Crédit Industriel et Commercial v Teo Wai Cheong: Dispute over Equity Accumulator Transactions
Crédit Industriel et Commercial (CIC), a French bank, sued Teo Wai Cheong, a former private banking client, in the High Court of Singapore, regarding a dispute over equity accumulator transactions. CIC claimed Teo instructed his relationship manager to purchase five China Energy (CE) accumulators, which Teo denied. The court, presided over by Justice Chan Seng Onn, found in favor of CIC, holding Teo liable for the outstanding amounts due for CE shares accumulated and the costs of closing out the disputed accumulators. Teo's counterclaim against CIC was dismissed.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
French bank CIC sues Teo Wai Cheong over disputed equity accumulator transactions. The court found Teo liable for the disputed transactions.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Teo Wai Cheong | Defendant | Individual | Claim Dismissed | Lost | |
| Crédit Industriel et Commercial | Plaintiff | Corporation | Judgment for Plaintiff | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Seng Onn | Judge | Yes |
4. Counsels
4. Facts
- Teo opened a private banking account with CIC in August 2006.
- Ng was Teo's relationship manager at CIC.
- Teo signed three standard form contracts with CIC.
- Teo was granted a loan facility of up to US$5 million.
- Between July and October 2007, twenty equity accumulators were purchased under Teo’s CIC account.
- CIC claimed Teo instructed Ng to purchase the disputed accumulators, which Teo denied.
- CIC closed-out the disputed accumulators after Teo failed to pay.
- CIC exercised its rights to realise assets in Teo's account to offset the debt.
5. Formal Citations
- Crédit Industriel et Commercial v Teo Wai Cheong, Suit No 626 of 2008, [2012] SGHC 94
- Crédit Industriel et Commercial v Teo Wai Cheong, , [2010] 3 SLR 1149
- Teo Wai Cheong v Crédit Industriel et Commercial, , [2011] SGCA 13
6. Timeline
| Date | Event |
|---|---|
| Teo opened a private banking account with CIC | |
| Teo signed CIC’s Banking Facility Letter and CIC’s Charge Agreement | |
| First equity accumulator was purchased under Teo’s CIC account | |
| Last equity accumulator was purchased under Teo’s CIC account | |
| Ng telephoned Teo to request for funds to enlarge his account | |
| Ng contacted Teo and revealed that she had entered into the Disputed Accumulators and the Sembcorp Accumulator for Teo | |
| Ng contacted Teo and informed him that the Sembcorp Accumulator had been knocked out | |
| Ng requested for a sum of S$160,000 to pay for the First CE Accumulator, the Second CE Accumulator and the Sembcorp Accumulator | |
| Teo issued a cheque for S$160,000 to CIC | |
| Ng informed Teo that her superiors had lectured her and wanted her to persuade Teo to reassign the accumulators to his other investment account, mortgage his house or transfer more funds from his Citibank account | |
| Teo instructed CIC to sell 180,000 CE shares which he had acquired under the First to Seventh CE Accumulators | |
| Teo met with Kwek to complain about the Disputed Accumulators | |
| CIC’s solicitors demanded that Teo pay what he owed to CIC for shares delivered under the Disputed Accumulators | |
| CIC closed-out Seventh CE Accumulator with Goldman Sachs | |
| CIC closed-out Fourth and Fifth CE Accumulators with DBS | |
| CIC closed-out Third and Sixth CE Accumulators with DBS and Goldman Sachs | |
| CIC issued a conclusive certificate of indebtedness | |
| First trial before a Judicial Commissioner | |
| Court of Appeal ordered a re-trial of this suit | |
| Decision Date | |
| Defendant's appeals to this decision were allowed by the Court of Appeal |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that Teo breached the contract by failing to pay for the shares delivered under the equity accumulators.
- Category: Substantive
- Sub-Issues:
- Repudiation of contract
- Failure to pay for shares delivered
- Authority to Transact
- Outcome: The court found that Teo had authorized the purchase of the disputed accumulators.
- Category: Substantive
- Sub-Issues:
- Oral instruction
- Unauthorised trading
- Contractual Interpretation
- Outcome: The court interpreted the terms and conditions of the agreements to determine the rights and obligations of the parties.
- Category: Substantive
- Sub-Issues:
- Terms and Conditions of Account Opening and Custodian Agreement
- Banking Facility Letter
- Charge Agreement
- Admissibility of Evidence
- Outcome: The court allowed the admission of Ng's affidavits of evidence-in-chief and her oral evidence from the first trial as evidence for the re-trial pursuant to section 33 of the Evidence Act.
- Category: Procedural
- Sub-Issues:
- Section 33 of the Evidence Act
- Evidence given by a witness in a judicial proceeding
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Banking Litigation
- Financial Disputes
11. Industries
- Banking
- Financial Services
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 to indicate the decision of the first trial, which was later set aside by the Court of Appeal. |
| Teo Wai Cheong v Crédit Industriel et Commercial | Court of Appeal | Yes | [2011] SGCA 13 | Singapore | Cited for the Court of Appeal's decision to set aside the judgment of the Judicial Commissioner and order a new trial due to the non-disclosure of certain information and documents. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) | Singapore |
| Evidence Act (Cap. 97) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Equity Accumulator
- Relationship Manager
- Private Banking
- Oral Instruction
- Risk Disclosure Statement
- Banking Facility Letter
- Charge Agreement
- Knock-out Price
- Forward Price
- Maximum Obligation
- Closing-out Costs
- Conclusive Certificate of Indebtedness
15.2 Keywords
- Equity Accumulator
- Breach of Contract
- Banking Facility
- Investment Dispute
- Financial Litigation
17. Areas of Law
16. Subjects
- Banking
- Finance
- Contract Law
- Investments