1 The Plaintiffs in this suit are property investors who signed two sale and purchase agreements (the “two SPAs”) with Eco House Brazil Construcoes Ltda (“Ecohouse Brazil”), a company incorporated in Brazil. The Plaintiffs made two separate payments totalling S$598,000 under the terms of the two SPAs. The two SPAs stated that, upon completion, Ecohouse Brazil would sell and the Plaintiffs would buy various residential freehold units in two different residential developments in Brazil. The two SPAs also stated that Ecohouse Brazil would undertake to procure buyers for the Plaintiffs’ residential freehold units within 12 months from the date of the signing of the two SPAs. Further, the Plaintiffs would earn a 20% return of the purchase price within 14 days of the 12-month anniversary of the date of the two SPAs. The two payments totalling S$598,000 were made by the Plaintiffs in Singapore into an escrow account of a law firm in the United Kingdom (“UK”) following the signing of the two SPAs.

2 Towards the 12-month anniversary of the date of the two SPAs, it became apparent that Ecohouse Brazil was unable to meet its contractual obligations under the two SPAs. Ecohouse Brazil persuaded the Plaintiffs to sign two deeds of modification granting a 12-month extension to Ecohouse Brazil upon which an additional payment of 20% of the capital investment would be made to the Plaintiffs, ie, a sum totalling S$119,600. However, Ecohouse Brazil ultimately failed to deliver the residential freehold units as contracted in the two SPAs. Ecohouse Brazil also failed to deliver the 20% return of the purchase price to the Plaintiffs as contracted in the two SPAs. The Plaintiffs claim that the investments were fraudulent and Ecohouse Brazil did not, at any time, intend to honour its obligations under the two SPAs.

3 The Plaintiffs now seek to claim from the First to Sixth Defendants (collectively referred to as the “Defendants”) for the losses which they had incurred. The thrust of the Plaintiffs’ claim against the Defendants lies against the First Defendant who had introduced the Ecohouse Brazil developments to the Plaintiffs at two separate presentations conducted by the First Defendant and a Brazilian director of Ecohouse Brazil. Subsequently, the First Defendant sent emails to the Second Plaintiff and the other investors on the Ecohouse Brazil developments. The Plaintiffs claim that various representations were made by the First and Second Defendants, namely that the Ecohouse Brazil developments were backed and supported by the Brazilian government, that extensive and comprehensive due diligence had been done by the First and Second Defendants, that the moneys of the Plaintiffs would be kept safe in an escrow account and that the Plaintiffs would earn the promised 20% return. The Plaintiffs allege that these representations made by the First and Second Defendants were false at the time they were made. Accordingly, the Plaintiffs pursue various heads of claims against the Defendants, namely fraudulent misrepresentation, misrepresentation under the Misrepresentation Act (Cap 390, 1994 Rev Ed) (the “MRA”), negligent misrepresentation, breaches of collateral contracts, loss of opportunity, constructive trusts and losses arising from the breach of duties under the Estate Agents Act (Cap 95A, 2011 Rev Ed) (the “Estate Agents Act”).

4 In defence, the Defendants deny making such representations to the Plaintiffs. Further, the Defendants allege that the representations were not false. They claim that they had paid a six-figure sum to engage a Singapore lawyer to conduct due diligence on the Ecohouse Brazil developments. The First and Second Defendants also state that they had bought nine residential freehold units in the Casa Nova Project, which was one of the Ecohouse Brazil developments. Similarly, they had signed a sale and purchase agreement with Ecohouse Brazil and had also suffered losses as a result. Therefore, they deny that they should be held liable for the losses suffered by the Plaintiffs.

5 The First Plaintiff is Haw Wan Sin David (“David”). The Second Plaintiff is David’s wife, Yee Ai Moi Cindy (“Cindy”).

6 The First Defendant is Kwek Siang Ling Wendy (“Wendy”). The Second Defendant is Poh Wei Leong (“Joey”). At the material time, Wendy and Joey were married to each other. They were, however, divorced on 24 August 2018.

7 The Third Defendant is WK Events Pte Ltd (“WK Events”), an exempt private company which was incorporated in Singapore on 1 June 2012. At the material time, Wendy was a director and shareholder of WK Events, and Joey was a shareholder of WK Events. Joey was also a director of WK Events until around 2016. WK Events was struck off the Register of Companies (the “Register”) on 4 May 2020. ¹

8 The Fourth Defendant is WK Investment Network Pte Ltd (“WKIN”), an exempt private company which was incorporated in Singapore on 27 February 2012. At the material time, Wendy was a director and shareholder of WKIN, and Joey was a shareholder of WKIN. Joey was also a director of WKIN until around 2016. ²

9 The Fifth Defendant is Ecohouse Developments Asia Pacific Pte Ltd (“Ecohouse Asia Pacific”), a private company which was incorporated in Singapore on 27 July 2012. Ecohouse Asia Pacific was a joint venture (“JV”) set up by Ecohouse Singapore Pte Ltd (“Ecohouse Singapore”), which was incorporated for the purpose of the JV, and Ecohouse Brazil. At the material time, Joey was the managing director of Ecohouse Asia Pacific. The other director of Ecohouse Asia Pacific was Charles Valentine Fraser-Macnamara (“Charles”). Charles was the nominee of Anthony Jon Domingo Armstrong-Emery (“Anthony”). Anthony was a director of Ecohouse Brazil.

10 Charles was a solicitor in the UK at the material time. He was subsequently struck off the roll in the UK following a disciplinary tribunal’s decision on his conduct in relation to the Ecohouse Brazil developments. The shareholders of Ecohouse Asia Pacific were Charles and Ecohouse Singapore. Ecohouse Asia Pacific was struck off the Register on 23 September 2020. ³

11 The Sixth Defendant is Ecohouse Singapore, an exempt private company which was incorporated in Singapore on 26 July 2012 (see [9] above). At the material time, Joey was the sole director and shareholder of Ecohouse Singapore. Ecohouse Singapore was struck off the Register on 23 September 2020. ⁴

12 For completeness, there was a Seventh Defendant, Ecohouse Developments Ltd (“Ecohouse UK”), a private limited company which was incorporated on 28 May 2010 in the UK. Ecohouse UK went into liquidation on 15 January 2015 and was dissolved on or about 14 February 2018. ⁵ The Plaintiffs did not serve the writ on Ecohouse UK. The Plaintiffs wholly discontinued the action against Ecohouse UK on 8 May 2019. ⁶ This judgment, therefore, only focuses on the Plaintiffs’ case against the Defendants.

13 Wendy was a property investor and she organised seminars where speakers would give talks on property investment. From 2009, Wendy conducted property investment seminars under the auspices of a company called Executive Directions Pte Ltd (“Executive Directions”). Wendy was a director of Executive Directions together with one Jerome Tan (“Jerome”). ⁷

14 Later, the relationship between Wendy and Jerome soured. ⁸ Wendy left Executive Directions and incorporated WKIN with Joey in February 2012. Wendy then purportedly received advice from a mentor that she should not use the words “Investment Network” in her company name because it would attract unnecessary scrutiny from government agencies since the intention for the company was to organise talks and events. Therefore, she incorporated WK Events in June 2012. ⁹

15 WK Events was, thereafter, used to organise seminars conducted by Wendy. At these seminars, Wendy would share her experiences on investing in properties, including properties outside of Singapore. ¹⁰

16 When Wendy left Executive Directions and started her own companies, namely WK Events and WKIN, Wendy also created a WK Investment Network group which was hosted on the Yahoo platform (the “WK Investment Network Yahoo Group”). The participants of Wendy’s property investment seminars, including past participants of seminars conducted under the auspices of Executive Directions, were invited to the WK Investment Network Yahoo Group. ¹¹

17 According to Wendy, the WK Investment Network Yahoo Group was set up for sharing information and networking purposes. Further, according to Wendy, anyone in the WK Investment Network Yahoo Group could share property investment opportunities and could also invite members of the group to events or provide market updates. ¹²

18 Sometime in October 2011, Cindy came across an advertisement offering a free one-hour seminar on property investment conducted by Wendy under the auspices of Executive Directions. ¹³ Cindy subsequently attended the seminar in or around October 2011. ¹⁴

19 Thereafter, Cindy signed up for a paid two-day training event conducted by Wendy under the auspices of Executive Directions. Cindy paid S$2,995 to Executive Directions and attended the two-day training event sometime in November 2011. ¹⁵

20 Subsequently, from June 2012 onwards, after Wendy left Executive Directions, she conducted seminars organised by WKIN or WK Events. ¹⁶ It is undisputed that Cindy was also a member of the WK Investment Network Yahoo Group.

21 On 10 April 2012, Wendy extended an invitation to various individuals, including Cindy, to attend a presentation on an investment opportunity for a project to refurbish and convert historical buildings in Berlin, Germany into residential properties (the “Berlin Project”). ¹⁷

22 Subsequently, Cindy attended a presentation on the Berlin Project conducted by Wendy. At the presentation, Wendy stated that she had secured an opportunity and structured the investment so that investors could invest a minimum of S$10,000 with a 12% return to be earned within 12 months. ¹⁸

23 Following Wendy’s presentation, the Plaintiffs invested a sum of S$300,000. The Plaintiffs received their principal sum and the 12% return when the amounts were due. ¹⁹

24 On 12 July 2012, Wendy extended an invitation to various individuals, including Cindy, to attend a presentation on an investment opportunity for a purported social housing project called “Casa Nova Residencial” in Brazil (the “Casa Nova Project”). The developer of the Casa Nova Project was Ecohouse Brazil. ²⁰

25 On or about 30 July 2012, the Plaintiffs attended a presentation of the Casa Nova Project (the “30 July 2012 Presentation”) conducted by Wendy. The Casa Nova Project was marketed as a project by Ecohouse Brazil under the Brazilian government’s social housing programme, “Minha Casa, Minha Vida” (“MCMV”), which means “my house, my life”. ²¹

26 Following the 30 July 2012 Presentation, Wendy sent an email on 7 August 2012 to the investors, including Cindy (the “7 August 2012 email”). The heading of the email was “IMPORTANT INFO: - CasaNova Residencial – Presentation slides attached”. PowerPoint presentation slides on the Casa Nova Project (the “Casa Nova Presentation Slides”) were attached to the 7 August 2012 email. ²²

27 On 13 August 2012, Wendy sent another email to the investors, including Cindy (the “13 August 2012 email”). The heading of the email was “FW: Pls read – Clarification on ‘investing in far away places’”. ²³

28 On 1 September 2012, the Plaintiffs entered into a sale and purchase agreement with Ecohouse Brazil in respect of the Casa Nova Project (the “Casa Nova SPA”) for the purchase of five residential units. ²⁴ Under the terms of the Casa Nova SPA, the purchase price was to be paid to Sanders & Co, a law firm in the UK which was the appointed escrow agent. The Plaintiffs paid a sum of S$230,000 by way of a cheque for the purchase of five residential units. ²⁵ The Plaintiffs also signed an escrow agreement with Sanders & Co and Ecohouse Brazil dated 1 September 2012 (the “Casa Nova Escrow Agreement”). ²⁶

29 Under the terms of the Casa Nova SPA, Ecohouse Brazil agreed to sell and the Plaintiffs agreed to buy five residential freehold units in the Casa Nova Project in Brazil. ²⁷ The Casa Nova SPA also stated that Ecohouse Brazil undertook to procure buyers for the Plaintiffs’ units within 12 months from the signing of the Casa Nova SPA. The Plaintiffs would receive a 20% return of the purchase price within 14 days of the 12-month anniversary of the date of the Casa Nova SPA, ie, S$46,000. ²⁸

30 The Plaintiffs subsequently received a document titled “Declaracao” dated 18 September 2012 setting out the lot numbers of the residential units in the Casa Nova Project which were purchased by the Plaintiffs. ²⁹

31 On 3 October 2012, Wendy sent an email to the investors, including Cindy (the “3 October 2012 email”). The heading of the email was “Wendy Kwek - 20percent Assured Returns plus PROFIT BONUS! - Ecohouse Developments”. In the email, Wendy extended an invitation to various individuals, including Cindy, to attend a presentation on an investment opportunity for a second purported social housing project called “Residencial Bosque” in Brazil (the “Bosque Project”). The developer of the Bosque Project was also Ecohouse Brazil. ³⁰

32 On or about 6 October 2012, Cindy attended a presentation of the Bosque Project (the “6 October 2012 Presentation”) conducted by Wendy. The Bosque Project was another residential project carried out by Ecohouse Brazil under the Brazilian government’s social housing programme, MCMV. ³¹

33 On 3 December 2012, the Plaintiffs entered into a sale and purchase agreement with Ecohouse Brazil in respect of the Bosque Project (the “Bosque SPA”) for the purchase of eight residential units. ³² Under the terms of the Bosque SPA, the purchase price was paid to Sanders & Co, the appointed escrow agent. The Plaintiffs paid a sum of S$368,000 by way of a cheque for the eight residential units. ³³ Similarly, the Plaintiffs also signed an escrow agreement with Sanders & Co and Ecohouse Brazil dated 3 December 2012 (the “Bosque Escrow Agreement”). ³⁴

34 Under the terms of the Bosque SPA, Ecohouse Brazil agreed to sell and the Plaintiffs agreed to buy eight residential freehold units in the Bosque Project in Brazil. ³⁵ The Bosque SPA also stated that Ecohouse Brazil undertook to procure buyers for the Plaintiffs’ units within 12 months from the signing of the Bosque SPA. The Plaintiffs would receive a 20% return of the purchase price within 14 days of the 12-month anniversary of the date of the Bosque SPA, ie, S$73,600. ³⁶

35 The Plaintiffs subsequently received a document titled “Declaracao” simply dated 2012 setting out the lot numbers of the residential units in the Bosque Project which were purchased by the Plaintiffs. ³⁷

36 Sometime from 16 August 2013 onwards, the Plaintiffs received various emails informing them of delays in the construction of the two developments, namely the Casa Nova Project and the Bosque Project. The Plaintiffs were thereafter offered various options, including an option to sign the deeds of modification granting Ecohouse Brazil a 12-month extension to fulfil its contractual obligations under the Casa Nova SPA and the Bosque SPA. In consideration for granting Ecohouse Brazil a 12-month extension, the Plaintiffs were offered an additional interest amounting to 20% of the purchase price which was paid by the Plaintiffs when they signed the Casa Nova SPA and the Bosque SPA. This additional interest was to be paid within 14 days of the execution of the deeds. ³⁸

37 On or around 6 November 2013, the Plaintiffs signed two deeds of modification (the “Deeds of Modification”) with Ecohouse Brazil for the Casa Nova Project and the Bosque Project. Under the terms of the Deeds of Modification, the Plaintiffs agreed to extend the agreement period of the Casa Nova SPA and the Bosque SPA by 12 months. The Plaintiffs received the additional interest amounting to 20% of the purchase price, ie, a sum totalling S$119,600 comprising S$46,000 (for the Casa Nova Project) and S$73,600 (for the Bosque Project), after signing the Deeds of Modification. ³⁹

38 Ecohouse Brazil ultimately failed to fulfil its contractual obligations under the Casa Nova SPA and the Bosque SPA despite the 12-month extension granted to Ecohouse Brazil under the Deeds of Modification.

39 Thereafter, the Plaintiffs and the other investors who had purchased units in the Casa Nova Project and the Bosque Project from Ecohouse Brazil engaged lawyers in Singapore to consider pursuing a claim against Sanders & Co in the UK. However, this was abandoned as the Plaintiffs and the other investors were unable to secure third-party financing for the purposes of a claim against Sanders & Co. ⁴⁰

40 The Plaintiffs, thereafter, engaged a property lawyer in Brazil, one Fernando Guo Tao (“Fernando”), to purportedly review the Casa Nova SPA and the Bosque SPA and to provide his legal opinion. A legal opinion was rendered by Fernando dated 12 December 2015 (“Fernando’s 12 December 2015 Legal Opinion”), with a translation of this opinion thereafter obtained. ⁴¹

41 I pause here to explain the relationship between the various entities bearing the name “Ecohouse”. Ecohouse Brazil and Ecohouse UK were both entities under the larger Ecohouse Group controlled by Anthony. Ecohouse Brazil was responsible for the construction of the Casa Nova Project and the Bosque Project. Ecohouse UK was responsible for the marketing of the Casa Nova Project and the Bosque Project. As will be seen from the documentary evidence raised during the trial, however, the various entities bearing the name “Ecohouse” were often simply referred to as “Ecohouse Developments”. In much of the documentary evidence, the term “Ecohouse Developments” was used when referring to the developer of the Casa Nova Project and the Bosque Project, ie, Ecohouse Brazil.

42 In order to market the Casa Nova Project and the Bosque Project in Asia Pacific, Anthony suggested to Joey to set up a JV company, Ecohouse Asia Pacific. The shareholders of Ecohouse Asia Pacific were as follows: ⁴²

(a) Charles, who was Anthony’s appointed nominee; and

(b) Ecohouse Singapore, which was an exempt private company incorporated by Joey to participate in the JV, ie, Ecohouse Asia Pacific.

43 Under the terms of the JV marketing and sales agreement for Ecohouse Asia Pacific dated 1 August 2012 (the “JV Agreement”), Wendy was listed as a trainer for Ecohouse Asia Pacific. ⁴³

44 A diagram summarising the relationship between the various entities bearing the “Ecohouse” name and the key persons involved in each entity was prepared jointly by the parties and is annexed to this judgment.

45 The Plaintiffs claim against the Defendants for the amounts of S$598,000 and S$119,600, being the respective amounts paid under the Casa Nova SPA and the Bosque SPA for the purchase of residential units in the Casa Nova Project and the Bosque Project as well as the 20% return of the investments they were meant to receive under the Casa Nova SPA and the Bosque SPA. The Plaintiffs also claim interest at the rate of 10% per annum. Further, the Plaintiffs seek damages as well as orders in relation to their various claims. ⁴⁴

46 The Plaintiffs make various heads of claims against the Defendants. I shall briefly summarise each of these in turn.

47 The Plaintiffs claim that Wendy made four representations (collectively referred to as the “Four Representations”) in relation to the Casa Nova Project which were untrue:

(a) The first representation was that the Casa Nova Project was a safe investment as it was approved and supported by the Brazilian government as a social housing development (the “Brazilian Government Representation”). ⁴⁵

(b) The second representation was that the moneys invested by the Plaintiffs in the Casa Nova Project would be deposited into an escrow account maintained by Sanders & Co, and the moneys would only be disbursed for the building of the invested units (the “Escrow Representation”). ⁴⁶

(c) The third representation was that: (i) Wendy had done all that was possible and had invested a six-figure sum on due diligence checks to ensure that the Casa Nova Project was government-approved and the investment was safe; (ii) Joey and the Ecohouse Group had spent a year in Brazil studying the Casa Nova Project to understand the background of the developer, they had met the Vice Governor and one of the heads of Caixa Economica Federal Bank (“Caixa Bank”), made preparations, including getting the proper approvals, and ensured that everything was in order; ⁴⁷ and (iii) Phyllis Fong (“Fong”) was a Singapore lawyer who was engaged to read through all the documents, and Fong had studied, vetted, and read through the sale and purchase agreements and escrow agreements, and had tightened the terms in the investors’ favour (the “Due Diligence Representation”). ⁴⁸

(d) The fourth representation was that investors in the Casa Nova Project would earn a 20% return of their investment within one year (the “Investment Return Representation”). ⁴⁹

48 The Plaintiffs allege that the Four Representations in relation to the Casa Nova Project were made by Wendy at the 30 July 2012 Presentation. These representations were then repeated by Wendy in the 7 August 2012 email and 13 August 2012 email which were sent to Cindy and the other investors. ⁵⁰

49  The Plaintiffs state that Joey had endorsed the Due Diligence Representation at the 30 July 2012 Presentation. In particular, the Plaintiffs allege that, at the 30 July 2012 Presentation, Joey had smiled and nodded his head in acknowledgment when Wendy mentioned that Joey had gone to Brazil to carry out due diligence for the Casa Nova Project. This, according to the Plaintiffs, amounted to Joey affirming the truth of the Due Diligence Representation. ⁵¹

50 The Plaintiffs also allege that, at the 6 October 2012 Presentation, Wendy repeated the Brazilian Government Representation, the Escrow Representation, the Due Diligence Representation and the Investment Return Representation, though in the context of the Bosque Project. ⁵²

51 The Plaintiffs allege that the Four Representations were false and that Wendy and Joey had knowledge of the falsehood of the Four Representations or, alternatively, had no belief in the truth of the Four Representations or were reckless as to the truth of the Four Representations. ⁵³ The Plaintiffs assert as follows:

