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2021 MarsdenLR 2584
HIGH COURT MALAYA KUALA LUMPUR
SYED MUDZAFFAR SYED ZAINUL ABIDIN – Appellant
Versus
KENANGA INVESTMENT BANK BERHAD & ANOTHER CASE – Respondent
[Civil Appeal Nos: WA-12ANCC-7-01/2021 & WA-12ANCC-8-01/2021]
An individual cannot evade liability for independent trading decisions based on alleged negligence by a financial institution when they have accepted the institution's terms of service.
Headnote:(A) Rules of Court 2012 – Order 14 and Order 18 – Application for summary judgment and striking out counterclaim – Emails and notifications issued, deemed to have been received by the Client despite non-acknowledgment – Client's own decisions led to incurred losses, implying negligence not established against the Bank – Court dismissed Appeals against the Sessions Court's decision. (Paras [2], [73], [76])
Facts of the case: The Appellant appealed against the Sessions Court's decisions allowing the Respondent's application for summary judgment and to strike out the Appellant's counterclaim concerning losses from trades on shares.
Findings of Court: The Appellant failed to show valid grounds for contending that the Bank was negligent in allowing trades which subsequently incurred losses, decisions made by Appellant were sole and independent. (Paras [72], [74])
Issues: Whether the Appellant was bound by the Bank's terms and conditions and the assertion of the Respondent's negligence. (Paras [20], [72])
Ratio Decidendi: The court found that the Appellant had accepted the bank's terms implicitly by using its trading platform, and his losses stemmed from his own insufficient oversight rather than negligence on part of the Bank. (Paras [28], [52])
Result: Appeals dismissed, with costs awarded to the Respondent. (Para [76])
JUDGMENT
[1] This judgment is in respect of the Appellant's (Defendant in the Sessions Court) appeals against two decisions of the Sessions Court on 24 December 2020:
i) allowing the Respondent's (Plaintiff in the Session Court) application for summary judgment under O 14 of the Rules of , 2012 (" ROC ") against the Respondent ("Respondent's O 14 Application") ("Appeal 7"); and
ii) allowing the Respondent's application to strike out the Appellant's Counterclaim dated 25 September 2020 under O 18 r 19(a) or (b) or (d) ROC against the Respondent ("Respondent's O 18 Application") ("Appeal 8").
(collectively referred to as "the Appeals")
[2] Following an application by the Appellant to consolidate Appeal 7 and Appeal 8, I had on 15 February 2021 ordered that both the Appeals be heard together.
A] Background
The Respondent's Claim
[3] The Appellant had on or about 7 May 2009 opened an individual trading account with ECM Libra Investment Bank which was subsequently acquired by the Respondent. The Appellant's customer code is SY0502180 and the Appellant's Central Depository System ("CDS") account number is 049014749 ("Appellant's Trading Account").
[4] The trading of shares on the Respondent's platform is subject to the Respondent's terms and conditions and the Appellant's CDS account is subject to the provisions of Bursa Malaysia Depository Sdn Bhd.
[5] The Respondent had issued a letter dated 1 April 2013 ("Respondent's 1 April 2013 Letter") to the Appellant to notify him of new terms and conditions in relation to the Appellant's Trading Account which were applicable from 1 May 2013 ("1 April 2013 Terms of Conditions"). The 1 April 2013 Terms and Conditions which were enclosed with the Respondent's 1 April 2013 Letter were superseded by the terms and conditions dated 2 August 2019 ("2 August 2019 Terms and Conditions"). Amongst others, the salient terms of the 2 August 2019 Terms and Conditions are as follows:
"2.1 The Form and the Terms shall form an integral part of the contractual relationship between the Client and the Bank. The Bank's provision of Services to the Client shall be subject to the Terms, the contents in the Form and the Website Terms as well as any additional terms and conditions introduced by the Bank at its own discretion from time to time, including but not limited to terms and conditions on pledged Securities. The Website Terms shall be read together with and as part of the Terms and the Form.
2.2 Utilisation by the Client of any of the facilities and/or Services provided by the Bank shall be deemed as acceptance of the Terms regardless of whether the Client executes the Form. The provisions and contents in the Form shall continue to apply and subsist notwithstanding the cessation of use of any facilities or Services by the Client."
....
"5.1 The Client hereby irrevocably and unconditionally authorises the Bank, to the extent permitted by law, to carry out any of the following:-
5.1.1 debit any of the Clients' Account in respect of any Indebtedness ;
5.1.2 set off against any Client's Account(s) in or towards settlement of the Indebtedness or any part thereof;
5.1.3 suspend or close any of the Client's Account(s) without giving any reasons whatsoever;
5.13 Settlement by way of "contra" to set off outstanding purchase positions against outstanding sale positions of the same Securities for 'ready basis' contracts may be allowed at the discretion of the Bank. If so allowed, such settlement shall be further subject to the following terms:
5.13.4 interest is chargeable on all outstanding contra losses commencing the day after the contra loss crystallized at the prevailing interest rate calculated. Any indulgence granted on the calculation of interest shall not constitute a waiver of the Bank's rights;"
....
"10.23 Any acknowledgment, notification or statement issued or published by the Bank via the E-Services shall be deemed to have been received by the Client when the same was issued or published by the B
