Tonny Permana v One Tree Capital Management Pte Ltd

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: Chan Seng Onn J
• Judgment Date: 16 February 2021
• Docket Number: Suit No 751 of 2017

[2021] SGHC 37

General Division of the High Court

Chan Seng Onn J

Suit No 751 of 2017

Tonny Permana

and

One Tree Capital Management Pte Ltd and another

Lee Hwee Khiam Anthony and Huineng Clement Chen (Bih Li & Lee LLP) for the plaintiff;

Siraj Omar SC, Allister Brendan Tan, Teng Po Yew, Joelle Tan (Drew & Napier LLC) for the defendants.

Case(s) referred to

Alphire Group Pte Ltd v Law Chau Loon [2020] SGCA 50 (folld)

Ang Sin Hock v Khoo Eng Lim [2010] 3 SLR 179 (refd)

Axa Sun Life Services Plc v Campbell Martin Ltd [2011] 2 Lloyd's Rep 1 (refd)

Blasco, Martinez Gemma v Ee Meng Yen Angela [2021] 3 SLR 1360 (refd)

Boardman v Phipps [1967] 2 AC 46 (folld)

Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 (refd)

Bristol and West Building Society v Mothew [1998] Ch 1 (folld)

Broadley Construction Pte Ltd v Alacran Design Pte Ltd [2018] 2 SLR 110 (folld)

Chew Kong Huat v Ricwil (Singapore) Pte Ltd [1999] 3 SLR(R) 1167; [2000] 1 SLR 385 (refd)

Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, Singapore Branch v Motorola Electronics Pte Ltd [2011] 2 SLR 63 (folld)

Deutsche Bank AG v Chang Tse Wen [2013] 1 SLR 1310 (refd)

Fan Ren Ray v Toh Fong Peng [2020] SGCA 117 (folld)

Fong Maun Yee v Yoong Weng Ho Robert [1997] 1 SLR(R) 751; [1997] 2 SLR 297 (refd)

Forsikringsaktieselskapet Vesta v Butcher [1989] AC 852; [1988] 3 WLR 565 (refd)

Goh Yng Yng Karen v Goh Yong Chiang Kelvin [2021] 3 SLR 896 (refd)

JSI Shipping (S) Pte Ltd v Teofoongwonglcloong [2007] 4 SLR(R) 460; [2007] 4 SLR 460 (refd)

Maynard v West Midlands Regional Health Authority [1984] 1 WLR 634 (refd)

Nagase Singapore Pte Ltd v Ching Kai Huat [2007] 3 SLR(R) 265; [2007] 3 SLR 265 (refd)

Ng Eng Ghee v Mamata Kapildev Dave [2009] 3 SLR(R) 109; [2009] 3 SLR 109 (refd)

Ng Giap Hon v Westcomb Securities Pte Ltd [2009] 3 SLR(R) 518; [2009] 3 SLR 518 (folld)

Nottingham University v Fishel [2000] IRLR 471 (refd)

OCBC Securities Pte Ltd v Yeo Siew Huan [1998] 1 SLR(R) 481; [1998] 2 SLR 965 (folld)

Singapore Rifle Association v Singapore Shooting Association [2019] SGHC 13 (folld)

Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100; [2007] 4 SLR 100 (refd)

Tan & Au LLP v Goh Teh Lee [2012] 4 SLR 1 (refd)

Tan Chin Seng v Raffles Town Club Pte Ltd [2003] 3 SLR(R) 307; [2003] 3 SLR 307 (folld)

Tang Man Sit, Personal Representatives of v Capacious Investments Ltd [1996] AC 514 (refd)

Zuraimi bin Mohamed Dahlan v Zulkarnine B Hafiz [2020] SGHC 219 (refd)

Legislation referred to

Misrepresentation Act (Cap 390, 1994 Rev Ed)

Unfair Contract Terms Act (Cap 396, 1994 Rev Ed)

Agency — Construction of agent's authority —Written authority —Scope of written authority —Written authority in agency contract —Authority to dispense advice —Whether agent had authority to contract on behalf of principal

Agency — Duties of agent —Breach —Breach of duty of reasonable care, skill and diligence —Whether agent breached duty of reasonable care, skill and diligence —Whether non-disclosure was breach of duty of reasonable care, skill and diligence —Whether change in nature of principal's investment was breach of duty of reasonable care, skill and diligence

Agency — Duties of agent —When arising —Care, skill and diligence —Agent's duty of reasonable care, skill and diligence —Scope of duty —Whether agent owed duty of reasonable care, skill and diligence —Whether duty was contractual or tortious in nature —Whether contractual and tortious duties could coexist

Companies — Fraudulently inducing investment —Change in nature of investment —Whether change in nature of investment was authorised —Whether change in nature of investment was fraudulent —Whether principal was aware of change in nature of investment —Whether principal gave informed consent to change in nature of investment

Contract — Contractual terms —Express terms —Entire agreement —Entire agreement clause —Whether entire agreement clause excluded implied terms —Whether entire agreement clause excluded terms implied in law —Whether entire agreement clause had to expressly exclude specific terms

