Court of Appeal · Decided 28 June 2013

Wee Chiaw Sek Anna v Ng Li-Ann Genevieve (sole executrix of the estate of Ng Hock Seng, deceased) and another

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[2013] SGCA 36Case no. Civil Appeal No 140 of 2012

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Grounds of decision

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Andrew Phang Boon Leong JA (delivering the judgment of the court):
Introduction
[1] This is an appeal against the trial judge’s (“the Judge”) decision in Wee Chiaw Sek Anna v Ng Li-Ann Genevieve (sole executrix of the estate of Ng Hock Seng, deceased) and another [2012] SGHC 197 (“the Judgment”).
[2] The threshold issue is whether the Appellant’s ex-husband, Mr Ng Hock Seng (“the Deceased”), who died in 2004, had fraudulently misrepresented to the Appellant that he had little or no assets, thus inducing her to forgo division of matrimonial assets at ancillary proceedings. Prior to his death, the Deceased had transferred the monies in his estate into four trusts, two of which are held by the Second Respondent as trustee for the benefit of the Appellant’s two children by the Deceased and the Appellant’s stepdaughter, who is also the First Respondent and executrix of the estate of the Deceased (“the Estate”). If the Appellant succeeds on the threshold issue, the fruits of her claim lie, potentially, in these four trusts. She ultimately made a claim against two of these trusts, arguing that she would have received the monies which had been transferred into those trusts had she asked for a division of the matrimonial assets.
The facts
Parties to the dispute
[3] The Appellant and the Deceased were married on 19 December 1988 and separated sometime in August 1998. The parties signed a deed of separation (“the Separation Agreement”) on 7 December 1998 and the decree nisi was granted on 27 April 1999.
[4] The First Respondent, Ms Ng Li-Ann Genevieve, is the sole executrix of the Estate and the Deceased’s first daughter from a previous marriage.
[5] The Second Respondent, BNP Paribas Jersey Trust Corporation Limited, is the trustee of two British Virgin Islands (“BVI”) trusts with the Deceased as settlor. The first trust was established on 23April 1999 (“the 1999 trust”) with Banque Paribas International Trustee Limited (“BPITL”). On 12 September 2003, the Second Respondent took over BPITL’s duties as trustees of the 1999 trust. The second trust was established on 14 June 2004 (referred to by parties as “the 2002 trust”).
[6] There are two children of the marriage, Joshua Ng (“Joshua”) and Azura Ng (“Azura”), who are beneficiaries of the 1999 trust. The Appellant, however, is listed as an “excluded person” in the 1999 and 2002 trusts. Under BVI law, this precludes the Appellant from being a beneficiary of the 1999 and 2002 trusts.
Background to the dispute
[7] The Deceased and the Appellant were in Singapore at the commencement of their marriage. After the Deceased’s business failed, they moved to Kuching to be closer to the Appellant’s family. The Appellant was the main breadwinner of the family and paid for the Deceased’s living and medical expenses. The Appellant claimed that the Deceased had many failed businesses.
[8] In 1998, the Deceased entered into two agreements with Meissner & Wurst Sdn Bhd (“M&W”) for his appointment as the Strategic Business Advisor for M&W’s first Silicon Wafer Fabrication Project (“the Project”). The agreements were as follows:
(a) The first agreement, made on 24 April 1998 (“the First M&W Agreement”), provided that the Deceased advise M&W on the business, financial and political conditions in Sarawak, assist in getting preferential prices and terms for the Project and ultimately assure that the Project was awarded to M&W. 60% of the US$25,000,000 consideration was to be paid upon successful procurement of the Project, and the remaining 40% would be paid for the Deceased’s services as Strategic Business Advisor independent of the procurement of the Project (10% payable within 7 days of signing the First M&W Agreement and 30% payable by 28 October 1998). The Project was successfully procured and formalised on 30 March 1999, after the Deceased and the Appellant had signed the Separation Agreement. The last tranche of payment under the First M&W Agreement was paid on 4 November 1999.
(b) The second agreement, made on 1 July 1998 (“the Second M&W Agreement”), reiterated the Deceased’s responsibilities in the First M&W agreement, save that he was now responsible for supporting the “execution of the project” rather than assuring the “successful signing of the contract for the project”. The Deceased’s remuneration was RM900,000 to be paid in monthly instalments of RM50,000.
[9] Thereafter, the relationship between the Deceased and the Appellant further soured. Things came to a head in August 1998, and the Deceased moved out of the matrimonial home. The Deceased continued to visit the matrimonial home from August to November 1998. During this time, the Deceased set up Armanee Assets Limited (“Armanee”) on 28 October 1998, a BVI company intended as a vehicle for use and investments of the monies received under both M&W agreements (“the monies”). On 22 October 1998, the Appellant signed a divorce petition (“the Divorce Petition”) but did not file it until after the parties had formally separated in December 1998.
[10] On 7 December 1998, the parties entered into the Separation Agreement “for better regulation of the relationship of the parties during the interim period pending the outcome of the hearing of the Divorce Petition”. The Separation Agreement dealt with care and control as well as support and maintenance of Joshua and Azura, the separation of living arrangements between the Appellant and the Deceased, part payment of RM100,000 in debt owing from the Deceased to the Appellant, and transfer of full beneficial ownership in the matrimonial home to the Appellant. The Separation Agreement also specified that the Appellant was to support and maintain herself. A supplementary memorandum signed on the same day contained an undertaking by the Deceased to settle in full additional debts amounting to RM850,000 and S$30,000 owed to the Appellant and her family members.
[11] The following day, the Appellant and the Deceased drew up an agreed parenting plan (providing for monthly maintenance by the Deceased of RM3,750 per child) and a notice of consent to the divorce proceedings. The year of separation on the notice of consent was falsely stated as 1995. The Divorce Petition was modified to include this consent and filed on 22 December 1998.
[12] The Deceased received his first payment of the monies on 28 January 1999. On 10 March 1999, the Deceased set up a second company, Prominent Market Investments Limited (“Prominent”), to hold the monies.
[13] On 23 April 1999, the Deceased set up the 1999 trust with $1,000. This was later endowed with all funds and assets under Prominent and Armanee. The beneficiaries of the 1999 trust are Joshua, Azura and the First Respondent (should Joshua and Azura pre-decease her). By this time, the Project had been successfully procured (see [8(a)] above), and the balance of US$15,000,000 owing under the First M&W Agreement had become due to the Deceased.
[14] The decree nisi was granted on 27 April 1999. The Appellant’s and the Deceased’s lawyers entered into protracted correspondence with regard to ancillaries and outstanding issues before the divorce was to be made absolute. This correspondence related to, inter alia, the settlement of outstanding amounts which the Deceased had spent on the Appellant’s supplementary credit card, proof of the Deceased’s financial status and income, and the provisions which the Deceased planned to make to take care of Joshua and Azura. The Appellant claimed that this correspondence contained active representations in respect of the financial state of the Deceased. There was no mention of division of matrimonial assets in this correspondence.
[15] On 28 June 1999, the Deceased bought another BVI company, South Sea International Limited (“South Sea”), to hold his personal investments. At the time, the Deceased made efforts to keep the South Sea accounts separate from Armanee’s and Prominent’s accounts, which assets were for the benefit of the 1999 trust. The assets in the South Sea account were eventually put into the 2002 trust on 14 June 2004, almost four years after the divorce had been made absolute. The beneficiaries of the 2002 trust were the First Respondent and the trustees of the 1999 trust. By that time, there was US$4,349,999 in the South Sea account.
