HEAD R - MINISTRY OF LAW

Head R - Ministry of Law

The Chairman: Head R - Ministry of Law. Dr Teo Ho Pin.

Legal Aid

Dr Teo Ho Pin (Bukit Panjang): Sir, I beg to move,

That the total sum to be allocated for Head R of the Estimates be reduced by $100.

Sir, the Legal Aid Bureau has provided legal assistance services to many low-income households for many years. The low fee levied by the Bureau has helped low-income families to gain access to get legal representation to resolve their problems. But these legal aid services are only available to persons who pass the means test, that is, the applicant's disposable capital is not more than $7,000 or the applicant's disposable income does not exceed $10,000 per annum, that is, about $850 per month.

Sir, with rising prices of consumer goods and higher salary, many low-wage earners with salary of between $900 and $1,500 will not be able to meet the criteria to use the legal aid services. At the same time, these low-wage earners cannot afford to engage private lawyers and do not know how to make representations in courts. As a result, many have no choice but to plead guilty and suffer the consequences of the law without mitigating their cases. This situation is unfair to the low-income households.

In addition, the capital means test of $7,000 of disposable capital also poses a problem for low-income households. I have one MPS case where my resident bought a secondhand car and subsequently went into financial difficulties. He is unable to sell his car as he would have to incur further financial losses. But the car has a disposal value of more than $7,000. As such, he is not eligible for legal aid services. Sir, in order to make legal aid available to low-income households, I would urge the Ministry to consider revising the means test criteria for legal aid so that more low-income households can benefit from its services.

Besides the means test, there is also a physical barrier to access the legal aid services as there is only one office located in the city centre. Many low-income households would need to incur additional transport expenses to access the services. In some cases, these low-income families would have to bring all their children to the legal aid office as they do not have any domestic support

to look after their children. This adds further financial burden to these families.

Sir, to make legal aid available to low-income households, we need to make the services accessible and affordable. I would like to urge the Ministry to consider setting up legal aid service outlets in the HDB heartlands. The Ministry can partner with the Community Development Councils, Community Clubs, Family Service Centres or HDB branch offices to provide such services. Furthermore, I hope the Ministry can exercise flexibility to consider on a case-by-case basis to extend legal aid to applicants who may not meet the criteria but have good reasons to seek legal aid.

3.30 pm

Sir, I understand that the Law Society has partnered with a Family Service Centre to provide pro bono legal assistance services to persons who do not qualify for legal aid and are unable to afford the services of private lawyers. This is indeed a commendable effort. I hope the Minister will also consider supporting this scheme.

Sir, I would like to ask these questions:

(1) Would the Ministry consider revising the means test criteria for legal aid services?

(2) Are there plans to extend the outreach services of legal aid services?

(3) Would the Ministry provide support to expand the pro bono legal aid schemes in the community?

Mdm Cynthia Phua (Aljunied): Mr Chairman, Sir, I concur with the hon. Member, Dr Teo Ho Pin, who has explained the strict criteria for eligibility of legal aid. I, too, would like to call on the Government to make the same review of the means test be revisited, as the ceiling on annual disposable income and disposable capital is too low.

To justify this request, I know of a lawyer who does community work. She charges about $3,500 for clear-cut divorce cases. Once it involves a child or a house, the legal fee rises to about $8,000. So how can a person earning below $833 per month be able to afford such fees?

Sir, in relation to this, I would like to ask the Ministry of Law what is the number of cases handled by the Legal Aid Bureau in the past three years and what is the ratio of successful cases handled versus those that were turned away because they could not meet the income criterion.

Ms Ellen Lee: ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Sir, it is common for the low- income group to receive court summonses or letters from the banks chasing for debt payment. As many of these law-abiding people do not wish to get involved in lawsuits and suffer further personal financial losses, they will just make payment to get over it. However, there are cases when individuals need to defend themselves in court, but they are not able to afford the costly legal fees. In such cases, they will turn to the Legal Aid Bureau to apply for free legal assistance and representation. But, often, they are not likely to have their wish fulfilled because they will not pass the means test conducted by the Legal Aid Bureau.

Also, there are ordinary folks who wish to seek resolution through the court for purposes, such as to claim back their rental deposits, to chase away tenants who had failed to pay rentals promptly, to recover monies in commercial dealings or to claim refund of course fees from private institutions. To engage a lawyer will mean that they have to incur substantial legal costs to pursue these claims and, as such, they feel that the cost incurred in lawsuits will greatly exceed the sum they seek to claim.

Sir, Singapore is renowned for upholding the rule of law. However, there are low-income people who are not eligible for free legal service offered by the Legal Aid Bureau. To them, this is difficult to comprehend and ironical. These people often feel that they will have no choice but to helplessly watch the cheats or the law-breaker go scot-free.

Sir, I would like to ask the Government if it will broaden the scope of assistance offered by the Legal Aid Bureau, or to lower the threshold of the means test. In the event that the low-income people are involved in court cases relating to scams and swindles, or are issued summonses by the Town Council, SP Services, Traffic Police (TP), Accounting and Corporate Regulatory Authority (ACRA) or other Government departments, the Government will appoint a lawyer to represent them, so as to facilitate an out-of-court settlement.

*Cols. 2437-2438.

En-bloc Sales

Mr Hri Kumar (Bishan-Toa Payoh): Sir, en-bloc sales are a very important part of the renewal of the estate. As buildings grow older, they cost much more to upkeep. Like HDB estates, private estates also need upgrading. However, individual MCSCs often do not have sufficient funds to upgrade. In one instance I am aware of, residents of a private condominium were faced with a bill to replace six dirty old lifts at a cost of $300,000 per lift. This far exceeded what they had in their coffers. Often, the only solution is for a single developer to purchase the entire estate and put something new and more efficient in its place.

A few years back, the Government revamped the law to allow older estates to go en-bloc if 90% or 80% of the subsidiary proprietors agreed, depending on the age of the estate. That freed up many estates, and has accounted for the wave of en-blocs we are now experiencing. Unfortunately, the issue of money often brings out the worst in some, and they have tried to benefit unconscionably from the situation. There are also some who understandably want to remain in their homes for sentimental reasons. Conflicting interests have raised temperatures and breakdowns in relationships. This is unfortunate. But the underlying premise must be that the law should facilitate well-founded applications, with the protection that, if you are forced to sell your home against your wishes, you should at least be reasonably compensated.

