Telemedia v Credit Agricole: Breach of Mandate & Duty of Care in Share Transfer Dispute

Telemedia Pacific Group Ltd sued Crédit Agricole (Suisse) SA for breach of mandate and duty of care, alleging unauthorized transfer of NexGen shares from Telemedia's account based on instructions from a third party, Yeh Mao-Yuan. Crédit Agricole sought indemnity from Yeh. The High Court of Singapore, presided over by George Wei JC, dismissed Telemedia's claim, finding that Yeh was authorized to operate the account and that Crédit Agricole was not in breach of its duties. The court also dismissed Crédit Agricole's third-party claim against Yeh.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Claim dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Telemedia sues Credit Agricole for unauthorized share transfer. Court finds Credit Agricole not liable, as Yeh was authorized. Claim dismissed.

1.7 Decision Date

17 November 2014

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Yeh Mao-Yuan	Third Party	Individual	Claim Dismissed	Won	Toh Wei Yi of Harry Elias Partnership LLP Hee Theng Fong of Harry Elias Partnership LLP Ong Po Qin of Harry Elias Partnership LLP
Telemedia Pacific Group Ltd	Plaintiff	Corporation	Claim Dismissed	Lost	N Sreenivasan of Straits Law Practice LLC Ramesh Bharani of Straits Law Practice LLC
Credit Agricole (Suisse) SA	Defendant	Corporation	Judgment for Defendant	Won	Gary Leonard Low of Drew & Napier LLC Terence Tan of Drew & Napier LLC Ng Sook Zhen of Drew & Napier LLC Benedict Teo Chun-Wei of Drew & Napier LLC

3. Judges

Judge Name	Title	Delivered Judgment
George Wei	Judicial Commissioner	Yes

4. Counsels

Counsel Name	Organization
Toh Wei Yi	Harry Elias Partnership LLP
Hee Theng Fong	Harry Elias Partnership LLP
Ong Po Qin	Harry Elias Partnership LLP
N Sreenivasan	Straits Law Practice LLC
Ramesh Bharani	Straits Law Practice LLC
Gary Leonard Low	Drew & Napier LLC
Terence Tan	Drew & Napier LLC
Ng Sook Zhen	Drew & Napier LLC
Benedict Teo Chun-Wei	Drew & Napier LLC

4. Facts

Telemedia held 225m NexGen shares in an account with Crédit Agricole.
The Telemedia Account was opened pursuant to a joint-investment arrangement between Mr. Yeh and Mr. Hartanto.
In October 2011, Crédit Agricole transferred the NexGen shares out of the Telemedia Account on Mr. Yeh’s instructions.
Telemedia claimed Crédit Agricole was not authorized to act on Mr. Yeh’s instructions.
Crédit Agricole claimed Mr. Yeh was singly authorized to operate the Telemedia Account.
Telemedia alleged Mr. Goh handed the account-opening forms to Mr. Yeh without Mr. Hartanto’s knowledge or consent.
Crédit Agricole commenced third-party proceedings against Mr. Yeh, seeking an indemnity.

5. Formal Citations

Telemedia Pacific Group Ltd v Credit Agricole (Suisse) SA (Yeh Mao-Yuan, third party), Suit No 379 of 2012, [2014] SGHC 235

