Alexander Ross Crawford v The Henley Group Pte Ltd
Jurisdiction | Singapore |
Judge | Tan Puay Boon |
Judgment Date | 07 January 2016 |
Neutral Citation | [2015] SGDC 358 |
Court | District Court (Singapore) |
Docket Number | District Court Suit No. 3140 of 2014, Registrar’s Appeal No HC/RAS 34 of 2015 |
Year | 2016 |
Published date | 21 January 2016 |
Hearing Date | 20 October 2015,23 September 2015,13 October 2015,02 November 2015 |
Plaintiff Counsel | Mr Edwin Tong SC with Mr Colin Chow and Ms Li Fangyi (M/s Allen & Gledhill LLP) |
Defendant Counsel | Mr Probin Dass with Mr Alec Liong (M/s Shook Lin & Bok LLP) |
Citation | [2015] SGDC 358 |
The Plaintiff is a British citizen currently working and residing in Singapore. He is a lawyer who is now Head Legal Singapore of a large international bank operating here. At the material time, he was Senior Legal Counsel of the same bank. His wife was then a paralegal/trainee at an international law firm operating here.
Sometime in July 2008, the Plaintiff and his wife approached the Defendant for help and advice on how they could invest their savings and future earnings. The Defendant is a Singapore registered company which is a licensed financial adviser under the Financial Advisers Act (Cap 110). At all times, the Plaintiff and his wife dealt with the Defendant through its representative, Ms Daphne Ashford-Smith (DAS). She was then a Business Director of the Defendant, and is now a Partner.
A number of meetings (on 3 July, 17 July, 12 September and 9 and 20 October 2008) took place between the couple and DAS, and the Plaintiff eventually signed the following forms and documents at their meeting on 20 October 2008 –
The couple had, by then, decided on a savings plan recommended to them by the Defendant. It was essentially an investment-linked insurance policy,
The policy was issued to the Plaintiff (under his sole name) on 22 December 2008, with the commencement date of 1 December 2008. Thereafter, the Plaintiff paid monthly premiums of €2,500 to Zurich. Sometime later, after further discussions with DAS, he increased his investment and paid total monthly premiums of €4,000 to Zurich from October 2010.
For all the dealings which took place between the Defendant and the Plaintiff, and all the advice which it provided to him, he did not have to make any payment (whether in the form of fees or otherwise) directly to the Defendant.
The Plaintiff commenced the present suit against the Defendant on 9 October 2014.
The Plaintiff’s case It was the Plaintiff’s case that he and his wife had informed DAS of –
The Plaintiff said that in the meetings with him and his wife, DAS had –
Based on the representations, the Plaintiff believed that DAS and the Defendant had no financial or other interest in its advice or recommendations on financial products, and was providing his wife and him independent and objective advice and recommendations free from conflict of interest.
The ZVP was one of two investment-linked insurance policies recommended to the Plaintiff by DAS, who did not recommend any other investment to him. She also told him that the other insurance policy involved higher fees than the ZVP.
Before the Plaintiff executed the forms and documents given to him by DAS to invest in the ZVP, he asked her if there was anything he should be aware of about the policy, in particular, material features including fees and commissions payable. He also told her that he was looking to her and the Defendant, and not the documents, to explain what he really needed to know about the product.
The Plaintiff said that from what the recommendations by DAS of the ZVP were and what she told him verbally about the ZVP in their 2 meetings in October 2008, the Defendant had represented that the policy fulfilled all his investment objectives and requirements. He had trusted the recommendations and relied on them when deciding to invest in the ZVP.
Even after signing the forms and documents, the Plaintiff had written to DAS on 25 November 2008 to find out what fees DAS and the Defendant were being paid, as he wanted to understand the fee structure in place. He reiterated that he wanted a regular savings plan that he and his wife could afford, but one that left enough liquidity for investments. Her reply was that her salary from the Defendant was independent of the products that its customers invested in, and that the ZVP suited his requirements.
The Plaintiff wrote on 27 November 2008 to again ask DAS if there was a direct correlation between her salary and the savings plan of the Defendant’s customers, as he was concerned that if a financial adviser was paid directly and purely on commission, whether there was sufficient impartiality between the advice and the remuneration and commissions of the financial adviser. She did not provide him the answers he required, but assured him that he was “in good hands”.
After the Plaintiff purchased the ZVP, he first realised from a statement he received from Zurich in November 2010 that a surrender penalty deduction had been included. He wrote to DAS to find out why this was imposed on him, as he was earlier informed that he could not withdraw his funds only for the first 18 months. Later, the Plaintiff further discovered that the Defendant had a financial interest in recommending the ZVP to him, and that there were more suitable investment products that he could have invested in. In fact, the Defendant and other distributors received significant commissions from Zurich which came out of premiums paid by investors, so that investors of the ZVP paid a higher cost for their investments relative to other investment products. The Plaintiff wrote again on 13 September 2013 to clarify if the Defendant had received or would be receiving any commission from Zurich from his purchase of the ZVP, but received no answer to date even after further repeated inquiries from the Plaintiff.
He said that the Defendant had recommended the ZVP to him because it would receive higher profits and/or commission from Zurich compared to what it would have received if other financial products were recommended to him.
The Plaintiff claimed that when the Defendant recommended the ZVP to him, it –
By reason of the above, the Plaintiff claimed damages against the Defendant, which comprised a sum that was the difference between the total amount of premiums he had paid to Zurich (which stood at €167,000.00 at the time the action was commenced) and the surrender value of the ZVP that he would receive when terminating his investment (which stood at €104,626.77 at the time the action was commenced), the loss of investment opportunity or loss of use of the total amount of premiums, and also interest and costs.
The Defendant’s caseThe Defendant said that the first meeting between DAS and the Plaintiff and his wife in July 2008 was to introduce to them the services offered by the Defendant. While the Defendant admitted the various other meetings between DAS and the Plaintiff and his wife having taken place, it required the Plaintiff to prove the matters referred to in [8] and [9] above.
The details of what she discussed with the Plaintiff and his wife were recorded by DAS in a preliminary report, including the fact that the couple already had funds for the purchase and construction of properties, and university fees for children. From their meetings, DAS ultimately ascertained that an investment-linked policy was suitable for the Plaintiff and his wife, and that they were interested to hear about one or two of such products she could recommend.
DAS denied that the Plaintiff had told her that he was looking to the Defendant and her (and not to the documents) to explain what he really wanted to know about the ZVP when he executed the documents to purchase the policy. He had expressly...
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