Public Prosecutor v Ng Teck Lee (Centillion Environment & Recycling Ltd (formerly known as Citiraya Industries Ltd) and another, other parties) (Ung Yoke Hooi, intervener) and another matter

Kan Ting Chiu J:

[1] In this judgment, the workings of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap 65A, 2000 Rev Ed) (“CDSA”) will be considered and applied.

[2] In essence, this case concerned an application by the Public Prosecutor (“PP”) for the confiscation of the benefits derived by Ng Teck Lee (“NTL”) from his criminal conduct and the realisation of property to satisfy the confiscation order. There were also applications by three parties, namely, Centillion Environment & Recycling Ltd (“Centillion”), Thor Beng Huat (“TBH”) and Ung Yoke Hooi (“UYH”) who asserted their interests in some of the properties which the PP considers to be realisable under the CDSA.

[3] NTL was the Chief Executive Officer cum President of Citiraya Industries Ltd (“Citiraya”) (as the company was named before changing its name to Centillion). Citiraya was engaged in the business of recycling and recovering precious metals from electronic scrap. Citiraya entered into agreements with a number of companies which produced computer chips (“the chip manufacturers”) whereby Citiraya was to crush substandard items made by the chip manufacturers and recover precious metals from that scrap.

[4] NTL’s criminal conduct was uncovered by the Corrupt Practices Investigation Bureau (“CPIB”). Chief Special Investigator Fong Wai Kit (“Fong”) of the CPIB filed an affidavit in these proceedings on 10 June 2008 in which he stated that investigations against NTL were commenced following the receipt of a complaint in December 2004. The investigations related to offences including criminal breach of trust as a servant under s 408 of the Penal Code (Cap 224, 2008 Rev Ed) and other offences, all of which came within the definition of a “serious offence” under the Second Schedule to the CDSA. The relevant paragraphs of Fong’s affidavit stated as follows:

[5] Gan Chin Chin (“Gan”), former Chief Financial Officer of Citiraya and personal financial advisor to NTL, deposed an affidavit in which she confirmed her role in Citiraya and in NTL’s criminal activities. She went on to disclose that:

[6] NTL was not charged or prosecuted for any offence because he had left Singapore on 19 January 2005 and had not returned since.

[7] Following his departure, efforts were made to locate him, including:

(a) immigration stoplist issued on 24 January 2005;

(b) Police Gazette issued on 15 February 2005;

(c) Singapore Warrant of arrest issued on 24 February 2005; and

(d) International Warrant of Arrest issued through Interpol on 8 April 2005;

but despite these measures, his whereabouts (and the whereabouts of his wife Thor Chwee Hwa (“TCH”)) remain unknown.

[8] In the circumstances, NTL is deemed under s 26(3) of the CDSA to have absconded, and he is therefore also deemed under s 26(1) to be convicted of a serious offence.

[9] In these proceedings the PP applied for, inter alia,

(a) a confiscation order against NTL under s 5 of the CDSA for US$51,196,938.52 being the value of benefits known to be derived by him from criminal conduct;

(b) a certificate under s 10(2) of the CDSA that the amount to be recovered under the confiscation order be assessed at $28,832,725.14 and US$1,008.66;

(c) an order that NTL pay $28,832,725.14 and US$1,008.66 to the State;

(d) an order that properties identified as realisable properties be realised and applied on NTL’s behalf towards the satisfaction of the confiscation order; and

(e) an order that the PP be at liberty to apply for supplementary confiscation and realisation orders.

Service of the application on NTL and TCH was dispensed with as their whereabouts were unknown.

[10] Confiscation orders are generally made under s 5 of the CDSA. Section 5(1) provides that:

[11] In the present case, as the defendant NTL had absconded, s 27 of the CDSA applied. It provides that:

On the facts, the conditions in ss 27(a) and (b) were satisfied.

[12] Under the CDSA, third parties may be heard when an application is made for a confiscation order or after a confiscation order is made. Section 13 of the CDSA, which governs such applications, provides that:

[13] Centillion and TBH asserted their interests in particular properties that the PP sought to realise on 11 July 2008 and 21 October 2008 respectively. When the PP’s application came on for hearing, I informed the parties that I proposed to deal with the PP’s application for a confiscation order first, on the understanding that the making of the order would not prejudice the right of any third party to assert their interest in any properties. There were no objections to the proposal, and the confiscation order was made on 4 May 2009. UYH subsequently asserted his interest on 22 May 2009.

