Cheng Lip Kwong v Bangkok Bank Ltd

• Jurisdiction: Singapore
• Judge: Chan Sek Keong J
• Judgment Date: 30 April 1992
• Neutral Citation: [1992] SGCA 34
• Docket Number: Civil Appeal No 11 of 1990
• Date: 30 April 1992
• Year: 1992
• Published date: 19 September 2003
• Plaintiff Counsel: Wong Pui Kay (Official Assignee)
• Citation: [1992] SGCA 34
• Defendant Counsel: Sarjit Singh Gill (Shook Lin & Bok)
• Court: Court of Appeal (Singapore)
• Subject Matter: Payment into court by appellant,Appellant subsequently bankrupt,Civil Procedure,Security,Costs,Whether security for costs should be paid to respondents or to appellant's estate,Appeal withdrawn,O 14, O 22, O 57 rr 3(3), 4(3) & 11 Rules of the Supreme Court 1970

This was an appeal against a decision of Yong Pung How J (as he then was) in chambers, dismissing an appeal from a decision of an assistant registrar who ordered that the defence filed be struck out under O 18 r 19 of the Rules of the Supreme Court 1970 (`the RSC`) and the inherent jurisdiction of the court, and that the plaintiffs be at liberty to enter judgment. [See [1990] 2 MLJ 5 .]

When the appeal was called on for hearing, counsel for the appellant, namely, the defendant, informed this court that the appellant had been made a bankrupt on 23 November 1990 and that the Official Assignee had not given his consent to pursue the appeal. The Assistant Official Assignee, who was present in court, confirmed that the appellant would not be proceeding with the appeal. Accordingly, we dismissed the appeal with costs to the respondent.

An ancillary question that arose for consideration was whether, in view of the intervening bankruptcy, the sum of $2,500 deposited by the appellant on 8 February 1990 as security for costs, pursuant to O 57 r 4(3) of the RSC should be paid out to the respondents or to the appellant`s estate. Time was given to counsel for the respondents and the Assistant Official Assignee to research into the point. After hearing the parties, we ordered that the security deposit or such part of it as would be sufficient to satisfy the taxed costs of the respondent, be paid out to the respondents rather than the Official Assignee. We should observe that the Assistant Official Assignee did not oppose the arguments advanced by the respondents` counsel. However, as the point is of some practical importance, we thought we should set down our reasons in writing.

Order 57 r 4(3) provides that `the appellant must at the time of filing the notice of appeal deposit a sum of two thousand five hundred dollars by way of security for the respondent`s costs of the appeal in the Registry ...`. There is no corresponding English provision which requires an appellant as a matter of course to deposit a fixed sum by way of security for the respondent`s costs of the appeal. Order 59 r 10(5) of the English Rules of the Supreme Court only provides that the Court of Appeal may, in special circumstances, order that such security shall be given for the costs of an appeal as may be just. We should add that in Singapore, since 1 February 1992, by virtue of an amendment which came into force on that date, the sum to be deposited as fixed security has been increased to $5,000.

What is the nature of such a security deposit? Does it render the respondents a secured creditor? Both counsel for the respondents and the Assistant Official Assignee have not been able to uncover any reported case on an identical point, not even a case where the security lodged was pursuant to an order of court, as in the English O 59 r 10(5). However, we were informed that in CA No 77 of 1988, this court had ruled that such a security deposit should be paid out to the appellant`s estate in bankruptcy. As it appeared to us clear that that case was decided per incuriam, without the benefit of arguments, we felt that it should not preclude us from re-examining the question.

The wording of our O 57 r 3(3) is simple and clear enough. The sum deposited is to be the security for the respondents` costs of the appeal. Although there appears to be no reported decision touching on such a payment in, there are some cases involving payments into court pursuant to conditional leave to defend being granted and voluntary payments into court made under O 22. We think it would be highly instructive and pertinent to refer to those cases.

In Re Keyworth, ex p Banner [1874] LR 9 Ch App the defendants obtained leave to defend an action upon paying into court o880 to abide the event. Later, an order was made referring the matter in dispute to arbitration. Before any award was made, the defendants filed a liquidation petition. The trustee claimed the o880 for distribution among the creditors generally. Sir James Bacon CJ said, at p 381:

... the o880 paid into court ceased, upon its being paid into court, to be the property of the debtors; it was no longer part of their estate. If the action had gone on to judgment, and the judgment had been for the plaintff for o880, the matter would have been quite clear and plain; the money would have belonged to the plaintiff.

Bacon CJ effectively decided that the plaintiff in the case was, at the commencement of the liquidation, a secured creditor. This decision was upheld on appeal. Ex p Banner [1874] LR 9 Ch App was followed in Re Ford, ex p The Trustee [1990] 2 QB 211 where Wright J reaffirmed that where money was paid into court pursuant to conditional leave to defend, `it must be treated as a security that the plaintiff shall not lose the benefit of the decision of the court in his favour`. He went on to elaborate that the very object of such an order was that the plaintiff `shall be in as good a position, so far as the money paid in extends, against...