KGI Securities (Singapore) Pte Ltd v Nelson Fernandez (22NCC-403-11/2016)

Via writ action 22NCC-403-11/2016 (Writ Action) the Plaintiff claim against the Defendant for sum due and owing under trading accounts opened by the Defendant with the Plaintiff for the sale and purchase of securities.

The Plaintiff filed an application for summary judgment pursuant to Order 14 Rules of Court 2012 (RoC 2012) against the Defendant via Enclosure 6. The said application was allowed. The Defendant appealed.

The Plaintiff, KGI Securities (Singapore) Pte Ltd, is a company incorporated in Singapore which deals with securities trading and is a member of the Singapore Exchange Securities Trading Limited. The Plaintiff was formerly known as AmFraser Securities Pte Ltd. 3

The Defendant, a Malaysian citizen, at all material time is the Plaintiff’s client.

The Defendant applied to open a Margin Trading Account and Trading Account with the Plaintiff via two separate forms titled Application For Opening of Trading Account (Individual) both dated 9 January 2013 (Application Forms). The said Application Forms was accompanied with the following documents which collectively formed the terms and conditions for securities trading –

Terms and Conditions for the Operations of Securities

Risk Disclosure Statement;

Guide and Cautionary Notes;

Terms and Conditions for Electronic Services; and

Terms and Conditions for Electronic Payment Services. [6] The Defendant executed a Margin Facility Agreement dated 9 January 2013 (Exhibit KGI-3 of Enclosure 7) where the Plaintiff agreed to make available to the Defendant a revolving credit facility of up to the maximum aggregate limit of S$300,000.00 to the Defendant for the purposes of trading shares under the Margin Trading Account. The 4 terms and conditions of the Margin Facility Agreement provide, among others, that the Plaintiff is entitle at any time and without giving reason to sell any securities on the Defendant’s Margin Trading Account and all monies recovered by the Plaintiff as a result of any right, power or remedy under the Margin Facility Agreement or Memorandum of Deposit shall be applied in the manner stated in clause 13.2 of the Margin Facility Agreement. [7] In consideration of the Plaintiff granting the facility, the Defendant executed a Memorandum of Deposit dated 9 January 2013 where securities purchased under the Margin Trading Account were deposited with the Plaintiff. The securities deposited was Blumont Group, Atilan Group (formerly known as Asiasons Capital Limited) and LionGold Corp. [8]

sum of S$577,300.19 under the Trading Account; and

sum of S$919,282.61 under the Margin Trading Account. Notwithstanding the Letters of Admission, the Defendant failed, refused and/or neglected to settle the outstanding sums. [12] On 25 July 2014, the Plaintiff through its solicitors issued a letter to the Defendant demanding the principle sum of S$910,987.29 and 6 accruing interest of S$67,431.62 as at 25 July 2014 under the Margin Account (Letter of Demand). A copy of the statement of account was attached to the Letter of Demand for the Defendant’s reference. Despite the Letter of Demand, the Defendant has failed to pay the sums due and owing. [13] In its Statement of Claim dated 28 November 2016 the Plaintiff claim against the Defendant, among others, the following –

the sum of $667,792.01 due under the Trading Account (equivalent to Malaysian Ringgit RM2,093,564.73 based on Central Bank of Malaysia’s currency exchange rate of S$1.00 to RM3.1351 calculated as at 28 November 2016);

interest rate of 7% per annum over the principal sum of $567,300.19 under Trading Account (equivalent to Malaysian Ringgit RM1,778,542.83 based on Central Bank of Malaysia’s currency exchange rate of S$1.00 to RM3.1351 calculated as at 28 November 2016) calculated from 13 April 2016 until full realization; 7

the sum of $1,116,367.32 under the Margin Account (equivalent to Malaysian Ringgit RM3,499,923.18 based on Central Bank of Malaysia’s currency exchange rate of S$1.00 to RM3.1351 calculated as at 28 November 2016); and

interest rate of 9% per annum over the principal sum of $910,987.29 under the Margin Account (equivalent to Malaysian Ringgit RM2,856,036.25 based on Central Bank of Malaysia’s currency exchange rate of S$1.00 to RM3.1351 calculated as at 28 November 2016) calculated from 13 April 2016 until the date of full settlement. Defendant’s case [14] The Defendant claims at all material time he was an investor. The Defendant did not deny that he had opened a Margin Trading Account and a Trading Account with the Plaintiff. 8 [15] The Defendant’s pleaded case is as follows –

the Defendant opened the accounts because the Plaintiff had held itself out to have the requisite expertise in securities trading offered to manage a portfolio of securities deposited with the Plaintiff to enable the Plaintiff to trade in securities, on behalf of the Defendant, in Singapore;

the Defendant was not given copies of the documents which the Plaintiff claims to have formed the contract between the Plaintiff and the Defendant under the Margin Trading Account and the Trading Account including the

the Defendant did not expressly authorize the trades which led to the losses. As such the Defendant is not liable to the losses claim by the Plaintiff;

the Plaintiff was in breach of the contract and/or its fiduciary duties and/or its duties of care and failed to exercise its discretionary authority professionally. As a result of such 9 breach the Defendant’s positions on the affected counters were severely compromised by a crash in the share prices which took place beginning October 2013. This caused the value of the affected securities which the Plaintiff then sold off at a substantial undervalue resulting in the losses alleged by the Plaintiff; and

the Defendant denies executing the Admission Letters. Such admission if any (which is denied) was made premised on a representation by the Plaintiff that the Plaintiff had at all material times acted in the Defendant’s best interest. [16] In his affidavits resisting the Plaintiff’s application for summary judgment, besides repeating the issues pleaded the Defendant raises the following issues –

