1 In this suit, the first plaintiff, Alternative Advisors Investments Pte Ltd (“AAI”), claims the outstanding sum and interest due and owing from the defendants pursuant to a S$2m loan granted to the first defendant, Asidokona Mining Resources Pte Ltd (“Asidokona”), and personally guaranteed by the second defendant, Soh Sai Kiang (“Mr Soh”). The loan was extended by the second plaintiff, Supreme Star Investments Ltd (“SSI”), in 2016. In 2018, SSI assigned the loan to AAI.

2 The defendants do not dispute receipt of the loan amount and making certain repayments. They resist the claim on numerous grounds. That said, a core aspect of the pleaded defence – that the loan is a personal loan to Mr Soh, and not a corporate loan to Asidokona – was not pursued at the trial. With this late change in position, many factual disputes fall away. Specifically, allegations attacking AAI’s witnesses for forcing Mr Soh into accepting a last-minute increase to the interest rate, and of forgery and fabrication of the corporate loan and personal guarantee documents (after Mr Soh allegedly signed on blank pages merely to effect the personal loan to him), are abandoned. None of AAI’s witnesses were cross-examined on such matters. Instead, at the close of AAI’s case, the defendants submitted that there is no case to answer and elected not to adduce any evidence.

3 Having considered the parties’ submissions and the evidence before me, I grant judgment in favour of the plaintiff. These are my reasons.

4 AAI is a company registered in Singapore. As an independent boutique advisory firm, it is in the business of providing professional services to companies and investors. Mr Wong Joo Wan (“Mr Wong”) is the managing director of AAI. ¹ Mr Wong is a chartered accountant, and an insolvency practitioner by profession. ²

5 SSI is an investment holding company incorporated in the British Virgin Islands (“BVI”). ³ Ms Lou Swee Lan (“Ms Lou”), also known as Stephanie, is the sole shareholder and director of SSI. ⁴ On 1 November 2019, SSI was struck off the BVI Register of Companies. ⁵ After SSI was restored to the BVI Register of Companies on 23 July 2021, ⁶ it did not take any active steps to participate in the action.

6 Ms Lou and her husband, Mr Wong Koon Lup, also known as William (“Mr William Wong”), were clients of Mr Ong Su Aun Jeffrey (“Mr Ong”), the former managing partner of JLC Advisors LLP (“JLC Advisors”). ⁷ SSI was also a client of Mr Ong. According to AAI, in relation to the loan transaction, at all material times, Mr Ong was authorised to act as SSI’s solicitor, while Mr Wong was authorised to act as SSI’s agent. ⁸ The defendants, however, dispute the authority of Mr Ong and Mr Wong to represent SSI.

7 Turning to the defendants, Asidokona is a company registered in Singapore and is in the business of mining activities. Mr Soh, also known as Philip, is the sole director and shareholder of Asidokona. He is an experienced banker and businessman. ⁹ Mr Wong and Mr Soh are old acquaintances.

8 According to Mr Wong, sometime in or around June 2016, Mr Soh contacted him to ask if he could assist to arrange a loan of S$2m to Asidokona for the purpose of funding its working capital. Mr Wong informed Mr Soh that he would reach out to Mr Ong as he was aware that Mr Ong had clients who may be willing to extend such a loan to Asidokona. ¹⁰

9 When Mr Wong contacted Mr Ong, he was told that Mr Ong’s client, whom Mr Ong described as the “Hong Kong side”, was prepared to contribute only 50% of the loan amount, ie, S$1m. Further, Mr Ong’s client would like to “take charge” of the loan. As for the terms of the loan, it would be for three months with 5% interest per month coupled with security for the loan. ¹¹

10 Mr Wong decided that he would personally contribute towards the remaining 50% of the loan, ie, S$1m. On or around 30 June 2016, Mr Wong updated Mr Soh of the outcome of his discussion with Mr Ong. On or around 4 July 2016, Mr Soh confirmed that he would proceed with the loan. ¹² Following Mr Soh’s confirmation that Asidokona would proceed with the loan, Mr Wong informed Mr Ong to prepare the necessary documents for the loan. ¹³

11 On 18 July 2016, at 5.10pm, Mr Ong sent the following email to Mr Soh (copying Mr Wong) regarding “Project Gold”: ¹⁴

The documents attached were a power of attorney between Mr Soh and SSI (“Power of Attorney”), a deed of charge between Mr Soh and SSI of the shares in Asidokona (“Deed of Charge”), an instrument of transfer for the transfer of the shares in Asidokona from Mr Soh to a corporate buyer (“Share Transfer Form (corporate buyer)”), an instrument of transfer for the transfer of the shares in Asidokona from Mr Soh to an individual buyer (“Share Transfer Form (individual buyer)”), directors’ resolutions in writing passed pursuant to article 90 of Asidokona’s Articles of Association (“Board Resolutions”) and a personal guarantee between Mr Soh and SSI (“Personal Guarantee”).

12 On 19 July 2016 at 8.18am, Mr Soh replied to Mr Ong’s email highlighting that the draft loan agreement was not attached. ¹⁵ In response, at 10.38am, Mr Ong sent Mr Soh (copying Mr Wong) the draft loan agreement between Asidokona and SSI (“Loan Agreement”). ¹⁶ On 21 July 2016, Mr Soh decided to “sign off” on 22 July 2016 and confirmed the following with Mr Wong through WhatsApp messages: ¹⁷

Thus, the common understanding was that Mr Ong was to transfer only S$1,700,000 as the remaining S$300,000 was to be used for the interest payment for three months at the rate of 5% a month as set out in the draft loan agreement. ¹⁸

13 Meanwhile, Mr Ong informed Ms Pok Mee Yau (“Ms Pok”), also known as Karen, that Mr Soh would attend at the JLC Advisors’ office to sign the loan documents. Ms Pok was previously a partner of JLC Advisors. She had drafted the documents attached to Mr Ong’s emails to Mr Soh dated 18 and 19 July 2016 (as mentioned at [11]–[12]), which I shall refer to collectively as the “Loan Documents”. Mr Ong requested Ms Pok to attend to the signing by Mr Soh as he would be occupied then. ¹⁹

14 According to Ms Pok, on 22 July 2016, Mr Soh attended at the JLC Advisors’ office in the morning. Ms Pok introduced herself to Mr Soh as a partner of JLC Advisors. During the meeting which took about 25 minutes, Ms Pok flipped through the relevant documents and briefly explained them to Mr Soh. Ms Pok also told Mr Soh that he could take his time to review the documents before signing and he informed her that he was ready to sign. Ms Pok then asked Mr Soh to sign on the execution pages. ²⁰ Mr Soh did so. ²¹ After Mr Soh had signed the documents, Ms Pok stamped her name and profession and signed in the signature block as the witness for the Loan Agreement, Personal Guarantee, Deed of Charge and Power of Attorney. ²²

15 I should point out that the defendants plead an entirely different version of events. In particular, the defendants aver that, at all times, the loan was meant to be personal to Mr Soh at an interest rate of 3% per month. Mr Ong and Mr Wong, who were present at the meeting at JLC Advisors on 22 July 2016, essentially compelled Mr Soh to agree to an increase of the interest rate from 3% to 5% per month. Due to his urgent need for funds, Mr Soh agreed. Further, as Mr Soh was informed by a female staff that the agreements were not ready for his perusal, out of trust, he signed off on blank pages. ²³ It is patently clear to me that this account is completely unbelievable. Even if one were to disregard the evidence of Mr Wong, Mr Ong or Ms Pok, the defendants’ version is completely undermined by the wealth of objective evidence in the form of the contemporaneous communications between the parties (including some crucial pieces which I have referred to in [11]–[12] above). As I observed at [2] above, at the trial, the defendants dropped these challenges.

16 Turning to the Loan Agreement, the key terms are as follows: ²⁴

17 In the Personal Guarantee furnished by Mr Soh, pursuant to cl 1.1 read with cl 2.1(b), Mr Soh guaranteed that should Asidokona not pay any amount when due under or in connection with the Loan Agreement, Mr Soh would immediately on demand pay that amount to SSI as if he was the principal obligor up to the secured amounts, being the principal sum of S$2m, “all legal costs and other costs, charges and expenses whatsoever (on a full indemnity basis) and interest” accrued on the same. By cl 3, should Mr Soh not make any payment of any sum due and owing under the Personal Guarantee, he shall, to the extent permitted by law, pay interest on such amount due from and including the due date to the date of actual payment (whether before or after judgment) at 6% per month accruing on a daily basis. ²⁵

18 As for the Deed of Charge, by cll 1.1 and 2, as well as the Recital (D) of the Preamble, Mr Soh agreed to charge 100% of the entire shareholding in the issued and paid-up capital of Asidokona to SSI by way of a first fixed charge for due performance and discharge of all his obligations arising under the Loan Agreement. By cl 4, Mr Soh is to deliver to SSI the share certificates for the Charged Shares, together with two share transfer forms executed in blank, and a certified true copy of the Register of Members of Asidokona duly noting that the shares are subject to the charge. ²⁶

19 On 22 July 2016, the S$2m loan was fully disbursed by DBS cheques dated the same date for S$1.1m and S$590,000 to Asidokona. Apart from the actual disbursement of S$1.69m, interest for three months of S$300,000 and transaction expenses of S$10,000 under cl 9.2 of the Loan Agreement were accounted for. ²⁷

20 Of the S$2m principal sum, Mr Wong contributed a total of S$1m to SSI. ²⁸ Mr Wong contributed S$500,000 of his own money, and approached some other people to extend personal loans to him to raise the remaining S$500,000 as follows: ²⁹

Due to the time constraints, Mr Wong told the four parties to make payments directly to the JLC Advisors’ clients’ account. Mr Wong has since repaid everyone for the full sums except for Mr Yong’s S$100,000. ³⁰ As for Mr Ong’s client, the “Hong Kong” investor contributed the remaining sum of S$1m. More will be said about this from [27] below.

