Skip to content
laws.sgby aturio
Grounds publishedDecided 10 Jan 2022
Contents

Court of Appeal

Esben Finance Ltd and others v Wong Hou-Lianq Neil

Feedback & support

[2022] SGCA(I) 1Case no. Civil Appeal No 3 of 2021

What happened, in plain English

There is no plain-English summary of this judgment yet.

Ask about this judgment

Laws this judgment relies on

Grounds of decision

Official text from eLitigation

  1. Introduction

  2. [1] This is an appeal against the decision of the International Judge (“the Judge”) in Esben Finance Ltd and others v Wong Hou-Lianq Neil [2021] 3 SLR 82 (“the Judgment”). As we shall see, although the present appeal concerns claims made in respect of payments made in the distant past, it nevertheless engages issues of law that remain open for resolution in the present. Thus, what appears at first blush to be a withered claim may yet bear fresh leaves in the context of the present case.

  3. The parties to the dispute

  4. [2] The appellants are two companies incorporated in the British Virgin Islands (“BVI”), viz, Esben Finance Limited (“Esben”) and Incredible Power Limited (“Incredible Power”), and two companies incorporated in the Republic of Liberia, viz, Rayley Co Limited (“Rayley”) and Lismore Trading Company Ltd (“Lismore”) (collectively, the “appellants”). The appellants were related to the WTK Group of companies (“WTK Group”) founded by a Malaysian businessman, the late Datuk Wong Tuong Kwang (“WTK”). The appellants were administered by Double Ace Trading Co (Pte) Ltd (“Double Ace”) in Singapore. One of Double Ace’s employees, Richard Tiang (“Tiang”), was responsible for the appellants’ book-keeping.

  5. [3] The respondent, Neil Wong Hou-Lianq, was WTK’s grandson, being the son of WTK’s son, Wong Kie Nai (“WKN”). WTK had two other sons, Wong Kie Yik (“WKY”) and Wong Kie Chie (“WKC”).

  6. Background to the dispute

  7. [4] From 1993, WTK handed over responsibility for the overall management and control of the WTK Group and the appellants to his sons, WKN, WKY and WKC, although the precise role played by each of them in the WTK Group is disputed. They were also directors and shareholders of Double Ace. According to the appellants, WKN was the leading spirit among the three brothers. It was he who handled the day-to-day management of a number of the Malaysian companies in the WTK Group, including Elite Honour Sdn Bhd, Ocarina Development Sdn Bhd, Sunrise Megaway Sdn Bhd, Harvard Rank Sdn Bhd, Faedah Mulia Sdn Bhd and WTK Management Services Sdn Bhd (“WTK Management”) (which provided administrative services to the Malaysian companies in the WTK Group). WKN was also in charge of the day-to-day management, affairs and business of, and exercised complete control over, the appellants. Despite WKY being the eldest of the three brothers, WKN became, in effect, the patriarch of the Wong family and did not tolerate any interference in the appellants’ affairs.

  8. [5] On 11 March 2013, WKN passed away, survived by his widow, Kathryn Ma Wai Fong (“Mdm Ma”) and two children, one of whom is the respondent. Upon WKN’s death, effective control of the WTK Group and the appellants passed to WKY and WKC. According to the appellants, this was when WKY noticed that the balances of the appellants’ bank accounts were lower than expected. He then instructed Janice Ting Soon Eng (“Ms Ting”), a senior employee of WTK Management, to make inquiries with Tiang. These inquiries were eventually made with Tiang about a year later, in March 2014. Tiang revealed that over a period of some 11 years between January 2001 and November 2012, WKN had instructed that some 50 payments (“the 50 payments”) be made from the appellants’ bank accounts to the respondent without the knowledge of WKY and WKC. The payments shall be referred to hereafter as “payment No 1”, “payment No 2”, and so on. The 50 payments amounted, in total, to US$20,278,565.41 and S$4,473,100.52. Significantly, the telegraphic transfer (“TT”) forms for some of the 50 payments bore WKY’s own signature.

  9. [6] Tiang further claimed that in April 2012, he had been instructed by WKN to destroy the documents of all the offshore companies related to the WTK Group, including the appellants, but Tiang only carried out the destruction of the aforesaid documents in September 2014.

  10. [7] After some considerable delay, on 21 April 2016, the appellants (excluding Esben, which had by then been struck off the register) demanded that the respondent repay the monies that had been remitted to him from their bank accounts (in respect of the 50 payments). However, the respondent refused. After some further delay, the appellants then commenced legal action to recover the 50 payments from him by a writ of summons dated 20 November 2017.

  11. [8] It is noteworthy that Tiang had, in February 2019, pleaded guilty to and been convicted of some 15 criminal charges, with a further 54 charges taken into consideration for the purpose of sentencing, for dishonestly misappropriating some S$46.2m of the appellants’ monies over an extended period of time. Not all of the appellants’ documents were destroyed by Tiang. Some of them, relating to the appellants’ business of trading logs and documenting their transactions with Malaysian logging companies within the WTK Group and other logging companies for the sale of logs, were seized and preserved by the Commercial Affairs Department (“CAD”) in connection with the investigations into, prosecution and subsequent conviction of Tiang for dishonest appropriation (“the CAD Documents”). These were returned to Double Ace in June 2016.

  12. [9] Before the Judge, the respondent did not dispute that he had received all 50 payments. According to him, the 50 payments consisted of the following.

  13. (a) 11 payments were “gifts” from WKN;

  14. (b) Three payments were directors’ fees and shareholder dividends to which he was entitled and/or gifts from WKN; and

  15. (c) The remaining 36 payments were made in connection with an alleged “practice” by which companies in the WTK Group, including the appellants, entered into “split fee” arrangements which permitted their taxable revenues to be split into “onshore” and “offshore” components, the latter of which would not be declared to the Malaysian tax authorities, thereby effectively evading Malaysian tax and which was illegal under Malaysian law.

  16. [10] Before the Judge, the respondent argued that there was no wrongdoing on his part or on WKN’s part with regard to the 50 payments. Further, both WKY and WKC had actual knowledge, or ought to have had actual knowledge, of most if not all of the payments when they were made. The appellants’ claims for the payments were therefore time-barred under s 6 of the Limitation Act (Cap 163, 1996 Rev Ed) (“Limitation Act”), or, alternatively, barred by the doctrine of laches and/or acquiescence.

  17. Decision below

  18. The unsatisfactory state of the evidence

  19. [11] The Judge began with observations on the unsatisfactory state of the evidence at trial. He observed that the earliest of the 50 payments was made over 20 years ago, and that this made it “difficult, if not impossible” for the respondent to recollect the exact true purpose for the payments, which explained the shifts in his pleaded Defence (see the Judgment at [63]). The Judge also noted that the documentary record for the 50 payments was unsatisfactory because the appellants had no proper accounting system and did not prepare any trial balances, financial statements, monthly management accounts or year-end accounts (see the Judgment at [66]). The Judge found that the respondent was not to blame for these deficiencies in documentation (see the Judgment at [67]).

  20. [12] The Judge also found that Tiang’s assertion that WKN had instructed him to destroy a large number of the appellants’ documents was doubtful, given that Tiang had his own motives for doing so. Tiang was a “convicted fraudster on a massive scale” who was guilty of misappropriating the appellants’ funds (see the Judgment at [42]). In addition, Tiang only destroyed some of the appellants’ documents some 18 months after WKN’s death, which contradicted Tiang’s version of events, namely, that he had been instructed by WKN to destroy all of the appellants’ documents (see the Judgment at [70]–[71]).

