1 It is oft said, “when it is too good to be true, it probably is”. Like many other victims, the appellant invested millions in a scheme presciently named “SureWin4U” (hereinafter referred to as “SureWin4U” or the “Scheme”). The Scheme promised lucrative returns in exchange for the purchase of what were represented as investment packages.

2 Unsurprisingly, SureWin4U turned out to be a Ponzi scheme. Such schemes are usually premised on the representation that there are legitimate business activities generating profits for the scheme when there is in fact none. The supposed “profits” would in truth be derived solely or largely from the money put in by new investors, which would then be distributed to existing investors. Therefore, for existing investors to continue profiting from the scheme, they would have to constantly recruit new downline investors. SureWin4U’s purported sole business model was that investors’ moneys would go towards funding professional gamblers generating profits for the Scheme by playing baccarat at casinos using sure-win methods devised by the Scheme. It is now clear that this business model was non-existent.

3 While the premise of such fraudulent schemes may seem incredulous, nonetheless, it is not uncommon for fraudsters to succeed in selling these schemes to investors who probably should have known better typically with the benefit of hindsight. This case is a quintessential example. Should the law exculpate such fraudsters because they were dealing with the gullible and possibly greedy? In our view, this question is clearly answered in the negative, for indeed, “[a] knave does not escape liability because he is dealing with a fool” (see Gould v Vaggelas (1985) 157 CLR 215 at 252).

4 After examining the evidence and the parties’ submissions, for the reasons set out below, we allow the appeal to the extent that we find the first and second respondents liable for fraudulent misrepresentation in respect of the entire sum claimed by the appellant but dismiss the appeal with respect to the third and fourth respondents. Where relevant, we will make reference to the dissenting judgment of Woo Bih Li JAD (the “Minority Judgment”).

5 It is relevant to note that while there were two notices of appeal filed, there is in substance only one appeal against the trial judge’s (the “Judge”) entire decision on the merits of the claims and costs, and we shall refer to the appeal in the singular for the purposes of this judgment. There were two notices of appeal because AD/CA 50/2023 was filed prematurely, after the Judge had rendered his decision on the merits of the claims and on the appellant’s general liability to pay costs but before the Judge had fixed the quantum of costs. AD/CA 124/2023 was subsequently filed to include the Judge’s decision on the quantum of costs in the scope of this appeal, following our guidance in Chan Pik Sun v Wan Hoe Keet and others [2023] SGHC(A) 36.

6 SureWin4U was started by Peter Ong and Philip Ong (“Peter” and “Philip” respectively) in or around July 2012, with Peter designated as its Chief Executive Officer. As it operated on a multi-level marketing strategy, the earlier investors, ie, the uplines, would seek to attract other investors (the downlines) to purchase various packages, with each package priced between 68,850 Hong Kong dollars (HK$) and HK$4,250,000. The uplines would receive bonuses if they succeed in attracting a downline investor. If the downline in turn ropes in further investors, ie, further downlines, the original upline will also receive bonuses. In addition, the more expensive packages would attract higher bonuses. Therefore, there was a financial incentive to attract as many downlines as possible to purchase packages (preferably, the more expensive packages). This was an intrinsic feature of the Scheme. The various packages are shown below:

7 The main selling point of the Scheme to potential investors was that their moneys were ostensibly channelled to professional gamblers to gamble at baccarat in casinos employing two methods purportedly devised by Peter to successfully beat the system. The two methods were referred to as the “99.8% method” and “100% method”, the numbers being supposedly a reflection of their success rate, whereas the professional gamblers were known by a Mandarin phrase which literal translation was “living gambling tables”. After purchasing those investment packages, investors would see periodic returns reflected in their accounts on the Scheme’s website in the form of “Yingbi” credits, Yingbi being the “currency” devised for the Scheme. They then had the option of cashing out on the Yingbi or reinvesting the Yingbi in more investment packages.

8 The purchase of investment packages in turn entitled the investors to attend classes to learn about the Scheme’s gambling methods. Introductory classes were known as the “99.8% class” and advanced classes, only open to investors who had purchased Gold Packages and above, were known as the “100% class”.

9 The respondents were all involved in or connected to the Scheme in some way. The first and second respondents, Wan Hoe Keet (Wen Haojie) (“Ken”) and Ho Sally (“Sally”) respectively, are husband and wife who joined the Scheme in October 2012. While their initial outlay was only $77,452, the Scheme proved extremely profitable for them, and they eventually cashed out between $7m to $10m before the Scheme collapsed.

10 In around a year, by 2014, Ken and Sally were influential figures in the Scheme. They were respectively referred to as “Teacher Ken” and “Teacher Sally” by the other investors, and were rainmakers for the Scheme, contributing to around 70% of the Scheme’s earnings. The fact that Ken and Sally contributed about 70% of the Scheme’s earnings only served to highlight the key and pivotal role they played in running the Scheme even though they might not have been the original founders. They were also held out to be the “Singapore representatives” of the Scheme who had purportedly earned HK$201m from their participation in the Scheme and who had also received a Ferrari and a yacht. In the circumstances, to describe them as investors in the Scheme would be an understatement to say the least.

11 To attract downlines, Ken and Sally would speak at the Scheme’s seminars and extol the benefits of joining the Scheme. These pitches emphasised that there were professional gamblers who were using the Scheme’s gambling methods to generate profits for investors. This is starkly illustrated in one such pitch made by Ken presenting to a room of investors at a Scheme seminar:

This transcription was extracted from a video which recorded the presentation by Ken. The text of the transcription is not disputed.

12 The third respondent, Ho Hao Tian Sebastian (“Sebastian”), is Sally’s younger brother. He joined the Scheme around the time that Ken and Sally did, putting in around $27,000, and eventually became a “5-star” member of the Scheme. While it is unclear how much he profited from the Scheme, it was his evidence that he had at least ten Silver Packages. As one Silver Package cost around $28,980 (see [6] above), he would have earned at least about $280,000, tenfold of his initial outlay.

13 The fourth respondent, Strategic Wealth Consultancy Pte Ltd, is a company that Ken and Sally used to hold, among other assets, their earnings from the Scheme. It was previously known as SW4U Consultancy Pte Ltd (it was no coincidence that it bore an uncanny resemblance to SureWin4U) and adopted its present name three days after the Scheme’s collapse.

14 The appellant, Chan Pik Sun (“Sandra”), was introduced to the Scheme around March 2014. She was then in her early fifties and sold simple insurance plans working as a manager in an insurance company. She eventually invested in the Scheme in three separate tranches (hereinafter termed a “Tranche” in the singular and “Tranches” in the plural):

15 In mounting her case, Sandra relies on several key events. What exactly transpired during those events is heavily contested. We examine these events subsequently, but for now it suffices to outline these events as follows:

(a) In March 2014, Sandra attended a seminar in Hong Kong’s Royal Pacific Hotel to learn about the Scheme. There, she was introduced to Ken and Sally.

(b) In or around 1 to 3 May 2014, prior to the investment in the Second Tranche, Sandra attended a conference in Suntec City (the “Suntec Conference”). At the Suntec Conference, among other events, there was a gala dinner and also a 99.8% class that Sandra attended. Ken and Sally spoke at those events, alongside Peter and other members of the team. Promotional materials (which were the “Promotional Brochure” and the “Suntec Program Booklet”) were also distributed at the conference.

(c) Between June 2014 and July 2014, prior to the investment in the Third Tranche, several events were significant to Sandra’s case:

(i) Sandra’s dinner with Peter, Ken and Sally in early June 2014 in Kowloon (the “June 2014 Dinner”);

(ii) seminars in Hong Kong on 15 and 16 June 2014;

(iii) a conference in Sri Lanka (the “Sri Lanka Conference”) between 27 June and 1 July 2014, which was when Sandra was introduced to the US Property Package;

(iv)  Ken’s initiation of a new and exclusive WeChat group on 3 July 2014 named “Dream ken Sally” (the “Dream Group Chat”) which initial members were Sandra, Ken, and Sally and which later included Sebastian;

(v) a yacht meeting on 7 July 2014; and

(vi) a conference in Hong Kong (the “Hong Kong Conference”) held between 13 and 17 July 2014, which was also the occasion when Sandra was introduced to the Share Investment Package. During that conference, there was a demonstration of the 100% method at a casino in Macau. Thereafter, Ken and Sally told the attendees, including Sandra, that only one team lost out of the eight teams of professional gamblers who conducted the demonstration, showing that the Scheme was a safe and profitable one which generated returns.

16 In September 2014, SureWin4U collapsed with the arrest of its Taiwanese representative. The website of the Scheme became inaccessible.

