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DCCJ 1726/2011
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IN THE DISTRICT COURT OF THE

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HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 1726 OF 2011

BETWEEN SHUM KIN YEE and Plaintiff

DBS BANK HONG KONG LIMITED

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Defendant
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Before: His Hon Judge Leung in court

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Date of Hearing: 3; 4; 7 December 2012 Date of Judgment: 31 July 2013

JUDGMENT

1.

The worldwide financial crisis following the collapse of

Lehman Brothers in the United States in 2008 needs no introduction. The plaintiff (Shum) was an investor who suffered from its aftermath. He

now claims for the loss of his investment in a financial product known as Series 74 Hong Kong Dollar Callable Credit-Linked Note (the Note) against the defendant (DBSHK). The complaint is essentially mis-

selling of the Note to him by DBSHK in Hong Kong in May 2007.

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2.
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Shum reads and writes English; and most of the documents To facilitate Shum, the trial was conducted in both
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were in English.

languages with the medium in court predominantly Chinese. THE NOTE 3. In early 2007, Constellation Investment Limited (CIL)

issued various series of credit-linked notes including Series 74, ie the Note.
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DBS Bank Ltd in Singapore (DBS) was the arranger. The Note, amongst other series, was described as structured retail note and distributed through various retail banks in Hong Kong to the public at the material time.

DBSHK was one of those distributing banks.

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4.
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The Note, among other series, was credit-linked to a basket of

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8 reference entities, which were rated AAA class by the 3 major rating agencies, namely, Standard & Poor, Moodys and Fitch, as at the time of the distribution, ie April 2007. In the order of their credit ratings, they

consisted of: (1) (2) Goldman Sachs; Merrill Lynch; Morgan Stanley; Lehman Brothers; Bear Stearns Companies Inc; Sun Hung Kai Properties; Coca-Cola Enterprises Inc; and Hutchison Whampoa Limited.

(3) (4) (5)

(6) (7) (8)

5.
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Essentially the investors in the Note, for the projected return,

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took the risk that none of the reference entities would suffer what was known as a credit event. A credit event included:

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(1)
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the bankruptcy or insolvency of the reference entity; failure of the reference entity to meet its payment or
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(2)

guarantee obligation; (3) or restructuring as a result of deterioration of

creditworthiness or financial condition. The notes were secured by collateral and swap agreements that enabled the issuer to meet its payment obligation under the notes.

6.
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The maturity date of the Note was expected to be 23 May 2012.

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A potential return of 5.2% per annum in the first 4 years and 6% per annum in the subsequent 1 year was projected. If no credit event or early

redemption event or event of default occurred, the Note would be

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redeemable at 100% principal amount on the maturity date. If a credit event occurred to a reference entity, the redemption value would be substantially less than the principal amount.

SHUM
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7.

Shum had been a customer of the DBSHK branch at Metro

Plaza at Tseung Kwan O (the Branch) before the transaction involving

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the Note. On 12 December 2005, Shum opened a packaged account there.

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In his application form for opening the account, he revealed that he was born in 1963 and a university graduate. In court, he confirmed that he has acquired the qualification of certified public accountant. He was then

working as a full-time senior financial manager for EXCEL HK Ltd.

8.
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On 24 July 2006, Shum visited the Branch and completed an

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Investment Profiling Questionnaire (IPQ) with the assistance of

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relationship manager Ms But (But). The IPQ gave the following profile
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of Shum as an investor: (1) He had 6-10 years of experience in investment products,

including shares and investment funds.

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(2)

Recognising higher gain involved greater risk, he

expected to take medium to high risk (15-24% of maximum annual capital loss at one point of time).

(3)

In terms of investment objective on a scale of A to E,

ranging from aggressive capital gain to regular steady return, he chose B.

(4)

His attitude towards investment risks was that he was a

cautious investor who could assume some risks to enhance potential returns of his investment.

(5)

On a scale of A to E, ranging from high to no volatility,

return and risk, he would be prepared to accept above average volatility, return and risk over a 10-year investment horizon.

9.

Shum was thus profiled as a growth type of investor with a

medium to high risk tolerance. By signing the IPQ, Shum declared his
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acceptance such profiling based on his own judgment.

10.
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At the time when he went to the Branch on 5 May 2007, he

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was working as the financial controller of DHL Logistics, which, according to him in court, was the same group that he had been working for as before.

SUBSCRIPTION TO THE NOTE 11. In court, he explained that he visited the Branch on 5 May

2007, after having seen the advertisement in respect of the distribution of

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the series of notes. There is dispute as to whether he also met with But on
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that occasion; but it is common ground that he did meet another relationship manager at the Branch, Ms Choy (Choy).

12.

At the trial, both But and Choy gave evidence for DBSHK.

By then, Choy was no longer an employee of DBSHK.

13.

Back to 5 May 2007, Choy completed an investment Products

Consolidated Application Form (the Application Form) and a Callable Credit-linked Notes Order Form (the Order Form) with Shum on that

occasion. It was by these forms Shum contracted to subscribe for the Note. The principal amount of the Notes, and thus the application amount, was HK$690,000. Shum signed both documents before leaving the Branch.

The forms were printed in Chinese (but the corresponding English versions were produced as well for the purpose of the trial). THE COMMENCEMENT OF ACTION 14. The bankruptcy of Lehman Brothers in September 2008

constituted a credit event to this reference entity of the Note. This, as

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mentioned, triggered the early redemption of the Note and at nil value.
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Since then, Shum had made enquiries and eventually complaint to DBSHK as well as various authorities about the loss of his investment. 15. 16. In 2011, Shum commenced the present action. In his statement of claim, Shum contends that Choy

represented that the Note was low risk. It will be seen below that this was
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in line with DBSHKs categorisation of the risk level of such investment, namely low to medium risk. He also set out his understanding of the

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advertisement brochure, which is understood to be referring to the sales

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pamphlet (the Pamphlet) and the issue prospectus (the Issue Prospectus). Shum claims damages representing the sum of HK$690,000 that he invested on the following grounds:

(1)

DBSHK failed to make accurate and not misleading

representations. This sounds like misrepresentation (though alleged in a negative way) and non-disclosure.

(2)

DBSHK did not make formal assessment before selling

the Note to him, in view of the upper loss that he was willing to take (15-24%) according to the IPQ done by him more than

a year before.