(a) In relation to the Brazilian Government Representation, the Plaintiffs state that the Casa Nova Project and the Bosque Project were not approved and supported by the Brazilian government as social housing projects. The Plaintiffs allege that Wendy had relied simply on the assertion of Anthony, who had a vested interest since he stood to gain from the investors’ purchase of residential units in the Casa Nova Project and the Bosque Project. Further, Wendy and Joey had failed to carry out independent due diligence but had merely relied on the due diligence reports commissioned by Ecohouse Brazil, the developer. The Plaintiffs state that Wendy was reckless as to the truth of the Brazilian Government Representation. ⁵⁴

(b) In relation to the Escrow Representation, the Plaintiffs state that the moneys in the escrow account maintained by Sanders & Co were disbursed even though there was little or no progress in the construction of the Casa Nova Project and the Bosque Project. The Plaintiffs state that Wendy knew that the Escrow Representation was false. ⁵⁵

(c) In relation to the Due Diligence Representation, the Plaintiffs state that no proper due diligence was done by Wendy and Joey on the Casa Nova Project, the Bosque Project and the Ecohouse Group. Rather, the Plaintiffs state that the due diligence reports obtained by Wendy and Joey were commissioned by Ecohouse Brazil, and that they had not conducted their own due diligence at the time of the Due Diligence Representation. Therefore, the Plaintiffs state that Wendy and Joey had knowledge that the Due Diligence Representation was false. ⁵⁶

(d) In relation to the Investment Return Representation, the Plaintiffs state that the representation was false as the investors in the Casa Nova Project and the Bosque Project, including the Plaintiffs, did not receive a 20% return of their investments within one year. The Plaintiffs assert that Wendy was reckless as to the truth of the Investment Return Representation, as she failed to do any due diligence on the Casa Nova Project and the Bosque Project which would have otherwise revealed that Ecohouse Brazil “did not own any of the land in Brazil that was mooted for development”. ⁵⁷

52 The Plaintiffs submit that Wendy and Joey intended for the Plaintiffs to rely on the Four Representations which were false when investing in the Casa Nova Project and the Bosque Project. In relation to the Casa Nova Project, they allege that the Four Representations were first made at the 30 July 2012 Presentation to convince the investors and the Plaintiffs to invest in the Casa Nova Project. Thereafter, the Four Representations were repeated in the 13 August 2012 email sent by Wendy to allay the worries of the investors in investing in overseas projects such as the Casa Nova Project. In relation to the Bosque Project, the Plaintiffs allege that the Four Representations were made at the 6 October 2012 Presentation to convince the investors and the Plaintiffs to invest in the Bosque Project. ⁵⁸

53 The Plaintiffs state that they relied on the Four Representations when they signed the Casa Nova SPA and the Bosque SPA. Consequently, the Plaintiffs suffered losses when they failed to get back their invested amount and receive the 20% return they were entitled to under the Casa Nova SPA and the Bosque SPA. ⁵⁹

54 The Plaintiffs also rely on s 2 of the MRA against the Defendants for the misrepresentations. ⁶⁰

55 The Plaintiffs claim that Wendy and Joey owed them a duty of care. Applying the test in Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100 (“Spandeck”), the Plaintiffs state that it was evidently foreseeable that the Plaintiffs would suffer losses if they invested moneys into a scheme based on the Four Representations made by Wendy and Joey which turned out to be false. ⁶¹

56 The Plaintiffs state that there was sufficient legal proximity between the Plaintiffs and the Defendants. First, there was physical and circumstantial proximity, given the nature in which the Four Representations were made at the 30 July 2012 Presentation and the 6 October 2012 Presentation, as well as in the 7 August 2012 email and the 13 August 2012 email. Second, there was causal proximity given the direct causal link between the making of the Four Representations and the Plaintiffs’ decision to sign the Casa Nova SPA and the Bosque SPA. Third, there was a voluntary assumption of responsibility by Wendy who accepted moneys from Cindy as payment for entry to Wendy’s investment network. Wendy and Joey also held themselves out as investment experts. ⁶²

57 The Plaintiffs state that there are no public policy considerations militating against the imposition of a duty of care upon Wendy and Joey. ⁶³

58 The proper standard of care, according to the Plaintiffs, is that of a reasonably competent and prudent investment expert, which was what Wendy and Joey held themselves out to be. A reasonably competent and prudent investment expert would have ensured that he had obtained accurate facts about investments before advertising the investments and he also had to take care not to make false statements about the investments. The Plaintiffs state that, in making the Four Representations, Wendy and Joey breached their duty of care by failing to obtain independent due diligence on the Casa Nova Project and the Bosque Project. Therefore, Wendy and Joey had no proper way of knowing whether the Four Representations were true. ⁶⁴

59 The Plaintiffs state that, but for the Four Representations, the Plaintiffs would not have signed the Casa Nova SPA and the Bosque SPA. ⁶⁵

60 The Plaintiffs state that the losses they have suffered were foreseeable and cannot be said to be remote. ⁶⁶

61 In the alternative, the Plaintiffs submit that WKIN owed them a duty of care and that WKIN had breached its duty of care which led to the Plaintiffs suffering losses. ⁶⁷

62 The Plaintiffs further state that there were two collateral contracts (hereinafter referred to as the “First Collateral Contract” and the “Second Collateral Contract”) between the Plaintiffs and Wendy. Wendy had breached the two collateral contracts. This is even though Wendy was not a party to the Casa Nova SPA and the Bosque SPA signed by the Plaintiffs.

63 The Plaintiffs submit that the First Collateral Contract arose between Wendy and the Plaintiffs as a result of the promise made by Wendy in the 13 August 2012 email that she had done detailed due diligence on the Casa Nova Project. It was this promise that led the Plaintiffs to enter into the Casa Nova SPA with Ecohouse Brazil. The Plaintiffs allege that Wendy breached the First Collateral Contract by wilfully and recklessly failing to do proper due diligence on the Casa Nova Project. The Plaintiffs allege that as a result of signing the Casa Nova SPA, the Plaintiffs were deprived of the opportunity to make profits from alternative projects which they could have invested in. ⁶⁸

64 Further, the Plaintiffs submit that the Second Collateral Contract arose between Wendy and the Plaintiffs following a meeting between Wendy, Cindy and about 50 other investors of the Casa Nova Project and the Bosque Project on 8 November 2013 (the “8 November 2013 Meeting”). I note that while the Plaintiffs’ Statement of Claim states that the meeting took place on 2 December 2013, ⁶⁹ Cindy’s affidavit refers to a meeting which took place on 8 November 2013. At the 8 November 2013 Meeting, Wendy had purportedly assured the investors present that, if they did not demand for the return of their investments, Wendy would “fight for the investors” and “stand with the investors to see that they get back their investments and promised returns”. The Plaintiffs’ case is that they relied on Wendy’s promise at the 8 November 2013 Meeting and did not demand for the return of the amounts they invested in the Casa Nova Project and the Bosque Project. The Plaintiffs state that Wendy breached the Second Collateral Contract by failing to fulfil her promise. ⁷⁰

65 The Plaintiffs also submit that the Defendants are liable to the Plaintiffs on the grounds of knowing receipt and dishonest assistance.

66 In relation to the claim of knowing receipt, the Plaintiffs argue that the Casa Nova Project and the Bosque Project were fraudulent schemes since Ecohouse Brazil did not, at any time, intend to complete the projects or, in the alternative, fulfil its promises to complete the development of the Casa Nova Project and the Bosque Project within one year. The Plaintiffs contend that Ecohouse Brazil and Sanders & Co misapplied the moneys invested by the Plaintiffs, thereby breaching the fiduciary duties which they owed to the Plaintiffs. The Plaintiffs state that the Defendants received monetary gains which were traceable to the fraudulent schemes of Ecohouse Brazil. Further, according to the Plaintiffs, Wendy and Joey had knowledge, whether actual, constructive or implied, that the projects were fraudulent. As a result, they had knowingly received moneys which are traceable to the Plaintiffs’ moneys. ⁷¹

67 In relation to the claim of dishonest assistance, the Plaintiffs state that the Defendants, and in particular Wendy, assisted in the promotion of the Casa Nova Project and the Bosque Project which turned out to be fraudulent. Further, the Plaintiffs allege that Wendy and Joey had wilfully and recklessly failed to make all necessary inquiries that an honest and reasonable person would have made before marketing the Casa Nova Project and the Bosque Project. Therefore, the Plaintiffs claim that the Defendants had dishonestly assisted Ecohouse Brazil in its fraudulent schemes. ⁷²

68 The Plaintiffs also seek to hold the Defendants liable for breach of statutory duty. According to the Plaintiffs, ss 28 and 29 of the Estate Agents Act require anyone marketing foreign or local properties to be licensed as real estate agents or real estate salespersons. The Defendants, by marketing the Casa Nova Project and the Bosque Project whilst not being licensed, had breached the requirements under the Estate Agents Act.

69 Whilst breaches of ss 28 and 29 of the Estate Agents Act constitute criminal offences punishable by fines, imprisonment or both under the Estate Agents Act, the Plaintiffs submit that there ought to be a private right of action available to them arising from the Defendants’ breach of the Estate Agents Act. The Plaintiffs argue that the statutory duty was imposed to protect a limited class of the public, namely purchasers in Singapore who buy foreign properties, by putting in place a licensing regime. Therefore, the Plaintiffs argue that Parliament intended to confer on members of that class a private right of action for breach of that duty. ⁷³

70 According to Wendy, she had been asked by Joey in early 2012 to market the Casa Nova Project on behalf of Ecohouse Asia Pacific to members of the WK Investment Network Yahoo Group. She agreed to help market the Casa Nova Project through WK Events. Under the auspices of WK Events, she organised the 30 July 2012 Presentation. ⁷⁴

71 Wendy claims that her role at the 30 July 2012 Presentation was primarily to address members of the WK Investment Network Yahoo Group and introduce them to Anthony. Wendy states that she spoke generally about investing in overseas projects. She also spoke on the topic of risks and returns. However, Wendy denies making the Four Representations at the 30 July 2012 Presentation. She states that it was Anthony who spoke about the Casa Nova Project. ⁷⁵

72 In relation to the 7 August 2012 email and the 13 August 2012 email which the Plaintiffs rely on to support their allegations that Wendy had made the Four Representations, Wendy’s defence is as follows:

(a) Wendy alleges that she did not make the Brazilian Government Representation in the 7 August 2012 email. She states that the main text of the 7 August 2012 email does not contain the Brazilian Government Representation. In relation to the Casa Nova Presentation Slides which were attached to the 7 August 2012 email, Wendy explains that the Casa Nova Presentation Slides were prepared by Ecohouse UK and were used only by Anthony during the 30 July 2012 Presentation. Wendy had simply forwarded the Casa Nova Presentation Slides in the 7 August 2012 email. ⁷⁶

(b) In relation to the 13 August 2012 email, Wendy admits that there were representations made in the 13 August 2012 email. However, Wendy submits that steps were taken as she had stated in the 13 August 2012 email: ⁷⁷

(i) In relation to the Due Diligence Representation, Wendy states that Joey did visit Brazil in early 2012 to see the site of the Casa Nova Project as well as the site of a previous Ecohouse Brazil project called Arco Iris (the “Arco Iris Project”). ⁷⁸ Wendy states that Joey also met with one of the heads of Caixa Bank, a bank owned by the Brazilian government. ⁷⁹ Further, a due diligence report from a Brazilian lawyer, Andre Elali (“Elali”), dated 5 September 2012 (“Elali’s Casa Nova Due Diligence Report”) was obtained as part of the due diligence exercise. ⁸⁰ Wendy also submits that a Singapore lawyer, ie, Fong, was engaged to do due diligence. Fong was paid a six-figure fee of over S$100,000 to review the documents for the purchase and stakeholding of funds for the Casa Nova Project. ⁸¹

(ii) In relation to the Escrow Representation, Wendy states that there was, in fact, an escrow agent, Sanders & Co. Further, the Plaintiffs did sign the Casa Nova Escrow Agreement. Wendy also refers to a document obtained by Fong confirming that Sanders & Co was covered by professional indemnity insurance of £2,000,000. ⁸²

73 Wendy states that it is unclear what representations are alleged by the Plaintiffs in relation to the Bosque Project. ⁸³

74 Wendy further mentions that she and Joey had also bought nine residential units in the Casa Nova Project and signed a sale and purchase agreement with Ecohouse Brazil. Their total investment was a sum of S$414,000 which they were also unable to recover. ⁸⁴

75 Wendy alleges that the Plaintiffs were not novice investors. Prior to investing in the Casa Nova Project and the Bosque Project, the Plaintiffs had invested in the Berlin Project as well as invested in another project in New Zealand through a different marketing agent (the “Plaintiffs’ New Zealand Investment”). Wendy also highlights that the Plaintiffs themselves are registered property agents. Therefore, the Plaintiffs should have known of the potential risks and pitfalls of investments with high returns. ⁸⁵

76 Wendy also denies that the First Collateral Contract and the Second Collateral Contract existed. In particular, Wendy denies making any promises at the 8 November 2013 Meeting. ⁸⁶

77 Finally, Wendy denies that she had knowingly assisted or participated in any fraud. She also denies holding any moneys on trust for the Plaintiffs. She states that she did not receive any part of the purchase price paid by the Plaintiffs for the Casa Nova Project and the Bosque Project. ⁸⁷

78 In respect of WK Events and WKIN, Wendy submits that the role of WK Events and WKIN was limited to providing administrative support, on behalf of Ecohouse Asia Pacific and Ecohouse UK. In this regard, WK Events and WKIN helped to arrange the paperwork and passed these documents to Ecohouse Asia Pacific. ⁸⁸ Wendy acknowledges that WKIN was paid by Ecohouse Asia Pacific for organising the events at which the Casa Nova Project and the Bosque Project were marketed, ie, the 30 July 2012 Presentation and the 6 October 2012 Presentation. However, Wendy claims that WK Events and WKIN did not receive any commission for the sale of the residential units in either the Casa Nova Project or the Bosque Project. ⁸⁹

79 Joey states that one Winstorn Ee (“Winstorn”) introduced Anthony and the Casa Nova Project to him in early 2012. ⁹⁰ Thereafter, in June 2012, Joey visited Brazil to meet Anthony. In Brazil, Joey states that he did the following: ⁹¹

(a) He visited the Ecohouse Brazil office.

(b) He visited the site of the Arco Iris Project.

(c) He visited the site of the Casa Nova Project.

(d) He was introduced by Anthony to one of the heads of Caixa Bank. Joey states that Caixa Bank was the entity in charge of funding end-buyers in Brazil for the Casa Nova Project.

(e) He was also introduced by Anthony to Elali, a Brazilian lawyer. Joey states that Elali told him that the land on which the Casa Nova Project was going to be built was owned by Ecohouse Brazil. Joey states that Elali also told him that he would be able to render a due diligence report on the Casa Nova Project.

80 Thereafter, Joey agreed with Anthony to set up a JV company which led to the incorporation of Ecohouse Asia Pacific. ⁹² Joey states that Ecohouse Asia Pacific was interested in marketing the Casa Nova Project to members of the WK Investment Network Yahoo Group. He, therefore, asked Wendy to reach out to people in her network. ⁹³

81 Joey denies that he made any representation, or affirmed the Due Diligence Representation, at the 30 July 2012 Presentation. Joey states that his role at the 30 July 2012 Presentation was to ensure the event ran smoothly. ⁹⁴

82 However, Joey states that he did carry out due diligence as described above (see [72(b)(i)]) during his trip to Brazil in June 2012. He also engaged Fong to advise and deal with the legal aspects of the Casa Nova Project. Joey, therefore, submits that he had taken steps which were more than adequate. ⁹⁵

83 Joey denies holding moneys on trust for the Plaintiffs. In fact, Joey states that he did not receive moneys from Ecohouse UK. Further, Joey states that Ecohouse Singapore did not receive the commissions owed under the terms of the JV Agreement from Ecohouse UK. ⁹⁶

84 There are numerous issues which are as follows:

(a) First, there is the preliminary issue of whether the claims against WK Events, Ecohouse Asia Pacific and Ecohouse Singapore can be sustained as these entities have been struck off the Register.

(b) Second, whether Wendy and/or Joey had made fraudulent misrepresentations to the Plaintiffs. As I shall explain below at [98], this would depend on the following:

(c) Third, whether the Plaintiffs have made out a case against Wendy and/or Joey under s 2 of the MRA.

(d) Fourth, whether Wendy and/or Joey are liable for negligent misrepresentation. As I shall explain below at [217], this would depend on the following:

(e) Fifth, whether the Plaintiffs and Wendy entered into the First Collateral Contract and the Second Collateral Contract and, if so, whether there were breaches of the First Collateral Contract and the Second Collateral Contract by Wendy.

(f) Sixth, whether the Defendants are liable as constructive trustees for knowing receipt.

(g) Seventh, whether the Defendants dishonestly assisted in any fraud by Ecohouse Brazil when they marketed the Casa Nova Project and the Bosque Project to the Plaintiffs.

(h) Eighth, whether the Defendants breached their statutory duty under the Estate Agents Act and, if so, whether a private right of action arises from such a breach.

(i) Ninth, if Wendy and/or Joey are found to be liable under any of the Plaintiffs’ heads of claims above, there is the issue of whether WKIN is liable in any way.

(j) Tenth, there is the issue of damages, should any of the Defendants be found liable.

85 At the outset, there is the issue of whether the Plaintiffs can pursue their claims against WK Events, Ecohouse Asia Pacific and Ecohouse Singapore when these entities had already been struck off the Register. As highlighted above at [7], [9] and [11]:

(a) WK Events is an exempt private company which was struck off the Register on 4 May 2020.

(b) Ecohouse Asia Pacific is a private company which was struck off the Register on 23 September 2020.

(c) Ecohouse Singapore is an exempt private company which was struck off the Register on 23 September 2020.

86 The implication of WK Events, Ecohouse Asia Pacific and Ecohouse Singapore being struck off the Register is that the companies are no longer in existence today. In Re Asia Petan Organisation Pte Ltd [2018] 3 SLR 435 (“Re Asia Petan”), Audrey Lim JC (as she then was) had to consider the issue of whether to allow an application by a former director of a company, Song, to restore a company which had been struck off the Register so as to commence a derivative action in the company’s name against the other director of the company, Tan, who had purportedly breached his fiduciary duties. In this context, Lim JC stated (at [13]) as follows:

87 It is clear from the above that once a company is struck off the Register, it would be unable to act as it is no longer in existence unless the company is first restored to the Register. In the context of Re Asia Petan, this meant that the company was unable to bring a claim against a director for breach of fiduciary duties until it was restored to the Register. In the present case, as WK Events, Ecohouse Asia Pacific and Ecohouse Singapore were struck off the Register, this means that they are no longer in existence and cannot, therefore, be included as defendants to the present suit.

88 This, however, does not preclude the Plaintiffs from pursuing claims against the officers or members of the three entities. Under s 344A(7)(a) of the Companies Act 1967 (2020 Rev Ed) (“Companies Act 1967”), the liability of officers and members of the company continue even after a company has been struck off and dissolved and may be enforced as if the company had not been dissolved. Section 344A(7)(a) of the Companies Act 1967 provides as follows:

89 This means that when WK Events, Ecohouse Asia Pacific and Ecohouse Singapore were struck off the Register, the Plaintiffs could still have recourse against Wendy and Joey who were directors and shareholders of WK Events. However, Wendy was not the director or shareholder of Ecohouse Asia Pacific or Ecohouse Singapore.

90 Under s 344(5) of the Companies Act 1967 and as was alluded to above at [87], a company struck off the Register may be restored on an application by any aggrieved party within six years after the company has been struck off the Register:

91 In Re Asia Petan, Lim JC reviewed the law in relation to the question of restoration under s 344(5) of the Companies Act (Cap 50, 2006 Rev Ed) which is in para materia with s 344(5) of the Companies Act 1967 (at [31]):

92 In the present case, there was no application by the Plaintiffs to restore WK Events, Ecohouse Asia Pacific and Ecohouse Singapore to the Register. Hence, the Plaintiffs’ claims against the three companies simply cannot be sustained since the companies legally are no longer in existence.