21 As the loan was disbursed on 22 July 2016, the Initial Term of the loan expired on 21 October 2016. This was the common understanding among Mr Wong, Mr Soh and Mr Ong. According to Mr Wong, in accordance with cl 2 read with Item 3 of Schedule 1, Asidokona was granted an extension of the loan by a further three months to 21 January 2017. Thereafter, Mr Wong alleged that Asidokona unilaterally extended the loan on multiple occasions. ³¹

22 In October 2016, via a series of WhatsApp exchanges with Mr Wong, Mr Soh confirmed that he would renew the Loan Agreement on a “month to month basis”. As regards the interest payment, Mr Soh also agreed with Mr Wong’s confirmation that the interest payment liable would be S$100,000. ³² Mr Soh stated that “[w]e will still pay interest. 5 per cent per month”. ³³ Further, on 5 March 2017, Mr Soh also confirmed that “[i]n terms of interest … [w]e will not dispute. Sin 100k …” and that he was of the view that “[they] should be [paying off the loan] by mid March as paper work delay due to [his] hospitalisation”. ³⁴

23 According to AAI, during the period between July 2016 and May 2017, Asidokona made various interest payments to SSI aggregating S$900,000. ³⁵ The defendants do not dispute making payments amounting to S$900,000. However, they plead that these were repayments towards the loan (not interest), and that the repayments were not made to SSI.

24 In any event, Asidokona failed to comply fully with its payment obligations under the Loan Agreement. ³⁶ As of 15 May 2017, Asidokona failed to redeem the loan and SSI issued a statutory demand (through its solicitor Mr Ong) to Mr Soh for the sum of S$2,128,904 on the same date. ³⁷ Between the period from end June 2017 to March 2018, Mr Soh reassured Mr Wong that Asidokona would repay the loan and interest. However, nothing materialised. ³⁸ Thus, SSI’s position is that it is clear from the correspondence that Mr Soh had “repeatedly admitted Asidokona’s liability under the Loan Agreement”. ³⁹

25 According to Mr Wong, in and around March 2018, Mr Ong expressed to Mr Wong SSI’s disappointment and frustration with the empty promises made by the defendants. As the loan was referred to SSI by Mr Wong, Mr Wong decided to arrange for AAI to take over the loan from SSI to “manage the direction forward in recovering the loan debt”. Since Mr Wong had personally invested moneys to fund the loan for Asidokona and Mr Yong had indirectly contributed to the loan (as mentioned at [20] above), both Mr Yong and Mr Wong have an interest in the repayment of the loan. Thus, Mr Yong and Mr Wong decided that their company, AAI, would be the assignee of the Loan Agreement, Personal Guarantee and Deed of Charge. In that respect, Mr Wong “irrevocably assigned [his] interest of S$1,000,000 from SSI to AAI”. The arrangement pursuant to the assignment was that after the payment of costs, any sums recovered from the present proceedings are to be repaid to AAI and SSI in equal proportions. Thus, there is “no avenue for AAI to profit from these proceedings”. ⁴⁰

26 On 30 March 2018, all rights under the Loan Agreement and the Personal Guarantee were assigned from SSI to AAI (the “First Deed of Assignment”), notice of which was given to Asidokona and Mr Soh on 28 August 2018. ⁴¹ However, due to an oversight, the Deed of Charge was not assigned from SSI to AAI under the First Deed of Assignment. The Deed of Charge was assigned only on 15 November 2018 (the “Second Deed of Assignment”), notice of which was likewise given on the same date. ⁴² In relation to the two deeds of assignments which I shall refer to as the “Deeds of Assignments”, Mr Wong signed on behalf of SSI and Mr Yong signed on behalf of AAI.

27 According to Mr Wong, it was also only “during the assignment that [Mr Wong] found out from [Mr Ong] that the Hong Kong investor is [Ms Lou]”. At the time of signing the Loan Agreement, Mr Wong did not know the identity of the “Hong Kong” investor (see [9] above). ⁴³ As such, Mr Wong referred to the other funder for the loan as the “HK” lender in his communications with Mr Soh at the material time. ⁴⁴

28 After Mr Wong became aware that the Hong Kong investor was in fact Ms Lou, Mr Wong called up Mr William Wong (ie, Ms Lou’s husband) sometime in June or July 2018. During that call, Mr William Wong confirmed that SSI had sufficient moneys in July 2016 to fund the loan, that Mr Wong could sign off on the Loan Documents on behalf of SSI, and that Mr Wong could initiate a suit against the defendants. ⁴⁵

29 Indeed, on 22 July 2016, when Mr Soh signed the Loan Documents, SSI did not execute them. Around the time of the assignment from SSI to AAI, this was discovered by Mr Wong. Based on what Mr William Wong communicated, Mr Wong executed the Loan Documents on behalf of SSI. ⁴⁶ This was witnessed by Mr Ong. ⁴⁷

30 Mr Ong’s evidence is broadly consistent with Mr Wong’s account. In particular, Mr Ong also referred to Ms Lou as the “Hong Kong” investor. ⁴⁸ According to Mr Ong, he referred to Ms Lou as such because “Mr William Wong and [Ms Lou] preferred to remain anonymous” behind SSI. Mr Ong remained the “point of contact” at all material times between Mr Wong and SSI. Ms Lou wanted to be a “‘sleeping’ contributor” and was “content to have the [l]oan administered by [Mr Wong] and/or his nominees” for SSI. In that regard, Ms Lou and SSI had “expressly authorised [Mr Wong] to act as SSI’s principal and agent”. ⁴⁹ In his testimony, Mr Ong clarified that Mr William Wong was “the primary person who is in charge of the group of funds and William is based in Hong Kong”. Ms Lou and Mr William Wong were “often in Hong Kong” and they “often remit funds from Hong Kong”. ⁵⁰ Mr Ong confirmed that the remaining sum of S$1m extended to Asidokona was deducted from the pool of funds which Mr William Wong and Ms Lou maintained in JLC Advisors’ client account. ⁵¹

31 In an interesting twist, Ms Lou denied that she knew about the Loan Documents or that SSI had authorised the same to be entered into at the material time. In a slightly incoherent fashion, she nevertheless said that she understood that Mr Ong was acting for SSI in relation to the Loan Documents. ⁵² Ms Lou deposed that since she had “no idea of the Loan Agreement at the material time”, the issue of the source of funds for the same is “best answered by Mr. Jeffrey Ong”. ⁵³ In due course, I shall discuss Ms Lou’s evidence in more detail.

32 On 20 July 2018, this action was filed by AAI in its capacity as the equitable assignee of the loan, and as the only plaintiff in the action. ⁵⁴ AAI’s claim against the defendants is straightforward. While there was one round of amendments to the Statement of Claim on 8 February 2019 (the “Amended Statement of Claim”), the case remained substantially unchanged.

33 In essence, AAI avers that Asidokona is “in default of its payment obligations under the Loan Agreement”. Therefore, AAI claims against Asidokona for: ⁵⁵

34 Based on the Personal Guarantee and the Deed of Charge, AAI claims against Mr Soh for:

35 The defendants made four rounds of amendments to their original Defences, on 30 August 2018, 22 February 2019, 18 September 2020 and 22 July 2021 respectively.

36 From the outset, the defendants deny that the loan was between SSI and Asidokona. Instead, they aver that the loan was between Mr Wong and Mr Soh in their personal capacities only “for a short term” at an interest of only 3% per month. ⁵⁶ In that regard, payments made (totalling S$900,000) in repayment of the principal amount and/or interest were never made to SSI and one payment of S$50,000 was made to Mr Ong’s personal bank account. ⁵⁷ It was only at the signing on 22 July 2016 at the office of JLC Advisors that Mr Wong insisted for the interest to be increased to 5% per month. ⁵⁸

37 The defendants contend that AAI/SSI is in breach of s 3 of the Moneylenders Act 2008 (2020 Rev Ed) (the “MLA”), as AAI/SSI “seeks to claim a sum … which is significantly larger than the sum … ‘lent’”. Also, AAI/SSI is not an “excluded moneylender” under s 2 of the MLA as it lent the money to Mr Soh, and not Asidokona. Relying on ss 2, 3, 5 and 14, the defendants contend that the Loan Agreement and Personal Guarantee fall foul of the MLA and are unenforceable. ⁵⁹ This is the “Illegal Moneylending Defence”.

