Hudson Resources Limited v AceA Resources Pte Ltd

1. [1]

   The plaintiff, Hudson Resources Limited, is a public company that was, in 2014, listed on the Australian Stock Exchange.

2. [2]

   On 27 June 2014, Hudson Resources entered into a Sale and Purchase Agreement with the first defendant, AceA Resources Pte Limited, a company incorporated in Singapore, pursuant to which:

3. [3]

   I will refer to this agreement as the “First SPA”.

4. [4]

   The First SPA provided that Hudson Resources and AceA would set off the Tiaro Coal purchase price against the Mount Adrah purchase price so that, at closing, AceA would pay Hudson Resources $1,051,000, being the difference between the two.

5. [5]

   The third defendant, Mr Aw Cheok Huat, also known as Mr Mick Aw, was, in June 2014, a director of AceA and the chairman of AceA’s parent company, ICP Limited, a company listed on the Singapore Stock Exchange.

6. [6]

   Also on 27 June 2014, Mr Aw entered into a Sale and Purchase Agreement with Hudson Corporate Limited. I will call this agreement the “Second SPA”.

7. [7]

   Pursuant to the Second SPA, Mr Aw agreed to sell to Hudson Corporate, for a total consideration of $1,050,000:

8. [8]

   The relationship between the various members of the “Hudson Group of Companies” in 2014, including Hudson Resources, Hudson Corporate and Raffles Capital is set out in the attached corporate chart. MFI-2 - Corporate Chart (157503, pdf)

9. [9]

   As can be seen from the chart, the ultimate parent entity of the group was Pacific Portfolio Investments Pty Limited and the parent entity of both Hudson Resources and Hudson Corporate (the latter via Hudson Investment Group Limited) was Raffles Capital.

10. [10]

    Mr Vincent Tan was, in 2014, a director of Pacific Portfolio, Raffles Capital and Hudson Corporate. Mr Tan is presently a director of Hudson Resources, but was not a director in 2014.

11. [11]

    The only shareholders in Pacific Portfolio were Ms Cecilia Tan and Ms Luisa Tan. Ms Luisa Tan is Mr Tan’s daughter. The evidence does not reveal Ms Cecilia Tan’s relationship with Mr Tan. She shares his residential address.

12. [12]

    Hudson Resources claims that it entered into the First SPA as a result of the misleading or deceptive conduct of AceA and its agent, the second defendant, Mr Juay Sze Sin (also known as Mr Bernard Juay).

13. [13]

    Mr Juay is an accountant, based in Singapore. With Mr Aw, he is a director of MS Corporate Finance Pte Limited, a corporate advisory firm based in Singapore.

14. [14]

    Hudson Resources seeks orders that:

15. [15]

    Hudson Resources’ claim against AceA and Mr Juay is based on Mr Juay’s conduct on 27 June 2014 relating to changes made to the First SPA.

16. [16]

    Hudson Resources’ claim against Mr Aw arises from a payment instruction (“the Payment Instruction”) drafted by Mr Juay and sent to Mr Tan on 27 June 2014. The Payment Instruction was executed by a director of Hudson Resources, Mr Benjamin Amzalak on 30 June 2014. It resulted in the $1,051,000 payable by AceA to Hudson Resources under the First SPA being paid to Mr Aw. Mr Aw accepted that sum in satisfaction of the $1,050,000 due to him from Hudson Corporate under the Second SPA.

17. [17]

    The shares the subject of the First SPA and the Second SPA were transferred as required by those agreements.

18. [18]

    That is:

The hearing

1. [19]

   The hearing was conducted over five days on Microsoft Teams.

2. [20]

   The parties co-operated to ensure this process proceeded smoothly and with only minimal interruption.

3. [21]

   I was grateful for the assistance I received from Mr Condon SC, who appeared with Mr Bender for Hudson Resources, and Mr Hughes, who appeared with Ms Thrift for AceA, Mr Juay and Mr Aw; particularly for their careful closing submissions.

4. [22]

   Much of what follows, especially as to uncontroversial background matters, is drawn, with gratitude, from those submissions.

Decision

1. [23]

   Hudson Resources has not established that Mr Juay, and thus AceA engaged in misleading or deceptive conduct, nor that any conduct of Mr Juay or AceA misled Hudson Resources or caused it any loss.

2. [24]

   Nor has Hudson Resources established that it executed the Payment Instruction as a result of a mistake, whether induced by Mr Juay or otherwise.

3. [25]

   Indeed, I am affirmatively satisfied that Mr Juay did not behave in a manner that warrants any criticism of him.

4. [26]

   The proceedings should be dismissed.

The change to the First SPA

1. [27]

   As I have set out above,

2. [28]

   The change that was made to the First SPA, and that is central to this case, was made to cl 3.1, which specified what was to happen on closing.

3. [29]

   In the drafts of the First SPA prior to 27 June 2014, cl 3.1 read, relevantly:

4. [30]

   KhattarWong LLP, referred to in the chapeau to cl 3.1, is a Singapore law firm.

5. [31]

   In a version of the First SPA created on 27 July 2014, cl 3.1(b) was amended, and a new cl 3.1(c) was inserted. I will refer to this version as the “Amended First SPA”. The amendments were as follows, with the changes highlighted in revision mode for the purposes of illustration:

6. [32]

   The effect of this change was that, on closing of the First SPA, instead of AceA providing a cashier’s cheque in the sum of $1,051,000 to Hudson Resources or its nominee at the offices of KhattarWong, it was to pay the $1,051,000 into KhattarWong’s “client account”: that is, its trust account.

7. [33]

   Hudson Resources’ case is that it was unaware of this change, and was misled, and that this resulted in it executing the Payment Instruction. The circumstances in which the Payment Instruction came into being are at the heart of the dispute in the proceedings.