he is a victim of a fraud allegedly committed by one Soh Chee Wen and Wong Xue Yu. The Defendant alleges Wong Xue Yu was the Plaintiff’s agent and the Plaintiff is responsible for the said Wong Xue Yu’s misconduct. Soh Chee Wen was charged for fraud in manipulating the market for shares; 10

the Defendant averred the accounts were opened on the advice of Wong Xue Yu and Peter Chen Hing Woon; and

the action ought to be tried under the laws of Singapore in Singaporean courts. The law [17] Pursuant to Order 14 rules 1 and 2 of the RoC 2012, in an application for summary judgment, it is incumbent on an applicant seeking the same to prove the following –

the statement of claim has been served on the defendant;

the defendant has entered appearance; and

the applicant has affirmed an affidavit verifying the facts on which the statement of claim is based. The applicant is also required to affirm his belief that the defendant has no defence to the statement of claim. [18] Upon the fulfilment of the above requirements the burden is on the defendant to prove under Order 14 rules 3 and 4 of the RoC 2012 that there is an issue or question in dispute which ought to be tried (National 11 Company For Foreign Trade v. Kayu Raya Sdn Bhd [1984] 1 CLJ (Rep) 283; Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544). An application for summary judgement may also be dismissed by the court if the defendant satisfies the court that there ought for some other reason to be a trial namely there are circumstances that ought to be investigated by the court (United Merchant Finance Bhd v. Majlis Agama Islam Negeri Johor [1999] 2 CLJ 151; [1999] 1 MLJ 657). [19] In this respect reference is made to the principles laid in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 at page 408 – In our view, basic to the application of all those legal propositions, is the requirement under O 14 for the court to be satisfied on affidavit evidence that the defence has not only raised an issue but also that the said issue is triable. The determination of whether an issue is or is not triable must necessarily depend on the facts or the law arising from each case as disclosed in the affidavit evidence before the court. Under an O 14 application, the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an affidavit. Where such assertion, denial or dispute is equivocal, or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable in itself, then the judge has a duty to reject such assertion or denial, thereby rendering the issue not triable. In our opinion, unless this principle is adhered to, a judge is in no position to exercise his discretion judicially in an O 14 application. Thus, apart from identifying the issues of fact or law, the court must go 12 one step further and determine whether they are triable. This principle is sometimes expressed by the statement that a complete defence need not be shown. The defence set up need only show that there is a triable issue. (emphasis added) Preliminary requirements [20] With regard to the preliminary requirements as laid down by the Federal Court in the case of Cempaka Finance Bhd, it is not disputed by the Defendant that the Plaintiff’s Statement of Claim has been duly served on the Defendant. The Defendant had duly filed his Memorandum of Appearance on 22 December 2016 (Enclosure 3). In respect of the summary judgment application, the Plaintiff had filed an affidavit (Enclosure 7) verifying the facts upon which reliance is placed by the Plaintiff to support its application for a summary judgment. The Plaintiff had also affirmed its belief that the Defendant has no defence to the statement of claim. As such a prima facie case has been established by the Plaintiff and therefore entitled to judgment. [21] Accordingly it is for the Defendant to prove that there are issue or question in dispute which ought to be tried or there ought for some other reason to be a trial, namely, there are circumstances that ought to be 13 investigated by the court. As stated above the Defendant need not raise a complete defence, suffice for the Defendant to show there is a triable issue or question. In South East Asia Insurance Bhd v Kerajaan Malaysia [1998] 1 CLJ 1045 it was held if a defendant in an Order 14 application succeeds in raising even a single triable issue, it will not be a fit and proper case to enter summary judgment. Findings of the court [22] The Plaintiff’s claim against the Defendant is premised on the contractual relationship entered by the Plaintiff and the Defendant. The Defendant had applied to open two accounts known as Margin Trading Account and Trading Account. For that purpose the Defendant admit filling up and signing the Application Forms (Exhibits KGI-1 and KGI-5 to Enclosure 7). [23] In the said forms, the Defendant provided, among others, his particulars including his mailing address and financial information. His mailing address as stated in the Application Forms is 9LGD, Belair Apartments, Lorong Basong, Bukit Damansara, 50490 Kuala Lumpur. 14 [24] Via the Application Forms the Defendant made the following declaration –

DECLARATION AND AGREEMENT I hereby request you to open a Securities Trading Account (the “Account”) and provide safe-keeping facilities in relation to securities that may be purchased and/or deposited in my Account from time to time. I declare that I am not under 21 years of age, an undischarged bankrupt or a delinquent account holder with any Trading Member of Singapore Exchange Securities Trading Limited (“SGX-ST”). I hereby warrant that I have full capacity and authority to make the application and the information given herein in this application is true and correct and have not wilfully withheld and material fact. I undertake to notify AmFraser in writing of any change of the particulars given herein. I acknowledge that I have received, read and fully understood the Terms and Conditions for Securities Trading including Risk Disclosure Statement, Terms and Conditions For The Operations of Securities Trading Account and Guide and Cautionary Notes. I agree that my submission of this application and the acceptance of this application by AmFraser is no way implies approval for the opening of the Account and that AmFraser reserves the unconditional right not to approve this application without giving any reasons whatsoever. (emphasis added) [25] Thus by the said declaration, the Defendant is fully aware of the terms and conditions governing trading of securities via the two accounts 15 opened by the Defendant with the Plaintiff. The Defendant is therefore estop from pleading that he was never given and had no knowledge of the Terms and Conditions for Securities Trading including Risk Disclosure Statement, Terms and Conditions for the Operations of Securities Trading Account, Guide and Cautionary Notes, Terms and Conditions for Electronic Services and Terms and Conditions for Electronic Payment Services. Allegations of fraud [26] As regards to the issue of fraud alleged by the Defendant, it is pertinent to note that fraud was not pleaded by the Defendant and no details and particulars of the alleged fraud committed on him was provided as required under Order 18 rules 8 and 12(1) of the RoC 2012. As parties are bound by their pleadings, the Defendant is therefore estop from raising the issue of fraud to resist the Plaintiff’s application for summary judgment (Lee Ah Chor v Southern Bank Bhd [1991] MLJ 428). As such there is no issue let alone triable issue in so far as fraud is concerned. [27] The Defendant contends he was unable to raise the issue of fraud because he is not aware that he had been a victim of such fraud when 16 the Writ Action was commenced against him. It was only after reviewing all the documents by the Plaintiff only the Defendant realized that he is a victim of fraud. Despite realizing the same the Defendant decided to seek for his amendment to be made only after the disposal of the Plaintiff’s summary judgment application!. With respect, such a contention is untenable. The evidence shows that the Defendant was made aware of the criminal charges against Soh Chee Wen in March 2017 and the Writ Action against the Defendant was filed in November

