Singapore Air Charter Pte Ltd v Peter Low & Choo LLC and another

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 14 October 2020
• Neutral Citation: [2020] SGCA 99
• Plaintiff Counsel: Salem bin Mohamed Ibrahim, Kulvinder Kaur, Ashley Yeo and Kenneth Goh (Salem Ibrahim LLC)
• Date: 14 October 2020
• Docket Number: Civil Appeal No 163 of 2019
• Hearing Date: 18 June 2020
• Subject Matter: Enforcement,Judgments and orders,Civil Procedure,Priority of creditors
• Published date: 17 October 2020
• Defendant Counsel: Attendance of the second respondent dispensed with,Associate Professor Alvin See Wei Liang (School of Law, Singapore Management University) as amicus curiae.,Dr Tang Hang Wu (instructed counsel, TSMP Law Corporation), Peter Cuthbert Low, Choo Zheng Xi, Low Ying Ning Elaine and Wong Thai Yong (Peter Low & Choo LLC)
• Court: Court of Appeal (Singapore)
• Citation: [2020] SGCA 99
• Year: 2020

Judith Prakash JA (delivering the judgment of the court): Introduction

The issue in this appeal may appear to be a rather dry procedural one: which of two competing judgment creditors has priority of claim in respect of the balance proceeds of sale of the judgment debtor’s property. Indeed, this impression may not be dispelled upon reading the judgment revolving as it does around statutory interpretation and reconciling court enforcement procedures with the statutory regime. Having said that, clarifying the legal position in this regard will, we hope, be of assistance not only to the litigants before us but also to future judgment creditors pondering how to enforce their judgments.

Background The facts (Part 1)

The facts are straightforward. The judgment debtor in question is one Mr Danial Patrick Higgins (“the Debtor”). He co-owned an apartment unit in Pasir Ris (“the Property”) which was mortgaged to the second respondent, Malayan Banking Berhad (“the Bank”). On 26 September 2016, judgment was entered against the Debtor in the sum of US$340,500 in favour of the appellant herein, Singapore Air Charter Pte Ltd (“SAC”). Two years later in March 2018, judgment for $394,254.13 against the Debtor was obtained by the first respondent herein, Peter Low & Choo LLC (“PLC”) on account of its legal fees when it represented the Debtor in the action taken by SAC against him. Because the Debtor did not settle the judgment debts, both his creditors took steps to enforce their respective judgments against the Property, using the execution procedures provided for by the Rules of Court (Cap 322, R5, 2014 Rev Ed) (“the Rules”). These procedures are time-sensitive in that they are valid for only limited periods as prescribed by the relevant provisions in the Rules and the legislation regulating the ownership of registered land, the Land Titles Act (Cap 157, 2004 Rev Ed) (“the LTA”). The Property is registered land falling under the LTA.

We now digress from the facts to describe the provisions which set out the possible enforcement actions available to a judgment creditor in respect of real property owned by the judgment debtor. Thereafter, we will come back to the various steps taken by SAC and PLC to attach the Debtor’s interest in the Property.

The legislative and procedural scheme

As is well known, the LTA provides a comprehensive scheme for the ownership of immovable property in Singapore. Most land in Singapore, which term includes apartment units like the Property, is registered on the land-register maintained by the Registrar of Titles. All dealings with a piece of registered land must be entered in the land-register. Generally, interests in registered land must also be notified on the land-register to be effective. The foregoing is stated by way of general introduction only.

Part XIII of the LTA is entitled “Writs and Orders of Court” (“Part XIII”). It is the chapter of the LTA that deals specifically with enforcement action taken by a judgment creditor against registered land belonging to a judgment debtor. There are sections in other parts of the LTA that might have some bearing on issues raised by an enforcement action, but any consideration must start with Part XIII.

The primary sections of Part XIII that we need to have regard to are ss 132 and 134. We reproduce the sections later in this judgment (at [21]). At this point it is sufficient to give a general explanation of the same. Under s 132(1), in order for a parcel of land to be affected by a writ of execution or an order of court which empowers a third party to sell the same, that writ or order of court must be entered in the land-register. The registration of the writ or order will enable the Sheriff or the person named in the order to sell the land and execute a transfer of the land which can be registered against it in the land-register. Once registered, the writ remains valid for a year but, at the expiration of that year, the registration lapses: s 134(1). After the first writ has lapsed, the judgment creditor can still procure the issue of a renewed writ or a subsequent writ on the same judgment and tender the same for registration: s 134(2).