8. [34]

   The Payment Instruction was from Hudson Resources to KhattarWong. It read:

9. [35]

   The Payment Instruction referred to “$1,050,000” payable to Hudson Resources under the First SPA. In fact, as I have set out, $1,051,000 was so payable; a difference of $1,000.

10. [36]

    It is common ground that:

11. [37]

    The application of the $1,050,000 to Mr Aw allowed the Second SPA to complete.

12. [38]

    As between Hudson Corporate and Hudson Resources, an inter-company loan of $1,050,000 from Hudson Resources to Hudson Corporate was recorded in the books of each company on or around the time of the transaction. There is controversy about these entries to which I will return.

13. [39]

    After KhattarWong made the payment to Mr Aw, $1,000 remained in its trust account. That sum was paid out to Hudson Resources at its request in January 2015.

14. [40]

    Mr Hughes and Ms Thrift [2] summarised, diagrammatically, what happened as follows:

15. [41]

    Before turning to events leading up to 27 June 2014, and critical events thereafter, I will turn to the key entities and individuals.

Key entities and individuals

1. [42]

   As I have said, Hudson Resources was, in 2014, a member of the Hudson Group of Companies. Its registered office at the time was at Level 2, Hudson House, 131 Macquarie Street, Sydney.

2. [43]

   At the time, its directors were:

3. [44]

   Its Secretary was Mr Julian Rockett. Its Chief Financial Controller was Mr Francis Choy.

4. [45]

   In addition, it is agreed on the pleadings that the following persons were agents of Hudson Resources:

5. [46]

   Hudson Corporate was the counter party to Mr Aw in the Second SPA and, as the corporate chart referred to at [8] above shows, was at the relevant time a wholly-owned subsidiary of Hudson Investment Group Limited; itself then a publicly listed company. Hudson Corporate had its registered office at the same location as Hudson Resources. As I have said, Mr Tan was one of its directors. Mr Rocket and Mr Choy were company secretary and chief financial officer.

6. [47]

   Mr Tan is a party to almost all of the communications in these proceedings.

7. [48]

   In 2014, he was the managing director of Raffles Capital, which also had its registered office at Level 2, Hudson House. As the corporate chart to which I have referred shows, Raffles Capital had a shareholding in Hudson Resources and Hudson Investment Group (which in turn was the parent company of Hudson Corporate).

8. [49]

   As the events that I describe in detail below show, it is evident that Mr Tan exercised practical control over both Hudson Resources and Hudson Corporate.

9. [50]

   Hudson Resources did not call Mr Tan to give evidence. He is available. He lives in Sydney. No explanation was offered for his absence. As I have mentioned, he is a current director of Hudson Resources. I assume his evidence would not assist Hudson Resources. [3]

10. [51]

    As I have said, AceA is a company registered in Singapore.

11. [52]

    Mr Juay was not an officer of AceA but was involved in the critical communications, which I describe below, on 27 and 30 June 2014.

12. [53]

    He described his role as “facilitating” the transactions on behalf of Mr Aw.

13. [54]

    Mr Juay was in Singapore for the whole of the relevant period.

14. [55]

    All of the persons with whom Mr Juay communicated, including Mr Tan and Mr Kinstlinger, were in Sydney.

15. [56]

    In June 2014 Singapore time was two hours behind Sydney time. To avoid confusion between the time zones, I will refer only to Sydney time.

The events leading to 27 June 2014

1. [57]

   On 31 January 2014, Mr Tan, writing as chief executive officer of Raffles Capital, and on Raffles Capital letterhead, sent to Mr Aw a document headed “Letter of Undertaking” which read:

2. [58]

   Mr Kinstlinger sent this letter to Mr Aw by email on 31 January 2014. Mr Kinstlinger agreed that he drafted the letter.

3. [59]

   This letter demonstrates the practical control that Mr Tan exercised over Hudson Resources and Hudson Corporate. Raffles Capital was, according to this letter, in a position to procure that Hudson Resources sell the shares referred to in paragraph 1 of the letter and acquire the shares referred to in paragraph 2 of the letter; and also to procure (ultimately by Hudson Corporate) the acquisition of the shares referred to in paragraph 3.

4. [60]

   As later emails show, Mr Tan kept the directors of Hudson Resources informed of what he proposed would happen to fulfil the undertaking given in this letter. The directors followed Mr Tan’s direction without question.

5. [61]

   On 7 June 2014 Mr Juay emailed Mr Tan attaching drafts of the First SPA and the Second SPA. The drafts included the share sale prices that appeared in final agreements. [4]

6. [62]

   Mr Tan replied on 8 June 2014:

7. [63]

   A short time later, also on 8 June 2014, Mr Tan forwarded Mr Juay’s 7 June 2014 email, and the attached draft agreements, to each of the directors of Hudson Resources as well as to Mr Rockett, Mr Kinstlinger and Mr Choy stating:

8. [64]

   Mr Tan was referring to the two components of the transaction contemplated by the First SPA.

9. [65]

   Although, as I have said, Mr Tan was not a director of Hudson Resources at this time, his language is directive and, as Mr Hughes submitted, is not language that suggests that he had any doubt that the agreements would be approved.

10. [66]

    The next day, 9 June 2014, Mr Tan sent an email to Mr Juay, with a copy to Mr Aw:

11. [67]

    On the same day Mr Tan sent an email to the directors of Hudson Resources, as well as Mr Choy, Mr Kinstlinger and Mr Rockett which said:

12. [68]

    Again, Mr Tan is using the language of direction and, evidently, was not expecting any demur from either Mr Rockett or Mr Kinstlinger.

13. [69]

    Although in his email of 8 June 2014, Mr Tan has foreshadowed finalisation of the First SPA on 10 June 2014, there was a delay. Evidently this was because of the need for clearance of the proposed agreements from the Singapore Stock Exchange; no doubt because AceA’s parent ICP Ltd was listed on that exchange.

