United Overseas Bank Limited v Lippo Marina Collection Pte. Ltd. and others

United Overseas Bank Ltd (UOB) brought Suit No 1250 of 2014 over housing loans it made to purchasers of 38 units in the Marina Collection condominium, developed by Lippo Marina Collection Pte Ltd (Lippo). The second and third defendants were property agents. As found in the liability proceedings, Lippo granted purchasers referred by the agents substantial furniture rebates that were not reflected in the stated purchase prices, so UOB lent on inflated prices and in breach of MAS Notice 632, which allowed banks to lend up to 80% of the purchase price. All 38 purchasers defaulted. At first instance only the deceit claims against the agents succeeded, but the Appellate Division in [2022] SGHC(A) 38 held that unlawful means conspiracy was made out against all three defendants.

The matter returned to the High Court for assessment of damages. UOB claimed $92,030,416 on the footing that it would have made no loans at all but for the conspiracy, or alternatively $76,852,959.01 on the footing that it would still have lent on the actual purchase prices. Lippo argued for the second basis, disputed the credit spread and interest claims, and said UOB failed to mitigate by not repossessing and selling the units within a reasonable time. UOB had rented out the units and only relaunched sales in May 2023. UOB has appealed the assessment.

1. Whether damages should be assessed on the basis that UOB would have made no loans, or would have lent 80% of the actual purchase prices.
2. Whether the credit spread, cost of funds and investigation costs were recoverable, and whether repayments and rental income must be deducted.
3. Whether UOB failed to mitigate its loss by not selling the units.
4. Whether statutory interest is payable on the gross loss or only on the net damages, and for what period.

On the basis of loss, the tortious measure puts the claimant where it would have been without the wrong. UOB's witnesses said it would not have granted these specific loans, which was not the same as saying it would have lent nothing on the true prices. Its checks calibrated loan amounts, its appraisers said the rebates would have been deducted, and its strategy then targeted such buyers. The Appellate Division had found the conspiracy caused UOB to lend more than it otherwise would. The parties agreed UOB would have lent the 80% maximum. The loan to one purchaser who later restructured and kept paying stayed in the calculation.

On the other heads, the credit spread was profit forgone on lending to others, not contractual expectation or loss of a chance, and did not double count the cost of funds. Investigation costs flowed from the tort, save a small unsubstantiated item. Repayments and rental income reduced UOB's exposure and had to be deducted.

On mitigation, Lippo bore the burden. Waiting during a soft market with seller's stamp duty in force was reasonable, but from 2017, when the market turned, UOB's witness accepted there were no discussions about selling and it was simply awaiting the litigation. Waiting for the outcome of a suit is not a reasonable reason to do nothing.

On interest, relying on People's Park Development, Creative Technology and Blue Circle, the court held that interest under s 12 of the Civil Law Act 1909 or the Supreme Court of Judicature Act 1969 attaches only to sums for which judgment is given, after deductions; anything else would be a windfall. Interest as damages was neither pleaded nor proved, the usual rate applied, and interest ran only until the failure to mitigate began.

The High Court allowed UOB's claim in part, awarding $17,738,446.53: excess loans of S$50,796,175.20, cost of funds of S$720,535.02, credit spread of S$967,093.50 and investigation costs of S$180,053.24, less repayments and rental income of $37,224,996.91, plus statutory interest of $2,299,586.48 at 5.33% on the net sum from 26 November 2014 to 11 September 2017. No deduction was made for the market value of the units, and costs were also awarded.