Bay Lim Piang v Lye Cher Kang

Facts

Mr Bay Lim Piang, a retired quantity surveyor, had known Mr Lye Cher Kang (Alan) since 2001 through Alan's aluminium works company. Between 2012 and June 2014 Alan told Bay that Alan had helped a Mr Don Brendan Robert try to free an inheritance of about US$45m which, together with US$5m of Alan's own money, had supposedly been seized by the Commercial Affairs Department, and that various fees had to be paid to banks and authorities to release it. Bay claimed he made more than 200 loans totalling around S$2.6m. Alan signed documents dated 13 September 2012 and 27 July 2014 acknowledging loans from Bay. Brendan later pleaded guilty to 25 charges of cheating and was sentenced to 7 years' imprisonment.

In Suit No 528 of 2020 Bay sued Alan for S$2,604,070.60, claiming fraudulent misrepresentation and, in the alternative, misrepresentation under s 2(1) of the Misrepresentation Act, negligent misrepresentation and breach of the 27 July 2014 agreement. Alan's defence was that he too had been defrauded by Brendan and had only passed on Brendan's statements. Kwek Mean Luck J heard the trial; Alan has appealed.

Issues

1. Whether Alan adopted the false representations as his own or was merely a mouthpiece for Brendan.
2. Whether Alan made the representations knowing they were false or without genuine belief in them, so as to be liable in fraud.
3. Whether Alan was liable under s 2(1) of the Misrepresentation Act and in negligence.
4. Whether the 27 July 2014 agreement was enforceable, in particular whether Bay's forbearance to sue was consideration requested by Alan.

Holding

The court allowed Bay's claim in part. It found Alan liable for fraudulent misrepresentation, under s 2(1) of the Misrepresentation Act and for negligent misrepresentation, entitling Bay to rescission of the loans or damages of S$2,604,070.60, with interest at 5.33% per annum from service of the writ to judgment. The claim for interest expenses on Bay's own borrowings was refused as unproven, and the claim on the 27 July 2014 agreement failed for want of consideration. Bay was awarded costs of S$165,000 plus disbursements of S$34,168.25.

Reasoning

Alan did not dispute that false representations were made, and admitted conveying them. The judge found that he adopted them as his own. He stood to gain either way: the documents he produced did not account for a substantial part of the money, and the judge found it more likely he kept it. His text messages described his own presence at meetings with bankers and lawyers, he signed two acknowledgements that the loans were to release his own seized money, and he had told police Brendan was his "money partner".

On fraud, applying Panatron Pte Ltd and another v Lee Cheow Lee and another [2001] 2 SLR(R) 435, the judge held the representations were made without genuine belief. Alan said a law firm had opened the account for Bay's payments when it was his own account, described meetings that never happened, never checked anything despite his own supposed stake, and was not a credible witness, for instance claiming he met a fake Mr Chua and fake lawyers. Brendan's admitted statement of facts in the criminal case did not bind the court here.

The individual loans were contracts entered into after misrepresentations, so the statutory claim succeeded, as Alan had no reasonable grounds for belief. Under the Spandeck test, loss was foreseeable and Alan assumed responsibility by telling Bay of a supposed non-disclosure agreement that kept him from checking with others; Alan had not shown he was himself a victim, so there was no policy bar. On the 27 July 2014 agreement, it was not a sham, but there was no express or implied request by Alan for Bay to hold off suing, so under Gay Choon Ing v Loh Sze Ti Terence Peter and another appeal [2009] 2 SLR(R) 332 there was no consideration.

From the judgment