17 Between 16 September and 21 September 2014, Sandra sent multiple messages asking Ken and Sally for a solution, and for a meeting. Ken and Sally claimed that they were unable to provide a solution.

18 Even by 5 October 2014, there was no solution in sight. Around that time, from 8 to 12 October 2014, Ken and Sally formed a group of ten investors including Sandra with the aim of recouping their investments by going to the casinos to gamble using the 100% method and gave the group S$148,000 to do so. However, not only did the group fail to recover their investments, they lost a substantial amount of that sum. We should add that Ken and Sally’s gratuitous provision of the gambling fund of S$148,000 also served to underscore the inescapable inference that they were not merely investors in the Scheme.

19 Around that time, between October to November 2014, Ken and Sally lodged two police reports against Peter and Philip (the “Police Reports”). The first police report was lodged on 1 October 2014, while the second was lodged on 6 November 2014. In the report on 1 October 2014, Ken and Sally claimed that they “fear[ed] that they ha[d] become victims of an elaborate scam”. However, in the Police Reports, Ken and Sally neither mentioned the fact that they had cashed out $7m to $10m from the Scheme by that time nor provided any supporting evidence such as screenshots to establish their allegations against Peter and Philip.

20 Subsequently, on or about 13 January 2015, Ken and Sally messaged Sandra stating that the group of 10 investors had dispersed and informed her that there was some balance money to be distributed. However, this distribution was never made. Further messages from Sandra to Ken and Sally were also ignored.

21 It was not till March 2015 that Sebastian reestablished contact with Sandra, telling her about a new potential “business opportunity” that Ken and Sally were going to be involved in. He invited her to join them in Kuala Lumpur between 20 to 23 April 2015 to find out more. Sebastian said that it “may [solve] everyone[’s] problem if it is a good plan” and that all that was needed was a £1,000 investment, which would entitle Sandra to attend a seminar. They would be “first to understand de plan [sic]”, and assured Sandra that the business model is “very profitable” and “it will not take long to see results”.

22 Sandra rejected the offer. After which, Ken, Sally, and Sebastian stopped replying to her messages, even though she stated in desperation that “I am in the most difficult hard time in my life now, It seems no hope for me in the future… Can anyone help me? [sic]”.

23 Things went silent for about three years thereafter. This was until on or about 10 June 2018, when it was reported in the Macao Daily newspaper that Peter had surfaced in Macau and was distributing cash from his winnings. He was reported to be heading a new scheme called “王子太阳城” in Mandarin which translates to “Prince Suncity” (the “Prince Suncity Scheme”). In relation to that, photographs emerged of a meeting in Macau (the “2018 Macau Meeting”) where Ken and Sally were pictured alongside Peter and a group of other people, holding wads of cash (see [120] below).

24 Soon after, on 15 August 2018, Sandra filed HC/S 806/2018 (“S 806”) against all the respondents, claiming for fraudulent misrepresentation, conspiracy (by unlawful means or lawful means), negligent misrepresentation, and innocent misrepresentation.

25 There was one aspect of S 806 which was particularly troubling, which was the destruction of what we regard as evidence crucial to this case. Before the trial, Sandra applied for specific discovery against the respondents in HC/SUM 498/2021 (“SUM 498”) seeking, among others, “[a]ll correspondence, whether via WeChat and/or e-mail, with Peter Ong and/or Philip Ong and/or any other SureWin4U members and/or SureWin4U investors”. The fact that these correspondence with Peter, Philip and other investors existed is not in dispute.

26 However, Ken and Sally stated on affidavit that they had changed their phones sometime in February 2015 and did not keep any backup of any WeChat messages in respect of the Scheme (hereinafter referred to as the “Missing Messages”). We found this incredulous. It was even more incredulous that Ken and Sally did not preserve any of their messages with Peter and Philip between 2017 and 2018 even though they had by that time filed the Police Reports against Peter and Philip, and admitted that Peter and Philip had contacted them around the time of the 2018 Macau Meeting with “some unpleasant WeChat messages” and had asked them to work together on a new scheme that they were launching. Ken and Sally, as well as Sebastian, repeated this position at the trial and provided the following explanations:

(a) First, they each had a habit of changing their phones either annually or biennially. For Ken and Sally, the first time they changed phones following the Scheme’s collapse was in 2015. As for Sebastian, while he was unsure about the exact date, he was uncertain that it was before April 2016.

(b) Second, whenever they changed phones, they each would not make any effort to “port over”, back up or migrate any existing information, except contact numbers, to the new phone. This was despite Sally’s admission that “there were messages in that handphone which are useful or relevant to this case”.

(c) Third, they each were unable to recall with specificity what they did with their old phones. Sally claimed that she gave her old phone to either her helpers, her mother, or her friends. By the time of the trial, she then claimed that her mother was suffering from dementia while her helper had returned to the Philippines. In a similar vein, Ken testified that “the problem is I don’t know who I had passed the phone to, if really I have passed the phone to someone else”. Sebastian testified that he did not know where his old phones were or that he would let someone else use the phone when he “saw that [the] person’s phone is old”.

27 When asked why they did not preserve the Missing Messages, Ken claimed that despite having sought legal advice at the time of making the Police Reports, no one had advised him to do so. Sally claimed that she did not consider it important that she should at least keep some records in case a dispute arose with Peter. This was even though she admitted she was aware of the seriousness of the case and that the police may request documents from them and ask them to surrender their phones. Sebastian’s explanation was that once he had changed his handphone, he “won’t [sic] care where the old handphone was” and that he has “changed maybe 10 to 20 handphones” in the span of the seven years after the Scheme’s collapse. Among the reasons he gave for the frequent change in handphones, were that: “I see new model, I like, I just change” and “because the phone dropped on the floor for a few times, I do not want the phone any more”.

28 In the end, the only message that was produced was a message from Sally to Peter on 18 September 2014, eight days after the Scheme’s collapse, which read: “We need you! Pl help us! [sic]” and “Many wants to commit suicide [sic]”. We will return to the significance of the Missing Messages.

29 Judgment in S 806 was delivered by the Judge on 14 April 2023 and is reported in Chan Pik Sun v Wan Hoe Keet and others [2023] SGHC 96 (the “Judgment”).

30 The Judge first considered Sandra’s claim for fraudulent misrepresentation with respect to four main representations, namely:

31 On the Safe and Profitable Representation, the Judge found that fraudulent misrepresentation was not made out. Each of the three Tranches were considered in turn.

32 In relation to the First Tranche, the Judge appeared to accept that the Safe and Profitable Representation was made by Ken and Sally, stating that he understood “Sandra’s case [to be] not so much that Ken and Sally used the words ‘safe’ and ‘profitable’ but that this was a constant theme in Ken and Sally’s description of SureWin4U” (see Judgment at [48]). On this premise, the Judge found that:

(a) First, what Ken and Sally said to Sandra about SureWin4U was a statement of their opinion, and not an actionable statement of fact (see Judgment at [50] and [51]).

(b) Second, Sandra understood the Scheme to be “safe” in the sense that if SureWin4U could not prove the 99.8% method, she would be refunded for what she had paid for her initial packages (see Judgment at [52]–[54]).

(c) Third, Ken and Sally did not represent to Sandra that SureWin4U was “safe and profitable” in the sense which Sandra deposed in her affidavit of evidence-in-chief she understood it: that “the Scheme was legitimate, not a scam, and that I would not lose the sums that I invested in it” (see Judgment at [55]).

(d) Fourth, and relatedly, what Ken and Sally said about SureWin4U was focused on the viability of its way of making money – by gambling. In describing SureWin4U, Ken and Sally were not talking about whether SureWin4U was legitimate and not a scam (see Judgment at [58]). The Judge also found that whether SureWin4U was legitimate and not a scam was not Sandra’s understanding of what Ken and Sally had said about the Scheme (see Judgment at [56]).

33 On the Second Tranche, the Judge held that Ken and Sally could not be held responsible for the full contents in the Promotional Brochure and the Suntec Program Booklet as those were distributed by SureWin4U and not Ken and Sally (see Judgment at [70]). Moreover, while the Promotional Brochure claimed that the Scheme was a “profitable and safe option”, SureWin4U was not saying that they were legitimate and not a scam. Instead, it referred to the viability of the Scheme’s business model for making money (see Judgment at [73]). The Judge however found that certain representations by Ken and Sally concerning their earnings of about HK$201m and a Ferrari they had allegedly received from their participation in the Scheme had some element of exaggeration (see Judgment at [76]). Nevertheless, even if their earnings of HK$100m had been accurately stated, that would not have made a real and significant difference to Sandra’s decision to invest further (see Judgment at [85]). Relatedly, while Ken and Sally knew that they had not earned the full amount of HK$201m, the Judge found that they did not decide to exaggerate this figure to induce others to invest in SureWin4U. Ken and Sally’s evidence that the figure had been provided by SureWin4U was accepted (see Judgment at [86]). As for the 99.8% class, the Judge concluded that it was conducted by Philip, rather than by Peter, Ken, and Sally as Sandra alleged (see Judgment at [87]).

