Teo Wai Cheong v Crédit Industriel et Commercial and another appeal
| Jurisdiction | Singapore |
| Judge | Sundaresh Menon CJ |
| Judgment Date | 17 May 2013 |
| Neutral Citation | [2013] SGCA 33 |
| Court | Court of Appeal (Singapore) |
| Docket Number | Civil Appeals Nos 59 and 94 of 2012 |
| Published date | 21 May 2013 |
| Year | 2013 |
| Hearing Date | 19 March 2013 |
| Plaintiff Counsel | Chelva Rajah SC and Tham Lijing (Tan Rajah & Cheah), Sean Lim Thian Siong and Gong Chin Nam (Hin Tat Augustine & Partners) |
| Defendant Counsel | Manoj Sandrasegara, Smitha Menon, Aw Wen Ni, Mohamed Nawaz, Daniel Chan, Jonathan Tang and Edmund Koh (WongPartnership LLP) |
| Subject Matter | Banking,Evidence,Admissibility of Evidence |
| Citation | [2013] SGCA 33 |
This litigation, between the appellant Teo Wai Cheong (“Teo”) and the respondent Crédit Industriel et Commercial (“the Bank”) has had a long and tortuous history. This is the third time that the matter has reached the Court of Appeal. As will become evident, the need for much of this arduous journey stemmed from the Bank’s abject failure to make proper discovery. The first time the matter came before us, in Civil Appeal No 113 of 2009, we dealt with an interlocutory application, brought by Teo, for further discovery. On that occasion, we allowed Teo’s appeal and ordered the Bank to make further discovery. The trial of the matter followed and it lasted 16 days (“the First Trial”). The Judicial Commissioner who heard the trial (“the First Trial Judge”) found in favour of the Bank and his judgment is reported at
The Bank is a French bank registered as a foreign company in Singapore. It carries on a private banking business in Singapore. Teo is a former private banking client of the Bank. A relationship manager known as Ng Su Ming (“Ng”) managed Teo’s account. Ng had been Teo’s relationship manager, even before Teo opened his account with the Bank, when she had worked at Citibank Singapore (“Citibank”). The relationship had started in 2004 and when Ng left Citibank for the Bank in 2006, she persuaded Teo to transfer his business and to open a private banking account with the Bank.
Initially, Teo dealt in foreign exchange options, equity notes and shares. In June 2007, Teo was introduced by Ng to what was, at that time, a new financial product known as “equity accumulators”. The parties do not dispute the essential features of an accumulator.
With an accumulator, an investor agrees to accumulate a certain specified quantity of shares of a specified counter from a counterparty over an agreed period (“the agreed period”). This undertaking is fixed at a price which reflects a discount to the market price at which that counter is trading at the beginning of the agreed period. This market price is called the “Initial Price” and the discounted price is known as the “Forward Price” or the “Strike Price”. The investor’s obligation, which is to acquire an agreed number of shares on each trading day for the duration of the agreed period, may be prematurely terminated by agreement. However, if the market price of the shares rises above a certain specified price, known as the “Knock-Out Price”, the accumulator is automatically terminated. This serves to cap the loss of the counterparty. As long as the market price is above the Strike Price but below the Knock-Out Price, the investor is obliged to purchase the specified quantity of shares at the Strike Price. In doing so, the investor will be accumulating shares at a discount to the prevailing market price. Once the Knock-Out Price is struck, the transaction ends. On the other hand, where the market price falls below the Strike Price, the investor is obliged to purchase
It is common ground between the parties that the usual course of conduct and communications between Ng and Teo with respect to the placement and updating of the status of Teo’s orders for a particular accumulator was by way of telephone conversations and Short Message Services (“SMSes”). This typically involved the following:
Between 20 July 2007 and 3 October 2007, twenty equity accumulators were purchased and booked under Teo’s account with the Bank. These transactions and the terms of these accumulators are listed in the table below: Table of Accumulators
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