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

SINGAPORE: A manager who left Great Eastern Financial Advisers to lead a team at AIA Singapore recruited his former subordinate to join him, offering to pay part of his debts to enable the junior’s transition.
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 subordinate did not dispute the outstanding amount, he argued that the team leader was barred from recovering it because the loan was extended “for illegal purposes”, to mislead 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 sum to be repaid, with interest at 5.33 per cent per annum from the date of the originating claim to the date of judgment.
The claimant, Mr Chong Kuan Siong, first got to know the defendant, Mr Lennard Goh Boon Kiat, in February 2018 when they worked for Unioracle Alliance, a financial services firm.
From June 2019 to November 2021, they were also colleagues at Great Eastern Financial Advisers, where Mr Goh was a financial consultant reporting to Mr Chong, his manager.
On Nov 2, 2021, Mr Chong left Great Eastern to join AIA Singapore. 
Several months later in May 2022, he decided to recruit Mr Goh to join his team at AIA. In response, 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 position of financial services manager subject to certain conditions.
These include passing a financial soundness assessment, which included a requirement that Mr Goh’s personal liabilities for unsecured loans 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 loan and eventually cleared all of AIA’s “fit and proper person” assessments.
He later made various repayments to Mr Chong, but left an amount of S$12,000 outstanding.
Mr Chong then sued Mr Goh to get the S$12,000 back.
Mr Goh’s lawyers, Mr Michael Ng and Mr Clement Yong from Beyond Legal, argued that the loan agreement was not enforceable because it was entered into with the objective of misleading AIA in its assessment of Mr Goh’s financial soundness.
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.