Mok Kwong Yue v Ding Leng Kong

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 06 May 2008
• Neutral Citation: [2008] SGHC 65
• Court: High Court (Singapore)
• Published date: 09 May 2008
• Year: 2008
• Plaintiff Counsel: Ee Chong Nam Andrew (Andrew Ee & Co)
• Defendant Counsel: Tan T'eng Ta' Benedict (Bernard & Rada Law Corporation)
• Subject Matter: Civil Procedure
• Citation: [2008] SGHC 65

6 May 2008 Judgment reserved.

Judith Prakash J:

1 The plaintiff, Mok Kwong Yue (“Mr Mok”), brought this action to recover three sums of money which he alleged he had paid the defendant, Ding Leng Kong (“Mr Ding”), by reason of a mistake of law on his part. Judgment in favour of Mr Mok was granted in respect of the first sum, an amount of $240,000, in July 2004 pursuant to an Order 14 application. When the matter came on for trial before me therefore, the dispute was confined to the other two sums.

Background

2 The facts of this case are rather involved. Perhaps the best place to start is with High Court Suit 1515 of 2001 (“Suit 1515”), which was an action commenced by Mr Ding against Mr Mok and three others to recover sums of money owing to Mr Ding under a document that all parties referred to as the “November Agreement”.

3 The November Agreement was dated 1 November 1999. The parties to it were Mr Ding, Mr Mok, an individual named Subbarao Pinamaneni (“Mr Subbarao”) and three companies which Mr Subbarao and Mr Mok ran viz Teamasia Pte Ltd (“Teamasia”), a Singapore company, Teamasia Semiconductor (India) Pte Ltd (“TSI”), an Indian company, and Teamasia Semiconductor (USA), (“TA USA”), collectively the “TA Companies”. The recitals of the November Agreement noted that at the request of Mr Mok and Mr Subbarao, Mr Ding had already provided, and would in the future be providing, funds for the use of Teamasia and TSI. It stated that it was contemplated that the TA Companies would be reorganised under a holding company (“TA Holdings”) and that the purpose of the November Agreement was to consolidate all previous agreements in respect of funds provided by Mr Ding for the TA Companies.

4 In the body of the November Agreement, it was provided as follows:

1. DEFINITIONS & INTERPRETATIONS

1.1 “Borrowers” means Mok, Subbarao, and the TA Companies; and

“TA Companies” means [Teamasia], TA India and TA USA.

2. ACKNOWLEDGEMENT OF AMOUNT OUTSTANDING

2.1 Each of the Borrowers acknowledges that for valuable consideration Ding has provided funds on various occasions previously (“Previous Loans”) for the [use of the TA Companies] and that in consideration for providing these funds Ding is entitled to inter alia,

2.1.1 shares in TA Holdings representing four per cent. of its share capital after the injection of approximately $16 million into TA Holdings by a third party investor (the “Enlarged Capital”); and

2.1.2 be appointed a director of TA Holdings.

2.2 Each of the Borrowers acknowledges that the outstanding amount of the Previous Loans amounts to a sum of at least US$696,000 and is subject to further confirmation by Ding.

3. FURTHER LOAN

3.1 Upon the execution of this Agreement, Ding shall provide a further loan of US$500,000 … to the Borrowers.

4. RE-PAYMENT OF THE LOANS

4.1 Each of the Borrowers undertake to repay the Previous Loans and the Further Loan as follows:

4.1.1 Repay US$630,000 by 8 November 1999; and

4.1.2 Repay US$566,000 and such further amount as may be determined by Ding by 31 January 2000.

5 Just before the November Agreement was signed, in October 1999, Mr Ding had sent TSI US$250,000 and that sum was part of the US$696,000 referred to in cl 2.2 of the November Agreement. Thereafter, pursuant to the November Agreement, on 2 November 1999, Mr Ding advanced US$500,000 to enable TSI to acquire shares in a company listed on NASDAQ. On 14 December 1999, he advanced a further sum of US$299,928.69 for the same purpose. It should be noted that Teamasia was in the semiconductor industry and was trying to expand its productions in India through TSI and the listed company.

6 Unfortunately, in the year 2000 many companies connected with the IT industry collapsed. As a result, Mr Mok and Mr Subbarao and the TA Companies (as defined in the November Agreement) sustained huge losses and were not able to repay Mr Ding his loans in the manner contemplated in the November Agreement. On 30 November 2001, Mr Ding commenced Suit 1515 against Mr Mok, Mr Subbarao, Teamasia and TSI. In it, he made both monetary and non-monetary claims against the four defendants. As far as his monetary claims against Mr Mok were concerned, these were for:

(a) payment of the sum of $30,000 being a personal loan that Mr Ding had made to Mr Mok; and

(b) payment of the sum of US$1,203,750.91.

