Saimee bin Jumaat v IPP Financial Advisers Pte Ltd and others

CourtHigh Court (Singapore)
JudgeChoo Han Teck J
Hearing Date14 March 2019,21 May 2019,13 March 2019
Docket NumberHC/Suit No 735 of 2018
Published date09 July 2019
Plaintiff CounselUthayasurian Sidambaram (instructed) and Vishnu Aditya Naidu (Phoenix Law Corporation)
Defendant CounselChan Wai Kit Darren Dominic and Ng Yi Ming Daniel (Characterist LLC),Tan Teck Hian Wilson, Kelvin Lee and Samantha Ong Xin Ying (WNLEX LLC)
Subject MatterTort,Negligence,Misrepresentation,Vicarious liability,Limitation of Actions,Particular causes of action
Choo Han Teck J:

The plaintiff, Saimee Bin Jumaat (“Saimee”) received his training as a professional horse jockey at the age of 16, after he had completed his N-Level examinations. He turned professional about the age of 25, and rode until he retired in 2012 when he was about 40 years old.

In 2004, he consulted Candice Lee from the Prudential Insurance Company (“Prudential”) with a view of getting insurance cover for himself. After Candice Lee left Prudential and joined the first defendant, IPP Financial Advisers Pte Ltd (“IPP”) in 2005, she and her colleague, Mathew Ashok Kumar, became the financial advisers on behalf of IPP to Saimee, and Saimee procured insurance policies through IPP. Mathew and Candice reviewed Saimee’s financial and insurance position until 2009 when they left IPP’s employ. The second defendant, Moi Kok Keong (“Moi”) and the third defendant, Quek Miaw Sian Alice (“Quek”) then took over Saimee’s portfolio with IPP from Candice and Ashok.

Moi gave Saimee a business card under IPP in which his designation was “Managing Partner”. Quek also gave her IPP business card to Saimee in which she was described as “Financial Services Manager”.

Moi and Quek re-evaluated Saimee’s financial portfolio and advised changes to some of his policies and investments. Saimee’s insurance policies included policies he took for his wife and children. He testified in his evidence-in-chief that he took the advice of Moi and Quek on “moving funds around when necessary” and he “relied on their professional expertise”.

This action before me concerned an investment into foreign exchange based on an algorithm trading service offered by a company known as SMLG Inc (“SMLG”). Saimee testified that sometime on or about 24 February 2011, Moi and Quek advised Saimee to sell his shares in various companies and to invest a total of USD$620,900 in SMLG’s algorithm trading service (“the SMLG Investment”). Saimee also alleged that Moi and Quek made the following representations: within a year from the date of investment, SMLG would pay the principal amount invested along with a profit of 40%; the investment was safe and capital guaranteed; and they recommended the same to all of their clients.

On 11 April 2012, Moi introduced one Seeni to Saimee who was told that Seeni was the fund manager for SMLG. Seeni was not called as a witness in this trial, but the fact of this introduction was not disputed by the defendants. After the meeting, Saimee, on the advice of Moi and Quek, opened a trading account with FX Primus Ltd (“FX Primus”) for the purposes of the SMLG Investment, and deposited a total of US$620,900 into a Barclays bank account in Mauritius, held by FX Primus, in three tranches — USD$80,300 on 27 April 2011; USD$240,300 on 17 June 2011; and USD$300,300 on 3 February 2012.

In May 2012 when the first tranche payment of USD$80,300 together with profits became due to Saimee, Moi and Quek told Saimee that due to a technical glitch in the algorithm trading platform, SMLG was unable to pay and needed to raise funds to start trading again. Moi and Quek also represented to Saimee that SMLG required a USD$200,000 loan for the purposes of fund raising, which SMLG would repay within two months. Saimee said that at this point, Moi and Quek disclosed to him that they too had invested in the SMLG Investment, which from the evidence, amounted to USD$49,701.12 and USD$21,023.84 respectively. So, in the interests of all three of them, their loan to SMLG was essential to recover their investment with profit.

On 25 April 2012, Saimee gave SMLG the USD$200,000 loan with Moi executing a guarantee in favour of Saimee for the return of this loan. The guarantee was signed together with the loan that was stated to be repayable on 24 June 2012. On 24 June 2012, the loan was not repaid as agreed, and neither were any of the invested sums paid to Saimee.

Between June to September 2012, Saimee continued asking Moi and Quek for his moneys. Sometime around 17 September 2012, Moi and Quek advised Saimee, through a phone call, to enter into three separate settlement agreements with SMLG, dated 17 September 2012 (“the Settlement Agreements”). The Settlement Agreements provided that SMLG will pay Saimee a total sum of USD$711,000 (“the Settlement Sum”), comprising of his total invested principal of USD$620,900 together with his promised returns, by 20 September 2012, as the full and final settlement of all claims against SMLG in relation to the SMLG Investment. On 20 September 2012, no sums were paid to Saimee. Between 20 September 2012 and October 2013, Saimee continued reminding Moi and Quek for payment. Each time Saimee requested for an update regarding the Settlement Sum, Moi assured Saimee that the funds would be transferred to him shortly.

Saimee’s USD$200,000 loan to SMLG was eventually repaid in two tranches; SGD$50,000 on 16 October 2012 and SGD$240,000 a year later. On 21 July 2018, Saimee filed a writ of summons claiming for the sum of USD$711,000 (his invested sum and promised returns) on the grounds of fraudulent or negligent misrepresentation against Moi and Quek, and on the ground of vicarious liability against IPP. Till this date, Saimee has not received any of his invested sums.

There are three main issues before me which I shall address in turn: Whether Moi and Quek breached their duty of care owed to Saimee by negligently misrepresenting the SMLG Investment. Whether Saimee’s claim against Moi and Quek is time barred. Whether IPP is vicariously liable for Moi and Quek’s breach of their duty of care.

Counsel for Moi and Quek, Mr Wilson Tan, submits that Moi and Quek do not owe Saimee a duty of care since the SMLG Investment was merely personal advice by Moi, when Saimee asked to know more about Moi’s personal experience in managing his shares. Mr Tan argues that this advice was not given in Moi’s official capacity as Saimee’s financial adviser, and that Saimee is an experienced investor. In addition, counsel for IPP, Mr Dominic Chan, submits that Saimee ought to have known that such advice was neither official nor professional advice. Counsel for Saimee, Mr Uthayasurian Sidambaram, demurs and submits that Moi and Quek owe Saimee a duty of care as they advised Saimee in their professional capacity as his financial advisers.

It is, in my view, reasonably foreseeable that Saimee will suffer economic loss should Moi and Quek, being Saimee’s financial advisers, fail to take reasonable care when providing financial advice (Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100 at [73]). We should focus on the twin criteria of voluntary assumption of responsibility and reliance to determine if there was the requisite legal proximity imposing a duty of care on Moi and Quek for pure economic loss. As Lord Morris held in Hedley Bryne & Co. Ltd v Heller & Partners Ltd. [1963] 3 W.L.R. 101 (“Hedley Bryne”) at 124:

…[I]f someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise.

Those words have formed the core of liability in law for financial loss since 1963. It has become a principle encrusted in our law because it is simple,...

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