That has given rise to another problem. The law provides that the Strata Titles Board will allow applications for en-bloc sales, unless the distribution is inequitable. But the Act does not define what "inequitable" means. Thus far, distribution is by share value, but some have argued that this is insufficient and inequitable because the distribution should take into account the size of the units, their renovation costs or their superior views. The Strata Titles Board can oppose the application for en-bloc sales if an owner can demonstrate a financial loss. Right now, financial loss is said to have been suffered if the sale proceeds of a unit, after the deductions allowed by the Board, are less than what the owner paid for the unit. But, again, the Act does not define what "deductions" are. There are, in fact, conflicting decisions on whether withholding costs and interest charges are deductibles.

The Act also places unnecessary obstacles to applications. Right now, the Board is obliged to reject applications for technical non-compliance with the regulations even when there is no prejudice. In one case, an application was rejected when a notice was issued a day late. Time and cost are wasted. Different en-bloc applications involve different circumstances and throw up different issues. It is difficult to legislate for every situation. That is precisely why a rigid structure is likely to give rise to unjust results. What comes out is that the Act is not clear and certain enough and does not confer enough discretionary power on the Strata Titles Board, a fact which the Board itself has observed in its decisions. If the purpose of the Act is to facilitate en-bloc sales and, at the same time, ensure that owners are treated fairly, then it should make sense to confer more discretionary powers on the Board to ensure that justice is done in each case.

For the Minister's consideration.

Ms Ellen Lee: Sir, I shall not repeat what my learned friend has said, but I shall speak in Mandarin on other aspects.

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Sir, our Government has announced that Singapore has the capacity to accommodate 6.5 million people. This means that more land will be allocated for construction of residential property. Currently, we are witnessing an increasing trend of en-bloc sale of private properties for redevelopment. For the majority, they will be more than glad if the en-bloc sales will yield high returns and capital gains. But for the minority, no amount of compensation can make up for the permanent loss of their cosy nests; money is not able to substitute for this loss because they have had many sweet and fond memories in the house. Therefore, it is not fair to force the minority to comply with the mandatory 80% agreement by which we decide on whether an en-bloc sale proceeds.

In this regard, I would like to ask the Government whether it will consider revising the law so that the minority is protected under the law, especially for the elderly living alone, those having difficulty getting about, or the feeble and weak. They are the ones who are likely to lose out and they face uncertainty because they are not familiar with the new environment, and they will hesitate and panic. Also, they feel helpless under tremendous pressure from the property agents. Therefore, I hope that the Government, before approving more en-bloc sales, will make the necessary arrangements to ensure that the minority rights are protected.

*Cols. 2439-2440.

Bankruptcy

Dr Teo Ho Pin: Sir, each year, more than 3,000 Singaporeans were made bankrupt. Personal bankruptcy is a social stigma, and has caused much family distortion and hardship. A large number of these bankrupts are Singaporeans who failed to pay their debts amounting to less than $100,000. The key reasons attributing to their bankruptcies include over-indulgence in expenses, poor management of finances, business failures or personal crises. Many of these ill-informed Singaporeans have over-committed themselves financially in housing loans, renovation loans, car loans, credit card facilities, hire purchase arrangements or dubious timeshare investments.

Once they face financial difficulties to service their loans, they will fall into "debt traps" where their creditors will impose high interest charges, high late penalty fees, high legal fees or administrative fees. As a result of these debt traps, the debtors will find it extremely difficult to repay their debts, thus, finally facing bankruptcy.

Sir, I understand that the Ministry has reviewed the Bankruptcy Act to permit earlier discharge of bankrupts. But more can be done to prevent Singaporeans from getting into bankruptcy. As long as we continue to practise caveat emptor , there will always be consumers who will be persuaded to over-commit themselves financially and become potential victims of debt traps or bankruptcy. In order to protect the interests of the creditors, bankrupts and potential bankrupts, we should review the bankruptcy regime in Singapore. More can be done to prevent bankruptcy, especially in the areas of public education, pre-bankruptcy measures, and bankruptcy discharge incentives.

In cases where debts are incurred and bankruptcy petitions are filed, the Ministry should intervene through mediation or a repayment arrangement before the court hearing. I wish to ask the Ministry the following questions:

(1) What measures are in place to prevent bankruptcy?

(2) How can the Ministry incentivise bankrupts to have an earlier discharge?

Mr Hri Kumar: Sir, when I was a junior lawyer, a judge I appeared before, since retired, described bankruptcy like this. He said, "When you die, your body remains on earth and your soul goes to heaven. When you are bankrupt, you keep your body but your soul goes to the Official Assignee's Office." The point made is that bankruptcy is a serious matter involving the forfeiture of a person's legal rights. A bankrupt loses his right to manage his affairs and he faces many restrictions, including his ability to travel. Over and above the legal restrictions, there is a strong social stigma. Employers are often reluctant to hire bankrupts, which only aggravates their financial problems.

Bankruptcy is usually for a minimum of three years. By the time a bankrupt gets back on his feet, he may have lost a large part of his best working years. Many are bankrupt because of unfortunate circumstances or poor financial management. They are not dishonest people. The problem is that where a person cannot pay his debts, there is really little alternative to bankruptcy. Creditors, particularly financial institutions, are required to take reasonable steps to recover the debt before they can write it off. Often, this means bankrupting a debtor, even if there is little hope of recovery. Creditors also do not know if the bankrupt is hiding assets and hope that these will surface during the bankruptcy administration.

The bankruptcy threshold is now $10,000. The law, therefore, makes no distinction between a person who owes $10,000 and one who owes a million dollars. Surely, many can be saved from bankruptcy by way of a sensible debt repayment plan. Debtors have an avenue of proposing a voluntary arrangement, but this involves engaging a professional to supervise its implementation, which is really beyond most. In any event, this arrangement will only be approved by the courts if it is supported by a majority in the number of creditors and at least three-fourths in value. This is difficult to achieve. Sometimes, creditors have no idea about the debtors' true worth and whether the proposal is a genuine one.

I, therefore, hope that the bankruptcy regime will be refined so that most debtors have a real chance to get their life back together. All that most creditors really require is that the debtors' circumstances be properly evaluated and there is a genuine plan to repay his debts. So I call on the Government to facilitate this compromise between the debtor and the creditor to reduce the number of bankruptcies in Singapore and to ensure that no party is prejudiced.

