Sennivalavan s/o Suppaya v Phoenix & Phoenix Pte Ltd and Another
Jurisdiction | Singapore |
Judge | Irene Wu Wei Ling |
Judgment Date | 20 November 2003 |
Neutral Citation | [2003] SGDC 279 |
Published date | 25 July 2005 |
Court | District Court (Singapore) |
Plaintiff Counsel | Srinivasan / Ramesh Kumar (Heng Leong and Srinivasan) |
Defendant Counsel | Lee Terk Yang (Tan Rajah and Cheah) |
Background to trial
1 Initially, the plaintiff, (‘Senni’), brought a claim against the 1st defendant, (‘Phoenix’) for repayment of three loans. After the issue of the Writ, a director of Phoenix, Mdm Teo, wrote on 29 March 2000 through her solicitors to say, inter alia, that Fuad, the managing director of Phoenix, had no authority to borrow money and the company had not been doing business for over 2 years. Senni then added Fuad as 2nd defendant (‘Fuad’) and claimed damages for fraudulent misrepresentation and return of money had and received.
2 Fuad filed a defence. Phoenix entered an appearance but did not file any defence. Senni did not enter default Judgment against Phoenix for fear that it would prejudice his action against Fuad.
3 Senni’s action against Fuad saw protracted interlocutory proceedings which involved four unless orders against Fuad. More of this will be said later. The action was finally set down for trial on 30 October 2002. Two days before the trial on 30 October 2002, Phoenix filed its defence without leave of Court. This was over two years from the date it fell due. Counsel for Phoenix applied orally on the first day of trial for leave to file the defence. The Court ordered that Phoenix file a proper summons in chambers application. The trial on 30 October 2002 was vacated.
Trial of claim against Fuad only
4 On 7 November 2002, Phoenix’s counsel filed a summons in chambers application for leave to file its defence out of time. The Court gave leave with consequential orders for discovery and exchange of affidavits of evidence in chief. New trial dates were fixed from 13 to 17 January 2003.
5 As it turned out, there was no discovery done on the part of Phoenix. Nor did Phoenix file any affidavit of evidence in chief. At a pre trial conference on 8 January 2003, counsel for Phoenix said he had been unable to get instructions and would be applying to discharge himself. The application to discharge was fixed for hearing on the first day of trial on 13 January 2003. No reason was given as to why the application was not taken out earlier, in order that Phoenix could engage new solicitors to be prepared by the time of the trial on 13 January 2003.
6 On the first day of trial on 13 January 2003, a director of Phoenix applied to vacate the trial to engage new counsel. Senni’s counsel objected on thegrounds that it was calculated to delay the proceedings. He pointed to the late filing of its defence, its failure to file affidavits of evidence in chief, and the late application for discharge of solicitor. Late and incomplete discovery, as well as failure to file affidavits of evidence in chief had led to four unless orders made against Fuad at the interlocutory stage.
Trial against Fuad only
7 The trial was fixed for a block of 5 days from 13 to 17 January 2003. Seeni applied to proceed only in its claim alternative against Fuad. I allowed the application. In Chan Kern Miang v. Kea Resources Pte Ltd
Pleadings
8 Although the trial concerned Senni’s claim against Fuad only, the pleadings in the action against Phoenix are set out as well for completeness.
Claim against Phoenix
9 The claim by Senni, was for $195,000, being the total of the loans extended to Phoenix on three dates as follows:
PARTICULARS
Date Amount
16 September 1999 S$75,000
18 September 1999 S$20,000
24 September 1999 S$100,000
Claim against the Fuad
10 Senni’s claim against Fuad was alternative to his claim against Phoenix. Senni claimed that in order to induce Senni to give Fuad the sum of $195,000, Fuad had fraudulently represented to Senni that Phoenix required the loans, that Fuad was authorised by Phoenix to enter into the agreement to borrow the money on behalf of Phoenix, that Fuad was authorised to receive the money on behalf of Phoenix and that the loans would be repaid by Phoenix. Senni relied on Fuad’s representation and handed to Fuad three sums which totaled $195,000.
11 Senni also made an alternative claim for money had and received against Fuad in respect of the sum of $195,000. In closing, counsel for Senni also argued for the corporate veil of Phoenix be lifted.