[14] It was necessary in these proceedings to have a clear understanding of the term “benefits derived … from criminal conduct” appearing in s 5(1) of the CDSA. Section 8(1) of the CDSA provides that:

[15] On a reading of s 8(1)(a), the benefits derived by a person from criminal conduct are determined by a process where:

(a) the person’s property or interest in the property is established;

(b) the person’s known sources of income are established; and

(c) it is established that the property or interest in the property is disproportionate to the person’s known sources of income, and the disproportionality is not explained to the satisfaction of the court.

In the application for a confiscation order in this case the PP did not refer to s 8(1)(a) or the requirements therein, but instead presented direct evidence that NTL had derived benefits amounting to US$51,196,938.5 from the sale of the computer chips misappropriated from Centillion (“the misappropriated chips”).

[16] The proper construction of s 8(1)(a) was critical to the PP’s application. Section 8(1)(a) may be construed as the exhaustive definition of benefits derived from criminal conduct, or it may be construed as one definition of the benefits. This issue was not raised during the hearing.

[17] There is a good reason for the definition in s 8(1)(a) to be regarded as non-exhaustive. If a person is known:

(a) to have engaged in criminal conduct; and

(b) to have obtained $X from the criminal conduct,

then the court should find that $X is the benefit derived from the criminal conduct without having to refer to s 8(1)(a). It is only in a situation where a person is known to have engaged in criminal conduct but the amount of benefit that he had derived from the criminal conduct is not known that s 8(1)(a) is needed.

[18] The process in s 8(1)(a) predates the CDSA. It can be traced back to s 5(1)(a)(i) of the Corruption (Confiscation of Benefits) Act (No 16 of 1989) (“CCBA”), which stated:

Section 5(1)(a)(i) followed after s 4(4) of the CCBA, which stated:

[19] In the parliamentary debates leading to the enactment of the CCBA, Professor S Jayakumar, then Second Minister for Law, explained the clause that would become s 4 of the CCBA (Singapore Parliamentary Debates, Official Report (30 March 1988) vol 50 at cols 1718–1719):

[20] In a further speech, Professor Jayakumar spoke on clause 4 and clause 5 of the Bill, which were to become s 4 and s 5 of the CCBA respectively (Singapore Parliamentary Debates, Official Report (3 March 1989) vol 53 at cols 13–14):

[21] It can be seen from this legislative material that s 4(4) and s 5(1)(a)(i) of the CCBA were enacted to facilitate the confiscation of the property of a person who has engaged in corrupt practices by creating presumptions which could be applied where there is no proof that the person had derived direct benefit from acts of corruption. The CCBA has been repealed and the confiscation of benefits derived from corruption is now dealt with under the CDSA. Section 5(1)(a)(i) of the CCBA is carried over in s 8(1)(a) of the CDSA, and s 4(4) of the CCBA is carried over in s 5(6) of the CDSA which provides that:

[22] When s 8(1)(a) of the CDSA is read against its legislative history and in conjunction with s 5(6) of the CDSA, it is clear that it is a presumptive provision and not an exhaustive definition of the benefits derived from criminal conduct.

[23] After the making of the confiscation order mentioned at [13] above, I turned my attention to the applications relating to the realisation of property under s 19 of the CDSA. There were a multitude of applications from Centillion, UYH and TBH. The applications were, inter alia:

(a) Centillion’s application for a declaration that it has an interest in the properties the PP was seeking to realise;

(b) UYH’s application for a declaration that he is the beneficial owner of the money in his bank accounts which the PP was seeking to realise; and

(c) TBH’s application for a declaration that he is the beneficial owner of TCH’s 60% interest in the property known as 95A Paya Lebar Crescent, which the PP was seeking to realise.

[24] While the claimants’ applications were for different forms of relief, the purpose behind them was common: they opposed the PP’s application for a realisation order over some properties on the ground that they had interests in some of the properties. In view of that, I proposed (and the parties agreed) that the third party claimants’ applications, despite being taken out under a variety of different procedures, were to be taken as applications under s 13 of the CDSA which deals with the protection of rights of third parties under that Act.

[25] The effect of s 13 had to be considered. The relevant sections have been set out at [12] above. Section 13(1) requires a third party who asserts an interest in a property affected by a confiscation application to apply for an order under s 13(2) (ss 13(3) and (4) also allow third party applications to be made after a confiscation order has been made.) Section 13(2) sets out two conditions in sub-sections (a) and (b) that the applicant must satisfy before he can succeed. The condition in s 13(2)(a) relates to the applicant rather than the property. The condition in s 13(2)(b) relates to the acquisition of the property, and it is not clear whether it relates to any property acquired by the applicant or only to property acquired by the applicant from the defendant. Section 13(2)(b)(i) suggests the latter interpretation because the sufficiency or existence of consideration is not relevant unless the property was acquired from the defendant. Although this is not expressly stated in s 13, a declaration in an applicant’s favour under s 13(2) would mean that the property in question is not realisable property.