  21. [14] Apart from the destroyed documents and the CAD Documents, there was also the possibility that some of the appellants’ documents were stored in steel cabinets in WKN’s offices in WTK Management’s premises in Sibu, Malaysia. However, Mdm Ma had arranged for these steel cabinets to be removed and there was no trace of the documents (if any) therein or any indication of what they were. The Judge, however, doubted the relevance of such documents (if any) to the dispute since the appellants were administered by Double Ace in Singapore (see the Judgment at [73]).

  22. The issue of time-bar and/or laches

  23. [15] The Judge next turned to consider whether and to what extent the appellants’ claims were time-barred, observing that while the defence of time-bar was raised only at a late stage in the course of the trial, it could be justified on a close reading of the Defence and thus had been sufficiently pleaded (see the Judgment at [107]). On the issue of when the applicable limitation period of six years, as provided for in s 6 of the Limitation Act, would start to run, the Judge proceeded on the assumption that ss 29(1)(a) and 29(1)(b) of the Limitation Act applied (see the Judgment at [108]). These provisions read as follows:

  24. [16] The effect of the above provisions was that the six-year limitation period applicable to claims in unjust enrichment under ss 6(1) read with 6(7) of the Limitation Act ran only from such time as the appellants “discovered the fraud”, namely, the making of each of the 50 payments, or “could with reasonable diligence have discovered” the said payments. For this purpose, the Judge was of the view that it was WKY whose knowledge or reasonable diligence was relevant. This was because:

  25. (a) WKN’s knowledge and reasonable diligence was not relevant as he was (assuming that the making of the payments was fraudulent) the party perpetrating said fraud. The same could be said for Tiang (see the Judgment at [110]); and

  26. (b) The parties had proceeded on the basis that it was WKY’s knowledge and reasonable diligence that was relevant (see the Judgment at [110]).

  27. [17] In the Judge’s view, “reasonable diligence” did not mean the doing of everything possible, but the doing of that which, under ordinary circumstances and with regard to the relevant expense and difficulty, could be reasonably required (see the Judgment at [115]). Here, under BVI and Liberian law, WKY and WKC, as directors of Esben and Lismore, had the right to inspect and access the companies’ records but did not have a clear duty to do so. In so far as Incredible Power and Rayley were concerned, the Judge found that WKY and WKC were not de facto or “shadow” directors of those companies as there was little to no evidence that they exercised real influence in the governance of the same (see the Judgment at [114]).

  28. [18] The Judge then considered whether WKY could, with reasonable diligence, have discovered the various payments when they were made. He was of the view that WKY could have done so. This was because:

  29. (a) WKY’s explanation as to why he did not enquire about the 50 payments was that he thought that WKN would be unhappy about it. He was, however, unable to explain the reason for such belief. The Judge observed that WKY was not an inexperienced or timid individual. He was a Chartered Certified Accountant and a former Senator of Malaysia holding the title of “Permanca”. He was also the Chairman of the Sarawak Timber Association. The Judge also found that, having heard WKY give evidence, he was “very well able to make appropriate enquiries if he wanted to do so” (see the Judgment at [123(a)]).

  30. (b) WKY had also claimed that WKN had told him not to interfere in the appellants’ business and did not allow him access to the appellants’ records, and that WKN would have been angry with him if he had asked questions. This, however, contradicted WKY’s previous position that he trusted WKN, and his own acknowledgment that the relationship between the three sons of WTK was “very good” and “close” (see the Judgment at [123(f)]).

  31. (c) Although the Judge accepted that WKY had the practice of signing TT forms in blank from time to time, there was at least one instance in which he was aware of some payments being made by the appellants to the respondent personally, namely, the two payments, Nos 48 and 49. The Judge accepted the evidence of Helen Loh Leh Fong (“Ms Loh”), a senior employee of WTK Management, that a statement of account dated 31 August 2011 recording these payments bore a handwritten annotation stating that money was to be transferred “7/10/11 to Neil Wong Accounts”, and that the said statement of account, bearing the abovementioned handwritten annotation, had been signed by WKY himself without his asking any questions (see the Judgment at [123(c)]). It was impossible to say, however, even on a balance of probabilities, whether the 25 TT forms signed by WKY and which were relevant to the 50 payments in issue in the present case did or did not bear the respondent’s name when WKY signed them (see the Judgment at [123(d)]).

  32. (d) WKY accepted that he was very interested in the appellants’ business and that he could have asked Tiang about the reason for the payments, and that had he done so, Tiang would have been obliged to explain why payments had been made to the respondent personally (see the Judgment at [123(e)]).

  33. (e) In March 2011, WKN went to Australia to receive medical treatment. On the evidence of Mdm Ma and Ms Ting, in early 2011, WKN had instructed his staff to report to and take instructions from WKY (see the Judgment at [123(j)]). It “beggared belief” that in WKN’s absence, WKY did not take up the reins or avail himself of the opportunity to look at the appellants’ records, given that he was very interested in their business (see the Judgment at [123(h)]).

  34. (f) WKY had also signed various documents of the appellants (for example, sales invoices, payment vouchers, cheques and financial statements up to 2012). While these did not refer to the 50 payments, they showed that WKY was directly involved to some extent in the business operations of the appellants and that he could, with reasonable diligence, have accessed the appellants’ records and discovered the payments to the respondent (see the Judgment at [123(i)]).

  35. (g) WKY’s inaction after WKN’s death in March 2013 reflected a “remarkable indifference to the [appellants’] business operations” which he could not justify simply on the basis of his “constant mantra” that he left everything to WKN because he trusted or did not want to quarrel with WKN (see the Judgment at [123(k)]).

  36. Thus, the Judge held that all of the appellants’ claims in unjust enrichment save in respect of payment No 50 were time-barred (see the Judgment at [128]).

  37. The unjust enrichment claim

  38. [19] The Judge next considered the merits of the unjust enrichment claim, assuming that none of the claims in respect of the 50 payments was time-barred. He observed that it was undisputed that WKN had caused the appellants to make the 50 payments to the respondent personally (see the Judgment at [137]) and that WKN had, under BVI and Liberian law, a duty to act in the best interests of the appellants, to exercise his powers for a proper purpose in accordance with the appellants’ memorandum and articles of association, to act honestly, bona fide and in good faith for the appellants, to exercise due care, diligence and skill, and to disclose any breaches of the above to the appellants (see the Judgment at [135]). WKN did not have carte blanche to act as he liked (see the Judgment at [136]).

  39. [20] The Judge also observed that the legal burden of proving that the 50 payments were unjust rested on the appellants throughout and that this burden had been prima facie satisfied by the fact that payments had been made to the respondent’s personal bank accounts in circumstances where it was undisputed that the appellants were in the business of trading in timber and the respondent did not personally supply timber or provide services in relation thereto (see the Judgment at [140]). The evidential burden therefore shifted to the respondent to satisfactorily explain the payments and show why they were not unjust (see the Judgment at [141]).

