Giuffrida Luigi v Julius Baer (Singapore) Ltd (in members’ voluntary liquidation) and another

Woo Bih Li J:

[1] This was an action by the plaintiff, Giuffrida Luigi (“GL”), against the first defendant, Julius Baer (Singapore) Ltd (“JBS”), a company incorporated in Singapore, which is in members’ voluntary liquidation. GL was seeking an order to reverse the rejection by the liquidators of JBS of his proof of debt dated 23 December 2008 and lodged on 30 December 2008, and for that proof of debt to be admitted by the liquidators. The second defendant, Bank Julius Baer & Co Ltd (“Bank Julius Baer”), which is incorporated in Switzerland, was added as a party to the action.

[2] In essence, GL held an account with JBS which was in credit. However, JBS said that the account had been transferred to Bank Julius Baer and that any payment obligation rests with the latter. GL’s position was that he did not consent to the transfer and he sought payment from JBS. Bank Julius Baer acknowledged GL as its customer but there was a Swiss order which had attached GL’s account with it.

[3] The details of the background that led to this action is set out in the affidavit of Goh Thien Phong (“Goh”) of Pricewaterhouse Coopers LLP filed on 13 March 2009. He is one of the liquidators of JBS appointed by a resolution passed at the Extraordinary General Meeting of JBS on 21 May 2008. He stated:

[4] GL’s position was that he did not receive the letter dated 15 March 2007 (“Letter”) and that he did not consent to the transfer of his account from JBS to Bank Julius Baer. As mentioned, he wanted the former to be liable to him for his money and not the latter.

[5] It was not disputed that Bank Julius Baer was in a financial position to pay GL and had accepted him as its customer. However, there were legal proceedings in Zurich, Switzerland, commenced by other parties, as a result of which an attachment order was made against assets of GL including, in particular, his account held with the branch of Bank Julius Baer in Singapore. Those proceedings are still continuing but GL’s position was that the attachment order (even if it was still valid) did not apply to JBS, which is a separate legal entity. If his account was still with JBS, as he contended, he was seeking payment from the liquidators of JBS.

[6] There were two main issues before me:

(a) whether the defendants could rely on cl 11.2 of certain terms and conditions to establish that JBS could transfer its obligations to another party even without the consent of GL; and

(b) whether GL had impliedly consented or was estopped from denying the transfer.

[7] It is undisputed that GL had signed an Account Mandate Master No 8500215 GOLFCLUB. There was a reference in the opening portion of the Account Mandate in cl 8.2 thereof to “Terms and Conditions”.

[8] The opening portion stated, “This Account Mandate, the Terms and Conditions, the Services Documents and the Security Documents (where applicable) shall apply to the Account and the Services and shall be binding on the client”.

[9] Clause 8.2 of the Account Mandate stated, inter alia:

[10] Initially, no set of Terms and Conditions was adduced in evidence. I was given the impression that there was none. However, on 24 August 2009 at the initial hearing of this action, counsel for the defendants said that he had just received a set of the terms and conditions referred to in the Account Mandate and produced it for consideration. In that set, cl 12.2 was relevant as it purported to allow JBS to transfer GL’s account to another party without the need for GL’s consent. Counsel for the defendants asked for and was granted leave to file an affidavit to exhibit that set of the terms and conditions. The date at the bottom of each page thereof was “09-2004”.

[11] The affidavit filed for the defendants to exhibit the terms and conditions was from Noah Kan Wai Yim, the executive director of Bank Julius Baer. However, he exhibited a different set of terms and conditions with the date “04.2002” printed at the bottom of each page and the relevant provision was cl 11.2. Clause 11.2 stated, inter alia:

[12] It was not in dispute that cl 11.2 was wide enough to allow JBS to transfer GL’s account to Bank Julius Baer without the consent of GL but the question remained as to whether the set of the terms and conditions exhibited was the set referred to in GL’s Account Mandate.

[13] Firstly, Counsel for GL pointed out that GL had signed the Account Mandate and many other banking documents but not any set of terms and conditions. Secondly, the set exhibited appeared to contain 21 pages because at the bottom of each page, there was such a reference, eg, “Page 6/21”. Yet, there were in fact 24 pages with, for example, the last two pages referring to “Page 23/21 and Page 24/21”.

[14] Thirdly, the contents page indicated that Product Conditions could be found at page 12 but was in fact starting from page 14.

[15] I accepted that it was not necessary for GL to sign the set of terms and conditions. They could have been incorporated by reference. Also, although the discrepancies pointed out could have been innocuous if seen in isolation, I took into account the totality of the circumstances which eventually led to the disclosure of this set of terms and conditions. As I mentioned earlier, no set of terms and conditions was disclosed initially. There was no hint from either of the defendants that there were standard terms and conditions which included a term to allow JBS to transfer GL’s account without the need for his consent but that the set had been misplaced. The burden was on the defendants to persuade the court that the set exhibited was the correct set and, in the circumstances, I was of the view that it had not discharged its burden.

[16] I come back to the Letter (of 15 March 2007) which purportedly informed the account holder of the matters stated in para 19 of Goh’s affidavit which I have referred to.

[17] GL did not dispute the contents of the Letter but, as mentioned above, he said that he did not receive it. It transpired that this was because he had given instructions for mail to be held by JBS. The operation of the “Hold Mail” service is governed by cl 3 of the Account Mandate which stated:

[18] In these circumstances, I did not think it was open to GL to allege that he did not receive the Letter. Under the applicable terms, the Letter was deemed to have been duly delivered to and received by him. He must have known the risks associated with a “Hold Mail” service and he voluntarily accepted the risk.

