United States Trading Co v Philips Electronics: Fraud, Ostensible Authority & Vicarious Liability

In United States Trading Co Pte Ltd v Philips Electronics Singapore Pte Ltd, the Singapore High Court addressed a claim by United States Trading Co against Philips Electronics for losses incurred due to a fraud perpetrated by a Philips employee, Jason Ting. United States Trading Co claimed against Philips in contract based on ostensible or implied authority, vicarious liability, and negligence. The court dismissed the plaintiff's claims, finding that Ting lacked the authority to enter into the loan agreement and that Philips was not vicariously liable or negligent.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

The plaintiff’s claims are dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case involving a fraud by an employee of Philips, resulting in losses for United States Trading Co. The court addressed issues of ostensible authority, vicarious liability, and negligence.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
United States Trading Co Pte LtdPlaintiffCorporationClaim DismissedLostRagbir Singh s/o Ram Singh Bajwa, Malathi Raju
Philips Electronics Singapore Pte LtdDefendantCorporationJudgment for DefendantWonOng Boon Hwee William, Sathiaseelan s/o Jagateesan, Ramesh Kumar

3. Judges

Judge NameTitleDelivered Judgment
Lee Seiu KinJudgeYes

4. Counsels

Counsel NameOrganization
Ragbir Singh s/o Ram Singh BajwaBajwa & Co
Malathi RajuBajwa & Co
Ong Boon Hwee WilliamAllen & Gledhill LLP
Sathiaseelan s/o JagateesanAllen & Gledhill LLP
Ramesh KumarAllen & Gledhill LLP

4. Facts

  1. Jason Ting, an employee of Philips, defrauded United States Trading Co of US$360,000.
  2. Ting requested quotes from the plaintiff for the supply of aluminium.
  3. Ting proposed that the plaintiff fund the purchase of aluminium for Philips, with repayment via inflated prices.
  4. The plaintiff issued a cheque for US$360,000 payable to "Philips CoC Singapore".
  5. Ting registered a business partnership under the name of "Philips CoC Singapore".
  6. Ting sent Ross a Letter of Acceptance of Loan and a Letter of Indemnity, with forged signatures.
  7. Philips' employees were unaware of Ting's fraudulent actions.

5. Formal Citations

  1. United States Trading Co Pte Ltd v Philips Electronics Singapore Pte Ltd, Suit No 141 of 2009, [2010] SGHC 194

6. Timeline

DateEvent
Ting sent an email to the plaintiff requesting quotes for the supply of aluminium.
Ting agreed by telephone to purchase 1,500MT at US$2,580/MT.
Conversation between Ross and Ting regarding call option.
Ting emailed Ross pressuring him for payment of the advance.
Ross sent a draft of the Letter of Indemnity for comments.
Ross handed Ting a cheque made payable to PCS in the sum of US$360,000.
Ting sent to Ross a “Letter of Acceptance of Loan”.
PO no 3200166552-59 dated 21 September 2006 in which the price was inflated from the contracted amount of US$2,564/MT to US$2,850/MT.
Cheque was drawn down.
Ross received from Ting a document entitled “Letter of Indemnity” on the defendant’s letterhead.
Ting placed three further orders totalling 1,880MT for delivery in the first half of 2007.
Letter of Indemnity stated that the defendant guaranteed the repayment of the entire sum plus interest no later than 31 January 2007.
Ross received an email from Tan Eng Huat advising that Ting was leaving the defendant’s employment.
Ross discovered that PCS was a partnership registered by Ting and his brother.
Ross met with Tan and Karl Tilkorn.
Tilkorn made a police report.
Decision Date

7. Legal Issues

  1. Ostensible Authority
    • Outcome: The court held that Ting did not have ostensible authority to enter into the loan agreement on behalf of Philips.
    • Category: Substantive
    • Sub-Issues:
      • Implied representation by principal
      • Course of dealing
  2. Vicarious Liability
    • Outcome: The court held that Philips was not vicariously liable for Ting's fraudulent scheme.
    • Category: Substantive
    • Sub-Issues:
      • Acting in the course of employment
      • Scope of authority
  3. Negligence
    • Outcome: The court held that Philips was not negligent in failing to properly supervise Ting.
    • Category: Substantive
    • Sub-Issues:
      • Failure to supervise employee
      • Duty of care
  4. Estoppel
    • Outcome: The court held that the plaintiff did not prove that it had altered its position to its detriment.
    • Category: Substantive
    • Sub-Issues:
      • Representation
      • Detrimental reliance

8. Remedies Sought

  1. Monetary Damages
  2. Interest

9. Cause of Actions

  • Breach of Contract
  • Deceit
  • Negligence

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Electronics
  • Trading

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Hely-Hutchinson v Brayhead Ltd and anotherN/AYes[1968] 1 QB 549N/ACited to explain the distinction between actual authority, implied authority, and ostensible or apparent authority.
British Thomson-Houston Co. Ltd. v. Federated European Bank LtdN/AYes[1932] 2 KB 176N/ACited as an example of ostensible authority exceeding actual authority.
Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd and another and another suitN/AYes[2009] 4 SLR(R) 788SingaporeCited to distinguish between genuine apparent authority and artificial apparent authority.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Ostensible authority
  • Vicarious liability
  • Letter of Indemnity
  • Philips CoC Singapore
  • Inflated PO
  • Call option
  • Purchasing manager

15.2 Keywords

  • fraud
  • ostensible authority
  • vicarious liability
  • negligence
  • contract
  • agency

16. Subjects

  • Fraud
  • Agency
  • Contract
  • Employment Law

17. Areas of Law

  • Contract Law
  • Agency Law
  • Tort Law
  • Fraud
  • Negligence
  • Estoppel