Criminal Law

AuthorCHAN WING CHEONG MA (Oxon), LLM (Cornell), Barrister (GI), Attorney and Counsellor-at-Law (NY State), Advocate & Solicitor (Singapore), Associate Professor, Faculty of Law, National University of Singapore
Citation(2001) 2 SAL Ann Rev 160
Published date01 December 2001
Date01 December 2001
Corporate liability

10.1 Although the imposition of criminal liability on corporate entities is now well accepted, the basis on which this is done has, surprisingly, not been given much attention. The following case presented one of the few opportunities where this area was considered.

10.2 In Tom-Reck Security Services Pte Ltd v PP[2001] 2 SLR 70, the appellant company appealed against conviction by the trial court of employing a person who had entered Singapore illegally, an offence under s 57(1) of the Immigration Act (Cap 133, 1997 Ed). The person concerned was an Indian national who had entered Singapore by hiding in a lorry and had assumed a Singaporean”s identity. Liability of the corporation in this case was imposed by s 57(2A) of the Immigration Act.

10.3 It was common ground that the person was hired by one Michael Tan, an employee of the appellant company. There was thus an employer- employee relationship between the appellant company and the individual. It was also common ground that the person had entered Singapore in contravention of s 6(1) of the Immigration Act. However, it was held by Yong Pung How CJ on appeal that the additional requirement that the appellant company have actual or constructive knowledge that the person had entered Singapore illegally was not proven. It should be noted that the presumption of knowledge provisions under ss 57(6), 57(7) and 57(8) of the Immigration Act did not apply in this case.

10.4 The Chief Justice followed the English authorities on the principles of corporate liability, namely Tesco Supermarkets Ltd v Nattrass[1972] AC 153, such that the company is only liable if the person with the guilty knowledge or who performed the guilty acts can be regarded as the “embodiment of the company”. In such a case, the company is liable for the acts of the person regardless of whether the acts are within the scope of his authority or not. On the other hand, where the person is not regarded as the embodiment of the company, the company can only be liable if his acts are within the scope of the function of management properly delegated to him.

10.5 On the facts of this case, it was held that Michael Tan could not be said to be the “living embodiment of the company” as he was too low in the chain of command. There was also no ground for imputing his knowledge to any officer in a position of management authority.

10.6 As for the scope of the function of management, it was found that the company had not delegated the responsibility to investigate the immigration status of job applicants to Michael Tan. There was a system put in place to perform this task and if Michael Tan had tried to circumvent the system, he would be acting beyond the scope of his authority. In any case, it was also held by the Chief Justice that Michael Tan did not himself have the mens rea for the offence.

10.7 It can be noted that under this approach to corporate liability, there will be few occasions where the company can be held criminally liable. There will be few company officers who are senior enough in the hierarchy that fit the description of being the “living embodiment of the company” or have important management functions delegated to them. A wider and more realistic approach to how companies actually operate had been proposed in the Privy Council case of Meridian Global Funds Management Asia Ltd v Securities Commission[1995] 2 AC 500, where Lord Hoffman suggested that it is not necessary in all cases to enquire whether the person whose act or knowledge is attributable to the company is indeed the “directing mind and will” of the company. Instead, it is relevant to consider the language of the particular statute, its content and policy.

10.8 Dissatisfaction with this narrow identification approach became extreme in the UK on the high profile failure of prosecutions against the companies involved for manslaughter in the “Herald of Free Enterprise” disaster in 1987 and again in the Great Western Trains collision in 1997. The English Law Commission subsequently came out with a proposal for a new offence of corporate killing (in Law Commission Report No 237) which seeks to adopt a “holistic theory of attribution”, but the reception to this is mixed (see Celia Wells, Corporations and Criminal Responsibility (2nd Ed, 2001)).

10.9 The Tesco Supermarkets Ltd case (supra) is now 30 years old and was decided at a time when corporate organisation was perceived as having a vertical command structure. It may be time for us to review the extent to which the identification theory is appropriate in this day and age. It is said that companies are moving more and more towards “empowering” their front-line employees to make decisions. It will thus not be right to allow companies to escape liability if the actions were known by these employees albeit not by the directors or high level managers.

