Crest Capital Asia v OUE Lippo Healthcare: Conspiracy & Breach of Fiduciary Duty
The Singapore Court of Appeal heard appeals arising from a claim by OUE Lippo Healthcare Ltd and IHC Medical Re Pte Ltd against Crest Capital Asia Pte Ltd, Crest Catalyst Equity Pte Ltd, The Enterprise Fund III Ltd, VMF3 Ltd, Value Monetization III Ltd, Lim Beng Choo, and Fan Kow Hin, following a prior decision that a transaction involving a loan agreement and share acquisitions was void. The plaintiffs claimed losses beyond the initial contractual liability. The Court partially allowed the appeal, reversing the finding of liability against VMF3 Ltd and Value Monetization III Ltd, while dismissing the appeals of the other defendants.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal Allowed in Part
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal case concerning conspiracy and breach of fiduciary duty related to a void share transaction. Appeal partially allowed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Value Monetization III Ltd | Appellant, Defendant | Corporation | Appeal Allowed in Part | Won | |
| Lim Beng Choo | Appellant, Defendant | Individual | Appeal Dismissed | Lost | |
| The Enterprise Fund III Ltd | Appellant, Defendant | Corporation | Appeal Dismissed | Lost | |
| Crest Capital Asia Pte Ltd | Appellant, Defendant | Corporation | Appeal Dismissed | Lost | |
| VMF3 Ltd | Appellant, Defendant | Corporation | Appeal Allowed in Part | Won | |
| Crest Catalyst Equity Pte Ltd | Appellant, Defendant | Corporation | Appeal Dismissed | Lost | |
| OUE Lippo Healthcare Ltd (formerly known as International Healthway Corporation Ltd) | Respondent, Plaintiff | Corporation | Appeal Partially Allowed | Partial | |
| IHC Medical Re Pte Ltd | Respondent, Plaintiff | Corporation | Appeal Partially Allowed | Partial | |
| Fan Kow Hin | Appellant, Defendant | Individual | Appeal Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Justice of the Court of Appeal | No |
| Steven Chong | Justice of the Court of Appeal | Yes |
| Belinda Ang Saw Ean | Judge of the Appellate Division | No |
4. Counsels
4. Facts
- IHC entered into a Standby Facility for $20m.
- Drawdowns were made from the Standby Facility to purchase IHC shares.
- Mr. Fan prepared a board paper misleadingly characterizing the Standby Facility.
- Ms. Lim failed to inquire about the drawdowns on the Standby Facility.
- The Crest Entities applied a $3.8m payment towards the Standby Facility instead of the Geelong Facility.
- The Australian Properties were placed in receivership and sold.
5. Formal Citations
- Crest Capital Asia Pte Ltd and others v OUE Lippo Healthcare Ltd (formerly known as International Healthway Corp Ltd) and another and other appeals, Civil Appeal Nos 113, 132 and 135 of 2020, [2021] SGCA 25
6. Timeline
| Date | Event |
|---|---|
| Discussions on the Disputed Facilities began | |
| Mr. Aathar sent Mr. Tan an email regarding the Standby Facility | |
| Further correspondence on the Standby Facility | |
| Term Sheet signed by Mr. Chia, Mr. Aathar, and Mr. Fan | |
| First drawdown on the Standby Facility | |
| Mr. Fan appointed Group CEO | |
| Board paper circulated to IHC's board of directors | |
| Board approval obtained for the Original Facility | |
| Geelong Facility granted | |
| Original Facility agreement executed | |
| Standby Facility agreement executed | |
| Last drawdown from the Standby Facility | |
| SGX announced investors should exercise caution when dealing with IHC’s shares | |
| Crest Capital demanded repayment of sums due under both the Standby and Geelong Facilities | |
| IHC made two payments to the Crest Entities | |
| Correspondence took place between the finance teams of IHC and the Crest Entities | |
| Crest Entities’ solicitors served letters of demand on IHC and IHC Medical Re | |
| IHC commenced the Suit seeking to remove the Crest Receivers | |
| Australian Properties placed in receivership | |
| IHC held an extraordinary general meeting | |
| IHC changed its position and accepted that IHC shares were acquired for IHC | |
| Court's decision in The Enterprise Fund III Ltd and others v OUE Lippo Healthcare Ltd | |
| Judge issued her judgment | |
| Hearing date | |
| Judgment reserved |
7. Legal Issues
- Conspiracy
- Outcome: The Court found that Crest Capital, Crest Catalyst, EFIII, and Fan Kow Hin engaged in unlawful means conspiracy.
- Category: Substantive
- Sub-Issues:
- Unlawful means
- Intention to injure
- Breach of Fiduciary Duty
- Outcome: The Court found that Fan Kow Hin breached his fiduciary duties to IHC by failing to disclose the true purpose of the Standby Facility.
- Category: Substantive
- Sub-Issues:
- Failure to disclose
- Misleading the board
- Negligence
- Outcome: The Court found that Lim Beng Choo was negligent in failing to make inquiries about the drawdowns on the Standby Facility.
- Category: Substantive
- Sub-Issues:
- Duty of care
- Failure to inquire
- Attribution of Knowledge
- Outcome: The Court attributed Mr. Tan's knowledge to Crest Capital, Crest Catalyst, and EFIII, but not to VMF3 and VMIII.
