Sim Yong Teng and another v Singapore Swimming Club [2016] SGCA 10

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:

The 3 April 2013 Decision

In a letter dated 19 October 2012, 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.

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.

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:

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:

Krishnan Kashyap’s letter also contained an additional paragraph 3 which stated:

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:

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. 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 of its decision to rehear the complaint against him on 30 September 2013. Sim was requested to bring with him such materials that he might wish to rely on in answer to the complaint. Due to Sim’s unavailability on 30 September 2013, the hearing was postponed to 8 October 2013.

On 8 October 2013, Sim attended the hearing and submitted a written statement for MC2’s consideration which stated, inter alia, as follows:

The rest of the statement stated that Sim had been a useful member of the Club, that he had a clean track record with the Club, and that Oon’s complaint against him was discriminatory in nature because no complaint had been made against other members (whom he named in the statement) who had been convicted of far more serious offences. A substantial part of the statement reiterated the case he had made to MC1. The statement concluded that if it was still the Club’s stand that his membership of the Club should be suspended, he requested the Club to treat his statement as a formal complaint against those members he had named for the purpose of rule 15(d) of the Club Rules.

At the conclusion of the rehearing, MC2 deliberated for about an hour, and decided: (a) unanimously that the offence of insider trading involved moral turpitude; and (b) by a 5-1 majority (Krishnan Kashyap dissenting) to suspend Sim’s “family membership” (which included his wife’s membership) pursuant to rule 15(d) of the Club Rules. In the circumstances, Sim was given six months to transfer his “family membership” to a third party.

Dissatisfied with MC2’s decision, Sim and his wife commenced court proceedings on 20 February 2014 in OS 144/2014 for a declaration that the 8/10/2013 Decision was made in breach of the rules of natural justice, in that MC2 had prejudged the complaint against Sim as evidenced by their 25/7/2013 Letters.

As summarised by the Judge (at [29]–[31] of the judgment below, reported as Sim Yong Teng and another v Singapore Swimming Club [2015] 3 SLR 541 (the “Judgment”)), the appellants advanced three arguments before him:

(a) that moral turpitude involved “conduct that shocks the public conscious [sic] as being inherently base, vile, or depraved, contrary to the rules of morality and the duties owed between man and man, either one’s fellow man or society in general”; that the insider trading offence for which he was convicted was a strict liability offence and that his mitigation showed that his offence was due to a genuine oversight, absent any evil intent, and not for dishonest financial gain; that accordingly his conviction involved no moral turpitude;

(b) that the members of MC2 should have disqualified themselves from hearing the complaint against him as they had prejudged the complaint against him by their 25/7/2013 Letters, and that in any case, the 8/10/2013 Decision was made in breach of the rules of natural justice since all six members of MC2 had prejudged the complaint against him; and

(c) that, in any case, the membership of Sim’s wife was separate and distinct from Sim’s membership, that his wife was an ordinary member in her own right, and that the suspension of his wife’s membership was in breach of the Club Rules.

The Club advanced the following arguments before the Judge (Judgment at [33]–[37]):

(a) that whether or not the offence of insider trading involved moral turpitude was an issue for MC2 to decide, and the court should not disturb it unless it was made in breach of the rules of natural justice or in bad faith;

(b) in any event, that the offence of insider trading involved moral turpitude as it referred to conduct falling below the required standards of integrity, probity and trustworthiness; that moral turpitude was present in relation to Sim’s conviction as he had abused his fiduciary position in the relevant company by misusing confidential price-sensitive information;

(c) that MC2 did not breach the rules of natural justice as MC2 was specifically constituted to exclude members of MC1 who might have been placed in a position of conflict of interest; that MC2 reheard the case with an open mind, and that MC2 did not collude with MC1;

(d) that the quorum for MC2 for the 8 October 2013 hearing was constituted out of necessity; without those six members, no quorum could be formed as there were no other available members—for that reason, MC2 was not disqualified from hearing the complainant against Sim; and

(e) that the suspension of Sim’s “family membership” was in accordance with the Club Rules.

The issues before the Judge

The Judge formulated the following issues for decision, ie, whether:

(a) the members of MC2 should have disqualified themselves because of the 25 July Letters;

(b) the principle of necessity was applicable to the facts of the case;

(c) the 8/10/2013 Decision was made bona fide and in observance of the rules of natural justice;

(d) the court should disturb MC2’s finding that Sim’s insider trading conviction involved moral turpitude;

(e) the court should disturb MC2’s opinion that permitting Sim to remain as a member would place the Club in disrepute and embarrass the Club; and

(f) the suspension of Sim’s membership would affect his wife’s membership of the Club.

Before deciding these issues, the Judge discussed the principles of natural justice applicable to social clubs by reference to Kay Swee Pin v Singapore Island Country Club [2008] 2 SLR(R) 802 (“Kay Swee Pin”) and other cases.

The Judge pointed out that in the present case, unlike in the cases of Kay Swee Pin and Khong Kin Hoong Lawrence v Singapore Polo Club [2014] 3 SLR 241 (“Lawrence Khong”), MC2 was not sitting as a disciplinary committee under rule 13 of the Club Rules. The facts involving Sim’s conviction for insider trading had already been ascertained and the only questions were: (1) whether the conviction carried an element of moral turpitude; and (2) whether, in the opinion of MC2, Sim’s continued membership of the Club would place the Club in disrepute or embarrass it. In his view, these were inferences to be drawn from known or decided facts rather than findings of disputed facts per se.

The Judge also observed that when the management committee made a positive determination of these two required elements under rule 15(d)(i), it had no discretion but to suspend the membership of the offending member under rule 15(d)(i) and to grant a grace period of six months for that member to transfer the membership to some other person. The Judge held that the six months’ grace period to sell the membership would not “result in a severe reduction in the economic value of the membership” (Judgment at [47]). At the most, Sim would suffer a loss of the social value that came with the membership of the Club. Therefore, while the rules of natural justice were applicable to a determination made under Rule 15(d)(i), they were not to be applied with the same rigour as they were in Kay Swee Pin and Lawrence Khong.

