Foo Jong Peng v Phua Kiah Mai

• Jurisdiction: Singapore
• Judgment Date: 08 October 2012
• Date: 08 October 2012
• Docket Number: Civil Appeal No 4 of 2012
• Court: Court of Appeal (Singapore)

Foo Jong Peng and others

Plaintiff

and

Phua Kiah Mai and another

Defendant

[2012] SGCA 55

Andrew Phang Boon Leong JA, V K Rajah JA and Woo Bih Li J

Civil Appeal No 4 of 2012

Court of Appeal

Civil Procedure—Appeals—Appeal against decision holding that removal of office bearers of association was illegal—Whether there was live issue to be decided after term of office of office bearers had lapsed

Contract—Contractual terms—Implied terms—Rules of association did not contain provisions relating to removal of office bearers of association—Relationship between ‘interpretation’ and ‘implication’—Test for implied terms in fact—Whether term conferring power on management committee to remove office bearers should be implied

Unincorporated Associations and Trade Unions—Meetings—Whether member of management committee had power to call management committee meeting in absence of any provision in rules of association

The appellants (‘the Appellants’) were committee members of the management committee (‘the Management Committee’) of the Singapore Hainan Hwee Kuan (‘the Association’). The first appellant (‘the First Appellant’), Foo Jong Peng, was the vice-president of the Association and convened a meeting on 20 October 2011 (‘the Meeting’) to remove the respondents (‘the Respondents’), Phua Kiah Mai and Hun Chin Guan from their offices as president and honorary secretary general of the Association, respectively. Resolutions were passed at the Meeting to remove Phua Kiah Mai and Hun Chin Guan from office. The rules of the Association (‘the Rules’) were silent on the power of the Management Committee to remove office bearers.

The Respondents filed an application with the High Court, seeking declarations, inter alia, that the Management Committee had no power to remove the president and honorary secretary general from their offices and that the Meeting was void and invalid.

The High Court declined to imply a term permitting the Management Committee to remove Management Committee members before the expiry of their fixed two-year term of office. The Appellants appealed against the decision.

Held, dismissing the appeal substantially:

(1) There was a live issue to be decided before the court although a new Management Committee and office bearers had been elected prior to the hearing of the appeal. The cases cited as authorities for the proposition that the Court of Appeal should exercise its inherent jurisdiction to decline to decide an issue which the Appellants retained no interest in, viz, AG v Joo Yee Construction Pte Ltd[1992] 2 SLR (R) 165, Sun Life Assurance Co of Canada v Jervis[1944]AC 111 and Ainsbury v Millington[1987] 1 WLR 379, were all distinguishable as costs were not in issue in those cases and none of the parties had a monetary interest in the outcome. In the present case, the potential costs ramifications meant that the Appellants retained a real interest in the outcome of the dispute: at [22], [23] and [25].

(2) The decision of the Privy Council in Attorney General of Belize v Belize Telecom Ltd[2009] 1 WLR 1988 (‘Belize’), reformulated the test for implied terms as the single question of what the instrument, read as a whole against the relevant background, would reasonably be understood to mean (‘the Belize test’). The fundamental difficulty with the Belize test was that the process of implication was separate and distinct from the general process relating to the interpretation of documents and involved tests that were specific and different from those which operated in relation to the interpretation of documents and the express terms contained therein. While both the general concept of interpretation and implication of terms entailed an objective approach, it would be incorrect to conflate the tests and techniques which accompanied each process: at [29] and [31].

(3) The approach in the Belize test was premised on the general concept of the reasonable person, and inasmuch as this implied an objective approach, this had to be an integral part of the process of the implication of terms. This did not, however, tell us how a particular term ought to be implied. Particular tests of implication were imperative and the ‘business efficacy’ and ‘officious bystander’ tests constituted specific and concrete guidance for the courts. The two tests also embodied the criterion of necessity that was not necessarily present in the broader concept of interpretation. Although the Belize test was helpful in emphasising the importance of the general concept of interpretation and the need for objective evidence, the test should be rejected in so far as it suggested that the traditional ‘business efficacy’ and ‘officious bystander’ tests were not central to the law relating to implied terms in Singapore: at [32], [33] and [36].

(4) Applying the ‘business efficacy’ and ‘officious bystander’ tests, a term conferring a power on the Management Committee to remove office bearers could not be implied. It was not necessary for the effective management of the Association's affairs nor was this power of removal so obvious that the members of the Association would have considered that it would go without saying that the Management Committee itself should be free to remove an office bearer: at [46] and [47].

(5) The Meeting was validly convened by Foo Jong Peng in his capacity as vice-president. There were no procedural limitations in the Rules mandating that Management Committee meetings could only be convened by the president. Any Management Committee member might convene a meeting upon reasonable notice: at [53].

[Observation: There was no clear support for the Belize test in the English case law or the academic literature: at [37] to [43].]

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Companies Act (Cap 50, 1988 Rev Ed) ss 280 (1) , 327 (2)

S Magintharan, B Uthayacharan and James Liew (Essex LLC) for the appellants

Hee Theng Fong and Leong Kai Yuan (RHTLaw Taylor Wessing LLP) for the respondents.

Andrew Phang Boon Leong JA

(delivering the grounds of decision of the court):

1 This was an appeal against a decision of the High Court judge (‘the Judge’) in Phua Kiah Mai v Foo Jong Peng [2012] SGHC 14 (‘the Judgment’) granting declarations, inter alia, that the management committee (‘Management Committee’) of the Singapore Hainan Hwee Kuan (‘the Association’) did not have the power to remove office bearers from their positions on the executive committee (‘Executive Committee’). We dismissed the appeal and now...