34 In relation to the Third Tranche, the Judge held that none of the representations (nor all of them taken together) that Sandra attributed to Ken and Sally could amount to a representation that SureWin4U was “safe and profitable” in the sense of the Scheme being legitimate and not a scam (see Judgment at [98]). Sebastian’s messages with Sandra were also held not to have operated on Sandra’s mind when she made the investments in the Third Tranche (see Judgment at [103]). Regarding the 100% class, the Judge did not believe that Sandra ever thought that SureWin4U had a 100% chance of winning. The Judge found that Sandra knew that there was still some risk of loss in SureWin4U’s gambling methods, but she nevertheless believed in those methods (see Judgment at [106]).

35 As for the alleged misrepresentation “that investing in the US Property Package entitled [Sandra] to title deeds to houses in Detroit” (ie, the US Property Representation), it was held that these were not statements of fact, but rather either statements as to the future, or a promise (see Judgment at [108]). In buying the US Property Package, Sandra knew that it was a term of that package that she was entitled to a title deed to a house in Detroit and there was nothing false in that (see Judgment at [108] and [110]).

36 Further, the Judge held that the pleadings did not assist Sandra’s case. While the Statement of Claim (Amendment No 1) (“Statement of Claim”) mentioned the US Property Package as something that Ken and Sally promoted (at paras 53(d)–53(f)), these paragraphs were not referred to in para 73 of the Statement of Claim, where Sandra pleaded why the representations were false (see Judgment at [109]).

37 Her claim against Ken, Sally, and Sebastian in relation to the US Property Representation thus failed (see Judgment at [112]).

38 In her reply submissions, Sandra had formulated the Share Investment Representation in the following terms: “that her monies invested under the Share Investment Package would be used to acquire a company that was going to be listed on the Singapore Stock Exchange in October 2014”. However, the Judge found that this was not a statement of fact, but either a statement as to the future or a promise (see Judgment at [113]). Sandra had also not proved that her money was not used by the Scheme to acquire a company that was to be listed, as there was simply no evidence of how the money was used (see Judgment at [116]).

39 The Judge also noted that this formulation involved a shift away from Sandra’s pleaded case, in which she pleaded that Ken and Sally had represented that “SureWin4U had plans to buy over a company that was going to be listed on the Singapore Stock Exchange in October 2014”; this was pleaded to be false in that “SureWin4U had no real plans to nor did it acquire a listed company contrary to Ken and Sally’s claims” (see Judgment at [114]). However, it did not follow that because SureWin4U did not acquire a company to be listed, that it had no plans to do so (see Judgment at [116]).

40 Another shift was noted in Sandra’s oral closing submissions slides, in which the representation was reformulated as one that “Sandra’s investment will be used to acquire a particular target company (ie, China Kunda Technology Holdings Ltd)” (“China Kunda”). However, it was not her pleaded case or her evidence that the particular target company was ever mentioned to her prior to her purchasing the Share Investment Packages. The fact of Ken’s knowledge of China Kunda as the target company and the fact that it was already listed did not help Sandra’s case as a reverse takeover could have been contemplated (see Judgment at [118]–[119]).

41 The Judge found that the Hong Kong No 1 Representation was never made by Ken and Sally (see Judgment at [125]). Even if this was made, it would not have been a statement of fact but a statement as to the future or a promise (see Judgment at [126]).

42 In any event, it was held that Sandra failed to prove that she had not become Hong Kong’s top salesperson (see Judgment at [127]). There was also nothing false or fraudulent in what Ken, Sally or Sebastian said to Sandra about her performance and potential in the context of SureWin4U (see Judgment at [128]).

43 In relation to Sandra’s conduct in the aftermath of SureWin4U’s collapse, the Judge made the following observations:

(a) First, the messages between Sandra and her upline showed a behaviour which was not that of someone who thought that Ken and Sally had defrauded her (see Judgment at [132]).

(b) Second, Sandra had told her downlines that there were risks in investing in the Scheme. This was inconsistent with her position that she thought her participation in the Scheme was free of risk because of the Safe and Profitable Representation (see Judgment at [133]).

(c) Third, Sandra stayed with Ken and Sally in October 2014. This showed that she did not think then that Ken and Sally had defrauded her or made false representations that had induced her into investing in the Scheme (see Judgment at [134]).

(d) Fourth, the Judge referred to a message Sandra had with one downline in which Sandra stated that she was going after Ken and Sally because they had made money from the Scheme, whereas others had lost money. It was significant that Sandra did not say that Ken and Sally had made false representations that had induced her and others to invest in the Scheme (see Judgment at [137]).

44 The finding that Sandra did not rely on the alleged misrepresentations to invest in SureWin4U was fatal to the claims for both lawful and unlawful means conspiracy (see Judgment at [143]).

45 Negligent misrepresentation was not made out as it had been found that Sandra was not induced by the representations on which she relied in investing in the Scheme (see Judgment at [184]). There was also no duty of care owed by Ken, Sally, and Sebastian to Sandra – they were simply participants of the Scheme interacting with Sandra as a fellow participant (see Judgment at [199]). The Judge considered that it was an aspect of a typical Ponzi scheme (and SureWin4U was no different) that participants were incentivised to encourage others to participate in the scheme, and Sandra herself also did so in relation to her downlines (see Judgment at [189]).

46 The claim for innocent misrepresentation was also dismissed as Sandra did not explain how the respondents could be liable as such (see Judgment at [203]–[204]).

47 In the Judgment, the Judge had found that Sandra was liable to the respondents for costs, with the exact quantum to be fixed failing parties’ agreement (see Judgment at [207]). As parties could only agree on costs of S$59,040.41 (for HC/SUM 4562/2018 and HC/SUM 2266/2020 and agreed disbursements), the Judge issued a further decision on 11 September 2023 fixing costs of $374,365.22 (inclusive of the S$59,040.41) in favour of the respondents.

48 Sandra’s case on appeal largely mirrors her arguments before the Judge.

49 In relation to the Safe and Profitable Representation, Sandra submits that she understood it to mean that the Scheme was legitimate (ie, it ran on a legitimate business model) and not a scam. On this basis, she argues that fraudulent misrepresentation is made out for each of the three Tranches.

(a) On the First Tranche, the Judge erred in finding that: (i) Ken and Sally were merely expressing their positive opinion about participating in the Scheme and in describing the Scheme’s viability of making money through its gambling business model; (ii) Sandra did not rely on the representation and instead considered that there was no risk since she had been promised a refund if she could disprove the 99.8% method; and (iii) Sandra’s understanding of the representation had nothing to do with fraud.

(b) On the Second Tranche, the Judge erred: (i) in finding that the phrase “a profitable and safe option” in the Promotional Brochure was merely a reference to the viability of the Scheme’s business model of making money; (ii) in downplaying Ken and Sally’s exaggeration of their earnings from the Scheme; (iii) in finding that the Safe and Profitable Representation was not a real and substantial factor in Sandra’s decision to invest in the Second Tranche; and (iv) in finding that Ken and Sally bore no responsibility for the Safe and Profitable Representation in so far as that representation was contained in the Scheme’s brochures and promotional material.

(c) If the court agrees that the Safe and Profitable Representation operated on Sandra’s mind in relation to the First and Second Tranches, it follows that the same representation induced her to invest in the Third Tranche.

50 Whilst the Safe and Profitable Representation purportedly permeated all three tranches of investments, the remaining three representations are said to be unique to the Third Tranche. In relation to the US Property Representation, Sandra’s case is that it was represented to her that by purchasing the US Property Package, she would “receive a title deed to a house in Detroit”, but this did not materialise after she purchased four such packages. In this regard, Sandra submits that the Judge erred in failing to recognise that statements as to future matters can amount to representations of fact when the maker of the statement did not honestly believe in the statement or had no reasonable grounds for making such an assertion. Here, the objective evidence points to the US Property Package being a con job, and Ken, Sally, and Sebastian’s behaviour were reckless at the very least. Therefore, the Judge should have found that the claim in fraudulent misrepresentation was established in respect of the Third Tranche based on the US Property Representation.

