David Haw Wan Sin & Anor v Wendy Kwek Siang Ling & 6 Ors

Facts

The plaintiffs, a married couple of property investors, brought Suit No 867 of 2018 in the General Division of the High Court against Wendy Kwek Siang Ling, her then husband Poh Wei Leong (Joey), and several companies linked to them. Wendy ran property seminars and an investor group that the wife belonged to. In 2012 she promoted two Brazilian social housing projects, Casa Nova and Bosque, built by Ecohouse Brazil; Joey managed the joint venture marketing them in the region.

After a presentation on 30 July 2012 and emails from Wendy in August 2012, the plaintiffs paid S$230,000 into a UK escrow account for five Casa Nova units, and after a 6 October 2012 presentation, S$368,000 for eight Bosque units. Each agreement promised a 20% return within a year. Ecohouse Brazil failed to perform, even after the plaintiffs granted a 12-month extension in return for S$119,600.

The plaintiffs claimed that Wendy made four representations: that the projects were backed by the Brazilian government, that their money would stay in escrow and be released only to build their units, that extensive due diligence costing a six-figure sum had been done, and that they would earn a 20% return. They sued on several grounds, from fraud and negligence to collateral contracts, constructive trust and the Estate Agents Act. The defendants denied making the representations.

Issues

1. Whether the claims against the three defendant companies that had been struck off the Register could be sustained
2. Whether Wendy and Joey made the four representations and, if so, whether any were false and made fraudulently
3. Whether Wendy and Joey were liable in negligent misrepresentation for the representation about due diligence
4. Whether the claims on collateral contracts, knowing receipt, dishonest assistance and the Estate Agents Act could succeed

Holding

The court allowed the claim in part. Wendy and Joey were held jointly liable in negligent misrepresentation and ordered to pay the plaintiffs S$230,000 and S$368,000, the sums paid under the two agreements, with interest at 5.33% per annum from service of the writ to judgment, and costs. The claims for the promised 20% returns (S$46,000 and S$73,600), for loss of opportunity, and against the other defendants were dismissed. No costs order was made for the three struck-off companies, and the plaintiffs were ordered to pay costs to WK Investment Network Pte Ltd.

Reasoning

Three companies had been struck off and never restored, so they no longer existed and the claims against them failed.

Wendy's affidavit account of a minor role at the July presentation was found false after her admissions in cross-examination, and her own emails contained all four representations, which she repeated for Bosque. Joey was found to have been introduced as the person who did due diligence in Brazil. Only two representations were false. Government backing was not disproved, as the newspaper reports relied on were hearsay, and the 20% return was a genuine contract term. The escrow agreements, however, allowed 25% of the price to be released at once for marketing and commissions, and Wendy admitted the escrow statement was a mistake. The due diligence claim was substantially false: the six-figure sum was a lawyer's fee, funded through Anthony's company and mainly for structuring the joint venture; the claimed year of monitoring was impossible; the reports were developer-commissioned or not yet in existence; and the lawyer had no involvement in Bosque. Even so, fraud was not proved. There was no proof they acted knowingly, without belief, or recklessly.

On reliance, the plaintiffs had read and accepted the escrow terms, so they did not rely on the escrow statement, but they did rely on the due diligence statement. A duty of care arose from foreseeability, proximity and assumed responsibility. That duty was breached: Joey could not read the Portuguese documents he was shown, the developer-commissioned reports carried an obvious conflict of interest, and a Brazilian lawyer had raised doubts about land title before the Bosque presentation.

The other claims failed. The Misrepresentation Act claim needed a contract between the parties, and there was none. The collateral contracts lacked fresh consideration, and the plaintiffs had already signed the deeds of modification before the alleged promise of 8 November 2013. Knowing receipt and dishonest assistance lacked any evidence. Although Wendy and Joey were unlicensed, the plaintiffs did not show that Parliament meant s 28 of the Estate Agents Act to give a private right to sue. WK Investment Network Pte Ltd was linked only through an email domain. Damages covered actual loss only, so the promised returns were not recoverable.

From the judgment