14. [70]

    On 10 June 2014 Mr Choy sent an email to Mr Rockett and Mr Kinstlinger:

15. [71]

    On 17 June 2014 Mr Kinstlinger sent an email to Mr Juay:

16. [72]

    Mr Juay replied a short time later:

17. [73]

    Mr Kinstlinger replied:

18. [74]

    On the evening of 17 June 2014 Mr Juay sent an email to Mr Kinstlinger, with a copy to Mr Tan:

19. [75]

    Within minutes, Mr Tan forwarded a copy of that email to the directors of Hudson Resources as well as Mr Choy and Mr Rockett with the note “FYI”.

20. [76]

    The following day, 18 June 2014, Mr Kinstlinger sent Mr Rockett an instruction:

21. [77]

    Later on 18 June 2014, an employee of Hudson Resources, Mr Tharun Kuppanda, sent to Mr Rockett a Hudson Resources circular resolution, signed by the directors, Mr Meers and Mr Amzalak, which stated:

22. [78]

    On 18 June 2014 Mr Amzalak, as a director of Hudson Resources, executed the First SPA in the presence of Mr Rockett as company secretary.

23. [79]

    In his affidavit, Mr Amzalak explained how it was that he executed the document by reference to a conversation he said he had with Mr Meers on 18 June 2014 as follows:

24. [80]

    Later on 18 June 2014 Mr Rockett sent Mr Kinstlinger an email with the heading “Agreements for Mick Aw” reading:

25. [81]

    Also on 18 June 2014, Mr Tan signed the Second SPA as director of Hudson Corporate and Mr Rockett signed as Mr Tan’s witness.

26. [82]

    Later on 18 June 2014, Mr Kinstlinger sent the executed First SPA and Second SPA to Mr Juay.

27. [83]

    There matters rested, until 27 June 2014.

The events of 27 June 2014

1. [84]

   At 7.54pm Mr Juay sent Mr Tan copies of the First SPA executed by Mr Aw as director of AceA in the presence of another director of AceA, Mr Su Jun Ming, and a copy of the Second SPA executed by Mr Aw personally in the presence of Mr Juay.

2. [85]

   This executed copy of the First SPA contained cl 3.1 in the form I have set out at [29] above.

3. [86]

   Mr Tan replied a minute later:

4. [87]

   Mr Tan then forwarded Mr Juay’s email and the executed copies of the First SPA and the Second SPA to the directors of Hudson Resources as well as to Mr Kinstlinger and Mr Choy.

5. [88]

   At 8.13pm Mr Juay sent Mr Kinstlinger (copied to Mr Tan) a copy of an announcement made by ICP Ltd to the Singapore Stock Exchange.

6. [89]

   That document announced the entry by AceA on 27 June 2014 into the First SPA and stated, amongst other things:

7. [90]

   Mr Juay said that at around 9pm [5] he had a conversation with Mr Tan which led to the critical change in the wording of the First SPA and to the Payment Instruction.

8. [91]

   In his affidavit, Mr Juay said that the discussion was in words to this effect:

9. [92]

   There is a dispute about whether this conversation occurred at all and, if it did, whether it was in the form to which Mr Juay deposed.

10. [93]

    For the reasons I set out below [6] , I am satisfied a conversation to this effect did occur. Before turning to that question, I will set out the events occurring on 27 June 2014 immediately after the conversation.

11. [94]

    In cross-examination, Mr Juay said that, immediately after his conversation with Mr Tan, he spoke to Mr Aw. He said the conversation was very short and that after he explained to Mr Aw what he had proposed to Mr Tan, Mr Aw said words to the effect:

12. [95]

    Mr Juay said that he then spoke to a solicitor at KhattarWong, Mr Winston Seow and that shortly after that conversation Mr Seow produced the revised wording to cl 3.1 of the First SPA to which I have referred at [31] above. Metadata in relation to Microsoft Word version of the First SPA shows it was amended at 9.03pm. [7]

13. [96]

    At 9.27pm, Mr Juay sent Mr Tan an email:

14. [97]

    The attached copy was the Amended First SPA, with the revised wording to cl 3.1, and including the execution page signed by Mr Amzalak and Mr Rockett on 18 June 2014 [8] . Counsel referred to this as the “recycled” execution page.

15. [98]

    Mr Juay understood, until part-way through his cross-examination, that he had also “recycled” the execution page earlier signed by Mr Aw and Mr Su. [9] However, in cross-examination Mr Juay accepted that slight differences between the execution page he forwarded under cover of his 9.27pm 27 June 2014 email and the execution page earlier signed by Mr Aw and Mr Su showed that he must have arranged for Mr Aw and Mr Su to re-execute the document on 27 June 2014.

16. [99]

    A minute later, at 9.28pm, Mr Tan replied:

17. [100]

    A minute later, at 9.29pm Mr Tan forwarded a copy of Mr Juay’s 9.27pm email, and the attached copy of the Amended First SPA to the directors of Hudson Resources as well as to Mr Kinstlinger and Mr Amzalak.

18. [101]

    Nine minutes later, at 9.38pm, Mr Juay sent an email to Mr Tan:

19. [102]

    Attached was a draft of the Payment Instruction to which I have referred. [10] It read in full:

20. [103]

    I am affirmatively persuaded that a conversation did occur between Mr Juay and Mr Tan. That conversation was to the effect that Mr Juay suggested, and Mr Tan agreed, that for administrative convenience AceA should pay the $1,051,000 due to Hudson Resources under the First SPA to KhattarWong’s trust account, with a view that $1,050,000 of that sum (that is, all but $1,000) would be paid to Mr Aw in satisfaction of his entitlements under the Second SPA.

21. [104]

    The bulk of Mr Condon’s cross-examination of Mr Juay, which occupies some 80 pages of the transcript, was directed to this conversation.

22. [105]

    Mr Juay gave his evidence on Microsoft Teams from Singapore.

