Koh Sin Chong Freddie v Singapore Swimming Club

• Jurisdiction: Singapore
• Judge: Lee Kim Shin JC
• Judgment Date: 31 December 2014
• Neutral Citation: [2014] SGHC 276
• Year: 2014
• Date: 31 December 2014
• Published date: 29 April 2016
• Hearing Date: 30 May 2014,12 December 2014,24 April 2014,21 July 2014,17 April 2014,23 April 2014,30 June 2014,15 April 2014,29 April 2014,25 April 2014,04 August 2014,22 April 2014
• Plaintiff Counsel: Paul Seah and Kenneth Tay (Tan Kok Quan Partnership)
• Citation: [2014] SGHC 276
• Defendant Counsel: Tan Chee Meng SC, Chang Man Phing and Yin Juon Qiang (WongPartnership LLP)
• Court: High Court (Singapore)
• Docket Number: Suit No 634 of 2012

Lee Kim Shin JC: Introduction

The Singapore Swimming Club (“the Club”) represents itself as “The Premier Family Club” in Singapore. The objects of the Club are to promote and provide facilities for, amongst other activities, swimming. In recent years however, the Club has found itself swimming in a sea of litigation. Excluding the present proceedings, all proceedings connected with the subject matter of the present proceedings and all proceedings commenced in the State Courts, the Club has been named a party to seven unrelated sets of proceedings in the High Court brought by members of the Club since 2008.

There must be something in the water.

In the present proceedings, Freddie Koh (“the Plaintiff”) claims that he is entitled to be indemnified by the defendant, the Club, for all damages and litigation costs incurred by him in a defamation suit commenced against him in 2009. The Plaintiff’s claim is based on a resolution passed in 2009 by the management committee of the Club, of which the Plaintiff was then the President. I will refer to the management committee of the Club as “the MC”.

The Club denies that the Plaintiff is entitled to the indemnity which he claims on various grounds. The Club also counterclaims for the recovery of the sums that it had previously paid out pursuant to the aforesaid MC resolution. Its counterclaim is based on another set of resolutions passed at a member’s extraordinary general meeting held in 2012.

Values, intentions and sentiments, however long established or firmly held, are aspects of human nature that may change over time. To the extent these aspects are expressed as policies or principles approved as resolutions of a legal entity, it follows that resolutions of such nature may be amended, revoked or completely reversed to reflect a change in thinking. This present dispute involves a change in an established policy of the Club and the legal consequences that follow.

I delivered oral judgment on 12 December 2014. These are my detailed grounds.

Background Key players

I first set out a list of the key persons involved in the present dispute.

The Plaintiff’s tenure as President of the Club lasted from May 2008 to March 2012. During this time, the composition of the MC changed. Two periods are significant.

The first is the period between May 2008 and May 2009 when the MC comprised the following 12 persons (“the 2008 MC”): the Plaintiff as President; Michael Ngu as Vice-President; Tan Wee Tin as Honorary Treasurer; and various other committee members, namely, Eric Ng, Loreen Teo, William Kwok, Ng Kok Seong, Ashok Sharma, Shahul Hassan, Mike Chia, Theresa Kay and Gary Oon.

The second is the period between May 2011 and March 2012 when the MC comprised the following 11 persons (“the 2011 MC”): the Plaintiff as President; David Poh as Vice-President; Tan Wee Tin as Honorary Treasurer; and various other committee members, namely, Eric Ng, Loreen Teo, William Kwok, Ng Kok Seong, Soh Kee Hock, Lim Khee Lim, Jane Loh and Andy Tang.

The other key persons in the dispute are: Chua Hoe Sing, the Club’s current President; Khoo Boo Beng (“BB Khoo”), a former general manager of the Club; and Jennifer Wee, the Club’s financial controller from 31 January 2008 to the present.

In the present proceedings, the Plaintiff was represented by Mr Paul Seah (“Mr Seah”). Mr Tan Chee Meng SC (“Mr Tan”) represented the Club.

The constitutional document of the Club which sets out, inter alia, the powers of the MC, is known as the Rules of the Club, and will hereafter be referred to as “the Club’s Rules”.

The defamation suit

The present proceedings have their origins in Suit 33 of 2009 (“Suit 33”). This was a defamation action commenced in the High Court against the Plaintiff by four members of the MC that preceded the 2008 MC (respectively “the Suit 33 Plaintiffs” and “the 2007 MC”). The alleged defamation arose from two statements made by the Plaintiff at separate MC meetings, which were subsequently published on the Club’s notice board in October and November 2008.

The thrust of these statements concerned the 2007 MC’s decision to purchase a new water system for the Club’s swimming pools. In making the purchase, the 2007 MC had relied on a provision in the Club’s Finance Operating Manual (“the FOM”), which allowed the MC to approve unbudgeted expenditure on the basis of it being an “emergency” before having the expenditure ratified at the next Annual General Meeting (“AGM”) of the Club.

