United Overseas Bank v Homely Bath Services: Mortgagee's Rights vs. Tenant's Rights in Property Possession
In United Overseas Bank Limited v Homely Bath Services & Trading Pte Ltd and Skillmax Precision Technologies (S) Pte Ltd, the High Court of Singapore addressed a dispute over property possession. United Overseas Bank (UOB), the plaintiff, sought possession of a mortgaged property after Homely Bath Services & Trading Pte Ltd, the landlord, defaulted on loan repayments. Skillmax Precision Technologies (S) Pte Ltd, the tenant, contested the action, citing prior tenancy agreements. The court ruled in favor of UOB, finding that UOB was not bound by the third tenancy agreement and was entitled to possession of the property.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for the Plaintiff.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
UOB seeks possession of mortgaged property; tenant Skillmax contests, citing prior tenancy agreements. Court examines mortgagee's rights versus tenant's occupancy.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| United Overseas Bank Limited | Plaintiff | Corporation | Judgment for Plaintiff | Won | Ushan Premaratne, Kenneth Yap |
| Homely Bath Services & Trading Pte Ltd | Defendant | Corporation | Lost | Lost | |
| Skillmax Precision Technologies (S) Pte Ltd | Defendant | Corporation | Claim Dismissed | Lost | Suja Susan Thomas |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Elton Tan Xue Yang | Assistant Registrar | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ushan Premaratne | KhattarWong LLP |
| Kenneth Yap | KhattarWong LLP |
| Suja Susan Thomas | Ignatius J & Associates |
4. Facts
- UOB sought possession of a property mortgaged by Homely Bath Services.
- Skillmax Precision Technologies, the tenant, contested the action based on tenancy agreements.
- The 2nd TA predated the mortgage, containing an option to renew.
- The 3rd TA post-dated the mortgage and allowed possession until March 31, 2020.
- UOB was provided a copy of the 2nd TA at the time of the refinancing request.
- UOB claims it was unaware of the 3rd TA and did not consent to it.
- A winding-up order was issued against the Landlord on 8 September 2017.
5. Formal Citations
- United Overseas Bank Ltd v Homely Bath Services & Trading Pte Ltd and another, Originating Summons No 251 of 2018, [2019] SGHCR 03
6. Timeline
| Date | Event |
|---|---|
| 1st Tenancy Agreement signed between Landlord and Tenant. | |
| 1st Tenancy Agreement commenced. | |
| 2nd Tenancy Agreement signed between Landlord and Tenant. | |
| 2nd Tenancy Agreement commenced. | |
| UOB issued the Landlord with a letter of offer. | |
| Landlord accepted offer of banking facilities from UOB. | |
| UOB and Landlord executed a mortgage in respect of the Unit. | |
| 3rd Tenancy Agreement signed between Landlord and Tenant. | |
| 3rd Tenancy Agreement commenced. | |
| Winding up order issued against the Landlord. | |
| UOB issued a letter of demand to the Landlord. | |
| UOB served notice on the Landlord to deliver vacant possession of the mortgaged units. | |
| UOB filed Originating Summons No 251 of 2018. | |
| First hearing, Tenant expressed intention to contest the Action. | |
| Tenant's application to intervene allowed. | |
| Court ordered discovery of documents. | |
| Substantive hearing of the Tenant’s challenge took place. | |
| Judgment reserved. |
7. Legal Issues
- Mortgagee's Right to Possession
- Outcome: The court upheld the mortgagee's right to possession, finding that the mortgagee was not bound by the subsequent tenancy agreement.
- Category: Substantive
- Sub-Issues:
- Enforcement of Mortgage Terms
- Priority of Mortgage over Subsequent Leases
- Tenant's Rights
- Outcome: The court ruled that the tenant's rights were subordinate to the mortgagee's rights, as the mortgage predated the third tenancy agreement and the mortgagee had not consented to it.
- Category: Substantive
- Sub-Issues:
- Overriding Interest
- Consent to Tenancy
- Renewal of Tenancy
- Consent and Authorisation
- Outcome: The court found that the mortgagee had not expressly or impliedly consented to the third tenancy agreement, and that the requirement of written consent had not been met.
