AIA team leader successfully sues ex-colleague to return him loan of S$12,000

SINGAPORE: A boss who left Great Eastern Financial Advisers to lead a group at AIA Singapore recruited his former inferior to meet him, offering to pay part of his debts to help the dean’s change.

However, the subordinate failed to repay S$ 12,000 ( US$ 9,200 ) of the loan, and the team leader sued him to claim it back.

While the superior did not dispute the excellent number, he argued that the team leader was barred from recovering it because the product was extended” for illegal functions”, to persuade AIA in assessing his financial soundness.

In a judgment made available on Wednesday ( Oct 9 ), a judge rejected the argument that the loan was illegal. He ordered the total to be repaid, with interest at 5. 33 per cent per capita from the time of the emerging say to the day of judgment.

THE Event

The claim, Mr Chong Kuan Siong, second got to know the plaintiff, Mr Lennard Goh Boon Kiat, in February 2018 when they worked for Unioracle Alliance, a financial service organization.

From June 2019 to November 2021, they were even coworkers at Great Eastern Financial Advisers, where Mr Goh was a financial advisor reporting to Mr Chong, his boss.

On Nov 2, 2021, Mr Chong left Great Eastern to visit AIA Singapore.  

Some months later in May 2022, he decided to enlist Mr Goh to meet his group at AIA. In reply, Mr Goh resigned from Great Eastern on May 29, 2022.

In October 2022, AIA issued a letter of intent to Mr Goh, offering him the place of financial services manager content to specific circumstances.

These include passing a financial integrity judgment, which included a condition that Mr Goh’s individual obligations for unsecured debts should not be more than S$ 30,000.

Mr Goh told Mr Chong that he had unsecured debts of more than S$ 60,000, primarily in the form of credit card debts.

In response, Mr Chong extended a personal loan of S$ 24,000 to Mr Goh, to help him discharge his debts.  

Mr Goh took up the product and ultimately cleared all of AIA’s “fit and appropriate people” assessments.

He eventually made several payments to Mr Chong, but left an amount of S$ 12,000 excellent.

Mr Chong then sued Mr Goh to get the S$ 12,000 back.

ENFORCEABLE?

Mr Goh’s doctors, Mr Michael Ng and Mr Clement Yong from Beyond Legal, argued that the loan contract was not legal because it was entered into with the purpose of misleading AIA in its evaluation of Mr Goh’s financial integrity.

They argued that the loan did not reduce Mr Goh’s level of unsecured debt in reality, and that the loan served only the purpose of masking his true level of debt to circumvent regulations by the Monetary Authority of Singapore ( MAS ) and mislead AIA.

Mr Chong’s team of lawyers from Shook Lin & Bok, comprising Mr Lin Ruizi, Ms Denise Yong and Ms Nikhita Mulani, argued that the loan agreement was enforceable.

It was Mr Goh’s burden to prove that the loan agreement was a contract falling within an established situation where the objective was to commit an illegal act, and Mr Goh had failed to discharge this burden, the lawyers said.

District Judge Chiah Kok Khun  pointed to an email from AIA, saying there was no item requiring Mr Goh to declare that he has” no unsecured debt owed to persons other than financial institutions”.

He said there was “nothing objectionable” in Mr Chong assisting Mr Goh to reduce his indebtedness to financial institutions.

” That the loan enabled the defendant to pass the financial soundness assessment does not render the purpose of the loan illegal,” said the judge.

” The loan was not given for the purpose of masking the defendant’s true level of unsecured debts in order to mislead AIA into believing that the defendant had passed the financial soundness assessment. “

He added that “it is of pertinence to bear in mind that it is not illegal to borrow money to repay and reduce debts”.

” Refinancing a loan is not per se illegal, as the defendant admits,” added the judge.

He found there was” no reason” why the loan agreement was not enforceable.

He ordered Mr Goh to pay Mr Chong costs of S$ 3,500, on top of repaying the owed sum of S$ 12,000, with interest.

The case was tried on a documents-only basis, under a protocol implemented in the State Courts for quicker settling of cases where parties agree.