Thomson Rubbers (India)

• Jurisdiction: Singapore
• Judgment Date: 29 November 2011
• Date: 29 November 2011
• Docket Number: Suit No228 of 2011 (Registrar's
• Court: High Court (Singapore)

Thomson Rubbers (India) Pte Ltd

Plaintiff

and

Tan Ai Hock

Defendant

[2011] SGHC 256

Lai Siu ChiuJ

Suit No228 of 2011 (Registrar's Appeal No259 of 2011)

High Court

Bills of Exchange and Other Negotiable Instruments—Consideration—Sufficiency—Bills of Exchange and Other Negotiable Instruments—Dishonour—Cheques purportedly issued under duress—Cheques purportedly issued conditionally—Bills of Exchange And Other Negotiable Instruments—Legal proceedings—Summary judgment—Applicable legal principles

Thomson Rubbers (India) Private Limited (‘the plaintiff’) entered into three contracts (‘the Thomson Rubbers Contracts’) with a company called Third Wind Rubber Pte Ltd (‘Third Wind’), of which Tan Ai Hock (‘the defendant’) was a shareholder and director. Pursuant to the Thomson Rubbers Contracts, Third Wind was to supply a total of 504mt of natural rubber to the plaintiff between September 2010 and October 2010. An advance payment of US$559,641.60 (‘the advance payment’) was to be paid by the plaintiff to the defendant under the Thomson Rubbers Contracts and was duly paid. Third Wind was subsequently unable to perform the Thomson Rubbers Contracts because it was unable to obtain natural rubber from its own supplier. In an attempt to resolve matters amicably with the plaintiff, the defendant had a meeting with an agent of the plaintiff in Vietnam. Thereat, the defendant signed a letter of undertaking and a settlement agreement. Pursuant to the letter of undertaking, in consideration for the plaintiff's forbearance in commencing legal proceedings against Third Wind, the defendant undertook to repay the plaintiff the advance payment plus damages. The parties agreed upon an exchange rate, and the sum payable pursuant to the letter of undertaking was US$559,641.60 (equivalent to S$709,065). The settlement agreement detailed the damages suffered by the plaintiff arising from the defendant's breach of the Thomson Rubber Contracts, and quantified the same at US$483,305.74 or S$616,698.

Upon his return to Singapore from the meeting in Vietnam, the defendant issued to the plaintiff two cheques for the sums of S$709,065 and S$616,698 (‘the two cheques’) pursuant to the letter of undertaking and the settlement agreement. However, both cheques were dishonoured when presented for payment by the plaintiff. The plaintiff commenced this suit claiming the aforesaid two sums as the subject of the two dishonoured cheques. The plaintiff applied for summary judgment pursuant to O 14 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (‘Rules of Court’). The defendant raised three defences to the plaintiff's claim: that he was under duress when issuing the cheques; the cheques were issued without consideration; and that the cheques were issued with an express condition. The assistant registrar granted the defendant unconditional leave to defend the plaintiff's claim instead of awarding summary judgment to the plaintiff on its claim. Against this decision, the plaintiff appealed.

Held, allowing the appeal and granting summary judgment to the plaintiff on its claim:

(1) The defendant's allegations of duress were seriously wanting. While the defendant alleged that various threats were made by the plaintiff to his wife, Tan Heok Tze (‘Mdm Tan’), and daughter, the defendant failed to file any affidavits from Mdm Tan or his daughter in corroboration. As a result, the defendant's allegations vis-à-vis the threats made against Mdm Tan and his daughter were unsubstantiated. Further, the defendant's conduct on his own evidence was wholly inconsistent with that of a person under duress: at [19].

(2) The defendant's allegation of having been coerced into signing the letter of undertaking and settlement agreement did not impact upon the voluntary issuance of the two cheques. This was because the defendant issued the two cheques only upon his return to Singapore when there was no longer any operative duress if indeed it existed in the first place: at [19].

(3) The defendant's claim, that a triable issue arose in respect of whether the plaintiff furnished adequate consideration for the two cheques, was completely devoid of merit. It was trite law that forbearance to enforce a claim to a debt constituted sufficient consideration. Pursuant to cl 5 of the letter of undertaking, the defendant agreed to pay the plaintiff the sum of US$559,641.60 plus damages ‘ [i]n consideration of [the plaintiff's'] forbearance in commencing legal proceedings against Third Wind’: at [20] and [21].

(4) The defendant's argument, that the two cheques were issued to the plaintiff with the express condition that the latter was to give notice to the defendant prior to presenting the two cheques for payment, failed in limine. Section 3 of the Bills of Exchange Act (Cap 23, 2004 Rev Ed) (‘the Act’) expressly defines a bill of exchange as an ‘unconditional order in writing’ [emphasis added]: at [23].

Associated Development Pte Ltd v Loong Sie Kiong Gerald [2009] 4 SLR (R) 389; [2009] 4 SLR 389 (refd)

Carlos v Fancourt (1794) 5 TR 482; 101 ER 272 (folld)

Goh Chok Tong v Chee Soon Juan [2003] 3 SLR (R) 32; [2003] 3 SLR 32 (refd)

Bills of Exchange Act (Cap 23, 2004 Rev Ed) ss3, 47, 57, 73 (1)

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O14, O14 r2 (8)

Low Chai Chong (Rodyk & Davidson LLP), WuYu Liang (Wu LLC) for the plaintiff

Chenthil Kumarasingam (Lawrence Quahe & WooLLC) for the defendant.

Lai Siu Chiu J

1 This was an appeal by Thomson Rubbers (India) Private Limited (‘the plaintiff’) in Registrar's Appeal No 259 of 2011...