High Court dismisses couple’s negligence suit against former relationship manager at Swiss bank

The High Court has dismissed a negligence suit brought by a Singaporean businesswoman and her Canadian husband against their former relationship manager at Swiss bank Julius Baer.

In the suit, Ms Fiona Lee Hsueh Ching alleged that she was advised by Ms Loh Kia Hui in 2017 to sell certain shares and make short-term trades on the counter instead.

The Taiwan-born businesswoman claimed that Ms Loh promised to monitor the share price and inform her if the price fell below a stipulated target, but failed to do so.

Ms Loh, who left the private bank in 2019, denied giving the alleged advice and making the alleged promise.

Her lawyers, Senior Counsel Lok Vi Ming and Mr Qabir Sandhu, contended that Ms Lee had a “serious case of seller’s remorse”.

Ms Lee’s husband, Mr Sarge Sargeant, did not give evidence in the trial, as she was the one who dealt with Ms Loh on matters pertaining to their joint account with the bank.

The couple run food and beverage businesses, including Blooie’s Roadhouse restaurant in Upper Bukit Timah.

One of the issues in contention was whether a meeting took place between the two women on Sept 22, 2017, at the bank’s office.

Ms Lee said it was at this meeting that Ms Loh advised her to sell 198,600 shares in Toronto-listed Lithium Americas Corp (LAC).

She said Ms Loh advised her that she could have earned more money by capitalising on the share price fluctuations and making short-term trades.

Ms Lee said to persuade her to sell the shares, Ms Loh assured her that she would monitor the share price and inform her whenever it fell below C$1 per share, which was the target price to buy more shares.

She sold the shares at C$1.53 apiece the next day.

Two months after the sale, LAC shares were consolidated at a 5:1 ratio.

This meant each share would be worth five times as much, and the target price would have been revised to C$5.

On the other hand, Ms Loh admitted that a meeting had been arranged, but asserted that it did not in fact take place.

She said the strategy of short-term trades was one that Ms Lee had adopted on her own.

Ms Loh said the commission she would have earned per trade was low and did not provide any incentive for her to persuade Ms Lee to sell the shares.

After considering the evidence, Justice Tan concluded that the meeting did take place.

Justice Tan found that at the meeting, Ms Loh had encouraged Ms Lee to sell the shares.

The judge said it was likely that Ms Loh saw the sale of the shares as an opportunity for Ms Lee to free up some cash and hoped to persuade the businesswoman to invest the sale proceeds in mutual funds and a universal life insurance policy.

However, the judge found that Ms Loh did not advise Ms Lee to make short-term trades at the meeting or promise to inform her if the share price fell below the target price.

“To the contrary, it was Fiona’s idea to engage in short-term trading of LAC shares based on share price fluctuations,” said the judge.

These strategies would have been contrary to Ms Loh’s intention to try to eventually persuade Ms Lee to invest in funds and a universal life policy instead, said the judge.

Justice Tan added that the evidence showed that Ms Lee did not rely on Ms Loh to monitor the share price.

Ms Lee had also claimed that she would have made various trades with an overall profit of more than C$1.68 million if she had been kept informed of the share price movements.

Justice Tan said these claims were speculative, pointing out that Ms Lee’s previous attempt to make short-term trades of LAC shares on an online trading platform had resulted in a loss.

The judge also dismissed a third-party claim that Ms Loh brought against Julius Baer to indemnify her against any damages or legal costs.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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