Kim Eng Securities v Tan Suan Khee: 'Without Prejudice' Privilege & Limitation of Actions in Stockbroking

In Kim Eng Securities Pte Ltd v Tan Suan Khee, the High Court of Singapore heard an appeal by Kim Eng Securities against an order granting Tan Suan Khee unconditional leave to defend against the balance of Kim Eng's claim for contra losses and other expenses. Kim Eng sued Tan, a former remisier, to recover outstanding contra losses incurred by clients he introduced. The court allowed Kim Eng's appeal, entering summary judgment in its favor, finding that the claims were not time-barred due to an on-demand guarantee and the defendant's acknowledgment of the debt.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal allowed in part; summary judgment entered in favor of Kim Eng Securities for the balance claim amount and interest.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Kim Eng Securities sues Tan Suan Khee for contra losses. The court addresses 'without prejudice' privilege and limitation of actions, ruling for Kim Eng.

1.7 Decision Date

17 May 2007

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Kim Eng Securities Pte Ltd	Plaintiff, Appellant	Corporation	Appeal allowed in part	Partial	Sean Lim of Hin Tat Augustine & Partners
Tan Suan Khee	Defendant, Respondent	Individual	Unconditional leave to defend the balance of Kim Eng’s claim reversed	Lost

3. Judges

Judge Name	Title	Delivered Judgment
Belinda Ang Saw Ean	Judge	Yes

4. Counsels

Counsel Name	Organization
Sean Lim	Hin Tat Augustine & Partners

4. Facts

Kim Eng is a stockbroking company and member of the Singapore Exchange Securities Trading Ltd.
Tan Suan Khee was a remisier with Kim Eng under an Agency Agreement.
Tan introduced clients to Kim Eng for trading in securities.
Some clients defaulted on their transactions, resulting in contra losses.
Kim Eng sought to recover these contra losses from Tan under the Agency Agreement.
Kim Eng demanded payment of outstanding sums from Tan on 8 July 2004.
Tan sent an email on 23 February 2004 proposing a settlement of his debt.

5. Formal Citations

Kim Eng Securities Pte Ltd v Tan Suan Khee, Suit 298/2006, RA 320/2006, [2007] SGHC 75

6. Timeline

Date	Event
1992-01-24	Agency Agreement signed
2004-01-09	Supplemental letter to the Agency Agreement signed
2004-02-23	Defendant sent e-mail regarding amnesty of bad debt
2004-06-30	Kim Eng demanded payment of $383,237.85
2004-07-01	Defendant's appointment as remisier ceased
2004-07-08	Kim Eng demanded payment from the defendant
2005-03-02	Interest calculated from this date
2005-03-23	Kim Eng's solicitors demanded payment of contra losses and accumulated interest
2006-04-04	Kim Eng's solicitors demanded payment of legal costs
2006-05-10	Action commenced
2006-11-10	Assistant Registrar ordered summary judgment against the defendant
2007-05-18	Judgment issued

7. Legal Issues

Admissibility of Evidence
- Outcome: The court held that the defendant's email was admissible as it was not part of 'without prejudice' negotiations because there was no existing dispute.
- Category: Procedural
- Sub-Issues:
  - Whether acknowledgment of debt subject to 'without prejudice' privilege
  - Whether e-mail not marked 'without prejudice' forming part of negotiations and subject to without-prejudice privilege
- Related Cases:
  - [1989] AC 1280
  - [2002] 1 Lloyd’s Law Rep 143
  - [2006] 4 SLR 807
  - [2007] SGCA 25
Limitation of Actions
- Outcome: The court held that the claims were not time-barred because the cause of action arose upon demand and the defendant acknowledged the debt.
- Category: Substantive
- Sub-Issues:
  - When time begins to run on an on-demand guarantee
  - Whether demand by creditor against guarantor out of time because of statute-barred principal transaction
  - Whether there was acknowledgment of debt
- Related Cases:
  - [1918] 2 KB 833
  - (1883) 25 ChD 666
  - [1939] AC 601
  - (2003) 90 ConLR 26
  - [2003] 2 SLR 205
  - [2006] 1 WLR 2066