38 Further, the interest rates under the Loan Agreement are unconscionable, and the interest clauses are unenforceable penalty clauses at law. Consequently, the interest provisions of the Personal Guarantee and Deed of Charge are also unenforceable. ⁶⁰ I shall refer to this as the “Penalty Clause Defence”.

39 In any event, the defendants also plead that default interest should only take effect after March 2018 (and not from 22 June 2017). This is based on AAI’s position that “SSI was not agreeable to any further extension … beyond March 2018” of the loan. ⁶¹

40 In the first round of amendments, in support of the Illegal Moneylending Defence, the defendants introduced their version of what happened at the meeting on 22 July 2016 at the office of JLC Advisors.

41 In the second round of amendments, the defendants allege that the First Deed of Assignment, ie, the assignment of the Loan Agreement and the Personal Guarantee, is unenforceable as it falls foul of s 5A(2) of the CLA in that it savours maintenance and champerty. ⁶² This is the “Maintenance and Champerty Defence”.

42 On 26 November 2018, AAI applied under O 15 r 6 of the Rules of Court (2014 Rev Ed) (“ROC”) to join SSI as the second plaintiff to the action. This was to meet the defendants’ objection that as an equitable assignee, AAI may not proceed with the action without the presence of SSI. This application was granted on 7 February 2019, and SSI was joined as co-plaintiff to the action.

43 By about mid-2019, Mr Ong had run into trouble with the law. At the time of the trial, he was in remand for a range of criminal charges, inter alia, involving misappropriation of clients’ funds. ⁶³

44 On 27 September 2019, the defendants applied for specific discovery against the plaintiffs for communications between Mr Wong and the fellow contributors towards the loan, including Ms Lou. The plaintiffs were ordered to provide further discovery by 5 November 2019. As set out above at [5] above, on 1 November 2019, SSI was struck off the BVI Register of Companies. ⁶⁴ Upon the defendants’ application, on 17 March 2020, an unless order was made against the plaintiffs that the claim be struck out unless they comply with the specific discovery order by 7 April 2020.

45 One particular issue raised in the application was whether Mr Wong’s affidavits bound SSI. On 21 March 2020, Mr Wong sent a WhatsApp message to Ms Lou to explain the developments in the proceedings, including the question of his authority to act for SSI, and offered Ms Lou three options in respect of the action: ⁶⁵

46 By 31 March 2020, Ms Lou replied to Mr Wong, “Joo Wan, thank you for your note. I want to help you and I believe our lawyers are meeting to work out how I can help you”. ⁶⁶

47 Meanwhile, on 6 April 2020 (ie, just one day prior to the ordered deadline of 7 April 2020), AAI filed an appeal against the unless order. AAI submitted “it would have been impossible to comply with the 31 March 2020 Unless Order” given that SSI “had been struck off” by that point. ⁶⁷ On 18 June 2020, the appeal was allowed. Justice Choo Han Teck held in Alternative Advisors Investments Pte Ltd and another v Asidokona Mining Resources Pte Ltd and another [2020] SGHC 125 that Mr Wong’s affidavits “expressly state that they were made on behalf of both plaintiffs and confirm that both plaintiffs do not have in their possession, custody or power the documents which the defendants seek”. Thus, it was not necessary to order that Ms Lou confirm that she and/or SSI are bound by Mr Wong’s affidavits, or that they do not have the relevant documents in their possession, custody or power (at [9]). As against AAI, the unless order was set aside (at [10]). Therefore, AAI’s claim survived.

48 On 18 September 2020, in the third round of amendments, the defendants allege for the first time that Mr Wong “had no authority to sign the Loan Agreement, the Personal Guarantee, [and] the Deed of Charge” on behalf of SSI. ⁶⁸ Prior to that, the defendants previously admitted that Mr Wong was “SSI’s principal”. ⁶⁹ The defendants aver that SSI did not authorise the Loan Agreement and Deeds of Assignments. I shall refer to this as the “Lack of Authority Defence”.

49 Relatedly, the defendants aver that the Loan Agreement and Personal Guarantee are tainted with illegality as part of the moneys used to disburse the loan were illegally obtained. ⁷⁰ In that regard, Ms Lou, the sole director and shareholder of SSI at all material times, did not advance S$1m to JLC Advisors. As such, the money used to fund the loan were other client moneys from JLC Advisors’ client accounts which was misappropriated by Mr Ong. ⁷¹ I refer to this as the “Illegality Defence”.

50 Further, the defendants deny that the Deeds of Assignments are valid under s 4(8) of the CLA by reason of AAI’s and/or SSI’s failure to give written notice for the assignment to the defendants and are thus ineffectual. The defendants plead that AAI, as equitable assignee, cannot carry on the action when SSI is no longer a party to the action. ⁷² I shall refer to this as the “Locus Standi Defence”.

51 In early 2021, the parties applied for interrogatories against Ms Lou. In response to AAI’s interrogatories, Ms Lou stated that she had never appointed JLC Advisors to act for her or SSI. Ms Lou also stated that she was not the “HK investor” and was Singaporean. ⁷³ Ms Lou’s position was that SSI did not contribute to the loan to Asidokona ⁷⁴ and that she never maintained a pool of funds in JLC Advisors’ client account in her sole name or in joint names with her husband. ⁷⁵

52 Subsequently, on 22 July 2021, the defendants introduced the fourth round of amendments to the Defences, and expressly disputed that SSI appointed JLC Advisors to act as SSI’s solicitors and that SSI authorised any moneys for the loan. ⁷⁶ Up to the defendants’ third amendment to the Defences on 18 September 2020, the defendants averred that JLC Advisors “were the appointed solicitors of SSI at the material time” and the partner “assigned to SSI’s case was [Mr] Ong”. ⁷⁷ I shall include this as another aspect of the Lack of Authority Defence.

53 AAI disputes all of defences raised by the defendants.

54 On 23 July 2021, SSI was restored to the BVI Register of Companies. ⁷⁸ Shortly thereafter, SSI passed certain director’s resolutions (ie, signed by Ms Lou) on 26 July 2021 ratifying and adopting in entirety the Loan Documents, the Deeds of Assignments, AAI’s commencement of the action, and the execution of the Loan Documents and Deeds of Assignments by Mr Wong on SSI’s behalf (the “Ratification”). ⁷⁹ A deed of undertaking was entered into between AAI, SSI and Ms Lou (the “Deed of Undertaking”) to provide for the arrangements for the Ratification, the funding of the action and the conduct of the action. ⁸⁰

55 In response to the defendants’ contention that Mr Wong and Mr Ong lacked the authority to act for SSI, AAI relied on the Ratification. ⁸¹ SSI’s ratification is “sufficient, in and of itself, to dispose of the [d]efendants’ averments that SSI did not authorise the execution and assignment of the Loan Documents”. ⁸²

56 In this regard, the defendants aver that SSI’s Ratification is invalid. ⁸³ I shall refer to this as the “Invalid Ratification Defence”.

57 As AAI highlights, AAI has clearly established that Asidokona took a loan of S$2m sometime in July 2016, Mr Soh personally guaranteed Asidokona’s obligation to repay the loan, and the defendants have not repaid the loan and interest in full to the present date. ⁸⁴ The defendants have essentially not adduced any evidence to dispute the above.

58 To deny liability for the claim, the defendants raise seven grounds. AAI challenges each one of them. Therefore, the issues to be determined are as follows: ⁸⁵

59 I will deal with the applicable law in relation to the issues in due course. At this juncture, I set out the legal principles where the defendants submit that there is no case to answer.

60 In relation to any cause of action pleaded by the plaintiff, the legal burden of proof lies on the plaintiff, and will only be discharged if the court is satisfied that the plaintiff has proved its pleaded case against the defendant on a balance of probabilities.

61 It is, however, always open to a defendant, having heard the evidence adduced on behalf of the plaintiff, to elect to call no evidence on the basis that the evidence put forth by the plaintiff is insufficient to transfer the evidential burden onto the defendant so that the plaintiff has failed to prove its case. Hence the expression, “no case to answer” (O 35 r 4(3) and O 110 r 3(1) of the ROC). While the legal burden rests on the plaintiff throughout the proceedings as the party making the claim against the defendant, the evidential burden can shift as the civil trial progresses. That evidential burden rests on the party on whom the responsibility lies to contradict, weaken or explain away the evidence that has been led (Ma Hongjin v SCP Holdings Pte Ltd [2021] 1 SLR 304 (“Ma Hongjin”) at [28]).

