Tan Woo Thian v PricewaterhouseCoopers: Negligence Claim for Report on SBI Offshore's NPT Transactions

In the High Court of Singapore, Tan Woo Thian, former director and CEO of SBI Offshore Limited, sued PricewaterhouseCoopers Advisory Services Pte Ltd for negligence in preparing a fact-finding report on SBI's acquisition and disposal of shares in Jiangyin Neptune Marine Appliance Co Ltd (NPT). Tan Woo Thian claimed the report was inaccurate and caused him reputational and economic damage. See Kee Oon J dismissed the claim, finding that PricewaterhouseCoopers did not owe Tan Woo Thian a duty of care. The plaintiff's cause of action was negligence.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Claim Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Tan Woo Thian sued PricewaterhouseCoopers for negligence in a report on SBI Offshore's transactions. The court dismissed the claim, finding no duty of care.

1.7 Decision Date

12 August 2020

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Tan Woo Thian	Plaintiff	Individual	Claim Dismissed	Lost	Narayanan Vijya Kumar of Vijay & Co Malcolm Tan Ban Hoe of City Law LLC
PricewaterhouseCoopers Advisory Services Pte Ltd	Defendant	Corporation	Judgment for Defendant	Won	Chew Xiang of Rajah & Tann Singapore LLP Ang Peng Koon Patrick of Rajah & Tann Singapore LLP Cheong Tian Ci Torsten of Rajah & Tann Singapore LLP Chow Jie Ying of Rajah & Tann Singapore LLP

3. Judges

Judge Name	Title	Delivered Judgment
See Kee Oon	Judge	Yes

4. Counsels

Counsel Name	Organization
Narayanan Vijya Kumar	Vijay & Co
Malcolm Tan Ban Hoe	City Law LLC
Chew Xiang	Rajah & Tann Singapore LLP
Ang Peng Koon Patrick	Rajah & Tann Singapore LLP
Cheong Tian Ci Torsten	Rajah & Tann Singapore LLP
Chow Jie Ying	Rajah & Tann Singapore LLP

4. Facts

The plaintiff, former director and CEO of SBI, was involved in transactions related to SBI's acquisition and disposal of shares in NPT.
SBI engaged the defendant to conduct a fact-finding review on these transactions.
The defendant's report raised concerns about the validity of acquisition and disposal agreements and potential breaches of tax and securities laws.
The plaintiff alleged the defendant acted negligently in investigating the transactions and presenting findings, causing him reputational and economic damage.
The defendant's engagement was to undertake a fact-finding review on the circumstances surrounding SBI’s acquisition and disposal of the 35% equity interest in NPT.
The defendant's engagement was to address certain allegations against John Chan.

5. Formal Citations

Tan Woo Thian v PricewaterhouseCoopers Advisory Services Pte Ltd, Suit No 267 of 2017, [2020] SGHC 171

6. Timeline

Date	Event
2008-01-01	SBI acquired a 35% equity interest in NPT
2008-10-20	Second Equity Transfer Agreement signed
2009-11-11	SBI listed on the SGX-ST
2015-08-18	SBI entered into an agreement to dispose of its 35% equity interest in NPT
2015-11-11	SBI's Board rejected the plaintiff's proposal to execute a second disposal ETA
2015-12-01	SBI's Board met to consider a novation agreement
2015-12-01	The Novation Agreement was signed
2015-12-08	Plaintiff signed a second disposal ETA
2016-06-01	SBI engaged the defendant to conduct a fact-finding review
2016-07-18	Requisition notices served on SBI's Board
2016-08-27	Defendant sent the plaintiff a draft executive summary and questionnaire
2016-09-06	Defendant issued the PwC Report and Executive Summary to SBI
2016-09-16	EGM was held
2016-09-15	SBI lodged a report with the Commercial Affairs Division of the Singapore Police Force
2016-11-21	SBI appointed UniLegal LLC to investigate the NPT Transactions
2017-03-10	SBI released an announcement summarizing UniLegal's interim findings
2017-03-27	Plaintiff filed a writ of summons against the defendant
2017-09-30	SBI released an announcement summarizing UniLegal's final findings
2019-09-02	Tan Woo Thian’s Affidavit of Evidence-in-Chief
2019-09-04	Ye Yongqing’s Affidavit of Evidence-in-Chief
2019-09-24	Michael Meng Gong Yan’s Affidavit of Evidence-in-Chief
2019-08-29	Goh Thien Pong’s Affidavit of Evidence-in-Chief
2019-09-30	Tam Chee Chong’s Affidavit of Evidence in Chief
2019-10-07	Notes of Evidence
2019-10-08	Notes of Evidence
2019-10-09	Notes of Evidence
2019-10-10	Notes of Evidence
2019-10-11	Notes of Evidence
2019-11-06	Notes of Evidence
2019-11-07	Notes of Evidence
2019-10-07	Trial began
2020-01-30	Notes of Evidence
2020-06-03	Hearing Date
2020-08-13	Judgment Date
2020-01-30	Notes of Evidence

