Lena Leowardi v Yeap Cheen Soo: Illegal Moneylending & Guarantee Enforcement
In Lena Leowardi v Yeap Cheen Soo, the High Court of Singapore heard a claim by Lena Leowardi against Yeap Cheen Soo to recover $540,000 based on guarantees for loans to Choong Kok Kee. The court, Tan Siong Thye JC presiding, dismissed the plaintiff's claim on 11 March 2014, finding that the loans constituted unlicensed moneylending under the Moneylenders Act, rendering the guarantees unenforceable.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiff's case dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Lena Leowardi sued Yeap Cheen Soo to recover loans guaranteed by Yeap. The court dismissed the claim, finding the loans constituted illegal moneylending.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lena Leowardi | Plaintiff | Individual | Claim Dismissed | Lost | S Gunaseelan |
| Yeap Cheen Soo | Defendant | Individual | Judgment for Defendant | Won | Ong Ying Ping, Lim Seng Siew |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Siong Thye | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| S Gunaseelan | S Gunaseelan & Partners |
| Ong Ying Ping | OTP Law Corporation |
| Lim Seng Siew | OTP Law Corporation |
4. Facts
- Plaintiff claimed $200,000 and $340,000 from the Defendant, loans guaranteed by the Defendant.
- Loans were advanced by the Plaintiff to Choong, who defaulted.
- Defendant guaranteed repayment of the loans.
- Promissory notes were signed by the Plaintiff and Choong, promising additional payments beyond the loan amounts.
- The First and Third Loan Agreements were guaranteed by the Defendant, who pledged his apartment as security.
- The Second Loan Agreement was secured by Choong's HDB apartment.
- Choong was declared bankrupt.
5. Formal Citations
- Lena Leowardi v Yeap Cheen Soo, Suit No 931 of 2012, [2014] SGHC 44
6. Timeline
| Date | Event |
|---|---|
| Choong introduced to Thomas Tan Boon Chai | |
| Choong asked PW1 to lend him $200,000 | |
| PW1 approached the Plaintiff and informed her of Choong’s situation | |
| PW1 introduced the Plaintiff to Choong | |
| Promissory note issued by Choong to Plaintiff | |
| First Loan Agreement executed | |
| Second Loan Agreement executed | |
| Plaintiff signed a promissory note | |
| Third Loan Agreement executed | |
| Promissory note signed by Plaintiff and Choong | |
| Fourth Loan Agreement entered into | |
| Plaintiff commenced proceedings against the Defendant | |
| Judgment issued | |
| Appeal allowed by the Court of Appeal |
7. Legal Issues
- Illegal Moneylending
- Outcome: The court found that the loans constituted illegal moneylending under the Moneylenders Act.
- Category: Substantive
- Enforceability of Guarantee
- Outcome: The court held that the guarantees were unenforceable under s 14(2)(a) of the Moneylenders Act because the loans were made by an unlicensed moneylender.
- Category: Substantive
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 |
|---|---|---|---|---|---|
| Bansal Hemant Govindprasad and another v Central Bank of India | N/A | Yes | [2003] 2 SLR(R) 33 | Singapore | Cited for the principle that accepting the plaintiff’s evidence at its face value, no case has been established in law |
| Tan Juay Pah v Kimly Construction Pte Ltd and others | Court of Appeal | Yes | [2012] 2 SLR 549 | Singapore | Cited for the principle that because the defendant made a submission of “no case to answer” in the court below, the threshold against which the above questions are to be assessed is that of whether a prima facie case has been established by the plaintiff against the defendant |
| Relfo Ltd (in liquidation) v Bhimji Velji Jadva Varsani | N/A | Yes | [2008] 4 SLR(R) 657 | Singapore | Cited for the principle that I must assume that any evidence led by the Plaintiff is true unless it is inherently incredible or out of all common sense or reason |
| Lim Swee Khiang and another v Borden Co (Pte) Ltd and others | Court of Appeal | Yes | [2006] 4 SLR(R) 745 | Singapore | Cited for the principle that where the defendant elects not to give any evidence on a submission of no case to answer, the burden on the Plaintiff is simply to prove a prima facie case and such a burden “is not difficult to discharge” |
| Subramaniam Dhanapakiam v Ghaanthimathi | N/A | Yes | [1991] 1 SLR(R) 164 | Singapore | Discusses friendly loans and whether the presumption under s 3 of the Act was rebutted rather than whether the presumption applied in that case. |
| Mak Chik Lun and others v Loh Kim Her and others and another action | N/A | Yes | [2003] 4 SLR(R) 338 | Singapore | Explains that to prove that a person is in the business of moneylending, the easiest way is to show that the rebuttable presumption in s 3 of the Act is applicable to the facts of the case. |
| Ng Kum Peng v Public Prosecutor | N/A | Yes | [1995] 2 SLR(R) 901 | Singapore | Cited for the principle that there must be more than occasional loans. This is what is meant by continuity. The loans must be part of an ongoing and routine series of transactions made by the alleged moneylender. |
| Newton v Pyke | N/A | Yes | (1908) 25 TLR 127 | N/A | Cited for the “system and continuity” test |
| Litchfield v Dreyfus | N/A | Yes | [1906] 1 KB 584 | N/A | Cited for the principle that a man who carries on a moneylending business is one who is ready and willing to lend to all and sundry, provided that they are from his point of view eligible. |
| City Hardware Pte Ltd v Kenrich Electronics Pte Ltd | N/A | Yes | [2005] 1 SLR(R) 733 | Singapore | Cited for the principle that the court has no alternative but to give effect to the draconian consequences of an infraction in the event that the Moneylenders Act is offended |
| Lena Leowardi v Yeap Cheen Soo | Court of Appeal | Yes | [2014] SGCA 57 | Singapore | Editorial note indicating that the appeal to this decision was allowed by the Court of Appeal. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Moneylenders Act (Cap 188, 2010 Rev Ed) | Singapore |
| s 14(2)(a) of the Moneylenders Act (Cap 188, 2010 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Moneylending
- Guarantee
- Promissory Note
- Loan Agreement
- Unlicensed Moneylender
- Bonus Reward
- Investment
- Administrative Fees
- Security
15.2 Keywords
- Moneylender Act
- Guarantee
- Loan
- Singapore
- High Court
- Civil Case
16. Subjects
- Moneylending Law
- Contract Law
- Banking and Finance
17. Areas of Law
- Moneylenders Act
- Contract Law
- Guarantee Law