City Harvest case: Final verdict triggers review of CBT law; Shanmugam to make ministerial statement

SINGAPORE — In the wake of the apex court’s decision to uphold the reduced sentences of six former City Harvest Church (CHC) leaders, Law and Home Affairs Minister K Shanmugam said on Thursday (Feb 1) he will deliver a ministerial statement in Parliament — which sits next week — on what he described as a “serious matter”.

Mr Shanmugam made the brief remarks on his Facebook page, as he referred to a separate statement issued by the Attorney-General’s Chambers (AGC) saying it will work with the relevant ministries to review the Penal Code, “to ensure that company directors and other persons in similar positions of trust and responsibility are subject to appropriate punishments if they commit criminal breach of trust (CBT)”.

The public statements by Mr Shanmugam and the AGC came after the five judges presiding over the case found that a review was “not only essential but also long overdue owing to the dated nature of the provision (on CBT)”.

Delivering the judgement in a packed courtroom, Judge of Appeal Andrew Phang said the apex court agreed with the High Court’s 2-1 majority ruling last April that an “agent” under Section 409 of the Penal Code (aggravated CBT) does not include directors of corporations, governing board members, key officers of charities or officers of societies. The latest ruling means Section 409 has been wrongly interpreted on some occasions for the past 40 years.

Until last April, the existing position in Singapore has been based on a High Court decision in a case involving Tay Choo Wah and the Public Prosecutor, which was heard between 1974 and 1976. The ruling then found that directors who misappropriate the property of a company or organisation they are entrusted with are liable for a more serious offence under Section 409 of the Penal Code, which carries a higher maximum jail term of 20 years.

The AGC noted that in arriving at the verdict, the Court of Appeal overruled the 1976 High Court decision. “That was the position consistently taken by the courts since 1976, until the High Court which heard the Magistrate’s Appeal for the present case,” it added.

The Court of Appeal has now ruled that company directors, as well as governing board members or key officers of charities and officers of societies, who commit CBT of company property are only liable to be punished under section 406 of the Penal Code (plain CBT) which provides for a maximum sentence of seven years’ imprisonment. “In contrast, employees of a company who commit criminal breach of trust are liable for up to 15 years’ imprisonment,” the AGC pointed out.

After the High Court’s decision last April — which slashed the CHC leaders’ jail terms to between seven months and 3.5 years, down from 21 months to eight years — Mr Shanmugam swiftly underlined what was at stake: There were “serious implications” for other cases, including those involving corruption, against directors.

“We will have to consider, as a matter of policy, what other steps to take because we cannot relax our stand on (corruption),” Mr Shanmugam said. He also made clear that the Government believed the original sentences should have been even heavier.

DEFINITION OF ‘AGENTS’

Summing up the judges’ 152-page written judgment, Judge of Appeal Phang said the shaping of the remedy for the gap, or lacuna, in the law for CBT “should be left to Parliament”, lest the court becomes a “mini-legislature”.

“The courts were ill-suited, and lacked the institutional legitimacy, to undertake the kind of wide-ranging policy review of the various classes of persons who, having regard to modern conditions, deserve more or less punishment for committing CBT,” the judge said.

In the written judgement, the judges said the court “cannot impermissibly add to or take away from statutory language”, or practise “legal gymnastics” by stretching laws unreasonably. They also noted that Section 409 of the Penal Code — which was enacted more than 150 years ago with its language materially unchanged since — is “of considerable vintage”.

Taking into account the historical context of “agents” used in Section 409, Judge of Appeal Phang said the word refers to “a class of persons” in the 19th century that includes “mercantile agents”, or “commission agents” who played a central role in the flourishing entrepot trade of Singapore — then a British colony — right from its founding in 1819.

The “agents” were “an independent, powerful and wealthy professional class” in the 19th century, and should be taken as a “professional agent” – one who professes to offer his agency services to the community and from which he makes his living, for example, Judge of Appeal Phang pointed out.

He warned that where a provision fails to evolve with the times, “the impulse to augment the statutory provision in a manner that will give effect to contemporary models of justice — or simply to do what the court perceives to be justice in the particular case before it — may become urgent and overwhelming”. But the court “cannot give way to this impulse and must remain guided by statutory language and legislative purpose”, he reiterated.

IMPLICATIONS ON PAST CASES

The prosecution, led by Deputy Attorney-General Hri Kumar Nair, had argued that the High Court’s decision in the CHC case “gives rise to a conflict of judicial authority in Singapore”, by upending a long-held principle of having heads of organisations who commit CBT face the harshest penalties available. In the past four decades, there were 16 reported cases of directors convicted under Section 409 of the Penal Code, the prosecution pointed out.

Law academics whom TODAY spoke to said the apex court’s ruling raises questions about whether redress should and can be made to these directors but they stressed that there was no injustice done to them.

“The law was so understood, imperfectly as we now know, these past 40 years,” said Singapore Management University (SMU) law don Eugene Tan.

He said that even if a law has been applied incorrectly, it “does not amount to a miscarriage of justice”, as the cases dealt with should generally be accorded a “status of finality and immutability”, unless there are grounds or reasonable doubts that the convictions are wrong in law. “The Court of Appeal was fully aware of these precedents but it is not bound by them,” Assoc Prof Tan explained.

SMU law lecturer Benjamin Joshua Ong agreed that there was no injustice done to the 16 directors as their convictions were on the basis of the 1976 High Court decision in the Tay Choo Wah case.

“Even though that case has now been shown to have been wrongly decided, it clearly represented the law as it stood at the time those directors were convicted. Therefore, the persons subsequently convicted cannot be said to have been taken by surprise by the law,” Mr Ong said. He pointed out that it “was always open to (those convicted) to attempt to challenge the Tay Choo Wah decision” but it remained unscrutinised until the CHC case — a point that the Court of Appeal judges also made, saying that “limited weight can be given to its longstanding nature”.

Mr Ong said he agreed with the apex court that Section 409 of the Penal Code is in need of “serious overhaul”. “Any reform by the courts by way of interpretation would be piecemeal in nature and potentially lead to even more inconsistency in the law,” he added.