Corrupt offenders face longer jail terms for unpaid penalties in landmark Court of Appeal ruling

Corrupt offenders in Singapore now face significantly longer jail terms if they fail to pay court-imposed penalties, following a landmark ruling by the Court of Appeal on 4 December 2024.

The decision mandates that sentencing judges impose penalties for each bribery charge instead of issuing a single global penalty for multiple charges.

This ruling, which applies under the Prevention of Corruption Act (PCA), ensures that offenders cannot retain their illicit gains by choosing default imprisonment over paying penalties.

The judgment, delivered by a three-judge panel comprising Justices Tay Yong Kwang, Steven Chong, and Belinda Ang Saw Ean, clarified that penalties under the PCA must reflect the number of charges on which a person is convicted. Each penalty carries an in-default jail term capped at 30 months.

When combined across multiple charges, the default jail terms could result in significantly longer sentences than the previous approach of issuing a single penalty order.

Under the revised framework, an offender convicted on ten charges could face ten penalties, each with its own in-default jail term of up to 30 months. This could result in a maximum of 25 years in default imprisonment if the penalties remain unpaid.

The court emphasised that this approach strengthens the deterrent effect of the PCA by ensuring that offenders cannot evade disgorgement of illicit gains.

The Court of Appeal explained its reasoning for the decision and rejected arguments for a single penalty order.

“The legislative purpose of Section 13(1) of the PCA is to prevent corrupt recipients from retaining their ill-gotten gains. Allowing a single penalty for multiple charges, capped at 30 months’ in-default imprisonment, would dilute the deterrent effect and provide an unjustifiable loophole,” the court stated.

The court added that penalties tied to individual charges ensure fairness: “This interpretation ensures that each offence is proportionately penalised based on the gratification involved, preventing arbitrary or inconsistent outcomes.”

Rejecting the defence’s argument for prospective application, the judgment noted: “The interpretation reflects the statutory purpose of Section 13 of the PCA and has been foreseeable in light of the provision’s wording. To apply this only to future cases would undermine the statute’s intent to deter corruption effectively.”

The court also established a detailed framework for calibrating default imprisonment terms, pegging them at S$1,000 per day of default: “This formula provides consistency across cases while allowing adjustments based on the offender’s ability to pay or the need for stronger deterrence,” the court explained.

The ruling arose from the case of Clarence Chang, a former BP manager convicted on 19 charges of receiving bribes totalling S$5.88 million from Pacific Prime Trading between 2006 and 2010.

Initially, the High Court issued three penalty orders totalling S$5.88 million, with a default imprisonment term of about 71 months for non-payment.

Chang appealed, seeking to reduce the penalties to a single order. Concurrently, the prosecution argued that penalties must be issued for each charge under Section 13(1) of the PCA to properly reflect the legislative intent of the law.

Chang’s appeal raised the question of whether sentencing judges could impose a single penalty for multiple charges or must issue separate penalties for each charge. This question formed the basis of the case referred to the Court of Appeal.

Chang’s legal team, led by Mr Gary Low of Drew & Napier, submitted that a single penalty for all charges was consistent with historical judicial practice. Historically, courts have imposed one global penalty even when offenders faced multiple charges of bribery.

“This has been the consistent approach for decades. Imposing multiple penalties would introduce arbitrariness, as outcomes could depend on how charges are framed,” the defence stated in its submission.

The team warned that issuing multiple penalties risks disproportionately harsh outcomes, especially for offenders with numerous charges. They argued that cumulative default imprisonment terms could become excessive, undermining the proportionality of sentencing.

The defence also emphasised that the PCA’s primary purpose is to ensure disgorgement of illicit gains, rather than imposing punitive imprisonment for non-payment. “Penalties should focus on ensuring offenders repay their illegal profits, not punishing them for non-payment,” they contended.

Further, the defence urged the Court of Appeal to apply any new interpretation prospectively, arguing that this would ensure fairness to offenders sentenced under earlier frameworks.

The prosecution, represented by the Attorney-General’s Chambers, submitted that penalties must be tied to each charge of bribery to align with the explicit intent of Section 13(1) of the PCA.

“Each charge involves a distinct offence and a specific amount of gratification. To issue one penalty for all charges would undermine the law’s purpose, which is to ensure that offenders fully disgorge the benefits of their corrupt actions,” the prosecution stated.

They further argued that a single penalty approach weakens deterrence, particularly in cases involving substantial bribes. Offenders, they noted, might opt to serve the capped default imprisonment term of 30 months rather than pay significant penalties.

Highlighting past cases where multiple penalties had been imposed, the prosecution contended that this approach ensures consistency, equity, and proportionality in sentencing. Tying penalties to each charge strengthens deterrence by reflecting the severity of corruption offences, they said.

Chang’s lawyer told The Straits Times that his client intends to pay the penalties in full.