Intrading Ltd v Australia and New Zealand Banking Group Ltd: Breach of Loan Facility Agreement
Intrading Ltd commenced a suit against Australia and New Zealand Banking Group Ltd in the High Court of Singapore, alleging breaches of a loan facility extended by the bank to Intrading. The case was heard by Woo Bih Li J, who dismissed Intrading's claim with costs on 24 October 2013. The plaintiff's claim was based on an alleged breach of duty to inform the plaintiff if the loan-to-security ratio (LVR) exceeded 75% and a failure to act on the plaintiff’s instructions in respect of currency conversions. The court found that the bank was not under a duty to inform the plaintiff if the LVR exceeded 75% or to execute currency conversions at the plaintiff's desired rate.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiff's claim dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Intrading Ltd sued Australia and New Zealand Banking Group Ltd for breaches of a loan facility. The High Court dismissed Intrading's claim with costs.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Intrading Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | John Wang, Chong Li Lian |
| Australia and New Zealand Banking Group Ltd | Defendant | Corporation | Judgment for Defendant | Won | Chou Sean Yu, Edwin Cheng, Lim Shiqi |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Woo Bih Li | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| John Wang | RHTLaw Taylor Wessing LLP |
| Chong Li Lian | RHTLaw Taylor Wessing LLP |
| Chou Sean Yu | WongPartnership LLP |
| Edwin Cheng | WongPartnership LLP |
| Lim Shiqi | WongPartnership LLP |
4. Facts
- Intrading Ltd obtained a Multi-Currency Residential Property Loan Facility from Australia and New Zealand Banking Group Ltd.
- The loan facility was for AUD2,032,500 to finance the purchase of five residential properties in Perth, Western Australia.
- The facility letter was accepted by Intrading Ltd on 30 May 2008.
- The loan amount was drawn down in Australian dollars on 16 July 2008.
- The facility allowed Intrading to convert the loan amount into AUD, USD, SGD, EUR, or JPY.
- The initial loan to security ratio (LVR) was set at 75%.
- The LVR could change due to fluctuations in property values or foreign exchange rates.
- Intrading alleged that the bank had a duty to inform it when the LVR exceeded 75%.
5. Formal Citations
- Intrading Ltd v Australia and New Zealand Banking Group Ltd, Suit No 573 of 2011/R, [2013] SGHC 219
6. Timeline
| Date | Event |
|---|---|
| Facility Letter issued by the defendant | |
| Facility Letter accepted by the plaintiff | |
| Loan amount drawn down in Australian dollars | |
| AUD1,032,500 of the loan amount converted to USD980,554.60 | |
| AUD1,000,000 of the loan amount converted to JPY102,176,00 | |
| Second Deposit of AUD50,000 made by the plaintiff | |
| Written notice sent by defendant to plaintiff regarding LVR (disputed) | |
| Email sent by Loh to Jayes regarding LVR | |
| Third Deposit of AUD500,000 made by the plaintiff | |
| USD980,554.60 of the loan amount converted to JPY102,384,545 | |
| Plaintiff alleges LVR exceeded 75% | |
| Email sent by Crispe to Jayes regarding LVR (disputed) | |
| Defendant erroneously used the First Deposit and Second Deposit as partial security for the loan | |
| JPY100,000,000 of the loan amount converted to AUD1,452,137.55 | |
| Plaintiff left a signed fax instruction with the defendant to convert the loan amount then denominated in JPY to AUD at the spot level of 68.50 | |
| Email sent by Crispe to Jayes regarding LVR (disputed) | |
| Written notice sent by defendant to plaintiff regarding LVR (disputed) | |
| JPY104,560,545 of the loan amount converted to AUD1,734,840.06 | |
| Email sent by Crispe to Jayes regarding LVR | |
| Suit No 573 of 2011/R commenced by the plaintiff | |
| Judgment issued |
7. Legal Issues
- Breach of Contract
- Outcome: The court found no breach of contract.
- Category: Substantive
- Sub-Issues:
- Implied terms
- Estoppel by convention
- Duty to Inform
- Outcome: The court held that the defendant was not under a duty to inform the plaintiff if the LVR exceeded 75%.
- Category: Substantive
- Currency Conversion
- Outcome: The court held that the defendant was not under a duty to execute a currency conversion at the plaintiff's desired rate.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Banking Litigation
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| The Moorcock | N/A | Yes | (1889) 14 PD 64 | N/A | Cited for the business efficacy test for implying terms into a contract. |
| Shirlaw v Southern Foundaries (1926) Limited | N/A | Yes | [1939] 2 KB 206 | N/A | Cited for the 'officious bystander' test for implying terms into a contract. |
| Forefront Medical Technology (Pte) Ltd v Modern-Pak Pte Ltd | N/A | Yes | [2006] 1 SLR(R) 927 | Singapore | Cited for the application of the business efficacy and officious bystander tests in Singapore law. |
| Reigate v Union Manufacturing Company (Ramsbottom), Limited and Elton Copdyeing Company, Limited | N/A | Yes | [1918] 1 KB 592 | N/A | Cited for the relationship between the business efficacy and officious bystander tests. |
| Foo Jong Peng and others v Phua Kiah Mai and another | Court of Appeal | Yes | [2012] 4 SLR 1267 | Singapore | Cited for the complementary relationship between the business efficacy and officious bystander tests and the court's role in ascertaining the presumed intention of contracting parties. |
| Ng Giap Hon v Westcombe Securities | Court of Appeal | Yes | [2009] 3 SLR(R) 518 | Singapore | Cited for the principles on implying terms into a contract. |
| Young & Marten v McManus Childs Ltd | N/A | Yes | [1969] 1 AC 454 | N/A | Cited for the principle that an implied term must be reasonable and equitable. |
| Edwards Jason Glenn v Australia and New Zealand Banking Group Ltd | High Court | Yes | [2012] SGHC 61 | Singapore | Cited for the interpretation of a loan facility provision regarding foreign exchange risk. |
| MAE Engineering Ltd v Fire-Stop Marketing Services Pte Ltd | Court of Appeal | Yes | [2005] 1 SLR(R) 379 | Singapore | Cited for the explanation of the doctrine of estoppel by convention. |
| Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd | N/A | Yes | [1982] QB 84 | N/A | Cited as the locus classicus on the doctrine of estoppel by convention. |
| Singapore Island Country Club v Hilborne | N/A | Yes | [1996] 3 SLR(R) 418 | Singapore | Cited for the requirements for an estoppel based on convention to arise. |
| Travista Development Pte Ltd v Tan Kim Swee Augustine and others | N/A | Yes | [2008] 2 SLR(R) 474 | Singapore | Cited for the principle that estoppel by convention can arise where the assumption was made by one party and acquiesced to by the other. |
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
- Loan to security ratio
- LVR
- Currency Switch Option
- Facility Letter
- Clawback condition
- Best endeavours basis
- Advance orders
15.2 Keywords
- Loan facility
- Breach of contract
- Currency conversion
- Loan to security ratio
- LVR
- Banking
- Singapore
- High Court
16. Subjects
- Banking
- Contract Law
- Loan Facilities
- Financial Services
17. Areas of Law
- Banking Law
- Contract Law
- Civil Procedure