10 四月 2018
United Overseas Bank ("the Bank") granted two housing loans to Mr Pereira and his wife. The Bank also extended loan facilities to Mr Pereira’s company (the "Company"), which were secured by personal guarantees given by Mr Pereira to the Bank.
As security for both the guarantees and housing loans, Mr Pereira mortgaged two properties to the Bank. One of the properties was Mr Pereira’s family home, while the other was an apartment.
Owing to defaults in repayment of the housing loans and the loan facilities, the Bank commenced a mortgage action against Mr Pereira as guarantor, and obtained orders for vacant possession of the two properties. The Bank took possession of the apartment, but Mr Pereira applied for a stay of execution of the order to take possession of the family home on the basis that the Company would be able to repay its debt to the Bank because of potential offers to acquire the Company’s shares and assets.
The lower courts dismissed Mr Pereira’s application. On appeal, Mr Pereira sought an open-ended stay of execution so as to allow the sale of the Company’s assets to be completed.
The Court of Appeal dismissed Mr Pereira’s appeal for the following reasons:
This case illustrates that the Singapore courts place a high premium on preserving the commercial value of a guarantee. They will not rewrite the terms of the parties’ contract to prevent the creditor from enforcing its rights indefinitely. In addition, the creditor is not obliged to wait for the principal debtor to discharge its obligations before commencing an action on the guarantee.
Pereira, Dennis John Sunny v United Overseas Bank Ltd  SGCA 62