American International Assurance v Wong Cherng Yaw: Interim Payment & Fund Switching
In American International Assurance Co Ltd v Wong Cherng Yaw and Others, the Singapore High Court addressed an application for interim payment by the defendants, who were policyholders of American International Assurance (AIA). The dispute arose from AIA's refusal to release funds invested by the defendants under 21 Investment Linked Policies (ILPs), claiming the defendants were unjustly enriched due to a mistake in determining bid prices for fund switches. The defendants sought an interim payment of $1,059,300, representing their capital invested with AIA. Justice Andrew Ang granted the defendants' application, ordering AIA to pay $1,019,300, representing the balance of the defendants' capital invested with the plaintiff.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application for interim payment granted. The plaintiff was ordered to pay the defendants $1,019,300.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court orders AIA to make an interim payment to policyholders, addressing a dispute over fund switching and alleged unjust enrichment.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| American International Assurance Co Ltd | Plaintiff | Corporation | Interim Payment Ordered | Lost | Quentin Loh, Elaine Tay, Shannon Tan |
| Wong Cherng Yaw | Defendant | Individual | Interim Payment Granted | Won | Quek Mong Hua, Esther Yee |
| Tan Siew Mui Junie | Defendant | Individual | Interim Payment Granted | Won | Quek Mong Hua, Esther Yee |
| Lim Wee Chee | Defendant | Individual | Interim Payment Granted | Won | Quek Mong Hua, Esther Yee |
| Liaw Chong Kiaw | Defendant | Individual | Interim Payment Granted | Won | Quek Mong Hua, Esther Yee |
| Wong Shyh Yaw | Defendant | Individual | Interim Payment Granted | Won | Quek Mong Hua, Esther Yee |
| Tie Ah Chai | Defendant | Individual | Interim Payment Granted | Won | Quek Mong Hua, Esther Yee |
| Low Bee Hong | Defendant | Individual | Interim Payment Granted | Won | Quek Mong Hua, Esther Yee |
| Goh Chong Wee Jasper | Defendant | Individual | Interim Payment Granted | Won | Quek Mong Hua, Esther Yee |
| Tan Tiong Thye | Defendant | Individual | Interim Payment Granted | Won | Quek Mong Hua, Esther Yee |
| Ong Swee Boon | Defendant | Individual | Interim Payment Granted | Won | Quek Mong Hua, Esther Yee |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Ang | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Quek Mong Hua | Lee & Lee |
| Esther Yee | Lee & Lee |
| Quentin Loh | Rajah & Tann LLP |
| Elaine Tay | Rajah & Tann LLP |
| Shannon Tan | Rajah & Tann LLP |
4. Facts
- Defendants invested in 21 Investment Linked Policies (ILPs) with the plaintiff, totaling $1,059,300.
- Defendants made numerous fund switches over two years, resulting in significant paper gains.
- Plaintiff refused defendants' requests for partial withdrawals and fund switches in August 2008.
- Plaintiff claimed the defendants were unjustly enriched due to a mistake in calculating Bid Prices.
- Plaintiff filed a lawsuit against the defendants, seeking recovery of $17,700,223.27.
- The value of the defendants' investments plunged by approximately $5 million in October 2008.
- The defendants sought an interim payment to alleviate financial hardship and conduct litigation.
5. Formal Citations
- American International Assurance Co Ltd v Wong Cherng Yaw and Others, Suit 670/2008, SUM 4743/2008, [2009] SGHC 89
6. Timeline
| Date | Event |
|---|---|
| First Defendant invested in ILP No U023544763 | |
| First Defendant invested in ILP No U023615760 | |
| Second Defendant invested in ILP No U023615825 | |
| First Defendant invested in ILP No U023615524 | |
| Third Defendant invested in ILP No U023615744 | |
| Third Defendant invested in ILP No U023882454 | |
| Third Defendant invested in ILP No U023882700 | |
| Sixth Defendant invested in ILP No U024057411 | |
| Third Defendant invested in ILP No U024152646 | |
| Sixth Defendant invested in ILP No U024153344 | |
| Third Defendant invested in ILP No U024386755 | |
| Fourth Defendant invested in ILP No U024386632 | |
| First Defendant invested in ILP No U024528733 | |
| Ninth Defendant invested in ILP No U024460655 | |
| Fourth Defendant invested in ILP No U024616661 | |
| Tenth Defendant invested in ILP No U024528445 | |
| First Defendant was queried on the frequency of fund switches | |
| Eighth Defendant assigned ILP No U023544763 to First Defendant | |
| Fifth Defendant invested in ILP No U024493033 | |
| Fifth Defendant invested in ILP No U090196322 | |
| Investments peaked at $18,759,523.27 | |
| Fifth Defendant assigned ILP No U023615760 to First Defendant | |
| Sixth Defendant assigned ILP Nos U024057411 and U024153344 to Second Defendant | |
| Lee Swee Chee invested in ILP No U080170808 | |
| Lee Swee Chee assigned ILP No U080170808 to Second Defendant | |
| First Defendant was queried again on the frequency of fund switches | |
| Plaintiff refused Lim Wee Chee's partial withdrawal request | |
| First and Second Defendants sought full/partial withdrawals, which were refused | |
| Plaintiff sent a letter to Lim Wee Chee regarding the partial withdrawal request | |
| Lim Wee Chee replied to the plaintiff expressing displeasure | |
| Defendants' applications to fund switch were refused | |
| Fifth Defendant surrendered his policy | |
| Defendants' solicitors demanded payment of the partial withdrawal | |
| Plaintiff's solicitors requested to hold their hands while they took instructions | |
| Plaintiff filed a Writ of Summons against the defendants | |
| Defendants' solicitors stated they would proceed with legal action if the plaintiff did not reply | |
| Defendants requested funds be put in an escrow account | |
| Value of investments plunged to $11,360,834.24 | |
| Lim Wee Chee filed an affidavit on behalf of the other defendants | |
| Martin Knight filed an affidavit explaining the plaintiff's alleged mistake | |
| Lim Wee Chee detailed the ramifications of having his investments locked up in an affidavit | |
| High Court granted the defendants’ application for interim payment |
7. Legal Issues
- Interim Payment
- Outcome: The court granted the interim payment, ordering the plaintiff to pay the defendants $1,019,300.