The 2008 MC was elected at the Club’s AGM on 25 May 2008 (“the 2008 AGM”). When the expenditure for the water system was put forward for ratification at the 2008 AGM, a motion was instead carried for a Special Ad-Hoc Audit Committee (“the Audit Committee”) to be formed to investigate the said expenditure. The Audit Committee later submitted its report to the 2008 MC. The Audit Committee found that the expenditure was of an emergency nature and that the 2007 MC had not breached any Club procedures.

Subsequently, the Honorary Treasurer of the 2008 MC, Tan Wee Tin, found several documents which were not disclosed to the Audit Committee. These documents contained information which was inconsistent with representations made by the 2007 MC at the 2008 AGM. After further investigations, Tan Wee Tin reported his findings at two MC meetings on 29 October and 26 November 2008.

At the MC meeting on 29 October 2008, the Plaintiff made the first statement suggesting that the 2008 MC should correct a “misrepresentation of the facts made by the [2007 MC] to influence the ratification of the expenditure at the [2008 AGM]”. At the subsequent MC meeting on 26 November 2008, the Plaintiff made the second statement which consisted of several allegations including that, “[i]t could be a case of misrepresentation of facts to the [2008 AGM] to get ratification for a capital expenditure for a water system that could not be justified under the urgent/emergency reason”.

Both the first and second statements were recorded in the minutes of the respective MC meetings which were then published on the Club’s notice board, in accordance with Club practice.

On 22 December 2008, the Suit 33 Plaintiffs, through their solicitors, WongPartnership LLP (“WongPartnership”), sent a letter of demand to the Plaintiff. The letter of demand alleged that the statements made by the Plaintiff were defamatory of the Suit 33 Plaintiffs. It was further alleged that the Plaintiff had falsely and maliciously defamed the Suit 33 Plaintiffs. It was demanded that the Plaintiff, amongst other things, apologise and undertake not to repeat the defamatory statements and compensate the Suit 33 Plaintiffs for the damage to their reputation.

Events preceding the 14 January 2009 MC meeting

On 23 December 2008, BB Khoo, acting on Eric Ng’s instructions, emailed the Club’s insurance brokers, Acclaim Insurance Brokers Pte Ltd (“Acclaim”), to enquire whether the Plaintiff’s case would be covered by the Club’s existing Directors & Officers Liability Insurance Policy (“the insurance policy”) that had just been renewed in October 2008. Eric Ng was then the Rules and Membership Chairman of the 2008 MC. On 26 December 2008, Acclaim replied to state that the insurer had not determined the policy liability.

On 29 December 2009, Acclaim sent another email to BB Khoo to highlight that the Plaintiff’s case might fall within the “Insured v Insured” exclusion clause under the insurance policy (“the Insured v Insured Exclusion”). The effect of the Insured v Insured Exclusion was that the insurance policy would not cover a case where both the party suing and the party being sued fell within the definition of an “insured” person under the policy. Acclaim noted in its email that the definition of “insured” covered all past, present and future MC members, and therefore, the Plaintiff and the Suit 33 Plaintiffs would both fall under that definition.

BB Khoo forwarded Acclaim’s email to Eric Ng and the Plaintiff on 30 December 2008. On the same day, Eric Ng replied to BB Khoo stating as follows:

We would let the members know that in this instance the Club would not be covered by its insurance policy because this is an action taken against the present MC by the previous one. It is fully understandable that the policy would exclude such actions. Regardless of the insurance cover the Club would still have to defend its MC.

It is good to let the members know who is wasting their money.

On 12 January 2009, Suit 33 was filed against the Plaintiff. The Suit 33 Plaintiffs’ principal claim was that the Plaintiff had falsely and maliciously made the statements which were defamatory of them. In his defence, the Plaintiff denied that the meaning of the statements were defamatory. Even if they were, the Plaintiff averred that they were justified.

On 13 January 2009, the insurer wrote to Acclaim to state its position that the Plaintiff’s case fell within the Insured v Insured Exclusion. On the same day, Acclaim forwarded a copy of the insurer’s letter to BB Khoo and the Plaintiff via email.

In the midst of these events, the Plaintiff, Eric Ng and another 2008 MC member, William Kwok, met with Mr Hri Kumar Nair SC of Drew & Napier LLP (“D&N”) regarding the Plaintiff’s representation in Suit 33. The Plaintiff, Eric Ng and William Kwok agreed that Mr Nair should be engaged to act for the Plaintiff. Pertinently, however, D&N required the Club to confirm that it would indemnify the Plaintiff for his legal costs in Suit 33 before D&N would agree to act for him.

The passing of the Indemnity Resolution

An MC meeting was held on 14 January 2009 (“the 14 January 2009 MC Meeting”). During this meeting, the 2008 MC first discussed the issue of the Club’s insurance coverage under its renewed policy. Suit 33 was discussed next. The latter discussion was concerned, in particular, with the issue of whether the...