Loan or donation? Court orders temple to return $1 million to ex-chairman

SINGAPORE - A Taoist temple has been ordered to repay more than $1 million to its former chairman after the High Court rejected its argument that the money had been given to the temple as a donation.

The former chairman, Mr Richard Lim Swee Joo, had sued the temple, Nan Bei Dou Mu Gong, to recover the money.

He said the sums he contributed from 2016 to 2018, totalling $1,011,295.95, were not donations, but loans to start up the temple and to fund the events it organised.

In a written judgment on Feb 5, Senior Judge Chan Seng Onn ruled in Mr Lim’s favour.

Justice Chan said he was persuaded, based on the documentary evidence and oral testimony presented in court, that the sums of money were given to the temple as loans, rather than as gifts or donations.

However, the judge dismissed Mr Lim’s claim against the second defendant, Mr Eric Goh Joo Heng, a committee member of the temple.

The judge rejected Mr Lim’s contention that Mr Goh was personally liable for the sum because the two of them had made an oral agreement.

The two had been introduced by a mutual friend. Mr Lim’s father founded a temple in the 1950s, while Mr Goh has years of experience running various temples.

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Mr Goh proposed setting up a temple to celebrate the Kew Ong Yah festival, featuring deities known as the Nine Emperor Gods.

Mr Lim said that at a meeting held at a coffee shop in Ang Mo Kio in 2016, he agreed to extend loans to set up the temple and organise its events.

He said a general understanding was reached that whatever sum he loaned would be repaid from donations received by the temple, as long as the temple has money.

The various amounts contributed by Mr Lim were recorded in a document described as “transaction details”.

The total sum was also acknowledged as a loan during the temple’s annual general meeting (AGM) on Dec 6, 2018, where it was agreed that the money owed would be repaid with future collections.

In one of the temple’s audited financial statements, a sum of $607,336 was described as a loan to enable the temple “to meet its obligation on a timely basis and to ultimately attain successfully profitable operations”.

Mr Lim, who was represented by Mr Jenson Lee of JL Law Chambers, started legal action when the temple failed to repay the sum.

He argued that the temple’s committee members had ratified the loan by signing on various documents, including the transaction details and the loan acknowledgement, during the AGM.

But the temple argued that the documents were not meant to have legal effect. It claimed that the documents were prepared merely to help Mr Lim placate his wife, who was unhappy with his generous donations to the temple.

In his judgment, Justice Chan rejected the explanation that the documents had been signed only to placate Mr Lim’s wife.

The judge noted that several of the temple’s witnesses had stated in their affidavits that during the AGM, Mr Lim had asked for a signed acknowledgement to placate his wife.

But in court, these witnesses said he did not make the request.

Justice Chan said the fact that the witnesses made the same about-face under cross-examination on a critical point led him to question the veracity of the temple’s claim.

He added that it was “no insignificant matter” for the committee members to sign the documents as it would have exposed the temple to a liability of more than $1 million.

Basic prudence would have called for at least a written acknowledgement from Mr Lim indicating that he would not make a legal claim for the money.

The fact that there was no such written acknowledgement weighs heavily against the temple’s case, said the judge.

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This article was first published in The Straits Times. Permission required for reproduction.