General Division of the High Court · Decided 2 August 2024

Baizanis, Georgios v Snap Innovations Pte Ltd and another

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[2024] SGHC 200Case no. Suit No 296 of 2021

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Laws this judgment relies on

Evidence Act 1893

Grounds of decision

Official text from eLitigation

[1] The Plaintiff, Georgios Baizanis, is a cryptocurrency investor. The 1st Defendant (“D1”), Snap Innovations Pte Ltd, is a company providing information technology and computer-related services, with a focus on technological solutions for brokers and traders. Its sole shareholder is Dr Ting Shang Ping (“Dr Ting”). At the material time, the 2nd Defendant (“D2”), Bernard Ong, was reflected on D1’s website as a “director” of D1, although he was not registered as such with the Accounting and Corporate Regulatory Authority (“ACRA”).
[2] This case arose from the Plaintiff’s investment in a scheme known as “Cryptotrage”, which involved arbitrage trading in cryptocurrencies on the Binance Exchange. According to the Plaintiff, the Cryptotrage scheme was operated by D1 through its employees in Vietnam. The Plaintiff claimed that pursuant to the scheme, he deposited cryptocurrencies into accounts on the Binance Exchange that were operated by D1’s office in Vietnam. The Plaintiff professed that he initially invested only small amounts in the scheme, as he wanted to limit his exposure should any governance failures within D1 occasion the misappropriation of client funds. The Plaintiff alleged that he was nevertheless enticed into increasing his investments by one Wu Zhongyi (“Zee”), who was reflected on D1’s website at the material time as D1’s director in Vietnam. Zee did so by offering the Plaintiff what appeared to be a corporate guarantee by D1, which would indemnify the Plaintiff against losses arising from fraud. The corporate guarantee was embodied in a document called the “Service Agreement”, which was allegedly signed on D1’s behalf by both D2 and Zee. After obtaining the comfort of the Service Agreement, the Plaintiff then increased his investments in the Cryptotrage scheme.
[3] On 9 February 2021, Zee disappeared, apparently after having misappropriated the cryptocurrencies deposited by investors (including the Plaintiff) in the Cryptotrage scheme. When the Plaintiff attempted to call on D1’s indemnity under the Service Agreement, D1 denied responsibility for the Cryptotrage scheme (which D1 claimed was entirely Zee’s operation). D1 also disavowed the Service Agreement, saying that D2 and Zee were both “independent contractors” of D1 with no authority to sign the Service Agreement on D1’s behalf. As for D2, he denounced the Service Agreement as a forgery, claiming that his signature had been copy-pasted on it.
[4] The Plaintiff commenced this action against D1 and D2 (whom I collectively refer to as the “Defendants”) to recover the value of the cryptocurrencies which he claimed to have invested in the Cryptotrage scheme and lost through Zee’s fraud. The Plaintiff raised various causes of action:
(a) He sued D1 for breach of the Service Agreement, claiming that the corporate guarantee therein obliged D1 to indemnify the Plaintiff for the losses arising from Zee’s fraud. The Plaintiff’s cause of action was premised on his contention that both D2 and Zee had actual, or at least ostensible, authority to enter into the Service Agreement on D1’s behalf.
(b) In the event of the guarantee in the Service Agreement being unenforceable as against D1, the Plaintiff sought in the alternative to hold D2 liable for a breach of warranty of authority.
(c) The Plaintiff also sued both Defendants for allegedly breaching their duty to properly supervise Zee, thereby allowing the latter to perpetrate the fraud that led to the Plaintiff’s loss.
[5] I dismiss the Plaintiff’s claims and set out my reasons for doing so.
The Facts
[6] The bulk of the factual narrative below emanated from the Plaintiff. This is unsurprising, given the Defendants’ position that they had no dealings with the Plaintiff prior to Zee’s disappearance.
The Plaintiff’s factual evidence
[7] The Plaintiff’s account of what transpired can be canvassed in three parts, namely:
How the Plaintiff came to invest in the Cryptotrage scheme
[8] The Plaintiff explained that he came to be acquainted with Zee sometime around the end of December 2018, through the messaging platform, Telegram. Zee was based in Vietnam, where he and his team managed the Cryptotrage scheme. The scheme involved the generation of profits from arbitrage trades in cryptocurrencies. Those trades were performed by bots, ie, trading programmes which communicated with the cryptocurrency exchange on which the trades were performed. Traditionally, the process of searching for arbitrage opportunities was a manual one – this was both tedious and time-consuming. With the advent of bots, the process became easier and incurred significantly reduced latency. In the months following his acquaintance with Zee, the Plaintiff began investing small amounts in the Cryptotrage scheme.
[9] The statement of accounts for the Plaintiff’s investments in the Cryptotrage scheme came in the form of “daily reports”. These reports comprised tabulated numbers that had apparently been prepared by Zee’s team in Vietnam and were disseminated via Telegram messages. The daily reports contained little by way of elaboration as to what the numbers in the tables meant, or how they were arrived at. However, this appeared to pose no issues for a seasoned cryptocurrency investor such as the Plaintiff.
[10] The Plaintiff’s initial foray into the Cryptotrage scheme seemed profitable, prompting him to contemplate increasing his investments as well as bringing his friends on board as fellow investors in the scheme. However, before embarking on that commitment, the Plaintiff thought it prudent to conduct due diligence on Zee and ascertain exactly who Zee worked for. The Plaintiff thus posed his inquiries to Zee, who responded that he was a director of D1. Zee explained that he and his team, which was known as “Snap Vietnam”, operated out of Vietnam. Zee also sent the Plaintiff a document called the “Deck”, which contained a set of presentation slides that listed Snap Vietnam’s key personnel and explained the Cryptotrage scheme. The first substantive page of the Deck, which described the credentials of both Zee and one Rick Nguyen (“Rick”), is extracted below:
[11] To confirm the veracity of the information within the Deck, the Plaintiff decided to reach out to D1 directly. On 7 February 2019, the Plaintiff called one Michael Lim, who was an employee of D1 at the time. Michael Lim verbally confirmed to the Plaintiff over the phone that Zee and Rick were working for D1. That same day, the Plaintiff followed up with an e-mail to Michael Lim, attaching a copy of the Deck and providing Michael Lim with an explanation of what the Cryptotrage scheme was about. In his e-mail, the Plaintiff expressed his concerns about how the Cryptotrage scheme was not mentioned anywhere on D1’s websites and explained that he consequently wanted to ensure that the persons he was dealing with (ie, Zee and Rick) were indeed persons from D1’s Vietnam office and not impersonators perpetrating a scam. The Plaintiff’s e-mail also asked if the Cryptotrage scheme was indeed a product of D1. An extract of the Plaintiff’s e-mail to Michael Lim is set out below:
[12] Michael Lim replied to the Plaintiff’s e-mail a few hours later, with a rather short response confirming that Zee and Rick were from D1’s Vietnam office. Michael Lim’s e-mail is extracted below:
Michael Lim’s e-mail also re-attached the first substantive page of the Deck which set out the credentials of Zee and Rick (the contents of which have been extracted at para 10 above), which the Plaintiff had sent to Michael Lim in the preceding e-mail.
[13] In March 2019, the Plaintiff visited Vietnam to conduct on-site due diligence in respect of Snap Vietnam’s trading operations. There, he met Zee and various other members of the Snap Vietnam team, including Rick, one Fong Chee Keong (“CK”), who was allegedly Zee’s right-hand man, and one Martin, who was allegedly Snap Vietnam’s chief trader. The Plaintiff claimed that these persons could no longer be traced at the time of trial.
[14] According to the Plaintiff, he was told by Zee, Rick and CK that D1 was using a Vietnam-incorporated company, Click Staff Company Limited (“Clickstaff”), as a conduit for executing D1’s operations in Vietnam. The Plaintiff was introduced to the sole shareholder and director of Clickstaff, Nguyen Thanh, who also served as Snap Vietnam’s Human Resource Manager. During the trial, Nguyen Thanh testified remotely from Vietnam, giving evidence on the Plaintiff’s behalf. In doing so, Nguyen Thanh gave various examples of D1’s involvement in Snap Vietnam’s business, including the following:
