Hong Leong Finance Limited v Cycle and Carriage Motor Dealer Pte Ltd

• Jurisdiction: Singapore
• Judge: Valerie Thean Pik Yuen
• Judgment Date: 03 May 2004
• Neutral Citation: [2004] SGDC 105
• Court: District Court (Singapore)
• Year: 2004
• Published date: 13 May 2004
• Plaintiff Counsel: Mr Phua Siow Choon (Michael BB Ong and Co)
• Defendant Counsel: Mr Adrian Ee (Ramdas and Wong)
• Subject Matter: Tort,Conversion,Whether the PARF certificate constitute a chattel.
• Citation: [2004] SGDC 105

3 May 2004

District Judge Valerie Thean:

1 The plaintiffs are a hire purchase company, the defendants a dealer in motor cars. In this action, the plaintiffs claim damages from the defendants for the conversion of a Preferential Additional Registration Fee ('PARF') certificate.

Facts

2 The facts giving rise to the claim were these. On 15 September 2000, the plaintiffs purchased a vehicle, SCK 8028 A, and entered into a hire purchase agreement with one Ang Eng Hian ('Ang') in the amount of $110,000. The plaintiffs retained the motor vehicle log card and Certificate of Entitlement ('COE'). Through intervening fraud, the vehicle was deregistered on 18 October 2000 and shipped to East Timor thereafter. The Land Transport Authority ('LTA') duly issued the PARF certificate for the de-registration of the vehicle, having a rebate value of $92,710, on 18 October 2000. On the same date, one Huang Wei Duan trading as E-Type Motoring sold the PARF certificate to the defendants for the sum of $92,710. The defendants thereafter used the PARF certificate for the registration of a vehicle purchased by Starwood Asia Pacific Management Pte Ltd, to offset the Additional Registration Fee, Quota Premium and Registration fee for the second vehicle. The defendants were unaware of the existence of the hire purchase agreement or any of the circumstances leading to the de-registration of the vehicle or that the vehicle was de-registered without the knowledge and consent of the plaintiffs.

Action for money had and received

3 The plaintiffs advanced an alternate claim for money had and received, as they were the beneficial owners of the PARF certificate. As it was conceded that the defendants were bona fide purchasers of the PARF certificate for good consideration, this claim in equity would have been overreached. A common law proprietary claim to the certificate would be necessary if the plaintiffs wished to claim redress from the defendants. This cause of action was not seriously pursued by Mr Phua.

Action in conversion

4 The plaintiffs rely on the form of conversion summarised in 45 Halsbury's Laws of England (4^th Ed) para 1422 (and referred to in UCO Bank (formerly known as United Commercial Bank) v Ringler Pte Ltd [1995] 1 SLR 713) as follows:

To constitute the first form (of conversion) there must be a positive wrongful act of dealing with the goods in a manner inconsistent with the owner's rights, and an intention in so doing to deny the owner's rights or to assert a right inconsistent with them. This inconsistency is the gist of the action. There need not be any knowledge on the part of the person sued that the goods belong to someone else; nor need there by any positive intention to challenge the true owner's rights. The action is not one in which fraud is a necessary ingredient. Goods may be the subject of successive and independent conversions by persons dealing with them in such a manner and with such an intention.

5 The defendants advanced three arguments: that the PARF certificate was not a chattel capable of conversion; there was no wrongful appropriation; and that the plaintiffs had no immediate right to possession.

Is a PARF certificate capable of conversion?

6 Some arguments were made by counsel as to whether a PARF certificate was a chattel, on the basis that choses in action could not be converted. It is settled law however, that physical documents evidencing choses in action may be converted, and where converted the person entitled would recover damages based on their value as choses in action. Cheques, for example, have been held to be capable of conversion: see Kleinwort, Sons & Co v Comptoir National D'escompte de Paris (1894) 2 QB 157, Lloyds Bank, Ltd v Chartered Bank of India, Australia and China (1929) 1 KB 40. On the same premise, a PARF certificate would be a chattel capable of conversion, and the value of it would be the face value of the certificate.

Whether there was wrongful appropriation

7 There was also some argument that the defendants had no knowledge of the intervening fraud, and were bona fide purchasers for value. As made clear in the extract from Halsbury's, for the tort of conversion, knowledge on the part of the defendants is immaterial. Dealing with the goods in a manner inconsistent with the owner's rights, and an intention in so doing to assert rights inconsistent with the owner's, is sufficient.

Whether the plaintiffs had...