Segar Ashok v Koh Fonn Lyn Veronica and another suit

• Judge: Belinda Ang Saw Ean J
• Judgment Date: 27 May 2010
• Neutral Citation: [2010] SGHC 168
• Citation: [2010] SGHC 168
• Court: High Court (Singapore)
• Published date: 29 June 2010
• Docket Number: Suit Nos 310 and 562 of 2007
• Plaintiff Counsel: Devinder K Rai and Subramaniam (Acies Law Corporation)
• Defendant Counsel: Giam Chin Toon S.C. and Hui Choon Wai (Wee Swee Teow & Co)
• Subject Matter: Damages,Partnership,Tort
• Hearing Date: 16 April 2009,05 February 2009,14 April 2009,13 February 2009,13 April 2009,15 April 2009,07 April 2009,09 April 2009,03 April 2009,31 July 2009,11 February 2009,10 February 2009,12 February 2009,06 February 2009,08 April 2009,09 February 2009

Belinda Ang Saw Ean J: Introduction

The plaintiff in Suit 310 of 2007 (“Suit 310”) is Dr Ashok Segar (“Dr Segar”), and the defendant is Koh Fonn Lyn Veronica (“Veronica”) who is the plaintiff in Suit 562 of 2007(“Suit 562”), while Dr Segar is the defendant. Both actions were heard conjointly over two tranches. The two actions are connected in that the protagonists are the same, and the background facts and the allegations of libels, inter alia, overlap. In such cases, an overview of the two actions is always beneficial to better appreciate whether the proceedings for libel and slander are motivated by a genuine desire for vindication or merely to pursue a vendetta following a fall out between erstwhile close friends and business partners. Finally, even if the respective libel and slander claims are successful, the level of damages in the circumstances of this case is likely to be substantially outweighed by the costs of pursuing and defending the allegations.

In Suit 310, Dr Segar claims against Veronica damages for libel in respect of three emails she had circulated on 31 March 2007 and 5 April 2007. Veronica denies that the emails contained the defamatory allegations complained of. She has pleaded lesser meanings to the alleged defamatory statements and has raised the defence of justification. Veronica is counter suing Dr Segar for defaming her in three SMS messages and an undated letter. There is also a separate claim for slander. In addition to damages for libel and slander, Veronica is seeking recovery of a sum of $209,137.44 paid to Dr Segar and to third parties on behalf of Dr Segar in their private dealings with each other.

In Suit 562, Veronica is suing Dr Segar in his capacity as her former business partner of a small jewellery business. It is common ground that the partnership terminated but the date of termination is disputed. It is also common ground that the business expenses and assets were to be shared equally, but the parties cannot agree on exactly how much each party had contributed to the business, and how much of the jewellery were sold and how much of the jewellery and gemstones were left to be divided between the parties. Veronica wants Dr Segar to give, inter alia, an account of various matters pertaining to the jewellery business. In short, Veronica wants this court to order a taking of accounts of all sums due as between the partners consequent on the termination of the partnership.

Dr Segar has a counterclaim for an account of 32 pieces of blue sapphires and all jewellery and gemstones belonging to the business which he claims are or were in the possession and custody of Veronica, and he seeks a declaration that he is entitled to his half share in the disputed sapphires, jewellery and gemstones. Furthermore, Dr Segar claims his half share of the value of the disputed sapphires, jewellery and gemstones with the result that he wants payment of the value of his half share.

History of the relationship and the discord Dr Segar’s version

Dr Segar is a medical doctor by profession and owns a medical clinic at 184 East Coast Road, Singapore. According to him, he first met Veronica at his clinic in or about 1996 when she consulted him as a medical doctor. Over time, Dr Segar became Veronica’s family doctor. Her parents-in-law also consulted him in his professional capacity. Dr Segar, Veronica and her husband, Ang Teann Meng (“ATM”), became good and close friends. In happier times, Dr Segar likened Veronica’s family to being as “close to me as my own family”.¹ Dr Segar is also the godfather of Veronica’s son. They would often vacation together and there were overseas trips to Australia, Japan, India, Sri Lanka, Norway and Argentina.

The close relationship between the parties led to collaborations in business ventures. The most important of these was a business involving the design and marketing of custom-made jewellery. According to Dr Segar, he has an interest in designing jewellery and Veronica liked his designs and jewellery so much that after his mother’s funeral in June 2001, Veronica proposed to Dr Segar that they start a business in designing and marketing jewellery. Although the details of negotiations leading up to the establishment of the business were sketchy, Dr Segar testified that it was understood that the expenses of the jewellery business were to be shared equally. He was also to be responsible for the design of the jewellery whilst Veronica would engage her family’s jewellery craftsman to produce the jewellery. Both parties were then to market the jewellery to their friends and acquaintances.

