CONVEYANCING FEES REVIEW COMMITTEE (Recommendations)

Mr Wong Kan Seng: Under Article 124, a child born overseas can be registered under certain conditions.

Dr Kanwaljit Soin: Could the Minister please be good enough to give those criteria because there are some mothers who are in this predicament and they would like their children to become Singapore citizens?

Mr Wong Kan Seng: I think those mothers who want to register their children can apply to the Registry of Citizens. From records, we know that more than 90% of those mothers who registered their children have their citizenship applications approved. So that is not a problem at all. When I go overseas and meet some Singaporeans, they raise this question with me and I have explained to them and they have accepted it.

Dr Ker Sin Tze asked the Minister for Law whether the Conveyancing Fees Review Committee has submitted its recommendations and, if so, what are its main recommendations and whether the Government will accept them.

The Minister for Law (Prof. S. Jayakumar): Mr Speaker, Sir, in July 1994, with the agreement of the Chief Justice, I set up a Conveyancing Fees Review Committee headed by Justice Chao Hick Tin to examine whether it was in the public interest to:

(i) retain, modify or abolish the existing fixed fee scale for non-contentious conveyancing matters; and

(ii) make such recommendations as the Committee considers appropriate in the circumstances.

Other members of the Committee were two senior advocates and solicitors, the Registrar of Titles & Deeds, and a representative each from the Law Society, the Association of Banks in Singapore, CASE, the Finance Houses Association of Singapore, and the Real Estate Developers Association of Singapore.

The Committee carefully considered the views of members of the public, CASE, the Law Society of Singapore, the Association of Banks in Singapore and the Real Estate Developers' Association of Singapore.

The Committee submitted its report to me earlier this year. Its main recommendation is to retain a system of mandatory fixed fee scale for all transactions up to and including $5 million (which, on statistics then available to the Committee, covered more than 99% of all transactions) but they recommended that the scale of fees be lowered by between 13.95% and 30.68% depending on the value of the transaction. The Committee also recommended a fee scale for transactions between $5 million and $20 million (which in fact constitute less than 1% of the total transactions) but that this scale be used only as a guide. Fees for transactions above $20 milion, which of course are very few, would be entirely free for negotiation.

The Committee sought to strike a fair balance between the interest of consumers and those of the profession and took into account the concerns of different segments of our society. Their recommendations are balanced and reasonable and should bring down the overall legal costs of purchasing a property for the vast majority of Singaporeans.

The Chief Justice and Attorney-General agree with the Committee's recommendations. The Committee considered whether to abolish scale fees altogether, but concluded that, at this point in time, it is in the public interest to retain a mandatory fixed scale fee. However, it recognises that this is a matter which will have to be reviewed in the light of changing circumstances, and that a further review at a future date may well be necessary.

My Ministry accepts the Committee's recommendation as a reasonable and practical transitional arrangement. But in logic and principle, I agree with CASE that a fixed scale is an anachronism in a free market economy such as Singapore's. But, Sir, I believe that there is merit in taking a gradual approach, instead of making a sudden drastic change to the existing system. Let me say, however, Sir, that the complete abolition of scale fees is a matter of time, and the legal profession should use this time to prepare itself for the free market.

Dr Ker Sin Tze (Aljunied GRC): Can the Minister tell us when will the recommendation be implemented? The Minister said that, in the long run, it would be desirable to abolish the scale fees. When will it be abolished? How many years from now?

Prof. Jayakumar: Sir, the implementation will require amendments, I understand, to certain rules concerning remuneration of solicitors' fees. So this requires consultation between the Attorney-General and the Chief Justice and I expect that the implementation will take place soon after the necessary amendments to the rules are made and I do not expect a very long delay. As to the complete abolition of scale fees, as I have said, I am in favour of a gradual approach. Let us have these changes implemented and we examine what is the impact and how these changes have affected the nature of conveyancing transactions. And I think we should review it again in about four to five years' time.

Mr Chiam See Tong: Sir, the prices of HDB flats have gone up quite high. Do these scale fees cover the sale and purchase of HDB flats?

Prof. Jayakumar: My understanding, unless the Member corrects me, is that the legal services for the vast majority of HDB transactions are handled by the HDB. Unless, of course, where a party deliberately on its own volition chooses not to use the services, the scale fees will come into play.