Visionhealthone v HD Holdings: Conspiracy, Fraudulent Misrepresentation & Joint Venture Dispute

Visionhealthone Corp Pte Ltd (VH1) appealed a decision against HD Holdings Pte Ltd (HDH), HPPL and Liu Chunlin (LCL) regarding a S$2.125m transfer intended for a joint venture in China. The Court of Appeal found that HPPL and LCL conspired to misappropriate the funds, breaching their obligations under the agreement. The court dismissed the cross-appeal, upholding the initial finding that the funds were intended for investment and not a currency exchange transaction. VH1 is entitled to claim damages jointly from HPPL and LCL.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal allowed in part; cross-appeal dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Written Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding S$2.125m transfer for a joint venture. Court found conspiracy by HD Holdings and LCL to misappropriate funds.

1.7 Decision Date

1 September 2013

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Visionhealthone Corp Pte Ltd	Appellant, Respondent	Corporation	Appeal allowed in part	Partial	Lim Dao Kai of Allen & Gledhill LLP Dinesh Dhillon of Allen & Gledhill LLP
HD Holdings Pte Ltd	Respondent, Appellant	Corporation	Appeal dismissed	Lost	Tan Chee Meng of WongPartnership LLP Josephine Choo of WongPartnership LLP Emily Su of WongPartnership LLP
Xing Rong Pte Ltd (formerly known as Huadi Projects Pte Ltd)	Respondent, Appellant	Corporation	Appeal dismissed	Lost	Tan Chee Meng of WongPartnership LLP Josephine Choo of WongPartnership LLP Emily Su of WongPartnership LLP
Liu Chunlin	Respondent, Appellant	Individual	Appeal dismissed	Lost	Tan Chee Meng of WongPartnership LLP Josephine Choo of WongPartnership LLP Emily Su of WongPartnership LLP
Vision Corporation Holdings Pte Ltd (in liquidation)	Respondent	Corporation	Judgment in favour	Neutral
Chan Wai Chuen	Respondent	Individual	Third-party claim dismissed	Dismissed
Chan Siang Khing alias Roy Chan	Respondent	Individual	Third-party claim dismissed	Dismissed

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	No
Woo Bih Li	Judge	No
Quentin Loh	Judge	Yes

4. Counsels

Counsel Name	Organization
Lim Dao Kai	Allen & Gledhill LLP
Dinesh Dhillon	Allen & Gledhill LLP
Tan Chee Meng	WongPartnership LLP
Josephine Choo	WongPartnership LLP
Emily Su	WongPartnership LLP

4. Facts

VH1 and HPPL entered into a Joint Venture to set up medical and healthcare centers in China.
VH1 was to be the sole cash contributor, providing up to RMB15 million.
Between November 2003 and January 2004, VH1 transferred S$2.125m to HPPL's account.
The Sum was gradually withdrawn from the HPPL Account between December 2003 and June 2004.
LCL authorized the withdrawal of S$2,085,236.42 from the HPPL Account.
The funds were disbursed to parties other than FHH, including LCL's relatives and Liu Shi.
Financial records of FHH did not reflect the receipt of the Sum.

5. Formal Citations

Visionhealthone Corp Pte Ltd v HD Holdings Pte Ltd and others and another appeal, Civil Appeals Nos 89 and 99 of 2012, [2013] SGCA 47

6. Timeline

Date	Event
2003-10-02	Email sent to LCL regarding VH1's decision to proceed with the Joint Venture cautiously.
2003-10-18	VH1 and HPPL entered into the Joint Venture by executing a co-operation agreement.
2003-11-05	VCH was incorporated.
2003-11-05	S$1.1m was transferred from VH1 to VCH.
2003-12-02	VCH board meeting held; RC appointed to coordinate transferring RMB11m to HPPL.
2003-12-05	LCY circulated the Transfer Agreement.
2003-12-24	S$1.1m was transferred from VCH to HPPL.
2003-12-24	S$400,000 was transferred by CWC directly to HPPL.
2004-01-06	S$630,000 was transferred from VH1 to VCH.
2004-01-10	S$625,000 was transferred from VCH to HPPL.
2004-02-05	Vision Corporation Shanghai Co was incorporated.
2004-03-26	HDH was incorporated in Singapore.
2004-04-01	FVH was incorporated in China.
2004-08-01	Shanghai Fudan Vision Medical and Health Care Centre was incorporated.
2005-02-16	HPPL transferred its 40% shareholding in VCH to HDH.
2008-10-24	VH1 served a statutory demand on VCH.
2008-12-12	VH1 applied successfully to wind up VCH.
2009-01-09	VCH was placed in liquidation.
2009-03-31	The Liquidator took out Originating Summons No 383 of 2009.
2009-04-14	HDH wrote to the Liquidator alleging mismanagement by CWC and RC.
2009-06-06	HPPL was struck off from the register of companies.
2009-08-04	VH1 commenced the Suit.
2009-10-15	Court order issued regarding damages to be paid to VCH.
2009-10-28	HPPL was restored to the register of companies.
2009-11-16	VH1 applied for third-party discovery against Bank of China.
2010-07-05	Court agreed that documents sought by VH1 were relevant and necessary for the disposal of the Suit.
2011-10-01	Trial before the Judge commenced.
2012-05-03	Trial before the Judge.
2012-07-24	Judgment was given in favor of all four defendants to the Suit.
2012-07-26	VH1 filed its Notice of Appeal for CA 89/2012.
2012-08-22	HDH, HPPL and LCL filed a cross-appeal in CA 99/2012.
2013-09-02	Judgment reserved.