93 The counsel for the Plaintiffs, Mr Goh Kim Thong Andrew (“Mr Goh”), conceded during the oral closing submissions that the Plaintiffs had not applied to restore the three companies to the Register despite this being an option which was available to them. In fact, he stated that the Plaintiffs had no intention to undergo the process of seeking to restore the three companies to the Register. ⁹⁷ Mr Goh also accepted that the effect of the three companies being struck off the Register was that they were legally no longer in existence. ⁹⁸

94 For the above reasons, the Plaintiffs’ claims against WK Events, Ecohouse Asia Pacific and Ecohouse Singapore must, therefore, fail.

95 In any case, I shall nevertheless consider the substratum of the Plaintiffs’ claims against WK Events, Ecohouse Asia Pacific and Ecohouse Singapore. The Plaintiffs’ primary case is undeniably against Wendy and Joey in relation to the Four Representations purportedly made by them. The Plaintiffs intend to hold Wendy and Joey responsible. The Plaintiffs do not want them to hide behind the companies to evade liability. Cindy stated this in Court: ⁹⁹

96 There is no evidence against WK Events and Ecohouse Singapore for the following reasons:

(a) First, WK Events only played an administrative role, ie, the organisation of the 30 July 2012 Presentation for the Casa Nova Project and the 6 October 2012 Presentation for the Bosque Project. Thus, WK Events could not be held liable for any misrepresentation made by Wendy and Joey.

(b) Second, Ecohouse Singapore had little involvement in the 30 July 2012 Presentation for the Casa Nova Project and the 6 October 2012 Presentation for the Bosque Project. As I had explained above at [9] and [42], Ecohouse Singapore was an entity which was incorporated for the purpose of the JV entity, Ecohouse Asia Pacific. Thereafter, Ecohouse Asia Pacific became the entity responsible for marketing the Casa Nova Project and the Bosque Project in Singapore. Hence, there is nothing to connect Ecohouse Singapore to any misrepresentation made by Wendy and Joey.

97 As for Ecohouse Asia Pacific, under the terms of the JV Agreement, it was an entity set up for the specific purpose of marketing Ecohouse Brazil’s property developments in the Asia Pacific region. ¹⁰⁰ Wendy was the trainer under the terms of the JV Agreement. Thus, Ecohouse Asia Pacific was also responsible for the content of the presentations made at the 30 July 2012 Presentation for the Casa Nova Project and the 6 October 2012 Presentation for the Bosque Project. Therefore, Ecohouse Asia Pacific may potentially be held liable if any misrepresentation was made by Wendy or Joey at the presentations which were organised on behalf of Ecohouse Asia Pacific. However, as the Plaintiffs have failed to make an application to restore Ecohouse Asia Pacific to the Register, the Plaintiffs’ claims against Ecohouse Asia Pacific must fail.

98 The essential elements which need to be established to support a claim of fraudulent misrepresentation were set out in Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 and endorsed by the Court of Appeal in Panatron Pte Ltd and another v Lee Cheow Lee and another [2001] 2 SLR(R) 435 (“Panatron”) (at [14]). The elements are as follows:

(a) First, there must be a false representation of fact made by words or conduct.

(b) Second, the representation must be made with the intention that it would be acted upon by the plaintiff, or by a class of persons which includes the plaintiff.

(c) Third, it must be proved that the plaintiff had acted upon the false statement.

(d) Fourth, it must be proved that the plaintiff suffered damage by so doing.

(e) Fifth, the representation must be made with knowledge that it is false; it must be wilfully false, or at least made in the absence of any genuine belief that it is true.

99 The Court of Appeal in Ernest Ferdinand Perez De La Sala v Compañia De Navegación Palomar, SA and others and other appeals [2018] 1 SLR 894 (“Ernest Ferdinand”) (at [173]), explained that in order for a representation to be false, it must be substantially false but need not be false in every respect:

100 Further, in Panatron, the Court of Appeal clarified that the misrepresentation need not be the sole inducement to the plaintiff. In Panatron, the two individuals to whom the misrepresentation was made were experienced businessmen. In this context, the Court of Appeal found that even where the plaintiff relies partly on his own knowledge and expertise and partly on the misrepresentations, this would not be a bar to establishing a case of fraudulent misrepresentation (see [20]–[23] of Panatron):

101  However, as was stated in Panatron (at [13]), the plaintiff must show that the false representation was made: (a) knowingly; (b) without belief in its truth; or (c) recklessly, without caring whether it be true or false.

102 I pause here to briefly mention that the Plaintiffs have not, in their Statement of Claim, specifically pleaded a case of fraudulent misrepresentation. Instead, the Plaintiffs have merely referred to their claim under the heading of “Misrepresentation”. ¹⁰¹

103 However, while the Plaintiffs may have omitted to make specific reference to fraudulent misrepresentation in their Statement of Claim, it is abundantly clear that the Plaintiffs, in substance, intended to pursue a claim of fraudulent misrepresentation. This is evident from the fact that they have alleged in their Statement of Claim that Wendy and Joey “had knowledge of the falsity” of the Four Representations, ie, the key element which distinguishes a case of fraudulent misrepresentation from a case of negligent misrepresentation.

104 In any case, it is quite evident from the Defendants’ case at the trial as well as their opening statements that the Defendants were aware that one of the Plaintiffs’ claims related to fraudulent misrepresentation by Wendy and Joey. Therefore, the Defendants cannot be said to have been taken by surprise or have suffered any prejudice, even if the Statement of Claim did not specifically refer to fraudulent misrepresentation (see Song Jianbo v Sunmax Global Capital Fund 1 Pte Ltd and another [2021] SGHC 217 at [69], cited recently in Bay Lim Piang v Lye Cher Kang [2023] SGHC 13 at [93]).

105 I shall now consider the issue raised by the First, Third and Fourth Defendants in their submission at the close of trial relating to the Plaintiffs’ pleadings. They allege that there are differences in the Plaintiffs’ case in relation to the Four Representations. ¹⁰² They make this allegation by comparing the case presented by the Plaintiffs in Cindy’s affidavit and at the trial with the Plaintiffs’ Statement of Claim.

106 The First, Third and Fourth Defendants have focused, in particular, on the Due Diligence Representation. According to them, the Plaintiffs’ case as pleaded in the Statement of Claim was limited to a representation made by Wendy that she and/or her companies had spent large sums of money to carry out detailed due diligence to ensure the Casa Nova Project and the Bosque Project were government-approved. Based on the Plaintiffs’ pleaded case, Wendy never did any detailed due diligence in the Casa Nova Project and the Bosque Project. However, the First, Third and Fourth Defendants state that the Plaintiffs had deviated from their pleaded case on the Due Diligence Representation by introducing the element of a “safe investment” in Cindy’s affidavit.

107 Before considering the contention above, I highlight the salient principles on the adequacy of pleadings. It is trite that, where there are allegations of misrepresentation or fraud, these allegations must be pleaded with sufficient particularity. This principle is set out in O 18 r 12(1)(a) of the Rules of Court (Cap 332, R 5, 2014 Rev Ed):

108 The reason for this principle is clear. It is to ensure that the Defendants know the case they have to meet: BOM v BOK and another appeal [2019] 1 SLR 349 (“BOM”) at [39], citing Singapore Civil Procedure vol I (Foo Chee Hock JC, gen ed) (Sweet & Maxwell, 2018) at para 18/12/2.

109 However, in BOM, the Court of Appeal also emphasised that when assessing the adequacy of pleadings, one must not simply focus on the technicalities. Rather, the focus must remain on whether the scope of issues has been adequately defined in the pleadings so as not to take the parties by surprise or deprive the parties of the opportunity to adduce relevant evidence (see BOM at [40]):

110 In the same vein, the Court of Appeal explained in OMG Holdings Pte Ltd v Pos Ad Sdn Bhd [2012] 4 SLR 231 (“OMG Holdings”) that the aim of pleadings is to narrow the parties to definite issues (see OMG Holdings at [18]):

111 The question, therefore, is whether the Plaintiffs’ pleadings adequately set out the Four Representations which the Plaintiffs claim were made by Wendy. I set out in the table below (the “Table”) the Plaintiffs’ pleaded case on the Four Representations for the Casa Nova Project in their Statement of Claim, the Plaintiffs’ case as stated in Cindy’s affidavit and the Plaintiffs’ case at the trial:

112 It is clear from the Table above that there has been no substantive change in the Plaintiffs’ pleadings with respect to the Brazilian Government Representation, the Escrow Representation and the Investment Return Representation. As set out in the Table, the Plaintiffs’ case as detailed in the Statement of Claim for these three Representations is largely replicated in Cindy’s affidavit and at the trial by the Plaintiffs.

113 As for the Due Diligence Representation, there seems to be a slight but immaterial variation between the Plaintiffs’ case as set out in the Statement of Claim and the Plaintiffs’ case as set out in Cindy’s affidavit. In the Statement of Claim, the Plaintiffs have only stated that Wendy and/or her companies (a) had spent large sums of money; and (b) carried out detailed due diligence to ensure the “Brazilian Investments”, ie, the Casa Nova Project and the Bosque Project, “were made into government approved project”. ¹¹⁸ In Cindy’s affidavit, however, the Plaintiffs had gone further to claim that Wendy had stated that:

(a) she had done all that was possible and had invested a six-figure sum on due diligence checks to ensure the Casa Nova Project was government-approved and the investment was safe;

(b) Joey and Ecohouse Group had spent one year in Brazil studying the Casa Nova Project to understand the background of the developer, met with the Vice Governor and one of the heads of Caixa Bank, made preparations including getting the proper approvals, and ensured that everything was in order; and

(c) Fong had been engaged to review and vet the sale and purchase agreements and escrow agreements and to tighten the terms in the investors’ favour.

114 These are minor differences in the framing of the Due Diligence Representation and the Plaintiffs’ case is consistent with what they have pleaded in their Statement of Claim. In the Statement of Claim, the Plaintiffs have alleged that Wendy had stated, in the 13 August 2012 email, that large sums of money had been paid to carry out detailed due diligence. This representation was also made at the 30 July 2012 Presentation. Significantly, in the Statement of Claim, the Plaintiffs have made reference to the 13 August 2012 email. Therefore, the First, Third and Fourth Defendants’ submission ignores the fact that the Plaintiffs’ case was premised on what Wendy had said in the 13 August 2012 email.

115 The Plaintiffs’ case on the Due Diligence Representation as stated in Cindy’s affidavit is not inconsistent with the 13 August 2012 email which was sent by Wendy. I reproduce below the relevant parts of the 13 August 2012 email where Wendy had clearly stated what forms the Plaintiffs’ case:

116 Thus, Cindy’s affidavit regarding the Due Diligence Representation was an elaboration of the Plaintiffs’ Statement of Claim on Wendy’s due diligence work as stated in the 13 August 2012 email. The Plaintiffs are not required to reproduce the entire contents of the 13 August 2012 email in the Statement of Claim. Hence, there is no deviation from the Plaintiffs’ pleaded case on the Due Diligence Representation in the Statement of Claim.

117 The Court of Appeal in BOM (at [40]) and OMG Holdings (at [18]), stated that the key issue is whether any deficiency in the pleadings has the effect of causing the other party to be taken by surprise or causing the other party to be irreparably prejudiced. In the present case, the Defendants are not taken by surprise and are not irreparably prejudiced by the Plaintiffs’ allegation of the Due Diligence Representation. It would have been abundantly clear to the Defendants that the Plaintiffs were relying on the 13 August 2012 email sent by Wendy to investors including Cindy. This would have been clear to the Defendants from the Plaintiffs’ Statement of Claim. Given that the 13 August 2012 email was sent by Wendy, she would have been undeniably familiar with the contents of her own email. Further, the Defendants’ opening statements and affidavits show that the Defendants were, in fact, fully aware that the Plaintiffs’ case hinged, in part, on the statements made by Wendy in the 13 August 2012 email. Hence, the contention of the First, Third and Fourth Defendants that the Plaintiffs’ case at trial on the purported Due Diligence Representation differs from the Plaintiffs’ pleaded case has no merits.

118 I shall now consider whether the Plaintiffs have established a case of fraudulent misrepresentation against Wendy and Joey on a balance of probabilities. It is important to consider whether Wendy made the Four Representations.

119 According to the Plaintiffs, Wendy made the Four Representations, ie, the Brazilian Government Representation, the Escrow Representation, the Due Diligence Representation and the Investment Return Representation, at the 30 July 2012 Presentation where the Casa Nova Project was introduced to investors, including the Plaintiffs. ¹¹⁹ Thereafter, Wendy sent two emails, the 7 August 2012 email and the 13 August 2012 email, where the Four Representations were repeated. ¹²⁰

120 In defence, Wendy denies making the Four Representations at the 30 July 2012 Presentation. According to Wendy, Anthony was invited to speak to the investors and Anthony was the one who spoke about the Casa Nova Project at the 30 July 2012 Presentation. Wendy alleges that she introduced Anthony to the audience. ¹²¹ Further, based on Wendy’s affidavit, she only spoke generally about investing in overseas projects as well as about “risks versus returns”. Anthony then presented material facts relating to the “property development and opportunity”, ie, the Casa Nova Project. ¹²² Wendy stated in her affidavit that Anthony used the Casa Nova Presentation Slides at the presentation and that she did not prepare the slides. She also did not use the slides in her introduction at the presentation. ¹²³

121 Before considering the 7 August 2012 email and the 13 August 2012 email, I shall deal first with Wendy’s role at the 30 July 2012 Presentation. Wendy admitted during the cross-examination by Mr Goh that her involvement at the 30 July 2012 Presentation went further than what she had stated in her affidavit:

(a) First, Wendy clarified that she had spoken beyond investing in overseas projects and the “risks versus returns”. She also spoke about investing in Brazil and the economic climate in Brazil. Wendy’s evidence in Court during the cross-examination by Mr Goh is as follows: ¹²⁴

(b) Second, Wendy also admitted that it was not just Anthony who used the Casa Nova Presentation Slides at the 30 July 2012 Presentation. Wendy had also referred to a few slides from the Casa Nova Presentation Slides when she was addressing the audience. This is Wendy’s evidence in Court during the cross-examination by Mr Goh: ¹²⁵

(c) Third, Wendy also said during the cross-examination by Mr Goh that she had, in fact, told the audience during the 30 July 2012 Presentation that she represented Ecohouse Asia Pacific. Wendy conceded that this claim was not found in her affidavit. This is Wendy’s evidence in Court: ¹²⁶

122 These discrepancies raised during the cross-examination are serious material inconsistencies in Wendy’s account of her role at the 30 July 2012 Presentation. She has not provided any explanation to account for these inconsistencies. This, however, means that Wendy’s account in her affidavit that she only introduced Anthony and spoke generally about investing overseas and on risks and returns at the 30 July 2012 Presentation is self-serving and clearly false. Rather, based on Wendy’s own account in Court, she went into some details about investing in Brazil specifically, she and Anthony used the Casa Nova Presentation Slides and spoke about the Casa Nova Project in Brazil.

123 In contrast, the Plaintiffs, who were both present at the 30 July 2012 Presentation, have been consistent in their evidence that Wendy had made the Four Representations at the 30 July 2012 Presentation. The Defendants have contended that the Plaintiffs’ evidence is not entirely credible in view of David merely adopting Cindy’s affidavit without reservation. ¹²⁷ I accept that there is a need to carefully scrutinise the evidence of the Plaintiffs, in view of the fact that David has, in essence, adopted Cindy’s position as his own. However, in light of the contents of the 7 August 2012 email and the 13 August 2012 email sent by Wendy which I shall come to shortly, it is more probable that the Plaintiffs’ version of the events, ie, that Wendy had made the Four Representations at the 30 July 2012 Presentation, is true.

124 The Plaintiffs called Chang Tuck Yuen (“Chang”), another investor, as a witness. Chang attended the 30 July 2012 Presentation. Later, Chang also signed a sale and purchase agreement with Ecohouse Brazil for the purchase of some residential units in the Casa Nova Project. Chang’s evidence is consistent with the Plaintiffs’ evidence that Wendy had made the Four Representations at the 30 July 2012 Presentation. I am, however, mindful that Chang stated during the cross-examination by the counsel for the First, Third and Fourth Defendants, Ms Oei Ai Hoea Anna (“Ms Oei”), that he had discussed with Cindy the contents of his affidavit before the trial. This is Chang’s evidence in Court: ¹²⁸

125 The Defendants have argued that Chang is not a credible witness as he had worked on his affidavit together with Cindy and they had agreed on the information that went into the affidavit. They had freely discussed matters relating to the present case during the meetings with the lawyers before the commencement of the trial. ¹²⁹ The Defendants have also focused on Chang’s admission at the trial that he stands to gain financially if the Plaintiffs succeed in their claim against the Defendants. This is Chang’s evidence in Court during the cross-examination by Ms Oei: ¹³⁰

126 It is clear from the exchange above that Chang’s and Cindy’s testimonies need to be treated with extreme caution. Thus, prudence requires the Court to exercise extreme care when evaluating the evidence of the Plaintiffs and Chang. Notwithstanding this, it is undisputed that Wendy sent to Cindy and the other investors the 7 August 2012 email and 13 August 2012 email. The contents of these emails indicate that Wendy did, in fact, make the Four Representations as the Plaintiffs allege.

127 In the 7 August 2012 email, Wendy forwarded the Casa Nova Presentation Slides which were used at the 30 July 2012 Presentation. This email was sent to Cindy and the other investors in the Casa Nova Project following the 30 July 2012 Presentation. In this email, Wendy provided a set of instructions to the investors on the next steps that they would need to take following their reservation of the residential units in the Casa Nova Project.

128 The following representations can be gleaned from a review of the Casa Nova Presentation Slides forwarded in the 7 August 2012 email:

(a) First, the Casa Nova Presentation Slides reveal that the Brazilian Government Representation was made to the investors, including the Plaintiffs, at the 30 July 2012 Presentation and in the 7 August 2012 email. The evidence of the Brazilian Government Representation is listed below:

(i) The slides found at Bundle of Affidavits of Evidence-in-Chief Volume 1 (“1BAEIC”), pages 120 to 123, show that various representations were made about the Brazilian government’s MCMV programme. Representations were made that the government launched the MCMV programme in 2009 to provide significant funding for Brazilians to purchase their own homes.

(ii) The slide found at 1BAEIC, page 124, shows that representations were clearly made that Ecohouse Brazil was a government-backed developer which was certified by the state-owned Caixa Bank:

(b) Second, the Casa Nova Presentation Slides reveal that the investors’ moneys for the Casa Nova Project would be deposited into an escrow account, ie, the Escrow Representation. This was mentioned at the 30 July 2012 Presentation and in the 7 August 2012 email:

(i) The slide found at 1BAEIC, page 124, shows that a representation was clearly made that investors’ moneys for Ecohouse Brazil were fully secured and protected by way of an escrow account in the UK:

(ii) A similar representation was again made at the slide found at 1BAEIC, page 130:

(iii) This representation was again made at the slide found at 1BAEIC, page 133, where it was stated:

(c) Third, the Casa Nova Presentation Slides reveal that the Investment Return Representation was made to the investors and the Plaintiffs at the 30 July 2012 Presentation and in the 7 August 2012 email:

(i) The slide at 1BAEIC, page 133, shows that a representation was clearly made that investors would earn a 20% return of their investment within one year:

(ii) This representation was again made in the slide at 1BAEIC, page 135:

129 From the above, it is clear that the Brazilian Government Representation and the Investment Return Representation were made in the Casa Nova Presentation Slides which were used at the 30 July 2012 Presentation and were attached in the 7 August 2012 email sent by Wendy. In relation to the Escrow Representation, the Casa Nova Presentation Slides only refer to investors’ moneys being deposited into an escrow account, though they do not state the conditions under which investors’ moneys in the escrow account would be released.

130 Wendy has tried to distance herself from the Casa Nova Presentation Slides. In her affidavit, she stated that the 7 August 2012 email “was merely forwarding the slides that were presented”. ¹³¹ During the cross-examination by Mr Goh, Wendy stated that the slides attached to the 7 August 2012 email were prepared by Anthony and that her involvement with respect to the contents of the Casa Nova Presentation Slides was merely to include the contact information of the parties as well as to convert the monetary figures stated in the Casa Nova Presentation Slides to Singapore Dollars: ¹³²

131 Regarding the instructions to the investors on the next steps that they would need to take following the reservation contained in the 7 August 2012 email, Wendy stated in Court that she was merely forwarding instructions from Ecohouse Asia Pacific: ¹³³

132 Wendy’s attempts to distance herself from the 7 August 2012 email and the Casa Nova Presentation Slides attached to the email ignore the fact that the email originated from her and did not, in any way, state that the contents of the email or the slides were representations by either Anthony or by Ecohouse Asia Pacific. The email was sent by Wendy to members of her WK Investment Network Yahoo Group who had attended the 30 July 2012 Presentation and thereafter reserved units at the Casa Nova Project. At the very least, by forwarding the Casa Nova Presentation Slides in the 7 August 2012 email under her name, Wendy would have been endorsing the contents of the Casa Nova Presentation Slides as true and accurate. This must, therefore, amount to representations made by Wendy. In the 7 August 2012 email, Wendy did not expressly or implicitly indicate that Anthony was the one who presented the Casa Nova Presentation Slides at the 30 July 2012 Presentation. In fact, the impression given in the 7 August 2012 email was that she was marketing the Casa Nova Project and that the Casa Nova Presentation Slides were attached to the email to convince the investors, including Cindy, to invest in the Casa Nova Project.

