Wardley Ltd v Tengku Aishah and Others

• Jurisdiction: Singapore
• Judge: Karthigesu J
• Judgment Date: 28 February 1991
• Neutral Citation: [1991] SGHC 34
• Docket Number: Suit No 1730 of 1989
• Date: 28 February 1991
• Published date: 19 September 2003
• Year: 1991
• Plaintiff Counsel: Steven Ang (Godwin & Co)
• Citation: [1991] SGHC 34
• Defendant Counsel: Fong Kwok Jen and R Chandra ( Haridass Ho & Partners)
• Court: High Court (Singapore)
• Subject Matter: Applicability of O 42 r 12 of the Rules of the Supreme Court 1970,Damages,Whether plaintiffs entitled to such interest at contractual rate,Civil Procedure,Whether court was precluded from making such award,Interest,O 42 r 12 Rules of the Supreme Court 1970,Interest after judgment

The plaintiffs` claim in this action is for the principal and interest due to them from the defendants under a loan agreement dated 30 July 1984 (hereinafter referred to as the loan agreement); miscellaneous out-of-pocket expenses; interest on the amounts due under the loan agreement from 12 September 1989 to the date of actual payment (as well after as before judgment) at the rate of 41/2% above the rate as determined by the plaintiffs for a deposit of an amount comparable to the said amounts offered to the plaintiffs on the Singapore Interbank Market for such period as the plaintiffs may from time to time select; and costs on a solicitor and client basis.

The loan agreement, commonly referred to as a multi-currency loan agreement, facilitates the drawdown of the loan stated in one currency in another currency of the borrowers` choice, in this case, Eurocurrency, that is to say Swiss Francs, United States dollars or any other currency, deposits of which are for the time being generally available to the plaintiffs in the Singapore Interbank Market, and it further facilitates the borrowers to change the currency in which the loan was drawn down, the currency of account, to another Eurocurrency of the borrowers` choice between the interest periods stated in the loan agreement.

The plaintiffs, having applied for summary judgment under O 14 of the Rules of the Supreme Court 1970 (RSC), were given leave to enter final judgment by the senior assistant registrar on 28 March 1990 and judgment was duly entered on 31 March 1990 for Swiss francs 1,744,878.22 (being as to principal of SwF 1,287,617.78 and interest of SwF 457,260.44 both as at 28 March 1990); the sum of S$2,971.96 being the miscellaneous expenses claimed; and costs of the action to be taxed on a solicitor and client basis. The plaintiffs failed in their application for interest at the rate claimed. The award of interest at 8% pa on the judgment from the date of the judgment until payment, they would have got without an order to that effect. See O 42 r 12 of the RSC.

The defendants appealed against the senior assistant registrar`s order granting the plaintiffs` judgment and the plaintiffs cross-appealed, seeking a variation to his order that the plaintiffs be awarded interest on the judgment sum (excluding costs) at the contractual rate stipulated in the loan agreement.

On the hearing of the appeal, the defendants confined their arguments to just one ground, namely, the interpretation of cl 5 of the loan agreement which reads as follows:

(5) .1 Subject to the provisions of this agreement, the amount of the loan at the end of the drawing period shall be repaid by four instalments, with one instalment being paid on each of the repayment dates.

(5) .2 Each of the first three instalments under cl 5.1 will be in the currency in which the loan is denominated during the interest period ending on the relevant repayment date and of such amount as will reduce the equivalent amount in Australian dollars of the loan on the repayment date (assuming no conversion to another Eurocurrency on that date) according to the following schedule:

Instalment A$ equivalent amount immediately

number following instalment repayment

One 1,110,000

Two 1,060,000

Three 1,010,000

(less in each case the A$ amount of all prepayment made prior to, or to be made on, the relevant repayment date)

The last repayment instalment will be of the whole of the loan then outstanding.

The other principle provisions of the loan agreement which need to be considered in arriving at the true meaning of cl 5 are cll 2.1, 3.2 and the meanings given to the words and expressions used in these clauses by cl 1.1. Clause 2.1 reads as follows:

The initial maximum principal amount of the facility is the equivalent determined as provided in this agreement of A$1,160,000 (one million one hundred and sixty thousand Australian dollars).

Clause 3.2 reads as follows:

The drawing will, subject to the provisions of this agreement, be advanced in the Eurocurrency specified in the drawing notice, and will be in the amount in the relevant Eurocurrency, as determined by the bank (plaintiffs), required to purchase A$1,160,000 on the date of drawing. The drawing will be applied in or towards the purchase of Australian dollars for value the anticipated date of completion specified in the drawing notice, or such earlier date after receipt of the drawing notice as the bank (plaintiffs) may select, and pending completion of purchase of the Part I properties, may be held by the bank (plaintiffs) at such bank, in such name and account, and on such terms as to interest and otherwise, as the bank (plaintiffs) thinks fit, and shall be applied at completion in or towards payment of the purchase price of the Part I properties.

The Part I properties are 17 units in Fremantle Malls, Willam Street, Fremantle, Western Australia (Fremantle Malls).

The relevant words and expressions used in cll 2.1, 3.2 and 5 are given the following meanings ascribed to them by cl 1.1:

Completion Completion of the purchase of the properties listed in Part I of the Schedule, in each case by the person there named as purchaser thereof.

Drawing The amount of the drawing in the relevant Eurocurrency made or to be made following the delivery of drawing notice under cl 3.1.

Drawing A notice of drawing substantially in the form set out in the appendix

notice hereto duly completed and signed on behalf of the borrowers (defendants).

Equivalent The amount in one currency converted from the relevant amount in

amount another currency at the spot buying rate for the purchase of the first currency with the second currency at or about 11am Singapore time on the second business day prior to the date as to which such equivalent amount is to be determined for the purposes of this agreement.

Facility The loan facility, the terms and conditions of which are set out in this agreement.

Interest The last day of an interest period.

payment date

Interest The period determined in accordance with cl 4.1, the first interest

period period commencing on the date of drawing in the relevant Eurocurrency pursuant to cl 3.2 and each subsequent interest period commencing on the expiry of the previous one, but so that:

...

(c) the last interest period commencing prior to a repayment date shall be of such duration as expires on that date.

Loan The aggregate principal amount advanced under the facility and for the time being outstanding.

Repayment The third, fourth, fifth and sixth anniversaries of the date of drawing,

Date or if any such day is not a business day, the next business day thereafter unless falling in another month of the year, in which case the preceding business day.

Even from the limited reference I have made to the loan agreement, its underlying purpose and scheme is clear. The purpose is to finance the defendants in their purchase of Fremantle Malls. The scheme is to provide them a loan of such an amount of a Eurocurrency specified by the defendants, as the plaintiffs shall determine will be required, to purchase A$1.16m which will enable them to complete the purchase of Fremantle Malls. This is abundantly clear simply by reading cl 3.2 alone. It is also more than clear that the loan is not for A$1.16m but for the `amount of the Eurocurrency which will be required to purchase A$1.16m at or near the date of completion of the defendants` purchase of Fremantle Malls`.

The Eurocurrency selected by the defendants was Swiss francs. It is agreed that the drawing in Swiss francs was made by the defendants on 3 August 1984 and that SwF 2,389,136 was required to purchase A$1.16m.

Clause 3.4 of the loan agreement enabled the defendants to take advantage of the weakening of the...