(a) D1, through Snap Vietnam, ventured into and funded the development of trading bots for arbitraging cryptocurrencies.
(b) Dr Ting facilitated D1’s business in Vietnam by getting Clickstaff to purchase various equipment to facilitate Snap Vietnam’s operations.
(c) D1 also used Clickstaff to recruit staff for Snap Vietnam, with Zee personally negotiating the salaries of Vietnamese staff engaged by Clickstaff. While Clickstaff would pay those salaries, it was reimbursed by either Zee or CK, who made payment to Clickstaff on D1’s behalf.
[15] The Plaintiff also claimed that Zee told him that D2 was Zee’s “boss and CEO”. Following from this, the Plaintiff performed searches on the internet and discovered that:
Signing of the Service Agreement
[16] After a few weeks of investing in the Cryptotrage scheme, the Plaintiff was invited by Zee to increase his investments. The Plaintiff was told that this would enhance his financial returns, as higher investment levels meant higher profit-sharing percentages. However, the Plaintiff remained wary of doing so, as higher investment levels necessarily carried the risk of higher losses in the event of Snap Vietnam’s staff absconding with his cryptocurrencies. Zee, Rick and Martin sought to assure the Plaintiff that safeguards were in place to prevent unauthorised withdrawals. However, this did not suffice to assuage the fears of the Plaintiff, who refused to raise his investments unless D1 executed a corporate guarantee indemnifying him against losses which might arise from internal fraud. The Plaintiff was eventually informed by Zee that Zee himself could sign such a corporate guarantee on D1’s behalf. However, the Plaintiff told Zee that he also wanted an additional “authorised director” from D1 to sign the corporate guarantee. Zee thus informed the Plaintiff that he would get D2, who was his “boss” and “CEO”, to sign on the corporate guarantee as well.
[17] The Plaintiff thus set about personally drafting the Service Agreement, the key terms of which are extracted below:
[18] The operative clauses of the Service Agreement are highlighted below:
(a) Clause 1 contemplated that D1 (which was referred to by the Service Agreement as “Cryptotrage”) owed various obligations that would be performed through Clickstaff (which was referred to by the Service Agreement as the “child company” of D1).
(b) Clause 1.1 set out D1’s primary obligation, which was to “manage the funds” of the Plaintiff and “his Group” (ie, friends that the Plaintiff would co-opt to invest in the Cryptotrage scheme) through arbitrage trades in cryptocurrency.
(c) Materially, cl 1.2 embodied the corporate guarantee sought by the Plaintiff. This clause contemplated that in the event of “internal fraud” by any staff of the Cryptotrage group of companies, the “parent company” (which was presumably a reference to D1) had to replace any cryptocurrencies “stolen by fraud” within five business days.
[19] The Plaintiff prepared a printed copy of the Service Agreement that he had drafted (which I will refer to as “the Original Draft”) and brought the same to Vietnam on 7 May 2019 to have it signed. At the Vietnam office, the Plaintiff met Zee, who scanned the Original Draft and printed out the scanned electronic file to produce what I will refer to as “the Scanned Draft”. The Plaintiff and Zee appended their wet-ink signatures on both the Original Draft and the Scanned Draft, with Zee signing in his capacity as “Director, Vietnam Operations”. The Plaintiff then took photographs of the signed Original Draft, which he exhibited in his Affidavit of Evidence-in-Chief (“AEIC”). As for the Scanned Draft, the Plaintiff surmised that after this was signed by Zee and himself, Zee had scanned the signed copy and sent the electronic copy to D2 via Telegram.
[20] The Plaintiff also explained that D2 had been travelling to various countries at the time, but D2 eventually returned to Singapore where he signed the Service Agreement:
(a) On 21 May 2019, D2 travelled to Vietnam where he discussed the Service Agreement with Zee. The Plaintiff knew this because he had sent a Telegram message to Zee that day, asking about the status of the Service Agreement’s execution. Zee had replied that D2 was coming to Vietnam and would discuss the Service Agreement with Zee that very evening. Zee’s reply was corroborated by D2’s passport, which showed that D2 was in Vietnam on 21 May 2019.
(b) On 24 May 2019, the Plaintiff sent another Telegram message to Zee seeking a status update, to which Zee responded that he was following up with D2 on the matter. Zee further said that D2 was in Hong Kong and would sign the Service Agreement on Monday, 27 May 2019. Again, Zee’s response was corroborated by D2’s passport, which showed D2 to be in China from 25 to 26 May 2019.
(c) The Plaintiff’s case was that D2 ultimately returned to Singapore on 27 May 2019, where he signed the Service Agreement in the early hours of the morning, before leaving again for Malaysia. Again, this was consistent with D2’s passport, which showed that D2 left Singapore for Malaysia on 27 May 2019.
[21] The Plaintiff contended that D2 physically executed the Service Agreement, by appending his wet-ink signature on it while he was in Singapore; there was no suggestion by the Plaintiff of D2 having signed the Service Agreement electronically. I will refer to the putative paper copy of the Service Agreement bearing D2’s wet-ink signature as the “Executed Paper Copy”.
[22] On the morning that D2 purportedly executed the Service Agreement (ie, 27 May 2019), at 8.28am, Zee sent the Plaintiff a Telegram message forwarding what purported to be an electronic copy of the Executed Paper Copy bearing D2’s signature and D1’s corporate stamp, with an accompanying message that D2 had signed and stamped the Service Agreement. I will refer to this electronic copy of the Service Agreement, which bore D2’s signature and D1’s corporate stamp and which was forwarded by Zee that morning, as the “E-Copy”. In his message, Zee also offered to let the Plaintiff collect a duplicate copy of the signed Service Agreement from D1’s Singapore office. An extract of the Telegram message sent by Zee to the Plaintiff is set out below:
The foregoing extract shows two distinct messages in the chain, which I have demarcated into two separate boxes bounded by dashed lines – I refer to these as the “upper box” and “lower box”. From the extract, one sees that:
[23] The words “Deleted Account” appeared at three points within the conversation chain – I have marked these in the extract above with the boxed numbers “1”, “2” and “3”. On the face of the extract, it is unclear if the three deleted accounts belonged to a single person. The Plaintiff’s IT forensic expert, Wilfred Nathan, testified that while the term “Deleted Account” may appear at various points of a Telegram conversation chain, the deleted account denoted by that term could potentially belong to different persons (each of whom have deleted their respective Telegram accounts) at different points where that term appears in the chain. Relying on Wilfred Nathan’s analysis, the Plaintiff advanced the following positions:
(a) Deleted Account “1”, which sent the message in the upper box to the Plaintiff at 8.28am, belonged to Zee.
(b) Zee had, by the message in the upper box, forwarded to the Plaintiff a message which Zee himself had received from Deleted Account “2”. That message from Deleted Account “2”, which had been sent to Zee just one minute earlier (as denoted by the timestamp “08:27:18”), enclosed the E-Copy.
(c) Deleted Account “3”, which sent the message in the lower box to the Plaintiff (also at 8.28am) was the same as Deleted Account “1”, ie, both were Zee’s account.
[24] The key question thus arose as to whom Deleted Account “2” belonged. This was not a point that Wilfred Nathan was able to resolve by his analysis. However, it was the Plaintiff’s evidence that when he first viewed the conversation chain on 27 May 2019, Deleted Accounts “1” to “3” had yet to be deleted. At that point, the Plaintiff had noticed an icon with the letter “B” appearing in relation to Deleted Account “2”. The Plaintiff inferred that the icon denoted an account belonging to D2, whose first name (“Bernard”) began with the letter “B”. On that hypothesis, Deleted Account “2” must have belonged to D2, meaning that D2 had sent a message enclosing the E-Copy to Zee on 27 May 2019 at 8.27am (as denoted by the timestamp “08:27:18”). About a minute after that, at 8.28am, Zee had:
