Sin Yong v United Engineers: Illegality & Enforceability of Contracts Affected by Bribery

Sin Yong Contractor Pte Ltd (in liquidation) sued United Engineers (Singapore) Pte Ltd in the High Court of Singapore, seeking payment for work done under several sub-contracts. The case was presided over by Andrew Ang J on 25 March 2008. The central legal issue was whether secret payments made by Sin Yong to an agent of UE, Lee Lip Hiong, tainted the contracts with illegality, rendering them unenforceable. The court allowed Sin Yong's appeal, setting aside the order of the Senior Assistant Registrar, and determined that the matter should proceed to trial.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal allowed, setting aside the Senior Assistant Registrar's order. The court found that the case warranted a full trial.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Sin Yong sues United Engineers for unpaid invoices. The court examines if secret payments to UE's agent taint the contracts with illegality.

1.7 Decision Date

24 March 2008

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Sin Yong Contractor Pte Ltd (in liquidation)	Plaintiff, Appellant	Corporation	Appeal Allowed	Won	Alvin Yeo of WongPartnership Andrew J Hanam of Andrew & Co Janice Goh of WongPartnership
United Engineers (Singapore) Pte Ltd	Defendant, Respondent	Corporation	Appeal Dismissed	Lost	Dominic Chan of Rajah & Tann LLP Adrian Wong of Rajah & Tann LLP Andre Yeap of Rajah & Tann LLP

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Ang	Judge	Yes

4. Counsels

Counsel Name	Organization
Alvin Yeo	WongPartnership
Andrew J Hanam	Andrew & Co
Janice Goh	WongPartnership
Dominic Chan	Rajah & Tann LLP
Adrian Wong	Rajah & Tann LLP
Andre Yeap	Rajah & Tann LLP

4. Facts

Sin Yong, a sub-contractor, sought payment from United Engineers (UE) for work done.
Secret payments were made by Sin Yong to Lee, an agent of UE, for over ten years.
UE sued Lee, Tan, and Sin Yong in Suit No 13 to recover the secret payments.
Judgment was granted for UE in Suit No 13 for $365,758 against all three defendants.
Tan tipped off the CPIB about the bribery.
Lee pleaded guilty to accepting gratification under the Prevention of Corruption Act.
Sin Yong commenced Suit No 446 against UE for $491,934.48 in unpaid invoices.

5. Formal Citations

Sin Yong Contractor Pte Ltd (in liquidation) v United Engineers (Singapore) Pte Ltd, Suit 446/2007, RA 292/2007, [2008] SGHC 43

6. Timeline

Date	Event
1989-01-01	Lee Lip Hiong became UE’s engineering manager.
1991-01-01	Start of period when bribes were paid by Tan and Sin Yong to Lee.
1999-10-22	Sin Yong Contractor was corporatized as Sin Yong Contractor Pte Ltd.
2002-12-31	End of period when bribes were paid by Tan and Sin Yong to Lee.
2003-01-01	Tan tipped off the Corrupt Practices Investigation Bureau.
2003-08-01	Lee pleaded guilty to ten counts of accepting gratification.
2004-01-01	UE filed Suit No 13 against Lee, Tan, and Sin Yong.
2004-09-08	SAR Kwek granted judgment for UE in Suit No 13.
2004-09-30	Judith Prakash J dismissed Sin Yong's appeal in Suit No 13.
2007-01-01	Sin Yong commenced Suit No 446 against UE.
2007-10-08	SAR Tan heard parties regarding Summons No 4306 of 2007.
2007-11-19	Andrew Ang J allowed the appeal, setting aside SAR Tan’s order.
2008-01-08	Further arguments were heard.
2008-01-30	Further arguments were heard.
2008-03-25	Andrew Ang J affirmed his original decision on 19 November 2007.

