Wee Soon Kim Anthony v UBS AG

CourtHigh Court (Singapore)
JudgeKan Ting Chiu J
Judgment Date08 December 2003
Neutral Citation[2003] SGHC 305
Citation[2003] SGHC 305
Published date29 December 2003
Plaintiff CounselLim Chor Pee and Ms M Rani (Chor Pee and Partners)
Defendant CounselDavinder Singh SC, Hri Kumar and Kabir Singh (Drew and Napier LLC)
Subject MatterCivil Procedure,Pleadings,Whether issues set out in plaintiff's Closing Submissions were pleaded.,Banking,Advice,Whether customer had been informed of the consequences of closing out a forward contract before its maturity date.,Tort,Misrepresentation,Whether bank's officers had made misrepresentations regarding the rate of interest being earned by a customer in his leveraged deposit,Whether customer suffered loss as a result of the misrepresentation.

1. The defendant, a bank, is sued by the plaintiff, its customer. It arose from the plaintiff’s complaints over foreign exchange transactions that he made through the defendant.

2. The plaintiff is 74 years old and is retired lawyer. Before he retired from practice in 1997 he had his own practice, with a bank as a major client. He is a wealthy man, and he agreed with counsel for the defendant, that he is not one to suffer in silence when he feels he has been wronged.

3. The plaintiff amended his statement of claim three times, the last at the beginning of the hearing. The main events in the customer-banker relationship pleaded are –

(i) in August 1997 the plaintiff became a private banking customer of the defendant;

(ii) on 28 August the plaintiff instructed the defendant to enter into a one-month forward contract with the defendant to buy MYR35,000,000 from the defendant at the rate of MYR2.8818 to US$1 for value 2 October;

(iii) on 18 September the plaintiff entered into another one-month forward contract to buy MYR5,000,000 from the defendant at MYR3.022 to US$1 for value 20 October;

(iv) in October the plaintiff took delivery of the MYR40,000,000 using US$ borrowed from the defendant, and

(v) the MYR40,000,000 was placed in one-month deposit as security for the loan (“the leveraged deposit”);

(vi) in December the plaintiff adopted the “DFF Strategy” by (i) converting the whole leveraged deposit of MYR48,806,173.83 (inclusive of accrued interest) into US$ and investing that in a fund named the SBC Dynamic Floor Fund (“the SBC Fund”), a US$ denominated fund, and (ii) entering into a 12-month forward selling US$10,439,832.63 and buying MYR41,493,114.79 “at 3.87 (spot + 0.1045 (swap) i.e. 39745 for value 6 Jan 1999";

(vii) on 14 May 1998 when the prevailing spot exchange rate was MYR3.84 to US$1, the plaintiff instructed the defendant to sell MYR and buy US$3,000,000. The defendant completed the transaction, at the rate of MYR4.20 to US$1 after taking into account swap points. When the plaintiff objected the transaction was reversed at a cost of US$63,500 to him;

(viii) on 27 July 1998 the plaintiff sold his investment in the SBC Fund and received proceeds of US$11,361,215.57 including a profit of US$816,984.61 or MYR915,245.71;

(ix) on 27 July the defendant unwound the 12-month forward contract and incurred a loss of MYR2,442,561.03; and

(x) after the Malaysian government imposed foreign exchange measures on 1 September and fixed the spot exchange rate at MYR3.80 to US$1, the defendant converted the plaintiff’s deposit on the exchange rate of MYR4.00 to US$1.

4. The plaintiff’s main complaints are that –

(i) the defendant’s officers, namely Shirreen Sin Meng Mei (“Sin”), associate director/client adviser and the relationship manager assigned to him, and Colin Koh Tse-Ming (“Koh”), director/investment adviser, misrepresented to him when they proposed the DFF Strategy that

(a) his MYR deposit was earning 3.25% interest and he was incurring a negative interest rate differential as he was paying higher interest on his US$ loan,

(b) he could unwind the 12-month MYR contract at any time at the prevailing spot rate, without informing him that swap points may be involved, and how they operate, and

(c) he would retain his MYR leveraged deposit when he entered into the DFF Strategy;

(ii) the defendant converted his leveraged deposit to invest in the SBC Fund contrary to his instructions;

(iii) on 2 September the defendant misrepresented to him that the foreign exchange market in Malaysia was closed;

(iv) the defendant converted MYR44,163,832.51 in the plaintiff’s accounts to US$11,040,956.13 at the exchange rate of MYR4 to US$1 instead of the rate MYR3.80 to US$1 fixed by the Malaysian government;

(v) the defendant charged the plaintiff handling, custody and safe-keeping and other charges in breach of an agreement that the transfer of his assets were to be transferred from his previous bankers to the defendant “free of payment”; and

(vi) the defendant has made the aforesaid charges without the plaintiff requesting for safe custody services from the defendant.

