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Swen Johnson v Wade Burridge - [2015] SGDC 49 (3 March 2015)

Contract – sale of race horse - misrepresentation – whether negligent

3 March 2015

District Judge Loo Ngan Chor :

1 The defendant has appealed my decision to enter interlocutory judgment for the plaintiff arising from a misrepresentation the defendant made leading to the plaintiff’s buying a race horse. My decision was for the defendant to pay the plaintiff’s damages to be assessed by me, with costs and interest reserved to the assessment hearing.

2 I set out my full reasons for the decision I came to, for the purpose only of the defendant’s appeal.

3 The plaintiff is an American citizen and, although around 40 years old, had recently retired as a businessman after selling his geospatial business on 31st December 2010.

4 He had grown up in New Jersey, USA and used to frequent the Monmouth Park racetrack. He had a handicapper’s perspective - see [36] for what this phrase meant. After retirement, he moved to Singapore and rekindled his interest in horseracing, which was when he thought he would invest in a racehorse. This was his first time buying a horse.

5 The defendant is in his late 20’s. He was a professional bloodstock agent and was the Singapore representative of Magic Millions Pty Limited, an Australian bloodstock auction house, until 31st December 2013. (See [50] below for what the initiated mean by “bloodstock”.) The defendant’s father, Steven Burridge, and step-mother, Julie Burridge, are horse trainers at the former’s stable and horse training facility called the Steven Burridge Racing Stables (“the stables”) located at the Singapore Turf Club. The defendant had an email address belonging to the stables.

6 The issues between the parties concerned the circumstances leading to the plaintiff’s purchase of a 75% share of a two-year old gelding from the stables for the price of A$112,500. Steven Burridge kept an interest of 25% in the gelding. The gelding came to be known as Pint-Sized Prince (“PSP”). PSP was sired by a race horse known as Outback Prince. The date the purchase of PSP happened was put as June 2011 by the plaintiff whereas the defendant placed it on 16th May 2011. The precise date does not quite matter for the purpose before me.

7 The plaintiff had emailed the defendant on 7th April 2011. The defendant replied by his email dated 11th April 2011, which contained what parties agreed were four distinct representations which were the subject of the suit. In his email of 13th April 2011, the plaintiff indicated that, whilst he would invest with the defendant, he would spend some time to gain knowledge and wisdom before committing himself. In the month or so before the plaintiff purchased his share of PSP, he did some investigations of his own which would be referred to below at [19] and [33].

8 The trial before me took place over two days. It was bifurcated. ^{[note: ]} The parties testified for themselves. The defendant also called a bloodstock expert, Mr Grant Allan Burns.

9 I shall now set out the two emails which set off the chain of events leading to the dispute.

10 The plaintiff’s email of 7th April 2011 ^{[note: i]} to the defendant read:

Sir,

I came across the webpage, ‘’ http: //www.stevenburridgeracing.com/bying_horses.htm ” and decided to contact you. I am interested in buying a yearling and/or a 2 year old. My budget is about 100K. I am a retired American businessman that is staying in Singapore. I have been frequenting the SIngapore racetrack the past month and grew up going to Monmouth Park in New Jersey, USA, so I have some familiarity with the sport, but really only from a handicapper’s perspective. Please let me know what a first step with you would be?

Thank you.

Swen Johnson

11 The defendant’s reply email dated 11th April 2011 ^{[note: ii]} to the plaintiff read:

Hi Swen,

I hope your feeling better and your on the mend asap.

I won`t be leaving until tomorrow night so if you would like to go to the track tomorrow morning then I can arrange that for you no problems at all?

After reviewing our conversations I have come up with a plan that I believe will suit your desire and needs best so please feel free to let me know if you are thinking over the same lines so we can get into action re the purchasing of your horses for Singapore racing.

At the moment we have two horses available for purchase and both ar of high quality. I have mentioned to yourself before.

After reviewing our conversations I have come up with a plan that I believe will suit your desire and needs best so please feel free to let me know if you are thinking over the same lines so we can get into action re the purchasing of your horses for Singapore racing.

At the moment we have two horses available to purchase and both ar of high quality. I have mentioned to yourself before briefly the two year old we have in our stable that is due to trial within the next two weeks. The horse in question was purchased by myself at last years ready to run sales at the gold coast for $100,000AUD. The horse ran up over 200m in 10.69 in which this time was better than average time performed at the sales being 10.98. The two year old gelding is by the group one winning sire in Outback Prince. Outback Prince was a quality animal who won two group ones one being over 1600m and the other being over 2000m. The thing i really like about the horse in question was that he was a sire who likes to get over a bit of ground yet he can still produce a horse to run over 200m very quickly which is a good sign in that the horse has stamina and a turn of foot which are the ideal ingredients for a good horse Singapore, As i have said to you already i believe he is our 2nd best two year old in our stable bearing in mind we have the best 2 year old in Singapore already so the measuring stick is of the highest quality.

The horse is unnamed and waiting to be named he is here and not far away from racing we are looking to aim this horse at the juvenile championship race that is being held in July and obviously some nice two year old races along the way so to me he is the ideal horse to be involved with as your first investment into racing as i believe you will have a quality horse and not have to wait too long to get returns on your investment . The horse has cost us to date $140,000 AUD which includes the freight, training back in Australia, purchase price and training up until the end of April in Singapore. We would be happy to take a 25% share in this horse with yourself if you decide to come in on this horse which i highly recommend.

The second horse that I would like to mention to you is a horse that we brought 2 weeks ago. To me this horse in question looks a ready made class 1 horse. He is a horse that had one trial back in Australia over the 1000m in Victoria in Which he demolished his rivals by 4-5lengths. The horse is a three year old gelding by the young sire Court Of Jewels – Court of Jewels was a highly promising galloper back in Australia until injury prevented him from what many believed was a champion in the making. The three year old will be coming to Singapore on the 26th April and we will be setting him for some late 3 year old races but more importantly the big sprint series races in November and then the very valuable 4 year old series that happens this time next year which will be what this horse will be ideally suited to and from what we had seen so far he should be ultra competitive. This horse reminds me exactly of a another horse i brought from a winning trial at Cranbourne in Victoria called Black Ice- Black Ice won a trial in Victoria and while he didn`t win it as impressively as what this horse won it he gave the impression that he was always going to be a quality galloper and that is exactly how he was turned out. This quality

Animal will cost by the time he lands in Singapore $200,000AUD again we would be happy to take a 25% share in the horse with you and as I said earlier he looks to be a horse that has at least class 1 material written all over him.

For both of these horses the total costs for a 100% share would be $340,000AUD but if you would like we would be more than happy as mentioned to take a 25% share in them both. So for the 75% share in both animals it would cost yourself $255,000AUD. On both of these deals you will have no more costs until may 1 which is when you would start paying training fees etc etc.

If you would like to take a 100 share% in both the horses then of course we would not stop you but i think for your first investment it would be wise to take 75% and enjoy the ride that we are about to take on together with us in your stable.

Swen I believe this would be your best and safest option regarding your first venture into horse racing and knowing the quality of animals in which we are offering you I firmly believe that you will have the potential to have two horses that will get to the top in Singapore racing.

If you require any more information or want to chat further re the horses or other opportunities then please don`t hesitate to call me or email me back.

