South East Enterprises (Singapore) Pte Ltd v Hean Nerng Holdings Pte Ltd

• Jurisdiction: Singapore
• Court: Court of Appeal (Singapore)
• Judgment Date: 15 March 2013
• Docket Number: Civil Appeal No 74 of 2012
• Date: 15 March 2013

South East Enterprises (Singapore) Pte Ltd

Plaintiff

and

Hean Nerng Holdings Pte Ltd and another

Defendant

[2013] SGCA 25

Sundaresh Menon CJ

,

Andrew Phang Boon Leong JA

and

V K Rajah JA

Civil Appeal No 74 of 2012

Court of Appeal

Sheriffs and Bailiffs—Duties—Liabilities—Bailiff seized goods in excess of value of judgment debt—Whether there had been excessive seizure by bailiff—Whether bailiff exercised reasonable and honest discretion in choosing how much of execution debtor's property to be seized—Section 68 (2) Subordinate Courts Act (Cap 321, 1999 Rev Ed)

Sheriffs and Bailiffs—Liabilities—Execution creditor directing bailiff as to goods to be seized—Execution creditor assuming responsibility for directing bailiff as to goods to be seized—Bailiff seizing in excess of judgment debt—Whether execution creditor might be made liable for any excessive seizure by bailiff

Words and Phrases—Meaning of ‘execution of or attempting to execute such writ’ in s 68 (2) Subordinate Courts Act (Cap 321, 1999 Rev Ed)—Whether bailiff was protected under s 68 (2) Subordinate Courts Act (Cap 321, 1999 Rev Ed) from liability for excessive seizure—Section 68 (2) Subordinate Courts Act (Cap 321, 1999 Rev Ed)

The execution debtor entered into two warehouse service agreements with the execution creditor to store various machine parts in bays A2, A3 and A4 of the latter's premises. When the execution debtor fell into arrears in rent, the execution creditor brought a suit for the amount owed and subsequently obtained a writ of seizure and sale (‘the Writ’) against the execution debtor's property in the warehouse to enforce the judgment debt of $29,771.57.

Before the execution of the Writ, the execution creditor's representative gave the bailiff of the Subordinate Courts a signed indemnity which indemnified the bailiff of all claims, and authorised the representative to point out the items of the execution debtor to be seized. The Writ was executed on 11 May 2004 by the bailiff, accompanied by the execution creditor's representative who pointed out the items to be seized. The bailiff valued the seized items at $15,000. After the seizure, the execution creditor's representative signed an indemnity at the bottom of the inventory, which acknowledged that he pointed out the items that were seized by the bailiff, and which indemnified the bailiff against any claims for wrongful seizure.

The auction was then held at the warehouse on 11 June 2004, whereupon the seized items were sold to the highest bidder for $51,500. It was subsequently on-sold to a Malaysian business associate for $132,174.

The Judge dismissed the execution debtor's claims and held that the bailiff did not breach any common law or statutory duty, and that the bailiff was in any event protected by s 68 (2) of the Subordinate Courts Act. The Judge held that the execution creditor was not in any event liable for any breach of duty as no agency relationship arose between the bailiff and the execution creditor.

Held, allowing the appeal against the first respondent, and dismissing the appeal against the second respondent:

(1) The bailiff has a duty to seize only such quantity of goods as would be reasonably sufficient to pay the judgment debt: at [22] and [23] .

(2) To succeed in an excessive seizure claim, the execution debtor must show that the bailiff had the opportunity to seize fewer goods or goods of lesser value than he actually seized, and the seizure was obviously excessive or clearly disproportionate to the judgment debt: at [28] and [29] .

(3) It was a defence to an excessive seizure claim if the bailiff or the execution creditor's representative, when choosing how much of the execution debtor's property to seize, exercised a reasonable and honest discretion in estimating what the goods would realise at auction: at [26] and [27] .

(4) In the present case, there was excessive seizure as the seized items were obviously excessive and clearly disproportionate to the judgment debt. The sale price at the auction was almost twice the amount of the judgment debt, and the on-sale price was 4.5 times the judgment debt. Even after a 20% discount was applied to reflect the forced sale value of the seized items, the value of the seized items was about 3.5 times the judgment debt: at [32] .

(5) In the present case, the bailiff did not exercise a reasonable discretion in estimating what the goods would realise at an auction when he chose how much of the execution debtor's property to seize. The bailiff did not have a basic understanding of the nature and value of the seized items, and failed to take basic steps to ensure the accurate seizure of the items: at [33] and [34] .

(6) The effect of s 68 (2) of the Subordinate Courts Act was that no liability would attach to a bailiff who seized excessively unless it was established that he had knowledge that he was acting beyond his authority: at [45] and [56] .

(7) In the present case, the bailiff was protected from any liability for excessive seizure by s 68 (2) of the Subordinate Courts Act, and the bailiff did not have knowledge that he was acting beyond his authority because the seized items were old and rusty, and there were insufficient facts suggesting to the bailiff that the seized items were in fact highly valuable: at [57] and [58] .

(8) A bailiff would be deemed to be an agent of the execution creditor for the purpose of assigning liability to the execution creditor where the execution creditor took an active part in the actual execution so as to identify himself with any wrongful act of the bailiff. Whether the execution creditor had played a sufficiently active part in the execution was in the final analysis always a question of fact: at [73] .

(9) In Singapore, the execution creditor, or his representative, was required to identify the property to be seized by the bailiff. When the execution creditor took an active part in the actual execution by identifying the items to be seized, or assumed the responsibility for identifying the property to be seized, the execution creditor assumed the risk of excessive seizure and was hence liable for any excessive seizure: at [79] .

(10) In the present case, the execution creditor had assumed the responsibility for identifying the property to be seized and the risk for any excessive seizure. This was shown by the Writ which instructed the bailiff to seize the execution debtor's property as was to be identified by the execution creditor, the execution creditor's signing of the indemnity which indemnified the bailiff against all claims arising from the execution, and the execution creditor's signing of the inventory list, which acknowledged that he pointed out the items seized by the bailiff, and which indemnified the bailiff against any claim for wrongful seizure: at [81] and [82] .

(11) The execution creditor did not exercise a reasonable discretion in estimating what the goods would realise at auction when he authorised how much of the execution debtor's property was to be seized. This was because the execution creditor's representative only pointed the bailiff to where the execution debtor's items were generally at, without being by the bailiff's side when the actual seizure of the individual items was taking place so as to identify the exact items to be seized, nor did he check the quantity or ascertain the value of the items seized when he signed the inventory: at [84] .

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Courts Ordinance 1934 (SS Ord No 17 of 1934) ss 84, 86

Courts Ordinance (Cap 3, 1955 Rev Ed) s 105

Rules of Court (Cap 322, R 5, 2004 Rev Ed)

Rules of Court (Cap 322, R 5, 2006 Rev Ed)

Subordinate Courts Act (Cap 14, 1970 Rev Ed) s 68

Subordinate Courts Act (Cap 321, 1999 Rev Ed) s 68 (2) (consd)

Courts of Judicature Act 1964 (M'sia) s 14 (2)

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