Lim Beng Kiat v Mohammad Sarman bin Saidi

• Jurisdiction: Singapore
• Judge: Prem Raj Prabakaran
• Judgment Date: 28 February 2020
• Neutral Citation: [2020] SGDC 46
• Court: District Court (Singapore)
• Docket Number: District Court Suit No 2228 of 2015, HC/District Court Appeal No 38 of 2019
• Year: 2020
• Published date: 24 June 2020
• Hearing Date: 08 July 2019,12 October 2018,27 November 2019,09 January 2019,15 March 2019,21 February 2019,23 July 2019,06 September 2019,08 March 2019,03 May 2019
• Plaintiff Counsel: V Ramesh (M/s Tito Isaac & Co LLP)
• Defendant Counsel: Kanagavijayan Nadarajan (M/s Kana & Co)
• Subject Matter: Contract,Offer and Acceptance,Equity and Trusts,Presumed Resulting Trust
• Citation: [2020] SGDC 46

District Judge Prem Raj Prabakaran: Introduction

Lim Beng Kiat (“Lim”) was one of three directors at Kim Hup Chor Construction Pte Ltd (“the company”)¹, a family-run business. ² The company was run in a “very informal”³ manner. Lim’s father and brother were its two other directors⁴, but Lim was its “chief decision maker”.⁵

Lim was the Plaintiff in these proceedings. He brought this suit in his personal capacity, and not on the company’s behalf.

Mohammad Sarman bin Saidi (“Sarman”) joined the company sometime in February 2007. He stopped working for the company on 18 May 2015.⁶ He was a “Project Manager”⁷ at the time he ceased working for the company. That said, the evidence put before the Court showed that Sarman was also authorised⁸ to correspond with external parties (including counterparties) as the company’s “General Manager”, “Admin Manager”, and “Contracts Manager”.⁹ Sarman was the Defendant in these proceedings. For “all intents and purposes”, he regarded Lim and the company as “one and the same”.¹⁰

I now set out the case pleaded by each party.

Plaintiff’s pleaded case

I start with Lim’s pleaded case. This related to two aspects: monies amounting to $8,647; and a second-hand car¹¹ bearing license registration number SKH 1791X (“the Car”).

Monies amounting to $8,647

Lim pleaded that he had “advanced [personal] loans to [Sarman] by way of making payments to various [licensed moneylenders] on [Sarman’s] behalf”.¹² Lim claimed he paid a total of $8,647¹³ to these moneylenders. He also provided a breakdown of these alleged personal¹⁴ loans:

Date of payment	Payee	Sum
19 November 2010	S21 Credit	$1,100
19 November 2010	RAF Credit	$1,050
19 November 2010	Eurohub Credit	$2,000
20 November 2010	Royal Credit	$750
20 November 2010	Fastpay Pte Ltd	$400
20 November 2010	KBB Credit	$1,150
20 November 2010	F1 Credit Pte Ltd	$932
20 November 2010	Platinum Credit	$1,265
	Total	$8,647

These grounds will refer to these alleged personal loans as “the Monies”.

Lim averred that it was “the understanding of the parties”¹⁵ that Sarman “would repay [these] loans to [him] upon demand”.¹⁶ According to Lim, after Sarman left the company on or about 18 May 2015¹⁷, Sarman “neglected, failed, and/or refused to repay [these] loans to [him]”. This was “[d]espite Lim’s requests and demand via his solicitor’s letter dated 30 June 2015¹⁸”.¹⁹ I should state that this letter had referred only to the Car. It did not refer to the Monies.

“In the further alternative”, Lim averred that “all [of his] payments…to [the moneylenders] constituted loans to [Sarman] and [Sarman] ha[d] neglected, failed, and/or refused to repay [these loans]”.²⁰ It was not clear how this alternative” claim was different from Lim’s claim that it was the understanding of the parties that Sarman would repay these alleged loans to Lim on demand.²¹

Lim claimed for the Monies. He also claimed for interest from the date of the writ “until…full payment of [these Monies]”.

Car

Lim pleaded that he had, on Sarman’s request, agreed to provide the Car to Sarman “for use in connection with the discharge of [Sarman’s] duties as an employee of the [company]”.²² Lim averred that: Sarman had entered into a hire purchase agreement dated 7 February 2013 with United Overseas Bank Limited (“the HP Agreement”) for the purchase of the Car, while he (ie, Lim) had stood as guarantor under the HP Agreement.²³ he had “paid for the deposit, transfer fee, road tax, insurance, and all hire purchase rentals under the HP Agreement”.²⁴

According to Lim, it was “the understanding of the parties that [Sarman] would return the [Car] and transfer its title to [Lim] upon the cessation of [Sarman’s] employment” with the company.²⁵

Lim claimed that after Sarman left the company on or about 18 May 2015²⁶, Sarman “neglected, failed, and/or refused to return the [Car] and transfer its title to [Lim]”. This was “[d]espite Lim’s requests and demand via his solicitor’s letter dated 30 June 2015”.²⁷

“In the alternative”, Lim contended that “[Sarman] held the [Car] on [t]rust for [him] to return the [Car] and transfer [its] title…upon cessation of [Sarman’s] [employment]” with the company.²⁸

“In the further alternative”, Lim averred that “all [of his] payments towards the purchase and use of the [Car]…constituted loans to [Sarman] and [Sarman] ha[d] neglected, failed, and/or refused to repay [these loans]”.²⁹

Lim claimed for: the “[d]elivery of the [Car] and [the] execution of all relevant documents to transfer title of the [Car] to Lim”; or “the sum of $77,420.00 being the total hire purchase price of the [Car]³⁰ together with $4,527.00 being the transfer fee³¹, all insurance and road tax charges for the [Car] or such sum as the Court deems fit”.

