Debenho Pte Ltd v Envy Global Trading Pte Ltd: Stay of Civil Suit Pending Criminal Charges for Fraudulent Misrepresentation
In Debenho Pte Ltd v Envy Global Trading Pte Ltd, the Singapore High Court addressed an application by defendant Ng Yu Zhi to stay a civil suit filed by plaintiffs Debenho Pte Ltd and Low Teck Dee, pending the outcome of related criminal proceedings against him. The plaintiffs' claim is for breach of contract and fraudulent misrepresentation related to a nickel trading investment scheme. The court dismissed the stay application, finding that Ng Yu Zhi had not demonstrated a real danger of prejudice to his defense in the criminal proceedings if the civil suit were to proceed. The court directed the plaintiffs to discontinue their action against Envy Global Trading Pte Ltd.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Registrar’s Appeal dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court addresses stay of civil suit against Ng Yu Zhi pending criminal charges for fraudulent misrepresentation in nickel trading scheme.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Debenho Pte Ltd | Plaintiff | Corporation | Claim not stayed | Neutral | Lim Tahn Lin Alfred, Lye May-Yee Jaime, Kenji Ong Shao Qiang |
| Low Teck Dee | Plaintiff | Individual | Claim not stayed | Neutral | Lim Tahn Lin Alfred, Lye May-Yee Jaime, Kenji Ong Shao Qiang |
| Envy Global Trading Pte Ltd | Defendant | Corporation | Action to be discontinued | Dismissed | Lin Ruizi |
| Ng Yu Zhi | Defendant | Individual | Stay Application Dismissed | Lost | Navin Shanmugaraj Thevar, Rajvinder Singh Chahal, Sheiffa Safi Shirbeeni |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Ang Cheng Hock | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Lim Tahn Lin Alfred | Fullerton Law Chambers LLC |
| Lye May-Yee Jaime | Fullerton Law Chambers LLC |
| Kenji Ong Shao Qiang | Fullerton Law Chambers LLC |
| Lin Ruizi | Shook Lin & Bok LLP |
| Navin Shanmugaraj Thevar | Davinder Singh Chambers LLC |
| Rajvinder Singh Chahal | Davinder Singh Chambers LLC |
| Sheiffa Safi Shirbeeni | Davinder Singh Chambers LLC |
4. Facts
- Debenho and Low Teck Dee invested in EGT's nickel trading scheme.
- Investors placed monies with EAM for the purported purpose of investing in London Metal Exchange grade nickel.
- Plaintiffs entered into contracts with EGT for trade receivables from Raffemet.
- Plaintiffs paid $20,108,944.95 to EGT under the contracts.
- Plaintiffs claim EGT informed them of net profits of approximately 17%.
- Plaintiffs claim the representations about the contracts were false.
- Mr. Ng faces 70 criminal charges, including cheating Mr. Low and Debenho.
5. Formal Citations
- Debenho Pte Ltd and another v Envy Global Trading Pte Ltd and another, Suit No 307 of 2021 (Registrar’s Appeal No 246 of 2021), [2022] SGHC 7
6. Timeline
| Date | Event |
|---|---|
| Envy Asset Management Pte Ltd offered an investment scheme involving physical nickel trading. | |
| Monetary Authority of Singapore placed EAM on the Investor Alert List. | |
| Nickel trading investment scheme offered by EGT instead of EAM. | |
| Plaintiffs entered into contracts with EGT for the purchase of trade receivables. | |
| Plaintiffs entered into contracts with EGT for the purchase of trade receivables. | |
| Mr. Ng was charged with two counts of cheating under s 420 of the Penal Code. | |
| Plaintiffs commenced the present suit. | |
| Mr. Ng was charged with five more similar counts of cheating. | |
| Court ordered EGT to be placed under interim judicial management. | |
| Mr. Ng filed his defence. | |
| The Charges were preferred against Mr Ng. | |
| EGT’s interim judicial managers issued a report. | |
| Mr. Ng made some amendments to his defence. | |
| Mr. Ng applied for the suit as against him to be stayed. | |
| Mr. Ng had been charged with 15 counts of cheating, two counts of forgery and two further counts of fraudulent trading. | |
| AR heard the Stay Application. | |
| EGT was later wound up by the court. | |
| Plaintiffs’ solicitors wrote to court to confirm that the plaintiffs would not be filing any application for leave to continue the suit as against EGT. | |
| AR delivered her decision dismissing the Stay Application. | |
| Hearing before Ang Cheng Hock J. | |
| Judgment reserved. |
7. Legal Issues
- Stay of Civil Proceedings Pending Criminal Proceedings
- Outcome: The court dismissed the application for a stay, finding that the defendant had not demonstrated a real danger of prejudice to his defense in the criminal proceedings.
