United Overseas Bank Ltd v Pereira, Dennis John Sunny and another

• Jurisdiction: Singapore
• Judge: Hoo Sheau Peng JC
• Judgment Date: 31 March 2017
• Neutral Citation: [2017] SGHC 66
• Court: High Court (Singapore)
• Hearing Date: 06 February 2017
• Docket Number: Originating Summons No 619 of 2016 (Registrar’s Appeal No 2 of 2017)
• Plaintiff Counsel: Kang Weisheng, Geraint Edward and Seah Zhen Wei Paul (Tan Kok Quan Partnership)
• Defendant Counsel: Joseph Ignatius, Chong Xin Yi and Yeo Mui Lin (Yang Meilin) (Ignatius J & Associates)
• Subject Matter: Civil procedure,Stay of execution,Credit and security,Guarantees and indemnities
• Published date: 22 November 2017

Hoo Sheau Peng JC: Introduction

Originating Summons No 619 of 2016 was a mortgage action brought by the plaintiff, United Overseas Bank Ltd (“UOB”), under O 83 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”) seeking, inter alia, orders for the delivery of possession by the defendants of two mortgaged properties at 44 Toh Crescent, Singapore (“the Toh Crescent Property”) and 700 Upper Changi Road East, #02-08, Singapore (“the Changi Property”), which shall be referred to collectively as “the Properties”.

On 24 August 2016, the learned Assistant Registrar Lim Sai Nei (“the AR”) granted, inter alia, the orders for delivery of possession of the Properties sought by UOB. However, as the defendants’ daughter was staying at the Toh Crescent Property at that time, and was due to take certain major examinations in November 2016, the AR granted a stay of execution until 30 November 2016 in respect of the order relating to the Toh Crescent Property (which I shall refer to as “the order for possession”).

On 23 December 2016, the first defendant, Pereira Dennis John Sunny (“Mr Pereira”), applied by way of Summons No 6142 of 2016 for a further stay of execution of the order for possession until 31 March 2017, or such earlier time that Mr Pereira’s company, Offshore Logistics (Asia Pacific) Pte Ltd (“the Company”), was to be sold or otherwise dealt with, with liberty to apply for an extension if an impending sale were to be in the midst of completion (“the application for stay of execution”). This was brought pursuant to O 45 r 11 of the ROC.

The AR dismissed the application. Mr Pereira appealed. After hearing the parties, I did not think that there was any basis to grant a further stay of execution of the order for possession, and upheld the AR’s order. Mr Pereira has appealed against my decision, and I set out my reasons.

Background The parties

Mr Pereira is married to the second defendant, Faridah Binte V Abdul Lattif (“Mdm Faridah”). He is a director and majority shareholder of the Company, and Mdm Faridah is a housewife. The defendants jointly own the Toh Crescent Property. It used to be their family home. However, by the time the order for possession was made, Mr Pereira had moved out, and only Mdm Faridah and their daughter resided at the premises. The defendants also used to jointly own the Changi Property, which had been sold by UOB by the time of the hearing before me. For the avoidance of doubt, Mdm Faridah was not a party to, and the Changi Property did not feature in, this application for stay.

The underlying debt

The defendants mortgaged the Properties to UOB as security for monies due and owing to UOB pursuant to two housing loans granted by UOB to the defendants, as well as guarantees furnished by Mr Pereira to UOB in respect of two loans facilities extended by UOB to the Company.

Sometime around March 2015, the Company failed to pay the monthly instalments due to UOB under the two loan facilities. Then, sometime around March 2016, the defendants started to default on the payment of the monthly instalments due under the two housing loans. On 14 March 2016, UOB’s solicitors issued letters of demand to the defendants demanding payment of the outstanding sum of $8,264,249.71 and interests to be made within 14 days. The defendants did not make such payment.

On 25 April 2016, UOB’s solicitors served on the defendants a notice pursuant to s 75(2) of the Land Titles Act (Cap 157, 2004 Rev Ed), requesting that the defendants deliver possession of the Properties to UOB within one month of the service of the notice, failing which UOB would exercise its power of entry under the respective mortgages. The defendants did not comply. On 30 May 2016, UOB’s solicitors sent a second letter to the defendants and their solicitors requesting that the defendants deliver possession of the Properties to UOB within three days of the said letter. Again, the defendants did not comply.