23. [106]

    He gave his evidence calmly and clearly. He gave me the strong impression that he was doing his best to tell me the truth about his recollection of his conversation with Mr Tan.

24. [107]

    Mr Condon submitted that Mr Juay was an unimpressive witness. I do not agree. I found him to be an impressive witness.

25. [108]

    In the account of his conversation in his affidavit, Mr Juay said that he had made the suggestion, ultimately reflected in the Payment Instruction, “to ease the administration required for the two transactions”.

26. [109]

    Early in his cross-examination, Mr Condon asked Mr Juay to recount the conversation. This exchange followed:

27. [110]

    In that account, Mr Juay made no reference to having said to Mr Tan anything about Hudson Resources giving KhattarWong a direction to pay funds to Mr Aw, although that is precisely what the Payment Instruction states.

28. [111]

    Mr Juay also did not refer to having spoken to Mr Tan about new clause numbers to be included in the First SPA or having nominated the precise time at which his earlier email had been sent. Mr Juay accepted that he “may or may not” have said those words. I understood him to mean that he accepted that he probably did not actually speak to Mr Tan in those terms. He could not have done so because he did not then know what those paragraph numbers would be. Mr Juay thus in effect agreed that his affidavit account of the conversation with Mr Tan does not represent his actual recollection of the detail of the conversation. However, Mr Juay was adamant as to his actual recollection of the substance of what was said which is, after all, reflected in the terms of the draft of the Payment Instruction that he sent Mr Tan immediately after their conversation. Overall, I do not see the concessions made by Mr Juay as a reason to doubt the substance of his evidence.

29. [112]

    Overall, Mr Juay was very clear about the gist of what he had said to Mr Tan, as is revealed by this exchange:

30. [113]

    Mr Juay accepted that he had earlier opportunities to make the suggestion that he said was the subject of his conversation with Mr Tan. That caused me to have this exchange with Mr Juay:

31. [114]

    In the closing submissions, Mr Condon and Mr Bender, [12] devoted seven pages [13] to outlining 12 matters said to be inconsistent with a finding that the conversation took place.

32. [115]

    First, Mr Condon pointed to the difference between the account given by Mr Juay in cross-examination of the conversation and that set forth in his affidavit. As I have set out, there are some differences. I accept this is a matter to be taken into account. However, I think that Mr Hughes was correct to submit that Mr Juay’s evidence as to important matters did not change.

33. [116]

    I do not accept Mr Condon’s submission that Mr Juay’s proposal was so vague that Mr Tan would not agree to it. What Mr Juay was proposing was clear, and was in substance reflected in the draft Payment Instruction; which is also clear.

34. [117]

    Next, Mr Condon submitted that Mr Juay’s account of his conversation would render misleading the announcement made by ICP Ltd to the Singapore Stock Exchange that an amount payable to Hudson Resources under the First SPA had been “satisfied in cash”. [14] This is not a matter that Mr Condon suggested to Mr Juay occurred to Mr Juay at the time. In any event, when Mr Juay’s attention was drawn to it in cross-examination he said he thought “it was satisfied in cash”.

35. [118]

    Next, Mr Condon submitted that, even if the conversation occurred, it “would have given no reason for AceA or Mr Juay to believe that the changes to the [First] SPA had been approved by the board of Hudson Resources”. In my opinion this is beside the point.

36. [119]

    Mr Juay said that he understood that Mr Tan was the authorised representative of Hudson Resources for the purposes of the transaction. That is Hudson Resources’ pleaded position in this case and, as I have set out, was obviously the fact. I have no hesitation in accepting Mr Juay’s evidence that that is how he understood the position.

37. [120]

    In that regard, Mr Juay gave this evidence:

38. [121]

    In my opinion it was reasonable of Mr Juay to adopt this position. I accept that he had no reason to doubt that formal approval would, in due course, occur.

39. [122]

    Next Mr Condon submitted that, on Mr Juay’s account of the conversation, he and Mr Aw were content that Mr Juay would act on AceA’s behalf unilaterally and without board approval from AceA or ICP.

40. [123]

    But this was not Mr Juay’s position. As I have set out above, Mr Juay understood that Mr Aw and Mr Tan had authority from ICP/AceA and from Hudson Resources and left it to them to obtain whatever formal approvals or authorisations may be necessary.

41. [124]

    Next Mr Condon submitted that it was unlikely that “the idea of utilising a set-off at completion suddenly dawned on Mr Juay” on the evening of 27 June. I see no reason to doubt Mr Juay’s evidence about this matter.

42. [125]

    Next Mr Condon submitted that, as at the evening of 27 June 2014, it was not anticipated that there would be a simultaneous completion of the First SPA and the Second SPA. Mr Condon pointed to the different closing dates referred to in each document (30 June 2014 for the Second SPA but 4 July 2014 for the First SPA).

43. [126]

    Mr Juay’s proposal does appear to contemplate simultaneous settlement. I see no reason to doubt that was what he thought would happen.

44. [127]

    Next, Mr Condon queried what transaction costs might be saved by reason of Mr Juay’s proposal. I see nothing improbable about Mr Juay’s stated view that his proposal would be administratively simpler and avoid fees. The fact that it may not have achieved significant savings is a matter of little weight, in my opinion.

45. [128]

    Next Mr Condon pointed to the fact that the result that Mr Juay said he was seeking to achieve could have been achieved by making a nomination under cl 3.1(b) of the First SPA. That may be so but, evidently, it was not something Mr Juay thought of at the time. Mr Juay immediately accepted, when it was put to him, that nomination was another possible solution.

46. [129]

    Next Mr Condon submitted that, having made a suggestion which had the result of KhattarWong including cl 3.1(c) in the First SPA, “it would be odd for Mr Juay to recycle the execution pages for the original SPA rather than being up front about the change when he sent the purported SPA to Mr Tan and asking that Hudson Resources execute the document”. Mr Condon was referring to the fact that, as I have set out above, Mr Juay reused or “recycled” the execution page signed by Mr Amzalak and Mr Rockett on 18 June 2014. I do not see how that casts any light on whether the conversation took place as Mr Juay stated. In any event, the submission appears to proceed upon the assumption that the conversation did occur, and thus does not assist with the anterior question of whether the conversation occurred.

