Zhou Weidong v Liew Kai Lung: Misrepresentation, Breach of Fiduciary Duty, and Constructive Trust Dispute
In Zhou Weidong v Liew Kai Lung, the High Court of Singapore heard a case involving claims of misrepresentation, breach of fiduciary duty, and constructive trust. Zhou Weidong, the plaintiff, sued Liew Kai Lung, Realm Capital Limited, System Impact Pte Ltd, Mah Mei Sin, and Gobindram s/o M Harjani, the defendants, for losses arising from investment agreements. The court found Liew liable to Zhou for $6,530,000, and Mah liable for $247,689.04 and jointly and severally liable with SIPL for $1 million. The claims against Gobind were dismissed, as was Mah and SIPL's counterclaim.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Zhou Weidong sues Liew Kai Lung for misrepresentation and breach of fiduciary duty related to investment agreements. The court found Liew liable for $6,530,000.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Zhou Weidong | Plaintiff | Individual | Judgment for Plaintiff, Partial Judgment for Plaintiff | Won, Partial | Eugene Quah Siew Ping, Wong Teck Ming |
| Liew Kai Lung Karl | Defendant | Individual | Judgment Against Defendant | Lost | |
| Realm Capital Limited | Defendant | Corporation | Judgment Against Defendant | Lost | |
| System Impact Pte Ltd | Defendant | Corporation | Partial Judgment Against Defendant | Partial | |
| Mah Mei Sin | Defendant | Individual | Partial Judgment Against Defendant | Partial | |
| Gobindram s/o M Harjani | Defendant | Individual | Claim Dismissed | Dismissed | Lim Kim Hong |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Audrey Lim | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Eugene Quah Siew Ping | RHTLaw Taylor Wessing LLP |
| Wong Teck Ming | RHTLaw Taylor Wessing LLP |
| Lim Kim Hong | Messrs Kim & Co |
4. Facts
- Zhou invested in four agreements with RCL, managed by Liew, but did not receive the agreed returns of $6,530,000.
- Liew represented that the investments would be used for loan placements in China.
- Zhou transferred funds to SIPL and Mah, allegedly for remittance to relevant parties for the investments.
- Liew admitted that Zhou had entered into the Four Agreements with RCL and he had to transfer $6m in total to RCL pursuant to these agreements.
- Mah and SIPL claimed that the monies transferred by Zhou and Liew to SIPL and her accounts were subsequently remitted pursuant to Chen Jie’s instructions.
- The court found that Liew made misrepresentations to Zhou regarding the investments.
- The court found that Mah received US$199,975 from Zhou but could not explain what she did with it.
5. Formal Citations
- Zhou Weidong v Liew Kai Lung and others, Suit No 165 of 2014, [2017] SGHC 326
6. Timeline
| Date | Event |
|---|---|
| Zhou entered into the GT Agreement with RCL to invest $1m. | |
| Zhou entered into the Lending Business Investment Agreement with RCL to invest RMB5.2604m. | |
| Zhou transferred $2m to SIPL to invest in a Bidding Deposit Investment. | |
| Zhou transferred $2m to SIPL for an investment. | |
| Zhou entered into the 1ST2 Agreement with RCL to invest $2m. | |
| Zhou entered into the 2ST2 Agreement with RCL to invest $2m. | |
| Suit filed in 2014 | |
| Trial began | |
| Judgment reserved |
7. Legal Issues
- Misrepresentation
- Outcome: The court found that Liew made misrepresentations to Zhou, inducing him to enter into the Four Agreements.
- Category: Substantive
- Related Cases:
- [2001] 2 SLR(R) 435
- [2016] 5 SLR 335
- Breach of Fiduciary Duty
- Outcome: The court found that Liew and RCL owed and breached fiduciary duties to Zhou by mismanaging his investment monies.
- Category: Substantive
- Related Cases:
- [2017] 1 SLR 654
- Unjust Enrichment
- Outcome: The court found Mah liable for unjust enrichment in respect of US$199,975 and Mah and SIPL jointly and severally liable for $1m.
- Category: Substantive
- Related Cases:
- [2013] 3 SLR 801
- Constructive Trust
- Outcome: The court declined to impose a remedial constructive trust.
- Category: Substantive
- Conspiracy by Unlawful Means
- Outcome: The court found that the elements of conspiracy were not made out.
- Category: Substantive
- Related Cases:
- [2014] 1 SLR 860
8. Remedies Sought
- Repayment of $6,530,000
- Repayment of $5,247,689.04
- Constructive Trust
- Resulting Trust
9. Cause of Actions
- Misrepresentation
- Breach of Fiduciary Duty
- Constructive Trust
- Resulting Trust
- Unjust Enrichment
- Dishonest Assistance
- Knowing Receipt
- Conspiracy by Unlawful Means
10. Practice Areas
- Commercial Litigation
- Investment Disputes
11. Industries
- Finance
- Investment
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| PT Jaya Sumpiles Indonesia and another v Kristle Trading Ltd and another appeal | Court of Appeal | Yes | [2009] 3 SLR(R) 689 | Singapore | Cited for the principle that a guarantor's liability is secondary to that of the principal debtor. |
| Panatron Pte Ltd and another v Lee Cheow Lee and another | Court of Appeal | Yes | [2001] 2 SLR(R) 435 | Singapore | Cited for the elements of the tort of deceit. |
| ACTAtek, Inc and another v Tembusu Growth Fund Ltd | High Court | Yes | [2016] 5 SLR 335 | Singapore | Cited for reiterating the elements of the tort of deceit. |
| Tan Yok Koon v Tan Choo Suan and another and other appeals | Court of Appeal | Yes | [2017] 1 SLR 654 | Singapore | Cited for observations on fiduciary law. |
| The “Chem Orchid” | High Court | Yes | [2015] 2 SLR 1020 | Singapore | Cited for the conceptual difference between being liable to make restitution under a constructive trust and being liable to account as a constructive trustee. |
| Chua Kwee Sin v Venerable Sek Meow Di (Tang Kheng Tiong, third party) | High Court | Yes | [2013] SGHC 265 | Singapore | Cited for the principle that a defendant who receives assets as an agent and passes them to his principal may be able to escape liability in unjust enrichment. |
| Management Corporation Strata Title Plan No 473 v De Beers Jewellery Pte Ltd | Court of Appeal | Yes | [2002] 1 SLR(R) 418 | Singapore | Cited for the requirements of the defence of change of position. |
| Cavenagh Investment Pte Ltd v Kaushik Rajiv | Court of Appeal | Yes | [2013] 2 SLR 543 | Singapore | Cited for the requirement of a causative link between the receipt of the benefit and the change of position. |
| Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd and another and another suit | High Court | Yes | [2009] 4 SLR(R) 788 | Singapore | Cited for the requirement of a causative link between the receipt of the benefit and the change of position. |
| George Raymond Zage III and another v Ho Chi Kwong and another | Court of Appeal | Yes | [2010] 2 SLR 589 | Singapore | Cited for the meaning of lack of good faith in the context of the defence of change in position. |
| Barlow Clowes International Ltd (in liquidation) and others v Eurotrust International Ltd and others | Court of Appeal | Yes | [2006] 1 All ER 333 | England and Wales | Cited for the test for lack of good faith in the context of the defence of change in position. |
| M+W Singapore Pte Ltd v Leow Tet Sin and another | Court of Appeal | Yes | [2015] 2 SLR 271 | Singapore | Cited for the two-stage test for the Barlow Clowes test. |
| The “Dolphina” | Court of Appeal | Yes | [2012] 1 SLR 992 | Singapore | Cited for the attribution doctrines for fixing a company with the requisite intention or state of mind. |
