United Overseas Bank Ltd v Lippo Marina Collection Pte Ltd

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean JAD,Woo Bih Li JAD,Quentin Loh JAD
• Judgment Date: 28 October 2022
• Docket Number: Civil Appeal No 67 of 2021
• Court: High Court Appellate Division (Singapore)

United Overseas Bank Ltd

and

Lippo Marina Collection Pte Ltd

[2022] SGHC(A) 38

Belinda Ang Saw Ean JAD, Woo Bih Li JAD and Quentin Loh JAD

Civil Appeal No 67 of 2021

Appellate Division of the High Court

Tort — Conspiracy — Independent appraisers considering stated purchase prices as benchmark for valuations for sale of other units within same condominium development — Whether valuations obtained by financing bank supported stated purchase prices on respective options to purchase

Tort — Conspiracy — Property developer and vendor of condominium development awarding significant rebates over $1m for each unit purchased by 38 purchasers referred to it by two property agents which were not reflected in prices stated on respective options to purchase issued by it — Whether property developer and vendor part of conspiracy to obtain housing loans for amounts higher than would otherwise be obtainable from financing bank

Tort — Misrepresentation — Fraud and deceit — Property developer and vendor allegedly misrepresenting having received payments of certain fees for each of respective units to financing bank — Whether representations made to financing bank

Held, allowing the appeal in part:

(1) The FR was not a genuine rebate for several reasons. First, the sheer magnitude of the FR (ie, the difference between the APP and the SPP), in absolute numbers and in percentage terms (ranging between 30.6% and 52.6% of the APP) suggested that the FR was not a genuine rebate. Second, contrary to Lippo's argument, the respective valuations obtained by UOB did not truly support the SPP. The independent appraisers used a method which considered the SPPs as the benchmark for valuations for the sale of other units within the Marina Collection. All of the appraisers attested that had they been aware of the substantial rebate given by the respondent vendor, they would have considered such rebate in valuing the units. Third, the only logical reason why Lippo did not state the APP on the OTP and the FR was concealed from UOB and the appraisers was to obtain a valuation and a loan that was higher than would otherwise be obtainable if the FR were revealed to UOB which was, in turn, because the SPP was an inflated price and not the real purchase price: at [48], [49], [56], [57], [59], [60] and [72].

(2) The real purchase price and the true value of a property ought not to be conflated. The real purchase price was the net price which Lippo and the purchasers agreed that the purchasers were to pay (ie, after taking into account all rebates). The real purchase price was different from the true value. On the facts, the real purchase price was the APP, not the SPP. There was no doubt that Lippo and the brokers knew that the real purchase price was as such. Whether the SPP could be supported by valuations was a separate question and was answered in the negative: at [61] to [63].

(3) The SPP was not the real purchase price. It was an inflated price from the real purchase price which was the APP, which Lippo had falsely reflected on the OTP (the “OTP Misrepresentations”). The OTP Misrepresentations were crucial because the entirety of the financing and the conveyancing processes flowed directly from the SPP in the OTP. The genesis of the steps taken under the FRP was the issuance of the OTP by Lippo using the SPP and not the APP, such that it could not be said that Lippo was merely apathetic to the loan procurements. Another step was to mislead its solicitors and PKWA into believing that the Balance Purchase Price, which amounted to at least 20% of the SPP, had been paid so that UOB would disburse the moneys under the loans: at [95], [96], [101], [102] and [108].

(4) Whether the FRP was part of a plan to earn profits by way of investing in the 38 Units could not ipso facto demonstrate that there was no intention to cause damage to UOB. Even taking Lippo's case at its highest, injury to UOB had to have been intended as a means to an end. The harm that UOB suffered was that it had lent more than it would have had the APP been reflected in the OTP. It did not assist Lippo to say that there would have been no actual loss if the purchasers had not defaulted. That was a rhetorical argument since all 38 purchasers in the present case defaulted on their respective loans: at [119], [120] and [124].

(5) Lippo was accordingly liable for the tort of unlawful means conspiracy. The conspiracy was planned by Ms Woo and Mr Goh as a way to essentially (and brazenly) circumvent the Government's property cooling measures: at [130].

(6) The TSMP Letters suggesting that the Completion Fee had been paid by 37 out of the 38 purchasers could not found UOB's claim in deceit as against Lippo. The TSMP Letters that were pleaded by UOB were addressed to PKWA in PKWA's capacity as solicitors for the purchasers. It would have been a simple matter for UOB to elaborate that Lippo knew and intended that the false information would be further conveyed to UOB's solicitors and hence also to UOB for both of them to act upon. It did not do so and, to that extent, UOB's pleading was defective: at [138] and [140].

