Chan Shwe Ching v Leong Lai Yee

• Jurisdiction: Singapore
• Judge: Edmund Leow JC
• Judgment Date: 12 August 2015
• Neutral Citation: [2015] SGHC 210
• Plaintiff Counsel: Chia Soo Michael and Hany Soh Hui Bin (Chia-Thomas Law Chambers LLC)
• Docket Number: HC/Suit No 342 of 2015 (HC/Summons No 3087 of 2015)
• Date: 12 August 2015
• Hearing Date: 10 July 2015,01 July 2015
• Subject Matter: Civil Procedure-judgments and orders-enforcement,writs of seizure and sale,Credit and security,remedies
• Published date: 15 August 2015
• Citation: [2015] SGHC 210
• Court: High Court (Singapore)
• Year: 2015

Edmund Leow JC: Introduction

This application was filed by the plaintiff for the defendant’s interest in the property at 9 Jalan Tanah Rata, Singapore (“the Property”) to be attached and taken in execution to satisfy the judgment in Summons No 2470 of 2015 (“SUM 2470/2015”) and the costs order in Summons No 2813 of 2015 (“SUM 2813/2015”) (referred to as “the Judgment Debt”). The Property is held by the defendant and her husband as joint tenants. After hearing the ex parte application and perusing the submissions, I allowed the application on 10 July 2015. As important questions concerning the enforceability of a writ of seizure and sale (“WSS”) on an immovable property held by joint tenants arose in the present case, I now give my reasons for allowing the application.

Facts

The plaintiff commenced proceedings against the defendant on 10 April 2015 for payment of the sum of approximately $1.43m. By May 2015, the defendant was reported missing and numerous police reports had been lodged by up to 60 investors claiming that she owed them about $60m. The defendant has since been uncontactable. The plaintiff obtained summary judgment against the defendant on 22 May 2015 for the sum of approximately $1.43m by way of SUM 2470/2015. The defendant was also ordered to pay the plaintiff costs fixed at $22,000 with reasonable disbursements. The plaintiff has since provided the court with a list of disbursements incurred amounting to $6,052.10. The plaintiff also applied by way of SUM 2813/2015 to appoint a receiver over the Property. On 23 June 2015, the court granted her application for the appointment of a receiver and awarded her costs in the sum of $1,500.

Unfortunately, the appointment of a receiver as a method of enforcing the Judgment Debt did not assist the plaintiff in this case, as there was no rent to receive in respect of the Property. Without a WSS, the plaintiff could not force a sale and was left without any satisfactory remedy for the enforcement of the Judgment Debt. Further, in the event that the defendant is declared to be bankrupt, the plaintiff will lose her priority over the Property to the Official Assignee pursuant to s 105(1) of the Bankruptcy Act (Cap 20, 2009 Rev Ed) given that no execution against the Property by way of a WSS has been completed. The total sum due to the plaintiff under the Judgment Debt of about $1.47m remains unpaid to this date.

The plaintiff then commenced the present action, for the interest of the defendant in the Property to attach and be taken in execution to satisfy the Judgment Debt.

The plaintiff’s arguments

Counsel for the plaintiff submits that Malayan Banking Bhd v Focal Finance Ltd [1998] 3 SLR(R) 1008 (“Malayan Banking”) should not be followed as it has “produced an inequitable result in this case”. In particular, he makes the following arguments in support of the proposition that a WSS should be granted in this case: There is no need for severance of a joint tenancy to occur prior to a WSS being able to attach to the interest of a judgment debtor in a property held in joint tenancy. There is no prejudice to the third party (ie, the “innocent” joint tenant). The position in Singapore under Malayan Banking in relation to WSS of an immovable property held in the manner of joint tenants is at odds with the position in other Commonwealth jurisdictions.

I will address each of the arguments in turn, but will first consider the arguments and reasons given for the decision in Malayan Banking.