[25] While the Plaintiff did not personally witness D2 executing the Service Agreement, he argued that the court should accept Zee’s message (in the lower box) as evidence that D2 did sign it. This was because Zee’s communications had all been corroborated by D2’s passport entries (see para 20 above). That in turn meant that Zee had intimate knowledge of D2’s travel itinerary and must consequently have known if and when D2 signed the Service Agreement.
[26] Zee and the Plaintiff then arranged for the Plaintiff to collect a hard copy of the Service Agreement from D1’s office in Singapore. In turn, the Plaintiff asked his friend, Frederic Schmidt (“Schmidt”), to do so on his behalf.
[27] On 2 June 2019, Zee sent a Telegram message to D1’s employee, Kenneth Chan, enclosing an electronic copy of the Service Agreement purportedly bearing D2’s signature. In that message, Zee asked Kenneth Chan to print the same and pass the printout to Schmidt. Kenneth Chan complied and passed the printout to Schmidt, when the latter turned up at D1’s office the next day. Schmidt subsequently passed the printout to the Plaintiff, who adduced the same in evidence as exhibit “P1”.
[28] The Plaintiff’s position was that the E-Copy which Zee forwarded to him via Telegram on the morning of 27 May 2019 was identical to the electronic copy that Zee sent to Kenneth Chan on 2 June 2019. This meant that P1, being a printout of the electronic copy sent to Kenneth Chan, was for all intents and purposes also a printout of the E-Copy sent to the Plaintiff on 27 May 2019. As the Defendants offered no credible evidence to challenge the Plaintiff’s position on this point, I have proceeded on the basis that references to:
are all synonymous. Subsequent references to P1 and the “E-Copy” should therefore be understood in that light.
[29] The most crucial section of P1 was its third page, a snapshot of which is extracted below:
As seen from the extract above, the third page bore the signatures of the Plaintiff and Zee (with Zee signing off as “Director, Vietnam Operations”) – the signatures would have been appended by Zee and the Plaintiff when the latter visited the Vietnam office on 7 May 2019 – see para 19 above. Critically, the third page also bore what appeared to be D2’s signature and, to the right of that, D1’s corporate stamp. The handwritten words “Bernard Ong. Managing Director, Snap Innovations (Singapore)” also appeared below D2’s purported signature and the corporate stamp.
[30] The Plaintiff claimed that he was initially under the impression that P1 was the Executed Paper Copy, ie, bearing D2’s wet-ink signature, as D1’s corporate stamp was in colour and not black-and-white. He claimed to have discovered that P1 was a printout of an electronic copy only after this suit was commenced. The Plaintiff suspected that the Executed Paper Copy remains in the possession of either D1 or D2, who have both refused to pass him the same.
[31] The Plaintiff professed that he always expected to receive an “original” copy of the signed Service Agreement, ie, where the signatures therein were in wet ink. While at the Vietnam office on 7 May 2019, he and Zee had taken the trouble to append their wet-ink signatures on both the Original Draft and the Scanned Draft (see para 19 above). This was to allow both the Plaintiff and D1 to each have an “original” document, ie, where the signatures were in wet ink. If D2 had thereafter appended his wet-ink signature on both these drafts, this would have given rise to two documents where the signatures of all three signatories (ie, Zee, the Plaintiff and D2) were in wet ink. From the Plaintiff’s perspective, it was important for him to possess an “original” document for his records. Thus, when Zee told the Plaintiff that he would send the signed Service Agreement to Singapore for execution by D2, the Plaintiff presumed that Zee would courier both the Original Draft and Scanned Draft (each bearing the wet-ink signatures of Zee and himself) to Singapore, where D2 could then pen his wet-ink signature and affix D1’s wet-ink stamp. As it turned out, Zee did not do that but (as alluded to at para 19 above) merely scanned one of the two drafts and sent the scanned electronic copy to D2. If D2 had printed that electronic copy and signed on the printout, the Executed Paper Copy would have borne the wet-ink signature of only D2 – the signatures of Zee and the Plaintiff would have merely been printed images. Unfortunately, the document which the Plaintiff eventually obtained (ie, P1) was not even that. It was a printout of an electronic copy where the signatures of all signatories (including D2) and D1’s corporate stamp were merely printed images and not in wet ink.
Theft of the Plaintiff’s cryptocurrencies and the aftermath
[32] After the Service Agreement was purportedly executed, the Plaintiff and his friends began increasing their investments in the Cryptotrage scheme. The Plaintiff deposited three types of cryptocurrencies into the scheme: the first was USDt, followed by BUSD (from November 2019 onwards) and BNB (from July 2019 onwards).
[33] At the time, Snap Vietnam had two accounts on the Binance Exchange which respectively held what was termed “Tier 2” and “Tier 3” status. Zee wanted to raise the quantum of BNB deposits in each of these accounts to 11,000 BNB, as crossing that threshold would qualify the accounts for upgrade to “Tier 9” status. Holders of Tier 9 accounts enjoyed large discounts on trading fees and received referral fees from the Binance Exchange. At Zee’s behest, the Plaintiff deposited a total of 22,000 BNB into the two accounts, thereby enabling them to reach Tier 9 status. In return, the Plaintiff was paid half the Tier 9 benefits reaped.
[34] In the months that followed, the Plaintiff’s Cryptotrage trades were profitable and he was able to make various withdrawals of his gains. In October 2019, a company called Torque Group Holdings Limited (“Torque”) was incorporated in the British Virgin Islands (“BVI”), with D2 as its registered director and Chief Executive Officer (“CEO”) and Zee as its Chief Technology Officer (“CTO”). Zee informed the Plaintiff that Torque was a “spinoff” from Cryptotrage that operated an online cryptocurrency trading platform employing the same arbitrage algorithm as that used in the Cryptotrage scheme. The Plaintiff accordingly invested cryptocurrencies on the Torque platform as well.
[35] The Plaintiff alleged that Snap Vietnam had, unbeknownst to him, started to consolidate its Cryptotrage trades such that they would be conducted from only one of the two Tier 9 Binance accounts – I refer to this remaining account simply as “the Binance Account”. The Binance Account also came to be used for trades on the Torque platform, meaning that cryptocurrencies invested by investors on the Torque platform were deposited into the Binance Account. The Plaintiff viewed this as “commingling” of the cryptocurrencies which he had invested in Cryptotrage with those invested by Torque’s investors – something which he had neither consented to nor even been made aware of. He surmised that the commingling was to allow Torque to reap the pecuniary benefits of the Binance Account’s Tier 9 status (referred to at para 33 above).
[36] On 9 February 2021, Zee sent a Telegram message to D2, in which Zee confessed to engaging in unauthorised futures trading using cryptocurrencies in the Binance Account. Zee explained that the bots were unable to sustain the profits, thereby prompting him to resort to futures trading which, though more profitable, was also risky and ultimately incurred losses that grew progressively bigger. The Plaintiff claimed that Zee had also absconded with the Plaintiff’s cryptocurrencies from the Binance Account. Following this development, D2 issued a statement to Torque’s investors, alerting them to significant trading losses incurred by Torque arising from Zee’s trades. Zee has been untraceable since.
[38] As investigations into Torque commenced, the Binance Account was frozen until further notice, thereby preventing the Plaintiff from withdrawing whatever might have been left of his investments under both the Cryptotrage scheme and the Torque platform. It was only at this point that the Plaintiff realised that the Binance Account had been used by Torque. The Plaintiff thus approached CK, urgently seeking redress. CK arranged a conference call with D2, which was held on 16 February 2021 and attended by D2, the Plaintiff and CK. The call was secretly recorded by the Plaintiff, who adduced transcripts of the call at trial. The transcripts capture D2 saying that he could not recall signing the Service Agreement. The transcripts also reflect that when the Plaintiff persisted in pressing for a remedy, D2 capitulated and suggested that a repayment plan could be explored.