Regards

Wade Burridge

Emphases added to highlight the four representations.

12 The statement of claim pleaded the defendant’s four representations “to the plaintiff, a first time buyer” ^{[note: iii]} as follows:

(a) The two year old gelding is by the group one winning sire in Outback Prince. Outback Prince was a quality animal who won two group ones (,) one being over 1600m and the other being over 2000m. (“the first representation”)

(b) The thing [I] really like about the horse in question was that he was a sire who likes to get over a bit of ground yet he can still produce a horse to run over 200m very quickly which is a good sign in that the horse has stamina and a turn of foot which are the ideal ingredients for a good horse [in] Singapore. (“the second representation”)

(c) As [I] have said to you already i believe he is our 2nd best two year old in our stable bearing in mind we have the best 2 year old in Singapore already so the measuring stick is of the highest quality. (“the third representation”)

(d) he is the ideal horse to be involved with as your first investment into racing as [I] believe you will have a quality horse and not have to wait too long to get returns on your investment. (“the fourth representation”)

13 The statement of claim pleaded that the defendant knew or ought to have known that the plaintiff would rely on the representations and be induced to purchase PSP, that he was under a duty of care when making the representations and that the plaintiff relied on “the truth and accuracy of the representations” when he purchased 75% share in PSP in June 2011.

14 The plaintiff pleaded ^{[note: iv]} that all four representations were false because:

(a) Outback Prince in fact only won one Group One race at 1600.

(b) PSP was not sired by a horse that “likes to get over a bit of ground yet he can still produce a horse to run over 200m very quickly which is a good sign in that the horse has stamina and a turn of foot which are the ideal ingredients for a good horse [in] Singapore”.

(c) In view of (a) and (b) above, PSP was not the “2nd best two year old” at The stables; and/or

(d) In view of (a), (b) and (c) above, PSP was not “the ideal horse to be involved with as [the plaintiff’s] first investment into racing” and/or a “quality horse”.

15 The plaintiff pleaded that the defendant had made the representations fraudulently, or else negligently, or else that he relied on s2 of the Misrepresentation Act (Cap 390).

16 The plaintiff’s damages were calculated by reference to an email dated 2nd May 2012 from Julie Burridge that Steven Burridge would sell his 25% share in PSP for A$10,000, so that the plaintiff’s share was [then] valued at A$30,000. His alleged damages were thus A$82,500.

17 In regard to the first representation, the defence admitted “that PSP’s sire, Outback Prince, had won only one Group One race at 1600m”. The defence argued that the representation “was made with honest belief” and in any case was not material because the defendant had, in his 13th April 2011 email to the plaintiff, said that plaintiff was to “use our advice as a strong guide” ^{[note: v]}

18 The defence also stated that there was no reliance on the first representation by the plaintiff because the plaintiff had stated in his emails dated 13th April 2011 and 17th April 2011 to the defendant that he (a) “will take [his] time and have learned success from [his] other endeavors has come from gaining relative wisdom and then making the best choice from a good knowledge base. It’s going to take some time to get the education I need to get comfortable…” ^{[note: vi]} and (b) “Thanks for holding my place on the two hopefuls, but I won’t be able to make any decisions for at least a month I am thinking.” ^{[note: vii]}

19 The defence further stated that the plaintiff’s fiancée was part of the decision-making process and she wished to visit the stables, the plaintiff himself personally visited PSP four times including once on 9th May 2011 and had viewed PSP’s live trial runs twice and spoken with PSP’s jockey and trainer.

20 In regard to the second representation, the defence stated that it was true in that PSP’s sire, Outback Prince, was a good long-distance race horse having won one Group One race over 1600m and that PSP itself had performed well over 200m, clocking 10.69 seconds at a breeze-up for the Magic Millions 2010 National Horses in Training Sale on 20th September 2010 in Gold Coast, Australia. PSP’s performance at the breeze-up sale led to the stables purchasing PSP for A$100,000.

21 It was also the defendant’s position that the second representation was true because PSP had performed well after the plaintiff’s purchase by getting first to third positions in six races out of 13 and winning prize money of $60,851.25 as at 2nd January 2013.

22 The defence also pleaded that the second representation was made honestly or was mere puff or was not a material representation or that the defendant intended to induce or that the plaintiff was in fact induced by this representation.

23 The defence pleaded that the third representation was true, ie, that PSP was [then] the 2nd best two year old at the stables having run well at the breeze-up sale as well as in six of the 13 races post-sale to the plaintiff.

24 Alternatively, even if untrue, the same defences were repeated as in [22].

25 As for the fourth representation, the defence pleaded that it was true owing to the facts at [20-21]. Alternatively, if untrue, he relied on the points at [22].

26 In regard to the plaintiff’s alleged damages at [16], the defendant pleaded that he was not aware of Julie Burridge’s email. It was also pleaded that even if there was such valuation as alleged, the valuation took place on 2nd May 2012 whereas the sale to the plaintiff was on 16th May 2011.

27 In his reply, the plaintiff’s position was that he did rely on the defendant’s false representations and the fact that he took time and trouble to check out PSP did not detract from the fact that he was induced thereby to make the purchase. ^{[note: viii]}

28 My decision, ^{[note: ix]} following the conclusion of the trial and the parties’ closing and reply submissions in writing, was that:

(a) the defendant’s representation in respect of Outback Prince’s winning a Group One Race over 2000m was not fraudulent;

(b) the subsidiary representations set out at [12(b), (c) and (d)] were in the nature of puffs and not actionable;

(c) however, the defendant’s misrepresentation in regard to the non-existent 2000m win was negligent. For this reason the defendant was liable for any damages to be proved at a separate hearing before me.

Considering that this appeal is only by the defendant, these grounds of decision will be limited to my decision at (c) that the defendant’s mistake was a negligent misrepresentation. I will not touch on my reasons for my findings at (a) and (b).

29 I move on to consider aspects of the witnesses’ evidence.

30 In his affidavit of evidence-in-chief, ^{[note: x]} the plaintiff said that while growing up in New Jersey, USA, he used to frequent the Monmouth Park racetrack to watch races for leisure. When his interest in horseracing grew after he moved to Singapore, he “decided to venture into horseracing by investing in a race horse.” He came across the website of SBRS in which the defendant was stated to be a “bloodstock agent with a proven track record of buying quality horses.” He wrote the email dated 7th April 2011 after which the defendant had “contacted” him for a discussion.

31 The plaintiff said that he had by then “done [his] own research on the key attributes of leading racehorses generally, and the factors to consider when purchasing one.” His understanding was that a horse’s pedigree is “significant”. By pedigree, he referred particularly to “their ancestors’ racing records, percentage of progeny that are winners, the type of horse that the sire produces”. Pedigree was important for unraced young horses owing to “the absence of any racing record or ‘form’”.

32 In his discussions with the defendant in April 2011, he told the defendant that he was a first-time buyer of a horse and his “familiarity with the sport was limited to a handicapper’s perspective.” He told the defendant that he wished to invest in a quality young horse to race in Singapore, specifically, that it should have “a good pedigree, in particular, from a sire with multiple wins.”

