The Micro Tellers Network Ltd and others v Cheng Yi Han and others [2023] SGHC(I) 13

Introduction

This action was commenced in the High Court (HC/S 916/2019) on 13 September 2019 and was transferred to the Singapore International Commercial Court (“SICC”) as SIC/S 5/2020 (“Suit 5”) on 27 July 2020.

The first plaintiff (“Micro Tellers”) is a company incorporated in Hong Kong whose sole director and shareholder is Charles Cuong Tan-Thatch (“Charles”). Charles is a successful businessman who initially worked for Societe Generale in New York and Hong Kong and who, since 2016, has pursued business ventures on his own behalf including various cryptocurrency projects. One of the major projects in which he was involved in his capacity as the chief cryptocurrency officer of Asia Innovations Group (“AIG”) was an Initial Coin Offering (“ICO”) of a cryptocurrency token called “Gifto”.

As Charles explained in his second affidavit of evidence-in-chief (“AEIC”):

The second, third and fourth plaintiffs are Singaporean citizens each of whom is also a successful businessman. They met in 2014 or 2015 through a network called Entrepreneurs’ Organisation and together became interested in cryptocurrency investments, more specifically in ICOs, and pooled their resources for such investments. During the trial, the second plaintiff was referred to as “Michael”, the third as “Rio” and the fourth as “Clement”. Together they were referred to as “the Regional Group”. I shall do the same.

Until 16 September 2020, the plaintiffs’ claims were made only against the first three Defendants, Cheng Yi Han (“Yi Han”), Ling Hui Andrew (“Andrew”) and Providence Asset Management (“PAM”), a company incorporated in the Cayman Islands, of which Andrew is a director and shareholder. I shall refer to these three defendants together as “the Initial Defendants”.

Yi Han did not give evidence. His relationship with Micro Tellers was described by Charles after they had first met in late 2017 in Charles’ second AEIC:

Clement also met Yi Han in late 2017 and together with the other Regional Group members supported Yi Han in various ICOs in late 2017 and early 2018 which were successful. Clement stated that by February 2017 “[he] enjoyed working with Yi Han and considered him a friend who could be trusted” and that “[o]verall, I was impressed with Yi Han”.

Andrew did give evidence. He explained his relationship with Yi Han as follows in his second AEIC:

Background

The plaintiffs’ claims against the Initial Defendants

The plaintiffs’ claims against the Initial Defendants arose out of two incidents referred to in these proceedings as “the Europe Transaction” and “the Private Bank Acquisition”. I shall have to go into greater detail in relation to these incidents later.

In simple terms, however, the Europe Transaction occurred in April 2018. It involved a proposed trade of Bitcoin (“BTC”) purchased by the Initial Defendants with the authority of the Regional Group using funds supplied by them which were held in PAM’s bank account. The intention was that those BTC should be sold to buyers in Europe (“the Buyers”) at a profit, the consideration being €5m which was to be paid in cash. In the event, it turned out that the banknotes supplied (“the Banknotes”) were forgeries. The Regional Group claimed that the Initial Defendants were liable to them in deceit, breach of duty and/or trust, unjust enrichment, conspiracy and negligence. Micro Tellers was not involved in the Europe Transaction.

The Private Bank Acquisition involved both sets of plaintiffs. In the case of the Regional Group, following the failure of the Europe Transaction, there were some US$2m of the Regional Group’s funds remaining in PAM’s bank account which the Group asked to be returned. This was not done and it was asserted that the Initial Defendants had misappropriated the funds by using them without the Group’s authority as part of the Private Bank Acquisition. Again, relief was sought based on deceit and other related claims.

In the case of Micro Tellers, it did authorise the Regional Group to use some US$2.7m of the funds deposited by it in the PAM bank account as part of the Private Bank Acquisition but, it was asserted, this was done following various false representations made by the Initial Defendants to Charles. Once again, claims were made in deceit and other related claims.

In their Defence, again in very simple terms, the Initial Defendants sought to place the blame for any misdoings upon Then Feng (“Feng”), now the fourth defendant.

Suit 8 – the action between the Initial Defendants and Then Feng

Unbeknown to the plaintiffs, on 2 July 2019, PAM (and a related company 5 and 2 Pte Ltd (“5&2”)) had brought proceedings in the High Court (HC/S 653/2019) against Feng and his wife, Lee Moon Young (“Moon”). On 29 September 2020 the plaintiffs in that action discontinued the claim against Moon. Thereafter that action was transferred to the SICC on 13 October 2020 as SIC/S 8/2020 (“Suit 8”).

In Suit 8, the plaintiffs (“the Suit 8 Plaintiffs”) contended that they had been induced to provide funds for the purpose of the Private Bank Acquisition by certain false representations made to them by Feng. Some of the funds advanced were monies deposited in the PAM bank account by the plaintiffs in this action and which are the subject of the claims in relation to the Private Bank Acquisition incident.

Although the plaintiffs in this action became aware of the fact that the Initial Defendants were seeking to place the blame on Feng, prior to transfer to the SICC they did not seek to join Feng as a defendant nor did the Initial Defendants seek to join him as a third party.

Once the two Suits were transferred, since it was apparent that similar causes of action based on facts which overlapped arose, a joint CMC was heard at which it was ordered that the two cases should be tried together and thereafter the plaintiffs in this action were given leave to join Feng as a defendant.

The two actions came for trial before me on 14 June 2021. The subsequent history of the trial is set out in [1]–[13] of the judgment subsequently given in Suit 8 on 22 September 2021 – The Micro Tellers Network Ltd and others v Cheng Yi Han and others and another suit [2021] 5 SLR 328:

As indicated in that passage, all findings made in that action, particularly since Feng elected not to give evidence, can have no impact on the determination of the issues in this case. It is, regrettably, necessary to start again. But what may be relevant and admissible are the details of the settlement agreements reached between the plaintiffs and (a) Andrew, PAM and 5 &2 on 7 May 2021 (“the PAM SA”) and (b) Yi Han on 15 June 2021 (“the Yi Han SA”). For convenience redacted copies of these agreements are annexed to this judgment: see Annexes A and B. So far as concerns the PAM SA, it is cl 1.1–1.4 which are particularly relevant:

In the case of the Yi Han SA, the material clause is cl 1:

In both agreements the plaintiffs’ rights to continue this action against the (then) remaining defendants were specifically reserved.

The persons involved

Then Feng

Feng qualified as a solicitor in England in 2007 having had a training contract at a leading London firm of solicitors for whom he then worked. In all he was with that firm for four years when he moved to New York where he was employed for about a year by an equally prestigious US law firm. In 2011 he returned to Singapore and was employed as an assistant solicitor by Walkers Singapore LLP. Walkers Singapore LLP is affiliated to an international law firm based in the Cayman Islands called Walkers and there are other affiliated offices around the world including one in London. All representatives of those affiliates used a common email domain name – “walkersglobal.com”. Unless it is necessary to distinguish between the different affiliates I shall refer to “Walkers” simpliciter. Feng’s contract of employment with Walkers Singapore was terminated in or about November 2018.

As well as working for Walkers Singapore, Feng also carried on business on his own behalf using (apparently) a number of Singapore and offshore companies. In particular, the company at the centre of the events underlying the Private Bank Acquisition is a company which was incorporated in June 2015 in the British Virgin Islands under the name Walkers Professional Services Limited (“WPS”). The necessary arrangements for setting up the company were effected by Feng but Moon was named as the sole director and shareholder. WPS had no connection with Walkers.

In addition to Suit 8, Feng has been a party to other civil litigation in Singapore and is currently a defendant in a criminal trial in the State Courts. The existence of the latter caused difficulties in allowing Feng to comply with his obligations on discovery in this action and resulted in the late disclosure of a number of documents, some of which were admitted and others which were not.

Lee Moon Young

As indicated above, Moon was initially a defendant in Suit 8 but the action against her was discontinued before the trial. She was not originally a defendant in Suit 5. Following judgment in Suit 8, an application was made to join her as a defendant in this action on two grounds: dishonest assistance in relation to Feng’s alleged unlawful acts in relation to the Private Bank Acquisition and conspiracy with Feng to commit those acts. Following a hearing, the application was allowed by me in a decision given orally on 18 May 2022 but which has subsequently been reduced to writing (“the Oral Judgment”): see Annex C. I concluded at [47]–[48] of the Oral Judgment that although the grounds pleaded raised at best a tenuous case for her liability, it was not “doomed to failure” which counsel for Moon accepted was the threshold test.

Moon is a Korean citizen and she and Feng were married in May 2015. On their return from their honeymoon Feng asked her to become the sole director and shareholder in WPS, which she agreed to do, and she was the only authorised signatory of the WPS bank account. It is these factors which underlie the case against Moon.

The witnesses

Evidence was adduced for the plaintiffs by Charles on behalf of Micro Tellers and by Michael, Rio and Clement on behalf of the Regional Group. No criticism was made of the manner in which they gave their evidence.

The principal witness for the Regional Group was Andrew and for the fourth defendant it was Feng himself. In the course of cross-examination, it became apparent that both witnesses have little hesitation in telling lies in the course of their business dealings when it is in their commercial interests to do so. In consequence I was asked in oral submissions on behalf of the plaintiffs to decline to place weight on Feng’s testimony when in conflict with Andrew’s and to prefer the latter’s. Feng, in his closing submissions, made the opposite submission.

I do not need to go into the details of the various untruths that were disclosed; suffice it to say that I am satisfied in the circumstances the better route to reaching conclusions as to where the truth lies is to have regard to the contemporaneous documents in seeking to resolve conflicts of evidence.

In addition, the plaintiffs adduced evidence from Frederic Willy Gaillard, a former business partner of Feng with whom he had fallen out. Mr Gaillard gave evidence on the first day of the original trial, 14 June 2021, before the hearing was adjourned as a result of the settlements. He did so at the request of the plaintiffs as he had been convicted of a criminal offence relating to one of his business dealings and was due to be imprisoned later in that week.

Mr Gaillard swore two AEICs. I excluded much of the first on the basis that it consisted of inadmissible hearsay and a good deal of the remainder of his evidence was of peripheral relevance. Where I see fit to make reference to his evidence, I shall give my reasons for doing so and the weight to be placed on it at the appropriate place.

Finally, Moon gave evidence in relation to the case pleaded against her and was cross-examined on her AEICs. In closing submissions little criticism was made of the totality of her evidence and I shall deal with this when considering the issues that arise.

The Europe Transaction

The Europe Transaction took place in Nice, France, on 26 April 2018 (it was completed on the evening of 26 April 2018, French time, which was early morning on 27 April 2018, Singapore time). Since this was prior to the events leading up to the Private Bank Acquisition I propose to deal with it first. Micro Tellers was not involved and no claim is made by the Regional Group against Moon in relation to it.

As indicated in [10] above, no claim was made initially by the Regional Group against Feng. The Initial Defendants were the sole defendants. Feng was joined as a defendant by amendment on 16 September 2020 and the claims against him were expressly made as being additional to or in the alternative to the claims made against the Initial Defendants. Following the settlement with the Initial Defendants, the Statement of Claim (“SOC”) was further amended on 27 May 2022 so as to delete the claims made against the Initial Defendants and to focus the claims made against Feng.

Three claims are made against Feng:

(a) Breach of duties (“the Europe Duties”) owed by Feng to the Initial Defendants, acting in their capacity as agents for the Regional Group. Those duties were owed by Feng acting in his capacity as a solicitor of Walkers engaged by the Initial Defendants to carry out various duties.

(b) Breach of fiduciary duties owed by Feng directly to the Regional Group by reason of his voluntary assumption of the Europe Duties in circumstances giving rise to a relationship of trust and confidence (“the Europe Fiduciary Duties”) .

(c) Negligence:

In cross-examination Andrew accepted that Feng was not engaged in his capacity as a solicitor of Walkers in relation to the Europe Transaction and that he was acting solely in his private capacity. In consequence by letter dated 13 March 2023 the solicitors acting for the plaintiffs indicated that they would not be pursuing the allegations made in relation to his conduct as a solicitor in paras 59–60 and 67–68 of the SOC. It necessarily follows that in so far as para 62 relates to Feng’s alleged duties as a solicitor that this was also not being pursued.

The case against Feng thus rests on the alleged voluntary assumption of the Europe Fiduciary Duties by him in his private capacity in circumstances giving rise to a relationship of trust and confidence and/or negligence in his failure to carry out the Europe Duties with reasonable skill and care.

Breach of fiduciary duties

The pleadings

There are three alleged Europe Duties set out in the SOC:

(a) To ensure that the Regional Group BTC will not be released to the Buyers until payment was duly made;

(b) To carry out due diligence on and engage a competent and professional security firm which would verify that payment was duly made; and

(c) To procure and/or ensure the procurement of valid insurance and/or ensure that the security firm which was engaged had valid insurance, such that the Initial Defendants (acting as agents of the Regional Group) would be fully indemnified against any losses arising from the Europe Transaction.

The alleged Europe Fiduciary Duties are set out in the SOC and can be summarised as being the duty to be honest and act in good faith in the interests of the Regional Group, not to advance his own or other external interests in conflict with the interests of the Regional Group and to ensure that the Regional Group’s assets were not misappropriated.

Four reasons are given for alleging that Feng owed the Europe Fiduciary Duties to the Regional Defendants:

(a) The Regional Group was vulnerable to the actions of Feng. The Regional Group would not be present in person at the conduct of the Europe Transaction, and had no contact with the security firm to be engaged to verify that payment had been duly made. The Regional Group relied on Feng to carry out the Europe Duties.

(b) Feng had the power to affect the Regional Group’s interests by causing the Regional Group BTC to be released even if payment had not been duly made.

(c) Feng voluntarily undertook to carry out the Europe Duties and act in the interests of the Regional Group, in circumstances giving rise to a relationship of trust and confidence.

(d) Feng had actual and/or constructive knowledge that the Regional Group BTC used for the Europe Transaction belonged to the Regional Group and/or the owners of the Regional Group BTC.

