Twin Enterprises Pte Ltd v Lim Heng Wah Peter

• Jurisdiction: Singapore
• Judge: MPH Rubin J
• Judgment Date: 29 November 2000
• Neutral Citation: [2000] SGHC 288
• Court: High Court (Singapore)
• Published date: 30 January 2007
• Year: 2000
• Plaintiff Counsel: Anil Changaroth (Lim & Lim)
• Defendant Counsel: Tan Siah Yong (Piah Tan & Partners)
• Citation: [2000] SGHC 288

29 November 2000

MPH Rubin J

1 This is perhaps the third round in a slugging match between the plaintiffs (Twin Enterprises Pte Ltd) and the defendant (Peter Lim Heng Wah). The first round was some time in 1998 before Khoo J who heard a suit by the plaintiffs against the defendant to recover the balance of a trading account between the parties.

2 The hearing before Khoo J spanned a period of eight days. The background facts as stated by Khoo J and his decision were as follows.

3 The plaintiffs are a company effectively owned by Mr Fung. Mr Fung had known the defendant Mr Lim for many years. In the late 1980's, the Vietnam market was starting to open up. The defendant, who began to spend much time in Vietnam, collaborated with various Singapore companies in the import and export of goods into and out of Vietnam. He acquired much knowledge and experience of doing business there. Mr Fung did not have much of such knowledge and experience. But he had money, or at least good credit rating in Singapore. The two gentlemen decided to team up. In early 1990, they entered into discussions. They arrived at an arrangement by which the defendant would source for goods in Vietnam and send them to the plaintiffs for sale in Singapore and Hong Kong. Rattan was the main commodity envisaged at the beginning, but later on other things like shipping containers and rubber were also included. Mr Fung, on the other hand, would send goods for which there was a demand in Vietnam. In the event these included beer and second-hand motor cycles.

4 The purchases in Vietnam were funded by money sent by Mr Fung or from the proceeds of the sale of goods Mr Fung sent to the defendant. The parties agreed to share equally the profit made on the goods sent to and from Vietnam. Mr Fung was entrusted with the keeping of the accounts.

5 The trading arrangement started in February 1990. Money was handed or remitted to the defendant. Goods including large shipments of beer were sent to him. The defendant in turn sent rattan and other things to or to the account of the plaintiffs. The relationship, however, did not last very long. It appeared that Mr Fung ceased to send any money or goods after August 1991. By October 1991, he had decided to team up with someone else, without telling the defendant. The arrangement with the defendant was all but gone. Mr Fung made reference to difficulty with the proceeds of the large beer shipments sent to the defendant and large unsettled balances in the account as the reason for his allowing the arrangement to come to an end.

6 Mr Fung was entrusted with the keeping of accounts. But neither he nor his secretary Nelly Tan was a trained bookkeeper. They did not use a proper set of account books, nor did they follow any conventional accounting procedure. They had, instead, three hard-cover exercise-type books in which cash advances and the prices and incidental costs of shipments of goods were jotted down, shipment by shipment.

7 The original books were produced at the trial. The pages had a haphazard and amateurish look about them. According to Khoo J, they were an `accountant's nightmare'. Entries were made, some were blanked out or crossed out and corrected. Some pages of one book had been torn out. Mr Fung said that they were "daily workings" of the company, "not official records". However, there might still be method in the madness. Defence counsel, who presumably had seen the books, did not make much of a point of it

8 The plaintiffs' claim was based on a set of statements sent to the defendant in August 1992. These statements were basically, in two parts. First, there was an account of the cash remittances and goods sent to the defendant, as well as goods sent from the defendant (the "remittances and purchases account"), and, secondly, an account of the profit made on goods sent to and from the defendant (profit and loss account). The remittances and purchases account showed a total balance of $686,023.97 in the plaintiffs' favour. There was another statement showing a sum of $62,926.80 in favour of the plaintiffs on account of shipments of sanitary ware. In favour of the defendant was his half share of profit, his share being shown as $120,910.22. The plaintiffs' claim was, in sum, the net balance between the two sets of credits.