According to Dr Segar, there were at least three other businesses which he and Veronica and, at times, her husband, ATM, had participated in. In brief, in 2004, Dr Segar, Veronica and ATM decided to venture into the trading of scrap metal. The intention was to purchase scrap metal from Argentina for sale to manufacturing companies in Indonesia. That venture failed due to the difficulties encountered with the suppliers in Argentina. Next, Dr Segar and Veronica “dabbled” in the computer hardware business under the name of Stracom Technology. In relation to that business, Dr Segar and Veronica travelled to Taiwan to purchase laptop computers and they arranged for 100 units to be delivered to Singapore in batches of 20 units. However, both parties experienced difficulties in selling the computer laptops and decided to terminate the business prematurely. Next, a proposal to set up a Mediterranean fast food business came up. To that end, a company called Pitta Hut (S) Pte Ltd (“Pitta Hut”) was incorporated by Dr Segar. However, as with the earlier two businesses, that venture stalled in the planning stage and the company was eventually wound up. Finally, they also invested in Sachris Enterprises Pty Ltd (“Sachris”), an Australian seafood business, but that business also failed.

In early 2003 (by Dr Segar’s recollection), Veronica approached Dr Segar for a loan. Veronica and ATM were involved in ATM’s family companies, Skatool Industries Pte Ltd (“Skatool Industries”) and Skatool Marine. To further their businesses, Veronica and ATM bought a new factory at No 7A Tech Park Crescent, Tuas Tech Park, Singapore but ran into financial difficulties in completing the purchase. Initially, Veronica requested a loan of $200,000 from Dr Segar who offered to refinance his property at 6 Merryn Road, Singapore to raise the necessary funds (“the Merryn Road property”). However, Dr Segar warned Veronica that the Merryn Road property was, at that point in time, mortgaged to Overseas Union Trust and the mortgage contained a penalty clause for early redemption. By remortgaging the property, he would have to incur a penalty. Furthermore, he also told Veronica that he had intended in the future to purchase a shophouse to serve as his medical clinic and private residence. Dr Segar had planned to use the Merryn Road property to finance the renovations of this shophouse, and a refinancing of the Merryn Road property at an early stage could foil his future plans.

In order to assuage his concerns, Veronica allegedly made four promises. First, Veronica promised to absorb the bank penalty that Dr Segar would have to suffer in the remortgage of the Merryn Road property. The bank penalty eventually turned out to be $41,127.87. However, in order to absorb the bank penalty as well as to have some extra cash for her own renovation works after completing the purchase of the Tuas factory, Veronica requested a bigger loan of $300,000 instead of $200,000. Dr Segar’s understanding was that with payment of the bank penalty, Veronica would receive a sum of $258,872.13 (comprising of $300,000 - $41,127.87) but would repay the entire sum of $300,000. Secondly, Veronica also promised to pay the bank interest charges payable on the loan of $300,000. Similarly, Veronica also agreed to pay the legal fees involved in the refinancing. Finally, Dr Segar’s impression was that if he were to purchase a shophouse in the future and did not have adequate funds to renovate it, “the Defendant [would] provide [the plaintiff] with the financial assistance to complete the works.”² On the basis of those promises, Dr Segar went ahead with the refinancing. On 12 April 2003 and 14 April 2003, a total sum of $258,872.13 was disbursed to Veronica. According to Dr Segar, the loan of $300,000 was fully repaid by January 2006.

In August 2003, Dr Segar bought a shophouse at 184 East Coast Road, Singapore, and was in need of funds to renovate the property. He informed Veronica that he would like his loan to be repaid. Veronica and ATM agreed to make repayment of the loan by contributing to the progress payments owing by Dr Segar to his renovation contractors and suppliers.

Another facet to the relationship between Dr Segar and Veronica that is in dispute was Dr Segar’s appointment as a consultant of Skatool Industries. By Dr Segar’s reckoning, he had since 2001 provided services as a consultant to Skatool Industries, and they are listed in his written testimony as follows: (i) Advice in relation to Skatool Industries’ investment in a manufacturing plant in China; (ii) Advice in relation to the registration of Skatool Marine; (iii) Compilation and editing of Skatool Industries’ first product catalogue; (iv) Advice in relation to the registration of the trade name “Skatool”; (v) Introduction of ship chandlers and glove manufacturers in Sri Lanka to Veronica and ATM; (vi) Assisting Veronica and ATM in negotiating an amicable settlement of a claim for passing off made by a Norwegian company against Skatool Industries.

In 2003, Veronica offered to remunerate Dr Segar for his consultancy services to the tune of $6,000 a month. Dr Segar accepted this offer and duly invoiced Skatool Industries each month. Skatool Industries would then make payment on the invoice. There was, according to Dr Segar, no...