United Overseas Bank Ltd v Singapore Engineers Ltd

• Jurisdiction: Singapore
• Judgment Date: 17 June 1966
• Date: 17 June 1966
• Docket Number: Suit No 1535 of 1965
• Court: High Court (Singapore)

United Overseas Bank Ltd

Plaintiff

and

Singapore Engineers Ltd

Defendant

[1966] SGHC 33

A V Winslow J

Suit No 1535 of 1965

High Court

Choses in Action–Assignment–Construction–Letter to make future payments to third party–Whether equitable assignment or revocable letter of authority to pay agent

A company who did work for the Housing Development Board (“the Board”) wrote a letter to the Board authorising it to “make all future payment direct to our bankers” against bills submitted to it for projects undertaken by the company for the Board. The company's banker in question was the plaintiff. The defendant was the judgment creditor of the company. The issue that arose was whether the letter constituted an equitable assignment by the company in favour of the plaintiff (as the plaintiff contended) or whether it was merely a revocable letter of authority to pay the plaintiff as the company's agent (as the defendant contended).

Held, allowing the claim:

(1) An equitable assignment requires no particular form of words. All that is necessary is the debtor should be given to understand that the debt has been made over by the creditor to some third person and if he ignores the notice, he does so at his peril: at [10].

(2) The fact that no indebtedness had been proved as between the company and the plaintiff did not prevent the inference that the assignment was by way of security: at [13].

(3) The intention of the parties was for the moneys that were paid over to the plaintiff to be held in its own account. The mere fact that the company may have an account with the plaintiff did not operate to constitute the latter an agent of the company. There was an irresistible conclusion that there were financial facilities accorded by the plaintiff to the company which the company wished to discharge: at [12] and [13].

Bell v The London and North-Western Railway Co (1852) 15 Beav 548; 51 ER 651 (refd)

Crowfoot v W B Gurney (1832) 9 Bing 372; 131 ER 655 (refd)

Holt v Heatherfield Trust Ltd [1942] 2 KB 1; [1942] 1 All ER 404 (refd)

William Brandt's Sons & Co v Dunlop Rubber Co [1905] AC 454 (folld)

Yeo Chiang Swee v United Decorators [1933] MLJ 85 (refd)

K S Chung (Chung & Co) for the claimant/plaintiff

Lim Koon Teck (J Y P Chia & Co) for the defendant.

Judgment reserved.

A V Winslow J

1 The issue which I have to try here is whether a letter dated 27 June 1962 written by Gim Guan Co Ltd to the Chairman, Housing & Development Board, Singapore, is a valid equitable assignment by Gim Guan Co Ltd (hereinafter known as “the company”) in favour of the plaintiff, United Overseas Bank Ltd formerly known as the United Chinese Bank Ltd (hereinafter referred to as “the bank”) of all payments due to the company by the said Housing & Development Board. The letter (Exh AB1) dated 27 June 1962 is in the following terms:

We hereby authorise you to make all future payment direct to our bankers, The United Chinese Bank Ltd...