133 Even if Wendy denies that she had made the Brazilian Government Representation, Escrow Representation and the Investment Return Representation when she attached the Casa Nova Presentation Slides to the 7 August 2012 email to the investors and Cindy, she cannot reasonably deny that the Four Representations were clearly made in the 13 August 2012 email which she drafted. I shall, therefore, now examine the contents of the 13 August 2012 email.

134 The Brazilian Government Representation was clearly made by Wendy in the 13 August 2012 email as seen below:

(a) First, she stated that Ecohouse Brazil was a Geric certified developer, ie, certified by the Brazilian state-owned Caixa Bank:

(b) Second, she stated that she had verified an endorsement of Ecohouse Brazil by a minister of the Brazilian government:

(c) Third, she also stated that it was rare to find a deal where the Brazilian government had endorsed and assigned a project to a designated developer (referring to Ecohouse Brazil). Wendy went further to even make a comparison between Ecohouse Brazil’s Casa Nova Project and the relationship between the Housing and Development Board (“HDB”) in Singapore and its appointed contractors or builders:

135 The message from the extracts of the 13 August 2012 email above is clear – the Casa Nova Project was a safe investment as it was approved and supported by the Brazilian government as a social housing development. Therefore, Wendy had made the Brazilian Government Representation in the 13 August 2012 email.

136 The Escrow Representation was also made by Wendy in the 13 August 2012 email. She stated:

137 The above extract of the 13 August 2012 email clearly represented to the investors, including Cindy, that the moneys invested in the Casa Nova Project would be deposited into an escrow account maintained by Sanders & Co. Thus, Wendy assured the investors, including Cindy, that their moneys would be safe and would only be released for the building of the invested units. Therefore, Wendy had made the Escrow Representation in the 13 August 2012 email.

138 The Due Diligence Representation was also made by Wendy in the 13 August 2012 email:

(a) First, Wendy stated that she and Joey had been monitoring “this deal”, ie, the Casa Nova Project, for one year and that Joey had visited Brazil and met various persons: ¹³⁴

(b) Second, Wendy stated that a six-figure sum had been invested for due diligence for the Casa Nova Project. Here, she gave the impression that the six-figure sum was paid by her and others as she said “We invested …”. This included engaging a “very experienced lawyer”, ie, Fong, as well as obtaining various due diligence reports: ¹³⁵

(c) Third, Wendy stated that she believed she had done more due diligence than others: ¹³⁶

139 The 13 August 2012 email clearly represented that: (a) Wendy had done all that was possible and had invested a six-figure sum on due diligence checks to ensure that the Casa Nova Project was government-approved and the investment was safe; (b) Wendy had been monitoring the Casa Nova Project for one year and Joey had met with the Vice Governor and one of the heads of Caixa Bank, made preparations, including getting the proper approvals, and ensured that everything was in order; and (c) Fong had been engaged to do due diligence work on Ecohouse Brazil and the Casa Nova Project. Therefore, it is clear that Wendy had made the Due Diligence Representation in the 13 August 2012 email.

140 Finally, the Investment Return Representation was also made by Wendy in the 13 August 2012 email: ¹³⁷

141 Wendy did not deny in her affidavit that the Four Representations were made in the 13 August 2012 email. Instead, her position is that “it was true that steps were taken as represented”. ¹³⁸ Further, when confronted with the 13 August 2012 email during the cross-examination by Mr Goh, Wendy conceded that the points made in the 13 August 2012 email were a reference to the Casa Nova Project and she was persuading the investors and the Plaintiffs to invest in the Casa Nova Project: ¹³⁹

142 Therefore, the 13 August 2012 email clearly indicates that Wendy had made the Four Representations in relation to the Casa Nova Project.

143 In light of the above, I find that Wendy had made the Four Representations for the Casa Nova Project at the 30 July 2012 Presentation despite her denial.

144 I pause here to consider Wendy’s contention that her 7 August 2012 email and 13 August 2012 email could not have been relied upon by David as he was not a recipient of the emails. It is undisputed by the parties that David was not a member of the WK Investment Network Yahoo Group and was not one of the recipients of the 7 August 2012 email and 13 August 2012 email. Hence, Wendy contends that any representation, if made via the emails, cannot be said to have been made to David. ¹⁴⁰ In view of my finding above at [142] that Wendy had made the Four Representations for the Casa Nova Project at the 30 July 2012 Presentation, this contention is moot since David was present at the 30 July 2012 Presentation.

145 For completeness, I shall address Wendy’s contention that David could not have relied on the Four Representations. It is undisputed that the Plaintiffs were husband and wife and they had acted together as one entity when they decided to purchase residential units in the Casa Nova Project. Cindy may have been the point of contact who was responsible for communicating with Wendy as she was a member of the WK Investment Network Yahoo Group. What is more important is that when Cindy received the emails from Wendy which contained the Four Representations, the Plaintiffs relied upon the contents of the emails and jointly decided to purchase residential units in the Casa Nova Project. Further, it is worth emphasising that these emails were follow-up emails after the 30 July 2012 Presentation which David attended.

146 I shall next consider the Plaintiffs’ claim that Wendy repeated the Brazilian Government Representation, the Due Diligence Representation, the Escrow Representation and the Investment Return Representation in the context of the Bosque Project at the 6 October 2012 Presentation. Wendy appears to deny that she made these representations at the 6 October 2012 Presentation.

147 In order to understand what took place at the 6 October 2012 Presentation, it would be important to analyse the 3 October 2012 email sent by Wendy to investors, including Cindy. I set out the relevant parts of the 3 October 2012 email below: ¹⁴¹

148 It is clear from the 3 October 2012 email that Wendy had represented that Ecohouse Brazil had been endorsed by the Brazilian government and was part of the MCMV social housing programme. In fact, in the 3 October 2012 email, Wendy introduced the Bosque Project as Ecohouse Brazil’s new project “in conjunction with the Brazilian [g]overnment”. Therefore, Wendy had clearly made the Brazilian Government Representation in the 3 October 2012 email.

149 Further, Wendy had also represented, in the 3 October 2012 email, that “year on year 20% returns” would be offered to investors who purchased units in the Bosque Project. Therefore, Wendy had clearly made the Investment Return Representation in the 3 October 2012 email.

150 More significantly, however, it is clear from the 3 October 2012 email that Wendy was marketing the Bosque Project whilst riding on the success of the Casa Nova Project. The Bosque Project was framed as arising from the “immense success” of the Casa Nova Project “which was fully sold out”. This sets the context for the 6 October 2012 Presentation where the Bosque Project was marketed. Given my findings above (at [127] to [143]) that Wendy had made the Four Representations at the 30 July 2012 Presentation and in the 7 August 2012 email and 13 August 2012 email in relation to the Casa Nova Project, it is entirely consistent that Wendy would have repeated the Four Representations at the 6 October 2012 Presentation when she promoted and marketed the Bosque Project. This is especially so, when she had already made the Brazilian Government Representation and the Investment Return Representation in the 3 October 2012 email on the Bosque Project.

151 In light of the above, I find that Wendy had repeated the Four Representations in the context of the Bosque Project.

152 Wendy argues that any representations made at the 6 October 2012 Presentation for the Bosque Project would have been made only to Cindy and not David because David was not present at the 6 October 2012 Presentation. ¹⁴² I have rejected this same argument above at [145] in the context of the Casa Nova Project. Similarly, the Plaintiffs were acting as one entity for the purchase of the residential units in the Bosque Project.

153 The Plaintiffs allege that Joey had engaged in fraudulent misrepresentation in relation to the Due Diligence Representation made with respect to the Casa Nova Project. The thrust of the Plaintiffs’ claim against Joey for fraudulent misrepresentation is that Joey was present at the 30 July 2012 Presentation and had nodded and smiled when Wendy introduced him and stated that Joey had also done due diligence for the Casa Nova Project.

154 In response, Joey states that he was busy with the back-end work during the 30 July 2012 Presentation and had not been paying attention to what was being said by Wendy. Joey accepted that he nodded and smiled when Wendy introduced him as her husband, but disagreed that it was in response to Wendy stating that he had conducted due diligence for the Casa Nova Project. This is the evidence of Joey in Court: ¹⁴³

155 It is undisputed that Joey was present at the 30 July 2012 Presentation. The dispute is whether Joey was introduced to the investors and the Plaintiffs, at the 30 July 2012 Presentation merely as Wendy’s husband or as Wendy’s husband who went to Brazil to conduct due diligence on the Casa Nova Project. The 30 July 2012 Presentation was conducted for Wendy and Joey to market and convince the investors and the Plaintiffs to invest moneys and buy residential units in the Casa Nova Project. Wendy and Joey stood to gain in monetary terms if people invested in the Casa Nova Project. Ecohouse Brazil had agreed to pay them an attractive commission of 10% for each unit purchased by an investor in the Casa Nova Project. ¹⁴⁴ There would have been absolutely no marketing value for Wendy to merely introduce Joey as her husband. It is most probable that Joey was introduced as Wendy’s husband who had gone to Brazil to conduct due diligence on the Casa Nova Project. This was precisely Cindy’s evidence in Court. The 13 August 2012 email further supports the Plaintiffs’ case. As I have set out above at [138(a)], in the 13 August 2012 email, Wendy elaborated on what Joey had done for the purpose of the due diligence process when he was in Brazil.

156 I recognise that Joey’s exposure at the 30 July 2012 Presentation and his dealings with the investors and the Plaintiffs at the presentations and via emails were limited as compared to Wendy. However, the evidence, particularly the contemporaneous documents and exchange of emails, clearly reveal that Joey and Wendy were working together to promote and market the Casa Nova Project and the Bosque Project. I have elucidated at (at [99]) above that in Ernest Ferdinand at [173], the Court of Appeal, citing Pearlie Koh, The Law of Contract in Singapore (Academy Publishing, 2012) at para 11.013, stated that the question as to the meaning of a particular representation “is tested from the perspective of a reasonable person in the position of the representee, and ‘in the light of the circumstances pertaining at the time’” and “[t]he question is what the representee understands by the words used”. It cannot be ignored that, based on the Defendants’ own case, Wendy was marketing the Casa Nova Project and the Bosque Project following Joey’s request. Therefore, they were working hand in glove when marketing the Casa Nova Project and the Bosque Project. While Joey attempts now to shield himself from liability for any misrepresentation by relying on his limited visibility to the investors and the Plaintiffs, the reality is that Joey was also very much involved in the Four Representations that were made to the investors and the Plaintiffs.

157 There is considerable and similar overlap between the Four Representations which were made in relation to the Casa Nova Project and the Bosque Project. Hence, I shall deal with the issue of whether each of the Four Representations was false in relation to both the Casa Nova Project and the Bosque Project.

158 Before considering whether the Four Representations were false, I shall consider the Defendants’ contention that the Plaintiffs and Chang had conceded at the trial that the Four Representations were true. ¹⁴⁵

159 During the cross-examination by Ms Oei and the counsel for the Second, Fifth and Sixth Defendants, Mr Sng Kheng Huat (“Mr Sng”), Cindy and Chang agreed at various junctures that the Four Representations were true. I set out below a few instances during the cross-examination by Mr Sng where Cindy agreed that the Brazilian Government Representation, the Due Diligence Representation and the Investment Return Representation were true:

(a) In relation to the Brazilian Government Representation: ¹⁴⁶

(b) In relation to the Due Diligence Representation: ¹⁴⁷

(c) In relation to the Investment Return Representation: ¹⁴⁸

160 However, it is important to consider the evidence of the Plaintiffs on the Four Representations in their context. While the Defendants rely on the purported concessions made by the Plaintiffs and Chang at the trial that the Four Representations were true, it is clear that their responses were given not because they themselves believed or knew the Four Representations were true as a matter of fact, but because they relied on Wendy whom they had trusted as their “teacher/mentor” when she had made the Four Representations. Therefore, their evidence at the trial that the Four Representations were true is based solely on their belief in their “teacher/mentor”, Wendy, at the time the Four Representations were made to them. On this basis, I would be slow to simply conclude from what was said by the Plaintiffs and Chang at the trial that the Four Representations were true. Rather, the evidence as a whole should be carefully examined to determine whether the Four Representations were true or false.

161 First, I shall consider whether the Brazilian Government Representation was false as alleged by the Plaintiffs. Cindy stated in Court that the main evidence the Plaintiffs are relying on to support their claim that the Brazilian Government Representation was false are from two newspaper reports which purportedly carry statements by the Brazilian embassy in Singapore and the then-Brazilian ambassador to Singapore. This is Cindy’s evidence in Court during the cross-examination by Ms Oei: ¹⁴⁹

162 The two newspaper reports in the “TODAY” newspaper published on 19 August 2014 and 20 August 2014 respectively which the Plaintiffs rely on are reproduced below: ¹⁵⁰

163 The newspaper reports which the Plaintiffs rely on to support their assertion that the Brazilian Government Representation was false are plainly hearsay evidence and, thus, inadmissible. The maker of the statements, ie, a representative from the Brazilian embassy in Singapore or the Brazilian ambassador to Singapore, was not present in Court to give evidence. Instead, the Plaintiffs seek to rely on the report of the journalist, Tan Weizhen, who wrote the two newspaper reports to establish the truth of the contents of the newspaper reports, ie, that the Casa Nova Project and the Bosque Project were not approved and supported by the Brazilian government as social housing developments, and that the Brazilian Government Representation was false. However, Tan Weizhen was also not called by the Plaintiffs to testify in Court.

164 Section 61 of the Evidence Act 1893 (2020 Rev Ed) (the “Evidence Act”) states that all facts may be proved by oral evidence and s 62 states that oral evidence must be direct. Further, s 32 of the Evidence Act makes it clear that in the absence of the maker of a statement in court, a written or oral statement of relevant facts can only be admitted if the party seeking to adduce that statement can bring it within one of the exceptions set out in s 32 of the Evidence Act. The Plaintiffs have not, however, sought to establish the facts that would allow the operation of any of the exceptions set out in s 32 of the Evidence Act. Therefore, the newspaper reports are inadmissible and cannot be relied upon as evidence to support the Plaintiffs’ claim that the Brazilian Government Representation was false.

165 In any case, a review of the contents of the two newspaper reports show that they do not necessarily establish the Plaintiffs’ claim that the Brazilian Government Representation was false. Rather, they contain statements by the Brazilian ambassador calling on Ecohouse Brazil or Ecohouse UK to prove its links to the Brazilian government. I highlight an excerpt of this from the newspaper report of 20 August 2014:

166 In view of the above, I find that the Plaintiffs have not produced sufficient evidence to support their claim that the Brazilian Government Representation was false.

167 I shall next consider the Escrow Representation. Based on the terms of the Casa Nova Escrow Agreement and the Bosque Escrow Agreement (collectively referred to as the “two Escrow Agreements”) signed by the Plaintiffs, the Plaintiffs’ funds could be disbursed from the escrow account maintained by Sanders & Co in situations other than for the building of the invested units. The terms under which funds could be released from the escrow account are set out in Clause 8 of both the Casa Nova Escrow Agreement and the Bosque Escrow Agreement. ¹⁵¹ As Clause 8 in the two Escrow Agreements are largely similar, I set out only Clause 8 of the Casa Nova Escrow Agreement below: ¹⁵²

168 The contents of Clause 8 of the Casa Nova Escrow Agreement and the Bosque Escrow Agreement are similarly found in Clause 5.2 of the Casa Nova SPA and the Bosque SPA. ¹⁵³ As Clause 5.2 in the Casa Nova SPA and the Bosque SPA are largely similar, I set out only Clause 5.2 of the Casa Nova SPA below: ¹⁵⁴

169 It is patently clear from the above terms of the Casa Nova Escrow Agreement, the Bosque Escrow Agreement, the Casa Nova SPA and the Bosque SPA that 25% of the purchase price paid by the Plaintiffs into the escrow account could be released almost immediately upon payment by the Plaintiffs to be used towards payment of marketing, commissions and any other legitimate expenditure required to be paid out by Ecohouse Brazil. Further, the remaining 75% of the purchase price in the escrow account could be released so long as legitimate receipts and invoices for amounts expended for the benefit of the Casa Nova Project or the Bosque Project were produced by Ecohouse Brazil which were certified by an independent accountant. Nowhere in the Casa Nova SPA, the Bosque SPA or the two Escrow Agreements was there a requirement that the funds in the escrow account be released only for the building of the invested units as presented by Wendy.

170 During the cross-examination by Mr Goh, Wendy conceded that the Escrow Representation found in the 13 August 2012 email which she had sent was false. Further, Wendy acknowledged that she had received a draft escrow agreement from Anthony in June 2012 which contained a term substantially similar to Clause 8 of the two Escrow Agreements. Wendy, therefore, had received notice that the funds in the escrow account would be released to cover expenses other than those incurred for the building of the invested units. Wendy admitted in Court that the Escrow Representation was a mistake and it was false: ¹⁵⁵

171 It is clear that Clause 8.7 of both the Casa Nova SPA and the Bosque SPA stipulates that Ecohouse Brazil would pay investors of the Casa Nova Project and the Bosque Project a 20% return of the purchase price within 14 days at the end of one year. ¹⁵⁶ As Clause 8.7 in the Casa Nova SPA and the Bosque SPA are largely similar, I set out only Clause 8.7 of the Casa Nova SPA below: ¹⁵⁷

172 This investment return was embodied as a term in the Casa Nova SPA and the Bosque SPA which were signed and accepted by the Plaintiffs. Thus, the Investment Return Representation made by Wendy was not false. When questioned about the basis of the Plaintiffs’ claim that the Investment Return Representation was false, Cindy explained that the Investment Return Representation was false because she did not get the 20% return as promised: ¹⁵⁸

173 The fact that the Plaintiffs did not ultimately receive their 20% return as promised does not make the Investment Return Representation false. At best, this would be a breach of contract on the part of Ecohouse Brazil. It would have been entirely open for the Plaintiffs to pursue a claim of breach of contract against Ecohouse Brazil. However, the fact remains that Wendy’s representation, ie, that the investors would receive a 20% return at the end of one year, did appear in the Casa Nova SPA and the Bosque SPA signed by the Plaintiffs. Therefore, the Investment Return Representation was not false.

174 The thrust of the Plaintiffs’ claim is that the Due Diligence Representation was false because no proper due diligence was actually done by Wendy and Joey.

175 These are the various aspects of the Due Diligence Representation made by Wendy:

(a) A six-figure sum had been invested on due diligence checks to ensure that the Casa Nova Project was government-approved and the investment was safe.

(b) Wendy and Joey had been monitoring the deal, ie, the Casa Nova Project by Ecohouse Brazil, for one year.

(c) Joey had gone to Brazil and met the Vice Governor and one of the heads of Caixa Bank.

(d) Fong had been engaged to read through all the documents, and she had studied, vetted, and read through the sale and purchase agreements and escrow agreements, and had tightened the terms in the investors’ favour.

(e) Wendy had done all the due diligence that was possible.

176 I shall first consider the claim that a six-figure sum had been invested on due diligence checks to ensure that the Casa Nova Project was government-approved and the investment was safe. During the trial, Wendy stated that the six-figure sum referred to the amount of S$110,745.00 paid to Fong for her engagement. A tax invoice and cheque were produced as evidence that this sum had, in fact, been paid to Fong. ¹⁵⁹ However, it is important to consider the context of Fong’s engagement. These are as follows:

(a) As a preliminary point, the tax invoice for the sum of S$110,745.00 was issued by Fong’s law firm, Fong Law Corporation, on 27 August 2012. ¹⁶⁰ This sum was thereafter paid by way of a cheque on 15 October 2012 issued by Ecohouse Asia Pacific. ¹⁶¹ Therefore, as of the 30 July 2012 Presentation, or when the 7 August 2012 email and the 13 August 2012 email were sent, no sum had actually been paid to Fong Law Corporation. I accept, however, that the Warrant to Act dated 9 July 2012 which was adduced in evidence had set out the estimated costs as being in the range of S$80,000.00 to S$100,000.00. ¹⁶²

(b) Wendy had informed the investors and the Plaintiffs that a six-figure sum had been invested on due diligence checks. But the reality is that a six-figure sum had not been paid to Fong solely for the purpose of due diligence checks. Rather, as Fong had stated in her affidavit, her primary role was as follows: ¹⁶³

From the above, it is clear that Fong’s primary role, in fact, was to assist with structuring the JV, ie, Ecohouse Asia Pacific. This was the primary reason for Joey to engage Fong.