Mr Teo Ser Luck: Mr Chairman, Sir, I welcome the expanded role of the Official Assignee to assist high-risk individuals from becoming bankrupt. My question is: how would the Official Assignee's Office be able to handle this role with its current resources and if they will consider to partner with VWOs to help these individuals?

Bankruptcy Law in Support of Entrepreneurship

Mr Inderjit Singh: Sir, I have raised this issue of bankruptcy in this House before. Essentially, there are two issues. The first is how to avoid entrepreneurs from being rushed into bankruptcy. And, second, when they are already bankrupt, how to make it easier to rehabilitate and facilitate their quick entry into the economic life?

Sir, I had suggested that we consider the US model which is a dual-track model of Chapters 7 and 13 for individual bankruptcy. Under Chapter 7 of the US Bankruptcy Code, an insolvent person can apply to put himself into bankruptcy if he cannot pay his debt. He is subsequently also counselled as a consequence of a bankruptcy under Chapter 7 on the effect of his credit history.

In this section, he will also be told of the alternatives under Chapter 13, in which he has to continue to pay his creditors or reaching a private settlement to avoid bankruptcy. Under Chapter 13, there is no wiping clean of the slate but neither is there the stigma of being a bankrupt. This is a good system for us to follow here in Singapore.

Sir, one particular example of how harsh the regime here is is the case of bankrupts who leave Singapore. As Minister Prof. Jayakumar said in the Bankruptcy (Amendment) Bill debate on 25th August 1994 in this House, the intention of the OA is not to prevent every Singaporean bankrupt from travelling. Yet, we still have many bankrupts who do not apply to go overseas because they have difficulties in getting approval. Many of these persons get hauled up before the courts and face criminal sanction under the Bankruptcy Act, section 131, where the Act punishes them with either a $10,000 fine or a jail term of two years. But, unfortunately, we had a precedent set by the former Chief Justice where, under the case of Public Prosecutor vs Zhong Tian Hao, he decided that punishment for this offence should be a jail term. And subsequently, the Subordinate Courts are bound by this precedent. I am not a lawyer, but I think they are bound by this precedent set by the High Court.

I think the courts should not be playing the role of Parliament and I hope that the Minister can explain this. I suggest that the Minister look at Chapters 7 and 13 and also the harshness of this rule to be reduced.

The Chairman: Ms Lim, you have two cuts. Take them together.

Age of Majority

Ms Sylvia Lim: Sir, the age of majority in Singapore is 21. Once a young person turns 21, parents cannot by law make decisions on his or her behalf. The 21-year-old can sign contracts and vote in a public election.

However, we require those under 21 to engage in some very serious undertakings already. Boys are enlisted into National Service at 18 years, required to carry weapons and may have to defend Singapore with their lives. If a young adult above 18 commits a capital crime, he will be hanged.

Thus, even within the Singapore context itself, there seems to be anomalies about whether we consider those between 18 and 21 years as adults or not. What have other countries done? Since World War II, the majority of countries have lowered their ages of majority and voting from 21 to 18. Even many Asian countries use 18 as the voting age, including China, India, Pakistan, Thailand and the Philippines. We are one of the remaining few using 21. Are our young people somehow less mature than their peers elsewhere?

In respect of voting, one compelling argument relates to compulsory military service. The United States went through this experience in the 1970s. Young men under 21 were drafted to fight in Vietnam. The public sentiment there was basically that if they were old enough to do that, they should be old enough to vote.

Sir, if young Singaporeans aged between 18 and 21 years are entitled to vote, I believe that this would have a tsunami effect in making them interested in national affairs which in turn will make our national debate more holistic and inclusive.

Criminal Procedure

Sir, I would like to address two aspects of criminal procedures. The first is disclosure of evidence before trial and, secondly, appeals against sentence.

For a long time, there was no requirement for the prosecution and the defence to disclose evidence to each other in the stages before the trial itself. This was not conducive to a fair result and contrasts sharply with civil cases where there is a process called discovery.

Sometime in October 2006, the Ministry of Law announced that they had finally agreed to a framework on pre-trial exchange of evidence. While this is certainly welcome, the MinLaw spokesman clarified that the framework would require the prosecution to disclose only the evidence it intended to use against the accused. Thus, evidence gathered by the police which they did not intend to use in the case would not be revealed to the defence.

Sir, I believe this would be a shortcoming with the potential to perpetuate injustice. Evidence gathered by the police is very valuable. First, the police are often the first ones at the crime scene. The evidence and witness reactions then are contemporaneous with the crime and likely to be reliable.

Secondly, the police have powers to compel witnesses to come to assist investigations. In contrast, the defence has no special powers to investigate cases. The lawyer is also brought in after police investigations have concluded, sometimes several weeks later.

Sir, United Kingdom law requires the prosecution to reveal evidence they have gathered even if they do not intend to use it, for example, witnesses who may strengthen the defence's case. This is seen as essential to a fair trial as the desired outcome of any investigation is to arrive as close as possible to the truth.

MinLaw has stated that if all the information gathered by the police had to be revealed, then the public cannot provide important information to the police in confidence and this may compromise the investigations. To me, there is a higher cost in wrongful convictions by the suppression of evidence helpful to the accused. To balance things out, we could consider allowing the prosecution to get a court order not to disclose any statement if there are special public interest concerns. And I believe it is the UK model. Could the Ministry relook at this issue?

Secondly, Sir, appeals against sentences. Both the prosecution and the accused can appeal against a sentence. The prosecution will appeal if it considers the sentence to be too light and, conversely, the accused may appeal if he feels his sentence is too harsh. Under the current law, if there is an appeal against a sentence by either party, the judge hearing an appeal can either reduce or enhance the sentence or alter the nature of the sentence. This has led to many cases in the past where the accused appeals against a sentence which instead becomes harsher. Such risks have led people not exercising their right of appeal for fear that their sentences would be enhanced.

Sir, if we pride ourselves in the quality of our judicial system, then we must ensure that nobody fears exercising their rights of appeal. Accordingly, my suggestion is that the Ministry consider amending section 256 of the Criminal Procedure Code and that the section should provide that when an accused appeals against a sentence, the court may only reduce the sentence or retain the same sentence. If there is a concern that the sentence was too light, the Attorney-General's Chambers would still have the right to appeal to enhance the sentence.