The mortgage action

On 21 June 2016, UOB commenced the present mortgage action in respect of the Properties. Mr Pereira sought relief from forfeiture, arguing that it was unconscionable for UOB to repossess the Properties, and to cause the defendants to lose their home when the Company’s assets were more than enough to pay off the full sum of the debt owed. He highlighted the fact that UOB held multiple securities over the Company’s assets. Further, it was pointed out that on 7 June 2016, UOB had applied for the Company to be placed under judicial management (“JM”), and that the JM order was made on 1 July 2016. In making that application, UOB had deposed as to its belief that there was a reasonable prospect of rehabilitating the Company. As for Mdm Faridah, she explained that she had not been involved in the Company and appealed for the court’s leniency, particularly given her daughter’s upcoming examinations.

The AR disagreed with Mr Pereira’s arguments, holding that relief against forfeiture should not be granted (even assuming that it applied in the first place), and that UOB had not been acting unconscionably as it was merely exercising its contractual rights. As such, orders for vacant possession of the Properties were granted. Specifically, in respect of the Toh Crescent Property, a stay of execution of three months (ie, until 30 November 2016) was granted, so as not to disrupt the defendants’ daughter in her preparation for her examinations. UOB did not object to this three months’ grace period.

On 30 November 2016, UOB’s solicitors wrote to the defendants and their solicitors to notify them that UOB would take the necessary actions to enforce the order for possession if the defendants failed to deliver the keys to the Toh Crescent Property by 1 December 2016. Around this time, Mdm Faridah called UOB’s solicitors to inform them that, in compliance with the order for possession, she had vacated the Toh Crescent Property and that her keys were with Mr Pereira.

As for Mr Pereira, on 30 November 2016, his solicitors wrote to UOB’s solicitors to request an extension of one month for the delivery of possession of the Toh Crescent Property to UOB, in order to “allow [Mr Pereira] and his daughter to firstly remove their personal property”. The next day, UOB’s solicitors replied by letter rejecting Mr Pereira’s request on the ground that ample time had already been given to him to remove his personal property, especially considering that Mr Pereira had not been in occupation of the Toh Crescent Property for some time. Solicitors for UOB and Mr Pereira continued to engage in correspondence, in the course of which UOB’s solicitors consistently rejected Mr Pereira’s contentions and proposals with regard to the Toh Crescent Property.

On 13 December 2016, UOB’s solicitors filed a writ of possession in respect of the Toh Crescent Property. On 23 December 2016, the Sheriff, together with representatives of UOB and its solicitors, attempted to execute the writ of possession, but discovered that Mr Pereira was in occupation of the premises. Mr Pereira then informed UOB that he had instructed his solicitors to file the present application for stay of execution.

The application for stay of execution

Indeed, the application for stay of execution was lodged on 23 December 2016. In the supporting affidavit (which was affirmed ten days prior), Mr Pereira averred that since the hearing before the AR, the Company had received new offers for its acquisition, the highest offer being one by LOGOS Property Group Pte Ltd (“LOGOS”) for around $9.8m. Although the LOGOS offer initially seemed like it would fall through due to restrictions on the use of the Company’s premises imposed by the landlord, JTC Corporation (“JTC”), Mr Pereira produced a letter from JTC dated 9 November 2016, which stated that JTC was “prepared to consider allowing [the Company] to extend the approved use to include other manufacturing activities but not logistics operation[s]”. Mr Pereira believed that this would allow the Company to secure other acquisition offers comparable to the LOGOS offer, which would be sufficient to pay off the debts due to UOB.

At the hearing for the application for stay of execution before the AR on 4 January 2017, Mr Pereira’s counsel requested an adjournment to respond to the reply affidavit by UOB, which had been filed one day before the hearing (“UOB’s Reply Affidavit”). Counsel for UOB countered that this was simply a “delaying tactic” on Mr Pereira’s part. The AR held that a reply affidavit from Mr Pereira was not necessary. Noting that it had already been more than four months since the order for possession was made, and that the initial stay of execution had been granted only to avoid disruption to the defendants’ daughter’s preparation for examinations, the AR dismissed the application for stay of execution on the basis of the written submissions and affidavits that were before her. This formed the subject matter of the appeal before me.

The appeal

To reiterate, the application for stay of execution was brought pursuant to O 45 r 11 of the ROC, which provides that the court may grant a stay of execution of an order on the ground of matters which have occurred since the date of the order, and on such terms as it thinks fit. Where a party relies on such matters which have occurred since the date of the order for the purposes of O 45 r 11, that party must show “that the matters referred to are matters which would or might have prevented the order being made or would or might have led to a stay of execution if they had already occurred at the date of the order” [emphasis added]: SAL Leasing (Pte) Ltd v Hendmaylex Pte Ltd and others [1987] SLR(R) 303 at [8].

As a preliminary matter, at...