Based on these general principles, the Judge proceeded to consider the issues listed above (at [22]).

Issues (1) and (2) – Whether the six members of MC2 were disqualified from hearing the complaint against Sim, and whether the principle of necessity applied in the circumstances

The Judge considered first the principle of necessity. He referred to the statement of the law (cited in Lawrence Khong at [42]–[43]) as follows:

The Judge noted that the principle of necessity was held to be inapplicable in Lawrence Khong for various fact-specific reasons (Judgment at [50]); see also [83] below). He also noted that in Chiam See Tong v Singapore Democratic Party [1993] 3 SLR(R) 774 (“Chiam See Tong”), Warren L H Khoo J applied the principle of necessity to enable the central executive committee (“CEC”) of the Singapore Democratic Party (“SDP”) to sit as a disciplinary committee despite the plaintiff’s allegations of bias against nine members of the CEC. Chiam See Tong is further discussed below (at [76]–[80]).

Following the decisions in Chiam See Tong and Lawrence Kong, the Judge held that the principle of necessity was applicable to social bodies such as the Club, and that the principle was not restricted to tribunals exercising statutory functions (although the threshold to invoke it was high). In the Judgment (at [53]–[56]), the Judge held:

Issue (3) – Whether the 8/10/2013 Decision was made without bona fides and in breach of the rules of natural justice

With respect to this issue, the Judge found as follows (Judgment at [58]–[59]):

(a) Sim merely asserted (on the basis of the 25/7/2013 Letters) that there was prejudgment on the part of MC2 “without clearly detailing any specific facts” on how: (a) the 8/10/2013 Decision was not made bona fide and had involved prejudgment; or (b) MC2 had been overly dictated by their prior views as articulated in the 25/7/2013 Letters more than two months before the 8/10/2013 Decision, such that MC2 had not considered afresh or with an open mind, all the relevant materials and submissions presented by Sim.

(b) MC2, on the other hand, alluded to the following facts to show that MC2 had acted fairly and that apparent bias had not been made out on the totality of the facts:

(i) Members who were or might be potentially in a position of conflict of interest were excluded.

(ii) The hearing was rescheduled to give Sim a full opportunity to be heard.

(iii) MC2 heard Sim’s explanation for an hour and engaged him on the issues in question.

(iv) MC2 took into account the new documents tendered by Sim.

(v) MC2 deliberated for half an hour before making its decision.

(vi) MC2 did not consider itself bound by the 25/7/2013 Letters. In fact, one member changed his mind, and voted against the finding that Sim’s conviction would bring disrepute to the Club if Sim were allowed to remain as a member.

On the basis of these findings, the Judge concluded that there was insufficient evidence to show that the six members of MC2 had “in fact “closed their mind” during the hearing” or that they were “in fact separately biased towards [Sim and his wife] in some way” (Judgment at [64]), and that “[i]n fact, much of the evidence placed before [him] appears to indicate the contrary” (Judgment at [65]).

The Judge also dismissed Sim’s allegation that MC 2013/2014 had colluded with MC 2012/2013 in the submission of the 25/7/2013 Letters to the Judge for consideration in order to support MC1’s decision to suspend Sim and his wife as family members of the Club. The fact that the members of MC2 had expressed support for the 3/4/2013 Decision was insufficient proof of a serious allegation of collusion.

The test for apparent bias

The Judge next discussed the test for apparent bias as applied by our courts in Re Shankar Alan s/o Anant Kulkarni [2007] 1 SLR(R) 85 (“Shankar”), Lawrence Khong, Tang Kin Hwa v Traditional Chinese Medicine Practitioners Board [2005] 4 SLR(R) 604 (“Tang Kin Hwa”), Tang Liang Hong v Lee Kuan Yew [1997] 3 SLR(R) 576, Lim Mey Lee Susan v Singapore Medical Council [2011] 4 SLR 156 and De Souza Lionel Jerome v Attorney-General [1992] 3 SLR(R) 552. He also considered the decisions of courts in other jurisdictions in Regina (on the application of PD) v West Midlands and North West Mental Health Review Tribunal [2004] EWCA Civ 311, Regina v Bow Street Metropolitan Stipendiary Magistrate and others, ex parte Pinochet Ugarte (No 2) [2000] 1 AC 119 (“Pinochet (No 2)”), Gillies v Secretary of State for Work and Pensions [2006] 1 WLR 781 and Locabail (UK) Ltd v Bayfield Properties and another [2000] QB 451 (“Locabail”).

After referring to these decisions, the Judge held that the applicable test was that, without referring to Porter v Magill [2002] 2 AC 357 (“Porter v Magill”), set out in that decision. (Judgment at [71]):

Applying this test, the Judge held that (Judgment at [71]–[72]):

After expressing these reservations, the Judge nonetheless found (Judgment at [73]):

The Judge made an additional finding (Judgment at [74]) that the matters set out at above (at [30(b)]) showed that the members of MC2 had heard Sim’s submissions and considered the evidence with an open mind.

Issue (4) – Should the Court disturb MC2’s opinion that Sim’s insider trading conviction involved an element of moral turpitude

On this issue, the Judge stated that since a court was slow to disturb the findings of a disciplinary tribunal as it did not sit on appeal from the decision of that tribunal (citing Kay Swee Pin at [2], and Chan Cheng Wah Bernard and others v Koh Sin Chong Freddie and another appeal [2012] 1 SLR 506), there was no basis for him to disturb MC2’s finding that Sim’s insider trading conviction involved moral turpitude.

Issue (5) – Should the Court disturb MC2’s opinion that Sim’s continued membership would bring disrepute to and embarrass the Club

On this issue, the Judge held that MC2 was in a much better position than the court to determine whether the standing and reputation of the Club would have been adversely affected if Sim were permitted to continue as a member of the Club. Given that there was no evidence of bias or a lack of bona fides on the part of MC2, the Judge upheld the finding of MC2.