[16] As part of ancillary proceedings, the Appellant filed her affidavit of assets and means on 3 December 1999. The Deceased filed his affidavit of assets and means on 13 January 2000 (“the Affidavit”). The Affidavit stated that the Deceased’s income came from family, friends and well-wishers.
[17] The Appellant and the Deceased subsequently reached an agreement on the outstanding ancillary matters, in particular for care and control as well as support and maintenance of Joshua and Azura. The Appellant also agreed to forgo any claim to a division of matrimonial assets. This agreement was recorded in a consent order dated 28 February 2000. Under the consent order, the Deceased and the Appellant had joint custody of Joshua and Azura. The Deceased was to pay RM3,750 in monthly maintenance for Joshua and Azura, and provide for their medical insurance and all educational needs up until tertiary level. The Appellant subsequently claimed that she had only agreed to forgo division because she believed that the Deceased had little or no assets to divide. She also claimed that, had she known of the existence of the monies, she would have asked for division and been awarded a portion of the monies. This is the basis for her claim in fraudulent misrepresentation.
[18] Not long after, on 26 April 2000, the Deceased transferred US$2,000,000 from the Armanee account into another trust managed by Merrill Lynch Bank and Trust Company (Cayman) Limited (“Merrill Lynch”). This was in addition to US$1,000,000 which had already been transferred to a second trust managed by Merrill Lynch on 2 February 2000, before the consent order was made. The Appellant has not made a claim against either of the Merrill Lynch trusts.
[19] On 6 October 2000, the decree nisi was made final. However, given that the Appellant and the Deceased shared joint custody of Joshua and Azura, the Appellant remained in contact with the Deceased. The Appellant highlighted five conversations she had with the Deceased in an email dated 25 June 2005 which she wrote to the trustees after the Deceased’s death to ascertain the status of the 1999 trust:
(a) Two meetings at Kuching Hilton in December 2003;
(b) One meeting at the Deceased’s mother’s funeral in February 2004; and
(c) Two tele-conversations in April and early May 2004.
[20] In these conversations, the Appellant claimed that the Deceased had discussed the appointment of a Protector with her to ensure that Joshua’s and Azura’s needs would be taken care of. The Appellant testified that she received repeated assurances from the Deceased that the children would have no concerns with money matters for the rest of their lives.
[21] On 15 June 2004, the Deceased died of tongue cancer. The Appellant was notified of the trusts in existence and proceeded to make enquiries about these trusts on behalf of Joshua and Azura. She also filed a suit against the First Respondent as executrix of the Estate to recover a debt of RM500,000 owed to her by the Deceased. This suit was settled on 6 February 2006 for RM350,000. On 9 September 2005, the Appellant asked for the audited accounts of the 1999 trust, Armanee and Prominent from the time of their formations. The Second Respondent complied and supplied these accounts on 7 November 2005. These accounts dated from 28 October 1998 (Armanee), 10 March 1999 (Prominent) and 23 April 1999 (the 1999 trust). It should be noted that all three of these dates preceded the grant of the decree nisi.
[22] Four years later, on 26 November 2009, the Appellant filed Suit No 1002 of 2009 against the First and Second Respondents. She claimed in fraudulent misrepresentation against the First Respondent in her capacity as executrix of the Estate, and claimed in both restitution and unjust enrichment against the Second Respondent in their capacity as trustees of the 1999 and 2002 trusts. The remedy sought for both claims was a remedial constructive trust (“RCT”) over the funds in the 1999 and 2002 trusts which would have been awarded to her as damages for the Deceased’s fraud. In oral submissions for the present appeal, the Appellant abandoned her claim in restitution (see below at [28]).
The Judge’s findings and decision
[23] The Judge dismissed both the Appellant’s claims.
[24] Addressing the claim in fraudulent misrepresentation, the Judge found that there were no express representations or active attempts to conceal assets during the Deceased’s lifetime. Rather, it was the Appellant’s own perception and conclusion that the Deceased was a man of straw. Accordingly, even if there had been a representation, the Judge found that the Appellant had not relied on it. She further found that the monies were not matrimonial assets and thus any reliance on the alleged misrepresentation would not have caused the Appellant any loss.
[25] Turning to the issue of unjust enrichment, the Judge found that there could not be a proprietary remedy over the 1999 and 2002 trusts as the funds had been comingled over the past 12 years and their sources could not now be ascertained. There were accordingly no identifiable funds over which an RCT could be imposed. The Judge further found that she had no power to determine what the Appellant would have received on division given the passage of time since the divorce and the remedy which the Appellant sought was thus elusive. The Judge also found that an RCT was a remedy and not a claim in restitution. She thus also disallowed the Appellant’s claim in restitution.
The issues on appeal
[26] As stated at [2] above, the threshold issue is whether the Deceased had made a fraudulent misrepresentation to the Appellant that he was impecunious or had little or no assets, intending that the Appellant would act on that representation to agree to forgo division of matrimonial assets (“Issue 1”).
[27] If the Appellant succeeds in proving this threshold question, the following issues arise:
(a) Did the Appellant rely on the Deceased’s misrepresentation and suffer loss as a result? This relates to the rest of the claim against the First Respondent in fraudulent misrepresentation (pursuant to Issue 1).
(b) Was there unjust enrichment of the Second Respondent (“Issue 2”)?
(c) Can an RCT be imposed for unjust enrichment (“Issue 3”)?
(d) Does the defence of laches apply (“Issue 4”)?
[28] We note that, although the Appellant had begun with an additional claim that an RCT should be imposed in any event, counsel for the Appellant, Mr Hri Kumar Nair SC (“Mr Kumar”), conceded (correctly, in our view) during the appeal hearing that an RCT could not be imposed without a finding of unjust enrichment.
Issue 1
The applicable principles
[29] The applicable principles relating to fraudulent misrepresentation are well-established.
[30] It is, in our view, of the first importance to emphasise right at the outset the relatively high standard of proof which must be satisfied by the representee (here, the Appellant) before a fraudulent misrepresentation can be established successfully against the representor (here, the Deceased). As V K Rajah JA put it in the Singapore High Court decision of Vita Health Laboratories Pte Ltd v Pang Seng Meng [2004] 4 SLR(R) 162 (at [30]), the allegation of fraud is a serious one and that “[g]enerally speaking, the graver the allegation, the higher the standard of proof incumbent on the claimant”. If an allegation of fraud is successfully made, the representor would be justifiably found to have been guilty of dishonesty. Dishonesty is a grave allegation requiring a high standard of proof. In a similar vein, this court in Tang Yoke Kheng (trading as Niklex Supply Co) v Lek Benedict [2005] 3 SLR(R) 263 observed thus (at [14]):
[31] This high standard of proof is also consistent with the fact that an award of damages for fraudulent misrepresentation covers a wide ambit – including all loss which flowed directly as a result of the entry by the representee into the transaction in question, regardless of whether or not such loss was foreseeable, and which would include all consequential loss as well (see, for example, the decision of this court in Wishing Star Ltd v Jurong Town Corp [2008] 2 SLR(R) 909 (“Wishing Star”) at [21]–[27]). The leading English decision in this regard (which was followed in Wishing Star) is that of the House of Lords in Smith New Court Securities Ltd v Citibank NA [1997] AC 254 (“Smith New Court”). In Smith New Court, Lord Steyn pertinently observed that a stricter approach towards the fraudster which disregards the usual limiting factors is adopted in the context of fraudulent misrepresentation because “[f]irst it serves a deterrent purpose in discouraging fraud” (at 279) and “[s]econdly, as between the fraudster and the innocent party, moral considerations militate in favour of requiring the fraudster to bear the risk of misfortunes directly caused by his fraud” (at 280).
