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Judgment:

2 Coram: Punch Coomaraswamy J

3 GROUNDS OF DECISION

4 The plaintiffs are bankers and one of their clients was Suntan Engineering Pte Ltd <

"Suntan" > . In November 1984, Suntan was granted certain of the banking

facilities by the plaintiffs on foreign letters of credit, local letters of credit and

trust receipts. At the hearing before me, the plaintiffs did not adduce any evidence of

the circumstances or purposes for which these facilities were given. In particular they

did not adduce any evidence to show that Suntan were to utilise these facilities only for

new and future transactions.

5 The defendants were suppliers of machinery and on 9 November 1983 Suntan and the

defendants entered into a hire purchase agreement whereby the defendants let and Suntan

hired one Fukushima DDW-275D winch < "the winch" > . Under the hire

purchase agreement, the hire purchase price of the winch was for S$400,000. The relevant

clauses under that agreement were:-

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21 Burden of proof

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23 In the present case, fraud is alleged against the defendants. The more serious the

allegation, the higher degree of probability is required; but I am mindful that it need

not reach the very high standard required by criminal law. This test was approved by

Denning LJ in Hornal v Neuberger Products Ltd < 1957 > 1 QB 247.

24 The Evidence

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27 The next witness the plaintiffs called was one Chan Swee Nee < "Chan" >

, a manager of the credit/correspondence banking department. The questions directed to him

by the defendants firstly dealt with ascertaining whether he knew that a delivery order

was not a document of title and that the plaintiffs did not obtain security over the winch

through the trust receipt as a document of title. On this line of cross-examination, I

told the defendants' counsel that this was a matter of law and I would not place much

weight on the evidence of the plaintiffs' witness.

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29 The defendants tendered the statements of Fong Chee Eng < "Fong" > and

Tan Kim Bee <"Tan"> and called them to give evidence. Fong's evidence was

only relevant to the extent that he was responsible for the sale of the said winch under

the hire purchase in 1983. He identified the hire purchase agreement and said that he

witnessed the signature of the defendants' representative and arranged for Santan's

representatives to sign the hire purchase agreement. He also instructed the delivery of

the winch.

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34 List of issues

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39 (This does not merit reporting)