promote good relations with your staff. So this is not something you may wish to do.
On the other hand, if you have professional indemnity insurance, and the insurer covers your liability, you may find that your insurer has the right to sue your employees. The legal term "subrogation" states that once the insurer has paid for the loss, he steps into the shoes of the insured customer, and takes over this party's rights. So far as I know, this has not happened in Singapore yet.
Tuesday, April 14, 2009
Saturday, April 4, 2009
Horizon Towers en-bloc sale- possible negligence?
The Court of Appeal has finally put an end to the Horizon Towers en bloc sale saga which has lasted over 2 years. The court accepted that the collective sale process was flawed and therefore the collective sale was invalid.
Now that the court has decided that the sales committee has not performed their duties properly, today's Sunday Times newspaper mentions the possibility of lawsuits against them by the other owners. However, the report states that the collective sale agreement signed by all owners agreeable to the sale may contain exemption clauses preventing lawsuits against the committee and their professional advisers and estate agents.
The issue is whether such exemption clauses are valid. They are usually controlled under the Unfair Contract Terms Act and have to be reasonable. Contracts relating to the transfers of interests in land may be excluded from the application of the Act (see Schedule 1). It is not clear
whether the collective sale agreement will be within this exclusion.
Even if the Act does not apply, the next issue is whether any advisers whether real estate or legal owe a duty to explain the risks involving in including exemption clauses in the collective sale agreement.
(Note - the exact judgment of the Court of Appeal is not yet out so the exact breaches of duties on the part of the sale committee are not clear).
(To clarify to those not familiar with the en bloc sale process under Singapore law, for most apartment developments, once 80% of owners agree to sell their apartments collectively, the remaining 20% is bound by law to go along. Since the number of owners will often be more than a 100, (in some cases numbering even 500-1000), a sales committee of a small umber of owners is formed to represent all the owners and to handle the sale process including negotiation with buyers, liasing with lawyers, etc is elected.)
Now that the court has decided that the sales committee has not performed their duties properly, today's Sunday Times newspaper mentions the possibility of lawsuits against them by the other owners. However, the report states that the collective sale agreement signed by all owners agreeable to the sale may contain exemption clauses preventing lawsuits against the committee and their professional advisers and estate agents.
The issue is whether such exemption clauses are valid. They are usually controlled under the Unfair Contract Terms Act and have to be reasonable. Contracts relating to the transfers of interests in land may be excluded from the application of the Act (see Schedule 1). It is not clear
whether the collective sale agreement will be within this exclusion.
Even if the Act does not apply, the next issue is whether any advisers whether real estate or legal owe a duty to explain the risks involving in including exemption clauses in the collective sale agreement.
(Note - the exact judgment of the Court of Appeal is not yet out so the exact breaches of duties on the part of the sale committee are not clear).
(To clarify to those not familiar with the en bloc sale process under Singapore law, for most apartment developments, once 80% of owners agree to sell their apartments collectively, the remaining 20% is bound by law to go along. Since the number of owners will often be more than a 100, (in some cases numbering even 500-1000), a sales committee of a small umber of owners is formed to represent all the owners and to handle the sale process including negotiation with buyers, liasing with lawyers, etc is elected.)
Wednesday, April 1, 2009
Gaelic Inns, JSI Shipping 2 - contributory negligence
The concept of contributory negligence is used by defendants to reduce the amount of damages payable to the plaintiff on the grounds that the plaintiff failed to take reasonable care of his own welfare.
In a traffic accident case, examples of contributory negligence might include
The concept of contributory negligence echoes concepts of "reasonable diligence" expected from all company directors under s.157 of the Companies Act
In a traffic accident case, examples of contributory negligence might include
- a plaintiff pedestrian who recklessly runs across a road, and
- a car passenger who fails to wear his seat belt.
The concept of contributory negligence echoes concepts of "reasonable diligence" expected from all company directors under s.157 of the Companies Act
JSI Shipping case
In the case of
JSI Shipping (S) Pte Ltd v Teofoongwonglcloong (a firm)
[2007] 4 SLR 460; [2007] SGCA 40,
Riggs, one of the plaintiff company's directors, who was the only one based in Singapore, had drawn excessive remuneration and made other unjustified claims which resulted in a loss of over $1.8m to the company. Unfortunately, Riggs fled the country and no monies were recovered from him.
The defendants were auditors of the plaintiff company over the relevent period of 3 financial years when they issued unqualified audit reports relating to the ccompany's financial statement.
The court found that the auditors were negligent in not verifying the amounts that Riggs was entitled to. They failed to seek alternative evidence when Riggs told that that he had no written employment contract. Furthermore, the court found that the fact that the defendants had asked the other director who was based overseas asked to sign off on the directors' report and draft accounts did not absolve the auditors from liability as they had not made it clear to the overseas director the importance of him verifying their correctness of what he had signed.
On the facts, the court therefore found that the auditors were liable for the loss.
JSI Shipping (S) Pte Ltd v Teofoongwonglcloong (a firm)
[2007] 4 SLR 460; [2007] SGCA 40,
Riggs, one of the plaintiff company's directors, who was the only one based in Singapore, had drawn excessive remuneration and made other unjustified claims which resulted in a loss of over $1.8m to the company. Unfortunately, Riggs fled the country and no monies were recovered from him.
The defendants were auditors of the plaintiff company over the relevent period of 3 financial years when they issued unqualified audit reports relating to the ccompany's financial statement.
The court found that the auditors were negligent in not verifying the amounts that Riggs was entitled to. They failed to seek alternative evidence when Riggs told that that he had no written employment contract. Furthermore, the court found that the fact that the defendants had asked the other director who was based overseas asked to sign off on the directors' report and draft accounts did not absolve the auditors from liability as they had not made it clear to the overseas director the importance of him verifying their correctness of what he had signed.
On the facts, the court therefore found that the auditors were liable for the loss.
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