Hong Leong Singapore Finance Ltd v United Overseas Bank Ltd: Proprietary Estoppel & Land Titles Act

In Hong Leong Singapore Finance Ltd v United Overseas Bank Ltd, the High Court of Singapore addressed a proprietary estoppel claim by Yongnam Engineering & Construction Pte Ltd (YEC) against United Overseas Bank Ltd (UOB). YEC, a contractor for the Springleaf Tower project, claimed entitlement to a unit in the development after UOB, the mortgagee, foreclosed on the property. YEC argued that it continued work on the project based on the bank's representation that it would receive the unit. The court found that UOB had encouraged YEC to continue work with the expectation of receiving the unit, but only to the extent of a partial set-off arrangement. The court ordered UOB to transfer its interest in the unit to YEC upon payment of the difference between the unit's value and the value of YEC's work.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment in favor of Yongnam Engineering & Construction Pte Ltd; bank ordered to transfer interest in unit upon payment of specified amount.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Proprietary estoppel case involving a contractor's claim to a unit in Springleaf Tower after the bank foreclosed on the mortgage.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Hong Leong Singapore Finance LtdPlaintiffCorporationPartialPartialT P B Menon, Tan Soo Kiang, Daniel Tan
United Overseas Bank LtdDefendantCorporationPartial LossPartialThio Shen Yi, Karen Teo, Angela Thiang
Yongnam Development Pte LtdPlaintiffCorporationPartial WinPartialHarish Kumar, Adrian Tan
Yongnam Engineering & Construction Pte LtdPlaintiffCorporationPartial WinPartialHarish Kumar, Adrian Tan

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
T P B MenonWee Swee Teow & Co
Tan Soo KiangWee Swee Teow & Co
Daniel TanWee Swee Teow & Co
Harish KumarEngelin Teh Practice LLC
Adrian TanEngelin Teh Practice LLC
Thio Shen YiTSMP Law Corporation
Karen TeoTSMP Law Corporation
Angela ThiangTSMP Law Corporation

4. Facts

  1. YEC was a contractor for the Springleaf Tower project.
  2. STL was the developer of Springleaf Tower.
  3. UOB was the mortgagee of Springleaf Tower.
  4. YEC claimed entitlement to a unit in Springleaf Tower after UOB foreclosed on the mortgage.
  5. YEC alleged it continued work based on UOB's representation that it would receive the unit.
  6. There was no concluded contract between YEC and UOB.
  7. YEC lodged caveats against the Unit.

5. Formal Citations

  1. Hong Leong Singapore Finance Ltd v United Overseas Bank Ltd, OS 10/2003, 20/2003, [2006] SGHC 205

6. Timeline

DateEvent
Structural steelwork contract entered into between Tuan Kai and YEC.
YEC started work under sub-contracts.
YEC threatened to stop work if payment was not made.
YEC issued an ultimatum to stop work unless arrangements were made to assure regular payments.
YEC, Tuan Kai, and STL entered into a settlement agreement.
Controller of Housing gave consent for the standard form contract to be amended.
Standard form sale contract executed between STL, Liang Court and YDP.
Supplemental sale and purchase agreement executed between STL, Liang Court and YDP.
YEC completed works.
STL confirmed to YDP that it had received the full purchase price for the Unit.
STL's solicitors requested the discharge and release of the mortgage over the Unit.
YDP brought an action against STL and Liang Court for breach of the sales contracts.
Bank filed Originating Summons against STL seeking an order of foreclosure.
Order of foreclosure made foreclosing STL’s share in the land.
High Court dismissed YDP’s claim against Liang Court.
YDP’s appeal was dismissed by the Court of Appeal.
Judgment reserved.