6. Timeline

Date	Event
2005-01-01	Mr. Hartanto was introduced to Mr. Yeh.
2010-07-01	Mr. Hartanto and Mr. Yeh discussed a joint investment.
2010-10-01	Mr. Hartanto and Mr. Yeh met with Mr. Goh at Crédit Agricole.
2010-11-14	First and second non-recourse loan agreements signed.
2010-11-15	Supplementary securities cooperation agreement signed.
2010-11-30	Account-opening forms dated.
2010-12-02	Telemedia Account opened.
2011-02-01	Yuanta procured financing from a third-party lender.
2011-06-01	Yuanta procured financing from a third-party lender.
2011-09-08	Mr. Yeh instructed Crédit Agricole to transfer NexGen shares.
2011-09-12	Mr. Goh informed Mr. Hartanto of transfer instructions.
2011-10-06	Mr. Yeh instructed Crédit Agricole to transfer NexGen shares.
2011-10-10	Mr. Yeh issued another written instruction to transfer shares.
2011-10-11	Crédit Agricole purportedly sent transaction advices to Telemedia.
2011-10-14	Ms. Teo called Mr. Yeh to confirm transfer instruction.
2011-10-17	Crédit Agricole purportedly sent transaction advices to Telemedia.
2011-10-28	Crédit Agricole informed Mr. Hartanto of zero-balance.
2011-10-31	Ms. Teo emailed Mr. Hartanto regarding account closure.
2011-11-01	Mr. Goh emailed Mr. Hartanto, reminding him of share transfer.
2011-11-03	Mr. Hartanto emailed Mr. Goh, questioning Yeh's authorization.
2011-11-15	Mr. Goh emailed Mr. Hartanto regarding account opening.
2011-12-30	Telemedia sent a letter to Crédit Agricole regarding the unauthorized signer.
2012-01-04	Mr. Goh responded to Telemedia's letter.
2012-03-30	Mr. Goh was terminated from Crédit Agricole.
2012-05-09	Writ in this action was filed.
2013-05-01	Crédit Agricole wrote to Telemedia informing them that Mr Yeh was still a singly authorised signatory.
2013-06-03	Telemedia responded by way of a letter appending a Telemedia board resolution to that effect.
2013-06-07	Crédit Agricole effected the removal of Mr Yeh as a signatory of the Telemedia Account.
2014-11-18	Judgment reserved.

7. Legal Issues

Breach of Mandate
- Outcome: The court held that Crédit Agricole did not breach its mandate because Mr. Yeh was a singly authorized signatory.
- Category: Substantive
- Sub-Issues:
  - Unauthorized Transfer of Shares
  - Validity of Account-Opening Forms
  - Revocation of Authority
- Related Cases:
  - [2010] 3 SLR 1149
Breach of Duty of Care
- Outcome: The court held that Crédit Agricole did not breach its duty of care because it acted as a reasonably prudent banker would have in the circumstances.
- Category: Substantive
- Sub-Issues:
  - Duty to Act in Good Faith
  - Duty to Protect Customer's Interests
  - Duty to Exercise Reasonable Care and Diligence
- Related Cases:
  - [2007] 4 SLR(R) 100
  - [1996] 2 SLR(R) 774
Contractual Estoppel
- Outcome: The court held that Telemedia was contractually estopped from asserting that the transactions were effected without authority due to the conclusive evidence clause in the General Conditions.
- Category: Substantive
- Sub-Issues:
  - Conclusive Evidence Clause
  - Timely Complaint
  - Dispatch of Transaction Advices
- Related Cases:
  - [2006] 4 SLR(R) 273
  - [2003] 1 SLR(R) 747
  - [2011] 4 SLR 246
Revocation of Authority
- Outcome: The court held that Telemedia did not effectively revoke Mr. Yeh's authority because the contractual documents required a board resolution to alter Crédit Agricole's mandate.
- Category: Substantive
- Sub-Issues:
  - Implied Revocation
  - Effectiveness of Revocation
  - Requirement of Board Resolution

