Ang Sin Hock v Khoo Eng Lim and Another (Ajit Singh Hazara Singh, Third Party)

• Judge: Judith Prakash J
• Judgment Date: 07 August 2009
• Neutral Citation: [2009] SGHC 179
• Citation: [2009] SGHC 179
• Defendant Counsel: Michael Loh (Clifford Law Corporation)
• Published date: 18 August 2009
• Plaintiff Counsel: A Rajandran (A Rajandran)
• Date: 07 August 2009
• Docket Number: Suit No 236 of 2006
• Court: High Court (Singapore)
• Subject Matter: Deceit,Limitation of Actions,Conversion,Sections 6(1), 26(2) and 29 Limitation Act (Cap 163, 1996 Rev Ed),Tort,Fraudulent Misrepresentation

7 August 2009 Judgment reserved.

Judith Prakash J:

Introduction

1 This action arises out of a jewellery transaction in 1999 that went wrong. The plaintiff, Ang Sin Hock (“Mr Ang”), handed over a parcel of gemset jewellery (“the jewellery”) to the second defendant, Ajit Singh Hazara Singh (“Mr Singh”), in the presence of the first defendant, Khoo Eng Lim (“Mr Khoo”). By this suit he claimed from the defendants the sum of $270,725 in respect of the jewellery or, in the alternative, damages to be assessed for the loss of the jewellery. This judgment deals with the position of Mr Khoo only as judgment has already been entered against Mr Singh.

2 Mr Ang founds his claim on a number of causes of action:

(a) he claims in conversion on the basis that the jewellery was entrusted to the defendants for the purpose of sale overseas but was subsequently misappropriated by them;

(b) he claims on the basis of the tort of deceit on account of various fraudulent misrepresentations allegedly made by the defendants; and

(c) he claims on the basis of an undertaking given by the defendants on 6 January 2000.

3 From the beginning, Mr Khoo contested the claim vigorously. He raised the following main defences to the claim:

(a) that Mr Ang’s dealings had been solely with Mr Singh as principal and Mr Khoo had acted only as a facilitator or broker and was not responsible for the actions of Mr Singh;

(b) Mr Ang had entrusted the jewellery for sale to Mr Singh solely and Mr Khoo had never had physical possession of the jewellery or any responsibility therefor;

(c) the misappropriation of the jewellery, if any, was caused solely and entirely by Mr Singh and Mr Khoo had simply tried to help the plaintiff to recover the proceeds of sale of the jewellery;

(d) he had not made any fraudulent representations to Mr Ang and, in any event, any loss suffered by Mr Ang arose from the misappropriation of the jewellery by Mr Singh and not from any misrepresentations made by Mr Khoo;

(e) he had not conspired with Mr Singh in any way and could not be responsible for Mr Singh’s actions;

(f) the claim under the undertaking was time barred under the Limitation Act (Cap 163, 1996 Rev Ed) (“the Act”) in that the alleged cause of action first accrued to the plaintiff on 1 March 2000, a date falling more than six years before the commencement of the action on 17 April 2006; and

(g) any cause of action based on fraud first accrued on 21 July 1999 or at the latest by 3 January 2000, more than six years before the commencement of the action and was therefore time barred.

4 Mr Singh took very little part in the litigation. In July 2001, he had been arrested and charged under s 403 of the Penal Code (Cap 224, 2008 Rev Ed) with an offence of dishonest misappropriation of the jewellery. Although he had initially claimed trial, on 25 September 2001, the first day of the trial, he pleaded guilty and in October 2001, he was sentenced to imprisonment for a term of 15 months. When the plaintiff served him with the writ in this action, Mr Singh did not enter an appearance. He turned up in court on the first day of the trial and informed the court that he was not contesting the claim. Subsequently, on 26 November 2008, after Mr Singh had been served with an amended statement of claim, the plaintiff applied for judgment to be entered against him. Mr Singh was asked whether he wished to defend and his reply was that he did not since he accepted the decision of court because he was guilty and he would rather save everyone’s time. Judgment was therefore entered against Mr Singh in the sum of $270,725 and interest at 12% p.a from 16 August 1999 until payment and costs as taxed or agreed. Mr Singh thereafter gave evidence in support of Mr Khoo.

The plaintiff’s story

5 To give a flavour of the case and the various positions taken by the plaintiff, it is necessary for me to summarise the evidence given by Mr Ang himself.

6 Mr Ang’s affidavit started off with a summary of his claim against the defendants. He said in essence:

(a) that he had entrusted the jewellery to both the defendants for sale, relying on representations made by them that they would sell the jewellery to an overseas buyer and would remit his share of the sale proceeds to him; and

(b) Mr Ang’s share of the sale proceeds would be the cost price of the jewellery which was agreed at $270,725 and a one third share of the profits from the sale proceeds. The defendants were to share the remaining two-thirds of the sale proceeds equally between them.

