Club can't simply change its mind: Judge

The Singapore Swimming Club has come in for some gentle ribbing by a judge who had earlier ruled against its attempt to recover the $1.5 million it had used to defend its former president in a defamation suit.

Judicial Commissioner Lee Kim Shin, who ruled against the club's bid last month, said in judgment grounds released last week that the club cannot "simply change its mind" over whether to pay the legal bills of its former president, Mr Freddie Koh.

He also noted that the club has found itself in a "sea of litigation", with seven cases in the High Court alone over the last six years. This excluded State Court cases and the proceedings involving whether the club should pay Mr Koh's legal bills.

"There must be something in the water," said Judicial Commissioner Lee as he explained why he rejected the club's bid to recover the money.

The judge said the club cannot just change its mind and recover the payments through its own private act, by passing extraordinary general meeting (EGM) resolutions.

But the judge also dismissed Mr Koh's bid to be reimbursed for the $248,900 he personally paid in damages and legal costs to defend the defamation suit against him. These payments were made by Mr Koh, after the club's EGM in March 2012, where it had resolved to cease any further payments for his legal costs and damages.

Mr Koh, 68, who became club president in 2008 but was voted out at the 2012 EGM, had lost the defamation suits against him in 2011 and 2013.

While in office, he made defamatory remarks during two management committee meetings about a previous committee's decision to buy a water-filtration package for two Olympic-size swimming pools.

Four of the affected committee members sued him in 2009 and were awarded $50,000 in damages each by the Court of Appeal. Two other members who also separately sued Mr Koh were awarded $50,000 each in damages last year.

Mr Koh had used about $1.5 million in club funds to defend the 2009 defamation suit brought by Mr Bernard Chan, Mr Robin Tan, Mr Nicholas Chong and Mr Michael Ho, which he lost.

Key to the case before Judicial Commissioner Lee, who completed his term last week, was the club's 2012 EGM, which resolved that Mr Koh would not be allowed to use club funds to settle his losses.

Mr Koh's lawyer, Mr Paul Seah, argued that the EGM resolutions could not alter or vary his right to be indemnified by the club for the legal bills, based on an earlier resolution passed by the management committee in 2009.

The club's lawyer, Senior Counsel Tan Chee Meng, countered that the 2009 indemnity resolution was voidable because Mr Koh as then president had breached various fiduciary duties, or an obligation to act in the best interests of the club.

Among other things, Mr Tan argued that even if the 2009 resolution was valid, it was to cover office bearers acting in the proper discharge of their duties. But, he said, this was not the case here as Mr Koh acted with malice in making the defamatory statements.

The judge was not convinced but also made it clear that the indemnity resolution by itself did not give Mr Koh an irrevocable right to be reimbursed by the club.

The club was entitled to change its mind and cease paying Mr Koh's costs and damages after the March 2012 EGM was passed, he said.

As for payments made before the EGM, Judicial Commissioner Lee noted that the club had voluntarily paid these. He said that as "a matter of principle and policy", he did not see how the club can "simply change its mind" and recover sums already paid to Mr Koh.

Mr Koh was ordered to pay $20,000 in costs to the club.

vijayan@sph.com.sg

This article was first published on Jan 5, 2015.
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