The Defendants’ factual evidence
[40] D2 maintained that he never executed the Service Agreement. In other words, the Executed Paper Copy never existed, which in turn meant that the E-Copy (and hence P1) could not possibly have been derived from it. D2 maintained that the E-Copy (and hence P1) was forged and made the following points about the features in P1’s third page (extracted at para 29 above):
[41] D2 claimed that he came to learn about the Service Agreement only at the conference call with the Plaintiff on 16 February 2021 (referred to at para 38 above), after Zee’s disappearance. D2 also made a police report about P1 having been forged.
[42] In relation to D1’s corporate stamp, Dr Ting corroborated D2’s position by explaining that D2 had no access to it, and thus could not have applied the stamp to the Service Agreement. D1’s corporate stamp was always securely kept in the Operation Manager’s room under lock and key, accessible only to two persons, being the Operation Manager and Dr Ting himself. Dr Ting also added that the corporate stamp was an ordinary rubber stamp which could be procured in “a day or two”, meaning that anyone other than D2 could have made a similar-looking stamp and applied the same to the Service Agreement.
[43] The Defendants also explained that while D2 and Zee may have been given the titles of “director”, they were in truth merely independent contractors engaged by D1. Dr Ting explained that it was D1’s practice to give “nice-sounding corporate titles” to its independent contractors, so that they would “appear credible” when promoting D1’s products and services to potential customers. This was corroborated by D2, who explained that both he and Zee were independent contractors who had been conferred the title of “director” to enable them to perform their duties.
Framing of the Issues
[44] Having laid out the parties’ respective versions of the facts, I now summarise the claims raised by the Plaintiff, and the Defendants’ defences thereto. That will in turn set the backdrop for framing the issues in this case.
The Plaintiff’s claims against D1
[45] The Plaintiff submitted that both D2 and Zee had both actual and ostensible authority to enter into the Service Agreement on D1’s behalf and that D1 was consequently bound to honour its terms.
[46] In relying on the Service Agreement, the principal clause which the Plaintiff sought to invoke was cl 1.2, the relevant portion of which read:
As seen from the clause, D1’s obligation to reimburse the Plaintiff would be triggered in the event of “internal fraud” by staff, where any cryptocurrencies were “stolen by fraud”. The Plaintiff maintained that two occurrences in the present case amounted to fraud falling within the purview of cl 1.2:
[47] The Plaintiff claimed that following the events above, D1 was obliged under cl 1.2 to indemnify him for the quantum of cryptocurrencies reflected in the daily report issued on “the day before … such adverse event”. As Zee’s fraud came to light on 9 February 2021, the Plaintiff took this to be the day on which the adverse event occurred, meaning that the daily reports to be used for ascertaining the size of D1’s indemnity obligation were those issued the day before, ie, on 8 February 2021. The 8 February 2021 daily reports in turn set out the Plaintiff’s balances as at the end of 7 February 2021. According to these daily reports, the Plaintiff held balances in three cryptocurrencies: USDt, BUSD and BNB. He listed the balance for each of these cryptocurrencies as at the end of 7 February 2021, as reflected in the 8 February 2021 daily reports, and ascribed a US dollar value to each balance, as per the table below. He then summed up all three dollar values to peg his total loss at US$9,122,044:
The Plaintiff claimed that D1’s refusal to honour cl 1.2 of the Service Agreement and indemnify him for this sum, being the Plaintiff’s loss from the fraud, constituted a breach of contract.
[48] Apart from relying on D1’s alleged breach of the Service Agreement, the Plaintiff also claimed that D1 owed a “fiduciary, contractual or tortious duty” to the Plaintiff to supervise Zee. The Plaintiff claimed that D1 failed to do so, thereby allowing Zee’s fraud to injure the Plaintiff.
The Plaintiff’s claims against D2
[49] The Plaintiff also claimed against D2 for breach of warranty of authority. In this respect, the Plaintiff’s case was that:
(a) D2, in holding himself out on his LinkedIn profile as D1’s “Managing Director”, as well as in allowing himself to be held out on D1’s website as D1’s “director”, warranted that he had the authority to act on D1’s behalf;
(b) the Plaintiff entered into the Service Agreement in reliance on that warranty; and
(c) D2 breached that warranty by now denouncing the Service Agreement.
While not explicitly framed as such in his pleadings or submissions, this claim for breach of warranty of authority was advanced as an alternative to the Plaintiff’s principal claims against D1. In other words, it would only be if the Plaintiff failed to establish that D2 (or Zee, for that matter) had the authority to bind D1 to the Service Agreement that the issue of breach of warranty of authority by D2 would come into play.
[50] As with D1, the Plaintiff similarly claimed that D2 owed the Plaintiff a duty to supervise Zee. The Plaintiff claimed that this was a “tortious duty”, arising from D2’s capacity as D1’s managing director and Zee’s supervisor in Snap Vietnam, as well as from D2’s capacity as CEO of Torque. The Plaintiff claimed that D2 breached this duty by the following derelictions:
(a) D2 delegated to Zee the authority to run and manage Snap Vietnam, thereby allowing Zee to surreptitiously misappropriate the Plaintiff’s cryptocurrencies.
(b) D2 allowed Zee to commingle the cryptocurrencies which the Plaintiff had deposited for the Cryptotrage scheme with those of Torque’s investors. As Torque’s CEO, D2 should have suspected that something was amiss upon discovering cryptocurrencies in the Binance Account belonging to persons other than Torque’s investors.
The defences
[51] In furtherance of their position that the Executed Paper Copy (bearing D2’s wet-ink signature) never existed, the Defendants emphasised that the Executed Paper Copy was never adduced in court and argued that the Plaintiff should consequently be regarded as having failed to prove it. As for P1, this was a printout of the E-Copy, which in turn purported to be a copy of the Executed Paper Copy. The Defendants argued that the Plaintiff failed to discharge his burden of establishing the E-Copy as an authentic copy of the Executed Paper Copy. With authenticity not having been established, the E-Copy (and hence P1) was consequently inadmissible as evidence of the Executed Paper Copy.
[52] D1 further submitted that even if D2 had executed the Service Agreement, neither D2 nor Zee possessed actual or ostensible authority to sign it on D1’s behalf. Notwithstanding their titles of “director”, both men were in truth merely independent contractors with no authority to bind D1 to the Service Agreement.
[53] As regards the Plaintiff’s claim that D2 breached his warranty of authority, D2 maintained that he never professed to be an agent of D1. In any case, no such warranty could have been made by him to the Plaintiff, given that both men never met prior to the signing of the Service Agreement. D2 pointed out that while the Plaintiff may have culled some details about him from online sources, the Plaintiff made no serious effort to verify them with proper sources.
[54] D1 also argued that even if the Service Agreement was validly concluded on its behalf, the guarantee in cl 1.2 was never triggered. This clause would have come into operation only in instances of “internal fraud by any staff of the Cryptotrage group”, where digital assets were “stolen by fraud”. D1 argued that both instances of fraud alleged by the Plaintiff – (a) the commingling of the Plaintiff’s cryptocurrencies with those of Torque’s investors; and (b) Zee’s theft of the cryptocurrencies – were insufficient to trigger cl 1.2, for the following reasons:
(a) As regards the commingling of cryptocurrencies, D1 argued that this was not an instance of “fraud” as there was no evidence of Zee having ever been prohibited from using the Binance Account to house deposits from investors outside the Cryptotrage scheme (such as Torque’s investors). In any case, the particulars of the alleged commingling were never pleaded.
