United States Trading Company Pte Ltd v Ting Boon Aun and another

• Jurisdiction: Singapore
• Judgment Date: 30 January 2008
• Date: 30 January 2008
• Docket Number: Suit No 387 of 2007 (Registrar's Appeal No 331 of 2007)
• Court: High Court (Singapore)

United States Trading Co Pte Ltd

Plaintiff

and

Ting Boon Aun and another

Defendant

[2008] SGHC 15

Judith Prakash J

Suit No 387 of 2007 (Registrar's Appeal No 331 of 2007)

High Court

Civil Procedure–Summary judgment–Whether defendant bound by four corners of defence–Partnership–Partners and third parties–Firm liable for acts of partner–Partner of firm absconding with money received by firm but intended for another party–Whether money was received in course of firm's business under s 11 (b) Partnership Act (Cap 391, 1994 Rev Ed)–Whether other partners liable to make good loss of money

The first defendant (“Jason Ting”) was at all material times an employee of Philips Electronics Singapore Pte Ltd (“Philips Electronics”). His designation was “Chemical and Raw Materials Manager, Purchasing Department, Philips COC Singapore”. The plaintiff was a supplier of aluminium ingots and came into contact with Jason Ting while doing business with Philips Electronics. On 11 September 2006, Jason Ting asked the plaintiff for a loan purportedly on behalf of Philips Electronics. He proposed that the loan be repaid by repricing the existing contract price of aluminium ingots to be purchased by Philips Electronics from the plaintiff. He stated that the payee of the loan should be “Philips COC Singapore”, which the plaintiff believed was a subsidiary of Philips Electronics. Philips COC Singapore (“the firm”) was, however, a partnership registered on 13 September 2006 by Jason Ting and the second defendant, his brother, as its only partners. The firm's principal activity was described as “General Wholesale Trade (including General Importers and Exporters)”. After the plaintiff handed Jason Ting a cheque for the loan amount, Jason Ting withdrew the money from the firm's account and absconded with his family. The plaintiff sued Jason Ting and the second defendant for a return of the loan under ss 11 (b) and 12 of the Partnership Act (Cap 391, 1994 Rev Ed) (“the Act”), and applied for summary judgment. The second defendant denied the plaintiff's claim and pleaded ignorance of everything done by Jason Ting. He also argued that giving loans was not part of the firm's business. Jason Ting could not be found. The plaintiff succeeded before the assistant registrar who did not accept the second defendant's unpleaded argument that the plaintiff's loss was due to its own negligence. The second defendant appealed.

Held, allowing the appeal in part:

(1) The principle that a defendant was not bound by the four corners of his pleadings in O 14 Rules of Court (Cap 322, R 5, 2006 Rev Ed) proceedings had to be re-looked at in the light of amendments to the Rules of Court requiring the defence to be filed before the summary judgment application could be made. It behoved a defendant to set out all his defences in his defence so a plaintiff could properly assess the chances of a summary judgment application. A defendant could, however, raise a new defence in his affidavit if there were good reasons for not raising the defence in his pleading. None were provided here: at [25] and [26].

(2) Under s 11 (b) of the Act, once money was received by the firm “in the course of its business”, the firm would be liable to make good even if the money was dissipated by one of its partners on a frolic of his own unknown to the other partners: at [28].

(3) The second defendant was not able to raise a triable issue concerning whether the loan money was received by the firm “in the course of its business”. There was no objective evidence to establish that the business of the firm was anything other than what Jason Ting held it out to be from time to time: at [35].

(4) The judgment below was for an excessive amount because the plaintiff had apparently already recovered part of the loan from Philips Electronics: at [36] and [37].

Lin Securities (Pte) v Noone & Co Sdn Bhd [1989] 1 MLJ 321 (refd)

Pembinaan V-Jaya Sdn Bhd v Binawisma Development Sdn Bhd [1987] 2 CLJ 446 (refd)

Partnership Act (Cap 391,1994 Rev Ed)s 11 (b) (consd);s 12

Rules of Court (Cap 322,R 5, 2006 Rev Ed)O 14

Rules of the High Court 1980 (PU (A) 50/1980) (M'sia) O 14r 4 (1)

Melvin Lum (Rajah & Tann) for the plaintiff

Lee Mun Hooi (Lee Mun Hooi & Co) for the second defendant.

Judgment reserved.

Judith Prakash J

1 The plaintiff in this action, United States Trading Co Pte Ltd, made a successful application for a summary judgment against the second defendant, Ting Boon Kiat (“TBK”). TBK has appealed.

The claim

2 TBK and his elder brother, Ting Boon Aun also known as Jason Ting (“Jason Ting”), the first defendant in this action, were the partners of a partnership firm known as Philips COC Singapore (“the firm”). The firm was formally registered as a partnership at the Accounting & Corporate Regulatory Authority (“ACRA”) on 13 September 2006 and its registration number was 53076627B. There were only two partners of the firm, the two siblings, and the firm's place of business was at TBK's residential address. The principal activity of the firm, according to the search report, was that of “General Wholesale Trade (including General Importers and Exporters)”. The firm was deregistered on 15 January 2007.

3 Jason Ting was at all material times a full-time employee of Philips Electronics Singapore Pte Ltd (“Philips Electronics”), a member of the well-known multinational Philips group which deals in electronic and consumer products among other things. Jason Ting's designation in Philips Electronics according to his correspondence was “Chemical and Raw Materials Manager, Purchasing Department, Philips COC Singapore”. The acronym “COC” stands for “Centre of Competence”.

4 The plaintiff company is in the business of supplying aluminium ingots and, according to the statement of claim, had supplied its products to Philips Electronics for more than 15 years. In the course of its business with Philips Electronics, the plaintiff came into contact with Jason Ting. According to the statement of claim, on 11 September 2006, Jason Ting, purportedly acting on behalf of Philips Electronics, asked the plaintiff for a loan of US$360,000. He proposed that the loan should be repaid by a repricing of the existing contract price arranged in respect of an order that Philips Electronics had placed with the plaintiff for 1500mt of aluminium ingots. The original price for these goods was US$2,580 per metric ton and in order to repay the loan, Jason Ting suggested that the price be adjusted to US$2,850 per metric ton.

5 On 18 September 2006, using the letterhead of Philips Electronics, Jason Ting sent a letter to the plaintiff stating that on behalf of Philips Electronics, he accepted the plaintiff's offer to lend it US$360,000. The letter set out the terms of the loan including the interest payable and the method of repayment. On the same day, using his office e-mail account, Jason Ting sent an e-mail to the plaintiff's managing director, Mr Ross, telling him that the payee in respect of the loan should be “Philips COC Singapore”. Due to this statement the plaintiff believed that “Philips COC Singapore” was one of the subsidiaries of Philips Electronics and handled such loan transactions for the latter.

6 The plaintiff duly handed Jason Ting a cheque for US$360,000 drawn in favour of Philips COC Singapore. This cheque was paid into the firm's account with United Overseas Bank Limited (“UOB”) in Singapore and the money was credited into the account on or about 21 September 2006. Sometime thereafter, Jason Ting withdrew the money and absconded with his family. To date, he has not been found.

7 This action was commenced in June 2007. On 15 August 2007, the plaintiff obtained judgment in default of...