Go Dante Yap v Bank Austria: Investment Losses & Bank's Duty of Care
In Go Dante Yap v Bank Austria Creditanstalt AG, the High Court of Singapore heard a case brought by Go Dante Yap against Bank Austria Creditanstalt AG, concerning losses suffered on his investment portfolio following the Asian financial crisis of 1997 and 1998. Yap claimed that a total of 16 investments purchased under his Singapore account and the loans drawn down from his Hong Kong account to finance those investments were not authorized by him. Alternatively, he claimed that even if authorized, the bank breached its duty by failing to advise him against maintaining his portfolio during the crisis. The court, presided over by Andrew Ang J, dismissed Yap's action, finding that the investments were authorized and that the bank owed no duty to provide ongoing investment advice.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiff's action dismissed with costs to be taxed unless agreed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Plaintiff sues Bank Austria for investment losses after the Asian financial crisis, alleging unauthorized investments and breach of advisory duty. Court dismisses the action.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Go Dante Yap | Plaintiff | Individual | Claim Dismissed | Lost | Kannan Ramesh, Ng Ka Luon Eddee, See Chern Yang, Poon Ho Yen Claudia |
| Bank Austria Creditanstalt AG | Defendant | Corporation | Judgment for Defendant | Won | Christopher Anand Daniel, Nicholas Jayaraj s/o Narayanan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Ang | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Kannan Ramesh | Tan Kok Quan Partnership |
| Ng Ka Luon Eddee | Tan Kok Quan Partnership |
| See Chern Yang | Tan Kok Quan Partnership |
| Poon Ho Yen Claudia | Tan Kok Quan Partnership |
| Christopher Anand Daniel | Advocatus Law LLP |
| Nicholas Jayaraj s/o Narayanan | Advocatus Law LLP |
4. Facts
- Plaintiff opened two investment accounts with the defendant in June 1997.
- A credit facility of up to US$5m was granted to the plaintiff via the Hong Kong account.
- Investments in emerging markets debt instruments were acquired under the Singapore account.
- Some investments were financed using loans drawn from the Hong Kong account.
- The Asian financial crisis caused the value of some investments to drop drastically.
- Plaintiff claimed 16 investments were unauthorized.
- Plaintiff participated in restructuring talks with the Bakrie Group.
- Plaintiff repaid part of the loans in November 1997.
5. Formal Citations
- Go Dante Yap v Bank Austria Creditanstalt AG, Suit No 424 of 2003, [2010] SGHC 220
- Go Dante Yap v Bank Austria Creditanstalt AG, Civil Appeal No 156 of 2010, [2011] SGCA 39
6. Timeline
| Date | Event |
|---|---|
| Plaintiff heard rumors of an impending Asian financial crisis. | |
| Plaintiff opened two investment accounts with the defendant. | |
| Acquisition of Indonesian notes under the Singapore account. | |
| Plaintiff remitted funds into the Singapore account. | |
| Purchase of Rossiyskiy Notes. | |
| Plaintiff remitted funds into the Singapore account. | |
| Plaintiff met with Giles and Ms. Ching to discuss Bakrie Group's debt-restructuring exercise. | |
| Plaintiff signed a letter to the Bakrie Group advising them that he was the beneficial owner of the Bakrie Notes. | |
| Plaintiff met with Aburizal Bakrie to discuss the restructuring proposal. | |
| Plaintiff raised concerns about investments not being within the conservative investment mandate. | |
| Plaintiff wrote to the defendant regarding the settlement of the Rossiyskiy Notes. | |
| Defendant ceased operations in Asia. | |
| Plaintiff commenced action against the defendant. | |
| Plaintiff granted leave to serve the writ of summons out of jurisdiction. | |
| Defendant was served with the writ of summons. | |
| First tranche of trial commenced. | |
| Second tranche of trial commenced. | |
| Third tranche of trial commenced. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Contract
- Outcome: The court found no contractual duty on the defendant to continue providing investment advice.
- Category: Substantive
- Sub-Issues:
- Implied duty to advise
- Breach of investment mandate
- Negligence
- Outcome: The court found that the defendant owed no duty of care in tort to give investment advice to the plaintiff.
- Category: Substantive
- Sub-Issues:
- Duty of care
- Voluntary assumption of responsibility
- Reliance on advice
- Authorization of Investments
- Outcome: The court concluded that the investments acquired in the plaintiff's Singapore account were properly authorized.
- Category: Substantive
- Sub-Issues:
- Unauthorised investments
- Conservative investment mandate
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Negligence
10. Practice Areas
- Commercial Litigation
- Banking Litigation
- Financial Services Litigation
11. Industries
- Finance
- Banking
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Customs and Excise Commissioners v Barclays Bank plc | House of Lords | Yes | [2007] 1 AC 181 | England | Cited for the principle of developing lower-level principles in determining duty of care. |
| Henderson v Merrett Syndicates Ltd | N/A | Yes | [1995] 2 AC 145 | England | Cited for the principle that a tortious duty of care can exist concurrently with an existing contractual duty. |
| Hedley Byrne & Co Ltd v Heller & Partners Ltd | N/A | Yes | [1964] AC 465 | England | Cited for the principle that an assumption of responsibility coupled with reliance may give rise to a tortious duty of care. |
| JP Morgan Chase Bank v Springwell Navigation Corporation | English High Court | Yes | [2008] EWHC 1186 | England | Extensively cited for setting out the relevant legal principles and factors to consider in determining whether a private bank owes a duty to its clients to give investment advice. |
| Crédit Industriel et Commercial v Teo Wai Cheong | Singapore High Court | Yes | [2010] SGHC 155 | Singapore | Cited for approving the principles set out in JP Morgan Chase Bank v Springwell Navigation Corporation. |
| IFE Fund SA v Goldman Sachs International | Court of Appeal | Yes | [2007] 2 Lloyd’s Rep 449 | England | Cited as an example where a contractual term excluded the scope of any concurrent tortious duty. |
| Titan Steel Wheels Ltd v The Royal Bank of Scotland plc | N/A | Yes | [2010] EWHC 211 | England | Cited for the opinion that the scope of obligations owed by a bank to its client were fully defined in the contractual terms. |
| Surender Singh s/o Jagdish Singh v Li Man Kay | High Court | Yes | [2010] 1 SLR 428 | Singapore | Cited and distinguished regarding the burden of proof. |
| Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency | N/A | Yes | [2007] 4 SLR(R) 100 | Singapore | Cited for the test of proximity for establishing a prima facie duty of care in law. |
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
- Asian financial crisis
- Investment portfolio
- Private banking
- Emerging markets debt
- Unauthorized investments
- Duty of care
- Investment advice
- Conservative investment mandate
- Discretionary account
- Non-discretionary account
- Bakrie Notes
- Rossiyskiy Notes
15.2 Keywords
- investment losses
- financial crisis
- banking
- duty of care
- unauthorized investments
- Singapore
- High Court
16. Subjects
- Banking
- Investments
- Financial Law
- Contract Law
- Tort Law
17. Areas of Law
- Banking Law
- Contract Law
- Tort Law
- Financial Crisis
- Investment Law