(c) It is also clear from Fong Law Corporation’s tax invoice that a large part of the work done revolved around the structuring of the JV, ie, Ecohouse Asia Pacific. Although Wendy attempted to initially frame the JV as being “part of the due diligence” done for the Casa Nova Project because “everything is to be able to support the investors”, ¹⁶⁴ the JV Agreement clearly sets out the purpose of the JV: ¹⁶⁵

Therefore, Wendy’s attempt to frame the JV as being part of the due diligence done for the Casa Nova Project cannot be accepted. The JV was primarily meant to assist Ecohouse Brazil to market its residential developments and sell units to investors in the Asia Pacific region. Fong’s primary role, then, was to assist with the structuring of the JV.

(d) It would, therefore, have been false and a gross exaggeration to state that a six-figure sum had been invested on due diligence checks. This is clearly misleading because when the Due Diligence Representation was made at the 30 July 2012 Presentation and in the 13 August 2012 email, the due diligence checks had not been completed by Fong and Wendy had not received Fong’s tax invoice.

177 Further, it is important to highlight that it was not even Wendy or Joey who paid the sum of S$110,745.00. While Ecohouse Asia Pacific was the entity which issued a cheque to Fong Law Corporation, the funds came from Ecohouse UK or, more specifically, Anthony. When questioned by the Court, both Wendy and Joey agreed that the moneys paid to Fong Law Corporation came from Anthony:

(a) Wendy agreed that the moneys paid to Fong Law Corporation was from Anthony through Ecohouse UK. This was acknowledged by Wendy in Court: ¹⁶⁶

(b) Similarly, Joey agreed that the moneys paid to Fong Law Corporation was from Anthony through Ecohouse UK. Joey also admitted this in Court: ¹⁶⁷

178 Therefore, Wendy should not have misled the investors and the Plaintiffs that a six-figure sum was incurred to conduct due diligence checks. Further, Wendy did not disclose to the investors and the Plaintiffs that the six-figure sum was paid for by Anthony through Ecohouse UK. Thus, this was, in reality, a due diligence exercise conducted by the developer to check itself, ie, Ecohouse Brazil. Wendy suppressed this serious and material conflict of interest from the investors and the Plaintiffs. As I have mentioned above at [138(b)], Wendy gave the wrong impression to the investors and the Plaintiffs that the Defendants paid for the purported due diligence exercise to Fong.

179 I shall next consider the claim that Wendy and Joey had been monitoring the deal, ie, the Casa Nova Project by Ecohouse Brazil, for one year. Before I deal with this issue, I wish to comment on the Plaintiffs’ allegation that it was represented that Joey was in Brazil for a year to conduct a due diligence exercise on the Casa Nova Project. Wendy and Joey denied this allegation. Instead, Wendy submits that her representation was that she was monitoring the Casa Nova Project for a year, rather than a representation that Joey was in Brazil for a year. From the evidence, particularly the 13 August 2012 email, it is more likely that the representation made was that Wendy was monitoring the Casa Nova Project for a year. However, this allegation of monitoring the Casa Nova Project for a year was also not true. This claim was clearly false for the following reasons:

(a) From the evidence, Wendy’s involvement in the Casa Nova Project arose as a result of Joey asking her to market the Casa Nova Project to members of the WK Investment Network Yahoo Group. ¹⁶⁸ Based on the document prepared jointly by the parties setting out the chronology of events, Joey was first approached to discuss the marketing of the Casa Nova Project in or around March 2012. ¹⁶⁹ Therefore, if Joey was only introduced to the Casa Nova Project in or around March 2012, it is simply not possible for Wendy or Joey to have monitored the Casa Nova Project for a period of one year as of the date of the 30 July 2012 Presentation, the 7 August 2012 email or the 13 August 2012 email.

(b) Next, from the contemporaneous documentary evidence, Joey had received an email dated 19 June 2012 from one H B Ooi (“Ooi”), another marketing agent, introducing him to the Casa Nova Project. ¹⁷⁰ Based on Joey’s evidence, by this time, Joey had already been introduced to the Casa Nova Project by Winstorn. ¹⁷¹ However, as at 19 June 2012, in Joey’s reply to Ooi, Joey was only expressing his interest that he “like[d] this project a lot”. Therefore, even based on the contemporaneous email, there is little to suggest that Wendy or Joey had monitored the Casa Nova Project for a period of one year.

(c) Wendy has presented a narrative that she had, in fact, been monitoring Ecohouse Brazil’s social housing projects in general for one year, giving the impression that she was monitoring the Casa Nova Project for a year. ¹⁷² In this regard, Wendy stated that she had organised the presentations for an Ecohouse UK project, the Arco Iris Project, in August 2011 but she was not marketing the Acro Iris Project. ¹⁷³ This was while Wendy was working under the auspices of Executive Directions. According to Wendy, Winstorn was the main marketing agent for the Arco Iris Project. Winstorn asked Wendy to introduce investors to the Arco Iris Project on the promise of giving her a commission for each referral. ¹⁷⁴ I fail to see how Wendy’s role in organising presentations for the Arco Iris Project could translate to Wendy having monitored “the deal” for one year. Even if Wendy had been monitoring Ecohouse Brazil’s social housing projects in general rather than just the Casa Nova Project, there is no evidence that she had been, in fact, monitoring Ecohouse Brazil’s social housing projects for a period of one year. Even if it were true that she was monitoring Ecohouse Brazil’s social housing projects for a period of one year, the Due Diligence Representation would still have been misleading as Wendy had informed the investors and the Plaintiffs that she was monitoring “the deal”, ¹⁷⁵ which has to be the Casa Nova Project, for a year. The fact that she merely organised presentations for the Arco Iris Project in August 2011, ie, a year before the 13 August 2012 email on the Casa Nova Project, cannot lead to the conclusion that she had been monitoring the latter deal for one year. This simply defies logic and cannot be accepted. Therefore, this aspect of the Due Diligence Representation was false.

180 I shall now deal with Joey’s trip to Brazil in June 2012 where he claimed that he was introduced by Anthony to the Vice Governor and one of the heads of Caixa Bank. Joey has produced an email setting out a proposed flight itinerary for his trip to Brazil in June 2012. ¹⁷⁶ Thus, it is likely that Joey was in Brazil in June 2012. The more fundamental issue is whether Joey did conduct a satisfactory due diligence exercise when he was in Brazil. Joey alleged that Anthony introduced Elali, Anthony’s lawyer, to him in Brazil. Joey was shown a number of legal documents by Elali relating to the titles of the land, development permits, etc. ¹⁷⁷ But these were in Portuguese and Joey acknowledged that he could not read and understand Portuguese. He had essentially relied on Elali to explain what the respective documents were. ¹⁷⁸ Thus, Joey would not have known whether these documents were what Elali represented them to be. However, the impression given by Wendy to the investors and the Plaintiffs when she made the Due Diligence Representation was that Joey had done a thorough due diligence exercise on the Casa Nova Project when he was in Brazil. This would, therefore, have been clearly false.

181 I shall next consider the claim that Fong had been engaged to read through all the documents, and that she had studied, vetted, and read through the sale and purchase agreements and the escrow agreements, and had tightened the terms in the investors’ favour. It is undisputed by the parties that Fong had been engaged to review the various agreements. This much is clear from the list of work done as stated in the tax invoice issued by Fong Law Corporation. Therefore, this aspect of the Due Diligence Representation was true, though Fong was engaged by Joey more for the purposes of the JV (see [176(b)] and [176(c)] above).

182 Finally, I shall consider the claim by Wendy that she had done all the due diligence that was possible. Apart from the work done by Fong which I have dealt with at [176]–[177] above, Wendy and Joey point to various due diligence reports and legal opinions which they had obtained from various lawyers in support of their claim that they had, in fact, done extensive due diligence. These comprised the following:

(a) a due diligence report on the Casa Nova Project prepared by a Brazilian lawyer named Gabriela Medeiros (“Gabriela”) dated 2 July 2012 which was commissioned by Ecohouse Brazil (“Gabriela’s Casa Nova Due Diligence Report”); ¹⁷⁹

(b) Elali’s Casa Nova Due Diligence Report dated 5 September 2012; ¹⁸⁰ and

(c) a legal opinion about the Casa Nova Project prepared by a Brazilian lawyer named Lucas Patto de Melo e Sousa (“Lucas”) of Pires & Gonçalves Advogados Associados dated 5 September 2012 (“Lucas’ Legal Opinion on Casa Nova”). ¹⁸¹

183 There are various issues regarding the three documents relied on by Wendy and Joey. I shall consider these issues when I address the Plaintiffs’ claim of negligent misrepresentation against Wendy and Joey. More crucially, however, it is important to highlight at this stage that apart from Gabriela’s Casa Nova Due Diligence Report, the other two documents relied on by Wendy and Joey were not even in existence or in the possession of Wendy and Joey at the time the Due Diligence Representation was made, ie, at the 30 July 2012 Presentation and the 13 August 2012 email. Therefore, it was wrong for Wendy to have informed the investors and the Plaintiffs that she had done all the due diligence that was possible.

184 If the basis for Wendy’s claim is that the due diligence was done by Fong, the Due Diligence Representation would still have been false as Fong had not completed the due diligence exercise at the time of the 30 July 2012 Presentation or Wendy’s 13 August 2012 email to the investors and the Plaintiffs. When questioned by the Court, Fong’s evidence was that she had not completed her due diligence exercise until on or about 5 September 2012, though she continued to carry out due diligence even after 5 September 2012. This is Fong’s evidence in Court: ¹⁸²

185 Having examined the various aspects of the Due Diligence Representation, it is clear that the Due Diligence Representation in relation to the Casa Nova Project was substantially false.

186 I shall next consider the Due Diligence Representation in relation to the Bosque Project. It is even more obvious that the Due Diligence Representation was false in relation to the Bosque Project for the following reasons:

(a) First, there would have been no basis to state that: (i) a six-figure sum had been invested on due diligence checks to ensure that the Bosque Project was government-approved and the investment was safe; and (ii) that Fong had been engaged to read through all the documents, and she had studied, vetted, and read through the sale and purchase agreements and escrow agreements, and had tightened the terms in the investors’ favour. When questioned further by the Court, Fong made clear that she had no involvement in the Bosque Project: ¹⁸³

(b) Second, as I have highlighted above at [179] in relation to the Casa Nova Project, the claim that Wendy and Joey had been monitoring the deal, ie, the Bosque Project by Ecohouse Brazil, for one year was clearly false.

(c) Third, Joey, upon being questioned by the Court, conceded that the only due diligence report that was obtained and relied on by Wendy and Joey for the Bosque Project was a due diligence report prepared by Elali dated 20 September 2012 which was commissioned by Ecohouse Brazil (“Elali’s Bosque Due Diligence Report”). This is Joey’s evidence in Court: ¹⁸⁴

What was the basis, then, to state that Wendy had done all the due diligence that was possible? The due diligence done for the Bosque Project was to simply obtain a report from Elali which was commissioned by Ecohouse Brazil. This cannot, in any way, mean that Wendy had done all the due diligence that was possible.

187 Having examined the various aspects of the Due Diligence Representation, it is clear that the Due Diligence Representation in relation to the Bosque Project was also substantially false.

188 For the reasons above, I find that of the Four Representations made, only the Escrow Representation and the Due Diligence Representation were false at the time when Wendy represented to the investors and the Plaintiffs. I shall next consider whether Wendy and Joey knew that the Escrow Representation and the Due Diligence Representation were false.

189 For fraudulent misrepresentation, as I have stated above at [101], the Plaintiffs must show that the Escrow Representation and Due Diligence Representation were made by Wendy and Joey: (a) knowingly; (b) without belief in its truth at all; or (c) recklessly, without caring whether it be true or false.

190 This is an undoubtedly high standard that the Plaintiffs have to meet. The Plaintiffs have not adduced evidence to support their claim that Wendy and Joey knew that the Escrow Representation and Due Diligence Representation were completely false or had no belief in their truth or acted recklessly at the time the representations were made. Instead, the Plaintiffs appeared to rely solely on some of the false statements in the Escrow Representation and Due Diligence Representation to draw an inference that the representations were made (a) knowingly; (b) without belief in its truth at all; or (c) recklessly. ¹⁸⁵ However, as I have pointed out at the oral closing submissions of the parties, this is not a case in which the Escrow Representation and the Due Diligence Representation were wholly untrue. Clearly, there were serious embellishments and exaggeration in the Due Diligence Representation but the evidence does not seem to suggest that Wendy and Joey knew that the Escrow Representation and Due Diligence Representation were totally false or had no belief in their truth or acted recklessly at the time the representations were made. Wendy and Joey had over-reached and over-promised the investors and the Plaintiffs in their zest to market the Casa Nova Project and the Bosque Project.

191 The context surrounding the 13 August 2012 email is important when addressing the issue of whether Wendy intended for the Plaintiffs to rely on the Escrow Representation and the Due Diligence Representation. Wendy, in her affidavit, stated that the 13 August 2012 email was sent to members of the WK Investment Network Yahoo Group as a response to an email which had been sent by Jerome, who was Wendy’s former partner while she was at Executive Directions. This is the relevant excerpt from Wendy’s affidavit: ¹⁸⁶

192 Jerome’s email in 2012 was not adduced in evidence. However, Wendy claims that the email sent by Jerome which she was responding to was similar to Jerome’s emails of 4 March 2013 and 5 March 2013. Therefore, it may be necessary to consider Jerome’s emails. As Jerome’s emails of 4 March 2013 and 5 March 2013 are similar, I only reproduce Jerome’s email of 4 March 2013 which reads as follows: ¹⁸⁷

193 It is clear from Jerome’s email of 4 March 2013 that Jerome was seeking to warn members of the WK Investment Network Yahoo Group about the Casa Nova Project or projects akin to the Casa Nova Project which offered a 20% return to investors. It is in this context that Wendy sent the 13 August 2012 email to the investors and the Plaintiffs. Seen in that light, the 13 August 2012 email was an email meant to refute the concerns raised by Jerome. In fact, during the cross-examination by Mr Goh, Wendy stated that the 13 August 2012 email, which was on the Casa Nova Project, was meant to counter the caution that had been administered by Jerome. This is Wendy’s response in Court: ¹⁸⁸

194 However, Wendy claims that she did not intend, by way of the 13 August 2012 email, for investors to rely on the representations made in the 13 August 2012 email. Instead, Wendy stated at the trial that she was merely clarifying that there were other important points to consider beyond what Jerome had cautioned when investing overseas. This is Wendy’s explanation in Court: ¹⁸⁹

195 In the same breath, though, Wendy accepted at the trial that all the points she had made in the 13 August 2012 email clearly were to assure the investors and the Plaintiffs that it was safe to invest in the Casa Nova Project. This is Wendy’s evidence in Court: ¹⁹⁰

196 It is clear that, by sending the 13 August 2012 email, Wendy intended to convince members of the WK Investment Network Yahoo Group that the Casa Nova Project was too good an investment to be missed. In that context, the representations made in the 13 August 2012 email were meant to refute Jerome’s cautionary email. It was particularly important for Wendy to send out the 13 August 2012 email so that the sale of the Casa Nova Project would not be adversely affected. It is clear, therefore, that the intention of the 13 August 2012 email sent by Wendy was to urge investors to rely on the representations in the 13 August 2012 email and act upon it by proceeding to invest in the Casa Nova Project despite Jerome’s cautionary email.

197 Therefore, the evidence shows that Wendy intended for the Plaintiffs to rely on the Escrow Representation and the Due Diligence Representation.

198 For the Escrow Representation, I note that the Plaintiffs conceded at the trial that they had reviewed the terms of the Casa Nova SPA and the Bosque SPA as well as the Casa Nova Escrow Agreement and the Bosque Escrow Agreement before they appended their signatures on these documents. The terms in the Casa Nova SPA, the Bosque SPA and the two Escrow Agreements stated clearly that the funds in the escrow account could be released for purposes other than the building of the Plaintiffs’ invested units. In fact, despite knowing that these terms were not favourable to them, Cindy conceded at the trial that the Plaintiffs just accepted them and did not protest. This is Cindy’s evidence in Court: ¹⁹¹

199 It is clear from the above, despite the terms of the release of moneys from the escrow account being different from the Escrow Representation, Cindy conceded that the Plaintiffs accepted the terms because “it was okay with [them]”. Therefore, it is clear that, at the point of signing the Casa Nova SPA and the Casa Nova Escrow Agreement and the Bosque SPA and the Bosque Escrow Agreement, the Plaintiffs had not relied on the Escrow Representation made by Wendy but had accepted the terms stated in those documents that they signed.

200 In relation to the Due Diligence Representation, however, Wendy agrees that there would have been some reliance by the Plaintiffs on the representations made by her. In Wendy’s affidavit, she stated as follows: ¹⁹²

201 While Wendy has tried to argue that the Plaintiffs would have also relied on the presentations made by Anthony, as I have set out above at [100], the Court of Appeal in Panatron clarified that the misrepresentation need not be the sole inducement to the plaintiff. In the present case, the evidence of the Plaintiffs has been consistent – they relied on the Due Diligence Representation made by Wendy when they decided to purchase residential units in the Casa Nova Project and the Bosque Project. Cindy mentioned in Court that this was because she trusted Wendy: ¹⁹³

202 I pause here to mention that there is other contemporaneous evidence (though after the Casa Nova SPA and the Bosque SPA were signed) which shows that the Plaintiffs had trusted and relied on the Due Diligence Representation made by Wendy. In particular, when it was known to the Plaintiffs in December 2012 that there was a dispute between Wendy and Ecohouse Asia Pacific, Cindy sent an email to Dean Oakford, an employee of Ecohouse UK, on 6 December 2012. In that email, Cindy had stated as follows: ¹⁹⁴

203 It is clear from the email above that, even as at 6 December 2012, Cindy held steadfast in her belief in Wendy and had specifically trusted Wendy because “she is Singaporean and she did due diligence in checking and protecting our investments” [emphasis added]. In my view, this is clear, contemporaneous evidence that the Plaintiffs had, in 2012, relied on the Due Diligence Representation made by Wendy when they decided to sign the Casa Nova SPA and the Bosque SPA.

204 In the circumstances, I find that the Plaintiffs did rely substantially on the Due Diligence Representation made by Wendy when they decided to sign the Casa Nova SPA and the Bosque SPA for the purchase of residential units in the Casa Nova Project and the Bosque Project. Wendy’s assurance that a thorough and comprehensive due diligence which costed a six-figure sum gave a good boost of confidence to the investors and the Plaintiffs that the Casa Nova Project and the Bosque Project were safe and secure investments.

205 Before moving away from the discussion on reliance, I pause to consider the Defendants’ contention that the Plaintiffs chose not to ask questions or do their own due diligence checks. The Defendants have stated that the general rule when purchasing a property is caveat emptor and that a vendor has no obligation to disclose defects of title save where they are latent, citing Huang Ching Hwee v Heng Kay Pah and another [1990] 2 SLR(R) 666 at [25]–[26] and Indian Overseas Bank v Cheng Lai Geok [1991] 2 SLR(R) 574 at [46]. ¹⁹⁵ The Defendants submit that the Plaintiffs were well-qualified persons and they had knowledge and experience of the real estate industry but chose not to ask questions or do their own due diligence. Thus, they should not be entitled to claim against Wendy and Joey.

206 In Ong Keh Choo v Paul Huntington Bernardo and another [2020] SGCA 69 (“Ong Keh Choo”), the Court of Appeal had explained that the maxim caveat emptor is a basic legal principle in commercial transactions which means “buyer beware”, ie, it is for the buyer to take his own precautions and familiarise himself with the terms of a document he is accepting: Ong Keh Choo at [65].

207 It seems reasonable and prudent that the Plaintiffs ought to have conducted their own checks and should have performed their own due diligence before entering into the transactions for the Casa Nova Project and the Bosque Project as significant monetary amounts were involved.