Issue (6) – The “family membership” issue

The Judge held that, on the proper construction of the relevant Club Rules, ie, rules 4 (interpretation), 5(f)(i) and 7(f), MC2 was entitled to suspend Sim’s “family membership”, which included that of his wife, on the basis of Sim’s conviction for insider trading.

The Parties’ submissions on appeal

The appellants’ submissions

The appellants’ submissions, as set out in the Appellants’ Case, were as follows:

(a) As regards Issues (1), (2) and (3):

(i) The six members of MC2 should have disqualified themselves from hearing the complaint against Sim on 8 October 2013 as they had prejudged the matter by writing the 25/7/2013 Letters.

(ii) Any objective person, if informed of these circumstances, would reasonably conclude that the MC2 members had made up their minds conclusively and were in total agreement with MC1’s decision. The rules of natural justice require not only justice to be done but seen to be done. The rules do not allow a person who has already considered the matter and pronounced his judgment to say that he will rid his mind of the prejudgment and start with an open mind. The Judge’s holding that there was no apparent prejudgment or apparent bias was wrong in law and in fact.

(iii) There was collusion between the MC1 and MC2 members to show a united front to the court and that the lack of a quorum in MC1 was inconsequential.

(iv) The Judge was wrong in holding that because a rule 15(d) proceeding was not a disciplinary proceeding, the rules of natural justice were not to be applied with the same rigour to such proceedings.

(v) The principle of necessity was not applicable to excuse the MC2 members from disqualification for bias. The purpose of the principle is to prevent a failure of justice (see Gillard J in Metropolitan Fire and Emergency Services Board v John William Churchill [1998] VSC 51 at [154]–[160]). Here, there would be a failure of justice because MC2 had prejudged the complaint against Sim by their voluntary collateral act of signing the 25/7/2013 Letters.

(vi) The principle of necessity would not apply if actual bias is shown: Anwar Siraj v Tang I Fang [1981-1982] SLR(R) 391 (“Anwar Siraj”).

(vii) The complaint against Sim could have been referred to the general body of members of the Club for a decision in view of the prejudgment on the part of MC2. The general body could do all such acts as MC2 could have done since MC2 derived its powers from the general body.

(viii) The Judge was also wrong in finding that there was no breach of natural justice on the facts of the case.

(b) As regards Issue (4):

(i) There was no element of moral turpitude attached to Sim’s conviction for insider trading as he had committed the offence by mistake. The offence of insider trading under s 218 (read with s 220(1)) of the SFA, on which Sim was charged and convicted, is a strict liability offence as it is not necessary for the prosecution to prove any intention to use the inside information.

(c) As regards Issue (6):

(i) The Judge was wrong in suspending Sim’s wife’s membership. Rule 15(d) targets an offending member, which she was not. As an ordinary member she was entitled to enjoy all the privileges as such member until the family membership was transferred under the Club Rules.

The Club’s Submissions

The Club’s submissions essentially supported the Judge’s decision and reiterated all the reasons given by the Judge for dismissing the Appellants’ application in OS 144/2014. The Club also argued that Sim, by voluntarily appearing before MC2, had waived any objections to MC2 hearing the complaint against him.

Our decision

At the conclusion of the hearing of the appeal, we allowed the appeal. We were of the view that the Judge should have disqualified all six members of MC2 from hearing the complaint against Sim on the ground that they had prejudged the complaint against Sim, and that the principle of necessity had no application in the circumstances of the case. We reserved our views on whether, as a matter of law, the principle of necessity is applicable to private associations, such as the Club. We also rejected the Club’s submission that Sim, by attending the hearing, had waived his objection to MC2 hearing the complaint.

We set out below the reasons for our findings on these matters, starting with the issue of prejudgment.

Prejudgment

Actual and apparent bias

The rules of natural justice include the rule against bias. In Yong Vui Kong v Attorney-General [2011] 2 SLR 1189, it was held (at [90]):

In Locabail, the Court of Appeal of England said (at [3]):

In the present case, the appellants argued their case on the ground of predetermination or prejudgment (the term we use in these grounds of decision) in the form of the 25/7/2013 Letters, without explicitly distinguishing whether it amounted to actual or apparent bias. However, the tenor their submissions showed that they had proceeded on the basis of apparent bias. Consequently, the Judge’s decision was based on apparent bias. Accordingly, our analysis is based on the allegation of apparent bias.

In Webb and Hay v The Queen (1994) 181 CLR 41, Deane J stated (at 74) that:

In the present case, the appellants’ case was based on the conduct of the members of MC2 in writing and agreeing to have the 25/7/2013 Letters in support of the decision of MC1 submitted to the Judge for consideration in OS 572/2013.

Prejudgment as actual bias

The rule against prejudgment prohibits the reaching of a final, conclusive decision before being made aware of all relevant evidence and arguments which the parties wish to put before the arbiter (per Jacob LJ in Lanes Group Plc v Galliford Try Infrastructure Limited T/A Galliford Try Rail [2012] Bus LR 1184 (“Lanes”) at [56]). While the rule may in some way overlap with the audi alteram partem principle (as a result of a failure to give parties an actual opportunity to be heard), the primary objection against prejudgment is “the surrender by a decision-making body of its judgment” (per Sedley J (as he then was) in Regina v Secretary of State for the Environment, ex parte Kirkstall Valley Campaign Ltd [1996] 3 All ER 304 at 317) such that it approaches the matter with a closed mind (per Pill, Rix and Longmore LJJ in Regina (Lewis) v Redcar and Cleveland Borough Council [2009] 1 WLR 83 (“RCBC”) at [10], [89] and [107] respectively).

