Kwan Yuen Heng v Teo Yong Soon

• Jurisdiction: Singapore
• Judge: Quentin Loh JAD
• Judgment Date: 25 February 2022
• Neutral Citation: [2022] SGHC(A) 9
• Citation: [2022] SGHC(A) 9
• Docket Number: Civil Appeal No 85 of 2021
• Year: 2022
• Published date: 02 March 2022
• Plaintiff Counsel: Lua Wei Liang Wilbur and Zhu Yujia (Covenant Chambers LLC)
• Defendant Counsel: Cheah You Yuan, Suriya Prakash Uthayasurian and Uthayasurian s/o Sidambaram (Phoenix Law Corporation)
• Subject Matter: Credit And Security,Money and moneylenders,Loans of money
• Hearing Date: 12 January 2022
• Court: High Court Appellate Division (Singapore)

Chua Lee Ming J (delivering the judgment of the court): Introduction

The appellant, Mr Kwan Yuen Heng (“Kwan”), appeals against the judgment entered against him in High Court Suit No 777 of 2019 for $1.621m being the amount of loans extended to him by the respondent, Mr Teo Yong Soon (“Teo”). Both parties have consented to the appeal being decided by the Appellate Division of the High Court consisting of two Judges without hearing oral arguments, pursuant to s 36(1) read with para 2(k) of the Seventh Schedule to the Supreme Court of Judicature Act 1969 (2020 Rev Ed) (“SCJA”), and para 1(b) of the Eighth Schedule to the SCJA.

As the trial judge (the “Judge”) noted in his judgment (the “Judgment”), this was an acrimonious dispute in which both parties offered wildly different versions of events: Teo Yong Soon v Kwan Yuen Heng [2021] SGHC 112 at [3].

Teo’s claim

Kwan works in the finance industry and Teo runs a business in renovation, construction and goods trading. They were friends who had known each other since 1997. They also had several commercial dealings with each other. Kwan had engaged Teo to carry out renovation works on three of his properties. Teo and his wife invested $200,000 with Kwan in 2008, making a profit of $$89,350 within a year. In 2013, an arrangement was reached for Teo to broker property deals for Kwan’s clients although Teo’s efforts did not yield any results.

Teo claimed that he had made seven interest-free friendly loans (the “Loans”) to Kwan as follows:

Loan No.	Date	Amount ($)
1	13 November 2014	500,000
2	16 January 2015	400,000
3	30 June 2015	55,000
4	11 July 2015	245,000
5	17 December 2015	15,000
6	7 September 2016	372,000
7	20 October 2017	34,000
Total	1,621,000

There was no written documentation for the Loans. According to Teo, at the material times, Kwan was the director and shareholder of Quann Investments Pte Ltd together with his wife, and Kwan had requested Loans Nos 1–4 and 6 because he needed to make refunds to investors, Loan No 5 because he needed to pay staff salaries and Loan No 7 because he needed to pay legal costs. The amount for each loan was handed to Kwan in cash. Kwan denied having taken the Loans.

It was not disputed that Kwan gave Teo the following cheques:

	Date	Amount ($)
1	13 November 2016	300,000
2	18 July 2017	10,000
3	22 July 2017	77,000
4	12 October 2017	757,000
5	10 November 2017	226,000
6	10 December 2017	251,000
Total	1,621,000

According to Teo, Kwan gave him these cheques as payments for the Loans. Teo said that he did not present the cheques for payment because on each occasion, Kwan told him not to do so until Kwan received funds. In his defence, Kwan pleaded that he had issued the cash cheques (and other cheques) because Teo compelled him to issue the cheques as collateral for amounts allegedly owed to Teo and that Teo would never encash the cheques.

Kwan’s defence

Kwan denied having taken the Loans. According to Kwan, he took the following interest-bearing loans from Teo: A loan of $250,000 in June 2015 (the “$250,000 Loan”), on which interest was payable at $25,000 per month.¹ In his defence, Kwan described this as a “loan of $250,000”; at the same time, he also pleaded that the first interest payment of $25,000 was deducted from the amount borrowed and therefore “the principal amount to be repaid was $275,000”. Kwan claimed that he subsequently paid the interest for the next three months from July to September 2015.² A loan of $29,800 in October 2015 (the “$29,800 Loan”), of which $25,000 was used to pay the interest on the $275,000 Loan for October 2015, $3,874 was used to pay the first month’s interest on the $29,800 Loan (at 13%) and $926 was kept by Teo as “coffee money”.³ A loan of $300,000 in November 2015 (the “$300,000 Loan”), from which $45,000 was deducted as payment of interest for the first month and $10,000 was kept by Teo as “coffee money”.⁴ A loan to pay $28,874 being the total interest on the $275,000 Loan and the $29,800 Loan for November 2015, purportedly extended by Teo to cover the interest.⁵ In his defence, Kwan stated that interest was payable on this loan at 13% but did not state when this loan was taken, or how much the loan amount was, or whether the first month’s interest was deducted from the loan amount.

Kwan claimed that between July 2015 and April 2018, he paid Teo a total amount of $1,497,000 as follows:

Date	Amount ($)
July – September 2015	75,000
December 2015	60,000
January 2016	120,000
February 2016	60,000
March 2016	23,200
April 2016	56,000
June 2016	63,000
July 2016	41,000
August 2016	56,000
September 2016	56,500
November 2016	61,500
December 2016	62,500
January 2017	63,000
February 2017	72,800
August 2017	139,500
April 2018	487,000
Total	1,497,000

Teo denied Kwan’s allegations as set out in [7] and [8] above.

Kwan’s alternative defence was that Teo was operating as an unlicensed moneylender at all material times and the Loans were therefore not recoverable pursuant to s 14(2) of the Moneylenders Act (Cap 188, 2010 Rev Ed) (“MLA”).

The Judge’s findings

The Judge found that Teo did make the Loans to Kwan, the Loans were interest-free, Kwan failed to prove that he had made any repayments to Teo. Teo was not an unlicensed moneylender, and the Loans were therefore enforceable. Accordingly, the Judge entered judgment in favour of Teo for the sum of $1,621,000.

Issues in this appeal

In this appeal, Kwan challenges the Judge’s finding that: the Loans were made to Kwan; and Teo was not an unlicensed moneylender.

The Judge’s finding that Teo did make the Loans

Kwan submits that the Judge applied the wrong test as to the burden of proving the Loans. Kwan submits that the Judge appeared to be influenced by his view that Teo’s version of events was more probable than Kwan’s version of events.

It...