47. [130]

    Next, Mr Condon referred to cl 12 of the First SPA which provided that it can only be varied in writing. However, Mr Condon did not put to Mr Juay that he was aware of the clause or that it affected his thinking. It is unlikely that it did.

48. [131]

    Next Mr Condon referred to Mr Juay’s response to a letter Hudson Resources sent Mr Juay almost four years later, on 17 May 2018.

49. [132]

    That letter, which was signed by Mr Alan Beasley, then a director of Hudson Resources, referred to Mr Juay’s 7.54pm and 9.27pm emails to Mr Tan and continued:

50. [133]

    Mr Beasley requested an explanation. Mr Juay responded on 23 May 2018:

51. [134]

    Mr Condon referred to authorities stating that, in some circumstances, a failure to respond to an accusation may amount to an admission that the accusation is well made. [15]

52. [135]

    Those authorities are not to the point. On no reading of Mr Juay’s 23 May 2018 response was he making any admission. On the contrary.

53. [136]

    Finally, Mr Condon pointed to the fact that Mr Aw had not been called to corroborate Mr Juay’s evidence that he spoke to Mr Aw immediately after his conversation with Mr Tan. However, Mr Aw was not a party to the conversation between Mr Juay and Mr Tan and could not have given any evidence about that matter.

54. [137]

    In any event, Mr Condon’s submission was somewhat bold in circumstances where Hudson Resources did not call Mr Tan to give his account of the conversation. As I have said, Mr Tan is a current director of Hudson Resources and lives in Sydney.

55. [138]

    For those reasons, I do not accept any of the bases advanced by Mr Condon to not accept Mr Juay’s account of his conversation with Mr Tan.

56. [139]

    In any event, the email exchanges between Mr Juay and Mr Tan following the conversation are consistent with Mr Juay’s account of it.

57. [140]

    The emails between Mr Juay and Mr Tan are brief. Mr Tan’s 9.28pm response “OK thanks” to Mr Juay’s 9.27pm email “Please ignore earlier attachments and use the attached SPAs instead” is consistent with Mr Tan understanding the implications of Mr Juay’s email and its attachment. The draft Payment Instruction that Mr Juay sent Mr Tan immediately after their conversation is clear and evoked no response from Mr Tan suggesting any surprise or misunderstanding by him.

58. [141]

    If the conversation had not occurred, Mr Tan would surely have said something, or made some enquiry of Mr Juay.

59. [142]

    And Hudson Resources did not call Mr Tan to dispute Mr Juay’s account of the conversation.

60. [143]

    Mr Condon submitted that I should not give “undue weight” to this and referred to authorities describing the limits to the inferences that can be drawn when a party without explanation does not call an available and relevant witness. [16]

61. [144]

    But here, the failure to call Mr Tan is stark, particularly as Mr Condon put to Mr Juay that the conversation did not take place at all [17] . Mr Tan is, obviously, a person who could “cast light” [18] on whether the conversation took place and, if so, what its terms were. Hudson Resource’s failure to call Mr Tan enables me “more confidently” [19] to accept Mr Juay’s account of it.

62. [145]

    I am satisfied that a conversation took place between Mr Juay and Mr Tan to the effect of Mr Juay’s evidence. In particular, I am satisfied that Mr Juay suggested to Mr Tan that the transaction proceed on the basis set out in the draft Payment Instruction that Mr Juay sent Mr Tan immediately after their conversation.

63. [146]

    This finding is fatal for Hudson Resources’ misleading or deceptive conduct case against Mr Juay, AceA and Mr Aw.

64. [147]

    The conduct alleged by Hudson Resources in its Further Amended Statement of Claim to be misleading or deceptive is the:

65. [148]

    Mr Tan was an authorised agent of Hudson Resources for the purpose of his conversation with Mr Juay and received Mr Juay’s 9.27pm and 9.38pm emails in that capacity. Mr Juay told Mr Tan what he proposed was the effect of the amendments to be made to the First SPA. Mr Tan agreed. Mr Tan received the proposed form of the Amended First SPA, including cl 3.1(c) and must have seen its effect and understood its implications. He also saw, and must have understood, the implications of the draft Payment Instruction.

Events after 27 June 2014

1. [149]

   The following day, Saturday 28 June 2014, Mr Tan replied to Mr Juay’s email attaching the draft payment instruction:

2. [150]

   On Monday 30 June 2014 Mr Juay followed up on his 9.38pm 27 June 2014 email to Mr Tan concerning the payment instructions:

3. [151]

   Mr Tan immediately sent an email to Mr Kinstlinger, copied to Mr Juay:

4. [152]

   In his affidavit, Mr Kinstlinger said:

5. [153]

   Mr Kinstlinger continued:

6. [154]

   Within three minutes of receiving Mr Tan’s email set out at [151] Mr Kinstlinger replied to Mr Tan, copied to Mr Juay :

7. [155]

   Mr Kinstlinger intended to refer to clause 3.1(b) of the First SPA, rather than to “31.(b)”.

8. [156]

   Mr Kinstlinger’s statement that “we need to correct” the reference to cl 3.1(c) suggests that he had not then appreciated that cl 3.1 (c) had been added to the First SPA.

9. [157]

   But the true positon was immediately made clear to him.

10. [158]

    Thus, Mr Juay replied three minutes later:

11. [159]

    Twenty four minutes later Mr Kinstlinger replied to Mr Juay:

12. [160]

    In his affidavit, Mr Kinstlinger explained this email as follows:

13. [161]

    Mr Rockett was copied on this email exchange. He was not called to give evidence, but he must have understood that, contrary to the assumption Mr Kinstlinger said he made, Hudson Resources had not re-executed the First SPA since 18 June 2014. That is because he witnessed Mr Amzalak’s signature on 18 June 2014 and must have known he had not done this again.

