Liberty Sky Investments v Goh Seng Heng: Misrepresentation, Fraud, and Rescission
In Liberty Sky Investments Limited v Goh Seng Heng and Goh Ming Li Michelle, the High Court of Singapore addressed a claim by Liberty Sky Investments Limited ('LSI') against Goh Seng Heng ('Goh') and his daughter, Goh Ming Li Michelle ('Michelle'), for fraudulent misrepresentation. LSI alleged that Goh's misrepresentations induced them to enter into a Sale and Purchase Agreement ('SPA') to buy shares in Aesthetic Medical Partners Pte Ltd ('AMP'). LSI sought rescission of the SPA and the return of their money. The court found Goh liable for fraudulent misrepresentation but denied rescission due to the intervention of third-party rights. The court awarded LSI damages and dismissed Goh's counterclaim for wrongful rescission. The claim against Michelle was dismissed.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff, damages awarded in part; Defendant's counterclaim dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Liberty Sky Investments sued Goh Seng Heng for misrepresentation regarding a share purchase agreement. The court found fraudulent misrepresentation but denied rescission.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Goh Seng Heng | Defendant | Individual | Counterclaim Dismissed | Lost | |
| Liberty Sky Investments Limited | Plaintiff | Corporation | Claim allowed in part | Partial | |
| Goh Ming Li Michelle @ Wu Mingli | Defendant | Individual | Claim Dismissed | Dismissed |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Audrey Lim | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- LSI sued Goh and his daughter for misrepresentations made to LSI's representatives.
- The representations allegedly induced LSI to buy shares in AMP from Goh for $14,422,050.
- LSI rescinded the SPA and sought a declaration that the SPA had been validly avoided.
- Goh denied making the representations and claimed LSI wrongfully rescinded the SPA.
- Goh told Florence that there would be a trade sale of all AMP shares to an important person in Singapore.
- Goh stated that if the trade sale did not materialize, AMP intended to list through an IPO on the SGX.
- Goh required LSI’s financial support to buy out certain minority investors in AMP.
5. Formal Citations
- Liberty Sky Investments Ltd v Goh Seng Heng and another, Suit No 1311 of 2015, [2019] SGHC 39
6. Timeline
| Date | Event |
|---|---|
| AMP founded by Goh Seng Heng. | |
| Goh became Group Executive Chairman of AMP. | |
| AMH became a wholly-owned subsidiary of AMP. | |
| Florence and Andy were introduced to Goh and Michelle in Shanghai. | |
| AMP started working with advisors towards a liquidity event. | |
| Florence met Goh and Michelle for the second time at a training workshop. | |
| Florence arranged to attend training sessions in Singapore conducted by AMP. | |
| Draft Heads of Agreement between AMP and Thomson Medical prepared. | |
| Non-Disclosure Agreement signed by AMP and Thomson Medical. | |
| AMP received a list of priority questions from Thomson Medical. | |
| Nelson emailed Goh and Lee enclosing a draft term sheet from Thomson Medical. | |
| Goh invited Florence to dinner and persuaded her to purchase his shares in AMP. | |
| Florence met Goh and Lee where Goh repeated the representations. | |
| Conference call among Goh, Lee, Florence and Andy. | |
| Goh emailed Florence and Andy regarding the SPA deal. | |
| Andy proposed amendments to the draft Term Sheet. | |
| Lee forwarded a revised Term Sheet to Andy and Florence. | |
| Lee informed Andy that AMP was doing a dual track IPO and/or trade sale. | |
| Lee circulated a draft SPA for Andy and Florence’s review. | |
| Andy emailed Lee and Goh to propose that the capital and IRR were to be guaranteed by Goh in addition to AMP. | |
| Goh sent a WhatsApp message to Florence stating that Andy is the first shareholder he guaranteed capital and IRR. | |
| Goh emailed Andy and Florence stating that everyone needed to move fast. | |
| Andy emailed Lee to verify if the guarantee given by AMP was legally viable. | |
| LSI executed the SPA with Goh. | |
| Goh transferred 32,049 shares to LSI and LSI paid Goh in two installments. | |
| Goh informed Andy and Florence that the negotiations on the trade sale with Peter Lim had fallen through. | |
| Goh informed Florence that the IPO would be delayed. | |
| Florence became a director of AMP. | |
| Internal conflicts in AMP ensued between Goh and Nelson and Terence. | |
| Florence’s relationship with Goh began to deteriorate. | |
| LSI’s lawyers issued a letter of demand to Goh and Michelle for fraudulent misrepresentation. | |
| Florence resigned as AMP’s director. | |
| Goh ceased to be a director of AMP. | |
| Trial began. | |
| Trial concluded. | |
| Judgment reserved. |
7. Legal Issues
- Fraudulent Misrepresentation
- Outcome: The court found Goh liable for fraudulent misrepresentation.