[32] The oft-cited statement of principle in so far as the elements of fraudulent misrepresentation are concerned is that of Lord Herschell in the leading House of Lords decision of Derry v Peek (1889) 14 App Cas 337, as follows (at 374):
[33] Lord Herschell’s statement of principle is now an established part of the Singapore legal landscape relating to fraudulent misrepresentation (see, for example, the decision of this court in Wishing Star (at [16]–[17], as well as the authorities cited therein)).
[34] However, the concept of recklessness must not be equated with negligence or carelessness. As Bowen LJ aptly observed in the English Court of Appeal decision of Angus v Clifford [1891] 2 Ch 449 (“Angus”) (at 471):
[35] This approach has been adopted locally in the Singapore High Court decision of Raiffeisen Zentralbank Osterreich AG v Archer Daniels Midland Co [2007] 1 SLR(R) 196 (“Raiffeisen Zentralbank”), where the learned judge opined (at [40] and [43]) as follows:
[36] An important point which will be of significance in the context of the present appeal is this: in assessing whether an alleged representation was in fact made, “[t]he particular words used must of course be read in their context” (per Waller LJ in the English Court of Appeal decision of Jaffray v Society of Lloyd’s [2002] EWCA Civ 1101 (“Jaffray”) at [52] [emphasis added in italics and bold italics]; reference may also be made to the English High Court decision of FoodCo UK LLP v Henry Boot Developments Limited [2010] EWHC 358 (Ch) at [197]). Indeed, Waller LJ proceeded (in Jaffray) to observe as follows (at [52]):
[37] Another important point – which is also of no small relevance to the analysis of the facts of the present appeal – relates to the representor’s (here, the Deceased’s) perspective. Put simply, it is the representor’s own (subjective) belief that is crucial. Such subjective belief must be ascertained by the court based on the objective evidence available, but the court cannot substitute its own view as to what it thinks the representor’s belief was. This is not merely a semantical difference. As just noted, the concept of objectivity is to be applied to the evidence demonstrating what the representor’s subjective belief was and not to what the court thought a reasonable person would think the representor’s belief was. Hence, even if a reasonable person would think that the belief the representor claimed to have had at the time he or she made the statement in question was unreasonable, that would not thereby render that particular statement fraudulent if the representor honestly believed in what he or she was representing. As Bowen LJ put it in Angus (at 471):
[38] The learned Lord Justice also observed as follows (see Angus at 472):
[39] In a similar vein, in the Privy Council decision of Baron Uno Carl Samuel Akerhielm v Rolf De Mare [1959] AC 789, Lord Jenkins, delivering the judgment of the Board, observed (at 805) as follows:
[40] Reference may also be made – in the local context – to the decision of Raiffeisen Zentralbank which adopts an identical approach (at [41]–[43]):
[41] Where the meaning of the statement is ambiguous, the question is what the representor subjectively intended the statement to mean. In the High Court of Australia decision of John McGrath Motors (Canberra) Pty limited v Applebee (1964) 110 CLR 656 (“John McGrath Motors”), the court had to determine what the representor car salesman meant by the word “new” in his description of a motor car. The representee purchaser had taken “new” to mean “not second-hand”. Both parties accepted from the outset that the word “new” was susceptible of more than one interpretation and there was no evidence that the description by the salesman was to his knowledge false or made with reckless indifference as to its truth or falsity. The judge in the Supreme Court of the Australian Capital Territory disbelieved the representor salesman’s testimony that he had not known the history of the car and thus did not know that the car was in fact, a second-hand one. On appeal, the High Court of Australia resolved the ambiguity of the word “new” in favour of the representor. In arriving at this conclusion, the court reasoned (at 659) as follows:
[42] We also note that there has been some discussion as to whether or not proof of reliance is necessary in the context of fraudulent misrepresentation. This particular issue has been dealt with admirably by Assoc Prof Pearlie Koh (“Prof Koh”) in her excellent and comprehensive chapter entitled “Misrepresentation and Non-disclosure” in ch 11 of The Law of Contract in Singapore (Academy Publishing, 2012) (“Koh”) at paras 11.067–11.071, and we therefore do not propose to rehearse the analysis contained therein. Suffice it to state that the learned author, after surveying all the relevant decisions from the various jurisdictions, concludes thus (see Koh at para 11.071):
[43] It is clear, in our view, that the element of reliance cannot (as a matter of both logic as well as commonsense) be dispensed with, even in the context of fraudulent misrepresentation (see also the decision of this court in Ang Sin Hock v Khoo Eng Lim [2010] 3 SLR 179 at [43]–[44]; the recent English Court of Appeal decision of EC03 Capital Limited v Ludsin Overseas Limited [2013] EWCA Civ 413 at [77]; as well as Prof John Cartwright’s specialist text, Misrepresentation, Mistake and Non-Disclosure (3rd Ed, Sweet & Maxwell, 2012) (“Cartwright”) at pp 206–209). Reliance is the logical end of inducement, but viewed from a different vantage point. The question of inducement is approached from the perspective of the representor (here, the Deceased). The question of reliance is approached from the perspective of the representee (here, the Appellant); in particular, reliance looks at the actions of the representee arising from a state of mind or will engendered by the representation concerned. The Oxford English Dictionary (2nd Ed, Clarendon Press, 1989) defines inducement in the following way:
[44] Put simply, there can be no inducement stricto sensu if the statement intended to induce does not act upon the will of the representee (here, the Appellant) such that it influences or leads the representee to change her behaviour in reliance on the misrepresentation.
[45] Although we note Prof Koh’s proposition set out at [42], it may well be the case that if what is suggested is the raising of a legal presumption, that might go a little too far although it could, at the very least, be stated that “it is a fair inference of fact (although not an inference of law) that [the representee] was influenced by the statement, and the inference is particularly strong where the misrepresentation was fraudulent” (see Chitty on Contracts vol 1 (31st Ed, Sweet & Maxwell, 2012) (“Chitty”) at para 6-039 [emphasis added]). Indeed, it is significant that Prof Koh cites the observation by Lord Blackburn in the House of Lords decision of William Smith v David Chadwick (1884) 9 App Cas 187 (at 195–196) immediately after the passage from her proposition (set out above at [42]), which observation utilises the phrase “a fair inference of fact”. As a matter of practical application, we would emphasise that much, in the final analysis, would depend – as is the case with the doctrine of fraudulent misrepresentation generally – on the precise facts before the court (see also Chitty at para 6-039).
[46] On a related note, Prof Koh also observes as follows (see Koh at para 11.079):
[47] The proposition just stated is logical as well as commonsensical. Where, on the facts, it is demonstrated that the representor had not intended to induce the representee to act on the representation, there can be no fraud. This is merely an application of the well-established principle that fraud cannot be established without dishonesty; what matters is the representor’s (here, the Deceased’s) subjective state of mind which is, for fraud to be made out, directed towards manipulating the actions of the representee (here, the Appellant). The “onerous evidential burden of proving the necessary intention” lies with the representee (see the English High Court decision of Goose v Wilson Sandford & Co [2001] 1 PN 189 (“Goose”) at [52]). Motive, or the lack thereof, may be relevant in assessing what the representor’s subjective state of mind was (see Goose at [52]). In other words, if the representor had no interest in the representee changing his or her position in reliance on the representation, then it may be inferred that the representor did not intend to induce the representee to rely on his misrepresentation. Once again, this is (as we shall see below) a proposition which will figure in the analysis of the facts of the present appeal.
