Jaya Sudhir a/l Jayaram v Tong Seak Kan and another

• Jurisdiction: Singapore
• Judge: Hoo Sheau Peng JC
• Judgment Date: 27 September 2016
• Neutral Citation: [2016] SGHC 204
• Date: 27 September 2016
• Docket Number: Suit No 724 of 2014 (Registrar’s Appeal No 154 of 2016)
• Published date: 29 September 2016
• Plaintiff Counsel: Tan Teng Muan and Loh Li Qin (Mallal & Namazie)
• Defendant Counsel: Harish Kumar, Jonathan Toh and Josephine Chee (Rajah & Tann Singapore LLP)
• Court: High Court (Singapore)
• Hearing Date: 27 May 2016,16 May 2016,30 June 2016
• Subject Matter: Civil Procedure,Striking out,Pleadings

Hoo Sheau Peng JC:

This was an appeal by the defendant, Mr Jaya Sudhir a/l Jayaram (“the defendant”), against the decision of Assistant Registrar Nicholas Poon (“the AR”) to strike out certain portions of the Defence under O 18 r 19(1) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”). These portions concerned allegations that the plaintiffs, Mr Tong Seak Kan (“the first plaintiff”) and Kensington Park Holdings Limited (“the second plaintiff”), had committed or procured acts of harassment against the defendant (“the alleged harassment”). The appeal centred on the relevance of the alleged harassment. After considering the parties’ arguments, I concluded that the AR was right to strike out these portions, and dismissed the appeal. The defendant has appealed against my decision. I now provide my reasons.

Background Parties

The first plaintiff is a Macau businessman, while the second plaintiff is a company incorporated in the British Virgin Islands. Collectively, I shall continue to refer to them as “the plaintiffs”. While the first plaintiff claimed that he controlled the second plaintiff at all material times, this fact was not admitted by the defendant. A Malaysian businessman, the defendant controlled the following three companies: Firstfield Limited (“Firstfield”), Al-Rafidian Holdings Pte Ltd (“Al-Rafidian”) and Petunia Venture Corp (“Petunia”).

Statement of Claim

In the Statement of Claim (Amendment No 1) (“Statement of Claim”), the plaintiffs claimed against the defendant various sums of money. 18 sums of money were listed in Annex A of the Statement of Claim. I shall refer to each of these payments as “Payment (1)”, “Payment (2)”, and so on. The plaintiffs also claimed for two other sums of money which the defendant was allegedly responsible for. For the purposes of this appeal, I shall elaborate on Payments (1) to (18), and the documents which the defendant purportedly signed to acknowledge indebtedness to the plaintiffs.

For Payments (1) to (5), the plaintiffs pleaded that they had contracted with Firstfield for services relating to a planned project for the supply of liquefied natural gas from Indonesia. In the course of the performance of this agreement, at the defendant’s request, the plaintiffs transferred Payments (1) and (2) to Hesselink Investments Limited and Payments (3) to (5) to Al-Rafidian.

Additionally, the plaintiffs asserted that between 2009 and 2010, the plaintiffs had extended a number of personal loans to the defendant. These were Payments (6) to (18). Although Payment (17) was an advance of US$250,000 to a person known as Rianto, who was a business associate of the defendant, the defendant agreed to be responsible for the amount advanced.

In connection with Payment (16), the defendant signed a loan agreement dated 5 February 2010 (“5 February 2010 Loan Agreement”). In respect of Payments (1) to (16), the defendant signed a document dated 5 February 2010 titled “List of Loans to Mr. Jaya Sudhir”, acknowledging his indebtedness (“5 February 2010 Acknowledgement”). Subsequently, the defendant signed another document, dated 3 March 2010, titled “List of Loans to Mr. Jaya Sudhir” wherein he acknowledged his indebtedness for Payments (1) to (18) (“3 March 2010 Acknowledgement”). This superseded the 5 February 2010 Acknowledgement. Subsequently, on 30 December 2010, the plaintiffs entered into an agreement by deed (“30 December 2010 Deed”) under which Al-Rafidian and Petunia would be liable to repay sums owed under Payments (6), (9) and (10), and the defendant would personally guarantee the repayment obligations of Al-Rafidian and Petunia.

Al-Rafidian, Petunia and the defendant failed to make the repayments as agreed in the various documents. Based on the 30 December 2010 Deed, the plaintiffs claimed against the defendant for Payments (6), (9) and (10). Based on the 3 March 2010 Acknowledgement, the plaintiffs claimed against the defendant for the remaining 15 payments.

Defence

In his Defence, the defendant denied liability in any way to the plaintiffs. The defendant contended that the various sums of money were paid in connection with business ventures among the parties for which he was not liable. There were no personal loans to him.

