Banque Nationale de Paris v Hew Keong Chan Gary: Accessory Liability & Unauthorized Transactions

In Banque Nationale de Paris v Hew Keong Chan Gary, the Singapore High Court heard a case involving Banque Nationale de Paris (Plaintiff) against Hew Keong Chan Gary, Nancy Tan, and Tan Shee Chin (Defendants) concerning unauthorized foreign exchange transactions. The plaintiff claimed that the defendants were liable for losses incurred due to Hew's actions, alleging accessory liability, breach of duty, and conspiracy. Nancy and Tan counterclaimed, asserting breaches of contractual duty, duty of care, and fiduciary duties by the plaintiff. The court dismissed the plaintiff's claims, finding Hew primarily responsible due to his fraudulent conduct and the bank's internal control failures, and allowed the defendants' counterclaims, ordering the return of collateral.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff's claim dismissed; fourth and fifth defendants' counterclaim allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

BNP sues Hew Keong Chan Gary, Nancy Tan, and Tan Shee Chin for losses from unauthorized forex transactions. Claims dismissed; counterclaims allowed.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Banque Nationale de ParisPlaintiffCorporationClaim DismissedLost
Tan Shee ChinDefendantIndividualClaim DismissedWon
Hew Keong Chan GaryDefendantIndividualClaim DismissedNeutral
Nancy TanDefendantIndividualClaim DismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Lai Kew ChaiJudgeYes

4. Counsels

Counsel NameOrganization
Herman JeremiahHelen Yeo & Partners
Roger FooHelen Yeo & Partners
Simon JonesWee Swee Teow & Co
Chiah Kok KhunWee Swee Teow & Co
Chua Sui TongHarry Elias Partnership
Philip FongHarry Elias Partnership

4. Facts

  1. Hew Keong Chan, an employee of Banque Nationale de Paris, engaged in unauthorized share and forex transactions.
  2. Nancy Tan and Tan Shee Chin are siblings; Hew Keong Chan was married to Nancy Tan but they were separated.
  3. Tan Shee Chin opened accounts with Banque Nationale de Paris on Hew Keong Chan's advice.
  4. Nancy Tan provided collateral to support Tan Shee Chin's accounts at Hew Keong Chan's request.
  5. Hew Keong Chan entered into forex transactions in the names of Nancy Tan and Tan Shee Chin without their authorization.
  6. Banque Nationale de Paris's internal controls were weak, allowing Hew Keong Chan to bypass procedures.
  7. Nancy Tan and Tan Shee Chin claimed they were unaware of Hew Keong Chan's unauthorized transactions.

5. Formal Citations

  1. Banque Nationale de Paris v Hew Keong Chan Gary and Others, Suit 1936/1998, [2000] SGHC 239

6. Timeline

DateEvent
Gary Hew Keong Chan began employment with Banque Nationale de Paris
Gary Hew Keong Chan married Nancy Tan
Tan Shee Chin became a customer of Banque Nationale de Paris
Tan Shee Chin executed a charge over cash
Banque Nationale de Paris granted credit facilities to Tan Shee Chin
Tan Shee Chin signed an Irrevocable Letter of Authority
Banque Nationale de Paris granted credit facilities to Tan Shee Chin
Gary Hew Keong Chan and Nancy Tan ceased living as husband and wife
Gary Hew Keong Chan was promoted to Assistant Vice President, Private Banking
Loan of S$100,000 credited to Tan Shee Chin's account
Tan Shee Chin instructed Banque Nationale de Paris to open a BNP Nominees Account
Tan Shee Chin signed a memorandum of charge/deposit
Nancy Tan opened a Singapore dollar current account with Banque Nationale de Paris
Nancy Tan executed a charge on cash amounts to secure the liability of Tan Shee Chin to Banque Nationale de Paris
Hew Keong Chan informed Tan Shee Chin of the need to top up his account by additional collateral
Banque Nationale de Paris increased the credit facilities granted to Tan Shee Chin
Fixed deposit of US$50,000 as at 4 November 1997
Forex transactions booked under the account of Tan Shee Chin started
Hew Keong Chan telephoned Tan Shee Chin to inform him of two forex transactions
Forex transactions for Nancy Tan started
Hew Keong Chan and Nancy Tan had a telephone conversation regarding a contra profit of JYP3.5m
Hew Keong Chan called Tan Shee Chin in Hong Kong
Hew Keong Chan called Nancy Tan
Dramatic strengthening of the Japanese Yen against the US dollar took place
Banque Nationale de Paris closed out all positions taken out by Hew Keong Chan regarding the US$9m disputed transactions
Hew Keong Chan informed Nancy Tan and Tan Shee Chin of the forex deals
Tan Shee Chin left two voice messages in the voice-mail system of Mr Hammery
Billy Au-Yeung spoke to Nancy Tan over the telephone
Hew Keong Chan returned from his leave
Nancy Tan met Hew Keong Chan at the Westin Stamford lounge
Banque Nationale de Paris wrote to Nancy Tan and Tan Shee Chin for their confirmations of the forex contracts
Tan Shee Chin wrote to Banque Nationale de Paris and denied knowledge of or having authorized the five forex contracts
Mr Hammery, Carol Lau and Billy Au-Yeung met with Hew Keong Chan for his explanation regarding Tan Shee Chin's denials
Nancy Tan faxed a letter to Banque Nationale de Paris formally informing it that she was not aware and had not authorised Hew Keong Chan to enter into the disputed transactions in her name
Nancy Tan lodged a report to the police
Tan Shee Chin filed police reports
Ms Oehlers on behalf of Banque Nationale de Paris also filed their police report
Banque Nationale de Paris instituted this action against Hew Keong Chan
Banque Nationale de Paris obtained a Mareva injunction against Hew Keong Chan
Hew Keong Chan was dismissed from employment with Banque Nationale de Paris
Banque Nationale de Paris obtained an order of court granting leave to include in this action the second to fifth defendants as additional defendants
Hew Keong Chan pleaded guilty and was sentenced to a term of 12 months' imprisonment
Nancy Tan swore her affidavit evidence
Decision Date

7. Legal Issues

  1. Dishonest Assistance
    • Outcome: The court found that neither Nancy Tan nor Tan Shee Chin were dishonest in any assistance they unwittingly rendered to Hew Keong Chan.
    • Category: Substantive
    • Related Cases:
      • [1995] 2 AC 378
  2. Breach of Fiduciary Duty
    • Outcome: The court found that Hew Keong Chan breached his fiduciary duties to Banque Nationale de Paris.
    • Category: Substantive
  3. Procuring Breach of Contract
    • Outcome: The court found that Nancy Tan and Tan Shee Chin did not procure Hew Keong Chan's breaches of his employment contract.
    • Category: Substantive
  4. Conspiracy to Injure
    • Outcome: The court found that Nancy Tan and Tan Shee Chin were not party to any agreement to injure Banque Nationale de Paris.
    • Category: Substantive
  5. Duty to Inform of Unauthorized Transactions
    • Outcome: The court found that the implied duty to notify any unauthorized transaction is another proposition for which no authority has been cited.
    • Category: Substantive
  6. Estoppel
    • Outcome: The court found that Tan Shee Chin did not intend to induce the plaintiff to continue to allow Hew to trade in shares in his account.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Restoration of Collateral
  3. Declaratory Judgment

9. Cause of Actions

  • Accessory Liability for Dishonest Assistance
  • Breach of Duty to Inform
  • Procuring Breach of Contract
  • Conspiracy
  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Banking
  • Breach of Fiduciary Duty
  • Conspiracy
  • Contract Law

11. Industries

  • Financial Services

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Royal Brunei Airlines Sdn Bhd v Tan (Philip Kok Ming)Privy CouncilYes[1995] 2 AC 378United KingdomSeminal case laying down the rule for liability in equity for dishonest assistance in a breach of trust or fiduciary obligation; established that dishonesty is a necessary ingredient of accessory liability.
Cowan de Groot Properties Ltd v Eagle Trust plcN/ANo[1942] 4 All ER 700England and WalesCited for the principle of commercially unacceptable conduct in the context of honesty.
Agip (Africa) Ltd v JacksonN/AYes[1990] Ch 265N/ACited for the principle that the basis of a stranger's liability is participation in a fraud, not receipt of trust property.
Satnam Investments Ltd v Dunlop Heywood & Co LtdEnglish Court of AppealNo[1999] 3 All ER 652England and WalesCited for the principle that before a case can fall into either category of knowing receipt or knowing assistance, there must be trust property or traceable proceeds of trust property.
Goose v Wilson Sandford & CoEnglish Court of Appeal (Civil Division)NoGoose v Wilson Sandford & CoEngland and WalesDiscusses the requirements for dishonest assistance, clarifying that it is not a requirement of liability that any property should have been received or handled by the defendant.
Greenwood v Martins BankN/ANo[1933] AC 51United KingdomCited in connection with the operation of the equitable doctrine of estoppel in cases of forged cheques.
Tai Hing Cotton Mill v Liu Chong Hing Bank LtdN/ANo[1986] AC 80N/ACited in connection with the operation of the equitable doctrine of estoppel in cases of forged cheques.
Kodrat Suradji v Banque Nationale de ParisN/ANo[1992] 2 SLR 676SingaporeCited in connection with the operation of the equitable doctrine of estoppel in cases of forged cheques.
Fung Kai Sun v Chang Fui Hing & OrsN/ANo[1951] AC 489Hong KongCited in connection with the operation of the equitable doctrine of estoppel in cases of forged cheques.
Lipkin Gorman v Karpnale LtdN/ANo[1992] 4 All ER 409England and WalesCited for the principle that it is an implied term of the relationship between a banker and his customer that the latter will notify the former as soon as he learns that the account is being operated by a dishonest person.
Seagate Technology (S) Pte Ltd v Heng Eng LiN/ANo[1994] 1 SLR 534SingaporeCited for the principle that the existence of an agreement must be proved to establish the tort of conspiracy.
DC Thomson & Co Ltd v DeakinN/ANo[1952] Ch 646England and WalesCited for identifying three forms of interference which could give rise to the tort of procuring breach of contract.
Baden v Societe GeneralN/ANo[1992] 4 All ER 161N/AThe five-point scale of degrees of knowledge put forward in Baden v Societe General were, in the context of dishonest accessory liability, `best forgotten`.
Brinks v Abu-Saleh (No 3)N/ANoBrinks v Abu-Saleh (No 3)N/AA security guard of the plaintiff (indisputably a fiduciary) facilitated the robbery of gold and other valuables worth £26m from its Heathrow warehouse to his accomplices in the robbery.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Evidence Act (Cap 97)Singapore
Securities Industry Act (Cap 289)Singapore
Futures Trading Act (Cap 116)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Dishonest Assistance
  • Fiduciary Duty
  • Unauthorized Transactions
  • Internal Controls
  • Collateral
  • Forex Transactions
  • Rogue Trading
  • Estoppel

15.2 Keywords

  • Banque Nationale de Paris
  • Hew Keong Chan Gary
  • Nancy Tan
  • Tan Shee Chin
  • Unauthorized Transactions
  • Dishonest Assistance
  • Fiduciary Duty
  • Forex
  • Singapore
  • High Court

17. Areas of Law

Area NameRelevance Score
Fiduciary Duties90
Banking Law80
Banking and Finance80
Trust Law80
Accessory liability80
Conspiracy by Unlawful Means70
Knowing Receipt70
Estoppel70
Inducement of Breach of Contract70
Fraud and Deceit60
Contract Law50
Agency Law50
Evidence40
Civil Procedure30

16. Subjects

  • Banking
  • Finance
  • Equity
  • Torts
  • Trusts