Axis Megalink v Far East Mining: Unilateral Mistake & Misrepresentation in Reverse Takeover
In a suit before the General Division of the High Court of Singapore, Axis Megalink Sdn Bhd (“Axis”) sued Far East Mining Pte Ltd (“FEM”) for breach of contract, seeking payment of an arranger fee of US$2 million under an engagement letter related to a proposed reverse takeover. FEM counterclaimed against Axis, Lee Kien Han, Lim Eng Hoe, and Chong Wan Ling, alleging fraudulent misrepresentation and conspiracy, arguing it was unaware that Lee Kien Han was the beneficial owner of Axis, creating a conflict of interest. The court, Goh Yihan JC, dismissed Axis's claim, finding that FEM did not know Lee was the beneficial owner of Axis and that the engagement letter was void for unilateral mistake. The court awarded FEM S$10,210 in damages for fraudulent misrepresentation.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Axis Megalink's claim against Far East Mining is dismissed; judgment for Far East Mining on counterclaim.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court dismisses Axis Megalink's claim for arranger fees due to unilateral mistake and misrepresentation regarding beneficial ownership.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lee Kien Han | Defendant in Counterclaim | Individual | Judgment against Defendant in Counterclaim | Lost | |
| Axis Megalink Sdn Bhd | Plaintiff, Defendant in Counterclaim | Corporation | Claim Dismissed | Lost | |
| Far East Mining Pte Ltd | Defendant, Plaintiff in Counterclaim | Corporation | Judgment for Plaintiff in Counterclaim | Partial | |
| Lim Eng Hoe | Defendant in Counterclaim | Individual | No Judgment | Neutral | |
| Chong Wan Ling | Defendant in Counterclaim | Individual | Claims Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Goh Yihan | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- Axis sued FEM for US$2 million in arranger fees under an engagement letter.
- FEM claimed it was unaware that Mr. Lee was the beneficial owner of Axis.
- Mr. Lee was also involved in CBL, creating a potential conflict of interest.
- Mr. Lim, FEM's CFO, knew of Mr. Lee's beneficial ownership but did not disclose it.
- FEM entered into the Engagement Letter without knowing Mr. Lee's role.
- The Engagement Letter concerned a proposed reverse takeover of CBL by FEM.
- Mr. Lee extended loans of S$1m and S$270,000 through Axis to CBL.
5. Formal Citations
- Axis Megalink Sdn Bhd v Far East Mining Pte Ltd, Suit No 342 of 2021, [2023] SGHC 243
6. Timeline
| Date | Event |
|---|---|
| Engagement Letter signed | |
| Board meeting held | |
| Site visit to nickel mine began | |
| Site visit to nickel mine ended | |
| Dinner held in Kuala Lumpur | |
| Meeting between Mr. Lee, Mr. Lim, and Mr. Khor | |
| Mr. Lim appointed as Chief Financial Officer | |
| Silkroad Nickel Ltd delisted | |
| Consent letters signed for loan agreements | |
| Consent letters signed for loan agreements |
7. Legal Issues
- Unilateral Mistake
- Outcome: The court held that the Engagement Letter was void for unilateral mistake at common law because FEM did not know that Mr. Lee was the beneficial owner of Axis.
- Category: Substantive
- Related Cases:
- [2020] 2 SLR 20
- [2000] 2 SLR(R) 407
- (1878) 3 App Cas 459
- Fraudulent Misrepresentation
- Outcome: The court found that Mr. Lee and Axis made a fraudulent misrepresentation to FEM by not disclosing that Mr. Lee was the beneficial owner of Axis, and awarded damages to FEM.
- Category: Substantive
- Related Cases:
- [2002] SGHC 222
- [2001] 2 SLR(R) 435
- [2003] 3 SLR(R) 501
- Attribution of Agent's Knowledge
- Outcome: The court held that Mr. Lim's knowledge of Axis's beneficial ownership could not be attributed to FEM due to his breach of fiduciary duty.
- Category: Substantive
- Related Cases:
- [2016] 3 SLR 845
- [2015] 2 WLR 1168
- [2019] 3 WLR 997
- [1928] AC 1
- [2016] 2 SLR 597
- Conspiracy
- Outcome: The court found that FEM's claim for conspiracy (whether by unlawful or lawful means) was not made out.
- Category: Substantive
- Related Cases:
- [2014] 1 SLR 860
- [2008] 1 SLR(R) 80
- Breach of Fiduciary Duty
- Outcome: The court found that Mr. Lim breached his fiduciary duty of loyalty to FEM by concealing and misrepresenting the beneficial ownership of Axis.
