Quah Su-Ling v Goldman Sachs International
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Carr,Mrs Justice Carr DBE |
| Judgment Date | 26 March 2015 |
| Neutral Citation | [2015] EWHC 759 (Comm) |
| Docket Number | Case No: 2014 FOLIO 18 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 26 March 2015 |
[2015] EWHC 759 (Comm)
Mrs Justice Carr DBE
Case No: 2014 FOLIO 18
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Richard Millett Q.C. (instructed by Devonshires Solicitors) for the Claimant
Mr Ben Valentin and Ms Rebecca Loveridge (instructed by White & Case LLP) for the Defendant
Hearing dates: 11th and 12th March 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction and the Parties
This is an application by the Claimant, Ms Quah Su-Ling ("Ms Quah"), for permission to amend her Particulars of Claim. The application was issued on 10 th February 2015, some three weeks before the trial was due to commence (on 4 th March 2015). The application has led to the vacation of the trial dates in circumstances set out in more detail below. Ms Quah accepts that, were her application to succeed, she must pay the costs of the amendment and the costs of the action thrown away by the amendment and the adjournment (contractually on an indemnity basis) and that any permission should be conditional on a payment of 40% on account of any such reasonable costs.
There is a counter-application issued on 27 th February 2015 by the Defendant, Goldman Sachs International ("GS"). In the event that the application to amend were to fail, GS asks for the claim to be dismissed or struck out pursuant to CPR 3.4(2), and that it be granted summary judgment on its Counterclaim pursuant to CPR 24.2, all with costs.
Ms Quah is a sophisticated private investor permanently resident in Singapore. She is presently the Chief Executive Officer and an Executive Director of IPCO International Ltd ("IPCO"), an investment holdings company listed on the Singapore Exchange Ltd ("SGX"). As at 15 th February 2013 she declared to GS that:
a) her net worth and net investible assets were US$50 – US$100million;
b) she had broad exposure to investment in equities and sufficient knowledge (among other things) of investing in equities on SGX;
c) she had two or more years of experience of purchasing securities or borrowing against assets on margin, and sufficient knowledge of that type of activity.
GS is regulated by the Financial Conduct Authority.
The Facts
On 15 th February 2013, following an introduction by her investment consultant, Mr William Chan of Stamford Management Pte Ltd ("Mr Chan"), Ms Quah opened a private wealth management account with GS ("the account") for the purpose of increasing her shareholding in LionGold Corp Ltd ("Liongold") through a margin loan facility dated 15 th February 2013 ("the facility"). GS did not advise her on this course of action. It was a decision taken by Ms Quah independently and/or on the advice of Mr Chan.
The express terms of the facility permitted GS to call the loan in at any time and for any reason. Clause 15 of GS' applicable General Terms and Conditions ("Clause 15") provided materially as follows:
" ..15.2 On Demand Loan; Increased Costs
Each Loan will be outstanding from day to day and repayable in the currency or currencies in which it is denominated on demand (such demand to be effective immediately) provided that [GS] shall give you reasonable time in all the circumstances to effect the mechanics of repayment prior to issuing a Close-Out Notice. For the avoidance of doubt, the Close-Out Notice may, in certain circumstances, be given on the same day on which the demand was made…
15.6.1 A Loan is an "on demand" facility, so [GS] can demand immediate repayment of any amount outstanding at any time and for any reason."
Ms Quah duly drew down monies under the facility. By 1 st October 2013 the sums drawn down were as follows:
a) SG$36,614,280.32; and
b) US$19,263,830.27
secured against the following assets as collateral, in summary,:
a) 31,700,000 shares in Asisasons Capital Ltd ("Asiasons");
b) 3,500,000 shares in Blumont Group Limited ("Blumont");
c) 31,633,000 shares in LionGold;
d) 28,247,376 GSI High Yield Rate Portfolio Fund units;
e) 731,577, 962 GSI Global High Yield Mutual Fund units; and
f) 60,573,320 GSI Global Strategic Income Bond Portfolio units, (together "the Custody Assets").
The shares in Asiasons, Blumont and Liongold are referred to below as "the Shares".
At 8.45am (Singapore time) on 2 nd October 2013 Mr Tan Bong Loo ("Mr Tan"), GS' investment professional responsible for Ms Quah's account, orally informed Ms Quah (through Mr Chan) by telephone that GS required repayment of sums outstanding under the facility and that it was no longer comfortable lending margin against the Shares. At about 9.20am (Singapore time) Mr Chan telephoned Mr Tan asking for more time to pay, which request was refused.
