Gobind Lalwani v Basco Enterprises Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 30 December 1998
• Date: 30 December 1998
• Docket Number: Suit No 349 of 1997
• Court: High Court (Singapore)

Gobind Lalwani

Plaintiff

and

Basco Enterprises Pte Ltd

Defendant

[1998] SGHC 424

Chao Hick Tin J

Suit No 349 of 1997

High Court

Debt and Recovery—Account stated—Acknowledgment of account—Whether creditor required to communicate acceptance of acknowledgement to debtor—When confirmation by creditor required—Time for repayment not stated—When liability to pay arising

The plaintiff, Gobind Lalwani (“GL”), claimed a sum of money was owed by the defendant Basco Enterprises Pte Ltd (“Basco”) on an account stated by way of letter dated 28 February 1994. Basco elected to submit there was no case to answer on the grounds that (a) GL never agreed to the account, not having made the appropriate deletion on the confirmation portion of the letter and (b) even if the amount was owed, it was not due and payable.

Held, allowing the claim:

(1) For an account to be brought, all that was required was an absolute acknowledgment of a debt. The creditor was not required to communicate his acceptance of that acknowledgment to the debtor: at [10].

(2) The letter of 28 February 1994, which stated that Basco’s records showed the amount of money was due to GL, was an unequivocal statement of a debt owed by Basco to GL. GL’s confirmation was only required for audit purposes. By signing and saying nothing more the inevitable inference was that GL accepted the balance as stated: at [13] and [14].

(3) In the absence of any special contractual arrangement, a creditor was entitled to demand payment at any time by giving reasonable notice. If there was no stipulation as to the time for repayment, the liability to pay arose without the need for making any request or demand: at [16].

(4) It did not matter that GL could not show how the amount of the debt was arrived at, this being an action on an account stated. Upon production of the audit confirmation letter, the burden of disproving its contents shifted to Bosco. This burden was not discharged as Bosco elected not to adduce evidence and to submit that there was no case to answer: at [24] and [25].

Camillo Tank SS Co Ltd v Alexandria Engineering Works (1921) 38 TLR 134 (refd)

Chee Bay Hoon v Tan Chong & Sons Motor Co Ltd [1968] 1 MLJ 167 (distd)

Cocking v Ward (1845) 1 CB 858; 135 ER 781 (refd)

Fidgett v Penny (1834) 1 Cr M & R 108; 149 ER 1014 (refd)

George, In re;Francis v Bruce (1890) 44 Ch D 627 (folld)

Ice-Mack Pte Ltd, Re [1989] 2 SLR (R) 283; [1989] SLR 876 (distd)

Irving v Veitch (1837) 3 M & W 90; 150 ER 1069 (folld)

Knowles v Michel (1811) 13 East 249; 104 ER 366 (refd)

Norton v Ellam (1837) 2 M & W 461; 150 ER 839 (folld)

Siqueira v Noronha [1943] AC 332 (refd)

Statute of Frauds 1677 (c 3) (UK)

Arjan Chotrani (Arjan & Co) for the plaintiff

Manjit Singh and Samuel Chacko (Manjit Samuel & Partners) for the defendant.

Judgment reserved.

Chao Hick Tin J

1 This is an action by the plaintiff to claim for a sum of $313,996.36 owed by the defendant company (“Basco”) on an account stated. At the close of the plaintiff’s case Basco elected to submit that there is no case to answer. The consequences of such an election were explained to Basco and its counsel, who affirmed Basco’s wish to adopt this course. Basco confirmed that it understood it would not be allowed to adduce any evidence upon the ruling of this court.

Nature of claim

2 The statement of claim is very brief and I shall set it out in full:

1. 1 In an account stated by a letter dated 28 February 1994 and signed by one Mr Moti Lalwani being at all material times a director and the duly authorized agent of the defendant the sum of $313,996.36 was found to be due from the defendants to the plaintiff.

2. 2 The defendant has failed and refused to pay the plaintiff the said sum of $313,996.36 which remains due and owing by it to the plaintiff.

3 Basco is a company incorporated in 1963 and the plaintiff is a shareholder thereof. For a period, the plaintiff was a director of Basco but he resigned in 1989/1990. From the statement of claim, it is clear that this is not a claim in respect of the underlying debts in relation to which the account was stated. An account stated creates an independent obligation though it does not or in any way extinguish or supersede the original debts: Fidgett v Penny (1834) 1 Cr M & R 108; 149 ER 1014.

4 The basis of the claim is the letter of 28 February 1994. As the letter is crucial to the claim, I now reproduce it in full. It was addressed to the plaintiff and signed by one Moti Lalwani, a director of Basco:

Dear Sirs,

As at 31.12.93 our records show that the balances of your accounts with us were as follows:

Due to us …

Due to you … $313,996.36

Deposits held by you …

Deposits held by us …

For audit purposes, we would appreciate if you would sign and return this letter in the enclosed envelope direct to our auditors, Robert Tan & Co, 87 Club Street, Singapore 0106. However, if you are unable to agree to the above balances, please provide full details of the difference on the reverse of this letter and return same to our auditors.

Please note that this is NOT a request for payment. You may since have settled your accounts but the confirmation is still required for our audit purposes.

Thank you for your co-operation in this matter.

Your faithfully

Signed

5 At the...