[48] In so far as the representee’s (here, the Appellant’s) perspective is concerned and commenting on the issue of ambiguity, Prof Koh observes as follows (see Koh at para 11.015):
[49] It is important, in our view, to note that it is not sufficient for the representee (here, the Appellant) to merely assert – without more – that she understood the words utilised by the representor (here, the Deceased) in a particular way. Whether or not she did, in fact, so understand those words in that particular way would depend, in the final analysis, very much upon all the evidence available (including, where applicable, the testimony by the representee herself).
[50] Let us now turn to apply the various principles to the facts of the present appeal.
Our decision
Introduction
[51] This case – as is the situation with regard to virtually all cases of alleged misrepresentation – turns entirely on the facts (as analysed in their context (see above at [36])). Whether the Deceased had made a fraudulent misrepresentation depends not only on whether a false representation was made, but also (as noted above at [37]–[47]) on the Deceased’s subjective state of mind, viz, whether he knew the statement was untrue and whether he intended the Appellant to act in reliance on that statement (based, of course, on the objective evidence available). Whether the entire claim of fraudulent misrepresentation is made out depends, additionally (as also noted above at [44] and [48]–[49]), on the Appellant’s own subjective state of mind, viz, how she understood the alleged misrepresentation and whether she was acting in reliance on it or whether she had (instead) already closed her mind to the possibility that the Deceased might have assets significant enough for her to want to ask for a division of matrimonial assets.
[52] Quite clearly, the Deceased’s testimony would have been essential to the Judge’s finding had he been available to be cross-examined, as only the Deceased could have testified first-hand as to his state of mind at the material time. The only evidence, however, which we now have of the Deceased’s state of mind lies in the documents which he had written as well as the Appellant’s testimony as to what had been communicated to her. Where the documents and statements made are ambiguous or susceptible of more than one interpretation, it is the Appellant’s testimony as to what had been said to her and the Deceased’s behaviour at the material time which would provide the necessary context as well as shed light on how these statements ought to be interpreted.
[53] It is equally clear to us that the Appellant’s testimony is – in the nature of things – also crucial in this case (see above at [49]). The Appellant is the only one who can tell us how she had understood the alleged statements the Deceased had made in his correspondence with her and in the Affidavit, why she understood them that way, and whether she was acting in reliance on them when she opted not to go for division. Such crucial evidence as to her subjective state of mind cannot be divined or surmised from the documentary evidence alone.
[54] Indeed, the documentary evidence sheds little or no light on the subjective states of minds of the Appellant and the Deceased in the context of the present appeal. In our view, this is not a case based largely on documentary evidence as the Appellant claims. This is a case where the Appellant’s testimony and the credibility thereof are critical to the case.
[55] In our view, this case is distinguishable from, for example, the decision of this court in Ng Chee Chuan v Ng Ai Tee (administratrix of the estate of Yap Yoon Moi, deceased) [2009] 2 SLR(R) 918 (“Ng Chee Chuan”). In Ng Chee Chuan, the sole issue of fact was whether there was an oral agreement between the parties whereby the deceased mother had agreed to relinquish her interest in the trust shares in exchange for a monthly payment. This court proceeded to rely on documentary evidence of what happened after the alleged oral agreement was entered into, how the trust shares were taken care of, and the behaviour of the other members of the family in relation to the deed for transfer of shares which had been signed for no consideration. In other words, the court could refer to documentary evidence objectively showing the existence of an agreement. It is in this context that this court concluded (at [19]) that the question of the credibility or veracity of witnesses was not critical. In contrast, the present case is not one which can be disposed of by objective evidence of the existence of a false representation or of an agreement; an inquiry into the subjective states of minds of the Appellant and the Deceased needs to be made. In respect of the former, the court is faced with nothing else but her oral evidence. It is precisely such a situation which this court in Ng Chee Chuan contrasted the facts before it to when it commented (at [19]):
[56] This case is, to our minds, one where the veracity and credibility of the witnesses, and in particular the Appellant (given that the Deceased was not available to give evidence), is critical. The following observations made by this court in Tat Seng Machine Movers Pte Ltd v Orix Leasing Singapore Ltd [2009] 4 SLR(R) 1101 (at [41]) in relation to the basis for review by this court of the Judge’s findings of fact is therefore entirely apposite:
[57] With these important preliminary observations in mind, and noting the fact that certain crucial elements of the claim in fraudulent misrepresentation rest on the veracity and credibility of the witnesses, we now turn to examine the substantive issues at hand.
The alleged misrepresentations
[58] The Appellant points, in the main, to two sets of documents which she alleges contained fraudulent misrepresentations:
(a) The correspondence between the Deceased and Appellant after 7 December 1998; and
(b) The Affidavit.
[59] It bears emphasising that it is not sufficient for the Appellant to show that some misrepresentation had been made. She must prove that that misrepresentation was fraudulent in accordance with the high standard of proof referred to above (at [30]). We should add that the court will not readily adopt her interpretation of any particular statement where such statement may be ambiguous and where more than one inference may be drawn from the same statement (see, for example, the High Court of Australia decision of John McGrath Motors, cited above at [41]). Such circumspection applies with particular force where the Judge has made a finding with regard to the Appellant’s credibility and has disbelieved her interpretation of events, a course of conduct, or even a statement made.
The correspondence between parties
[60] The Appellant points, in particular, to the Deceased’s statement in a letter from the Deceased’s lawyers to the Appellant’s lawyers dated 11 October 1999 in which it was stated that the Deceased was in “no financial position” to pay RM3,750 per month per child in maintenance. However, this statement must be read in the context of the Separation Agreement to which it makes reference and the correspondence between the Appellant’s lawyers and the Deceased’s lawyers in 1999 which prefaced the statement. The context does not, in our view, indicate that the Deceased had little or no assets. In fact, the Deceased made no attempt in the Separation Agreement or in the correspondence to hide the fact that he had assets.
[62] The Appellant also asserts that the correspondence suggested that the Deceased was unable to pay even the small sum of RM8,445.69 which he had incurred on the Appellant’s supplementary credit card in December 1998. With respect, this is a gloss on what was actually contained in the correspondence. On 30 June 1999, the Appellant’s lawyers wrote to ask for settlement of the monies owing to the Appellant for the Deceased’s expenditure on the supplementary credit card. The Deceased’s lawyers wrote back on 26 July 1999, agreeing without demur to make full settlement of the amount owing. By this time, it was clear that the Deceased was no longer financially dependent on the Appellant; the supplementary credit card had been cancelled and the Deceased was living apart from the Appellant.