[26] The PP’s application extended over 28 classes of property set out in para 5 of the PP’s amended Originating Summons No 785 of 2008 (“OS 785/2008”). I have listed these properties in the PP’s List of Realisable Properties (Appendix A). The PP regarded the listed properties as realisable property under the CDSA. Realisable property is defined in s 2 as:

Definition (b) covers not only gifts caught by the Act, but any property held by the recipient of such gifts. In this light it should be noted that s 21(3) provides that the amount to be realised in the case of such a recipient shall not exceed the value of the gift.

[27] A “gift caught by the Act” is in turn defined in s 12(8):

Under this definition, s 12(8)(a) covers gifts made by NTL within the period of six years prior to 10 June 2008 (the date the application for the confiscation order was made) and s 12(8)(b) covers gifts made at any time out of the benefits derived from NTL’s criminal conduct.

[28] Effectively, a “realisable property” can be any property held by NTL, whether or not it is derived from criminal conduct, and any property held by a person to whom NTL had made a “gift caught by the Act”, even if the specific property is not itself a “gift caught by the Act”.

[29] UYH claimed an interest in the money in five bank accounts in his name. The PP asserted that these were realisable properties at para 5.18 of OS 785/2008.

[30] Intervention by a “white knight” enabled Centillion to survive NTL’s misappropriations. The company entered into a scheme of arrangement with its creditors. Centillion sued NTL and obtained a default judgment against him on 3 November 2008 for the sum of $51,196,938.52 (in Singapore dollars; contrast the currency stated in Fong’s and Gan’s affidavits at [4] and [5] above).

[31] Through the administrator of the scheme of arrangement, Centillion put forward its application on two grounds. It asserted as judgment creditor an interest in a majority of the properties the PP asserted to be realisable, and, alternatively, it claimed an interest in a smaller category of traceable properties on the basis that NTL held these properties as constructive trustee for Centillion.

[32] TBH claimed a beneficial interest in TCH’s 60% share of the property known as 95A Paya Lebar Crescent. The PP asserted that this share was a realisable property at para 5.9 of OS 785/2008.

[33] The PP had to show that the properties in his application were realisable property as defined in s 2 ie that they were either property held by NTL or property held by a person to whom NTL had made a “gift caught by the Act” as defined in s 12(8) (see [28] above). Some of the properties at para 5 of OS 785/2008 (and listed in Appendix A) were not realisable property.

[34] I have listed the true realisable assets in the List of Realisable Properties (Appendix B). These properties were realisable properties because they were:

(a) properties in the name of NTL;

(b) properties in the names of persons (namely, Gan Chin Chin, Kwok Seng Hua and Goh Lik In) who admitted that they held the properties on trust for NTL; or

(c) money in the client account of M/s Allen & Gledhill LLP in the name of NTL. The account number has been stated as [xxx] in para 10 of Fong’s affidavit filed on 11 February 2009 and [xxx] in para 5.28 of OS 785/2008. The correct account number should be verified.

[35] The list in Appendix B is shorter than the list in Appendix A because of the exclusion from Appendix A of:

(a) the properties at paras 5.6, 5.7, 5.8 and 5.9 of OS 785/2008 and TCH’s half share of the properties at paras 5.3, 5.4 and 5.5 of OS 785/2008 (TCH’s properties);

(b) the properties at paras 5.26 and 5.27 of OS 785/2008 which the PP had included on the basis of the hearsay evidence said to be from Wee Kok Keng (“Wee”);

(c) the properties at para 5.18 of OS 785/2008 (UYH’s properties); and

(d) the traceable properties in respect of Centillion’s application.

[36] The properties at paras 5.6, 5.7, 5.8 and 5.9 of OS 785/2008 were properties in the name of TCH. The properties at paras 5.3, 5.4 and 5.5 of OS 785/2008 were properties in the joint names of NTL and TCH, of which TCH held a half share. The PP had sought to include TCH’s properties as realisable properties on the basis that TCH had no employment record and was a homemaker, and her properties must therefore have been derived from NTL. The flaw in this argument was that those properties had to be realisable properties as defined in s 2 of the CDSA (see [26] above). As they were not held by NTL they did not fall under definition (a). For any property held by TCH to be a realisable property under definition (b), it had to be established that NTL had made a gift caught by the Act to her. By the definition in s 12(8), that would include gifts made by NTL to TCH within six years prior to the date of application for the confiscation order (10 June 2008) and any gifts made by NTL to TCH out of the benefits of his criminal conduct.