Mr Ang asserted that what I have set out in [6(a) and (b)] above was the agreement that was envisaged between the parties at all material times.

7 Mr Ang stated also that the defendants had made various representations to him:

(a) before he entrusted the jewellery collection to them, they had represented to him that they would procure an overseas buyer for the collection and that the proceeds would be shared with him and these representations were made to induce him to participate in the venture;

(b) after he entrusted them with the jewellery, the defendants made various representations regarding the sale to a “buyer”, the price negotiated and agreed with the “buyer”, the arrangements as regards payment by the “buyer” to the defendants, the receipt of the moneys by the defendants from the “buyer” and the remittance of the moneys or Mr Ang’s share thereof to him; and

(c) even after he had lodged a police report against the defendants and also after Mr Singh was charged in court, representations had been made to him that the jewellery had been sold and that his share would still be remitted to him.

8 Going into the history behind the transaction, Mr Ang explained that in 1986, he was posted by his then employer to India and while living in India he became knowledgeable about the gemstone and gemset jewellery trade. Subsequently, he registered a business named REDS Gemstones and Fine Jewelry (“REDS”) to deal in jewellery. His wife, Mdm Oh Poh Suan, was registered as the sole proprietor of REDS but she was acting as his nominee since he was still in paid employment. Mr Ang himself began to purchase and collect gemset jewellery with the intention of trading in it through REDS and, at all times, he was the de facto owner and controller of the business. By January 1999, Mr Ang had a significant collection of gemset jewellery comprising precious and semi-precious stones set in gold in rings, bracelets, necklaces, earrings and pendants.

9 Mr Ang and Mr Khoo first came to know each other in 1984 when they were working in the Trade Development Board. They became friendly and this friendship continued for several years thereafter. In August 1998, Mr Ang met Mr Khoo by chance in Chinatown. They renewed their friendship and decided to start a new entity dealing in jewellery. The business name chosen was “Delta Jewellery”. At that time Mr Khoo had a business dealing in commodities under the name “Delta-T & Associates”. By then, Mr Ang’s business included not only procuring suppliers to manufacture and supply gemstones and gemset jewellery to REDS but also to find buyers for the same. He and Mr Khoo agreed that the “concept” of Delta Jewellery would be to procure jewellery from India and thereafter conduct “finishing” work on the jewellery so as to enhance its value and obtain accreditation from the Productivity and Standards Board so that the jewellery could be exported to overseas markets certified as having originated from Singapore.

10 On 15 January 1999, Mr Ang met Mr Singh for the first time. Mr Khoo introduced the two men. He told Mr Ang that he and Mr Singh had been in partnership for a year before January 1999 and that they were in business as traders of gemstones and precious metals among other activities. Mr Khoo mentioned that he had recently visited London and Phuket with Mr Singh and that Mr Singh had introduced him in London to people connected with the renowned jewellers Van Cleef & Arpels. Mr Ang was also told that Mr Singh and Mr Khoo were hoping to acquire a jewellery manufacturing factory in Phuket. Mr Ang learnt that Mr Khoo was the godfather of Mr Singh’s child. It was apparent to him that Mr Khoo and Mr Singh knew each other well.

11 The 15 January meeting took place in a coffee shop. During the meeting, Mr Khoo proposed that he and Mr Singh would procure overseas buyers for Mr Ang’s jewellery and that the proceeds of sale would be divided among the three men. They also had discussions about dealings in emeralds and other gemstones. In relation to the jewellery collection, the defendants asked to see the collection and a meeting was scheduled for the next day (16 January 1999) for that purpose. Mr Singh informed the others that the sale of the jewellery, including any processing (cleaning and polishing) work that needed to be done, would be finalised by end February 1999 and Mr Ang’s share of the sale proceeds would be remitted to him at about the same time.

12 The next day, Mr Khoo met Mr Ang at the latter’s home and took him to the bank to retrieve the jewellery from the safe deposit box and from there both men went to Mr Singh’s residence in Bukit Batok. Mr Ang handed over the jewellery to the defendants in Mr Singh’s flat. The defendants intended to catalogue the items for the purpose of preparing the packing list required for the export of the jewellery. They impressed on Mr Ang again that they were experienced dealers in gemstones and the jewellery trade and had various contacts and potential buyers overseas. Mr Ang said that he trusted Mr Khoo totally because he considered Mr Khoo to be a friend and they had known each other for some time. Mr Ang relied on the defendants’ representations and entrusted the jewellery to them on the basis that they would procure buyers for the same and thereafter remit his share of the sale proceeds to him.

13 On 26 January 1999, Mr Ang prepared a consignment note on the REDS letterhead confirming...