Viet Hai Petroleum Corporation v Ng Jun Quan and another and another matter

• Jurisdiction: Singapore
• Judgment Date: 26 April 2016
• Date: 26 April 2016
• Docket Number: Suit No 409 of 2014 and Summons No 519 of 2016
• Court: High Court (Singapore)

Viet Hai Petroleum Corp

and

Ng Jun Quan and another and another matter

[2016] SGHC 81

Chua Lee Ming JC

Suit No 409 of 2014 and Summons No 519 of 2016

High Court

Agency — Apparent authority — Whether employees of defendants had apparent authority to bind defendants to agreement — Whether name cards given by employees which were genuine and showed their designations were representations of authority by principal

Civil Procedure — Stay of proceedings — Stay of execution — Whether fact that plaintiff had threatened bankruptcy proceedings weighed in favour of stay — Whether fact that plaintiff was foreign company unregistered in Singapore weighed in favour of stay

Debt and Recovery — Account stated — Mere account stated in agreement — Acknowledgment of debt owed — Whether defendants cknowledged debt — Whether plaintiff needed to prove existence of underlyingdebt

Restitution — Money had and received — Whether plaintiff showed prima facie case of claim for money had and received

The plaintiff sued the defendants to recover the sum of US$1,690,874 based on an account stated between the plaintiff and WE Bunker, a partnership in which the defendants were partners at the material time. Alternatively, the plaintiff claimed the sum as money had and received by the defendants on the ground of total failure of consideration.

The plaintiff alleged that in an account stated in writing with WE Bunker (“the Agreement”), WE Bunker acknowledged that it owed the plaintiff US$1,690,874 and promised to pay the amount by 7 May 2012. The Agreement was signed on behalf of the plaintiff by its founding shareholder, Mr Nguyen Du Luc (“Nguyen”), and on behalf of WE Bunker by its Chief Operation Officer (“COO”), Mr Saiful Alam bin Abdul Samad (“Saiful”), and its Vietnam representative, Mr Tran Quang Luong (“Tran”). WE Bunker failed to make payment.

The defendants made a submission of no case to answer, submitting that the plaintiff had failed to show a prima facie case that: (a) there were underlying transactions from which the account stated was derived; (b) Saiful and/or Tran had the authority to bind WE Bunker when they signed the Agreement; and (c) it had legal capacity to bring this action.

After judgment was entered for the plaintiff, the defendants filed an appeal and applied for an unconditional stay of execution of the judgment pending appeal.

Held, allowing the plaintiff’s claim but granting a conditional stay of execution:

(1) The expression “account stated” could mean: a mere account stated, a real account stated, or an account stated for valuable consideration. A mere account stated was an absolute acknowledgment by a defendant of a debt owed to the plaintiff. The Agreement in the present case was a mere account stated. The plaintiff merely had to show a prima facie case that the Agreement was signed by someone who had the authority to bind WE Bunker. This would be prima facie proof of the defendants’ acknowledgment of the debt. The plaintiff did not bear the burden of proving that the underlying debts existed. Instead, the defendants bore the burden of proving that the underlying debts did not exist or were not enforceable against them: at [21], [26] and [27].

(2) The Agreement was binding on WE Bunker. A business card that was genuine and gave an agent’s status could be an adequate representation by the principal of an agent’s apparent authority. The name card given by Saiful bore WE Bunker’s logo, its address, Saiful’s designation and his contact numbers. There was no reason for Nguyen to doubt the authenticity of Saiful’s card. Saiful’s title as COO was a representation that he had a sufficiently senior appointment that carried with it the authority to bind WE Bunker. Tran did not have apparent authority to bind WE Bunker. His role was to act as liaison between the plaintiff and WE Bunker for the purchase of oil. Nevertheless, it was sufficient that Saiful had apparent authority: at [35], [36], [38], [39] and [40].

(3) Based on the legal opinion provided by the plaintiff’s witness, a certified lawyer in Vietnam, and in the absence of any contrary evidence on Vietnamese law by the defendants, there was a prima facie case that the plaintiff had the legal capacity to bring this action: at [41].

(4) The plaintiff also succeeded in its alternative claim for money had and received. The Agreement was evidence of WE Bunker’s admission of the amounts received from the plaintiffs. Taken together with the plaintiff’s evidence that WE Bunker failed to fulfill its obligations in respect of the balance amount of US$1,690,874, the Agreement was prima facie evidence of the plaintiff’s claim for money had and received: at [42] and [44].

(5) The fact that the plaintiff had threatened bankruptcy proceedings against the defendants leaned in favour of a stay. However, the fact that the plaintiff was a foreign company unregistered in Singapore, which appeared to conduct its business in a manner which was highly questionable and unreliable, was insufficient to warrant a stay. As the plaintiff was agreeable to a stay on condition that the defendants pay $1m into court, an order was made in those terms: at [51] to [53].

