Hong Leong Finance Ltd v Lee Siang Wah and Another

• Judge: K S Rajah JC
• Judgment Date: 26 July 1993
• Neutral Citation: [1993] SGHC 177
• Citation: [1993] SGHC 177
• Defendant Counsel: Ng Liang Poh (Ng Liang Poh)
• Published date: 19 September 2003
• Plaintiff Counsel: Tan Kok Siang (Tan Thian Chua & Co)
• Date: 26 July 1993
• Docket Number: Originating Summons No 465 of 1991
• Court: High Court (Singapore)
• Subject Matter: Whether court has discretion to deny or vary mortgagee's right to costs because of misconduct,Costs,Mortgagee’s rights,Civil Procedure,Whether mortgagee may appeal against order for costs without leave,Mortgagee's contractual right to costs,Right to injunction to restrain execution of writ of possession,s 34 Supreme Court of Judicature Act (Cap 322),O 59 rr 3 & 6 Rules of the Supreme Court 1990,Mortgage of real property,Credit and Security,Principles

Cur Adv Vult

This is an appeal by the plaintiffs who are a finance company and mortgagees. The first defendant is the husband of the second defendant and the defendants are the mortgagors. The appeal raises three questions:

(1) whether the order of suspension of the execution order was proper;

(2) whether the court had a discretion to order fixed costs to the mortgagees; and

(3) whether the plaintiffs can appeal against the order for costs without the leave of the court.

The facts

By a mortgage dated 20 December 1989 made between the defendants and the plaintiffs, property was mortgaged to the defendants for $235,204. The second defendant was not able to pay the monthly instalments regularly and punctually because her husband who was working in China did not remit the money regularly and punctually.

On 17 May 1991, the plaintiffs applied for:

(1) delivery of possession of the mortgaged property to the plaintiffs;

(2) payment of all moneys due to the plaintiffs under the mortgage;

(3) costs; and

(4) other reliefs.

On 12 August 1991, the plaintiffs obtained judgment in default. The court ordered delivery of vacant possession of the mortgaged property to the plaintiff.

Execution

On 6 March 1992 the sheriff of the Supreme Court wrote a letter to the defendants stating that the execution of the writ of possession would be carried out on 20 March 1992. On receipt of the letter, the second defendant contacted her husband on the telephone and was told to instruct solicitors and solicitors were instructed to act on behalf of the defendants. The solicitors wrote to the plaintiffs` solicitors on 18 March 1992 asking the plaintiffs to withhold the execution as the defendants were then negotiating with an interested purchaser the sale of the mortgaged property. The defendants paid $2,000 to the plaintiffs and promised a further payment of $1,500 on or before 25 March 1992. The payment of $2,000 was in part payment of the sums due from the defendants to the plaintiffs. At the second defendant`s request, and on payment of costs and payment of interest and lump sum payments by the second defendant, the plaintiffs adjourned the execution of the writ of possession several times.

The solicitors for the defendants in their letter of 18 March 1992 further said:

... Our clients will pay the option money of not less than $5,000 to be received from their purchasers to your clients once the terms thereof have been agreed upon.

We are also instructed to state that our clients will bear the costs of the whole proceedings and we shall be grateful for your clients` confirmation that they will not proceed with the execution of the order of court dated 12 August 1991 so that our clients may grant the option without exposing themselves to further complications.

On 19 March 1992, the second defendant was told by her solicitor that he had been told by the plaintiffs` solicitor that the plaintiffs were prepared to adjourn the execution of the writ provided:

(a) the defendants made the payments as set out in the letter of 18 March 1992; and

(b) payment of the costs of adjournment of $1,250 at $250 per adjournment.

The second defendant agreed to pay the costs of adjournment on 20 March 1992.

On 19 March 1992, the plaintiffs` solicitor wrote to the defendants` solicitor stating that his clients were prepared to:

(1) accept the defendants` proposal, provided the form of exercised option or signed agreement for sale and purchase plus deposit and option, if applicable, are paid to the plaintiffs by 15 April 1992;

(2) postpone execution of writ of possession to the nearest date after 15 April 1992;

(3) provided $1,250 arrears of costs incurred in the previous postponements is paid by 20 March 1992. The sum of $1,250 included the postponement of execution that was fixed for 20 March 1992. The defendants` solicitor was required to send the defendants` undertaking by fax on 19 March 1992.

The defendants` solicitor sent a fax stating that costs would be paid the following day. The defendants accepted the other terms.

Arrears of $1,250

The second defendant ran into some trouble over the post dated cheque on 20 March 1992 but when the cheque was cleared she withdrew $1,500 cash and paid the plaintiffs on 26 March 1992. The receipt issued by the plaintiffs for the sum of $1,500 received on 26 March 1992 was exhibited. It is stamped without prejudice.