(b) As regards Zee’s alleged theft of the cryptocurrencies, the Defendants argued that this did not constitute “internal fraud by any staff” of D1, given that Zee was not D1’s “staff” but merely an independent contractor. More importantly, there was no evidence to show just how much of the cryptocurrency deposits in the Binance Account had been depleted or withdrawn by Zee, nor to indicate whether the cryptocurrencies allegedly depleted or withdrawn in fact belonged to the Plaintiff (as opposed to, say, Torque’s investors). That being the case, the Plaintiff’s cryptocurrencies could not be regarded as having been “stolen by fraud”.
[55] The Defendants also rejected the suggestion that they were under any duty to supervise Zee. D1 argued that the Plaintiff’s AEIC and submissions completely failed to disclose any legal basis for such a duty. D2 argued that it was not incumbent on him to supervise Zee, as neither Zee nor D1’s operations in Vietnam were under his charge.
[56] Finally, the Defendants contended that the Plaintiff failed to properly quantify his damages:
(a) Firstly, there was no evidence as to how much cryptocurrency deposits remained in the account after Zee’s alleged fraud. The Defendants contended that if substantial amounts remained, the Plaintiff’s claim in this action would be premature. The Plaintiff had filed a proof of debt with Torque’s liquidators in respect of his cryptocurrencies in the Binance Account. Allowing his claim against the Defendants at this juncture could result in him acquiring a windfall, should he eventually recover some or all of his cryptocurrencies from Torque’s liquidators .
(b) Furthermore, the Plaintiff had calculated his losses based on the cryptocurrency balances as set out in the daily reports for 8 February 2021. However, those daily reports were unreliable, given that the Plaintiff himself pleaded that they were “completely bogus”.
Issues to be determined in this case
[57] Against the backdrop of the parties’ respective claims and defences, as set out above, the following issues arise for my determination:
The following sections will address each of these issues in turn.
Issue 1: Whether the Service Agreement was proven to have been signed by D2
[58] The Executed Paper Copy was never adduced in court. The Plaintiff claimed that it remains within the possession of the Defendants, who have refused to pass the same to him. The Plaintiff had served on D2 a notice to produce the Executed Paper Copy but D2 (unsurprisingly) failed to do so. The Plaintiff thus resorted to proving the existence of the Executed Paper Copy by adducing P1, ie, a printout of the E-Copy sent by Zee. A fundamental premise of the Plaintiff’s case was thus that the E-Copy (and hence P1) was a faithful reproduction of the Executed Paper Copy.
[59] Having carefully considered the Plaintiff’s evidence, I find that he has failed to establish that the Service Agreement was signed by D2. For the Plaintiff’s case to succeed, he must at the very least show that the Executed Paper Copy, bearing D2’s wet-ink signature, exists. I am not persuaded that the Plaintiff has succeeded in doing so, for the following reasons:
(a) Firstly, the Plaintiff failed to abide by the relevant evidential procedures for proving the Executed Paper Copy. Given that primary evidence of the Executed Paper Copy was not forthcoming, he needed to demonstrate that the statutory requirements for adducing secondary evidence of the same were fulfilled – this he failed to do.
(b) Secondly, even if the Plaintiff is entitled to adduce secondary evidence of the Executed Paper Copy, the putative secondary evidence in this case – the E-Copy (manifested in paper form as P1) – was not shown to be authentic. The E-Copy and P1 were consequently inadmissible in evidence.
[60] I explain these findings below.
Whether the Plaintiff failed to abide by the evidential procedures for proving the Executed Paper Copy
[61] Section 66 of the Evidence Act (Cap 97, 1997 Rev Ed) (“EA”) provides that documents must be proved by way of primary evidence (unless an exception in s 67 of the EA applies, in which case the relevant document may be proved by way of secondary evidence). In this respect, s 64 of the EA explains what constitutes primary evidence:
Thus, primary evidence of the Executed Paper Copy (and its contents) would have been the Executed Paper Copy itself.
[62] If one accepts the Plaintiff’s case that:
that would mean that the E-Copy constitutes secondary evidence of the Executed Paper Copy. This much is clear from a reading of s 65 of the EA, which states:
[63] The Plaintiff nevertheless sought to argue that the E-Copy is primary evidence. In doing so, he alluded to Explanation 3 to s 64 of the EA, which states that:
I reject this contention as Explanation 3 is clearly inapplicable to the present context. The E-Copy sent by Zee was, by the Plaintiff’s case, a copy of the Executed Paper Copy. Yet, there was no evidence showing how Zee had derived the E-Copy from the Executed Paper Copy, and thus nothing to show that the E-Copy did “reflect” the Executed Paper Copy (whether “accurately” or at all).
[64] The Plaintiff further submitted that the E-Copy was primary evidence by virtue of s 116A of the EA. For ease of reference, the relevant parts of s 116A of the EA are set out below:
[65] I find the Plaintiff’s argument difficult to comprehend. For a start, he did not attempt to explain which subsection in s 116A of the EA he was relying on. Given the dearth of elaboration, I can only assume that he was referring to subsection (1), given that subsections (2) and (3) appear to have no application to the present facts. Even on that premise, I find it difficult to see how subsection (1) has any bearing on the Plaintiff’s contention that the E-Copy was primary evidence of the Executed Paper Copy. Applied to the present context, all subsection (1) does is to presume that the communication of the electronic record (ie, the E-Copy in this case) over Telegram was accurate. There is nothing controversial about this – even the forensic experts from both sides found no reason to question the integrity of the transmission process over Telegram. However, accurate transmission simply meant that the E-Copy received by the Plaintiff and Kenneth Chan over Telegram was the same as what Zee had sent over Telegram. That conclusion bears no relation to the crucial link which the Plaintiff must establish, as between the E-Copy sent by Zee over Telegram and the Executed Paper Copy from which the E-Copy was purportedly derived. Accurate transmission of the E-Copy from Zee over Telegram could not, in and of itself, transform the status of the E-Copy into primary evidence of the Executed Paper Copy. I fail to see how the operation of s 116A of the EA can possibly culminate in that result.
[66] The upshot of the above is that the E-Copy was, at best, secondary evidence of the Executed Paper Copy. That being so, what would have been the appropriate route by which the E-Copy could be admitted (as secondary evidence) under the EA? Some guidance can be found in the remarks of Belinda Ang J (as she then was) in Jet Holding Ltd and others v Cooper Cameron (Singapore) Pte Ltd and another [2005] 4 SLR(R) 417 (“Jet Holdings”) (at [146]):
[67] At first blush, it would appear that a possible pathway by which the E-Copy could be admitted as secondary evidence of the Executed Paper Copy lies in s 67(1)(a) of the EA. That provision allows secondary evidence to be given of the existence, condition or contents of a document that is admissible in evidence, if the original appears to be in the possession or power of one of the following three categories of persons:
and that person does not produce the original despite having been served with a notice in s 68 of the EA. Given the Plaintiff’s endeavour to use the Executed Paper Copy as evidence against the Defendants, whom he claims to be withholding the Executed Paper Copy from him, the relevant limb of s 67(1)(a) of the EA would potentially have been limb (i). Alternatively, if the Executed Paper Copy was somehow sent to Zee, another potentially relevant limb would have been limb (ii) (on account of Zee being “out of reach”).
[68] I venture the observations above with a highly tentative tone because, apart from the fact that they are made without the benefit of argument, it was not the Plaintiff’s case that s 67(1)(a) of the EA allowed the E-Copy to be admitted as secondary evidence. Rather, he insisted that ss 65 to 67 of the EA were “not relevant” because the E-Copy was conferred the status of primary evidence by operation of s 116A of the EA. The Plaintiff declared that “once the Plaintiff satisfies the requirements of section 116A of the EA, sections 65 to 67 [of the] EA falls away.” In short, he had placed all his eggs in the s 116A basket and jettisoned any prospect of leveraging on s 67(1)(a) of the EA. In light of this, the evidence needed to establish the circumstances described in limbs (i) or (ii) of s 67(1)(a) of the EA was either not led or – if it had been led – lay buried in the documents without having been unearthed and deployed in aid of arguments that may have persuaded me to admit the E-Copy under those provisions. At this juncture, it is appropriate to echo one of the holdings in Jet Holdings (at [149]–[151]):
