Kalki Jewellery (suing as a firm) v Mani Samikkannu

• Jurisdiction: Singapore
• Judge: S Rajendran J
• Judgment Date: 28 May 1999
• Neutral Citation: [1999] SGHC 145
• Docket Number: Suit No 304 of 1998
• Date: 28 May 1999
• Year: 1999
• Published date: 19 September 2003
• Plaintiff Counsel: B Rengarajoo (B Rengarajoo & Associates)
• Citation: [1999] SGHC 145
• Defendant Counsel: Ramalingam Kasi (Raj Kumar & Rama) and M Ravi (Naranjan & Co)
• Court: High Court (Singapore)
• Subject Matter: Duties of holder,Whether defendant merely fronting for plaintiffs in return for commission,Evidence,Action for price of goods sold and delivered by plaintiffs to defendant,s 67(1)(c) Evidence Act (Cap 97, 1997 Rev Ed),s 59(3) Bills of Exchange Act (Cap 23, 1999 Rev Ed),Whether photocopies of thermal copies of faxes admissible,Discharge of accommodation bill as a result of payment by accommodated party,Whether plaintiffs holder in due course,Admissibility of evidence,s 29 Bills of Exchange Act (Cap 23, 1999 Rev Ed),Bills of Exchange and Other Negotiable Instruments,Liability of accommodation party,Commercial Transactions,Sale of goods,Bills of exchange,Secondary evidence,Accommodation bill,Whether bill subject to defects of title and personal defences,Legal proceedings

: The plaintiffs are a firm of jewellery traders based in Trichirapalli, India. The principal witness for the plaintiffs, Kalai Ramakrishnan (`KR`) was the managing partner of the plaintiff firm. The defendant, Mani Samikkannu (`Mani`) is a Singapore businessman whose principal business was the import of computers and computer peripherals for sale in Singapore and for re-export in this region.

The plaintiffs alleged that on 28 January 1997 Mani had issued a standing order to them to deliver to him 5 to 10 kg of jewellery every 30 to 45 days. It was the plaintiffs` case that, pursuant thereto, the plaintiffs delivered three consignments of jewellery to Mani. Except for two payments totalling US$27,985, Mani failed to pay for the goods. Details of these consignments/payments were as follows:

					Gross Weight
Consignment	Value		As per	Amount Paid
	Date	(US$)		Packing List	(US$)	Balance
1	22.4.97	72,335		6,174.85	20,000 (15.10.97)	44,350
					7,985 (23.1.98)
2	30.4.97	51,082		4,404.53	-	51,082
				10,579.38
3	05.6.97	123,440		10,721.47	-	123,440
				21,300.85		218,852

The plaintiffs in these proceedings are claiming for the balance of the purchase price amounting to US$218,852 and interest thereon at 20% per annum.

In respect of each of the three consignments the plaintiffs had, together with the shipping documents, forwarded to the Singapore branch of the Indian Bank, a bill of exchange for the invoice amount payable within 120 days of acceptance to the City Union Bank at Trichirapalli, India, the bankers of the plaintiffs. Mani had accepted these bills and the plaintiffs had discounted them with City Union Bank. However, when Mani failed to honour the bills, the plaintiffs paid the amount outstanding with interest at 20% per annum to City Union Bank and the bills were returned to the plaintiffs. The plaintiffs` alternative claim against Mani in these proceedings was for payment under these three bills. Initially, the plaintiffs had claimed as drawers of the bills but in the course of the hearing they amended their pleading to claim as holders.

Evidence was led that, prior to these three consignments, the plaintiffs had between June 1996 and January 1997 sent six other consignments to Mani on similar terms. Full payment for these six consignments had been received by the plaintiffs, although some of these payments were effected well outside the credit period stipulated.

The defence raised by Mani was that the purported purchases by him of the jewellery were not genuine purchases by him - he had merely lent his name, for a commission, to the plaintiffs to enable the plaintiffs to import and sell their goods in Singapore - and for that reason was not liable to the plaintiffs for the price of the goods or under the bill. Mani claimed that KR, having sent the goods from Trichirapalli to Singapore, would, for every consignment, come personally to Singapore, take control of the consignment and handle the sales to the plaintiffs` customers in Singapore and Malaysia. At KR`s request Mani would, whenever requested, issue invoices from Tradeworld Resources & Services in respect of sales made by KR. KR would, periodically, hand the proceeds of sale (cheque or cash) to Mani. Mani would deduct his expenses and his commission, of $2 per gramme of jewellery imported, from the amounts handed to him by KR and make payments as directed by KR including remittances to Trichirapalli in satisfaction of the bills of exchange he had accepted. That was how payment of the bills of exchange in respect of the first six consignments and part-payment of the seventh consignment (the first of the three consignments under this claim) came to be made. Mani claimed that it was because KR had not given him sufficient funds that the last three bills of exchange remained outstanding.

