EFT Holdings v Marinteknik: Conspiracy by Unlawful Means, Mental Element, Pleading & Proof of Foreign Law
The Singapore Court of Appeal heard an appeal by EFT Holdings, Inc and another against Marinteknik Shipbuilders (S) Pte Ltd and another, regarding an alleged conspiracy by unlawful means to artificially inflate EIMC’s paid-up capital. The appellants claimed the respondents created false documents, leading them to invest in EIMC. The High Court dismissed the suit, citing failure to plead and prove Taiwan law and insufficient evidence of conspiracy. The Court of Appeal dismissed the appeal, finding no agreement to defraud the appellants and disapproving of the respondents' conduct, awarding only 75% of costs to the respondents.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Written Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal addresses conspiracy by unlawful means, mental element, and pleading/proof of foreign law in tort claims.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| EFT Holdings, Inc | Appellant | Corporation | Appeal Dismissed | Lost | |
| Marinteknik Shipbuilders (S) Pte Ltd | Respondent | Corporation | Appeal Dismissed | Won | |
| Priscilla Lim | Respondent | Individual | Appeal Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | Yes |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | No |
| Judith Prakash | Judge | No |
4. Counsels
4. Facts
- Marinteknik built two catamarans, Hull 189 and Hull 190, intending to sell them.
- EIMC expressed interest in purchasing the Hulls.
- Mr. Lu and Marinteknik entered into contracts for the sale and purchase of the Hulls.
- Mr. Lu wanted the contracts to be novated to EIMC.
- EIMC and Mr. Lu signed an Investment Agreement.
- Transfer Affidavits stated Mr. Lu and EIMC paid for the Hulls in full, which was untrue.
- EFT Holdings invested in EIMC based on presented documents.
5. Formal Citations
- EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and another, Civil Appeal No 3 of 2013 and Summons No 3558 of 2013, [2013] SGCA 64
- EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and others, , [2013] 1 SLR 1254
6. Timeline
| Date | Event |
|---|---|
| Priscilla Lim became a director of Marinteknik Shipbuilders (S) Pte Ltd | |
| Marinteknik commenced building two catamarans, Hull 189 and Hull 190 | |
| Marinteknik and Mr. Lu entered into two contracts for the sale and purchase of the Hulls | |
| Purchase price for each hull increased to US$27.5m due to modification work | |
| EIMC and Mr. Lu signed the Investment Agreement in Taiwan | |
| Marinteknik issued a letter rescinding the 2005 Shipbuilding Contracts | |
| Marinteknik sent a letter to EIMC stating that the 2005 Shipbuilding Contracts had been “officially rescinded” | |
| Marinteknik, EIMC and Mr Lu signed two “affidavits” in relation to the 2005 Shipbuilding Contracts | |
| Marinteknik, EIMC and Mr Lu agreed to enter into two addenda also dated 24 April 2007 (“the Transfer Affidavits Addenda”) | |
| Mr Hsiao sent Ms Lim two letters, one from IBT and one from EIMC | |
| Ms Lim wrote to Mr Hsiao noting that EIMC had provided documentary evidence of its attempts to obtain financing | |
| Marinteknik signed a “Letter of Undertaking” | |
| Marinteknik sold the Hulls to a Hong Kong company, Giant Dragon Sea Transport Company Limited | |
| Mr Hsiao told Ms Lim that he wanted to purchase a secondhand catamaran for its ferry service | |
| Marinteknik and EIMC agreed to execute two documents titled “Memorandum of Understanding” dated 30 April 2008 (“April MOUs”) for Hull 189A and Hull 190A | |
| Marinteknik, EIMC and Mr Lu executed two addenda also dated 30 April 2008 (“April MOUs Addenda”) | |
| Mr Hsiao told Ms Lim that “the funds are ready” | |
| Ms Lim wrote to EIMC stating that it would be rescinding the contracts for the building of Hull 189A and Hull 190A | |
| Mr Jack Jie Qin visited Taiwan | |
| Mr Qin met Mr Chiao for the first time | |
| Mr Qin and Ms Phoebe Liu met Mr Chiao and Mr Hsiao at EIMC’s office in Taiwan | |
| The 1st Appellant entered into a subscription agreement with EIMC | |
| EIMC paid Ezone €1.6m | |
| EIMC paid Ezone €12.4m | |
| Ezone entered into a Memorandum of Agreement with Eurolineas to purchase the Nixe 2 for €12.95m | |
| The Nixe 2 was delivered to EIMC | |
| The 1st Appellant transferred a further sum of another US$19.93m to the 2nd Appellant | |
| The 1st Appellant took over the management of EIMC | |
| The cross-strait ferry services started | |
| The appellants filed Originating Summons No 1359 of 2009 for pre-action discovery against the respondents | |
| The appellants commenced the Suit claiming damages for unlawful means conspiracy, dishonest assistance and knowing receipt | |
| Ezone commenced arbitral proceedings against EIMC in London claiming the balance owed by EIMC for the Ocean Lala | |
| Judgment reserved | |
| Decision Date |
7. Legal Issues
- Conspiracy by Unlawful Means
- Outcome: The court found that the respondents were not party to a conspiracy to cheat the appellants into investing in EIMC.
