The decision of the Singapore Court of Appeal in Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd and Chia Teck Leng [2011] SGCA 22 might be of interest to you.

The broad facts are relatively simple. The second respondent Chia Teck Leng was the Finance Manager of the first respondent Asia Pacific Breweries, and was able to make use of his position to fraudulently swindle about S$117m (about US$97m) from two foreign banks, Skandinaviska and Bayerische Hypo-Und Vereinsbank Aktiengesellschaft (the appellant in a conjoined appeal). In these appeals, the appellant banks sought to recover their losses from Asia Pacific Breweries, arguing that:

1) Asia Pacific Breweries was liable in contract on the basis that Chia Teck Leng had been given ostensible authority to enter the relevant banking transactions;

2) Asia Pacific Breweries was liable in tort on the basis that it was vicariously liable for Chia Teck Leng's fraud;

3) Asia Pacific Breweries was liable in tort on the basis that it had been negligent in preventing Chai Teck Leng's fraud; and

4) Asia Pacific Breweries was liable in unjust enrichment.

All these claims had earlier failed at first instance, save for a much smaller sum of about S$350,000 which Skandinaviska was successful in claiming in unjust enrichment.

In the course of its decision dismissing the banks' appeals, the Court of Appeal had interesting things to say about First Energy (UK) Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd's Rep 194 (to be confined to its facts, and probably wrongly decided); the "close connection" test for vicarious liability (endorsed as the test for all cases of vicarious liability and not just those involving sexual abuse, and "conceptually" similar to the Anns v Merton LBC test for the existence of a duty of care in tort so that both tests should normally produce the same results); and unjust enrichment.

Kind regards,

Colin Liew