Keppel Tatlee Bank Ltd v Teck Koon Investment Pte Ltd and Others

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu J
• Judgment Date: 29 February 2000
• Neutral Citation: [2000] SGHC 29
• Docket Number: Suit No 994 of 1999
• Date: 29 February 2000
• Year: 2000
• Published date: 19 September 2003
• Plaintiff Counsel: Vinodh S Coomaraswamy and Yarni Loi (Shook Lin & Bok)
• Citation: [2000] SGHC 29
• Defendant Counsel: Angelina Hing and Jill Tan (Engelin Teh & Partners)
• Court: High Court (Singapore)
• Subject Matter: Whether reliance by purchasers on representation,Relief,Whether to deny defendants equitable relief due to unconscionable conduct,Estoppel by acquiescence,Land,Equity,Defences,Whether representation made to purchasers of property,Whether unconscionable for defendants to invoke estoppel by representation,Estoppel by representation,Mortgages,Registered legal mortgagee,Whether legal interest of registered legal mortgagee has priority over any equitable interest of defendants,Conveyance,"Clean hands",Whether plaintiffs know defendants' rights,Pre-requisites,s 48 Land Titles Act (Cap 157)

: This is a claim for vacant possession of a semi-detached house situated at No 267D Upper Paya Lebar Road Singapore (`the mortgaged property`).

The facts

Keppel Tatlee Bank Ltd (`the plaintiffs`) are a company incorporated in Singapore and carry on the business of banking; they have a branch at No 101, Upper Cross Street [num ]B1-49, People`s Park Centre, Singapore (`the People`s Park branch`). The first defendants. Teck Koon Investment Pte Ltd (`Teck Koon`), a Singapore company, are property developers. The third defendant Teo Keng Keong (`Teo`) is currently the sole proprietor of a law firm (Sukumar & Teo); he was called to the Singapore Bar in 1972. His area of practice for the past ten years has been solely conveyancing and he was at all material times the solicitor for Teck Koon. The office of Sukumar & Teo is in the same building as the plaintiffs` People`s Park branch, but on the 6th storey. Teo and the second defendant Goh Eng Keah (`Goh`) (they described one another as `business partners`), purchased the mortgaged property from Teck Koon on or about 14 November 1994.

Pursuant to a facility letter dated 8 March 1994, the plaintiffs had extended overdraft facilities (`the facilities`) to Teck Koon who, at all material times maintained an account with the plaintiffs at the People`s Park branch. The facilities were in the nature of an `Acquisition Facility` which was meant to finance the acquisition of the land on which the mortgaged property stood, for purposes of development, and a `Construction Facility` which was intended to finance the construction of two semi-detached houses on the land including the mortgaged property. At the material time, the land was known as No 267B, Upper Paya Lebar Road and was divided into plots 1 and 2. Plot 1 was re-numbered and is now the mortgaged property while plot 2 became No 267E Upper Paya Lebar Road.

The facilities were secured by a mortgage and a deed of assignment dated 2 April 1994 over the land. The mortgage in favour of the plaintiffs was duly registered. By the terms of the mortgage, Teck Koon agreed (inter alia) not to sell or part with possession of the land or any part thereof without the prior consent of the plaintiffs. By the terms of the deed of assignment, Teck Koon covenanted with the plaintiffs:

(a) that it would not sell any unit to be built at less than such price as the plaintiffs may fix at any time at its absolute discretion;

(b) to notify the plaintiffs immediately upon signing an agreement with any purchaser and give the plaintiffs a copy of the signed agreement and all such other information relating to the unit sold as the plaintiffs shall require;

(c) that so long as any money remained outstanding under the mortgage and assignment, Teck Koon would direct the purchasers to pay all moneys due to the plaintiffs for Teck Koon`s account or Teck Koon`s Project Account (if applicable).

As Teck Koon`s development of the land comprised less than four units, s 9 of the Housing Developers (Control and Licensing) Act (Cap 130) and the Housing Developers (Project Account) Rules did not apply. Thus, there was no requirement on Teck Koon to open and maintain a Project Account with the plaintiffs.

On 14 November 1994, Teck Koon entered into an agreement (`the agreement`) to sell plot 1 to Yap Siew Hoe and Choo Choon Wah (`the nominal purchasers`) for $1.8m. The plaintiffs were not informed of and were not aware of, the sale at the time. Choo Choon Wah is Teo`s sister-in-law while Yap Siew Hoe is Goh`s niece. The nominal purchasers executed a Letter of Confirmation of Trust (dated 14 November 1994) confirming that plot 1 was held on trust for Teo and Goh and undertaking to execute a Deed of Trust as and when required. The nominal purchasers obtained an overdraft facility for $1.25m from the Industrial & Commercial Bank Ltd (ICB) to part-finance the purchase of plot 1. Teo was the solicitor for the nominal purchasers, Teck Koon and ICB in the entire transaction.

On 14 November 1994 itself, the sum of $360,000 amounting to 20% of the purchase price of plot 1 was paid directly to Teck Koon in accordance with cl 3(1)(a) and (b) of the agreement. The fact and nature of this payment was not revealed to the plaintiffs at this point in time.