- Category: Procedural
- Sub-Issues:
- Real danger of prejudice
- Right of silence
- Privilege against self-incrimination
- Fraudulent Misrepresentation
- Outcome: The court did not make a determination on the merits of the fraudulent misrepresentation claim, as the issue was whether to stay the civil proceedings.
- Category: Substantive
- Sub-Issues:
- False representations
- Knowledge of falsity
- Reliance on representations
8. Remedies Sought
- Return of purchase price
- Payment of profits
- Rescission of contracts
- Damages for misrepresentation
9. Cause of Actions
- Breach of Contract
- Fraudulent Misrepresentation
10. Practice Areas
- Commercial Litigation
11. Industries
- Finance
- Commodities Trading
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Rex International Holding Ltd and another v Gulf Hibiscus Ltd | Singapore Court of Appeal | Yes | [2019] 2 SLR 682 | Singapore | Cited for the court's inherent jurisdiction to manage its own internal processes and grant a limited stay of proceedings on case management grounds. |
| BNP Paribas Wealth Management v Jacob Agam and another | Singapore Court of Appeal | Yes | [2017] 3 SLR 27 | Singapore | Cited for the court's inherent jurisdiction to manage its own internal processes and grant a limited stay of proceedings on case management grounds. |
| Smith and wife v Selwyn | King's Bench Division | Yes | [1914] 3 KB 98 | England and Wales | Cited for the historical 'felonious tort rule' which has since been superseded. |
| Wells v Abrahams | Queen's Bench | Yes | (1872) 7 QB 554 | England and Wales | Cited for the historical 'felonious tort rule' which has since been superseded. |
| Velstra Pte Ltd (in liquidation) v Dexia Bank Belgium | High Court | Yes | [2003] 4 SLR(R) 592 | Singapore | Referred to for the discussion of the felonious tort rule and the modern approach to staying civil proceedings. |
| Wonder Heat Pty Ltd v Bishop | Supreme Court of Victoria | Yes | [1960] VR 489 | Australia | Cited for the policy justification behind the felonious tort rule. |
| McMahon v Gould | Supreme Court of New South Wales | Yes | (1982) 7 ACLR 202 | Australia | Cited for the modern approach to staying civil proceedings and the factors to consider. |
| Panton and others v Financial Institutions Services Ltd | Privy Council | Yes | [2003] UKPC 86 | United Kingdom | Cited for the modern approach to staying civil proceedings and the rejection of the felonious tort rule. |
| Jefferson Ltd v Bhetcha | English Court of Appeal | Yes | [1979] 1 WLR 898 | England and Wales | Cited for the principles applicable when deciding whether civil proceedings should be permitted to proceed when there are pending criminal proceedings. |
| Construction, Forestry, Mining and Energy Union and others v Australian Competition and Consumer Commission | Federal Court of Australia | Yes | [2016] FCAFC 97 | Australia | Cited as an example of the application of the McMahon guidelines. |
| Balfron Trustees Ltd v Peterson and others (No 2) | Unknown | Yes | [2001] Lexis Citation 1677 | Unknown | Cited for the principle that it is not sufficient for the defendant to merely point to notional dangers. |
| R v Director of Serious Fraud Office, Ex parte Smith | House of Lords | Yes | [1993] AC 1 | United Kingdom | Cited for identifying the various manifestations of the right of silence. |
| Taw Cheng Kong v Public Prosecutor | Court of Appeal | Yes | [1998] 1 SLR(R) 78 | Singapore | Cited for identifying the various manifestations of the right of silence. |
| In re DPR Futures Ltd | Chancery Division | Yes | [1989] 1 WLR 778 | England and Wales | Cited for the principle that the right of silence does not extend to give the defendant the same extent of protection in concurrent civil proceedings. |
| Law Society of Singapore v Shanmugam Manohar | High Court | Yes | [2021] SGHC 201 | Singapore | Cited for the definition of the privilege against self-incrimination. |
| Riedel-de-Haen AG v Liew Keng Pang | High Court | Yes | [1989] 1 SLR(R) 417 | Singapore | Cited for the application of the privilege against self-incrimination in civil proceedings. |
| Reid v Howard and others | High Court of Australia | Yes | (1995) 131 ALR 609 | Australia | Cited for the application of the privilege against self-incrimination in civil proceedings, specifically regarding interrogatories. |
