Law of Banker and Customer (5th Ed, 2004) by Dr Poh Chu Chai

As a banking law student in 1990, my classmates and I were the first few to benefit from Dr Poh’s book on banking law which had just been published at that time. Not only was it the first invaluable guide to banking legislation and case law in Singapore and Malaysia it also helpfully distilled the essential principles from the length and breadth of English common law on the subject.

Time has moved on and Dr Poh’s book is now into its 5th Edition. Its scope and contents have significantly expanded and the book now covers virtually every conceivable subject on banking law. Subjects discussed in detail in the book include the nature of the banker and customer relationship, the different types of bank accounts, mareva injunctions, bank secrecy (including a discussion of the amendments to s 47 of the Banking Act (Cap 19) and the Singapore High Court decision in PSA Corp Ltd v Korea Exchange Bank), bankers’ references and advice, bankers’ right of lien and set-off, recovery of payments made under mistake (including a discussion of the recent cases Kleinwort Benson Ltd v Lincoln City Council and MCST No 473 v De Beers Jewellery Pte Ltd which abrogated the distinction between a mistake of fact and a mistake of law), the obligations of collecting and paying bankers and banker’s liability as constructive trustee (including a discussion of Twinsectra Ltd v Yardley, Bank of Credit and Commerce International (Overseas) Ltd v Akindele and Papamichael v National Westminster Bank Plc). There is also commentary on newer developments like electronic banking and cheque truncation.

One of the key attractions of Dr Poh’s book is that it also functions as a casebook. For busy practitioners, there are succinct summaries of the facts and decision of possibly every relevant reported case from Singapore and Malaysia. Where relevant, he also analyses important Commonwealth decisions. By way of illustration, on the subject of a customer’s duty to check his bank statements, Dr Poh discusses cases from England, Hong Kong, Canada and Malaysia before going on to analyse the latest Singapore decisions like Elis Tjoa v United Overseas Bank and Stephan Machinery Singapore Pte Ltd v Overseas-Chinese Banking Corporation Ltd.

This book also complements Dr Poh’s Law of Negotiable Instruments (5th Edition, 2001). Thus, a case like The Honourable Society of the Middle Temple v Lloyds Bank PLC, not dealt with at the time of publication of that book, which impacts on the obligations of clearing banks, is covered here.

Having regard to the aforesaid, it is probably churlish to complain but I do have some minor quibbles with the book. First, it would probably make for easier reading if some chapters were shortened. For example, I would recommend that new chapters be created from the existing sections on the question of who is a bank customer, issues relating to loan and overdraft accounts and the liability of banks as constructive trustee. These are sufficiently important topics to merit their own chapters. Second, the arrangement of sections within a chapter could also be improved upon. For example, chapter two starts off with a section on the nature of the relationship between banker and customer. Instead of going on to discuss the banker’s primary duty of care and services normally provided by bankers, the author suddenly deals with limitations of actions and time bar. It is also unclear why the Sarawak Limitation Ordinance and the decision of the Privy Council in Kong Ming Bank Bhd v Sim Siok Eng that a bank’s claim for repayment of the balance owing on an overdraft is based on a debt payable on demand as well as on breach of contract merit separate discussion and a separate heading in chapter two. Third, on the subject of cheque truncation (which incidentally does not appear to be mentioned in the index), while Dr Poh summarises the amendments to the Bills of Exchange Act (Cap 23) to allow for cheque truncation in Singapore it is a pity that he stops short of discussing what matters have been prescribed under s 87C as constituting electronic payment information or particulars which must be contained in an ‘image return document’. A comparison of the Singapore provisions with those in the UK Bills of Exchange Act 1882 (which are not entirely similar) would have been useful. Finally, at a time when there are significant bank mergers and acquisitions going on in the region, it would have been useful to get Dr Poh’s views on the regulatory approvals required for bank mergers as well as on the issues that can arise on a transfer of banking business. Perhaps this can be the subject of another book by Dr Poh.

Yee Kwok Hon

Freshfields, Hong Kong