Mani also claimed that, as part of his arrangement with KR, he had signed various orders and letters that KR requested him to sign. These included various standing orders as well as letters, such as PB.82 and PB.87, asking for more time within which to make payment. KR had told Mani that the standing orders were required for obtaining export permits and the letters were needed for KR to placate the bankers in Trichirapalli who had advanced moneys to KR on the strength of the exports.

Mani accepted that some of the orders placed with the plaintiffs were those of his wife, Vijayalakshmi. Vijayalakshmi had experience in the jewellery trade - she was a partner in Viknesh Jewellers until February 1997 when the firm closed - and she had, at times, assisted KR in finding customers. As a favour for friends she had also, at times, placed orders with KR for items of jewellery. These orders, he claimed, constituted only a very small portion of the jewellery that the plaintiffs imported, through him, into Singapore.

Mani testified that although for the first six consignments the credit given was only for 90 days, the bills in respect of the second to sixth consignments were overdue by between 100 and 150 days before they were settled. On 10 January 1997, for instance, when the fifth consignment was sent, no payments in respect of the second, third and fourth consignments, amounting to some US$370,000 had been made. Inspite of this, some three weeks later, on 31 January 1997, the sixth consignment was shipped bringing the total outstanding on the bills of exchange to US$420,000. Despite such large sums being overdue for so long the plaintiffs continued to send jewellery and even increased the credit period for the seventh, eighth and ninth consignments to 120 days. It was submitted that the reason the plaintiffs were so lax in their credit control was because the business was in fact the plaintiffs` business and not Mani`s business.

Although evidence was led as to the history of the relationship between the plaintiffs and Mani, it was the seventh, eighth and ninth consignments that constituted the subject matter of the claim in this case. It was therefore these consignments that were the focus of much of the evidence. About 18,000 grammes out of the 21,300 grammes sent to Singapore under these three consignments were delivered to a firm of jewellery merchants in Singapore called Kim Kiong Jewellers (`KK Jewellers`). It would be necessary to examine these three consignments in some detail. As it was Mani who was alleging that the consignments to him were not what they seemed to be on the surface, I will deal with Mani`s version first.

The seventh and eighth consignments (defendant`s version)

Mani testified that on 22 April 1997 he received, by fax, a copy of an air way-bill and invoice from the plaintiffs. He was also told by KR that KR would be in Singapore on 3 May 1997 to collect the consignment. On 28 April 1997, after receiving the original documents from the Indian Bank, he paid the requisite Goods and Services Tax (GST), permit fee and storage charges and cleared the box containing the jewellery from the freight agent. On 30 April 1997 he similarly received fax copies of the invoice and air way-bill of the eighth consignment. KR arrived in Singapore on 3 May 1997 and Mani told him that he had collected the seventh consignment but that the eighth consignment had not arrived. KR told him to hand both consignments to him when the eighth consignment arrived.

On 6 May 1997 Mani cleared the eighth consignment and handed the two consignments to KR, who was, as usual, staying at the Fortuna Hotel in Serangoon Road. Mani made a note on the respective packing lists acknowledging that the consignments had been handed to KR and asked KR to sign that acknowledgment. KR did so but retained the packing list saying that he would return it later after making a copy for his record. Mani claimed that subsequently (on 7 June 1997), KR faxed the two acknowledgments to him from India (DB.14 and 15). Counsel for the plaintiffs objected to the admission of DB.14 and 15 on the grounds that the originals were not produced. I will deal with the objection later.

On 13 May 1997 KR told Mani that he had sold 7,455.400 grammes from the seventh and eighth consignments to KK Jewellers. He handed to Mani a cheque drawn by KK Jewellers in favour of Tradeworld Resources & Services for S$25,000 and asked Mani to raise an invoice for the jewellery delivered to KK Jewellers. Mani testified that he did not know Loh and had not previously heard of KK Jewellers although he realised from the address given to him by KR that KK Jewellers were situated on the 4th level of the block next to where his office was situated. Mani assumed that KR had sold the balance amount of jewellery in the seventh and eighth consignments to other parties. Mani produced two lists (DB.16 and DB.18 dated 9 and 13 May 1997), in KR`s handwriting, setting out the descriptions and weights of various items of jewellery and bearing the signature of Loh. Based on this information Mani prepared a delivery order and handed it to KR. KR subsequently handed a copy of the delivery order, with Loh`s acknowledgement endorsed thereon, back to Mani.

The ninth consignment (defendant`s version).

Mani testified that on or about 5 June 1997 KR faxed to him from India a copy of an air way-bill and a copy of the invoice relating to the ninth consignment. The invoice gave the total weight of the consignment as 10,721.470 grammes. On 7 June 1997 he received a fax (DB.46) from KR which contained a breakdown by weight of the various packets in the ninth consignment. The total weight was 10,721.43 grammes. At the bottom of the fax KR had written:

... I`m there from 9th morning (reaching by 6am). The above contains orders of Mr Loh. You must be getting the documents by 9th Monday. Regards. Ram. DHL 139-7930-564-DT06/06/97.

It would appear from the fax transmission record at the top of the fax that it was together...