Second Reading Speech on Civil Law (Amendment) Bill by Senior Minister of State Assoc Prof Ho Peng Kee

19 JAN 2009

Objective of Bill

Sir, this Bill seeks to make 2 sets of amendments to the Civil Law Act. The first concerns the lowering of the age of contractual capacity from 21 to 18 years; the second refines the regime applicable to claims resulting from fatal accidents. A public consultation on the draft Bill in relation to the lowering of the contractual age, was held from 25 August to 19 September last year.

I will now take the House through these 2 sets of amendments. First, the amendments to the age of contractual capacity.

Sir, the current minimum age of contractual capacity is tied to the age of majority, which is 21 years in Singapore. Over the years, the Pro-Enterprise Panel had received feedback that the legal barriers preventing young people from starting and conducting a business should be removed. After conducting a careful study, the Government agrees that the current laws place unnecessary restrictions on young people wishing to do business. Hence, this Bill seeks to de-link the age of majority from the age of contractual capacity, reducing the age of contractual capacity from 21 to 18 years. Other countries such as Australia, Malaysia and Hong Kong also have 18 years as the age of contractual capacity.

To facilitate this, besides amending the Civil Law Act, we will also have to make consequential amendments to a few other Acts which are listed in the Schedule to the Bill.

Madam Deputy Speaker, clause 6 provides that every contract entered into by a minor who has attained the age of 18 years will have effect as if he were a person of full age, unless otherwise provided. This means a contract made by a person who is at least 18 years of age will now be binding and enforceable against him as if he were a person of full age.

Under Clause 6, the person who has attained the age of 18 will be able to enter into contracts to cover a wide range of matters necessary for business purposes. However, Clause 6 comes with an important restriction.

Currently persons below 21 years are not able to hold land in their own name or sell their beneficial interests in land. In view of the legal complexity surrounding land ownership, Clause 6 provides that the ability of an 18-year old to contract will not apply to contracts for the sale, purchase, mortgage, assignment or settlement of any land or a lease of land for more than 3 years. The Bill will instead allow them to contract for leases not exceeding 3 years. This should be sufficient for their business needs until they reach 21 years.

Clause 6 also allows a person who has attained the age of 18 years to litigate in his own name, as if he were of full age, in the types of legal proceedings or actions specified in the Schedule. These are legal proceedings or actions relating to commercial activities, for example non-fulfillment of contractual obligations. Aside from these areas, we have generally preserved the position under present law that minors cannot enter into any contract for the settlement of any legal proceedings.

Madam, consequential and related amendments will be made to the Bills of Exchange Act, Companies Act, Conveyancing and Law of Property Act, Employment Act, Limitation Act, Limited Liability Partnerships Act and the Settled Estates Act. This is to allow persons who have attained the age of 18 to be employed under a contract, act as directors of companies, form companies or limited liability partnerships, furnish bills of exchange and render contracts of service enforceable against them.

Law Reform Committee's proposals on loss of inheritance and savings and the definition of "dependant"

Clauses 3 and 5 of the Bill arise out of the recommendations of the Singapore Academy of Law’s Law Reform Committee chaired by Justice Judith Prakash.

The Committee has recommended, and MinLaw agrees, that in computing claims filed by dependants, account should be taken of any savings or inheritance that they could have received from the deceased. This is because such sums are traditionally put aside by deceased persons, when alive, to eventually benefit their family. Hence, to leave them out of the computation would under-compensate the dependents. The current method of assessment, which is based largely on the annual or monthly sum given to the dependents, is inadequate where there is divergence between what the deceased actually gave and what he could afford to give, or where the deceased preferred to reinvest the moneys instead of disbursing them to his dependants. This amendment will bring us in line with the approach taken in the UK, Australia, Hong Kong, USA and Canada.

Furthermore, the definition of “dependant” will be extended to cover a “former wife”. This will enable ex-wives who have been supported by the deceased prior to his death pursuant to maintenance orders to file dependency claims when their ex-husbands die. Indeed, these ex-wives may still be dependent on the deceased at least for some time after the marriage has ended. Such a right for ex-wives is also found in the laws of UK.

Madam, section 21(4) of the Civil Law Act under the heading of “Bereavement” currently provides that the court may order defendants in fatal accident claims to pay $10,000 in damages for bereavement. This amount has not changed over the past 20 years. Clause 4 of the Bill therefore proposes an increase from the current $10,000 to $15,000, and also allows future variation of the amount by Ministerial Order. We intend to review the sum from time to time to keep pace with inflation and the cost of living. This is the approach also taken in the UK.

Attachments

Last updated on 27 Nov 2012