[63] The correspondence also contained other clues that the Deceased was not in fact impecunious. The letter dated 26 July 1999 informed the Appellant via her lawyers that the Deceased was purchasing private property in Singapore for the benefit of Joshua and Azura and assured the Appellant that the children’s financial needs would be taken care of. This was a direct response to the Appellant’s letter dated 7 June 1999 asking for “evidence that [the Deceased] is fit and capable to provide the necessary care for the children as befitting the lifestyle that they are accustomed to” [emphasis added]. It is undisputed that this is a high standard of living requiring quite some wealth. The letter contained the curt reply: “It suffices for our client to say that he has the financial means to provide for the children’s needs.” The implication was that the Deceased did have assets but did not want the Appellant to know the full extent of them save that they were enough to maintain Joshua’s and Azura’s high standard of living. If anything, this should have caused the Appellant to suspect that the Deceased was actually very wealthy. In fact, there is some evidence that this was indeed the Appellant’s suspicion (see below at [67]). The documents point to the opposite conclusion from what the Appellant asserts, ie, they show that the Deceased was not concealing the fact that he was a man of means. While he probably did not want the Appellant to know the full extent of his assets, he did not seem to be taking any pains to conceal their existence.
[64] Mr Kumar argued that the statement “it suffices for our client to say that he has the financial means to provide for the children’s needs” [emphasis added] was made in the context of correspondence specifically relating to maintenance for Joshua and Azura and was a deliberate concealment of the Deceased’s other assets. By such concealment and omission, Mr Kumar argues that the Deceased implied that he had no other financial means outside of those required for the care of Joshua and Azura. Mr Kumar’s argument was, in our view, wholly unpersuasive.
[65] It is trite law that “mere silence, however morally wrong, will not support an action of deceit” (see, for example, the House of Lords decision of Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at 211). There can be no misrepresentation by omission, although active concealment of a particular state of affairs may amount to misrepresentation (see, for example, the English Court of Appeal decision of Gordon v Selico Co Ltd [1986] 1 EGLR 71, where a landlord deliberately covered up an extensive outbreak of dry rot in his flat, intending to deceive the long-term lessees of the flat). However, Mr Kumar’s case does not even meet the threshold of active concealment. It is his own case that the correspondence related specifically to the issue of Joshua and Azura and provision for their needs. Mr Kumar pointed us to a letter dated 30 June 1999 from the Appellant’s lawyers where the Appellant demanded that the Deceased provide her “particulars of the [financial] provisions made by him for [the children’s] care”. In this context, it is not surprising that the response elicited from the Deceased stated that he had the financial means to provide for the children’s needs. The Deceased was merely answering the Appellant’s question of 30 June 1999; an omission to mention his financial means outside that context was not an active concealment and could not thus have been a false statement of fact amounting to a misrepresentation. There is no evidence that the Deceased deliberately and dishonestly concealed the truth from the Appellant with the intention to mislead her into thinking that he had no assets to divide.
[66] Ascertaining assets for division was clearly not the intention of either party in the correspondence. The question the Appellant asked was whether the Deceased could provide for the children out of his own assets. The Deceased responded that he could. It was more likely than not that the Deceased was already operating from the mindset that the monies were his assets and not assets which would be available for division. Given the fact that most of the monies had been paid out after the Deceased and the Appellant had separated, it is not unlikely that the Deceased would have been labouring under the impression that the monies were not matrimonial assets and therefore not available for division. The argument that the monies were not matrimonial assets was, in fact, an argument successfully run by the First Respondent in the trial below (although we disagree with the Judge’s analysis for the reasons given at [76]–[78] below), and would have been a reasonable supposition for the Deceased to have made. This would explain the general tone of the correspondence and the underlying assumption that the Deceased had assets of his own to deal with in the support and care of Joshua and Azura. It is immediately apparent that the Deceased could not have intended to mislead the Appellant if he did not even realise that the monies were matrimonial assets to begin with. It bears reiterating that it is the Appellant who has to prove, in accordance with a high standard of proof (see above at [30] and [59]), that the Deceased had the requisite fraudulent intent. Where the evidence suggests that there may be a reasonable belief that the monies were not matrimonial assets and so would not have been available for division, it is for the Appellant to prove that matters were otherwise.
[67] Against this backdrop, the Deceased’s statement that he was “in no financial position” to provide RM3,750 per child in monthly maintenance is not sufficient, in and of itself, to constitute a misrepresentation that the Deceased was impecunious. This was a one-off statement which was not repeated subsequently and was out of sync with the rest of the correspondence. Unsurprisingly, the Appellant wrote back on 22 October 1999 arguing (at para 6) that the Deceased’s living arrangements indicated that he was able “to maintain a lifestyle and [was] not … someone who is ‘in no financial position’ to maintain his two children”. It is crucial to note that at no point in time did the Deceased renege on his commitment to pay for the children’s educational and medical expenses, nor did he ever express any doubt that he could maintain Joshua and Azura to their accustomed standard of living whenever they stayed with him. The statement was limited only to the question of monthly maintenance and could equally have meant that the Deceased did not have a regular income. Given that the monies constituted almost all of the Deceased’s wealth at the material time, the Deceased’s confidence that he could commit to making provision for Joshua’s and Azura’s educational, medical and lifestyle requirements must have derived (from his perspective) from the fact that he was in possession of the monies and was of the view that the monies were his. If the Deceased had thought, to the contrary, that these were monies which were available for division and which he stood to lose, he would most likely have taken further and more consistent efforts to conceal his wealth and would have been unlikely to individually (as well as with such confidence) take on such large financial commitments in relation to Joshua and Azura.
[68] In our view, the correspondence between the Deceased and the Appellant, when taken in their proper context as an attempt to settle the outstanding issue of care and control, maintenance and custody of the children, did not contain a misrepresentation to the effect that the Deceased had little or no assets for division. As Mr Kumar himself put it, the correspondence was not even about division of assets. As we have also observed (above at [66] and [67]), it was likely that the Deceased did not even consider that the monies were matrimonial assets available for division and in any event seemed to be operating on the basis that the monies were his assets and not joint assets which could be divided at the ancillary stage of divorce proceedings and which he stood to lose. The Appellant did not adduce evidence that the Deceased regarded the monies as matrimonial assets which could be divided. We further find that there was nothing in this correspondence which pointed to an active concealment of assets by the Deceased, who was simply providing answers to the questions put to him by the Appellant. We find that the Judge’s assessment of the correspondence between the Deceased and the Appellant was not plainly wrong or against the weight of the evidence.
