Millennium Commodity Trading Ltd v BS Tech Pte Ltd: Action on Dishonoured Cheque & Alleged Fraud

In Millennium Commodity Trading Ltd v BS Tech Pte Ltd, the Singapore High Court addressed an action on a dishonoured cheque for S$678,016.94. Millennium Commodity Trading Ltd, the plaintiff, sued BS Tech Pte Ltd, the defendant, after the cheque was dishonoured. The plaintiff applied for summary judgment. The defendant claimed the cheque was related to a fraudulent financial joint venture agreement. The court upheld the assistant registrar's decision to grant the defendant conditional leave to defend, contingent upon furnishing security of $450,000.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Both appeals against the assistant registrar's decision were dismissed. The defendant was granted conditional leave to defend, contingent upon furnishing security of $450,000.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case involving a dishonoured cheque and allegations of fraud in a financial joint venture agreement. Summary judgment application outcome.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Millennium Commodity Trading LtdPlaintiffCorporationAppeal DismissedNeutral
BS Tech Pte LtdDefendantCorporationAppeal Dismissed; Conditional Leave to Defend GrantedPartial

3. Judges

Judge NameTitleDelivered Judgment
Vinodh CoomaraswamyJudgeYes

4. Counsels

Counsel NameOrganization
Chong Xin YiIgnatius J and Associates
Wong Jun WengIgnatius J and Associates
Yeo Mui LinIgnatius J and Associates
Ganga AvadiarAdvocatus Law LLP
Asik SadayanAdvocatus Law LLP

4. Facts

  1. Plaintiff and defendant entered into a Financial Joint Venture Agreement for the defendant to procure a standby letter of credit (SBLC) in favour of the plaintiff.
  2. Plaintiff transferred €400,000 to the defendant in two tranches as instructed by the defendant.
  3. Defendant drew a cheque in the plaintiff’s favour for S$678,016.94, equivalent to €400,000.
  4. The cheque was post-dated to 15 August 2014.
  5. Defendant failed to procure the SBLC or transfer €10m to the plaintiff.
  6. Plaintiff presented the cheque for payment on 21 November 2014, and it was dishonoured.
  7. Plaintiff commenced action on 23 February 2016 to recover S$678,016.94.

5. Formal Citations

  1. Millennium Commodity Trading Ltd v BS Tech Pte Ltd, Suit No 182 of 2016 (Registrar’s Appeal No 237 of 2016), [2017] SGHC 58

6. Timeline

DateEvent
Defendant authorized Khir Johari Bin Mohamed to represent the defendant in agreement discussions.
Financial Joint Venture Agreement signed between plaintiff and defendant.
Addendum to Financial Joint Venture Agreement signed.
Plaintiff transferred €400,000 to the defendant.
Cheque post-dated to this date.
Plaintiff presented the cheque for payment; it was dishonoured.
Plaintiff presented the cheque again; it was dishonoured.
Tahir ceased to be the defendant’s managing director.
Plaintiff commenced action against defendant.
Defendant filed its defence.
Kin Lam's second affidavit was dated.
Plaintiff applied for summary judgment.
Defendant obtained leave to join Tahir and Johari as third parties.
Redhy @ B Balamurugan's third affidavit was dated.
Assistant registrar heard the application.
Hearing date.
Plaintiff's and Defendant's written submissions were dated.
Hearing date.
Hearing date.
Judgment date.

7. Legal Issues

  1. Summary Judgment
    • Outcome: The court upheld the assistant registrar's decision to grant the defendant conditional leave to defend.
    • Category: Procedural
    • Sub-Issues:
      • Shadowy defence
      • Triable issue
  2. Validity of Cheque
    • Outcome: The court found that the plaintiff had a prima facie case that the cheque was valid and that its delivery had become unconditional.
    • Category: Substantive
    • Sub-Issues:
      • Conditional delivery
      • Post-dated cheque
  3. Fraud
    • Outcome: The court found that the defendant had raised a triable issue of whether the plaintiff had conspired with Tahir and Johari to defraud the defendant.
    • Category: Substantive
    • Sub-Issues:
      • Conspiracy to defraud
      • Fabrication of addendum
  4. Illegality
    • Outcome: The court found that there was a triable issue of whether the agreement was unenforceable for illegality.
    • Category: Substantive
    • Sub-Issues:
      • Illegal contract
  5. Failure of Consideration
    • Outcome: The court found that there was no triable issue as to whether the defendant had suffered a total or quantified partial failure of consideration.
    • Category: Substantive
    • Sub-Issues:
      • Total failure of consideration
      • Partial failure of consideration
  6. Governing Law
    • Outcome: The court found that the plaintiff had no obligation to plead foreign law to succeed in its claim on the cheque.
    • Category: Jurisdictional
    • Sub-Issues:
      • Choice of law clause
      • Pleading foreign law

