First Asia Capital Investments Ltd v Société Générale: Collateral Contracts & Misrepresentation
In First Asia Capital Investments Ltd v Société Générale Bank & Trust and Karen Cheong Hui Er, the Singapore High Court dismissed the plaintiff's claim against the defendants. The plaintiff, First Asia Capital Investments Limited, alleged breach of an oral collateral agreement, misrepresentation, breach of fiduciary duty, and undue influence in relation to 103 share accumulator transactions. The court found no merit in the plaintiff's claims and dismissed the action with costs.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Claim dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court judgment in First Asia Capital Investments Ltd v Société Générale Bank & Trust, addressing claims of breach of collateral contract and misrepresentation.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| First Asia Capital Investments Limited | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Société Générale Bank & Trust | Defendant | Corporation | Judgment for Defendant | Won | |
| Karen Cheong Hui Er | Defendant | Individual | Judgment for Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Steven Chong | Judge of Appeal | Yes |
4. Counsels
4. Facts
- First Asia Capital Investments Limited entered into 103 share accumulators with Société Générale Bank & Trust.
- Karen Cheong Hui Er was the relationship manager for First Asia Capital Investments Limited at Société Générale Bank & Trust.
- Lucas and Lenny Patricia Halim Liem were the authorized signatories for First Asia Capital Investments Limited's accounts.
- First Asia Capital Investments Limited claimed that an oral collateral agreement existed requiring Lucas's approval for all transactions.
- Lenny Patricia Halim Liem provided written approval for all 103 share accumulators.
- First Asia Capital Investments Limited alleged that Karen misrepresented to Lenny that Lucas had already authorized the share accumulators.
- First Asia Capital Investments Limited suffered losses on the share accumulators.
5. Formal Citations
- First Asia Capital Investments Ltd v Société Générale Bank & Trust and another, Suit No 314 of 2013, [2017] SGHC 78
6. Timeline
| Date | Event |
|---|---|
| Account Number 8882633 opened with Société Générale Bank & Trust. | |
| Karen Cheong Hui Er employed by Société Générale Bank & Trust. | |
| Société Générale Bank & Trust offered a US$20m credit facility to First Asia Capital Investments Limited. | |
| First Asia Capital Investments Limited accepted US$20m credit facility. | |
| Account Number 8888045 opened with Société Générale Bank & Trust. | |
| First share accumulator transacted. | |
| Facility letter extended a number of credit facilities to First Asia Capital Investments Limited including one of US$30m for equity option trading. | |
| Last share accumulator transacted. | |
| First Asia Capital Investments Limited instructed Société Générale Bank & Trust to unwind the remaining 18 share accumulators. | |
| First Asia Capital Investments Limited commenced claim against Société Générale Bank & Trust. | |
| Trial began. | |
| Trial concluded. | |
| Judgment reserved. | |
| Judgment delivered. |
7. Legal Issues
- Breach of Collateral Agreement
- Outcome: The court held that there was no collateral agreement between the parties.
- Category: Substantive
- Sub-Issues:
- Inadmissibility of evidence
- Vagueness of pleadings
- Objective evidence contradicting agreement
- Misrepresentation
- Outcome: The court held that no misrepresentation was made by the defendants.
- Category: Substantive
- Sub-Issues:
- Fraudulent misrepresentation
- Vicarious liability
- Breach of Fiduciary Duty
- Outcome: The court held that the defendants did not owe fiduciary duties to the plaintiff.
- Category: Substantive
- Undue Influence
- Outcome: The court held that the defendants did not exercise undue influence over Lenny.
- Category: Substantive
8. Remedies Sought
- Damages
9. Cause of Actions
- Breach of Contract
- Misrepresentation
- Breach of Fiduciary Duty
- Undue Influence
10. Practice Areas
- Commercial Litigation
- Banking Litigation
- Financial Disputes
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Dynasty Line Ltd (in liquidation) v Sukamto Sia and another and another appeal | Court of Appeal | Yes | [2014] 3 SLR 277 | Singapore | Cited for the principle that a finding of a collateral agreement alongside a main contract will not lightly be made and that there must be clear proof that all legal requirements of a binding contract have been met, and that its terms are certain. |
| Likpin International Ltd v Swiber Holdings Ltd and another | High Court | Yes | [2015] 5 SLR 962 | Singapore | Cited to support the principle that even for an oral contract, there could only be one date on which the contract could be said to have been concluded. |
| Latham Scott v Credit Suisse First Boston | Court of Appeal | Yes | [2000] 2 SLR(R) 30 | Singapore | Cited for the principle that evidence of a collateral agreement whose terms are inconsistent with the main contract is inadmissible. |
| Ng Lay Choo Marion v Lok Lai Oi | Court of Appeal | Yes | [1995] 3 SLR(R) 77 | Singapore | Cited for the principle that evidence of a collateral agreement whose terms are inconsistent with the main contract is inadmissible. |
| Deutsche Bank AG v Chang Tse Wen and another appeal | Court of Appeal | Yes | [2013] 1 SLR 1310 | Singapore | Cited for the principle that the critical question in the context of a banker-customer relationship is whether the bank has undertaken to act as a fiduciary vis-à-vis the principal, ie, to put the principal’s interests ahead of its own. |
| Susilawati v American Express Bank Ltd | Court of Appeal | Yes | [2009] 2 SLR(R) 737 | Singapore | Cited for the characteristics of relationships in which fiduciary obligations have been imposed. |
| Nitine Jantilal v BNP Paribas Wealth Management | High Court | Yes | [2012] SGHC 28 | Singapore | Cited for the principle that the fact that the bank could not deal with the customer’s assets as it wished but had to act on the latter’s instructions was a point against finding any fiduciary obligation. |
| Susilawati v American Express Bank Ltd | High Court | Yes | [2008] 1 SLR(R) 237 | Singapore | Cited for the principle that similar contractual terms were found to militate against the existence of a fiduciary duty. |
| Royal Bank of Scotland plc v Etridge (No 2) | House of Lords | Yes | [2002] 2 AC 773 | United Kingdom | Cited for the requirements to prove presumed undue influence. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
| Limitation Act (Cap 163, 1996 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Share Accumulator
- Collateral Agreement
- Misrepresentation
- Fiduciary Duty
- Undue Influence
- Authorized Signatory
- Relationship Manager
- Global Financial Crisis
- Strike Price
- Knock-out Price
15.2 Keywords
- Share Accumulators
- Collateral Contracts
- Misrepresentation
- Fiduciary Duty
- Banking Litigation
- Singapore High Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Contract Law | 90 |
| Collateral Contracts | 80 |
| Misrepresentation | 70 |
| Fiduciary Duties | 50 |
| Undue Influence | 40 |
| Banking and Finance | 30 |
16. Subjects
- Contract Law
- Banking
- Finance
- Investments