8. Remedies Sought

Monetary Damages
Return of Shares

9. Cause of Actions

Breach of Mandate
Breach of Duty of Care

10. Practice Areas

Commercial Litigation
Banking Litigation

11. Industries

Banking
Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Crédit Industriel et Commercial v Teo Wai Cheong	High Court	Yes	[2010] 3 SLR 1149	Singapore	Cited for the principle that a party is bound by the terms of signed contractual documents in the absence of fraud or misrepresentation.
Sandz Solutions (Singapore) Pte Ltd v Strategic Worldwide Assets Ltd	Court of Appeal	No	[2014] 3 SLR 562	Singapore	Cited regarding the assessment of witness credibility and the impact of memory gaps on evidence.
Browne v Dunn	N/A	No	(1893) 6 R 67	N/A	Cited regarding the rule in Browne v Dunn, concerning cross-examination of witnesses.
Chua Choon Cheng and others v Allgreen Properties Ltd and another appeal	Court of Appeal	No	[2009] 3 SLR(R) 724	Singapore	Cited for the legal principle that terms are only to be implied as a matter of law with considerable restraint.
Deutsche Bank AG v Chang Tse Wen and another appeal	Court of Appeal	Yes	[2013] 4 SLR 886	Singapore	Cited regarding the imposition of obligations in tort beyond those expressly or impliedly undertaken in contract.
Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd and others	Privy Council	Yes	[1986] 1 AC 80	Hong Kong	Cited for the principle that parties have the right to determine their obligations to each other in a contractual relationship.
Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency	Court of Appeal	No	[2007] 4 SLR(R) 100	Singapore	Cited for the test in determining whether a common law duty of care could arise out of a banker-customer relationship.
Bank of America National Trust and Savings Association v Herman Iskandar and another	Court of Appeal	No	[1998] 1 SLR(R) 848	Singapore	Cited as an example of an implied duty to take care in carrying out instructions, specifically informing account holders on the maturity of their fixed deposits.
Go Dante Yap v Bank of Austria Creditanstalt AG	N/A	No	[2011] 4 SLR 559	Singapore	Cited for the principle that a bank is subject to an implied contractual and common law duty to exercise skill and care in carrying out instructions.
Yogambikai Nagarajah v Indian Overseas Bank and another appeal	Court of Appeal	Yes	[1996] 2 SLR(R) 774	Singapore	Cited for the duty of a bank to inquire when faced with a seemingly genuine mandate, in the absence of circumstances which put the bank on inquiry.
Hwang Cheng Tsu Hsu (by her litigation representative Hsu Ann Mei Amy) v Oversea-Chinese Banking Corp Ltd	N/A	No	[2010] 4 SLR 47	Singapore	Cited for the principle that a bank's contractual duty to honor payment instructions is not absolute and is qualified by the duty to take reasonable care.
Hsu Ann Mei Amy (personal representative of the estate of Hwang Cheng Tsu Hsu, deceased) v Oversea-Chinese Banking Corp Ltd	Court of Appeal	Yes	[2011] 2 SLR 178	Singapore	Cited for the principle that a bank's duty to comply with a customer's mandate is subject to a duty to take reasonable care in all the circumstances.
Pertamina Energy Trading Limited v Credit Suisse	Court of Appeal	Yes	[2006] 4 SLR(R) 273	Singapore	Cited as the leading case on conclusive evidence clauses and the ability of a bank to modify a customer's common law duty by express terms in the contract.
Tjoa Elis v United Overseas Bank Ltd	N/A	Yes	[2003] 1 SLR(R) 747	Singapore	Cited for the principle that a conclusive evidence clause can be wide and clear enough to exclude a bank from liability, even if signatures were forgeries.
Jiang Ou v EFG Bank AG	High Court	No	[2011] 4 SLR 246	Singapore	Cited for the principle that a bank seeking to rely on a conclusive evidence clause must prove that the transaction advices were effectively dispatched to the customer.
Cheong Ghim Fah and another v Murugian s/o Ramasamy	N/A	No	[2004] 1 SLR(R) 628	Singapore	Cited for the principle that the court may draw an adverse inference against a party for its failure to call a witness.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)	Singapore
Unfair Contract Terms Act (Cap 396, 1994 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

NexGen shares
Telemedia Account
Crédit Agricole
Yeh Mao-Yuan
Hardy Hartanto
Singly authorised signatory
Account-opening forms
Breach of mandate
Duty of care
Conclusive evidence clause
Revocation of authority
Joint investment
Third-party proceedings

15.2 Keywords

banking
breach of mandate
duty of care
unauthorized transfer
contractual estoppel
revocation of authority
account opening
third party
shares
negligence

17. Areas of Law

Area Name	Relevance Score
Banking Law	80
Banking and Finance	75
Contract Law	65
Misrepresentation	50
Agency Law	30
Estoppel	25
Company Law	20

16. Subjects

Banking
Contract Law
Commercial Disputes
Agency