8. Remedies Sought

  1. Judgment on the cheque for S$678,016.94
  2. Interest under s 57(a) of the Bills of Exchange Act

9. Cause of Actions

  • Action on a cheque

10. Practice Areas

  • Commercial Litigation
  • Banking
  • Civil Litigation

11. Industries

  • Finance
  • Commodities Trading

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Wee Cheng Swee Henry v Jo Baby Kartika PolimSingapore Court of AppealYes[2015] 4 SLR 250SingaporeCited for the principle that conditional leave to defend is appropriate when a defence is triable but shadowy.
Hatton National Bank Ltd v Ocean Gourmet Pte LtdHigh CourtYes[2000] 3 SLR(R) 879SingaporeCited to argue that the defendant is estopped from claiming the cheque is not valid, having received the €400,000.
Cassa di Risparmio di Parma e Piacenza SpA v Rals International Pte LtdHigh CourtYes[2016] 1 SLR 79SingaporeCited to support the argument that the court should ignore any underlying contractual dispute in an action under the Bills of Exchange Act.
Thomson Rubbers (India) Pte Ltd v Tan Ai HockHigh CourtYes[2012] 1 SLR 772SingaporeCited to support the argument that the court should grant summary judgment for the claimant save only in exceptional circumstances.
Abdul Salam Asanaru Pillai (trading as South Kerala Cashew Exporters) v Nomanbhoy & Sons Pte LtdHigh CourtYes[2007] 2 SLR(R) 856SingaporeCited to argue that the condition to be attached to the leave should be that the defendant furnish security for the full value of the cheque.
Piallo Gmbh v Yafriro International Pte LtdHigh CourtYes[2014] 1 SLR 1028SingaporeCited to argue that a claim on the cheque, being inextricably connected to the agreement, must also be determined by the foreign law which governs the agreement.
Yeow Chern Lean v Neo Kok Eng and AnotherHigh CourtYes[2009] 3 SLR(R) 1131SingaporeCited to suggest that title in the cheque in these circumstances did not pass to the plaintiff, who was therefore not entitled to present it for payment.
Hinchcliffe v Ballarat Banking CoSupreme Court of VictoriaYes(1870) 1 VR (L) 229AustraliaCited for the proposition that a post-dated cheque is a bill of exchange only during the period between the date it is issued and the date which it bears.
Van Lynn Developments Ltd v Pelias Construction Co Ltd (formerly Jason Construction Co Ltd)Court of AppealYes[1969] 1 QB 607England and WalesCited where the defendant secured only conditional leave to defend and argues that its defences in the present case are stronger.
Star Cruise Services Ltd v Overseas Union Bank LtdHigh CourtYes[1999] 2 SLR(R) 183SingaporeCited for the principle that a Singapore court will apply Singapore law unless a litigant establishes that foreign law applies.
Amin Rasheed Shipping Corporation v Kuwait Insurance CoHouse of LordsYes[1984] AC 50United KingdomCited for the principle that contracts are incapable of existing in a legal vacuum.
Rals International Pte Ltd v Cassa di Risparmio di Parma e Piacenza SpACourt of AppealYes[2016] 5 SLR 455SingaporeCited as overruling Piallo (HC) on the close connection test for arbitration clauses in contracts and bills of exchange.
City Hardware Pte Ltd v Goh Boon ChyeHigh CourtYes[2005] 1 SLR(R) 754SingaporeCited as authority for the proposition that a post-dated cheque delivered as a form of collateral or security is a valid cheque capable of being sued on independently from the underlying agreement.
Forster v MackrethCourt of ExchequerYes(1867) LR 2 Ex 163England and WalesCited to equate a post-dated cheque with a bill of exchange until at least the date marked upon the cheque.
Ashok Yeshwant Badave v Surendra Madhavrao Nighojakar and AnotherSupreme Court of IndiaYes(2001) 3 SCC 726IndiaCited as being premised on the validity of a post-dated cheque on and after the date marked on it.
Alsager v CloseCourt of ExchequerYes(1842) 10 M & W 576England and WalesCited as an action in trover brought by the assignees of a bankrupt against the transferee of a bill of exchange drawn in the amount of £1,600.
Clifford Chance v SilverCourt of AppealYes[1992] 2 Bank LR 11England and WalesCited for the proposition that delivery is complete upon fulfilment of the condition.