208 However, this does not mean that the Plaintiffs were not entitled to rely on the Due Diligence Representation made by Wendy and Joey or that Wendy and Joey are able to avoid liability for a fraudulent (or negligent) misrepresentation because of the Plaintiffs’ failure to conduct their own due diligence checks. The evidence shows that, particularly for the Casa Nova Project, the Plaintiffs did not have significant opportunity and time to conduct their own due diligence checks. This was demonstrated by the following evidence:

(a) First, Wendy acknowledged that a reservation booth had been set up at the 30 July 2012 Presentation for the Casa Nova Project. This reservation booth was to allow investors to immediately reserve units in the Casa Nova Project after the 30 July 2012 Presentation. ¹⁹⁶ Therefore, as the Plaintiffs have stated in their closing submissions, it was envisaged that the investors would sign up for units in the Casa Nova Project immediately by simply relying on all that was presented at the 30 July 2012 Presentation and without the investors needing to conduct their own due diligence. Further, Wendy had assured the investors and the Plaintiffs that she had done all the due diligence and that it was a safe investment. ¹⁹⁷

(b) Second, the 7 August 2012 email sent out by Wendy was primarily to inform the investors and the Plaintiffs to submit the signed sale and purchase agreements within two to three days of receiving their sale and purchase agreements. ¹⁹⁸ At the trial, Wendy acknowledged these instructions and she conceded that two to three days would not have been sufficient for any due diligence to be conducted by the investors and the Plaintiffs. ¹⁹⁹ Wendy had assured the investors and the Plaintiffs that she had done thorough and comprehensive due diligence checks and had invested a six-figure sum for the due diligence exercise. Hence, she assured the investors and the Plaintiffs that the Casa Nova Project was a “100% secure Brazilian Property Investment”. ²⁰⁰

209 In the circumstances, the Plaintiffs were, therefore, amply justified to have relied on the Due Diligence Representation made by Wendy. Further, I do not accept the Defendants’ contention that the principle of caveat emptor means that the Plaintiffs should have conducted their own due diligence checks and were, therefore, not entitled to rely on any representation made in relation to the Casa Nova Project and the Bosque Project.

210 In summary, while the Four Representations were made by Wendy and endorsed by Joey, these did not amount to fraudulent misrepresentations by Wendy or Joey. Out of the Four Representations, only the Escrow Representation and the Due Diligence Representation were false. However, crucially, the Plaintiffs have failed to prove, on the balance of probabilities, that the Escrow Representation and the Due Diligence Representation were completely untrue and made by Wendy and Joey: (a) knowingly; (b) without belief in its truth; or (c) recklessly, without caring whether it be true or false. Hence, the Plaintiffs have failed to prove their claim of fraudulent misrepresentation.

211 On the issue of reliance, while Wendy had intended for the Plaintiffs to rely on the Escrow Representation and the Due Diligence Representation, the evidence showed that the Plaintiffs had not, in fact, relied on the Escrow Representation when they signed the Casa Nova Escrow Agreement and the Bosque Escrow Agreement for the purchase of residential units in the Casa Nova Project and the Bosque Project. The terms of the two Escrow Agreements were clearly different from the Escrow Representation and the Plaintiffs knew the terms of the two Escrow Agreements but nevertheless proceeded to sign the two Escrow Agreements. Hence, the Plaintiffs did not rely on the Escrow Representation.

212 In relation to the Due Diligence Representation, the Plaintiffs had relied on the Due Diligence Representation when they decided to sign the Casa Nova SPA and the Bosque SPA for the purchase of residential units in the Casa Nova Project and the Bosque Project. The Due Diligence Representation made by Wendy gave the Plaintiffs an assurance that the Casa Nova Project and the Bosque Project were safe and secure investments.

213 Section 2(1) of the MRA provides as follows:

214 The Plaintiffs have sought to pursue a claim against the Defendants under s 2(1) of the MRA. However, as was stated in Trans-World (Aluminium) Ltd v Cornelder China (Singapore) [2003] 3 SLR(R) 501 (at [124]), a claim under the MRA is founded in contract, ie, there must be a contract between the representor and representee.

215 It is undisputed that the Defendants were not parties to any contract with the Plaintiffs. ²⁰¹ The parties to the Casa Nova SPA and the Bosque SPA were the Plaintiffs and Ecohouse Brazil, while the parties to the two Escrow Agreements were the Plaintiffs, Sanders & Co and Ecohouse Brazil. Therefore, while Wendy and Joey may have made the Due Diligence Representation to the Plaintiffs, the fact remains that it was not Joey and Wendy (or any of the Defendants) who were parties to the contract which the Plaintiffs entered into. For this reason, the Plaintiffs’ claim under s 2(1) of the MRA must fail. I note that during the oral closing submissions by the parties, Mr Goh conceded that the Plaintiffs’ case under s 2(1) of the MRA could not succeed as the Defendants were not parties to any contract with the Plaintiffs. ²⁰²

216 I shall next consider the Plaintiffs’ claim of negligent misrepresentation against Wendy and Joey.

217 The elements that need to be proven to establish a claim of negligent misrepresentation which were set out in Ma Hongjin v Sim Eng Tong [2021] SGHC 84 (“Ma Hongjin”) at [20], citing Spandeck and IM Skaugen SE and another v MAN Diesel & Turbo SE and another [2018] SGHC 123 (“IM Skaugen”) at [121] are as follows:

(a) the defendant made a false representation of fact;

(b) the representation induced the plaintiff’s actual reliance;

(c) the defendant owed the plaintiff a duty to take reasonable care in making the representation;

(d) the defendant breached that duty of care; and

(e) the breach caused damage to the plaintiff.

218 As observed by the court in Bay Lim Piang v Lye Cher Kang [2023] SGHC 13 (at [99]) citing Ma Hongjin (at [21]), the common elements for a claim in fraudulent misrepresentation and negligent misrepresentation are that there must be a false representation of fact, inducement and actual reliance.

219 In the case of fraudulent misrepresentation, it must be shown that the person who makes the false representation does so (a) knowingly; (b) without belief in its truth at all; or (c) recklessly, without caring whether it be true or false. However, in a case of negligent misrepresentation, the issue is whether the representor owes to the representee a duty of care and whether this duty was breached by a failure to take reasonable care to ensure that the representation is true.

220 Therefore, even though I have found above at [210] that the Plaintiffs have failed to make out a case of fraudulent misrepresentation against Wendy and Joey, this does not mean that the Plaintiffs’ case of negligent misrepresentation also must fail. The key issue, when considering the Plaintiffs’ case of negligent misrepresentation, is whether Wendy and Joey owed a duty of care to the Plaintiffs and whether this duty was breached as a result of any negligent misrepresentation arising from the false statements made by them.

221 In relation to the issue of duty of care, according to Spandeck, to establish a duty of care, the plaintiff must show that the harm is factually foreseeable, the relationship between the parties is sufficiently proximate, and that there are no policy considerations that negate the finding of a duty of care (see Spandeck at [77], [81] and [83]).

222 On the requirement of factual foreseeability, the Court of Appeal in Spandeck stated (at [76]) that this is “a threshold question which the court must be satisfied is fulfilled, failing which the claim does not even take off”. Further, citing Andrew Phang Boon Leong J (as he then was) in Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric (practising under the name and style of W P Architects) [2007] 1 SLR(R) 853 (at [55]), the requirement of factual foreseeability “will almost always be satisfied, simply because of its very nature and the very wide nature of the ‘net’ it necessarily casts” [emphasis in original omitted]: Spandeck at [75]. The focus is on the foreseeability of harm, in general, as well as the class of persons who may be affected by the negligent act or omission (as opposed to a specific identified person): Gary Chan Kok Yew and Lee Pey Woan, The Law of Torts in Singapore (Academy Publishing, 2011) at para 03.042.

223 On the requirement of proximity, the Court of Appeal in Spandeck stated (at [79]) that this is “a composite idea, importing the whole concept of the necessary relationship between the claimant and the defendant”. It refers to the existence of “sufficient legal proximity between the claimant and defendant for a duty of care to arise. The focus here is necessarily on the closeness of the relationship between the parties themselves” [emphasis in original omitted]: Spandeck at [77]. This embraces physical, circumstantial and causal proximity as well as notions of assumption of responsibility and reliance (see Sutherland Shire Council v Heyman (1985) 60 ALR 1 at 55–56, which was cited with approval in Spandeck at [78]):

224 If the requirements of factual foreseeability and proximity are satisfied, a prima facie duty of care would arise. Policy considerations would thereafter apply to determine whether or not to negate this duty based on the specific factual matrix: Spandeck at [83].

225 In view of my findings that only the Due Diligence Representation made by Wendy and Joey was false and the Plaintiffs relied on it to invest in the Casa Nova Project and the Bosque Project, I shall focus my analysis on whether the Plaintiffs have made out a case of negligent misrepresentation against Wendy and Joey on the basis of the Due Diligence Representation.

226 I shall now consider whether Wendy and Joey owed the Plaintiffs a duty of care.

227 It was factually foreseeable that the Plaintiffs would suffer loss if Wendy and Joey did not take reasonable care in ensuring the accuracy of the Due Diligence Representation to the Plaintiffs for the Casa Nova Project and the Bosque Project. There was also a clear assumption of responsibility by Wendy and Joey.

228 It is important to recognise that Joey was the managing director of Ecohouse Asia Pacific, the JV entity that was tasked to market the Casa Nova Project and the Bosque Project to local investors. Wendy and Joey had the responsibility to ensure that the Due Diligence Representation was correctly and properly communicated to the investors and the Plaintiffs, failing which they may suffer loss or damage. Wendy and Joey knew or ought to have known of such reliance by the investors and the Plaintiffs. Therefore, it is abundantly clear that there is sufficient legal proximity between the Plaintiffs and Wendy and Joey for a duty of care to arise.

229 Therefore, Wendy and Joey did owe a prima facie duty of care to the Plaintiffs.

230 At the trial, Ms Oei acknowledged that it is difficult to argue that Wendy did not have a duty of care towards the interested investors and the Plaintiffs. This is the response from Ms Oei upon query from the Court: ²⁰³

231 However, in closing submissions, Ms Oei has now changed her position and she submits that Wendy does not owe a duty of care to the Plaintiffs. ²⁰⁴ It is difficult for Wendy to legally support this change of position. As I have explained above, Wendy and Joey did owe a prima facie duty of care to the Plaintiffs.

232 On the issue of whether there is any policy consideration which would apply to negate this duty, I find that there is no policy consideration which militates against the imposition of a duty of care against Wendy and Joey.

233 I pause here to mention that the Plaintiffs have, during the trial, made references to various court judgments relating to the Plaintiffs’ New Zealand Investment. They did so in order to buttress their claim that Wendy and Joey owe them a duty of care.

234 In the Plaintiffs’ New Zealand Investment, David and Cindy had entered into various agreements with a New Zealand company called Albany Heights Villas Limited (“Albany”) for a “First Right of Refusal” in respect of three units in a residential housing project in New Zealand. Albany subsequently went into insolvent liquidation which resulted in David and Cindy suffering loss. David and Cindy thereafter pursued a claim of negligent misrepresentation against Faber Property Pte Ltd (“Faber”), a licensed estate agency, as well as its Key Executive Officer named Mr Sim and one Ms Seah who was an associate director of Faber and a licensed real estate salesperson. David’s and Cindy’s claim was that they had entered into the agreements with Albany by acting in reliance on six representations made to them by Faber, Mr Sim and Ms Seah. This included, inter alia, representations that all relevant and necessary due diligence checks on Albany had been done and everything was in order.

235 In Haw Wan Sim David and another v Faber Property Pte Ltd and others [2018] SGDC 143 (“Faber (DC)”), the District Court found that only Faber was liable to David and Cindy for negligent misrepresentation. The District Court found that Faber owed a duty of care to David and Cindy as they had voluntarily assumed responsibility to exercise care to avoid loss to the investors. The District Court dismissed their claims against Mr Sim and Ms Seah on the basis that the representations made by Mr Sim and Ms Seah were made as representatives of Faber and on behalf of Faber.

236 David and Cindy thereafter appealed against the decision of the District Court, seeking to overturn the District Court’s decision in part. In Haw Wan Sim David and another v Sim Tee Meng and another [2018] SGHC 272 (“Faber (HC)”), the High Court allowed David’s and Cindy’s appeal in respect of Mr Sim, but dismissed their appeal in respect of Ms Seah:

(a) In finding Mr Sim liable, the High Court found that there was nothing to suggest that Mr Sim had prefaced his statements with a disclaimer that he was speaking solely as the company, Faber, and was not undertaking any personal responsibility. Further, the High Court found that there was no intentional or deliberate structuring of the relationship between Mr Sim and the respondents (ie, David and Cindy) to preclude a tortious duty of care. The High Court found that Mr Sim had breached his duty of care by failing to make reasonable checks before making the representations.

(b) In relation to Ms Seah, while the High Court found that Ms Seah owed a personal duty of care to David and Cindy when she made the representations as she was a property agent, the standard of care expected of her did not require her to make such checks, and she therefore did not fall below the requisite standard of care. In this regard, the High Court found that Ms Seah was entitled to expect that Faber had conducted the due diligence checks to support the representations that she was asked to make.

237 Mr Sim thereafter appealed against the decision of the High Court. In Sim Tee Meng v Haw Wan Sin David and another [2019] SGCA 71 (“Faber (CA)”), the Court of Appeal dismissed Mr Sim’s appeal, affirming the High Court’s finding that Mr Sim owed David and Cindy a personal duty of care and that he had breached this duty of care by failing to make reasonable checks before making various representations.

238 The factual matrix in the Faber decisions and the present case is undeniably broadly similar, involving representations made by individuals marketing foreign property investments. However, there is a difference between the factual matrix of the Faber decisions and the present case. In the Faber decisions, one of the representations made was that Faber (acting through Mr Sim) had personally done all due diligence checks on the developer and the project. This is quite unlike the present case, where Wendy and Joey represented that they had invested a six-figure sum for the due diligence checks and engaged Fong and others to obtain various due diligence reports. It is clear from the evidence adduced at the trial that Wendy and Joey were effectively relying on due diligence reports prepared by various lawyers as well as the due diligence work carried out by Fong. Therefore, while the standard of care imposed on Mr Sim and Faber might have been higher because of the nature of the representation there, I am mindful that, in the present case, the focus must be on whether Wendy and Joey had breached their duty of care by way of the Due Diligence Representation made by Wendy based on the various due diligence reports they had in their possession as well as based on the due diligence work carried out by Fong.

239 Be that as it may, it is clear from the broad factual similarities between the Faber decisions and the present case that Wendy and Joey did clearly owe a duty of care to the Plaintiffs.

240 Wendy and Joey were promoting and marketing the Casa Nova Project and the Bosque Project. They had to exercise reasonable care in ensuring that the Due Diligence Representation made in relation to the Casa Nova Project and the Bosque Project by Wendy was true and accurate. In order to evaluate whether they exercised reasonable care when making the Due Diligence Representation, the issue is whether they had taken reasonable care in ensuring that due diligence had been satisfactorily completed for the Casa Nova Project and the Bosque Project at the time the representations were made. The material time to consider is: (a) 30 July 2012 (which was when the Casa Nova Project presentation took place) and 13 August 2012 (which was when Wendy had sent an email repeating the Due Diligence Representation) for the Casa Nova Project; and (b) 6 October 2012, which was when the Due Diligence Representation was made for the Bosque Project.

241 Thus, it is important to examine each of the steps taken by Wendy and Joey as well as the due diligence reports or legal opinions relied on by Wendy and Joey in support of their claim that they had done due diligence checks when they assured the investors and the Plaintiffs that the Casa Nova Project and the Bosque Project were safe investments. I shall consider the issues in turn.

242 I shall first consider the due diligence exercise purportedly carried out for the Casa Nova Project. At the trial, Wendy and Joey have made various claims to support their belief that due diligence had been satisfactorily completed for the Casa Nova Project.

243 The first claim made is that Joey had gone to Brazil in June 2012 and met with the Vice Governor and one of the heads of Caixa Bank. Joey was also introduced to Elali as the lawyer for Ecohouse Brazil by Anthony. Joey stated that Elali had shown him the title deeds, the building permits and Elali had stated that he would prepare a due diligence report. This is Joey’s evidence during the cross-examination by Mr Goh: ²⁰⁵

244 Before the trial, Joey had not stated anywhere that Elali had shown documents to him during his trip to Brazil in June 2012. This was first mentioned by Joey at the trial. However, this claim, even if it were true, could not have constituted satisfactory and proper due diligence. This is because, when questioned by the Court, Joey conceded that the documents supposedly shown to him by Elali were in Portuguese and that Joey was unable to read Portuguese. This is Joey’s evidence in Court: ²⁰⁶

245 In other words, Joey was unable to verify if the documents shown to him were, in fact, what Elali said they were during the trip in June 2012. Therefore, it simply cannot be said that this amounted to satisfactory and proper due diligence on Wendy’s and Joey’s part.

246 Wendy and Joey also relied on Gabriela’s Casa Nova Due Diligence Report dated 2 July 2012 as part of the due diligence checks done. I am mindful that the evidence adduced at the trial showed that Wendy and Joey had learnt sometime after the 30 July 2012 Presentation and the 7 August 2012 email and 13 August 2012 email that Gabriela was, in fact, Anthony’s step-daughter. ²⁰⁷ However, to assess whether Wendy and Joey had taken reasonable care for the purpose of due diligence in relation to the Casa Nova Project, the material time is when the Due Diligence Representation was made, ie, 30 July 2012 (when the Casa Nova Presentation took place) and 13 August 2012 (when the 13 August 2012 email was sent).

247 Wendy admitted that Gabriela’s Casa Nova Due Diligence Report which she relied upon was done at the request of the developer of the Casa Nova Project, Ecohouse Brazil. ²⁰⁸ This is also expressly mentioned in Gabriela’s Casa Nova Due Diligence Report. ²⁰⁹ The question, then, is whether it was reasonable for Wendy and Joey to have relied on Gabriela’s Casa Nova Due Diligence Report. The fact that Gabriela’s Casa Nova Due Diligence Report was requested by Ecohouse Brazil, the developer of the Casa Nova Project, should have immediately stood out as a red flag to Wendy and Joey. A due diligence report commissioned and paid for by the developer to be conducted on its own project would have, to the reasonable person, immediately raised questions about a potential conflict of interest. Instead, Wendy and Joey nevertheless relied on Gabriela’s Casa Nova Due Diligence Report as evidence of due diligence done to support the Due Diligence Representation which she had made. This could not have reasonably amounted to satisfactory and proper due diligence.

248 Next, Wendy and Joey rely on the due diligence work carried out by Fong. At the trial, Fong said that she had not completed her due diligence exercise on or about 13 August 2012. She had not completed the due diligence exercise until on or about 5 September 2012 and she continued to carry out due diligence even after 5 September 2012. Therefore, as at 30 July 2012 and 13 August 2012, Wendy and Joey should not have assumed that the due diligence exercise for the Casa Nova Project was completed by Fong. Wendy should not have informed or given the impression to the investors and the Plaintiffs that the due diligence exercise had been completed at the 30 July 2012 Presentation and in the 13 August 2012 email. Wendy went further and assured the investors and the Plaintiffs that the outcome of the due diligence checks was that the Casa Nova Project was a safe investment that should not be missed. She should have informed the investors and the Plaintiffs that the due diligence exercise was on-going.

249 Further, Wendy and Joey also rely on Elali’s Casa Nova Due Diligence Report. There are two issues with their reliance on Elali’s Casa Nova Due Diligence Report. First, as stated above at [183], Elali’s Casa Nova Due Diligence Report was only completed on 5 September 2012. Therefore, at the time the Due Diligence Representation was made, ie, 30 July 2012 (which was when the Casa Nova Project presentation took place) and 13 August 2012 (which was when Wendy had sent an email repeating the Due Diligence Representation), Wendy would not have been in possession of Elali’s Casa Nova Due Diligence Report. Moreover, Elali’s Casa Nova Due Diligence Report was not an independent report as it was commissioned and paid for by Ecohouse Brazil, the developer of the Casa Nova Project. This is a clear case of a conflict of interest situation.