51 In relation to the Share Investment Representation, Sandra clarified that her case is that it was represented to her that “SureWin4U had plans to buy over a company that was going to be listed on the Singapore Stock Exchange in October 2014”, which was false because “SureWin4U had no real plans to nor did it acquire a listed company”. She argues that the Judge should not have dismissed this claim on the basis that it was a statement as to the future or a promise and that it was a term of the package. This is because Ken, Sally, and Sebastian did not honestly believe the representation and did not possess reasonable grounds for making it. Further, the Judge’s acceptance of Ken’s explanation of China Kunda as the target company for the acquisition did not cohere with the evidence at the trial, where a reverse takeover was not mentioned. The burden is on Ken, Sally and/or Sebastian to prove that the Scheme had real plans to acquire a company to be listed and that her money was used by the Scheme to do so.

52 In relation to the Hong Kong No 1 Representation, Sandra submits that Ken and Sally represented to her between 13 to 17 July 2014 that if she took out four sets each of the US Property and Share Investment Packages, she could become a “Seven-star Agent”. In dismissing this claim, Sandra submits that the Judge erred in finding that: (a) Ken and Sally did not make the representation because events after the Second Tranche investment show otherwise; (b) the representation was not actionable as it was a statement of intention, because a misstatement of the state of a man’s mind is a misrepresentation of fact; and (c) Sandra’s conduct after the Scheme’s collapse showed that she did not rely on the representations.

53 Alternatively, in relation to all the representations, Sandra submits that the representations were made negligently. It was factually foreseeable and legally proximate for a duty of care to arise against Ken and Sally under the tort of negligence. They were key figures in the Scheme to whom investors looked up and voluntarily assumed responsibility for Sandra by creating the Dream Group Chat and taking Sandra under their wing. They “lavished” their attention on Sandra even though she was an indirect downline and one out of 1,500 purported investors from Singapore known to Ken and Sally. This duty of care was breached as they did not conduct due diligence or checks on their alleged representations.

54 As for the claims for conspiracy, it is argued that the respondents were co-conspirators with Peter and Philip in perpetuating the scam. As Ken, Sally, and Sebastian admitted, the Scheme involved unlawful means as it was fraudulent. Inappropriate weight was given to that concession in so far as the Judge held to the contrary by concluding that Sandra had to make out her claim in fraudulent misrepresentation to establish unlawful means. On whether there was an agreement or intention to injure, Sandra’s case is that Ken, Sally, and Sebastian were not merely fellow participants with Sandra in the Scheme, but that their conduct both before and after the Scheme’s collapse showed that they were instead working hand in glove with Peter and Philip to defraud investors. On this issue, the Judge erred in not drawing an adverse inference that Ken, Sally, and Sebastian were co-conspirators in light of the Missing Messages.

55 The respondents submit that the Judge was correct in finding that the four representations that Sandra relied on were not actionable representations.

56 In relation to the Safe and Profitable Representation, the respondents disagree that the representation was inherently about the legitimacy of the business model on which the Scheme ran. They say that such an interpretation was neither supported by the evidence nor the understanding pleaded by Sandra. The Judge was also correct to find that the alleged representation was a statement of opinion and not an actionable statement of fact.

57 The respondents further submit that the Judge was correct in concluding the same for the other representations. Specifically:

(a) In relation to the US Property Representation, the respondents argue that Sandra did not plead why the representation was false. Further, any statement in relation to the package being a good opportunity cannot be elevated to anything more than an expression of Ken and Sally’s opinion. Sandra also did not cross the evidential hurdle of proving that the representation was made without honest belief.

(b) In relation to the Share Investment Representation, the Judge was correct in finding that the “only thing factual about the Share Investment Representation, is that it was a term of the Share Investment Package that those who bought the package would acquire an interest in a company that SureWin4U would be acquiring” and that there was nothing false in this (see Judgment at [113]). Further, Sandra has failed to cross the evidential burden of showing that Ken, Sally, and Sebastian did not honestly believe the alleged representation, and did not possess reasonable grounds for making it. Sandra also has not adduced any evidence to substantiate her allegation that her investment moneys were not used to acquire any company which was to be listed on the Singapore Exchange.

(c) In relation to the Hong Kong No 1 Representation, Sandra failed to plead why the alleged representation was false. The Judge was also correct in finding that the representation was not made to Sandra. Ken and Sally were in no position to promise that Sandra would become Hong Kong’s top salesperson. Further, as correctly noted by the Judge, there is no evidence that Sandra was not the top salesperson in Hong Kong at the time the Scheme collapsed.

58 It is also submitted that the evidence of Sandra’s conduct throughout the time of her involvement in the Scheme and in its aftermath make it abundantly clear that she did not rely on anything that was said to her by Ken, Sally, and/or Sebastian when investing in the Scheme. She does not mention that anything was guaranteed or represented to her by Ken and Sally, and even gave others advice and acknowledged that she knew the risk and was prepared to face up to what had happened. In respect of the First Tranche, the respondents submit that Sandra invested because she did not see any risk in doing so and did not rely on anything allegedly said to her by Ken and Sally. For the Second and Third Tranches, the respondents submit that it was Sandra’s conviction in the Scheme, her assessment of the returns she could make, and her ambition to be a top investor that motivated her decision to make the investments.

59 According to the respondents, Sandra also failed to plead and show that the respondents had acted fraudulently. From the time they invested into the Scheme, Ken and Sally believed that they would get a refund of their money if they were able to disprove the Scheme’s formula. They were also receiving returns on their investment. While Ken and Sally were successful and made a significant amount of money from the Scheme, this did not mean that they knew more about the Scheme than any other investor.

60 As for the claim in negligent misrepresentation, the respondents argue that Ken, Sally, and Sebastian did not owe Sandra a duty of care and in any event did not breach any duty. The evidence shows that Sandra was familiar with the way the Scheme operated and was constantly discussing her investments with her uplines and downlines. She never questioned whether any due diligence or valuation had been undertaken or about the details of the company to be acquired under the Share Investment Package, or information as regards her standing within the Scheme.

61 Regarding loss, the respondents submit that Sandra has not produced any document in support of her alleged payment of the First Tranche investment. The documents produced in relation to the Second and Third Tranches are also incomplete and do not sufficiently detail crucial elements such as the name of the account holder from whom payment was made, and for whom payments were made. Sandra has also admitted that she had returns paid to her from the Scheme, which she used to buy packages and encashed for downlines to purchase Yingbi. She has not accounted for this. Ultimately, the loss of Sandra’s investments was caused by the apparent fraudulent actions of Peter and Philip and cannot be attributed to Ken, Sally, and/or Sebastian.

62 Further or in the alternative, the respondents submit that Sandra was contributorily negligent as she saw no issue with investing such a substantial amount of money. She did not take reasonable care of herself and should be made to bear the blame for her loss.

63 Lastly, it is argued that Sandra’s claim for conspiracy, whether by unlawful or lawful means, should fail. The Judge was correct in dismissing Sandra’s claim for conspiracy by unlawful means as a result of dismissing her claim for fraudulent misrepresentation. There was also no element of agreement between the alleged conspirators and, in particular, no evidence that Ken and Sally had a close relationship with Peter or were conspiring with him. In this regard, an adverse inference should not be drawn from the Missing Messages. Lastly, Sandra has not adduced or alluded to any evidence to support the conclusion that Ken, Sally, and/or Sebastian intended to cause damage or injury to her, or acted with spite and maliciously, or that they were actuated by disinterested malevolence.

64 It was clear, by the time the appeal was heard, that Sandra’s primary claim was for fraudulent misrepresentation. If the claim for fraudulent misrepresentation is resolved in her favour, it will be unnecessary for us to determine her claims in negligent or innocent misrepresentation. This however still leaves us with her claims for conspiracy, which appear to be a secondary and alternative basis for establishing liability.

65 On this understanding, the broad issues that arise in this appeal are as follows:

66 It is common ground that the following elements must be established in a claim for fraudulent misrepresentation (see the Court of Appeal decision of Panatron Pte Ltd and another v Lee Cheow Lee and another [2001] 2 SLR(R) 435 (“Panatron”) at [14]):

67 The mental element of fraud may be established by proving recklessness on the part of the representor. On this point, we can do no better than to refer to the explanation of Lord Herschell in the leading House of Lords decision of Derry v Peek (1889) 14 App Cas 337 (“Derry”) (at 374):

The above propositions are now an established part of Singapore law relating to fraudulent misrepresentation (see the Court of Appeal decisions of Wee Chiaw Sek Anna v Ng Li-Ann Genevieve (sole executrix of the estate of Ng Hock Seng, deceased) and another [2013] 3 SLR 801 at [32]–[33]; and Wishing Star Ltd v Jurong Town Corp [2008] 2 SLR(R) 909 (“Wishing Star”) at [16]–[17]).