The second claim was made against all four defendants and was put on two alternative bases. The first basis was that Mr Mok had forwarded a total sum of US$1,203,750.91 as investment in the NASDAQ company and that the said sum had to be returned. The second basis, contained in para 28 of the statement of claim was that the various sums remitted by him had been advanced by way of loans rendered and guaranteed by the respective parties. The particulars of this allegation were as follows:

Particulars
	Date of Loan	Amount	Loan Recipient	Guarantors
(i)	3rd June 1998	(US$153,822.22)	[Teamasia]	[Mr Mok and Mr Subbarao]
(ii)	11th October 1999	US$250,000	[TSI]	[Mr Mok, Mr Subbarao and Teamasia]
(iii)	2nd November 1999	US$500,000	[TSI]	[Mr Mok Mr Subbarao and Teamasia]
(iv)	14th December 1999	________________	[TSI]	[Mr Mok, Mr Subbarao and Teamasia]
	Total	US$1,203,750.91

7 Mr Ding was not able to effect service of the writ of summons in Suit 1515 on Mr Subbarao and therefore when the trial of that action came on for hearing before Woo Bih Li J in March 2003, the claim was proceeded with against Mr Mok and the two company defendants only. These defendants did not dispute that all the sums claimed had been advanced. The main defence put up was that the sums were loans that were not recoverable as they had been made by an unlicensed moneylender. On the first day of the trial, Mr Mok applied to amend his defence and was granted leave to do so. In the course of the trial, counsel for Mr Mok put questions relating to an allegation that Mr Mok had repaid US$300,000 and MR200,000 to Mr Ding. Woo J did not allow questions thereon because no defence of partial repayment had been pleaded. On the last day of trial, after Mr Ding’s case was closed, Mr Mok applied to amend his defence further by including the partial prepayment defence. Woo J did not allow this application. In his judgment ([2003] SGHC 114) he explained (at [23]):

I noted that Ding’s Counsel had already said during his opening statement that Ding’s claims excluded other sums he had advanced. If the monies Ding admittedly received were not applied to pay those other sums, then the Defendants should have raised this point right from the time when the Re-Amended Statement of Claim was served and, having failed to do so, they should have applied for leave to amend their Defences before Ding’s case was closed. As it was, I had already granted leave for Mok to amend his Defence on the first day of the trial in respect of a different point.

(emphasis original)

8 Woo J granted judgment, in part, to Mr Ding. He found that the moneys advanced by Mr Ding were in the nature of loans and not by way of investment. The shares promised to him were really in lieu of interest and the fact that Mr Ding was also entitled to be appointed as a director of TA Holdings and Teamasia, did not change the nature of the advances as loans. In respect of the money lending defence, Woo J held that Mr Ding was not a moneylender although he had lent out money for repayment with interest because his loans had been made to the same group of entities and were for the same purpose which was to acquire shares in a business in an industry which was he was familiar.

9 Woo J then went on to deal with the liability of Mr Mok and the other defendants for the repayment of sums due under the November Agreement. He noted that there was some disconnection between the way in which the statement of claim in the action was worded and the way in which the November Agreement had been drafted:

61 It seems to me that Ding's solicitors had used the words “Loan Recipient” in para 28 of the Re-Amended Statement of Claim to mean “Borrowers” although the latter expression is preferable so as not to confuse borrowers with recipients of the loan monies. After all, recipients of loan monies are not necessarily the borrowers. Indeed, the November 1999 agreement makes the situation confusing by failing to distinguish clearly between (a) borrowers, (b) parties who have the benefit or use of the loans and (c) guarantors, if any.

62 Thus, recital (A) of the November 1999 agreement states that at the request of Mok and Subba, Ding has and will be providing funds for the use of the TA Companies (as defined therein). Recital (C) states that the November 1999 agreement consolidates all previous agreements “in respect of funds provided by Ding (either directly or indirectly through Mok and/or Subbarao or otherwise) to or on behalf of the TA Companies”. Then, suddenly, in the definition section, clause 1.1 states ‘“Borrowers” means Mok, Subbarao and the TA Companies.’

…

65 The matter is made more confusing because para 28 of the Re-Amended Statement of Claim asserts liability against Mok for the four sums stated therein as guarantor. It also asserts liability against Teamasia Singapore as guarantor for three of the four sums therein. However, there is no mention of a guarantee in the November 1999 agreement. On the contrary, Mok, Subba and the TA Companies (as defined therein) are, as I have said, defined as “Borrowers”. Furthermore, from clauses 4 and 5 of the November 1999 agreement regarding re-payment of the loans and interest, it appears that each of the “Borrowers” has principal liability and not liability as guarantor.

66 In the circumstances, I am not inclined to make a finding of liability against Mok or Teamasia Singapore as guarantor in respect of all the four sums except for one qualification. In para 9 of Mok’s Amended Defence, read together with para 3.1 of the same, Mok has...