Alternative Advisors Investments Pte Ltd v Asidokona Mining Resources Pte Ltd

Held, allowing the claim:

(1) In relation to any cause of action pleaded by the plaintiff, the plaintiff bore the legal burden of proof that would only be discharged if the court was satisfied that the plaintiff had proved its pleaded case against the defendant on a balance of probabilities. It was, however, open to a defendant to elect to call no evidence on the basis that the evidence put forth by the plaintiff was insufficient to transfer the evidential burden onto the defendant such that the plaintiff had failed to prove its case. While the legal burden was on the plaintiff throughout the proceedings as the party making the claim against the defendant, the evidential burden could shift as the civil trial progressed. The establishment of a prima facie case by the plaintiff on a particular point on which it bore the legal burden denoted the point at which the evidential burden would shift to the defendant: at [61] and [62].

(2) The threshold to succeed on a “no case to answer” submission was a high one. A submission of “no case to answer” would only succeed if the evidence led by the plaintiff, at face value, did not establish a case in law or was so unsatisfactory or unreliable that the plaintiff had not discharged its burden of proof. If circumstantial evidence was relied on, it did not have to give rise to an irresistible inference as long as the desired inference was one of the possible inferences: at [63].

(3) The requirement of joining an equitable assignor as a co-plaintiff was a procedural requirement. The reason was 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. The court might dispense with such procedural requirement in the appropriate cases: at [72] to [74].

(4) There was no risk of double recovery in the circumstances. The action was determinative of the subject matter such that SSI could not bring a fresh suit in respect of the same. While SSI chose not to participate in these proceedings after it was restored to the BVI Register of Companies, SSI had adopted and ratified the Loan Agreement, Personal Guarantee, deed of charge, Deeds of Assignments, and the commencement of the action by AAI. Ms Lou confirmed on affidavit that SSI would not commence further action against Asidokona or Mr Soh in the matter, given the assignment to AAI. Furthermore, the defendants in effect sought the absence of SSI to deny liability for the repayment of the loan. In such circumstances, the defendants could not be allowed to succeed on the Locus Standi Defence and thereby escape liability. In any case, AAI had in fact added SSI as co-plaintiff to the action. There was no specific order for SSI to cease being a party and the effect of the striking out was not that SSI was removed as a party: at [76] to [78].

(5) In general, ratification was akin to an assent by the principal to the transaction entered into by the unauthorised agent by adopting the agent's otherwise unauthorised acts. 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. The Ratification was valid because, contrary to the defendants' arguments, Ms Lou had full knowledge of the material facts pertaining to the unauthorised actions of Mr Wong at the time of the Ratification, such Ratification was made within a reasonable period of time following SSI's restoration to the BVI Register of Companies, and the Ratification was not an abuse of process. Accordingly, the defendants' Invalid Ratification Defence was rejected and the Lack of Authority Defence fell away: at [83] to [88].

(6) Against 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 SSI did not contribute the money and that the money was misappropriated from other clients was Ms Lou's equivocal evidence that neither she nor SSI had contributed any money to the loan. Ms Lou was assessed to have had distanced herself from any dealings with Mr Ong, which explained her somewhat inconsistent, evasive and unhelpful evidence in court. By 20 October 2020, Ms Lou's husband was named as a co-conspirator of Mr Ong in charges of conspiracy to cheat CW Group Holdings Ltd: at [95] and [96].

(7) Ms Lou's testimony was not 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 expressly acknowledged the remittance of S$1m by SSI and confirmed that the S$1m never came back to SSI. The reasonable inference to be drawn was that the S$1m was used to finance part of the loan to Asidokona pursuant to the Loan Agreement, which was also supported by other corroborative evidence. The Illegality Defence was thus rejected: at [97] to [100].

(8) The Maintenance and Champerty Defence was unmeritorious. Where the assignee had by the assignment acquired a property right and the cause of action was incidental to that right, the assignment was effective. Based on the Deeds of Assignments, it was 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. The fact that the Deeds of Assignments also incidentally conferred causes of action did not mean that the assignments savour of maintenance and champerty. An arrangement where the assignor and assignee shared the recovered sums if the suit succeeded did not ipso facto savour of maintenance and champerty: at [105], [106], [108] and [109].

(9) To rely on s 19(3) of the MLA, the borrower had to prove that the lender was an unlicensed moneylender. If the borrower could establish that the lender had lent money in consideration for a higher sum being repaid, he might rely on the presumption contained in s 3 of the MLA to discharge that burden. The burden then shifted to the lender to prove that he either had not carried on the business of moneylending or had possessed a moneylending licence or was an exempted moneylender. The legal burden of proving that the lender was not an excluded moneylender as defined under s 2 of the MLA fell on the borrower: at [114].

(10) The defendants relied on s 3 of the MLA and the pertinent issue was whether SSI was an excluded moneylender. The defendants had abandoned their initial allegation that the loan was made to Mr Soh personally and not to Asidokona. On the evidence, SSI's loan was extended only to a corporation. The defendants fell far short of proving that SSI was not an excluded moneylender and the Illegal Moneylending Defence was rejected: at [119] to [121] and [127].

(11) The rule against contractual penalties applied only to secondary obligations and thus could not be engaged on the contractual interest rate of 5% per month since that concerned a primary obligation to repay the loan. As for the default interest rate of 6% per month, the defendants failed to adduce evidence to show that such interest rate was extravagant and unconscionable in the circumstances. The short-term loan was secured only by Mr Soh's personal guarantee and Mr Soh's shares in Asidokona which was a private company incorporated a year prior to the loan. The Penalty Clause Defence thus failed. In view of the extensions to repay the loan on a month-to-month basis, the default interest ran from 1 April 2018: at [133], [135] and [141].

(12) Where there was a contractual agreement between parties prescribing that, in the event of a dispute, legal costs were to be paid by one party to another on an indemnity basis, the court had the power to override the parties' agreement as to costs in order to preserve the integrity of the administration of justice. In the absence of manifest injustice, the court would tend towards upholding the contractual bargain entered into by both parties. In the circumstances, there was no manifest injustice that could be said to arise to justify the court exercising its discretion to override the parties' agreement for indemnity costs: at [145] and [146].