[19] The next question then was whether GL ought to have responded to the Letter and the effect of silence.

[20] In my view, the circumstances were such that GL ought to have raised an objection if he was not agreeable to the transfer of his account. A customer should not be permitted to allow the bank to think that it has his consent when he could so easily have indicated otherwise. Of course the ideal situation would have been to obtain the written consent of each and every customer but the reality of the exercise was such that some might not bother to give the consent even though they did not object. The exercise to transfer all accounts should not have to be halted because of the lack of written consent of every customer but, having said that, the transferor and transferee also take the risk that in other circumstances, the court may conclude that silence is not enough to signify consent. In Midlink Development Pte Ltd v Stansfield Group [2004] 4 SLR(R) 258 at [51], the court expressed the view that there may be a duty to speak arising from the relationship of the parties. I agreed. In view of the relationship and the Letter, there was a duty on GL to speak out, based on his deemed knowledge, if he wanted to object.

[21] However, that was not all. As I mentioned above, there were Swiss proceedings against GL. Apparently, on 1 July 2008, a Swiss attachment order was made against GL. Its terms applied to balances from account number 8500215 “which is administered at the branch in Singapore Julius Baer & Co AG (Julius Baer & Co Ltd) 1 George Street, #21-02, 049145 Singapore”. This was not a reference to a Singapore company but a branch of Bank Julius Baer (the second defendant).

[22] GL admitted that he received the Swiss attachment order on 4 August 2008. He instructed Swiss solicitors to assist him to oppose it. The opposition was contained in his letter of 7 August 2008. Para 5 and the relevant part of para 6 thereof states:

[23] GL’s solicitor, Dr Alberto Ferrari sought to explain GL’s knowledge or rather, the lack thereof, in his second affidavit filed on 1 December 2009 which stated at paras 14 to 17 as follows:

[24] It seemed to me that whether a branch of Bank Julius Baer was a separate entity from the principal or not, the point was that it must have been clear to GL and his solicitor in early August 2008 that his account was no longer being held by a Singapore company but by a branch of Bank Julius Baer. This must have been all the more important to GL if, as he had asserted, he wanted to “transact with a Singapore incorporated entity under the laws of Singapore” (see para 5 of GL’s first affidavit filed on 18 February 2009). Yet, there was no protest from him in August 2008 that the account had been transferred.

[25] On the contrary, on 12 September 2008, GL and a solicitor from Rajah & Tann LLP (his Singapore solicitors) went to the office of the second defendant in Singapore to withdraw money held in the account. GL was unsuccessful. An affidavit from Thong Chee Kun (“Thong”) of Rajah & Tann LLP was filed on 1 December 2009. He said at paras 3 to 7 as follows:

[26] I should mention that although a Swiss court had lifted the attachment order, there was apparently an appeal against the lifting order which is still in progress in Switzerland.

[27] According to GL, it was only when he received the statement of account on 12 September 2008 that he realised that the account was held by “Bank Julius Baer & Co Ltd” but this name was similar to the name “Bank Julius Baer (Singapore) Ltd”. He had thought that it was the same entity. However, there is a statement at the bottom of each page of the statement stipulating that Bank Julius Baer is “Incorporated in Switzerland”.

[28] Notwithstanding his knowledge of the terms of the Swiss attachment order and also of this statement of account, GL had proceeded to ask for withdrawal of funds but his request was not acceded to.

[29] In the circumstances, I was of the view that GL was estopped from denying that his account had been validly transferred to and held by Bank Julius Baer. I reached this view even if he did not notice the reference to the place of incorporation in the statement of account because, in my view, he nevertheless had the knowledge from the Swiss attachment order.

[30] Counsel for GL submitted that GL did not, by his request to withdraw money, acknowledge the relationship with Bank Julius Baer but that he was merely seeking to terminate that relationship. However, Thong’s affidavit showed that GL was seeking to withdraw part, not all, of the money for specific purposes.

[31] However, one other point was raised for GL. He said that he had thought all along that his account was still being held by JBS because of certain proceedings in Singapore and it was only in early November 2008 that he learned otherwise. By then, his Swiss solicitors informed him that they had received papers from the Swiss court which showed that the account had been transferred from JBS to Bank Julius Baer. Around the same time, his Singapore solicitors also advised that the two were different entities.

[32] Some two years earlier, on 7 September 2006, the Corrupt Practices Investigation Bureau (“CPIB”) in Singapore had sent a letter to “Bank Julius Baer (Singapore) Ltd” to seize GL’s account under s 68 of the Criminal Procedure Code (Cap 68, 1985 Rev Ed). GL then sought to challenge the seizure order by filing Originating Summons No 1036 of 2008 on 6 August 2008 to ask for leave to apply for a judicial review of the seizure order. Eventually, CPIB agreed to lift the seizure order which was done on 8 September 2008.

[33] According to GL, he had believed up till then that his account was with “Bank Julius Baer (Singapore) Ltd” as the seizure order was addressed to it and had not been varied. Even his application was made on that basis.

[34] I noted that the Singapore seizure order preceded the Swiss attachment order. In my view, when GL received the Swiss attachment order, he and his solicitors must have realised that the account was no longer held by a Singapore company but, apparently, it did not matter to them then. The application for judicial review in Singapore would have been made on the basis of the earlier seizure order but that did not take into account the information disclosed by the Swiss attachment order.

[35] In my view, the CPIB proceedings did not show that by early August 2008, GL still had no knowledge that his account was being held by a different entity.