Malayan Banking Bhd v Focal Finance Ltd

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang JC
• Judgment Date: 11 December 1998
• Neutral Citation: [1998] SGHC 402
• Date: 11 December 1998
• Subject Matter: Whether writ of seizure and sale can be enforced against such debtor -Whether registration of writ of seizure against property severs the joint tenancy,Writ of seizure and sale,Enforcement,Judgment debtor a co-owner of property,Civil Procedure,Judgments and orders
• Docket Number: District Court Appeal No 49 of 1998
• Published date: 19 September 2003
• Defendant Counsel: Prem Gurbani (Gurbani & Co)
• Court: High Court (Singapore)
• Plaintiff Counsel: Julian Wong (Shook Lin & Bok)

Judgment:

TAY YONG KWANG JC

This is an appeal from a decision of the learned District Judge in OS 38/98, which is an interpleader summons taken out under O 17 of the Rules of Court.

2. The facts leading to this originating summons

Lim Kheng Dee (`Lim`) and Ong Sai Geok (`Ong`) are husband and wife. They owned as joint tenants a unit (`the property`) in the condominium known as Loyang Valley. This was mortgaged to the Oversea-Chinese Banking Corporation Ltd (`OCBC`) pursuant to a mortgage dated 10 March 1994. The mortgagors Lim and Ong defaulted in the repayment of the sums due under this mortgage and OCBC exercised its powers of sale thereunder.

3.The following is a chronology of the material events leading to the interpleader summons before the court:

(1)	15 May 1996	-	Focal Finance Ltd (`Focal`) obtained judgment against Lim only.
(2)	25 November 1996	-	Focal registered a writ of seizure and sale (`WSS`) against Lim`s interest in the property.
(3)	5 December 1996	-	Malayan Banking Bhd (`MBB`) obtained judgment against both Lim and Ong.
(4)	6 March 1997	-	MBB registered a WSS against the said property of both Lim and Ong.
(5)	7 May 1997	-	OCBC sold the property.
(6)	16 July 1997	-	OCBC`s sale of the property completed.
(7)	25 July 1997	-	Both Lim and Ong were adjudicated bankrupts.

4.Upon completion of the sale of the property, and after settlement of all amounts owed under the mortgage, there was a residue of $146,479.29. Ordinarily, such surplus would have been paid over to the mortgagors as the `person who appears from the land-register to be entitled to the mortgaged property` within the meaning of s 74(1) of the Land Titles Act (`LTA`). However, both Focal and MBB made claims to this amount. Initially, there were two other creditors of Lim and Ong which had registered WSS against the property. These two creditors, together with the Official Assignee, withdrew from the dispute concerning the excess amount before the originating summons was first heard in the subordinate courts.

5.Lim and Ong had, through their solicitors` letter dated 24 July 1997, informed OCBC`s solicitors that they intended to divide the surplus proceeds of sale into two equal shares, paying Focal and another creditor the half share of Lim while paying MBB the other half share belonging to Ong. MBB did not agree with this method of distribution.

6.After a series of correspondence between the interested parties, past and present, this originating summons was taken out by OCBC for the court to resolve the validity of the competing claims.

7. The deputy registrar`s decision

Before the deputy registrar of the subordinate courts, only Focal and MBB remained as the competing claimants to the surplus proceeds of sale of the property. If Focal`s WSS was effective, Focal would take half of the surplus proceeds of sale since it took the position that Lim`s interest in the property was a half share and its WSS had priority by virtue of ss 37 and 132 LTA. The learned deputy registrar ordered that the whole of the said surplus (less OCBC`s costs of $1,500 for the originating summons) be paid to MBB.

8. The district judge`s decision

Focal appealed to the district judge in chambers. The learned district judge allowed the appeal and ordered MBB to pay Focal half of the surplus less the said $1,500 costs of OCBC. He made no order as to the costs of the appeal before him.

