Bayerische Landesbank Girozentrale v Khaw Hock Seang

CourtHigh Court (Singapore)
JudgeTan Lee Meng J
Judgment Date28 February 2003
Neutral Citation[2003] SGHC 42
Citation[2003] SGHC 42
Published date07 October 2003
Plaintiff CounselRebecca Chew and Poh Yan Fen (Rajah & Tann)
Defendant CounselEdwin Tay and Xhuanelado Owen (Edwin Tay & Co)
Subject MatterCredit and Security,Guarantees and indemnities,Whether defendant signed the guarantee that plaintiff was trying to enforce.

1. The plaintiffs, Bayerische Landesbank Gironzentrale (“BLG”), a bank, instituted legal proceedings against the defendant, Mr Khaw Hock Seang (“Khaw”), to enforce their rights under a guarantee allegedly signed by the latter to secure a loan given by the bank to South Development Ltd (“SDL”). Khaw denied having signed the guarantee and pleaded in the alternative that the guarantee was signed on the basis of representations by the bank’s staff that it will not be stamped or enforced until the securities required by the bank had been handed over.

Background

2. Khaw, a Malaysian businessman, is a director and the sole shareholder of SDL. In a letter dated 19 May 1997, BLG granted SDL a multi-currency revolving credit facility of MYR14.5m, which was to be secured by, among other things, the following:

(a) a first party charge over deposits and credit balances to be executed by the Borrower;

(b) a security agreement relating to shares and other securities to be executed; and

(c) Khaw’s personal guarantee.

3. Khaw accepted the bank’s offer on behalf of SDL, which authorised him to operate the account. BLG asserted that Khaw executed the guarantee that he was required to furnish in late May 1997. This guarantee required Khaw to pay BLG on demand all moneys owing by SDL, including interest, and costs and expenses incurred by BLG to enforce its terms.

4. Khaw utilised the credit facility granted to SDL to invest in various share counters on the Malaysian Stock Exchange. Unfortunately, massive losses were suffered and when SDL failed to make the necessary payments to the bank, the credit facility in question was withdrawn. Relying on Khaw’s guarantee, BLG’s solicitors sent a letter of demand to him by AR registered post on 24 July 2001. In the letter, BLG demanded the payment of USD5,479,653.10, the amount outstanding as at 2 July 2001 under the credit facility granted to SDL, together with interest and bank charges from and including 3 July 2001 until the date of full payment.

5. Khaw had discussions with BLG’s staff with respect to the settlement of SDL’s losses. He was also appointed the spokesman of a group of BLG’s other Malaysian clients, who owed the bank money after suffering similar losses in stocks and shares, to negotiate a deal with the bank. However, the massive debt incurred by SDL was not settled. As such, BLG instituted legal proceedings against Khaw to enforce the guarantee.

Withdrawal of Khaw’s alternative defence

6. On the first day of the trial, Khaw abandoned his alternative defence that BLG’s staff had represented to him that the guarantee will not be stamped and acted upon until all the requisite securities required by the bank had been handed over. When cross-examined, Khaw admitted that no one in the bank made the said representations to him. He said that the representations had been made to his colleague. No light was shed on what role this colleague played in relation to SDL’s account. This prompted BLG’s counsel, Ms Rebecca Chew, to submit that Khaw lied when he asserted in his defence and affidavit of evidence-in-chief that the said representations were made by the bank’s staff to him.

Whether Khaw signed the guarantee

7. With the withdrawal of Khaw’s alternative defence, the only issue to be resolved was whether or not he signed the guarantee in question. For this purpose, it is pertinent to note that Phipson on Evidence, 15th ed, states as follows at pp 1072-1073:

The handwriting and signature of unattested documents, or of documents which, though attested, are not required by law to be so, may be proved (1) by calling the writer; or (2) by calling a witness who saw the document signed; or (3) by...

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1 cases
  • The Bank of East Asia Limited v Sudha Natrajan
    • Singapore
    • High Court (Singapore)
    • 24 December 2015
    ...Indian Overseas Bank and another appeal [1997] 2 SLR(R) 774 (“Yogambikai”) (see also Bayerische Landesbank Girozentrale v Khaw Hock Seang [2003] SGHC 42 at [14] applying Yogambikai). The Court of Appeal in R Mahendran and another v R Arumuganathan [1999] 2 SLR(R) 166 stated the approach to ......

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