City Harvest Church v AMAC Capital Partners: Unenforceability of Loan Agreements under Moneylenders Act
City Harvest Church sued AMAC Capital Partners, its investment manager, and Chew Eng Han, the director and majority shareholder of AMAC, for $16,339,333 and accrued interest related to investments made by the church. The High Court heard the Registrar's Appeals and allowed them in part, setting aside the judgment against AMAC and granting Chew leave to defend for the First to Third Outstanding Tranches unconditionally. For the Fourth Outstanding Tranche, the court required AMAC and/or Chew to furnish security of $1.5m.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeals allowed in part. The order setting aside the judgment against AMAC Capital Partners and the order giving Chew Eng Han leave to defend were unconditional for the First to Third Outstanding Tranches. For the Fourth Outstanding Tranche, the orders were conditional upon AMAC Capital Partners and/or Chew Eng Han furnishing security in the sum of $1.5m.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
City Harvest Church sued AMAC Capital Partners and Chew Eng Han for breach of contract. The court considered whether the loan agreements contravened the Moneylenders Act.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| City Harvest Church | Plaintiff | Association | Appeal allowed in part | Partial | Ong Su Aun Jeffrey, Yeo Lai Hock, Nichol |
| AMAC Capital Partners | Defendant, Appellant | Corporation | Appeal allowed in part | Partial | A Rajandran |
| Chew Eng Han | Defendant, Appellant | Individual | Appeal allowed in part | Partial | A Rajandran |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chua Lee Ming | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ong Su Aun Jeffrey | JLC Advisors LLP |
| Yeo Lai Hock, Nichol | JLC Advisors LLP |
| A Rajandran | A. Rajandran |
4. Facts
- City Harvest Church sued AMAC Capital Partners and Chew Eng Han for $16,339,333 and accrued interest.
- AMAC Capital Partners was City Harvest Church’s investment manager.
- Chew Eng Han was the sole director and majority shareholder of AMAC Capital Partners and guarantor for the sums due.
- The claims related to investments made by City Harvest Church in the Special Opportunity Fund.
- The Special Opportunity Fund was set up as a result of a request for a short-term bridging loan.
- AMAC guaranteed the repayment of capital and interest in each tranche to City Harvest Church.
- AMAC was unable to pay City Harvest Church due to the borrower defaulting on the underlying loans.
5. Formal Citations
- City Harvest Church v AMAC Capital Partners and another, Suit No 1077 of 2014 (Registrar's Appeal Nos 181 and 182 of 2015), [2015] SGHC 299
6. Timeline
| Date | Event |
|---|---|
| City Harvest Church appointed AMAC Capital Partners as its investment manager. | |
| Oh Chee Eng approached Chew Eng Han for a three-month bridging loan of $5m for Transcu Group Limited. | |
| Chew Eng Han informed Tan Ye Peng about Chee Eng’s proposal via Blackberry message. | |
| Sharon Tan sent emails to the plaintiff’s investment committee and Board seeking approval to make the investment based on Chew’s proposal. | |
| City Harvest Church signed the Special Opportunity Fund Agreement. | |
| AMAC Capital Partners had paid City Harvest Church the principal sums and the accrued interest for all the tranches that the plaintiff had subscribed to except Tranches 13, 14, 16, 17 and 18. | |
| City Harvest Church agreed to a 6-month extension to 2011-02-28 for AMAC Capital Partners to make payment of the sums due under these tranches. | |
| AMAC Capital Partners did not manage to pay City Harvest Church. | |
| AMAC Capital Partners paid City Harvest Church the outstanding balance for Tranche 17. | |
| Chew Eng Han signed a guarantee in favour of City Harvest Church. | |
| City Harvest Church entered judgment in default of appearance against AMAC Capital Partners. | |
| The Senior Assistant Registrar set aside the judgment against AMAC Capital Partners and gave Chew Eng Han leave to defend. | |
| The High Court allowed the appeals in part. |
7. Legal Issues
- Breach of Contract
- Outcome: The court considered whether AMAC Capital Partners and Chew Eng Han breached their contractual obligations to City Harvest Church.
- Category: Substantive
- Enforceability of Loan Agreements under the Moneylenders Act
- Outcome: The court considered whether the loan agreements contravened the Moneylenders Act, rendering them unenforceable.
- Category: Substantive
- Related Cases:
- [2005] 1 SLR(R) 733
- [1964] 1 WLR 978
- Breach of Charities Act
- Outcome: The court briefly considered whether the plaintiff's conduct breached the Charities Act.
- Category: Substantive
- Agency
- Outcome: The court considered whether the defendants were acting as the plaintiff’s agents at all material times.
- Category: Substantive
- Consideration for Guarantee
- Outcome: The court considered whether Chew’s guarantee was supported by consideration.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Guarantee
10. Practice Areas
- Commercial Litigation
- Investment Management
11. Industries
- Religious Organization
- Financial Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Mercurine Pte Ltd v Canberra Development Pte Ltd | High Court | Yes | [2008] 4 SLR(R) 907 | Singapore | Cited for the principle that the starting position is to set aside a judgment with no condition imposed if the judgment was irregular. |
| Abdul Salam Asanaru Pillai (trading as South Kerala Cashew Exporters) v Nomanbhoy & Sons Pte Ltd | High Court | Yes | [2007] 2 SLR(R) 856 | Singapore | Cited for the principle that a condition should be imposed when some demonstration of commitment on the part of the defendant to the claimed defence is called for. |
| City Hardware Pte Ltd v Kenrich Electronics Pte Ltd | High Court | No | [2005] 1 SLR(R) 733 | Singapore | Cited to argue that the Moneylenders Act was not intended to apply to loan transactions to escape liability. |
| Premor Ltd v Shaw Brothers (A Firm) | Court of Appeal | Yes | [1964] 1 WLR 978 | England and Wales | Cited for the principle that loans must be associated with a transaction of the business and must be to promote or directly help the principal business of the plaintiff. |
13. Applicable Rules
| Rule Name |
|---|
| O 13 r 1 of the Rules |
| O 13 r 7 of the Rules |
| O 13 r 8 of the Rules |
| O 14 rr 3 and 4 |
| O 63A r 10 of the Rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Moneylenders Act (Cap 188, 2010 Rev Ed) | Singapore |
| Charities Act (Cap 37, 2007 Rev Ed) | Singapore |
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) | Singapore |
| Securities and Futures Act (Cap. 289) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Special Opportunity Fund
- Tranches
- Underlying Loans
- Guarantee
- Investment Manager
- Accredited Investors
- Excluded Moneylender
15.2 Keywords
- City Harvest Church
- AMAC Capital Partners
- Chew Eng Han
- Moneylenders Act
- Special Opportunity Fund
- Loan Agreement
- Guarantee
16. Subjects
- Contract Dispute
- Investment Dispute
- Moneylending
17. Areas of Law
- Contract Law
- Moneylenders Act
- Agency Law
- Charities Act