68 As for what constitutes recklessness, four points are germane.

69 First, recklessness must be understood in the sense of “indifference to the truth, the moral obliquity which consists in a wilful disregard of the importance of the truth” (see the Court of Appeal decision of Arab Banking Corp (B.S.C.) v Boustead Singapore Ltd [2016] 3 SLR 557 at [62]). A person who is indifferent to the truth cannot possibly have an honest belief in the truth of the representation.

70 Second, while the legal burden is ultimately on the representee to prove the representor’s fraudulent state of mind, the evidential burden may in some circumstances fall on the representor to defend against the allegation that he had acted fraudulently. One such circumstance was aptly described by Salmon J in Regina v Mackinnon and others [1959] 1 QB 150 (at 155), which was cited with approval by VK Rajah JA in Public Prosecutor v Wang Ziyi Able [2008] 2 SLR(R) 61 (“Able Wang”) (at [85]):

The extract above suggests that once it is established that a false representation was made and there were no reasonable grounds for the representor to believe it, the evidential burden shifts to the representor to show that he honestly believed in the representation.

71 Third, if an alleged belief was destitute of all reasonable foundation, this would suffice of itself that it was not really entertained, and that the representation was a fraudulent one (see the High Court decision of DBS Bank Ltd v Carrier Singapore (Pte) Ltd [2008] 3 SLR(R) 261 (“DBS Bank”) at [53], citing Derry at 375, per Lord Herschell). This proposition was put in substantially similar terms by the Court of Appeal of England and Wales in Le Lievre and Dennes v Gould [1893] 1 QB 491, where it was said that gross negligence may amount to fraud if it were so gross as to be incompatible with the idea of honesty (at 500). In determining whether a representor’s belief was reasonable, one factor that the court would consider is the importance or materiality of the representation in the circumstances of the case (see the High Court decision of Liberty Sky Investments Ltd v Goh Seng Heng and another [2020] 3 SLR 335 (“Liberty Sky”) at [55] and [60]). The more significant the representation, the greater is the need for the representor to show that he had an evidential basis ie, honest belief in making the representation, failing which it is open for a court to find that the representor did not make the statement(s) honestly.

72 Fourth, in determining whether the representor had the requisite subjective honest belief in the truth of the statement at the material time, the court may consider whether there were “grounds on which a reasonable person infused with the attributes of the accused would have believed in the truth of the statement” [emphasis in original] (see Able Wang at [88]). In other words, the qualification, profession, intellect, experience and skills, amongst other personal attributes, of the representor would be considered in assessing whether there were indeed reasonable grounds for him to believe that the statement or information which he disseminated was true (see Able Wang at [87]). If the representor was in a position to discover the truth, his alleged belief may be found to be unreasonable (see Liberty Sky at [82]).

73 With these principles in mind, we turn to examine the evidence in relation to Sandra’s claim for fraudulent misrepresentation.

74 We first consider the Safe and Profitable Representation, which is the key representation that undergirds Sandra’s entire claim for fraudulent misrepresentation.

75 In our view, the Judge failed to consider the proper context of the Safe and Profitable Representation. This was the crucial omission by the Judge when he opined that he understood Sandra’s case to be “not so much that Ken and Saly used the words ‘safe’ and ‘profitable’ but that this was a constant theme in Ken and Sally’s description of SureWin4U” (see Judgment at [48]). The Judge also understood the Safe and Profitable Representation as not relating to the legitimacy of the Scheme, but instead to: (a) the assurance that Sandra would be refunded what she had paid if she could disprove the 99.8% method, and (b) the viability of the Scheme (see Judgment at [52]–[60] and [61(b)]–[61(c)]).

76 With respect, we disagree with the Judge’s understanding of Sandra’s case on the Safe and Profitable Representation. While Sandra did pursue her misrepresentation claim on different fronts, it is clear that Sandra advanced her case on the Safe and Profitable Representation on the basis that Ken and Sally used the words “safe” and “profitable” when describing the Scheme. We also understand her case as being that the use of such words referred to the legitimacy of the Scheme in that there was in fact a business model where professional gamblers would use investors’ moneys to generate returns for the Scheme using the Scheme’s winning formulas. This understanding was pleaded by Sandra, repeated in her affidavit of evidence-in-chief, and featured prominently in her closing submissions below. Significantly, the Minority Judgment at [185] is prepared to accept that this was how Sandra advanced her case on the Safe and Profitable Representation.

77 However, while it is noted in the Minority Judgment at [180] that the “key draw for investors of the Scheme was its purported winning formulas, ie, the 99.8% and 100% methods”, it is crucial to bear in mind that Sandra’s case was not that the winning formulas did not work or that the professional gamblers failed to deliver the returns in spite of using the formulas. The key draw of the Scheme was not simply that it purportedly had winning formulas, but that these formulas would be used by professional gamblers to generate returns for investors – a representation that was plainly false. It cannot be overemphasised that Sandra’s case is not that she lost money gambling at the casinos using the 99.8% and 100% methods. She is not seeking a refund of her investments because the winning formulas did not work.

78 Nevertheless, the Minority Judgment says that what Sandra in fact understood about the safety and profitability of the Scheme when she invested was that the gambling methods were viable (at [190]). In other words, Sandra did not rely on the alleged understanding of the Safe and Profitable Representation that she now advances. With respect however, to say that Sandra was only concerned about learning the gambling methods would be incongruous with the fact that she made repeated investments into the Scheme. If her sole aim was to learn the gambling methods, why did she continue investing in the Scheme even after learning its methods? It is clear to us that the only reason why Sandra continued to invest in multiple packages in the Scheme was because she understood that her returns would come from the returns purportedly generated by the professional gamblers using the 99.8% and 100% methods. The different treatment of Sandra’s understanding of the Safe and Profitable representation is the key point that divides the Majority and Minority Judgments.

79 In this connection, it is important to understand that when Sandra said that there were risks involved in the investments, she was acknowledging that there might be risks that the winning formulas devised by the Scheme may not be as successful as claimed, ie, not a 99.8 or 100% chance of winning. Sandra was not by those statements accepting that there were risks that her investments might be used to pay other investors as returns instead of being used by the team of professional gamblers to play baccarat at the casinos to generate returns. This critical distinction appears to have been overlooked by the Judge. In this regard, we disagree with the Judge’s finding at [133] of the Judgment that Sandra’s acknowledgment of risks in investing in the Scheme was inconsistent with the Safe and Profitable Representation. Further, as Sandra argues and the respondents concede, the Safe and Profitable Representation permeates all three Tranches of her investments. This much is clear from the following.

80 In relation to the First Tranche:

(a)  In her Statement of Claim, Sandra pleaded that she was first introduced to Ken and Sally at the Royal Pacific Hotel seminar in Hong Kong, where it was represented to her, among other things, that her investment in SureWin4U would be “safe” and that she should invest without hesitation because it was a “good project”. In this context, Ken and Sally explained to Sandra that the Scheme generated income through professional gamblers employed by the Scheme; the professional gamblers were “guaranteed to generate returns because they used a special method developed by Ong which had a 99.8% chance of winning”. Additionally, Ken and Sally told her that the other attendees at the Royal Pacific Hotel seminar were all “high net worth individuals of a certain social status. If SureWin4U was not safe and reliable, there would not be so many people prepared to invest in it”.

(b) These allegations were essentially repeated in Sandra’s affidavit of evidence-in-chief. Further to this, Sandra stated therein that she had asked Ken and Sally again whether the Scheme was safe and that she was told by Ken and Sally that there was “no problem” and that she should invest as soon as possible. From these representations, she understood that the Scheme was “genuine”.

(c) In her closing submissions below, Sandra signposted in no uncertain terms that the peculiar feature of the Scheme was that moneys from the investors would be “(ostensibly) channelled to professional gamblers to gamble at baccarat in casinos employing 2 methods [ie, the 99.8% and 100% methods]” and that the “winnings were then used to pay the promised returns”. She also argued that the Safe and Profitable Representation was made by Ken and Sally in relation to the First Tranche investment.

81 In relation to the Second Tranche:

(a) In the Statement of Claim, it was pleaded that Ken and Sally represented among other things at a gala dinner during the Suntec Conference that the Scheme was “safe and profitable”. Reference was also made to a class held in relation to the Suntec Conference where it was alleged that Ken and Sally represented that “professional gamblers easily generated more than 20% returns on the principal in less than an hour” and that the Scheme was “[h]ence … able to guarantee the returns of all the investment packages”. The Promotional Brochure was also distributed at the Suntec Conference which featured Ken and Sally extensively “in many photographs by [Peter’s] side, with mountains of cash, Ferrari and yachts”, and which described the Scheme as a good investment opportunity because it was extremely profitable but also safe at the same time.

