Tan Hai Peng Micheal and another (as the executors of the estate of Tan Thuan Teck, deceased) v Tan Cheong Joo and another and other matters [2025] SGHC 217

Case Details

• Citation: [2025] SGHC 217
• Court: General Division of the High Court of the Republic of Singapore
• Decision Date: 3 November 2025
• Coram: S Mohan J
• Case Number: Originating Claim No 381 of 2023; Originating Claim No 382 of 2023; Originating Claim No 201 of 2024
• Hearing Date(s): 6–9, 13, 14 May, 4 August, 18 September 2025
• Claimants / Plaintiffs: Tan Hai Peng Micheal; Tan Hai Seng Benjamin (as the executors of the Estate of Tan Thuan Teck, deceased)
• Respondent / Defendant: Tan Cheong Joo; Tan Seong Kok
• Counsel for Claimants: Yeoh Kar Hoe, Abel George (David Lim & Partners)
• Counsel for Respondent: Goh Peck San (P S Goh & Co)
• Practice Areas: Credit and Security; Money and moneylenders; Illegal moneylending; Civil Procedure

Summary

The decision in Tan Hai Peng Micheal and another v Tan Cheong Joo and another [2025] SGHC 217 addresses the critical intersection of private lending and the regulatory rigours of the Moneylenders Act 2008 (MLA). The dispute arose from several high-value loans extended by the late Tan Thuan Teck ("TTT"), the founder of the Ho Lee Group, to four brothers—Tan Cheong Joo ("TCJ"), Tan Seong Kok ("TSK"), Tan Siong Tiew ("TST"), and Tan Siong Lim ("TSL") (collectively, the "Brothers")—and their associated corporate entities within the Fong Tat Group. Following TTT's passing, the executors of his estate sought to recover outstanding sums exceeding $16.6 million. The primary defence raised was that the loans were unenforceable under s 19(3) of the Moneylenders Act 2008 (or s 14(2) of the 2010 Rev Ed) on the basis that TTT was an unlicensed moneylender.

The central legal controversy revolved around whether TTT qualified as an "excluded moneylender" under the MLA. An excluded moneylender includes any person who lends money solely to "accredited investors" as defined by the Securities and Futures Act 2001 (SFA). A pivotal doctrinal contribution of this judgment is the Court’s clarification of the burden of proof in such instances. S Mohan J held that while the claimant bears the initial burden of proving the existence of the debt, the legal burden of proving that a lender is not an excluded moneylender—and thus falls within the prohibitory scope of the MLA—rests squarely on the borrower asserting the illegality defence. This aligns with the principle that the party asserting a fact (in this case, the non-status of the lender as an excluded entity) must prove it under the Evidence Act 1893.

Furthermore, the Court scrutinized the financial standing of the Brothers to determine if they met the "accredited investor" thresholds at the material times. Under the SFA, this requires proof of net personal assets exceeding $2 million or an income of not less than $300,000 in the preceding 12 months. The Court found that the Defendants failed to discharge their burden of proving they were not accredited investors. Consequently, TTT was deemed an excluded moneylender, rendering the MLA inapplicable to the transactions. The Court also dismissed a secondary defence regarding an alleged oral waiver of interest on a $10 million loan, finding the evidence of such a waiver to be inconsistent and uncorroborated.

Beyond the substantive moneylending issues, the judgment is notable for its treatment of a significant procedural lapse: the citation of fictitious legal authorities by the Defendants' counsel. This appears to be an instance of generative AI "hallucination" in a legal context. S Mohan J addressed this with gravity, emphasizing the duty of counsel to verify all citations and the potential for personal costs orders or disciplinary action when fictitious cases are presented to the Court. This aspect of the judgment serves as a stern warning to the profession regarding the unverified use of AI tools in litigation.