62 Crucially, the establishment of a prima facie case by the plaintiff on a particular point on which it bears the legal burden denotes the point at which the evidential burden will shift to the defendant (Ma Hongjin at [30]). Following any shift in evidential burden at the point that a prima facie case against the defendant is established, the plaintiff would have succeeded in proving the case on a balance of probabilities since there is simply no evidence forthcoming from the defendant to disprove the plaintiff’s position or otherwise weaken the case against it (Ma Hongjin at [31]).

63 The threshold to succeed on a “no case to answer” submission is a high one. In Lena Leowardi v Yeap Cheen Soo [2015] 1 SLR 581 at [23]–[24], the Court of Appeal held that it is established law that a submission of “no case to answer” will only succeed if the evidence led by the plaintiff, at face value, does not establish a case in law or is so unsatisfactory or unreliable that the plaintiff has not discharged its burden of proof. If circumstantial evidence is relied on, it does not have to give rise to an irresistible inference as long as the desired inference is one of the possible inferences.

64 Bearing in mind the foregoing applicable principles, I turn to consider the issues.

65 I turn to address the Locus Standi Defence. Assuming that the Deeds of Assignments are valid, it is undisputed by the parties that the assignments of the Loan Agreement, Personal Guarantee and Deed of Charge pursuant to the Deeds of Assignments are not legal but equitable assignments. As the defendants argue, the statutory requirements for a legal assignment are found in s 4(8) of the CLA. In particular, express notice in writing to the obligor is necessary. ⁸⁶

66 Contrary to such requirement, AAI did not give written notice of the assignments to Asidokona and Mr Soh before the commencement of the action. As such, the defendants submit that the Deeds of Assignments are equitable assignments such that the equitable assignor (ie, SSI) must remain a party to the proceedings for AAI to proceed. ⁸⁷

67 The defendants argue that AAI had effectively realised “the fatality in its action”, and thus applied to add SSI as a co-plaintiff in November 2018. The order was made on 7 February 2019. Thus, the facts are similar to the case of Parkway Hospitals Singapore Pte Ltd (trading as Mount Elizabeth Hospital) and another v Sandar Aung [2007] 1 SLR(R) 227 (“Parkway”). As such, “SSI as the named lender and the alleged assignor, is required to be added as a party” and “failing which, [AAI’s] claim fails”. However, SSI “has been struck off” from the action pursuant to the unless order. ⁸⁸ In this connection, Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank International), Singapore Branch v Motorola Electronics Pte Ltd [2010] 3 SLR 48 (“Cooperatieve Centrale”) “makes it clear that the “procedural bar” is still in place in Singapore” [emphasis in original]. ⁸⁹

68 AAI does not dispute that it is an equitable assignee but disputes the requirement for SSI to remain a party in the unique circumstances of the present case. AAI submits that the requirement of joining an equitable assignor to an action for recovery of the debt is “only a procedural one”. ⁹⁰ In that regard, the rationale for the procedural rule is to prevent double recovery by the equitable assignor. Relying on Yongnam Development Pte Ltd v Springleaves Tower Ltd and anor [2004] 1 SLR(R) 348 (“Yongnam”) at [68], AAI contends that the court has the discretion to dispense with the procedural requirement that assignor be joined as party to a claim by an assignee. Since Ms Lou has confirmed on affidavit that SSI will not be commencing any further action against the defendants in relation to the Loan Agreement, the Personal Guarantee and the Deed of Charge in view of the assignments of the same to AAI, ⁹¹ “there is absolutely no risk of the [d]efendants facing a claim in double recovery”. As such, AAI can, and should, be allowed to claim against the defendants. ⁹²

69 Based on the parties’ arguments, the issue is whether the claim of an equitable assignee (ie, AAI) against the obligor(s) (ie, Asidokona and Mr Soh) fails because the equitable assignor (ie, SSI) is no longer a party to the action.

70 The starting point is Parkway, where Judith Prakash J (as she then was) held that the argument that “the assignee cannot sue in his own name and the assignor must be made a co-plaintiff” is a valid one (at [12]–[13]). Nonetheless, Prakash J granted an application to add the assignor as the second plaintiff “as “the problem was a technical one which could have easily been averted had notice of the assignment been given to the [obligor] before the commencement of the action or had [the equitable assignor] been made a co-plaintiff at the beginning” [emphasis added in italics] (at [13]).

71 In Total English Learning Global Pte Ltd and another v Kids Counsel Pte Ltd and another suit [2014] SGHC 258 (“Total English”), Tay Yong Kwang J (as he then was) observed, obiter, that “an equitable assignment would generally require the assignee to join the assignor to the action” [emphasis added] (at [51]). Then, in Cooperatieve Centrale, Lai Siu Chiu J (as she then was) made similar remarks. In particular, Lai J held that one rationale for the requirement of recovering a debt in the name of the equitable assignor is “to protect the debtor from being exposed to double action for the same debt” (at [49]) and that the statutory assignment was created under s 4(8) of the CLA to “counter this procedural bar of having to add the assignor as a party to the action to recover the debt” (at [50]).

72 One consistent point made by the cases is that the requirement of joining an equitable assignor as a co-plaintiff is a procedural requirement. Indeed, this is common ground between AAI and the defendants. The reason is to protect the obligor from the risk of double recovery (ie, by the equitable assignor and equitable assignee alike) arising from essentially the same obligation. In that sense, the rationale for such procedural requirement is both practical and protective of the interests of all the parties involved.

73 Given that this is a procedural requirement, it seems to me that the court may dispense with it altogether in the appropriate circumstances. Indeed, in Halsbury’s Laws of Singapore vol 7 (LexisNexis, 2019) at para 80.446, it is stated that:

74 Similarly, Snell’s Equity (Sweet & Maxwell, 32nd Ed) at 3–023 states:

75 In Yongnam, the court likewise accepted that “the court has a discretion to dispense with the requirement that both assignor and assignee be joined as parties” at [68], referring to the same excerpt from Snell’s Equity reproduced above. However, as the defendants highlighted, the court in that case declined to exercise its discretion in the circumstances of that case. In my judgment, even if SSI is no longer a party to the action, the totality of the circumstances would, unlike the case in Yongnam, justify the exercise of discretion in favour of AAI for the following reasons.

76 First, AAI had in fact added SSI as co-plaintiff to the action. Second, while SSI has not chosen to participate in these proceedings after it was restored to the BVI Register of Companies, SSI has “adopted and ratified” the Loan Agreement, Personal Guarantee, Deed of Charge, Deeds of Assignments, and the commencement of the action by AAI. ⁹³ Third, Ms Lou has confirmed on affidavit that “SSI will not be commencing any further action against Asidokona or [Mr Soh] in relation to the Loan Agreement, the Personal Guarantee and the Deed of Charge, given the assignment to AAI”. ⁹⁴ Thus, I accept that the action is determinative of the subject matter of this action such that SSI cannot bring a fresh suit in respect of the same. There is no risk of double recovery in the circumstances. Fourth, the defendants’ defences (or lack thereof in respect of failing to repay AAI or SSI, as mentioned at [57]) would not change (whether or not SSI is a party to the action).

77 Indeed, I find the remarks of the House of Lords in Performing Right Society Ltd v London Theatre of Varieties Ltd [1924] AC 1 particularly helpful and applicable. Lord Sumner remarked (at p 31):

Likewise in the present case, the defendants in effect seek the absence of SSI and thereby deny liability for the repayment of the loan. In such circumstances, the defendants should not be allowed to succeed on the Locus Standi Defence and thereby escape any liability entirely.

78 Before I leave this issue, I should add that in the first place, I have some reservations about the parties’ position that SSI is no longer a party to the action. Pursuant to AAI’s application made under O 15 r 6 of the ROC, SSI was joined as a party on 7 February 2019 (see [42] above). There has not been any specific order for SSI to cease being a party. If SSI has “for any reason ceased to be a proper or necessary party” to the action, such an order can be sought and made under O 15 r 6 of the ROC. Certainly, no such order has been made and counsel for the parties confirmed that no such order had been sought. In my view, the effect of the striking out of the action is not that SSI is removed as a party. SSI is simply unable to proceed with the action. However, from the time of the joinder, SSI did not seek any relief under the Statement of Claim. Its presence was, and is, for the purpose of satisfying the technical requirement so that SSI’s action may be sustained. Notwithstanding the subsequent developments, it seems to me that the procedural requirement has been met.

79 Be that as it may, I have dealt with the arguments as raised by the parties. By all of the above, I find that AAI is able to sustain the claim against the defendants.

80 The Lack of Authority and Invalid Ratification Defences are related, and I propose to deal with the Invalid Ratification Defence first. Specifically, even if the defendants could prove on the evidence that Mr Wong and Mr Ong lacked the requisite authority at all material times, the argument would be moot if the Ratification is valid. Indeed, it bears reminding that it was subsequent to Ms Lou’s unexpected stance on the loan that the defendants mounted challenges regarding the authority of Mr Wong and Mr Ong to act for SSI. These were contained in the third and fourth rounds of amendments to their Defences. In response, SSI ratified the various matters. Thereafter, the defendants plead in the Rejoinders that the Ratification is not valid.

