Koh Kim Teck v Credit Suisse: Breach of Duty in Investment Advice Claim

Koh Kim Teck sued Credit Suisse AG, Singapore Branch in the High Court of Singapore, alleging breaches of duty in advising him on investments. Koh invested through a trust company, Smiling Sun Ltd (SSL). The Assistant Registrar refused Credit Suisse's application to strike out Koh's claim, and Credit Suisse appealed. The High Court dismissed the appeal, finding that Koh's claim disclosed a reasonable cause of action and was not frivolous, vexatious, or an abuse of process.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Koh Kim Teck sues Credit Suisse for investment losses, alleging breach of duty. The court considers whether Credit Suisse owed a duty of care to Koh.

1.7 Decision Date

25 February 2015

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Koh Kim Teck	Plaintiff, Respondent	Individual	Appeal Dismissed	Won	Sarjit Singh Gill of Shook Lin & Bok LLP Tan Su Hui of Shook Lin & Bok LLP Edmund Eng of Shook Lin & Bok LLP
Credit Suisse AG, Singapore Branch	Defendant, Appellant	Corporation	Appeal Dismissed	Lost	Chua Sui Tong of WongPartnership LLP Alvin Yeo of WongPartnership LLP Michelle Neo of WongPartnership LLP

3. Judges

Judge Name	Title	Delivered Judgment
Aedit Abdullah	Judicial Commissioner	Yes

4. Counsels

Counsel Name	Organization
Sarjit Singh Gill	Shook Lin & Bok LLP
Tan Su Hui	Shook Lin & Bok LLP
Edmund Eng	Shook Lin & Bok LLP
Chua Sui Tong	WongPartnership LLP
Alvin Yeo	WongPartnership LLP
Michelle Neo	WongPartnership LLP

4. Facts

Koh Kim Teck invested with Credit Suisse through Smiling Sun Ltd (SSL), a trust company.
SSL's director and shareholder were agents/nominees of Credit Suisse.
Credit Suisse employees gave investment advice directly to Koh Kim Teck.
Koh Kim Teck deposited funds into an account held in SSL's name.
Koh Kim Teck was unaware of a charge over SSL's assets.
Investments made on Credit Suisse's advice resulted in losses for Koh Kim Teck.
Credit Suisse closed out investment positions and liquidated assets in the account.

5. Formal Citations

Koh Kim Teck v Credit Suisse AG, Singapore Branch, Suit No 942 of 2013 (Registrar's Appeal No 301 of 2014), [2015] SGHC 52

6. Timeline

Date	Event
2003-09-05	Smiling Sun Ltd incorporated in the British Virgin Islands.
2003-09-23	Koh Kim Teck conferred a Limited Power of Attorney by SSL.
2006-01-01	Koh Kim Teck applied for a US$5m facility with Credit Suisse.
2008-04-01	The facility was increased to US$20m.
2008-09-01	The facility was increased to US$30m.
2008-10-21	Koh Kim Teck advised to sell down and close out the Account’s then “open” DCIs and to sell certain shares.
2008-10-24	Credit Suisse issued a fax addressed to SSL and copied to Koh Kim Teck, stating that the facility to collateral ratio had reached a level where Credit Suisse is entitled to close out SSL’s trade positions.
2013-10-16	Writ of summons filed.
2014-03-04	Statement of claim filed and served.
2014-03-14	Summons No 1330 of 2014 filed.
2014-12-23	Hearing of the parties.
2015-02-26	Judgment reserved.

7. Legal Issues

Duty of Care
- Outcome: The court found that it was possible for the Defendant to owe the Plaintiff a separate and independent duty of care in tort.
- Category: Substantive
- Sub-Issues:
  - Assumption of responsibility
  - Proximity
  - Foreseeability
  - Contractual exclusion of duty
- Related Cases:
  - [2007] 4 SLR(R) 100
  - [1964] AC 465
  - [2011] 4 SLR 559
  - [2014] 3 SLR 761
  - [2011] 2 SLR 146
  - [2006] 1 CLC 1007
Reverse Piercing of Corporate Veil
- Outcome: The court found that the issue of reverse piercing required serious argument and was not unarguable and unsustainable.
- Category: Substantive
Striking Out Pleadings
- Outcome: The court found that the Plaintiff's claim disclosed a reasonable cause of action and was not frivolous, vexatious, or an abuse of process.
- Category: Procedural
- Sub-Issues:
  - Reasonable cause of action
  - Frivolous or vexatious claims
  - Abuse of process
- Related Cases:
  - [1997] 3 SLR(R) 649
  - [2013] 2 SLR 895
  - [2012] 4 SLR 546

