Go Dante Yap v Bank Austria Creditanstalt AG

• Jurisdiction: Singapore
• Judgment Date: 08 August 2011
• Date: 08 August 2011
• Docket Number: Civil Appeal No 156 of 2010
• Court: Court of Appeal (Singapore)

Go Dante Yap

Plaintiff

and

Bank Austria Creditanstalt AG

Defendant

[2011] SGCA 39

Chao Hick Tin JA

,

Andrew Phang Boon Leong JA

and

VK Rajah JA

Civil Appeal No 156 of 2010

Court of Appeal

Banking—Advice—Client opening savings and investment accounts with bank—Client having final say over which investments purchased or sold by bank in his name—Monthly meetings between bank and client where performance of investments reviewed—Client suffering losses on some investments—Whether bank liable for breach of contract—Whether bank under duty of care—Whether bank breached duty of care

Tort—Negligence—Duty of care—Client opening savings and investment accounts with bank—Client having final say over which investments purchased or sold by bank in his name—Monthly meetings between bank and client where performance of investments reviewed—Client suffering losses on some investments—Whether bank liable in negligence—Whether bank under duty of care—Whether bank breached duty of care

The appellant businessman opened two accounts with the respondent bank: a savings account with the respondent's Hong Kong branch and an investment account with the respondent's Singapore branch. Both accounts were handled by the same employee of the respondent (‘Ms Ching’) , and both accounts required the appellant to execute three sets of contractual documents (‘the Account-Opening Documents’) , which, inter alia, gave the appellant the final say in deciding what securities to purchase or sell.

Ms Ching entered into 16 investments on behalf of the appellant. Monthly meetings were held between her and the appellant, in order to review the performance of the investments and examine the projected returns therefrom. The investments were eventually disposed of, but the appellant suffered significant losses on three investments as a result of the Asian Financial Crisis.

In the High Court, the appellant sued the respondent in contract and in tort, arguing that the 16 investments had not been authorised by him (‘the Authorisation Claim’) , and that the respondent had owed him, and breached, contractual and tortious duties which obliged it to advise him on his investments, which breach had caused him loss in relation to the three investments (‘the Advisory Claim’) . The High Court dismissed both the Authorisation Claim and the Advisory Claim, and the appellant appealed.

Held, dismissing the appeal:

(1) The appeal in relation to the Authorisation Claim was dismissed in light of the High Court's clear finding of fact (which could not be said to be against the weight of the evidence) that the appellant had not proven that the 16 investments were unauthorised: at [5].

(2) While there was nothing wrong with the concept of an express or implied contractual ‘duty to advise’, it was not correct to speak of a tortious ‘duty to advise’ without more, as a duty of care in the tort of negligence was necessarily a broad duty to take such care as is reasonable in the circumstances: at [18] and [19].

(3) It was necessary to consider whether, in addition to an alleged contractual duty to advise, there was also a contractual duty of skill and care on the part of the respondent in discharging the appellant's instructions: at [20] and [21].

(4) The Account-Opening Documents did not impose an express contractual duty to advise on the respondent, nor could such a duty be implied: at [23].

(5) Under the Account-Opening Documents, the respondent owed the appellant an implied contractual duty of skill and care in carrying out his instructions: at [24] and [25].

(6) Applying the test in Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR (R) 100, the respondent owed the appellant a duty of care in the tort of negligence because there was a sufficient degree of legal proximity between the parties to give rise to a prima facie duty of care, and there were no policy considerations militating against the imposition of a duty of care in tort: at [26]to [29], [34], [35], [38], [39], [41] and [42].

(7) Given the prevailing circumstances, the appellant's commercial experience and the contractual framework, the standard of care imposed on the respondent was not a high one, and it had therefore discharged its duty of care in contract and tort, by virtue of the monthly meetings held between Ms Ching and the appellant: at [47] to [51].

(8) The parties' submissions were unnecessarily prolix, and as a result the respondent was awarded only 90% of the costs of the appeal: at [53].

AC Billings&Sons Ltd v Riden [1958] AC 240 (refd)

Animal Concerns Research & Education Society v Tan Boon Kwee [2011] 2 SLR 146 (refd)

Bank of America National Trust and Savings Association v Herman Iskandar [1998] 1 SLR (R) 848; [1998] 2 SLR 265 (folld)

Bryan v Maloney (1995) 128 ALR 163 (refd)

Crédit Industriel et Commercial v Teo Wai Cheong [2010] 3 SLR 1149 (refd)

Customs and Excise Commissioners v Barclays Bank plc [2007] 1 AC 181 (refd)

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (folld)

Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 (folld)

IFE Fund SA v Goldman Sachs International [2007] 2 Lloyd's Rep 449 (refd)

