ANTHONY WEE SOON KIM v. UBS AG HONG KONG BRANCH

cacv 96/2006

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 96 of 2006

(on appeal from HCA NO. 2005 of 2004)

______________________

BETWEEN

	ANTHONY WEE SOON KIM	Plaintiff
	and
	UBS AG HONG KONG BRANCH (formerly known as SWISS BANKCORPORATION HONG KONG BRANCH)	Defendant

______________________

Before : Hon Rogers VP and Le Pichon JA in Court

Date of Hearing : 11 January 2008

Date of Judgment : 11 January 2008

______________________

J U D G M E N T

______________________

Hon Rogers VP:

1.      This is an application for leave to appeal to the Court of Final Appeal from a judgment of this court given on 5 November 2007, whereby this court upheld the judgment in the court below striking out the statement of claim and dismissing the action on the basis, very simply, that the matters sought to be litigated in the action should have been litigated in the proceedings which had been taken in Singapore.

2.      On this application, Mr Wee, who has appeared for himself, has taken two points.  He seeks to rely, first of all, on section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484, but that relates to decisions of this court which are final decisions and not interlocutory decisions.  As was pointed out to Mr Wee in the course of argument, this court naturally had considered the matter as to whether the application before it was in respect of an interlocutory matter or in respect of a final matter.  This court was of the very firm conclusion, and it would have raised the matter with the parties if it were not, that this was an interlocutory matter.  This court so concluded it was unnecessary to express it in the judgment of 5 November.  Indeed, there had been no question raised in the course of argument on 31 October as to the point.  If there is any doubt about the matter, I say once and for all, that this was an interlocutory application.  It was a matter of strike-out under Order 18 and that is an interlocutory matter.  On that basis, the provisions of section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance cannot apply.

3.      The argument then turned to whether there were matters of great general or public importance upon which this court should grant leave under section 22(1)(b) of the Ordinance.

4.      I acknowledge that the Plaintiff has strongly held views that the Defendant had acted wrongly without instructions to the considerable detriment of the Plaintiff and, indeed, it was submitted that the Defendant has acted fraudulently.  It is the primary submission, as I understand it, of the Plaintiff that because the officers of a bank such as the Defendant have acted fraudulently that is a matter of great general or public importance which the Plaintiff should be allowed to ventilate in the Court of Final Appeal.

5.      Having considered the matters that were put forward when the matter first came before this court, I am far from convinced that there is any merit in the argument that the officers of the bank have acted wrongly.  But even if that were so, the fact that a fraud has been committed does not constitute a matter of great general or public importance.  Clearly it is a matter of importance to the parties but that is quite a separate matter.

6.      Underlying the whole basis, though, of the Plaintiff’s claim is the proposition that the Defendant’s branch in Singapore is a different legal entity from the Defendant’s branch in Hong Kong.  The matter that was referred to by the judge below in paragraph 18 of his judgment and in our judgment was simply that the Defendant was the same Defendant in Singapore and here.  It was said that this would give rise to a possibility that a party could sue the Defendant in, say, New York, London or Hong Kong on the basis of acts which had been committed in Singapore.  That is quite a separate proposition and it depends upon the rules of the court and the laws of the country relating to whether or not the court would be prepared to entertain actions in respect of matters arising abroad.  This is quite different from the question of whether or not the defendant is one entity or two entities.

7.      On that basis, therefore, I regret I do not see any grounds upon which this court should grant leave to appeal to the Court of Final Appeal and this application therefore falls to be dismissed.

Hon Le Pichon JA:

8.      I agree.

(Submissions by counsel on costs)

9.      Costs in the application.

 

 

(Anthony Rogers) Vice-President

(Doreen Le Pichon) Justice of Appeal

 

The Plaintiff/Applicant, in person

Mr Clifford Smith SC, instructed by Messrs Linklaters, for the Defendant/Respondent

cacv 96/2006

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 96 of 2006

(on appeal from HCA NO. 2005 of 2004)

______________________

BETWEEN

	ANTHONY WEE SOON KIM	Plaintiff
	and
	UBS AG HONG KONG BRANCH (formerly known as SWISS BANK CORPORATION HONG KONG BRANCH)	Defendant

______________________

Before : Hon Rogers VP and Le Pichon JA in Court

Date of Hearing : 31 October 2007

Date of Handing Down Judgment : 5 November 2007

______________________

J U D G M E N T

______________________

Hon Rogers VP:

1.  This was an appeal from a judgment of Deputy High Court Judge Carlson given on 7 February 2006 whereby he ordered that the statement of claim in this action be struck out pursuant to Order 18 rule 19(1)(b), rule 19(1)(c) and/or rule 19(1)(d) of the Rules of the High Court and/or pursuant to the inherent jurisdiction of the court on the grounds that (i) it is scandalous and vexatious; (ii) it may prejudice, embarass or delay the fair trial of the action; and/or (iii) it is an abuse of the process of the court.  In consequence the action was dismissed with costs.

2.  At the conclusion of the hearing of this appeal, judgment was reserved which we now give.

Background

3.  The plaintiff was a customer of the defendant in Singapore.  He brought an action in Singapore against the defendant on a number of bases, including fraudulent misrepresentation, negligent misrepresentation, breach of duty of care, breach of mandate and breach of instruction arising out of foreign exchange transactions.  The facts in the following paragraphs are taken largely from the judgment at first instance in Singapore.