Marina Sports Ltd v Alliance Richfield Pte LtdHigh CourtYes[1990] 1 SLR(R) 385SingaporeCited to argue that the delivery of the cheque was conditional under s 21(3)(b) of the Act.
Goh Chok Tong v Chee Soon JuanHigh CourtYes[2003] 3 SLR(R) 32SingaporeCited for the principle that the defendant must show grounds which raise a reasonable probability that it has a real or bona fide defence in relation to the issues in dispute which ought to be tried.
Ritzland Investment Pte Ltd v Grace Management & Consultancy Services Pte LtdHigh CourtYes[2014] 2 SLR 1342SingaporeCited for the principle that if the defendant fails to establish either of these grounds, the court will enter judgment against the defendant.
Wong Fook Heng v Amixco Asia Pte LtdHigh CourtYes[1992] 1 SLR(R) 654SingaporeCited for the principle that the cheque constitutes a separate contract and creates obligations for the drawer and rights for the payee that are autonomous from any underlying transaction.
Ooi Ching Ling Shirley v Just Gems IncHigh CourtYes[2003] 1 SLR(R) 14SingaporeCited to argue that it has suffered a failure of consideration because it has not enjoyed the benefit of what it bargained for.
Fielding & Platt Ltd v Selim NajjarHigh CourtYes[1969] 1 WLR 357England and WalesCited for the principle that we are concerned with the contractual sense of consideration as the exchange of benefit and detriment which combines with offer and acceptance to create an enforceable agreement.
Pollway Ltd v AbdullahHigh CourtYes[1974] 1 WLR 493England and WalesCited for the principle that we are concerned with the contractual sense of consideration as the exchange of benefit and detriment which combines with offer and acceptance to create an enforceable agreement.
Nova (Jersey) Knit Ltd v Kammgarn Spinnerei GmbHHouse of LordsYes[1977] 1 WLR 713United KingdomCited for the principle that while total failure of consideration is a complete defence to an action brought on a bill of exchange, partial failure of consideration affords a pro tanto defence provided it is for a liquidated and ascertainable amount.
Autobiography Ltd v ByrneHigh CourtYes[2005] EWHC 213 (Ch)England and WalesCited as a case involving a dishonoured cheque in which these principles were applied.
Mohd Zain bin Abdullah v Chimbusco International Petroleum (Singapore) Pte LtdHigh CourtYes[2014] 2 SLR 446SingaporeCited for the principle that the court has an unqualified and widely framed discretion as to the type of condition to impose on a grant of leave to defend to ensure that justice is done in any particular case.
Anglo-Eastern Trust Ltd & Another v KermanshahchiCourt of AppealYes[2002] EWCA Civ 198England and WalesCited for the principle that a court should not as a general rule make an order of the type made [by the court below] in the absence of any evidence about the defendant’s means unless it is satisfied that the defendant has been given appropriate prior notice.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Bills of Exchange Act (Cap 23, 2004 Rev Ed)Singapore
s 57(a) of the Bills of Exchange Act (Cap 23, 2004 Rev Ed)Singapore
s 3 of the Bills of Exchange Act (Cap 23, 2004 Rev Ed)Singapore
s 13 of the Bills of Exchange Act (Cap 23, 2004 Rev Ed)Singapore
s 21(3)(b) of the Bills of Exchange Act (Cap 23, 2004 Rev Ed)Singapore
s 73 of the Bills of Exchange Act (Cap 23, 2004 Rev Ed)Singapore
s 30(1) of the Bills of Exchange Act (Cap 23, 2004 Rev Ed)Singapore
s 27(1) of the Bills of Exchange Act (Cap 23, 2004 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Cheque
  • Standby Letter of Credit (SBLC)
  • Financial Joint Venture Agreement
  • Dishonoured cheque
  • Conditional leave to defend
  • Security for claim
  • Post-dated cheque
  • Triable issue
  • Fraud
  • Illegality
  • Failure of consideration

15.2 Keywords

  • Cheque
  • Bills of Exchange Act
  • Summary judgment
  • Fraud
  • Conditional leave to defend
  • Post-dated cheque
  • SBLC

17. Areas of Law

Area NameRelevance Score
Bills of Exchange Law80
Contract Law70
Civil Procedure60
Fraud and Deceit50
Banking Law40
Commercial Law30

16. Subjects

  • Bills of Exchange
  • Banking
  • Civil Procedure
  • Contract Law
  • Conflict of Laws