United Overseas Bank Ltd v Lippo Marina Collection Pte Ltd

JudgeBelinda Ang Saw Ean JAD
Judgment Date28 October 2022
Neutral Citation[2022] SGHC(A) 38
Citation[2022] SGHC(A) 38
Docket NumberCivil Appeal No 67 of 2021
Hearing Date29 April 2022
Published date02 November 2022
Plaintiff CounselNg Ka Luon Eddee, Alcina Lynn Chew Aiping, Leong Qianyu and Natalie Ng Hai Qi (Tan Kok Quan Partnership)
Defendant CounselSiraj Omar SC, See Chern Yang, Teng Po Yew, Audie Wong Cheng Siew and Hendroff Fitzgerald L (Drew & Napier LLC)
Subject MatterTort,Conspiracy,Misrepresentation,Fraud and deceit
Woo Bih Li JAD (delivering the judgment of the court): Introduction

AD/CA 67/2021 (“CA 67”) is an appeal arising from housing loans disbursed by the appellant, United Overseas Bank Limited (“UOB”), 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). The condominium was developed by the respondent developer Lippo Marina Collection Pte Ltd (“Lippo”). It was launched for sale in or around December 2007. Between December 2007 to 10 March 2011, only 42 of 124 units in the Marina Collection were sold.

UOB commenced Suit No 1250 of 2014 against various persons. The focus for the purposes of CA 67 is on the following defendants: Lippo and two property agents, a husband-and-wife team, Goh Buck Lim (“Mr Goh”) and Aurellia Adrianus Ho (“Ms Ho”). The claims were based on the torts of unlawful means conspiracy and deceit. Lippo entered into an arrangement where Lippo would grant “Furniture Rebates” (“FR”) to purchasers referred to it by Mr Goh and Ms Ho. All 38 purchasers received the FR and UOB alleged that the FR was not disclosed by the purchasers, in breach of the terms of the loan facilities. This also caused UOB to breach the Monetary Authority of Singapore Notice 632 (“MAS” and “MAS Notice 632” respectively) in operation at the material time which permitted banks to lend up to 80% of the loan-to-value limit (“LTV Limit” and “80% LTV Limit” respectively).

In United Overseas Bank Ltd v Lippo Marina Collection Pte Ltd and others [2021] SGHC 283 (the “GD”), the judge below (“the Judge”) held that only the claims in deceit succeeded as against the two property agents (at [130]). The conspiracy claim against the property agents and Lippo was dismissed entirely. CA 67 is UOB’s appeal against the Judge’s dismissal of both of its claims against Lippo for unlawful means conspiracy and/or deceit. There is no appeal by either of the two property agents.

The dispute between UOB and Lippo was made unnecessarily complicated by the focus adopted by UOB. In that focus, UOB’s arguments, which were roundabout and convoluted, did not strike at the heart of the dispute. Having considered the parties’ arguments and the evidence, the court’s view is that central to the determination and outcome of this appeal is a proper appreciation of the role that Lippo played in the sale of the 38 Units. As the vendor of the 38 Units, Lippo issued each option to purchase (“OTP”) and stated the purchase price therein (“SPP”).

Accordingly, the approach in this judgment is to identify the role and significance of Lippo in inserting the SPP in the OTP. This judgment addresses the two causes of action against Lippo in that light.

Facts The parties and witnesses

Lippo was the first defendant in the proceedings below. It was represented by its director, Woo Pui Lim (“Ms Woo”). Mr Goh and Ms Ho (who were the second and third defendants in the proceedings below) co-brokered the sale and purchase of each of the 38 Units. While Mr Goh filed an affidavit of evidence-in-chief (“AEIC”) and testified at the trial, Ms Ho did not (GD at [26]). Mr Goh was the main broker who liaised with Lippo (including Ms Woo and other representatives of Lippo) while Ms Ho was the main broker who liaised with a representative of UOB, Ong Shuwen Ann (“Ms Ong”), and the purchasers.

UOB, who was the plaintiff in the proceedings below, is a commercial bank licensed by the MAS to offer, among other services, commercial loans, including housing loans. Lippo accepted that because UOB would lodge caveats when it granted loans to the purchasers and Lippo would be notified of the caveats, Lippo knew that UOB was the bank making loans to the purchasers. Ms Ong was UOB’s Vice-President for Home Loans and the salesperson who liaised with Mr Goh and/or Ms Ho. Ms Ong conferred with Lippo by way of e-mail on at least two separate occasions (GD at [47]). Ms Ong was not, however, called as a witness by either party.

UOB engaged the services of several licensed appraisers to value each of the 38 Units. The appraisers estimated the best price at which a property might reasonably be expected to be sold at the date of valuation under certain market conditions. This was the open market valuation (“OMV”). The appraisers considered, among other information, the sales of other units in the Marina Collection and other similar properties in the vicinity (the “Comparable Sales Method”). Using the Comparable Sales Method, the appraisers determined a range of acceptable valuations and, where the SPP was within that range, that SPP was adopted as the OMV.