The alleged breaches of the Europe Fiduciary Duties are set out in the SOC:

(a) Feng advised or otherwise caused the release of the Regional Group BTC without ensuring that payment had been duly made. The Banknotes were found to be counterfeit.

(b) Feng engaged SGS Security & Logistik Gesellschaft GmbH (“SGS GmbH”) on behalf of the Initial Defendants (acting as agents of the Regional Group) without carrying out due diligence, and did not ensure that SGS GmbH was competent and fit for the intended purpose of verifying that payment had been duly made.

(i) The paid-up capital of SGS GmbH was only 20,000 Swiss francs.

(ii) SGS GmbH used different company logos on different documents.

(iii) There were no contractual documents establishing the terms of engagement between the Initial Defendants (as agents of the Regional Group) and SGS GmbH.

(c) Feng failed to procure and/or ensure the procurement of valid insurance and/or ensure that SGS GmbH had valid insurance, such that the Initial Defendants (acting as agents of the Regional Group) would be fully indemnified against any losses arising from the Europe Transaction.

(i) The Initial Defendants (acting as agents of the Regional Group) have not been compensated for the losses arising from the Europe Transaction.

(ii) SGS GmbH has failed, neglected and/or refused to indemnify the Initial Defendants (as agents of the Regional Group) for their losses arising from the Europe Transaction.

In his Defence Feng asserts that he had only a limited knowledge of and involvement in the Europe Transaction and denies that he was ever engaged to perform the Europe Fiduciary Duties or that he held the BTC and/or the euros on trust.

The law

It is necessary to identify the manner in which the law determines (a) when a fiduciary relationship exists between a fiduciary and a third party or parties and (b) what the duties are that equity imposes on a fiduciary once identified.

The underlying principles of law are well settled and are not in dispute.

The relevant law was well summarised in the Plaintiffs’ Written Closing Statement which I gratefully adopt. It reads:

In relation to the Europe Transaction, since it is now accepted that Feng was not acting in his capacity as a solicitor, particular attention has to be directed to the question of whether Feng had voluntarily been placed or had placed himself in the position of a fiduciary.

In this respect I was invited to place weight on the suggested analogy between the facts of this case and those in Tan Teck Kee v Ratan Kumar Rai [2022] 2 SLR 1250 (“Tan Teck Kee”). In that case, some investors wished to purchase land in Cambodia and designated the defendant, Mr Tan, to be their representative on the ground in Cambodia to oversee the purchase. The plaintiff, Mr Rai, contended that Mr Tan had significant oversight and control over the purchase such as to give rise to fiduciary obligations. On the facts it was held that Mr Tan had undertaken to manage the purchase and that substantial sums had been paid into his personal bank account. He had thus voluntarily undertaken a position with a high degree of control over the investors’ interests.

At [68]–[69] of Tan Teck Kee, Steven Chong JCA said this:

He continued at [74]:

He concluded at [77]–[78]:

Once there is a finding that a person has voluntarily undertaken fiduciary obligations to the beneficiaries and the nature of the obligations which arise have been identified as a question of fact, the law then imposes a duty enforceable in equity on the trustee to conduct themselves in carrying out those obligations in good faith so as to advance and protect the interests of the beneficiaries.

The facts

In simple terms the Breach of Fiduciary Duties allegation is founded on the assertion that Feng played a pivotal role in the Europe Transaction analogous to the of Mr Tan in Tan Teck Kee. In his closing oral submissions, Mr Adrian Tan (“Mr Tan”), counsel for the plaintiffs, asked the rhetorical question “who is the major figure in this” and asserted that it was Feng on the basis that he was “in the centre of it” and had placed himself in a position where he had control and undertook to “[give] the green light” to the transfer of the BTC.

This is denied by Feng who asserts that he was only peripherally involved. He accepts that he introduced the Initial Defendants to Stefan Lange-Juergen (“Stefan”) (generally referred to as “Stefan Lange” or simply “Stefan”), a Swiss banker, who was a contact that he had made as a result of previous business transactions. It is therefore necessary to make findings of fact as to the parts played by the various parties in the Europe Transaction so as to place the activities of Feng into context. I shall start by considering the facts relating to the setting up of the transaction and then those relating to its implementation.

(1) Setting up of the transaction

In the case of the Regional Group the principal part was played by Clement and his primary point of contact was Yi Han. By late January or early February, Clement and Yi Han had established a good working relationship and they discussed whether there were other ways of making money through cryptocurrencies apart from ICOs. Clement said this in his AEIC:

Thereafter members of the Regional Group made inquiries to satisfy themselves that Yi Han and Andrew could be trusted to hold the Group’s money in the PAM bank account. They were eventually satisfied that they could be trusted in part by a representation that the PAM bank account held a balance in excess of US$78 million. This representation was false and thus reflects badly upon Yi Han and Andrew and is one of the reasons that caution must be exercised when assessing the weight to be attached to statements made on oath by Andrew and due notice taken of the fact that Yi Han did not give evidence. However, there is no suggestion that Feng was in any way involved with the affairs of PAM or with the Regional Group’s decision to place funds with PAM.

Yi Han informed Clement that the proposed Europe Transaction would be carried out in the following manner:

Yi Han stated that the Initial Defendants would engage a professional security firm to ensure that the notes were legitimate and, following discussions with Clement, confirmed that insurance had been taken out. Yi Han also made a false representation that the deal would be done through the same broker as the Initial Defendants had used for a previous transaction. However, again, Feng was not involved in the making of these representations.

In cross-examination Clement made it plain that he had never met or corresponded with Feng, that the only person he corresponded with prior to the discovery that the Banknotes were false was Yi Han and that he left all decisions on how to verify that the Banknotes were genuine to Yi Han.

The evidence of Michael and Rio confirmed that the primary contact so far as the Regional Group was concerned was between Clement and Yi Han.

In summary, so far as the Regional Group is concerned, it is accepted that that they were unaware until after the event of the existence of Feng or that he played any part in the arrangements for the Europe Transaction. Their original AEICs, filed before the hearing of this action was adjourned because of the settlements, were directed to the then-subsisting claims against the Initial Defendants and not to the claim against Feng. Each of their assertions in their respective second AEICs that Feng played a pivotal/central/key role in the Europe Transaction was surmise on the basis of what they had been told by Yi Han and Andrew subsequent to June 2019.

So far as concerns the Initial Defendants, Yi Han did not give evidence. The overall nature of the part that he played can however be discerned from the documents and the evidence of other witnesses. He was the primary point of contact with the Regional Group and appears to have been the one who started the negotiations with the counterparty to the Europe Transaction, one J C Roguet (“JC”). In his second AEIC Andrew stated that he could not recall whether the suggestion of the deal came from Yi Han or Feng. In cross-examination he was shown an e-mail of his dated 29 April 2018 in which he gave details of the manner in which the Initial Defendants were introduced to JC and on reviewing it said this:

Earlier in the cross-examination, Andrew accepted that Feng was not in contact with JC or Yi Han, that Yi Han was in contact with the Regional Group and that he, Yi Han, and a person called Leonard Lee Kah Yeen (“Leonard”), a business associate of Yi Han and Andrew, were in contact with JC. On the basis of this evidence, I am satisfied that Feng was not the person who suggested the deal and that he had no contact with JC.

In his second AEIC Andrew deposes to the parts played by the various parties in making the arrangements for the Europe Transaction:

In cross-examination, Andrew accepted that Feng was involved in his personal capacity and not in his capacity as a solicitor and asserted that he relied on Feng’s expertise and contacts.

In order to place the remainder of Andrew’s cross-examination into context so far as it concerns Feng’s involvements in the arrangements, it is necessary to consider Feng’s evidence as well.

In his first AEIC Feng’s evidence concerning the part in the preparations for the transaction was brief. He said this:

The fees involved for the introduction were €250,000. In his second AEIC, Feng disputes much of Andrew’s narrative of the events leading up to the transaction which is summarised in his second AEIC as follows:

In the closing submissions attention was focused on the part played by Feng in the appointment of SGS and his alleged responsibility for and failure to satisfy himself as to (a) the standing and repute of SGS and (b) that SGS carried the necessary insurance cover.

So far as concerns KippCo, no reliance is placed in the pleadings by the Regional Group on the part played by Feng. It is common ground that KippCo was appointed to carry out the banking and transfer of the money. In cross-examination it was put to Feng that it was Stefan who introduced KippCo and Feng agreed to this.

Whilst there was some debate as to when the Investment Contract between KippCo and PAM (dated 17 April 2018) was actually signed, nothing turns on this and I shall not consider it further.

The full name of SGS is SGS Security & Logistik Gesellschaft GmbH and the dealings with it were through their Zurich office. The contemporaneous documents relating to the appointment of SGS consist mainly of WhatsApp messages passing between members of a number of different chat groups. From the chat group which contained Andrew and JC it can be seen that initially, it was intended to use a security company called Brinks to handle the money and the change to SGS is recorded in a chat from Andrew at 10.16pm on 19 April 2018.

Andrew received the following information from Feng earlier on 19 April 2018 as is shown in this extract from the chat between them:

The reference to the Banker is a reference to Stefan. As indicated above it was Feng who introduced Stefan to Andrew and Feng knew Stefan as a result of previous successful business ventures in Europe. Equally it is not in dispute that Stefan was a Swiss Banker working for HSBC and in oral closing submissions Mr Tan accepted that there was no suggestion that Stefan was anything other than a respectable Swiss banker. As with Feng, it was agreed that Stefan would receive €250,000 for the part that he was to play in the arrangements for the transaction once it has been successfully transacted.

It was at one time suggested that by the use of the term “Banker”, Feng was seeking to hide the identity of Stefan from Andrew. This does not appear to be the case as his name is freely used in other chats: see [86] below.

Feng suggests that Stefan dealt directly with Andrew to arrange the services of SGS whereas Andrew asserts that the introduction to SGS was effected by Feng with no mention being made of the part played by Stefan. There are no documents prior to the date of the failed transaction which indicate any direct contact between Stefan and Andrew and I therefore reject the suggestion that there was any such contact. But, equally it is clear that Andrew was well aware of Stefan’s existence, that he was a Swiss banker and that he was being relied upon to establish a relationship with SGS.

In cross-examination, Andrew agreed that while Stefan was introduced by Feng it was Stefan that arranged for SGS to be the security company.

The only evidence which suggests that SGS was not a competent security firm comes from Mr Gaillard. Mr Gaillard stated that he had recommended that Feng should hire a reputable security firm such as “Ferrari, Malca Amit, Brinks or SGS (Société Générale de Surveillance SA)”. He goes on to say that subsequently he found out that Feng had hired SGS and not the French SGS company. Whilst he states that he referred to SGS, meaning the French company, he does not state that he told Feng that he had in mind a French company rather than a Swiss entity using the same initials, SGS, and it was not suggested to Feng in cross-examination that he did.

Feng stated in cross-examination that it was Stefan who had contacts with SGS and that in one of their previous dealings Stefan had used SGS:

When Andrew became aware that SGS services were going to be used he did a Google search which revealed the existence of SGS and it appeared to him to be a big company such that he did not see the need to ask for any insurance papers. He confirmed that he did not become aware that there was also a French security company using the initials SGS:

It is thus clear from the documents that SGS was appointed on the recommendation of Stefan. The evidence does not establish that any of the participants had any reason to believe that SGS was not an efficient security company and none was aware that there was an alternative French security company trading under a name including the initials SGS.

Further there is no indication in the documents that Feng was ever asked to carry out a due diligence investigation into SGS nor that he volunteered to do so.

Turning then to the question of the part played by Feng in relation to the insurance cover provided by SGS, the Regional Group is unable to point to any documentary evidence in support of the assertion that Feng was charged by Andrew to ensure that SGS carried adequate insurance cover. The furthest Andrew could state was that Feng had told him that SGS was fully insured. The matter was expanded upon in cross-examination from which it is clear that it was Stefan and not Feng who made the representation concerning insurance cover and that Andrew never thought of asking Feng for any documents from SGS evidencing the indemnity coverage because of the Google search he did on SGS.

On the basis of the foregoing, I find, on the balance of probabilities that in relation to Feng’s involvement in the making of the arrangements for the transaction, the facts were as follows:

(a) Feng used his previous relationship with Stefan to obtain his assistance in making arrangements for the security aspects of the transaction and agreed with Andrew the basis on which he would be rewarded for that assistance on the successful conclusion of the Transaction.

(b) The sum agreed was a substantial sum amounting to €250,000.

(c) Stefan was a respectable Swiss banker who was also going to be rewarded by payment of €250,000.

(d) Stefan selected SGS as the security company because he had had previous dealings with them.

(e) Andrew himself did a Google search to satisfy himself that SGS was a reputable company and did not ask or rely on Feng to do a due diligence search into SGS.

(f) Feng did not volunteer to carry out a due diligence investigation into SGS.

(g) At no time was there any belief on the part of either Andrew, Stefan or Feng (or any of the other participants) that SGS was anything otherwise than a reputable company.

(h) Andrew did not ask or rely on Feng to obtain any documents verifying SGS’s insurance coverage.

(i) Feng did not volunteer to obtain any documents verifying SGS’s insurance coverage.

(2) The implementation of the transaction

The Banknotes, which turned out to be counterfeit, were handed over in Nice, France on the evening of 26 April 2018. At the time Andrew was in the People’s Republic of China, Feng was in Malaysia, Stefan was in Switzerland and Leonard was on the ground in Nice. The interaction between them is contained in a series of WhatsApp messages divided between three groups. The first involved Andrew and Feng, the second involved Andrew, Yi Han and Shawn Lin (a business colleague of Andrew and Yi Han) (“the PPG group”) and the third involved Andrew, Feng, Stefan and Leonard (“the Nice group”).

These contemporaneous documents provide the best record of how the events of that day progressed and are to be preferred to any documents prepared subsequently after it was discovered that the Banknotes were counterfeit or to the recollections of individuals sometime later.

The Nice group was formed at 10.10pm (Singapore time) on 26 April 2018 between Andrew, Feng and Leonard. Stefan was added at 11.34pm. The following extracts from that chat group demonstrate the relationship between the participants and the part each played over the next few hours.