[69] Given the Plaintiff’s misplaced reliance on s 116A of the EA to adduce the E-Copy as primary evidence, as well as his failure to demonstrate why the statutory requirements for admission of secondary evidence were satisfied, the conclusion must be that evidence for proving the Executed Paper Copy and its contents has not been properly admitted in this case.
Whether the Plaintiff’s documentary evidence was authentic
[70] If I am wrong in my conclusion above, and the Plaintiff is entitled to adduce secondary evidence of the Executed Paper Copy, that evidence would have to be the E-Copy (manifested in paper form as P1). Even then, the Plaintiff would in my view have failed to establish the authenticity of the E-Copy (and hence P1), meaning that that this piece of documentary evidence would have been inadmissible in any case.
[71] The law draws a distinction between adduction and authentication of documentary evidence. Just because a document is adduced in court (whether by way of primary or secondary evidence), this does not mean that it must be regarded as authentic. In CIMB Bank Bhd v World Fuel Services (Singapore) Pte Ltd and another appeal [2021] 1 SLR 1217 (“CIMB v World Fuel”), the Court of Appeal held (at [52]–[54]):
The Court of Appeal in CIMB v World Fuel also cited with approval (at [51]) the following remarks by Ang J in Jet Holdings (at [146]):
[72] In the present case, the Defendants challenged the authenticity of P1 (and, by extension, the E-Copy), maintaining that D2 never signed the Service Agreement. In doing so, the Defendants put the authenticity of the E-Copy and P1 into issue. As observed in CIMB v World Fuel (at [36] and [54]):
Consequently, even if the E-Copy (and hence P1) is admitted as secondary evidence, the Plaintiff must still defend the challenge to its authenticity.
[73] If the E-Copy (and hence P1) is found not to be authentic, it will not be admissible in evidence. In Mustaq Ahmad (alias Mushtaq Ahmad s/o Mustafa) and another v Ayaz Ahmed and others and other appeals [2024] SGHC(A) 17 (“Mustaq Ahmad”), the Appellate Division of the High Court stated (at [169]) that “authenticity is a necessary condition of admissibility”. The Appellate Division also endorsed (at [169]) the following observations by Vinodh Coomaraswamy J in Super Group Ltd v Mysore Nagaraja Kartik [2018] SGHC 192 (at [53]):
[74] With the above principles in mind, I now assess the issue of authenticity of the E-Copy and P1.
The burden of proving authenticity versus the burden of proving forgery
[75] In general, a party who asserts that a document is authentic bears the burden of proving that document’s authenticity: see CIMB v World Fuel at [37] and [70]. In Mustaq Ahmad, the Appellate Division held (at [160(b)]):
The basis for placing the burden of proof on the party advocating that the document is authentic lies in s 105 of the EA, which sets out the default rule that the burden of proof as to any fact lies on the person wishing the court to believe in that fact’s existence: CIMB Bank Bhd v Italmatic Tyre & Retreading Equipment (Asia) Pte Ltd [2021] 4 SLR 883 at [73].
[76] However, the practical application of that rule may prove challenging in a case such as the present, where authenticity has been challenged on the basis that the document concerned was forged. While the law is clear that the burden of proving authenticity lies on the party asserting that the document in question is authentic, it is also clear that the burden of proving forgery lies on the party asserting that the document was forged. In Alwie Handoyo v Tjong Very Sumito and another and another appeal [2013] 4 SLR 308 (“Alwie Handoyo”), the Court of Appeal held (at [157]):
[77] Consequently, where authenticity is challenged on the ground that the document was forged (which I imagine is not an uncommon ground for challenging authenticity), the issue of the document’s authenticity and the question of whether the document was forged are apt to be closely intertwined. That would in turn make it difficult to tell where the Plaintiff’s burden (to prove authenticity) ends and where the Defendants’ burden (to prove forgery) begins. This difficulty appears to have been recognised by the Court of Appeal in Sudha Natrajan v The Bank of East Asia Ltd [2017] 1 SLR 141 (at [42]):
[78] I would suggest that when a party seeks to tender a document which the opposing party alleges to be forged, the assessment of the competing evidence could possibly be structured according to the following steps, to ensure that the relevant burden of proof is properly allocated:
(a) One first needs to ask if the tendering party has adduced sufficient evidence to establish the document’s provenance. If there is such evidence and the evidence would – if uncontroverted – suffice to establish the document’s provenance on a balance of probabilities, the tendering party will have established authenticity unless the same is challenged by the opposing party.
(b) If the opposing party challenges the document’s authenticity, the initial area of focus should be on that portion of his case which does not go toward alleging forgery, eg, evidence which seeks to cast doubt on the tendering party’s account of how he came to possess the document. At this stage of the analysis, the court should assess if, notwithstanding the countervailing evidence from the opposing party, the tendering party’s evidence as to the document’s provenance still suffices to discharge the latter’s burden of proving authenticity on a balance of probabilities. If the answer is ‘no’, the tendering party’s case on authenticity fails even without delving into the issue of forgery.
(c) If the answer to the question posed at step (b) above is ‘yes’, authenticity will be considered as having been prima facie established, unless the opposing party proves his allegation of forgery. Once the analysis reaches this stage, the opposing party must discharge his burden of proving forgery on a balance of probabilities. To do so, his evidence would have to go beyond merely “poking holes” in the tendering party’s case on provenance – something which would already have been done at step (b) above without success. Rather, the focus must shift to that aspect of the opposing party’s evidence which relates specifically to his allegation of forgery, eg, handwriting expert testimony indicating that a signature was irregular; computer forensic analysis showing that tampering occurred; circumstantial evidence suggesting that someone had both reason and opportunity to manipulate the document; etc.
The practical application of the framework above may prove challenging, especially when it is not entirely clear whether the opposing party’s evidence should be regarded as merely discrediting the claimant’s case as to provenance, and therefore dealt with at step (b), or as alleging forgery and thus dealt with at step (c). Be that as it may, given how the burden of proof has been assigned at law, it remains necessary to properly earmark who needs to prove what.
[79] Useful guidance can be gleaned from the Court of Appeal’s decision in Wibowo Boediono and another v Cristian Priwisata Yacob and another and other appeals [2018] 2 SLR 481. In that case, the appellants alleged that the respondents owed a debt which was evidenced by a signed note and an undated cheque. The appellants claimed that one of the respondents signed the cheque as security for the debt. The respondents contested this, alleging (inter alia) that the signatures on the cheque and note were forgeries. The lower court dismissed the appellants’ claims on this point, holding that they failed to discharge their burden of proving that the cheque and note were authentic. This finding was reversed on appeal, where the Court of Appeal remarked (at [52]–[54]):
One sees from the passage above that the Court of Appeal spoke about the respondents’ burden to prove forgery only after alluding to the appellants having adduced evidence as to the documents’ provenance. The Court of Appeal observed that the cheque indisputably originated from the second respondent’s chequebook. It is also evident from the case that the signature concerned looked like the respondent’s. On the back of those facts, the Court of Appeal found that the provenance of the cheque had been established to a prima facie standard. It was against this backdrop that the Court of Appeal proceeded to consider if the respondents had discharged their burden of proving forgery.
