Chung Khiaw Bank Ltd v United Overseas Bank Ltd

• Jurisdiction: Singapore
• Judge: Lord Donovan
• Judgment Date: 19 January 1970
• Neutral Citation: [1970] SGPC 1
• Docket Number: Privy Council Appeal No 31 of 1968
• Published date: 19 September 2003
• Year: 1970
• Citation: [1970] SGPC 1
• Defendant Counsel: Micheal Kerr QC, G Godfrey and KS Chung (Coward Chance & Co)
• Court: Privy Council
• Plaintiff Counsel: JE Le Quesne QC and AL Hills (Parker, Garrett & Co)

The contest in this case is between two banks, each of which is a creditor, for a large amount of money, of one Tay Soo Tong. The appellants are equitable mortgagees by deposit of deeds, the respondents unsecured judgment creditors. The question is which of these banks is entitled to prior payment out of the proceeds of the lands in Singapore which were the subject of the appellants` equitable mortgages.

The appellants claim that their security was constituted by deposit of title deeds and documents and acknowledged by two instruments in writing dated 25 August 1958. The respondents obtained judgment against the debtor on 16 June 1966 for $378,267.31. On 27 October 1966, by a writ of seizure and sale dated 25 October 1966, they obtained an order attaching the debtor`s interest in the properties. This order was registered in the Registry of Deeds at Singapore on 28 October 1966.

On 14 November 1966, by an originating summons dated 22 September 1966, the appellants obtained an order against the debtor declaring that the appellants were, by reason of the deposit of the title deeds, legal mortgagees of the properties and giving the appellants liberty to sell them out of court. The respondents were not made parties to this originating summons. This order was registered in the Registry of Deeds at Singapore on 23 January 1967. Correspondence followed, which led to no result, and finally the respondents, on 25 October 1967, applied by summons in chambers for an order inter alia that the order dated 14 November 1966 be set aside. The summons came before Winslow J and was dealt with mainly on a procedural basis. The learned judge in fact held that the order of 14 November 1966 was not an ex parte order and that the respondents were not `persons affected` by the order. He dismissed the application.

The respondents appealed to the Federal Court of Malaysia (Appellate Jurisdiction). That court held, unanimously, that the order of 14 November 1966 was made ex parte and that the respondents were affected by it. The reason for this latter finding was that the court held that the respondents had obtained priority over the rights of the appellants in the properties by the registration of the order of attachment on 28 October 1966. The Federal Court therefore reversed the judgment of Winslow J and ordered that the order of 14 November 1966 be set aside and that the register of deeds be rectified by cancelling the entry of 23 January 1967.

On the appeal before the Board, none of the procedural points canvassed before the courts below were pressed: both sides addressed their arguments to the question of substance, namely, whether the respondents as judgment creditors had or had not priority over the appellants as regards disposal of the proceeds of sale of the properties.

A further point was taken by the respondents as to the admissibility in evidence of the memoranda of deposit, but their Lordships did not find it necessary to hear argument on this point and express no opinion with regard to it.

The relevant provisions regarding the registration of deeds and orders in Singapore are contained in the Registration of Deeds Ordinance (Cap 255), which dates from 1886. These are as follows:

2 `assurance` includes any conveyance, memorandum of charge or discharge ... [or] order of court ... `order of court` means any judgment decree, writ of execution or sequestration, adjudication in bankruptcy or other order or process of or issuing from the said court or other court of competent jurisdiction whereby any interest in any land is or may be affected.

7(1) Where any lien or charge on any lands is claimed in respect of any unpaid purchase-money or by reason of any deposit of title deeds or otherwise, a memorandum of such lien or charge, signed by the person against whom such lien or charge is claimed, may be provisionally registered on presentation by any person claiming to be interested therein.

(3) No such lien or charge shall have any effect or priority as against any assurance for valuable consideration unless and until a memorandum thereof has been registered in accordance with this Ordinance.

15(1) Subject to this Ordinance, all instruments ... entitled to be registered under this Ordinance shall have priority according to the date of registration thereof and not according to the date of such instruments or of the execution thereof.

(4) All priorities given by this Ordinance shall have full effect in all courts except in cases of actual fraud to which the person by or on whose behalf the registration is made is a party, and all persons claiming thereunder any legal or equitable interests shall be entitled to corresponding priorities, and no such person shall lose any such priority merely in...