[37] The only evidence relating to a gift made from NTL to TCH was the following statement in Fong’s affidavit at para 29:

Fong then set out several bank transfers from Pan Asset International Limited (“Pan Asset”)’s Credit Suisse account [xxx] to TCH’s bank accounts. These transfers totalled US$1,249,414.10 and $3,001,465.48. Fong did not disclose the basis for him to assert (a) that the US$1,249,414.10 and $3,001,465.48 came from the proceeds of sale of the misappropriated chips and (b) that the money was a gift from NTL to TCH.

[38] Gan, who received NTL’s instructions and made the transfers mentioned above, only stated (at para 36 of her affidavit) that NTL had instructed her to transfer sums totalling US$1,249,414.10 and $3,001,465.48 from Pan Asset’s Credit Suisse account [xxx] to TCH. She did not state that the money was derived from the proceeds of sale of the misappropriated chips or that the transfers were gifts from NTL.

[39] There was therefore no proper evidence that the money transferred to TCH from Pan Asset’s accounts came from the sale of the misappropriated chips or that it was gifted to TCH by NTL.

[40] Even if it was assumed that TCH’s wealth was derived from NTL, there was no evidence that those properties were direct gifts from NTL or that TCH had acquired the properties in question with gifts that she had received from NTL within the six years prior to 10 June 2008. TCH may have acquired those properties with money gifted to her by NTL before the six-year period. There was also no evidence that TCH used money that was gifted to her by NTL out of the benefits derived from his criminal conduct to acquire those properties. NTL was engaged in legitimate business and it could not be assumed that any gift he made to TCH was derived from his criminal activities.

[41] The properties listed at paras 5.26 and 5.27 of OS 785/2008 were shares and money held by a company, Ventures Trust Pte Ltd (“Ventures Trust”), which was alleged in Fong’s affidavit to have been set up by Wee. Fong also alleged that Wee confirmed that the shares and money belonged beneficially to NTL. However, the PP did not adduce any direct evidence from Wee. The reason put forward was that Wee lives and works overseas. Wee’s “evidence” regarding these properties was hearsay evidence which did not come within the exceptions to the hearsay rule in s 32(c) of the Evidence Act (Cap 97, 1997 Rev Ed), and was inadmissible. Consequently, the shares and money held by Ventures Trust could not be regarded as properties of NTL and were not realisable property.

[42] UYH asserted that the monies in his bank accounts were the balance of $2m received as part payment due under an oral agreement for NTL to buy from him, Ung Yoke Khim (“UYK”) and Soon Ah Lan (“SAL”) four million shares in a company, Citiraya Teknologi Sdn Bhd (“CTSB”), which major shareholder was Centillion.

[43] The PP disputed the existence of the agreement. Questions were raised over the fact that the agreement was not evidenced in writing and that no shares were transferred to NTL (UYH’s evidence was that it was agreed that the shares were to be transferred only upon full payment). UYH had produced affidavits from UYK and SAL which confirmed that there was to be a sale of the shares. These affidavits exhibited letters from UYK and SAL appointing UYH to represent them in the negotiations. UYK gave oral evidence at the hearing and he was not questioned on the letter of authority he issued to UYH. SAL’s attendance in court was dispensed with when it was disclosed that she was hospitalised in Malaysia and was uncontactable.

[44] I found on a balance of probabilities that there was an agreement for the sale of the shares as described by UYH. There was no dispute that UYH, UYK and SAL owned four million shares in CTSB which they were prepared to sell to NTL. On the other hand, the PP did not put up any plausible reason for UYH to be holding the money on trust for NTL, or for NTL to have made gifts of the money to UYH.

[45] I found that UYH had established his interest in the money in his bank accounts. There was no allegation that s 13(2)(a) or s 13(2)(b)(ii) of the CDSA applied to him. As for the issue of consideration under s 13(2)(b)(i), there was no allegation that the purchase price of $1 a share (as stated by UYH) was insufficient consideration. However, I did not declare that the money belonged to UYH beneficially because the money may be refundable as the sale of the shares was aborted because CTSB was wound up subsequently. That question should be determined in separate proceedings between NTL, UYH, UYK and SAL. I limited myself to declaring that the money in the accounts as stated at para 5.18 of OS 785/2008 was not realisable property.

[46] It should be stated that the PP had included the monies in two of the five bank accounts of UYH (corresponding to paras 5.18(i)–(ii) of OS 785/2008) in an affidavit listing properties that were traceable to the proceeds of sale of the misappropriated chips (see [51] below), and this list was accepted by Centillion. However, UYH had not accepted the list, and he was not bound by any admissions contained in it. As the inclusion of the two accounts in the list was not supported by any evidence, there was no proof, as far as UYH was concerned, that the money in the two accounts was traceable to the proceeds of sale of the misappropriated chips.

