Criminal Breach of Trust (CBT) in Singapore – Explained


6 February 2018

Eugene Thuraisingam explains how the law deals with different scenarios involving criminal breach of trust, and how legislation can be strengthened, in the wake of the City Harvest Church sentencing

Q1: How are offenders charged with criminal breach of trust under Sections 406 and 409 of the Penal Code dealt with by the Courts?

A1: The crux of the whole crime here is converting somebody else’s money for your own use. As you are entrusted with that money, one of the key factors for sentencing is the degree of trust deposed on you. If you’re an ordinary person, for example, and a friend just asks you to hold some money for him, you’re in a very different situation from someone who runs a charity, or someone who runs a company, or where your position is a lot more serious. There is a lot more trust, which members of the public place in you, as opposed to just one other person entrusting you. This is why, the higher the position you hold, the more degree of trust is reposed on you, the higher your sentence will be when the trust is breached.

Q2: Why did the ruling in the City Harvest Church’s (“CHC”) case expose a gap in the law?

A2: For many years, the definition of an agent in section 409 of the Penal Code was wide enough to encapsulate company directors. It was widely held and understood that the company director was an agent of the company, and therefore came under this definition. But this judgment has shown that a revised analysis of agent may be required to distinguish between a mere legal relationship of agency and being an agent in the course of business.

Q3: Were the sentences meted out to the CHC leaders too low? Any possibility of further appeal or is this a sentencing final?

A3: We need to look at it this way:

First, the amount of money involved is a lot – SGD 50 million. The gut instinct is to say that look, they got sentences of between three to seven years, and that is way too low, where SGD 50 million is involved.

However, what one must objectively look at is what went through the minds of the offenders when they did the act complained of. The court has held, based on the evidence, that they genuinely thought that they were doing something in furtherance of the objective of the church. They did not, at least according to the evidence, enrich themselves. It was because of these findings of their motivations that they got a much lower sentence as compared to someone who maliciously misappropriates SGD 50 million to his own pockets for personal benefit. That is something that needs to be considered in totality.

This case is final. There is a principle of finality in the Singapore courts. It has reached the highest level. This is a question of law, or public interest which was posed before a court of five judges and they have decided and the legal process ends.

Q4: The Home Affairs and Law Minister K Shanmugam has said in a Ministerial Statement on Criminal Reference on CHC Matter, that there’s a lacuna in the law. Why did this gap not come up in earlier cases?

A4: There is a case decided in the 1976, in Tay Choo Wah v Public Prosecutor [1974–1976] SLR(R) 725 (which has since been overruled by Public Prosecutor v Lam Leng Hung and Others [2018] SGCA 7], where the Court, based on arguments before it, made a finding that the term agent in Section 409 of the Penal Code would include a company director. Since then, lawyers, accused persons, and prosecutors, have not taken issue with that decision. In the CHC case this issue arose as CHC’s lawyers asked for the section to be reinterpreted. The lawyers for Kong Hee and the other accused persons put forward strong legal arguments as to why the Court in 1976 had got it wrong. The correct interpretation should be that, agents do not include directors of companies. The court of appeal this time hearing the current arguments, were persuaded that Kong Hee’s lawyers were correct and that the law had been wrongly interpreted in 1976.

[Also read: Public Prosecutor v Lam Leng Hung and Others [2018] SGCA 7 – Implications for Accused Persons Previously Convicted of an Offence under Section 409 of the Penal Code]

Q5: Is there a different interpretation of the law, or do we need to change the law altogether?

A5: There is a difference in the manner in which the judges in 1976 interpreted the section, and the manner in which this current court of appeal has interpreted the section. Arising out of the difference in interpretation, they would definitely need an amendment to the law. It just does not make sense that a director of a company can only be charged with simple criminal breach of trust with the lower penalty, as opposed to a mere employee who faces a much stiffer sentence if he commits criminal breach of trust.

Q6: Should the law hold those in power to greater equal responsibility to ordinary employees in cases of criminal breach of trust? Should, from time to time, the lawmakers review archaic laws or laws that allow certain groups of criminals to get away with a lower sentence? Thoughts on the public outcry to the CHC case.

A6: First, the law has to be reviewed from time to time first to make sure that the sections are not archaic and are applicable in today’s day and age.

Second, as time evolves, society’s values evolve as well. The law has to keep pace with that evolvement.

As for the public outcry in this case, there needs to be a better understanding of what happened in this case. In this case, unfortunately, the law section 409 was not updated. Judges or rather lawyers took a view that the section 409 had in the past, or was wide enough to catch a director. But apparently that’s not so. Quite apart from the law itself, there needs to be a better understanding that there is a difference in the case where someone steals SGD 50 million to line his own pockets, and where, like in the CHC case, it’s a question of a technical breach, in that they had used the money for another project wrongfully. It was not a situation where someone had taken the SGD 50 million, and put it in his own pocket. Therefore, that is something that needs to be considered when we think about the sentence imposed.

Q7: Could or should the law have been updated earlier?

A7: There are many sections in the Penal Code, as well in so many other legislation pieces of legislation; it is sometimes difficult to keep appraised of these sections and it is only when a case like this comes up that the law gets tested.

Q8: What are some of the high-profile CBT cases in the last 40 years?

A8: Some of the high-profile ones would include:

Teo Cheng Kiat. He was an employee of Singapore Airlines Ltd. He had kept staff claims for himself over a period of 13 years. He had actually pocketed a total sum of SGD 34,955,064.55. He was sentenced to 24 years imprisonment.

Another notorious case was that of Chia Teck Leng. He worked for Asia Pacific Breweries (Singapore) Pte Ltd. He managed to cheat banks into handing him SGD 117.1 million which he gambled away. He was sentenced to 42 years imprisonment.

In more recent times, there was this case of Yang Yin. Yang Yin was a Chinese national who had befriended an elderly lady in Singapore. He had taken her into his confidence she placed a lot of trust in him and he ended up cheating her of at least 1.1 million dollars that we know of and were able to prove, and he was imprisoned to a term of nine years a high sentence for 1.1 million but because she was such a vulnerable victim who had placed such a lot of trust in him so i think in that case uh the the sentence definitely did reflect the egregious factors present

[Also read: Revoking a Lasting Power of Attorney Involving Assets Worth $40 Million]

Q9: Would the public trust and the propensity to give to charity increase, if the public knew that key office holders of charities are subject to harsher penalties when they breach that trust?

A9: That is very important and that’s why the section is called criminal breach of trust. As an office holder especially, someone who collects money from the public for a particular charitable purpose, there is a lot of trust and a lot people expect a lot from you as a key office holder to safeguard that money and ensure that that money is applied to a proper purpose. Where you breach that trust, where you choose to enrich yourself in blatant disregard of the people who have entrusted you with their money, the price that you have to pay should be very high.

Q10: What related amendments to the law are possible?

A10: What would have to be amended in this case would be section 409 itself; to actually spell out who are these people who are going to be subject to section 409 in greater detail. Instead of limiting it to agents and public servants, bankers, merchants, it would be quite easy to amend it to specify someone, a key office holder in a charity, or a director of a company to make specific to list out specific office holders who will now be subject to this section; rather than the current situation where you interpret whether you are an agent in the cause of business or not.

Q11: What would these amendments mean for company directors and leaders of charities?

A11: What it would mean is that if they commit criminal breach of trust, they would rightfully face a much longer period of imprisonment than a normal person or a normal employee because the degree of trust is different.

LAWYERS WITH A HEART

make an appointment