How Weng Fan v Sengkang Town Council: Negligence, Control Failures, and Town Council Liability

The Court of Appeal heard appeals by How Weng Fan, Sylvia Lim Swee Lian, Low Thia Khiang, Pritam Singh, Chua Zhi Hon, and Kenneth Foo Seck Guan against Sengkang Town Council and Aljunied-Hougang Town Council regarding liability for negligence and control failures in the Aljunied-Hougang Town Council's payment processes. The court found the Town Councillors and Employees grossly negligent in implementing AHTC’s payments process, which led to the persistence of what were referred to by parties as “control failures” in the System. The court clarified principles of pleadings and found some parties liable in negligence.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal allowed in part. The Town Councillors and Employees are liable to Sengkang Town Council in negligence for permitting the control failures in the System and Ms Lim is liable to Sengkang Town Council in negligence for causing AHTC to award a new contract to Red-Power. Mr Low, Ms Lim, Ms How, and Mr Loh are liable to AHTC in negligence for permitting the control failures in the System.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding liability of AHTC members for negligence in implementing payment processes. The court found gross negligence and clarified pleading principles.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Pritam SinghAppellantIndividualAppeal allowedWon
How Weng FanAppellant, RespondentIndividualLiable in negligence for permitting control failuresLost
How Weng Fan (Personal representative of the estate of Danny Loh Chong Meng, deceased, in his personal capacity and trading as FM Solutions & Integrated Services)Appellant, RespondentIndividualLiable in negligence for permitting control failuresLost
FM Solutions & Services Pte LtdAppellantCorporationAppeal allowed in partPartial
Sengkang Town CouncilRespondent, AppellantStatutory BoardAppeal allowed in partPartial
Sylvia Lim Swee LianAppellant, RespondentIndividualLiable in negligence for control failures and Red-Power contractLost
Low Thia KhiangAppellant, RespondentIndividualLiable in negligence for permitting control failuresLost
Chua Zhi HonAppellantIndividualAppeal allowedWon
Kenneth Foo Seck GuanAppellantIndividualAppeal allowedWon
Aljunied-Hougang Town CouncilRespondentStatutory BoardAppeal allowed in partPartial

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeYes
Judith PrakashJustice of the Court of AppealNo
Tay Yong KwangJustice of the Court of AppealNo
Woo Bih LiJudge of the Appellate DivisionNo
Andrew Phang Boon LeongSenior JudgeNo

4. Counsels

Counsel NameOrganization
Chelva Retnam RajahTan Rajah & Cheah
Netto LeslieNetto & Magin LLC
Chin Li Yuen MarinaTan Kok Quan Partnership
Chan Ming Onn DavidShook Lin & Bok LLP

4. Facts

  1. AHTC had a flawed system of governance that caused improper payments to FMSS and FMSI.
  2. Sylvia Lim and Low Thia Khiang allowed a system that enabled Loh and How to benefit from payments to FMSS/FMSI.
  3. The KPMG Report found pervasive control failures and an unacceptably high degree of financial responsibility relinquished to conflicted officers.
  4. The system lacked independent checks against payments made by AHTC to FMSS/FMSI.
  5. The Town Councillors were aware of Ms How’s and Mr Loh’s potential conflict of interest as early as 19 May 2011.
  6. Ms Lim failed to renew contracts with Digo Corporation Pte Ltd and Terminal 9 Pte Ltd which offered the same services at significantly cheaper rates.

5. Formal Citations

  1. How Weng Fan and others v Sengkang Town Council and other appeals, , [2023] SGCA 21
  2. How Weng Fan and others v Sengkang Town Council, 196 of 2019, Civil Appeal No 196 of 2019
  3. How Weng Fan and others v Aljunied-Hougang Town Council, 197 of 2019, Civil Appeal No 197 of 2019
  4. Sylvia Lim Swee Lian and others v Sengkang Town Council, 198 of 2019, Civil Appeal No 198 of 2019
  5. Sylvia Lim Swee Lian and others v Aljunied-Hougang Town Council, 199 of 2019, Civil Appeal No 199 of 2019
  6. Sengkang Town Council v Sylvia Lim Swee Lian and others, 200 of 2019, Civil Appeal No 200 of 2019
  7. Aljunied-Hougang Town Council and Pasir Ris-Punggol Town Council v Sylvia Lim Swee Lian and others, 668 and 716 of 2017, Suit Nos 668 and 716 of 2017
  8. Aljunied-Hougang Town Council v Sylvia Lim Swee Lian and others, 668/2017, HC/S 668/2017
  9. Pasir Ris-Punggol Town Council v Sylvia Lim Swee Lian and others, 716/2017, HC/S 716/2017
  10. AHTC v FMSS, 835/2017, HC/OS 835/2017
  11. Aljunied-Hougang Town Council and another v Lim Swee Lian Sylvia and others and another suit, 241, [2019] SGHC 241

6. Timeline

DateEvent
Town Councillors were aware of Ms How’s and Mr Loh’s potential conflict of interest.
AHTC filed Statement of Claim (Amendment No 1).
Judge disallowed amendments in an oral judgment.
Judgment delivered in How Weng Fan and others v Sengkang Town Council and other appeals [2022] SGCA 72.
Judgment reserved.
Judgment delivered.