81 The defendants allege that any ratification (of the Loan Agreement, Personal Guarantee, Deed of Charge, and Deeds of Assignments) is invalid as: (a) SSI did not have full knowledge of the material facts pertaining to the unauthorised actions of Mr Wong at the time of the Ratification; (b) the Ratification did not take place within reasonable time and thus would unfairly prejudice the defendants; and (c) AAI should not be allowed to rely on the Ratification as it has acted in abuse of process. ⁹⁵ The defendants submit that the Ratification is an abuse of process because “despite knowing from the very outset of the identity of SSI’s sole director and shareholder and his lack of authority to act on behalf of SSI, [Mr Wong] deliberately concealed the above material facts from the Court” throughout the pre-trial hearings. As early as AAI’s first amendment on 8 February 2019, when SSI was added as the second plaintiff, AAI pleaded that the “authorised Attorney for SSI is [Mr Wong]”. ⁹⁶ Furthermore, Mr Wong filed “eight (8) affidavits … on SSI’s behalf wherein he expressly claimed he had authority to file the respective affidavits on SSI’s behalf” despite him knowing “from at least March 2018 that, SSI had not authori[s]ed him as SSI’s agent”. ⁹⁷

82 AAI submits that the defendants’ allegation that the Ratification is invalid or is otherwise an abuse of process is simply without basis. In particular, AAI submits that: (a) the Ratification was made within a reasonable time; ⁹⁸ (b) the Ratification was made in full in respect of all of the Loan Documents as well as the legal proceedings; ⁹⁹ and (c) the Ratification is not an abuse of process. ¹⁰⁰

83 As mentioned at [81], the defendants merely challenge the validity of the Ratification but did not dispute the effect of a valid ratification. In that regard, ratification “is akin to an assent by the principal to the transaction entered into by the unauthorised agent by adopting the agent’s otherwise unauthorised acts” (Cavenagh Investment Pte Ltd v Kaushik Rajiv [2013] 2 SLR 543 at [31]). This is to say that if the Ratification is valid, SSI will be accordingly bound by the acts of Mr Wong and Mr Ong. In that regard, and as mentioned at [80], any lack of authority on the part of Mr Wong and Mr Ong to act on behalf of SSI as alleged by the defendant would be of no legal significance if their acts were so ratified by SSI. Significantly, the defendants’ Lack of Authority Defence would also fall away. The parties’ disagreements on this issue turn on the facts, to which I now turn.

84 First, I am not convinced that SSI did not have full knowledge of the material facts pertaining to the unauthorised actions of Mr Wong at the time of the Ratification (ie, on 26 July 2021) as the defendants submit. ¹⁰¹ Such submission is plainly contradicted by the defendants’ own pleadings that from “around March 2020”, Ms Lou “knew of” the action and the Loan Agreement that was commenced and entered into “on behalf of SSI without SSI’s authority”. ¹⁰² If that is so, it cannot be seriously disputed that by March 2020 (ie, when there was the WhatsApp exchange between Mr Wong and Ms Lou as set out at [45]–[46] above), Ms Lou had full knowledge of the material facts on which Mr Wong and Mr Soh had acted. That same WhatsApp message by Mr Wong also confirmed that lawyers were on board to determine how Ms Lou could help Mr Wong in the action. The defendants’ submission is thus a mere afterthought that is, in any case, contrary to their own pleadings.

85 The second allegation (ie, that the Ratification was not made within a reasonable period of time) is also linked to the first allegation. The defendants plead that, despite Ms Lou’s knowledge of the action from as early as March 2020 and that SSI’s action had been struck off in March 2021, it was only on 26 July 2021 that the Ratification was made. At first blush, there appears to be a considerable lapse in time. However, all of the circumstances must be borne in mind in determining the question. It is undisputed that SSI was struck off the BVI Register of Companies on 1 November 2019 (as mentioned at [5]) and was restored to the same only on 23 July 2021. Thus, the Resolution was passed a mere three days after it was restored to the BVI Register of Companies. Seen in that light, the Ratification can hardly be said not to have been made within a reasonable time.

86 Thirdly, I disagree that the Ratification is an abuse of process. As mentioned at [81], the defendant’s complaint is essentially that Mr Wong had represented himself to be SSI’s authorised agent despite knowing that he was not (thus misleading the court). In my judgment, such a factual submission is not supported by the evidence. As described at [45] above, having set out the background of matters to Ms Lou, Mr Wong explained in his WhatsApp message of 21 March 2020 to Ms Lou that he only found out that Ms Lou was the sole owner and director of SSI during the assignment (ie, March 2018). Mr Wong has consistently maintained that position (see [27]). In that regard, Mr Wong candidly admitted in his WhatsApp message that he had “trusted [Mr Ong] too much and relied on his representations”. In relation to the authority to act for SSI, Mr Wong testified: ¹⁰³

87 The defendants have not produced any evidence that Mr Wong knew that he was not authorised by SSI at all material times. In this connection, I also accept AAI’s submission that in fact, the parties had, at all material times leading up to the time of the assignment, understood that both Mr Wong and Mr Ong were authorised to act on SSI’s behalf. ¹⁰⁴ As such, I do not find that the Ratification is an abuse of process.

88 For the foregoing reasons, I find that the Ratification is valid. For completeness, I should address the defendants’ pleading that the Ratification “has not been made in full”. ¹⁰⁵ The director’s resolutions passed by SSI plainly ratified and approved the Loan Agreement, Personal Guarantee, Deed of Charge, Deeds of Assignments, AAI’s commencement of the action and the joinder of SSI to the action. ¹⁰⁶ For present purposes, the Ratification suffices. Having ruled the Invalid Ratification Defence in favour of AAI, it is not necessary for me to deal with the Lack of Authority Defence.

89 Turning to the Illegality Defence, it is not seriously disputed that a partial sum of S$1m used to finance the loan to Asidokona was contributed by Mr Wong (albeit with initial assistance from other persons including Mr Yong). ¹⁰⁷ It is also not disputed that the loan amount was then disbursed out of funds from JLC Advisors’ client account. ¹⁰⁸ The thorny issue is in respect of the remaining S$1m used to finance the loan. In this regard, the defendants contend that the money was not from SSI/Ms Lou (ie, the “Hong Kong” investor) but instead comprised money misappropriated from other clients of JLC Advisors, thus tainting AAI’s claim with illegality. ¹⁰⁹ The defendants submit that Ms Lou could not have been the “Hong Kong” investor as she had denied maintaining any pool of funds in JLC Advisors’ client account or contributing S$1m to the same. ¹¹⁰

90 In response, AAI submits that AAI has “adduced evidence to establish that the said partial sum of S$1m did belong to [Ms Lou]” which disproves the defendants’ “bare allegation” that the money was misappropriated from other clients. ¹¹¹ To begin with, Mr Ong deposed that at the material time, Mr William Wong and Ms Lou were his “regular clients” who “regularly appointed JLC Advisors to act for them and/or their many offshore corporate entities in various commercial deals” such as SSI. Arising from such course of dealing, there was an existing client account of which Mr Wong and Ms Lou were the beneficial owners. ¹¹²

91 Pertinently, Mr Ong’s testimony is corroborated by the objective documentary evidence. As early as 14 April 2016 (ie, before the loan was disbursed), JLC Advisors’ finance manager, Ms Michelle Chan, informed him by email that SSI had made a transfer of S$1m into the JLC Advisors’ client account. ¹¹³ Even after the loan money was disbursed, SSI maintained and actively funded its client account with JLC Advisors. Other substantial funds were also credited into the JLC Advisors’ client account from SSI accounts: HKD1.5m on 8 December 2016 and S$30,000 on 19 July 2017. ¹¹⁴

92 More crucially, Mr Ong unequivocally confirmed that the remaining sum of S$1m extended to Asidokona was deducted from the pool of funds which Mr William Wong and Ms Lou maintained in JLC Advisors’ client account. ¹¹⁵ As mentioned at [30], Mr Ong also confirmed that Mr William Wong was “the primary person who is in charge of the group of funds”. According to Mr Wong, Mr William Wong also represented to him that money from SSI was used to fund the loan. Mr Wong’s evidence was as follows: ¹¹⁶

93 In that regard, even Ms Lou herself admitted that she would unquestionably follow her husband’s instructions when transferring moneys to the JLC Advisors’ client account: ¹¹⁷

94 Mr Ong likewise testified that Ms Lou agreed with her husband’s decision to fund part of the loan: ¹¹⁸

95 As AAI highlights, the evidence of Mr Wong, Mr Ong and the objective evidence showed that the sum of S$1m belonged to SSI, and was forwarded by Ms Lou to JLC Advisors, and that the sum was contributed by SSI towards the loan. Against such prima facie evidence of a loan extended partially using funds of SSI, the “only evidence” relied on by the defendants to support their assertions that not only did SSI not contribute the money, but also that the money was misappropriated from other clients, is merely Ms Lou’s equivocal evidence that neither she nor SSI had contributed any money to the loan. ¹¹⁹

96 In this connection, I should mention that by 20 October 2020, Mr William Wong (then Chairman, CW Group Holdings Limited) was named as a co-conspirator of Mr Ong in charges of conspiracy to cheat CW Group Holdings Limited. ¹²⁰ Against this backdrop, I assess that Ms Lou had sought to distance herself from any dealings with Mr Ong. This explains her somewhat inconsistent, evasive and unhelpful evidence in court.