17.
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In defence, DBSHK contends that it was both But and Choy

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who served Shum at the Branch on the material day. It was But who explained to him the features of the Note with reference to the terms of both the Pamphlet and the Issue Prospectus. Despite Buts suggestion that

he should consider diversifying his investment into other products, Shum decided to invest in the Note. Choy then took him through the contents of the Application Form and the Order Form before he signed them to confirm

his order. 18. DBSHK contends that the relationship between the bank and

Shum was at all material times governed by the terms of the documents signed by Shum and the Investment Products Consolidated Terms and

Conditions (the Consolidated Terms). 19. DBSHK also raises the issue of causation. It contends that it

was not the alleged misrepresentation or the subscription of the Note, but

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the adverse market conditions prevailing around the time of the collapse of
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Lehman Brothers in September 2008, that caused Shums loss. 20. DBSHK also contends that the collapse of Lehman Brothers

and the resultant substantial fall in the value of the Note were not reasonably foreseeable at the time when Shum subscribed to the Note.

Therefore the loss of Shum is too remoteness to be recoverable in any event. 21. Shum has since filed his reply and from time to time

documents either for the purpose of reiterating his case or in support of his contentions. New points were made as well. By the time of closing

submission, he has expanded his contentions to become that what happened

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to him was no different from a set up or fraud by DBSHK. 22. complaints: (1) He understood that the occurrence of a credit event to a As far as one discern, Shum has the following major

reference entity would not result in substantial loss because the risk would have spread over the 8 entities. The loss should therefore be limited to 1/8 of the principal.

(2)

On this basis, he blames DBSHK (and Choy) for failing

to make accurate representation of the nature of the Note and risk. He also criticises the promotional materials, mainly the

Pamphlet and the Issue Prospectus, for being confusing, misleading or contradictory. (3) He criticises the grading of the risk of the investment in

the Note given by DBSHK. Further the risks associated with Bear Stearns and the so-called sub-prime risks should have been disclosed to him.

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(4)
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He believes that CIL, DBS and DBSHK were in conflict

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of interest, and that they gained from investors losses in the investments. (5) DBSHK has been in breach of sections 107 and 108 of

the Securities and Futures Ordinance Cap 571 (SFO) as well as the Code of Conduct.

23.

Whilst the court may still try to deal with the points raised by

Shum as far as they were argued, I indicated when the trial began that the bottom line must be that the parties are primarily bound by their pleaded

cases. WHAT HAPPENED ON 5 MAY 2007 24. Shum is adamant that he met only Choy at the Branch on 5

May 2007. But and Choy said to the contrary. According to them, Choy indeed greeted Shum when he came armed with an advertisement of the

series of note issued by CIL. Shum wanted to enquire about investing in

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them. Upon that, Choy retrieved from the record Shums IPQ mentioned above. It was still within 1 year of the IPQ (dated 24 July 2006). As

mentioned, Shums investor profile belonged to the growth type who is

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ready to tolerate medium to high risk.

25.
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Choy commenced her employment with DBSHK early that

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year; and had never met Shum before. In court, she explained that she was actually about to leave the job and was therefore concerned about the continuity in handling Shums account. She therefore asked for But, who

was both more senior and Shums former relationship manager, to assist in handling Shums case together. But agreed to do so.

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26.

There is dispute as to whether a programme memorandum

(the Programme Memorandum) of the issue of the notes was provided

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to Shum on the occasion.

But it is common ground that Shum was

provided with the Pamphlet and the Issue Prospectus. 27. According to But and Choy, in the course of explaining the

Note, But took Shum through the Pamphlet and the Issue Prospectus. The
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following features and risks printed on the documents were highlighted in the conversation: (1) The Note was not principal protected.

(2)
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The Note was credit linked to a basket of reference

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entities. (3) Interest would be paid regularly.

(4)
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If there was no credit event or early redemption or event

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of default, the redemption value of the Note on the maturity date would be 100% of the principal amount.

(5)
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A credit event included bankruptcy of any one of the

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reference entities. (6) If a credit event occurred to any one of the reference

entities, the credit event redemption amount would likely be

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substantially less than the principal amount. 28. According to But, she explained to Shum that in case of a

credit event such as bankruptcy of a reference entity, he could lose the principal amount of his investment. The exact amount of the loss could

only be ascertained after the event.

29.
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But also provided for Shums consideration information about

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other investment products which were not credit linked notes, namely, AB

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Global High Yield Portfolio USD and AB American Income Portfolio USD.
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Both were open-ended funds. However Shum was not interested in these proposed alternatives. 30. But invited Shum to study the Pamphlet and the Issue

Prospectus before deciding to subscribe to the Note, which Shum did on his
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own. According to Shum, he was conscious of turning his attention to the sections on risks, warning and important notices in the Pamphlet and the Issue Prospectus (which are set out below). In court, he confirmed that that

must have taken 10 minutes or more. 31. According to But and Choy, Shum explained that his

occupation or business required him to stay at the Mainland most time of the week; and he had time in Hong Kong only during weekend. That Shum

was then required to work in the Mainland most time of the week is not in
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dispute. Nor is the fact that 5 May 2007 was a Saturday. So there and then, Shum decided to place order for the Note.

32.

There is no dispute that it was Choy who handled the

documentation, i.e., the Application Form and the Order Form, with Shum.
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According to her, she took Shum through the various parts of the
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Application Form. In accordance with the information provided by Shum, Choy filled in the form. Choy then turned to the Order Form. In court, Shum agreed that the relevant boxes in the Order Form were ticked and he

understood their contents. TERMS OF THE DOCUMENTS The Pamphlet

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33.
B

Both the Chinese and English versions of the Pamphlet were

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produced at the trial.

34.
D

Specifically the Pamphlet explained the nature of the reference

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obligation of a reference entity, which was a subordinated obligation, and: upon a credit event, a reference entitys subordinate obligation is likely to have a value which is substantially less than its senior and unsubordinated obligations, and therefore any credit event redemption amount is likely to be less than what would have been if the reference obligation was a senior and unsubordinated obligation. Therefore, the Pamphlet further provided the ratings of the reference obligations of the first 5 reference entities by the 3 rating agencies mentioned above (which, due to their nature, were lower than the ratings

given to the entities themselves).