250 I pause here to highlight that Joey was clearly aware of what a conflict of interest entailed. In the course of the trial, Joey was referred to the email dated 19 June 2012 between him and Ooi, another marketing agent who introduced him to the Casa Nova Project (see above at [179(b)]). When Ooi sought to introduce Joey to the Casa Nova Project, Joey’s instinctive response to Ooi was to ascertain his relationship with Ecohouse Group to understand whether there was any conflict of interest. This is Joey’s email to Ooi: ²¹⁰

251 At the trial, Joey accepted that he understood what a conflict of interest entailed. ²¹¹ Why, then, did he not take any issue with the fact that Gabriela’s Casa Nova Due Diligence Report and Elali’s Casa Nova Due Diligence Report were both requested by the developer of the Casa Nova Project, Ecohouse Brazil? Joey’s claim at the trial that there was no conflict of interest when considering Gabriela’s Casa Nova Due Diligence Report and Elali’s Casa Nova Due Diligence Report is unbelievable. ²¹²

252 Finally, Wendy and Joey relied on Lucas’ Legal Opinion on Casa Nova. There are a number of serious issues with relying on Lucas’ Legal Opinion on Casa Nova. First, as I had similarly highlighted above at [249] in relation to Elali’s Casa Nova Due Diligence Report, Lucas’ Legal Opinion on Casa Nova was only produced on 5 September 2012. Therefore, at the time the Due Diligence Representation was made, Wendy and Joey would not have been in possession of Lucas’ Legal Opinion on Casa Nova. Further, Lucas’ Legal Opinion on Casa Nova does not, in any way, support Wendy’s and Joey’s claim that proper due diligence had been done.

253 For context, it is worth highlighting that Lucas’ Legal Opinion on Casa Nova was produced because Joey and Fong learned that Gabriela was the step-daughter of Anthony. During the cross-examination by Mr Goh on the discovery that Gabriela was the step-daughter of Anthony, Fong stated as follows: ²¹³

254 Further, Lucas’ Legal Opinion on Casa Nova, in fact, questioned the basis of Gabriela’s Casa Nova Due Diligence Report and concluded with the following: ²¹⁴

255 It is, therefore, clear that based on Lucas’ Legal Opinion on Casa Nova, the state of due diligence in relation to the Casa Nova Project was not satisfactory as of 5 September 2012. What is even more telling, however, is the email correspondence between Fong and Lucas which took place after Lucas’ Legal Opinion on Casa Nova was produced. Soon after Lucas’ Legal Opinion on Casa Nova was produced, Lucas had received the purported titles of the land on which the Casa Nova Project units were to be built. However, after reviewing the purported titles, Lucas’ email of 17 September 2012 at 09.56am to Fong and Joey stated that the title only referred to a small parcel of land and more complete information was required for Lucas to be satisfied that the investment in the Casa Nova Project is “without any problem”. This is the email from Lucas to Fong which was copied to Joey: ²¹⁵

256 Thereafter, Fong replied via email on the same day to ask Lucas if this meant that Ecohouse Brazil did not have title to the land that was being sold to the Singapore investors. In Lucas’ reply of 17 September 2012 at 10.33am, Lucas stated that he required further documents and suggested that he speak to Gabriela to clarify the matter. This is Lucas’ reply email to Fong which was copied to Joey: ²¹⁶

257 Fong then replied via email on the same day instructing Lucas to speak to Gabriela. The only documentary evidence that followed this instruction was an email from Lucas on 17 September 2012 at 11.53pm stating that he would speak to Gabriela. This is Lucas’ email to Fong which was copied to Joey: ²¹⁷

258 However, the documentary trail detailing the correspondence with Lucas abruptly ends with this email. Joey testified at the trial that Lucas had spoken to him (ie, Joey) thereafter and assured him that the due diligence done was satisfactory. During the cross-examination by Ms Oei, Joey stated as follows: ²¹⁸

259 However, there is no documentary evidence to support this conclusion. Notably, Fong stated at the trial that she had no knowledge of what was discussed between Lucas and Joey after Lucas’ last email which was adduced as evidence. Fong’s evidence during the cross-examination by Mr Goh is as follows: ²¹⁹

260 It is illogical why Fong, who had been allegedly appointed by Joey to conduct due diligence on the Casa Nova Project, would not have been informed of Joey’s subsequent communications with Lucas. With the lack of documentary evidence to support Joey’s claim of the contents of what Lucas had communicated to him after Lucas’ last email, it is not prudent to accept Joey’s verbal version of the events. This is especially so, in light of my finding that Joey is not a reliable witness (at [267]–[269] below). Based on the documentary evidence then, it is clear that Lucas’ Legal Opinion on Casa Nova casted doubt on the state of the due diligence in relation to the Casa Nova Project. Therefore, it is unclear how, if at all, Lucas’ Legal Opinion on Casa Nova supports a finding that Wendy and Joey had reasonable grounds to believe in the truth of the Due Diligence Representation in relation to the Casa Nova Project.

261 On the evidence, it is difficult to accept that Wendy and Joey had taken reasonable care in ensuring that the Due Diligence Representation in relation to the Casa Nova Project was true and accurate at the material time the representation was made, ie, 30 July 2012 (which was when the Casa Nova Project presentation took place) and 13 August 2012 (which was when Wendy had sent an email repeating the Due Diligence Representation).

262 I shall now consider the due diligence purportedly carried out for the Bosque Project. It was conceded at the trial that the only due diligence carried out for the Bosque Project was Elali’s Bosque Due Diligence Report which was provided to Wendy and Joey.

263 However, when Wendy made the Due Diligence Representation at the 6 October 2012 Presentation, there would have been numerous red flags which would have been known or ought to have been known by Wendy and Joey. These are as follows:

(a) First, by 6 October 2012, there would have been the issue that Gabriela was the step-daughter of Anthony. This would have, undoubtedly, led a reasonable person to be concerned that Gabriela’s Casa Nova Due Diligence Report may not be reliable. In fact, based on what I have set out above at [253], it was clear that the discovery of Gabriela’s relationship to Anthony caused concern and led to the engagement of Lucas to provide Lucas’ Legal Opinion on Casa Nova. In fact, Wendy agreed at the trial that there was cause for concern about the relationship between Gabriela and Anthony which made Gabriela’s Casa Nova Due Diligence Report unsafe to rely on. ²²⁰ Joey himself acknowledged at the trial that Fong had concerns about Gabriela’s relationship with Anthony. ²²¹

(b) Next, Lucas’ Legal Opinion on Casa Nova dated 5 September 2012 and the emails exchanged between Lucas and Fong thereafter showed that there was clear doubt over Gabriela’s Casa Nova Due Diligence Report. While Joey stated in Court that this was eventually addressed between him and Lucas, there is no objective evidence to support this. This aspect of the evidence is also not in Joey’s affidavit. It was revealed for the first time in Court during cross-examination. As highlighted above at [252]–[260], based on the documentary evidence, it is clear that Lucas’ Legal Opinion on Casa Nova casted doubt on the state of the due diligence in relation to the Casa Nova Project.

264 Further, there is the fundamental issue that Elali’s Bosque Due Diligence Report was commissioned by the developer, Ecohouse Brazil. A due diligence report commissioned and paid for by the developer to be conducted on its own project would have, to the reasonable person, immediately raised an issue of a conflict of interest. As I have highlighted above at [251], Joey understood what a conflict of interest entailed, but he chose to ignore the conflict of interest.

265 Despite the red flags highlighted above, Wendy proceeded to make the Due Diligence Representation in relation to the Bosque Project at the 6 October 2012 Presentation. Fong was not engaged to perform due diligence for the Bosque Project. Hence, Wendy should not have told the investors and the Plaintiffs that a six-figure sum was expended for due diligence for the Bosque Project. There is no evidence that Wendy revealed to the investors and the Plaintiffs of the adverse findings that had arisen from the due diligence exercise. In all probabilities, she did not do so. In other words, she presented a rosy picture to the investors and the Plaintiffs so that they would invest in the Bosque Project. I am unable to accept that Wendy and Joey had taken reasonable care in ensuring the accuracy and truth of the Due Diligence Representation in relation to the Bosque Project. Why did Wendy proceed to make the Due Diligence Representation despite all the red flags? Further, why did Wendy and Joey not disclose to the investors and the Plaintiffs that various due diligence reports relied upon by Wendy and Joey were commissioned by Ecohouse Brazil? As Wendy alluded to in the course of the trial, perhaps it was because the JV Agreement meant that Joey was contractually obligated to continue to market Ecohouse Brazil’s projects in Singapore. This is Wendy’s explanation in Court: ²²²

266 This is where the truth appears to lie. Wendy and Joey continued to market the Bosque Project and Wendy made the Due Diligence Representation because of a legal obligation that Joey had under the terms of the JV Agreement towards Ecohouse Brazil, although Wendy alleges that they were satisfied with Anthony’s explanation in relation to the due diligence exercise. More significantly, as disclosed at the trial, Joey stood to gain significant commissions by continuing to market the Bosque Project. This would explain why Wendy and Joey continued to market the Bosque Project and Wendy made a similar Due Diligence Representation at the 6 October 2012 Bosque Presentation.

267 The objective evidence shows that Joey failed to take reasonable care to ensure the accuracy and truth of the Due Diligence Representation for the Casa Nova Project and the Bosque Project, despite being intimately involved in the due diligence work carried out by Fong as seen in the email correspondence which would have made clear that the Due Diligence Representation was inaccurate and unsatisfactory. Instead, at various instances of the trial, Joey’s account was contradicted by the objective evidence:

(a) First, in relation to his discovery about Gabriela’s relationship with Anthony, Joey stated that this was not a concern to him because he had been informed by Fong that Gabriela was “duty-bound by the Law Society”. This is Joey’s evidence in Court: ²²³

Yet, this ran directly against the contemporaneous emails between Joey and Fong as well as between Fong and Lucas which made clear that Joey was, in fact, concerned about the relationship between Gabriela and Anthony. ²²⁴ Despite the contemporaneous emails which show that he was, in fact, concerned, Joey persistently maintained at the trial that he was not worried.

(b) Next, despite the adverse opinion contained in Lucas’ Legal Opinion on Casa Nova, Joey stated that Lucas’ Legal Opinion on Casa Nova was fine. To recapitulate, Lucas was concerned with Gabriela’s Casa Nova Due Diligence Report but Joey stated that Lucas’ Legal Opinion on Casa Nova was, at best, “inconclusive” because of Joey’s own failure to provide enough documents to Lucas. Joey’s evidence in Court during the cross-examination by Mr Goh is as follows: ²²⁵

However, Joey ignored the adverse observations in Lucas’ Legal Opinion on Casa Nova, in which Lucas had recommended for a legal due diligence to be carried out “in Natal, in the presence of Gabriela, or not, to analyse all documents, licences, permits, certificates, titles, etc., so [Lucas] can assure that the legal requirements were fulfilled”. ²²⁶

268 Further, Joey’s evidence that he had paid a sum of over S$20,000 out of his own pocket for what was essentially an exploratory trip to Brazil in June 2012 does not make economic sense. ²²⁷ Why would Joey have to fork out a large amount of money for the June trip to Brazil when, by his own evidence, he had not yet decided whether or not to market the Casa Nova Project? Why did Joey not ask Anthony to pay for this exploratory trip which appears more beneficial to Anthony? This was what Joey had allegedly done for the investors when he negotiated with Anthony for the investors who had purchased a certain number of units in the Casa Nova Project and the Bosque Project to be entitled to a free trip to Brazil to conduct a site visit. ²²⁸ Joey’s claim that he had paid a sum of over S$20,000 out of his own pocket for the trip in June 2012 to Brazil appeared to be an attempt by Joey to present his trip in June 2012 as a trip where he had actually performed checks and conducted due diligence using moneys out of his own pocket.

269 It is clear from these instances highlighted above that Joey’s evidence at the trial could not be relied upon as he sought to present a version of the events that was clearly contradicted by the objective evidence or was plainly illogical.

270 I shall consider the reliance by Wendy and Joey on the fact that they, too, had purchased nine residential units in the Casa Nova Project and had signed a sale and purchase agreement on 1 October 2012. ²²⁹ The key issue to consider here is: why did Wendy and Joey themselves sign a sale and purchase agreement for the Casa Nova Project on 1 October 2012 for the purchase of nine units even after the various red flags had emerged in September 2012? Further, it is also important to highlight that, based on the evidence adduced at the trial, Joey had stated that as of 1 October 2012, he was, in fact, owed commissions by Anthony for the sale of the units in the Casa Nova Project. For context, Joey had already received two commission payments of S$207,409.80 (on 30 August 2012) ²³⁰ and S$1,031,290.90 (on 19 September 2012) ²³¹ made by Anthony to a bank account held in the name of Joey’s offshore company, JP Global Investment Inc.

271 Despite these two payments, Joey was still owed commissions by Anthony as of 1 October 2012 and the various red flags had arisen before 1 October 2012. How did it make logical sense, then, for Wendy and Joey to have purportedly paid a considerable sum of S$496,800 ²³² for the purchase of nine units in the Casa Nova Project? Curiously, no evidence had been adduced at the trial that Wendy and Joey had, in fact, paid this sum for the purchase of the nine units in the Casa Nova Project. It is also undisputed that Wendy and Joey did not invest in the Bosque Project. Thus, the reliance by Wendy and Joey that they had purchased nine units in the Casa Nova Project is neutral at best. This purchase does not necessarily mean that Wendy and Joey had performed satisfactory and proper due diligence before making the Due Diligence Representation.

272 The fundamental issue is whether Wendy and Joey had failed to take reasonable care in ensuring the accuracy of the Due Diligence Representation made to the Plaintiffs. For the reasons which I have elucidated above, it is clear to me that Wendy and Joey had failed do so.

273 The next question is whether Wendy’s and Joey’s breach of duty of care did cause the Plaintiffs losses and whether such losses were foreseeable. It is clear that losses were suffered by the Plaintiffs as a result of Wendy’s and Joey’s breach of their duty of care. The losses are the amounts they paid under the Casa Nova SPA and the Bosque SPA. It is also clear that these losses were foreseeable.

274 In view of my findings above, the Plaintiffs have succeeded in their claim of negligent misrepresentation against Wendy and Joey. However, I pause here to consider the Defendants’ contention that the Plaintiffs are no longer entitled to pursue their claim of negligent misrepresentation against Wendy and Joey because the Plaintiffs signed the Deeds of Modification on 6 November 2013.

275 According to the First, Third and Fourth Defendants in their closing submissions, even if the Plaintiffs have a valid cause of action against them, their decision to sign the Deeds of Modification on 6 November 2013 means that their claim of negligent misrepresentation against Wendy and Joey is no longer actionable. ²³³ No reasons were advanced for this submission.

276 The Plaintiffs entered into the Deeds of Modification with Ecohouse Brazil on 6 November 2013. The Deeds of Modification were new contracts which allowed Ecohouse Brazil an extension of 12 months to fulfil its obligations under the Casa Nova SPA and the Bosque SPA. Ecohouse Brazil provided fresh consideration of 20% of the original sums to the Plaintiffs. The Deeds of Modification did not extinguish or terminate the terms of the Casa Nova SPA and the Bosque SPA. On the contrary, the Deeds of Modification specifically bound Ecohouse Brazil to the Casa Nova SPA and the Bosque SPA. This is particularly seen in Clause 4 of the Deed of Modification for the Bosque Project which states as follows: ²³⁴

277 The Deeds of Modification merely granted Ecohouse Brazil an extension of 12 months to fulfil its legal obligations under the Casa Nova SPA and the Bosque SPA. Therefore, the Deeds of Modification do not prevent the Plaintiffs from pursuing their claim of negligent misrepresentation against Wendy and Joey for failing to exercise reasonable care in ensuring the accuracy of the Due Diligence Representation. Further, there is no evidence to suggest that, when the Plaintiffs signed the Deeds of Modification, they had knowledge of the falsity of the Due Diligence Representation. Therefore, the First, Third and Fourth Defendants’ argument that the Plaintiffs’ claim of negligent misrepresentation against Wendy and Joey is no longer actionable because they signed the Deeds of Modification is unmeritorious.

278 In their reply submission, the First, Third and Fourth Defendants have instead stated that the Plaintiffs’ signing of the Deeds of Modification led to a break in the chain of causation such that any reliance placed on the Due Diligence Representation was no longer operative. ²³⁵ This argument ignores the fact that the Deeds of Modification were signed on 6 November 2013, ie, a year after the Casa Nova SPA and the Bosque SPA were entered into following the Plaintiffs’ reliance on the Due Diligence Representation. The focus must remain on whether the Plaintiffs relied on the Due Diligence Representation at the time when they entered into the Casa Nova SPA and the Bosque SPA. It is clear from the evidence that they did. Further, as I have explained above, the Deeds of Modification did not extinguish the terms of the Casa Nova SPA or the Bosque SPA, but merely allowed Ecohouse Brazil an extension of 12 months to fulfil its obligations under the Casa Nova SPA and the Bosque SPA. Therefore, the First, Third and Fourth Defendants’ argument is unmeritorious.

279 In summary, I find that Wendy and Joey both owed a duty of care towards the Plaintiffs. This duty was clearly breached as they failed to take reasonable care to ensure that the Due Diligence Representation was true and accurate when it was made to the Plaintiffs.

280 The Plaintiffs have pleaded that there were two collateral contracts between them and Wendy and that Wendy had breached the two collateral contracts.

281 The court in Goldzone (Asia Pacific) Ltd (formerly known as Goldzone (Singapore) Ltd) v Creative Technology Centre Pte Ltd [2011] SGHC 103 summarised (at [45]) the requirements that need to be met for a finding to be made that an oral collateral contract was formed:

(a) the statement must be promissory in nature or effect rather than representational (Lemon Grass v Peranakan Place Complex Pte Ltd [2002] 2 SLR(R) 50 at [116]–[117]);

(b) there must be certainty of terms;

(c) there must be separate consideration; and

(d) existence of animus contrahendi, ie, a statement must be intended to be legally binding (Inntrepreneur Pub Co (GL) v East Crown Ltd [2000] 2 Lloyd’s Rep 611 at [614]).

282 The Plaintiffs have not adduced sufficient evidence to show that the First Collateral Contract and the Second Collateral Contract were formed between the Plaintiffs and Wendy. To recapitulate, the Plaintiffs’ case as set out above at [63]–[64], is that the two alleged collateral contracts which were formed are as follows:

(a) The First Collateral Contract purportedly arose between Wendy and the Plaintiffs as a result of the promise made by Wendy in the 13 August 2012 email that she had done detailed due diligence checks on the Casa Nova Project. It was this promise which led to the Plaintiffs signing the Casa Nova SPA with Ecohouse Brazil. The Plaintiffs state that Wendy breached the First Collateral Contract by wilfully and recklessly failing to do detailed due diligence on the Casa Nova Project.

(b) The Second Collateral Contract purportedly arose between Wendy and the Plaintiffs at the 8 November 2013 Meeting where Wendy had assured the investors present, including Cindy, that, if they did not demand for the return of their investments, Wendy would “fight for the investors” and “stand with the investors to see that they get back their investments and promised returns”. The Plaintiffs state that they relied on Wendy’s promise at the 8 November 2013 Meeting and did not demand for the return of the amounts they invested in the Casa Nova Project and the Bosque Project. The Plaintiffs state that Wendy breached the Second Collateral Contract by failing to fulfil her promise.

283 As stated at [281(c)] above, one of the requirements of a collateral contract is fresh consideration. This was similarly emphasised by the court in Thillainathan Aravinthan v EMC Information Systems Management Ltd Singapore Branch [2021] SGHC 289 (at [107]).

284 The Plaintiffs’ submission that they had provided consideration for the First Collateral Contract by entering into the Casa Nova SPA is flawed. The consideration for the Casa Nova SPA was the payment made by the Plaintiffs in exchange for a promise by Ecohouse Brazil to deliver a 20% return of the purchase price in 12 months and to procure a buyer for the Plaintiffs’ units in the Casa Nova Project. For the First Collateral Contract to come into existence, the Plaintiffs had to provide fresh consideration. They have failed to show that fresh consideration was provided.

285 In relation to the Second Collateral Contract, it is important to note that the Plaintiffs signed the Deeds of Modification with Ecohouse Brazil in relation to the Casa Nova Project and the Bosque Project on 6 November 2013. The Deeds of Modification were signed before the alleged Second Collateral Contract on 8 November 2013. The Plaintiffs had not informed Wendy that they had signed the Deeds of Modification with Ecohouse Brazil. ²³⁶ The fact that the Plaintiffs had not demanded for the return of the amounts they invested in the Casa Nova Project and the Bosque Project was because they had already agreed to offer a 12-month extension to Ecohouse Brazil when they signed the Deeds of Modification. Thus, the Plaintiffs’ claim under the Second Collateral Contract cannot succeed.

286 For the reasons above, it is clear that the Plaintiffs’ claims in relation to the First Collateral Contract and the Second Collateral Contract and the breach of these contracts by Wendy must fail.

