Lena Leowardi v Yeap Cheen Soo: Moneylending Act & Guarantee Enforcement

In Lena Leowardi v Yeap Cheen Soo, the Court of Appeal of Singapore heard an appeal regarding the enforceability of guarantees provided by Yeap Cheen Soo (the Respondent) for loans obtained by Choong Kok Kee from Lena Leowardi (the Appellant). The Respondent argued that the guarantees were unenforceable under the Moneylenders Act. The High Court initially agreed with the Respondent, but the Court of Appeal reversed the decision, holding that the Moneylenders Act did not apply because the 'bonus payments' were contingent. The court allowed the appeal and awarded costs to the Appellant.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding the enforceability of guarantees under the Moneylenders Act. The court allowed the appeal, finding the Act inapplicable.

1.7 Decision Date

25 November 2014

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Lena Leowardi	Appellant	Individual	Appeal allowed	Won	Isaac Tito Shane of Tito Isaac & Co LLP Neo Wei Chian Valerie of Tito Isaac & Co LLP Justin Chan Yew Loong of Tito Isaac & Co LLP
Yeap Cheen Soo	Respondent	Individual	Appeal dismissed	Lost	Ong Ying Ping of OTP Law Corporation Lim Seng Siew of OTP Law Corporation Susan Tay Ting Lan of OTP Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	No
Andrew Phang Boon Leong	Justice of the Court of Appeal	No
Steven Chong	Judge	Yes

4. Counsels

Counsel Name	Organization
Isaac Tito Shane	Tito Isaac & Co LLP
Neo Wei Chian Valerie	Tito Isaac & Co LLP
Justin Chan Yew Loong	Tito Isaac & Co LLP
Ong Ying Ping	OTP Law Corporation
Lim Seng Siew	OTP Law Corporation
Susan Tay Ting Lan	OTP Law Corporation

4. Facts

Lena Leowardi lent money to Choong Kok Kee on four occasions.
Yeap Cheen Soo guaranteed two of the loans.
Choong promised 'bonus payments' to Leowardi via promissory notes.
Choong defaulted on the loans and declared bankruptcy.
Leowardi sued Soo on the guarantees.
Soo argued the loans were illegal under the Moneylenders Act.
The 'bonus payments' were contingent on Choong receiving funds from the UK.

5. Formal Citations

Lena Leowardi v Yeap Cheen Soo, Civil Appeal No 55 of 2014, [2014] SGCA 57
Lena Leowardi v Yeap Cheen Soo, , [2014] SGHC 44

6. Timeline

Date	Event
2010-11-29	Thomas was introduced to Choong by Grace Soh.
2011-01-20	Thomas lent $250,000 to Choong.
2011-02-11	Thomas lent $44,000 to Choong.
2011-03-01	Choong asked Thomas to lend him a further sum of $200,000.
2011-03-22	The Appellant met Choong and the Respondent at the lawyer’s office to execute the First Loan Agreement.
2011-03-22	The Appellant signed the First Promissory Note issued by Choong.
2011-04-15	The Second Loan Agreement was executed.
2011-04-18	The Appellant signed the Second Promissory Note.
2011-04-25	Thomas lent $25,000 to Choong.
2011-05-25	The Appellant, Choong and the Respondent entered into the Third Loan Agreement.
2011-05-26	The Respondent was also unaware that Choong had given the Appellant a promissory note for this loan.
2011-06-07	The Appellant gave a further loan of $120,000 to Choong.
2011-08-16	Choong filed Bankruptcy Application No 1402 of 2011.
2011-09-15	A bankruptcy order was made and Choong was adjudged to be a bankrupt.
2011-09-30	This order was published in the Government Gazette, Electronic Edition.
2013-01-23	The Respondent initially pleaded in his Defence.
2013-06-13	The Appellant’s first List of Documents dated.
2013-10-17	Thomas’ affidavit of evidence-in-chief (“AEIC”) dated.
2013-10-18	Thomas’ affidavit filed.
2013-10-23	The Respondent’s defence of moneylending was only raised some nine months later in his Defence (Amendment No 2).
2014-11-12	A similar scam was reported in the Straits Times.
2014-11-26	Judgment reserved.

