SINGAPORE – A company founded by Singaporean watch expert Dominic Khoo that runs a luxury timepiece investment scheme has been found by the High Court to have breached its contractual obligations to five investors from Hong Kong.

Justice Teh Hwee Hwee ordered the company to fulfil its contractual obligations by repurchasing luxury watches for the $2.5 million it had offered the investors. 

The Hong Kong-registered company, named The WatchFund, uses money from investors to buy luxury watches, which are then held by the investors.

Its agreement with the five investors was that the company would repurchase the watches within a year to sell them at a profit to other buyers.

Mr Ben Wong, Dr Edmund Liew, Mr Gary Wong, Mr Wong Nga Kok and finance company MCA had sued The WatchFund and Mr Khoo in 2021 after the company cancelled its offers to repurchase the 15 watches that the investors had paid for.

MCA also sued on behalf of a sixth investor,  Ms Yung Choi Ha, and won nominal damages from The WatchFund.

In a written judgment on April 30, the High Court found The WatchFund to be in breach of contract, but it dismissed the plaintiffs’ claims for misrepresentation.

The plaintiffs had claimed in their suit that Mr Khoo had said the watches were bought at less than 50 per cent of recommended retail prices, but the value of the pieces was in fact lower than the amount they invested.

Justice Teh dismissed the plaintiffs’ arguments that Mr Khoo, who is the sole director and shareholder of the company, should be held personally liable for the breach. 

Mr Khoo, a former professional photographer, had trained with renowned watch auction house Antiquorum. He started the WatchFund investment scheme in 2013.

He is also associated with a Singapore-registered company similarly named The WatchFund, which is not involved in the present case. 

The companies earn investment fees when the agreements are signed, and sale fees when the watches are repurchased.

The investment agreements with the Hong Kong company in the present suit were entered into between 2018 and 2019.

The plaintiffs had paid for a total of 15 timepieces, including a Girard-Perregaux that cost HK$1.56 million ($269,000) and a Hautlence Moebius that cost HK$1.46 million.

Between September 2019 and March 2020, Mr Khoo e-mailed them with repurchase offers.

But disputes arose over whether the investors had to pay a sale fee before the repurchase was processed, and whether the sale fee should be paid to Mr Khoo’s personal bank account instead of the company’s bank account.

The disputes were not resolved, and between October 2019 and February 2020, Mr Khoo e-mailed the investors to cancel the repurchase offers.

The plaintiffs, who were represented by Mr Raymond Lye of Union Law, argued that the purported cancellation of the repurchase offers was invalid.

The company and Mr Khoo, who were represented by Mr Zhulkarnain Abdul Rahim of Dentons Rodyk & Davidson, contended that there was no wrongful cancellation.

Mr Khoo said he had informed the plaintiffs that the repurchase offers were cancelled because they had failed to pay the sale fee and return the watches.

Justice Teh said in her judgment that the company’s purported cancellation of the repurchase offers was invalid and constituted a breach.

She said the plaintiffs were entitled to insist on making payment of the sale fee to a corporate bank account.

Moreover, the defendants failed to cooperate with the plaintiffs in arranging for the return of the watches, she added.

“The defendants are therefore not entitled to rely on either of these reasons to cancel the repurchase offers,” said the judge.

The plaintiffs had also claimed that they had been induced to enter into the investment agreements as a result of misrepresentations.

They alleged that the misrepresentations were made in the scheme’s proposals in 2016 and 2018, the company’s website, various interviews with Mr Khoo by media outlets, and Mr Khoo’s curriculum vitae.

These documents stated that Mr Khoo had connections to buy watches at “unparalleled prices”, and that the watches would be purchased at below 50 per cent of recommended retail prices.

The plaintiffs said they later learnt that the value of the timepieces in their possession was in fact lower than the amount they had paid.

But Justice Teh said the plaintiffs had failed to present evidence to show that the representations were false and that the value of the watches they held was not what it should have been.