  40. The 11 payments

  41. [21] The Judge took the view that the respondent had not discharged the evidential burden of proving that the 11 payments were gifts from WKN as there was simply no, or insufficient, evidence to support that assertion (see the Judgment at [148]). But for the time-bar, the appellants would have been entitled to recover these payments from the respondent on the basis of unjust enrichment – specifically, on the basis of the “unjust factor” of the appellants’ lack of consent to the payments, which the Judge “readily accepted” was an unjust factor (see the Judgment at [133(e)(i)], [133(e)(iv)] and [134]). This is a point of considerable importance which we will discuss in more detail below.

  42. The three payments

  43. [22] In so far as the three payments were alleged to be “gifts” from WKN, the Judge found that there was, as with the 11 payments, no evidence that they were (see the Judgment at [153]). In so far as they were asserted to have been made in respect of directors’ fees and shareholder dividends to which the respondent was entitled, the Judge found as follows:

  44. (a) Payment No 3, dated 3 July 2002, which was for the sum of US$50,000 from Esben, was described in handwritten form on the TT form as being directors’ fees for 2001. The respondent’s case was that this sum was paid to him in respect of his directorships in Malaysian companies in the WTK Group. This was prima facie evidence that the payment was indeed for directors’ fees. However, the Judge accepted the evidence of the appellant’s forensic accounting expert, Mr Andrew Heng of Ferrier Hodgson MH Sdn Bhd (“Mr Heng”), that the financial statements of the 11 Malaysian companies of which the respondent was director did not disclose any dividend paid to him in the amount of US$50,000 (see the Judgment at [158]).

  45. (b) Payment No 16, dated 8 August 2005, was for a sum of US$263,852 from Lismore. The TT form carried a typewritten annotation, “DR [Debit] JATI BAHAGIA SDN BHD”. The respondent’s case was that he was a shareholder of Jati Bahagia Sdn Bhd in August 2005 and that the payment was made by Lismore on behalf of Jati Bahagia as shareholder dividends due to him. The Judge found that the respondent was unable to furnish sufficient evidence to support a prima facie case that the payment concerned shareholder dividends, since the annotation did not assist in that particular regard (see the Judgment at [162]–[163]).

  46. (c) Payment No 38, dated 28 July 2008, was for a sum of US$179,456 from Esben. The TT form bore a typewritten annotation referring to “WTK TRADING”, “KAULULONG” and “WTK SHARES”. The respondent’s case was that he was a director and shareholder of WTK Trading Sdn Bhd (“WTK Trading”) and Syarikat Kaululong Sdn Bhd (“Syarikat”) in July 2008 and that the payment was made by Esben on behalf of those companies as directors’ fees and/or shareholder dividends (see the Judgment at [168]). However, the Judge found that there was no or insufficient evidence to support that particular case (see the Judgment at [169]). The Judge accepted Mr Heng’s evidence that the financial statements of WTK Trading showed that it had paid dividends in 2006 and 2007 but not in 2008, and that it had paid directors’ fees from 2006 to 2008 in full; and that the financial statements of Syarikat showed that it did not pay any dividends in 2006 to 2008 as well as that it had paid directors’ fees in full from 2006 to 2008 (see the Judgment at [170]). This contradicted the respondent’s case.

  47. [23] In the circumstances, the Judge was of the view that the respondent had not discharged his evidential burden of proving that the three payments had been made for legitimate purposes, as such evidence as there was pointed to the contrary. But for the time-bar, the appellants would have been entitled to recover the three payments (see the Judgment at [171]).

  48. The remaining 36 payments

  49. [24] The remaining 36 payments were made in connection with an alleged “practice” by which companies in the WTK Group, including the appellants, entered into “split fee” arrangements which permitted their taxable revenues to be split into “onshore” and “offshore” components. This was done for the purpose of evading Malaysian tax, which was conduct unlawful by the laws of Malaysia (see the Judgment at [217]).

  50. [25] The “practice” involved companies in the WTK Group and/or controlled by the respondent which were engaged in the timber logging business (“the Logging Companies”), and the appellants. The Logging Companies included Golden Cash Harvest Sdn Bhd (“GCH”) and the companies mentioned at [4] above. Essentially, the Logging Companies routed their sales of timber logs through the appellants such that the appellants ended up holding the revenue received from the end buyers of the timber logs. The Judge found that this was done in the following manner (which the Judge accepted was a “fair summary” of the evidence) (see the Judgment at [209]):

  51. (a) Instead of transmitting the full sale price for the sale of the Logging Companies’ timber logs back to the Logging Companies, the appellants “retained some revenue” and “paid part” of the logging fees and expenses “offshore”. The remaining logging fees and expenses would be paid by the Logging Companies “onshore” (ie, in Malaysia). This splitting of the logging fees and expenses into “onshore” and “offshore” components, respectively, resulted in lower income and consequently lower taxes payable in Malaysia, as the “offshore” fees were “deliberately kept off the books of the onshore companies” and were not reported for Malaysian tax purposes.

  52. (b) It was WKN who proposed the “onshore-offshore” payment structure for the services that the respondent’s companies provided to the Malaysian companies in the WTK Group, as well as the “directors’ fees and/or dividends” for the respondent’s directorships and shareholdings in WTK Group companies. Mdm Ma and the respondent both agreed with this arrangement.

  53. (c) In furtherance of and/or pursuant to the said arrangement, the appellants made the 36 payments, which were payments for the “offshore” components made in respect of services which the respondent’s companies provided to the Malaysian companies in the WTK Group and his “directors’ fees and/or dividends”, to the respondent’s bank account in Singapore.

  54. [26] In making the above findings, the Judge accepted the evidence of three witnesses, namely Mr Hii Siik Kiong (“Mr Hii”), the general manager of GCH, Mr Ling Thien Kwong (“Mr Ling”), the senior accounts supervisor of GCH, and Mr Ling Heu Chong (a Log Pond Supervisor employed by Harvard Rank), all of whom he regarded as honest (see the Judgment at [179(e)]). In his view, Mr Hii and Mr Ling in particular gave “detailed and straightforward” evidence and were “plainly honest witnesses who were doing their best to explain the practice” (see the Judgment at [179(c)]; see also [186] and [192] of the Judgment). Their evidence in favour of the existence of the “practice” outweighed any adverse inference which might be drawn against the respondent for failing to give evidence (see the Judgment at [179(e)], [186] and [192]).

  55. [27] The Judge thus concluded that in any event and even apart from the time bar, the appellants would not be entitled to recover the 36 payments on the basis of unjust enrichment, subject to the issue of illegality.

  56. The illegality issue

  57. [28] The Judge considered, in so far as the 36 payments were concerned, the appellants’ argument that, even if the respondent could make out his case that the payments had been made to him pursuant to the “practice”, this was an arrangement which was illegal under Malaysian law and which therefore vitiated the defence to the unjust enrichment claim (see the Judgment at [206]). The Judge accepted that Mdm Ma and the respondent “both fully understood all along” the implications of the “practice”, ie, that the “deliberate and intended purpose” of the “practice” was to evade tax in Malaysia. In so far as Mdm Ma was concerned, the Judge noted that she had no explanation as to why the “offshore” component was deliberately kept off the books and her silence betrayed the fact that she well knew that the object of the “practice” was to evade the payment of taxes on the “offshore” component (see the Judgment at [213]).

