OCBC v Lim Sor Choo: Mortgage, Guarantee, and Contractual Interpretation
In Oversea-Chinese Banking Corporation Limited v Lim Sor Choo, the High Court of Singapore addressed an appeal concerning the interpretation of a mortgage agreement. Oversea-Chinese Banking Corporation Limited (OCBC) sought to hold Lim Sor Choo jointly liable for a US$131,512,173.91 judgment debt arising from her husband's guarantee of loans to two companies. The court, presided over by Judicial Commissioner Dedar Singh Gill, dismissed the appeal, finding that the 'all moneys' clause in the mortgage agreement extended to cover the husband's guarantee, making Lim Sor Choo jointly liable for the debt.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court addressed whether a mortgage agreement extended to cover a husband's guarantee debt. The court found the wife jointly liable under the 'all moneys' clause.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Oversea-Chinese Banking Corporation Limited | Plaintiff | Corporation | Appeal Dismissed | Won | Tan Kai Yun, Lorraine Koh Xin Yu, Rajan Menon Smitha |
| Lim Sor Choo | Defendant | Individual | Appeal Dismissed | Lost | Yogarajah Yoga Sharmini, Kannan s/o Balakrishnan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Dedar Singh Gill | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Tan Kai Yun | WongPartnership LLP |
| Lorraine Koh Xin Yu | WongPartnership LLP |
| Rajan Menon Smitha | WongPartnership LLP |
| Yogarajah Yoga Sharmini | Haridass Ho & Partners |
| Kannan s/o Balakrishnan | Haridass Ho & Partners |
4. Facts
- The plaintiff, Oversea-Chinese Banking Corporation Limited, granted a loan facility of S$2.7m to the defendant and her husband.
- The loan facility was secured by a mortgage over a property owned by the defendant and her husband.
- The mortgage was subject to the terms set out in the Bank’s Memorandum of Mortgage and Annex 1.
- Annex 1 contained an 'all moneys' clause (cl 1.1) making the mortgagors liable for all sums owing to the Bank.
- The defendant's husband furnished a guarantee in favour of the Bank's Hong Kong branch for sums owed by Coastal Oil (HK) Limited and Coastal Oil Singapore Pte Ltd.
- The Bank obtained a default judgment against the defendant’s husband for US$131,512,173.91 plus interests and costs due to the guarantee.
- The Bank sought to hold the defendant jointly liable for the judgment debt based on the 'all moneys' clause in the mortgage.
5. Formal Citations
- Oversea-Chinese Banking Corp Ltd v Lim Sor Choo, Suit No 586 of 2019(Registrar’s Appeal No 8 of 2020), [2020] SGHC 116
6. Timeline
| Date | Event |
|---|---|
| Offer letter issued for loan facility | |
| Offer letter accepted | |
| Mortgage executed | |
| Mortgage registered | |
| Husband furnished a guarantee | |
| Letter of offer for banking facilities issued to Coastal Oil (HK) Limited and Coastal Oil Singapore Pte Ltd | |
| Coastal Oil Singapore Pte Ltd placed under provisional liquidation | |
| Bank demanded full payment from husband | |
| Coastal Oil Singapore Pte Ltd appointed liquidators | |
| Suit commenced against husband | |
| Default judgment obtained against husband | |
| Notice of default issued to Borrowers | |
| Action commenced against defendant | |
| Decision delivered by Asst Registrar | |
| Hearing date | |
| Judgment date |
7. Legal Issues
- Interpretation of 'All Moneys' Clause
- Outcome: The court held that the 'all moneys' clause in the mortgage agreement was broad enough to include the judgment debt arising from the husband's guarantee.
- Category: Substantive
- Sub-Issues:
- Scope of liabilities covered by the clause
- Whether the clause extends to guarantee obligations
- Joint and several liability
- Contractual Interpretation
- Outcome: The court emphasized the importance of the plain language of the contract and rejected a purely purposive and contextual interpretation that would override the clear wording.