287 The Plaintiffs also claim that the Defendants are liable to the Plaintiffs as constructive trustees for knowing receipt.

288 A claim of knowing receipt concerns the liability of a person who has received assets, which is subject to a trust, with the requisite level of awareness or knowledge that the assets in question are trust assets. Such a person would be a constructive trustee of the assets he has received and would be under a duty to immediately restore the assets to the beneficiary.

289 The requirements of knowing receipt were set out by the Court of Appeal in George Raymond Zage III and another v Ho Chi Kwong and another [2010] 2 SLR 589 (“George Raymond Zage III”) (at [23]):

(a) there is a disposal of the plaintiff’s assets in breach of fiduciary duty;

(b) there is beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff; and

(c) there is knowledge that the assets received are traceable to a breach of fiduciary duty and this state of knowledge makes it unconscionable for the defendant to retain the benefit of the receipt (endorsing the test in Bank of Credit and Commerce International (Overseas) Ltd v Akindele [2001] Ch 437).

290 The Plaintiffs have failed to adduce any evidence to support a claim of knowing receipt.

(a) First, the Plaintiffs have not shown that there was a disposal of the Plaintiffs’ assets in breach of the fiduciary duty. The release of the funds from the escrow account appears to have been made in line with the contractual provisions of the Casa Nova SPA and the Casa Nova Escrow Agreement as well as the Bosque SPA and the Bosque Escrow Agreement. The Plaintiffs have not adduced evidence to show otherwise.

(b) Further, while it is undisputed that Joey had, in fact, received commissions from Anthony for his role in the JV, the Plaintiffs have not adduced any evidence to show that these are traceable to the assets of the Plaintiffs. The Plaintiffs have also not led the evidence to show that any of the Defendants had beneficially received assets.

(c) Third, the Plaintiffs have also failed to adduce any evidence to support a claim that there is knowledge that the assets received by Joey or any of the other Defendants are traceable to a breach of fiduciary duty and this state of knowledge makes it unconscionable for them to retain the benefits of the receipt.

291 In view of the above, it is clear that the Plaintiffs have not made out a case that the Defendants are liable as constructive trustees for knowing receipt.

292 The Plaintiffs also claim that the Defendants are liable to the Plaintiffs in dishonest assistance. Such a claim would be available against the Defendants if they had dishonestly assisted in the misapplication of trust property.

293 In George Raymond Zage III, the Court of Appeal set out the elements of dishonest assistance (at [20]) as follows:

(a) there must be a trust;

(b) there must be a breach of that trust;

(c) there must have been assistance rendered by a third party towards the breach; and

(d) there must be a finding that the assistance rendered by the third party was dishonest (citing Bansal Hermant Govindprasad and another v Central Bank of India [2003] 2 SLR(R) 33 and Caltong (Australia) Pty Ltd v Tong Tien See Construction Pte Ltd [2002] 2 SLR(R) 94).

294 The Plaintiffs have led no evidence whatsoever that there was a trust or a breach of the trust to begin with. Even if there was, in fact, a trust and a breach of that trust, the Plaintiffs have failed to adduce any evidence that assistance was rendered by the Defendants and that such assistance was dishonest. In the light of the patently bare assertion made by the Plaintiffs without any substantiation, the Plaintiffs have failed to make out a case that the Defendants had dishonestly assisted in the purported fraud by Ecohouse Brazil.

295 The Plaintiffs have sought to rely on two documents to support their argument that the Casa Nova Project and the Bosque Project were fraudulent:

(a) The first document relied upon by the Plaintiffs is an article published in the Law Society UK Gazette dated 28 March 2019 titled “Solicitor struck off over Ecohouse Ponzi scheme”. ²³⁷ According to the article, Charles was struck off the roll in the UK as he was involved “in a dubious scheme which bore the hallmarks of fraud and/or money laundering”. There are two issues with the Plaintiffs’ reliance on this document. First, this document constitutes hearsay evidence and is, thus, inadmissible. The Plaintiffs did not call the writer of the article to give evidence during the trial. Second, even if the contents of the article are accepted as true, ie, the Casa Nova Project and the Bosque Project were fraudulent schemes perpetrated by Ecohouse Brazil, the article does not point to Wendy, Joey or the other Defendants partaking in any fraud perpetrated by Ecohouse Brazil. Therefore, the Plaintiffs’ reliance on the article does not take their case very far.

(b) The second document relied upon by the Plaintiffs is a newspaper article by the Mirror UK dated 3 January 2021 titled “Boss seized over alleged £21m Brazil homes con”. ²³⁸ Again, this document constitutes hearsay evidence. Further, even if the Ecohouse Brazil projects were part of a “con” by Ecohouse Brazil, this does not point to Wendy, Joey or the other Defendants partaking in any fraud perpetrated by Ecohouse Brazil.

296 Therefore, there is clearly no evidence that Wendy, Joey and the other Defendants had partaken in any fraud perpetuated by Ecohouse Brazil.

297 The Plaintiffs have also claimed that the Defendants had breached their statutory duty under the Estate Agents Act.

298 The elements of the tort of breach of statutory duty were recently considered by the Court of Appeal in How Weng Fan and others v Sengkang Town Council and other appeals [2022] SGCA 72 (“How Weng Fan”) (at [131]–[134]):

299 Based on the observations made by the Court of Appeal in How Weng Fan, there are two issues that have to be addressed:

(a) Did the Defendants, in particular Wendy and Joey, breach the Estate Agents Act?

(b) If so, does the construction of the Estate Agents Act establish that the statutory duty was imposed for the protection of a limited class of the public and that Parliament intended to confer on members of that class a private right of action for breach of the duty?

300 As a fundamental point, I shall consider whether the Defendants, particularly Wendy and Joey, have breached their statutory duty under the Estate Agents Act. According to the Plaintiffs, ss 28 and 29 of the Estate Agents Act require anyone marketing foreign or local properties to be licensed as real estate agents or real estate salespersons. The Defendants, by marketing the Casa Nova Project and the Bosque Project whilst not being licensed, had breached the requirements under the Estate Agents Act.

301 I set out ss 28 and 29 of the Estate Agents Act below:

302 In order to fully appreciate ss 28 and 29 of the Estate Agents Act, it would also be useful to set out various definitions in s 3(1) of the Estate Agents Act:

303 Based on the above provisions of the Estate Agents Act, any person seeking to market properties, where this amounts to the introduction of a client to a third person who wishes to acquire or dispose of a property, would be involved in estate agency work. Under s 28 of the Estate Agents Act, such persons would be required to be licensed as estate agents. In the present case, it is undisputed that Wendy and Joey were not licensed as estate agents at the material time.

304 During the trial, however, the Defendants have adduced a document containing an email correspondence between Fong and a representative of the Council for Estate Agencies (“CEA”). In an email dated 17 July 2012, the following opinion was stated by the representative of the CEA: ²³⁹

305 The Defendants claim that, based on Fong’s advice, they had relied on this email by the representative of the CEA. The issue, therefore, is whether the Defendants, in particular, Wendy and Joey, could be said to be employees of Ecohouse Brazil or its related companies.

306 Sections 5 and 6 of the Companies Act (Cap 50, 2006 Rev Ed) set out the parameters of when a company would be deemed as a related company of another company:

307 Based on the terms of the JV Agreement and the shareholding of Ecohouse Asia Pacific, Ecohouse Asia Pacific was not a subsidiary of Ecohouse Brazil. This is because Ecohouse Brazil did not: (a) control the composition of the board of directors of Ecohouse Asia Pacific; (b) control more than half of the voting power of Ecohouse Asia Pacific; or (c) hold more than half of the issued share capital of Ecohouse Asia Pacific. Therefore, Wendy and Joey cannot avail themselves of the exception set out in the email by the representative of the CEA dated 17 July 2012. Hence, when marketing the Casa Nova Project and the Bosque Project, Wendy and Joey were required to be licensed as estate agents under s 28 of the Estate Agents Act. Their failure to do so may give rise to criminal liability punishable by a fine or imprisonment or both.

308 A breach of the statutory duty under s 28 of the Estate Agents Act carries criminal liability which is punishable by a fine or imprisonment or both. In this regard, the Plaintiffs have failed to show how the statutory duty under s 28 of the Estate Agents Act was imposed for the protection of a limited class of the public. Further, it is entirely unclear how the Plaintiffs can make the assertion that Parliament intended to confer on members of that class a private right of action for the breach of duty. The Plaintiffs state, in their closing submission that “it could not have been the Parliament’s intention to deprive victims of a private right of action”. ²⁴⁰ The issue is whether Parliament specifically intended to confer on members of a limited class of the public a private right of action for the breach of the statutory duty: How Weng Fan at [134]. The Plaintiffs have failed to adduce evidence to support such an argument.

309 Further, Wendy and Joey may reasonably point to the legal advice given by Fong. ²⁴¹ On this basis, even if the Plaintiffs were able to show that a private right of action arises from the breach of the statutory duty under s 28 of the Estate Agents Act, Wendy and Joey may be able to avoid liability for a breach of the Estate Agents Act.

310 On the whole, the Plaintiffs have failed to make a case under the tort of breach of statutory duty against the Defendants, particularly Wendy and Joey.

311 Finally, I shall consider whether WKIN is liable. Cindy conceded at the trial that the thrust of the Plaintiffs’ claim against WKIN was founded on the fact that Wendy had used a company email address which carried the domain name “@wkinvestmentnetwork.com”. Cindy’s evidence in Court during the cross-examination by Ms Oei is as follows: ²⁴²

312 The fact that Wendy had used an email address containing a domain name belonging to WKIN does not necessarily mean that WKIN was liable for the misrepresentations made by Wendy. Wendy alleges that she used her various company email addresses due to her own tardiness. ²⁴³

313 Cindy stated during the trial that she included WKIN as a party to the present suit because of her own experience in the earlier Faber decisions where the lower court had only imputed liability on the company, and not the individuals personally. Cindy’s explanation in Court during the cross-examination by Ms Oei is as follows: ²⁴⁴

314 The Plaintiffs’ attempt to include WKIN as a party to the present suit simply because of their own previous litigation experience is unsatisfactory. On the evidence, WKIN’s involvement, if at all, appears to have been limited to the administrative aspects of organising the presentations at which the Casa Nova Project and the Bosque Project were launched before WK Events took over as the entity responsible for organising the presentations. This is because, as Wendy had stated at the trial, the transition to using WK Events rather than WKIN as the entity to organise the presentations took a few months. ²⁴⁵ Therefore, I find that WKIN should not be held liable for any misrepresentation made by Wendy or the negligence of Wendy and Joey.

315 For the above reasons, Wendy and Joey are jointly liable for the Plaintiffs’ losses. The losses which the Plaintiffs are entitled to claim are fairly straightforward. They include the sums of S$230,000 (for the Casa Nova Project) and S$368,000 (for the Bosque Project) which they had paid.

316 The Plaintiffs have sought to also claim the 20% return of the investments they were entitled to under the Casa Nova SPA and the Bosque SPA, ie, S$46,000 (for the Casa Nova Project) and S$73,600 (for the Bosque Project). During the oral closing submissions of the parties, however, Mr Goh conceded that the 20% return of the investments was not actual loss suffered by the Plaintiffs. ²⁴⁶

317 The general tortious principle is that damages are compensatory in nature. In other words, damages seek to put the injured plaintiff in the same position, as far as possible, as if the tort had not been committed. This was clearly set out by the court in ACES System Development Pte Ltd v Yenty Lily (trading as Access International Services) [2013] 4 SLR 1317 (at [14]):

318 What this means, therefore, is that the Plaintiffs cannot recover more in damages than their actual loss. For this reason, the Plaintiffs are unable to succeed in their claim for the 20% return of the investments they were entitled to under the Casa Nova SPA and the Bosque SPA, ie, S$46,000 (for the Casa Nova Project) and S$73,600 (for the Bosque Project).

319 The Plaintiffs also claim loss of opportunity but there is no evidence to support it. Therefore, the claim of loss of opportunity is dismissed.

320 The Plaintiffs are also awarded interest on the judgment sum, at the rate of 5.33% per annum pursuant to s 12(1) of the Civil Law Act 1909 (2020 Rev Ed), from the date of service of the writ till the date of judgment. While the Plaintiffs initially sought interest on the judgment sum at the rate of 10% per annum, Mr Goh accepted at the oral closing submissions that the Plaintiffs did not have evidence to support the claim for the higher interest rate of 10% per annum. ²⁴⁷

321 In summary, I make the following findings:

(a) On the preliminary issue, the claims against WK Events, Ecohouse Asia Pacific and Ecohouse Singapore cannot be sustained as these entities no longer exist as they had been struck off the Register. Further, the Plaintiffs had not made any application to restore WK Events, Ecohouse Asia Pacific and Ecohouse Singapore to the Register.

(b) The evidence reveals that Wendy and Joey were deeply involved in the marketing of the Casa Nova Project and the Bosque Project. They were jointly responsible for the Four Representations, ie, the Brazilian Government Representation, the Escrow Representation, the Due Diligence Representation and the Investment Return Representation for the Casa Nova Project and the Bosque Project, although it was Wendy who presented the Four Representations.

(c) The Plaintiffs have failed to prove on a balance of probabilities that the Brazilian Government Representation and the Investment Return Representation were false. Instead, only the Escrow Representation and the Due Diligence Representation were false in relation to both the Casa Nova Project and the Bosque Project.

(d) However, the Plaintiffs have failed to make out a case to prove that the Escrow Representation and Due Diligence Representation were fraudulent misrepresentations made by Wendy and Joey: (i) knowingly; (ii) without belief in its complete truth; or (iii) recklessly, without caring whether it be true or false. A case of fraudulent misrepresentation requires a high standard of proof which the Plaintiffs have failed to meet.

(e) I find that Wendy and Joey had intended for the Plaintiffs to rely on the Escrow Representation and the Due Diligence Representation. The evidence shows that the Plaintiffs had only relied on the Due Diligence Representation when they entered into the Casa Nova SPA and the Bosque SPA. The Plaintiffs had not relied on the Escrow Representation as they had knowingly signed the two Escrow Agreements with full knowledge of the terms contained therein which were different from the Escrow Representation made by Wendy.

(f) The Plaintiffs have failed to make out a case of misrepresentation under s 2(1) of the MRA against Wendy and Joey in relation to the Due Diligence Representation. A claim under the MRA is founded in contract, ie, there must be a contract between the representor and the representee. In the present case, the Defendants were not parties to any contract with the Plaintiffs. For this reason, the Plaintiffs’ claim under s 2(1) of the MRA must fail.

(g) The Plaintiffs have made out a case of negligent misrepresentation against Wendy and Joey for the following reasons:

(i) It was factually foreseeable that the Plaintiffs would suffer losses if Wendy and Joey did not take reasonable care in ensuring the accuracy of the Due Diligence Representation to the Plaintiffs. There was also a clear assumption of responsibility by Wendy and Joey. Wendy and Joey had to exercise care to ensure that the Due Diligence Representation to the investors and the Plaintiffs were factually accurate and true. Wendy and Joey knew or ought to have known of such reliance by the investors and the Plaintiffs. Therefore, there is sufficient legal proximity between the Plaintiffs and Wendy and Joey for a duty of care to arise. There are no policy considerations which militate against the imposition of a duty of care against Wendy and Joey. Wendy and Joey had breached the duty of care which they owed to the Plaintiffs by failing to take reasonable care in ensuring the accuracy of the Due Diligence Representation made to the Plaintiffs.

(ii) The Plaintiffs had suffered losses, ie, the sums they paid under the Casa Nova SPA and the Bosque SPA.

(h) The Plaintiffs have failed to make out a case in relation to the First Collateral Contract and the Second Collateral Contract for the following reasons:

(i) For the First Collateral Contract, the Plaintiffs have failed to show that there was fresh consideration.

(ii) For the Second Collateral Contract, just before the purported promise made by Wendy at the 8 November 2013 Meeting, the Plaintiffs proceeded to sign the Deeds of Modification with Ecohouse Brazil in relation to the Casa Nova Project and the Bosque Project on 6 November 2013. Therefore, the Plaintiffs did not demand for the return of the amounts they invested in the Casa Nova Project and the Bosque Project because they had already agreed to offer a one-year extension to Ecohouse Brazil to fulfil its contractual obligations under the Deeds of Modification. Wendy’s purported promise had no bearing on the Plaintiffs’ decision not to demand for the return of their investment amounts since they had independently signed the Deeds of Modification.

(i) The Plaintiffs have failed to make out a case that the Defendants are liable as constructive trustees for knowing receipt. The Plaintiffs have not led evidence to show that there was a disposal of the Plaintiffs’ assets in breach of fiduciary duty. The Plaintiffs have also failed to adduce any evidence to support a claim that there is knowledge that the commissions received by Joey or any of the other Defendants are traceable to a breach of fiduciary duty and that this state of knowledge makes it unconscionable for them to retain the benefits of the receipt.

(j) The Plaintiffs have failed to make out a case that the Defendants had dishonestly assisted in the fraud perpetuated by Ecohouse Brazil. There is no evidence that there was a trust or a breach of the trust to begin with. The Plaintiffs have also not produced evidence to show that Wendy and Joey were working with Ecohouse Brazil and Anthony to defraud the Plaintiffs.

(k) The Plaintiffs have failed to make out a case under the tort of breach of statutory duty under the Estate Agents Act. It is undisputed that Wendy and Joey were not licensed as estate agents at the material time. Wendy and Joey had sought to rely on an email from the CEA which stated that a developer or its related companies and their employees may sell the property owned by the developer without the need for a licence. However, Ecohouse Asia Pacific does not appear to be a related company of Ecohouse Brazil under the Companies Act (Cap 50, 2006 Rev Ed). A breach of the statutory duty under s 28 of the Estate Agents Act carries criminal liability which is punishable by a fine or imprisonment or both. The Plaintiffs have failed to show how the statutory duty under s 28 of the Estate Agents Act was imposed for the protection of a limited class of the public or that Parliament intended to confer on members of that class a private right of action for breach of the statutory duty.

(l) The thrust of the Plaintiffs’ claim against WKIN is because Wendy had used WKIN’s email address which carried the domain name “@wkinvestmentnetwork.com”. However, the fact that Wendy had used an email address containing a domain name belonging to WKIN does not necessarily mean that WKIN was liable for the misrepresentations made by Wendy. WKIN’s involvement, if at all, appears to have been limited to the administrative aspects of organising the presentations at which the Casa Nova Project and the Bosque Project were launched. Therefore, WKIN cannot be held liable for the conduct of Wendy or Joey.

(m) Finally, the Plaintiffs have succeeded in their claim against Wendy and Joey for negligent misrepresentation. Therefore, Wendy and Joey are to be held jointly liable for the damages which the Plaintiffs are entitled to. The Plaintiffs’ entitlement would be the sums of S$230,000 (for the Casa Nova Project) and S$368,000 (for the Bosque Project) which they had paid. The Plaintiffs’ claim for the 20% return of the investments they were entitled to under the Casa Nova SPA and the Bosque SPA, ie, S$46,000 (for the Casa Nova Project) and S$73,600 (for the Bosque Project) is dismissed given that these amounts did not constitute actual losses suffered by the Plaintiffs. The Plaintiffs are awarded interest on the judgment sum, at the rate of 5.33% per annum pursuant to s 12(1) of the Civil Law Act 1909 (2020 Rev Ed), from the date of service of the writ till the date of judgment.

322 The investments in the Casa Nova Project and the Bosque Project were clearly risky. As Wendy herself acknowledged at the trial, the Casa Nova Project and the Bosque Project were projects which came with “high risk, high returns”. ²⁴⁸ In such a context, it was incumbent upon Wendy and Joey to act with utmost care and caution when marketing the Casa Nova Project and the Bosque Project to investors. Their failure to present an accurate and true Due Diligence Representation ultimately caused investors and the Plaintiffs to rely on the Due Diligence Representation which ultimately led to their losses. This could have been avoided had there been reasonable care exercised by Wendy and Joey in the Due Diligence Representation made when marketing the Casa Nova Project and the Bosque Project.

323 The Plaintiffs have succeeded in their claim against Wendy and Joey. Thus, Wendy and Joey are ordered to pay costs to the Plaintiffs to be agreed upon or taxed. As for the rest of the Defendants, the Plaintiffs’ case against them is dismissed. For the companies that were struck off the Register, namely WK Events, Ecohouse Asia Pacific and Ecohouse Singapore, I shall make no order as to costs as they are non-existent entities. As for WKIN, the Plaintiffs are ordered to pay costs to WKIN to be agreed upon or taxed.