  58. [29] In so far as the respondent was concerned, the Judge drew an adverse inference against him to the effect that he knew that the true purpose of the “practice” was to evade Malaysian tax, on the basis of his refusal to give evidence, since it was possible that this “was driven by a reluctance to being pressed with questions on this topic and to the risk of having to admit in open court that this was the case”, though the Judge recognised that this was speculative (see the Judgment at [214]).

  59. [30] The Judge therefore accepted the appellants’ submission that the “practice” was entered into, and the 36 payments were made and performed, with the deliberate intention by the respondent of evading taxes in Malaysia, which was conduct unlawful by the laws of Malaysia (see the Judgment at [217]). The Judge next turned to consider the appellants’ case that, as the respondent’s defence to the unjust enrichment claim was tainted by such illegality, he was precluded from relying on, and the court should not recognise or allow him to rely on, the said defence (see the Judgment at [218]); this particular argument was premised on the principles set out in two cases (see the English Court of Appeal decisions in Foster v Driscoll [1929] 1 KB 470 (“Foster v Driscoll”) and Ralli Brothers v Compañia Naviera Sota y Aznar [1920] 2 KB 287 (“Ralli Brothers”) (see the Judgment at [219])), as well as the maxim ex dolo malo non oritur action (ie, that no right of action can have its origins in fraud) (“the ex dolo malo maxim”). The Judge was of the view that neither principle applied (see the Judgment at [233] and [236]). In so far as the ex dolo malo maxim was concerned, the appellants’ case in that regard was “no more than a rehash of their submissions based on the Foster v Driscoll principle” and therefore likewise did not succeed. Moreover, in his view, the maxim did not apply as the illegality was not a relevant “wrong” between the appellants and the respondent (see the Judgment at [238]).

  60. The other claims

  61. [31] The Judge then dealt briefly with the appellants’ alternative claim based on dishonest assistance, knowing receipt and unlawful means conspiracy. He accepted that WKN owed fiduciary duties to the appellants. However, the appellants did not satisfy the legal and evidential burden on them with regard to the other elements of the dishonest assistance claim, in particular, that the 50 payments had not been shown to have been in the appellants’ interests or that the respondent assisted WKN’s breach of his fiduciary duties, still less that he had been dishonest in so doing (see the Judgment at [197]). As regards the 11 payments and the 3 payments which the Judge had already found appeared to have been made without legitimate basis, the Judge emphasised that it was important not to reverse the burden of proof (see the Judgment at [199]). Whilst a prima facie case had been made out with regard to the claim in unjust enrichment, this was not the case for the dishonest assistance claim. The same reasoning applied to the claim in knowing receipt (see the Judgment at [203]) and unlawful means conspiracy (see the Judgment at [205]).

  62. [32] For the above reasons, the Judge held that all of the appellants’ claims failed (see the Judgment at [240]).

  63. The parties’ cases

  64. Appellants’ case

  65. [34] The appellants further contend that the Judge had erred in finding that their claim in unjust enrichment for the 36 payments failed. First, the court’s finding that the 36 payments were made pursuant to the “practice” as set out in Mdm Ma’s second affidavit of evidence-in-chief (“AEIC”) was based on an unpleaded case. Second, the respondent’s defence of the “practice” only emerged belatedly. Third, the evidence that the respondent sought to rely on did not show that such a “practice” existed. In this regard, the CAD Documents should not have been admitted into evidence, and in any event did not support the respondent’s account of the “practice”. Finally, the appellants challenge various findings of fact made by the Judge in relation to the 36 payments, and contend that the respondent had not discharged his evidential burden of showing that the payments had been made for the reasons pleaded.

  66. [35] The appellants argue that even if the respondent could make out his case that the 36 payments had been made for the reasons pleaded, these reasons cannot afford him a defence as it should be barred on the basis of illegality. The defence is premised on an arrangement that involved illegal acts under Malaysian law, and pursuant to the principle in Foster v Driscoll, the Singapore courts should not recognise such an arrangement. The appellants also contend that allowing the respondent to rely on the said “practice” would be contrary to the principle in Ralli Brothers, as well as the principle that a person cannot rely on or profit from his or her own wrong.

  67. [36] Finally, the appellants contend that the Judge had erred in finding that their claims for dishonest assistance, knowing receipt and unlawful means conspiracy failed.

  68. Respondent’s case

  69. [37] In response, the respondent argues that the appellants’ claims are time-barred. There is no requirement under s 29 of the Limitation Act that a claimant must first be put on inquiry of a possible fraud; but even if the appellants’ proposed test applied, WKY had been put on inquiry and could have discovered the payments with reasonable diligence. Thus, the limitation period could not be extended. In respect of the appellants’ claim in unjust enrichment, the respondent contends that it is statutorily time-barred under the Limitation Act; even if no statutory time bar applies, it should be barred by the doctrine of laches.

  70. [38] The respondent submits that the appellants’ claim in unjust enrichment in respect of the 36 payments is misconceived. First, lack of consent is not a legally recognised factor (notwithstanding the fact that the Judge had accepted that it was). Second, the respondent’s pleadings were adequate and his case was precisely what the Judge had found to be made out. Third, the existence of the “practice” was amply supported by the evidence, and the Judge had also rightly found that the CAD Documents were admissible. Finally, the respondent aligns himself with the Judge in submitting that his defence of relying on the “practice” should not be barred by illegality.

  71. [39] The respondent further submits that the Judge rightly found that the appellants’ alternative claims in dishonest assistance, knowing receipt and unlawful means conspiracy should fail.

  72. Issues arising in this appeal

  73. [40] From the parties’ cases, the following issues arise and will be dealt with in turn:

  74. (a) Whether the Judge had erred in finding that the appellants’ claim in unjust enrichment, as well as the other claims in dishonest assistance, knowing receipt and unlawful means conspiracy in respect of the payments (apart from payment No 50) (“the Time-Barred Claims”) were time-barred under the Limitation Act and/or under the doctrine of laches;

  75. (b) If the appellants’ claims mentioned at (a) above are not time-barred:

  76. (i) Whether the Judge had erred in finding that the unjust enrichment claims in respect of the 36 payments failed;

  77. (ii) Whether the Judge was right in finding that the unjust enrichment claims in respect of the 11 payments and the three payments would have, but for the time-bar, succeeded;

  78. (iii) Whether the Judge had erred in finding that the merits of the other claims in dishonest assistance, knowing receipt and unlawful means conspiracy were not made out.

  79. Our decision

  80. The time-bar issue

  81. [41] We begin by considering whether the appellants’ claims were time-barred. The Judge accepted the respondent’s position that the appellants’ claims in unjust enrichment, dishonest assistance, knowing receipt and unlawful means conspiracy were all subject to a limitation period of six years from the date of payment, pursuant to s 6 of the Limitation Act. The Writ of Summons in the action below was filed on 20 November 2017, but 49 of the 50 payments were made between January 2001 and October 2011, more than six years prior to the commencement of the action. The appellants’ claims in respect of the 49 payments were accordingly barred under the Limitation Act (see the Judgment at [93]).

  82. [42] The time-bar issue consists of three sub-issues:

  83. (a) Whether s 6 of the Limitation Act applies to the Time-Barred Claims;

  84. (b) If the appellant’s claims were time-barred under s 6 of the Limitation Act, whether s 29 of the Act applied so as to extend the limitation period pursuant to which the claims could be brought; and

  85. (c) If the appellant’s claims were not statutorily time-barred, whether the claims were nevertheless barred by the equitable doctrine of laches.