35.
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Besides a summary of the main terms of the Note (as

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mentioned above), the Pamphlet contained, in bold print, the following notice: Risk Factors/Important Notice
This is a summary only of some of the principal features of the Notes. The Notes are not principal protected. Investments involve risks. You may lose all or part of your investment. You must carefully read the Issue Prospectus dated 18 April 2007 before deciding whether or not to invest in the Notes, and study in detail matters and risks set out in the Programme Memorandum and the Issue Prospectus, in particular the sections headed How can I buy some Notes and Investment Risk You should ensure you understand the nature of all the risks before investing in the Notes. Structured products such as the Notes are not suitable for inexperienced investors. If you are uncertain about the suitability of the Notes for your personal circumstances, you should consult your professional advisers. Ask any of the distributors for a copy of our prospectus

The Issue Prospectus

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36.
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The Pamphlet, in relation to the credit event, also referred the

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reader to refer to the Issue Prospectus for details. The Issue Prospectus began with the following important notice: If you are in any doubt about any of the contents of this issue prospectus,
you should obtain independent professional advice. We cannot give you investment advice; you must decide for yourself, after taking professional advice if appropriate, whether our Notes meet your investment needs.

37.
G

Besides setting out the main terms (at pp.3-4) as summarised

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by But (as mentioned above), the Issue Prospectus set out (at pp.8-10) in detail the following main features of the Note in a question-and-answer format:

(1) (2)

What does credit-linked mean? How is the credit redemption amount calculated? When

is it paid?
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(3) (4) (5)

What are credit events? When will the Notes be repaid? What is the call option? Are the Notes principal protected? Who decides if there is a credit event? Who makes

(6)

decisions under the Notes? (7) How do I know if there is a credit event? Who should buy the Notes? Are they suitable for

(8)

everyone?

38.

Particularly, the answer to question (5) above was as follows: Our Notes are not principal protected: if a credit event happens to any
one of the 8 reference entities before the maturity date, you will lose part, and possibly all, of your investment.

39.

The answer to question (8) above was as follows:

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Our Notes are not suitable for everyone. You should make sure you
understand how our Notes work and that an investment in our Notes is appropriate for you in light of your own individual financial position and investment objectives before deciding whether or not to invest. Our Notes are only suitable for investors who are: confident that none of the 8 named reference entities will be affected by a credit event (that is, Bankruptcy, Failure to Pay or Restructuring, which include events such as a major borrowing default, bankruptcy or adverse debt restructuring) between the issue date and the maturity date of our Notes and who are able to take the risk that they may lose their investment if one of these events does happen;

The Application Form

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40.
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Shum signed the Chinese version of the Application Form. Of

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the form, the boxes next to Sections A, B, C, D and E of the Risk

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Disclosure Statements were ticked, indicating his understanding and acceptance of the risks of trading in different types of financial products.

Section D concerned structured investment deposit.

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41.
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By signing the Application Form, Shum acknowledged and

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gave the following Customer Declaration and Undertaking:

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//
/ / / /

42.
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According to the English version of the form, it meant: I/We have been provided with the Risk Disclosure Statements in a language I/we understand and have been asked to read the Risk Disclosure Statements, ask questions and take independent professional advice if I/we have any doubts the contents of these Statements. In
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particular, the Bank is not advising me/us or giving me/us any assurance or guarantee regarding any expected outcome of the Order. I/We confirm that I/we have fully understood the risks in respect of my/our investment.

43.

Shum also expressly acknowledged that he had received the

Chinese version of the Investment Products Consolidated Terms and

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Conditions (which will be referred to below); and that he received and accepted the relevant risks by signing the Risk Disclosure Statements & Customer Declaration and Undertaking of the Application Form.

The Order Form

44.

The Order Form contained a Risk Disclosure Statement. Each

paragraph of the statement was ticked, signifying Shums understanding and acceptance of the same. They read as follows: /
/ / /_/ ()/ a) / b) / / c) / (/ )

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/
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/ 71-72 7 73-74 5

45.
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The equivalent parts of the English version of the Order Form

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read as follows: I/We understand and accept the Notes are NOT principal protected
and are subject to the following key investment risks: Credit Event of any of the Reference Entities, Credit risk of the Issuer and Swap Counterparty; Collateral risk; and Market risk. One or more of these could lead to my/our losing part, and possibly all of my/our investment. I/We understand and accept the Notes are linked to the credit of the Reference Entities on a first-to-default basis. This means that if any of the Reference Entities suffers a Credit Event, the value of the Notes is likely to drop substantially. This drop is usually much more than fall in value of the defaulted Reference Entity. I/We fully understand these Notes may continue for a tenor of up to __ years and I/we have NO right of early termination (or other early repayment). Having carefully considered: (a) My/our likely financial needs over that tenor; (b) My/our investment portfolio to ensure that these Notes will fit to form a balance portfolio according to my/our investment objectives and (c) The other sources of finance I/we will have available (which I/we consider will be adequate for my/our needs during that tenor) I/we acknowledge this tenor is acceptable and appropriate for me/us and that I/we wish to invest even though this tenor may be longer than my our preferred investment period shown on my/our Investment Profile Questionnaire (or other record) previously made with the Bank.* *Note if you have any questions or wish to discuss the tenor or other aspects, please do so with the Bank staff or your professional advisor before proceeding.

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I/We understand that the Notes are designed to be held to maturity. For Series 71-72 Notes, this is 7 years; For Series 73-74, this is 5 years. The above is a brief highlight list only. It is not a complete explanation of all the risks you face if you invest in the Notes. Potential investors should read, understand and agree to the Terms & Conditions on the Issue Prospectus, Programme Memorandum and Base Disclosure Document and should consult their own professional advisers before investing in the Notes.

Investment Products Consolidated Terms and Conditions

46.

The Investment Products Consolidated Terms and Conditions

(the Consolidated Terms) referred to in both the Application Form and the Order Form above contained, among others, the following provisions:

Not your investment adviser 6.1. Any information provided is for reference only and no reliance should be placed on any conversations that take place with DBS personnel. In respect of any transaction with the Customer, DBS is not acting as an adviser or in a fiduciary capacity to the Customer. DBS has not given any representation, guarantee or other assurance as to the outcome of any investment. Customers should seek their own investment advice from a suitably qualified adviser. 6.2 The Customer represents to DBS that as of the date of giving any relevant instruction and entering into any Transaction, that: (a) he/she is fully capable of assessing the merits of and understanding (where needed, with or through independent professional advice), and fully understands and accepts, the terms, conditions and risks of the resulting transaction and he/she also fully understands and is capable of assuming and assumes, the risks of the Transactions;(b) he/she is acting on his/her own account and has reviewed carefully his/her specific financial needs and investment objectives, and has made his/her own independent decisions to enter into the Transaction and as to the legality, suitability and appropriateness of the Transaction based upon his/her own judgment and upon advice from such advisers as he/she is deemed necessary; (c) he/she is not relying on any communication (written or oral) of DBS as investment advice or as a recommendation to enter into the Transaction. The Customer understands that information and explanations provided by DBS incuding in relation to the terms and conditions of the Transaction, shall not be considered as

6.

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(d)

investment advice or a recommendation to enter into the Transaction; and No communication (written or oral) received from DBS shall be deemed to be an assurance representation or guarantee as to the expected results of the Transaction.

7. Customer representations 7.1 The Customer makes the following representations to DBS (which representations will be deemed to be repeated by the Customer each time a Transaction is entered into): (a) The Customer has read, understood and accepted in full the provisions in these terms and conditions and the risk disclosure statements on the relevant account application form/Order Forms as distributed by DBS; (g) the Customer is fully aware of the risks involved in investing in the Investment Product and has read, understood and accepted the relevant risk disclosure statements; 9. Limitations on DBSs liability 9.6 Notwithstanding that the Customer may have informed DBS of any investment objectives of the Customer, the Customer shall be solely responsible for: (a) making the Customers own independent investigation and appraisal of the Investment Products with which the Customer intends to deal; and (b) making the Customers own independent decision in dealing with the Investment Products. The Customer shall be solely responsible for such Instructions which shall be deemed to be given on his own judgment and at his sole risk whether or not DBS has given to the Customer any advice, recommendation, commentaries, financial information or data.

RELATIONSHIP BETWEEN DBSHK AND SHUM

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47.

As mentioned, DBSHK contends that the terms of the above

documents governed its relationship with Shum in respect of his investment

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in the Note.

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48.
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Ellingers Modern Banking Law (5th ed) (at p.160) has this to

say about the reluctance of the bank to assume a duty in relation to the customers dealings in risky and speculative financial products: the courts understandable reluctance to impose a contractual or
common law duty of care on banks is not limited to the provision of ordinary banking services or products. A similar tendency is discernible in relation to banking products that are particularly risky, sophisticated, unusual, and is discernible in circumstances where a bank provides its customer with financing that he uses for speculative dealings or to enter risky transactions (such as currency futures or commodities), and the customer subsequently complains that its losses result from the banks failure to warn him of a particular risk or particular market condition.

49.
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Recently, in Kwok Wai Hung Selina v HSBC, HCCL 7/2010

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(21 June 2012), the plaintiff claimed against the defendant bank for loss in
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trading in forward accumulator contracts. The plaintiff contended that the bank owed her, among others, the following duties:

(1)
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to advise her; to provide accurate and fair information in relation to

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(2)

her account;
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(3)
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to inform and warn her of risks in relation to her account; not to sell financial products to her that were unsuitable
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(4)

for her known risk appetite, investment objective and net

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worth.
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50.
P

Reyes J (as he then was) rejected such contention (with

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reference to the facts and terms of the contractual documents in that case, which bear similarity to those in the present one): 102. The Account Opening Booklet made it clear by the Risk
Disclosure Statement that the account being opened by Ms Kwok was an execution-only account. It was an execution-only account in the sense that HSBC was not to be regarded as offering investment advice of any nature in connection with the account. 103. While HSBC might make recommendations from time to time, it was ultimately (the Statement stressed) for a client to assess whether a

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particular transaction was suitable in light of that clients financial condition, risk tolerance and investment experience. The Statement expressly warned that the investment risks associated with a financial product might be substantial and, if in any doubt about whether a product was suitable, the client should seek independent third party advice. 105. Second, it is also en elementary principle of contract law that one cannot imply obligations which are contrary to the express terms of an agreement. 106. Thus, the alleged duty to advise would be contrary to what the Risk Disclosure Statement expressly says. HSBC might state a house view on a proposed investment from time to time, but the client should not regard that as advice. The client must make up his or her own mind in light of his or her own personal circumstances. 109. As for risks, the Statement disclosed the risks involved in various financial transactions in some detail and urged Ms Kwok to seek independent advice if she was in any way uncertain of her position or what to do. 111. Further, the evidence suggests that Ms Chau did explain the terms of ELN, FAs and Fabers to Ms Kwok

51.
L

Likewise, the Pamphlet and the Issue Prospectus made clear

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that DBSHK did not assume the duty to provide any investment advice; and any communication with the customer should not be construed as

advice or recommendation. If in doubt, the customer was advised to seek

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professional advice. The repetitive provisions should leave one with no doubt that the relationship between DBSHK and Shum was not one of

investment adviser and investor.

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52.
Q

In his submission, Shum questioned who in practice would

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actually get to read the terms of such documents before committing by appending his or her signature to them. 53. As matter of law, the terms of the Pamphlet, the Issue

Prospectus and the Consolidated Terms were binding, whether he had read
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them or all parts of them before signing: see Ming Shiu Chung v Ming Shiu

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Sum (2006) HKCFAR 334 (at 84, per Ribeiro PJ); and whether DBSHK
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had read and explain them to him: see Kincheng Bank v Kao Yu Kuei [1986] HKC 212. 54. As a matter of fact, as mentioned, Shum admitted during the

trial that he did read the Pamphlet and part of the Issue Prospectus before
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proceeding to complete the Application Form. He might have spent 10 minutes or so; and presumably not read the entirety of the documents. However he was conscious of focusing his attention on the sections on the

risk factor and important notice. He also agreed that he read the part of the Issue Prospectus containing the warning that he was advised to obtain independent professional advice.

55.
J

In court, Shum argued that it was not realistic or reasonable to

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expect a potential investor to obtain independent professional advice for an

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investment of insignificant amount. As I pointed out during the trial, it could only be a matter for the customer, not the bank, to decide if the

investment was significant enough for him or her to warrant the obtaining
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of independent investment advice. The law does not differentiate situations by reference to the amount of investment involved in affording the bank

with or depriving the bank of the right to rely on the contractual disclaimer
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of duty or liability as investment advisor. 56. Importantly it is not suggested that Shum was prevented from

taking his time. In court, he mentioned that he actually lived quite near to the Branch. It was his considered decision to proceed with the order on the

very day because of his own circumstances and convenience. 57. Shum referred to the case of Morgan Chase Bank v Springwell

Navigation Corp [2010] 2 CLC 705. In that case, the English Court of

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Appeal considered, among others, the doctrine of contractual estoppel.

