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2012 MarsdenLR 88
HIGH COURT MALAYA, KUALA LUMPUR
WEE KOK BIN – Appellant
Versus
ASEAMBANKERS MALAYSIA BERHAD – Respondent
[Suit No: D2-22-962-2005]
The termination of a remisier's service and the applicability of indemnity clauses must be governed by the contractual provisions in the Standard Remisiers' Agreement, not strict liability notions.
Headnote:(A) Securities Industry Act 1983 - Indemnity Clause in Standard Remisiers' Agreement - The court considered the legality of the suspension and termination of a remisier and the extent of liability under the indemnity clause, especially regarding losses attributed to the remisier's clients due to action by the company. (Paras 4, 6, 18, 37)
(B) Suspension and Termination - The court held that the plaintiff's suspension and termination complied with contractual notice requirements, thus dismissing claims of unlawful termination. (Paras 23, 46)
(C) Claims for Defamation - The court found no substantive evidence or compliance with procedural rules for defamation claims. (Paras 47, 48)
(D) Counterclaims - The court granted the defendant's counterclaim for indemnity concerning losses under the margin and non-margin accounts, ruling that the plaintiff remained liable under the indemnity provisions of the agreement. (Paras 48, 49)
Facts of the case:
The dispute involved the plaintiff, a remisier, who was suspended and terminated by the defendant for breaching trading limits in Liqua shares, leading to alleged financial losses for the company. The plaintiff claimed unlawful termination and sought various damages and indemnities. (Paras 2, 4, 36)
Findings of Court:
The court concluded that the defendant's actions were lawful and within rights as per the Standard Remisiers' Agreement, and the plaintiff’s claims of wrongful acts by company officers were not substantiated. (Paras 46, 48)
Issues: The main issues addressed were whether the plaintiff's suspension and termination were lawful and if he had responsibility to indemnify the defendant for client losses. (Paras 23, 37, 48)
Ratio Decidendi: The court found that contractual provisions must govern relationships in stockbroking and that indemnity clauses limit liability to losses directly attributed to the remisier's actions, excluding losses due to the company's mismanagement. The plaintiff's claims were dismissed for lack of evidence. (Paras 37, 48)
Result: Plaintiff's claims dismissed; defendant's counterclaim allowed.
| Table of Content |
|---|
| 1. claims and counterclaims overview. (Para 1 , 2) |
| 2. background of the trading issues and suspension. (Para 4 , 5 , 6 , 7) |
| 3. suspicious transactions during suspension. (Para 8 , 9 , 10 , 11) |
| 4. settlement agreements and claim write-offs. (Para 12 , 14 , 16) |
| 5. indemnity clauses interaction with termination. (Para 18) |
| 6. legal status and definitions of a remisier. (Para 19 , 22) |
| 7. plaintiff's arguments against claims. (Para 25 , 26 , 27 , 28 , 29 , 30 , 33) |
| 8. evaluation of evidence and allegations. (Para 36 , 37 , 38 , 39) |
| 9. final decision and orders. (Para 48 , 49) |
Introduction
[1]The plaintiff in this case is a former remisier of the defendant, previously known as Maybank Securities Sdn Bhd, and now as Aseambankers Malaysia Berhad. The full trial itself has been long and extended, with 12 witnesses called for the plaintiff and six for the defendant. The plaintiff himself gave evidence as PW12. Nevertheless, two main issues can be identified on the facts of this case. First, whether the plaintiff was lawfully suspended from trading and subsequently terminated as the defendant's remisier or commissioned dealer's representative under a Standard Remisiers' Agreement ("SRA") executed by the parties, and secondly, whether the plaintiff remains liable to indemnify the defendant for the remaining losses sustained by his clients in respect of share dealings conducted by him on their behalf. The issue of indemnity is also covered by the defendant's counterclaim.
The Plaintiff's Prayers For Relief
[2]The details of the claims are comprehensively spelt out in the plaintiff's amended statement of claim and the defendant's counterclaim. As for the plaintiff's claims, the reliefs prayed are:
1. Compensation and/or damages arising from the defendant'salleged breach of the SRA and the defendant's unlawful termination of the plaintiff's service as its remisier;
2. Payment of the sums of RM510,000.00 and RM32,808.90 being overdue commissions under a special incentive scheme earned by the plaintiff from July to September 2004 and October 2004 respectively;
3.Damages in respect of libel/defamation resulting from the alleged unlawful suspension and termination;
4. Exemplary damages for the alleged unlawful suspension and termination;
5. Loss of earnings and consequential loss from October 2004 and continuing resulting from the unlawful suspension and termination and the loss of the plaintiff's dealer's representative licence due to the termination;
6. Refund of the plaintiff's security deposit of RM1,775,826.90;
7. An order that the defendant "do indemnify and pay to the plaintiff all losses and consequential loss incurred and/orsustained by the several direct clients of the plaintiff in respect of any dealing in/or omission to deal in Liqua shares by reason of the unlawful suspension of the plaintiff by the defendant, such losses" arising from acts of the company directors and/or employees which directly or indirectly contravene or breach any of the securities laws, the exchange rules, rules of MCD and rules of the clearing house "as provided under cl 12.4.2 of the said agreement.";
7. An order that the defendant "do indemnify and pay to the plaintiff all losses and consequential loss incurred and/or sustained by the several direct clients of the plaintiff in respect of any dealing in/or omission to deal in Liqua shares by reason of the unlawful suspension of the plaintiff by the defendant, such losses" arising from acts of the company directors and/or employees which directly or indirectly contravene or breach any of the securities laws, the exchange rules, rules of MCD and rules of the clearing house "as provided under cl 12.4.2 of the said agreement.";
8. Interest on all outstanding sums and damages at 8% per annum;
9. Costs.
The Counterclaim
[3]The defendant's counterclaim is based principally on the indemnity clause in the SRA (cl 6.1), and on this basis the defendant claims for the outstanding debts of the remisier's
