Liew Kum Chong v SVM International Trading Pte Ltd and others

• Jurisdiction: Singapore
• Judge: Jonathan Ng Pang Ern AR
• Judgment Date: 31 March 2020
• Neutral Citation: [2020] SGHCR 2
• Court: High Court (Singapore)
• Docket Number: Suit No 980 of 2016 (Summons No 6105 of 2019)
• Year: 2020
• Published date: 07 April 2020
• Hearing Date: 10 March 2020,28 January 2020
• Plaintiff Counsel: Tang Shangwei, Gavin Neo and Khoo Kiah Min Jolyn (WongPartnership LLP)
• Defendant Counsel: Chua Cheng Yew (Wong Tan & Molly Lim LLC)
• Subject Matter: Civil Procedure,Judgments and orders,Enforcement
• Citation: [2020] SGHCR 2

Jonathan Ng Pang Ern AR:

Summons No 6105 of 2019 (“SUM 6105”) was the Plaintiff’s application under O 47 r 4 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“Rules of Court”) to attach the 2nd Defendant’s interest in a commercial property located at 1 Jalan Dusun #01-26, One Dusun Residences, Singapore (the “Jalan Dusun Property”). The 2nd Defendant was not the registered proprietor of the Jalan Dusun Property. Instead, it claimed, via a caveat (the “Caveat”), an interest as purchaser of the same. What was the nature of the 2nd Defendant’s interest in the Jalan Dusun Property? And could that interest be attached under O 47 r 4 of the Rules of Court? After hearing from parties, I allowed the application. These are the grounds of my decision.

Background

The Plaintiff commenced Suit No 980 of 2016 on 14 September 2016. On 22 March 2019, the High Court gave judgment for the Plaintiff against the 1st to 4th Defendants. The grounds of the Court’s decision are set out in Liew Kum Chong v SVM International Trading Pte Ltd and others [2019] SGHC 163. The extracted judgment, HC/JUD 185/2019, indicated that the 2nd Defendant was to pay the Plaintiff: the judgment sum of $100,000; interest at a rate of 5.33% per annum on the judgment sum from the date of writ to the date of judgment; costs in the sum of $90,000 (to be paid collectively by the 1st to 3rd Defendants); and disbursements to be fixed if not agreed.

On 6 December 2019, the Plaintiff took out SUM 6105. Being originally an ex parte application, SUM 6105 came to me as a paper hearing in my capacity as Duty Registrar on 9 December 2019. The orders sought were as follows: 1. The interest of the 2nd Defendant in the [Jalan Dusun Property] be attached and taken in execution to satisfy the Judgment No. HC/JUD 185/2019 dated 22 March 2019 by the Honourable Justice Chua Lee Ming; and 2. The 2nd Defendant pay the costs of and occasioned by this application.

In his supporting affidavit, the Plaintiff claimed that the sum of $228,300.84 remained outstanding from the 2nd Defendant. It was subsequently clarified that this was a typographical error; the correct figure should have been $228,301.44. This figure was arrived at by adding together the following sums: (a) the judgment sum ($100,000); (b) pre-judgment interest (which the Plaintiff quantified at $13,419.92); (c) costs ($90,000); (d) disbursements (which the Court eventually fixed at $16,561.60); and (e) post-judgment interest (which the Plaintiff quantified at $8,319.92 as of the date of the supporting affidavit).¹

According to the Plaintiff, the 2nd Defendant had lodged the Caveat claiming the interest of a purchaser of the Jalan Dusun Property.² To support this claim, the Plaintiff exhibited a title search conducted on the Jalan Dusun Property on 6 December 2019 (the “Title Search”).³ The Plaintiff further stated that, to the best of his knowledge, information and belief, the Jalan Dusun Property belonged to the 2nd Defendant.⁴

The Title Search showed that the registered proprietor of the Jalan Dusun Property was a company by the name of LVND Homes Pte Ltd (“LVND”).⁵ The Caveat was lodged on 29 January 2013, and reflected the following information:⁶

Interest Claimed:	PURCHASER
Purchase Price:	$ 1,291,200
Contract/Option Date:	19/09/2012
Prohibition Clause:	UNLESS THE CAVEATOR OR SOME PERSON NOMINATED BY HIM IN THE CAVEAT HAS CONSENTED IN WRITING TO SUCH REGISTRATION

Upon my directions, the Plaintiff’s solicitors wrote in on 23 December 2019 and clarified that the Jalan Dusun Property was an uncompleted commercial property that was purchased by the 2nd Defendant from LVND (the developer) pursuant to a Sale and Purchase Agreement dated 19 September 2012 (the “SPA”).⁷ Further, the Plaintiff’s solicitors also highlighted that in examination of judgment debtor proceedings in Summons No 4083 of 2019, the 4th Defendant, who allegedly assisted in arranging the 2nd Defendant’s affairs, had stated that the 2nd Defendant had paid “$750,000+” out of the total purchase price of $1,291,200.⁸ Accordingly, as there were still outstanding instalment payments to be paid and legal completion had yet to take place, legal title to the Jalan Dusun Property still vested in LVND.⁹