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Aitkens LJ (at 748-749) had this to say in principle: 143 if A and B enter into a contract then, unless there is some
principle of law or statute to the contrary, they are entitled to agree what they like. Unless Lowe v Lombank [[1960] 1 WLR 196] is authority to the contrary, there is no legal principal that states that parties cannot agree to assume that a certain state of affairs in the case at the time the contract is concluded or has been so in the past, even if that is not the case, so that the contract is made upon the basis that the present or past facts are as stated and agreed by the parties 144. So, in principle and always depending on the precise construction of contractual wording, I would say that A and B can agree that A had made no pre-contract representations to B about the quality or nature of a financial instrument that A is selling to B. Should it make any difference that both A and B know at and before making the contract, that A did, in fact, make representations, so that the statement that A had not is contrary to what each side knows is the case? Apart from the remarks of Diplock J in Lowe v Lombanks, Mr Brindle did not show us any case that might support the proposition that parties cannot agree that X is the case even if both know that is not so, I am unaware of any legal principle to that effectLike Moore-Bick LJ in Peekay 162 I see commercial utility in such clauses being enforceable, so that parties know precisely the basis on which they are entering into their contractual relationship.

58.

In the case of Peekay that Aitkens LJ adopted, the New

Zealand Court of Appeal held (at 56) there was no reason in principle why
M

parties to a contract should not agree that a certain state of affairs should form the basis for the transactions, whether it be the case or not. In the context of investment, Moore-Bick J had this say (at 60):

The purpose of the Risk Disclosure Statement was both to draw to the
attention of the investor the need for caution when investing in emerging markets and to make it clear that ANZ was only willing to enter into a contract with him on the assumption that he had satisfied himself that the transaction was suitable for him. By confirming that he had read and understood the statement and returning it with his instructions to make the investment Mr Pawani offered to enter into an contract with ANZ on behalf of Peekay on those terms and that offer was accepted by the bank when it implemented his instructions. As a result it was part of the contract between them that Peekay was aware of the nature of the investment it was seeking to purchase and had satisfied that it was suitable for its needs. In those circumstances, and since it is not suggested that the bank misrepresented to Mr Pawani the effect of the documents, I do not think that it is open to Peekay to say that it did not

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understand the nature of the transaction described in the FTCs; and if that is so, it cannot assert that it was induced to enter into the contract by a misunderstanding of the nature of the investment derived from what Mrs Balasubramaniam had said about the product some days earlier.

59.
D

Aitkens LJ concluded (at 155) that Lowe v Lombank was not

D

an authority contrary to the above analysis.

E E

60.
F

In his submission, Shum submitted that if the terms of the

F

documents were unreasonable, as he found them to be, he should not be

G

bound by them. As to that, Aitkens LJ had this to say: 177. To my mind, once it is accepted that there is a separate
doctrine of contractual estoppel then there is no room for a requirement that the party which wishes to rely on that estoppels must demonstrate that it would be unconscionable for the other party to resile from the conventional state of affairs that the parties have assumed. The reason why that is a requirement in a case of estoppel by convention is precisely because there is no contract between the parties. Therefore some other mechanism has to come into play to make the non-contractual convention enforceable. 178. Mr Brindle relied on the statement of Peter Gibson J in HamelSmith v Pycroft and Jetsave 197 that the ability to rely on an estoppel by convention is governed by considerations of justice and equity. Therefore, before an estoppel by convention can be enforced it is necessary to demonstrate that it would be unjust and unconscionable for one of the parties (against whom it is sought to enforce the convention) to resile from itBut, in my view, it is irrelevant to the doctrine of contractual estoppel for the reasons that I have given.

61.
P

Short of misrepresentation, which would have vitiated the

P

contract anyway, the application of the doctrine of contractual estoppel as a result of the parties agreement to be bound by a certain state of affairs is not qualified by whether it is thought to be just or conscionable.

62.

Mr Ho SC submitted that the case of Springwell actually

supports the position of DBSHK in reliance of the terms of the contractual

T T

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documents; and that this is consistent with the reasoning in Kwok Wai Hing
B

Selina (also referred to by Shum above). I agree. 63. On the above basis, I proceed to consider the various major

complaints by Shum. MISREPRESENTATION AND NON-DISCLOSURE

64.

Shum complains that he was misled into believing that if one

of the reference entities was affected by a credit event, the loss would be spread over the 8 reference entities and thus limited to 1/8 of the principal

amount of his investment. He complains that Choy did not explain that if a
I

credit event occurred to any of the reference entities, the credit redemption value of the Note could in fact be substantially less than the principal

amount. He argued that in that case, DBSHK should not have graded the
K

risk of the investment in the Note as low to medium.

65.
M

Mr Ho, appearing with Mr Dawes, for DBSHK provided a

M

summary of the law on misrepresentation in the context of investment claims given by Clark J in Raiffeisen Zentralbank Osterreich AG v The

Royal Bank of Scotland [2011] 1 Lloyds Rep 123.

O

It is helpful to
O

reproduce part of that: (1) The claimant must show that the defendant made to it a

statement which amounts to a representation, that is to say a

Q

statement of fact upon which it is entitled to rely. characteristic of the representee is important. (at 8) (2)

The

In the case of an express statement, the court has to

S

consider what a reasonable person would have understood from the words used in the context in which they were used.

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The answer to that question may depend on the nature and

B

content of the statement, the context in which it was made, the characteristics of the maker and of the person to whom it was made, and the relationship between them. (at 82)

(3)

Where the representations alleged are said to be implicit

in what was expressly said (or implied statement), the court has to perform a similar task, except that it has to consider

what a reasonable person would have inferred was being implicitly represented by the representors words and conduct in their context. (at 83)

(4)

Silence

by

itself

cannot

found

claim

in

misrepresentation (fraudulent or otherwise). But an express statement may impliedly represent something. A possible

implication of a statement may be that what has been expressly stated is complete, ie covers everything material or relevant on a particular matter such that something which has not been

referred to does not exist.

It is, however, necessary to

distinguish between what a document does not say and what it impliedly represents. (at 84)

(5)

The

essential

question

is

whether

in

all

the

circumstances it has been impliedly represented by the representor that there exists some state of facts different from

the truth. In evaluating the effect of what was said a helpful test is whether a reasonable representee would naturally assume that the true state of facts did not exist and that, had it

existed, he would in all the circumstances necessarily have been informed of it. It is also necessary to pay heed to the fact that because of the broad measure of damages currently

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available where there is room for an exercise of judgment, a

B

misrepresentation should not be too easily found. (at 85) (6) It is also necessary for the statement relied on to have

the character of a statement upon which the representee was

D

intended, and was entitled, to rely.

