Hsu Ann Mei Amy v Oversea-Chinese Banking Corp Ltd: Bank's Duty to Customer, Mental Capacity, Undue Influence

Hsu Ann Mei Amy, as the litigation representative of Mdm Hwang Cheng Tsu Hsu, appealed against the High Court's decision dismissing Mdm Hwang's claim against Oversea-Chinese Banking Corporation Limited (OCBC) for breaching its duties by refusing to carry out her instructions to open a joint account and close her existing accounts. The Court of Appeal dismissed the substantive appeal, finding that OCBC acted reasonably given concerns about Mdm Hwang's mental capacity and potential undue influence. However, the court allowed the appeal on costs, setting aside the order that Amy should pay costs personally, and ordered that OCBC's costs be paid by Mdm Hwang's estate.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal dismissed in part and allowed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding a bank's duty to a customer. The court affirmed the decision that the bank acted reasonably in questioning the customer's instructions.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Hsu Ann Mei Amy (personal representative of the estate of Hwang Cheng Tsu Hsu, deceased)AppellantIndividualAppeal dismissed in part and allowed in partPartialMichael Khoo, Josephine Low, Andrew Ee Chong Nam
Oversea-Chinese Banking Corp LtdRespondentCorporationAppeal partially dismissedPartialAdrian Wong Soon Peng, Jansen Chow, Nelson Goh

3. Judges

Judge NameTitleDelivered Judgment
Chan Sek KeongChief JusticeYes
Andrew Phang Boon LeongJustice of the Court of AppealNo
V K RajahJustice of the Court of AppealNo

4. Counsels

Counsel NameOrganization
Michael KhooMichael Khoo & Partners
Josephine LowMichael Khoo & Partners
Andrew Ee Chong NamAndrew Ee & Co
Adrian Wong Soon PengRajah & Tann LLP
Jansen ChowRajah & Tann LLP
Nelson GohRajah & Tann LLP

4. Facts

  1. Mdm Hwang had Singapore dollar deposits with OCBC in excess of $8 million.
  2. Mdm Hwang instructed OCBC to open a joint account with Amy and transfer all her deposits into it.
  3. OCBC officers were concerned that Mdm Hwang might not fully understand the legal consequences of her instructions.
  4. Amy told OCBC that Mdm Hwang would close all her accounts due to OCBC's failure to open the joint account.
  5. OCBC officers observed that Mdm Hwang appeared dazed and Amy gave instructions forcefully.
  6. Mdm Hwang denied wanting to open a joint account during a home visit by OCBC officers.
  7. OCBC officers questioned Mdm Hwang and doubted if the instructions were emanating from her.

5. Formal Citations

  1. Hsu Ann Mei Amy (personal representative of the estate of Hwang Cheng Tsu Hsu, deceased) v Oversea-Chinese Banking Corp Ltd, Civil Appeal No 100 of 2010, [2011] SGCA 3
  2. Hwang Cheng Tsu Hsu (by her litigation representative Hsu Ann Mei Amy) v Oversea-Chinese Banking Corp Ltd, , [2010] 4 SLR 47
  3. Hwang Cheng Tsu Hsu (by her litigation representative Hsu Ann Mei Amy) v Oversea-Chinese Banking Corp Ltd, , [2010] SGHC 160

6. Timeline

DateEvent
Mdm Hwang adopted Amy as her daughter.
Mdm Hwang executed a will.
Mdm Hwang's will was altered by a codicil.
Amy moved into her own home.
Mdm Hwang fractured her hip.
Amy requested Dr. Teo to certify Mdm Hwang's testamentary capacity.
Mdm Hwang executed a new will.
Dr. Lim examined Mdm Hwang.
Dr. Kang examined Mdm Hwang.
Mdm Hwang's will was altered by two codicils.
Dr. Lim examined Mdm Hwang again.
Amy accompanied Mdm Hwang to OCBC to open a Joint Account.
Sar Lee and Chua visited Mdm Hwang at her home.
Amy called Chua about the Joint Account.
Mdm Hwang and Amy met with OCBC officers.
Ee sent a letter to OCBC demanding an apology.
Power of Attorney purportedly executed by Mdm Hwang.
Ee sent a letter stating he was authorized to write on Mdm Hwang's behalf.
Ee replied to OCBC, enclosing a letter dated 6 June 2008.
Letter purportedly written by Mdm Hwang appointing Amy as her agent.
OCBC replied to Ee.
OCBC received a letter dated 16 June 2008.
OCBC replied that it could not accept the 16 June letter.
Mdm Hwang signed a letter before a notary public.
Ee wrote to OCBC enclosing a letter dated 20 June 2008.
OCBC replied to Mdm Hwang.
Ee rejected the request for a face-to-face meeting.
Ee wrote to OCBC's solicitors stating Mdm Hwang would meet OCBC.
OCBC informed Ee that its officers and legal counsel would attend the meeting.
Ee served a writ of summons on OCBC's solicitors.
OCBC's solicitors informed Ee that the meeting was no longer necessary.
OCBC filed its defence.
Reports of Dr. Lim and Dr. Kang were served on OCBC.
A letter in Mdm Hwang's handwriting was sent to OCBC's solicitors.
Mdm Hwang's application for summary judgment was heard.
Dr. Francis Ngui was appointed as the court expert.
Mdm Hwang's appeal was dismissed by a High Court judge.
Dr. Ngui examined Mdm Hwang.
Order of Court dated 26 March 2009.
OCBC paid the balance sum of Mdm Hwang's deposits into court.
Dr. Ngui's report was dated.
Amy was appointed as Mdm Hwang's litigation representative.
Trial began.
Mdm Hwang died.
Judge delivered judgment.
Probate of the 2008 Will was granted to Amy.
Court of Appeal affirmed the Judge's decision.

