Sutanto Henny v Suriani Tani also known as Li Yu and Another

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 14 January 2004
• Neutral Citation: [2004] SGHC 7
• Court: High Court (Singapore)
• Published date: 20 January 2004
• Year: 2004
• Plaintiff Counsel: Lee Mun Hooi and Wong Nan Shee (Lee Mun Hooi and Co)
• Defendant Counsel: Julian Tay Wei Loong (Lee and Lee)
• Subject Matter: Bills of Exchange and Other Negotiable Instruments,Cheques,Whether cheques were drawn by agent with principal's authority,Whether there was sufficient consideration,Whether non-presentment for payment precluded holder from suing.,Civil Procedure,Striking out,Whether the plaintiff's claim is hopeless or unarguable.
• Citation: [2004] SGHC 7

1 This is an appeal by the plaintiff arising from a decision of Assistant Registrar Dawn Tan allowing the second defendant’s application to strike out the plaintiff’s claim as disclosing no reasonable cause of action, or as being frivolous and vexatious or an abuse of process. I allowed the plaintiff’s appeal. The second defendant has on 4 November 2003 appealed against my decision.

2 The facts of the case are comparatively short. The plaintiff is Henny Sutanto (“Sutanto”) and the first defendant is Suriani Tani, also known as Li Yu (“Suriani”). The latter is the sister-in-law of the second defendant, Chandra Suwandi (“Chandra”). Chandra is the owner of a sole proprietorship, Global Standard Marketing (“Global”). Sutanto had from time to time made loans to Suriani in the total sum of $670,000. In purported partial repayment of the loans, Suriani gave Sutanto five cheques. Two of the cheques for the total sum of $150,000 were apparently drawn on Suriani’s account. The other three cheques for a total sum of $515,000 were drawn on Global’s account with United Overseas Bank Limited, Bukit Timah branch (“UOB account”). The three UOB cheques are: no 281249 dated 26 December 2001; no 021297 dated 26 January 2002 and no 021300 dated 30 January 2002.

3 The three UOB cheques were not presented for payment on their respective due dates. According to Sutanto, she did not present the UOB cheques for payment as she was told by Suriani not to do so. During the proceedings, it transpired that Suriani had on or before 28 January 2002 placed a stop payment notice on all three cheques drawn on Global’s UOB account. In this action, the plaintiff as holder of the three UOB cheques is suing the second defendant as drawer.

4 On 9 May 2003, Sutanto obtained default judgment against Suriani.

5 The circumstances under which a court will strike out a claim under O 18 r 19 of the Rules of Court (Cap 322, R 5, 1997 Rev Ed) have been discussed in many authorities (see The Osprey [2000] 1 SLR 281; Tan Eng Khiam v Ultra Realty Pte Ltd [1991] SLR 798). As this is a summary process, the legal position is that the power should only be used in “plain and obvious cases” where the claim is simply unarguable.

6 On the striking out of an action as disclosing no reasonable cause of action, the Court of Appeal in Gabriel Peter & Partners v Wee Chong Jin [1998] 1 SLR 374 held that as long as the statement of claim disclosed some cause of action, or raised some question fit to be decided at trial, the action should not be struck out. The fact that a case is weak and is not likely to succeed is not a ground for striking out. As for the words “frivolous and vexatious”, they have been interpreted to mean actions which are “obviously unsustainable” or “wrong” (see Singapore Court Practice 2003 (LexisNexis, 2003) at 538).

7 Applying the well-accepted principles explained in the authorities in relation to striking out hopeless cases, I am not convinced that it is sufficiently clear at this stage of the proceedings that, as a matter of fact and law, there is no legal basis to sue the second defendant. The facts upon which the legal basis is founded are not yet established. Depending upon how the evidence emerges at trial, the claim may not be made out, but at this stage, I cannot say that it is hopeless or unarguable.

8 Counsel for the second defendant, Mr Julian Tay, argues that the second defendant is not the drawer of the three UOB cheques as he was not the signatory. Therefore, the plaintiff has no cause of action against the second defendant. A “drawer” has been defined as “the person who signs a bill of exchange giving an order to another person, the drawee, to pay the amount mentioned therein” (see Thomson’s Dictionary of Banking, (11th Ed, 1965) at 231). Section 23(1) of the Bills of Exchange Act (Cap 23, 1999 Rev Ed) (“the Act”) provides that no person shall be liable as drawer, indorser or acceptor of a bill who has not signed it as such.

9 I was not persuaded by counsel’s submission. Whilst it is not disputed that it was Suriani who had signed the three UOB cheques, the second defendant could be sued as drawer if the UOB cheques were signed on his behalf. The plaintiff would have the right to enforce payment through or under that signature. Section 26(2) of the Act provides that in determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is written, the construction most favourable to the validity of the instrument is to be adopted.

10 The name of Global as the account holder was printed on the UOB cheques. Suriani was an authorised signatory on the UOB account and was allowed to sign cheques on behalf of the second defendant in her own name. It is...