- Category: Substantive
- Related Cases:
- [2017] 1 SLR 654
- [2022] 2 SLR 1250
8. Remedies Sought
- Specific Performance
- Monetary Damages
- Rescission of Contract
9. Cause of Actions
- Breach of Contract
- Fraudulent Misrepresentation
- Conspiracy
10. Practice Areas
- Commercial Litigation
11. Industries
- Mining
- Asset Management
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Singapore Swimming Club v Koh Sin Chong Freddie | Court of Appeal | Yes | [2016] 3 SLR 845 | Singapore | Cited for the breach of duty exception regarding attribution of an agent's knowledge to the principal. |
| Bilta (UK) Ltd (in liquidation) and others v Nazir and others (No 2) | UK Supreme Court | Yes | [2015] 2 WLR 1168 | United Kingdom | Cited regarding the attribution of an agent's state of mind to a principal when the agent has defrauded the principal. |
| Singularis Holdings Ltd (in liquidation) v Daiwa Capital Markets Europe Ltd | UK Supreme Court | Yes | [2019] 3 WLR 997 | United Kingdom | Cited regarding the attribution of an agent's state of mind to a principal when the agent has defrauded the principal. |
| JC Houghton and Company v Nothard, Lowe and Wills, Limited | House of Lords | Yes | [1928] AC 1 | United Kingdom | Cited regarding the knowledge of directors acting in infringement of a company's rights cannot be attributed to the company if it is only brought home to the man who himself was the artificer of such infringement. |
| United Overseas Bank Ltd v Lippo Marina Collection Pte Ltd and others | High Court | Yes | [2016] 2 SLR 597 | Singapore | Cited regarding whether the third party is an innocent party or a party complicit in the fraud or who had abetted the agent’s breach of duty. |
| Tan Yok Koon v Tan Choo Suan and another and other appeals | Court of Appeal | Yes | [2017] 1 SLR 654 | Singapore | Cited for the test for finding a fiduciary relationship. |
| Tan Teck Kee v Ratan Kumar Rai | Court of Appeal | Yes | [2022] 2 SLR 1250 | Singapore | Cited for the test for finding a fiduciary relationship. |
| Britestone Pte Ltd v Smith & Associates Far East, Ltd | Court of Appeal | Yes | [2007] 4 SLR(R) 855 | Singapore | Cited for the discussion of legal, evidential and tactical burdens of proof. |
| Quoine Pte Ltd v B2C2 Ltd | Court of Appeal | Yes | [2020] 2 SLR 20 | Singapore | Cited for the elements of unilateral mistake at common law and in equity. |
| Tribune Investment Trust Inc v Soosan Trading Co Ltd | Court of Appeal | Yes | [2000] 2 SLR(R) 407 | Singapore | Cited for the principle that a person cannot make another a contracting party with himself, when he knows or ought to know that the other intends to contract not with him but with another. |
| Cundy v Lindsay | N/A | Yes | (1878) 3 App Cas 459 | United Kingdom | Cited for the principle that there had been no contract between the plaintiff and the defendant. |
| King’s Norton Metal Co (Ltd) v Edridge, Merrett, and Co (Ltd) | English Court of Appeal | Yes | (1897) 14 TLR 98 | United Kingdom | Cited for the principle that where a party enters into a contract with a non-existent entity, then it will generally be held by the courts that that party has contracted with the writer of the correspondence and that there would therefore not be an operative mistake as such. |
| Sudha Natrajan v The Bank of East Asia Ltd | Court of Appeal | Yes | [2017] 1 SLR 141 | Singapore | Cited for the principle that the court can presume against a party who withholds evidence that the withheld evidence would be unfavourable to that party. |
| Broadley Construction Pte Ltd v Alacran Design Pte Ltd | Court of Appeal | Yes | [2018] 2 SLR 110 | Singapore | Cited for the principle that silence can amount to a misrepresentation if there is a duty on the alleged representor to speak or disclose certain facts to the representee. |
| Liu Tsu Kun and another v Tan Eu Jin and others | High Court | Yes | [2017] SGHC 241 | Singapore | Cited for the principle that silence can also constitute a representation if it is part of a factual matrix that includes the defendant making some positive statement or representation, but the silence consists in omitting to mention material facts within that statement or representation. |
| Redgrave v Hurd | N/A | Yes | (1881) 20 Ch D 1 | United Kingdom | Cited for the principle that so long as reliance on the false representation is proven, it does not matter that the representee was negligent in not verifying the representation, notwithstanding the availability of materials for verification. |
| Attwood v Small | House of Lords | No | (1838) 6 Cl & Fin 232 | United Kingdom | Cited for the principle that if it can be shown that the representee relied on his own independently acquired information and/or verification and did not, in any way, rely upon the misrepresentation, the element of inducement would be lacking, and there would thus be no operative misrepresentation. |
| Jurong Town Corp v Wishing Star Ltd | Court of Appeal | Yes | [2005] 3 SLR(R) 283 | Singapore | Cited for the principle that it would not be logical to penalise a party who chose to act carefully but failed to find out the falsity of the representation. |
| Rahmatullah s/o Oli Mohamed v Rohayaton binte Rohani and Others | High Court | Yes | [2002] SGHC 222 | Singapore | Cited for the elements of an actionable 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 misrepresentation. |
| Trans-World (Aluminium) Ltd v Cornelder China (Singapore) | High Court | Yes | [2003] 3 SLR(R) 501 | Singapore | Cited for the principle that fraudulent misrepresentation by silence involves a wilful suppression of material and important facts thereby rendering the statements untrue. |
| 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 a claim for unlawful means conspiracy. |
| Nagase Singapore Pte Ltd v Ching Kai Huat and others | High Court | Yes | [2008] 1 SLR(R) 80 | Singapore | Cited for the principle that the predominant purpose of the alleged conspirators must be to cause damage or injury to the plaintiff in lawful means conspiracy. |
| George Raymond Zage III and another v Ho Chi Kwong and another | Court of Appeal | Yes | [2010] 2 SLR 589 | Singapore | Cited for the elements of a claim in dishonest assistance. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act 1893 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arranger Fee
- Engagement Letter
- Reverse Takeover
- Beneficial Ownership
- Unilateral Mistake
- Fraudulent Misrepresentation
- Fiduciary Duty
- Conflict of Interest
15.2 Keywords
- reverse takeover
- arranger fee
- unilateral mistake
- misrepresentation
- fiduciary duty
- conflict of interest
- agency
- contract law
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Misrepresentation | 80 |
| Contract Law | 75 |
| Mistake | 60 |
| Conspiracy by Unlawful Means | 50 |
| Agency Law | 40 |
| Fiduciary Duties | 35 |
| Estoppel | 30 |
16. Subjects
- Contract Law
- Agency
- Corporate Law
- Civil Procedure