SCP HOLDINGS PTE LTD v I CONCEPT GLOBAL GROWTH FUND

Facts

Two related applications were heard together. Under a loan agreement dated 10 November 2021, I Concept Global Growth Fund (ICG) lent SCP Holdings Pte Ltd (SCP) $300,000 at three per cent per annum, repayable by 10 February 2022. Under a separate agreement dated 7 January 2022, Ms Liw Chai Yuk lent Mr Sim Eng Tong, a director of SCP and of Biomax Holdings Pte Ltd, in which SCP was the majority shareholder, $47,725.10 on similar interest terms, repayable by 7 July 2022. It was not disputed that the money was received and not repaid. ICG and Ms Liw served statutory demands.

SCP filed HC/OA 421 of 2023 and Mr Sim filed HC/OSB 38 of 2023 to restrain winding-up and bankruptcy proceedings and to set aside the demands. They claimed that the parties had orally agreed on two convertible loan agreements totalling $2m, under which the two loans were advance disbursements, so nothing was payable while ICG had not disbursed the full sum. They also claimed the loans were illegal moneylending. ICG and Ms Liw said there was at most an agreement to agree.

Issues

1. Whether there was a triable issue as to the existence of the alleged oral agreement on the convertible loan agreements.
2. Whether the ICG Loan Agreement or the Liw Loan Agreement contravened the Moneylenders Act 2008.

Holding

Chua Lee Ming J dismissed both OA 421 and OSB 38 and ordered SCP and Mr Sim each to pay costs fixed at $5,000 plus disbursements. SCP and Mr Sim appealed against the decisions.

Reasoning

The court applied the settled test that a statutory demand will be set aside, and winding-up or bankruptcy proceedings restrained, only if there are triable issues as to whether the debt is payable. It found the alleged oral agreement factually unsustainable. Mr Sim's own affidavit described an agreement that the parties would enter into the convertible loan agreements, which was at best an agreement to agree. The contemporaneous documents showed the terms were still being negotiated, with Biomax commenting on and disagreeing with draft clauses, and Biomax needed its preference shareholders' approval, which the alleged terms did not mention. The written loan agreements made no reference to the alleged arrangement, even though ICG's agreement had been drafted by its lawyers and commented on by SCP's lawyers, and they fixed repayment dates of three and six months that contradicted the alleged three-year term. The court described the alleged oral agreement as an afterthought.

On the Moneylenders Act, SCP's point appeared only in submissions and was also an afterthought. Both loans were commercial interim loans linked to ICG's proposed investment in Biomax, at only three per cent interest, and the Act was not meant to stifle credit in the business domain. SCP had not shown ICG was in the business of moneylending or was not an excluded moneylender lending solely to corporations. As for Ms Liw, there was no system or continuity in her lending and no readiness to lend to all and sundry; she lent at the request of Mr Michael Marcus Liew, ICG's authorised representative, out of friendship, and the presumption in s 3 was rebutted.

From the judgment