Chan Lung Kien v Chan Shwe Ching

• Jurisdiction: Singapore
• Judge: Chua Lee Ming J
• Judgment Date: 10 July 2017
• Neutral Citation: [2017] SGHC 136
• Plaintiff Counsel: Chan Wai Kit Darren Dominic and Hirono Eddy (Characterist LLC)
• Docket Number: Originating Summons No 918 of 2016
• Date: 10 July 2017
• Hearing Date: 10 November 2016,13 January 2017,05 June 2017,10 July 2017,01 March 2017
• Subject Matter: Non-registration of instrument of declaration,Land,Setting aside,Interest in land,Severance under the Land Titles Act,Joint tenancy,Modes of severance,Judgments and orders,Enforcement,Ex parte orders,Writs of seizure and sale,Civil procedure
• Published date: 19 May 2018
• Defendant Counsel: Chia Soo Michael and Hany Soh Hui Bin (MSC Law Corporation)
• Court: High Court (Singapore)
• Citation: [2017] SGHC 136
• Year: 2017

Chua Lee Ming J: Introduction

The issue in this case is whether a judgment for the payment of money can be enforced by way of a writ of seizure and sale against the judgment debtor’s interest in immovable property which is held under a joint tenancy with one or more joint tenants. In my judgment, it cannot.

Background

On 10 April 2015, the defendant, Chan Shwe Ching (“CSC”) commenced Suit No 342 of 2015 (“Suit 342/2015”) against one Leong Lai Yee (“the Debtor”). On 10 June 2015, CSC obtained summary judgment against the Debtor in Suit 342/2015 for the sum of $1,430,300 plus interest and costs.

Meanwhile, on 21 May 2015, the plaintiff, Chan Lung Kien (“CLK”) commenced Suit No 494 of 2015 (“Suit 494/2015”) against the Debtor. On 18 June 2015, CLK entered judgment in default of appearance against the Debtor in Suit 494/2015 for the sum of S$8,465,839 plus interest and costs.

The Debtor held an interest in a property known as 9 Jalan Tanah Rata, Singapore (“the Property”) together with her husband, Lim Eng Soon (“Lim”), as joint tenants. On 10 July 2015, CSC obtained an order (“the Order”) for the Debtor’s interest in the Property to be attached and taken in execution under a writ of seizure and sale (“WSS”) to satisfy CSC’s judgment debt in Suit 342/2015.⁰ The High Court’s grounds of decision are reported as Chan Shwe Ching v Leong Lai Yee [2015] 5 SLR 295 (“the GD”).

On 24 July 2015, the WSS obtained by CSC (“CSC’s WSS”) was registered with the Singapore Land Authority (“SLA”) pursuant to s 132 of the Land Titles Act (Cap 157, 2004 Rev Ed) (“LTA”).¹

By way of advertisement in the Straits Times on 4 August 2015, Lim gave notice of his intention to sever the joint tenancy and hold the Property as a tenant in common with the Debtor.²

Subsequently, on 16 September 2015, CLK also obtained a WSS (“CLK’s WSS”) against the Debtor’s interest in the Property.³ CLK’s WSS was registered with the SLA on 12 November 2015.⁴

The mortgagee of the Property, Overseas-Chinese Banking Corporation (“OCBC”), exercised its rights under the mortgage and sold the Property. The option granted by OCBC was exercised by the buyer on 12 February 2016⁵ and the sale was completed on 19 April 2016.⁶ The balance of the sale proceeds amounted to $1,246,683.01.⁷ The Debtor’s half share amounting to $623,341.50 is currently being held by CSC’s solicitors as stakeholders pending the resolution of the present dispute between CLK and CSC.⁸

On 21 April 2016, a bankruptcy order was made against the Debtor.⁹

As the Order was made ex parte, CLK filed the present application to, amongst other things, set aside the Order on the ground that CSC’s WSS was void and/or unenforceable.

Whether CLK has the necessary standing to set aside the Order

CLK was not a party to the proceedings in which the Order was made. O 32 r 6 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”) provides that “[t]he Court may set aside an order made ex parte”. I disagree with CSC’s submission that O 32 r 6 should be read restrictively and that non-parties to an ex parte order may not apply to set aside the order. In my view, it would be unjust to deny a person the right to apply to set aside an ex parte order that affects him, just because he was not a party to the proceedings in which the ex parte order was made. CSC’s narrow interpretation of O 32 r 6 is also not supported by the authorities that I was referred to.

In Karaha Bodas Co LLC v Perusahaan Pertambangan Minyak dan Gas Bumi Negara [2006] 4 SLR(R) 345 (“Karaha Bodas”), the court held that the party who obtained an ex parte order could also apply to set it aside under O 32 r 6. In coming to this decision, Sundaresh Menon JC (as he then was) observed (at [19]) that O 32 r 6 “does not limit the court’s power by reference to the identity of the party seeking to set aside the order”.

