Tong Guan Teck v DBS Bank: Guarantee, Summary Judgment, and Duty of Care
In Tong Guan Teck v DBS Bank Ltd, the Singapore High Court heard appeals regarding a summary judgment application by DBS against Mr. Tong, who had guaranteed a loan to Marine Accomm Pte Ltd (MAPL). Mr. Tong argued that DBS owed him a duty to ensure a corporate guarantee from Viking replaced his personal guarantee after he sold his shares in MAPL. The High Court dismissed both Mr. Tong's appeal against conditional leave to defend and DBS's appeal for summary judgment, finding that there was a triable issue regarding whether DBS's actions created an estoppel, preventing them from enforcing the guarantee against Mr. Tong. The court granted Mr. Tong conditional leave to defend the claim and counterclaim.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Both appeals were dismissed with costs in the cause.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court addresses whether DBS Bank owed a duty to Tong Guan Teck regarding a guarantee and considers summary judgment.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Tong Guan Teck | Plaintiff, Appellant | Individual | Appeal Dismissed | Lost | Chua Beng Chye, Stephanie Tan |
| DBS Bank Ltd | Defendant, Respondent | Corporation | Appeal Dismissed | Lost | Christopher Anand s/o Daniel, Harjean Kaur |
| UOB Bank | Defendant | Corporation | Neutral | Neutral | |
| Viking Offshore and Marine Limited | Defendant | Corporation | Neutral | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Quentin Loh | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Chua Beng Chye | Rajah & Tann LLP |
| Stephanie Tan | Rajah & Tann LLP |
| Christopher Anand s/o Daniel | Advocatus Law LLP |
| Harjean Kaur | Advocatus Law LLP |
4. Facts
- DBS extended banking facilities to Marine Accomm Pte Ltd (MAPL).
- Mr. Tong and Mr. Tan guaranteed repayment by MAPL of sums due to DBS.
- MAPL defaulted on its payment obligations to DBS.
- Mr. Tong sold his shares in MAPL to Viking.
- Mr. Tong claimed DBS owed him a duty to ensure Viking executed a corporate guarantee.
- DBS sought summary judgment against Mr. Tong under the guarantee.
- Mr. Tong filed a counterclaim against DBS.
5. Formal Citations
- Tong Guan Teck v DBS Bank Ltd and others, Suit No 406 of 2011, [2012] SGHC 72
6. Timeline
| Date | Event |
|---|---|
| Guarantee signed by Mr. Tong and Mr. Tan in favor of DBS. | |
| Deed of Confirmation signed. | |
| Sale and Purchase Agreement effecting transfer of shares signed. | |
| Memorandum of Disclosure executed. | |
| Meeting with DBS regarding the guarantee. | |
| DBS issued a letter agreeing to a conditional discharge of the Guarantee. | |
| DBS issued a letter of demand to Mr. Tong and Mr. Tan. | |
| Judgment in default of appearance was entered against MAPL. | |
| Judgment in default of appearance was entered against Mr Tan. | |
| Summons 3764 taken out by DBS applying for summary judgment against Mr Tong. | |
| Appeals dismissed with costs in the cause. |
7. Legal Issues
- Breach of Guarantee
- Outcome: The court found that there was a triable issue as to whether the guarantee had been discharged.
- Category: Substantive
- Sub-Issues:
- Discharge of guarantee
- Enforcement of guarantee
- Duty of Care
- Outcome: The court found that DBS may have taken positive steps such that the law imposes on the creditor a duty to act reasonably in taking these positive steps as the interests of the surety might be affected.
- Category: Substantive
- Sub-Issues:
- Bank's duty to guarantor
- Positive steps affecting surety's interests
- Summary Judgment
- Outcome: The court dismissed DBS's appeal for summary judgment, finding that there was a triable issue.
- Category: Procedural
- Sub-Issues:
- Triable issue
- Conditional leave to defend
- Estoppel
- Outcome: The court found that there was a triable issue as to whether DBS's actions created an estoppel, preventing them from enforcing the guarantee against Mr. Tong.
- Category: Substantive
8. Remedies Sought
- Summary Judgment
- Striking out of counterclaim
- Conditional leave to defend
- Unconditional leave to defend
9. Cause of Actions
- Breach of Guarantee
- Estoppel
10. Practice Areas
- Commercial Litigation
- Banking Litigation
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Gabriel Peter & Partners v Wee Chong Jin | N/A | Yes | [1998] 1 SLR 374 | Singapore | Cited for the principle that a cause of action must be certain to fail for an appeal to succeed and that the power of striking out should only be invoked in plain and obvious cases. |
| Hubbuck & Sons v Wilkinson, Heywood and Clark | N/A | Yes | [1899] 1 QB 86 | N/A | Cited for the view that the power of striking out should only be invoked in plain and obvious cases. |
| Goh Koon Suan v Heng Gek Kiau & Ors | N/A | Yes | [1990] SLR 1251 | Singapore | Cited for the principle that a party claiming their right to have their day in court must be acting bona fide. |
13. Applicable Rules
| Rule Name |
|---|
| O 14 r 1 of the Rules of Court |
| O 18 r 19 of the Rules of Court |
| O 18 r 19(a) of the Rules of Court |
| O 18 r 19(b) of the Rules of Court |
| O 18 r 19(c) of the Rules of Court |
| O 18 r 19(d) of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Guarantee
- Summary judgment
- Duty of care
- Estoppel
- Conditional leave to defend
- Corporate guarantee
- Banking facilities
- Disclosure Memorandum
15.2 Keywords
- Guarantee
- Summary Judgment
- Duty of Care
- Estoppel
- Banking Facilities
16. Subjects
- Banking
- Guarantees
- Civil Procedure
17. Areas of Law
- Banking Law
- Contract Law
- Civil Procedure
- Guarantees
- Estoppel