14. [162]

    Mr Kinstlinger continued:

15. [163]

    Mr Kinstlinger’s evidence proceeds on a false basis, namely that Hudson Resources had not agreed to the inclusion of cl 3.1(c) in the First SPA or to the effect of the Payment Instruction. Hudson Resources, by its authorised agent, Mr Tan, had agreed to both these matters.

16. [164]

    And there is no evidence of what would have occurred had Mr Kinstlinger referred the matter to Mr Meers. Mr Meers was not called.

17. [165]

    Mr Condon submitted that:

18. [166]

    I do not accept that submission. It proceeds on the false assumption that changes had not been agreed to by Hudson Resources. In any event, I think the more likely inference is that, had Mr Kinstlinger spoken to Mr Meers about this matter, Mr Meers would have consulted with Mr Tan and been informed of Mr Tan’s conversation with Mr Juay and been instructed by Mr Tan to proceed on the basis of the Payment Instruction.

19. [167]

    In these circumstances, I did not accept that the result would have been that Mr Kinstlinger would not have passed on the draft Payment Instruction to Mr Rockett.

20. [168]

    I will return to this evidence when considering the question of whether any misleading or deceptive conduct by Mr Juay has caused any loss to Hudson Resources.

21. [169]

    Mr Kinstlinger arranged for Mr Juay’s draft Payment Instruction to be engrossed on Hudson Resources letterhead.

22. [170]

    The Payment Instruction was executed by Mr Benjamin Amzalak, a director of Hudson Resources. Mr Amzalak was the only director of Hudson Resources called to give evidence before me.

23. [171]

    In his affidavit, Mr Amzalak said that Mr Kuppanda gave him this document. He said:

24. [172]

    Before me, in chief, Mr Amzalak gave this evidence:

25. [173]

    In his affidavit, Mr Amzalak continued:

26. [174]

    I do not accept this evidence.

27. [175]

    In my opinion, the true position is that Mr Amzalak’s simply signed the Payment Instruction without giving it any serious attention. Mr Amzalak accepted that he did not exercise the necessary level of care that a director of Hudson Resources should exercise when executing this document. [21]

28. [176]

    And Mr Amzalak accepted that, by signing the Payment Instruction, he was giving effect to whatever it said.

29. [177]

    It is not necessary to rehearse further the evidence Mr Amzalak gave about this because, in final submissions Mr Condon accepted:

30. [178]

    A copy of the Payment Instruction as signed by Mr Amzalak follows:

31. [179]

    Also 30 June 2014, Mr Francis Choy, the CFO of Hudson Resources, received copies of the executed share transfer forms in respect of the transfer by Hudson Resources to AceA of the shares in Tiaro Coal and the transfer by AceA to Hudson Resources of the shares in Mount Adrah.

32. [180]

    In his affidavit, Mr Choy said:

33. [181]

    As I discuss below, despite later receiving and implementing instructions to reverse the entry in Hudson Resource’s books showing that AceA had paid the $1,051,000 called for by the First SPA, Mr Choy received no such instructions about these loan account entries.

34. [182]

    Subsequent credit entries to the loan accounts show that the loan from Hudson Corporate to Hudson Resources was fully repaid by 1 November 2014.

35. [183]

    The following day, 1 July 2014, Mr Rockett sent Mr Juay transfer forms executed by Mr Tan and Mr Rockett on behalf of Hudson Corporate in favour of Mr Aw for the shares referred to in the Second SPA, being shares in Hudson Resources, Raffles Capital, Sovereign Gold and Precious Metal Resources.

36. [184]

    The following day, 2 July 2014, Mr Juay returned the documents duly signed by Mr Aw.

37. [185]

    On 14 October 2014, the directors of Hudson Resources, including Mr Amzalak, resolved to ratify both the original form of the First SPA (being that executed on 17 June 2014 and bearing date 18 June 2014) and which contained the original wording of cl 3.1(b), and the Amended First SPA, bearing the date 27 June 2014, which contained the revised form cl 3.1(b) and the new 3.1(c) that Mr Juay had sent Mr Tan at 9.27pm on 27 June 2014.

38. [186]

    Mr Amzalak, who as I have said, was the only director of Hudson Resources to give evidence before me, annexed an unsigned copy of those minutes to his affidavit. He gave this evidence in cross-examination, first from a question from Mr Hughes and then in response to a question from me:

39. [187]

    Hudson Resources’ trial balance for 31 December 2014 included within loan accounts “Intercompany – Hudson Corporate Ltd” a debit dated 27 June 2014 for $1,050,000 described as:

40. [188]

    As I have mentioned, subsequent credit entries to that loan account show that the loan from Hudson Corporate to Hudson Resources was fully repaid by 1 November 2014.

41. [189]

    On 9 December 2014, Herbert Smith Freehills, for Hudson Resources Ltd, wrote to Mr Aw requesting an explanation for the receipt by Mr Aw of the $1,051,000 paid to him as a result of the Payment Instruction.

42. [190]

    The letter stated:

43. [191]

    The letter did not suggest that the Payment Instruction was not authorised.

44. [192]

    On 17 December 2014 Mr Tan sent a series of emails to Mr Kinstlinger, Mr Amzalak, Mr Kuppanda, Mr Rockett and Ms Louisa Tan [29] . The text of those emails and the time they were sent were:

45. [193]

    9.03am:

46. [194]

    9.09am:

47. [195]

    9.15am:

48. [196]

    9.19am:

49. [197]

    By these emails, Mr Tan appears to be raising for the consideration of the recipients, possible arguments to be deployed to seek to recover from Mr Aw the amount referred to in the Payment Instruction.