  86. Whether the Time-Barred Claims were time-barred under the Limitation Act

  87. (1) Preliminary issue

  88. [43] The appellants sought leave to introduce a new point on appeal pursuant to O 57 r 9A(4)(b) of the Rules of Court (2014 Rev Ed) (“Rules of Court”). They argued that the Judge had erred in finding that their claims in unjust enrichment were time-barred, as the respondent’s plea with respect to the time-bar did not cover their claims in unjust enrichment. In the respondent’s defence, he had pleaded as follows:

  89. [44] The appellants argued that s 6(7) of the Limitation Act (“s 6(7)”) states that the section is to apply to all claims “for specific performance of a contract or for an injunction or for other equitable relief whether the same be founded upon any contract or tort or upon any trust or other ground in equity”. However, a claim for unjust enrichment falls under a distinct category of restitutionary claims. Section 6(7) therefore does not cover their claims in unjust enrichment. In any event, even if s 6(1)(a) of the Act (“s 6(1)(a)”) applied to the appellants’ claim in unjust enrichment, the respondent did not plead, and therefore cannot rely on, s 6(1)(a). In the circumstances, therefore, the appellants’ claim in unjust enrichment was not time-barred.

  90. [45] We are not persuaded by the appellants’ argument relating to the respondent’s pleadings. The appellants had sought to make this argument at a late stage of trial, which argument was rejected by the Judge. We agree with the Judge that on a fair reading of the defence, the plea of time-bar applied potentially to all of the appellants’ causes of action, including that in unjust enrichment. The Judge also noted that the parties had proceeded on that basis until the pleading point was raised (see the Judgment at [107]). This is implicitly acknowledged by the appellants who are now seeking leave to adduce a new point not argued below. It therefore could not be said that the appellants did not know the case that they had to meet or that they were taken by surprise as a result of the pleadings being lacking in specificity (see the decisions of this court in Alwie Handoyo v Tjong Very Sumito and another and another appeal [2013] 4 SLR 308 (“Alwie Handoyo”) at [168] and Liberty Sky Investments Ltd v Aesthetic Medical Partners Pte Ltd and other appeals and another matter [2020] 1 SLR 606 at [16]).

  91. [46] We note that it is not disputed that the appellants’ claims for dishonest assistance, knowing receipt and conspiracy fall within the ambit of s 6 of the Limitation Act (“s 6”), and that, leaving aside the issue relating to s 29 of the Limitation Act which we will consider below, such claims for 49 of the 50 payments (except payment No 50) would have been time-barred as they were brought more than six years after the payments were made. However, the question of law that is of significance to the present appeal, and which we granted leave to the appellants to introduce on appeal, is whether s 6 applies to claims in unjust enrichment. The new argument is one of law and does not involve issues of fact that would have had to be canvassed at the trial below (see the decision of this court in Zyfas Medical Co (Sued as a firm) v Millennium Pharmaceuticals, Inc [2020] 2 SLR 1044 at [28]).

  92. (2) Application of s 6 of the Limitation Act to claims in unjust enrichment

  93. [47] As noted above, the Judge accepted the respondent’s case that the Limitation Act applied to claims in unjust enrichment, citing the High Court decision of Ching Mun Fong (executrix of the estate of Tan Geok Tee, deceased) v Liu Cho Chit [2000] 3 SLR(R) 304 at [72]–[73] (see the Judgment at [93(a)]). With respect, we decline to adopt the Judge’s view.

  94. [48] In our judgment, claims in unjust enrichment and for restitution for wrongs are both not covered under the Limitation Act. We reiterate, at this juncture, that restitution for unjust enrichment is to be distinguished from restitution for wrongs. The law of unjust enrichment comprises a separate cause of action (with restitution as the remedial response) and is made out when there is no civil wrong but the defendant is unjustly enriched at the expense of the plaintiff. In contrast, restitution for wrongs relates only to the remedial response to a civil wrong (including breaches of contract, torts and breaches of fiduciary duty) (see the decisions of this court in Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal [2018] 2 SLR 655 (“Turf Club Auto Emporium”) at [181]–[182] as well as in Alwie Handoyo at [126]). We reach this conclusion on the basis of first, the statutory wording of the Limitation Act, and second, its legislative history. Let us elaborate.

  95. (A) The position in Singapore law

  96. [49] The issue as to whether s 6 applies to restitutionary claims has not been conclusively decided by the courts in Singapore. In respect of unjust enrichment, the High Court in Management Corporation Strata Title Plan No 473 v De Beers Jewellery Pte Ltd [2001] 2 SLR(R) 669 took the position that s 6 did not apply. In that case, a subsidiary proprietor intended to do some conversion works which required the permission of the management corporation (“MC”). The MC imposed conditions for granting such permission, including the payment of sums of money. The subsidiary proprietor later claimed against the MC for restitution of the said sums, on the basis that the conditions were ultra vires and that it had paid the sums under a mistake of law. The court held that the subsidiary proprietor’s claim did not fall within the scope of the Limitation Act and that the MC’s defence of time bar therefore failed. In arriving at her conclusion, Judith Prakash J (as she then was) held that the subsidiary proprietor’s claim was founded in restitution, and that there was no contract between the parties that arose or could arise on the facts. As such, the claim could not be considered to be one “founded on a contract” within the meaning of s 6(1)(a) of the Limitation Act (at [77]). The decision of the High Court was upheld by this court in MCST Plan No 473 v De Beers Jewellery Pte Ltd [2002] 1 SLR(R) 418 (“De Beers (CA)”), where the court held that a “claim for unjust enrichment which was neither grounded in contract nor tort, and in which equitable relief was not sought, did not fall within the scope of the [Limitation Act]” (at [32]).

  97. [50] However, as observed by this court in eSys Technologies Pte Ltd v nTan Corporate Advisory Pte Ltd [2013] 2 SLR 1200 (“eSys”), doubt appears to have been cast on the position in De Beers (CA) in OMG Holdings Pte Ltd v Pos Ad Sdn Bhd [2012] 4 SLR 231 (“OMG Holdings”), where it was suggested that a claim in restitution “could well be time-barred under [s 6] of the Limitation Act” [emphasis added]. The court in eSys further observed that the “underlying thread” in De Beers (CA) (where the court appeared to apply the doctrine of laches to a common law claim for restitution, see [116] below) and OMG Holdings “appears to be that it would be contrary to both logic as well as public policy for there to be no applicable time constraint whatsoever to a claim founded on restitution as opposed to contract or tort” (at [41]). The court nevertheless left open the question of whether a restitutionary action falls within the ambit of s 6 of the Limitation Act (at [42]).

  98. [51] In respect of restitution for wrongs, the position was considered by the High Court in Chip Hup Hup Kee Construction Pte Ltd v Yeow Chern Lean [2010] 3 SLR 213 (“Chip Hup Hup Kee”). In Chip Hup Hup Kee, the managing director of the plaintiff company issued three cheques to its general manager, who handed the cheques to the defendant. The defendant encashed two of these cheques. The plaintiff brought a claim against the defendant for moneys had and received in respect of the two cheques. Andrew Ang J held that the claim for money had and received lay in the tort of conversion and was therefore time-barred under s 6(1)(a).