[Observation: Lippo did not appear to fully appreciate the gravity of its conduct. Not only did it deceive UOB, other appraisers and purchasers would also rely on the SPP in the OTP to value other units in Marina Collection which were purchased or in comparable projects. The SPP presented a distorted picture of a segment of the property market: at [151].]

Case(s) referred to

Bank Gesellescharft Berlin International SA v Zihnali [2001] All ER (D) 192 (folld)

Beckkett Pte Ltd v Deutsche Bank AG [2009] 3 SLR(R) 452; [2009] 3 SLR 452 (refd)

EFT Holdings, Inc v Marinteknik Shipbuilders (S) Pte Ltd [2014] 1 SLR 860 (folld)

IPP Financial Advisers Pte Ltd v Saimee bin Jumaat [2020] 2 SLR 272 (distd)

JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd [2020] 2 SLR 1256 (folld)

Ma Hongjin v SCP Holdings Pte Ltd [2021] 1 SLR 304 (folld)

Panatron Pte Ltd v Lee Cheow Lee [2001] 2 SLR(R) 435; [2001] 3 SLR 405 (folld)

SIC College of Business and Technology Pte Ltd v Yeo Poh Siah [2016] 2 SLR 118 (folld)

United Overseas Bank Ltd v Lippo Marina Collection Pte Ltd [2016] 2 SLR 597 (refd)

Facts

The appellant (“UOB”) disbursed housing loans to purchasers of 38 units between December 2011 and July 2013 in a condominium development at Sentosa Cove (the “38 Units” and “Marina Collection” respectively), which was developed by the respondent (“Lippo”). The sales of the 38 Units were brokered by two property agents, a husband-and-wife team (“Mr Goh” and “Ms Ho” respectively). Lippo was represented by its director (“Ms Woo”). The Marina Collection was launched for sale in or around December 2007. At the material time, the Government introduced various measures to cool the property market in Singapore. Between December 2007 to 10 March 2011, only 42 of 124 units in the Marina Collection were sold. By 1 April 2015, all 38 purchasers had defaulted on their loans.

As the vendor of the 38 Units, Lippo issued each option to purchase (“OTP”) and stated the purchase price therein (“SPP”). The payment schedule for each of the 38 Units was as follows: (a) 1% of the SPP to be paid when Lippo issued an OTP to the purchaser (“1% Option Fee”); (b) 4% of the SPP to be paid upon the exercise of the OTP by the purchaser (“4% Exercise Fee”); (c) at least 15% of the SPP to be paid prior to completion (“Completion Fee”); and (d) about 70% to 80% of the SPP to be disbursed by UOB as the amount of housing loan granted to the purchaser (upon the satisfaction of certain conditions such as UOB's satisfaction that the purchaser had paid the difference between the SPP and the housing loan). Close to completion, Lippo's solicitors (“TSMP”) wrote to the solicitors for the purchasers (“PKWA”) to inform them that Lippo had received payment of the Completion Fee for the relevant unit. PKWA also acted for UOB.

In or around December 2011, Mr Goh raised difficulties in getting buyers for the Marina Collection which arose because of the Government's cooling measures. Under those market conditions, Ms Woo and Mr Goh agreed to the following “Furniture Rebate Plan” (“FRP”): (a) the purchaser received an in-principle sum amounting to a “Furniture Rebate” (“FR”) from Lippo – which itself did not exist tangibly but only notionally – prior to issuing the OTP; (b) despite such in-principle agreement, Lippo issued an OTP to each purchaser stating a purchase price that did not reflect the FR; (c) the purchaser provided Lippo with cheques for the 4% Exercise Fee and the Completion Fee based on the SPP; (d) Lippo did not encash any of these cheques; (e) upon UOB's approval of a purchaser's housing loan application for the purchase of the unit, Lippo documented the FR by way of letter, which was used to set off against the 4% Exercise Fee and Completion Fee (meaning that these fees were paid from the loan by UOB and not any other party); (f) the FR granted by Lippo to the purchaser amounted to the total of the 4% Exercise Fee, Completion Fee, and a surplus sum for the purchaser; and (g) Lippo returned the cheques for the 4% Exercise Fee and Completion Fee to the purchaser without encashing them on completion (effectively meaning that no part of such fees were paid by the purchaser). The actual purchase price that each purchaser was liable to pay Lippo for (and which would be paid using the loan with a leftover surplus) was thus SPP less the FR, which was referred to as the “Adjusted Purchase Price” (“APP”).

The purchasers were required to declare any rebates that they had received in the application forms for housing loans. All except one failed to declare the FR. The sole purchaser who stated that he had received a rebate grossly under-declared it as $3,510 compared to the true quantum of the FR received of $1,784,150. The end result was that UOB was unaware of the FR (or its full extent...