- Category: Substantive
- Related Cases:
- [2001] 2 SLR(R) 435
- Innocent Misrepresentation
- Outcome: The court found Goh liable for innocent misrepresentation.
- Category: Substantive
- Rescission
- Outcome: The court denied rescission due to the intervention of third-party rights.
- Category: Substantive
- Liability under Section 2(1) of the Misrepresentation Act
- Outcome: The court found Goh would also have been liable under s 2(1) of the MA.
- Category: Substantive
8. Remedies Sought
- Declaration that the SPA had been validly avoided and rescinded
- Return of the purchase price of the shares
- Damages
9. Cause of Actions
- Fraudulent Misrepresentation
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Healthcare
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Panatron Pte Ltd and another v Lee Cheow Lee and another | N/A | Yes | [2001] 2 SLR(R) 435 | Singapore | Cited for the elements of fraudulent misrepresentation. |
| Ernest Ferdinand Perez De La Sala v Compania de Navegacion Palomar, SA and others and other appeals | Court of Appeal | Yes | [2018] 1 SLR 894 | Singapore | Cited for the principle that a representation as to the future is not, in itself, actionable, but can imply an actionable representation of an existing fact. |
| Lim Koon Park and another v Yap Jin Meng Bryan and another | N/A | Yes | [2013] 4 SLR 150 | Singapore | Cited for the principle that under s 2(1) of the Misrepresentation Act, the representor would be liable unless he proves that he had reasonable grounds to believe and did so believe in the truth of the representation. |
| Forum Development Pte Ltd v Global Accent Trading Pte Ltd and another appeal | N/A | Yes | [1994] 3 SLR(R) 1097 | Singapore | Cited for the principle that it is not a defence in an action for innocent misrepresentation for the representor to claim a belief in a representation that was objectively false. |
| 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 a relatively high standard of proof must be satisfied by the representee before a fraudulent misrepresentation can be established successfully. |
| 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 principle that the more serious the allegation, the more evidence the representee may have to adduce to succeed in his claim. |
| Deutsche Bank AG v Chang Tse Wen and another appeal | N/A | Yes | [2013] 4 SLR 886 | Singapore | Cited for the principle that statements of opinion or belief as to the likelihood of a future event carry the implication of a present fact. |
| Alwie Handoyo v Tjong Very Sumito and another and another appeal | Court of Appeal | Yes | [2013] 4 SLR 308 | Singapore | Cited for the principle that the misrepresentation must be actively present to the representee's mind. |
| Spence v Crawford | N/A | Yes | [1939] 3 All ER 271 | N/A | Cited for the principle of restitutio in integrum in rescission. |
| Wishing Star Ltd v Jurong Town Corp | Court of Appeal | Yes | [2008] 2 SLR(R) 909 | Singapore | Cited for the principle that where the plaintiff has proved that there was fraudulent misrepresentation, it is entitled to damages for all losses flowing directly as a result of the entry into the transaction, regardless of whether the loss was foreseeable. |
| ACB v Thomson Medical Pte Ltd and others | Court of Appeal | Yes | [2017] 1 SLR 918 | Singapore | Cited for the principle that punitive damages may be awarded in tort where the totality of the defendant’s conduct is so outrageous that it warrants punishment, deterrence, and condemnation. |
| Foskett v McKeown | N/A | Yes | [2000] 2 WLR 1299 | N/A | Cited for the principle that tracing is not a claim or remedy but essentially a process to identify an asset as a substitute for the original asset that belongs to a claimant. |
| Shalson v Russo | N/A | Yes | [2005] Ch 281 | N/A | Cited for the principle that tracing would seem to be available only upon rescission of a contract. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Misrepresentation Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Misrepresentation
- Fraud
- Rescission
- Sale and Purchase Agreement
- Initial Public Offering
- Trade Sale
- Minority Shareholders
- Internal Rate of Return
- Guarantee
- Liquidity Event
15.2 Keywords
- Misrepresentation
- Fraud
- Rescission
- Contract
- Shares
- SPA
- IPO
- Trade Sale
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Misrepresentation | 95 |
| Contract Law | 90 |
| Fraud and Deceit | 85 |
| Remedies | 70 |
| Rescission | 65 |
| Innocent Misrepresentation | 60 |
| Corporate Law | 30 |
16. Subjects
- Contract Law
- Misrepresentation
- Equity
- Remedies
- Share Purchase Agreement