Trio ordered to repay pawnshop $275,000

Maxi-Cash had mistakenly overcompensated them after employee stole pawned gold bars

Three gold investors who received an unexpected $275,000 windfall, after a pawnshop employee made off with gold bars they had pawned, have been ordered by the High Court to repay the money.

The trio had bought five gold bars at $95,000 apiece from the now- defunct firm, Genneva, in June 2012. The firm ran a gold buyback scheme and was put on the Monetary Authority of Singapore's investor alert list before it collapsed.

A day after buying the 1kg bars, Ms Chen Qiaodong, Mr Keok Su Seng and Ms Belinda Ho Geok Eng pledged them at the Maxi-Cash outlet in Northpoint Shopping Centre to get a loan of $275,000, or $55,000 per bar.

Five days later, a Maxi-Cash employee misappropriated the gold bars to repay his gambling debts.

When the trio found out, they demanded compensation from the pawnbroking chain. In July 2012, the parties signed agreements for Maxi-Cash to pay the trio $95,000 per gold bar- a total of $475,000.


I can think of no reason why the defendants could honestly claim that the plaintiff would effectively pay a further $55,000 on top of the replacement cost of $95,000 for each gold bar.

JUDICIAL COMMISSIONER EDMUND LEOW, on why he finds that Maxi-Cash's mistake is a genuine one

Six months later, the pawnbroker realised that it had overlooked the outstanding loan, which meant that it had effectively paid out $150,000 per gold bar.

When the three refused its demand for repayment, Maxi-Cash sued them.

Last week, Judicial Commissioner Edmund Leow ruled in favour of Maxi-Cash and ordered the trio to repay the loan, with interest.

He rejected the defendants' contention that Maxi-Cash had waived the loan in the agreements, calling the claim "a belated and spurious concoction". He noted that, at a meeting with Maxi-Cash representatives after the pawnbroker realised its mistake, the trio objected to repaying the loan but did not bring up a waiver as the reason.

He accepted the arguments of Maxi-Cash's lawyer, Mr Wendell Wong, that the agreements covered only compensation, not the loan, because the pawnbroker had forgotten about it completely. It may seem hard to believe that Maxi-Cash would make such a mistake, said the judicial commissioner, but its internal documents indicate that it had provided for $95,000 per gold bar.

He also noted the "chaotic" climate of the compensation negotiations - the defendants had created a stir at a Maxi-Cash shop and the newly listed pawnbroker did not want this to affect its business.

He found that "although the plaintiff's mistake may have been extremely careless, it was nevertheless a genuine mistake".

"I can think of no reason why the defendants could honestly claim that the plaintiff would effectively pay a further $55,000 on top of the replacement cost of $95,000 for each gold bar," he said. He added that the market rate was then $63,500 per bar.

He noted that the trio were not simple folk pawning possessions for daily expenses, but were taking advantage of Maxi-Cash to maximise returns from the gold investment scheme, which promised a rate of return of 18 per cent in six months.

A version of this article appeared in the print edition of The Straits Times on September 05, 2015, with the headline 'Trio ordered to repay pawnshop $275,000'. Print Edition | Subscribe