At 11.47 am (Singapore time) GS made a written demand for repayment of the entire sums outstanding under the facility, namely SG$36,614,280.32 and S$19,263,830.27 ("the demand"). Payment was demanded by 1.30pm (Singapore time), failing which the account would be closed out and the facility terminated. Ms Quah did not repay the loan following the demand.
At 1.37pm (Singapore time) GS accordingly issued notice of default. Over the course of the following three weeks (between 2 nd and 23 rd October 2013) GS took steps to sell the Custody Assets pursuant to its contractual power of sale. The sales of the Shares were carried out on the SGX. Some, but not all shares in Asiasons were sold between 2 nd and 4 th October 2013. The sale of shares in Liongold commenced on 4 th October 2013. The sale of shares in Blumont commenced on 7 th October 2013.
The proceeds of sale were insufficient to meet Ms Quah's debt to GS.
It is said for Ms Quah that the share prices held up well on 2 nd and 3 rd October 2013. But by the time that trading in the Shares was suspended at 10am on 4 th October 2013 their value had fallen dramatically. When trading re-opened on 7 th October 2013 their value fell yet further.
As will later become apparent, at the heart of Ms Quah's proposed new case relating to liquidation of the Shares by GS are events said to have taken place shortly prior to the demand within GS, as allegedly revealed by GS' disclosure and the witness statements served for GS.
As to that, in the very early hours of 2 nd October 2013 (Singapore time) GS' head of private wealth management for the Asia Pacific region, a Mr Ronald Lee ("Mr Lee"), telephoned GS' managing director of the private wealth management group in Singapore, Mr Jason Moo ("Mr Moo"). Mr Lee patched in GS' global co-head of investment management in New York, Mr Eric Lane ("Mr Lane"). Mr Lane told Mr Moo that he was uncomfortable with the risks in Ms Quah's account, that GS should not be lending against the Shares, and that GS " needed to move the risk off our books" and to start selling first thing the next morning if Ms Quah was not able to find alternative financing to repay the loans. He wanted GS to " have eliminated its risk in relation to these accounts" by 4 th October 2013. Mr Moo then (at 3am Singapore time) called Mr Tan and instructed him to be in a position to start selling the Shares the next morning.
Ms Quah now says that it is to be inferred from these events that GS was in possession of critical information about Asiasons, Blumont and LionGold which would show or suggest (a) not only that the market value of the companies was too high but that it was so over-valued that if a market correction were to occur it would leave GS seriously exposed to losses, and (b) that such a market correction was or was likely to be imminent, such that there was an urgent need to sell the shares in the companies immediately ("GS' alleged knowledge").
Procedural chronology
Ms Quah has been represented throughout by leading counsel (although there was a change of leading counsel in or about late December 2014) and commercial London solicitors (namely Wiggin LLP until 21 st July 2014 when her current solicitors, Devonshires, came on the record for her and who have remained on the record for her ever since). In late December 2014 she appears also to have instructed solicitors in Singapore to advise her on these proceedings.
Ms Quah issued proceedings in the Queen's Bench Division on 5 th November 2013. This was the same day as she was informed that GS was considering bringing bankruptcy proceedings against her. Particulars of Claim were served on 20 th November 2013. The proceedings were commenced without Ms Quah first having obtained any expert advice. According to her third witness statement, they were issued simply on the basis of her " own experience and opinions". By March 2014 at the latest, however, she was aware that the obtaining of expert advice was " crucial" to her case, having been so advised by her lawyers (as set out in her second witness statement).
A Defence and Counterclaim were served on 16 th December 2013. The Counterclaim was for SG$15,148,930.77 and US$287,914.08, being the amounts outstanding under the facility. Ms Quah served a Reply and Defence to Counterclaim on 13 th January 2014. Ms Quah served Further Information pursuant to a request dated 16 th December 2013 on 15 th January 2014. On 30 th January 2014 the proceedings were transferred by consent to the Commercial Court. GS served Further Information pursuant to a request dated 21 st January 2014 on 14 th February 2014. All statements of case have been verified in the normal way.
A case management conference was held before Popplewell J on 6 th March 2014. He directed that the case should be case managed and heard together with a related action brought by...
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