Timeline of Events

1. 5 August 2009: TTT extends the "2009 Loan" of $2,000,000 to Fong Tat Group.
2. 31 December 2009: Date associated with early financial records of the Fong Tat Group entities.
3. 22 June 2012: TTT extends the first of the "O2 Sensor Loans" to O2 Sensor New Technology Group Pte Ltd.
4. 15 May 2013: TTT extends the "IAPL Loan" to Ideal Auto Parts Pte Ltd.
5. 30 December 2013: Further loan activity recorded involving the Brothers' companies.
6. 5 March 2015: TTT extends a further loan to the Brothers or their entities.
7. 29 March 2016: The "2016 FTH Directors Loan" is extended to the Brothers and Fong Tat Holding.
8. 31 December 2016: Financial year-end records relevant to the assessment of the Brothers' net assets.
9. 5 April 2018: TTT extends the "2018 TSK Loan" to Tan Seong Kok.
10. 28 September 2018: TTT extends the "2018 TCJ Loan" of $10,000,000 to Tan Cheong Joo. This is the last of the "Relevant Loans."
11. 8 October 2018: Administrative recording of loan disbursements.
12. 28 December 2019: Relevant date for interest calculations and repayment demands.
13. 15 April 2020: Tan Thuan Teck (TTT) passes away.
14. 6 May 2020: Executors begin the process of identifying and recovering estate assets.
15. 9 May 2020: Correspondence between the Estate and the Brothers regarding outstanding debts.
16. 26 May 2020: Further formal demands for repayment issued by the Estate's solicitors.
17. 14 December 2021: Formal notice of dispute regarding the interest waiver claim.
18. 29 December 2022: Final pre-action correspondence before the commencement of OC 381 and OC 382.
19. 20 April 2023: Commencement of Originating Claim No 381 of 2023 and Originating Claim No 382 of 2023.
20. 27 May 2023: Service of process and initial responses from the Defendants.
21. 201 of 2024: Commencement of Originating Claim No 201 of 2024.
22. 6–9, 13, 14 May 2025: Substantive trial hearings before S Mohan J.
23. 11 June 2025: Deadline for initial post-trial submissions.
24. 7 July 2025: Deadline for responsive post-trial submissions.
25. 4 August 2025: Further hearing to address specific evidentiary issues.
26. 26 August 2025: Filing of further submissions regarding fictitious authorities.
27. 10 September 2025: Defendants' counsel provides explanation for fictitious citations.
28. 17 September 2025: Final clarification hearing.
29. 18 September 2025: Final hearing date.
30. 3 November 2025: Judgment delivered by S Mohan J.

What Were the Facts of This Case?

The litigation involved three consolidated Originating Claims (OC 381/2023, OC 382/2023, and OC 201/2024) brought by Tan Hai Peng Micheal and Tan Hai Seng Benjamin in their capacity as executors of the estate of their late father, Tan Thuan Teck ("TTT"). TTT was a prominent figure in the Singapore construction industry, having founded the Ho Lee Group. The Defendants were Tan Cheong Joo ("TCJ") and Tan Seong Kok ("TSK"), two of four brothers who managed the Fong Tat Group, a conglomerate involved in automotive parts and property holding.

The relationship between TTT and the Brothers was one of long-standing friendship and business acquaintance, rooted in their shared involvement with the advisory committee of Xinmin Secondary School. Between 2009 and 2018, TTT provided extensive financial assistance to the Brothers and their companies. The "Relevant Loans" at the heart of the dispute were:

• The 2016 FTH Directors Loan: A loan of $2.7 million extended on 29 March 2016 to the four Brothers and Fong Tat Holding Co Pte Ltd.
• The 2018 TSK Loan: A loan of $1 million extended on 5 April 2018 to Tan Seong Kok.
• The 2018 TCJ Loan: A loan of $10 million extended on 28 September 2018 to Tan Cheong Joo.

The 2018 TCJ Loan was particularly significant, not only for its quantum but for the circumstances of its disbursement. TTT had issued a cheque for $10 million to TCJ, which was then used to settle various debts and business obligations of the Fong Tat Group. The loan carried an agreed interest rate of 5% per annum. Following TTT’s death on 15 April 2020, the Executors discovered these outstanding debts and sought repayment. The Defendants admitted to receiving the funds but raised several affirmative defences to avoid repayment.

The primary defence was the "Moneylending Defence." The Defendants argued that TTT was carrying on the business of moneylending without a license, in contravention of the MLA. They pointed to the frequency of the loans (at least six distinct loan events over nine years) and the fact that TTT charged interest. Under s 19(3) of the MLA, any contract for a loan made by an unlicensed moneylender is unenforceable. The Claimants countered that TTT was an "excluded moneylender" because he lent money solely to "accredited investors" as defined in the SFA. They argued that the Brothers, given their extensive business holdings and property portfolios, met the financial thresholds for accredited investor status.