The current state of the law as per Malayan Banking

The facts in Malayan Banking concern two writs of seizure and sale which had been registered against a property held by joint tenants. The first WSS was registered only against the husband’s interest in the property by Focal Finance Ltd. The second WSS was registered against the property as a whole by Malayan Banking Bhd. The issue before the High Court was how the surplus from the sale proceeds of the property should be apportioned between the respective parties. The High Court held that a WSS against immovable property could not be used to enforce a judgment against a debtor who was one of two or more joint tenants of that property (at [24]). The registration of the first WSS was thus declared to be invalid and was set aside, and the surplus from the sale proceeds were ordered to be paid to Malayan Banking Bhd. The court reasoned (at [15]) that:

... Although joint tenancy in immovable property is an interest recognised in law, the “interest of the judgment debtor” attachable under a WSS under O 47 r 4(1)(a) must surely be a distinct and identifiable one. A joint tenant has no distinct and identifiable share in land for as long as the joint tenancy subsists. To seize one joint tenant’s interest is to seize also the interest of his co-owners when they are not subject to the judgment which is being enforced. ...

[emphasis added]

This forms the fundamental premise of the court’s reasoning and very materially shapes the scope of the court’s subsequent inquiry. Hence, the focus of the inquiry shifted to whether the registration of a WSS severs the joint tenancy, rather than whether the interest of a judgment debtor is attachable to a WSS in the first place. As the registration of a WSS did not sever a joint tenancy, the court concluded that the interest of a joint tenant could not be the subject of a WSS as the interest was neither “distinct” nor “identifiable”. The court was of the view that a judgment creditor could proceed against a judgment debtor (who is a joint tenant of land) by the appointment of a receiver by way of equitable execution (under O 30 and O 51 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“the Rules”)) instead (at [23]).

In my view, the court correctly rejected the argument that a WSS severs a joint tenancy at the time of registration. After all, it is difficult to see what would constitute an “act operating on the joint tenant’s own share” at the time the WSS is registered by the judgment creditor who is not a party to the joint tenancy. But it does not necessarily follow that a joint tenant’s interest is therefore incapable of being identified and seized under a WSS. Further, the appointment of a receiver as an alternative method of enforcing a judgment debt does not appear to be a satisfactory one. The appointment of a receiver merely entitles the judgment creditor to rental and profits from the property and is ultimately a very different remedy from the execution of a WSS. I will now turn to the preliminary question of whether the interest of a judgment debtor in a joint tenancy can attach to a WSS, which is a separate question from the question of when severance of a joint tenancy occurs.

WSS of a joint tenant’s interest in property

On the face of the wording of O 47 r 4 of the Rules, WSS on immovable property can be carried out on “any interest therein” (emphasis added), which would presumably include the interest of a joint tenant. There appears to be nothing in the wording of the Rules which would support a restrictive interpretation of the type of interest in immovable property which can attach to a WSS.

The requirement of a “distinct and identifiable” interest in land

In fact, the requirement that an interest in land has to be “distinct and identifiable” for a WSS to seize such an interest, and that to be distinct and identifiable, a share in the land has to be a separate and undivided one, appeared for the first time in Malayan Banking at [15]. There is a notable absence of any citation of supporting authority for this proposition in Malayan Banking. There is also no mention of such a requirement in the academic writing that existed at the time of the decision in Malayan Banking on the availability of a WSS in respect of immovable property (see eg, Jeffrey Pinsler, Civil Procedure (Butterworths Asia, 1994) at pp 939–941). The absence of any discussion on the type of interest in land which can be subject to a WSS suggests that traditionally, there was no need for a distinction to be drawn between the types of co-ownership in this context, and at the very least suggests that a WSS was available in respect of a judgment debtor’s interest in an immovable property held in joint tenancy. Professor Tan Sook Yee (“Professor Tan”) further states in Tan Sook Yee, Tang Hang Wu & Kelvin FK Low, Tan Sook Yee’s Principles of Singapore Land Law (LexisNexis, 2010) (“Principles (2010)”) at para 9.42 that “[u]ntil Malayan Banking Bhd v Focal Finance Ltd, it was accepted that the interest of a joint tenant can be subject to a writ of seizure and sale”. Upon careful consideration of the above, I am of the view that prior to Malayan Banking, severance of a joint tenancy into undivided shares was not a prerequisite for a WSS to be issued against a joint tenant’s interest in land.

The concept of joint tenancy is admittedly a somewhat strange legal creation. Every joint tenant in a joint tenancy arrangement is entitled to the whole of the property. This may give the...