Liew Kum Chong v SVM International Trading: Sham Transaction, Mistake, Non Est Factum, Unconscionability, Illegal Moneylending
In Liew Kum Chong v SVM International Trading Pte Ltd and others, the High Court of Singapore heard a case regarding the repayment of loans. Liew Kum Chong sued SVM International Trading Pte Ltd, Feasto Pte Ltd, Mizimegah Pte Ltd, and Scarlett Merida Xi Wei Yuan for the outstanding balance on loans, with Scarlett as guarantor. The defendants claimed the loans were sham transactions and unenforceable under the Moneylenders Act. The court entered judgment for the plaintiff against SVM, Feasto, Mizimegah and Scarlett.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Liew Kum Chong sues SVM International Trading and others for loan repayment. The court found no sham transaction or unconscionability, ruling in favor of Liew.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| SVM International Trading Pte Ltd | Defendant | Corporation | Judgment against Defendant | Lost | A Rajandran of A Rajandran |
| Feasto Pte Ltd | Defendant | Corporation | Judgment against Defendant | Lost | A Rajandran of A Rajandran |
| Mizimegah Pte Ltd | Defendant | Corporation | Judgment against Defendant | Lost | A Rajandran of A Rajandran |
| Scarlett Merida Xi Wei Yuan | Defendant | Individual | Judgment against Defendant | Lost | A Rajandran of A Rajandran |
| Liew Kum Chong | Plaintiff | Individual | Judgment for Plaintiff | Won | |
| Pan Jiaying | Defendant | Individual | Action Discontinued | Dismissed |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chua Lee Ming | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| A Rajandran | A Rajandran |
| Gavin Neo | WongPartnership LLP |
| Tang Shang Wei | WongPartnership LLP |
4. Facts
- Liew Kum Chong commenced an action seeking the return of the balance outstanding on loans given to SVM, Feasto and Mizimegah.
- Liew Kum Chong sued Scarlett and Pan as guarantors for the loans.
- Scarlett was the sole director of SVM, Feasto and Mizimegah.
- Scarlett and Pan signed a Deed of Guarantee dated 26 September 2013.
- Scarlett and Pan signed Options to Purchase on behalf of SVM, Feasto and Mizimegah.
- The loans were repayable within “2 to 3 months”.
- Pan made part payments to the plaintiff on behalf of SVM, Feasto and Mizimegah, amounting to $400,000 in total.
5. Formal Citations
- Liew Kum Chong v SVM International Trading Pte Ltd and others, Suit No 980 of 2016, [2019] SGHC 163
6. Timeline
| Date | Event |
|---|---|
| Mizimegah was incorporated | |
| Feasto was incorporated | |
| Scarlett met Pan | |
| Feasto bought the Dusun property | |
| Redpine Capital Private Limited was incorporated | |
| SVM was incorporated | |
| Mizimegah bought the NEWest property | |
| SVM bought the KAP property | |
| Scarlett and Pan signed a Deed of Guarantee | |
| Scarlett and Pan signed Options to Purchase | |
| Pan issued a cheque for $800,000 | |
| Tang presented the Redpine cheque for payment | |
| Scarlett sent a text message to Tang | |
| Scarlett sent a message to Tang | |
| Tang sent a message to Scarlett | |
| SVM’s lawyers sent a letter of demand to Pan | |
| Plaintiff demanded repayment from SVM, Feasto and Mizimegah | |
| Pan made part payments to the plaintiff | |
| Pan made part payments to the plaintiff | |
| Tang informed Scarlett that Pan had paid $400,000 to the plaintiff | |
| Scarlett sent a message to Lester | |
| Plaintiff filed the present action | |
| Action against Pan was deemed to have been discontinued | |
| Trial began | |
| Trial | |
| Trial | |
| Trial | |
| Trial | |
| Judgment entered for the plaintiff | |
| Judgment Date |
7. Legal Issues
- Sham Transaction
- Outcome: The court rejected the defence that the loans were sham transactions.
- Category: Substantive
- Related Cases:
- [2009] 4 SLR(R) 1062
- Unconscionability
- Outcome: The court rejected the defence of unconscionability.
- Category: Substantive
- Non Est Factum
- Outcome: The court rejected the defence of non est factum.
- Category: Substantive
- Related Cases:
- [2015] 5 SLR 62
- [2015] 1 SLR 396
- Unlicensed Moneylending
- Outcome: The court found that the plaintiff was an excluded moneylender and the defence of unlicensed moneylending failed.
- Category: Substantive
- Related Cases:
- [2015] 3 SLR 524
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Breach of Guarantee
10. Practice Areas
- Commercial Litigation
11. Industries
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Orix Capital Ltd v Personal Representative(s) of the Estate of Lim Chor Pee (deceased) | N/A | Yes | [2009] 4 SLR(R) 1062 | Singapore | Cited for the principle that to show a transaction was a sham, the documents were not intended to create legal relationships, and the parties did not act according to the apparent purpose and tenor of the documents. |
| Mahidon Nichiar bte Mohd Ali v Dawood Sultan Kamaldin | N/A | Yes | [2015] 5 SLR 62 | Singapore | Cited for the requirements to invoke the doctrine of non est factum. |
| Kuek Siew Chew v Kuek Siang Wei | N/A | Yes | [2015] 1 SLR 396 | Singapore | Cited for the principle that a deed of consent was binding on a signatory who had knowledge of the general nature and effect of the deed prior to signing it, even though the signatory had not read the document and its terms were not explained. |
| Sheagar s/o T M Veloo v Belfield International (Hong Kong) Ltd | N/A | Yes | [2015] 3 SLR 524 | Singapore | Cited for the principle that the burden would fall on the plaintiff to rebut the presumption of moneylending by proving that he was not carrying on the business of moneylending. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court | Singapore |
| Moneylenders Act (Cap 188, 2010 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Sham transaction
- Non est factum
- Unconscionability
- Moneylenders Act
- Deed of Guarantee
- Options to Purchase
- Excluded moneylender
15.2 Keywords
- Contract
- Guarantee
- Loan
- Moneylender
- Singapore
- High Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Contract Law | 95 |
| Sham Transaction | 85 |
| Guarantee | 80 |
| Money and moneylenders | 75 |
| Illegal moneylending | 70 |
| Unconscionability | 70 |
| Non est factum | 65 |
| Banking and Finance | 60 |
| Company Law | 50 |
| Fraud and Deceit | 45 |
| Misrepresentation | 40 |
| Duress | 30 |
16. Subjects
- Contract Law
- Moneylending
- Guarantees
- Civil Litigation