Key Points 

  • Traditionally, a joint account in the name of a judgment debtor and non-judgment debtors cannot be subject to attachment under a garnishee order. Although this has been the consistent position taken by Commonwealth jurisdictions, the Canadian case of Smith v Schaffner [2007] NSJ No. 294 sought to depart from this ruling. Shortly thereafter, a provision was enacted in the Nova Scotia Civil Procedure Rules allowing for the garnishment of joint accounts even if the debt was not owed by all the account holders
  • The recent Singapore case below, in declining to follow Smith v Schaffner, affirmed the Commonwealth position that in the interests of fairness, judgment creditors should not be permitted to garnish joint accounts where the debt is not owed by all the joint account holders.

The Facts

The second plaintiff (the Plaintiff) obtained summary judgment against the Defendant and took out a garnishee order against DBS Bank Ltd (the Garnishee) for the Garnishee to show cause. The relevant account belonged to the judgment debtor and his wife.

The Plaintiff obtained a favourable ruling in the lower court.

High Court Decision

Upon appeal however, the High Court reversed the decision and held that the account ought not to be garnished. In coming to this decision, the High Court relied on the following policy considerations:

  • It is difficult for banks to ascertain the correct proportion of monies in the joint account to be attached to a garnishee order if judgment creditors are allowed to garnish bank accounts belonging to a judgment debtor and non-judgment debtors
  • The possibility of banks notifying other joint account holders who may challenge the order will significantly escalate costs
  • Difficulties will arise if the account is frozen between the period of service of the order to show cause and the order being made final, which will prejudice the interests of the innocent joint account holders.

Comment

This case illustrates Singapore’s robust approach when it comes to principles governing enforcement proceedings.

The court places the risk of the judgment debtor holding joint accounts with non-judgment debtors squarely on creditors, rather than on the innocent joint account holders.

One Investment and Consultancy Limited v Cham Poh Meng [2016] SGHC 208