97 Seen in that light, I am not satisfied that Ms Lou’s testimony in and of itself is sufficient to undermine AAI’s claim that SSI contributed the sum of S$1m towards the loan (much less support the defendants’ positive assertion that the said sum was misappropriated from other clients). Ms Lou’s answers to interrogatories were that “SSI did not place a sum of S$1,700,000 in M/s JLC Advisors LLP’s client account at the material time” and that “SSI never owned or beneficially owned a pool of funds in JLC Advisors’ client account” (see [51] above). ¹²¹ Ms Lou also testified at the trial that she did not know about the loan until about March 2020 and that she did not use S$1m from the pooled funds to finance the loan. ¹²² The defendants rely on the foregoing evidence, among other similar statements made by Ms Lou, in support of their contention.

98 However, other parts of Ms Lou’s testimony contradict the above. In particular, Ms Lou expressly acknowledged the remittance of S$1m by SSI. Her explanation was that “[she] made the transaction. [Her] husband asked [her] to make the transfer”. ¹²³ In that regard, Ms Lou had simply trusted her husband, Mr William Wong, and did not ask him what the S$1m was to be used for. ¹²⁴ Ms Lou also confirmed that, in SSI’s accounts, she simply recorded the remittance as “transfer to JLC”. ¹²⁵ As such, the defendants’ position is plainly not substantiated by the totality of Ms Lou’s evidence.

99 Further, Ms Lou confirmed that the S$1m never came back to SSI. ¹²⁶ In my judgment, this is a crucial fact which suggests that the S$1m was transferred out of the JLC Advisors’ client account. Based on the totality of Ms Lou’s evidence before me, a reasonable inference to be drawn is that the S$1m was used to finance part of the loan to Asidokona pursuant to the Loan Agreement. Furthermore, such inference is supported by other corroborative evidence such as Mr Wong’s WhatsApp message to Ms Lou on 21 March 2020 wherein Mr Wong stated that Mr William Wong confirmed that “SSI [had] the funds to do the loan (in July 2016)” (see [45] above).

100 Thus, taking the defendants’ case at its very highest, even if Ms Lou had transferred S$1m from SSI’s account to JLC Advisors’ client account at the instruction of Mr William Wong without knowing the purpose of such transfer, I am satisfied that the money was prima facie used to finance the loan to Asidokona. However, I also note that, if it is true that Ms Lou was completely oblivious as to the purpose of the remittance (which itself is doubtful based on her testimony), one might argue that this would result in the question of whether SSI’s funds in the JLC Advisors’ client account were otherwise misused. Nevertheless, I am satisfied that no such issue arises on the facts in light of the Ratification whereby SSI ratified the Loan Agreement entered into between SSI and Asidokona. Based on the foregoing, I reject the Illegality Defence.

101 Parties do not dispute the applicable test for whether an assignment savours maintenance and champerty. In Lim Lie Hoa and another v Ong Jane Rebecca [1997] 1 SLR(R) 775 (“Lim Lie Hoa”), the Court of Appeal (at [36]) followed the principles as redefined and stated in the classic case of Trendtex Trading Corporation and another v Credit Suisse [1982] AC 679 (“Trendtex”). In particular, the Court of Appeal cited with approval the following passage by Lord Roskill in Trendtex at 702–703 as follows:

102 The parties rely on both cases. ¹²⁷ In particular, the parties dispute whether the assignments in the present case are of property rights or bare causes of action, or whether AAI has any genuine commercial interest in the assignments. ¹²⁸

103 AAI submits that the Deeds of the Assignments (and in particular, cl 2.1 read with Recital (C) and Recital (D) for the First Deed of Assignment and Second Deed of Assignment respectively) expressly provide that the assignments are for all of AAI’s rights, title and interest in the Loan Agreement, Personal Guarantee and Deed of Charge. As such, SSI’s property rights (for the debt due and owing from the defendants, as well as the Charged Shares) were assigned, and not bare causes of action to sue the defendants. ¹²⁹ Also, AAI submits that it is not a disinterested party, but has a genuine commercial interest in the assignments. The controlling shareholder and director of AAI (ie, Mr Wong) contributed towards half of the loan, and there is evidence by way of two cheques to show that AAI had already given SSI a sum of S$500,000 for the assignment of the loan. ¹³⁰

104 The defendants contend that AAI seeks to profit from the present action and ought to be prohibited from doing so. In that regard, AAI agreed to, inter alia, pass on half of the monies which it recovers from the action, having deducted all of its own costs and expenses, to SSI. This is pursuant to cll 3.4 to 3.5 of the Deed of Undertaking. ¹³¹ The defendants also allege those same clauses incentivised SSI and Ms Lou into executing the Ratification. ¹³² Such circumstances must be taken into account in assessing the assignments.

105 In my judgment, the Maintenance and Champerty Defence is unmeritorious.

106 It is plain from the Deeds of Assignments that the assignments are not over bare causes of action. The fact that the Deeds of Assignments also incidentally conferred causes of action does not mean that the assignments savour maintenance and champerty. In particular, Recital (C) of the First Deed of Assignment read with cl 2.1 clearly provides that: ¹³³

107 Recital (D) of the Second Deed of Assignment read with cl 2.1 likewise clearly provides that: ¹³⁴

108 As stated in Lim Lie Hoa and Trendtex, where the assignee has by the assignment acquired a property right and the cause of action is incidental to that right, the assignment is effective. Based on the Deeds of Assignments, it is patently clear that SSI assigned to AAI its property rights (ie, the debt due and owing from the defendants and the Charged Shares), and not bare causes of action. In this regard, the defendants do not argue (nor do I think it would be tenable to argue) that debts and shares do not constitute property. Thus, the assignments are effective.

109 I deal briefly with the contentions in relation to the Deed of Undertaking. An arrangement where the assignor and assignee “share the recovered sums … if the suit succeeds” does not ipso facto savour maintenance and champerty. In this regard, the court must be careful to look at “the totality of the transaction” (Trendtex at 703). By the Deed of Undertaking, AAI, SSI and Ms Lou agreed that upon a successful recovery of the sum by AAI from Asidokona and/or Mr Soh in the action, the sum shall first be used to reimburse AAI for all of its costs and expenses. The remaining balance shall be shared equally by AAI and SSI (ie, in a 50:50 split). As pointed out by AAI, there is “nothing sinister in AAI’s transfer of half of the monies recovered in the [action] to SSI”. Such an arrangement is “consistent with AAI’s case all along” that the monies loaned to Asidokona were contributed by Mr Wong and Ms Lou equally. ¹³⁵ In fact, Ms Lou agreed that the arrangement under the Deed of Undertaking was the same one from the very beginning of the loan to Asidokona. ¹³⁶ In my view, the arrangement, which is in line with the respective parties’ interests at all material times, only buttresses AAI’s case rather than defeats it.

110 Having ruled in favour of AAI as stated above, I do not see it necessary to deal further with the question of whether AAI has any genuine commercial interest in the assignments. Thus, I move on to the Illegal Moneylending Defence.

111 I begin by setting out the applicable legal principles. Section 5(1) of the MLA prohibits a person from carrying on the business of moneylending in Singapore as follows:

112 In Sheagar s/o T M Veloo v Belfield International (Hong Kong) Ltd [2014] 3 SLR 524 (“Sheagar”) at [30], the Court of Appeal remarked that to put this in positive terms, the “business of moneylending” may be carried out by those who are licensed to do so, or by excluded or exempt moneylenders.

113 The consequences of unlicensed moneylending are set out in s 19(3) of the MLA as follows:

114 In Sheagar, the Court of Appeal summarised the framework in relation to s 14(2) of the Moneylenders Act 2008 (Act 31 of 2008) (which is in pari materia with s 19(3) of the MLA) as follows (at [75]):

(a) To rely on s 19(3) of the MLA, the borrower must prove that the lender was an “unlicensed moneylender”.

(b) If the borrower can establish that the lender has lent money in consideration for a higher sum being repaid, he may rely on the presumption contained in s 3 of the MLA to discharge this burden. For completeness, s 3 provides that “[a]ny person, other than an excluded moneylender, who lends a sum of money in consideration of a larger sum being repaid is presumed, until the contrary is proved, to be a moneylender.”

(c) The burden then shifts to the lender to prove that he either does not carry on the business of moneylending or possesses a moneylending licence or is an “exempted moneylender”.

(d) However, if there is an issue as to whether the lender is an excluded moneylender, the legal burden of proving that he is not will fall on the borrower. In this regard, by s 2 of the MLA, an “excluded moneylender” includes “any person” who “lends money solely” to “corporations” (under s 2(e)(iii)(A) of the MLA).

