Chan Tuck Cheong v Sin Wee Hiong

Facts

Mr Chan Tuck Cheong, an engineer, and Mdm Sin Wee Hiong were business partners in an engineering firm founded by her father and had an extramarital affair from 1993 to about mid-2022. Both gambled heavily at Resorts World Sentosa. Over the years money passed between them, and after the relationship broke down each said the other was the borrower. In HC/OC 537/2023 Mr Chan sued for $222,000, saying his transfers to her of $75,000 and $300,000 in 2017, $20,000 in 2018 and two sums of $50,000 in 2021 were loans, and that her twelve transfers to him in 2018 and 2019 totalling $273,000 were part repayments. Mdm Sin counterclaimed $578,000. Her case was that in 2013, at his request to fund the rebuilding of his house at Ernani Street, she remortgaged the Teow Hock Avenue home she jointly owned with her then husband, Mr Chow, raised $1.26m and lent him $800,000; that his later payments were repayments; and that her twelve transfers were further loans.

Her case rested on a typed document dated 29 May 2013, signed by Mr Chan, confirming a loan of SGD 800,000 for 18 months, repayable by 31 December 2014 with annual interest of 3.5%. Mr Chan accepted signing it but said it was a sham, signed at her request to mislead Mr Chow, and that he never received the money.

Issues

1. Whether the signed acknowledgment of the $800,000 loan was a sham
2. Whether Mr Chan in fact received the $800,000
3. How the later transfers between the parties should be characterised
4. Whether the counterclaim on the $800,000 loan was time-barred

Holding

Chan Seng Onn SJ dismissed Mr Chan's claim and allowed Mdm Sin's counterclaim for $578,000. He ordered contractual interest of 3.5% per annum on the sums outstanding on the $800,000 loan up to judgment, with liberty to apply if the parties could not agree the figure, no contractual interest on the $273,000 of further loans, post-judgment interest of 5.33% per annum, and costs to Mdm Sin.

Reasoning

Applying Toh Eng Tiah v Jiang Angelina [2021] 1 SLR 1176, the party alleging a sham must prove a common intention to mislead, against a very strong presumption that signed documents are meant to bind. The judge found Mr Chan had probably prepared the document, and its terms fitted Mdm Sin's account: the interest more than covered the bank interest over the loan period, and the deadline matched the end of the rebuilding works. Mr Chan could give no particulars of the supposed sham and denied knowing of the remortgage, which the judge disbelieved. Mdm Sin did not know of a later $800,000 construction loan he obtained, which Mr Chan had kept from her. A rough cash-flow analysis showed a larger unexplained shortfall on Mr Chan's side, he had understated his gambling losses, and her gambling records showed no sudden rise. The court weighed against her that some of her assertions on other matters were disproved and two withdrawn counterclaims lacked independent evidence, but held the sham was not proved.

The acknowledgment was prima facie evidence of receipt, and unlike in Fook Gee Finance Co Ltd v Liu Cho Chit [1998] 1 SLR(R) 385 nothing rebutted it, so receipt of the $800,000 was proved. The 2017 cheques and the later payments from Mr Chan were treated as part repayments, the 2021 sums being applied to the interest-bearing loan. Gifts were ruled out for the twelve transfers, and since nothing was owed to Mr Chan they could not be repayments, so they were further loans on an implied understanding to repay.

On limitation, the $300,000 part payment on 24 August 2017 restarted time under s 26(2) of the Limitation Act 1959, and under s 31 the counterclaim was deemed brought when the suit began on 17 August 2023, within six years.

From the judgment