Apparent bias and predetermination

The Judge cited a passage from Christopher F Forsyth, Wade & Forsyth: Administrative Law (Oxford University Press, 11th Ed, 2014) (“Wade & Forsyth”) (at p 394) which explains the distinction between prejudgment amounting to actual bias or apparent bias:

In our view, the present case was a rare case where the distinction between apparent bias and prejudgment was significant, and indeed, crucial. Here, the members of MC2 had decided the complaint against Sim, albeit on an informal basis before they were empanelled by MC 2013/2014 to decide the same complaint against Sim on a formal basis.

Prejudgment and predisposition

Prejudgment is different from predisposition. In National Assembly for Wales v Condron and another [2006] EWCA Civ 1573, Richards LJ observed (at [43]):

In the present case, the Judge found that the the 25/7/2013 Letters showed the predisposition of the writers rather than their prejudgment in relation to the fresh complaint against Sim (see [55] below). We were unable to agree with this finding (see [61] below)

Prejudgment and provisional judgment

Further, prejudgment, which takes the form of a premature conclusive determination, is also different from a provisional decision. By definition, one is not final and subject to change, while the other is final. Thus, in Porter v Magill, the House of Lords held an auditor’s decision to be valid despite his issuance of a press statement announcing his provisional findings during the course of his investigations. In Lanes, the English Court of Appeal held that an adjudicator’s provisional decision, disclosed for the assistance of the parties, did not constitute prejudgment. In Project v Hutt (6 April 2006) (unreported) (at [22]) (and endorsed in Amjad and others v Steadman-Byrne [2007] 1 WLR 2484 at [13]–[14]), the Appeal Tribunal said:

Whether the 25/7/2013 Letters were provisional judgments

The Judge found as a fact that the opinion of the six MC2 members set out in the 25/7/2013 Letters did not constitute prejudgment on their part, and were no more than provisional views which might have led them to have a predisposition towards suspending the Appellants’ membership under rule 15(d)(i) of the Club Rules. In the Judge’s view, the 25/7/2013 Letters were not, in themselves, sufficient evidence that the six MC2 members had closed their minds to matter, as demonstrated by their various actions in giving Sim a full hearing and accommodating him on all his procedural needs and requests at the hearing.

On the basis that the members of MC2 were not disqualified from hearing the complaint against Sim on the application of the principle of necessity, the Judge held (Judgment at [64]–[65]):

The Judge’s approach in deciding the contested issues of prejudgment, apparent bias and the principle of necessity

It can be readily seen from these passages that the Judge adopted the following decision-making process in dealing with the issues of prejudgment, apparent bias and necessity:

(a) First, he held that the 25/7/2013 Letters did not amount to prejudgment of the complaint against Sim amounting to either actual bias or apparent bias, but merely constituted provisional views of the writers which led them to predisposition towards suspending Sim and his wife as members of the Club. Hence, the members of MC2 who wrote the letters had not closed their minds to the issue and prejudged it.

(b) Secondly, he was prepared to accept that the 25/7/2013 Letters could evidence “some form of bias” and that the said letters might in fact show that the 8/10/2013 Decision “was tainted with apparent bias or predetermination or both” (Judgment at [56], [65] and [72]);

(c) Thirdly, on that assumption (Judgment at [65]), MC2 was not disqualified from hearing the complaint against Sim, as otherwise there would have been no other body qualified to hear the complaint, and that such a result would be detrimental to the interest of the Club in maintaining its reputation (Judgment at [56]).

(d) Fourthly, therefore, there was no alternative but to qualify MC2 to hear the complaint against Sim.

(e) Fifthly, the actual hearing showed that MC2 gave Sim a full hearing which was conducted fairly and impartially.

The Judge adopted a “cover all bases” approach to deal with the issues raised in the case. In our view, while this approach might not necessarily be unfair to the appellants, it had the advantage of enabling the Judge’s findings at each stage of the process to reinforce the other, thus validating the process. For example, the finding that MC2 made the 8/10/2013 Decision with an open mind served to validate the initial finding that the 25/7/2013 Letters merely expressed the provisional views of its members. However, if the said letters amounted to apparent bias or prejudgment, which the Judge was only prepared to assume, but not find as a fact, the issues of whether the members of MC2 were disqualified from hearing the complaint and the applicability of the principle of necessity would become crucial. If the members of MC2 were disqualified for bias, and the principle of necessity was not applicable to private associations, or in the circumstances of the case, the final and fifth stage of the process would, and could, not have taken place. There would be no finding of fact at the final stage to reinforce the finding of fact at the first stage.

Were the views expressed in the 25 July 2013 Letters provisional?

The Judge held that the six members of MC2 had not closed their minds as the 25/7/2013 Letters by themselves were insufficient evidence of the closing of their minds. He referred (Judgment at [75]) to the fact that, at the hearing itself, the “chairman Michael Ho specifically informed the first plaintiff that they had come to the hearing with an open mind and were giving him an opportunity to state his case…[and] that the [MC2] members had read all the documentation pertaining to the case.” He also referred to the fact that one member had disagreed with the majority’s decision. That, in sum, was the Judge’s reasoning for holding that MC2 heard the complaint against Sim with an open mind. The mutually reinforcing chain of reasoning is apparent from these findings.

We disagreed with the Judge’s approach and also his reasoning. Granted that the dissenting member’s vote might be interpreted as evidence of an open mind, it did not follow that the other five members had not closed their minds. Arguably, this argument cut both ways. It could be argued, for instance, and logically, that for that reason the other five members had closed their minds! It could be said that this was the exception that proved the rule. If the members of MC2 had been disqualified from hearing the complaint in the first place, there would be no factual finding that could provide an ex post facto justification for the initial finding that the conclusion expressed collectively in the 15/7/2013 Letters were provisional, subject to their giving a final conclusion.

