United Overseas Bank Ltd v Lippo Marina Collection Pte Ltd

• Jurisdiction: Singapore
• Judge: Aedit Abdullah J
• Judgment Date: 08 December 2021
• Docket Number: Suit No 1250 of 2014
• Court: High Court (Singapore)

United Overseas Bank Ltd

and

Lippo Marina Collection Pte Ltd and others

[2021] SGHC 283

Aedit Abdullah J

Suit No 1250 of 2014

General Division of the High Court

Tort — Conspiracy — Property developer of condominium development awarding significant rebates over $1m for each of units purchased by 38 purchasers referred to it by two property agents — Property developer not reflecting significant rebates on respective options to purchase for the 38 units — Financing bank disbursing housing loans exceeding legal limit and actual purchase price of each unit — Whether property developer combined with property agents to commit unlawful acts — Whether property developer intended to injure financing bank by unlawful acts performed in furtherance of combination — Whether financing bank suffered harm

Tort — Misrepresentation — Fraud and deceit — Property agents making various alleged misrepresentations to financing bank — Whether these misrepresentations were actionable

Tort — Misrepresentation — Fraud and deceit — Property developer allegedly misrepresenting having received payments of certain fees for each of respective units to financing bank — Whether financing bank relied on these misrepresentations

Held, dismissing the claims:

(1) The elements of the tort of unlawful means conspiracy were as followed: (a) a combination of two or more persons to do certain acts; (b) such persons had the intention to cause damage or injury to the plaintiff by those acts; (c) the acts were unlawful; (d) the acts were performed in furtherance of the agreement between such persons; and (e) loss was suffered by the plaintiff as a result of the conspiracy: at [32].

(2) In relation to the first element of combination, the crux of the inquiry was whether the alleged conspirators entered into an agreement with a common objective of effecting certain acts. For there to be any agreement, it had to, at the very least, be shown that the alleged conspirators shared a common understanding of the material facts underlying this agreement. In this connection, the defendant need not know what the other co-conspirator(s) had agreed to do, but had to, at the very least, know that those acts were to be carried out before it could sensibly be said to be part of a combination to commit the same. On its own, however, knowledge of the material facts would not render the defendant a co-conspirator. In particular, a defendant who knew that unlawful acts were being committed by others, and yet did nothing to stop those acts, was not necessarily a co-conspirator. The surrounding circumstances, as well as the defendant's conduct and state of knowledge, had to still be capable of supporting an inference that the defendant had combined with the other co-conspirators to pursue a particular course of conduct involving unlawful acts. Direct evidence of such a combination was not necessary. It was also unnecessary to prove that there was an express agreement, or that all the alleged conspirators joined at the same time: at [37], to [39] and [100].

(3) Given the way in which the Furniture Rebate Plan was structured, the first defendant had to have known that the plaintiff would over-lend. The first defendant also knew that the Purchasers would not declare the Furniture Rebates to the plaintiff. However, the fact that the first defendant knew of these and went ahead with the Furniture Rebate Plan did not ipso facto mean that the first defendant had also agreed to suppress the Furniture Rebates to facilitate the Purchasers' deceit vis-à-vis the plaintiff. Another plausible explanation for such conduct was that the first defendant was simply not concerned with the circumstances under which excess Housing Loans were being procured by the Purchasers and was more concerned with selling the Units. Going along with the Furniture Rebate Plan to facilitate the sales of its Units, despite knowing that unlawful activities were going on downstream at the loan procurement stage, was sharp practice. However, this could not amount to an agreement on its part to conceal the Furniture Rebates from the plaintiff: at [46] to [48].

(4) Even if the first defendant had agreed to conceal the Furniture Rebates from the plaintiff, the first defendant's suppression of the Furniture Rebates did not involve an unlawful act since it was not under a duty to disclose the same. Such an agreement, if it existed, could only be actionable if it was linked to a larger web of agreements to employ unlawful means, but the plaintiff did not establish this link: at [49].

