Bayerische Landesbank Girozentrale v Teh Li Li

JurisdictionSingapore
JudgeChoo Han Teck JC
Judgment Date02 October 2000
Neutral Citation[2000] SGHC 203
Docket NumberSuit No 957 of 1998
Date02 October 2000
Year2000
Published date19 September 2003
Plaintiff CounselSuresh Nair and Vikhna Raj (Allen & Gledhill)
Citation[2000] SGHC 203
Defendant CounselLai Swee Fung and Nicholas J Narayanan (Toh Tan & Partners)
CourtHigh Court (Singapore)
Subject MatterAgency,Whether contract illegal under Malaysian law,Tort,Bank disposing of or holding over shares at its discretion,Illegality and public policy,Whether defendant liable under contract,Banking facility,Whether negligent in not selling all shares,Evidence of agency,Defendant denying liability on ground that she acts as agent for named principal,Negligence,Contract

: The plaintiff bank granted banking facility by way of a facility letter dated 1 November 1996 to the defendant. The letter was signed by the parties and it stated that an attached set of Standard terms and Conditions applied to the contract. There was a clause in the standard terms stipulating that the choice of law in the event of dispute shall be Singapore law. The defendant claimed that the standard terms were not attached as stipulated.

The facility granted was up to RM$16,000,000.
The defendant also deposited 100,000 shares in Mercury Industries Bhd as security for the facility. Loans were extended from time to time under the said facility on instructions by the defendant to purchase shares. The shares would be deposited as further security and paid for from the facility.

By 25 August 1997 the value of the defendant`s security fell to RM$9,555,520 while her outstanding loan was RM$15,416,000.
The plaintiff demanded payment by letter dated 2 September 1997 to the defendant at her home address. The defendant was informed that if payment was not made by 10 September 1997 the plaintiff would proceed to sell some of the security. No payment was made. Another letter was sent on 26 September 1997 but the defendant did not pay. The plaintiff sold various parcels of the security on various dates, leaving presently about 1,300,00 share unsold and an outstanding debt of about RM$13,169,951.19. The facility was cancelled on 20 February 1998.

The defendant disputed liability.
She raised three defences. First, a defence in law in that the contract was illegal under Malaysian law. Her counsel Mr Lai submitted that the choice of law clause does not apply because the standard terms were not given to the defendant and in any event, the transactions took place in Malaysia. Since no evidence was adduced as to the law in Malaysia which rendered such contracts illegal, this defence failed at the start. Mr Lai for the defendant urged me to consider the Malaysian statute which created the offence he complained of and make the appropriate finding. I am loathe to do so; the plaintiff was not charged, let alone convicted, of any offence relating to the said statute. A finding of fact of the nature that Mr Lai wishes me to make requires a thorough investigation into facts which were not pleaded. In my view, this is not the appropriate place to find whether the plaintiff had committed an offence under Malaysian law.

The second defence was that the defendant contracted as a nominee for one Dato Peh Teck Quee.
The case submitted by Mr Lai bore little resemblance to that pleaded. In the defence, the defendant averred that it was Richard Yong, the plaintiff`s then head of private banking, who `represented to the defendant that she would only be her boss`s (Dato Peh) nominee in accordance with the plaintiff`s internal policies and the inclusion of her name was just a formality`.

The case as pleaded was not one in which the defendant did not know what she signed, or that she signed it as
...

To continue reading

Request your trial
1 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2000, December 2000
    • 1 Diciembre 2000
    ...infra, under “The Objective Approach” and “Intention to Create Legal Relations”); and Bayerische Landesbank Girozentrale v Teh Li Li[2000] 4 SLR 602 (also considered, infra, under “Illegality”)); arbitration (see eg, Tan Chiang Brother”s Marble (S) Pte Ltd v Anderson Land Pte Ltd (Lum Chang......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT