SOCIETIES (AMENDMENT) BILL

Order for Second Reading read. 4.50 p.m.

The Minister of State for Law and Home Affairs (Prof. S. Jayakumar): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The purpose of this Bill is to amend the Societies Act so as to empower the court, where proceedings are instituted by a registered society, to require it to furnish sufficient security for costs that might be incurred by the defendant in such proceedings. The court will be able to exercise such a discretion when it has reason to believe, on evidence before the court, that the society would be unable to pay the costs of the defendant if it should fail in its action. Upon failure to furnish such security, all proceedings against the defendant in the action may be stayed by order of the court until such time when the security is furnished.

Mr Speaker, Sir, it is common knowledge that costs will have to be paid in any civil litigation. The party that loses his case in court will normally have to pay the costs of not only his, but that of the other party. If the court's order is not observed then, as the law stands at present, any judgment against a registered society can only be enforced by writs of execution against the assets of the society. However, there are instances where the successful party has not been able to recover the costs from the plaintiff. This means that if a society institutes legal proceedings but it does not have the assets or funds to meet the costs of such proceedings, a defendant who successfully defends an action brought against him by a society would be unable to recover his costs from the society.

This is not an academic issue. We have the recent example of a political party, the Workers Party, which instituted defamation proceedings against an individual, Mr Tay Boon Too, a former Member of Parliament, and the Attorney-General (representing the former Department of Broadcasting). The plaintiff lost its defamation case against the defendants but did not fully pay the costs awarded to the defendants. Execution and garnishee proceedings taken by one of the defendants to realize a sum of about $25,000 as costs due to him showed that the plaintiff society had only $18.47 in its bank account. I think we are all familiar with the fact that an Order of Court was applied for and obtained for the appointment of an Official Receiver, in whose hands will be placed the assets of the party and who will be charged with the responsibility of getting the assets of the party and paying out its just and lawful debts. In spite of having such a paltry sum in its bank account and still being deeply in debt, that society nevertheless had again brought another defamation suit, as we know, against the Second Deputy Prime Minister, which, if it were to lose, would render it liable to pay another large sum of money in costs.

The citizens of Singapore must be protected from such acts of irresponsibility on the part of the societies or any of its officials acting on its behalf. Rights must be accompanied by responsibilities. The right to seek redress in our courts is open to all; but it must be accompanied by a responsibility to comply with the awards and orders of the court.

This amending Bill does not shut off or preclude any party from resorting to justice in accordance with the law. Although access to the courts must always be made available to all to pursue their just claims and grievances, we must ensure at the same time that defendants who have been successful in warding off unjustifiable and unreasonable claims and who have been unjustifiably dragged to court, should not be left without a hope of recovering the costs that they have been made to incur. The present, Bill seeks to prevent such abuse of our legal process by a registered society instituting legal proceedings without a care as to whether it has the means to meet the costs of the legal action.

In addition to the requirement to furnish security for costs, the Bill also seeks to make certain officers of the society who approved the institution of legal action jointly and severally liable for the balance of any costs awarded to the successful defendant should the amount of security given be insufficient. This would also apply to any person who, on subsequently becoming an officer of the society, does not take reasonable measures to seek discontinuance of the legal proceedings. This will serve as an additional check against irresponsible acts by the officers of the society who use the society's name to initiate legal proceedings and will ensure that the court's award on costs will not be rendered meaningless as a result of the society's inability to pay.

The amendments which this Bill seeks to introduce will effectively check the abuse of the process of the court by irresponsible officers of a registered society and help to preserve the common citizens' respect for law and order as administered by the courts. Without such an amendment, any society may resort to law without a sense of responsibility towards its legal obligations to pay the costs of the defendant, if it were to lose the action. We have, as I said, already an example of such irresponsibility. This amendment will prevent further similiar acts of irresponsibility and abuse of our judicial process.

Question proposed.

Mr Jeyaretnam: Mr Speaker, Sir, before I speak, may I declare here - it is quite obvious to me - that I have an interest in that not only am I a member of the Workers Party and therefore I have an interest in this Bill but that my firm is also acting for the Party and for another plaintiff in this action against the Second Deputy Prime Minister. Mr Speaker, Sir, may I then carry on, having declared my interest?

Mr Speaker: Carry on.

