Public Trustee v Chartered Bank of India, Australia and China
| Jurisdiction | Singapore |
| Judgment Date | 21 February 1956 |
| Date | 21 February 1956 |
| Court | Obsolete Court (Singapore) |
(Taylor J.)
International Law Relation to Municipal Law Whether Treaty of Peace Confers Rights on Individuals.
Treaties Operation of Necessity for Municipal Legislation Treaty of Peace The Law of Singapore.
Treaties Interpretation of Agencies of Interpretation Municipal Courts.
Treaties Interpretation of Principles and Rules of Interpretation of Treaty According to Its Whole Tenor.
Peace Treaties Waiver of Claims Arising Out of Action Taken in Course of Prosecution of War Whether Administration by Occupant of Occupied Territory After Cessation of Hostilities Constitutes Such Action.
Belligerent Occupation In General Administration of Occupied Territory After Cessation of Hostilities Whether Covered by Terms of Peace Treaty Referring to Action in the course of prosecution of the war.
Belligerent Occupation Respect for Private Property Right of Occupant to Liquidate Property Liquidation as Distinguished from Confiscation Hague Convention No. IV Articles 43, 46 and 48 Obligation of Occupant to Respect Local Law Obligation to Respect Legislation of Opposing Belligerent Relating to Trading with the Enemy Regulation of Currency and Banking.
War Effects of Outbreak of On Enemy Subjects with Regard to Their Property Effect on Credit Balance of Enemy Bank with a National Bank Payable to Custodian of Enemy Property Status and Functions of Custodian of Enemy Property Whether a Substitute for Enemy Owner Nature of Legislation Relating to Trading with the Enemy Belligerent Occupation Liquidation of Bank by Belligerent Occupant Rights of Belligerent Occupant Right to Liquidate Property Liquidation as Distinguished from Confiscation Hague Convention No. IV Articles 43, 46 and 48 Obligation of Occupant to Respect Local Law Obligation to Respect Legislation of Opposing Belligerent Relating to Trading with the Enemy Regulation of Currency and Banking Treaties of Peace Interpretation by Municipal Courts Administration of Occupied Territory by Occupant After Cessation of Hostilities Whether Covered by Terms of Peace Treaty Referring to Action in the course of prosecution of the war Whether Treaty of Peace Confers Rights on Individuals.
The Facts (as summarized by Taylor J.).This action arises out of the Japanese occupation of British territories during the war.
The plaintiff is the Custodian of Enemy Property. The defendants have branches in Singapore, Hong Kong and many other places; their Singapore branch functions as a local clearing bank.
The Yokohama Specie Bank, referred to in this litigation as the Y.S.B., was incorporated in Japan, and had branches in Singapore, Hong Kong and other places. When Japan entered the war, the Singapore branch had a credit balance of nearly $4,000,000 with the defendants. This amount was prima facie payable to the Custodian and he drew $3,000,000 leaving a balance of about $780,000 which unavoidably remained in suspense during the war and for several years afterwards. Meantime the defendants learned that during the enemy occupation certain moneys belonging to their branches in Hong Kong and other places had been collected by, or paid to, the Y.S.B. in those places. The defendants claimed to set off the equivalent of these moneys against the Singapore balance and the Custodian disputed their right to do so. The Custodian now sues for that balance and the defendants counterclaim for a declaration that they are entitled to recover the amount of those moneys from funds of the Y.S.B. which have devolved on the Custodian.
Japan entered the war on 8th December, 1941, and on 12th December the Under Secretary, exercising powers corresponding to those of the Board of Trade, made a Restriction Order under section 4A of the Trading with the Enemy Ordinance, appointing the Custodian to be Controller of the business of the Y.S.B. in the Colony.
About 15th December Japanese forces bombed and occupied Penang. On Christmas Day they occupied Hong Kong. On 15th February they occupied Singapore and at about the same time they occupied Kuching, the capital of the State of Sarawak in Borneo. These territories were liberated soon after the surrender of Japan in August 1945. Thus for about three years and a half they were enemy occupied territory and, apart from a few air raids, were never again a theatre of active military operations.
The capitulation and occupation of Singapore were carried out with little damage and disorder. The Japanese quickly organised local government. Nearly all British and Allied nationals of European race were interned within a few days. The Japanese appointed a Custodian who took over the office and staff of the Custodian of the Colony and preserved his records. Speaking very broadly they administered enemy property on British lines.
The Y.S.B. quickly recommenced business, but not in the same building. After a few weeks the Chinese banks, which are incorporated locally, and the branches of Indian banks, were allowed to resume business, subject to restrictions. The branches of the defendants and similar banks were subjected to a form of liquidation but most of their books and documents were carefully preserved. In 1945 their senior officers returned, reassembled most of the pre-war local staffs, reconstituted their accounts and resumed business. The balance of $780,000 to the credit of the Y.S.B. clearing account still existed and the Custodian claimed it.
In 1951 a general Vesting Order was made under section 8 of the Trading with the Enemy Ordinance, expressly vesting in the plaintiff enemy property, including by Article 3 (a) property which is the subject of a Restriction Order.
In his statement of claim the plaintiff sets out the history of the account, the Restriction Order, his predecessor's appointment as Controller thereunder and the General Vesting Order of 1951, and claims a declaration that he is entitled to the balance, payment of the amount, with interest, or alternatively an account or damages.
Held: that the claim of the Custodian must succeed, and the set-off and counterclaim fail. (1) On the outbreak of war the credit balance of an account of an enemy bank with a British bank became payable to the Custodian of Enemy Property, without demand, but claims against the enemy bank, not being debts due in the same right, could not be set off; (2) a belligerent Power in effective occupation of territory could lawfully liquidate the branches of banks whose business could not be carried on, if it was reasonably necessary to do so for the preservation of the assets or for the orderly administration of the territory; (3) a Custodian of Enemy Property is appointed by his own Government with purely statutory functions to preserve the property of enemies during the war and to hold the property, or its proceeds, available for whatever arrangements may be made at the conclusion of the peace; he is accountable only to his own Government, and is not an agent or representative of a particular enemy.
The Court, after stating the facts, said in part: The argument for the defendants is a series of independent propositions, most of which are separately contentious, apart from the question whether, if correct separately, they lead to the suggested conclusion. The submissions are as follows:
The account of the Y.S.B. with their Singapore branch is subject to the incidents of an ordinary current account between banker and customer; money in such an account is repayable only on demand; the bank is entitled to set off moneys due from the same customer at the date of demand, even if the cross-demand arises in a different country. War apart, the defendants would have been legally entitled to dishonour a cheque drawn by the Y.S.B. on that account after such a cross-claim as is now alleged had arisen; the necessity for demand survives the war and affects the Custodian; the Custodian has no greater rights than the Y.S.B. would have had, if they were now claiming the same balance; the Custodian is not entitled to pool the whole of an enemy's assets; he must first discharge the liabilities of the particular enemy and pool only the surplus, if any. The Custodian has no better rights than the Y.S.B. would have had if there had been no war. The Y.S.B. were not legally or lawfully entitled to liquidate any of the defendants' branches, even if the Japanese Government purported to order or authorise them to do so, because a belligerent occupying enemy territory during a war has no such power, in international law; even if it was an Act of State, that would not afford a defence to the Y.S.B. if they were now claiming the balance.
These arguments must...
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