In Emjay Enterprises Pte Ltd v Thakral Brothers (Pte) Ltd and others [2000] 2 SLR(R) 729 (“Emjay”), the defendant obtained an ex parte attachment order under the Debtors Act (Cap 73, 1985 Rev Ed) against its debtor, Shah Electronics. The plaintiff obtained judgment against Shah Electronics in separate proceedings and a WSS was issued on the same day that the attachment order was granted to the defendant. The plaintiff subsequently filed an originating summons seeking, among other things, an order setting aside the attachment order. The plaintiff was a stranger to the proceedings in which the attachment order was obtained.

One of the arguments made by the defendant in Emjay was that the plaintiff had no locus standi to take out the application to set aside the ex parte attachment order as the Debtors Act contemplated an application by the debtor only. Tay Yong Kwang JC (as he then was) rejected this argument and held (at [46]) that the plaintiff had locus standi because it was a competing creditor who had a “legitimate interest” to protect. Although Emjay did not concern O 32 r 6, in my view, it demonstrates the court’s general reluctance to deny a third party the right to challenge an ex parte order if its interest has been affected by the order.

Finally, in United Overseas Bank Ltd v Chung Khiaw Bank Ltd [1968-1970] SLR(R) 194 (“Chung Khiaw Bank”), the respondent obtained an ex parte order declaring itself a legal mortgagee over the debtor’s properties. The appellant was not a party to the proceedings in which the ex parte order was obtained. The appellant applied to set aside the ex parte order on the ground that it had obtained and registered an order attaching the debtor’s properties earlier. O LIII r 4(1) of the Rules of the Supreme Court 1934 (“the 1934 Rules”) provided that “[a]ny order made ex parte may be varied or set aside on application, by any person affected by it, to a judge, on such terms as to costs or otherwise as to the judge seem fit” [emphasis added]. As the appellant had acquired a right that ranked in priority to the respondent’s right, the Federal Court held (at [28]–[29]) that the appellant was (a) a person affected by the ex parte order within the meaning of O LIII r 4(1) and (b) entitled ex debito justitiae to set aside the ex parte order.

O LIII r 4(1) of the 1934 Rules is similar to O 32 r 6 except that O LIII r 4(1) was expressly limited to persons affected by the ex parte order. On the face of it, O 32 r 6 is couched in broader language since it does not contain any such express limitation. On that basis, the argument that O 32 r 6 is available to non-parties would be even stronger. However, in my view, an applicant under O 32 r 6 must also show that he is affected by the ex parte order. It cannot be right to allow a stranger who is not affected by the ex parte order to set aside the order. Either way, Chung Khiaw Bank is direct authority against CSC.

CSC tried to distinguish Chung Khiaw Bank on the ground that the appellant was deemed to be an “affected person” under O LIII r 4(1) because it had acquired a right before the ex parte order was made whereas in the present case, CLK’s WSS was issued after CSC’s WSS. In my view, this distinction is inconsequential. The question in Chung Khiaw Bank was whether the applicant was affected by the ex parte order; that is also the question in the present case. It is clear that as a competing creditor, CLK is affected by the Order.

In conclusion, I am of the view that CLK has locus standi under O 32 r 6 to make this present application. I must emphasise that this application to set aside the Order is not an appeal. In permitting ex parte orders to be set aside, O 32 r 6 recognises that an ex parte order is provisional in nature and is made upon hearing one party only: Karaha Bodas at [19]–[20].

Whether the Order should be set aside

In making the Order, Edmund Leow JC decided that a joint tenant’s interest can be attached and taken in execution under a WSS. His Honour chose to depart from the High Court decision in Malayan Banking Bhd v Focal Finance Ltd [1998] 3 SLR(R) 1008 (“Malayan Banking”) which decided otherwise. Before I proceed to consider both decisions, it would be useful to first describe the nature of a joint tenant’s interest in land.

Nature of a joint tenant’s interest

In a joint tenancy, all the joint tenants together own the whole property. Joint tenants have rights between each other, but against the world they are seen as one owner. No one joint tenant holds any specific or distinct share of the property. The interest of each joint tenant is identical and lies in the whole of the property. The hallmark of a joint tenancy is the right of survivorship. See Goh Teh Lee v Lim Li Pheng Maria and others [2010] 3 SLR 364 (“Goh Teh Lee”) at [11]; Tan Sook Yee, Tang Hang Wu & Kelvin FK Low, Tan Sook Yee’s Principles of Singapore Land Law (LexisNexis, 3rd Ed, 2009) (“Principles of Singapore Land Law”) at para 9.5.

Because each joint tenant’s interest in the property is indistinguishable, joint tenants have to act jointly to effectively bind the estate which they hold jointly. Every joint tenant must partake in any dealings with the whole legal estate before such dealings may effectively bind the entire estate since the whole estate does not reside in a single joint tenant. Therefore, although a joint tenant is entitled to the whole of the interest in the property, he cannot sell the property without the agreement of all the joint tenants. See Goh Teh Lee at [17].

However, a joint tenant can sever the joint tenancy and if he does so, a tenancy in common would be created. Severance can only take place during the joint tenant’s lifetime because of the right of survivorship. A tenant in common owns a specific but undivided share in the property which he can deal with and sell without the need for the agreement of his other co-owners. It is accepted that an interest held by a tenant in common can be seized under a WSS.

The mere registration of a WSS over land held under a joint...