9 Mr Fung said that the figures in all these statements were extracted from the books referred to earlier. According to him, the accounting was done, broadly, as follows. The defendant was credited with the cost of the goods sent by the defendant. He was debited with the value of the goods as well as the money sent to him in Vietnam. In respect of these goods, if the defendant confirmed that he had a buyer who had agreed to buy them at a certain price, the defendant would be debited with the price. If there was no confirmed buyer, the defendant would be debited with the price payable by the plaintiffs. The values of these goods and the monies sent to the defendant were shown as "remittances" in the accounts. In respect of the rattan and other goods sent by the defendant to the plaintiffs, the defendant would tell him over the phone how much they cost. Mr Fung would take his word for it, and credit him with the amount. The amounts credited to the defendant for all the shipments are reflected as "Purchases " in the accounts. The profit and loss accounts reflect, basically, the difference between the cost of the goods and the sale price to third parties. [Emphasis added]

10 Both Mr Fung and Nelly Tan said that in the course of the trading arrangement the defendant made regular visits to Singapore. He would visit the plaintiffs' offices. He had the opportunity to look at the account books. Nelly Tan also said that sets of accounts were given to him every few months. The point they sought to make was that the defendant knew all along the contents of the accounts and had not raised any objections (Khoo J however discounted this evidence). The state of the "account books" as described above was such that Khoo J did not see how any account in any meaningful sense could have been given to the defendant. However, it would seem that some time in 1991, nobody knows exactly when, the defendant was provided with partial accountsof remittances and purchases. There was also a set of profit and loss statements dated 15 October 1991 which the defendant admitted to having received. No one was sure when this was given to the defendant. Although dated 15 October 1991, this set of statements, strangely, included some entries dated later.

11 Both Mr Fung and Nelly Tan claimed that copies of credit notes were given to the defendant on his visits, or faxed to him. It was hard to attach much value to the evidence. Khoo J felt that this was probably done haphazardly. He did not think a system or a procedure was in place.1

12 At the trial, the plaintiffs were given leave to amend their statement of claim to add a plea of account stated. However, this was not seriously pursued, and rightly so. There was no regular rendering of accounts, by word or conduct.

13 In the end after dealing with several contentions and legal issues including an aspect of illegality, Khoo J rejected the plaintiffs' claim based on `account stated' and ordered an inquiry and taking of accounts between the parties.

14 Although Khoo J, in arriving at his conclusions thought there was everything to be said for accepting the plaintiffs' evidence rather than the defendant's since the defendant did not appear to be a very impressive witness and rather unhelpful (see para 36 of his judgment) yet he rejected the plaintiffs claim based on account stated. Having rejected it, he ordered that it would be appropriate to order inquiries and taking of accounts and these should encompass the items in the accounts which were disputed by the defendant, excluding certain items and matters in respect of which the learned judge had his specific findings.

15 Subsequent to the order of Khoo J the second round followed and an account and inquiry was taken by the learned assistant registrar. He made his findings on 30 May 2000 allowing or disallowing items. The concluding part of the learned assistant registrar's findings reads as follows:

31 In the light of my findings, the plaintiffs will have to redraw the profit and loss account in order to ascertain each party's half share of the profits, if any, or losses. Only then can a final account be taken of the monies due from one party to the other. Excluding the defendant's half share of the profit, there is presently a sum of $258,294.65 due from the defendant to the plaintiffs, calculated as follows:

(1)	Remittances made to the defendant	$ 3,135,160.35
(2)	Less: Purchases made by the defendant	$ 2,911,350.19
(3)	Less: Reimbursement of the defendant's extraordinary expenses	$ 68,342.31
(4)	Add: The plaintiffs' claim in respect of the sanitary ware transaction	$ 62,926.80
(5)	Add: Housing loan	$ 40,000.00
		$ 258,394.65

32 I therefore make the following orders for the further conduct of this action:

(1) The plaintiffs are to redraw the profit and loss account in accordance with these findings, and shall file and serve the amended profit and loss account within 21 days from the date of this order. The said profit and loss account shall explain in detail how the total for each item on the account is arrived at.

(2) The defendant shall file and serve an affidavit that exhaustively lists the specific discrepancies which the defendant alleges are present in the redrawn profit and loss account, and that provides full particulars of the discrepancies with supporting documentary evidence, if any, within 21 days from the date of service of the redrawn profit and loss account on the defendant.

(3) The plaintiffs shall file and serve an affidavit in reply within 21 days from the date of service of t he defendant's affidavit on the plaintiffs.

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