(5) It was not enough that there was a combination or agreement, and that some unlawful means were used to cause harm. There had to be a link between the combination and the unlawful means to clothe all the participants with liability. In this regard, there was insufficient evidence to establish that there was any combination involving the first defendant to cause harm to the plaintiff through any acts of deceit. As there was no evidence that the first defendant knew of the Identity Misrepresentations and Financial Standing Fraud, it could not be said that the first defendant was part of a combination to commit these two acts of deceit. Even if the first defendant had agreed to suppress the existence of the Furniture Rebates on its part and committed various acts to this end, these were still insufficient to prove the existence of a combination to employ the Purchase Price Misrepresentations or the Payment Misrepresentations: at [98] to [101].

(6) As regards the second element of having the intention to injure, injury to the plaintiff had to have been intended as a means to an end or as an end in itself, but such intention need not be the predominant intention. If the conspirators intended the damaging consequences of their actions, they had to necessarily know that such an act carried such consequences. However, knowledge that a particular conduct would harm the plaintiff, would not by itself amount to an intention to injure. It was not sufficient that harm to the plaintiff would be a likely, or probable or even inevitable consequence of the defendant's conduct: at [78] and [79].

(7) Although the first defendant knew that the Purchasers would be obtaining Housing Loans in circumvention of the 80% LTV Limit and in excess of the Actual Purchase Price, it could not be inferred from such knowledge, along with other pieces of evidence, that the first defendant intended to injure the plaintiff for reasons similar to those given in relation to the absence of a combination involving the first defendant: at [82].

(8) When faced with a claim in unlawful means conspiracy, a defendant could not evade liability simply because its primary motive was to further or protect its own interests, where it had been shown that it intentionally injured the plaintiff. This was consistent with the principle that there was no need for the plaintiff to prove that the conspirators' dominant intention was to cause injury to it; a mere intention to injure was sufficient. However, in the present case, it could not be inferred that the first defendant even had a mere intention to injure, as it was plausible that the first defendant was acting solely in its own interest without paying heed to how the plaintiff would be impacted: at [84].

(9) The tort of unlawful means conspiracy did not extend to situations where the unlawful means resided in the unlawful acts committed by the plaintiff-victim as a consequence of the conspiracy. Hence, the plaintiff's breach of the MAS Notice 632 and contravention of s 55 of the Banking Act could not constitute the unlawful means of the conspiracy: at [30] and [87].

(10) The tort of unlawful means conspiracy did not extend to situations where the unlawful means resided in an unlawful purpose pursued by the defendants. The tort was one of unlawful means, not unlawful consequences. As such, even though the defendants' actions might expose the plaintiff to possible regulatory action or prosecution, these were not actionable under the conspiracy to cause harm by unlawful means: at [30] and [96].

(11) Harm in respect of the conspiracy claim could not be established on the basis that the Housing Loans were made on something other than what was the “true price”. There was no true price for real property. Further, the evidence showed that the Stated Purchase Price expressed on the Housing Loan Application Forms were within what would have been accepted as reasonable valuations. There was also no evidence of the consequence of a breach of MAS Notice 632: at [31] and [102].

(12) The elements of the tort of deceit were as follows: (a) a representation of fact made by words or conduct; (b) the representation was made with the knowledge that it was false or wilfully false, or at least made in the absence of any genuine belief that it was true; (c) the representation was made with the intention that it should be acted upon by the plaintiff, or by a class of persons which included the plaintiff; (d) the plaintiff acted upon the false statement; and (e) the plaintiff suffered damage in so doing. There was no need for the false representation to be made by the defendant to the plaintiff directly. As long as the defendant intended the misrepresentation to be communicated to the plaintiff, through a third party, the representation so communicated would suffice: at [105] and [109].

(13) The Purchase Price Misrepresentations, Identity Misrepresentations and Financial Standing Fraud by the second and third defendants grounded their liability in deceit. However, the first defendant was not liable for the alleged Payment Misrepresentations as the plaintiff did not rely on the TSMP Letters which contained the Payment Misrepresentations. Instead, the plaintiff relied on forms issued by PKWA to the plaintiff, which confirmed that the Balance Purchase Price had been paid: at [108], [110], [111], [115] and [117].

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