Primepulse Consultancy Pte. Ltd. v Chan Pau Tee and another

Primepulse Consultancy Pte. Ltd. (the applicant), an excluded moneylender offering short-term loans, brought Originating Applications Nos 1134 and 1136 of 2024 in the General Division of the High Court to keep in place caveats it had lodged over two adjoining condominium units combined into one home. The units were held by Chan Pau Tee (Mr Chan) and Serene Quek Shuet Ling (Ms Quek) as joint tenants.

Most facts were disputed. According to the respondents, Mr Chan paid for the units, and Ms Quek fell victim to a scam in which a so-called financial advisor used her SingPass credentials to take out loans in her name. To repay those debts she borrowed through a company she incorporated, QD Hair&Nail Beauty (SA) Trading Pte Ltd, first from another lender and then, on 18 September 2024, under a $120,000.00 facility agreement with the applicant, with Ms Quek and a friend as guarantors. Ms Quek alleged she signed without a proper explanation and that the loan was really to her personally. The applicant said the loan was plainly for the company. Under the facility agreement Ms Quek consented to the sale of the property and to caveats, and by a deed of assignment she assigned her interest in the sale proceeds as security. The applicant lodged caveats on 25 September 2024. Mr Chan said he never consented. The respondents applied to cancel the caveats, and the applicant applied under s 127(4) of the Land Titles Act 1993 to maintain them. The applicant also sued Ms Quek, her friend and the company in Originating Claim No 904 of 2024.

1. Whether the applicant showed that the caveats were not lodged vexatiously, frivolously or not in good faith.
2. Whether an interest in the proceeds of sale of land under s 115(3)(a) of the Land Titles Act 1993 is a caveatable interest, including a mere contractual one.
3. Whether the court should decide if the moneylending transaction was a sham.

The court accepted the test in Nimisha Pandey v Divya Bothra [2023] 5 SLR 1254: on an application under s 127(4), a caveator need only give satisfactory evidence that the caveat was not lodged with improper motive or is not utterly groundless. The lower threshold was justified because a caveat lapses automatically after 30 days, which strongly favours the caveatee. Even so, the applicant failed it. Only Ms Quek signed the documents, yet the assignment described her as the only registered proprietor and purported to assign the whole property, and it covered only one of the two units although both caveats relied on it. The facility agreement acknowledged her as one of the joint owners but had her alone consent to sale. Both caveats named Mr Chan and Ms Quek as registered proprietors without limiting the claim to her interest, unlike the carefully drawn caveat in an Australian case the applicant relied on. Applying Alrich Development Pte Ltd v Rafiq Jumabhoy [1993] 1 SLR(R) 598 and Ong Chay Tong & Sons (Pte) Ltd v Ong Hoo Eng [2009] 1 SLR(R) 305, caveats that are positively misleading and prejudice others cannot stand. A lender relying on caveats as an industry safeguard should take more care with its documents.

On s 115(3)(a), the court reviewed conflicting authorities, including Salbiah bte Adnan v Micro Credit Pte Ltd [2015] 1 SLR 601, which in obiter doubted that a bare contractual right to be paid from sale proceeds is caveatable. It considered the plain words cover any interest in proceeds of sale other than the stated exceptions, and parliamentary statements when the Housing and Development Act was amended in 2010 suggested such caveats were then permitted. But the court did not need to settle the point: the assignment, which secured only the outstanding debt, was an equitable charge giving a proprietary interest that was caveatable even on the narrower view.

As to the sham argument, the court had only three brief affidavits and the same issue was raised in the separate claim, so it left the question to be decided there with full evidence, avoiding res judicata.

The court dismissed both applications because the caveats were positively misleading and prejudiced Mr Chan, and ordered the applicant to pay the respondents costs of S$20,000, including disbursements, for both applications. It held that the assignment gave a caveatable interest but that this point was moot, and it declined to decide the sham issue.