Never under-estimate the ingenuity of a director convicted of fraud. In Goldring, Timothy Nicholas v Public Prosecutor, two shareholder-directors of a Singapore-incorporated company appealed against their convictions for the offence of cheating. Through their company, they had marketed a sham investment to the public, using a brochure which represented that monies invested would be used exclusively to finance the purchase of fuel additives and lubricants and that all those additives and lubricants had been pre-sold to major corporations. Both representations were false and the shareholder-directors knew as much, but they contended that none of the investors were induced by the representations because non-reliance clauses in the terms and conditions of the investment declared that each investor agreed, when entering into the investment, that no representations had been relied upon.An ingenious argument – but not a successful one: Singapore's High Court held that the non-reliance clauses were, in effect, exclusion clauses and therefore should be read strictly against those seeking to rely upon them. Each party to the investment agreement was entitled to assume the honesty and good faith of the other. Since honesty was assumed, the investors could not have contemplated, at the time they entered into the investment, that the seller could exclude liability for its own fraud. As a matter of construction, therefore, the non-reliance clauses did not exclude liability for fraud and did not negate the inducement required to establish the offence of cheating.This robust approach has also been employed recently by Malaysia's highest courts. In Mayban Trustees v CIMB Bank, clauses in a subscription and facility agreement excluded the liability of a sukuk issuer in the event that the facility agent or trustee were guilty of gross negligence. The exclusions did not, however, contemplate the issuer itself being guilty of fraud. As it happened, the facility agent and trustee were grossly negligent and the issuer was fraudulent, so the question arose as to whether the exclusion, which had otherwise been triggered, could be relied upon by the issuer. The Court of Appeal (with whom the Federal Court later agreed) held that since each party to the subscription and facility agreement was entitled to assume the honesty and good faith of the other, neither the facility agent nor trustee could have contemplated, at the time they entered into the agreement, that the exclusions would operate where the issuer itself was guilty of fraud. If that had been the intention \"...it should have been expressed in clear and unmistakeable terms on the face of the [subscription and facility] agreement\". As a result, the exclusion clauses did not operate and the issuer remained liable.CommentThe interesting aspect of these two decisions is the willingness of the courts in Singapore and Malaysia to look at the substance of a clause and ask whether it operates as an exclusion, even if it is not drafted as one. Where, for example, a non-reliance or conclusive evidence clause would have the practical effect of excluding liability for fraud (if allowed to operate), it will need to be drafted exceptionally clearly to achieve its objective.