Alwie Handoyo v Tjong Very Sumito

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
Judgment Date06 August 2013
Date06 August 2013
Docket NumberCivil Appeals Nos 82 and 83 of 2012

Court of Appeal

Sundaresh Menon CJ

,

Chao Hick Tin JA

and

VK Rajah JA

Civil Appeals Nos 82 and 83 of 2012

Alwie Handoyo
Plaintiff
and
Tjong Very Sumito and another and another appeal
Defendant

Sivakumar Vivekanandan Murugaiyan (Genesis Law Corporation) and Tang Hang Wu (TSMP Law Corporation) for the appellant in CA 82/2012

Ang Cheng Hock SC, Tay Yong Seng and Ivan Lim (Allen & Gledhill LLP) and Nicholas Narayanan (Nicholas & Tan Partnership LLP) for the appellant in CA 83/2012

Peter Gabriel, Kelvin David Tan Sia Khoon and Ong Pang Yew Shannon (Gabriel Law Corporation) for the respondents in CA 82/2012 and CA 83/2012.

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Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) s 37 (4)

Companies (Central Depository System) Regulations (Cap 50, Rg 2, 1994 Rev Ed) s 11

Agency—Evidence of agency—Whether third party recipient of shares paid pursuant to agreement was agent of seller in agreement

Bailment—Bailees—Whether third party recipient of shares paid pursuant to agreement was bailee of shares

Companies—Incorporation of companies—Lifting of corporate veil—Whether corporate veil should be lifted on ground of alter ego

Evidence—Proof of evidence—Onus of proof—Standard of proof—Whether there was separate and discrete burden of proof for allegations of fraud

Evidence—Witnesses—Whether unreliable witness's evidence should be rejected entirely

Tort—Conversion—Whether scripless shares in Singapore could be converted

Tort—Misrepresentation—Fraud and deceit—Whether representee could rely on fact of entering into contract to demonstrate inducement

Restitution—Unjust enrichment—Whether want of authority was recognised unjust factor for purposes of establishing claim in unjust enrichment

The parties to the appeals from Suit No 89 of 2010 (‘Suit 89’) were involved in three transactions for the acquisition of shares in two Indonesian companies, PT Deefu Chemical Indonesia (‘PT Deefu’) and PT Batubaraselaras Sapta (‘PT Batubara’). PT Batubara held a coal mining concession in Indonesia. The first and main transaction involved the sale of 72% of PT Deefu (which owned 95% of PT Batubara) from the plaintiffs collectively to the 11 thdefendant, Antig Investments Pte Ltd (‘Antig’). The other two transactions involved the sale of 5% of PT Batubara and the remaining 28% of PT Deefu (‘the Remaining Shares’) from Tjong Very Sumito (‘Tjong’), the first respondent and one of the three plaintiffs, to the seventh and eighth defendants respectively.

As part of the agreement for the first transaction, a sizeable portion of the purchase price of US$18 m was paid to Aventi Holdings Limited (‘Aventi’) and Overseas Alliance Financial Limited (‘OAFL’) in the form of cash and shares in the Antig's parent company which was listed on the Singapore Stock Exchange. Aventi and OAFL were authorised under the agreement to receive the payments for and on behalf of the plaintiffs. However, the plaintiffs subsequently claimed that Tjong, and not Aventi and OAFL, should receive the full US$18 m. The sale of the Remaining Shares took place shortly thereafter.

In Suit 89, the plaintiffs alleged, inter alia, that Chan Sing En (‘Chan’), the first defendant and appellant in Civil Appeal 83 of 2012 (‘CA 83’), had guaranteed that the plaintiffs, through Tjong, would receive the full US$18 m. Tjong also alleged, inter alia, that Chan had misrepresented to Tjong that he would receive the full US$18 m if he sold his Remaining Shares. As against Alwie Handoyo (‘Alwie’), the fifth defendant and appellant in Civil Appeal No 82 of 2012 (‘CA 82’), the plaintiffs claimed that he was liable to refund the cash and share payments received by OAFL as he was the alter ego of OAFL which was unjustly enriched by the cash payments and had converted the shares which it received from Antig. The High Court judge (‘the Judge’) dismissed most of the plaintiffs' claims. The Judge however found that Chan had guaranteed that the plaintiffs would receive the full US$18 m purchase price, and had induced Tjong into selling his Remaining Shares by misrepresenting to Tjong that he would receive the full US$18 m if he did so. The Judge also found that OAFL was unjustly enriched and had converted the shares. He held that the corporate veil of OAFL should be lifted and consequently, Alwie was personally liable to return the payments received by OAFL from Antig.

In CA 82, Alwie submitted, inter alia, that the unjust enrichment claim should not have been allowed as there was no unjust factor. The conversion claim should also not have been allowed as the shares were not capable of being converted and in any event, the plaintiffs did not have an immediate right of possession to the shares which was required to found an action in conversion. In CA 83, Chan submitted, inter alia, that the guarantee relied by the plaintiffs was fabricated and therefore should not be enforced. Chan also argued that the misrepresentation claim was not established as he had not made the alleged representation and that in any event, Tjong was not induced by it.

Held, allowing CA 82 and CA 83 in part:

(1) The evidence of a witness need not be rejected in toto simply because it was unreliable or untrue in some parts. The court should appraise the witness's entire evidence in the context of all the other evidence and circumstances of the case and separate the grain from the chaff: at [59] to [61] .

(2) The plaintiffs were, on paper, selling their stake in PT Deefu for US$18 m. In reality, the understanding was that Tjong would only receive US$6 m. The remainder would be paid to Aventi and OAFL who were to receive the payments...

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