8. Remedies Sought

Damages for loss of US$26 million

9. Cause of Actions

Breach of Duty of Care
Negligence

10. Practice Areas

Commercial Litigation
Banking Litigation
Financial Services Litigation

11. Industries

Financial Services

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others	Court of Appeal	Yes	[1997] 3 SLR(R) 649	Singapore	Cited for the principle that pleadings should only be struck out in plain and obvious cases.
Chan Kin Foo v City Developments Ltd	High Court	Yes	[2013] 2 SLR 895	Singapore	Cited for the principle that a claim must be obviously unsustainable for the court to strike it out.
The “Bunga Melati 5”	High Court	Yes	[2012] 4 SLR 546	Singapore	Cited for the principle that a claim can be either legally or factually unsustainable.
Tan Eng Khiam v Ultra Realty Pte Ltd	High Court	Yes	[1991] 1 SLR(R) 844	Singapore	Cited for the principle that pleaded facts are presumed to be true in favor of the claimant.
Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency	Court of Appeal	Yes	[2007] 4 SLR(R) 100	Singapore	Cited for the test to determine whether a duty of care exists in negligence.
Townsing Henry George v Jenton Overseas Investment Pte Ltd (in liquidation)	Court of Appeal	Yes	[2007] 2 SLR(R) 597	Singapore	Cited regarding the possibility of the Plaintiff’s case succeeding under Singapore law.
Hedley Byrne & Co Ltd v Heller & Partners Ltd	House of Lords	Yes	[1964] AC 465	England and Wales	Cited for the principle that assumption of responsibility can be the basis of a sufficiently proximate relationship to give rise to a duty of care in tort.
Go Dante Yap v Bank Austria Creditanstalt AG	Court of Appeal	Yes	[2011] 4 SLR 559	Singapore	Cited for the application of the Hedley Byrne principle.
Anwar Patrick Adrian and another v Ng Chong & Hue LLC and another	Court of Appeal	Yes	[2014] 3 SLR 761	Singapore	Cited for affirming the application of the Hedley Byrne principle.
Animal Concerns Research & Education Society v Tan Boon Kwee	High Court	Yes	[2011] 2 SLR 146	Singapore	Cited for the principle that the true test is whether the parties structured their contracts intending to exclude the imposition of a tortious duty of care.
Riyad Bank & Ors v Ahli United Bank (UK) plc	English Court of Appeal	Yes	[2006] 1 CLC 1007	England and Wales	Cited for the principle that it is possible for one party to owe a duty of care to another even if the parties have deliberately decided not to be in a direct contractual relationship.
Diamantis Diamantides v JP Morgan Chase Bank & Others	English High Court	No	[2005] EWHC 263	England and Wales	Cited by the Defendant to argue that it is not possible for a duty of care to arise on the pleaded facts.
Diamantis Diamantides v JP Morgan Chase Bank and others	English Court of Appeal	No	[2005] EWCA Civ 1612	England and Wales	Cited by the Defendant to argue that it is not possible for a duty of care to arise on the pleaded facts.
Henderson v Merrett Syndicates Ltd	House of Lords	Yes	[1995] 2 AC 145	England and Wales	Cited for the principle that the parties structured their contracts intending thereby to exclude the imposition of a tortious duty of care.
Johnson v Gore Wood & Co	Unknown	No	[1999] BCC 474	England and Wales	Cited in Diamantis (CA) regarding the possibility of a bank owing fiduciary duties.
Conway v Ratiu and others	Unknown	No	[2005] All ER (D) 103 (Nov)	England and Wales	Cited in Diamantis (CA) regarding the possibility of a bank owing fiduciary duties.
Deutsche Bank AG v Chang Tse Wen and another appeal	Court of Appeal	Yes	[2013] 4 SLR 886	Singapore	Cited regarding the UCTA and non-reliance clauses.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Rules of Court (Cap 322, R 5, 2006 Rev Ed)	Singapore
Unfair Contract Terms Act (Cap 396, 1994 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Duty of care
Investment advice
Trust company
Smiling Sun Ltd
Reverse piercing
Alter ego
Knock-out Discount Accumulators
Dual Currency Investments
Facility to collateral ratio

15.2 Keywords

investment
duty of care
negligence
banking
trust
Singapore

17. Areas of Law

Area Name	Relevance Score
Investment Advice	85
Negligence	80
Banking and Finance	75
Fiduciary Duty	65
Business Litigation	60
Contract Law	60
Breach of Contract	50
Corporate Law	40
Company Law	30
Estoppel	30

16. Subjects

Banking
Finance
Trusts
Civil Litigation