7. Legal Issues

Duty of Care
- Outcome: The court found that the defendant did not owe the plaintiff a duty of care.
- Category: Substantive
Breach of Duty
- Outcome: The court found that even if a duty of care existed, the defendant did not breach it.
- Category: Substantive

8. Remedies Sought

Loss of ability to resume employment with SBI
Loss of business reputation
Deterioration of the value of shares in SBI
Emotional and psychological trauma and hardship

9. Cause of Actions

Negligence

10. Practice Areas

Commercial Litigation

11. Industries

Accounting
Offshore and Marine

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency	Court of Appeal	Yes	[2007] 4 SLR(R) 100	Singapore	Established the three-stage framework for determining the existence of a duty of care.
Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric	Unknown	Yes	[2007] 1 SLR(R) 853	Singapore	Cited regarding the wide nature of factual foreseeability.
Ngiam Kong Seng and another v Lim Chiew Hock	Court of Appeal	Yes	[2008] 3 SLR(R) 674	Singapore	Discussed as an exceptional case where factual foreseeability was not satisfied.
Correia et al v Canac Kitchens et al	Ontario Court of Appeal	Yes	(2008) 91 O.R. (3d) 353	Canada	Plaintiff submitted that the present case was factually similar to the Canadian cases of Correia et al v Canac Kitchens et al (2008) 91 O.R. (3d) 353 (“Correia”) and Hill v Hamilton-Wentworth Regional Police Services Board [2007] 3 S.C.R. 129 (“Hill”), both of which involved investigators who were held to owe a duty of care to the suspects under investigation.
Hill v Hamilton-Wentworth Regional Police Services Board	Supreme Court of Canada	Yes	[2007] 3 S.C.R. 129	Canada	Plaintiff submitted that the present case was factually similar to the Canadian cases of Correia et al v Canac Kitchens et al (2008) 91 O.R. (3d) 353 (“Correia”) and Hill v Hamilton-Wentworth Regional Police Services Board [2007] 3 S.C.R. 129 (“Hill”), both of which involved investigators who were held to owe a duty of care to the suspects under investigation.
Spring v Guardian Assurance Plc	Unknown	Yes	[1995] 2 AC 296	England	Plaintiff asserted that the present case was analogous to Spring v Guardian Assurance Plc [1995] 2 AC 296 (“Spring”) and Ramesh s/o Krishnan v AXA Life Insurance Singapore Pte Ltd [2015] 4 SLR 1 (“Ramesh (HC)”), in which the High Court held that an employer who was providing a reference for an existing or former employee to another potential employer owed a duty of care to the employee being referred.
Ramesh s/o Krishnan v AXA Life Insurance Singapore Pte Ltd	High Court	Yes	[2015] 4 SLR 1	Singapore	Plaintiff asserted that the present case was analogous to Spring v Guardian Assurance Plc [1995] 2 AC 296 (“Spring”) and Ramesh s/o Krishnan v AXA Life Insurance Singapore Pte Ltd [2015] 4 SLR 1 (“Ramesh (HC)”), in which the High Court held that an employer who was providing a reference for an existing or former employee to another potential employer owed a duty of care to the employee being referred.
Caparo Industries Plc. v Dickman and Others	Unknown	Yes	[1990] 2 AC 605	England	Defendant contended that the present case was analogous to cases involving auditors who were found not to owe a duty of care to shareholders and/or potential investors who relied upon their audited statements to make investments. These included cases such as Caparo Industries Plc. v Dickman and Others [1990] 2 AC 605 (“Caparo”), Anthony and Others v Wright and Others [1995] 1 BCLC 236 (“Anthony”) and Ikumene Singapore Pte Ltd and another v Leong Chee Leng (trading as Elizabeth Leong & Co) [1993] 2 SLR(R) 480.
Anthony and Others v Wright and Others	Unknown	Yes	[1995] 1 BCLC 236	England	Defendant contended that the present case was analogous to cases involving auditors who were found not to owe a duty of care to shareholders and/or potential investors who relied upon their audited statements to make investments. These included cases such as Caparo Industries Plc. v Dickman and Others [1990] 2 AC 605 (“Caparo”), Anthony and Others v Wright and Others [1995] 1 BCLC 236 (“Anthony”) and Ikumene Singapore Pte Ltd and another v Leong Chee Leng (trading as Elizabeth Leong & Co) [1993] 2 SLR(R) 480.
