City Development Ltd v Goh Yoke Hian and Others

JurisdictionSingapore
JudgeChan Sek Keong J
Judgment Date23 February 1990
Neutral Citation[1990] SGHC 9
Docket NumberOriginating Summons No 1090 of 1987
Date23 February 1990
Year1990
Published date19 September 2003
Plaintiff CounselGeorge Pereira (Foo & Quek)
Citation[1990] SGHC 9
Defendant CounselKoh Kok Wah (Arthur Loke & Partners),Chan Kok Chye (Chu Chan Gan & Ooi)
CourtHigh Court (Singapore)
Subject MatterApplicability of s 41(1) of Land Titles Act (Cap 157),Bankruptcy of judgment debtor before completion of execution by chargee,Priority of lapsed caveat over subsequent caveat lodged during its subsistence,Effect of s 40(1) of the Land Titles Act (Cap 157) on priority of lapsed caveat,Interest in property given by charging order,Restraints on dealings,s 40(1) Land Titles Act (Cap 157),Whether competing claims,Caveats,Effect of filing of caveats on property by chargees,Charging order,s 41(1) Land Titles Act (Cap 157),Land,Whether interests of chargees under charging order competed with that of equitable mortgagees,s 49 Bankruptcy Act (Cap 20),Caveats lodged by chargees and equitable mortgagees,Effect on charging order

Cur Adv Vult

This is an appeal by the second defendants against the decision of the senior assistant registrar that the claims of the third/fourth defendants had priority over the claim of the second defendants in respect of the proceeds of sale of a property known as 119 Sunset Way #06-01, Singapore (the property).

The property had been purchased by the first defendant under an agreement for sale and purchase dated 13 March 1981 from the plaintiffs (the developers) at the price of $410,252.50.
To finance the purchase, the first defendant borrowed the sum of $370,000 from the second defendants and executed a deed of assignment dated 27 March 1981 whereby he assigned all his right, title and interest in the property to the second defendants to secure the repayment of the loan. On 3 April 1981, the second defendants, as equitable mortgagees by virtue of the assignment, lodged a caveat against the property under the Land Titles Act (Cap 157) (the LTA) prohibiting the registration of any instrument affecting the property. This caveat lapsed on the expiry of 2 April 1986 and the second defendants lodged a fresh caveat on 3 September 1986.

However, during the subsistence of the second defendants` first caveat, the third defendants, claiming as chargee by virtue of a charging order made on 30 August 1985 (the charging order) in Suit No 1134 of 1985, had, on 9 October 1985, lodged a similar form of caveat against the property.
The fourth defendants followed likewise on 20 November 1985, claiming as a joint chargee (with the third defendants under the charging order).

The operative part of the charging order ordered that:

1 The interest of the second defendant in the property at #06-01 Sunset Way Block 119, Singapore 2159 (Lot 4129/ U97 Mukim 5, Pandan) comprised in the subsidiary strata certificate of title volume 176 folio 94 stands charged in favour of the plaintiffs and the Bank of Montreal who will hold the security jointly and in equal shares with the payment of $3,184,070.81 the amount due from the said second defendant to the plaintiffs on a judgment of the High Court dated 29 April 1985 and interest thereon at 12.25% per annum from 23 January 1985 to date of judgment and $700 costs together with $205 the costs of this application, the said costs to be added to the judgment debt, and with the payment of $2,173,548.86 the amount due from the said second defendant to the Bank of Montreal on a judgment of the High Court dated 5 August 1985 in Suit No 2089 of 1985 with interest thereafter at 8% per annum to payment and costs of $700.



On 17 October 1986, the first defendant was adjudicated a bankrupt in Bankruptcy No 1395 of 1985 upon the petition of the third defendants.
The act of bankruptcy, which was founded upon the first defendant`s failure to comply with a bankruptcy notice, was committed on 31 August 1985.

On 14 May 1987, the plaintiffs (apparently in ignorance of the first defendant`s bankruptcy), commenced an action in Suit No 1367 of 1987 against the first defendant for various reliefs and on 21 August 1987, in default of appearance, obtained an order of court for: (i) an order for specific performance of the agreement for sale and purchase dated 13 March 1981; (ii) a declaration that the plaintiffs had a lien on the property in respect of property for $100,528.72 and interest thereon, being the balance of the unpaid purchase price; and (iii) an order that the plaintiffs be at liberty to enforce the lien by selling the property upon the first defendant defaulting in the payment of the unpaid purchase price.


The first defendant, inevitably, defaulted in payment, whereupon the plaintiffs instead of selling the property pursuant to the said judgment, commenced this second (and quite unnecessary) action against the first defendant, and in which the second, third and fourth defendants were later joined as parties for the purpose of determining priorities.
In this action the plaintiffs claimed (i) an order for sale of the property free from encumbrances by public auction or private treaty, with liberty to the plaintiffs to bid at the sale; (ii) an order that the caveats lodged by the first, second, third and fourth defendants be withdrawn; and (iii) an order that the proceeds of sale be applied in the following order of priorities: property tax, maintenance charges, cost of the sale; and (iv) an order that the costs of the plaintiffs be paid by the first defendant.