In some cases the

statement in question may have been accompanied by other statements by way of qualification or explanation which would

indicate to a reasonable person that the putative representor was not assuming a responsibility for the accuracy or completeness of the statement or was saying that no reliance

can be placed upon it. Thus the representor may qualify what might otherwise have been an outright statement of fact by saying that it is only a statement of belief, that it may not be

accurate, that he has not verified its accuracy or completeness, or that it is not to be relied on. (at 86) (7) The claimant must show that he in fact understood the

statement in the sense which the Court ascribes to it and that, having that understanding, he relied on it. This may be of particular significance in the case of implied statements. (at

87) (8) The authorities suggest that a claimant who seeks to

claim damages for misrepresentation must show that the

P

representation in question played a real and substantial part in inducing him to enter into the contract in question, but it is not necessary for him to prove that the representation was the sole

inducement to his decision or that it played a decisive part. (at 153)

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(9)
B

The representation must play a causative part in

B

inducing the contract and that involves but for causation. (at 162) (10) But for causation means that unless the alleged cause

(X) had come about, the alleged result (Y) would not have occurred. In the present context that means showing that,

unless the representee had had the representation made to him,

F

he would not have contracted or would not have done so on the same terms. (at 172) (11) A misrepresentation is not an effective cause if the

representee would have gone ahead even if it had not been made. (at 173)

66.

In line with the above, the following elements, in my view, are

crucial to the question of whether the alleged misrepresentation is actionable:

(1) (2)

the misrepresentation must be that of fact; the reliance on the misrepresentation, which has to be

assessed objectively with reference to the understanding of a

N

reasonable person and the characteristics of the representee; (3) the terms of the documents that govern the relationship

between the parties; and

P

(4)

causation between the misrepresentation and the loss.

Effect of the credit event

R R

67.
S

That the Note was not principal protected was made

S

abundantly clear on the face of the Pamphlet. Shum agreed in court that he could read that the Note was not principal protected. He also understood

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that credit event, such as bankruptcy and inability of the reference entity to
B

pay, could affect the principal of his investment.

68.
D

As summarised in the Pamphlet and explained in detail in the

D

Issue prospectus, the redemption value was essentially the nominal value of the Notes less the notional amount of loss on the reference obligation, less any depreciation of the market value of the collateral and less the costs and

expenses associated with the termination of the swap arrangement in respect of the Note. The recital of these elements of the calculation in his statement of claim reflects that Shum should also understand how the

redemption value might end up being, if a credit event occurred. 69. There is no way Shum could reasonably develop the belief that

the risk of loss would be 1/8 of the principal amount of his investment, if credit event occurred to one of the reference entities.

70.
L

Shum claims that he thought his money would be used to

L

invest into the bonds of the reference entities; and specifically referred to
M

the description of the series of notes as , literally meaning bond, in the Chinese version of the Pamphlet. In my judgment, whether or not the Chinese description was accurate, it had to be secondary to the actual

explanation of the nature of the Note and the associated investment risk in the documents. That included the explanation of the nature of the reference obligations of the reference entities in the Pamphlet and the Issue

Prospectus. 71. Ms Chong Hey (Chong), then Senior Vice-President of

DBSHK in charge of Consumer Investment & Insurance Products Consumer Banking, gave evidence and explained the nature and risk of the

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investment in the Note. The explanation accorded with the terms of the
B

Issue Prospectus. 72. Shum then tries to find fault in what he considers to be

differences in the description of the effect of a credit event on the value of the investment in different parts of the same document as well as between

different documents: (1) In the summary of the main terms in the Pamphlet, it was said that

(or in English the credit redemption amount will likely be substantially less than the principal amount of the Notes. (2) In the section on risk factor/important notice, it was said that (or in English you may lose all or part of your investment). (3) In the Issue Prospectus, it was stated that you will lose In the Order Form, it was stated that /

part, and possibly all, of your investment.

L

(4)

(or in English one or more of these [credit events] could lead to my/our losing part, and possibly

all of my/our investment). 73. In my judgment, this is a non-point. The so-called differences,

upon reasonable reading, are immaterial. The effect could only be the same, which was also in line with what was explained to him at the Branch on 5 May 2007. In any event, whichever way the documents were read, his

alleged understanding that the loss would be limited to 1/8 of the principal if a credit event occurred to one reference entity is not borne out.

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74.
B

In the circumstances, the misunderstanding on the part of

B

Shum, if existing at all, could not possibly be attributable to the Pamphlet, Issue Prospectus or the contractual documents, to the extent he understood them upon reading or should have understood had he read them. The

explanations in those documents obviously contradict such alleged misunderstanding on the part of Shum. 75. Nor is there suggestion that such alleged misunderstanding

was attributable to any misrepresentation by But or Choy. In any event, I

G

see no reason why and how the staff of DBSHK would venture to provide explanation which was not only non-existent in but also contradicted by the terms of the documents. Further if the explanations in the documents did

not contain falsity known to But or Choy, there is no issue of whether the staff became under the duty of disclosure, as non-disclosure would amount to misrepresentation.

76.
L

Shum seeks assistance from Natamon Protpakorn v Citibank

L

NA [2009] 1 HKLRD 455 in relation to his complaint that DBSHK had

M

failed to disclose the underlying nature and risk of the financial product whether by document or its staff. Apart from the fact that it started as a

decision to strike out, the allegations by the plaintiff in that case differed
O

from the present one. Without going into the details, I need say that after trial, the plaintiffs claim in that case was eventually dismissed (largely on the facts) earlier this month (judgment handed down on 5 July 2013).

77.
R

Misrepresentation, be it positive or by way of non-disclosure,

R

of the nature and risk of the investment in the Note when Shum placed the order in May 2007 is not made out. Grading of the risk level

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78.

Shum complains that if the occurrence of a credit event to one

of the reference entities could cost him total loss of the principal of his
C

investment, it would be wrong for DBSHK to grade the risk level of the investment in the Note as low to medium. He was allegedly misled by such grading into believing that the Note fit his investment objective.

79.

Shum argues that the risk level of the Note rated by DBSHK

was different from that of the other series of the product. The grading was
G

also different from that by other banks. He pointed out that even DBSHK found it necessary to revise its rating of the Note to high risk subsequently. 80. Chong explained that DBSHK has its own methodology to

ascribe risk ratings to investment products distributed by her bank. It had

J J

its own criteria and considered a matrix of relevant factors. In the case of
K

the Note, the credit ratings of the reference entities and reference obligations, the likelihood of a credit event, the quality of the collaterals,

the geographical spread, the asset allocation and the strength of the issuer
M

as well as the swap counterparty were amongst those taken into consideration in the assessment. In her statement, Chong gave a detailed

account of the process of grading of risk of the investment in the Note.