33 The plaintiff said that the defendant was aware that he was a first-time buyer and counted on his advice as a professional bloodstock agent in buying a horse. He did rely on the defendant’s representations in buying PSP even though, “naturally”, he needed to inspect PSP for its physical appearance and movements, apparent good health and behaviour. He also wished to have his fiancee’s approval for the purchase. With the defendant’s help or invitation, the plaintiff viewed PSP four times in May 2011 and watched PSP’s trial race at the Singapore Turf Club on 5th May 2011.

34 All said, it was the plaintiff’s point that “if not for the fact that [he] believed PSP’s pedigree met [his] requirements, [he] would not have bothered to expend the time and effort to go down to the stables to inspect it.” This, he said, explained his email of 13th April 2011 ^{[note: xi]} to the defendant. In this email, the plaintiff had stated amongst other things that:

Am pretty sure I will make an investment with you, but will take my time doing it and have learned success from my other endeavors has come from gaining relative wisdom and then making the best choice from a good knowledge base. It’s just going to take some time to get the education I need to get comfortable. If you stick with me, I do value and match loyalty step-for-step.

35 The plaintiff maintained that he did not independently check on PSP’s pedigree.

36 In cross-examination, the plaintiff explained that by handicapper’s perspective, he meant being able to reckon a horse’s prospect in a forthcoming race by a consideration of factors ranging from the horse’s physique, trainer, jockey to track conditions and weather. ^{[note: xii]}

37 When shown a pedigree sheet ^{[note: xiii]} of PSP in the defendant’s bundle of document the plaintiff denied that the defendant had shown him a copy on the defendant’s Ipad. The plaintiff maintained that he only saw a similar document when he investigated why PSP had lost nine out of ten races in April 2012. ^{[note: xiv]}

38 In regard to a question about whether a single Group One win meant that Outback Prince was a quality race horse, the plaintiff agreed in the following extract:

Q Now, earlier you told us that a Group 1 race is the top category of races?

A Yes.

Q Can I suggest to you that any horse that wins a Group 1 race is not a matter of luck but because it’s a quality horse? Would you agree with me?

A Yes.

Q Thank you. Now, we’ve gone through some of the winnings and---and the earnings of---of Outback Prince, would you agree that Outback Prince is a fairly successful horse?

A Uh, point of clarification, Your Honour, you, uh---uh, are you asking about whether he has been successful as a sire or as a---

Q No---

A racing horse?

Q as a racing horse.

A As a racing horse, he won $841,000, uh, so, uh, based on that you would say that he was---he was of good quality, sure.

39 In his affidavit of evidence-in-chief, ^{[note: xv]} the defendant said that he was a Singapore representative of Magic Millions Pty Limited, an Australian bloodstock agent, until 31st December 2013. Being born into horse racing - his paternal and maternal grandfathers and his father were jockeys and horse trainers, and his father was in the bloodstock business – he was “familiar with the business of buying and selling horses.” He himself had been “in the horse racing industry and bloodstock business for about 9 years” as at the time of his affidavit on 26th February 2014.

40 Between the plaintiff’s first email of 7th April 2011 and his reply email on 12th April 2011, he spoke to the plaintiff [once] over coffee at the Marina Bay Sands although he could not recall quite what except that he said he had a nice horse or two in mind, that he would “send the plaintiff the pedigrees of the horses as soon as possible” and that since this would be the plaintiff’s first race horse, it was perhaps better that he took a 75% share in a horse. He said that he told the plaintiff that “we would be happy to take a 25% share… this would mean that the horses would remain with [the stables] and be trained by Steven Burridge.” Parenthetically, I should note that the 12th April 2011 email referred to by the defendant is really also the 11th April 2011 email referred to at [11] above.

41 Referring to the short series of emails from 13th April 2011 to 17th April 2011, the defendant made the point that it indicated that the plaintiff was “careful and meticulous in making his own decision to purchase PSP. It was evidence to [him] that [the plaintiff] did not rely solely on what [the defendant] had told [the plaintiff] but that he had done his own research and even involved his fiancée in the process.”

42 The defendant said that “it was only around 30 April 2012 that [he] came to know that PSP’s sire had not won two group one races but only one. This was via an email ^{[note: xvi]} which the plaintiff had sent to my father.” This mistake did “not lower the value and quality of PSP.” He did not “intend for or know that the plaintiff would so rely on this statement”.

43 The defendant pointed out that PSP had, post-purchase, performed well, winning his first race over 1200 m on 5th June 2011 with the plaintiff reported in an article ^{[note: xvii]} to have said that “[the defendant] did a good job in finding this horse…” and with prize monies of S$163,351.25.

44 In respect of the emails passing between the plaintiff and the defendant’s step-mother around mid-2012, the defendant said that he was not privy to these. In this regard, the defendant stated that “… a horse’s value is essentially based on its performance. The sire’s history may be a minor factor to be considered before the horse has raced, or if it is bred to be a stud. However, PSP was not a stud. Once a horse has raced, it’s (sic) value is determined by its performance. … I am confident that the fact that PSP’s sire only won 1 group one race instead of 2 would not have affected PSP’s value at all.”

45 In respect of full ownership of PSP being transferred to the plaintiff around 29th September 2012, the defendant said that the transfer was “without further consideration provided by [the plaintiff]… However, [the defendant knew] that [his] father had to let go of PSP as he was no longer its trainer. According to the Malayan Racing Association’s Rules of Racing, which governs trainers including [his] father, a horse trainer is not allowed to own a horse that he does not train. As such, the plaintiff had essentially paid AUD$112,500 for the 100% ownership of PSP.”

46 In cross-examination, the defendant admitted that the plaintiff did tell him that he (the plaintiff) wished to buy a race horse from a sire with multiple wins but not multiple group one wins. ^{[note: xviii]}

47 In respect of the pedigree sheet of PSP, the defendant averred that he had shown a copy of it to the plaintiff when they met at Marina Bay Sands on 10th April 2011. He agreed that the pedigree sheet showed Outback Prince to be the sire and Moongambler the dam. It also showed that Outback Prince had won four times, including thrice below 1600m (considered the sprints) and once at 1600m (considered a middle distance). Only the 1600m was a Group One win. ^{[note: xix]}

48 The defendant’s explanation of why he made the mistake in referring to a non-existent win by Outback Prince over 2000m was as follows: ^{[note: xx]}

Q The other Group 1 race, he did come in 2nd in one of the 2,000 metres Group 1 race. Is that what you are referring to?

A No, actually what I'm referring to, Your Honour, is he won the TJ Smith Classic which is a Group 1 for 2-year olds over a mile, which is a---which is a time-honoured race since it’s obviously worth half a million. But I firmly believe in---and where I made the honest mistake was the day he ran 2nd in the Spring Champion, I actually thought he---I was at the races that day and, uh, as you can see it was a quite a tight finish and off the top of my head, I thought he won the race from memory and that was the race that was, uh---Spring Champion---sorry---that was the race in the 2nd of October, but when they’re during former---and Swen would---Swen would---Swen uh, from a handicapper’s perspective and also myself who know form quite well, um, sometimes your---your win isn't your---

Q Mr.---

A best---

Q Burridge---

A race.