[80] Reverting to the present case, I am of the view that even at step (a) of the framework in para 78 above, the Plaintiff has failed to discharge his burden of establishing the authenticity of the E-Copy. There was nothing to show how Zee got his hands on the E-Copy, and still less to show that the E-Copy was indeed derived from the (putative) Executed Paper Copy. The only evidence tying the E-Copy to D2 was Zee’s Telegram message (at para 22 above) in which Zee claimed that the Service Agreement had been signed by D2. That statement by Zee was hearsay, but even if it could be admitted (eg, under the hearsay exception in s 32(1)(j)(ii) of the EA, on account of Zee being untraceable), the weight to be given to that statement would be negligible. By the Plaintiff’s own account, Zee was a fraudster who had absconded with millions of dollars in digital assets. In my view, Zee’s statements do not suffice to establish a prima facie case as to the provenance of the E-Copy.
[81] Even if I am wrong and Zee’s hearsay statement can be regarded as prima facie establishing the E-Copy’s authenticity, I take the view that the Plaintiff still fails at step (b) of the framework in para 78 above. In other words, the Defendants have, quite apart from their evidence that the E-Copy was forged, successfully cast doubts on the E-Copy’s provenance:
(a) Firstly, I agree with D2’s submission that the Plaintiff’s entire hypothesis of how P1 came to be handed to Schmidt made no sense. It was the Plaintiff’s case that D2 was in Singapore during the early morning hours of 27 May 2019, during which he executed the Service Agreement. The Plaintiff postulated that after execution, the Executed Paper Copy was scanned to produce the E-Copy, which D2 sent to Zee over Telegram that very morning at 8.27am. About a minute after that, at 8.28am, Zee forwarded D2’s message (which enclosed the E-Copy) to the Plaintiff over Telegram, via the message in the conversation chain extracted at para 22 above. This meant that the very last location of the Executed Paper Copy must have been D1’s office in Singapore, where D2 allegedly appended his wet-ink signature. There was no suggestion of the Executed Paper Copy having been couriered to Zee in Vietnam after it was signed by D2, or to anywhere else for that matter. That being the case, when Schmidt came to D1’s Singapore office to collect a copy of the signed Service Agreement on 3 June 2019, one would have expected Kenneth Chan to simply pass him the Executed Paper Copy bearing D2’s wet-ink signature. Why was that not done? Instead, Kenneth Chan had to wait for the E-Copy to be sent via Telegram from Zee in Vietnam, notwithstanding that the Executed Paper Copy would already have been sitting in the Singapore office. There was no apparent reason for such contrived circularity. It was not as if D2 needed to keep the Executed Paper Copy (bearing D2’s wet-ink signature) for his own records, given that record-keeping would have entailed D2 maintaining a copy of the contractual documents bearing the wet-ink signature of the counterparty (ie, the Plaintiff) rather than that of himself.
(b) Secondly, the evidence suggests that D2 could not have affixed D1’s corporate stamp on the Service Agreement. D2’s uncontroverted testimony was that he did not have access to D1’s corporate stamp. Dr Ting similarly testified that only Dr Ting and D1’s Operation Manager had access to the corporate stamp, which was kept under lock and key. I also note that it was not the Plaintiff’s case that D2 had purchased a duplicate of D1’s corporate stamp (which had a rather generic design) to apply to the Service Agreement.
In light of these factors, the conclusion which I would draw at step (b) of the framework in para 78 above is that the Plaintiff’s evidence as to the provenance of the E-Copy has been sufficiently discredited, to the point that the Plaintiff must be regarded as having failed to discharge his burden of proving the authenticity of the E-Copy (and hence of P1). That conclusion can be sustained without having to venture into the Defendants’ evidence of forgery.
[82] In seeking to establish the authenticity of the E-Copy, the Plaintiff (yet again) sought to rely on s 116A of the EA. As explained at para 65 above, I rejected the Plaintiff’s attempt at using s 116A to confer upon the E-Copy the status of primary evidence. As regards his attempt to now invoke s 116A of the EA to establish the E-Copy’s authenticity, I similarly find his arguments to be misconceived. He contended that s 116A of the EA creates a presumption that the Service Agreement is authentic, submitting as follows:
As alluded to above, I am prepared to accept that s 116A(1) of the EA operates to create a presumption that the electronic record was accurately transmitted over Telegram. However, that only meant that the E-Copy received by the Plaintiff and Kenneth Chan in their respective devices over Telegram faithfully corresponded to what was sent by Zee from his device. That had no bearing on the issue of the E-Copy’s authenticity, which would centre on whether the E-Copy sent from Zee’s device faithfully corresponded to the Executed Paper Copy, from which the E-Copy was allegedly derived.
[83] If I am wrong in my analysis above and the Plaintiff can be regarded as having established a prima facie case that the E-Copy is authentic, notwithstanding the doubts over its provenance, the next step would be to address the Defendants’ claim of forgery, as per step (c) of the framework at para 78 above. At that stage, the burden would fall squarely on the Defendants to prove, on a balance of probabilities, that the E-Copy (and hence P1) was forged.
[84] In that respect, I find that the Defendants have succeeded in establishing forgery. My finding is broadly premised on two grounds:
I elaborate on each of these grounds in turn.
Evidence of the documentary experts on the issue of forgery
[85] D2’s documentary expert was James Tan, a Senior Forensic Consultant with Infinity Forensics Pte Ltd. The Plaintiff’s documentary expert was William Pang, a handwriting analyst from HFDE Services Pte Ltd.
[86] Both experts approached the issue of whether the E-Copy was forged primarily by examining P1, being the physical manifestation of the E-Copy. Both experts focused heavily on features within the third page of P1, particularly (a) D2’s signature; and (b) the handwritten words “Bernard Ong. Managing Director, Snap Innovations (Singapore)”. The third page of P1 has been reproduced at para 29 above, but I set out below an enlarged snapshot of the relevant section of that page, for ease of visualisation:
I have encased the ending portion of the handwritten word “Innovations” within the green rectangle, as this was the subject of some focus in the Defendants’ expert evidence. As for D2’s purported signature, one sees a stroke extending upwards and touching the letter “p” in the typed word “Operations” and another stroke extending downwards and touching the letter “a” in the handwritten word “Bernard”. I have circled both these points of contact in red, as they were the subject of some focus in the Plaintiff’s expert evidence.
(1) James Tan’s expert opinion
[87] James Tan took the view that P1 was “modified”, with D2’s signature and the purported handwritten words on the third page having been copy-pasted. His conclusion was based principally on two observations.
[88] Firstly, James Tan found it significant that the black dot situated to the right of the handwritten word “Innovations” fell on the right side of the vertical black bar, at the third page of P1. To him, this suggested that the black dot, and by extension the handwritten words and signature purportedly penned by D2, were copy-pasted. To illustrate James Tan’s point, I have magnified the section encased within the green rectangle in the snapshot extracted at para 86 above:
James Tan took the view that the black dot was part of the handwritten word “Innovations” – this was evident from the similarity in colour between the handwritten word and the dot. As such, if the Executed Paper Copy ever existed, it would have borne not only D2’s wet-ink signature and the handwritten words, but the black dot as well – all of which, according to the Plaintiff’s case, were penned by D2 on the third page. Critically, James Tan postulated that it was the process of scanning the Executed Paper Copy to create the E-Copy which generated the vertical black bar in the E-Copy, with that bar reflecting the right-most edge of the Executed Paper Copy’s third page as the latter was being scanned. This meant that it would have been impossible for any feature on the third page of the Executed Paper Copy (such as the black dot) to manifest itself within the E-Copy as being situated to the right of the vertical black bar. The very fact that the black dot appeared in the E-Copy (and hence in P1) as lying to the right of the vertical black bar suggested that the black dot could not have been captured from scanning the Executed Paper Copy. Rather, the black dot (and by extension the handwritten words and D2’s signature) on the E-Copy must have been pasted on an electronic copy of the Service Agreement, as follows:
(a) A copy of the Service Agreement (without D2’s signature and handwriting) must have first been scanned, thereby creating an electronic copy in which the vertical black bar was generated by the scanning process.
(b) Thereafter, D2’s signature, as well as the handwritten words and accompanying black dot, must have been pasted onto that electronic copy, thereby creating the E-Copy in which the black dot was positioned to the right of the vertical black bar.
[89] Secondly, James Tan observed that the image of the corporate stamp in P1 was relatively sharp, while the signature of D2 was blurry in comparison. This further supported the inference that D2’s signature in P1 was not authentic.
(2) William Pang’s expert opinion
[90] In contrast, William Pang took the view that there was “no indicia of forgery” in P1. He concluded that neither D2’s signature nor the handwritten words on the third page of P1 was copy-pasted. He supported this conclusion with the following observations:
(a) There were no “suspicious lines” suggestive of the signature having been copy-pasted.
(b) A signature that was copy-pasted would typically be transposed onto an area where it could be clearly displayed. However, D2’s signature on the third page was appended at a spot where it overlapped with the typed word “Operations” above it and the handwritten word “Bernard” below it, as seen in the two red circles within the magnified image at para 86 above.
[91] William Pang also sought to bolster his opinion by relying on what transpired when the Plaintiff’s solicitors tried to procure specimens of D2’s signature and handwriting from D2’s solicitors. Specifically, during the interlocutory exchanges, the Plaintiff’s solicitors wrote a letter to D2’s solicitors asking for, inter alia:
The date 27 May 2019 is significant because that was the date on which, according to the Plaintiff’s case, D2 had signed the Service Agreement (see para 20(c) above). Any specimen of D2’s signature or handwriting existing as at that date would show what D2’s signature and handwriting looked like when he allegedly executed the Service Agreement. However, D2’s solicitors replied to this request in the negative, by way of a letter stating that D2 did not have possession, custody or power over the documents sought. Given this negative reply, the Plaintiff had to procure samples of D2’s signature from other sources. The Plaintiff ultimately managed to obtain copies of five documents signed by D2 on various dates post-27 May 2019, which were then furnished to William Pang as specimens for the latter’s forensic analysis. In his expert opinion, William Pang referred to the negative reply from D2’s solicitors and concluded that if D2 himself did not possess any specimens of his own signature that were penned before 27 May 2019, this meant that there would have been no source from which D2’s signature could have been copied at the point the Service Agreement was signed, thereby weakening the suggestion that his signature was copy-pasted on the E-Copy.
[92] A substantial portion of William Pang’s expert observations centred on highlighting similarities between the specimens of D2’s signature (procured by the Plaintiff) on the one hand, and what was alleged by the Plaintiff to be D2’s signature and handwriting in P1 on the other. In reliance on these similarities, William Pang drew the following conclusions:
(a) As regards the signature on the third page of P1, there was “very strong support” that it was penned by the person who signed the specimen signatures (ie, D2). In particular, there were various similarities in characteristics exhibited by both the signature in P1 and the specimen signatures.
(b) As regards the handwritten words “Managing Director, Snap Innovations (Singapore)”, it was “likely” that those were also penned by the person who signed the specimen signatures (ie, D2). William Pang drew support for this conclusion from two traits exhibited in D2’s specimen signatures:
(i) The first was the signature’s long descending stroke – looking at the signature in the extract at para 86 above, this would be the stroke dipping down and touching the word “Bernard” (see the lower red circle).
(ii) The second comprised the two dots to the right of the signature.
William Pang noted that both traits could also be discerned in the handwritten words “Managing Director, Snap Innovations (Singapore)”, in that the person writing these words also had a habit of using long descending strokes and ending each sentence with a dot.
(3) My conclusion on the expert evidence
[93] I begin with William Pang’s evidence that D2’s signature and the handwritten words on the third page of P1 were likely penned by the person who signed the specimen signatures, ie, D2.
[94] I am prepared to agree that the signature on the third page of P1 was that of D2. However, that conclusion is beside the point, given that the thrust of D2’s defence was not that the signature in P1 did not belong to him, but that it was copy-pasted.
[95] As for William Pang’s suggestion that it was “likely” that the handwritten words “Managing Director, Snap Innovations (Singapore)” on the third page of P1 were penned by D2, I find this to be unpersuasive. I bear in mind the guidance offered by the V K Rajah JA in Sakthivel Punithavathi v Public Prosecutor [2007] 2 SLR(R) 983 (at [76]):
To recapitulate, it was D2’s position that the handwritten words on the third page of P1 were not in his handwriting. I agree with the Defendants’ submission that to test that position, the handwritten words in P1 should have been compared against samples of D2’s handwritten words. However, that was not the approach taken by William Pang, who compared the handwritten words in P1 with samples of D2’s signature. Given that it was difficult to discern any legible letter of the alphabet from D2’s signature, what William Pang embarked on was clearly not a like-for-like comparison. Furthermore, the similarities were cursory at best. William Pang relied on two traits in D2’s signature: (a) the single stroke dipping downwards; and (b) the two dots at the end, observing that the handwritten words similarly had some characters with long descending strokes and ended with a dot after each line. In my view, it does not take an expert to appreciate that features such as long descending strokes and ending dots are generic handwriting traits. It might have been different if William Pang had offered his expert views not only on the presence of the descending strokes and ending dots in the handwritten words, but also on any similarities in appearance which these features, as they appeared in D2’s specimen signatures, bore to the corresponding features in the handwritten words. No such analysis was performed, notwithstanding that William Pang embarked on such an analysis when comparing D2’s specimen signatures with D2’s purported signature in P1. In my judgment, the parallels drawn between D2’s specimen signatures and the handwritten words “Managing Director, Snap Innovations (Singapore)” fell far short of justifying William Pang’s conclusion that the handwritten words were “likely” to have been written by D2.

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

Baizanis, Georgios v Snap Innovations Pte Ltd and another

Laws this judgment relies on

Grounds of decision

The Facts

The Plaintiff’s factual evidence

How the Plaintiff came to invest in the Cryptotrage scheme

Signing of the Service Agreement

Theft of the Plaintiff’s cryptocurrencies and the aftermath

The Defendants’ factual evidence

Framing of the Issues

The Plaintiff’s claims against D1

The Plaintiff’s claims against D2

The defences

Issues to be determined in this case

Issue 1: Whether the Service Agreement was proven to have been signed by D2

Whether the Plaintiff failed to abide by the evidential procedures for proving the Executed Paper Copy

Whether the Plaintiff’s documentary evidence was authentic

The burden of proving authenticity versus the burden of proving forgery

Evidence of the documentary experts on the issue of forgery

(1) James Tan’s expert opinion

(2) William Pang’s expert opinion

(3) My conclusion on the expert evidence