The documents referred to in those interchanges can be seen as attachments to a report written by Leonard on or before 29 April 2018.

The comment by Stefan at 24/7/18, 1:37:23 AM (underlined above) was copied and pasted into the PPG group by Andrew a few moments later and thereafter the BTC were transferred:

The written and oral evidence of Andrew and Feng does not add anything to this. It is fair to say that in his evidence Andrew sought to maximise the part played by Feng and Feng sought to minimise it. Andrew did however accept that (a) Leonard was instructed by and answerable to PAM through Andrew, and not by Feng, and (b) that it was Stefan, not Feng, who confirmed that risk had passed to SGS which gave Andrew comfort to conclude the deal.

So far as concerns Feng, his statements to the effect that he was merely a conduit for the passing of information between Andrew and Stefan was challenged on the basis that he was being promised a great deal of money if the deal went through for playing such a limited part. This would indeed appear to be the case but the amount of money cannot alter the state of affairs as disclosed in the documents.

Finally, there was a good deal of evidence directed to the part that Feng played in seeking to assist in recovering the money and/or claiming on the SGS insurance policy. This was relied upon in the Plaintiffs’ Closing Statement as being one of the matters that Feng was responsible for. I do not believe that the evidence supports this. Once it was discovered that the Banknotes were counterfeit all the parties appear to have pulled together to try to recover their loss. I shall not however go into this in any detail as I fail to see what the relevance is to the alleged breaches of Feng’s duties pleaded in the SOC which all relate to his conduct leading up to the release of the BTC: see [41] above.

Drawing this all together, I am satisfied on the balance of probabilities that during the events of 26 April 2018, Feng played only a minor part. The transaction was being overseen by Andrew. The money to be used to purchase the BTC which was then going to be transferred in return for the euros was in PAM’s bank account. The decision to transfer was made by the members of the PPG group, Andrew, Yi Han and Shawn. Affairs in Nice were handled by Leonard who took instructions from Andrew. It was Leonard who oversaw the testing and counting of the Banknotes.

Feng did offer advice that Leonard should not sign anything until Stefan had verified the authenticity of the SGS receipt documents, so that the risk would pass to SGS and be covered by its insurance, and that all documents should be on SGS’s letterhead. However, he played no part in giving the confirmation that the correct authentic documents had been obtained. This fell to Stefan who was in direct contact with SGS and it was following his confirmation that the risk had passed to SGS that the BTC were released. Those BTC were never under Feng’s control and he played no part in deciding to transfer them.

The analysis

With that I can return to the Regional Group’s cause of action. The Europe Fiduciary Duties are defined in the SOC as being, in essence, duties to act in good faith and to advance the interests of the Regional Group. It was asserted that the Regional Group relied on Feng to carry out the Europe Duties and that he voluntarily undertook to carry out the Europe Duties in circumstances giving rise to a relationship of trust and confidence.

This brings one back to the duties defined in the SOC as being the Europe Duties. There are three of them which for convenience I shall repeat here:

(a) to ensure that the Regional Group BTC will not be released to the Buyers until payment was duly made;

(b) to carry out due diligence on and engage a competent and professional security firm which would verify that payment was duly made; and

(c) to procure and/or ensure the procurement of valid insurance and/or ensure that the security firm which was engaged had valid insurance, such that the Initial Defendants (acting as agents of the Regional Group) would be fully indemnified against any losses arising from the Europe Transaction.

I turn then to assess the part played by Feng in relation to those three aspects of the transaction.

As to the first, Feng never had control over the BTC and was not present in Nice. The relevant documents were assessed by Stefan who discussed the matter directly with SGS. The only part that he played was in advising what documents should be obtained.

As to the second, Feng was never asked to carry out due diligence on SGS. He was tasked with using his contacts in Europe to identify a suitable security firm. This he did by introducing Stefan who in turn selected SGS and it was Stefan who then worked with SGS. Feng acted reasonably in identifying Stefan, as a reputable Swiss banker with whom he had enjoyed a successful business relationship. Such due diligence as was done was done by Andrew.

So far as concerns insurance, the evidence is clear. Andrew never asked Feng to look into the question of insurance; it appears to have been assumed by all parties that there would be insurance and any representation that there was insurance came from Stefan and not Feng.

In my judgment the part played by Feng in relation to the three alleged duties was a minor one. Overall control over the operation was exercised, remotely by Andrew and Yi Han and on the ground in Nice by Leonard. It cannot be said that Feng had any real degree of control either over the preparations for or carrying out of the operation. He provided assistance when this was sought but decisions in relation to his input were taken by one or other of those three. Feng was not a decision maker.

Applying the facts to the law

The relevant relationship was between Feng and Andrew, acting on behalf of the Initial Defendants. At all material times no member of the Regional Group was aware of Feng’s existence or that he was to play any part in the Europe Transaction and Feng was unaware that the Regional Group had provided the funds for the Europe Transaction. As the SOC makes clear, it is alleged that Feng was engaged by the Initial Defendants to carry out the Europe Duties and that they were acting as agents for the Regional Group. If therefore the Regional Group cannot establish that Feng owed the Europe Fiduciary Duties to the Initial Defendants, then its case must fail.

Since Feng was not acting in his capacity as a solicitor, any relationship between Feng and Andrew does not fall within any of the recognised categories of fiduciary relationships. It is thus necessary to determine whether there are “the hallmarks of a fiduciary relationship” by examining all the factual circumstances so as to evaluate the specific role played by the putative fiduciary and the degree of control which he exerted: see [45]–[50] above.

The facts as I have found them are in sharp contrast with the facts in Tan Teck Kee. In Tan Teck Kee, Mr Tan voluntarily undertook a position which possessed a high degree of control over the handling of the investors' interest in the Cambodian business venture (at [78]) and the investors were particularly vulnerable to Mr Tan's exercise of power. In the present case, Feng did not possess a high degree of control over the Europe Transaction; in truth he exercised little or no control. His input, when sought, was not that of a controlling mind but of a person seeking to assist the controlling minds, Andrew and Yi Han. It was they who made the crucial decisions having evaluated the material available to them, including that provided by Feng. This was not a case where it could be said that the other participants in the Europe Transaction were particularly vulnerable to Feng’s exercise of power. Rather, this was a case where the various participants in the transaction had their own roles to play in the team, with Feng playing a relatively minor role. Decision making was left to others.

On the basis of the facts as I have found them, I have concluded that the role played by Feng in the Europe Transaction, both in assisting in the preparations and participating on the day, fall way short of constituting conduct bearing the hallmarks of a fiduciary relationship. No such relationship existed between Feng and Andrew, so it must follow that the pleaded duties were not owed to the Regional Group.

For the reasons given therefore, the Regional Group’s claim for breach of fiduciary duties must fail.

Negligence

The applicable legal principles are not in dispute and are summarised in the Plaintiffs’ Closing Statement as follows:

Under the Spandeck test, factual foreseeability is in fact a preliminary inquiry that is almost always satisfied in that it relates to factual foreseeability, which simply means that the defendant ought to have known that the claimant would suffer damage from his carelessness (Spandeck at [75]). The main substance of the question of whether a duty of care arises is addressed at the stage of proximity.

The case of negligence is pleaded in the alternative in the SOC and the claim made against Feng in relation to his capacity as a solicitor has likewise been dropped. The substance of the pleading is based on the same factual assertions with regard to the Europe Duties. It reads as follows:

In their Written Closing Statement the plaintiffs express the position with regard to factual foreseeability in the following terms:

On the facts, I accept that Feng ought to have known that if he were careless in whatever his role in the transaction was, the plaintiffs might suffer damage. Hence, factual foreseeability is satisfied. However, the requirement of proximity is not satisfied in the circumstances of this case as Feng had not undertaken the Europe Duties, and the minor part that he did play was not sufficiently proximate to the loss suffered by the plaintiffs. Hence, a duty of care did not arise such as to render him liable in negligence.

The case based in negligence cannot succeed unless Feng had undertaken the Europe Duties which I have held that he did not. The case in negligence thus also fails.

The Private Bank Acquisition

Both Micro Tellers and the Regional Group bring claims against Feng in relation to his involvement in the Private Bank Acquisition but the underlying factual matrix is somewhat different. It is thus necessary to consider their respective claims separately.

Micro Tellers’ claims

Micro Tellers claim that Feng is liable to them (a) in fraud, (b) breach of trust and/or fiduciary duties and (c) unjust enrichment.

Fraud

The applicable principles are not in dispute and are summarised as follows in the Plaintiffs’ Written Closing Statement:

The representations relied upon are representations not made directly to Micro Tellers but to Andrew said to be acting as their agent which the plaintiffs contend is sufficient in law to constitute the intention required under (b) above as is set out in the Plaintiffs’ Written Closing Statement:

The representations relied upon are set out in the SOC as follows:

By his Defence, first, Feng asserts that at all times Andrew was aware that WPS was managed by Feng and used as his personal vehicle and that he did not represent that he offered legal services through WPS. Secondly he denies that he was ever aware of the existence of either Micro Tellers or the Regional Group or that the Initial Defendants were acting as their agents. Hence he denies that any representation that he may have made to the Initial Defendants was a representation made with the intention that it should be acted on by Micro Tellers or a class of persons which includes Micro Tellers. This raises a disputed question of law as well as issues of fact.

There are two issues of fact. First, what representations were made by Feng to the Initial Defendants in relation to WPS and the WPS bank account (“the WPS Issue”). Secondly, there are a number of factors arising out of or related to the allegation that there was an agency relationship between Andrew and Micro Tellers: (a) was there an agency relationship; (b) what knowledge if any, did Feng have of this; and (c) what knowledge did Feng have (if any) of the persons who were providing funds to PAM for the purpose of the acquisition? I shall refer to this as “the Agency Issue” although it is to be remembered that the test in law for fraud is, as set out above, an intention that the false representation should be acted upon “by a class of persons which includes the plaintiff”. Proof of agency per se may not constitute the requisite intention.

Breach of trust and/or fiduciary duties

Micro Tellers put its case in two ways. First it is said that Feng owed duties of trust to the Initial Defendants, as Micro Tellers’ agent, as a solicitor of Walkers to hold sums entrusted to him in that capacity “in escrow to the Initial Defendants’ order (in their capacity as agents of Micro Tellers), for the purposes of the Private Bank Acquisition”, and secondly that Feng had voluntarily assumed fiduciary duties towards the Initial Defendants, again acting as Micro Tellers’ agent, by reason of the part he played in negotiating the Private Bank Acquisition on behalf of the Initial Defendants. The particulars of alleged breaches of those duties relied upon are set out in the SOC. In summary, the breaches involved the false representation that the WPS bank account was owned and controlled by Walkers so that sums deposited therein would be held “in escrow” to Andrew’s order for the purposes of the Private Bank Acquisition. This enabled Feng to obtain the funds in the WPS account and was thus able to treat them as his own and to dissipate them for his own use.

Although expressed in different language, these particulars mirror the representations relied upon in relation to the fraud claim. The underlying law on the existence and breach of trusts was not in dispute.

The area of dispute between the parties lay in (a) the factual dispute as to the alleged misappropriation of the funds held in the WPS bank account, which is the same as the WPS Issue; and (b) the correct approach to the question of the circumstances in which a trustee owes an obligation to a third party unknown to the trustee but who is alleged to be a principal for whom the actual beneficiary is acting as agent. This raises questions of both law and fact, but the factual issues are equivalent to those raised under the Agency Issue.

It is convenient therefore to make findings of fact first before considering the questions of law that arise on the facts found under the Agency Issue both in relation to the fraud claim and the claim for breach of trust.

The WPS issue

The factual assertion made by Micro Tellers is that the Initial Defendants transferred money from PAM’s bank account to the bank account in the name of WPS in the erroneous belief, induced by Feng, that:

The starting point is when Feng and Moon, who were married in May 2015, returned from their honeymoon. On his return to Walkers Singapore’s offices Feng became aware that Walkers had announced a “Major Expansion in Response to Client Demand” dated 21 May 2015. Included within this expansion was to be the launch in mid-June of a corporate and fiduciary services business under the name “Walkers Professional Services”. This document contains the name Walkers in a particular typeface together with a shield type logo:

Shortly thereafter on 15 June 2015, WPS was incorporated at Feng’s instigation naming his wife as the sole director and shareholder. On 30 June 2015, Moon signed the necessary forms to open the WPS bank accounts with her as the sole signatory.

Feng was cross-examined at length on his motives for incorporating WPS under that name when it had no association with Walkers. The thrust of his evidence was that he thought it would be funny to adopt the name and did it as a joke, but that whenever he used the company to interact with clients of Walkers that he was already acting for, he would make it clear that WPS had nothing to do with the law firm, Walkers. Dealing through WPS, he said, arose when his clients requested him to do things that he could not do in his capacity as a solicitor; he would offer to do it in his personal capacity for a fee using his personal phone number and e-mail rather than his Walkers’ phone and e-mail address. He gave the example of the provision of assistance in obtaining a visa. He accepted that he never told his employer, Walkers, that he was carrying out services for Walker’s clients and receiving fees from them in his private capacity trading under the WPS name. He never sought to clarify the position with the partners of Walkers because he considered they would be grateful to him for solving problems for their clients which would lead to further business for Walkers.

There is however no evidence as to whether WPS was involved in any of Feng’s private dealings between June 2015 and February 2018 when Feng met Andrew. Far less is there any evidence demonstrating that Feng did act towards any client of Walkers in the manner indicated by him so as to leave that client in no doubt that the services provided by WPS were not provided under the auspices of Walkers.

Indeed, there is, to my mind, a significant illogicality in naming a company with a name that incorporates the name of your employer in circumstances where you accept that the first thing that you must do is to distinguish the company from your employer or as having any association with your employer. It does not make sense.

Drawing this together, I am satisfied that Feng’s motive in naming WPS was to enable him to draw upon the reputation and goodwill existing in Walkers’ business and upon his reputation as a solicitor employed by Walkers in order to further any private business which he could generate, particularly with entities that were already clients of his at Walkers. More specifically, it was calculated to lead to the belief that the WPS bank account was approved by Walkers and subject to its control.

