Public Prosecutor v Leow Ban Leong and another and another appeal [2019] SGHC 29

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Having heard the parties’ submissions, I do not think that the trial judge’s findings on the whole are against the weight of the evidence. Accordingly, I dismiss Leow and Foo’s appeals against conviction. In particular, I agree with the trial judge that Foo and Leow had both acted on the basis that the “Term Contract” would apply to the Floating Sea Barrier Project (“FSB Project”), which would require Prelim to charge for the buoys only on a cost-plus basis. I say this for three reasons. First, the only contract governing the relationship between Prelim and the Police Coast Guard (“PCG”) was the Term Contract. Second, Leow’s statement to the Commercial Affairs Department suggests that he had believed the Term Contract would apply to the FSB Project. Third, Prelim made reference to the Term Contract in the authentic “Form D9” that was submitted to the Auditor-General’s Office (“AGO”). In fact, Form D9 itself was a feature unique to the Term Contract. Form D9 was a declaration by Prelim to the Ministry of Home Affairs (“MHA”) that the price quoted was the net price paid to its supplier (after deducting trade discounts), and that it had not suppressed any information to the disadvantage of the government.

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Even if it were the case that the Term Contract was rendered inapplicable because the supply and/or services (if any) to be provided as part of the FSB Project were outside the scope of the Term Contract, there was nothing to prevent the parties from agreeing to a separate ad hoc contract that would be governed by terms similar to the Term Contract, such that the pricing was also to be on a cost-plus basis. This was a term that the contracting parties would have been familiar with.

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It is significant to note at this juncture that there was an asterisk marked in the Quotation next to the item for the buoys to indicate that it was to be on a cost-plus basis as would be under the Term Contract. Upon accepting to perform the contract as per the Quotation, Leow and Foo must have known at least by this time (if not even earlier) that they would be overcharging PCG as the cost-plus basis of charging would have only allowed them to charge at $1,500 plus 5% per buoy and not $2,500 plus 5% per buoy. Despite this, they proceeded to ensure that PCG was charged a cost-plus price of $2,500 plus 5% per buoy, which was in fact known to them to be wrong. The fact stated in the Quotation (which was ratified by them) therefore falsely represented $2,500 plus 5% per buoy as the true cost-plus price of the buoys. However, the true cost-plus price should have been $1,500 per buoy from its supplier plus 5% and no more.

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Therefore, when the AGO asked for supporting documents to prove that Prelim had indeed purchased the buoys from its supplier Wealth Marine at what purported to be $2,500 per buoy, Leow and Foo decided to fabricate supporting documents on the letterhead of Prelim’s related company Advance. This was to make it seem as though the overall average cost of the buoys was $2,500 each because some extra services provided by Advance had to be included to the cost of the buoys. To my mind, there were two likely reasons for this. First, Leow and Foo wanted to retain the additional $1,000 per buoy which they had overcharged PCG and therefore they ingeniously disguised them as extra services (eg, some fictitious warranties) per buoy in the fictitious invoice documents of Prelim’s purported supplier Advance. Second, Leow and Foo wanted to cover up the overcharging and falsification of the cost-plus price of $2,500 plus 5% charged per buoy in order to preserve Prelim’s reputation with PCG (and ultimately the MHA).

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Taking the appellants’ case at its highest, all this goes to demonstrate that there was one isolated fact stated in the offending documents, which only when completely taken out of context would be correct, ie, the cost price was indeed $1,500 per buoy. But this ignores the fact that the fictitious documents tendered to AGO fraudulently misrepresented to the AGO that the supplier of the buoys to Prelim was Advance when in fact it was Wealth Marine. Further, the fictitious documents fraudulently misrepresented to the AGO that there was a three-year extended warranty provided by Advance to Prelim in respect of the 91 buoys for which PCG had to be additionally charged. In fact, no such extended warranty was asked for nor agreed to by PCG. The fictitious three-year extended warranty was inserted to artificially boost the overall average price per buoy to $2,500, a figure that the appellants were anxious to show to AGO on the supporting documents in order to match the cost-plus price Prelim had charged to PCG of $2,500 plus 5% per buoy as per the Quotation.

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Ultimately, Leow and Foo had fabricated the offending documents intended to be eventually forwarded by Benson for presentation to AGO, which they knew to contain false information. Therefore, the actus reus of the offence under s 477A is made out, which the appellants do not dispute. The mens rea of the offence has two components, namely the intention to deceive, and intention to gain some advantage or benefit. To my mind, the appellants had intended to use these offending documents to mislead and deceive the AGO into thinking that Advance was the actual supplier of the buoys when it was not the case, and further, that the $2,500 cost of each buoy was comprised of $1,500 for the buoy itself that Advance had itself supplied to PCG plus an additional $1,000 for a fictitious extended warranty and some other services for the buoys. This then purportedly allowed Advance to charge Prelim an average price of $2,500 per buoy. Further, the offending documents, if believed by the AGO to be true with regard to all the facts stated therein, would have allowed Prelim to retain the additional $1,000 per buoy. This is because it would have justified to the AGO that the overall cost price was $2,500 per buoy plus 5% that was charged to PCG as per the terms of the Term Contract on a cost-plus basis. Therefore, the intention to gain a benefit is clear even without me having to find that their intention was to avoid reputational damage. Accordingly, I see no reason to overturn the judge’s decision to convict Leow and Foo and I dismiss the appeals against conviction.