[47] Centillion based its application on two grounds, firstly as a judgment creditor, and secondly as a beneficiary under constructive trusts.

[48] On the first ground, Centillion claimed that as judgment creditor, it had an interest in the property of NTL. It relied on the definition of an “interest” in relation to property in s 2 of the CDSA, which states that such an “interest” “includes any right”. It was argued that “any right” included a right to take out enforcement proceedings over property. As support for this contention, Centillion’s counsel relied on an Australian act, the Proceeds of Crime Act 1987 (Act 87 of 1987) (Cth) (“POCA”) which provides for the confiscation of benefits of corruption. The specific provision relied on was s 4 of the POCA, which states that:

[49] Counsel contended that the right to take out enforcement proceedings would come within the definition in s 4 of the POCA and that:

Counsel for Centillion did not go so far as to state whether the POCA definition of “interest” is established to include the right to take out execution proceedings or why the POCA definition would apply to proceedings under the CDSA, which has its own definition.

[50] When s 2 of the CDSA defines “interest” to include “any right”, it uses the words “‘interest’ … in relation to property”. The “right” referred to must be a right relating to the property in dispute. In a situation where an application for a realisation order is made in respect of specified properties, “any right” asserted by a third party under s 13 must relate to those specified properties. A general right to take out enforcement proceedings pursuant to a judgment is not a right in any specific property. It can be argued that when enforcement proceedings are commenced with regard to specified properties, the judgment creditor has a potential interest in the properties, and when the right of enforcement is obtained, the judgment creditor would have an actual interest in those properties. However, on these facts Centillion had not taken out any enforcement proceedings in relation to the properties in question, and no explanation was given for that. Could it be that Centillion was not able to take out enforcement proceedings against those properties? As the onus was on Centillion to show that it had an interest in the properties in question, Centillion had not discharged the onus simply by referring to the judgment in its favour against NTL.

[51] Centillion also made a claim on some of the properties as beneficiary of a constructive trust. There is some background to this claim that should be mentioned. Centillion had applied for discovery against the PP. Centillion explained that it needed to discover evidence on the proceeds of sale of the misappropriated chips, in particular, whether the proceeds had been used to purchase properties, and if so, what the properties purchased were. The PP was prepared to give discovery of the documents seized from Centillion, but was not prepared to give discovery of the documents of third parties without their consent. The impasse was resolved when the PP offered to file an affidavit to disclose the properties which could be traced to the proceeds of sale of the misappropriated chips. The PP filed an affidavit on 12 July 2010 deposed by Principal Special Investigator Tok Thiam Soon Frederick (“Tok”) of the CPIB in which he stated that the properties described in paras 5.10(ii), 5.11, 5.13, 5.14, 5.15, 5.17, 5.18(i), 5.18(ii), 5.19(i)(a), 5.20, 5.21, 5.22, 5.23, 5.24, 5.25, 5.26 and 5.27 of OS 785/2008 were established in investigations to be “traceable to the proceeds of sale of the chips misappropriated by [NTL]”. On receipt of the affidavit, Centillion did not proceed with its application for discovery.

[52] I should highlight the fact that while Tok’s statements could be regarded as containing admissions that bind the PP (and were accepted by Centillion), they did not bind the other parties. This is why Tok’s affidavit could not bind UYH in respect of the properties listed at paras 5.18(i)–(ii) of OS 785/2008 (see [46] above). Similarly, Tok’s affidavit could not bind Ventures Trust concerning the properties listed at paras 5.26 and 5.27 which were held by Ventures Trust as those were not proven to be realisable (see [41] above).

[53] Counsel for Centillion then argued that as NTL had misappropriated the chips from Centillion, NTL held the proceeds of the sale of the chips and the property acquired with those proceeds as a constructive trustee for the benefit of Centillion. This was an argument based on tracing from property misappropriated from Centillion. Centillion also had an alternative constructive trust argument, namely that NTL had made illegal profits by misappropriating the chips. Centillion therefore asserted that NTL’s illegal profits (and the properties traceable from those profits) were subject to a constructive trust in favour of the company.

[54] Two landmark decisions, Attorney-General of Hong Kong v Charles Warwick Reid and others [1994] 1 AC 324 (“AG v Reid”) and Thahir Kartika Ratna v PT Pertambangan Minyak dan Gas Bumi Negara (Pertamina) [1994] 3 SLR(R) 312 (“Pertamina”), were cited as authority for Centillion’s contention. Both cases dealt with the question of whether a principal was entitled to assert a beneficial interest in a bribe received by an agent or fiduciary, and in both cases, it was held that the principal was entitled to assert a constructive trust over the bribe (and property traceable from the bribe).