- Category: Substantive
- Sub-Issues:
- Agreement to commit unlawful acts
- Intention to cause damage or injury
- Unlawful acts performed in furtherance of the agreement
- Loss suffered as a result of the conspiracy
- Related Cases:
- [2008] 1 AC 1
- [2008] 1 AC 1174
- Mental Element for Unlawful Means Conspiracy
- Outcome: The court held that the mental element for the tort of unlawful means conspiracy is actual intention or reckless indifference.
- Category: Substantive
- Sub-Issues:
- Actual intention to cause harm
- Reckless indifference to the consequences of actions
- Related Cases:
- [2008] 1 AC 1
- [2008] 1 AC 1174
- Pleading and Proof of Foreign Law
- Outcome: The court held that the claimant is not obliged to plead the applicability of foreign law, and the Judge erred in dismissing the Suit on the basis of the appellants’ failure to plead actionability under Taiwan law.
- Category: Procedural
- Sub-Issues:
- Double actionability rule
- Presumption of similarity of laws
- Onus of pleading and proving foreign law
- Related Cases:
- [2007] 1 SLR(R) 377
8. Remedies Sought
- Damages
- Refund of invested sum of US$19.193m
9. Cause of Actions
- Conspiracy by Unlawful Means
10. Practice Areas
- Commercial Litigation
11. Industries
- Shipping
- Shipbuilding
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Rickshaw Investments Ltd and another v Nicolai Baron von Uexkull | Court of Appeal | Yes | [2007] 1 SLR(R) 377 | Singapore | Cited for the double actionability rule in tort claims. |
| Red Sea Insurance Co Ltd v Bouygues SA | Privy Council | Yes | [1995] 1 AC 190 | United Kingdom | Cited for the flexible exception to the double actionability rule. |
| Wing Hak Man and another v Bio-Treat Technology Ltd and others | Court of Appeal | Yes | [2009] 1 SLR(R) 446 | Singapore | Cited for the 'substance of the tort' test to identify the place where the tort was committed. |
| Saxby v Fulton | King's Bench Division | Yes | [1909] 2 KB 208 | England and Wales | Cited as an example where the foreign law is a notorious fact. |
| Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal | Court of Appeal | Yes | [2008] 2 SLR(R) 491 | Singapore | Cited for the principle that foreign law is treated as a question of fact in Singapore. |
| Goh Chok Tong v Tang Liang Hong | High Court | Yes | [1997] 1 SLR(R) 811 | Singapore | Cited for the principle that a plaintiff is not required to plead actionability under a foreign law. |
| Parno v SC Marine Pte Ltd | High Court | Yes | [1999] 3 SLR(R) 377 | Singapore | Cited for the principle that a mandatory pleading of foreign law is required as a matter of law. |
| OMG Holdings Pte Ltd v Pos Ad Sdn Bhd | Court of Appeal | Yes | [2012] 4 SLR 201 | Singapore | Discussed in relation to the pleading of foreign law in passing off claims. |
| Alfred Dunhill Ltd v Sunoptic SA | High Court | Yes | [1979] FSR 337 | England and Wales | Discussed in relation to the pleading of foreign law in passing off claims. |
| OBG Ltd and another v Allan and others | House of Lords | Yes | [2008] 1 AC 1 | United Kingdom | Extensively discussed regarding the economic torts and the requirement of intention. |
| Revenue and Customs Commissioners v Total Network SL | House of Lords | Yes | [2008] 1 AC 1174 | United Kingdom | Extensively discussed regarding the tort of unlawful means conspiracy. |
| Lumley v Gye | Queen's Bench | Yes | [1843] EWHC QB J73 | England and Wales | Cited as the basis for the tort of inducement of breach of contract. |
| Lonrho plc v Fayed and others | House of Lords | Yes | [1992] 1 AC 448 | United Kingdom | Cited in relation to the tort of conspiracy. |
| Crofter Hand Woven Harris Tweed Company, Limited, and others v Veitch and Another | House of Lords | Yes | [1942] AC 435 | United Kingdom | Cited in relation to the tort of lawful means conspiracy. |
| The Mogul Steamship Company, Limited v McGregor, Gow, & Co, and Others | Queen's Bench Division | Yes | [1889] 23 QBD 598 | England and Wales | Cited in relation to the tort of lawful means conspiracy. |
| Lonrho Ltd and another v Shell Petroleum Co Ltd and another (No 2) | House of Lords | Yes | [1982] 1 AC 173 | United Kingdom | Cited in relation to the tort of conspiracy. |
| Panatron Pte Ltd v Lee Cheow Lee and Others | High Court | Yes | [2000] SGHC 209 | Singapore | Cited in relation to the tort of conspiracy by lawful means. |
| Quinn v Leathem | House of Lords | Yes | [1901] 1 AC 495 | United Kingdom | Cited in relation to interference with a contractual relationship. |
| GWK Ltd v Dunlop Rubber Co Ltd | Court of Appeal | Yes | (1926) 42 TLR 376 | England and Wales | Cited in relation to interference with a contractual relationship. |