7. Legal Issues

  1. Proprietary Estoppel
    • Outcome: The court found that the elements of proprietary estoppel were partially satisfied, leading to a partial remedy for the plaintiff.
    • Category: Substantive
    • Sub-Issues:
      • Representation
      • Reliance
      • Detriment
      • Unconscionability
    • Related Cases:
      • [1976] Ch 179
      • (1866) LR 1 HL 129
      • [1982] QB 133
  2. Foreclosure
    • Outcome: The court held that the foreclosure order was liable to be set aside at least in so far as the interests of YDP and Hong Leong are concerned.
    • Category: Substantive

8. Remedies Sought

  1. Order that the Unit be released and discharged from the mortgage registered by the bank.

9. Cause of Actions

  • Proprietary Estoppel

10. Practice Areas

  • Commercial Litigation
  • Construction Law
  • Banking Law

11. Industries

  • Finance
  • Construction
  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Yongnam Development Pte Ltd v Springleaves Tower LtdHigh CourtYes[2004] 1 SLR 348SingaporeCited as a previous action related to the same factual matrix.
Yongnam Development Pte Ltd v Somerset Development Pte LtdCourt of AppealYes[2004] SGCA 35SingaporeCited as a previous action related to the same factual matrix.
Yongnam Engineering & Constructions (Pte) Ltd v Yeo Wee KiongHigh CourtYes[2006] SGHC 62SingaporeCited as a previous action related to the same factual matrix.
Browne v DunnN/AYes(1893) 6 R 67N/ACited for the rule of fairness in cross-examination.
Chan Emily v Kang Hock Chai JoachimN/AYes[2005] 2 SLR 236SingaporeCited for the application of the rule in Browne v Dunn in modern litigation.
Lo Sook Ling Adela v Au Mei Yin ChristinaCourt of AppealYes[2002] 1 SLR 408SingaporeCited for the application of the rule in Browne v Dunn.
Ong Jane Rebecca v Lim Lie HoaCourt of AppealYes[2005] SGCA 4SingaporeCited for the application of the rule in Browne v Dunn.
Crabb v Arun DCN/AYes[1976] Ch 179N/ACited for the basis of proprietary estoppel and the interposition of equity.
Ramsden v DysonHouse of LordsYes(1866) LR 1 HL 129United KingdomCited for the principle of proprietary estoppel arising from expectation created or encouraged by the landlord.
Willmott v BarberN/AYes(1880) 15 Ch D 96N/ACited for the five probanda that had to be found in order to raise an estoppel.
Taylor Fashions Ltd v Liverpool Victoria Trustees Co LtdN/AYes[1982] QB 133N/ACited for the broader approach to proprietary estoppel, focusing on unconscionability.
In re Basham, decdN/AYes[1986] 1 WLR 1498N/ACited in support of the approach taken by Oliver J in Taylor Fashions.
Wayling v JonesN/AYes(1993) 69 P & CR 170N/ACited in support of the approach taken by Oliver J in Taylor Fashions.
Gillett v HoltN/AYes[2001] Ch 210N/ACited in support of the approach taken by Oliver J in Taylor Fashions.
Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank LtdN/AYes[1982] QB 84N/ACited in support of the approach taken by Oliver J in Taylor Fashions.
Habib Bank Ltd v Habib Bank Zurich AGN/AYes[1981] 1 WLR 1265N/ACited in support of the approach taken by Oliver J in Taylor Fashions.
Walton Stores (Interstate) Ltd v MaherHigh Court of AustraliaYes(1988) 164 CLR 387AustraliaCited in support of the approach taken by Oliver J in Taylor Fashions.
Lemon Grass Pte Ltd v Peranakan Place Complex Pte LtdHigh CourtYes[2002] 4 SLR 439SingaporeCited as a case where Taylor Fashions was followed in Singapore courts.
Lim Ah Mee v Summerview Developments Pte LtdHigh CourtYes[1998] SGHC 87SingaporeCited as a case where Taylor Fashions was referred to in Singapore courts.
Bank of China v Yong Tze Enterprise (Pte) LtdHigh CourtYes[2005] 2 SLR 761SingaporeCited as a case where Gillett v Holt was followed in Singapore courts.
Goh Swee Fang v Tiah Juah KimCourt of AppealYes[1994] 3 SLR 881SingaporeCited as a case that did not cite Willmott.
Tan Bee Giok v Loh Kum YongCourt of AppealYes[1997] 1 SLR 153SingaporeCited as a case that did not cite Willmott.
LS Investment Pte Ltd v Majlis Ugama Islam SingapuraHigh CourtYes[1998] 3 SLR 754SingaporeCited as a case where Willmott was cited, but the analysis was not conducted on the basis of the five probanda.
