United Overseas Bank Ltd v Bebe bte Mohammad

JurisdictionSingapore
JudgeLai Kew Chai J
Judgment Date30 June 2005
Neutral Citation[2005] SGHC 113
Docket NumberSuit No 32 of 2004
Date30 June 2005
Published date01 July 2005
Year2005
Plaintiff CounselKenny Chooi, David Kong and Kelvin Fong (Yeo-Leong and Peh LLC)
Citation[2005] SGHC 113
Defendant CounselGeorge Pereira (Pereira and Tan)
CourtHigh Court (Singapore)
Subject MatterMortgage of real property,Registered mortgages,Section 160(1)(b) Land Titles Act (Cap 157, 1994 Rev Ed),Whether mortgage defeated by mortgagor's disability,Registration of title,Creation,Whether land-register should be rectified on ground that registration resulting from mistake,Sections 46(1), 46(2)(d) Land Titles Act (Cap 157, 1994 Rev Ed),Effect of,Whether mortgagor having in personam remedy to set aside mortgage,Sections 43(5), 46(2) Land Titles Act (Cap 157, 1994 Rev Ed),Whether mortgagee's title to property defeated by fraud,Credit and Security,Mortgagee unaware mortgagor of unsound mind at time of execution of mortgage,Mortgage registered on basis of cancelled certificate of title,Land

30 June 2005

Judgment reserved.

Lai Kew Chai J:

1 The plaintiff claims as mortgagee to enforce its rights under an instrument of mortgage dated 3 November 2000 (“the Mortgage”) in respect of a bungalow situated at 18 Orchid Drive, Singapore (“the property”), upon the default of the defendant on the terms of the Mortgage.

2 The Mortgage, on the face of it, was security given by the defendant to the plaintiff for the grant of banking facilities (“the facilities”) to Mr Junaidi bin Johari (“Junaidi”) and Mdm Suzanah bte Hassan (“Suzanah”), who are referred to as “the borrowers”. The borrowers traded under the style of JSN Enterprises. Suzanah is the defendant’s adopted daughter. Junaidi is the husband of Suzanah.

3 The full amount of the facilities was drawn down by the borrowers. As at 12 January 2004, there was owing the sum of $1,228,722.10 together with continuing interest and costs on an indemnity basis. Despite demands from the plaintiff, the defendant failed to pay the full sum outstanding and/or to surrender vacant possession of the property to the plaintiff.

4 In this action, the plaintiff claims from the defendant the following reliefs:

(a) delivery of vacant possession of the property to the plaintiff by the defendant and all others in occupation;

(b) the sum of $1,228,722.10 due and payable as at 12 January 2004;

(c) contractual interest on the sums outstanding from 13 January 2004 until the date of full payment; and

(d) costs on an indemnity basis.

5 The plaintiff first commenced action by way of Originating Summons No 539 of 2002 (“the OS proceedings”) to enforce the Mortgage. The defendant in this action was the third defendant in the OS proceedings. The first and second defendants in the OS proceedings were Suzanah and Junaidi. By a judgment dated 13 December 2002 made in the OS proceedings, the plaintiff was granted leave to discontinue the OS proceedings against the defendant without prejudice to the commencement of an action by writ against the defendant. The costs of the OS proceedings against the defendant were fixed at $7,500.00 to be paid depending on the outcome of the fresh action against the defendant. The plaintiff applied for the said order because it did not wish to continue with the OS proceedings against the defendant as if it was an action begun by writ.

6 The plaintiff did nothing at all to discontinue the OS proceedings or to commence the fresh action by writ. The defendant then applied in the OS proceedings and obtained an order dated 15 September 2003 ordering, inter alia, the plaintiff to file a notice of discontinuance by 12 January 2004 failing which the plaintiff was to pay the defendant the costs of $7,500.00. It was then that the plaintiff commenced the proceedings in this suit on 12 January 2004.