| DC Thomson & Co Ld v Deakin | Court of Appeal | Yes | [1952] 1 Ch 646 | England and Wales | Cited in relation to interference with a contractual relationship. |
| Torquay Hotel Co Ltd v Cousins and Others | Court of Appeal | Yes | [1969] 2 Ch 106 | England and Wales | Cited in relation to interference with a contractual relationship. |
| Merkur Island Shipping Corporation v Laughton (The Hoegh Anapa) and others | House of Lords | Yes | [1983] 2 AC 570 | United Kingdom | Cited in relation to interference with a contractual relationship. |
| M’Alister (or Donoghue) (Pauper) v Stevenson | House of Lords | Yes | [1932] 1 AC 562 | United Kingdom | Cited in relation to a unified theory of liability for unintended physical harm. |
| Lonrho Ltd & Another v Shell Petroleum Co Ltd & Another | Court of Appeal | Yes | The Times 7 March 1981 Transcript No 51 of 1981 | England and Wales | Cited in relation to the tort of conspiracy. |
| Lonrho plc v Fayed | Court of Appeal | Yes | [1990] 2 QB 479 | England and Wales | Cited in relation to the tort of causing loss by unlawful means. |
| Douglas and others v Hello! Ltd and others (No 3) | Court of Appeal | Yes | [2006] 1 QB 125 | England and Wales | Cited in relation to the tort of causing loss by unlawful means and the element of intention. |
| Beckkett Pte Ltd v Deutsche Bank AG and another and another appeal | Court of Appeal | Yes | [2009] 3 SLR(R) 452 | Singapore | Cited in relation to the element of unlawfulness in unlawful means conspiracy. |
| OCM Opportunities Fund II, LP and Others v Burhan Uray (alias Wong Ming Kiong) and Others | High Court | Yes | [2004] SGHC 115 | Singapore | Cited in relation to the intention to injure a class of persons in unlawful means conspiracy. |
| Bullman and another v Berkeley Homes (Essex) Ltd and others | High Court | Yes | [2003] All ER (D) 132 (Apr) | England and Wales | Cited in relation to the intention to injure a class of persons in unlawful means conspiracy. |
| Dresna Pty Ltd v Misu Nominees Pty Ltd and others | Federal Court of Australia | Yes | [2004] FCAFC 169 | Australia | Cited in relation to the intention to injure a class of persons in unlawful means conspiracy. |
| Australian Wool Innovation Ltd v Ingrid Newkirk and others | Federal Court of Australia | Yes | [2005] FCA 209 | Australia | Cited in relation to the intention to injure a class of persons in unlawful means conspiracy. |
| Stanley and Ors v Layne Christensen Company and Ors | Court of Appeal of Western Australia | Yes | [2006] WASCA 56 | Australia | Cited in relation to the intention to injure a class of persons in unlawful means conspiracy. |
| British American Tobacco Australia Limited v Gordon & Ors (No 3) | Supreme Court of Victoria | Yes | [2009] VSC 619 | Australia | Cited in relation to the intention to injure a class of persons in unlawful means conspiracy. |
| Nagase Singapore Pte Ltd v Ching Kai Huat | Court of Appeal | Yes | [2008] 1 SLR(R) 80 | Singapore | Cited for the elements of a claim for conspiracy by unlawful means. |
| Tjong Very Sumito and others v Chan Sing En and others | High Court | Yes | [2012] SGHC 125 | Singapore | Cited for the elements of a claim for conspiracy by unlawful means. |
| Kuwait Oil Tanker Co SAK and another v Al Bader and others (No 3) | High Court | Yes | [2000] 2 All ER (Comm) 271 | England and Wales | Cited for the inference of a combination from the circumstances and acts of the alleged conspirators. |
| Asian Corporate Services (SEA) Pte Ltd v Eastwest Management Ltd (Singapore Branch) | High Court | Yes | [2006] 1 SLR(R) 901 | Singapore | Cited for the inference of a combination from the circumstances and acts of the alleged conspirators. |
| The “Dolphina” | High Court | Yes | [2012] 1 SLR 992 | Singapore | Cited for the inference of a combination from the circumstances and acts of the alleged conspirators. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Unlawful Means Conspiracy
- Double Actionability Rule
- Mental Element
- Pleading Foreign Law
- EIMC
- Marinteknik
- Hulls
- Investment Agreement
- Transfer Affidavits
- Subscription Agreement
- Loan Agreement
- Ocean Lala
15.2 Keywords
- conspiracy
- unlawful means
- foreign law
- mental element
- economic torts
- Singapore
- Taiwan
- investment
- fraud
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Conspiracy by Unlawful Means | 95 |
| Fraud and Deceit | 80 |
| Contract Law | 30 |
| Misrepresentation | 25 |
| Company Law | 15 |
| Commercial Law | 10 |
16. Subjects
- Torts
- Civil Procedure
- Contract Law
- Company Law