Convergent Systems (S) Pte Ltd and Others v Taiyotech (S) Pte Ltd and Others

• Judge: Choo Han Teck JC
• Judgment Date: 04 November 1998
• Neutral Citation: [1998] SGHC 362
• Citation: [1998] SGHC 362
• Defendant Counsel: Bernard Chao Wee Chun (Chung Tan & Partners)
• Subject Matter: Evidence,Bills of Exchange and Other Negotiable Instruments,Importance of putting case to witness,Fraud,Payment by dishonoured cheques,Intention to deceive,Witnesses,Burden of proof,Effect of omission,Cheques
• Plaintiff Counsel: Kok Mun Loon and Jill Tan Li Ching (Engelin Teh & Young)
• Published date: 19 September 2003
• Court: High Court (Singapore)

: The first defendant was a company incorporated in 1994 and carried on the business, inter alia, of selling computer products and the maintenance and repair of computer hardware in premises at [num ]06-19 and [num ]06-53 Sim Lim Square. The second defendant is 30 years old and is a shareholder and director of the first defendant. The third defendant aged 26, is his wife. She is also a shareholder and director of the first defendant. Prior to the incorporation of the first defendant in July 1994 the second and third defendants carried on the business as a partnership from 1991.

The 13 plaintiffs are also in the business of selling computer products. All but three of them carry on business in their shops at Sim Lim Square. The 13 plaintiffs had been selling computer products to the first defendant for various lengths of time. Some of them had been doing business with the first defendant since 1994 and some from 1997. All their witnesses testified that they had no problems with payment from the first defendant until the period in question, namely, November 1997 to February 1998.

This action was brought by the plaintiffs against the defendants because the first defendant failed to make payment for some purchases made by it from the plaintiffs. Counsel for the plaintiffs presented the plaintiffs` case as follows. During the period between November 1997 and February 1998 the plaintiffs delivered goods to the first defendant at the request of the second and third defendants, both of whom knew or ought to have known that the first defendant had insufficient money to pay for them. Furthermore, cheques issued by the first defendant in payment of some of the goods were dishonoured either because of insufficient funds or payment was stopped by the second or third defendants. By reason of these facts, the plaintiffs sued the defendants on the dishonoured cheques, and against the second and third defendants for fraud. The particulars of fraud lie in the allegation that the second and third defendants purchased and took delivery of goods when they knew or ought to have known that the first defendant had insufficient funds in its bank accounts, and by the purported payment through cheques which were dishonoured.

The second and third defendants deny the allegation of fraud and say that they purchased the goods in the normal course of business and were given the usual credit by the plaintiffs. In some cases, they had 30 days credit, in others, 45 or 60 days. They only had difficulty making payments during the period from November 1997 to February 1998 for two reasons. First, a printed note, which was circulated throughout Sim Lim Square, alleged that the first defendant was among a list of companies which were having financial problems and cannot pay their debts. This precipitated many suppliers to hurry them for payment. It mattered not that one or two of the plaintiffs were themselves named in the circulated list. It may well be that the others who were not named started the rush for payment. The second defendant testified that sometime in December 1997 when perusing his computer records he noted that there was a total of $440,000 due from his customers. The total which the plaintiffs obtained judgment in default against the first defendant was $357,954.72, less than the first defendant`s total assets...