Q can we focus on the question---

…

Q ^{[note: xxi]} Mr. Burridge? Mr. Burridge, yesterday I suggested to you that your representation in your 11th or 12th April 2011 e-mail that Outback Prince won two Group 1 races of 1,600 metre and 2,000 metres cannot be an honest mistake because you had the information in DB4 which sets out that the races that Outback Prince won of a 1,200 metres to 1,600 metres and Outback Prince only won one Group 1 race. That was what I suggested to you yesterday. You however claim in your evidence that this was an honest mistake. I then suggested to you that this cannot be an honest mistake because of the information you had by way of DB4 which sets out clearly that Outback Prince only won one Group 1 race of 1,600 metres and the other 4 races he won are from 1,200 to 1,600 metres. Can you, in view of this, explain to this Court how you came about to make this honest mistake when you sent this e-mail of 11th and 12th April 2011?

A Your Honour, when I made the mistake I remember Outback Prince is a racehorse, he’s a quality horse. Uh, I was there the day he won the 1,600 metre Group 1 race and I was also there at the day he finished 2nd and 3rd at Group 1 level. Uh, the day he finished 2nd he finished the 2nd by less than half a length and, uh, I remember seeing the run and highlighted how good the run was. When I was writing the e-mail regarding the horse I simply took it off the top of my head and write about the horse, how he was a Group 1 winner and a group---uh, and a---and also a Group 1 winner of 2,000. Um, talking about the horse Outback Prince, uh, if you go to his racing record which, uh, is at the---which is page 122 and 123, uh, if you see where he ran, uh, 2nd on the 2nd of October 2004 in the Spring Champion Stakes he---he finished 2nd by half a length on a heavy track to a horse called Savabeel who is now, uh, a champion sire in New Zealand. He also beat a subsequent Group---Group 1 winner in Cedar Manor. If you look at the 12th of March race, another race that I saw and I was---I actually was at, um, he finished 3rd in the Group 1 to another very good horse in Eremein who, um, who’s a Group 1 winner but his best run which is the one that, uh, yah, the highlight of this horse was, Your Honour, is when he actually ran 4th in a $2 million race. At the time Makybe Diva was probably the best mare Australia has ever produced and one of the best mares in the world. She won 3 Melbourne Cup which is---which has never been done. A Melbourne Cup is, uh, probably the most famous race in Australia. They actually have a public holiday for that day. Um, it’s like Singapore National Day, I suppose. Uh, Grand Armee was also a multiple Group 1 winner and Viewed was a Group 1 winner. Um, that race highlighted to me how good the horse was and how---how much quality the horse had and also that he loved to get over a bit of ground.

Q Mr. Burridge, you gave an extremely long explanation for my question as to how you came to this honest belief.

A It---it took a long time to---to---to explain it, that’s why.

Q Well, Mr. Burridge, I acknowledge that you just said that it took a very long time to put forward this explanation. But Mr. Burridge, this explanation which is a key part of your defence is nowhere to be found in your pleadings, do you accept that? Well, I can show you your pleadings---

A Yes.

Q and if you pick up---

A Could you---

Q the Bundle of Pleadings and you just turn to paragraph 13. It is clear that this lengthy explanation that you have now given to this Court is nowhere to be found in the pleadings.

49 Contra [44] above, the defendant agreed that, because Outback Prince won one and not two Group One races, the plaintiff did not get what he paid for: ^{[note: xxii]}

Q And you would accept that he paid $112,500 for Pint Sized Prince, a horse which he understood had a sire which won two Group 1 races, correct?

A Uh, yeah, he---yes.

Q And in fact he did not get a horse that has a sire that won two Group 1 races, what he got was a horse that has a sire that won one Group 1 races as well as with the other racing records.

A Yes.

Q So you would accept that from that, Dr. Johnson in a sense to put it very simply, didn’t get what he paid for.

A Uh, on---on that basis, no.

Q “No” as in you accept my statement?

A I accept that, yeah.

Q Yah.

50 The defendant’s expert, Mr Grant Allan Burns, was a New Zealander who ran Premium Bloodstock Pty Ltd in Australia. In his affidavit of evidence-in-chief, ^{[note: xxiii]} Mr Burns said that “Bloodstock refers to horses for racing.” Mr Burns’ resume disclosed that he started the said bloodstock company in Western Australia, in fact called Premium Bloodstock Services Pty Ltd, after he left Magic Millions Sales Pty Ltd. He was located in several different states in Australia between late 1999 and April 2008 when he was in the employment of the latter. He had moved to Australia in 1999 “after a lifetime of family involvement in horses and racing in New Zealand”.

51 Mr Burns’ affidavit exhibited a letter dated 6th February 2014 from Quahe Woo & Palmer LLC conveying the defendant’s instructions. Among other things, this letter stated the following:

Paragraph 16c: A statement setting out the issues which you have been asked to consider. This may be dealt with by attaching a copy of this letter;…

Paragraph 18: It is our duty to highlight that under our Rules of Court your expert report and expert testimony are given to assist the Court on matters within your expertise and that duty overrides any obligations to either the Plaintiff or the Defendant. (emphasis in the original)

Paragraph 20: In your opinion, what are the factors that could affect the value and/or quality of a horse? In particular, would the fact that PSP’s sire having won only one ‘group one’ race instead of two have any impact on the value and/or quality of PSP?

[ NOTE: The evidence required here is to support the contentions at paragraphs 9 and 10 above. ] (emphasis in the original)

Paragraph 21 From your knowledge of the system of horse-racing:

a Please explain the volatility of the value of a horse in relation to statistics such as; how many races it partakes in and how many of them it wins.

[ NOTE: The evidence required here is to support the contentions at paragraphs 13 and 14 above. ]

(emphasis in the original)

52 Mr Burns’ opinion may be summarised as follows:

1 As PSP was purchased (by Steven Burridge) at a breeze-up sale, which (performance) would have depended on PSP’s performance (at the breeze-up), the issue of whether Outback Prince had one and not two Group One wins “would have no bearing” on its value.

2 A horse’s true racing ability may not show in a breeze-up sale because it is run over 200m when actual races are of a longer distance. Once a horse starts to race, its value can become extremely volatile depending on whether it wins or loses a race as perceptions of its potential depend on how it performs at any race.

3 A gelding such as PSP has no post-racing stud value as it cannot breed. As its value is only that of a racehorse, “[its] value can and will change every time he races.”

4 Prize monies won by PSP would not have a bearing on its value which is “purely and simply based on his potential going forward.”

5 PSP’s purchase “has been a good deal for sure” for the plaintiff because it won its first race start on 5th June 2011 and “subsequently finished in the top 4th placing’s in half of his lifetime race starts (14 times in the first four placing’s from 28 starts to 24th January 2014)…$158,000 in prize money…”

53 In cross-examination, amongst other things, Mr Burns was subjected to accusations of a failure to stay independent of the defendant so that the court could not now safely rely on his opinion as being objective with reference to the issues before the court. It was said that he did not pay heed to O40A of the Rules of Court, which he saw for the first time in court, and did not state that he had been a colleague of the defendant. Moreover, the defendant’s lawyers’ letter at [51] above clearly conveyed the impression that he was to opine in favour of the defendant.