All of the appraisers attested that had they been aware of the substantial FR given by Lippo, they would have considered such FR in valuing the units.

UOB called two further expert witnesses. Christopher Thomas Koh Kia Yong (“Mr Koh”), the Key Executive Officer of a property and training consultancy firm, provided an opinion on the FR and gave evidence on the cooling measures in force at the material time. Tee Lee Lian (“Ms Tee”), a Partner in the Real Estate Department of the law practice of Bih Li & Lee LLP, provided an opinion on conveyancing practices.

Background to the dispute The sale of the 38 Units and market conditions at that time

Ms Tee explained the payment schedule for each of the 38 Units as follows: 1% of the SPP was to be paid when Lippo issued an OTP to the purchaser (“1% Option Fee”); 4% of the SPP was to be paid upon the exercise of the OTP by the purchaser (“4% Exercise Fee”); at least 15% of the SPP was to be paid prior to completion (“Completion Fee”); and about 70% to 80% of the SPP was 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 Law Corporation (“TSMP”) wrote to the solicitors for the purchasers, PKWA Law Practice LLC (“PKWA”) to inform that Lippo had received payment of the Completion Fee for the relevant unit.

At the material time, the Government introduced various measures to cool the property market in Singapore from 26 October 2007. The Marina Collection was launched shortly thereafter in or around December 2007. For example, the Government withdrew the Deferred Payment Scheme. Under that former Deferred Payment Scheme, developers could offer buyers of new projects the option to pay a down payment of only 10% and defer payment of the remaining 90% of the purchase price until the collection of keys.

In February 2010, the Government announced the lowering of the LTV Limit for housing loans from 90% to 80%. This measure was introduced following a sharp spike in demand for private housing units and property purchase prices, as part of the Government’s incremental efforts to temper market sentiments and pre-empt a property bubble from forming. From 13 January 2011, the MAS imposed the 80% LTV Limit and this remained a requirement throughout the 38 transactions (GD at [10]). Both Ms Woo and Mr Goh admitted that they knew banks such as UOB were subject to the 80% LTV Limit, and that purchasers are obliged to declare any rebates granted to the financing bank (ie, UOB in the present case).

On 30 August 2010, the Government announced a further lowering of the LTV Limit from 80% to 70% and increased the minimum cash down payment from 5% to 10% of the valuation limit (that is, the lower of the property value and the purchase price) for buyers with one or more outstanding housing loans, who are obtaining a second or subsequent housing loan. On 14 January 2011, the Government further lowered the LTV Limit for that group of buyers from 70% to 60%. As mentioned at the outset, between the time of its launch in December 2007 and 10 March 2011, only 42 of 124 units of the Marina Collection were sold and some were leased out by Lippo prior to these sales.

The cooling measures did not end there. From 8 December 2011, an Additional Buyer’s Stamp Duty (“ABSD”) was introduced for certain purchases. This coincided with the time that Ms Woo and Mr Goh formulated a plan to award certain rebates to purchasers referred to Lippo by Mr Goh.

The plan to grant Furniture Rebates

In or around December 2011, Mr Goh raised “the difficulties faced in getting buyers for the Marina Collection” which arose “because of the payment” [emphasis added] of the 4% Exercise Fee and Completion Fee in addition to the ABSD payable by the purchasers. Ms Woo attested to the same. Mr Goh explained to her that his Indonesian clients had “difficulties in bringing out the monies” for the 4% Exercise Fee and Completion Fee. According to Ms Woo, Mr Goh asked if Lippo would be “willing” to allow the purchasers to use the FR to “offset” against the initial amounts they would otherwise be required to pay (ie, the 4% Exercise Fee and Completion Fee) and “pay the remainder” of the FR to the purchaser upon completion, which Lippo acceded to.

Under such market conditions, Ms Woo and Mr Goh agreed to the following “Furniture Rebate Plan” (“FRP”): the purchaser received an in-principle sum amounting to the FR from Lippo – which itself did not exist tangibly but only notionally, since they were not disbursed from any pool of funds maintained by Lippo (GD at [54]) – prior to issuing the OTP; despite such in-principle agreement, Lippo issued an OTP to each purchaser stating a purchase price that did not reflect the FR; the purchaser would provide Lippo with cheques for the 4% Exercise Fee and the Completion Fee based on the SPP (GD at [8(a)]); Lippo, however, would not encash any of these cheques (GD at [8(b)]); upon UOB’s approval of a purchaser’s housing loan application for the purchase of his unit, Lippo would document the FR by way of letter, which was used to set-off against the 4%...

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