First Industry Corp v Goh

This case involved the parties in a dispute over a loan agreement and the provision of security over shares in a company. The plaintiff, First Industry Corp, had previously obtained a summary judgment against the first defendant, Bean San Goh, for the recovery of a loan amount and interest. The dispute now focused on the interpretation of a clause in the loan agreement, which provided for the arrangement of security over shares in Sanford Ltd. The cross-claimant, First Industry Corp, sought a declaration that the first defendant should provide security over the shares and that the funds held in a joint account be retained until the security was provided. The cross-defendant, Bean San Goh, argued that the clause was void for uncertainty and did not create an equitable mortgage over the shares.

The court examined the clause in question, which stated that the borrower would arrange for the loan to be secured by shares in Sanford Ltd registered in the borrower's name or in the name of Healthy Skin Pte Ltd. The court found that the clause, while not well drafted, was clear in its intention to require the borrower to provide security over the shares held by Healthy Skin if called upon to do so. The court also held that the clause created an equitable charge over the shares held by Healthy Skin, which arose when the cross-claimant made a demand for security.

Given the agreement reached between the parties to liquidate the shares and hold the proceeds in a joint account, the court found that the cross-claimant was entitled to the funds held in the joint account. The court entered judgment for the cross-claimant and directed the parties to discuss the form of orders and costs.