The plaintiffs contend that this was the belief held by Andrew when the Initial Defendants started exploring business opportunities with Feng. Reliance is placed on contemporaneous documentary evidence as to how Feng explained the services that WPS could offer to Andrew and PAM at this time.

The first document (in time) is a WhatsApp exchange between Yi Han and Charles which it is agreed contains no date but is accepted to have been on 3 March 2018 when Micro Tellers and the Initial Defendants were considering certain BTC deals. Charles asserts that Yi Han told him “that the monies meant for the Private Bank Acquisition … would be held by Walkers Professional Services, which was owned and controlled by the law firm known as Walkers”.

This cannot be correct as on its face since the WhatsApp exchange relates to the purchase and sale of cryptocurrency and the opportunity to acquire a private bank was not first considered until April 2018. However, the contents of the exchange are nonetheless revealing:

Whilst this exchange does not refer to WPS, it is consistent with Feng and the Initial Defendants having formed a working relationship whereby funds would be held in escrow by Walkers.

The next document takes the form of a WhatsApp exchange between Andrew and Feng on 9 March 2018. It is a long extract but, in the light of Feng’s explanation as to how he would make it clear that WPS had nothing to do with the law firm Walkers, it is necessary to set it out in full:

It is plain from the language used that Andrew was seeking access to US$ Singapore bank accounts that could provide “escrow” services for the purpose of a proposed business activity and that Feng was representing that the services he offered were provided and authorised by his employer. This is demonstrated by the extract at timestamp 14:47 (“will speak internally”) and at 14:52 (“I have one off clearance to facilitate this for you”). Yet the bank account named is WPS’s US$ account and not an account controlled by Walkers which is not the impression created by the words used by Feng. These words are consistent, and only so, with Feng having obtained authority to provide the service. This was wholly unnecessary if WPS had nothing to do with Walkers and was controlled by him. This therefore contradicts any suggestion that Feng would have made it clear to Andrew that WPS had nothing to do with Walkers.

Andrew gave evidence that on the basis of this exchange he “believed that WPS was owned and controlled by Walkers, and was used by Walkers to provide escrow services for Walkers’ clients”.

This evidence was challenged on the basis that Feng had made it clear to Andrew before 17 February 2018 that Walkers “does not do escrow for btc (bitcoin)” as he relayed this information to Yi Han and Shawn in a WhatsApp exchange on that date:

Later, following the exchanges on 9 March 2018, on 19 March 2018 there was a further WhatsApp exchange between Andrew, Yi Han and Shawn which reads as follows:

In cross-examination, Andrew explained that as he understood it the concern about dealing in BTC was a concern of Walkers’ insurers, and that subsequently Feng had indicated to him that Walkers was doing this as a special arrangement with PAM which had resulted in other parties wishing to do the same, which upset Walkers.

Feng was in turn cross-examined on these documents. Much of this focused on the words “internal clearance” in the WhatsApp exchange of 9 March 2018 which Feng sought to suggest was his own internal clearance because he preferred to provide banking facilities through one of his other personal companies. As counsel for the plaintiffs pointed out it would have been easier to say that he had decided to facilitate this through WPS rather than that he had obtained clearance to do this.

I found this to be an unedifying aspect of Feng’s evidence. I prefer to place weight on the language actually used in the contemporaneous documents. To my mind, the words “internal clearance” coupled with the identification of the bank as being “Walkers Professional Services” is susceptible of only one understanding, namely, that Walkers had agreed for one of its bank accounts to be used for the proposed transaction.

Contemporaneously, steps were being taken for Terms of Engagement to be agreed between Walkers and PAM to provide Cayman legal advice and other professional services. The draft Terms of Engagement were headed with the name Walkers in the same typeface and shield type logo as in the document referred to in [124] above.

It was following this, in April 2018, that the question of purchasing a private bank arose. The bank in question was Alexandria Bancorp Ltd (“Alexandria Bank”), a company established in the Cayman Islands. According to Andrew the purpose of doing so was to obtain a cryptocurrency-friendly bank holding a banking licence to facilitate cryptocurrency transactions. Feng indicated that whilst he would be providing legal advice to PAM in his capacity as a consultant at Walkers, he also wished to invest funds in the purchase in his personal capacity. The legal advice was to be provided pursuant to the Terms of Engagement.

It will be necessary to consider the manner in which this proposed purchase progressed in more detail below but for present purposes it is sufficient to record that in preparation for the purchase, sums of money amounting to US$5,268,000 and S$1,223,000 were transferred from the PAM bank account to WPS’s bank account between April and November 2018. These sums included the money claimed in this action by both Micro Tellers and the Regional Group.

During the course of the dealings between the Initial Defendants and Feng over the proposed purchase, a number of documents and WhatsApp exchanges are relied upon by the plaintiffs as reinforcing Andrew’s belief that WPS was owned and controlled by Walkers. I shall refer first to two documents whose authenticity is challenged.

The first is an invoice issued bearing the Walkers’ name and logo dated 22 June 2018 which is reproduced below:

On its face this document purports to be an invoice issued by Walkers, the law firm, but seeking payment into the WPS bank account. The authenticity of this document is challenged by Feng.

The second is a summary of PAM assets (“The Account – Client Summary”) held as of 23 October 2018 which is reproduced below:

As can be seen, again, this uses the same Walkers’ typescript and logo but refers to money held in the WPS account. The authenticity of this document is also challenged by Feng,

As to the first, Feng challenged the authenticity of the invoice when it was first produced on discovery. In response Andrew produced photographs from his mobile phone showing that he received the invoice on 25 June 2018. Due to the fact that his phone had been impounded by the Singapore authorities as part of the criminal investigations involving Feng, the photographs were provided by the authorities. In cross-examination, Andrew explained the process by which he obtained the documents from the Singapore authorities and drew attention to Exhibit AL-10 showing an extract resembling the heading on the invoice and later a blurred image of the invoice. This material satisfies me, on the balance of probabilities, that the invoice is an authentic document which was sent to Andrew on 25 June 2018.

So far as concerns the Account – Client Summary, this was first referred to in Andrew’s first AEIC which was sworn on 21 May 2021 and it featured prominently at the trial of Suit 8. It was not suggested at that trial that the document was a forgery. No evidence was adduced in Feng’s witness statements in this action, sworn on 24 May 2021 and 4 June 2021, purporting to show that it was a forgery. No suggestion was made in Feng’s Written Submissions before trial that the document was a forgery and no further written evidence was sought to be adduced by Feng in support of a contention that the document was a forgery.

However, when Feng was cross-examining Andrew, he sought, in effect, to introduce evidence directed to demonstrating that the document was a combination of a number of underlying documents and not, of itself, a single genuine document. He sought to do this by an analysis of the metadata underlying the document.

Counsel for the plaintiffs objected to this course both on the ground that he had been taken by surprise by the late attempt to introduce this evidence and by the fact that, if it were to be given, it would constitute expert evidence which Feng was not qualified to give. The matter was ventilated fully at the end of day two of the trial and again at the beginning of day three. At the end of those submissions I informed parties that I was not going to allow cross-examination in relation to the metadata underlying the document and indicated that I would give my reasons in this judgment.

These are my reasons. Whilst I am deeply conscious of the fact that the burden falling on Feng as a litigant-in-person is a heavy one which was not made any easier by the concurrent criminal investigations, nonetheless he is a qualified lawyer who has been deeply immersed in these proceedings for many years. He claims that the first time he obtained the evidence necessary to demonstrate the forgery was in December 2022. This may be so, but it does not alter the fact that he must have known that it was not a genuine document when he first saw it disclosed on discovery. He must have appreciated during the trial of Suit 8 the importance that the plaintiffs in that action were placing on that document as supporting the assertion that Feng had falsely represented that WPS was part of Walkers. Yet he said nothing. Having seen the Judgment in Suit 8 which placed weight on the contents of the document, again he said and did nothing. He did not seek to adduce further evidence of fact nor seek leave to adduce expert evidence in this action. I am satisfied that if the matter were to be fully investigated, this would require an adjournment to allow further evidence, probably expert evidence, to be adduced. In circumstances where Feng could and, in my judgment, should have drawn the court’s attention to his contention that a document was a forgery at an early stage, even if at that stage he did not have the means of proof, I consider that it would be wrong in the overall interests of justice to prolong these proceedings further by an adjournment.

Following this, Feng continued his cross-examination on the document seeking to have Andrew agree that the document was in some respects inaccurate and to suggest that the inaccuracies were due to manipulation of the data by Andrew. However, this was directed to the figures in the document and not to the fact that it bore the Walkers’ name and logo and referred to an escrow account when it was common ground that the only sums held on behalf of PAM were held in the WPS account. When Feng was cross-examined on this, he maintained that the document was not a genuine document but accepted that he would have sent something similar to the document and that he had a template on his phone with the Walkers name and logo. More specifically in answer to questions from the court, he said this:

Accordingly, I can proceed on the basis that a document was sent similar to the Account – Client Summary document with the Walkers name and logo, possibly with the word escrow somewhere on it. Feng sought to suggest that the use of the Walkers’ name and logo was a joke between Andrew and him. This was never put to Andrew and runs contrary to the contemporaneous documents. I do not accept, on the balance of probabilities, that Andrew was aware of the fact that Feng misused the Walkers’ name and logo in the course of his private business.

To the contrary, I accept Micro Tellers’ submission that these documents served to reinforce in Andrew’s mind that WPS was a company associated with and controlled by Walkers solicitors.

The next relevant document is a WhatsApp exchange between Feng and Andrew dated 11 August 2018. In this exchange Andrew asks Feng to prepare a letter to Blue Summit (a corporate vehicle to be used by Micro Tellers to hold its share in the Private Bank once acquired) calling for the remaining funds to be transferred “into walkers trust account for imminent completion … ” [emphasis added] (“the Call for Funds Letter”). Feng responded by saying that he understood “the need to hold the funds on account till completion” [emphasis added]. Andrew then emphasised that “most impt is call for funds to walkers trust acc” and Feng undertook to have the letter on the “firm letterhead” [emphasis added].

Feng sought to suggest that this interchange was understood by both parties as being a document for internal use to placate Yi Han’s uncle to satisfy him to provide funds to PAM and that this was consistent with Feng’s understanding that PAM represented a family office.

Whilst it may well be that this was a purpose of having the Letter drafted on Walkers’ letterhead, it is clear from the text that the Letter was also to be sent to Blue Summit and expressly referred to the “Walkers trust account” on two occasions. The only natural understanding that flows from this is that Feng was acting in his capacity as a solicitor employed by Walkers and that the account in which the funds were to be held was a trust account controlled by Walkers.

The next document I should refer to is a Shareholders Agreement dated 8 October 2018 between Micro Tellers and Blue Summit Investments Ltd. Cl 2.1 reads as follows:

It is thus apparent that Micro Tellers were content to use the WPS bank account to hold the sums “on trust” pending the successful completion of the purchase of the offshore bank. It is a proper inference from this that Micro Tellers were working on the basis that the WPS bank account was controlled by Walkers, a regulated firm of solicitors used to handling client money. This is confirmed by a WhatsApp exchange between Yi Han and Charles on 4 October 2018:

I do not propose to refer to all the WhatsApp exchanges which the plaintiffs claim further reinforces this understanding. It is sufficient to quote from the Plaintiffs’ Closing Statement:

Feng sought to suggest that the reference to the word “accounts” was merely an attempt by him to make it appear that the size and scope of WPS’s operation was larger than it was. I do not accept this. The plain and ordinary meaning of the word “accounts” as used in the exchanges is consistent and only consistent with being a reference to the accounts department of Walkers.

The primary evidence relied upon by Feng as demonstrating that at all times Andrew was aware that WPS was Feng’s personal vehicle and that he was never under the impression that it was associated with Walkers lies in a Statutory Declaration sworn by Andrew in mid-June 2019. This is dealt with in Andrew’s first AEIC. In summary, Andrew accepts that he swore the declaration at Feng’s request on the basis that it would buy time to get the funds to repay the plaintiffs. Having signed it he was troubled about the fact that it was not true and took legal advice. As a result, he asked Feng to destroy the Declaration and Feng confirmed by a WhatsApp chat instruction to his solicitors to do so.

This evidence was not materially challenged in cross-examination and I accept it.

Although the initial proposal was to purchase Alexandria Bank, as matters turned out the Initial Defendants then turned their attention instead to seek to buy a Curacao bank, Banco Provincial and/or a bank in the Union of Comoros, Freelance Bank. Whilst Micro Tellers was aware of the change to the Curacao bank, it was unaware of the possibility of purchasing Freelance Bank. In the event it appears that only Freelance Bank was purchased for significantly less than the funds that had been deposited in the WPS account. Andrew thereafter sought a refund of the surplus sums in December 2018.

It is not necessary to follow the course of events between December 2018 and June 2019 during which Feng was requested to make the refund and failed to do so which led to the Initial Defendants commencing Suit 8 on 2 July 2019.

(1) Conclusion in relation to the WPS issue

Drawing all these aspects together, it follows that I find, on the balance of probabilities, that Feng did falsely represent to Andrew that WPS was a company associated with and controlled by Walkers and, accordingly, that at all times Andrew believed that funds paid into the WPS bank account from PAM would be held by Walkers in their capacity as solicitors for PAM to Andrew’s order. Had he been aware that WPS was Feng’s private company he would not have authorised the transfer of the funds from PAM’s account to WPS’s account. Accordingly, such sums as remained in the WPS account after the purchase of Freelance Bank would have been held by Walkers subject to their obligations as solicitors when holding clients’ monies and not by WPS which owed no such obligations.

Referring back to [116] above, I therefore find that that the Initial Defendants transferred money from PAM’s bank account to the WPS account in the erroneous belief, induced by Feng, that:

These remaining funds deposited in the WPS account included the sums claimed by both Micro Tellers and the Regional Group in this action.

