Lim Bee Lan v Lee Juan Loong: Fraudulent & Negligent Misrepresentation in ABT Investment

In the General Division of the High Court of Singapore, Lim Bee Lan sued Lee Juan Loong and Brendan Lai for fraudulent and negligent misrepresentation, claiming they induced her to invest S$300,000 in Alpha Bodytec (ABT) for a 5% stake. Lim alleged the defendants made false representations about ABT's profitability and valuation. The court, presided over by Justice Lee Seiu Kin, found the defendants liable for both fraudulent and negligent misrepresentation, awarding Lim S$298,535.09 plus interest. The court held that the defendants made false representations to induce the plaintiff to invest in ABT.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Lim Bee Lan sued Lee Juan Loong and Brendan Lai for fraudulent and negligent misrepresentation, alleging they induced her to invest in Alpha Bodytec (ABT). The court found the defendants liable.

1.7 Decision Date

13 October 2021

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Lim Bee Lan	Plaintiff	Individual	Claim Allowed	Won	Subramanian S/O Ayasamy Pillai, Daphne Francesca Tan, Roe Ervin Jun Zhi
Lee Juan Loong	Defendant	Individual	Claim Upheld	Lost	Han Wah Teng, Winston Chui
Brendan Lai	Defendant	Individual	Claim Upheld	Lost	Han Wah Teng, Winston Chui

3. Judges

Judge Name	Title	Delivered Judgment
Lee Seiu Kin	Judge of the High Court	Yes

4. Counsels

Counsel Name	Organization
Subramanian S/O Ayasamy Pillai	CNPLaw LLP
Daphne Francesca Tan	CNPLaw LLP
Roe Ervin Jun Zhi	CNPLaw LLP
Han Wah Teng	CTLC Law Corporation
Winston Chui	CTLC Law Corporation

4. Facts

The Plaintiff invested S$300,000 into Alpha Bodytec (ABT) for a 5% interest.
The Defendants are the sole directors of ABT.
The Plaintiff alleges the Defendants made false representations to induce her investment.
The Defendants deny making the representations.
ABT was not profitable at the time of the Plaintiff's investment.
ABT's actual value was significantly lower than the represented S$16,000,000.
The Plaintiff relied on the representations when deciding to invest.

5. Formal Citations

Lim Bee Lan v Lee Juan Loong and another, Suit No 230 of 2020, [2021] SGHC 234

6. Timeline

Date	Event
2018-08-01	Pei Wen considered investing in a friend’s food and beverage business.
2018-09-07	1st Meeting between Pei Wen and the Defendants.
2018-09-10	Lee texted Pei Wen on WhatsApp to ask if she had any questions before their next meeting.
2018-09-12	2nd Meeting between Pei Wen, the Plaintiff, and the Defendants.
2018-09-13	Brendan emailed Pei Wen a copy of the Term Sheet.
2018-09-14	Pei Wen accepted the offer via email.
2018-09-18	3rd Meeting between the Plaintiff, Pei Wen, and the Defendants at a law firm; Plaintiff signed the Share Subscription Agreement.
2018-11-30	ABT shares were issued to the Plaintiff.
2019-07-19	4th Meeting between Pei Wen and Lee.
2019-07-24	Brendan sent Pei Wen a copy of ABT’s unaudited financial statement for the financial year ending 31 December 2018.
2019-07-25	5th Meeting between the Plaintiff, Pei Wen, and the Defendants at a café.
2019-07-26	Pei Wen informed Lee that the Plaintiff wanted to unwind her investment in ABT.
2019-08-14	Pei Wen requested Brendan to provide security for the transaction.
2019-09-13	6th Meeting between Pei Wen and the Defendants.
2020-03-12	Writ was filed.
2021-05-04	Statement of Claim (Amendment No 3) dated.
2021-05-05	Defence Amendment No 2 dated.
2021-05-04	Trial began.
2021-05-07	Trial concluded.
2021-06-28	Defendants’ Closing Submissions dated.
2021-08-23	Judgment reserved.
2021-10-14	Judgment issued.

