Tng Kay Lim v Wong Fook Yew: Co-Guarantors' Contribution Dispute

In Tng Kay Lim v Wong Fook Yew and Lek Sock Peng, the High Court of Singapore addressed a claim by Tng Kay Lim against Wong Fook Yew and Lek Sock Peng for contribution as co-guarantors. Tng sought contribution after making payments under a guarantee to Poh Huat Heng Construction Pte Ltd (PHH). The court found in favor of Tng, ordering Wong and Lek to contribute to Tng's payment on the PHH Guarantee.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Tng Kay Lim sues Wong Fook Yew and Lek Sock Peng for contribution as co-guarantors after Tng paid under a guarantee. The court found in favor of Tng.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Tng Kay LimPlaintiffIndividualJudgment for PlaintiffWon
Wong Fook YewDefendantIndividualJudgment against DefendantLost
Lek Sock PengDefendantIndividualJudgment against DefendantLost

3. Judges

Judge NameTitleDelivered Judgment
Lee Seiu KinJudgeYes

4. Counsels

Counsel NameOrganization
Choo Ching Yeow CollinStraits Law Practice LLC

4. Facts

  1. Tng invested $1.3m in Gold Green Corporation Pte Ltd.
  2. Tng, Wong, Lek, Khee, Koh, Low and Foo gave a joint and several guarantee to PHH.
  3. The Company was unable to pay PHH.
  4. PHH sued the guarantors and obtained judgment against them.
  5. PHH obtained full payment under the PHH Guarantee from Tng.
  6. Low and Foo were adjudicated bankrupt.
  7. Wong and Lek resigned as directors.

5. Formal Citations

  1. Tng Kay Lim v Wong Fook Yew and Another, Suit 533/2008, [2009] SGHC 195

6. Timeline

DateEvent
UOB facility for $1.63m obtained
PHH engaged to construct factory building for $1.736m
PHH Guarantee executed by seven guarantors
Low stepped down as MD
Company obtained increase in facilities for $50,000
Company obtained increase in facilities for $138,800
Tng ceased being MD
Wong resigned as MD
Share Transfer Agreement dated
PHH obtained order to wind up the Company
Judgment Date

7. Legal Issues

  1. Contribution among co-guarantors
    • Outcome: The court held that Wong and Lek were liable to contribute to Tng's payment on the PHH Guarantee.
    • Category: Substantive
    • Related Cases:
      • [2005] SGHC 60
      • (1840) 6 M&W 153
      • (1787) 2 Bos & Pul 270
      • (1807) 14 Ves 160; 33 ER 482
      • [1896] 1 QB 75
      • (1641) 1 Rep Ch 149
      • [1992] 1 QB 887

8. Remedies Sought

  1. Contribution from co-guarantors

9. Cause of Actions

  • Claim for contribution as co-guarantors

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Davies v Evan HumphreysN/AYes(1840) 6 M&W 153N/ACited for the principle that a guarantor has the right to call upon a co-guarantor to contribute towards his liability if he has made a payment in excess of his own share of liability.
Sir Edward Deering v The Earl of WinchelseaN/AYes(1787) 2 Bos & Pul 270N/ACited for the principle that the right to contribution is founded not in contract but in equity.
Teo Song Kwang v Vijayasundram JeyabalanHigh CourtYes[2005] SGHC 60SingaporeCited for the principle that co-guarantors are liable to contribute their share of the amount paid if they benefit from such a payment to the creditor.
Craythorne v SwinburneN/AYes(1807) 14 Ves 160; 33 ER 482N/ACited for the equitable principle of contribution enabling a guarantor to assume the burden of suretyship on the faith of an implied promise of contribution from his co-sureties.
Ellesmere Brewery Company v CooperN/AYes[1896] 1 QB 75N/ACited for the principle that if one of the guarantors is insolvent, then the remaining co-guarantors are liable for an equal share based on the reduced number.
Swain v WallN/AYes(1641) 1 Rep Ch 149N/ACited for the principle that the right to contribution may be modified or excluded by agreement.
Legal and General Assurance Society Ltd v Drake Insurance Co LtdCourt of AppealYes[1992] 1 QB 887N/ACited for the principle that the right to contribution may be modified or excluded by agreement.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Co-guarantors
  • Contribution
  • Guarantee
  • Share Transfer Agreement
  • PHH Guarantee
  • UOB Guarantee

15.2 Keywords

  • guarantee
  • co-guarantor
  • contribution
  • singapore
  • contract

17. Areas of Law

Area NameRelevance Score
Guarantees and indemnities80
Guarantee75
Banking and Finance30
Breach of Contract20
Commercial Law20
Contract Law20

16. Subjects

  • Guarantees
  • Contract Law
  • Financial Law