Bhoomatidevi d/o Kishinchand Chugani v Nantakumar s/o v Ramachandra

• Jurisdiction: Singapore
• Judge: Lee Seiu Kin J
• Judgment Date: 17 February 2023
• Docket Number: Suit 1150 of 2020
• Court: High Court (Singapore)

Bhoomatidevi d/o Kishinchand Chugani Mrs Kavita Gope Mirwani

and

Nantakumar s/o V Ramachandra and another

[2023] SGHC 37

Lee Seiu Kin J

Suit 1150 of 2020

General Division of the High Court

Contract — Contractual terms — Admissibility of evidence — Subsequent conduct — Whether subsequent conduct could be used in contract interpretation to identify proper party to contract

Contract — Formation — Capacity of parties — Plaintiff signing agreement with second defendant — Whether second defendant was proper party to contract based on agreement

Debt and Recovery — Account stated — Action on account stated dependent on existence of underlying contract between parties — Whether second defendant was liable to pay plaintiff on account stated

Evidence — Admissibility of evidence — Similar fact evidence — Use of similar fact evidence to identify proper party to contract — Whether plaintiff could rely on similar fact evidence to show second defendant was proper party to contract — Sections 14 and 15 Evidence Act (Cap 97, 1997 Rev Ed)

Evidence — Admissibility of evidence — Subsequent conduct — Whether subsequent conduct could be used in contract interpretation to identify proper party to contract

Held, allowing the claim against the second defendant and dismissing the claim against the first defendant:

(1) A party who had signed a contract, without any qualification as to the capacity in which the signature was made, would be the proper party to that contract. In cases where there was an inconsistency between the way the contract was signed and the definition of who the parties were in the contract, such inconsistencies could be resolved by looking at the capacity in which the parties had signed the contract. Nantakumar's signature to the agreement carried, with it, a clear qualification that he was not signing it in his personal capacity, but on behalf of Benshaw Commodities. It therefore followed that it was Benshaw Commodities which was the proper party to the contract, and not Nantakumar: at [28] and [29].

(2) There appeared to be two distinct lines of cases in so far as the use of subsequent conduct as an aid to contract interpretation was concerned. The first line of cases took the view that the admissibility and relevance of subsequent conduct in interpreting contracts had not received detailed scrutiny and so the position on that point was still very much open. The second line of cases, however, had gone ahead to consider whether the subsequent conduct of parties shed light on the intention of parties at the time the contract was concluded. Examining the authorities, it was apparent that while there was no bar against the use of evidence of subsequent conduct in contractual interpretation, any use of such evidence had to be undertaken in a circumspect manner such that the text of the contract remained paramount: at [38] and [39].

(3) Leaving aside questions pertaining to the admissibility of the subsequent conduct of parties, the subsequent conduct of parties in this case should not be relied on in interpreting the agreement to ascertain who the proper parties were in the present case. First, as a matter of logic, it was more difficult to infer the occurrence of a fact prior in time from subsequent conduct. Second, the danger of using subsequent conduct in the present case was that such evidence could be shaped to suit each party's position ex post facto, and in a manner which ran contrary to what the contractual documents had actually provided for. In any case, the subsequent conduct which Mrs Kavita relied on to show that it was Nantakumar who was the proper party to the agreement was not particularly relevant in ascertaining the objective intentions of parties at the time of contract formation: at [41] to [48].

(4) Mrs Kavita had also attempted to rely on similar fact evidence to show that it was Nantakumar who was the proper party to the agreement. She pointed to proceedings which one Samy had commenced against Nantakumar for breach of a loan agreement, which was similar to the agreement in the present case. Evidence of how Nantakumar had contracted with Samy, however, was inadmissible under s 14 of the Evidence Act (Cap 97, 1997 Rev Ed) for the purpose of proving that the objective intentions of parties were that the contract was formed as between Mrs Kavita and Nantakumar. Such evidence, without more, was not necessarily indicative of the objective intentions of Mrs Kavita and Nantakumar in the present case. Even if such evidence were admissible, it would not be accorded much weight, especially in light of the documentary evidence: at [49] to [57].

(5) An action on an account stated was used to circumvent obstacles which stood in the way of otherwise meritorious claims. For example, one might sue for a breach of contract, and to that cause of action, also add an action on an account stated in the event that one's claim in contract failed on some technicality. In other words, there had to first be an underlying contract between the parties before an action on an account could be brought. Given the finding that there was no contract as between Mrs Kavita and Nantakumar, Mrs Kavita's claim on an account stated failed: at [63] and [66].

(6) Mrs Kavita had not discharged her burden of showing that Benshaw Commodities' corporate veil should be pierced so as to hold Nantakumar liable. She had argued that the corporate veil in this case should be lifted, relying on the ground of “sham or façade”. Her case was that Nantakumar had withdrawn the money she had loaned to Benshaw Commodities, and transferred it to himself, as well as his family members and friends. The available evidence however, in the form of bank statements, merely showed how the money had been spent, and that cash withdrawals had been made. It did not show that the case had indeed been transferred to Nantakumar's friends and family members. On the contrary, the evidence suggested that it was more likely than not that the cash withdrawals had been made for the purposes of running the sand business: at [67] to [84].

