GOH KING KWEE & Anor v LIU SHU MING & 2 Ors

Facts

Goh King Kwee and his wife Hon Chin Lan (the Claimants) sued Liu Shu Ming and his wife Tong Xin (the Defendants) in District Court Originating Claim No 64 of 2022. After a March 2016 presentation, the Claimants bought shares in the Defendants' company Max Property Holding Pte. Ltd. (Max Property) from Mr Liu and convertible bonds from the company. In April 2017 those shares and bonds, plus a cheque for S$88,818, were converted into the purchase of Unit 10A14 at the Fort Victoria condominium in Manila for S$256,818, which the Defendants leased back for three years under a Lease Back Guarantee signed on 21 April 2017. The Claimants said it was also orally agreed that title would be transferred on request at no additional cost.

The Defendants stopped paying rent after August 2019 and did not transfer the unit when asked in January 2020. In October 2021 Mr Liu announced a change to Unit 7A14 and began demanding transfer fees, parking fees and other charges. Max Property was struck off on or about 4 May 2020. The Claimants alleged misrepresentation over both the investment and the property deals, breach of contract and unjust enrichment. The Defendants, who appeared in person, denied misrepresentation, said the transfer was conditional on the Claimants paying the extra costs, and counterclaimed for S$73,650 in parking fees, S$13,400 in transfer fees and specific performance.

Issues

1. Whether the Defendants' statements about listing Max Property were actionable misrepresentations inducing the share and bond purchases.
2. What terms were agreed in April 2017, including the unit sold and whether extra costs had to be paid before transfer.
3. Whether either side breached the property agreements, and whether the Defendants made fraudulent misrepresentations about the property.
4. Whether the Defendants were unjustly enriched and what relief should be granted.

Holding

The court allowed the claim in part. It dismissed the misrepresentation claim over the shares and bonds and the negligent misrepresentation claims, and dismissed the Defendants' counterclaim. It upheld the claims for fraudulent misrepresentation, under s 2(1) of the Misrepresentation Act and, in the alternative, unjust enrichment over the property, and ordered the Defendants jointly and severally to pay the Claimants S$222,852 forthwith, with costs to follow written submissions.

Reasoning

On the investment, the court held that statements about listing Max Property on the Australian or Philippine exchanges were vague statements of future intention with no timeline or guarantee, applying Deutsche Bank AG v Chang Tse Wen and another [2013] 4 SLR 886, and there was no evidence that they were false or that the Defendants lacked the intention in 2016. The striking off four years later did not prove otherwise, and in any case the shares and bonds had been converted into the property at full value, so no loss flowed. The negligent misrepresentation claims failed for want of a pleaded duty of care.

On the terms, the receipt and guarantee named Unit 10A14, and there was no right to substitute another unit, which was not equivalent in value. The court found the oral no-extra-cost agreement proved: Mr Liu could not recall agreeing otherwise, fees were first raised more than four years after the sale and after the Claimants' 2020 request, and the charges shifted in kind and amount without justification. The Claimants therefore did not breach the agreements. The Defendants breached the lease back by stopping rent, since a reasonable time for monthly rent was implied and no frustration was pleaded, and breached the purchase by failing to transfer Unit 10A14.

On fraud, the developer's contract gave the Defendants no title or occupation right without payment, and they had paid only a reservation fee before selling the unit. The developer cancelled the contract and forfeited the unit by a notice dated 23 June 2017. The court found the Defendants knew they had no rights in April 2017 and that the property representations, except an alleged buy-back promise that was not proved, were false and made fraudulently. It also found they deliberately and dishonestly concealed the forfeiture until late 2021, including showing the Claimants a different unit in April 2019. Mdm Tong was found to have made the representations jointly with Mr Liu.

The Claimants' loss was the purchase price less rent received, and the same sum was recoverable for unjust enrichment on a total failure of basis. Rescission was impossible because Max Property's shares and bonds could not be returned, and specific performance was inappropriate because the Defendants never held title to Unit 10A14, so damages were awarded.

From the judgment