Standard Chartered Bank v Elang Mas Enterprise Pte Ltd and Others

• Jurisdiction: Singapore
• Judge: MPH Rubin J
• Judgment Date: 23 August 2003
• Neutral Citation: [2003] SGHC 181
• Court: High Court (Singapore)
• Year: 2003
• Published date: 02 October 2003
• Plaintiff Counsel: Lee Eng Beng and Lynette Koh (Rajah & Tann)
• Defendant Counsel: Tan Cheow Hung (Y F Tan & Co),Vivian Chew (Assomull & Partners)
• Citation: [2003] SGHC 181

1 This was an appeal by the defendants against the decision of the Senior Assistant Registrar Mr Toh Han Li given on 30 December 2002 when he ordered amongst others the following:-

(a) the delivery by the first defendant and all others in occupation to the plaintiffs of possession of two properties known as 9 Ardmore Park, #06-04, Singapore 259945 (‘the first property’) and 9 Ardmore Park, #07-04, Singapore 259955 (‘the second property’); and

(b) there be payment by the defendants to the plaintiffs of the various sums owed to the plaintiffs under the banking facilities granted to the first and second defendants.

2 The defendants’ appeal against the said decision was heard by me and at the end I dismissed the appeal with costs. My reasons now follow.

Background facts

3 The plaintiffs are one of the leading bankers in this part of this world. The first and second defendants are and were, at all material times, customers of the plaintiffs. The first defendants are the registered proprietors of the said properties which were purchased for S$2,383,603 and S$2,409,869 respectively. The third and fourth defendants are the directors and shareholders of the first and second defendants as well as of an Indonesian tyre manufacturing company known as PT Elangperdana Tyre Industry. According to the defendants, the first defendants were acquired for the purposes of property investment in Singapore and the second defendants were the procurement arm of the said PT Elangperdana Tyre Industry, for banking facilities in Singapore. Part of the purchase price of the said properties was funded through a facility (‘the first facility’) granted by the plaintiffs.

Term loan facilities

4 In this regard, the documents in relation to the said first facility - a term loan - comprised: (a) a letter of offer dated 30 March 2000 from the plaintiffs addressed to the first defendants; and (b) a subsequent letter of offer dated 6 July 2000 from the plaintiffs also addressed to the first defendants varying the terms contained in the first letter of offer. The purport of the second letter was to restructure the earlier offer and to grant additional facilities to the first defendants.

5 As the present dispute seemed to revolve around the litigants’ respective rights and obligations, it would be necessary, at the outset, to make reference to some of the salient terms of the said letters of offers concerning the term loan facilities. Insofar as is material the first letter of offer dated 30 March 2000 contained the following preamble and terms:

30 March 2000

…

Elang Mas Enterprise Pte Ltd

....

(Attn: Ms Indah Nathania Tantio)

…

FACILITY LETTER

Mortgage of

1) Blk 1 Ardmore Park #06-04 Singapore 259945 (‘The Property 1’)

2) Blk 1 Ardmore Park #07-04 Singapore 259945 (‘The Property 2’)

Standard Chartered Bank (“the Bank”) is pleased to confirm its willingness to make available to you the banking facilities (“facilities”) outlined below, subject to the terms and conditions below and in the Bank’s Standard Terms and Conditions (Form No. 338-1198) attached, both of which are subject to amendment from time to time at the Bank’s sole discretion, and to the satisfactory completion of documentation. For the avoidance of doubt, in the case of any inconsistency between this Facility Letter and the Standard Terms and Conditions, the terms and conditions set forth herein shall prevail. (Highlight added)

FACILITIES

Type of Facility: Term Loan

Loan Amount : USD2,774,000.00 (“Optional Currency”).

Tenure: 300 months from the date of first disbursement of the Term Loan.

Purpose: To solely finance the purchase of ‘The Property 1’ and ‘The Property 2’.

Interest rate: Interest at Bank’s SIBOR plus 2% per annum payable monthly in arrears to the debit of your USD current account.

…

Repayment: Repayable in 299 equal monthly instalments (excluding interest) of USD9,247.00 and a final instalment of USD9,147.00 (excluding interest).

…

SECURITY

The availability of the facilities offered herein is subject to your provision of the following duly executed security documents in such form and substance as are satisfactory to the Bank:-

First legal all monies mortgage/assignment on the “Property 1” in favour of the Bank, the Bank having been satisfied that the ‘Property 1’ is good and acceptable security in all respects. The ‘Property 1’ is to be registered in the name of Elang Mas Enterprise Pte Ltd.

First legal all monies mortgage / assignment on the “Property 2” in favour of the Bank, the Bank having been satisfied that the “Property 2” is good and acceptable security in all respects. The ‘Property 2’ is to be registered in the name of Elang Mas Enterprise Pte Ltd.

