B2C2 Ltd v Quoine Pte Ltd

CourtHigh Court (Singapore)
JudgeSimon Thorley IJ
Judgment Date14 March 2019
Docket NumberSuit No 7 of 2017
Date14 March 2019

[2019] SGHC(I) 3

Singapore International Commercial Court

Simon Thorley IJ

Suit No 7 of 2017

B2C2 Ltd
Quoine Pte Ltd

Danny Ong, Sheila NgandJason Teo (Rajah & Tann Singapore LLP) for the plaintiff;

Paul Ong, Ivan LimandMarrissa Karuna (Allen & Gledhill LLP) for the defendant.

Case(s) referred to

B2C2 Ltd v Quoine Pte Ltd [2018] 4 SLR 1, SICC (refd)

B2C2 Ltd v Quoine Pte Ltd [2018] 4 SLR 67, SICC (refd)

Chwee Kin Keong v Digilandmall.com Pte Ltd [2004] 2 SLR(R) 594; [2004] 2 SLR 594, HC (refd)

Chwee Kin Keong v Digilandmall.com Pte Ltd [2005] 1 SLR(R) 502; [2005] 1 SLR 502, CA (folld)

Fairfield Sentry Ltd v Migani [2014] UKPC 9 (refd)

Guy Neale v Nine Squares Pty Ltd [2015] 1 SLR 1097 (refd)

Hartog v Colin & Shields [1939] 3 All ER 566 (refd)

Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433; [1988] 2 WLR 615 (refd)

Lee Chee Wei v Tan Hor Peow Victor [2007] 3 SLR(R) 537; [2007] 3 SLR 537 (refd)

Lim Beng Cheng v Lim Ngee Sing [2016] 1 SLR 524 (refd)

National Provincial Bank Ltd v Ainsworth [1965] AC 1175 (refd)

OCBC Capital Investment Asia Ltd v Wong Hua Choon [2012] 2 SLR 311 (refd)

Olivine Capital Pte Ltd v Chia Chin Yan [2014] 2 SLR 1371 (refd)

Sembcorp Marine Ltd v PPL Holdings Pte Ltd [2013] 4 SLR 193 (refd)

Singapore Swimming Club v Koh Sin Chong Freddie [2016] 3 SLR 845 (refd)

Triple Seven MSN 27251 Ltd v Azman Air Services Ltd [2018] EWHC 1348 (Comm) (refd)

Wandsworth London Borough Council v D'Silva [1998] IRLR 193 (refd)

Warner-Lambert Co LLC v Generics (UK) Ltd [2019] Bus LR 360; [2018] UKSC 56 (refd)

Wee Chiaw Sek Anna v Ng Li-Ann Genevieve [2013] 3 SLR 801 (refd)

Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd [2015] 5 SLR 1187 (refd)

Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029; [2008] 3 SLR 1029 (refd)

Legislation referred to

Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 14

Unfair Contract Terms Act (Cap 396, 1994 Rev Ed) s 3(2)(b)(i)

Contract — Breach — Plaintiff a user of a currency exchange platform — Defendant the operator of the currency exchange platform — Plaintiff made virtual currency trades at rate deviating greatly from prevailing market rate — Plaintiff sold Ethereum at rate of one unit of Ethereum for approximately ten units of Bitcoin — Rate was 250 times the previous going rate — Defendant cancelled trades — Contract between plaintiff and defendant for use of platform provided that trades made on platform would be irreversible — Whether defendant's unilateral cancellation of trades was breach of contract

Contract — Mistake — Mistake of fact — Plaintiff made trades of virtual currencies — Trades were made using algorithmic trading — Defendant alleged that trades were made under mistake of fact — Whether trades made using algorithms programmed far in advance of trades were made under mistake of fact

Trusts — Breach of trust — Defendant cancelled trades made by plaintiff — Defendant withdrew bitcoin which had been credited to plaintiff's account — Whether unilateral withdrawal of bitcoin credited to plaintiff's account was made in breach of trust

Trusts — Express trusts — Defendant held virtual currency assets of users of platform in virtual currency wallet separate from its own assets — Whether express trust over virtual currencies was created


The defendant (“the Defendant”) operated a currency exchange platform (the “Platform”) which enabled third parties to trade virtual currencies for other virtual currencies or for fiat currencies. The plaintiff (“the Plaintiff”) traded on the Platform. On 19 April 2017, as a result of an earlier technical glitch, the assets in the accounts of two other traders on the Platform (“the Counterparties”) were identified by the Platform as being below a critical level such that the Platform automatically placed market orders for the sale of Bitcoin (“BTC”). These orders were in part met by seven of the Plaintiff's orders to sell Ethereum (“ETH”) for BTC. These orders were limit orders placed by the Plaintiff's program at a rate that was approximately 250 times the then market rate. The proceeds of sale of approximately 3092.5 BTC were automatically credited to the Plaintiff's account, and the corresponding amount of 309.25 ETH automatically debited from it. After the Defendant became aware of the technical glitch and the resultant trades, it unilaterally cancelled those trades and reversed the debit and credit transactions.