The issues

5. The trial ran for 42 days in three tranches. The plaintiff was in the witness box for 30 days, but for the morning sessions only, because of health problems. In the midst of the trial his solicitors Engelin Teh Practice LLC discharged themselves and Chor Pee & Partners were appointed. The plaintiff applied for leave to make substantial amendments to his re-re-amended statement of claim after the change of solicitors, but failed to obtain leave (see Wee Soon Kim Anthony v UBS AG (No 2) [2003] 2 SLR 554).

6. The plaintiff’s opening statement set out the issues as

(a) Whether the Defendant had misrepresented to the Plaintiff the nature of the DFF Strategy recommended to him;

(b) Whether the Defendant was negligent and/or in breach of its implied contractual duty of care in its advice on the DFF Strategy to the Plaintiff;

(c) Whether a fiduciary duty of a banker to its customers arises on the facts of this case and if so, whether the Defendant was in its breach of such fiduciary duty;

(d) Whether a collateral contract between the Plaintiff and the Defendant arises on the facts of the case under which the Defendant undertook that the adoption of the DFF Strategy would not prevent the Plaintiff from trading or closing out his “original purchase” on the spot market if a suitable opportunity to do so should arise;

(e) If so, whether the Defendant breached the said collateral contract;

(f) Whether the Defendant acted in breach of instructions or mandate in converting the Plaintiff’s leveraged deposit into US$ for investment in the SBC Fund;

(g) Whether the Defendant’s conversion of the Plaintiff’s MYR deposits at the arbitrary rate of MYR4.00 to US$1 instead of the official Bank Negara Malaysia’s rate of MYR3.80 to US$1 in September 1998 was wrongful;

(h) Whether the Defendant’s imposition of the various “safe custody charges” and other debits from the Plaintiff’s accounts were wrongful;

(i) Whether [there should be] an account of all debits made by the Defendant to the Plaintiff’s Hong Kong and Singapore accounts; and

(j) What is the legal effect of the exclusion, exemption and/or limitation clauses in the documentation which the Plaintiff signed on the opening of his accounts with the Defendant.

7. During the hearing when the facts in dispute were dealt with, and the emphasis on and treatment and identification of the issues evolved. At the close of the case the plaintiff restated the issues as

(1) Whether the defendant had exercised reasonable care and skill in advising the plaintiff on the MYR contracts of 28 August and 18 September;

(2) Whether by the fax of 12 September 1997, the defendant had failed to advise the plaintiff of the risks involved in the forex transaction and to advise him to close out the forward contract maturing on 2 October instead of taking delivery of the MYR;

(3) Whether the defendant had misrepresented to him in mid-December 1997 that he was paying 6.8% interest on his US$ loan and receiving 3.25% interest on his MYR leveraged deposit; and

(4) Whether the defendant had misrepresented to him that the DFF Strategy allowed him to exit his MYR position, without informing him that swap points would be involved if he closed out...

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3 cases
  • Wee Soon Kim Anthony v UBS AG (No 4)
    • Singapore
    • Court of Three Judges (Singapore)
    • 29 July 2004
    ...July 2004 Chao Hick Tin JA (delivering the judgment of the court): 1 This was an appeal against a decision of the High Court (in [2003] SGHC 305) dismissing the action of Mr Anthony Wee Soon Kim (“Wee”) against the UBS AG Bank (“UBS”) for damages on account of losses suffered in foreign exc......
  • Re Wee Soon Kim Anthony
    • Singapore
    • High Court (Singapore)
    • 8 May 2007
    ...(“Mr Anthony Wee”) was the plaintiff and UBS AG (“UBS”) was the defendant. On 8 Dec 2003, Kan J dismissed S 834 with costs (see [2003] SGHC 305]. Mr Anthony Wee appealed against the dismissal of his action in CA No. 1 of 2004. On 27 May 2004, the Court of Appeal dismissed his appeal with co......
  • Wee Soon Kim Anthony v UBS AG
    • Singapore
    • High Court (Singapore)
    • 1 February 2006
    ...of giving evidence against the plaintiff. The plaintiff set out in his Submissions without demurral my views in my Grounds of Decision ([2003] SGHC 305 at [47]) Mr Sim’s attendance in court was necessary. First, it could provide a better basis for assessing the plaintiff’s contention that t......

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