We could not agree with the Judge that the 25/7/2013 Letters were intended to express provisional views. Firstly, the writers were not asked to give their provisional views but their considered views on whether they agreed with the decision of MC1. Secondly, there was no occasion for them to give their concluded or final views on the matter. In our view, 25/7/2013 Letters were intended to inform the Judge that they, as incoming members of MC 2103/2014 shared the views of MC1 that Sim was not fit to remain a member of the Club. What the said letters meant to convey to the Judge was that if they had been members of MC1, they would have made the same decision made by MC1 in order to protect the reputation of the Club. We had no doubt that by the said letters, the members of MC2 had prejudged the complaint against Sim. The Judge accepted as a positive factor in favour of MC2 that its chairman had informed Sim that they had come to the hearing with an open mind and were giving him an opportunity to state his case. In our view, the Judge should have been more sceptical of assurances or declarations of this nature. In Locabail, the English Court of Appeal said at pp 477–478:

See also Porter v Magill, where Lord Hope said at [104] that a court should place no weight on statements by decision-makers that they are not biased.

The members of MC2 were not selected because the chairman of MC 2013/2014 believed that they had emptied or intended to empty their minds of the views expressed in the 25/7/2013 Letters. They were selected because the other members were all disqualified from hearing the complaint, and the chairman thought that they were not so disqualified. In any case, whatever the state of their minds was, the 25/7/2013 Letters most certainly raised in the mind of a fair and well informed observer a reasonable suspicion or apprehension of bias.

In this connection, it is necessary to note that all the MC1 members who were involved in the 3/4/2012 Decision had disqualified themselves from rehearing the complaint against Sim as members of MC2 on the ground that they had already decided the complaint against Sim. But so did the six members of MC2. They were in exactly in the same position. In truth, it was arguable that their position was even worse. While those MC1 members had heard Sim in person before finding against him, MC2 had condemned Sim without hearing him. A considered decision is still a decision, even if expressed in a private or informal setting. Bias or prejudice expressed or shown in private is just as unacceptable as when shown in public. The character does not change. When the six MC2 members were selected to rehear the complaint against Sim, they should have asked themselves whether their own positions were any different from those of the members of MC1. If they had, as fair minded persons, they would have concluded that their positions were the same, or even worse.

Accordingly, we were of the view that the 25/7/2013 Letters were sufficient to constitute prejudgment of the complaint against Sim, and that any reasonable, fair minded and fully informed observer looking at the circumstances of the case on 12 September 2013 would have formed the view that there was prejudgment by the members of MC2 amounting to apparent bias.

The principle of necessity

The principle of necessity in administrative law

The principle of necessity applies to enable a decision-maker, whether an individual or a tribunal, who is subject to disqualification on account of bias, to decide a complaint or dispute where: (a) no other person or tribunal competent to decide the matter is available; or (b) a quorum cannot be formed without his participation: see Harry K Woolf et al, De Smith’s Judicial Review (Sweet & Maxwell, 7th Ed, 2013) (“De Smith’s”) at para 10-065. The principle was applied by the courts to statutory tribunals to ensure that they were not disabled from performing their statutory functions. The rule is an implicit expression of the principle that the rules of natural justice may be excluded explicitly by statute.

In Singapore, the High Court has applied the necessity principle outside this domain in several cases to enable disciplinary or management committees of social clubs and other private associations to impose sanctions on their members for breach of the rules of the clubs or associations. In the present case, the Judge also applied the principle on an assumptive basis to enable it to consider the merits of the substantive hearing of the complaint before MC2. The question thus arose as to whether the necessity principle should be extended to apply to private associations to enable them to exercise their functions.

The principle of necessity in Australia, Canada and England

In Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 (“Laws”), Mason CJ and Brennan J, in a joint judgment, said (at [39]):

In a separate judgment, Deane J said (at [12]–[13]):

Similarly, in Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island [1998] 1 SCR 3 (“Remuneration of Judges of PEI”) (at [6]), the Supreme Court of Canada explained that the principle of necessity “finds its source in the rule of law” and serves to prevent a “failure of justice”. The court said (at [7]) that the principle “should be applied rarely, and with great circumspection” as it causes injustice. That case involved institutional bias, as distinct from personal bias, as the judges of various provincial courts had to decide on matters concerning the manner by and the extent to which provincial governments and legislatures could reduce the salaries of provincial court judges. Thus, no matter who the judges were, they would be in a position of conflict, as they would have had to decide an issue in which they had a pecuniary interest. This case can be compared with Dimes v The Proprietors of the Grand Junction Canal and others (1852) 3 HLC 758 (“Dimes”) where the Lord Chancellor had a conflict of interest as a result of personal circumstances, although in that case, the Lord Chancellor was only required to do a formal act, rather than to render a substantive decision.

In England (see De Smith’s at para 10-067), the position is that the doctrine has been sparingly employed, and if possible the decision-making body should remove that part of it which is infected. In Deane J’s words, “[i]t applies only to the extent necessity justifies” (Laws at [12]). The principle of necessity in effect requires one to choose, as between two evils, the lesser evil. Rather than suffer no justice being done at all by denying both parties from being heard, it permits a limited risk of injustice to one. Consequently, there must be, and there are, limitations to the applicability of the principle of necessity.

The principle of necessity in Singapore

The High Court has held that the principle of necessity is applicable in the following cases: Anwar Siraj, Chiam See Tong, Lawrence Khong, and now, in the instant case. These decisions are discussed below.

(1) Anwar Siraj

In Anwar Siraj, the plaintiff was required to show cause as to why an action should not be taken against him for breaching his “Terms and Conditions of Service” (“the Regulations”) with Jurong Town Corporation (“JTC”). The defendant, who was the chairman of JTC, was the adjudicator as provided by reg 119(4) of the Regulations. He was also the accuser in three out of the five charges against the plaintiff. The plaintiff objected to the defendant adjudicating the matter as the defendant would be a judge in his own cause.