(b) Sandra’s pleaded case in her Statement of Claim was also repeated in her affidavit of evidence-in-chief.

(c) In her closing submissions, Sandra again emphasised that “2 persons [ie, Ken and Sally] … had told her that the Scheme was safe and profitable”.

82 As regards the Third Tranche, it is also clear to us that the Safe and Profitable Representation was pleaded as also applying to the US Property and Share Investment Packages purchased in that Tranche. In other words, if it were established that there was an operative misrepresentation as to the existence of professional gamblers generating profits using investors’ moneys when Sandra invested in the Third Tranche, her claim for misrepresentation would be broad enough to also include losses suffered as a result of purchasing the US Property and Share Investment Packages:

(a) Sandra pleaded in the Statement of Claim that “[i]n reliance on Ken, Sally and Sebastian’s continuing representations, [Sandra] purchased four US Property packages and three Share Investment Packages in August 2014” [emphasis added]. Sandra’s case must thus be taken to be that the Safe and Profitable Representation was a continuing representation following from the representations made in relation to the First and Second Tranches.

(b) In her affidavit of evidence-in-chief, Sandra also stated generally in relation to the Third Tranche that she was induced by the Safe and Profitable Representation to invest. She also deposed that “Ken and Sally emphasised again that SureWin4U was a very safe and profitable investment scheme which generated returns”.

(c) Moreover, it was clear from the trial that the respondents themselves concede that the Safe and Profitable Representation, if established, would affect the entirety of Sandra’s investments across all three Tranches, including Sandra’s purchases of the US Property and Share Investment Packages. Ken claimed that his understanding was that the money from all packages would go towards the professional gamblers to play baccarat at casinos using the winning formulas to generate returns for investors. He testified that his understanding of the Scheme’s business model was that “whatever the course fee that [SureWin4U] collected, [it] would [be] distribute[d] to their baccarat traders to trade for profit for the member [sic]”. Sally also accepted that, apart from miscellaneous merchandise, the Scheme had “[o]nly one business and that is to beat the casino”. She further accepted that, to generate income, the “only business [the Scheme was] doing … was this gambling at the baccarat table”.

(d) While the US Property Packages would give investors like Sandra a chance to own a property in the US, these packages could not have been for the sole purpose of purchasing properties in the US. This type of package was similar to the other packages that Sandra purchased in the First and Second Tranche, except that over and above the expected gambling returns, the investor would also stand to own a property in Detroit. This was effectively a bonus and explained why the US Property Packages were priced at a premium. This conclusion is also supported by the Promotional Brochure itself, which stated that the “US real estate” would be “give[n] away” for “free” upon the purchase of the US Property Package. Indeed, the respondents in their reply submissions below accepted that the property in the US was “being given for free”. Ken also confirmed in cross-examination that the US Property Package was like a Platinum Package, but with a property “throw[n] in”.

83 We make three further observations on what we understand to be Sandra’s case on the Third Tranche.

84 First, as regards the Share Investment Packages, Sandra pleaded that it was represented to her that the money would be used to acquire a company to be listed. This was repeated in her affidavit of evidence-in-chief. However, this is not inconsistent with the understanding above that the funds or part thereof from all the packages, including the Share Investment Package, would still be used to fund the professional gamblers. There is no indication that Sandra’s case is that the Share Investment Representation was that all the moneys received by the Scheme from the Share Investment Packages would be used to buy over a company that was going to be listed on the Singapore Stock Exchange in October 2014.

85 Second, the claim against Sebastian is solely premised on Sebastian having represented to Sandra that “she would receive a title deed to a house in Detroit”. If the misrepresentation claim with respect to the US Property Packages succeeds solely on the premise that the Safe and Profitable Representation was made, and not about the alleged representation that Sandra would receive a title deed to a house in Detroit, Sebastian would not be liable. This was conceded by counsel for Sandra, Mr Lok Vi Ming SC (“Mr Lok”) at the hearing of the appeal.

86 Third, Sandra’s case is that to buy the Share Investment Packages, one has to also purchase the US Property Package. This is not disputed by the respondents. In our view, the upshot of this understanding is that Sandra’s claim for misrepresentation in respect of the Share Investment Packages are connected to and stand together with the US Property Packages. If Sandra is able to recover losses for the purchase of the Share Investment Packages, it would follow that she would be able to recover her losses in respect of the US Property Packages.

87 Lastly, we express a final and more general point about what we understand to be Sandra’s case. The Judge held that the Safe and Profitable Representation was a statement of opinion or a statement as to the future or a promise (see [32(a)] above), which was also a point made by counsel for the respondents, Mr Christopher Anand s/o Daniel (“Mr Anand”) at the appeal hearing. Essentially, Mr Anand attempted to recharacterise the Safe and Profitable Representation by arguing that it was in substance a promise as to “how the money will be used” [emphasis added]. However, as explained at [76] and [80]–[82] earlier, Sandra’s case is that the Safe and Profitable Representation referred to the legitimacy of the Scheme. It must therefore be clear that this representation, if made, was a statement as to present fact. The Scheme was already in operation by the time Sandra invested in the First Tranche, and it is artificial to assert that Ken and Sally only represented to Sandra that the Scheme will be legitimate after she had invested in it. This was not how Sandra pleaded and ran her case.

88 In examining Sandra’s primary claim for fraudulent misrepresentation premised on the Safe and Profitable Representation, the first task for the Judge was to determine whether this representation was in fact made by Ken and Sally before examining its proper interpretation and whether the other elements of the claim were made out.

89 However, it is troubling that the Judge did not squarely address this essential factual point. Instead, at [55] of the Judgment, he found that Ken and Sally did not represent to Sandra that “SureWin4U was ‘safe’ and ‘profitable’ in the sense which Sandra says she understood it: that ‘the Scheme was legitimate, not a scam, and that I would not lose the sums that I invested in it’”.

90 It was implicit from this statement that the Judge accepted that the Safe and Profitable Representation was in fact made by Ken and Sally but that it did not bear out Sandra’s understanding. This point was also raised by Mr Lok at the hearing. With respect, we have some difficulty reconciling the Judge’s assessment that an investment which was represented to be “safe” did not mean that it was not a scam. Those findings, in our view, were mutually exclusive. If the investments were represented as being safe, it must be clear that those investments could not be founded on a scam and must be legitimate.

91 Be that as it may, we have no difficulty in concluding that Ken and Sally made the Safe and Profitable Representation to Sandra in relation to all three Tranches. While Mr Anand submitted before us that the respondents never made the representation, we do not think that his argument is tenable when weighed against the objective evidence. To be clear, Sandra’s case against Ken and Sally is not premised on them being the founders of the Scheme. While Ken and Sally might not have been the founders of the Scheme, that does not mean they did not make the Safe and Profitable Representation to Sandra. That would depend on the objective evidence before the court. In this regard, we note that the Minority Judgment at [185] accepts that Ken and Sally used the words “safe and profitable” when they spoke to Sandra.

92 Beginning with a point of general application, it cannot be seriously disputed that the “safe” and “profitable” aspect of the Scheme was advertised as the major selling point in a bid to attract potential investors. The Scheme’s Promotional Brochure in no uncertain terms described the Scheme as a “profitable and safe option” and touted it as one which enabled investors to “make a lot of money, but it’s safe”. While Ken and Sally might not have been the authors of the Promotional Brochure, we do not think that this detracts at all from the inference that it is more likely than not that Ken and Sally would have repeated the Safe and Profitable Representation to potential investors, including Sandra, as it was in their direct financial interest to attract more downlines. This is especially because the Safe and Profitable Representation was the entire business model of the Scheme and it is inconceivable that Ken and Sally did not repeat and promote the representation.

93 When Ken and Sally were asked during cross-examination about whether they had made the Safe and Profitable Representation at the Scheme’s seminars, they were evasive and refused to offer a straight answer. Ken was presented with the Promotional Brochure and was asked about whether he was “affirm[ing]” and “confirm[ing]” the accuracy of the Safe and Profitable Representation in the Promotional Brochure every time he went out and spoke about the Scheme and shared about his personal experiences. He refused to provide a “yes” or “no” answer but said that he would share his views, beliefs, and experiences, that it was up to the listener to “perceive” the message. Sally provided a similar response during cross-examination. Nevertheless, when Ken was subsequently pressed on whether he was a “messenger of … lies” when he made the Safe and Profitable Representation to potential investors at seminars, he eventually admitted that this was indeed his “experience” before the Scheme collapsed. This admission further supports the already strong inference that Ken and Sally must have, in general, made the Safe and Profitable Representation when they spoke about the Scheme to potential investors.