Case(s) referred to

Alwie Handoyo v Tjong Very Sumito [2013] 4 SLR 308 (refd)

Badgerhill Properties Ltd v Cottrell [1991] BCLC 805 (refd)

Centre for Laser and Aesthetic Medicine Pte Ltd v GPK Clinic (Orchard) Pte Ltd [2018] 1 SLR 180 (refd)

Children's Media Ltd v Singapore Tourism Board [2009] 1 SLR(R) 524; [2009] 1 SLR 524, CA (refd)

Cooke v Wilson (1856) 1 CB (NS) 153 (refd)

Diane Lumley v Foster & Co Group Ltd [2022] EWHC 54 (TCC) (refd)

Fico Sports Inc Pte Ltd v Thong Hup Gardens Pte Ltd [2010] SGHC 237 (refd)

Frost Express, The [1996] 2 Lloyd's Rep 375 (refd)

Gerish v Chartier [1845] 135 ER 439 (refd)

Goh Guan Chong v AspenTech Inc [2009] 3 SLR(R) 590; [2009] 3 SLR 590 (refd)

Gregor Fisken Ltd v Bernard Carl [2021] EWCA Civ 792 (folld)

H O Brandt & Co v HN Morris & Co Ltd [1917] 2 KB 784 (refd)

Hamid v Francis Bradshaw Partnership [2013] EWCA Civ 470 (refd)

Hewlett-Packard Singapore (Sales) Pte Ltd v Chin Shu Hwa Corinna [2016] 2 SLR 1083 (refd)

Hin Hup Bus Service v Tay Chwee Hiang [2006] 4 SLR(R) 723; [2006] 4 SLR 723 (refd)

HSBC Trustee (Singapore) Ltd v Lucky Realty Co Pte Ltd [2015] 3 SLR 885 (refd)

Internaut Shipping GmbH v Fercometal SARL [2003] EWCA Civ 812 (refd)

Knowles v Michel (1811) 13 East 249 (refd)

Lian Hwee Choo Phebe v Maxz Universal Development Group Pte Ltd [2008] 4 SLR(R) 265; [2008] 4 SLR 265 (refd)

Marina Towage Pte Ltd v Chin Kwek Chong [2021] SGHC(A) 24 (refd)

Marina Towage Pte Ltd v Chin Kwek Chong [2021] SGHC 81 (refd)

MCH International Pte Ltd v YG Group Pte Ltd [2019] 2 SLR 837 (refd)

Mohamed Shiyam v Tuff Offshore Engineering Services Pte Ltd [2021] 5 SLR 188 (refd)

Multi-Link Leisure Developments Ltd v North Lanarkshire Council [2011] 1 All ER 175 (refd)

Nai Yau Juu v Pasdec Corp Sdn Bhd [2005] 3 MLJ 431 (refd)

Ngee Ann Development Pte Ltd v Takashimaya Singapore Ltd [2017] 2 SLR 627 (refd)

Paice v Walker (1870) LR 5 Ex 173 (refd)

Parker v Winlow (1857) 7 E & B 942; 119 ER 1497 (refd)

Rockline Ltd v Anil Thadani [2009] SGHC 209 (refd)

Salomon v A Salomon & Co Ltd [1897] AC 22 (refd)

Simgood Pte Ltd v MLC Shipbuilding Sdn Bhd [2016] 1 SLR 1129 (refd)

Simpson Marine (SEA) Pte Ltd v Jiacipto Jiaravanon [2019] 1 SLR 696 (refd)

Singapore Tourism Board v Children's Media Ltd [2008] 3 SLR(R) 981; [2008] 3 SLR 981, HC (refd)

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Tanner v Christian (1855) 4 E & B 591 (refd)

Universal Steam Navigation Co Ltd v James McKelvie & Co [1923] AC 492 (refd)

Viet Hai Petroleum Corp v Ng Jun Quan [2016] 3 SLR 887 (refd)

Win Line (UK) Ltd v Masterpart (Singapore) Pte Ltd [1999] 2 SLR(R) 24; [2000] 2 SLR 98 (refd)

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Yukong Line Ltd of Korea v Rendsburg Investments Corp of Liberia (No 2) [1998] 1 Lloyd's Rep 322 (refd)

Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029; [2008] 3 SLR 1029 (folld)

Facts

The first defendant (“Nantakumar”) was a director of the second defendant (“Benshaw Commodities”). Nantakumar convinced the plaintiff (“Mrs Kavita”) to extend loans totalling some $350,000. In return, Mrs Kavitha was promised that she would be paid $51,000 as interest on the loan. But Mrs Kavita was not paid the interest which was promised, nor was her initial capital repaid.

Mrs Kavita brought the present suit against Nantakumar and Benshaw Commodities. She alleged that there was an agreement between her and Nantakumar in respect of the loans which she had made, and that Nantakumar was thus liable for the sum of $401,000, being her capital of $350,000 as well as the promised interest of $51,000. In the alternative, Mrs Kavita claimed that Nantakumar was liable for this sum of $401,000 on an account stated. Finally, in the event that it was Benshaw Commodities, and not...