A secondary defence specific to the 2018 TCJ Loan was the "Waiver Defence." TCJ alleged that in late 2019, TTT had orally agreed to waive all interest on the $10 million loan during a meeting at TTT’s office. TCJ claimed this waiver was granted because of their close friendship and TTT’s recognition of the financial difficulties the Fong Tat Group was facing. The Executors denied any such waiver existed, noting the lack of any written record or mention of it in the years following TTT’s death until the litigation commenced.

The trial involved extensive cross-examination of the Executors and the Defendants. Key exhibits included bank statements, financial statements of the Fong Tat Group companies, and property valuation reports intended to prove or disprove the "accredited investor" status. A dramatic turn occurred during the closing stages of the trial when it was discovered that the Defendants' counsel had cited several cases in their written submissions that did not exist in any legal database, leading to a separate inquiry into the use of AI-generated content.

What Were the Key Legal Issues?

The Court was tasked with resolving three primary legal issues, each carrying significant implications for the enforceability of the loans and the interpretation of the Moneylenders Act 2008.

• Issue 1: The "Excluded Moneylender" Status and the Burden of Proof. The Court had to determine whether TTT fell within the definition of an "excluded moneylender" under s 2 of the MLA. This required deciding:
  • Which party bore the legal burden of proving that the lender was (or was not) an excluded moneylender?
  • Did the Defendants meet the definition of "accredited investors" under s 4A of the Securities and Futures Act 2001 at the time the loans were made?
• Issue 2: The Business of Moneylending. If TTT was not an excluded moneylender, the Court had to decide whether his lending activities constituted "carrying on the business of moneylending" under the MLA. This involved applying the "system and continuity" test and the statutory presumption in s 3 of the MLA.
• Issue 3: The Alleged Waiver of Interest. Regarding the 2018 TCJ Loan, the Court had to determine whether TTT had validly waived the interest. This required an assessment of the credibility of TCJ’s testimony and whether there was sufficient evidence to establish an oral agreement or an estoppel.
• Issue 4: Procedural Integrity and AI Hallucinations. A late-stage issue arose concerning the professional conduct of counsel and the legal effect of citing fictitious authorities. The Court had to determine how to treat submissions based on non-existent cases.

How Did the Court Analyse the Issues?

The Burden of Proof under the Moneylenders Act

The Court’s analysis of the "excluded moneylender" exception is the most significant portion of the judgment. S Mohan J began by examining the statutory framework. Under the MLA, "moneylender" is defined to exclude "any excluded moneylender." An "excluded moneylender" includes any person who lends money solely to "accredited investors."

The Defendants argued that the Claimants, as the parties seeking to enforce the loan, bore the burden of proving that TTT was an excluded moneylender. The Court rejected this, relying on the Evidence Act 1893 and the Court of Appeal’s decision in Sheagar s/o T M Veloo v Belfield International (Hong Kong) Ltd [2014] 3 SLR 524. The Court reasoned that the MLA’s prohibition on unlicensed moneylending is an illegality defence. As such, the party asserting the illegality (the Defendants) bears the legal burden of proving the facts necessary to establish that defence.

"I find and hold that it is the defendants who bear the legal burden of proving that TTT was not an excluded moneylender" (at [43]).

The Court applied the principles from Ma Hongjin v SCP Holdings Pte Ltd [2021] 1 SLR 304, distinguishing between the legal burden (which never shifts) and the evidential burden (which may shift). Since the Defendants asserted that TTT was an unlicensed moneylender, they had to prove he did not fall into any of the "excluded" categories. This required them to prove that they themselves were not accredited investors at the time of the loans.

The Accredited Investor Test

The Court then turned to the definition of "accredited investor" in s 4A of the Securities and Futures Act 2001. At the time of the 2018 TCJ Loan, the relevant criteria (under the 2006 Rev Ed of the SFA) included:

• An individual whose net personal assets exceed $2 million (or equivalent); or
• An individual whose income in the preceding 12 months is not less than $300,000.