The Defendant ought to have applied to amend his Statement of Defence as soon as he was made aware of the criminal charges against Soh Chee Wen to correct the omissions in his pleadings. Fraud is a serious matter/offence and if indeed the Defendant is a victim of fraud as he alleges, it is imperative for him to have his Statement of Defence amended to enable the issue of fraud be raised and adjudged. [28] The Defendant further contends the nature of this case is such that most, if not all of the relevant facts and documentary evidence are under the control of the Plaintiff and that the Defendant can only elicit such facts and documents through discovery, interrogatories and cross-examination at full trial. I am of the view the Defendant’s approach is not expedient and prudent, and to contend such situation amount to “some other reason” why a trial is necessary is an abuse of the process of the 17 court. If indeed the relevant facts and documentary evidence (in particular the allegations of fraud which Defendant submit will render the contract between him and the Plaintiff as void and unenforceable) are mostly under the control of the Defendant, the Defendant ought to have filed for discovery for further and better particulars when served with the Statement of Claim and seek for the filing of their defence be temporarily stayed pending the discovery application under Order 18 RoC 2012. However there was no such application made and no indication of the same was given by the Defendant. Letters of Admission [29] The two Letters of Admission are reproduced as Exhibit KGI-10 to Enclosure 7 and found at pages 104 – 106 and 107 – 110. The Letter of Admission at pages 104 – 106 is in respect of the indebtedness in the sum S$919,282.61 under Margin Trading Account and the one at pages 107 – 110 is in respect of the indebtedness in the sum of S$577,300.19 under the Trading Account. My perusal of the two Letters of Admisson shows the content of the two letters are identical save and except the detail pertaining to the account number and the sum of indebtedness under the respective accounts. As stated by the Plaintiff the said letter is 18 a standard letter issued by the Plaintiff for purpose of recording settlement between Plaintiff and its clients. [30] Based on the Letters of Admission, the Defendant had confirmed and acknowledged that he was indebted to the Plaintiff in the sum of S$919,282.61 under Margin Trading Account and S$577,300.19 under the Trading Account. The material and relevant part of the Letters of Admission are reproduced below –

in respect of the Defendant’s indebtedness under the Margin Trading Facility – Name: Nelson Fernandez Date: 09/12/13 NRIC: 591206-10-6781 Contact No: Address: 9LGD, BELAIR APARTMENTS LORONG BASONG, BUKIT DAMANSARA 50490, KUALA LUMPUR, MALAYSIA To: AmFraser Securities Pte Ltd Attn: Credit Manager RE: ACCOUNT NO. 30911 OUTSTANDING DEBT OF S$ 919,282.61 I, Nelson Fernandez (NRIC: 591206-10-6781 ) hereby confirm and acknowledge that I am indebted to you for the sum of S$ 919,282.61 being losses suffered by me as a result of my trading in stocks and shares. 19

in respect of the Defendant’s indebtedness under the Trading Facility – Name: Nelson Fernandez Date: 09/12/13 NRIC: 591206-10-6781 Contact No: 6012-3062524 Address: 9LGD, BELAIR APARTMENTS LORONG BASONG, BUKIT DAMANSARA 50490, KUALA LUMPUR, MALAYSIA To: AmFraser Securities Pte Ltd Attn: Credit Manager RE: ACCOUNT NO. 85246 OUTSTANDING DEBT OF S$ 577,300.19 I, Nelson Fernandez (NRIC: 591206-10-6781 ) hereby confirm and acknowledge that I am indebted to you for the sum of S$ 577,300.19 being losses suffered by me as a result of my trading in stocks and shares. [31] The Defendant did not deny signing the Letters of Admission. However the Defendant raise the following issues in relation to the said letters –

on 9 December 2013, Defendant was asked to attend a meeting with Wong Xue Yu and another Soh Chee Wen’s associates, Lim Kuan Yew and the Defendant was given two blank letters (Exhibit KGI-10);

Defendant filled up his name, identity card number, address and date at page 107 and signed at pages 107 and 108. At that point in time all other details on the said pages were 20 blank especially the sections indebtedness and repayment were left blank;

the Defendant averred he signed at pages 104 and 105 but did not fill up the details. Defendant did not authorize any person to fill up the blanks and has no knowledge as to the details; and

the Letters of Admission were fraudulently obtained and it is not a voluntary admission on the Defendant’s part. [32] The Defendant did not plead fraud in his Statement of Defence in so far as the Letters of Admission is concerned. The relevant paragraphs of the Plaintiff’s and Defendant’s pleadings are produced below – a) By paragraph 12 of its Statement of Claim, the Plaintiff pleaded as follows –