115 I should add that in E C Investment Holding Pte Ltd v Ridout Residence Pte Ltd and another (Orion Oil Ltd and another, interveners) [2011] 2 SLR 232 (“E C Investment”) at [135], two tests were put forth to determine if a person is carrying on the business of moneylending. The first is “whether there was a certain degree of system and continuity in the transactions” (the “Continuity Test”) and, if the answer is no, then the second is whether the alleged moneylender is one who is ready and willing to lend to all and sundry provided that they are from his point of view eligible” (the “All and Sundry Test”).

116 As set out at [37] above, the Illegal Moneylending Defence relied on particulars which essentially alleged that the loan was de facto made to Mr Soh personally. ¹³⁷ Therefore, SSI was not an “excluded moneylender”. At the trial, counsel for the defendants confirmed that they were no longer pursuing the defence that the loan was made to Mr Soh in his personal capacity. Nonetheless, the defendants maintain their position that the presumption under s 3 of the MLA that SSI is a moneylender applies in the present case as the “amount to be allegedly repaid” by the defendants “far exceeds the alleged loan amount”. ¹³⁸

117 Having already relied on s 3 of the MLA to presume SSI to be a moneylender, in a slightly confusing manner, the defendants argue that both the Continuity Test and the All and Sundry Test are satisfied, and the loan amounts to “illegal money lending”. ¹³⁹ The defendants submit that the Continuity Test is satisfied because, during the course of the present proceedings, “it has become evident that SSI has been used as a front in respect of a ‘series of transactions’ mirroring an ‘organised scheme of moneylending’” which has been revealed by AAI’s “own evidence”. For example, SSI was also involved in an “alleged loan between SSI and JC Global Concepts Pte Ltd … (“JC Global”)” ¹⁴⁰ and Mr Ong also deposed that SSI was allegedly involved in “various commercial deals”. ¹⁴¹ Also, the defendants submit that the All and Sundry Test is satisfied. In that regard, the defendants submit that SSI lent moneys to ““all and sundry”, even to parties such as the [d]efendants and/or JC Global, that [Ms Lou] … had no knowledge of”. ¹⁴²

118 In response, AAI argues that the defendants have essentially “abandoned their entire pleaded position in relation to the [l]oan being a sham corporate loan” and as such, there is “no longer any basis” for the defendants to pursue the Illegal Moneylending Defence. ¹⁴³ In arguing that the Continuity Test and the All and Sundry Test are satisfied, the defendants seek to “advance a case on an issue that is not pleaded” and furthermore, the “factual allegations” underpinning such submission are not pleaded. ¹⁴⁴ In any event, the present loan cannot be rendered void under s 19(3) read with ss 2 and 5(1) of the MLA. ¹⁴⁵ AAI submits that SSI has not been shown, on the evidence, to have been in the business of moneylending ¹⁴⁶ or that SSI is otherwise not an excluded moneylender under s 2(e)(iii)(A) of the MLA. ¹⁴⁷ In that regard, the loan was made to Asidokona and is thus a loan to a corporation which falls squarely within the definition of an “excluded moneylender”.

119 I turn to apply the framework which the Court of Appeal set out in Sheagar. To prove that SSI is a moneylender, the defendants rely on s 3 of the MLA since the amount to be repaid by the defendants “far exceeds” the loan amount. ¹⁴⁸ Thereafter, the pertinent issue is whether SSI is an “excluded moneylender” under the MLA. If so, then it does not matter whether SSI could be said to be a moneylender carrying out a business of moneylending in Singapore. Consequently, s 19(3) of the MLA would likewise not apply so as to render the contract, the guarantee, and the security for the loan unenforceable.

120 On the evidence before me, SSI’s loan in the present case is extended only to a corporation (ie, Asidokona, which is a company registered in Singapore). As such, the evidence points to SSI falling squarely within the definition of an “excluded moneylender”. To reiterate, the defendants have abandoned their initial allegation that the loan is made to Mr Soh personally and not to Asidokona.

121 As stated in Sheagar, the legal burden of proving that SSI is not an excluded moneylender falls on the defendants. In my judgment, the defendants fall far short of doing so. In fact, the defendants do not address the question of whether SSI falls within the definition of an excluded moneylender under s 2(e)(iii)(A) of the MLA at all. Instead, the defendants submit that there were “suspicious and dubious circumstances” surrounding the loan which “points towards an illegal moneylending transaction” such as: (a) Ms Lou denying that SSI entered into the loan transaction or disbursed any moneys; (b) Mr Ong using “SSI as a front to funnel illegal [moneys] from JLC Advisors’ account”; (c) that the modus operandi adopted by Mr Ong was “similarly also adopted in at least one other case which has been disclosed in the course of the proceedings”; and (d) the interest rates imposed are “exorbitant”. ¹⁴⁹

122 In my judgment, none of these factors were relevant in determining the crucial issue of whether SSI is an “excluded moneylender” under the MLA. I elaborate. As regards Ms Lou’s initial denial, I have already dealt with the same factual contention in respect of the Illegality Defence and the Ratification Issue above and need not say more. The defendants’ related allegation that Mr Ong used SSI as a front to funnel moneys from the JLC Advisors’ account thus also falls away.

123 Further, Mr Ong’s evidence does not support the contention that there was a modus operandi whereby SSI was used as a front for an organised scheme of moneylending. Taken in context, Mr Ong simply mentioned that Mr William Wong and Ms Lou “regularly appointed JLC Advisors to act for them and/or their many offshore corporate entities in various commercial deals”. ¹⁵⁰ In any event, the “one other case” uncovered in the proceedings which is an alleged loan between SSI and JC Global. Again, this alleged loan was to a corporation, and did not take SSI outside the ambit of “excluded moneylender”.

124 Finally, the interest rate does not aid the defendants’ case any further. While there might be some link between the contractual interest rate in establishing whether SSI is a moneylender, it is altogether unhelpful in dealing with the issue of whether SSI is an excluded moneylender.

125 Thus, I reiterate that the defendants fail to discharge their burden of proof and I accept that SSI is an “excluded moneylender” under the MLA. This is sufficient to dispose of the defendants’ Illegal Moneylending Defence. Nevertheless, I note that Quentin Loh J (as he then was) made a short remark in E C Investment, leaving open the question of whether the excluded moneylender exception would always apply if the borrower is a corporation (at [139(b)]). In this regard, Loh J commented:

126 In my view, Loh J was careful to express that E C Investment should not be interpreted to stand for the proposition that the “excluded moneylender” exception would necessarily always apply so long as a borrower is a corporation no matter what the circumstances or the nature of the shareholding. The opposite, however, must also be true in that E C Investment does not set out any further requirements in addition to that set out under the MLA which must be satisfied before a person may be considered to be an “excluded moneylender” under the MLA. Indeed, Loh J’s holding was precisely that the loan in that case was made to a corporation such that the plaintiff was an “excluded moneylender”. In that regard, reading Loh J’s remarks in context, E C Investment should be understood as an expression of caution – the court should consider the substance of the loan in question (for example, by considering “the circumstances or nature of shareholding”) to consider who the actual borrower of the particular loan in question is.

127 In any case, the issue does not arise here since the defendants have abandoned their allegation that the loan was de facto made to Mr Soh and not Asidokona. Having concluded that SSI is an “excluded moneylender”, I reject the Illegal Moneylending Defence. With that, I turn to the defendants’ final defence, the Penalty Clause Defence.

128 It is undisputed that under the Loan Agreement, the contractual interest rate is 5% a month while the contractual default interest rate is 6% a month. ¹⁵¹ This amounts to S$100,000 and S$120,000 a month respectively based on the outstanding principal amount of S$2m.

129 AAI submits that it is for the defendants to show that the contractual default interest rate amounts to a penalty clause. As the defendants cannot prove that the default interest is extravagant and unconscionable in comparison with the greatest loss that could conceivably be proved to have followed from the breach, the defendants cannot prove that it amounts to a penalty clause and thus unenforceable. AAI also distinguishes the present case from that of E C Investment as the security provided in the two cases are very different. ¹⁵²

130 The defendants submit that both interest rates are clearly extortionate, especially in the light of the fact that there is no evidence that it is a genuine pre-estimate of AAI’s losses. In that regard, the defendants submit that it is for AAI to prove that the interest claimed is a reasonable estimate of their loss. The defendants also rely on E C Investment, where Loh J found that a monthly interest rate of 6% “can be considered extortionate or usurious” (at [138]). Thus, the respective interest rates are penal in nature and ought to be rendered enforceable. ¹⁵³

131 I set out the legal principles applicable to the issue as follows:

132 To elaborate, the Court of Appeal held in Denka that the rule against penalties “applies only where there has first been a breach of contract” [emphasis in original] (at [99]). As explained by the Court of Appeal, “the utilisation of breach of contract as a prerequisite is not a mere arbitrary drawing of a legal line but is related to the objective of the Penalty Rule in regulating secondary (and not primary) obligations” [emphasis in original] (at [100]). Such prerequisite ensures that the Penalty Rule is “confined to the sphere of secondary obligations only – specifically, the obligation on the part of the defendant to pay damages to the plaintiff”, such that the “primary obligations between contracting parties are not interfered with at all” [emphasis in original] (at [92]).