The Court found the Defendants' evidence on their financial status to be "singularly unhelpful" and "evasive." TCJ and TSK failed to produce comprehensive personal tax assessments or clear statements of their net assets. Instead, they relied on the fact that their companies were in financial distress. However, the Court noted that the test for an accredited investor is based on personal assets and income, not the health of their corporate entities. The Court observed that the Brothers held significant property interests and directorships. Because the Defendants bore the burden of proof and failed to provide the necessary financial disclosures to prove they fell below the AI thresholds, the Court concluded they had not proven TTT was not an excluded moneylender.

The Business of Moneylending

Although the finding on "excluded moneylender" status was dispositive, the Court briefly addressed whether TTT was "carrying on the business of moneylending." The Court noted that even if TTT were not an excluded moneylender, the Defendants would still need to show a "system and continuity" in his lending. While TTT had made several loans, the Court observed they were all to a specific group of friends and their companies, rather than to the public at large. However, given the finding on the AI status, a full determination on this point was unnecessary.

The Interest Waiver Defence

Regarding the alleged waiver of interest on the $10 million loan, the Court applied a high standard of proof for oral variations of written contracts. TCJ’s testimony was found to be inconsistent. He claimed the waiver happened in late 2019, yet there was no contemporaneous documentation. Furthermore, the Court noted that TTT was a meticulous businessman; it was improbable he would waive millions in interest without a single scrap of paper. The Court held that the Defendants failed to prove the waiver on a balance of probabilities.

Fictitious Authorities and Counsel's Duty

The Court dealt extensively with the Defendants' citation of non-existent cases, such as "Tan Ah Kow v Public Prosecutor" and others that appeared to be AI-generated. The Court cited Tajudin bin Gulam Rasul v Suriaya bte Haja Mohideen [2025] SGHCR 33, noting that this was a growing concern.

"The citation of fictitious authorities is a flagrant breach of the duty of counsel to the court... It wastes judicial time and undermines the integrity of the legal process" (at [95]-[100]).

The Court accepted the explanation from the Defendants' counsel that the citations were the result of "unintentional" reliance on AI tools without verification but emphasized that this did not excuse the breach of professional duty. The Court reserved the issue of costs and potential sanctions for a separate hearing.

What Was the Outcome?

The Court granted judgment in favour of the Claimants in all three actions. The "Moneylending Defence" failed because the Defendants could not prove that TTT was not an excluded moneylender. The "Waiver Defence" failed due to a lack of credible evidence.

The operative orders were as follows:

"I grant the claimants judgment in OC 201, OC 381 and OC 382 as follows:" (at [92])

• In OC 381/2023: The Defendants (TCJ and TSK) were ordered to pay the outstanding principal and interest on the 2016 FTH Directors Loan.
• In OC 382/2023: The Defendant (TSK) was ordered to pay the outstanding principal and interest on the 2018 TSK Loan.
• In OC 201/2024: The Defendant (TCJ) was ordered to pay the principal sum of $10,000,000 plus accrued interest at 5% per annum from 28 September 2018.

The Court specifically rejected the Defendants' attempt to rely on the MLA to void the loans. The total judgment sum, including interest, exceeded $16.6 million. Regarding the issue of costs, the Court noted the gravity of the "fictitious authorities" incident and reserved the determination of costs for a subsequent judgment, indicating that the conduct of counsel would be a significant factor in that assessment.

Why Does This Case Matter?

This judgment is a landmark for several reasons, primarily concerning the burden of proof in moneylending disputes and the ethical use of technology in legal practice.

1. Clarification of the Burden of Proof: For years, there has been some ambiguity regarding who must prove "excluded moneylender" status. By definitively placing the legal burden on the borrower to prove the lender is not an excluded moneylender, the Court has significantly raised the bar for defendants seeking to invoke the MLA as a shield against repayment. This is a pro-creditor shift that protects private lenders who transact with sophisticated, high-net-worth individuals.

2. Practical Application of the "Accredited Investor" Test: The case demonstrates that the Court will not accept vague assertions of financial distress as evidence that a party is not an accredited investor. Practitioners must now ensure that if they intend to raise a moneylending defence, they must be prepared to provide full financial disclosure of the borrower's personal assets and income. Evasiveness in this regard will lead to an adverse finding, as the burden of proof will not be discharged.

3. The "AI Hallucination" Warning: This is one of the first major Singapore High Court judgments to deal substantively with the citation of fictitious authorities generated by AI. It establishes a clear precedent that counsel cannot delegate their duty of verification to technology. The Court’s willingness to consider personal costs orders or disciplinary referrals for such lapses marks a new era of technological accountability for the Singapore Bar.