By 2 letters dated 9 December 2013 executed by the Plaintiff and the Defendant (“Admission Letters”), the Defendant acknowledges and admits his indebtedness to the Plaintiff of the following sums:

12.1 S$577,300.19 under the Trading Account; and

12.2 S$919,282.61 under the Margin Trading Account. 21 b) In response to the Plaintiff’s paragraph 12, the Defendant pleaded in paragraph 19 of his Statement of Defence as follows –

Paragraph 12 of the Statement of Claim is denied and the Plaintiff is put to strict proof thereof. In any event, the Defendant will say that any such admission (which is denied) was made premised on a representation by the Plaintiff that the Plaintiff had at all material times acted in the Defendant’s best interests, which representation has since been shown to be untrue. Accordingly, the Defendant will aver that such admissions (if any) had been made involuntarily and have no force or effect whatsoever. [33] It is obvious the Defendant’s defence in so far as the Letters of Admission are concerned is merely a bare denial. The Defendant did not plead the following material facts –

the involvement of other persons, namely, Wong Xue Yu and Lim Kuan Yew whom the Defendant alleges had shown him the Letters of Admission;

that he signed the letters without details of the indebtedness stated in the said letters;

that unauthorized persons had written the sum of the indebtedness on both the letters after he had signed the letters; and 22

that he is not liable for the indebtedness and will not pay for the same. [34] I am of the view there is a substantial departure in so far as the stance taken by the Defendant in his pleading and affidavits. In his statement of Defence he pleaded he relies solely on the Plaintiff’s purported representation that the Plaintiff had at all material times acted in the best interest of the Defendant when he signed the said letters as opposed to allegations of fraud committed in respect of the Letters of Admission as averred in his affidavits. As stated in paragraph 27 above the Defendant ought to have applied for his pleadings to be amended to enable the issue of fraud be raised in his defence and ventilated and adjudged by the court. Since fraud was not pleaded the Defendant cannot be allowed to raise such issue. [35] Taking into account the affidavit evidence, there is no credible evidence adduced to show that the Defendant had involuntarily signed the Letters of Admission. As can be seen from the Application Forms filled up by the Defendant (Exhibit KGI-I to Enclosure 7), the Defendant is a chief executive officer of a company called Executive Mode Sdn Bhd earning between S$150,000.01 – S$300,000 and has an estimated net worth of S$1,000,001.00. Surely, a person of high standing like the 23 Defendant would fiercely scrutinize the contents of the letters, in particular the part which concerns the amount which the Defendant intends to confirm and acknowledge as owing to the Plaintiff, because such confirmation and acknowledgment carries with it financial implication and obligation on the Defendant. [36] As such I find it highly improbable for a person of the Defendant’s standing and who admits filling up his personal details at page 107 and placed his signature at pages 107 and 108 (purportedly at the request of Wong Xue Yu), to have signed the Letters of Admission without the sum of indebtedness in Singapore dollar and cent being specifically stated. As pointed out by learned counsel for the Plaintiff, if the Defendant is not at all indebted to the Plaintiff why did the Defendant signed the form?. And to make the story worst – why did the Defendant signed a form in which the crucial part of it, namely the amount/sum of indebtedness is left blank?. The Defendant’s contemporaneous action then and his contention now is inconsistent and does not make sense at all. [37] If indeed the Letters of Admission was fraudulently obtained, the Defendant ought to have lodged a police report at the first opportunity available. However there is no evidence to show the Defendant had done so. The Defendant also did not lodge a complaint with the 24 regulatory body concerned, Singapore Exchange Limited on the purported fraud. [38] The Plaintiff’s officer, one Lee Wei Chin (who at the material time was tasked to oversee, amongst others, the Plaintiff’s debt recovery), in his affidavit affirmed on 12 April 2017 averred that as part of his job scope he attended and witnessed the signing of the Letters of Admission by the Defendant on 9 December 2013. According to Lee Wei Chin –

the Letters of Admission were produced when the Plaintiff met with the Defendant to discuss the settlement of the Defendant’s indebtedness to the Plaintiff;

details of the indebtedness at pages 104 and 107 of Exhibit KGI-10 was filed by Wong Xue Yu who is the Defendant’s agent in front of the Defendant and Lee Wei Chin before the Defendant signed the letters; and

