Exclusion clauses in banking contracts that restrict a customer's rights are void under Section 29 of the Contracts Act 1950, especially when they lead to unfair outcomes.

JUDGMENT

Gan Techiong JC:

Introduction

[1] If all commercial banks in Malaysia are to impose the same exclusion clause as the Respondent Bank in this case when handling overseas remittance for their customers, there is much for the customers to worry about. This is so because the Respondent Bank takes the position that it is entitled to rely on exclusion clauses in its Remittance Form to disclaim all liabilities if the customer's money had been erroneously credited into the bank account of someone whose name is completely different from the beneficiary/payee's name stated in the Remittance Form.

[2] In reply to my question during the hearing of this appeal, learned counsel for the Respondent Bank confirmed the bank's position is that it would disclaim liability even if the remitted money had been erroneously credited into a bank account overseas belonging to someone whose name and account number are completely different from the name and account number stated in the Remittance Form. This revelation triggered audible gasps from the Bar Table and public gallery of this Court . The bank's position is that it would "do its best" to assist the customer to request a refund from overseas but would disclaim liability.

[3] In this case, the Respondent Bank's Remittance Form, which was duly filled in by the customer (the Appellant Customer), stated the name of the beneficiary/payee as "ALI B BEHEER BV" and its bank account is with ING Bank in the Netherlands. However, the remitted money, by way of 3 tranches, ended up being credited by ING Bank into bank accounts belonging to Hr M Masseling, Mw NR Suleman and Hr A Nour respectively.

[4] The details shall be discussed below. Suffice for now, to highlight that ING Bank refunded only about 25% of the customer's money through the Respondent Bank, and the Appellant Customer was told to go to Netherlands to sue those 3 persons who received its money.

[5] There are two main issues that arise in this case; the first is whether the Respondent Bank has breached the terms of its contract with its customer (the Appellant) because even though the bank account of the beneficiary/payee stated in its Remittance Form has not been credited with the money remitted by its customer, the Respondent Bank had refused to reimburse the customer. The second issue is whether the Respondent Bank is entitled to rely on the exclusion clause stated in its Remittance Form.

[6] After reserving decision to consider those two issues and read the authorities cited by learned counsel, I decided that this Court ought to allow the customer's appeal and hold the bank liable. My reasons are as set out below.

Background Facts

[7] The Appellant/Plaintiff (hereinafter referred to as "the Appellant Customer") is a company incorporated in Malaysia while the Respondent/Defendant (hereinafter referred to as "the Respondent Bank") carries on banking business in Malaysia.

[8] The Appellant Customer is a customer of the Respondent Bank.

[9] In March 2020, when the whole world was stricken by the Covid-19 virus which led to the government making it mandatory to wear face masks, the Appellant Customer decided to import a large quantity of face masks from Netherlands - hoping to profit from the sudden surge in demand for face masks.

[10] The Appellant Customer found a supplier by the name of ALI B BEHEER BV which place of business is in Netherlands, and decided to purchase 3 consignments of face masks from the said supplier. The ensuing events were visits to the branch of its banker (the Respondent Bank) on 24th and 26 March 2020 to remit the purchase price to the supplier ALI B BEHEER BV. The Appellant Customer was instructed by the supplier to pay into three different accounts, all bearing the same name of ALI B BEHEER BV. The details of those remittances are as pleaded in the Appellant Customer's Amended Statement of Claim, a screenshot of which is pasted below:

[11] The total amount of money remitted, in Euro currency, was €121,100.00, and the Res