The Deputy Prime Minister and Minister for Law (Prof. S Jayakumar): Sir, I thank the Members who have spoken on the Ministry of Law. I would respond to the comments made on legal aid, en-bloc sales and also Ms Sylvia Lim's questions on age of majority and my colleague, the Senior Minister of State, Assoc. Prof. Ho Peng Kee, will respond to the remaining points.

First, on legal aid. The thrust of what the Members have said is whether the Legal Aid Bureau can do more and whether the Ministry can do more. I would like to answer that straightaway by saying, yes, we will endeavour to do more and we will do it in three ways. One is through adjustments to the means test. Second is through giving some discretion to the Director of Legal Aid. And third is through a partnership with the Law Society of Singapore. I will elaborate on each of these.

First, relating to the means test, Mdm Cynthia Phua and others have asked whether the means test has been too harsh. The answer is really that the position is not that bad because before we adjusted the means test in 2001, about 70% of the applicants qualified. When we adjusted the means test in 2001, some 89% to 90% of the applicants qualified. I was asked to provide figures. Last year, 9,696 cases were registered, about 89% qualified.

I will say that it is only a small handful of applicants who do not qualify. After the 2001 revision, the qualifying monthly household income, say, for a family of four, taking into account their personal and dependants' deductibles, increased to about $1,900 - not the $850 figure that the GPC Chairman, Dr Teo Ho Pin, indicated.

But, nevertheless, I have asked my officials to review this last year and see how we can do more to assist the lower-income group and perhaps also some in the lower part of the middle income who may need legal assistance. So what we intend to do is to try to expand the coverage of the legal aid, from the current 30th percentile to the 40th percentile of households based on household income. How do we intend to do this?

We will first increase the personal deductibles from $3,000 to $4,500 and for the dependants' deductibles, we will increase it from $2,000 to $3,500. At the same time, we will also align the disposable capital limit from $7,000 to $10,000 to match the qualifying disposable income limit. With these changes, we believe that we will be able to increase the coverage to up to the 40th percentile. And with these changes, the qualifying monthly household income for a family of four will increase from $1,900 to $2,600.

The second change we intend to do, and this relates to what Mr Hri Kumar mentioned, is the question of discretion. Yes, we realise that even after the changes of means test, there may be some cases which do not satisfy the means test, but because of the circumstances of the case, may, nevertheless, be deserving of help. So what we will do is for the Director of Legal Aid Bureau to be given greater discretion to offer help to those who are facing such specific hardships, for example, someone who may not have met the means test but suddenly has lost his job, requires urgent help or someone who has suddenly physical or mental incapacity.

Thirdly, we intend to establish legal clinics, and this relates to the point by Dr Teo Ho Pin on outreach. We cannot be everywhere in Singapore but what we intend to do is to set up, on a trial basis, legal clinics which will not be providing full-fledged legal aid, but, rather, basic legal advice and information where members of the public can go to as first-stops to get basic information.

I have discussed this with the Mayors and they have expressed support and enthusiasm and we intend to launch a pilot project starting with, say, two legal clinics. We will discuss this further with the Mayors as to the ideal location for this, either at the CDC or at the community centre. And if it works out well, then we may try to expand to have more clinics.

We intend to partner with the Law Society. The Law Society of Singapore has, separately on its own, done a study on legal aid and pro bono work. One of the main recommendations is for practising lawyer to do 25 hours of pro bono work annually. I think the Law Society's proposal is commendable. In fact, as I have said before, the Law Society is doing good work, not only with the Criminal Legal Aid Scheme - CLAS - but also with the volunteers who work with the Legal Aid Bureau.

I have discussed this with the President of the Law Society as well as the Co-Chairmen of their study team. They have expressed support for the changes which I outlined just now and they want to work with us. We will therefore partner with the Law Society to encourage more lawyers to volunteer pro bono services at the Legal Aid Bureau as well as at the proposed legal clinics. We are now working out the operational aspects of such collaboration and we hope that the first clinic can be set up some time in the second part of this year.

Some other specific questions were asked, for example, whether some of the criminal cases can be dealt with. I have explained in this House before the approach the Government takes for civil legal aid, for capital cases, and that the Law Society of Singapore handles the Criminal Legal Aid Scheme. But with the clinics that we have in mind, if the Member Ms Ellen Lee is talking about minor regulatory offences and people do not know where to turn to, I think we can consider this under the proposed legal clinics.

4.00 pm

I was asked how long the Legal Aid Bureau would take to successfully complete the cases. It is very difficult to measure this for any particular year, because in some cases, the applicant may not have given all the information. They may have to come several times, as they may not have given all the documentation, all the facts. It depends on the cooperation of the other party, if it is a contested matter, and so on. But I would say that if we take divorce cases, in 2006, the average time taken for the Legal Aid Bureau to complete a case was about 20 months. Sir, on the whole, I think that the Legal Aid Bureau will take into account the points made by the Members. We have these changes and let us see how we can progress.

On en bloc sale, this is a topic very much in the news recently and much feedback has been received, including those voiced by the Members who spoke on this. Last year, I appointed a study team to look into the en bloc sale process and the laws, and they have made a number of recommendations. I have also had several sessions of discussions with the President of the Strata Titles Boards and his three Deputy Presidents. We have discussed and they have agreed to the recommendations of the study team which I will now outline.

Basically, we have three areas of changes or proposals. The first concerns the method or process by which we decide on whether an en bloc sale can proceed. We will retain the basic approach. The basic approach is 80% or 90% majority vote based on share values depending on the age of the development, whether it is 10 years or more, or less than 10 years. We will retain that. But in addition to 80% or 90% of the share values, the proposal is that there must also be 80% or 90% majority vote of the total number of units in the development - in other words, share values as well as the number of units.

For purely residential apartments, this will not be a problem because almost invariably 80% or 90% share values will also be 80% or 90% of the units. Why are we doing this? It is because it will address a problem which is particularly felt in mixed developments. There is unhappiness of residential unit owners in a mixed development who hold lesser share values despite owning a substantial floor area and substantial number of units. For example, in a mixed development, the residential units could be amounting to 60% of the total number of units but they have only 20% of the share values. Shopping complexes may have 40% of the units but they may have 80% of the share values. So the residents are out-voted. We therefore have this proposal for the majority of 80% or 90% to be also a percentage majority of the total number of units.