54 In Panatron Pte Ltd v Lee Cheow Lee [2001] 2 SLR(R) 435, the Court of Appeal explained the ingredients in respect of a fraudulent representation at [14] as follows:

14 The essentials of this tort have been set out by Lord Maugham in Bradford Building Society v Borders [1941] 2 All ER 205. Basically there are the following essential elements. First, there must be a representation of fact made by words or conduct. Second, the representation must be made with the intention that it should be acted upon by the plaintiff, or by a class of persons which includes the plaintiff. Third, it must be proved that the plaintiff had acted upon the false statement. Fourth, it must be proved that the plaintiff suffered damage by so doing. Fifth, the representation must be made with knowledge that it is false; it must be wilfully false, or at least made in the absence of any genuine belief that it is true.

55 Leaving out the last ingredient concerning fraud in the extract from Panatron , and for the purpose of the case before me, a representation actionable at law, has to (a) be one of fact (eg, as opposed to an opinion), (b) be intended to induce the plaintiff to act, and must have the consequences that (c) the plaintiff was induced to act on the representation and (d) the plaintiff suffered damage.

56 The defendant’s statement was that Outback Prince had two Group One wins which included one at 2000m. As the defendant admitted, Outback Prince did not in fact have a win over 2000m in a Group One race (or at all). The statement was a matter of Derby record. It pertained to a fact. It was wrong in fact.

57 The defendant made the erroneous statement in the context of an enquiry by the plaintiff who was expressly a prospective buyer of a race horse. The enquiry was addressed to the defendant at his email address with the stables.

58 In his email at [11] above, the defendant stated that he had reviewed their conversations and suggested two horses to the plaintiff, including PSP, which he said would suit his desires and needs. He said that with PSP, it would not be long before the plaintiff saw returns on his investment. These points, in the situational context of the email, were a window into his mind and evinced a clear intention to induce the plaintiff to buy PSP.

59 When the plaintiff replied in his email of 13th April 2011 that he would take his time to “get the education [he] need(ed] to get comfortable”, the defendant’s email response of the same date inter alia stated “…don’t rush in but just use our advice as a strong guide…”. ^{[note: xxiv]} The phrase “a strong guide” served to reinforce the view that the defendant intended his 11th April 2011 email, which included the misrepresentation, to be relied on by the plaintiff in making his decision on whether to invest in PSP.

60 In Alwie Handoyo v Tjong Very Sumito [2013] 4 SLR 44, the Court of Appeal said this at [186] to [188]:

186 We do not accept that Mr Ang's submission reflects or ought to reflect the law in Singapore. The first problem with his submission of the "but for" test is that inquiring what the representee would or would not have done in the absence of the representation misses the point entirely. The issue is not whether the representee was induced by other factors; that is immaterial. As Lord Millett cautioned in BP Exploration Operating Co Ltd v Chevron Shipping Co [2003] 1 AC 197 (" BP Exploration ") at [104], a representee can usually say why he acted as he did, but any answer he could give on what he would have done if the representation had not been made is inevitably more speculative. Therefore, the correct focus should not be on what would have happened without the misrepresentation but on whether the misrepresentation influenced the representee's decision to enter into the contract.

187 Indeed, the law in Singapore has been quite settled on this front. In JEB Fasteners Ltd v Marks Bloom & Co (a firm) [1983] 1 All ER 583 (" JEB Fasteners "), the English Court of Appeal held (at 589):

[A]s long as a misrepresentation plays a real and substantial part , though not by itself a decisive part, in inducing a plaintiff to act, it is a cause of his loss and he relies on it , no matter how strong or how many are the other matters which play their part in inducing him to act . [emphasis added in italics and bold italics]

188 The above passage in JEB Fasteners has been cited with approval by numerous courts in Singapore, including this court in Panatron Pte Ltd v Lee Cheow Lee [2001] 2 SLR(R) 435 at [23], and more recently, by Andrew Ang J in Raiffeisen Zentralbank Osterreich AG v Archer Daniels Midland Co [2007] 1 SLR(R) 196 at [55]-[56]. Simply put, the representation must have a real and substantial effect on the representee's mind such that it can be said to be an inducing cause which led him to act as he did; it need not be the inducing cause: BP Exploration at [105]; Edgington v Fitzmaurice [1885] UKLawRpCh 83; (1885) 29 Ch D 459 (" Edgington ").

61 At [23] of the Panatron case, the Court of Appeal very crisply the following:

23 Reverting to the case at hand, as found by the judge, the misrepresentations had been made by Phua, and Lee and Yin respectively had been induced by the misrepresentations to invest in Panatron. The misrepresentations need not be the sole inducement to them, so long as they had played a real and substantial part and operated in their minds, no matter how strong or how many were the other matters which played their part in inducing them to act and invest in Panatron. If inducements in this sense are proved and the other essential elements of the tort are also made out, as is the case here, then liability will follow.

62 The misrepresentation was, in its context, serious. It was not disputed that the plaintiff was looking to inform his decision based on the pedigree of his purchase. While pedigree included a number of factors, the racing record of the sire is one of its number. The fact that the defendant himself preferred a horse’s form as a more reliable basis on which to choose a race horse, it was not disputed that pedigree would be a factor for an unraced horse such as PSP at the time. Importantly, it was the plaintiff’s case that he relied on pedigree. Even though he may arguably have been persuaded by the defendant’s references to the form of a horse, the misrepresentation showed that the defendant was, perhaps euphemistically speaking, indulging the plaintiff’s reliance on the pedigree of PSP.

63 The fact that the plaintiff had a number of other considerations playing on his mind and used about a month to let all the other considerations (set out at [19] and [33]) pan out, the pertinent question for this issue was whether the misrepresentation played a real and substantial part in the plaintiff’s decision to purchase 75% of PSP. I was persuaded that the misrepresentation was operative and indeed had a real and substantial role in the plaintiff’s decision.

64 At the trial before me, the plaintiff relied on Julie Bridge’s information (see [16] above) on her husband’s valuation of PSP for the purpose of his relinquishing his 25% share. The reported and deduced valuation of $40,000 for PSP was as of 2nd May 2012. This was the legally wrong date in that a plaintiff’s damages should, in law, be pegged to the date of the breach which was 16th May 2011, the date which I accepted as the date of the plaintiff’s purchase.

65 The supposed damages just referred to was, of course, the plaintiff’s pleaded case. If the trial before me had been to determine quantum, the plaintiff would prima facie have failed to prove his damages by reference to 16th May 2011. However, the trial before me was bifurcated. This meant that I did not have to determine what the plaintiff’s actual damages were or, for that matter, the plaintiff did not have to adduce evidence of that before me. I only needed to be satisfied that the plaintiff did suffer damages in the trial before me, leaving for another day the actual quantum of damages in respect of which parties would have to marshal their cases.

66 I took note that the plaintiff accepted in cross-examination (referred to at [38] above) that PSP was a horse of quality notwithstanding the error about its sire’s 2000m Group One win. That troubled me somewhat in that it was arguably a concession that he did not suffer damages even though there was a misrepresentation. However, seeing as how the trial was bifurcated, it had to be weighed against the defendant’s admission that the plaintiff got less than what he paid for. See [49] above.

67 Framed within the questions asked, the plaintiff’s admission that PSP was a horse of good quality could not be understood to mean that he did not suffer damages. On the other hand, the defendant’s admission clearly conceded that his error about a 2000m Group One win by Outback Prince took something from the plaintiff when he purchased a share of PSP.

