SINGAPORE – The Court of Appeal has upheld an order for a house, owned by now-bankrupt former Singapore Swimming Club (SSC) president Freddie Koh and his wife, to be sold to pay off his debts of about $3.2 million.

However, in the light of the “extraordinary circumstances” presented by the Covid-19 pandemic and the “advanced age” of the couple, who are in their 70s, the court granted Madam Ooi Chhooi Ngoh a one-year period to sell the house.

The two-storey semi-detached house in Neram Road, which is in Seletar, has been estimated over the past years to be worth between $5.7 million and $7.8 million.

This is the first known case in which a court application is made on behalf of a bankrupt to order the sale of a co-owned property, as opposed to one made by a non-bankrupt fellow owner.

Mr Koh owes $1.8 million to the club and $1.4 million to mortgagee DBS, but he and Madam Ooi have refused to sell their house following his bankruptcy in 2016.

Last year, private trustees appointed to sell and distribute Mr Koh’s assets to his creditors filed an application in the High Court for the sale of the house.

In written grounds of decision last week, the Court of Appeal said there was no difference between an application made by a co-owner and an application made by the Official Assignee or private trustees in bankruptcy.

The Supreme Court of Judicature Act gives the court a general power to order a sale of property where it is “necessary or expedient” to do so, said Judge of Appeal Andrew Phang, who delivered the decision of the three-judge court.

Mr Koh’s debt to the SSC arose from a dispute that started in 2009 when he was sued for defamation by four members of a previous management committee.

Club money was used to defend the lawsuit until 2012, when members voted to remove him and to recover the legal costs.

The club won a court battle in 2016 to get back the funds. Mr Koh was made a bankrupt by the SSC later that year.

Madam Ooi resisted the application filed by the private trustees to sell the house.

She argued that she held a sentimental attachment to the house, where she has lived for more than 42 years, and that it was also home to her second son and his family.

She also argued that it was not possible to find an “equivalent property in the same area”.

Her arguments were rejected last year by the High Court, which ordered the house to be sold.

High Court judge Chan Seng Onn said the prejudice to Madam Ooi and her family was outweighed by the financial prejudice to unsecured creditor SSC, which has waited more than three years to reclaim its debt.

He noted that the couple would be left with “more than sufficient” funds to purchase alternative accommodation after selling the house and paying off Mr Koh’s creditors.

However, if the house was not sold, the club would never be able to recover the debt.

The Court of Appeal said the High Court judge had correctly carried out a balancing exercise of the various interests at play in determining whether a sale should be ordered.

The apex court noted that Mr Koh and Madam Ooi were given several options to discharge his debt, including getting one of his children to buy over his half share of the property, but none of these suggestions were taken up.

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