Susilawati v American Express Bank: Undue Influence & Banking Secrecy
Susilawati, an Indonesian citizen, sued American Express Bank Limited in the High Court of Singapore, alleging undue influence and breach of fiduciary duty related to a third-party charge she executed to secure her son-in-law's liabilities. Susilawati claimed that the bank failed to protect her interests and that the charge was procured through undue influence. The court, presided over by Justice Lai Siu Chiu, dismissed Susilawati's claims, finding that she was aware of the charge's implications and that the bank did not owe her a fiduciary duty.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiff's claim dismissed with costs to the defendant on a standard basis.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Indonesian citizen Susilawati sued American Express Bank for losses from a third-party charge, alleging undue influence and breach of fiduciary duty. The court dismissed the claims.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Susilawati | Plaintiff | Individual | Claim Dismissed | Lost | Siraj Omar, Tandip Singh, Dian Chen |
| American Express Bank Ltd | Defendant | Corporation | Judgment for Defendant | Won | Francis Xavier, Boey Swee Siang, Dawn Wee, Ho Hua Chyi |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Siraj Omar | Tan Kok Quan Partnership |
| Tandip Singh | Tan Kok Quan Partnership |
| Dian Chen | Tan Kok Quan Partnership |
| Francis Xavier | Rajah & Tann |
| Boey Swee Siang | Rajah & Tann |
| Dawn Wee | Rajah & Tann |
| Ho Hua Chyi | Rajah & Tann |
4. Facts
- Plaintiff, an Indonesian citizen, opened an account with American Express Bank in 1997.
- Plaintiff executed a charge in 1998 to secure her son-in-law's liabilities to the bank.
- The son-in-law incurred substantial debts to the bank through foreign exchange transactions and loans.
- The bank deducted US$17,560,390.98 from the plaintiff's account to cover the son-in-law's debts.
- Plaintiff claimed the charge was procured by undue influence and that the bank breached fiduciary duties.
- The bank argued the plaintiff executed the charge with full knowledge and affirmed it by continuing to operate the account.
- The plaintiff gave specific instructions that her funds could not be utilized for shares, mutual funds or speculative trades.
5. Formal Citations
- Susilawati v American Express Bank Ltd, Suit 305/2006, [2007] SGHC 179
6. Timeline
| Date | Event |
|---|---|
| Plaintiff opened an account with the defendant's private banking division. | |
| Plaintiff executed a third-party liabilities charge. | |
| Plaintiff's husband passed away. | |
| Plaintiff was reminded that substantial amounts of her funds had been pledged as security for Tommy's debts. | |
| Plaintiff denied signing the charge to Chay Hong Leng. | |
| Tommy's liabilities to the defendant amounted to approximately US$17.4 million. | |
| Plaintiff filed her statement of claim. | |
| Plaintiff filed Further and Better Particulars. | |
| Judgment reserved. |
7. Legal Issues
- Undue Influence
- Outcome: The court found that the plaintiff failed to establish undue influence.
- Category: Substantive
- Sub-Issues:
- Relationship of trust and confidence
- Transaction not readily explicable
- Actual or constructive notice
- Related Cases:
- [1990] 1 QB 923
- [2004] 4 SLR 113
- [2001] 3 WLR 1021
- [1971] Ch 95
- (1887) 36 Ch D 145
- Breach of Fiduciary Duty
- Outcome: The court found that the defendant did not owe a fiduciary duty to the plaintiff.
- Category: Substantive
- Sub-Issues:
- Conflict of interest
- Failure to advise
- Breach of duty of care
- Related Cases:
- [1991] 1 NZLR 676
- [1974] 3 All ER 757
- [1997] NZFLR 404
- [1990] 2 NZLR 327
- Banking Secrecy
- Outcome: The court discussed the conflict between banking secrecy and disclosure to guarantors.