O O

81.
P

I indicated during the hearing that as far as Shum intended to

P

compare the grading of risks by different banks, the court could not be expected to do so without evidence of how the other banks came to their respective assessments and expert evidence. Shum bears the burden of

adducing such evidence in support. There is none. 82. Reference to the revision of the assessment by DBSHK does

not assist Shum either. The reason is that the circumstances surrounding

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the Note have indeed developed and changed substantially since the
B

financial crisis in 2008. The evidence shows that the grading of the risk level of investment in the financial products was subject to annual review. According to Chong, the adverse market conditions since the fall of

Lehman Brothers indeed called for the revision. 83. Shum also seeks to rely on

, or the committee report of the Legislative Council on matters arising out of Lehman Brothers related mini-bond and structural financial products published in June 2012

(specifically 5.13; 5.21).

However, the terms of reference of the

committee (1.9 of the report) suggests that the enquiry was not bank or case specific. The report goes on (at 1.10) to make clear that the primary

principle of the enquiry was that it did not target specific case, company or individual. Nor did it mean to assist individual investor to pursue civil claim. The evidential value of the report (the paragraphs relied on included)

for the resolution of the present dispute is doubtful. 84. More importantly, and I said so in court, whilst the risk level

of the investment was graded to facilitate the potential investors consideration, that the investment was not principal protected and that the

risk of loss of the principal, if a credit event occurred, was equally made known. In other words, the grading of the risk level was but one way of disclosure.

85.
R

That brings me to say that in view of the nature of the grading

R

of risk level of the Note, I doubt if the same amounted to representation of

S

fact instead of statement of opinion. As statement of opinion, what matters is whether it was formed as reasonable and honest belief at the relevant

time. According to Chong, that was indeed the case, taking into account,
U V U V

- 32 A A

among other things, the then credit ratings of the reference entities. But
B

even assuming that the grading is proved to be wrong, it would not have been falsity of factual statement, which is a pre-requisite for actionable misrepresentation (as mentioned above).

Bear Stearns
E E

86.
F

Relevant to the issue of disclosure of risk in investing in the

F

Note, Shum argues, is the problem associated with Bear Stearns Companies Inc (Bear Stearns). As at the time when it was one of the reference entities of the Note, Leyman Brothers was given A rating. So was Bear

Stearns. That the discovery of the problems associated with Bear Stearns was no news in the latter half of 2008 and certainly now. Like many others, Shum now questions the reliability of such ratings then.

87.
K

As mentioned above, those were the ratings given by the then

K

3 major rating agencies of the world. DBSHK could only be one of the many in the financial world then to make reference to such ratings. The Pamphlet informed the potential investors of the ratings given to the 8

reference entities as at 11 April 2007 by the 3 agencies respectively. The pamphlet also informed the customers of the ratings given to the reference obligations (which were basically lower than the ratings given to the

entities) of each of the first 5 reference entities, Bear Stearns included, by the 3 agencies respectively. 88. Before DBSHK should be critical about such ratings, there had

to be reason for doubting the integrity of the ratings of these entities, and I stress, at the relevant time. I see no evidence of ground for reasonable

suspicion of the integrity of the ratings when Shum placed his order for the Note in May 2007.

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89.

Shum seeks to rely on the extracts of certain overseas

newspaper articles. In court, he suggested that such evidence would be

C

relatively more independent that the evidence of witnesses. As far as the rule of evidence is concerned, such argument is clearly bad. 90. Copies of notices sent by DBSHK to investors, including

Shum, in 2008 were produced. According to the notices, DBSHK became

F

aware of the potential problems associated with Bear Stearns in March 2008. By its notice dated 19 March 2008, DBSHK explained the problems, which I need not set out in details for the present purpose, following an

announcement made by the management of Bear Stearns on 14 March 2008.

I

Any suggestion, if at all, that DBSHK knew but withheld such information from Shum is not made out. More importantly, there is no evidence of the

basis for suggesting that Bear Stearns had credit problem at the relevant
K

time; and that DBSHK knew or should have known about that. 91. Shums reference to Bear Stearns is linked with the issue of

the sub-prime risks. One should lose sight of the fact that the credit event triggering the redemption of the Note was the bankruptcy of Lehman

Brothers. This was explained in details by DBSHKs letter and the set of Frequently-Asked-Questions to the investors, including Shum, dated 27 October 2008.

92.
Q

The issue of sub-prima risks would be relevant only if it had

Q

causal link to the credit event. But according to Shum, he could only suspect that it was Lehman Brothers engagement in high risk investments that caused its collapse. There might have been subsequent enquiries and

investigation in this respect. But the court must refrain from judging the case with reference to materials or information other than properly adduced

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evidence. There is a lack of properly adduced evidence of the causal link

B

between the issue of sub-prime risks and the bankruptcy of Lehman Brothers and thus the credit event leading to the early redemption of the Note.

93.
E

Shum refers to a report of the disciplinary proceedings in 2004

E

against one Towry Law (Asia) HK Limited for failings in relation to certain hedge funds managed by third parties (which were subsequently suspended from trading). The primary responsibility for the collapse of the funds

were said to lie not with Towry Law.

Nevertheless Towry Law was

charged with failure to conduct insufficient due diligence into the funds before recommending them to clients; sold the funds to clients whose

investment objectives and risk tolerance did not always match with the risk profiles of the funds; failed to conduct proper enquiries into circumstances surrounding the funds which indicated problems with the funds; and failed

to advise clients when it became clear that the funds had problems. Towry Law eventually agreed to make ex-gratia payments to affected investors on a without admission of liability basis.

94.
N

Putting aside the proper evidential value to be attached to this

N

document, I read the rest of it to understand that it related to the role and
O

duty of investment adviser, which is different from the role of DBSHK in the present case. The terms governing the relationship between Towry Law and its clients are nowhere to be known. In the circumstances, it is

simply irrelevant. 95. Misrepresentation or non-disclosure of the risk of investment

in the Note, whether when Shum placed his order in May 2007 or afterwards, is not made out.

