A dead secretary's estate will get to keep the $1.6 million obtained from her firm by fraud, as the top court found the managing director, who is essentially the sole shareholder, was also complicit in the fraud.

The Court of Appeal, in dismissing the appeal of Red Star Marine Consultants to recover the funds, held that managing director Dhanvinder Singh could not benefit from his own illegality.

Mr Singh alleged that his personal secretary Satwant Kaur had misled him into signing cheques for third parties which she encashed or deposited into her personal account.

During a police probe in September 2012, Ms Kaur admitted in statements that she had received various sums from the company with Mr Singh's consent. But she claimed, among other things, that he had agreed to evade income tax.

Ms Kaur, 49, died of cancer in May 2016, four months after she was granted a discharge not amounting to an acquittal by a district judge over several criminal charges involving the misappropriated monies. Red Star Marine failed in its High Court bid in January to sue the estate of Ms Kaur to recover the $1.6 million.

In judgment grounds on Tuesday, the Court of Appeal noted that Mr Singh, who owns 5,099 of the company's 5,100 shares, would effectively be the sole beneficiary if the appeal were allowed.

Judge of Appeal Judith Prakash wrote: "If the appeal were allowed, the court would effectively be assisting Mr Singh (who, for all practical purposes, owns all of the shares in the appellant company) to recover the fruits of his illegal conspiracy with Ms Kaur to defraud the appellant of its monies."

The company was effectively a two-person operation run by Mr Singh and Ms Kaur, noted the court.

"The court, as a matter of public policy, will not involve itself in a dispute between parties where both sides were equally tainted by the same wrong," the judge added on behalf of the court, which also included Judges of Appeal Tay Yong Kwang and Steven Chong.

At issue was the "interesting question as to whether the fraudulent acts and knowledge of a man who is more or less the sole shareholder and director of a company should be attributed to that company, where the company seeks to recover from a third party the proceeds of the fraudulent acts which the sole director and shareholder was party to", said Justice Prakash.

Ms Kaur's estate, represented by lawyers Alfred Lim, Jaime Lye and Daniel Lee, argued that whatever Ms Kaur may have done was with the consent and knowledge of Mr Singh. As he was privy to her conduct, there was no ground for the company to recover the monies, they said.

Red Star Marine's lawyers Mahmood Gaznavi and Luke Netto argued that the company was not tainted by fraud but was the victim of fraud. They added that since Mr Singh and Ms Kaur conspired to wrongfully deprive the company of its money, it should not be precluded from recovering the money.

The court, in the legal and factual context of the case, attributed Mr Singh's knowledge and acts relating to the fraud to the company, which precludes the latter from claiming against the estate of Ms Kaur. It said the outcome was consistent with the policy grounds which undergird the defence of illegality.

"The (company) is wrong to start from the premise that it was not tainted by fraud. It assumes what it needs to show - that Mr Singh's acts should not be attributed to it," said Justice Prakash. "The fact that Ms Kaur (in this case, her estate) would benefit if the appeal were dismissed is merely the result of applying the defence of illegality, which is that the loss must lie where it falls."

The court ordered the company to pay $50,000 in costs to the estate of Ms Kaur and her sister.