Fraudulent misrepresentation must include a false statement made with intent to deceive, allowing rescission of the contract and entitlement to damages.

JUDGMENT

Ong Chee Kwan JC:

[1] This judgment deals with a claim based on deceit and or fraudulent misrepresentation leading to the purchase of various beauty products which turned out to be products not manufactured by the brand owners. As a result, the Plaintiff sustained losses and damages.

Background Facts

[2] At all material times, the Plaintiff is a company incorporated under the laws of Hong Kong in the business of providing beauty products for about 45 years. The Defendant is a company incorporated under the laws of Malaysia in the business of wholesale of perfumeries, cosmetics, soap and toiletries.

[3] Since May 2019, the Defendant had through its representative, one Miss Rosa, approached the Plaintiff to offer beauty products for sale. At all material times, the Plaintiff's Managing Director one Miss Elly Tong and its Business Manager, one Miss Donna Tam ('PW2') were liaising with Miss Rosa only.

[4] It is the Plaintiff's case that Miss Rosa had represented to Miss Elly Tong that the beauty products supplied by the Defendant were genuine products sourced from the brand owners and or from authorised sources. In particular, Miss Rosa had forwarded to Miss Elly Tong and PW2 redacted invoices purportedly issued by the brand owners to the Defendant ('the Redacted Invoices') to show that the sources of the Defendant's products was from the brand owners directly.

[5] The Plaintiff contended that in reliance on the Defendant's aforesaid representation, the Plaintiff made 3 separate purchases of beauty products from the Defendant via the following invoices:

[6] Following from the above, the Plaintiff paid a total sum of USD927,349.20 to the Defendant. This is not disputed. The Plaintiff also paid freight charges for the sum of USD3,980.00 for the Defendant's beauty products to be shipped to Hong Kong.

[7] In respect of the 3rd Invoice, the payment terms were:

(a) 30% deposit to be paid upon order confirmation;

(b) 60% of the order to be paid before shipment of the products;

(c) 10% of the order to be paid upon delivery of the goods.

It is also an express term that confirmed orders are not exchangeable or cancellable and all payments are non-refundable once the orders are confirmed.

[8] It is an agreed fact that the Plaintiff had received beauty products pursuant to the 1st Invoice and 2nd Invoice.

[9] However, the Plaintiff contended that after the Plaintiff had sold the beauty products from 1st Invoice and 2nd Invoice to its customers, the Plaintiff's customers had complained and returned and/or rejected the beauty products as defective and non-genuine products of the respective brand owners ('the Complaints').

[10] The Plaintiff raised the Complaints to the Defendant who insisted that their beauty products delivered to the Plaintiff were authentic items from the brand owners and further produced Redacted Invoices purportedly issued by the brand owners to the Defendant and photos of carton boxes allegedly from the brand owners in support.

[11] Subsequently, the Plaintiff sought verifications from the respective brand owners of the beauty products and was informed that the Redacted Invoices were not genuine and that the brand owners did not sell their products to the Defendant at all.

[12] The Plaintiff then instructed the Defendant to withhold shipment for the 3rd Invoice and by a letter dated 30 October 2020, the Plaintiff by its solicitors informed the Defendant of its decision to rescind all the purchases under the 1st, 2nd and 3rd Invoices. The Defendant did not reply to the letter.

[13] The Plaintiff thereafter commenced the present action against the Defendant to claim for,inter alia, a declaration that the 1st Invoice, 2nd Invoice and 3rd Invoice have been rescinded, the return of USD927,349.20, general damages, aggravated damages, exemplary damages, interest and costs.

[14] The Defendant in its Defence claimed that the products supplied to the Plaintiff were genuine products from the respective brands. The Defendant also counterclaimed