4. Enforcement of Oral Waivers: The judgment reinforces the difficulty of proving oral variations to written loan agreements. In high-value transactions, the Court expects a high degree of corroboration. The absence of written records, especially in a relationship between sophisticated businessmen, is often fatal to a claim of waiver or estoppel.

5. Interplay between SFA and MLA: The case provides a clear roadmap of how the definitions in the Securities and Futures Act 2001 are imported into the Moneylenders Act 2008. This is essential for practitioners structuring private lending arrangements or "bridge loans" to ensure they fall within the "excluded moneylender" safe harbour.

Practice Pointers

• Verify Accredited Investor Status: When documenting private loans, lenders should proactively obtain and file evidence of the borrower's accredited investor status (e.g., tax assessments, property valuations, or bank statements) at the time of the loan. This mitigates the risk of a future MLA defence.
• Burden of Proof Strategy: Litigation counsel for lenders should focus on the borrower's failure to provide financial disclosure. Since the legal burden is on the borrower to prove they were not an accredited investor, a lack of evidence works in the lender's favour.
• AI Due Diligence: Practitioners must implement strict internal protocols for verifying every case citation. Relying on AI-generated summaries or "case finders" without checking the original law reports is a breach of professional duty that can lead to severe sanctions.
• Document All Variations: Any waiver of interest or extension of repayment terms must be documented in writing. The Court is highly skeptical of "handshake deals" involving millions of dollars, even between close friends.
• Understand the SFA Thresholds: Be aware that the definition of "accredited investor" has evolved. Ensure you are applying the version of the SFA that was in force at the time the loan was made.
• Plead Illegality Specifically: Defendants must plead the specific facts that make the lender an unlicensed moneylender. A bare assertion is insufficient to shift the evidential burden.
• Estate Recovery: For executors, this case confirms that the estate stands in the shoes of the deceased and can enforce loans even if the deceased was informal in his record-keeping, provided the statutory exceptions (like the AI exception) can be established.

Subsequent Treatment

As this is a very recent judgment (November 2025), its subsequent treatment in higher courts or later High Court decisions is yet to be fully recorded. However, its adoption of the principles in Sheagar regarding the burden of proof suggests it will be followed as a definitive authority on the "excluded moneylender" exception. Its treatment of AI-generated fictitious authorities is likely to be cited in future professional conduct proceedings and civil procedure updates.

Legislation Referenced

• Moneylenders Act 2008 (2020 Rev Ed), s 19(3), s 2, s 3
• Moneylenders Act (Cap 188, 2010 Rev Ed), s 14(2)
• Securities and Futures Act 2001, section 4A
• Securities and Futures Act (Cap 289, 2006 Rev Ed), Section 4A
• Banking Act 1970, section 4B
• Financial Advisers Act 2001, section 2(1), section 341
• Evidence Act 1893 (2020 Rev Ed), Section 103, s 105

Cases Cited

• Applied: Sheagar s/o T M Veloo v Belfield International (Hong Kong) Ltd [2014] 3 SLR 524
• Referred to: Mface Pte Ltd v Chin Oi Ching [2024] SGHC 234
• Referred to: Debenho Pte Ltd v Envy Global Trading Pte Ltd [2022] SGHC 7
• Referred to: Tajudin bin Gulam Rasul v Suriaya bte Haja Mohideen [2025] SGHCR 33
• Referred to: Mah Kiat Seng v Attorney-General [2022] 3 SLR 890
• Referred to: Ma Hongjin v SCP Holdings Pte Ltd [2021] 1 SLR 304
• Referred to: Britestone Pte Ltd v Smith & Associates Far East, Ltd [2007] 4 SLR(R) 855
• Referred to: Rabobank International, Singapore Branch v Motorola Electronics Pte Ltd [2011] 2 SLR 63
• Foreign Authority: Luck v Secretary, Services Australia [2025] FCAFC 26
• Foreign Authority: Ayinde v London Borough of Haringey [2025] EWHC 1383 (Admin)

Source Documents

• Original judgment PDF: Download (PDF, hosted on Legal Wires CDN)
• Official eLitigation record: View on elitigation.sg