Case Summaries

Lim Zhipeng v Seow Suat Thin and another matter [2020] SGCA 89


8 September 2020

Case summary

Civil Appeal No 11 of 2020 and Summons No 56 of 2020
Lim Zhipeng v Seow Suat Thin and another matter [2020] SGCA 89


Decision of the Court of Appeal (delivered by Justice Judith Prakash):

Outcome: Court of Appeal holds that a document titled a “Deed of Guarantee” is not enforceable as a deed, as the sealing requirement is not satisfied. Nonetheless, the creditor’s claim against the guarantor is allowed as consideration was adequately pleaded and furnished by the creditor.


1 The Appellant creditor (“the Appellant”), Lim Zhipeng, made a substantial loan of about $500,000 to the debtor, Cheong Wee Ker Derek (“the Debtor”). As a result of his financial difficulties, the Debtor was unable to make the scheduled repayments on the loan. From April 2017, the Appellant began frequently pressing the Debtor for repayment.

2 In May 2017, the Debtor was made a bankrupt by an institutional creditor.

3 After he was made a bankrupt, and while he was seeking to annul the bankruptcy order made against him, the Debtor sought the help of his mother, Seow Suat Thin (“the Respondent”), to act as the guarantor for the sums which he owed to the Appellant. The Debtor explained that he would continue to repay the loan, and that the Respondent would only be required to pay the loan on his behalf if he defaulted on his payment. The Respondent agreed to give the guarantee.

4 Subsequently, the Appellant, Debtor and Respondent met. At this meeting the Respondent confirmed that she was agreeable to guaranteeing the Debtor’s loan, and that she would make the repayments from the sale proceeds of her properties, which were in the course of being sold. In September 2017, the Appellant and Respondent signed a document titled the “Deed of Guarantee” (“the Guarantee”).

5 The Guarantee was signed by the Respondent before a lawyer, who read the document and translated it into Mandarin for her. The lawyer also explained that if the Debtor defaulted on the payment of the loan, she would have to pay the Appellant from the sale proceeds of her properties. After witnessing the Respondent’s signature next to the attestation clause “sign, sealed and delivered”, the lawyer appended his signature as a witness, and wrote that he had “only explained this document to [the Respondent] – not acting as her lawyer”.

6 Under the Guarantee, the Respondent agreed to guarantee the remaining $490,000 that was due by the Debtor to the Appellant, and to pay the debt in tranches, according to the expected dates by which her properties would be sold.

7 After the Guarantee was signed, the Debtor informed the Respondent that he was unable to cope with the payments, and he asked for her help. On 21 November 2017, the Respondent paid the Appellant $40,000 out of the sale proceeds of one of her properties. She did not make any further payments thereafter.

8 In view of her default, the Appellant filed the present action, claiming the outstanding sum under the Guarantee. He also lodged a proof of debt against the Debtor, who remained a bankrupt.

Procedural history

9 The assistant registrar granted summary judgment in the sum of $438,500, which was the amount outstanding under the Guarantee, to the Appellant. The summary judgment was set aside by the Judge, and the matter duly went to trial.

10 After the trial, the Judge dismissed the Appellant’s claim in its entirety, while also allowing the Respondent’s counterclaim for the return of the $40,000 that she had paid to the Appellant. In the Judge’s view, the Guarantee was not enforceable as a deed as it had not been sealed. Hence, consideration had to be given for the Guarantee to be enforceable. However, consideration was neither adequately pleaded nor provided.

11 The Appellant appealed against the entirety of the Judge’s decision.

Decision of the Court of Appeal

The sealing requirement

12 The court held that notwithstanding the perceived outdatedness of the sealing requirement, save to the extent that it had been removed by statute (eg, s 41B of the Companies Act (Cap 50, 2006 Rev Ed)), it remained a necessary requirement at common law that had to be fulfilled before a document could be enforced as a deed: at [37].

13 The sealing requirement could be satisfied notwithstanding the lack of a physical seal if the document was executed with the clear intention of delivering it as the deed of the party executing it. Whether the executing party had such an intention was dependent on the entire circumstances of each case: at [29]–[33] and [37]–[38].

14 In the present case, there was no physical manifestation of a seal on the Guarantee. Nonetheless, it expressly identified itself as a deed, and the execution portions of the document provided for it to be “signed, sealed and delivered” by the parties executing it. The Respondent had also visited a lawyer prior to executing the document. However, there was no evidence, apart from the Respondent’s desire to assist the Debtor by granting a guarantee in favour of the Appellant, that the Respondent intended to execute a deed. From the state of the evidence, it would be extending the legal fiction too far to hold that the Guarantee had been sealed. As the sealing requirement was not satisfied, the Guarantee was not enforceable as a deed: at [40]–[44].


15 Contrary to the Judge’s decision, it would not have been appropriate for the Appellant to pre-empt the issue of consideration and to raise it in his statement of claim, particularly as his claim was premised on a “deed of guarantee”, for which consideration was not required. Once the issue of consideration was raised in the Respondent’s defence, the Appellant appropriately traversed the issue in his reply, and provided further details in his defence to counterclaim. These formed part of his pleadings, and consideration was thereby adequately pleaded: at [54].

16 Consideration was adequately furnished by the Appellant. After signing the Guarantee, he kept to the end of his bargain with the Respondent by forbearing to take any action against the Debtor with respect to the debt. Such forbearance, even for a short time, amounted to good consideration, and it was irrelevant that the Appellant did not precisely identify whether his forbearance entailed a forbearance to sue or a forbearance to file a proof of debt, as both forms of forbearance sufficed as good consideration: at [56]–[60] and [68]–[69].

Whether there were grounds on which the Respondent could avoid liability

17 The enforcement of the Guarantee was not against public policy. A creditor like the Appellant could enforce the full amount of his debt as against a bankrupt (via the proof of debt process) and/or against any party who had furnished security. By enforcing any third party security with respect to the bankrupt’s debt, the creditor did not contravene the policy underpinning the pari passu principle since the third party security never formed part of the bankrupt’s estate, and did not constitute an asset that would be divisible amongst the bankrupt’s creditors. The only restriction on the Appellant’s right to enforce the Guarantee was that his claim against the bankrupt Debtor had to be reduced by any sum recovered under the Guarantee: at [71]–[73].

18 The Guarantee was also not vitiated by unilateral mistake, as the Respondent was not mistaken as to her obligations under the Guarantee, which required her to serve as a guarantor for the Debtor, and to pay the debt in accordance with the repayment scheme set out in the Guarantee: at [75].

The counterclaim for $40,000

19 The Respondent’s counterclaim for the return of the $40,000, which was premised on unjust enrichment, was dismissed as a fundamental basis for the Respondent’s voluntary payment was to offset the Debtor’s debt, and $40,000 was indeed offset from the Debtor’s outstanding debt, such that the basis for payment did not fail: at [78].

20 For all the reasons above, judgment was entered for the Appellant against the Respondent in the sum of $438,500: at [80].



This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.