7. Legal Issues

  1. Bank's duty to customer
    • Outcome: The court held that the bank acted reasonably in not carrying out the customer's instructions due to concerns about her mental capacity and potential undue influence.
    • Category: Substantive
    • Sub-Issues:
      • Reasonable care
      • Compliance with mandate
    • Related Cases:
      • [1996] 2 SLR(R) 774
      • [1968] 2 Lloyd’s Rep 289
      • [1989] 1 WLR 1340
      • [1992] 4 All ER 363
  2. Mental capacity
    • Outcome: The court did not make a definitive finding on Mdm Hwang's mental capacity but indicated that she was likely competent to manage her financial affairs.
    • Category: Substantive
    • Sub-Issues:
      • Testamentary capacity
      • Cognitive ability
  3. Undue influence
    • Outcome: The court suggested that the facts pointed to a case of undue influence, although this was not pleaded as a defense.
    • Category: Substantive
  4. Costs
    • Outcome: The court set aside the order that Amy, as litigation representative, should pay costs personally.
    • Category: Procedural
    • Sub-Issues:
      • Liability for costs
      • Indemnity from estate
    • Related Cases:
      • [1910] 1 KB 215
      • [1984] 1 WLR 320

8. Remedies Sought

  1. Damages

9. Cause of Actions

  • Breach of contract
  • Failure to carry out customer's instructions

10. Practice Areas

  • Commercial Litigation
  • Banking Litigation

11. Industries

  • Banking
  • Financial Services

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Yogambikai Nagarajah v Indian Overseas BankUnknownYes[1996] 2 SLR(R) 774SingaporeCited for the principle that a bank's duty to comply with a customer's mandate is subject to the bank's duty to take reasonable care.
Selangor United Rubber Estates Ltd v Cradock (No 3)UnknownYes[1968] 2 Lloyd’s Rep 289England and WalesCited in Yogambikai Nagarajah v Indian Overseas Bank for the principle that a bank's duty to comply with a customer's mandate is subject to the bank's duty to take reasonable care.
Lipkin Gorman v Karpnale LtdUnknownYes[1989] 1 WLR 1340England and WalesCited for the principle that a bank's duty to comply with a customer's mandate is subject to the bank's duty to take reasonable care.
Barclays Bank plc v Quincecare LtdUnknownYes[1992] 4 All ER 363England and WalesCited for the principle that a bank may be liable if it fails to comply with a client's instructions under circumstances where a reasonably prudent bank would have been put on notice.
Lipkin Gorman v Karpnale LtdUnknownYes[1987] 1 WLR 987England and WalesCited in Barclays Bank plc v Quincecare Ltd for the principle that a bank may be liable if it fails to comply with a client's instructions under circumstances where a reasonably prudent bank would have been put on notice.
Yonge v ToynbeeUnknownNo[1910] 1 KB 215England and WalesCited regarding the liability for costs when legal proceedings are brought by an agent on behalf of a principal who subsequently becomes mentally incapacitated.
In re E (Mental Health Patient)UnknownNo[1984] 1 WLR 320England and WalesCited regarding costs order for litigation representative.

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

  • Bank's duty of care
  • Customer's mandate
  • Mental capacity
  • Undue influence
  • Joint account
  • Litigation representative
  • Testamentary capacity
  • Financial abuse
  • Red flags

15.2 Keywords

  • banking
  • duty of care
  • mental capacity
  • undue influence
  • OCBC
  • Singapore
  • contract law

16. Subjects

  • Banking
  • Contract Law
  • Agency
  • Financial Elder Abuse

17. Areas of Law

  • Banking Law
  • Contract Law
  • Civil Procedure
  • Agency Law