BOM v BOK [2018] SGCA 83

Outcome: Appeal dismissed. 

Facts

1 The Wife appealed against the trial judge’s decision to set aside the Deed of Trust (the “DOT”) on the basis of misrepresentation, mistake, undue influence and unconscionability. The substantive issue was whether the DOT ought to be set aside on any one (or more) of these four vitiating factors. 

Court’s Decision:

2 The Court of Appeal held that the DOT ought to be set aside for misrepresentation, mistake, “Class 1” undue influence and unconscionability: at [91], [92], [100] and [114]. 

3 The elements of fraudulent misrepresentation are: (a) there must be a representation of fact by words or conduct; (b) the representation must be made with the intention that it should be acted on by the plaintiff; (c) the plaintiff had acted upon the false statement; (d) the plaintiff suffered damage by so doing; and (e) the representation must be made with the 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: at [89]. 

4 The law of mistake in relation to voluntary disposition is that the court had equitable jurisdiction to set aside voluntary dispositions on the ground of mistake. This jurisdiction is exercisable when there was a causative mistake, as to either the legal character of the transaction or a matter of fact or law that was basic to the transaction, and that was of such gravity that it would be unconscionable to refuse relief: at [90]. 

5 “Class 1” undue influence is also known as actual undue influence. The plaintiff must demonstrate that (i) the defendant had the capacity to influence him; (ii) the influence was exercised; (iii) its exercise was undue; and (iv) its exercise brought about the transaction: at [101]. 

6 The law would vitiate gifts that had been procured by undue influence even if the person exerting the influence did not receive the said gift. Where “Class 1” undue influence was concerned, the heart of the inquiry was whether the person exerting the undue influence had exercised such domination over the victim’s mind that his independence of decision had been substantially undermined. It is irrelevant that the person benefitting from the voluntary disposition or transaction had not exercised any undue influence over the plaintiff. The important point is that the voluntary disposition or transaction resulted from a wrongful exercise of influence: at [102] and [103].

4 To invoke the doctrine of unconscionability in Singapore, the plaintiff must show that he was suffering from an infirmity that the other party had exploited in procuring the transaction. Upon satisfying this requirement, the burden was on the defendant to demonstrate that the transaction was fair, just, and unreasonable. In considering whether or not the plaintiff was poor and ignorant, the court would also include situations where the plaintiff was suffering from other forms of infirmities, whether physical, mental and/or emotional in nature. However, not every infirmity would be sufficient to invoke the doctrine of unconscionability. It must have been of sufficient gravity as to have acutely affected the plaintiff’s ability to conserve his interests and must also have been or ought to have been, evident to the other party procuring the transaction. Further, it is not important that the transaction was at a considerable undervalue or that the vendor lacked independent advice. But these are important factors that the court would take into account: at [141] and [142].

The full text of the decision can be found here. 


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