- Category: Substantive
- Sub-Issues:
- Duty of confidentiality
- Implied consent to disclose
- Statutory duty of confidentiality
- Related Cases:
- [1924] 1 KB 461
- (1845) 12 Cl & Fin 109
8. Remedies Sought
- Recovery of US$17,500,605
- Damages
9. Cause of Actions
- Undue Influence
- Breach of Fiduciary Duty
10. Practice Areas
- Commercial Litigation
- Banking Litigation
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Bank of Credit and Commerce International SA v Aboody | Queen's Bench | Yes | [1990] 1 QB 923 | England and Wales | Cited for the categorization of impugned transactions into cases of “actual” and “presumed” undue influence. |
| The Bank of East Asia Ltd v Mody Sonal M and Others | High Court | Yes | [2004] 4 SLR 113 | Singapore | Cited for the requirements to prove presumed undue influence. |
| Royal Bank of Scotland v Etridge (No. 2) | House of Lords | Yes | [2001] 3 WLR 1021 | England and Wales | Cited for the structured scheme for deciding cases raising the issue of enforceability between a lender and a wife due to undue influence. |
| In re Craig | Chancery Division | Yes | [1971] Ch 95 | England and Wales | Cited to show that the presumption of undue influence does not arise simply whenever any relationship of trust and confidence exists. |
| Allcard v Skinner | Court of Appeal | Yes | (1887) 36 Ch D 145 | England and Wales | Cited to determine whether a transaction is explicable in terms other than undue influence. |
| Cook v Evatt (No. 2) | High Court | Yes | [1991] 1 NZLR 676 | New Zealand | Cited for the essence of a fiduciary relationship. |
| Lloyds Bank v Bundy | Court of Appeal | Yes | [1974] 3 All ER 757 | England and Wales | Cited as a case where the protective gauntlet of a fiduciary relationship has previously been imposed. |
| Dungey v ANZ Banking Group (NZ) Ltd | High Court | Yes | [1997] NZFLR 404 | New Zealand | Cited as a case where the protective gauntlet of a fiduciary relationship has previously been imposed. |
| Shivas v Bank of New Zealand | Court of Appeal | Yes | [1990] 2 NZLR 327 | New Zealand | Cited for the rationale underlying a fiduciary relationship. |
| Province of Alberta Treasury Branches v Hammond | Unknown | Yes | 67 ACWS (3d) 122 | Canada | Cited to show that it would be an exceptional case where parties who have different commercial interests ought to be considered to have assumed a fiduciary relationship. |
| ASIC v Citigroup Global Markets Australia Pty Limited (No.4) | Federal Court of Australia | Yes | [2007] FCA 963 | Australia | Cited for the extent of deference accorded by the court to contractual terms. |
| Deepak Fertilisers & Petrochemical Corporation v Davy McKee (London) Ltd | Court of Appeal | Yes | [1999] 1 All ER 69 | England and Wales | Cited by the defendant in support of its request for indemnity costs. |
| Standard Chartered Bank v Elang Mas Enterprise Pte Ltd | High Court | Yes | [2003] SGHC 181 | Singapore | Cited by the defendant in support of its request for indemnity costs. |
| Hamilton v Watson | House of Lords | Yes | (1845) 12 Cl & Fin 109 | United Kingdom | Cited for the limited duty of disclosure with reference to any transactions between the creditor and debtor which might potentially “subvert the presumed basis of the guarantee”. |
| Ross v Bank of New South Wales | Supreme Court | Yes | (1928) SR (NSW) 539 | New South Wales | Cited for the limited duty of disclosure with reference to any transactions between the creditor and debtor which might potentially “subvert the presumed basis of the guarantee”. |
| Goodwin v The National Bank of Australasia Ltd | High Court of Australia | Yes | (1968) 42 ALJR 110 | Australia | Cited for the limited duty of disclosure with reference to any transactions between the creditor and debtor which might potentially “subvert the presumed basis of the guarantee”. |
| Union Bank of Australia Ltd v Puddy | Supreme Court | Yes | [1949] VLR 242 | Victoria | Cited to show that in the absence of specific inquiry, a bank is not legally obliged to disclose the “existence or state of liabilities additional to the customer’s account which will come within the scope of the guarantee such as another overdrawn account of the customer”. |
| National Australia Bank Ltd v Nobile | Federal Court of Australia | Yes | (1988) 100 ALR 227 | Australia | Cited for the principle that a guarantor is entitled to be protected against misleading, deceptive or “unconscionable” conduct that would induce the execution of a guarantee. |
| Lloyd’s Bank Ltd v Harrison | Unknown | Yes | (1925) 4 LDAB 12 | England and Wales | Cited to show that a bank is entitled to assume that a principal debtor who tenders a surety has explained the general nature of his position and has explained it properly. |
| Royal Bank of Scotland v Greenshields | Court of Session | Yes | 1914 SC 259 | Scotland | Cited to show that a bank is entitled to assume that an intending guarantor has made himself fully acquainted with the financial position of the customer whose debt he is about to guarantee. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Banking Act (Cap 19, 2003 Rev Ed), section 47 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Third Party Charge
- Undue Influence
- Fiduciary Duty
- Banking Secrecy
- Guarantor
- Surety
- Private Banking
- Relationship Manager
- Banking Act
- Customer Information
15.2 Keywords
- Susilawati
- American Express Bank
- Undue Influence
- Banking Secrecy
- Fiduciary Duty
- Singapore
- High Court
- Charge
- Guarantee
16. Subjects
- Banking
- Contract
- Equity
- Civil Procedure
17. Areas of Law
- Banking Law
- Contract Law
- Equity
- Civil Procedure
- Banking Secrecy
- Undue Influence
- Fiduciary Relationships
- Law of Guarantees