68 For the sake of completeness, I should refer to a little debate about whether the plaintiff had told the defendant that he wanted a racehorse from a sire with multiple Group One wins or merely multiple wins . The latter was stated in the plaintiff’s affidavit of evidence-in-chief. On the other hand, both counsel appeared to have understood the plaintiff to have asserted the former in testimony. If it matters, I should say that I am inclined to believe that the plaintiff did tell the defendant that he wished to have a horse sired by one with multiple Group One wins. This find would explain why the defendant referred to two Group One wins, as opposed to Outback Prince’s multiple wins, thus falling into error. (See the plaintiff’s counsel’s fifth question at [48] and PSP’s pedigree sheet.) ^{[note: xxv]}

69 The question of whether the defendant owed a duty of care to the plaintiff must be answered by reference to the well-known locus classicus in Singapore.

70 In Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100 at [73] to [85], the Court of Appeal said:

The applicable test in Singapore

73 In our view, a coherent and workable test can be fashioned out of the basic two-stage test premised on proximity and policy considerations, if its application is preceded by a preliminary requirement of factual foreseeability. We would add that this test is to be applied incrementally , in the sense that when applying the test in each stage, it would be desirable to refer to decided cases in analogous situations to see how the courts have reached their conclusions in terms of proximity and/or policy. As is obvious, the existence of analogous precedents, which determines the current limits of liability, would make it easier for the later court to determine whether or not to extend its limits. However, the absence of a factual precedent, which implies the presence of a novel situation, should not preclude the court from extending liability where it is just and fair to do so, taking into account the relevant policy consideration against indeterminate liability against a tortfeasor. We would admit at this juncture that this is basically a restatement of the two-stage test in Anns , tempered by the preliminary requirement of factual foreseeability. Indeed, we should point out that this is the test applied in substance by many jurisdictions in the Commonwealth: see, for example, the Canadian case of Cooper v Hobart (2001) 206 DLR (4th) 193; the New Zealand case of Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd [2004] NZCA 97; [2005] 1 NZLR 324; and the general summary provided in Phang, Saw & Chan ([26] supra ) at 9-28.

74 We now set out in detail the various elements in the approach outlined above. We will also illustrate how this approach is to be applied practically when we apply it to the facts of the present case.

Factual foreseeability

75 As we mentioned earlier (see [34] above), there is some controversy in relation to the interpretation of the first stage of Lord Wilberforce's test in Anns , ie , whether it refers to mere factual foreseeability or legal foreseeability or proximity. In our view, factual foreseeability is too wide a criterion to be effective as a legal control mechanism if all that it means is that the defendant ought to have known that the claimant would suffer damage from his (the defendant's) carelessness. If this is the approach to be adopted, it would be fulfilled in almost all cases, because the two parties are likely to be in some degree of physical relationship in the relevant case. As Phang J said in Sunny Metal ([49] supra ) at [55]:

... The first part of the 'three-part test' (relating to 'foreseeability') is, in effect, a reference to the factual conception of reasonable foreseeability or proximity. It is, in other words, what I have earlier termed ... as 'reasonable foreseeability'. Although this consideration has been incorporated as an element within the 'three-part test' itself, its incorporation is, with respect, unnecessary . As I have already pointed out above ... the requirement of reasonable foreseeability from a factual perspective will almost always be satisfied, simply because of its very nature and the very wide nature of the 'net' it necessarily casts. There is therefore no practical need to include such a factual element within a legal formulation such as exists with regard to the existence (or otherwise) of a duty of care . ... This is not to state that this last-mentioned ( factual ) element is to be discarded. As I have already mentioned, it will almost always be satisfied. ... [emphasis in original]

76 However, that is not to say that it is not a necessary element in any claim in negligence, just that it is a threshold question which the court must be satisfied is fulfilled, failing which the claim does not even take off. Indeed, as the Privy Council said in Yuen Kun Yeu ([37] supra ) at 191-192:

Further, the expression of the first stage of the test [in Anns ] carries with it a risk of misinterpretation. As Gibbs C.J. pointed out in Council of the Shire of Sutherland v Heyman , [1985] HCA 41; 59 A.L.J.R. 564, 570, there are two possible views of what Lord Wilberforce meant. The first view, favoured in a number of cases mentioned by Gibbs C.J., is that he meant to test the sufficiency of proximity simply by the reasonable contemplation of likely harm. The second view, favoured by Gibbs C.J. himself, is that Lord Wilberforce meant the expression "proximity or neighbourhood" to be a composite one, importing the whole concept of necessary relationship between plaintiff and defendant described by Lord Atkin in Donoghue v. Stevenson [1932] A.C. 562, 580. In their Lordships' opinion the second view is the correct one. As Lord Wilberforce himself observed in McLoughlin v. O'Brian [1982] UKHL 3; [1983] 1 A.C. 410, 420, it is clear that foreseeability does not of itself, and automatically, lead to a duty of care. There are many other statements to the same effect. The truth is that the trilogy of cases referred to by Lord Wilberforce in Anns v. Merton London Borough Council [1977] UKHL 4; [1978] A.C. 728, 751, each demonstrate particular sets of circumstances, differing in character, which were adjudged to have the effect of bringing into being a relationship apt to give rise to a duty of care. Foreseeability of harm is a necessary ingredient of such a relationship, but it is not the only one. Otherwise there would be liability in negligence on the part of one who sees another about to walk over a cliff with his head in the air, and forbears to shout a warning.

Proximity

77 The first stage of the test to be applied to determine the existence of a duty of care is that of proximity, ie , that there must be sufficient legal proximity between the claimant and defendant for a duty of care to arise. The focus here is necessarily on the closeness of the relationship between the parties themselves, as alluded to by Bingham LJ in the Court of Appeal stage of Caparo Industries Plc v Dickman [1989] QB 653, where he said (at 679) that while "[t]he content of the requirement of proximity, whatever language is used, is not ... capable of precise definition" and "[t]he approach will vary according to the particular facts of the case, ... the focus of the inquiry is on the closeness and directness of the relationship between the parties " [emphasis added]. Indeed, in Hedley Bryne ([44] supra ) itself, the House of Lords used language which pointed to the relationship between the parties as being determinative of duty.