[55] In particular, Centillion’s counsel set out in its submissions Lord Templeman’s finding in AG v Reid at pp 331B–332A as follows:

This passage was applied in Pertamina at [56].

[56] AG v Reid and Pertamina related to a form of trust which does not exist until the bribes are received by a fiduciary in breach of his duties, as contrasted to cases where property is entrusted onto the wrongdoer from the outset, prior to the wrongdoing. The decision of the English Court of Appeal in J J Harrison (Properties) Ltd v Harrison [2002] 1 BCLC 162 (“Harrison”) dealt with a trust of the second form. In that case, a director of a company disposed of the company’s property in breach of his fiduciary duties. Chadwick LJ held at [27]:

This passage applies squarely to NTL. The trust of the type in Harrison conforms to the conventional view on trust, while the bribe-related trusts in AG v Reid and Pertamina reflect a more recent development in the law of trust. Both forms of trust are recognised in Singapore. Under both types of constructive trust, I found on the basis of Tok’s evidence (see [51]–[52] above) that NTL held the properties in the List of Constructive Trust Properties (Appendix C) on trust for Centillion.

[57] The PP raised multiple arguments against a constructive trust. The first argument was that:

This is a curious argument. Firstly, there was no evidence that NTL was the directing mind of Centillion. Secondly, it is ridiculous to say that when NTL misappropriated the chips from Centillion, sold them and kept the proceeds for himself, it can be said that the company did that.

[58] The second argument was that Centillion was not entitled to claim a constructive trust over the proceeds of the sale of the misappropriated chips because Centillion could not have obtained those proceeds in the usual course of its business, and therefore Centillion was attempting to obtain “unjust, if not illegal, enrichment for itself.” The argument is misconceived. Under the analysis in AG v Reid, the constructive trust arises out of NTL’s breach of his fiduciary duties to the company, and the constructive trust applies to all benefits NTL derived from the breach of these duties. There is no basis to confine the constructive trust to the benefits that Centillion would have derived in the course of its business. The argument confuses Centillion’s entitlement to restitution in respect of its direct loss of the misappropriated chips with Centillion’s entitlement as the beneficiary of a constructive trust to the benefits NTL derived from his breach of fiduciary duties. In this case it is the latter that is under consideration, not the former. Under the Harrison type of constructive trust it is even clearer that the properties traceable from the proceeds of sale of the misappropriated chips represent, on a totally orthodox tracing analysis, the value of Centillion’s misappropriated chips. There is no reason this value should not be claimed by Centillion as constructive trustee.

[59] It is not unjust for there to be a constructive trust over the proceeds of the sale of the misappropriated chips and this was made clear by Lord Templeman in AG v Reid in the passage of his judgment that has been set out at [54] above as well as at 338A–C of AG v Reid, where he stated:

On the contrary, it would be wrong to allow NTL to retain ownership of the proceeds of the sale of the misappropriated chips in excess of the value of the crushed chips, even if there is the expectation that they may be confiscated from him on the application of the PP. NTL’s right of retention must be considered separately from the liability to confiscation. If nothing is retained by NTL, there will be nothing to confiscate from him.

[60] Thirdly, it was submitted that Centillion “has not adduced any evidence as to the losses that it suffered” from NTL’s actions. Two responses can be made to the submission. Firstly, there can be no doubt that when NTL misappropriated the chips, Centillion suffered loss, at the minimum, of the value of the misappropriated chips. Secondly, and more importantly, loss is not a requirement for a constructive trust, as was made clear by Morritt LJ in the English Court of Appeal decision of United Pan-Europe v Deutsche Bank [2000] 2 BCLC 461 at [47] as follows:

Although Morritt LJ was referring to constructive trusts of the AG v Reid type, the same principle (that no proof of loss is required) applies to constructive trusts generally.

[61] Fourthly, the PP took issue that “Centillion has failed to adduce any evidence as [sic] to prove which of the computer chips belonged to the company at the time of misappropriation”, implying that NTL’s liability for breach of trust and the formation of any constructive trust should be restricted to misappropriated chips which belonged to Centillion. That is a departure from the basis of these confiscation proceedings that the PP is pursuing. The PP, in his first set of written submissions, stated that he made the application on the following ground:

In other words, the PP was stating that NTL had committed breach of trust as a servant of Centillion in respect of all the chips which were misappropriated and sold. The quoted statement correctly states that the offence is constituted by a misappropriation that followed after an entrustment of property. Neither the entrustment nor the misappropriation was conditional on Centillion being the owner of the chips. It was sufficient that Centillion had possession and control of the chips at that time and had entrusted them to NTL. The same reasoning holds true for a finding in relation to a constructive trust: it was not necessary for Centillion to have owned the chips for me to find that NTL held them on trust for Centillion.

