Wee Yue Chew v Su Sh-Hsyu

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 07 April 2008
• Neutral Citation: [2008] SGHC 50
• Docket Number: Suit No 665 of 2004
• Date: 07 April 2008
• Year: 2008
• Published date: 11 April 2008
• Plaintiff Counsel: Rasanathan s/o Sothynathan (Colin Ng & Partners)
• Citation: [2008] SGHC 50
• Defendant Counsel: Hee Theng Fong, Low Wei Ling Wendy and Teo Swee Ling Joana (Hee Theng Fong & Co)
• Court: High Court (Singapore)
• Subject Matter: Defence of discharge by payment,Whether purchaser proving discharge by payment and contract price,Whether legal burden on purchaser or seller to prove contract price,Breach,Sections 103, 104, 105, 106 Evidence Act (Cap 97, 1997 Rev Ed),Purchaser's case that seller had given instructions for contract price to be remitted to third party,Whether legal burden on purchaser to prove payment by way of discharge of her obligation as defence or for seller to prove non-payment,Evidence,Whether seller giving remittance instructions to pay third party,Onus of proof,Proof of evidence,Dispute as to contract price,Contract,Shares transferred to purchaser but seller not paid balance contract price,Sale and purchase of shares,Whether seller was paid balance contract price

7 April 2008 Judgment reserved.

Belinda Ang Saw Ean J:

1 These proceedings arise out of the sale of 1000 shares in the share capital of a Singapore registered company called Interstellar Intereducational Pte Ltd (“Interstellar”) whose business is that of providing tertiary education in Shanghai through a college known as Shanghai Normal University Science, Technology & Management College.

The burden of proof

2 It is common ground that 1000 Interstellar shares belonging to the plaintiff, Dr Wee Yue Chew (“the Shares”), were sold and transferred to the defendant, Dr Su Sh-Hsyu, on 25 June 2004. The Shares were then registered in her name. It is not the defendant’s case that the events to payment of the Shares had not occurred. Factually, the defendant concedes that the Shares were transferred and registered in her name. However, the defendant maintains that she has paid for the Shares having remitted the contract price to the plaintiff’s order. In this connection, the issue is whether the payment to one Tung Cheng Yu (“Tung”) was for the Shares.

3 Counsel for the defendant, Mr Hee Teng Fong, submits that the legal burden of proof is on the plaintiff to prove non-payment. In my view, it is erroneous to characterise the issue as one of non-payment. It is to be noted that the defendant has in her defence alleged payment of the contract price to the plaintiff’s order. Plainly, the defendant has to prove payment by way of discharge of her obligation as a defence to this action. The legal burden of proof in this present case is best addressed by turning to the following passage of the judgment of Walsh JA in Currie v Dempsey [1967] 2 NSWR 532 at 539 for an answer:

In my opinion, the burden of proof … lies on a plaintiff, if the act alleged (whether affirmative or negative in form) is an essential element in his cause of action, eg if its existence is a condition precedent to his right to maintain the action. The onus is on the defendant, if the allegation is not a denial of an essential ingredient in the cause of action, but is one which, if established, will constitute a good defence, that is, an “avoidance” of the claim which, prima facie, the plaintiff has.

[emphasis added]

4 Specifically and by way of illustration, I turn to the decision of Young v Queensland Trustees Ltd (1956) 99 CLR 560 on the application of the rule on the legal burden of proof. That case was not about the characterisation of the arrangement between the parties because it was conceded that the original payment to the defendant was by way of loan. The issue was who bore the onus of proving, as the defendant alleged, that the money had been repaid. The Australian High Court at 569-570 said:

The law was and is that, speaking generally, the defendant must allege and prove payment by way of discharge as a defence to an action for indebtedness in respect of an executed consideration.

5 In Singapore, the statutory formulation of the burden of proof under ss 103 to 106 of the Evidence Act (Cap 97, 1997 Rev Ed) is basically the same as or similar to the propositions gathered from the Australian authorities outlined above. To illustrate, the commentaries on s 104 of the Indian Evidence Act (our s 106 of the Evidence Act) in Sir John Woodroffe & Syed Amir Ali’s Law of Evidence (LexisNexis Butterworths, 17^th Ed, 2002) in Vol III at 4041 state as follows:

… When a defendant admits the cause of action and pleads payment, he must prove that the claim which is admitted has been discharged by payment.

6 So, if the defendant does not deny the tenancy in an action for rent but pleads payment, the onus probandi is on him (see Sir John Woodroffe & Syed Amir Ali’s Law of Evidence in Vol III at 4040). Likewise, in the present case, the legal burden is on the defendant as her defence is concerned specifically with discharge by payment.

