Larpin, Christian Alfred and another v Kaikhushru Shiavax Nargolwala and another

JudgeRoger Giles IJ
Judgment Date21 February 2022
Neutral Citation[2022] SGHC(I) 4
CourtInternational Commercial Court (Singapore)
Docket NumberSuit No 3 of 2020
Published date24 February 2022
Hearing Date28 September 2021,01 October 2021,05 November 2021,27 September 2021,30 September 2021,29 September 2021
Plaintiff CounselChristopher Anand Daniel, Harjean Kaur, Keith Valentine Lee Jia Jin (Advocatus Law LLP)
Defendant CounselRamesh Kumar s/o Ramasamy, Natalie Ng and Edmond Lim Tian Zhong (Allen & Gledhill LLP)
Subject MatterContract,Misrepresentation,Action for rescission,Fraudulent,Damages
Citation[2022] SGHC(I) 4
Roger Giles IJ: Overview

The plaintiffs claim rescission of agreements for the purchase of shares giving rights to a villa in Thailand, return of the purchase price, and damages to be assessed, on the ground of misrepresentations material to the decision to purchase the shares.

The Andora Resort in Phuket (“the Resort”) was a leisure resort developed by Mr Allan Zeman comprising luxury villas, hotel suites, a leisure complex and other facilities. A villa could be acquired for personal use, or as an investment let out through the Resort by a letting agent.

Villa 29 (“the Villa”), built in 2007, was acquired by the defendants, Mr Kaikhushru Nargolwala and Mrs Aparna Nargolwala, in that year. They were and are Singapore residents, and for reasons of Thai property law concerning ownership of land by foreign nationals the acquisition was through the ownership of all the shares of Querencia Ltd (“Querencia”), a company incorporated in the British Virgin Islands (“the BVI”). Querencia held a lease of the land on which the Villa stood, ownership of the building on the land, and a construction permit and house registration, those matters together giving occupation rights to the Villa.

The Nargolwalas used the Villa for their own purposes until late 2014, when they moved to a second villa they had purchased in an associated Andara development. The Villa was made available for rental, and was also available for sale – in legal terms sale, purchase and ownership all being referable to the shares in Querencia.

On occasions the Villa was rented by Mr Solomon Lew, an Australian resident. In September 2017 Mr Lew decided that he wanted to purchase the Villa. As will be considered in more detail below, negotiations towards a purchase took place with the Nargolwalas through Mr Daniel Meury, the General Manager of the Resort.

In late October 2017 the first plaintiff, Mr Christian Larpin, became aware that the Villa was available for sale. Mr Larpin, a Hong Kong resident, was interested in acquiring a villa or villas in the Resort as an investment. Again as will be considered in more detail below, negotiations towards a purchase took place with the Nargolwalas, initially through Mr Martin Phillips, a real estate agent in Phuket, and then directly.

The Larpin negotiations were successful. Mr Larpin purchased the Villa (by the purchase of the shares in Querencia) through his Hong Kong incorporated company, the second plaintiff Quo Vadis Investments Ltd (“Quo Vadis”), for US$7,900,000. On 9 November 2017 a Reservation Agreement was executed between the Nargolwalas and Quo Vadis and a reservation deposit of US$790,000 was paid. On 14 November 2017 a Share Purchase Agreement was executed between the same parties. On 15 November 2017 the balance purchase price of US$7,110,000 was paid, and the Share Purchase Agreement was completed by transfer of the Querencia shares on 16 November 2017.

As will be told in the more detailed consideration, however, the culmination of the sale to Mr Larpin was not without incident. Late on 14 November 2017 the Nargolwalas became aware of a claim by Mr Lew in relation to the Villa – I deliberately speak in general terms at this point, as the detail later considered is important in the parties’ contentions in these proceedings. Again in general terms, on 15 November 2017 they told Mr Larpin of the claim and that they believed it was unsustainable, and offered the opportunity to delay or abort the transaction. Mr Larpin said he would proceed. Much more will be said of these events.

But Mr Lew followed up on his claim, now contending that he had a binding agreement with the Nargolwalas to purchase the Querencia shares. In late November 2017 he brought proceedings against Quo Vadis and Querencia in the BVI, obtaining a Stop Notice effectively freezing any dealing by Querencia with its shareholder’s rights. In early 2018 he brought proceedings in the Singapore High Court against the Nargolwalas, Quo Vadis, Mr Larpin and Querencia (“the Lew proceedings”), claiming that a binding oral contract of sale had been reached between him and Mr Meury, as agent for the Nargolwalas, on 11 October 2017. He claimed that in entering into the Share Purchase Agreement and completing the transaction the Nargolwalas acted in breach of that contract, and consequently in breach of fiduciary duties owed to him and in breach of trust in transferring the shares to Quo Vadis; that Mr Larpin and hence Quo Vadis had knowledge of the contract such that they were liable for inducing the breach; and that Querencia was liable for dishonestly assisting the Nargolwalas in their breach of fiduciary duties and breach of trust. In further proceedings brought in the BVI in June 2018, he obtained injunctive relief against Quo Vadis and Querencia similar to the Stop Notice, pending the final determination of the Lew proceedings in Singapore.

The Lew proceedings were transferred to the Singapore International Commercial Court. In Solomon Lew v Kaikhushru Shiavax Nargolwala and 4 others [2020] 3 SLR 61, delivered on 5 February 2020, Simon Thorley IJ dismissed the action against all the defendants. So far as presently relevant, his Honour held that no binding oral contract had been entered into on 11 October 2017 because what had been said and done was at best an agreement subject to contract, and also because Mr Meury had not had authority to enter into a contract on behalf of the Nargolwalas.