James Andrew Robinson v PE Jones (Contractors) Ltd [2011] EWCA Civ 9 (refd)

JP Morgan Chase Bank (formerly known as The Chase Manhattan Bank) (a body corporate) v Springwell Navigation Corp (a body corporate) [2008] EWHC 1186 (Comm) (refd)

Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555 (folld)

Lloyd v Citicorp Australia Ltd (1986) 11 NSWLR 286 (refd)

Mühlbauer AG v Manufacturing Integration Technology Ltd [2010] 2 SLR 724 (refd)

Ng Giap Hon v Westcomb Securities Pte Ltd [2009] 3 SLR (R) 518; [2009] 3 SLR 518 (folld)

Qualcast (Wolverhampton) Ltd v Haynes [1959] AC 743 (refd)

Roe v Minister of Health [1954] 2 QB 66 (refd)

Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555 (refd)

Sie Choon Poh v Amara Hotel Properties Pte Ltd [2005] 3 SLR (R) 576; [2005] 3 SLR 576 (refd)

Smith v Eric S Bush [1990] 1 AC 831 (refd)

Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR (R) 100; [2007] 4 SLR 100 (folld)

Sutherland Shire Council v Heyman (1985) 60 ALR 1 (refd)

Teo Wai Cheong v Crédit Industriel et Commercial [2011] SGCA 13 (refd)

Titan Steel Wheels Ltd v The Royal Bank of Scotland plc [2010] 2 Lloyd's Rep 92 (refd)

Yogambikai Nagarajah v Indian Overseas Bank [1996] 2 SLR (R) 774; [1997] 1 SLR 258 (refd)

Unfair Contract Terms Act (Cap 396, 1994 Rev Ed)

Kannan Ramesh, Eddee Ng and Paul Seah (Tan Kok Quan Partnership) for the appellant

Christopher Anand Daniel and Harjean Kaur (Advocatus Law LLP) for the respondent.

Andrew Phang Boon Leong JA

(delivering the grounds of decision of the court) :

Introduction

1 This appeal arose from the judgment of the trial judge (‘the Judge’) in Go Dante Yap v Bank Austria Creditanstalt AG [2010] 4 SLR 916 (‘the Judgment’) , which concerned a dispute between the Appellant and the Respondent regarding losses suffered on the Appellant's investment portfolio following the Asian financial crisis of 1997 (‘the Asian Financial Crisis’) .

2 Before the Judge, the Appellant advanced the following two claims:

(a) that 16 investments, entered into by the Respondent in his name, with his own funds as well as with funds loaned to him by the Respondent, were not authorised by him (‘the Authorisation Claim’) ; and

(b) that the Respondent owed him, and breached, contractual and tortious duties which obliged it to advise him whether to make, hold or dispose of the investments that were to be made by the Respondent on his behalf, which breach caused him to suffer losses in relation to three of the 16 investments (‘the Advisory Claim’) .

3 The Judge dismissed both the Appellant's claims. On the Authorisation Claim, he found against the Appellant on the facts, preferring the Respondent's evidence, notwithstanding that it was of a less than ideal quality. On the Advisory Claim, the Judge followed authorities in England and Singapore and held that, on the facts, there was no contractual or tortious duty on the Respondent to give investment advice to the Appellant.

4 The Appellant appealed against both these holdings. On the Authorisation Claim, the Appellant argued that the Judge should have preferred his evidence over the Respondent's, and/or that the Judge should have drawn an adverse inference against the Respondent in view of the poor quality of the latter's evidence. On the Advisory Claim, the Appellant argued that, although the Judge correctly appreciated the legal principles involved, he had misapplied them to the facts of the case.

5 At the oral hearing before us, counsel for the Appellant conceded that the appeal on the Authorisation Claim faced considerable difficulties, and he stated that, although he was prepared to argue the point, he preferred to focus his submissions on the Advisory Claim. Counsel was quite right to do so for, as we indicated at the hearing, the Authorisation Claim was hopeless in light of the Judge's clear finding of fact that the Appellant had not proven that the 16 investments were unauthorised. As we did not think that the Judge's finding in this regard could be said to have been against the weight of the evidence, there was little point in pursuing the appeal on that basis, and the main focus of the appeal was accordingly on the Advisory Claim.

6 At the conclusion of the hearing, we dismissed the appeal and awarded 90% of the costs of the appeal to the Respondent. Given our dismissal of the appeal in relation to the Authorisation Claim (for the same reasons expressed by the Judge) , what follows is an explanation of our decision on the Advisory Claim, as we did not entirely agree with the Judge's reasoning in this regard.

Facts

Background

7 The Appellant was a businessman and national of the Philippines, while...