Ong & Co Pte Ltd v Lai Siew Ping Vivien: Indemnity Clause Validity for Stockbroker's Dealer
In Ong & Co Pte Ltd v Lai Siew Ping Vivien, the High Court of Singapore ruled in favor of Ong & Co, a stockbroking firm, against its former dealer, Ms. Lai, regarding losses from transactions by her clients. Ong & Co sued Ms. Lai to recover $720,062.00 in contra losses. The court upheld the validity of an indemnity clause in Ms. Lai's employment contract, which required her to indemnify the company for losses resulting from her clients' trading activities. The court found Ms. Lai liable for the losses incurred by her clients.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Ong & Co sues former dealer Ms. Lai for losses from client transactions. The court upheld the indemnity clause in her contract, finding her liable for the losses.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Ong & Co Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Lai Siew Ping Vivien | Defendant | Individual | Claim Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Lee Meng | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Kendall Tan | Rajah & Tann |
| Andrew Ong Hock Sing | Rajah & Tann |
| Chia Ti Lik | Chia Ngee Thuang & Co |
4. Facts
- Ong & Co, a stockbroking firm, sued its former dealer, Ms. Lai, for losses arising from transactions handled by her clients.
- Ms. Lai's employment contract contained an indemnity clause requiring her to indemnify the company for losses from her clients' trading.
- Three of Ms. Lai's clients owed Ong & Co $720,062.00 in contra losses.
- Ms. Lai contended that she was not obliged to indemnify the company and that the company was negligent in handling one client's account.
- Ong & Co released S$473,312.43 to one of Ms. Lai's clients, NAK, on her instructions.
- Ms. Lai collected a cheque for $116,184.51 from NAK and handed it to the company to pay for Scotts shares.
- Ms. Lai handed Ms. Soong another cheque given to her by NAK for $200,000.
5. Formal Citations
- Ong & Co Pte Ltd v Lai Siew Ping Vivien, Suit No 1049 of 2000, [2001] SGHC 358
6. Timeline
| Date | Event |
|---|---|
| Ong & Co offered Ms Lai employment as Assistant Dealing Director (Dealer Grade) | |
| Ms Lai accepted the terms and conditions set out in the letter of appointment | |
| Ms Lai worked as a dealer at Ong & Co | |
| Ms Lai traded as a remisier pursuant to an agency agreement with Ong & Co | |
| Agency agreement between Ms Lai and Ong & Co | |
| An amount of $720,062.00 in contra losses was owed by three of Ms Lai's clients | |
| Ms Lai resigned from Ong & Co | |
| Ms Lai resigned from the company | |
| Ong & Co released S$473,312.43 to NAK | |
| NAK bought Scotts shares | |
| Ms Lai collected a cheque for $116,184.51 from NAK and handed it to the company | |
| Ms Lai handed Ms Soong another cheque given to her by NAK for $200,000 | |
| $271,972.74 of NAK's money in this account was used to pay for shares purchased by him | |
| Ong & Co instituted this action and claimed the sum of $720,062.00 plus interest | |
| Judgment Date |
7. Legal Issues
- Validity of Indemnity Clause
- Outcome: The court held that the indemnity clause in Ms. Lai's contract was valid and enforceable.
- Category: Substantive
- Negligence
- Outcome: The court found that Ong & Co was not negligent in handling NAK's account and that Ms. Lai's instructions led to the release of funds.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
- Indemnification
9. Cause of Actions
- Breach of Contract
- Indemnification
10. Practice Areas
- Commercial Litigation
11. Industries
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Associated Asian Securities Pte Ltd v Lee Kam Wah | Unknown | Yes | [1993] 1 SLR 585 | Singapore | Cited for the differences between dealers and remisiers and the approach to be taken when contractual terms are clear and unambiguous. |
| Kim Eng Securities Pte Ltd v Lee Kia Khen | Unknown | Yes | Kim Eng Securities Pte Ltd v Lee Kia Khen (Suit No 940 of 1993) | Singapore | Cited as an example where dealers have been held liable to indemnify their employers. |
| Lee & Co (Stock & Sharebrokers) Pte Ltd v Chia Kwok Yun | Unknown | Yes | Lee & Co (Stock & Sharebrokers) Pte Ltd v Chia Kwok Yun (Suit No 2254 of 1996) | Singapore | Cited as an example where dealers have been held liable to indemnify their employers. |
| RHB-Cathay Securities Pte Ltd v Shapy Khan s/o Sher Khan | Unknown | Yes | RHB-Cathay Securities Pte Ltd v Shapy Khan s/o Sher Khan (Suit No 1704 of 1999) | Singapore | Cited as an example where dealers have been held liable to indemnify their employers. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Indemnity Clause
- Dealer
- Remisier
- Contra Losses
- Clients' Account
- Stockbroking
- Trading Limits
15.2 Keywords
- Indemnity
- Stockbroker
- Dealer
- Contract
- Losses
- Clients
- Stockbroking
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Guarantees and indemnities | 90 |
| Contract Law | 80 |
| Breach of Contract | 70 |
| Securities Industry Act | 40 |
| Guarantor | 30 |
| Agency Law | 30 |
| Summary Judgement | 20 |
| Recovery of Debt | 20 |
| Misleading Information | 20 |
| Salesmen’s puff | 10 |
16. Subjects
- Contract Law
- Stockbroking
- Indemnity