50. [198]

    Later that day, Mr Amzalak sent a letter to KhattarWong on Hudson Resources letterhead referring to the Payment Instruction, and requesting KhattarWong to remit to Hudson Resources the $1,000 remaining in its trust account, being the difference between $1,051,000 sent to KhattarWong pursuant to the Payment Instruction, and $1,050,000 payable by Hudson Corporate to Mr Aw under the Second SPA.

51. [199]

    Mr Amzalak, who signed the Payment Instruction, did not in this letter suggest the Payment Instruction was not authorised.

52. [200]

    KhattarWong paid the $1,000 to Hudson Resources during January 2015.

53. [201]

    Several years later, Hudson Resources engaged the Singapore Law Firm Allen & Gledhill.

54. [202]

    On 8 March 2016 Allen and Gledhill wrote to its parent company, ICP Ltd, suggesting that Mr Aw may have breached the Singapore Stock Exchange Listing Rules by failing to disclose his personal interest in the June 2014 transactions.

55. [203]

    Thus, Allen & Gledhill wrote:

56. [204]

    Allen & Gledhill set out the terms of the 31 January 2014 letter and continued:

57. [205]

    In a later letter Allen & Gledhill repeated the point:

58. [206]

    As Mr Hughes submitted, the assertions made in these letters contradict the case Hudson Resources seeks to make before me. Allen and Gledhill were contending that the sale by Hudson Resources of its shares in Tiaro Coal to Mr Aw’s nominee was to “finance the acquisition”, ultimately by Hudson Corporate, of Mr Aw’s shareholdings as set out in the Second SPA.

59. [207]

    On 17 May 2018 Hudson Resources sent Mr Juay the letter to which I referred at [132] above.

60. [208]

    Mr Juay responded on 23 May 2018 as I have set out at [133] above.

61. [209]

    Finally, on 14 June 2018, Mr Beasley sent a letter to Mr Choy on Hudson Resources letterhead asking Mr Choy to adjust Hudson Resources’ records to show AceA as still owing Hudson Resources the $1,051,000 referred to in the First SPA.

62. [210]

    Mr Choy gave effect to that instruction.

63. [211]

    Mr Beasley did not instruct Mr Choy to reverse entries in Hudson Corporate’s Loan Account with Hudson Resources to which I have referred at [38] above, no doubt because, by then, Hudson Corporate had repaid the loan.

64. [212]

    In his reply submissions, Mr Condon pointed to entries in Hudson Resources books that, he submitted, showed that Mr Choy reversed the loan account entries.

65. [213]

    I do not read those records that way; they appear to me to do no more than “reinstate” a receivable from AceA to Hudson Resources. Thus, in his affidavit, Mr Choy, immediately after referring to Mr Beasley’s 14 June 2018 instruction, described the effect of the document to which Mr Condon referred in his affidavit. He said the document:

Did Mr Juay and/or AceA engage in misleading or deceptive conduct?

1. [214]

   There was no dispute before me as to the relevant principles.

2. [215]

   Whether conduct is misleading or deceptive is a question of fact, to be determined objectively by reference to the alleged conduct in the light of the surrounding circumstances. [36]

3. [216]

   The relevant conduct must be capable of inducing error. [37]

4. [217]

   The conduct must convey a meaning inconsistent with the true position and thereby lead to error. [38]

5. [218]

   It is necessary to construe the effect of the conduct against the status, sophistication and knowledge of the person to whom the conduct is directed. [39]

6. [219]

   Finally, the conduct must be viewed as a whole. [40]

7. [220]

   Applying these general principles, the conduct of Mr Juay and AceA must, as Mr Hughes submitted, be analysed against the background that everyone involved in these transactions with Hudson Resources was an experienced commercial player with overlapping roles in numerous ASX listed companies.

8. [221]

   Further, the transactions involved a significant amount of money and, again, as Mr Hughes submitted, one would expect that commercial people would take care in consideration and execution of documents.

9. [222]

   As I have set out above, Hudson Resources has made precise allegations as to the conduct that it alleges to be misleading or deceptive. To repeat, that conduct is the:

10. [223]

    The reason this conduct is alleged to be misleading or deceptive is identified in Hudson Resources’ Amended Statement of Claim to be because:

11. [224]

    As I have said [41] , it follows from my acceptance of Mr Juay’s evidence about his conversation with Mr Tan that Hudson Resources’ case he, and thus AceA and Mr Aw, engaged in misleading or deceptive conduct is not established.

12. [225]

    In any event, Mr Juay’s 9.27pm 27 June 2014 email stated “please ignore earlier attachments and use the attached SPAs instead”. That made clear that the form of the First SPA attached to that email, the Amended First SPA, was different from the form of the First SPA signed by Mr Amzalak and Mr Rockett on 18 June 2014.

13. [226]

    The fact that a “new” clause 3.1(c) had been incorporated into the First SPA was also made clear to Mr Kinstlinger by Mr Juay’s 30 June 2014 email. [42]

14. [227]

    Mr Kinstlinger’s reply [43] saying that “I didn’t check for changes after Hudson had signed the SPA” shows that Mr Kinstlinger understood that the insertion of clause 3.1(c) was something that had happened after Mr Amzalak and Mr Rockett had signed the First SPA on behalf of Hudson Resources on 18 June 2014.

15. [228]

    Further, the terms of the draft Payment Instruction that Mr Juay sent Mr Tan under cover of his 9.37pm email on 27 June 2014, were clear and constituted a direction by Hudson Resources to KhattarWong to pay the $1,050,000 payable by AceA to Hudson Resources under the First SPA to Mr Aw. It made specific reference to clause 3.1(c).

16. [229]

    Neither the version of the First SPA as executed by Mr Amzalak and Mr Rocket on 18 June 2014, nor the version attached to Mr Juay’s 9.27pm email to Mr Tan on 27 June 2014 provided for or required any payment to be made to Mr Aw. Indeed neither of those documents required Hudson Resources to pay anyone at all as under those documents Hudson Resources was to receive the $1,050,000.

