BHOOMATIDEVI d/o KISHINCHAND CHUGANI MRS KAVITA GOPE MIRWANI v NANTAKUMAR S/O V RAMACHANDRA & Anor

Facts

Mrs Kavita Gope Mirwani, a housewife, was introduced in early 2013 to Mr Nantakumar s/o V Ramachandra, then a director of Benshaw Commodities Pte Ltd. She lent $70,000 in 2013, paid into Benshaw's bank account on his instructions. According to Mrs Kavita, at a meeting on 31 October 2013 he sought $350,000.00 for a sand business, with the earlier loan and accrued returns rolled in, and promised a fixed return so that $401,000.00 would be repaid. A written agreement dated 1 November 2013, prepared by Mr Nantakumar, described Mrs Kavita as "Investor" and Benshaw as "Director" and provided for payment of $401,000.00. Further tranches were paid into Benshaw's account. Repayment was due on 1 December 2014, later extended to end December 2015, but nothing was paid.

Mrs Kavita sued Mr Nantakumar and Benshaw in Suit 1150 of 2020. Benshaw had been struck off and later restored, and had no assets. Mr Nantakumar's position was that Benshaw, not he, had made the promise. Benshaw did not take part in the trial, and Mr Nantakumar's counsel filed no closing submissions despite extensions.

Issues

1. Whether Mr Nantakumar or Benshaw was the party liable under the agreement to pay the $401,000.00
2. Whether subsequent conduct and similar fact evidence showed Mr Nantakumar was the contracting party
3. Whether Mr Nantakumar was liable on an account stated
4. Whether Benshaw's corporate veil should be pierced as a sham or facade

Holding

Lee Seiu Kin J allowed the claim in part. The claims against Mr Nantakumar were dismissed, and Mrs Kavita was given judgment against Benshaw for $401,000.00, which the court described as a pyrrhic victory since Benshaw had no assets. Costs were reserved for further submissions, with the court noting counsel's failure to file closing submissions.

Reasoning

Although clauses of the agreement made little sense if "Director" meant Benshaw, the decisive fact was that Mr Nantakumar signed on Benshaw's behalf. Following English authorities including The Elikon and Hamid, a signature made in a stated representative capacity shows who is bound, and it resolved the inconsistency in favour of Benshaw being the party.

The court took a circumspect view of subsequent conduct, noting that appellate authority leaves its admissibility open and such evidence can be shaped after the event. In any case, the conduct relied on did not show the parties' intention when contracting: missing company records were explained by the passage of time and Benshaw's winding up; acts after he ceased as director showed at most a lack of authority; and personal withdrawals might show misappropriation, not who contracted. Similar fact evidence from another suit, where his affidavit was never tested, was not admissible under s 14 of the Evidence Act and would have carried little weight.

An account stated presupposes a contract between the parties, so with no contract between Mrs Kavita and Mr Nantakumar, that claim failed.

On veil piercing, a sham requires a common intention to create the appearance of rights different from the real ones. The bank statements showed spending and cash withdrawals but not transfers to his friends or family. Documents including sand concession and dredging contracts in Myanmar and a purchase order for sand suggested Benshaw carried on a genuine business, and the Ponzi scheme allegation was unpleaded. A fraudulent trading claim was abandoned and, in any event, there was no evidence of intent to defraud.

From the judgment