Contract — Contractual terms —Implied terms —Terms intrinsic to contract —Terms extrinsic to contract —Whether term intrinsic to contract —Whether term necessary for business efficacy —Terms implied in law —Whether term to be implied in law —Whether term incorporating duty of reasonable care, skill and diligence to be implied in law

Contract — Misrepresentation Act —Whether representations on future events were actionable —Whether representations were made fraudulently —Misrepresentation Act (Cap 390, 1994 Rev Ed)

Equity — Dishonest assistance —Primary liability —Secondary liability —Dishonest assistance as secondary liability —Whether dishonest assistance could be established absent primary liability

Equity — Fiduciary relationships —Duties —Breach of duty —Whether agent breached fiduciary duties to principal —Whether agent breached duty of loyalty —Whether agent breached duty to act in good faith in principal's best interests

Equity — Fiduciary relationships —When arising —Agent's fiduciary duties —Scope of agent's fiduciary duties —Fiduciary duties in dispensing advice —Fiduciary duties in conducting principal's affairs —Duty of loyalty —Duty to act in good faith in principal's best interests —Whether agent owed fiduciary duties

Tort — Misrepresentation —Fraud and deceit —Representations on future events —Representations implying faciendum —Whether representations on future events were actionable —Whether representations were made fraudulently

Tort — Negligence — Breach of duty —Duty of reasonable care, skill and diligence —Whether agent breached duty of reasonable care, skill and diligence

Tort — Negligence — Duty of care —When arising —Agent's duty of care —Agent's duty of reasonable care, skill and diligence —Whether agent owed duty of reasonable care, skill and diligence

Facts

The plaintiff, Tonny Permana, was an Indonesian businessman and investor. The first defendant, One Tree Capital Management Pte Ltd, was a Singapore incorporated company, and was in the business of investment fund management. Part of its business involved facilitating deals between investors and prospective investees in need of funding, ie, acting as a middleman. The second defendant, Gerald Yeo, was the director and sole shareholder of the first defendant. The first defendant acted, at all material times, through the second defendant.

The dispute between the parties had its genesis in a project undertaken by Midas Landmark Sdn Bhd (later renamed CHN Commodity Trade Centre Sdn Bhd – for ease of reference, “Midas”). Midas sought to purchase and renovate an existing shopping mall in Kuala Lumpur, Malaysia (“the Mall”) – this endeavour was referred to as the “Chinamall Project”. The defendants were approached by one Mr Tan Chong Whatt and his son, one Mr Tan Chor Keng (collectively, “the Tans”), who informed the defendants of their desire to procure investments in the Chinamall Project.

Thus, the defendants raised to the plaintiff the prospect of investing in the Chinamall Project. The plaintiff was informed, amongst other things, that the Chinamall Project was a “fast turnaround” project with a “comfortable collateral buffer position”. The second defendant also sent the plaintiff and his personal assistant, Ms Denie Tiolani (“Ms Tiolani”), documentation on the Chinamall Project, including a project term sheet (the “Term Sheet”), an investment agreement (the “Investment Agreement”), and several schedules to the Investment Agreement.

Following these, the plaintiff agreed to make an investment of about US$1.6m (the “Investment Sum”) in the Chinamall Project. Midas accordingly issued the plaintiff a convertible loan note for the sum of US$1.6m (the “Convertible Loan Note”). The documents executed by the plaintiff were largely identical to the draft documentation that had been sent to the plaintiff prior to his making of the investment. The material documents (the “Investment Documents”) were:

• (a) the Investment Agreement;

• (b) the form of guarantee (the “Guarantee”);

• (c) the form of share charge (the “Share Charge”);

• (d) the Convertible Loan Note issued by Midas;

• (e) the terms and conditions applicable to the Convertible Loan Note (the “CLN T&Cs”); and

• (f) the “Form of Agency and Security Trust Deed” as set out at “Appendix D” of the CLN T&Cs (the “ASTD”).

In addition to the plaintiff, there were 12 other investors who made similar investments of various amounts in the Chinamall Project. The total value of all the investments was S$9.5m and US$4.94m.

In the months that followed, several changes were made to the plaintiff's investment.

• (a) First, on 11 February 2014, there was a proposal that the plaintiff's investment be converted to a shareholder's loan (the “Proposed Conversion”). This, however, was never implemented.

• (b) Next, on 26 July 2014 and unbeknownst to the plaintiff, the first defendant entered into a memorandum of agreement with Mr Tan Chong Whatt and one Mr Wang Yingde for the purchase of shares in Midas (the “26 July 2014 MOA”). Following this, the first defendant issued a letter dated 18 August 2014 (the “18 August 2014 Letter”) to Midas, Mr Tan Chong Whatt and Mr Wang Jianguo stating, inter alia, that the defendants had terminated the Investment Agreement, and had fully discharged the Share Charge and the Guarantee (collectively, the “Security Documents”).

• (c) On 3 August 2014, the second defendant sent an e-mail to Ms Tiolani, informing her that the structure of the plaintiff's investment would be altered. The Investment Sum would be converted into a shareholder's loan provided by the first defendant to Midas (the “Conversion”). The plaintiff would then be investing in the Chinamall Project through the first defendant by way of a trust deed (the “Trust Deed”), wherein the first defendant would hold its shareholder loan amounting to the...