JTC relied on the principle of necessity, and referred to Geoffrey A Flick, Natural Justice: Principles and Applications (Butterworths, 1979) (“Flick on Natural Justice”) at pp 138–139, where the author stated that the rule :

The plaintiff responded that that the principle of necessity had limitations, and relied on Flick on Natural Justice at pp 140–141:

A P Rajah J held that as s 5(5) of the then Jurong Town Corporation Act (Cap 209, 1970 Rev Ed) provided that the deputy chairman or one of the members thereof could act in matters concerning JTC whenever the chairman was either absent or unable to do so (and in that case the chairman, the defendant, was “unable to do so” by reason of bias), the principle of necessity was not applicable as the deputy chairman could have been appointed to hear the charges against the plaintiff.

(2) Chiam See Tong

In Chiam See Tong, the plaintiff (“Chiam”) sued the defendant political party, SDP, which he was secretary-general of before he resigned, for wrongful expulsion and for consequential reliefs. Chiam was expelled for breach of party discipline for breaking his oath not to “do or say anything which may be detrimental to the SDP or undermine the standing of the leadership of the party within or without the party.” Chiam had criticised the conduct of certain leaders of the SDP at a talk given to the Singapore Press Club following his resignation. The CEC of the SDP decided to charge him for breaking his oath.

He appeared before the CEC to answer the charges against him. He objected to five of the CEC members hearing the complaints against him on the ground of bias as they were the very persons he had criticised in public. He also objected to another four members who were employees of town councils whose chairmen were two of the CEC members he had criticised, and therefore would not be able to vote freely or independently. The chairman overruled his objections without giving any reasons. The CEC proceeded with the hearing, and, after hearing Chiam’s explanations, decided to expel Chiam from the SDP.

Chiam contended in court that the disciplinary proceedings against him were conducted in breach of the rules of natural justice for the reason he had given to the CEC. He also alleged that the CEC failed to act in good faith in the best interest of the party and that the CEC’s actions were actuated by indirect and improper motives unconnected with his conduct, or that the CEC had acted maliciously in order to injure him. He also admitted that he would not have objected to the remaining four members of the CEC hearing the charges against him. Khoo J dealt with the issue of bias and necessity at [57]–[61] of his judgment as follows:

It seems clear to us, reading this judgment today, that since the five CEC members comprising the leadership of SDP (the other four impugned members were not leaders) were judges in their own cause, their participation in the proceedings against Chiam was in breach of a fundamental principle of the rules of natural justice. Applying the principle of necessity to enable them to participate in the matter would not have changed the inevitable outcome. It would result in a failure of justice that the principle is designed to prevent. Justice could not be done, and was not seen to be done. Hence, the principle of necessity could be a source of injustice in such situations. Applying it created a conundrum. How can the principle of necessity prevent a failure of justice without creating it in the very process of applying it to the case? Khoo J provided the solution by giving judgment to Chiam, on the factual finding that justice had not been done to Chiam as he had not been given a fair hearing. This outcome may be contrasted with the outcome in the present case, thus demonstrating the potential inconsistency and unsatisfactory consequence of applying the necessity principle to clubs and private associations.

In Chiam See Tong, there were two other possible solutions to the problem. Another judge hearing the case might have avoided the problem by interpreting the disciplinary rules as allowing only unbiased CEC members to hear the charges against Chiam (see Laws at [91] below). There was nothing in the constitution of the SDC that provided expressly that a disciplinary charge against a member must be heard by all the members of the CEC. A second solution, which would have been neater, would be for Khoo J to hold that, as a matter of law, the principle of necessity should be restricted only to bodies exercising statutory functions (which was the origin of the principle) and was not applicable to non-statutory, private committees. If there was no quorum because biased members of the CEC could not sit, it would be too bad for the SDP. The court should have allowed fairness to Chiam to prevail over the need for certain members of the CEC to be judges in their own cause. If the court had held that Chiam could not be charged and heard before a biased CEC, it would surely have prompted the SDP to constitute an impartial panel of the CEC to hear the complaints against Chiam without breaching the rules of natural justice, if the stakes were high enough for the good of the SDP as a political party. This could have been done, for example, by amending the constitution of the SDP to enable disciplinary issues to be resolved without breaching the rules of natural justice. As a matter of fact, when Chiam was crossed examined in court, he conceded that he would have been prepared to appear before the four CEC members against whom he had made no allegations of bias. The court discounted this on the ground that before the hearing before the CEC, Chiam had applied for the whole of the CEC to be disqualified. This showed that if the CEC had taken the trouble to question Chiam on this, a qualified CEC could have been constituted to hear the complaints against him.

(3) Lawrence Khong

In Lawrence Khong, the plaintiff (“Khong”) was a member of the defendant social club (“the SPC”) whose membership had been suspended for two months by a disciplinary tribunal comprising five committee members. The disciplinary tribunal found that Khong had acted in a manner prejudicial to the interests of the SPC by disseminating a statement that questioned the propriety of the committee members’ decision to amend the results of a motion of no confidence against them. The disseminated statement had in effect criticised the conduct of all of the members of the disciplinary tribunal.

The SPC invoked the principle of necessity, and referred to two Malaysian decisions, viz, Fadzil bin Mohamed Noor v Universiti Teknologi Malaysia [1981] 2 MLJ 196 and Datuk T P Murugasu v Wong Hung Nung [1988] 1 MLJ 291 for the proposition that disciplinary powers were vested solely in the disciplinary committees and that the principle of necessity applied to allow such individuals to still adjudicate over disciplinary matters despite a finding of apparent bias if nobody else could make up the disciplinary committee under the constitution. In this connection, the SPC argued that rule 23(a) of its Rules stipulated that any disciplinary hearing should be conducted by way of a committee meeting, and that rule 34(b) provided that “[f]ive Committee Members, three of whom shall be Charter Polo Playing Members, shall form a quorum”. It was the SPC’s case that only two 2013 Committee members who were not from the 2012 Committee could have participated in the disciplinary proceedings. Given its inability to form a quorum, it would then be impossible to hold a disciplinary committee meeting pursuant to rule 23(a). For this reason, it was argued that the rule against apparent bias should not operate to disqualify the 2013 Committee members who were needed to form a quorum. Otherwise, Khong could not be subject to disciplinary proceedings and this would be unjust to the SPC.

