Fan Ren Ray v Toh Fong Peng: Appeal on Breach of Contract & Illegality in Network Marketing Scheme

Fan Ren Ray, Fan Ruicheng, Chua Teng Da, and Chia Chee Tian Joe appealed a High Court decision in favor of Toh Fong Peng, Andy Bong Kit Siong, Kristie Pui Keh Leh, Wong Diong Chai, Chin Kah Thing, Ho Kum Fatt, and Liu Chang Hai concerning a breach of contract claim related to a network marketing scheme. The Court of Appeal dismissed the appeal, upholding the High Court's finding that the appellants were liable for the breach and that the contracts were not unenforceable due to illegality.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Ex Tempore Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Appeal concerning breach of contract in a network marketing scheme. The court dismissed the appeal, finding the appellants liable and the contracts not unenforceable.

1.7 Decision Date

2 December 2020

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Fan Ren Ray	Appellant, Defendant	Individual	Appeal Dismissed	Lost	Tan Chuan Thye of Rajah & Tann Singapore LLP Shaun Ou of Rajah & Tann Singapore LLP Robert Raj Joseph of Gravitas Law LLC
Fan Ruicheng	Appellant, Defendant	Individual	Appeal Dismissed	Lost	Tan Chuan Thye of Rajah & Tann Singapore LLP Shaun Ou of Rajah & Tann Singapore LLP Robert Raj Joseph of Gravitas Law LLC
Chua Teng Da	Appellant, Defendant	Individual	Appeal Dismissed	Lost	Tan Chuan Thye of Rajah & Tann Singapore LLP Shaun Ou of Rajah & Tann Singapore LLP Robert Raj Joseph of Gravitas Law LLC
Chia Chee Tian Joe	Appellant, Defendant	Individual	Appeal Dismissed	Lost	Tan Chuan Thye of Rajah & Tann Singapore LLP Shaun Ou of Rajah & Tann Singapore LLP Robert Raj Joseph of Gravitas Law LLC
Toh Fong Peng	Respondent, Plaintiff	Individual	Appeal Dismissed	Won	Muthu Kumaran s/o Muthu Santha of Kumaran Law
Andy Bong Kit Siong	Respondent, Plaintiff	Individual	Appeal Dismissed	Won	Muthu Kumaran s/o Muthu Santha of Kumaran Law
Kristie Pui Keh Leh	Respondent, Plaintiff	Individual	Appeal Dismissed	Won	Muthu Kumaran s/o Muthu Santha of Kumaran Law
Wong Diong Chai	Respondent, Plaintiff	Individual	Appeal Dismissed	Won	Muthu Kumaran s/o Muthu Santha of Kumaran Law
Chin Kah Thing	Respondent, Plaintiff	Individual	Appeal Dismissed	Won	Muthu Kumaran s/o Muthu Santha of Kumaran Law
Ho Kum Fatt	Respondent, Plaintiff	Individual	Appeal Dismissed	Won	Muthu Kumaran s/o Muthu Santha of Kumaran Law
Liu Chang Hai	Respondent, Plaintiff	Individual	Appeal Dismissed	Won	Muthu Kumaran s/o Muthu Santha of Kumaran Law
Excelsior Capital Finance Limited	Defendant	Corporation	No specific outcome recorded	Neutral
Fock Mun Hong	Defendant	Individual	No specific outcome recorded	Neutral
IOC Group Limited	Defendant	Corporation	No specific outcome recorded	Neutral

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Phang Boon Leong	Judge of Appeal	Yes
Woo Bih Li	Judge	No
Quentin Loh	Judge	No

4. Counsels

Counsel Name	Organization
Tan Chuan Thye	Rajah & Tann Singapore LLP
Shaun Ou	Rajah & Tann Singapore LLP
Robert Raj Joseph	Gravitas Law LLC
Muthu Kumaran s/o Muthu Santha	Kumaran Law

4. Facts

The respondents were participants in a network marketing scheme.
The scheme was owned and operated by a Malaysian business.
Participants earned returns and commissions by purchasing and selling financial products on online platforms.
The appellants were found to be the owners and operators of the Malaysian business.
The appellants allegedly breached terms of the contracts related to access to web shops, redemption of credits, and insurance obligations.
The appellants did not plead or raise the issue of illegality in the court below.

5. Formal Citations

Fan Ren Ray and others v Toh Fong Peng and others, Civil Appeal No 50 of 2020, [2020] SGCA 117
Toh Fong Peng and others v Excelsior Capital Finance Ltd and others, , [2020] SGHC 51

6. Timeline

Date	Event
2020-12-03	Judgment delivered
2014-01-01	Suit No 1348 of 2014 filed

7. Legal Issues

Breach of Contract
- Outcome: The court found the appellants liable for breach of contract.
- Category: Substantive
- Sub-Issues:
  - Failure to allow access to web shops
  - Failure to effect redemption of web shop credits
  - Failure to insure principal sum
Illegality of Contract
- Outcome: The court held that the contracts were not unenforceable for illegality.
- Category: Substantive

8. Remedies Sought

Damages

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation

11. Industries

Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Toh Fong Peng and others v Excelsior Capital Finance Ltd and others	High Court	Yes	[2020] SGHC 51	Singapore	The current appeal is against the decision of this case.
JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others	Court of Appeal	Yes	[2020] SGCA 95	Singapore	Cited for the principle that the underlying consideration of the law of pleadings is to prevent surprises arising at trial.
V Nithia (co-administratrix of the estate of Ponnusamy Sivapakiam, deceased) v Buthmanaban s/o Vaithilingam and another	Court of Appeal	Yes	[2015] 5 SLR 1422	Singapore	Cited for the principle that a departure from the rule that parties are bound by their pleadings is permitted only in very limited circumstances.
Edler v Auerbach	English decision	Yes	[1950] 1 KB 359	England	Cited for the circumstances in which the court would be bound to consider the issue of illegality.
Koon Seng Construction Pte Ltd v Chenab Contractor Pte Ltd and another	Singapore High Court	Yes	[2008] 1 SLR(R) 375	Singapore	Cited with approval of the observations by Devlin J in Edler v Auerbach regarding the issue of illegality.
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 principle that foreign law must be pleaded and proved.
Sim Tony v Lim Ah Ghee (trading as Phil Real Estate & Building Services)	Singapore High Court	Yes	[1994] 2 SLR(R) 910	Singapore	Cited for the principle that facts necessary for the Judge to make a finding were, ex hypothesi, never before him.
Sim Tony v Lim Ah Ghee (trading as Phil Real Estate & Building Services)	Singapore High Court	Yes	[1995] 1 SLR(R) 886	Singapore	Affirmed the decision of Sim Tony v Lim Ah Ghee (trading as Phil Real Estate & Building Services) [1994] 2 SLR(R) 910.
ANC Holdings Pte Ltd v Bina Puri Holdings Bhd	Singapore High Court	Yes	[2013] 3 SLR 666	Singapore	Cited for the principle that facts necessary for the Judge to make a finding were, ex hypothesi, never before him.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Rules of Court (Cap 322, R 5, 2014 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Network marketing scheme
Web Shops
E-Wallets
Access Obligation
Redemption Obligation
Insurance Obligation
Silver packages

15.2 Keywords

contract
breach
illegality
network marketing
scheme
appeal

17. Areas of Law

Area Name	Relevance Score
Breach of Contract	90
Illegality and public policy	85
Contract Law	70
Civil Procedure	30
Network Marketing Scheme	20
Arbitration	10

16. Subjects

Contract Law
Network Marketing
Illegality