International Commercial Bank of Cathay (Canada) v. Chen, 2003 CarswellBC 2640 (B.C. S.C.)
In 1998, Ching-Lo (Randy) Chen was the general manager of a Vancouver branch of the International Commercial Bank of Cathay, earning more than $350,000 a year.
That year a new president and CEO joined the bank and wrote each branch a memo reminding them that cheques deposited to customers’ accounts needed to be held before giving the customer access to the money.
Chen told the CEO he “may have” made some advances to customers of the branch. The CEO demanded details and had an auditor come in from Taipei to investigate.
It was determined more than $8 million had been advanced to customers by Chen who had authorized cheques knowing sufficient money was not yet in the accounts.
When questioned, Chen said he was merely helping customers and acting in the best interests of the bank. He said he did not profit from the advances and did not know he didn’t have the authority to conduct the transactions.
The court did not find Chen a credible witness. Not only had he surreptitiously used the bank’s computer (at least once in the middle of the night), but in a memo he admitted he had done wrong and asked for punishment “for my exceed-authorization and break of regulation.”
The court noted that “where a fiduciary obligation exists, the measure of damages is restitutionary,” and in that vein awarded the bank $3.8 million (U.S.) and $3.6 million (Cdn.) to help cover losses. The court also agreed to punitive damages because of Chen’s “high-handed, planned and deliberate” conduct.
The court said that Chen knew what he was doing, and profited from his misconduct. Punitive damages of $100,000 were awarded to the plaintiff, as well as special costs.
In 1998, Ching-Lo (Randy) Chen was the general manager of a Vancouver branch of the International Commercial Bank of Cathay, earning more than $350,000 a year.
That year a new president and CEO joined the bank and wrote each branch a memo reminding them that cheques deposited to customers’ accounts needed to be held before giving the customer access to the money.
Chen told the CEO he “may have” made some advances to customers of the branch. The CEO demanded details and had an auditor come in from Taipei to investigate.
It was determined more than $8 million had been advanced to customers by Chen who had authorized cheques knowing sufficient money was not yet in the accounts.
When questioned, Chen said he was merely helping customers and acting in the best interests of the bank. He said he did not profit from the advances and did not know he didn’t have the authority to conduct the transactions.
The court did not find Chen a credible witness. Not only had he surreptitiously used the bank’s computer (at least once in the middle of the night), but in a memo he admitted he had done wrong and asked for punishment “for my exceed-authorization and break of regulation.”
The court noted that “where a fiduciary obligation exists, the measure of damages is restitutionary,” and in that vein awarded the bank $3.8 million (U.S.) and $3.6 million (Cdn.) to help cover losses. The court also agreed to punitive damages because of Chen’s “high-handed, planned and deliberate” conduct.
The court said that Chen knew what he was doing, and profited from his misconduct. Punitive damages of $100,000 were awarded to the plaintiff, as well as special costs.