8. Remedies Sought

Monetary Damages
Interest

9. Cause of Actions

Breach of Contract
Indemnity

10. Practice Areas

Commercial Litigation
Securities Law

11. Industries

Finance
Securities

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Associated Asian Securities Pte Ltd (in liquidation) v Lee Kam Wah	High Court	Yes	[1993] 1 SLR 585	Singapore	Cited to explain the relationship between a remisier and a stockbroking company and the need for guarantees or indemnities.
Bradford Old Bank, Limited v Sutcliffe	King's Bench Division	Yes	[1918] 2 KB 833	England and Wales	Cited for the proposition that no cause of action arises under a guarantee until demand for payment is made.
Carter v White	Court of Appeal	Yes	(1883) 25 ChD 666	England and Wales	Cited for the principle that a creditor's failure to pursue the principal debtor does not discharge the surety and that a guarantor remains liable even if the principal debt is statute-barred.
Mahant Singh v U Ba Yi	Privy Council	Yes	[1939] AC 601	United Kingdom	Acknowledged Carter v White.
Northern & Shell plc v John Laing Construction Ltd	Unknown	Yes	(2003) 90 ConLR 26	England and Wales	Acknowledged Carter v White.
Rush & Tompkins Ltd v Greater London Council and Another	House of Lords	Yes	[1989] AC 1280	United Kingdom	Cited regarding the 'without prejudice' rule.
The Cadle Co v Hearley	Unknown	Yes	[2002] 1 Lloyd’s Law Rep 143	England and Wales	Cited regarding the 'without prejudice' rule and the evidential burden of admissibility.
Mariwu Industrial Co (S) Pte Ltd v Dextra Asia Co Ltd and Another	Court of Appeal	Yes	[2006] 4 SLR 807	Singapore	Cited for clarification on the 'without prejudice' privilege and its application to settlement negotiations.
Greenline-Onyx Envirotech Phils.,Inc v Otto Systems Singapore Pte Ltd	Court of Appeal	Yes	[2007] SGCA 25	Singapore	Cited for principles on acknowledgment of debt and the 'without prejudice' rule.
Chuan & Company Pte Ltd v Ong Soon Huat	Court of Appeal	Yes	[2003] 2 SLR 205	Singapore	Cited for the requirements to constitute an acknowledgment under the Limitation Act.
Bradford & Bingley plc v Rashid	House of Lords	Yes	[2006] 1 WLR 2066	United Kingdom	Cited for principles on acknowledgments for the purposes of the limitation regime and the 'without prejudice' rule.
Subramaniam v PP	Privy Council	Yes	[1956] 1 WLR 965	United Kingdom	Cited as analogy.
Otto Systems Singapore Pte Ltd v Greenline-Onyx Envirotech Phils, Inc	High Court	Yes	[2006] 4 SLR 924	Singapore	Cited regarding the issue of time bar in respect of admitted amounts.
SM Integrated Transware Pte Ltd v Schenker Singapore (Pte) Ltd	High Court	Yes	[2005] 2 SLR 651	Singapore	Cited on how a signature requirement is satisfied on an e-mail correspondence.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Limitation Act (Cap 163, 1996 Rev Ed) s 6	Singapore
Limitation Act (Cap 163, 1996 Rev Ed) s 26(2)	Singapore
Limitation Act (Cap 163, 1996 Rev Ed) s 27(1)	Singapore
Evidence Act (Cap 97, 1997 Rev Ed) s 23	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Remisier
Agency Agreement
Contra Losses
Without Prejudice
Limitation of Actions
Acknowledgment of Debt
On-Demand Guarantee
Contract Sum
Indemnity

15.2 Keywords

Stockbroking
Remisier
Contra Losses
Limitation Act
Without Prejudice
Acknowledgment
Agency Agreement

17. Areas of Law

Area Name	Relevance Score
Limitation	80
Contract Law	75
Guarantees and indemnities	70
Agency Law	65
Evidence Law	60
Summary Judgement	50
Interest	40

16. Subjects

Contract Law
Civil Procedure
Stockbroking
Agency