Sim Yong Teng and another v Singapore Swimming Club

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 17 February 2016
• Neutral Citation: [2016] SGCA 10
• Plaintiff Counsel: Ragbir Singh s/o Ram Singh Bajwa (Bajwa & Co)
• Date: 17 February 2016
• Docket Number: Civil Appeal No 88 of 2015
• Hearing Date: 02 November 2015
• Subject Matter: Natural Justice,Disciplinary Tribunals,Administrative Law
• Year: 2016
• Citation: [2016] SGCA 10
• Defendant Counsel: Chang Man Phing, Ng Shu Ping and Lim Wan Yu Cheronne (WongPartnership LLP)
• Court: Court of Appeal (Singapore)
• Published date: 25 February 2016

Chan Sek Keong SJ (delivering the grounds of decision of the court):

The appellants are husband and wife, and have been members of the Singapore Swimming Club (“the Club”), the respondent, since 1974 or 1975. The husband, Sim Yong Teng (“Sim”), was convicted on 12 October 2012 of several offences under the Securities and Futures Act (Cap 289, 2006 Rev Ed) (“the SFA”) including the offence of insider trading under s 218(2) of the SFA.

They appealed against the decision of the High Court Judge (“the Judge”) in Originating Summons No 144 of 2014 (“OS 144/2014”) in dismissing their application to set aside the decision of six members of the management committee of the Club for 2013/2014 made on 8 October 2013 (‘the 8/10/2013 Decision”) which suspended their membership of the Club pursuant to rule 15(d) of the Rules of the Singapore Swimming Club (“the Club Rules”).

At the conclusion of the hearing of the appeal on 2 November 2015, we allowed the appeal on the ground that the Judge erred in law in affirming the 8/10/2013 Decision. We now give our reasons for allowing the appeal.

Background

The 8/10/2013 Decision was made pursuant to rule 15(d)(i) of the Club Rules which provided as follows:

RULE 15 CESSATION OF MEMBERSHIP

…

(d) In the event that a member:- (i) Has been convicted in a court of law of competent jurisdiction of any offence which involves an element of dishonesty or moral turpitude; and which in the opinion of the Management Committee would if such member were permitted to remain as a member place the Club in disrepute or embarrass the Club in any way; (ii) Flees the country to escape criminal proceedings; or (iii) Has become an enemy alien

then the membership of such member shall be suspended from the date of the occurrence of such event and the member shall forfeit all rights and claims upon the Club, its property, and funds.

Notwithstanding the foregoing, the member shall have a grace period of 6 months to transfer his membership to a third party pursuant to Rule 7. In the event that the member fails to transfer his membership within the 6 months grace period, his membership shall cease on the expiry of the said period and he shall not be entitled to transfer his membership nor will he have any membership rights.

[emphasis added]

The 3 April 2013 Decision

In a letter dated 19 October 2012,¹ one Gary Oon (“Oon”), a member of the Club, notified the Club of Sim’s conviction for insider trading and alleged that the offence involved an element of “moral turpitude” under rule 15(d)(i) of the Club Rules. Acting on this complaint, the then management committee of the Club (“MC 2012/2013”) called on Sim to explain why his insider trading conviction did not warrant a suspension of his membership with the Club under rule 15(d)(i). Sim’s response was that the offence of insider trading, being a strict liability offence, did not involve moral turpitude, and further that the offence had been committed by him inadvertently without any intention to make an unlawful gain.

MC 2012/2013 initially had a full complement of 11 elected and two co-opted members as permitted by the Club Rules. However, when it convened a meeting on 26 December 2012 to consider the complaint against Sim, two of the elected members had already resigned. Hence, only the remaining nine elected and two co-opted members attended that meeting.

Between 26 December 2012 and 27 March 2013, another three elected members of MC 2012/2013 resigned, leaving six elected members and two co-opted members on MC 2012/2013. Prior to the 27 March 2013 meeting, MC 2012/2013 obtained from the Club’s solicitors a legal opinion stating that the offence of insider trading involved an element of moral turpitude. On 27 March 2013, seven (five elected and two co-opted) of the remaining nine members met to discuss the matter. The president of MC 2012/2013, Chua Hoe Sing (“Chua”), invited the members present to consider Oon’s complaint and Sim’s defence, and also the legal opinion of the Club’s solicitors, in preparation for the hearing scheduled for 3 April 2013.²

At the 3 April 2013 hearing, MC 2012/2013 consisted of six members (four elected and two co-opted), including Chua. We will hereafter refer to the six-member committee as “MC1”. After hearing Sim’s representations, MC1 unanimously decided that Sim’s conviction for insider trader involved moral turpitude, and therefore, fell within rule 15(d)(i) of the Club Rules. MC1 ordered that Sim’s membership and that of his wife be suspended as their memberships came under the category of “family membership” under the Club Rules which required the wife’s membership be suspended automatically upon the suspension of the husband’s membership.³

The appellants’ application in OS 572/2013

Dissatisfied with MC1’s decision of 3 April 2013 (“the 3/4/2013 Decision”), Sim and his wife commenced court proceedings in Originating Summons No 572 of 2013 (“OS 572/2013”) on 28 June 2013 to set aside the 3/4/2013 Decision on the ground that it was null and void for, inter alia, a lack of quorum as required under rule 21(c) of the Club Rules. Rule 21(c) provided as follows:

A quorum for a meeting of the Management Committee shall not be less than one half of the total members in the Management Committee.

