Chen Yun Hian Christopher v BHNV Online Ltd and others

• Judge: Mavis Chionh Sze Chyi JC
• Judgment Date: 31 December 2020
• Neutral Citation: [2020] SGHC 284
• Citation: [2020] SGHC 284
• Court: High Court (Singapore)
• Published date: 07 January 2021
• Docket Number: Suit No 34 of 2017 (Summonses Nos 5512 and 5513 of 2019)
• Plaintiff Counsel: Raeza Khaled Salem Ibrahim, Kulvinder Kaur and Charlene Wee Swee Ting (Salem Ibrahim LLC)
• Defendant Counsel: Calvin Liang (Essex Court Chambers Duxton (Singapore Group Practice)), Yu Kexin (Yu Law) (instructed) and Eugene Jedidiah Low (Ark Law Corporation),Gregory Vijayendran SC, Tan Eu Shan Kevin and Andrew Tan Jian Ming (Rajah & Tann Singapore LLP)
• Subject Matter: Conflict of Laws,Choice of jurisdiction,Exclusive,Natural forum,Civil Procedure,Service,Out of jurisdiction,Writ of summons
• Hearing Date: 22 July 2020,26 June 2020,29 June 2020,16 June 2020,06 October 2020

Mavis Chionh Sze Chyi JC: Introduction

The plaintiff commenced Suit No 34 of 2017 (“Suit 34”) alleging that, inter alia, the defendants had conspired to defraud and injure him by unlawful means.¹ The nub of the plaintiff’s allegation was that the defendants had acted in concert to manipulate his trading activities, misappropriate his money, and knowingly mislead him into thinking that he was trading in binary options when no such trading was in fact taking place.² The defendants’ fraud purportedly induced the plaintiff to, inter alia, make various fund transfers totalling US$11.55m.³

The first, fifth and sixth defendants mounted various jurisdictional challenges in respect of the plaintiff’s claims. In Summons No 5512 of 2019 (“SUM 5512”), the sixth defendant sought, inter alia, (a) a declaration that this court had no jurisdiction over him in respect of the plaintiff’s action in Suit 34; (b) an order setting aside the writ as well as service thereof; and (c) a declaration that the writ had not been validly served. The first and fifth defendants sought substantially the same reliefs in Summons No 5513 of 2019 (“SUM 5513”).

On 22 July 2020, I granted the sixth defendant’s application in SUM 5512 as well as the first and fifth defendants’ application in SUM 5513, save for the declarations sought regarding the validity of service as it was unnecessary for me to make a finding on that issue. As the plaintiff has appealed against my decision in both SUM 5512 and SUM 5513, I now set out the grounds of my decision.

Facts The plaintiff’s introduction to the Opteck platform

The plaintiff is a Singaporean surgeon.⁴ The first defendant is a company incorporated in Belize; the fifth defendant, an Israeli citizen, is the founder and has been the sole registered shareholder of the first defendant since its incorporation.⁵ The sixth defendant is also an Israeli national and the ultimate shareholder of a Belizean company known as CST Financial Services (“CST”).⁶ The second to fourth defendants are purportedly employees of the first and/or fifth defendants, but they have not been served with the writ to date.⁷

The plaintiff alleged that sometime in August 2013, a “pop-up” advertisement for Opteck.com appeared on his computer while he was surfing the internet. At the material time, Opteck.com was owned by BNet Online Limited (“BNet Online”). BNet Online is registered in England and the first defendant is its sole shareholder. According to the fifth defendant, BNet Online’s role was to facilitate credit card payments on the Opteck trading platform.⁸ The plaintiff clicked on the advertisement and was redirected to the Opteck.com website, which contained information on binary options trading.⁹

The website promised high returns with initial investment from as little as US$5,000. Tempted by the prospect of high investment returns and purportedly unaware that Opteck.com was not a registered trading platform in Singapore, the plaintiff submitted an online application and elected to make an initial deposit of US$5,000. It should be noted that contrary to the plaintiff’s description of this US$5,000 deposit as “the lowest [possible] amount”,¹⁰ the fifth defendant’s evidence was that the minimum deposit was in fact US$200.¹¹

The signing of the Opteck Terms and Conditions (the “Contract”)

Following his online application, the plaintiff received an e-mail on 29 August 2013 from Support Team Opteck Account Management containing the Contract for his e-signature.¹²

The salient portions of the Contract included: multiple cautions about the risks that binary options trading entailed, eg, that transactions on the Opteck platform were “high-risk financial activities” and that “the potential for losses [was] extremely high”;¹³ a disclaimer to the effect that it was the client’s sole responsibility to independently establish the accuracy of any information provided by the company prior to making any investment decisions, that the client would be entirely liable for all transactions occurring in his account, and that the first defendant would never provide any form of financial advice to any of its clients;¹⁴ a disclaimer to the effect that the provision of services on the Opteck platform was “on an ‘as is’ basis, without warranty, liability or representation of any kind whatsoever by the company” and that “the [first defendant], its directors, employees and associates [could] in no way be held liable for any damages incurred … from the use, or inability to use the company’s software”;¹⁵ and a clause which the first and fifth defendants argued was an exclusive jurisdiction clause (clause 33).¹⁶ I address this clause in greater detail below at [42]–[60].