- Category: Procedural
- Sub-Issues:
- Agency
- Scope of authority
8. Remedies Sought
- Monetary Damages
- Removal of Receivers
9. Cause of Actions
- Dishonest Assistance
- Unlawful Means Conspiracy
- Breach of Fiduciary Duty
- Negligence
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Healthcare
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| The Enterprise Fund III Ltd and others v OUE Lippo Healthcare Ltd (formerly known as International Healthway Corp Ltd) | Court of Appeal | Yes | [2019] 2 SLR 524 | Singapore | The case established that a transaction was void under s 76A(1A)(a)(i) of the Companies Act, but open market acquisitions of shares were saved by s 76A(1A). |
| Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal | Court of Appeal | Yes | [2013] 4 SLR 193 | Singapore | Cited regarding the pleading requirements for attribution of acts to a party. |
| MK (Project Management) v Baker Marine Energy | Court of Appeal | Yes | [1994] 3 SLR(R) 823 | Singapore | Cited for the principle that it is sufficient to state the material facts in pleadings without stating the legal result. |
| In re Vandervell’s Trusts (No 2); White v Vandervell Trustees Ltd | English Court of Appeal | Yes | [29174] Ch 269 | England and Wales | Cited for the principle that it is sufficient for the pleader to state the material facts and not the legal result. |
| Parti v Al Sabah | English High Court | Yes | [2007] EWHC 1869 (Ch) | England and Wales | Cited for the principle that an agent who acts against his principal’s interest cannot be said to be acting within his authority. |
| 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 principle that an agent who acts against his principal’s interest cannot be said to be acting within his authority. |
| Meretz Investments NV v ACP Ltd | England and Wales Court of Appeal | Yes | [2008] 2 WLR 904 | England and Wales | Discussed regarding the knowledge requirement in unlawful means conspiracy. |
| British Industrial Plastics Ltd v Ferguson | English Court of Appeal | Yes | [1938] 4 All ER 504 | England and Wales | Cited as supporting the knowledge requirement in unlawful means conspiracy. |
| Belmont Finance Corporation v Williams Furniture Ltd (No 2) | English Court of Appeal | Yes | [1980] 1 All ER 393 | England and Wales | Cited as standing for the proposition that knowledge of unlawfulness is not required for unlawful means conspiracy. |
| Stobart Group Ltd v Tinkler | English High Court | Yes | [2019] EWHC 258 (Comm) | England and Wales | Cited as holding that there is no knowledge requirement for unlawful means conspiracy. |
| The Racing Partnership Ltd & Ors v Done Brothers (Cash Betting) Ltd & Ors | English High Court | Yes | [2019] EWHC 1156 (Ch) | England and Wales | Cited as holding that knowledge is necessary for unlawful means conspiracy. |
| The Racing Partnership Ltd & Ors v Sports Information Services Limited | English Court of Appeal | Yes | [2020] EWCA Civ 1300 | England and Wales | Cited as the latest word on the knowledge requirement issue under English law. |
| 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 unlawful means conspiracy, including the intention to injure. |
| Morris v Ford Motor Co Ltd | English Court of Appeal | Yes | [1973] 1 QB 792 | England and Wales | Cited regarding good industrial relations and an employer's claim against an employee in negligence. |
| ANC Holdings Pte Ltd v Bina Puri Holdings Bhd | Court of Appeal | Yes | [2013] 3 SLR 666 | Singapore | Cited regarding the court's duty to act on the doctrine of ex turpi causa non oritur actio. |
| Ong Bee Chew v Ong Shu Lin | Court of Appeal | Yes | [2019] 3 SLR 132 | Singapore | Cited regarding the doctrine of ex turpi causa non oritur actio. |
| Chuang Uming (Pte) Ltd v Setron Ltd and another appeal | Court of Appeal | Yes | [1999] 3 SLR(R) 771 | Singapore | Cited regarding joint and several liability for indivisible damage caused by multiple parties. |
| Nowlan et al v Brunswick Construction Ltd | New Brunswick Court of Appeal | Yes | (1973) 34 DLR (3d) 422 | Canada | Cited regarding joint and several liability for concurrent torts or breaches of contract contributing to the same damage. |
| Chuang Uming (Pte) Ltd v Setron Limited (Lee Sian Teck Chartered Architects, Third Party) | High Court | Yes | [1999] SGHC 54 | Singapore | Cited regarding joint and several liability for concurrent torts or breaches of contract contributing to the same damage. |
| Hodgkinson v Simms | Supreme Court of Canada | Yes | [1994] 3 SCR 377 | Canada | Cited regarding the doctrine of novus actus interveniens in the context of a breach of fiduciary duty. |
| The “Shravan” | High Court | Yes | [1999] 2 SLR(R) 713 | Singapore | Cited regarding special damages. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 18 r 7 |
| Rules of Court O 18 r 11 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 76A(1A)(a)(i) | Singapore |
| Companies Act s 76A(1A) | Singapore |
| Companies Act s 76 | Singapore |
| Companies Act s 76(5) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Standby Facility
- Geelong Facility
- IHC shares
- Drawdowns
- Share buyback
- Fiduciary duty
- Negligence
- Conspiracy
- Attribution
- Investment Memoranda
15.2 Keywords
- Conspiracy
- Breach of Fiduciary Duty
- Negligence
- Share Buyback
- Companies Act
- Attribution
- Agency
- Singapore Court of Appeal
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Fiduciary Duties | 80 |
| Torts | 75 |
| Damages | 70 |
| Conspiracy | 70 |
| Agency Law | 65 |
| Accessory liability | 60 |
| Trust Law | 50 |
| Evidence Law | 50 |
| Company Law | 40 |
| Civil Procedure | 30 |
| Corporate Law | 25 |
| Contract Law | 20 |
16. Subjects
- Company Law
- Torts
- Agency
- Trusts
- Civil Procedure