On 11 April 1988, the plaintiffs obtained (the Official Assignee on behalf of the first defendant not objecting) an order for the reliefs (i) to (iv) mentioned above, the payment of two other small sums, and for the balance of the proceeds of sale (the fund) to be deposited in an interest bearing account until the determination of the respective priorities of the second, third and fourth defendants in the said proceeds.
This sale was effected and the fund paid into a deposit account.

The priorities, inter se, of the second, third and fourth defendants` respective claims were determined before the senior assistant registrar.
He held that by reason of s 41(1) of the LTA, the second defendants had lost their priority in the fund to the third/fourth defendants as their first caveat ceased to affect the property when it lapsed on 3 April 1986 and their second caveat was lodged after the caveats of the third/fourth defendants. Section 41(1) of the LTA provides as follows:

Except in the case of fraud, the entry of a caveat protecting an unregistered interest in land under the provisions of this Act gives that interest priority over any other unregistered interest not so protected at the time when the caveat was entered.



In this appeal, counsel for the second defendants has contended that the decision of the senior assistant registrar was wrong on the following grounds:

(1) that s 41(1) applied only to interests which compete with each or one other;

(2) that the interests of the second defendants did not compete with that of the third/fourth defendants under the charging order as the charging order could not vest in the second/third defendants an interest in the property which the first defendant did not have at the time the charging order was made, reference was made to the decision of the Supreme Court of Canada in St Mary`s Parish Credit Union v TM Ball Lumber Co (1961) 27 DLR (2d) 551;

(3) the decision was contrary to my decision in United Overseas Finance v Mutu Jeras [1989] 3 MLJ 20 when it was decided by this court that on a true construction of s 41(1), the lapsing of a prior caveat did not deprive that caveator of his priority over any subsequent caveator who had lodged a caveat during the validity period of the prior caveat.



Counsel for the third/fourth defendants has contended otherwise, that (i) the charging order had priority under s 41(1) as the principle of nemo dat non habet had no application, and (ii) the decision in Mutus Jeras should not be followed as it did not take into account the effect of s 40 of the LTA.


In support of the first ground, counsel for the third/ fourth defendants relied on the decision of Lai Kew Chai J in Bank of China v The First National Bank of Boston [1988] 3 MLJ 401 .
In that case, the execution creditors had obtained a charging order and lodged a caveat against the debtor`s property at a time when the equitable mortgagees` caveat had already lapsed, and was no longer under that section. Lai Kew Chai J accepted the argument of counsel for the execution creditors on the basis of the authorities cited to him, viz Fung Sin Wa v Moi Chan Hen (1897) 4 SSLR 175, Ng Boo Bee v Khaw Joo Choe (1921) 14 SSLR 90, Chung Khiaw Bank Ltd v United Overseas Bank Ltd [1970] 1 MLJ 185 and Re Tan Kiong Hwa [1972] 1 MLJ 239 . His Lordship held that priority was determined by the date of lodgment of the caveat as provided by s 41.

I shall consider first the argument based on the nemo dat principle.
This principle applies to voluntary dispositions of property where the transferor...

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4 cases
  • Bank of China v First National Bank of Boston
    • Singapore
    • Court of Appeal (Singapore)
    • 14 January 1992
    ... ... v Khaw Joo Choe & Ors [1921] 14 SSLR 90 and City Developments Ltd v Goh Yoke Hian & Ors [1990] 3 MLJ 8 ... ...
  • DBS Finance Ltd v Prime Realty Pte Ltd and Another
    • Singapore
    • High Court (Singapore)
    • 20 December 1990
    ... ... Pte Ltd (Prime Developments) in a condominium development known as Toh Yi Court Condominium which Prime Developments ... proposition I find it in [1983] 1 MLJ 193 and in City Developments Ltd v Goh Yoke Hian & Ors [1990] 3 MLJ 8 ... ...
  • Cathay Theatres Pte Ltd v LKM Investments Holdings Pte Ltd
    • Singapore
    • Court of Appeal (Singapore)
    • 15 January 1998
    ...not evidence an interest in land; nor does it create any interest in land: City Development Ltd v Goh Yoke Hian [1990] 3 MLJ 8 , p 13; [1990] SLR 235, p 244. In Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 at p 228, Holland J of the Supreme Court of New South Wales on the basis of the Au......
  • Cathay Theatres Pte Ltd v LKM Investments Holdings Pte Ltd
    • Singapore
    • Court of Three Judges (Singapore)
    • 14 January 1998
    ...not evidence an interest in land; nor does it create any interest in land: City Development Ltd v Goh Yoke Hian [1990] 3 MLJ 8 , p 13; [1990] SLR 235, p 244. In Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 at p 228, Holland J of the Supreme Court of New South Wales on the basis of the Au......

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