| Wee Chiaw Sek Anna v Ng Li-Ann Genevieve (sole executrix of the estate of Ng Hock Seng, deceased) and another | Court of Appeal | Yes | [2013] 3 SLR 801 | Singapore | Cited for the elements of a claim for unjust enrichment. |
| Guy Neale and others v Nine Squares Pty Ltd | High Court | Yes | [2013] SGHC 249 | Singapore | Cited for the distinction between remedial and institutional constructive trusts. |
| Ching Mun Fong (executrix of the estate of Tan Geok Tee, deceased) v Liu Cho Chit | Court of Appeal | Yes | [2001] 1 SLR(R) 856 | Singapore | Cited for the proposition that the payee's conscience must have been affected, while the monies in question still remain with him for an RCT to arise. |
| Tjong Very Sumito and others v Chan Sing En and others | Court of Appeal | Yes | [2012] 3 SLR 953 | Singapore | Cited for the principle that if Zhou wanted to obtain a proprietary restitutionary remedy, it had to establish some proprietary link to the money claimed via rules of following and tracing. |
| The State-Owned Company Yugoimport SDPR (also known as Jugoimport-SDPR) v Westacre Investments Inc and other appeals | Court of Appeal | Yes | [2016] 5 SLR 372 | Singapore | Cited for the principle that this would involve establishing the flow of the trust assets from where it was at the outset to where it is said to be at the end. |
| EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and another | Court of Appeal | Yes | [2014] 1 SLR 860 | Singapore | Cited for the elements of a claim on conspiracy by unlawful means. |
| Attorney-General v Aljunied-Hougang-Punggol East Town Council | High Court | Yes | [2015] 4 SLR 474 | Singapore | Cited for the requirements of a resulting Quistclose trust. |
| Alwie Handoyo v Tjong Very Sumito and another and another appeal | Court of Appeal | Yes | [2013] 4 SLR 308 | Singapore | Cited for the principle of lifting the corporate veil to find a company's controller personally liable for an unjust enrichment claim. |
| Jones v Churcher | High Court of Justice | Yes | [2009] EWHC 722 (QB) | England and Wales | Cited for the rule that the agent must not have notice of the plaintiff’s claim at the time he transfers the received assets to his principal. |
| Sitt Tatt Bhd v Goh Tai Hock | Court of Appeal | Yes | [2009] 2 SLR(R) 44 | Singapore | Cited for the principle that a knowing recipient may be liable where he receives trust property or property in respect of which fiduciary duties exist, knowing it to be such, and he then either misappropriates it or otherwise deals with it in a manner which is inconsistent with the trust and/or the applicable fiduciary duties. |
| Cristian Priwisata Yacob and another v Wibowo Boediono and another and another suit | High Court | Yes | [2017] SGHC 8 | Singapore | Cited for the ground of failure of consideration or basis in unjust enrichment claims. |
| Nagase Singapore Pte Ltd v Ching Kai Huat and others | Court of Appeal | Yes | [2008] 1 SLR(R) 80 | Singapore | Cited for the possibility of a conspiracy founded on a combination/agreement between Mah and SIPL. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Civil Law Act (Cap 43, 1999 Rev Ed) s 6(b) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Investment Agreements
- Loan Placements
- Bridging Loans
- Fund Manager
- Guarantees
- Ministerial Receipt
- Change of Position
- Dishonest Assistance
- Knowing Receipt
- Quistclose Trust
- Tort of Deceit
15.2 Keywords
- investment
- misrepresentation
- breach of fiduciary duty
- constructive trust
- unjust enrichment
- Singapore
- contract
- fraud
16. Subjects
- Contract Law
- Trust Law
- Unjust Enrichment
- Misrepresentation
- Financial Investments
17. Areas of Law
- Contract Law
- Misrepresentation
- Fraud
- Restitution
- Unjust Enrichment
- Trusts
- Constructive Trusts
- Remedial Constructive Trusts
- Quistclose Trusts
- Accessory Liability