Secondly, we intend to give the Strata Titles Board a certain power to increase the sale proceeds in certain cases. Let me explain. This concerns the distribution of the sale proceeds. We will not change the basic approach for the distribution of the sale proceeds. The basic approach is that the majority owners in the en bloc process will still have to decide on the distribution method most suitable in their particular circumstances. The reason why we want to give this power to the Strata Titles Board is to address situations where the Strata Titles Board considers that a minority owner may not have been treated fairly or equitably in the distribution of the proceeds, although it may not be able to find any aspect of bad faith in the process.

Let me give Members an example. It is just an example. Say, a minority owner does $200,000 worth of renovation when there was no en bloc proposal in the air. And six months later, there is an en bloc proposal which becomes successful. In fact, it means that he has enjoyed his renovated unit only for about two years before having to move out. He really does not suffer a financial loss under the terms of the Act but the Strata Titles Board may, if they have this discretion, increase his sale proceeds by an amount which it considers fair if it considers it fair and equitable to do so in the circumstances. But there will be a cap on the amount that is available to the STB to award such extra amount, and the proposed cap will be an aggregate sum of $2,000 or 0.25% of the sale proceeds from each unit or whichever is higher. So there will be a certain sum with which they can exercise the discretion.

The third change we intend to do is for the Strata Titles Board to issue guidelines on the allowable expenditures; in other words, guidelines to improve the transparency of the process and for there to be greater openness by those who are spearheading the process. For example, the Strata Titles Board can issue guidelines on the allowable expenditure that will be taken into account in the evaluation of financial loss claims. This will provide more certainty to both majority and minority owners. I think this is a point raised by Mr Hri Kumar.

Next, if an en bloc process is initiated and if an en bloc committee is to be formed, we will provide that it should be done at an extraordinary general meeting convened by the management corporation. I think this will make for better accountability. It will provide for more certainty to both majority and minority owners.

I take the point of many Members, including Ms Ellen Lee, who said there may be people in the minority who, for various reasons, do not want to sell. We considered all this at the time when we drafted the legislation. It is not an easy issue because there may be some who want to stay there for sentimental reasons; some who have sworn to their forefathers that they would live there forever; some like the feng shui, and a lot of other reasons. But it is not possible to craft legislation to accommodate all these views, because the only perfect solution is to go back to the old system which required unanimous agreement, but we decided to move away from that when Parliament decided to have the en bloc legislation so that there will not be unanimous requirement and a majority vote. Because, otherwise, we will not be able to either maximise land usage or to rejuvenate our buildings.

Sir, these are the changes we have in mind. I hope they addressed some of the points raised by Members. We will do a public consultation on the proposed changes. We will get feedback and suggestions which we shall take into account before we finalise the amendments on en bloc sale legislation.

Let me touch on the points raised by Ms Sylvia Lim on the age of majority. Sir, the age of majority in Singapore is actually not defined by statute. It is defined by common law which sets it at 21 years.

Let me explain what is the legislative approach that we have taken in Singapore. We have, in our body of laws, different laws to prescribe different ages for qualifications, requirements, disqualifications for a whole host of different contexts, purposes, status or objectives, whether it is for driving licence or for voting in elections. This is because each activity calls for different considerations. For example, the law provides the age of 21 for qualification for membership of Parliament, for entering certain professions, like lawyers, public accountants, engineers, or to be eligible to be a guarantor, or to marry without parents' consent, or to make a valid will. These are some examples for the age of 21.

Then we have laws that prescribe the age of 18 to get a driving licence, to buy cigarettes or alcohol, and so on. The point I want to make is that there is no single threshold age for all purposes. I guess it is because we cannot say adulthood is gained overnight on a fixed birthday, whether it is 21 or earlier. Rather it is attained through a gradual process. The approach that our laws have is a pragmatic one where there is a gradual increase in rights and responsibilities leading up to the age of 21, at which stage nearly all the limitations linked to age are removed. But this does not mean that everything is cast in stone and no aspect of this variegated approach will be ever reviewed. Whilst we have no immediate plans to reduce the age of majority, we are currently reviewing the matter for some specific areas impacting on our drive, for example, to create greater entrepreneurial skills and a risk taking approach, especially for our young. For example, the Government is looking into whether those who are at least 18 years of age can more freely enter into contracts, but this is just an example.

On voting age, we do not intend to change that. Sir, voting in parliamentary elections or voting in election for the Presidency is a very serious matter. It is a decision where voters choose their MP and choose, in turn, which political party or parties form the government to look after and run the country. In the case of elections for the elected President, voters will be deciding on which individual they will entrust to hold the office of President to exercise the custodial and veto powers set out in the Constitution.

Sir, if we set the age below 21, many would still be studying and, in the case of males, would still be doing National Service, or they would have just started work. The current age of 21 means that the voter would have finished National Service and many others would have had some working experience. I think they would then be in a better position to make careful assessments, considered judgments about the quality of the candidates and of other many national issues involved when it comes to forming a judgment and choice involved in casting votes. Sir, I think our model of elections and government has worked well, and I see no pressing reason to change it, including the age of voting.

Yes, I note the experience in other countries, as pointed out by Ms Sylvia Lim. The practice varies and there are also examples of other countries which have kept to a higher age. Malaysia retains the age of 21. Japan has the age at 20.

Sir, I will ask my colleague, Assoc. Prof. Ho, to deal with the rest of the cuts.

The Senior Minister of State for Law (Assoc. Prof. Ho Peng Kee): Mr Speaker, Sir, let me first address the cuts on bankruptcy. Dr Teo Ho Pin, Mr Inderjit Singh and Mr Hri Kumar asked what plans the Ministry has to reduce the number of persons becoming bankrupt. In other words, upstream, try to reduce the flow. The good news is that last year, less than 3,000 - in fact, 2,983 persons - became bankrupt continuing a trend that began in 2004. Incidentally, this is the lowest since 2001. I think that reflects the improving economy.

Measures to reduce the number of new bankrupts indeed must start upstream, and one way is to help people out there realise the importance of managing their finances. Happily, here, professional groups do their part

and this is a point Mr Teo Ser Luck has made - how to involve the private sector? For example, here, the banks and the Association of Financial Management Professionals chip in. They organise seminars and these seminars complement those organised by the IPTO which are targeted at helping people out there realise that it is important to manage their finances properly. Members who want to encourage their constituents to come for these seminars can let me know.