The Agency Issue

The above representations were made by Feng to Andrew and it is not in dispute that Feng knew that Andrew was acting on behalf of the Initial Defendants. Micro Tellers’ pleaded case is that Feng also had actual or constructive knowledge that the Initial Defendants were acting as agents of Micro Tellers such that the representations would be transmitted to Micro Tellers and acted upon by the Initial Defendants on behalf of Micro Tellers.

Feng’s pleaded case is that Andrew told Feng that PAM managed the assets of only three families, Andrew’s, Yi Han’s and Shawn Lin’s and that he was not aware (a) of any relationship between PAM and Micro Tellers; (b) of the existence of any third party funds managed by PAM; (c) that any sums transferred to the WPS account belonged to Micro Tellers; and (d) that the Initial Defendants were acting as agents on behalf of Micro Tellers.

The first question is whether the Initial Defendants were acting as agents for Micro Tellers, ie, that Micro Tellers expressly authorised the Initial Defendants to act for them in respect of the funds it deposited with the Initial Defendants. The primary point of contact between Micro Tellers and the Initial Defendants was between Charles and Yi Han. Charles gives evidence as to the way in which the relationship between them developed and the representations that were made by Yi Han about the proposed purchase. Relying on those representations Micro Tellers transferred both fiat and crypto currency to the Initial Defendants on the understanding that the sums would be “held … on trust for me”. He was aware that Andrew had arranged for the monies meant for the Private Bank Acquisition to be “held by [WPS], which was owned and controlled by the law firm known as Walkers”.

Charles concludes by saying that “Micro Tellers did not communicate with [WPS] or Walkers Law Firm. It was the Initial Defendants who carried out such communication on behalf of Micro Tellers” and makes the assertion that thereby the Initial Defendants were acting as the agents of Micro Tellers in the Private Bank Acquisition.

He was cross-examined on this and confirmed that whilst Micro Tellers were aware of the change from the Alexandria Bank to the Curacao bank, Banco Provincial, it did not authorise the change to the Comoros bank, Freelance Bank, but his evidence with regard to his understanding as to the reasons for the arrangement of placing funds in the WPS account was not challenged.

Yi Han did not give evidence. However, Andrew did and he gave evidence that he and his other business partners, Shawn and Yi Han, were also involved in the idea of purchasing an offshore bank and that “Shawn, Yi Han and I would raise money from our business contacts to invest in buying such a bank”.

One of these business contacts was Micro Tellers and Micro Tellers placed money in the PAM account, which was controlled by Andrew. It was then Andrew acting on behalf of the investors and with their consent who was responsible for the day-to-day affairs relating to the purchase, including arranging for the purchase monies to be moved from PAM to WPS.

The defendants sought to argue that the Initial Defendants were not acting as agents in the purchase of the Freelance Bank because Micro Tellers had only authorised the purchase of the Alexandria Bank and then Banco Provincial. This however cannot alter the fact that in arranging and authorising the transfer of funds from PAM to WPS they were acting as agents for the principals, including Micro Tellers.

I therefore accept that the Initial Defendants were acting as agents for Micro Tellers when transferring funds from the PAM bank account to the WPS bank account.

The second question is the extent of Feng’s knowledge of the source of the funds that were transferred to the WPS account.

Feng gave evidence that when he first met Andrew, Andrew told him that PAM was a family office that only managed the assets of the three families and did not manage third party funds. In cross-examination Andrew accepted that he had told Feng that PAM was a family office but that there were many families who invested together with him and that “we function as like a simple family office, other families are together with us”. He made equivalent observations earlier in his cross-examination.

Feng was not cross-examined in any detail on his understanding of who the investors in PAM were. He stated that prior to his first meeting with Andrew he had been told by a friend, Darryl Tan, that he was in touch with a big family office in Singapore, that Leonard was the representative of that office and that its name was Providence Asset Management.

It was not suggested to Feng that he had any knowledge of Micro Tellers or of the fact that they were investors in the Private Bank Acquisition. The only document which suggests such knowledge is the Call for Funds Letter referred to at [158] above where reference is made to Blue Summit. It appears from this that Feng must have been aware that Blue Summit was a corporate vehicle for one or more of the investors but Feng asserts that it was represented to him in June 2018 that it was a company owned 50/50 by Andrew and Yi Han. Andrew accepts that as at June this was the case but asserts that Feng was aware that the shares in Blue Summit were to be spread out to others once the funds had come in. It is unclear on the evidence whether Feng was in fact aware of this.

Drawing this evidence together I find, on the balance of probabilities, that Feng’s knowledge of the persons involved in providing the funds for the Private Bank Acquisition was as follows:

Fitting the facts to the law

Fraud

I have set out the four requirements of the law on fraudulent misrepresentation in [114] above. First, there must be a representation of fact made by words or conduct. Here the crucial representation made by Feng to Andrew was that WPS was a company associated with and controlled by Walkers so that funds paid into the WPS bank account from PAM would be held “in escrow” by Walkers in their capacity as solicitors for PAM to Andrew’s order.

Second, the representation must be made with the intention that it should be acted upon by the plaintiff, or by a class of persons which includes the plaintiff. Plainly the representation was intended to be acted upon by Andrew so as to induce him to transfer the funds from the PAM account to that of WPS. But Andrew is not the plaintiff and it appears that Feng was unaware of the identity of all the actual investors, including, specifically, neither Micro Tellers nor the Regional Group. Counsel for the plaintiffs contended that in law this was irrelevant. It did not matter if the defendant did not know precisely to whom the representation was to be communicated – it was sufficient if it was made to an agent acting for a class of persons in circumstances where he knew that the representation would be communicated to and acted on by the agent’s principals.

As indicated in [115] above reliance was placed on an observation of Blackburn J in Richardson v Silvester (1873) LR 9 QB 34 (at 36) quoting from Swift v Winterbottom (1873) LR 8 QB 244 (at 253). The full quote from the latter authority reads as follows:

These authorities have stood the test of time and have been followed by the Singapore courts: JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2020] 2 SLR 1256 at [191]; Thode Gerd Walter v Mintwell Industry Pte Ltd and others [2009] SGHC 44 at [32]. It cannot be that a fraudster can avoid liability on the basis that the false representation was made to X but not to Y who relied on it to his detriment in circumstances where it was foreseeable that the representation was intended to be passed on to Y.

In the present case Charles’ evidence on behalf of Micro Tellers was clear; that he never instructed the Initial Defendants to transfer any moneys to the WPS account in the sense of an account not controlled by Walkers. He was at all times working on the basis that the funds would be held in an account controlled by Walkers, solicitors: see [174] above. It was Andrew who was induced by the representation to transfer the money but the representation was conveyed to Micro Tellers.

Both Feng and counsel for Moon contended that on the facts the Initial Defendants were not acting as agents of Micro Tellers for the purchase of the Comoros bank or Freelance Bank, since at all times Micro Tellers was working on the basis that it was the Alexandria or Banco Provincial banks that were to be purchased. Micro Tellers was never told about the change to Freelance Bank, did not authorise it and thus the Initial Defendants were embarking on a frolic of their own, not acting as agents for Micro Tellers.

I consider that this is beyond the point. The alleged fraud resides in inducing funds to be placed in the WPS bank account and, on the facts as found, the Initial Defendants did this on the understanding that the funds would be “protected” because of the relationship with Walkers. They would not have done this if the true facts were known to them. The fact that they may thereafter have acted in a manner which was not known to the principals cannot alter the fact that in transferring Micro Tellers’ money to WPS, they were acting as agents for Micro Tellers. The position was that Micro Tellers had entrusted the funds to the Initial Defendants for the purpose of purchasing an offshore bank and relied on the Initial Defendants to act in their best interests in doing so. This involved, so they thought, transferring the funds into the hands of the solicitors appointed to act in the purchase so as to facilitate the purchase.

The transfer was accordingly done in their capacity as agents for Micro Tellers because the Initial Defendants were satisfied that this was a safe thing to do due to the overriding control of Walkers.

The correct factual position therefore is that Feng made the false representations knowing that the Initial Defendants held funds from various sources with the intention that those funds should be transferred to WPS. In these circumstances he must have had within his contemplation that the investors, whoever they were, were people liable to act upon the representations either with actual knowledge of the representations or by placing their trust in the Initial Defendants, acting as their agents.

If the latter case, there was no need for further communication with the investors. Agreeing to the transfer was part of the mandate that the Initial Defendants held from the investors.

Reverting to the second principle laid down in Panatron:

The representations in this case were made by Feng to Andrew with the intention that the investors, whoever they were, should act upon them by authorising the transfer of the funds to WPS. It can make no difference in law if the Initial Defendants had informed the investors of the representations before authorising the transfer or whether they had existing authority to do so.

For all these reasons, I am satisfied that the second principle in Panatron is met on the facts of this case.

The third requirement is that the plaintiff should have acted on the false statement and suffered damage by doing so. Micro Tellers did act upon the false statement in the sense that its agent, Andrew, relying on the false statements transferred Micro Tellers’ funds to the WPS bank account.

The question of damage has troubled me and was the subject of some discussion in both the written and oral closing submissions. This issue however applies to all the plaintiffs’claims against Feng in relation to the Private Bank Acquisition and I shall therefore address it at the end of this judgment.

The final requirement is that the representation must be made with the knowledge that it is false. This is clearly the case here.

Subject therefore to the question of damage, Micro Tellers has made out its case in fraud.

Breach of trust/fiduciary duties

Micro Tellers’ case on breach of trust/fiduciary duties is founded on two bases. The first is that Feng owed duties to the Initial Defendants, acting in his capacity as a solicitor employed by Walkers in negotiating the Private Bank Acquisition pursuant to the Terms of Engagement between Walkers and PAM.

Secondly, Micro Tellers contend that a fiduciary relationship can be created between two people where one, the fiduciary, has undertaken to act for and on behalf of another in a particular manner in circumstances which give rise to a relationship of trust and confidence and this was the case here.

I have considered the nature of relationships which give rise to a fiduciary duty in [44]–[51] above and have gained assistance in addition from the succinct summary of the law by Kannan Ramesh J in Aljunied-Hougang Town Council and another v Lim Swee Lian Sylvia and others and another suit [2019] SGHC 241 (“AHTC”) at [162]–[166] (see Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal [2018] 2 SLR 655 (“Turf Club”) at [42]):

I shall consider first the case based on one of the recognised categories of fiduciary relationships, that of solicitor/client. Feng, in his capacity as a solicitor employed by Walkers, was retained to act on PAM’s behalf on the proposed bank acquisition. Accordingly, Feng owed PAM the duties normally associated with such a retainer which include the duty to act in good faith towards the client and at all times to act in its best interests. On the facts of this case, the duties included the obligation to retain any funds entrusted to him in an account controlled by Walkers to PAM’s order and to use the funds solely for the agreed purpose of purchasing a private bank.

He breached those duties owed to PAM by placing the funds in the WPS account and then misappropriating the residual sums in that account following the purchase of Freelance Bank. Feng was unable to say what had become of the residual funds but accepted that he had removed them from the WPS account.

Feng’s primary defence was that he had no knowledge that any of the funds belonged to Micro Tellers or any other third party and that, in those circumstances, there was no retainer between Walkers and those parties so that no solicitor/client relationship could come into existence as between Walkers and any person other than PAM.

Micro Tellers meet this defence by contending that, on the facts, an implied retainer was created between Feng and, inter alia, Micro Tellers because he was aware that Andrew represented a group of investors, even if he did not know the identity of some of those investors, including Micro Tellers. Reliance is placed on the reasoning of the Court of Appeal decision in Anwar Patrick Adrian and another v Ng Chong & Hue LLC and another [2014] 3 SLR 761 (“Anwar”). In that case there was a retainer between Ng, a lawyer, and his client, Agus, a prominent investor. The action was brought by two sons of Agus for breach of contract and negligence for failing to advise them on a personal guarantee clause in some security documents. The action failed at trial on the basis that Ng did not have a solicitor-client relationship with the sons and owed no duties towards them. The Court of Appeal allowed the appeal in a deeply reasoned decision and in [49] said this:

The facts in the present case are different from those in Anwar. Here Feng did not know the identity of the actual investors. What he did know was that PAM was being used as a vehicle for the proposed purchase and that the funds held by PAM to be transferred to WPS were not beneficially owned by PAM. On the facts, Feng’s knowledge of the identity of the investors is as set out in [185] above. In consequence, Feng ought to have appreciated (and I suspect did appreciate) that his duties to PAM as its retained solicitor extended to those investors, whoever they were. Whilst I accept, as was pointed out in Law Society of Singapore v Ahmad Khalis bin Abdul Ghani [2006] 4 SLR(R) 308 at [66], that the threshold for finding an implied retainer is a high one and that the facts in this case are not as strong as in Anwar, in my judgment, the threshold is met on the facts of this case. Hence, Feng owed the same duties as a solicitor to the investors as he did to PAM.

The second way in which Micro Tellers put its case is that since Feng knew that Andrew, through PAM, was acting as agent for a number of principals, Feng had undertaken to act on behalf of the principals so as to give rise to a relationship of trust and confidence which falls outside one of the recognised categories of fiduciary relationships.

I have set out above the applicable principles to determining whether such duties exist, which can be summarised as follows:

(a) The factual circumstances must be examined to determine whether they bear sufficient hallmarks of a fiduciary relationship: see AHTC at [166] cited at [204] above.

(b) In circumstances where the party in question has undertaken a specific role in the transaction in question, that role should be looked at to determine whether the putative fiduciary had “voluntarily place[d] himself in a position where the law can objectively impute an intention on his… part to undertake [fiduciary duties]”: see Tan Teck Kee at [69] cited at [48] above.

(c) Relevant factors include the extent to which the putative fiduciary may exercise discretion which affects the position of the supposed principal and the degree of vulnerability to which the supposed principal is subject and the degree of control that the fiduciary has over any assets involved: see Tan Teck Kee at [69] and [78] cited at [48] and [50] above.

(d) A relevant enquiry is to ask whether the circumstances are such that one person is in a relationship with another which gives rise to a legitimate expectation that the fiduciary will not utilise his or her position in such a way which is adverse to the interests of the principal: Turf Club at [103] cited at [45] above.

