Wardley Ltd v Tengku Aishah and Others

JurisdictionSingapore
Judgment Date31 December 1992
Date31 December 1992
Docket NumberCivil Appeals Nos 55 of 1991 and 64 of 1991,Motion in Civil Appeals Nos 55 and 64 of 1991
CourtCourt of Appeal (Singapore)
Tengku Aishah and others
Plaintiff
and
Wardley Ltd
Defendant

[1992] SGCA 83

F A Chua J

,

Lai Kew Chai J

and

SRajendran J

Civil Appeals Nos 55 of 1991 and 64 of 1991

Court of Appeal

Banking–Lending and security–Interest–Loan agreement providing for post-judgment interest at contractual rate–Whether borrowers entitled to post-judgment interest at contractual rate–Whether borrowers seeking post-judgment interest confined to interest rate stipulated in Rules of Court–Order 42 r 12 Rules of the Supreme Court 1970, ss 18 (2) (g), 18 (3) and 80 (2) (j) Supreme Court of Judicature Act (Cap 322, 1985 Rev Ed)–Banking–Lending and security–Multi-currency loan agreement–Agreement providing that loan to be for amount of Eurocurrency to purchase specified amount of Australian dollars–Draw down made in Swiss francs–Whether currency of repayment in Swiss francs or Australian dollars.

The guarantors had guaranteed the borrowers' liability to the respondent under a multi-currency loan facility. The loan was for an amount of Eurocurrency, specified by the borrowers required to purchase A$1.16m which would enable the borrowers to complete the purchase of certain Australian properties. The loan was to be repaid in four instalments, with interest payable periodically. In the event of default, interest was payable “from the time of default up to the time of actual payment (as well as before judgment) at the rate of 4.5% above the deposit rate (“the contractual rate”).

The borrowers later made a draw down on the loan facility in Swiss francs pursuant to the loan facility.

The borrowers subsequently defaulted on the loan, and the respondent obtained judgment at first instance against both the guarantors and borrowers (collectively referred to as “the appellants”) for the sum outstanding under the loan agreement and miscellaneous expenses. However, the respondent was denied interest at the contractual rate after judgment.

This was reversed by the High Court which awarded the respondent interest at the contractual rate after judgment.

The appellants appealed. Three issues arose for determination: (a) the currency in which the appellants were liable to make repayment; (b) whether a letter dated 25 June 1984 (“the letter”) was admissible as an aid to the construction of the loan facility agreement; and (c) whether the respondents was entitled to post-judgment interest at the contractual rate.

Held, dismissing the appeals with costs:

(1) The appellants were liable to make repayment in Swiss francs. On a construction of the agreement, the loan was for SFr2,389,136 and not for A$1.16m. The reference to Australian dollars arose only because the loan that was required was such amount of the selected Eurocurrency as would purchase A$1.16m. Since the borrowing was in Swiss francs, repayment would on the principle of nominalism, also be in Swiss francs whatever the currency fluctuations of the Swiss franc vis-à-vis any other currency would be: at [9], [10]and [14].

(2) There was no ambiguity in the repayment provisions of the agreement and there was therefore no justification to look at any of the pre-contract documents such as the letter: at [17].

(3) It was clear from the words of the agreement that the contractual interest provided for therein was intended to be an independent contract. It was not merely incidental or ancillary to the covenant to repay the principal sum together with interest thereon. The respondent was not invoking the power of the court in accordance with the Rules of Court for the order in respect of the post-judgment interest that they sought. It was seeking an order for post-judgment interest in accordance with its contractual right to interest as contained in the agreement. On the facts, the covenant to pay interest had been an independent covenant, such that the liability to pay interest was not merged in the judgment. The respondent was thus entitled to post-judgment interest at the contractual rate: at [25], [33] and [37].

Economic Life Assurance Society v Usborne [1902] AC 147 (refd)

Fewings, Ex parte (1884) 25 Ch D 338 (refd)

Malaysia Building Society Bhd v Lim Kheng Kim [1988] 3 MLJ 175 (folld)

Sim Lim Finance Ltd v Pelandok Enterprises Pte Ltd [1981-1982] SLR (R) 98; [1980-1981] SLR 527 (distd)

Supreme Finance (M) Bhd v Koo Sin Ken [1987] 1 MLJ 296 (distd)

United Overseas Bank Ltd v Sin Leong Ironbed & Furniture Manufacturing Co (Pte) Ltd [1988] 1 SLR (R) 76; [1988] SLR 247 (folld)

Interpretation Act (Cap 1, 1985Rev Ed)s 19 (c)

Rules of the Supreme Court1970, TheO 42r 12 (consd);O 59r 31 (4)

Supreme Court of Judicature Act (Cap 322, 1985 Rev Ed)ss 18 (2) (g), 18 (3), 80 (2) (j) (consd);First Schedulepara 7

Courts of Judicature Act1964 (No 7 of 1964) (M'sia)ss 16 (i),25 (2), Schedpara 7

Judgments Act 1838 (c 110) (UK)s 17

Rules of the High Court1980 (M'sia)O 42r 12

Randhir Ram Chandra (Haridass Ho & Partners) for the appellants

Loh Boon Huat and Ignatius Ho (Godwin & Co) for the respondent.