The Plaintiff claimed that the reversal of the trades was in breach of contract. The Plaintiff contended that its contractual relationship with the Defendant was governed by the terms and conditions (“the Agreement”) issued on the Defendant's website in June 2015 when it opened its account with the Defendant. The Agreement expressly provided that “once an order is filled, you are notified via the Platform and such an action is irreversible”. Reversing the trades was therefore a breach of the Agreement.

The Plaintiff also claimed that the Defendant held the proceeds of its account on trust for it, and that the unilateral withdrawal of BTC that had been credited to its account was therefore in breach of trust.

The Defendant mounted six defences to the Plaintiff's claims. First, it argued that a term ought to be implied into the Agreement allowing it to reverse the trades in question, on the basis that such a term was necessary to give business efficacy to the Agreement and to give effect to the intentions of the parties. Second, it argued that it was contractually entitled to reverse the trades by virtue of the Agreement being read together with a risk disclosure statement (“Risk Disclosure Statement”) that was subsequently put up on its website. Third, it argued that it was entitled to reverse the trades because the contracts between the Plaintiff and the Counterparties were void under the doctrine of unilateral mistake at common law. Fourth, it argued that the trades were voidable under the doctrine of unilateral mistake in equity. Fifth, it argued that the trades were void under the doctrine of mutual mistake at common law. Sixth, it argued that the Plaintiff had been unjustly enriched by the trades.

The Defendant also denied that it held any assets on trust for any users of the Platform. It alleged that there was no provision to this effect in the Agreement. Moreover, the Risk Disclosure Statement provided that users' assets were held by the Defendant itself and were not on deposit in a separate account with a trust bank.

Held, allowing the Plaintiff's claims:

(1) The Plaintiff's claim in breach of contract turned on the express provision in the Agreement that once an order was filled, the user would be notified via the Platform, and that such an action was “irreversible”. The claim would succeed unless any of the Defendant's defences succeeded: at [136] and [137].

(2) The Defendant held the Plaintiff's assets on trust. There was certainty of subject matter because cryptocurrencies met the requirements of a property right. There was certainty of objects because the intended beneficiaries were identifiable from the fact that each user of the Platform had a separate account with the Defendant. And there was certainty of intention to create a trust because the Defendant held the users' assets separately from its own trading assets, which was a clear indication that the Defendant claimed no title to the users' assets and acknowledged that it was holding them to the order of the user who could demand withdrawal at any time. The claim that the unilateral removal of BTC from the Plaintiff's account was in breach of trust would therefore succeed unless the Defendant could show that it was entitled to reverse the trades: at [142], [143], [145] and [146].

(3) The Defendant's first defence, that a term ought to be implied into the Agreement permitting the reversal of the trades, failed. Implying such a term would contradict an express clause of the Agreement that provided that the trades were “irreversible”. Moreover, implying such a term would not give business efficacy to the Agreement, because the purpose of the Agreement was to give clarity to the trading relationship between the Defendant and users of the Platform, and that clarity was advanced by having certainty that the filling of an order brought finality to the transaction and that trades could not be reversed: at [152] to [154].

(4) The Defendant's second defence, that it was contractually entitled to reverse the trades, was also not made out. This defence depended on the Risk Disclosure Statement that was uploaded to the Defendant's website on 22 March 2017 being read as introducing a new term into the Agreement expressly permitting the Defendant to cancel a transaction if it had taken place at an aberrant value. There was nothing in either document, however, which suggested that they would be read together. Moreover, although the Agreement plainly was intended to have legal effect, the same could not be said of the Risk Disclosure Statement. There was no reason to believe that the Risk Disclosure Statement contained amendments to the Agreement: at [176] and [177].

(5) The Defendant's third defence, that the trades were void under the doctrine of unilateral mistake at common law, were not made out. The trades were made by operation of algorithmic trading, and were not consciously entered by a human being. The law requires that there be a mistake by one party in entering the trade and knowledge by the other of that mistake. The relevant mistake had to therefore be a mistake by the Counterparty as to the terms on which the computer was programmed to form a trading contract...

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1 cases
  • Quoine Pte Ltd v B2C2 Ltd
    • Singapore
    • Court of Three Judges (Singapore)
    • 24 February 2020
    ...assimilation into the general concepts of property: at [144].] [Editorial note: The decision from which this appeal arose is reported at [2019] 4 SLR 17.] Held, dismissing the appeal with respect to the breach of contract claim and allowing the appeal with respect to the breach of trust cla......

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