94 The next question is whether Ken and Sally specifically made the Safe and Profitable Representation to Sandra. As stated above (at [91]), we answer this in the affirmative in relation to all three Tranches and turn now to examine each Tranche in detail. Before examining the evidence in detail below, we pause to observe that our finding that Ken and Sally did make the Safe and Profitable Representation to Sandra is not inconsistent with the Judge’s decision.

95 On the First Tranche, Sandra’s pleaded case is that she was introduced to Ken and Sally and the Scheme at a seminar at the Royal Pacific Hotel. According to Sandra, Ken and Sally introduced themselves as “Teacher Ken” and “Teacher Ho” and said that they were the Singapore representatives of SureWin4U and were on close terms with Peter, SureWin4U’s Chief Executive Officer. Sandra also claims that Ken and Sally represented the following to her:

To reassure herself that she would not lose her investment, Sandra asked Ken and Sally again if it was safe. They affirmatively told her that there was “no problem” and that she should invest as soon as possible.

96 Ken and Sally deny making such a representation and claim that no such seminar took place. They instead pleaded that one of their downlines, Nelly, had organised a meeting with Sandra at the Royal Pacific Hotel in or around March 2014, without Ken and Sally’s knowledge. During the meeting, Nelly introduced SureWin4U to Sandra and introduced Sandra to Ken and Sally, who happened to be meeting their own accountant at the same time. Ken and Sally pleaded that the conversation between them and Sandra was brief and informal. They left it to Nelly to explain SureWin4U to their downlines and to any potential investors. They also claim that they neither introduced themselves as “Teacher Ken” and “Teacher Ho” nor said that they were the Singapore representatives of SureWin4U. At most, Ken and Sally state that they might have merely told her about their opinions about the Scheme, ie, that they had been quite lucky, and successful in their participation. In addition, they would have mentioned that Sandra had nothing to lose by attending a 99.8% class (by purchasing a package which was refundable if she could disprove that method). In this vein, they also aver that they were not notified when Sandra eventually invested in SureWin4U on 1 April 2014.

97 In our judgment, Ken and Sally made the Safe and Profitable Representation to Sandra in relation to the First Tranche. While Ken and Sally say that they left it to Nelly to explain the Scheme to Sandra, we do not find this account believable. It is important to first note that Ken and Sally do not deny that they did meet with Sandra on this occasion and that they had spoken to her. For successful uplines like themselves who had amassed huge profits from selling the Scheme packages to downline investors and who accounted for 70% of the Scheme’s earnings (see [10] above), it is hard to imagine that they would pass up the opportunity to promote the Scheme in that instance, and in doing so, it is also more likely than not that the Safe and Profitable Representation was made (see [92] above). It was unlikely that Sandra would have taken the plunge to invest without any assurance that the Scheme was safe and profitable, given that the packages that she purchased came at substantial cost.

98 According to Sandra, the event that induced her to make the Second Tranche investment was the Suntec Conference, a major event with some 1,000 attendees. Along with the Promotional Brochure (see [92] above), attendees were provided with the “Suntec Program Booklet”. Ken and Sally took centre-stage in it and were lauded for being among the top eight investors and the Scheme’s second-highest earners. They were also mentioned as being one of the only five pairs of “Seven-star agents”, the top tier of members in the Scheme. Sandra also highlights that the Suntec Conference included a gala dinner which saw Ken and Sally dressed elaborately, during which they spoke about how the Scheme lifted them out of poverty and that investors who followed in their footsteps could emulate their success. Crucially, it is Sandra’s case that Ken and Sally made the Safe and Profitable Representation, thus echoing what was said in the Promotional Brochure. Sandra also avers that there was a 99.8% method class which she attended at the Suntec Conference where Peter, Ken, Sally, and the rest of their team persuaded investors to put more money into the Scheme. Among other things, it was reiterated that the Scheme was a safe and profitable investment. Ken and Sally’s account of their rags to riches story was itself to lend credence to the Safe and Profitable Representation.

99 Ken and Sally’s case is that they did not invite Sandra for the Suntec Conference and were not aware that she had invested in the Scheme. The Promotional Brochure and the Suntec Program Booklet were prepared entirely by SureWin4U without their involvement and they were thus not responsible for its contents. While they admit to going up on stage at the gala dinner to speak about the benefits they received from the Scheme, they were not hard selling the Scheme or telling the attendees to invest but merely “sharing their opinions, beliefs and personal experience”. In relation to the 99.8% class which Sandra attended, they deny having persuaded or attempted to persuade the attendees to “put more money into the Scheme” or making the representations alleged.

100 In our view, Ken and Sally must have made the Safe and Profitable Representation to investors including Sandra at the Suntec Conference. It is germane that they admit to speaking at the gala dinner. We are unpersuaded that what they spoke about can be simply characterised as relating to their “opinions, beliefs and personal experience”. Again, given what Ken and Sally stood to gain by attracting more downlines for the Scheme, it was entirely in their interest to make a sales pitch for the Scheme. To explain how the Scheme purportedly worked, the Safe and Profitable Representation would have been key, and it was improbable that the representation was not made by Ken and Sally. Based on the transcription of Ken’s presentation at [11] above where he described the winning rate of 99.8, perhaps even 100% as “cash withdrawal” and “not gambling”, it was completely in Ken’s character to have hard sold the Scheme to Sandra.

101 The Third Tranche of Sandra’s investments into the Scheme happened in August 2014, shortly before the Scheme collapsed in September 2014. It was then when Sandra doubled what she had invested in the Second Tranche thereby trebling her total investments to HK$36,944,400.

102 To recapitulate, Sandra’s case is that a series of events led to her Third Tranche investments (see [15(c)] above):

103 The Safe and Profitable Representation in Sandra’s case was featured at the first four events while the remaining events were more related to the other representations (ie, the US Property Representation, the Share Investment Representation, and the Hong Kong No 1 Representation), which we will turn to in the subsequent parts of this judgment. For now, the focus is on the first four events as they relate to the Safe and Profitable Representation.

104 According to Sandra, she accepted Ken and Sally’s invitation to attend the June 2014 Dinner in Kowloon together with 20 to 30 others. During the dinner, Ken and Sally reiterated the Safe and Profitable Representation and related to her that participating in the Scheme had enabled them to purchase a landed property in Singapore. They also provided her with more copies of the Promotional Brochure to distribute to potential investors.

105 On 15 June 2014, Sandra attended a seminar organised by Ken and Sally at Windsor House. At this seminar, they largely repeated their various representations made at the Suntec Conference and, in particular, the Safe and Profitable Representation. Unexpectedly, Sandra was invited to speak to the audience. Sally motivated her to do so saying that she could be the “2nd Sally” and that she could even in due course surpass the financial success of Ken and Sally. Sandra then shared briefly with the audience and ended her speech by telling Sally that “I will follow [her]”. The next day, Sandra attended another Seminar at the Royal Pacific Hotel, where Ken and Sally again extolled the Scheme’s safety and profitability and encouraged investors to purchase more investment packages or refer new investors to the Scheme.

106 In the same month, Sandra claimed that Ken and Sally organised the Sri Lanka Conference which Sandra attended together with a few of her downlines. According to Sandra, there were some 3,000 people in attendance. During the conference, Ken and Sally organised a small-scale seminar for Sandra’s team of downlines. It was during this event that they were introduced to the US Property Package. Ken and Sally also asked Sandra to join them at a private meeting with Peter in his Presidential Suite. According to Sally, the meeting was only for leaders who were members of Peter’s “inner circle”. At this meeting, Sally introduced Sandra to the other attendees as the “next top representative for Hong Kong”, the next “Sally” of Hong Kong. Peter, Ken, and Sally told Sandra that the Scheme was doing well and had a bright and promising future. They then persuaded her to invest more and work on her sales figures.

107 Sandra also alleges that on 3 July 2014, two days after the Sri Lanka Conference ended, Ken started the “Dream Group Chat”. Its initial members were Sandra, Ken and Sally. Sebastian then joined around 24 July 2014. Sandra says that it was pertinent that Nelly and Joanna, who were Sandra’s immediate uplines, were not included. Ken started the chat by advising Sandra that she will meet the requirement of e-trader when she purchased 300,000 Yingbi. He then went on to say that “we will assess you on presentation, complan [ie, commission plan], back office operation when w[e] meet up”. Sandra’s case is that this meant that Ken and Sally had decided to take Sandra under their wing.

