Tonny Permana v One Tree Capital Management Pte Ltd
| Jurisdiction | England & Wales |
| Judge | Chua Lee Ming J,See Kee Oon J,Quentin Loh JAD |
| Judgment Date | 24 August 2021 |
| Year | 2021 |
| Docket Number | Civil Appeal No 32 of 2021 |
| Court | High Court |
[2021] SGHC(A) 8
Appellate Division of the High Court
Quentin Loh JAD, See Kee Oon J and Chua Lee Ming J
Civil Appeal No 32 of 2021
Lee Hwee Khiam Anthony and Huineng Clement Chen (Bih Li & Lee LLP) for the appellant;
Siraj Omar SC, Allister Brendan Tan Yu Kuan, Teng Po YewandJoelle Tan (Drew & Napier LLC) for the first and second respondents.
Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 (refd)
Nordic International Ltd v Morten Innhaug [2017] 3 SLR 957 (distd)
Equity — Fiduciary relationships — Duties — Agent altering fundamental structure of principal's investment without principal's consent and agreeing to terms detrimental to principal's interests — Principal signing trust deed giving effect to alteration with knowledge of changes made — Whether agent breached fiduciary duties — Whether principal released agent from liability for breaches of fiduciary duties
Equity — Fiduciary relationships — When arising — Agency and security trustee deed remaining unsigned — Agent's director being appointed director of investee company and co-signatory of investee company's bank accounts — Whether agency and security trustee deed governed parties' relationship — Whether agent and agent's director owed fiduciary duties
The appellant, Mr Tonny Permana, was an Indonesian businessman. The first respondent, One Tree Capital Management Pte Ltd (“OTC”), was in the business of investment fund management, and the second respondent, Mr Gerald Yeo (“GY”), was OTC's sole director and shareholder. In November 2013, the appellant invested US$1.6m in a project to purchase and renovate an existing shopping mall in Kuala Lumpur, Malaysia (“the Project”), which was undertaken by Midas Landmark Sdn Bhd (“Midas”). This investment was arranged by OTC and GY, and took the form of a subscription to a convertible loan note.
The investment documents were dated 28 November 2013 and consisted of the following: (a) an “Investment Agreement”; (b) a guarantee and a share charge (collectively, “the Security Documents”) executed by Mr Tan Chong Whatt (“TCW”) and Mr Wang Jianguo (“WJG”), Midas's directors and the Project's promoters; and (c) a convertible loan note (“CLN”) for the value of US$1.6m. The terms and conditions (“T&Cs”) to the CLN provided, inter alia, that the CLN had to be redeemed by 28 November 2014, at which time the appellant would be paid the investment sum of US$1.6m and a 20% return. A form of the “Agency and Security Trustee Deed” (“ASTD”) was also appended to the T&Cs. The ASTD was never signed.
On 26 July 2014, without informing the appellant, the respondents entered into a memorandum of agreement (“the July 2014 MOA”) with TCW and one Mr Wang Yingde for the purchase of shares in Midas. The July 2014 MOA also provided that investor funds would be channelled to Midas through OTC as shareholder loans to Midas, the shareholder loans would replace the Investment Agreement, and the related guarantees would be discharged. On 18 August 2014, OTC issued a letter (“the 18 August 2014 Letter”) to Midas, TCW and WJG stating, inter alia, that OTC had terminated the Investment Agreement and fully discharged the Security Documents.
At around this time, on 3 August 2014, GY e-mailed the appellant's assistant, Ms Denie Tiolani (“Ms Tiolani”), informing her that the structure of the appellant's investment would be changed. Instead of holding the CLN, the appellant would be investing in the Project through OTC by way of a trust deed, under which OTC would hold US$1.6m of its shareholder loans to Midas on trust for the appellant. On or about 3 September 2014, GY sent Ms Tiolani a trust deed dated 31 August 2014 (“the Trust Deed”) to be executed by the appellant, reflecting the new arrangement. Attached to the Trust Deed was a letter backdated to 30 June 2014 from OTC to Midas (“the OT Letter”), stating, inter alia, that the shareholder loans from OTC to Midas were “[u]nsecured and subordinated”, that the final maturity date was subject to further notice from Midas, repayment of the loans would only be as permitted by the project financing bank, and the interest rate of 20% per annum was payable only after project completion.
The appellant did not sign the Trust Deed immediately. Further correspondence followed between GY and Ms Tiolani. On 19 November 2014, GY informed Ms Tiolani that the Security Documents had been discharged. On 20 November 2014, after a telephone call between GY and the appellant, the appellant signed the Trust Deed. The Project eventually failed, Midas was liquidated, and the appellant lost the investment sum and was never paid any returns as promised.
The appellant commenced proceedings in the High Court against the respondents on various grounds in contract, tort and equity based on the agency relationship that he claimed had arisen. The High Court judge (“the Judge”) dismissed all of his claims. The appellant appealed to the Appellate Division of the High Court only on the basis of his claims of breaches of fiduciary duties and dishonest assistance.
Held, dismissing the appeal:
(1) The parties had accepted and agreed upon the ASTD by conduct. OTC was an agent under the ASTD and the Investment Agreement, and owed fiduciary duties to the appellant in the context of its powers under the ASTD and the Investment Agreement. GY also owed fiduciary duties as cl 4.5 of the ASTD provided that OTC shall exercise its duties, responsibilities and powers through GY, and cll 3.1(c)–3.1(d) of the Investment Agreement provided that GY was to be the “Investor Director” in Midas and a co-signatory of the bank accounts opened for the purpose of the investments: at [15].
(2) The respondents did not owe fiduciary duties to the appellant in the context of dispensing advice and they were not engaged to advise on aspects of the appellant's investment. The ASTD did not impose that duty and the evidence did not support such a finding...
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Agency and Partnership Law
...continuing to earn both charter hire and also fees for VOM's related services. 1 [1993] 1 AC 205 at 213–214. 2 [2021] 5 SLR 477 (HC); [2021] 2 SLR 1103 (HC(A)). 3 Tonny Permana v One Tree Capital Management Pte Ltd [2021] 5 SLR 477 at [90]. 4 Tonny Permana v One Tree Capital Management Pte ......