7. Legal Issues

  1. Negligence
    • Outcome: The court found the Town Councillors and Employees grossly negligent in implementing AHTC’s payments process.
    • Category: Substantive
    • Sub-Issues:
      • Breach of duty of care
      • Causation of damage
      • Gross negligence
  2. Breach of Duty of Care
    • Outcome: The court held that the Town Councillors and Employees had breached their duty of care by permitting the ‘control failures’ to exist in the payment process.
    • Category: Substantive
    • Sub-Issues:
      • Failure to implement adequate safeguards
      • Involvement of conflicted persons
      • Failure to exercise proper scrutiny
  3. Pleadings
    • Outcome: The court clarified the relevant legal principles of pleadings and, in particular, when it may be appropriate for a court to find a party liable despite some possible shortcomings in the pleadings.
    • Category: Procedural
    • Sub-Issues:
      • Material facts
      • Irreparable prejudice
      • Amendment of pleadings

8. Remedies Sought

  1. Damages
  2. Declaration of breach

9. Cause of Actions

  • Negligence

10. Practice Areas

  • Civil Litigation

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
How Weng Fan and others v Sengkang Town Council and other appealsCourt of AppealYes[2022] SGCA 72SingaporeThe judgment being appealed from.
V Nithia (co-administratrix of the estate of Ponnusamy Sivapakiam, deceased) v Buthmanaban s/o Vaithilingam and anotherCourt of AppealYes[2015] 5 SLR 1442SingaporeCited for the principle that parties are bound by their pleadings and the court is precluded from deciding matters not put into issue.
OMG Holdings Pte Ltd v Pos Ad Sdn BhdCourt of AppealYes[2012] 4 SLR 231SingaporeCited for the principle that parties are bound by their pleadings and the court is precluded from deciding matters not put into issue.
Ma Hongjin v SCP Holdings Pte LtdHigh CourtYes[2021] 1 SLR 304SingaporeCited for the rationale of disallowing a claim that is not pleaded.
Development Bank of Singapore Ltd v Bok Chee Seng Construction Pte LtdHigh CourtYes[2002] 2 SLR(R) 693SingaporeCited for the principle that only material facts need to be pleaded.
Drane v EvangelouEnglish Court of AppealYes[1978] 1 WLR 455England and WalesCited for the principle that a court may find a landlord liable to a tenant for trespass even if the tenant only pleaded a claim for a breach of covenant on quiet enjoyment.
Asia Business Forum Pte Ltd v Long Ai Sin and anotherCourt of AppealYes[2004] 2 SLR(R) 173SingaporeCited for the principle that the court may refuse to grant leave to amend the pleadings if it would cause irreparable prejudice to the respondent.
Acute Result Holdings Ltd v CGS-CIMB Securities (Singapore) Pte Ltd (formerly known as CIMB Securities (Singapore) Pte Ltd)High CourtYes[2022] SGHC 45SingaporeCited for the principle that the court may allow the plaintiff to advance its case despite accepting that the plaintiff had changed its case between its pleadings and its closing submissions.
Ho Soo Tong and others v Ho Soo Fong and othersHigh CourtYes[2023] SGHC 90SingaporeCited for the principle that the pleadings were nonetheless sufficient to allow them to mount such a claim because the “material facts required which support a claim of common intention constructive trust have been pleaded by the [p]laintiffs”.
BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and anotherCourt of AppealYes[2023] SGCA(I) 1SingaporeCited for the principle that the court considered whether the respondents to the appeal had properly pleaded their claim that the first respondent would have wound up PT Kaltim Supacoal for defaulting on its payment obligations.
Review Publishing Co Ltd and another v Lee Hsien Loong and another appealCourt of AppealYes[2010] 1 SLR 52SingaporeCited for the principle that O 20 r 5(1) affords the court a wide discretion to allow pleadings to be amended at any stage of the proceedings on such terms as may be just.
Sheagar s/o T M Veloo v Belfield International (Hong Kong) LtdCourt of AppealYes[2014] 3 SLR 524SingaporeCited for the principle that O 20 r 5(1) affords the court a wide discretion to allow pleadings to be amended at any stage of the proceedings on such terms as may be just.
Parakou Shipping Pte Ltd v Liu Cheng ChanHigh CourtYes[2016] SGHC 48SingaporeCited for the principle that O 20 r 5(1) affords the court a wide discretion to allow pleadings to be amended at any stage of the proceedings on such terms as may be just.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2014 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Control failures
  • Payments process
  • Duty of care
  • Gross negligence
  • Pleadings
  • Material facts
  • Irreparable prejudice
  • Amendment of pleadings
  • Conflicted persons
  • System

15.2 Keywords

  • Negligence
  • Town Council
  • Control Failures
  • Pleadings
  • Singapore
  • Civil Litigation

17. Areas of Law

Area NameRelevance Score
Negligence80
Civil Procedure75
Contract Law20
Corporate Law15
Commercial Disputes10

16. Subjects

  • Civil Procedure
  • Tort Law
  • Negligence
  • Local Government Law