Mr Jeyaretnam: Thank you. Mr Speaker, Sir, the Minister of State has outlined the reasons why it has been found necessary to introduce this amendment, and he goes back to the one and only case of the Workers Party suit against Mr Tay Boon Too who was elected a Member of Parliament in 1972 and also against the then Department of Broadcasting. That action was commenced way back in 1972 (I stand corrected) and the beginning of 1973 against the Department. The matters were concluded in 1974 in the High Court when the High Court dismissed the action of the Party against both the defendants, Mr Tay Boon Too and the Attorney-General who was sued as nominee for the Department of Broadcasting. The Court holding, as against Mr Tay Boon Too, that we had not proved that he spoke those words of which complaint had been made and yet at the same time the Court holding that the Attorney-General succeeded in his defence of justification in that he had proved that all that was broadcast were the very words spoken by Mr Tay Boon Too at this public rally. Be that as it may, Mr Speaker, costs were awarded to be paid by the Workers Party, and in an appeal to the Court of Appeal the appeal was dismissed and costs were awarded to be paid for the appeal as well. As I said, that took place in 1975 or at the latest, I think, in 1976 before the Court of Appeal.

Nothing was done to try and prevent societies from instituting actions where they have not paid the costs until this year when the Party again commenced an action against the Second Deputy Prime Minister (Foreign Affairs) for what the Party considered defamation of it.

Mr Speaker, Sir, if I may say so, the impression one is left with is that this Bill has been introduced solely for the benefit of the Minister and is directed against this particular society, the Workers Party, that I represent. This is a piecemeal legislation and, in my respectful view, Mr Speaker, Sir, is undesirable. We have not been given any instances of several cases of societies commencing proceedings against suitors, against defendants, and not being able to pay the costs which have led to the introduction of this Bill. The only reason that one is left with is that this Bill has been introduced because the Workers Party has seen fit to sue the Second Deputy Prime Minister (Foreign Affairs), The writ was filed on 1st February 1982 and the Bill was read for the First time on 25th March 1982.

It is the function of Parliament, if I may so humbly suggest, to legislate for the general good and benefit of all its citizens and not for the benefit of any one particular person or body nor should legislation be directed against one particular body or person. This is not the only time, Mr Speaker, Sir, that a Bill has been introduced and passed as a result of litigation in court. After the termination of the proceedings against Mr Tay Boon Too and the Department of Broadcasting, a Bill was introduced and passed which protected the Department of Broadcasting from payment of any damages for any incorrect reporting in its broadcasts; clearly intended to cover the situation that was the subject of the case against the Department brought by the Workers Party.

May I say again that it is an undesirable state of affairs when Parliament is asked to legislate for a particular person or against a particular party, and this is what it would appear to be. I do not know that it is even necessary for an Act to be passed. I do not know whether the Minister of State has looked at the Rules of the Supreme Court, because if he does I would suggest that he will find there, in one of the Orders, power in the courts themselves to order a plaintiff to pay costs where the plaintiff is a nominal plaintiff acting for the benefit of other person or persons and a society is, of course, a nominal plaintiff and it is acting for the benefit of its members. So there is already the power, as I see it, in the courts on the application of the defendant to order that a plaintiff provide security for costs before he continues with his action in court. I do not really know that we need an amendment to the Societies Act to bring that about when there is already the power in the court.

This Bill seeks, by sub-clause (3) of clause 3, to apply this amendment retrospectively and, in particular, to the action brought by the Party against the Minister. It has been said that legislation must as far as possible not affect rights that have already accrued and on which parties have begun or commenced action. For these reasons, Mr Speaker, Sir, I would ask that this House considers the Bill further.

I myself do not propose to vote on this. I have declared my interest. I shall abstain.

Mr Eric Cheong Yuen Chee: Mr Speaker, Sir, I rise in support of the Bill to amend the Societies Act by requiring a society which commences an action in a court of law to give, at the discretion of the court, security for the costs of the defendant in the action.

This Bill may seem to be aimed at curtailing the right of a society to sue in a Subordinate Court as well as in the High Court whereas any other legal person under the Companies Act or the Cooperative Societies Act is not similarly restricted. The short answer to this apparent anomaly is that a company or a cooperative society, being basically a business organization, considers carefully the financial costs and consequences before commencing a lawsuit. Likewise a natural person thinks of the likely effect on his pocket and his property before he even contemplates taking a legal action against another person. But a society registered under the Societies Act is a different kettle of fish entirely, particularly a society which operates with hardly any funds and possesses little or no assets of its own.

Sir, the people who run such a society may have no compunction about suing others, left and right, regardless of whether the society has any grounds or not. Why, you may ask. The reason is that a society and its officers have nothing to lose but everything to gain by suing indiscriminately and irresponsibly. If the persons who are unfortunate enough to be targets of the unjustified lawsuit of such a society fail to defend themselves in court, they may end up paying damages to the society, to add insult to injury. If they defend themselves in court and succeed against the society, as they should, on a lack of merits of the society's case, they find that they cannot even recover their own costs from the society.

