Wang Xiaopu v Goh Seng Heng: Misrepresentation & Breach of Contract in Share Purchase Agreements

In Wang Xiaopu v Goh Seng Heng, the High Court of Singapore addressed claims by Plaintiff Wang Xiaopu against Defendants Dr. Goh Seng Heng and Dr. Goh Ming Li Michelle for misrepresentation and breach of contract concerning share purchase agreements in Aesthetic Medical Partners Pte Ltd (AMP). Wang claimed Goh made fraudulent misrepresentations inducing her to enter into two MOUs for purchasing AMP shares, and alternatively, claimed breach of contract. The defendants counterclaimed for repudiatory breach. The court found Goh liable for fraudulent misrepresentation and ruled in favor of Wang, granting rescission of the agreements and ordering repayment of the purchase price.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Wang Xiaopu sued Goh Seng Heng for misrepresentation and breach of contract related to share purchase agreements in Aesthetic Medical Partners Pte Ltd, seeking rescission and damages.

1.7 Decision Date

4 December 2019

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Wang Xiaopu	Plaintiff, Defendant in Counterclaim	Individual	Judgment for Plaintiff	Won	Mahesh Rai s/o Vedprakash Rai of Drew & Napier LLC Dierdre Grace Morgan of Drew & Napier LLC Kevin Lee of Drew & Napier LLC Stephania Wong of Drew & Napier LLC Erroll Ian Joseph of Drew & Napier LLC Yim Wing Kuen Jimmy of Drew & Napier LLC
Goh Seng Heng	Defendant, Plaintiff in Counterclaim	Individual	Counterclaim Dismissed	Lost	Lee Sien Liang Joseph of LVM Law Chambers LLC Lok Vi Ming of LVM Law Chambers LLC Kelly Tseng Ai Lin of LVM Law Chambers LLC
Goh Ming Li Michelle	Defendant, Plaintiff in Counterclaim	Individual	Claim Dismissed	Lost	Lee Sien Liang Joseph of LVM Law Chambers LLC Lok Vi Ming of LVM Law Chambers LLC Kelly Tseng Ai Lin of LVM Law Chambers LLC

3. Judges

Judge Name	Title	Delivered Judgment
Woo Bih Li	Judge	Yes

4. Counsels

Counsel Name	Organization
Mahesh Rai s/o Vedprakash Rai	Drew & Napier LLC
Dierdre Grace Morgan	Drew & Napier LLC
Kevin Lee	Drew & Napier LLC
Stephania Wong	Drew & Napier LLC
Erroll Ian Joseph	Drew & Napier LLC
Yim Wing Kuen Jimmy	Drew & Napier LLC
Lee Sien Liang Joseph	LVM Law Chambers LLC
Lok Vi Ming	LVM Law Chambers LLC
Kelly Tseng Ai Lin	LVM Law Chambers LLC

4. Facts

Wang entered into MOUs with Goh to purchase shares in Aesthetic Medical Partners Pte Ltd (AMP).
Goh made representations about AMP's profitability and share value to induce Wang to invest.
Goh did not disclose prior agreements that would reduce his shareholdings in AMP.
Goh restructured his remuneration to inflate AMP's EBITDA figures.
Goh sold shares without Wang's permission, violating the terms of the MOUs.
Wang sought rescission of the agreements due to misrepresentation and breach of contract.

5. Formal Citations

Wang Xiaopu v Goh Seng Heng and another, Suit No 686 of 2015, [2019] SGHC 284

6. Timeline

Date	Event
2008-08-12	AMP incorporated by Goh
2010-01-01	AMH incorporated
2012-04-01	Lee Kin Yun employed by Aesthetic Medical Partners Holdings Pte Ltd
2012-05-29	Goh entered into a call option with Julian Leslie Reis
2013-07-01	Chan Yue Kuan employed by AMP
2013-09-06	Share purchase agreement between Goh and Star Titanic
2013-09-18	First tranche of share purchase agreement completed
2013-10-14	Wang and Sun visited AMP’s office, the Paragon clinic and the PPP clinics
2013-10-15	Yacht meeting between Wang, Sun and Goh
2013-10-17	1st MOU between Wang and Goh
2013-10-21	1st MOU (as amended) signed
2013-10-24	Moneys due under the 1st MOU (as amended) were paid to Goh
2013-10-30	Share transfer for the 20,000 shares in AMP was effected
2013-11-04	Moneys due under the 1st MOU (as amended) were paid to Goh
2013-12-20	Goh sold 527 shares to Carolyn Wong
2014-08-01	Lin forwarded email from Lee stating AMP’s EBITDA for the financial year was S$11,867,000
2014-08-15	Wang and Sun met Lin in Singapore
2014-09-08	Meeting held in Guangzhou
2014-09-15	Reis proposed selling 56,049 shares in AMP held by the angel investors to Goh
2014-09-25	2nd MOU signed
2014-11-18	10,000 new shares issued at the nominal price of S$1
2014-11-25	Goh sold 32,049 shares to Liberty Sky
2014-11-26	S$9,900,000 paid
2014-12-11	Goh sold 32,049 shares in AMP to Liberty Sky
2015-03-10	Wang took the position that she did not have to proceed with the purchase of the third tranche of 4,000 shares
2015-04-12	Goh accepted the repudiation of the 2nd MOU by email
2015-05-18	Wang sought to rescind the 1st MOU (as amended)
2015-05-25	Goh rescinded the 1st MOU (as amended)
2015-06-30	Michelle resigned from AMP
2015-07-06	Legal proceedings commenced
2015-07-14	700 new shares issued to three employees of AMP
2016-02-02	Goh resigned from AMP
2018-10-30	Trial began
2019-09-09	Judgment reserved
2019-12-05	Judgment