Lim also claimed interest from the date of the writ “until delivery of the [Car] or full payment thereof”.

Defendant’s pleaded case

I now set out Sarman’s pleaded case on the Monies and the Car.

Monies amounting to $8,647

Sarman denied it was “the understanding of the parties that…he would repay the [Monies] to [Lim] upon demand”.³² He averred that he had “approached [Lim] as the Director of the company [in or about November 2010] and informed [Lim] that [he] had incurred loans from various licensed moneylenders. [He] informed [Lim] that since [he] had contributed towards the large profits [made] by the company in 2010 as a Project Manager, if the company [could], purely on a goodwill basis, pay for these loans”.³³ According to Sarman, “[Lim], on behalf of the company, agreed to pay these loans” on a goodwill basis.³⁴

Car

Sarman agreed he had entered into the HP Agreement “for the purchase of the [Car] as the hirer thereof”.³⁵ He also agreed that Lim was the guarantor under this agreement, but claimed Lim had volunteered to be so.³⁶

Sarman denied it was “the understanding of the parties that [he] would return the [Car] and transfer [its] title to [Lim] upon the cessation of [his] employment” with the company.³⁷ Instead, Sarman averred that “[i]n or about January 2013 in consideration of [his] birthday which fell on 31st January 2013, the company decided to provide [him] in his sole name [the Car] for his personal use as well as his use in the course of his work”.³⁸

According to Sarman, the company “further agreed to pay all the outgoings towards payment of the [Car] like [the] deposit, transfer fee, road tax, insurance, and all hire purchase rentals under the [HP Agreement] that was taken out by [him] in his sole name so long as [he] was still in the employment of the company. [He] was to be responsible for [only] the payment of petrol, parking fees, and ERP charges.³⁹ Sarman further contended that it was agreed between the company and [him] that should [he] leave the employment of the company, he would own the [Car] and pay all the outgoings towards the payment of the [Car] and [he] would be solely responsible for all liabilities incurred in the usage of the [Car]”.⁴⁰

Sarman denied that Lim “paid for the deposit, transfer fee, road tax, insurance, and all hire purchase rentals under the HP Agreement”.⁴¹ He averred that even if Lim had paid for these, he “had paid so on behalf of the company”.⁴²

Sarman also denied that: he held the Car on trust for Lim⁴³; and all of Lim’s payments towards the purchase and use of the Car constituted loans to him, and that he had neglected, failed, and/or refused to repay these sums.⁴⁴

Undisputed facts

The following facts were not disputed: Lim and Sarman had known each other since sometime in 2003.⁴⁵ Lim had employed Sarman to work in the company sometime in February 2007.⁴⁶ there was no written contract of employment between the company and Sarman.⁴⁷ Lim had provided the Monies used to repay the various moneylenders on Sarman’s behalf, between 19 November 2010 and 20 November 2010.⁴⁸ Sarman had entered into the HP Agreement on 7 February 2013 to buy the Car, which was registered in Sarman’s name.⁴⁹ Lim was the guarantor under the HP Agreement. The purchase price of the Car was $77,420.⁵⁰ Lim had paid:⁵¹ the cash deposit towards the purchase of the Car (amounting to $24,000)⁵²; and 28 monthly instalments of $1,484 for the Car until 18 May 2015 (amounting to $41,552 in all)⁵³. Until 18 May 2015, Sarman had used the Car in connection with his duties as an employee of the company as well as for his personal use. Sarman had exclusive possession of the Car from 18 May 2015. He serviced the remaining eight monthly instalments (amounting to $11,868 in all) as well as other outgoings in respect of the Car from 18 May 2015 until he eventually sold the Car.⁵⁴ Lim and Sarman had been very close friends, “like brothers”⁵⁵, until their relationship soured when Sarman ceased working for the company on 18 May 2015. On 28 May 2015, the company had sent a termination letter to Sarman (“the Termination Letter”). This letter sought “the return of all company’s properties… [and the] return [of] company-owned documentation”⁵⁶ in Sarman’s possession. It also stated that if the “company’s properties” were not returned within 7 days of Sarman’s receipt of the letter, the company would consider them “stolen property and [would] seek a legal remedy”.⁵⁷ On 30 June 2015, Lim had, through his solicitors, sent a letter of demand to Sarman that stated that “it was inter alia the agreement and/or understanding between [Sarman] and [Lim] that [Sarman] held the [Car] on trust for [Lim], and/or would return the [Car] to [Lim] upon termination of [Sarman’s] employment.” The letter then went on to demand that Sarman “deliver possession of the [Car] and execute all or any related documents, and take such action as [was] necessary for the transfer of the [Car] to [Lim] by 7 July 2015.”⁵...