It was only on 18 September 1995 (see AB201) that Teo as solicitor for Teck Koon, wrote to seek the plaintiffs` consent to the sales of plot 1 (at $1.8m) and plot 2 (at $1.948m). The letter however was ambiguous; it did not reveal the identity of the purchasers nor did it state the date on which plot 1 was sold. Further, a copy of the agreement was not forwarded together with the letter of 18 September 1995. The fact that Teck Koon had already received 20% of the purchase price of plot 1 was also not told to the plaintiffs.

In the letter of 18 September 1995, Teck Koon also requested a discharge of the mortgage upon receipt by the plaintiffs of 70% of the purchase prices of plots 1 and 2. The plaintiffs` solicitors replied on 20 September 1995 (AB205) giving their approval of the sale prices but stated that the mortgage would be discharged only upon the plaintiffs` receipt of the full purchase price for each plot. On 28 September 1995 (AB227), Teck Koon wrote to the plaintiffs direct regarding the sale of plot 2. The plaintiffs were told that two ICB cheques for a total sum of $584,400 that were being deposited into Teck Koon`s account with the plaintiffs were payments for plot 2 and the plaintiffs were requested to deduct the amounts from Teck Koon`s overdraft account and loan.

Between September 1995 and July 1996, Teo and Goh made several progress payments to Teck Koon towards the purchase price of plot 1. These progress payments were by way of cheques which were deposited into Teck Koon`s account with the plaintiffs. The total sums paid into Teck Koon`s account with the plaintiffs amounted to $1.26m which constituted 70% of the purchase price of plot 1. The details of the progress payments are as follows:

Date	Mode of Payment	Amount (S$)
26.9.95	ICB cheque No 203151	95,000.00
27.9.95	ICB cheque No 300056	95,000.00
28.9.95	ICB casher`s order No 957066	350,000.00
9.12.95	ICB casher`s order No 957276	270,000.00
11.3.96	ICB casher`s order No 957553	270,000.00
15.7.96	ICB casher`s order No 957992	180,000.00
	Total:	1,260,000.00

There was no express request to the plaintiffs as to how these funds were to be applied. Meanwhile, the plaintiffs continued to disburse moneys progressively to Teck Koon pursuant to the facilities. Nothing eventful transpired between the plaintiffs and Teck Koon during this period except for a brief letter dated 14 February 1996 (AB288) from the company to the plaintiffs informing the latter that plots 1 and 2 had been sold.

On or about 1 July 1996, the Temporary Occupation Permit (TOP) for the two semi-detached houses was issued. Teo and Goh took vacant possession of the mortgaged property on or about 4 July 1996 and have since leased out the mortgaged property to one Choo See Chiah.

On 26 November 1996 (AB366), Teo as solicitor for Teck Koon, wrote to the plaintiffs requesting a partial discharge of the mortgage in respect of plot 2; no mention was made of plot 1. The plaintiffs` solicitors informed Teo that their clients were agreeable to the request as the remaining security over plot 1 was sufficient to cover the outstanding debts at that time. Consequently, the overdraft limit for the Acquisition Facility was reduced. On 7 January 1997, the mortgage over plot 2 was discharged. On Teck Koon`s application for subdivision in January 1997, two (2) new Certificates of Title for plots 1 and 2 were issued by the Land Titles Registry and the mortgage in favour of the plaintiffs was now endorsed on the Certificate of Title for the mortgaged property.

From December 1997 onwards, Teck Koon failed to service the outstanding amounts on the overdraft account satisfactorily. On 20 July 1998 (AB453), the plaintiffs recalled the facilities and demanded repayment of the sums then due and owing. When Teck Koon failed to respond, the plaintiffs` solicitors wrote letters of demand dated 20 August 1988 to the company and their directors (Ang Kim Leng and his wife Tan Bee Leng) as the guarantors. Tan Bee Leng replied to the plaintiffs on 26 August 1988 to say that Ang Kim Leng was abroad and requesting the plaintiffs to hold their hands until her husband`s return to Singapore; through their solicitors, the plaintiffs rejected her request. On 8 September 1998, the plaintiffs (through their solicitors) issued one month`s notice to Teck Koon of their intention to take possession of the mortgaged property. On the same date (see AB468), the plaintiffs` solicitors wrote to `The Occupiers` of the mortgaged property giving a similar notice (the notice to quit). Teo responded to the notice to quit on 28 September 1998 (AB471-2) in his capacity as his own solicitor and also acting for Goh. It was only then that the plaintiffs were told that Teo had acted for the real purchasers of plot 1, namely, himself and Goh. The plaintiffs then found out that Teo and Goh had paid Teck Koon 90% of the purchase price for plot 1 or the mortgaged property and were seeking the withdrawal of the notice to quit. A copy of the agreement of 14 November 1994 between Teck Koon and the nominal purchasers was shown to the plaintiffs for the first time. Thereafter, it was discovered that the initial 20% of the purchase price paid by Teo and Goh on 14 November 1994 was not deposited by Teck Koon into its...