108 Ken and Sally’s response is essentially a denial of their involvement in making the alleged representations. First, on the June 2014 Dinner, they say that they did not invite Sandra and that the dinner was organised by Peter as a networking exercise for the Scheme’s significant investors, which Sandra became following her Second Tranche investment. Second, on the Sri Lanka Conference, they contend that it was organised and conducted by the Scheme, and not them. Third, on the private meeting with Peter in his Presidential Suite during the Sri Lanka Conference, Ken and Sally deny that they had arranged for Sandra to attend the private meeting, and that they would have only recommended their direct downlines who they felt met Peter’s criteria of being a “top” investor in the Scheme.

109 We first observe that Sandra’s case in relation to the Third Tranche, in contrast to the other two Tranches, is that the Safe and Profitable Representation was made as a continuing representation (see [82(a)] above). As the High Court observed in Yokogawa Engineering Asia Pte Ltd v– Transtel Engineering Pte Ltd [2009] 2 SLR(R) 532 (at [12]), there is a duty to correct a continuing representation that a party knows to be incorrect. To similar effect, the same court opined in Goldrich Venture Pte Ltd and another v Halcyon Offshore Pte Ltd [2015] 3 SLR 990 (at [44]) that a representation is of continuing effect until it is corrected.

110 In our view, it is significant that Ken and Sally did not deny that the said events that Sandra alleges took place. By that point, given Sandra’s substantial investments into the Scheme, Ken and Sally must have known that Sandra was convinced of the Safe and Profitable Representation. This was especially since, after Sandra’s investment in the Second Tranche, she started attending more Scheme events, which even included those which were reserved for an exclusive circle of investors. We observe that at no time did Ken and Sally disabuse Sandra of the false impression she had as regards the business model of the Scheme. Indeed, in arriving at this conclusion, we find that Ken and Sally made the Safe and Profitable Representation knowing that it was false, or at least being reckless (ie, indifferent) to as whether it was true or false, for reasons which we now explain.

111 We first observe that it is common ground that the Safe and Profitable Representation was false. This much was admitted by Ken and Sally in cross-examination. While Mr Anand submitted that the Safe and Profitable Representation was true because Sandra was already getting returns from the investments, this failed to address the nub of the Safe and Profitable Representation, being that money from investors would be used by professional gamblers to generate winnings at casinos using the Scheme’s gambling methods. That remains blatantly false.

112 We now turn to the question of Ken and Sally’s state of mind at the material times when they made the Safe and Profitable Representation. At first blush, the inquiry into a representor’s state of mind is usually one where direct evidence is absent. This is especially true in cases where fraud is alleged, since it would be rare for a fraudster to come clean about his deceit. As a result, even where direct evidence is not available, courts have not been slow to draw an inference of fraud if the surrounding circumstantial evidence is so compelling and convincing (see the High Court decision of Peng Ann Realty Pte Ltd v Liu Cho Chit and others [1994] 2 SLR(R) 682 at [33]; citing Sumitomo Bank Ltd v Thahir Kartika Ratna and others and another matter [1992] 3 SLR(R) 638 at [88]). In our judgment, this is one such case where an inference of fraud on Ken and Sally’s part should have been made by the Judge. We find that Ken and Sally were bedfellows in the Scheme with its founders, Peter and Philip, and knew that the Scheme was false by the time they first made the Safe and Profitable Representation to Sandra, ie, before the First Tranche. It is not necessary for the purpose of the appeal to determine whether Ken and Sally were aware of or privy to the fraud when they first participated in the Scheme.

113 First, it is particularly troubling that Ken and Sally could not produce the Missing Messages that would have shed light on their relationship with the Scheme’s founders and their knowledge of whether the Scheme was fraudulent. This was despite Sandra’s admission in cross-examination that she had a “private chat” or a “personal chat” with Philip, and Ken’s admission that he knew that the Missing Messages were relevant to the Police Reports he made in 2014 against the Scheme’s founders and that, by then, he knew that he had to preserve documents and information which were relevant to court proceedings and court actions.

114 It was not just their failure to produce the Missing Messages but their contrived explanations which in our view justify the drawing of an adverse inference that Ken and Sally knew about the fraudulent nature of the Scheme at the time when the Safe and Profitable Representation was made to Sandra. We do so under s 116(g) of the Evidence Act 1893 (2020 Rev Ed) (“Evidence Act”), the relevant parts of which read:

115 As the Court of Appeal in Sudha Natrajan v The Bank of East Asia Ltd [2017] 1 SLR 141 (“Sudha Natrajan”) explained (at [19]), illustration (g) of s 116 allows the court to draw an adverse inference as to any fact flowing from the nature of the evidence that would likely have emerged if evidence that could and should have been produced by a party is not so produced. The rationale for this presumption is one of “plain common sense”: the natural inference from a party’s failure to produce evidence which would elucidate a matter is that the party fears that the evidence would be unfavourable to it (see Jones v Dunkel (1959) 101 CLR 298 at 320–321).

116 The relevant principles governing the drawing of adverse inferences were endorsed by the Court of Appeal in Sudha Natrajan as follows (at [20], citing Thio Keng Poon v Thio Syn Pyn and others and another appeal [2010] 3 SLR 143 at [43]):

(a) In certain circumstances, the court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in the matter before it.

(b) If the court is willing to draw such inferences, these may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.

(c) There must, however, have been some evidence, even if weak, which was adduced by the party seeking to draw the inference, on the issue in question, before the court would be entitled to draw the desired inference: in other words, there must be a case to answer on that issue which is then strengthened by the drawing of the inference.

(d) If the reason for the witness’s absence or silence can be explained to the satisfaction of the court, then no adverse inference may be drawn. If, on the other hand, a reasonable and credible explanation is given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or annulled.

117 With these principles in mind, we are satisfied that an adverse inference should be drawn against Ken and Sally. It is clear that they were expected to produce the Missing Messages had those not been deleted, and their explanation for not preserving these messages was wholly unconvincing (see also, [26]–[28] above). Sally’s evidence at the trial was that she had changed her phone and phone number in 2015 and could not remember who she gave the phone to. She said that she had decided to give her phone away because she was, in her own words, “very, very depressed”, “[there was] so much of harassment” and she was told and encouraged by “SureWin members” and “people who care[d]” to “throw away the phone, to don’t answer, get rid of everything, wash it off”. She also said that it was her practice to never bring over messages and photographs from an old phone to a new phone. While Sally’s evidence under cross-examination was that it was her practice to change her phones and not keep the messages in her phones after 2015, there was no such mention of this practice in her joint affidavit with Ken filed on 19 February 2021 in opposition to Sandra’s application for specific discovery. This is highly probative of the inference that the Missing Messages were deliberately not preserved by Ken and Sally in order to avoid their discovery obligations.

118 We also find Ken’s explanation at the trial highly unsatisfactory. Incredulously, he answered in the affirmative when asked whether his, Sally’s, and Sebastian’s phones “vanished into thin air” between 2015 to 2016; he even agreed that that was the “year of the vanishing phone”. Although he had filed the Police Reports earlier in 2014, he testified that he was ignorant of the need to preserve the Missing Messages and attributed his failure to preserve the messages to the purported absence of any advice to that effect by his lawyers. This was notwithstanding his acknowledgement that the police might need those messages. It was further admitted that even after discovery applications were taken out against him in an earlier separate suit in connection with the Scheme (that was not settled until late 2017) (the “Discontinued Suit”), and he had communications with Peter and Philip between 2017 to 2018, he did not preserve those messages. In sum, we do not find any reasonable or credible explanation for Ken and Sally’s failure to preserve the whole of the Missing Messages or even a substantial part thereof.

119 We also find it extremely troubling that Sally was somehow able to produce only one message which she sent to Peter following the collapse of the Scheme (see [28] above). Sally deposed on affidavit that she had taken a screenshot of that message sometime between 2014 and 2015 to demonstrate to their downlines, who had been harassing them, that she and Ken had tried to get in touch with Peter, but there was no response from him. It appears to us that Sally was able to understand the benefits of preserving the message and yet she and Ken apparently failed to appreciate the importance of preserving the other messages with Peter, Philip and other investors relating to the Scheme despite filing the Police Reports on their purported losses. In our view, this is a clear case of selective preservation of evidence by Sally and Ken with a view to avoid their discovery obligations.

120 Further, there is independent evidence which shows that Ken and Sally must have known that the Scheme was fraudulent as they were in the top echelon of the Scheme and part of the inner circle of the Scheme’s founders. This was evidenced by Ken and Sally’s meeting with Peter in the 2018 Macau Meeting connected with Peter’s attempt to launch the new Prince Suncity Scheme (see [23] above), more than three years after the Scheme’s collapse. This meeting was documented in photographs of Ken and Sally in close proximity with Peter depicting them smiling and holding up wads of cash: