Goh Chin Soon v Vickers Capital: Mortgagee's Duty of Care & Bankruptcy

In Goh Chin Soon and Another v Vickers Capital Ltd, the Singapore High Court dismissed an appeal by Goh Chin Soon and Goh Teck Beng against the decision to refuse their application to set aside statutory demands issued by Vickers Capital Ltd. The statutory demands related to an outstanding debt following a judgment against the plaintiffs and another party. The plaintiffs argued negligence on the part of the defendants in selling a mortgaged property. The court found no genuine triable issue to justify setting aside the statutory demands.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal dismissed.

1.3 Case Type

Bankruptcy

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case regarding a mortgagee's duty of care in selling a property and setting aside statutory demands in bankruptcy.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Goh Chin SoonPlaintiff, AppellantIndividualAppeal dismissedLost
Goh Teck BengPlaintiff, AppellantIndividualAppeal dismissedLost
Vickers Capital Ltd (fka St. Capital Ltd)Defendant, RespondentCorporationAppeal dismissedWon

3. Judges

Judge NameTitleDelivered Judgment
MPH RubinJudgeYes

4. Counsels

Counsel NameOrganization
Ramesh AppooNetto & Netto
Anthony NettoNetto & Netto
Kenneth Tan SCAng Tan & Chang
Julian ChangAng Tan & Chang

4. Facts

  1. Vickers Capital Ltd extended a S$25m loan facility to Micasa Development Pte Ltd.
  2. The loan was secured by a mortgage on Micasa's property and guaranteed by Goh Chin Soon and Goh Teck Beng.
  3. Micasa defaulted on the loan, leading Vickers Capital to institute proceedings.
  4. Judgment was entered against Micasa, Goh Chin Soon, and Goh Teck Beng for S$25,973,917.84 plus interest.
  5. Vickers Capital obtained vacant possession of the property after Micasa failed to deliver it.
  6. Vickers Capital advertised the property for sale by tender, receiving only one offer of S$24.5m.
  7. Vickers Capital accepted the S$24.5m offer and completed the sale.
  8. Statutory demands were issued to Goh Chin Soon and Goh Teck Beng for the outstanding debt of S$6,919,544.68.

5. Formal Citations

  1. Goh Chin Soon and Another v Vickers Capital Ltd (fka St. Capital Ltd), OS 111/2000, [2000] SGHC 281

6. Timeline

DateEvent
Proceedings instituted against Micasa and the plaintiffs in Suit 1333/98
Judgment entered against the plaintiffs and one other party
Tender exercise conducted through Jones Lang Wooton
Defendants commenced OS 1268/99 for delivery of vacant possession of the property
Court ordered delivery of vacant possession of the property with a stay until 6 October 1999
Extension of the stay until 4 December 1999 was granted
Writ of possession was taken out by the defendants
Vacant possession of the property was delivered to the defendants by the bailiff
Advertisement inserted in The Straits Times
Advertisement inserted in The Straits Times
Defendants obtained a desktop valuation from FPD Savills
Closing date of the tender
Sale of the property was completed
Statutory demands issued to each of the plaintiffs
Statutory demands served on the plaintiffs
Plaintiffs applied to the court to set aside the statutory demands
Report from Henry Butcher Appraisal Group Pte Ltd
Plaintiffs' application was dismissed by the deputy registrar
Plaintiffs commenced a fresh set of proceedings against the defendants
Appeal dismissed
Further arguments heard
Appeal remained dismissed with costs

7. Legal Issues

  1. Duty of Care Owed by Mortgagee to Mortgagor and Guarantors
    • Outcome: The court found that the mortgagee had not breached its duty of care in selling the property.
    • Category: Substantive
    • Sub-Issues:
      • Duty to obtain best possible price
      • Breach of duty of care
    • Related Cases:
      • [1971] Ch 949
      • [1983] 3 All ER 54
      • [1982] 3 All ER 938
  2. Setting Aside Statutory Demand
    • Outcome: The court held that there were no grounds for setting aside the statutory demand.
    • Category: Procedural
    • Sub-Issues:
      • Valid counterclaim
      • Cross-demand

8. Remedies Sought

  1. Setting aside statutory demands

9. Cause of Actions

  • Negligence

10. Practice Areas

  • Commercial Litigation
  • Bankruptcy Law

11. Industries

  • Real Estate
  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Cuckmere Brick Co Ltd v Mutual Finance LtdEnglish Court of AppealYes[1971] Ch 949England and WalesCited for the principle that a mortgagee owes a duty to take reasonable care to obtain the true market value of the mortgaged property.
Tse Kwang Lam v Wong Chit SenPrivy CouncilYes[1983] 3 All ER 54United KingdomCited for the principle that mortgagees must take reasonable steps to obtain the true market value and that sale by auction itself does not prove that the true market value has been obtained.
Standard Chartered Bank v WalkerN/AYes[1982] 3 All ER 938N/ACited for the principle that a mortgagee owes a duty not only to himself but also to the mortgagor and guarantors.
Tse Kwang Lam v Wong Chit SenPrivy CouncilYes[1983] 1 WLR 1349United KingdomCited for the principle that mortgagees must take reasonable steps to obtain the true market value and that sale by auction itself does not prove that the true market value has been obtained.
Standard Chartered Bank v WalkerN/AYes[1982] 1 WLR 1410N/ACited for the principle that a mortgagee owes a duty not only to himself but also to the mortgagor and guarantors.
AIB Finance Ltd v DebtorsCourt of AppealYes[1998] 2 All ER 929England and WalesCited regarding the cross-claim and whether it equals or exceeds the amount of the statutory demand.
TSB Bank plc v PlattsEnglish Court of AppealYes[1998] 2 BCLC 1England and WalesCited regarding the evaluation of the maximum amount the debtor could recover under the cross-claim.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Bankruptcy ActSingapore
Bankruptcy Rules r 98(2)(a)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Mortgagee's power of sale
  • Duty of care
  • Statutory demand
  • Cross-claim
  • Mortgagee sale
  • Best possible price
  • Guarantors
  • Mortgagors

15.2 Keywords

  • mortgagee
  • mortgagor
  • bankruptcy
  • statutory demand
  • duty of care
  • negligence
  • property sale

17. Areas of Law

Area NameRelevance Score
Insolvency Law85
Mortgages80
Bankruptcy75
Mortgagee's power of sale75
Debtor and Creditor70
Statutory Demand70
Guarantee65
Duty of Care60
Property Law60
Contract Law50

16. Subjects

  • Mortgages
  • Bankruptcy
  • Duty of Care