Alwie Handoyo v Tjong Very Sumito [2013] 4 SLR 308 (folld)

Baltimore County, Maryland v Archway Motors, Inc 370 A 2d 113 (1977) (distd)

Bansal Hemant Govindprasad v Central Bank of India [2003] 2 SLR(R) 33; [2003] 2 SLR 33 (folld)

Cathay Theatres Pte Ltd v LKM Investment Holdings Pte Ltd [2000] 1 SLR(R) 15; [2000] 1 SLR 701 (folld)

Denis Matthew Harte v Tan Hun Hoe [2001] SGHC 19 (folld)

Gobind Lalwani v Basco Enterprises Pte Ltd [1998] 3 SLR(R) 1019; [1999] 3 SLR 354 (folld)

Gurney, Becker & Bourne, Inc v Benderson Development Co, Inc 47 NY 2d 995 (1979) (distd)

Harris v Charalambous [2013] EWHC 1317 (QB) (folld)

Heperu Pty Ltd v Morgan Brooks Pty Ltd (No 2) [2007] NSWSC 1438 (folld)

Lee Sian Hee v Oh Kheng Soon [1991] 2 SLR(R) 869; [1992] 1 SLR 77 (folld)

Lena Leowardi v Yeap Cheen Soo [2015] 1 SLR 581 (folld)

Lim Swee Khiang v Borden Co (Pte) Ltd [2006] 4 SLR(R) 745; [2006] 4 SLR 745 (folld)

Martin v Britannia Life Ltd [1999] All ER (D) 1495 (folld)

Perpetual Trustees Australia Ltd v Heperu Pty Ltd [2009] NSWCA 84 (refd)

Sigma Cable Co (Pte) Ltd v NEI Parsons Ltd [1992] 2 SLR(R) 403; [1992] 2 SLR 1087 (folld)

Siqueira v Noronha [1934] AC 332 (folld)

Strandore Invest A/S v Soh Kim Wat [2010] SGHC 174 (folld)

Viknesh Dairy Farm Pte Ltd v Balakrishnan s/o P S Maniam [2015] SGHC 27 (folld)

Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 57 r 15(1), O 57 r 16(4) Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) s 35

Tang Gee Ni (G N Tang & Co) for the plaintiff;

Mohamed Baiross, Rebecca Chia and Anand George (I.R.B. Law LLP) for the defendants.

[Editorial note: The defendants’ appeals to this decision in Civil Appeals Nos 4 and 25 of 2016 are scheduled for hearing by the Court of Appeal in the week beginning 14 November 2016. (The hearing date is subject to change. For the most updated hearing dates, please refer to www.supcourt.gov.sg.)]

Chua Lee Ming JC:

Introduction

2 At the close of the plaintiff’s case, the defendants elected not to call evidence and made a submission of no case to answer. I rejected the defendants’ submission and entered judgment for the plaintiff. The defendants have appealed against my decision.

The plaintiff’s claim

3 The plaintiff is a company incorporated under the laws of Vietnam. Its business includes fuel trading and wholesale of solid, liquefied and gas material and related products including gasoline and crude oil. At all material times, the defendants were partners in WE Bunker, a partnership whose business activities included ship bunkering. These facts were not in dispute.

4 The plaintiff alleged that in an account stated in writing between the plaintiff and WE Bunker, titled “Agreement of Account Balance Finalization” and dated 30 April 2012 (“the Agreement”), WE Bunker acknowledged that it owed the plaintiff US$1,690,874 and promised to pay the amount by 7 May 2012. WE Bunker failed to make payment.

5 The plaintiff further alleged that the Agreement was signed by WE Bunker’s chief operation officer (“COO”), Mr Saiful Alam bin Abdul Samad (“Saiful”), and WE Bunker’s Vietnam representative, Mr Tran Quang Luong (“Tran”). It was not in dispute that Saiful is the second defendant’s uncle.

6 The plaintiff’s alternative claim for money had and received was based on the payments made to WE Bunker as set out in the Agreement, and WE Bunker’s failure to deliver the goods, including fuel and bunker, to the plaintiff and/or to the vessels or end users designated by the plaintiff.

The plaintiff’s evidence

7 Mr Nguyen Du Luc (“Nguyen”) is one of the founding shareholders of the plaintiff, holding 60% of its share capital. In February 2011, he met Tran through a business contact. Tran gave Nguyen a business card which described himself as WE Bunker’s “Representative in Vietnam”. A year later, around the end of March 2012, Tran introduced Nguyen to Saiful. Saiful gave Nguyen a business card which described himself as WE Bunker’s “Chief Operation Officer”.

8 Nguyen met Saiful on a number of occasions in March and April 2012. In his affidavit of evidence-in-chief, Nguyen said that the second defendant was present at some of these meetings and that Saiful introduced him to Nguyen as WE Bunker’s chief accountant. During cross- examination, Nguyen maintained that Saiful had introduced him to the chief accountant of WE Bunker, although he could not recall what the chief accountant’s name was.

9 The plaintiff first bought diesel from WE Bunker in late March 2012. The oral contract for the sale of bunker was concluded at a meeting attended by Nguyen, Saiful, Tran and the second defendant. WE Bunker...