7. Legal Issues

Misrepresentation
- Outcome: The court found that Goh made fraudulent misrepresentations that induced Wang to enter into the 1st and 2nd MOUs.
- Category: Substantive
- Sub-Issues:
  - Fraudulent misrepresentation
  - Inducement
  - Reliance
Breach of Contract
- Outcome: The court found that Goh breached the 1st MOU (as amended) by manipulating AMP’s EBITDA and selling shares without Wang’s consent.
- Category: Substantive
- Sub-Issues:
  - Breach of profit guarantee
  - Unauthorised sale of shares

8. Remedies Sought

Rescission of contract
Monetary damages
Account of profits
Tracing order

9. Cause of Actions

Misrepresentation
Breach of Contract

10. Practice Areas

Commercial Litigation

11. Industries

Healthcare
Aesthetics

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Panatron Pte Ltd and another v Lee Cheow Lee and another	Court of Appeal	Yes	[2001] 2 SLR(R) 435	Singapore	Cited for the requirements for a claim in fraudulent misrepresentation.
Ernest Ferdinand Perez De La Sala v Compañia De Navegación Palomar, SA and others and other appeals	Court of Appeal	Yes	[2018] 1 SLR 894	Singapore	Cited for the principle that a representation must be substantially false.
Tan Chin Seng v Raffles Town Club Pte Ltd	Unknown	Yes	[2003] 3 SLR(R) 307	Singapore	Cited for the principle that a person who states an intention as to the future implicitly represents that he in fact has that intention at the time the statement is made.
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 principle that mere silence alone will not suffice to found a claim in misrepresentation.
Broadley Construction Pte Ltd v Alacran Design Pte Ltd	Court of Appeal	Yes	[2018] 2 SLR 110	Singapore	Cited for the principle that silence can amount to a representation where there is a duty to speak or disclose certain facts.
Browne v Dunn	Unknown	Yes	(1893) 6 R 67	United Kingdom	Cited for the rule that a party should not be permitted to advance a case that the witness has not had an opportunity to rebut.
Sudha Natrajan v The Bank of East Asia Ltd	Court of Appeal	Yes	[2017] 1 SLR 141	Singapore	Cited for the ambit of the rule in Browne v Dunn.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited for the principles to imply a term into the contract.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd	Court of Appeal	Yes	[2008] 3 SLR(R) 1029	Singapore	Cited for the contextual approach to contractual interpretation.
Xia Zhengyan v Geng Changqing	Unknown	Yes	[2015] 3 SLR 732	Singapore	Cited for the principle that it is an open question whether draft agreements are admissible for the purposes of contractual interpretation.
Lonrho plc v Fayed (No 2)	Unknown	Yes	[1992] 1 WLR 1	England and Wales	Cited for the proposition that if she were entitled to rescind the agreements for fraudulent misrepresentation, she would be entitled to claim a tracing order.
El Ajou v Dollar Land Holdings Plc	Unknown	Yes	[1993] 3 All ER 717	England and Wales	Cited for the proposition that if she were entitled to rescind the agreements for fraudulent misrepresentation, she would be entitled to claim a tracing order.
Shalson v Russo	Unknown	Yes	[2005] Ch 281	England and Wales	Cited for the proposition that if she were entitled to rescind the agreements for fraudulent misrepresentation, she would be entitled to claim a tracing order.
Alati v Kruger	High Court of Australia	Yes	(1955) 94 CLR 216	Australia	Cited for the principle that disaffirming a voidable transaction confers an equitable interest in the assets transferred if the contract were procured by fraud.
Caltong (Australia) Pty Ltd (formerly known as Tong Tien See Holding (Australia) Pty Ltd) and another v Tong Tien See Construction Pte Ltd (in liquidation) and another appeal	Court of Appeal	Yes	[2002] 2 SLR(R) 94	Singapore	Cited for the principle that it was not necessary that the traceable proceeds must first be identified before a tracing order may be made as that was the very object of a tracing order.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Misrepresentation Act (Cap 390, 1994 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Misrepresentation
Breach of contract
Rescission
EBITDA
Share purchase agreement
Memorandum of understanding
Profit guarantee
Repudiatory breach
Fraudulent misrepresentation

15.2 Keywords

Misrepresentation
Breach of Contract
Share Purchase
Aesthetic Medical Partners
Rescission
Singapore High Court

17. Areas of Law

Area Name	Relevance Score
Misrepresentation	95
Contract Law	80
Breach of Contract	70
Rescission	60
Damages	30

16. Subjects

Contract Law
Misrepresentation
Shareholder Agreements
Commercial Litigation