7. Legal Issues

Illegality of Contract
- Outcome: The court determined that the issue of illegality warranted a full trial and could not be decided summarily.
- Category: Substantive
- Sub-Issues:
  - Bribery
  - Fraud
  - Conspiracy
- Related Cases:
  - [2008] SGCA 4
  - [1996] 50 ConLR 70
  - [1975-1977] SLR 226
  - [1986] SLR 59
  - [1936] 1 KB 169
  - [1999] 3 SLR 682
  - [1962] MLJ 143
  - [1987] 1 WLR 1116
  - [2004] SGCA 4
  - [2007] EWCA 1128
  - [2004] SGMC 13
  - [1973] 1 WLR 828
  - [1924] 1 KB 138
  - [1981] ICR 503
  - [1957] 1 QB 267
  - [1979] AC 374
  - [2003] BLR 331
  - [2001] EWCA Civ 1845
  - [1998] 1 SLR 97
  - [2000] 2 Lloyd’s Rep 643
  - [2006] FSR 17
Enforceability of Contract
- Outcome: The court determined that the issue of enforceability warranted a full trial and could not be decided summarily.
- Category: Substantive
- Sub-Issues:
  - Illegal purpose
  - Illegal performance
  - Breach of fiduciary duty
- Related Cases:
  - [2008] SGCA 4
  - [1996] 50 ConLR 70
  - [1975-1977] SLR 226
  - [1986] SLR 59
  - [1936] 1 KB 169
  - [1999] 3 SLR 682
  - [1962] MLJ 143
  - [1987] 1 WLR 1116
  - [2004] SGCA 4
  - [2007] EWCA 1128
  - [2004] SGMC 13
  - [1973] 1 WLR 828
  - [1924] 1 KB 138
  - [1981] ICR 503
  - [1957] 1 QB 267
  - [1979] AC 374
  - [2003] BLR 331
  - [2001] EWCA Civ 1845
  - [1998] 1 SLR 97
  - [2000] 2 Lloyd’s Rep 643
  - [2006] FSR 17
Issue Estoppel
- Outcome: The court found that Sin Yong was not estopped from contending that it was not party to the conspiracy.
- Category: Procedural

