Stephan Machinery Singapore Pte Ltd v Oversea-Chinese Banking Corp Ltd

CourtHigh Court (Singapore)
JudgeLai Kew Chai J
Plaintiff CounselKenneth Koh (Kenneth Koh & Co)
Subject MatterWhether plaintiffs can disavow knowledge of terms in defendants' forms,Contract,Contractual terms,Cheques,Duties of account holder -Conclusiveness of statements,Forged,Whether plaintiffs can breach agreement by asserting errors and discrepancies,Whether defendants can make payment on forged cheques,s 24 Bills of Exchange Act (Cap 23, 1999 Rev Ed),Conclusiveness of bank statements,Banking,Bank statements,Plaintiffs opening current account with defendants,Whether plaintiffs can breach agreement by asserting errors and discrepancies in statements,Duties of account holder
Defendant CounselChelva R Rajah SC and Chew Kei-Jin (Tan Rajah & Cheah)
Docket NumberSuit No 1736 of 1998
Published date19 September 2003
Date26 May 1999

: In this action the plaintiffs claimed against the defendants the sum of $904,398.00 or alternatively damages for negligence. Their case was that by reason of s 24 of the Bills of Exchange Act (Cap 23), they lacked the authority to pay out the said sum from their current account with the defendants in respect of 57 cheques which were drawn against it but which were forged. Alternatively, they asserted that the defendants were negligent for not noticing the uncharacteristic number of cash cheques presented for payment in 1997. In response, the defendants contended that by reason of a clause in the agreement between them the defendants in the events that had happened were contractually precluded from rejecting the conclusiveness of the bank statements and the particulars of their account. They further contended that the plaintiffs` defective system of management and control of the operation of the current account caused their losses. At the conclusion of the trial, I dismissed the claims with costs. I now give my reasons.

The plaintiffs are in the business of selling spare parts. The defendants are one of the biggest local banks in Singapore. In 1994 the plaintiffs opened a current account with the defendants, at their Upper Thomson Branch. Mr Peter Reeg, their managing director, opened the account for the businesses of the plaintiffs. He then had considerable working experience. In establishing the current account, the plaintiffs submitted to the defendants, amongst other documents, a form entitled `Account Application - Business`. The form was completed; the particulars were typed in. Mr Reeg and Mr Lim Tiong Beng, a director, signed the form (exh AB161). They made the following declaration printed on the form:

I/We have received and read a copy of the Bank`s Terms and Conditions relating to the Account(s) and I/We jointly and severally agree to abide by and be bound by them and any amendments, alterations and additions thereto as may from time to time be made ...

Clause 13 of the Terms and Conditions for Current Accounts (exh AB 162A) provided as follows:

A statement of the customer`s account generated by the Bank`s Computer (bank statement) will be sent to the Customer every month unless there is no transaction during that month. The Customer shall be under a duty to examine the entries in every bank statement and to report immediately to the Bank if there are any errors or discrepancies. If the Customer does not within fourteen days

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17 cases
  • Jiang Ou v EFG Bank AG
    • Singapore
    • High Court (Singapore)
    • 9 June 2011
    ...of Singapore Ltd [1998] 1 SLR (R) 824; [1998] 3 SLR 64 (folld) Stephan Machinery Singapore Pte Ltd v Oversea-Chinese Banking Corp Ltd [1999] 2 SLR (R) 518; [2000] 2 SLR 191 (distd) Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 (folld) Tjoa Elis v United Overseas Bank Ltd [......
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2 books & journal articles
  • Banking Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2000, December 2000
    • 1 December 2000
    ...the term in favour of the banks. In the latest decision, Stephan Machinery Singapore Pte Ltd v Oversea-Chinese Banking Corporation Ltd[2000] 2 SLR 191, Lai Kew Chai J decided that a customer who had not checked his bank statements was precluded from raising the issue that funds had been wro......
  • Banking Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2014, December 2014
    • 1 December 2014
    ...Trust & Savings Association[1992] 2 SLR(R) 195 (consmat), Stephan Machinery Singapore Pte Ltd v Oversea-Chinese Banking Corp Ltd[1999] 2 SLR(R) 518, and Tjoa Elis v United Overseas Bank[2003] 1 SLR(R) 747 (tjoa elis). The Court of Appeal highlighted (at [63]) that: the relationship between ......

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