7 In this action, it is alleged on behalf of the defendant that she was of unsound mind and was incapable of managing her affairs when she executed the Mortgage on 19 October 2000. It is further asserted on her behalf that the solicitor of the plaintiff, in the course of handling the Mortgage as an agent of the plaintiff, was guilty of such wilful blindness or voluntary ignorance which, according to the authorities, was equivalent to actual knowledge and therefore amounted to fraud within the meaning of ss 46(2) and 160(1)(b) of the Land Titles Act (Cap 157, 1994 Rev Ed) (“the LTA”) and the concept as enunciated by Salmond J in Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd [1923] NZLR 1137 at 1175. Thirdly, and in the alternative, the defendant seeks an order pursuant to s 160(1)(b) to rectify the land-register by cancelling the registration of the Mortgage on the ground that the registration was obtained through an omission or mistake. Fourthly, and in the further alternative, the defendant asks the court to allow her, as an exception to the doctrine of indefeasibility under the LTA, the “in personam remedy” against the plaintiff by reason of its and its agents’ conduct, seeing that no interest of any bona fide third party had intervened.

Basic facts

8 The basic facts which are not disputed are as follows. I will later set out the evidence relating to the issues of fact. The defendant has been the registered owner of the property since 16 March 1967. The title to the defendant’s property was comprised in Certificate of Title Vol 495 Folio 160 (“the Original CT”).

9 The defendant is about 90 years old. She has two adopted daughters, namely Suzanah and Hajjah Aisah bte Haji, alias Mimi Haji (“Hajjah”).

10 In early 2000, the Original CT was found missing. Hajjah then engaged, on behalf of the defendant, solicitors to act for the defendant to apply for and obtain a replacement certificate of title. This was done by way of an application for replacement certificate of title No I/188861N which was lodged with the Registry of Titles (“the Registry”) on 30 May 2000.

11 Pursuant to the said application for replacement of the certificate of title, the replacement certificate of title (“the Replacement CT”) was issued on 6 July 2000. It should be noted that the word “REPLACEMENT” is stated clearly on the front page of the document at the top right hand side of the page and it is also described as “Edition 1”.

12 On the evidence, it is not disputed that the Replacement CT has at all material times been in the possession of Hajjah and continues to be in her possession up to the trial of this action.

13 Section 43(5) of the LTA requires the Registrar of Titles to enter in the relevant folio of the land-register a notification of the issue of the replacement certificate of title and that notification operates to cancel the lost original certificate of title “for all purposes notwithstanding the fact that the certificate may subsequently be recovered”.

14 By a letter dated 29 September 2000, the plaintiff offered JSN Enterprises credit facilities of $1,000,000.00 upon the security of a legal mortgage of the property of the defendant. It will be recalled that Suzanah and Junaidi were the partners of JSN Enterprises. They played no part in these proceedings and I am told that they are untraceable.

15 The plaintiff appointed M/s Mohan Das Naidu & Partners as its solicitors in the mortgage of the property of the defendant. Mr Mohan Das Naidu (“Mr Naidu”) was the solicitor in charge of the matter.

16 M/s Junaini and Jailani (“M/s Junaini”) acted for the borrowers and, on the face of it, they also acted for the defendant as the mortgagor of the property. Mr Junaini bin Manin was the solicitor in charge. At the time he gave evidence, he was serving sentence for another offence which had nothing to do with this case.

17 It is not disputed that prior to the execution of the Mortgage, Mohan Das Naidu & Partners conducted the relevant searches in respect of the property. The solicitors through themselves or their conveyancing clerk knew that a replacement certificate of title was issued in respect of the property. In their usual report to their clients, Mr Naidu informed the plaintiff in writing that a replacement certificate of title was issued, but he did not enclose a copy thereof as should have been the usual practice. The simple reason was that they had not received the Replacement CT from M/s Junaini, which would have been in the usual course of events. Instead, Mr Naidu received the original duplicate certificate of title from one Mr Rajan Pillay, the agents of Suzanah and Junaidi.

18 In fact, Mohan Das Naidu & Partners had written to M/s Junaini on 24 October 2000 seeking their confirmation that Mr Rajan Pillay was acting with the authority of the latter’s clients when he, Mr Rajan Pillay, handed over to Mr Naidu “the original Duplicate Certificate of Title Volume 495 Folio 160”. No confirmation was elicited from M/s Junaini and the matter was not pursued further by Mr Naidu.