The Affidavit
[69] The Deceased had stated in the Affidavit as follows:
[70] Mr Kumar pointed to the phrase “[d]espite my financial position” in para 3 of the Affidavit and argued that, in the context of para 2, this phrase impliedly represented to the Appellant that he did not even have the financial means to pay maintenance for Joshua and Azura, much less assets to be divided.
[71] It is true that the Deceased had a duty of full and frank disclosure in filing the Affidavit (see, for example, the decision of this court in Wee Ah Lian v Teo Siak Weng [1992] 1 SLR(R) 347 (at [54]–[55])). The monies had been received by the Deceased by the time the Affidavit was filed. He was thus in a good financial position and was not wholly dependent on financial support from his parents, siblings, friends and wellwishers, as he claimed in para 2 of the Affidavit. In our view, however, the phrase “[d]espite my financial position”, whilst literally conveying the impression that the Deceased was not in the financial position to pay a higher sum for maintenance of Joshua and Azura, was merely a form of exaggeration or posturing, and, looked at in this context, was not a misrepresentation to begin with. The phrase “[d]espite my financial position” which the Appellant hangs her whole case on is, at best, ambiguous or obscure. As already emphasised (at [36]), each alleged representation must be read in its specific context. Where a statement is ambiguous, the representee (here, the Appellant) has the burden of proving that the representor (here, the Deceased) understood and intended those words in the sense alleged (viz, that the Deceased had no assets to divide) in the context in which they were made. In this case, the context was set by the correspondence between the parties prior to the filing of the Affidavit. Indeed, consistently with our analysis of the correspondence between the parties above, it was clear, in so far as the Appellant was concerned, that the Deceased was by no means impecunious. It was also likely that the Deceased regarded the monies as his own assets and not as matrimonial assets which were susceptible to division (see above at [66] and [67]). In our view, the issue of division was probably not in the contemplation of the Deceased when he made that statement.
[72] However, even if we assume that the Deceased had made a misrepresentation, the Deceased’s subjective state of mind is important in ascertaining whether or not (in accordance with the principles set out above at [29]–[49]) he had been guilty of fraud. The Deceased’s subjective state of mind is of particular importance in the present case because the statement alleged to be false is capable of more than one interpretation. As stated in Edwin Peel, Treitel: The Law of Contract (13th Ed, Sweet & Maxwell, 2011) (“Treitel”) at para 9-006:
[73] If the allegation is that the Deceased intended, by the obscurity or ambiguity of his statement, to mislead the Appellant, his subjective state of mind is equally important. Treitel goes on to observe in the same paragraph as follows:
[74] It is immediately apparent that the subjective states of mind of both the Deceased and the Appellant acquire crucial significance in relation to the statement made in the Affidavit. If the Deceased did not intend the phrase “[d]espite my financial position” to convey the meaning that he had no assets capable of being divided, then his statement, however false or misleading, cannot constitute fraud. Equally, if the Appellant could not have understood that phrase, read in its proper context, as conveying the meaning that the Deceased had no assets capable of division, then there is no fraud.
[75] Before proceeding to further consider the issue of alleged fraud on the part of the Deceased, an important preliminary point ought to be clarified. In this regard, we could not, with respect, accept the Judge’s finding that the Deceased could not have intended the misrepresentation because the monies were not matrimonial assets. This is a legal question which we found that the Judge had, with respect, erred on. Whether the date of the decree nisi or the date of the Separation Agreement is taken to be the operative date of separation, the monies would, in our view, constitute matrimonial assets. Both M&W Agreements were entered into before 7 December 1998.
[76] The M&W Agreements were not, as the First Respondent claims, merely conditional contracts. The Second M&W Agreement was a straightforward engagement of the Deceased as strategic financial advisor for the Project. There is no mention of assuring the successful procurement of the Project (see [8(b)] above). The First M&W Agreement was only partially conditional, with 40% being payable regardless of the fulfilment of the condition. Accordingly, only a part of the monies was an unvested conditional right. The rest of the monies had vested in the Deceased prior to the date of Separation and were matrimonial assets. As for the remaining 60% on the First M&W Agreement, the Appellant correctly points out that choses in action, even if they are unvested, may be matrimonial assets. In Chan Teck Hock David v Leong Mei Chuan [2002] 1 SLR(R) 76 (“David Chan”), this court held (at [28]) that while a contract to grant an option upon the fulfilment of a condition is “one step removed from having a present option to purchase the shares”, the granter could not revoke the agreement to grant the option without cause and the grantee had a valuable contractual right capable of being factored into the pool of assets for division. It is clear to our minds that the remaining 60% of the monies under the First M&W Agreement is indistinguishable from the assets mentioned in David Chan. Both are conditional, unvested rights capable of being assigned a value in division, although their exact value may be difficult to determine.
[77] The First Respondent’s reliance on the Singapore High Court decision of Lim Ngeok Yuen v Lim Soon Heng Victor [2006] SGHC 83 (“Lim Ngeok Yuen”) as support for the proposition that assets could be excluded from the time the parties separated does not assist her case in this particular regard. The monies would be matrimonial assets even if the Separation Agreement was taken as the operative date of separation. In Lim Ngeok Yuen, the judge took the date of the couple’s separation as the date after which they intended to live their separate lives. Accordingly, she excluded assets accumulated by the husband after the date of separation but before the grant of the decree nisi on the ground that there was no intention that these assets would go towards what was shared by the couple in their marriage. The judge in Lim Negok Yuen had, however, acknowledged (at [45]) that these assets “technically … did form a matrimonial asset”. This assumes that prima facie, the assets were part of the pool of matrimonial assets. It was only during the division, and not before, that the judge exercised her discretion to exclude those assets. This cannot be used to support the proposition that division is precluded because there is an earlier date of separation which should be taken to be the effective end of the marriage. We also note that Lim Ngeok Yuen dealt with property acquired de novo after the parties had parted ways whereas in the present case, the M&W Agreements had been made while the Appellant and Deceased had been living together as husband and wife with the fortuitous circumstance that the condition resulting in the vesting of the monies in the Deceased occurred after their separation.
[78] We find that there is no legal basis for the argument that the monies were not matrimonial assets. Accordingly, the First Respondent’s argument that the Deceased’s alleged misrepresentation could not have caused the Appellant any loss cannot be sustained. However, it does not logically follow that the Deceased could not have been labouring under the impression that the monies were not matrimonial assets, but rather, were his assets to keep. While it was clear to us that the monies were matrimonial assets, we do note that this was not a straightforward case of matrimonial assets and that the Deceased did not have any legal training in order to understand the subtleties of when a chose in action which vested after separation could be included as part of the pool of matrimonial assets. There is also no evidence that the Deceased sought legal advice on this point, particularly since the available evidence points to the proposition that the question of division was probably not even on the table at the material time (see above at [71]). As we have already stated, the Deceased could very well have thought that the monies were not matrimonial assets. Our analysis (above at [66] and [67]) of the Deceased’s most likely state of mind is unaffected by our analysis of whether the monies were available for division in law. Having dealt with this particular issue, we now turn to the evidential arguments which the parties make.