To invoke the seizure provisions of the LTA, the judgment creditor has first to obtain a registrable instrument from the court. The procedure to do so is set out in O 47 of the Rules, the Order being entitled “Writs of Seizure and Sale”. Order 47 Rule 4(1)(a) provides that where a judgment creditor wishes to seize immovable property, that seizure shall be effected by registering an order of court in Form 96 (“the Form 96 Order”) attaching the interest of the judgment debtor in the immovable property. Upon registration, that interest is deemed to be seized by the Sheriff. Under the Rules, the Form 96 Order remains in force for six months unless it is registered on the land-register within that period: O 47 r 4(1)(f).

After registering the Form 96 Order, by O 47 r 4(1)(e), the judgment creditor must file a writ of seizure and sale in Form 83 (“Form 83 Writ”) and an undertaking, declaration and indemnity in Form 87. The Sheriff must then serve a copy of the Form 83 Writ, the corresponding Form 96 Order and the notice of seizure in Form 97 on the judgment debtor or, if the judgment debtor cannot be found, affix the Form 83 Writ to the immovable property: O 47 r 4(1)(e)(iii). Thereafter, the Sheriff can sell the interest of the judgment debtor in the property. The Form 83 Writ remains valid for 12 months from its date of issue but may be renewed: O 46 r 6(1).

The essential question that has arisen in this case is whether it is the Form 96 Order or the Form 83 Writ which qualifies as the “writ of execution” that must be registered under s 132(1) of the LTA.

The facts (Part 2)

We now go back to the steps taken by the parties herein to attach the Property in satisfaction of their respective judgment debts.

We list first the steps taken by SAC: On 23 March 2017, SAC applied for the interest of the Debtor in the Property to be attached to satisfy its judgment debt. On 29 March 2017, the High Court granted this order and it was subsequently extracted in Form 96. On 19 April 2017, SAC lodged its Form 96 Order with the Registrar of Titles for registration in the land-register. It was subsequently registered under instrument number AOC IE/793086A. The effective date of registration was 19 April 2017. On 19 April 2017 as well, SAC applied for the issue of a Form 83 Writ in respect of the Property. Pursuant to this form, the Sheriff attended at the Property on 4 May 2017 and affixed documents to it. Thereafter, SAC wrote to the Bank asking it to consent to the sale of the Property. By mid-August 2017, the Bank had indicated in writing that it would not consent to a sale by SAC as it was not the Bank’s practice to do so. In view of the Bank’s opposition, SAC could not proceed with a sale. Paragraph 80(2) of Part X of the Supreme Court Practice Directions states that the Sheriff shall not be required to proceed with a sale of the immovable property if the execution creditor cannot produce the mortgagee’s written consent to the sale. On 19 September 2017, on its application, SAC was granted an order (“First Extension Order”) that extended by six months the validity of the Form 96 Order it had obtained in March 2017 until 28 March 2018. SAC applied to the Registrar of Titles for registration of the First Extension Order. This application was rejected on 9 December 2017. On 21 March 2018, SAC obtained a further order (“Second Extension Order”) extending the validity of its Form 96 Order for a further six months until 28 September 2018. It applied for registration of the Second Extension Order but the same was rejected by the Registrar of Titles on 30 July 2018. The Registrar of Titles noted that the registration of the Form 96 Order had first to be cancelled before SAC could have the Second Extension Order registered. Apart from attempting to procure the extension of its Form 96 Order, on 5 April 2018, SAC applied for an extension of the Form 83 Writ it had obtained in April 2017. It was granted an order (“WSS Extension Order”) extending the Form 83 Writ for a further twelve months from 18 April 2018 to 17 April 2019. Shortly thereafter, SAC applied to register the WSS Extension Order, but the application was rejected by the Registrar of Titles on 30 July 2018. The next day, SAC applied again for the registration of the WSS Extension Order and it was registered on 19 December 2018, which was six days after the Property had been sold.

As far as PLC was concerned, the steps it took were as follows: On 16 March 2018, PLC was granted an order attaching the Debtor’s interest in the Property. This order was subsequently extracted in Form 96. On 28 March 2018, PLC lodged its Form 96 Order for registration against the Property in the land-register and this registration was effected on 11 April 2018 under instrument No IF/231537E. On 18 April 2018, PLC obtained a Form 83 Writ in respect of the Property. PLC made attempts to register its Form 83 Writ on the land-register but the instrument was rejected.

In the meantime, the Bank had been making efforts to sell the Property. These efforts resulted in an option to purchase being issued in November 2018 and in a mortgagee sale being effected on 13 December 2018. The proceeds of sale were more than sufficient to satisfy the indebtedness due to the Bank and the question then arose as the whether the Debtor’s share of the surplus sales proceeds (“the surplus proceeds”) ought to be paid to SAC or PLC.

Proceedings below

In January 2019, PLC took out an originating summons in the High Court seeking a declaration that it was entitled to the surplus proceeds on the basis that SAC’s Form 96 Order no longer bound the Property because its registration had lapsed in April 2018 pursuant to s 134 of the LTA.

The High Court...