Among many other disputes, the defendant contested the enforceability of the documents mentioned at [6] above. Two main grounds were raised. First, the defendant alleged that the documents were part of a sham in that the defendant had been tricked into entering into them by the first plaintiff’s representations that the documents were meant to assure the plaintiffs’ creditors and the Macau court as to the first plaintiff’s ability to pay his debts. The documents were not meant to create legally binding obligations, and were not meant to be enforced against the defendant. Second, the documents were created to defraud the first plaintiff’s creditors and the Macau court, and were void for illegality.

In addition to the documents mentioned at [6] above, the defendant pleaded that at the first plaintiff’s request, the defendant entered into two more agreements with the second plaintiff on 28 February 2011 (“February 2011 Agreements”). These have not been pleaded in the Statement of Claim. The February 2011 Agreements stated that Al-Rafidian and Petunia had obtained a series of loans from the second plaintiff between 2008 to 2010 and that the defendant agreed to guarantee the repayment of those loans. Again, the defendant alleged that prior to signing the February 2011 Agreements, the first plaintiff had represented that the sole aim was to deceive the first plaintiff’s creditors and the Macau court as to the first plaintiff’s ability to pay his debts, and that the February 2011 Agreements would not be used for any other purpose. Again, these agreements were said to be unenforceable, and void for illegality.

Contrary to these representations, well before any legal proceedings were brought, the plaintiffs engaged in a campaign of harassment against the defendant and Al-Rafidian so as to coerce the defendant into performing the obligations under the February 2011 Agreements. As I mentioned at the outset, the relevance of the alleged harassment was at the heart of the appeal. I set out more details of the allegations at [17] below.

The proceedings below

Before the AR, the plaintiffs applied to strike out two aspects of the Defence. The first aspect concerned portions relating to the February 2011 Agreements. The second aspect concerned the alleged harassment, as set out from the last sentence of para 49 to the end of para 52 of the Defence. The AR conducted two hearings. For clarity, I will summarise each hearing separately as the application was complicated by the introduction, after the first hearing, of certain proposed amendments to the Defence.

The first hearing

At the first hearing, counsel for the plaintiffs pointed out that the plaintiffs were not relying on the February 2011 Agreements, and that these were not relevant to the dispute. As for the alleged harassment, it was not even probative of whether the February 2011 Agreements formed a sham or not. What was material was whether the defendant was tricked into signing the February 2011 Agreements, and not the mode of attempted enforcement chosen by the plaintiffs afterwards. The alleged harassment was irrelevant, and therefore scandalous. It also unnecessarily expanded the scope of the evidence required for the trial.

Counsel for the defendant replied that the February 2011 Agreements were connected to the documents which the plaintiffs were seeking to enforce. It was submitted that the alleged harassment was relevant to the legality of the whole transaction because the plaintiffs would not have had any reason to resort to harassment if the transaction had been legal. Counsel for the defendant added that he intended to amend the Defence. The amendments would make the relevance of the alleged harassment more apparent.

The AR indicated that he considered the February 2011 Agreements to be relevant because they overlapped with the prior documents. Therefore, the trial judge would have to consider which documents were binding. Further, the AR considered that the February 2011 Agreements formed part of the necessary context of the transactions. As for the alleged harassment, he adjourned the application to allow the defendant to propose the necessary amendments so as to assess the relevance of the alleged harassment in light of any clarifications to the Defence.

The second hearing

The defendant did not comply with the timeline imposed for providing a draft amended Defence. It was only on the day of the second hearing that a draft was provided, with proposed amendments to paras 51 and 52 (“the first draft amended Defence”). Nonetheless, in making his decision, the AR considered the first draft amended Defence.

Before going to the proposed amendments, I set out in more detail the alleged harassment as pleaded in paras 49 to 50 of the Defence. At para 49, it was alleged that the defendant and Al-Rafidian (at its offices) received “harassing telephone calls for repayment of alleged debts owed by the Defendant, [Al-Rafidian] and [Petunia]” (at para 49(a)), as well as “malicious fliers, notices and purported Chinese newspaper articles”, some of which “featured the photographs of the Defendant and his wife”, alleging non-payment of those debts (at para 49(b)). The fliers were said to have been pasted and distributed around the vicinity of the premises of the defendant and Al-Rafidian. The Defence also alleged unspecified acts of harassment by “debt collectors and unsavoury characters” and that a letter had been sent to one employee’s spouse threatening to send embarrassing fliers and brochures to the spouse’s workplace (at para 50).

At para 51 of the Defence, it was alleged that the defendant communicated with the first plaintiff...