78 Although Lord Keith in Yuen Kun Yeu referred (at 194) to the concept of "close and direct relations", he did not clarify what the concept means. However, in the Australian High Court decision of Sutherland ([36] supra ), Deane J has observed thus (at 55-56):

The requirement of proximity is directed to the relationship between the parties in so far as it is relevant to the allegedly negligent act or omission of the defendant and the loss or injury sustained by the plaintiff. It involves the notion of nearness or closeness and embraces physical proximity (in the sense of space and time) between the person or property of the plaintiff and the person or property of the defendant, circumstantial proximity such as an overriding relationship of employer and employee or of a professional man and his client and what may ( perhaps loosely ) be referred to as causal proximity in the sense of the closeness or directness of the causal connection or relationship between the particular act or course of conduct and the loss or injury sustained. It may reflect an assumption by one party of a responsibility to take care to avoid or prevent injury, loss or damage to the person or property of another or reliance by one party upon such care being taken by the other in circumstances where the other party knew or ought to have known of that reliance. Both the identity and the relative importance of the factors which are determinative of an issue of proximity are likely to vary in different categories of case. That does not mean that there is scope for decision by reference to idiosyncratic notions of justice or morality or that it is a proper approach to treat the requirement of proximity as a question of fact to be resolved merely by reference to the relationship between the plaintiff and the defendant in the particular circumstances . The requirement of a relationship of proximity serves as a touchstone and control of the categories of case in which the common law will adjudge that a duty of care is owed . Given the general circumstances of a case in a new or developing area of the law of negligence, the question what (if any) combination or combinations of factors will satisfy the requirement of proximity is a question of law to be resolved by the processes of legal reasoning, induction and deduction. On the other hand, the identification of the content of that requirement in such an area should not be either ostensibly or actually divorced from notions of what is "fair and reasonable" ... or from the considerations of public policy which underlie and enlighten the existence and content of the requirement . [emphasis added]

79 We respectfully agree with this analysis which merely unpacks "proximity or neighbourhood" as a composite idea, importing the whole concept of the necessary relationship between the claimant and the defendant described by Lord Atkin in Donoghue v Stevenson (at 580). However, in this regard, we also acknowledge that there are numerous judicial pronouncements on the difficulty (and indeed, redundancy) in defining "proximity". Some of these examples have already been cited above and it suffices only to reproduce Lord Oliver of Aylmerton's speech in Alcock v Chief Constable of South Yorkshire Police [1991] UKHL 5; [1992] 1 AC 310, where he said (at 411):

[I]n the end, it has to be accepted that the concept of "proximity" is an artificial one which depends more upon the court's perception of what is the reasonable area for the imposition of liability than upon any logical process of analogical deduction.

80 Notwithstanding these judicial views, we agree with Phang, Saw & Chan ([26] supra at 42) that these observations are "puzzling, to say the least". If indeed the "proximity" concept is merely a label or an artificial exercise in judicial creativity, then one must ask why the concept is still resorted to or utilised in the various tests. Its very presence suggests that it has some substantive content that is capable of being expressed in terms of legal principles. Rather than denouncing it as a mere "label", the courts should strive to infuse some meaning into it, if only so that lawyers who advise litigants and even law teachers can make some sense of the judicial formulations.

81 In our view, Deane J's analysis in Sutherland , that proximity includes physical, circumstantial as well as causal proximity, does provide substance to the concept since it includes the twin criteria of voluntary assumption of responsibility and reliance, where the facts support them, as essential factors in meeting the test of proximity. Where A voluntarily assumes responsibility for his acts or omissions towards B, and B relies on it, it is only fair and just that the law should hold A liable for negligence in causing economic loss or physical damage to B: see Phang, Saw & Chan at 47, where the authors wrote:

[B]oth perspectives are, at bottom, two different (yet inextricably connected) sides of the same coin and ought therefore to be viewed in an integrated and holistic fashion . [emphasis in original]

82 We only need to add, further, that in determining proximity as expounded by Deane J in Sutherland , the court should apply these concepts first by analogising the facts of the case for decision with those of decided cases, if such exist, but should not be constrained from limiting liability in a deserving case only because it involves a novel fact situation.

Policy considerations

83 Assuming a positive answer to the preliminary question of factual foreseeability and the first stage of the legal proximity test, a prima facie duty of care arises. Policy considerations should then be applied to the factual matrix to determine whether or not to negate this duty. Among the relevant policy considerations would be, for example, the presence of a contractual matrix which has clearly defined the rights and liabilities of the parties and the relative bargaining positions of the parties.

84 We also recognise that the obvious objection to utilising policy as the overarching determinant of liability is its potential to result in arbitrary decisions. Although it is generally recognised that public policy is an unruly horse ( per Burrough J in Richardson v Mellish [1824] EngR 715; (1824) 2 Bing 229 at 252; [1824] EngR 715; 130 ER 294 at 303), it cannot be completely ignored. The danger is not with judges deciding cases based on policy considerations but rather with judges deciding cases based solely on them. We agree with Prof Tan ([29] supra at 228) that "[t]he truth lies somewhere in between pure principle-based decisions and policy-based decisions" and that "[i]t is obviously impossible to decide cases in vacuo , exclusive of the interests and the context of the community for which the decisions are made". In our view, it is inescapable that some measure of public policy must be considered but it must not be the sole determinant.

85 We would also caution that when applying policy considerations to negate the imposition of a duty of care, the courts must be careful to differentiate such considerations from the requirement of proximity in the first stage of the test we have articulated. The courts must, as far as possible, avoid giving the impression that there remain "unexpressed motives" behind their finding for or against a duty. The courts must also not have litigants believe, as J A Smillie put it in "The Foundation of the Duty of Care in Negligence" [1989] MonashULawRw 18; (1989) 15 Monash U L Rev 302 at 302, that "none of [the tests articulated by the courts] is truly explanatory of judges' reasoning or provides a helpful framework for analysis of the duty question". If there is truly a pertinent and relevant policy consideration involving value judgments which reflect differential weighing and balancing of competing moral claims and broad social welfare goals, we feel that it would be better if the courts were to articulate these concerns under the requirement of policy considerations, rather than subsume these concerns within the proximity requirement, which may then lead to an overall distortion of the legal test to determine the existence of a duty of care. In this respect, we agree with Nicholas J Mullany when he notes in "Proximity, Policy and Procrastination" (1992) 9 Aust Bar Rev 80 at 83 that:

Judges should openly express the true premises of their decisions and, if recovery is considered to be undeserved, in the light of greater moral, social, economic, administrative or philosophical public perceptions, then these reasons and not others inherently uncertain in nature, should be expressed as the true foundation for denial of recovery.

71 As the Spandeck case itself held, factual foreseeability will usually be found to exist. The case before me was no exception. As a question of pure fact, the case involved the plaintiff asking the defendant about the steps to take with a view to buying a racehorse from the stables. The defendant answered with his recommendations. The defendant must have foreseen that if he were to be wrong in his recommendations, the plaintiff would suffer loss. Factual foreseeability as a preliminary consideration was clearly, and unexceptionally, satisfied.

72 I move on to consider whether the parties had legal proximity from the perspective of its spatial, circumstantial and causal aspects.

73 They were spatially close in terms of not only the emails that parties passed between them but also because they had the several meetings apropos the purchase of PSP.

74 Circumstantially, the plaintiff was a potential racehorse buyer looking to make his first purchase. He looked to the defendant as a bloodstock agent connected to the stables, although the defendant did not explain his connection with the stables save that the owner of the stables was his father. The defendant was hoping to persuade the plaintiff to make a purchase of a racehorse from the stables. As a bloodstock professional, he was clearly perceived to have the knowledge and experience to impart any recommendations that he did. The defendant was associated with the stables from which the plaintiff would make the purchase. Hence, circumstantial proximity was satisfied.

75 As I have found above, the defendant made the representation that had a real and substantial part to play in bringing about the plaintiff’s purchase of PSP.

76 I did not think that there were any policy considerations that pointed to excluding liability of the defendant. Starting with Hedley Byrne , the law is replete with instances of negligent misstatements resulting in economic losses to plaintiffs. While the bargaining position of the parties was in balance, the defendant’s influence over the plaintiff was apparent in that the former was in the bloodstock trade whereas the plaintiff was a first-time buyer of a racehorse. There was no contract between the parties which excluded liability.

