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

• Court: High Court (Singapore)
• Judgment Date: 31 May 2012
• Docket Number: Suit No 334 of 2009
• Date: 31 May 2012

South East Enterprises (Singapore) Pte Ltd

Plaintiff

and

Hean Nerng Holdings Pte Ltd and another

Defendant

[2012] SGHC 119

Steven Chong J

Suit No 334 of 2009

High Court

Civil Procedure—Costs—Close connection between plaintiff and its managing director—Whether plaintiff's managing director should be personally liable for defendants' costs

Sheriffs and Bailiffs—Liabilities—Bailiff leaving notice of seizure at the place of seizure—Inventory containing mistakes—Inventory not particularised—Advertisement of public auction based on inventory description—Bailiff leaving notice of sale at the place of seizure—Failing to allow seven days to expire between latest notice of sale and date of actual sale—Judgment debtor claiming that goods which had not been seized were sold—Failing to sell at best price—Whether bailiff acted knowingly in excess of authority—Section 68 (2) Subordinate Courts Act (Cap 321, 1999 Rev Ed)— Order 46 rr 23 and 24 Rules of Court (Cap 322, R 5, 1997 Rev Ed)—Paragraph 82 Subordinate Courts Practice Directions

Tort—Vicarious liability—Judgment creditor directing bailiff as to goods to be seized—Bailiff seizing in excess of judgment debt—Whether bailiff acted as agent of judgment creditor

Words and phrases—‘Knowingly’—Meaning of s 68 (2) Subordinate Courts Act (Cap 321, 1999 Rev Ed)—Section 68 (2) Subordinate Courts Act (Cap 321, 1999 Rev Ed)

The execution debtor (the plaintiff) was a general wholesaler and metal trader involved in the import and export of wood panel and woodworking equipment. It entered into two warehouse service agreements with the execution creditor to store various machine parts in bays A 2, A 3 and A 4 of the latter's premises. When the plaintiff fell into arrears in rent, the execution creditor brought a MC Suit for the amount owed and subsequently obtained a writ of seizure and sale (‘WSS’) to enforce the judgment debt.

The WSS was executed on 11 May 2004 by the bailiff of the Subordinate Courts accompanied by a representative of the execution creditor, who pointed out the machinery to be seized. It was the evidence of both defendants (the execution creditor and the bailiff) that only machinery in bays A 2 and A 3 were identified and seized. The bailiff valued the machinery at S$15,000 and described them as ‘machineries and parts of timber at lot A 2 and A 3 (inside)’ in the notice of seizure and inventory (‘Notice of Seizure and Inventory’), which he left along with a general notice at the warehouse. The first notice of sale was issued on 24 May 2004 but due to a delay in the advertisement of the auction sale a second notice of sale was issued on 7 June 2004. The auction was then held at the warehouse on 11 June 2004, whereupon the seized machinery was sold to the highest bidder for S$51,500. It was subsequently on-sold to a Malaysian business man and transported to his premises in Sibu, Sarawak, where they remained unassembled at the time of the hearings.

Held, dismissing the claim:

(1) The bailiff was not, by default, viewed as the agent of the execution creditor and the onus was upon the party who argued otherwise to establish that special instructions had been issued or that there had been intervention by the execution creditor, such as to render the bailiff his agent. On the facts, no special instructions were issued by the execution creditor so as to render the bailiff his agent. The provision of an indemnity by the execution creditor to the bailiff, without more, was insufficient to establish such a relationship of agency: at [34], [35], [37] and [38].

(2) Under s 68 (2) of the Subordinate Courts Act (Cap 321, 1999 Rev Ed), ‘knowingly’ encompassed actual knowledge and wilful blindness but not notions of constructive or objective knowledge: at [50].

(3) Order 46 r 16 of the Rules of Court (Cap 322, R 5, 1997 Rev Ed) was couched in disjunctive terms such that it was plainly within the rights of the bailiff to leave the Notice of Seizure and Inventory at the execution creditor's warehouse, ie, the place where the WSS was executed: at [59].

(4) Following Odex Pte Ltd v Pacific Internet Ltd [2008] 3 SLR (R) 18, Practice Directions were not binding law. As such, the bailiff did not act in excess of his authority for failing to provide notice of the date and time of seizure since he was under no binding legal duty to comply with para 82 of the Subordinate Courts Practice Directions in the first place: at [61] and [62].