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Then further downstream, Dr Teo Ho Pin mentioned mediation. Indeed, IPTO has taken some steps towards that because for several years now, IPTO has been running a pre-bankruptcy advisory and mediation centre to advise persons in danger of becoming insolvent of the options that are available. Last year, this service helped 1,200 debtors. But, here, it is up to the parties to agree to come for mediation, in other words, the creditors and the debtors come and talk and agree on debt agreement. So it is really voluntary. Last year, 12 such cases were mediated and four were successful. These are early efforts. So what more can be done? I think that is the key query that Members have asked. Indeed, we will do more.

What we are doing now is to follow through on what we had said last year at COS, and it is a natural follow through to what IPTO's efforts have amounted to in terms of mediation. Because, last year, we said that we would consider implementing a repayment scheme to help wage earner debtors, with relatively small unsecured debts, avoid bankruptcy and that we would consult key stakeholders on its feasibility. We have been doing this for the past several months consulting the Association of Banks, its members, insolvency practitioners and lawyers, I am happy to say that there is general support for this scheme which we will call the Debt Repayment Scheme (DRS). DRS will differ from the Voluntary Arrangement Scheme (VAS) which is already available currently. I think Mr Hri Kumar mentioned that and indeed, he is right - the VAS has its limitations. It is court based and all the parties must agree, the creditor agreement must be sought and it can be costly and protracted. So what we want to do is especially for consumer wage earner debtors. What can we do to help them?

The VAS may be more applicable to businesses and partnerships. Now this new DRS scheme that we are introducing is modelled after Chapter 13 of the US Bankruptcy Code, which I think Mr Inderjit Singh has mentioned. So the Official Assignee (OA) has looked at it and found some good features which we are adapting. It will benefit debtors who are working and whose debts do not exceed $100,000. Based on last year's figures, this would have covered some 1,863 or 62% of the debtors who were made bankrupt. And a majority of these would be wage earner consumer debtors who are facing temporary cashflow problems.

Under the DRS, debtors would have a chance to work out a repayment plan, formulated and implemented under the supervision of an administrator, to be completed within the maximum period of five years. Although the repayment plan will not be voted upon by the creditors, the administrator will have to ensure that creditors' rights are not compromised, ie, that they will receive no less than if the debtor had been made bankrupt. When the debtor completes the plan, he will be released from his debts thus avoiding bankruptcy. If the debtor is dishonest or fails to cooperate with the administrator, the administrator can declare that the plan has failed upon which any creditor may then make the debtor a bankrupt.

Whilst the DRS is principally intended to help wage earner debtors who have a regular source of income to repay some or all of the debts, IPTO will be flexible. Deserving debtors who, for example, may be in-between jobs and therefore currently not earning wages can also take advantage of the scheme. To keep it simple, DRS, like I said just now, will apply for a start only to individual debtors and will not be available to businesses or partnerships. Sir, with this scheme, I think more can avoid bankruptcy. But the essence of this scheme is really one of self-help. The debtor must realise that this is an opportunity to avert bankruptcy, so he must cooperate with the administrator and show good faith to ensure that he complies with the terms of the repayment plan. MinLaw will issue a consultation paper and after that we will refine it based on the feedback received. We intend to amend the Bankruptcy Act before the end of the year to bring the scheme into effect. Mr Teo Ser Luck asked whether this will result in IPTO being inundated with more work. I think IPTO will have to adjust and see whether it can cope, for a start. But, of course, we will review its manpower requirements, and I am sure they will ask for help from HQ if need be. But the point is to give the scheme a good start - support it. I am sure bankrupts will indeed be helped.

Next, Dr Teo and Mr Hri Kumar asked how we can expedite or incentivise bankrupts to work towards a discharge. Essentially, our bankruptcy regime strives to strike the right balance, in other words, the creditors' interest to recover as much of the debt as possible and also the debtor's interest to give him a reprieve from his debts and a fresh start in his financial matters. So the key to this still is that the bankrupt must be cooperative and cooperate with the OA. Over the years, OA has indeed implemented several measures to help bankrupts who are already in the regime to get out of bankruptcy. First, Members who are in the House earlier will know that in 1995, we introduced a discharge by Certificate of OA Scheme whereby starting at the time with debts up to $100,000, after a certain number of years, the OA can discharge the bankrupt. This ceiling has been raised and currently stands at half a million dollars. Also, the OA categorises bankrupts who cooperate with its office and contribute regularly to the bankruptcy estate in the green zone. Bankrupts in this zone generally will receive approval to travel overseas or act as directors or manage a business. So that is encouraging.

Mr Inderjit Singh asked why bankrupts who travel overseas without the OA's consent are jailed, instead of being fined and he referred to a court decision. First of all, let me say that requiring a bankrupt to seek the approval of the OA before he travels is not new to Singapore. It is not only so in Singapore because other regimes also have this requirement. I think the rationale is quite clear. Because unauthorised travel can enable the bankrupt and put him in a position either to hide assets or dispose of assets and also make it difficult for the OA to administer the estate. He needs the OA's permission before he travels but the good news is that last year, 33,000 bankrupts applied for approval to travel and about 30,500 (or 91%) were granted approval. But the other point is, why are they jailed? This is a court decision, but let me just say that they are not all jailed because, in fact, the Act allows for a person to be either jailed or fined. So I would say that we should leave it to the court to look at the facts and circumstances of the case because every case is unique - whether he has travelled before, how long he stays away, whether he is a cooperative bankrupt, whether he has other offences hanging over his head. That is why I think we should leave it to the court. My assurance to Mr Singh is that there are cases where the bankrupt is only fined and not jailed. So it is not mandatory jail.