Tan Siong Thye JC (as he then was) accepted the SPC’s argument that the principle of necessity applied to the SPC, but rejected the argument that it was applicable in the circumstances of the case. He gave the following reasons:

(a) First, the two “untainted” members were unaccountably absent from the committee meeting. The 2013 Committee could have rescheduled the disciplinary meeting to a date when the two “untainted” members could constitute part of the minimum quorum of five members to hear the complaint against Khong. Having a quorum of five members, with two of them “untainted” was better than having a quorum of five “tainted members” as justice must, as far as possible, be seen to be done—“so long as their presence would have enhanced the perception of justice being done, their presence was required” (Lawrence Khong at [47]).

(b) Secondly, under rule 31(1)(h), the 2013 Committee had the power to co-opt a maximum of two committee members to make up the quorum with the other two “untainted” members. This was not done or considered. This was an even better alternative as a majority of the five-member quorum would then have been neutral.

(c) Thirdly, rule 33 allowed the 2013 Committee to delegate its disciplinary powers to sub-committees in the Minute of Appointment or in the Byelaws.

Does the principle of necessity apply to non-statutory bodies?

In the three decisions discussed above, and also in the instant case, the courts were not asked and did not consider whether, as a matter of law, the principle of necessity was applicable to the private entities, as contrasted to public statutory bodies. In the instant case, the Judge was aware of this distinction between bodies exercising statutory and non-statutory functions. However, he held that there was no reason why the principle should be confined only to bodies exercising statutory functions (Judgment at [52]). He gave no reason for this finding, other than that the courts in Anwar Siraj and Chiam See Tong, and also the two Malaysian cases had held that the principle of necessity was applicable to non-statutory bodies.

Save in India where the Supreme Court in Amar Nath Chowdhury v Braithwaite and Company Ltd and others, AIR 2002 SC 678 applied the principle to a private company in disciplinary proceedings against a shareholder (although the principle was found not applicable on the facts), we are not aware of any other commonwealth jurisdiction that has applied the principle of necessity to bodies exercising of non-statutory functions. In our view, this is so for good reasons. The purpose of the principle is to enable statutory tribunals and judicial bodies to hear matters in which they may have a personal or institutional interest, as not do so would frustrate the operation of the statutory provision with consequent public or private detriment and undermine public confidence in the administration of justice (see Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337 at [65], per Gleeson CJ and McHugh, Gummow and Hayne JJ). As for administrative bodies, the principle of necessity preserves the public confidence in the performance of statutory functions. In this regard, Mason CJ and Brennan J made the following observation in their joint speech in Laws (at [39]):

In Clenae Pty Ltd and others v Australia & New Zealand Banking Group Ltd [1999] VSCA 35, a case which concerned the necessity of having a judge hear a particular matter, Callaway JA stated (at [92]) that when one considers the principle of necessity, “[i]t invites the question ‘Necessary for what purpose?’”. In the case of statutory bodies, it would be to discharge functions vested in it by written law. In the case of private entities, the situation is entirely different. If the purpose is for, as is the case of private entities, the advancement or the protection of their private interests, then in a conflict between such interest and the interest of justice, the latter should prevail over the former. The principles of natural justice should not be subordinated to interests involving the private gain or loss in terms of reputation or social values of non-statutory, private bodies. There is no failure of justice to cure or any implication on the rule of law (which constitutes the source of the principle (see [69] above)), and consequently no reason to subject the defendant to prejudice, actual or potential.

The logic of not applying the principle of necessity to non-statutory bodies is sound. To apply it in such circumstances would be to prefer an intolerable risk of failure of justice. Far from avoiding a failure of justice, there will be a complete failure of justice; and the raison d’être for the application of the principle will then be lost. In short, the rules of natural justice must prevail over contractual rights when exercised unjustly or seen to be exercised unjustly.

In Laws, Gaudron and McHugh JJ held (at [9]):

The above observations were made in a minority opinion in a case of apparent involving the performance of a statutory function. We would go further to say that in a case where prejudgment amounts to actual bias, ie, where the mind is closed at the hearing, the principle of necessity should not be applicable, since to apply it in such circumstances would merely give lip service to the principle as it would result in the decision-maker making a manifestly unjust decision. Such a hearing would be an empty procedural formality.

In any case, as we can see from the local cases that private associations may always change their rules if necessary without having to breach the rules of natural justice in any disciplinary proceedings against any of their members. In contrast, statutory rules, if applicable, are intended to be applied even in situations where apparent bias may be present. The principle of necessity is born out of the necessity to give effect to the statutory scheme, and not to frustrate it.

Statutory tribunals, and even the judiciary as an institution, can suffer from institutional bias (see The Judges v Attorney-General for Saskatchewan (1937) 53 TLR 464; Beauregard v Canada [1986] 2 SCR; and Remuneration of Judges of PEI), or the personal bias of the statutorily appointed adjudicator, but private associations do not suffer the same constraints. They can amend their constitutions or rules and can also use alternative means, such as to appoint other members, to remove the appearance of bias. As stated in De Smith’s (at para 10-067) in relation to statutory tribunals:

In contrast, reconstituting the panel in a private body is always feasible by changing the applicable rules.

In administrative cases, Laws involved a case where the conduct of members of a statutory tribunal was alleged to have given rise to a reasonable suspicion of prejudgment. The Australian High Court found that out of the ten tribunal members, only three were inflicted with bias. Consequently, it was held that only the other seven members were permitted to hear the matter, and that the other three members could not. In the Privy Council decision of Jeff and others v New Zealand Dairy Production and Marketing Board and others [1967] 1 AC 551 (“Jeff”), it was held that a marketing board was required to make a zoning order allotting milk produced by a district to a dairy company by way of necessity despite the fact that the board had given that very same dairy company a significant loan (and thereby having a pecuniary interest in its business). This was because the power to make zoning orders and the power to make loans were both statutory powers conferred upon the board by statute and in this regard, the Board observed (at 566):

The decisions in Remuneration of Judges of PEI and Jeff make it clear the principle of necessity is only applicable to cases where it is legally impossible to have anyone other than the appointed authority as the adjudicator, and thus necessity applies. In any other case, that authority must do everything in its capacity to remove the bias (Laws).