after the Defendant signed the letters, Lee Wei Chin placed his signature on the letters as a witness to the Defendant’s signing the letters. [39] The above are specific averments made by Lee Wei Chin in respect of what transpired in relation to the Defendant’s execution of the 25 Letters of Admission. The Defendant in his affidavit Enclosure 11 merely denies Lee Wei Chin’s specific averment and presence at time the Defendant signed the Letter of Admission without challenging the specific averments. In this respect the Defendant’s contentions that Lee Wei Chin’s evidence is hearsay is misconceived as hearsay evidence rule is not applicable to affidavit evidence (s. 56 of the Evidence Act 1950). [40] In any event Lee Wei Chin has deposed the affidavit in his capacity as the officer in charge of overseeing the Plaintiff’s debt recovery and under the circumstances I am of the view his presence to witness the execution of the Letters of Admission by the Defendant is not something incredible because debt recovery is part of his job. Lee Wei Chin had personally witnessed the Defendant’s trade representative Wong Xue Yu who filed the details of the indebtedness on page 104 and 107 before the Defendant himself and the Defendant thereafter signed the said letter confirming the sum of indebtedness followed by Lee Wei Chin placing his signature as a witness. [41] The Defendant’s general denial of Lee Wei Chin’s averment is not sufficient to create triable issue in respect of the Letters of Admission. As there are no bona fide triable issue raised by the Defendant in so far 26 as matters related to the said three individuals, there is no justification to call the said individuals (Wong Xue Yu, Lim Kuan Yew, Lee Wei Chin to testify in a full trial. Trading carried out without the Defendant’s authority and knowledge [42] In essence the Defendant denies knowledge of any transactions being carried out under his Margin Trading Account and the Trading Account and that he did not authorize the Plaintiff or any other persons to conduct trading transactions. These are transactions in respect of the sale and purchase of shares conducted via the Defendant’s Margin Trading Account and Trading Account opened with the Plaintiff. [43] The Defendant claims Soh Chee Wen and Wong Xue Yu had carried out the sale and purchase of shares using his account without his knowledge. In other words the Defendant insist the trading transactions in his Margin Trading Account and Trading Account was fraudulently conducted by the two individuals and it result in losses. However the purported fraud was not pleaded by the Defendant nor did the Defendant took appropriate steps to has his pleadings amended so as to enable the issue of fraud be ventilated. Although the purported fraudulent transactions has caused severe losses to the Defendant and 27 the Writ Action is instituted against the Defendant, the Defendant is content to just make affidavit averments without vigorously and appropriately pleading the issue as required by him under the law. [44] In this respect it is pertinent to note the following evidence gathered from the affidavits filed by both parties in relation to the involvement/participation of Wong Xue Yu –

The Defendant in his affidavit Enclosure 8 had stated that he opened the trading account and the margin account on the advice of Wong Xue Yu and signed the Application Forms at Exhibits KGI-1 and KGI-5 to Enclosure 7.

The Application Forms (Exhibits KGI-1 and KGI-5 to Enclosure 7) at the part titled TO BE COMPLETED BY TRADING REPRSENTATIVE (TR), Wong Xue Yu is specifically designated and signed as the Defendant’s Trade Representative.

In the Plaintiff’s letter dated 25 January 2013 (sent to the Defendant at his mailing address provided by him in the Application Form Exhibit KGI-1 to Enclosure 7) approving the 28 applications of the Defendant to open the Margin Trading Account Number 30911, the Plaintiff had stated in the said letter (Exhibit KGI-1 to Enclosure 7), among others, the following – … Mr Wong Xue Yu is assigned to service your account and can be contacted at 6236 2081/6236 2082. Kindly quote your margin account no. 30911 when giving orders to Mr Wong Xue Yu. Your Margin Financing Limit approved is $300,000.00. A copy of the Memorandum of Deposit and Margin Facility Agreement are enclosed for your records. Should there be any discrepancies in the particulars therein, please inform us immediately. …

In the Plaintiff’s letter dated 15 January 2013 (sent to the Defendant at his mailing address provided by him in the Application Form Exhibit KGI-5 to Enclosure 7) approving the applications of the Defendant to open the Trading Account Number 85246, the Plaintiff had stated in the said letter (Exhibit KGI-6 to Enclosure 7), among others, as follows – 29 … Your trading representative is Mr Wong Xue Yu and can be contacted at 62362081 or 62362082 Kindly quote your account no. 85246 when giving orders to your trading representative. Important Note: You can access the Central Depository Pte Ltd (CDP)’s website http://www.cdp.com.sg/user/acc0unt.tc.pdf to obtain a copy of the Terms and Conditions for Operating Securities Account with CDP for your information Please advise us in writing should there be any discrepancies in the particulars. Should you require any clarification, please contact our Customer Service Officers at 62362688.

Copies of the Margin Calls and Topping Up Notices dated 7 October 2013, 8 October 2013, 9 October 2013, 10 October 2013 and 11 October 2013 (Exhibit KGI-8 to Enclosure 7) which were issued to the Defendant who did not deny receipt of the letters (see paragraph 32 to Enclosure 8), the letters were carbon copied to the Defendant in the following manner – cc. WONG XUE YU – Please inform your client immediately 30 [45] The above evidence to my mind is sufficient to show that Wong Xue Yu is the Defendant’s agent for purposes of trading the securities via the two accounts opened by the Defendant with the Plaintiff. For all the trading that took place in the two accounts which were recorded in the Statement of Accounts and contract notes sent to the Defendant (this issue will be discussed below), there was no indication made by the Defendant that Wong Xue Yu is not the Defendant’s agent and that he had traded without the Defendant’s authority or consent. [46] Crucially, the Defendant had consented to the said Wong Xue Yu to act as his trade representative as evident in the Application Forms Exhibits KGI-1 and KGI-5 to Enclosure 7 because the Defendant did not raise any objection or complaint with the Plaintiff when submitting the Application Forms to the Plaintiff to be processed. Furthermore, if indeed it is true Wong Xue Yu is not the Defendant’s trade representative or that the Defendant is not agreeable with Wong Xue Yu being assigned/tasked to be his trade representative, the Defendant ought to have said something immediately after receiving the Plaintiff’s letters approving his application to open the trade account as advised by the Plaintiff in the said letter. 31 [47] In this respect reference is made to clause 23 of the Terms and Conditions for the Operations of Securities Trading Account which reads –

