CIVIL LAW (AMENDMENT) BILL

[Mr Speaker in the Chair]

Order for second Reading read.

The Minister for Law and Science and Technology (Mr E.W. Barker): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the object of this Bill is not to alter or change the law but merely to re-state it beyond any doubt. Section 7 subsection (1) of the Civil Law Act states that, "All contracts or agreements, whether by parol or in writing, by way of gaming or wagering shall be null and void." What does "null and void" mean? This is set out in subsection (2), I quote:

'No action shall be brought or maintained in the court for recovering any sum of money or valuable thing alleged to be won upon any wager or which has been deposited in the hands of any person to abide the event on which any wager has been made.'

There is a lot of betting going on in this town: whether Singapore will beat Kelantan by at least four goals, whether Saas Fee will win the Singapore Gold Cup, or whether, as in the last by-elections, all the seven PAP candidates will win. But, sad to say, it was difficult to get a bet against our candidates, even at long odds, in the last by-elections. That is simple enough. That is plain betting. But when it comes to the commodity market, we can get into difficulties. If one buys rubber, ready delivery, there is no problem. But if one buys rubber for delivery in the future, there may be problems. If the intention of the parties is that no delivery is to be made but merely to pay each other on the difference in the contract prices at the date of the contract and the date of purported delivery, then the question arises: is it or is it not a wagering contract? In the case of Mizrahie v Stenton Nelson & Co. Ltd., in 1958, reported in Volume 24 of the Malayan Law Journal at page 97, the Court of Appeal held that certain transactions in future contracts for the delivery of rubber were colourable and therefore null and void, being wagering contracts. But, the decision in the case should have been confined to its facts. However, because of this case which did not go to the Privy Council, rubber brokers in Singapore were rather concerned as to the state of the law. Hence in 1962 an amendment was moved to section 7, and the amendment is in section 7 subsection 3(b), which states:

'Subsections (1) and (2) of this section shall not be deemed to apply -

(a) ...

(b) to any contract or agreement which purports to be a contract or agreement for the sale or purchase of rubber either for immediate or future delivery.

But members will note that this subsection is confined merely to contracts in rubber. Since then the commodity market has grown, not only in popper and sugar. We even have a gold market which was set up last year. Does subsection (3) (b) cover transactions in commodities besides rubber? To make the position clear, we have decided to delete this subsection and substitute it with a declaratory provision stating beyond doubt, in subsection (4), that:

'For the avoidance of doubt, whom any contract for the future delivery of any commodity is entered into in any exchange or market in Singapore, the fact that the contract is entered into by one or both parties with no intention of actual delivery of the commodity but with the intention of realising a profit arising out of differences in the price of the commodity shall not affect the validity or enforceability of the contract.'

Sir, the 1962 Amendment which I referred to sought to preclude the application of subsection (1), the effect of which is to render a wagering contract void to futures contracts in rubber. This is far from satisfactory as futures contracts are not, as such, wagering contracts and there is no necessity to exempt them from the application of subsection (1) of section 7. What this Bill seeks to do is merely to declare the accepted position at common law with regard to all futures contracts. That is to say, the mere fact that there is no physical delivery of the commodities in question does not by itself affect the validity of such contracts. This clarifies the law in Singapore in a manner which is consistent with the established common law position.

Sir, I beg to move.

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. - [Mr E.W. Barker].

Bill considered in Committee.

[Mr Speaker in the Chair]

5.28 p.m.

Clause 1 ordered to stand part of the Bill.

Clause 2 -

Mr Barker: Sir, I beg to move,

In page 1, line 15, to delete the words "in Singapore"

Sir, these words are superfluous. There are commodity brokers in Singapore who deal with local clients in international markets and exchanges. It is therefore desirable, as far as the law of Singapore is concerned, that there should be no doubt as to the validity of these transactions. The amendment now proposed will thus remove such a doubt as it will cover contracts not only entered into by parties in any markets or exchanges in Singapore but also elsewhere.

Amendment agreed to.

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

Bill reported with an amendment, read a Third time and passed.