7. Legal Issues

Fraudulent Misrepresentation
- Outcome: The court found the defendants liable for fraudulent misrepresentation.
- Category: Substantive
- Sub-Issues:
  - False representation of fact
  - Intention to induce reliance
  - Actual reliance
  - Damages suffered
  - Knowledge of falsity
Negligent Misrepresentation
- Outcome: The court found the defendants liable for negligent misrepresentation.
- Category: Substantive
- Sub-Issues:
  - Duty of care
  - Breach of duty of care
  - Causation of damages
  - False representation of fact
  - Actual reliance
Duty of Care
- Outcome: The court found that the defendants owed the plaintiff a duty to take reasonable care in making the representations.
- Category: Substantive
- Sub-Issues:
  - Factual foreseeability
  - Proximity
  - Policy considerations
  - Voluntary assumption of responsibility
  - Reliance

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Fraudulent Misrepresentation
Negligent Misrepresentation

10. Practice Areas

Commercial Litigation
Corporate Law
Investment Disputes

11. Industries

Fitness
Manufacturing

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Wishing Star Ltd v Jurong Town Corp	Court of Appeal	Yes	[2008] 2 SLR(R) 909	Singapore	Cited for the general position at law that a plaintiff would be potentially entitled to a larger amount of damages for an action in fraudulent misrepresentation than for one in negligent misrepresentation.
Panatron Pte Ltd and another v Lee Cheow Lee and another	Court of Appeal	Yes	[2001] 2 SLR(R) 435	Singapore	Cited for the elements of fraudulent representation.
DBS Bank Ltd v Carrier Singapore (Pte) Ltd	Court of Appeal	Yes	[2008] 3 SLR(R) 261	Singapore	Cited to show that proof of the Defendant’s motive in making the Representations is irrelevant to proving the tort.
Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency	Court of Appeal	Yes	[2007] 4 SLR(R) 100	Singapore	Cited for the single test to determine the imposition of a duty of care in all claims arising out of negligence in the context of pure economic loss.
Ma Hongjin v Sim Eng Tong	High Court	Yes	[2021] SGHC 84	Singapore	Cited for the elements to succeed in negligent misrepresentation.
Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric (practising under the name and style of W P Architects)	High Court	Yes	[2007] 1 SLR(R) 853	Singapore	Cited with approval in Spandeck for the threshold inquiry of factual foreseeability.
Council of the Shire of Sutherland v Heyman	High Court of Australia	Yes	(1985) 157 CLR 424	Australia	Cited for the factors expressed by Deane J in Council of the Shire of Sutherland v Heyman (1985) 157 CLR 424 (“Sutherland”), which included the physical, circumstantial, and causal proximity between the parties as well as the twin criteria of voluntary assumption of responsibility and reliance.
Ngiam Kong Seng and another v Lim Chiew Hock	Court of Appeal	Yes	[2008] 3 SLR(R) 674	Singapore	Cited for the court noting in passing that in a situation involving liability for pure economic loss, the twin criteria of voluntary assumption of responsibility and reliance would more appropriately apply.
Straits Advisors Pte Ltd v Michael Deeb (alias Magdi Salah El-Deeb) and others	High Court	Yes	[2014] SGHC 94	Singapore	Compared the facts of the present case with that of Straits Advisors to determine voluntary assumption of responsibility.
Resource Piling Pte Ltd v Geospecs Pte Ltd	High Court	Yes	[2014] 1 SLR 485	Singapore	Cited for the court noting that where pure economic loss is concerned, it may be more practicable to adjudge whether the requisite proximity existed based on the twin criteria of voluntary assumption of responsibility and reliance.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Misrepresentation
Fraud
Negligence
Investment
Alpha Bodytec
Valuation
Profitability
Duty of Care
Reliance
Share Subscription Agreement

15.2 Keywords

Misrepresentation
Fraud
Negligence
Investment
Singapore
High Court
ABT
Alpha Bodytec

16. Subjects

Tort
Misrepresentation
Investment
Company Law

17. Areas of Law

Tort Law
Misrepresentation
Fraud Law
Negligence Law
Investment Law
Company Law