Representatives

23.1 The Client [the Defendant] confirms that in the purchase and/or sale of any Securities under the Account(s) by any representative on the Client’s [the Defendant] and/or the Authorised Person’s instructions or through without their instructions but with their consent and/or authority (expressed, implied or otherwise) and/or knowledge, such representative shall be deemed to be the Client’s [the Defendant] agent whether or not such representative is deemed to be engaged or employed by the Client [the Defendant] in law. The Client [the Defendant] will, as between AmFraser and the Client [the Defendant], be liable for all purchases and sales of Securities executed by the representative for the Account regardless of whether the representative would also be liable to AmFraser for the same and the Client [the Defendant] shall be liable to AmFraser for all costs, expenses, damages, losses, fees, charges, rates or duties which may be incurred by AmFraser in respect of all such Securities transacted. In addition, the Client [the Defendant] confirms that in the purchase and/or sale of any Securities under the Account(s) by any representative, such representative shall be deemed to be the Client’s [the Defendant] agent and AmFraser is entitled to assume that as between AmFraser and the Client [the Defendant] (i) any order said by the representative to be intended to be executed for the Client [the Defendant] is so intended; and (ii) every order executed by the representative for the Client [the Defendant] is the order intended to be executed by the Client [the Defendant]. 32 [48] By the above terms and conditions (which the Defendant has declared to have received, read and fully understood at the time he applied for the accounts to be opened) it was agreed by the Defendant that any purchase and/or sale of any securities under the said account(s) by any of the Defendant’s representative shall be deemed to be the Defendant’s agent intended to be executed for and by the Defendant. As such in so far as the Plaintiff’s is concerned the Defendant is responsible for the trading carried out under the Margin Trade Account and Margin Trade Account. In this respect I am in agreement with the Plaintiff’s contention that the criminal charge against Soh Chee Wen is irrelevant to this proceedings. In any event the fact that Soh Chee Wen is charged does not mean the Defendant’s allegation of fraud is proven as Soh Chee Wen is innocent until proven guilty. Non-receipt of Statement of Account and contract notes [49] The Defendant denies receiving the Monthly Margin Trading Account Statement (Exhibit KGI-7 to Enclosure 7) and the Monthly Statement under the Trading Account (Exhibit KGI-9 to Enclosure 7) where the statements recorded the trading of shares carried out under the Margin Trading Account between 31 January 2013 to 31 October 33 2013 and under the Trading Account between 28 February 2013 to 31 October 2013. The Defendant also denies receiving the contract notes (Exhibit KGI-13 to Enclosure 9) for January 2013 to October 2013. The respective statements and contract notes were issued by the Plaintiff as required by the rules of Singapore Exchange Securities Trading Ltd. In fact the Defendant denies receiving the Letter of Demand dated 25 July 2014 which was sent to the address provided by the Defendant in the Application Forms. [50] It is noted the Statement of Account and contract notes issued by the Plaintiff were addressed to the mailing address of the Defendant as provided by the Defendant in the Application Forms Exhibits KGI-1 and KGI-5 to Enclosure 7. Under clause 19 of the Terms and Conditions for the Operation of Securities Trading Account (which document the Defendant has declared to have received, read and fully understood at the time he applied for the accounts to be opened) it was agreed that any notices, instructions and other communications to the Defendant are to be addressed to the mailing address as stated in the Application Forms or as notified to the Plaintiff by the Defendant from time to time. The said provision reads – 34

Notices

19.1 Any notices, instruction or other communication under or in connection with these Terms and Conditions may verbal or written unless otherwise required by these Terms and Conditions or the Rules.

19.2 All notices, instructions and other communications shall be addressed to or left at the business address of AmFraser and in the case of the Client, the mailing address as stated in the Application Form or as notified to AmFraser by the Client from time to time. Such notice shall be delivered by hand, by post, by telex, by facsimile or other electronic means and shall be deemed to have been duly received on the same day if delivered by hand, by telex, by facsimile or electronic means or when in the ordinary course of post it would be received, if delivered by post.

19.3 AmFraser shall have the discretion to act on any verbal instructions as it deems fit, whether or not such instructions have been confirmed in writing. (emphasis added) [51] Besides the said clause 19, the Defendant has also declared in the Application Forms that the mailing address given by the Defendant in the said forms is the true and correct address. The Defendant had also given the undertaking to inform the Plaintiff of any change in address. [52] The Defendant did not offer any evidence to show his mailing address has changed and that the Plaintiff was duly notified of the change. The Plaintiff has also averred that they did not receive any 35 return mail in respect of the statements of accounts and contract notes sent to the Defendant. [53] In fact, the address stated by the Defendant in all his affidavits in this proceedings is the same address which the Defendant had given to the Plaintiff in 2013 for purpose of communication in relation to the Margin Trading Account and the Trading Account as stated in the Application Forms. [54] Under the circumstances, the monthly statements and contract notes issued by the Plaintiff and sent to the Defendant at the mailing address provided by the Defendant in the Application Forms are deemed to have been delivered to the Defendant. As such the Defendant knew or ought to have known the trading carried out under the two accounts. [55] The Defendant did not raise any issue in relation to the trading of securities carried out during the period stated in the monthly statements of both accounts. By clause 25 of the Terms and Conditions for the Operations of Securities Trading Account the Defendant is obliged to check the accuracy of such statement and the Defendant is deemed to have read and confirmed the statement unless the Defendant filed a 36 written objection to the contents of the monthly statements and contract notes. Clause 25 reads –

Contract Notes and Statements

25.1 AmFraser will provide the Client with a written contract note/statement of each Securities Transaction effected in relation to the Account(s). Such contract note and/or statement shall be conclusive and binding against the Client unless objection in written addressed to the General Manager of AmFraser is received from the Client to AmFraser within 7 calendar days from the date of such contract note/statement.

25.2 AmFraser will provide the Client with a statement in respect of Securities, monies and/or other assets (if any) in relation to the Account(s) each month or at such intervals as AmFraser considers appropriate and/or as may be required by the relevant Rules. The Client hereby undertakes to check the accuracy of such statement and to ensure such statement is received by the Client at regular intervals. Unless AmFraser receives from the Client a written objection as to the contents of any such statement within 7 calendar days from the date of such statement, the Client shall be conclusively deemed to have read and confirmed the contents of the statement.