Mr Jeyaretnam: On a point of order, Mr Speaker, Sir. I have refrained from speaking at all about the subject matter of the suit or the merits or demerits of that action. That matter is now before the court. It is sub judice and I do not know if the hon. Member can speak about whether it is justified or unjustified in this House when the action is still pending before the court. It is for the court to decide and not for the Member here to say whether it is justified or not justified.

Mr Eric Cheong Yuen Chee: Mr Speaker, Sir, may I clarify this point. I am not referring, in particular, to the suit which is now before the court. I am talking about it in general terms which may affect other societies. May I be allowed to continue, Sir?

Mr Speaker: So long as you stick to your general terms.

Mr Eric Cheong Yuen Chee: Yes. If they defend themselves in court and succeed against the society, as they should, on a lack of merits of the society's case, they find that they cannot even recover their own costs from the society. This is not a hypothetical situation but it has happened in Singapore recently. People who have been inconvenienced by the need to engage a counsel to defend themselves against a society's frivolous or vexatious libel suit found themselves saddled with a bad debt even after their successful defence, because the society turned out to be a legal person of straw and could not pay the costs.

This is why the amendment to the Societies Act, as proposed in the Bill, must be adopted by this House because a society is often run by persons of substantial worth financially, if not morally. The public impression is that a society is of good financial standing but when the truth is found out, as successful defendants of frivolous and vexatious libel suit by one society, it is too late. To make matters worse, the officers of such societies under the present Act are not liable in any way for the judgment debts incurred by a society in this irresponsible manner.

The Bill seeks to plug, what I consider, a lamentable loophole in the existing law. Far too often, up to now, this loophole lends itself to cynical and merciless exploitation by the unscrupulous, unprincipled and unethical officers of societies as against other persons who cannot shelter behind the fictitious but legal personality of societies. Irresponsible officers of paper societies will now be assuredly forced under the Bill to think of the possible financial consequences to themselves before they freely sue others in the name of their societies.

It is needless to add further to what I have said. My main consideration in supporting this Bill is that a society with a legitimate cause of action will still be able to sue as freely as before and that the members of the public are henceforth protected from prosecution and harassment by a society without any legitimate cause of action. It is imperative that the right of a society to sue be regulated by the State when the officers of the society are slap-happy on lawsuits and do not respect the right of citizens - if they have done no wrong - to enjoy a peace of mind.

Sir, I support the Bill.

The Second Deputy Prime Minister (Foreign Affairs) (Mr S. Rajaratnam): Mr Speaker, Sir, I heard through the grapevine that -

Mr Speaker: Mr Rajaratnam, I hope you are not speaking on anything sub judice.

Mr Rajaratnam: No, Sir. References have certainly been made here which involved me. First, may I declare my personal and pecuniary interest in this matter which, as the hon. Member for Anson has learned, is the proper thing to do. I understand the hon. Member for Anson to have said, in reference to this matter before the House, that this Bill is being brought about to protect me in a lawsuit which I did not take but which he has taken against me. The distinguished hon. Member for Anson has made it a practice to take on lawsuits which he does not have a win.

Mr Jeyaretnam: On a point of order, Sir. We are treading on very dangerous ground here. The matter is sub judice and the Hon. Minister must be aware that it is not open to him to talk about whether he has got a winning case or the Party has got a winning case.

Mr Rajaratnam: Past cases. Mr Speaker, Sir, I think I know enough law not to make a judgment on his present case. But I am referring to past cases.

Mr Jeyaretnam: How many do you know?

Mr Rajaratnam: Well, as far as I know there is -

Mr Jeyaretnam: Only one case.

Mr Rajaratnam: There is an appeal going around, or going to go around, asking for public assistance for a party which was involved in lawsuits -

Mr Jeyaretnam: Only one.

Mr Rajaratnam: May I finish my speech? - and which has the distinction of being the first political party in this country or in any other country which has been brought to a state of bankruptcy by a politician. I know of no political party in the world which has been put in the hands of a Receiver and no politician has accomplished this miraculous feat. What I am here for is to make it quite clear to the hon. Member for Anson that this Bill has nothing to do with retrieving me from a lawsuit which he has taken against me, since he has made reference to this particular case. I did not make any reference.

May I just remind him that as far as I am concerned, I need no legal protection against his miraculous capacity to misread the law and take action against people, without knowing his law.