Sir, for the remaining time, I will address Ms Lim's points. I think she is quite anxious. First of all, she is right. We have already announced that when we amend the CPC, we will look at formalising a framework that is already in place. And indeed over the years, both in the Subordinate Court and the High Court - Subordinate Court with the Pre-Trial Conference (PTC), and High Court with Preliminary Inquiry processes - both defence and accused person have been put in a position where more information has been exchanged. Whether it is medical records, list of witnesses or adducing statements that the prosecution will use in the case, these can be made available through these processes. So what we are doing now is that we are looking at the CPC and reviewing it and we will formalise this process. The amendments are now being framed. Basically, there will be a statutory framework where the prosecution would formally inform the defence of his case against the accused. This will include the list of witnesses and statements of accused to be adduced by the prosecution. But Ms Lim asked: how about witnesses' statements? I think we must have taken care here. In fact, she herself addressed the nub of the issue because when you do that, that may inhibit people from coming forward to assist police in investigations and we do rely on publicly assisted crimes being solved. So if witnesses know that their statements given in the course of police investigations may then be disclosed to the accused person, that may inhibit them from coming forward. Moreover, some of this information may, in fact, be sensitive because if it is made available to the defence counsel and it is out there, it may result in evidence being tampered with or destroyed. So I think we should not tamper with the system that has worked. If Ms Lim is still not happy, when we have the consultation and we will have a consultation on this including probably a public consultation, she can put in her views.

The other point that she mentioned was on the High Court. When the High Court hears Magistrate appeals from the Subordinate Court, and when an accused person appeals on sentence wanting to reduce it, why should the High Court have the powers which it currently has to instead raise the sentence? I think we should leave it to the court to decide what is the right punishment in the entire circumstances of the case. Because when the court's powers are invoked to look at the sentence and if indeed it feels, after looking at all the circumstances of the case, that the sentence is inadequate, then I think we should not circumscribe its powers to enhance the sentence. But having said this, let me assure Ms Lim and others in the House that, in fact, last year, of the Magistrate appeals that went up to the High Court, there were only six cases where sentences were enhanced compared to 85 cases where sentences were either affirmed or reduced. And of these six cases, only two of the accused persons lodged the appeal. Two out of more than 90 cases is a very small percentage. So let us not get carried away. I think it is right for the court to do that. I am sure the court is very careful, as it always, in enhancing a sentence.

Dr Teo Ho Pin: Sir, I just want to make some clarifications based on the answers by the Ministers. First, on the legal clinic, I just want to know what is the funding allocated to conduct the two trial legal clinics. Second, on the amendments to the en-bloc sale procedures, when is the effective date and can the Ministry also provide an SOP to facilitate en-bloc sales so that the agents and the Management Corporation can follow that procedures? And, third, in terms of public education to prevent bankruptcy, are there any specific programmes which are conducted at the community level to increase the knowledge of Singaporeans to avoid bankruptcy?

Prof. Jayakumar: Sir, let me answer the two points on legal clinics and en-bloc sales. On funding, I guess the Chairman of the GPC is wondering whether there will be an imposition on the CDC if the CDC partners with the legal clinics. Let me assure him that we want to partner the CDC but we will endeavour to have as little financial imposition on the CDC as possible. What we will be grateful for is if we can use part of the CDC premises for the legal clinic. Other detailed aspects of funding will be worked out later. I think the Ministry of Law will be able to give some funding for this and the Academy of Law is also willing to assist. Basically, the collaboration with the Mayors and the CDCs, if the CDCs are used, will be in the use of a convenient location, and I think it will be helpful because many people go to the CDC for assistance which may have financial and legal implications.

On en-bloc sale, I am unable to give the Member a clear date as of now because we plan to go for public consultations. It is only after the public consultations when we evaluate the responses and the feedback, then we will finalise. But we are thinking of having a timeframe whereby the consultation process and evaluation will not go beyond May or June of this year.

4.30 pm

SOP, yes, I will certainly look into this and how the Strata Titles Board, together with the Ministry of Law, can work on this. I do not think it is a lack of knowledge of the procedures which is a problem because both the committees which are spearheading any en-bloc sales and the lawyers, as well as the developers, are fully au fait. But his point is that all those in the development, which is subject to en bloc, ought to be made aware, I think that is a very important point, and that is why I mentioned that guidelines will be issued. The En-bloc Sales Organising Committee, which I mentioned, from our viewpoint, must not just include those who are pushing or in favour of the en bloc, it must also include those who have a different view on the en-bloc sale proposals.

Assoc. Prof. Ho Peng Kee: The seminars that IPTO conducts are public seminars. These are seminars open to Singaporeans. I take Dr Teo's point that perhaps more Singaporeans should be made aware that they exist. But I have said it, if Members here want to help publicise the seminars, they are welcomed to do so. And on their own, of course, the grassroots advisers can organise seminars for the constituents. Because I know that IPTO, for example, taps the professionals out there, including lecturers from polytechnics, to do these talks.

Mdm Cynthia Phua: For en-bloc sales, I just want to ask the Minister, why is the interest on CPF refund not considered as income loss in relation to the en-bloc sales and compensation itself.

Prof. Jayakumar: I hope Members will bear with me if I do not go into details on this because I learn today that there is an appeal which has been lodged in the case of the Waterfront case. So it is really a matter before the court. But I think it will not be out of place for me to say that my understanding of the position is that monies drawn out of the CPF account to pay for the principal sum of the purchase price has always been included. The issue, I believe, is whether the interest payments on the bank account, or the interest foregone, should also be calculated when we compute financial loss. But I think it is better that I do not pronounce on this while the appeal is on.

Ms Ellen Lee: A question for the DPM. He said that there will be a collaboration between the Law Society of Singapore and the Ministry to have lawyers provide 25 hours of pro bono services at the two legal clinics where our advice would be given. Sir, I am sure you are aware that the Singapore Association of Women Lawyers currently runs about 14 or 15 such services - free legal advice, we call it "free legal counselling" - at about 14 to 15 CCs pro bono . There are also many other lawyers who are providing pro bono services at different parts of Singapore, including the MPS. Sir, my question is, when these two legal clinics which are going to put on trial and these 25 hours that are going to be put in, are they going to be made compulsory as part of the services by lawyers? Would that restrain or stop other lawyers from coming forward to provide their services for free because, I believe, currently, all these services that are provided by them are truly pro bono ? But if you stipulate that there must be a minimum number of hours to be put in and if there should be an introduction of certain requirements like a means test for the applicants, who are going to ask for the legal advice, then we may actually see a situation where fewer lawyers may want to come up to offer their services for free?

