CIVIL LAW (AMENDMENT) BILL

Order for Second Reading read.

4.58 p.m.

The Parliamentary Secretary to the Minister for Finance (Mr S. Ramaswamy): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

This Bill seeks to amend subsection (3) of section 6 of the Civil Law Ordinance by exempting any contract or agreement which purports to be a contract or agreement for the sale or purchase of rubber from the gaming and wagering provisions of the Ordinance. The intention of the Bill is to remove uncertainty prevailing in the rubber market as to the validity of rubber contracts. This uncertainty arose from a decision of the Court of Appeal in the case of Mizrahie versus Stanton Nelson. In this case, one of the two grounds on which the appellant based his appeal was that the contracts which the plaintiffs as rubber brokers entered into on his behalf with third parties were in no sense genuine contracts for the sale and purchase of rubber but were merely colourable transactions entered into for the purpose of enabling him to gamble in differences and as such unenforceable under section 6 of the Civil Law Ordinance.

Representations were made to both the Singapore and Federation Governments that amending legislation was necessary to restore confidence in the rubber market and to remove any doubt as to the legality of rubber contracts.

Singapore's economy is founded largely on the rubber trade and today she is the world's largest rubber market. In 1960, trade in rubber accounted for about 37 per cent of her total trade. It is essential, therefore, that nothing be allowed to jeopardise the effectiveness of the Singapore rubber market.

The proposed amendment would render forward contracts for the sale or purchase of unascertained rubber by description legal and therefore enforceable. Legitimate hedging operations can be carried on without fear that such contracts would be declared void. At the same time, reckless and undue speculation would be curbed as the relevant contracts become enforceable and no defence can be brought on the grounds that such contacts are gaming contracts.

Similar legal provision is contained in the Federation of Malaya Rubber Exchange (Incorporation) Act, 1961, which will soon come into force in the Federation.

I should mention here that the present Bill is linked to the Rubber Dealers (Amendment) Bill which will be considered by the House at a later stage. I should say they are complementary to each other, having the same objective of restoring confidence in the Singapore rubber market.

Sir, I beg to move.

Question put, and agreed to.

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

Assembly immediately resolved itself into a Committee on the Bill. -[Mr Ramaswamy].

Bill considered in Committee.

[Mr SPEAKER in the Chair]

5.03 p.m.

Clause 1 -

The Chairman: The figure "1961" will be altered to read "1962".

Clause 1, as amended, ordered to stand part of the Bill.

Clause 2 -

Mr Ramaswamy: Mr Speaker, Sir, I beg to move,

In page 1, line 22, after "rubber", to insert "either for immediate or future delivery".

The Stanton Nelson case brought to light two matters which require clarification and rectification if the confidence of the rubber trade is to be restored. The first of these will be met by an amendment to the Rubber Dealers Ordinance. That amendment, however, will introduce a definition of "purchase" for the purpose of the Rubber Dealers Ordinance, which requires the purchaser of specific rubber to hold a licence, but not of purchases under forward contracts. A doubt has been expressed that, in view of this definition of "purchase" in the Rubber Dealers Ordinance, the amendment proposed by sub-clause (3) of clause 6 might be construed to be limited to contracts for the purchase of specific rubber only. It is, therefore, proposed to add "either for immediate or future delivery" at the end of sub-clause (3) to remove this doubt in order that all contracts, whether for the purchase of specific rubber or of rubber for future delivery, may be removed from the category of wagering contracts and thereby rendered enforceable.

Amendment agreed to.

Clause 2, as amended, ordered to stand part of the Bill.

Bill reported with amendments; read a Third time and passed.

Mr Speaker: I think it is time for a tea break. I suspend this sitting. I will take this Chair again at 5.35 p.m.

Sitting accordingly suspended at 5.07 p.m. until 5.35 p.m. Sitting resumed at 5.35 p.m.