CIVIL LAW (AMENDMENT) BILL

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CIVIL LAW (AMENDMENT) BILL: Order for Second Reading read.

5.00 pm

The Senior Minister of State for Law (Assoc. Prof. Ho Peng Kee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, this Bill seeks to make two sets of amendments to the Civil Law Act. The first concerns the lowering of the age of contractual capacity from 21 to 18 years; the second refines the regime applicable to claims resulting from fatal accidents. A public consultation on the draft Bill, in relation to the lowering of the contractual age, was held from 25th August to 19th September last year.

I will now take the House through these two sets of amendments. First, the amendments to the age of contractual capacity.

Lowering the contractual age from 21 to 18 years

Sir, the current minimum age of contractual capacity is tied to the age of majority, which is 21 years in Singapore. Over the years, the Pro-Enterprise Panel

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had received feedback that the legal barriers preventing young people from starting and conducting a business should be removed. After conducting a careful study, the Government agrees that the current laws place unnecessary restrictions on young people wishing to do business. Hence, this Bill seeks to de-link the age of majority from the age of contractual capacity, reducing the age of contractual capacity from 21 years to 18 years. Other countries such as Australia, Malaysia and Hong Kong also have 18 years as the age of contractual capacity.

The Senior Minister of State for Law (Assoc. Prof. Ho Peng Kee): 5.02 pm

To facilitate this, besides amending the Civil Law Act, we will also have to make consequential amendments to a few other Acts which are listed in the Schedule to the Bill.

New ability to contract

Clause 6 provides that every contract entered into by a minor who has attained the age of 18 years will have effect as if he were a person of full age, unless otherwise provided. This means a contract made by a person who is at least 18 years of age will now be binding and enforceable against him as if he were a person of full age.

Under clause 6, the person who has attained the age of 18 will be able to enter into contracts to cover a wide range of matters necessary for business purposes. However, clause 6 comes with an important restriction.

Currently persons below 21 years are not able to hold land in their own name or sell their beneficial interests in land. In view of the legal complexity surrounding land ownership, clause 6 provides that the ability of an 18-year-old to contract will

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not apply to contracts for the sale, purchase, mortgage, assignment or settlement of any land or a lease of land for more than three years. The Bill will instead allow them to contract for leases not exceeding three years. This should be sufficient for their business needs until they reach 21 years.

Ancillary changes for litigation and business needs

Clause 6 also allows a person who has attained the age of 18 years to litigate in his own name, as if he were of full age, in the types of legal proceedings or actions specified in the Schedule. These are legal proceedings or actions relating to commercial activities, for example, non-fulfilment of contractual obligations. Aside from these areas, we have generally preserved the position under present law that minors cannot enter into any contract for the settlement of any legal proceedings.

Madam, consequential and related amendments will be made to the Bills of Exchange Act, Companies Act, Conveyancing and Law of Property Act, Employment Act, Limitation Act, Limited Liability Partnerships Act and the Settled Estates Act. This is to allow persons who have attained the age of 18 to be employed under a contract, act as directors of companies, form companies or limited liability partnerships, furnish bills of exchange and render contracts of service enforceable against them.

To refine the regime for damages claimed upon fatal accidents

Let me now move on to the second set of amendments.

Law Reform Committee's proposals on loss of inheritance and savings and the definition of "dependant"

Clauses 3 and 5 of the Bill arise out of the recommendations of the Singapore

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Academy of Law's Law Reform Committee chaired by Justice Judith Prakash.

The Committee has recommended, and MinLaw agrees, that in computing claims filed by dependants, account should be taken of any savings or inheritance that they could have received from the deceased. This is because such sums are traditionally put aside by deceased persons, when alive, to eventually benefit their family. Hence, to leave them out of the computation would under-compensate the dependants. The current method of assessment, which is based largely on the annual or monthly sum given to the dependants, is inadequate where there is divergence between what the deceased actually gave and what he could afford to give, or where the deceased preferred to reinvest the moneys instead of disbursing them to his dependants. This amendment will bring us in line with the approach taken in the UK, Australia, Hong Kong, USA and Canada.

Furthermore, the definition of "dependant" will be extended to cover a "former wife". This will enable ex-wives who have been supported by the deceased prior to his death pursuant to maintenance orders to file dependency claims when their ex-husbands die. Indeed, these ex-wives may still be dependent on the deceased at least for some time after the marriage has ended. Such a right for ex-wives is also found in the laws of UK.

Refining our approach to bereavement damages

Madam, section 21(4) of the Civil Law Act under the heading of "Bereavement" currently provides that the court may order defendants in fatal accident claims to pay $10,000 in damages for bereavement. This amount has not changed over the past 20 years. Clause 4

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of the Bill therefore proposes an increase from the current $10,000 to $15,000, and also allows future variation of the amount by Ministerial Order. We intend to review the sum from time to time to keep pace with inflation and the cost of living. This is the approach also taken in the UK.

Madam, I beg to move.

Question proposed.