19 If Mr Naidu had required the production of the Replacement CT, as he should have done, the fraud would have been exposed.

20 The Mortgage was executed by Suzanah and Junaidi, as partners of JSN Enterprises, as borrowers and, on the face of it, it was executed by the defendant as the mortgagor on 19 October 2000. Mr Junaini as solicitor signed the usual solicitor’s certificate, to the effect that the defendant understood the terms of the Mortgage and the extent of the defendant’s liability. I will evaluate his evidence later in this judgment.

21 The Mortgage was registered at the Registry.

22 Section 42(1) of the LTA stipulates that a certificate of title must be produced for the purposes of effecting registration of any instrument.

Findings of facts

23 I now turn to the questions of fact and set out my findings based on the evidence adduced.

24 The first question of fact to determine is whether Mr Naidu had used the Original CT to register the Mortgage. On the evidence, I find that he had. The Replacement CT, since its issue, has at all material times up to the hearing before me been in the exclusive possession of Hajjah, whose evidence on this I have no hesitation in accepting. The Replacement CT has been verified as authentic, on the evidence of the Singapore Land Authority (“SLA”) and SNP Security Printing Pte Ltd (“SNP”). They confirmed that the paper on which the Replacement CT is printed bears the SNP watermark and the security design used on the Replacement CT was created by SNP for SLA. In the case of the title to the property, the SLA confirmed that only one application was made for the Replacement CT. Mr Naidu himself wrote a letter dated 24 October 2000 to M/s Juanini informing them that one Mr Rajan Pillay had handed to him “the original...

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5 cases
  • United Overseas Bank Ltd v Bebe bte Mohammad
    • Singapore
    • Court of Appeal (Singapore)
    • October 23, 2006
    ...(“the Registrar”) to rectify the land register by cancelling the Mortgage. The Judge's grounds of decision (“GD”) are reported in [2005] 3 SLR (R) 501. Background 2 The salient facts may be summarised as follows: (a) The respondent had two adopted daughters, Suzanah bte Hassan (“Suzanah”) a......
  • Malayan Banking Berhad v Sivakolunthu Thirunavukarasu and Others
    • Singapore
    • High Court (Singapore)
    • September 28, 2007
    ...2006, a leading case on s 46(2) and s 160 of the LTA was the High Court decision in United Overseas Bank Ltd v Bebe bte Mohammad [2005] 3 SLR 501 (“UOB v Bebe No 1”), and it can be inferred that the defendants drew encouragement and support from that decision when they made their 24 In that......
  • Malayan Banking Berhad v Sivakolunthu Thirunavukarasu and Others
    • Singapore
    • High Court (Singapore)
    • September 28, 2007
    ...2006, a leading case on s 46(2) and s 160 of the LTA was the High Court decision in United Overseas Bank Ltd v Bebe bte Mohammad [2005] 3 SLR 501 (“UOB v Bebe No 1”), and it can be inferred that the defendants drew encouragement and support from that decision when they made their 24 In that......
  • United Overseas Bank Ltd v Bebe bte Mohammad
    • Singapore
    • Court of Appeal (Singapore)
    • September 25, 2006
    ...Titles (“the Registrar”) to rectify the land register by cancelling the Mortgage. The Judge’s grounds of decision (“GD”) are reported in [2005] 3 SLR 501. Background 2 The salient facts may be summarised as (a) The respondent had two adopted daughters, Suzanah bte Hassan (“Suzanah”) and Haj......
  • Request a trial to view additional results
2 books & journal articles
  • Land Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2005, December 2005
    • December 1, 2005
    ...of title and interests Fraud, mistake and power of court to rectify land register 17.2 In United Overseas Bank Ltd v Bebe bte Mohammad[2005] 3 SLR 501, the plaintiff had commenced action in the High Court for, inter alia, delivery of vacant possession of the defendant”s mortgaged property u......
  • Land Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2006, December 2006
    • December 1, 2006
    ...the mortgage executed in favour of the appellant null and void. The appellant had appealed against the decision of the trial judge (see [2005] 3 SLR 501), inter alia, declaring null and void and setting aside the mortgage registered against the respondent”s property and ordering the Registr......

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