In our view, the strongest justification for holding that the principle of necessity is not applicable to private entities is that it is contrary to the rule of law if the principle would enable them to adopt disciplinary and other control rules that exempt them from having to observe the rules of natural justice. The principle of necessity would then become a source of injustice, rather than a bulwark against injustice. The law should not allow contractual rights to prevail over the principles of natural justice by resorting to the principle of necessity.

MC 2013/2014 failed to remove bias

In the present case, the Judge held (Judgment at [54]–[55]):

We could not agree with this finding. In our view, MC 2013/2014 failed to do everything that was practically possible to remove the bias associated with the 25/7/2013 Letters or to the extent necessary for this purpose to be achieved. There was one easy and simple thing that MC 2013/2014 could have done to achieve this purpose. If the members of MC 2013/2014 were so troubled by Sim’s continued membership of the Club tarnishing the reputation of the Club, all or a sufficient number of them could have sacrificed their management positions by resigning under rule 21(d)(ix)(2) of the Club Rules so that new untainted members could be co-opted or elected to fill the vacancies under rule 21(a)(iv). Such a gesture would have resulted in some delay in restarting the hearing of the complaint against Sim, but again, if the reputation of the Club was at stake, the delay would have been justifiable. As it is, the failure of MC 2013/2014 to do everything possible to remove “the infected part” had already resulted in several years of delay.

In our view, the Judge should have declined to invoke the principle of necessity in the circumstances of this case. He should have disqualified all the six members of MC2 on the ground of prejudgment amounting to actual bias or apparent bias. The decision-making process adopted by the Club was not, in our view, desirable and should have been avoided. The reason why courts disqualify a decision-maker from deciding a matter by reason of apparent bias is that notwithstanding his assurances that he has an open mind, no one can read his mind, and that bias is very often unconscious.

Given our findings at [95], we do not propose to examine all the reasons given by the Judge in upholding the 8/10/2013 Decision of MC2 (by a majority of 5 to 1) on the ground that much of the evidence placed before him showed the decision was not reached in breach of natural justice. However, it is desirable that we give our views on two matters on which we hold a different view:

(a) The first is the Judge’s finding that the rules of natural justice should not be applied with the same rigour as applied by this court in Kay Swee Pin because Sim had a grace period of six months to sell his “family membership” and that therefore it would not result in a severe reduction in the economic value of the membership (as a result of Sim being hamstrung to sell). With respect, we were unable to see the economic logic of this conclusion. There was no evidence to show what the market price of the Club’s membership was at the material time. Further, it seemed to us that Sim’s “family membership” was being put under a forced sale by the 8/10/2013 Decision. It is common knowledge that a forced sale of property reduces its value. Here, it was even worse than a forced sale. Under r 15(d) of the Club Rules, if Sim failed to transfer his family membership within six months, their membership rights would have been extinguished under the Club Rules.

(b) The second is the exculpatory explanation that when the MC2 members wrote the 25/7/2013 Letters, they did not anticipate or expect that they would have had to decide the same issue. In our view, this explanation was not defensible. They must have been aware of the objective of the letters. Sim had argued that the 3/4/2013 Decision was made without a quorum, and the Judge had reserved judgment. A decision against the Club for lack of a quorum would have raised the prospect of their having to rehear the complaint against Sim. Indeed, we found it surprising that the said members agreed (or were advised) to write the letters when the issue of whether there was a quorum was sub judice, and that they ran the risk of committing contempt of court for attempting to influence his deliberations or interfere with the judicial process.

In summary, our decision was as follows:

(a) The 25/7/2013 Letters were evidence of actual prejudgment and the members of MC2 were disqualified from hearing the complaint against Sim.

(b) The principle of necessity is not applicable to social clubs and other private associations, like the Club.

(c) Even on the assumption that the principle of necessity was applicable to the Club, MC 2013/2014 had failed to do everything possible to make it possible for an impartial management committee of the Club to hear the complaint against Sim.

(d) The constitutions or rules of private association, being contractual arrangements, may always be changed by the general body of members. Further alternate panels of adjudicators may be formed to ensure that biased members do not hear matters affecting the rights of a member. This is so that justice must not only be done, but be seen to be done.

Decision on the appeal

Damages

After the conclusion of the appeal, the Parties filed written submissions on the appellant’s claim for damages. The appellants submit that, in addition to general damages, they are entitled to aggravated damages as this is a developing area of the law. They also submit that, in any event they are claim damages for mental distress suffered by them as a result of the wrongful suspension of their membership.

The Club submitted the appellants were not entitled to aggravated damages, but damages for mental distress could be awarded for breach of contract, but that the appellants have failed to adduce any evidence of mental distress to justify an award of damages for this head of claim.

In our view, the appellants are not entitled to claim aggravated damages for breach of contract. Contractual damages are compensatory in nature. In Kay Swee Pin v Singapore Island Country Club [2008] SGHC 143 (“Kay Swee Pin (AD)”), which also involved the wrongful suspension of club membership, the Assistant Registrar provided an admirable analysis of the applicable principles of law in holding that Madam Kay was entitled to (a) damages for deprivation of her rights, and privileges as a member (including the loss of use of the facilities of the SICC); (b) damages for the humiliation, embarrassment, anguish and mental distress caused by the wrongful suspension; but not to (c) aggravated, exemplary and punitive damages. We endorse his analysis of the law.

We accordingly hold that the appellants are entitled only to general damages, if any, relating the temporary loss of membership rights and privileges and mental distress, and direct that such damages be assessed by the Registrar or any Assistant Registrar.