Chee Jok Heng Stephanie v Chang Yue Shoon

CourtHigh Court (Singapore)
JudgeWoo Bih Li J
Judgment Date20 May 2010
Neutral Citation[2010] SGHC 153
Citation[2010] SGHC 153
Defendant CounselS H Almenoar (R Ramason & Almenoar)
Published date03 June 2010
Plaintiff CounselAndrew J Hanam (Andrew & Co)
Hearing Date29 April 2010,20 April 2010,19 April 2010
Docket NumberSuit No 827 of 2009
Date20 May 2010
Subject MatterMisrepresentation,Fraudulent,RESTITUTION,Money Had and Received,Duties,Trustees,TRUSTS,CONTRACT
Woo Bih Li J: Introduction

The plaintiff Chee Jok Heng Stephanie (“Dr Chee”) claims in this action the repayment of two sums of $45,000 and $682,000 respectively from the defendant Chang Yue Shoon (“Mr Chang”).

Dr Chee’s case

Dr Chee was introduced to Mr Chang sometime before March 2006 by his then business associate one Dr Mel Gill. According to Dr Chee, Mr Chang was described to her as a “lawyer specialising in criminal matters”.

In the second quarter of 2006, Dr Chee faced accusations of criminal conduct in connection with her role as a consultant with the charity Parkway Healthcare Foundation and its associated Senior Citizens' Health Care Centres.

In or about March 2006, Dr Chee contacted Mr Chang seeking legal advice concerning the accusations against her. She stated that at a meeting between them shortly after, Mr Chang represented to her that he was a criminal lawyer. Again, according to Dr Chee, he said he was a good friend and close collaborator with one Peter Low, a lawyer, and for a monthly fee of $15,000 he offered to provide her with legal advice “together with Peter Low”. Dr Chee agreed to this arrangement.

In March 2006, Mr Chang corresponded with Dr Chee in connection with her sole proprietorship, Wilcare Consulting Group (“Wilcare”). While providing his curriculum vitae to Dr Chee in this context, he said that he “read law with the University of London” without mentioning that he did not graduate from this course.

Dr Chee attested that in several interactions with her and her daughters between March 2006 and September 2009, Mr Chang had consistently held himself out as a lawyer doing professional legal work with Peter Low for Dr Chee. Her second and youngest daughters, Marie Bernadette Paul and Sharon Lourdes Paul respectively, also testified that he had held himself out as a lawyer. According to Dr Chee’s evidence he maintained this impression throughout the course of her criminal charges and eventual trial in late 2009.

In May, June and July 2006 respectively, Dr Chee made three payments of $15,000 (a total of $45,000) to Mr Chang. The first two were by personal cheques drawn on Dr Chee’s account and the third was by a cheque drawn on Wilcare’s account and described in an accompanying letter dated 13 July 2006 with Wilcare’s letterhead as “payment for your consultancy services rendered to [Wilcare]”. Dr Chee’s evidence was that these three payments were for Mr Chang’s legal services, with the third described otherwise on Mr Chang’s own instructions. Through Mr Chang, Dr Chee formally engaged Peter Low as counsel in August 2006.

In August 2006 Dr Chee, allegedly following Mr Chang’s instructions, closed Wilcare and continued its business in the same premises under Action Research Academy Pte Ltd (“ARA”) with herself as director and Mr Chang as sole shareholder. Her evidence was that Mr Chang had received payments and reimbursement for expenses from ARA without performing work of a substantial nature for the company.

In mid-2007, Dr Chee sold a property at 985 Bukit Timah Road #05-11, Maplewoods, Singapore 589627 (“the Maplewoods property”). After completion of the sale, she collected the net proceeds of $856,555.29 on 10 September 2007. According to Dr Chee, Mr Chang told her that she should not retain the proceeds in her bank account as they were liable to be seized by the Commercial Affairs Department (“CAD”) in connection with criminal investigations against her. Dr Chee’s evidence stated that Mr Chang then proposed to hold the proceeds on trust for her to be returned once her criminal case had been resolved. Dr Chee’s account of events concluded that after deducting expenses for herself and her family, she agreed to have Mr Chang hold $682,000 for her on trust as he suggested.

On 13 September 2007, Dr Chee gave a cheque for $682,000 to Mr Chang. Dr Chee stated that on Mr Chang’s suggestion, the cheque was photocopied and the following words were written by Dr Chee on the document containing the copy of the cheque, “Return of friendly loan – interest free.” Mr Chang allegedly explained that this was a simple way to explain the payment. Both parties signed below these words. Mr Chang allegedly kept the original of this document while Dr Chee kept a copy.

As mentioned above at [1], Dr Chee is now claiming restitution of the sum of $45,000 paid to Mr Chang from May to July 2006 and the sum of $682,000 paid to Mr Chang on 13 September 2007. Her claim is essentially founded on fraud. In the case of the $45,000, this seems more specifically to be a claim to rescind a contract for Mr Chang’s services that she was induced to enter by his fraudulent misrepresentation that he was a criminal lawyer. In the case of the $682,000, the claim seems to be for recovery of money paid to Mr Chang due to his fraudulent advice that the CAD might otherwise seize the money.

Mr Chang’s case

Mr Chang’s defence stated that he was never introduced to Dr Chee as any kind of lawyer, nor did he ever represent to Dr Chee that he was a lawyer. While he had previously undergone some legal education (though without obtaining a degree) and had some working experience as an articled clerk, he denied ever having told Dr Chee or her daughters either expressly or by implication that he was a lawyer or had any specialisation in criminal matters. His evidence was that Dr Chee formed her impression that he was knowledgeable in criminal law entirely of her own accord, possibly through overhearing his conversations with friends on matters of legal procedure. He conceded that he did inform Dr Chee in an email that he had “read law with the University of London”, but stated that the focus of that email was on his other business-related experience. While he agreed that he introduced Dr Chee to Peter Low, he stated that he only agreed to help Dr Chee with her legal matters to the extent of collating documents and other sundry tasks in exchange for a reduction of Peter Low’s legal fees as Dr Chee was in financial difficulties. He testified that he did this for Dr Chee “as a friend”.

