In one of the last lawsuits from the fallout of the 2008 financial crisis, the High Court dismissed a US$15 million (S$21 million) claim by an investment firm suing a bank for losses in a financial product known as "share accumulators".
The court was not convinced that Societe Generale Bank & Trust had to get clearance from Mr Lucas (who goes by one name) as part of a contract whenever his wife Lenny Patricia Halim Liem inked deals for First Asia Capital Investments(FAC) to invest in the share accumulator scheme.
Both were authorised signatories for FAC, which entered into share accumulators with the bank through its relationship manager.
The accumulator, or discounted share purchase programme, is a product that lets investors buy shares at a market discount. If the price rises by more than a certain percentage, the contract ends and the investor takes a profit. But if the market price falls below the discount price, the investor would be required to continue buying at the same price, which would now be at a premium above the market price.
Judge of Appeal Steven Chong, in judgment grounds last week, noted that share accumulators sparked financial woes for many investors following the 2008 global financial crisis and might explain why many sued banks to disclaim them.
FAC entered into 103 share accumulators with the bank involving shares in 27 firms, trading over some 18 months till January 2008.
But about three months later, all but 18 of the 103 accumulators had been knocked out; the 18 accumulators led to US$15.86 million in losses.
FAC sued the bank claiming it breached an oral agreement under which Mr Lucas' written consent was required. The pact was in addition to the main contract, under which Ms Lenny was a signatory but served as an "ancillary person".
Mr Gabriel Peter, acting for FAC, also brought several other claims against the bank, including misrepresentation, breach of fiduciary duty and undue influence. Lawyers Suresh Nair and Kenneth Koh, defending the bank and relationship manager, pointed to, among other things, transcripts of conversations which showed Ms Lenny actively made decisions and was not an "ancillary person" who had no authority to enter or exit share transactions.
Justice Chong found "the objective circumstances confirm that the (oral) collateral agreement did not and could not have existed."
He added: "It is difficult to believe that Lucas would not have wanted the security of a written collateral agreement given that he is a commercial lawyer who would have, by his own admission, understood the importance of evidence."
Justice Chong dismissed the claims and ordered FAC to pay $750,000 in legal costs to the bank and its relationship manager, noting the time spent to review and transcribe 338 recordings of phone conversations between Ms Lenny and the relationship manager in the run-up to the court case.