Mr Lew appealed. In Solomon Lew v Kaikhushru Shiavax Nargolwala and 4 others [2021] 2 SLR 1, delivered on 10 February 2021, the Court of Appeal dismissed the appeal. Again so far as presently relevant, while differing from the trial judge on the subject to contract point their Honours held that, although Mr Meury had led Mr Lew to understand that a contract had been made, he had not had authority from the Nargolwalas to contract with Mr Lew.

Mr Larpin and Quo Vadis joined with the other defendants to the Lew proceedings in resisting Mr Lew’s claims, including denying that a contract binding on the Nargolwalas had been made. However, as plaintiffs in the present proceedings they seek to undo the purchase of the Villa by Quo Vadis. They say that in the course of the Lew proceedings they became aware of matters that had occurred in the negotiations through Mr Meury towards a purchase by Mr Lew, matters which they say the Nargolwalas “actively concealed” from them thereby making material representations. The representations, they say, were false, and were made fraudulently; at least in their pleading, they say that if they were not made fraudulently, reliance is placed on s 2 of the Misrepresentation Act (Cap 390, 1994 Rev Ed) (“the MA”). Had they known of the matters, the plaintiffs say, Quo Vadis would not have entered into the Reservation Agreement, or entered into the Share Purchase Agreement, or completed the purchase.

The present proceedings were commenced in the High Court in October 2019, shortly before the first instance hearing in the Lew proceedings. They were subsequently transferred to the Singapore International Commercial Court. The plaintiffs claim rescission of the Reservation Agreement, of the Share Purchase Agreement, and of “the completion of the transfer of the Querencia Shares”; return of the purchase price of US$7,900,000; and damages being the solicitor and client costs incurred in the proceedings in the BVI and in Singapore in excess of the party and party costs awarded in those proceedings.

The Nargolwalas deny actionable misrepresentation, in particular that any non-disclosure was made fraudulently. They deny reliance on any representation. They say that in any event Quo Vadis affirmed the Reservation Agreement and the Share Purchase Agreement by Mr Larpin choosing to proceed on 15 November 2017; that rescission should otherwise be refused; and that as a matter of law there cannot be recovery of the costs in excess of party and party costs.

After a hiatus waiting for the decision of the appeal in the Lew proceedings, evidence in the proceedings was taken on 27, 28, 29 and 30 September 2021. Evidence in the plaintiffs’ case was given by Mr Larpin and Mrs Dao Te Lagger, a co-director of Quo Vadis, who were both cross-examined, and affidavits of Mr Meury and Mr Martin Phillips were admitted although they were not available to give evidence. Evidence in the defendants’ case was given by Mr Nargolwala and Mrs Nargolwala, who were both cross-examined. There was an agreed bundle of documents of over 9,000 pages, which included almost all if not the entire records of the proceedings in the BVI and of the Lew proceedings, at both levels, in Singapore. Closing submissions were heard on 5 November 2021, with supplementary written submissions received on 19 November 2021.

For the reasons which follow, the proceedings should be dismissed.

The legal framework

It was common ground that Singapore law is the governing law in the proceedings.

In Panatron Pte Ltd and another v Lee Cheow Lee and another [2001] 2 SLR(R) 435 (“Panatron”), speaking of the tort of fraudulent misrepresentation, the Court of Appeal said at [14]:

The essentials of this tort have been set out by Lord Maugham in Bradford Building Society v Borders [1941] 2 All ER 205. Basically there are the following essential elements. First, there must be a representation of fact made by words or conduct. Second, the representation must be made with the intention that it should be acted upon by the plaintiff, or by a class of persons which includes the plaintiff. Third, it must be proved that the plaintiff has acted upon the false statement. Fourth, it must be proved that the plaintiff suffered damage by so doing. Fifth, the representation must be made with knowledge that it is false; it must be wilfully false, or at least made in the absence of any genuine belief that it is true.

Implicit in this is that the...

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5 cases
  • Larpin, Christian Alfred v Kaikhushru Shiavax Nargolwala
    • Singapore
    • High Court (Singapore)
    • 21 February 2022
    ...Christian Alfred and another and Kaikhushru Shiavax Nargolwala and another [2022] SGHC(I) 4 Roger Giles IJ Suit No 3 of 2020 Singapore International Commercial Court Contract — Misrepresentation — Action for rescission — Buyer of luxury villa claiming that negotiations between seller of lux......
  • Larpin, Christian Alfred and another v Kaikhushru Shiavax Nargolwala and another
    • Singapore
    • International Commercial Court (Singapore)
    • 25 April 2022
    ...on the substantive issues in these proceedings, Larpin, Christian Alfred and another v Kaikhushru Shiavax Nargolwala and another [2022] SGHC(I) 4 (the “Main Judgment”), was given on 21 February 2022. This judgment assumes familiarity with the Main Judgment. The proceedings were dismissed, a......
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    • High Court (Singapore)
    • 25 April 2022
    ...Kiri Industries Ltd v Senda International Capital Ltd [2022] 3 SLR 174 (refd) Larpin, Christian Alfred v Kaikhushru Shiavax Nargolwala [2022] SGHC(I) 4 (refd) Lim Oon Kuin v Ocean Tankers (Pte) Ltd [2022] 1 SLR 434 (refd) Man B&W Diesel S E Asia Pte Ltd v PT Bumi International Tankers [2004......
  • Chiam Taw Song v Prime Motor & Leasing Pte Ltd
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    ...render any statements made untrue. Similarly in Larkin, Christian Alfred and another v Kaikhushru Shiavax Nargowala and another [2022] SGHC (I) 4, misrepresentation by silence entails active concealment of a particular state of affairs with dishonest intent such as wilful suppression of mat......
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