Defence filed by Fuad
12 Fuad’s defence did not admit Senni’s loans to Phoenix and put him to strict proof. He alleged that Senni dealt with Phoenix and there was no privity of contract between Senni and himself. Fuad alleged that he did not receive $195,000 or any part thereof from Senni.
Reply to Fuad’s defence
13 Senni alleged that Fuad received $240,000 from Senni, of which $195,000 originated from Senni and $45,000 from Coastland Investment Pte Ltd (‘Coastland’) and or Gunasegaran (‘Guna’).
PARTICULARS |
|
|
|
|
Date |
Location |
Amount Senni handed to Fuad |
Amount from Senni |
Amount from Guna |
16/9/99 |
Phoenix office |
$45,000 |
$10,000 |
$35,000 |
18/9/99 |
KFC Restaurant |
$95,000 |
$85,000 |
$10,000 |
24/9/99 |
Phoenix office |
$100,000 |
$100,000 |
|
14 Senni pleaded that Fuad, as director of Phoenix, had confirmed receipt of the sums from Senni by way of the four documents (‘the Four Receipts’):
(1) A document dated 16 September 1999 wherein Fuad acknowledged receipt of $45,000, described as part payment of a debt of $120,000;
(2) A document dated 16 September 2000 wherein Fuad acknowledged receipt of $120,000, described as consideration of the whole debt of S$120,000;
(3) A document dated 18 September 1999 wherein Fuad acknowledged receipt of $20,000;
(4) A document dated 24 September 1999 wherein Fuad acknowledged receipt of $100,000.
Defence of Phoenix
15 Phoenix admitted taking a loan from Senni but pleaded that the amount was only $80,000. It alleged that Senni and Guna lent the following:
Senni $ 80,000
Guna $115,000
$195,000
16 Phoenix pleaded that Judgment (it was in fact a Judgment in default) had been entered by Coastland for $115,000 against Phoenix. Phoenix alleged that Fuad had authority to act on its behalf. Phoenix pleaded Senni’s letter of demand of 17 February 2000 for $195,000 and $67,500 interest.
Background Facts
17 It was common ground that Fuad was the only person who was director and majority shareholder of Phoenix from date of incorporation to the time of the transactions. He held 80,000 out of its 110,000 shares. Fuad was also the managing director of Phoenix. Senni met Fuad at Fuad’s home when he was engaged as photographer at a party for Fuad’s daughter. There ensued meetings at which they discussed business opportunities. Phoenix issued a name card for Senni as ‘ finance executive’ of Phoenix.
18 It was common ground that Senni handed over cash to Fuad. What was in dispute was the amount and the purpose. Fuad’s case was that Senni handed over money because Senni wished to invest in Phoenix to revive its business. Senni’s version was the money was loaned to Phoenix in reliance on Fuad’s representation that Phoenix required the loans in order to execute the Coastland deal. As to amount, Senni’s case was he handed over $195,000, of which $30,000 came from Coastland or Guna. Senni relied on inter alia the Four Receipts as evidence of the amounts handed over. It was common ground that the Four Receipts were prepared by Fuad himself. Fuad kept shifting his position on the amount he had received. More of this will be said later.
19 It was common ground that Phoenix was involved in a deal with Coastland. By a letter of 25 July 1999, Phoenix offered Coastland a refinancing facility of $17 million. The letter provided for a 5% commission for Phoenix. Senni signed the letter of offer which was duly accepted by Coastland. The letter provided for payment of a commitment sum of $40,000 in cash. According to the statement of claim filed by Coastland, which was not defended, it paid the $40,000 on 26 July 1999, and additional sums of $45,000 and $30,000 respectively on 18 September 1999 and shortly thereafter. It was common ground that the Coastland deal was aborted. The monies paid were not refunded. Coastland sued Phoenix. Phoenix did not defend the action and Judgment in default was entered against Phoenix.
20 Another deal took place shortly before the Coastland deal. It concerned Hotel Tripless Pte Ltd (‘Hotel Tripless’), a company in India. By a letter of offer of 19 July 1999, Phoenix offered a term facility of US$600,000 secured by properties in India and personal guarantees. The letter provided for a commitment fee of $10,000. Pursuant thereto, the sum of $10,000 was paid by way of cheque...
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