[62] In any event, the PP’s position was not that Centillion did not own the chips at the times of misappropriation. His position was that while he was satisfied that Centillion had paid the chip manufacturers for the chips and that title in the chips passed upon payment, he was unable to establish if the chips were misappropriated before or after Centillion had paid for them (and therefore obtained title over them). In such a situation s 112 of the Evidence Act (Cap 97, 1997 Rev Ed) applies. This section provides that:

As the chips were misappropriated while they were in Centillion’s possession, Centillion was deemed to be the owner.

[63] The PP also put up an argument based on policy considerations, namely that:

There was no explanation or elaboration of criminals’ alleged ability to exploit or take advantage of constructive trusts. More pertinently, the PP was not saying that NTL could exploit the mechanism of a constructive trust on the facts because he clearly could not. Properties falling under a constructive trust would go to Centillion’s creditors under its scheme of arrangement: none of them would have gone to NTL. In my view the relevant policy considerations favour Centillion’s creditors, who have a right to claim against Centillion’s assets, rather than the State, which would receive any realised property as a windfall.

[64] TBH asserted an interest in the 60% share of a house at 95A Paya Lebar Crescent. That 60% share was registered in the name of his sister TCH, with TBH being the registered owner of the other 40% of the property, but the PP was only seeking to realise TCH’s 60% share of the property. The basis of TBH’s claim was straightforward. He claimed that there was an agreement between him and TCH that she held her 60% share on trust for him.

[65] In an affidavit filed on 21 October 2008 TBH explained the history of the acquisition of the property:

In this affidavit, TBH did not assert that he held a beneficial interest in the 60% share of the property registered under TCH’s name. He only went so far as to say (at para 12) that TCH “has no beneficial interest whatsoever in the said property”.

[66] TBH’s mother See Siew Geok (“See”) also gave evidence to support his claim. She filed an affidavit in which she revealed the Thor family’s concern over TBH’s girlfriend/future wife:

In her affidavit, See also did not say that TBH was the beneficial owner of TCH’s registered 60% share in the property.

[67] When TBH gave oral evidence in court he claimed full beneficial ownership over the property. At that stage, he was referred to his mother’s affidavit and the concern over his girlfriend/future wife’s claim to the property, and the following clarification was obtained from him:

Counsel for TBH did not seek any clarification or qualification from him in re-examination, and this evidence was not contradicted by See when she gave evidence.

[68] In the face of TBH’s clear admission that his intention was for TCH to have full beneficial ownership of her 60% share of the property, he cannot have any beneficial interest in that 60% share.

[69] After having considered the evidence adduced and the issues raised by the parties, my orders were as follows:

(a) I certified that the properties in the List of Realisable Properties (Appendix B) were realisable properties;

(b) The PP was to have liberty to apply for further confiscation or realisation orders (i) if fresh evidence is available on other properties, or (ii) upon the production of admissible and sufficient evidence from Wee on the shares and money held in the name of Ventures Trust (if this is done, the consequence will be that the shares and money, which Tok has confirmed are traceable to the proceeds of sale of the misappropriated chips, will not be realisable as Centillion will have a constructive trust interest in them (see [52] above));

(c) I ordered costs to the PP to be paid by NTL.

I declined to issue a certificate under s 10(2) of the CDSA on the amount recoverable under the confiscation order because the amount would only be known after the realisation process is completed, at which point the amount recovered can be determined.

[70] I did not make the other orders sought by the PP because a receiver should be appointed for the realisable property as provided in s 19(3) of the CDSA which empowers the court to appoint the Public Trustee or any person as receiver in respect of realisable property. When a receiver is appointed, further orders may be obtained under s 19(1) to empower the receiver to realise the properties and generally to complete the realisation process.

[75] Although this was not stated expressly, the PP was essentially relying on the principle enunciated in Baxendale-Walker v Law Society [2008] 1 WLR 426 (“Baxendale-Walker”), a decision of the English Court of Appeal. Baxendale-Walker was discussed and applied by the Court of Appeal in Law Society of Singapore v Top Ten Entertainment Pte Ltd [2011] 2 SLR 1279 (“Top Ten”).

[76] The facts of Baxendale-Walker were as set out in the headnote of the report of the case:

[77] Section 47(2) of the Solicitors’ Act 1974 (c 47) (UK) provides that:

The discretion that the tribunal has to order costs is broad, with no requirement that costs should generally follow the event.

