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Malaysia Case Law

Third‑party cheque
  • 30 Nov 2021

    KOPERASI SAHABAT AMANAH IKHTIAR BERHAD RHB INVESTMENT BANK BERHAD

    Citation
    W-02(NCvC)(W)-2084-10/2018 (Mahkamah Rayuan)
    Court
    NCvC
    Case number
    W-02(NCvC)(W)-2084-10/2018 (Mahkamah Rayuan)

    The Court held that once the investment bank received the appellant's RM10,000,000 into its pooled account it owed a duty of care despite absence of a prior contractual banker‑customer relationship because harm was foreseeable, sufficient proximity existed and policy reasons (including AML/KYC obligations) supported imposing the duty; the bank breached that duty by transferring the funds to a third party without verifying mandate or the depositor and by failing its SOP, causally resulting in the appellant's loss; judgment for appellant for RM9,927,000 plus interest and costs RM40,000.