- Category: Substantive
- Sub-Issues:
- Implied Consent
- Written Consent Requirement
- Acquiescence
8. Remedies Sought
- Delivery of Vacant Possession
- Repayment of Sums Owed
9. Cause of Actions
- Action for Possession
- Enforcement of Mortgage Agreement
10. Practice Areas
- Real Estate Law
- Banking Law
- Commercial Litigation
11. Industries
- Banking
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Singapore Finance Ltd and another v Matterhorn (Pte) Ltd and others | High Court | Yes | [1989] 2 SLR(R) 105 | Singapore | Cited regarding the inference of consent or acquiescence based on positive steps taken by the mortgagee. |
| Hong Leong Finance Ltd v Tan Gin Huay and another | N/A | Yes | [1999] 1 SLR(R) 755 | Singapore | Cited for the principle that the court has no jurisdiction to refuse an order for possession where a mortgagee is entitled to possession, except for a short adjournment. |
| Pereira, Dennis John Sunny v United Overseas Bank Ltd | Court of Appeal | Yes | [2018] 1 SLR 31 | Singapore | Cited for confirming that there is no exception to the general principle other than that identified in Hong Leong. |
| Mohamed Said bin Ali v Ka Wah Bank | N/A | Yes | [1989] 1 SLR(R) 689 | Singapore | Cited for the importance of mortgagee plaintiff making due inquiry concerning the occupancy of the mortgaged premises. |
| Standard Chartered Bank v Chip Hong Machinery (S) Pte Ltd and another | N/A | Yes | [1990] 2 SLR(R) 679 | Singapore | Cited for the principle that writs of possession obtained irregularly ought to be set aside almost, if not altogether, as of right. |
| Standard Chartered Bank v Paisley Park (S) Pte Ltd | N/A | Yes | [1994] 1 SLR(R) 26 | Singapore | Cited for the principle that the mortgagee’s right to lease applies only to the extent that the parties have not agreed to the contrary. |
| Woolwich Building Society v Dickman | Court of Appeal | Yes | [1996] 3 All ER 204 | England and Wales | Cited for the principle that if a mortgage is created over premises that are subject to a short term tenancy, the tenant’s rights will override the mortgagee’s, insofar as those rights are inconsistent. |
| Win Supreme Investment (S) Pte Ltd v Joharah bte Abdul Wahab (Sjarikat Bekerjasama Perumahan Kebangsaan Singapura, third party) | N/A | Yes | [1996] 3 SLR(R) 583 | Singapore | Cited for illustrating the rule in s 89(1) of the LTA that a lease granted after a mortgage will not bind the mortgagee. |
| Stroud Building Society v Delamont and others | N/A | Yes | [1960] 1 All ER 749 | England and Wales | Cited for explaining the consequences of a mortgagee consenting to a tenancy. |
| Parker and others v Braithwaite and another | N/A | Yes | [1952] 2 All ER 837 | England and Wales | Cited for the principle that the mere refraining by the building society from taking action to evict the tenant cannot amount to such recognition of the tenancy as to deprive them of their right to recover possession of the property. |
| Taylor v Ellis and another | N/A | Yes | [1960] 2 WLR 509 | England and Wales | Cited for the principle that it is quite wrong to infer merely from the fact that the mortgagee allowed the tenant to remain in possession, having knowledge of the tenancy, that the mortgagee consented to take the tenant as his tenant. |
| Chatsworth Properties Ltd v Effiom | Court of Appeal | Yes | [1971] 1 All ER 604 | England and Wales | Cited for the principle that the mortgagees so conducted themselves that they are precluded from denying that they accepted the defendant as their tenant. |
| Mann v Nijar and another | Court of Appeal | Yes | [1998] All ER (D) 771 | England and Wales | Cited for the principle that knowledge of the tenancy alone was not sufficient to ground a finding that the mortgagee had impliedly consented to the tenancy. |
| Rimmon Watch Pte Ltd v Great Pacific Finance Ltd | Court of Appeal | Yes | [1989] 1 SLR(R) 66 | Singapore | Cited for the principle that the mortgagee's consent was not a blanket consent and could not be construed as such. |
| Bougainvillea Realty Pte Ltd v Siong Hoe International (Pte) Ltd | District Court | Yes | [2004] SGDC 31 | Singapore | Cited for the proposition that when there is no option to renew, and the original parties to the existing lease are in any kind of negotiation to enter into a further lease of the property, intending for the same to be effective at the end of the existing lease, the courts refer to that as a renewal. |
| Re O’Rourke’s Estate | N/A | Yes | (1889) 23 LR Ir 501 | Ireland | Cited for the principle that the creation of a new tenancy between the tenant and the mortgagee cannot be inferred merely because the mortgagee takes no active steps to disavow a tenancy created by the mortgagor. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 83 r 1(1) |
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 83 r 3(4) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Land Titles Act (Cap 157, 2004 Rev Ed) | Singapore |
| Land Titles Act (Cap 157, 2004 Rev Ed) s 46(1) | Singapore |
| Land Titles Act (Cap 157, 2004 Rev Ed) s 46(1)(vi) | Singapore |
| Land Titles Act (Cap 157, 2004 Rev Ed) s 89(1) | Singapore |
| Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) | Singapore |
| Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) s 23(1) | Singapore |
| Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) s 23(11) | Singapore |
| Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) s 29(2) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Mortgagee
- Mortgagor
- Tenancy Agreement
- Vacant Possession
- Option to Renew
- Consent
- Authorisation
- Overriding Interest
- Assignment of Rental Proceeds
- Winding Up Order
15.2 Keywords
- mortgage
- tenancy
- possession
- landlord
- tenant
- UOB
- Skillmax
- Homely Bath Services
- Singapore
- property law
16. Subjects
- Mortgages
- Land Law
- Tenancy
- Property Law
17. Areas of Law
- Credit and Security
- Mortgage of Real Property
- Landlord and Tenant