| VTFL v Clough DIG | England and Wales Court of Appeal (Civil Division) | Yes | [2001] EWCA Civ 1509 | England and Wales | Cited for the principle that requiring the defendant to plead a defence in the civil action would not ordinarily have the effect of undermining his privilege against self-incrimination. |
| State of Queensland v Shaw | Queensland Supreme Court | Yes | [2003] QSC 436 | Australia | Discussed and distinguished regarding the advantage to the prosecution of having a preview of the defendant's case. |
| Craig Robert White v Australian Securities and Investments Commission and others | Queensland Court of Appeal | Yes | [2013] QCA 357 | Australia | Cited for the principle that the defendant must establish a real danger of prejudice to him in the criminal proceedings before the court will grant a stay. |
| Winters v Fogarty (No 2) | Federal Court of Australia | Yes | [2020] FCA 220 | Australia | Cited for the principle that the courts were satisfied of a real danger of prejudice, not simply because of any notional advantage enjoyed by the Prosecution, but because any such advantage stood to undermine the defendant’s right of silence and/or privilege against self-incrimination in the criminal proceedings on the particular facts of the case |
| Qing Zhao and another v The Commissioner of the Australian Federal Police | Supreme Court of Victoria Court of Appeal | Yes | [2014] VSCA 137 | Australia | Cited for the principle that the courts were satisfied of a real danger of prejudice, not simply because of any notional advantage enjoyed by the Prosecution, but because any such advantage stood to undermine the defendant’s right of silence and/or privilege against self-incrimination in the criminal proceedings on the particular facts of the case |
| Adelaide Brighton Cement Ltd v Burgess | Supreme Court of South Australia | Yes | [2018] SASC 134 | Australia | Cited for the principle that the courts were satisfied of a real danger of prejudice, not simply because of any notional advantage enjoyed by the Prosecution, but because any such advantage stood to undermine the defendant’s right of silence and/or privilege against self-incrimination in the criminal proceedings on the particular facts of the case |
| McLachlan v Browne (No 9) | Supreme Court of New South Wales | Yes | [2019] NSWSC 10 | Australia | Cited for the principle that the courts were satisfied of a real danger of prejudice, not simply because of any notional advantage enjoyed by the Prosecution, but because any such advantage stood to undermine the defendant’s right of silence and/or privilege against self-incrimination in the criminal proceedings on the particular facts of the case |
| Re AWB Ltd (No 1) | Unknown | Yes | (2008) 252 ALR 566 | Australia | Cited as a case where the Australian courts considered that the McMahon guidelines do not sufficiently give effect to a defendant’s right of silence and privilege against self-incrimination. |
| Websyte Corporation Pty Ltd v Alexander (No 2) | Federal Court of Australia | Yes | [2012] FCA 562 | Australia | Distinguished regarding the circumstances under which the continuance of a civil action poses a real danger of prejudice to the defendants in related criminal proceedings. |
| Hamilton Island Enterprises Ltd and another v Johnston | Queensland Supreme Court | Yes | [2010] QSC 38 | Australia | Cited for the argument that a stay should be granted until the defendant receives full particulars of the charges against him. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Penal Code (Cap 224, 2008 Rev Ed) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Criminal Procedure Code 2010 (2020 Rev Ed) | Singapore |
| Evidence Act 1893 (2020 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Nickel trading investment scheme
- Trade receivables
- London Metal Exchange
- Corresponding Contracts
- Fraudulent misrepresentation
- Stay of proceedings
- Right of silence
- Privilege against self-incrimination
- Criminal case disclosure process
- Case for the Prosecution
- Case for the Defence
15.2 Keywords
- Stay of proceedings
- Criminal proceedings
- Civil suit
- Fraudulent misrepresentation
- Nickel trading
- Singapore High Court
16. Subjects
- Civil Procedure
- Criminal Law
- Fraud
- Securities Law
17. Areas of Law
- Civil Procedure
- Stay of Proceedings
- Fraudulent Misrepresentation