S Rajendran J

(delivering the judgment of the court):

1 The appellants in Civil Appeal No 55 of 1991 (“the borrowers”) had on 30 July 1984 entered into a loan agreement (“the agreement”) with the respondents. The purpose of the agreement was to finance the borrowers in their purchase of certain properties in Australia. The scheme would provide the borrowers with a loan of such an amount of a Eurocurrency, to be specified by the borrowers, as the respondents determine would be required to purchase A$1.16m which would enable the borrowers to complete the purchase of the Australian properties. The Eurocurrency specified by the borrowers was Swiss francs. The drawing in Swiss francs was made by the borrowers on 3 August 1984 and SFr2,389,136 was determined to be required to purchase A$1.16m. The repayment clause in the agreement provided for the loan to be repaid in four instalments. The first three instalments were to be “in the currency of the loan” of the equivalent amount of A$50,000 each. The last instalment was for the whole of the loan then outstanding. Interest was payable periodically and in case of default interest was payable “from the time of default up to the time of actual payment (as well after as before judgment), at the rate per annum of … 4 % above deposit rate” (“the contractual interest/contractual rate”).

2 The appellants in Civil Appeal No 64 of 1991 (the “guarantors”) were parties to the agreement as guarantors of the loan therein. The liabilities of the guarantors for the repayment of the loan were co-extensive with those of the borrowers.

3 On 13 September 1989, the respondents commenced an action vide Suit No 1730 of 1989 against the borrowers to recover, inter alia: (a) the sum of SFr1,628,755.10 (which included the sum of SFr341,137.32 being interest calculated up to 11 September 1989); (b) miscellaneous out-of-pocket expenses quantified at S$2,971.26; and (c) interest on (a) above from 12 September 1989 to the date of actual payment (as well after as before judgment) at the rate per annum which is 4 % above the rate determined by the respondents for a deposit of an amount comparable to the said sum offered to the respondents in the Singapore inter-bank market for the period as the respondents had from time to time selected. A similar action was commenced against the guarantors vide Suit No 1779 of 1989 on 22 September 1989.

4 On 28 March 1990, the respondents' application for summary judgment against the borrowers was heard before the senior assistant registrar. Leave was given to enter final judgment for SFr1,744,878.22 (being as to principal of SFr1,287,617.78 and interest of SFr457,260.44 both as at 28 March 1990); and the sum of S$2,971.96 being the miscellaneous expenses claimed. The respondents, however, were denied interest at the contractual rate after judgment and were awarded interest at the rate of 8% per annum on the judgment from the date of the judgment until payment. On 2 August 1990, the respondents' application for summary judgment against the guarantors was heard. Leave was given to the respondents to enter final judgment on the same terms as those against the borrowers.

5 The borrowers and the guarantors (“the appellants”) appealed against these orders save for the claim for miscellaneous expenses quantified at S$2,971.96. The respondents appealed against the orders on post-judgment interest. Karthigesu J dismissed the borrowers' appeal and allowed the respondents' appeal (see Wardley Ltd v Tengku Aishah [1991] 1 SLR (R) 390). G P Selvam JC, who heard the guarantors' appeal, dismissed the appeal and also allowed the respondents' appeal (see Wardley Ltd v Tunku Adnan [1991] 1 SLR (R) 661). Against the decisions of Karthigesu J and G P Selvam JC the borrowers and the guarantors appealed. The issues raised in the two appeals were identical and we therefore heard the two appeals together. The issues raised were:

(a) whether the appellants were liable to repay A$1.16m or its equivalent in Swiss francs as at the date of repayment or whether the appellants were liable to repay SFr2,389,136;

(b) whether a letter dated 25 June 1984 was admissible as an aid to the construction of the agreement; and

(c) whether the respondents were entitled to post-judgment interest at the contractual rate.

Was the repayment to be in Australian dollars or Swiss francs?

6 Clause 3.2 of the agreement provided that the drawing would be advanced in the Eurocurrency specified by the appellants in the drawing notice and would be in the amount in the relevant Eurocurrency, as determined by the respondents, required to purchase A$1.16m on the date of drawing. Clause 3.4 gave the borrowers the option, prior to the commencement of the second or any subsequent interest period, for the loan to be converted into a Eurocurrency other than the Eurocurrency in which it was denominated during the immediately preceding...

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