1 February, 2016
The Appellant commenced proceedings to recover a fixed sum of money on three partially unpaid invoices. The Respondent claimed that these sums had been paid. The Respondent's evidence showed that certain payments had in fact been made. However, the evidence did not contemporaneously record the purpose for which the payments were made.
The Appellant similarly did not deny receiving payment from the Respondent. The Appellant however claimed that such payments were for sums other than those in relation to these three invoices. Like the Respondent, the Appellant did not have evidence which contemporaneously recorded the purposes to which the payments were applied.
Should the Respondent have to show that his debt had been discharged? Or should it be for the Appellant to show that the payments made were for sums other than those being claimed?
Background
The Appellant, SCT Technologies Pte Ltd., is a Singapore incorporated company in the business of manufacturing and distributing printed circuit board testing equipment. The Respondent, Western Copper Co. Ltd., is a Taiwanese company, in the business of manufacturing and distributing copper balls.
The parties traded copper balls for use in the manufacture of printed circuit boards. The Appellant said that the Respondent owed it payment for unpaid invoices issued between November 2007 and January 2008
Issues on Appeal
- Who bore the burden of proving the purpose of the payments made by the Respondents; and
- Had that party discharged the burden on a balance of probabilities?
Decision
Issue 1: Who bore the burden of proving the purpose of the payments made by the Respondents
The Court of Appeal found that the Appellant here had clearly brought a claim for a debt arising out of three specific invoices.
In response, the Respondent did not disclaim knowledge of the invoices or the underlying transactions. Rather, the Respondent confessed the truth of what was alleged against it (i.e. the existence of the debt), and thereafter, immediately avoided the effect of such allegation (i.e. by positively asserting that payment had been made to discharge the debt on the three invoices).
In line with well-established case law in various jurisdictions, the Court of Appeal held that in an action for a debt defended on the basis that payment has been made, the onus of proving such payment lies on the defendant.
The Court of Appeal also noted that such burden will not shift simply because the Appellant offers an alternative explanation to the purpose of the payments made.
Accordingly, in the present case, the burden lay on the Respondent to prove that the payments which it had made, and which the Appellant did not dispute receiving, did in fact go towards paying off the three invoices.
Issue 2: Has the burden been discharged on the evidence?
The second issue that the Court of Appeal was concerned with was whether the Respondent had discharged such burden.
The Court of Appeal found that the Respondent had advanced a "minimal case". The Respondent had relied on no more than certain bank statements, which recorded transfers of money to the Appellant, to prove that the debt on the three invoices had been paid off.
There was no apparent link shown between these transfers of money and the invoices which the Appellant was claiming on.
Therefore, the Court of Appeal found no contemporaneous evidence or credible explanation that went towards proving the Respondent's defence. Accordingly, the defence failed and the appeal was allowed.
Comment
This case reaffirms the fundamental principle in law – that he who asserts bears the burden of proving. As pointed out by the Court of Appeal, the pleadings are the starting point for determining where the incidence of the legal burden of proof lies. In this case, the Appellant had alleged that it had issued invoices for sale transactions. The Respondent acknowledged the invoices and the transactions. As the Respondent alleged that it had paid these invoices, it was the Respondent who bore the burden of proving this fact, which it failed to do.
For further information, please contact:
Leng Sun Chan, Principal, Baker & McKenzie.Wong & Leow
LengSun.Chan@bakermckenzie.com
