Susilawati v American Express Bank: Breach of Fiduciary Duty & Undue Influence Claims
In Susilawati v American Express Bank Ltd, the Court of Appeal of Singapore dismissed Mdm Susilawati's appeal against the High Court's decision, which had dismissed her claims of undue influence and breach of fiduciary duties against American Express Bank Limited. The case centered on a third-party charge executed by Susilawati to secure her son-in-law's trading account losses. The appellant sought to introduce a new argument on appeal, alleging a conflict of interest due to a referral agreement between her son-in-law and the bank, but the court denied leave to raise this new point, as well as applications for a new trial and to amend pleadings. The court found that the appellant had failed to demonstrate that the new evidence could not have been obtained with reasonable diligence for use in the trial.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The Court of Appeal dismissed Susilawati's appeal against American Express Bank, regarding claims of undue influence and breach of fiduciary duties.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Susilawati | Appellant | Individual | Appeal dismissed | Lost | |
| American Express Bank Ltd | Respondent | Corporation | Appeal dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Sek Keong | Chief Justice | No |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | No |
| V K Rajah | Justice of the Court of Appeal | Yes |
4. Counsels
4. Facts
- Susilawati executed a third-party charge to secure her son-in-law Tommy's trading account losses with American Express Bank.
- Tommy incurred substantial debts to American Express Bank through foreign exchange transactions and loans.
- Tommy was a remunerated referral agent for American Express Bank, recommending Susilawati as a client.
- American Express Bank did not obtain Susilawati's written acknowledgement of the referral arrangement.
- Susilawati challenged the charge after Tommy defaulted, and her daughter's marriage to Tommy fell apart.
- Tommy’s personal liabilities to the respondent ballooned to US$17.4 million.
- American Express Bank set off US$17,560,390.98 from Susilawati's account to cover Tommy's liabilities.
5. Formal Citations
- Susilawati v American Express Bank Ltd, CA 140/2007, [2009] SGCA 8
- Susilawati v American Express Bank Ltd, , [2008] 1 SLR 237
6. Timeline
| Date | Event |
|---|---|
| Account opened by the appellant | |
| Appellant executed the Third Party Liabilities Charge | |
| Tommy incurred substantial debts to the respondent between 1998 and 2005 | |
| Appellant's husband passed away | |
| Tommy defaulted and ran into problems servicing his loans in the later half of 2005 | |
| Tommy’s personal liabilities to the respondent ballooned to US$17.4 million | |
| Email discovered to the appellant’s solicitors | |
| High Court’s judgment | |
| Court of Appeal dismissed all three applications as well as the appeal |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court did not make a finding on whether Tommy, in fact, owed the appellant any fiduciary duties and, if so, the extent of these duties.
- Category: Substantive
- Sub-Issues:
- Failure to make full disclosure
- Conflict of interest
- Failure to obtain informed consent
- Related Cases:
- [1967] 2 AC 46
- [1987] 2 SCR 99
- [1994] 3 SCR 377
- (1984) 156 CLR 41
- Undue Influence
- Outcome: The trial judge dismissed the appellant’s claim with costs, holding that the appellant had failed to show that she had reposed such a degree of trust and confidence in Tommy that could justify the inference that the Charge was executed whilst under his undue influence.
- Category: Substantive
- Admissibility of New Evidence on Appeal
- Outcome: The court refused to allow the new point to be raised and argued in this appeal.
- Category: Procedural
- Sub-Issues:
- Reasonable diligence in obtaining evidence
- Impact of non-disclosure
- Interests of justice
- Related Cases:
- [1954] 1 WLR 1489
- [1991] SLR 225
- [1992] 2 SLR 349
- [2006] 2 SLR 637
- [2006] 3 SLR 551
- [2007] 3 SLR 673
- [2005] ACTCA 36
- [1995] 4 MLJ 564
- (1991) 178 CLR 134
- (1890) 15 LR App Cas 223
- [1934] MLJ 184
- [2002] 2 SLR 1
- [2005] 4 SLR 234
- [2006] 4 SLR 571
- [1920] AC 254
- [2003] 3 SLR 556
- (1988) 17 NSWLR 71
- [1996] 1 VR 594
- [1970] 1 MLJ 233
- [1967] 1 MLJ 163
- Banking Secrecy
- Outcome: The court clarified that the current statutory regime on banking secrecy leaves no room for the four general common law exceptions expounded in Tournier to co-exist.
