A person may be charged with an offence for a criminal breach of trust (“CBT”) if he dishonestly misappropriates, takes, uses or dispose of any property which he has control over. The offence is described under s. 405 to 409 of the Penal Code, Cap. 224.
A CBT is committed if:
- A person who is entrusted with property or has dominion over property; and
- That person dishonestly misappropriates or converts that property to his own use , or dishonestly uses or disposes that property in violation of law or contract; or wilfully suffers another person doing so.
It is a complex offence and encompasses a wide range of possible circumstances. In this article, we will discuss the elements of the offence and recent developments.
Elements of CBT
CBT requires a person to be entrusted with property or have dominion over that property. Examples of such circumstances include being placed in charge of the use of an organisation’s funds, being an issuer or signatory of the company’s cheques, or being responsible for depositing monies into an organisation’s bank account.
The offender must have misappropriated or converted that property to his own use, or used the entrusted property in violation of a direction of law prescribing the mode in which such trust is to be discharged. A recent well-known example is the case involving City Harvest Church where board members were found guilty of misappropriating the church’s building fund for another project which aimed to use popular music for evangelism.
CBT requires the person to act dishonestly, or to wilfully allow another person to act dishonestly. It is not sufficient for the person to be mistaken or negligent. There has to be an “intention of causing wrongful gain to a person, or loss to another person” (Definition of “dishonesty” under s.24 of the Penal Code, Cap. 224).
CBT is not simply using or disposing of property wrongfully – that would only be a breach of trust. The criminal offence arises when there is dishonesty.
Punishment for CBT
The law (s.406 of the Penal Code) prescribes that an offender guilty of CBT under s.405 of the Penal Code shall be sentenced to imprisonment for up to seven (7) years or a fine, or both.
In sentencing, the court may take into consideration the degree of trust placed in the offender, the period during which the offence was committed, the use of the money or property that was taken, the effect on the victim, any impact on public and private confidence, any impact on fellow employees or partners, etc.
More severe punishments are prescribed for criminal breach of trust by a carrier, wharfinger or warehouse-keeper (s.407 of the Penal Code), criminal breach of trust by a servant or agent (s.408 of the Penal Code) and criminal breach of trust by a public servant, banker, merchant, factor, broker, attorney, or agent (s.409 of the Penal Code).
In general, the Court will usually impose an imprisonment term for an offence of CBT.
Examples of CBT
An offence of CBT does not have to involve large sums of money or valuable property. A key element of the charge is being entrusted with or having dominion over property. An offender who thinks that he is committing theft may in fact be committing CBT if he was entrusted with the property – which may be the case in an employer-employee relationship.
In April 2016, sales manager Ng Cheye Yong pocketed over $284,000 from customers instead of depositing the monies into the company’s bank account. Ng tried to cover up his actions by passing off newer payments as previous payments. For his offences, Ng was sentenced to 33 months’ imprisonment.
In February 2018, interior designer Phua Siew Meng was sentenced to fifteen (15) months’ imprisonment for CBT and theft. Between October and December 2013, Phua misappropriated $37,650 from his employer. He was discovered when his employer noticed discrepancies between what had been paid to the company and the actual sums received. After being on the run for two years, Phua was caught again for stealing a handbag.
City Harvest Church
In the aforementioned case involving City Harvest Church, members of the church’s board were found guilty of various degrees of CBT. The church’s board members entered into a series of complex transactions which were found to be sham “investments” devised to take out funds from the church’s building fund for a project to use popular music for evangelism. The transactions amounted to some $11 million, of which about $7.56 million was used for the project and $2.5m was used for personal expenses.
The matter eventually came before the Court of Appeal. The Court of Appeal agreed that the church’s board members were guilty of offences under s.406 of the Penal Code. However, the church’s board members were not guilty of an offence under s.409 of the Penal Code.
The Court of Appeal explained that s.409 applies when the offence was carried out “in the way of his business as… agents”. The Court of Appeal held that “agents” in s.409 of the Penal Code referred to professional agents.
The Court of Appeal’s findings overturned the previous position that directors of companies were also liable for CBT as agents of the company under s.409 of the Penal Code. This meant that a company’s director may only be liable under s.406 of the Penal Code for CBT, despite having more trust and responsibility than a company’s employees, while the company’s clerk, servant, carrier or warehouse keeper may be liable for more serious offences under s.407 or 408 of the Penal Code.
The Court of Appeal noted that this disparity would have to be rectified by Parliament.
Have any questions?
If you have any questions or require legal advice regarding CBT issues, you can get a Quick Consult with Wayne Ong or other lawyers with similar expertise. With Quick Consult, from a transparent, flat fee of $49, a lawyer will call you back within 1-2 days to answer your questions.
This article was written by Wayne Ong from Wayne Ong Law Practice and Chan Kit Ho from the Asian Law Students’ Association.
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.