  99. (B) Statutory wording of the Limitation Act

  100. [52] As mentioned above, we are of the view that claims in unjust enrichment and restitution for wrongs are both not time-barred under the Limitation Act. We begin with the statutory wording of the Limitation Act. The Act sets out limitation periods based on specified causes of action, including that for “actions founded in contract or in tort”, but does not include restitutionary claims. In this regard, ss 6(1) and 6(7) of the Limitation Act provide as follows:

  101. [53] In arriving at our conclusion that claims in unjust enrichment do not fall within the ambit of the Limitation Act, we are cognisant of the fact that the courts in the UK have held that a restitutionary claim, at least where it is coincident with a quasi-contractual claim, is a cause of action founded on simple contract within the meaning of s 5 of the Limitation Act 1980 (c 58) (UK) (“1980 UK Act”) (the equivalent of s 6 of our Act). This court in OMG Holdings noted the position in the UK (at [44]) as follows:

  102. [54] The genesis of this reasoning is in the English Court of Appeal decision of Re Diplock [1948] Ch 465 at 514, where the court took the view that an action “founded on simple contract” under s 2(1)(a) of the English Limitation Act 1939 (c 21) (UK) (“1939 UK Act”) is “taken to cover actions for money had and received”, even though “the words used cannot be regarded as felicitous” (at 514). Subsequently, Hobhouse J (as he then was) agreed with the analysis in Re Diplock in the English High Court decision of Kleinwort Benson Ltd v Sandwell Borough Council [1994] 4 All ER 890 (“Kleinwort Benson”) at 942–943 and held that s 5 of the 1980 UK Act should be construed as having the same effect. In arriving at this conclusion, Hobhouse J opined that a legislative omission resulting in there being no limitation period for any common law action based upon quasi-contract would be “clearly contrary to the general purpose of the [1939 UK Act]”. Further, he referred to the relevant UK Parliamentary Debates and noted that the then Solicitor General had stated during the debates that the purpose of the bill was to “give effect to the recommendations in 1936 of the Law Revision Committee as set out in their Fifth Interim Report (Cmd 5334)”. The Committee’s report in turn recommended that “the period for all actions founded in tort or simple contract (including quasi-contract) should be six years”. Hobhouse J was therefore of the view that the expression “simple contract” in the 1939 UK Act must therefore be understood as including quasi-contracts.

  103. [55] In recent cases, the position that restitutionary claims for the recovery of money are within the ambit of s 5 of the 1980 UK Act has been consistently upheld in the UK. In Aspect Contracts (Asbestos) Ltd v Higgins Construction plc [2015] 4 All ER 482, the UK Supreme Court (at [25], per Lord Mance) held that an independent restitutionary claim for the recovery of money “falls to be regarded as ‘founded on simple contract’ within s 5 of the Limitation Act”. In stating this holding, Lord Mance cited Hobhouse J’s reasoning in Kleinwort Benson, and noted that his reasoning had not been questioned by the House of Lords in Kleinwort Benson Ltd v Lincoln City Council [1998] 4 All ER 513 when it had to consider whether s 32(1)(c) of the 1980 UK Act operated to extend the limitation period. The UK courts’ view on this issue, therefore, appears to be settled.

  104. [56] However, in our judgment, the interpretation adopted by the UK courts does not accord with the statutory wording of the Limitation Act. Whilst the UK interpretation is undoubtedly a pragmatic solution, we are, with respect, unable to agree with it on two levels.

  105. [57] First, the proposition that restitutionary claims are based on quasi-contract or the implied contract theory has clearly been rejected as the law of unjust enrichment developed over the past few decades. Historically, a restitutionary cause of action was brought by “fictional extensions of the action on the case upon assumpsit, which in form was an action for damages for breach of an undertaking”. The three principal forms of assumpsit were quantum meruit for the value of services performed, quantum valebant for the fair value of goods and indebitatus assumpsit. Indebtitatus assumpsit “rested on the assertion that the defendant, being indebted to the plaintiff in a certain sum, and in consideration of that indebtedness, promised to make payment”. The plaintiff had to indicate the basis for which the defendant was indebted to him, giving rise to a number of “common money-counts” including that for “money had and received” (see J H Baker, “The History of Quasi-Contract in English Law” in ch 3 of Restitution: Past, Present & Future, Essays in Honour of Gareth Jones (W R Cornish, Richard Nolan, Janet O’Sullivan and Graham Virgo eds) (Hart Publishing Oxford, 1998) at pp 39–42).

  106. [58] Initially, a claimant had, in respect of a claim for money had and received, to expressly prove that the defendant owed him a sum of money, and that the defendant had promised to pay the money owed. Thereafter, the promise to pay came to be conceptualised as an implied subsequent promise to do so that was incorporated into a contract which contained an agreement to repay the money owed. Subsequently, however, this fictional subsequent promise was extended to circumstances in which there was no contract at all, such that any notion of a promise to pay was completely fictitious (see James Edelman, “Money Had and Received: Modern Pleading of an Old Count” [2000] RLR 547 at 550; see also Graham Virgo, The Principles of the Law of Restitution (Oxford University Press, 3rd Ed, 2015) (“The Principles of the Law of Restitution”) at p 46). As explained by Prof Edelman (as he then was) in the same article (at 551):

  107. [59] The same point was made by Prof Tang Hang Wu in Tang Hang Wu, Principles of the Law of Restitution in Singapore (Academy Publishing, 2019) (“Tang”) at para 01.007 in the context of claims for mistaken payments as follows:

  108. [60] Prof Tang considers that the implied contract theory has also led to wrong conclusions. For example, in Sinclair v Brougham [1914] AC 398 (“Sinclair”), the issue before the House of Lords was whether the depositors could recover the sums that they had deposited in bank accounts at a building society, pursuant to their claim for money had and received. The claim was brought on the basis that the society’s banking business was ultra vires. However, the House of Lords held that a remedy for money had and received could be given only where “the law could consistently impute to the defendant at least the fiction of a promise” [emphasis added] (at 417). On the facts, the court held that it was unable to imply a contract to repay the sums since such a contract would have been ultra vires, and the depositors’ claim on this basis was therefore dismissed. As Prof Tang observes, the unsatisfactory outcome of Sinclair was that the building society was entitled to keep the sums extended to it, even though the transactions were ultra vires (see Tang Hang Wu, “The Role of the Law of Unjust Enrichment in Singapore” (2021) Chin J Comp Law 1 (“The Role of the Law of Unjust Enrichment in Singapore”) at 10).

  109. [61] In Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Limited [1943] 1 AC 32 (“Fibrosa”) at 62–64, the House of Lords (per Lord Wright) clarified the nature of a claim for money had and received. Lord Wright noted that the court in the seminal decision of Moses v Macferlan (1760) 97 ER 676 (“Moses”) (per Lord Mansfield) had likened such claims to claims founded upon a contract, and that Lord Mansfield’s statement had become the basis of characterising these claims as being quasi-contractual. However, he emphasised (at 62 and 63) that the law in fact imposed a debt or an obligation on the defendant to pay the sum owed, rather than implying any promise to pay:

  110. [62] Nevertheless, it was only in Lipkin Gorman (a firm) v Karpnale Ltd [1991] 2 AC 548 (“Lipkin Gorman”) that the House of Lords formally recognised the principle of unjust enrichment in English law. Subsequently, in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] 1 AC 669 at 710 (“Westdeutsche”), the House of Lords (per Lord Browne-Wilkinson) firmly rejected the line of reasoning that the cause of action for moneys had and received was based on an implied contract:

  111. [63] The House of Lords in Westdeutsche held further that the depositors in Sinclair “should have had a personal claim to recover the moneys at law based on a total failure of consideration” in unjust enrichment (at 710).