133 As the Penalty Rule applies only to secondary obligations, I accept AAI’s argument that it “cannot even be engaged” on the contractual interest rate of 5% per month since that “concerns a primary obligation to repay the [l]oan, and is not one which comes into effect only upon a breach of the Loan Agreement” [emphasis in original]. ¹⁵⁴ I note that this specific point is not addressed by the defendants. In particular, the defendants persist in their submissions that both the contractual interest and default interest clauses are unenforceable as they are penalty clauses without more. ¹⁵⁵ The defendants’ position is not legally tenable.

134 Next, the defendants have no evidence to show that such rates are “extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach”. In that regard, the defendants merely assert that the interest rate of 6% per month is “clearly” extortionate (relying on E C Investment) and contend that it is for AAI to show that the clauses are reasonable estimates of its losses. ¹⁵⁶

135 Again, the defendants’ position is not legally tenable since the burden of proof falls on the defendants (see [131(b)]). I note that Mr Soh is an experienced banker and businessman. From the communications produced before me, when he entered into the Loan Agreement, Mr Soh was well aware of the applicable interest rates. Once again, I reiterate that Mr Soh has dropped his allegations that the bargaining process was imbalanced, he was pressured into accepting the high interest rates, and that the interest rate was meant to be 3% per month. Certainly, it is not for the court to question the commercial decision made by parties. It could be that, depending on the totality of the circumstances (such as the principal sum concerned, the urgency of the loan, and the type and nature of security for the loan, if any), such a default interest clause with such a default interest rate may amount to a penalty clause. Indeed, I note that in E C Investment, the loan of S$1.5m for 60 days was secured by real property worth S$29m, and it was in view of such circumstances that Loh J found the interest on the loan at 6% per month “can be considered extortionate or usurious” (at [138]). Here, the short-term loan was secured only by Mr Soh’s personal guarantee, and Mr Soh’s shares in Asidokona which is a private company incorporated a year prior to the loan. The defendants have simply failed to adduce evidence to show that the interest rate of 6% per month (which is 1% above the applicable interest rate of 5% per month) is extravagant and unconscionable.

136 Having found that the default interest clause is valid and enforceable, a further issue arises as to when default interest should start running.

137 According to Mr Wong, as at 5 March 2020, the balance sum due under the Loan Agreement (deducting the payments already made of S$900,000) as set out at [23] above is calculated to be as follows: ¹⁵⁷

138 Mr Wong explained that the loan was extended until 21 January 2017 only (see [21] above). Even though Asidokona is liable for default interest from 22 January 2017 onwards, on a goodwill basis, AAI calculated default interest from 22 June 2017 onwards at 6% per month of S$2m being S$120,000 per month. ¹⁵⁸

139 Indeed, in the Amended Statement of Claim, the table after paragraph 22 shows a tabulation of default interest from 22 June 2017 to 20 July 2018 (being the date of the Statement of Claim). However, I note that at paragraphs 11, 14 and 15 of the Amended Statement of Claim, AAI states that the parties agreed to three extensions of the Loan Agreement until 21 January 2017, 31 August 2017 and 30 September 2017 respectively. For each of these extensions, AAI pleads that the loan may be extended thereafter on a month-to-month basis at the discretion of AAI. At paragraph 19 of the Amended Statement of Claim, AAI pleads that “[a]s a result of the repeated delays and failure on the part of the [d]efendants to repay the Loan, SSI was not agreeable to any further extension of the Loan beyond March 2018”.

140 In response, the defendants plead that in any event, the default interest should only take effect after March 2018. This is based on AAI’s position that “SSI was not agreeable to any further extension… beyond March 2018.” ¹⁵⁹ However, at the trial, the defendants appeared to have conceded the point. The defendants accepted the calculations set out at [138] above, and made no mention of this in the closing submissions. ¹⁶⁰ Upon the issue being raised with the parties, the defendants retracted the concession, and maintains that the calculation of default interest should, in any event, commence on 1 April 2018. ¹⁶¹

141 In my view, AAI cannot claim what has not been clearly and consistently pleaded. Despite the table after paragraph 22 of the Amended Statement of Claim setting out the calculation of default interest from 22 June 2017, the other paragraphs state AAI’s position to be that the Loan Agreement was extended to the end of March 2018 (apparently on the same basis as the very first extension to 21 January 2017 – which AAI does not dispute is based on the interest rate of 5% per month). Indeed, AAI does not plead that the second and third extensions were on terms different from the first extension. Further, from Mr Soh’s WhatsApp messages set out at [22] above, it appears to me that the parties’ understanding was that such extensions on a month-to-month basis would be based on the interest of $100,000 per month, ie, interest of 5% per month and not default interest of 6% per month. Therefore, I am of the view that default interest should only run from 1 April 2018.

142 To conclude, on the evidence before me, I am satisfied that AAI has proven its case against both defendants. I am also of the view that the defendants’ grounds for disputing the claim are not made out on the law and evidence before me. As such, I grant judgment in favour of AAI against the defendants for the principal amount of the loan of S$2m, with interest payable under cl 6.1 of the Loan Agreement at 5% per month to be calculated from 22 July 2016 to end March 2018, and default interest under cl 7.1 of the Loan Agreement at 6% per month from 1 April 2018 to date of payment. AAI is to give credit to the defendants for payment of the sum of S$900,000 which I accept to be made towards the interest on the Loan Agreement only (and not the principal amount). In my judgment, it is plain from the objective contemporary communications from Mr Soh to Mr Wong that the money set aside (being the initial sum of S$300,000) and subsequent payments of S$900,000 were intended for the payment of interest (see [12] and [22] above).

143 Pursuant to cl 4 of the Deed of Charge, Mr Soh is also to deliver to AAI (a) all share certificates representing the Charged Shares; (b) two share transfer forms duly executed in respect of the Charged Shares; and (c) a certified true copy of the Register of Members of Asidokona duly annotated by the company secretary of Asidokona to note that the Charged Shares are the subject of a charge in favour of AAI.

144 In relation to costs, AAI submits that the defendants should be ordered to pay costs on an indemnity basis for two reasons. First, it is contractually provided for at cl 10 of the Loan Agreement, as well as cl 2.1 of the Personal Guarantee. Second, this is an appropriate course for the present case given the defendants’ conduct of pursuing an entirely unmeritorious defence. ¹⁶² The defendants “vehemently deny and oppose” this submission, and argue that they have “only raised legitimate issues that have arisen over the course of the proceedings, specifically through [Ms Lou]”. ¹⁶³

145 Where there is a contractual agreement between parties prescribing that, in the event of a dispute, legal costs are to be paid by one party to another on an indemnity basis, the court “must have the power to override the parties’ agreement as to costs in order to preserve the integrity of the administration of justice” such that “where the claim for costs on the basis of a contractual provision is manifestly unjust, the court can and should intervene to disallow the claim in the exercise of its discretion” (Abani Trading Pte Ltd v BNP Paribas and another appeal [2014] 3 SLR 909 (“Abani”) at [93]). In that regard, “in the absence of manifest injustice, the court will tend towards upholding the contractual bargain entered into by both parties” (Abani at [93]).

146 On all the circumstances of the present case, I see no reason to depart from the contractual agreement that the defendants pay costs on an indemnity basis. No “manifest injustice” can be said to arise in the circumstances to justify the court exercising its discretion to override the parties’ agreement for indemnity costs. Such costs order should be unsurprising, given that the defendants had agreed to indemnity costs under the Loan Agreement and the Personal Guarantee. This is sufficient to dispose of the defendants’ objection to paying costs on an indemnity basis. Nevertheless, since both parties also submitted on the defendants’ conduct, I make the following remarks.

147 This should have been a straightforward claim for the recovery of the loan. To support the Illegal Moneylending Defence, the defendants made many bare allegations contrary to the objective contemporaneous evidence, including unwarranted and unnecessary allegations against Ms Pok. In particular, the allegation that Mr Soh signed blank pages flies in the face of clear WhatsApp messages and emails exchanged at the material time. Indeed, the communications clearly show that at all material times, Mr Soh was fully aware that the loan was meant to be granted to Asidokona, with Mr Soh as the guarantor. Having made these unsubstantiated allegations, Mr Soh elected (unsurprisingly) not to testify to substantiate his assertions. Further, after Mr Ong’s legal troubles in 2019, Ms Lou began distancing herself from the loan transaction. In my view, the defendants capitalised on the situation and introduced a number of unmeritorious defences so as to evade liability. Accordingly, I have no hesitation in awarding costs to AAI on an indemnity basis against the defendants. Such costs are to be taxed (if not agreed).