25.3 AmFraser may send contract notes/statements for Securities Transactions and statements in respect of Securities, monies and/or other assets (if any) in relation to the Account(s) to the Client by electronic means. If sent by electronic mail, such contract notes and statements shall be deemed to be duly sent to the Client if sent by AmFraser to the latest electronic mail address notified by the Client to AmFraser in writing and AmFraser shall have no liability whatsoever in respect of any loss or damage suffered by the Client for non-receipt at such electronic mail address for any reason whatsoever. 37

25.4 Notwithstanding the foregoing, AmFraser shall be entitled (but not obliged) at any time to rectify any error on any contract note or statement. [56] Since there is no evidence adduced by the Defendant that he has raised written objections to the monthly statements and the contract notes, the contents of the statements and contract notes are conclusively deemed to have been admitted and confirmed by the Defendant. [57] It is pertinent to note that at the time when the Defendant signed the Letters of Admission (in December 2013) confirming his indebtedness to the Plaintiff under the Margin Trading Account and the Trading Account, there is no evidence to show that the Defendant had raised the following issues with the Plaintiff –

that the Defendant did not receive the monthly statements and contract notes under the Margin Trading Account and the Trading Account;

that the Defendant did not give any instruction to the Plaintiff or authorize any person to conduct any transaction; 38

that the Defendant has no knowledge of the transactions carried out under the two accounts he had opened with the

that the Plaintiff had forced sale the Defendant’s securities without instruction from the Defendant; and

that the Defendant had never deposited any form of securities when the Margin Facility Agreement and Memorandum of Deposit were signed. [58] If it is true the Defendant had never received such statements and contract notes, that he has no knowledge of the transactions under the two accounts and he did not authorize the Plaintiff or any other persons to trade, one would have expected, and a reasonable person in the Defendant’s shoes would have raised such issues at the time when he was purportedly asked to fill up his details and signed the Letters of Admission in December 2013. After all the Letters of Admission clearly relate to the Defendant’s indebtedness incurred under the Margin Trading Account and the Trading Account which arose out of the securities traded by the Defendant through the two accounts. Obviously, the contemporaneous conduct of the Defendant does not support the Defendant’s position in resisting the Plaintiff’s summary judgment application. 39 [59] As to the Defendant’s allegation that the Plaintiff had breached the contract and/or fiduciary duties and/or duty of care to the Defendant when the Plaintiff had forced sell the shares, it is noted that numerous notices (Margin Calls and Topping Up Notices) were sent to the Defendant requiring the Defendant to maintain (with cash or additional securities) the margin ratio in the Defendant’s Margin Trading Account when the margin ratio dropped below 130% failure of which the Plaintiff reserves the right to force sell the shares purchased and pledged by the Defendant without further references to the Defendant. [60] The Margin Calls and Topping Up Notices issued were each dated 7 October 2013, 8 October 2013, 9 October 2013, 10 October 2013 and 11 October 2013. The said notices were sent at the mailing address provided by the Defendant in the Application Forms (Exhibit KGI-8 to Enclosure 7 at pages 89 – 96). By virtue of clause 19 of the Terms and Conditions for the Operation of Securities Trading Account, the Margin Calls and Topping Up Notices sent to the Defendant at the mailing address provided by the Defendant in the Application Forms are deemed to have been delivered to the Defendant. [61] The said notices were issued in October 2013, well before the date where the Defendant was asked to sign the Letters of Admission in 40 December 2013. The Defendant ought to have raised the issue of the forced sale (being conducted without his authorization) before signing to confirm and acknowledge the debt he owed to the Plaintiff in the Letters of Admission. It is noted under the Terms and Conditions for the Operations of Securities Trading Account the proceeds from the force sale would be utilized to set off any monies due to the Plaintiff under the Margin Trading Account and Trading Account. The set off inevitably means the Defendant’s indebtedness would be lessened. As such it would be in the interest of the Defendant to query about the force sale especially so when he alleges the securities were sold without his authority and at a substantial undervalue resulting in losses to him. There is no evidence to that effect. [62] With regards to the Defendant’s stance that the Plaintiff owes him various duties of care which is purportedly breached, it is pertinent to note the relationship between the Plaintiff (which is stock broking house) and the Defendant (a client who opened trading accounts) is purely contractual in nature premised on the various contracts executed between the parties and not of a fiduciary in nature (Capital Corp Securities Sdn Bhd v Abdul Malek Beh Bin Abdullah [2005] 7 MLJ). 41 Jurisdictional issue and expert opinion [63] The Defendant submits the Writ Action ought to be brought and tried under the laws of Singapore in a Singaporean court. In this respect one need to look at the contractual provisions agreed by both parties. Clause 33 of the Terms and Conditions for the Operation of Securities Trading Account provides as follows –

