SCT Technologies Pte Ltd v Western Copper Co Ltd

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 05 January 2016
• Neutral Citation: [2015] SGCA 71
• Plaintiff Counsel: Josephine Chong Siew Nyuk (Josephine Chong LLC) and Kelvin Lee Ming Hui (WNLEX LLC)
• Docket Number: Civil Appeal No 74 of 2015
• Date: 05 January 2016
• Hearing Date: 27 November 2015
• Subject Matter: Evidence -Proof of evidence,Onus of proof
• Published date: 08 January 2016
• Citation: [2015] SGCA 71
• Defendant Counsel: Ng Hweelon and Ibsen Low (Veritas Law Corporation)
• Court: Court of Appeal (Singapore)
• Year: 2016

Chao Hick Tin JA (delivering the judgment of the court): Introduction

The Appellant commenced these proceedings to recover a fixed sum of money on three partially unpaid invoices. The Respondent’s defence is that it had already paid the sum claimed in full. To this end, the Respondent furnished bank statements recording that it had made certain payments to the Appellant. However, the bank statements neither contemporaneously record the purpose for which the payments were made nor do they record payments that tallied exactly with the sums claimed on each of the three invoices. For its part, the Appellant does not deny that it received the payments as reflected in the bank statements. What it contends is that those payments were made by the Respondent in order to discharge debts other than those owing on the three invoices. However, like the Respondent, the Appellant did not adduce any documents which contemporaneously record the (other) purposes to which the payments were applied.

It is clear that the cases advanced by both parties are beset by evidential shortcomings, particularly where proving the purpose of the undisputed payments is concerned. This was also observed by the trial judge (“the Judge”) in his written grounds of decision as follows (see SCT Technologies Pte Ltd v Western Copper Co Ltd [2015] SGHC 135 (“the GD”) at [18]):

There was no dispute that the [Appellant] received money from the [Respondent], but unfortunately there was nothing in evidence that contemporaneously recorded the purpose of each payment. I would have thought that either at the point of payment, or in the receipt given at or after payment, there would have been some statement or remark capturing at least what either the [Appellant] or [Respondent] thought the payment was for, in terms of the purpose of the payment, or the invoice or order to which the payment related. Unfortunately, this was not so. …

In these circumstances, the allocation of the burden of proving the purpose of the payments is thrown into sharp relief. Is it for the Respondent to prove that the payments were meant to discharge the debts on the three invoices? Or is it for the Appellant to prove that the payments were for discharging the other alleged debts? The Judge held that the burden was on the Appellant and, unsurprisingly, given the state of the evidence before him, he also found that this burden had not been discharged on a balance of probabilities. The Appellant’s claim was thus dismissed and it now appeals against the Judge’s decision.

Background

The Appellant is a Singapore incorporated company. It is in the business of manufacturing and distributing printed circuit board testing equipment.¹ Its witnesses in the trial below included its sole director,² Mr Terence Tea (“Mr Tea”), and its manager, Ms Aileen Sim (“Ms Sim”), who is, incidentally, also the wife of Mr Tea. The Respondent is a Taiwanese company. It is involved in the business of manufacturing and distributing copper balls.³ The only witness to appear for it at trial was its General Manager, Mr Chang Te-Lung (“Mr Chang”).

The three invoices which formed the basis of the Appellant’s claim in these proceedings were issued by the Appellant to the Respondent between November 2007 and January 2008. During this period, the parties were related through a company known as Advance SCT Ltd (“Advance SCT”). Essentially, Advance SCT held shares in both the Appellant and the Respondent. While the former was a subsidiary of Advance SCT, the latter, strictly speaking, was not so because Advance SCT never owned more than half of its shares.⁴ The parties’ relationship through Advance SCT came to an end after October 2009 when the Appellant ceased to be a subsidiary of Advance SCT.⁵ As for the Respondent, it continues to be substantially owned by Advance SCT.⁶

