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Judgment:

2 GROUNDS OF JUDGMENT

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5 The second plaintiff was a director and the controlling shareholder of, Makin. Makin

was compulsorily wound up by an order of court made by Lim Teong Qwee JC on 17 March 1994

in Companies Winding Up No 294 of 1993 (the winding up) on a petition presented by the

defendants, who are stockbrokers. Makin contested the winding up (see Re Makin Nominees

Pte Ltd < 1994 > 3 SLR 429) and appealed against Lim JC's order. However its appeal

was deemed to be withdrawn for lack of further action after filing the notice of appeal on

14 April 1994. Makin was granted permission by the Official Receiver to pursue this suit

provided it furnished security for costs which condition the second plaintiff complied

with.

6 3. Between 1981 and August 1984, Makin was a customer of and operated a trading account

with, the defendants. Arising out of such trading (which was done through a remisier Lim

Sin Kok < Lim > ), Makin incurred substantial losses and or was unable to pay for

its purchase of shares during the time of the Pan Electric Industries Ltd (Pan Electric)

crisis. The second plaintiff was a guarantor for Makin's account. The defendants then

instituted proceedings and obtained judgment thereto against both plaintiffs in Suit No

3806 of 1986 (the suit) for $6,731,855.20 on 21 November 1986 (the judgment). The

plaintiffs appealed against the judgment but their appeal to a judge in chambers was

adjourned by mutual agreement when it first came up for hearing on 19 March 1987.

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9 The plaintiffs were also obliged to pay further interest on the actual balance of the

principal sum outstanding by quarterly instalments commencing 1 August 1987 < see cl

1(c) > .

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13 9. Meanwhile, on 4 May 1992 the plaintiffs' application in Singapore for a stay of

execution on the judgment was dismissed. The plaintiffs' appeal against the judgment (as

well as the unsuccessful stay application) was finally heard and dismissed, by Warren Khoo

J on 7 July 1992 (see Ong & Co Ltd v Makin Nominees Pte Ltd < 1993 > 1 SLR 289).

The plaintiffs then appealed to the Court to Appeal (Civil Appeal No 111 of 1992) against

Khoo J's decision which appeal was also dismissed on 23 February 1993. On 13 July 1993 the

plaintiffs filed this action.

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15 The pleadings 11. The statement of claim in its amended form alleged the following:

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23 h. the defendants breached the oral agreement and the settlement agreement by

24 (i) disposing of Makin's shares below the agreed price;

25 (ii) proceeding to register the judgment in Kuala Lumpur on 14 September 1991, and

26 (iii) failing to credit Makin's account with $767,481.99.

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35 15. Counsel for the plaintiffs had a second application -- he wanted leave to adduce

oral evidence from the second plaintiff (not stated in his affidavit evidence in chief)

relating to the alleged oral/collateral agreement on the mutual stand-off situation --

that the plaintiffs had agreed not to enforce their rights against the defendants for

improper and unauthorised share trading on Makin's account and the defendants had agreed

not to enforce the judgment. Against the strenuous objections of counsel for the

defendants (who argued that allowing the application went against s 94 of the Evidence Act

(Cap 97) in the face of the settlement agreement not to mention res judicata), I allowed

the application but only to the extent that the plaintiffs could adduce evidence of the

collateral agreement; they could not resurrect their previous arguments on the settlement

agreement which I accepted were issue estopped (see Ong & Co Ltd v Makin Nominees Pte

Ltd and Re Makin Nominees Pte Ltd < supra > ).

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64 A. if the judgment has not been set aside at the time of default, then, (a) the company

< the defendants > shall be at liberty to enforce the judgment for a sum equivalent

to the total of the following:-

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73 37. The memorandum of 18 December 1987 clearly stated under the heading Makin Nominees:

DMK < the second plaintiff > has instructed LSK < Lim > to liquidate all share

scrips including Promet, as soon as possible. To the best of his recollection, the

paragraph correctly reflected what the second plaintiff did. At that time the second

plaintiff was already in default of his obligations under cl 2(a) of the settlement

agreement (in failing to provide by 14 September 1987 satisfactory collateral to the value

of $4,342,871.83). So Tan decided he would not object when the second plaintiff instructed

that all shares including Promet should be sold. Accordingly the shares were sold by Lim

who gave written confirmation to the second plaintiff from time to time of the sales and

the prices transacted. In any case under cl 4(a) of the settlement agreement, Lim was

irrevocably appointed by Makin to sell the shares at Lim's sole discretion.

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93 .... There was nothing further to be done by the company < Makin > or Mak Kok if

there was this collateral oral agreement. There are serious obstacles in the way of

proving this collateral oral agreement. Clause 2(a) of the settlement agreement provides:

94 < Mak Kok > shall provide by 14 September 1987 to the < petitioner >

collateral of such kind and nature that is satisfactory and acceptable to the <

petitioner > (quoted and traded shares on the Stock Exchange of Singapore and/or Kuala

Lumpur Stock Exchange shall be deemed to be satisfactory and acceptable collateral) so

that the total value of the shares provided as collateral is not less than $4,342,871.83

being the difference between the total indebtedness ($6,494,351.83) and the value of the

shares ($2,151,480) as stated in cl 3(b) herein.

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96 In the course of counsel's submissions I asked if the matter was not res judicata......

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101 Lai Siu Chiu Judge 27 January 1997.