Having some doubt as to whether the 2nd Defendant’s interest in the Jalan Dusun Property could be attached under O 47 r 4 of the Rules of Court, I fixed SUM 6105 for an oral hearing. This was originally scheduled for 9 January 2020, but was rescheduled at the Plaintiff’s solicitors’ request. The first hearing on 28 January 2020 was an ex parte hearing (as SUM 6105 was filed as an ex parte application). At this hearing, I indicated to Mr Gavin Neo, who appeared for the Plaintiff, that I was considering fixing SUM 6105 for an inter partes hearing. Mr Neo accepted that the issue of whether the 2nd Defendant’s interest in the Jalan Dusun Property could be the subject of an application under O 47 r 4 of the Rules of Court was quite a novel point. However, he submitted that it was for the 2nd Defendant to apply to set aside any order that was made on SUM 6105, and that it was not for the 2nd Defendant to “block” SUM 6105 at this stage. He also suggested that the 2nd Defendant might seek to sell the Jalan Dusun Property and dissipate the sale proceeds. Alternatively, if the SPA became annulled for the 2nd Defendant’s failure to keep up with the instalment payments, the 2nd Defendant might dissipate any refund paid by LVND. While I appreciated these concerns, I was of the view that the risk of dissipation was somewhat remote. Accordingly, I fixed SUM 6105 for an inter partes hearing and gave directions for the filing of reply affidavits.

Parties’ submissions

In broad terms, the Plaintiff’s submissions were as follows: The 2nd Defendant owned an equitable interest in the Jalan Dusun Property. Specifically, the 2nd Defendant’s equitable interest in the Jalan Dusun Property had accrued in line with its instalment payments set out in the SPA and, accordingly, the 2nd Defendant held an equitable interest in the Jalan Dusun Property amounting to approximately $750,000.¹⁰ Further, the 2nd Defendant also had an equitable interest in the paid up instalments of the Jalan Dusun Property should the SPA be annulled: under the SPA, LVND, after making certain deductions, had to refund the balance of the instalments previously paid by the 2nd Defendant if the SPA was annulled.¹¹ The phrase “immovable property or any interest therein” in O 47 r 4 of the Rules of Court included the 2nd Defendant’s interest in the Jalan Dusun Property.

As it turned out, the Defendant did not file any reply affidavit. At the second hearing on 10 March 2020, Mr Chua Cheng Yew, who appeared for the 2nd Defendant, cited his inability to obtain instructions as the reason for this. Among other things, Mr Chua emphasised that, notwithstanding his efforts, he had no instructions on how much of the purchase price the 2nd Defendant had paid LVND. Without this information, Mr Chua was unable to express any view on SUM 6105. In short, I understood Mr Chua to have taken no position on SUM 6105.

Issues arising from SUM 6105

Arising from the above, SUM 6105 turned on the answers to two issues: First, what was the nature of the 2nd Defendant’s interest in the Jalan Dusun Property? Second, could the 2nd Defendant’s interest in the Jalan Dusun Property be attached under O 47 r 4 of the Rules of Court?

It is to these two issues that I now turn.

What was the nature of the 2nd Defendant’s interest in the Jalan Dusun Property?

I start with the first issue: what was the nature of the 2nd Defendant’s interest in the Jalan Dusun Property?

Orthodoxy provides a straightforward answer to this. As observed in Tang Hang Wu and Kelvin FK Low, Tan Sook Yee’s Principles of Singapore Land Law (LexisNexis, 4th Ed, 2019) (“Tan Sook Yee”) (at para 16.84), “a purchaser under a valid contract for sale has the equitable interest in the land, while the vendor holds the legal title for him as constructive trustee” [emphasis added]. This flows from the English High Court’s decision in Lysaght v Edwards (1876) 2 Ch D 499 (“Lysaght”), where it was held (at 506) that:

… [T]he moment you have a valid contract for sale the vendor becomes in equity a trustee for the purchaser of the estate sold, and the beneficial ownership passes to the purchaser, the vendor having a right to the purchase-money, a charge or lien on the estate for the security of that purchase-money, and a right to retain possession of the estate until the purchase-money is paid, in the absence of express contract as to the time of delivering possession. … [emphasis added]

The basis for this is said to be “the confluence of two equitable rules” (Tan Sook Yee at para 16.84):

… First, a purchaser of land is usually entitled to the equitable remedy of specific performance on the basis that since each piece of land is unique, damages will not be an adequate remedy. Second, the equitable maxim ‘equity looks on that as done which ought to be done’ accelerates in equity that which is inevitable at law so that completion is anticipated in equity. The result is the conversion of the purchaser into the owner of the land in equity, a process which brings about the operation of the doctrine of conversion. …

The above passages from Lysaght and Tan Sook Yee appear to imply that a purchaser of land comes to own the entire equitable interest in the land upon the conclusion of a contract for sale. However, in Jerome v Kelly (Inspector of Taxes) [2004] 1 WLR 1409 (“Jerome”), the House of Lords espoused a seemingly more nuanced approach, holding (at [32]) that:

It would therefore be wrong to treat an uncompleted contract for the sale of land as equivalent to an immediate, irrevocable declaration of trust (or assignment of beneficial interest) in the land....