The part played by Feng in the Private Bank Acquisition is not in dispute. It was he who proposed the possibility of such an acquisition in the first place. He volunteered his services as a lawyer and also indicated that he would like to invest in the scheme. He carried out or arranged for due diligence searches to be carried out on various target banks. It was he who suggested the change from Alexandria Bank to Banco Provincial and who arranged for Curacao lawyers to oversee the Curacao law aspects “with Walkers Singapore (through me) coordinating in the background”. It was he who liaised with overseas contacts such as Frederic Gaillard and Rainer Peleg, to seek to progress the purchases. He acted in the role of fund manager in that he agreed that payments would be handled by WPS.

It is not necessary to go into greater detail in order to conclude that Feng was the pivot around which this whole enterprise revolved. Andrew relied on him for legal advice and for the expertise that he and his contacts could provide to engineer the purchase of the desired bank. I have no hesitation in concluding that as between Andrew and Feng, Feng had (objectively) voluntarily placed himself in a position where the law should objectively impute an intention on his part to undertake fiduciary duties.

These duties would be akin to those which exist in a solicitor/client relationship to act in good faith towards the beneficiary, to advance the beneficiary’s interests and not to promote his own to the prejudice of those interests. In the context of the present case, more specifically, it was to ensure the safe custody of the funds held in the WPS account and to use them solely for the purpose of the Private Bank Acquisition.

Feng therefore was in breach of these duties owed to Andrew when he dissipated the residual sums in the WPS bank account.

Feng’s defence to the assertion that these duties did not extend to cover a duty to the other investors mirrors that considered in [207] above in relation to the solicitors’ duties. By parity of reasoning, it must follow, since Feng was aware that Andrew was representing other investors that, objectively, any duties that Feng owed to Andrew would necessarily also be owed to those investors, whoever they were.

For both these reasons, therefore, I have concluded that fiduciary duties were owed to PAM and to Andrew but additionally that they were also owed to all the investors, including Micro Tellers. Feng acted in breach of those duties by inducing the placement of the funds in WPS and then, knowing that those funds were to be held for the specific purpose of the Private Bank Acquisition, being able to misappropriate those assets since they were not held to PAM’s order by Walkers.

Again therefore, subject to the question of damage, Micro Tellers’ case based on breach of trust succeeds.

Unjust enrichment

Micro Tellers also raise a claim based on unjust enrichment. Counsel for the plaintiffs sought to pursue this claim even if the court were to find in Micro Tellers’ favour on fraud and breach of trust. However, reliance was placed on the same factual matrix as for the other claims. I can therefore see no useful purpose in considering the matter further.

The Regional Group’s claim against Feng in relation to the Private Bank Acquisition

The Regional Group’s claim against Feng in relation to the Private Bank Acquisition is not founded on fraud but does raise allegations of breach of trust/fiduciary duties and unjust enrichment. Although not pleaded in precisely the same way as the case against Micro Tellers, it was apparent from the written and oral closings that the parties were drawing no distinction between the two so far as concerns the existence of the two duties owed by Feng to the Initial Defendants: solicitor/client and voluntary assumption of duties.

It is pleaded:

Clement gave evidence in relation to his understanding of the way in which this transfer took place:

His evidence on this concluded that in or around late June 2019 Yi Han admitted that the Initial Defendants had misappropriated that Float for the purposes of purchasing an offshore bank when the understanding was that the Regional Group’s funds were only to be used for the purpose of OTC (over the counter) transactions in cryptocurrency. Similar evidence was given by Rio and Michael.

This evidence was reinforced by all three witnesses in cross-examination. Clement when asked this at the outset of his cross-examination said this:

Equivalent answers to the same question were given by Rio and Michael. Clement also confirmed that the Regional Group’s funds were not only to be used solely for the purposes of OTC transactions, they were only to be used once consent had been obtained for a given transaction.

Andrew did not deny that the Float had been used as alleged but in cross-examination sought to suggest that Yi Han had told him that the Regional Group had given him permission to use the Float in this way. In the absence of any evidence from Yi Han, I cannot place any weight on this assertion and therefore shall work on the basis that the Initial Defendants had no authority to transfer the Float to WPS.

In the light of this it is not surprising that the Regional Group’s claim in this action was first brought against the Initial Defendants only with the claim against Feng being added by amendment once the Regional Group became aware of his involvement both in the Europe Transaction and the Private Bank Acquisition. As indicated above, all claims against the Initial Defendants have now been settled without prejudice to the plaintiffs’ right to continue the case against Feng.

It will thus be seen that although the case against Feng is founded on the assertion that Feng owed the Initial Defendants the same trust and fiduciary duties as have been found to exist in relation to the Micro Tellers claim, the assertion that the Initial Defendants were acting as agents for the Regional Group is founded on a different factual matrix. In Micro Tellers’ case, it was aware that funds were being provided for the purchase of a private bank but it supplied the funds on the wrongly held assumption that those funds were to be held under Walkers’ control. The Regional Group did not even know that the Float was to be used for the purchase of such a bank.

The defendants both contend that this is a material distinction. In the case of Micro Tellers, the Initial Defendants were acting as Micro Tellers’ agents when transferring funds from PAM to WPS. It was part of the process of purchasing the bank which the Initial Defendants had been authorised by Micro Tellers to carry out. In this sense the Initial Defendants were acting as Micro Tellers’ agents.

In the case of the Regional Group, no such agency could be said to exist and hence, say the defendants, the Regional Group’s pleaded case that the transfer of the Float was done by the Initial Defendants when acting in their capacity as agents of the Regional Group must fail.

The question that falls to be answered however is, to whom does Feng owe his duties, both as retained solicitor and those voluntarily accepted? Once one concludes, as is the case here, that those duties extend beyond the persons to whom the duties are directly owed, it is necessary to ascertain the class of people to whom he is acting as fiduciary.

In this case, Feng was aware that the Initial Defendants were not the only persons who had placed funds in PAM for the purpose of the Private Bank Acquisition, but he was unaware of and had not sought to ascertain the members of the class. It must follow from this that he owed his duties to all those that can demonstrate that they are members. The fact that the Initial Defendants were acting in an agency capacity for other investors is, no doubt, a good indication that the principals belong to the class but this does not mean that the class is limited to those in an agency relationship.

The class in this case consists of all those who were the beneficial owners of sums placed in the PAM account which were then transferred by the Initial Defendants to the WPS account on the faith of the false representations made by Feng to Andrew.

The Regional Group falls within that class. The fact that they were unaware that their funds were being used for this unauthorised purpose cannot absolve Feng of liability to them, as beneficial owners, of funds misused by him.

Again therefore, subject to the question of relief, the Regional Group’s claim against Feng for breach of trust/fiduciary duty succeeds and I do not propose to consider the additional claim in unjust enrichment.

The claims against Moon

Moon was joined as a defendant in this action by an Order dated 18 May 2022 as a result of the decision given on that date: see [25] above.

The plaintiffs put their case as follows:

The claims in dishonest assistance are founded on the same underlying facts and assertions. They stand and fall together. The case based on conspiracy is founded on the plea of unjust enrichment and is based on a contention that Feng and Moon acted in concert in incorporating and using WPS to facilitate the unjust enrichment of Feng. The underlying particulars however mirror those relied upon for dishonest assistance. I shall therefore deal first with the case on dishonest assistance and then turn to conspiracy.

Dishonest assistance – the pleaded particulars

The particulars to the SOC read as follows:

Particulars (a) relate to the incorporation of WPS in 2015 with Moon being the sole shareholder and director such that any transfers into and out of the WPS bank account could only be facilitated with the active participation of Moon.

Particulars (b) cover two aspects. First that Feng had incorporated WPS for the WPS purposes – to induce a connection with Walkers so as to induce persons to deposit money with WPS and secondly that Feng had used WPS for that purpose. In both cases it is alleged that Moon would have had actual or constructive knowledge of this as Feng’s wife and the sole director and shareholder of WPS, and that she would have known that he was a solicitor employed by Walkers and WPS had no relationship with Walkers.

Particulars (c) are more specific, alleging actual or constructive knowledge that sums paid into the WPS account did not belong beneficially to WPS.

Dishonest assistance – the law

The four elements of the cause of action of dishonest assistance set out in Von Roll Asia Pte Ltd v Goh Boon Gay and others [2018] 4 SLR 1053 (“Von Roll”) at [105] are well settled and were not in dispute: see, for example, Barlow Clowes International Ltd (in liquidation) and others v Eurotrust International Ltd [2006] 1 WLR 1476 (“Barlow Clowes”) at [10] and [28]; George Raymond Zage III and another v Ho Chi Kwong and another [2010] 2 SLR 589 at [20] (“Zage”) and Miao Weiguo v Tendcare Medical Group Holdings Pte Ltd (formerly known as Tian Jian Hua Xia Medical Group Holdings Pte Ltd) (in judicial management) and another [2022] 1 SLR 884 at [45] (“Miao”).

They are:

Hence there can be no liability on the part of the person alleged to have provided the assistance (“the assister”), unless the claim against the principal defendant (“the principal”) said to be under the duty succeeds. In this case I have held that the plaintiffs are entitled to succeed against Feng based on breach of fiduciary duty so that the first two requirements are met. It is therefore necessary to focus on the law in relation to the third and fourth requirements.

In Barlow Clowes at [10], Lord Hoffmann stated as follows:

Lord Hoffmann continued at [28]:

In [108] of Von Roll, Chan Seng Onn J (as he then was) said this:

In Miao at [45] and [46], Andrew Phang Boon Leong JCA said this:

It necessarily follows that even where the facts do not demonstrate that the alleged assister did not have actual (objective) knowledge, there may nonetheless be liability if the facts known to the assister were such as would make a reasonable person suspicious so that they would have made enquiries which would have resulted in knowledge. This may be demonstrated by the fact that the assister made a conscious decision not to make enquiries when they had suspicions: see Barlow Clowes at [10].

The plaintiffs summarised the correct approach in their Closing Statement:

Finally, my attention was drawn to a case where the facts are not dissimilar to those in the present case. In O’Laughlin Industries Co Ltd and another v Tan Thiam Hock and others [2021] SGHC 35 (“O’Laughlin”) the principal defendant, Tan Thiam Hock (“Hock”), an employee of the first plaintiff, was held liable to the plaintiffs, inter alia, for breach of fiduciary duties. Hock’s sister, Tan Poh Suan Jacqueline (“Jacqueline”) was also joined as a defendant on the allegation that she was liable for dishonest assistance owing to the fact that she was a director and authorised signatory of the relevant company, Globchem.

At [48] the Judge, Lee Seiu Kin J, stated as follows:

He concluded in [51] that:

Dishonest assistance – the facts

The primary evidence was given by Moon. She is a Korean citizen who, as indicated above, married Feng in May 2015 and in June 2015 acceded to his request that she should become the director and sole shareholder in WPS as well as being the authorised signatory of the WPS bank account.

Her AEIC reads as follows:

She was cross-examined rigorously but fairly by Mr Tan. She confirmed that she had a Bachelor of Industrial Engineering degree from Kongju University in Korea and that she had been working in Singapore first as a financial consultant at Standard Chartered Bank for some two years before joining Citibank in July 2011 where she acted as a relationship manager referring potential clients to colleagues for the purpose of “know your client” procedures.

In relation to Feng’s request that she should be a director and shareholder of WPS and the way in which she acted in that capacity, the following interchanges occurred:

Feng confirmed Moon’s evidence that his wife would not open the envelopes containing the bank statements.

I make no apology for reproducing the bulk of Moon’s AEIC and extensive extracts from the cross-examination as I have to decide the weight that I can attach to her evidence having seen her demeanour in the witness box. She was plainly very nervous when giving evidence and it was apparent that she found the process of giving evidence both emotional and burdensome. That said, her evidence was clear and consistent and the longer the cross-examination continued the more satisfied I was that she was a witness of the truth. She demonstrated an element of naivety and deference in her dealings with her husband’s requests in relation to the setting up of WPS but I have to take into account the fact that this was immediately after their marriage.

Taking all this into account, on the balance of probabilities, I assess Moon’s knowledge and involvement in the activities of WPS as follows:

(a) She agreed to be the sole director and shareholder of WPS and the sole authorised signatory of the bank account in June 2015 just after their return from their honeymoon.

(b) At the time she identified the fact that the company name included the name Walkers and asked her husband “Does it matter to your law firm?” and received the answer “There is no issue, no problem” and she did not ask anything further about the name.

(c) In this respect, she deferred to her husband’s position as a lawyer in accepting his answer that there was no issue with his employer.

(d) Subsequent to the incorporation she had no involvement in the affairs of WPS save for signing blank cheques and transfer forms as and when Feng asked her to do so.

(e) She never opened any document addressed to WPS and never saw a bank statement.

(f) She was unaware of the nature of the business that Feng was carrying on under the WPS name.

(g) No incident occurred subsequent to the incorporation of WPS that might have served to alert her to the fact that WPS was being used in furtherance of unlawful activities. More specifically, it was not suggested to her that she was aware that Feng was using a typeface and logo mimicking that used by Walkers.

(h) She possessed no knowledge of the plaintiffs, of the Initial Defendants or of the Private Bank Acquisition.

Reverting then to the Particulars, on the basis of the above, Moon had actual knowledge of Particulars (a) above. By her actions in signing blank cheques and transfers, she facilitated Feng’s breach of duty by enabling him to misappropriate the funds paid into the WPS account but she was unaware of this. This conduct is sufficient to satisfy requirement (c) above – assistance rendered by the third party towards that breach.

So far as concerns Particulars (b) above (which refer to the “WPS Purposes”), Moon knew that she was the sole shareholder and director of WPS, that Feng was a solicitor employed by Walkers and that WPS had no relationship with Walkers. She also appreciated that the use of the WPS name could induce a connection with Walkers and instil confidence that Feng was a solicitor with Walkers which is why she asked the question as to whether the name mattered to Walkers. However, she did not have actual knowledge that Feng had either incorporated or used WPS to induce persons to deposit money with WPS as pleaded in the SOC.