The plaintiffs` solicitor wrote two letters to the defendants on 27 March 1992. The letters were faxed to the defendants on Saturday, 28 March 1992 at 1314 hrs and at 1315 hrs. The letter faxed at 1314 hrs noted that $1,250 had not been received and gave notice of immediate execution of the writ of possession if costs are not paid within 48 hours. The fax of 1315 hrs was to the effect that the solicitor had promised and the plaintiffs` solicitors were still waiting for the $1,250. The arrears of costs of $1,250 refused to be buried.

The defendants` solicitors sent an urgent fax to the plaintiffs on Monday, 30 March 1992. The plaintiffs were told that $1,500 had already been paid to the plaintiffs on 26 March 1992. A copy of the plaintiffs` receipt was transmitted. The solicitors were told that a buyer had been found. The selling price was to be $635,000 and that on hearing from the buyer`s solicitor the defendants would communicate with the plaintiffs` solicitors.

The plaintiffs on 3 April 1992 sent two fax messages dated 2 April 1992 to the defendants` solicitors. The fax marked `immediate` was to the effect that the plaintiffs were waiting for the cheque of $1,250 promised earlier. The second fax asked for evidence of sale in the form of exercised option or agreement for sale and purchase.

Option transmitted

A copy of the option granted to the purchaser was transmitted to the plaintiffs` solicitors on 4 April 1992 and on 9 April 1992, a legible copy of the transmission was requested by the plaintiffs. The balance of 10% deposit was demanded when the option is exercised.

On 13 April 1992 the plaintiffs` solicitors sent a fax to the defendants. Reference was made to the $1,250 and the defendants were told that eviction was fixed for execution on 20 April 1992 at 10am. This was followed by another letter dated 16 April 1992 demanding payment of $1,250. On the same day the purchaser`s solicitor of the mortgaged property wrote to the defendants` solicitor, exercising the option to purchase the mortgaged property. Completion was to take place on 6 August 1992. A cheque for $57,150 being the balance of the 10% deposit upon exercising the option was enclosed.

The costs of $1,250 was the source for another letter on 20 April 1992 and on 27 April 1992, the plaintiffs` solicitors wrote, demanding the option money and the balance of the 10% deposit in the following terms:

... This is to inform you that the new eviction date is on 5 May 1992 at 9.30am.

Please let us have immediately:

(1) payment of our costs of the previous adjournments at $1,250, as promised by you;

(2) the option money and the balance of the 10% deposit for transmission to your clients. ...

The defendants attempted to contact Mr Ng, their solicitor, when repeated demands were made for $1,250. Mr Ng, however, had gone on leave.

The plaintiffs, it would appear, did not inform their solicitors about the defendants paying $1,500 on 26 March 1992.

On 28 April 1992, the defendants` solicitors wrote to the plaintiffs` solicitors and referred to the telefax of 13, 16, 20, 21 and 27 April 1992 and said the first fax was received just before Mr Ng went on leave and the last on his return, to explain the lack of response.

The solicitors wanted certain matters clarified and wrote to the plaintiffs as follows:

... Further to our telefax of today`s date, we are instructed to inform you that our client`s husband has returned to Singapore and they have now instructed us as follows:

(1) they request your clients to allow them to sell the subject property to the purchasers who have exercised the option and would in all probabilities have also lodged a caveat against it;

(2) they will pay you or your clients all the costs of the adjournment of the execution;

(3) they will not object to your acting or continuing to act for your clients; and

(4) they withdraw the instructions as contained in the last paragraph of our telefax.

We shall be grateful if you will request your clients to let us have their redemption statement, the title deeds and also the amount of costs for the adjournments up to date.

Execution restored

The restoration of the execution of the writ of possession on 5 May 1992 called for an immediate response, and it was pointed out to the plaintiffs that $1,500 had already been paid to the plaintiffs as being costs of the adjournments in addition to $20,697.80. The outstanding mortgage as at 31 December 1991 was $238,415.98 but the property was being sold for $635,000. The proceeds of sale would be sufficient to discharge the outstanding mortgage and a copy of the option had been sent on 4 April 1992. The costs of $1,250 however, persisted in being an irritating issue. The renewal of the execution and repeated requests for $1,250 was regarded as harassment by the second defendant.

The defendants` solicitors, not unreasonably, asked for the plaintiffs` confirmation by 12pm on 5 May 1992 that the plaintiffs would not proceed with the execution on 5 May 1992, and the defendants be allowed to sell the mortgaged property and discharge the mortgage on completion of the sale.

The defendants` solicitors took the precaution of giving notice that if the plaintiffs` confirmation was not received within the stipulated time, ie before 12pm, an application would be made for an injunction to restrain execution of the writ of possession against the plaintiffs with costs. Notice was given that the papers were being prepared in advance for application...