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Contract
Recovery of Debt

10. Practice Areas

Commercial Litigation
Construction Disputes

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Obegi Melissa v Vestwin Trading Pte Ltd	Singapore Court of Appeal	Yes	[2008] SGCA 4	Singapore	Cited for the principle that determination under Order 14 rule 12 of the Rules of Court is inappropriate when novelty of legal issues is coupled with uncertainty of factual issues.
Taylor v Bhail	English Court of Appeal	Yes	[1996] 50 ConLR 70	England and Wales	Cited for the principle that a contract made to defraud a third party is unenforceable.
PT International Nickel Indonesia v General Trading Corp (M) Sdn Bhd	Court of Appeal	Yes	[1975-1977] SLR 226	Singapore	Cited for the principle that a claim for unpaid goods will be disallowed on the ground of illegality if the purchase price was inflated due to a bribe taken by the agent.
Suntoso Jacob v Kong Miao Ming	Singapore Court of Appeal	Yes	[1986] SLR 59	Singapore	Cited for the proposition that where a transaction was ex facie lawful but had been entered into for an unlawful purpose or to achieve an unlawful end, the transaction was tainted with illegality and thus unenforceable.
Alexander v Rayson	English Court of Appeal	Yes	[1936] 1 KB 169	England and Wales	Cited for the proposition that where a transaction was ex facie lawful but had been entered into for an unlawful purpose or to achieve an unlawful end, the transaction was tainted with illegality and thus unenforceable.
American Home Assurance Co v Hong Lam Marine Pte Ltd	Singapore Court of Appeal	Yes	[1999] 3 SLR 682	Singapore	Cited for the principle that a claim under a lawful contract will not fail by reason of illegality in another contract if the plaintiff can make out his claim without reference to the illegal agreement.
Palaniappa Chettiar v Arunasalam Chettier	Privy Council	Yes	[1962] MLJ 143	Malaysia	Cited for the principle that courts will not lend their aid to a party who has practiced a deceit on the public administration.
Saunders v Edwards	Court of Appeal	Yes	[1987] 1 WLR 1116	England and Wales	Cited for the principle that courts must steer a middle course when issues of illegality are raised.
Siew Soon Kim v Lim Eng Beng alias Lim Jia Le	Singapore Court of Appeal	Yes	[2004] SGCA 4	Singapore	Cited for the principle that the intention of the parties is paramount whenever the question of illegality is raised.
Kensington International Ltd v Republic of Congo	England and Wales Court of Appeal	Yes	[2007] EWCA 1128	England and Wales	Cited for the proposition that the mere fact of bribery was fraudulent and this ipso facto rendered the contracts unenforceable.
Xiong Zhensheng v Ding Chiang Kum	Singapore Magistrates' Court	Yes	[2004] SGMC 13	Singapore	Cited for the principle that even if the contract was lawful in its inception, nevertheless where one or both of the parties intended to perform the contract in an illegal manner, the court will deny its assistance in enforcing the contract.
Ashmore Benson Pease & Co Ltd v AV Dawson Ltd	England and Wales Court of Appeal	Yes	[1973] 1 WLR 828	England and Wales	Cited for the principle that even if the contract was lawful in its inception, nevertheless where one or both of the parties intended to perform the contract in an illegal manner, the court will deny its assistance in enforcing the contract.
Anderson Ltd v Daniel	King's Bench Division	Yes	[1924] 1 KB 138	England and Wales	Cited for the principle that even if the contract was lawful in its inception, nevertheless where one or both of the parties intended to perform the contract in an illegal manner, the court will deny its assistance in enforcing the contract.
Coral Leisure Group Ltd v Barnett	Employment Appeal Tribunal	Yes	[1981] ICR 503	England and Wales	Cited for the principle that an unlawful act during performance does not prevent enforcement unless the contract's purpose was unlawful.
St John Shipping Corporation v Joseph Rank Ltd	Queen's Bench Division	Yes	[1957] 1 QB 267	England and Wales	Cited for the principle that a carrier can enforce a claim for freight even if it illegally overloaded its vessel, unless it intended from the beginning to perform the contract illegally.
Mahesan v Malaysia Government Officers’ Cooperative Housing Society Ltd	Privy Council	Yes	[1979] AC 374	Malaysia	Cited for the right of a person whose agent has acted upon a bribe to recover damages for fraud from the agent or the person giving the bribe.
AL Barnes Ltd v Time Talk (UK) Ltd	England and Wales Court of Appeal	Yes	[2003] BLR 331	England and Wales	Cited for the principle that contracts for supply are not illegal if they do not have an illegal purpose, even if the mode of performing the contracts entails a breach of fiduciary duty.
Edwin Dyson & Sons Ltd v Time Group Ltd	England and Wales Court of Appeal	Yes	[2001] EWCA Civ 1845	England and Wales	Cited for the principle that an arrangement for secret payments does not necessarily make the whole claim unenforceable.
Tang Liang Hong v Lee Kuan Yew	Singapore High Court	Yes	[1998] 1 SLR 97	Singapore	Cited for the principle that a case must be plainly and obviously unsustainable for it to be struck out.
Fyffes Group Ltd v Templeman	England and Wales High Court (Commercial Court)	Yes	[2000] 2 Lloyd’s Rep 643	England and Wales	Cited for the principle that an order of accounting and tracing can be made against both the briber and the principal's agent once it is found that bribes have been paid to its agent.
Ultraframe (UK) Ltd v Fielding (No.2)	England and Wales High Court	Yes	[2006] FSR 17	England and Wales	Cited for the principle that an order of accounting and tracing can be made against both the briber and the principal's agent once it is found that bribes have been paid to its agent.

13. Applicable Rules

Rule Name
Order 14 rule 12 of the Rules of Court
Order 18 rule 19 of the Rules of Court
Order 27 rule 3 of the Rules of Court

14. Applicable Statutes

Statute Name	Jurisdiction
Rules of Court	Singapore
Prevention of Corruption Act	Singapore
Fraud Act 2006	England and Wales

15. Key Terms and Keywords

15.1 Key Terms

Bribery
Secret Payments
Illegality
Enforceability
Conspiracy
Duress
Inflation of Invoices
Issue Estoppel
Illegal Purpose
Illegal Performance

15.2 Keywords

contract
construction
bribery
illegality
enforceability
Singapore
Sin Yong
United Engineers

17. Areas of Law

Area Name	Relevance Score
Contract Law	90
Bribery	85
Prevention of Corruption Act	80
Illegality	75
Civil Procedure	70
Commercial Disputes	60
Estoppel	50
Fraud and Deceit	40

16. Subjects

Contract Law
Construction Law
Civil Procedure
Commercial Litigation
Bribery
Illegality