As regards Particulars (c), I accept that Moon had no actual knowledge that the sums paid into the WPS account did not belong beneficially to WPS. She had no knowledge about any sums paid into or out of the account.

In oral closings, Mr Tan accepted that the above was the position in relation to actual knowledge when he stated:

The plaintiffs put their case both on the basis of wilful blindness, in the sense that it is asserted that Moon deliberately did not ask questions about WPS lest she learned something she would rather not know and on the basis that, judged by the standards of an ordinary honest person (“the honest person”), with the same knowledge and in the same circumstances as Moon and sharing her personal characteristics, such a person would have made further enquiries and would have ascertained the pleaded knowledge.

The plaintiffs rely on the following factors:

(a) in her capacity as a banker she would have more knowledge than the person on the street about bank statements and the like;

(b) knowing that her husband was employed by Walkers, any person in her shoes would have said that the choice of name was very odd and would have wanted to clear this up with Walkers; and

(c) knowing that Feng already had other investment vehicles, any person in her shoes would have said “why do you need WPS?”.

They go on to say that the honest person would have asked more questions at the outset and further, when prompted by the arrival of bank statements, should have opened them to see where the money was coming from and where it was going to. An honest person would not sign blank cheques and transfers.

Counsel for Moon, Mr Koh, submitted that at the date WPS was incorporated Feng had not met the Initial Defendants and the Private Bank Acquisition was not in anyone’s contemplation. There was thus no evidence that Feng had wanted to incorporate WPS for the purpose of inducing the payment of money into the WPS bank account for this purpose.

The furthest that the evidence went was to suggest that Feng selected the name in order to draw upon the reputation of Walkers and his reputation as a solicitor in Walkers when carrying out his private business activities. There was no suggestion that he was intending to be dishonest in those activities. This, it is said, is sufficient to cause either Moon or the honest person to ask questions to satisfy themselves that there was no issue with Feng’s employers over the choice of name – but no more than this.

Mr Koh went on to submit that this is what Moon did. Newly married, she was asked by her husband to become involved with WPS and her reaction was to ask whether the choice of name mattered to Walkers and received the answer that it did not. She accepted her husband’s word both because he was her husband but also because he was a lawyer and she was not. The honest person in her position would have done no more.

Having accepted Feng’s initial explanation, there was no intervening act which should have alerted her to make further enquiries, and thus Mr Koh submitted that her actions in leaving the bank statements unopened was not an indication of wilful blindness.

In my judgment, what is crucial to a determination of this issue is to focus first on Moon’s state of mind when she was asked to become involved with WPS. She at once saw the association between WPS’s name and Walkers, her husband’s employers. Her reaction was not to suggest that the name could only have been chosen to further a dishonest business and to have her husband clarify what the nature of the intended business was. Having seen her in the witness box, I am satisfied that at no time did she harbour any suspicion that her husband’s private business activities would be anything other than wholly legitimate, in keeping with his reputation as a successful solicitor employed by a reputable firm.

Her concern was not that there was some intention to trade dishonestly under the name but she wanted to be satisfied that there would be no difficulty with Feng’s employers in his carrying out a legitimate business under that name. Hence she asked the questions she did and received his assurance that there were no issues with Walkers.

One asks rhetorically, what more should she have asked? She had no reason to disbelieve her husband. To ask further questions would have been to indicate a degree of mistrust which runs counter to a married couple in their first few weeks of marriage. At that time therefore, I do not consider that Moon demonstrated “wilful blindness”. Likewise, I do not consider that her actions in not opening the bank statements or questioning her husband at a later date as to what the cheques and transfers were being used for constituted wilful blindness on her part. It was not suggested that anything happened in the intervening three years between their marriage and the events surrounding the Private Bank Acquisition in 2018 to alert her to the possibility of wrongdoing on Feng’s part. The plaintiffs’ position thus has to be that it is indicative of “wilful blindness” not to open bank statements relevant to your husband’s business which I am not prepared to accept.

I turn then to consider whether the approach of the honest person in the position of Moon would have been the same. The real question to my mind is whether that person would have adopted the same attitude as Moon at the outset. Would that person have had suspicions that in his choice of name, Feng was proposing to carry out unlawful business activities, and would that person have asked questions relevant to this and not merely to Walkers’ position with regard to the name?

The plaintiffs have not satisfied me that this is the case. Some wives might have cross-examined their husbands further or merely been more inquisitive but what I have to consider here is a notional honest person sharing Moon’s characteristics, newly married to a successful solicitor who carries on some private business on his own account. I consider that such a person would adopt the same approach as Moon and direct their concerns to Feng’s relationship with Walkers and not assume some underlying dishonest motive in the choice of name.

Once one reaches that conclusion, there is nothing in Moon’s subsequent conduct which would have been different when seen through the eyes of the honest person.

Accordingly, I am not satisfied that Moon had constructive knowledge, either on the basis of wilful blindness or the honest person test, that the purpose underlying the incorporation of WPS was to induce persons to deposit money with WPS or that the Micro Tellers investment or the Float paid into the WPS account did not belong beneficially to WPS. To ascribe such knowledge, it would be necessary to hold that Moon was wilfully blind in failing to take an active interest in the affairs of WPS and that the honest person would have done so. For the reasons given, on the facts of this case, I am unpersuaded that Moon should have taken an active part in the running of WPS.

The facts of this case thus do bear a distinct similarity to those in O’Laughlin. The most that can be said against Moon is that she agreed to be the sole shareholder and director of a company and the sole signatory of its bank account and, having satisfied herself that the choice of name did not matter to Walkers, did not thereafter take any interest in the affairs of the company. That is insufficient on the facts of this case to constitute dishonesty for the purposes of the fourth requirement of the tort.

The action against Moon for dishonest assistance thus fails.

Conspiracy

The case based on conspiracy is alleged to be founded on a combination by unlawful means to unjustly enrich Feng.

Such a plea requires proof that both parties must be “sufficiently aware of the surrounding circumstances and share the object for it properly to be said that they were acting in concert at the time of the acts complained of”: see Kuwait Oil Tanker Co SAK v AL Bader (No 3) [2000] 2 All ER (Comm) 271 at [111] and EFT Holdings, Inc v Marinteknik Shipbuilders (S) Pte Ltd [2014] 1 SLR 860 at [113]. This cannot be said having regard to the part played by Moon.

Since the case on dishonest assistance fails, it follows on the facts of this case that the case based on conspiracy cannot succeed. There was no agreement between Feng and Moon to do the acts relied upon.

Relief

In relation to the Private Bank Acquisition, Micro Tellers seeks an order that Feng pay it the sum of US$2,700,198 and the Regional Group seeks payment of US$1,901,859.74 (the Float of US$2,074,051.80 less US$172,192.06 already repaid).

In Suit 8, damages were assessed on 9 November 2021 in the Suit 8 Plaintiffs’ (PAM and 5&2) favour in the sums of US$5,268,000 and S$1,233,000 together with interest which, in total, amounted to US$6,231,213.65 and S$1,427,202.09.

Cl 1.1 of the Settlement Agreement dated 7 May 2021 between Andrew (together with the Suit 8 Plaintiffs) and the plaintiffs in this action (see [19] above) provided that in the event that PAM and 5&2 obtained final judgment in Suit 8 against Feng, they would assign their rights to any sum which was the difference between the total judgment sum in Suit 8 and the sum of US$1,300,000. Accordingly, the plaintiffs in this action are the assignees of the debt owed to PAM and 5&2 in the sum of US$4,931,213.65 plus S$1,427,202.09 (in excess of US$1,000,000.00); some US$6m in total.

The total sum sought in this action by both sets of plaintiffs in relation to the Private Bank Acquisition is US$4,602,057. Although the sum due in interest has not been calculated, it can be seen that enforcement of their rights as assignees of the judgment debt in Suit 8 to the full value of their entitlement would have been likely to extinguish any award of damages plus interest made in the plaintiffs’ favour in this action.

As I made clear to counsel at the end of the hearing, I was troubled by the fact that the plaintiffs had maintained their claim in this action in relation to the Private Bank Acquisition when it appeared that, as assignees, they were already entitled to seek payment of sums in excess of those claimed.

However, Feng did not seek any order staying these proceedings pending enforcement of the order in Suit 8. Further Mr Tan made the valid point that resolution of the claim made against Moon in dishonest assistance and against Feng and Moon in conspiracy first required the court to make findings as to the legality of Feng’s conduct.

Mr Tan accepted that it would be wrong for Feng to be exposed to double recovery where there were two orders for the same loss, one in favour of the principal and the other in favour of the agent, particularly where the agent had already assigned its right to the principal: see Family Food Court (a firm) v Seah Boon Lock and another (trading as Boon Lock Duck and Noodle House) [2008] 4 SLR(R) 272 at [61]. He proposed that in these circumstances any possibility of double recovery could be eliminated by an undertaking to the court that the Suit 5 plaintiffs would give credit to Feng for any sums the Suit 5 plaintiffs recovered under the Settlement Agreement.

So far as concerns the undertaking, I have concluded that it should be somewhat broader than that proposed by Mr Tan. Where, as here, the principal is also the assignee of the agent’s debt, the undertaking should extend to ensuring that only one set of proceedings seeking to enforce the debts are in being at any given time as well as providing that due credit will be given to Feng for any sums recovered by the Suit 5 plaintiffs.

Conclusion

Micro Tellers’ case against Feng based on deceit and breach of trust/fiduciary duty succeeds. Micro Tellers is entitled to an order for payment of the sum of US$2,700,198 together with ancillary relief including interest.

The Regional Group’s case against Feng based on breach of trust/fiduciary duty succeeds. The Regional Group is entitled to an order for payment of the sum of US$1,901,859.74 together with ancillary relief including interest.

As a condition of obtaining the above orders the plaintiffs must give an appropriate undertaking to ensure that (a) there is no duplication of recovery proceedings in relation to those orders and the orders for payment made in Suit 8; and (b) there is no double recovery.

The Regional Group’s claim against Feng in relation to the Europe Transaction is dismissed.

The plaintiffs’ claims against Moon in dishonest assistance and against Moon and Feng in conspiracy are dismissed.

Annex A: PAM Settlement Agreement

Annex B: Yi Han Settlement Agreement

Annex C: Oral Judgment in SIC/S 5/2020 (SIC/SUM 6/2022) dated 18 May 2022

This is a summons by the plaintiffs for leave to amend the writ by the addition of a further party, as well as amending the statement of claim in a number of respects. The trial of this action (“Suit 5”) began on 14 June 2021, together with the trial of another action, SIC/S 8/2020 (“Suit 8”). For reasons set out at [1]–[13] of my judgment of 22 September 2021, the trial of this action had to be adjourned:

This is therefore an application to amend the written statement of claim after the trial has begun. The amendment to the writ seeks to join Ms Lee Moon Young (“Ms Moon”) as a party to the action. Ms Moon is the wife of Mr Then Feng (“Mr Then”), the sole defendant at the trial in Suit 8 and currently the only defendant remaining in Suit 5.

The amendments proposed in the statement of claim fall into two main categories. First, there are a number of amendments purportedly in compliance with the direction given by me during the trial and recorded in my judgment. Secondly, a number of amendments are proposed to raise three causes of action against Ms Moon; two allegations of dishonest assistance of Mr Then and one of conspiracy with Mr Then.

I propose to deal first with the application to join Ms Moon.

The Summons states that the application is made pursuant to O 15 r 4(1) read in conjunction with O 110 r 9(1) and O 20 r 5(1) read in conjunction with O 110 r 3(1) of the Rules of Court (2014 Rev Ed).

Two affidavits are relied upon. The seventh affidavit of Charles Cuong-Tan Thach filed on behalf of the first plaintiff and the first affidavit of Rio Lim Yong Chee, the third plaintiff, filed on behalf of the second to fourth plaintiffs.

So far as joinder of parties is concerned, O 110 r 3 reads as follows:

Order 110 rule 9(1), which relates to joinder of other persons as parties, reads as follows:

None of the exceptions in limb (b) apply, so reference back to the remainder of the rules is required.

The starting point is O 20 r 5, and r 5(1) reads:

There is therefore a liberty given to the court to amend, subject to O 15 r 6.

The relevant aspect of O 15 r 6 in the present case is O 15 r 6(2)(b)(ii).

The plaintiffs relied on O 15 r 4, which is reproduced below:

That provision relates primarily to the circumstances where parties can be joined without leave. It does not deal in detail with the factors that should be considered when leave is required. The relationship between O 15 r 4 and O 15 r 6 was considered by Roger Giles IJ in Mohamed Shiyam v Tuff Offshore Engineering Services Pte Ltd [2021] 5 SLR 188 (“Mohamed Shiyam”) at [30]–[40]:

I would respectfully amplify a little upon the comments made by Giles IJ.

First, where one is considering an amendment to add a party to an existing action, the existing parties cannot add others without leave. Order 15 rule 4 considers both joinder with leave and the circumstances where parties can be joined without leave at the outset of the action. As Giles IJ makes clear, O 15 r 6 is wider, and this is the rule expressly referred to in O 20 r 5. I consider that in an application such as this, regard should be had to the provisions of O 15 r 6 in order to determine whether it is appropriate for leave to be given.

Secondly, Giles IJ draws attention to O 18 r 19 at [38] of Mohamed Shiyam. Order 18 rule 19 covers a number of grounds for striking out and I believe Giles IJ was there referring to O 18 r 19(1)(a).

The important aspect of this is that if the application is made under O 18 r 19(1)(a), that it discloses no reasonable cause of action, then no evidence is to be admitted: see Singapore Civil Procedure 2021 vol 1 (Cavinder Bull gen ed) (Sweet & Maxwell, 2021) (“Singapore Civil Procedure 2021”) at para 18/19/5. Further, Singapore Civil Procedure 2021 states at para 18/19/6 as follows:

With that background, I can turn to consider the application to join Ms Moon. The plaintiffs accept that Ms Moon was initially a party to Suit 8. The causes of action against her were founded in conspiracy and dishonest assistance and were based on similar allegations to those which the plaintiffs now seek to rely on. Subsequent to her filing a defence in Suit 8, the action against her was discontinued on 29 September 2020. The plaintiffs were not parties to that action and the reasons for discontinuance can have no bearing on the question of whether the proposed amended pleading in this action does raise a cause of action against Ms Moon.