…

SPECIAL CONDITION

1) The aggregate Current Market Value (CMV) of the above mortgaged properties must not be less than SGD9,000,000.00 at all times during the currency of the Facilities.

…

Acceptance

If you are agreeable to the above terms and conditions, please confirm your acceptance by signing and returning the duplicate copy of this Facility Letter within fourteen (14) days from the date hereof, after which time our offer will lapse unless an extension is requested for by you and agreed to by the Bank.

We are pleased to make this offer of banking arrangements and look forward to receiving your formal acceptance in due course.

…

6 The said offer and the terms stated in it were unconditionally accepted by the first defendants.

7 The second letter of offer dated 6 July 2000 was, as I mentioned earlier, for the purposes of restructuring the facility granted under the first letter of offer. Under the second offer, the earlier term loan in the sum of US$2,774,000 was restructured as Term Loan 1 for the sum of S$2,383,603 for the first property and Term Loan 2 for the sum of S$2,409,869 for the second property.

Overdraft and trade facilities

8 By a letter of offer dated 23 September 1999, the plaintiffs also granted the second defendants overdraft facility of USD50,000 and a Trade facility of USD200,000. By a letter of offer dated 3 April 2000, the plaintiffs increased the Trade facility to USD1,400,000. By a letter dated 6 June 2000, the plaintiffs incorporated additional terms to the letter of offer dated 3 April 2000. By a letter of offer dated 10 April 2001, the plaintiffs further increased the Trade facility to USD2,000,000 with the overdraft facility of USD50,000 covered within this limit (the second facility). The second facility was subject to the terms and conditions stated in the letters of offer, which said terms and conditions were duly accepted by the second defendants. Insofar as is material, the following segments in the said letters of offers in relation to the second facility require highlighting:

(a) LETTER DATED 23 SEPTEMBER 1999

Banking arrangements

Standard Chartered Bank (the “Bank”) is pleased to confirm its willingness to make available to Omnilite Investment & Trading Pte Ltd (the “Customer”) the uncommitted banking facilities (the “Facilities”) outlined below on the following terms and conditions, subject to the Bank’s Standard Terms and Conditions, as set out in Form 338-1198 attached hereto, and to the satisfactory completion of documentation:- (highlight and bold lettering added)

Availability clause:

In accordance with normal banking practice, the Facilities are made available solely at the discretion of the Bank and are subject to repayment on demand by the Bank.

Without prejudice to this obligation of the Customer, the Facilities shall be subject to review by the Bank from time to time.

(highlight and bold lettering added)

(b) LETTER OF OFFER DATED 3 APRIL 2000

Banking arrangements

(same as in letter dated 23 September 1999)

Security

Security for the above facilities and for facilities which may be extended by the Bank to the Customer from time to time:-

1) Fresh Charge over cash deposits of USD250,000/- and SGD600,000/- in the name of Indah Nathania Tantio held with the Bank.

2) Fresh second all monies mortgage over freehold residential properties situated at Blk 1 #06-04 and 07-04, Ardmore Park in the name of Elang Mas Enterprises Pte Ltd. Supporting Board Resolution to be held.

Fire Insurance policies covering the above properties for the full reinstatement value with the Bank’s interest indicated thereon (including mortgagee, non-cancellation and reinstatement value clauses) and premium paid receipts are to be lodged with the Bank.

3) Fresh all monies guarantee to be signed under seal by the following persons, subject to the Laws of Singapore:

Mira Nathania Halim

Indah Nathania Tantio

Conditions

1) The Customer is to maintain a minimum networth of SGD200,000/- at all times during the currency of the Facilities.

(Networth is defined as the sum of balances in paid-up capital and retained earnings but excluding revaluation reserves and intangible assets such as debts owed by the directors of the Customer.)

2) The aggregate Current Market Value (CMV) of the above mortgaged properties must not be less than SGD9,000,000/- at all times during the currency of the Facilities.

The advance to both Elang Mas Enterprises Pte Ltd and the Customer must not exceed at all times the combined sum of (i) USD deposits, (ii) 90% of the USD equivalent of the SGD deposits and (iii) 70% of the USD equivalent of CMV of the above mortgaged properties at the Bank’s prevailing exchange rate or USD4,224,000/- whichever is lower. Otherwise additional (top-up) security acceptable to the Bank are to be pledged to cover the shortfall or the limits reduced accordingly.

Availability clause

(Same as in letter dated 23 September 1999 (supra)

(c) LETTER DATED 6 JUNE 2000

Banking Arrangements

We advise that the Facilities made available to the Customer shall continue in force on the same terms and conditions as detailed in our Facility Letter dated 03/04/2000 except for the amendment to Security No. 1) indicated below:

Security

1) Fresh registered charge over cash deposits of USD250,000/- and...