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

• Jurisdiction: Singapore
• Judge: Roger Giles IJ
• Judgment Date: 24 November 2020
• Neutral Citation: [2020] SGHC(I) 24
• Plaintiff Counsel: Christopher Anand Daniel and Harjean Kaur (Advocatus Law LLP)
• Docket Number: Suit No 3 of 2020 (Summons No 59 of 2020)
• Date: 24 November 2020
• Hearing Date: 06 November 2020
• Subject Matter: Civil Procedure,Costs,Security
• Year: 2020
• Defendant Counsel: Ramesh Kumar s/o Ramasamy, Alyssa Tan Shu-Ning and Amanda Lim Min Li (Allen & Gledhill LLP)
• Citation: [2020] SGHC(I) 24
• Court: International Commercial Court (Singapore)
• Published date: 27 November 2020

Roger Giles IJ: Introduction

Through their holding of the shares in Querencia Ltd (“Querencia”), a British Virgin Islands (“BVI”) company, the Defendants held rights to Villa 29 in the Andara Resort in Phuket, Thailand (“the Villa”): sufficiently for present purposes, a form of ownership. In late 2017, the Defendants sold the Villa to the First Plaintiff (“Mr Larpin”), by the sale and transfer of the shares in Querencia to his beneficially owned company, the Second Plaintiff, Quo Vadis Investments Limited (“Quo Vadis”). In these proceedings, the Plaintiffs claim orders for rescission of the sale, return of the purchase price of US$7.9m, and damages.

This is the Defendants’ application for an order that the Plaintiffs provide security for their costs, up to and including closing submissions post-trial, in the amount of S$350,000, together with the usual ancillary orders. The basis for the application is the “foreign plaintiff” ground in O 23 r 1(1)(a) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (the “Rules”), that the plaintiff is ordinarily resident out of the jurisdiction.

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

These Proceedings

For the submissions in the application, a brief summary of the claim and the defence to it is desirable. The pleadings are quite extensive, and the summary necessarily does not capture their detail.

Mr Larpin attended a viewing of the Villa on 25 or 26 October 2017, conducted by the Defendants’ selling agent Mr Martin Phillips. He expressed interest, and on 8 November 2017 a Reservation Agreement between Quo Vadis and the Defendants was executed. On 14 November 2017 a Share Purchase Agreement between the same parties was executed. Completion of the Share Purchase Agreement took place on 16 November 2017.

The Plaintiffs allege that by executing the Agreements, and orally by a telephone conversation between Mr Larpin and the First Defendant (“Mr Nargolwala”) on 15 November 2017, the Defendants made a number of representations concerning the sale of the Villa via the Querencia shares. The representations include that all information which would materially affect the sale of the Villa had been disclosed. The Plaintiffs allege that the representations were false, and that they were made fraudulently or recklessly or, if not, in circumstances attracting relief under the Misrepresentation Act (Cap 390, 1994 Rev Ed). They allege that they relied on the representations in entering into the Agreements and completing the Share Purchase Agreement; that they would not have entered into the Agreements or purchased the Villa had they known the undisclosed information; and that they were prevented by the representations and by concealment of the undisclosed information from electing not to do so.

At the heart of the alleged falsity and nondisclosure are dealings in October 2017 between a Mr Solomon Lew and Mr Daniel Meury of the Andara Resort, in so far as they were communicated by Mr Meury to the Defendants. The dealings culminated in an offer by Mr Lew to purchase the Villa for US$5.25m and, on the Plaintiffs’ case, a possible agreement for sale at that price. The Plaintiffs allege that on 14 November 2017 the Defendants were made aware that Mr Lew claimed to have an agreement for the sale of the Villa and threatened legal action to enforce it; but, they say, in the telephone conversation on 15 November 2017 Mr Nargolwala said that the claim was unsustainable. In broad terms, on the Plaintiffs’ case the undisclosed information is the dealings between Mr Lew and Mr Meury as known to the Defendants and the details of Mr Lew’s claim and threat; and the possible adverse claim to the Villa and the threat of legal action by Mr Lew, and the failure to disclose the information to the Plaintiffs falsified the representations made in the Agreements and orally.

For present purposes, it is sufficient that the Defendants deny making any false representations to the Plaintiffs, and in particular that their Defence includes that in the telephone conversation on 15 November 2017 and a subsequent email, Mr Nargolwala told Mr Larpin that although the Defendants considered Mr Lew’s claim unsustainable, the Plaintiffs could “abort and unwind the transaction” or wait to see what Mr Lew was going to do, rather than proceed to completion, but Mr Larpin said that he was not concerned and would go ahead and complete.

In the Plaintiffs’ Reply, it is said that the options given to Mr Larpin were illusory when the Plaintiffs were labouring under the misrepresentations and nondisclosure. In oral submissions, the Plaintiffs said that Mr Larpin would have been able to make a considered and better decision had all material facts been disclosed.

The Lew Proceedings

Mr Lew did bring legal action, although not until early 2019. He named as defendants the Defendants, the Plaintiffs and Querencia. He claimed that he had an oral agreement to purchase the Villa, made through Mr Meury (as the Defendants’ agent) on 11 October 2017; that the Defendants acted in breach of their duties thereby owed to him in transferring the Querencia shares to Quo Vadis; that the Plaintiffs had actual or constructive knowledge of the oral agreement, whereby Quo Vadis was liable in equity to transfer the shares to him and the Plaintiffs were liable for inducing the Defendants’ breach; and that Querencia was liable for dishonestly assisting the Defendants in their breach.

Mr Lew’s proceedings went to trial over ten days in late 2019 to early 2020. The judgment of Simon Thorley IJ was published on 5 February 2020: see Lew, Solomon v Kaikhushru Shiavax Nargolwala and others [2020] 3 SLR 61 (“Solomon Lew”). It...