- Category: Substantive
- Related Cases:
- [1924] 1 KB 461
8. Remedies Sought
- Recovery of US$17,500,605
9. Cause of Actions
- Breach of Fiduciary Duty
- Undue Influence
10. Practice Areas
- Commercial Litigation
- Appeals
- Banking Litigation
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Susilawati v American Express Bank Ltd | High Court | Yes | [2008] 1 SLR 237 | Singapore | Summarized the essential background facts of the case. |
| Ladd v Marshall | Not Available | Yes | [1954] 1 WLR 1489 | England and Wales | Cited for the relevant principles applicable when an appellate court is asked to hear new evidence, and also upon which a new trial may be ordered. |
| Chong Joon Wah v Tan Lye Thiang | Not Available | Yes | [1991] SLR 225 | Singapore | Cited as conceptually similar to those applicable when an appellate court is asked to hear new evidence. |
| Cheong Kim Hock v Lin Securities (Pte) | Not Available | Yes | [1992] 2 SLR 349 | Singapore | Cited for the relevant principles applicable when an appellate court is asked to hear new evidence, and also upon which a new trial may be ordered. |
| Cheng-Wong Mei Ling Theresa v Oei Hong Leong | Not Available | Yes | [2006] 2 SLR 637 | Singapore | Cited for the relevant principles applicable when an appellate court is asked to hear new evidence, and also upon which a new trial may be ordered. |
| Sim Cheng Soon v BT Engineering Pte Ltd | Not Available | Yes | [2006] 3 SLR 551 | Singapore | Cited for the relevant principles applicable when an appellate court is asked to hear new evidence, and also upon which a new trial may be ordered. |
| Su Sh-Hsyu v Wee Yue Chew | Not Available | Yes | [2007] 3 SLR 673 | Singapore | Cited for the relevant principles applicable when an appellate court is asked to hear new evidence, and also upon which a new trial may be ordered. |
| Dickson v Telstra Corporation Ltd | Supreme Court of the Australian Capital Territory | Yes | [2005] ACTCA 36 | Australia | Counsel for the appellant relied on the case for the interpretation of the term “reasonable diligence”. |
| Re Lim Hong Kee David | High Court | Yes | [1995] 4 MLJ 564 | Malaysia | Counsel for the respondent cited the case, which had explained “diligence”. |
| Commonwealth Bank of Australia v Quade | High Court of Australia | Yes | (1991) 178 CLR 134 | Australia | The court considered the appropriate approach to be adopted by an appellate court in determining whether a new trial should be ordered when documents which should have been discovered were not disclosed by the successful party. |
| Phipps v Boardman | Not Available | Yes | [1967] 2 AC 46 | England and Wales | Cited for the observation that the facts and circumstances must be carefully examined to see whether in fact a purported agent and even a confidential agent is in a fiduciary relationship to his principal. |
| Frame v Smith | Not Available | Yes | [1987] 2 SCR 99 | Canada | Cited for identifying the common features of a fiduciary relationship. |
| Hodgkinson v Simms | Not Available | Yes | [1994] 3 SCR 377 | Canada | Wilson J’s summary was accepted in the case. |
| Hospital Products Ltd v United States Surgical Corporation | High Court of Australia | Yes | (1984) 156 CLR 41 | Australia | Mason J’s analysis was accepted and followed by G P Selvam J in Kumagai-Zenecon Construction Pte Ltd v Low Hua Kin [2000] 2 SLR 501 at [15], and this court also found it of assistance in Friis v Casetech Trading Pte Ltd [2000] 3 SLR 590 at [29]. |
| Kumagai-Zenecon Construction Pte Ltd v Low Hua Kin | Not Available | Yes | [2000] 2 SLR 501 | Singapore | Mason J’s analysis in Hospital Products was accepted and followed by G P Selvam J in the case. |
| Friis v Casetech Trading Pte Ltd | Not Available | Yes | [2000] 3 SLR 590 | Singapore | This court also found it of assistance in the case. |
| The Owners of the Ship “Tasmania” and the Owners of the Freight v Smith and others, The Owners of the Ship “City of Corinth”, The Tasmania | House of Lords | Yes | (1890) 15 LR App Cas 223 | United Kingdom | Arguably the most frequently cited (and authoritative) rendition of the principle governing the introduction of a new point of law on appeal. |
| Attorney-General for the Straits Settlement v Pang Ah Yew | Not Available | Yes | [1934] MLJ 184 | Singapore | Cited for the principle governing the introduction of a new point of law on appeal. |
| MCST No 473 v De Beers Jewellery Pte Ltd | Not Available | Yes | [2002] 2 SLR 1 | Singapore | Cited for the principle governing the introduction of a new point of law on appeal. |
| Riduan bin Yusof v Khng Thian Huat (No 2) | Not Available | Yes | [2005] 4 SLR 234 | Singapore | Cited for the principle governing the introduction of a new point of law on appeal. |
