Mr Paul Kirkdale, who frequently travels between the UK and Singapore, needed a dual SIM phone with 3G connectivity. He went to Sim Lim Square a few months ago and explained his needs to the staff of mobile phone shop Mackin, but was sold a 2G phone instead.
When he realised he had been sold the wrong phone, he was denied an exchange unless he agreed to pay a large sum of money.
On the advice of the Consumer’s Association of Singapore, Mr Kirkdale raised the case in the Small Claims Tribunal and won. However, Mackin refused to pay. As it was a civil case, it meant the 50-year-old had to enforce the court order himself.
“I had to pay a S$120 court fee to get the process started, and a S$300 deposit to the bailiffs before they would take any action, to cover their costs in case Mackin doesn’t have the assets to pay the bills. Out of my total of S$231 claim, I had to invest another S$420, and which I potentially might not get that back,” he recounted.
“How can a company in Singapore be allowed to ignore a court order to pay money to a claimant and it is down to the claimant to pay even more money with no guarantee they will get it back? This is what these companies rely on – that the cost of enforcing the court order is not worth the risk given the original amount claimed,” he said.
A writ of seizure and sale allows the claimant to enter a shop to seize its goods. But even this leaves claimants open to other dirty tricks.
“When you try to enforce an order, and the company is a ‘two-dollar’ company, the company may not have assets,” explained Mr Steven Lam, Director, Templars Law.
“It is worse if the products that you are trying to seize are taken on consignment. So you may find that third parties say: ‘Those goods don’t belong to the shop, but belong to me’,” Mr Lam added.
He said such companies may also choose to cease business, and incorporate themselves as a new company. The company can have the same shareholders and directors, but is seen as a separate entity from the first company in the eyes of the law. The assets of such a company are also likely to be separate from the directors and shareholders.
Mr Lam said further legal action, such as an examination of judgment debtors, or contempt proceedings against an errant company can be difficult for the layman. He might need to hire a lawyer or a case could stretch for months, a luxury that tourists do not have.
Even local shoppers who write off their losses and choose not to report the incident, play a part in keeping these retailers in business.
“Once you have that kind of thinking in place, then it emboldens the shop. It may say: ‘Look, I’ll try my luck, maybe out of 20 cases, I get sued for one.’ At the end of the day it’s still a lucrative business,” said Mr Lam.
He noted that policy makers could consider inserting criminal liabilities and sanctions into the Consumer Protection Act to target shareholders, as well as shadow directors – a concept already being practised in jurisdictions such as Hong Kong, Australia, China and the United Kingdom.