The reflective loss principle is a fraught common law doctrine of recent origin. Where a company suffers loss from a wrongful act, the shareholders may suffer “reflective” loss where the value of their shares or dividends suffers a corresponding diminution in value.1 Quite separately from the question whether the company may recover its loss from the wrongdoer, the reflective loss principle ordinarily bars the shareholder from bringing an otherwise valid personal claim against the same wrongdoer in respect of their reflective loss.

The UK Supreme Court’s landmark Marex judgment2 rewrote the law on reflective loss. In Marex’s wake, many issues remain to be decided. Take just two. Does the reflective loss principle bar a company’s claim against a third party for dishonest assistance in its director’s breach of fiduciary duty? And should it matter that the company had a wholly-owned subsidiary that was involved in, and had suffered loss from, the defendant’s breach of duty? In Miao Weiguo v Tendcare Medical Group Holdings Pte Ltd,3 a five-judge panel of the Singapore Court of Appeal answered both questions in the negative.

The claimant and respondent on appeal, Tendcare, a Singapore holding company for a medical business group (“Tian Jian Group”) in China and Hong Kong, was owned and controlled by the first defendant, Gong, who also served as director. Prior to a planned initial public offering (IPO), the Tian Jian Group initiated a fund-raising effort that involved the seventh defendant and appellant Miao. From Tendcare’s accumulated funds, two major transfers of US$2m and $4m were made to a Tendcare wholly-owned subsidiary (“TJHK”) and other entities in Hong Kong, and further to Miao and entities controlled by him, and later to Gong’s personal accounts. Tendcare went into judicial management4 and commenced proceedings against Gong for, among other claims, breaches of director’s duties against Tendcare, and against Miao for dishonest assistance. The claims were successful at trial, with the High Court holding Gong and Miao jointly and severally liable for the US$6m.5

Miao appealed to the Court of Appeal, challenging the High Court’s findings of dishonest assistance liability for both transfers, arguing that each transfer was made pursuant to a