  112. [64] More recently, in Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners and another [2008] 1 AC 561, the House of Lords considered that the “fiction of an implied contract [had] lingered long in the law” and “continued to govern the ambit of the remedy for money had and received”, until it was eschewed in the House of Lords’ decision in Lipkin Gorman. The court held that it is now accepted that a restitutionary claim is “not founded on a fictitious implied contract or ‘quasi-contract’”, which was a “false and misleading characterisation of the nature of claims for restitution as a remedy for unjust enrichment” (at 603–604).

  113. [65] It is therefore clear that a claim for money had and received would be characterised today as primarily one in unjust enrichment, and that any reliance on there being a claim in “quasi-contract” is no longer good law. Whilst the rationale for the rejection of the implied contract theory was made in the context of claims for money had and received, it would apply equally to all claims historically based in quasi-contract. As the learned authors of Goff & Jones: The Law of Unjust Enrichment (Charles Mitchell, Paul Mitchell and Stephen Watterson eds) (Sweet & Maxwell, 9th Ed, 2016) (“Goff & Jones”) noted at para 1-06 (also cited in Eng Chiet Shoong and others v Cheong Soh Chin and others and another appeal [2016] 4 SLR 728 (“Eng Chiet Shoong”) at [33]):

  114. [66] In Singapore, as noted by Prof Tang in The Role of the Law of Unjust Enrichment in Singapore (at pp 7–8), the first mention of the term “unjust enrichment” in the Singapore Law Reports was in Abdul Shukor v Hood Mohamed [1968–1970] SLR(R) 24 (“Abdul Shukor”), with reference to the implied contract theory. In that case, the High Court considered that even if an action for money had and received was based on the principle of unjust enrichment, limitations to restitutionary claims would be imposed by the test of the implied contract. The court endorsed Lord Summer’s dictum in Sinclair (at 452) that “[t]he law cannot de jure impute promises to repay, whether for money had and received or otherwise, which if made de facto, it would inexorably avoid”. Thus, the action could not succeed if the underlying contract would be avoided for illegality (at [27]–[30]). Subsequently, what was then the leading case on unjust enrichment, Lipkin Gorman, was accepted as good law by the Court of Appeal in Seagate Technology Pte Ltd v Goh Han Kim [1994] 3 SLR(R) 836 and since then, the law of unjust enrichment has been routinely applied by the Singapore courts. The salient point is this: as a matter of authority, even if limitations that apply to contractual claims (which would include a statutory limitation period) could be said to apply to claims for money had and received which were termed “unjust enrichment” on the basis of the implied contract theory, based on the holding of the High Court in Abdul Shukor, this was effectively no longer the case by the time Lipkin Gorman – which rejected the implied contract theory as a foundation for unjust enrichment claims generally – had been accepted in Singapore as good law by the Court of Appeal. This underscores the point that, even though claims in unjust enrichment were historically brought in quasi-contract, they should not be covered under the Limitation Act as the underlying basis for such claims has changed entirely.

  115. [67] Second, on a conceptual level, a claim in quasi-contract is conceptually different from a contractual claim. This is apparent from our analysis above, which makes clear that the implied contract theory came to be used in circumstances where any implied promise to pay was entirely fictitious. As also noted by this court in Eng Chiet Shoong, in the context of claims based on the doctrine of quantum meruit, claims in quasi-contract “involved the use of a fiction” where there was in fact no contract (express or implied) (at [32]). The court further noted that “the law of restitution or unjust enrichment is generally critical of the concept of the implied contract … as a rationale for that entire branch of the law, which criticism is understandable as it led to artificiality” (at [36]).

  116. [68] We refer to the views of several authors, who have highlighted the artificiality of construing a claim in unjust enrichment as one in quasi-contract, for the purposes of giving it a limitation period. As Prof Graham Virgo stated in The Principles of the Law of Restitution, the conclusion of Hobhouse J in Kleinwort Benson that actions for money had and received should be treated as claims akin to contract is “artificial and harks back to the implied contract theory”. In his view, however, this is the “best solution available” since no specific provision governs restitutionary claims in the 1980 UK Act, and “is certainly better than concluding that such restitutionary actions are subject to no limitation period at all” (at p 735). Prof Andrew Burrows (as he then was) similarly considered that this “escape route” taken by the courts “requires distorting the statutory words particularly when the independence of unjust enrichment – and the fictional nature of the implied contract theory – is fully appreciated” (see Andrew Burrows, The Law of Restitution (Oxford University Press, 3rd Ed, 2011) (“The Law of Restitution”) at pp 606–607). Prof McGee in Andrew McGee, Limitation Periods (Sweet & Maxwell, 8th Ed, 2018) pertinently noted as follows (at pp 55–56):

  117. [69] Thus, we are of the view that claims in unjust enrichment, even where they are coincident with claims historically brought in quasi-contract, should not fall within the Limitation Act.

  118. [70] In so far as restitution of wrongs is concerned, we reiterate our analysis above that it relates only to the remedial response to a civil wrong. In our judgment, whether a claim in question falls within the Limitation Act is thus dependent on the underlying wrong. As noted above, Ang J in Chip Hup Hup Kee found that the claim for money had and received in that case lay in the tort of conversion and was therefore time-barred.

  119. [72] Ang J further observed that historically, in lieu of suing on a tort, a claimant could “waive the tort” and bring a claim for money had and received (at [10]). He reasoned that the Court of Appeal in Yeow Chern Lean v Neo Kok Eng [2009] 3 SLR(R) 1131 had accepted the position taken by the House of Lords in United Australia, Limited v Barclays Bank, Limited [1941] AC 1, that a claimant by waiving his claim in tort and bringing a claim for money had and received was merely making “a choice between possible remedies for the commission of what was at the heart of it a tort” (see Chip Hup Hup Kee at [11]). As the claimant would have been time-barred from pursuing his claim under the tort of conversion, he would also be time-barred from his claim for money had and received founded on the tort, “since it was in substance only a choice in remedy” (at [25]).

  120. [73] We agree with Ang J that where a claim for restitution for wrongs is founded on a tort, the limitation period as provided under s 6(1)(a) of the Limitation Act should apply. This accords with our analysis above that restitution for wrongs relates only to the remedial response to a civil wrong, and that the claim therefore is founded on the civil wrong itself. In the consultation paper by the Law Commission of England and Wales, the Law Commission considered that the “natural interpretation” of the UK legislation would be for the limitation period which applies to actions founded on tort to also apply to actions for restitution where the underlying wrong is a tort (see Law Commission of England and Wales, Limitation of Actions (1998) (Consultation Paper No 151)) (“Consultation Paper No 151”) at para 5.17). Prof Virgo takes the same position, pointing out that “because the underlying cause of action for the claim is the tort or the breach of contract … the limitation period for those causes of action should apply even where the claimant seeks a restitutionary remedy”. He notes that “[i]f the wrong is statute-barred then there is no longer a cause of action on which the restitutionary claim can be based” (see The Principles of the Law of Restitution at pp 738–739). We are therefore of the view that the Limitation Act applies where the restitutionary claim brought is founded on a civil wrong for which a limitation period is provided under the Act, but not otherwise.