(5) Even if the bailiff had made a mistake in the Inventory, this would necessarily imply that he did not have actual knowledge of the error at the time of its commission. It could not therefore be said that he knowingly acted in excess of authority. Further, the lack of particularity in the bailiff's Inventory did not misrepresent the seized machinery to the prejudice of the execution debtor's interests: at [65] and [66].

(6) There was nothing to suggest that the bailiff had knowingly seized machinery worth in excess of the judgment debt, since he assessed their value to be less than the judgment debt in the Notice of Seizure and Inventory. The bailiff was also under no obligation, either as a matter of practice or under the Rules of Court, to obtain an external valuation for seized machinery: at [70] and [71].

(7) Since the published advertisement was based on the description from the bailiff's Inventory, the claim against him for failing to publish an adequate advertisement could not be made out so long as he believed that the description was accurate. Further, there was no evidence that a different or more detailed advertisement would have attracted more specialised bidders or generated higher prices: at [75] and [76].

(8) On a proper construction of O 46 r 23 of the Rules of Court, the requirement of a seven-day period between the date of notice and date of sale was qualified by the phrase ‘as far as practicable’. Moreover, the four-day period which actually elapsed did not prejudice the execution debtor since the second notice of sale was issued prior to the original auction date stipulated in the first notice of sale: at [79] and [80].

(9) The execution debtor's claim that machinery which had not been seized was nevertheless sold was a ‘res ipsa loquitur’ inference which did not show how, when and who sold the machinery originally stored at bay A 4. The execution debtor failed to fulfil its burden of proof on this count and subsequently abandoned its pleaded position: at [82] and [83].

(10) The WSS only directed the bailiff to levy such property as would satisfy the judgment debt, not to achieve the best price for the execution debtor. Even at common law, the highest at which one could place the bailiff's duty was to obtain a reasonable price for the seized goods: at [84] and [85].

(11) Given that the bailiff did not act as the agent of the execution creditor, the only free-standing claim against the latter pertained to the purported directions given to seize machinery in excess of the judgment debt. However, even the scrap value of the seized machinery could not fairly be regarded as clearly disproportionate to the judgment debt. As for the alleged contractual value of the seized machinery, the plaintiff's evidence was unsatisfactory and inconclusive at best. In any event, it was well-established following Steel Linings Ltd & Mark Harvey v Bibby & Co [1993] RA 27 that the execution creditor was not required to consider what value the execution debtor could have obtained on top of what would realistically be achievable at a public auction: at [90], [92], [94] to [97] and [99].

(12) As for ordering costs against a non-party to the proceedings, it was not clear that the managing director of the execution debtor had personally caused the incurring of costs by the defendants. Such an order against the managing director would not be just given that the execution debtor had already put up a considerable sum as security for costs: at [102].

[Observation: English jurisprudence supported a construction of ‘knowingly’ which also embraced subjective recklessness, but the resolution of this issue was neither pursued by counsel nor necessary for the determination of this application: at [49] and [50].]

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Awtar Singh s/o Margar Singh v PP [2000] 2 SLR (R) 435; [2000] 3 SLR 439 (refd)

Barclays Bank Ltd v Roberts [1954] 1 WLR 1212; [1954] 3 All ER 107 (refd)

Caidan, Re [1942] Ch 90 (refd)

Carter v Simpson 328 F 3d 948 (refd)

Cook, Re (1894) 63 LJ QB 756 (refd)

Curtis v Metro-Goldwyn-Meyer (Oriental) Inc [1931] SSLR 42 (folld)

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DB Trustees (Hong Kong) Ltd v Consult Asia Pte Ltd [2010] 3 SLR 542 (refd)

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Hogan v Smith, SD Ill, 2012, 2012 WL 1435402 (refd)

Hooper v Lane (1857) 6 HLC 443; 10 ER 1368 (refd)

Neumann v Bakeaway Ltd [1983] 1 WLR 1016 (refd)

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Odex Pte Ltd v Pacific Internet Ltd [2008] 3 SLR (R) 18; [2008] 3 SLR 18 (folld)

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PP v Lim Boon Hiong [2010] 4 SLR 696 (refd)

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Distress Act (Cap 84,1996 Rev Ed)

Government Proceedings Act (Cap 121, 1985 Rev Ed) s 6 (3)

Rules of Court (Cap 322, R 5, 1997 Rev Ed) O 46 r 16, O 46 r 23, O 46 r 24 (consd) ; O 46,O 46 r 16 (3)

Subordinate Courts...