Ikumene Singapore Pte Ltd and another v Leong Chee Leng (trading as Elizabeth Leong & Co)	Unknown	Yes	[1993] 2 SLR(R) 480	Singapore	Defendant contended that the present case was analogous to cases involving auditors who were found not to owe a duty of care to shareholders and/or potential investors who relied upon their audited statements to make investments. These included cases such as Caparo Industries Plc. v Dickman and Others [1990] 2 AC 605 (“Caparo”), Anthony and Others v Wright and Others [1995] 1 BCLC 236 (“Anthony”) and Ikumene Singapore Pte Ltd and another v Leong Chee Leng (trading as Elizabeth Leong & Co) [1993] 2 SLR(R) 480.
Resource Piling Pte Ltd v Geospecs Pte Ltd	High Court	Yes	[2014] 1 SLR 485	Singapore	Reliance was also placed on Resource Piling Pte Ltd v Geospecs Pte Ltd [2014] 1 SLR 485 (“Resource Piling”), where a soil investigator who was engaged by a developer to produce borehole logs was held not to owe a duty of care to a contractor who subsequently used the logs to price a tender.
Go Dante Yap v Bank Austria Creditanstalt AG	Unknown	Yes	[2011] 4 SLR 559	Singapore	In the present case, the defendant expressly disclaimed responsibility for its investigation and report to any person except SBI’s Audit Committee. The relevant provision is Clause 4.6 of the Engagement Letter, which stated: 62 Foot Note 62 × ABD at p 1823 Our Report is intended for, and only for, the benefit of the Audit Committee and the Sponsor and for no other purpose. We do not accept or assume responsibility for our work, and our Report thereof, to anyone except the Audit Committee. Our work will not be planned or conducted in contemplation of reliance by any third party. Therefore, items of possible interest to a third party will not be specifically addressed and matters may exist that would be assessed differently by a third party. [emphasis added]
Ramesh s/o Krishnan v AXA Life Insurance Singapore Pte Ltd	Unknown	Yes	[2016] 4 SLR 1124	Singapore	In Ramesh (HC), George Wei JC (as he then was) stressed (at [253]) that an employer who provides an employment reference for an ex-employee does so “having special knowledge of the ex-employee, for the assistance and in the service of the ex-employee, and with the express or implied authority of the ex-employee” [emphasis added]. This analysis was subsequently endorsed on appeal in Ramesh s/o Krishnan v AXA Life Insurance Singapore Pte Ltd [2016] 4 SLR 1124 at [58].
White and another v Jones and another	Unknown	Yes	[1995] 2 AC 207	England	Viewing the circumstances of the case in the round, I was not satisfied that the plaintiff had reasonably relied on the Executive Summary. As the defendant pointed out, the plaintiff’s pleaded case was not that he would rely on the Executive Summary, but that SBI’s shareholders would rely on the Executive Summary in making a decision as to whether to support him.
Anwar Patrick Adrian and another v Ng Chong & Hue LLC and another	Court of Appeal	Yes	[2014] 3 SLR 761	Singapore	Viewing the circumstances of the case in the round, I was not satisfied that the plaintiff had reasonably relied on the Executive Summary. As the defendant pointed out, the plaintiff’s pleaded case was not that he would rely on the Executive Summary, but that SBI’s shareholders would rely on the Executive Summary in making a decision as to whether to support him.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Securities and Futures Act (Cap 289, 2006 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Fact-finding review
Executive Summary
NPT Transactions
Duty of care
Legal proximity
Policy considerations
Voluntary assumption of responsibility
Reliance
SBI Offshore Limited
Jiangyin Neptune Marine Appliance Co Ltd
Equity Transfer Agreement
Prospectus
Commercial Affairs Division

15.2 Keywords

Negligence
Duty of care
Fact-finding review
SBI Offshore
PricewaterhouseCoopers
NPT Transactions
Singapore High Court

17. Areas of Law

Area Name	Relevance Score
Negligence	95
Torts	75
Reputational Loss	60
Company Law	30
Corporate Law	25
Civil Procedure	20
Director's Duties	20
Accounting	15
Evidence Law	15
Share Valuation	10
Contract Law	10
Business Law	10

16. Subjects

Negligence
Corporate Law
Financial Advisory
Auditing