Prof. Jayakumar: Mr Speaker, Sir, let me respond to the points raised by the Member for Anson. But before I do so, I think we should place on record certain important aspects of his response. I think we should place on record that he has never denied that his party instituted proceedings. He has never denied that he lost the proceedings. He has never denied that his Party refused to comply with the Orders of the court on costs, and he has not denied that notwithstanding the deliberate non-compliance with orders for costs in one proceeding, his society, nevertheless, proceeded to institute yet another proceeding . . .let's disregard who was the other party.

The Second Deputy Prime Minister (Foreign Affairs) has already replied to his first point, namely, that the Member for Anson has the impression that this legislation is directed against his political party and designed for one particular pending suit. Anyone who reads the amending Bill, and one does not have to be a lawyer to understand this, anyone who reads the amending Bill will see that it covers all societies which come under the ambit of the Societies Act. That is my first observation - that it is a complete untruth to say that this legislation is directed against one party. Any other society which falls within the purview of the proposed section 35A (1) will be covered by the intent and purport of this amending Bill.

Secondly, he has asked whether I could point to other instances where other societies have been as delinquent and as contemptuous of court orders as his society has been. Mr Speaker, Sir, my answer to that is this. It is his party, his society, through its wilful disregard for properly obtained orders of the court, which has shown the way for possible abuse and misuse of our judicial process, of our legal process and of our system of administration of the law. We do not have to wait for other perpetrators of the same kind of abuse of our court process before we introduce this legislation. Fortunately, the majority of societies, to the best of my knowledge, have paid due regard to our legal and judicial process. But now we have a society which has repeatedly not complied with the orders of the court and comes, nevertheless, with an institution of another proceeding. If this legislation is not passed, that society will be able to institute yet a third, a fourth and other proceedings against other defendants and thereby open the way for other societies to follow suit.

Mr Speaker, Sir, he asked that the principle of legislation should be that legislation must be for the general good of society. May I inform him that that is what this Bill is all about. Is it in the interest of our society that a registered society be permitted to abuse our judicial process, to disregard properly obtained orders of the court? The approach which the society seems to adopt is to treat our legal system and our court process as a Las Vegas casino where the judicial process is regarded as a roulette wheel, where approach to litigation is made in a gambling manner, to drag a defendant each night in a pot-luck fashion and, when he fails, to sneak out without paying and to come back another night with another defendant in tow to try his luck again. This cannot be in the interest of our society. This is a reprehensible, irresponsible attitude for anyone, more so for a political party which claims that it will provide an alternative government, and all the more abhorrent when perpetrated by a member of the noble profession of Advocates and Solicitors. We cannot have our courts subjected to such abuse. We will uphold the dignity of our courts and the judicial process.

Finally, he has asked whether I am aware of the Rules of the Supreme Court because in his view this amending Bill is not necessary at all for there is ample provision in the law to meet the intent. Let me say that not only was I aware of the Rules of the Supreme Court but we had also sought the expert opinion of the Attorney-General who advised us that the existing provisions would not be adequate and that this -

Mr Jeyaretnam: Order 23.

Prof. Jayakumar: Order 23 and the rules thereunder. Let me say, Mr Speaker, Sir, that we are not only aware but we have taken the precaution of being advised by the Attorney-General. Given a choice of having to choose between the opinion of the Attorney-General and the expert opinion of the distinguished Member for Anson, I accept, of course, the opinion of the Attorney-General who has researched this matter and not given it on the spot.

Mr Jeyaretnam: Mr Speaker, Sir, I only rise to reply to the wild allegations that have been made against my party and me in the speeches. First of all, it has been suggested that we are in contempt of court. If we are in contempt of court, the Minister knows what the remedy is. This is the first time I have heard it suggested that a defendant who is unable to pay the costs that have been ordered against him is committing a contempt of court and that he should thereafter be debarred from bringing fresh proceedings. This is new to me. It is not contempt of court, as I understand it.

Secondly, it has been suggested that we are abusing the judicial process. I do not know how we are abusing the judicial process. Mr Speaker, Sir, again, it is not, as I understand it, an abuse of judicial process for a man, even though he has lost one suit and has not paid the costs, to bring another suit, if he thinks he has a case. It is not an abuse of judicial process. If it is an abuse of judicial process, again the Minister knows that there are remedies. The courts will deal with them, if they are an abuse of judicial process. So let us have an end to all these allegations that we are in contempt of court and abusing judicial process. My Party, right from the beginning, has endeavoured to pay full regard to and uphold the dignity of the court. My Party is not the one which has been committing contempt of court. I called a press conference sometime ago to draw attention to the various contempts of court that have been perpetrated by members of the ruling party.

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. - [Prof Jayakumar].

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