7 A related issue here is the contract price itself. The plaintiff’s case is that the agreed contract price was RMB 2.5m whereas the defendant pleaded the contract sum as US$508,069 (being the equivalent of RMB 4.2m as at 29 July 2004). In my judgment, the plaintiff has, for the reasons explained below (see [41] to [45]), made out a prima facie case that the contract price was RMB 2.5m. The defendant, having asserted a positive case of a different contract price, bears the legal burden on both issues - the price of RMB 4.2m and the discharge of the payment obligation. These two factual disputes raised by the defendant are inexorably intertwined. The legal burden which is constituted by the pleaded case lies upon the defendant as the party affirming a fact in support of her defence, and it remains with her and is assessed at the end of the trial after hearing evidence and counter-evidence from the parties. As with most civil suits, the evidential burden shifts or alternates from one party to the next in the progress of a trial according to the nature and strength of the evidence offered in support or in opposition of the main fact to be established (see Ong & Co Pte Ltd v Quah Kay Tee [1996] 2 SLR 553 at 560).

8 Lastly, if the state of the evidence is such that at the end of the trial the court is left in an uncertain position, the court may rule that the assertions have not been made out. This proposition is clear from The Popi M [1985] 1 WLR 948. In that case, the claimant’s vessel sank in deep water such that no inspection of the wreck was possible. The claimants sought to claim under a marine policy issued by hull underwriters. They had to prove the loss was from “perils of the sea”. Prior to the trial, various explanations were put forward to support the claim. But eventually, only one was contended for, namely, that the “Popi M” had come into collision with an unidentified submerged submarine travelling in the same direction. The underwriters contended that the cause of the aperture was prolonged wear and tear of the vessel. Bingham J regarded the former explanation as inherently improbable and the “wear and tear theory” as virtually impossible. In those circumstances, he concluded that the submarine theory on the balance of probabilities must be accepted as the explanation of the loss. The House of Lords reversed the decision. Lord Brandon of Oakbrook, with whose speech the other members of the House agreed, said at 955:

My Lords, the late Sir Arthur Conan Doyle in his book The Sign of Four, describes his hero, Mr. Sherlock Holmes, as saying to the latter’s friend, Dr. Watson: “How often have I said to you that, when you have eliminated the impossible, whatever remains, however improbable, must be the truth?” It is, no doubt, on the basis of this well-known but unjudicial dictum that Bingham J. decided to accept the shipowners’ submarine theory, even though he regarded it, for seven cogent reasons, as extremely improbable.

In my view there are three reasons why it is inappropriate to apply the dictum of Mr Sherlock Holmes, to which I have just referred, to the process of fact-finding which a judge of first instance has to perform at the conclusion of a case of the kind here concerned.

The first reason is one which I have already sought to emphasise as being of great importance, namely, that the judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden. No judge likes to decide cases on burden of proof if he can legitimately avoid having to do so. There are cases, however, in which, owing to the unsatisfactory state of the evidence or otherwise, deciding on the burden of proof is the only just course for him to take.

The second reason is that the dictum can only apply when all relevant facts are known, so that all possible explanations, except a single extremely improbable one, can properly be eliminated. That state of affairs does not exist in the present case: to take but one example, the ship sank in such deep water that a diver’s examination of the nature of the aperture, which might well have thrown light on its cause, could not be carried out.

The third reason is that the legal concept of proof of a case on a balance of probabilities must be applied with common sense. It requires a judge of first instance, before he finds that a particular event occurred, to be satisfied on the evidence that it is more likely to have occurred than not. If such a judge concludes, on a whole series of cogent grounds, that the occurrence of an event is extremely improbable, a finding by him that it is nevertheless more likely to have occurred than not, does not accord with common sense. This is especially so when it is open to the judge to say simply that the evidence leaves him in doubt whether the event occurred or not, and that the party on whom the burden of proving that the event occurred lies has therefore failed to discharge such burden.

In my opinion Bingham J. adopted an erroneous approach to this case by regarding himself as compelled to choose between two theories, both of which he regarded as extremely improbable, or one of which he regarded as extremely improbable and the other of which he regarded as virtually impossible. He should have borne in mind, and considered carefully in his judgment, the third alternative which was open to him, namely, that the evidence left him in doubt as to the cause of the aperture in the ship’s hull, and that, in these circumstances, the shipowners had failed to discharge the burden of proof which was on them.

9 These remarks are of relevance in the present case. On the authorities which are applicable here, and where the court determines that the version advanced by a plaintiff is not a probable one, the court does not have to choose the most likely of competing theories. The court may decline to accept either case. Gleeson CJ in Anthony Peter...