It was undisputed that the plaintiff e-signed the Contract. Upon receiving the requisite confirmation, he proceeded to deposit US$5,000 with Opteck¹⁷ and was informed by Opteck via e-mail on 25 September 2013 that his trading account had been created.¹⁸

The events leading to the telegraphic transfers

On or around 10 September 2013, the second defendant introduced himself to the plaintiff and allegedly held himself out to be a senior broker employed or engaged by the first and/or fifth defendants.¹⁹ The second defendant and the plaintiff kept in regular and close contact thereafter, with the former educating the latter on binary options trading and the Opteck platform.

The plaintiff and the first/fifth defendants provided significantly divergent accounts as to the plaintiff’s familiarity with investments and his risk appetite. The plaintiff “categorically state[d] that Opteck was [his] first exposure”²⁰ to binary options trading and endeavoured to portray himself as a babe in the woods about such matters:²¹

Despite my best efforts, I never grasped much. Had it not been for the inducement, encouragement, salesmanship, persuasion, the patter, enticement and the presented expertise from [the second defendant] and his colleagues, I would never have ever traded binary options. I was bewildered by all the charts they were referring to. They were so deft. Soon enough, I was convinced that they were experts who [could] trade for me with a minimal risk of loss.

The plaintiff claimed that the second defendant “purported to act as [his] investment mentor and investment advisor”. He even described his relationship with the second defendant as “very close and personal” and one in which the second defendant “exercised enormous influence” over him. At the second defendant’s encouragement, the plaintiff utilised the TeamViewer software, which allowed the second defendant to remotely access and operate the plaintiff’s personal computer.²²

Over the next few weeks, the plaintiff’s trust in the second defendant grew. The second defendant informed the plaintiff of live trading sessions that he had arranged between 15 and 17 October 2013. The plaintiff attended those sessions and was left awestruck at the second defendant’s abilities. In all, the plaintiff attended 21 training sessions with the second defendant and a handful with the third defendant; the plaintiff recorded the training sessions so that he could review them at his leisure.²³ These training sessions solidified the plaintiff’s confidence in the second defendant’s expertise, particularly since the second defendant appeared able to forecast market movements and make winning trades, and professed to be a “specialist” who acted for high net worth clients and whose advice was highly sought after.²⁴ The second defendant allegedly made various representations to convince the plaintiff to have US$30–US$40m, or a minimum of US$10m, in his Opteck account. The second defendant also purportedly persuaded the plaintiff that binary options trading on Opteck was not especially risky.²⁵ The plaintiff claimed that, over time, the second defendant stopped guiding him on binary options trading and instead traded directly on his (ie, the plaintiff’s) account. According to the plaintiff, he simply acquiesced to all of the second defendant’s trading decisions on his account as he trusted the second defendant immensely.²⁶

The first and fifth defendants, on the other hand, rejected the plaintiff’s attempts to portray himself as a naïve and guileless first-time investor. Instead, they argued that the plaintiff was a “well-heeled investor who was hooked on high-risk trading in binary options”.²⁷ They pointed to the plaintiff’s admission that his experience with trading dated all the way back to 2005,²⁸ as well as his choice to make an initial deposit on the Opteck platform that was 25 times the minimum amount, despite being new to Opteck (see [6] above). In addition, they contended that the plaintiff’s history of leveraging on his trades in stocks demonstrated his large risk appetite.²⁹

The first and fifth defendants also asserted that the plaintiff’s sizable and frequent trades on the Opteck platform showed that he was an almost compulsive trader undeterred by huge losses.³⁰ In an e-mail to the second defendant on 29 November 2013, the plaintiff stated that “[i]t was [his] intention to perform daily investments, Monday to Friday, [the second defendant’s] time permitting, to capitalise on this total sum exceeding $10 million dollars. The money should not be sitting idle”.³¹ As an example of the plaintiff’s willingness to take huge gambles, the first and fifth defendants cited the plaintiff’s investment of US$18m in the span of an hour on 17 December 2013, which resulted in a net loss of US$12.14m.³² That the plaintiff concurrently engaged in high-risk trades on other trading platforms while trading on the Opteck platform further indicated that he was anything but risk-averse.³³

The telegraphic transfers

On 30 September 2013 and allegedly under the fourth defendant’s encouragement, the plaintiff made a further deposit of US$45,000 by way of credit card transactions. The plaintiff was, however, startled...