MC1 was constituted with only four out of the nine elected members who heard Sim on 26 December 2012.

OS 572/2013 was also heard by the Judge and he reserved judgment. Before he delivered his judgment for OS 572/2013, a new management committee of the Club (“MC 2013/2014”) was constituted comprising namely: (1) Chua Hoe Sing, (2) William Lum, (3) Jonathan Wang, (4) David Chung, (5) Philip Chua, (6) Michael Ho, (7) Gope Ramchand, (8) Samuel Chong, (9) Joyce Chan, (10) Gerad Loo, (11) Krishnan Kashyap and (12) Gary Oon. Five members (listed Nos 1–5 above) were also members of MC1. Out of the twelve members, two were co-opted into MC 2013/2014 whereas the other ten were elected.

After MC 2013/2014 was constituted, Chua approached some members for their views on the 3/4/2013 Decision. Eight members of MC 2013/2014 (listed No 4–11) gave their views in letters signed by them dated 25 July 2013 (“25/7/2013 Letters”). All of them signed identical letters, except that paragraph 1 of Krishnan Kashyap’s letter was slightly different, indicating a common source with a common objective. Each statement read:⁴ 1. I am a member of the current Management Committee (MC). I was elected into office at the AGM held on 19 May 2013. 2. I am aware that Mike Sim has alleged that a decision taken by the MC on 3 April 2013 to suspend his membership pursuant to Rule 15(d)(i) is improper as the MC comprised less than 6 elected members at that time. 3. I have since reviewed the relevant documents in Mike Sim’s case, including: a. the documents submitted by Mike Sim and his lawyers pertaining to his conviction of insider trading and other offences under the Companies Act and Security and Futures Act; b. Mike Sim’s explanation; c. the confidential minutes of the MC meetings on 26 December 2012, 26 March 2013 and 3 April 2013; and d. the legal opinion from the Club’s lawyers. 4. Having considered the matter, I agree with the MC’s decision that his conviction for insider trading does involve an element of moral turpitude, and that the Club will be placed in disrepute or embarrassment should he remain as a member. As such, I agree with the MC’s decision to suspend Mike Sim’s membership pursuant to Rule 15(d)(i).

Krishnan Kashyap’s letter also contained an additional paragraph 3 which stated: 3. I had had attended the MC meeting on meeting on 26 December 2012 and 27 March 2013. As such I had heard Mike Sim’s explanation in person at the MC meeting of 26 December 2012.”

After obtaining these letters, Chua filed an affidavit dated 26 July 2013 in OS 572/2013 which annexed the 25/7/2013 Letters as exhibits. At para 30 of his affidavit, Chua stated:

In any event, I have asked the newly elected [MC 2013/2014] members as to what their decision would be having now reviewed the relevant documents in [Sim’s] case. Each of the newly elected [MC 2013/2014] members has confirmed that, having reviewed the records, he/she agrees with the [3/4/2013 Decision]. I have also asked Mr Krishan Kashyap, who has been part of the [MC 2012/2013] from May 2012 to date, but had not been present at the 3 April 2013 meeting, as to what his decision would be having reviewed the relevant documents, and also heard Sim in person at the [MC 2012/2013] meeting of 26 December 2012. He has also agreed with the [3/4/2013 Decision]. Copies of [the 25/7/2013 Letters] are annexed hereto and marked as “CHS-4”. [emphasis added]

Chua’s initiative was of no avail. The Judge delivered judgment on 1 April 2015 in OS 572/2013 and declared the 3/4/2013 Decision null and void and set it aside on the ground that there had been a breach of natural justice.

The 8 October 2013 Decision

After judgment in OS 572/2013 was delivered, MC 2013/2014 held a meeting on 12 September 2013 and decided to rehear the complaint against Sim. MC 2013/2014 also decided that those who were current members and who were also members of MC1 would not be part of the quorum of MC2.⁵ Oon was also to be excluded since he was the complainant in the matter. This decision left six elected members eligible to sit as MC2, and they were as follows: (1) Michael Ho; (2) Gope Ramchand; (3) Samuel Chong; (4) Joyce Chan; (5) Gerad Loo; and (6) Krishnan Kashyap. It was also agreed that Krishnan Kashyap would be a member of MC2 as although he was involved in the prior proceedings, he was not part of MC1 which was directly involved in the 3/4/2013 Decision. All six members of MC2 had signed the 25/7/2013 Letters submitted to the court in OS 572/2013.

By a letter dated 17 September 2013, MC 2013/2014 informed Sim...