5.06 pm

Ms Sylvia Lim: Madam, the Bill has two main proposals, first, providing more compensation for death cases and, second, allowing minors to engage in business activities. I refer, first, to clause 4, amending section 21, to increase the bereavement claim from $10,000 to $15,000. Recently, a former student of mine wrote to me about how his brother was recently killed in a car crash. His brother was 20 and not yet a breadwinner. He had been a passenger in a car, driven by an acquaintance, who had crashed it through negligent driving. The young man died on the way to hospital. As usual, in such cases, charges under the Penal Code resulted in fines and a driving ban, leaving his family to wonder if their loved one's life was being trivialised. Thus raising the civil claim amount for bereavement from $10,000 to $15,000 will give such families some comfort. In any case, as mentioned by the Senior Minister of State earlier, the current sum of $10,000 has been unchanged since 1987 and, after 20 years, to raise it to $15,000 is fully justified. Some may even rightfully ask whether this new sum is still too low for the loss of a life.

As for clause 5 amending section 22, I support the reasons given to allow dependants to claim loss of expectation of inheritance or savings in line with the modern practice in some other jurisdic-

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tions. Now the dependants can claim not just what they in fact receive from the deceased but what they would have expected to receive if the deceased had lived out his life. Such a law will produce a fairer result for dependants even though this might result in more litigation between dependants and insurance companies over whether inheritances or savings were certain or speculative.

Finally, Madam, I come to the amendments to allow minors above 18 to enter into contracts and conduct business activities. Under these amendments, the activities include making contracts of all sorts, except for some, eg, they still cannot sell land, they can sue or be sued in their own name for contracts or other commercial activities and they can also act as a director of a company. Bringing the age for such activities down from 21 to 18 is consistent with what has been happening in other countries. It is a clear signal to the public that we expect 18-year-olds to be able to handle such onerous responsibilities, such as being liable for business deals and debts and even managing a company as a director owing fiduciary duties to shareholders in the company. This then brings me to a poser. We already require 18-year-olds to serve National Service and be mobilised to defend Singapore with their lives, if necessary. We are now willing to facilitate 18-year-olds to engage in serious business responsibilities, including managing companies and being liable for debts. Is it not high time too that we considered lowering the voting age to 18 as well? The last time I brought this up in 2007, the former Minister for Law said that voting was a serious matter. But are not these matters we want 18-year-olds to handle now serious as well? We are way behind most countries on voting age and, perhaps, with the new Law Minister, this matter can be revisited.

Assoc. Prof. Ho Peng Kee: I thank Ms Sylvia Lim for supporting the Bill,

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including the increase of the bereavement claims from $10,000 to $15,000. As I said in my speech, it can be further amended, if necessary, in the future, by Ministerial Order. We will have to monitor and see whether this sum will remain appropriate over time.

I think the main thrust of her speech really is to argue, once again, for the lowering of the age of voting to 18. This, as she has said, is not a new issue for, indeed, Prof. Jayakumar had explained in the House in the COS debate in 2007, almost two years now, as to why, in Singapore, we should keep the age of voting as 18. And, indeed, we also have issued replies in the media on this point. Firstly, in Singapore, the approach we take is not to have a single threshold age of majority for all purposes. Different ages are stipulated for different activities. For example, a person can be charged as an adult when he turns 16. Before that, he is a juvenile in the eyes of the criminal law. Then a person needs to be at least 18 years before he can drive or buy an alcoholic drink or cigarettes. On the other hand, he must be 21 years before he can marry without parental approval, donate a body organ, make an Advance Medical Directive, or a will, or qualify as a member of some professionals such as being a lawyer, public accountant or engineer. In short, there is no single threshold for all these activities.

Therefore, the approach that our laws take is a gradual increase in rights and responsibilities leading up to the age of 21, at which stage nearly all the limitations link to age are removed. Even then, a person may generally adopt a child only when he is 25 years old. So, in that sense, there is taking into account the age, and linking the age to the question of maturity of a person before the law says he can do something. This approach, as Prof. Jayakumar had explained in this House, is a pragmatic and,indeed, a

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sensible one as each activity calls for different considerations, and its significance and impact vary. This approach has worked well for us, and there is no compelling need to change it. Indeed, the common law age of majority, which is pegged at 21 years, continues to apply to activities that involve significant personal responsibility such as the ones listed earlier, and voting is one such activity.

As the House well knows – I am sure Ms Lim well knows this too – we take elections in Singapore very seriously. Hence, unlike many other countries, we make it compulsory. Typically at 21 years, a person would be either working or pursuing tertiary studies. He would be in a better position at that age than at age 18 years to assess the quality of a candidate and his promises as well as form considered views on the national issues at stake. As voting is a very important matter that involves choice and choice that only an individual can make personally, there is a need for a voter to have the necessary maturity to decide for himself or herself. This approach has worked for Singapore.

Indeed, it is because we take this differentiated and pragmatic approach of assessing what is the appropriate age for each activity without necessarily linking it with the other restricted activities that the Government can now review and assess the age of contractual capacity objectively. What should be the appropriate age for this particular activity? As I have explained in my Second Reading speech, having considered this issue carefully, having taken into account feedback on the ground, and also the number of young people, who are under 21 now, who approach ACRA asking whether they can do business, we have decided that we should de-link the age of majority and lower it to 18.

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In short, Madam, this gradual process of progressively increasing rights and responsibilities of an individual up to the age of 21 as the age of majority when nearly all restrictions are removed has worked well for us, and we should keep it.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Assoc. Prof. Ho Peng Kee].

Bill considered in Committee.

Assoc. Prof. Ho Peng Kee:

The Chairman: The citation year "2008" will be changed to "2009", as indicated in the Order Paper Supplement.

Clauses 1 to 8 inclusive ordered to stand part of the Bill.

The Schedule ordered to stand part of the Bill.

Bill reported without amendment; read a Third time and passed.