10.10 The other aspect where Tesco Supermarkets Ltd (supra) may not serve us well is where it may be the organisation or system at fault. In this scenario, the offence may have come about because it is the company”s policies or practices that tacitly authorise non-compliance with the law. The proposal of the English Law Commission mentioned above of a “management failure” and the Australian approach of a “corporate culture … that directed, encouraged, tolerated or led to the non-compliance of the relevant provision” (s 12.3(2) Criminal Code Act 1995 (Cth)) as alternative forms of attributing criminal liability may be worthy of further study.

Common intention

10.11 In the case of PP v Gerardine Andrew[1998] 3 SLR 736, the requirement for physical presence of an accomplice before he can be held liable for the acts of the principal offender under s 34 of the Penal Code (Cap 224, 1985 Ed) seemed unmistakable from the following passage of the judgment by the Court of Appeal (at 751):

“In our view, to hold that an accused can be liable under s 34 despite being absent when the commission of the offence occurred would render much of the abetment provisions in the Penal Code otiose. It cannot have been the intention for s 34 to take over the provisions of Ch V of the Penal Code which provides for the substantive offence of abetment. In our view, therefore, in order for an accused person to be liable under s 34, there must be a requirement that he was physically present when the commission of the offence took place.”

10.12 However, if physical presence were to be strictly required, the possibilities for exploitation of this factor by the defence counsel could be endless. Such an argument was indeed raised in the case of Loo Weng Fatt v PP[2001] 3 SLR 313, which involved deceiving the Head of the Sewerage Department, Ministry of the Environment (“the Ministry”), into making a progress payment which was not due.

10.13 The Ministry had engaged a certain company to replace some sewerage pipes. One Wong Seng Toong (“Wong”), who was the project officer in the Ministry, hatched a plot to cheat the Ministry by getting the company to submit a bogus 20th progress payment claim. He spoke to the appellant, who was a director of the company, and offered to split the excess payment between the two of them. After some hesitation, the appellant agreed.

10.14 The deception came to light when some two years later, the appellant submitted a draft final bill of quantities, evidencing the work done by the company for the entire project, to the Ministry for approval. By this time, Wong had left the Ministry and another officer discovered the discrepancies.

10.15 Wong was subsequently convicted of cheating under s 420 of the Penal Code and the appellant was also convicted under the same provision, read with s 34 of the Penal Code.

10.16 It was argued at the appeal that the appellant was not liable as he was not present when Wong submitted the bogus progress claim. The Chief Justice explained that Gerardine Andrew”s case (supra) did not require that the accomplice be present at each and every stage of the offence in order to be liable under s 34 of the Penal Code. A distinction was made between offences which comprise of a “single act” and “subsidiary acts” (at 321—322):

“Where the ‘criminal act’ [referred to in s 34] is a single act, eg when a death blow is dealt to the victim, the position is relatively simple: the murderer”s accomplices must at least have been present when the blow was dealt before they can be said to have participated in the act.

However, the word ‘act’ is defined by s 33 of the Penal Code as including ‘a series of acts’. A good example of such an instance may be provided by the following example. Both X and Y come up with a scheme to cheat the victim, Z. X prepares a forged document and hands it to Y, and Y in turn presents this document to Z so as to cheat Z. The ‘criminal act’ comprises two subsidiary acts: the preparation of the document by X (during which Y may be absent) and the presentation of the document by Y to Z (during which X may be absent). Both subsidiary acts are instrumental in the deception of Z. …

[I]n a case where the ‘criminal act’ consists of a series of subsidiary acts which have been performed by several accomplices, the very fact that an accomplice has contributed to the ‘criminal act’ by performing one of the subsidiary acts that constitutes the ‘criminal act’ must surely constitute sufficient participation. This accomplice need not be present when the other subsidiary acts are being performed by the other accomplices. To demand that presence is necessary even in such a case would only serve to create a lot of unnecessary confusion.”

10.17 In the present case, the Chief Justice held that the “criminal act” was the deception of Yeo Seow Eng into approving the progress payment, this being the offence under s 420 of the Penal Code. The “criminal act” was completed when Yeo Seow Eng was deceived and the payment transferred to the company”s account. The acts of the...

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