17. [230]

    It was obvious that the effect of the Payment Instruction was to change how the funds due under the First SPA were to be paid on completion.

18. [231]

    There was, for those reasons, nothing about the Payment Instruction that could have given any reader of it a misleading impression. Its obvious intent was to give effect to the completion of the First SPA and the Second SPA as simultaneous transactions.

19. [232]

    Mr Condon submitted:

20. [233]

    There are a number of points to be made about this submission.

21. [234]

    First, it did not require “careful scrutiny” of the emails in question, nor their attachments to disclose the terms of what Mr Condon referred to as “the Purported SPA”; that is the Amended First SPA. Second, I do not accept the submission that Mr Juay’s email of 27 June 2014 or 30 June 2014 “proceeded on the basis” or otherwise conveyed that the board of Hudson Resources “had assented to the payment terms”. Mr Juay’s emails did no more than pass on to Mr Tan, and to Mr Kinstlinger, documents reflecting the agreement that he had made with Mr Tan, as an authorised representative of Hudson Resources, on the evening of 27 June 2014.

22. [235]

    Contrary to Hudson Resources’ pleading, it is not correct that Mr Juay, Mr Aw and AceA did not inform Hudson Resources that the First SPA had been altered. Nor is it correct that Hudson Resources did not know of the alterations.

23. [236]

    To the contrary:

24. [237]

    Further, and as Mr Kinstlinger understood [44] , this conduct must be considered against a background of the undertaking given by Mr Tan under the letterhead of Raffles Capital to Mr Aw on 31 January 2014. [45]

25. [238]

    Paragraphs 1 and 2 of that undertaking formed the basis of the First SPA.

26. [239]

    Paragraph 3 forms the basis for the Second SPA. As Mr Hughes submitted, the two agreements were thus linked by their origin in that undertaking.

27. [240]

    For the same reasons, Hudson Resources was not misled by any of the conduct complained of.

28. [241]

    Hudson Resources knew of the true position through Mr Tan, Mr Kinstlinger and Mr Amzalak.

29. [242]

    In particular, Mr Tan was acting as Hudson Resources’ agent throughout and was the principal actor on Hudson Resources’ behalf.

30. [243]

    He knew and understood that the effect of what Mr Juay proposed on 27 June 2014 was that, instead of receiving $1,050,000 on closing of the First SPA, Hudson Resources would direct that sum to be paid to Mr Aw, in satisfaction of Mr Aw’s entitlements from Hudson Corporate under the Second SPA.

31. [244]

    Similarly, Mr Kinstlinger knew from his email exchange with Mr Juay on 30 June 2014 of the true position.

32. [245]

    As to Mr Amzalak, the only director of Hudson Resources to give evidence in these proceedings, he signed what was put in front of him because, as Mr Condon accepted, “he didn’t even care” [46] .

33. [246]

    There is also objective evidence which can only be consistent with Hudson Resources’ actually knowing the true position.

34. [247]

    First, there are the loan accounts created by Mr Choy, showing a debt by Hudson Corporate to Hudson Resources in the sum of $1,050,000 and the subsequent repayment by Hudson Corporate to Hudson Resources of that debt. [47]

35. [248]

    Second, there is the ratification by the board of Hudson Resources of the First SPA. [48]

36. [249]

    Third, there are the statements by Hudson Resources’ then Singapore solicitors, Allen & Gledhill [49] which are contradictory of the case that Hudson Resources has put before me.

37. [250]

    It follows from these conclusions that Hudson Resources has not suffered any loss “because” of any conduct by Mr Juay, Mr Aw or AceA. [50]

38. [251]

    In any event, Hudson Resources has not suffered any loss at all because, as a result of the transactions with which these proceedings are concerned, it acquired a debt from Hudson Corporate, which has now been paid off.

39. [252]

    As I have said, the instruction that Mr Beasley gave Mr Choy on 14 June 2018 to reverse the credit in favour of AceA Holdings did not, on the evidence, have the effect of reversing the relevant entries in the Hudson Resources/Hudson Corporate Loan Accounts.

40. [253]

    Hudson Resources pleads that:

41. [254]

    Hudson Resources has not shown that it executed the Payment Instruction as a result of any mistake.

42. [255]

    Mr Amzalak was simply giving effect to Mr Tan’s instruction to Mr Kinstlinger to “pl attend” to the execution of the Payment Instruction. It was Mr Tan who made the decision for Hudson Resources to do this.

43. [256]

    As Mr Hughes submitted, that is consistent with Mr Tan’s admitted role as an agent for Hudson Resources and his position as a director of Hudson Corporate.

44. [257]

    It is clear from the Raffles Capital letter that it was Mr Tan who had undertaken, on behalf of Raffles Capital, to procure the transactions which became the subject of the First and Second SPAs. It was Mr Tan who arranged those transactions and directed execution of the documents. It was Mr Tan who directed steps to implement the transactions. It is therefore the knowledge of Mr Tan that is relevant to the question of whether the Payment Instruction was executed under a mistake. Mr Tan was not mistaken. He was aware of, and agreed to the changes to the First SPA in the conversation with Mr Juay on 27 June 2014. It was Mr Tan who approved the form of the draft Payment Instruction and, on receipt of it, simply forwarded it to Mr Kinstlinger for execution.

45. [258]

    In any event, Mr Aw has changed his position based upon the payment such that it would be unconscionable to require him to now repay it. After he received the payment he transferred his shares to Hudson Corporate under the Second SPA.

46. [259]

    Mr Aw has acted to his detriment on the faith of the receipt. [51]

Conclusion

1. [260]

   For all these reasons, Hudson Resources’ case fails at every level.

2. [261]

   The Amended Statement of Claim should be dismissed.

3. [262]

   I will hear the parties as to costs.