[79] Returning to the Affidavit, Mr Kumar argued that the only intention which the Deceased could have had in the context was to induce the Appellant not to apply for division. He pointed to an internal memorandum from BPITL’s Kenneth Lee, recording the contents of a tele-conversation with the Deceased. One of the points recorded in this internal memorandum, dated 24 November 1999, was that the Deceased “would not like the ex-wife [the Appellant] to benefit from the trust funds and would not like her to know the Trust’s existence”. Mr Kumar argued that this clearly showed an intention to conceal his assets from the Appellant as recently as two months before the Affidavit was filed.
[80] Counsel for the First Respondent, Ms Deborah Barker SC (“Ms Barker”), argued that the Separation Agreement had the nature of a binding compromise agreement for final settlement of issues between the Appellant and the Deceased and this was reflected in the amended Divorce Petition filed on 22 December 1998. Ms Barker argued that, by the time the Affidavit was filed, the notion of division was no longer operating on the mind of the Deceased as he had considered the issue settled from 7 December 1998. The Deceased thus could not have intended for the Appellant to rely on his statements to forgo division of matrimonial assets.
[81] Unfortunately, the Deceased could not be offered for cross-examination. The only account of the circumstances surrounding the Separation Agreement as well as the circumstances leading up to the filing of the Affidavit is the Appellant’s account. Whether the Judge believed the Appellant’s account of what was said and done at the material time by the Deceased is therefore a matter of critical importance. The Judge found that the Appellant’s position in relation to what representations were made to her (and when) shifted from the start of her case to the close of it. The import of the Judge’s findings was that the Appellant was not a reliable witness and her interpretation of events could not be relied on. The Appellant had averred in the court below, and continues to aver, that the Deceased’s actions were only consistent with an intention to mislead. With respect, this is purely speculative.
[82] It has already been observed (above at [64] and [70]) that it is the Appellant’s own case that the correspondence immediately preceding the filing of the Affidavit and which continued for more than six months prior was for the limited purpose of discussing the maintenance of the children. The only context in which the Deceased’s financial means had been raised was in the context of whether the Deceased could provide for Joshua and Azura. It was the Appellant’s own case that the only thing outstanding at the time the Affidavit was filed was the issue of custody, care and control as well as support and maintenance of Joshua and Azura. This is consistent with the correspondence which passed between the parties during that particular period of time. It is also consistent with the correspondence between the parties that the Deceased regarded the monies as his own assets and not matrimonial assets which were available for division (see above at [66]). It was thus unlikely that the Deceased would have been thinking about the division of the monies when he filed the Affidavit.
[83] The Appellant’s arguments in relation to the correspondence cuts both ways. If, indeed, the only issue left to be resolved between the Appellant and the Deceased at the material time was custody, care and control as well as support and maintenance of Joshua and Azura, it is difficult to believe that the issue of division was still a live issue operating on the minds of the Deceased and the Appellant. The Appellant never gave evidence as to when the decision was taken to forgo division and when this decision was communicated to the Deceased. Indeed, the Judge observed (at [94] of the Judgment) that the Appellant’s stance kept changing. Even until the present time, it is not clear when the issue of division ceased to be a live issue. What is clear from the correspondence and from the Appellant’s own case is that, by the time the Affidavit was filed, the question of division, and in particular the division of the monies which the Deceased could well have regarded as assets which were not susceptible to division, was probably not in the minds of the Deceased or the Appellant at all. Whether the Separation Agreement was a full and final settlement of the issues between the Deceased and the Appellant does not affect this analysis.
[84] Given the fact that division had ceased to be a live or important issue between the Appellant and the Deceased, the Appellant’s argument that the only intention consistent with the Deceased’s behaviour was an intention to induce the Appellant to forgo division is fanciful. In the context of maintenance of the children, the Deceased was (putting the Appellant’s case at its highest) merely attempting to persuade the court to reduce the monthly maintenance sum he was to pay the Appellant for Joshua and Azura. As far as the Appellant was concerned, the Deceased had communicated his intention of paying a lower monthly maintenance sum for Joshua and Azura to the Appellant via the lawyers’ correspondence described in the preceding section. Consistent with his earlier position, the Deceased had in his mind the question of maintenance, care and control as well as custody. If the question of division was not present and acting on his mind, he could not be said to have intended to induce the Appellant to forgo division, let alone that he had made the statements in the Affidavit (in particular, at para 3 thereof) fraudulently.
[85] Could it then be said that the Deceased made the statement in the Affidavit recklessly, without care and regard for its truth and falsity? As emphasised above (at [34]), the concept of recklessness in the context of fraudulent misrepresentation cannot be equated with mere negligence or carelessness. The statement which the Deceased made again related to the maintenance of Joshua and Azura. The four words “[d]espite my financial position” do not alter the content of his statement nor the context in which it was made. The Deceased made (at worst) a careless statement which implied that his financial means only permitted him to pay up to RM1,200 a month in maintenance for each child. It is worth noting that he had never represented to the Appellant that he was unable or unwilling to pay for Joshua’s and Azura’s educational and medical expenses, and that he had never made a deliberate and consistent effort to conceal his assets (see above at [63] and [67]). He was thus clearly not making the representation that he had no financial means in vacuo. At best, the Deceased, by his exaggeration, made a statement not amounting to fraud as there is little evidence that the Deceased intended, either directly or indirectly, to induce the Appellant to forgo division. Indeed, where there is a reasonable chance, as in this case, that the Deceased believed that the monies were not matrimonial assets for the purposes of division, the analysis in this paragraph applies a fortiori.