- Category: Substantive
- Sub-Issues:
- Purposive interpretation
- Contextual interpretation
- Plain meaning rule
8. Remedies Sought
- Monetary Damages
- Declaration of Liability
- Enforcement of Security
9. Cause of Actions
- Breach of Contract
- Enforcement of Mortgage
- Enforcement of Guarantee
10. Practice Areas
- Banking Litigation
- Commercial Litigation
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Durham v BAI (Run Off) Ltd (in scheme of arrangement) | Not specified | Yes | [2012] ICR 574 | England and Wales | Cited for the principle that linked contracts should be construed consistently with one another. |
| Arnold v Britton | Not specified | Yes | [2015] 2 WLR 1593 | United Kingdom | Cited to emphasize the importance of the language of the provision being construed. |
| Lloyds TSB v Shorney | English Court of Appeal | Yes | [2002] 1 FLR 81 | England and Wales | Cited to argue against an expansive interpretation of an 'all moneys' clause. |
| AIB Group (UK) Ltd v Martin and another | House of Lords | Yes | [2002] 1 WLR 94 | United Kingdom | Cited for the possibility of interpreting an 'all moneys' clause to avoid imposing secondary liability as surety in addition to primary liability as principal debtor and affirmed a broad construction of 'all moneys' clauses. |
| Estoril Investments Pty Ltd v Westpac Banking Corporation | Not specified | Yes | (1993) 6 BPR 13146 | Australia | Cited to argue that 'all moneys' clauses should be construed to exclude liabilities of a character fundamentally different from those contemplated by the agreement. |
| Perpetual Trustee Company Ltd v Mariam Mohamad Moussa | Not specified | Yes | [2013] NSWSC 131 | Australia | Cited for the principle that an 'all moneys' clause does not extend to include liability in restitution. |
| In the Matter of John Peter Piccolo, Dean Royston McVeigh v National Australia Bank Limited | Not specified | Yes | [2000] FCA 187 | Australia | Cited for the principle that an 'all moneys' clause would not extend to secure tortious liability. |
| Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd (formerly known as Soup Restaurant (Causeway Point) Pte Ltd) | Court of Appeal | Yes | [2015] 5 SLR 1187 | Singapore | Cited for the principle that where the plain and unambiguous meaning of the text leads to an absurd result, the court will have to undertake careful analysis of the text and context to ascertain whether the text is indeed plain and unambiguous. |
| Yap Son On v Ding Pei Zhen | Not specified | Yes | [2017] 1 SLR 219 | Singapore | Cited for the principle that the text of the parties’ agreement is of first importance in ascertaining the parties’ objective intentions. |
| Lucky Realty Co Pte Ltd v HSBC Trustee (Singapore) Ltd | Not specified | Yes | [2016] 1 SLR 1069 | Singapore | Cited for the principle that the court must give effect to what a document, which the parties have contractually agreed to be bound by, expressly and specifically states. |
| Re Tararone Investments Pte Ltd | Court of Appeal | Yes | [2001] 3 SLR(R) 61 | Singapore | Cited for affirming a broad construction of 'all moneys' clauses. |
| Al Sanea v Saad Investments Co Ltd (in liquidation) | Not specified | Yes | [2012] EWCA Civ 313 | England and Wales | Cited for the principle that if the language is unambiguous, the Court must apply it. |
| Bank of India v Trans Continental Commodity Merchants Ltd | Not specified | Yes | [1983] 2 Lloyd’s Rep 298 | England and Wales | Cited in Re Tararone as an English case where the charging provisions specified 'on any account whatsoever' or 'any other account'. |
| Re Rudd & Son Ltd | Not specified | Yes | [1986] 2 BCC 98, 955 | England and Wales | Cited in Re Tararone as an English case where the charging provisions specified 'on any account whatsoever' or 'any other account'. |
| Standard Chartered Bank (Hong Kong) Ltd v Pak Kwan Ho | Not specified | Yes | [2018] HKEC 580 | Hong Kong | Cited with approval for the principle that a co-mortgagor is jointly and severally liable to the lender for all his indebtedness as well as that of his co-mortgagor under an 'all monies' mortgage. |
13. Applicable Rules
| Rule Name |
|---|
| O 14 r 12 of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- All Moneys Clause
- Mortgage
- Guarantee
- Joint and Several Liability
- Contractual Interpretation
- Facility Documents
- Judgment Debt
- Borrowers
- Mortgagor
- Mortgagee
15.2 Keywords
- mortgage
- guarantee
- all moneys clause
- contractual interpretation
- banking
- singapore
16. Subjects
- Banking
- Contract Law
- Mortgages
- Civil Procedure
17. Areas of Law
- Contract Law
- Banking Law
- Mortgages
- Contractual Interpretation