The correct approach to my mind is to consider first whether the proposed amendment to the statement of claim does disclose a cause of action which has some chance of success when only the allegations in the pleading are considered. Second, if it does, then one turns to consider O 15 r 6(2)(b)(ii): first, under the non-discretionary element, whether it is necessary to order joinder; and secondly, even if necessity is shown, whether, under the discretionary element, there are countervailing concerns (such as those of fairness) which may override the joinder. In the latter step, evidence may be relevant and Ms Moon has filed an affidavit in support of her position.

I should deal now with a preliminary point taken by Mr Adrian Tan (“Mr Tan”), counsel for the plaintiffs, who submitted that I should not hear any submissions on behalf of Ms Moon on this application. Mr Tan said that Ms Moon was not, at this stage, a party to the action and thus has no standing. The correct course was for me to hear and determine the Summons to join her in her absence. If I acceded to it, then the amended writ would be served on her and she could make such application as she saw fit either to set aside the order for joinder or to strike out portions of the amended statement of claim under O 18 r 19.

To me, this had an air of unreality about it as it was inevitable that Ms Moon, as Mr Then’s wife, would become aware of the application. In any event, in this case, the plaintiffs had served Ms Moon with a copy of the Summons. Ms Moon had therefore instructed solicitors and filed her affidavit.

The overriding objective of the rules must be to ensure that legal disputes are adjudicated upon with as little expense and delay as the interests of justice require. It can make no sense to expose the parties to the possibility that there should be two hearings at first instance to resolve one issue. Far less that there might be two appeals in addition. I can see no provision in the rules which prevents the court, in an appropriate case, from allowing a non-party from making submissions on an application where that application directly affects the third party. Where justice and convenience demand, this court should in my judgment allow it, and is given that discretion by O 110 r 3(2), which I have already cited. Justice and convenience however would not demand this, if, on the facts of the case, the non-party sought to retain the right, if unsuccessful at this hearing, thereafter to apply to strike out the writ or statement of claim once formally served with it.

In consequence, Mr Koh Junxiang (“Mr Koh”), who appeared on behalf of Ms Moon, on instructions, expressly waived any right to make such an application. Accordingly, there will only be one bite of the cherry and that will be at this hearing.

First, I shall consider the question of whether the amended statement of claim does disclose a cause of action against Ms Moon. This requires an examination of the proposed pleading. No recourse may be had to evidence. It must be assumed that the facts and matters relied upon by the plaintiffs will be proved at trial. The question to be asked and answered is whether if all such facts and matters are proved, the plaintiffs would have some chance of success. In other words, would there be some questions fit to be decided by the court even if the case at this stage would appear to be weak?

The three causes of action asserted against Ms Moon are as follows:

(a) First, in paras 37 to 40 of the proposed amendment to the statement of claim, there is a claim by the first plaintiff of dishonest assistance by Ms Moon of the various unlawful acts pleaded against Mr Then.

(b) Second, in paras 51 to 53A, there is an equivalent claim by the second to fourth plaintiffs of dishonest assistance by Ms Moon.

(c) Third, in paras 53B to 53E, there is a plea of conspiracy against Ms Moon and Mr Then.

The particulars relied upon in relation to each cause of action are, however, the same. Mr Tan accepted that if the plaintiffs failed to obtain leave in respect of one allegation, they would necessarily fail on all three. Likewise, Mr Koh for Ms Moon accepted that the allowability of the three causes of action stood or fell together.

I shall therefore consider the pleading at paras 37 to 40 in relation to dishonest assistance, which read as follows:

The cause of action of dishonest assistance requires four elements (see Von Roll Asia Pte Ltd v Goh Boon Gay and others [2018] 4 SLR 1053 (“Von Roll”) at [105]):

(a) the presence of a fiduciary duty owed to the plaintiff;

(b) a breach of that duty;

(c) assistance rendered by the third party towards that breach; and

(d) that such assistance was rendered dishonestly.

The cause of action requires not only an element of knowledge on the part of Ms Moon of what Mr Then was doing, but that knowledge must extend either to actual or constructive knowledge, that what Mr Then was doing was or might be an unlawful misuse of funds paid into the WPS account or otherwise a dishonest or fraudulent use of the WPS account.

Mr Tan referred me to three authorities, Barlow Clowes International Ltd (in liquidation) and others v Eurotrust International Ltd [2006] 1 WLR 1476 (“Barlow Clowes”) at [10], [23] and [28]; Twinsectra Ltd v Yardley and others [2002] 2 AC 164 at [24] and [135]; and Group Seven Ltd and another v Nasir and others [2019] EWCA Civ 614 at [95] and [104].

In Barlow Clowes at [10], Lord Hoffmann stated as follows:

Mr Tan also relied on [108] of Von Roll, where Chan Seng Onn J said:

I therefore must consider the particulars relied upon to determine first, whether if proved, a proper inference could be drawn that Ms Moon had actual knowledge that the transactions in which Mr Then was alleged to be involved were ones that she could not honestly participate in.

Secondly, if the pleading is insufficient to demonstrate that Ms Moon had actual knowledge, the inquiry is then whether the facts and matters pleaded were such that, objectively considered, she arguably did have or should have had suspicions, as would a reasonable person in her position, that the transactions in which Mr Then was alleged to be involved might be dishonest. In other words, is it proper from the pleaded particulars to draw an inference that it is arguable that Ms Moon did or should have had suspicions, yet turned a blind eye to them in circumstances where, objectively considered, a reasonable person would have made enquiries? If so, it is arguable that she had constructive knowledge and the amendment should be allowed.

I turn then to the facts pleaded and start with para 38(a) of the proposed amended statement of claim. These particulars relate to WPS and the WPS bank account. Ms Moon is alleged to be the sole shareholder and director of WPS and the only authorised signatory of the WPS bank account. In consequence, it is alleged that she would have carried out Mr Then’s instructions in relation to WPS. The pleading builds on these facts in para 38(b) to support an allegation that Ms Moon had actual or constructive knowledge that Mr Then had incorporated and used WPS for what were defined in para 17(b) as the WPS purposes.

There are three of them. First, that WPS was incorporated to induce a connection with Walkers; second, to instil confidence that Mr Then was a solicitor with Walkers; and third, to induce persons to deposit money with Walkers.

In para 38(b)(ii), the pleading seeks to draw the inference that Ms Moon had the requisite knowledge that Mr Then was a solicitor employed by Walkers, that WPS included the name of Walkers and that WPS had no relationship with Walkers. These are reasonable inferences based on the facts pleaded. If WPS had a relationship with Walkers, there would have been no need for Ms Moon to be Mr Then’s nominee as director and shareholder of WPS. Hence, I am satisfied that Ms Moon arguably would have had actual or constructive knowledge of the first two of the WPS purposes.

The third purpose is said to be that WPS was incorporated under that name to induce persons to deposit money with WPS. I consider that it is a reasonable inference that the purpose was to induce people to do business with Mr Then on the faith of Walker’s reputation and that this might include depositing money with WPS.

The pleading then continues by asserting in para 38(c) that Ms Moon had actual or constructive knowledge that the money paid into the WPS account did not belong beneficially to WPS for two reasons. First, it is said that WPS did not carry out any work or services which would justify the receipt of those sums and, secondly, that there was no justifiable reason for the payment out of the sums involved. It is a proper inference that as sole signatory of the bank account, Ms Moon would have known of the state of the account and have been aware (on the basis of the allegations in the statement of claim) that significant sums – well above any payment that Mr Then could have sought by way of fees for acting in his capacity as a solicitor – were being paid in and out. The pleading is thus, in my judgment, adequate to ascribe actual or constructive knowledge to Ms Moon that the WPS bank account was holding money which did not belong beneficially to WPS. If she had not asked Mr Then why this money was being held in the WPS bank account, it is arguable that she ought to have done so.

Hence, the pleading goes this far in relation to the four elements required to succeed in a cause of action of dishonest assistance.

First, there is an adequate allegation of a fiduciary relationship between the plaintiffs and Mr Then or WPS.

Second, the relevant alleged breach of trust lay in Mr Then misappropriating the sums deposited by the plaintiffs for his own use, rather than in using them for the agreed purposes of the private bank acquisition: see the proposed amended statement of claim at para 31. It is alleged that he was able to place himself in the position to do this by inducing the plaintiffs to invest money in reliance upon a false representation that WPS was connected with Walkers. Again, this is an adequate allegation for pleading purposes.

Third, on the basis of the allegation that Ms Moon was the only authorised signatory of the WPS bank account, if Mr Then is held to have acted in breach of trust, it must follow that Ms Moon arguably assisted that breach by her signing of the cheques.

So far as concerns the fourth element, dishonesty, there is no direct plea that Ms Moon had any knowledge that Mr Then was proposing to act in breach of trust. There is no plea that she was intimately involved in Mr Then’s business involving WPS. It is not alleged that she knew of the proposal to buy the private bank. It is not alleged that she knew that the persons to whom the money was paid out were not legitimately entitled to receive it. The furthest the pleading goes is to allege in para 38(c) that she had the requisite knowledge that the sums paid into the WPS account did not beneficially belong to WPS.

Mr Tan submitted that once she was aware that WPS had no relation to Walkers, any reasonable person in her position would have asked, “why the name “Walkers” and why involve me?” Such a reasonable person would have also asked about the business of the company. In failing to do so, he said she turned a blind eye and thereafter she became, in effect, an active part of the business by paying the money out without satisfying herself that there was no breach of trust.

The dishonesty alleged is that she obeyed Mr Then’s instructions in relation to the running of WPS knowing or suspecting that Mr Then was doing so to misappropriate the plaintiffs’ money. The question is whether the pleading as it stands justifies reaching the conclusion that it is arguable that she turned a blind eye in the way that Mr Tan suggests: see [246] above, per Lord Hoffman at [10] of Barlow Clowes. It certainly goes so far as to make it arguable (a) that she knew that Mr Then was inducing others to do business with him by using the word “Walkers” as part of the name of WPS falsely to represent a connection with Walkers and (b) that the business involved WPS holding money of which it was not the beneficial owner.

However, it requires a significant step from the conclusion that she had that knowledge, actual or constructive, to draw the necessary inference that he was going to act in breach of trust by misappropriating the plaintiffs’ money once it was deposited in the WPS bank account. The ultimate question is therefore whether the knowledge that she allegedly did have was enough to generate a sufficient suspicion on her part that he might be involved in the misappropriation of money held in the WPS bank account, that she should have made enquiries which, objectively, might have provided her with that knowledge.

I have hesitated greatly before reaching a conclusion adverse to Ms Moon. The case pleaded against Ms Moon in this respect is tenuous. However, I have to be satisfied that it is, to use Mr Koh’s expression, doomed to failure. If all the facts and matters pleaded are proved, could the necessary inference above be properly drawn (notwithstanding that it might be unlikely) or would that deduction be improper?

To my mind, the decisive factor is Ms Moon’s knowledge that Mr Then was not acting wholly honestly in relation to the WPS business. She knew, allegedly, that WPS was not controlled by Walkers and knew, because she was acting as his nominee, he was seeking to conceal this fact from Walkers. In the light of this, it is arguable that she should have enquired further and it is conceivable that this would have objectively provided her with the requisite knowledge. There is therefore a case, as pleaded, which cannot be said to be doomed to failure.

This then brings me to consider the requirements of O 15 r 6(2)(b)(ii).

The first question is whether the issue arising in relation to the proposed new party relates to an existing question or issue between the existing parties. It plainly does. Ms Moon can only be liable if Mr Then is liable, her knowledge has to relate to Mr Then’s unlawful acts, whatever they may be found to be.

The second question relates to discretion. Would it be just and convenient to hear the two actions together? Are there any countervailing factors which suggest that separate trials would be preferable?

The starting point has to be my finding that the plaintiffs have an arguable cause of action against Ms Moon. It is not one that can be struck out as being unarguable under the first limb of O 18 r 19.

In his written submissions, Mr Koh argued that even if there was a valid cause of action, the present application was nonetheless an abuse of process on two grounds. Firstly, he said the claim was manifestly groundless, which I have rejected. Secondly, he said that it was brought for an ulterior or improper purpose which was to apply pressure to Mr Then and his wife. In support of the latter point, he drew attention to the fact that the claim against Ms Moon in Suit 8 had been discontinued, that the plaintiffs have been aware of Ms Moon’s position as a director and sole shareholder of WPS since 2019 and that the application was made very late. Finally, reliance was placed on the fact that Ms Moon was employed by a financial institution where allegations of dishonesty would be taken seriously.

In oral submissions, Mr Koh accepted that the factors he was relying on really related to the exercise of discretion. He did not submit that the grounds relied on were such as to debar the plaintiffs from bringing an otherwise valid claim.

I turn next to the amendments which are said to be consequential to the settlement with the first and second defendants. There are three types of amendments. First, there is the deletion of the causes of action against the first and second defendants. Second, amendments are to be made in relation to the claims made jointly against the first and second defendants and Mr Then such as conspiracy, where references to first and second defendants are to be deleted and the pleading is to be reframed with causes of action against Mr Then alone. Third, the plaintiffs wish to raise additional claims against Mr Then.

No objection is raised to the first two categories of amendments. They are amendments which were contemplated at the time the trial was adjourned and the necessity for them was one of the reasons for acceding to the request for an adjournment.

The same cannot be said of the third category. At the outset of the trial, the statement of claim raised cause of actions against Mr Then based on fraudulent misrepresentation, deceit, breach of trust and/or breach of fiduciary duties and unjust enrichment. The plaintiffs now wish to add claims based on unlawful interference causing loss and for fraudulent or negligent misrepresentation: see paras 36, 50 and 69 to 75 of the proposed amended statement of claim.

For all these reasons, I grant leave to amend the statement of claim in respect of the first two categories of amendment but refuse leave to add the three new causes of action.