| Panwah Steel Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd | Not Available | Yes | [2006] 4 SLR 571 | Singapore | Cited for the principle governing the introduction of a new point of law on appeal. |
| North Staffordshire Railway Company v Edge | Not Available | Yes | [1920] AC 254 | England and Wales | Cited for the caveat that there are very few cases of which it can be confidently stated that a failure to raise a relevant contention at the appropriate stage will not prejudice the other litigant. |
| Feoso (Singapore) Pte Ltd v Faith Maritime Company Limited | Not Available | Yes | [2003] 3 SLR 556 | Singapore | Part of the preceding passage has been cited with approval by this court in the case. |
| Holcombe v Coulton | Not Available | Yes | (1988) 17 NSWLR 71 | Australia | Cited for the argument that it would be in the interests of justice for the new point to be heard. |
| Geelong Building Society v Encel | Supreme Court of Victoria | Yes | [1996] 1 VR 594 | Australia | Cited for the observation that an abstract notion that an appellant should receive justice, though undoubtedly one of them, will not be accorded undue weight at the expense of other considerations which are entitled to be accorded their own due weight, including a respondent's expectation also to receive justice. |
| Rengasamy Pillai v Comptroller of Income Tax | Privy Council | Yes | [1970] 1 MLJ 233 | Not Available | The courts will not and should not, for obvious reasons, allow the main arena for the resolution of evidential disputes to be moved from the trial court to the appellate court; to do so would fundamentally alter the limited role of appellate review. |
| Hoong Chin Wah v Cheah Kum Swee | Not Available | Yes | [1967] 1 MLJ 163 | Not Available | The courts will not and should not, for obvious reasons, allow the main arena for the resolution of evidential disputes to be moved from the trial court to the appellate court; to do so would fundamentally alter the limited role of appellate review. |
| Asia Business Forum Pte Ltd v Long Ai Sin | Not Available | Yes | [2004] 2 SLR 173 | Singapore | Cited for the power to grant leave to a party to amend his pleadings at any time under s 37(2) of the SCJA and O 57 r 13(1) of the ROC. |
| Ketteman v Hansel Properties Ltd | Not Available | Yes | [1987] AC 189 | England and Wales | Summarized the applicable principles as follows: First, all such amendments should be made as are necessary to enable the real questions in controversy between the parties to be decided. Secondly, amendments should not be refused solely because they have been made necessary by the honest fault or mistake of the party applying for leave to make them: it is not the function of the court to punish parties for mistakes which they have made in the conduct of their cases by deciding otherwise than in accordance with their rights. Thirdly, however blameworthy (short of bad faith) may have been a party’s failure to plead the subject matter of a proposed amendment earlier, and however late the application for leave to make such amendment may have been, the application should, in general, be allowed, provided that allowing it will not prejudice the other party. Fourthly, there is no injustice to the other party if he can be compensated by appropriate orders as to costs. |
| Chwee Kin Keong v Digilandmall.com Pte Ltd | High Court | Yes | [2004] 2 SLR 594 | Singapore | The High Court summed up the procedural equation. |
| Tournier v National Provincial Bank and Union Bank of England | English Court of Appeal | Yes | [1924] 1 KB 461 | England and Wales | The English Court of Appeal held that a banker came under an implied duty to keep the affairs of a customer confidential, subject to four general exceptions (at 473) under which disclosure could be made by the bank. |
13. Applicable Rules
| Rule Name |
|---|
| Order 57 r 13(1) of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Section 47 Banking Act (Cap 19, 2003 Rev Ed) | Singapore |
| Order 57 r 13(4) of the Rules of Court | Singapore |
| Section 39(2) of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Third-party charge
- Referral agreement
- Fiduciary duty
- Undue influence
- Banking secrecy
- Informed consent
- Reasonable diligence
- New trial
- Amendment of pleadings
15.2 Keywords
- Agency
- Fiduciary duties
- Banking secrecy
- Undue influence
- Referral agreement
- New trial
- Amendment of pleadings
- Conflict of interest
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Fiduciary Duties | 80 |
| Agency Law | 75 |
| Banking Law | 70 |
| Civil Procedure | 60 |
| Contract Law | 50 |
| Evidence | 40 |
| Arbitration | 20 |
16. Subjects
- Agency
- Banking
- Civil Procedure
- Fiduciary Duty
- Appeals
- Disclosure of Documents