[78] In Baxendale-Walker, Sir Igor Judge P stated at [34] that:

He also stated at [39] that:

The Law Society appealed against the costs order. In the judgment of the Court of Appeal delivered by Chan Sek Keong CJ, he stated at [24] that the principle enunciated in Baxendale-Walker (as set out in the quotations above at [78]) would apply to the Law Society if it was acting as a regulating body because:

The Court of Appeal went on to hold that the Law Society was acting as a regulating body.

and came to the following conclusion at [34]:

[83] The facts of Perinpanathan were as set out in the headnote of the report of the case:

[85] The court in Perinpanathan applied the Baxendale-Walker principle and dismissed the claimant’s appeal. However, Stanley Burnton LJ set out the following caveat to the principle at [40]:

Lord Neuberger of Abbotsbury MR elaborated on this caveat at [77]:

An order in the Rules of Court, O 89A, caters specifically for proceedings under the CDSA. All the applications in the present case were regulated by this order. Order 89A rule 2 deals with applications for confiscation orders, O 89A r 3 deals with applications for the protection of the rights of third parties, and O 89A r 9 deals with the realisation of property. It is quite clear that O 89A regulates applications for confiscation and realisation orders. As the Rules of Court govern applications under the CDSA, O 59 would regulate the award of costs in such proceedings.

5.1 All monies in the following bank accounts:

5.2 The following insurance policies owned by Ng Teck Lee:

5.3 All monies in the following bank accounts maintained under the names of Ng Teck Lee and/or Thor Chwee Hwa:

5.4 The sum of S$4,517,143.40 which was paid into court on 26 October 2006 related to receipt no. W951664 being the balance of the proceeds of sale of 49A Binjai Park, Singapore 589851, which was jointly owned by Ng Teck Lee and Thor Chwee Hwa;

5.5 The sum of S$1,112,522.85 which was paid into court on 10 December 2007 related to receipt no. W951903 being the balance of the proceeds of sale of 97 Paya Lebar Crescent, Singapore 536181, which was jointly owned by Ng Teck Lee and Thor Chwee Hwa and the interest accrued on the balance of the proceeds of sale up to 10 December 2007;

5.6 All monies in the following bank accounts maintained under the name of Thor Chwee Hwa:

5.7 The following insurance policies owned by Thor Chwee Hwa:

5.8 The sum of S$932,696.56 which was paid into court on 17 November 2005 related to receipt W951512 being the balance of the proceeds of sale of 84 Binjai Park, Singapore 589879, which was jointly owned by Thor Chwee Hwa and See Siew Geok;

5.9 Thor Chwee Hwa’s 60% share in the property 95A Paya Lebar Crescent, Singapore 536180;

5.10 All monies in the following bank accounts:

5.11 2,300,000 Global Voice Group Ltd shares in Gan Chin Chin’s Central Depository (“CDP”) account no. [xxx];

5.12 The Defendant’s right to recover from Gan Chin Chin the repayment of a loan of S$3,496,678.37;

5.13 All monies in UOB account no. [xxx] maintained under the name of Holinone International Pte Ltd;

5.14 2,000,000 Interra Resources Limited shares in Ever Equal Limited’s CDP account no. [xxx];

5.15 The following shares in Kwok Seng Hwa’s CDP account no. [xxx]:

5.16 All monies in POSB account no. [xxx] maintained under the name of Kwok Seng Hwa;

5.17 All monies in the UOB account no. [xxx] maintained under the name of Integrated Recycling Industries (S) Pte Ltd;

5.18 All monies in the following bank accounts maintained under the name of Ung Yoke Hooi:

5.20 The sum of S$592,652.30 plus all accrued interest thereon from 19 October 2004 to the date all monies are paid out from the account by OCBC to the State in OCBC account no. [xxx] maintained under the name of Goh Lik In;

5.21 7,400,000 China Enersave Ltd shares (and 2,236,650 China Enersave Ltd W110112) in HL Bank account no. [xxx] maintained under the name of Horrison Capital Ltd;

5.22 All monies in DBS account no. [xxx] maintained under the name of China Far East International Enterprises Pte Ltd;

5.23 All monies in OCBC account no. [xxx] maintained under the name of United Excess Pte Ltd;

5.24 All monies in POSB account no. [xxx] maintained under the name of Ng Lai Heng;

5.25 All monies in UOB account no. [xxx] maintained under the name of Maxta Computer Pte Ltd;

5.26 (4,500,000 ÷ 6,633,360 × 100) percent of 29,600,000 China Enersave Ltd shares (and 8,946,000 China Enersave Ltd W110112) in Ventures Trust Pte Ltd’s CDP account no. [xxx];

5.27 The sum of S$149,000 in DBS account no. [xxx] maintained under the name of Ventures Trust Pte Ltd; and

5.28 Deposit number 7727 in the OCBC client account no. [xxx] of M/s Allen & Gledhill LLP.