  121. [74] In contrast to this conclusion (as also noted, and rejected, in Chip Hup Hup Kee), is the position that a claim in restitution for wrongs could be independent from the underlying claim. For example, H M McLean in Limitation of Actions in Restitution [1989] CLJ 472 considered that where a restitutionary action “merely provides a supplemental tortious remedy, it should be subject to the same statutory bars as the normal damages action”. On the other hand, for a claim in conversion, the decision in Chesworth is supportable. The author considered that the restitutionary action is “independent of the tort because it arises on the defendant’s receipt of a benefit (the proceeds of sale) in circumstances (conversion) which make it unjust that he should retain that benefit” (at 487). However, given our conclusion above that restitution for wrongs provides only a remedy to a civil wrong, we do not consider this analysis to be a sustainable one.

  122. [75] For the above reasons, we are unable to agree that the statutory wording of the Limitation Act, which refers only to actions founded in contract, should be extended to restitutionary claims. As explained earlier, claims in quasi-contract were not founded on a contract, as any notion of there being a promise to pay was merely a fiction implied by the courts to provide the claimant with a remedy. In any event, claims which were once characterised as quasi-contractual are now primarily grounded in unjust enrichment and are entirely distinct from any obligation in contract as such.

  123. [76] For completeness, we make two further points. First, the respondent had initially argued (although this point appears to have been dropped during the hearing itself) that the appellants’ claim in unjust enrichment was time-barred under s 6(7) of the Limitation Act, as the appellants had, in his view, sought equitable relief. However, to begin with, the claim in question has to be one “founded upon any contract or tort or upon any trust or other ground in equity”. A claim in unjust enrichment does not fall into any of those categories. In addition, the analysis above in relation to the legislative history of the Limitation Act demonstrates that claims in unjust enrichment were simply not envisioned in the drafting of the Act.

  124. [77] Second, we are also of the view that claims in unjust enrichment do not fall within the ambit of claims founded on tort under s 6(1)(a) of the Limitation Act. This is for two reasons. First, it has been made clear in case law that claims in unjust enrichment are a distinct branch of obligations from the law of tort. As stated in Turf Club Auto Emporium at [181]:

  125. [78] Second, as noted by Prof Tang in Tang (at para 01.053), liability in unjust enrichment cannot be explained by reference to orthodox tort theory because “the defendant, being a passive recipient, has not breached a duty of care owed to the claimant unless one takes the view that there is a duty to return a mistaken payment” (on the basis that the money was paid to the defendant by mistake). This however begs the question as to why there would be such a duty in the first place. We are therefore of the view that claims in unjust enrichment are separate and distinct from those in both contract and tort.

  126. (C) Legislative history of the Limitation Act

  127. [79] We turn next to the legislative history of the Limitation Act. Apart from the statutory wording of the Act, its legislative history also supports our conclusion that claims in unjust enrichment do not come within its ambit. The legislative history of the Limitation Act has been helpfully set out by the Law Reform Committee of the Singapore Academy of Law (“SAL Reform Committee”) in its Report of the Law Reform Committee on the Review of the Limitation Act (Cap 163) (February 2007)) (“SAL Report”) (at paras 45–48) as well as in the relevant Legislative Assembly debates.

  128. [80] The earliest limitation statute applying directly to Singapore was the Limitation of Suits Act (Act XIV of 1859), later superseded by the Straits Settlements Ordinance VI of 1896, which was modelled on the Indian Limitation Act 1877 (Act 15 of 1877). Subsequently, a Committee was set up in the Federation of Malaya to consider the law relating to limitations. The Committee had recommended the adoption of the English law of limitations, resulting in the enactment of the Limitation Ordinance 1953 (Ordinance No 4 of 1953) (Federation of Malaya) (“Limitation Ordinance 1953”). The Singapore Bar Committee also undertook a review of the matter and recommended that legislation along the lines of the 1939 UK Act and the Limitation Ordinance 1953 be enacted in Singapore. As a result, the Limitation Ordinance 1959 (No 57 of 1959) was enacted, which superseded the Straits Settlements Ordinance VI of 1896. Mr K M Byrne, then Minister for Labour and Law, observed that the Indian law on limitations was “extremely complicated”, and that the purpose of the legislative amendment was to “effect a simplification” to the law of limitations in Singapore (see State of Singapore, Legislative Assembly Debates, Official Report (2 September 1959), vol 11 at cols 586–587). Since 1959, there has been no major statutory overhaul of the law of limitation in the Singapore context.

  129. [81] However, the law of restitution and unjust enrichment is a developing branch of the law of obligations and most claims in this particular area of the law would not have been in the contemplation of the legislature at the point of drafting the Limitation Act as well as its predecessor legislation. Indeed, in the SAL Report, the SAL Reform Committee noted that the Limitation Act is “couched only in terms of obligations known to the drafters at the time of drafting”, and this would therefore not include obligations such as unjust enrichment and other restitutionary claims, which were not known in 1959 when the act was drafted (at para 64). The Committee therefore recommended that the law of limitations in Singapore in relation to the law of restitution was “plainly in need of reform” (at para 67).

  130. [82] In Consultation Paper No 151, the Law Commission of England and Wales noted that the 1980 UK Act laid down limitation periods for specific and limited restitutionary claims but did not explicitly apply to the “bulk of restitutionary claims”. The Commission concluded that (at paras 5.2–5.3):

  131. [83] Further, in the report of the Law Commission of England and Wales on the law of limitation, it was noted that unjust enrichment was only recognised as an independent cause of action by the House of Lords in 1991, in the case of Lipkin Gorman (see Law Commission of England and Wales, Limitation of Actions: Item 2 of the Seventh Programme of Law Reform (July 2001) Law Com No 270 at para 2.48). Given that the Limitation Act was modelled after the 1939 UK Act, it must follow that claims in unjust enrichment were not within the contemplation of the local legislature in 1959 (which, significantly, represents the present law in Singapore today). There would also be no basis for claims for restitution of wrongs (apart from claims founded on a civil wrong in one of the established grounds under the Limitation Act) to be construed as coming under the Limitation Act, as Parliament similarly did not envisage such claims as coming within the Limitation Act.

  132. [84] Indeed, it should be noted that statutory limitation periods are emphatically as well as quintessentially creatures of statute, and it is not the function of the courts to act as “mini-legislatures” by reading into the Limitation Act a statutory limitation period for a claim which the Legislature did not intend to impose. The Limitation Act does not, understandably, contain any “sweeping-up” or “catch-all” provision imposing a general limitation period for all other claims not expressly specified in the Act itself. This suggests that the Legislature did not intend all claims to be subject to a limitation period but only those which it deemed ought to have been so limited (namely, the claims expressly specified in the Act). It follows that claims which could not have been within the contemplation of the Legislature at the time the Limitation Act and its predecessor legislation were enacted could not have been intended by the Legislature to be subject to statutory limitations under the respective statutes (in particular, the Limitation Act).

The judgment continues past this page. Read the rest at eLitigation.