7. Legal Issues

Conspiracy
- Outcome: The court found that HPPL and LCL engaged in conspiracy by unlawful means to cause loss of the Sum to VH1.
- Category: Substantive
- Related Cases:
  - [2008] 1 SLR(R) 80
  - [2006] 1 SLR(R) 901
  - [2012] 1 SLR 992
  - [1999] 3 SLR(R) 1167
Fraudulent Misrepresentation
- Outcome: The court found insufficient evidence to prove that LCL made fraudulent misrepresentations to induce VH1 to enter into the Joint Venture.
- Category: Substantive
- Related Cases:
  - [2001] 2 SLR(R) 435
Breach of Contract
- Outcome: The court found that the withdrawal and dissipation of the Sum from the HPPL Account constitutes a breach of HPPL’s obligations under the Agreement.
- Category: Substantive

8. Remedies Sought

Damages
Account of Profits

9. Cause of Actions

Conspiracy
Fraudulent Misrepresentation
Breach of Contract

10. Practice Areas

Commercial Litigation

11. Industries

Healthcare

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Xing Rong Pte Ltd (formerly known as Huadi Projects Pte Ltd) v Visionhealthone Corp Pte Ltd	Court of Appeal	Yes	[2010] 4 SLR 607	Singapore	Cited for the relevance and necessity of documents sought by VH1 for the disposal of the Suit.
Panatron Pte Ltd and another v Lee Cheow Lee and another	N/A	Yes	[2001] 2 SLR(R) 435	Singapore	Cited for the elements required to prove a claim in the tort of fraudulent misrepresentation.
Tang Yoke Kheng (trading as Niklex Supply Co) v Lek Benedict and others	N/A	Yes	[2005] 3 SLR(R) 263	Singapore	Cited for the burden of proof for fraud and/or dishonesty.
Nagase Singapore Pte Ltd v Ching Kai Huat and others	N/A	Yes	[2008] 1 SLR(R) 80	Singapore	Cited for the elements of unlawful and lawful means conspiracy.
Asian Corporate Services (SEA) Pte Ltd v Eastwest Management Ltd (Singapore Branch)	N/A	Yes	[2006] 1 SLR(R) 901	Singapore	Cited for the principle that proof of conspiracy will normally be inferred from other objective facts.
The “Dolphina”	N/A	Yes	[2012] 1 SLR 992	Singapore	Cited for the observation that the requirements of combination and unlawful act, although theoretically discrete, in practice often have to be considered together.
Chew Kong Huat and others v Ricwil (Singapore) Pte Ltd	N/A	Yes	[1999] 3 SLR(R) 1167	Singapore	Cited for the principle that a company can, together with its controlling director, be liable for the tort of unlawful act conspiracy.
QB Net Co Ltd v Earnson Management (S) Pte Ltd and others	N/A	Yes	[2007] 1 SLR(R) 1	Singapore	Cited for the principle that it is impossible for a party to have been privy to an agreement or to have taken concerted action in pursuit of such agreement before it came into existence.
VisionHealthOne Corp Pte Ltd v HD Holdings Pte Ltd and others (Chan Wai Chuen and another, third parties)	High Court	Yes	[2012] SGHC 150	Singapore	The decision from which this appeal arose.
Eastern Shipping Company, Limited v Quah Beng Kee	N/A	Yes	[1924] AC 177	N/A	Cited for the principle that there was no relationship in contract or otherwise between the CA 99 appellants on the one hand and CWC and RC, as the directors of VH1 at the material times, on the other hand that would give rise to an obligation for CWC and RC to indemnify the CA 99 appellants.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Joint Venture
Co-operation Agreement
Currency Exchange Transaction
Misappropriation
Liquidator
Transfer Agreement
Notices of Payment
Receipts

15.2 Keywords

Joint Venture
Singapore
Breach of Contract
Fraud
Conspiracy
Healthcare
Misappropriation

17. Areas of Law

Area Name	Relevance Score
Conspiracy by Unlawful Means	80
Commercial Disputes	80
Fraud and Deceit	75
Contract Law	65
Misappropriation of Funds	60
Company Law	50
Inducement of Breach of Contract	40

16. Subjects

Contract Dispute
Joint Venture Dispute
Fraud
Conspiracy