Chapter 33 - Interpleader Proceedings, O.17 Flashcards
INTERPLEADER PROCEEDINGS
Overview
1) General principles
2) Pre-requisites
3) Procedures
GENERAL PRINCIPLES ON INTERPLEADER PROCEEDINGS
Overview
1) What is interpleader
2) Role of stakeholders & effect of interpleader
3) Stakeholder interpleader
4) Sheriff interpleader
GENERAL PRINCIPLES ON INTERPLEADER PROCEEDINGS
What is interpleader
Tong Lee Co Pte Ltd v Koh Chiow Meng:
- it is proceedings to extricate the applicant from the embarrassment of being sued, or likely to be sued, by more than one party in respect of the same subject matter;
- it is also to put the claimants in a position in which, if they are going to insist upon their claims, they should do so when the application was made.
GENERAL PRINCIPLES ON INTERPLEADER PROCEEDINGS
Role of stakeholders & effect of interpleader
Tetuan Teh Kim Teh, Salina & Co. v Tan Kau Tiah & Anor (FC, 2013):
- Effect: No counterclaim can be made against a person who applied for interpleader relief.
- Role: Stakeholders should be impartial and should not play on the same side as one of the claimant
GENERAL PRINCIPLES ON INTERPLEADER PROCEEDINGS
Stakeholder interpleader
Lee Heng Moy (f) v John Hancock Life Insurance (M) Bhd:
- Whenever two or more persons make a claim for a sum of money, goods or chattel held by a person, and this person is unsure as to the rightful owner.
GENERAL PRINCIPLES ON INTERPLEADER PROCEEDINGS
Sheriff interpleader
Overseas Investments Pte Ltd v O’Brien & Anor:
- Where D is sued by P claiming property held by D in which D has no interest but which is also claimed by a third party, D may take out and serve a summons on both claimants for an order that the issue as to ownership be decided between them.
- Interpleader summons is filed by the sheriff/bailiff when two or more persons claim that the goods seized (during execution of a judgment) belong to them and not the judgment debtor.
PRE-REQUISITES TO APPLY FOR INTERPLEADER
Overview
1) Real expectation of being sued
2) Must not collude
3) Truly disinterested
PRE-REQUISITES TO APPLY FOR INTERPLEADER
Real expectation of being sued
Hong Leong Bank Bhd v Manducekap Hi-Tec Sdn Bhd:
- In seeking interpleader relief, an applicant must genuinely face a potential suit by one or more persons;
- i.e. the applicant must have some real expectation of being sued.
PRE-REQUISITES TO APPLY FOR INTERPLEADER
Must not collude
Murietta v South American Co. Ltd:
- The applicant must not collude with any of the claimants;
- i.e. collusion is said to mean ‘playing the same game’.
- if the applicant agreed to do so or has taken an indemnity from the claimant, there is collusion.
PRE-REQUISITES TO APPLY FOR INTERPLEADER
Must be truly disinterested
Murietta v South American Co. Ltd:
- A party may be said to have an interest in the subject matter, even though he claims no right of property, if he has a financial stake in the result of the proceedings.
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Overview
1) Mode of application
2) Service
3) Supporting evidence
4) Hearing
5) Powers of court
6) Withdrawal or admission
7) Other orders the court may make
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Which court & mode of application
1) Which court:
- S.69 + S.73 CJA: Sessions Court has the jurisdiction to grant relief by way of interpleader.
2) Mode of application - O.17, r.3
General rule:
By way of originating
summons.
Form:
Exception:
Form for exceptions:
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Service
O.17, r.4
Personal service:
How many days:
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Supporting evidence
1) The law:
- O.17, r.3(2)
2) Scope - Tan Kim Khuan v Tan Kee Kiat (M) Sdn Bhd:
- Summons (except that of a sheriff) must be supported by evidence that the applicant:
- (a) claims no interest in the subject-matter in dispute other than for charges or costs;
- (b) does not collude with any of the claimants to that subject-matter; and
- (c) is willing to pay or transfer that subject-matter into Court or to dispose of it as the Court may direct.
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Hearing
O.17, r.5
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Powers of court - overview
1) Dismissal
2) Decides summarily
3) Trial of an interpleader issue
4) Withdrawal or admission
5) Other orders that court may make
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Dismissal
Court may dismiss the OS or notice of application if r.1 & r.3 is not being complied.
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Decides summarily
1) O.17, r.5(2):
- Commonly adopted in clear and straightforward cases;
- e.g. where expedition is desirable in cases where goods are likely to deteriorate if proceedings are delayed.
2) Ref. Ee & Lim Advocates v Gin Nam Development Corp Sdn Bhd & Anor:
- issue between the claimants involved interpretation of the provision in a sale & purchase agreement.
- The facts are not in dispute and sufficiently set out in the affidavit.
- Court decided the O.17 application summarily.
3) cf. Ref. Fredericks and Pelhams Timber Buildings v Wilkins (Read, Claimant):
- Where the goods are of considerable value and there are difficult questions of law, summary disposal of the matter will be inappropriate.
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Trial of an interpleader issue
O.17, r.11:
- appropriate for cases requiring careful and detailed investigation of the issues.
- The court may give directions pertaining to discovery, inspection and interrogatories and other interim steps to be taken prior to the full trial – rr 10 and 11;
- A trial of interpleader is a trial proper, any order made is thus final and subject to rules applicable to appeal.
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Withdrawal or admission
O.17, r.7A
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Other orders that court may make - overview
1) Payment into court
2) Sale of goods
3) Order as to costs in Sheriff interpleader
4) Order as to costs in stakeholders interpleader
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Payment into court
the court may order one party to either make payment into court of an amount representing the value of the goods or give security before making an order to release the goods to him.
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Sale of goods
r.6 & r.8:
if the goods are perishable, the court may, for the sake of saving costs and charges on holding onto the goods, order that the goods be sold under r.6 and 8.
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Order as to costs in Sheriff interpleader
- If the claimant fails, the sheriff is entitled to costs from the date of the notice of claim or from the date of sale, whichever is earlier.
- If the claimant succeeds, the sheriff is entitled to claim costs as against the execution credit from the date the sheriff was authorized to take the interpleader action;
- the successful claimant is also entitled to costs against the execution creditor from the return date of the originating summons / notice of application.
- The court may also make order as to payment of the charges and expenses incurred by the sheriff.
PROCEDURES FOR INTERPLEADER PROCEEDINGS
Order as to costs in stakeholders interpleader
1) Entitlement to costs - Goodman v Blake:
- The applicant is entitled to costs up to the date he brought into court the amount claimed and this will be borne by the unsuccessful claimant.
2) Guidelines to order for costs - Hong Leong Bank Bhd v Manducekap Hi-Tec Sdn Bhd:
- Generally, no costs should be ordered against an applicant in an interpleader, unless:
- where the application was unnecessary;
the applicant had refused to withdraw the application when given the opportunity to do so; - the application was made after an inordinate delay.
- The court may also make order as to payment of the charges and expenses incurred by the applicant.
