CHAN PIK SUN v WAN HOE KEET (WEN HAOJIE) & 3 Ors

Facts

Chan Pik Sun (Sandra) joined SureWin4U in or around March 2014. The scheme sold packages promising lucrative returns from professional gamblers playing baccarat at casinos, later adding property packages in Detroit and share packages tied to a planned listing, and paid referral bonuses up a hierarchy of agents. It collapsed in September 2014 when its founders, the brothers Peter and Philip Ong, could not be contacted. She lost millions of dollars in it.

In Suit No 806 of 2018 she sued three earlier participants who had been her uplines, Wan Hoe Keet (Ken), his wife Ho Sally, and Sally's brother Ho Hao Tian Sebastian, together with Strategic Wealth Consultancy Pte Ltd (formerly SW4U Consultancy Pte Ltd), the company Ken and Sally used to hold their scheme earnings and a yacht. She claimed fraudulent, negligent and innocent misrepresentation and unlawful and lawful means conspiracy. Her core case was that the defendants represented the scheme as "safe and profitable", meaning legitimate and not a scam, and made representations about the property and share packages and about grooming her to become Hong Kong's top representative. She relied also on Ken and Sally's 2018 meeting with Peter Ong in Macau and on the defendants having changed phones around 2015 without keeping their messages.

Issues

1. Whether SureWin4U was a Ponzi scheme
2. Whether the defendants made actionable false representations that induced Sandra to invest
3. Whether the defendants conspired with SureWin4U or the Ong brothers to injure her
4. Whether the defendants owed her a duty of care, and whether innocent misrepresentation was made out

Holding

The court dismissed all of Sandra's claims, including those she had earlier withdrawn, and awarded the defendants costs to be assessed if not agreed.

Reasoning

The court found SureWin4U was a Ponzi scheme. Its betting formulas, which raised the stake after each loss, could at best make baccarat an even game; a small chance of a very large loss offset many small wins, so no formula could give it a winning edge, and returns came from participants' own money.

What Ken and Sally said as fellow participants was opinion about their positive experience, not a statement of fact that the scheme was legitimate. Sandra understood "safe" to refer to the promised refund if she could disprove the 99.8% formula, and she relied on the scheme's promised returns, brochures and gambling classes. The property, share and top-agent statements were promises or predictions, not facts, and the court found the top-agent statement was never made. Ken and Sally were associated with an exaggerated earnings figure that SureWin4U presented, but this made no difference to her decisions. Her conduct after the collapse confirmed she had not relied on them: she wrote "It's OK, I knew the risk", stayed at their home, joined a casino attempt using their capital, and later blamed herself.

Failure of reliance defeated both conspiracy claims. No agreement was proved: the 2018 Macau photographs were used by Peter Ong to promote a new scheme, but the court accepted that Ken and Sally did not take part in it. The court found the three phone changes too coincidental and probably deliberate, but drew no adverse inference because Sandra's case was otherwise unproven and the inference could not fill that gap. Ken, Sally and Sebastian came across as simple rather than cunning, and did not believe the scheme was a Ponzi scheme. Profit-seeking is not a predominant intention to injure.

No duty of care arose between fellow participants who had the same information and were each invited to test the formulas. The innocent misrepresentation claim was never explained.

From the judgment