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Alleged conflict of interest

B B

96.
C

The various parties involved in the issue and the sale of the
C

Note were identified above. Shum criticised that these parties were in a position of conflict of interest as they were in the same group. He went further to suggest that as a result, DBSHK (or its associate in the group)

managed to gain out of his loss. 97. Mr Ho SC submits that Shum failed to establish by evidence

what exactly the conflict was; if there was a conflict, that it was concealed or not disclosed; and how the alleged conflict resulted in his loss. In my

judgment, even the pleading in this respect is inadequate for proper

I

understanding. The attempt to argue that they, eg CIL, DBS and DBSHK, were nothing but same group will be total disregard of the separate

corporate reality.
K K

98.
L

Shum argues that the occurrence of a credit event effectively

L

afforded DBS the opportunity to gain from the loss of the investors, allegedly by becoming able to keep the collaterals at nil price. Mr Ho submits that the argument was flawed. The secured nature and recourse

under the Note were explained in detail in the Frequently-Asked-Questions in the Issue Prospectus (mentioned above), which was also referred to in Chongs explanation in her statement. As the swap counterparty, it has

hedged its position by assuming similar risk through the credit default swap between it and the other market participations. It was the other market participants that were parties with whom the credit risk assumed by the

investors were hedged. DBS did not gain by reason of the occurrence of credit event. I agree with Mr Ho. There is also no evidence that DBS did gain in the manner alleged by Shum.

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99.
B

The case of Wing Hang Bank Ltd v Kwok Lai Sum [2009] 4
B

HKLRD 93 that Shum referred to is hardly on the point. Conclusion 100. Considering all the evidence, I find the witnesses for DBSHK

to be straightforward; but cannot say the same about Shum. His evidence, when tested with the other evidence, oral and documentary, impressed me

as being highly subjective. Mr Ho SC submits that Shums evidence was sometimes convoluted and based on speculations. I share that observation. I accept the evidence of DBSHKs witnesses. Insofar as there is conflict

between the evidence of Shum and that of the witnesses for DBSHK, I
I

prefer the latter. 101. Bearing in mind the personal background of Shum, I find the

alleged misrepresentation, be it express, implied or by way of nondisclosure, as alleged is not proved. Nor is the reliance, reasonably

assessed. I share Mr Ho SCs observation that the entire backbone of the claim is founded on Shums subjective understanding, and to the extent that it was misunderstanding as alleged, of the nature, terms and risk of his

investment in the Note. 102. I also find that as a matter of fact, it was not the alleged

misrepresentation or the subscription of the Note at the relevant time, but the adverse market conditions prevailing around the time of the collapse of

Lehman Brothers in September 2008, that caused Shums loss.

The

collapse of Lehman Brothers and the resultant substantial fall in the value of the Note caught a lot of people by surprise. It is not proved to have been

reasonably foreseeable at the time when Shum subscribed to the Note.

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103.
B

DBSHK can also resort to the principle of contractual estoppel

B

mentioned above. But in view of the above findings of fact, this may not be strictly necessary. OTHER POINTS Allegedly told to hold onto the Note

104.

Shum also complains that his loss was partly caused by the

advice to hold onto the Note until maturity and not to sell it during his enquiries with DBSHK in the light of the problems associated with Bear

Stearns. However he could not identify the person whom he was allegedly
I

so advised.

105.
K

I hesitate to attach weight to such accusation, when DBSHK

K

was deprived of the opportunity to locate the staff said to be responsible, whom Shum could not identify, to rebut the allegation. Further, it is

unknown whether as a matter of fact, Shum would have disposed of the

M

Note and that the same would have been taken up by others in the market so as to save him from the loss.

DBSHKs settlement with investors

106.

It is common ground that DBSHK has come to settlement with

some investors in the credit-linked notes issued by CIL. Shum refers to the announcement, apparently by the Securities and Futures Commission

(SFC) in July 2010, of the settlement agreement.

107.
T

To begin with, that was among the documents shortly

T

produced by Shum before trial. For that, Mr Ho complained that his client

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had no real chance of responding especially when the same was not
B

specifically put during cross examination of his clients witnesses. The objection was noted.

108.

In any event, the announcement at least explained that this was

a settlement between DBSHK with those low to medium risk investors. As mentioned, Shum belonged to the growth type of investor profile having

a medium to high tolerance of investment risks at the relevant time. Why Shum was excluded from the settlement may seem obvious. More

importantly, the announcement made clear that the settlement was reached
H

without admission of liability on the part of DBSHK. 109. I would not underestimate the significance of such settlement,

from which Shum could not benefit, on the development of his grievance. Leaving aside the question of whether or not his grievance is justified in his

circumstances, I do not see how this assists him in establishing his claim.

The SFO
M M

110.
N

Shum relies on section 107 of the SFO, which makes it a

N

criminal offence to fraudulently or recklessness induce others to invest

O

money. Let alone the element of fraudulent or reckless misrepresentation in the offence, which, if alleged, would need to be proved beyond reasonable doubt, the section simply does not found a civil cause of action

for damages.

111.
S

The same could be said about the Code, which was published
S

by the Securities and Futures Commission pursuant to section 399 of the SFO. Section 399(6) of the SFO provides that:

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A failure on the part of any person to comply with the provisions set out
B

in any code or guideline published under this section that apply to him shall not by itself render him liable to any judicial or other proceedings, but in any proceedings under this Ordinance before any court the code or guideline shall be admissible in evidence, and if any provision set out in the code or guideline appears to be court to be relevant to any question arising in the proceedings it shall be taken into account in determining that question.

Likewise, the Code (at 1.5) says the same about the effect of breach. 112. The relevant section seems to be section 108, which provides

for a statutory cause of action, parallel to the common law, for damages for pecuniary loss that the representee has sustained as a result of the reliance

on the misrepresentation (made fraudulent, recklessly or negligently) by the representor inducing former to enter into contract to invest in, among others, securities.

113.
K

In view of the above findings of fact, the section could not be

K

invoked. For the avoidance of doubt

114.
N

The manner in which Shum put forward his contentions has

N

caused his opponent and this court to try to group and summarise his major complaints for better disposal. Points here and there in the documents he has submitted that are not specifically addressed here are indeed noted in

the deliberation of the court. Only that they do not serve to affect the outcome of the case. ORDER 115. The claim is dismissed. Following this event, I make a nisi

order that Shum shall pay DBSHKs costs of this action, including any

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costs reserved. Costs shall be taxed, if not agreed, with certificate for 2
B

counsel. In the absence of application within 14 days to vary, the nisi costs order shall become absolute.

(Simon Leung) District Judge The plaintiff, in person

Mr Ambrose HO, SC and Mr Victor DAWES instructed by Messrs DLA Piper Hong Kong for the defendant

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