In disputes over debt and repayment, the conflict often comes down to a matter of evidence – who bears the burden of proof, and who has the better records? In Chua Kok Tee David v DBS Bank Ltd [2015] SGHC 198, the Singapore High Court faced such a dispute in the context of bank and customer. Specifically, it considered whether the bank could show it had repaid a deposit despite lacking direct evidence.

Here, the customer had placed a fixed deposit with the bank back in 1983, which he then sought to uplift in 2012. However, the bank could not produce any records of the debt having been repaid. Rather, it relied on its internal records which showed no trace of any such debt due from 1984 onwards.

The Court held that the bank bore the burden of proving that the debt had in fact been repaid. Despite the fact that the bank could only produce negative circumstantial evidence, the Court found that the burden of proof had been discharged. Notably, the Court gave weight to the robust and rigorous nature of the bank’s procedures in finding that the absence records was sufficient to show repayment had occurred.

This decision demonstrates the importance of keeping proper records, whether it be from the perspective of the bank or the customer.

Brief Facts

The Plaintiff customer had opened a number of accounts with the Defendant bank. In particular, in 1983, he opened 2 fixed deposit accounts (the 9246 account and the 9756 account). The Defendant issued to the Plaintiff a fixed deposit receipt for each account, which he then stored in a safe deposit box.

In 2012, the Plaintiff surrendered his safe deposit box and retrieved the fixed deposit receipts. While the Defendant was able to ascertain the existence and the standing credit of the 9756 account, it was unable to find any trace of the 9246 account.

The Plaintiff then commenced an action against the Defendant for the amount due under both accounts. The Defendant acknowledged its indebtedness for the 9756 account, but contested the 9246 account, submitting that it had been closed in or before 1985.

The Court thus had to determine whether the 9246 account had in fact been closed.

Holding of the High Court

The Court first considered which party bore the burden of proof, and then whether this burden had been discharged. On a balance of probabilities, the Court concluded in favour of the Defendant, finding that the 9246 account had been closed in or before 1985. The Plaintiff’s claim was thus dismissed.

Burden of proof

The Court held that the burden of proof in this case fell squarely on the Defendant.

First, the general burden of proof in the suit fell on the Defendant as it had admitted that it was indebted to the Plaintiff. This was because the Defendant accepted that the fixed deposit receipt for the 9246 account was genuine and accurately recorded the initial fixed deposit placement.

Second, the burden of specifically proving that the 9246 account had been closed also fell on the Defendant as it was the Defendant which raised this contested fact as a positive defence.

Further, whether or not the 9246 account had been closed would be especially within the knowledge of the Defendant. It would not cause any hardship to the Defendant to allocate the burden of proof accordingly, as its very business was to maintain exceedingly and exceptionally accurate records of debits and credits.

Factual analysis

The Defendant had no direct evidence that the 9246 account had been closed, nor did it have any positive circumstantial evidence of the same. Therefore, the Defendant had to rely on negative circumstantial evidence, specifically, evidence that there was no trace of the 9246 account in its records from 1984 to the present day.

The Defendant presented evidence of its systems and procedures for keeping records of fixed deposit accounts from the 1970s to the present day. This spanned from a paper system, a batch system, to the current day computerised system.

On the Defendant’s evidence, there was no trace of the 9246 account in its current central database, amongst the surviving batch system documents, in its archive of fixed deposit statements from 1985 onwards, or in the surviving records under the pre-1985 paper system. Notably, there were records of the 9756 account in the current central database, the archive of fixed deposit statements, and the paper system. This suggested that the 9246 account had in fact been closed.

The Court also commented on the probative value of the absence of records. Generally, such an absence may be evidence from which inferences can be drawn about matters not recorded. However, the probative strength depends on whether the systems and procedures for keeping the records are sufficiently rigorous and robust.

Based on the Defendant’s evidence regarding its record-keeping system, the Court looked at other possible explanations for the lack of records of the 9246 account, and found these alternatives unlikely. The Court thus inferred that the 9246 account was, on a balance of probability, closed in or before 1985.

Concluding Words

From a practical perspective, dispute resolution is largely a matter of evidence. In seeking to prove one’s case, the presence of well-kept and comprehensive records is vital. In this case, the Plaintiff customer was able to place the burden of proof on the Defendant bank because he kept the fixed deposit receipt safely for almost 30 years. Similarly, the Defendant was able to discharge its burden of proof even without direct evidence due to the rigorous and robust nature of its records system.

Apart from banks, other commercial entities should thus ensure that they maintain a proper system of records as evidence of all transactions undertaken. Such records should be kept for a reasonable amount of time before any deletion or destruction is conducted. If necessary, entities should be able to show that the record keeping procedures are strictly observed within the organisation.