Keppel TatLee Bank Ltd v Teck Koon Investment Pte LtdHigh CourtYes[2000] 2 SLR 366SingaporeCited as a case that cited Taylor Fashions in support of the proposition that there will not be an estoppel by acquiescence unless the party estopped is aware of his own rights and of the innocent party’s mistaken belief.
Orion Finance Limited v J D Williams & Company LimitedEnglish Court of AppealYes[1997] EWCA Civ 1England and WalesCited for the principle that there must be some contact between the representor and the representee in order to give rise to an estoppel.
United Overseas Bank Ltd v Bank of ChinaCourt of AppealYes[2006] 1 SLR 57SingaporeCited for the principle that a representation may be found even if it is not made directly by the representor to the representee.
Fook Gee Finance Co Ltd v Liu Cho ChitCourt of AppealYes[1998] 2 SLR 121SingaporeCited for the principle that conduct, including silence, can give rise to an implied representation.
Greenwood v Martins Bank, LimitedHouse of LordsYes[1933] AC 51United KingdomCited for the principle that a duty to speak may arise even in the absence of a fiduciary relationship or a contract uberrimae fides.
ER Ives Investment Ltd v HighN/AYes[1967] 2 QB 379N/ACited for the principle that the element of knowledge is satisfied as long as it can be shown that the party sought to be estopped was aware that the innocent party was doing that which the former is said to have acquiesced in.
Cobbe v Yeoman’s Row Management LtdEnglish Court of AppealYes[2006] 1 WLR 2964England and WalesRecent English decision on proprietary estoppel.
Blue Haven Enterprises Ltd v TullyPrivy CouncilYes[2006] UKPC 17N/ARecent Privy Council decision on proprietary estoppel.
Dering v Earl of WinchelseaN/AYes[1775–1802] All ER Rep 140N/ACited for the principle that the undesirable behaviour in question must involve more than general depravity.
Moody v CoxN/AYes[1917] 2 Ch 71N/ACited for the principle that in order to prevent a man coming for relief in connection with a transaction so tainted it must be shown that the taint has a necessary and essential relation to the contract which is sued upon.
Greasley v CookeN/AYes[1980] 3 All ER 710N/ACited for the principle that where it may be inferred from the circumstances that the party seeking to raise the estoppel had acted upon the representation then the burden of proof shifted to the other party to show that there was no reliance in fact.
Jennings v RiceEnglish Court of AppealYes[2003] 1 P & CR 100England and WalesCited for the principle that once the elements of proprietary estoppel are established an equity arises and the value of that equity will depend upon all the circumstances including the expectation and the detriment.
Commonwealth of Australia v VerwayenAustralian High CourtYes(1990) 170 CLR 394AustraliaCited for the principle that there must be a proportionality between the remedy and the detriment which is its purpose to avoid.
Lim Teng Huan v Ang Swee ChuanN/AYes[1992] 1 WLR 113N/ACited as an example of giving effect to the common expectation.
Khew Ah Bah v Hong Ah MyeN/AYes[1969-1971] SLR 494SingaporeCited as an example of awarding monetary relief.
Giumelli v GiumelliHigh Court of AustraliaYes(1999) 196 CLR 101AustraliaCited as an example of awarding monetary relief.
Sledmore v DalbyN/AYes(1996) 72 P & CR 196N/ACited as an example of finding that the equity had been satisfied by enjoyment and was therefore exhausted.
Bestland Development Pte Ltd v UdomkunnatumN/AYes[1997] 2 SLR 42SingaporeCited for the principle that Yongnam had an equitable interest in the property qua a purchaser that had paid at least a portion of the price.
Chee Pok Choy v Scotch Leasing Sdn BhdN/AYes[2001] 4 MLJ 346N/ACited for the principle that the interests should have been disclosed to the court in those proceedings as they should have been.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Land Titles Act (Cap 157, 2004 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Proprietary Estoppel
  • Foreclosure
  • Mortgage
  • Settlement Agreement
  • Paramount Mortgage
  • Compensatory Credit
  • Set-off
  • Unconscionability

15.2 Keywords

  • Proprietary Estoppel
  • Foreclosure
  • Mortgage
  • Construction
  • Singapore
  • Land Titles Act

16. Subjects

  • Equity
  • Land Law
  • Banking
  • Construction

17. Areas of Law

  • Equity
  • Proprietary Estoppel
  • Land Law
  • Mortgages