Prof. Jayakumar: I thank her for giving me an opportunity to clarify. First of all, the Ministry of Law is not going to prescribe whether or not lawyers must do it compulsorily. That is up to the Law Society. My understanding is that the Law Society is going to exhort its members to give 25 hours of pro bono work annually. My understanding also is that these 25 hours of pro bono work can manifest itself in different ways, not necessarily only in the clinics that we have in mind, but can be in different outfits, whether it is the Family Service Centres or legal clinics attached to meet-the-people sessions. I think wherever the lawyer is offering his services, it is to be welcomed. The arrangement or understanding we have, which we hope to implement with the Law Society, is when we have the legal clinics, the lawyers will come forward to assist in those two legal clinics. I think there are several thousand lawyers in Singapore. So I do not see that this pro bono work and the clinics are going to siphon off lawyers doing good work elsewhere.

Mr Michael Palmer (Pasir Ris-Punggol): Sir, two clarifications for the Senior Minister of State. The first is on the DRS scheme - whether that scheme will take into account the moratorium period given under bankruptcy because, whilst repayment is important, bankrupts or people who are declared bankrupts also have a moratorium on claims against them which gives them a breathing space? The second point is on the exchange of statements and evidence. In the formalisation of that process, will the process also include statements and evidence which the prosecution will not rely on or does not intend to rely on, perhaps because they may be exculpatory for the accused?

Assoc. Prof. Ho Peng Kee: Sir, the answer to the second point is that the prosecution will furnish statements that it intends to rely on as part of its case of the prosecution. So, statements which are not part of the case of the prosecution will not be furnished and any other statements to be tendered later on in court would have to be done with the approval of the court. The other point is on the moratorium. This is the technicalities of the scheme. There is no change in the process. Basically, when there is a petition being filed to make a person with a debt of $100,000 bankrupt, it would then go to the OA Office for examination, whether or not it is a proper case for this scheme to kick in. In that sense, an opportunity would then be given to the debtor to avoid bankruptcy.

Ms Ellen Lee: Sir, I seek the DPM's clarification again regarding the 25 hours of pro bono work. As you know, Sir, we have to take up a practising certificate every year, and I am wondering whether the 25 hours will have to be shown anywhere to show that service has been provided the previous years so that we can practise and take up a practising certificate for the new year. But for those who have not clocked in the 25 hours, then they would not get the practising certificate, or something of that nature. Of course, the other thing to ask is, who is going to keep check on the 25 hours?

Prof. Jayakumar: As I understand it, the question which Ms Ellen Lee posed is if a lawyer cannot show that he has done 25 hours of pro bono work, will he not get a practising certificate? I have to check what the intention of the President of the Law Society is because this is their proposal which I am trying to facilitate through the various ways. I think that the question will only arise if and when pro bono work is made compulsory. Then we have to think through what are the consequences of someone who does not follow the compulsory provision. So my understanding, as of now, is that it is not compulsory. Because if it is compulsory, then we may have to amend the Legal Profession Act about the practising certificate.

Dr Teo Ho Pin: Sir, I am a little bit concerned about the effectiveness of these seminars on how to avoid bankruptcy. I am just wondering whether the Ministry can consider coming up with an "avoid bankruptcy" checklist which can be given to creditors, eg, those taking housing loans and credit card companies. This can be given as a form of advice when consumers are taking up loans so that they will know what are the pitfalls or they can do a proper assessment before they actually take up all these financial commitments.

Assoc. Prof. Ho Peng Kee: Sir, the key question is really financial prudence. I think the message out there is that we take personal responsibility for how we spend. Indeed, Dr Teo is right because the large majority of the cases that go bankrupt are credit related - credit cards, credit facilities. So the general education must be, and all of us Singaporeans will know, that when you become a bankrupt there will be disabilities and inconvenience. So that is the part where there is a deterrence. But how to generally manage one's own finance so that one will not get into trouble - I think that is something which is not for the Government or IPTO to do. But I would agree that these are talks that should be organised on the ground and, indeed, I think all of us who are on the ground and who want to reach out to residents, can do so, and the residents will find it very interesting. But on IPTO's part, IPTO will continue to run public seminars for which Singaporeans are invited.

Mr Hri Kumar: Sir, two points. First, taking from Mr Michael Palmer's point about moratorium in favour of the debtor, what happens in the bankruptcy proceedings is that once a person is declared a bankrupt, all further legal proceedings and executions against him are stayed? This is to ensure that no one creditor steals a march on the others. You may encounter a situation where some creditors are subject to the DRS scheme and because there is no stay of proceedings, any other creditor can then take up execution proceedings, for example, by garnishing the debtor's salary, and therefore stealing a march on the other creditors. Would that situation be addressed? That is the first question. The second question is on the release of statements made by the accused. There is a danger of releasing some, but not all, statements. One of the criticisms often made in court, or in the argument about statements, is that the accused did not say one thing or another in that statement, or he did not, at the first available opportunity, raise a particular defence or fact to the Police. But it is unsafe then to make that argument because you do not have all the statements made by the accused. So what assurance will the public have when an argument is made that the accused did not say any particular thing in the statement, that he may not have said that thing in other statements he has made?

Mr Hri Kumar: 4.42 pm

Assoc. Prof. Ho Peng Kee: Sir, I think the OA, when it operates and runs the plan, will ensure that there is fairness. In other words, it should not be the case where, if the DRS scheme kicks in, some creditors would get preference. I would expect him to then look at what is the list of creditors and ensure that he works with that list. That is the first point. The second point is, like I have said, the CPC amendments would formalise the framework, which currently is in place, which is basically fair because, in a sense, it is like both sides coming together, there is mutual discovery. You show me your case, I show you my case. So, here, the prosecution would be required to make available statements which he will rely on to substantiate his case. I think any witness who has made a statement, assuming he is an honest witness and particularly the accused person, will know what he has said. This current process is one that will serve the public interest because if, in court, he makes a statement which is inconsistent with what he had said earlier on, then, indeed, the statement can be introduced with the leave of the court to show that, no, this is not what he has said. But I would say, whilst we are working out the CPC review, let us wait for the details to be out and, like I said, there will be public consultation. So, at that stage, when the scheme is clear, we can consider all these points.

Dr Teo Ho Pin: Sir, I would like to thank the Minister and Senior Minister of State for the positive responses to the queries by Members and also the comprehensive answers. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn .

The sum of $139,437,000 for Head R ordered to stand part of the Main Estimates.

The sum of $128,138,000 for Head R ordered to stand part of the Development Estimates.