Concerning the $45,000 paid to him from May to July 2006, Mr Chang stated that these were monthly fees paid to him in his role as a business consultant for Wilcare which he took up in May 2006 after receiving an invitation to do so by Dr Chee in April 2006. He explained that she had intended to have him develop the business in anticipation of her eventual departure from the Parkway Healthcare Foundation. In this light, he denied that he instructed Dr Chee to describe Wilcare’s payment of $15,000 to him in July 2006 as a consultancy fee, stating that the letter covering that payment should be taken at face value.

Mr Chang also denied that he had instructed Dr Chee to discontinue Wilcare, carry on business under ARA or transfer the shareholding of ARA to himself. He stated that all this was done in August 2006 on the initiative of Dr Chee, who wanted him to be the sole shareholder for ARA as a mere nominee. Mr Chang stated that he worked for ARA as a business consultant and in this role he received reimbursement for expenses and was entitled to monthly consultancy fees of $15,000 though these were not paid between August 2006 and August 2007. Instead he was paid by ARA on an ad hoc basis.

Mr Chang did not dispute that Dr Chee gave a cheque for $682,000 to him on 13 September 2007 which was part of the proceeds of sale from the Maplewoods property. However, he denied ever telling Dr Chee that the CAD might seize her proceeds of sale or that he ever instructed her to write “Return of friendly loan – interest free” on the photocopy of the cheque. Indeed, he claimed that at the time he signed the photocopy there were no such words thereon. He did not produce any original or copy of this document. His evidence was that after having been unpaid for some time he gave notice of his resignation from ARA. To persuade him not to leave the company, Dr Chee decided to have him hold the sum of $682,000, of which part would be used to settle his outstanding and future consultancy fees and part would be held on trust for her to be applied on her instructions. Mr Chang stated that between September 2007 and December 2008, the $682,000 was fully accounted for in the following ways:

(a) Moneys paid to Dr Chee in cash (i) 18 September 2007 $80,000
(ii) 28 September 2007 $212,000
(iii) 10 October 2007 $60,000
(b) Money paid into the account of ARA on Dr Chee’s instructions 18 September 2007 $80,000
(c) Money paid to a Malaysian company PI Energy Water Treatment 2007 Sdn Bhd on Dr Chee’s instructions $43,785
(d) Money paid to Mr Chang in settlement of outstanding consultancy fees due to him from August 2006 to August 2007 $90,000
(e) Balance $116,215

Mr Chang concluded his account of events by stating that in December 2008, he had met with Dr Chee and they agreed that the balance from the $682,000 (ie, $116,215) should be kept by Mr Chang in settlement of his outstanding consultancy fees from September 2007 to December 2008.

However, Mr Chang clarified in his testimony that there was an error in that the two entries for the $80,000 paid in (a)(i) and (b) referred to in [15] above were actually in respect of a single payment of $80,000 into ARA’s account.

The law on fraud

It is settled law that a contract can be rescinded if a contractor was induced to enter it by fraudulent misrepresentation: see, eg, Jurong Town Corp v Wishing Star Ltd [2005] 3 SLR(R) 283 and Newbigging v Adam (1887) 34 Ch D 582 at 592 per Bowen LJ. It is also established that where money is paid to a person wrongfully (as in a case of fraud or bribery) the sum can be recovered as money had and received: Sumitomo Bank Ltd v Thahir Kartika Ratna and others and another matter [1992] 3 SLR(R) 638.

Fraud is established...

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4 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2013, December 2013
    • 1 Diciembre 2013
    ...attempted to confine the reliance principle to cases dealing with property interests. Thus, in Chee Jok Heng Stephanie v Chang Yue Shoon[2010] 3 SLR 1131 at [42], Woo Bih Li J explained the principle as ‘a special exception in the case of property rights’. In ANC Holdings Ltd (above, paras ......
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    • Singapore
    • Singapore Academy of Law Annual Review No. 2012, December 2012
    • 1 Diciembre 2012
    ...[38], Top Ten Entertainment Pte Ltd v Lucky Red Investments Ltd[2004] 4 SLR(R) 559 at [34] and Chee Jok Heng Stephanie v Chang Yue Shoon[2010] 3 SLR 1131: see Antariksa Logistics at [145]), its application in Antariksa Logistics only served to illustrate the chief difficulty that the decisi......
  • Restitution
    • Singapore
    • Singapore Academy of Law Annual Review No. 2010, December 2010
    • 1 Diciembre 2010
    ...any benefit to offset its prima facie reliance expenditure. Misrepresentation 21.10 In Chee Jok Heng Stephanie v Chang Yue Shoon [2010] 3 SLR 1131 (‘Chee Jok Heng’) (Woo Bih Li J), the High Court found that the plaintiff had been deceived by the defendant into believing that the defendant w......
  • Equity and Trusts
    • Singapore
    • Singapore Academy of Law Annual Review No. 2010, December 2010
    • 1 Diciembre 2010
    ...14.3 The second case which explored the issue of trust and the defence of illegality is Chee Jok Heng Stephanie v Chang Yue Shoon [2010] 3 SLR 1131 (‘Chee Jok Heng Stephanie’). In this case, the plaintiff sold her property and handed part of the proceeds amounting to $682,000 to the defenda......

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