Law and Jurisdiction

33.1 This Agreement shall be governed, interpreted and construed in accordance with the Rules, as amended from time to time and the laws of the Republic of Singapore, and the client hereby irrevocably submits to the non-exclusive jurisdiction of the Courts of Singapore. Based on the above provision, although the governing law agreed is Singaporean law, the Singaporean court do not have exclusive jurisdiction over matters or issues relating to the Margin Trading Account and Trading Account. [64] In American Express Bank Ltd V Mohamed Toufic Al-Ozeir & Anor [1995] 1 MLJ 160 the Supreme Court dealt with the issue whether our High Court had jurisdiction to hear the action filed by the plaintiffs in Malaysia, and secondly whether Malaysian High Court was or was not a forum non conveniens. The agreement executed between the 42 appellant/defendant (a foreign bank carrying on business in Singapore) and respondents/plaintiffs (customer of the foreign bank and resided in Malaysia) contained clauses whereby the parties agreed to be bound by the law of Singapore and be subject to non-exclusive jurisdiction of the Singapore courts. The Supreme Court said – We considered the relevant factors in this instant appeal. A very glaring factor in the instant appeal was the foreign jurisdiction clauses in both the said agreements as set out above by which the bank customers had chosen Singapore courts for the litigation, ie expressly, in other words, the bank customers had submitted to the jurisdiction of the chosen Singapore courts; and further, both parties had chosen Singapore law as the law of their choice for the litigation, prospective or otherwise. It would be clear that, notwithstanding such clauses, a Malaysian court, ie High Court below, could not be precluded simpliciter thereby from exercising the discretion, according to the doctrine of forum non conveniens, as to whether to hear the instant case or not, please see the Federal Court case of Globus Shipping and Trading Co (Pte) Ltd v Taiping Textiles Bhd [1976] 2 MLJ 154. That said, such clauses would in any event, in some significant way, militate against any argument for the bank customers, ie the plaintiffs, that the Malaysian court was the most appropriate forum. [65] Thus it was held by the court that even if there is jurisdiction, at common law, the court has still the discretion to decide whether to deal with it on the doctrine of forum non conveniens, which means the suitability or appropriateness of the relevant jurisdiction and not 43 convenience. On the facts the Supreme Court held the respondents/plaintiffs failed to satisfy the court that the Malaysian court was the most appropriate forum to try the action which they launched. [66] In the instant case the Plaintiff which is a foreign company has decided to initiate the Writ Action against the Defendant who is a Malaysian citizen and at all material times residing in Kuala Lumpur Malaysia. By virtue of s. 23 of the Courts of Judicature Act 1964 the Malaysian High Court has jurisdiction to try the Writ Action. Although the accounts opened by the Defendants are with the Plaintiff, based on the evidence the accounts are operated/managed by the Defendant from Kuala Lumpur. Of course it is not deniable that the Plaintiff and its officers managing/dealing with the Defendant’s accounts who are potential witnesses are in Singapore and would have to be summoned to be in Kuala Lumpur to testify (if the need arises). However such situation is nothing peculiar and should not be a hindrance to the Plaintiff. After all it is the Plaintiff’s decision to commence the Writ Action in Kuala Lumpur. I am of the view the jurisdictional issue raised by the Defendant is not a triable issue. [67] The Defendant refers to Exhibits KGI-14 and KGI-15 to Enclosure 9 and contends the law and securities market practice of Singapore is 44 complex and based on s. 45 of the Evidence Act 1950, any expert opinion to be produced by the Plaintiff must be made available for cross-examination. [68] Exhibit KGI-14 to Enclosure 9 (Part IV of the Singaporean Securities and Futures (Licensing and Conduct of Business Regulations 2002 and Rule 7 of the Central Depository Rule) relates to the industry practice and regulatory requirement under which the contract notes were issued by the Central Depository Pte Ltd (an independent regulatory body) on behalf of the Plaintiff. Whilst Exhibit KGI-15 to Enclosure 9 relate to a printed copy of the Central Depository Pte Ltd website in respect of Pre-Settlement Notification and Contract Statements. Both exhibits are produced by the Plaintiff to show the basis for the issuance of the contract notes and the monthly statements of the Defendant’s accounts to the Defendant which the Defendant denies receipt. [69] It is to be noted the Defendant in his affidavit has denied knowledge of both the said Exhibits KGI-14 and KGI 15. In other words the Defendant claims he is not aware of the contents of both Exhibits KGI-14 and KGI-15, yet at the same time the Defendant insist reliance on the said documents requires expert opinion without identifying any provisions in the said documents which relate to the Plaintiff’s claim 45 against him and requires opinion from an expert on the said Singaporean securities law. As such the Defendant’s contention that an expert is required to be called to testify is unfounded and accordingly are not bona fide triable issues. Certificate of Indebtedness [70] The sum claim by the Plaintiff via the summary judgment application Enclosure 6 is the sum stated in the Plaintiff’s Statement of Claim where the Plaintiff has attached two separate Statement of Account in respect of the Margin Trading Account and the Trading Account. Both the Statement of Account shows the Defendant’s indebtedness towards the Plaintiff under the Margin Trading Account and the Trading Account. The Defendant merely denies liability of the same without challenging the contents of the Statement of Account. In the absence of any manifest error or fraud the amount of indebtedness stated in the Statement of Accounts is final and conclusive evidence of the Defendant’s indebtedness towards the Plaintiff (clause 18 of the Margin Facility Agreement; Cempaka Finance Berhad v Ho Lai Ying & Anor [2006] 3 CLJ 544). 46 Conclusion [71] No doubt the Defendant has raised numerous issues. However premised on the reasons stated above it is my finding that the issues raised are not bona fide and not triable. The so called ‘triable issues’ raised are in essence the Defendant’s bare denial of either the existence and/or receipt of contemporaneous documents shown to have been executed by the Defendant or which the Defendant ought to have known. The Defendant is estop from raising the issue of fraud as it is not pleaded and particularized in the Statement of Defence even though the Defendant has every opportunity to amend his Statement of Defence. [72] The Plaintiff’s application for summary judgment was accordingly allowed with costs. ( KHADIJAH BINTI IDRIS ) JUDICIAL COMMISSIONER HIGH COURT (COMMERCIAL DIVISION) DATED 29 JUNE 2018 47 Counsel: Plaintiff : Foo Joon Liang with H Y Yap of Messrs Gan Partnership Defendant :