The fact that the parties were commercially related entities during the material period between 2007 and 2008 is particularly relevant for understanding how the three material invoices arose. During this time, the parties were jointly involved in trading in copper balls to be used in the manufacture of printed circuit boards. Essentially, they sat at different points in a transactional chain. Mr Tea, who was the Chief Executive Officer of Advance SCT between 2009 and 2011,⁷ gave evidence that a particular transaction for a consignment of copper balls would typically proceed along the following sequence:⁸ first, the Respondent (as a manufacturer and distributor of copper balls) would receive orders from the makers of printed circuit boards located mainly in Taiwan and China; next, the Respondent would forward the purchase orders to the Appellant; on the Respondent’s instructions, the Appellant would then forward the purchase orders to copper ball manufacturers in China and make payment to those manufacturers; upon payment being made by the Appellant, the Chinese manufacturers would then deliver the copper balls directly to the end-consumers, namely, the Respondent’s customers who had originally placed the orders with the Respondent; the Respondent’s customers would then make payment to the Respondent upon receipt of the copper balls; and finally, the Respondent would pay the Appellant for the copper balls which the Appellant had purchased from the Chinese manufacturers (see step (c) above) – we pause to mention that the Appellant would have sent invoices to the Respondent (such as the three material invoices) for these sums although it is not clear from Mr Tea’s account as to the point in time when this happened in the course of an entire transaction.

In essence, the commercial arrangement between the parties was such that the Appellant would purchase copper balls from third party manufacturers to meet the orders of the Respondent’s customers and then follow this up by issuing invoices to the Respondent seeking payment for the goods ordered. In these proceedings, the Appellant claims that three of the invoices which it had issued pursuant to the above commercial arrangement remain unpaid. The sums on these three invoices come up to a total of US$1,597,084.46. After accounting for certain undisputed partial payments which the Respondent had made in respect of each of these invoices, the outstanding sum still due from the Respondent to the Appellant is US$1,274,741.73. A breakdown of how this claim is arrived at is set out below at [9].

The Appellant commenced the present action in August 2013, more than five years after the last of the three invoices was issued in January 2008. According to the Respondent, the Appellant decided to commence these proceedings only then because the Appellant’s director, Mr Tea, was the losing party in a previous action brought by the Respondent’s witness, Mr Chang, to recover a personal debt owed by the former. On the other hand, the Appellant claimed that there was no vindictive motive behind the action; the delay was merely the result of it trying to resolve the matter amicably and the difficulty the Appellant had in obtaining information from the Respondent (given that the Appellant had ceased to be related to Advance SCT in 2009 whereas the Respondent remained related to Advance SCT). The Judge found that there was little to substantiate the Respondent’s assertion of an improper motive on the part of the Appellant in pursuing this claim (see the GD at [43]). In any event, we do not consider the subjective motives of the Appellant to be relevant to the dispute at hand which falls to be resolved based on the objective evidence.

The pleadings

The Appellant filed its Statement of Claim on 21 August 2013.⁹ It asserted that the Respondent owed it the sum of US$1,274,741.73, being the price of the copper balls supplied by the Appellant to the Respondent’s customers at the Respondent’s request, less the partial payments which the Appellant admitted had been paid. The Appellant set out the particulars of its claim as follows:

Invoice number	Date of invoice	Invoice amount	Partial payment
I-27678	14 November 2007	US$336,200.83	US$80,221.69 (made on 27 December 2007)
I-27712	20 November 2007	US$646,212.06	US$22,191.20 (made on 4 April 2008)
I-28172	30 January 2008	US$614,671.57	US$219,929.84 (made on 10 May 2008)
Sub-total	US$1,597,084.46	US$322,342.73
Total claim amount	US$1,274,741.73

The Respondent filed its Defence on 13 September 2013.¹⁰ The heart of its plea is to be found at para 3 therein where it denies the Appellant’s claim and pleads that all three invoices had been paid in full. That paragraph reads as follows:

The [Respondents] deny Paragraph 3 of the [Appellants’] claim and avers that all the transactions as stated were paid by the [Respondents] in full and that the [Respondents] do not owe the [Appellants] any of the said invoices as alleged …

In the same paragraph, the Respondent went on to particularise how the invoices had been paid in full through several tranches of payments between December 2007 and May 2008, as follows:

Invoice number	Date of payment	Amount paid
I-27678	26 December 2007	US$80,221.69	US$336,200.83
1 February 2008	US$180,000
12 February 2008	US$75,979.14
I-27712	11 January 2008	US$222,191.20	US$646,212.06
12 February 2008	US$424,020.86
I-28172	7 March 2008	US$200,000	US$614,671.57
3 April 2008	US$309,047.91
8 May 2008	US$105,623.66

The Appellant’s Reply was filed on 20 November 2013.¹¹ The Appellant did not deny receiving the sums particularised in the Respondent’s Defence but what it did dispute was the precise purpose for which those payments were made....