7. Legal Issues

Applicability of the Moneylenders Act
- Outcome: The court held that the Moneylenders Act did not apply because the bonus payments were contingent and not an integral term of the loan agreements.
- Category: Substantive
- Sub-Issues:
  - Presumption of moneylending
  - Repayment of a larger sum
  - Contingent bonus payments
- Related Cases:
  - [2014] 3 SLR 524
  - [2005] 1 SLR(R) 733
Enforceability of Guarantees
- Outcome: The court held that the guarantees were enforceable because the underlying loan transactions did not violate the Moneylenders Act.
- Category: Substantive
Pleadings
- Outcome: The court held that the Respondent's pleadings were defective because they failed to specifically plead the Promissory Notes and the presumption in s 3 of the Act.
- Category: Procedural
- Related Cases:
  - [2014] 3 SLR 609
  - [1950] 1 KB 359

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Guarantee

10. Practice Areas

Commercial Litigation

11. Industries

Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Sheagar s/o TM Veloo v Belfield International (Hong Kong) Ltd	Court of Appeal	Yes	[2014] 3 SLR 524	Singapore	Cited for the approach to determine whether a person who has lent money has fallen afoul of the Act.
City Hardware Pte Ltd v Kenrich Electronics Pte Ltd	High Court	Yes	[2005] 1 SLR(R) 733	Singapore	Cited for the intention of the Act as a scheme of social legislation and that the Act prohibits the business of moneylending rather than the act of lending money.
Lim Eng Hock Peter v Lin Jian Wei and another	High Court	Yes	[2009] 2 SLR(R) 1004	Singapore	Cited for the test of whether there is no case to answer.
Tan Juay Pah v Kimly Construction Pte Ltd and others	High Court	Yes	[2012] 2 SLR 549	Singapore	Cited for the principle that the Appellant only had to establish a prima facie case as opposed to proving her case on a balance of probabilities.
Relfo Ltd (in liquidation) v Bhimji Velji Jadva Varsani	High Court	Yes	[2008] 4 SLR(R) 657	Singapore	Cited for the principle that in assessing whether the Appellant has established a prima facie case, the court will assume that any evidence led by the Appellant was true, unless it was inherently incredible or out of common sense.
Ting Siew May v Boon Lay Choo	Court of Appeal	Yes	[2014] 3 SLR 609	Singapore	Cited for the basic principles with regard to the proof of illegality.
Edler v Auerbach	English High Court	Yes	[1950] 1 KB 359	England and Wales	Cited for the basic principles with regard to the proof of illegality.
Lena Leowardi v Yeap Cheen Soo	High Court	Yes	[2014] SGHC 44	Singapore	This is the judgment that is being appealed. The Court of Appeal reversed the decision of the High Court.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 18 r 8(1)

14. Applicable Statutes

Statute Name	Jurisdiction
Moneylenders Act (Cap 188, 2010 Rev Ed)	Singapore
Moneylenders Act (Cap 188, 2010 Rev Ed) s 5	Singapore
Moneylenders Act (Cap 188, 2010 Rev Ed) s 14.—(1)	Singapore
Moneylenders Act (Cap 188, 2010 Rev Ed) s 3	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Moneylenders Act
Guarantee
Promissory Note
Loan Agreement
Bonus Payment
Unlicensed Moneylender
Contingent Payment
Bankruptcy

15.2 Keywords

moneylending
guarantee
contract
loan
Singapore
appeal

17. Areas of Law

Area Name	Relevance Score
Money and moneylenders	90
Guarantees and indemnities	80
Fraud and Deceit	80
Contract Law	70
Banking Law	60
Civil Procedure	40
Agency Law	30
Trust Law	20
Estoppel	20
Corporate Law	20

16. Subjects

Contract Law
Financial Law