77 Hence, the defendant owed a duty of care to the plaintiff in making his representation.

78 By his own admission set out at [48] above, the defendant made the misrepresentation because he relied on his memory, or rather impressions in his memory, of an event that took place some years before. He clearly should not have done that because he had, and should have had, the benefit of PSP’s pedigree sheet. The defendant’s misrepresentation was made in circumstances that fell below the conduct one would reasonably have expected of a bloodstock agent.

79 Hence I found the defendant had been negligent in making his misrepresentation.

80 In RBC Properties Pte Ltd v Defu Furniture Pte Ltd [2014] SGCA 62 at [65-66]:

65 In this regard, it is of the first importance to note that the tort of negligent misrepresentation (which was first established in the landmark House of Lords decision of Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] UKHL 4; [1964] AC 465 (" Hedley Byrne ")) had yet to be established at the time the Law Reform Committee issued its report in 1962 ( Hedley Byrne was decided in 1963). Whilst it is true that the decision in Hedley Byrne had been handed down by the House of Lords by the time the Misrepresentation Act was enacted in 1967, it is likely that the tort of negligent misrepresentation was still in an embryonic stage, thus prompting the promulgation of the Misrepresentation Act and, in particular, s 2(1) thereof. Be that as it may, it is clear, in our view, that a claim brought under s 2(1) is (consistent with the analysis in the preceding paragraph) and, indeed, must have been, ex hypothesi , a different legal creature from an action in fraud or deceit

66 What, then, is its true nature? Section 2(1) of the Misrepresentation Act is, in the first place, undoubtedly statutory in nature. It now co-exists with the tort of negligent misrepresentation at common law as first established in Hedley Byrne and was clearly enacted to perform the same function - to furnish a remedy in damages where none had hitherto (apart from fraud or deceit) existed. However, it is also simultaneously different from the tort of negligent misrepresentation at common law. The burden of proof under the common law, in respect of a claim based on the tort of negligent misrepresentation, is on the plaintiff/representee. However, under s 2(1), as already noted above at [63], the burden is on the defendant/representor to prove "that he had reasonable ground to believe and did believe up to the time the contract was made that the facts represented were true". In this regard, the following perceptive observations by Prof Cartwright may be usefully noted (see Cartwright ([60] supra ) at para 6-64):

... Broadly, the remedy under section 2(1) of the Misrepresentation Act 1967 is more restricted in its application, since it is only available to one contracting party against the other contracting party, whereas the tort of negligence applies to all cases where a claimant can establish a duty of care, including actions between contracting parties. But in those case where section 2(1) applies it is more attractive for the claimant since the elements of his claim are easier to establish than the elements of the tort of negligence; the burden of proving (in substance) absence of negligence lies on the defendant (rather than, as in the tort of negligence, the burden of proving breach of duty lying on the claimant) ; and in certain circumstances the remedy of damages under the section might be more extensive than the remedy in negligence. It is therefore clear that, where the claimant has a cause of action under section 2(1), it is unlikely to be of any benefit to him to pursue any action he may have in the tort of negligence. But the tort will be used where the Act is not available; in particular, where the claimant and the defendant are not parties to a contract. [emphasis added]

67 As already noted above at [64], the equitable remedy of rescission is always available for every type of misrepresentation (subject to any applicable bars to rescission). Section 2(2) of the Misrepresentation Act now furnishes the representee with the additional option of claiming damages in lieu of rescission . Whether or not this particular provision applies notwithstanding the fact that one or more of the bars to rescission operates raises rather thorny legal issues (see generally Koh at paras 11.240-11.242) which (fortunately) do not have to be resolved in this judgment as only s 2(1) is in issue. Let us turn now to elaborate on the test of reasonable belief.

81 I had found that s2(1) of the Misrepresentation Act applied so that the defendant had the burden of proof that he had not been negligent. On further consideration, and checking the record, I am not satisfied as to the basis on which the plaintiff maintains that there was a contract between the parties. S2(1) would not apply since the plaintiff and the defendant were not contracting parties. In any case, noting that the plaintiff’s pleaded position was, I should say curiously because of [66] of the RBC case, that he relied on s2(1) only if the court found that the misrepresentation was neither fraudulent nor negligent, which was not the case owing to my finding the misrepresentation to be negligent, my holding on this point was not necessary for my decision. I will leave it to parties to address the appellate court on this point should they see the need to do so.

82 I was not satisfied as to the impartiality of Mr Burns’ opinion. This view did not arise so much from anything that Mr Burns said or opined as in the fact that the defendant’s lawyers’ letter contained clear statements that Mr Burns’ opinion should support the defendant’s stand even as it also highlighted that Mr Burns had a paramount duty to the court to be independent. See [51] above. Given the former statements, it was impossible for me to say with any confidence that Mr Burns was being objectively independent in any of the opinions that he spoke to.

83 In any case, I did not think that Mr Burns evidence was relevant to the issues before me, which I have set out at [52] above. His point 1 that whether Outback Prince had one or two Group One wins did not matter since PSP itself was bought at the breeze-up sale was unconnected to, indeed disconnected with, the issue whether the defendant’s statement to the plaintiff at a later point was in error. His references in points 2 and 3 to how the value of PSP as a racehorse depended on and varied with each race performance, especially since it had no value as a stud, were unhelpful by themselves. Likewise, the opinion in point 4 that prize monies were not relevant to a racehorse’s potential did not assist me. Point 5 - that the plaintiff had made a good deal by reference to PSP’s prize monies - was not relevant and possibly contradicted point 4.

84 For the reasons I have set out above, I made the decision in favour of the plaintiff.

Context

^{[note: ]} Order of Court 10 ^th February 2014

^{[note: i]} AB49

^{[note: ii]} AB50-51

^{[note: iii]} BP tab 1 para 5

^{[note: iv]} BP tab 1 para 12

^{[note: v]} BP tab 2 para 13

^{[note: vi]} AB52

^{[note: vii]} AB57

^{[note: viii]} BP tab 3 paras 6-7

^{[note: ix]} NE 23 ^rd December 2014

^{[note: x]} BA tab 1

^{[note: xi]} AB52, the top email

^{[note: xii]} NE 4 ^th August 2014 p38 ln19 – p39 ln7

^{[note: xiii]} DB4

^{[note: xiv]} NE 4 ^th August 2014 p49 ln21-p51 ln10

^{[note: xv]} BA tab 2

^{[note: xvi]} AB71-72

^{[note: xvii]} AB67-68

^{[note: xviii]} NE4th August 2014 p162 ln5-13

^{[note: xix]} NE 4 ^th August 2014 p169 ln26 – p171 ln6

^{[note: xx]} NE 4 ^th August 2014 p180 ln180 – p181 ln6

^{[note: xxi]} NE 5 ^th August 2014 p2 ln22 – p4 ln21

^{[note: xxii]} NE 5 ^th August 2014 p56 ln24 – p57 ln5

^{[note: xxiii]} BA tab 3

^{[note: xxiv]} AB52-53

^{[note: xxv]} DB4

Context