[86] It has already been observed (above at [43] and [44]) that inducement acts upon the will of the representee to persuade, influence or lead on. This is more than mere encouragement. Indeed, there is an element of deliberateness to the word “inducement”. It would be highly improbable, if not impossible, for inducement to occur without the intention to persuade or influence. This assumes that the Deceased thought that the Appellant might ask for division and intended to subvert that possibility by persuading her that division of assets would not be worth her time. The Judge had disbelieved (at [97] of the Judgment) the Appellant’s denial that she wanted to avoid disclosing her assets and having them taken into account on division at the time the Affidavit was filed. Given that this was an assessment of the credibility of the Appellant, whose demeanour on the stand we were not able to witness, we are hesitant to disturb that finding. In any event, such a finding by the Judge is not clearly contrary to the evidence. It could not have been the case that the Appellant had nothing to put in the pool of matrimonial assets. The correspondence between the Deceased’s and the Appellant’s lawyers made reference to the Deceased’s financial means to maintain Joshua and Azura to the high standard of living they were accustomed to, his commitment to pay all Joshua’s and Azura’s educational and medical expenses (even tertiary education and boarding school abroad), his ability to pay off the outstanding sums incurred under the Appellant’s supplementary credit card, his luxurious lifestyle in Kuching, and his buying of private property in Singapore (see above at [61]–[68]). Yet, the Appellant never once asked about the division of matrimonial assets; there was nothing in her evidence at trial that suggested that she did so orally and there was nothing in the correspondence to indicate that the possibility of division was even on her mind. This was so even after the Appellant had written on 22 October 1999 that she did not believe that the Deceased was not in a financial position to pay RM7,500 a month in maintenance for both children. This would have given the Deceased the impression that the Appellant had already made up her mind not to ask for division. If it had been otherwise, why was the question of division not even discussed or alluded to at the material time? There is no sense in which the Deceased could then have led, influenced, or persuaded, the Appellant to persist with her decided course of action when he was not even aware that there was the scope for persuasion in the first place. At the very most, any representation on his part would have affirmed her already settled course of action, but could not have induced or persuaded her as she had already made up her mind.
[87] The phrase “[d]espite my financial position” which forms the crux of the Appellant’s case is, at its highest, an ambiguous statement made in a different context, viz, that of attempting to secure a reduction in monthly maintenance. The evidence demonstrates that the Deceased had simply not directed his mind to the question of division or assets available for division as this issue was not even on the negotiation table. The misrepresentation contained in the Affidavit was thus not fraudulent. Indeed, this conclusion is also consistent with the Judge’s finding in the court below that the Appellant had waived her right to a division of matrimonial assets because she had decided that the Deceased was a man of straw.
Whether there was reliance and loss
[88] Given our finding that there was no fraudulent misrepresentation, it is not strictly necessary to address the issue of reliance. However, given that reliance is intimately bound up with inducement in this case, we make some brief observations.
[89] Mr Kumar argued that the only explanation for the Appellant’s subsequent behaviour, viz, forgoing the RM500,000 owed to her by the Deceased, forgoing requests for maintenance and forgoing division was that she had relied on the Affidavit and the context in which it was made to conclude that the Deceased had no assets.
[90] With respect, this begs the question at hand. What Mr Kumar is actually arguing is that the Appellant would have asked for division if she knew that the Deceased had US$25,000,000 sitting in the bank. This skips the crucial step of asking whether reliance had been placed on the alleged fraudulent statement, viz, the Affidavit and specifically the four words “[d]espite my financial position”. Mr Kumar assumes that it was the Affidavit and/or the correspondence that led the Appellant to believe that the Deceased had no assets. However, that is precisely the issue which Mr Kumar must prove on a balance of probabilities. Mr Kumar’s argument is nothing more than an assertion that the alleged misrepresentation caused the Appellant to believe that the Deceased had no assets. When the Judge found (at [94] and [103] of the Judgment) that it was the Appellant’s own perception that the Deceased was a man of straw, the Judge’s findings addressed the crucial missing step in Mr Kumar’s argument, viz, what the source of her perception was. Unless reliance on the alleged misrepresentation is first proven, Mr Kumar cannot proceed to say that the Appellant’s actions were a result of her perception of the Deceased’s financial position.
[91] Mr Kumar’s argument, with respect, misses another crucial link: it assumes that the Appellant had interpreted the words in the sense in which they were false, rather than as an exaggerated statement that the Deceased could not pay regular maintenance of RM7,500 for both children. With respect, there is no evidence that the Appellant had interpreted the words “[d]espite my financial position” in the sense in which they were false. The burden lies on the Appellant to prove that she was induced by the alleged misrepresentation. Her subjective state of mind is an essential part of the analysis and she must give evidence on what she took those words to mean in the context of the Affidavit. It should be noted that there is little in the record of appeal which specifically addresses the question of how the Appellant had interpreted the words “[d]espite my financial position”. In fact, only two paragraphs in the Appellant’s Affidavit of Evidence-in-Chief specifically address the statement made in the Affidavit. These contained nothing more than the assertion that the Affidavit was a continuing misrepresentation and was “deliberately crafted to create the impression” that the Deceased was impecunious. The record of appeal reveals that the Appellant gave no evidence specifically on what she understood by the phrase “[d]espite my financial position”, or how it might have influenced her. The observations of the House of Lords in Smith v Chadwick (1884) 9 App Cas 187 (“Smith v Chadwick”) are apposite in this regard. In Smith v Chadwick, a prospectus was issued with an ambiguous statement which could mean, in that particular context, either that the company presently turned out produce worth over £1,000,000 a year (an untrue statement) or that the company was capable of turning out that amount of produce in a year (a true statement). The House of Lords found that it lay on the representee to prove that he had interpreted the words in the former sense (ie, the sense in which they were false) and had in fact been deceived by them to subscribe to shares in the company. Lord Blackburn observed (at 200):
[92] We have already stated our reasons (at [82]–[86]) for finding that the Appellant was unlikely to have been thinking about division at the time the Affidavit was filed. The reason why the Judge did not address the Affidavit in much detail in the Judgment was because the Affidavit was irrelevant by then; it could not have made an impact on the Appellant’s thinking or decisions. We should note that, contrary to the Appellant’s assertion, the Judge had directed her mind to the Affidavit. At [103] of the Judgment, the Judge stated that it was “unlikely that any representations were made… apart from what was stated in his affidavit of means”. This indicated to us that this was not a case of the Judge having ignored the Affidavit, but of having considered it and found that it had no bearing on the dispute as the relevant time frame in which the Appellant could have been influenced or persuaded to act in the way she did had already passed. Even in respect of the decree nisi, the outstanding issues related to the charging of the Deceased’s CPF accounts, and custody, care, control and maintenance of the children. When cross-examined on the decree nisi, she stated that she “recall[ed] clearly that we had issues on custody and maintenance of kids”. There was no indication that she thought the issue of division was still a live issue at the time of the decree nisi, much less eight months later when the Affidavit was filed.

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Wee Chiaw Sek Anna v Ng Li-Ann Genevieve (sole executrix of the estate of Ng Hock Seng, deceased) and another

Grounds of decision

Introduction

The facts

Parties to the dispute

Background to the dispute

The Judge’s findings and decision

The issues on appeal

(b) Was there unjust enrichment of the Second Respondent (“Issue 2”)?

(c) Can an RCT be imposed for unjust enrichment (“Issue 3”)?

(d) Does the defence of laches apply (“Issue 4”)?

Issue 1

The applicable principles

Our decision

Introduction

The alleged misrepresentations

The correspondence between parties

The Affidavit

Whether there was reliance and loss