Clinic chain's founder wins appeal to block checks on bank account

The Court of Appeal criticised LSI for not notifying Dr Goh Seng Heng when it applied to the courts last year to compel his bank to disclose whether the $14 million it paid to buy shares in his company was still in his account.
The Court of Appeal criticised LSI for not notifying Dr Goh Seng Heng when it applied to the courts last year to compel his bank to disclose whether the $14 million it paid to buy shares in his company was still in his account.ST FILE PHOTO

Veteran skincare doctor and PPP Laser Clinic founder Goh Seng Heng has succeeded in stopping a company from checking with his bank to see if the $14 million it paid to buy shares was still in his account.

The Court of Appeal, in allowing Dr Goh's appeal, criticised the firm, Liberty Sky Investments (LSI), for not notifying Dr Goh when it applied to the courts last year to compel the bank to disclose the details sought.

"LSI had commenced the (discovery application) in a manner that plainly went against the spirit of the law," said Judge of Appeal Andrew Phang on Thursday. "LSI was, in essence, trying to steal a march on Dr Goh. In view of such conduct, LSI could not be said to have come to the court with clean hands," he added in judgment grounds for the court, which included Judges of Appeal Judith Prakash and Tay Yong Kwang.

LSI, linked to a Shanghai-based couple who are franchisees for the PPP brand in Suzhou, is involved in a pending High Court suit against Dr Goh to rescind the share sale pact and recover the $14 million.

Dr Goh founded Aesthetic Medical Partners (AMP) in 2008. Through its wholly owned subsidiary Aesthetic Medical Holdings, it operates a chain of clinics under the PPP laser brand.

In 2014, LSI inked a deal in which Dr Goh would sell 32,049 shares in AMP to LSI for $14,422,000. The company wants to back out, alleging that the deal was clinched following fraudulent misrepresentations. Dr Goh is denying the claims.

In May last year, LSI applied to court to uncover documents from the bank to check if the sale price monies remained in Dr Goh's account or were shifted elsewhere.

On the same day, LSI applied for a Mareva injunction to freeze Dr Goh's assets. He was given notice of this, but not of its court move to check his bank account.

LSI succeeded in its case in the High Court last November. Dr Goh appealed to the top court in relation to the bank account. He appealed against the Mareva injunction separately, and it was later lifted.

His legal team, led by Mr Adrian Tan, said LSI had to show "compelling evidence" of misrepresentation to justify tracing the monies.

Senior Counsel Harpreet Singh Nehal, acting for LSI, urged the appeal court to uphold the High Court decision, pointing out that the sale proceeds had been used to buy two properties, among other things. He said about $4 million of the purchase price remained unaccounted for.

The appeal court, in examining the issues, was not convinced and found that LSI had failed to show a prima facie case of misrepresentation.

The court allowed Dr Goh's appeal and reminded lawyers that "while advocates within an adversarial system are constrained to engage in legal combat, they are not entitled to pursue victory at all costs, regardless of the means".

K.C. Vijayan

A version of this article appeared in the print edition of The Straits Times on October 07, 2017, with the headline 'Clinic chain's founder wins appeal to block checks on bank account'. Print Edition | Subscribe