9.The reasoning of the learned district judge can be found in the following paragraphs of his grounds of decision (with Focal referred to as the first defendant and MBB referred to as the second defendant):

8 Learned counsel for the first defendant cited the case of Sivakolunthu Kumarasamy v Shanmugam Nagaiah & Anor [1987] SLR 182 [1988] 1 MLJ 341 . (This Court of Appeal decision was not cited in the proceedings before the deputy registrar). In that case, the court made an order (called the settlement order) that the matrimonial property held under a joint tenancy be sold and the proceeds divided equally. The following appears at [[1987] SLR 182, 191-192; [1988] 1 MLJ 341, 347] (also reproduced at p 64 of the first defendant`s bundle of authorities dated 19 May 1998):

`... there is still the question whether the settlement order, when made, had the effect of severing the joint tenancy in the said property. We are of the opinion that it did. The court by making the settlement order in the form it did (ie by ordering a sale of the said property and the distribution of the proceeds of sale equally between the parties) intended to divide the said property between the parties without any limitation as to the length of life of either of them`.

9 Learned counsel submitted that by analogy, the court order pursuant to the first defendants` writ of seizure and sale (which appears at p 26 of the affidavit of Lee Siew Sen filed on 15 January 1998 in support of the plaintiffs` interpleader summons) must have the same effect, that is, the court`s order that the interest of the judgment debtor Lim Kheng Dee (one of the joint tenants) in the property be seized and sold must be construed as an order that has severed the joint tenancy.

10 Learned counsel for the second defendant tried to distinguish Sivakolunthu `s case by saying that in that case there was an order for sale whereas in the order here, pursuant to the writ of seizure and sale of the first defendant, (as appears at p 26 of the affidavit of Lee Siew Sen filed on 15 January 1998), there was only an order for attachment and not for sale. I did not accept this argument as a plain reading of the order made, as appears at p 26 of the affidavit of Lee Siew Sen filed on 15 January 1998, clearly shows that the order was made pursuant to the writ of seizure and sale and the order was that not only the property be `attached` but it is to be `taken in execution to satisfy the judgment` obtained by the first defendant (the underlining is mine for emphasis).

11 Learned counsel for the first defendant submitted that, as in the case of Sivakolunthu , there was an order for sale in present case. He said that the order by writ of seizure and sale, as appears at p 26 of the affidavit of Lee Siew Sen filed on 15 January 1998, was not only for a seizure. That order reads that the property is to be `... attached and taken in execution to satisfy the judgment ...`. He said that obviously one cannot satisfy a judgment unless the property is sold. I accepted the submissions of learned counsel for the first defendant.

12 Accordingly, I allowed the appeal by the first defendant and set aside the order of the deputy registrar ordering that the sum of $146,479.29 be paid to the second defendant, after deduction of the plaintiff`s costs of $1,500.

13 As the first defendant was claiming only half of the sum of $146,479.29, I ordered the second defendant to pay the sum of $73,239.65 to the first defendant (less $1,500 being the plaintiff`s costs). I did not make any order on costs of the appeal, as learned counsel for the first defendant conceded that he did not cite Sivakolunthu `s case in the proceedings below and counsel for the second defendant said he did not ask for any costs in the proceedings before the deputy registrar.

10.MBB then lodged an appeal against the learned district judge`s decision.

11. My decision

On 1 February 1992, the provisions on the charging order on land in O 50 of the then Rules of the Supreme Court were repealed. In place of the charging order on land, the Rules introduced the writ of seizure and sale against land. On 1 April 1992, the then Rules of the Subordinate Courts followed suit. Both sets of Rules have been consolidated as the Rules of Court since 1 April 1996.

12.The Land Titles Act applies to the property in question by virtue of s 4 of the Land Titles (Strata) Act. Sections 131 to 136 of the LTA and O 47 rr 4 and 5 of the Rules of Court provide the broad framework for a WSS on land or immovable property. Section 131 of the LTA speaks of a writ of execution against `land`, which is defined in s 4(1) of the Act to include any estate or interest therein. `Interest`, in turn, is defined as meaning any interest in land recognised as such by law and including an estate in land. Order 47 r 4(1) speaks of `immovable...