- Category: Procedural
- Sub-Issues:
- Application of Order 29 Rule 12
- Consideration of set-offs and cross-claims
- Unjust Enrichment
- Outcome: The court found that the claim for unjust enrichment could only impeach the defendants' claim for the proceeds of their ILPs insofar as the proceeds constituted an alleged unjust enrichment, not the capital they had invested.
- Category: Substantive
- Interpretation of Contractual Provisions
- Outcome: The court found that the plaintiff's calculation of the Bid Price in the past fund switching transactions was in accordance with the terms of the contract between the parties.
- Category: Substantive
- Sub-Issues:
- Valuation Day
- Bid Price Calculation
- Equitable Set-Off
- Outcome: The court determined that the claim for unjust enrichment could be regarded as a set-off against the defendants' claim for the proceeds of their ILPs, but only to the extent of the alleged unjust enrichment.
- Category: Substantive
- Sub-Issues:
- Connection between claims
- Impeachment of demand
8. Remedies Sought
- Interim Payment
- Declaration of Liability as Constructive Trustees
- Account and Inquiry to Trace and Recover Proceeds
- Indemnity
9. Cause of Actions
- Breach of Contract
- Unjust Enrichment
- Tort of Conspiracy
- Breach of Fiduciary Duties
10. Practice Areas
- Commercial Litigation
- Insurance Litigation
11. Industries
- Finance
- Insurance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Wellmix Organics (International) Pte Ltd v Lau Yu Man | High Court | Yes | [2006] 2 SLR 117 | Singapore | Cited regarding the court's inherent jurisdiction. |
| Schott Kem Ltd v Bentley | Queen's Bench | Yes | [1991] 1 QB 61 | England and Wales | Cited for summarizing the law on interim payments. |
| Shearson Lehman Brothers Inc v Maclaine, Watson & Co Ltd | Unknown | Yes | [1987] 1 W.L.R. 480 | England and Wales | Cited for general principles on interim payments. |
| British and Commonwealth Holdings Plc v Quadrex Holdings Inc | Queen's Bench | Yes | [1989] Q.B. 842 | England and Wales | Cited regarding interim payment orders when conditional leave to defend is given. |
| Shanning International Ltd v George Wimpey International Ltd | Court of Appeal | Yes | [1989] 1 WLR 981 | England and Wales | Cited regarding considerations for interim payments, specifically regarding set-offs and counterclaims; disagreed with in the present judgment. |
| The Nanfri; Federal Commerce and Navigation Co Ltd v Molena Alpha Inc | Queen's Bench | Yes | [1978] QB 927 | England and Wales | Cited for the definition of set-off. |
| Pacific Rim Investments Pte Ltd v Lam Seng Tiong | Court of Appeal | Yes | [1995] 3 SLR 1 | Singapore | Cited for the definition of set-off. |
| Bank of Boston Connecticut v European Grain and Shipping Ltd | House of Lords | Yes | [1989] 1 AC 1056 | United Kingdom | Cited for the test for equitable set-off. |
| The Government of Newfoundland v The Newfoundland Railway Co | Privy Council | Yes | (1888) 13 App Cas 199 | United Kingdom | Cited for the test for equitable set-off. |
| Rawson v Samuel | Unknown | Yes | (1841) 41 ER 451 | England and Wales | Cited for the impeachment test for equitable set-off. |
| Bim Kemi AB v Blackburn Chemicals Ltd | Court of Appeal | Yes | [2001] 2 Lloyd’s Rep 93 | England and Wales | Cited for the test for equitable set-off. |
| Abdul Salam Asanaru Pillai (trading as South Kerala Cashew Exporters) v Nomanbhoy & Sons Pte Ltd | High Court | Yes | [2007] 2 SLR 856 | Singapore | Cited for the test for equitable set-off. |
| Shearson Lehman Brothers Inc v Maclaine, Watson & Co Ltd | Unknown | Yes | [1987] 1 WLR 480 | England and Wales | Cited for the purpose of allowing interim payments. |
| Ricci Burns Ltd v Toole | Unknown | Yes | [1989] 1 WLR 993 | England and Wales | Cited for the purpose of allowing interim payments. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) |
| Order 29 Rules 10, 11 and 12 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Investment Linked Policies
- Fund Switch
- Bid Price
- Valuation Day
- Interim Payment
- Unjust Enrichment
- Set-off
- Policy Surrender
- Partial Withdrawal
15.2 Keywords
- Interim Payment
- Fund Switching
- Investment Linked Policies
- Unjust Enrichment
- Singapore High Court
16. Subjects
- Civil Procedure
- Contract Law
- Insurance Law
- Interim Payments
17. Areas of Law
- Civil Procedure
- Contract Law
- Insurance Law