4.  On 28 August 1997 the plaintiff entered into a one month forward contract with the defendant to buy MYR35 million from the defendant at the rate of MYR2.8818 to US$1 for value on 2 October.  On 18 September the plaintiff entered another one month forward contract to buy MYR5 million from the defendant at the rate of MYR3.02 to US$1 for value on 20 October.  In October of that year the plaintiff took delivery of the MYR40 million and he used US dollars which he borrowed from the defendant to pay for it.  On a rough calculation that would mean that the defendant would have had to borrow something in the order of US$13.8 million.

5.  In December of the same year the plaintiff was said to have adopted the “DFF Strategy” by (1) converting the whole leveraged deposit of MYR48, 806,173.83 (inclusive of accrued interest) into US dollars and investing that in a fund named the SBC Dynamic Floor Fund (“the SBC Fund”), a US dollar denominated fund, and (2) entering into a 12-month forward selling US$10,439,832.63 and buying MYR41,493,114.79 “at 3.87 (spot plus 0.1045 (swop) i.e. 3.9745 for value 6 January 1999”.  It was then said that there was a transaction which the plaintiff disapproved of which resulted him in his incurring a US$63,500 loss.

6.  On 27 July 1998 the plaintiff sold the investment in the SBC Fund and received proceeds of US$11,361,215.57.  On the same day the defendant unwound the 12-month forward contract and incurred a loss of MYR2,442,561.03.

7.  For some reason, which remains unexplained, after the Malaysian government imposed foreign exchange measures on 1 September 1998 and fixed the spot exchange rate at MYR3.80 to US$1, the defendant converted the plaintiff’s deposit on the exchange rate of MYR4 to US$1.

8.  On those facts as set out in the judgment, it can be seen that whereas the plaintiff had borrowed US$13.8 million in October 1997 he only received some US$11.36 million in July 1998.  Taking into account the further loss it appears that on the defendant’s calculation the total eventual loss was US$4,179,509.

9.  As already indicated the plaintiff sued the defendant in Singapore.  The matter not only went to trial but went to appeal.  One of the matters that was pleaded in that action was that a sum of US$4,185,000 was debited from the Hong Kong bank account maintained by the plaintiff in the defendant’s Hong Kong branch.  In that action, the plaintiff pleaded that this had been authorised by Nicholas Wood, an employee of the defendant, contrary to the instructions of the plaintiff who had faxed specific instructions to the Hong Kong branch not to act on Mr Wood’s instructions.  As already noted, there was a prayer for relief in the Singapore action in respect of breach of instructions.  Upon enquiry in the course of the hearing of this appeal, the plaintiff informed the court that this sum in the plaintiff’s bank account in Hong Kong was the proceeds of the sale of shares which the plaintiff had had sold.

10.  The plaintiff’s action in Singapore against the defendant was dismissed.  Although the transfer of the money, which the plaintiff alleged was unauthorised, had been pleaded in the Singapore action as having been an unauthorised transfer, it apparently did not feature as a ground of complaint when it came to argument at trial.  Nevertheless, it was clearly taken into account because, as the judge below observed, had the payment not been made there would have been a large sum outstanding in Singapore and by the time the action had taken place, the amount of the Singapore loan, which would otherwise not have been paid off, would have increased substantially.  The plaintiff would then, no doubt, have become liable for such a sum on a counterclaim.  Furthermore, this court’s attention was drawn to the skeleton arguments on behalf of the plaintiff in the Singapore action where it is made clear that reference was indeed made to the amount of US$4,179,509 as being the loss incurred, at least on the defendant’s calculation.

11.  In the action in Hong Kong the plaintiff’s plea is that the transfer of the US$4,185,000 was made wrongfully and without authority.  The judge below held that if such a claim were to have been made it should have been pursued in the first action.  In my view the judge below was quite correct in holding that the plaintiff cannot now litigate this matter in Hong Kong as it should have been litigated in the Singapore action and, given the fact that the plaintiff’s claim in Singapore failed, the position of the plaintiff was simply that there was a debt which had to be paid off.  Clearly the plaintiff had had the shares sold in Hong Kong in order to have that debt paid off.

12.  Whilst I am content to uphold the judge on this basis, I would simply add that it is by no means clear, when taking into account paragraphs 46 and 47 and the prayer for relief (4) in the Singapore action, that this matter was not a specific claim in the Singapore action.

13.  The other part of the plaintiff’s claim as pleaded relates to various handling and custodian charges.  It is not disputed that these had, specifically, been raised in the Singapore action.  They were not adjudicated upon because the trial judge considered that they had been dropped as part of the claim.  When the matter went to appeal in Singapore the matter was not raised again.  As the judge below correctly pointed out, this must therefore constitute a matter of Res Judicata.

14.  Whereas one can have sympathy with the plaintiff to the extent that he considered that he had been ill served by his legal representatives in Singapore, given the history of the matter, that sympathy cannot avail him as a matter of law on this aspect.  I would add that the plaintiff indicated that there were other matters in respect of which he had complaint, not least matters surrounding the foreign exchange transactions.  Those matters are not pleaded and, in any event, should have been raised in the Singapore action as well.

15.  In those circumstances I see no alternative but to dismiss this appeal with an order nisi of costs in favour of the defendant.

Hon Le Pichon JA:

16.  I agree.

 

 

(Anthony Rogers) Vice-President

(Doreen Le Pichon) Justice of Appeal

 

The Plaintiff/Appellant in person (present)

Mr Clifford Smith SC, instructed by Messrs Linklaters, for the Defendant/Respondent